S.F. Holding Co., Ltd. 2018 Semi-Annual Report
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
S.F. Holding Co., Ltd.
2018 Semi-Annual Report
August 201 8
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Notice
The Company prepared its 2018 Semi-Annual Report in accordance withrelevant regulations and guidelines set forth by the China Securities RegulatoryCommission and the Shenzhen Stock Exchange, including the “Publicly ListedCompany Information Disclosure Content and Format Guideline No. 3 –Semi-Annual Report Content and Format,” the “Shenzhen Stock Exchange ListingRules,” the “Shenzhen Stock Exchange Standard Operating Guidelines forSmall and Medium Enterprises,” and the “Small and Medium EnterpriseInformation Disclosure Memorandum No. 2 – Matters Related to PeriodicDisclosures.” The Company’s 2018 Semi-Annual Report was prepared andpublished in Chinese and the below English version is for reference only. Shouldthere be inconsistency between the Chinese version and the English version, theChinese version shall prevail. Investors can access the Company’s 2018 Semi-Annual Report on Cninfo (www.cninfo.com.cn), which is designated by theChina Securities Regulatory Commission for Publishing the Semi-AnnualReport.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 1 Important Information, Table of Contents, a nd Definitions
The company's Board of Directors, Board of Supervisors, directors, supervisors,and senior management hereby guarantee that the contents of the Semi-AnnualReport are true, a ccurate, and complete, and that there are nomisrepresentations, misleading statements, or material omissions, and shallassume individual and joint legal liabilities.Wang Wei, the Company's responsible person, NG Wai Ting, the person incharge of accounting work, and Wang Lixiu, the person in charge of theaccounting department (accounting officer), hereby declare and warrant thatthe financial report within the Semi-Annual Report is true, accurate, andcomplete.All directors have attended the the Board meeting approving the Semi-AnnualReport.Forward-looking statements such as future development plans in this report donot co nstitute the company's promise to investors. Investors are advised to investrationally and to take into account possible investment risks.The company is required to comply with the disclosure requirements presentedin the Shenzhen Stock Exchange for Industrial Information Disclosure No.9 -Listed Companies Engagedin the Express Delivery Services Business.
In this Semi-Annual Report, the company details the possible risk factors andcountermeasures that may occur in the future. For more information, refer to "Section 1 0. Possible Risks and Countermeasures," found in "Chapter 4.Management Discussion and Analysis of Business Operation." Investors shouldrefer to this information.The company does not plan to issue cash or stock dividends, nor to convertcapital reserve into share capital.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Table of Contents
Chapter 1 Important Information, Table of Contents, and Definitions ...... 2
Chapter 2 Company Profile and Key Financial Indicators ...... 6
Chapter 3 Business Overview ...... 10
Chapter 4 Management Discussion and Analysis of Business Operation ...... 43
Chapter 5 Significant Events ...... 75
Chapter 6 Share Changes & Shareholder Details ...... 99
Chapter 7 Preferred Shares ...... 105
Chapter 8 Directors, Supervisors and Senior Managers ...... 106
Chapter 9 Corporate Bonds ...... 107
Chapter 10 Financial Statements ...... 108
Chapter 11 Document s Available for Reference ...... 260
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Definitions
Term DescriptionReporting period January 1, 2018 to June 30, 2018The same period of
last year
January 1, 2017 to June 30, 2017The company,
SF Holding
2017.RMB Renminbi RMB
Mingde Holdings
S.F. Holding Co., Ltd. The company is formerly known as Ma’anshan Dingtai Rare Earth& New Materials Co., Ltd. After completing a major asset restructuring (as definedbelow) in December 2016, it was officially renamed to S.F. Holding Co., Ltd. in FebruaryShenzhen Mingde Holdings Development Co., Ltd., the controlling shareholder of S.F.
Holding Co., Lt d.Dingtai New
Materials
| Shenzhen Mingde Holdings Development Co., Ltd., the controlling shareholder of S.F. |
| Ma’anshan Dingtai Rare Earth & New Materials Co., Ltd. The predecessor of S.F. |
Holding Co., Ltd., it was renamed to S.F. Holding Co., Ltd. in February 2017.Taisen Holdings Shenzhen S.F. Taisen Holdings (Group) Co., Ltd., a subsidiary of S.F. Holding Co., Ltd.Shun Da Feng Run Ningbo Shun Da Feng Run Investment Management Partnership (Limited Partnership)Jia Qiang Shunfeng Jia Qiang Shunfeng (Shenzhen) Equity Investment Partnership (Limited Partnership)Zhao Guang
Investment
Shenzhen Zhao Guang Investment Co., Ltd.Oriza Shunfeng
Partnership)Gu Yu Qiu Chuang Suzhou Gu Yu Qiu Chuang Equity Investment Partnership (Limited Partnership)Shun Xin Feng He Ningbo Shun Xin Feng He Investment Management Partnership (Limited Partnership)
The restructuringcounterparties
Suzhou Industrial Park Oriza Shunfeng Equity Investment Company (Limited
Shenzhen Mingde Holdings Development Co., Ltd., Ningbo Shun Da Feng RunInvestment Management Partnership (Limited Partnership), Jia Qiang Shunfeng
(Shenzhen) Equi
| ty Investment Partnership (Limited Partnership), Shenzhen Zhao Guang Investment Co., Ltd., Suzhou Industrial Park Oriza Shunfeng Equity Investment Company (Limited Partnership), Suzhou Gu Yu Qiu Chuang Equity Investment |
Partnership (Limited Partnership), a
Management Partnership (Limited Partnership)Major asset
restructuring
In December 2016, all assets and liabilities (exchange-
| nd Ningbo Shun Xin Feng He Investment |
| out assets) of the company's |
predecessor, Dingtai New Materials, was replaced with the equi
(exchange-
| in assets) of Taisen Holdings held by all shareholders of Taisen Holdings as of |
December 31, 2015. The difference between the exchange-in assets and the exchange-outassets was purchased by Dingtai New Materials, the company's
shareholders of Taisen Holdings, in the form of issuing shares.Exchange-out assets
| predecessor, from all |
| All assets and liabilities of the company's predecessor, Dingtai New Materials, as of |
December 31, 2015.Exchange-in assets 100% equity of Taisen Holdings as of December 31, 2015.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Term DescriptionHive Box T echnol ogy Hive Box Technology Co., LtdSF Investment Shenzhen SF Investment Co., Ltd. It is a subsidiary of S.F. Holding Co., Ltd.Chengdu FengCheng Chengdu FengCheng Logistics Co., Ltd. It is a subsidiary of S.F. Holding Co., Ltd.SF Technology SF Technology Co., Ltd. It is a subsidiary of S.F. Holding Co., Ltd.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 2 Company Profile and Key Financial Indicators
I. Company Profile
Stock Abbreviat ion SF Holding Stock Code 002352Changed Stock Abbreviation (If Any ) SF HoldingListed Stock Exchange Shenzhen Stock ExchangeChinese Name of the Company顺丰控股股份有限公司
Chinese Name Abbreviation of the Company顺丰控股
English Name of the Company (If Any) S.F. Holding Co., Ltd.English Name Abbreviation
(If Any)
SF HoldingLegal Representative of the Company Wang WeiRegistered Address
of the CompanyRoom 801, Floor 8, Wanfu Building, No. 303 Fuyong Avenue,
Bao'an District, Shenzhen, ChinaZip Code of Registered Address 518103
Office Address
Wanji Business Building, Xinzhou 11
th
Room 801, Floor 8, Wanfu Building, No. 303 Fuyong Avenue,Street, Futian Di strict,
Shenzhen, Guangdon g Provi nceZip Code of Office Address 518048Company Website www.sf-express.comEmail sfir@sf-express.com
II. Contacts and Contact Methods
Board Secretary Securities Affairs RepresentativeName Gan Ling Zeng Jing
Address
Street, Futian Di strict,Wanji Business Building, Xinzhou 11th Street,
Futian Distri ct, Shenzhen, Guangdo ng Provi nce
| Wanji Business Building, Xinzhou 11th Street, | Wanji Business Building, Xinzhou 11th Street, |
Futian Distri ct, Shenzhen, Guangdo ng Provi nceTel No. 0755-36395338 0755-36395338Fax 0755-36646400 0755-36646400Email sfir@sf-express.com sfir@sf-express.com
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
III. Other Information
1. Corporate Contact InformationWere there any changes to the company’s registered address, office address or postal code, company website, oremail address during the reporting period?
√ Yes □ No
Registered Address
District, Shenzhen, ChinaZip Code of Registered Address 518103
Office Address
Wanji Business Building, Xinzhou 11th Street, Futian District,Shenzhen, Guangdon g Provi nce
Zip Code of Office Address 518048Company Website www.sf-express.comEmail sfir@sf-express.comDisclosure date on website (if available) December 28, 2018; January 13, 2018
Website disclosure index (if available)
“Announcement of Eleventh Meeting of the Fourth Board ofDirectors” (release number 2017-083); “Announcement of Change toRegistered Address and Revisions to Company By-Laws” (releasenumber 2017-085); “Announcement of First 2018 Ad HocShareholder’s Meeting” (release number 2018-002)
2. Information Disclosure and Location of ReportWere there any changes to information disclosure and location during the reporting period?
□ Yes √ No
There were no changes to the name of the newspaper designated for information disclosure, to the address ofwebsite designated by the China Securities Regulatory Commission for semi-annual report publication, nor to thestorage location of company’s semi-annual report during the reporting period. Refer to the company’s 2017 annualreport for details.
IV. Key Accounting Information and Financial Indicators
Does the company need to adjust its financial information retrospectively or restate its previous year accountinginformation?
√ Yes □ No
Rationale for retrospective adjustments or restatementsBusiness combination involving enterprises under common control
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Current reporting
period
The same period of previous year
over the sameperiod of previous
| year |
Before adjustment After adjustment After adjustmentRevenue (RMB)
32,160,932,363.81
| 42,503,599,511.93 |
32,160,932,363.81
32.16%
| Net profit attributable to |
shareholders of the parent
2,233,730,274.21
| company (RMB) |
1,883,626,237.90
1,883,626,237.90
18.59%
| Net profit after deducting non-recurring profit or loss attributable |
to shareholders of the parent
2,090,372,413.37
| company (RMB) |
1,793,923,471.79
1,793,923,471.79
16.53%
| Net cash flow from operating activities (RMB) | 2,280,581,118.96 |
1,805,856,072.13
1,805,856,072.13
26.29%
| Basic earnings per share (RMB/share) |
0.51
0.45
0.45
13.33%
| Diluted earnings per share (RMB/share) |
0.51
0.45
0.45
13.33%
| Weighted average return on net assets |
6.67%
8.84%
8.84%
-2.17%
End of the current
reporting period
End of previous year
| Increase/Decrease Over Previous Y ear End |
Before adjustment After adjustment After adjustmentTotal assets (RMB) 58,999,764,416.96
57,660,164,354.37
57,675,992,724.92
2.30%
| Total equity attributable to |
shareholders of the parent
33,861,412,339.63
| company (RMB) |
32,680,826,795.10
32,695,818,058.81
3.56%
Note: ROE fell 2.17% year over year, mainly due to the increase in capital during the third quarter of 2017.
V. Differences arising from accounting standard of the PRC and the International AccountingStandards
1. Differences b etween net profits and net assets disclosed in the financial reports in accordance with
Chinese accounting standards and international accounting standards
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in accordance with Chineseaccounting standards and those disclosed in accordance with international accounting standards in thereporting period.
2. Differences between net profit and net assets disclosed in the financial reports in accordance with
Chinese accounting standards and overseas accounting standards
□ Applicable √ Not applicable
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
There is no difference between the net profits and net assets disclosed in accordance with Chineseaccounting standards and t hose disclosed in accordance with overseas accounting standards in the reportingperiod.
VI. Non-Recurring Profit or Loss
√ Applicable □ Not Applicable
Unit: RMBAmount NoteGains on disposals of non-current assets (including offsetting amount
for the provision of impairment of assets)
83,365,835.91
Government grants recognized in profit or loss for the current period(excluding government grants that are closely related to thecompany’s business operations, in accordance with national uniformstandards)
104,740,498.52
Net profit or loss from the beginning of the period to the acquisitiondate arising from the business combination under common control
-13,494,110.16
Gains or losses from changes in fair value of financial assets andliabilities held for trading and investment, the disposal of financialassets and liabilities held for trading, and available-for-sale financialassets, excluding hedging activities related to the normal businessoperations of the company
-7,644,717.08
Net amount of other non-operating income and expenses -11,214,444.33
Less: Income tax effect 11,671,788.69
Less: Profit or loss attributable to minority shareholders (after tax) 723,413.33
Non-
| recurring profit or loss attributable to shareholders of parent |
company
143,357,860.84
--
Provide explanations for classifying non-recurring profit and loss items defined or listed in the ExplanatoryAnnouncement No. 1 for Public Company Information Disclosures - Non-recurring Profits and Losses, and forclassifying non-recurring profit and loss items listed in the Explanatory Announcement No. 1 for Public CompanyInformation Discl osures - Non-recurring Profits and Losses as recurring profit and loss items.
□ Applicable √ Not applicable
The company has not classified non-recurring profit and loss items defined or listed in the ExplanatoryAnnouncement No. 1 for Public Company Information Disclosures - Non-recurring Gains and Losses as recurringprofit and loss items in the reporting period.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 3 Business Overview
I. Primary business activities during the reporting period
Is the company required to comply with disclosure requirement of a particular indutry?Yes
Express Delivery Service Industry
SF Holding is a leading integrated logistics service provider in China. Utilizing big data analytics and cloudcomputing technologies, SF provides its customers with integrated logistics services from transportation towarehousing management, from sales forecasting and data analytics to settlement and cash management, as wellas supply chain management services. Our logistics products mainly include express services such as expressdelivery, economy express delivery, intra-city delivery, warehousing services, and international express delivery;heavy cargo transportation services such as logistics cargo and heavy cargo express; and cold chain transportationservices for fresh produce and food products, and pharmaceutical industry customers. In addition, SF Holdingprovides value-added services such as insurance and Cash on Delivery (COD) to meet the specific needs ofcustomers.
Based on the diverse needs of different industries and customers, SF Holding is upgraded to adopt a"customer-centric, demand-driven" product design philosophy, focuse on each industry’s unique characteristicsand pain points, and drill into customer requirements for different use cases within the end-to-end process. ThusSF is able to design suitable products and services for customers while taking into account customization needs,creating value-added differentiation. Such product design subsequently drives internal resource allocation,optimizing the product system.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
SF Holding is also a smart logistics o perator with network scale advantages. SF Holding has a vast logisticsnetwork both at home and abroad, including an "aviation network" consisting of all-cargo aircraft, commercialflight, and drones; a "ground network" consisting of service points, transit and distribution service points, landtransportation networks, customer hotline networks, and last mile networks; and an "information network"consisting of various AI automation devices, AI recognition technology for voice and machine graphics, smartdecision-making, SF Maps, big data ecosystems, digital warehouses, and smart packaging. The three networks areintegrated into one “aviation + ground + information” network. This directly operated network has domestic andoverseas coverage and is a comprehensive logistics network system with the most powerful network control, thehighest stability, and the most unique resources in the industry domestically.
SF Holding adopts a direct operating model. The headquarter implements centralized operations andmanagement of each branch office. It also centralizes collection, delivery, distribution, processing, transit, andtransportation, and allocates network resources according to the actual needs of business development. At thesame time, SF Holding uses a large number of information technologies to ensure that the entire networkimplements uniform standards and has established a number of industry-leading service information systems toensure overall network operations quality. SF Holding is currently the first directly operated express delivery A-share company.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
II. Major Changes in Key Assets
1. Major Changes in Key Assets
ChangesEquity assets Increased due to increased investment in joint ventures and associatesAvailable-for-sale financial assets Increased due to increased investmentFixed assets
Increased due to increase in electronic equipment, aircraft, andaccessories
Intangible assets
Increased due to the purchase of land use rights and the completion ofself-developed software
Construction in progress Increased due to aircraft refit and other engineering projectsCash at bank and on hand
purchase of long-term assetsNotes receivable and accounts receivable
| Decreased due to the purchase of wealth management products and the | |
No major changesOther current assets Increased due to the increase in wealth management productsOther non-current assets Increased due to prepayment office buildings and aircraft purchases
2. Key Overseas Assets
√ Applicable □ Not applicable
Method ofFormation
Asset Size
（RMB）
Location
Operating
Model
Controls
Net Profits
（RMB）
Proportion
ofCompany'sNet Assets
Significant
Risk ofImpairment
?
Acquisition 4,029,235,772.82 Hong Kong
Industrial
park
—— 10,297,681.61 11.90% No
III. Core Competitiveness Analysis
Is the company required to comply with disclosure requirement of a particular indutry?YesExpress Delivery Service Industry
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
(I) SF Holding has developed extensive technological capabilities
SF Holding continues to emphasize and proactively invest in its smart logistics infrastructure in order tointegrate the application of technologies such as artificial intelligence, Internet of things, machine learning, andsmart devices. Enabling the logistics industry to enter the new age of intelligence, digitization, visualization, andprecision allows machines to relieve human labor, for artificial intelligence to aid in making decisions, and forsmart devices to harness data while also improving operational efficiency, aligning with customers end to end, andincreasing enterprise value.Talent: As of the end of the reporting period, SF Holding employed 4,514 technology personnel, includingoutsourced labor. Of these, 64% hold bachelor’s degrees degrees, 16% hold master’s or doctorate degrees, anddozens are expert consultants. In addition, SF Technology hired a large number of experts in high technologyfields such as big data and artificial intelligence from 11 top tier universities domestically and overseas, includingthe Georgia Institute of Technology and the Hong Kong University of Science and Technology. Cooperation wasalso strengthened with 12 research enterprises to promote the formation of smart logistics teams and to promotetechnical exchange and integration.Technology: As of June 30, 2018, SF Holding had obtained or applied for 1,254 patents, of which 458 wereinvention patents. Primary smart logistics projects include:
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
1. Logistics Drones
Logistics drones are the special forces of the logistics industry. Intelligent, efficient, flexible, and costeffective, logistics drones can help to solve the last-mile delivery of the express industry and provide high-quality,undifferentiated services for customers in the remote areas of the Midwest China. As a symbol of the logisticsindustry’s entrance into the industry 4.0 era, logistics drones have become an important strategic product forlogistics enterprises worldwide to strengthen their core competitiveness in the future.
SF Holding has a comprehensive plan for massive deployment of logistics drones for commercial purposes.It aims at building a standard management system for the R&D, flight-testing, and operations of logistics dronesunder various complex scenarios to complement the existing transportation capacity of the company and extendservice coverage. Logistics drones are expected to carry out transportation tasks across mountains and rivers,achieve point-to-point transportation and even asynchronous handover, and resolve transportation challenges invarious special scenarios. The independent UAV R&D team has mastered the core technology of logistics dronesand been granted 220 patents, of which 118 are invention patents, covering drone design, cloud platform,operation management, and other logistics drone development and application-related fields. These outstandingachievements include two models of drone -- multicopters and VTOL fixed-wing drones, core avionics systems,ground control systems, and communication systems. On the production side, through cooperation with domesticand foreign advanced drone manufacturers, SF has produced a variety of civil drones with different loadingcapacities and flight distances for different geographical locations and operating scenarios.
In June 2017, the application of demonstration airspace for logistics drones operation that filed inconjunction with the government of Nankang District, Ganzhou City, Jiangxi Province, was officially approved. Itwas the first-ever of its kind granted in China that was jointly promoted by enterprise, regulatory agencies, andlocal governments. On June 29, 2017, the first operational flight was carried out in the approved airspace. InOctober 2017, SF became the first domestic pilot enterprise with legal business operations approved by CAAC,and the only enterprise delegated by CAAC to develop the Logistic Drone Industry Standard. On December 11,2017, SF Holding formally registered its logistics drone operations enterprise, Jiangxi Fengyu Shuntu TechnologyCompany, Ltd.. On March 27, 2018, the East China office of the CAAC awarded Jiangxi Fengyu ShuntuTechnology Company, Ltd. the country’s first drone operator (pilot) license. This means that delivery usinglogistics dr ones has entered into a legal operations stage in China, which is a milestone in the development ofChina’s logistics drones.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Based on its practical application of logistics drones, SF Holding explores new business and transportationmodels, such as farm f resh delivery and regional specialty products distribution. Currently, SF Holding is usinglogistics drones to perform pilot distribution services in Nankang District, Ganzhou City, Jiangxi Province.
The company hopes to connect its aviation networks to the spokes of its hubs through logistics drones,providing aviation network coverage for cities categorized as third-tier and below, thus greatly improves logisticsefficiency. In the near future, shipments are expected to arrive at any place throughout the country within 36 hoursby a three-segment air transport network inter-woven by “large, normal flights + large drones spokes + last-milesmall drones”, covering complex terrain and remote areas.
2. AI automation
Incorporating elements of AI is an important cornerstone of our efforts to lead the industry into theinformation age. It means reducing the daily high demand for manpower in an efficient, automated, and smart wayfor the entire express delivery process while maximizing user experience, ensuring produce safety, guaranteeingdelivery timeliness, and improving employee comfort. Ultimately, it promotes the transformation of the logisticsindustry from labor-intensive to smart and more pleasant to employees. As an important symbol of smart logistics,AI automation will be an indicator of logistics companies’ ability to serve customers and enhance user stickiness.Based on real-world business settings in all stages of logistics, SF Holding has created a comprehensive layout ofAI automation capabilities to enhance the fault tolerance of logistics systems, improve the ability to solvecomplex problems, and reduce the impact of human errors on the quality of logistics services.
(1) Automated sorting equipment
Fully harnessing its ability to conduct independent research and development, SF Holding’s AI automationteam applied smart transit and automated sorting technology to deploy automated express delivery and logisticssorting equipment. This enabled 24-hour continuous, high-speed package processing, effectively improving on-site processing capacity, lowering sorting error rates, and improving customer service quality.Currently, SF Holding has developed low-cost, reliable, medium-speed push-arm manual sorting systems, balancewheel sorting systems, and cross-belt sorting systems to serve various sorting needs. Fully developed in-house,from hardware and structure to control algorithms and system software, these solutions have been deployed inbatches in transit centers.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
(2) Smart devices
By implementing smart devices, multi-sensor data integration, machine vision, and other technologies, SFHolding achieves “customized” applications through “generalized” solutions. With flexible deployment,differentiated delivery, low costs, and high compatibility, the smart device service transformation improvescollection staff satisfaction and operational efficiency.1) Smart hand-held terminals
The company’s seventh generation smart hand held terminals (HHT7) are customized based on the Android8.1 operating system. By collecting information in advance, information can travel faster than cargo while alsoguiding and monitoring the flow of cargo. The high scalability and compatibility of the terminals allow them tosupport first- a nd second-line employees in accessing peripherals, which are highly compatible with businessneeds while allowing on-demand configuration. In addition, the terminals’ features include industrial-gradesecurity standards, updated designs, and convenient human-machine interactions.Currently, SF Holding has already completed HHT7 development and testing. Compared to the sixth generationsmart hand held terminals, there are several upgrades and improvements including in mobile internetcomprehensiveness, high speed mobile scanning, and operating system optimization. At the same time,accessories are more compatible, which reduces production costs by decreasing research and development costsand certification costs.2) Smart locks
SF Holding has developed smart locks in-house. Smart locks can decrease the level of investment intraditional disposable car seals and mechanical padlocks, allowing keyless management, saving energy andprotecting the environment, and reducing operating costs. At the same time, as carriers of data, the routinginformation of express mail can be connected seamlessly. By being able to lock and un-lock delivery vehicles, thegoals of digitizing task transfer, standardizing processes, improving operational efficiency are achieved Smartlocks are already widely in use in Shenzhen.3) Smart bluetooth headset “FengYa”
Smart Bluetooth Headsets, “FengYa", are smart devices for couriers to provide customized voice wake-upand noise reduction. The built-in voice assistant of “Fengya” is able to identify couriers’ voice instructions to helpthem handle routine work and contact customers. The built-in battery capacity is able to support couriers’ workthroughout the day, and the updated customized voice instructions can provide more intelligent experience for
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
couriers without replacing current hardware. The unique neck-mounted design takes into account the comfort ofcouriers, liberates the hands of couriers, and enhances their work efficiency.3. AI recognition
(1) Voice recognition
SF Holding’s ASR robot provides a complete solution to improve efficiency and lower costs in the verticalscene of the logistics industry. In the customer service scenario of the SF Call Center, smart voice customerservice robot will replace human customer service to guide customers to answer key information, identify theirintentions, clean key information, provide standard response to customer issues and fulfill their needs. Not only isthe service loop closed, the solution brings customers more smart and humanized service experience, improvesemployees’ effectiveness and lowers costs. Meanwhile, under the working scenario of couriers, the customizedvoice assistant services will recognize voice instructions of couriers and assist them in completing simple androutine operations, thus reducing workloads and improving the overall efficiency and experience of couriers.Currently, SF Holding’s ASR robot is already in use in Hefei and Shenzhen. The success rate in ordering is equalto that of human-provided customer service. The average ordering time of the robot is 55 seconds per call, lessthan half of that of human-provided customer services while being able to provide continuous, 24-hour service.
(2) Computer image recognition
SF Holding integrates technologies, such as computer vision and deep learning, to analyze the digital imagesor videos, so as to detect and track logistics-related goods and vehicles, as well as predict anomaly. These analysisrealizes the smart management and scheduling, avoids goods damage effectively and increases productivity. Thesecapabilities include smart loading rate measurement, operating behavior detection, cargo volume measurement,and X-ray detection of illegal goods. In addition, the information black hole of smart logistics is cleared throughanalyzing different business settings, automating surveillance video content analysis, and implementing smartclassification, detection, tracking, and understanding. Smart loading rate measurement technology collects videoby binocular cameras, transmits the footage to a back-end server in real-time, and analyses the videoautomatically. This allows real-time loading rate calculations, license plate recognition, personnel effectivenessanalysis, arrival and departure time card recording, key event analysis, etc. All activities related to loading andtime cards can be quantitatively analyzed, and resource utilization efficiency and operational efficiency can beimproved. Operational behavior detection technology deeply mines business needs and adds high-performance
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
computing resources to all existing monitoring systems of the entire network in order to realize real-time andaccurate operational behavior detection. Upon discovering abnormal activity, notification is sent to managers at alllevels through text, enterprise messaging apps, and other notification channels. This achieves unified standardsand processes throughout the entire network, and discovers as well as prevents problems in a timely manner.Cargo v olume measurement technology is able to obtain three-dimensional information by simulating the depthperception of human vision. This technology is able to calculate cargo volume within one second, and providebasic information for subsequent transportation scheduling and storage management.
4. Smart decision-making(1) Smart networks and route planning
SF Holding has built a comprehensive network and route planning algorithm for different business scenariosin the logistics industry. The system, integrating network design, route planning, resource optimization, andstochastic simulation, helps improve service levels and reduce transportation costs. These are mainly reflected in:
1) Network design and resource optimization can appropriately design network structures according tomultiple addresses, warehouses, hubs, and other location-based information to meet customized demands, takingaccount of various key indicators of the network. Taking the decision making about transportation allocationswithin distribution bubs as an example, the network and route planning system can take inbound and outboundflow, location allocation optimization, and warehouse storage optimization into account to improve distributionbubs decisions by effectively predicting volumes and locating hubs. With better decision-making, the efficiency ofthe distribution bubs is increased, and service level within the coverage area is improved.
2) The location allocation and route planning models can be used to design optimal transportation routes. Forexample, the intra-city express delivery takes large shipment volumes, concentrated delivery time windows andtight timeliness. Through the model, large-scale decentralized transportation routes will be generated, satisfyingthe dynamic routing and tight timeliness requirements for the intra-city express delivery.
3) Through vehicle-driver optimization algorithms, transportation resources could be effectively utilized tobetter manage the drivers’ schedules. As a result, less vehicles and sounder drivers’ schedules will be plannedwhile completing as many transportation tasks as possible. Specially, for the complicated branch-line/main-linenetworks with short transportation time, highly frequent and flexible deliveries, multiple factors can be integratedto make more dynamic and intelligent decisions through vehicle-driver optimization algorithms, thus improving
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
network resource utilization rates.(2) Demand forecasting
Precise and efficient demand forecasting is a fundamental problem in the logistics industry’s transition fromtraditional decisio n-making to smart decision-making. It is difficult for traditional demand forecasting models tosupport the business needs of SF Holding because of issues such as low precision and slow speeds whenattempting to solve prediction problems related to holidays, the effects of multiple business periods, complicatedgrowth trends, and seasonal product.
SF Holding, by combining advanced research of deep learning , machine learning, and traditional time seriestechnology, has built a business demand forecasting system highly compatible with the special characteristics ofthe logistics industry to create business forecasts that are highly effective, accurate, and complete on multiple time
dimensions, including hourly，daily, and monthly. This service can be used to support smart scheduling, service
point and transit center simulations, peak demand direction and dispatching, and other business needs to directresource investment, improve resource investment, better match resource investment with business cycles, helpingto reduce costs and improve efficiency.
(3) Location selection and planning
In the logistics industry, the appropriate selection of operations centers plays a crucial role in theeffectiveness of logistics networks and in operating costs. Traditional logistics industry site sele ction is a manualprocess based on personnel experience and contains inherent problems such as insufficient support from data andlogic, scientifically poor d ecision-making, labor-intensive, and time-intensive, which are not able to support thehigh growth business needs of SF Holding.SF Holding has constructed a location planning system suitable to the needs of the logistics industry usingadvanced planning optimization algorithms, machine learning technology, and large-scale optimization solverscombined with actual business constraints and comprehensive consideration of various factors such as packagedelivery timing, site rental fees, transportation costs, and construction costs. This system has solved transit center,distribution point, connection point, service point site selection planning, and other problems. This service notonly has high value for solving the site selection problems of SF’s various central transit, receiving, and dispatchpoints but also that of other external customers. The site selection planning system has decreased laborinvestment, significantly lowered operating costs, and increased corporate operating effectiveness. Through
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
visualization, location plan details can be seen at a glance and the site layout easily seen.(4) Smart scheduling
The smart scheduling system aims to optimize personnel resource scheduling management and to makeresource investment planning more scientific, more precise, and more flexible by taking resource managementinformation online, standardizing it, and applying to it smart technology. At the same time, it combines the variousattributes and management characteristics of each position to build a universal, multi-position online managementplatform. Its core functions include forecasting business and personnel needs, weekly and monthly schedulingrecommendations and next-day shift management based on business attributes and individual employee restingneeds, and resource utility assessment analysis. The system precisely manages tasks and work hours, creates adata foundation for optimizing and improving operational services, weakens dependence on personnel experience,scientifically supports management decision-making, and thus improves employee satisfaction.Currently, the systems helps fulfill real business resource scheduling needs by covering the company’s roles inpackage receiving, customer service, and operations; supporting basic daily and monthly scheduling management;making smart recommendations for monthly scheduling; and serving as a reference for forecasting futurepersonnel needs.
5. SF Maps
SF Holding is constructing a smart logistics map for AI based on GIS technology, big data, artificialintelligence, and other technologies. SF Maps provides an enterprise-grade smart position decision-making serviceto the logistics industry by providing a smart logistics map service featuring precise address, high precision, andlocation decision services.SF Maps has built a precise smart address service platform to provide precise address services based on SF'sdaily average of billion-level map data resources and relying on core technology advantages such as 18-levelChinese address segmentation. The precise address service platform uses precise address matching services suchas two-way geocoding, input prompts, address reachability, and network address queries to help users completeaddress information entry, improve the address input user experience, and improve customer address inputcompletion.
SF Maps provides high-precision map services through a route planning service that closely tracks actuallogistics environments with nationwide coverage based on “last-mile” trail and main-road truck trajectory big
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
data. The service improves logistics distribution efficiency by estimating shipping time, mileage, and plannedroutes based on different shipping capabilities. At the same time, a dispatch difficulty decision-making systembased on LBS, precise address data, various dispatch difficulty levels, and actual shipping needs, allows customersto enjoy more value-added services and the company to realize more value-added revenues.SF Maps provides a location decision-making service through GPS, wifi, base station positioning, and trajectoryservices. A high-performing technology that has low energy consumption requirements, this service provides aseries of location-based services aimed at solving the location-acquiring needs of SF’s couriers, transportationvehicles, and terminal equipment. At the same time, by combining the acquisition of user locations and electronicfences, high-precision information is pushed, and benefits are maximized through rational regional distribution.SF Maps has already deeply penetrated into the entire logistics process and has provided customers a wealth ofsmart logistics map services such as placing orders, smart dispatching, transit and sorting, transportation planning,terminal distribution, and logistics management. Among these, the smart routing service provides the mostsuitable routing plan for each package and estimates information such as the stopping points along the package’sroute, its transit centers, and delivery network, providing preliminary data to enable order dispatching, smartscheduling, sorting support, and volume estimates. The smart routing service recognition rate is 98.7%, and itsaccuracy rate is 99.7%. It has decreased customer dispatches by more than 32% and reduced the number ofmanual transit shipments by more than 60%. The current average daily request volume for smart logistics map-related services has surpassed 230 million.
6. Construction of big data ecosystem
SF Holding, through many years of in-house research and development, has established a complete big dataecosystem as the “glue” of SF’s aviation network, ground network, and information network. As of June 30, 2018,SF Holding had completed the construction of data acquisition and synchronization, data storage and integration,data analysis and mining, machine learning, data visualization, and other platforms, covering finance, market,personnel, customer, car net, Internet of Things, and other data sources. Collected business data has surpassed thepetabyte level, and average daily data volume grows at the terabyte level.In establishing the base levels of the platform, SF Holding has already integrated big data and artificialintelligence, using them widely in express shipping, warehousing, cold chain, medicine, commerce, financial,international, and other business areas. The constructed big data products and systems include smart managementplatforms, smart decision platforms, Internet of Things real-time monitoring platforms, smart warehouse systems,
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
and data lighthouses.7. Digital Warehousing
As a major part of digital SF, SF Holding has achieved online end-to-end warehouse and precipitated datathrough upgrading and updating its warehouse system, tools, management practices. With algorithms, such as bigdata and route planning, data application in warehouse management visualization, operational efficiency,operation standardization, decision-making support and other aspects has enhanced the overall digital operationand management capabilities of SF warehouse, introducing new operation modes and completing technicalreserves for the modernization construction of SF warehouse.
As of 30th June, 2018, SF Holding has promoted digital warehouse in 11 core E-commerce warehouses, withorder operating efficiency increasing by 20% and abnormal operations falling more than 50%.
8. Smart packaging
SF Holding is committed to the research, development, and application of sustainable packaging. It hasestablished a sustainable packaging recycling system and smart system to create an industry-influencedsustainable packaging research, development, and testing center.Currently, the company has created the country’s first smart packaging platform to speed up the unification andstandardization of the express delivery and logistics industry’s packaging categories in order to increase theindustry’s packaging material production and processing efficiency and to decrease resources wasted fromexcessive packaging. At the same time, a packaging laboratory was built to quantify the physical and chemicalproperties of the express delivery and logistics environment and the packaging materials used in express delivery,which provide a scientific basis for the quantitative design of express packaging, and ultimately optimizes thedesign with a parametric design platform. In addition, a carbon emissions evaluation system was established todesign a comprehensive carbon footprint measurement plan for the entire chain of the express delivery andlogistics industry. Relevant information and data were collected for analysis, which established a scientific basisfor the company’s evaluation of its green packaging and contributed towards the country’s environmentalprotection standards.“Feng Box,” the re-usable packaging box researched and developed in-house by SF Holding, is already beingpiloted in Shenzhen, Guangzhou, Shanghai, Zhongshan, Dongguan, Xiong’an New District, Shanxi, and otherareas. The box can currently be re-used 50 times, and a single use of the box represents 2% of other packagingmaterials’ carbon emissions volume. Its carbon footprint is less than 10% of that of single-use cardboard boxes.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
(2) Efficient integration of industry solutions
The ability to provide a comprehensive logistics solution will be one of the core competitive advantages inthe industry. After years of development, SF Holding has the ability to provide customers with all-aroundintegrated solutions that not only provide high-quality logistics services at delivery, but also extends services tothe front end of the value chain, to production, supply, sales, distribution, and other segments. A growth strategycentered around the consumer and of deeply understanding the customer, it firmly grasps the true pain points ofthe supply chain, helping companies cope with the market’s rapid changes and the uncertainty of demand, helpingthem improve the responsiveness of their supply chains.
Based on the resource capabilities of SF Holding and the entire SF Express Group in logistics, technology,commerce, and finance, SF Holding provides end-to-end integrated logistics solutions to benchmark industries,leading the digital upgrade of supply chains and promoting the sustainable and healthy development of theindustrial chain. Using SF Internet of Things, big data, artificial intelligence, recognition, robots, and other newtechnologies, and through omnichannel data collection and insight, SF creates enterprise, consumer, and merchantprofiles based on data and algorithm-driven models. By conducting diagnostic analyses on business operationsand integrating digital warehouses, smart transportation, and financial services, SF fulfils the diverse needs andexperiences of customers and consumers; improves corporate decision-making, execution, and management; and
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builds an early warning system for risks. SF helps corporations continue to reduce costs and increase efficiency,improve profitability and revenues, improve product and customer experiences, increase customer and personnelsatisfaction, and build a consumer-driven digital supply chain.
As of the end of the reporting period, the industries to which SF Holding has provided integrated industrysolutions include:
Fresh produce and seafood industry: The fresh produce and seafood industry crosses China's agriculture,manufacturing, and service industries. SF Holding strives to solve the pain points of the fresh produce and seafoodand agricultural products industries such as sales difficulties, transportation difficulties, and low brand awarenesswhile helping farmers boost their incomes by promoting the transformation and upgrading of the industries. SFHolding has a nationwide room temperature + cold chain logistics and transportation network with direct access tothe C-side merchandise sales platform as well as an expansive network of service points and big data resources. In2018, SF Holding focused on a number of fresh produce sub-sectors such as flowers, aquatic products, fruits, andmeat and formulated a comprehensive industry solution that integrates sales, logistics, finance, data, technology,and branding by focusing on the needs of industry customers. In terms of logistics and transportation, SF Holdinghas provided end-to-end traceability for room temperature + cold chain logistics services, overcome the stringentrequirements of fresh products on logistics and transportation conditions, improved logistics timeliness, andassisted in the rapid distribution of products from the upstream production regions to the entire country. In termsof expanding sales channels and brand promotion, SF Holding has helped farmers and agricultural companiesexpand their sales through integrating internal and external online and offline sales channels and has carried outsmart marketing to help local governments build awareness of fresh produce, seafood, and agricultural products,driving the industry’s upgrade and providing the ultimate shopping experience to consumers around the country.Apparel industry: The apparel industry is a highly competitive traditional industry. Along with the developmentof the Internet and the changes of consumption habits, SF Holding has focused on the full channel transformationand upgrading of traditional clothing brand enterprises in 2018, promoting the digital upgrade of the industrychain, infusing technology throughout the chain, and redefining the end-to-end, online and offline consumersupply chain. By integrating the technological capabilities of warehouse networks, branch and land resourceallocation, IT systems, green sustainability, and end-consumer experience, and by applying data solutions, wesimplify and integrate supply chain processes, enhance the end-customer experience, shorten product cycles, andsupport the company’s goal of sustainable, high-speed growth. By digitizing inventory systems, we upgradeclothing brand customers’ inventory management system, helping manage customer product launches, distribution,
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replenishment, and promotion in a comprehensive way and helping the apparel industry improve supply chaintransparency, agility, responsiveness, offline store conversion rate, and customers’ online shopping productreceiving experience. At the same time, by focusing on pain points such as the wide variety of products in theapparel industry, inflexible inventory turnover, and weak data analysis support, SF Holding has upgraded andlaunched a digital upgrade business for D2R online and offline store logistics based on an integrated warehouseand distribution solution. By focusing on refining customer profiles and iterative solutions, we can provide onlineand offline omni-channel sales and inventory sharing, intra-city express distribution, warehouse-store/intra-storetransfers, and store distribution s ervices to promote the digital transformation of the industry and to upgrade thevalue chain.3C industry: At present, the domestic 3C industry is growing rapidly while growth in traditional industries suchas mobile phones, laptop computers, and digital cameras have slowed down and competition increases daily.Under this backdrop, the major manufacturers have continuously improved the quality, cost, and efficiency oflogistic supply chain services while promoting the need to deepen channels and go international. Faced withcontinuing customer demand for improved service standards, SF Holding relies on its network advantages, bigdata analysis, and customer profiling to help customers establish end-to-end, personalized supply chain solutions.At the same time, based on resource frameworks such as warehouse and transportation capacity and the keyelement of data, further supplemented by frontier planning technologies and strategy optimization models, SFrealizes closed-loop finished product logistics, capital logistics platforms, and post-sales service platforms for the3C industry, helping industry customers build an efficient supply chain system that precisely matches theirbusiness strategy.Grocery, food and beverage industry: SF uses its rich network resources, collaborative big data platform, intra-city technology, and warehouse research and development center technology capability to create a digitalconvenience store food and beverage supply chain system. Leveraging big data and AI technology to place theright products at the right times and at the right locations, the system cooperates with intra-city logistics toconstruct a new retail OMS-WMS-TMS smart and visual management platform. Change management teams helpcustomers transform and upgrade, helping them realize the goal of “everything online.” At the management level,customers can do everything online, from communicating in real-time to conducting business planning,monitoring operations, and managing KPI, increasing operating efficiency and lowering management costs. Onthe operations side, at the systems levels, the system provides customers with WMS and TMS, including DPSelectronic labeling and product selection, DAS sorting and seeding system, RF loading and smart stowage, online
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transportation management, route planning, quality and cost monitoring, and other functions. At the warehouselevel, services such as data collection, resource integration, SOP, and convenience store product allocation areprovided. At the data level, the system provides management support such as sales volume forecasting, inventoryearly warning, smart re-stocking, smart procurement, and digital management platform. At the experience level, itprovides value-added and revenue-generating services by enabling commercial cooperation and channelexpansion, traffic interoperation, and precision marketing.Pharmaceutical industry: Committed to becoming China's most valuable and influential healthcare supply chainservice provider, SF Pharmaceuticals has obtained GSP certification and other relevant third-party logisticslicenses. SF Pharmaceuticals possesses powerful logistics infrastructure and network capabilities, covering mostof the country’s key areas and 132 prefecture-level cities. In addition, SF Pharmaceuticals has a professional talentteam and management system. SF Holding’s pharmaceutical quality management teams are comprised ofprofessional pharmacists from well-known pharmaceutical production and distribution companies at home andabroad. SF Holding also has formulated a number of quality control and standard operating procedures forpharmaceutical cold chain logistics, including order management, receiving, transportation, distribution, anddelivery. According to GSP requirements, quality training and assessment are carried out for qualified personneland operations personnel to enhance the entire cold chain logistics management and traceability managementcapabilities. SF Pharmaceuticals has five closed-loop logistics supply chain service capabilities, including mainline transportation, urban distribution, pharmaceutical warehousing, C-side delivery, and clinical examination.Relying on powerful information technology and the ability to coordinate resources between SF Holding's variousdepartments, SF Pharmaceuticals and industry benchmark customers have explored a series of integrated solutionssuch as non-warehouse network layouts, inventory and logistics management, circulation channels, anddistribution in the face of two-invoice system reform for pharmaceutical circulation.Security industry: In February 2018, SF made a strategic investment in ZBHA (Group) Co., Ltd. (“ZBHA”), thefirst company in China specializing in the investment and management of modern security services. It operates 24security service subsidiaries and branch offices in 15 provinces, autonomous regions, and municipalities. It hasalso established five modern security service professional companies and training centers. Its service network andmodern security service industry chain covers 110 cities across the country and has established security servicecompanies and security management companies in 6 countries overseas. After the investment, SF and ZBHA willestablish a cross-industry strategic cooperation partnership between the domestic logistics and express deliveryindustry and the modern security services industry, creating a new operating and management model for logistics
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and security in China. In addition, the parties will provide modern security services for logistics security in the“One Belt One Road” construction, including logistics monitoring and escort services, specialized vehicle escortservices, smart logistics escort car services, and other services to provide comprehensive logistics escort services.By providing security services to high-end and specialty markets, SF Holding expands its differentiatingadvantages in the industry.(3) the First directly operated express delivery A-share company
SF Holding has a strong operational management and control model for its entire network and is the firstdirectly-operated express delivery company listed as an A share. SF Holding's head office controls all expressdelivery networks and core resources, including collection and delivery service points, distribution hubs, main andbranch routes, aviation hubs, aircraft, vehicles, and employees. Compared with the franchised business model,the direct operations model has absolute control over all aspects of the company, which helps the company'sstrategy to remain consistent from top to bottom and ensures the effective achievement of the company'sstrategy and business objectives.
Compared to the franchise model, the direct operating model has the following advantages: 1) Ensureoperating stability and control. The express delivery industry is characterized by scale and networking,involving t ens of thousands of operating service points and hundreds of thousands of employees; and how toensure the stability and control of the company's operations is key to sustainable growth. All levels of SFHolding's business, from package collection to transit to dispatch, are based on the direct operating model. Only aportion of non-core operations are complemented by outsourcing. This model not only guarantees the stability ofthe company's business operations, but also ensures the ability to excercise absolute control in handlingabnormalities, ope rational effectiveness, quality, and cost, and ensures the company's sustainable and healthydevelopment in the future. 2) Facilitate standardized operations management and service products, t herebyimproving the quality and efficiency of express delivery services. SF Holding adopts standardized managementacross the entire network. Based on a unified top-down operations monitoring and assessment mechanism within
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the company, it can effectively maintain service quality and timeliness to ensure the customer experience andimprove service perception. 3) Enhance i nternal management compliance and standards. Benefiting from theadvantage of being unified, standardized, and controlled, the direct operating model ensures that the company'sexternal operations, internal management, fiscal and taxation management, corporate governance, and othercontrols are compliant and meet standards, minimizing compliance risk. The direct operating model is responsibleto the state, regulatory agencies, and all shareholders. 4) Improve customer loyalty and brand reputation. Thedirect operating model enables the company to stay close to its customers and to fully and precisely understandtheir n eeds. When a problem occurs, the direct operating model enables the company to follow up immediatelyand ensure that service quality and customer sati sfaction are maintained through subsequent visits to customers.As a result, SF Holding has held the top ranking in the industry’s customer satisfaction and brand reputation fornine consecutive years. 5) Better controlof the entire data process and core information. Under the directoperating model, information systems and data processes are managed and controlled in a centralized and unifiedmanner, which is beneficial to the valuable big data analysis and application of customer service data. In this era,data means power.
(4) SF Holding has topped customer satisfaction and quality rankings, establishing a good brand image.1. Number 1 in customer satisfaction for nine consecutive years.
According to the “2017 Express Delivery Service Satisfaction Survey” issued by the State Post Bureau, SFExpress ranked first in "Overall Satisfaction of Express Delivery Enterprises" and scored 83.4. SF has topped theranking for nine consecutive years since the State Post Bureau began announcing the rankings in 2009. In the firsthalf of 2018, according to the State Post Bureau’s announcement “First and Second Quarter 2018 ExpressDelivery Service Satisfaction Survey and Punctuality and Timeliness Test Results,” SF Holding also ranked first,scoring over 80 points in two consecutive quarters.
2. Maintains lowest complaint rate among industry counterparts.
According to statistics in th e “China Postal Bureau Express Deliver y Report,” in the first half of 2018, SFHolding’s complaint rate was 0.63 (number of valid complaints per million parcels delivered), far below thenational average of 3.08. Since the State Post Bureau began issuing the complaint report, SF Holding has rankedthe lowest compared to its domestic counterparts in the express delivery industry.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Data source: State Post Bureau’s Express Delivery Report on WeChat3. The only express delivery company that was nominated for the China Quality Award in 2017.
The National Bureau of Quality Inspection is responsible for the organization and implementation of theChina Quality Award, which is awarded every two years. In 2017, the National Bureau of Quality Inspectionhosted the third China Quality Award; SF was the only company in the private express delivery industry that wasselected and received a nomination award.
4. Number 1 in timeliness across the entire delivery process.
In January 2018, the State Post Bureau released the “2017 Express Service Punctuality and Timeliness TestResults,” which evaluated the ten major express companies across six metrics, including timeliness across theentire delivery process and timeliness of handling at the point of pickup and dispatch . SF Holding ranked first intimeliness across the entire delivery process, timeliness of handling at the point of origin, timeliness of handling atthe point of destination, delivery timeliness, and 72-hour punctuality. SF Holding has ranked first for fiveconsecutive years since the State Post Bureau first announced the ranking in 2013.
5. SF enters the BrandZ Top 100 Most Valuable Global Brands ranking for the first time
On May 29, 2018, WPP, the biggest communications group in the world, and Kantar Millward Brownannounced the “2018 BrandZ Top 100 Most Valuable Global Brands” ranking in London, UK. SF appeared in theranking for the first time. The ranking showed that, in 2018, 15 Chinese brands (including one brand from HongKong) entered the top 100. Almost 300 media outlets covered the report, including Yahoo, Business Insider,MarketWatch, and Business Review.
25.54
21.1
8.45
7.967.95
5.89
3.75
2.53
1.641.631.361.251.06
0.63
3.08
Valid appeal rateDelayLoss and damageDelivery service
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After more than 20 years of operations, the SF brand has enjoyed extensive recognition and popularity in theexpress delivery industry. "SF" has become synonymous with "fast", "punctual," and "safe" in the express deliveryindustry and is a preferred brand for corporate clients and high-end cash customers. Good market reputation hasbrought a large number of high-quality corporate clients to SF Holding from industries like 3C, apparel, finance,insurance, auto parts, enabling it to build long-term partnerships with a large number of renowned domestic andforeign companies such as Apple, Huawei, Xiaomi, Uniqlo, BESTSELLER, and Ping An.
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(5) Unique and intelligent logistics three-in-one network, “Aviation + Ground + Information”
Building upon years of operations and of constructing its strategic framework, SF Holding has formed anintegrated three-pronged logistics service network that integrates its aviation network, ground network, andinformation network to cover both domestic and overseas customers. Its direct operating model has strongernetwork controls and higher stability than its peers. In addition, SF Holding has always invested heavily in itsinformation network, creating unique network resources rarely found among its domestic counterparts.
1. A viation network
In 2009, SF Airlines became the first privately-owned air freight company in China, and currently has thelargest air cargo fleet in China. As of the end of the reporting period, among the domestic express deliverycompanies, only SF Holding, EMS, and YTO Express have established cargo airlines with independent airtransportation capabilities. SF Holding is a leader in the domestic express delivery industry in terms of cargoaircraft quantity, number of routes, and transportation capacity.
Cargo aircraft: 1) Fleet: As of the end of the reporting period, SF Holding had a total of 44 self-owned all-cargoaircraft (including 5 Boeing 767 aircraft, 22 Boeing 757 aircraft, and 17 Boeing 737 aircraft). The average servicetime of all owned cargo aircraft is 22.91 years. SF Holding also has 13 charter all-aircrafts. SF Holding has 57flight routes, covering 43 major cities in China (including Hong Kong and Taipei), Osaka, and Ho Chi Minh City.In January 2016, when the first B767 widebody cargo aircraft was officially launched, SF Holding became thefirst express delivery company to own a B767 widebody cargo aircraft. In addition, in November 2017, SFHolding bought two Boeing 747 cargo aircraft from Jade Cargo International Airlines at auction and completed itsdeliver y of property rights in mid-December of 2017 under the guidance of the Shenzhen Intermediate People’sCourt. In the first half of 2018, we completed the SFP special check of the first Boeing 747. Larger and more fuel-efficient aircraft perform better in terms of transportation and capacity. In addition to optimizing the current fleet,investing in new models allows better allocation of capacity resources, improves time utilization, saves energy,and reduces emission. In the next three years, SF Holding is expected to own 80 self-owned aircraft, forming a
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cargo fleet aviation network composed of Boeing 737, 747, 757, and 767. 2) Pilots: SF Airlines has recruitedtalents since its establishment, attracting pilots through strict internal management and service procedures andactively fostering its own pilots through cooperation with domestic and foreign aviation schools. As of June 30,2018, SF Airlines had a total of 403 pilots, including 160 captains, 225 copilots, and 18 student pilots. 3) Trafficrights a nd airport slots: Based on the principle of seniority in civil aviation flight schedules, SF Airlines has afirst-mover advantage compared with other companies. As of June 30, 2018, SF Airlines had 138 pairs of slots,covering 43 large and medium-sized cities nationwide (including Hong Kong, Macao and Taiwan). 4) Self-ownedground support: Since 2015, SF Airlines operated ground support services directly at airports in some citiesgradually. By shortening the length of ground services and improving the efficiency of ground servicing, moretime is given to distribution and bulk cargo handling to meet parcel safety and stabilize time-in-transit. ShenzhenAirport's southeast parking apron was officially put into use in December 2017 after nearly one year ofconstruction, further improving the efficiency of ground services and the timeliness of cargo handling. 5) Aviationsafety assurance: S ince its inception, SF Airlines has put aviation safety first, and strictly adheres to regulatoryrequirements by building an SMS management system. From the first flight to the end of the reporting period, SFAirlines has operated approximately 242,600 hours safely and has been recognized by the CAAC and otherregulatory agencies for 8 consecutive years. In 2010, it was named "2010 Accredited Unit of SafetyResponsibility" by CAAC Central and Southern Regional Administration; in 2011, "2011 Excellent Unit ofSafety Responsibility" by CAAC Central and Southern Regional Administration and "2011 Advanced Unit forShenzhen's Transportation Safety Production;" in 2012-2013, "Advanced Unit for Safety Responsibility" byCAAC Central and Southern Regional Administration; and in 2014-2017, "Accredited Unit of SafetyResponsibility" for four consecutive years by CAAC Central and Southern Regional Administration.
In addition to cargo aircraft, SF also secured extra air capabilities from about 100 commercial airlines athome and abroad through direct operations (cooperating directly with airlines), agents (freight forwarders), ortrilateral cooperation (SF, airlines, and agents), running 1,920 flight routes at home and abroad.
Air transport capability: As of the end of the reporting period, the total number of airline routes provided bySF Holding’s cargo aircraft and Commercial flights was 1977. In the first half of 2018, there were a total of 688thousand flights with an average of 3,800 flights per day covering Mainland China, Hong Kong, Taiwan, andother countries for total coverage of 34 countries and regions. In the first half of 2018, the company carriedaround 590 thousand tons of cargo by air, an average of around 3,279 tons daily. Cumulative domestic shipmentsaccounted for about 24% of total domestic air cargo. In the first half of 2018, the company shipped 400 millionexpress delivery parcels by air, accounting for 22% of the company’s total deliveries.
Resources
End of Reporting Period/During Repo rt ing Period
Daily A verageDuring Reporting
Period
Cargoaircraft
Number of self-owned aircraft 44 -Number of external chartered aircraft 13 -Number of all-cargo aircraft routes 57 -Total number of flights in the first half of 2018 18,000 102Total amount shipped in the first half of 2018 250,000 tons 1389 tons
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Resources
End of Reporting Period/
During Repo rt ing Period
Daily A verageDuring Reporting
PeriodCommercial
flights
Number of commercial flight routes 1920 -Total number of flights in the first half of 2018 670,000 3704Total amount shipped in the first half of 2018 340,000 tons 1890 tons
Future airport construction: In order to support the national "Belt and Road" and Yangtze River Economic Beltdevelopment strategies, to realize the strategic goal of building a strong civil aviation country, to vigorouslypromote the development of the modern logistics industry, and to improve the layout of SF Holding's national airtransport network, Shunfeng Taisen, a wholly-owned subsidiary, signed the Hubei International Core LogisticHub Project Cooperation Agreement with Hubei Provincial People's Government on December 13, 2017, and theJoint Venture Contract of Hubei International Logistics Airport Co., Ltd. with Hubei Provincial CommunicationsInvestment Group Co., Ltd. and Shenzhen ABC Airport Investment Co., Ltd. Shunfeng Taisen invested RMB 2.3billion of its own c ap ital to estab lish H u be i International Logistics Airport Co., Ltd. with share ownership of 46%.On February 23, 2018, the State Council and the Central Military Commission formally issued the State Letter[2018] No. 26 Certification of the State Council and the Central Military Commission Concerning the Approval ofBuilding Civil Airport in Hubei E zhou a nd agreed to build the Hubei Ezhou civil airport. The airport runway andtaxiway system is designed to meet a target throughput of 1.5 million passengers and 3.3 million tons of cargos in2030. Facilities such as terminal buildings and transshipment centers are planned to meet target throughput of 1million passengers and 2.45 million tons of cargo in 2025. The approval of the Hubei International Core LogisticsHub project is part of the pre-feasibility study phase of the project. The final construction scale, investmentamount, and specific funding arrangements of the project will be determined during the final approval. The
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company will fully cooperate with relevant state departments in actively and steadily implementing projectprogress in accordance with the project approval by the State Council and the Central Military Commission.Airport construction is a long-term project. During the specific arrangement of the project’s design andinvestment, the company will fully consider future strategic layouts, operations planning, financial status, andother important factors to ensure that the project can meet the future development needs of the company andenhance its long-term value but at the same time, allow the company effectively control investment risks andprotect the interests of shareholders.
The Hubei International Core Logistics Hub project lies at the core of SF Airlines’ transportation system. Inthe future, SF will use this hub as the center of its air route network that covers the entire country and reaches theworld. The construction of the core logistics hub project is in line with the company's strategic plan, whichincludes providing good fundamental support for shortening transit times, improving the stability of its services,building high-end integrated logistics service capabilities, and improving customer satisfaction. In addition, thecore logistics hub project is an important way to optimize the company's aviation network structure and reduce itsoperating costs. The core logistics hub project is in line with the long-term development of the company and theinterests of all shareholders, being the core strategy for further consolidating the core competitiveness of itsaviation network.
2. Ground network:
Service points: S F Holding has built a nationwide express delivery service network and expanded it to major
countries around the world. As of the end of the reporting period, SF Holding's business has covered 336prefecture-level cities, 2,727 county-level cities, and nearly 14,000 directly-operated service points. In itsinternational business, the Standard Express and Economy Express businesses cover 53 countries including theUnited States, the European Union, Russia, Canada, Japan, South Korea, ASEAN, India, Brazil, Mexico, andChile. The E-parcel business covers 225 countries and regions around the world.
Courier quantity: As of the end of the reporting period, the company had about 268,800 couriers (including30,900 part-time couriers) in various employment models, including 53,400 employees, 300 dispatched staff, and215,100 other staff. The reason for employing a large number of other staff is as follows: 1) it responds to the callof the country's drive for "Mass Entrepreneurship and Innovation" and encourages employees to start businessesthat provide the company with a unified brand and quality standards; and 2) it actively engages resources that notonly significantly improve employee motivation and labor flexibility, thereby improving resource efficiency andreducing costs, but also effectively guarantee the stability of customer service standards and quality.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Hub Distribution: As of the end of the reporting perio d, SF Holding had 10 hub-level distribution location, 49aviation and railway stations, 113 sub-district distribution hubs, and 203 distribution points, 33 of which haveadopted the automatic sorting system. Peak sorting capacity of automated sorting equipment in the largestdistribution hub can reach 150,000 pieces per hour, ensuring that shipments are delivered on time and securely.
Ground transportation network: As of the end of the reporting period, SF Holding had about 32,000 directly-operated and outsourced vehicles in its main and branch routes. The total number of vehicles for collection anddelivery was 73,000 (excluding motorcycles and electric vehicles). There are more than 88,000 main and branch
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
routes, including 424 cold chain main and branch routes. In addition, SF Holding has actively sought cooperationwith the National Railway Administration and has launched 77 high-speed rail lines and 112 standard rail lines.The ground transportation network covers the entire country. In the first half of 2018, the volume of the landtransport express delivery business was 1.4 billion shipments, accounting for 76.7% of the company's total expressdelivery business. 27 million shipments were shipped by railway and other transportation methods, accounting for1.4% of the company's total express delivery business volume.
Vehicle Type Transportation Vehicles Pick-up/Delivery VehiclesDirectly owned 16,715
4,699Employee owned -
64,203Rented 376
3,509Outsourced 14,454 388
Total 31,545 72,799
Warehouse network: As of the end of the reporting period, SF Holding had 138 warehouses of differentcategories with total area of nearly 1.5 million square meters, forming a nationwide warehouse service networkcovering more than 100 major cities across the nation’s four major regions. SF Holding provides professional,efficient, and high-quality services to more than 650 customers through professional operations management,advanced system management capabilities, and developed warehouse integration network. SF’s warehousing iscommitted to building an industry-leading smart warehouse logistics ecosystem platform that enables resourcecoordination within the express delivery and transportation network and effectively supports the links between theGroup’s core business strategies. Currently, SF’s warehouses have the ability to serve leading customers in majorindustries such as E-commerce, retail, apparel, and 3C.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Customer service network: The company has established four domestic independent call centers with totalseating around 5,200 and providing 1 million instances of phone-based service daily. Multiple channels provide24/7 self service, including the 95338 interactive voice response system, SF’s official website, large clientdelivery system, personnel system, client mobile apple, WeChat public account, and online customer service. In2018, SF Holding is committed to improving customer service systems by driving customer service throughtechnology, such as by building a smart and digital systems management platform and researching and exploringsmart customer services models that include big data analysis and applications. In addition, SF is committed toimproving the user experience by providing professional, efficient and warm customer service by combiningpeople, goods, and location recognition to optimize systems and processes, improving the soft power of customerservice and quickly solving customer problems and needs.
Last mile services: SF Holding has achieved last mile coverage through its cooperation with SF's commercialservice points, cooperative agencies, property management, and smart lockers. As of the end of the reportingperiod, SF Holding had cooperated with nearly 33,000 cooperative agencies and 600 property managementcompanies. In addition, Hive Box Technology Co., Ltd., an associate of SF Holding, had installed approximately104,000 smart lockers in community/office buildings, covering 101 cities including Shenzhen, Guangzhou,Beijing, Shanghai, and Wuhan.
3. Information network:
SF Holding has independently developed a complete set of smart network platforms, including SF's coreoperating systems, the SF map platform, big data platform, information security platform, and smart O&Mmanagement platform. The smart network platforms create a smart and solid foundation to support businessdevelopment in a fast, flexible, safe, and comprehensive manner, achieve data interaction analysis, drive business
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
decision-making, and help upgrade smart logistics. At the same time, SF Holding applies scientific andtechnological methods such as data mining, machine learning, and statistical analysis to actual business settings,and combines it with user-oriented product design to promote the company's business transformation and enhancethe company's technolo gical competitiveness in artificial intelligence. Of these, smart warehousing helpsimprove warehouse customer service and experience. The construction of a complete SF Cloud-based warehouseinformation system supports E-commerce warehouses, large goods warehouses, cold chain warehouses, medicalwarehouses, international shipping warehouses, micro warehouses, and other business-specific warehouses. Basedon multi-dimensional data analysis, the smart warehouses take the first steps in using big data and artificialintelligence technology towards logistics applications and systems research and development and segmentedindustry system solutions research and development capabilities. SF Holding has also invested in a web-basedcomprehensive warehouse service platform, upon which it has built the country’s leading “warehouse as aservice” digital warehouse-net platform focused on warehouse big data applications, digital warehousemanagement, collaborate warehouse allocation, cloud warehouse technology, and sensing clouds. Empoweringpartners through the Internet, IoT, and information technology, building open digital warehouse ecosystemnetworks, and integrating online and offline warehouse resources, customers will receive more abundantwarehouse solutions. SF Holding continues to implement smart technology into terminal receivers bypromoting the digitization process, continuously optimizing convenient and fast customer interactions on thecustomer terminal, and upgrading to HHT7 the tools at receiving and warehouse terminals. The upgrade ofmanagement tools will create an online system for the entire process of resolving abnormalities, which improvesthe time taken to resolve abnormalities, lowers costs, improves quality, and ensure that individualized customerneeds are better protected. During the first half of 2018, the digitization of waybills for imports and exports inHong Kong, Macau, and Taiwan continued, and the use rate of the digital waybills stabilized at 98%. Buildingupon digitization, the company will explore new models of managing couriers so that front-line personnel canfully understand their service capabilities, levels of ability, and connection to remuneration, driving them to beable to improve their levels of customer service through their own efforts and introducing other forms of businessto help them increase income and encouraging a positive cycle of self-management. At the same time, bringingonline the multiple factors of service point management builds a standard online management process withauxiliary tools that connect couriers, warehouse managers, and interactive network information, creating a one-stop service platform that synthesizes information, provides early warnings on abnormalities, and guidesmanagement, improving management efficiency.
SF Holding's domestic and international express delivery network coverage, coupled with the company'sconstant attention and investment into smart information networks, form a comprehensive logistics servicenetwork integ rating its "aviation network, ground network, and information network." The unique characteristicsof this network further consolidate and expand SF's leading position in the industry.(6) Scarcity of logistics land resources and obvious advantages of the first mover
In response to the rapid development of the express delivery industry as well as the requirements of the StatePost Bureau in the express delivery industry's "13th Five-Year Plan" to accelerate the construction of expresslogistics industrial parks, SF Holding committed to creating an "Express+" and "Internet+" dual-core industrialpark service ecosystem, which will not only serve SF Holding, but also local industries and external customers byproviding a full range of integrated supporting services such as warehousing, logistics, business flow, informationflow, and capital flow. The industrial park service ecosystem is a hub and communication window that effectivelyconnects government, SF services, and customer needs.
As of June 30, 2018, SF Holding had a logistics site with a land area of approximately 758 acres, a total
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
planned building area of approximately 3.0 million square meters, and a completed building area of approximately0.85 million square meters. The total net book value of logistics site resources is approximately RMB 9.1 billion.
Location
Size ofLandOwned(Acres)
Total Planned Building Area
(Including In-construction/Planning Projects)
(1,000 Squar e Meters )
Completed
Building
Area(1,000 Squar e
Meters)
Net Book Value
at the End of
Period(RMB 100
millions)East China 171 700.9 506.7 24.22North China 141 446.4 7.4 9.33Central China 249 898.1 77.5 11.20
South China 46 330.5 257.2 44.03West China 151 630.2 - 2.56
Total 758 3006.1 848.8 91.34Note: The data in the above table has not been audited.
As of the end of the reporting period, SF Holding had successfully deployed industrial park projects in 37cities, with Jinan, Ganzhou, Xiamen, and Lasa added since the end of 2017. In the future, SF Holding will use theexisting resources of the Group to further increase the distribution of core strategic resources and enhance the corecompetitiveness for the company's long-term development while satisfying internal demands and fully consideringindustrialization factors.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
(7) Warm, principled, productive SF culture
In SF Holding’s 25-year history, its outstanding and strong corporate culture DNA has continually played animportant role. Customer success, equality and respect, innovation, unity, and accountability are part of SF’sculture. To SF, corporate culture is not just a belief, but even more so a commitment and practice. It is in everyword and action of all SF employees, is expressed in every operating process, and has become a strong spiritualforce that is embedded in SF’s cohesiveness, competitiveness, and vitality.
1. How SF’s logo represents SF’s culture
The logo’s outline is in the shape of a person’s face. With a curved square and a squared circle, the circle andsquare complement each other. The square in the middle of the circle represents SF’s strong principles, and thecircle represents unity and harmony. The “S” and “F” are the initials of “Shun Feng,” the company’s Chinesename.2. Achieving customer success and own success
As a service-centric enterprise, SF Holding has always been customer-oriented and is committed to providingcustomers with above expectation services, to create value for customers and help them to ach ieve success. Forexample, in June 2018, during the Shanghai Cooperation Organisation Summit, the Qingdao government not onlylimited car traffic but also that of motorcycles. Thus most express companies couldn’t perform delivery duringthat period. To preserve the timeliness of its express deliveries, SF Holding implemented an on-foot deliverymodel in Qingdao’s five districts. For five days, customers received express packages from deliveries made bywalking, and the situation became viral on WeChat Moments. In addition, in the 3C, fresh produce, apparel,pharmaceutical, and similar industries, SF can provide a series of integrated logistics solutions based on customerneeds and unique industry characteristics. In helping customers reach success, SF helps itself to becomesuccessful.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
3. Innovation drives SF forward
SF Holding advocates a culture of innovation, emphasizing that anyone and any move can be innovative. Inrecent years, SF Holding has innovated continuously, not only in the field of logistics UAVs, smart devices, andsmart packaging, but also in smart services, smart decision-making, and smart cloud warehouse. SF Holding hasobtained extraordinary results in technological innovations such as artificial intelligence, Internet of Things, cloudcomputing, and machine learning. In addition, SF Holding also put much emphasis on internal managementinnovation and the construction of knowledge library. In 2017, it won the highest honor in the internationalknowledge management field, namely, Global IOU MAKE (Most Admired Knowledge Enterprises). SF Holdingis the only company in China that won this award in 2017. Innovation is found everywhere within SF, from theinnovators who have contributed many patents in SF Technology or various laboratories, to the civilian inventorswho have improved production tools and materials used in distribution hubs and service points---the winners ofthe "Best SFer Award," which is the highest honor of SF staff, consists of a large number of innovators. The powerof innovation drives SF Holding to keep moving forward.4. Equality and respect unite hearts
SF Holding advocates treating every person equally and with respect, regardless of role and level within thecompany.In February 2017, in SF's listing ceremony, the courier who was beaten by a customer was invited toring the bell to gether with the president Wang Wei to share the glorious moment. A corporate culture of equalityand respect lets the hearts of SF’s hundreds of thousands of employees feel united.5. United as one, we are strong
SF Holding advocates the spirit of solidarity. Everyone must be cooperative and unite every employee’sstrengths in order to achieve the same goals. During the peak season, such as the 11.11 Festival, Mid-Autumn
Festival, National Day, and Spring Festival, the president, management team, middle management, and back
office staffs will go to service points and distribution hubs to support and sympathize with the frontline staffs. Theculture makes SF Holding more cohesive and effective.6. Taking ownership and offering compassion
SF Holding advocates accountability. It does not only require employees to fulfill their responsibilities andperform their duties, but also encourage employees to take social responsibility. Under this cultural influence,returning lost-and-found money, helping others, saving people and fighting fires, doing the right thing, workingfor the public good, and other positive events occur more and more frequently. During the first half of 2018, actsof kindness included a courier in Guangxi using his car as a bridge to help students across a flooded street during
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
a storm, a courier in Shaoxing jumping into a fast-flowing river to rescuing a fallen senior, and a courier in Jibeirescuing 46 students from a school bus fire. These incidents were reported by the People’s Daily official WeChataccount, local television stations, and numerous other media outlets, promoted the social image of SF Holding.During the six “Best SFer” awards that have been held, 15 have received the “Social Responsibility Award,” SF’shighest honor for recognizing those who have achieved outstanding performance in fulfilling their socialresponsibilities.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 4 Management Discussion and Analysis of Business
Operation
I. Business Performance in the First Half of 2018
In the first half of 2018, China's macro economy continued its 2017 trend of stable with positive outlook anda number of macro economic indicators improving. The economy generally achieved steady growth, which hassupported the sustained and healthy development of the express delivery industry. According to data from theState Post Bureau, during the first half of 2018, cumulative express delivery volume was registered at 22.1 billionparcels, a 27.5% increase year over year. Cumulative express delivery revenues reached RMB 274.5 billion, a25.8% increase year over year. Market scale grew rapidly, and industry concentration has accelerated. Benefitingfrom the flourishing industry, in the first half of the year, SF Holding achieved good financial results and rapidbusiness growth, as detailed below:
1. Overall financial performanceFinancial status: At the end of the reporting period, the company's total assets were RMB 59.0 billion, anincrease of 2.3% from the end of 2017. Resulting from good profitability in the first half of 2018, and dividenddistribution of 2017 fiscal year, net assets attributable to the shareholders of the listed company at the end of thereporting period was RMB 33.86 billion, an increase of 3.56% from the end of 2017. At the same time, goodperformance growth brought healthy cash flow. Supplemented by sound financial management and controlmeasures, the company's debt-to-asset ratio at the end of the reporting period further decreased 0.8% from 43.22%on December 31, 2017, to 42.46% on June 30, 2018. The balance sheet was stable and optimistic.
Revenue: In the first half of 2018, the company realized 1.86 billion shipments, a year-over-year increase of35.29% and revenues of RMB 42.5 billion, a year-over-year increase of 32.16%, of which express and logisticsrevenue were RMB 42.16 billion, a year-over-year increase of 31.74%, a growth rate that far exceeds that ofindustry average published by the State Post Bureau’s official. In addition, high-quality service brought a higherbrand premium. From 2016 to the first half of 2018, the average revenue per parcel was RMB 22.15, RMB 23.14,and RMB 22.69, respectively, far surpassing that of the industry average of RMB 12 to RMB 14. High averagepremiums and stable revenue growth ensured the company's continued healthy profitability.Profitability: I n the first half of 2018, the company’s profits continued to grow at a stable pace. Net profitattributable to the shareholders of the parent company was RMB 2.23 billion, a year-over-year increase of18.59%. E xcluding non-recurring gains and losses, net profit attributable to the shareholders of the parentcompany was RMB 2.09 billion, which is 59.93% of the committed net profits of 2018 (RMB 3.49 billion), anincrease of 16.53% from RMB 1.79billion in the same period last year. The main financial indicators are shown inthe table below. For more detailed financial analysis, please refer to the related sections of this semi-annual report.
Category Item
End of re port ing
period
End of previous
year
Increase/D ecrease Over
Previous Year EndBalance
Sheet
Total assets (billions RMB) 59.00 57.68 2.30%Total equity attributable to shareholders
of the parent company(billions RMB)
33.86 32.70 3.56%Debt to Asset Ratio 42.46% 43.22% -0.76%
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Category Item
Current reporting
period
The same periodof previous year
Increase/D ecrease over thesame period of previous year
Operations
Shipments (billions) 1.86 1.37 35.29%Express logistics revenue (billions RMB) 42.16 32.00 31.74%Average revenue per shipment (RMB) 22.69 23.30 -2.63%
IncomeStatement
Revenue (billions RMB) 42.50 32.16 32.16%
2.23 1.88 18.59%Net profit after deducting non-recurring
profi t or los s attributable to shareholdersof the parent company(billions RMB)
2.09 1.79 16.53%Weighted average return on net assets ( %) 6.67% 8.84% -2.17%
Earnings per share (RMB per share) 0.51 0.45 13.33%
2. Steady growth of traditional businesses contribute to sustainabl e and heal thy revenue
SF Holding proactively responded to various national economic initiatives, focused on changes in customersand industry needs, and made a series of achievements.Customers: During the first half of 2018, in response to the diversification of industry and customer needs, SFHolding focused on industry characteristics, mined deeply into customer needs under different use casesthroughout the end-to-end process, and applied scientific and technological methods to drive internal systemchanges. With continuously improving customer service capabilities, we achieved stable and healthy growth ofcustomer volume and revenues.Cash customers: C ash customer management continues to see innovation and change. Focusing on customer lifecycle management, a complete workflow consisting of “pull in – promote repurchases – let go to return” wasconstructed. In addition, by focusing on the eight main categories of daily life (finance, communication, shopping,
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
leisure, housing, health, education, transportation), we opened up resources and shared traffic, establishing a“maintain key customers, keep mass market customers active” reward system. In the first half of 2018, cashcustomer revenues increase 21.2% year over year, 3.1% higher than in the prior year period, and individualmember revenue grew 111.6%, 90.3% higher than in the prior year period. In the future, we will continue to takeadvantage of data and use live data to activate the sales of cash customers, continue to focus on customer lifecycle management and use web-based digital marketing capabilities to enhance user loyalty, and realize long-termstable business growth.Credit account customers: I n 2018, SF is focused on industry chains, approaching key industry customers withintergrated logistics solutions and continuously upgrading our customer serving capabilities. In the first half of theyear, credit account customer revenues increased 40.4% year over year, increasing 13.34% over the prior yearperiod. The number of active account customers grew to 951,300 in June 2018 from 712,700 in June 2017, anincrease of 33.49%, of which the proportion of customers spending more than RMB 1 million increased 1.7%comopared to the same period of 2017. By distinguishing between different industries, between different businessuse cases throughought end-to-end processes, refinement of all touch points, and digitization, customer servicequality and the customer experience have all improved. Existing customer revenue retention increased 3.1% fromthe prior year period, and the proportion of multi-product customers increased 9.2% from the prior year period.
A relatively decentralized and independent customer structure, a stable and growing number of activecustomers, a full-cycle risk prevention and control system, a multi-product portfolio, and diversified solutionscollectively ensure the long-term stable and healthy growth of SF Holding’s revenue.
Note: Active credit account customers refer to credit account customers who have revenue records in thecurrent month.
Express product: In the first half of 2018, SF Holding continued to enhance its express delivery capabilities andto consolidate and enhance its industry-leading advantages. High-quality services ensured the healthy and stablegrowth of the business. During the reporting period, the revenue of the express product was RMB 25.7 billion, an
712,657951,355
-200,000400,000600,000800,0001,000,000
Jan.Feb.Mar.Apr.May.Jun.
Active credit account customers
20172018
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
increase of 18.17% over the same period of 2017.Economy product: In 2018, SF Holding continues to optimize and upgrade the economy product. We build anindependent operating model specifically for economy products by establishing a faster and safer groundtransportation network with a higher quality-to-price ratio by optimizing end-to-end operating segments, models,and frameworks, and continuing to expand the target customer group. It will also integrate economy products, SFHolding’s ground transportation network, and operational framework transformation to integrate technology andimplement product process re-engineering. During the reporting period, economy products’ revenues were RMB9.9 billion, increasing 53.71% year over year.3. New business devel opm e nt s(1) Heavy cargo
Since SF Holding officially launched heavy cargo transportation products in 2015, it has leveraged its strongnetwork capabilities to continuously build and refine its heavy cargo network to meet more customer needs. As ofJune 30, 2018, SF Holding had 899 heavy cargo service points and continued to optimize its heavy cargo layout ofdistribution hubs using professional network planning. Total heavy cargo operating areas exceed 883,000 squaremeters, covering 291 major cities and regions in 31 provinces across the country with more than 10,000 vehicles.In March 2018, SF Holding acquired the business of Guangdong Xinbang Logistics Co., Ltd. and established the“Shunxin Jieda” independent express transportation brand to lay the network foundations and capabilityadvantages required to rapidly expand the heavy cargo business. In May 2018, Shunxin Jieda convenedtransportation supplier conventions to hire suppliers in major cities across the country, and was enthusiasticallyreceived. The network was established faster than expected, its coverage wider than expected, and is espected toofficially launch its operations by the end of this year.
Thanks to the continuous improvement of the heavy cargo service network and industry-leading servicepunctuality, the revenue of the company's heavy cargo business in the first half of 2018 was RMB 3.5 billion
RMB, an increase of 95.8% year over year，and the overall market share of heavy cargo business continued to
increase. Major customers include Apple, Heilan Home, Midea, Hisense, and Vipshop.(2) Cold chain
As of the end of the reporting period, SF Holding's cold chain transportation network covered 139 cities andsurrounding areas. SF holding held 51 refrigerated food product warehouses with operation area of 234,000square meters, which already acquired international high-standard DQMP certification, equipped with advanced
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
automated refrigeration equipment, smart temperature monitoring and control systems, and professional-gradeoperations management, and integrating the ability to manage multiple temperature zones, such as freezing,refrigerated, constant, and room temperatures, with high-standard cold storage capabilities. SF holding's had 681refrigerated trucks, and 123 food product transportation routes across core cities in the north east, North China,East China, South China, and Central China,featuring customized packaging, high-energy storage refrigeranttemperature control technology, storage temperature and humidity monitoring and warning systems. Besides, theself-developed ground transportation resource trading platform connected to vehicle GPS and vehicle-mountedtemperature control and real-time monitoring systems and seamlessly connected with SF Express's cold chainnetwork. With its high-standard cold warehouses, leading technology and strict quality control processes, SFHolding is able to provide fresh produce and food product industry customers with professional, safe, custom, andeffective supply chain solutions that cover food product industry production, E-commerce, ssales, retailing, andother functions. Major customers include Family Mart, Shuanghui, and Daxi. In August 2018, SF Holding and theU.S.’s HAVI Group formally announced in Shenzhen the formation of New HAVI in China (over which SF willhave control). After New HAVI is established, we will continue to operate HAVI’s current supply chain andlogistics businesses (including domestic cargo transportation management) in mainland China, Hong Kong, andMacau. At the same time, both parties will the growth of New HAVI and develop both parties’ cold chain logisticsadvantages and “1 + 1 > 2” cooperative synergies, innovate continually base on diverse needs of the Chinamarket, continue to provide customers with an integrated logistics solution and accelerate the development ofChina’s cold chain logistics.
As of the end of the reporting period, SF Holding’s pharmaceutical network covered 132 prefecture-levelcities and 962 counties. Nationally, we had 3 GSP certified medical warehouses with operation area of 298,000square meters, which had obtained all relevant operationing licenses including the "Drug Business License", the"GSP Certification", the "Medical Device Operation Enterprise License," and the State Food and DrugSupervision and Administration’s "Approval for Launching Pilot Projects for Third-Party Modern Logistics ofPharmaceuticals". SF Holding's had 24 pharmaceutical transportation routes, including core cities in the northeast, North China, East China, South China, and Central China, and 209 GSP certified refrigerated pharmaceuticaltrucks equipped with a complete logistics information system and fully visual TCEMS monitoring platform,which was developed in-house. Focused on providing pharmaceutical customers professional, safe, controllablelogistics supply chain services, our industry coverage includes production, E-commerce, sales, and retail. Maincustomers in the pharmaceutical industry include Bayer, Merck, Harbin Pharmaceutical Group, 999 Group,
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Sanofi, Guangzhou Pharmaceutical Holdings, and Tai An Tang. In the future, SF Pharmaceuticals will continue togrow based on technology, quality, and digitization to become China’s most valuable and most influentialpharmaceutical and health supply chain service provider.
In the first half of 2018, the cold chain food product and pharmaceutical business realized revenues of RMB1.5 billion, a 47.7% increase year over year, maintaining its rapid growth.(3) Intra-city delivery
In 2018, the scale of the intra-city on-demand logistics market is projected to reach RMB 120 billion andachieve 32% compound annual growth in the next three years. In this environment of rapid growth, SF Holdinghas invested in an intra-city research and development team, with funding for it to be increased every year, withthe ulti mate service goal of achieving 30-minute deliveries for all industries and product categories. As of the endof the reporting period, SF Holding’s intra-city delivery revenue was RMB 343 million, a 158.79% increase yearover year. The intra-city delivery relies on strong technological capabilities, diversified operating models, andflexible transportation resources in order to continue to grow intra-security on-demand logistics market share.
Aiming to esta blish the c ountry’s largest and leading third-party direct, on-demand logi stics service provider,SF Holding’s intra-city service already covers more than 250 cities, rapidly seizing intra-city on-demand logisticsmarket share and gradually becoming an industry leader. We have also already established a diverse and healthyportfolio of customers, serving the apparel industry, restaurant and takeaway delivery industry, grocery industry,beverage industry, consumer electronics industry, and fresh flowers and cakes industry. Providing customers withfast, high-quality, and safe delivery services, our partner brands include McDonald’s, KFC, Luckin Coffee,Tianhong, Yonghui, Pizza Hut, and Heilan. We have also opened intra-city urgent delivery services in 24 citiies,including Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou to provide one hour pick-up and deliveryservice, or 30 minutes as fastest.(4) International express
SF Holding is committed to providing convenient and reliable international express delivery and logisticssolutions for domestic and foreign manufacturing companies, trading comopanies, cross-border E-commerce, andconsumers, including international standard express, international ecomony express, international small parcel,overseas warehousing, transshipping, and other different categories of timing standards and import/exportservices. In addition, we can provide integrated and customized import/export solutions based on customer needsincluding market access, transportation, customs clearance, and delivery to help China's outstandingenterprises/products “go abroad” as well as to “import” overseas high-quality enterprises/commodities to China.
As of the end of the reporting period, the international standard express/ecomony express covered 53countries including the United States, the European Union, Russia, Canada, Japan, Korea, ASEAN, India, Brazil,Mexico, and Chile. The international small parcel business covered 225 countries and regions. In compliance with
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
the Blue Ocean development trend of cross-border E-commerce logistics, SF Holding has continuously enrichedits one-stop industrial solutions for cross-border services. For example, by setting up overseas warehouses,providing first leg logistics services for Chinese merchants using overseas warehouses, providing assuredchartered flight services in key corridors, integrating overseas resources and domestic high-quality cold chainservice capabilities, we create a "one-stop" cross-border fresh produce and seafood cold chain services forcustomers while achieving breakthroughs in new Break-bulk Direct services. During the reporting period,international express revenue was RMB 1.2 billion, a year-over-year increase of 40.78%.
SF Holding joined the new series funding round for the American logistics service platform Flexport in April2018. Flexport was established in 2013, headquartered in San Francisco.It is an authorized freight forwardedcommitted to providing customers with sea, land, and air freight transportation, customs clearance, cargoinsurance, and other transparency services. Flexport and SF established a strategic partnership that allows itsservices to expand into China and the global market. At the same time, SF will draw on Flexport’s capabilities tooptimize its own products and strengthen its competitiveness.
In addition, under the traction of the "The Belt and Road" strategy at the national level, the Chinese economywill further step up cross-border trade and business activity. In order to comply with the Blue Ocean developmenttrend of international trade and cross-border E-commerce, SF Holding and UPS announced in May 2017 toestablish a joint venture company in Hong Kong to develop and provide international logistics products,focus on cross-border trade, and expand the global market. As of the end of the reporting p eriod, the jointventure has been officially established, and operations have begun. The establishment of the joint venture willhelp the two companies in China and the United States to learn from each other's strengths in network and scale,increase efficiency, and provide customers with more diversified choices and better services. The cooperationbetween the two parties will benefit SF Holding's long-term international strategic growth, optimize itsinternational logistics network, and enhance its international competitiveness.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
II. Main Business Analysis
For details, see “I. Business Performance in the First Half of 2018” in “Chapter 4 Discussion and Analysis ofBusiness Operations.”
Year-over-year changes to major financial data
Unit: RMBReporting Period
previous year
YoYChange
Rationale
Revenues
| The same period of | |
| 42,503,599,511.93 |
32,160,932,363.81
32.16%
Operating revenue increased by 32.16%,or RMB 10.3 billion, over the same
increase in delivery volume.Cost of revenue 34,467,212,820.18
| period of previous year, mainly due to the | ||
25,347,477,265.57
35.98%
Cost of revenue increased by RMB 9.1billion over the same period of previousyear, in line with the increase in revenueduring the reporting period.
Selling anddistributionexpenses
959,568,129.92
635,612,144.35
50.97%
Selling and distribution expensesincreased by RMB 324 million over thesame period of previous year, mainly dueto the increase in marketing expenses inline with the business growth and theincrease in market promotion expensesfor new businesses.
| General and |
administrationexpenses
3,815,523,582.62
3,206,870,451.97
18.98%
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Reporting Period Prior Year Period
RationaleResearch and
developmentexpenses
396,939,568.34
| YoY Change | ||
203,739,223.62
94.83%
Research and developm ent expensesincreased by 94.83%, or RMB 193million, mainly due to the increase inresearch and development activities.
Financialexpenses
10,327,590.07
164,180,999.14
-93.71%
| Financial expenses decreased by RMB |
154 million over the same period ofprevious year, mainly due to the increasein interest income from inter-bankdeposits offsetting other financial
| expenses. | ||
| Income tax expense |
792,827,877.77
716,921,280.10
10.59%
| Net cash flows |
from/(used in)operating
| activities | 2,280,581,118.96 |
1,805,856,072.13
26.29%
Net cash flows(used in) /frominvestingactivities
-6,127,088,965.14
2,321,240,529.77
-363.96%
| Net cash flow (used in) /from investing |
activities decreased by RMB 8.4 billionover the same period of previous year,mainly due to the net increase in wealth
Net cash flowsfrom financingactivities
-78,972,779.11
| management products and the purchase of long-term assets. | ||
-126,564,627.15
-37.60%
| The net cash flow from financing |
activities increased by RMB 48 millionover the same period of previous year,mainly due to an R M B 421 mi l li onincrease in b
increase in dividends, and RMB 189million increase in net income from other
| financing activities. |
Net(decrease)/increase in cash andcash equivalents
-
3,996,303,788.39
| 3,912,118,111.13 |
-197.89%
| The net increase in cash and cash equivalents decreased by RMB 7.9 billion over the same period of previous year. For |
details, please refer to the above reasonsfor changes in cash flow of operatingactivities, investment activities, and
| financing activities. | ||
| Research and |
developmentexpenditures
766,262,215.48
343,451,633.04
123.11%
| Research and developm ent expenditures |
increased by 123.11%, or RMB 423million, mainly due to the rapid increase
During the reporting period, there were major changes in profit composition or sources of profit
Yes √No
S.F. Holding Co., Ltd. 2018 Semi-Annual ReportComposition of revenue
Unit: RMB
Current reporting period The same period of previous year
Increase/Decreaseover th e same period
of previous yearAmount
Propor tion of
Revenue
Amount
Propor tion of
Revenue
Revenue 42,503,599,511.93 100% 32,160,932,363.81 100% 32.16%
Categorized by industryExpress & logistics 42,160,162,854.77 99.19% 32,003,280,296.22 99.51% 31.74%Sales of goods 54,768,168.17 0.13% 28,114,357.57 0.09% 94.80%Others 288,668,488.99 0.68% 129,537,710.02 0.40% 122.85%Categorized by productExpress product 25,731,642,712.22 60.54% 21,775,097,189.76 67.70% 18.17%Economy product 9,885,355,748.45 23.26% 6,431,287,247.60 20.00% 53.71%Heavy cargo 3,450,872,512.36 8.12% 1,762,307,512.39 5.48% 95.82%Cold chain 1,528,029,936.00 3.60% 1,034,482,560.13 3.22% 47.71%Intra-city delivery 342,887,870.67 0.81% 132,499,113.44 0.41% 158.79%Inter na ti o na l product 1,221,374,075.08 2.87% 867,606,672.90 2.70% 40.78%Others 343,436,657.15 0.80% 157,652,067.59 0.49% 117.84%Categorized by regionExpress logisti cs –
East China
12,443,526,804.15 29.27% 9,224,139,682.84 28.68% 34.90%Express logisti cs –
South China
10,660,429,957.42 25.08% 8,030,751,287.30 24.97% 32.75%Express logisti cs –
North China
9,245,291,089.11 21.75% 7,202,068,006.73 22.39% 28.37%Express logisti cs –
Central China
5,656,142,970.02 13.31% 4,251,468,639.58 13.22% 33.04%Express logisti cs –
West China
3,250,923,966.29 7.65% 2,473,650,199.10 7.69% 31.42%Express logisti cs –
Hong Kong andMacao
644,905,256.71 1.52% 591,647,708.33 1.84% 9.00%Express logisti cs –
Overseas
258,942,811.07 0.61% 229,554,772.34 0.72% 12.80%Commodity and
others
343,436,657.16 0.81% 157,652,067.59 0.49% 117.84%
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Industries, products, or geographies accounting for more than 10% of company revenue or operating profit
√ Applicable □ Not applicable
Is the company required to comply with disclosure requirement of a particular indutry?YesExpress Delivery Service IndustryThe company is required to comply with the disclosure requirements of the “Guidelines of the Shenzhen StockExchange for Industrial Information Disclosure No.9 - Engagement of Listed Companies in Express DeliveryServices Business.”
Unit: RMB
Revenue Cost of revenue
GrossProfitMargin
RevenueIncrease/Decrease ov erthe Same Period
of Last Year
Cost of revenue
Increased orDecreased overthe Same Period
of Last Year
Gross Pro fitMargin In cr eas edor Decreased overthe Same Period of
Last YearIndustriesExpress &
logistics
42,160,162,854.77 34,214,278,112.75 18.85% 31.74% 35.53% -2.27%
The company has accounted its operation costs according to the nature of resource consumed appropriately.However, a fair and accurate allocation of cost by product or by region has not been possible. It was because theexpress and logistics industry itself was basically a complex network, by highly connection, overlaps in differenttypes of resources consumed, all direction of waybills, a tremendous number of customers, highly crossover ofdifferent types of resources fully shared.
Disclosure of express delivery volumes，revenues and average revenue per parcel and analysis of changes and
rationale
Explanation of related changes those are greater than 30% from the prior year period
□ Applicable √ Not applicable
In the first half of 2018, the national express delivery market continued its positive growth trend. According todata from the State Post Bureau, during the first half of 2018, cumulative express delivery volume was registeredat 22.1 billion parcels, a 27.5% increase over same period of previous year. Cumulative express delivery revenuesreached RMB 274.5 billion, a 25.8% increase over same period of previous year. In the first half of the year, thecompany’s traditional business maintained positive growth, benefiting from the rapid growth of new business.Overall logistics service capabilities also improved, and in the first half of 2018, the company’s growth rate farsurpassed that of the industry average, realizing more than 1.9 billion shipments, a 35.3% increase over sameperiod of previous year. Express transportation logistics revenues were RMB 42.2 billion, a increase of 31.7%over same period of previous year. average revenue per shipment was RMB 22.69. For details, see “I. BusinessPerformance in the First Half of 2018” in “Chapter 4 Discussion and Analysis of Business Operations.”
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
III. Non-core Business Analysis
√ Applicable □ Not applicable
Unit: RMB
Amount
Propor tion of
Total Profit
Reason Sustainable
Investment income 199,187,461.94 6.64%
Mainly including Investmentincome from wealth management
products，Gains/(losses) arising
from disposal of long-term equityinvestments and share of net gainsor losses o f in vestees under theequity method
The income fromwealth managementproducts issustainable; otherinvestments are notsustainable.
Gains and losses arising fromchanges in f air value
-4,812,095.66 -0.16%
Mainly including changes in thefair valu e of trading financial assetsand liabilities.
NoImpairment losses 13,707,446.49 0.46%
Mainly including bad debt loss e s ofaccounts receivable and otheraccounts receivables.
NoNon-operating income 55,622,496.87 1.85%
Mainly including governmentgrants and compensation incomeunrelated to daily activities.
NoNon-oper ating expenses 48,368,701.34 1.61%
Mainly including donations,compensation expenses, fines, andlate paymen t ex penses.
NoOther income
74,730,377.55 2.49%
Mainly including governmentsubsidies related to daily activ ities.
NoLosses on dispo sal of fixed assets
-6,982,780.03 -0.23%
Mainly including the gains andlosses from disp osal of fixed assets.
No
IV. Analysis of Assets and Liabilities
1. Major Changes in Asset Composition
Unit: RMB
End of Curr e nt Re por t i ng P e ri o d End of Prior Year Period
Increase/Decrease inProportion
Major ChangesAmount
Proportion
of TotalAssets
Amount
Proportion
of TotalAssets
Cash at bank andon hand
13,278,406,964.25 22.51% 17,318,372,791.12 30.03% -7.52%
For details, refer to CashFlow in section II MajorBusiness Analysis inChapter 4 Discussion andAnalysis of Busin essOperations.
Notes recei vableand accou ntsreceivable
5,712,559,356.29 9.68% 5,813,325,669.28 10.08% -0.40% No significant changes
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
End of Curr e nt Re por t i ng P e ri o d End of Prior Year Period
Increase/Decrease inProportion
Major ChangesAmount
Proportion
of TotalAssets
Amount
Propor tion ofTo ta l Assets
Inventories 499,174,642.28 0.85% 446,359,026.86 0.77% 0.08% No significant changesInvestment
properties
2,047,152,752.31 3.47% 1,991,594,322.02 3.45% 0.02% No significant changesLong-term equity
investment
1,068,052,092.25 1.81% 604,683,890.67 1.05% 0.76%
Increased due to theincrease in investment injoint ventures
Fixed assets 12,152,101,058.31 20.60%
11,895,129,381.1
20.62% -0.02%
Increased due to theincrease i n the company'sinvestment in electronicequipment, aircraft andaccessories
Construction inprogress
3,020,960,583.54 5.12% 2,306,920,413.29 4.00% 1.12%
Increased due to theincrease i n investment inaircraft modification andother engineering projects
Other currentassets
5,986,639,795.71 10.15% 4,384,765,117.56 7.60% 2.55%
Increased due to theincrease i n wealthmanagemen t products
Available-for-salefinancial as sets
2,399,044,328.85 4.07% 1,803,267,331.92 3.13% 0.94%
Increased due to theincrease i n investments
Other non-currentassets
1,671,951,540.07 2.83% 143,213,350.40 0.25% 2.58%
Increased due to theincrease i n prepaid officebuildings and aircraftpurchases.
Short-termborrowings
6,431,106,604.43 10.90% 4,619,193,530.69 8.01% 2.89%
include short-termborrowings, long-termborrowings, and long-termborrowings that are duewithin one year. The totalamount of t he s eborrowings increased by992 million RMBcompared with 2017mainly due to the increasein borrowings.
Notes payable andaccounts payable
6,486,860,179.88 10.99% 6,905,411,234.18 11.97% -0.98%
No major ch angesEmployee benef its
The company's borrowings
payable
2,255,587,099.28 3.82% 2,721,423,825.23 4.72% -0.90%
No major ch angesCurre nt por t i on of
non-currentliabilities
1,983,602,828.62 3.36% 2,787,710,410.86 4.83% -1.47% See the above short-term
borrowing description.Long-term
borrowings
2,272,965,112.47 3.85% 2,345,240,281.28 4.07% -0.22% See the above short-term
borrowing description.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Opening Balance
Changes in FairValue Gains and
Losses inCurr e n t P eriod
Accumulated Fair
Value ChangesIncluded in Equity
Provision forImpairmentin Current
Period
Increase in theCurr e n t P eriod
Amount of
Sales inCurrentPeriod
Closing BalanceFinancial assets
1. Fi nancial assets at
fair value throughprofit or loss(excludingderivative financialassets)
16,232,692.66 -5,065,174.61 3,131,400.96 14,298,919.012.Derivative financial
assets
1,586,700.69 -539,548.66 1,071,619.483. Available-for-sale
financial assets
1,734,756,526.14 -127,625,141.88 641,160,248.04 9,386,163.00 2,243,199,811.64Total financial assets 1,752,575,919.49 -5,604,723.27 -127,625,141.88 644,291,649.00 9,386,163.00 2,258,570,350.13Total 1,752,575,919.49 -5,604,723.27 -127,625,141.88 644,291,649.00 9,386,163.00 2,258,570,350.13Financial liabilities 784,639.53 -792,627.61
Did significant changes occur for the company's major asset measurement attributes during the reporting period?
□ Yes √ No
3. Limitation of asset rights as of the end of the reporting period
Unit: RMBBook Value at the End of Period Limitation ReasonCash at bank 30,000,000.00 Long-term borrowing depositOther cash balances 139,907.00 SF Holding's Letter of GuaranteeOther cash balances 480,000.00 Chengdu Fengcheng's Letter of GuaranteeBalance with central bank -
statur y res er ve
1,135,652,760.16 Legal reserves saved in the Central BankFixed assets 1,389,003,362.43 Long-term borrowing mortgageIntang ible assets 2,721,221,378.15 Long-term borrowing mortgageInvestment properties 1,433,941,203.85 Long-term borrowing mortgage
Total 6,710,438,611.59
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
V. Analysis of Investments
1. General situation
√ Applicable □ Not applicable
Reporting Period (RMB)
Investment Amount During the
Prior Year Period (RMB)
Change5,586,627,745.11
| Investment Amount During the |
3,096,726,625.81 80.40%
The company is required to comply with the disclosure requirements provided by the Guidelines of theShenzhen Stock Exchange for Industrial Information Disclosure No.9 - Engagement of Listed Companies inExpress Delivery Services Business.
Investment Amount During the Reporting Period (RMB)Land 120,535,858.27
Warehouse 68,798,468.12
Sorting center 372,672,586.73
Aircraft 703,667,461.77
Vehicle 517,489,466.60
Information technology equipment 280,110,085.68
Office and Buildings 1,598,660,630.63
Equity investments 1,111,402,506.37
Others 813,290,680.94
2. Signi ficant Equi ty Investment Obtained During the Reporting Period
□ Applicable √ Not applicable
3. Significant Non-Equity Investment Ongoing During the Reporting Period
□ Applicable √ Not applicable
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
4. Financial Assets Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMBAsset Type
Initial Investment
Cost
Changes i n Fair Value
Gains and Losses in
Current Period
Accumul ated Fair
Value ChangesIncluded in Equity
Amount IncreasedDuring the Reporting
Period
Selli ng Amount During
the Repor t i ng Per iod
AccumulatedInvestment Income
Total financial
assets
CapitalSource
Stock 628,617,185.85 -5,065,174.61 -87,668,361.88 24,358,065.74 9,386,163.00 -2,539,036.02 627,521,927.39
Self-ownedfunds
Financialderivatives
-539,548.66 -293,585.40 1,071,619.48
Self-ownedfunds
Others 1,519,933,583.26 -39,956,780.00 619,933,583.26 1,629,976,803.26
Self-ownedfunds
Total 2,148,550,769.11 -5,604,723.27 -127,625,141.88 644,291,649.00 9,386,163.00 -2,832,621.42 2,258,570,350.13 --
5. Investments in Securities
√ Applicable □ Not applicable
Unit: RMBSecurity
Type
StockCode
of Security
| Abbreviation | Initial Investment |
AccountingMeasurement
Model
Book value a t thebeginning of thereporting period
Gains an d losses
| from changes in fair |
value during the
Accumulated fair
value changesincluded in equity
Purchase amountduring the reporting
period
Sales amoun t
during thereporting
period
Gains an d losses of
| period | the re po rting period |
Book value at the end
Accounting
items
Cashsource
Domesticandforeignstock
06166
| of the reporting period | ||
| China VAST |
Ind
397,869,211.38
Fair valuemeasurement
527,881,220.47
-48,151,760.51
483,521,611.05
Available-for-salefinancialassets
Self-ownedfunds
Domesticandforeignstock
000697
Ligeance
Mineral
100,479,358.35
Fair valuemeasurement
90,813,381.12
-34,353,149.96
21,226,664.78
9,386,163
-2,670,436.99
68,370,953.09
Available-for-salefinancialassets
Self-ownedfunds
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Security
Type
StockCode
of Security
| Abbreviation | Initial Investment |
AccountingMeasurement
Model
Book value a t thebeginning of the
reporting period
Gains an d losses
| from changes in fair |
value during the
Accumulated fair
value changes
included in equity
Purchase amountduring the reporting
period
Sales amoun t
during thereporting
period
Gains an d losses of
| period | the re po rting period |
Book value at the end
Accounting
items
Cashsource
Domesticandforeignstock
01492
ChinaZhongDiDairy
106,661,642.16
| of the reporting period | ||
Fair valuemeasurement
65,991,704.40
-5,163,451.41
61,330,444.24
Available-for-salefinancialassets
Self-ownedfunds
| Othe r securities held at the end of |
the period
23,606,973.96
--16,232,692.66
-5,065,174.61
3,131,400.96
131,400.97
14,298,919.01
-- --
Total628,617,185.85
--700,918,998.65
-5,065,174.61
-87,668,361.88
24,358,065.74
9,386,163
-2,539,036.02
627,521,927.39
-- --
Disclosure Date of Securities Investment Approval Board Announcement October 27, 2017
Disclosure Date of Securities Investment Approval Shareholders Meeting Announcement(if any)
Decemb er 1,2017
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
6. Investments in Derivatives
√ Applicable □ Not applicable
Unit: millions RMB
Counterparty
Related partyrelationship
(Y/N)
Related-partytransactions
(Y/N)
Type ofderivatives
Initial
| investment |
amount
Starting
date
Ending
date
Investmentamount at thebeginning ofthe reporting
period
Provision
forimpairment
（if any）
Investmentamount at the
end of thereporting
period
amount atthe end of
| the reporting period to net assets of th e Company |
Gains/(losses) recognized during the
reporting periodBank No No
| Interest Rate swap contracts | 67.55 | 2016/07/25 |
2021/01/25
67.55
54.04
0.16%
0.28
Bank No No
| Forward foreign exchange contract |
6.63
2018/01/15
2018/01/22
-0.04
Bank No No
| Forward foreign exchange contract |
6.63
2018/01/15
2018/02/12
-0.13
Bank No No
| Forward foreign exchange contract |
6.63
2018/01/15
2018/02/26
-0.14
Total
| 87.44 |
--
--
67.55
54.04
0.16%
-0.04
Source of funds Self-owned funds
lawsuitif applicable N/A
| Disclos ure Date of Derivatives Investment Approval |
Board A nnounce ment（if an y）
March 14, 2018
| Disclos ure Date of Derivatives Investment Approval Shareholders Meeting Announcement (if any) |
N/A
Risk analysis and control measures for derivatives
| investment during the reporting period (including but not |
limited to market risk, liquidity risk, credit risk,operational risk, legal risk, etc.)
instr uments to carry out foreign exchange derivatives transactions (including foreign exchange forward and interest rate swap) topreservate f oreign currency asset and lock capital cost. The company has fully evaluated and controlled the foreign exchangederivatives investment and positions, as specified below:
1. Legal risks: The company's foreign exchange derivatives investment should comply with laws and regulations, and the rights andob
| ligations between the company and banks should be clearly stipulated. Control measures: The company formulated the “Hedging |
Management System” in accordance with domestic laws and regulations, and designated the responsible department to strengthenstudy o
ecompany reviewed the contracts strictly , defined the rights and obligations clearly in the contracts, and strengthened the complianceinspection.2. Operational risk: The operational risks might caused by employee operation, systems, etc., which lead to losses in the foreign
| exchange derivatives. Control measures: The company established management systems to clarify the roles and responsibilities, |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
supervision mechanism to reduce operational risks effectively through risk control of operation processes, decision-makingprocess es and transaction processes.3. Mar ket risk: The uncertainty of exchange rate and interest rate fluctuations in the foreign exchange market lead to relatively highmarket risk s in the foreign exchange derivatives transactions. In the case where the exchange rate or interest rate trend deviatessignificantly from the company's foreign exchange hedging transactions, the company's cost of locking in exchange rate or interestrate may exceed the amount when it is not locked, leading to potential losses. Control measures: The company's foreign exchangederivatives tradings adheres to the principle of prudent and steady operation, and speculative transactions of foreign exchangederivatives are forbiddened by internal pocilies. All foreign exchange derivatives transactions should based on normal businessoperations, and the transaction amount should not exceed the demand of actual business.The company studied and judged the trendof exchange rate and interest rate, and locked the exchange rate and loan interest rate through contracts to prevent market riskseffectively.Besides, the company r ecorded each transaction, check the records, and track the changes timely, properly arranged the
| delivery funds to prevent delivery default risk. | |
| Changes in fair value or market price of invested |
derivatives during the reporting period (the specific
The company an alysised the fair value of derivatives using the financial market fair value valuation report provided by the bank atthe end of the month. The Company recognized RMB 253,100 gains from changes in fair value during the reporting period.
| methods ,relevant assumptions and parameters used in the analysis of the fair value should be disclosed) |
| Explanation of whether the accounting policies and |
accounting principles of the company's derivatives aresignificantly changed compared with the previous
NOOpinions of independent directors on the company's
derivatives investment and risk control
| reporting period during the reporting period | |
| The indepe n de nt dir ectors believed that the company had established an internal control system for foreign exchange hedging and |
effective risk control measures in accordance with the requirements stipulated by relevant laws. Under the premise of complyingwith national laws and regulations and ensuring that the company's daily operation were not affected, the company used its ownfunds to carry out foreign exchange hedging in a timely manner, which was conducive to preventing interest rate and exchange raterisks, reducing th
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
7. Use of Proceeds
√ Applicable □ Not applicable
(1) Overall use of proceeds
√ Applicable □ Not applicable
Unit: millions RMB
To ta l Amount Raised
Total Proceeds Used in the Current Period (Note 1)
| 7,822.18 |
| 1,913.07 |
Total Accumulated Proceeds Used
Total Proceeds with Changed Use During the Reporting Period
| 6,121.67 |
Total Accumulated Proceeds with Changed Use (No te 2)
Proportion of Total Accumulated Proceeds with Changed Use
| 3,331.89 |
| 42.60% |
Use of proceedsDuring the reporting period, proceeds used totalled RMB1,913
materials purchase and flight support projects total
| led RMB2,222.58 million. The accumulative use of proceeds for cold storage vehicles and temperature control equipment purchase projects totalled RMB 292.01 million. The accumulative use of proceeds fo |
rinformation service platform construction and next-gen
2,637.59 million. The accumulative use of proceeds for the construction of distribution hubs totalled RMB969.48million.
(2) Committed uses of proceeds
√ Applicable □ Not applicable
Unit: millions RMB
CommittedInvestment
eration logistics IT research and development projects totalled RMBProj ects and
Uses ofExcessProceeds
ProjectChanged(PartiallyChanged)
Committed
TotalInvestment
Amount
fromProceeds
TotalInvestment
Amount
afterAdjustment
(1)
AmountInvested
| Proj ects and | During the |
Reporting
Period
Accu
InvestmentAm ount As
| of the End of |
the Peri o d ( 2)
InvestmentProgress Asof the End
of the
| Period (3) = |
(2)/(1)
DateWhenProjectReaches
Availabilit
y Status
BenefitsAchieved
| Scheduled | During the Reporting |
Period
Achievement of
Benefits
Significant
| Expected | Changes to |
ProjectFeasibility
Committed investment projects1. Aviation
materialpurchaseand flightsupportproject
Yes
2,686.22
| 2,686.22 |
570.07
| 2,222.58 | 82.74% | December |
31, 2018
Note: 3
N/A
No
1.1Aviationmaterialpurchase
Yes
2,376.22
| 1,572.99 |
331.08
| 1,274.67 | 81.04% | December |
31, 2018
Note: 3
N/A
No
1.2Recruitment of pilots
Yes
310.00
275.55
25.50
170.89
| 62.02% | December |
31, 2018
Note: 3
N/A
No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
CommittedInvestment
Uses ofExcessProceeds
ProjectChanged(PartiallyChanged)
Committed
TotalInvestment
Amount
fromProceeds
TotalInvestment
Amount
afterAdjustment
(1)
AmountInvested
| Proj ects and | During the |
Reporting
Period
Accu
InvestmentAm ount As
| of the End of |
the Peri o d ( 2)
InvestmentProgress Asof the End
of the
| Period (3) = |
(2)/(1)
DateWhenProjectReaches
Availabilit
y Status
BenefitsAchieved
| Scheduled | During the Reporting |
Period
Achievement of
Benefits
Significant
| Expected | Changes to |
ProjectFeasibility
1.3Aircraftpurchaseandmodification
Yes
837.69
213.48
777.02
| 92.76% | December |
31, 2018
Note: 3
N/A
No
2. Coldstoragevehicles andtemperaturecontrolequipmentpurchase
Yes
717.95
292.01
292.01
| 100.00% | December |
31, 2018
Note: 4
N/A
No
2.1Purchaseof vehiclesfor coldchaintransport
Yes
497.29
280.57
280.57
| 100.00% | December |
31, 2018
Note: 4
N/A
No
2.2Purchaseof EPPtemperaturecontrolcontainers
Yes
220.66
| 11.44 |
| 11.44 | 100.00% | December |
31, 2018
Note: 4
N/A
No
3.Information serviceplatform
and next-generationlogistics ITresearch and
| development |
projects
Yes
1,119.18
| 3,448.57 |
1,075.47
| 2,637.59 | 76.48% | December |
31, 2018
Note: 5
N/A
No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
CommittedInvestment
Uses ofExcessProceeds
ProjectChanged(PartiallyChanged)
Committed
TotalInvestment
Amount
fromProceeds
TotalInvestment
Amount
afterAdjustment
(1)
AmountInvested
| Proj ects and | During the |
Reporting
Period
Accu
InvestmentAm ount As
| of the End of |
the Peri o d ( 2)
InvestmentProgress Asof the End
of the
| Period (3) = |
(2)/(1)
DateWhenProjectReaches
Availabilit
y Status
BenefitsAchieved
| Scheduled | During the Reporting |
Period
Achievement of
Benefits
Significant
| Expected | Changes to |
ProjectFeasibility
4.Distribution hub
| construction |
projects
Yes
3,298.83
| 1,395.38 |
267.53
969.48
| 69.48% |
Note: 6
N/A
No
4.1Zhengzhou SF E-commerceIndustrialPark project
Yes
505.85
3.44
3.44
| 100.00% | December |
31, 2018
Note: 6
N/A
No
4.2Changchun SF E-commerceIndustrialPark project
Yes
619.46
254.95
22.49
140.33
| 55.04% |
May 31,2019
Note: 6
N/A
No
4.3Wuxi SFE-
| commerce |
IndustrialPark project
Yes
418.34
222.91
66.95
191.47
| 85.89% |
October31, 2018
Note: 6
N/A
No
4.4
| Shanghai |
ShunhengLogisticsCo., Ltd.new factoryproject
Yes
506.34
188.16
82.65
163.74
| 87.02% |
August31, 2018
Note: 6
N/A
No
4.5SFExpressNantongDistrictAviationHub (phase2) project`
Yes
330.55
Proj ect investment cancelled after changes
4.6Hefeismartsorting base
Yes
264.27
429.09
71.80
242.67
| 56.56% |
January31, 2019
Note: 6
N/A
No
4.7SF E-commerceIndustrialYiwuIntegratedServiceCenter
Yes
249.01
117.32
10.54
| 80.51 | 68.62% |
June 30,2018
Note: 6
N/A
No
4.8Ningbo
| Transshippin |
g Center
Yes
225.88
90.55
7.98
| 71.72 | 79.2% |
March 31,2018
Note: 6
N/A
No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
CommittedInvestment
Uses ofExcessProceeds
ProjectChanged(PartiallyChanged)
Committed
TotalInvestment
Amount
fromProceeds
TotalInvestment
Amount
afterAdjustment
(1)
AmountInvested
| Proj ects and | During the |
Reporting
Period
Accu
InvestmentAm ount As
| of the End of |
the Peri o d ( 2)
InvestmentProgress Asof the End
of the
| Period (3) = |
(2)/(1)
DateWhenProjectReaches
Availabilit
y Status
BenefitsAchieved
| Scheduled | During the Reporting |
Period
Achievement of
Benefits
Significant
| Expected | Changes to |
ProjectFeasibility
4.9
| Wenzhou |
Ganglu E-commerceIndustrialPark project
Yes
179.13
88.97
5.13
| 75.60 | 84.97% |
October31, 2018
Note: 6
N/A
No
Subtota l ofcommittedinvestmentprojects
--
7,822.18
| 7,822.18 |
1,913.07
| 6,121.67 |
--
--
--
--
Investmentof excessproceeds
N/A
Total -- 7,822.18
| 7,822.18 | |||
1,913.07
| 6,121.67 |
-- --
-- --Rationale
behind whyplannedprogress orexpectedbenefit hasnot beenreached
“Shanghai Shunheng Logistics Co., Ltd. new factory project” was postponed due to renovation, and the progress of “SF E-commerce In dustrial Yiwu Integrated Service Center” slowed down due to operational strategy adjustment and projectsettlement.
Descriptionof majorchanges inprojectfeasibility
N/A
Amount, useand progress
of use ofexcessproceeds
N/AChanges in
location ofinvestmentprojectsusingproceeds
N/A
Changes inimplementat
Amount, useand progress
ion model of
investmentprojectsusingproceeds
N/A
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
CommittedInvestment
Uses ofExcessProceeds
ProjectChanged(PartiallyChanged)
Committed
TotalInvestment
Amount
fromProceeds
TotalInvestment
Amount
afterAdjustment
(1)
AmountInvested
| Proj ects and | During the |
Reporting
Period
Accu
InvestmentAm ount As
| of the End of |
the Peri o d ( 2)
InvestmentProgress Asof the End
of the
| Period (3) = |
(2)/(1)
DateWhenProjectReaches
Availabilit
y Status
BenefitsAchieved
| Scheduled | During the Reporting |
Period
Achievement of
Benefits
Significant
| Expected | Changes to |
ProjectFeasibility
Pre-investmentandreplacementofinvestmentprojectsusingproceeds
After consideration by the seventh meeting of the fourth session of Board of Directors on August 4, 2017, the company'ssponsor institutions, independent directors, and Board of Supervisors clearly expressed their consent to replace self-raisedfunds of a total of RMB 2.6 billion RMB with pre-
| investments in aviation material purchase and flight support projects, cold | |
storage veh icle and temperature control equipment purchase projects, information service platform construction and next-
details, refer to the disclosure of the company's announcement (Announcement No. 2017-046) in the Securities Times,Shanghai Securities News, China Securities Journal, and http://www.cninfo.com.cn on August 26, 2017.
Temporaryreplenishment ofliquiditywith idleraised funds
N/A
generation logistics IT research and development projects, and distribution hub construction projects with the proceeds. ForAmount and
rationale forsurplus ofthe rais edfund inprojectimplementation
The proceeds are still in the process of investment, and there is no raised funds surplus.
Use andplanned useof unusedproceeds
Unused proceeds will be used for aviation materials purchase and flight support projects, information service platformconstr uc t i on a nd next-generation logistics IT research and development projects, and distribution hub projects. Unusedproceeds are all deposited in the company's raised funds account in the regulatory bank for the purpose of improving capitalgains. The company r evi ewed and passed the Proposal on Adjusting the Use of Idle Raised Funds for Cash Management inaccordance with the Third Extraordinary Shareholders' General Meeting of 2017 and will purchase fixed-income wealthmanagemen t products using partial unused proceeds. As of June 30, 2018, the company deposited unused proceeds of 150million as a structured deposit and subscribed to capital-preservation fixed-income wealth management products of RMB1.5 bill ion. The remaining RMB 211.7 million will be held as demand deposits. There are no restrictions in the form ofcollat er al, pledges, and other usage right restrictions.
Issuesthatoccurred inthe us e and
Amount and
discl os ure of
proceeds
N/A
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
(3) Changed projects
√ Applicable □ Not applicable
Unit: millions RMB
Project After
Change
OriginalCommitted
Project
Total
Invest inProjects
UsingProceeds
AfterChange
ActualAmountInvested
| Amount to | During the |
Reporting
Period
InvestmentAm ount Asof the End
| of |
the Period
(2)
ProgressAs of the
| End of the Period (3) |
= (2)/(1)
ProjectReaches
| Scheduled Availability |
Status
Benefits
During
the
| Reporting |
Period
of Expected
Benefits
Significant
| Achievement |
Changesto ProjectFeasibility
Aviationmaterialpurchase andflight supportproject- Aircraft
purchaseandmodification
| Aviation material |
purchase andflight supportproject- Aviation
materialpurchase- Recruitment
of pilots
837.69
213.48
777.02
92.76%
December31, 2018
Note: 3
N/A
No
Informationserviceplatformconstructionand next-generationlogistics ITresearch anddevelopmentprojects
Cold storagevehicles andtemperaturecontrolequipmentpurchase
Distribution hubconstructionprojects
3,448.57
1,075.47
| 2,637.59 |
76.48%
December31, 2018
Note: 5
N/A
No
Distributionhubconstructionproject – Hefeismart sortingbase project
Distribution hubconstructionprojects
429.09
71.80
242.67
56.56%
| January 31, |
2019
Note: 6
N/A
No
Total -- 4,715.35
1,360.75
| 3,657.28 |
-- -- -- -- --
Reasons for change, decision-makingprocedures and information disclosure (byproject)
The company changed some of the raised capital invest ment projects a
market conditions.
| After deliberation at the eighth meeting of the fourth session of the Board of Directors of the company, the Third Extraordinary Shareholders' General Meeting in 2017 passed the Proposal on Changing Some Raised Fund Investment |
Project s, in which the co mpan
invested in "aircraft purchase and
| modification", under the premise that the total amount of invested funds raised is not changed. Under the premise that the total amount of investment in "cold storage vehicle and temperature control equipment |
purchase project" and "distribution hub constr
service platform construction and next-generation lo
| gistics IT research and development project" of the original raised fund investment project. For details, refer |
to the disclosure of the company's announcement (Announcement No. 2017-
2017-052, and 2017-059) on Securities Times, Shanghai Securities New
| s, China |
Securities Journal, and http://www.cninfo.com.cn on August 26, 2017.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Project After
Change
OriginalCommitted
Project
Total
Invest inProjects
UsingProceeds
AfterChange
ActualAmountInvested
| Amount to | During the |
Reporting
Period
InvestmentAm ount Asof the End
| of |
the Period
(2)
ProgressAs of the
| End of the Period (3) |
= (2)/(1)
ProjectReaches
| Scheduled Availability |
Status
Benefits
During
the
| Reporting |
Period
of Expected
Benefits
Significant
| Achievement |
Changesto ProjectFeasibility
Circumstan ces and rationale why the plannedprogres s or expected benefit has not beenreached ( by project)
There are no disclosed investment projects that have not reached the schedule.Descript ion of major changes in project
feasibility after changes
N/A
（
）Fundraising projects
Overview of fundraising projects Disclosure date Disclosure method
Aug us t 24, 2018
| “First H alf 2018 Special Report on the Deposit Status and Actual Use of Funds Raised” | http://www.cninfo.com.cn |
Note 1: "Total Proceeds Used" includes the total amount of invested proceeds after the raised funds have beenreceived and the actual amount of prior investment that has been replaced by RMB 2.6 billion.
Note 2: "Total Amount of Proceeds with Use Changed" is the amount of change from the proposedinvestment.Note 3: With the rapid development of the company's business, in combination with the company'sfuture strategic plan, the original aircraft capacity can no longer meet the needs of business development. Thisproject aims to improve the company's air transport efficiency and market competitiveness. Therefore, the benefitscannot be quantified directly.
Note 4: This pro ject aims to improve cold chain transportation speed and quality, providing customers with high-level temperature control services. Therefore, the benefits cannot be quantified directly.Note 5: This project aims to place the company at the forefront of next-genera tion logistics informatizationtechnology to enhance smart logistics capabilities, support the development of integrated logistics services in thefuture, promote information digitization, networking, and marketization, and support new business innovation andincubation. Theref ore, the benefits cannot be quantified directly.Note 6: This project aims to further strengthen the company's courier backbone network processing capabilitiesand improve network-wide operations efficiency. Therefore, the benefits cannot be quantified directly.
8. Major projects not involving fundraising
□ Applicable √ Not applicable
There were not major projects not involving fundraising during the reporting period.
VI. Sale of Major Assets and Equity
1. Sale of major assets
□ Applicable √ Not applicable
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
The company did not sell any major assets during the reporting period.2. Sale of major equity
□ Applicable √ Not applicable
VII. Analysis of Major Holdings and Participating Companies
√ Applicable □ Not applicable
Major subsidiaries and equity participation companies that affect the company's net profit by more than 10%
Unit: RMB
Company
name
Company
Type
Primary Business
Registered
Capital
T otal Assets Net Assets
Operating
Income
Operating
Profit
Net ProfitShenzhen
Holdings(Group)Co., Ltd.
Subsidiary
| S.F. Taisen |
Inv e st m ents inindustrial businesses,
asset management,capital management,
investmentmanagement, etc
2 billion
RMB
28,439,368,269.20 19,011,998,224.19 0.00 158,283,234.57 169,283,234.57
Co., Ltd.
Subsidiary
| SF Express |
International freightforwarding, domestic
and internationalexpress delivery
services, etc.
150 million
RMB
12,391,240,643.00 4,219,226,205.57 5,427,405,990.84
470,374,138.33 335,100,175.31
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Company Name
Acquisition or Disposal of
Subsidiaries During the
| Report ing Period |
Impact on Overall ProductionOperations and Performance
Zhejiang Fengchi Network Technology Co., Ltd. New venture No major impactFoshan Fengyutai Industrial Park Operation Management Co., Ltd. New venture No major impactSF Holding Investment Limited New venture No major impactJOLLY UNION LIMITED New venture No major impactSF Technology (Beijing) Co., Ltd. New venture No major impactEzhou Shunlu Logistics Co., Ltd. New venture No major impactEzhou Fengtai Qisheng Logistics Development Co., Ltd. New venture No major impactEzhou Fengyutai Helin Logistics Development Co., Ltd. New venture No major impactShenzhen SF Runtai Management Consulting Co., Ltd. New venture No major impactNanchang Fengtai Industrial Park Management Co., Ltd. New venture No major impactZhongtian Cai (Shenzhen) Technology Co., Ltd. New venture No major impactXuzhou Fengtai Industrial Park Management Co., Ltd. New venture No major impactGuangzhou S.F. Information Services Co., Ltd. New venture No major impactTianjin SF Import and Export Trading Co., Ltd. New venture No major impact
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Company Name
Subsidiaries During the
| Report ing Period |
Impact on Overall ProductionOperations and Performance
Ma’anshan Fengyutai Enterprise Management Co., Ltd. New venture No major impactJinji ang Jietai Enterprise Management Co., Ltd. New venture No major impactSF Pharmaceutical Supply Chain Hubei Co., Ltd. New venture No major impactWulian Yuncang (Chengdu) Technology Co., Ltd. New venture No major impactShunyuan Leasing (Tianjin) Co., Ltd. New venture No major impactShanxi Fengnong Technology Co., Ltd. New venture No major impactEqual Wind limited New venture No major impactJoy ous Adv antage Limited New venture No major impactSup er ior Hawk L imited New venture No major impactTop Haze Limited New venture No major impactCrystal Era Limited New venture No major impactBright Hazel Limited New venture No major impactCastle Way Corporation Ltd New venture No major impactWorld Brave Ltd New venture No major impactShunf e ng Mult imodal Transport Co., Ltd. New venture No major impactXiamen Fengyutai Industrial Park Management Co., Ltd. New venture No major impactFame Trend Internation al Ltd New venture No major impactLhasa Fengtai Industrial Park Management Co., Ltd. New venture No major impactGanzhou Fengtai Industrial Park Management Co., Ltd. New venture No major impactSF Express Ltd. New venture No major impactSF Fengle Property Co., Ltd. Acquisition No major impactFengtu Technology (Shenzhen) Co., Ltd. New venture No major impactChengdu Yifeng Home Technology Service Co., Ltd. New venture No major impactFonair Aviation Technology Co., Ltd. Acquisition No major impactGuangdong Shunxin Express Co., Ltd. New venture No major impactGuangdong Shunxin Jieda Express Co., Ltd. New venture No major impactBeijing Shunxin Jieda Supply Chain Co., Ltd. New venture No major impactShanghai Shunzhu Xinhe Express Co., Ltd. New venture No major impactDongguan Shunjiaxin Express Co., Ltd. New venture No major impactShenzhen Shunxin Jieda Express Co., Ltd. New venture No major impactSuzhou S h unhexin Express Co., Ltd. New venture No major impactExaleap S F Limit ed New venture No major impact
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
VIII. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
IX. Performance forecast for the first nine months of 2018
The forecasted net profit attributable to shareholders of the parent company for the first nine months of 2018 ispositive and does not belong to the situation of turning losses into profits.
shareholders of the parent companyfor the first nine months of 2018 ascompared with the same period of
| 2017 |
-18.25%
至-2.62%
The range of net profit attributableto shareholders of the parentcompany for the first nine monthsof 2018 (ten thousand RMB)
298,000.00
至355,000.00
Net profit attributable toshareholders of the parent companyfor the first nine months of 2017(ten thousand RMB)
364,538.94
Reasons for changes in performance
| The net profit attributable to shareholders of the parent company for the |
first nine months of 2017 included one-off gains from the disposal of long-term equity investments. For comparability, the company forecasts the netprofit after deducting non-recurring profit or loss attributable to
shareholders of the parent company（“net profit after deducting non-recurring profit or loss”）as follows:
? Changes in net profit after deducting non-recurring profit or loss for the
first nine months of 2018： 3.70% - 25.00%
? The range of net profit after deducting non-
first nine months of 2018 (ten thousand RMB)：275,000.00 - 331,500.00
? Net profit after deducting non-recurring profit or loss for the first nine
months of 2017 (ten thousand RMB)： 265,194.98
The company's net profit after deducting non-recurring profit or loss
X. Possible risks and countermeasures
1. Market risksRisk of macroeconomic fluctuations: The logistics industry plays an important role in the development of thenational economy. At the same time, it is also affected by macroeconomic conditions. In recent years, there hasbeen sluggish macroeconomic growth in China as it underwent transitions with its economic structure, and itsfuture development will also be complicated. Such macroeconomic fluctuations will have considerable impact onthe overall development of China's logistics industry and the performance of SF Holding.
Market competition risks: Competition in China's express logistics industry has become increasingly fierce. Onthe one hand, industry-leading express logistics enterprises continue to strive to expand their businesses andnetworks. On the other hand, E-commerce platform enterprises, social capital, and other external forces arecreeping into the express logistics industry, further exacerbating market competition. If the company cannot takeactive and effective measures to cope with the ever-changing market competition, it may face the risk of slowing
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
business growth and declining market share.Risks arising from changes in new business patterns: In recent years, with the rapid development of
information technology, the impact of the Internet economy on all aspects of life has become increasinglyobvious. In the express delivery industry, information platform-type enterprises have emerged. Through fast andeffective management and matching of information between supply and demand, this kind of enterprise can gatherand utilize social capital quickly to deliver appropriate services for the customer and impacting the traditionalbusiness model within the express industry.
Risk response: In the face of complex and volatile potential market risks, the company has established acomprehensive risk management system, closely monitors and analyzes macroeconomic trends, industry trends,and market competition trends. From these analyses, SF Holding plans and adjusts its strategic direction andbusiness planning in a forward-looking manner so as to minimize the impact of changes in the external marketenvironment on the company's business and future development.
2. Policy risksRisks arise from changes in industry reg ulations and industrial policies: The express delivery service requiresoperations licenses and is subject to the regulations under administrative bureaus, and industry standards such asthe P ostal Law, Ad ministrative Measures for the Express Delivery Business License, Express Delivery MarketManagement Policy, E xpress Delivery Service Industry Standard, and Express Delivery Operation Guidelines. Inorder to support the development of the express delivery industry, various levels of authorities have successivelylaunched a number of industrial support and encouragement policies. However, should major changes oradjustments in relevant laws, regulations, or industrial policies occur in the future, they may impact thedevelopment of the express delivery industry and market competition, which in turn may affect the future businessgrowth and performance of the company.
Risks from national environmental protection, energy reduction, and emission reduction policies: Varioustypes and models of motor vehicles are important transportation tools of the express company. As China'senvironmental protection, energy reduction, and emissions reduction-related policies are increasingly intensified,our industry’s related expenses will increase, which will subsequently affect the company's future performance.
Risk response: The company has established national and local policy research teams in each business unit toconduct in-depth analysis on relevant policies to predict f uture policy directions and trends in a scientific mannerand in relation to overall changes in the external environment. Forward-looking plans are implemented andadjusted by fully capitalizing on advantageous policies while avoiding policy risks, hence promoting businessgrowth.
3. Business risksRisk of rising costs: The tradition al express delivery indu stry is a labor-intensive industry. There are large labor
needs along many operational stages such as pickup, sorting, transportation, and delivery. With the decreasing rateof population growth in China, there is a certain upward pressure on labor costs. At the same time, investments inlogistics infrastructure are also increasing. If the company cannot obtain enough business volume in the future orif it cannot control costs effectively, it will face challenges in its future growth. Risk response: SF Holding hascontinued to increase investment in areas such as logistics framework optimization and system component
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
innovation, including in areas such as bringing the entire logistics process online, applying smart technology,reducing manpower and offline operations, upgrading service point and route planning, and using scientific andtechnological means to enhance efficiency, reduce labor costs, and lead the transformation of the express deliveryindustry from labor-intensive to technology-intensive.Risks from fuel p rice fluctuation: Transportation cost is one of the major costs of the express delivery industry,and fuel cost is a part of transportation costs. Fluctuations in fuel prices will have a certain impact on theprofitability of express delivery companies. If the fuel price rises significantly in the future, the company willexperience more pressure from costs. Generally, tax-free fuel costs accounted for only 2.38% of revenue in thefirst half of 2018, and therefore the impact of fuel price fluctuations on operating costs is relatively limited. It isestimated that fuel prices fluctuate by +/- 5%, then cost of revenue may increase or decrease by RMB 102 millionfor the current year, which will either increase or decrease net profit attributable to the parent company by amaximum of RMB 76 million. Risk response: The company will further improve service points layouts, improvethe science behind its route planning, improve loading rates along its operationg routes, and reduce the risk of fuelprice fluctuations by increasing resource use efficiency and promoting the use of new energy vehicles. At thesame time, the company has a mature operations and cost monitoring mechanism. When costs fluctuatessignificantly, it will dynamically adjust the operations plan and fuel cost control measures to reduce the negativeimpact caused by fuel cost fluctuations on the company.
4. Exchange rate fluctuations risk
The company currently offers express delivery services in the U.S., Japan, Korea, and Singapore andprovides B2C and E-commerce delivery services in many countries and regions. In the future, as SF Holding’sinternational business grows, the proportion of business denominated in foreign currencies will gradually increase.Given the uncertainties in the international financial environment and fluctuations in the RMB exchange rate, thecompany’s foreign currency assets and liabilities, as well as future foreign currency transactions, will be at riskand may impact the company's reporting and continued profitability.
Risk response: The company's foreign exchange transactions are mainly based on cross-border business needs. Inorder to avoid and prevent exchange rate and interest rate fluctuation risks and better manage the company'sforeign currency positions, the company has established the “Management System for Business Hedging” in orderto enable centralized management of foreign currency and to achieve natural hedging. In order to avoid exchangerate or interest rate risk, the company monitors exchange rate and interest rate fluctuations in real time and selectsthe hedging products that will control risk at low risk of default and lock in exchange rate and interest rate costs.At the same time, the company will strengthen its exchange rate and interest rate research and analysis capabilitiesso that it can be alerted to changes in the international market in real time and take countermeasures on earlywarning signals. The company only conducts foreign exchange hedging business with strong and largecommercial banks who rely on continued business, do not trade for speculation, and operate in strict accordancewithin authorized operations to ensure effective implementation of its strategies and to reduce the impact ofexchange rate risk on its operations and bottom line.
5. Information systems risk
In order to cope with the diversified development of our company's business, the complex and diverse needsof customers, and the strategic direction of technology that leads the business to expand its market position, ourcompany has built and applied many information systems and technologies. The rapid development and changesin the market make the construction of the company's core business systems also face the challenges of rapid
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
changes in technology and services.
With a wide variety and latest professional technologies in our company, changes of information technologyor future business needs may cause information system risks. Although a series of information security controlshave been established on a large amount of data in our company. There are still some information security riskscaused by human or system.Risk Responses: Our company has developed a comprehensive information system risk response system. On onehand, we have established information system risk prevention and detection control system, formulated normativeprocesses such as “IT System Major Event Management Process System”, “IT System Emergency PlanFormulation and Implementation Management Guidelines”, and strengthened personnel awareness and effectiveoperation. We implemented closed-loop risk prevention and detection control in terms of pre-warning, in-processcontrol, and post-recording. On the other hand, our company continues to carry out ISO27001 annual certificationand national information system security level protection evaluation, and conducts high-standard and stableinformation security self-examination and optimization. By strengthening the prevention and detection control ofinformation security risks in customer service products and business system research and development, we areworking on improving the management and control measures for IT infrastructure, security protection and internalinformation circulation, to build a healthier business system, more standardized and safer business processes. Weimplement laws and regulations such as the Cyber Security Law and GDPR as well as actively cooperate with theNational Development and Reform Commission, the State General Administration of Posts, and all the publicsecurity departments to combat black production, speculation, etc. Additionally, we regularly hold securitysummits and security salons to facilitate information sharing with industry leaders and industry elites, with theaim to build a safe and orderly Cyberspace.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 5 Significant Events
I. Ann ual genera l meetin g of shareho lders a nd extrao rdin ary gen eral meeting of s hareh old ersheld during the period
1. Shareholder meetings held during the reporting period
Meeting
Meeting
Type
Participation
| % |
DateConvened
Disclosure
Date
Disclosure Method
ExtraordinaryGeneralMeeting ofShareholders
| of 2018 |
ExtraordinaryGeneralMeeting
85.78%
January 12,
2018
January 13,
2018
“Resolutions of the First ExtroardinaryGeneral Meeting of 2018”(2018-002)
（http://www.cninfo.com.cn）
2017 AnnualGeneralMeeting
AnnualGeneralMeeting
91.56%
April 3,
2018
April 4,
2018
Resolutions” （2018-030）（http://www.cninfo.com.cn）
| “2017 Annual General Meeting | ||
| Second |
ExtraordinaryGeneralMeeting ofShareholders
ExtraordinaryGeneralMeeting
85.52%
| of 2018 |
May 17,
2018
May 18,
2017
General Meeting of 2018”（2018-045）（http://www.cninfo.com.cn）
2. Extraordinary general meetings convened at the request of preferred stockholders whose voting rightshave been restored
□ Applicable √ Not applicable
II. Profit distribution or increase of share capital from capital reserves dur ing the reportingperiod
□ Applicable √ Not applicable
The company does not plan to issue cash or stock dividends, nor to convert capital reserves into share capital.
III. C ommitments made by the Compa ny's actual controllers, shareh olders, related parties,purchasers, and others that were fulfilled during the reporting period or were not fulfilledand exceed the time limit as of the end of the reporting period
□ Applicable√ Not applicable
There were no such situations during the reporting period.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
IV. Appointment and dismissal of accounting firms
Is the semi-annual financial report audited?
□ Yes √ No
The company’s semi-annual financial report has not been audited
V. Explanation provided by the Board of Directors and the Supervisory Committee regardingthe "non-standard auditor's report" issued by the auditor during the reporting period
□ Applicable √ Not applicable
VI. Explanation provided by the Board of Directors regarding matters relevant to the “non-standard auditor’s report”
□ Applicable √ Not applicable
VII. Bankruptcy and Reorganization
□ Applicable √ Not applicable
The company did not experience any bankruptcy or reorganization during the reported period.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
VIII. Legal Proceedings
Significant lawsuits or arbitration
√ Applicable □ Not applicable
Situation overview of lawsuit
(arbitration)
Lawsuitamount(RMBmillions)
Provisions
P rogress of
lawsuit(arbitration)
Results and
effects of
lawsuit(arbitration)
Execution
status of
lawsuit(arbitration)
| judgment of | Disclosure |
date
Disclos ure index
According to Shenzhen GlorintFactoring Co., Ltd. (the plaintiff inthis case, hereinafter referred to as
| "Shenzhen Glorint"), the "Indictment": |
On October 11, 2014, ShenzhenGlorint and Hubei Xingyu GarmentCo., Ltd. (hereinafter referred to as"Hubei Xingyu") signed the "SDICFactoring Business Contract," whichstipulated that Shenzhen Glorint willprovide factoring financing to HubeiXingyu, and Hubei Xingyu shall alsocarry out a premium repurchase ontime according to the terms of the
Group Co., Ltd. (defendant II in thiscase), Zen g Shixiang (defendant III inthis case) , Zeng Cheng (defendant IV
| in this case), and Jiang Bin (defendant |
V in this case) shall provideguarant ees fo r this contract.
In May 2014 and January 2015, S.F.Express Co., Lt
case, herei naf ter referred to as "S.F.
| Express"), Shenzhen SF Supply Chain |
Co., Ltd. (defendant VII in this case,hereinaft er referred to as "SF SupplyChain") signed an apparel purchasecontract with Hubei Xingyurespectively . The total amount of thecontract was RMB 18,099,519.On January 30, 2015, Hubei Xingyuand Shenzhen Glorint signed theSupplemen tary Agreement (I) of theSDIC Factoring Business Contract,which stipulated that Hubei Xingyushall transfer a total of RMB
on the accounts receivable in theabove-m entioned apparel purchasecontract with S.F. Express and SFSupply Chain. In view of the fact thatHubei Xingyu did not fulfill thepremium repurchase of factoringfinancing in accordance with thestipulated SDIC Factoring BusinessContract, S.F. Express and SF SupplyChain did not pay RMB 18,099,519for Shenzhen Glorint. On September1, 2015, Shenzhen Glorint filed alawsuit with the Futian District
| Peop le' s C ourt and requested a decree: |
18.6 No No
during thereporting
period
This case is
a disp ut e
| development | arising from |
the paymentof cont r actpayment.The subject
lawsuit is
theCompany's
accountspayable for
the
| performance |
of the
the amount
of thesubjectmatter issmall. Theresults ofthese caseswill not bemateriallyadverse to
theCompany's
financialstatus andcontinuingoperations.
N/A
| contract, and | December |
13, 2016
Main AssetsRep
Issuan ce of
Shares t oPurchase Assets
and Raise
| Matching Funds |
and Related-
partyTransaction
Draft) athttp://www.cninf
o.com.cn
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Situation overview of lawsuit
(arbitration)
Lawsuitamount(RMBmillions)
Provisions
P rogress of
lawsuit(arbitration)
Results and
effects of
lawsuit(arbitration)
Execution
status of
lawsuit(arbitration)
| judgment of | Disclosure |
date
Disclos ure index
| (1) S.F. Express and SF Supply Chain |
should pay 18,099,519 RMB toShenzhe n Glorint. (2) Hubei Xingyu,Fucheng Investment Holding GroupCo., Ltd., and Zeng Shixiang, ZengCheng, Jiang Bin, S.F. Express, andSF Supply Chain will be jointly andseverally liable for the aforementionedpayment. (3) The defendants in thiscase should bear the legal fees,litigation fees, and all other litigationfees in t his case.
On July 19, 2016, Shenzhen Glorintapplied to the Futian District People'sCourt to withdraw the lawsuit againstthe defendants Zeng Shixiang, ZengCheng, and Jiang Bin. On April 20,2017, Futian District People's Courtruled that the case was transferred tothe jurisdiction of the Yuting DistrictPeop le' s C ourt, Yichang City, wherethe Hubei Xingyu Bankruptcy casewas filed. Shenzhen Glorint rejectedthe first-instance ruling and appealedto Shenzhen Intermediate People'sCourt.
On July 10, 2017, ShenzhenIntermedi ate People's Court ruled torevoke the decision of the FutianDistrict People's Court and the casewas under the jurisdiction of theFutian District People's Court.
On October 23, 2017, the FutuanDistrict People’s court held its second
of Hubei Xingyu, Yichang XinliBankruptcy and Liquidation OfficeCo., Ltd. engaged lawyers toparticipate in the trial. As of the dateof this report, the first trial had not yetbeen decided.
As of June 30, 2018, in addition to the above legal case, other legal proceedings of the listed Company and itssubsidiaries were as follows:
1. The total amount involved in legal cases resolved during the reporting period was RMB 78.8 million, and theactual documented, effective amount was RMB 18.0 million.2. Cases not yet resolved during the reporting period include: Cases involving the listed Company and itssubsidiaries as defendants amounted to RMB 109.4 million, accounting for 0.33% of audited net assetsattributable to shareholders of the listed Company at the end of 2017. Cases involving the listed Company and itssubsidia ries a s pla intiffs amounted to RMB 57.6 million, accounting for 0.18% of audited net assets attributable to
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
shareholders of the listed Company at the end of 2017. The above litigation matters are mainly independent andindividual cases involving minor traffic accidents and transportation claims. The listed Company and itssubsidiaries hold commercial insurance policies for its vehicles, transportation, and other business activities.Based on prior experience, the purchased insurance policies are able to cover any losses brought by lawsuits. Thedescribed legal proceedings will not have a material adverse effect on the Company's financial status and ability tocontinue operations.
IX. Questioning by the Media
□ Applicable √ Not applicable
The company did not experience widespread media questioning during the reporting period.
X. Penalties and redress
□ Applicable √ Not applicable
There were no such situations during the reporting period.
XI. Honesty of the Company, its controlling shareholders, and actual controller
□ Applicable √ Not applicable
XII. Execution of stock incentive plan, ESOP, or other employee incentives
√ Applicable □ Not applicable
During the reporting period, the company completed registration for its 2017 restricted stock incentive plan,which granted 2,556,661 restricted shares to 777 employees. The restricted shares were listed on January 11,2018. In addition, because 9 employees who had fulfilled the 2017 restricted stock incentive plan resigned, theyno longer fulfilled the conditions of the plan. The company’s fourteenth meeting of the fourth Board of Directorsand second general shareholder’s meeting of 2018 approved the “Proposal on Repurchase and Cancellation ofCertain Restricted Stocks,” and a total of 36,909 restricted shares that had been granted to the resignees but notyet released for resale were repurchased and cancelled at a repurchase price of RMB 29.224 per share. The sharerepurchases are currently ongoing.
In order to further improve the company’s corporate governance, incentive mechanism, ability to attract andretain top talent, and effectively motivate core talent, the company continued its restricted stock incentive plan andstock appreciation rights plan for 2018 during the reporting period. During the first grant of the 2018 restrictedstock incentive plan, 1139 employees were granted 5,231,982 shares at a price of RMB 24.33 per share. Theshares were granted on June 13, 2018, and the shares were listed on July 9, 2018. The 2018 stock appreciation
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
rights plan was awarded to 29 employees. 138,650 rights were granded at an exercise price of RMB 24.33 pershare on June 13, 2018.
Details of the company’s stock incentive plan during the reporting period are disclosed atwww.cninfo.com.cn. A disclosure index is as follows:
Announcement Disclosure Date Disclosure Website
of the 2017 Restricted Stock Incentive Plan (2018-
| 001) |
January 9, 2018 http://www.cninfo.com.cn
-036) April 27, 2018 http://www.cninfo.com.cn
| Resolutions of the Fourteenth Meeting of the Fourth Board of Directors (2018 |
| Resolutions of the Twelfth Meeting |
of the Fourth Board of Supervisors (2018-037) April 27, 2018 http://www.cninfo.com.cn
April 27, 2017 http://www.cninfo.com.cn
| 2018 R es tricted Stock Incentive Plan (Draft) |
| 2018 Share Appreciation Rights Plan (Draft) |
April 27, 2018 http://www.cninfo.com.cn
April 27, 2018 http://www.cninfo.com.cn
| 2018 Stock Incentive Plan Implementation, Assessment, and Management |
| List of 20 18 Restricted Stock Incentive Grantees |
April 27, 2018 http://www.cninfo.com.cn
April 27, 2018 http://www.cninfo.com.cn
| List of 2018 Share Appreciation Rights Grantees |
| Announcement of Restricted Stock Cancellation and Repurchase (2018 |
-039) April 27, 2018 http://www.cninfo.com.cn
e Plan (2018-044)
May 12, 2018 http://www.cninfo.com.cn
| Public Commentary and Opinion of the Board of Supervisors on the List of Grantees of the 2018 Stock Incentiv |
| Resolutions of the Second Extroardinary General Meeting of Shareholders of 2018 (2018 |
-045)
May 18, 2018 http://www.cninfo.com.cn
Stock (2018-
| 047) |
May 18, 2018 http://www.cninfo.com.cn
-052) June 14, 2018 http://www.cninfo.com.cn
| Resolutions of the Fifteenth Meeting of the Fourth Board of Directors (2018 |
| Resolutions of the Thirteenth Meeting of the Fourth Board of Supervisors (2018 |
-
June 14, 2018 http://www.cninfo.com.cn
053)Matters Related to the Adjustment of the 2018 Restricted Stock Incentive Plan
(2018
-054)
June 14, 2018 http://www.cninfo.com.cn
| Matters Related to the Adjustment of the 2018 Restricted Stock Incentive Plan (2018 |
| List of 2018 Restricted Stock Incentive Grantees (After Adjustment) |
June 14, 2018 http://www.cninfo.com.cn
-055)
June 14, 2018 http://www.cninfo.com.cn
| First Grant of the 2018 Restricted Stock Incentive Plan and Stock Appreciation Right s Plan ( 20 18 |
| Completion of the Registration of the First Grant of the 2018 Restricted Stock Incentive |
Plan (2018-058)
July 6, 2018 http://www.cninfo.com.cn
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
XIII. Significant related-party transactions
1. Related-party transactions relevant to routine operations
√ Applicable □ Not applicable
Related
Party
Relationship
Type ofrelated-
transaction
Details ofrelated-party
transaction
| party | Pricing |
principle ofthe related-
party
| transaction | Transaction |
price
amount(millions
RMB)
Propor tion of
samecategogr y oftransactions
| Transaction | Approved |
transaction
quota(millions
Was theapproved
quotaexceede?
| RMB) | Related- |
partytransactionsettlement
Similarmarket
price
| method | Disclosure |
date
Disclosure
index
Mingde
itssubsidiaries
Controllingshareholder ofthe Company
Provideservices t orelatedparties.
| Holding and | courier |
service,combinedtransportand freightforwardingservices,Technology
service,platform
| services |
Fair pricingbased onmarket pri cesin accordancewith theprinciple ofindependenttransactions
Contractprice
123.55
0.29%
290.00
No
Settlement
| based on the |
settlementperiod andterms in thecontract
N/A
March 14,2018
Announcement on the" Proposa l onEstimated DailyRelated-partyT rans action Am ountin 2018" disclosed atCNINFO(http://www.cninfo.co
No. 2018-020)China
PacificInsurance
| m.cn) (Announcement | ||
| (Group) Co., |
Ltd. and itssubsidiaries
direc t or of thecompany servesas anindependentdirec t or ofChina PacificInsurance(Group) Co.,
| Ltd. |
Provideservices t orelatedparties.
courierservice,combinedtransportand freightforwardingservices
Fair pricingbased onmarket pri cesin accordancewith theprinciple ofindependenttransactions
Contractprice
9.15
0.02%
20.00
No
Settlement
| based on the |
settlementperiod andterms in thecontract
N/A
March 14,2018
" Proposa l onEstimated DailyRelated-partyT rans action Am ountin 2018" disclosed atCNINFO(http://www.cninfo.co
| m.cn) (Announcement No. 2018-020) |
Ping A nInsurance(Group)
China, Ltd.and itssubsidiaries
| Company of | An independent |
directors of thecompany servesas anindependentdirec t or of Pi ngAn Insurance(Group)Company of
Provideservices t orelatedparties.
courierservice,combinedtransportand freightforwardingservices
Fair pricingbased onmarket pri cesin accordancewith theprinciple ofindependenttransactions
Contractprice
39.00
| China, Ltd. |
0.09%
90.00
No
Settlement
settlementperiod andterms in thecontract
N/A
March 14,2018
| based on the | Announcement on the |
" Proposa l onEstimated DailyRelated-partyTransaction Am ountin 2018" disclosed atCNINFO(http://www.cninfo.co
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Related
Party
Relationship
Type ofrelated-
transaction
Details ofrelated-party
transaction
| party | Pricing |
principle ofthe related-
party
| transaction | Transaction |
price
amount(millions
RMB)
Propor tion of
samecategogr y oftransactions
| Transaction | Approved |
transaction
quota(millions
Was theapproved
quotaexceede?
| RMB) | Related- |
partytransactionsettlement
Similarmarket
price
| method | Disclosure |
date
Disclosure
index
McDonald's(China) Co.,Ltd.and itssubsidiaries
direc t or of thecompany servesas anindependentdirec t or of theparent companyof McDonald's(China) Co.,
| Ltd. |
Provideservices t orelatedparties.
courierservice,combinedtransportand freightforwardingservices
Fair pricingbased onmarket pri cesin accordancewith theprinciple ofindependenttransactions
Contractprice
102.48
0.24%
160.00
No
Settlement
settlementperiod andterms in thecontract
N/A
March 14,2018
| based on the | Announcement on the |
" Proposa l onEstimated DailyRelated-partyT rans action Am ountin 2018" disclosed atCNINFO(http://www.cninfo.co
Mingde
| m.cn) (Announcement No. 2018-020) | ||
| Holding and |
itssubsidiaries
Controllingshareholder ofthe Company
Receiveservicesfrom relatedparties.
Expressdeliveryagentservice fees
Fair pricingbased onmarket pri cesin accordancewith theprinciple ofindependenttransactions
Contractprice
0.03%
| 11.88 |
30.00
No
Settlement
| based on the |
settlementperiod andterms in thecontract
N/A
March 14,2018
" Proposa l onEstimated DailyRelated-partyT rans action Am ountin 2018" disclosed atCNINFO(http://www.cninfo.com.
| cn) (Announcement No. 2018-020) |
ChinaPacificInsurance
Ltd.
| (Group) Co., | An independent |
direc t or of thecompany servesas anindependentdirec t or ofChina PacificInsurance(Group) Co.,
Receiveservicesfrom relatedparties.
| Ltd. |
Insurancepremium
Fair pricingbased onmarket pri cesin accordancewith theprinciple ofindependenttransactions
Contractprice
50.96
0.15%
130.00
No
Settlement
| based on the |
settlementperiod andterms in thecontract
N/A
March 14,2018
" Proposa l onEstimated DailyRelated-partyT rans action Am ountin 2018" disclosed atCNINFO(http://www.cninfo.co
| m.cn) (Announcement No. 2018-020) |
Total --
--
337.02
--
720.00 --
--
--
--
--
Details of l arge a mount of sales returns N/AActual performance in the reporting period versus predicted total amount of routine
related-party transactions, by types (if any)
The Company's thirteenth meeting of the fourth Board of Directors on March 12,2018 and 2017 Annual
Shareholders' General Meeting on April 3,2018 reviewed and approved the "Proposal on Estimated Daily Related-party Transaction Amount in 2018," and the amount of the aforementioned related-party transactions did not
| exceed the approved amount. |
Reason fo r s ig nificant difference between the transaction price and the market price N/A
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
2. Related-party transactions relevant to purchases and sales of assets
□ Applicable √ Not applicable
The company did not conduct related-party transactions for asset or equity acuisitions or sales during the reportingperiod.
3. Related-party transactions for joint investments
□ Applicable √ Not applicable
During the reporting period, the relevant details were disclosed immediately. For details, see “5. Other significantrelated-party transactions” of this section.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Were there any contracts related to non-operating credits and liabilities with related parties?
□ Yes √ No
No such cases in the reporting period.5. Other significant related-party transactions
√ Applicable □ Not applicable
On January 22, 2018, the company held its twelfth meeting of the fourth Board of Directors and the tenth meetingof the fourth Board of Supervisors, at which the “Proposal to Increase Capital in Shenzhen Fengchao TechnologyCo, Ltd.” was reviewed and approved. According to the proposal, SF Technology, a subsidiary of SF holding,increased its investment in Fengchao Technology, an associate of SF Technology, using cash of RMB 288.58million for a resulting equity stake of 14.4292%.
According to the provisions of the “Stock Listing Rules,” because Mr. Wei Wang, the Chairman of the Company,has served as Fengchao Technology’s Chairman, and Vice Chairman Mr. Zheying Lin, has served as FengchaoTechnology’s Director within the past 12 months, Fengchao Technology is a related party of the Company. Theinvestors of this transaction, Mingde Holdings and Shenzhen Haorong Enterprise Development Co., Ltd., are thecontrolling shareholders of the Company and its wholly-owned subsidiary. Therefore, they areconsidered relatedparties as stipulated under the “Sotck Listing Rules.” The transaction is thus a joint investment with a related partyand constitutes a related-party transaction.
Major related-party transactions were disclosed immediately on the Internet
Announcement Disclosure Date Disclosure WebsiteResolutions of the Twelve Meeting of the Fourth Board of Directors (2018-006) January 23, 2018 http://www.cninfo.com.cnResolutions of the Tenth Meeting of the Fourth Board of Supervisors (2018-007) January 23, 2018 http://www.cninfo.com.cnCapital Increase and Tran s actions with Related Parties (2018-008) January 23, 2018 http://www.cninfo.com.cn
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
XIV. Significant contracts and their execution1. Trusteeships, Contracts, and Leases(1) Trusteeships
□ Applicable √ Not applicable
No such cases in the reporting period.(2) Contracts
□ Applicable √ Not applicable
No such cases in the reporting period.(3) Leases
□ Applicable √ Not applicable
No such cases in the reporting period.2. Significant guarantees
√ Applicable □ Not applicable
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
(1) Guarantees provided by the Company
Unit: RMB 10 thousands
The listed Company's guarantees to subsidiariesGuarantee party
of relevant
| announcement | Amount of |
guaranteed
Actual date of
occurrence
| Quota | Actual |
guarantee
Type ofguarantee
| amount |
Period of guarantee Executed?
| Guarantee for a related party? |
- - - - - - - - -Total guarantee approved for subsidiaries during
the reporting period (B1)
331,945
| Total actual amount of |
guarantees forsubsidiaries during the
reporting period（B2）
Total guarantee approved for the subsidiaries at
the end of the reporting period（B3）
331,945
| Total actual guarantee |
balance for subsidiariesat the end of the
reporting period（B4）
Subsidiary's guarantees to subsidiariesGuarantee party
of Quota
| announcement | Amount of |
guaranteed
Actual date of
occurrence
| Quota | Actual |
guarantee
Type ofguarantee
| amount |
Period of guarantee Executed?
| Guarantee for a related party? |
Beijing Shuncheng Logistics
Co., Ltd.
2013/06/25 1,000.00
liability
| guarantee |
2013/06/25-2018/05/21 Yes NoBeijing Shuncheng Logistics
Co., Ltd.
2013/06/25 2,000.00
liability
| guarantee |
2013/08/30-2018/05/21 Yes NoBeijing Shuncheng Logistics
Co., Ltd.
2013/06/25 800.00
liability
| guarantee |
2013/08/30-2019/05/21 No NoBeijing Shuncheng Logistics
Co., Ltd.
2013/06/25 7,200.00
liability
| guarantee |
2014/05/21-2019/05/21 No No
Industry Real EstateManage m ent Co., Ltd.,
| S.F. Express Co., Ltd. |
2013/07/31 400.00
Jointliabilityguarantee
2013/08/21-2018/05/20 Yes No
Industry Real EstateManage m ent Co., Ltd.,
| S.F. Express Co., Ltd. |
2013/07/31 1,204.57
Jointliabilityguarantee
2013/08/21-2023/07/30 No No
Industry Real EstateManage m ent Co., Ltd.,
| S.F. Express Co., Ltd. |
2013/07/31 3,500.00
Jointliabilityguarantee
2013/09/05-2023/07/30 No No
Industry Real EstateManage m ent Co., Ltd.,
| S.F. Express Co., Ltd. |
2013/07/31 2,600.00
Jointliabilityguarantee
2013/10/12-2023/07/30 No No
Industry Real EstateManagement Co., Ltd., S.F.
| Express Co., Ltd. |
2013/07/31 1,500.00
Jointliabilityguarantee
2013/11/25-2023/07/30 No No
Industry Real EstateManage m ent Co., Ltd.,
| S.F. Express Co., Ltd. |
2013/07/31 5,000.00
Jointliabilityguarantee
2014/11/07-2023/07/30 No No
Industry Real EstateManage m ent Co., Ltd.,
| S.F. Express Co., Ltd. |
2013/07/31 5,000.00
Jointliabilityguarantee
2015/02/02-2023/07/30 No No
Industry Real EstateManage m ent Co., Ltd.,
| S.F. Express Co., Ltd. |
2013/07/31 1,000.00
Jointliabilityguarantee
2015/04/30-2023/07/30 No No
Industry Real EstateManage m ent Co., Ltd.,
| S.F. Express Co., Ltd. |
2013/07/31 2,500.00
Jointliabilityguarantee
2016/05/31-2023/07/30 No No
2014/12/12 3,300.00
| Shanghai Fengyutai Industrial Co., Ltd. | Joint liability |
2014/12/12-2018/06/30 Yes No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Shanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 900.00
| guarantee |
| Joint |
liability
2015/01/16-2018/06/30 Yes NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 3,600.00
| guarantee |
| Joint |
liability
2015/01/16-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 5,400.00
| guarantee |
| Joint |
liability
2015/03/27-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 3,800.00
| guarantee |
| Joint |
liability
2015/06/18-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 1,900.00
| guarantee |
| Joint |
liability
2015/07/16-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 800.00
| guarantee |
| Joint |
liability
2015/08/20-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 800.00
| guarantee |
| Joint |
liability
2015/09/17-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 600.00
| guarantee |
| Joint |
liability
2015/10/20-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 700.00
| guarantee |
| Joint |
liability
2015/12/25-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 900.00
| guarantee |
| Joint |
liability
2016/01/22-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 400.00
| guarantee |
| Joint |
liability
2016/01/25-2024/12/11 No NoShanghai Fengyutai Industrial
Co., Ltd.
2014/12/12 4,000.00
| guarantee |
| Joint |
liability
2017/03/02-2024/12/11 No No
Jiangxi S.F. Express Co., Ltd. 2015/09/15 175.00
| guarantee |
| Joint |
liability
2015/09/15-2018/04/20 Yes No
Jiangxi S.F. Express Co., Ltd. 2015/09/15 475.00
| guarantee |
| Joint |
liability
2015/09/15-2025/09/14 No No
Jiangxi S.F. Express Co., Ltd. 2015/09/15 500.00
| guarantee |
| Joint |
liability
2015/11/24-2025/09/14 No No
Jiangxi S.F. Express Co., Ltd. 2015/09/15 500.00
| guarantee |
| Joint |
liability
2015/12/29-2025/09/14 No No
Jiangxi S.F. Express Co., Ltd. 2015/09/15 500.00
| guarantee |
| Joint |
liability
2016/01/22-2025/09/14 No No
Jiangxi S.F. Express Co., Ltd. 2015/09/15 500.00
| guarantee |
| Joint |
liability
2016/04/15-2025/09/14 No No
Jiangxi S.F. Express Co., Ltd. 2015/09/15 500.00
| guarantee |
| Joint |
liability
2016/11/24-2025/09/14 No NoQuanzhou
| guarantee | ||
| Fengyutai Enterprise |
Manage m ent Ltd.
2015/09/24 480.00
liability
| guarantee |
2015/10/22-2018/04/20 Yes No
Manage m ent Ltd.
2015/09/24 650.00
| Quanzhou Fengyutai Enterprise | Joint |
liability
2015/11/23-2025/09/23 No NoQuanzhou Fengyutai
| guarantee | ||
| Enterprise |
Manage m ent Ltd.
2015/09/24 500.00
liability
| guarantee |
2015/12/22-2025/09/23 No No
Manage m ent Ltd.
2015/09/24 2,500.00
| Quanzhou Fengyutai Enterprise | Joint |
liability
2016/01/21-2025/09/23 No NoQuanzhou Fengyutai
| guarantee | ||
| Enterprise |
Manage m ent Ltd.
2015/09/24 500.00
liability
| guarantee |
2016/04/28-2025/09/23 No No
Manage m ent Ltd.
2015/09/24 1,500.00
| Quanzhou Fengyutai Enterprise | Joint |
liability
2016/05/27-2025/09/23 No NoQuanzhou Fengyutai
| guarantee | ||
| Enterprise |
Manage m ent Ltd.
2015/09/24 1,500.00
liability
| guarantee |
2016/06/28-2025/09/23 No No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Manage m ent Ltd.
2015/09/24 100.00
| Quanzhou Fengyutai Enterprise | Joint |
liability
2016/08/26-2025/09/23 No NoQuanzhou Fengyutai
| guarantee | ||
| Enterprise |
Manage m ent Ltd.
2015/09/24 1,870.00
liability
| guarantee |
2017/01/18-2025/09/23 No No
Industrial Park Management
| Co., Ltd. |
2016/08/11 2,700.00
liability
| guarantee |
2016/08/11-2028/08/11 No No
Industrial Park Management
| Co., Ltd. |
2017/01/18 63,100.00 2017/07/07 622.00
liability
| guarantee |
2017/07/07-2027/12/30 No NoS.F. Express
(China)Limited
2013/08/26 135.42
liability
| guarantee |
2014/06/30-2018/01/26 Yes NoS.F. Express
(China)Limited
2013/08/26 135.42
liability
| guarantee |
2014/06/30-2018/02/26 Yes NoS.F. Express
(China)Limited
2013/08/26 135.42
liability
| guarantee |
2014/06/30-2018/03/26 Yes NoS.F. Express
(China)Limited
2013/08/26 135.42
liability
| guarantee |
2014/06/30-2018/04/26 Yes NoS.F. Express
(China)Limited
2013/08/26 135.42
liability
| guarantee |
2014/06/30-2018/05/26 Yes NoS.F. Express
(China)Limited
2013/08/26 135.42
liability
| guarantee |
2014/06/30-2018/06/26 Yes NoS.F. Express
(China)Limited
2013/08/26 14.75
liability
| guarantee |
2014/06/30-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 658.01
liability
| guarantee |
2014/10/28-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 1,316.03
liability
| guarantee |
2014/12/05-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 342.96
liability
| guarantee |
2015/02/13-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 700.88
liability
| guarantee |
2015/05/18-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 2,102.65
liability
| guarantee |
2015/06/30-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 1,401.77
liability
| guarantee |
2015/12/02-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 1,407.03
liability
| guarantee |
2016/02/25-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 771.23
liability
| guarantee |
2016/03/11-2023/08/26 No NoS.F. Express
(China)Limited
2013/08/26 84.64
liability
| guarantee |
2016/04/11-2023/08/26 No No
Goodea r Development Limited 2012/10/24 648.28
liability
| guarantee |
2012/12/19-2027/09/27 No No
Goodea r Development Limited 2012/10/24 910.05
liability
| guarantee |
2013/01/31-2027/09/27 No No
Goodea r Development Limited 2012/10/24 2,194.86
liability
| guarantee |
2013/03/27-2027/09/27 No No
Goodea r Development Limited 2012/10/24 923.88
liability
| guarantee |
2013/05/30-2027/09/27 No No
Goodear Development Limited 2012/10/24 3,399.88
liability
| guarantee |
2013/09/04-2027/09/27 No No
Goodea r Development Limited 2012/10/24 2,835.26
liability
| guarantee |
2013/09/27-2027/09/27 No No
| Goodea r Development Limited | 2012/10/24 | 3,095.39 | Joint | 2013/10/31-2027/09/27 | No | No |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Goodea r Development Limited 2012/10/24 3,922.29
| liability guarantee |
| Joint |
liability
2013/11/28-2027/09/27 No No
Goodea r Development Limited 2012/10/24 6,642.76
| guarantee |
| Joint |
liability
2014/01/6-2027/09/27 No No
Goodea r Development Limited 2012/10/24 9,030.84
| guarantee |
| Joint |
liability
2014/01/15-2027/09/27 No No
Goodea r Development Limited 2012/10/24 10,057.75
| guarantee |
| Joint |
liability
2014/02/17-2027/09/27 No No
Goodear Development Limited 2012/10/24 14,444.97
| guarantee |
| Joint |
liability
2014/03/14-2027/09/27 No No
Goodea r Development Limited 2012/10/24 10,460.75
| guarantee |
| Joint |
liability
2014/04/17-2027/09/27 No No
Goodea r Development Limited 2012/10/24 10,568.27
| guarantee |
| Joint |
liability
2014/05/20-2027/09/27 No No
Goodea r Development Limited 2012/10/24 11,048.41
| guarantee |
| Joint |
liability
2014/06/18-2027/09/27 No No
Goodea r Development Limited 2012/10/24 12,328.59
| guarantee |
| Joint |
liability
2014/07/21-2027/09/27 No No
Goodea r Development Limited 2012/10/24 11,937.48
| guarantee |
| Joint |
liability
2014/08/19-2027/09/27 No No
Goodea r Development Limited 2012/10/24 8,354.22
| guarantee |
| Joint |
liability
2014/09/17-2027/09/27 No No
Goodear Development Limited 2012/10/24 10,070.20
| guarantee |
| Joint |
liability
2014/10/22-2027/09/27 No No
Goodea r Development Limited 2012/10/24 4,183.21
| guarantee |
| Joint |
liability
2014/11/24-2027/09/27 No No
Goodea r Development Limited 2012/10/24 3,625.65
Jointliabilityguarantee
2014/12/19-2027/09/27 No No
Goodea r Development Limited 2012/10/24 1,685.20
guaranteeJoint
liability
| guarantee |
2015/01/28-2027/09/27 No NoS.F. Express Limited 2017/01/18 1,600.00 2018/02/21 483.31
liability
| guarantee |
2018/02/21-2019/02/21 No No
SF HOLDING LIMITED 2016/07/25 676.72
liability
| guarantee |
2016/07/25-2018/01/25 Yes No
SF HOLDING LIMITED 2016/07/25 5,413.76
liability
| guarantee |
2016/07/25-2021/09/30 No No
SF HOLDING LIMITED 2016/10/24 8,459.00
liability
| guarantee |
2016/10/24-2019/1/31 No NoSF HOLDING LIMITED 2016/11/24 16,918.00
liability
| guarantee |
2016/11/24-2018/12/31 No No
SF HOLDING LIMITED 2016/11/18 46,524.50
liability
| guarantee |
2016/11/18-2019/11/03 No No
SF HOLDING LIMITED 2016/09/28 8,459.00
liability
| guarantee |
2016/09/02-2018/07/30 No NoSF HOLDING LIMITED
2017/01/18 709,400.00
2018/03/20 33,836.00
liability
| guarantee |
2018/03/20-2018/12/31 No NoSF HOLDING LIMITED 2017/06/14 16,918.00
liability
| guarantee |
2017/06/14-2019/06/14 No NoSF HOLDING LIMITED 2018/01/16 12,688.50
liability
| guarantee |
2018/01/16-2019/01/16 No No
| SF HOLDING LIMITED | 2017/10/02 | 68.00 | Joint | 2017/10/02-2018/10/02 | No | No |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
SF HOLDING LIMITED 2017/06/22 14.24
| liability guarantee |
| Joint |
liability
2017/06/22-2020/07/16 No NoZhejiang Shunlu Logistics Co.,
Ltd.
2017/01/18 3000.00 2017/11/01 1,500.00
| guarantee |
| Joint |
liability
2017/11/01-2018/10/30 No NoZhejiang Shun Feng Express
Co., Ltd.
2017/01/18 4000.00
2017/04/28 200.00
| guarantee |
| Joint |
liability
2017/04/28-2018/04/28 Yes NoZhejiang Shun Feng Express
Co., Ltd.
2017/12/08 200.00
| guarantee |
| Joint |
liability
2017/12/08-2018/12/07 No NoYantai S.F. Express Co., Ltd.. 2017/01/18 100.00 2017/02/28 65.00
| guarantee |
| Joint |
liability
2017/02/28-2018/01/31 Yes NoXi'an S.F. Express Co., Ltd.
2017/01/18 900.00
2017/10/27 80.00
| guarantee |
| Joint |
liability
2017/10/27-2018/07/31 No NoXi'an S .F. Express Co., Ltd. 2017/03/09 197.37
| guarantee |
| Joint |
liability
2017/03/09-2018/03/09 Yes NoXi'an S.F. Express Co., Ltd. 2017/01/18 300.00 2017/08/03 26.27
| guarantee |
| Joint |
liability
2017/08/03-2018/07/31 No NoXi'an S.F. Express Co., Ltd. 2017/10/17 25.85
| guarantee |
| Joint |
liability
2017/10/17-2018/07/31 No NoWuxi S.F. Express Co., Ltd. 2017/01/18 1200.00 2017/05/17 10.00
| guarantee |
| Joint |
liability
2017/05/17-2018/05/23 Yes NoTianjin S.F. Express Co., Ltd.
2017/01/18 1500.00
2017/06/28 130.00
| guarantee |
| Joint |
liability
2017/06/28-2018/07/29 No NoTianjin S.F. Express Co., Ltd. 2017/09/22 106.05
| guarantee |
| Joint |
liability
2017/09/22-2018/07/31 No NoSuzhou Industrial Park S.F.
Express Co., Ltd.
2017/01/18 1000.00 2017/09/26 205.17
| guarantee |
| Joint |
liability
2017/09/26-2018/09/25 No NoSichuan S.F. Express Co., Ltd.
2017/01/18 1300.00
2017/04/13 10.00
Jointliabilityguarantee
2017/04/13-2018/04/13 Yes NoSichuan S.F. Express Co., Ltd. 2017/05/17 10.00
guaranteeJoint
liability
| guarantee |
2017/05/17-2018/05/11 Yes No
SF transportation （Nanjing）
Co., Ltd.
2017/01/18 250.00 2017/05/11 30.00
liability
| guarantee |
2017/05/11-2018/03/31 Yes NoChongqing S.F. Express Co.,
Ltd.
2017/01/18 500.00
2017/05/02 239.14
liability
| guarantee |
2017/05/02-2018/04/30 Yes NoChongqing S.F. Express Co.,
Ltd.
2017/07/05 5.00
liability
| guarantee |
2017/07/05-2018/05/31 Yes NoChongqing S.F. Express Co.,
Ltd.
2017/10/13 20.81
liability
| guarantee |
2017/10/13-2018/10/11 No No
S.F. Express Co., Ltd. 2016/06/21 10.00
liability
| guarantee |
2016/06/21-2018/06/20 Yes NoS.F. Express Co., Ltd.
2017/01/18 13500.00
2017/06/21 100.00
liability
| guarantee |
2017/06/21-2019/04/30 No NoS.F. Express Co., Ltd. 2017/09/14 75.88
liability
| guarantee |
2017/09/14-2018/09/14 No NoS.F. Express Co., Ltd. 2017/10/9 300.00
liability
| guarantee |
2017/10/09-2018/10/07 No NoS.F. Express Co., Ltd. 2017/10/23 30.00
liability
| guarantee |
2017/10/23-2018/10/15 No NoS.F. Express Co., Ltd. 2017/10/23 756.00
liability
| guarantee |
2017/10/23-2018/10/31 No No
| S.F. Express Co., Ltd. | 2017/10/23 | 1,452.00 | Joint | 2017/10/23-2018/10/31 | No | No |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
S.F. Express Co., Ltd. 2018/01/08 100.00
| liability guarantee |
| Joint |
liability
2018/01/08-2018/05/31 Yes No
| guarantee | ||
| S.F. Express Group (Shanghai) |
Co., Ltd.
2017/01/18 2000.00
2017/06/03 10.00
liability
| guarantee |
2017/06/03-2018/06/04 Yes No
Co., Ltd.
2017/04/25 100.00
| S.F. Express Group (Shanghai) | Joint |
liability
2017/04/25-2018/05/04 Yes NoS.F. Express (Tianjing) Co.,
Ltd.
2017/01/18 500.00
2017/11/16 72.06
| guarantee |
| Joint |
liability
2017/11/16-2018/11/28 No NoS.F. Express (Tianjing) Co.,
Ltd.
2017/12/27 61.35
| guarantee |
| Joint |
liability
2017/12/27-2018/12/25 No NoS.F. Express (Shenyang) Co.,
Ltd.
2017/01/18 1500.00 2017/09/22 100.00
| guarantee |
| Joint |
liability
2017/09/22-2018/09/07 No NoS.F. Data Services (Wuhan)
Co., Ltd.
2017/01/18 500.00 2017/11/03 77.76
| guarantee |
| Joint |
liability
2017/11/03-2018/11/02 No No
SF Airlines Company Limited 2016/07/21 100.03
| guarantee |
| Joint |
liability
2016/07/21-2018/06/01 Yes No
SF Airlines Company Limited 2015/08/07 2,500.00
| guarantee |
| Joint |
liability
2015/08/07-2018/02/01 Yes NoSF Airlines Company Limited
2017/01/18 76940.00
2017/03/08 21.00
| guarantee |
| Joint |
liability
2017/03/08-2018/03/07 Yes NoSF Airlines Company Limited 2017/03/08 2.00
| guarantee |
| Joint |
liability
2017/03/08-2018/04/30 Yes NoSF Airlines Company Limited 2017/03/08 40.00
| guarantee |
| Joint |
liability
2017/03/08-2018/03/07 Yes NoSF Airlines Company Limited 2017/04/01 10.00
| guarantee |
| Joint |
liability
2017/04/01-2018/03/31 Yes NoSF Airlines Company Limited 2017/05/28 2,000.00
Jointliabilityguarantee
2017/05/28-2019/06/15 No NoSF Airlines Company Limited 2017/08/07 2,500.00
guaranteeJoint
liability
| guarantee |
2017/08/07-2019/02/07 No NoSF Airlines Company Limited 2017/06/21 3.40
liability
| guarantee |
2017/06/21-2018/06/20 Yes NoSF Airlines Company Limited 2017/07/01 18.19
liability
| guarantee |
2017/07/01-2018/01/01 Yes NoSF Airlines Company Limited 2017/06/29 13.60
liability
| guarantee |
2017/06/29-2018/06/29 Yes NoSF Airlines Company Limited 2017/07/07 10.35
liability
| guarantee |
2017/07/07-2018/07/04 No NoSF Airlines Company Limited 2017/09/05 11.88
liability
| guarantee |
2017/09/05-2018/09/01 No NoSF Airlines Company Limited 2017/09/14 19.80
liability
| guarantee |
2017/09/14-2018/09/13 No NoSF Airlines Company Limited 2018/01/01 18.19
liability
| guarantee |
2018/01/01-2018/12/31 No NoSF Airlines Company Limited 2018/04/02 46.84
liability
| guarantee |
2018/03/08-2019/03/07 No NoSF Airlines Company Limited 2018/04/02 22.38
liability
| guarantee |
2018/03/08-2019/03/07 No NoSF Ai rlines Company Limited 2018/04/02 10.00
liability
| guarantee |
2018/04/02-2019/03/31 No No
| Shenzhen Dafeng International | 2017/01/18 | 500.00 | 2017/10/09 | 10.00 | Joint | 2017/10/09-2018/08/31 | No | No |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
| Freight Forwarding Co., Ltd. | liability guarantee |
Shenzhen S.F. Supply ChainCo., Ltd.
2016/11/14 500.00
liability
| guarantee |
2016/11/14-2018/01/01 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/01/18 116,000.00
2017/03/03 39.55
liability
| guarantee |
2017/03/03-2018/03/02 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/03/24 400.00
liability
| guarantee |
2017/03/24-2018/01/31 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/03/21 500.00
liability
| guarantee |
2017/03/21-2018/03/20 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/03/24 600.00
liability
| guarantee |
2017/03/24-2018/03/01 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/04/14 310.00
liability
| guarantee |
2017/04/14-2018/02/15 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/04/25 3,000.00
liability
| guarantee |
2017/04/25-2018/01/01 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/04/07 500.00
liability
| guarantee |
2017/04/07-2018/01/01 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/05/08 500.00
liability
| guarantee |
2017/05/08-2018/05/14 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/05/19 181.56
liability
| guarantee |
2017/05/19-2018/01/01 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/06/14 500.00
liability
| guarantee |
2017/06/14-2018/01/01 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/07/19 104.17
liability
| guarantee |
2017/07/19-2018/05/31 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/08/14 500.00
liability
| guarantee |
2017/08/14-2018/07/24 No NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/08/22 110.54
Jointliabilityguarantee
2017/08/22-2018/08/18 No NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/09/19 33.76
liability
| guarantee |
2017/09/19-2018/08/27 No NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/09/12 1,100.00
liability
| guarantee |
2017/09/12-2018/07/12 No NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/11/15 22.28
liability
| guarantee |
2017/11/15-2018/6/15 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2017/12/29 120.13
liability
| guarantee |
2017/12/29-2018/12/31 No NoShenzhen S.F. Supply Chain
Co., Ltd.
2018/01/24 141.98
liability
| guarantee |
2018/01/24-2018/06/30 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2018/01/31 3,000.00
liability
| guarantee |
2018/01/31-2018/03/31 Yes NoShenzhen S.F. Supply Chain
Co., Ltd.
2018/02/11 600.00
liability
| guarantee |
2018/02/11-2019/03/01 No NoShenzhen S.F. Supply Chain
Co., Ltd.
2018/03/21 500.00
liability
| guarantee |
2018/03/21-2019/03/20 No NoShenzhen S.F. Supply Chain
Co., Ltd.
2018/04/02 3,000.00
liability
| guarantee |
2018/04/02-2019/04/01 No NoShenzhen S.F. Fix Technology
Co., Ltd.
2017/01/18 2,000.00 2017/10/24 400.00
liability
| guarantee |
2017/10/24-2018/01/01 Yes NoShanghai Shunheng Logistics
Co., Ltd.
2017/01/18 500.00 2017/11/16 50.00
liability
| guarantee |
2017/11/16-2018/06/30 Yes No
| Shanghai Shuncheng Logistics | 2017/01/18 | 5,000.00 | 2017/06/04 | 380.00 | Joint | 2017/06/14-2018/05/31 | Yes | No |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
| Co., Ltd. | liability guarantee |
Shanghai Shuncheng LogisticsCo., Ltd.
2017/06/23 1,050.00
liability
| guarantee |
2017/06/23-2018/06/20 Yes否
Shanghai Shuncheng LogisticsCo., Ltd.
2017/07/25 400.00
liability
| guarantee |
2017/07/25-2018/06/22 Yes NoShanghai Shuncheng Logistics
Co., Ltd.
2017/11/03 300.00
liability
| guarantee |
2017/11/03-2018/06/30 Yes NoShanghai Shuncheng Logistics
Co., Ltd.
2018/02/01 650.00
liability
| guarantee |
2018/02/01-2018/12/31 No NoShandong S.F. Express Co.,
Ltd.
2017/01/18 1,000.00
2017/06/05 50.00
liability
| guarantee |
2017/06/05-2018/05/30 Yes NoShandong S.F. Express Co.,
Ltd.
2017/06/05 10.00
liability
| guarantee |
2017/06/05-2018/05/30 Yes NoShandong S.F. Express Co.,
Ltd.
2017/08/14 255.00
liability
| guarantee |
2017/08/14-2018/06/01 Yes NoQingdao S.F. Express Co., Ltd.
2017/01/18 2,500.00
2017/07/05 6.00
liability
| guarantee |
2017/07/05-2018/07/05 No NoQingdao S.F. Express Co., Ltd. 2017/08/18 40.00
liability
| guarantee |
2017/08/18-2018/07/31 No NoQingdao S.F. Express Co., Ltd. 2018/01/10 260.00
liability
| guarantee |
2018/01/10-2018/12/01 No NoNingbo S.F. Express Co., Ltd.
2017/01/18 2,000.00
2017/04/18 400.00
liability
| guarantee |
2017/04/18-2018/04/12 Yes NoNingbo S.F. Express Co., Ltd. 2017/06/23 30.00
liability
| guarantee |
2017/06/23-2018/04/30 Yes NoNingbo S.F. Express Co., Ltd. 2017/11/09 550.00
liability
| guarantee |
2017/11/09-2018/11/06 No NoLanzhou S.F. Express Co., Ltd. 2017/01/18 100.00 2017/07/11 15.00
liability
| guarantee |
2017/07/11-2018/04/30 Yes NoJiangxi S.F. Express Co., Ltd. 2017/01/18 200.00 2017/09/21 200.00
liability
| guarantee |
2017/09/21-2018/09/20 No NoJiangxu S.F. Express Co., Ltd. 2017/01/18 200.00 2017/10/24 10.00
liability
| guarantee |
2017/10/24-2018/07/31 No NoHunan S.F. Express Co., Ltd.
2017/01/18 800.00
2017/09/28 100.00
liability
| guarantee |
2017/09/28-2018/06/30 Yes NoHunan S.F. Express Co., Ltd. 2017/09/28 200.00
liability
| guarantee |
2017/09/28-2018/06/03 Yes NoHunan S.F. Express Co., Ltd. 2017/09/28 400.00
liability
| guarantee |
2017/09/28-2018/06/30 Yes NoHenan S.F. Express Co., Ltd.
2017/01/18 300.00
2017/08/29 123.78
liability
| guarantee |
2017/08/29-2018/07/19 No NoHenan S.F. Express Co., Ltd. 2017/12/26 104.19
liability
| guarantee |
2017/12/26-2018/12/24 No NoHang zhou Shunyifeng Import
and E xpo rt Trade Co., Ltd.
2017/01/18 1,300.00 2017/06/04 10.00
liability
| guarantee |
2017/06/04-2018/06/04 Yes NoGuizhou S.F. Express Co., Ltd. 2017/01/18 300 2017/11/01 12.21
liability
| guarantee |
2017/11/01-2018/10/31 No NoGuang Zhou S.F. Express Co.,
Ltd.
2017/01/18 5,500.00
2017/07/05 1,500.00
liability
| guarantee |
2017/07/05-2018/08/08 No NoGuang Zhou S.F. Express Co.,
Ltd.
2017/07/26 200.00
liability
| guarantee |
2017/07/26-2018/07/27 No NoGuangxi S.F. Express Co., Ltd. 2017/01/18 300.00 2017/04/14 100.00
2017/04/14-2018/01/31 Yes No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Guangxi S.F. Express Co., Ltd. 2017/12/21 50.00
| guarantee |
| Joint |
liability
2017/12/21-2018/12/15 No NoGuangxi S.F. Express Co., Ltd. 2018/02/09 100.00
| guarantee |
| Joint |
liability
2018/02/09-2019/01/31 No NoFoshan S.F. Express Co., Ltd. 2017/01/18 500.00 2017/11/16 76.99
| guarantee |
| Joint |
liability
2017/11/16-2018/10/15 No No
| guarantee | ||
| Chengdu Taishun Logistics Co., |
Ltd.
2017/01/18 2,000.00
2017/01/23 800.00
liability
| guarantee |
2017/01/23-2018/02/10 Yes No
Ltd.
2018/02/08 800.00
| Chengdu Taishun Logistics Co., | Joint |
liability
2018/02/11-2019/02/10 No NoBeijing S.F. Express Co., L TD.
2017/01/18 4,000.00
2017/02/23 30.00
| guarantee |
| Joint |
liability
2017/02/23-2018/02/22 Yes NoBeijing S.F. Express Co., L TD. 2017/05/02 100.00
| guarantee |
| Joint |
liability
2017/05/02-2018/04/21 Yes NoBeijing S.F. Express Co., L TD. 2017/07/31 100.00
| guarantee |
| Joint |
liability
2017/07/31-2018/07/27 No NoBeijing S.F. Express Co., L TD. 2017/10/24 464.88
| guarantee |
| Joint |
liability
2017/10/24-2018/9/22 No NoBeijing Shuncheng Logistics
Co., Ltd.
2017/01/18 27,289.00
2017/06/16 600.00
| guarantee |
| Joint |
liability
2017/06/16-2018/05/07 Yes NoBeijing Shuncheng Logistics
Co., Ltd.
2017/07/06 200.00
| guarantee |
| Joint |
liability
2017/07/06-2018/07/05 No NoBeijing Shuncheng Logistics
Co., Ltd.
2017/07/03 1,100.00
| guarantee |
| Joint |
liability
2017/07/03-2018/06/29 Yes NoBeijing Shuncheng Logistics
Co., Ltd.
2017/08/11 100.00
| guarantee |
| Joint |
liability
2017/08/11-2018/05/31 Yes NoBeijing Shuncheng Logistics
Co., Ltd.
2017/08/14 200.00
Jointliabilityguarantee
2017/08/14-2018/05/31 Yes NoBeijing Shuncheng Logistics
Co., Ltd.
2017/10/27 563.53
guaranteeJoint
liability
| guarantee |
2017/10/27-2018/10/26 No No
Anhui S. F. Express Co., Ltd. 2016/12/19 90.00
liability
| guarantee |
2016/12/19-2018/01/31 Yes否
Anhui S. F. Express Co., Ltd.
2017/01/18 500.00
2017/03/27 69.70
liability
| guarantee |
2017/03/27-2018/03/31 Yes NoAnhui S. F. Express Co., Ltd. 2017/03/26 37.88
liability
| guarantee |
2017/03/26-2018/03/31 Yes NoAnhui S. F. Express Co., Ltd.
2017/09/28 5.00
liability
| guarantee |
2017/09/28-2018/09/25 No NoAnhui S. F. Express Co., Ltd. 2017/10/30 15.64
liability
| guarantee |
2017/10/30-2018/09/25 No NoAnhui S. F. Express Co., Ltd. 2017/12/25 114.35
liability
| guarantee |
2017/12/25-2018/10/14 No NoAnhui S. F. Express Co., Ltd. 2017/12/25 35.20
liability
| guarantee |
2017/12/25-2018/10/14 No NoAnhui S. F. Express Co., Ltd. 2018/01/10 100.00
liability
| guarantee |
2018/01/10-2019/05/31 No NoS.F. Express
(Hong Kong)Limited
2015/09/9 5.35
liability
| guarantee |
2015/09/09-2018/11/08 No NoS.F. Express
(Hong Kong)Limited
2016/07/15 12.62
liability
| guarantee |
2016/07/15-2018/08/28 No No
2016/10/01 10.82
| S.F. Express (Hong Kong)Limited | Joint liability |
2016/10/01-2018/10/31 No No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
S.F. Express(Hong Kong)Limited
2016/12/15 5.69
| guarantee |
| Joint |
liability
2016/12/15-2019/02/14 No NoZhejiang Shun Feng Express
Co., Ltd.
2018/04/04 3,900.00 2018/04/8 200.00
| guarantee |
| Joint |
liability
2018/04/08-2019/04/28 No NoZhanjiang Shun Feng Express
Co., Ltd.
2017/01/18 100.00
2018/03/06 25.00
| guarantee |
| Joint |
liability
2018/03/06-2018/12/31 No NoZhanjiang Shun Feng Express
Co., Ltd.
2018/03/06 25.00
| guarantee |
| Joint |
liability
2018/03/06-2018/12/31 No NoYantai Shun Feng Express Co.,
Ltd.
2018/04/04 200.00 2018/04/20 65.00
| guarantee |
| Joint |
liability
2018/04/20-2019/01/31 No NoXi'an S.F. Express Co., Ltd.
2018/04/04 900.00
2018/04/17 213.48
| guarantee |
| Joint |
liability
2018/04/17-2019/04/10 No NoXi'an S.F. Express Co., Ltd. 2018/06/07 50.00
| guarantee |
| Joint |
liability
2018/06/07-2018/12/31 No NoChongqing S.F. Express Co.,
Ltd.
2018/04/04 1,400.00 2018/04/28 255.89
| guarantee |
| Joint |
liability
2018/04/28-2019/04/27 No No
| guarantee | ||
| S.F. Express Group (Shanghai) |
Co., Ltd.
2018/04/04 2,000.00 2018/04/27 100.00
liability
| guarantee |
2018/05/04-2019/05/04 No NoS.F. Express(Shenyang) Co.,
Ltd.
2018/04/04 2,300.00 2018/04/28 10.00
liability
| guarantee |
2018/04/28-2019/01/31 No NoS.F. Express(Ningxia) Co., Ltd. 2017/01/18 200.00 2018/03/08 80.00
liability
| guarantee |
2018/03/08-2018/12/31 No NoS.F. Express(Ningxia) Co., Ltd 2018/04/04 200.00 2018/04/28 1.00
liability
| guarantee |
2018/04/28-2019/04/10 No NoS.F. Express(Huizhou) Co., Ltd 2018/04/04 2,500.00 2018/04/17 19.57
liability
| guarantee |
2018/04/17-2019/03/24 No No
Ltd.
2017/01/18 3,000.00
2018/02/11 338.32
Jointliabilityguarantee
2018/02/11-2018/12/31 No NoShenzhen
| Shenzhe n S hunlu Logistics Co., |
| Shunlu Logistics Co., |
Ltd.
2018/03/08 50.00
liability
| guarantee |
2018/03/08-2018/12/31 No NoShenz he n Shunlu A ir Freig ht
Forwarding Co., Ltd.
2017/01/18 7,000.00
2017/05/03 2,038.00
liability
| guarantee |
2017/05/03-2018/01/31 Yes NoShenz he n Shunlu A ir Freig ht
Forwarding Co., Ltd.
2018/01/09 1,850.00
liability
| guarantee |
2018/01/09-2019/02/28 No NoShenz he n Shunlu A ir Freig ht
Forwarding Co., Ltd.
2018/02/01 2,038.00
liability
| guarantee |
2018/02/01-2019/01/31 No NoQuanzhou Shunlu Logistics
Co., Ltd.
2017/01/18 1,500.00
2017/08/15 15.00
liability
| guarantee |
2017/08/15-2018/07/31 No NoQuanzhou Shunlu Logistics
Co., Ltd.
2018/02/07 300.00
liability
| guarantee |
2018/02/07-2018/12/31 No NoQuanzhou Shunlu Logistics
Co., Ltd.
2018/02/07 300.00
liability
| guarantee |
2018/02/07-2018/12/31 No NoNingbo S.F. Express Co., LTD.
2018/04/04 2,300.00
2018/04/08 500.00
liability
| guarantee |
2018/04/12-2019/04/11 No NoNingbo S.F. Express Co., LTD. 2018/05/08 500.00
liability
| guarantee |
2018/05/08-2019/05/07 No No
Ltd.
2017/01/18 1,000.00 2018/01/25 420.00
| Liaoning Shunlu Logistics Co., | Joint |
liability
2018/01/25-2018/10/31 No NoJiangsu Huihai Logistics Co.,
Ltd.
2017/01/18 3,200.00
2018/01/31 10.00
| guarantee |
| Joint |
liability
2018/01/31-2018/10/14 No No
| guarantee | ||
| Jiangsu Huihai Logistics Co., Ltd. |
2018/01/31 219.00
2018/01/31-2018/12/31 No No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Hubei S.F. Express Co., LTD. 2017/01/18 1,450.00 2018/03/08 323.29
| guarantee |
| Joint |
liability
2018/03/08-2019/02/08 No NoBeijing S.F. Express Co., L TD.
2018/04/04 5,000.00
2018/04/08 100.00
| guarantee |
| Joint |
liability
2018/04/08-2019/04/20 No NoBeijing S.F. Express Co., L TD. 2018/06/22 30.00
| guarantee |
| Joint |
liability
2018/06/22-2019/01/20 No NoS.F. Express
(Hong Kong)Limited
2017/01/18 7,700.00
2018/02/28 13.97
| guarantee |
| Joint |
liability
2018/02/28-2019/08/31 No NoS.F. Express
(Hong Kong)Limited
2017/10/24 13.90
| guarantee |
| Joint |
liability
2017/10/24-2019/08/31 No NoS.F. Express
(China)Limited
2016/12/14 54.00
| guarantee |
| Joint |
liability
2017/01/15-2018/12/31 No NoS.F. Express
(China)Limited
2017/01/18 17,800.00
2017/04/21 45.00
| guarantee |
| Joint |
liability
2017/04/21-2018/04/20 Yes NoS.F. Express
(China)Limited
2018/01/02 24.90
| guarantee |
| Joint |
liability
2017/09/30-2018/09/29 No NoS.F. Express
(China)Limited
2018/01/02 8.30
| guarantee |
| Joint |
liability
2017/12/19-2018/12/18 No NoS.F. Express
(China)Limited
2018/01/02 16.60
| guarantee |
| Joint |
liability
2017/11/06-2018/11/06 No NoS.F. Express
(China)Limited
2018/01/02 83.00
| guarantee |
| Joint |
liability
2017/12/15-2018/11/27 No NoS.F. Express
(China)Limited
2018/01/12 50.00
| guarantee |
| Joint |
liability
2018/01/12-2018/12/31 No NoS.F. Express
(China)Limited
2017/07/06 42.30
| guarantee |
| Joint |
liability
2017/07/06-2018/07/06 No NoS.F. Express
(China)Limited
2017/11/24 8.46
Jointliabilityguarantee
2017/11/24-2018/11/30 No No
guaranteeLiaoning Shunlu Logistics Co.,
Ltd.
2018/04/04 1,000.00 2018/05/09 191.30
| Liaoning Shunlu Logistics Co., | Joint |
liability
2018/05/09-2019/04/30 No NoHubei S.F. Transportation Co.,
Ltd.
2018/04/04 500.00 2018/05/09 79.33
| guarantee |
| Joint |
liability
2018/05/09-2018/11/30 No NoHebei S. F. Express Co., LTD. 2018/04/04 1,600.00 2018/04/17 35.00
| guarantee |
| Joint |
liability
2018/04/17-2018/12/31 No NoS.F. Express(China)Limited 2018/04/04 1,500.00 2018/04/18 42.30
| guarantee |
| Joint |
liability
2018/04/18-2019/05/04 No NoHang zhou Shunyifeng Import
and E xpo rt Trade Co., Ltd.
2018/04/04 1,000.00 2018/05/18 20.00
| guarantee |
| Joint |
liability
2018/05/18-2019/06/04 No NoWuxi S.F. Express Co., LTD. 2018/04/04 1,000.00 2018/05/18 10.00
| guarantee |
| Joint |
liability
2018/05/18-2019/05/24 No NoHunan S.F. Express Co., LTD. 2018/04/04 2,000.00 2018/06/05 143.10
| guarantee |
| Joint |
liability
2018/06/05-2019/05/25 No NoShenzhen Shuncheng Supply
Chain Service Co., Ltd.
2018/04/04 20,000.00 2018/06/05 23.00
| guarantee |
| Joint |
liability
2018/06/05-2019/05/31 No NoShenzhen S.F. Supply Chain
Co., Ltd.
2018/04/04 26,100.00 2018/06/05 500.00
| guarantee |
| Joint |
liability
2018/06/05-2019/05/14 No NoSF Airlines Company Limited
2018/04/04 58,000.00
2018/06/06 99.58
| guarantee |
| Joint |
liability
2018/06/06-2019/06/01 No NoSF Airlines Company Limited 2018/06/12 3.32
| guarantee |
| Joint |
liability
2018/06/12-2019/06/20 No NoSF Airlines Company Limited 2018/06/12 13.28
| guarantee |
| Joint liability |
2018/06/12-2019/06/28 No No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
S.F. Express (Dongguan) Co.,Ltd.
2018/04/04 8,500.00 2018/06/06 186.61
| guarantee |
| Joint |
liability
2018/06/06-2019/05/01 No NoShenzhen S.F. Fix Technology
Co., Ltd.
2018/04/04 11,000.00 2018/06/21 400.00
| guarantee |
| Joint |
liability
2018/06/21-2019/01/31 No NoJiangxi S.F. Express Co., LTD. 2018/04/04 1,300.00 2018/06/28 50.00
| guarantee |
| Joint |
liability
2018/06/28-2019/05/31 No NoFoshan S.F. Express Co., LTD. 2018/04/04 1,100.00 2018/06/28 123.91
| guarantee |
| Joint |
liability
2018/06/28-2019/05/31 No NoShanghai Shuncheng Logistics
Co., Ltd.
2018/04/04 6,000.00 2018/06/22 40.00
| guarantee |
| Joint |
liability
2018/06/22-2019/04/30 No No
| guarantee | ||
| Chongqing Huiyifeng Logistics |
Co., Ltd.
2018/04/04 1,000.00 2018/06/22 500.00
liability
| guarantee |
2018/06/22-2019/06/20 No No
Total guarantee approved for subsidiaries
durin g the r eporting period（C1）
2,000,000.00
| Total actual amount of |
guarantees forsubsidiaries during the
reporting period（C2）
66,422.14
| Total guarantee approved for the subsidiaries |
at the end of the reporting period（C3）
2,398,130.62
| Total actual guarantee |
balance for subsidiariesat the end of the
reporting period （C4）
402,636.06
Tota l guarantee amount provided by the Company
Tota l guarantee approved during the reporting
period（B1+C1）
2,331,945.00
| Total actual amount of |
guarantee during thereporting period
（B2+C2）
66,422.14
Total guarantee approved at the e nd of the
reporting period（B3+C3）
2,730,075.62
| Total actual guarantee |
balance at the end of thereporting period
（B4+C4）
402,636.06
Total guarantee amount (B4+ C4) to net assets of the Company 11.89%
Of which:
Amount of guarantee for shareholders, actual controller, and their related parties(D)
Amount of debt guarantee provided for guaranteed party whose asset-liability
ratio is not less than 70% directly or indirectly (E)
211,026.88
Amount of total guarantee over 50% of net assets (F) 0
Total amount of the above three gu ar antees (D+E+F) 211,026.88
Explanation of warranty liability or possible joint liquidation (if any) N/A
Explanation of provision of guarantees for external parties in violation of theprescribed procedure (if any)
N/A
Before Taisen Holding was incorporated into the listed Company in December 2016, Taisen Holding and itssubsidiaries performed external guarantee procedures in accordance with their own Articles of Corporation andother relevant regulations. After Taisen Holding was incorporated into the listed Company in December 2016, as asubsidiary of the listed Company, Taisen Holding and its subsidiaries strictly performed the review and disclosureprocedures of external guarantees in accordance with relevant laws and regulations such as the Stock ListingRules of Shenzhen Stock Exchange and other related laws and regulations.
(2) Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the reporting period.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
3. Other significant contracts
□ Applicable √ Not applicable
No such cases in the reporting period.
XV. Social Responsibilities
1. Major Environmental Protection DevelopmentsDid the listed Company and its subsidiaries belong to the major pollutant discharge units announced by the
Ministry of Ecology and Environment?NoThe listed Company and its subsidiaries are not part of the major pollutant discharge units announced by theMinistry of Ecology and Environment. During the reporting period, the Company and its subsidiaries strictlyimplemented national laws and regulations on environmental protection, and were not subject to administrativepenalties from the Ministry of Ecology and Environment for violating relevant laws and regulations.
2. Poverty AlleviationThe company did not carry out poverty alleviation programs during the reporting period, and there is currently no
plans to do so in the future.
XVI. Other Major Issues
√ Applicable □ Not applicable
1. The Hubei International Logistics Core Hub Project was approved by the State Council and the CentralMilitary Commission.
On December 13, 2017, the company’s wholly-owned subsidiary Taisen Holding and the Hubei ProvincialPeople’s Government signed the “Cooperation Agreement for the Hubei International Logistics Core HubProject.” On February 23, 2018, the State Council and the Central Military Commission issued its “Approval fromthe State C ouncil and Centr al Military Commission of t he Construction of the Hubei Ezhou Civil Airport” (StateLetter 2018 Number 8), which officially replied to the Hubei Provincial People’s Government’s “Request toEstablish the Ezhou Civil Airport Project for the Hubei International Logistics Core Hub Project” (Hubei OfficialLetter 2017 Number 3). The approval is considered part of the pre-feasibility study stage of the project, and theproject construction plan will be further studied in the project feasibility study and design stage. The finalconstruction scale, investment scale, and specific funding arrangements of the project will be determined after thecompletion of the two stages mentioned. In determining the specific arrangements of the project design andinvestment, the company will comprehensively consider the future strategy layout, operational plan, financialstatus, and other important factors to ensure that the project can fulfill the growth needs of the company andenhance the long-term value of the company while controlling the risks to, and protecting the interests of,shareholders.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
2. The company’s subsidiary was awarded the first domestic drone operating license by the Civil AviationAdministration of China.
On March 27, 2018, the company’s subsidiary Jiangxi Fengyu Shuntu Technology Co., Ltd. was awarded thefirst domestic drone operating (pilot) license by the CAAC’s East China Regional Administration. Since thelaunch of SF’s logistics drone delivery pilot in June 2017, it has successfully completed the preparation, start-up,implementation, and validation stages for a pilot, becoming the first logistics drone operating company approvedby the CAAC. As the first company in China to obtain the drone operating (pilot) license from the CAAC, thecompany is the first to obtain such a license in China, and according to license regulations, SF’s logistics drone isallowed to operate in the pilot area approved by the CAAC to carry out logistics deliveries. This means that SF’slogistics drone can be the first to be commercialized and have first-mover advantage.
3. Issuance of corporate bonds by a subsidiary
On July 26, 2018, SF Holdings Investment Limited, a wholly-owned subsidiary of the company, completedthe issuance of a USD 500 million overseas bond. The bond trades on the Hong Kong Stock Exchange and waslisted on July 27, 2018. The bond issuance was reviewed and approved by the company at the eleventh meeting ofthe fourth Board of Directors held on December 27, 2017, and at the first extraordinary general meeting ofshareholders of 2018 on January 12, 2018.
From August 1, 2018, to August 2, 2018, Taisen Holdings issued to qualified investors its first 2018 corporatebond issuance (the securities are referred to as 18SF01, stock code 112739), raising RMB 800 million at a couponrate of 4.29%, and all from direct inquiries and placements to qualified investors. Details can be found in thecompany’s discosure “First Issuance of Corporate Bonds by the Company’s Wholly-Owned Subsidiary ShenzhenShunfeng Taisen Holdings (Group) Co., Ltd. to Qualified Investors” (2018-064).
Index of key disclosures are as follows：
Announcement Title Disclosure Date Website
| Progress of Hubei International Logistics Core Hub Project (2018-011) | February 26, 2018 | http://www.cninfo.com.cn |
March 28, 2018 http://www.cninfo.com.cn
| Issuan ce of the First Domestic Drone Operating License from the Civil Aviation Administration of China (2018-029) |
| Participation of Whol ly -Owned Subisidiary in Equity Investment Fund (2018-042) |
Apr il 27, 2018 http://www.cninfo.com.cn
Data Joint Ventures（2018-043）
Apr il 27, 2018 http://www.cninfo.com.cn
| Participation of Wholly-Owned Subsidiary in the Establishment of Big |
| Progress on the Issuance of Overseas US Dollar Bonds by Overseas |
Chinese Subsidiary（2018-060）
July 21, 2018 http://www.cninfo.com.cn
Wholly-Owned Subsidiary（2018-062）
July 28, 2018 http://www.cninfo.com.cn
Completion of the Issuance of Overseas US Dollar Bonds by OverseasResults of the First Issuance of 2018 Corporate Bonds to Qualified
Inve s tor s by Wholly-Owned Subsidiary Shenzhen Shunfeng Taisen
Holdings (Group) Co., Ltd.（2018-064）
August 3, 2018 http://www.cninfo.com.cn
XVII. Significant events of subsidiaries
□ Applicable √ Not applicable
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 6 Share Changes & Shareholder Details
I. Changes in shares
1. Changes in shares
Unit: number of shares
Before Change Increase or Decrease (+ or -) After Change
Number
of shares
Proportion
New share s
issued
Bonus
shares
Equityreserve into
sharecapital
Others Subtotal
Number
of shares
Proportion
| I. R estricted sales of shares | 4,268,174,825 | 96.76% | 2,556,661 | 0 | 0 | -752,793,503 | -750,236,842 | 3,517,937,983 | 79.71% |
| 2.Shares held by state-owned legal per son |
334,838,739
7.59%
-159,982,526
-159,982,526
174,856,213
| 3.96% | ||||
| 3.O th e r shares held by domestic capital |
3,933,336,086
89.17%
2,492,461
-592,810,977
-590,318,516
3,343,017,570
| 75.74% | ||||
| Shares held by domestic legal persons |
3,842,684,445
87.12%
-588,972,708
-588,972,708
3,253,711,737
| 73.72% | ||||
| Shares held by domestic natural persons |
90,651,641
2.06%
2,492,461
-3,838,269
-1,345,808
89,305,833
| 2.02% | ||||
| 4.Shares held by Overseas capital |
0.00%
64,200
64,200
64,200
| 0.00% | ||||
| Shares held by overseas legal persons |
0.00%
| 0.00% | ||||
| Shares held by overseac natural persons |
0.00%
64,200
64,200
64,200
| 0.00% |
II. Unrestricted sales of shares
142,840,699
3.24%
752,793,503
752,793,503
895,634,202
| 20.29% |
1.RMB commo n share s
142,840,699
3.24%
752,793,503
752,793,503
895,634,202
| 20.29% |
III. Total number of shares 4,411,015,524
100.00%
2,556,661
2,556,661
4,413,572,185
100．00%
Reasons for changes in shares
√ Applicable □ Not applicable
During the reporting period, the company completed registration for its 2017 restricted stock incentive plan,which granted 2,556,661 restricted shares to 777 employees. The restricted shares were listed on January 11,2018.In June 2018, the company implement its restricted stock incentive plan for 2018. 1139 employees were granted5.2 million shares at a price of RMB 24.33 per share for the first grant. The shares were granted on June 13, 2018,and were listed on July 9, 2018. The table above did not include those restricted shares
Approval of share changes
□ Applicable √ Not applicable
Transfer of share ownership
□ Applicable √ Not applicable
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to commonshareholders of the Company, and other financial indexes over the last year and the last reporting period
√ Applicable □ Not applicable
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
During the reporting period, the company completed registration for its 2017 restricted stock incentive plan,share capital i ncreased by 2,556,661shares, which diluted the basic earnings per share and diluted earnings pershare for the current period, and the net assets per share attributable to common shareholders of the Company.
Other contents that the Company considers necessary or is required by the securities regulatory authorities todisclose
□ Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: number of shares
Name ofshareholder
Restrictedshares at t hebeginning of
the period
restricted
sharesremoved in
| the period |
Number ofrestricted
in the period
Restrictedshares at t he
end of the
period
Restricted sales
reasons
Date of restricted sales removalShenzhen Mingde
HoldingDevelopment Co.,Ltd.
2,701,927,139
-
-
| 2,701,927,139 |
Commitment forissuing restrictedshares forpurchasing assetsduring major as setrestructuring
January 23, 2020
Ningbo S h undaFengrunInvestmentManagementPartnership(LimitedPartnership)
392,253,457
| 235,352,074 |
-
| 156,901,383 |
Commitment forissuing restrictedshares forpurchasing assets
restructuring
| during major asset | On January 23, 2018, |
117,676,037 restricted shareswere relieved. On March 21,2018, 117,676,037 restrictedshares were r elieved. Until thefulfillment of the 2018performance compensationobligation (if any) (If there is noobliga t ion of performancecom pe ns a t ion, it is the da
announcement on the specialaudit report on the committedperformance, whichever is later),
| 156,901,383 restricted shares can be relieved. |
ShenzhenZhaoguangInvestment
266,637,546
| 159,982,526 |
-
| 106,655,020 |
Commitment forissuing restrictedshares forpurchasing assets
restructuring
| during major asset | On January 23, 2018, 79,991,263 |
restrict ed shares were relieved.On March 21, 2 018, 79,991,263restrict ed shares were relieved.Until the fulfillment of the 2018performance compensationobligation (if any) (If there is noobliga t ion of performance
announcement on the specialaudit report on the committedperformance, whichever is later),
| 106,655,020 restricted shares can be relieved. |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Suzhou IndustrialPark OrizaShunfeng EquityInvestmentCompany(LimitedPartnership)
266,637,546
| 159,982,526 |
-
| 106,655,020 |
Commitment forissuing restrictedshares forpurchasing assets
restructuring
| during major asset | On January 23, 2018, 79,991,263 |
restrict ed shares were relieved.On March 21, 2 018, 79,991,263restrict ed shares were relieved.Until the fulfillment of the 2018performance compensationobligation (if any) (If there is noobliga t ion of performance
announcement on the specialaudit report on the committedperformance, whichever is later),
| 106,655,020 restricted shares can |
be relieved.
InvestmentPartnership(LimitedPartnership)
266,637,546
| Jiaqiang Shunfeng (Shenzhen) Equity | 159,982,526 |
-
| 106,655,020 |
Commitment forissuing restrictedshares forpurchasing assets
restructuring
| during major asset | On January 23, 2018, 79,991,263 |
restrict ed shares were relieved.On March 21, 2 018, 79,991,263restrict ed shares were relieved.Until the fulfillment of the 2018performance compensationobligation (if any) (If there is noobliga t ion of performance
announcement on the specialaudit report on the committedperformance, whichever is later),
| 106,655,020 restricted shares can be relieved. |
Liu Jilu 75,123,253
-
-
| 75,123,253 | restrict ed shares |
for senior
——Zhong yuan A sset
Manage ment C o.,Ltd.
68,201,193
| managers | ||
-
-
| 68,201,193 | Commitment for |
issuing restrictedshares for r aisingmatching funds
Aug us t 23, 2018
National SocialSecurity FundCombination 503
24,757,032
| during major asset restructuring | ||
-
-
| 24,757,032 | Commitment for |
issuing restrictedshares for r aisingmatching funds
Aug us t 23, 2018
| during major asset restructuring | ||
| Chang'an International Trust |
Co., Ltd. –Chang ' a n Trust –MingshengTargetedAddit ional SharesIssuan ce N o. 1 -
22,790,565
| Capital Trust |
-
-
| 22,790,565 |
Commitment forissuing restrictedshares for r aisingmatching fundsduring major as setrestructuring
Aug us t 23, 2018
Shangx in YiyuanInvestmentCompany(Limited
| Partnership) |
22,733,731
-
-
| 22,733,731 | Commitment for |
issuing restrictedshares for r aisingmatching funds
Aug us t 23, 2018Others 160,475,817
| during major asset restructuring | |||
| 37,493,851 |
2,556,661
| 125,538,627 |
—— ——Total 4,268,174,825
| 752,793,503 |
2,556,661
| 3,517,937,983 |
-- --
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
3. Issuance and Listing of Securities
During the reporting period, the company implemented its restricted stock incentive plan for 2017, which granted2,556,661 restricted shares to 777 employees by issuing new shares. The restricted shares were listed on January11, 2018. For detail, please refer to the announcement of " Completion of the Registration of the 2017 RestrictedStock Incentive Plan (2018-001) " on www.cninfo.com.cn.
II. Total number of shareholders and their holdings
Unit: number of shares
the end
| of reporting period |
53,095
| Total number of preferred shareholders with voting rights restored (if any) |
Shareholders holding more than 5% of shares or shares of the top 10 shareholdersName of
shareholder
Type ofshareholder
Shareholding
percentage
| Shareholding | Number of |
shares h eld atthe end of the
reporting
| period | Increase or |
decrease ofshares during
reporting
Number ofrestrictedshares h eld
| period | Number of |
non-restricted
shares
| held | Pledged or frozen shares | |
| Status of | ||
shares
Status of
shares
HoldingDevelopment Co.,
| Ltd. | Domestic |
non-state-owned legal
| person | 61.22% | 2,701,927,139 |
-
| 2,701,927,139 |
-
Pledged
| 570,000,000 | ||||
| Ningbo S h un Da |
Feng RunInvestmentManagementPartnership(Limited
Domesticnon-state-owned legalperson
8.59%
| Partnership) |
379,224,887
-13,028,570
| 156,901,383 |
222,323,5
Pledged
| 326,049,874 | ||||
| Shenzhen |
Zhaoguang
State-ownedlegal person
6.04%
| Investment |
266,637,546
-
| 106,655,020 |
159,982,5
| Suzhou Industrial |
Park Or izaShunfeng EquityInvestmentCompany (Limited
Domesticnon-state-owned legalperson
5.66%
| Partnership) |
249,677,160
-16,960,386
| 106,655,020 |
143,022,1
Jia QiangShunfeng(Shenzhen) EquityInvestmentPartnership(LimitedPartnership)
Domesticnon-state-owned legalperson
5.53%
243,896,050
-22,741,496
| 106,655,020 |
137,241,0
Liu Jilu
Domesticnatura l pe rs on
2.06%
90,958,488
-9,205,850
| 75,123,253 |
15,835,23
| Zhong yuan A sset |
Manage ment C o.,
State-ownedlegal person
1.55%
| Ltd. |
68,201,193
-
| 68,201,193 |
-
Pledged
68,201,193
| Suzhou Gu Yu Qiu |
Chuang EquityInvestmentPartnership(Limited
Domesticnon-state-owned legalperso
1.21%
| Partnership) |
53,327,509
-
| 21,331,005 |
31,996,50
| National Social | Other | 0.56% | 24,757,032 | - | 24,757,032 | - |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
| Security Fund Combination 503 |
| Chang'an |
International TrustCo., Ltd. –Chang ' a n Trust –MingshengTargetedAddit ional SharesIssuan ce N o. 1 -
Other 0.52%
| Capital Trust |
22,790,565
-
| 22,790,565 |
-
| Strategic investor or general legal |
person becomes the top 10shareholder due to the placement
N/A
| of new shares |
| Explain any associated relationship and/or persons acting |
in concer t between the above-
The Company i s not aware of whether there is an associated relationship between the above-mentioned shareholders and whether they are acting in concert.
| mentioned shareholders | |
| Top 10 shareholders holding unrestricted shares | |
Name of shareholder
Number of unrestricted shares held
at the end of the reporting period
Type of sharesType of shares Type of shares
| Ningbo Shun Da Feng Run Investment Management Partnership (Limited Partnership) | 222,323,504 |
Common shares
| 222,323,504 | |||
| Shenzhen Zhaoguang Investment | 159,982,526 | Common shares | 159,982,526 |
| Suzhou Industrial Park Oriza Shunfeng Equity Investment Company (Limited Partnership) | 143,022,140 |
Common shares
| 143,022,140 | |||
| Jia Qiang Shunfeng (Shenzhen) Equity Investment Partnership (Limited Partnership) | 137,241,030 |
Common shares
| 137,241,030 | |||
| Suzhou Gu Yu Qiu Chuang Equity Investment Partnership (Limited Partnership) | 31,996,504 |
Common shares 31,996,504
| Liu Jilu | 15,835,235 | Common shares | 15,835,235 |
| Hong Kong Securities Clearing Company Ltd. | 13,292,565 | Common shares | 13,292,565 |
| Liu Lingyun | 8,537,762 | Common shares | 8,537,762 |
| Shanghai Greenwoods Asset Management Co. , Ltd. - Preferred Private Equity Fund | 4,987,000 |
Common shares 4,987,000
| Central Huijin Investment Ltd. | 4,686,200 | Common shares | 4,686,200 |
Explain any associated relationship and/or personsacting in concert between the top ten shareholders
persons acting in concert. The Company is not aware of whether there arerelationships among other shareholders and whether they are persons acting
| in concer t. |
Explain the top 10 common shareholders' participationin margin financing (if any)
N/A
Did any of the top 10 common shareholder or the top 10 non-restricted common shareholders of the Companyconduct any promissory repurchase during the reporting period?
□ Yes √ No
No such cases in the reporting period.
III. Change of controlling shareholder or actual controller
Change of controlling shareholder in the reporting period
□ Applicable √ Not applicable
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
No such cases in the reporting period.
Change of actual controller during the reporting period
□ Applicable √ Not applicable
The actual controller did not change during the reporting period.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 7 Preferred Shares
□ Applicable √ Not applicable
No such cases in the reporting period.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 8 Directors, Supervisors and Senior Managers
I. Changes in shares held by directors, supervisors and senior executives
√ Applicable □ Not applicable
Name
Title
Tenurestatus
Shares held
at the
the period
(share)
Quantity of
sharesincreasedduring thereporting
period(share)
Quantity of
sharesdecreasedduring thereporting
period(share)
Quantity ofshares h eld
| beginning of | at the end of |
the period
(share)
Restrictedshares h eld atthe beginningof the period
(share)
Quantity of
restricted
sharesincreasedduring thereporting
period(share)
Restrictedshares h eld
the period
(share)Liu Jilu
| at the end of | ||
| Supervisor |
Current 100,164,338
0 9,205,850 90,958,488 - - -Total -- -- 100,164,338
0 9,205,850 90,958,488 - - -
II. Changes of Directors, Supervisors, and Senior Executives
□ Applicable √ Not applicable
The company's directors, supervisors and senior management personnel did not change during the reportingperiod. For details, please refer to the 2017 Annual Report.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 9 Corporate Bonds
Were there bonds publicly issued and listed on an exchange, and not at maturity, or at maturity but are not fullypaid on the approval report date of the semi-annual report?
No
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 10 Financial Statements
| [English Translation for Reference Only] |
| Review Report |
| PwC ZT Yue Zi (2018) No. 0032 |
| To the shareholders of S.F. Holding Co., Ltd., |
| We have reviewed the accompanying interim financial st atements of S.F. Holding Co., Ltd. (hereinafter “S.F. Holding”), which comprise the consolidated and company balance sheets as at |
30 June 2018, the consolidated and company income statements, the consol
cash flow statements and the consolidated and company statements of changes in equity for the 6-month p eriod then ended, and the notes to the interim fina ncial statements. Management of S.F .Holding is respons ible for the p repa ration of
| these interim financial statements in accordance with |
the requirements of Ac cou nting Stand ards fo r Business Enterprises. Our res pons ibility is to issue areview report on these interim financial statements based on our review.
| We conducted our review in accordance with China Standards on Review Engagement 2101, |
“Review of Financial Statements”. This Stand ard requires that we plan and perform the re view toobtain limited assurance as to whether the interim financial statements are free from materialmisstatement. A review is limited prima rily to inquiries of company personn el and analytical
performed an audit and, accordingly, we do not express an audit opinion.
| procedures applied to financial data and thus provides less assurance than an audit. We have not |
| Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared in accordance with Accounting Standards for Business |
Enterprises or do not present fairly, in all material respects, the
financial position of S.F. Holding as at 30 Jun e 2018, and their financial performance and cashflows for the 6-month period then ended.
PricewaterhouseCoopers Zhong Tian LLP Signing CPA Chen Anqiang
Shanghai, the People’s Republic of China
22 August 2018 S igning CPA Liu Jingping
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
S.F. HOLDING CO., LTD.
CONSOLIDATED BALANCE SHEETAS AT 30 JUNE 2018
(All amounts are stated in RMB Yuan unless ot herwi se stated)[English translation for reference only]
| ASSETS | Note | 30 June 2018 | 31 December 2017 | 1 January 2017 | |||
| Consolidated | Consolidated (Restated) | Consolidated (Restated) | |||||
| Current assets | |||||||
| Cash at bank and on hand | 4(1) | 13,278,406,964.25 | 17,318,372,791.12 | 6,915,508,971.95 | |||
| Financial ass ets at fair value through profit or loss | 4(2) | 15,370,538.49 | 17,819,393.35 | 33,803,417.04 | |||
| Notes receivable and acc ounts receivable | 4(3) | 5,712,559,356.29 | 5,813,325,669.28 | 4,564,318,183.96 | |||
| Advances to suppliers | 4(5) | 1,893,773,204.87 | 1,774,464,372.03 | 1,492,549,226.12 | |||
| Loans and advances | 4(6) | 118,048,691.34 | 126,102,903.69 | 85,271,730.78 | |||
| Other receivables | 4(4) | 1,176,751,813.71 | 1,609,467,639.67 | 1,024,899,341.93 | |||
| Inventories | 4(7) | 499,174,642.28 | 446,359,026.86 | 396,013,674.76 | |||
| Current portion of non-current assets | 4(10) | 68,194,000.00 | - | - | |||
| Other current assets | 4(8) | 5,986,639,795.71 | 4,384,765,117.56 | 6,820,810,214.74 | |||
| Total current assets | 28,748,919,006.94 | 31,490,676,913.56 | 21,333,174,761.28 | ||||
| Non-current assets | |||||||
| Available-for-sale financial assets | 4(9) | 2,399,044,328.85 | 1,803,267,331.92 | 696,583,087.01 | |||
| Long-term receivabl es | 4(10) | 149,440,649.02 | 216,066,050.80 | - | |||
| Long-term equity investment s | 4(11) | 1,068,052,092.25 | 604,683,890.67 | 769,698,763.51 | |||
| Investment propert i es | 4(12) | 2,047,152,752.31 | 1,991,594,322.02 | 2,148,095,293.10 | |||
| Fixed assets | 4(13) | 12,152,101,058.31 | 11,895,129,381.18 | 11,678,342,577.66 | |||
| Construction i n progress | 4(14) | 3,020,960,583.54 | 2,306,920,413.29 | 844,498,050.62 | |||
| Intangible assets | 4(15) | 5,515,763,861.93 | 5,263,523,314.16 | 4,476,298,732.57 | |||
| Research and development expenditures | 4(16) | 255,093,493.36 | 171,175,030.58 | 243,316,365.57 | |||
| Goodwill | 4(17) | 230,190,889.22 | 62,867,146.03 | 58,030,760.81 | |||
| Long-term prepaid expenses | 4(18) | 1,364,169,243.74 | 1,330,080,234.29 | 1,271,129,829.62 | |||
| Deferred tax assets | 4(33) | 376,924,917.42 | 396,795,346.02 | 417,890,993.08 | |||
| Other non-current assets | 4(19) | 1,671,951,540.07 | 143,213,350.40 | 197,826,373.91 | |||
| Total non-current assets | 30,250,845,410.02 | 26,185,315,811.36 | 22,801,710,827.46 | ||||
| T O TAL ASSETS | 58,999,764,416.96 | 57,675,992,724.92 | 44,134,885,588.74 |
CONSOLIDATED BALANCE SHEET ( CONT’D)AS AT 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
| LIABILITIES AND EQUITY | Note | 30 June 2018 | 31 December 2017 | 1 January 2017 | |||
| Consolidated | Consolidated (Restated) | Consolidated (Restated) | |||||
| Current liabilities | |||||||
| Short-term borrowings | 4(21) | 6,431,106,604.43 | 4,619,193,530.69 | 5,466,278,976.31 | |||
| Financial liabilities at fair value through profit or loss | - | 784,639.53 | 1,209,158.71 | ||||
| Notes payable and accounts payable | 4(22) | 6,486,860,179.88 | 6,905,411,234.18 | 5,259,177,206.37 | |||
| Advances from customers | 4(23) | 363,337,992.04 | 368,179,879.29 | 286,348,742.43 | |||
| Employee benefits payable | 4(24) | 2,255,587,099.28 | 2,721,423,825.23 | 2,138,659,367.34 | |||
| Taxes payable | 4(25) | 541,780,614.80 | 867,467,404.07 | 419,174,348.67 | |||
| Other payables | 4(26) | 3,676,018,965.14 | 3,275,270,030.18 | 3,499,859,359.32 | |||
| Current portion of non-current liabilities | 4(27) | 1,983,602,828.62 | 2,787,710,410.86 | 1,316,242,561.22 | |||
| Other current liabi l iti es | - | - | 8,763.78 | ||||
| Total current liabilities | 21,738,294,284.19 | 21,545,440,954.03 | 18,386,958,484.15 | ||||
| Non-current liabili ti es | |||||||
| Long-term borrowings | 4(28) | 2,272,965,112.47 | 2,345,240,281.28 | 4,761,013,384.37 | |||
| Debentures payable | 4(29) | 529,507,404.18 | 529,406,177.70 | - | |||
| Long-term payables | 4(30) | 63,368,515.88 | 20,559,600.00 | 27,000,000.00 | |||
| Long-term employee benefit s payable | 4(31) | 107,777,549.63 | 172,465,125.28 | 235,267,336.93 | |||
| Deferred income | 4(32) | 159,315,864.17 | 133,652,387.03 | 111,667,389.34 | |||
| Deferred tax liabilit i es | 4(33) | 168,504,809.49 | 170,934,714.41 | 45,267,778.02 | |||
| Provisions | 10,800,692.58 | 10,669,991.98 | 11,047,033.68 | ||||
| Total non-current liabilities | 3,312,239,948.40 | 3,382,928,277.68 | 5,191,262,922.34 | ||||
| Total liabilities | 25,050,534,232.59 | 24,928,369,231.71 | 23,578,221,406.49 | ||||
| Equity | |||||||
| Share capital | 4(34) | 4,418,804,167.00 | 4,411,015,524.00 | 4,183,678,213.00 | |||
| Capital reserve | 4(35) | 16,064,736,817.25 | 15,893,770,731.03 | 8,236,698,341.64 | |||
| Less: Treasury stock | 4(36) | (202,255,537.22) | - | - | |||
| Other comprehensi ve incom e | 4(56) | 146,180,928.14 | 219,830,232.83 | 266,682,686.93 | |||
| General risk res erve | 95,759,396.32 | 95,759,396.32 | - | ||||
| Surplus reserve | 4(38) | 586,501,527.41 | 586,501,527.41 | 272,113,202.75 | |||
| Retained earnings | 4(39) | 12,751,685,040.73 | 11,488,940,647.22 | 7,552,595,222.64 | |||
| Total equity attributable to shareholders of the Company | 33,861,412,339.63 | 32,695,818,058.81 | 20,511,767,666.96 | ||||
| Minority interests | 4(55) | 87,817,844.74 | 51,805,434.40 | 44,896,515.29 | |||
| Total equity | 33,949,230,184.37 | 32,747,623,493.21 | 20,556,664,182.25 | ||||
| TOTAL LIABILITIES AND EQUITY | 58,999,764,416.96 | 57,675,992,724.92 | 44,134,885,588.74 |
The accompanying notes form an integral part of these financial statements.
| Legal representative | Principal in charge of accounting | Head of accounti ng dep ar t ment |
COMPANY BALANCE SHEETAS AT 30 JUNE 2018
(All amounts are stated in RMB Yuan unless ot herwi se stated)[English translation for reference only]
| ASSETS | Note | 30 June 2018 | 31 December 2017 | 1 January 2017 | |||||
| Company | Company (Restated) | Company (Restated) | |||||||
| Current assets | |||||||||
| Cash at bank and on hand | 16(1) | 817,557,624.86 | 1,047,126,220.39 | 60,156,545.77 | |||||
| Advances to suppliers | 358,066.02 | 1,391,886.80 | - | ||||||
| Other receivables | 16(2) | 8,339,072,715.47 | 7,339,674,588.51 | 813,179,087.61 | |||||
| Other current assets | 16(3) | 1,467,562,386.09 | 2,996,914,406.42 | - | |||||
| Total current assets | 10,624,550,792.44 | 11,385,107,102.12 | 873,335,633.38 | ||||||
| Non-current assets | |||||||||
| Long-term equity investment s | 16(4) | 43,323,747,297.64 | 43,300,422,777.89 | 43,300,000,000.00 | |||||
| Long-term prepaid expenses | 131,155.08 | - | - | ||||||
| Total non-current assets | 43,323,878,452.72 | 43,300,422,777.89 | 43,300,000,000.00 | ||||||
| T O TAL ASSETS | 53,948,429,245.16 | 54,685,529,880.01 | 44,173,335,633.38 | ||||||
COMPANY BALANCE SHEET (CONT’D)AS AT 30 JUNE 2018
(All amounts are stated in RMB Yuan unless ot herwi se stated)[English translation for reference only]
| LIABILITIES AND EQUITY | Note | 30 June 2018 | 31 December 2017 | 1 January 2017 | |||
| Company | Company (Restated) | Company (Restated) | |||||
| Current liabilities | |||||||
| Short-term borrowings | - | - | 20,000,000.00 | ||||
| Advances from customers | - | 74,961,331.87 | - | ||||
| Employee benefits payable | 806,852.17 | 1,102,875.47 | - | ||||
| Taxes payable | 13,584,812.81 | 11,497,752.19 | 47,528,429.77 | ||||
| Other payables | 206,828,007.33 | 5,471,842.46 | 5,807,203.61 | ||||
| Total current liabilities | 221,219,672.31 | 93,033,801.99 | 73,335,633.38 | ||||
| Total liabilities | 221,219,672.31 | 93,033,801.99 | 73,335,633.38 | ||||
| Equity | |||||||
| Share capital | 4,418,804,167.00 | 4,411,015,524.00 | 4,183,678,213.00 | ||||
| Capital reserve | 46,748,260,922.16 | 46,530,971,136.14 | 38,991,327,794.39 | ||||
| Less: Treasury stock | (202,255,537.22) | - | - | ||||
| Surplus reserve | 433,456,527.10 | 433,456,527.10 | 119,068,202.44 | ||||
| Retained earnings | 2,328,943,493.81 | 3,217,052,890.78 | 805,925,790.17 | ||||
| Total equity | 53,727,209,572.85 | 54,592,496,078.02 | 44,100,000,000.00 | ||||
| TOTAL LIABILITIES AND EQUITY | 53,948,429,245.16 | 54,685,529,880.01 | 44,173,335,633.38 |
The accompanying notes form an integral part of these financial statements.
| Legal representative | Principal in charge of accounting | Head of accounti ng dep ar t ment |
CONSOLIDATED AND COMPANY INCOME STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference onl y]
| For the six months ended 30 June | ||||||||
| Item | Note | 2018 | 2017 | 2018 | 2017 | |||
| Consolidated | Consolidated | Company | Company | |||||
| 1. Revenue | 4(40) | 42,503,599,511.93 | 32,160,932,363.81 | - | - | |||
| Less: Cost of revenue | 4(40) | (34,467,212,820.18) | (25,347,477,265.57) | - | - | |||
| Taxes and surcharges | 4(41) | (109,337,864.95) | (85,023,617.25) | - | - | |||
| Selling an d dis trib ution expenses | 4(42) | (959,568,129.92) | (635,612,144.35) | - | - | |||
| General and administrative expenses | 4(43) | (3,815,523,582.62) | (3,206,870,451.97) | (1,796,327.32) | (23,046,720.10) | |||
| Research and development expenses | 4(44) | (396,939,568.34) | (203,739,223.62) | - | - | |||
| Financial (costs)/income | 4(45) | (10,327,590.07) | (164,180,999.14) | 12,552,613.87 | 1,608,828.69 | |||
| Including: Interest expenses | (246,348,656.24) | (225,766,725.60) | - | - | ||||
| Interest income | 256,330,197.35 | 103,952,692.85 | 12,914,381.13 | 1,608,222.78 | ||||
| Impairment losses | 4(47) | (13,707,446.49) | (8,561,239.91) | - | - | |||
| Add: Other income | 4(52) | 74,730,377.55 | 61,560,076.14 | - | - | |||
| Investment income/(losses) | 4(50), 16(5) | 199,187,461.94 | (14,002,194.77) | 99,865,691.77 | - | |||
| Including: Investment | ||||||||
income/(losses) fromassociates and joint
| ventures | 8,841,240.97 | (81,242,764.48) | - | - | ||||
| Losses arising from changes in fair value | 4(48) | (4,812,095.66) | (2,557,614.40) | - | - | |||
| Losses on disposals of assets | 4(51) | (6,982,780.03) | (7,044,249.36) | - | - | |||
| 2. Operating profit/(loss) | 2,993,105,473.16 | 2,547,423,439.61 | 110,621,978.32 | (21,437,891.41) | ||||
| Add: Non-operating income | 4(49)(a) | 55,622,496.87 | 66,979,352.43 | - | - | |||
| Less: Non-operating expenses | 4(49)(b) | (48,368,701.34) | (28,125,481.91) | - | - | |||
| 3. Total profit/(loss) | 3,000,359,268.69 | 2,586,277,310.13 | 110,621,978.32 | (21,437,891.41) | ||||
| Less: Incom e tax (e xpe nses)/gains | 4(53) | (792,827,877.77) | (716,921,280.10) | (27,745,494.59) | 5,359,472.86 | |||
| 4. Net profit/(loss) | 2,207,531,390.92 | 1,869,356,030.03 | 82,876,483.73 | (16,078,418.55) | ||||
| Including: Net loss of the acquiree in a |
business c om bi nationinvolvi ng ent er pri s esunder common controlbefore the combination
| date | 5(2) | (13,494,110.16) | - | Not applicable | Not applicable | |||
| Classified by c ontinuity of operations: | ||||||||
| Net profit from continuing operations | 2,207,531,390.92 | 1,869,356,030.03 | 82,876,483.73 | (16,078,418.55) | ||||
| Net profit from discontinued operations | - | - | - | - | ||||
| Classified by ownership of the equity: | ||||||||
| Attributable to shareholders of the Company | 2,233,730,274.21 | 1,883,626,237.90 | Not applicable | Not applicable | ||||
| Minority interests | (26,198,883.29) | (14,270,207.87) | Not applicable | Not applicable |
CONSOLIDATED AND COMPANY INCOME STATEMENTS (CONT’D)FOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
| For the six months ended 30 June | |||||||||
| Item | Note | 2018 | 2017 | 2018 | 2017 | ||||
| Consolidated | Consolidated | Company | Company | ||||||
| 5. Other comprehensive income, net of tax | (75,253,515.36) | (203,780,765.69) | - | - | |||||
| Attributable to shareholders of the Company, net of tax | (73,649,304.69) | (205,333,136.07) | - | - | |||||
| Other comprehensive income items which | |||||||||
will be reclas sified s ub s eq ue ntly to pr of i t
| or loss | 4(56) | (73,649,304.69) | (205,333,136.07) | - | - | ||||
| Share of the other comprehensive income |
of the investee accounted for usingequit y method whic h wil l be reclassified
| subsequently to profit or loss | 4(56) | 147,032.76 | - | - | - | ||||
| Losses arising from changes in fair value of available-for-sale financial assets | 4(56) | (106,747,986.27) | (114,389,456.99) | - | - | ||||
| Exchange differences on translation of foreign currency financial statements | 4(56) | 32,951,648.82 | (90,943,679.08) | - | - | ||||
| Attribut a ble to mi n orit y sh ar ehol der s , n et of tax | 4(56) | (1,604,210.67) | 1,552,370.38 | - | - | ||||
| 6. Total comprehensive income | 2,132,277,875.56 | 1,665,575,264.34 | 82,876,483.73 | (16,078,418.55) | |||||
| Attributable to shareholders of the Company | 2,160,080,969.52 | 1,678,293,101.83 | Not applicable | Not applicable | |||||
| Attribut a ble to mi n orit y int er est s | (27,803,093.96) | (12,717,837.49) | Not applicable | Not applicable |
| 7. Earnings per share | |||||||||
| Basic earnings per share (RMB Yuan) | 4(54) | 0.51 | 0.45 | Not applicable | Not applicable | ||||
| Diluted earnings per share (RMB Yuan) | 4(54) | 0.51 | 0.45 | Not applicable | Not applicable |
The accompanying notes form an integral part of these financial statements.
| Legal representative | Principal in charge of accounting | Head of accounti ng dep ar t ment |
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
| For the six months ended 30 June | ||||||||
| Item | Note | 2018 | 2017 | 2018 | 2017 | |||
| Consolidated | Consolidated | Company | Company | |||||
| 1. Cash flows from operating activities | ||||||||
| Cash received from sales of goods or rendering of services | 45,407,645,306.84 | 33,970,406,295.28 | - | - | ||||
| Net decrease in loans to customers | 7,006,584.27 | - | - | - | ||||
| Net decrease in balances with central bank | 141,588,022.43 | - | - | - | ||||
| Refund of taxes and levies | 9,679,303.24 | 12,309,769.92 | - | - | ||||
| Cash received relating to other operating activities | 4(57)(a) | 25,316,541,141.96 | 22,249,608,280.36 | 14,266,553.36 | 168,847,439.31 | |||
| Sub-total of operating cash inflows | 70,882,460,358.74 | 56,232,324,345.56 | 14,266,553.36 | 168,847,439.31 | ||||
| Cash paid for purchases of goods and services | (26,969,436,831.51) | (19,333,107,396.95) | - | - | ||||
| Net increase in loans to customers | - | (66,051,713.24) | - | - | ||||
| Net increase in balances with central bank | - | (749,919,472.41) | - | - | ||||
| Cash paid to and on behalf of employees | (10,262,002,533.45) | (7,931,113,777.14) | (1,480,000.00) | (429,942.98) | ||||
| Payments of taxes and levies | (1,737,571,809.78) | (1,270,891,606.40) | (26,068,955.22) | (50,711,100.77) | ||||
| Cash paid relating to other operating activities | 4(57)(b) | (29,632,868,065.04) | (25,075,384,307.29) | (1,663,972.03) | (166,096,064.16) | |||
| Sub-total of operating cash outflows | (68,601,879,239.78) | (54,426,468,273.43) | (29,212,927.25) | (217,237,107.91) | ||||
| Net cash flows from/(used in) operating activities | 4(58)(a) | 2,280,581,118.96 | 1,805,856,072.13 | (14,946,373.89) | (48,389,668.60) | |||
| 2. Cash flows from investing activities | ||||||||
| Cash received from disposals of investments | 600,689,956.83 | 269,285,627.11 | - | - | ||||
| Cash received from returns on investments | 108,483,798.39 | 90,702,315.46 | 1,029,898,124.94 | 800,000,000.00 | ||||
| Net cash received from acquisitions of subsidiaries | 4,663,360.76 | - | - | - | ||||
| Cash received from disposals of fixed assets and other long-term assets | 10,369,624.98 | 4,969,768.25 | - | - | ||||
| Net cash received from disposals of subsidiaries and other business units | - | 6,830,248.45 | - | - | ||||
| Cash received relating to other investing activities | 4(57)(c) | 17,035,932,039.01 | 24,271,377,456.56 | 6,600,000,000.00 | - | |||
| Sub-total of investing cash inflows | 17,760,138,779.97 | 24,643,165,415.83 | 7,629,898,124.94 | 800,000,000.00 | ||||
| Cash paid to acquire fixed assets and other long-term assets | (4,454,366,626.74) | (2,172,339,720.53) | - | - | ||||
| Cash paid to acquire investments | (1,111,402,506.37) | (924,386,905.28) | - | - | ||||
| Net cash paid to acquire subsidiaries | (20,858,612.00) | - | - | - | ||||
| Cash paid relating to other investing activities | 4(57)(d) | (18,300,600,000.00) | (19,225,198,260.25) | (7,000,452,272.25) | - | |||
| Sub-total of investing cash outflows | (23,887,227,745.11) | (22,321,924,886.06) | (7,000,452,272.25) | - | ||||
| Net cash flows (used in)/from investing activities | (6,127,088,965.14) | 2,321,240,529.77 | 629,445,852.69 | 800,000,000.00 | ||||
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS (CONT’D)FOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
| For the six months ended 30 June | ||||||||
| Item | Note | 2018 | 2017 | 2018 | 2017 | |||
| Consolidated | Consolidated | Company | Company | |||||
| 3. Cash flows from financing activities | ||||||||
| Cash received from capital contributions | 131,524,203.19 | 7,967,106.00 | 127,294,205.35 | - | ||||
| Including: Cash received from capital contributions by minority interests of subsidiaries | 4,229,997.84 | 7,967,106.00 | - | - | ||||
| Cash received from borrowings | 4,627,586,778.89 | 3,266,018,613.71 | - | - | ||||
| Cash received relating to other financing activities | 4(57)(e) | 29,180,000.00 | - | - | - | |||
| Sub-total of financing cash inflows | 4,788,290,982.08 | 3,273,985,719.71 | 127,294,205.35 | - | ||||
| Cash repayments of borrowings | (3,671,637,464.24) | (2,731,260,153.99) | - | (20,000,000.00) | ||||
| Cash payments for interest expenses and distribution of dividends or profits | (1,195,067,236.88) | (632,915,174.28) | (970,985,880.70) | (418,377,666.33) | ||||
| Cash payments relating to other financing activities | (559,060.07) | (36,375,018.59) | (376,192.07) | (36,375,018.59) | ||||
| Sub-total of financing cash outflows | (4,867,263,761.19) | (3,400,550,346.86) | (971,362,072.77) | (474,752,684.92) | ||||
| Net cash flows from financing activities | (78,972,779.11) | (126,564,627.15) | (844,067,867.42) | (474,752,684.92) | ||||
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 13,362,514.16 | (4,228,186.36) | (206.91) | (44,492.09) | ||||
| 5. Net (decrease)/increase in cash and cash equivalents | 4(58)(a) | (3,912,118,111.13) | 3,996,303,788.39 | (229,568,595.53) | 276,813,154.39 | |||
| Add: Cash and cash equivalents at the beginning of the year | 16,081,969,440.60 | 6,369,775,801.18 | 1,046,986,313.39 | 58,905,618.31 | ||||
| 6. Cash and cash equivalents at the end of the period | 4(58)(b) | 12,169,851,329.47 | 10,366,079,589.57 | 817,417,717.86 | 335,718,772.70 | |||
The accompanying notes form an integral part of these financial statements.
| Legal representative | Principal in charge of accounting | Head of accounti ng dep ar t ment |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
S.F. HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
| Equity attributable to shareholders of the Company | |||||||||||
| Note | Share capital | Cap ital reserve | Other | ||||||||
comprehensive
| income |
Special
| reserve | Surplus reserve |
Retained
| earnings | Minority interests | Total equity | ||||||||||||||
| Balance at 1 January 2017 | 4,183,678,213.00 | 8,236,698,341.64 | 266,682,686.93 | - | 272,113,202.75 | 7,552,595,222.64 | 44,896,515.29 | 20,556,664,182.25 | ||||||||
| Movement s for t he six mont hs ended 30 June 2017 | ||||||||||||||||
| Total comprehensive income | ||||||||||||||||
| Net pr ofit/(loss) | - | - | - | - | - | 1,883,626,237.90 | (14,270,207.87) | 1,869,356,030.03 | ||||||||
| Other comprehensive income | - | - | (205,333,136.07) | - | - | - | 1,552,370.38 | (203,780,765.69) | ||||||||
| Total comprehensive income | - | - | (205,333,136.07) | - | - | 1,883,626,237.90 | (12,717,837.49) | 1,665,575,264.34 | ||||||||
| Capital contribution and withdrawal by shar ehold ers | ||||||||||||||||
| Ordinary shares invested by shareholders | - | - | - | - | - | - | 11,267,105.99 | 11,267,105.99 | ||||||||
| Others | 4(35) | - | (65,457,773.47) | - | - | - | - | - | (65,457,773.47) | |||||||
| Profit distribution | ||||||||||||||||
| Distribution to shareholders | 4(39) | - | - | - | - | - | (418,367,821.30) | - | (418,367,821.30) | |||||||
| Other movements in capital reserve | 4(35) | - | 152,851,299.29 | - | - | - | - | - | 152,851,299.29 | |||||||
| Safety reserve | ||||||||||||||||
| Appropriation | 4(37) | - | - | - | 2,101,818.70 | - | - | - | 2,101,818.70 | |||||||
| Utilisation | 4(37) | - | - | - | (2,101,818.70) | - | - | - | (2,101,818.70) | |||||||
| Balance at 30 June 2017 | 4,183,678,213.00 | 8,324,091,867.46 | 61,349,550.86 | - | 272,113,202.75 | 9,017,853,639.24 | 43,445,783.79 | 21,902,532,257.10 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONT’D)FOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
| Equity attributable to shareholders of the Company | ||||||||||
| Note | Share capital | Capital reserve | ||||||||
Less: Treasury
| stock | Other |
comprehensive
| income |
General risk
| reserve | Special reserve | Surplus reserve | Retained earnings |
Minority
| interests | Total equity | |||||||||||||||||||
| Balance at 31 December 2017 | 4,411,015,524.00 | 15,872,950,731.03 | - | 219,830,232.83 | 95,759,396.32 | - | 586,501,527.41 | 11,494,769,383.51 | 51,805,434.40 | 32,732,632,229.50 | ||||||||||
| Business combinatio ns involv ing |
enterprises under common
| control | 5(2) | - | 20,820,000.00 | - | - | - | - | - | (5,828,736.29) | - | 14,991,263.71 | |||||||||
| Balance at 1 January 2018 | 4,411,015,524.00 | 15,893,770,731.03 | - | 219,830,232.83 | 95,759,396.32 | - | 586,501,527.41 | 11,488,940,647.22 | 51,805,434.40 | 32,747,623,493.21 | ||||||||||
| Movements for the six months ended 30 June 2018 | ||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||
| Net profit/(loss) | - | - | - | - | - | - | - | 2,233,730,274.21 | (26,198,883.29) | 2,207,531,390.92 | ||||||||||
| Other comprehens ive incom e | - | - | - | (73,649,304.69) | - | - | - | - | (1,604,210.67) | (75,253,515.36) | ||||||||||
| Total comprehensive income | - | - | - | (73,649,304.69) | - | - | - | 2,233,730,274.21 | (27,803,093.96) | 2,132,277,875.56 | ||||||||||
| Capital contribution and withdrawal by shareholders | ||||||||||||||||||||
| Share-based payment in capital contribution by shareholders | 4(35) | 7,788,643.00 | 194,466,894.22 | (202,255,537.22) | - | - | - | - | - | - | - | |||||||||
| Share-based payment included in equity | 9(1) | - | 23,930,346.08 | - | - | - | - | - | - | - | 23,930,346.08 | |||||||||
| Capital contribution by shareholders | - | - | - | - | - | - | - | - | 54,094,150.38 | 54,094,150.38 | ||||||||||
| Others | 4(35) | - | (9,300,026.82) | - | - | - | - | - | - | 9,721,353.92 | 421,327.10 | |||||||||
| Business combinatio ns involv ing |
enterprises under common
| control | - | (37,862,100.00) | - | - | - | - | - | - | - | (37,862,100.00) | ||||||||||
| Profit distribution | ||||||||||||||||||||
| Distribution to shareholders | 4(39) | - | - | - | - | - | - | - | (970,985,880.70) | - | (970,985,880.70) | |||||||||
| Other movements in capital reserve | 4(35) | - | (269,027.26) | - | - | - | - | - | - | - | (269,027.26) | |||||||||
| Safety reserve | ||||||||||||||||||||
| Appropriation | 4(37) | - | - | - | - | - | 2,727,907.70 | - | - | - | 2,727,907.70 | |||||||||
| Utilisation | 4(37) | - | - | - | - | - | (2,727,907.70) | - | - | - | (2,727,907.70) | |||||||||
| Balance at 30 June 2018 | 4,418,804,167.00 | 16,064,736,817.25 | (202,255,537.22) | 146,180,928.14 | 95,759,396.32 | - | 586,501,527.41 | 12,751,685,040.73 | 87,817,844.74 | 33,949,230,184.37 | ||||||||||
The accompanying notes form an integral part of these financial statements.
Legal representative Principal in charge of accounting Head of accounting department
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
S.F. HOLDING CO., LTD.
COMPANY STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
| Note | Share capital | Cap ital reserve | Less: |
Treasury
| stock |
Surplus
| reserve | Retained earnings | Total equity | ||||||||||
| Balance at 1 January 2017 | 4,183,678,213.00 | 38,991,327,794.39 | - | 119,068,202.44 | 805,925,790.17 | 44,100,000,000.00 | ||||||
Movements for the six
| months ended 30 June 2017 | ||||||||||||
| Total comprehensive income | ||||||||||||
| Net loss | - | - | - | - | (16,078,418.55) | (16,078,418.55) | ||||||
| Capital contribution and withdrawal by sharehold ers | ||||||||||||
| Capital contribution by shareholders | 1 | - | (65,457,773.47) | - | - | - | (65,457,773.47) | |||||
| Profit distribution | ||||||||||||
| Distribution to shareholders | - | - | - | - | (418,367,821.30) | (418,367,821.30) | ||||||
| Balance at 30 June 2017 | 4,183,678,213.00 | 38,925,870,020.92 | - | 119,068,202.44 | 371,479,550.32 | 43,600,095,986.68 | ||||||
| Balance at 1 January 2018 | 4,411,015,524.00 | 46,530,971,136.14 | - | 433,456,527.10 | 3,217,052,890.78 | 54,592,496,078.02 | ||||||
| Movement s for t he six mont hs ended 30 June 2018 | ||||||||||||
| Total comprehensive income | ||||||||||||
| Total profit | - | - | - | - | 82,876,483.73 | 82,876,483.73 | ||||||
| Capital contribution and withdrawal by sharehold ers | ||||||||||||
| Share-based payment in |
capital contribution by
| shareholders | 7,788,643.00 | 194,466,894.22 | (202,255,537.22) | - | - | - | ||||||
| Share-based payment included in equity | - | 22,900,543.05 | - | - | - | 22,900,543.05 | ||||||
| Others | - | (77,651.25) | - | - | - | (77,651.25) | ||||||
| Profit distribution | ||||||||||||
| Distribution to shareholders | - | - | - | - | (970,985,880.70) | (970,985,880.70) | ||||||
| Balance at 30 June 2018 | 4,418,804,167.00 | 46,748,260,922.16 | (202,255,537.22) | 433,456,527.10 | 2,328,943,493.81 | 53,727,209,572.85 |
The accompanying notes form an integral part of these financial statements.
| Legal representative | Principal in charge of accounting | Head of accounting department |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
1 General information and historical development
S.F. Holding Co., Ltd. (formerly “Ma'anshan Dingtai Rare Earth & New Materials Co., Ltd.”,hereinafter “S.F. Holding” or “the Company”), formerly known as Ma'anshan Dingtai Science &Technology Co., Ltd., was established by 11 natural persons including Liu Jilu and the Labo urUnion of Ma'anshan Dingtai Metallic Products Co., Ltd. b y cash contribution on 13 May 2003.Initiated by the original shareholders of the Com pany, the Company was formally changed asMa'anshan Dingtai Rare Earth & New Materials Co., Ltd. with a registered capital of RMB 50 millionas approved by the shareh olders’ meeting on 18 October 2007 and the inaugural meeting on 22October 2007.
On 11 January 2010, the C om pany success fully issue d 19,500,00 0 ordi nary shar es at par value ofRMB 1.00 per share at Shenzhen Stock Ex change un der the Regu latory Perm ission [201 0] No. 41as approved by China S ecurities Regulatory Comm ission. The outstanding shar es were listed fortrading at Sh enzhen Stock Exc hange on 5 Febru ary 2010. After t he shares were iss ued, the totalshare capital of the Company was changed to 77,830,780 shares.
Pursuant to the Proposal on the Profit Distribution Plan for 2014 approved by 2014 annualshareholders’ meeting held by the Company on 19 May 2015, the Com pany converted capitalreserve into new shares on the basis of 5 shares for every 10 existing shares, with 77,830,780shares in total at the end of 2014 as bas e. After the conversion, the total share c apital of theCompany was increased by 38,915,390 shares to 116,746,170 shares.
Pursuant to the Proposal on the Profit Dis tribution Plan for 2015 approved by the 2015 annualshareholders’ meeting held by the Company on 17 May 2016, the Company distributed cashdividends of RM B 1.40 (tax includ ed) per 1 0 shar es to all s harehold ers wit h 116,746,170 shares intotal at the end of 2015 as base, an d converted capita l reserve into new sh ares on the basis of 10shares for every 10 existin g shares. After the conversion, the tot al share capital of the Compan ywas increased by 116,746,170 shares to 233,492,340 shares.
Pursuant to the r esolu tion of the 13 th ses sion of the t hird Board of Direc tors of the C om pan y dated22 May 2016 and rele vant resolutions appro ved on the first interim shareholders’ meeting in 2016held by the Company on 30 June 2016, including the Resolution concerning the CompanyQualifying for Criteria for Major Assets Restructuring of L isted Companies, the Resolution onRelated-party Transaction Composed of Major Assets Swap and Issuing Shares to PurchaseAssets an d Rai s e Mat chi ng F und and the Resolu tion o n ‘Major Ass ets Swap and Is s uing Sh ares t oPurchase Assets and Raise Matching Fund and Related-party Transaction Report (Draft) ofMa'anshan Di ngtai Rare Earth & New Materials Co., Ltd.’ and Summaries, the Company conducteda series of major assets restructuring as follows:
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
1 General information and historical development (Cont’d)
(1) Major assets swap
In December 2016, the Com pany swapped all the assets and liab ilities (“exchange-out assets ”) itheld as at 31 December 2015 (“ass essment base date”) for the equivalent p ortion (“exchange-inassets”) of 68.4 0%, 9.93%, 6.75%, 6.7 5%, 6.75%, 1.3 5% and 0.07% of the equities in Shenzh enS.F. Taisen Holdings (Group) Co., Ltd. (formerly “S.F. Holding (Group) Co., Ltd.”, hereinafter“Taisen Holdings”) respectively held by Shenzhen Mingde Holdings Development Co., Ltd.(hereinafter “Mingd e Holdings”), Ningbo Shun Da Feng Run I nvestment Managem ent Partnership(Limited Partnership) (hereinafter “ Shun Da Feng Run”), Jia Qiang Shunfeng ( Shenzhen) EquityInvestment Partnership (hereinafter “Jia Qiang Shunfeng”), Shenzhen Zhao Guang Investment Co.,Ltd. (hereinafter “Zhao Guang Investment”), Suzhou Industrial Park Oriza Shunfeng EquityInvestment Company (hereinafter “Oriza Shunfeng”), Suzhou Gu Yu Qiu Chuang Equity InvestmentPartnership (hereinafter “Gu Yu Qiu Chuang”) and Ningbo Shun Xin Feng He InvestmentManagement Partnership (Limited Partnership) (hereinafter “Shun Xin Feng He”). For thistransaction, t he exchange-out as sets were priced at RMB 796 million and the exc hange-in assetswere priced at RMB 43.30 billion. Pursuant to the second interim shareholders’ meeting in 2016dated 28 December 2016 (hereinafter “restructuring date”), the Company approved and reelected anew Board of Director s, which indicated the com pletion of major assets s wap transaction and thesuccessful listing of Taisen Holdings on Shenzhen Stock Exchange through back door listing.
(2) Issuing shares to purchase assets
In Decem ber 2016, t he Com pany issued 3,95 0,185,873 ordinary shar es (A shares) at par value ofRMB 1.00 per share at an issuing pr ice of RMB 10.76 per share to Mingd e Holdings, Shun DaFeng Run, Jia Qian g Shunf eng, Zhao Guang I nvestm ent, Oriza Sh unfeng, G u Yu Qiu Chuang andShun Xin Feng He to cover the difference of the above swap (RMB 42,504,000,000). Thedifference between the value of shares and the share capital amounting to RMB 38,553,814,120.48was recognised as capital reser ve. The total share ca pital was change d to 4,183,678,213 s hares.After the new shares were issued, Mi ngde Holdings, Shun Da Feng Run, Ji a Qiang Shunfeng,Zhao Guang Investment, Oriza Shunfeng and other shar eholders held 64.58%, 9.38%, 6.37%,6.37%, 6.3 7% and 6.9 2% respectively of the equities in the Company. China Securities RegulatoryComm ission a pproved the above assets rest ructuri ng pla n of t he C om pany on 12 Dec em ber 2016 .The share change ab ove was verified by Price waterhouseCoopers Z hong Tian LLP with a capitalverificat ion report of PwC ZT Yan Zi (2016) No. 1757 issued on 28 Dec ember 2016. T he Com panyregistered the additional 3.95 billion shares at China Securities Depository and the Clear ingCorporat ion Lim ited Shen z hen Branc h on 18 Jan uary 2017 .
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
1 General information and historical development (Cont’d)
(3) Raising matching fund
In July 2017, the Company issue d 227,337,311 ordinary shares (A shares) at par value of RMB1.00 per s hare to spec ific investors thr ough non-publ ic offering at RMB 35.19 per share. The totalfund raised am ounted to RMB 7,999,999,9 74.09. Net of underwriter a nd sponsor ’s fees and othertransactio n costs, the net fund raised am ounted to R MB 7,822,179, 636.78, incl uding an inc rementof share capital of RMB 227,337,311.00 and an increment of capital reserve by RMB7,604,681,212.80. The aforesaid fund was received on 31 July 2017 and verified byPricewat erho us eCo oper s Z hong Tian LLP with a capital verification report of PwC ZT Yan Zi (2017)No. 745 issued.
The Company registered the addit ional shares at China Securities Deposit ory and the ClearingCorporat ion Limited She nzhen Branch on 15 August 2017 . The total share c apital was cha nged to4,411,015,524 shares. Mingde Holdings, Shun Da F eng Run, Jia Qiang Shunfeng, Zhao Gua ngInvestment, Oriza Shunfeng and oth er shareholders held 61.25%, 8.89%, 6. 04%, 6.04%, 6.04%and 11.74% of the equities in the Company respectively.
In 2017, ordinary A shares, which were issued by the Com pany to the incentive recipients of thefirst restricted shares incentive plan (Note 9(2) (a)), amounted to RMB 2,556,661.00 with raisedfunds totalling RMB 74,961,33 1.87, including an increment of share capital of RMB 2,556,661.00and an i nc r ement of capital reserve of RMB 72,404,670.87. The aforesaid fund was received on 29December 2017 and verified by Pricewaterhous eCoopers Zhong Tian LLP with capital verificationreport of PwC ZT Yan Zi (2018) No. 0005 issued. The total share capital increased from4,411,015,524 shares to 4,413,572,185 shares.
In 2018, ordinary A shares, which were issued by the Com pany to the incentive recipients of thesecond res tricted shares incentive plan (N ote 9(2)(a)), amounted to RMB 5, 231,982.00 with raisedfunds totalli ng RMB 127,294,20 5.35, including an increment of s hare capital of RMB 5,231,98 2.00and an increm ent of capital res erve of RMB 12 2,062,223.35. T he aforesaid fund was received on25 June 2018 and verified by Pricew aterhouseCoopers Zhong Tian LLP with a capital verificationreport of PwC ZT Yan Zi (2018) No. 0442 issued. The total share capital increased from4,413,572,185 shares to 4,418,804,167 shares.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
1 General information and historical development (Cont’d)
The approved business scope of the Company and its subsidiaries (hereinafter “the Group”)changes to: assets management, c apital management, investment management ( trusts, financialassets managem ent and security assets m anagement are not allo wed); auto rent (exc luding autorent with dr iver); enterpris e headquarters managemen t; customs brok erage, inspec tion brokerage;investment in industries; domestic trade; mark eting planning; investment consultancy and otherinform ation cons ulta nc y (excludi ng hum an r esourc es i nterm ediar y servic e, sec urities and restr ictedprojects); engagement in the development of network technology, information technolog y andelectronic produc t tech nolo gy and re lated t echno log y services , consu ltanc y and t ransf er of networktechnology, and provision of network information, E-Commerce service platform, businessmanagement, business investment, investment management consultancy, investmentmanagement, enterprise management consulting, etc.; call centre business and information service(both are second type value-added telecommunication services) and road transportation ofcommon cargo; international freight forwarding for air tr ansportation and road transportation ofimported and exported goods or transit goods, including solicitation, booking, shipping,warehousing and packaging; type-1 and type-2 (international and domestic) sales agency of airtransport; common cargo transportat ion, stowage and logistics services; scienc e and technologyinformation consulting, project investment consulting and logistics inform ation consulting; dataprocessing; research and development and sales of communication equipment, and relatedtechnology services (projects subject to approval c ould only be implemented after approval byrelevant authorities), research and development of unmanned aerial vehicle(“UAV”) and spareparts; suppl y chain managem ent and related sup porting services, an d engagement in both exportand import business; development, construction and operation of industrial park; propertymanagement; self-owned property leasing; network marketing promotion; E-Com merce training;information technology outsourcing and information services outsourcing; data mining, dataanalysis and data services; development and application of general software, industry applicationsoftware and embedded sof tware; operation of on-line trading, on -line consulting, on-line auctionand on-line advertising; network business service a nd da tabase service; services in respect ofdevelopment and application of electronic gover nment affairs system; communications industryvalue-added business services; international freight forwarding, domestic and international express(excluding business exclusivel y operated by postal enterprises), transportation of cargo shippingcontainers and lar ge objects, economic and technical consult ing, technical inform ation consulting,and engagement in commercial activities by way of fr anchising; transport services of domestic(including Hong Kong, Ma cau and Taiwan) and international aviation cargo and relate d services,and impor t and export of goods and tec hnolog y; cargo expr ess agent ser vices; inter nationa l freightforwarding (excluding shipping agency business), loading, unloading and handling; internationaland domestic freight forwar ding; technology development of s oftware and hardware for financialpayment systems; internet payment, bank card acquiring, supply chain management; non-securities equity investment activities and relevant consulting services.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
1 General information and historical development (Cont’d)
First-tier and second-tier subsidiaries included in the consolidation scope of the financialstatem ents are deta iled in Note 6( 1). The s ubsidiar ies ne wly included in t he scop e of consoli dationfor the current period are set out in Note 5(1), (2) and (3).
As at 30 Ju ne 2 018, Mi ngd e Hol di ngs was the paren t company a nd u lt imate controlling company ofthe Company.
Thes e financial statem ents w ere author ised for iss ue by the B oard of D irectors of the Com pany on22 August 2018.
2 Summary of significant accounting policies and accounting estimates
The Group determines the specific accounting policies and estim ates based on its features ofproduction and operat ion, primarily compris ing criterion for impairm ent of available-for-sale equit yinstruments (Note 2(9)), the provision for bad debts of loans and receivables (Note 2(10)), valuationof inventor ies ( Note 2( 11)), measurement model of inv est ment properties (Note 2(13)), depreciationof f ixed asset s and am ortisatio n of int angib le assets ( Note 2(1 4), (17)) , criter ion f or capita lisati on ofresearch and developm ent expenditures (Note 2( 18)), timing of revenue r ecognition (Note 2(2 5)),etc.
Details of the Group's critical judgements used in determining significant accounting policies are setforth in Note 2(30).
(1) Basis of preparation
The financial statements are prepared in accordance with the Accounting Stan dard for BusinessEnterprises - Basic Standard, and the specific accounting standards and other relevant regulationsissued by the Ministry of Finance on 15 February 2006 and i n subsequent periods (hereaftercollectively referred t o as “the Accounting Stand ards for Business Enterpr ises” or “CAS”) and thedisclosure requirements in the Preparation Convention of Information Disclosure by Compa niesOffering Sec uri ti es to the P ubl ic N o.1 5 – General Rules on Financial Reporting issued by the ChinaSecurities Regulatory Commission.
The financial statements are prepared on a going concern basis.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the six months ended 30 June 2018 are in compliancewith the Accounting Standards for Business Enter prises, and truly and completely present theconsolidated and com pany financial position as at 30 June 2018 an d their financial perfor mance,cash flows and other information for the period then ended.
(3) Accounting year
The Com pan y’s accounting year starts on 1 January and ends on 31 December.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(4) Recording currency
The Com pany’s recording currency is Renm inbi (“RMB”) . The Com pany’s subsidiaries decid e theirrecording currencies in line with the economic en vironments in which they operate, while thesubsidiaries in Hong Kong and abro ad adopt the currencies other than the Com pany’s recordingcurrency as their recording currencies. The financial statements are presented in RMB Yuan.
(5) Business combinations
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the acquirer in a business combination aremeasured at the carrying amount. If the acquire e is acquired from a third party by the ultimatecontrolli ng party in a prior year, the consideration paid and net ass ets obtained b y the acquirer aremeasured based on the carrying amounts of the acquir ee’s assets and liabilities (including thegoodwill arisi ng from the acquisit ion of the acquiree by the ultimate c ontrolling party) pres ented inthe consolidated financial statem ents of the ultimate c ontrolling party. The difference between thecarrying amount of the net as sets obtained from the combination and the carrying amount of theconsideration paid for the combination is treated as an adjustment to capit al reserve (sharepremium). If the capital reserve (share premium) is not sufficient to absorb th e difference, therem aining balance is adjust ed against retained ear nings . Costs direc tly attrib utable to th e businesscombinat ion are i ncluded in profit or loss in the period in which they are incurred. Transaction costsassociated with t he issue of equit y or debt securities f or the business com bination are included i nthe initially recognised amounts of the equity or debt securities.
(b) Business combinations involving enterprises not under common control
The combination cost and identifiable net assets obtained by the acquirer in a businesscombination are measured at fair value at the acquisition date. Where the combination cos texceeds the acquirer's interest in the fair value of the acquire e's identifiable net assets, thedifference is recognised as goodwill; where the combination cos t is lower than the acquirer'sinterest in the fair value of the acquiree's iden tifiable net assets, the difference is recognised inprofit or loss for the current period. Cost s directly attributable to the combination ar e included inprofit or los s in the period in which they are incurred. Transaction costs associated with the issue ofequity or debt securities for the business combination are included in the initially recognisedamounts of the equity or debt securities.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(6) Preparation of consolidated financial statements
The c onsolidated fin ancial s tatements comprise t he financial stat em ents of the Com pany and all ofits subsidiaries.
Subsidiaries are consolidated from the date on whic h the Group obtains control and are de-consolidated from the date on which such control ceases . For a subsidiary that is acqu ired in abusiness combination involving enterprises under common control, it is included in the consolidatedfinancial statements from the date when it, together with the Com pany, comes under commoncontrol of the ultimate controlling party. The portion of the net profits realised before thecombination date is presented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and theaccounting periods of the Com pany and subsidiaries are inconsis tent, the financial statements ofthe subs idiaries ar e adjusted i n accorda nce with t he acc ounting polic ies and the account ing perio dof the Company. For subsidiaries acquired from business combinations involvin g enterprises notunder common control, the individual financial statements of the subsidiar ies are adjusted basedon the fair value of the identifiable net assets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in th econsolidated financial statements. The portion of subsidiaries’ equity and the portion of subsidiaries’net profit or loss and comprehe nsive income for the period not attri butable to the Company arerecognised as minority interests, minority interest income and total comprehensive incomeattributable to minority shareholders and presented separately in the consolidated financialstatem ents under e quity, net profit and total com prehensi ve incom e respectiv ely. Unrealised profitsand loss es result ing fr om the sa le of ass ets b y the Com pany to its subsi diaries ar e full y eliminate dagainst net pr ofit attributable to owners of the parent. Unreal ised profits and l osses resulting f romthe sale of assets by a sub sidiary to the Com pany are elim inated and a llocated b etween net prof itattributable to o wners of the parent and m inority interest incom e in accordance with the all ocationproportion of the p arent in the subsidiary. Unrealised prof its and losses resulting from the sale ofassets b y one subsidiar y to another are elim inated and alloc ated between net profit attributa ble toowners of the parent and minorit y interest income in accordance with the allocat ion proportion ofthe parent in the selling subsidiary.
If the acc ounting treatm ent of a trans action is inconsistent in the financ ial statements at the Grouplevel and at the Com pany or its subsidiary level, a djustment will be made f rom the perspective ofthe Group.
(7) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand,and short -term and highly liquid in vestm ents that are r eadily con vertible to k nown am ounts of cashand which are subject to an insignificant risk of changes in value.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Foreign currency translation
(a) Foreign currency transactions
Foreign c urrenc y trans act ions ar e trans lated into rec or ding cur renc y usi ng the s pot exc hange r atesand approximate exchange rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in for eign currencies are translated intorecording c urr ency us in g th e s pot exc han ge r ates on t he ba lance s h eet date. Exchange differencesarising from these translations ar e recognised in profit or loss for the current period, except forthose attributable to foreign currency borrowings that have been taken out specifically foracquisition or construc tion of qualifying assets, which are capitalised as part of the cost of thos eassets. Non-monetary items denominated in foreig n currencies that are measured at historicalcosts are translated at the balance sheet date using the spot exchange rates at the date of thetransactio ns . The ef f ec t of exchange rate changes on cash is presented separately in the cash flowstatement.
(b) Translation of foreign currency financial statements
The asset and liability ite ms in the balance sheets for overs eas operations are translated at t hespot exchange rates on the balance sheet date. Among the equity items, the item s other than“Retained e ar ni ngs” are translated at the spot exchange rates of the transaction dates. The incomeand expense items in the income statement of foreign operations are translated at the spotexchange rates of the transaction dates . The differences arising from the above transla tion arerecognised i n other comprehens ive income. T he cash flows of foreign operations are translated atthe spot exchange rates o n the dates of the cash flows. The eff ect of exchange rate changes oncash is presented separately in the cash flow statement.
(9) Financial instruments
(a) Financial assets
(i) Classification of financial assets
Financia l assets are classified into the f ollowing cat egories at initial recog nition: financ ial assets atfair valu e throug h prof it or los s, loans and recei vables, a vailable -for-sale financial assets and hel d-to-m aturit y in vestments. The classification of financial assets depends on the Group’s intention andability to hold the fin ancial assets. During the r eporting period, the Grou p held financial assets atfair value through profit or loss, loans and receivables, and available-for-sale financial assets.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or l oss include financia l assets held for the purpos e ofselling in the short term.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(i) Classification of financial assets (Cont'd)
Loans and receivables
Loans and recei vabl es are non-der ivati ve financ ia l assets with f ixed or deter m inable pa yments t hatare not quoted in an active market. Loans and receivables mainly include various receivabl es,loans and advances, etc.
Available-for-sale financial assets
Available-for-sale fin ancial assets are non-deri vative financial assets that are either designated inthis categor y or not classified in any of the ot her categories at init ial recognition. Available -for-salefinancia l assets are inc luded in other current ass ets in the ba lance sheet if managem ent intends todispose of them within 12 months after the balance sheet date.
(ii) Recognition and measurement
Financia l as sets ar e rec ogn is ed at f air v al ue in t he ba la nce s heet w hen t he Gr oup bec omes a partyto the contr actual provisi ons of the financi al instrument. I n the case of financia l assets at f air valuethrough profit or loss, the related transaction costs incurred at the time of acquisit ion arerecognised in profit or loss for the cur rent period. For other financ ial assets, tr ansaction costs thatare attributable to the acquisition of the financial assets are included in their initially recognisedamounts.
Financial assets at fair value through profit or loss and available-for-s ale financial assets aresubseque ntly measured at fair value. Investments in equity instruments are measured at cost whenthey do not have a quoted mark et price in an active m arket and their fair va lue cannot be reliab lymeas ur ed. Loans an d rec ei vab les ar e subs e que nt l y meas ured a t amortised cost using the effectiveinterest method.
Gains or l osses aris ing from changes in the f air va lue of f inancial ass ets at fair v alue through profitor loss are rec ognised in prof it or loss. Interests and cash dividends received during the period inwhich such financial assets are held, as well as gains or loss es arising from disposal of theseassets are recognised in profit or loss for the current period.
Gains or losses arising from changes in the fair value of available-for-sale fin ancial assets arerecognised d irectly in equit y, except for impairment losses and f oreign exchange gai ns and lossesarising f rom translation of m onetar y financi al assets denom inate d in forei gn curr enc ies. W hen s uchfinancial assets are derecognised, the cumulative gains or losses previo usly recognised directlyinto equity are recycled into profit or loss for the current period. Interest on available-for-saleinvestm ents in debt instrum ents calculated us ing the effective interes t method during the period inwhich such in vestm ents are held and c ash di vidends declare d by the i nvestee o n avail able -for-saleinvestments in equity instruments are rec ognised as investment income, which is recognised inprofit or loss for the period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(iii) Impairment of financial assets
The Gr oup as s ess es the c arry ing amounts of financial assets other than those at fair value throughprofit or loss at each balance sheet dat e. If there is objective evidence that a financial as set isimpaired, an impairment loss is provided for.
The objective evidence tha t a financial asset is impaired refer s to events occurred after the initialrecognitio n of the financ ial assets, which h as an effect on the estim ated cash flows of the financialassets and the effect can be reliably measured by the Group.
The objective evidence that an available-for-sale investm ent in equity instruments is impairedincludes the situation where the fair value of the investment in equity instruments drops significantlyor not temporarily. T he Group assesses each available-for-s ale investment in equity instrumentsseparate ly at each ba lance sheet da te. If the f air value of such investm ent in equi ty instrum ents asat the balance sheet date is lower than its initial investment cost to the extent of over 50%(inclusive) or for a duration of over 1 year (inclusive), it is indicated that the in vestment in equityinstrum ents is im paired; if the fair value of such i nvestm ent in equ ity instrum ents as at the b alanc esheet date is lower than it s initial investment cost to the extent of over 20% (inclusive) but below50%, the G roup will tak e other relevan t factors such as price volat ility into co nsiderations to j udgethe impairment of such investment in equity instruments.
When an im pairment loss on a financia l asset carried at amortis ed cost has occ urred, the am ountof the impairment loss is provided for at the difference between the asset’s carrying amount and thepresent value of its estimated future c ash flows (exclu ding future credit loss es that have not be enincurred). If there is objective evidence th at the value of the fina ncial asset is recovered a nd therecovery is related objectively to an event occ urring after the impairment was recognised, thepreviously recognised impairment loss is reversed and the am ount of reversal is recognised inprofit or loss.
When an impairment loss on available-for-sale financial assets measured at fair value hasoccurred, the cumulative loss arising from the decline in fair value that has been recognised directlyin equity is removed f rom equity and recogn ised as impairm ent loss. For an investm ent in a debtinstrum ent classif ied as availab le-for-s ale on whic h th e impairm ent loss has bee n recognis ed, if , ina subsequent period, its fair value increases a nd the increase can be objectively related to anevent occurring after the impairment loss was recognised, the previously recognised im pairmentloss is reversed through profit or loss for the current peri od. For an investment in an equityinstrument classif ied as available-for-s ale on which the impairm ent loss has been recognised, t heincrease in its fair value in a subseq uent period is r ecognised directly in equity.
If an im pairment loss on an availab le-for-sale fin ancial ass et measured at c ost occurs , the amountof loss is meas ured at the differenc e between the ass et’s carr ying am ount and th e present value ofestimated future cash flows discounted at the current mark et rate of return for a similar financi alasset and rec ognised in pr ofit or loss f or the current per iod. The previous ly recog nised impairm entloss will not be reversed in s ubs eque nt per iods .
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(iv) Derecognition of financial assets
A financial asset is derecognis ed when an y of the below criter ia is m et: (1) the contr actual right s toreceive the cash flows f rom the financi al asset expir e; (2) the fina ncial asset h as been transf erredand the Group transfers substantially all the risks and rewards of ownership of the financial asset tothe transferee; or (3) the financial asset has been transferred and the Group has not retainedcontrol of the fin ancial asset, although th e Group neither transf ers nor retains substant ially all therisks and rewards of ownership of the financial asset.
On derecognitio n of a financial as set, the difference bet ween the carrying am ount and the sum ofthe consideration received and the cumulative changes in fair va lue that had been recogniseddirectly in equity, is recognised in profit or loss.
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: financial liabilitiesat fair valu e through prof it or loss and other financial liabilities. T he financial liabilities of the Groupmainly comprise other financial liabilities, including payables, borrowings, debentures payable, etc.
Payables including notes payable and accounts payable and other payables, are recognisedinitially at fair value and subs equently measured at amortised cost using the effec tive interestmethod.
Borrowings and debentur es payable are recognise d initially at fair value, net of transaction costsincurred, and subsequently measured at amortised cost using the effective interest method.
Other financi al liabilities wit h maturities no m ore than one year (inclus ive) are class ified as currentliabilities. Other financial liabilities with maturities over one year but are due within one year(inclusive) at th e balance sheet date are classified as the current portion of non-current liabi lities.Others are classified as non-current liabilities.
A financial liabilit y is der ecogni s e d or partly der ecognised when the current obligation is dischargedor partly discharged. The difference between the carrying amount of the financial liability or thederecognised part of the financial liabil ity and the co nsideration p aid is recognis ed in profit or lossfor the current period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(c) Determination of fair value of financial instruments
The fair value of a financial instrument that is trade d in an active market is determined at thequoted price in the active m arket. The fair value of a financial instrum ent that is not traded in anactive market is determined by using a valuation technique. When performing the valuation, theGroup a dopted app licable valuation tec hniques with a dequate a vailable da ta and other inform ationsupportable in the circumstances, and selected inputs that have consistent characteristics withassets and liabilities in the trans actions which are also consider ed by other market participants,and gave priorit y to the use of re levant observable in puts. When relevant obs ervable inputs werenot available or feasible to obtain, unobservable inputs were adopted.
(10) Loans and receivables
Loans and receiva bles include notes recei vable and accounts receivable, other receivables, loansand advances, and long-term receivables , etc. Accounts receivabl e arising from sales of goods orrendering of services are initially recognise d at fair value of the contractual payments from thebuyers or service recipients.
(a) Receivables
Receivables with bad debt provision provided on individual basis
W hether the i nd ivid ual amount is significant or not, if there exists objective evidence that the Groupwill not be able to c ollect the amount under the original terms, a provis ion for impairment of tha treceivable is made on individual basis.
Receivables with bad debt provision provided on portfolio basis
Receivables that the related provision for bad debts is not provided on individual bas is areclassified into the follow ing groupings based on their c redit risk characteristics. T he provision forbad debts is determined b ased on the historical loss ex perience for the groupings of r eceivableswith similar credit risk characteristics, taking into consideration of the current circumstances.
| Related party grouping | Due to extremely low historical loss ratio, the proportion of provision is set as 0% |
| Non-related party grouping | The proportion of provision is set as 0.5% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(10) Loans and receivables (Cont’d)
(b) Loans and advances
The provision for bad debts of loans and adva nces is made based on the five -tier classification ofending balanc es as follo ws:
The Group assesses the loans and advances at ea ch balance sheet date. If there is objectiveevidence that it is impaired, the amount of the impairment loss is provided for at the d ifferencebetween its carrying am ount and the present value of its estimated future cash flows (ex cludingfuture credit losses that have not been incurred). Balances for which related provision for bad debtsis not provided on indivi dual basis are classified into several groupings based o n their credit riskcharacteristics. T he provision for bad debts is determined based on the h istorical loss experienc efor the groupings of loans with similar credit risk characteristics (at five tiers), taking intoconsideration of the current circumstances.
(c) Long-term receivables (interest-free loans to employees)
The Group’s long-term receivables (interes t-free loans to employees) are classif ied into differentgroupings based on their credit risk charac teristics and tested for impairment on portfolio basis.Ratios of pr ovision for im pairment are determ ined according to t heir groupings with different creditrisk chara cte ri sti cs.
As the Group estimates that the actua l loss ratio of long-term receivables (inter est-free loans toemployees) will be extremely low, the ratio of the provision is set as 0%.
(11) Inventories
(a) Classification
Inventories comprise lo w-value consumables, raw m aterials in stock, finished goods and aviationconsumables, and are stated at the lower of cost and net realisable value.
(b) Valuation method for inventory issued
Raw materials in stock and finished goods ar e accounted for using the weight ed average m ethodupon issuance. Avia tion consumables are accounted for using the specific-unit-c ost method uponissuance.
(c) Amortisation methods of low-value consumables
Low-value consumables are amortised into expenses in full when issued for use.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Inventories (Cont'd)
(d) Basis for determining the net realisable value of inventories and provision for decline in the value of
inventories
Provisio n for dec line in th e value of inv entories is determ ined at t he exces s am ount of the carryingamounts of the inventories over their net realisable value. Net realisable value is determined basedon the estimated selling price in t he ordinary course of business, less th e estimated costs andestimated costs necessary to make the sale and related taxes.
(e) The Group adopts the perpetual inventory system.
(12) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in itssubsidiaries, and the Group’s long-term equity investments in its joint ventures and associates.
A subsidiary is an investee over which th e Compan y is able to exer cise contro l. A joint venture is ajoint arrangement which is structured through a sepa rate vehicle over which th e Group has jointcontrol together with other parties and onl y has rights to the net assets of the arrangement basedon legal form s, contractual terms and other facts and circum stances. An associate is th e investeeover which t he Group has significant influ ence by part icipating in the f inancial an d operating polic ydecisions.
Investments in subsidiaries are presented in the Company’s financial statements using the costmethod, and are adjusted to the equity method when preparing the consolidated financialstatements, and investm ents in joint ventures and associates are accounted for using the equitymethod.
(a) Determination of investment cost
For long-term equity investments arising from business combination: for long-term equityinvestments arising from business combinatio n involving enterprises under common control, theinitial investment cost shall be the share of the c arrying amount of equity of the acquiree in theconsolidated financial state ments of the ultimate controll ing party as at the combination date; forlong-term equity investments arising from business c ombination involving enterprises not undercommon control, the investment cost shall be the combination cost.
For long-term equity investments acquired not through a business combination: for long-term equityinvestments acquired by payment in cash, the initial investment cos t shall be the purchase priceactually paid; for long-term equity investments acquired by issuing equit y securities, the initialinvestment cost shall be the fair value of the equity securities issued.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Long-term equity investments (Cont’d)
(b) Subsequent measurement and recognition methods of gains and losses
Long-term equity investments accounted for using th e cost method are measured at the initialinvestment cost. Cash dividend or profit distribution dec lared by an investee is recognised asinvestment income in profit or loss for the current period.
For long-term equity investments that are accounted for using t he equity method, where t he initialinvestm ent cos t exc eeds the Gr oup’s share of t he fair va lue of the inv estee’s iden tifiab le net ass etsat the time of acquisition, the investm ent is initially measured a t cost. Where the initial in vestmentcost is less tha n the Group’s share of the fair value of the investee’s identif iable net assets at t hetime of acquisition, the d ifference is included in profit or los s for the curr ent period a nd the cost ofthe long-term equity investment is adjusted upwards accordingly.
Under the equity method, the Group recognises the investment income according to its share of netprofit or los s of the investe e. The Group discont inues recognis ing its share of the net losses of aninvestee after the carr ying amounts of the long-term equity investm ent together with any long-terminterests th at in subs tance f orm part of the inves tor ’s net invest ment in the inv estee are red uced tozero. However, if the Group has obligations for additional losses and the criteria with respect torecognitio n of provis ions are s atisfied, the G roup conti nues recogn ising the es timated loss es that itneeds to bear. The changes of the Group’s share of the investee’s equity other than those arisingfrom the net profit or loss, other com prehensive incom e and profit appropriation, are rec ognised inthe Group’s capital reserve and the carrying amounts of the long-term equity investm ent areadjusted accordingly. The carrying amount of the investment is reduced by the Group’s share of theprofit distribution or cash dividends declared by an investee. The unrealised profits or losses arisingfrom the transactions between the Group and its investees are eliminated in proportion to th eGroup’s equity interest in the investees, based on which the investm ent gain or losses arerecognised. For the loss on the intra-group transaction amongst the Group and its inves teesattributable to asset impairment, any unrealised loss is not eliminated.
(c) Basis for determining existence of control, joint control, significant influence over investees
Control means having power over an investee, enjoying variable returns through involvement inrelevant ac tivities of the investee, and being able to im pact the am ount of such var iable returns b yusing the power over the investee.
Joint control is the agreed sharing of c ontrol over an arrangement, and the decision of activitiesrelating to such arrangement requires the unanimous consent of the Grou p and other partiessharing control.
Significant influ ence is the power to partic ipate in making the d ecisions on financial and operatin gpolicies of the investee, but is not control or joint control over making those policies.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Long-term equity investments (Cont’d)
(d) Impairment of long-term equity investments
The carrying amounts of long-term equity investments in subsidiaries, joint ventures and associatesare reduced to the recover able amounts when the recoverab le amounts are below their car ryingamounts (Note 2(20)).
(13) Investment properties
Investment properties , including land use rights t hat have already been leased out, buildings thatare held for t he purpos e of leas ing and bu ildings t hat are be ing c onstruc ted or develo ped f or f utureuse for leasing, are m easured initially at cost. Subsequent ex penditures incurred in rel ation to aninvestm ent propert y are included i n the cost of the inves tment pr operty when it is probable t hat theassociated economic benefits will flow t o the Group and their costs can be reliabl y measured;otherwise, the expenditures are recognised in profit or loss for the period in which the y areincurred.
The Gr oup adopts the cost m odel f or subsequent m easurem ent of investm ent proper ties. Bu ildin gsand land use rights are de preciated or amortised to t heir estimated net residual values over theirestimated useful lives. The estimated useful lives, the estimated net resi dual values that areexpressed as a percentage of cost and the an nual depreciat ion rates of inv estment propert ies areas follows:
| Estimated useful |
lives
residual va lues
| Estimated net | Annual |
depreciation/
| amortisation rates | |||
| Buildings | 10 - 50 years | 5% | 9.50% - 1.90% |
| Land use rights | 39.75 - 50 years | 0% | 2.52% - 2.00% |
The investment propert y’s estimated useful life, net re sidual value and depreciat ion (amortisation)method applied are reviewed and adjusted as appropriate at each year-end.
An investment property is derecognised on disposal or when the investment property ispermanently with drawn from use and no future econom ic benefits are expected from its disposal.The net amount of proceeds f rom sale, transfer, retirement or damage of an investm ent propertynet of its carrying amount and relate d taxes and expenses is recognised in pro fit or loss for thecurrent period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(14) Fixed assets
(a) Recognition and initial measurement of fixed assets
Fixed ass ets compris e buildings, m otor vehicles, c omputers a nd electronic e quipm ent, aircraft andaircraft engines, rotables and high-value aircraft maintenance tools, machinery and equipment,office equipment and other equipment.
Fixed ass ets are recognis ed when it is probable that t he associated economic benef its will flow t othe Group and t he related cost can be reliably measur ed. Fixed assets pur chased or constructedare initially measured at cost at the time of acquisition.
Subseque nt expe nditures incur red f or a fix ed asset are inclu ded in th e cost of the f ixed ass et whenit is probab le that the assoc iated economic benefits will f low to the Group and th e related cost canbe reliably measured. The carrying amount of the r eplaced part is derecognised. All the othersubsequent expenditures are recognised in profit or loss for the period in which they are incurred.
(b) Depreciation method for fixed assets
Except for replacement parts for overhaul of engine body, fixed assets are depreciated using thestraight-line method to allocate the recorded amount of the as sets to their estimated residualvalues over their estimated useful lives. For the fixed assets that have been provided forimpairment loss, the related depreciation charge is prospectively determ ined based upon theadjusted carrying amounts over their remaining useful lives.
The estimated useful lives and the estimated net residual values expressed as a percentage ofcost and the annual depreciation rates of fixed assets are as follows:
| Estimated useful lives | Estimated net residual va lues | Annual depreciation rates | |
| Buildings | 10 - 50 years | 5% | 9.50% - 1.90% |
| Motor vehicles (excluding electromobiles) | 4 years | 5% | 23.75% |
| Motor vehicles (electromobiles) | 2 years | 5% | 47.50% |
| Machinery and equipment |
(excluding automatic sorting
| equipment imported from abroad) | 10 years | 5% | 9.50% |
| Machinery and equipment |
(automatic sorting equipment
| imported from abroad) | 15 years | 5% | 6.33% |
| Computers and electronic equipment | 3 years | 5% | 31.67% |
| Aircraft and engine bodies | 10 years | 5% | 9.50% |
| Replacement parts for overhaul of aircraft fuselage | 1.5 - 12 years | 0% | 66.67% - 8.33% |
| Rotables | 10 years | 5% | 9.50% |
| High-value aircraft maintenance tools | 5 years | 5% | 19.00% |
| Office equipment and other equipment | 5 years | 5% | 19.00% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(14) Fixed assets (Cont'd)
(b) Depreciation method for fixed assets (Cont'd)
Replacement parts for ove rhaul of engines are depreciated using the units-of-production methodand taking the expected usable recurring number as the unit of production.
The es timated useful life/expected usable recurring number and the estimated net residual value ofa fixed asset and the depreciation method applied to the asset are r eviewed, and adjusted asappropriate at each year-end.
(c) The carrying amounts of fixed assets are reduced to the recoverable amounts when the
recoverable amounts are below their carrying amounts (Note 2(20)).
(d) Basis for identification of fixed assets held under finance leases and related measurement
A finance lease is a lease that transfers substantially all the risks and rewards incidental toownership of an asset. The leased as set is recognised at the lower of the fair value of the leasedasset an d the present val ue of the m inim um lease p ayment s. T he diff erence bet ween the rec orde damount of the leased as set and the minimum lease payments is accounted for as unrecognisedfinance charge (Note 2(28)(b)).
Fixed ass ets held und er a finance l ease is deprec iated on a bas is consistent with the depr eciationpolicy adopted for fixed assets that are self-owned. W hen a leased asset can be reasonablydeterm ined that its owner ship will b e trans fer red at the e nd of the l ease term , it is depreci ated overits estimated useful life; otherwise, the leased asset is deprec iated over the shor ter period of thelease term and its estimated useful life.
(e) Disposal of fixed assets
A fixed asset is der ecognised on disposal or when no future ec onomic benef it is ex pected from itsuse or dispos al. The am ount of pr oceeds fr om disposals on sale, transf er, retirement or damage ofa fixed asset net of its carrying am ount and related taxes and expenses is reco gnised in profit orloss for the current period.
(15) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction c osts,installation co sts, borrowing costs that are eligible for capitalis ation and other costs necessar y tobring the fixed ass ets ready for their intended use. Construction in progress is transferr ed to fixedassets when the assets are ready for their intended use, and depreciation begins from the followingmonth. The carrying amount of construction in progres s is reduced to the recoverable amountwhen the recoverable amount is below its carrying amount (Note 2(20)).
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Borrowing costs
The Group’s borrowing costs that are directly attributable to the ac quisition and construction of afixed asset that needs a substantially lon g period of time for its intended use commenc e to becapitalised and recorded as part of the cost of the asset when expenditures for the asset andborrowing costs have been incurred, a nd the activities rela ting to the acquisition and constructionthat are n ec es sary to prepare the asset for its intended use have commenced. The capitalisation ofborrowing costs ceases when the asset under ac quisition or construction becomes ready for itsintended use and the borrowing costs incurr ed thereafter are recognised in profit or loss for thecurrent period. Capitalisation of borrowing costs is suspended during periods in which theacquisition or construction of a fixed asset is interrupted ab normally and the interruption lasts f ormore than 3 months, until the acquisition or construction is resumed.
For the specific borrowings obtained f or the acquisition or construction of an as set qualifying forcapitalisation, the am ount of borrowing costs eligible for capitalisation is determined by deduct ingany interest income earned from depositing the unused specific borrowin gs in the banks or anyinvestment income arising on the temporary investment of those borrowings during thecapitalisation period.
For general borrowings utilised for the acquisition and construction of an asset qualifying forcapitalisation, the capitalised amount of the gen eral borrowings is determined by the weightedaverage of the excess of acc umulated capital expenditure over c apital expenditure of the specialborrowings multiplied by the weighted average effective interest rate of the utilised gener alborrowings. The effective interest rate is the interest rate at which the future cash flows of theborrowings over the estimated life or a shorter applicable per iod are discounted into the initialrecognised amount of the borrowings.
(17) Intangible assets
Intangible assets include software, land use rights, trademark rights and patents, and aremeasured at cost.
(a) Software
Software is amortised on the straight-line basis over 5 to 10 years.
(b) Land use rights
Land use rights are amortised on the straight-line basis over 39.75 to 50 years.
(c) Trademark rights
Trademark rights are amortised on the straight-line basis over 5 to 10 years.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(17) Intangible assets (Cont’d)
(d) Patents
Patents are amortised on the straight-line basis over 5 to 10 years.
(e) Periodical review of useful life and amortisation method
For an intangible ass et with a finite useful l ife, review of its useful l ife and amortisation method isperformed at each year-end, with adjustment made as appropriate.
(f) Impairment of intangible assets
The carrying amounts of intangible assets are reduced to the recoverab le amounts when therecoverable amounts are below their carrying amounts (Note 2(20)).
(18) Research and development
The expend iture on an inte rnal research and developm ent project is classif ied into expenditure onthe research phase and ex penditure on the development ph ase based on its nature and whet herthere is material uncertainty th at the research and development activi ties can form an intangibleasset at end of the project.
Expenditure on the research phase is recognised in profit or loss in the period in which it isincurred. Expenditur e on the de velopm ent phase is c apitalise d onl y if all of the fol lowing condi tionsare satisfied:
? it is technically feasible to complete the intangible asset so that it will be available for use
or sales;
? management intends to complete the intangible asset, and use or sell it;? it can be demonstrated how the intangible asset will generate economic benefits;? there are adequate technical, financial and other resources to complete the development
and the ability to use or sell the intangible asset; and
? the expenditure attributable to the intangible asset during its development phase can be
reliably measured.
Other develo pment expend itures that do not m eet the condit ions above are r ecognised in prof it orloss in the peri od in which they are i ncurred. Research a nd development expen ditures previouslyrecognised as expenses are not recognised as an asset in a s ubsequent period. Capitalisedexpenditur e on the d evelopm ent phase is pr esented as res earch and dev elopm ent expenditur es inthe balance sheet and transferred to intangible assets at the date when the as set is ready for itsintended use.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Long-term prepaid expenses
Long-term prepaid expenses include settling-in allowance and introduction fee for pilots, theexpenditur e for im provements to fixed ass ets held un der operatin g leases, an d other expe ndituresthat have been incurred b ut should be recognised as ex penses over more than one year in thecurrent and subsequent periods. Long-term prepaid expenses are amortised on a straight-linebasis over the expected benefic ial period (2 to 12 years) and are pr esented at ac tual expenditurenet of accumulated amortisation.
(20) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, investmentproperties measured usi ng the cost model and long-ter m equity investments in subsidi aries, jointventures and associates ar e tested for im pairment if there is an y indication tha t the assets m ay beimpaired at t he balance sheet dat e; intangible assets not re ady for th eir in tended use are tes ted atleast annually for impairment, irrespective of whether there is any indication that it may beimpaired. If the resu lt of the impairment tes t indicates that the reco verable amount of an as set isless tha n i t s c ar r ying amount, a provision for impairment and an impairment loss are recognised forthe am ount b y which t he asset’s carrying amount exceeds its recoverable amount. The recoverableamount is the higher of an asset’s fair value less costs to sell and t he present value of the futur ecash flows expected to be derived from the asset. Provision for asset impairment is determined andrecognised o n individual as set basis. If it is not possible to estimate the r ecoverable am ount of anindividual asset, the recoverable amount of a group of assets to which the asset belongs isdeterm ined. A group of assets is the smallest group of assets that is able to ge nerate indep endentcash inflows.
Goodwill that is separately presented in t he financial statements is tested at least annu ally forimpairment, irrespective of whether there is any indic ation that it may be impair ed. In conductingthe test, t he carryin g amount of goodwill is allocated t o the relat ed asset groups or groups of assetgroups which are expected to b enefit from the synergies of the b usiness com bination. If the res ultof the test indicates that the recoverable am ount of an asset group or a group of asset groups,including the allocated go odwill, is lower than its carr ying amount, the correspondi ng impairmentloss is recognised. The impairm ent loss is first deduc ted fr om the carr ying amount of goodwill thatis allocated to the asset group or group of asset groups, and then deducted from the c arryingamounts of other assets within the asset group or group of asset groups in proportion to thecarrying amounts of assets other than goodwill.
Once the a bo ve impai r men t los s i s r ecog nis ed , i t wil l n ot b e rev er s ed f or t he valu e r ec over ed in thesubsequent periods.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(21) Employee benefits
Employee benefits refer to all forms of considerati on or compensation given by the Group inexchange for ser vice rendered by emplo yees or for termination of em ployment relationship, whichinclude short-term employee benefits, post-em ployment benefits, termination benefits and otherlong-term employee benefits.
(a) Short-term employee benefits
Short-term employee benefits include employee wages or salaries, bonus, allowances andsubsidies , s taff welfar e, pr e miu m s or c ontr ibut ions o n medical insurance, work injury insurance andmaternity insurance, housing funds, union cos ts and employee education costs. The emplo yeebenefit liabilities are recognised in the accountin g period in which the service is rendered by theemployees, with a corr esponding charge to the profit or loss for the current period or the cost ofrelevant assets. Employee benefits which are non-monetary benefits are measured at fair value.
(b) Post-employment benefits
The Group classifies post -employment benefits plans int o defined contribution plans and definedbenefit pl ans . Def in ed c o ntr ibut io n p lans ar e pos t -empl o yment ben efi t pl ans u nder which the Grouppays fixed contributions into a separate fund and will have no obligation to pay furthercontributions; and defined benefit plans are post-employment benefit pla ns other than definedcontribution plans. During the reporting period, the Group's post-employment benefits mainlyincluded basic pension insuranc e and unemployment insurance, both of which belong to definedcontribution plans.
Basic pension insurance
The Group’s employees participate in the basic pension plan set up and administered by localauthorities of Ministry of Hum an Resource and Social Secur ity. Monthly payments of premiums onthe pensions are calculated according to local regulations for pension plan. When employees retire,the local labour and social secur ity authority is obliged to pay the b asic pensions to them. Theamounts based on the abo ve calculations are recogni sed as liabilities in the accounting period inwhich the servic e has been rendered by the employees, with a corresponding c harge to the profitor loss for the current period or the cost of relevant assets.
(c) Termination benefits
The Group provides compensation for term inating the employment relationship with em ployeesbefore the end of the employment contracts or as an offer to encourage employees to acceptvoluntar y redund anc y before the en d of the em plo yment c ontracts . T he Group rec ognises a liabi lityarising from compensatio n for termination of the em ployment relationship with em ployees, with acorres ponding charg e to prof it or loss f or the curr ent period at the ear lier of the following dat es: 1)when the Group cannot unilaterally withdraw an emplo yment termination plan or a curtailmentproposal; 2) when the Group r ecognises costs or expenses r elated to a restruc turing that inv olvesthe payment of termination benefits.
The termination benefits expected to be paid with in one year since the balance sheet date areclassified as current liabilities.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(21) Employee benefits (Cont'd)
(d) Employee incentives
The Group pr ovides incentive plans for on-the-j ob employees wh o comply with cer tain conditions,and makes payments based on the schedule. Provisions for employee incen tives are initiallymeasured at the best estimate necessary to settle the present obligation, and expensed asincurred. T he Grou p int egrates se parat ion rat e, tim e value of m one y and ot her f ac tors int o ac countat initia l measurement. Where the effect of the time value of money is material, the best estimate isdeterm ined b y discoun ting the relate d fut ure cas h outf lo ws. The inc rease in the disc ounted am ountof t he provision arising from passage of time is ex pensed as incurred. The carrying amount ofprovisions f or employee incentives is re viewed at each balance sh eet date and adjusted t o reflectthe current best estimate.
(22) Dividend distribution
Cash d ividends are rec ognised as liabilities i n the period in which t he dividends are appro ved bythe shareholders’ meeting.
(23) Provisions
Provisions are recognised when the Group has a present obligation, it is probable that an outflow ofeconom ic benefits w ill be required to s ettle the obligat ion, and the am ount of the obl igation can bemeasured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the relatedpresent ob ligati on. F ac tors s ur roundi ng a c ont ing ency, such as the r is ks, uncertainties and the timevalue of money, are taken into account as a whole in reachi ng the best estimate of a provision.Where the effect of the time value of money is material, the best estimate is determ ined bydiscounting the related future cash outflows. The increase in the discounted amount of theprovision arising from passage of time is recognised as interest expense.
The carrying amount of provisions is reviewed at eac h balance sheet date and adjus ted to reflectthe current best estimate.
The provisions exp ected to be settled withi n one year since the bala nce sheet date are classif iedas current liabilities.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) Share-based payments
(a) Categories of share-based payments
A shar e-based payment is a transaction in which an enterprise gr ants equity instruments orassumes liabilities that are determined based on equity instruments, in exch ange for servicesrendered b y em ployees or another part y. Equity instruments include th e equit y ins trum ents that arelinked to the enterprise, th e parent company of the enterprise or another accounting entity withinthe same group. Share-based payments comprise equity-settled and cash-settled payments.
(b) Basis for determining the best estimate of exercisable equity instruments
At each balance sheet date in the vesting period, the Group would make best estimate in
accordance with the newly acquired information such as changes in the number of employeesentitled to equity instruments , and amend the number of exercisab le equity instruments. On theexercisable date, the ultim ate estimated number of exercisable equity instruments coincides withthe actual number.
(c) Accounting treatment of implementation of share-based payments
(i) Equity-settled share-based payment
The equity-settled share-based payment where the Group grants shares or other equity
instruments as a consider ation in return for services, is measured at the fair value of the equityinstrum ents at the grant da te. Where the shar e-based pa yment is not exercis able until the ser vicein the vesting period is completed or specified performance conditions ar e met, then at eachbalance sheet date within the vesting period, th e service obtained in the current period shall beincluded in relevant cost or expenses and in capital reserve at th e fair value of the equityinstruments at the grant date based on the best es timates of the quantity of exercisable equityinstruments made by the Group, in accordance with latest changes in the number of exercisableemployees and subsequent information.
(ii) Cash-settled share-based payment
The cash-settled share-based payment where the Group calculates and determines the cash
payment or any other asset obligation on the basis of shares or other equity inst ruments in returnfor services, is measured at the fair value of the liabilities calculated based on relevant equit yinstruments. Where the share-based p ayment is not exercisable until the ser vice in the vestingperiod is complete d or specif ied perform ance conditio ns are m et, then at eac h balance s heet datewithin the vesting period, the service obt ained in the current period shall be included in c ost orexpenses an d in liabilities at t he fair value of t he Group’s liabilities bas ed on the best estim ates ofthe quant ity of exer cisable equit y instrum ents made by the Gr oup. At eac h balance s heet date andsettlement date bef ore relevant liabilities are settled, the fair value of the liabiliti es is remeasuredand the changes are recognised in profit or loss.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Revenue recognition
The amount of revenue is determined in accordance with t he fair value of the considerationreceived or receivable f or the sales of goods and ser vices in the ordinary cours e of the Group’sactivities. Revenue is shown net of discounts and returns.
Revenue is recognised wh en the econom ic benefits as sociated with the tr ansaction will flow to theGroup, the related revenue can be reliably measured, and the specific criteri a of revenuerecognition have been met for each type of the Group’s activities as described belo w. Theprinciples are set out below:
(a) Rendering of services
Revenue from express delivery services includes rev enue from inbound and outbound expressdelivery services; revenue from international freight forwarding agency services; revenue fromdomestic and international transport services of aviation cargoes; and revenue from expressdelivery agency s ervices. Besides the aforesaid revenue, the Grou p’s revenue from rendering ofservices includes revenue f rom communication service and maintena nce service. Revenue fromrendering of services is rec ognised when the ser vice is com pleted and the right to collect paymentis obtained.
(b) Sales of goods
Revenue f rom the s ales of goods is rec ognised w hen signif icant ris ks and r ewards of ownership ofthe goods are transferred to the buyer, the Group retains neither continuing managerialinvolvement to the degree usually associated with owner ship nor effective control over the go odssold, and the economic benefit associated with the tr ansaction will flow to the Group and therelevant revenue and costs can be measured reliably.
(c) Interest income
The amount of interest income is measured on the basis of tim e proportion and the effectiveinterest rate.
(26) Government grants
Government grants refer to the monetar y or non-m onetary assets obtained b y the Group from thegovernment, including tax return, financial subsidy, etc.
Government grants are re cognised when the grants can be received and the G roup can complywith all attached con ditions. If a government grant is a monetary asset, it will be m easured at theamount received or rece ivable. If a gov ernment grant is a non-m onetary asset, it w ill be measuredat its fair value. If it is unabl e to obtain its fair value reliabl y, it will be measured at its nominalamount.
Government grants related to assets refer to the government grants which are obtained b y theGroup for the purposes of purchase, construction or acquisition of the long-term assets.Government grants related to income refer to the go vernment grants other than t hose related toassets.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(26) Government grants (Cont'd)
Government grants re lated to assets are recorded as deferred income and rec ognised in profit orloss on a systemic basis over the useful lives of the assets. Government grants measured atnominal amount are recognised in profit or loss for the current period. Government grants related toincome that compensate the future costs, expenses or losses are recorded as deferred income andrecognised i n profit or loss , or deducted agai nst related cos ts, expenses or l osses in reporting t herelated expenses; government grants related to income that com pensate the incurred costs,expenses or l osses are r ecogn ised in prof it or loss, or deduc ted agains t rel ated c os ts, expe nses orlosses directly in current period. The G roup applies the presentation method c onsistently to thesimilar government grants in the financial statements.
Government grants related to daily corporate activities are included in other income or deductedagainst related costs, expenses or losses direc tly in current period in accordance with businessnature. Government grants not related to daily corporate activities are included in non-operatingincome or expenses.
Policy-based loans with prime rate to the Group are recorded at actual am ount of borrowingreceived, and related borrowing costs are calculate d with borrowing principal and policy-basedprime rate. Financial discounts directly received by the Group are deducted against relatedborrowing costs.
(27) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated an d recognised based on thedifferences arising between the tax bases of assets and liabi lities and their carrying amounts(tempor ary differences). Def erred tax asset is recogn ised for the deduc tible tax los ses that can becarried forward to s ubsequent years f or deduction of the tax able profit in accordanc e with the taxlaws. No deferred tax liability is recognised for a temporary difference arising from the initialrecognition of goodwill. No deferred tax asset or deferred tax liability is re cognised for thetemporary differences resulting from the initial recognition of assets or liabilities due to atransaction other than a business com bination, which affects neither accounting prof it nor taxableprofit (or deductible tax los ses). At the balance sheet date , deferred tax assets and defer red taxliabilities are m easured at the tax rates that are exp ected to apply to the period when t he asset isrealised or the liability is settled.
Deferr ed tax assets are only recognised for deductible temporary differences, deductible tax lossesand tax credits to the extent that it is probable that t axable profit will be available in the futureagainst which the deductible temporary differences, deductible tax losses and tax credits can beutilised.
Deferred tax liabilities are recognised for temporary differences arising from investments insubsidiar ies, associates and joint ve ntures, excep t where the Group is able to contr ol the timing ofreversal of the temporary difference, and it is probable that the temporary difference will not reversein the foreseeable future. When it is probable that the temporary differences arising frominvestm ents in s ubsidiar ies, as sociates and joint v entur es will be r evers ed in the f oreseeab le futur eand that the taxable prof it will be available in the future against which the temporary differencescan be utilised, the corresponding deferred tax assets are recognised.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(27) Deferred tax assets and deferred tax liabilities (Cont’d)
Deferred tax assets and deferred tax liabilities are offset when:
? the deferred taxes are related to the same tax payer within the Group and the same
taxation authority; and,
? that tax payer within the Group has a legally enforceable right to offset current tax assets
against current tax liabilities.
(28) Leases
A finance lease is a lease that transfers substantially all the risks and rewards incidental toownership of an asset. An operating lease is a lease other than a finance lease.
(a) Operating leases
Lease payments under an operating lease are recognised on a straight-line basis over the period ofthe lease, and ar e e ith er c apita lised as part of the cost of related assets, or charged as an expensefor the current period.
Lease income under an operating lease is recognised on a straight-line basis over the period of thelease.
(b) Finance leases (as the leasee)
The leased asset is recog nised at the lower of the fair valu e of the leased asset and the pr esentvalue of the minimum lease payments. T he difference bet ween the record ed amount of the leasedasset and the minim um lease payments is account ed for as unrecognised f inance charge and isamortised using the eff ective interest method over th e period of the lease. A long-term payable isrecorded at the amount equal to the minimum lease pa yments less the unrecognised financecharge.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(29) Segment information
The Group identifies operating segments based on the internal organisation structure,management requirements and internal reporting s ystem, and discloses segment information ofreportable segments which is determined on the basis of operating segments.
An oper ating segm ent is a com ponent of th e Group t hat sat isfies all of the follo wing condi tions: (1)the component is able t o earn revenue and incur exp enses from its ordinary activ ities; (2) whoseoperating results are regularly reviewed b y the Group’s management to make decisions aboutresources to be allocated to the segment and to assess its perf ormance, and (3) for which theinformation on f inancial position, o perating results an d cash flows is avai lable to the Group. If twoor more operating segm ents have similar economic characteristics and satisf y certain conditions,they are aggregated into one single operating segment.
(30) Critical accounting estimates and judgements
The Group continually evaluates the critical acco unting estimates and key judgements appliedbased on historical exper ience and other factors, inc luding expectations of f uture events that arebelieved to be reasonable.
(a) Critical accounting estimates and key assumptions
The key assumptions of critical accounting estimates that have a sign ificant risk of causing amat erial adjus tment to the carrying amounts of assets and liabilities within the next accounting yearare outlined below:
(i) Deferred tax assets
Deferred tax assets are recognised for the deductible tax losses and deductible temporarydifferences that can be carr ied forward to subsequent years to the extent that it is probable thattaxable profit in the f uture will be available a gainst which the deduc tible tax losses and deduc tibletemporary differences can be u tilised. Whether to recognise t he deferred tax assets arisin g fromdeductible tax losses and deductible temporary differences l argely depends on the judgem ent ofmanagement on: (i) whether the accumulated deduc tible tax losses and deductible temporarydifferences in prior years are still effective, and (ii) whether sufficient taxable inc ome that can beused to deduct de ductible tax losses and deductible tem porary differences can be obtai ned in thefuture period. Where there is a differ ence between the situation and the original estimate, suchdifference will affect the Group’s deferred tax assets and income tax expenses in the future period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements (Cont’d)
(a) Critical accounting estimates and key assumptions (Cont’d)
(ii) Employee incentives
Provisions for employee incentives are made and long-term liabilities relating to emplo yeeincentives are recognised bas ed on the comprehensive asses sment of actual departure for pas tfew years and the time value of money of the m arket. Where the actua l separation rate a nd timevalue of money are diff erent fr om existing estim ates of m anagement, s uch differenc e will affect theGroup’s employee incentive expenses in the future period.
(iii) Provision for bad debts of loans and receivables
As descr ibed in N ote 2(10) , recei vables ( including notes receivable and accou nts r eceivable, otherreceivables and long-term receivables ) are assessed for impairment at the e nd of each period.Judgements and assessments are made by management taking the customer’s credit status, credithistory, operating status and market conditions into consideration. Where there is a differencebetween the actual bad debts and the original estimate, such difference will affect the G roup’sprovision for bad debts of the above assets in the future period.
(iv) Risk of impairment on long-term assets
As described in Note 2(20), goodwill, fixed assets with impairment indic ation, construction inprogress, intangible assets, investm ent properties measured using cost model, long -term equityinvestments and other long-term assets are tested for impairment annually at the end of each year.
When assessing whether the above assets are impaired, management m ainly evaluates andanalyses: (1) whet her ev ents affec ting asset im pairm ent occur red; (2) whether th e prese nt value ofexpected cash flows arising from the continuing use or disposal of the asset is lower than itscarrying amount; (3) whether the significant assumptions used in estim ating the present value offuture cash flows are appropriate.
Relevant assumptions adopted by the Group to determine impairment, e.g. changes inassumptions on discount rate and growth rate used to c alculate the present value of future cashflows, may have material impact on the pres ent value used in the impairment test, and causeimpairment in the abo ve-mentioned long-term assets of the Group.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements (Cont’d)
(a) Critical accounting estimates and key assumptions (Cont’d)
(v) Determination of fair value of financial instruments by valuation techniques
The fair value of a financial instrument that is not tr aded in an active market is determined byvaluation techniques. Valuation techniques primarily refer to market approach and incomeapproach, including reference to t he prices used in recent orderly transac tions between marketparticipants, ref erence to the current fair value of oth er financial instruments tha t are substantiallyidentical, discounted cash f low anal ysis, option pricing models , etc. Obser vable mark et inform ationis applied in valuation techniques to the extent possible. When observable market information isnot availa ble, the manage ment will mak e estimate of significan t unobservabl e information inclu dedin the val uation m ethod. Differ ent valuation tec hniques or inputs ma y lead to signif icant differ encesbetween fair value estimates.
(b) Critical judgements in applying the accounting policies
(i) Judgement on significant influence of the Group over investees
The investees over whic h the Group has significant in fluence are accounted for under the equitymet hod. In judging the s ignificant inf luence o ver an inves tee, the m anagem ent considers bas ed onone or more of the following circumstances and all facts and circumstances: (1) the shareholding inthe investee; (2) whether it appoints representative in the Board of Directors or a similar authority ofthe investee; (3) whether it participates in making dec isions on financial and operating policies ofthe investee; (4) whether it has signif icant transaction with the investee; (5) whether it assignsmanagement personnel to the investee; (6) whether it provides key technical materials to theinvestee.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Changes in significant accounting policies
In June 2018, the Minis try of Finance released the Notice on Revising and Issuing the Format ofFinancial Statements of General Enterprises for 2018 (Cai Kuai [2018] No. 15). The financialstatements for the six months ended 30 June 2018 are pre pared in accordance with the abo vecircular, t he ending balances and the op ening balances of relevant line item s in the comparativebalance sheet and the amounts incurred in the current period of relev ant line items in thecomparative income statement are adjusted accordingly, and the impacts are as follows:
| Nature and reasons of the changes in accounting policies | Line items affected | Amounts affected (increase/(decrease)) |
| For the six months ended 30 June 2017 | ||
| Gains and losses on disposals of |
fixed assets and intangible assetsfor the six months ended 30 June2018 are included in losses ondisposals of assets. Thecomparatives for the six monthsended 30 June 2017 are
| reclassified accordingly. | Losses on disposals of |
assetsNon-oper ating inc omeNon-oper ating ex pens es
(6,938,505.37)
(13,982,754.73)
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Changes in significant accounting policies (Cont’d)
changes in acc ount ing
| policies |
Line items
| affected | Amounts affected (increase/(decrease)) | ||||
| 31 December 2017 Consolidated | 1 January 2017 Consolidated | 31 December 2017 Company | 1 January 2017 Company | ||
| The Group combines “notes | |||||
receivable” and “accountsreceivable” into “notesreceivable and accountsreceivable”.
| Accounts receivable | (5,804,152,565.34) | (4,559,911,486.72) | - | - |
| Notes receivable | (9,173,103.94) | (4,406,697.24) | - | - |
| Notes receivable |
and accounts
| receivable | 5,813,325,669.28 | 4,564,318,183.96 | - | - |
combines“interest receivable” and“dividends receivable” into
| “other receivables”. | Interest receivable | (54,710,605.25) | (5,241,461.07) | (31,852,751.65) | - |
| Dividends receivable | - | - | (3,089,805,390.21) | (800,000,000.00) | |
| Other receivables | 54,710,605.25 | 5,241,461.07 | 3,121,658,141.86 | 800,000,000.00 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Changes in significant accounting policies (Cont’d)
changes in acc ount ing
| policies | Line items affected | Amounts affected (increase/(decrease)) | |||
| 31 December 2017 Consolidated | 1 January 2017 Consolidated | 31 December 2017 Company | 1 January 2017 Company | ||
| The Group combines | |||||
“accounts payable” into“notes payable and accountspayable”.
| Accounts payable | (6,905,411,234.18) | (5,259,177,206.37) | - | - |
| Notes payable |
and accounts
| payable | 6,905,411,234.18 | 5,259,177,206.37 | - | - | |
| The Group combines |
“interest pay ab le” in “other
| payables”. | Interest payable | (19,741,816.18) | (13,899,791.33) | - | (24,165.67) |
| Other payables | 19,741,816.18 | 13,899,791.33 | - | 24,165.67 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Changes in significant accounting policies (Cont’d)
| Nature and reasons of the changes in accounti ng polic i es | Line items affected | Amounts affected (increase/(decrease)) |
| For the six months ended 30 June 2017 | ||
| The Group presents Research and |
development expenses, which wereoriginally r ec orded i n general andadminis trati ve ex penses , a s aseparate line item.
| Research and development expenses | 203,739,223.62 |
| General and administrative expenses | (203,739,223.62) |
3 Taxation
The main categor ies and t a x rates applicable to the Group are set out below:
| Category | Tax rate | Tax base |
| Enterpris e income tax | Note (1) | Taxable income |
| Value-added tax |
(”VAT”)
| Note (2) | Taxable value-added amount (Tax payable is calculated using the taxable sales |
amount/taxable
input of the current per iod or taxable turnover
| amount multiplied by the VAT rate) | ||
| City maintenance |
and construction
| tax | 7%, 5% or 1% | Amount of VAT paid |
| Educational surcharge | 3% | Amount of VAT paid |
| Local educa tional surcharge | 2% | Amount of VAT paid |
| Customs duty | At applicable tax rate | Customs dutiable value through ex amination and approval of the Customs |
In addition, pursuant to the Interim Measures for t he Collection, Use and Man agement of the CivilAviation Develo pm ent F u n d (Cai Zong [2012] No. 17) issued by the Ministry of Finance, SF AirlinesCo., Ltd. (“SF Airlines”) p ays the civil aviation develo pment fund based on classific ation of flightroutes, maximum tak e-off weight, flight mileage and app licable collection standar ds, and includessuch payment in cost.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
3 Taxation (Cont'd)
(1) Enterprise income tax
The subsidiaries entitled to the preferential tax are presented as follows:
(a) Pursuant to the Notice on the Policies and Catalogue of Income Tax Preferences for Enterprises in
Guangdon g He ngqi n N ew Ar ea, F uj ian P in gtan Co mp r ehens ive Ex p erim enta l Zone, and ShenzhenQianhai Shenzhen-Hong Kong Modern Service Industry Cooperative Zone (Cai Shui [2014] No. 26)jointly issued b y the Ministry of Finance an d the State Administration of Taxation, the Company’ssubsidiaries as below are subject to enterprise income tax at the preferential rate of 15% from 2014to 2020.
| Name of subsidiary | Local statutory tax rate | Preferential tax rate |
| Guangdong S.F. E-Commerce Co., Ltd. | 25% | 15% |
| Shenzhen S.F. Supply Chain Co., Ltd. | 25% | 15% |
| Shenzhen S.F. International Logistics Co., Ltd. | 25% | 15% |
| Shenzhen SF Dadangjia Technology Co., Ltd. | 25% | 15% |
(b) Pursuant to the Notice on Tax Policy Issues concerning Further Implementing the Western China
Development Strategy (Cai Shui [2011] No. 58) and the Notice on Issues concerning theImplementation of the Tax Policies for the Developm ent of Western China by Ganzhou Ci ty (CaiShui [2013] N o. 4) joint ly issued b y the Ministr y of Financ e, the Genera l Adm inistration of Customsand the State Administration of Taxation, the Company’s subsidiaries as below are subj ect toenterprise income tax at the preferential rate of 15% up to 2020:
| Name of subsidiary | Local statutory tax rate | Preferential tax rate |
| S.F. Express (Chongqing) Co., Ltd. | 25% | 15% |
| Guizhou S.F. Express Co., Ltd. | 25% | 15% |
| Yunnan S.F. Express Co., Ltd. | 25% | 15% |
| Sichuan S.F. Express Co., Ltd. | 25% | 15% |
| Xi'an S.F. Express Co., Ltd. | 25% | 15% |
| Guangxi S.F. Express Co., Ltd. | 25% | 15% |
| S.F. Express (Ningxia) Co., Ltd. | 25% | 15% |
| Inner Mongol ia S.F. Express Co., Ltd. | 25% | 15% |
| Xinjiang S.F. Express Co., Ltd. | 25% | 15% |
| Qinghai S.F. Express Co., Ltd. | 25% | 15% |
| Lanzhou S.F. Express Co., Ltd. | 25% | 15% |
| Ganzhou S.F. Express Co., Ltd. | 25% | 15% |
| Xi'an Shunlu Logistics Co., Ltd. | 25% | 15% |
| Chongqing Huiyifeng Logistics Co., Ltd. | 25% | 15% |
| Chengdu Taishun Logistics Co., Ltd. | 25% | 15% |
| Tibet S.F. Express Co., Ltd. | 25% | 15% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
3 Taxation (Cont'd)
(1) Enterprise income tax (Cont'd)
(c) In accordance with the first article in the Circular of Taxation on Relevant Issues Concerning
Preferential Policies on Enterprise Inc ome Tax for Small Enterprises with Low Profits (Cai S hui[2014] No. 34) jointly issued by the Ministry of Finance and the State Administration of Taxation, thetaxable incom e of the Compan y’s subsidiaries as below is recognised at 50% of income and the yare subject to enterprise income tax at the rate of 20%:
| Name of subsidiary | Local statutory tax rate | Preferential tax rate |
| Weifang Fengtai E-Commerce Industrial Park Management Ltd. | 25% | 20% |
| Guizhou Shunlu Logistics Co., Ltd. | 25% | 20% |
| Zhengzhou Shuncheng Logistics Co., Ltd. | 25% | 20% |
| Shenyang Fengtai E-Commerce Industrial Park Management Ltd. | 25% | 20% |
| Shanghai Fengtai Yuanxing Pr op er t y Management Service Co., Ltd. | 25% | 20% |
(d) Pursuant to the Notice on Enterprise Income Tax Policies for Further Encouraging the Development
of Software and Integrate d Circuit Indus tries ( Cai Sh ui [2012] No. 27) jointly iss ued by the Ministr yof Finance and the State Adm inistration of Taxation, the Announcem ent on Issuing the Measuresfor the Matters concerning Preferential Enterprise Income Tax Policies issued by the StateAdministration of T axation (Announcement [2015]) No. 76), and the N otice on the Issues of thePolicies of Enterprise Income Tax Preferences for Software an d Integrated Circuit Industries (CaiShui [2016] No . 49) jointly issued b y the Ministry of F inance, the State Adm inistration of Taxation,National Development and Reform Commission and the Ministry of Industry and Inf ormationTechnology, and through filing with Shenzhen Nanshan District Local Taxation Bureau, theCompany’s subsidiaries as below were subject to enterprise income tax at the preferential rate of10% in 2017 as a key software enterprise under the national planning and layout.
| Name of subsidiary | Local statutory tax rate | Preferential tax rate |
| SF Technology Co., Ltd. (“SF Technology”) | 25% | 10% |
In addition, the Company’s subsidiaries located in Hong Kong, Singapore, Japan, Korea and USAare subjec t to enter prise in come t ax at t he rat es of 16.5% , 17%, 2 3.2%, 22% and 21% respec tive lyin the reporting period.
In addition to the above, the Compan y and its other major subsidiaries are subject to enter priseincome tax at the rate of 25%.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
3 Taxation (Cont'd)
(2) VAT
According to differ ent businesses, VAT rates applicable to subsidiaries of the Group include 17% ,16%, 11%, 10% and 6%. Applicable tax rates for different business types are as follows:
| Business type | Applicable VAT rates |
| Sales of goods (i) | 17% or 16% |
| Transportation service (ii) | 11% or 10% |
| Logistics supporting service | 6% |
| R&D and technical service | 6% |
| Information technology service | 6% |
| Property leases (iii) | 11% or 10% |
Pursuant to the Circular o n Adjusting Value-added Tax Rat es ( Cai Shui [2018] No. 32), the VATtaxable sales or go ods import, which were originally subject to the tax rates of 17% and 11%, areadjusted t o 16% and 10% respectivel y u pon adjustment. The af oresaid circular h as been effectivesince 1 May 2018.
(i) The revenue from sales of goods acquired by the Group before 1 May 2018 is subject to the VAT
rate of 17%, while the re venue from sales of goods acquired since 1 May 2018 is subject to theVAT rate of 16%.
(ii) The revenue from transportation service acquired by the Group before 1 May 2018 is subject to the
VAT rate of 11%, while the revenue from transportation service acquired since 1 May 2018 issubject to the VAT rate of 10%.
(iii) The property leasing business acquired by the Group before 1 May 2018 is subject to the VAT rate
of 11%, while the property leasin g bus ines s ac quir ed since 1 Ma y 201 8 is s ubj ec t to the VAT rate of10%.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements
(1) Cash at bank and on hand
| 30 June 2018 | 31 December 2017 | ||
| Cash on hand | 70,544.56 | 325,311.33 | |
| Cash at bank (a) | 11,816,998,472.66 | 15,986,187,106.98 | |
| Balances with central bank from Group Finance Company | 1,141,087,768.58 | 1,287,049,930.36 | |
| Including: Balances with central bank - statutory reserve (b) | 1,135,652,760.16 | 1,277,240,782.59 | |
| Balances with central bank - excess reserve (b) | 5,435,008.42 | 9,809,147.77 | |
| Other cash balances (a) | 320,250,178.45 | 44,810,442.45 | |
| 13,278,406,964.25 | 17,318,372,791.12 | ||
| Including: Total overseas depos its | 927,990,963.63 | 784,369,015.82 |
(a) As at 30 June 2018, term deposit amounting to RMB 30,000,000.00 (31 December 2017: RMB
30,000,000.00) was pledged as collateral for long-term borrowings amounting to RMB91,200,000.00 (31 December 2017: RMB 96,000,000.00)(Note 4(28)(a) ); RMB 619,907.00 (31December 2017: RMB 1,959,907.00) which was included in other cash balances representedguarantee deposits with banks. All of these cash balances were restricted cash.
(b) On 18 September 2016, Taisen Holdings incorporated SF Holdings Group Finance Company
Limited (hereinafter “Group Finance Company). Statutory reserve of Group F inance Companydeposited with the c entral bank represent s required statutory reser ve paid by financial enterpr isesin the Peop le's Ba nk of China (“ PBOC”) at 7% of due to customers denominated in RMB. Statutoryreserve deposits are not available for use by the Group in its day to day operations. Surplusreserve of Group Finance Company deposited with the central bank represents the excess over therequired statutory res erve paid by financial ins titutions in the central ba nk, and it is bank dep ositthat can be readily drawn on demand.
(2) Financial assets at fair value through profit or loss
| 30 June 2018 | 31 December 2017 | ||
| Investments in equity instrument held for trading (a) | 14,298,919.01 | 16,232,692.66 | |
| Forward interest rate swap contracts | 1,071,619.48 | 1,586,700.69 | |
| 15,370,538.49 | 17,819,393.35 |
(a) The fair value of the investments in equity instrument held for trading is determined at the closing
prices of Shenzhen Stock Exchange on the last trading day of the year.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(3) Notes receivable and accounts receivable
| 30 June 2018 | 31 December 2017 | ||
| Notes receivable | 25,661,317.69 | 9,173,103.94 | |
| Accounts receivable (a) | 5,686,898,038.60 | 5,804,152,565.34 | |
| 5,712,559,356.29 | 5,813,325,669.28 |
(a) Accounts receivable
| 30 June 2018 | 31 December 2017 | ||
| Accounts receivable | 5,754,878,794.04 | 5,876,055,887.27 | |
| Less: Provision for bad debts | (67,980,755.44) | (71,903,321.93) | |
| 5,686,898,038.60 | 5,804,152,565.34 |
The Group adopts regular settlement method for express & logistics comprehensive servicesprovided to some customers. At each month-end, the outstanding part becomes accounts receivable.
(i) The ageing of accounts receivable is analysed below:
| 30 June 2018 | 31 December 2017 | ||
| Within 1 year (inclusive) | 5,697,231,710.56 | 5,835,161,672.96 | |
| 1 - 2 years (inclusive) | 44,261,180.58 | 21,816,111.28 | |
| 2 - 3 years (inclusive) | 13,385,902.90 | 19,078,103.03 | |
| 5,754,878,794.04 | 5,876,055,887.27 |
As at 30 June 2018 and 31 Decem ber 2017, the Group h ad no significant accounts receivable t hatwere overdue but not impaired on individual basis.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(3) Notes receivable and accounts receivable (Cont'd)
(a) Accounts receivable (Cont’d)
(ii) Accounts receivable are analysed by category as follows:
| 30 June 2018 | |||||||
| Ending balance | Provisio n for bad debts | ||||||
| Amount | % of total balance | Amount | Percentage | ||||
| Provisio n for bad debts on individual bas is | |||||||
| Receivables from related parties (Note 8(4)(a)) | 12,943,815.05 | 0.22% | (12,943,815.05) | 100.00% | |||
| Receivables from non-related parties | 17,674,128.50 | 0.31% | (17,674,128.50) | 100.00% | |||
| Provisio n for bad debts on portfolio basis | |||||||
| Receivables from related parties (Note 8(4)(a)) | 172,236,261.65 | 2.99% | - | - | |||
| Receivables from non-related parties | 5,552,024,588.84 | 96.48% | (37,362,811.89) | 0.67% | |||
| 5,754,878,794.04 | 100.00% | (67,980,755.44) | 1.18% | ||||
| 31 December 2017 | |||||||
| Ending balance | Provisio n for bad debts | ||||||
| Amount | % of total balance | Amount | Percentage | ||||
| Provisio n for bad debts on individual bas is | |||||||
| Receivables from related parties (Note 8(4)(a)) | 12,825,061.28 | 0.22% | (12,825,061.28) | 100.00% | |||
| Receivables from non-related parties | 24,142,937.61 | 0.41% | (24,142,937.61) | 100.00% | |||
| Provisio n for bad debts on portfolio bas is | |||||||
| Receivables from related parties (Note 8(4)(a)) | 101,753,955.64 | 1.73% | - | - | |||
| Receivables from non-related parties | 5,737,333,932.74 | 97.64% | (34,935,323.04) | 0.61% | |||
| 5,876,055,887.27 | 100.00% | (71,903,321.93) | 1.22% | ||||
Where the provision for bad debts is made agai nst the accounts receivable on p ortfolio basis, noprovisio n for bad debts is m ade for related par ty group, a nd provision f or bad de bts is made us ingpercentage of outstanding balance for non-related party group (Note 2(10)(a)).
(iii) For the six months ended 30 June 2018, the provision for bad debts made by the Group amounted
to RMB 8,340,474.49, and there was no reversal of provision for bad debts (for the six monthsended 30 June 2017: Nil) (Note 4(20)).
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(3) Notes receivable and accounts receivable (Cont'd)
(a) Accounts receivable (Cont’d)
(iv) For the six months ended 30 June 2018, the provision for bad debts of accounts receivable that
was written off amounted t o RMB 1 2,263,0 40.98 an d no acc ounts rec eivabl e with am ounts that areindividually significant were written off.
(v) As at 30 June 2018, the Group's accounts receivable that are individually material and which
related provision for bad debts is provided on individual basis amounted to RMB 12,943,815.05.
(vi) The Group’s accounts receivable comprise the accounts receivable from the customers under
mont hly settl em ent. As at 3 0 June 201 8, the five larg es t accounts r eceiva ble a ggregat ed by debt orwere summarised and analysed as follows:
| 30 June 2018 | |||||
| Amount | Amount of provision for bad debts | % of total balance | |||
| Sum of the five largest accounts receivable | 479,025,175.48 | (1,782,972.89) | 8.32% | ||
(4) Other receivables
| 30 June 2018 | 31 December 2017 | ||
| Current accounts receivable from related parties (Note 8 (4)(c)) | 174,838,612.33 | 632,354,802.87 | |
| Guarantees and deposits | 388,973,095.05 | 330,133,274.66 | |
| Cash on delivery service | 255,564,373.10 | 282,767,969.67 | |
| Employee borrowings and advances | 103,307,607.53 | 104,762,069.94 | |
| Social insurance premium prepaid | 12,897,423.00 | 11,666,434.10 | |
| Compensation receivable from commercial insurance | 5,316,319.22 | 2,410,777.24 | |
| Interest receivable | 35,484,868.16 | 54,710,605.25 | |
| Others | 204,872,807.00 | 195,147,065.05 | |
| 1,181,255,105.39 | 1,613,952,998.78 | ||
| Less: Provision for bad debts | (4,503,291.68) | (4,485,359.11) | |
| 1,176,751,813.71 | 1,609,467,639.67 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) Other receivables (Cont’d)
(a) The ageing of other receivables is analysed as follows:
| 30 June 2018 | 31 December 2017 | ||
| Within 1 year (inclusive) | 921,190,135.21 | 1,367,333,527.20 | |
| 1 - 2 years (inclusive) | 155,640,578.73 | 148,737,665.49 | |
| Over 2 years | 104,424,391.45 | 97,881,806.09 | |
| 1,181,255,105.39 | 1,613,952,998.78 |
As at 30 June 2018 and 31 Dec ember 2017, the Group had no sign ificant other receivables thatwere overdue but not impaired on individual basis.
(b) Other receivables are analysed by category as follows:
| 30 June 2018 | |||||||
| Ending balanc e | Provision for bad debts | ||||||
| Amount | % of total balance | Amount | Percentage | ||||
| Provision for bad debts on individual bas is | |||||||
| Receivables from related parties | 270,985.37 | 0.02% | (270,985.37) | 100.00% | |||
| Provision for bad debts on portfolio basis | |||||||
| Receivables from related parties | 174,567,626.96 | 14.78% | - | - | |||
| Receivables from non-related parties | 1,006,416,493.06 | 85.20% | (4,232,306.31) | 0.42% | |||
| 1,181,255,105.39 | 100.00% | (4,503,291.68) | 0.38% | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) Other receivables (Cont’d)
(b) Other receivables are analysed by category as follows (Cont’d):
| 31 December 2017 | |||||||
| Ending balanc e | Provision for bad debts | ||||||
| Amount | % of total balance | Amount | Percentage | ||||
| Provision for bad debts on individual bas is | |||||||
| Receivables from rel ated part i es | 255,259.87 | 0.02% | (255,259.87) | 100.00% | |||
| Provision for bad debts on portf olio basis | |||||||
| Receivables from rel ated part i es | 632,099,543.00 | 39.16% | - | - | |||
| Receivables from non-related parties | 981,598,195.91 | 60.82% | (4,230,099.24) | 0.43% | |||
| 1,613,952,998.78 | 100.00% | (4,485,359.11) | 0.28% | ||||
(c) For the six months ended 30 June 2018, the Group’s provision for bad debts amounted to RMB
5,458,295.02, balances written-off amounted to RMB 5,440,362.45, and there was no provision forbad debts being reversed (Note 4(20)).
(d) As at 30 June 2018, the Group had no other receivables that were individually material which
related provision for bad debts was provided on individual basis, and no ot her receivables thatwere individually material were written off.
(e) As at 30 June 2018, the five largest other receivables aggregated by debtor were summarised and
analysed as follows:
| 30 June 2018 | |||
Nature of
| business | Ageing | Amount |
Amount ofprovision for
| bad debts |
% of total
| balance | ||
| S. F. Holding (Group) |
Commerce Co., Ltd. andits subsidiaries(“Commerce H old ing andits subsi d ia ries”) (Note
Agencycollection and
| 8(4)(c)) | payment |
Within
| 2 years | 121,581,444.00 | - | 10.29% | ||||
| Taiwan S.F. Express Holdings Co., Ltd. | Agency |
collection and
Within
| payment | 1 year | 36,289,220.30 | (181,308.03) | 3.07% | |||
| Shenzhen Hive Box Technology Co., Ltd. (“Hive |
Box Technology”) and its
Agencycollection and
| subsidiaries | payment |
Within
| 1 year | 42,077,907.85 | - | 3.56% | ||||
| Guangdong Baolichi Vehicle Sales Co., Ltd. | Deposit | Within 2 years | 42,500,000.00 | (212,500.00) | 3.60% | ||
| Changchun Xinglong | Transport capacity return | Within 1 year | 16,322,651.15 | (81,613.26) | 1.38% | ||
| 258,771,223.30 | (475,421.29) | 21.91% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(5) Advances to suppliers
(a) The ageing of advances to suppliers is analysed as follows:
| 30 June 2018 | 31 December 2017 | ||||||
| Ageing | Amount | % of total balance | Amount | % of total balance | |||
| Within 1 year (inclusive) | 1,853,058,993.72 | 97.85% | 1,733,490,991.84 | 97.69% | |||
| 1 - 2 years (inclusive) | 25,483,661.12 | 1.35% | 26,138,841.94 | 1.47% | |||
| Over 2 years | 15,230,550.03 | 0.80% | 14,834,538.25 | 0.84% | |||
| 1,893,773,204.87 | 100.00% | 1,774,464,372.03 | 100.00% | ||||
As at 30 June 2018, ad van ces to s uppliers with agei ng over o ne year were m ainly prep aid proper t y rents and f uel cards . As r elevant bu sines s trans actionswere not completed, the amounts were not settled yet.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(5) Advances to suppliers (Cont'd)
(b) As at 30 June 2018, the amount of top five advances to suppliers was analysed as follows:
| 30 June 2018 | |||
| Amount | % of total balance | ||
| Sum of the top five advances to suppliers | 374,418,517.80 | 19.77% | |
(6) Loans and advances
As at 30 J une 2 018 an d 31 Decem ber 2017, lo ans an d ad vances were all fr om S.F. Finance (HongKong) Limited (“S.F. Finance”), which is a subsidiary of the Group in Hong Kong.
(a) Loans and advances by individual and enterprise
| 30 June 2018 | 31 December 2017 | ||
| Personal loa ns | 200,639.74 | 233,277.49 | |
| Enterpris e loa ns | |||
| Non-related party loans | 119,078,611.94 | 127,191,509.56 | |
| Loans and advances - total | 119,279,251.68 | 127,424,787.05 | |
| Less: Loan losses provisions | (1,230,560.34) | (1,321,883.36) | |
| Loans and advances - net | 118,048,691.34 | 126,102,903.69 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(6) Loans and advances (Cont’d)
(b) Loans and advances analysed by type of collateral
| 30 June 2018 | 31 December 2017 | ||
| Unsecur ed loans | 112,323,171.94 | 120,504,149.56 | |
| Guarante ed loans | 6,956,079.74 | 6,920,637.49 | |
| Loans and advances - total | 119,279,251.68 | 127,424,787.05 |
(c) Overdue loans are presented by ageing as follows:
| 30 June 2018 | |||||||||
| Within 3 months | 3 months - 1 year | 1 - 3 years | Over 3 years | Total | |||||
| Unsecured loans | 59,110.10 | - | - | - | 59,110.10 | ||||
| 31 December 2017 | |||||||||
| Within 3 months | 3 months - 1 year | 1 - 3 years | Over 3 years | Total | |||||
| Unsecur ed loans | - | - | - | - | - | ||||
(d) For the six months ended 30 June 2018, the Group did not make or write off any provision for bad
debts, and the provision for bad debts reversed amounted to RMB 91,323.02 (Note 4(20)).
As at 30 June 2018 and 31 December 2017, the Group made loan impairment provisions onportfolio basis.
(e) As at 30 June 2018, the Group had no loans that were individually material which related provision
for bad debts was provide d on individual basis, and no loans that were individually material werewritten off.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(7) Inventories
Inventories are summarised by category as follows:
| 30 June 2018 | ||||
| Ending balance | Provision for decline | |||
in the va lue of
| inventories | Carrying amount | ||||
| Raw materials in stock | 339,416,045.90 | - | 339,416,045.90 | ||
| Aviation consumables | 107,507,043.70 | - | 107,507,043.70 | ||
| Low-value consumables | 51,190,193.82 | - | 51,190,193.82 | ||
| Finished goods | 1,061,358.86 | - | 1,061,358.86 | ||
| 499,174,642.28 | - | 499,174,642.28 |
| 31 December 2017 | ||||
| Ending balance | Provision for decline | |||
in the value of
| inventories | Carrying amount | ||||
| Raw materials in stock | 329,476,828.25 | - | 329,476,828.25 | ||
| Aviation consumables | 73,741,005.69 | - | 73,741,005.69 | ||
| Low-value consumables | 41,301,646.32 | - | 41,301,646.32 | ||
| Finished goo ds | 1,839,546.60 | - | 1,839,546.60 | ||
| 446,359,026.86 | - | 446,359,026.86 |
(8) Other current assets
| 30 June 2018 | 31 December 2017 | ||
| Bank wealth management products (i) | 4,293,441,510.80 | 3,013,647,849.29 | |
| Input VAT to be offset | 1,658,954,916.97 | 1,341,218,755.69 | |
| Prepaid ent erpr ise inc ome tax | 33,581,098.81 | 28,962,186.21 | |
| Others | 662,269.13 | 936,326.37 | |
| 5,986,639,795.71 | 4,384,765,117.56 |
(i) The investment cycle of bank wealth management products is generally within 1 month to 4
months.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(9) Available-for-sale financial assets
| 30 June 2018 | 31 December 2017 | ||
| Measured at fair value | |||
| - Available-for-sale equity instruments (a) | 2,243,199,811.64 | 1,734,756,526.14 | |
| Measured at cost | |||
| - Available-for-sale equity instruments (b) | 155,844,517.21 | 68,510,805.78 | |
| Less: Provision for impairment | - | - | |
| 2,399,044,328.85 | 1,803,267,331.92 |
Related information of available-for-sale financial assets is analysed as follows:
(a) Available-for-sale financial assets measured at fair value:
| 30 June 2018 | 31 December 2017 | ||
| Available-for-sale equity instruments | |||
| - Fair value | 2,243,199,811.64 | 1,734,756,526.14 | |
| - Cost | 2,128,878,412.42 | 1,495,876,215.86 | |
| - Accumulated amount recognised in other compr ehensi ve income | 114,321,399.22 | 238,880,310.28 | |
| - Accumulated provision for impairment | - | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(9) Available-for-sale financial assets (Cont’d)
(b) Available-for-sale financial assets measured at cost:
The available-for-sale financial assets measured at cost mainly comprise the investments inunlisted equit ies held by the Group which are not quo ted in an active market and whose fair valuecannot be reliably measured as the reasonable range of fair value estimates is large andprobabi lities f or forming these estimates cannot be reasonably determined. The Group has no planto dispose of these investments.
(10) Long-term receivables
| 30 June 2018 | 31 December 2017 | ||
| Interest-free loans to employees receivable | 243,550,000.00 | 247,450,000.00 | |
| Less: Prepaid discount interest | (25,915,350.98) | (31,383,949.20) | |
| Amortised cost of interest-free loans to employees | 217,634,649.02 | 216,066,050.80 | |
| Less: Current portion of interest-free loans to employees | (68,194,000.00) | - | |
| Provision for bad debts | - | - | |
| 149,440,649.02 | 216,066,050.80 |
As at 30 June 2018, long-term receivables represented the interest-free loans to qua lifiedemployees with a term of 5 years.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(11) Long-term equity investments
| 30 June 2018 | 31 December 2017 | ||
| Cost: | |||
| Joint ventures | 557,870,522.73 | 100,294,970.45 | |
| Associates | 539,541,201.54 | 536,737,898.22 | |
| 1,097,411,724.27 | 637,032,868.67 | ||
| Less: Provision for impairment of long-term equity investments | |||
| - Joint ventures | - | - | |
| - Associates | (29,359,632.02) | (32,348,978.00) | |
| (29,359,632.02) | (32,348,978.00) | ||
| Joint ventures (a) | 557,870,522.73 | 100,294,970.45 | |
| Associates (b) | 510,181,569.52 | 504,388,920.22 | |
| 1,068,052,092.25 | 604,683,890.67 |
(a) Joint ventures
| Movements in the current period | |||||||||
Share of net
profit/(loss)
under the
| equity method | Exchange |
differenceson translation
of foreigncurrencyfinancial
| statements |
Carrying amount
as at 30 June
| 2018 |
Balance ofprovision for
at the end of
| the period |
Carrying amount as
at 31 December
| 2017 | Increase in investments | ||||||||||
| Shang Shun Supply Chain Management (China) Co., Ltd. | 22,062,688.77 | - | (1,872.92) | 215,628.29 | 22,276,444.14 | - | |||||
| POST11O? | 9,354,749.40 | - | 3,835,317.17 | (84,392.01) | 13,105,674.56 | - | |||||
| Hubei International Aviation |
Industry Metro Development
| Co., Ltd. | 39,816,184.58 | - | 474,509.99 | - | 40,290,694.57 | - | |||||
| Shenzhen Shenghai Information |
Service Co., Ltd. (“Shenghai
| Information”) | 2,595,734.59 | - | 229,901.84 | - | 2,825,636.43 | - | |||||
| Shanghai Geling Information |
Technology Co., Ltd. (“Geling
| Information”) | 2,534,800.31 | - | (828,360.81) | - | 1,706,439.50 | - | |||||
| Guangzhou Leshou Network Technologies Co., Ltd. (“Leshou Network”) | 23,276,688.68 | - | (287,675.18) | - | 22,989,013.50 | - | |||||
| Global Connect Holding Limited | 654,124.12 | - | 6,698.43 | 15,796.48 | 676,619.03 | - | |||||
| Beijing Shunhetongxin Technology Co., Ltd. | - | 20,000,000.00 | - | - | 20,000,000.00 | - | |||||
| Hubei International Logistics Airport Co., Ltd. | - | 230,000,000.00 | - | - | 230,000,000.00 | - | |||||
| ZBHA Group Co., Ltd. (“ZBHA”) | - | 200,000,000.00 | - | - | 200,000,000.00 | - | |||||
| Zhongyunda Aviation Ground Services Co., Ltd. | - | 4,000,001.00 | - | - | 4,000,001.00 | - | |||||
| 100,294,970.45 | 454,000,001.00 | 3,428,518.52 | 147,032.76 | 557,870,522.73 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(11) Long-term equity investments (Cont’d)
(b) Associates
| Movements in the current period | |||||||
| Carrying amount |
as at
| 31 December 2017 | |||||
Share of net
under the equity
| method | Other changes in equity (i) | Carrying amount | ||
as at
| 30 June 2018 | Balance of |
provision forimpairment lossat the end of the
periodIncreas e in
investments
Decrease in
| Increas e in investments | investments | ||||||||||||
| Beijing GreenVal ley Technology Limited | 22,253,336.27 | - | - | (574,446.16) | - | 21,678,890.11 | - | ||||||
| Shenzhen Bai Mi Life Co., Ltd. | 70,051,454.18 | - | - | 8,950,262.95 | 5,425,804.79 | 84,427,521.92 | - | ||||||
| Feng Wang Investment Co., Ltd. | 49,870,586.30 | - | - | 746,702.59 | - | 50,617,288.89 | - | ||||||
| Zhuhai Sui Bi an Technology Co., Ltd. (“Zhuhai Sui Bian”) | 171,521,842.49 | - | (13,515,734.74) | 2,903,521.96 | 3,428,000.00 | 164,337,629.71 | (8,031,343.62) | ||||||
| Little Red Hat Issuance Co., Ltd. | 42,581,459.08 | - | - | (2,307,658.55) | - | 40,273,800.53 | - | ||||||
| Shenzhen Zhi Hang UAV Co., Ltd. | 20,407,404.26 | - | - | (1,504,028.93) | 4,741,516.63 | 23,644,891.96 | - | ||||||
| Langxing UAV System Co., Ltd. | 46,944,094.45 | - | - | (2,036,718.03) | - | 44,907,376.42 | - | ||||||
| Shenzhen Shun Jie Feng Da Express Co., Ltd. | 8,074,385.00 | - | - | 270,645.52 | - | 8,345,030.52 | (20,480,557.60) | ||||||
| SF Lottery (Shenzhen) Technology Development Co., Ltd. (“SF Lottery”) | 21,126,302.23 | - | - | (400,774.48) | - | 20,725,527.75 | - | ||||||
| Zhejiang Galaxis Technology Co., Ltd. | 46,000,000.00 | - | - | 13,166.27 | - | 46,013,166.27 | - | ||||||
| Beijing Prettyfeather Brand Management Co., Ltd. | 4,933,076.25 | - | - | (179,849.77) | - | 4,753,226.48 | - | ||||||
| Shenzhen Xiaofeng Technology Co., Ltd. | 624,979.71 | - | - | (167,760.75) | - | 457,218.96 | (847,730.80) | ||||||
| Shenzhen Fengle Propert y C o. , L td . (ii) | - | 399,000.00 | (98,659.83) | (300,340.17) | - | - | - | ||||||
| 504,388,920.22 | 399,000.00 | (13,614,394.57) | 5,412,722.45 | 13,595,321.42 | 510,181,569.52 | (29,359,632.02) |
(i) Those represent changes in equity resulting from capital injections by investors other than the Group.
(ii) In February 2018, the Group and an independent third party jointly established Shenzhen Fengle Property Co., Ltd., in which the Group held 39.9% equity,
and it was accounted f or as an associate; in Ma y 2018, the Group acquired 20.1% equity; Shenzhen Fengle Property Co., Ltd. was changed from anassociate to a subsidiary after the above transactions were completed (Note 5(1)).
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(12) Investment properties
| Buildings | Land use rights | Total | |||
| Cost | |||||
| 31 December 2017 | 1,068,872,476.86 | 1,035,300,437.52 | 2,104,172,914.38 | ||
| Transfer from self-used assets |
in the current period (Note
| 4(13), (15)) | 125,695,950.49 | 35,609,651.19 | 161,305,601.68 | ||
| Increase in the curre nt per iod | 43,664,746.90 | - | 43,664,746.90 | ||
| Transfer to self-used assets in |
the current period (Note
| 4(13), (15)) | (58,701,116.48) | (72,884,569.26) | (131,585,685.74) | ||
| Decrease in the current period | (10,559,344.01) | - | (10,559,344.01) | ||
| Effec t of tran slat ion of foreign currency financial statements | 9,000,414.19 | 12,520,719.21 | 21,521,133.40 | ||
| 30 June 2018 | 1,177,973,127.95 | 1,010,546,238.66 | 2,188,519,366.61 | ||
| Accumulated depreciation | |||||
| 31 December 2017 | 60,976,096.54 | 51,602,495.82 | 112,578,592.36 | ||
| Transfer from self-used assets |
in the current period (Note
| 4(13), (15)) | 9,369,004.60 | 1,795,712.22 | 11,164,716.82 | ||
| Provision in the current perio d | 13,744,664.27 | 11,968,469.58 | 25,713,133.85 | ||
| Transfer to self-used assets in |
the current period (Note
| 4(13), (15)) | (4,471,611.58) | (4,783,784.27) | (9,255,395.85) | ||
| Effec t of tran slat ion of foreign currency financial statements | 566,915.62 | 598,651.50 | 1,165,567.12 | ||
| 30 June 2018 | 80,185,069.45 | 61,181,544.85 | 141,366,614.30 | ||
| Carrying amount | |||||
| 30 June 2018 | 1,097,788,058.50 | 949,364,693.81 | 2,047,152,752.31 |
| 31 December 2017 | 1,007,896,380.32 | 983,697,941.70 | 1,991,594,322.02 |
For the six months ended 30 June 2018, no borrowing cost was recognised in investmentproperties for the six months ended 30 June 2017: Nil).
As at 30 June 2018, the Group was still in the proces s of applying for c ertificates of o wnership forcertain investment properties with carrying amount of RMB 56,089,615.78 (cost of RMB56,299,271.65) (31 December 2017: carrying amount of RMB 14,922,550.26 and cost of RMB14,965,355.64). In a ddition, there was no land use r ight with pending certific ate of ownership as at30 June 2018 (31 December 2017: Nil).
As at 30 J une 2018, t he investm ent proper ties with c arr ying amount of RMB 1,43 3,941,203. 85 (costof RMB 1, 537 ,48 9,3 90.72) (31 December 2017: carrying amount of RMB 1,537,596,994.89 and costof RMB 1,626,599,122.09) were pledged as collateral for long-term borrowings (Note 4(28)(b)).
As at 30 June 2018 and 31 Dec ember 2017, the Group has assess ed that no impairment lossshould be recognised for investment properties.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Fixed assets
| Buildings | Motor vehicles | Aircraft, engine bodies, rotables and | |||||
high-value aircraft
| maintenance tools | Machinery and equipment |
Office equipment
and other
| equipment | |||||||||||||
| Computers and electronic equipment | Total | ||||||||||||
| Cost | |||||||||||||
| 31 D ecember 2017 | 3,625,296,380.06 | 4,492,856,186.14 | 2,117,858,529.60 | 4,650,492,374.93 | 1,911,781,524.94 | 2,587,305,642.44 | 19,385,590,638.11 | ||||||
| Transfer from construction in progress in the current period (Note 4(14)) | 105,987,544.74 | 6,576,947.30 | 2,829,128.12 | 304,214,633.23 | 35,054,623.56 | 142,493,198.08 | 597,156,075.03 | ||||||
| Transfer from investment properties in th e c urrent period (Note 4(12)) | 58,701,116.48 | - | - | - | - | - | 58,701,116.48 | ||||||
| Increase in the current period | 92,911,777.08 | 411,308,557.43 | 385,613,296.34 | 52,727,928.58 | 41,918,853.17 | 56,049,891.18 | 1,040,530,303.78 | ||||||
| Transfer to investment properties in the current period (Note 4(12)) | (125,695,950.49) | - | - | - | - | - | (125,695,950.49) | ||||||
| Decrease in the current period | (35,648,134.58) | (142,567,696.14) | (86,701,562.42) | (1,048,401.64) | (6,072,126.13) | (21,144,639.22) | (293,182,560.13) | ||||||
| Reclassification in the curr en t period | - | (82,772,912.35) | - | (2,386,935.57) | 85,064,949.62 | 94,898.30 | - | ||||||
| Effect of translation of foreign currency financial statements | 7,004,390.01 | 1,470,455.56 | 491,442.25 | - | 2,134,420.00 | 255,431.36 | 11,356,139.18 | ||||||
| 30 June 2018 | 3,728,557,123.30 | 4,686,871,537.94 | 2,420,090,833.89 | 5,003,999,599.53 | 2,069,882,245.16 | 2,765,054,422.14 | 20,674,455,761.96 | ||||||
| Accumulated depre ci ation | |||||||||||||
| 31 December 2017 | 382,783,172.12 | 3,053,673,866.35 | 1,273,383,793.23 | 1,383,754,989.09 | 325,357,636.44 | 1,071,507,799.70 | 7,490,461,256.93 | ||||||
| Transfer from investment properties in th e c urrent period (Note 4(12)) | 4,471,611.58 | - | - | - | - | - | 4,471,611.58 | ||||||
| Provision in the curren t perio d | 55,109,149.14 | 402,206,970.75 | 237,945,674.10 | 252,412,378.74 | 74,440,509.97 | 239,780,837.62 | 1,261,895,520.32 | ||||||
| Transfer to investment properties in the current period (Note 4(12)) | (9,369,004.60) | - | - | - | - | - | (9,369,004.60) | ||||||
| Decrease in the current period | (35,748.92) | (132,391,918.08) | (76,757,961.70) | (161,309.92) | (1,698,249.55) | (17,049,731.10) | (228,094,919.27) | ||||||
| Reclassification in the curr en t period | - | (38,625,435.65) | - | (1,024,622.03) | 39,649,703.85 | 353.83 | - | ||||||
| Effect of translation of foreign currency financial statements | 556,402.76 | 1,374,300.77 | 447,455.62 | - | 432,926.33 | 179,153.21 | 2,990,238.69 | ||||||
| 30 June 2018 | 433,515,582.08 | 3,286,237,784.14 | 1,435,018,961.25 | 1,634,981,435.88 | 438,182,527.04 | 1,294,418,413.26 | 8,522,354,703.65 | ||||||
| Carrying amount | |||||||||||||
| 30 June 2018 | 3,295,041,541.22 | 1,400,633,753.80 | 985,071,872.64 | 3,369,018,163.65 | 1,631,699,718.12 | 1,470,636,008.88 | 12,152,101,058.31 | ||||||
| 31 December 2017 | 3,242,513,207.94 | 1,439,182,319.79 | 844,474,736.37 | 3,266,737,385.84 | 1,586,423,888.50 | 1,515,797,842.74 | 11,895,129,381.18 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Fixed assets (Cont'd)
(i) For the sixth months ended 30 June 2018, the amount of depreciation expenses charged to cost of
revenue, selling and distribution expenses, general and administrative expenses and Research anddevelopment expenses was RMB 1,240,755,912.28 (for the sixth months ended 30 June 2017:
RMB 1,127,6 66, 681. 26) .
(ii) As at 30 June 2018, fixed assets with carrying amount of RMB 1,389,003,362.43 (cost of RMB
1,493,112,758.29) ( 31 December 2017: carrying amount of RMB 1,35 8,011,244.35 and cost ofRMB 1,438,160,005.75) were pledged as collateral for long-term borrowings (Note 4(28)(b)).
(iii) Fixed assets with pending certificates of ownership
| 30 June 2018 | |||||||
| Cost | Accumulated depreciation | Provision for impairment | Carrying amount | ||||
| Buildings | 332,336,468.63 | (5,304,313.59) | - | 327,032,155.04 | |||
| 31 December 2017 | |||||||
| Cost | Accumulated depreciation | Provision for impairment | Carrying amount | ||||
| Buildings | 107,962,735.66 | (1,998,166.82) | - | 105,964,568.84 | |||
In additio n, as at 30 Ju ne 2018, bui ldings with c arrying am ount of RMB 25, 892,585.0 2 and cost ofRMB 29,84 4,036. 64 (31 De cem ber 2017: carr ying am ount of RMB 26,59 6,028.7 7 and c ost of RMB29,844,036.64) represented publ ic rental houses with restricted tra nsfer rights purchased by theGroup for enterprise talents.
(iv) As at 30 June 2018 and 31 December 2017, the Group has assessed that no impairment loss
should be recognised for fixed assets.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Fixed assets (Cont'd)
(v) Disposals of aircraft, aircraft engines, rotables and high-value aircraft maintenance tools
| For the six months ended 30 June 2018 | |||||||||
| Reason for disposal | Cost | Accumulated depreciation | Provision for impairment | Carrying amount | |||||
| Aircraft rotables | Scrapped | 91,319.37 | (48,443.46) | - | 42,875.91 | ||||
| Aircraft rotables | Sold | 155,266.03 | (15,709.71) | - | 139,556.32 | ||||
| 246,585.40 | (64,153.17) | - | 182,432.23 | ||||||
| For the six months ended 30 June 2017 | |||||||||
| Reason for disposal | Cost | Accumulated depreciation | Provision for impairment | Carrying amount | |||||
| Aircraft rotables | Scrapped | 309,463.61 | (95,663.15) | - | 213,800.46 | ||||
| Aircraft rotables | Sold | 7,336.67 | (1,393.95) | - | 5,942.72 | ||||
| High-value aircraft | |||||||||
maintenance
| tools | Scrapped | 3,400.00 | (3,230.00) | - | 170.00 | ||||
| 320,200.28 | (100,287.10) | - | 219,913.18 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(14) Construction in progress
| 30 June 2018 | 31 December 2017 | ||
| Aircraft import and refit | 986,881,950.29 | 796,506,349.37 | |
| Qianhai S.F. Headquarters Office | 469,427,299.72 | 374,370,152.30 | |
| Intelligent Sorting Hefei Base Project | 261,365,972.08 | 175,096,569.38 | |
| Shanghai Qingpu Huaxin project | 244,342,133.38 | 194,973,517.21 | |
| Wuxi Fengtai E-Commerce Industrial Park Project | 213,275,772.83 | 129,335,243.67 | |
| Changchun E -Commerce Industrial Park Project | 166,552,108.18 | 110,991,650.73 | |
| Tianjin Fengtai E-Commerce Industrial Park Project | 153,824,518.94 | 113,493,305.64 | |
| Wuhu Fengtai E-Commerce Industrial Park Project | 144,421,275.18 | 93,466,582.76 | |
| Yancheng Smart E-Commerce Logistics Park Project | 124,892,227.15 | 107,654,654.86 | |
| Changsha E -Commerce Industrial Park Project | 50,449,743.02 | 18,711,354.78 | |
| Nantong Regional Air Pivot (Phase 2) Project | 29,698,530.81 | 1,391,305.59 | |
| Shenyang Ancient City Distribution Hub Project | 28,738,710.61 | 3,479,729.73 | |
| Chongqing Yubei Distribution Hub Renovation Project | 18,044,681.56 | - | |
| Wuhan Wujiashan Comprehensive Distribution Hub Project | 13,761,261.26 | - | |
| Nanjing Medical Warehouse Renovation Project | - | 12,916,342.38 | |
| Yinzhou S.F. Express Transit Centre | - | 102,533,432.61 | |
| Others | 115,284,398.53 | 72,000,222.28 | |
| 3,020,960,583.54 | 2,306,920,413.29 |
As at 30 June 2018 and 31 Dec ember 2017, the Group has assess ed that no impairment lossshould be recognised for construction in progress.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(14) Construction in progress (Cont’d)
| Name of projects | Budget | 31 December 2017 | Increase in the current period | Transfer to fixed assets in the current period (Note 4(13)) |
Transfe r to long -
| term prepaid expenses in the current period | 30 June 2018 | % of project investment |
in budget
| (ii) | Progress of project | Accumulative amount of capitalised borrowing costs | Including: Borrowing costs capitalised in the current period (Note 4(45)) | Capitalisation rate | Source of funds | ||||||||||||
| Aircraft import and refit | 1,067,441,294.81 | 796,506,349.37 | 500,929,226.58 | (304,214,633.23) | (6,338,992.43) | 986,881,950.29 | 46.93% | 46.93% | - | - | - | Self-owned funds | |||||
| Qianhai S.F. Headquarters Office | 958,204,124.09 | 374,370,152.30 | 95,057,147.42 | - | - | 469,427,299.72 | 48.99% | 48.99% | 29,272,954.04 | 7,765,050.78 | 4.54% | Self-owned funds and loans from financial institutions | |||||
| Intelligent Sorting Hefei Base Project | 495,423,615.55 | 175,096,569.38 | 86,269,402.70 | - | - | 261,365,972.08 | 52.76% | 52.76% | - | - | - | Self-owned funds | |||||
| Shanghai Qingpu Huaxin project | 786,928,207.94 | 194,973,517.21 | 49,368,616.17 | - | - | 244,342,133.38 | 97.83% | 97.83% | - | - | - | Self-owned funds | |||||
| Wuxi Fengtai E-Commerce Industrial Park Project | 337,612,182.57 | 129,335,243.67 | 83,940,529.16 | - | - | 213,275,772.83 | 63.17% | 63.17% | - | - | - | Self-owned funds | |||||
| Changchun E-Commerce Industrial Park Project | 333,263,139.60 | 110,991,650.73 | 55,560,457.45 | - | - | 166,552,108.18 | 49.98% | 49.98% | - | - | - | Self-owned funds | |||||
| Tianjin Fengtai E-Commerce Industrial Park Project | 297,436,117.91 | 113,493,305.64 | 40,331,213.30 | - | - | 153,824,518.94 | 51.72% | 51.72% | - | - | - | Self-owned funds | |||||
| Wuhu Fengta i E-Commerce Industrial Park Project | 166,075,501.09 | 93,466,582.76 | 50,954,692.42 | - | - | 144,421,275.18 | 86.96% | 86.96% | - | - | - | Self-owned funds | |||||
| Yancheng Smart E-commerce Industrial Park Project | 152,224,552.40 | 107,654,654.86 | 17,237,572.29 | - | - | 124,892,227.15 | 82.04% | 82.04% | - | - | - | Self-owned funds | |||||
| Changsha E-Commerce Industrial Park Project | 525,893,305.03 | 18,711,354.78 | 31,738,388.24 | - | - | 50,449,743.02 | 9.59% | 9.59% | - | - | - | Self-owned funds | |||||
| Nantong Regional Air Pivot (Phase 2) Project | 295,119,203.83 | 1,391,305.59 | 28,307,225.22 | - | - | 29,698,530.81 | 10.06% | 10.06% | - | - | - | Self-owned funds | |||||
| Shenyang Ancient City Distribution Hub Project | 49,187,755.63 | 3,479,729.73 | 39,353,949.80 | - | (14,094,968.92) | 28,738,710.61 | 87.08% | 87.08% | - | - | - | Self-owned funds | |||||
| Chongqing Yubei Distribution Hub Renovation Project | 33,446,067.76 | - | 18,044,681.56 | - | - | 18,044,681.56 | 53.95% | 53.95% | - | - | - | Self-owned funds | |||||
| Wuhan Wuj iashan Com prehensi ve Distribution Hub Project | 60,792,032.57 | - | 13,761,261.26 | - | - | 13,761,261.26 | 22.64% | 22.64% | - | - | - | Self-owned funds | |||||
| Nanjing Medical Warehouse Renovation Project | 19,209,466.49 | 12,916,342.38 | 56,925.00 | - | (12,973,267.38) | - | 67.54% | 100.00% | - | - | - | Self-owned funds | |||||
| Yinzhou S.F. Express Transit Centre | 134,400,187.81 | 102,533,432.61 | 3,454,112.13 | (105,987,544.74) | - | - | 78.86% | 100.00% | - | - | - | Self-owned funds | |||||
| Others | 72,000,222.28 | 307,433,547.76 | (186,953,897.06) | (77,195,474.45) | 115,284,398.53 | - | - | - | |||||||||
| 2,306,920,413.29 | 1,421,798,948.46 | (597,156,075.03) | (110,602,703.18) | 3,020,960,583.54 | 29,272,954.04 | 7,765,050.78 |
(i) As at 30 June 2018, no construction in progress (31 December 2017: Nil) was pledged as collateral for long-term borrowings.
(ii) For aircraft import and refit, the percentage of project investment in budget is related to the investment for the current period; for the other projects, the
percentage of project investment in budget is related to the accumulative investment.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(15) Intangible assets
| Land use rights | Purchased software | Self-developed software | Patents | Trademarks | Others | Total | |||||||
| Cost | |||||||||||||
| 31 December 2017 | 4,550,686,217.31 | 324,261,436.34 | 992,831,550.96 | 45,482,079.50 | 29,081,082.37 | 13,859,625.35 | 5,956,201,991.83 | ||||||
| Increase in the current period | |||||||||||||
| Transfer from investment properties (Note 4(12)) | 72,884,569.26 | - | - | - | - | - | 72,884,569.26 | ||||||
| Transfer from research and |
development expen dit ure s (Not e
| 4(16)) | - | - | 242,250,729.34 | - | - | - | 242,250,729.34 | ||||||
| Addition | 104,767,954.60 | 52,184,577.23 | - | 2,102,765.99 | 888,951.46 | 2,217,144.81 | 162,161,394.09 | ||||||
| Decrease in the current period | |||||||||||||
| Transfer to investment properties in th e c urrent period (Note 4(12)) | (35,609,651.19) | - | - | - | - | - | (35,609,651.19) | ||||||
| Disposal | - | (189,734.57) | - | - | - | - | (189,734.57) | ||||||
| Effect of translation of foreign currency financial statements | 11,720,107.49 | 231,538.48 | - | - | - | - | 11,951,645.97 | ||||||
| 30 June 2018 | 4,704,449,197.47 | 376,487,817.48 | 1,235,082,280.30 | 47,584,845.49 | 29,970,033.83 | 16,076,770.16 | 6,409,650,944.73 | ||||||
| Accumulated amort is ation | |||||||||||||
| 31 December 2017 | 217,949,074.72 | 213,271,132.76 | 226,849,481.37 | 22,206,991.13 | 6,932,609.45 | 5,469,388.24 | 692,678,677.67 | ||||||
| Increase in the current period | |||||||||||||
| Transfer from investment properties (Note 4(12)) | 4,783,784.27 | - | - | - | - | - | 4,783,784.27 | ||||||
| Provision | 54,020,068.59 | 25,446,735.82 | 110,898,237.40 | 4,975,617.94 | 1,515,849.17 | 725,433.23 | 197,581,942.15 | ||||||
| Decrease in the current period | |||||||||||||
| Transfer to investment properties in th e c urrent period (Note 4(12)) | (1,795,712.22) | - | - | - | - | - | (1,795,712.22) | ||||||
| Disposal | - | (15,811.22) | - | - | - | - | (15,811.22) | ||||||
| Effect of translation of foreign currency financial statements | 536,326.02 | 117,876.13 | - | - | - | - | 654,202.15 | ||||||
| 30 June 2018 | 275,493,541.38 | 238,819,933.49 | 337,747,718.77 | 27,182,609.07 | 8,448,458.62 | 6,194,821.47 | 893,887,082.80 | ||||||
| Carrying amount | |||||||||||||
| 30 June 2018 | 4,428,955,656.09 | 137,667,883.99 | 897,334,561.53 | 20,402,236.42 | 21,521,575.21 | 9,881,948.69 | 5,515,763,861.93 | ||||||
| 31 December 2017 | 4,332,737,142.59 | 110,990,303.58 | 765,982,069.59 | 23,275,088.37 | 22,148,472.92 | 8,390,237.11 | 5,263,523,314.16 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(15) Intangible assets (Cont’d)
For the six months end ed 30 June 2018, the am ortisation of intangible ass ets amounted to RMB197,581,942.15 (for the six months ended 30 June 2017: RMB 133,790,575.55).
(a) The Group’s land use rights pledged as collateral for long-term borrowings (Note 4(28)(b)):
| 30 June 2018 | |||||
| Cost | Accumulated amortisation | Carrying amount | |||
| Land use rights | 2,911,648,256.39 | (190,426,878.24) | 2,721,221,378.15 | ||
| 31 December 2017 | |||||
| Cost | Accumulated amortisation | Carrying amount | |||
| Land use rights | 2,835,820,576.83 | (152,028,919.24) | 2,683,791,657.59 | ||
(b) As at 30 June 2018, the Group was still in the process of applying for certificates of ownership for
land use rights with carrying amount of RMB 177,771,272.73 (cost of RMB 181,112,953.51) (31December 2017: carrying amount of RMB 203,832,330.28 and cost of RMB 204,990,712.65).
(c) As at 30 June 2018, the intangible assets developed by the Group accounted for 16.27% (31
December 2017: 14.55%) of the carrying amount of intangible assets.
| 30 June 2018 | 31 December 2017 | ||
| Carrying amount of self-developed intangible assets |
897,334,561.53
765,982,069.59
| Carrying amount of intangible assets | 5,515,763,861.93 | 5,263,523,314.16 | |
| Proportion | 16.27% | 14.55% |
(d) As at 30 June 2018 and 31 December 2017, the Group has assessed that no impairment loss
should be recognised for intangible assets.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(16) Research and development expenditures
31 December
| 2017 | Transfer to | ||||
intangible assets
in the current
period
| (Note 4(15)) | 30 June 2018 |
Increase in the
| current period | |||||||
| Intra-city Express | 20,310,837.46 | 44,666,367.05 | (46,047,294.51) | 18,929,910.00 | |||
| Unmanned Aerial Vehicle Project | 19,968,305.80 | 16,451,849.19 | (2,004,849.07) | 34,415,305.92 | |||
| CPS | 17,576,384.15 | 70,443,215.87 | (43,013,991.30) | 45,005,608.72 | |||
| Warehousing Management System | 16,310,723.42 | 4,683,326.28 | (5,185,965.94) | 15,808,083.76 | |||
| Foundation Revolution |
System of Product
| Operation | 12,033,233.05 | 20,810,275.67 | (18,148,441.82) | 14,695,066.90 | |||
| CSSC Efficiency Improvement Project | 11,857,085.93 | 2,558,980.30 | - | 14,416,066.23 | |||
| SAP Settlement Platform System | 10,452,743.32 | 1,259,830.83 | - | 11,712,574.15 | |||
| Corporate Customer Service Platfor m | 9,601,076.22 | 2,379,992.79 | (10,405,122.62) | 1,575,946.39 | |||
| International Export Management System | 6,741,142.38 | 1,899,136.31 | (8,640,278.69) | - | |||
| Fengchi Project | 3,919,250.10 | 13,957,536.05 | (9,516,791.48) | 8,359,994.67 | |||
| Operation and |
Management Platform
| Virtual System | 1,400,231.14 | 4,525,998.02 | (5,369,327.68) | 556,901.48 | |||
| Fengshe ng Syst em | 1,354,282.22 | 2,978,842.12 | (2,969,874.04) | 1,363,250.30 | |||
| Geodetic Network System | - | 15,321,967.96 | (15,321,967.96) | - | |||
| Big Data Platform | - | 10,619,588.54 | (10,619,588.54) | - | |||
| Others | 39,649,735.39 | 113,612,285.14 | (65,007,235.69) | 88,254,784.84 | |||
| 171,175,030.58 | 326,169,192.12 | (242,250,729.34) | 255,093,493.36 |
As at 30 June 2018, the Group has ass essed that no impairment loss should be recognised forresearch and development expenditures.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(17) Goodwill
31 December
| 2017 | Increase in the current period | Exchange rate difference in the current period | 30 June 2018 | ||||
| Goodwill: | |||||||
| Xiamen Ruite Information |
Technology Co., Ltd.
| (“Xiamen Ruite”) | 56,502,329.98 | - | - | 56,502,329.98 | |||
| Chongqing Xuehu Express LLC | 10,555,317.54 | - | - | 10,555,317.54 | |||
| Guizhou Xingch eng Zha ipei Express Co., Ltd. | 10,199,760.21 | - | - | 10,199,760.21 | |||
| Sichuan Wu Lian Yi Da |
Technology Co., Ltd. (“WuLian Yi Da”) and its
| subsidiaries | 4,940,247.25 | - | - | 4,940,247.25 | |||
| Chengdu Shunyifeng Pharmaceu tic al s Co., Ltd. | 2,434,509.81 | - | - | 2,434,509.81 | |||
| Hanxing Industrial Co., Ltd. | 1,424,568.80 | - | 14,502.68 | 1,439,071.48 | |||
| Guangdong Shunxin Express |
Co., Ltd. (“Shunxin
| Express“) (Note 5(1)) | - | 167,309,240.51 | - | 167,309,240.51 | |||
| 86,056,733.59 | 167,309,240.51 | 14,502.68 | 253,380,476.78 | ||||
| Less: Provision for |
impairment (Note
| 4(20)) - | |||||||
| Chengdu Shunyifeng |
Pharmaceuticals
| Co., Ltd. | (2,434,509.81) | - | - | (2,434,509.81) | |||
| Chongqing Xuehu Express LLC | (10,555,317.54) | - | - | (10,555,317.54) | |||
| Guizhou Xingcheng Zhaipei Express Co., Ltd. | (10,199,760.21) | - | - | (10,199,760.21) | |||
| (23,189,587.56) | - | - | (23,189,587.56) | ||||
| 62,867,146.03 | 167,309,240.51 | 14,502.68 | 230,190,889.22 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(18) Long-term prepaid expenses
| 31 December 2017 |
Increase in the current
| period |
Amortisation i n the
| current period |
Decrease in the
| current period | 30 June 2018 | ||||||||
| Leasehold improvements | 934,724,319.10 | 266,189,635.21 | (213,497,577.03) | (456,639.11) | 986,959,738.17 | ||||
| Settling-in all owance |
and introduction
| fee for pilots | 346,796,666.19 | 15,905,010.31 | (25,471,444.81) | (1,627,066.14) | 335,603,165.55 | ||||
| Prepaid discount |
interest oninterest-free l oans
| to employees | 31,383,949.20 | - | (5,034,077.33) | (434,520.89) | 25,915,350.98 | ||||
| Others | 17,175,299.80 | 1,744,412.04 | (3,228,722.80) | - | 15,690,989.04 | ||||
| 1,330,080,234.29 | 283,839,057.56 | (247,231,821.97) | (2,518,226.14) | 1,364,169,243.74 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(19) Other non-current assets
| 30 June 2018 | 31 December 2017 | ||
| Prepaid earnest money for office building admission | 1,300,000,000.00 | - | |
| Prepaid engineering equipment | 273,202,131.31 | 87,212,810.90 | |
| Prepaid land leas e | 75,616,792.56 | 35,748,888.89 | |
| Prepaid rental and deposit | 23,132,616.20 | 20,251,650.61 | |
| 1,671,951,540.07 | 143,213,350.40 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(20) Provision for asset impairment
31 December
| 2017 | Increase in the current period | Decrease in the current period | 30 June 2018 | ||||||
| Reversal in the current year | Write-off/Disposal | ||||||||
| Provisio n for bad debts | 76,388,681.04 | 13,798,769.51 | - | (17,703,403.43) | 72,484,047.12 | ||||
| Including: Provision for bad debts of accounts receivable (Note 4(3)(a)) | 71,903,321.93 | 8,340,474.49 | - | (12,263,040.98) | 67,980,755.44 | ||||
| Provisio n for bad debts of | |||||||||
other receivables (Note
| 4(4)(b)) | 4,485,359.11 | 5,458,295.02 | - | (5,440,362.45) | 4,503,291.68 | ||||
| Provision for impairment of loans and advances (Note 4(6)(a)) | 1,321,883.36 | - | (91,323.02) | - | 1,230,560.34 | ||||
| Provision for impairment of long-term equity investments (Note 4(11)) | 32,348,978.00 | - | - | (2,989,345.98) | 29,359,632.02 | ||||
| Provision for impairment of goodwill (Note 4(17)) | 23,189,587.56 | - | - | - | 23,189,587.56 | ||||
| 133,249,129.96 | 13,798,769.51 | (91,323.02) | (20,692,749.41) | 126,263,827.04 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(21) Short-term borrowings
| Currency | 30 June 2018 | 31 December 2017 | ||
| Unsecured borrowings | RMB | 4,990,000,000.00 | 3,780,000,000.00 | |
| Guaranteed borrowings (a) | HKD | 1,441,106,604.43 | 839,193,530.69 | |
| 6,431,106,604.43 | 4,619,193,530.69 |
(a) As at 30 June 2018 and 31 December 2017, guaranteed borrowings were guaranteed by subsidiaries
within the Group.
(b) As at 30 June 2018, the range of annual interest rate of short-term borrowings was 2.61% to 5.84%
(31 December 2017: 1.79% to 4.72%).
(22) Notes payable and accounts payable
| 30 June 2018 | 31 December 2017 | ||
| Notes payable | - | - | |
| Accounts payable (a) | 6,486,860,179.88 | 6,905,411,234.18 | |
| 6,486,860,179.88 | 6,905,411,234.18 |
(a) Accounts payable
| 30 June 2018 | 31 December 2017 | ||
| Payables to related parties (Note 8(4)(d)) | 181,281,246.80 | 184,529,901.25 | |
| Outsourcing cost payable | 3,591,708,838.88 | 4,015,840,284.97 | |
| Transportation cost payable | 1,225,876,590.16 | 1,274,830,590.56 | |
| Supply and material expenses payable | 770,170,617.37 | 794,531,909.00 | |
| Office and rental fees payable | 581,703,839.73 | 507,649,817.22 | |
| Customs cost payable | 23,446,995.56 | 26,879,147.63 | |
| Others | 112,672,051.38 | 101,149,583.55 | |
| 6,486,860,179.88 | 6,905,411,234.18 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(22) Notes payable and accounts payable (Cont'd)
(a) Accounts payable (Cont'd)
Accounts payable with ageing over 1 year are analysed as follows:
| 30 June 2018 | 31 December 2017 | Main reason for unsettlement | |||
| Transportation cost payable | 9,996,832.20 | 11,615,728.01 | No invoice issued by supplier | ||
| Office and rental fees payable | 1,248,129.87 | 7,628,158.30 | No invoice issued by supplier | ||
| Supply and material expenses payable | 5,913,877.57 | 4,829,139.36 | No invoice issued by supplier | ||
| Outsourcing cost payable | 1,625,294.93 | 257,996.40 | No invoice issued by supplier | ||
| Others | 8,180,131.97 | 3,975,475.15 | |||
| 26,964,266.54 | 28,306,497.22 |
(23) Advances from customers
| 30 June 2018 | 31 December 2017 | ||
| Advances from related parties (Note 8(4)(e)) | 4,627,053.40 | 3,055,558.28 | |
| Prepaid value cards | 194,001,445.87 | 179,373,777.67 | |
| Advances for restricted shares | - | 74,961,331.87 | |
| Advances of freight charges and others | 164,709,492.77 | 110,789,211.47 | |
| 363,337,992.04 | 368,179,879.29 |
As at 30 June 2018, the Group had no advances from c ustomers with ageing over 1 year (31December 2017: Nil).
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(24) Employee benefits payable
| 30 June 2018 | 31 December 2017 | ||
| Short-term employee benefits payable (a) | 2,219,645,637.22 | 2,692,855,506.36 | |
| Defined contribution plans payable (b) | 35,941,462.06 | 28,568,318.87 | |
| 2,255,587,099.28 | 2,721,423,825.23 |
(a) Short-term employee benefits payable
| 31 December 2017 | Increase in the current period | Decrease in the current period | 30 June 2018 | ||||
| Wages and salaries, bonuses, allowances and subsidies | 2,337,559,611.05 | 8,573,012,791.96 | (9,075,210,243.94) | 1,835,362,159.07 | |||
| Employee welfare | 2,731,884.27 | 123,005,644.27 | (125,006,938.24) | 730,590.30 | |||
| Social security contributions | 12,431,752.76 | 254,698,046.14 | (252,116,247.00) | 15,013,551.90 | |||
| Including: Medical insurance | 9,992,017.74 | 209,874,922.47 | (207,351,865.16) | 12,515,075.05 | |||
| Work injury insurance | 1,179,734.17 | 24,891,803.18 | (25,016,424.69) | 1,055,112.66 | |||
| Maternity insurance | 1,260,000.85 | 19,931,320.49 | (19,747,957.15) | 1,443,364.19 | |||
| Housing funds | 2,055,670.52 | 91,875,231.03 | (88,940,310.48) | 4,990,591.07 | |||
| Labour union funds |
and employee
| education funds | 309,321,967.84 | 107,229,311.67 | (105,293,539.49) | 311,257,740.02 | |||
| Non-monetary welfare | 17,206,635.34 | 285,242,030.43 | (295,198,234.04) | 7,250,431.73 | |||
| Others | 11,547,984.58 | 91,162,896.14 | (57,670,307.59) | 45,040,573.13 | |||
| 2,692,855,506.36 | 9,526,225,951.64 | (9,999,435,820.78) | 2,219,645,637.22 |
Non-monetary welfare provided by the Group for employees primarily were non-monetarysubsidies in various forms which were measured at fair value.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(24) Employee benefits payable (Cont'd)
(b) Defined contribution plans
| 31 December 2017 | Increase in the current period | Decrease in the current period | 30 June 2018 | ||||
| Basic pension insurance | 27,418,432.79 | 468,350,173.15 | (461,153,127.66) | 34,615,478.28 | |||
| Unemployment insurance | 1,149,886.08 | 14,887,050.23 | (14,710,952.53) | 1,325,983.78 | |||
| 28,568,318.87 | 483,237,223.38 | (475,864,080.19) | 35,941,462.06 |
(25) Taxes payable
| 30 June 2018 | 31 December 2017 | ||
| Enterprise income tax payable | 370,987,634.15 | 618,806,621.86 | |
| Unpaid VAT | 63,684,730.89 | 142,728,105.12 | |
| Individual income tax payable | 85,108,528.26 | 76,036,735.23 | |
| City maintenance and construction tax payable | 7,696,314.88 | 10,421,795.36 | |
| Educational surcharge payable | 5,841,858.49 | 8,659,894.58 | |
| Others | 8,461,548.13 | 10,814,251.92 | |
| 541,780,614.80 | 867,467,404.07 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(26) Other payables
| 30 June 2018 | 31 December 2017 | ||
| Other payables to related parties (Note 8(4)(f)) | 118,321,794.53 | 40,258,637.37 | |
| Payables of cash on delivery service | 1,019,140,966.81 | 1,322,818,418.19 | |
| Engineering equipment payable | 1,303,000,389.67 | 1,252,087,527.58 | |
| Deposits payable | 341,722,041.57 | 290,331,874.06 | |
| Investments payable | 283,122,100.23 | - | |
| Restricted share repurchases payable | 202,255,537.22 | - | |
| Warranty deposits payable | 126,631,749.93 | 103,501,929.20 | |
| Temporary collection payable | 66,396,047.55 | 59,681,282.15 | |
| Advances payable | 41,894,933.10 | 42,832,354.26 | |
| Interest payable on debentures (Note 4(29)) | 17,336,888.89 | 5,076,383.56 | |
| Professional service fee payable | 13,002,317.80 | 21,993,187.55 | |
| Interest payable for long-term borrowings repayab le in insta llm ent s | 6,195,471.81 | 9,408,928.74 | |
| Interest payable for short-term borrowings | 7,772,248.68 | 5,256,503.88 | |
| Others | 129,226,477.35 | 122,023,003.64 | |
| 3,676,018,965.14 | 3,275,270,030.18 |
Other payables with ageing over 1 year
| 30 June 2018 | 31 December 2017 | Main reason for unsettlement | |||
| Deposits payable | 92,986,150.89 | 114,310,240.01 | Deposit-related business in operation | ||
| Engineering equipment payable | 83,655,724.08 | 121,363,083.82 | Project payment unsettled | ||
| Warranty deposits payable | 39,364,195.05 | 36,248,527.59 | Warranty in effect | ||
| Others | 33,293,311.83 | 19,649,134.15 | Indemnities from |
insurance
| companies on hold and others | |||||
| 249,299,381.85 | 291,570,985.57 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(27) Current portion of non-current liabilities
| 30 June 2018 | 31 December 2017 | ||
| Current portion of long-term borrowings (Note 4(28)) | 1,886,554,943.95 | 2,633,936,397.97 | |
| Current portion of employee incentives (Note 4(31)) | 87,025,034.22 | 147,699,012.89 | |
| Current portion of long-term payables (Note 4(30)) | 10,022,850.45 | 6,075,000.00 | |
| 1,983,602,828.62 | 2,787,710,410.86 |
(28) Long-term borrowings
| 30 June 2018 | 31 December 2017 | ||
| Unsecur ed borr o wings | 1,563,000,000.00 | 2,346,000,000.00 | |
| Guaranteed borrowings (a) | 569,159,681.51 | 661,117,333.45 | |
| Secured borrowings (b) | 2,027,360,374.91 | 1,972,059,345.80 | |
| 4,159,520,056.42 | 4,979,176,679.25 | ||
| Less: Current portion of long-term borrowings (Note 4(27)) | |||
| Unsecur ed borr o wings | (1,563,000,000.00) | (2,337,000,000.00) | |
| Guarante ed borr o wings | (214,132,530.48) | (186,957,698.81) | |
| Secured borrowings | (109,422,413.47) | (109,978,699.16) | |
| (1,886,554,943.95) | (2,633,936,397.97) | ||
| 2,272,965,112.47 | 2,345,240,281.28 |
(a) As at 30 June 2018, the Group's guaranteed borrowings were all guaranteed by subsidiaries within the
Group. In a dd ition, p art of the guaranteed borrowings amounting to RMB 91,200,000.00 (31 December2017: RMB 96,000,00 0.00) was secured by the f ixed deposits of RMB 30,000,000.00 (31 Decem ber2017: RMB 30,000,000.00).
(b) As at 30 June 2018, the secured borrowings of RMB 29,750,000.00 (31 December 2017: RMB
31,500,000.00) were secured by the Group’s land use rights with carrying amount of RMB3,705,95 1.28 (31 Decem ber 2017: RM B 3,761,263.99) and were full y guaranteed by Taisen Holdings.The interest is paid quarterly. The principal should be r epaid during the period from 15 Septem ber2017 to 14 September 2025 by instalments.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(28) Long-term borrowings (Cont'd)
(b) (Cont’d)
As at 30 Jun e 2018, th e secured bank borrowings of RMB 224,00 0,000.00 (31 December 2017: RMB228,000,000.00) were secured by the Group’s fixed assets with carrying amount of RMB351,676,385.07 (3 1 December 2017: R MB 360,555,921.70) a nd land use rights with c arrying amountof RMB 39, 896,26 6.21 ( 31 Dec em ber 2017: RM B 40,3 06,159.3 6) an d were f ully g uarant eed b y TaisenHoldings, and S .F. Express Co., Ltd. (hereinafter “S.F. Express”) was the co-borrower. The interest ispaid quarter ly. The principal should be repaid d uring the perio d from 25 Jul y 2016 to 30 J uly 2023 b yinstalments.
As at 30 Jun e 2018, th e secured bank borrowings of RMB 351,38 0,762.22 (31 December 2017: RMB303,119,555.76) were secured by the Group’s land use rights with carrying amount of RMB1,261,467,263.15 (31 December 2017: RM B 1,278,475,810.52). The interest is paid quarterly. Theprincipal should be repaid during the period from 18 Novem ber 2016 to 18 November 2026 byinstalments.
As at 30 June 2018, the secured bank borrowings of RMB 1,021,886.70 (31 December 2017: RMB
2,554,716.90) were secured b y the Group's fixed ass ets with carrying am ount of RMB 2 7,281,900.26(31 Dec ember 2017: RMB 27,580,635.88). The interest is paid monthly. The principal should be repaidby 26 October 2018.
As at 30 June 2018, the secured b ank borrowings of RMB 1,421,207,725.9 9 (31 December 2017:
RMB 1,406,885,073.14) were secured b y the Group's land use rights with carrying am ount of RMB1,416,151,897.51 ( 31 December 2017: RMB 1,361,248,423.7 2), fixed assets with carrying amount ofRMB 1,010,045,077.10 (31 December 2017: RMB 969, 874,686.77) and investment properties withcarr ying amount of RM B 1,433,941, 203.85 (31 D ecember 2017: RMB 1,537,59 6,994.89). The interestis paid quarterly. The principal should be repaid by 27 September 2027.
(c) As at 30 June 2018, the range of annual interest rate of long-term borrowings was 3.35% to 5.80% (31
December 2017: 2.69% to 5.01%).
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(29) Debentures payable
| 31 December 2017 | Issued in the current period | Amor tisation of premium/discount | 30 June 2018 | ||||||
| Repaid in the current period | |||||||||
| Corporate debentures (a) | 529,406,177.70 | - | 101,226.48 | - | 529,507,404.18 |
(a) Taisen Holdings was approved to issue corporate debentures of no more than RMB 2 billion (inclusive)
in instalments to the public under the R egulatory Permission [2017] No. 1015 as issued by ChinaSecurities Regulator y Commission. In 2 017, Taisen Holdings publicly issued the corporate d ebentures(1st insta lment) (“17SF01”, code “112597” and hereinafter “the Debentures”) to qualified investors. TheDebentures were issued o n 17 October 2017 with a v olum e of RMB 530 million at a nominal inter estrate of 4.60%. The interest is annually calculated and paid at simple intere st rate, and the finalinstalm ent of interes t sha ll be paid with the principal. As at 30 June 2018, ac crued inter est pa yable ondebentures amounted to RMB 17,336,888.89 (31 December 2017: RMB 5,076,383.56) (Note 4(26)).
(30) Long-term payables
| 30 June 2018 | 31 December 2017 | ||
| Advances payable | 42,955,616.39 | - | |
| Long-term payables to China Development Fund Co., Ltd. | 26,634,600.00 | 26,634,600.00 | |
| Others | 3,801,149.94 | - | |
| Less: Current portion of long-term payables (Note 4(27)) | (10,022,850.45) | (6,075,000.00) | |
| 63,368,515.88 | 20,559,600.00 |
(31) Long-term employee benefits payable
| 30 June 2018 | 31 December 2017 | ||
| Employee incentives | 179,691,979.10 | 300,134,734.04 | |
| Less: Current portion of employee incentives (Note 4(27)) | (87,025,034.22) | (147,699,012.89) | |
| Long-term service bonus | 15,110,604.75 | 20,029,404.13 | |
| 107,777,549.63 | 172,465,125.28 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(32) Deferred income
| 31 December 2017 | Increase in the current period | Decrease in the current period | 30 June 2018 | Source | |||||
| Government grants (a) | 133,652,387.03 | 37,982,039.01 | (12,318,561.87) | 159,315,864.17 | Received government grants pending for future recogniti on in income |
(a) The government grants related to deferred income in the current period are presented as follows:
31 December
| Program of government grant | 2017 |
Increas e ingrants in the
| current period | Amount |
recognised i nother income inthe current period
| (Note 4(52)) | 30 June 2018 | Related to assets/income | ||||||
| Comprehensi ve pilot |
program of Shanghai
| modern service industry | 27,642,880.96 | - | (200,654.64) | 27,442,226.32 | Related to assets | |||
| Ancillary grant of |
infrastructure for WuhuE-Commerce Industrial
| Park | 26,991,625.77 | - | (280,625.88) | 26,710,999.89 | Related to assets | |||
| Yancheng Sm art E- |
Commerce Logistics
| Park Project | 10,437,925.58 | - | (108,352.20) | 10,329,573.38 | Related to assets | |||
| Yiwu Comprehensive Service Centre Project | 5,891,717.32 | - | (281,236.10) | 5,610,481.22 | Related to assets | |||
| Grant for maintenance of aircraft engines | 5,971,894.73 | 5,000,000.00 | (365,982.27) | 10,605,912.46 | Related to assets | |||
| Specific subsidy for |
modern service industrygranted by Jinhua
| Transportation Authority | 6,930,249.48 | - | (521,172.70) | 6,409,076.78 | Related to assets | |||
| Enterpris e Expansion Fund | 4,430,555.61 | - | (470,238.06) | 3,960,317.55 | Related to assets | |||
| North China Air Express Pivot | 4,040,994.38 | - | (941,107.20) | 3,099,887.18 | Related to assets | |||
| Special fund of Shanghai |
pilot program of
| standardisation | 3,055,862.16 | - | (335,172.30) | 2,720,689.86 | Related to assets | |||
| Construction subsidy for |
Taizhou Shunfeng E-Commerce Service
| Platform | 1,995,022.65 | - | (364,462.86) | 1,630,559.79 | Related to assets | |||
| Logistics Project of Yiwu Industri al Park | - | 3,051,700.00 | (16,232.45) | 3,035,467.55 | Related to assets | |||
| Construction devel opm ent fund for Tianjin Project | - | 21,000,000.00 | - | 21,000,000.00 | Related to assets | |||
| Compensati on for land |
acquisiti on of Nanning
| Distributi on Hub | - | 3,962,432.64 | (216,132.69) | 3,746,299.95 | Related to assets | |||
| Others | 36,263,658.39 | 4,967,906.37 | (8,217,192.52) | 33,014,372.24 | Related to assets | |||
| 133,652,387.03 | 37,982,039.01 | (12,318,561.87) | 159,315,864.17 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(33) Deferred tax assets and deferred tax liabilities
(a) Deferred tax assets before offsetting
| 30 June 2018 | 31 December 2017 | |||
| Deductible | ||||
temporarydifferences and
deductible tax
| losses |
Deferred tax
| assets | Deductible |
temporarydifferences and
deductible tax
| losses | Deferred tax assets | ||||||
| Deductible tax losses | 1,178,655,632.00 | 249,797,688.21 | 1,091,548,193.65 | 217,169,386.96 | |||
| Accrued expenses | 536,859,372.86 | 115,459,548.43 | 524,774,267.91 | 117,165,279.62 | |||
| Employee incentives | 84,831,207.96 | 21,036,178.92 | 145,929,511.04 | 34,865,513.82 | |||
| Provisio n for asset impairment | 61,641,285.31 | 13,975,704.93 | 103,366,518.65 | 23,643,810.81 | |||
| Deferred incom e | 125,760,112.20 | 30,670,016.46 | 121,588,703.13 | 29,874,596.93 | |||
| Depreciation and |
amortisation
| differences | 214,303,824.08 | 41,661,177.16 | 163,331,191.96 | 32,624,683.05 | |||
| Changes in fair |
value ofavailable-for-sale
| financial assets | 40,960,110.00 | 10,240,027.50 | 9,673,190.80 | 2,418,297.70 | |||
| 2,243,011,544.41 | 482,840,341.61 | 2,160,211,577.14 | 457,761,568.89 | ||||
| Including: | |||||||
| Expected to be |
recovered withinone year
| (inclusive) | 169,329,143.48 | 183,964,832.88 | |||||
| Expected to be |
recovered after
| one year | 313,511,198.13 | 273,796,736.01 | |||||
| 482,840,341.61 | 457,761,568.89 |
(b) Deductible tax losses and deductible temporary differences that are not recognised as deferred tax
assets are analysed as follows:
| 30 June 2018 | 31 December 2017 | ||
| Deductible tax losses (c) | 1,496,572,086.14 | 1,226,148,166.98 | |
| Deductible temporary differences | 19,135,696.56 | 13,283,585.45 | |
| 1,515,707,782.70 | 1,239,431,752.43 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(33) Deferred tax assets and deferred tax liabilities (Cont’d)
(c) The following table shows unrecognised tax losses based on its expiration date:
| 30 June 2018 | 31 December 2017 | ||
| 2018 | 57,636,989.67 | 57,636,989.67 | |
| 2019 | 349,611,108.23 | 349,611,108.23 | |
| 2020 | 155,846,422.30 | 155,846,422.30 | |
| 2021 | 211,606,493.77 | 232,607,985.61 | |
| 2022 | 197,088,247.35 | 224,896,748.31 | |
| 2023 and subsequent years | 524,782,824.82 | 205,548,912.86 | |
| 1,496,572,086.14 | 1,226,148,166.98 |
(d) Deferred tax liabilities before offsetting
| 30 June 2018 | 31 December 2017 | ||||||
| Taxable temporary differences | Deferred tax liabilit i es | Taxable temporary differences | Deferred tax liabilit i es | ||||
| Changes in fair value of | |||||||
available-for-sale
| financi al assets | 110,043,220.00 | 27,510,805.00 | 150,000,000.00 | 37,500,000.00 | |||
| Changes in fair value upon |
reclassifi c ati on ofremaini ng equity of HiveBox Technology toavailable-for-sale
| financi al assets | 446,796,225.96 | 111,699,056.49 | 446,796,225.96 | 111,699,056.49 | |||
| Depreciation of fixed assets | 529,580,309.47 | 129,167,204.14 | 306,016,266.56 | 75,844,812.74 | |||
| Appreciation i n asset value |
arising from businesscombination invol vingenterprises not under
| common control | 40,287,787.00 | 6,043,168.05 | 45,713,787.00 | 6,857,068.05 | |||
| 1,126,707,542.43 | 274,420,233.68 | 948,526,279.52 | 231,900,937.28 | ||||
| Including: | |||||||
| Expected to be recovered |
within one year
| (inclusive) | 52,211,499.31 | 29,821,015.10 | |||||
| Expected to be recovered after one year | 222,208,734.37 | 202,079,922.18 | |||||
| 274,420,233.68 | 231,900,937.28 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(33) Deferred tax assets and deferred tax liabilities (Cont’d)
(e) The net balances of deferred tax assets and liabilities after offsetting are as follows:
| 30 June 2018 | 31 December 2017 | ||
| Deferred tax assets, net | 376,924,917.42 | 396,795,346.02 |
| Deferred tax liabilities, net | 168,504,809.49 | 170,934,714.41 |
(34) Share capital
| 31 December 2017 | Increase in the current period | 30 June 2018 | |||
| Ordinary shares |
denominated in RMB
| (Note 4(36)) | 4,411,015,524.00 | 7,788,643.00 | 4,418,804,167.00 |
| 31 December 2016 | Increase in the current period | 30 June 2017 | |||
| Ordinary shares denominated in RMB | 4,183,678,213.00 | - | 4,183,678,213.00 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(35) Capital reserve
| 31 December 2017 | Increase in the current period | Decrease in the current period | 30 June 2018 | ||||
| Capital premi um | |||||||
| - Capital cont ri bution by shareholders | 15,768,464,376.95 | - | - | 15,768,464,376.95 | |||
| - Business combinations |
involving enterpris esunder common control
| (Note 5(2)) | 20,820,000.00 | - | (37,862,100.00) | (17,042,100.00) | |||
| - Share-based payment in |
capital contribution byshareholders (Not e
| 4(36)) | - | 194,466,894.22 | - | 194,466,894.22 | |||
| Other capital reserve | |||||||
| - Amount of share-based |
payments recognised
| in capital reserve (Note 9(1)) | 419,902.42 | 23,930,346.08 | - | 24,350,248.50 | |||
| - Others | 104,066,451.66 | 14,094,942.26 | (23,663,996.34) | 94,497,397.58 | |||
| 15,893,770,731.03 | 232,492,182.56 | (61,526,096.34) | 16,064,736,817.25 |
| 31 December 2016 | Increase in the current period (i) | Decrease in the current period | 30 June 2017 | ||||
| Capital premi um | 8,229,240,937.62 | - | (65,457,773.47) | 8,163,783,164.15 | |||
| Other capital reserve | 7,457,404.02 | 152,851,299.29 | - | 160,308,703.31 | |||
| 8,236,698,341.64 | 152,851,299.29 | (65,457,773.47) | 8,324,091,867.46 |
(i) The increase in other capital reserve represents the increase in the share of equity of Hive Box
Technology, which is attributable to Shenzhen S.F. Investment Co., Ltd. (“SF Investment”), awholly-owned subsidiary of the Company, and is calculated at the changed shareholdingpercentage subsequent to the capital injection to Hive Box Technology by SF Investment inJanuar y 2017, amounti ng to RMB 152,851,299.29.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(36) Treasury stock
31 December
| 2017 |
Increase in the
| current period | Decrease in the current period | 30 June 2018 | |||||
| Restricted shares | - | 202,255,537.22 | - | 202,255,537.22 |
As stated i n Note 1, t he Com pany implement ed restricted shares incentive plan in 2017 and 2018which 7,788,643.00 ordinary A shares were issued to the incentive recipients raising funds totallingRMB 202,255,537.22, including an increment of share capital of RMB 7,7 88,643.00 and anincrement of capital reserve of R MB 194,466,894.22. In addition, the repur chasing obligation isrecognised in liabilities ( as purchase of treasury stoc k) at the number of restric ted shares issuedmultiplied by the repurchasing price.
(37) Special reserve
| 31 December 2017 | Increase in the current period | Decrease in the current period | 30 June 2018 | ||||
| Safety reserve | - | 2,727,907.70 | (2,727,907.70) | - |
| 31 December 2016 | Increase in the current period | Decrease in the current period | 30 June 2017 | ||||
| Safety reserve | - | 2,101,818.70 | (2,101,818.70) | - |
Pursuant to the Administrative Measures for the Collection and U tilisation of Enterprise WorkSafety F unds ( Cai Qi [2012 ] No. 16) issued by the Minis try of Finance and the State Administr ationof Work Safety on 14 February 2012, 1% of the income from the "Common cargo transportationbusines s" which is operated b y certain subs idiaries of the Group is appropriate d to safet y reserve.The safety reserve is recognised in profit or loss as the "Special reserve" item for the currentperiod. When the accrued safety reserve is used under the pr escribed conditions, it is written offagainst the original amount directly.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(38) Surplus reserve
| 31 December 2017 | Increase in the current period | Decrease in the current period | 30 June 2018 | ||||
| Statutory surplus reserve | 586,501,527.41 | - | - | 586,501,527.41 |
| 31 December 2016 | Increase in the current period | Decrease in the current period | 30 June 2017 | ||||
| Statutory surplus reserve | 272,113,202.75 | - | - | 272,113,202.75 |
(39) Retained earnings
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Retained earnings at the end of the period before adjustment | 11,494,769,383.51 | 7,552,595,222.64 | |
| Less: Business combinations involving enterprises under common control | (5,828,736.29) | - | |
| Retained earnings at the beginning of the period after adjustment | 11,488,940,647.22 | 7,552,595,222.64 | |
| Add: Net profit attributable to shareholders of the parent company | 2,233,730,274.21 | 1,883,626,237.90 | |
| Less: Ordinary share dividends payable (a) | (970,985,880.70) | (418,367,821.30) | |
| Retained earnings at the end of the period | 12,751,685,040.73 | 9,017,853,639.24 | |
(a) The Company held a shareholders’ meeting on 4 April 2018. On the basis of the total share capital of
4,413,572,185 shares, cash dividends of RMB 970,985,880.70 were distributed to all shareholders atRMB 2.2 (including tax) per 10 shares. As at 30 June 2018, the above cash dividends were paid.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(40) Revenue and cost of revenue
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Revenue from main operations (a) | 42,473,927,675.21 | 32,143,762,684.06 | |
| Revenue from other operations (b) | 29,671,836.72 | 17,169,679.75 | |
| Total revenue | 42,503,599,511.93 | 32,160,932,363.81 | |
| Cost of revenue from main operations (a) | 34,456,174,361.56 | 25,338,827,489.92 | |
| Cost of revenue from other operations (b) | 11,038,458.62 | 8,649,775.65 | |
| Total cost of revenue | 34,467,212,820.18 | 25,347,477,265.57 |
(a) Revenue and cost of revenue from main operations:
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
Revenue from
| main operations | Cost of revenue |
from main
| operations |
Revenue from
| main operations | Cost of revenue |
from main
| operations | |||||||
| Express & logistics | 42,160,162,854.77 | 34,214,278,112.75 | 32,003,280,296.22 | 25,245,392,477.96 | |||
| Sales of goods | 54,768,168.17 | 54,683,418.92 | 28,114,357.57 | 26,961,226.58 | |||
| Others | 258,996,652.27 | 187,212,829.89 | 112,368,030.27 | 66,473,785.38 | |||
| 42,473,927,675.21 | 34,456,174,361.56 | 32,143,762,684.06 | 25,338,827,489.92 |
(b) Revenue and cost of revenue from other operations:
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
Revenue from
| other operations | Cost of revenue |
from other
| operations |
Revenue from
| other operations | Cost of revenue |
from other
| operations | |||||||
| Disposals of materials | 7,873,198.29 | 3,839,357.84 | 4,197,279.49 | 2,078,051.52 | |||
| Others | 21,798,638.43 | 7,199,100.78 | 12,972,400.26 | 6,571,724.13 | |||
| 29,671,836.72 | 11,038,458.62 | 17,169,679.75 | 8,649,775.65 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(41) Taxes and surcharges
| For the six months ended 30 June | ||||
| 2018 | 2017 | Payment criterion | ||
| City maintenance and construc tion tax | 37,144,422.91 | 30,626,016.12 | Refer to Note 3 | |
| Educational surcharge | 27,620,854.05 | 22,836,795.88 | Refer to Note 3 | |
| Stamp tax | 23,922,814.60 | 18,404,827.52 | ||
| Property tax | 14,519,251.20 | 6,811,375.93 | ||
| Land use tax | 5,607,928.31 | 5,374,714.63 | ||
| Flood-control project expenses | 347,591.97 | 453,262.89 | ||
| Others | 175,001.91 | 516,624.28 | ||
| 109,337,864.95 | 85,023,617.25 | |||
(42) Selling and distribution expenses
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Employee benefits | 390,427,126.69 | 226,226,625.57 | |
| Information technology service - Outsourcing | 207,446,231.11 | 207,646,356.02 | |
| Marketing expenses | 131,429,384.17 | 58,492,434.53 | |
| IT and information platform expenses | 90,833,874.80 | 60,404,571.65 | |
| Office and rental fees | 84,521,496.14 | 47,052,062.81 | |
| Supply and material expenses | 22,961,218.78 | 10,127,345.40 | |
| Depreciation and amortisation expenses | 9,653,060.72 | 10,179,744.99 | |
| Travelling and transportation expenses | 9,258,655.22 | 5,719,541.17 | |
| Others | 13,037,082.29 | 9,763,462.21 | |
| 959,568,129.92 | 635,612,144.35 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(43) General and administrative expenses
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Employee benefits | 3,096,626,377.07 | 2,548,111,842.21 | |
| Office and rental fees | 221,486,259.66 | 185,353,360.55 | |
| Depreciation and amortisation expenses | 164,701,987.03 | 128,269,952.25 | |
| Professional service fees | 88,914,035.89 | 169,007,980.81 | |
| Travelling and transportation expenses | 65,758,600.92 | 55,779,993.91 | |
| Supply and material expenses | 44,336,206.17 | 38,502,783.87 | |
| Entertainment expenses | 78,961,802.40 | 53,848,381.46 | |
| Taxes | 13,277,832.26 | 16,127,396.33 | |
| Others | 41,460,481.22 | 11,868,760.58 | |
| 3,815,523,582.62 | 3,206,870,451.97 | ||
(44) Research and development expenses
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Employee benefits | 252,830,417.37 | 125,863,179.29 | |
| Outsourcing cost | 41,631,096.16 | 9,200,824.59 | |
| IT and information platform expenses | 33,922,485.60 | 20,032,291.23 | |
| Office and rental fees | 13,650,307.97 | 7,203,023.22 | |
| Supply and material expenses | 2,403,283.33 | 2,155,887.61 | |
| Depreciation and amortisation expenses | 35,540,209.04 | 6,475,841.93 | |
| Travelling and transportation expenses | 5,643,048.04 | 3,070,741.61 | |
| Professional service fees | 3,810,153.83 | 23,800,197.63 | |
| Others | 7,508,567.00 | 5,937,236.51 | |
| 396,939,568.34 | 203,739,223.62 | ||
(45) Finance costs
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Interest on borrowings | 254,113,707.02 | 229,365,372.67 | |
| Less: Capitalised interest (Note 4(14)) | (7,765,050.78) | (3,598,647.07) | |
| Interest expenses | 246,348,656.24 | 225,766,725.60 | |
| Less: Interest income | (256,330,197.35) | (103,952,692.85) | |
| Net exchange (gains)/losses | (5,507,106.10) | 1,298,309.91 | |
| Commission expenses and others | 25,816,237.28 | 41,068,656.48 | |
| 10,327,590.07 | 164,180,999.14 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(46) Expenses by nature
The cost of revenue, sell ing and distribution expense s, general and administrative expenses andResearch and development expenses in the income statement are listed as follows by nature:
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Employee benefits | 9,745,068,357.45 | 7,446,210,867.76 | |
| Outsourcing costs | 18,054,257,870.76 | 12,566,458,797.29 | |
| Transportation costs | 4,433,684,663.63 | 3,718,865,504.68 | |
| Including: Aircraft maintenance costs | 83,909,218.24 | 66,667,020.73 | |
| Office and rental fees | 2,466,710,483.77 | 1,741,340,428.66 | |
| Supply and material expenses | 1,834,735,272.78 | 1,307,145,618.57 | |
| Depreciation and amortisation expenses | 1,673,138,399.40 | 1,479,720,096.40 | |
| IT and information platform expenses | 249,453,285.42 | 198,613,844.80 | |
| Customs costs | 140,239,527.49 | 155,325,366.81 | |
| Claims expenses | 379,775,938.43 | 230,174,110.82 | |
| Marketing expenses | 131,429,384.17 | 58,492,434.53 | |
| Professional service fees | 92,724,189.72 | 193,101,956.74 | |
| Travelling and transportation expenses | 108,480,352.73 | 81,657,690.33 | |
| Cost of revenue of goods | 54,683,418.92 | 26,961,226.58 | |
| Taxes | 14,943,003.13 | 19,581,446.24 | |
| Others | 259,919,953.26 | 170,049,695.30 | |
| 39,639,244,101.06 | 29,393,699,085.51 | ||
For the six months ende d 30 June 2018, th e Group’s governm ent grants which were offset agains texpenses amounted to RMB 20,576,287.11 (for the six months ended 30 June 2017: RMB30,195,625.50) and were fully off set against the cost of revenue. Therein, the amount that wasrecognised in non-recurring profit or loss amounted to RMB 11,541,881.11.
(47) Impairment losses
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Loss from bad debts (Note 4(20)) | 13,798,769.51 | 7,799,377.15 | |
| (Reversal of)/Provision for impairment of loans and advances (Note 4(20)) | (91,323.02) | 761,862.76 | |
| 13,707,446.49 | 8,561,239.91 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(48) Gains or losses arising from changes in fair value
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Losses arising from changes in fair value of financial assets/liabilities held for trading | 4,812,095.66 | 2,557,614.40 | |
(49) Non-operating income and expenses
(a) Non-operating income
| For the six months ended 30 June | ||||
| 2018 | Amount recognised in | |||
non-
| recurring profit or loss in 2018 | 2017 | Amount recognised in | ||
non-
recurringprofit or loss in
2017
| Government grants ( i) | 18,468,239.86 | 18,468,239.86 | 22,991,944.64 | 22,991,944.64 | |||
| Compensation income | 4,997,518.01 | 4,997,518.01 | 20,577,394.95 | 20,577,394.95 | |||
| Income from penalty | 774,761.71 | 774,761.71 | 252,862.46 | 252,862.46 | |||
| Income from sales of w aste products | - | - | 153,561.10 | 153,561.10 | |||
| Others | 31,381,977.29 | 31,381,977.29 | 23,003,589.28 | 23,003,589.28 | |||
| 55,622,496.87 | 55,622,496.87 | 66,979,352.43 | 66,979,352.43 |
(i) Details of government grants
| For the six months ended 30 June | |||
| 2018 | Related to | ||
assets
| /income | 2017 | Related to |
assets
| /income | ||||
| Government reward | 16,641,612.63 | Related to income | 22,849,728.73 | Related to income |
| Tax payment reward | 275,417.23 | Related to income | - | Related to income |
| Others | 1,551,210.00 | Related to income | 142,215.91 | Related to income |
| 18,468,239.86 | 22,991,944.64 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(49) Non-operating income and expenses (Cont'd)
(b) Non-operating expenses
| For the six months ended 30 June | ||||
| 2018 | Amount recognised in | |||
non-
| recurring profit or loss in 2018 | 2017 | Amount recognised in |
non-
| recurring profit or loss in 2017 | |||||||
| Compensation expenses | 10,805,478.76 | 10,805,478.76 | 19,617,516.78 | 19,617,516.78 | |||
| Donation expenses | 21,455,358.49 | 21,455,358.49 | 522,211.67 | 522,211.67 | |||
| Penalties and overdue fines | 8,884,726.16 | 8,884,726.16 | 4,512,778.39 | 4,512,778.39 | |||
| Others | 7,223,137.93 | 7,223,137.93 | 3,472,975.07 | 3,472,975.07 | |||
| 48,368,701.34 | 48,368,701.34 | 28,125,481.91 | 28,125,481.91 |
(50) Investment income/(losses)
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Investment income from wealth management products | 102,830,226.45 | 71,455,021.62 | |
| Investment income from entrusted loans | - | 5,060,242.88 | |
| Share of net gains or losses of investees under the equity method (Note 4(11)) | 8,841,240.97 | (81,242,764.48) | |
| Investment losses on financial assets held for trading | (162,184.43) | (299,934.48) | |
| Gains/(losses) arising from disposal of other long -term equity investments | 90,348,615.94 | (8,974,760.31) | |
| Losses from disposal of available-for-sale financial assets | (2,670,436.99) | - | |
| 199,187,461.94 | (14,002,194.77) | ||
The Group has no significant repatriation restrictions on investment income.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(51) Losses on disposals of assets
| For the six months ended 30 June | ||||
| 2018 | Amount recognised in non | |||
-recurring profit or
| loss in 2018 | 2017 | Amount |
recognised in non-
recurring profit or
| loss in 2017 | |||||||
| Gains on disposals of fixed assets | 12,251,310.61 | 12,251,310.61 | 6,938,505.37 | 6,938,505.37 | |||
| Losses on disposals of fixed assets | (19,234,090.64) | (19,234,090.64) | (13,982,754.73) | (13,982,754.73) | |||
| (6,982,780.03) | (6,982,780.03) | (7,044,249.36) | (7,044,249.36) |
(52) Other income
| For the six months ended 30 June | ||||
| 2018 | 2017 | Related to assets/ | ||
| income | ||||
| Fiscal appropriation for logistics | 49,953,937.49 | 31,344,985.64 | Related to income | |
| Grant from Social Securit y Bureau | 6,318,349.17 | 9,946,192.73 | Related to income | |
| Tax refund | 6,139,529.02 | 10,964,889.14 | Related to income | |
| Amor tisation of | ||||
deferred income
| (Note 4(32)) | 12,318,561.87 | 9,304,008.63 | Related to assets | |
| 74,730,377.55 | 61,560,076.14 |
(53) Income tax expenses
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Current income tax | 757,576,429.29 | 664,436,620.17 | |
| Deferred income tax | 35,251,448.48 | 52,484,659.93 | |
| 792,827,877.77 | 716,921,280.10 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(53) Income tax expenses (Cont'd)
The reconciliation from income tax c alculated based on the applicable tax rates and tota l profitpresented in the income statement to the income tax expenses is listed below:
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Total profit | 3,000,359,268.69 | 2,586,277,310.13 | |
| Income tax expenses calculated at the standard tax rate of 25% | 750,089,817.17 | 646,569,327.53 | |
| Costs, expenses and losses not deductible for tax purposes | 20,399,925.11 | 18,376,943.38 | |
| Effect of prior year tax filing differences | 22,825,134.33 | 51,720,882.12 | |
| Effect of different tax rates among | |||
different subsidiaries and branches
| on income tax expenses | (25,695,497.51) | (11,687,984.94) | |
| Deductible tax losses and deductible |
temporary differences for which nodeferred tax asset was recognised
| in the current period | 90,894,009.49 | 24,666,175.10 | |
| Utilisation of deductible tax losses and |
other deductible temporarydifferences for which no deferredtax asset was recognised in prior
| periods | (49,201,665.06) | (2,938,258.77) | |
| Recognition of deductible tax losses |
and other deduc tib le temporarydifferences for which no deferredtax asset was recognised in prior
| periods | (6,394,907.15) | - | |
| Tax preference | (6,505,389.39) | (3,975,510.37) | |
| Income not subject to tax | (3,583,549.22) | (5,810,293.95) | |
| Income tax expenses | 792,827,877.77 | 716,921,280.10 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(54) Earnings per share
(a) Basic earnings per share
Basic earnings per sh are are calculated b y dividing consolidated net profit attributable to ord inaryshareholders of the parent company by the weig hted average number of outstanding ordinaryshares of the parent company:
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Consolidated net profit attributable to ordinary shareholders of the parent company | 2,233,730,274.21 | 1,883,626,237.90 | |
| Less: Cash dividends distributed to holders | |||
whose restricted shares are expected
| to be released | (554,345.44) | - | |
| Adjusted consolidated net profit attributable to |
ordinary shareholders of the parentcompany for calculation of earnings per
| share | 2,233,175,928.77 | 1,883,626,237.90 | |
| Weighted average number of outstanding ordinary shares of the Company | 4,411,015,524.00 | 4,183,678,213.00 | |
| Basic earnings per share | 0.51 | 0.45 | |
| Including: | |||
| - Basic earnings per share from continuing operations | 0.51 | 0.45 |
(b) Diluted earnings per share
Diluted ear nings per shar e are calc ulated b y dividing cons olidated net profit attr ibutable to ordinar yshareho lders of th e p ar ent c om pan y adj uste d based on the dilutive potential ordinary shares by theadjusted weighted average num ber of outstanding ordinary shares of the Company. For the sixmonths ended 30 June 2018, the Company had di lutive potential ordinary shares (for the sixmonths ended 30 June 2017: Nil):
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Consolidated net profit attributable to ordinary shareholders of the parent company | 2,233,730,274.21 | 1,883,626,237.90 | |
| Weighted average number of outstanding ordinary shares of the Company | 4,411,015,524.00 | 4,183,678,213.00 | |
| Weighted average number of ordinary shares increased from share-based payment | 294,453.28 | Not applicable | |
| Weighted average number of outstanding diluted ordinary shares | 4,411,309,977.28 | Not applicable | |
| Diluted earnings per share | 0.51 | 0.45 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(55) Minority interests
| 30 June 2018 | 31 December 2017 | ||
| Xiamen Ruite | 51,974,694.50 | 57,095,962.02 | |
| Shunxin Expr ess | 33,859,936.16 | - | |
| Others | 1,983,214.08 | (5,290,527.62) | |
| 87,817,844.74 | 51,805,434.40 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(56) Other comprehensive income
Other com prehensive income, the r elated incom e tax effec t and the reclass ifications to profit or loss for the six months ended 30 J une 2018 a nd 30 June2017:
| · | Other comprehensive income in balance sheet | Other comprehensive income in income statement for the six months ended 30 June 2018 | |||
| 31 December 2017 | |||||
Attributable to theparent company -
| net of tax | 30 June 2018 |
Amount incurredbefore tax for the
| current period | Less: |
Reclassi fi cation of
previous othercomprehensiveincome to profit or
| loss |
Less: Income tax
| expenses |
Attributable to theparent company -
| net of tax |
Attribut a ble to
minorityshareholders -
| net of tax | |||||||||||||||
| Share of the other comprehensive |
income of the investee accounted
be reclassified subsequently to
| profit or loss | - | 147,032.76 | 147,032.76 | 147,032.76 | - | - | 147,032.76 | - | |||||||
| Exchange di ffer ences on translation |
of forei gn cur re ncy fina nc ial
| statements | 17,159,014.31 | 32,951,648.82 | 50,110,663.13 | 31,347,438.15 | - | - | 32,951,648.82 | (1,604,210.67) | |||||||
| Change s in fair val ue of available-for-sale financial assets | 202,671,218.52 | (106,747,986.27) | 95,923,232.25 | (127,625,141.88) | 3,066,230.82 | 17,810,924.79 | (106,747,986.27) | - | |||||||
| 219,830,232.83 | (73,649,304.69) | 146,180,928.14 | (96,130,670.97) | 3,066,230.82 | 17,810,924.79 | (73,649,304.69) | (1,604,210.67) |
| Other comprehensive income in balance sheet | Other comprehensive income in income statement for the six months ended 30 June 2017 | ||||
| 31 December 2016 | |||||
Attributable to theparent company - net
| of tax | 30 June 2017 | ||
Amount incurredbefore tax for the
| current period | Less: Reclassi fi cation of | |
previous othercomprehensive
| income to profit or loss |
Less: Income tax
| expenses | |
Attributable to theparent company -
| net of tax | Attribut a ble to | |
minorityshareholders -
| net of tax | |||||||||||||||
| Exchange differences |
on translation offoreign currency
| financial statements | 262,202,380.74 | (90,943,679.08) | 171,258,701.66 | (89,391,308.70) | - | - | (90,943,679.08) | 1,552,370.38 | |||||||
| Changes in fair value |
of available-for-sale
| financial assets | 4,480,306.19 | (114,389,456.99) | (109,909,150.80) | (117,739,262.58) | - | 3,349,805.59 | (114,389,456.99) | - | |||||||
| 266,682,686.93 | (205,333,136.07) | 61,349,550.86 | (207,130,571.28) | - | 3,349,805.59 | (205,333,136.07) | 1,552,370.38 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(57) Notes to the cash flow statement
(a) Cash received relating to other operating activities
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Inflows from cash on delivery service | 24,226,774,735.21 | 21,705,561,211.23 | |
| Interest income | 275,555,934.45 | 103,952,692.85 | |
| Government grants related to income | 109,587,642.65 | 117,623,787.53 | |
| Others | 704,622,829.65 | 322,470,588.75 | |
| 25,316,541,141.96 | 22,249,608,280.36 | ||
(b) Cash paid relating to other operating activities
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Outflows from cash on delivery service | 24,535,583,400.73 | 21,825,269,122.24 | |
| Office and rental fees | 2,687,326,759.30 | 1,580,566,000.21 | |
| Claims expenses | 379,775,938.43 | 230,174,110.82 | |
| IT and information platform expenses | 264,420,482.55 | 198,613,844.80 | |
| Customs costs | 143,671,679.56 | 155,325,366.81 | |
| Professional service fees | 107,278,510.85 | 177,822,711.46 | |
| Travelling and transportation expenses | 114,989,173.89 | 81,657,690.33 | |
| Marketing expenses | 139,315,147.22 | 58,492,434.53 | |
| Entertainment expenses | 83,699,510.54 | 54,907,856.02 | |
| Bank charges | 25,816,237.28 | 41,068,656.48 | |
| Compensation and penalties | 19,690,204.92 | 24,130,295.17 | |
| Donation expenses | 21,455,358.49 | 522,211.67 | |
| Others | 1,109,845,661.28 | 646,834,006.75 | |
| 29,632,868,065.04 | 25,075,384,307.29 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(57) Notes to the cash flow statement (Cont’d)
(c) Cash received relating to other investing activities
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Redemption of bank wealth management products | 16,997,950,000.00 | 24,247,078,767.12 | |
| Asset-related government grants received | 37,982,039.01 | 24,298,689.44 | |
| 17,035,932,039.01 | 24,271,377,456.56 | ||
(d) Cash paid relating to other investing activities
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Purchase of bank wealth management products | 18,276,500,000.00 | 19,195,198,260.25 | |
| Deposits for land bidding | 24,100,000.00 | 30,000,000.00 | |
| 18,300,600,000.00 | 19,225,198,260.25 | ||
(e) Cash received relating to other financing activities
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Capital contribution to Fonair Aviation | |||
Technology Co., Ltd. (“Fonair Aviation”) byShenzhen Mingde Fengtai Investment Co.,
| Ltd. (“Mingde Investment”) | 29,180,000.00 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(58) Supplementary information to the cash flow statement
(a) Notes to the cash flow statement
Reconciliation from net profit to cash flows from operating activities
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Net profit | 2,207,531,390.92 | 1,869,356,030.03 | |
| Add: Impairment losses | 13,707,446.49 | 8,561,239.91 | |
| Depreciation of fixed assets | 1,240,755,912.28 | 1,127,666,681.26 | |
| Depreciation of investment properties | 25,713,133.85 | 24,182,469.61 | |
| Amortisation of intangible assets | 164,471,608.63 | 101,042,808.37 | |
| Amortisation of long-term prepaid expenses | 247,231,821.97 | 226,828,137.16 | |
| Net losses on disposal of fixed assets | 6,982,780.03 | 7,044,249.36 | |
| Gains or losses arising from changes in fair value | 4,812,095.66 | 2,557,614.40 | |
| Finance costs | 235,807,472.81 | 227,065,035.51 | |
| Investment (income)/losses | (199,187,461.94) | 14,002,194.77 | |
| Recognis ed expens es on s hare-based payments | 23,930,346.08 | - | |
| Decrease in deferred tax assets | 27,692,158.40 | 41,663,659.05 | |
| Increase in deferred tax liabilities | 7,559,290.08 | 8,108,837.58 | |
| Amortisation of deferred income | (12,318,561.87) | (9,304,008.63) | |
| Increase in inventories | (52,815,615.42) | (17,871,454.33) | |
| Increase in operating receivables | (417,005,296.67) | (168,062,452.98) | |
| Decrease in operating payables | (1,244,287,402.34) | (1,656,984,968.94) | |
| Net cash flows from operating activities | 2,280,581,118.96 | 1,805,856,072.13 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(58) Supplementary information to the cash flow statement (Cont’d)
(a) Notes to the cash flow statement (Cont'd)
Net increase/(decrease) in cash and cash equivalents
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Cash at the end of the period | 12,169,851,329.47 | 10,366,079,589.57 | |
| Less: Cash at the beginning of the year | (16,081,969,440.60) | (6,369,775,801.18) | |
| Net (decrease)/increase in cash and cash equivalents | (3,912,118,111.13) | 3,996,303,788.39 | |
(b) Cash and cash equivalents
| 30 June 2018 | 31 December 2017 | ||
| Cash on hand | 70,544.56 | 325,311.33 | |
| Cash at bank that can be readily drawn on demand | 11,792,433,481.08 | 15,965,996,254.76 | |
| Other cash balances that can be readily drawn on demand | 319,630,271.45 | 42,850,535.45 | |
| Other balances that can be readily drawn on demand | 57,717,032.38 | 72,797,339.06 | |
| 12,169,851,329.47 | 16,081,969,440.60 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(59) Monetary items denominated in foreign currency
As at 30 June 201 8 and 31 December 2017, the Group's com panies whose recording cur rency isRMB held no significant assets or liabilities denomin ated in foreign currency. Those companiesmainly operating in Hong Kong with HKD as recording currency held assets and liabilitiesdenominated in non-recording currency (mainly USD and RMB), of which the equivalent amountsin HKD (recording currency of companies operating in Hong Kong) and RMB (presentationcurrency of these financial statements) are listed as below:
| 30 June 2018 | |||||||
| Amount in the original curre ncy | Exchange rate to HKD | Equivalent to HKD | Equivalent to RMB | ||||
| Cash at bank and on hand - | |||||||
| RMB | 14,803,748.79 | 1.1861 | 17,558,726.44 | 14,803,748.79 | |||
| USD | 3,467,678.69 | 7.8479 | 27,213,995.59 | 22,944,242.82 | |||
| Notes receivable | |||||||
and accounts
| receivable - | |||||||
| RMB | 13,000.00 | 1.1861 | 15,419.30 | 13,000.00 | |||
| USD | 1,078,016.78 | 7.8479 | 8,460,167.89 | 7,132,805.83 | |||
| Notes payable and accounts payable - | |||||||
| RMB | 205,592.20 | 1.1861 | 243,852.91 | 205,592.20 | |||
| USD | 1,238,324.99 | 7.8479 | 9,718,250.69 | 8,193,501.13 |
| 31 December 2017 | |||||||
| Amount in the original curre ncy | Exchange rate to HKD | Equivalent to HKD | Equivalent to RMB | ||||
| Cash at bank and on hand - | |||||||
| RMB | 43,041,467.58 | 1.1963 | 51,490,507.67 | 43,041,467.16 | |||
| USD | 5,090,954.48 | 7.8169 | 39,795,482.07 | 33,265,314.76 | |||
| Notes receivable | |||||||
and accounts
| receivable - | |||||||
| RMB | - | 1.1963 | - | - | |||
| USD | 1,673,537.25 | 7.8169 | 13,081,873.33 | 10,935,227.10 | |||
| Notes payable and accounts payable - | |||||||
| RMB | 1,620,295.89 | 1.1963 | 1,938,359.97 | 1,620,295.89 | |||
| USD | 1,887,630.47 | 7.8169 | 14,755,418.62 | 12,334,155.02 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
5 Changes in the consolidation scope
(1) Business combinations involving enterprises not under common control
(a) Business combinations involving enterprises not under common control in the current period
| Acquiree | Timing of acquisition | Acquisition cost |
% interest
| acquired |
Method of
| acquisition | Acquisition date |
Basis fordetermining the
| acquisiti on date | Revenue of the |
acquiree from theacquisition date to the
| end of the period | Profit/(loss) of the |
acquiree from theacquisition date to the
| end of the period | ||||||||||||||||
| Shunxin Express (b) | 1 March 2018 | 238,980,712.23 | 58.715% | By cash | 1 March 2018 | Transfer of control ri ght | 242,313,672.39 | (40,051,609.86) | ||||||||
| Shenzhen Fengle Propert y Co., Ltd. | 28 May 2018 | 2,098,660.82 | 60% | By cash | 28 May 2018 | Completion of equity delivery | 458,246.60 | 222,624.11 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
5 Changes in the consolidation scope (Cont'd)
(1) Business combinations involving enterprises not under common control (Cont’d)
(b) Shunxin Express
On 1 March 2018, the Group acquir ed certain assets of Guangdong Xinbang Logistics Co., Ltd.(“Xinbang Logistics”) from an independent third party through Shunxin Expres s and acceptedrelevant personnel and busines ses of Xinbang Logistics. Although the above acquired assets donot reach th e qualification of an independent leg al entity, they are capable of investing, proc essingand producing and related costs or revenue can be independently accounted for. So suchtransaction is considered as a business combination.
Details of the consideration of combination and goodwill recognised are as follows:
| Shunxin Expr ess | |
| Combination cost | |
| - Cash | 238,980,712.23 |
| Less: Share of fair value of identifiable net assets acquired (i) | (71,671,471.72) |
| Goodwill | 167,309,240.51 |
(i) As at the issuing date of the financial statements, the assessment on Shunxin Express had not been
complete d. At the acq uisition dat e, the car rying am ounts of the ac quired assets were considered asthe temporary value of the fair value of identifiable net assets f or calculation of goodwill. If theassessment on Shunxin Express is completed and the fair values of identifiable net assets of theacquired assets are determined, the goodwill of this transaction will be adjusted accordingly.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
5 Changes in the consolidation scope (Cont'd)
(2) Business combinations involving enterprises under common control
% of
| Acquiree | acquisition | Basis of business |
combinations involving
enterprises under
| common control |
Combination
| date |
Basis of
| combination date | Acquiree’s |
revenue for the
period from 1
the combinati on
| date |
Acquiree’s net lossfor the period from 1January 2018 to the
| combination dat e |
Acquiree’srevenue in
| 2017 |
Acquiree’s net
| loss in 2017 | Acquiree’s cash flows from operating |
activities for the
period from 1January 2018 to the
| combination dat e | Acquiree’s net cash flows for the period from 1 January 2018 to the combinati on date | ||
| Fonair |
| Aviation | 100% | The Group and Fonair |
Aviation were underthe control of MingdeHoldings prior andsubsequent to theacquisiti on of FonairAviation and suchcontrol was not
| temporary. | 19 June 2018 |
Control
| obtained | 145,358.01 | (13,494,110.16) | - | (5,828,736.29) | 134,621.81 | 10,177,220.24 |
On 30 J une 2 018, Shen zhen S. F. Chuangxing Investment Co., L td. ( “Chua ngxin g Investment”), one of the Company’s subsidiaries, acquired 100% equityof Fonair Aviation held by Mingde Investment, a related party which was under common control of Mingde Holdings, the ultimate parent company. Thecombination date of this transaction is 19 June 2018, when Chuangxing Investment effectively obtained the control over Fonair Aviation. This transaction isclassified as a business combination involving enter prises under common control as Fonair Aviation and Chuangxing Investment are both ultimatelycontrolled by Mingde Holdings prior and subsequent to the combination and the control is not temporary.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
5 Changes in the consolidation scope (Cont'd)
(2) Business combinations involving enterprises under common control (Cont’d)
The combination cost of the business combinations and carrying amounts of net assets acquiredare as follows:
| Combination cost - Cash | 67,042,100.00 |
| Less: Carrying amount of net assets obtained | (31,033,843.70) |
| 36,008,256.30 | |
| Recover: Retained earnings realised by the acquiree |
attributable to the acquirer before the
| combination date | (18,966,156.30) |
| Adjustment to capital reserve | 17,042,100.00 |
| The carrying amounts of assets and liabilities of Fonair Aviation at the combination date are as | |
follows:
| Carrying amount | ||||
| Combination date | 31 December 2017 | |||
| Cash at bank and on hand | 10,210,489.44 | 33,269.20 | ||
| Accounts receivable | 172,976.03 | - | ||
| Advances to suppliers | 838,527.71 | 437,093.15 | ||
| Other receivables | 454,758.83 | 393,742.54 | ||
| Other current assets | 635,491.86 | 192,056.53 | ||
| Fixed assets | 1,667,739.90 | 172,209.13 | ||
| Intangible assets | 851,023.15 | - | ||
| Other non-current assets | 33,645,859.36 | 14,600,000.00 | ||
| Less: Accounts payable | (94,656.62) | - | ||
| Employee benefits payable | (1,351,806.99) | (717,762.62) | ||
| Taxes payable | (411,320.94) | (109,736.39) | ||
| Other payables | (15,585,238.03) | (9,607.83) | ||
| Net assets obtained | 31,033,843.70 | 14,991,263.71 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
5 Changes in the consolidation scope (Cont'd)
(3) Other changes in the consolidation scope
(a) In 2018, the Group set up the following subsidiaries by cash:
| Capital commitment | Actual investment | Method of acquisition | |||
| Shenzhen S.F Runtai Management Consulting Co., Ltd. | RMB 5 million | RMB 2 million |
B y n ew
| establishment | ||
| Sh unyuan Leasing (Tianjin) |
Co., Ltd. (“Shunyuan
| Leasing”) | RMB 170 million | RMB 170 million |
B y n ew
| establishment | |||||
| S.F Technology (Beijing) Co., Ltd. | RMB 5 million | Investment uncompleted | B y n ew establishment | ||
| Fengtu Technology (S henzhen) Co., Ltd. | RMB 8 million | Investment uncompleted | B y n ew establishment | ||
| S.F Pharmaceutical Supply Chain Hubei Co., Ltd. | RMB 30 million | Investment uncompleted | B y n ew establishment | ||
| Ezhou Shunlu Logistics Co., Ltd. | RMB 50 million | Investment uncompleted | B y n ew establishment | ||
| Zhejiang Fengchi Network Technology Co., Ltd. | RMB 10 million | Investment uncompleted | B y n ew establishment | ||
| Tianjin S.F Import and Export Trading Co., Ltd. | RMB 5 million | Investment uncompleted | B y n ew establishment | ||
| Xiamen Fengyutai Industrial Park Management Co., Ltd. | RMB 200 million | Investment uncompleted | B y n ew establishment | ||
| Ganzhou Fengtai Industrial Park Management Co., Ltd. | RMB 20 million | Investment uncompleted | B y n ew establishment | ||
| Nanchang Fengtai Industrial Park Management Co., Ltd. | RMB 100 million | RMB 50 million | B y n ew establishment | ||
| Xuzhou Fengtai Industrial Park Management Co., Ltd. | RMB 150 million | Investment uncompleted | B y n ew establishment | ||
| Ma’anshan Fengyutai |
Enterprise Management
| Co., Ltd. | RMB 80 million |
Investment
| uncompleted |
B y n ew
| establishment | |||||
| Jinjiang Jietai Enterprise Management Co., Ltd. | RMB 110 million | Investment uncompleted | B y n ew establishment | ||
| Lhasa Fengtai Industrial Park Management Co., Ltd. | RMB 40 million | RMB 14.22 million | B y n ew establishment | ||
| Shanxi Fengnong T echnology Co., Ltd. | RMB 5 million | Investment uncompleted | B y n ew establishment | ||
| S.F Multimodal Transport Co., Ltd. (“Multimodal Transport”) | RMB 200 million | Investment uncompleted | B y n ew establishment | ||
| Wulian Yuncang (Chengdu) Technology Co., Ltd. | RMB 20 million | RMB 5 million | B y n ew establishment | ||
| Zhongtian Cai (Shenzhen) Technology Co., Ltd. | RMB 27 million | RMB 9 million | B y n ew establishment |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
5 Changes in the consolidation scope (Cont'd)
(3) Other changes in the consolidation scope (Cont’d)
(a) In 2018, the Group set up the following subsidiaries by cash (Cont’d):
| Capital commitment | Actual investment | Method of acquisition | |||
| SF Express Ltd. | CAD 1 million | Investment uncompleted | B y n ew establishment | ||
| Jolly Union Limited | USD 1 | Investment uncompleted | B y n ew establishment | ||
| Bright Hazel Limited | USD 1 | Investment uncompleted | B y n ew establishment | ||
| Equal Wind Limited | USD 1 | Investment uncompleted | B y n ew establishment | ||
| Joyous Advantage Limited | USD 1 | Investment uncompleted | B y n ew establishment | ||
| Superior Hawk Limited | USD 1 | Investment uncompleted | B y n ew establishment | ||
| Top Haze Limited | USD 1 | Investment uncompleted | B y n ew establishment | ||
| Castle Way Corporation Limited | HKD 1 | Investment uncompleted | B y n ew establishment | ||
| World Brave Limited | HKD 1 | Investment uncompleted | B y n ew establishment | ||
| SF Holding Investment Limited | USD 10,000 | Investment uncompleted | B y n ew establishment | ||
| Exaleap SF Limited | USD 51 | Investment uncompleted | B y n ew establishment | ||
| Crystal Era Limi ted | USD 1 | Investment uncompleted | B y n ew establishment | ||
| Fame Trend International Limited | HKD 1 | Investment uncompleted | B y n ew establishment | ||
| Foshan Fengyutai Industrial |
Park Operation
| Management Co., Ltd. | RMB 90 million | RMB 90 million |
B y n ew
| establishment | ||
| Chengdu Yifeng Home |
Technology Service Co.,
| Ltd. | RMB 0.8 million | RMB 0.5 million |
By new
| establishment | |||||
| Ezhou Fengtai Qisheng Logistics Development Co., Ltd. | RMB 50 million | RMB 40 million |
B y n ew
| establishment | ||||
| Ezhou Fengyutai Helin Logistics Development Co., Ltd. | RMB 50 million |
Investment
| uncompleted |
B y n ew
| establishment | |||||
| Guangzhou S.F. Information Services Co., Ltd. | RMB 10 million | Investment uncompleted | B y n ew establishment |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
6 Interests in other entities
(1) Interests in subsidiaries
(a) First-tier and second-tier subsidiaries of the Group are as follows:
| Shareholding (%) | |||||||
| Place of registration | Major business location | Registered capital | Nature of business | Direct | Indirect | Method of acquisiti on | |
| Taisen Holdings | Shenzhen | Shenzhen | RMB 2 billion | Investment hol ding | 100% | - | Reverse acquisitions |
| S.F. Express | Shenzhen | Shenzhen | RMB 150 million | ||||
Internati onal frei ght f orwarding, domest i c and
| international express service, etc. | - | 100% | Business combination |
involving enterpris es under
| common control | |||||||
| SF Technology | Shenzhen | Shenzhen | RMB 50 million | Technical maintenance and development service | - | 100% | By new establishment |
| Shenzhen Shunlu Logist ics Co., Ltd. | Shenzhen | Shenzhen | RMB 150 million | Cargo transportat i on and freight forwarding | - | 100% | Business combination |
involving enterpris es under
| common control | |||||||
| Anhui S.F. Telecommunication Service Co., Ltd. | Anhui Province | Anhui Province | RMB 50 million | Value-added t elecommunication service | - | 100% | By new establishment |
Shenzhen Yuhui Management Consulting
| Co., Ltd. (i) | Shenzhen | Shenzhen | RMB 250 million | Consulting service | - | 100% | Business combination |
involving enterpris es under
| common control | |||||||
| Shenzhen S.F. Supply Chain Co., Ltd. | Shenzhen | Shenzhen | RMB 700 million | Supply chain management and other services | - | 100% | By new establishment |
| SF Airlines | Shenzhen | Shenzhen | RMB 1,500 million | Transport service of aviation cargo | - | 100% | Business combination |
involving enterpris es under
| common control | |||||||
| Dongguan Jiada Express Servic e Co., Ltd. | Dongguan | Dongguan | RMB 4 million | Cargo express agent servic e | - | 100% | Business combination |
involving enterpris es under
Shenzhen Fengtai E-Commerce Industrial
| common control | |||||
| Park Asset Management Ltd. | Shenzhen | Shenzhen | RMB 4 billion |
E-Commerce industrial park asset
| management | - | 100% | Business combination |
involving enterpris es under
| common control | |||||||
| Shenzhen Fengtai E-Commerce Industrial Park Investment Ltd. | Shenzhen | Shenzhen | RMB 55 million | Management consulting | - | 100% | By new establishment |
| Shenzhen S. F. Airport Investment Co., Ltd. | Shenzhen | Shenzhen | RMB 100 million | Industrial investment | - | 100% | By new establishment |
| SF Holding Limited | Hong Kong | Hong Kong | HKD 10,000 | Investment hol ding | - | 100% | Business combination |
involving enterpris es under
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
6 Interests in other entities (Cont'd)
(1) Interests in subsidiaries (Cont'd)
(a) First-tier and second-tier subsidiaries of the Group are as follows (Cont'd):
| Shareholding (%) | ||||||||
| Place of registration | Major business location | Registered capital | Nature of business | Direct | Indirect | Method of acquisiti on | ||
| Group Finance Company | Shenzhen | Shenzhen | RMB 1,000 million | Financing, wealth managem ent and consulting services | - | 100% | By new establishment | |
| Chuangxing Investm ent (ii ) | Shenzhen | Shenzhen | RMB 150 million | Industri al investm ent | - | 100% | By new establishment | |
| Shenzhen Fengnong Technology Co., Ltd. | Shenzhen | Shenzhen | RMB 5 million | Retail | - | 100% | By new establishment | |
| Shenzhen Fenglang Supply Chain Co., Ltd. | Shenzhen | Shenzhen | RMB 30 million | Supply chain management and other services | - | 100% | By new establishment | |
| Shenzhen S.F Runtai Management Consulti ng Co., Ltd. (iii) | Shenzhen | Shenzhen | RMB 5 million | Consulting service | - | 100% | By new establishment | |
| Shunyuan Leasing (iv) | Tianjin | Tianjin | RMB 170 million | Leasing business | - | 100% | By new establishment | |
| Multimodal Transport (v) | Shenzhen | Shenzhen | RMB 200 million | Goods delivery services | - | 100% | By new establishment | |
(i) On 21 June 2018, Taisen Holdings increased its investment in Shenzhen Yuhui Management Consulting Co., Ltd., whose registered capital increased from
RMB 7.86 million to RMB 250 million.
(ii) On 21 June 2018, Taisen Holdings increased its investment in Chuangxing Investment, whose registered capital increased from RMB 50 million to RMB
150 million.
(iii) On 8 March 2018, the Group established Shenzhen S.F Runtai Management Consulting Co., Ltd., with a total capital commitment of registered capital of
RMB 5 million.
(iv) On 2 May 2018, the Group established Shunyuan Leasing, with a total capital commitment of registered capital of RMB 170 million.
(v) On 23 May 2018, the Group established Multimodal Transport, with a total capital commitment of registered capital of RMB 200 million.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
6 Interests in other entities (Cont'd)
(1) Interests in subsidiaries (Cont'd)
(b) Subsidiaries in which the Group has significant minority interests
As at 30 Ju ne 2018, the minori ty interests in th e Group’s subsidiar ies had no sig nificant influenceon the Group.
(2) Interests in joint ventures and associates
(a) The Group’s associates have no significant influence on the Group and are summarised as follows:
| Ending balance/ | Opening balanc e/ | ||
| Amount in the current period | Amount in the prior period | ||
| Aggregated carrying amount of investments (Note 4(11)(b)) | 510,181,569.52 | 504,388,920.22 | |
| Aggregation of the following items in proportion: | |||
| Net loss | 5,412,722.45 | (79,397,315.14) | |
| Other comprehensive income | - | (238,150.33) | |
| Total comprehensive income | 5,412,722.45 | (79,635,465.47) |
As at 30 Jun e 2018, an inves tment loss of RMB 13,429,763.49 was unrecognise d (30 June 2017:
RMB 5,0 14,985. 66) b ecaus e the c arr ying am ount of long -term equity investm ents in investees waswritten down to RMB 0.
(b) The Group’s joint ventures have no significant influence on the Group and are summarised as
follows:
| Ending balance/ | Opening balanc e/ | ||
| Amount in the current period | Amount in the prior period | ||
| Aggregated carrying amount of investments (Note 4(11)(a)) | 557,870,522.73 | 100,294,970.45 | |
| Aggregation of the following items in proportion: | |||
| Net income/(loss) | 3,428,518.52 | (1,697,938.84) | |
| Other comprehensive income | 147,032.76 | 212,420.23 | |
| Total comprehensive income | 3,575,551.28 | (1,485,518.61) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
7 Segment information
The reportable segments of the Group are the business units that provide different s ervices.Different businesses require different technologies and marketing strategies, and the Group,therefore, independently manages their operations and eva luates operating results, in order tomake decisions about resources allocations and performance evaluations.
The segment information is not presented any more since the Group mainly prov ides express &logistics service and there is only one major business segment.
8 Related parties and related party transactions
(1) General information of the controlling shareholder and subsidiaries
The general information and other related information of the subsidiaries are set out in Note 6(1).
(a) General information of the controlling shareholder
| Place of registration | Nature of business | |
| Mingde Holdi ngs | Shenzhen | Investment |
The Company’s ultimate controlling party is Mingde Holdings.
(b) The balances and changes of registered capital of the controlling shareholder
| 31 December 2017 | Increase in the current period | Decrease in the current period | 30 June 2018 | ||||
| Mingde Holdi ngs | 113,405,734.21 | - | - | 113,405,734.21 |
(c) The percentages of shareholding and voting rights in the Company held by the controlling
shareholder
| 30 June 2018 | 31 December 2017 | ||||||
| Shareholding (%) | Voting rights (%) | Shareholding (%) | Voting rights (%) | ||||
| Mingde Holdi ngs | 61.15% | 61.15% | 61.25% | 61.25% | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(2) Nature of related parties that do not control or are not controlled by the Company
| Relationship with the Company | |
| Taiwan S.F. Express Holdings Co., Ltd. |
Note 1
| Controlled by close family members of the ultimate controlling person in the past 12 months as at 31 December 2017 | |
| Shenzh en H englu Logistics Co., Ltd. | Significantly influenced by the key management of the Company |
| Shenzh en Fengmaiwang Network Technol ogy Co., Ltd. (“Fengmaiwang Technology”) | Controlled by the ultimate controlling person of the Company |
| Ping An Insurance (Group) Company of China, Ltd. (“Ping An Insuranc e”) and its subsidiaries | Significantly influenced by the key management of the Company |
| China Pacific Insurance (Group) Co., Ltd. (“Pacific Insurance”) and its subsidiaries | Significantly influenced by the key management of the Company |
| Juneyao Airlines C o., Ltd. | Significantly influenced by the key management of the Company i n the past 12 months |
| McDonal d's (China) Co., Ltd. (“McDonald's”) and its subsidiaries |
Note 6
| Significantly influenced by the key management of the Company | |
| Geling Information | The Grou p’s joint venture |
| Shengh ai Information | The Grou p’s joint venture |
| POST11O? | The Grou p’s joint venture |
| ZBHA and its subsidiariesNote 7 | The Grou p’s joint venture |
| Fengch engda Network Technology Co., Ltd. | Controlled by the ultimate controlling person of the Company |
| Hive Box Technology | Ass ociate of the ultimate controlling person |
| Shenzh en Shun Jie Feng Da Express Co., Ltd. | The Grou p’s associate |
| Zhuhai Sui Bian | The Grou p’s associate |
| SF Lottery | The Grou p’s associate |
| Litt le Red Hat Issuance Co., Ltd. | The Grou p’s associate |
| Beijin g Little Red Hat Network Technol ogy Co., Ltd. |
Note 5
| Subsidiary of the Group’s associate | |
| Shangh ai Qianqu Network Technology Co., Ltd. | The Grou p’s associate |
| Hubei International Logistics Airport Co., Ltd. | The Grou p’s joint venture |
| Qianqu Im port & Export Co., Ltd.Not e 2 | Subsidiary of the Group’s associate |
| Shenzhen Weirong Enterprise Development Co., Ltd. | Controlled by the ultimate controlling person of the Company |
| S. F. Holding (Group) Commerce Co. , Ltd. | Controlled by the ultimate controlling person of the Company |
| Shenzh en SF C ommerce Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Foshan S hunxiaofeng Commerce Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Meizho u S.F. Commercial Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(2) Nature of related parties that do not control or are not controlled by the Company (Cont'd)
| Relationship with the Company | |
| Zhuhai Shunxiaofeng Commercial Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Zhongs han Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Huizhou S .F. Commercial Co., Lt d.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Maoming Shunyifeng Commercial Co., Ltd. |
Note 3
| Controlled by the ultimate controlling person of the Company in the past 12 months | |
| Yangjiang S.F. Commerce Co., Ltd. |
Note 3
| Controlled by the ultimate controlling person of the Company in the past 12 months | |
| Heyuan S.F. Commercial Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Changz hou Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Zhanjiang Shunxiaofeng Commerce Co., Ltd. |
Note 3
| Controlled by the ultimate controlling person of the Company in the past 12 months | |
| Shantou S.F. Commercial Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Jiangm en Shunyifeng Commercial Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Jieyang S.F. Commercial Co., Lt d. |
Note 3
| Controlled by the ultimate controlling person of the Company in the past 12 months | |
| Chaozh ou S .F. Commerce Co., Ltd. |
Note 3
| Controlled by the ultimate controlling person of the Company in the past 12 months | |
| Shaogu an Shunyifeng Commerce Co., Ltd. |
Note 3
| Controlled by the ultimate controlling person of the Company in the past 12 months | |
| Jiangsu Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Suzhou Industrial Park Shunhengshun Commerce Co., Ltd. |
Not e 3
| Controlled by the ultimate controlling person of the Company | |
| Lianyungang Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Zhenjiang S.F. Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Xuzhou S hunxiaofeng Commerce Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Suqian Shunxiaofeng Commerce Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Huai'an Shunxiaofeng Commerce Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Yangzhou Shunheng Commer ce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Taizhou Shunjiefeng Commerc e Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Qinghai Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Wuxi Shunf engshun Commerce Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Yancheng Shunxiaofeng C om merce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Zhejiang S.F. Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Wenzhou S.F. Commercial Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Taizhou Shunxiaofeng Commerc e C o., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Shaoxing Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Zhoush an Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Ningbo S hunxiaofeng Commerce Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Huzhou Shun Xiao Commerce Co., Ltd.Not e 3 | Controlled by the ultimate controlling person of the Company |
| Jiaxing Shun Xiao Commerce Co., Ltd.Note 3 | Controlled by the ultimate controlling person of the Company |
| Jinhua S.F. Commercial Co., Lt d.Not e 3 | Controlled by the ultimate controlling person of the Company |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(2) Nature of related parties that do not control or are not controlled by the Company (Cont'd)
| Relations hip with the Company | |
| Quzhou Shunyifeng Comm erce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Liaoning Shunyif eng Commerc i al Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of t he Company |
| Dalian Shunyifeng Commerce Co., Lt d.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Shandong Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Qingdao Shunyifeng Commercial Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Beijing Shunxiaofeng Commercial Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Shanghai S.F. Industrial Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Xiamen S.F. Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Chongqing Shunxiaofeng Comm erce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Jiangxi Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Tianjin Shunfengshun Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Inner Mongolia S.F. Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Shanxi Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Jilin S.F. Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of t he Company |
| Xinjiang Shunyifeng Commerce Co. , Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Guangxi Shunyifeng Commerc e Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Hainan S.F. Commercial Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Shaanxi Shunyifeng Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Ningxia Shunyifeng Commerc i al Co., Ltd. |
Note 3
| Controlled by the ultimat e cont rolling person of the Company in the past 12 months | |
| Hunan Shunyifeng Commerci al Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Hubei Shunyifeng Commerc i al Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of t he Company |
| Anhui Shunxiaofeng Comm erce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Henan Shunyifeng Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Guizhou Shunyifeng Commerc e Co., Ltd. |
Note 3
| Controlled by the ultimat e cont rolling person of the Company in the past 12 months | |
| Gansu S.F. Commercial Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Hebei Shunxiaofeng Commerc e Co., Ltd.Note 3 | Controlled by the ult imat e cont rolling person of the Company |
| Fujian Shunyifeng Comm ercial Co., Lt d.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Sichuan Shunyif eng Commerc e Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Heilongjiang Shunyi f eng Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Yunnan Shunyiheng Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Dongguan Shunxiaofeng Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Zhaoqing Shunyif eng Commerc e Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Dongguan S.F. Commercial Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Shenzhen S.F. Electronic Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Beijing S.F. E-Commerce Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| S. F. You Xuan International Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
| Shenzhen Shunshang Investment Co., Ltd.Note 3 | Controlled by the ultimat e cont rolling person of the Company |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(2) Nature of related parties that do not control or are not controlled by the Company (Cont'd)
| Relations hip with the Company | |
| Zhiye Enterprise Co., Ltd. ("Zhi ye Enterpri se") | Controlled by the ultimat e cont rolling person of the Company |
| Ma'anshan Shuntai Rare Eart h & New Materials Co., Ltd. | Controlled by the ultimat e cont rolling person of the Company |
| Shenzhen Shunheng Rongfeng I nvestm ent Co., Ltd. | Controlled by the ultimat e cont rolling person of the Company |
| Shenzhen Hengyi Logist ics Service Co., Lt d. | Controlled by the ultimat e cont rolling person of the Company |
| Shenzhen Shuncheng Lefeng Factoring Co., Lt d. | Controlled by the ultimat e cont rolling person of the Company |
| Shenzhen S.F Hefeng Microfinance Co., Ltd. | Controlled by the ultimat e cont rolling person of the Company |
| Shuncheng Financi al Leasi ng (Shenzhen) Co., Ltd. | Controlled by the ultimat e cont rolling person of the Company |
| Shuncheng Qianhai I Financial Leasing (Shenz hen) Co., Ltd. |
Note 4
| Controlled by the ultimat e cont rolling person of t he Company | |
| Shuncheng Qianhai II Financi al Leasing (Shenzhen) Co., Ltd. |
Note 4
| Controlled by the ultimat e cont rolling person of the Company | |
| Shuncheng Qianhai III Financial Leasi ng (S henzhen) Co., Ltd. |
Note 4
| Controlled by the ultimat e cont rolling pers on of t he Company | |
| Shuncheng Qianhai IV Financi al Leasing (Shenzhen) Co., Ltd. |
Note 4
| Controlled by the ultimat e cont rolling person of the Company | |
| Shuncheng Qianhai V Financial Leasing (S henzhen) Co., Ltd. |
Note 4
| Controlled by the ultimat e cont rolling person of t he Company | |
| Shuncheng I (Tianjin) Financial Leasing Co., Ltd.Note 4 | Controlled by the ultimat e cont rolling person of the Company |
| Shuncheng II (Tianjin) Financial Leasing Co., Ltd.Note 4 | Controlled by the ultimat e cont rolling person of the Company |
| Shuncheng III (Tianjin) Financial Leasing Co., Ltd.Note 4 | Controlled by the ultimat e cont rolling person of the Company |
| Shunheng Financial Leasing (Tianjin) Co., Ltd.Note 4 | Controlled by the ultimat e cont rolling person of the Company |
| Shuncheng IV (Tianjin) Financial Leasi ng Co., Ltd.Note 4 | Controlled by the ultimat e cont rolling person of the Company |
| Shuncheng V (Tianjin) Financial Leasing Co., Ltd.Note 4 | Controlled by the ultimat e cont rolling person of the Company |
| Shenzhen S.F. Financing Investment Management Co., Ltd. ("Financ i ng Investm ent") | Controlled by the ultimat e cont rolling person of the Company |
| Suzhou Ruihuang Equit y Investment Managem ent Limited Part nership ("Suzhou Ruihuang" ) | Another company in which a director of the Group acts as managing partner |
| SF Foundation | Organisati on sponsored by controlling s harehol ders and t he |
Company’s subsidiaries, in which director and supervisor of the
| company serve on the Board of Management | |
| Mingde Investm ent | Controlled by the ultimat e cont rolling person of t he Company |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(2) Nature of related parties that do not control or are not controlled by the Company (Cont'd)
Note 1: It was related party which controlled by close family mem bers of the ultimate controlling
person and currently it has been transferred to independ ent third parties: Able ExpressInvestment Limited trans ferred Taiwan S.F. Express Holdings Co., Ltd. to an independentthird part y on 31 March 2 016. Purs uant to t he Listi ng Rules of Shenzhen Stock Exchange,Taiwan S.F. Express Holdings Co., Ltd. was no longer associated with the Group since 31March 2017. The related party transac tions with Taiwan S.F. Express Holdings Co., Ltd.disclosed in the financi al statements refer to the trans action am ounts for the peri od from 1January 2017 to 31 March 2017. Ther efore, the Group’s related party transactions w ithTaiwan S.F. Express Holdings Co., Ltd. in the period from January to June 2018 arepresented as “Not applicable”;
Note 2: It is a subsidiary of Shanghai Qianqu Network Technology Co., Ltd. Shanghai Qianqu
Network Technology Co., Ltd. and its subsidiaries ar e hereinafter referred to as “QianquNetwork and its subsidiaries”;
Note 3: They are Commerce Holding and its subsidiaries. On 1 O c tober 2015, the Group lost its de
facto c ontrol over Shenzhen SF Commerce Co., Ltd. and Shenzhen S.F. ElectronicCommerce Co., Ltd., and de-consolidated them from the date when such control ceased;
Note 4: They are subsidiaries of Shuncheng Financial Leasing;
Note 5: It is a subsidiary of Little Red Hat Issuance Co., Ltd. Little Red Hat Iss uance Co., Ltd. and
its subsidiary Beijing Little Red Hat Network Technology Co., Ltd. are hereinafter referred toas “Little Red Hat and its subsidiary”;
Note 6: It bec ame a relate d party of the Group in July 2017 as k ey managem ent of the Group had
significant influence over it. Ther efore, the transactions between the Group and it in theperiod from January to June 2017 are presented as “Not applicable”;
Note 7: It is a new j oint ve n tur e of the G roup for the current period, so the transactions between the
Group and it in the period from January to June 2017 are presented as “Not applicable”.
(3) Related party transactions
(b) Pricing policies
The pric ing method of transactions and transaction price between the Company and related partiesare determined, following arm's length principle, by making reference to the market price or throughnegotiation among parties.
(c) Air freight income
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Taiwan S.F. Express Holdings Co., Ltd. | Not applicable | 4,686,799.97 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(3) Related party transactions (Cont’d)
(d) Income from courier service, combined transport and freight forwarding services
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| McDonald’s and its subsidiaries | 102,481,373.75 | Not applicable | |
| Commerce Holding and its subsidiaries | 56,375,336.54 | 64,537,173.37 | |
| Ping An Insurance and its subsidiaries | 38,999,609.26 | 30,823,152.29 | |
| Pacific Insurance and its subsidiaries | 9,151,322.54 | 4,978,221.09 | |
| Fengchengda Network Technol ogy Co., Ltd. | 6,145,205.76 | 554,060.06 | |
| Geling Information | 2,304,109.62 | 1,418,692.44 | |
| Fengmaiwang Technology | 1,875,966.15 | 204,087.93 | |
| Shenzhen Henglu Logistics Co., Ltd. | 725,251.59 | 354,321.78 | |
| Taiwan S.F. Express Holdings Co., Ltd. | Not applicable | 82,562,450.39 | |
| Others | 816,640.43 | 544,918.11 | |
| 218,874,815.64 | 185,977,077.46 | ||
(e) Income from royalties for IT system and trademark
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Taiwan S.F. Express Holdings Co., Ltd. | Not applicable | 14,652,004.49 | |
(f) Communication income
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Hive Box Technology | 13,788,232.03 | 8,210,474.58 | |
| Taiwan S.F. Express Holdings Co., Ltd. | Not applicable | 2,906,454.19 | |
| Commerce Holding and its subsidiaries | - | 1,336,556.81 | |
| Others | 565,644.90 | - | |
| 14,353,876.93 | 12,453,485.58 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(3) Related party transactions (Cont'd)
(g) Commission income for collection and settlement on behalf of related parties
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Shenzhen S.F Hefeng Microfinance Co., Ltd. | 2,659,098.50 | - | |
| Commerce Holding and its subsidiaries | 327,067.81 | 671,423.07 | |
| Others | 3,854.87 | - | |
| 2,990,021.18 | 671,423.07 | ||
(h) Income from platform and other services
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Commerce Holding and its subsidiaries | 9,103,589.92 | - | |
| Shenzhen Shunheng Rongfeng Investment Co., Ltd. | 3,914,109.36 | 2,598,276.60 | |
| Shenzhen Shuncheng Lefeng Factoring Co., Ltd. | 2,548,548.98 | 23,009.75 | |
| Shenzhen S.F Hefeng Microfinance Co., Ltd. | 1,634,252.04 | 1,825,384.04 | |
| Financing Investment | 1,169,239.19 | - | |
| Shuncheng Financial Leasing and its subsidiaries | 734,092.96 | 2,111,495.92 | |
| SF Lottery | 282,946.85 | - | |
| 19,386,779.30 | 6,558,166.31 | ||
(i) Technology development service income
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Commerce Holding and its subsidiaries | 37,061,216.46 | - | |
| Hive Box Technology | 169,811.32 | 174,052.65 | |
| 37,231,027.78 | 174,052.65 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(3) Related party transactions (Cont'd)
(j) Revenue from rent and property management
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Commerce Holding and its subsidiaries | 230,658.63 | 97,926.79 | |
| Others | 38,043.71 | 41,891.89 | |
| 268,702.34 | 139,818.68 | ||
(k) Consideration for equity and receivables transfer
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Shenzhen Hengyi Logistics Service Co., Ltd. | |||
| - Financ ing Inves tment | - | 10,000,000.00 | |
(l) Consideration for equity and payables transfer
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Mingde Inves tment | 67,042,100.00 | - | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(3) Related party transactions (Cont'd)
(m) Income from equity transfer
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Shenzhen Hengyi Logistics Service Co., Ltd. | |||
| - Financ ing Inves tment | - | (101,560.51) | |
(n) Combined transport and freight forwarding expenses
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Shenzhen Shun Jie Feng Da Express Co., Ltd. | 94,210,538.42 | 5,332,482.58 | |
| POST11O? | 48,553,701.67 | 101,354,007.34 | |
| Juneyao Airlines Co., Ltd. | 25,416,371.26 | 19,840,763.44 | |
| Little Red Hat and its subsidiaries | 3,330,010.85 | 4,923,890.50 | |
| Taiwan S.F. Express Holdings Co., Ltd. | Not applicable | 83,471,211.43 | |
| Others | 316,786.48 | 236,439.59 | |
| 171,827,408.68 | 215,158,794.88 | ||
(o) Express delivery agent service fees
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Commerce Holding and its subsidiaries | 4,604,362.86 | 6,960,718.58 | |
| Hive Box Technology | 1,490,566.23 | - | |
| Others | 429,333.33 | - | |
| 6,524,262.42 | 6,960,718.58 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(3) Related party transactions (Cont'd)
(p) Collection commissions fee
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Hive Box Technology | 24,193,805.30 | 8,326,334.87 | |
(q) Security service fee
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| ZBHA and its subsidiaries | 2,283,057.50 | Not applicable | |
(r) Rent and property management fees
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Little Red Hat and its subsidiaries | - | 36,668.00 | |
| Shenghai Inf or mation | 6,791,744.03 | 460,786.59 | |
| Zhiye Enterpr is e | 163,514.20 | 147,815.00 | |
| Shenzhen Shuncheng Lefeng Factoring Co., Ltd. | 59,000.00 | - | |
| 7,014,258.23 | 645,269.59 | ||
(s) Management fee
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Suzhou Ruihuang | 5,000,000.00 | 5,000,000.00 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(3) Related party transactions (Cont'd)
(t) Technology development and operation & maintenance service fee
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Shenghai Inf or mation | 5,961,166.33 | 3,095,059.15 | |
| Zhuhai Sui Bian | - | 504,766.55 | |
| 5,961,166.33 | 3,599,825.70 | ||
(u) Promotion fee
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Commerce Holding and its subsidiaries | 7,272,898.58 | 3,971,482.86 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(3) Related party transactions (Cont'd)
(v) Purchase of materials
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Commerce Holding and its subsidiaries | 29,429,604.52 | 9,468,091.86 | |
| Shenghai Information | 1,111,729.29 | - | |
| Others | - | 358,044.69 | |
| 30,541,333.81 | 9,826,136.55 | ||
(w) Insurance premium
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Pacific Insurance and its subsidiaries | 50,963,129.09 | 61,030,490.28 | |
Insurance premium represents the amount amortised over the benefit period of insurance policies.
(x) Donation expenses
S.F. Express, one of the Group’s subsidiaries, donated RMB 40 million to SF Foundation andobtained advertising resources worthy of RMB 20 million.
(y) Remuneration of key management personnel
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Remuneration of key management personnel | 23,545,200.00 | 15,888,500.00 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(4) Receivables from and payables to related parties
(a) Notes receivable and accounts receivable
| 30 June 2018 | 31 December 2017 | ||
| Commerce Holding and its subsidiaries | 122,430,598.01 | 69,990,754.31 | |
| McDonald’s and its subsidiaries | 26,779,173.81 | 14,519,515.74 | |
| Qianqu Network and its subsidiaries (i) | 12,943,815.05 | 12,825,061.28 | |
| Ping An Insurance and its subsidiaries | 8,929,336.44 | 8,225,922.88 | |
| Fengchengda Network Technol ogy Co., Ltd. | 3,098,876.63 | 1,450.00 | |
| Hive Box Technology | 2,810,794.09 | 2,082,874.83 | |
| Pacific Insurance and its subsidiaries | 2,233,749.05 | 3,434,004.61 | |
| Shenzhen S.F Hefeng Microfinance Co., Ltd. | 1,446,783.65 | 31,475.68 | |
| Fengmaiwang Technology | 1,112,587.76 | 614,250.74 | |
| Geling Information | 1,003,998.27 | 2,296,371.65 | |
| Shenzhen Shuncheng Lefeng Factoring Co., Ltd. | 809,180.79 | - | |
| Shenzhen Shunheng Rongfeng Investment Co., Ltd. | 689,790.14 | 72,037.60 | |
| Others | 891,393.01 | 485,297.60 | |
| 185,180,076.70 | 114,579,016.92 |
(i) The Group has made full provision for bad debts of accounts receivable from Qianqu Network and
its subsidiaries.
(b) Advances to suppliers
| 30 June 2018 | 31 December 2017 | ||
| Pacific Insurance and its subsidiaries | 12,861,732.73 | 22,699,971.15 | |
| Hive Box Technology | 3,818,800.00 | - | |
| Shenzhen Shuncheng Lefeng Factoring Co., Ltd. | 3,090,507.33 | 7,226,494.34 | |
| Others | 908,903.19 | 1,390,452.19 | |
| 20,679,943.25 | 31,316,917.68 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(4) Receivables from and payables to related parties (Cont'd)
(c) Other receivables
| 30 June 2018 | 31 December 2017 | ||
| Commerce Holding and its subsidiaries (i) | 121,581,444.00 | 116,831,539.91 | |
| Hive Box Technology and its subsidiaries | 42,077,907.85 | 37,929,182.23 | |
| Hubei International Logistics Airport Co., Ltd. | 9,620,534.20 | - | |
| Pacific Insurance and its subsidiaries | 661,552.79 | 1,045,780.36 | |
| Shenzhen Weirong Enterprise Development Co., Ltd. | - | 475,908,000.00 | |
| Others | 897,173.49 | 640,300.37 | |
| 174,838,612.33 | 632,354,802.87 |
(i) The Group's other receivables from Commerce Holding and its subsidiaries mainly represent
balances generated during the ordinary course of business.
(d) Notes payable and accounts payable
| 30 June 2018 | 31 December 2017 | ||
| Shenzhen Shuncheng Lef eng Factoring Co., Ltd. | 132,472,670.03 | 161,601,249.47 | |
| POST11O? | 27,590,561.68 | - | |
| Commerce Holding and its subsidiaries | 10,049,853.16 | 13,447,737.99 | |
| Pacific Insurance and its subsidiaries | 9,664,367.74 | 8,796,478.91 | |
| Shenghai Inf or mation | 1,023,217.80 | 191,482.08 | |
| Others | 480,576.39 | 492,952.80 | |
| 181,281,246.80 | 184,529,901.25 |
(e) Advances from customers
| 30 June 2018 | 31 December 2017 | ||
| Hive Box Technology | 2,002,857.11 | 7,142.85 | |
| Commerce Holding and its subsidiaries | 1,955,501.44 | 1,320,601.63 | |
| Others | 668,694.85 | 1,727,813.80 | |
| 4,627,053.40 | 3,055,558.28 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(4) Receivables from and payables to related parties (Cont'd)
(f) Other payables
| 30 June 2018 | 31 December 2017 | ||
| Mingde Inves tment | 67,042,100.00 | - | |
| Commerce Holding and its subsidiaries | 16,579,012.06 | 16,895,068.22 | |
| Mingde Holdings | 15,531,643.83 | - | |
| Suzhou Ruihuang | 5,000,000.00 | 10,000,000.00 | |
| Shenzhen Shuncheng Lefeng Factoring Co., Ltd. | 4,927,611.87 | 4,257,352.81 | |
| Shenghai Inf or mation | 4,266,754.01 | 324,460.01 | |
| Pacific Insurance and its subsidiaries | 2,869,217.02 | 5,413,408.15 | |
| Qianqu Network and its subsidiaries | 897,104.92 | 900,713.48 | |
| Others | 1,208,350.82 | 2,467,634.70 | |
| 118,321,794.53 | 40,258,637.37 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
9 Share-based payments
(1) Overview of share-based payments
| 30 June 2018 | |
| Total equity instrum ents granted during the period | Refer to Note 9(2) |
| Total equity instrum ents exercised during the period | - |
| Total equity instrum ents forfeited during the period | - |
| The exercise price of outstanding restricted shares at |
the end of the period and residual life of the restricted
| shares contracts | Refer to Note 9(2) |
Expenses recognised for the period arising from share-based payment were as follows:
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Equity-settled share-based payments | 23,930,346.08 | - | |
| Cash-settled share-based payments | 423,976.70 | - | |
| 24,354,322.78 | - | ||
(2) Information on equity-settled share-based payments
(a) Information on equity-settled share-based payments of the Company
On 30 Novem ber 2017, the C ompany held the 4t h interim shareholders’ meeting in 201 7, at whichthe propos al of th e Restric ted Shares Incent ive Plan (Draft) and Summar y f or 2017 w as ap proved.Authorised b y the 4 th i nter i m s harehold er s’ meeting in 2017, the Company held the 11th meeting ofthe 4th Board of Directors on 27 December 2017, at wh ich the Proposal of Granting RestrictedShares to Incent ive Rec ipients w as appr o ve d. The restricted shares were granted on 27 December2017 and entitled the holders to purc hase restricted shares at a price of RMB 29.32 per share,which was 50% of RMB 58.63, the average s hare price on the prior trading day (total trans actionamount on the prior trading day / tot al transaction volume on the prior trad ing day) before theRestricted Shares Incentive Plan (Draft) of S.F. Holding Co., Ltd. for 2017 was released. TheCompany’s Board of Directors was authorised to grant 802 qualified employees restric ted Aordinary shares with a total number of 2,705,400 at a consideration of RMB 29.32 per share,accounting for about 0.06% of S.F. Holding’s total shares, which totalled 4,4 11,015,500 sharesupon announcement of the incentive plan.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
9 Share-based payments (Cont'd)
(2) Information on equity-settled share-based payments (Cont'd)
(a) Information on equity-settled share-based payments of the Company (Cont'd)
On 17 May 2018, the Compan y held the 2nd interim shareholders’ meeting in 2018, at which theproposal of the Restricted Shares Incen tive Plan (Draft) and Summary for 2018 was approved.(“the Rest ric te d Sh ares Incentive Plan”) was approved. Authorised by the 2nd interim shareholders’meeting in 2018, the Company held the 1 5th meeting of the 4th Board of Directors on 13 J une2018, at which the Proposal of Gran ting Restricted Shares to Incentive Recipients for 2018 wasapproved. The restricted shares were granted on 13 June 2018 and entitled the ho lders topurchase res tricted shares at a price of RMB 24.33 pe r share, which was 50% of RMB 4 8.65, theaverage share price o n t he prior 20 trading da ys (total transaction am ount on the prior 20 tradingdays / tot al tra nsacti on vo lum e on the pri or 20 trading da ys) bef ore the Rest ricte d Shar es Inc entivePlan (Draft) of S.F. Holding Co., Ltd. was released. T he Group’s Board of Direc tors was authorisedto grant 1,181 qualified employees restricted A ordinary shares with an estimated number of5,421,881 shares at a consideration of RMB 24.33 per share, accounting for about 0.12% of theCom pany’s total shares, which totalled 4 ,413,572,200 shares up on announcem ent of the incent iveplan.
The post lock-up periods and their schedules f or the restricted shares for 2017 and 2018 arepresented in the table below:
| Post lock-up period | Timing | Proportion of |
shares
| exercisable | ||
| 1st post lock-up period | From t he first trading day after 12 months since the registration of granting to the last tradin g day within 24 months after the registration of granting | 50% |
| 2nd post lock-up period | From the first trading day after 24 months since the |
registration of granting
| to the last trading day within 36 months after the registration of granting | 50% |
In addition to the Com pany’s performance, individual per formance assessment, which is specifiedin the Res tr icted Sh ar es Inc entive Pl an, has also to be satisfied to unlock the restricted shares.
After it comes into the post lock-up period , the Group deals with unlocking procedures f or theholders that meet unlockin g conditions as well as repurchases and cancels the restricted sharesthat do n ot meet unlocking conditions. The repurchasing price comprises the granting price plus theinterest accruing thereon at the current deposit rate.
If the Company tra ns f er s capital r eser v e to pa id -in c a pita l, d istr ibu tes shar e di vid ends , s pl its s har es,pays di vidends, allocates shares or reduc es shar es after restricte d shar es are gr anted, t he num berand the price of r epurchasi ng restricted shares shal l be adjus ted in acc ordance w ith the RestrictedShares Incentive Plan.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
9 Share-based payments (Cont'd)
(2) Information on equity-settled share-based payments (Cont'd)
(a) Information on equity-settled share-based payments of the Company (Cont'd)
In 2017, the Compan y issued 2,556,661 ordinar y A shares denominated in RMB according to therestricted shares incentive plan, with raised f unds totalling RMB 74,961,331.87. On 9 January2018, the Com pany completed the gr anting and regis tration of the restr icted shares incent ive planfor 2017.
In 2018, the Company iss ued 5,231,982.00 ordinary A shares denominated in RMB according tothe restricted shares incentive plan, with raised f unds totalling RMB 127,294, 205.35. On 25 June2018, the Com pany completed the grant ing and verification of the restricted shar es incentive planfor 2018.
During the r eportin g period, no res tricted s hares were unl ock ed or repur chased a nd canc elled. Therestricted s hares that were grante d to and held by inc entive recipients b ut not unlocked am ountedto 7,788,643 shares.
On 30 Ju ne 2018 , the G roup m ade bes t estim atio n of t he quant it y of unlock able e quit y instrum entsaccording to t he l a t est inf ormation such as changes in the number of incentive recipients, companyperformance and inc entive recipients’ individual perf ormance. The Group recogn ised share-basedcompens ation expe nse an d capita l reserve sim ultaneousl y in th is period based on the f air va lue ofequity instrum ents determined b y the stock pric e at the grant date of the e quity instruments . As at30 June 2018, the equity-settled share-based payment recognised in the capital reserveaccumulated to RMB 23,320,445.47 (31 D ecember 2017: RMB 419,902.42). For the six m onthsended 30 June 2018, exp enses recognised for equity-set tled share-based payment am ounted toRMB 22,900,543.05 (for the six months ended 30 June 2017: Nil).
(b) Information on equity-settled share-based payments of the Company’s subsidiaries
In 2017 and 2018, the Group granted som e equities of Wu Lian Yi Da and Beijing SF Intra-cityTechnology Co., Ltd. (“Intra-city Technology”), two of its subsidiaries, to senior management andother employees of the aforesaid companies respectively.
As at 30 June 2018, the e quity-settled share-based pa yments r ecognised by Wu Lian Yi Da andIntra-city Technology accumulated to RMB 5,0 67,968.18 (31 December 2017: RMB 4,395,989.30)and RMB 357,824.15 (31 December 2017: Nil) res pectively. For the six months ended 30 June2018, expenses recognised for equity-settled share-based payments amounted to RMB671,978. 88 (for the six m onths ended 30 J une 2017: Nil) a nd RMB 357,82 4.15 (for the six monthsended 30 June 2017: Nil) respectively.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
9 Share-based payments (Cont'd)
(3) Information on cash-settled share-based payments
On 30 Novem ber 2017, the C ompany held the 4t h interim shareholders’ meeting in 201 7, at whichthe proposal of the Incentive Plan of Share Appreciation Rights (Draft) and Summary (“theIncentive Plan of Share Appreciation Rights”) was approved. Authorised by the 4th interimshareholders’ meeting in 2017, the Company held the 11th meeting of the 4th Board of Directors on27 December 2017, at which the Proposal of Granting Sh are Appreciation Rights to IncentiveRecipients was approved. The share appreciation rights were granted on 27 December 2017. Theexercise pric e of the share appreciation rig hts was RMB 29. 32 per share. T he incentive recip ientsof the plan refer to 20 key foreign talents.
On 17 May 2018, the Compan y held the 2nd interim shareholders’ meeting in 2018, at which theproposal of the Incentive Plan of Share Appreciation Rights (Draft) and Summary (“the IncentivePlan of Share Appreciation Rights”) was approved. Authorised by the 2nd interim shareholders’meeting in 2018, the Company held the 1 5th meeting of the 4th Board of Directors on 13 June2018, at which the Proposal of Gr anting Share Appreciation Rights to Incentive Recipients wasapproved. The share appreciation rights were granted on 13 June 2018. The exercise price of theshare appr ec iat ion rights was RMB 24.33 p er shar e. The ince ntive rec ipients of the pla n ref er to 29key foreign talents.
The exercise perio ds and their schedules f or the share appreciation rights for 2017 and 2018 arepresented in the table below:
| Exercise period | Timing | Exercise proportion |
| 1st exercise period | From the first trading day after 12 months since the registration of granting to the last tradin g day within 24 months after the registration of granting | 50% |
| 2nd exercise period | From the first trading day after 24 months since the registration of granting to the last tradin g day within 36 months after the registration of granting | 50% |
In addition to t he Company’s perform ance, individual per formance assessm ent, which is specif iedin the Restricted Shares Incentive Plan, has also to be s atisfied for the share apprec iation rightsgranted.
As at 30 June 2018, the accumulated liabilities arising fr om cash-settled share-based paymentamounted to RMB 426,852.17 (31 Decem ber 2017: RMB 2,875.47). F or the six months ended 30June 2018, expenses recognised for cash-settled share-based payment amounted to RMB423,976.70 (for the six months ended 30 June 2017: Nil).
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
10 Commitments
(1) Capital commitments
Capital ex p end itur es contracted for by the Group at the balance sheet date but are not yet requiredto be recognised in the balance sheet are as follows:
| 30 June 2018 | 31 December 2017 | ||
| Investment contracts that have been signed but not fulfilled or not absolutely fulfilled | 4,169,330,086.73 | 2,300,000,000.00 | |
| Buildings, machinery and equipment | 989,858,513.27 | 1,459,630,368.68 | |
| Others | 83,760,365.00 | 38,757,546.85 | |
| 5,242,948,965.00 | 3,798,387,915.53 |
(2) Operating lease commitments
The future minim um lease payments due under the signed irrevocable operat ing leases contractsare summarised as follows:
| 30 June 2018 | 31 December 2017 | ||
| Within 1 year | 2,707,058,194.19 | 2,273,377,672.55 | |
| 1 - 2 years | 1,826,997,495.80 | 1,488,924,389.35 | |
| 2 - 3 years | 1,074,088,350.70 | 942,830,314.76 | |
| Over 3 years | 1,479,436,351.79 | 1,374,415,354.04 | |
| 7,087,580,392.48 | 6,079,547,730.70 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
10 Commitments (Cont'd)
(3) Profit compensation commitments
According to the Profit Forecast Compensation Agreement dated 14 June 2016 and theSupplementary Agreement to the Profit Forecas t Compensation Agreement dated 9 September2016 (collectivel y "the Compensation Agreem ents") among the Company, Mingde Holdings, ShunDa Feng Ru n, Jia Qiang Shunfeng, Zh ao Guang Inve stment, Oriza Shunfeng, Gu Yu Qiu Chuangand Shun Xin Feng He (collectively “the Restructuring Parties”), for the p urpose of ensuringlegitimate rights and interests of the Company and its shar eholders, the Restructuring Partiesmade a c omm itment that, after c ompletion of m ajor ass ets restruc turing, t he net p rofits attr ibutabl eto owners of the parent company that are predicted to be realised by Taisen Holdings in 2016, 2017and 2018 in the sc ope of consolidated f inancial statem ents, after deducting non -recurring profit orloss, will be no less than RMB 2,1 85 million, R MB 2,815 m illion and R MB 3,488 million. As TaisenHoldings’s net profits after deducting non-recurring profit or loss in the consolidated f inancialstatements for the years ended 31 December 2016 and 31 December 2017 are RMB2,643,209,400 and RMB 3,650,375,100 r espectively, the actual profits of Taisen Holdings in 2016and 2017 are m ore than the comm itted net profit, and the Restructuring Parties shall not performthe compensat ion obligations. W here the actual n et profit (cum ulative amount) of Taisen Holdingsas at the en d of 201 8 f ails to r each the c omm itted net prof it (cum ulative am ount), the Rest ruct uringParties should still perform the compensation obligations pursuant to the Profit ForecastCompensation Agreement.
11 Events after the balance sheet date
(1) The Company held the 11th meeting of the 4th Board of Directors on 27 December 2017 and the
1st interim shareholder s’ meeting in 2018 on 12 J anuar y 2018, at which t he Propos al of OverseasIssue of Debentures by a Wholly-owned Subsidiary and the Proposal of Guaranteeing for OverseasIssue of Deb entur es by a W holly -owned Subs idiary w er e approv ed. SF Hol ding I nvestm ent Lim ited ,a wholly-owned overseas subsidiary of the Company, was to mak e an overseas offering ofdebentures of no more than USD 500 million (inclusive), and the Com pany was to provideuncondit ion al and irr e vocab le c ros s -bor der guarantee. The overseas offering of debentures of USD500 million was c ompleted by SF H olding Investment Lim ited on 26 Jul y 2018. Such debentures ,with a t erm of 5 year s and a nomi nal interes t rat e of 4. 125%, were listed on the Stoc k Exchange ofHong Kong Limited on 27 July 2018.
(2) Taisen Holdings, a wholly-owned subsidiary of the Company, was approved to make a public
off ering of corpor ate deben tures of no m ore than RM B 2 bill ion (inclus ive) in instalm ents under theRegulator y Perm is sion [20 17] N o. 101 5 as issued by China Sec urities Regu lator y Commiss ion. On1 August 2018 and 2 August 2018, Taisen Holdings made a public offering of corporate debentures(1st insta lment) to qualified investors with a volume of RMB 800 million at a nominal interest rate of4.29%.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
12 Business combinations
See Note 5(1) and 5(2).
13 Financial risk
The Group's activities expose it to a variety of financial risks: market risk (primarily foreignexchange risk and interest rate risk), credit risk and liquidity risk. The Group's overall riskmanagement programme focuses on the unpredictability of financial markets and seek s tominimise potential adverse effects on the Group's financial performance.
(1) Market risk
(a) Foreign exchange risk
The Group’s major operational activ ities are carried out in Mainland Ch ina and a majority of thetransactions are denominated in RMB. Part of operational activities are carried out inregions/c ountr ies inc luding H ong Kon g, Am erica and Korea an d relev ant tra nsacti ons are s ettled inHKD, U SD and KRW. The Group is exposed to for eign exchange risk arising from the recogn isedassets and liabilities, and future transactions denominated in f oreign currencies. The Group’sfinance department at its headquarters is res ponsible for monitoring the amount of assets andliabilities, and transact ions denominated in foreign cur rencies, to reduce foreign exchange risk tothe greatest extent.
As at 30 June 201 8 and 31 December 2017, the Group's com panies whose recording cur rency isRMB held no significant assets or liabilities denomin ated in foreign currency. Those companiesmainly operating in Hong Kong with HKD as recording currency held assets and liabilitiesdenominat ed in foreign c urrenc y (mainly USD and RMB), of which the equi valent am ounts in HKD(recording currency of companies operati ng in Hong Kong) and RMB (presentation c urrency ofthese financial statements) are listed as below:
| 30 June 2018 | |||||||
| RMB | USD | Total | Total | ||||
| (HKD) | (HKD) | (HKD) | (RMB) | ||||
| Financial assets | |||||||
denominated in
| foreign currency | |||||||
| Cash at bank and on hand | 17,558,726.44 | 27,213,995.59 | 44,772,722.03 | 37,747,991.61 | |||
| Notes receivable |
and accounts
| receivable | 15,419.30 | 8,460,167.89 | 8,475,587.19 | 7,145,805.83 | |||
| 17,574,145.74 | 35,674,163.48 | 53,248,309.22 | 44,893,797.44 | ||||
| Financial liabilities |
denominated in
| foreign currency | |||||||
| Notes payable and accounts payable | 243,852.91 | 9,718,250.69 | 9,962,103.60 | 8,399,093.33 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
13 Financial risk (Cont'd)
(1) Market risk (Cont’d)
(a) Foreign exchange risk (Cont’d)
| 31 December 2017 | |||||||
| RMB | USD | Total | Total | ||||
| (HKD) | (HKD) | (HKD) | (RMB) | ||||
| Financial assets | |||||||
denominated in
| foreign currency | |||||||
| Cash at bank and on hand | 51,490,507.16 | 39,795,482.07 | 91,285,989.23 | 76,306,781.92 | |||
| Notes receiv able and accounts receivable | - | 13,081,873.33 | 13,081,873.33 | 10,935,227.10 | |||
| 51,490,507.16 | 52,877,355.40 | 104,367,862.56 | 87,242,009.02 | ||||
| Financial liabilities |
denominated in
| foreign currency | |||||||
| Notes payable and accounts payable | 1,938,359.97 | 14,755,418.62 | 16,693,778.59 | 13,954,450.91 |
As HKD is pegged to USD, there is little difference arising from translating the Group’s financialassets and financial liabilities denominated in USD to HKD and it does not have significantinfluence on the Group’s net profit.
As at 30 June 2018, if HKD had strengthened/weak ened by 10% against RMB while all othervariables had been held constant, the Group’s profit before tax for the year would have beenapproximately HKD 1,733,000. 00 (equivalent to approxim ately RMB 1,461,000.00) (31 Decem ber2017: HKD 4,955,00 0.00, equivalent to approx imately RMB 4,142,000. 00) lower/higher f or variousfinancial assets and liabilities denominated in RMB.
The changes in exchange rate of other foreign currencies have no sign ificant influence on theGroup’s operating activities.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
13 Financial risk (Cont'd)
(1) Market risk (Cont’d)
(b) Interest rate risk
The Gr oup's interes t rat e risk aris es fr om long-t erm inter est bear ing debts incl uding long -ter m bankborrowings and debentures pa yable. Financial lia bilities issued at floating rates e xpose the Groupto cash flow interest rate risk. Financia l liabilities issued at fixed rates expose t he Group to fairvalue interes t rate risk. T he Group determ ines the relative proportions of its fixed rate an d floatingrate contracts depending on the prevailing m arket conditions. As at 30 June 2018, the Group’slong-term interest bearing debts were mainly long-term borrowings denom inated in RMB withfloating interest rate, amounting to RMB 837,388,621.01 (31 December 2017: RMB782,515,467.96), long-term borrowings denominated in HKD with floating interes t rate, amountingto HKD 1,700,053,872.39, equivalent to RMB 1,435,576,491.46 (31 December 2017: HKD1,869,466,950.57, eq uivalent to RMB 1,562 ,724,813.32) and debentur es payable denominated inRMB with fixed interest rate, amounting to RMB 530,000,000.00.
The Gr oup’s f inance dep ar t ment at its headquarters continuously monitors the interest rate positionof the Group. Inc reases in interest rates will increase the cos t of new interest be aring borrowingsand the interest expenses with respect to the G roup’s outstanding floating rate borrowings, andtherefore could have a material adverse effect on the Group’s financial performance. TheManagement makes adjustments tim ely with reference to the latest mark et conditions and mayenter into interest rate swap agreements to mitigate its exposure to interest rate risk.
As at 30 June 2018, if in terest rates on the floating rate borrowings had risen/fallen by 50 basispoints while all other variables had been held constant, the Group’s profit before tax would havedecreased/increased by RMB 11,364,825.56 (31 December 2017: RMB 11,726,201.41).
(2) Credit risk
Credit risk is managed on portfolio basis. Credit risk mainly arises f rom cash at bank, notesreceivable an d accounts r eceivable, loans and ad vances, other receiva bles, long -term rec eivables,etc.
The Group expect s that there is no s ignificant credit ris k associated with cas h at bank since the yare deposited at state-owned bank s and other medium or large size liste d banks. Managementdoes not expect that there will be any significant losses from non-performance by thesecounterparties.
Notes receivable and ac counts receivable and other rec eivables include receivables f rom relatedparties an d rece ivables f rom non-relate d parties . In re spect of r eceivabl es from related par ties, theGroup considers th at they have low cred it risk; in respect of rec eivables from non -related parties,the Group will deve lop relevan t policies t o control t he exposur e to credit risk and will foc us on theircredit and rec overy situatio n on a regular basis . In respect of cus tomers with a poor credit histor y,the Group will use payme nt reminders, or shorten or cancel cr edit periods, to ensure the overa llcredit risk of the Group is limited to a controllable extent.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
13 Financial risk (Cont'd)
(2) Credit risk (Cont'd)
As at 30 June 2018 and 31 December 2017, loans and advances were from S.F. Finance, anoverseas subsidiary of the Group (Note 4(6)). In accordance with its internal risk rating system, S.F.Finance set up five-tier classification of credit assets that clas sifies credit assets into five tiersincluding pass, special mention, substandard, doubtful an d loss. As at 30 June 2018 and 31December 2017, the loans held by S.F. F in anc e were bas ic ally pass.
(3) Liquidity risk
Cash flow for ec as ting is pe r f orm ed by each s ubs idi ary of the G r oup and ag grega ted by the Group’ sfinance department in its headquarters. The Group’s finance department at its headquartersmonitors rolling forecasts of the Group's short-term and long-term liquidity requirements to ensure ithas sufficient cash and securities th at are readily convertible to cash to m eet operational needs,while maintaining sufficient headroom on its undrawn committed bor rowing facilities from majorfinancial ins titutions so that the G roup does not breac h borrowing lim its or covenants on an y of itsborrowing facilities to meet the short-term and long-term liquidity requirements.
The financial liabilit ies of the Group at the balance sheet date are analysed by their m aturity datebelow at their undiscounted contractual cash flows:
| 30 June 2018 | |||||||||
| Within 1 year | 1 - 2 years | 2 - 5 years | Over 5 years | Total | |||||
| Financial liabilities - | |||||||||
| Notes payable and accounts payable | 6,486,860,179.88 | - | - | - | 6,486,860,179.88 | ||||
| Other payables | 3,676,018,965.14 | - | - | - | 3,676,018,965.14 | ||||
| Short-term borrowings | 6,577,617,823.20 | - | - | - | 6,577,617,823.20 | ||||
| Curren t porti on of non-current liabilities | 2,013,590,862.71 | - | - | - | 2,013,590,862.71 | ||||
| Long-term bor ro wi ngs | 121,830,051.56 | 376,898,243.86 | 1,339,345,945.68 | 1,015,317,687.08 | 2,853,391,928.18 | ||||
| Debentures payable | 24,380,000.00 | 24,380,000.00 | 554,380,000.00 | - | 603,140,000.00 | ||||
| Long-term pa yabl e s | - | - | 12,150,000.00 | 51,730,616.39 | 63,880,616.39 | ||||
| 18,900,297,882.49 | 401,278,243.86 | 1,905,875,945.68 | 1,067,048,303.47 | 22,274,500,375.50 | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
13 Financial risk (Cont'd)
(3) Liquidity risk (Cont'd)
| 31 December 2017 | |||||||||
| Within 1 year | 1 - 2 years | 2 - 5 years | Over 5 years | Total | |||||
| Financial liabilities - | |||||||||
| Financial liabilities at fair | |||||||||
value through profit or
| loss | 784,639.53 | - | - | - | 784,639.53 | ||||
| Notes payable and accounts payable | 6,905,411,234.18 | - | - | - | 6,905,411,234.18 | ||||
| Other payables | 3,275,270,030.18 | - | - | - | 3,275,270,030.18 | ||||
| Short-term borrowings | 4,789,668,879.92 | - | - | - | 4,789,668,879.92 | ||||
| Curren t porti on of non-current liabilities | 2,717,898,533.26 | - | - | - | 2,717,898,533.26 | ||||
| Long-term bor ro wi ngs | 113,593,132.70 | 512,934,358.48 | 1,104,519,133.27 | 1,187,180,316.31 | 2,918,226,940.76 | ||||
| Debentures payable | 24,380,000.00 | 24,380,000.00 | 554,380,000.00 | - | 603,140,000.00 | ||||
| Long-term pa yabl e s | - | - | 12,150,000.00 | 8,775,000.00 | 20,925,000.00 | ||||
| 17,827,006,449.77 | 537,314,358.48 | 1,671,049,133.27 | 1,195,955,316.31 | 21,231,325,257.83 |
14 Fair value estimates
The level in which fair value measurement is categorised is determined by the level of the fair valuehierarchy of the lowest level input that is significant to the entire fair value measurement:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inp uts ot her t han q uote d prices included within Level 1 that are observable for the asset orliability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Financial assets and liabilit ies of the Group and the Company not m easured at fair value mainlyrepresent receivables and payables.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
14 Fair value estimates (Cont'd)
(1) Assets and liabilities measured at fair value on a recurring basis
As at 30 June 2018, the as sets measured at fair value on a recur ring basis by the above threelevels were analysed below:
| Level 1 | Level 2 | Level 3 | Total | ||||
| Financial assets | |||||||
| Financial assets at fair value through profit or loss | 14,298,919.01 | - | - | 14,298,919.01 | |||
| - Investments in equity |
instrument held for
| trading | |||||||
| - Forward interest rate swap contracts | - | 1,071,619.48 | - | 1,071,619.48 | |||
| Available-for-sale financial assets | 613,223,008.38 | - | 1,629,976,803.26 | 2,243,199,811.64 | |||
| - Available-for-sale equity instruments | |||||||
| Total financial assets | 627,521,927.39 | 1,071,619.48 | 1,629,976,803.26 | 2,258,570,350.13 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
14 Fair value estimates (Cont'd)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont'd)
As at 31 December 2017, the assets measured at fair value o n a recurring basis by the abov ethree levels were ana l ysed below:
| Level 1 | Level 2 | Level 3 | Total | ||||
| Financial assets | |||||||
| Financial assets at fair value through profit or loss | 16,232,692.66 | - | - | 16,232,692.66 | |||
| - Investments in equity |
instrument held for
| trading | |||||||
| - Forward interest rate swap contracts | - | 1,586,700.69 | - | 1,586,700.69 | |||
| Available-for-sale financial assets | 684,756,526.14 | - | 1,050,000,000.00 | 1,734,756,526.14 | |||
| - Available-for-sale equity instruments | |||||||
| Total financial assets | 700,989,218.80 | 1,586,700.69 | 1,050,000,000.00 | 1,752,575,919.49 | |||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Financial liabilities | |||||||
| Financial liabilities at fair value through profit or loss | - | 784,639.53 | - | 784,639.53 |
The Gr oup takes the date on w hich events c ausing the tr ansfers bet ween the le vels tak e place as thetiming specific f or recognising the transfers. T here is no transfer between Level 1 and Lev el 2 for thecurrent period.
The fair value of f inancial instruments traded in an active market is det ermined at the quoted m arketprice; and the fair value of those not traded in an ac tive market is determined by the Group usingvaluation technique. The valuation models used mainly comprise discounted cash flow model andmarket comparable company model. The inputs of the valuation technique mainly include risk -freeinterest rate, benchmark rate, exchange rate, credit spread, liquidity premium, EBITDA multiplier,liquidity discount etc.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
14 Fair value estimates (Cont'd)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont'd)
The changes in Level 3 financial assets are analysed below:
| Available-for-sale financial assets | |
| - Available-for-sale equity instruments | |
| 31 December 2017 | 1,050,000,000.00 |
| Increase in available-for-sale financial assets | 619,933,583.26 |
| Gains or losses recognised in other comprehensive income (i) | (39,956,780.00) |
| 30 June 2018 | 1,629,976,803.26 |
(i) Those are the changes in the fair value of Hive Box Technology as at 30 June 2018, determined
with refer ence to the trans action price of the f inanc ing carried out b y Hive Box Technology in June2018.
(2) Assets and liabilities not measured at fair value but disclosed
The Gr oup’s financia l asset s and l iabilities m easured at am ortised cos t m ainly incl ude recei vables,loans and advances, long-term receivables , available-for-sale financial assets m easured at cost,short-term borrowings, payables, long-term borrowings, debentures pa yable, current portion ofnon-current liabilities and long-term payables.
The f air value of the Gr oup’s availa ble-for-s ale f inancia l assets meas ured at cos t canno t be relia bl ymeasur ed as those financial as sets are not q uoted in an act ive market, the vari ability in the rang eof reasonable f air value measurements is significant and the probabi lities of the various estim atesused to determine the fair value cannot be reasonably determined.
In addition to available-for-sale financial assets measured at cost, th e carrying amount of thefinancia l assets and liabi lities not m easured at fair value is a reas onable approx imation of their fairvalue.
The fair value of debent ures payable that are trad ed in an active market is det ermined at quotedprices in t he active m arket, categorised within Leve l 1 of the fair value hierar chy. The fair value oflong-term borrowings and l ong-term payables is the present value of the contrac tually determ inedstream of futur e cash flows discounted a t the rate of interest ap plied at that time by the m arket toinstruments of comparable credit status and providing substantially the same c ash flows on thesame terms, and categorised within Level 3 of the fair value hierarchy.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
15 Capital management
The Group’s capital management polici es aim to safeguard the Group’s abilit y to continue as agoing co ncern in or der to p rovide re turns for sharehol ders and be nefits f or other stak eholders, andto maintain an optimal capital structure to reduce the cost of capital.
In order to m aintain or adjust the capital structure, the Group ma y adjust the amount of dividendspaid to shareholders, refund capital to sharehol ders, issue new shares or sell assets to reducedebts.
The Gr oup's total ca pital is calc ulated as “ equity” as shown in the consolidated balance sheet. TheGroup is not subject to external mandatory capital requirements.
As at 30 June 2018 and 31 December 2017, the Group's gearing ratio was as follows:
| 30 June 2018 | 31 December 2017 | ||
| Gearing ratio | 42.46% | 43.22% |
16 Notes to the Company’s financial statements
(1) Cash at bank and on hand
| 30 June 2018 | 31 December 2017 | ||
| Cash at bank | 817,417,717.86 | 1,046,986,313.39 | |
| Other cash balances | 139,907.00 | 139,907.00 | |
| 817,557,624.86 | 1,047,126,220.39 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
16 Notes to the Company’s financial statements (Cont'd)
(2) Other receivables
| 30 June 2018 | 31 December 2017 | ||
| Dividends receivable from Taisen Holdings | 2,117,405,390.21 | 3,089,805,390.21 | |
| Other receivables (i) | 6,133,468,718.90 | 4,218,016,446.65 | |
| Interest receivable | 88,198,606.36 | 31,852,751.65 | |
| 8,339,072,715.47 | 7,339,674,588.51 | ||
| Less: Provision for bad debts | - | - | |
| 8,339,072,715.47 | 7,339,674,588.51 |
(i) As at 30 June 2018, the Company’s other receivables were all other receivables from wholly-
owned subsi diaries and co mprised the funds granted to th e subsidiaries af ter the accom plishmentof funds raising.
The ageing of other receivables is analysed as follows:
| 30 June 2018 | 31 December 2017 | ||
| Within 1 year | 8,339,072,715.47 | 7,339,674,588.51 |
(3) Other current assets
| 30 June 2018 | 31 December 2017 | ||
| Wealth management products (i) | 1,463,363,649.32 | 2,987,161,190.38 | |
| Input VAT to be offset | 4,198,736.77 | 9,753,216.04 | |
| 1,467,562,386.09 | 2,996,914,406.42 |
(i) The investment cycle of bank wealth management products is generally within 1 month to 4
months.
(4) Long-term equity investments
| 30 June 2018 | 31 December 2017 | ||
| Subsidiaries (a) | 43,323,747,297.64 | 43,300,422,777.89 | |
| Less: Provision for impairment of long-term equity investments | - | - | |
| 43,323,747,297.64 | 43,300,422,777.89 |
There is no significant restriction on sales of the long-term equity investm ents held by theCompany.
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
16 Notes to the Company’s financial statements (Cont'd)
(4) Long-term equity investments (Cont’d)
(a) Subsidiaries
Accounting
| method |
31 December
| 2017 |
Increase in the current
| period | 30 June 2018 |
Shareholding
Voting rights
| (%) | (%) | Explanation of disparity |
between percentages ofshareholding and voting
Provision
for
| rights | impairment |
Cash divid en dsdeclared in the
| current period | ||||||||||||
| Taisen Holdings | Cost method | 43,300,000,000.00 | 178,183.97 | 43,300,178,183.97 | 100.00% | 100.00% | Not applicable | - | - | |||
| Others | Cost method | 422,777.89 | 23,146,335.78 | 23,569,113.67 | 100.00% | 100.00% | Not applicable | - | - | |||
| 43,300,422,777.89 | 23,324,519.75 | 43,323,747,297.64 | - | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts are stated in RMB Yuan unless otherwise stated)[English translation for reference only]
16 Notes to the Company’s financial statements (Cont'd)
(5) Investment income
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Investment income from wealth management products | 45,445,973.04 | - | |
| Income from utilisation of raised funds by subsidiaries | 54,419,718.73 | - | |
| 99,865,691.77 | - | ||
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
1 Statement of non-recurring profit or loss
| For the six months ended 30 June | |||
| 2018 | 2017 | ||
| Gains/(losses) on disposals of non-current assets | 83,365,835.91 | (16,019,009.67) | |
| Government grants recognised in profit or | |||
loss for the current period (governmentgrants recognised in non-operatingincome, other income and deductedagainst related cost, expenses or
| losses) | 104,740,498.52 | 114,747,646.28 | |
| Gains or losses on changes in fair value of |
financial assets and liabilities held fortrading and investment losses arisingfrom disposals of financial assets andliabilities held for trading and available-
| for-sale financial assets | (7,644,717.08) | (2,857,548.88) | |
| Net loss of the subsidiaries for the period |
from the beginning of the period to thecombination date arising from businesscombinat ions in vo lving enterprises
| under common control | (13,494,110.16) | - | |
| Income from outward entrusted loans | - | 5,060,242.88 | |
| Net amount of other non-operating income and expenses | (11,214,444.33) | 15,861,925.88 | |
| Subtotal | 155,753,062.86 | 116,793,256.49 | |
| Less: Income tax effect | (11,671,788.69) | (26,545,919.50) | |
| Less: Total non-recur ring profit or loss |
attributable to minority
| shareholders | (723,413.33) | (544,570.88) | |
| Non-r ecur ring prof it or loss att rib utab le to shareholders of the parent company | 143,357,860.84 | 89,702,766.11 | |
| Including: Non-recurring profit or loss from continuing operations | 143,357,860.84 | 89,702,766.11 |
Basis for preparation of statement of non-recurring profit or loss
Pursuant to the Explanatory Announcement for Information Disclosure of Companies Offerin gSecurities to the Public No.1 - Non-recurring Profit or Loss (2008) issued by China SecuritiesRegulator y Commission, non-rec urring profit or loss ref ers to profit or loss ar ising from transactionsand events those are not directl y related to the company’s normal course of b usiness, also fromtransactio ns an d e ve nts t ho s e ev en are r e lat ed to t he c ompany’ s nor mal c our se of business, but willinterfere with the right j udgement of users of the f inancial statements on th e company’s operationperformance and profitability due to their special nature and occasional occurrence.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
2 Return on net assets and earnings per share
| Weighted average return on net assets (%) | Earnings per share | |||||||
| Basic earnings per share | Diluted earnings per share | |||||||
| For the six months ended 30 June | For the six months ended 30 June | For the six months ended 30 June | ||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||
| Net profit | ||||||||
attributab le toordinaryshareholders ofthe parent
| company | 6.67% | 8.84% | 0.51 | 0.45 | 0.51 | 0.45 | ||
| Net profit |
attributab le toordinaryshareholders ofthe Companyafter deductingnon-recurring
| profit or loss | 6.25% | 8.42% | 0.47 | 0.43 | 0.47 | 0.43 | ||
| Including: | ||||||||
| - Continuing operations | ||||||||
| Net profit |
attributab le toordinaryshareholders ofthe parent
| company | 6.67% | 8.84% | 0.51 | 0.45 | 0.51 | 0.45 | ||
| Net profit |
attributab le toordinaryshareholders ofthe Companyafter deductingnon-recurring
| profit or loss | 6.25% | 8.42% | 0.47 | 0.43 | 0.47 | 0.43 |
S.F. Holding Co., Ltd. 2018 Semi-Annual Report
Chapter 11 Documents Available for Reference
(I). Financial statements with the signatures and seals of the Company principal, the principal of finances, and theprincipal of the auditor;
(II). Texts of all the Company's documents ever publicly disclosed in newspapers designated by the CSRC in thereporting period and the originals of the public announcements;
(III). Original 2018 Semi-Annual Report with the signature of the Chairman of the Board of Directors;(IV). P lace for archiving the above-mentioned documents for reference: office of the Company's Board of
Directors.
S.F. Holding Co., Ltd. 2018 Semi-Annual Report