Report for the Third Quarter of 2014 of Konka Group Co., Ltd.
KONKA GROUP CO., LTD.
Report for the Third Quarter of 2014
2014-47
October 2014
1
Report for the Third Quarter of 2014 of Konka Group Co., Ltd.
Section I. Important Reminders
The Board of Directors, the Supervisory Committee as well as all directors,
supervisors and senior management staff of Konka Group Co., Ltd. (hereinafter
referred to as “the Company”) warrant that this report is factual, accurate and
complete without any false record, misleading statement or material omission. And
they shall be jointly and severally liable for that.
Except for the following Directors, the others attended the board session for
reviewing this report.
Name of Directors not Position of Directors not Reason of not attending
attended the board attended the board the boars session in Name of mandatory
session in person session in person person
Wang Xiaowen Director On a business trip Wu Siyuan
Wu Siyuan, company principal, Huang Zhiqiang, chief of the accounting work, and Xu
Youshan, chief of the accounting organ (chief of accounting), hereby confirm that
the Financial Report enclosed in this report is factual, accurate and complete.
This report is prepared in both Chinese and English. Should there be any discrepancy
between the two versions, the Chinese version shall prevail.
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Report for the Third Quarter of 2014 of Konka Group Co., Ltd.
Section II. Financial Highlights & Change of Shareholders
I. Major accounting data and financial indexes
Does the Company adjust retrospectively or restate accounting data of previous years
due to change of the accounting policy or correction of any accounting error?
√ Yes □ No
Increase/decrea
31 Dec. 2013
30 Sept. 2014 se (%)
before adjustment after adjustment after adjustment
Total assets (RMB Yuan) 16,060,816,760.49 15,743,284,335.49 15,743,284,335.49 2.02%
Net assets attributable to
shareholders of the Company 4,074,965,048.90 4,080,458,151.63 4,080,458,151.63 -0.13%
(RMB Yuan)
YoY YoY
Jul.-Sept. 2014 increase/decrease Jan.-Sept. 2014 increase/decrea
(%) se (%)
Operating revenues (RMB
5,069,587,917.51 -1.10% 13,467,888,459.14 -7.42%
Yuan)
Net profit attributable to
shareholders of the Company 2,219,144.43 116.30% 47,579,255.05 14.45%
(RMB Yuan)
Net profit attributable to
shareholders of the Company
-109,015,082.18 -780.26% -280,948,661.71 -18,592.25%
after extraordinary gains
and losses (RMB Yuan)
Net cash flows from operating
-- -- 954,710,313.21 -47.99%
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) 0.0018 100.00% 0.0395 14.49%
Diluted EPS (RMB Yuan/share) 0.0018 100.00% 0.0395 14.49%
Weighted average ROE (%) 0.05% 0.02% 1.16% 0.14%
Items and amounts of extraordinary gains and losses
√Applicable □Inapplicable
Unit: RMB Yuan
Amount as of Jan.-Sept.
Item Note
Gains/losses on the disposal of non-current assets (including the
404,647,684.15
offset part of asset impairment provisions)
Government grants recognized in the current period, except for
25,630,924.28
those acquired in the ordinary course of business or granted at
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Report for the Third Quarter of 2014 of Konka Group Co., Ltd.
certain quotas or amounts according to the country’s unified
standards
Gains and losses on change in fair value from tradable financial
assets and tradable financial liabilities, as well as investment
income from disposal of tradable financial assets and tradable
48,104.52
financial liabilities and financial assets available for sales,
except for effective hedging related with normal businesses of the
Company
Non-operating incomes and expenses other than the above 2,299,991.71
Less: Income tax effects 104,573,675.54
Minority interests effects (after tax) -474,887.64
Total 328,527,916.76 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss
according to the definition in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public—Extraordinary
Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the
said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
There was no such situation of the Company during the reporting period.
II. Total number of shareholders and shareholdings of the top ten shareholders at
the period-end
1. Total number of common shareholders and shareholdings of the top ten common
shareholders at the period-end
Unit: share
Total number of common
77,479
shareholders at the period-end
Shareholdings of the top ten common shareholders
Sharehold Pledged or frozen shares
Number of
Name of Nature of ing Number of the
restricted Status of Number of
shareholder shareholder percentag shares held
shares held shares shares
e (%)
Pledged
OCT ENTERPRISES State-owned
21.75% 261,873,466 198,381,940
CO. corporation Frozen
HOLY TIME GROUP Foreign Pledged
3.87% 46,533,615
LIMITED corporation Frozen
Foreign Pledged
GAOLING FUND,L.P. 2.19% 26,400,625
corporation Frozen
China Resources Pledged
Domestic
SCP Trust Co., Ltd.
non-state-o
－Extraordinary 1.58% 19,060,288
wned Frozen
No. 18 Capital
corporation
Trust
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Report for the Third Quarter of 2014 of Konka Group Co., Ltd.
Domestic Pledged
Sun Zhenxiang 1.17% 14,093,988
individual Frozen
Guoyuan Securities Pledged
Foreign
Broker (HK) Co., 1.13% 13,650,000
corporation Frozen
Ltd.
Warburg Trust Co., Domestic Pledged
Ltd.－Shijie Haoyu non-state
1.00% 12,097,900
No. 11 Assembled owned Frozen
Funds Trust corporation
Foreign Pledged
NAM NGAI 0.97% 11,690,520
individual Frozen
GUOTAI JUNAN Pledged
Foreign
SECURITIES(HONGKO 0.72% 8,695,062
corporation Frozen
NG) LIMITED
Domestic Pledged 5,447,381
Li Yichao 0.48% 5,733,081
individual Frozen
Shareholdings of the top ten non-restricted common shareholders
Number of non-restricted Type of shares
Name of shareholder common shares held at the
Type Number
period-end
OCT ENTERPRISES CO. 63,491,526 RMB ordinary share 63,491,526
Domestically listed
HOLY TIME GROUP LIMITED 46,533,615 46,533,615
foreign share
Domestically listed
GAOLING FUND,L.P. 26,400,625 26,400,625
foreign share
China Resources SCP Trust Co., Ltd.
19,060,288 RMB ordinary share 19,060,288
－Extraordinary No. 18 Capital Trust
Sun Zhenxiang 14,093,988 RMB ordinary share 14,093,988
Guoyuan Securities Broker (HK) Domestically listed
13,650,000 13,650,000
Co., Ltd. foreign share
Warburg Trust Co., Ltd.－Shijie
12,097,900 RMB ordinary share 12,097,900
Haoyu No. 11 Assembled Funds Trust
Domestically listed
NAM NGAI 11,690,520 11,690,520
foreign share
GUOTAI JUNAN SECURITIES(HONGKONG) Domestically listed
8,695,062 8,695,062
LIMITED foreign share
Li Yichao 5,733,081 RMB ordinary share 5,733,081
Explanation on associated The first majority shareholder OVERSEAS CHINESE TOWN ENTERPRISES CO.
relationship or/and persons acting has no related-party relationship with other shareholders and they are
in concert among the above-mentioned not acting-in-concert parties, either. Except for that, the Company
shareholders: does not know whether the other shareholders are related parties and
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Report for the Third Quarter of 2014 of Konka Group Co., Ltd.
whether they are acting-in-concert parties.
Explanation on the Top 10
Sun Zhenxiang holds 14,093,988 A-shares through a client credit trading
shareholders participating in the
guarantee securities account of GF Securities Co., Ltd.
margin trading business (if any)
Did any of the top 10 common shareholders or the top 10 non-restricted common
shareholders of the Company carry out any agreed buy-back in the reporting period?
□ Yes √ No
No shareholder of the Company carried out any agreed buy-back in the reporting period.
2. Total number of preferred share holders and shareholdings of the top ten preferred
share holders at the period-end
□ Applicable √ Inapplicable
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Report for the Third Quarter of 2014 of Konka Group Co., Ltd.
Section III. Significant Events
I. Major changes of main accounting statement items and financial indicators in the
reporting period, as well as reasons for the changes
√ Applicable □ Inapplicable
(I) In the reporting period, our internet oriented strategy produced initial results,
with the product structure improved and the sales proportion of intelligent TVs
increased to some extent. However, affected by the drop in the domestic sales volume
and amount of color TVs, the domestic sales income of our color TVs registered a
certain decrease, leading to a certain decrease in the main business profit.
(II) In the reporting period, we focused on enhancing the internet oriented strategy,
with details as follows:
1. We unveiled the E-strategy to build an intelligent TV-Internet operation platform.
With high responsiveness and being always one among the first to notice the
development trends in the industry, we put forward to build the first intelligent
TV-Internet operation platform in China. We not only could deepen the intelligent
TV division to include content production and distribution platforms, but also were
likely to build the largest precision marketing platform of it to achieve maximum
value. Under this strategic goal, we put forward the strategic slogan of
“E-dominance”and unveiled the Group’ E-strategy for the first time. The E-strategy
consists of two cores—E-end and E-platform, the “1+1 Strategy” for short. “E-end”
refers to the extremely easy-to-use TV intelligent end, the household internet
control center. “E-platform” refers to the open and easily enjoyable intelligent
TV Internet operation. For Konka, E-end is the technical support and hardware basis
for E-platform; and E-platform is E-end in the aggregate, platform and internet forms.
E-platform is the future of the Company, and the most important product in the future.
Konka E-platform is a fully open platform for content and application suppliers in
the vertical direction and for counterparts in the horizontal direction. In the
vertical direction, E-platform is a platform of information renewal. Through
information exchange among users on E-platform, we can analyze and integrate data
and renew information to help explore new production functions, application contents
and business modes, which helps form an interest community of the up-and-down-stream
industries. In the horizontal direction, E-platform helps us study the big picture
of the TV industry and promotes the formulation of exchange standards in the industry.
In this way, it will grow into a more convenient, faster and stronger operation
platform, as well as the hub with the richest contents and applications and a highland
for added value.
In the reporting period, our internet oriented consciousness deepened. We initiated
a series of activities and explorations, our products began to show the internet
oriented trend and we became more internet oriented in the specific work.
2. The Company proactively searched for opportunities to strengthen foreign
corporation such as the Internet and application content.
(1) The Company achieved strategic corporation with Youku Tudou Group and the latter
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Report for the Third Quarter of 2014 of Konka Group Co., Ltd.
offered video software services for the Internet TV promoted by the Company and
implanted the function and service of Youku TV App into the full line of products
of the Company.
(2) Joining hands with Tencent Games, we launched the E-TV Game TV. The Konka E-TV
High-end Quality TV will carry selected Tencent games such as Seep Up, GunZ Dash,
QQ Fight the Landlord Poker Game and National War Planes.
3. The Company launched the YI-TV best series and the YIUI professional TV control
system.
(1) In the reporting period, we launched three best series of YI-TV 9800, YI-TV 6680
and YI-TV 1800, as well as the YIUI professional TV control system. As such, we
implemented the “1+1 Strategy” to attract consumer attention with better products
and use experience. The YIUI system is a professional TV control system designed for
intelligent TVs, making intelligent cont
