SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
SHENZHEN ZHONGHENG HUAFA CO., LTD.
ANNUAL REPORT 2015
April 2016
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of Shenzhen Zhongheng Huafa Co., Ltd. (hereinafter referred to as
the Company) hereby confirm that there are no any fictitious statements,
misleading statements, or important omissions carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completion of the whole contents.
Li Zhongqiu, Principal of the Company, Yang Bin, person in charger of
accounting works and Wu Aijie, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2015 Annual
Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
Concerning the forward-looking statements with future planning involved in the
Report, they do not constitute a substantial commitment for investors. Majority
investors are advised to exercise caution of investment risks.
The Company has no plan of cash dividends carried out, bonus issued and
capitalizing of common reserves either.
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
Contents
Section I Important Notice, Contents and Paraphrase ................................................................. 2
Section II Company Profile and Main Finnaical Indexes ............................................................. 9
Section III Summary of Company Business .................................................................................. 9
Section IV Discussion and Analysis by the Management Team ................................................. 11
Section V Important Events .......................................................................................................... 27
Section VI Changes in shares and particular about shareholders............................................... 34
Section VII Preferred Stock……………………………………………………………………….47
Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees ...... 35
Section IX Corporate Governance ................................................................................................. 56
Section X Financial Report ............................................................................................................. 51
Section XI Documents available for reference .............................................................................. 51
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
Paraphrase
Items Refers to Contents
Company, Shen Huafa Refers to SHENZHEN ZHONGHENG HUAFA CO., LTD.
Hengfa Technology Refers to Wuhan Hengfa Technology Co., Ltd.
Huafa Property Refers to Shenzhen Zhongheng Huafa Property Co., Ltd
Huafa Lease Refers to Shenzhen Huafa Property Lease Management Co., Ltd
Huafa Trade Refers to Wuhan Zhongheng Huafa Trade Co., Ltd.
Wuhan Zhongheng New Science & Technology Industrial Group Co.,
Wuhan Zhongheng Group Refers to
Ltd.
HK Yutian Refers to Hong Kong Yutian International Investment Co., Ltd.
Hengsheng Photoelectricity Refers to Wuhan Hengsheng Photoelectricity Industry Co., Ltd.
Hengsheng Yutian Refers to Wuhan Hengsheng Yutian Industrial Co., Ltd.
Yutian Henghua Refers to Shenzhen Yutian Henghua Co., Ltd.
Huafa Hengtian Refers to Shenzhen Huafa Hengtian Co., Ltd.
Huafa Hengtai Refers to Shenzhen Huafa Hengtai Co., Ltd.
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
Section II Company Profile and Main Finnaical Indexes
I. Company information
Short form of the stock SHEN HUAFA-A, SHEN HUAFA- B Stock code 000020 200020
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
深圳中恒华发股份有限公司
Chinese)
Short form of the Company
深华发
(in Chinese)
Foreign name of the Company
SHENZHEN ZHONGHENG HUAFA CO., LTD.
(if applicable)
Legal representative Li Zhongqiu
Registrations add. 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Code for registrations add 518031
Offices add. 33/F, No. 2 Building of Dachong Business Center, Nanshan District, Shenzhen
Codes for office add. 518057
Company’s Internet Web Site http://www.hwafa.com.cn
E-mail hwafainvestor@126.com.cn
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Yang Bin Niu Yuxiang
33/F, No. 2 Building of Dachong Business 33/F, No. 2 Building of Dachong Business
Contact add.
Center, Nanshan District, Shenzhen Center, Nanshan District, Shenzhen
Tel. 0755-86360220 0755-86360201
Fax. 0755-86360206 0755-86360206
E-mail hwafainvestor@126.com.cn hwafainvestor@126.com.cn
III. Information disclosure and preparation place
Newspaper appointed for information disclosure China Securities Journal; Securities Times; Hong Kong Commercial Daily
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
Website for annual report publish appointed by CSRC http://www.cninfo.com.cn
Preparation place for annual report Office of the Board of SHENZHEN ZHONGHENG HUAFA CO., LTD.
IV. Registration changes of the Company
Organization code 61883037-2
Before the change of controlling shareholders: the main business was production and
sales of color TV, printed circuit board and injection molded parts etc. After the change
Changes of main business since listing (if
of controlling shareholders: the main business gradually adjusted to production and
applicable)
sales of injection molded parts, foam part (light packaging materials) and LCD whole
machine.
The Company’s predecessor was Shenzhen Huafa Electronic Co., LTD, which was
founded in 1981, initiated and established by three legal persons-- Shenzhen
Electronics Group Co., LTD, China Zhenhua Electronic Group Co., LTD and Hong
Kong Luks Industrial Co., LTD. In June 2005, Wuhan Zhongheng Group transferred
Previous changes for controlling the 44.12% equity of company, held by original first and second largest shareholder of
shareholders (if applicable) the Company Shenzhen Electronics Group Co., LTD and China Zhenhua Electronic
Group Co., LTD, and equity transfer formalities completed in April 2007; Wuhan
Zhongheng Group became the controlling shareholder of the Company. In September
2007, the company officially changed its name to “Shenzhen Zhongheng Huafa Co.,
Ltd”.
V. Other relevant information
CPA engaged by the Company
Name of CPA Shinewing Certified Public Accountants LLC
9/F, Block A, Fu Hua Mansion No.8 Chaoyang Men, Bei da jie, Dong Cheng District, Beijing,
Offices add. for CPA
P.R.China
Signing Accountants Zhang Weijian, Gu Fanqiu
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting
error correction or not
□ Yes √ No
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
2015 2014 Changes over last year
Operating income (RMB) 499,455,781.11 694,839,760.10 -28.12% 626,821,044.64
Net profit attributable to
shareholders of the listed -6,731,513.11 7,687,620.27 -187.56% -6,517,401.44
company(RMB)
Net profit attributable to
shareholders of the listed company
-31,741,774.80 2,322,082.33 -1,466.95% -5,934,309.10
after deducting non-recurring gains
and losses(RMB)
Net cash flow arising from
173,486,015.99 119,492,159.01 45.19% -69,353,440.38
operating activities(RMB)
Basic earnings per share
-0.0238 0.0271 -187.82% -0.0230
(RMB/Share)
Diluted earnings per share
-0.0238 0.0271 -187.82% -0.0230
(RMB/Share)
Return on Equity -2.27% 2.77% -5.04% -2.35%
Changes over end of
End of 2015 End of 2014 End of 2013
last year
Total assets (RMB) 1,155,089,236.67 1,162,740,984.93 -0.66% 731,348,499.86
Net assets attributable to
shareholder of listed company 311,406,562.20 281,351,269.74 10.68% 273,663,649.47
(RMB)
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
VIII. Quarterly main financial index
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 117,513,081.51 131,221,548.35 140,688,910.96 110,032,240.29
Net profit attributable to
511,851.85 13,665,459.18 5,817,241.98 -26,726,066.12
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
174,494.55 -8,415,206.76 -16,478,039.21 -7,023,023.38
after deducting non-recurring gains
and losses
Net cash flow arising from
-2,165,279.32 19,193,873.05 31,031,444.53 125,425,977.73
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2015 2014 2013 Note
Gains/losses from the disposal of
non-current asset (including the write-off 449,051.44 1,587,819.80 104,043.85
that accrued for impairment of assets)
Governmental subsidy reckoned into current
gains/losses (not including the subsidy
enjoyed in quota or ration according to 1,691,800.00 4,159,795.00 1,652,600.00
national standards, which are closely
relevant to enterprise’s business)
Other non-operating income and expenditure
690,149.43 149,500.69 -1,736,569.94
except for the aforementioned items
Other gain/loss items satisfying the
25,247,171.27 983,612.12
definition of nonrecurring gain/loss account
Less: Impact on income tax 3,067,910.45 1,515,189.67 603,166.25
Total 25,010,261.69 5,365,537.94 -583,092.34 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
Section III Summary of Company Business
I. Main businesses of the company in the reporting period
After years of development, the company has gradually formed two main businesses in industry and property
management. Among them, the industrial business mainly includes injection molding, foam pieces (light-weight
packaging materials), and complete machine production and sales of liquid crystal display, property management
business is mainly the lease of its own property.
The company's industrial business mainly provides auxiliary products and services for the home appliance
industry. With the acceleration of new urbanization process in China and upgrading and updating of household
appliance consumption, the home appliance industry will continue to maintain a relatively fast growth; the
development of home appliances and other downstream industries provides broad markets for the upstream
auxiliary products. By virtue of years of industry resources and technology accumulation, the company conforms
to the market demand and optimizes the product structure and performance, and the company's products and
services have accepted by the downstream manufacturers such as Gree, Haier, TCL, etc. and possess certain
competitiveness in the industry. But it also should be noted that the current injection molding, foam pieces and
liquid crystal display business are facing fierce market competition and cost pressures, the company’s profitability
in industrial business is weaker than expectation, the company needs to further enhance the level of research and
development, develop new products, expand downstream channels and cultivate its own brand so as to further
enhance the profitability in industrial business. The transformation and upgrading of industrial business requires a
lot of financial supports.
On the other hand, the transformation and upgrading and profitability of industrial business are weaker than
expectation in recent years, under this circumstance, the company has actively developed the property
management business, liquidized the remnant assets, and carried out the decoration and investment promotion of
its own property Huafa Building, the property management business has made good profits for the company and
became an important strategic business of the company. In order to enhance the profitability, the company intends
to further strengthen the professionalism of the company's property business, explore diversified property
management model, and timely expand the scale of property lease.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets N/A
Transferred assets from the reconstruction of old buildings in Gongming are classified as
Fixed assets
available for sale assets, the fixed assets in current period have decreased
SHENZHEN ZHONGHENG HUAFA CO., LTD.ANNUAL REPORT 2015
Intangible assets No major change
Transferred assets from the reconstruction of Gongming Electronic City are classified as
Construction in progress
available for sale assets, the constructions in process in current period have decreased
Transferred assets from th
