Stock Code: 000505, 200505 Stock Name: JLKG, JL-B Announcement No. 2020-065
HAINAN JINGLIANG HOLDINGS CO., LTD.THIRD QUARTERLY REPORT 2020 (SUMMARY)
Part I Important NotesThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of Hainan Jingliang Holdings Co., Ltd. (hereinafterreferred to as the “Company”) hereby guarantee that the contents of this Report and itssummary are true, accurate and complete and free of any misrepresentations, misleadingstatements or material omissions, and collectively and individually accept legal responsibilityfor such contents.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.Li Shaoling, the Company’s legal representative, Guan Ying, the Company’s head forfinancial affairs, and Liu Quanli, head of the Company’s financial department (equivalent tofinancial manager) hereby guarantee that the financial statements carried in this Report aretruthful, accurate and complete.This Report and its summary have been prepared in both Chinese and English. Should therebe any discrepancies or misunderstandings between the two versions, the Chinese versionsshall prevail.
Part II Key Corporate Information
I Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| 30 September 2020 | 31 December 2019 | Change (%) | |||
| Total assets (RMB) | 6,057,365,761.06 | 5,231,266,600.19 | 15.79% | ||
| Equity attributable to the listed company’s shareholders (RMB) | 2,645,832,412.43 | 2,406,039,283.87 | 9.97% | ||
| Q3 2020 | YoY change (%) | Q1-Q3 2020 | YoY change (%) | ||
| Operating revenue (RMB) | 1,928,342,701.75 | 5.67% | 5,679,115,769.38 | 11.18% | |
| Net profit attributable to the listed company’s shareholders (RMB) | 40,894,930.95 | 20.84% | 114,657,826.14 | 34.34% | |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 32,040,014.29 | 13.31% | 100,035,204.24 | 44.00% | |
| Net cash generated from/used in operating activities (RMB) | -273,955,632.37 | -221.14% | -86,859,811.61 | -119.44% | |
| Basic earnings per share (RMB/share) | 0.06 | 20.00% | 0.16 | 33.33% | |
| Diluted earnings per share (RMB/share) | 0.06 | 20.00% | 0.16 | 33.33% | |
| Weighted average return on equity (%) | 1.56% | 5.41% | 4.65% | 26.02% | |
Exceptional gains and losses:
√ Applicable □ Not applicable
Unit: RMB
| Item | Q1-Q3 2020 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -30,020.88 | |
| Government grants through profit or loss (exclusive of government grants given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 7,543,633.15 | |
| Gain or loss on fair-value changes on held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and derivative financial assets and liabilities and other debt investments (exclusive of the effective portion of hedges that arise in the Company’s | 13,538,448.19 |
| ordinary course of business) | ||
| Non-operating income and expense other than the above | -727,186.58 | |
| Less: Income tax effects | 5,293,637.02 | |
| Non-controlling interests effects (net of tax) | 408,614.96 | |
| Total | 14,622,621.90 | -- |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.II Total Number of Shareholders and Holdings of Top 10 of Them as at the End of theReporting Period
1. Numbers of Ordinary Shareholders and Preference Shareholders with Resumed Voting Rights as well asHoldings of Top 10 Shareholders
Unit: share
| Number of ordinary shareholders | 79,532 | Number of preference shareholders with resumed voting rights (if any) | 0 | |||||
| Top 10 shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held | Restricted shares held | Shares in pledge or frozen | |||
| Status | Shares | |||||||
| BEIJING GRAIN GROUP CO., LTD. | State-owned corporation | 39.68% | 288,439,561 | 164,877,598 | ||||
| BEIJING STATE-OWNED CAPITAL OPERATION AND MANAGEMENT CENTER | State-owned corporation | 6.67% | 48,510,460 | 48,510,460 | ||||
| WANG YUECHENG | Domestic individual | 5.66% | 41,159,887 | 41,159,887 | ||||
| LI SHERYN ZHAN MING | Foreign individual | 1.23% | 8,941,300 | 0 | ||||
| CHINA DEVELOPMENT BANK CAPITAL CO., LTD. | State-owned corporation | 0.94% | 6,849,384 | 0 | ||||
| GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND MANAGEMENT CO., LTD.—GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND (L.P.) | Other | 0.51% | 3,684,503 | 0 | ||||
| MEI JIANYING | Domestic | 0.36% | 2,604,203 | 0 | ||||
| individual | ||||||
| ZHANG XIAOXIA | Domestic individual | 0.27% | 1,949,250 | 0 | ||
| WANG XIAOXING | Domestic individual | 0.24% | 1,748,400 | 0 | ||
| ZHU PENG | Domestic individual | 0.22% | 1,577,900 | 0 | ||
| Top 10 unrestricted shareholders | ||||||
| Name of shareholder | Unrestricted ordinary shares held | Shares by class | ||||
| Class | Shares | |||||
| BEIJING GRAIN GROUP CO., LTD. | 123,561,963 | RMB-denominated ordinary share | 123,561,963 | |||
| LI SHERYN ZHAN MING | 8,941,300 | Domestically listed foreign share | 8,941,300 | |||
| CHINA DEVELOPMENT BANK CAPITAL CO., LTD. | 6,849,384 | RMB-denominated ordinary share | 6,849,384 | |||
| GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND MANAGEMENT CO., LTD.—GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND (L.P.) | 3,684,503 | RMB-denominated ordinary share | 3,684,503 | |||
| MEI JIANYING | 2,604,203 | RMB-denominated ordinary share | 2,604,203 | |||
| ZHANG XIAOXIA | 1,949,250 | Domestically listed foreign share | 1,949,250 | |||
| WANG XIAOXING | 1,748,400 | RMB-denominated ordinary share | 1,748,400 | |||
| ZHU PENG | 1,577,900 | RMB-denominated ordinary share | 1,577,900 | |||
| ORIENT SECURITIES (HONG KONG) LIMITED | 1,354,500 | Domestically listed foreign share | 1,354,500 | |||
| FOSHAN SHUNDE XIHUA ELECTRONICS CO., LTD. | 1,144,000 | RMB-denominated ordinary share | 1,144,000 | |||
| Related or acting-in-concert parties among the shareholders above | ① Beijing State-Owned Capital Operation and Management Center owns 100% of Beijing Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is the controlling shareholder of the Company (a 39.68% holding). ② Wang Yuecheng is a Deputy General Manager of the Company. Apart from the aforesaid, the Company does not know whether there are any other related parties or acting-in-concert parties among the top 10 shareholders. | |||||
| Top 10 shareholders engaged in securities | ① Shareholder Wang Xiaoxing held 1,748,400 shares in the Company through his | |||||
| margin trading (if any) | account of collateral securities for margin trading in Soochow Securities Co., Ltd. ② Shareholder Zhu Peng held 1,315,200 shares in the Company through his account of collateral securities for margin trading in China Merchants Securities Co., Ltd. |
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinaryshareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
2. Number of Preference Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
Part III Significant EventsI Changes in Key Financial Statement Line Items and Explanation of why
√ Applicable □ Not applicable
1. Derivative financial assets increased primarily driven by an increase in deposits for futures contracts in thecurrent period.
2. Prepayments increased primarily driven by an increase in prepayments to suppliers due to new soy beanpurchases for the oils and oilseeds business in the current period.
3. Other non-current assets increased primarily driven by new bank deposits with a term of over one year in thecurrent period.
4. Short-term borrowings increased primarily driven by bank loan raised for new soy bean purchases for the oilsand oilseeds business in the current period.
5. R&D expense increased primarily driven by the reclassification of certain R&D personnel’s salaries fromadministrative expense to R&D expense in the current period.
6. Return on investment increased primarily driven by increases in return on joint venture investments and inwealth management income.
7. Gain on fair value changes decreased primarily driven by changes in the value of futures contracts.
8. Net profit increased primarily driven by year-on-year increases in both production and sales volume in the oilspressing business due to a strong market in the current period, boosting revenue and gross profit.
9. Net cash generated from operating activities decreased primarily driven by a year-on-year increase in soy beanpurchases for the oils pressing business in the current period.
10. Net cash generated from financing activities increased primarily driven by bank loan raised for new soy beanpurchases for the oils and oilseeds business in the current period.II Progress, Influence and Solutions in respect of Significant Events
□ Applicable √ Not applicable
Progress of any share repurchase:
□ Applicable √ Not applicable
Progress of any reduction of the repurchased shares through centralized bidding:
□ Applicable √ Not applicable
III Commitments that the Company’s Actual Controller, Shareholders, Related Parties,Acquirers, the Company Itself or Other Relevant Parties, Failed to Fulfill on Time during theReporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.IV Financial Investments
1. Securities Investments
√ Applicable □ Not applicable
Unit: RMB
| Type of securities | Code of securities | Name of securities | Initial investment cost | Accounting measurement method | Opening carrying amount | Gain/loss on fair-value changes in the current period | Cumulative fair-value changes through equity | Purchased in the current period | Sold in the current period | Gain/loss in the current period | Closing carrying amount | Accounting title | Funding source |
| Other | 204001 | GC001 | Cost method | 289,900,000.00 | 289,900,000.00 | 30,767.16 | 0.00 | Other | Self-funded | ||||
| Other | 204003 | GC003 | Cost method | 40,000,000.00 | 40,000,000.00 | 34,619.73 | 0.00 | Other | Self-funded | ||||
| Other | 204007 | GC007 | Cost method | 50,000,000.00 | 0.00 | 0.00 | 50,000,000.00 | Other | Self-funded | ||||
| Total | 0.00 | -- | 0.00 | 0.00 | 0.00 | 379,900,000.00 | 329,900,000.00 | 65,386.89 | 50,000,000.00 | -- | -- | ||
| Disclosure date of the announcement on the Board’s approval of securities investments | 7 March 2020 | ||||||||||||
| Disclosure date of the announcement on the general meeting’s approval of securities investments (if | |||||||||||||
2. Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: RMB’0,000
any)Type of derivative financial
instrument
| Type of derivative financial instrument | Start date | End date | Closing investment amount | Closing investment amount as % of the Company’s closing net assets | Actual gain/loss in the current period |
| Agricultural commodity futures | 1 January 2020 | 30 September 2020 | 27,395.28 | 10.35% | 2,756.59 |
| Forex forwards | 1 January 2020 | 30 September 2020 | 42,364.52 | 16.01% | -1,922.48 |
| Forex forwards | 14 September 2020 | 30 November 2020 | 802.8 | 0.30% | 0 |
| Forex forwards | 16 September 2020 | 31 December 2020 | 858 | 0.32% | 0 |
| Forex forwards | 17 September 2020 | 31 December 2020 | 132 | 0.05% | 0 |
| Forex forwards | 25 September 2020 | 31 December 2020 | 896.4 | 0.34% | 0 |
| Total | -- | -- | 72,449 | 27.37% | 834.11 |
| Funding source | Self-funded | ||||
| Legal matters involved (if applicable) | N/A | ||||
| Disclosure date of the announcement on the Board’s approval of investments in derivative financial instruments (if any) | 7 March 2020 | ||||
| 28 March 2020 | |||||
| Disclosure date of the announcement on the general meeting’s approval of investments in derivative financial instruments (if any) | 18 April 2020 | ||||
| Risk analysis and control measures in respect of derivative investments held in the Reporting Period (including but not limited to market risk, liquidity risk, credit risk, operational risk, | The Company’s conduction of hedging business is not aimed at speculation, but mainly to effectively avoid the impact of raw material price fluctuation on the Company. However, there will be certain risks: 1. Price fluctuation risk: price fluctuation risk may be generated when the futures market changes greatly, resulting in transaction losses; 2. Capital risk: capital risk may be correspondingly brought because the futures trading adopts margin and marking-to-market system; 3. Internal control risk: there may be risks due to imperfect internal control system for the high expertise and complexity of futures trading; 4. Technical risk: there may be technical risks due to incomplete computer systems. The Company adopts following risk control measures: 1. Matching | ||||
| legal risk, etc.) | the hedging business with the Company’s production and operation so as to maximally reduce the price fluctuation risk; 2. The Company will reasonably dispatch its own funds for hedging business, strictly control the hedging fund scale and reasonably plan and use margins; 3. Management System for Commodity Futures Trading is formulated based on actual situation of the Company and pursuant to governing stipulations of Guidelines for Standard Operation of Companies Listed in Shenzhen Stock Exchange which have made clearly stipulations about the amount, variety scope, approval authority, internal approval procedures, responsible departments and persons, information isolation measures, internal risk report and related solution process, information disclosure, etc. regarding hedging business. The Company will strictly control all sectors in accordance with Management System for Commodity Futures Trading; 4. Establishing qualified systems for transaction, communication and information services so as to guarantee the normal operation of the transaction system and smooth proceeding of transactions. When a wrong order occurs, corresponding measures should be timely taken to reduce losses. |
| Changes in market prices or fair value of derivative investments in the Reporting Period (fair value analysis should include measurement method and related assumptions and parameters) | The value of the Company’s future contracts changed according to the contract prices declared by the future exchange, which were broadly representative. And the fair value of the Company’s future contracts was executed in strict compliance with the future exchange’s settlement methods. |
| Significant changes in accounting policies and specific accounting principles adopted for derivative investments in the Reporting Period compared to the last reporting period | None |
| Opinion of independent directors on derivative investments and risk control | 1. Opinion of independent directors on the Proposal on 2020 Futures Hedging Plan of Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. and Beijing Jingliang Oils Co., Ltd.: after check, the Company carried out the business of futures hedging based on normal production and management, relying on specific business. Under the premise of ensuring normal production and management, the Company used futures hedging tools to avoid the adverse impacts on the Company’s operation from the large price fluctuation of raw materials and products, which is not detrimental to the interests of the Company and all other shareholders, especially minority shareholders. At the same time, the Company formulated relevant systems, and specific operating instructions for the business of futures hedging through strengthening internal control and implementing risk prevention measures. It is agreed that the Company and its subsidiaries will continue to conduct futures hedging business according to the relevant regulations. 2. Opinion of independent directors on the Proposal on Conducting Foreign Exchange Derivatives Trading Business by the Company and Majority-owned Subsidiaries: after check, the relevant decision-making procedures for the Company and its majority-owned subsidiaries to conduct foreign exchange derivatives trading business are in compliance with relevant national laws, regulations and the governing provisions of the Articles of Association after verification. Based on |
V Progress of Projects Financed with Raised Funds
√ Applicable □ Not applicable
The Company’s projects financed with raised funds are the intermediary agency fee and transaction tax and feeproject, the technological R&D centre project, and the channel and brand development project. The intermediaryagency fee and transaction tax and fee project has been completed, while the other two projects are in a stage ofadjustment.
VI 2020 Annual Operating Performance ForecastWarning of a forecast loss on or a forecast significant year-on-year change in the 2020 annual net profit, as well asexplanation of why:
□ Applicable √ Not applicable
VII Significant Contracts Arising from the Company’s Ordinary Course of Business
□ Applicable √ Not applicable
VIII Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Unit: RMB’0,000
normal production and operation, the Company uses foreign exchange derivatives instruments toreduce exchange rate risks and finance costs, and control business risks. There is no harm to theinterests of the Company and all other shareholders, especially minority shareholders. It is agreedthat the Company and its majority-owned subsidiaries will conduct foreign exchange derivativetrading business within the consideration amount, and submit to the general meeting fordeliberation.
Type
| Type | Funding source | Amount | Undue amount | Unrecovered overdue amount |
| Bank’s wealth management product | Self-funded | 35,330 | 8,830 | 0 |
| Broker’s wealth management product | Idle raised funds | 38,700 | 28,000 | 0 |
| Total | 74,030 | 36,830 | 0 | |
High-risk wealth management transactions with a significant single amount, or with low security, low liquidity or
no principal protection:
√ Applicable □ Not applicable
Unit: RMB’0,000
| Trustee | Type of trustee | Type of wealth management product | Principal | Funding source | Start date | End date | Investment with principal | Way of payback | Reference annualized rate of return | Expected return (if any) | Actual gain/loss in the Reporting Period | Recovery of the gain/loss in the Reporting Period | Impairment allowance (if any) | Through prescribed procedures or not | Any plan for further transactions | Summary and index to more information (if any) |
| China Securities Co., Ltd. | Broker | Income certificate | 28,000 | Idle raised funds | 19 August 2020 | 22 February 2020 | As contractually agreed | Payback of principal with interest upon maturity | 2.95% | 0 | 0 | Unredeemed | Yes | Yes | Announcement No. 2020-049 on www.cninfo.com.cn | |
| Total | 28,000 | -- | -- | -- | -- | -- | -- | 0 | 0 | -- | -- | -- | -- | |||
Wealth management transactions with possible impairments including an expectedly unrecoverable principal:
□ Applicable √ Not applicable
IX Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Occupation of the Company’s Capital by the Controlling Shareholder or any of Its RelatedParties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI Communications with the Investment Community such as Researches, Inquiries andInterviews Received during the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Hainan Jingliang Holdings Co., Ltd.24 October 2020