Summary of 2020 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.Stock code: 000045,200045 Stock Abbreviation: Shen Textile A, Shen Textile B Announcement No. :2021-19
Summary of 2020 Annual Report of Shenzhen Textile
(Holdings) Co., Ltd.
I. Important notesThe summary is abstract from full-text of annual report, for more details information , investors should found inthe full-text of annual report that published on website of Shenzhen Stock Exchange and other website appointedby CSRC.All the directors attended the board meeting for the review of this Report.Non-standard auditor’s opinion
□ Applicable √Not applicable
Preliminary plan for profit distribution to the common shareholders or turning the capital reserve into the sharecapital for the reporting period, which has been reviewed and approved at the board meeting
□ Applicable √Not applicable
The Company has plan of Converting provident fund to share capital .
√Applicable □ Not applicable
The company’s common stock profit distribution plan approved by the board of directors this time is: based on507,772,279 shares, a cash dividend of 0.3 yuan (tax included) will be distributed to all shareholders for every 10shares, and 0 shares of bonus shares (tax included) will be given away. Increase share capital.The profit distribution plan for preferred stocks for the reporting period passed by the board of directors
□ Applicable √Not applicable
II. Basic information about the company
1. Company profile
| Stock abbreviation | Shen Textile A，Shen Textile B | Stock code | 000045，200045 | |
| Stock exchange for listing | Shenzhen Stock Exchange | |||
| Contact person and contact manner | Board secretary | Securities affairs Representative | ||
| Name | Jiang Peng | Li Zhenyu | ||
| Office Address | 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen | 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen | ||
| Fax | 0755-83776139 | 0755-83776139 | ||
| Tel | 0755-83776043 | 0755-83776043 | ||
| jiangp@chinasthc.com | lizy@chinasthc.com | |||
2. Brief introduction to the main business or products in the reporting period
(1)Main Business the Company
The company's main business covered such the high and new technology industry as represented by LCD
Summary of 2020 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.polarizer, its own property management business and the retained business of high-end textile and garment.During the reporting period, the company's main business did not have big change. Firstly, The companyadjusted its marketing strategy, optimized its customer and product structure, and successfully completed theintroduction and mass production of multiple projects for panel customers such as LGD, Huaxing Optoelectronics,Huike, and Sharp to further enhance its anti-risk and profitability capabilities. Secondly, Actively promote costreduction and quality improvement, reduce costs through various measures such as increasing machine speed,equipment and technological transformation, upgrading the level of automation in the back-end, and broadeningprocurement channels, while taking into account the improvement of product quality. Thirdly, actively respond tothe Covid-19, overcome the adverse effects, and make every effort to promote the construction of theultra-large-size TV polarizer industrialization project (line 7). The line 7 project was affected by the epidemic andresumed work in mid-March 2020. The company adopted strict control of the epidemic Measures such asprevention and control, actively coordinating the entry of Japanese technical personnel into the factory, andformulating a special assessment plan for the construction of Line 7 projects to accelerate the progress of theproject to the greatest extent.. Fourthly, in order to jointly respond to the novel coronavirus pneumonia epidemicand actively fulfill social responsibilities, the company and its wholly-owned enterprises responded to the call ofthe Shenzhen Municipal Party Committee and the State-owned Assets Supervision and AdministrationCommission to reduce or exempt some tenants of self-owned properties (except residential properties) for 3months . Fifthly, the textile industry makes full use of my country's advantages of effective epidemic preventionand control and early resumption of work and production, actively seizing market share, and achieving bothgrowth in operating income and net profit. Sixthly, in order to improve the company's overall asset operationcapability and revitalize the stock assets, the company implements transfer and liquidation work for the poorlymanaged shareholding companies, and concentrates on the development of the polarizer business. Seventhly,implement the epidemic prevention and control work, pay attention to safe and green production, the company hasset up a special class for epidemic prevention and control, and formed an efficient epidemic prevention workmechanism with division of responsibility, layer-by-layer transmission, and coordination to ensure theimplementation of various deployment measures, centralized rectification, and focus Investigate safety andenvironmental issues, promote the safe and stable development of enterprises, and actively fulfill socialresponsibilities.
(2)The Company's main products made in each polarizer production line and their application are as follows:
Polarizers are the upstream raw material of LCD panels and one of the key basic materials in the flat paneldisplay industry. They are widely used in smart phones, tablet computers, TVs and other LCD panels, OLEDdisplay panels, as well as sunglasses. The company currently has 6 mass-produced polarizer production lines. Theproducts cover TN, STN, TFT, OLED, 3D, dye films, optical films for touch screens and other fields. They aremainly used in TV, NB, navigator, Monitor, automotive, industrial control, Instruments, smart phones, wearabledevices, 3D glasses, sunglasses and other products, the company has become a mainstream panel company such asHuaxing Optoelectronics, BOE, Sharp, LGD, Shenzhen Tianma, Huike, etc. by continuously strengthening saleschannel expansion and building its own brand. Qualified suppliers.The Company's main products made in each polarizer production line and their application are as follows:
| Line | Place | Product breadth | Planned capacity | Main products |
| Line 1 | Pingshan | 500mm | 600,000 m2 | TN/STN/ dye film |
| Line 2 | Pingshan | 500mm | 1.2 million m2 | TN/STN/CSTN |
| Line 3 | Pingshan | 650mm | 1 million m2 | TFT |
| Line 4 | Pingshan | 1490mm | 6 million m2 | TFT |
| Line 5 | Pingshan | 650mm | 2 million m2 | TFT |
| Line 6 | Pingshan | 1490mm | 10 million m2 | TFT/OLED |
| Line 7 | Pingshan | 2500mm | 32 million m2 | TFT/OLED |
(3)Company's business model
The polarizer industry has gradually shifted from a traditional business model of R&D, production, and salesto a customer-centric, joint research and development, and comprehensive service business model. Byunderstanding customer needs, joint research and develop, manage high-standard production, manufacturehigh-quality products, use advanced polarizer roll and attaching equipment to cooperate with downstream panelmanufacturers' production lines, reduce production links, reduce production and transportation costs, and createvalue for customers, win-wins.
(4)Major factors for driving the Company's performance
Refer to "III. Analysis on core competitiveness" in this section for details..
(5)Development stage and periodic characteristics of the industry where the Company is involved and theCompany's position in the industry
Refer to "IX. Company's outlook for future development" in Section IV for details.In the future, the company will rely on more than 20 years of industrial operation experience and locationadvantages to continue to deepen the reform of mixed ownership and strengthen strategic cooperation. Throughthe integration of industrial resources, improve production technology and management level; at the same time,seize market opportunities, make every effort to promote the construction of ultra-wide polarizer production line,and seize the high-margin ultra-large-size LCD TV polarizer product market; make polarizers well The industryalso extends to other flat-panel display-related optical film industries, and then becomes stronger, bigger andbetter.
3.Major accounting data and financial indicators
(1)Major accounting data and financial indicators for the last three years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √No
In RMB
| 2020 | 2019 | Changed over last year（％） | 2018 | |
| Operating income（RMB） | 2,108,964,687.80 | 2,158,184,855.71 | -2.28% | 1,272,356,771.34 |
| Net profit attributable to the shareholders of the listed company（RMB） | 37,267,995.74 | 19,679,910.43 | 89.37% | -22,980,624.93 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company(RMB) | 18,084,607.04 | -41,179,849.56 | 143.92% | -65,404,429.81 |
| Cash flow generated by business operation, net（RMB） | 1,930,932.76 | 383,145,788.50 | -99.50% | -460,494,321.15 |
| Basic earning per share(RMB/Share) | 0.07 | 0.04 | 75.00% | -0.04 |
| Diluted gains per share(RMB/Share)(RMB/Share) | 0.07 | 0.04 | 75.00% | -0.04 |
| Weighted average ROE(%) | 1.36% | 0.75% | 0.61% | -0.96% |
| 2020 | 2019 | Changed over last year（％） | 2018 | |
| Gross assets（RMB） | 4,969,547,552.23 | 4,531,399,885.99 | 9.67% | 4,619,203,416.79 |
| Net assets attributable to shareholders of the listed company（RMB） | 2,766,234,174.39 | 2,727,764,144.36 | 1.41% | 2,373,329,991.86 |
(2)Main Financial Index by Quarters
In RMB
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operating income | 384,038,897.58 | 472,274,451.16 | 616,632,602.23 | 636,018,736.83 |
| Net profit attributable to the shareholders of the listed company | -5,827,092.54 | 6,546,827.28 | 24,726,413.83 | 11,821,847.17 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company | -9,495,160.00 | 2,377,214.57 | 20,780,909.95 | 4,421,642.52 |
| Net Cash flow generated by business operation | -84,585,231.55 | -51,034,243.68 | 85,768,341.55 | 51,782,066.44 |
Whether significant variances exist between the above financial index or the index with its sum and the financial
index of the quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes √No
4.Share capital and shareholders
(1)Number of holders of ordinary shares and preference shares with restored voting right and Top 10 shareholders
In shares
| Total number of common shareholders at the end of the reporting period | 29,622 | Total shareholders at the end of the month from the date of disclosing the annual report | 28,741 | The total number of preferred shareholders voting rights restored at period-end(if any) | 0 | Total preferred shareholders at the end of the month from the date of disclosing the annual report(if any) | 0 | |||||
| Shareholdings of top 10 shareholders | ||||||||||||
| Shareholders | Nature of shareholder | Proportion of shares held(%) | Number of shares held at period -end | Amount of restricted shares held | Number of share pledged/frozen | |||||||
| State of share | Amount | |||||||||||
| Shenzhen Investment Holdings Co., Ltd. | State-owned legal person | 46.10% | 234,069,436 | |||||||||
| Shenzhen Shenchao Technology Investment Co., Ltd. | State-owned | 3.18% | 16,129,032 | |||||||||
| Sun Minghui | Domestic Nature person | 0.64% | 3,224,767 | |||||||||
| Su Weipeng | Domestic Nature person | 0.56% | 2,823,066 | |||||||||
| Chen Xiaobao | Domestic Nature person | 0.49% | 2,509,100 | |||||||||
| Deng Yan | Domestic Nature person | 0.45% | 2,277,700 | |||||||||
| Shen Zhenxing | Domestic Nature person | 0.35% | 1,765,300 | |||||||||
| Wang Zhongjin | Domestic Nature person | 0.33% | 1,678,000 | |||||||||
| Hou Xiulan | Domestic Nature person | 0.32% | 1,612,591 | |||||||||
| Li Zengmou | Domestic Nature person | 0.31% | 1,598,797 | |||||||||
| Related or acting-in-concert parties among shareholders above | Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of Shenzhen Investment Holdings Co., Ltd., According to the decision of the State-owned Assets Supervision and Administration Commission of Shenzhen Municipal People's Government, Shenzhen Shenchao Technology Investment Co., Ltd was transferred to Shenzhen Major Industrial Investment Group Co., Ltd in June 2019. After the completion of the transfer, Shenzhen Investment Holdings Co., Ltd., the controlling shareholder of the company, no longer holds the equity of Shenzhen Shenchao Technology Investment Co., Ltd., and Shenzhen Shenchao Technology Investment Co., Ltd. is changed to a wholly-owned subsidiary of the Industrial Investment Group. Shenzhen Investment Holdings Co., Ltd. and Shenzhen Shenchao Technology Investment Co., Ltd. no longer constitute a concerted person relationship.Except this, the Company did not whether there is relationship between the top ten shareholders holding non-restricted negotiable shares and between the top ten shareholders holding non-restricted negotiable shares and the top 10 shareholders or whether they are persons taking concerted action defined in Regulations on Disclosure of Information about Shareholding of Shareholders of Listed Companies | |||||||||||
| Explanation on shareholders participating in the margin trading business(if any ) | Company shareholder Chen Xiaobao holds 2,332,700 shares through a credit transaction secured securities account | |||||||||||
(2)Number of the preference shareholders and the shareholdings of the top 10 of them
□ Applicable √Not applicable
No preference shareholders in the reporting period
(3)Relationship between the Company and its actual controller in the form of diagram
5. Corporation bonds
Corporate Bonds Indicate by tick market whether the Company has any corporate bonds publicly offered andlisted on the stock exchange, which were undue before the date of this Report’s approval or were due but couldnot be redeemed in full.NoIII. Discussion and Analysis of the Management
1. Business Operation summary in the reporting period
In 2020, in the face of the adverse impact of the COVID-19 epidemic, the company did its best to preventand control the epidemic and resume work and production, strive to reduce losses and increase profits in the mainwork of polarizer, speed up the construction of Line 7 project, respond to the call of the municipal partycommittee and government, the municipal State-owned Assets Supervision and Administration Commission andShenzhen Investment Control, and reduce rent and fees to support the real economy to overcome difficulties.In 2020, the company achieved operating income of 2.109 billion yuan, 2.28% less than the same period lastyear; The total profit was 51,218,900 yuan, an increase of 437.31% over the same period last year; Net profitattributable to shareholders of the listed company was 36.93338 million yuan, an increase of 87.67% over thesame period last year. Revenues fall modestly from last year , the main reason is to jointly cope with COVID - 19outbreak, actively fulfill the social responsibility, the company and its wholly owned enterprises response to thecall of shenzhen municipal party committee municipal government and the state-owned assets supervision andadministration, breaks its own property (in addition to residential property) of a part of the tenant: 3 months thisyear, the rental income fell during the reporting period; Second, during this reporting period, the subsidiary SAPOPhotoelectri did not carry out trade business, and the income from trade business decreased compared with thesame period last year. the main reason of the net profit year-on-year growth of Attributable to shareholders oflisted companies is benefit from improving of two to four quarter polaroid 2020 market conditions, adjustmenteffect of SAPO Photoelectri orders for products structure is remarkable, capacity has improved, the average grossmargin level has improved, main business of polarizer turned a loss into a profit this year.
Review of the company's key works carried out in 2020 as follows:
(1)main business of polarizer turned a loss into a profit
In 2020 , first, the company will adjust its marketing strategy, optimize its customer and product structure,and successfully complete the introduction and mass production of multiple projects for panel customers such asLGD, Huaxing Optoelectronics, Huike, and Sharp, to further improve anti-risk and profitability; Second, thecompany actively promotes cost reduction and quality improvement, reducing costs and improving productquality through a number of measures such as increasing machine speed, equipment and technologicaltransformation, upgrading the level of automation in the back-end, and broadening procurement channels, while
Summary of 2020 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.also improving product quality; third, increasing talent Recruitment efforts, reforming the salary structure, andstimulating the vitality of employees..Meanwhile, the Company continued to explore R&D innovation and intensify the development ofindependent intellectual property rights. Its research and development were combined with the actual marketconditions to carry out product development and market promotion and import, so as to improve productperformance. In 2020,, we carried out R&D and import of a variety of coating adhesive materials, key technologyprocesses, and new products, totaling 13 items. we applied for 8 patents, including 2 invention patents and 6utility model patents, obtained 4 authorized patents, including 3 invention patents and 1 utility model patent.
(2)The profitability of the textile business rose steadily, property companies responded to the call for rentreduction and exemption.
At the beginning of 2020, due to the impact of the novel coronavirus pneumonia epidemic, my country'stextile and garment industry exports were blocked. The company took the initiative to overcome labor shortagesand other difficulties, and took full advantage of my country's effective epidemic prevention and control and earlyresumption of production to actively seize market share and achieve both growth in operating income and netprofit.In 2020, the company actively responded to the call of the Municipal Party Committee and the MunicipalGovernment, fulfilled its social responsibilities, implemented property rent reduction measures, and reduced orexempted eligible tenants from rent for three months.
(3)Actively promote the construction of the industrialization project of ultra-large-size TV polarizer
At the beginning of 2020, the novel coronavirus pneumonia epidemic had a certain impact on the company’sconstruction of the company’s ultra-large-size TV polarizer industrialization project (hereinafter referred to as"Line 7"). The company actively responded to it. While doing a good job in epidemic prevention, the companyactively cooperated with the government. Departmental communication, one is to promote the full resumption ofwork of the Line 7 project on March 12, 2020, the other is to overcome difficulties and to promote two groups ofJapanese technicians to arrive at the factory, and the third is that the company has formulated a special assessmentplan for the line 7 project to fully mobilize the enthusiasm of project personnel And initiative. Through theimplementation of various measures, the project construction progress will be accelerated to the greatest extent.
As of December 31, 2020, the civil engineering of the Line 7 project has basically been completed, and thepreliminary acceptance of the clean area of the main production workshop has been completed; in terms ofprocess equipment, the main equipment such as the extension machine, the coating machine, and theanti-checking machine has been installed and commissioned In the stage, the overall commissioning will becompleted in late March 2021 and enter trial production.
(4)Effectively organize epidemic prevention and control, production safety, stable and orderly
During the reporting period, the company first strengthened organization and leadership to effectivelyprevent and control the epidemic. A special class for epidemic prevention and control has been set up to refine thedivision of responsibilities, form an efficient epidemic prevention work mechanism with division of responsibility,layer-by-layer transmission, and coordination, and weave a network of epidemic prevention responsibility toensure that various deployment measures are implemented to effectively protect the lives of employees. Thesecond is to increase investment in environmental protection, and production is safety,stable and orderly. Thecompany pays attention to environmental protection and safety, continuously increases safety investment, and atthe same time fully implements the regulations on the main responsibility of production safety for production andbusiness units.
(5)Strengthened safety awareness and earnestly well ensured safety and environmental protection
In 2020, the company’s party committee, under the correct leadership of the municipal SASAC partycommittee and the investment control company’s party committee, will thoroughly study and implement XiJinping’s thoughts on socialism with Chinese characteristics in the new era. General Secretary Xi Jinping willattend the 40th anniversary celebration of the establishment of the Shenzhen Special Economic Zone and inspectGuangdong and Shenzhen. The spirit of the speech and important instructions and the spirit of the Fifth PlenarySession of the 19th Central Committee of the Communist Party of China, resolutely implement the feedback fromthe inspections of the superior party committee, and carry out the party member education "five one" projectactivities and the "one enterprise, one brand" party building innovation activities, and actively give full play to alllevels The role of party organizations and party members in epidemic prevention and control and resumption ofwork and production provides a strong guarantee for the reform, development and stability of enterprises.
2. Material change in principal activities during the reporting period
□ Yes √ No
3. Products accounting for over 10% of revenue or profit from principal activities of the Company
√ Applicable □ Not applicable
In RMB
| Name | Operating income | Operating profit | Gross profit rate(%) | Increase/decrease of operating income in the same period of the previous year(%) | Increase/decrease of operating profit over the same period of previous year (%) | Increase/decrease of gross profit rate over the same period of the previous year (%) |
| Lease and Management of Property | 1,951,751,693.25 | 9,849,335.07 | 10.97% | 36.51% | 108.08% | 6.72% |
| Textile | 85,177,866.03 | 38,683,399.63 | 74.30% | -19.92% | -58.17% | -3.02% |
| Polarizer sheet | 60,503,325.78 | 2,119,203.22 | 19.89% | 31.39% | 164.42% | 4.95% |
4. Seasonal or cyclical operations requiring special attention
□ Yes √ No
5. Significant YoY changes in the operating revenues, operating costs and net profits attributable to thecommon shareholders or their composition
√ Applicable □Not applicable
During the reporting period, the net profit attributable to shareholders of listed companies was RMB37,268,800, an increase of 89.37% over the same period of the previous year. The main reason is that benefitingfrom the continuous improvement of the polarizer market in the second to fourth quarters of 2020, the subsidiarySAPO Optoelectronics has made significant adjustments to the product order structure, increased productioncapacity, and improved average gross profit. The main business has turned losses into profits this year.
6. Suspension in trading or delisting
□ Applicable √ Not applicable
7. Events relating to the financial report
(1) Particulars about the changes in aspect of accounting policy, estimates and calculation method compared withthe financial report of last year
√ Applicable □Not applicable
During the reporting period, the changes in the company's accounting policies and accounting methods aredetailed in "Section 12 Financial Report V. Important Accounting Policies and Accounting Estimates 34. Changesin Important Accounting Policies and Accounting Estimates" of this report.
(2) Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in theperiod
(3) Compare with last year’s financial report; explain changes in consolidation statement’s scope
√ Applicable □Not applicable
As of December 31, 2020, the company has included 8 subsidiaries in the consolidation scope. For details,please refer to "Section 12 Financial Report IX. Equity in Other Entities 1. Equity in Subsidiaries" in this report.The scope of the company's consolidation this year increased by one over the previous year. For details, pleaserefer to "Section 12 Financial Report 8. Changes in Consolidation Scope" of this report.
The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd.March 12, 2021