Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary) Stock Code: 000726, 200726 Stock Name: LTTC, LTTC-B Announcement No. 2019-030 LU THAI TEXTILE CO., LTD.
FIRST QUARTER REPORT 2019 (SUMMARY)
Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary) Part I Important Notes
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of Lu Thai Textile Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein.
All theCompany’s directors have attended the Board meeting for the review of this Report and its summary.
Liu Zibin, theCompany’s legal representative, Zhang Hongmei, theCompany’s Chief Accountant, and Zhang Keming, theCompany’s Financial Manager hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete.
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary) Part II Key Corporate Information
I Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes√ No
|||||
|-|-|-|-|
||Q1 2019|Q1 2018|Change (%)|
|Operating revenue (RMB)|1,545,153,566.09|1,519,803,691.24|1.67%|
|Net profit attributable to the listed company’s shareholders|195,173,391.82|159,278,371.57||
||||22.54%|
|(RMB)||||
|Net profit attributable to the listed company’s shareholders||||
||175,390,785.73|138,044,830.06|27.05%|
|before exceptional items (RMB)||||
|Net cash generated from/used in operating activities (RMB)|-89,714,180.16|84,118,827.13|-206.65%|
|Basic earnings per share (RMB/share)|0.23|0.17|35.29%|
|Diluted earnings per share (RMB/share)|0.23|0.17|35.29%|
|Weighted average return on equity (%)|2.69%|2.18%|0.51%|
||31 March 2019|31 December 2018|Change (%)|
|Total assets (RMB)|10,858,794,197.15|10,537,759,811.84|3.05%|
|Equity attributable to the listed company’s shareholders||||
||7,324,049,365.93|7,146,548,467.86|2.48%|
|(RMB)||||

Exceptional gains and losses:
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Q1 2019|Note|
|Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs)|-12,249.61||
|Government subsidies charged to current profit or loss (exclusive of government subsidies|||
|given in the Company’s ordinary course of business at fixed quotas or amounts as per the|20,199,549.00||
|government’s uniform standards)|||
|Gain or loss on fair-value changes in trading financial assets and liabilities, as well as|||
|derivative financial assets and liabilities & income from disposal of trading financial assets and|||
|liabilities, derivative financial assets and liabilities, as well as investments in other debt|5,061,486.85||
|obligations (exclusive of effective portion of hedges that arise in the Company’s ordinary|||
|course of business)|||
|Non-operating income and expense other than the above|213,423.07||
|Less: Income tax effects|3,285,535.34||
|Non-controlling interests effects (net of tax)|2,394,067.88||

Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary)
||||
|-|-|-|
|Total|19,782,606.09|--|

 Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory 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 Shareholders at 31 March 2019 1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Number of ordinary shareholders at|||Number of preferred shareholders with resumed voting rights at|||||||
||55,250|||||||0||
|the period-end|||the period-end (if any)|||||||
|Top 10 shareholders||||||||||
|||||Shareholdi|||Shares in pledge or|||
|||Nature of|||Total shares|Restricted||||
|Name of shareholder||||ng|||frozen|||
|||shareholder|||held|shares held||||
|||||percentage|||Status||Shares|
|Zibo Lucheng Textile Investment Co., Ltd.||Domesticnon-state-ownedlegal person||15.21%|140,353,583|||||
|Tailun (Thailand) Textile Co., Ltd.||Foreign legalperson||12.82%|118,232,400|118,232,400||||
|Hong Kong Securities Clearing Co. Ltd||Foreign legalperson||3.23%|29,821,256|||||
|Central Huijin Assets Management Co., Ltd.||State-owned legalperson||2.20%|20,315,300|||||
|T.ROWE PRICE INTL DISCOVERY FUND||Foreign legalperson||2.16%|19,948,219|||||
|China Securities Finance Corporation Limited||Other||1.98%|18,313,391|||||
|Hong Kong Monetary Authority||Foreign legalperson||1.77%|16,365,164|||||
|National Social Security Fund Portfolio 103||Other||1.08%|9,999,947|||||
|RBC EMERGING MARKETS SMALL CAPEQUITY FUND||Foreign legalperson||0.65%|6,033,062|||||
|First State Investments Management (UK)Co., Ltd.||Foreign legalperson||0.59%|5,444,048|||||
|Top 10 unrestricted shareholders||||||||||

Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary)
|||||
|-|-|-|-|
|||Shares by type||
|Name of shareholder|Unrestricted shares held|||
|||Type|Shares|
|Zibo Lucheng Textile Investment Co., Ltd.|140,353,583|RMB-denominate||
||||140,353,583|
|||d ordinary stock||
|Hong Kong Securities Clearing Co. Ltd|29,821,256|RMB-denominate||
||||29,821,256|
|||d ordinary stock||
|Central Huijin Assets Management Co., Ltd.|20,315,300|RMB-denominate||
||||20,315,300|
|||d ordinary stock||
|T.ROWE PRICE INTL DISCOVERY FUND|19,948,219|Domestically||
|||listed foreign|19,948,219|
|||stock||
|China Securities Finance Corporation Limited|18,313,391|RMB-denominate||
||||18,313,391|
|||d ordinary stock||
|Hong Kong Monetary Authority|16,365,164|RMB-denominate||
||||16,365,164|
|||d ordinary stock||
|National Social Security Fund Portfolio 103|9,999,947|RMB-denominate||
||||9,999,947|
|||d ordinary stock||
|RBC EMERGING MARKETS SMALL CAP EQUITY FUND|6,033,062|Domestically||
|||listed foreign|6,033,062|
|||stock||
|First State Investments Management (UK) Co., Ltd.|5,444,048|RMB-denominate||
||||5,444,048|
|||d ordinary stock||
|FORENINGEN AP INVEST F.M.B.A.|5,398,839|Domestically||
|||listed foreign|5,398,839|
|||stock||
||Zibo Lucheng Textile Investment Co., Ltd. is the largest|||
||shareholder of the Company and the actual controller. Tailun|||
||(Thailand) Textile Co., Ltd. is the second largest shareholder as|||
|Related or acting-in-concert parties among the shareholders|well as sponsor of foreign capital of the Company. All of other|||
|above|shareholders are people holding public A share or public B share|||
||and the Company is not able to confirm whether there is|||
||associated relationship or concerted action among other|||
||shareholders.|||
|Top 10 ordinary shareholders involved in securities margin||||
||Naught|||
|trading (if any)||||

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yea√ No
No such cases in the Reporting Period.
Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary) 2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable√ Not applicable
Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary) Part III Significant Events
I Changes in Key Financial Statement Line Items and Explanation of why
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|31 March 2019|31 December 2018|Change|Reason for change|
|Prepayments|278,788,371.55|149,582,616.21|86.38%|Increase in prepayments for raw materials|
|Otherreceivables|33,769,400.99|63,012,001.10|-46.41%|Decrease in receivable export tax rebatesand recovery of some advances foragricultural means of production duringQ1 2019 by Xinjiang Luthai FengshouCotton Industry Co., Ltd.|
|Current portionof non-currentassets|50,261,580.38|-|100.00%|Purchase of wealth management productsof AVIC TRUST by the Company as theparent during Q1 2019|
|Othernon-currentassets|68,330,830.51|43,100,215.87|58.54%|Increase in prepayment for land lease byLu Thai (Vietnam) Textile Co., Ltd.|
|Payroll payable|200,183,479.23|325,998,210.17|-38.59%|Payment of 2018 year-end bonus|
|Taxes payable|21,864,508.35|43,556,823.75|-49.80%|Payment of enterprise income tax by theCompany as the parent during the Q12019|
|Item|Q1 2019|Q1 2018|Change|Reason for change|
|Selling expense|39,973,056.09|30,483,720.76|31.13%|Increase in sales service charges|
|Other income|20,199,549.00|13,538,655.19|49.20%|Increase in operating governmentsubsidies received in Q1 2019|
|Investmentincome|-93,250.75|2,439,952.13|-103.82%|Increase in losses on investment inderivative financial instruments|
|Gain on changesin fair value|5,108,600.00|7,895,000.00|-35.29%|Decrease in gains on changes in fair valueor fails-to-delivery forward foreignexchange settlement and options at theperiod-end|
|Asset disposalincome|-4,492.87|-300,994.82|98.51%|Decrease in losses on fixed asset disposal|

Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary) Income tax
37,131,437.89 27,669,680.25 34.20% Increase in Profit before tax
expense
II Progress, Influence and Solutions with regard to Significant Events
□ Applicable√ Not applicable
Progress of any share repurchase:
√ Applicable□ Not applicable
The Company held the 2nd Extraordinary General Meeting of 2018 on 23 March 2018, on which, the Proposal on Repurchase of Some B-Shares of the Company was reviewed and approved. For details, please refer to the announcement (announcement No.: 2018-013) disclosed on www.cninfo.com.cn on 24 March 2018. The Company disclosed the Report on Repurchase of Some B-Shares of the Company on 16 May 2018 and particulars about the first share repurchase in the Announcement on Implementation of Repurchase of B-Shares of Lu Thai Textile Co., Ltd. published on 29 May 2018. As of 22 March 2019, the repurchase term has expired and the accumulative B-shares repurchased were 64,480,770 which have been cancelled completely at CSDCC Shenzhen on 4 April 2019. The total share capital of the Company now is decreased to 858,121,541. For details, please refer to the two announcements (announcement No.: 2019-013, announcement No.: 2019-023) respectively disclosed on 23 March 2019 and 9 April 2019.
Progress of any reduction of the repurchased shares through centralized bidding:
□ Applicable√ Not applicable
III Commitments that theCompany’s Actual Controller, Shareholders, Related Parties, Acquirers, the Company Itself or Other Parties, Failed to Fulfill on Time during the Reporting Period
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IV Operating Performance Forecast for H1 2019
Warning of a forecast loss on or a forecast significant year-on-year change in the net profit of H1 2019, as well as explanation of why:
□ Applicable√ Not applicable
V Securities Investments
□ Applicable√ Not applicable
No such cases in the Reporting Period.
VI Investments in Derivative Financial Instruments
√ Applicable□ Not applicable
Unit: RMB'0,000
Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary)
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Proportion||
||Rela|Rela||||||||||||
||||||||||||Endin|of closing||
||tions|ted-||||||||Impairm|||Actual|
|||||||||Purchased|||g|investment||
||hip|part|Type of|Initial|||Beginning||Sold in the|ent|||gain/loss|
|Operat|||||Starting|Ending||in the|||invest|amount in||
||with|y|derivativ|investment|||investment||Reporting|provisio|||in the|
|or|||||date|date||Reporting|||ment|the||
||the|trans|e|amount|||amount||Period|n (if|||Reportin|
|||||||||Period|||amoun|Company’||
||Com|actio||||||||any)|||g Period|
||||||||||||t|s ending||
||pany|n||||||||||||
|||||||||||||net assets||
||||Forward|||||||||||
|Comm|Non-||exchang|||||||||||
||||||19 June|7 March||||||||
|ercial|relat|No|e|25,089.2|||6,512.05|18,577.15|25,089.2||0|0.00%|-196.97|
||||||2018|2019||||||||
|bank|ed||settleme|||||||||||
||||nt|||||||||||
|Comm|Non-||Foreign|||||||||||
||||||23 March|28 March||||||||
|ercial|relat|No|exchang|3,922.86|||1,909.89|2,012.97|3,922.86||0|0.00%|-140.28|
||||||2018|2019||||||||
|bank|ed||e option|||||||||||
||||Forward|||||||||||
|Comm|Non-||exchang|||||||||||
||||||8 March|30 April||||||||
|ercial|relat|No|e|2,637.88|||1,610.11|1,027.77|2,028.78||609.1|0.08%|53.27|
||||||2018|2019||||||||
|bank|ed||transacti|||||||||||
||||ons|||||||||||
|Total||||31,649.94|--|--|10,032.05|21,617.89|31,040.84||609.1|0.08%|-283.98|
|Capital source for derivative||||||||||||||
|||||The Company’s own money||||||||||
|investment||||||||||||||
|Lawsuit (if applicable)||||Naught||||||||||
|Disclosure date of board of||||||||||||||
|directors announcement on||||||||||||||
|||||27 April 2018||||||||||
|approval of derivative||||||||||||||
|investment (if any)||||||||||||||
|Disclosure date of general||||||||||||||
|meeting of shareholders||||||||||||||
|announcement on approval||||||||||||||
|of derivative investment (if||||||||||||||
|any)||||||||||||||
|Analysis on risks and||||The Company conducted derivatives products transaction in order for hedging. And the forward settlement||||||||||
|control measures of||||hedging was operated by installments, with the relevant amount not more than the planned derivatives||||||||||
|derivative products held in||||products transactions. And all derivatives products transaction was zero-deposit. Meanwhile, the Company||||||||||
|the Reporting Period||||had a complete risk control system for sufficient analysis and prevention of possible risks such as market||||||||||
|(including but not limited to||||risk, liquidity risk and credit risk, operation risk and risk of laws and regulation.||||||||||
|market risk, liquidity risk,||||1. Market risk: when the international and domestic economic situations change, the corresponding changes||||||||||
|credit risk, operation risk,||||in exchange rates and interest rates may have an adverse impact on the financial derivatives transactions of||||||||||
|law risk, etc.)||||the Company. Precautionary measures to be taken include: the Company chooses risk-controlled financial||||||||||

Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary)
|||
|-|-|
||derivative tools with simple structure and good liquidity to carry out the hedging business, strictly controls|
||the scale of financial derivatives trading by staged operations, and adjusts the strategy according to market|
||changes in a timely manner.|
||2. Liquidity risk and credit risk: a credit risk arising from failure of the contractually due Company or|
||counterparty in performing the contract due to liquidity or factors other than liquidity. Precautionary|
||measures to be taken include: the Company determines the upper limit of derivatives transaction amounts|
||according to production and operation scale as well as foreign exchange income, and conducts operations by|
||stage according to the budget of future collections and disbursement. The derivative trades are free of|
||guarantee deposit and can still be guaranteed in performance after the contract expires by means of extension|
||and balance settlement etc. to prevent the Company from credit damages due to lack of liquidity. The|
||Company selects financial institutions with strong capability and good reputation as a counterparty and signs|
||standard derivative trading contracts to strictly control credit risk of the counterparty.|
||3. Operation risk:|
||The derivatives had high specialty and complexity, so imperfect internal operation procedures, staffs and|
||external events would make the Company to undertake risks during the transaction. Risk control measures:|
||The Company promulgated strict authorization and approval system and perfect regulatory mechanism, fixed|
||the operation procedures and approval procedures system to conduct derivative products transaction,|
||implemented strict authorization and post checks and balances system, meanwhile, it improved the overall|
||quality of relevant personnel through strengthening the professional ethics education and business training|
||for them. Besides, it established the System of Reporting the Abnormal Situation Timely so as to ensure to|
||lower the operation risks to the maximum.|
||4. Risk of laws and regulation:|
||The Company conducted derivatives products transaction in strict accordance with relevant laws and rules. If|
||there were no standard operation procedures and strict approval procedures, it was easy to cause compliant|
||and regulatory risks existing in the validity and feasibility of contract, commitments and other legal|
||documents signed. Risk control measures: The Company carefully studied and mastered laws, regulations|
||and policies relevant to derivative products transaction, formulated internal control rules for the forward|
||settlement hedging business, standardized the operation procedures. And strengthened the compliant|
||examination on derivative products transaction business. The Company conducted derivative transaction|
||business according to the relevant approval procedure, which was in line with relevant laws, regulations, the|
||Company’s Articles of Association, the Management Rules for Derivative Transaction of Lu Thai Textile|
||Co., Ltd. and the Proposal on the Plan of Lu Thai Textile Co., Ltd. for Derivative Transactions approved at|
||the 17th Meeting of the 8th Board of Directors on 25 April 2018, and performed relevant information|
||disclosure responsibilities.|
|Changes of market prices or|1. As of 31 March 2019, the Company held one undue financial derivatives contracts, totaling USD0.908|
|fair values in the Reporting|million, which was the forward exchange transaction; The contract expires by April 2019 at the latest.|
|Period of the invested|Financial derivatives accounted for 0.08% of net assets at the end of the period.|
|derivatives. And the analysis|2. In January - March 2019, the amount of maturing financial derivatives of the Company amounted to USD|
|on the fair value of the|46,462,800 which was executed as per the contract in full, which generated a loss of RMB2,839,800. The|
|derivatives should include|amount of maturing settlements of exchange in the long term amounted to USD37.5 million which generated|
|the specific use methods and|a loss of RMB1,969,700; the amount of maturing foreign exchange options was USD6 million which|
|the relevant assumptions|generated a loss of RMB1,402,800. The amount of maturing exchange transaction amounted to|
|and parameters.|USD2,962,800 which generated an income of RMB532,700.|

Lu Thai Textile Co., Ltd. First Quarter Report 2019 (Summary)
|||
|-|-|
|Whether significant changes||
|occurred to the Company’s||
|accounting policy and||
|specific accounting||
||No significant changes|
|principles of derivatives in||
|the Reporting Period||
|compared to the previous||
|Reporting Period||
||The Company’s independent directors Zhou Zhiji, Zhao Yao, Bi Xiuli, Pan Ailing and Wang Xinyu,|
||concerning conducting derivatives business, have issued the following professional advice: We are of the|
|Specific opinion from|opinion that it will strengthen the Company’s competitiveness to use derivative transactions with focus on|
|independent directors on the|forward settlement and purchase as an effective tool to avoid foreign exchange risks, to strengthen the|
|Company’s derivatives|relevant internal control and to carry out the loss and risk prevention measures so as to improve the operation|
|investment and risk control|and management. In conducting derivative transactions with focus on forward settlement and purchase, the|
||Company follows a legal approval procedure, has sound relevant institutions and keeps the risks relatively|
||controllable. No harm has been done to the interests of the Company’s shareholders.|

VII Communications with the Investment Community such as Researches, Inquiries and Interviews during the Reporting Period
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|||Type of communication|Index to main information|
|Date|Way of communication|||
|||party|communicated|
|29 March 2019|By phone|Individual|Basic information of the Company|

 VIII Irregularities in the Provision of Guarantees
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IX Occupation of theCompany’s Capital by the Controlling Shareholder or Its Related Parties for Non-Operating Purposes
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Signature of the Chairman of the Board: Liu Zibin
Lu Thai Textile Co., Ltd.
30 April 2019