Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd. Stock code: 200725 Stock abbreviation: BOE B Announcement No.:2014-016 BOE Technology Group Co., Ltd.
Abstract of the 2013 Annual Report
1. Important reminders
This abstract is based on the full text of the annual report. For more details, investors are suggested to read the full text disclosed at the same time with this abstract on the website of Shenzhen Stock Exchange or any other website designated by CSRC.
Company profile:
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|-|-|-|-|-|
|Stock abbreviation|BOE A, BOE B|Stock code||000725, 200725|
|Stock exchange listed with|Shenzhen Stock Exchange||||
|For contact|Company Secretary||Securities Affairs Representative||
|Name|Liu Hongfeng||Xiao Zhaoxiong||
|Tel.|010－64318888 ext.||010－64318888 ext.||
|Fax|010－64366264||010－64366264||
|E-mail|liuhongfeng@boe.com.cn||xiaozhaoxiong@boe.com.cn||

2. Financial highlights and change of shareholders
（1）Financial highlights
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 or decrease||
|Item|2013|2012|of this year over last|2011|
||||year (%)||
|Operating revenue (RMB Yuan)|33,774,285,620.00|25,771,583,386.00|31.05%|12,741,413,562.00|
|Net profit attributable to shareholders|2,353,365,694.00|258,133,391.00|||
||||811.69%|560,866,477.00|
|of the Company (RMB Yuan)|||||
|Net profit attributable to shareholders|||||
|of the Company after extraordinary|1,713,985,503.00|-544,170,638.00|Inapplicable|-3,871,227,843.00|
|gains and losses (RMB Yuan)|||||
|Net cash flows from operating|8,956,439,250.00|3,088,875,525.00|||
||||189.96%|-778,530,727.00|
|activities (RMB Yuan)|||||
|Basic EPS (RMB Yuan/share)|0.174|0.019|815.79%|0.041|
|Diluted EPS (RMB Yuan/share)|0.174|0.019|815.79%|0.041|
|Weighted average ROE (%)|8.70%|1%|7.70%|2.22%|
||||Increase or decrease||
|Item|As at 31 Dec. 2013|As at 31 Dec. 2012|of this year-end than|As at 31 Dec. 2011|
||||last year-end (%)||
|Total assets (RMB Yuan)|92,538,451,492.00|67,105,360,865.00|37.9%|68,769,415,646.00|
|Net assets attributable to shareholders|28,251,815,361.00|25,886,959,650.00|||
||||9.14%|25,585,892,264.00|
|of the Company (RMB Yuan)|||||

Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd.（2） Shareholdings of the top 10 shareholders
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Total number of shareholders at|||||
||411,176 (of which A-share|||||394,601（of which A-share|||
|Total number of shareholders at||||the end of the fifth trading day|||||
||holders: 373,251; B-share|||||holders:357,968；-share|||
|the end of the reporting period||||before the disclosure date of the|||||
||holders: 37,925)|||||holders: 36,633）|||
|||||annual report|||||
|Shareholdings of the top 10 shareholders|||||||||
||||Shareholdin||||Pledged or frozen shares||
|||Nature of||Total number of|Number of restricted||||
|Name of shareholder|||g percentage||||Status of|Number of|
|||shareholder||shares held|shares held||||
||||(%)||||shares|shares|
|Being E-TOWN InternationalInvestment & Development Co., Ltd.||State-ownedCorporation|10.98%|1,484,159,406|0||||
||||||||Pledged|635,000,000|
|Beijing BOE Investment &Development Co., Ltd.||State-ownedCorporation|6.37%|860,981,080|0||||
|Beijing Economic-TechnologicalInvestment & Development Corp.||State-ownedCorporation|6.27%|847,650,000|0||||
||||||||Pledged|423,825,000|
|Hefei Rongke Project Investment Co.,Ltd.||State-ownedCorporation|4.99%|675,026,803|0||||
|Beijing BDA TechnologicalInvestment Development Co., Ltd.||Other|4.44%|600,000,000|0||||
||||||||Pledged|300,000,000|
|Beijing Electronics Holdings Co., Ltd.||On behalf ofthe country|2.04%|275,303,883|0||||
||||||||Frozen|2,000,000|
|Hefei Xincheng State-Owned AssetsManagement Co., Ltd.||State-ownedCorporation|2.03%|274,848,276|0||||
|Hefei Lan Ke Investment Co., Ltd.||State-ownedCorporation|0.9%|122,369,283|0||||
|Sinotrans Air TransportationDevelopment Co., Ltd.||Other|0.83%|111,600,000|0||||
|CMBC—Yinhua Shenzheng 100Index Securities Investment Fund||Other|0.7%|95,087,838|0||||
||||1. Beijing Electronics Holdings Co., Ltd. holds 66.25% shares of Beijing BOE||||||
||||Investment & Development Co., Ltd. and is its controlling shareholder.||||||
||||2. When the Company completed private offering of shares in 2010, Beijing||||||
||||E-TOWN International Investment & Development Co., Ltd. transferred all||||||
||||shares directly held to Beijing BOE Investment & Development Co., Ltd. for||||||
||||management, then BOE Investment acquired the attached rights of the shares||||||
||||attributable to other shareholders in accordance with current effective laws||||||
||||and rules of the Company excluding right of disposition such as transfer,||||||
|Explanation on associated relationship or persons|||donation, mortgage etc. and usufruct (including claim for profit distribution||||||
|acting in concert among the above-mentioned|||and claim for retained assets distribution).||||||
|shareholders|||3. BEIJING ECONOMIC-TECHNOLOGICAL INVESTMENT &||||||
||||DEVELOPMENT CORP. holds 49% shares of BEIJING BDA||||||
||||TECHNOLOGICAL INVESTMENT DEVELOPMENT CO., LTD. Both of||||||
||||them are under the control of the Administration Committee of Beijing||||||
||||Economic and Technological Development Zone, which makes them parties||||||
||||acting in concert.||||||
||||4. Except for relationship among the above shareholders, the Company is not||||||
||||aware of whether the other top ten shareholders exist associated relationship||||||
||||or not, or they are persons acting in concert or not.||||||
|Shareholders taking part in margin financing and|||||||||
||||Naught||||||
|securities lending (if any)|||||||||

（3）Relation between the Company and its actual controller in the form of diagram
Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd. State-owned Assets Supervision& Wang Dongsheng20%, Jiang Yukun10%, Liang Xinqing10%, Administration Commission of Beijing Zhao Caiyong6.667%, Shi Dong6.667%, Chen Yanshun6.667%,People’s Government Song Y ing6.667%, Han Guojian6.667%, Gong Xiaoqing3.333%, Wang Yanjun3.333%, Wang Jiaheng3.333%, Liu Xiaodong3.333%, Ren Jianchang1.667%, Sun Jiping1.667%, Zhang Peng100%
1.667% , WangAi’zhen1.667%, Mu Chengyuan1.667%, Xu Yan Beijing State-owned Capital Management
1.667%, Hua Yulun1.667%, Zhong Huifeng1.667%
Administrative Center
||
|-|
|100%|

||
|-|
|100%|

 Beijing Electronics Holdings Co., Ltd.
Co., Ltd.
66.25%
33.75%
Beijing BOE Investment& Development Co., Ltd.
6.37%
2.04%
BOE Technology Group Co., Ltd.
3. Discussion and analysis by the management
(1) Overview
In face of the complex competition and the severe market environment in 2013, we firmly upheld the “1433 Strategy” (“Adhere to 1 Goal; Accelerate 4 Innovations; Make Good Use of 3 Kinds of Capital; and Realize 3 Transformations”) and successfully doubled the annual earnings, with significant improvement in the total output, the market share, profitability, technological capability, management capability and other comprehensive indicators. For 2013, the Company achieved operating revenues RMB 33.8 billion, up31% from last year; and net profit attributable to shareholders of the Company nearly RMB 2.35 billion, up over811% from last year. In 2013, we expanded the Beijing 8.5G Line by 120K. Both of the Erdos 5.5G AMOLED Line and the Hefei 8.5G Line went into production. Construction of the Chongqing 8.5G Line commenced in July. Small-size alteration and product shift of the Hefei 6G Line and the Beijing 8.5G Line. On the technology and newproducts，9.55” Flexible OLED, 30” Hybrid OLED and some other models were successfully turned on. 98”8K*4K product which the biggest in the world was launched, together with quite a few other new products, which were well-received by the market. In 2013, we also applied for 4,282 new patents and played a leading role in formulating/revising 8 sets of international/domestic technical standards.
Operating performances of specific business divisions:
(1) Display device division
Medium-and large-sized product division: Joining hands with brand-name customers at home and abroad, we developed quite a few globally new products, with a steadily enlarging share in the global market. The proportion of products with high added value gradually rose to74%. The product structure was gradually optimized. We developed 45 new products, including 7 globally new products. The Beijing 8.5G Line 0.5t Glass Alteration Project went on well. The transformation of production lines towards a smaller product size, higher added value and more uniqueness accelerated and their profitability further improved.
Medium-and small-sized panel division: The international market share increased gradually and the operation of
the Strategic Customer Business Department was a success. The product structure was continuously enriched and
optimized. A total of 49 products were in mass production and on sale, of which products with high added value
took up over70% of the sales volume. The mass production capability of the On Cell Touch Project took shape.
The Chengdu 4.5G Line started mass production of wear, vehicle-mounted and medical products. Small-sized
Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd. products accounted for over70% of the output of the Hefei 6G Line, which successfully put 5 cell phone models into mass production. More key materials were procured from domestic makers.
Electronic material, component and vacuum device business divisions: The electronic material and component business division accomplished the 2013 strategic goals set for it, and the vacuum device business division continued to profit. In the vacuum technology business, restructuring accelerated and many high-end products were developed to explore new markets and customers and increase the sales volume.
(2) Intelligent system division
Concerning the display end business, the 65” and 55” intelligent integrative products were developed independently, the 110” UHD product was put into mass production and for sale and the 3 BiTV1.0 products were launched at the end of 2013. About the lighting/photovoltaic business, the independentR&D capability kept increasing and quite a few globally new products were launched. As for the OEM business, the annual sales volume increased57% from last year and the medium- and small-sized business profited.
(3) Health service division
Concerning the professional park business, the service philosophy was updated and notable achievements were made in park brand promotion. Regarding the health medical care business, under the guidance of theGroup’sPS+ Strategy, the top-level architecture design and the business segment design were completed. As for the cloud service business, we proactively initiated and pushed forward projects such as planning of the health medical care cloud platform, the cloud service technology development platform (PaaS) and the cloud computing center. In 2013, our efforts helped us win the following awards granted by various organizations:
“Chinese Enterprise Innovation Award”, “New IT Leading Enterprise of China”, “Influential Information Enterprise of China for 2013”, “2013 Globally Competitive Brands• China Top 10”, “The Most Innovative Enterprise”, “Golden Roundtable Excellent BOD”, “Top 10 Consumer Electronic Brands of China” for 7 year in a row, etc. In addition, the 65” oxide ultra HD display helped win the “2013 CITE Innovative Product& Application Golden Award” and the 110” LCD TV was honored as “Innovative Ultra HD Product ofChina’s Color TV Industry for 2013”.
(2) Asset and liability analysis
1. Major changes of asset items
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||As at 31 Dec. 2013||As at 31 Dec. 2012||||
||||||Proportion||
|||Proportion||Proportion|change|Explain any major change|
||Amount|in total|Amount|in total|（%）||
|||assets (%)||assets (%)|||
||20,464,553,422.00||15,211,851,133.00|||Mainly because of new borrowings|
|Monetary funds||22.11%||22.67%|-0.56%|for new projects and operating cash|
|||||||inflows|
|Accounts|4,855,938,522.00||5,196,041,164.00||||
|||5.25%||7.74%|-2.49%|-|
|receivable|||||||
|Inventories|3,018,804,659.00|3.26%|2,668,906,527.00|3.98%|-0.72%|-|
|Investing real|1,284,415,937.00||1,309,561,041.00||||
|||1.39%||1.95%|-0.56%|-|
|estate|||||||
|Long-term equity|989,848,083.00||971,409,821.00||||
|||1.07%||1.45%|-0.38%|-|
|investment|||||||
|Fixed assets|32,495,665,045.00|35.12%|34,534,107,374.00|51.46%|-16.34%|-|
||22,172,949,652.00||2,294,256,409.00|||Mainly because the consolidation|
|||||||scope expanded and some new|
|Construction in||||||projects were still in the construction|
|||23.96%||3.42%|20.54%||
|progress||||||period, causing more spending on|
|||||||construction and equipment|
|||||||procurement.|
|Other current|||||||
||1,872,804,826.00|2.02%|1,284,972,353.00|1.91%|0.11%|Deductible VAT increased.|
|assets|||||||
|Interest|||||||
||109,045,546.00|0.12%|30,850,933.00|0.05%|0.07%|Monetary funds increased.|
|receivable|||||||

Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|Available-for-sale||||||The Company purchased new shares|
||254,506,569.00|0.28%|116,600,700.00|0.17%|0.11%||
|financial assets||||||in the reporting period.|
|||||||The land use rights acquired for the|
|Intangible assets|2,025,945,856.00|2.19%|1,497,109,054.00|2.23%|-0.04%||
|||||||new projects|
|||||||The Company enhanced|
|||||||management of the working capital|
|Notes receivable|565,423,076.00|0.61%|860,883,384.00|1.28%|-0.67%||
|||||||and some business lines adopted|
|||||||settlement in note less often.|
|||||||Subordinate company was|
|||||||expectedly able to earn good profits|
|||||||in the future and generate a sufficient|
|Deferred income|||||||
||160,480,672.00|0.17%|47,700,956.00|0.07%|0.1%|taxable income to make up for the|
|tax assets|||||||
|||||||loss, so the accumulated loss, etc.|
|||||||were recognized as deferred income|
|||||||tax liabilities.|
|||||||Deductible import VAT and the|
|Other non-current|||||||
||1,214,223,099.00|1.31%|229,388,552.00|0.34%|0.97%|prepayments for engineering|
|assets|||||||
|||||||equipment increased.|

2. Major changes of liability items
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||2013||2012||||
||||||Proportion||
|||Proportion||Proportion|change|Explain any major change|
||Amount|in total|Amount|in total|（%）||
|||assets (%)||assets (%)|||
|Short-term|12,122,769,840.00||727,267,475.00|||New borrowings for new|
|||13.1%||1.08%|12.02%||
|borrowings||||||projects|
|Long-term|20,995,628,956.00||17,373,155,700.00||||
|||22.69%||25.89%|-3.2%|-|
|borrowings|||||||
|||||||Note settlement was adopted in|
|Notes payable|135,654,664.00|0.15%|51,621,956.00|0.08%|0.07%||
|||||||some procurements.|
|Accounts|||||||
|||||||Advances from customers|
|received in|281,618,909.00|0.3%|647,932,719.00|0.97%|-0.67%||
|||||||decreased.|
|advance|||||||
|||||||The consolidation scope|
|Payroll payable|845,898,437.00|0.91%|539,910,148.00|0.8%|0.11%|expanded, R&D was enhanced|
|||||||and labor cost increased.|
|Taxes and fares||||||The enterprise income tax|
||190,205,223.00|0.21%|48,857,070.00|0.07%|0.14%||
|payable||||||increased.|
|Interest payable|314,004,348.00|0.34%|98,478,461.00|0.15%|0.19%|Borrowings increased.|
|||||||Some new projects were still in|
|||||||the construction period,|
|Other payables|6,062,245,439.00|6.55%|3,201,279,824.00|4.77%|1.78%|resulting in an increase in the|
|||||||payables for engineering|
|||||||equipment|
|Non-current|||||||
|liabilities due|308,628,826.00|0.33%|1,544,020,648.00|2.3%|-1.97%|Some borrowings were repaid.|
|within 1 year|||||||
|||||||The operating revenues for|
|Other current||||||2013 increased and the|
||255,465,666.00|0.28%|94,629,652.00|0.14%|0.14%||
|liabilities||||||guarantee money increased|
|||||||accordingly.|
|||||||Convertible debentures|
|Other non-current|||||||
||6,798,328,315.00|7.35%|1,647,293,045.00|2.45%|4.90%|increased and import VAT was|
|liabilities|||||||
|||||||postponed.|

(3) Outlook of the future development of the Company
Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd. I. Industry competition structure and external economic environment
1. Industry competition structure
As the increasingly fierce market competition, on one side the display technique developed rapidly with the refresh rate of new materials, new process and new products quickened day by day; on the other side the competition situation became more and more complicated and the global flat display industry appeared the pattern of “Three Countries and Four Districts Game” as well as the “Complex Fight” such as the intellectual property fight, information fight, talents fight and public opinion fight based on the price fight were intensified, especially after the decelerated growth of the market requirements of the medium-to-large size, all panel manufacturers transferred one after another to the small size market which grew faster that led the market competition of the small size screen more and more fierce.
2. External economic environment
Y2014 faced with the global complex political and economic environment and various uncertain factors with the slow down of the economic increase and weak consumer demand as well as the global financial and economic resonance risks were still there; on the other side, China will face up with a new round of reform bandwagon and the reform of ecological politics economy and culture society that “Five-in-One” will vigorously promote the development of the informatization industry, as well as the time with soft and hard fusion, service integration and service transformation is Comprehensive coming.
II. Expectation to the future development of the Company
The Company, as the provider of optoelectronic display technology, production and solution, we always adhere to the objective of sustainable innovation, transferring ourselves from manufacturer of display accessories to provider of global innovation system products and service, as well as realize sustained and steady profits, so thus to become the world's leading company of the display field. Y2014 is the key year for the execution of the overall strategy “One Four Three Three”. The Company will firmly execute the annual management policy of “Customer-oriented, Lean Management, Innovation and Breakthrough, Profit Multiplication” pull out all stops to carry out the annual career plan operation target and each strategy task. In order to ensure the completion of the 2014 annual operation target of the Company, each business group takes active measures.
1. Business groups of display devices
In terms of business of medium-to-large size products: continue to deepen the transformation of miniaturization, value-addition and characteristic construction, constantly deepen the customer-oriented mechanism, further close to the customer, know of the market, do well in the planning and development of new products, and the new products achieve quantitative sales; in terms of business of medium-to-small size products: enlarge the development power of the brand customers, consolidate and enlarge the status of the first strategic supplier; deeply dig out the emerging market etc, ensure the market share of the new products; accelerate the development of the new products and the rate of volume production and listing, accelerate to realize the mass production of In Cell products, complete the breakthrough of high performance technology and improve the rate of the world premiere products.
2. Intelligent system business group
The Group defines the vision of “Become the Global Leaders in the Filed of Display and Ambient Lighting and Achieve the Respectable Brand”. In terms of business of display terminal: optimize the business process, strengthen the market insight and planning ability through the innovative commercial model of new business projects; go deep into the investigation and survey of the market and customers requirements, improve the market acuity, dig-in the market and rapidly follow up, so thus to design dazzling products that race to control the market opportunities; ensure the new products can be listed as planed and form stable profit resources as soon as possible; in terms of business of Photovoltaic lighting: enhance the proportion of the first published products and realize volume production selling; ensure the innovation projects such as plant factories go on wheels; in terms of business of the contract manufacturing: constantly enlarge the current customer shipment, go on dig out and cultivate the key strategic customers; accelerate the high performance product development and volume production and listing rate by insisting on customer orientation.
3. Health service business group
In terms of business of professional park: do well in the project planning and negotiating such as the health industrial park and synthesis of scientific and technological industry city; improve the service quality, strengthen the ability construction, refine the management; in terms of business unit of health and medical: ensure the starting projects promote smoothly, operate steadily; in terms of the exemplary case of cloud service: accelerate the top-level design and economic and technical feasibility analysis, innovate the commercial model and defines the profit model of data traffic.
Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd. 4. Matters in relation to financial reporting
(1) Explain change of the consolidation scope as compared with the financial reporting of last year
The changes occurred in consolidated scope of this year: gained the subsidiary Hefei Xinsheng by business merger not under the same control.
Hefei Xinsheng is an other limited liability company registered and established in Hefei in Aug. 2009 by Hefei Construction Investment and Holding Co., Ltd., Hefei Xincheng State-owned Assets Management Co., Ltd. (“Hefei Xincheng”) and Hefei BOE. The Company mainly operates the investment, construction,R&D, production and sales of the relevant products of thin-film transistor liquid crystal display and its auxiliary product. On 31 May 2013, the Company increased the capital of RMB 4.1 billion. On 31 May 2013, the Company held50.59% of the equity. According to the changed Articles of Incorporation, the Board of Directors consisted of 5 Directors with 3 of the Company and more than 50 voting power that can execute the control of Hefei Xinsheng during the formulating process of the production and operation policies by the Executive Director, so the Company included Hefei Xinsheng into the consolidate scope on 31 May 2013.