Foshan Electrical and Lighting Co., Ltd. Interim Report 2018 (Summary) Stock Code: 000541, 200541 Stock Name: FSL, FSL-B Announcement No. 2018-027 FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
INTERIM REPORT 2018 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the 2018 Interim Report of Foshan Electrical and Lighting Co., Ltd. (together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). In order for a full understanding of theCompany’s operating results, financial condition and future development plans, investors should carefully read the aforesaid full text, which has been disclosed together with this Summary on the media designated by the China Securities Regulatory Commission (the “CSRC”).
All theCompany’s directors have attended the Board meeting for the review of this Report and its summary. Independentauditor’s modified opinion:
□ Applicable√ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable√ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable√ Not applicable
Part II Key Corporate Information
1. Stock Profile
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|Stock name|FSL, FSL-B|Stock code||000541, 200541|
|Stock exchange for stock listing|Shenzhen Stock Exchange||||
|Contact information|Board Secretary||Securities Representative||
|Name|Lin Yihui||Huang Yufen||
||No. 64, Fenjiang North Road, ChanchengDistrict, Foshan City, Guangdong Province,P.R.China||No. 64, Fenjiang North Road, ChanchengDistrict, Foshan City, Guangdong Province,P.R.China||
|Office address|||||

Foshan Electrical and Lighting Co., Ltd. Interim Report 2018 (Summary)
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|-|-|-|
|Tel.|0757-82810239|0757-82966028|
|E-mail address|fsl-yh@126.com|fslhyf@163.com|

2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes√ No
|||||
|-|-|-|-|
||H1 2018|H1 2017|Change (%)|
|Operating revenue (RMB)|2,064,779,289.99|2,023,925,582.84|2.02%|
|Net profit attributable to the listed|229,277,455.82|228,494,660.57||
||||0.34%|
|company’s shareholders (RMB)||||
|Net profit attributable to the listed||||
|company’s shareholders before exceptional|228,028,236.71|227,184,233.70|0.37%|
|items (RMB)||||
|Net cash generated from/used in operating|144,723,778.38|-31,063,187.22||
||||565.90%|
|activities (RMB)||||
|Basic earnings per share (RMB/share)|0.1638|0.1633|0.31%|
|Diluted earnings per share (RMB/share)|0.1638|0.1633|0.31%|
|Weighted average return on equity (%)|5.32%|4.99%|0.33%|
||30 June 2018|31 December 2017|Change (%)|
|Total assets (RMB)|5,238,861,184.94|5,675,811,824.29|-7.70%|
|Equity attributable to the listed company’s|4,266,885,850.25|4,779,115,459.39||
||||-10.72%|
|shareholders (RMB)||||

3. Shareholders and Their Holdings at Period-End
Unit: share
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||Number of preferred|||
|Number of ordinary shareholders|||93,117|||shareholders with resumed|0||
|||||||voting rights (if any)|||
|Top 10 shareholders|||||||||
|Name of|Nature of|Shareholding||Number of|||Pledged or frozen shares||
||||||Restricted shares||||
|shareholder|shareholder|percentage||shares|||Status|Shares|
|Hong KongWah ShingHoldingCompanyLimited|Foreign legalperson|13.47%||188,496,430|||||
||||||||In pledge|92,363,251|
|ProsperityLamps &ComponentsLimited|Foreign legalperson|10.50%||146,934,857|||||
|ShenzhenRisingInvestmentDevelopmentCo., Ltd.|State-ownedlegal person|5.12%||71,696,136|||||
||||||||In pledge|25,300,000|
|GuangdongElectronicsInformationIndustry GroupLtd.|State-ownedlegal person|4.74%||66,393,501|||||
||||||||In pledge|32,532,815|

Foshan Electrical and Lighting Co., Ltd. Interim Report 2018 (Summary)
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|-|-|-|-|
|Central HuijinAssetManagementCo., Ltd.|State-ownedlegal person|2.42%|33,878,900|
|EssenceInternationalSecurities(Hong Kong)Co., Ltd.|Foreign legalperson|2.09%|29,313,386|
|Hong KongRisingInvestmentDevelopmentCo., Ltd.|Foreign legalperson|1.82%|25,482,252|
|DBS Vickers(Hong Kong)Ltd A/C Clients|Foreign legalperson|1.70%|23,811,009|
|ChinaMerchantsSecurities(Hong Kong)Co., Ltd|Foreign legalperson|0.88%|12,322,811|
|Peng Weiyan|Domesticnatural person|0.86%|12,032,113|
|||Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen||
|||Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group||
|Related or acting-in-concert||||
|||Ltd. and Hong Kong Rising Investment Development Co., Ltd. are acting-in-concert parties.||
|parties among shareholders||||
|||Apart from that, it is unknown whether there is among the top 10 shareholders any other related||
|above||||
|||parties or acting-in-concert parties as defined in the Administrative Measures for the Acquisition||
|||of Listed Companies.||
|||Among the top 10 shareholders, natural person Peng Weiyan holds 0 shares in the Company||
|Shareholders conducting margin||through her common stock accounts and 12,032,113 shares in the Company through her accounts||
|trading (if any)||of collateral securities for margin trading, representing a total holding of 12,032,113 shares in the||
|||Company.||

4. Change of Controlling Shareholder or Actual Controller in Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable√ Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable√ Not applicable
The actual controller remained the same in the Reporting Period.
5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable√ Not applicable
No preferred shareholders in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018 (Summary) 6. Corporate bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were undue before the date of thisReport’s approval or were due but could not be redeemed in full?
No.
Part III Operating Performance Discussion and Analysis
1. Business Overview of Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
The first half of 2018 saw changes inChina’s economy with mounting pressure on foreign trade. Domestically, in spite of a steady economy, growth in investment and consumption demand registered new lows amid deleveraging. Internationally, export growth was under greater pressure caused by the tightening monetary policies of developed economies, decreasing liquidity across the globe and rising trade frictions. In face of these economic changes and the fierce competition industrywide, theCompany’s management continued to focus on the strategic objectives of “Cutting-Edge Technologies, Internationally-Famous Brands and Large-Scale Production” the Board had put forward, strengthening innovation, optimizing the product mix and improving manufacturing and management. As a result, the Company delivered a good operating performance for the Reporting Period. For this period, the Company recorded operating revenue of RMB 2.065 billion, up2.02% compared to the same period of last year, and net profit attributable to the listedcompany’s shareholders of RMB 0.229 billion, representing a year-on-year growth of0.34%.
The work that the Company has done in the first half of 2018 is summarized as follows:
A. Strengthening market expansion for better competitiveness
(a) Domestically, the Company has made new changes to its distribution channels for better competitiveness. In light of changes in the industry, the Company has reformed its distribution channels, helping distributors shift from passivity to initiative, adopting flat management on distribution channels, and strengthening control over channel terminals. Additionally, the Company has adjusted and integrated its distribution channels, and has made clear the priorities for all these channels, so as to increase competitiveness in this respect.
(b) As for export, the Company continued to maintain good and stable cooperation with valued customers. Orders kept increasing as the Company further extended its product range, offered products with high added value and enhanced customer service. In addition, continuous effort was spent on attracting new customers to drive future
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018 (Summary) growth.
B. Enhancing innovation and improving manufacturing
The Company has enhanced innovation in the Reporting Period. A greater focus was given on smart lighting, healthy lighting and smart electrical products. It also focused on product transitions and the development of new products, particularly high-end products. To do so, it brought in high-endR&D talent and reformed the performance appraisal system forR&D personnel so as to further stimulate their creativity.
To reduce marginal costs in procurement, manufacturing, equipment, etc., modularization, standardization and generalization were promoted in product design. Meanwhile, the Company continued to automate its production lines in a deeper and faster manner. It was trying to improve manufacturing through lean management and automation.
C. Optimizing the product mix with smart lighting products being launched to the market one after another During the Reporting Period, the Company reinforced the development of smart lighting products and successfully developed 129 specifications. And it also showed its strength in smart lighting and electrical products to the market at large international and domestic lighting exhibitions and smart showrooms including the Light+ Building exhibition at Frankfurt, Germany and the Guangzhou International Lighting Exhibition. TheCompany’s smart lighting products have started to generate sales revenue in the Reporting Period, and the Company will strengthen the marketing of these products in the second half of the year.
In addition to a greater investment in smart products, the Company also continued to promote the shift of its products from light sources to luminaries through enriching the luminary portfolio with a higher proportion of medium- and high-end luminaries.
D. Reinforcing control over costs and expenses for more economic benefits
The Company got down to details in production management and enhanced control over process indexes. It kept material consumption and product quality indexes well under control with a double-appraisal system. It also enhanced control over costs and expenses, seeking better economic benefits. Additionally, product cost estimates and production analyses were made on a monthly basis and production summaries were given in a timely manner to prevent risks.
2. Matters Related to Financial Reporting
(1) Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared to Last Accounting Period
□ Applicable√ Not applicable
Foshan Electrical and Lighting Co., Ltd. Interim Report 2018 (Summary) No such changes.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in Reporting Period□ Applicable√ Not applicable
No such cases.
(3) Changes to Scope of Consolidated Financial Statements Compared to Last Accounting Period
□ Applicable√ Not applicable
No such changes.
The Board of Directors
Foshan Electrical and Lighting Co., Ltd. 28 August 2018