BOE Technology Group Co., Ltd. Abstract of Annual Report 2016 Stock code: 000725, 200725 Stock name: BOE A, BOE B Announcement No.: 2017-025 BOE TECHNOLOGY GROUP CO., LTD.
ABSTRACT OF ANNUAL REPORT 2016
I Important information
This Abstract is based on the full text of the Annual Report. In order for a full understanding of the operating results, financial condition and future development planning of the Company, investors are kindly reminded to read the full text carefully on the media designated by the China Securities Regulatory Commission (the “CSRC”).
The board of directors (the “Board”), the supervisory board (the “Supervisory Board”), as well as the directors, supervisors and executive officers of BOE Technology Group Co., Ltd. (the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report, and shall be jointly and severally liable for any false representation, misleading statements or material omissions in this Report.
Mr. Wang Dongsheng, head of the Company, Mr. Chen Yanshun, president of the Execution Committee (chief executive officer) of the Company, Ms. Sun Yun, accounting head for this Report, and Ms. Yang Xiaoping, head of the accounting department (head of accounting), hereby guarantee that the Financial Report carried in this Report is factual, accurate and complete.
All directors attended the board meeting for the review of this Report.
The Board has considered and approved the following proposal for profit distribution to common shareholders: a cash dividend of RMB 0.30 (tax inclusive) Yuan per 10 shares will be distributed to all shareholders of the Company. No bonus shares will be granted, nor will any capital reserve be converted into share capital.
This Report has been prepared in compliance with the Chinese “Accounting Standards for Business Enterprises” and other relevant regulations. KPMG Huazhen LLP has issued a standardauditor’s report with unqualified opinion for the Company.
This Annual Report and its abstract have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
II Company profile
1. Stock profile
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|-|-|-|-|-|-|-|
|Stock name|BOE A, BOE B||Stock code|||000725, 200725|
|Stock exchange||Shenzhen Stock Exchange|||||
|Changed stock name (if any)|N/A||||||
|Contact information||Board Secretary|||Securities Representative||
|Name|Liu Hongfeng|||Cui Zhiyong|||
||12 Xihuan Middle Road, BeijingEconomic-Technological DevelopmentArea, P.R.China|||12 Xihuan Middle Road, BeijingEconomic-Technological DevelopmentArea, P.R.China|||
|Office address|||||||
|Fax|010－64366264|||010－64366264|||
|Tel.|010－64318888 ext.|||010－64318888 ext.|||
|E-mail|liuhongfeng@boe.com.cn|||cuizhiyong@boe.com.cn|||

BOE Technology Group Co., Ltd. Abstract of Annual Report 2016 2. Brief introduction to the main business or products in this Reporting Period
(1) Display business group
As a leader in semi-conductor display innovation and development, the Company is trying to strengthen the core technology through transformation in technology, product design and application so as to create more value. It is committed to the development, production and marketing of TFT-LCD, AMOLED, virtual display, etc. Currently, it mainly provides display screens and thin film transistors for mobile phones, tablet PCs, laptops, displayers, TVs, vehicles, wearable devices, industrial control, medical care, as well as tiled and transparent display screens.
(2) Smart business group
Following the main line of “the Internet of Things and artificial intelligence”, the Company is building four business sub-divisions, namely intelligent manufacturing, intelligent display systems, intelligent vehicle display systems, and intelligent energy systems. At present, it mainly provides, for its global partners, the most competitive ODM, OEM and customized intelligent manufacturing services of complete machines, backlight units, etc., as well as specialized Internet of Things solutions for intelligent display and banking, vehicle-mounted units, intelligent energy systems, etc.
(3) Health business group
With “information medicine and big data” as the basic features, the Company is building a health service system covering mobile health services, O2O medical services, regenerative medicine, medicine integration, health service centers and health insurance. 3. Key financial results
(1) Key financial results for the past three years
Indicate by tick mark whether the Company performed any retroactive adjustments to or restatement of its accounting data due to changes of accounting policies or correction of accounting errors.
□ Yes√ No
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|2016|2015|+/-%|2014|
|Operating revenues|68,895,658,963.00|48,623,732,312.00|41.69%|36,816,316,676.00|
|Net profit attributable to shareholders|1,882,571,674.00|1,636,270,488.00|||
||||15.05%|2,562,128,829.00|
|of the Company|||||
|Net profit attributable to shareholders|||||
|of the Company before exceptional|12,534,878.00|613,814,833.00|-97.96%|1,827,866,642.00|
|profit and loss|||||
|Net cash flows from operating|10,073,287,120.00|10,493,385,445.00|||
||||-4.00%|8,095,825,923.00|
|activities|||||
|Basic earnings per share (RMB Yuan|0.054|0.046|||
||||17.39%|0.087|
|/share)|||||
|Diluted earnings per share (RMB|0.054|0.046|||
|Yuan|||17.39%|0.087|
|/share)|||||
|Weighted average return on equity|||||
||2.40%|2.13%|0.27%|4.29%|
|(%)|||||
|Item|December 31, 2016|December 31, 2015|+/-%|December 31, 2014|
|Total assets|205,135,011,042.00|152,592,894,442.00|34.43%|136,240,283,477.00|
|Net assets attributable to shareholders|78,699,988,493.00|77,485,275,564.00|||
||||1.57%|76,155,071,579.00|
|of the Company|||||

BOE Technology Group Co., Ltd. Abstract of Annual Report 2016 (2) Key financial results by quarter
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|1Q|2Q|3Q|4Q|
|Operating revenues|12,297,738,830.00|14,150,571,887.00|19,393,595,018.00|23,053,753,228.00|
|Net profit attributable to|108,325,454.00|-624,797,872.00|657,140,380.00|1,741,903,712.00|
|shareholders of the Company|||||
|Net profit attributable to|-1,356,749,356.00|-952,948,032.00|509,396,071.00|1,812,836,195.00|
|shareholders of the Company|||||
|before exceptional profit and loss|||||
|Net cash flows from operating|2,767,654,463.00|-33,567,508.00|3,814,061,583.00|3,525,138,582.00|
|activities|||||

Indicate by tick mark whether there are any material differences between the financial indicators above or their summations and those which have been disclosed in quarterly or semi-annual reports.
□ Yes√ No
4. Share capital and shareholders
(1) Numbers of common shareholders and preference shareholders with resumed voting rights as well as shareholdings of top ten shareholders
Unit: share
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||1,185,732（including1,140,580 A-share holdersand 45,152 B-share holders）||||||Total number of common|||1,056,889 (including1,014,828 A-share holdersand 42,061 B-share holders）|||||
||Total number of common|||||||||||||||
|||||||||shareholders at the prior||||||||
||shareholders at the|||||||||||||||
|||||||||month-end before the disclosure||||||||
||period-end|||||||||||||||
|||||||||of this Report||||||||
|Top 10 shareholders||||||||||||||||
|||||||Sharehold|||||||Pledged or frozen shares|||
|||||||||||Number of||||||
||Name of shareholder|||Nature of||ing||Total shares held||restricted shares||||||
|||||shareholder||percentag||at the period-end|||||Status||Number|
|||||||||||held||||||
|||||||e (%)||||||||||
|Beijing State-owned CapitalOperation and ManagementCenter|||State-ownedCorporation||11.56%||4,063,333,333||4,063,333,333|||||||
|Chongqing EzcapitalOpto-electronics IndustryInvestment Co., Ltd.|||State-ownedCorporation||8.53%||3,000,000,000||3,000,000,000|||Pledged||955,000,000||
|Hefei Jianxiang InvestmentCo., Ltd.|||State-ownedCorporation||8.13%||2,857,142,857||2,857,142,857|||||||
|Hua AnFund-ICBC-ZhongrongInternationalTrust-Zhongrong-AssembledFunds Trust Plan of RongjingNo. 1|||Other||4.45%||1,564,126,904||0|||||||
|BeijingEconomic-TechnologicalInvestment & DevelopmentCorp.|||State-ownedCorporation||3.53%||1,241,423,641||0|||||||
|China Securities FinanceCorp.|||Other||2.49%||876,936,082|||||||||
|Beijing BOE Investment &Development Co., Ltd.|||State-ownedCorporation||2.34%||822,092,180||0|||||||

BOE Technology Group Co., Ltd. Abstract of Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Hefei Rongke ProjectInvestment Co., Ltd.||State-ownedCorporation|1.92%|675,026,803|0|
|National Social Security FundPortfolio 108||Other|0.80%|279,999,795|0|
|Beijing Electronics HoldingsCo., Ltd.||On behalf ofthegovernment|0.78%|273,735,583|0|
||||1. Beijing State-owned Capital Operation and Management Center held 100%equities of Beijing Electronics Holdings Co., Ltd.2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOEInvestment & Development Co., Ltd. and was its controlling shareholder.3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co.,Ltd. and Chongqing Capital Photoelectricity Investment Co., Ltd., by enteringinto Implementation Protocol of Voting Right respectively, agreed to maintainall of the shares held by them respectively unanimous with Beijing BOEInvestment & Development Co., Ltd. when executing the voting rights of theshareholders.4. After the non-public issuing of the Company in 2014, Beijing State-ownedCapital Operation and Management Center handed over 70% of the sharesdirectly held by it to Beijing Electronics Holdings Co., Ltd. for managementthrough Stock Management Protocol, and Beijing Electronics Holdings Co.,Ltd. gained the incidental shareholders’ rights except for disposing right andusufruct of the shares, of which the rest 30% voting right maintained unanimouswith Beijing Electronics Holdings Co., Ltd. through the agreement according toImplementation Protocol of Voting Right.5. Except for relationship among the above shareholders, the Company is notaware of whether the other top ten shareholders exist associated relationship ornot, or they are persons acting in concert or not.|||
||Related or acting-in-concert parties among|||||
||the shareholders above|||||
||Shareholders conducting securities margin||N/A|||
||trading (if any)|||||

(2) Number of preference shareholders and shareholdings of top ten of them
□ Applicable√ Not applicable
No preference shareholders in this Reporting Period.
(3) Ownership and control relations between the actual controller and the Company
State-owned Assets Supervision& Administration Wang Dongsheng20%, Jiang Yukun10%, Liang Xinqing10%, Zhao Commission of BeijingPeople’s Government Caiyong6.667%, Shi Dong6.667%, Chen Yanshun6.667%, Song Ying6.667%, Han Guojian6.667%, Gong Xiaoqing3.333%, Wang Yanjun3.333%, Wang Jiaheng3.333%, Liu Xiaodong3.333%, Ren Jianchang100%
1.667%, Sun Jiping1.667%, Zhang Peng1.667%, WangAi’zhen1.667%, Mu Chengyuan1.667%, Xu Yan1.667%, Hua Yulun1.667%, Zhong Beijing State-owned Capital Management Huifeng1.667%
Administrative Center
||
|-|
|100%|

Beijing Intelligent Kechuang Technology Development Co., Ltd. Beijing Electronics Holdings Co., Ltd.
66.25% 33.75%
Beijing BOE Investment& Development Co., Ltd.
11.56%
0.78%
2.34%
BOE Technology Group Co., Ltd.
BOE Technology Group Co., Ltd. Abstract of Annual Report 2016 Notes: 1: The Company regards Beijing Intelligent Kechuang Technology Development Co., Ltd. as a platform to implement equity incentive for the whole core technology manager, the aforesaid 20 subscribers are nominal shareholders, each investment proportion is not actual equity proportion, the equities of Beijing Intelligent Kechuang Technology Development Co., Ltd. are held in common by all implemented objectives of simulate plan of equity incentive mechanism.
2: When the Company completed private offering of shares in 2014, Beijing State-owned Capital Operation and Management Center transferred the70% shares directly held to Beijing Electronic Shareholding Co., Ltd. for managing through Shares Management Protocol, and Beijing Electronic Shareholding Co., Ltd. acquired the shareholders rights except for the disposition rights and equity rights attached to the equities; Beijing State-owned Capital Operation and Management Center maintained its voting rights of the rest30% equity directly held by itself in accordance with Beijing Electronic Shareholding Co., Ltd. through the agreement of the Voting Rights Exercising Agreement.
5. Corporate bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of this Report or were due but could not be redeemed in full?
Yes.
(1) Bond profile
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|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Balance|||
||Bond name||Abbr.||Bond code||Due date||||Interest rate|
||||||||||(RMB’0,000 Yuan)|||
|2016 Public offering of the corporationbonds for the qualified investors of BOETechnology Group Co., Ltd. (Phase I)||16BOE01||112358||03/21/2021||1,000,000||3.15%||
||Interest and principal payments during this|On March 21, 2017, the Company completed the 2016 annual interest payout forthe qualified investors of its 2016 corporate bonds.||||||||||
||Reporting Period|||||||||||

(2) Latest follow-up rating results and rating result changes
On 25 Jan. 2016, United Ratings Co., Ltd. (hereinafter referred to as “United Ratings”) issued the Analysis Report of the 2016 Corporate Bonds Credit Rating of BOE Technology Group Co., Ltd., with theissuers’ main body credit rating of AAA and AAA of the credit rating of the current corporate bonds. The main body of the credit rating of the Company was AAA with the rating outlook was stable that reflected the rather strong debt paying ability which would basically not be influenced by the disadvantage economic environment with rather low default risks. The credit rating of the bonds of the Reporting Period was AAA, which reflected the rather high bond credit quality and the rather low credit risks.
On 24 Jun. 2016, United Ratings issued the Tracking Rating Report of the 2016 Corporate Bonds Credit Rating of BOE Technology Group Co., Ltd., with theissuers’ main body credit rating of AAA and AAA of the credit rating of the current corporate bonds. On 25 Jun. 2016, the tracking rating report of the current bonds by the United Rating will be disclosed on www.szse.cn and www.unitedratings.com.cn with the public disclosure date of www.szse.cn not later than that of other trading places, media or other places.
United Ratings is expected to issue the Tracking Rating Report of the 2017 Corporate Bonds of BOE Technology Group Co., Ltd. in June 2017. The Company will disclose Tracking Rating Analysis Report in http://www.cninfo.com.cn/ in time, vast investors, please pay attention to it.
BOE Technology Group Co., Ltd. Abstract of Annual Report 2016 (3) Main financial results of the Company for the recent two years
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|-|-|-|-|
|Item|2016|2015|+/-%|
|Debt-to-assets ratio|55.14%|48.65%|6.49%|
|Total debt-to-EBITDA ratio|13.18%|15.44%|-2.26%|
|Times interest earned|1.93|1.79|7.82%|

 III Performance discussion and analysis
1. Performance review for this Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
2016 marked the first year forChina’s 13th Five-Year Plan for Economic and Social Development. In the year, in light of the faster integration among industries under the“+ Internet” policy, the Company tried to build an “Open and Connected Ecoresystem” and positioned itself as a “supplier of Internet of Things technology, products and services” centering on four core technologies, namely “display, sensor technology, artificial intelligence and big data”.
2015 and the first half of 2016 witnessed a considerable decline in market demand, fierce competition, as well as the reform towards large-sized, HD display products and those carrying new technology, new techniques and new materials. In face of a complex and changeable market, all employees of the Company united as one man and worked hard to try to seize opportunities. As a result, its operating revenues reaches RMB 68.89 billion Yuan, with year-on-year growth of41.69%,with a steady growth in its profit. While strengthening new display and sensor technology such as TFT-LCD and AMOLED, the Company also improved its capability regarding intelligent manufacturing, intelligent energy systems, intelligent vehicle display systems and intelligent display systems. Meanwhile, it made cross-field innovations by combining semi-conductor display, artificial intelligence and sensor technology with medical and life technology. Details about the situations of theCompany’s business divisions are given as follows:
(I) Display business group (DBG)
The ratio of touch-control modules for semiconductor display products, as well as products with high resolution and new applications was improved, which effectively hedged the impact from price drop to revenue. The Company seized market opportunities, swept marketing and sales, raised market share, and kept the market share of main products in subdivided markets in the leading position in the industry. The market share of LCD display screen of smart phones and tablets kept ranking as the world number 1, the market share of display screen of laptops leaped to the 4th place in the world in the fourth quarter, the market share of display screen of displayers ranked in the 2nd place in the world, and the market share of TV display ranked in the 3rd place in the world. The VR/AR (visual reality/augmented reality) products realized mass production, and clients were introduced. Projects of X-ray, gene sequencing, and smart antenna forged ahead steadily. The Company continued to deeply dig technique capability, optimize bottleneck crafts, and arrange lean production scheduling, so as to set a new record for yield rate and capacity. Projects of smart manufacturing and manufacturing engineers were executed as planned, and the personal structure was further optimized. The domestication ratio in materials, equipment, as well as reserve products and parts was continuously improved. The localization supporting plan for suppliers of new production lines was carried forward as scheduled. The Company further perfected quality management and control mechanism, reached the cost control target for poor quality, and won A-class appraisal from clients. The Company established green product analysis center, and became the first semiconductor manufacturer in China to build the GP lab.
(II) Smart business group (SBG)
As for smart manufacturing: The shipment of TV/MNT complete machines marked record high. The shipment of mobile backlight
modules made breakthrough. Cooperation with strategic clients was further firmed. The Hefei smart manufacturing factory was
established and put into use. The construction of Chongqing smart manufacturing factory was started. As for smart energy: The
BOE Technology Group Co., Ltd. Abstract of Annual Report 2016 photovoltaic project made new progress, the semiconductor lighting business kept being improved, and the plant factory explored new business patterns. As for smart vehicle connection: the Company purchased HK VARITRONIX, a vehicle connection business platform, and positively promoted the business integration with VARITRONIX. As for smart panel connection: The Company launched iGallery (a digital art gallery) products and pleased the market. The Company conducted cooperation project of smart banks and wonclients’ recognition. The Company established the platform and center for artificial intelligence and big data, promoted the transformation of innovation technology, and supported the development of four major divisions.
(III) Health business group (HBG)
In 2016, supported by the platform of service from robot doctors, the Company founded six business systems in mobile health, regenerative medical science, integrated medicine, O2O healthy service, health park, and health insurance. The Oasis International Hospital won the JCI authentication and achieved over40% year-on-year increase in revenue and the quantity of new clients. The construction of Hefei BOE hospital was started. The resource expansion in Beijing-Tianjin-Hebei and southwest region was propelled step by step. The pattern design and planning for online health service platform were finished, and the preliminary operation was started. As for mobile health business, the Company integrated mobile health with robot doctors, and promoted new product development. As for the business of regenerative medical science, the Company accomplished the planning of development path and platform, and started the establishment of research center of regenerative medical science. The transformation of health park made breakthrough, and new profit growth factor for business revenue was dug out. As for health insurance business, the Company perfected operation mechanism and business development planning, and accelerated the reviewing process of operation qualification. 2. Significant changes in the main business in this Reporting Period
□ Yes√ No
3. Products contributing over10% of the main business revenue or profit
√ Applicable□ Not applicable
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||||Operating||Gross profit|
||||Gross profit||Operating profit:||
|Product|Operating revenue|Operating profit||revenue: YoY||margin: YoY|
||||margin||YoY +/-%||
|||||+/-%||+/-%|
|Display business group|61,207,032,381.00|1,062,400,561.00|16.96%|40.70%|29.29%|-3.10%|
|Smart business group|12,503,057,007.00|-28,994,796.00|8.53%|42.39%|66.15%|-0.14%|

 4. Seasonal or periodic characteristics in the operating performance that need special attention
□ Yes√ No
5. Significant YoY changes in the operating revenues, operating costs and net profit attributable to the common shareholders or their composition
□ Applicable√ Not applicable
6. Possibility of listing suspension or termination
□ Applicable√ Not applicable
BOE Technology Group Co., Ltd. Abstract of Annual Report 2016 7. Issues related to the financial report
(1) YoY changes in accounting policies, accounting estimations and measurement methods
□ Applicable√ Not applicable
No changes.
(2) Retroactive restatements due to correction of significant accounting errors in this Reporting Period□ Applicable√ Not applicable
No such cases.
(3) YoY changes in the scope of the consolidated financial statements
√ Applicable□ Not applicable
In November 2016, the Company included Hefei BOE Display Technology Co., Ltd. in its consolidation scope because it had realized actual control on Hefei BOE Display by signing an acting-in-concert agreement with the other shareholders of Hefei BOE Display.
In April 2016, the Company included Varitronix International Limited in its consolidation scope because it had acquired a54.70% stake of Varitronix International Limited.
In July 2016, the Company included Beijing BOE Property Development Co., Ltd. in its consolidation scope because it had acquired the100% stake of Varitronix International Limited.
In August 2016, the Company excluded Beijing BOE Changhong Network Technology Co., Ltd. from its consolidation scope because it had sold its51% stake in Beijing BOE Changhong.
In August 2016, the Company excluded controlled subsidiary Beijing BOE Video Technology Co., Ltd. from its consolidation scope because liquidation had been carried out on Beijing BOE Video.
In September 2016, the Company excluded Taiwan-based subsidiary Hometek Electronics Co., Ltd. from its consolidation scope because liquidation had been carried out on Hometek Electronics.
The Company incorporated eight new subsidiaries in the Current Year, namely, Hefei BOE Video Technology Co., Ltd., Chongqing BOE Intelligent Electronic System Co., Ltd., Huaining Orient Duxiu New Energy Co., Ltd., BOE Taiwan Inc., BOE India Private Limited, Beijing BOE Technology Development Co., Ltd., BOE Intelligent Technology Co., Ltd. and Hefei BOE Zhuoyin Technology Co., Ltd.
Board Chairman: Mr. Wang Dongsheng(Signature)
Date of the Approval of this Report by the Board: 21 April, 2017