Abstract of 2015 Financial Statement of ZhonghengHuafa Co., LTD. Stock Code: 000020 200020 Public Notice No.: 2016-21 Short Form of the Stock: SHEN HUAFA-A, SHEN HUAFA- B
Shenzhen Zhongheng Huafa Co., Ltd.
Summary of Annual Report 2015
I. Important Notice
The summary is abstract from full-text of annual report, for more details of operating results, financial condition and future development plan of the Company; investors should found in the full-text of annual report that published on media appointed by CSRC.
Objection statement of directors, supervisors and senior executives
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|Name|Position|Content and reason|

Statement
Prompt of non-standard audit opinion
□ Applicable√ Inapplicable
Profit distribution pre-plan of common stock or capitalizing of common reserves pre-plan deliberated by the Board in the reporting period
□ Applicable√Inapplicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
Profit distribution pre-plan of preferred stock deliberated and approved by the Board in the reporting period
□Applicable□Inapplicable
Company Profile
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|-|-|-|-|-|
||SHEN HUAFA-A, SHENHUAFA- B|||000020 200020|
|Short form of the stock||Stock code|||
|Stock exchange for listing|Shenzhen Stock Exchange||||
|Person/Way to contact|Secretary of the Board||Rep. of security affairs||
|Name|Yang Bin||Niu Yuxiang||
||33/F, DaChong Business Center Building B,No.9678. Shen Nan Road, , NanshanDistrict, Shenzhen. GuangDong. China.||33/F, DaChong Business Center Building B,No.9678. Shen Nan Road, , Nanshan District,Shenzhen. GuangDong. China.||
|Office address|||||
|Fax.|0755-86360206||0755-86360206||
|Tel.|0755-86360220||0755-86360201||
|E-mail|hwafainvestor@126.com.cn||hwafainvestor@126.com.cn||

II. Main business or product introduction in the reporting period
After years of development, the company has gradually formed two main businesses in industry and property management. Among them, the industrial business mainly includes injection molding, foam pieces (light-weight packaging materials), and complete machine production and sales of liquid crystal display, property management business is mainly the lease of its own property.
The company's industrial business mainly provides auxiliary products and services for the home appliance industry. With the acceleration of new urbanization process in China and upgrading and updating of household appliance consumption, the home appliance industry will continue to maintain a relatively fast growth; the
development of home appliances and other downstream industries provides broad markets for the upstream
auxiliary products. By virtue of years of industry resources and technology accumulation, the company conforms
to the market demand and optimizes the product structure and performance, and the company's products and
Abstract of 2015 Financial Statement of ZhonghengHuafa Co., LTD. services have accepted by the downstream manufacturers such as Gree, Haier, TCL, etc. and possess certain competitiveness in the industry. But it also should be noted that the current injection molding, foam pieces and liquid crystal display business are facing fierce market competition and cost pressures, thecompany’s profitability in industrial business is weaker than expectation, the company needs to further enhance the level of research and development, develop new products, expand downstream channels and cultivate its own brand so as to further enhance the profitability in industrial business. The transformation and upgrading of industrial business requires a lot of financial supports.
On the other hand, the transformation and upgrading and profitability of industrial business are weaker than expectation in recent years, under this circumstance, the company has actively developed the property management business, liquidized the remnant assets, and carried out the decoration and investment promotion of its own property Huafa Building, the property management business has made good profits for the company and became an important strategic business of the company. In order to enhance the profitability, the company intends to further strengthen the professionalism of the company's property business, explore diversified property management model, and timely expand the scale of property lease.
III. Main accounting data and financial indexes
1. Main accounting data and financial indexes for recently three years
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not
□Yes√ No
In RMB
||||||
|-|-|-|-|-|
||2015|2014|Changes over last year|2013|
|Operating income|499,455,781.11|694,839,760.10|-28.12%|626,821,044.64|
|Net profit attributable to|-6,731,513.11|7,687,620.27|||
||||-187.56%|-6,517,401.44|
|shareholders of the listed company|||||
|Net profit attributable to|||||
|shareholders of the listed company|||||
||-31,741,774.80|2,322,082.33|-1,466.95%|-5,934,309.10|
|after deducting non-recurring gains|||||
|and losses|||||
|Net cash flow arising from|173,486,015.99|119,492,159.01|||
||||45.19%|-69,353,440.38|
|operating activities|||||
|Basic earnings per share|-0.0238|0.0271|||
||||-187.82%|-0.0230|
|(RMB/Share)|||||
|Diluted earnings per share|-0.0238|0.0271|||
||||-187.82%|-0.0230|
|(RMB/Share)|||||
|Weighted average ROE|-2.27%|2.77%|-5.04%|-2.35%|
||||Changes over end of||
||End of 2015|End of 2014||End of 2013|
||||last year||
|Total assets|1,155,089,236.67|1,162,740,984.93|-0.66%|731,348,499.86|
|Net assets attributable to|311,406,562.20|281,351,269.74|||
||||10.68%|273,663,649.47|
|shareholder of listed company|||||

2. Quarterly main financial index
In RMB
||||||
|-|-|-|-|-|
||First quarter|Second quarter|Third quarter|Fourth quarter|
|Operating income|117,513,081.51|131,221,548.35|140,688,910.96|110,032,240.29|
|Net profit attributable to|511,851.85|13,665,459.18|5,817,241.98|-26,726,066.12|
|shareholders of the listed company|||||
|Net profit attributable to|174,494.55|-8,415,206.76|-16,478,039.21|-7,023,023.38|
|shareholders of the listed company|||||
|after deducting non-recurring gains|||||

Abstract of 2015 Financial Statement of ZhonghengHuafa Co., LTD.
||||||
|-|-|-|-|-|
|and losses|||||
|Net cash flow arising from|-2,165,279.32|19,193,873.05|31,031,444.53|125,425,977.73|
|operating activities|||||

Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial index disclosed in thecompany’s quarterly report and semi-annual report
□Yes√ No
IV. Shares and shareholders
1. Particulars about common stock shareholders, preference shareholders with voting rights recovered and top ten shareholders
In Share
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Total preference|||
|||Total common||||Total preference|||||
|Total commonstock||||||||shareholders with|||
|||stock||||shareholders|||||
|||||||||voting rights|||
|||shareholders at||||with voting|||||
|shareholders in|36,044|||36,061|||0|recovered at end of||0|
|||end of last month||||rights recovered|||||
|reportingperiod-end||||||||last month before|||
|||before annual||||at end of|||||
|||||||||annual report|||
|||report disclosed||||reporting period|||||
|||||||||disclosed|||
|Top ten shareholders|||||||||||
||||||Amount of||||Number of shares||
|Full name of|Nature of||Proportion of||||||||
|||||||Amount of restricted shares held|||pledged/frozen||
|Shareholders|shareholder||shares held||shares held||||||
||||||||||State of share|Amount|
|WUHANZHONGHENGGROUP|Domesticnon-state-owned legalperson||41.14%||116,489,894|116,489,894|||Pledged|116,489,894|
||||||||||Frozen|0|
|SEG (HONGKONG) CO.,LTD.|Overseaslegal person||5.85%||16,569,560|0|||Pledged|0|
||||||||||Frozen|0|
|GOOD HOPECORNERINVESTMENTS LTD|Overseaslegal person||4.91%||13,900,000|0|||Pledged|0|
||||||||||Frozen|0|
|CHANGJIANGsecuritiesBROKERAGE(HONGKONG) Co., Ltd.|Overseaslegal person||1.04%||2,942,449|0|||Pledged|0|
||||||||||Frozen|0|
|Xu Dongdong|Domesticnatureperson||0.60%||1,690,307|0|||Pledged|0|
||||||||||Frozen|0|
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|Overseaslegal person||0.33%||934,974|0|||Pledged|0|
||||||||||Frozen|0|
|BINGHUA LIU|Overseasnatureperson||0.30%||839,013|0|||Pledged|0|
||||||||||Frozen|0|
|Wang Jianxin|Domesticnatureperson||0.23%||660,000|0|||Pledged|0|
||||||||||Frozen|0|
|SHENWANHONGYUANGSECUNITIES(HONGKONG)CO., LTD.|Overseaslegal person||0.22%||633,888|0|||Pledged|0|
||||||||||Frozen|0|

Abstract of 2015 Financial Statement of ZhonghengHuafa Co., LTD.
||||||||
|-|-|-|-|-|-|-|
|Zhu Ming|Domesticnatureperson|0.22%|611,348|0|Pledged|0|
||||||Frozen|0|
|||Among the top ten shareholders, Wuhan Zhongheng Group neither bears associated relationship|||||
|||with other shareholders, nor belongs to the consistent actor that are prescribed in Measures for the|||||
|Explanation on associated|||||||
|||Administration of Disclosure of Shareholder Equity Changes of Listed Companies. The Company|||||
|relationship among the|||||||
|||neither knew whether there exists associated relationship among the other tradable shareholders, nor|||||
|aforesaid shareholders|||||||
|||they belong to consistent actors that are prescribed in Measures for the Administration of Disclosure|||||
|||of Shareholder Equity Changes of Listed Companies.|||||
|Explanation on involving|||||||
|margin business (if||N/A|||||
|applicable)|||||||

2. Total preferred stock shareholders of the Company and shares held by top ten shareholders with preferred stock held
□ Applicable√ Inapplicable
The Company had no shareholders with preferred stock held in the reporting.
3. Property right and controlling relationships between the actual controllers of the Company and the Company is as follows:
Li Zhongqiu
99%
Wuhan Zhongheng New Science& Technology Industrial Group Co., Ltd
41.14%
Shenzhen Zhongheng Huafa Co., Ltd.
V. Discussion and analysis by the Management Team
1. Introduction of operation in the reporting period
In 2015, the company has achieved operating income of 499,455,800 yuan, a decrease of28.12% compared with the same period of last year; operating profits of 33,960,300 yuan, an increase of615.48% compared with the same period of last year, net profits of 33,529,200 yuan, an increase of336.14% compared with the same period of last year.
2. Whether the main business had major change in the reporting period
□ Yes√ No
3. About the industries, products, or regions accounting for over10% of thecompany’s operating income or operating profit
√Applicable□Inapplicable
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease|Increase/decrease|Increase/decrease|
||Operating||||||
|Name||Operating profit|Gross profit ratio|of operating|of operating|of gross profit|
||revenue||||||
|||||revenue y-o-y|profit y-o-y|ratio y-o-y|
|Display|186,838,010.48|175,126,608.78|6.27%|-29.26%|-29.04%|-0.30%|
|Plastic injection|||||||
||192,872,402.89|177,046,690.61|8.21%|-30.01%|-29.35%|-0.86%|
|hardware|||||||
|Foam|61,245,929.61|55,230,894.39|9.82%|-18.64%|-17.65%|-1.08%|

4. Whether the characteristics of management seasonal or cyclical need special attention
□ Yes√ No
5. In the reporting period, note of major changes in operating income, operating cost, total net profit
Abstract of 2015 Financial Statement of ZhonghengHuafa Co., LTD. attributable to common stock shareholders of listed company or composing the previous reporting period√ Applicable□Inapplicable
Compared with the previous period, the investment income in the current period became an important part of the total net profit attributable to common shareholders of listed companies. Themain investment income is shown as follows:
(1) Explanation on the Financing Income from T2 Class Trust Product for "CITICQianjing - Collective Trust Plan for Green Star City Investment Fund"
CITICQianjing - Collective Trust Plan for Green Star City Investment Fund (hereinafter referred to as "CITICQianjingTrust Plan") was founded on August 15, 2011, with a term of three (3) years. Once the trust term expires, if all or part of the trusted property has not been converted into capital, the beneficiary shall entrust, by carte blanche, the trustee to carry out disposal and realization of the trusted property, and the trust term may prolong for not more than one (1) year.
According to the contract agreement of T2 Class Trust Plan, the trustee,CITICTrust LLC.will carry out investment in specific projects as agreed on in the "Trust Order Letter"issued by the trusterZhonghengHuafa Co., LTD. and ZhonghengHuafa Co., LTD.will assume full responsibility and risks. The expected annual return of the T2 Class Trust Unit is12%.If the trust plan appears risks in the operational process and cannot achieve the expected goal, such investment risks shall be undertaken by ZhonghengHuafa Co., LTD.
The dates for distributing trust income of the T2 ClassTrust Unitabove are March 20, June 20, September 20and December 20;In addition, the T2 Class trusted property does not undertake the remuneration of fund managers, but trust remuneration, which is calculated based on the following formula:0.5% of the principal of corresponding trust fund every time* Quantity of existence days of the current settlement period for trust unit/ 360.The dates forpaying fixed compensation are the same as those for distributing trust income.
ZhonghengHuafa Co., LTD. paid the subscription fund of RMB 50 million Yuan to CITICTrust LLC. on December 26, 2014, and recovered the principal of RMB 50 million Yuanon September 8, 2015, and received a total of RMB42,833,333.35 Yuan, respectively on March 20, 2015, September 7, 2015 and September 8, 2015 respectively, which was recognized as financing income. (2) Explanation onFinancing Income from Shenzhen Vanke Financial ConsultingCo., LTD.
ZhonghengHuafa Co., LTD. paid RMB 50 million Yuan to Shenzhen Vanke Financial ConsultingCo., LTD. (hereinafter referred as to "Vanke Consulting Company") on September 8, 2015, and recovered it on December 31, 2015, and also recognized RMB 19.2 million Yuan, received from Vanke Consulting Company on December 31, 2015, as financing income.
ZhonghengHuafa Co., LTD. and Shenzhen Vanke Financial ConsultingCo., LTD. did not conclude a business contracthereto.。
6. Particular about suspended and delisting
□ Applicable√Inapplicable
VI. Relevant items involving financial report
1. Particulars about the changes in aspect of accounting policy, estimates and calculation method compared with the financial report of last year
□ Applicable√Inapplicable
No particulars about the changes in aspect of accounting policy, estimates or calculation method in Period.
2. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable√Inapplicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
3. Compare with lastyear’s financial report; explain changes in consolidationstatement’s scope
√Applicable□Inapplicable
Abstract of 2015 Financial Statement of ZhonghengHuafa Co., LTD. Compared with last year, the Company sold Yutian Henghua Company.
4. Explanation on “Qualified Opinion” from the Certified Public Accountants in the report period by the Board of Directors and Supervisory Committee
√ Applicable□Inapplicable
1、Opinions ofthe Board of Directors
On the basis of relevant information, based on the principle of strictness and cautiousness,ShineWing Certified Public Accountants (Special Ordinary Partnership)issued the report indicating inability to express audit opinion. The Board of Directors expressed the understanding hereto.The Report conforms to theAuditing Standards ofCertified Public Accountants of the People's Republic of China and other relevant laws and regulations, and cautiously reflects the Company's financial situation.The Board of Directors will take effective measures to eliminate the influence of the abovementioned uncertainty on the Company as soon as possible.
2、Opinions of the Board of Supervisors
The report indicating inability to express audit opinion, issued by ShineWing Certified Public Accountants (Special Ordinary Partnership), fully reveals the Company's financial risks.We recognize the matters for which the Audit Reportis unable to express opinions, and at the same time also agree on the special explanation made by the Board of Directors of the Company relating to these. We hope the Board of Directors and management to take effective measures as soon as possible, to eliminate and improve the content mentioned in thepassages for those matters unable to express opinions and to safeguard the interests of the vast investorsin a timely manner.
3、Opinions of the Independent Directors
The explanation made by the Board of Directors of the Company on the matters related to the audit opinions is objective and true, and in accordance with the Company's actual situation.Independent directorsagree with the special explanation made by the Board of Directors of the Company on the matters related to the audit report indicating inability to express audit opinion issued by
ShineWing Certified Public Accountants (Special Ordinary Partnership); Independent directors hope the Board of Directors and management toeliminate and improve the matters unable to express opinionsin an active, effective and steady manner according to the relevant solutionset by the Board of Directorsand management, timelyperform the information disclosure according to clearing situation, and take necessary measures to make the Company maintain sustainable, stable and healthy development, and safeguard the interests of the company and the vast investors.