Stock Code: 000026 200026 Short Form of Stock: FIYTA A, FIYTA B Announcement No: 2018-003 FIYTA HOLDINGS LTD.
2017 AnnualReport，Summary
1. Important Notice
This summary of the Annual Report is quoted out of the full text of the Annual Report. Investors desirous to understand entirely the Company's operation results, finanical position and future development planning are advised to carefully read the full text of the Annual Report which is publised in the medium designated by CSRC.
The Board of Directors, the Supervisory Committee, directors, supervisors and senior executives hereby individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are neither material omissions nor errors which would render any statement misleading.
Huang Yongfeng, the Company leader, Chen Zhuo, chief financial officer, and Tian Hui, the manager of the accounting department (treasurer) hereby confirm the authenticity and completeness of the financial report enclosed in this Annual Report.
With the exception of the following directors, all the other directors personally attended the Board Meeting for reviewing the Annual Report.
|||||
|-|-|-|-|
||Posts of the directors|Cause of failure in||
|Names of the directors failed in||||
||failed in attending the|attending the meeting|Names of the attorneys|
|attending the meeting personally||||
||meeting personally|personally||
|Wang Mingchuan|Director|Business trip|Chen Libin|
|Xiao Zhanglin|Director|Business trip|Wang Bo|

Indication of qualified audit opinion.
Inapplicable
The profit distribution preplan or the preplan for conversion of reserve into capital for the reporting period reviewed by the Board of Directors.
The profit distribution preplan reviewed and approved by the said board meeting is: with theCompany’s total share capital being 438,744,881 shares as the base, the Company would distribute cash dividend at the rate of CNY 2.00 for every 10
shares (with tax inclusive) and bonus share at the rate of 0 share (with tax inclusive) to the whole shareholders and no
reserves would be converted into share capital.
FIYTA HOLDINGS LTD. 2017 Annual Report, Summary Profit Distribution Preplan for Preferred Shares during the Reporting Period Approved by the Resolution of the Board of Directors
Inapplicable
II. Basic Information of the Company
1. Profile
||||||
|-|-|-|-|-|
|Short form of the stock:|FIYTA A, FIYTA B|Stock Codes:||000026 and 200026|
|Stock Exchange Listed with|Shenzhen Stock Exchange||||
|Liaison Persons and Communication|||||
||Secretary of the Board||Securities Affairs Representative||
|Information|||||
|Names|Lu Wanjun||Zhang Yong||
||20th Floor, FIYTA Technology Building, Gaoxin S. RoadOne, Nanshan District, Shenzhen||20th Floor, FIYTA Technology Building, Gaoxin S. Road One,Nanshan District, Shenzhen||
|Office Address|||||
|Tel.|0755－83348369||0755－83348369||
|Fax|0755－86013669||0755－86013669||
|E-mail|investor@fiyta.com.cn||investor@fiyta.com.cn||

2. Principal Businesses in the Reporting Period
(1) Principal Businesses and Business Model
FIYTA has been concentrating itself in watch industry under the strategy of brand building and has formed a proprietary product brand cluster represented by FIYTA watch and watch retail network brand represented by HARMONY; has been continuously improving watch R& D, design and precision manufacture, enthusiastically carrying forward integration and upgrading of the key value chain, has preliminarily reached the vertical integration based brand development strategy (2) Development Status of Watch Industry and the Company's Position in the Industry
In the reporting year, the revival of the global economy experienced frequent secret worry and China's domestic GDP growth rate turned to "medium-high speed" from the previous "high speed". Facing the complicated and uncertain macro-environment and market change, the Company kept "deep ploughing" in its principal business, fully excavated the market potential, actively coped with the market challenge, accelerated business transformation and management upgrading and achieved remarkable economic performance. In 2017, the Company set a new historical record in operation revenues. The Company achieved good growth in the business of its own proprietary product brands represented by FIYTA watches and watch retail channels represented by HARMONY: where revenues from the business of FIYTA watches had a year-on-year growth of9.21% and that from the business of HARMONY had a year-on-year growth of13.36%. After three decades' courageous advance, FIYTA has successfully become a leader of China's watch industry.
3. Summary of Accounting/Financial Data
(1) Summary of Accounting Data and Financial Indicators over the Past Three Years
Does the Company need to make retroactive adjustment or restatement of the accounting data of the previous years? No
In CNY
||||||
|-|-|-|-|-|
||||Year-on-year||
||2017|2016||2015|
||||increase/decrease||
|Operation revenues in CNY|3,345,809,703.98|2,993,864,561.43|11.76%|3,162,196,212.90|
|Net profit attributable to the Company’s|140,216,258.28|110,662,681.59|||
||||26.71%|121,702,057.44|
|shareholders, in CNY|||||
|Net profit attributable to the Company’s|||||
|shareholders less the non-recurring items, in|123,918,527.75|97,200,540.64|27.49%|113,441,715.91|
|CNY|||||
|Net cash flows arising from operating activities,|564,954,561.97|455,759,094.15|||
||||23.96%|396,236,992.41|
|in CNY|||||

FIYTA HOLDINGS LTD. 2017 Annual Report, Summary
||||||
|-|-|-|-|-|
|Basic earning per share (CNY/share)|0.3196|0.2522|26.72%|0.3099|
|Diluted earning per share (CNY/share)|0.3196|0.2522|26.72%|0.3099|
|Return on equity, weighted average (%)|5.79%|4.74%|1.05%|7.24%|
||||Increase/decrease at the end||
||End of 2017|End of 2016|of the year over the end of the|End of 2015|
||||previous year||
|Total assets, in CNY|3,579,789,692.90|4,004,897,562.72|-10.61%|4,246,670,045.02|
|Net assets attributable to the Company’s|2,467,967,361.20|2,371,370,535.17|||
||||4.07%|2,299,215,650.21|
|shareholders, in CNY|||||

(2) Financial Data Summary based on Quarters
In CNY
||||||
|-|-|-|-|-|
||1st Quarter|2nd Quarter|3rd Quarter|4th Quarter|
|Operating revenue|817,002,183.65|782,538,960.70|876,113,517.26|870,155,042.37|
|Net profit attributable to the Company’s|||||
||45,319,028.27|41,389,796.49|49,839,227.96|3,668,205.56|
|shareholders|||||
|Net profit attributable to the Company’s|||||
|shareholders less the non-recurring profit and|45,377,622.54|40,560,834.40|49,457,070.83|-10,049,707.46|
|loss|||||
|Net cash flows arising from operating activities|122,917,899.12|153,797,761.41|86,600,298.96|201,638,602.48|

 Does there exist significant difference in the foregoing financial data or their total sum from the relevant financial data as disclosed in the quarterly reports and/or semi-annual report.
No
4. Capital Stock and Shareholders
(1) Quantity of shares held by the common shareholders and preferred shareholders whose voting rights are restored and shareholding by the top 10 shareholders
In shares
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Total preference|||
||||Total common||||Total preference|||||shareholders with the|||
|Total common|||shareholders at the||||shareholders with the|||||voting power not|||
|shareholders in the|35,156||end of the month||33,796||voting power recovered|||0||recovered at the end of||0|
||||before the date of||||at the end of the|||||the month before the|||
|reporting period|||disclosing the annual||||reporting period (if any)|||||day of disclosing the|||
||||report||||(Refer to Note 8)|||||annual report (if any)|||
|||||||||||||(Refer to Note 8)|||
|Shares held by the shareholders holding over 5% shares or the top ten shareholders|||||||||||||||
|||||Shares held|||||||Pledging or freezing||||
||||||Quantity at|Increase/dec|||Number of the||||||
|||||by the top||||Number ofthe restrictedshares held|||||||
|||Shares held by the top|||the end of|rease in the|||non-restricted||||||
|Shareholder names||||ten|||||||||||
|||ten shareholders|||the reporting|reporting|||shares held||Status of the shares||Quantity||
|||||shareholders|||||||||||
||||||period|period|||||||||
|||||(%)|||||||||||
|CATIC ShenzhenHoldings Limited||State-owned corporate||37.15%|162,977,32|7 0||0|162,977,327||||||
|Chongqing InternationalTrust Co., Ltd. -RONGXINTONG SeriesUnitrust No.10||Domesticnon-state-ownedcorporate||2.15%|9,421,68|0 918,900||0|9,421,680||||||
|#Yang Zugui||Domestic natural person||2.09%|9,163,46|9 1,909,400||0|9,163,469||||||
|Chongqing InternationalTrust Co., Ltd. - YUXINTrust No.2||Domesticnon-state-ownedcorporate||2.07%|9,103,31|8 0||0|9,103,318||||||
|MANULIFE TEDA Fund－ Minsheng Bank－MANULIFE TEDA ValueGrowth OrientedAdditional Issue No. 351Assets ManagementProgram||Domesticnon-state-ownedcorporate||1.15%|5,043,55|9 0||0|5,043,559||||||

FIYTA HOLDINGS LTD. 2017 Annual Report, Summary
||||||||||
|-|-|-|-|-|-|-|-|-|
|Xizang Investment Co.,Ltd.|State-owned corporate|1.13%|4,976,551|0|0|4,976,551|||
|Guangdong JunyeInvestment Co., Ltd.|Domesticnon-state-ownedcorporate|1.12%|4,924,710|1,577,500|0|4,924,710|||
|Golden Eagle Fund-Minsheng Bank-GoldenEagle Wenshi JunyeFlexible Disposition No. 3Assets ManagementProgram|Domesticnon-state-ownedcorporate|0.77%|3,369,329|-1,305,000|0|3,369,329|||
|Shenzhen Heli FengyuanCommerce & Trade Co.,Ltd.|Domesticnon-state-ownedcorporate|0.75%|3,300,000|-14,781|0|3,300,000|||
|Shenzhen QianyeHuirong Investment Co.,Ltd.|Domesticnon-state-ownedcorporate|0.68%|3,000,000|-76,400|0|3,000,000|||
|||Of the top 10 shareholders, MANULIFE TEDA Fund - Minsheng Bank－MANULIFE TEDA Value Growth Oriented|||||||
|About the fact that a strategic investor or ordinary|||||||||
|||Additional Issue No. 351 Assets Management Program, Xizang Investment Co., Ltd. 及Golden Eagle Fund- Minsheng|||||||
|corporate became one of the top ten shareholders||Bank-Golden Eagle Wenshi Junye Flexible Disposition No. 3 Assets Management Program are all the shareholders that|||||||
|||have participated in the Company's non-public issuing; the new shares subscribed by them got listed with Shenzhen|||||||
|due to placement of new shares (if any) (Refer to|||||||||
|||Stock Exchange on January 15, 2016; of them, the restricted shares were not allowed to be listed for trading or assigned|||||||
|Note 3)||within 12 months commencing from the first day of listing. The aforesaid restriction on sales has been released since|||||||
|||January 16, 2017.|||||||
|Explanation on associated relationship or||Of the top 10 shareholders, both Chongqing International Trust Co., Ltd. - RONGXINTONG Series Unitrust No.10 and|||||||
|||Chongqing International Trust Co., Ltd. - YUXIN Trust No.2 are subordinate to Chongqing International Trust Co., Ltd. and|||||||
|consistent action of the above shareholders|||||||||
|||both are holding totally 18,524,998 shares in the Company, taking 4.22% of the Company's total shares.|||||||
|Shareholding of top 10 shareholders of unrestricted shares|||||||||
|||Quantity of unrestricted shares held at the end of the reporting period|||||Share type||
|Shareholder’s Name|||||||||
||||||||Share type|Quantity|
|CATIC Shenzhen Holdings Limited||162,977,327|||||A-shares|162,977,327|
|Chongqing International Trust Co., Ltd. -RONGXINTONG Series Unitrust No.10||9,421,680|||||||
||||||||A-shares|9,421,680|
|#Yang Zugui||9,163,469|||||A-shares|9,163,469|
|Chongqing International Trust Co., Ltd. - YUXINTrust No.2||9,103,318|||||||
||||||||A-shares|9,103,318|
|MANULIFE TEDA Fund－ Minsheng Bank－MANULIFE TEDA Value Growth Oriented AdditionalIssue No. 351 Assets Management Program||5,043,559|||||||
||||||||A-shares|5,043,559|
|Xizang Investment Co., Ltd.||4,976,551|||||A-shares|4,976,551|
|Guangdong Junye Investment Co., Ltd.||4,924,710|||||A-shares|4,924,710|
|Golden Eagle Fund- Minsheng Bank-Golden EagleWenshi Junye Flexible Disposition No. 3 AssetsManagement Program||3,369,329|||||||
||||||||A-shares|3,369,329|
|Shenzhen Heli Fengyuan Commerce & Trade Co.,Ltd.||3,300,000|||||||
||||||||A-shares|3,300,000|
|Shenzhen Qianye Huirong Investment Co., Ltd.||3,000,000|||||A-shares|3,000,000|
|Explanation to the associated relationship or|||||||||
|consistent action among the top 10 shareholders|||||||||
|||Of the top 10 shareholders, both Chongqing International Trust Co., Ltd. - RONGXINTONG Series Unitrust No.10 and|||||||
|of non-restricted negotiable shares and that||Chongqing International Trust Co., Ltd. - YUXIN Trust No.2 are subordinate to Chongqing International Trust Co., Ltd. and|||||||
|between the top 10 shareholders of non-restricted||both are holding totally 18,524,998 shares in the Company, taking 4.22% of the Company's total shares.|||||||
|negotiable shares and top 10 shareholders.|||||||||
|Note to the top 10 shareholders involved in margin|||||||||
|financing & securities lending (if any) (Refer to Note||Inapplicable|||||||
|4)|||||||||

(2) Statement of total preferred shareholders and shares held by top 10 preferred shareholders
Inapplicable
(3) Equity and Control Relationship between the Company and the Actual Controller Disclosed in
a Form of Block Diagram
FIYTA HOLDINGS LTD. 2017 Annual Report, Summary State-owned Assets Supervision and Administration
Commission of the State Council
100%
National Council for Beijing Putuo Hanhua Aviation Industry AVIC CCB Aviation Industry Social Security Fund Investment Management Corporation of China Equity Investment (Tianjin) Co., Center Ltd.
14.31% 14.31% 62.52% 8.86%
AVIC International Holding Corporation
100%
AVIC International Shenzhen Company Limited
37.50%
33.93%
CATIC Shenzhen Holdings Limited
37.15%
Fiyta Holdings Ltd.
5. Bond Related Information
Were there any bonds which have been publically issued and listed with the stock exchange but have not yet been due or have not been entirely cashed despite that they have been due by the day when this Annual Report is approved for issuing?
No
III. Discussion and Analysis of the Management
1. Summary of Business during the Reporting Period
Does the Company need to comply with the requirements on information disclosure for special industries?
No
In 2017, facing the external economic environment of gradual revival but full of uncertainty, the Company insisted on the idea of development and brand strategy, practiced the Company's value of "customer orientation, good faith, cooperation, learning and innovation and high speed" with performance improvement as its objective, continued to work hard on the principal business, unceasingly optimized the organization structure, improved the process system, actively carried forward business innovation, strived to realize elaborated operation, constantly enhanced output of individual shops; with customer study as the original point, initiatively seized the very good opportunity of consumption upgrading, carried out marketing and brand upgrading work of various forms and full of productivity and the brand value and market share had been elevated steadily; with creating a customer-oriented organization as the orientation, pressed close in depth to and understood customers' demands, spared no effort in creating value for customers, effectively established a new type of customer relations. In the reporting period, with joint effort of the Company's whole colleagues, the Company realized sales revenue in the whole amounting to CNY 3,345.8097 million, a year-on-year growth of11.76%; realized net profit
FIYTA HOLDINGS LTD. 2017 Annual Report, Summary attributable to the shareholders of the Company amounting to CNY 140.2163 million, a year-on-year growth of26.71%. The net cash flow created from the operation activities amounted to CNY 564.9546 million.
During the reporting period, the Company seized the opportunity of consumption upgrading in the business of FIYTA brand and other own proprietary brands, focused on the work of customer study and per unit yield raising, promoted resource integration and efficiency improvement, and achieved a preliminary result in multiple brand and entire channel strategy. With the joint effort of various links of research, design, production and sales of FIYTA watch, the Company kept improving the“4P+C” brand construction system, the operation efficiency got improved step by step, the costumer satisfaction and brand reputation were constantly enhanced and the brand competitiveness were gradually manifested, and it was chosen as "a made-in-China product" by the Ministry of Commerce"; the Company achieved plentiful fruits in new product development; on the basis of continuous development and plentiful serial products, the Company launched newYoung+ series and achieved a good market echo; the sales proportion of Star series continuously increased, differentiated competitiveness and brand imprinting got enhanced; the channel quality was improved continuously, and the average per unit yield was growing continuously, the total number of the domestic channels was 3,100; a good result was achieved in brand internationalization and FIYTA Brand has successfully entered 32 countries/regions, and the number of the overseas channels increased by more than 180, and the overseas sales income increased by a big margin; the e-commerce business developed steadily and realized a turnover amounting to CNY 94.42 million with year-on-year growth of18%. Under the logistic system of three-stage network structure, FIYTA Brand products have covered the central warehousing centers, local warehousing centers of different cities, and shops. While the Company has not established any transportation logistic, it has realized butt joint with the information system of logistic enterprises. In addition, with continuous growth of sales orders, FIYTA Brand for the first time operated AI warehousing robot project. As a result, the order processing and delivery efficiency was improved by a double or more. Meanwhile, the Company's strategy for high-end brands, fashion brands, VERUS, JEEP, etc. and Beijing Watch development was actively carried forward. During the reporting period, FIYTA Watch business realized a turnover amounting to CNY 979.906 million with a year-on-year growth of9.21%.
During the reporting period, Harmony World Watch Center closely centered on the work theme of "recasting the foundation, conducting deep ploughing operation, customer study and innovation and development", constantly improved its earning power, carried out the customer study work in depth, carried forward transformation and upgrading of the business models. Harmony World Watch Center kept deep ploughing and digging the potential according to the " Three Tier Marketing" management system, conducted more effective retail operation, greatly improved the per unit yield, achieved a big profit growth; constantly optimized the stock structure, continuously reduced the inventory volume, greatly improved the stock turnover; conducted continual optimization of the existing channels, further enhanced the channel quality, optimized the famous brand watches by 186 channels, of which 17 channels were newly opened, 60 channels were closed and adjusted; kept carrying forward the business model transition from "famous brand watch retail service supplier" to "famous brand comprehensive service supplier", constructed "new retail" business model of online and offline integration by means of informatization technology, broadened the business development scene. During the reporting period, Harmony realized a turnover amounting to CNY 2,237.3583 million with a year-on-year growth of13.36%; kept fast and steady growth in famous brand watch repairing services and e-commerce channels.
Changes in major financial items in 2017 are as follows:
|||||||||
|-|-|-|-|-|-|-|-|
||||||Increase/dec|||
||Statement Items|2017|2016||rease||Notes to the movements|
||||||movement|||
||||||(%)|||
|Balance sheet items||||||||
|||||-56.35%||Mainly due to return of the bank loans and the raised capitalbeing put into application during the reporting year.||
||Monetary capital|187,152,891.32|428,802,755.81|||||
|||||-52.11%||Mainly due to return of partial bank loans with self-raised fundduring the reporting year.||
||Short term borrowings|525,990,510.00|1,098,438,070.00|||||
|||||58.14%||Mainly due to that with growth of profit in the reporting year,bonus payable to the sales persons increased, and the year-endbonus payable to employees increased also.||
||Payroll payable|71,564,367.14|45,254,585.69|||||
|||||-99.85%||Mainly due to decrease of the corresponding minorityshareholders' equity resulted from decrease of assets as Station68 Ltd. entered the process of cancellation liquidation during thereporting year.||
||Minority shareholders'|||||||
|||5,515.78|3,577,654.56|||||
||equity|||||||
|Profit statement items||||||||
||Loss from impairment of|||112.50%||Mainly due to increase of the provision for price falling ofinventories during the reporting year.||
|||62,427,499.61|29,377,884.40|||||
||assets|||||||
||Income from disposal of|||-1505.59%||Mainly due to Station 68 Ltd's disposal of overseasnon-operation real estate.||
|||7,321,993.36|-520,920.33|||||
||assets|||||||
|||||100%||Mainly due to that based on the requirements on modification ofthe accounting standards in the reporting year, the operationbased government subsidy was counted to "other income"||
||Other income|17,508,255.98|0.00|||||

FIYTA HOLDINGS LTD. 2017 Annual Report, Summary
|||||||
|-|-|-|-|-|-|
|||||-85.96%|Mainly due to that according to the changed requirements of theaccounting standards during the reporting year, the operationrelated government subsidy was counted to the item of "otherincome" instead of the item of "non-operating income"previously. However, it was unnecessary to recount and adjustthe comparative statements of the same period and thegovernment subsidy involved amounted to CNY 17,234,482.25.|
||Non-operating income|2,607,653.91|18,574,739.04|||
|||||-933.85%|Mainly due to disposal of non-operating real estate in thereporting year as Station 68 Ltd. enter the process ofcancellation liquidation in the reporting year.|
||Minority shareholders'|||||
|||2,400,100.92|-287,834.29|||
||gains/losses|||||
||Other comprehensive|||-100.51%|Mainly due to influence from fluctuation of the exchange rate.|
|||-28,676.16|5,617,505.89|||
||income, net after tax|||||
|Cash flow statement items||||||
||Rebated taxes and dues|||13701.78%|Mainly due to increase of the export rebates during the reportingyear.|
|||886,252.20|6,421.29|||
||received|||||
||Cash from return on|||-100.00%|Mainly due to the dividend from Shanghai Watch Industry Co.,Ltd. for the same period of the previous year.|
|||0.00|383,750.00|||
||investment obtained|||||
||Net cash recovered from|||157.28%|Mainly due to disposal of overseas non-operating real estate byStation 68 Ltd. during the reporting year.|
||disposal of fixed assets,|10,678,135.25|4,150,363.94|||
||intangible assets and|||||
||other long term asses|||||
|||||-59.06%|Mainly due to decrease of the size of bank loans due toincrease of cash flow-in for business activities during thereporting year.|
||Cash received from the|||||
|||575,282,350.00|1,405,213,268.91|||
||borrowings as obtained|||||
||Cash paid in connection|||240.15%|Mainly due to return of the capital invested by the shareholdersas Station 68 Ltd. entered the process of cancellation liquidationduring the reporting year.|
||with other fund-raising|3,376,589.16|992,669.19|||
||activities|||||

2. Does there exist any significant change in the principal business during the reporting period No
3. Products taking over10% of the prime operating revenue or prime operating profit of the Company
||||||||
|-|-|-|-|-|-|-|
|||||Year-on-year|Year-on-year|Year-on-year|
||Operating revenue|Operating costs|Gross profit rate|increase/decrease of|increase/decrease of|increase/decrease of|
|||||operating revenue over|operating costs over|gross profit rate over|
|||||the previous year|the previous year|the previous year|
|Classified based on products|||||||
|Famous brand watches|2,237,358,253.15|1,652,049,037.83|26.16%|13.36%|12.59%|0.50%|
|Fiyta|979,906,003.52|313,120,661.20|68.05%|9.21%|8.70%|0.15%|
|Lease|109,451,504.76|17,785,254.56|83.75%|10.52%|31.31%|-2.57%|
|Others|19,093,942.55|3,697,637.98|80.63%|-19.78%|-4.85%|-3.04%|

 4. Does there exist operation seasonality or periodicity necessary to be paid attention to
No
5. Note to the Operation Revenue, Operation Costs, Total Profit Attributable to the Company's Common Shareholders or Significant Change during the Reporting Period over the Previous Reporting Period
Inapplicable
FIYTA HOLDINGS LTD. 2017 Annual Report, Summary 6. Listing Suspension or Delisting Possibly to be Confronted with
Inapplicable
7. Matters in connection with the financial report
(1) Explanation on the Changes in the Accounting Policy, Accounting Estimate, and Accounting Method in Comparison with the Financial Report of the Previous Year
Inapplicable
(2) Explanation on Serious Accounting Errors Occurred in the Reporting Period Necessary to be Restated Retrospectively
Inapplicable
(3) Explanation on the Changes in the Scope of the Consolidated Statements in Comparison with the Financial Report of the Previous Year.
Reviewed and approved at the 15th Session of the Eighth Board of Directors, Beijing Henglianda Horologe Co., Ltd., Harmony World Watch International Co., Ltd. and Beijing Cultural Communication Co., Ltd., three of Harmony's solely funded subsidiaries, had been cancelled, and were not brought into the consolidation scope of the Company at the end of the reporting year.
Board of Directors of FIYTA HOLDINGS LTD. March 10, 2018