BOE Technology Group Co., Ltd. Interim Report 2018 (Summary) Stock Code: 200725 Stock Name: BOE-B Announcement No. 2018-050 BOE TECHNOLOGY GROUP CO., LTD.
INTERIM REPORT 2018 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the 2018 Interim Report of BOE Technology Group 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”).
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of the Company hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein.
Mr. Wang Dongsheng, theCompany’s legal representative, Mr. Chen Yanshun, president of theCompany’s Execution Committee（Chief ExecutiveOfficer）, Ms. Sun Yun, theCompany’s Chief Financial Officer, and Ms. Yang Xiaoping, head of theCompany’s financial department (equivalent to financial manager) hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete.
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
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
BOE Technology Group Co., Ltd. Interim Report 2018 (Summary) Part II Key Corporate Information
1. Stock Profile
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|-|-|-|-|-|
|Stock name|BOE-A, BOE-B|Stock code||000725, 200725|
|Stock exchange for stock listing|Shenzhen Stock Exchange||||
|Contact information|Board Secretary||Securities Representative||
|Name|Liu Hongfeng||--||
||12 Xihuan Middle Road, BeijingEconomic-Technological Development Area,P.R.China||--||
|Office address|||||
|Tel.|010－64318888 ext.||--||
|E-mail address|liuhongfeng@boe.com.cn||--||

2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes√ No
|||||
|-|-|-|-|
|Item|H1 2018|H1 2017|Change (%)|
|Operating revenue (RMB)|43,473,904,966.00|44,605,027,995.00|-2.54%|
|Net profit attributable to the listed|2,975,206,500.00|4,302,605,600.00||
||||-30.85%|
|company’s shareholders (RMB)||||
|Net profit attributable to the listed||||
|company’s shareholders before exceptional|978,868,759.00|4,017,844,109.00|-75.64%|
|items (RMB)||||
|Net cash generated from/used in operating|11,439,605,846.00|10,638,591,266.00||
||||7.53%|
|activities (RMB)||||
|Basic earnings per share (RMB/share)|0.085|0.123|-30.89%|
|Diluted earnings per share (RMB/share)|0.085|0.123|-30.89%|
|Weighted average return on net assets (%)|3.45%|4.48%|-1.03%|
|Item|30 June 2018|31 December 2017|Change (%)|
|Total assets (RMB)|276,232,247,578.00|256,108,741,849.00|7.86%|
|Net assets attributable to the listed|85,465,192,715.00|84,809,816,377.00||
||||0.77%|
|company’s shareholders (RMB)||||

3. Shareholders and Their Holdings at Period-End
Unit: share
||||||||
|-|-|-|-|-|-|-|
|Number of ordinary shareholders||1,423,193 (including 1,383,999 A-shareholders and 39,194 B-shareholders)|||||
|Top 10 shareholders|||||||
||Nature of|Shareholding|||Pledged or frozen shares||
|Name of shareholder|||Number of shares|Restricted shares|||
||shareholder|percentage|||Status|Shares|
|Beijing State-ownedCapital Operation andManagement Center|State-ownedlegal person|11.68%|4,063,333,333|0|||
||||||N/A|0|
|Chongqing EzcapitalOpto-electronicsIndustry InvestmentCo., Ltd.|State-ownedlegal person|7.62%|2,653,000,041|0|||
||||||N/A|0|
|Hefei Jianxiang|State-owned|7.21%|2,510,142,953|0|N/A|0|

BOE Technology Group Co., Ltd. Interim Report 2018 (Summary)
||||||||
|-|-|-|-|-|-|-|
|Investment Co., Ltd.|legal person||||||
|Beijing YizhuangInvestment HoldingsCo., Ltd|State-ownedlegal person|3.57%|1,241,423,641|0|||
||||||N/A|0|
|Beijing BOEInvestment &Development Co.,Ltd.|State-ownedlegal person|2.36%|822,092,180|0|||
||||||N/A|0|
|National SocialSecurity FundPortfolio 108|Other|1.24%|429,993,527|0|||
||||||N/A|0|
|Hong Kong SecuritiesClearing CompanyLtd.|Foreignlegal person|1.20%|416,179,024|0|||
||||||N/A|0|
|National SocialSecurity FundPortfolio 101|Other|0.96%|335,271,500|0|||
||||||N/A|0|
|Beijing ElectronicsHoldings Co., Ltd.|State-ownedlegal person|0.79%|273,735,583|0|||
||||||N/A|0|
|Central Huijin AssetsManagement Co., Ltd|State-ownedlegal person|0.71%|248,305,300|0|||
||||||N/A|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 BOE Investment &|||||
|||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 entering into Implementation|||||
|||Protocol of Voting Right respectively, agreed to maintain all of the shares held by them|||||
|||respectively unanimous with Beijing BOE Investment & Development Co., Ltd. when|||||
|Connected or acting-in-concert||executing the voting rights of the shareholders.|||||
|parties among shareholders above||4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital|||||
|||Operation and Management Center handed over 70% of the shares directly held by it to|||||
|||Beijing Electronics Holdings Co., Ltd. for management through Stock Management Protocol,|||||
|||and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except|||||
|||for disposing right and usufruct of the shares, of which the rest 30% voting right maintained|||||
|||unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement according to|||||
|||Implementation Protocol of Voting Right.|||||
|||5. Except for the above relationships, the Company does not know any other connected party|||||
|||or acting-in-concert party among the top 10 shareholders.|||||
|Shareholders conducting margin|||||||
|||N/A|||||
|trading (if any)|||||||

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.
BOE Technology Group Co., Ltd. Interim Report 2018 (Summary) 6. Corporate bonds
Does the Company have any corporate bonds publicly offered and listed on the stock exchange, which were undue before the date of thisReport’s approval or were due but could not be redeemed in full?
Yes.
(1) Bond Profile
|||||||
|-|-|-|-|-|-|
|Bond name|Abbr.|Bond code|Due date|Balance (RMB’0,000)|Coupon rate|
|The 2016 public offering of||||||
|corporate bonds by BOE||||||
||16BOE01|112358|31 March 2021|1,000,000|3.15%|
|Technology Group Co., Ltd. for||||||
|qualified investors (Phase I)||||||

(2) Selected Financial Information of the Company as at Period-End
|||||
|-|-|-|-|
|Item|30 June 2018|31 December 2017|Change (%)|
|Gearing ratio|59.31%|59.28%|0.03%|
|Item|H1 2018|H1 2017|Change (%)|
|EBITDA-to-interest coverage (times)|5.66|8.43|-32.86%|

 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.
In the first half of 2018, the global economy was running steadily in a positive recovery. With a weakening display market, the Company firmly upheld its strategy of “Ecoresystem: Open and Connected” and achieved good operating results in the industry. Also, the Reporting Period saw improvements in theCompany’s technological and product innovation with the Company applying for over 4,800 new patents in the period. Meanwhile, the Company has dominated all the markets of mainstream display products. Progress has been made in expansion in the innovative application market, with output rising over140% year-on-year. Unit sales of all the “8425” high-definition products registered marked growth. With enhanced marketing, BOE iGallery saw improvements in both market recognition and unit sales. Cooperation on electronic labels for smart retail has been established with supermarkets across the globe. In the Internet of Vehicles (IoV) business, the Company strengthened cooperation with notable car makers and the TFT unit sales went up. The AMOLED average yield rate has exceeded70% as at the end of this June, with shipments continuously delivered to well-known manufacturers. Additionally, the Company successfully held asuppliers’ meeting and the first Digital Art Forum, as well as participating in various fairs and exhibitions at home and abroad (Japan, Europe, the U.S., etc.) to promote its advanced products and technologies including flexible AMOLED, 8K, micro display, mini-LED and QLED, as well as commercial display solutions and new retail solutions. These moves were aimed at boosting theCompany’s brand recognition.
(1) Display and Sensor Device
Various types of mobile phones with free form and bezel-less display realized mass production, 6.18-inch flexible products realized
BOE Technology Group Co., Ltd. Interim Report 2018 (Summary) 1mm dynamic warping, and 5.99-inch flexible products realized dynamic floating appearance design. The OGM Tilt active-pen-based TPC product (the tablet PCs that supports metal mesh integrated touch technology and uses active pen) that realized initial release in the world achieved mass production in April; the 3.9mm MNT semi-set product, which is the thinnest in the world and first semi-integrated complete displayer product of BOE, succeeded in mass production; several types of innovative products were exhibited in domestic and overseas exhibitions, including the 7.56-inch QXGA Foldable (foldable product with resolution ratio being 2048 x 1536) that won Innovative Product and Application Award in 2018 China Electronic Information Expo (CITE). The construction of new production line was implemented as scheduled and realized phased target in advance; the 10.5th Generation BOE Hefei Production Line was completed in June; the pile foundation engineering of Kunming Microdisplay Project was completed on Jun. 25; the first 0.39-inch product was highlighted and realized SID sample display on May 23. The production capacity of the 8.5th Generation Chongqing and Fuzhou Production Lines reached a high respectively, with comprehensive yield rate improved continuously.
(2) IoT-Based Smart System
The Company innovated its iGallery business, optimized contents of APP function, and increased business performance rapidly, thus enjoying comparative growth of sales volume on moving base with170%, newly developing 350,000 users, and increasing the amount of works transactions by fivefold. The layout of Smart Retail Business in China started to show effects; the cumulative number of brand owners and stores in market in regions as North China, Central China, Southern China and Sichuan, etc., reached 30 and 40 respectively. As for Smart Services, the Company optimized product structure, increased sales volume steadily, improved the sales ratio of high-efficient products as TVs and displayers, and made its new application business develop rapidly. In addition, BOE also promoted its project in progress steadily; for example, BOE Suzhou Industry Park Project was commenced successfully and Chongqing Smart Manufacturing Factory realized mass production. Moreover, Smart Energy PV Project achieved stable and high-efficient operation.
(3) Smart Healthcare Service
The Company defined business development strategy, focused on mobile healthcare products on the basis of Internet of health and life data, provided services as healthcare guidance, disease prevention and precision medicine through integrating digital hospitals, regenerative medicine and healthcare centers by virtue of life data, AI technology and professional medical team, and built an overall and full-life-circle healthcare service ecosystem. As for mobile healthcare, the Company focused on microfluidics, biological detection method and other technologies to independently research and develop biochips and family doctor equipment products, which form an integrated business development framework together with ecological chain products and APP service platform. For regenerative medicine, the Company completed establishing a system for heart diaphragm clinical research to promote animal experiment and clinical research. The operation preparation for Hefei BOE Hospital was in progress, and the Company continuously carried out on-line/off-line market promotion to improve its brand popularity; Chengdu BOE Hospital completed conceptual plan. For healthcare centers, the Company persisted in optimizing client structure continuously, and realized remarkable effect in project expansion. In addition, the Company also firmly promoted project planning for life science and technology industry base.
BOE Technology Group Co., Ltd. Interim Report 2018 (Summary) 2. Matters Related to Financial Reporting
(1) Changes in Accounting Policies, Accounting Estimates or Measurement Methods Compared to Last Accounting Period
□ Applicable√ Not applicable
No such changes.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in Reporting Period□ Applicable√ Not applicable
No such cases.
(3) Changes in Scope of Consolidated Financial Statements Compared to Last Accounting Period
√Applicable□ Not applicable
For the Reporting Period, the newly incorporated Beijing BOE Sensor Technology Co., Ltd., as well as Mianyang BOE Optoelectronics Co., Ltd. and SES Imagotag SA, both obtained by the Company through business combinations not under common control, were newly included into theCompany’s consolidated financial statements.
Chairman of the Board (signature): Mr. Wang Dongsheng
Date of theBoard’s approval of this Report: 24 August 2018