深圳中恒华发股份有限公司2016年年度报告摘要
Stock Code: 000020 200020 Public Notice No.:2017-09 Short Form of the Stock: SHEN HUAFA-A, SHEN HUAFA- B
Shenzhen Zhongheng Huafa Co., Ltd.
Summary of Annual Report 2016
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
Other directors attending the Meeting for annual report deliberation except for the followed
|||||
|-|-|-|-|
|Name of director absent|Title for absent director|Reasons for absent|Attorney|
|Xu jinwen|Independent director|-|Li Ding’an|

Prompt of non-standard audit opinion
□ Applicable√ Not applicable
Profit distribution pre-plan of common stock or capitalizing of common reserves pre-plan deliberated by the Board in the reporting period
□ Applicable√ Not applicable
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√ Not applicable
II. Basic information of the company
1. Company profile
||||||||
|-|-|-|-|-|-|-|
|Short form of the stock|Shen Hwafa A, Shen Hwafa B||Stock code|||000020, 200020|
|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, No. 2 Building of Dachong BusinessCenter, Nanshan District, Shenzhen|||33/F, No. 2 Building of Dachong BusinessCenter, Nanshan District, Shenzhen|||
|Office add.|||||||
|Fax.|0755-86360206|||0755-86360206|||
|Tel.|0755-86360220|||0755-86360201|||
|E-mail|hwafainvestor@126.com.cn|||hwafainvestor@126.com.cn|||

2. 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
深圳中恒华发股份有限公司2016年年度报告摘要
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 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, profitability of industry business weaker than expected, 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.
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.
3. Main accounting data and financial indexes
(I) 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
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||Changes over|||
||||2015|||||2014||
||||||||last year|||
|||2016||||||||
||||Pre-adjustme||Post-adjustm||Post-adjustm|Pre-adjustme|Post-adjustm|
||||nt||ent||ent|nt|ent|
|Operating income|619,167,770.74||499,455,781.|499,455,781.11||23.97%||694,839,760.|694,839,760.|
||||11|||||10|10|
|Net profit attributable to|5,457,710.33|||-4,200,845.61||||||
||||-6,731,513.1|||||||
|shareholders of the listed|||||||-|7,687,620.27|7,687,620.27|
||||1|||||||
|company||||||||||
|Net profit attributable to||||||||||
|shareholders of the listed||||||||||
||||-31,741,774.||-29,211,107.|||||
|company after deducting||5,109,926.82|||||-|2,322,082.33|2,322,082.33|
||||80||30|||||
|non-recurring gains and||||||||||
|losses||||||||||
|Net cash flow arising from|-18,693,296.58|||173,486,015.99||||||
||||173,486,015.|||||119,492,159.|119,492,159.|
||||||||-110.78%|||
|operating activities|||99|||||01|01|
|Basic earnings per share|0.0193|||-0.0148||||||
||||-0.0238||||-|0.0271|0.0271|
|(RMB/Share)||||||||||
|Diluted earnings per share|0.0193|||-0.0148||||||
||||-0.0238||||-|0.0271|0.0271|
|(RMB/Share)||||||||||

深圳中恒华发股份有限公司2016年年度报告摘要
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Weighted average ROE||1.72%||-2.27%||-1.50%|3.22%|2.77%|2.77%|
||||End of 2015||||Changes over|||
|||||End of 2015|||end of last|End of 2014||
|||End of 2016|||||year|||
|||||Pre-adjustme||Post-adjustm|Post-adjustm|Pre-adjustme|Post-adjustm|
|||||nt||ent|ent|nt|ent|
|Total assets|632,475,542.40|||1,155,089,23|1,154,989,593.34||-45.24%|1,162,740,98|1,162,740,98|
|||||6.67||||4.93|4.93|
|Net assets attributable to|319,698,568.63||||313,937,229.70|||||
|||||311,406,562.||||281,351,269.|281,351,269.|
|shareholder of listed|||||||1.84%|||
|||||20||||74|74|
|company||||||||||

The reasons for the changes in accounting policies and the correction of accounting errors
1. The company mistakenly disbursed cash deposit from the rent of 2015, which was corrected and adjusted to administration expenses and rental fees, increased the administration expenses of 2015 by RMB 99,643.33, and reduced other receivables by RMB 99,643.33.
2. The company collected the financing income of T2 class trust units in trust plan of 2015 CITICQianjing·Green Xingcheng investment funds and accrued the business tax and additional tax which were identified not belonging to the business tax scope and were corrected and returned back, reduced taxes and additional of 2015 by RMB 3,473,866.67, and reduced tax payable (business tax, urban maintenance and construction tax, education surcharge, local education surcharge) by RMB 3,473,866.67.
3. The correction of above two items made impacts on the income tax and undistributed profits, increased income tax expenses by RMB 843,555.84, increased tax payable (corporate income tax) by RMB 843,555.84, and increased undistributed profit by RMB 2,530,667.50.
(2) Quarterly main financial index
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||First quarter||Second quarter||Third quarter||Fourth quarter|
|Operating income|137,699,187.33||171,839,338.23||147,394,897.89||162,234,347.29||
|Net profit attributable to|469,935.69||6,803,020.53||-2,763,587.66||948,341.77||
|shareholders of the listed|||||||||
|company|||||||||
|Net profit attributable to|137,244.07||6,045,229.45||-3,187,589.84||2,365,523.69||
|shareholders of the listed|||||||||
|company after deducting|||||||||
|non-recurring gains and losses|||||||||
|Net cash flow arising from|-46,008,442.75||20,584,093.18||-45,645,033.67||52,376,086.66||
|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
4. Shares and shareholders
(1) Particulars about common stock shareholders, preference shareholders with voting rights recovered
and top ten shareholders
In Share
深圳中恒华发股份有限公司2016年年度报告摘要
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Total||||||
||||Total common||||||preference||Total preferenceshareholders withvoting rightsrecovered at endof last monthbefore annualreport disclosed||||
||Totalcommonstockshareholdersin reportingperiod-end||||||||||||||
||||stock||||||shareholders||||||
||||shareholders at||||||with voting||||||
|||27,759|end of last||23,293||||rights|0||||0|
||||month before||||||recovered at||||||
||||annual report||||||end of||||||
||||disclosed||||||reporting||||||
||||||||||period||||||
||Top ten shareholders||||||||||||||
|||||||||||||Number of shares|||
|||Nature ofshareholder|||||Amount||||||||
||Full name ofShareholders|||Proportion of||||||||pledged/frozen|||
||||||||of shares||Amount of restricted shares held||||||
|||||shares held||||||||State of|||
||||||||held||||||Amount||
|||||||||||||share|||
|WuhanZhonghengGroup||Domesticnon-state-ownedlegalperson|41.14%|||116,489,894||0||||Pledged|116,100,000||
|||||||||||||Frozen|116,489,894||
|SEG (HONGKONG) CO.,LTD.||Overseaslegalperson|5.85%|||16,569,560||0||||Pledged|0||
|||||||||||||Frozen|0||
|GOOD HOPECORNERINVESTMENTS LTD||Overseaslegalperson|4.49%|||12,700,000||0||||Pledged|0||
|||||||||||||Frozen|0||
|ChangjiangSecuritiesBrokerage(Hongkong)Co., Ltd.||Overseaslegalperson|1.89%|||5,355,249||0||||Pledged|0||
|||||||||||||Frozen|0||
|Xu Dongdong||Domesticnatureperson|0.60%|||1,690,307||0||||Pledged|0||
|||||||||||||Frozen|0||
|ZhongJiachao||Domesticnatureperson|0.44%|||1,244,440||0||||Pledged|0||
|||||||||||||Frozen|0||
|HuangShuqiang||Domesticnatureperson|0.41%|||1,174,566||0||||Pledged|0||
|||||||||||||Frozen|0||
|BINGHUA||Overseas|0.30%|||840,113||0||||Pledged|0||

深圳中恒华发股份有限公司2016年年度报告摘要
||||||||||
|-|-|-|-|-|-|-|-|-|
|LIU||natureperson|||||||
||||||||Frozen|0|
|Zhu Xionghui||Domesticnatureperson|0.23%||661,780|0|Pledged|0|
||||||||Frozen|0|
|HuangQingpeng||Domesticnatureperson|0.23%||656,500|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,|||||
||aforesaid shareholders||||||||
|||||nor 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√ Not applicable
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.
5. Corporate bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without payment in full at maturity on the approval date for annual report disclosed
No
深圳中恒华发股份有限公司2016年年度报告摘要
III. Discussion and analysis of business
1. Introduction of operation in the reporting period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In 2016, China's economy has shown a steady operation trend as a whole, the home-appliance industry has increased, but lacked motivation, as an industrial manufacturing enterprise providing supporting products and services for home appliance industry, the Company actively adapted to the national economic policies and industry changes, solved difficulties and problems, positively responded, and turned the losses into gains. In 2016, the company achieved operating income of 619,167,800 Yuan, an increase of23.97% compared with the same period of last year; net profit of5,457,700 Yuan, and turned the losses into gains.
● Injection molding business achieved annual operating income of 188,550,900 Yuan, a decrease of 2.24% compared with the same period of last year. When the overall market had a poor performance, the injection molding division focused on maintaining customer relationships, and enhanced the customer share by strategy adjustment; strengthened the fine management, improved product quality, developed effective quality corrective measures, strictly controlled the quality, and maintained a good quality and reputation; after introducing some advanced production equipment, once again updated some old injection molding machines, further implemented the automation improvement and process optimization progress, reduced human input and waste of production materials, and improved production efficiency; at the same time, strengthened the internal management, introduced the competition mechanism, paid attention to staff training, improved staff quality, practically completed the staff logistics services, and enhanced the company's cohesive force and centripetal force.
● Polystyrene business achieved annual operating income of 68,514,600 Yuan, a decrease of11.87% compared with the same period of last year. Faced with the rise in raw material prices, increase of human resource costs, decline in sales prices, and fierce competition in the market, the polystyrene business division adhered to taking market demand as the guiding, and continued to expand the market share by adjusting the product structure; while focused on improving the product quality and reducing the raw material loss, and formed its own unique competitive advantages. However, due to the intensifying market competition, rising production costs, and declining product prices, the profit margins reduced. In the future, the company shall take the thought of promoting development by innovation, and further improve the market competitiveness and expand the market shares by technological innovation, market innovation, resource utilization innovation, management innovation and product optimization.● LCD business achieved annual operating income of 312,991,900 Yuan, an increaseof67.52% compared with the same period of last year. During the reporting period, the video division continued to invest more energies in the design and development of new products, newly increased various sizes of LCD new series with more cost advantages and realized mass production, developed from the traditional structure to ultra-thin, ultra-narrow and larger sized curve LCDs. The video division focused on product innovation, developed from the single product sizes to multi-series and multi-sizes product line, and has LIF series, G series, FIM series, C350 curve series products with completely independent designs and tooling; in the second half year of 2016, the company successfully introduced the new customer, Taiwan brand “ACER”, which has developed into four major customers, including the existing customer base (AOC system), American brand Viewsonic®, Taiwan brand (ACER), and its own brand (HSO); realized the globalization of sales area, and the products produced by our company spread over our country, Asia-Pacific, Europe, North America and other regions; at the same time, increased the e-commerce sales channels, and achieved steady growth in sales revenue.● Property leasing business has realized an annual operation revenue of 39,501,900 Yuan, a decrease of18.72% compared with the same period of last year. Most sites of thecompany’s own property Huafa Building have signed the lease, shops have opened one after another, the sites in idle have substantially reduced, and the average rental price has increased in some extent than the past, but the company's own property Gongming Huafa Electronic City has entered the demolition stage of updating and reconstruction, lessees have continued to remove and the rental income has relatively reduced, therefore, thecompany’s overall rental income of 2016 is lower that the previous years.
深圳中恒华发股份有限公司2016年年度报告摘要
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□Not applicable
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Increase/decrea|
|||||Increase/decrea|Increase/decrea||
||Operating|Operating|Gross profit|||se of gross|
|Name||||se of operating|se of operating||
||revenue|profit|ratio|||profit ratio|
|||||revenue y-o-y|profit y-o-y||
|||||||y-o-y|
|Display|312,991,895.11|5,690,315.97|5.22%|67.52%|525.93%|-1.05%|
|Plastic|||||||
|injection|188,550,863.79|2,254,775.86|11.01%|-2.24%|1,300.01%|2.80%|
|hardware|||||||
|Foam|68,514,616.64|344,665.28|12.02%|11.87%|5,292.53%|2.20%|

 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 attributable to common stock shareholders of listed company or composing the previous reporting period□ Applicable√ Not applicable
6. Particular about suspended and delisting
□ Applicable√ Not applicable
(1) Particulars about the changes in aspect of accounting policy, estimates and calculation method compared with the financial report of last year
√Applicable□ Not applicable
1. Explanation on accounting policy changes
According to the Provisions Concerning the Accounting Treatments on VAT Cai Kuai[2016] No.22 issued by Ministry of Finance on 3 December 2016, relevant business occurred since 1 May 2016 will act by new rules, main influence of the Company for implementation are as:
Content and reasons for changes Itesm and amount affected
The “business tax and surcharge” listed in consolidate business tax and surcharge
profit statement and parentcompany’s profit statement will administrative expenses
adjusted as “taxes and surcharge”
The follow taxes (house duty, land use tax, stamp tax, Tax and surcharge in consolidate profit statement increased
vehicle and vessel tax and resource tax etc.) arising from 2,664,333.31 Yuan for the Year;
operation activities will listed under “taxes and surcharge” Administrative expenses in consolidate profit statement
深圳中恒华发股份有限公司2016年年度报告摘要
from” administrative expenses” since 1 May 2016. the decreased 2,664,333.31 Yuan for the Year;
taxes occurred before 1 May 2016 will not adjusted and Tax and surcharge in parentcompany’s profit statement comparative data either increased 1,293,535.18 Yuan for the Year;
Administrative expenses in parentcompany’s profit statement decreased 1,293,535.18 Yuan for the Year;
(2) Major accounting errors within reporting period that needs retrospective restatement
√Applicable□ Not applicable
1. Preliminary accounting errors
(1) Retrospective restatement
||||
|-|-|-|
|Contenet|Items of comparison period affected|Cumulative effects|
|The rental for year of 2015 was mis-listed as cashdeposit as collateral, and adjsuted to administrativeexpenses as rental charge|Administrative expenses|99,643.33|
||Other account receivable|-99,643.33|
|The company collected the financing income of T2class trust units in trust plan of 2015 CITICQianjing·Green Xingcheng investment funds andaccrued the business tax and additional tax whichwere identified not belonging to the business taxscope and were corrected and returned back|Business tax and surcharge|-3,473,866.67|
||Taxes payable – business tax|-3,101,666.67|
||Taxes payable – urban maintenance &construction tax|-217,116.67|
||Taxes payable – extra charges ofeducation funds|-93,050.00|
||Taxes payable – local education surcharge|-62,033.33|
|The correction above mentioned have impact onincome tax and retained profit of the Company|Income tax expenses|843,555.84|
||Taxes payable- enterprise income tax|843,555.84|
||Retained profit|2,530,667.50|

 (3) Compare with lastyear’s financial report; explain changes in consolidationstatement’s scope
□ Applicable√ Not applicable
No changes in consolidationstatement’s scope for the Company in the period.