SEMI-ANNUAL REPORT 2019 SHENZHEN ZHONGHENG HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2019
August 2019
SEMI-ANNUAL REPORT 2019 Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Shenzhen Zhongheng Huafa Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
Li Zhongqiu, Principal of the Company, Yang Bin, person in charger of accounting works and Wu Aijie, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2019 Semi-Annual Report is authentic, accurate and complete.
Other directors attending the Meeting for semi-annual report deliberation except for the followed
|||||
|-|-|-|-|
|Name of director||||
||Title for absent director|Reasons for absent|Attorney|
|absent||||
|Gao Jianbai|director|personal reason|Li Zhongqiu|
|Xu Jinwen|independent director|personal reason|Zhang Zhaoguo|

Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors. Majority investors are advised to exercise caution of investment risks.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
SEMI-ANNUAL REPORT 2019 Contents
Semi-annual Report 2019 ............................................................................................................ 1 Section I Important Notice and Paraphrase ................................................................................ 2 Section II Company Profile and Main Financial Indexes ............................................................ 5 Section III Summary of Company Business................................................................................. 8 Section IV Discussion and Analysis of Operation ........................................................................ 9 Section V Important Events ........................................................................................................ 15 Section VI Changes in shares and particular about shareholders ........................................... 32 Section VII Preferred Stock ........................................................................................................ 37 Section VIII Particulars about Directors, Supervisors and Senior Executives ....................... 38 Section IX Corporate Bonds ..................................................................................................... 39 Section X Financial Report ......................................................................................................... 40 Section XI Documents Available for Reference ...................................................................... 147
SEMI-ANNUAL REPORT 2019 Paraphrase
||||
|-|-|-|
|Items|Refers to|Contents|
|Company, Shen Huafa|Refers to|SHENZHEN ZHONGHENG HUAFA CO., LTD.|
|Hengfa Technology|Refers to|Wuhan Hengfa Technology Co., Ltd.|
|Huafa Property|Refers to|Shenzhen Zhongheng Huafa Property Co., Ltd|
|Huafa Lease|Refers to|Shenzhen Huafa Property Lease Management Co., Ltd|
|Huafa Trade|Refers to|Wuhan Zhongheng Huafa Trade Co., Ltd.|
|||Wuhan Zhongheng New Science & Technology Industrial Group|
|Wuhan Zhongheng Group|Refers to||
|||Co., Ltd.|
|HK Yutian|Refers to|Hong Kong Yutian International Investment Co., Ltd.|
|Hengsheng Photoelectricity|Refers to|Wuhan Hengsheng Photoelectricity Industry Co., Ltd.|
|Hengsheng Yutian|Refers to|Wuhan Hengsheng Yutian Industrial Co., Ltd.|
|Yutian Henghua|Refers to|Shenzhen Yutian Henghua Co., Ltd.|
|Huafa Hengtian|Refers to|Shenzhen Huafa Hengtian Co., Ltd.|
|Huafa Hengtai|Refers to|Shenzhen Huafa Hengtai Co., Ltd.|
|Shenzhen Vanke|Refers to|Shenzhen Vanke Real Estate Co., Ltd.|
|Vanke Guangming|Refers to|Shenzhen Vanke Guangming Real Estate Development Co., Ltd|

SEMI-ANNUAL REPORT 2019 Section II. Company Profile and Main Financial Indexes
I. Company profile
||||||
|-|-|-|-|-|
|Short form of the stock||Shen Huafa A, Shen Huafa B|Stock code|000020, 200020|
|Short form of the stock after|||||
|||N/A|||
|changed (if applicable)|||||
|Stock exchange for listing|Shenzhen Stock Exchange||||
|Name of the Company (in|深圳中恒华发股份有限公司||||
|Chinese)|||||
|Short form of the Company|||||
|||深华发|||
|(in Chinese)|||||
|Foreign name of the|||||
|||SHENZHEN ZHONGHENG HUAFA CO., LTD.|||
|Company (if applicable)|||||
|Abbr. of the foreign name|||||
|||N/A|||
|(if applicable)|||||
|Legal representative|Li Zhongqiu||||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Rep. of security affairs|
|Name|Yang Bin|Niu Zhuo|
||33/F, No. 2 Building of Dachong|33/F, No. 2 Building of Dachong|
|Contact add.|Business Center, Nanshan District,|Business Center, Nanshan District,|
||Shenzhen|Shenzhen|
|Tel.|0755-86360201|0755-86360201|
|Fax.|0755-86360206|0755-86360206|
|E-mail|hwafainvestor@126.com.cn|hwafainvestor@126.com.cn|

III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not
□ Applicable√ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2018.
SEMI-ANNUAL REPORT 2019 2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable√ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation place for semi-annual report have no change in reporting period, found more details in Annual Report 2018
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes√No
|||||||
|-|-|-|-|-|-|
||||||Changes over last year (+,|
|||Current period||Same period last year||
||||||-)|
|Operating income (RMB)|339,190,174.05||340,984,843.24||-0.53%|
|Net profit attributable to shareholders of|2,580,411.13||2,793,133.60|||
||||||-7.62%|
|the listed company (RMB)||||||
|Net profit attributable to shareholders of||||||
|the listed company after deducting||2,197,912.06||2,053,467.02|7.03%|
|non-recurring gains and losses (RMB)||||||
|Net cash flow arising from operating|45,194,220.56||-26,671,325.63|||
|activities (RMB)||||||
|Basic earnings per share (RMB/Share)|0.0091||0.0099||-8.08%|
|Diluted earnings per share (RMB/Share)|0.0091||0.0099||-8.08%|
|Weighted average ROE||0.79%||0.87%|-0.08%|
||||||Changes over period-end|
|||Period-end||Period-end of last year||
||||||of last year (+, -)|
|Total assets (RMB)|623,980,175.29||617,090,153.46||1.12%|
|Net assets attributable to shareholder of|326,548,411.87||323,968,000.74|||
||||||0.80%|
|listed company (RMB)||||||

V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
SEMI-ANNUAL REPORT 2019 2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
|Item||Amount|Note|
|Gains/losses from the disposal of non-current asset (including|129,039.57|||
|the write-off that accrued for impairment of assets)||||
|Governmental subsidy reckoned into current gains/losses (not|223,300.00|||
|including the subsidy enjoyed in quota or ration according to||||
|national standards, which are closely relevant to enterprise’s||||
|business)||||
|Gains/losses from entrusted investment or assets management|74,936.14|||
|Other non-operating income and expenditure except for the|9,458.00|||
|aforementioned items||||
|Less: Impact on income tax|54,234.64|||
|Total|382,499.07||--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss
SEMI-ANNUAL REPORT 2019 Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
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, POLYLON (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.
II. Major changes in main assets
1. Major changes in main assets
|||
|-|-|
|Major assets|Note of major changes|
|Equity assets|N/A|
|Fixed assets|N/A|
|Intangible assets|N/A|
|Construction in progress|N/A|

2. Main overseas assets
□ Applicable√ Not applicable
III. Core competitiveness analysis
Whether the company needs to comply with the disclosure requirements of the particular industry
No
All industrial lands of the Company located in Shenzhen were taken into the first batch of plan under 2010 Shenzhen urban upgrade planning. In the future, development and operation of self-owned land resources would become the income source of the Company on a long-term and stable basis.
SEMI-ANNUAL REPORT 2019 Section IV. Discussion and Analysis of Operation
I. Introduction
After years of development, the company has gradually formed two main businesses of industrial business and property management business. Among them, the industrial business is the production and sales of
injection-molded parts, Styrofoam (lightweight material packaging), and liquid crystal display. The property management business is mainly for the rental of self-owned properties.
In the first half of 2019, the company achieved operation revenue of 339.19 million yuan, with a y-o-y declined of0.53%; operating profit of 295 million yuan, with a y-o-y growth of16.15%; net profit of 2.58 million yuan, with a y-o-y declined of7.62%; operation revenue from industry production has 318.76 million yuan in the first half of the year, with a y-o-y declined of1.43%, operating profit of 1.69 million yuan, with a y-o-y declined of68.15%; net profit of 1.6358 million yuan, with a y-o-y declined of68.24%; the revenue earns from property leasing in first half year comes to 18.91 million yuan, an increase of21.20% over the same period last year, and the operating profit was 1.26 million yuan, with a y-o-y growth of 3.93 million yuan (from the same period last year to (2.67) million yuan); the net profit was 94.58 million yuan, and from the same period last year to (1.72) million yuan. II. Main business analysis
See the “I-Introduction” in “Discussion and Analysis of Operation”
Change of main financial data on a y-o-y basis
In RMB
||||||||
|-|-|-|-|-|-|-|
|||Current period||Same period last year|y-o-y changes|Reasons|
|Operating revenue|339,190,174.05||340,984,843.24||-0.53%||
|Operating cost|297,580,208.34||302,582,979.44||-1.65%||
|Sales expenses|9,130,380.22||8,433,363.31||8.26%||
|Administrative|19,616,991.39||20,400,985.42||||
||||||-3.84%||
|expenses|||||||
|Financial expenses|5,068,371.24||5,447,070.22||-6.95%||
||603,910.08||463,831.41|||Increase in property|
|Income tax expenses|||||30.20%||
|||||||rental income|
|Net cash flow from|45,194,220.56||-26,671,325.63|||Note receivable are|
|operating activities||||||collected at maturity|
||-3,964,794.99||-6,545,541.50|||Last period, invest in|
|Net cash flow from|||||||
|||||||new workshop and|
|investment activities|||||||
|||||||replace old production|

SEMI-ANNUAL REPORT 2019
|||||
|-|-|-|-|
||||equipment|
||-32,459,238.76|-21,012,832.62|Short-term borrowing|
|Net cash flow from||||
||||decreased in the|
|financing activities||||
||||current period|
|Net increase of cash|8,869,836.86|-54,379,579.55|Note receivable are|
|and cash equivalent|||collected at maturity|

 Major changes on profit composition or profit resources in reporting period
□ Applicable√ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
Constitution of main business
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Increase/decrea|
|||||Increase/decrea|Increase/decrea||
||Operating||Gross profit|||se of gross|
|||Operating cost||se of operating|se of operating||
||revenue||ratio|||profit ratio|
|||||revenue y-o-y|cost y-o-y||
|||||||y-o-y|
|According to industries|||||||
|Display|164,964,344.94|156,855,763.07|4.92%|32.94%|34.97%|-1.42%|
|Plastic|||||||
|injection|111,142,622.51|97,350,242.91|12.41%|-27.04%|-30.76%|4.70%|
|hardware|||||||
|Styrofoam|34,292,527.88|31,279,310.58|8.79%|-17.96%|-18.19%|0.26%|
|According to products|||||||
|Display|164,964,344.94|156,855,763.07|4.92%|32.94%|34.97%|-1.42%|
|Plastic|||||||
|injection|111,142,622.51|97,350,242.91|12.41%|-27.04%|-30.76%|4.70%|
|hardware|||||||
|Styrofoam|34,292,527.88|31,279,310.58|8.79%|-17.96%|-18.19%|0.26%|
|According to region|||||||
|Hong Kong and|||||||
||63,962,270.03|60,275,954.47|5.76%|-17.18%|-18.18%|1.15%|
|Taiwan|||||||
|Central China|158,337,367.02|140,986,540.09|10.96%|-20.17%|-22.39%|2.55%|
|East China|88,099,858.28|84,222,822.00|4.40%|106.63%|112.14%|-2.48%|

 III. Analysis of the non-main business
□Applicable√ Not applicable
SEMI-ANNUAL REPORT 2019 IV. Assets and liability
1. Major changes of assets composition
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Period-end||Period-end last year||||
|||||||Ratio||
||||Ratio in||Ratio in||Notes of major changes|
|||Amount||Amount||changes||
||||total assets||total assets|||
||47,981,541.61|||65,403,374.3||||
|Monetary fund|||7.69%||10.55%|-2.86%||
|||||0||||
|Account|149,540,866.46|||182,542,130.||||
||||23.97%||29.45%|-5.48%||
|receivable||||75||||
|||86,709,541.7||37,519,314.3||||
|Inventory|||13.90%||6.05%|7.85%||
|||6||4||||
|Investment real|49,817,157.72|||29,404,574.4||||
||||7.98%||4.74%|3.24%||
|estate||||4||||
|Long-term||||||||
|equity|||0.00%||0.00%|0.00%||
|investment||||||||
||185,008,101.52|||108,018,926.||||
|Fix assets|||29.65%||17.43%|12.22%||
|||||67||||
|Construction in|7,552,776.46|||||||
||||1.21%|654,356.00|0.11%|1.10%||
|process||||||||
|Short-term|134,676,280.00|||85,012,392.0||||
||||21.58%||13.72%|7.86%||
|loans||||0||||

2. Assets and liability measured by fair value
□ Applicable√Not applicable
3. Assets right restriction till end of reporting period
||||
|-|-|-|
|Item|Ending book value|Restriction reasons|
|||B a n k a c c e p t a n c e d e p o s it a n d f r o zen by court|
|Monetary Fund|||
||11,150,495.15||
|Notes receivable||Pledge|
||3,866,647.92||
|Accounts receivable|14,609,128.53||
|||Pledge|
|Investment real estate||Bank loan secured|
||37,728,701.12||

SEMI-ANNUAL REPORT 2019
||||
|-|-|-|
|Fixed assets||Bank loan secured|
||42,487,962.49||
|||C o u r t c l o s u r e|
|Liquidation of fixed assets|||
||92,857,471.69||
|Intangible assets||Bank loan secured|
||36,306,830.17||
|||- -|
|Total|||
||239,007,237.07||

V. Investment analysis
1. Overall situation
□ Applicable√Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable√Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable√ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable√Not applicable
The Company has no securities investment in the Period.
(2) Derivative investment
□ Applicable√Not applicable
The Company has no derivatives investment in the Period.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable√Not applicable
The Company had no sales of major assets in the reporting period.
SEMI-ANNUAL REPORT 2019 2. Sales of major equity
□ Applicable√Not applicable
VII. Analysis of main holding company and stock-jointly companies
√Applicable□ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over10%
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company||Main|Register|Total||Operating|Operatin||
||Type||||Net Assets|||Net profit|
|name||business|capital|assets||revenue|g profit||
|||R&D,|||||||
|||production|||||||
|||and sales|||||||
|||of the|||||||
|Hengfa|||||||||
|||products as|181,643,11|472,002,52|222,311,68|318,755,72|1,694,08||
|Technolog|Subsidiary|||||||1,635,779.35|
|||well as|1.00|1.79|5.87|6.11|8.29||
|y Company|||||||||
|||import &|||||||
|||export|||||||
|||business|||||||
|||etc.|||||||
|||Leasing|||||||
|Huafa||and|||||||
||||1,000,000.|18,582,268|-1,921,466.|2,393,312.|400,723.||
|Property|Subsidiary|manageme||||||300,542.58|
||||00|.84|74|63|44||
|Company||nt of own|||||||
|||property|||||||
|||Leasing|||||||
|Huafa||and|||||||
||||1,000,000.|1,900,692.|-5,026,990.||||
|Lease|Subsidiary|manageme||||0.00|0.00|0.00|
||||00|20|71||||
|Company||nt of own|||||||
|||property|||||||
|||Leasing|||||||
|Huafa||and|||||||
||||1,000,000.||||||
|Hengtian|Subsidiary|manageme||995,680.41|995,680.41|0.00|-701.25|-701.25|
||||00||||||
|Company||nt of own|||||||
|||property|||||||
|||Leasing|||||||
|Huafa||and|||||||
||||1,000,000.||||||
|Hengtai|Subsidiary|manageme||996,716.29|996,716.29|0.00|-396.39|-396.39|
||||00||||||
|Company||nt of own|||||||
|||property|||||||

Particular about subsidiaries obtained or disposed in report period
SEMI-ANNUAL REPORT 2019□Applicable√ Not applicable
Explanation of main holding company and stock-jointly companies
Nil
VIII. Structured vehicle controlled by the Company
□ Applicable√Not applicable
IX. Prediction of business performance from January– September 2019
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable√ Not applicable
X. Risks and countermeasures
1. Operational risks of industrial business: industrial restructuring, fluctuations in raw material prices, decline in market demand, and frustration of new product promotion.
Countermeasures: continue to open up the market, maintain the existing customers, positively develop new customers, and continue to improve production efficiency;
2. Financial risks: large demands for funds, substantial increase or decrease in financial costs caused by exchange rate fluctuations, and bank credit constraints caused by changes in financial costs and so on.
Countermeasures: pay close attention to macroeconomic policy trends, actively expand the financing channels, establish a virtuous circle mechanism for funds, improve the service efficiency, and use financial instruments to avoid exchange rate risks.
SEMI-ANNUAL REPORT 2019 Section V. Important Events
I. In the report period, the Company held annualshareholders’ general meeting and extraordinaryshareholders’ general meeting
1. AnnualShareholders’ General Meeting in the report period
|||||||
|-|-|-|-|-|-|
|||Ratio of investor|||Index of|
|Session of meeting|Type||Date|Date of disclosure||
|||participation|||disclosure|
||||||http://www.cninfo.|
||||||com.cn/new/disclo|
||||||sure/detail?plate=s|
|Annual General|||||zse&stockCode=0|
||AGM|48.02%|2019-05-21|2019-05-22||
|Meeting of 2017|||||00020&announce|
||||||mentId=12062889|
||||||41&announcement|
||||||Time=2019-05-22|

 2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore□ Applicable√Not applicable
II. Profit distribution plan in the period and capitalizing of common reserves plan
□ Applicable√Not applicable
The Company plans not to distribute cash dividend and bonus for the semi-annual, and no capitalizing of common reserves either. III. Commitments that the actual controller, shareholders, related party, offeror and committed party as the Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
√Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||Type of|||||
||||Content of||||
|||||Commitment date|Commitmen|Implementa|
|Commitments|Promise|commitmen|commitmen||||
||||||t term|tion|
|||ts|ts||||
|Commitments for share reform|||||||
|Commitments in report of|||||||
|acquisition or equity change|||||||
|Commitments in assets|||||||

SEMI-ANNUAL REPORT 2019
|||||||
|-|-|-|-|-|-|
|reorganization||||||
|Commitments make in initial public||||||
|offering or re-financing||||||
|Equity incentive commitment||||||
|||Promise to||||
|||increasing||||
|||shares of||||
|||holding as||||
|||2.83 million||||
|||||In 6 months||
||Wuhan|shares of||||
|||||since the|Performanc|
||Zhongheng|B-stock of|2017-11-20|||
|||||date of|e Finished|
||Group|the||||
|||||notification||
|||Company in||||
|||6 months||||
|||since the||||
|||letter||||
|Other commitments for medium||||||
|||delivery||||
|and small shareholders||||||
|||Promise to||||
|||increasing||||
|||shares of||||
|||holding as||||
|||2.8 million||In 6 months||
||Wuhan|||||
|||shares of||since the|Performanc|
||Zhongheng||2017-11-28|||
|||A-stock at||date of|e Finished|
||Group|||||
|||least in 6||notification||
|||months||||
|||since the||||
|||letter||||
|||delivery||||
|Completed on time(Y/N)|Yes|||||
|If the commitments are not fulfilled||||||
|on time, shall explain the specify|Not applicable|||||
|reason and the next work plan||||||

IV. Appointment and non-reappointment (dismissal) of CPA
Whether the financial report has been audited or not
□Yes√no
The company's semi-annual report has not been audited.
SEMI-ANNUAL REPORT 2019 V. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion” that issued by CPA
□ Applicable√Not applicable
VI. Explanation from the Board for “Qualified Opinion” of lastyear’s
□ Applicable√Not applicable
VII. Bankruptcy reorganization
□ Applicable√Not applicable
No bankruptcy reorganization for the Company in reporting period
VIII. Lawsuits
Significant lawsuits and arbitration
√Applicable □Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
||Amount of||Advances|||||
|The basic||||The results and||||
||money|Predicted|in||Execution of|||
|situation of||||effects of||Disclosure|Disclosur|
||involved (in|liabilities|litigation||the litigation|||
|litigation||||litigation||date|e index|
||10 thousand|(Y/N)|(Arbitrati||(Arbitration)|||
|(Arbitration)||||(Arbitration)||||
||Yuan)||on)|||||
||||||||http://ww|
||||Ruling on|||||
|In September|||||||w.cninfo.|
||||16 August|||||
|2016, Wuhan|||||||com.cn/c|
||||2017; put|||||
|Zhongheng|||||||ninfo-new|
||||forward|||||
|Group Co., Ltd.|||||||/disclosur|
||||the|||||
|and the|||||||e/szse_ma|
||||applicatio|||||
|Company and|||||||in/bulletin|
||||n for|||||
|Shenzhen Vanke|||||||_detail/tru|
||||dismantli|||||
|were applied for|||||||e/120440|
||||ng by the|||||
|arbitration due to||||Found more in|||6606?ann|
||||Company|||||
|the dispute case|46,460|No||announcement|Implementing|2018-02-09|ounceTim|
||||and|||||
|of “Contract for||||of the Company|||e=2018-0|
||||controllin|||||
|the Cooperative|||||||2-09 ；|
||||g|||||
|Operation of the|||||||http://ww|
||||sharehold|||||
|Old Projects at|||||||w.cninfo.|
||||er, the|||||
|Huafa Industrial|||||||com.cn/n|
||||applicatio|||||
|Park, Gongming|||||||ew/disclo|
||||n was|||||
|Street,|||||||sure/detai|
||||rejected|||||
|Guangming New|||||||l?plate=sz|
||||by the|||||
|District”.|||||||se&stock|
||||court|||||
||||||||Code=00|

SEMI-ANNUAL REPORT 2019
|||||||||
|-|-|-|-|-|-|-|-|
||||||||0020&an|
||||||||nounceme|
||||||||ntId=120|
||||||||5326846|
||||||||&announ|
||||||||cementTi|
||||||||me=2018|
||||||||-08-25|
|In March 2016,||||||||
|the Company||||||||
|and HUAFA||||||||
|Science &||||||||
|Technology suit||||||||
|against the||||||||
|follow||||||||
|companies,||||||||
|including||||||||
|Shenzhen||||||||
|Huayongxing||||||||
||||||||http://ww|
|Environmental||||||||
||||||||w.cninfo.|
|Technology Co.,|||The|||||
||||||||com.cn/c|
|Ltd., Shenzhen|||judgment|||||
||||||||ninfo-new|
|Guangyong|||of 2nd trial|||||
||||||||/disclosur|
|Breadboard Co.,|||has been|||||
||||||||e/szse_ma|
|Ltd., Shenzhen|||issued,|||||
||||||||in/bulletin|
|Mingyi|1,964.92|No|and has|Ended|Ended|2016-09-14||
||||||||_detail/tru|
|Electronic Co.,|||applied|||||
||||||||e/120270|
|Ltd., Shenzhen|||for|||||
||||||||2423?ann|
|Ouruilai|||compulso|||||
||||||||ounceTim|
|Technology Co.,|||ry|||||
||||||||e=2016-0|
|Ltd and|||execution|||||
||||||||9-14|
|Shenzhen||||||||
||||||||07:41|
|Kangzhengxin||||||||
|Technology Co.,||||||||
|Ltd., for arrears||||||||
|of rent. and||||||||
|refuse to move||||||||
|the site, forcibly||||||||
|occupied switch||||||||
|board room and||||||||
|other power unit||||||||
|under the name||||||||
|of the Company||||||||

SEMI-ANNUAL REPORT 2019
|||||||||
|-|-|-|-|-|-|-|-|
|In March 2016,||||||||
||||The|||||
|the Company|||||||http://ww|
||||second|||||
|and HUAFA|||||||w.cninfo.|
||||trial|||||
|Property suit|||||||com.cn/c|
||||decides|||||
|against Shenzhen|||||||ninfo-new|
||||the|||||
|Huayongxing|||||||/disclosur|
||||Company|||||
|Environmental|||||||e/szse_ma|
||||wins the|||||
|Technology Co.,|||||||in/bulletin|
||947.26|No|lawsuit on|Implementing|Implementing|2016-09-14||
|Ltd., and|||||||_detail/tru|
||||15 March|||||
|Shenzhen|||||||e/120270|
||||2018, and|||||
|Yidaxin|||||||2423?ann|
||||has|||||
|Technology Co.,|||||||ounceTim|
||||applied|||||
|Ltd. for contract|||||||e=2016-0|
||||for|||||
|violation and|||||||9-14|
||||enforcem|||||
|refuse to move|||||||07:41|
||||ent|||||
|the site||||||||
||||||||http://ww|
||||||||w.cninfo.|
|Application for||||||||
||||||||com.cn/n|
|arbitration in||||||||
||||||||ew/disclo|
|case of contract||||||||
||||||||sure/detai|
|dispute between||||||||
||||Arbitratio||||l?plate=sz|
|the V&T||||||||
||||n has||||se&stock|
|(Shenzhen) Law||||||||
||||been|To be|To be||Code=00|
|Firm and|1,940.2|No||||2018-11-14||
||||heard for|adjudicated|adjudicated||0020&an|
|Shenzhen||||||||
||||adjudicati||||nounceme|
|Zhongheng||||||||
||||on||||ntId=120|
|Huafa Co., Ltd.||||||||
||||||||5602053|
|and Wuhan||||||||
||||||||&announ|
|Zhongheng||||||||
||||||||cementTi|
|Group||||||||
||||||||me=2018|
||||||||-11-14|

 Other lawsuits
□Applicable√ Not applicable
IX. Penalty and rectification
□Applicable√ Not applicable
The Company has no penalty and rectification in the period
X. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable√Not applicable
SEMI-ANNUAL REPORT 2019 XI. Implementation of thecompany’s stock incentive plan, employee stock ownership plan or other employee incentives
□ Applicable√Not applicable
The Company had no stock incentive plan, employee stock ownership plan or other employee incentive in the reporting period. XII. Major related transaction
1. Related transaction with routine operation concerned
√Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Whet|||||
|||||||||Tradi||||||
||||||||||her|||||
|||||||Relate||ng||||||
||||||||||over||Availa|||
|||||||d|Propo|limit||Cleari|||Inde|
|||Type|Conte|||transa|||the|ng|ble|Date||
|||of|nt of|Pricin|Relate|ction|rtion|appro||form|||x of|
|Relate|Relati||||d||in||appro||simila|of||
|d|onshi|relate|relate|g|transa|amou|simila|ved||for|||discl|
|||d|d|princi||nt (in|||ved|relate|r|disclo||
|party|p|transa|transa|ple|ction|10|r|(in 10||d|||osur|
||||||price||transa||limite||marke|sure||
|||ction|ction|||thousa|ctions|thousa||transa|||e|
|||||||nd|||d or|ction|t price|||
|||||||Yuan)||nd||||||
||||||||||not|||||
|||||||||Yuan)||||||
||||||||||(Y/N)|||||
||||||||||||||http:|
||||||||||||||//w|
||||||||||||||ww.|
||||||||||||||cnin|
||||||||||||||fo.c|
||||||||||||||om.c|
||||||||||||||n/ne|
||||||||||||||w/di|
||Sharin||||||||||||sclo|
|||||Synch||||||||||
||g the||Purch||||||||||sure/|
|||||ronize||||||Telegr||||
||same||asing||||||||||detai|
|HK||Purch||d with|5,531.|5,531.|35.26|16,77||aphic||2019-||
||contro||LCD||||||N||——||l?pla|
|Yutian||ase||the|49|49|%|8.09||transf||04-30||
||lling||monit||||||||||te=|
|||||marke||||||er||||
||shareh||ors||||||||||&or|
|||||t||||||||||
||older||||||||||||gId=|
||||||||||||||gssz|
||||||||||||||000|
||||||||||||||002|
||||||||||||||0&st|
||||||||||||||ock|
||||||||||||||Cod|
||||||||||||||e=0|
||||||||||||||000|

SEMI-ANNUAL REPORT 2019
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||||20&|
||||||||||||||anno|
||||||||||||||unce|
||||||||||||||men|
||||||||||||||tId=|
||||||||||||||120|
||||||||||||||615|
||||||||||||||798|
||||||||||||||4&a|
||||||||||||||nno|
||||||||||||||unce|
||||||||||||||men|
||||||||||||||tTim|
||||||||||||||e=2|
||||||||||||||019-|
||||||||||||||04-3|
||||||||||||||0|
||||||||||||The||http:|
||||||||||||avera||//w|
||||||||||||ge||ww.|
|||||Confir||||||||||
||||||||||||marke||cnin|
|||||med||||||||||
||||||||||||t price||fo.c|
|||||with||||||||||
||||||||||||refers||om.c|
|||||1% of||||||||||
||||||||||||to the||n/ne|
|||||curren||||||||||
||||||||||||price||w/di|
|||||t||||||||||
||||||||||||of||sclo|
|||||marke||||||||||
||||||||||||same||sure/|
|||||t||||||||||
||Sharin|||||||||||||
||||||||||||specif||detai|
|||||avera||||||||||
|Hengs|g the||Purch||||||||icatio||l?pla|
|||||ge||||||Telegr||||
|heng|same||asing||||||||ns||te=|
|||Purch||price|4,735.|4,735.|30.19|12,32||aphic||2019-||
|Photo|contro||LCD||||||N||which||&or|
|||ase||in|80|8|%|6.76||transf||04-30||
|electri|lling||monit||||||||is||gId=|
|||||princi||||||er||||
|city|shareh||ors||||||||search||gssz|
|||||ple,||||||||||
||older||||||||||ed||000|
|||||and||||||||||
||||||||||||from||002|
|||||refer||||||||||
||||||||||||throug||0&st|
|||||to||||||||||
||||||||||||h the||ock|
|||||both||||||||||
||||||||||||world||Cod|
|||||their||||||||||
||||||||||||famou||e=0|
|||||bargai||||||||||
||||||||||||s||000|
|||||ning||||||||||
||||||||||||profes||20&|
|||||power||||||||||
||||||||||||sional||anno|
||||||||||||marke||unce|
||||||||||||t||men|

SEMI-ANNUAL REPORT 2019
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||surve||tId=|
||||||||||||y||120|
||||||||||||comp||615|
||||||||||||any||798|
||||||||||||websit||4&a|
||||||||||||e||nno|
||||||||||||http://||unce|
||||||||||||www.||men|
||||||||||||witsvi||tTim|
||||||||||||ew.co||e=2|
||||||||||||m||019-|
||||||||||||recog||04-3|
||||||||||||nized||0|
||||||||||||author|||
||||||||||||ity in|||
||||||||||||the|||
||||||||||||indust|||
||||||||||||ry and|||
||||||||||||LCD|||
||||||||||||profes|||
||||||||||||sional|||
||||||||||||marke|||
||||||||||||t|||
||||||||||||surve|||
||||||||||||y|||
||||||||||||comp|||
||||||||||||any|||
||||||||||||websit|||
||||||||||||e|||
||||||||||||http://|||
||||||||||||www.|||
||||||||||||witsvi|||
||||||||||||ew.co|||
||||||||||||m|||
|||||Accor|||||||||http:|
|||||ding|||||||||//w|
||Sharin|||||||||||||
|||||to the|||||||||ww.|
|Hengs|g the||Purch|||||||||||
|||||order||||||Telegr|||cnin|
|heng|same||asing|||||||||||
|||Purch||price,|1,037.|1,037.||8,217.||aphic||2019-|fo.c|
|Photo|contro||LCD||||6.61%||N||——|||
|||ase||deduc|41|41||84||transf||04-30|om.c|
|electri|lling||monit|||||||||||
|||||ted 1||||||er|||n/ne|
|city|shareh||ors|||||||||||
|||||Yuan|||||||||w/di|
||older|||||||||||||
|||||each|||||||||sclo|
|||||for|||||||||sure/|

SEMI-ANNUAL REPORT 2019
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||operat|||||||||detai|
|||||ion|||||||||l?pla|
|||||charge|||||||||te=|
||||||||||||||&or|
||||||||||||||gId=|
||||||||||||||gssz|
||||||||||||||000|
||||||||||||||002|
||||||||||||||0&st|
||||||||||||||ock|
||||||||||||||Cod|
||||||||||||||e=0|
||||||||||||||000|
||||||||||||||20&|
||||||||||||||anno|
||||||||||||||unce|
||||||||||||||men|
||||||||||||||tId=|
||||||||||||||120|
||||||||||||||615|
||||||||||||||798|
||||||||||||||4&a|
||||||||||||||nno|
||||||||||||||unce|
||||||||||||||men|
||||||||||||||tTim|
||||||||||||||e=2|
||||||||||||||019-|
||||||||||||||04-3|
||||||||||||||0|
||||||||||||||http:|
||||||||||||||//w|
||||||||||||||ww.|
|||||Accor||||||||||
||||Sales|||||||||||
||||||||||||||cnin|
||Sharin|||ding||||||||||
||||LCD||||||||||fo.c|
||g the|||to the||||||||||
||||overal|||||||Telegr|||om.c|
||same|||custo||||||||||
|HK|||l||6,413.|6,413.|38.87|23,96||aphic||2019-|n/ne|
||contro|Sales||mer|||||N||——|||
|Yutian|||monit||62|62|%|8.7||transf||04-30|w/di|
||lling|||sales||||||||||
||||or|||||||er|||sclo|
||shareh|||order||||||||||
||||machi||||||||||sure/|
||older|||price||||||||||
||||ne set||||||||||detai|
|||||sure||||||||||
||||||||||||||l?pla|
||||||||||||||te=|
||||||||||||||&or|

SEMI-ANNUAL REPORT 2019
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||||gId=|
||||||||||||||gssz|
||||||||||||||000|
||||||||||||||002|
||||||||||||||0&st|
||||||||||||||ock|
||||||||||||||Cod|
||||||||||||||e=0|
||||||||||||||000|
||||||||||||||20&|
||||||||||||||anno|
||||||||||||||unce|
||||||||||||||men|
||||||||||||||tId=|
||||||||||||||120|
||||||||||||||615|
||||||||||||||798|
||||||||||||||4&a|
||||||||||||||nno|
||||||||||||||unce|
||||||||||||||men|
||||||||||||||tTim|
||||||||||||||e=2|
||||||||||||||019-|
||||||||||||||04-3|
||||||||||||||0|
||||||||||||||http:|
||||||||||||||//w|
||||||||||||||ww.|
||||||||||||||cnin|
||||||||||||||fo.c|
|||||Accor||||||||||
||||||||||||||om.c|
||Sharin|||ding||||||||||
||||||||||||||n/ne|
|Hengs|g the||LCD|to the||||||||||
|||||||||||Telegr||||
||||||||||||||w/di|
|heng|same||displa|custo||||||||||
||||||1,218.|1,218.||3,971.||aphic||2019-|sclo|
|Photo|contro|Sales|y|mer|||7.77%||N||——|||
||||||41|41||96||transf||04-30|sure/|
|electri|lling||screen|sales||||||||||
|||||||||||er|||detai|
|city|shareh||/LCD|order||||||||||
||||||||||||||l?pla|
||older|||price||||||||||
||||||||||||||te=|
|||||sure||||||||||
||||||||||||||&or|
||||||||||||||gId=|
||||||||||||||gssz|
||||||||||||||000|
||||||||||||||002|

SEMI-ANNUAL REPORT 2019
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||0&st|
|||||||||||ock|
|||||||||||Cod|
|||||||||||e=0|
|||||||||||000|
|||||||||||20&|
|||||||||||anno|
|||||||||||unce|
|||||||||||men|
|||||||||||tId=|
|||||||||||120|
|||||||||||615|
|||||||||||798|
|||||||||||4&a|
|||||||||||nno|
|||||||||||unce|
|||||||||||men|
|||||||||||tTim|
|||||||||||e=2|
|||||||||||019-|
|||||||||||04-3|
|||||||||||0|
||||18,93||65,26||||||
|Total|--|--||--||--|--|--|--|--|
||||6.73||3.35||||||
|Detail of sales return with major|||||||||||
||N/A||||||||||
|amount involved|||||||||||
||In the reporting, Hengfa Technology purchased LCD display screen from HK Yutian with||||||||||
||US$ 8.1662 million approximately, 33.33% of the annual amount predicted at the||||||||||
||beginning of the year; purchased LCD display screen from Hengsheng Photoelectricity||||||||||
|Report the actual implementation|||||||||||
||with US $ 6.8918 million approximately, 38.29% of the annual amount predicted at the||||||||||
|of the daily related transactions|||||||||||
||beginning of the year; purchasing LCD from Hengsheng Photoelectricity with about US||||||||||
|which were projected about their|||||||||||
||$ 1.5097 million, 12.58% of the annual amount predicted at the beginning of the year; sold||||||||||
|total amount by types during the|||||||||||
||LCD whole machine to HK Yutian with US $ 9.4896 million approximately, 27.11% of the||||||||||
|reporting period (if applicable)|||||||||||
||annual amount predicted at the beginning of the year. Sold LCD (display screen) to||||||||||
||Hengsheng Photoelectricity with US $ 1.7731 million approximately, 30.57% of the annual||||||||||
||amount predicted at the beginning of the year.||||||||||
|Reasons for major differences|||||||||||
|between trading price and market|Not applicable||||||||||
|reference price (if applicable)|||||||||||

2. Related transactions by assets acquisition and sold
□Applicable√ Not applicable
SEMI-ANNUAL REPORT 2019 No above-mentioned transactions occurred
3. Main related transactions of mutual investment outside
□ Applicable√Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable√Not applicable
No contact of related credit and debt in the period
5. Other related transactions
□ Applicable√Not applicable
The Company had no other significant related transactions in reporting period.
XIII. Non-operational fund occupation from controlling shareholders and its related party□ Applicable√Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable√Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable√Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable√Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√Applicable□ Not applicable
SEMI-ANNUAL REPORT 2019 (1) Guarantees
In 10 thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)|||||||||
||RelatedAnnouncementdisclosure date||Actual date of|||||Guaran|
|Name of the|||happening|Actual|||Implem|tee for|
|||Guarantee limit|||Guarantee|Guarantee|||
|Company|||(Date of|guarantee|||ented|related|
||||||type|term|||
|guaranteed|||signing|limit|||(Y/N)|party|
||||agreement)|||||(Y/N)|
|Guarantee of the Company and the subsidiaries|||||||||
||RelatedAnnouncementdisclosure date||Actual date of|||||Guaran|
|Name of the|||happening|Actual|||Implem|tee for|
|||Guarantee limit|||Guarantee|Guarantee|||
|Company|||(Date of|guarantee|||ented|related|
||||||type|term|||
|guaranteed|||signing|limit|||(Y/N)|party|
||||agreement)|||||(Y/N)|
|Wuhan Hengfa|||||Joint||||
||2019-08-27||||||||
|Technology Co.,||30,000||2,267.63|liability|One year|N|Y|
|Ltd.|||||guarantee||||
|||||Total amount of actual|||||
|Total amount of approvingguarantee for subsidiaries inreport period (B1)|||||||||
|||||occurred guarantee for|||||
|||30,000||||5,926.83|||
|||||subsidiaries in report period|||||
|||||(B2)|||||
|Total amount of approvedguarantee for subsidiaries atthe end of reporting period(B3)||||Total balance of actual|||||
|||||guarantee for subsidiaries at|||||
|||30,000||||2,267.63|||
|||||the end of reporting period|||||
|||||(B4)|||||
|Guarantee of the subsidiaries for the subsidiaries|||||||||
||RelatedAnnouncementdisclosure date||Actual date of|||||Guaran|
|Name of the|||happening|Actual|||Implem|tee for|
|||Guarantee limit|||Guarantee|Guarantee|||
|Company|||(Date of|guarantee|||ented|related|
||||||type|term|||
|guaranteed|||signing|limit|||(Y/N)|party|
||||agreement)|||||(Y/N)|
|Total amount of guarantee of the Company (total of three abovementioned guarantee)|||||||||
|Total amount of approving||||Total amount of actual|||||
|guarantee in report period||30,000||occurred guarantee in report||5,926.83|||
|(A1+B1+C1)||||period (A2+B2+C3)|||||
|Total amount of approved||||Total balance of actual|||||
|guarantee at the end of report||30,000||guarantee at the end of||2,267.63|||
|period (A3+B3+C2)||||report period (A4+B4+C4)|||||
|The proportion of the total amount of actually guarantee in|||||||||
|||||6.94%|||||
|the net assets of the Company (that is A4+ B4+C4)|||||||||

SEMI-ANNUAL REPORT 2019
|||
|-|-|
|Including:||
|Explanations on possibly bearing joint and several||
|liquidating responsibilities for undue guarantees (if|N/A|
|applicable)||
|Explanations on external guarantee against regulated||
||N/A|
|procedures (if applicable)||

Explanation on compound guarantee
Nil
(2) Guarantee outside against the regulation
□Applicable√ Not applicable
No guarantee outside against the regulation in Period.
3. Other material contracts
□ Applicable√Not applicable
No other material contracts for the Company in reporting period.
XV. Social responsibility
1. Material environmental protection
The listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department Not applicable
Listed companies and their subsidiaries do not belong to key pollutant discharge units announced by environmental protection departments.
2.Execution of social responsibility of targeted poverty alleviation
(1) targeted poverty alleviation
(2) Summary of targeted poverty alleviation
(3) Performance of the targeted poverty alleviation
||||
|-|-|-|
||Unit of||
|Index||Quantity /implementation|
||measure||
|I. Overall condition|——|——|
|II. Poverty alleviation by items|——|——|
|1.Industry development|——|——|

SEMI-ANNUAL REPORT 2019
||||
|-|-|-|
|2.Shift employment|——|——|
|3. Relocating in other places|——|——|
|4. Education|——|——|
|5. Health|——|——|
|6.Ecological protection|——|——|
|7. Reveal all the details|——|——|
|8. Society|——|——|
|9.Other|——|——|
|III. Award received (content and grade)|——|——|

(4) Follow-up targeted poverty alleviation scheme
XVI Explanation on other significant events
√Applicable□ Not applicable
(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng Group on 29 April 2009 (details were referred to in the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the Company (namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district, Shenzhen (the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels were A627-005 andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of plan for 2010 Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land. The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first extraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the “Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area at Gongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Group shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots and the respectively contributed and constructed above-ground buildings before the land development, it is estimated that the compensatory consideration obtained by the Company accounts for50.5% of the total consideration and Wuhan Zhongheng Group accounts for49.5% by calculation.
The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting held on September 11, 2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewal and the progress of related transactions of‘the updated units at Huafa Area, Gong Ming Street, Guangming New District,Shenzhen’”, the company has signed the “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, “Contract for the cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street,
Guangming New District” and “Agreement on housing acquisition and removal compensation and resettlement”
with Wuhan Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan
SEMI-ANNUAL REPORT 2019 Zhongheng Group”), Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”), and Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to as “Vanke Guangming”). On 12 September 2016, the Company received a “Notice of Arbitration No.: SHEN DP20160334” from SCIA, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen” against the Company and Wuhan Zhongheng Group. The arbitration court holds hearings on 12 November 2016 and 13 May 2017. Shenzhen Court of International Arbitration (SCIA) has given a ruling in August 2017, although most of the arbitration claims proposed by Shenzhen Vanke are rejected by arbitration court, the arbitration procedures and so-called cognizance of fact of contract breach still has problems in arbitration. The results have damaged the legitimate rights and interest of the Company, and we have putting forward the application for dismantling in February 2018 to the Shenzhen IntermediatePeople’s Court. The Court has accepted the case formally. Progress of the case found more in the Notices released on Juchao website (www.cninfo.com.cn) dated 14 Sept. 2016, 1 Nov. 2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017 and 9 Feb. 2018 respectively.
(ii) Majorshareholders’ commitment to increase holdings
On November 20 and 28, 2017, the controlling shareholders made a commitment to increase the holding of 2.83 million shares of the company's B shares and not less than 2.8 million shares of the A shares, the commitment period was within 6 months, and it has been completed in May 2019 after two times of postponement.
(iii) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. Wuhan Zhongheng Group deferred the repurchase business day to 30 June 2017. on 1 Feb. 2016, Wuhan Zhongheng Group pledge the 27,349,953 shares held to China Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expired on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end of this period released, controlling shareholder still not removed the pledge and the Company has apply by letter, relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice released on Juchao website (www.cninfo.com.cn) date 2 Feb. 2018.
(iv) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of theCompany’ stock, accounting for42.13% of the total share capital of the Company, of which 116,489,894 shares were judicially frozen on September 27, 2016, and the frozen period was until September 13, 2021, which were frozen again by the Shenzhen Intermediate People's Court on December 14, 2018, with a frozen period of 36 months, the remaining 2,800,000 shares were frozen by the Shenzhen Intermediate People's Court on May 29, 2019, and were frozen again by the HigherPeople’s Court of Guangdong Province on July 5, 2019. For details, please refer to thecompany’s announcements published on www.cninfo.com.cn on October 27, 2016, January 11, 2019, May 31, 2019 and August 7, 2019.
SEMI-ANNUAL REPORT 2019 XVII. Significant event of subsidiary of the Company
□ Applicable√Not applicable
SEMI-ANNUAL REPORT 2019 Section VI. Changes in Shares and Particulars about Shareholders I. Changes in Share Capital
1. Changes in Share Capital
In Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the Change||Increase/Decrease in the Change (+, -)|||||After the Change||
||||||Capitali|||||
||||New||zation|||||
|||Proporti||Bonus|||||Proporti|
||Amount||shares||of|Others|Subtotal|Amount||
|||on|issued|shares|public||||on|
||||||reserve|||||
|I. Restricted shares|0|0.00%|0|0|0|0|0|0|0.00%|
||283,161|100.00||||||283,161|100.00|
|II. Unrestricted shares|||0|0|0|0|0|||
||,227|%||||||,227|%|
||181,165|||||||181,165||
|1. RMB Ordinary shares||63.98%|0|0|0|0|0||63.98%|
||,391|||||||,391||
|2. Domestically listed|101,995|||||||101,995||
|||36.02%|0|0|0|0|0||36.02%|
|foreign shares|,836|||||||,836||
||283,161|100.00||||||283,161|100.00|
|III. Total shares|||0|0|0|0|0|||
||,227|%||||||,227|%|

 Reasons for share changed
□ Applicable√ Not applicable
Approval of share changed
□ Applicable√ Not applicable
Ownership transfer of share changed
□ Applicable√ Not applicable
Progress of shares buy-back
□ Applicable√ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable√ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□ Applicable√ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable√ Not applicable
SEMI-ANNUAL REPORT 2019 2. Changes of restricted shares
□ Applicable√Not applicable
II. Securities issuance and listing
□ Applicable√Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In Share
|||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||Total preference shareholders|||||||
||Total common stock|||||||||||||||||
||||||||||||with voting rights recovered at|||||||
||shareholders in reporting|||23,417||||||||||||0||
||||||||||||end of reporting period (if|||||||
||period-end|||||||||||||||||
||||||||||||applicable) (found in note8)|||||||
||Particulars about common shares held above 5% by shareholders or top ten common shareholders|||||||||||||||||
|||||||||Total||||||||Number of share||
|||||||||commo|||||Amount||Amount|pledged/frozen||
|||||||||n|||||of||of|||
|||||||Proportio||shareho||Changes|||restricte||un-restric|||
||Full name of||Nature of|||n of||lders at||in report|||d||ted|||
||Shareholders||shareholder|||shares||||||||||State of||
|||||||held||the end||period|||commo||common||Amount|
|||||||||||||||||share||
|||||||||of|||||n shares||shares|||
|||||||||report|||||held||held|||
|||||||||period||||||||||
|WuhanZhonghengGroup||Domesticnon-state-ownedlegal person|||42.13%||119,289,894||2608800|||0||119,289,894||Pledged|116,100,000|
|||||||||||||||||Frozen|119,289,894|
|SEG (HONGKONG) CO.,LTD.||Overseas legalperson|||5.85%||16,569,560||0|||0||16,569,560||Pledged|0|
|||||||||||||||||Frozen|0|
|GOODHOPECORNERINVESTMENTS LTD||Overseas legalperson|||4.49%||12,700,000||0|||0||12,700,000||Pledged|0|
|||||||||||||||||Frozen|0|
|ChangjiangSecuritiesBrokerage(Hong Kong)Co., Ltd.||Overseas legalperson|||1.89%||5,355,249||0|||0||5,355,249||Pledged|0|
|||||||||||||||||Frozen|0|
|Guoyuan||Overseas legal|||1.36%||3,845,1||0|||0||3,845,117||Pledged|0|

SEMI-ANNUAL REPORT 2019
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|SecuritiesBrokerage(Hong Kong)Co., Ltd.||person|||17|||||||
|||||||||||Frozen|0|
|Li Zhongqiu||Overseas natureperson|1.00%||2,830,000|2,830,000|0|2,830,000||Pledged|0|
|||||||||||Frozen|0|
|ZhongJiachao||Domestic natureperson|0.45%||1,277,494|||1,277,494||Pledged|0|
|||||||||||Frozen|0|
|Li Senzhuang||Domestic natureperson|0.35%||986,550|||986,550||Pledged|0|
|||||||||||Frozen|0|
|LI SHERYNZHAN MING||Overseas natureperson|0.35%||980,100|||980,100||Pledged|0|
|||||||||||Frozen|0|
|Han Yaming||Domestic natureperson|0.30%||864,200|||864,200||Pledged|0|
|||||||||||Frozen|0|
||Strategy investors or general|||||||||||
||corporation comes top 10|||||||||||
|||||N/A||||||||
||shareholders due to rights issue (if|||||||||||
||applicable) (see note 3)|||||||||||
|||||Among the top ten shareholders, Wuhan Zhongheng Group neither bears associated||||||||
|||||relationship with other shareholders, nor belongs to the consistent actor that are prescribed||||||||
||Explanation on associated|||in Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed||||||||
||relationship among the aforesaid|||Companies. The Company neither knew whether there exists associated relationship among||||||||
||shareholders|||the other tradable shareholders, nor they belong to consistent actors that are prescribed in||||||||
|||||Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed||||||||
|||||Companies.||||||||
||Particular about top ten shareholders with un-restrict common shares held|||||||||||
|||||Amount of un-restrict common shares held at|||||Type of shares|||
||Shareholders’ name|||||||||||
|||||Period-end|||||Type||Amount|
|Wuhan Zhongheng Group|||119,289,894||||||RMB commonshare|||
||||||||||||119,289,894|
|SEG (HONG KONG) CO., LTD.|||16,569,560||||||Domesticallylisted foreignshares|||
||||||||||||16,569,560|
|GOOD HOPE CORNERINVESTMENTS LTD|||12,700,000||||||Domesticallylisted foreignshares|||
||||||||||||12,700,000|
|Changjiang Securities Brokerage(Hong Kong) Co., Ltd.|||5,355,249||||||Domesticallylisted foreignshares|||
||||||||||||5,355,249|

SEMI-ANNUAL REPORT 2019
|||||||
|-|-|-|-|-|-|
|Guoyuan Securities Brokerage(Hong Kong) Co., Ltd.||3,845,117||Domestically||
|||||listed foreign|3,845,117|
|||||shares||
|Li Zhongqiu||2,830,000||Domestically||
|||||listed foreign|2,830,000|
|||||shares||
|Zhong Jiachao||1,277,494||RMB common||
||||||1,277,494|
|||||share||
|Li Senzhuang||986,550||Domestically||
|||||listed foreign|986,550|
|||||shares||
|LI SHERYN ZHAN MING||980,100||Domestically||
|||||listed foreign|980,100|
|||||shares||
|Han Yaming||864,200||Domestically||
|||||listed foreign|864,200|
|||||shares||
||Expiation on associated||Among the top ten unrestricted shareholders, the Company neither knew whether there|||
||relationship or consistent actors||exists associated relationship among the other tradable shareholders, nor they belong to|||
||within the top 10 un-restrict||consistent actors that are prescribed in Measures for the Administration of Disclosure of|||
||common shareholders and||Shareholder Equity Changes of Listed Companies. Among the top ten shareholders, Wuhan|||
||between top 10 un-restrict||Zhongheng Group neither bears associated relationship with other shareholders, nor belongs|||
||common shareholders and top 10||to the consistent actor that are prescribed in Measures for the Administration of Disclosure|||
||shareholders||of Shareholder Equity Changes of Listed Companies.|||
||Explanation on top 10 common|||||
||||Among the top ten shareholders, Zhong Jiachao holds 1,277,494 shares of the Company, of|||
||shareholders involving margin|||||
||||which, 743,494 shares held by normal account, and 534,000 shares held through credit|||
||business (if applicable) (see note|||||
||||security account|||
||4)|||||

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period
□ Yes√ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period.
IV. Change of controlling shareholder or actual controller
Changes of controlling shareholders in reporting period
□ Applicable√Not applicable
The Company had no changes of controlling shareholders in reporting period
Changes of actual controller in reporting period
□ Applicable√Not applicable
SEMI-ANNUAL REPORT 2019 No changes of actual controllers for the Company in reporting period.
SEMI-ANNUAL REPORT 2019 Section VII. Preferred Stock
□ Applicable√Not applicable
The Company had no preferred stock in the Period.
SEMI-ANNUAL REPORT 2019 Section VIII. Particulars about Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
√ Applicable□ Not applicable
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||||||Amount of||
||||||||||Amount of|
||||||||Shares held|shares||
||||||Start||||shares|
|||W o r k in g||||End date|at|increased||
||Title||Sex|Age|dated of|of office|||decreased in|
|Name||status|(M/F)||office||period-begi|in this||
||||||term|term|||this period|
||||||||n (Share)|period||
||||||||||(Share)|
|||||||||(Share)||
||Chairma|||||||||
|Li||Currentl||||||||
||n/Gener|||2,830,00||2,830,00||||
|Zhongqi||y in|0||0||0|0|0|
||al|||0||0||||
|u||office||||||||
||Manager|||||||||
|||||2,830,00||2,830,00||||
|Total|--|--|0||0||0|0|0|
|||||0||0||||

II. Changes of directors, supervisors and senior executives
□ Applicable√ Not applicable
No changes of directors, supervisors and senior executives, found more details in Annual Report 2018.
SEMI-ANNUAL REPORT 2019 Section IX. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when semi-annual report approved for released or fail to cash in full on due
No
Section X. Financial Report
I. Audit report
Whether the semi-annual report was audited or not
□ Yes√ No
The financial report of this semi-annual report was unaudited
II. Financial statement
Currency used in note of financial statement is RMB (Yuan)
1. Consolidated Balance Sheet
Prepared by SHENZHEN ZHONGHENG HUAFA CO., LTD
2019-08-27
In RMB
||||
|-|-|-|
|Item|2019-6-30|2018-12-31|
|Current assets:|||
|Monetary funds|47,981,541.61|34,108,330.27|
|Settlement provisions|||
|Capital lent|||
|Tradable financial assets|||
|Financial assets measured by fair|||
|value and with variation reckoned|||
|into current gains/losses|||
|Derivative financial assets|||
|Note receivable|10,427,934.87|69,185,516.71|
|Account receivable|149,540,866.46|116,797,834.51|
|Receivable financing|||
|Accounts paid in advance|28,418,600.46|31,348,429.54|
|Insurance receivable|||
|Reinsurance receivables|||
|Contract reserve of reinsurance|||
|receivable|||
|Other account receivable|5,781,851.15|5,777,179.08|

||||
|-|-|-|
|Including: Interest receivable|||
|Dividend receivable|||
|Buying back the sale of financial|||
|assets|||
|Inventories|86,709,541.76|62,973,909.38|
|Contractual assets|||
|Assets held for sale|||
|Non-current asset due within one|||
|year|||
|Other current assets|1,218,695.38|59,370.18|
|Total current assets|330,079,031.69|320,250,569.67|
|Non-current assets:|||
|Loans and payments on behalf|||
|Debt investment|||
|Finance asset available for sales|||
|Other debt investment|||
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|||
|Investment in other equity|||
|instrument|||
|Other non-current financial|||
|assets|||
|Investment real estate|49,817,157.72|50,681,322.86|
|Fixed assets|185,008,101.52|188,083,873.38|
|Construction in progress|7,552,776.46|5,727,760.23|
|Productive biological asset|||
|Oil and gas asset|||
|Right-of-use assets|||
|Intangible assets|43,977,752.24|41,815,689.74|
|Expense on Research and|||
|Development|||
|Goodwill|||
|Long-term expenses to be|||
||425,949.07|542,116.99|
|apportioned|||
|Deferred income tax asset|6,829,856.59|6,829,856.59|

||||
|-|-|-|
|Other non-current asset|289,550.00|3,158,964.00|
|Total non-current asset|293,901,143.60|296,839,583.79|
|Total assets|623,980,175.29|617,090,153.46|
|Current liabilities:|||
|Short-term loans|134,676,280.00|161,568,657.88|
|Loan from central bank|||
|Capital borrowed|||
|Transactional financial liability|||
|Financial liability measured by|||
|fair value and with variation reckoned|||
|into current gains/losses|||
|Derivative financial liability|||
|Note payable|13,804,210.29|27,642,356.66|
|Account payable|102,035,210.28|60,975,306.43|
|Accounts received in advance|156,232.44|159,528.60|
|Selling financial asset of|||
|repurchase|||
|Absorbing deposit and interbank|||
|deposit|||
|Security trading of agency|||
|Security sales of agency|||
|Wage payable|4,045,824.29|4,700,208.36|
|Taxes payable|11,609,232.63|11,232,819.87|
|Other account payable|31,040,362.49|26,778,863.92|
|Including: Interest payable|54,347.32|439,558.70|
|Dividend payable|||
|Commission charge and|||
|commission payable|||
|Reinsurance payable|||
|Contractual liability|||
|Liability held for sale|||
|Non-current liabilities due|||
|within one year|||
|Other current liabilities|||
|Total current liabilities|297,367,352.42|293,057,741.72|
|Non-current liabilities:|||

||||
|-|-|-|
|Insurance contract reserve|||
|Long-term loans|||
|Bonds payable|||
|Including: Preferred stock|||
|Perpetual capital|||
|securities|||
|Lease liability|||
|Long-term account payable|||
|Long-term wages payable|||
|Accrual liability|64,411.00|64,411.00|
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|64,411.00|64,411.00|
|Total liabilities|297,431,763.42|293,122,152.72|
|Owner’s equity:|||
|Share capital|283,161,227.00|283,161,227.00|
|Other equity instrument|||
|Including: Preferred stock|||
|Perpetual capital|||
|securities|||
|Capital public reserve|146,587,271.50|146,587,271.50|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus public reserve|77,391,593.25|77,391,593.25|
|Provision of general risk|||
|Retained profit|-180,591,679.88|-183,172,091.01|
|Total owner’ s equity attributable to|||
||326,548,411.87|323,968,000.74|
|parent company|||
|Minority interests|||
|Total owner’ s equity|326,548,411.87|323,968,000.74|
|Total liabilities and owner’ s equity|623,980,175.29|617,090,153.46|

Legal representative: Li Zhongqiu
Person in charge of accounting works: Yang Bin
Person in charge of accounting institution: Wu Aijie
2. Balance Sheet of Parent Company
In RMB
||||
|-|-|-|
|Item|2019-6-30|2018-12-31|
|Current assets:|||
|Monetary funds|1,793,275.01|13,234,774.97|
|Transactional financial assets|||
|Financial assets measured by fair|||
|value and with variation reckoned|||
|into current gains/losses|||
|Derivative financial assets|||
|Note receivable|||
|Account receivable|||
|Receivable financing|||
|Accounts paid in advance|53,050.00|153,050.00|
|Other account receivable|111,782,724.70|99,155,253.08|
|Including: Interest receivable|||
|Dividend|||
|receivable|||
|Inventories|14,806.50|14,806.50|
|Contractual assets|||
|Assets held for sale|||
|Non-current assets maturing|||
|within one year|||
|Other current assets||17,055.88|
|Total current assets|113,643,856.21|112,574,940.43|
|Non-current assets:|||
|Debt investment|||
|Available-for-sale financial|||
|assets|||
|Other debt investment|||
|Held-to-maturity investments|||
|Long-term receivables|||

||||
|-|-|-|
|Long-term equity investments|186,608,900.00|186,608,900.00|
|Investment in other equity|||
|instrument|||
|Other non-current financial|||
|assets|||
|Investment real estate|25,770,502.38|26,374,703.70|
|Fixed assets|98,675,129.84|99,227,872.22|
|Construction in progress|||
|Productive biological assets|||
|Oil and natural gas assets|||
|Right-of-use assets|||
|Intangible assets|4,626,182.10|4,698,654.96|
|Research and development costs|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|7,506,905.90|7,506,905.90|
|Other non-current assets|||
|Total non-current assets|323,187,620.22|324,417,036.78|
|Total assets|436,831,476.43|436,991,977.21|
|Current liabilities|||
|Short-term borrowings|100,000,000.00|100,000,000.00|
|Transactional financial liability|||
|Financial liability measured by|||
|fair value and with variation reckoned|||
|into current gains/losses|||
|Derivative financial liability|||
|Notes payable|||
|Account payable|9,740,367.33|10,745,840.16|
|Accounts received in advance|41,605.01|41,937.00|
|Contractual liability|||
|Wage payable|820,979.02|1,020,979.02|
|Taxes payable|7,423,067.53|7,161,707.15|
|Other accounts payable|22,811,198.36|22,672,441.54|
|Including: Interest payable|||
|Dividend payable|||

||||
|-|-|-|
|Liability held for sale|||
|Non-current liabilities due|||
|within one year|||
|Other current liabilities|||
|Total current liabilities|140,837,217.25|141,642,904.87|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Lease liability|||
|Long-term account payable|||
|Long term employee|||
|compensation payable|||
|Accrued liabilities|64,411.00|64,411.00|
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|64,411.00|64,411.00|
|Total liabilities|140,901,628.25|141,707,315.87|
|Owners’ equity:|||
|Share capital|283,161,227.00|283,161,227.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Capital public reserve|146,587,271.50|146,587,271.50|
|Less: Inventory shares|||
|Other comprehensive income|||
|Special reserve|||
|Surplus reserve|77,391,593.25|77,391,593.25|
|Retained profit|-211,210,243.57|-211,855,430.41|
|Total owner’s equity|295,929,848.18|295,284,661.34|
|Total liabilities and owner’s equity|436,831,476.43|436,991,977.21|

3. Consolidated Profit Statement
In RMB
||||
|-|-|-|
|Item|Semi-annual of 2019|Semi-annual of 2018|
|I. Total operating income|339,190,174.05|340,984,843.24|
|Including: Operating income|339,190,174.05|340,984,843.24|
|Interest income|||
|Insurance gained|||
|Commission charge and|||
|commission income|||
|II. Total operating cost|336,433,054.05|338,576,691.78|
|Including: Operating cost|297,580,208.34|302,582,979.44|
|Interest expense|||
|Commission charge and|||
|commission expense|||
|Cash surrender value|||
|Net amount of expense of|||
|compensation|||
|Net amount of withdrawal of|||
|insurance contract reserve|||
|Bonus expense of guarantee slip|||
|Reinsurance expense|||
|Tax and extras|1,310,110.00|1,712,293.39|
|Sales expense|9,130,380.22|8,433,363.31|
|Administrative expense|19,616,991.39|20,400,985.42|
|R&D expense|3,726,992.86||
|Financial expense|5,068,371.24|5,447,070.22|
|Including: Interest|||
||5,355,676.92|5,989,883.31|
|expenses|||
|Interest|||
||-419,336.28|-349,858.59|
|income|||
|Add: other income|||
|Investment income (Loss is|||
||74,936.14|245,679.10|
|listed with “-”)|||
|Including: Investment|||
|income on affiliated company and joint|||
|venture|||

||||
|-|-|-|
|The termination of|||
|income recognition for financial assets|||
|measured by amortized cost(Loss is|||
|listed with “-”)|||
|Exchange income (Loss is|||
|listed with “-”)|||
|Net exposure hedging|||
|income (Loss is listed with “-”)|||
|Income from change of fair|||
|value (Loss is listed with “-”)|||
|Loss of credit impairment|||
||-8,432.50||
|(Loss is listed with “-”)|||
|Losses of devaluation of|||
|||-5,941.50|
|asset (Loss is listed with “-”)|||
|Income from assets disposal|||
||129,039.57|-105,779.36|
|(Loss is listed with “-”)|||
|III. Operating profit (Loss is listed with|||
||2,952,663.21|2,542,109.70|
|“-”)|||
|Add: Non-operating income|232,758.00|887,662.07|
|Less: Non-operating expense|1,100.00|172,806.76|
|IV. Total profit (Loss is listed with “-”)|3,184,321.21|3,256,965.01|
|Less: Income tax expense|603,910.08|463,831.41|
|V. Net profit (Net loss is listed with|||
||2,580,411.13|2,793,133.60|
|“-”)|||
|(i) Classify by business continuity|||
|1.continuous operating net profit|||
||2,580,411.13|2,793,133.60|
|(net loss listed with ‘-”)|||
|2.termination of net profit (net|||
|loss listed with ‘-”)|||
|(ii) Classify by ownership|||
|1.Net profit attributable to|||
||2,580,411.13|2,793,133.60|
|owner’s of parent company|||
|2.Minority shareholders’ gains|||
|and losses|||
|VI. Net after-tax of other|||
|comprehensive income|||
|Net after-tax of other comprehensive|||
|income attributable to owners of parent|||
|company|||

||
|-|
|(I) Other comprehensive income|
|items which will not be reclassified|
|subsequently to profit of loss|
|1.Changes of the defined|
|benefit plans that re-measured|
|2.Other comprehensive|
|income under equity method that|
|cannot be transfer to gain/loss|
|3.Change of fair value of|
|investment in other equity instrument|
|4.Fair value change of|
|enterprise's credit risk|
|5. Other|
|(ii) Other comprehensive income|
|items which will be reclassified|
|subsequently to profit or loss|
|1.Other comprehensive|
|income under equity method that can|
|transfer to gain/loss|
|2.Change of fair value of|
|other debt investment|
|3.gain/loss of fair value|
|changes for available-for-sale financial|
|assets|
|4.Amount of financial|
|assets re-classify to other|
|comprehensive income|
|5.Gain/loss of|
|held-to-maturity investments that|
|re-classify to available-for-sale|
|financial asset|
|6.Credit impairment|
|provision for other debt investment|
|7.Cash flow hedging|
|reserve|
|8.Translation differences|
|arising on translation of foreign|
|currency financial statements|
|9.Other|

||||
|-|-|-|
|Net after-tax of other comprehensive|||
|income attributable to minority|||
|shareholders|||
|VII. Total comprehensive income|2,580,411.13|2,793,133.60|
|Total comprehensive income|||
|attributable to owners of parent|2,580,411.13|2,793,133.60|
|Company|||
|Total comprehensive income|||
|attributable to minority shareholders|||
|VIII. Earnings per share:|||
|(i) Basic earnings per share|0.0091|0.0099|
|(ii) Diluted earnings per share|0.0091|0.0099|

 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party
Legal representative: Li Zhongqiu
Person in charge of accounting works: Yang Bin
Person in charge of accounting institution: Wu Aijie
4. Profit Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Semi-annual of 2019|Semi-annual of 2018|
|I. Operating income|18,041,135.31|16,961,088.74|
|Less: Operating cost|3,172,031.59|2,510,518.82|
|Taxes and surcharge|562,061.05|585,014.62|
|Sales expenses|||
|Administration expenses|9,024,394.50|11,134,855.37|
|R&D expenses|||
|Financial expenses|4,423,699.05|4,888,654.05|
|Including: interest|||
||4,398,333.30|4,903,025.04|
|expenses|||
|Interest income|-9,938.10|-22,022.66|
|Add: other income|||
|Investment income (Loss is|||
|listed with “-”)|||

||||
|-|-|-|
|Including: Investment|||
|income on affiliated Company and|||
|joint venture|||
|The termination of|||
|income recognition for financial|||
|assets measured by amortized cost|||
|(Loss is listed with “-”)|||
|Net exposure hedging|||
|income (Loss is listed with “-”)|||
|Changing income of fair|||
|value (Loss is listed with “-”)|||
|Loss of credit impairment|||
|(Loss is listed with “-”)|||
|Losses of devaluation of|||
|asset (Loss is listed with “-”)|||
|Income on disposal of|||
|assets (Loss is listed with “-”)|||
|II. Operating profit (Loss is listed|||
||858,949.12|-2,157,954.12|
|with “-”)|||
|Add: Non-operating income|1,300.00||
|Less: Non-operating expense||131,247.82|
|III. Total Profit (Loss is listed with|||
||860,249.12|-2,289,201.94|
|“-”)|||
|Less: Income tax|215,062.28|-444,975.63|
|IV. Net profit (Net loss is listed with|||
||645,186.84|-1,844,226.31|
|“-”)|||
|(i)continuous operating net|||
||645,186.84|-1,844,226.31|
|profit (net loss listed with ‘-”)|||
|(ii) termination of net profit (net|||
|loss listed with ‘-”)|||
|V. Net after-tax of other|||
|comprehensive income|||
|(I) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1.Changes of the defined|||
|benefit plans that re-measured|||
|2.Other comprehensive|||
|income under equity method that|||

||||
|-|-|-|
|cannot be transfer to gain/loss|||
|3.Change of fair value of|||
|investment in other equity instrument|||
|4.Fair value change of|||
|enterprise's credit risk|||
|5. Other|||
|(II) Other comprehensive|||
|income items which will be|||
|reclassified subsequently to profit or|||
|loss|||
|1.Other comprehensive|||
|income under equity method that can|||
|transfer to gain/loss|||
|2.Change of fair value of|||
|other debt investment|||
|3.gain/loss of fair value|||
|changes for available-for-sale|||
|financial assets|||
|4.Amount of financial|||
|assets re-classify to other|||
|comprehensive income|||
|5.Gain/loss of|||
|held-to-maturity investments that|||
|re-classify to available-for-sale|||
|financial asset|||
|6.Credit impairment|||
|provision for other debt investment|||
|7.Cash flow hedging|||
|reserve|||
|8.Translation differences|||
|arising on translation of foreign|||
|currency financial statements|||
|9.Other|||
|VI. Total comprehensive income|645,186.84|-1,844,226.31|
|VII. Earnings per share:|||
|(i) Basic earnings per share|0.0023|-0.0065|
|(ii) Diluted earnings per share|0.0023|-0.0065|

5. Consolidated Cash Flow Statement
In RMB
||||
|-|-|-|
|Item|Semi-annual of 2019|Semi-annual of 2018|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|283,565,570.88|195,284,689.59|
|services|||
|Net increase of customer deposit|||
|and interbank deposit|||
|Net increase of loan from|||
|central bank|||
|Net increase of capital borrowed|||
|from other financial institution|||
|Cash received from original|||
|insurance contract fee|||
|Net cash received from|||
|reinsurance business|||
|Net increase of insured savings|||
|and investment|||
|Cash received from interest,|||
|commission charge and commission|||
|Net increase of capital borrowed|||
|Net increase of returned business|||
|capital|||
|Net cash received by agents in|||
|sale and purchase of securities|||
|Write-back of tax received|||
|Other cash received concerning|||
||3,403,272.55|3,010,278.37|
|operating activities|||
|Subtotal of cash inflow arising from|||
||286,968,843.43|198,294,967.96|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|182,811,441.04|158,655,192.45|
|service|||
|Net increase of customer loans|||
|and advances|||
|Net increase of deposits in|||

||||
|-|-|-|
|central bank and interbank|||
|Cash paid for original insurance|||
|contract compensation|||
|Net increase of financial assets|||
|held for transaction purposes|||
|Net increase of capital lent|||
|Cash paid for interest,|||
|commission charge and commission|||
|Cash paid for bonus of|||
|guarantee slip|||
|Cash paid to/for staff and|||
||33,770,584.01|35,688,181.95|
|workers|||
|Taxes paid|4,582,072.62|12,954,614.98|
|Other cash paid concerning|||
||20,610,525.20|17,668,304.21|
|operating activities|||
|Subtotal of cash outflow arising from|||
||241,774,622.87|224,966,293.59|
|operating activities|||
|Net cash flows arising from operating|||
||45,194,220.56|-26,671,325.63|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
|investment|||
|Cash received from investment|||
||74,936.14|253,638.00|
|income|||
|Net cash received from disposal|||
|of fixed, intangible and other|320,500.00|737,982.00|
|long-term assets|||
|Net cash received from disposal|||
|of subsidiaries and other units|||
|Other cash received concerning|||
||49,000,000.00|80,000,000.00|
|investing activities|||
|Subtotal of cash inflow from|||
||49,395,436.14|80,991,620.00|
|investing activities|||
|Cash paid for purchasing fixed,|||
||4,360,231.13|7,537,161.50|
|intangible and other long-term assets|||
|Cash paid for investment|||
|Net increase of mortgaged loans|||

||||
|-|-|-|
|Net cash received from|||
|subsidiaries and other units obtained|||
|Other cash paid concerning|||
||49,000,000.00|80,000,000.00|
|investing activities|||
|Subtotal of cash outflow from|||
||53,360,231.13|87,537,161.50|
|investing activities|||
|Net cash flows arising from investing|||
||-3,964,794.99|-6,545,541.50|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
|investment|||
|Including: Cash received from|||
|absorbing minority shareholders’|||
|investment by subsidiaries|||
|Cash received from loans|61,315,748.80|156,361,250.00|
|Cash received from issuing|||
|bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from|||
||61,315,748.80|156,361,250.00|
|financing activities|||
|Cash paid for settling debts|88,051,864.63|172,529,301.86|
|Cash paid for dividend and|||
||5,723,122.93|4,844,780.76|
|profit distributing or interest paying|||
|Including: Dividend and profit|||
|of minority shareholder paid by|||
|subsidiaries|||
|Other cash paid concerning|||
|financing activities|||
|Subtotal of cash outflow from|||
||93,774,987.56|177,374,082.62|
|financing activities|||
|Net cash flows arising from financing|||
||-32,459,238.76|-21,012,832.62|
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|99,650.05|-149,879.80|
|exchange rate|||
|V. Net increase of cash and cash|||
||8,869,836.86|-54,379,579.55|
|equivalents|||

||||
|-|-|-|
|Add: Balance of cash and cash|||
||27,961,209.60|81,474,974.30|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||36,831,046.46|27,095,394.75|
|equivalents at the period -end|||

6. Cash Flow Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Semi-annual of 2019|Semi-annual of 2018|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|16,386,026.55|11,824,697.08|
|services|||
|Write-back of tax received|||
|Other cash received concerning|||
||4,240,814.47|107,677,057.73|
|operating activities|||
|Subtotal of cash inflow arising from|||
||20,626,841.02|119,501,754.81|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|||
|service|||
|Cash paid to/for staff and|||
||1,551,291.30|1,812,043.81|
|workers|||
|Taxes paid|791,510.74|3,627,519.72|
|Other cash paid concerning|||
||25,327,205.64|116,155,663.65|
|operating activities|||
|Subtotal of cash outflow arising from|||
||27,670,007.68|121,595,227.18|
|operating activities|||
|Net cash flows arising from operating|||
||-7,043,166.66|-2,093,472.37|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
|investment|||
|Cash received from investment|||
|income|||
|Net cash received from disposal|||
|of fixed, intangible and other|||

||||
|-|-|-|
|long-term assets|||
|Net cash received from disposal|||
|of subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||
|Subtotal of cash inflow from|||
|investing activities|||
|Cash paid for purchasing fixed,|||
|||1,696,400.00|
|intangible and other long-term assets|||
|Cash paid for investment|||
|Net cash received from|||
|subsidiaries and other units obtained|||
|Other cash paid concerning|||
|investing activities|||
|Subtotal of cash outflow from|||
|||1,696,400.00|
|investing activities|||
|Net cash flows arising from investing|||
|||-1,696,400.00|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
|investment|||
|Cash received from loans||100,000,000.00|
|Cash received from issuing|||
|bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from|||
|||100,000,000.00|
|financing activities|||
|Cash paid for settling debts||116,054,041.68|
|Cash paid for dividend and|||
||4,398,333.30|3,884,001.07|
|profit distributing or interest paying|||
|Other cash paid concerning|||
|financing activities|||
|Subtotal of cash outflow from|||
||4,398,333.30|119,938,042.75|
|financing activities|||
|Net cash flows arising from financing|||
||-4,398,333.30|-19,938,042.75|
|activities|||

||||
|-|-|-|
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in||424.56|
|exchange rate|||
|V. Net increase of cash and cash|||
||-11,441,499.96|-23,727,490.56|
|equivalents|||
|Add: Balance of cash and cash|||
||12,024,179.58|25,181,764.87|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||582,679.62|1,454,274.31|
|equivalents at the period -end|||

7. Statement of Changes inOwners’ Equity (Consolidated)
Current Period
In RMB
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Semi-annual of 2019|||||||||||||||
||Owners’ equity attributable to the parent Company|||||||||||||||
|||Other||||||||||||||
|||equity||||||||||||||
||||||||Othe|||||||||
|||instrument||||Less|||||||||Tota|
||||||||r|||Prov||||||
||||Per|||:||Reas||||||Min|l|
|Item|Sha||pet||Capi|Inve|com|onab|Surp|ision|Reta|||ority|own|
||re|Pre|ual||tal|ntor|preh|le|lus|of|ined|Othe|Subt|inter|ers’|
||cap|fer|||reser||ensi||reser|gene|profi|r|otal|||
||||cap|Ot||y||reser||||||ests|equit|
||ital|red|||ve||ve||ve|ral|t|||||
||||ital|her||shar||ve|||||||y|
|||sto|||||inco|||risk||||||
||||sec|||es||||||||||
|||ck|||||me|||||||||
||||urit|||||||||||||
||||ies|||||||||||||
||283|||||||||||||||
||||||146,||||77,3||-183||323,||323,|
||,16|||||||||||||||
|I. Balance at||||||||||||||||
||||||587,||||91,5||,172,||968,||968,|
|the end of the|1,2|||||||||||||||
||||||271.||||93.2||091.||000.||000.|
|last year|27.|||||||||||||||
||||||50||||5||01||74||74|
||00|||||||||||||||
|Add:||||||||||||||||
|Changes of||||||||||||||||
|accounting||||||||||||||||
|policy||||||||||||||||
|Error||||||||||||||||
|correction of||||||||||||||||
|the last period||||||||||||||||
|Enterprise||||||||||||||||
|combine||||||||||||||||
|under the||||||||||||||||
|same control||||||||||||||||
|Other||||||||||||||||

||||||||
|-|-|-|-|-|-|-|
||283||||||
|||146,|77,3|-183|323,|323,|
||,16||||||
|II. Balance at|||||||
|||587,|91,5|,172,|968,|968,|
|the beginning|1,2||||||
|||271.|93.2|091.|000.|000.|
|of this year|27.||||||
|||50|5|01|74|74|
||00||||||
|III. Increase/|||||||
|Decrease in||||2,58|2,58|2,58|
|this year|||||||
|||||0,41|0,41|0,41|
|(Decrease is|||||||
|||||1.13|1.13|1.13|
|listed with|||||||
|“-”)|||||||
|||||2,58|2,58|2,58|
|(i) Total|||||||
|comprehensiv||||0,41|0,41|0,41|
|e income||||1.13|1.13|1.13|
|(ii) Owners’|||||||
|devoted and|||||||
|decreased|||||||
|capital|||||||
|1.Common|||||||
|shares|||||||
|invested by|||||||
|shareholders|||||||
|2. Capital|||||||
|invested by|||||||
|holders of|||||||
|other equity|||||||
|instruments|||||||
|3. Amount|||||||
|reckoned into|||||||
|owners equity|||||||
|with|||||||
|share-based|||||||
|payment|||||||
|4. Other|||||||
|(III) Profit|||||||
|distribution|||||||
|1. Withdrawal|||||||
|of surplus|||||||
|reserves|||||||
|2. Withdrawal|||||||
|of general|||||||
|risk|||||||
|provisions|||||||
|3.|||||||
|Distribution|||||||
|for owners (or|||||||
|shareholders)|||||||
|4. Other|||||||
|(IV) Carrying|||||||

||||||||
|-|-|-|-|-|-|-|
|forward|||||||
|internal|||||||
|owners’|||||||
|equity|||||||
|1. Capital|||||||
|reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|2. Surplus|||||||
|reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|3. Remedying|||||||
|loss with|||||||
|surplus|||||||
|reserve|||||||
|4．Carry-over|||||||
|retained|||||||
|earnings|||||||
|from the|||||||
|defined|||||||
|benefit|||||||
|plans|||||||
|5．Carry-over|||||||
|retained|||||||
|earnings from|||||||
|other|||||||
|comprehensiv|||||||
|e income|||||||
|6. Other|||||||
|(V)|||||||
|Reasonable|||||||
|reserve|||||||
|1. Withdrawal|||||||
|in the report|||||||
|period|||||||
|2. Usage in|||||||
|the report|||||||
|period|||||||
|(VI)Others|||||||
||283|||||326,548,411.87|
|||146,|77,3|-180|326,||
||,16||||||
|IV. Balance at|||||||
|||587,|91,5|,591,|548,||
|the end of the|1,2||||||
|||271.|93.2|679.|411.||
|report period|27.||||||
|||50|5|88|87||
||00||||||

Last Period
In RMB
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Semi-annual of 2018|||||||||||||||
||Owners’ equity attributable to the parent Company|||||||||||||||
|||Other||||||||||||||
|||equity||||||||||||||
|||instrument||||||||||||||
||||Pe||||Othe|||||||||
|||||||Less||||||||||
||||rpe||||r|||Prov|||||Total|
|||||||:||Reas||||||Mino||
||Sha||tua||Capi||com||Surp|ision|Reta||||owne|
|Item||Pr||||Inve||onab||||||rity||
||re||l||tal||preh||lus|of|ined|Othe|Subt||rs’|
|||efe||||ntor||le||||||intere||
||cap||ca||reser||ensi||reser|gene|profi|r|otal||equit|
|||rre||Oth||y||reser||||||sts||
||ital||pit||ve||ve||ve|ral|t||||y|
|||d||er||shar||ve||||||||
||||al||||inco|||risk||||||
|||sto||||es||||||||||
||||sec||||me|||||||||
|||ck||||||||||||||
||||uri|||||||||||||
||||tie|||||||||||||
||||s|||||||||||||
||283|||||||||||||||
||||||146,||||77,3||-186||320,|||
||,16||||||||||||||320,6|
|I. Balance at||||||||||||||||
||||||587,||||91,5||,467,||672,|||
|the end of the|1,2||||||||||||||72,97|
||||||271.||||93.2||113.||978.|||
|last year|27.||||||||||||||8.02|
||||||50||||5||73||02|||
||00|||||||||||||||
|Add:||||||||||||||||
|Changes of||||||||||||||||
|accounting||||||||||||||||
|policy||||||||||||||||
|Error||||||||||||||||
|correction of||||||||||||||||
|the last||||||||||||||||
|period||||||||||||||||
|Enterprise||||||||||||||||
|combine||||||||||||||||
|under the||||||||||||||||
|same||||||||||||||||
|control||||||||||||||||
|Other||||||||||||||||
||283|||||||||||||||
||||||146,||||77,3||-186||320,|||
||,16||||||||||||||320,6|
|II. Balance at||||||||||||||||
||||||587,||||91,5||,467,||672,|||
|the beginning|1,2||||||||||||||72,97|
||||||271.||||93.2||113.||978.|||
|of this year|27.||||||||||||||8.02|
||||||50||||5||73||02|||
||00|||||||||||||||
|III. Increase/||||||||||||||||
|Decrease in|||||||||||2,79||2,79||2,793|
|this year||||||||||||||||
||||||||||||3,13||3,13||,133.|
|(Decrease is||||||||||||||||
||||||||||||3.60||3.60||60|
|listed with||||||||||||||||
|“-”)||||||||||||||||
|(i) Total||||||||||||||||
||||||||||||2,79||2,79||2,793|
|comprehensi||||||||||||||||

|||||
|-|-|-|-|
|ve income|3,13|3,13|,133.|
||3.60|3.60|60|
|(ii) Owners’||||
|devoted and||||
|decreased||||
|capital||||
|1.Common||||
|shares||||
|invested by||||
|shareholders||||
|2. Capital||||
|invested by||||
|holders of||||
|other equity||||
|instruments||||
|3. Amount||||
|reckoned into||||
|owners||||
|equity with||||
|share-based||||
|payment||||
|4. Other||||
|(III) Profit||||
|distribution||||
|1.||||
|Withdrawal||||
|of surplus||||
|reserves||||
|2.||||
|Withdrawal||||
|of general||||
|risk||||
|provisions||||
|3.||||
|Distribution||||
|for owners||||
|(or||||
|shareholders)||||
|4. Other||||
|(IV) Carrying||||
|forward||||
|internal||||
|owners’||||
|equity||||
|1. Capital||||
|reserves||||
|conversed to||||
|capital (share||||
|capital)||||
|2. Surplus||||
|reserves||||

||||||||
|-|-|-|-|-|-|-|
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|3.|||||||
|Remedying|||||||
|loss with|||||||
|surplus|||||||
|reserve|||||||
|4．Carry-over|||||||
|retained|||||||
|earnings|||||||
|from the|||||||
|defined|||||||
|benefit|||||||
|plans|||||||
|5．Carry-over|||||||
|retained|||||||
|earnings|||||||
|from other|||||||
|comprehensi|||||||
|ve income|||||||
|6. Other|||||||
|(V)|||||||
|Reasonable|||||||
|reserve|||||||
|1.|||||||
|Withdrawal|||||||
|in the report|||||||
|period|||||||
|2. Usage in|||||||
|the report|||||||
|period|||||||
|(VI)Others|||||||
||283||||||
|||146,587,271.50|77,391,593.25|-183|323,||
|IV. Balance|,16|||||323,4|
|at the end of||||,673,|466,||
||1,2|||||66,11|
|the report||||980.|111.||
||27.|||||1.62|
|period||||13|62||
||00||||||

8. Statement of Changes inOwners’ Equity (Parent Company)
Current period
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Semi-annual of 2019||||||||||||
|||Other equity|||Capita|Less:|Othercomprehensive|Reasonablereserve|Surplu|Retai|||
||Share|||||||||||Total|
|Item||instrument|||l|Invent|||s|ned|||
||capit||||||||||Other|owners’|
|||Prefe|Perpetual|Other|public|ory|||reserv|profi|||
||al|||||||||||equity|
|||rred|||reserv|shares|||e|t|||

||||||||||
|-|-|-|-|-|-|-|-|-|
|||stock|capit|e|incom||||
||||al||e||||
||||secur||||||
||||ities||||||
||||||||-211,||
||283,1|||146,58||77,391|||
|I. Balance at|||||||855,|295,284,|
|the end of the|61,22|||7,271.||,593.2|||
||||||||430.|661.34|
|last year|7.00|||50||5|||
||||||||41||
|Add:|||||||||
|Changes of|||||||||
|accounting|||||||||
|policy|||||||||
|Error|||||||||
|correction of|||||||||
|the last period|||||||||
|Other|||||||||
||||||||-211,||
||283,1|||146,58||77,391|||
|II. Balance at|||||||855,|295,284,|
|the beginning|61,22|||7,271.||,593.2|||
||||||||430.|661.34|
|of this year|7.00|||50||5|||
||||||||41||
|III. Increase/|||||||||
||||||||645,||
|Decrease in||||||||645,186.|
|this year|||||||186.||
|||||||||84|
|(Decrease is|||||||84||
|listed with “-”)|||||||||
||||||||645,||
|(i) Total||||||||645,186.|
|comprehensive|||||||186.||
|||||||||84|
|income|||||||84||
|(ii) Owners’|||||||||
|devoted and|||||||||
|decreased|||||||||
|capital|||||||||
|1.Common|||||||||
|shares|||||||||
|invested by|||||||||
|shareholders|||||||||
|2. Capital|||||||||
|invested by|||||||||
|holders of|||||||||
|other equity|||||||||
|instruments|||||||||
|3. Amount|||||||||
|reckoned into|||||||||
|owners equity|||||||||
|with|||||||||
|share-based|||||||||
|payment|||||||||
|4. Other|||||||||

|||||||
|-|-|-|-|-|-|
|(III) Profit||||||
|distribution||||||
|1. Withdrawal||||||
|of surplus||||||
|reserves||||||
|2. Distribution||||||
|for owners (or||||||
|shareholders)||||||
|3. Other||||||
|(IV) Carrying||||||
|forward||||||
|internal||||||
|owners’ equity||||||
|1. Capital||||||
|reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|2. Surplus||||||
|reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying||||||
|loss with||||||
|surplus reserve||||||
|4．Carry-over||||||
|retained||||||
|earnings from||||||
|the defined||||||
|benefit plans||||||
|5．Carry-over||||||
|retained||||||
|earnings from||||||
|other||||||
|comprehensive||||||
|income||||||
|6. Other||||||
|(V)||||||
|Reasonable||||||
|reserve||||||
|1. Withdrawal||||||
|in the report||||||
|period||||||
|2. Usage in the||||||
|report period||||||
|(VI)Others||||||
|IV. Balance at|283,1|146,58|77,391|-211,|295,929,848.18|
|the end of the||||||
||61,22|7,271.|,593.2|210,||
|report period||||||

||||||
|-|-|-|-|-|
|7.00|50|5|243|.7|
||||5||

Last period
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Semi-annual of 2018||||||||||||
|||Other equity|||||||||||
|||instrument|||||||||||
||||||||Other||||||
||||Perp||Capit||||||||
||Shar|||||Less:|compr||Surpl||||
|||Pref|etual||al|||Reason||||Totalowners’equity|
|Item|e|||||Invent|ehensi||us|Retaine|||
|||erre|capit||public|||able|||Other||
||capit|||Othe||ory|ve||reserv|d profit|||
|||d|al||reserv|||reserve|||||
||al|||r||shares|incom||e||||
|||stoc|secu||e||||||||
||||||||e||||||
|||k|ritie||||||||||
||||s||||||||||
||283,||||||||||||
||||||146,5||||77,39|-210,55|||
|I. Balance at|161,|||||||||||296,587,245.80|
|the end of the|||||87,27||||1,593|2,845.9|||
||227.||||||||||||
|last year|||||1.50||||.25|5|||
||00||||||||||||
|Add:|||||||||||||
|Changes of|||||||||||||
|accounting|||||||||||||
|policy|||||||||||||
|Error|||||||||||||
|correction of|||||||||||||
|the last|||||||||||||
|period|||||||||||||
|Other|||||||||||||
||283,||||||||||||
||||||146,5||||77,39|-210,55|||
|II. Balance at|161,|||||||||||296,587,245.80|
|the beginning|||||87,27||||1,593|2,845.9|||
||227.||||||||||||
|of this year|||||1.50||||.25|5|||
||00||||||||||||
|III. Increase/|||||||||||||
|Decrease in|||||||||||||
|||||||||||-1,844,||-1,844,226.31|
|this year|||||||||||||
|(Decrease is||||||||||226.31|||
|listed with|||||||||||||
|“-”)|||||||||||||
|(i) Total||||||||||-1,844,||-1,844,226.31|
|comprehensiv|||||||||||||
|||||||||||226.31|||
|e income|||||||||||||
|(ii) Owners’|||||||||||||
|devoted and|||||||||||||
|decreased|||||||||||||
|capital|||||||||||||
|1.Common|||||||||||||
|shares|||||||||||||
|invested by|||||||||||||

||
|-|
|shareholders|
|2. Capital|
|invested by|
|holders of|
|other equity|
|instruments|
|3. Amount|
|reckoned into|
|owners equity|
|with|
|share-based|
|payment|
|4. Other|
|(III) Profit|
|distribution|
|1.|
|Withdrawal|
|of surplus|
|reserves|
|2.|
|Distribution|
|for owners|
|(or|
|shareholders)|
|3. Other|
|(IV) Carrying|
|forward|
|internal|
|owners’|
|equity|
|1. Capital|
|reserves|
|conversed to|
|capital (share|
|capital)|
|2. Surplus|
|reserves|
|conversed to|
|capital (share|
|capital)|
|3. Remedying|
|loss with|
|surplus|
|reserve|
|4．Carry-over|
|retained|
|earnings from|
|the defined|
|benefit plans|
|5．Carry-over|
|retained|
|earnings from|

|||||||
|-|-|-|-|-|-|
|other||||||
|comprehensiv||||||
|e income||||||
|6. Other||||||
|(V)||||||
|Reasonable||||||
|reserve||||||
|1.||||||
|Withdrawal||||||
|in the report||||||
|period||||||
|2. Usage in||||||
|the report||||||
|period||||||
|(VI)Others||||||
||283,|||||
|||146,5|77,39|-212,39||
|IV. Balance at|161,||||294,743,|
|the end of the||87,27|1,593|7,072.2||
||227.||||019.49|
|report period||1.50|.25|6||
||00|||||

III. Company profile
(i) The registration place of the enterprise, the form of organization and the headquarters address
Shenzhen Zhongheng HUAFA Company Limited (hereinafter referred to as Company or the Company), established on 8 December 1981. Uniform social credit code 91440300618830372G.
Registered place and head office of the Company: 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Legal representative: Li Zhongqiu
Registered capital: RMB 283,161,227
(ii) The nature of the business and the main business activities
The Company belongs to the computer, telecommunication and manufacturing of other electronic equipment. Business scope: producing and sales of vary color TV set, liquid crystal display, LCD (operates in branch), radio-recorder, sound equipment, electronic watch, electronic game and computers, the printed wiring board, precision injection parts, light packaging material (operates in Wuhan) and hardware (including tool and mould) for various electronic products and supporting parts, plating and surface treatment and tin wire, development and operation of real estate (Shen Fang Di Zi No.: 7226760) and property management. Funded affiliated companies in Wuhan and Jilin. Setting up branches in capital of the province (Lhasa City excluded) in China and municipality directly under the central government.
(iii) Relevant party offering approval reporting of financial statements and date thereof
The financial statement has been deliberated and approved by BOD on 23 August 2019. According to Article of Association, the statement shall be submitted for deliberation in shareholders general meeting.
Consolidate scope in the Period including: parent company– Shenzhen Zhongheng HUAFA Company Limited, subsidiary including Shenzhen HUAFA Property Leasing Management Co., Ltd. (no annual inspection in 2011, and business license revoke on 1 April 2014), Shenzhen Zhongheng HUAFA property Co., Ltd., Wuhan Hengfa Technology Co., Ltd., Shenzhen HUAFA Hengtian Co., Ltd. and Shenzhen HUAFA Hengtai Co., Ltd. more of subsidiaries found in “Note IX. Equity in other subjects”.
IV. Preparation basis of Financial Statements
1. Preparation basis
Base on the running continuously and actual transactions and events, in line with the Accounting Standards for Business Enterprise– Basic Standards and specific principle of accounting standards issued by the Ministry of Finance, the Company prepared and formulate the financial statement lies on the followed important accounting policy and estimation.
2. Going concern
The Company estimated that the production and sales of the Company, in 12 months since end of the period, will in a virtuous cycle. We have good management and continuous operation ability, and there is no risk of continuing operations.
V. Important accounting policy and estimation
Notes on specific accounting policies and accounting estimation:
According to actual operation characteristic, the Group formulate specific accounting policy and accounting estimation, including trade cycle, reorganization and measurement on account bad debt provision of receivables, inventory measurement, classification and depreciation method of fixed assets, intangible assets amortization and reorganization and measurement of revenue etc.
1. Declaration of obedience to Accounting Standards for Business Enterprise
The Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterprise and also a true and thorough reflection to the relevant information as theCompany’s financial position dated 30th June 2019 and the operation results as well as cash flow for the first half year of 2019.
2. Accounting period
TheCompany’s accounting year is Gregorian calendar year, namely from
1st
January to
31st
December of every year.
3. Business cycle
TheCompany’s business cycle is one year (12 months) as a normal cycle, and the business cycle is the determining criterion for the liquidity of assets and liabilities of the Company.
4. Bookkeeping standard currency
The Renminbi (RMB) is taken as the book-keeping standard currency.
5. Accounting methods for consolidation of enterprises under the same control or otherwise
1. Consolidation of enterprises under the same control
Where the Company for long term equity investment arising from business combination under common control satisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, the carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by the Company as at the combination date shall be deemed as the initial investment cost of such long term equity investment. If the equity instrument issued by combining party are consider as the combination consideration, than the total value of the issuing shares are consider as the share capital. The difference between the initial cost of long-term equity investment and book value of consideration (or total face value of the shares issued) paid, capital surplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted.
2. Business combination not under common control
As for business combination not under common control, combination costs refer to the sum of the fair value of the assets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over the acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control, the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair value on day of purchased. If the consolidation cost larger than the fair value amount of identified net assets fromacquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair value amount of identified net assets fromacquiree’s, the differences should reckoned into current non-operating income.
6. Preparation methods for consolidated financial statements
1. Consolidation financial statement range
The Company includes all the subsidiaries (including the separate entities controlled by the Company) into consolidated financial statement, including companies controlled by the Company, non-integral part of the investees and structural main body.
2. Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries.
As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, the necessary adjustment is made on thesubsidiaries’ financial statements in the preparation of the consolidated financial statements according to theCompany’s accounting policies and periods.
3. Offset of consolidated financial statement
The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and within subsidiaries. Theowner’s equity of the subsidiaries not attributable to the parent company shall be presented as minority equity under theowner’s equity item in the consolidated balance sheet. The long term equity investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group as well as the reduction ofowners’ equity, shall be presented as “Less: treasury stock” under theowners’ equity item in the consolidated balance sheet.
4. Accounting for acquisition of subsidiary through combination
For subsidiaries acquired under enterprise merger involving enterprises under common control, the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial statements from the beginning of the financial year in which the combination took place. When preparing the consolidated financial statements, for the subsidiaries acquired from business combination not involving entities under common control, the identifiable net assets of the subsidiaries are adjusted on the basis of their fair values on the date of acquisition.
7. Classification of joint arrangements and accounting treatment of joint operation
1. Classification of joint arrangements
Joint arrangements are divided into joint operations and joint ventures. Joint arrangements achieved not through separate entities are classified as joint operations. Separate entities refer to the entities with separate identifiable financial architecture including separate legal entities and legally recognized entities without the qualification of legal entity. Joint arrangements achieved through separate entities are generally classified as joint ventures. In case of changes in rights entitled to and obligations undertaken by the parties of joint venture under a joint arrangement due to the changes in relevant facts and circumstances, the parties of joint venture will re-assess the
classification of joint arrangements.
2. Accounting treatment for joint operations
The parties of joint operation should recognize the following items in relation to their share of interest in joint operation, and proceed with accounting in accordance with the relevant provisions under the Accounting Standards for Business Enterprises: to recognize their separate assets or liabilities held, and recognize the assets or liabilities jointly held according to their respective shares; to recognize the income from the disposal of their output share under joint operation; to recognize the income from the disposal of output under joint operation according to their respective shares; to recognize the expenses incurred separately, and recognize the expenses incurred under joint operation according to their respective shares.
For the parties of a joint operation not under common control, if they are entitled to relevant assets and undertake relevant liabilities of the joint operation, accounting will be carried out with reference to the provisions of the parties of joint operation; otherwise, it should be subject to relevant Accounting Standards for Business Enterprises.
3. Accounting treatment for joint ventures
The parties of a joint venture should perform accounting for investments by the joint venture in accordance with the Accounting Standards for Business Enterprises No. 2– Long-term Equity Investments. The parties not under common control should carry out accounting depending on their influence on the joint venture.
8. Determination criteria of cash and cash equivalent
The cash recognized in the preparation of the cash flow statements, is theCompany’s storage cash and deposits available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer to known sum cash and has slim risk from value changes.
9. Foreign currency exchange and the conversion of foreign currency statements
1. Foreign currency exchange
The approximate exchange rate of the spot exchange rate on transaction occurred should be used for standard money conversion while foreign currency exchange occurred On the balance sheet day, the monetary items are converted on the current rate on the balance sheet day, concerning the exchange differences between the spot exchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date, should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specific loans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are still measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged. Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchange rate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency and original amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed)
reckoned into current gains/losses or recognized as other consolidated income.
2. Conversion of foreign currency financial statements
Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises, and the affiliated enterprises on the bookkeeping standard currency different from theCompany’s, the accounting check and preparation of the consolidated financial statements are made. Assets and liabilities items in the balance sheet are converted on the current rate on the balance sheet day;owners’ equity items besides the “retained profit” item, the other items are converted on the actual rate. Items of revenue and expenses in profit statement, should converted by the approximate exchange rate of spot exchange rate on occurring date. The conversion difference of the foreign currency financial statements is listed specifically in theowners’ equity in the balance sheet. If the foreign cash flow determined by rational system method, the approximate exchange rate of spot exchange rate on occurring date should prevail. The cash influenced by the rate fluctuation is listed specifically in the cash flow statement. As for the foreign operation, the conversion difference of the foreign currency statement related to the foreign operation is transferred in proportion into the disposal of the current loss/gain.
10. Financial instrument
Financial asset or financial liability is recognized when the Company becomes a party to financial instrument contract.
(1) Classification, recognition and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow characteristics of financial assets, the Company classifies the financial assets into the financial assets measured at amortized cost, the financial assets measured at fair value and whose changes are included in other comprehensive income, and the financial assets measured at fair value and whose changes are included in current profit or loss.
Financial assets are measured at fair value on initial recognition. For financial assets measured at fair value and whose changes are included in current profit or loss, the related transaction expenses are directly included in current profit or loss. For other types of financial assets, the related transaction costs are included in the initial recognition amount. For the accounts receivable or notes receivable arising from the sale of products or the provision of labor services that do not contain or consider the significant financing components, the Company uses the consideration amount that is expected to be received as the initial recognition amount.
①Financial assets measured at amortized cost
The Company's business model for managing financial assets measured at amortized cost is to collect contractual cash flows, and the contractual cash flow characteristics of such financial assets are consistent with the basic borrowing and lending arrangements, i.e. the cash flows generated on a specific date are only the payment for the principal and the interest based on the outstanding principal amount. The Company adopts effective interest method for this type of financial assets which are subsequently measured at amortized cost, the gains or losses arising from amortization or impairment are included in current profit or loss.
② Financial assets measured at fair value and whose changes are included in other comprehensive income The Company's business model for managing such financial assets is to target at both the collection of contractual
cash flows and the sale, and the contractual cash flow characteristics of such financial assets are consistent with the basic borrowing and lending arrangements. The Company adopts the fair value measurement for such financial assets and whose changes are included in the current profit and loss, but the impairment losses or gains, exchange gains and losses and interest income calculated by using the effective interest method are included in current profit or loss.
In addition, the Company designates part of non-trading equity instrument investments as financial assets measured at fair value and whose changes are included in other comprehensive income. The Company's related dividend income of such financial assets is included in the current profit and loss, and the changes in fair value are included in other comprehensive income. When the financial assets are derecognized, the accumulated gains or losses previously included in other comprehensive income are transferred from other comprehensive income to retained earnings, which are not included in current profit or loss.
③Financial assets carried at fair value through profit or loss for the current period
The Company classifies the financial assets except the above financial assets measured at amortized cost and the above financial assets measured at fair value and whose changes are included in other comprehensive income into the financial assets measured at fair value and whose changes are included in current profit or loss. In addition, at the time of initial recognition, the Company designates part of financial assets as financial assets measured at fair value and whose changes are included in current profit or loss in order to eliminate or significantly reduce accounting mismatch. For such financial assets, the Company adopts fair value for subsequent measurement, and changes in fair value are included in current profit and loss.
(2) Classification, recognition and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities measured by fair value with changes counted into current gains/losses and other financial liabilities. For financial liabilities classified as fair value through profit or loss, relevant transaction costs are directly recognized in profit or loss for the period. For financial liabilities classified as other categories, relevant transaction costs are included in the amount initially recognized.
① Financial liabilities at fair value through profit or loss for the period
Financial liabilities measured at fair value and whose changes are included in current profits or losses include the trading financial liabilities (including derivatives belong to financial liabilities) and the financial liabilities that are designated as fair value in the initial recognition and whose changes are included in current profit or loss.
Trading financial liabilities (including derivatives belong to financial liabilities) are subsequently measured at fair value, in addition to those related to hedge accounting, the changes in fair value are included in current profit or loss.
A financial liability designated to be measured at fair value and whose changes are included in current profit or loss, and of which the changes in fair value arising from changes in the Company's own credit risk are included in other comprehensive income, when the liability is derecognized, its accumulated amount of changes in fair value included in other comprehensive income and the changes arising from its own credit risk are transferred to retained earnings. The remaining changes in fair value are included in the current profit and loss. If the effects of
changes in the own credit risk of these financial liabilities are handled as described above, but the handling causes or expands the accounting mismatch in the profit or loss, the Company will include all gains or losses of the financial liabilities (including the amount affected by changes in the credit risk of the enterprise itself) in the current profit and loss.
② Other financial liabilities
Other financial liabilities, except for the financial liabilities whose transfer of financial assetsdoesn’t fit the derecognition condition or continue to be involved in the transferred financial assets, and the financial guarantee contract, are classified as financial liabilities measured at amortized cost, which takes follow-up measurement by amortized cost, the gains or losses arising from derecognition or amortization are included in current profit or loss. (3) Recognition basis and measurement method for transfer of financial assets
As for the financial assets up to the following conditions, the recognition termination is available:①Termination of the contract right to take the cash flow of the financial assets;② transferred to the transferring-in part nearly all risk and compensation;③ all risk and compensation neither transferred nor retained, and with the give-up of the control over the financial assets.
As for financial assets of almost all risk and compensation neither transferred nor retained, and without the give-up of the control over the financial assets, it was recognized according to the extension of the continual entry into the transferred financial assets and relevant liabilities are correspondingly recognized. The continual entry into the transferred financial assets is risk level which the enterprise faces up to due to the assets changes.
As for the whole transfer of the financial assets up to the recognition termination conditions, the book value of the transferred assets, together with the difference between the consideration value and the accumulative total of the fair value change of the other consolidated income, is reckoned into the current gain/loss.
As for the partial transfer of the financial assets up to the recognition termination conditions, the book value of the transferred assets is diluted on the relative fair value between the terminated part and the un-terminated part; and reckoned into the current loss/gain is the difference between the sum of the consideration value and the accumulative sum of the valuation change ought to be diluted into the recognition termination part but into the other consolidated income, and the above diluted book value, is reckoned into the current loss/gain.
For financial assets that are transferred with recourse or endorsement, the Group needs to determine whether the risk and rewards of ownership of the financial asset have been substantially transferred. If the risk and rewards of ownership of the financial asset have been substantially transferred, the financial assets shall be derecognized. If the risk and rewards of ownership of the financial asset have been retained, the financial assets shall not be derecognized. If the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, the Group shall assess whether the control over the financial asset is retained, and the financial assets shall be accounted for according to the above paragraphs.
(4) Termination recognition of financial liabilities
Only is released the whole (or part) of the current duties, the termination of the liabilities (or part of it) is available. The Group (the debtor) signed the agreement with the lender: the original liabilities are replaced by the bearing of the new liabilities; and the contract terms are fundamentally different of the new liabilities and the original ones;
the termination of the recognition of the original ones is available; and the recognition of new ones is available. If the Company makes substantial changes to the contractual terms of the original financial liabilities (or a part thereof), derecognize the original financial liabilities, and recognize a new financial liability in accordance with the revised terms.
If the financial liability (or a part thereof) is derecognized, the Company includes the difference between the book value and the consideration paid (including the transferred non-cash assets or liabilities assumed) in current profit or loss.
(5) Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the financial assets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet. In addition, the financial assets and liabilities are listed in the balance sheet without being balanced out.
(6) Method for determining the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can get by selling an asset or has to pay for transferring a liability in an orderly transaction that occurs on the measurement date. For a financial instrument having an active market, the Company uses the quoted prices in the active market to determine its fair value. Quotations in an active market refer to prices that are readily available from exchanges, brokers, industry associations, pricing services, etc., and represent the prices of market transactions that actually occur in an arm's length transaction. If there is no active market for a financial instrument, the Company uses valuation techniques to determine its fair value. Valuation techniques include reference to prices used in recent market transactions by parties familiar with the situation and through voluntary trade, and reference to current fair values of other financial instruments that are substantially identical, discounted cash flow methods, and option pricing models. At the time of valuation, the company adopts valuation techniques that are applicable in the current circumstances and that are sufficiently supported by data and other information, selects the input value with characteristics consistent with the characteristics of assets or liabilities to be considered in the transactions of the relevant assets or liabilities of the market participants, and uses the relevant observable input values as much as possible. Use unallowable input values if the relevant observable input values are not available or are not practicable.
(7) Impairment of financial assets
The financial assets that the Company needs to recognize impairment loss are financial assets measured at amortized cost, debt instruments investment that are measured at fair value and whose changes are included in other comprehensive income, and lease receivables, mainly including bills receivable, account receivables, other receivables, debt investment, other debt investments, long-term receivables, etc. In addition, for contract assets and some financial guarantee contracts, the impairment provision is also made and credit impairment losses are recognized in accordance with the accounting policies described in this section.
①Confirmation method of impairment provision
On the basis of expected credit losses, the Company makes provision for impairment and confirms credit impairment losses for each of the above items in accordance with its applicable expected credit loss measurement method (general method or simplified method).
Credit loss refers to the difference between all contractual cash flows that the Company discounts at the original actual interest rate and are receivable in accordance with contract and all cash flows expected to be received, that is, the present value of all cash shortages. Among them, for the purchase or source of financial assets that have suffered credit impairment, the Company discounts the financial assets at the actual interest rate adjusted by credit.
The general method for measuring the estimated credit loss is that the Company assesses whether the credit risk of the financial assets (including other applicable items such as contract assets, the same below) has been significantly increased since the initial recognition on each balance sheet date, if the credit risk has increased significantly after the initial recognition, the Company shall measure the loss preparation according to the amount of expected credit loss in the whole duration; if the credit risk has not increased significantly since the initial recognition, the Company shall measure the loss preparation according to the amount equivalent to the expected credit loss in the next 12 months. The Company considers all reasonable and evidenced information, including forward-looking information, when evaluating expected credit losses.
For the financial instrument with lower credit risk on the balance sheet date, the Company assumes that its credit risk has not increased significantly since the initial recognition, and measures the loss provisions according to the expected credit losses in the next 12 months.
② Judging criteria for whether credit risk has increased significantly since initial recognition
If the probability of default of a financial asset within the estimated duration recognized on the balance sheet is significantly higher than the probability of default within the estimated duration decided at the initial recognition, it indicates that the credit risk of the financial asset is significantly increased. Except for special circumstances, the Company uses the change in default risk occurring within the next 12 months as a reasonable estimate of the change in default risk throughout the duration to determine whether the credit risk has increased significantly since the initial recognition.
③A combined approach to assessing expected credit risk on a portfolio basis
The Company evaluates credit risk individually for financial assets with significantly different credit risks. Such as receivables from related parties; receivables that are in dispute with the other party or involve litigation or arbitration; receivables have clear indications that the debtor is likely to be unable to fulfill the repayment obligations.
In addition to financial assets that assess credit risk individually, the Company classifies financial assets into different groups based on common risk characteristics and evaluates credit risk on a portfolio basis.
④Accounting treatment of financial assets impairment
At the end of the period, the Company calculates the estimated credit losses of various financial assets. If the estimated credit loss is greater than the carrying amount of its current impairment provision, the difference is
recognized as the impairment loss; if it is less than the carrying amount of the current impairment provision, the difference is recognized as an impairment gain.
11.Note receivable
Found more in 10.(7)-Impairment of financial assets
12. Account receivable, account receivable
For receivables that do not contain significant financing components, the Company measures the loss provision based on the amount of expected credit losses equivalent to the entire duration of the period.
For receivables that contain significant financing components, the Company measures the loss provision always based on the amount of expected credit losses equivalent to the entire duration of the period.
In addition to accounts receivable whose credit risk is assessed individually, they are classified into different combinations based on their credit risk characteristics:
Item Basis
||
|-|
|Take the account age of receivable as the credit risk characteristics|
|The related parties in consolidate scope|

(8) Determination and accounting treatment on the expected credit losses of account receivable found more in 10(7)Impairment of financial assets above mentioned
13. Receivable financing
Including the note receivable and account receivable that measured on fair value and with its variation reckoned into other comprehensive income on balance sheet date.
14. Other account receivable
Determination and accounting treatment on the expected credit losses of other account receivable
The Company measures the impairment loss based on the amount of expected credit losses in the next 12 months or the entire duration based on whether the credit risk of other receivables has increased significantly since the initial recognition.
15. Inventory
Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. Categories of inventory
The inventory is goods or manufactured products held for sale, products in process, and materials and matters utilized in the production or supply of labor. Mainly including raw material, revolving materials, outside processing materials, wrappage, low-value consumption goods, goods in process, semi-finished goods, stocks and so on.
2. Accounting method for inventory delivery
When inventories are issued, the actual cost is determined by the first in first out method.
3. Accrual method inventory falling price reserves
On the balance sheet day, the inventory is measured on the lower one between the cost and the net realizable value, and the provision for the falling price reserves is accrued on each inventory item; however, as for the inventory of large quantity and low price, the provision is accrued on the inventory category.
4. Inventory system
Inventory system of the Company is perpetual inventory system
5. Amortization method for the low-value consumables and wrap page
Low-value consumables and packages are amortized by one-point method
16. Long-term equity investment
1. Recognition of initial investment cost
For a long-term equity investment obtained by a business combination, if it is a business combination under the same control, take the share of the combine party obtained in the book value of the net assets in the consolidated financial statements of the ultimate controlling party on the combination date as the initial investment cost; in the case of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognized consolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, the initial investment cost is the actual purchase payment. As for the long term equity investment obtained by the equity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-term equity investment obtained by debt reorganization, initial investment cost of such investment should determine by
relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; as for the long term equity investment obtained by the exchange of the non-monetary assets, the initial investment cost is recognized on the relevant rules in the “Accounting Standards for Business Enterprise No. 7- Exchange of Non-Monetary Assets”
2. Subsequent measurement and profit or loss recognition
Where the company has a control over the investee, long-term equity investments are measured using cost method. Long-term equity investments in associates and joint ventures are measured using equity method. Where part of the equity investments of an investor in its associates are held indirectly through venture investment institutions, common fund, trust companies or other similar entities including investment linked insurance funds, such part of equity investments indirectly held by the investor shall be measured at fair value through profit or loss according to according to relevant requirements of Accounting Standards for Business EnterprisesNo.22—Recognization and measurement of Financial Instruments regardless whether the above entities have significant influence on such part of equity investments, while the remaining part shall be measured using equity method.
3. Basis of conclusion for common control and significant influence over the investee
Joint control over an investee refers to where the activities which have a significant influence on return on certain arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes the sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets, research and development activities and financing activities, etc.; Significant influence on the investee refers to that: significant influence over the investee exists when holding more than20% but less than50% of the shares with voting rights or even if the holding is below20%, there is still significant influence if any of the following conditions is met: there is representative in the board of directors or similar governing body of the investee; participation in theinvestee’s policy setting process; assign key management to the investee; the investee relies on the technology or technical information of the investing company; or major transactions with the investee. 17. Investment real estate
Measurement for investment real estate
Cost method
Depreciation or amortization method
The types of investment real estate of the Company include the leased land use rights, leased buildings, and land use rights held and prepared for transfer after appreciation. Investment real estate is initially measured at cost and subsequently measured by using the cost model.
The leased buildings in theCompany’s investment property adopts straight-line depreciation to calculate and distill depreciation, specific accounting policy are same as part of the fixed assets. The leased land use rights in
the investment property and the land use rights to be transferred after appreciation adopt straight-line amortization, specific accounting policy are same as part of the intangible assets.
18. Fixed assets
(1) Recognition
Fixed assets refers to the tangible assets holding for purpose of producing goods, providing labor services, leasing or operation management, which has one accounting fiscal year of using life. Meanwhile as up to the following conditions, they are recognized: the economic interest related to the fixed assets probably flow into the Company; the cost of the fixed assets can be measured reliably.
(2) Depreciation method
||||||
|-|-|-|-|-|
|||||Annual depreciation|
|Category|Depreciation method|Depreciation life (year)|Salvage rate||
|||||rate|
||Straight-line||||
|House building||20-50|10.00|1.80-4.50|
||depreciation||||
||Straight-line||||
|Machinery equipment||10|10.00|9.00|
||depreciation||||
||Straight-line||||
|Mold equipment||3|10.00|30.00|
||depreciation||||
|Transportation|Straight-line||||
|||5|10.00|18.00|
|equipment|depreciation||||
||Straight-line||||
|Instrument equipment||5|10.00|18.00|
||depreciation||||
||Straight-line||||
|Tool equipment||5|10.00|18.00|
||depreciation||||
||Straight-line||||
|Office equipment||5|10.00|18.00|
||depreciation||||

The fixed assets of the Company mainly include buildings, machinery equipment, electronic equipment, transportation equipment, etc.; the method of depreciation is based on the straight-line method. Determine the useful life and estimated net residual value of fixed assets according to the nature and use of various types of fixed assets. At the end of the year, review the useful life, estimated net residual value, and depreciation method of fixed assets, if there is a difference from the original estimate, make corresponding adjustments. Except for the fixed assets that have been fully depreciated and continue to be used and the land that is separately accounted for, the Company calculates and depreciates all fixed assets.
(3) Recognition basis, valuation and depreciation method for fixed assets under financing lease
The fixed assets under financing lease are the lease that has substantially transferred all the risks and rewards associated with asset ownership. The initial valuation of the fixed assets under financing lease is to take the lower one between the fair value of the leased assets and the present value of the minimum lease payments on the start date of the lease period as the entry value; the subsequent valuation of the fixed assets under financing lease adopts the depreciation policy consistent with the own fixed assets to make depreciation and impairment provision.
19. Construction in process
Construction in process of the Company divided as self-run construction and out-bag construction. The Construction in process of the Company carried forward as fixed assets while the construction is ready for the intended use. Criteria of the expected condition for use should apply one of the follow conditions: The substance construction (installation included) of the fixed assets has completed all or basically; As the projects have been in test production or operation, and the results show that the assets can operate properly and produce the qualified products stably, or the test operation result shows the assets can operate or open properly. The expenditure of the fixed assets on the construction is a little or little. The fixed assets of the project constructed have been up to the requirements of the design or contract, or basically up to.
20. Borrowing expenses
1. Recognition principle on capitalization of borrowing expenses
As for theCompany’s actual borrowing expenses directly attributable to the assets construction or production, it is capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital assets, investment real estate, and inventory reaching the expectant availability or sale ability.
2. Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or production.
As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or premium to be diluted in every accounting period is recognized in the actual rate method.
The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future cash flow in the expectant duration period as the current book value of the borrowing.
21. Intangible assets
(1) Accounting method, service life and impairment test
1. Accounting method of intangible assets
TheCompany’s intangible assets are measured initially on cost. The intangible assets purchased in are taken as the actual cost on the actual payment and relevant expenditure. As for the intangible assets invested in by the investors, the actual cost is recognized on the value stipulated in the contract or agreement; however, if what is stipulated in the contract or agreement is not fair value, the actual cost is recognized on fair value. As for the self-developed intangible assets, their cost is the actual total expenditure before reaching the expectant purpose. The follow-up measurements of theCompany’s intangible assets respectively are: the line amortization method is taken on the intangible assets of finite service life, and at the yea-end, the check is taken on the service life and dilution of the intangible assets, and the corresponding adjustment is made if there is inconsistency with the previous expected ones. As for the intangible assets of uncertain service life, it is not diluted, however, the service life is checked at year-end; If there is solid evidence to its finite service life, its service life is estimated and diluted in straight line method.
2. Judgment basis for uncertain service life
The Company will not be able to foresee the time limit within which the asset brings economic benefits to the company, or the intangible assets with uncertain useful life identified as intangible assets with uncertain useful life. The basis for judging the uncertainty of useful life is from the contractual rights or other legal rights, but the contract stipulates or the law rules there is no definite useful life; combining the same industry case and or the relevant expert argumentation, it is still incapable of judging the time limit within which the intangible assets bring economic benefits to the company.
At the end of each year, review the useful life of intangible assets with indefinite useful life by mainly adopting the bottom-up method, the relevant departments of intangible assets take the basic review and evaluate whether there is any change in the judgment basis for indefinite useful life.
(2) Accounting policies for internal research and development expenditure
Expenditures for internal research and development projects at the research phase shall be included in the current profit or loss when incurred; expenditures incurred at the development phase and recognized as intangible assets shall be transferred to intangible assets accounting.
22. Long-term assets impairment
Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets, construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets and goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which theasset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of anasset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows.
Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective of whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carrying amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable basis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher than its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of the goodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (other than the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of each asset.
Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period.
23. Long-term deferred expenditure
TheCompany’s long-term deferred expenditure are expenses paid out and with one year above (one-year excluded) benefit period. The long-term deferred expenses are diluted by periods according to the benefit period. As the long-term deferred expenses cannot enable the accountingperiod’s beneficiary, all dilution values of the project undiluted yet, are transferred into the current loss/gain.
24. Employees remuneration
(1) Accounting for short-term benefits
In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit
or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for the current period. At the time of actual occurrence, TheCompany’s employee benefits are recorded into the profits and losses of the current year or assets associated costs according to the actual amount. The non-monetary employee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injury insurance, maternity insurance and other social insurances, housing fund and labor union expenditure and personnel education that the Company paid for employees, the Company should recognize corresponding employees benefits payable according to the appropriation basis and proportion as stipulated by relevant requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the current period or recognized as respective assets costs.
(2) Accounting for post-employment benefits
During the accounting period in which an employee provides service, the amount payable calculated under defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period or in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method and attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the service period of the employee, and record the obligation in the current profit and loss or related assets cost. (3) Accounting for termination benefits
The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlier of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the Company recognizes costs for restructuring involving the payment of termination costs.
(4) Accounting for other long-term employee benefits
The Company provides other long-term employee benefits to its employees. For those falling within the scope of defined contribution scheme, the Company shall account for them according to relevant requirements of the defined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets of the other long-term employee benefits according to relevant requirements of the defined contribution scheme. 25. Accrual liability
The obligation related to contingencies is the current obligation assumed by the company, and performing this obligation may result in an outflow of economic benefits, and this obligation can be determined as the estimated liabilities when the amount can be reliably measured. The Company makes initial measurement in accordance with the best estimate for performing the related current obligation, if the expenditure as needed has a continuous
range, and the likelihood of occurrence of various results in this range is the same, the best estimate is determined by the median value within the range; if a number of items are involved, the best estimate is determined by the calculation of various possible outcomes and related probabilities.
At the balance sheet date, the book value of estimated liabilities should be rechecked, if there is conclusive evidence indicates that this book value cannot truly reflect the current best estimate, and then the book value should be adjusted in accordance with the current best estimate.
26. Revenue
Whether the company needs to comply with the disclosure requirements of the particular industry
No
Whether implemented the new revenue standards
□Yes√No
1. Sales of goods
The Company shall ascertain the revenue incurred by selling goods in accordance with the received or receivable price stipulated in the contract or agreement signed between the enterprise and the buyer unless the following conditions are met simultaneously:① the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise;② the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods;③the relevant amount of revenue can be measured in a reliable way;④ relevant economic benefits may flow into the enterprise and⑤ the relevant costs incurred or to be incurred can be measured in a reliable way.
Money collection for the contract or agreement use the mode of deferred, actually has the financing features. The revenue of commodity sales is recognized by the fair value of the money receivable on contract or agreement. 2. Labor service providing
If an enterprise can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method. The enterprise can ascertain the schedule of completion (percentage-of-completion) under the transaction concerning the providing of labor services based on calculation of completed works.
If an enterprise cannot, on the date of the balance sheet, measure the result of a transaction concerning the providing of labor service in a reliable way, it shall be conducted in accordance with the following circumstances, respectively:①if the cost of labor services incurred is expected to be compensated, the revenue from the providing of labor services shall be recognized in accordance with the amount of the cost of labor services incurred, and the cost of labor services shall be carried forward at the same amount;②if the cost of labor services incurred is not expected to compensate, the cost incurred should be included in the current profits and losses, and no revenue from the providing of labor services may be recognized.
3. Transition of asset use right
When economic benefits relating to transition of asset use right is likely to inflow into the Company and the relevant income can be measured reliably, the Company shall recognize such income from transition of asset use right.
TheCompany’s specific income recognition method: it is recognized as income when the product has been sent out and signed for receipt by the other party for domestic sales; it is recognized as income when the product has been shipped and its customs procedures have been completed with the relevant declaration documents for export sales. Income from house leases and property management is recognized according to the lease contract
agreement, receipt of relevant payments, or relevant collection proof.
27. Government subsidy
1.Category of government subsidy and accounting treatment
Governments subsidy of the Company refer to the monetary and non-monetary assets obtained from government for free (excluding the capital invested by government as an owner). If the government grants are monetary assets, it shall be measured according to the amount received or receivable. If the government grants are non-monetary assets, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at the nominal amount.
Government grants related to daily activities are included in other income in accordance with the economic business. Government grants not related to daily activities are included in the non-operating income and expenditure.
Government grants that the government documents clearly stipulate to be used for the purchase and establishment or forming long-term assets in other way are recognized as government grants related to assets. For the government grants that the government documents do not clearly specify the subsidy target and can form long-term assets, the part corresponding to the asset value is recognized as the government grants related to the assets, and the rest is recognized as the government grants related to the income. For the government grants which are difficult to be distinguished, recognize the whole as the government grants related to the income. Government grants related to assets are recognized as deferred income. The amount recognized as deferred income is included in the current profit and loss in a reasonable and systematic manner within the useful life of the relevant asset. Government grants other than government grants related to assets are recognized as government grants related to income. If the government grants related to the income are used to compensate the related expenses or losses of the enterprise in the future period, recognize them as deferred income and include them in the current profit and loss during the period of recognizing the related expenses. The government grants used to compensate the relevant expenses or losses incurred by the enterprise are directly included in the current profit and loss.
The Company obtained the policy preferential loan interest subsidy, and the finance allocated the interest subsidy funds to the loan bank, and the loan bank provides loans to the Company at a preferential interest rate, take the actual amount of the loan received as the entry value of the loan, and calculate the relevant borrowing costs according to the loan principal the policy preferential interest rate. If the finance directly appropriates the interest
subsidy funds to the Company, the Company will offset the relevant borrowing costs with the corresponding interest subsidy.
2. Time points to recognize the government grants
Government grants are recognized when they meet the conditions attached to government grants and can be received. Government grants measured in accordance with the amount receivable are recognized when there is conclusive evidence at the end of the period that it meets the relevant conditions stipulated in the financial support policy and is expected to receive financial support funds. Other government grants other than government grants measured in accordance with the receivable amount are recognized when the grant is actually received.
28. Deferred income tax asset/Deferred income tax liability
1. Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for an item that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law, the tax base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay off.
2. The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet date, if there have concrete evidence of obtaining, in future period, enough taxable amounts to deduct the deductible temporary difference, the un-confirmed deferred income tax assets in previous accounting period shall be recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income tax assets, book value of the deferred income tax assets shall be kept in decreased.
3. The taxable temporary differences related to the investments of subsidiary companies and associated enterprises shall recognized as deferred income tax liability, unless the Company can control the time of the reverse of temporary differences and the temporary differences are unlikely to be reversed in the expected future. As for the deductible temporary difference related to the investment of the subsidiary companies and associated enterprises, deferred income tax assets shall be recognized while the temporary differences are likely to be reversed in the expected future and it is likely to acquire any amount of taxable income tax that may be used for making up the deductible temporary differences.
29. Leasing
(1) Accounting treatment for operating lease
Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss for the period.
(2) Accounting treatment for finance lease
Accounting treatment for finance lease: At the commencement of the lease term, the Group records the leased asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge, using the effective interest method amortization during the lease term. Minimum lease payments deducting unrecognized financing charges are listed as long-term payable.
30. Changes in important accounting policies and estimates
(1)Changes in important accounting policies
√ Applicable□Not applicable
||||
|-|-|-|
|Content and reason of changes in|||
||Approval procedure|Note|
|accounting policies|||
|The Ministry of Finance issued the|||
|Accounting Standards for Business|||
|Enterprise No. 22- Recognition and|||
|Measurement of Financial Instruments,|||
|Accounting Standards for Business|||
|Enterprise No. 23- Transfer of Financial|||
|Assets, Accounting Standards for|||
|Business Enterprise No. 24- Hedge|||
|Accounting and Accounting Standards|Change of the accounting policy has||
|for Business Enterprise No. 37-|deliberated and approved by the 11th||
|Presentation of Financial Instruments|session of 9th BOD||
|after revised in 2017 ( these four items|||
|are collectively referred to as the new|||
|financial instrument standards).The|||
|Company implemented the above|||
|mentioned new standards after revision|||
|since 1st January 2019, and relevant|||
|content with accounting policy|||
|concerned are been adjusted.|||
|In April 2019, the Ministry of Finance|||
|issued the Notice on Revision and|||
|Issuance of 2019 Financial Statement|||
||Change of the accounting policy has||
|Format for General Corporate (Cai Kuai|||
||deliberated and approved by the 11th||
|[2019] No.6) (hereinafter referred to as|||
||session of 9th BOD||
|Financial Statement Format), in terms of|||
|the financial statement of mid-term|||
|2019, the annual financial statement and|||

||
|-|
|later period’s financial statement are|
|required to preparing in line with the|
|Accounting Standards for Business|
|Enterprise and Financial Statement|
|Format.|

The Company will implement the relevant regulation of Cai Kuai (2019) No.6 issued by Ministry of Finance, relevant financial statements are been adjusted. Items and amount has major influence on 31st December 2018 in balance sheet are as:
Item Consolidate balance sheet
|||
|-|-|
|Before adjustment|After adjustment|
|185,983,351.22||
||69,185,516.71|
||116,797,834.51|
|88,617,663.09||
||27,642,356.66|
||60,975,306.43|

(2)Changes in important accounting estimates
□ Applicable√Not applicable
(3)Adjustment the financial statements at the beginning of the first year of implementation of new financial instrument standards, new revenue standards and new leasing standards
□ Applicable√Not applicable
(4)Retrospective adjustment of early comparison data description when initially implemented the new financial instrument standards and new leasing standards
□ Applicable√Not applicable
VI. Taxes
1. Major tax and tax rate
||||
|-|-|-|
|Taxes|Taxation basis|Tax rate|
|VAT|Domestic sales revenue|16%, 13% 6%, 5%, 3%|
|Urban maintenance and construction tax|Turnover tax payable|7%|
|Corporate income tax|Taxable income|15%, 25%|
|Educational surtax|Turnover tax payable|3%|
|Local educational surtax|Turnover tax payable|2%, 1.5%|
|Property tax|0% of original value of the property|1.2%|

Explain the different taxation entity of the enterprise income tax
|||
|-|-|
|Taxation entity|Income tax rate|
|Shenzhen Zhongheng Huafa Co., Ltd.|25%|
|Wuhan Hengfa Technology Co., Ltd.|15%|

2. Tax preferences
According to the “Measures for the Determination of High-tech Enterprises”, and through the enterprise application, expert review, and public announcement and other procedures, theCompany’s wholly-owned subsidiary, Wuhan Hengfa Technology Co., Ltd., has been identified as a high-tech enterprise, and obtained the “High-tech Enterprise Certificate” jointly issued by the Science and Technology Department of Hubei Province, Hubei Provincial Finance Department, Hubei Provincial Office, SAT, and Local Taxation Bureau of Hubei Province on November 28, 2017, the certificate number is GR201742001840, which is valid for 3 years. The applicable corporate income tax rate of the subsidiary Wuhan Hengfa Technology Co., Ltd. for 2018 was15%. VII. Notes to main items in consolidated financial statement
1. Monetary fund
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Cash on hand||426,742.83|236,354.29|
|Bank deposit||37,614,899.02|28,935,450.70|
|Other monetary fund||9,939,899.76|4,936,525.28|
|Total|47,981,541.61||34,108,330.27|

 Other explanation
Other monetary funds are bank acceptance deposits.
2. Note receivable
(1)Category
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Bank acceptance bill||4,773,726.59|56,817,845.23|
|Commercial acceptance bill||5,654,208.28|12,367,671.48|
|Total|10,427,934.87||69,185,516.71|

RMB/CNY
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||||Bad debt||||||||
||Book balance|||||Book balance||Bad debt provision|||
|Category|||provision||Book|||||Book|
||Amoun|Proport|Amoun|Accrua|value|Amoun|Proport||Accrual|value|
|||||||||Amount|||
||t|ion|t|l ratio||t|ion||ratio||
|Including:|||||||||||
|Including:|||||||||||

Accrual of bad debt provision on single basis:
RMB/CNY
||||||
|-|-|-|-|-|
||Closing balance||||
|Name|||||
||Book balance|Bad debt provision|Accrual ratio|Accrual causes|

 Accrual of bad debt provision on portfolio:
RMB/CNY
|||||
|-|-|-|-|
||Closing balance|||
|Name||||
||Book balance|Bad debt provision|Accrual ratio|

Explanation on portfolio basis:
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable√Not applicable
(2)Note receivable that pledged at period-end
RMB/CNY
|||
|-|-|
|Item|Amount pledged at period-end|
|Bank acceptance bill|3,866,647.92|
|Total|3,866,647.92|

 (3)Notes endorsement or discount and undue on balance sheet date
RMB/CNY
||||
|-|-|-|
|Item|Amount derecognition at period-end|Amount not derecognition at period-end|
|Bank acceptance bill|21,094,964.31||
|Commercial acceptance bill|48,107,418.75||
|Total|69,202,383.06||

3. Account receivable
(1)Category
RMB/CNY
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance||||||Opening balance|||||
||||Bad debt|||||||||
||Book balance||||||Book balance||Bad debt provision|||
|Category|||provision|||Book|||||Book|
||Amoun|Proport|Amoun|Accrua||value|Amoun|Proport|Amoun|Accrual|value|
||t|ion|t|l ratio|||t|ion|t|ratio||
|Account receivable||||||||||||
|with bad debt|13,144,||13,144,|100.00|||13,144,||13,144,|100.00||
|||8.08%||||0.00||8.08%|||0.00|
|provision accrual|007.21||007.21|%|||007.21||007.21|%||
|on a single basis||||||||||||
|Including:||||||||||||
|Account receivable||||||||||||
|with single||||||||||||
|significant amount|7,556,3||7,556,3|100.00|||7,556,3||7,556,3|100.00||
|||4.64%||||0.00||4.64%|||0.00|
|and withdrawal|63.72||63.72|%|||63.72||63.72|%||
|bad debt provision||||||||||||
|on single basis||||||||||||
|Account receivable||||||||||||
|with single minor||||||||||||
|amount but with|5,587,6||5,587,6|100.00|||5,587,6||5,587,6|100.00||
|||3.43%||||0.00||3.43%|||0.00|
|bad debts provision|43.49||43.49|%|||43.49||43.49|%||
|accrued on a single||||||||||||
|basis||||||||||||
|Account receivable||||||||||||
||149,54|||||149,54|116,79|||||
|with bad debt||91.92|||||||||116,797,8|
||1,677.7||811.28|0.00%||0,866.4|8,645.7|91.88%|811.28|0.01%||
|provision accrual||%|||||||||34.51|
||4|||||6|9|||||
|on portfolio||||||||||||
|Including:||||||||||||
||162,68||||149,540,866.46||129,94|||||
||||13,144,||||||13,144,||116,797,8|
|Total|5,684.9||||||2,653.0|||||
||||818.49||||||818.49||34.51|
||5||||||0|||||

Accrual of bad debt provision on single basis: 7,556,363.72 Yuan
RMB/CNY
|||||||
|-|-|-|-|-|-|
||Closing balance|||||
|Name||||||
||Book balance|Bad debt provision||Accrual ratio|Accrual causes|
|Shenzhen Portman|2,555,374.75|2,555,374.7|5|100.00%|Uncollectible|

||||||
|-|-|-|-|-|
|Bowling Club Co.,|||||
|Ltd.|||||
|Hong Kong Haowei|||||
||1,870,887.18|1,870,887.18|100.00%|Uncollectible|
|Industrial Co. Ltd.|||||
|TCL ACE ELECTRIC|||||
|APPLIANCE|||||
||1,325,431.75|1,325,431.75|100.00%|Uncollectible|
|(HUIZHOU) CO.,|||||
|LTD.|||||
|Qingdao Haier Parts|||||
||1,225,326.15|1,225,326.15|100.00%|Uncollectible|
|Procurement Co., Ltd.|||||
|SKYWORTH|||||
|Multimedia|579,343.89|579,343.89|100.00%|Uncollectible|
|(Shenzhen) Co., Ltd.|||||
|Total|7,556,363.72|7,556,363.72|--|--|

Accrual of bad debt provision on single basis: 5,587,643.49 Yuan
RMB/CNY
||||||
|-|-|-|-|-|
||Closing balance||||
|Name|||||
||Book balance|Bad debt provision|Accrual ratio|Accrual causes|
|Shenzhen Huixin|||||
|Video Technology Co.,|381,168.96|381,168.96|100.00%|Uncollectible|
|Ltd.|||||
|Shenzhen Wandelai|||||
|Digital Technology|351,813.70|351,813.70|100.00%|Uncollectible|
|Co., Ltd.|||||
|Shenzhen Dalong|||||
||344,700.00|344,700.00|100.00%|Uncollectible|
|Electronic Co., Ltd.|||||
|Shenzhen Keya|||||
||332,337.76|332,337.76|100.00%|Uncollectible|
|Electronic Co., Ltd.|||||
|Shenzhen Qunping|||||
||304,542.95|304,542.95|100.00%|Uncollectible|
|Electronic Co., Ltd.|||||
|China Galaxy|||||
|Electronics (Hong|288,261.17|288,261.17|100.00%|Uncollectible|
|Kong) Co., Ltd.|||||
|Dongguan Weite|||||
||274,399.80|274,399.80|100.00%|Uncollectible|
|Electronic Co., Ltd.|||||
|Chuangjing|247,811.87|247,811.87|100.00%|Uncollectible|
|Hong Kong New|||||
|Century Electronics|207,409.40|207,409.40|100.00%|Uncollectible|
|Co., Ltd.|||||

||||||
|-|-|-|-|-|
|Shenyang Beitai|||||
||203,304.02|203,304.02|100.00%|Uncollectible|
|Electronic Co., Ltd.|||||
|Beijing Xinfang Weiye|||||
||193,000.00|193,000.00|100.00%|Uncollectible|
|Technology Co., Ltd.|||||
|TCL Electronics|||||
||145,087.14|145,087.14|100.00%|Uncollectible|
|(Hong Kong) Co., Ltd.|||||
|Huizhou TCL Xinte|||||
||142,707.14|142,707.14|100.00%|Uncollectible|
|Electronics Co., Ltd.|||||
|SkyWorth – RGB|||||
||133,485.83|133,485.83|100.00%|Uncollectible|
|Electronic Co., Ltd.|||||
|Other|2,037,613.75|2,037,613.75|100.00%|Uncollectible|
|Total|5,587,643.49|5,587,643.49|--|--|

Accrual of bad debt provision on single basis:
RMB/CNY
||||||
|-|-|-|-|-|
||Closing balance||||
|Name|||||
||Book balance|Bad debt provision|Accrual ratio|Accrual causes|

Accrual of bad debt provision on portfolio: 811.28 Yuan
RMB/CNY
|||||
|-|-|-|-|
||Closing balance|||
|Name||||
||Book balance|Bad debt provision|Accrual ratio|
|Account age|149,541,677.74|811.28||
|Total|149,541,677.74|811.28|--|

Explanation on portfolio basis:
Accrual of bad debt provision on portfolio:
RMB/CNY
|||||
|-|-|-|-|
||Closing balance|||
|Name||||
||Book balance|Bad debt provision|Accrual ratio|

Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable√Not applicable
By account age
RMB/CNY
|||
|-|-|
|Account age|Closing balance|
|Within one year(One year included)|149,536,867.00|
||149,536,867.00|
|1-2 years|2,527.77|

|||
|-|-|
|Over 3 years|2,282.97|
|3-4 years|2,282.97|
|Total|149,541,677.74|

 (2)Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Amount changed in the period||||
|Category|Opening balance||Collected or||Closing balance|
|||Accrual||Written-off||
||||reversal|||

Including major amount bad debt provision that collected or reversal in the period:
RMB/CNY
||||
|-|-|-|
|Enterprise|Amount collected or reversal|Collection by|

(3)Account receivable actually written-off in the period
RMB/CNY
|||
|-|-|
|Item|Amount written-off|

Including major account receivable written-off :
RMB/CNY
|||||||
|-|-|-|-|-|-|
||||||Amount arising|
||Nature of account|Amount|Causes of|Procedures of||
|Enterprise|||||from related|
||receivable|written-off|written-off|written-off||
||||||transactions (Y/N)|

 Explanation on account receivable written-off:
(4)Top 5 account receivables at ending balance by arrears party
Total period-end balance of top five receivables by arrears party amounting to 138,920,788.78 Yuan, takes 85.39 percent of the total account receivable at period-end, bad debt provision accrual correspondingly at year-end amounting as 0 Yuan.
4. Account paid in advance
(1) By account age
RMB/CNY
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Account age|||||
||Amount|Ratio|Amount|Ratio|
|Within one year|28,212,818.13|99.28%|31,254,429.54|99.42%|

|||||||
|-|-|-|-|-|-|
|1-2 years||135,695.39|0.48%|94,000.00|0.40%|
|2-3 years||70,086.94|0.25%||0.18%|
|Total|28,418,600.46||--|31,348,429.54|--|

Explanation on reasons of failure to settle on important account paid in advance with age over one year:
Nil
(2)Top 5 account paid in advance at ending balance by prepayment object
Total period-end balance of top five account paid in advance by prepayment object amounted to 26,129,883.92 Yuan, takes 91.95 percent of the total advance payment at period-end.
Other explanation:
Nil
5. Other account receivable
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Other account receivable||5,781,851.15|5,777,179.08|
|Total|5,781,851.15||5,777,179.08|

 (1)Other account receivable
1) By nature
RMB/CNY
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Margin and deposit|1,793,485.04|1,793,485.04|
|Borrow money|2,005,861.48|1,973,013.76|
|Intercourse funds|11,333,647.83|10,108,494.46|
|Rent receivable|5,918,159.34|6,317,469.46|
|Other|0.00|845,586.40|
|Total|21,051,153.69|21,038,049.12|

 2)Accrual of bad debt provision
RMB/CNY
||||||
|-|-|-|-|-|
||Phase I|Phase II|Phase III||
|||Expected credit losses for|Expected credit losses for||
||Expected credit||||
|Bad debt provision||||Total|
|||the entire duration|the entire duration (with||
||losses over next 12||||
|||(without credit|credit impairment||
||months||||
|||impairment occurred)|occurred)||

||||||
|-|-|-|-|-|
|Balance on Jan. 1,|||||
||15,260,870.04|||15,260,870.04|
|2019|||||
|Balance of Jan. 1, 2019|||||
||——|——|——|——|
|in the period|||||
|Current accrual|8,432.50|||8,432.50|
|Balance on Jun. 30,|||||
||15,269,302.54|||15,269,302.54|
|2019|||||

Change of book balance of loss provision with amount has major changes in the period
□ Applicable√Not applicable
By account age
RMB/CNY
|||
|-|-|
|Account age|Closing balance|
|Within one year(One year included)|4,786,976.16|
||4,786,976.16|
|1-2 years|54,876.99|
|2-3 years|848,718.00|
|Over 3 years|91,280.00|
|3-4 years|91,280.00|
|Total|5,781,851.15|

 3) Top 5 other account receivables at ending balance by arrears party
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||||Ratio in total||
||||||Closing balance of|
|Enterprise|Nature|Closing balance|Account age|ending balance of||
||||||bad debt reserve|
|||||other receivables||
|Portman|Rent receivable|4,021,734.22|Over 3 years|19.10%|4,021,734.22|
|Shenzhen Jifang||||||
|Investment Co.,|Rent receivable|1,380,608.00|Over one year|6.56%|1,380,608.00|
|Ltd||||||
|Wuwu Branch of||||||
|Shenzhen||||||
||Deposit for leasing|740,909.97|Within one year|3.52%||
|Dachong||||||
|Industrial Co., Ltd.||||||
|Zhao Baomin|Rent receivable|553,901.68|Over 3 years|2.63%|564,646.35|
|Traffic accident||||||
||Intercourse funds|555,785.81|Over 3 years|2.64%|555,785.81|
|compensation||||||
|Total|--|7,252,939.68|--|34.45%|6,522,774.38|

6. Inventory
Whether implemented the new revenue standards
□Yes√No
(1)Category
RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Provision for|||Provision for||
||Book balance||Book value|Book balance||Book value|
|||price fall-down|||price fall-down||
|Raw materials|42,796,975.03|1,539,330.06|41,215,197.14|39,497,353.01|1,695,940.61|37,801,412.40|
|Inventory|||||||
||40,987,482.00|1,083,796.82|39,903,685.18|24,483,140.41|1,543,123.71|22,940,016.70|
|goods|||||||
|Low priced and|||||||
|easily worn|313,838.99|0.00|356,286.82|216,771.16|35,563.68|181,207.48|
|articles|||||||
|Homemade|||||||
|semi-finished|5,639,117.53|404,744.91|5,234,372.62|2,175,657.06|124,384.26|2,051,272.80|
|products|||||||
|Total|89,737,413.55|3,027,871.79|86,709,541.76|66,372,921.64|3,399,012.26|62,973,909.38|

 Whether the Company needs to comply with the disclosure requirement of Industry Information Disclosure Guidelines of Shenzhen Stock Exchange No.4 -Listed Companies Engaged in Seed Planting Business
No
(2)Provision for price fall-down
RMB/CNY
||||||||
|-|-|-|-|-|-|-|
|||Current increased||Current decreased|||
||Opening|||||Closing|
|Item||||Reversal or|||
||balance|Accrual|Other||Other|balance|
|||||write-off|||
|Raw materials|1,695,940.61|||156,610.55||1,539,330.06|
|Inventory|||||||
||1,543,123.71|||459,326.89||1,083,796.82|
|goods|||||||
|Low priced and|||||||
|easily worn|35,563.68|||35,563.68|||
|articles|||||||
|Homemade|||||||
|semi-finished|124,384.26|280,360.65||||404,744.91|
|products|||||||

|||||||
|-|-|-|-|-|-|
|Total|3,399,012.26|280,360.65|0.00|651,501.12|3,027,871.79|

 Nil
7. Other current assets
Whether implemented the new revenue standards
□Yes√No
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Value-added tax to be deducted||1,176,381.08|17,055.88|
|Advance payment of income tax||42,314.30|42,314.30|
|Total|1,218,695.38||59,370.18|

 Other explanation
8. Investment real estate
(1) Investment real estate measured at cost
√ Applicable□Not applicable
RMB/CNY
||||||
|-|-|-|-|-|
||||Construction in||
|Item|House and building|Land use right||Total|
||||process||
|I. Original book value|||||
|1.Opening balance|133,661,686.94|||133,661,686.94|
|2.Current increased|||||
|(1) Outsourcing|||||
|(2)inventory\fixed|||||
|assets\construction in|||||
|process transfer-in|||||
|(3)increased by|||||
|combination|||||
|3.Current decreased|||||
|(1) Disposal|||||
|(2) other transfer-out|||||
|4.Closing balance|133,661,686.94|||133,661,686.94|
|II. Accumulated|||||

|||||
|-|-|-|-|
|depreciation and||||
|accumulated||||
|amortization||||
|1.Opening balance|82,980,364.08||82,980,364.08|
|2.Current increased|864,165.14||864,165.14|
|(1) Accrual or||||
||864,165.14||864,165.14|
|amortization||||
|3.Current decreased||||
|(1) Disposal||||
|(2) other transfer-out||||
|4.Closing balance|83,844,529.22||83,844,529.22|
|III. Depreciation||||
|reserves||||
|1.Opening balance||||
|2.Current increased||||
|(1)Accrual||||
|3. Current decreased||||
|(1) Disposal||||
|(2) other transfer-out||||
|4.Closing balance||||
|IV. Book value||||
|1.Ending book value|49,817,157.72|49,817,157.72||
|2.Opening book value|50,681,322.86||50,681,322.86|

 9. Fixed assets
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Fixed assets||92,150,629.83|95,226,401.69|
|Disposal of fixed assets||92,857,471.69|92,857,471.69|
|Total|185,008,101.52||188,083,873.38|

(1)Fixed asset
RMB/CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
||House||Transportat|Tool|Office|Mold|||
|Item||Machinery|||||Instrument|Total|
||building||ion|equipment|equipment|equipment|||
|||equipment|||||equipment||
||||equipment||||||
|I. Original|||||||||
|book value|||||||||
||65,608,798|90,197,960|5,960,519.|6,552,700.|6,325,043.|16,231,125|3,137,707.|194,013,85|
|1.Opening|||||||||
||.85|.43|70|16|73|.01|65|5.53|
|balance|||||||||
|||1,719,220.||||||2,844,194.|
|2.Current||||424,216.15|27,792.74|665,886.99|7,077.88||
|||35||||||11|
|increased|||||||||
|(1)||1,719,220.||||||2,844,194.|
|||||424,216.15|27,792.74|665,886.99|7,077.88||
|Purchasing||35||||||11|
|(2)Constru|||||||||
|ction in|||||||||
|process|||||||||
|transfer-in|||||||||
|(3)increase|||||||||
|d by|||||||||
|combinatio|||||||||
|n|||||||||
|||1,101,038.||||||1,198,718.|
|3.Current||||85,470.09|||12,210.00||
|||34||||||43|
|decreased|||||||||
|(1)|||||||||
|||1,101,038.||||||1,198,718.|
|Disposal or||||85,470.09|||12,210.00||
|||34||||||43|
|scrapping|||||||||
||65,608,798|90,816,142|5,960,519.|6,891,446.|6,352,836.|16,897,012|3,132,575.|195,659,33|
|4.Closing|||||||||
||.85|.44|70|22|47|.00|53|1.21|
|balance|||||||||
|II.|||||||||
|Accumulati|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|ve|||||||||
|depreciatio|||||||||
|n|||||||||
||16,797,572|58,664,225|4,178,805.|2,960,180.|4,171,441.|9,535,972.|2,479,255.|98,787,453|
|1.Opening|||||||||
||.46|.14|31|84|92|63|54|.84|
|balance|||||||||
|||2,302,459.||||1,486,528.||5,765,319.|
|2.Current|962,101.85||368,771.97|438,939.57|148,478.01||58,040.38||
|||41||||54||73|
|increased|||||||||
|||2,302,459.||||1,486,528.||5,765,319.|
||962,101.85||368,771.97|438,939.57|148,478.01||58,040.38||
|(1)Accrual||41||||54||73|
|||||||||1,044,072.|
|3.Current||990,775.51||42,307.68|||10,989.00||
|||||||||19|
|decreased|||||||||
|(1)|||||||||
|||||||||1,044,072.|
|Disposal or||990,775.51||42,307.68|||10,989.00||
|||||||||19|
|scrapping|||||||||
||17,759,674|59,975,909|4,547,577.|3,356,812.|4,319,919.|11,022,501|2,526,306.|103,508,70|
|4.Closing|||||||||
||.31|.04|28|73|93|.17|92|1.38|
|balance|||||||||
|III.|||||||||
|Depreciatio|||||||||
|n reserves|||||||||
|1.Opening|||||||||
|balance|||||||||
|2.Current|||||||||
|increased|||||||||
|(1)Accrual|||||||||
|3.Current|||||||||
|decreased|||||||||
|(1)|||||||||
|Disposal or|||||||||
|scrapping|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|4.Closing|||||||||
|balance|||||||||
|IV. Book|||||||||
|value|||||||||
|1.Ending|47,849,124|30,840,233|1,412,942.|3,534,633.|2,032,916.|5,874,510.||92,150,629|
||||||||606,268.61||
|book value|.54|.40|42|49|54|83||.83|
||48,811,226|31,533,735|1,781,714.|3,592,519.|2,153,601.|6,695,152.||95,226,401|
|2.Opening|||||||658,452.11||
||.39|.29|39|32|81|38||.69|
|book value|||||||||

(2)Fixed assets leasing-out by operational lease
RMB/CNY
|||
|-|-|
|Item|Ending book value|
|House building|826,662.23|

 (3)Disposal of fixed assets
RMB/CNY
||||||
|-|-|-|-|-|
|Item||Closing balance||Opening balance|
|Renovation of Gongming Huafa Electric|||||
|||92,857,471.69||92,857,471.69|
|Town|||||
|Total|92,857,471.69||92,857,471.69||

 Other explanation
Nil
10. Construction in process
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Construction in process||7,552,776.46|5,727,760.23|
|Total|7,552,776.46||5,727,760.23|

 (1)Construction in process
RMB/CNY
||||
|-|-|-|
|Item|Closing balance|Opening balance|

||||||||||
|-|-|-|-|-|-|-|-|-|
|||Impairment||||Impairment|||
||Book balance|||Book value|Book balance|||Book value|
|||provision||||provision|||
|Expansion for|||||||||
|the plastic|||||||||
||7,552,776.46|||7,552,776.46|5,727,760.23|||5,727,760.23|
|injection 3#|||||||||
|plant|||||||||
|Total|7,552,776.46||7,552,776.46||5,727,760.23||5,727,760.23||

 (2) change of major construction in process in the period
RMB/CNY
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||includi|||
||||||||||Accum||||
||||||||Propor|||ng:|Interes||
|||||Fixed|||||ulated||||
||||||Other||tion of|||interes|t||
|||Openi|Curren|assets||Closin|||amoun||||
||||||decrea||project|||t|capital||
|||ng|t|transfe||g||Progre|t of|||Source of|
|Item|Budget||||sed in||invest|||capital|ization||
|||balanc|increas|r-in in||balanc||ss|interes|||funds|
||||||the||ment|||ized|rate of||
|||e|ed|the||e|||t||||
||||||Period||in|||amoun|the||
|||||Period|||||capital||||
||||||||budget|||t of the|year||
||||||||||ization||||
|||||||||||year|||
|Expan|||||||||||||
|sion|||||||||||||
|for 3#|||||||||||||
|||5,727,|1,825,|||7,552,|||||||
|injecti|||||||||||||
|||760.23|016.23|||776.46|||||||
|on|||||||||||||
|moldin|||||||||||||
|g Plant|||||||||||||
|||5,727,|1,825,|||7,552,|||||||
|Total|||||||--|--||||--|
|||760.23|016.23|||776.46|||||||

11. Intangible assets
(1)Intangible assets
RMB/CNY
|||||||
|-|-|-|-|-|-|
||||Non-patented|||
|Item|Land use right|Patent right||Software charges|Total|
||||technology|||
|I. Original book||||||
|value||||||
|1.Opening||||||
||55,089,774.36|||661,878.97|55,751,653.33|
|balance||||||

|||||
|-|-|-|-|
|2.Current||||
|increased||||
|(1)||||
|||3,034,537.44|3,034,537.44|
|Purchasing||||
|(2) internal||||
|R&D||||
|(3)increased by||||
|combination||||
|3.Current||||
|decreased||||
|(1)||||
|Disposal||||
|4.Closing||||
||55,089,774.36|3,696,416.41|58,786,190.77|
|balance||||
|II. Accumulated||||
|amortization||||
|1.Opening||||
||13,434,017.64|501,945.95|13,935,963.59|
|balance||||
|2.Current||||
||722,744.45|149,730.49|872,474.94|
|increased||||
|(1)Accrual|722,744.45|149,730.49|872,474.94|
|3.Current||||
|decreased||||
|(1)||||
|Disposal||||
|4.Closing||||
||14,156,762.09|651,676.44|14,808,438.53|
|balance||||
|III. Depreciation||||
|reserves||||
|1.Opening||||
|balance||||
|2.Current||||
|increased||||

|||||
|-|-|-|-|
|(1)Accrual||||
|3.Current||||
|decreased||||
|(1) Disposal||||
|4.Closing||||
|balance||||
|IV. Book value||||
|1.Ending||||
||40,933,012.27|3,044,739.97|43,977,752.24|
|book value||||
|2.Opening||||
||41,655,756.72|159,933.02|41,815,689.74|
|book value||||

The proportion of intangible assets form by internalR&D in total book value of intangible assets at period-end
12. Long-term deferred expenditure
RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||||Amortized in||||
|Item|Opening balance|Current increased||Other decreased||Closing balance|
||||Period||||
|Golf membership|||||||
|fee|||||||
|Cloud service|||||||
||542,116.99||116,167.92|||425,949.07|
|charge|||||||
|Total|542,116.99||116,167.92||425,949.07||

 Other explanation
Nil
13. Deferred income tax asset/Deferred income tax liability
(1)Deferred income tax assets without offset
RMB/CNY
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||differences|asset|differences|asset|
|Provision for assets|||||
||28,641,162.99|6,813,753.84|28,641,162.96|6,813,753.84|
|impairment|||||
|Accrual liability|64,411.00|16,102.75|64,411.00|16,102.75|

||||||
|-|-|-|-|-|
|Total|28,705,573.99|6,829,856.59|28,705,573.96|6,829,856.59|

 (2)Amount of deferred income tax asset and deferred income tax liability after trade-off
RMB/CNY
|||||||
|-|-|-|-|-|-|
||||Ending balance of|Trade-off between the|Opening balance of|
||Trade-off between the|||||
||||deferred income tax|deferred income tax|deferred income tax|
|Item|deferred income tax|||||
||||assets or liabilities|assets and liabilities at|assets or liabilities|
||assets and liabilities|||||
||||after off-set|period-begin|after off-set|
|Deferred income tax||6,829,856.59||||
||||||6,829,856.59|
|asset||||||

(3)Deferred income tax asset without recognized
RMB/CNY
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible temporary differences|3,163,837.81|3,163,837.81|
|Deductible loss|1,427,605.96|1,427,605.96|
|Total|4,591,443.77|4,591,443.77|

 (4)Deductible losses of deferred income tax asset without recognized will expired in later year
RMB/CNY
|||||
|-|-|-|-|
|Year|Closing amount|Opening amount|Note|
|2019|51,859.78|51,859.78||
|2020||||
|2021|182,573.55|182,573.55||
|2022|848,078.83|848,078.83||
|2023|345,093.80|345,093.80||
|Total|1,427,605.96|1,427,605.96|--|

Other explanation
14. Other non-current assets
Whether implemented the new revenue standards
□Yes√No
RMB/CNY
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Advance payment for engineering|80,000.00|80,000.00|

|||||
|-|-|-|-|
|Advance payment for equipment||209,550.00|357,810.00|
|Advance payment for intangible assets|||2,721,154.00|
|Total|289,550.00||3,158,964.00|

 Other explanation
15. Short-term loans
(1)Category
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Loan in pledge||22,676,280.00|13,500,000.00|
|Secured portfolio loan||112,000,000.00|148,068,657.88|
|Total|134,676,280.00||161,568,657.88|

 Explanation on category of Short-term loans
Nil
16. Note payable
RMB/CNY
|||||
|-|-|-|-|
|Category||Closing balance|Opening balance|
|Commercial acceptance bill||13,804,210.29|17,642,356.66|
|Bank acceptance bill|||10,000,000.00|
|Total|13,804,210.29||27,642,356.66|

 Totally 0 Yuan due note payable are paid at period-end
17. Account payable
(1)Account payable
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Within one year(One year included)||90,992,129.99|48,686,573.85|
|Over one year||11,043,080.29|12,288,732.58|
|Total|102,035,210.28||60,975,306.43|

 (2)Major account payable over one year
RMB/CNY
||||
|-|-|-|
|Item|Closing balance|Reasons for non-payment or carry over|
|Shenzhen Yuehai Global Logistics Co.,|||
||2,858,885.97|Without settlement|
|Ltd.|||
|LG|1,906,267.50|Without settlement|
|Dongjin Electronics (Nanjing) Plasma|||
||617,963.45|Without settlement|
|Co., Ltd.|||
|Total|5,383,116.92|--|

Other explanation:
Nil
18. Account received in advance
Whether implemented the new revenue standards
□Yes√No
(1)Account received in advance
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Within one year(One year included)||113,637.43|116,601.60|
|Over one year||42,595.01|42,927.00|
|Total|156,232.44||159,528.60|

 19. Employees remuneration payable
(1)Employees remuneration payable
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Increase during the|Decrease during this|||
|Item|Opening balance||||Closing balance|
|||period|period|||
|I. Short-term benefits|4,700,208.36|32,286,086.59|32,958,058.24||4,028,236.71|
|II. Post-employment||||||
|benefits-defined||2,247,995.53|2,230,407.95||17,587.58|
|contribution plans||||||
|III. Dismiss welfare||45,365.00|45,365.00|||
|Total|4,700,208.36|34,579,447.12|35,233,831.19|4,045,824.29||

(2)Short-term benefits
RMB/CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Increase during the||Decrease during this|||
|Item||Opening balance||||||Closing balance|
|||||period||period|||
|1. Wages , bonuses,|||||||||
|||3,720,025.80||28,492,788.83||29,146,144.28||3,066,670.35|
|allowances and subsidies|||||||||
|2. Welfare for workers|||||||||
|||754.00||2,489,517.44||2,489,517.44||754.00|
|and staff|||||||||
|3. Social insurance||22,287.98||1,067,739.83||1,086,356.03||3,671.78|
|Including:|||||||||
|||22,287.98||894,902.90||913,519.10||3,671.78|
|Medical insurance|||||||||
|Work|||||||||
|||||91,845.56||91,845.56|||
|injury insurance|||||||||
|Maternity|||||||||
|||||80,991.37||80,991.37|||
|insurance|||||||||
|4. Housing|||||||||
|||24,310.00||150,800.88||150,800.88||24,310.00|
|accumulation fund|||||||||
|5. Labor union|||||||||
|expenditure and|||||||||
|||932,830.58||85,239.61||85,239.61||932,830.58|
|personnel education|||||||||
|expense|||||||||
|Total|4,700,208.36||32,286,086.59||32,958,058.24||4,028,236.71||

 (3)Defined contribution plans
RMB/CNY
|||||||||
|-|-|-|-|-|-|-|-|
||||Increase during the||Decrease during this|||
|Item|Opening balance||||||Closing balance|
||||period||period|||
|1. Basic endowment||||||||
||||2,170,497.43||2,152,909.85||17,587.58|
|insurance||||||||
|2. Unemployment||||||||
||||77,498.10||77,498.10|||
|insurance||||||||
|Total||2,247,995.53||2,230,407.95||17,587.58||

 Other explanation:
Nil
20. Tax payable
RMB/CNY
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|VAT|3,119,280.60|3,432,174.00|

|||||
|-|-|-|-|
|Corporate income tax||5,914,787.16|5,683,136.41|
|Individual income tax||219,921.41|45,962.89|
|Urban maintenance and construction tax||50,723.32|547,965.38|
|Property tax||533,189.74|290,438.28|
|Land use tax||552,604.04|75,345.69|
|Educational surtax||229,278.13|235,610.56|
|Local educational surtax||123,222.03|126,852.76|
|Dike fee||1,665.00|1,665.00|
|Stamp tax||33,611.20|24,738.90|
|Disposal fund of waste electrical||||
|||830,950.00|768,930.00|
|products||||
|Total|11,609,232.63||11,232,819.87|

 Other explanation:
Nil
21. Other account payable
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Interest payable|54,347.32||439,558.70|
|Other account payable||30,986,015.17|26,339,305.22|
|Total|31,040,362.49||26,778,863.92|

 (1)Interest payable
RMB/CNY
|||||
|-|-|-|-|
|Item||Closing balance|Opening balance|
|Interest of short-term loans payable||54,347.32|439,558.70|
|Total|54,347.32||439,558.70|

 Significant overdue and unpaid interest:
RMB/CNY
||||
|-|-|-|
|Loan unit|Overdue amount|Reason for overdue|

Other explanation:
Nil
(2)Other account payable
1)Other account payable by nature
RMB/CNY
||||||
|-|-|-|-|-|
|Item||Closing balance||Opening balance|
|Margin and deposit||17,395,159.40||10,914,478.12|
|Lease management fee||7,152,279.11||2,612,566.67|
|Intercourse funds||3,741,736.55||7,531,055.87|
|After sale and repairmen||1,759,470.00||1,696,994.97|
|Other||937,370.11||3,584,209.59|
|Total|30,986,015.17||26,339,305.22||

 2)Significant other account payable with over one year age
RMB/CNY
||||
|-|-|-|
|Item|Closing balance|Reasons for non-payment or carry over|
|Shenzhen SED Property Development|||
||1,244,058.55|Without settlement|
|Co., Ltd.|||
|Shenzhen Huayongxing Environmental|||
||1,000,000.00|Margin|
|Protection Technology Co., Ltd.|||
|Linghang Technology (Shenzhen) Co.,|||
||656,345.28|Without settlement|
|Ltd|||
|Shenzhen Tongxing Electronics Co., Ltd.|578,259.83|Without settlement|
|Shenzhen Yongdasheng Investment|||
||558,970.00|Margin|
|Development Co., Ltd.|||
|Total|4,037,633.66|--|

Other explanation
Nil
22. Accrual liability
Whether implemented the new revenue standards
□Yes√No
RMB/CNY
||||||
|-|-|-|-|-|
|Item||Closing balance|Opening balance|Causes|
|Pending action||64,411.00|64,411.00|Business and labor disputes|
|Total|64,411.00||64,411.00|--|

Other explanations, including important assumptions and estimation about important estimated liabilities:
According to the Enforcement Notice ( (2008) SFFZZ No.522-529) of Shenzhen Intermediate People's Court, Shenzhen Labor Dispute Arbitration Commission issued SLZC[2007] No. 1069-1077, No. 1079, No. 1081, and No. 1085-1087 arbitration awards for the labor dispute case of Cai Yaoqiang and other thirteen people, which has taken legal effect. According to the Basic Information
Credit Report of Enterprises, the Company has total unexecuted labor dispute subject of 64,411.00 yuan, and the Company
recognizes it as the estimated liability.
23.Share capital
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||Changes in the Period (+,-)|||||||
|||||Shares|||||
||Opening|||||||Closing|
|||Issuing new||transfer from|||||
||balance||Bonus shares||Other|Subtotal||balance|
|||shares||public|||||
|||||reserves|||||
||283,161,227.||||||283,161,227.00||
|Total shares|||||||||
||00||||||||

 Other explanation:
Up to 30th June 2019, the shares of the Company held by controlling shareholder has 116,100,000 shares in status of pledge, taking41% of the total share capital; mortgagee is China Merchants Securities Assets Management Co., Ltd. Shares in judicial freeze amounted as 119,289,894 shares.
24. Capital surplus
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Increase during the|Decrease during this|||
|Item|Opening balance||||Closing balance|
|||period|period|||
|Capital premium||||||
||96,501,903.02||||96,501,903.02|
|(equity premium)||||||
|Other capital surplus|50,085,368.48||||50,085,368.48|
|Total|146,587,271.50|||146,587,271.50||

 Other explanation, including changes and reasons of changes:
Nil
25. Surplus reserves
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Increase during the|Decrease during this|||
|Item|Opening balance||||Closing balance|
|||period|period|||
|Statutory surplus||||||
||21,322,617.25||||21,322,617.25|
|reserves||||||
|Discretionary surplus||||||
||56,068,976.00||||56,068,976.00|
|reserve||||||
|Total|77,391,593.25|||77,391,593.25||

Other explanation, including changes and reasons for changes:
Nil
26. Retained profit
RMB/CNY
|||||
|-|-|-|-|
|Item||Current period|Last period|
|Retained profit at the end of the previous period||||
|||-183,172,091.01|-186,467,113.73|
|before adjustment||||
|Retained profit at period-begin after adjustment||-183,172,091.01|-186,467,113.73|
|Add: net profit attributable to owners of the||||
|||2,587,578.75|3,295,022.72|
|parent company||||
|Retained profit at period-end|-180,591,679.88||-183,172,091.01|

 Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained profits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan. 5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
27. Operating income and cost
RMB/CNY
||||||
|-|-|-|-|-|
||Current period||Last period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|310,399,495.33|285,485,316.56|318,222,786.98|295,038,716.84|
|Other business|28,790,678.72|12,094,891.78|22,762,056.26|7,544,262.60|
|Total|339,190,174.05|297,580,208.34|340,984,843.24|302,582,979.44|

 Whether implemented the new revenue standards
□Yes√No
Other explanation
Nil
28. Tax and surcharges
RMB/CNY
||||
|-|-|-|
|Item|Current period|Last period|
|Urban maintenance and construction tax|68,304.63|266,947.39|
|Educational surtax|33,062.14|159,757.95|

||||||
|-|-|-|-|-|
|Property tax||706,398.83||232,452.12|
|Land use tax||278,113.28||663,931.20|
|Vehicle use tax||3,420.00||4,800.00|
|Stamp tax||205,372.70||217,911.90|
|Local education development fee||15,438.42||166,492.83|
|Total|1,310,110.00||1,712,293.39||

 Other explanation:
Nil
29. Sales expense
RMB/CNY
||||||
|-|-|-|-|-|
|Item||Current period||Last period|
|Employees remuneration||2,350,311.18||2,301,867.88|
|Freight||2,883,611.66||2,334,595.10|
|Commodity inspection fee||46,041.22||335,545.03|
|Customs fee||85,340.66||84,390.47|
|Commodity loss||1,669,582.49||1,556,975.69|
|Other||2,095,493.01||1,819,989.14|
|Total|9,130,380.22||8,433,363.31||

 Other explanation:
Nil
30. Administrative expense
RMB/CNY
||||
|-|-|-|
|Item|Current period|Last period|
|Salary|4,819,623.00|4,210,697.93|
|Depreciation charge|1,108,894.27|2,586,727.68|
|Social insurance premium|1,183,069.73|1,219,441.85|
|Social expenses|1,975,609.14|1,336,624.80|
|Taxes and surcharge|0.00|0.00|
|Employee benefits|453,205.88|900,960.35|
|Travel expenses|913,668.77|1,086,267.27|
|Amortization of intangible assets|872,474.94|745,813.31|
|Traffic expenses|880,726.46|1,047,578.29|

||||||
|-|-|-|-|-|
|Consulting fee||365,549.99||565,076.31|
|Security||478,584.83||710,066.72|
|Repairs||981,308.38||839,233.34|
|Audit fee||812,786.23||624,271.85|
|Office expenses||775,082.77||527,020.48|
|Communication fee||106,108.39||166,858.35|
|Amortization of low cost and short lived|||||
|||76,180.62||488,293.61|
|articles|||||
|Securities information disclosure fee||255,915.74||188,679.24|
|Litigation fee||0.00||0.00|
|Staff education||86,051.41||35,034.65|
|Water and electricity fee||336,221.83||272,971.66|
|Lease fee||2,444,912.69||2,298,165.79|
|Eco fee||194,709.07||90,598.66|
|Premium||45,221.73||164,030.73|
|Other expenses||451,085.52||296,572.55|
|Total|19,616,991.39||20,400,985.42||

 Other explanation:
Nil
31.R& D expenses
RMB/CNY
|||||
|-|-|-|-|
|Item||Current period|Last period|
|Personnel cost||2,086,504.20||
|Direct input cost||846,252.61||
|Depreciation and amortization expenses||218,337.01||
|Other related expenses||575,899.04||
|Total|3,726,992.86|||

Other explanation:
Nil
32. Financial expense
RMB/CNY
||||
|-|-|-|
|Item|Current period|Last period|
|Interest expenditure|5,355,676.92|5,989,883.31|

||||||
|-|-|-|-|-|
|Less: interest income||419,336.28||349,858.59|
|Add: Exchange loss||-87,878.70||-297,171.10|
|Add: Other expense||219,909.30||104,216.60|
|Total|5,068,371.24||5,447,070.22||

 Other explanation:
Nil
33. Investment income
RMB/CNY
|||||||
|-|-|-|-|-|-|
|Item||Current period|||Last period|
|Investment income generated by financial||||||
|||74,936.1|4||245,679.10|
|products||||||
|Total|74,936.14|||245,679.10||

 Other explanation:
Nil
34. Credit impairment loss
RMB/CNY
|||||
|-|-|-|-|
|Item||Current period|Last period|
|Bad debt loss of other account receivable||-8,432.50||
|Total|-8,432.50|||

Other explanation:
Nil
35. Assets impairment loss
Whether implemented the new revenue standards
□Yes√No
RMB/CNY
|||||
|-|-|-|-|
|Item|Current period||Last period|
|I. Bad debt losses|||-5,941.50|
|Total||-5,941.50||

 Other explanation:
Nil
36. Asset disposal income
RMB/CNY
||||
|-|-|-|
|Source of asset disposal income|Current period|Last period|
|Income from fixed assets sold|129,039.57|-105,779.36|

 37. Non-operating income
RMB/CNY
|||||||
|-|-|-|-|-|-|
||||||Amount included in current|
|Item||Current period||Last period||
||||||non-recurring profits or losses|
|Government subsidy||223,300.00||771,800.00||
|Fine income||9,458.00||115,862.07||
|Total|232,758.00||887,662.07|||

Government subsidy reckoned into current gains/losses:
RMB/CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Subsidy|||||
|||||impact|The special|||Assets-rela|
||Issuing|Offering||||Amount in|Amount in||
|Item|||Nature|current|subsidy|||ted/income|
||subject|causes||||the Period|last period||
|||||gains/losse|(Y/N)|||-related|
|||||s (Y/N)|||||
||||Subsidy||||||
||||obtained||||||
||||for||||||
||Finance||||||||
||||conforms||||||
||bureau of||||||||
|Award for|||with the||||||
||economic||||||||
|excellent|||local|||||Income-rel|
||developme|Award||N|N|200,000.00|||
|enterprise|||support|||||ated|
||nt district||||||||
|for 2018|||policy for||||||
||of Wuhan||||||||
||||investment||||||
||Caidian||||||||
||||incentive to||||||
||||encourage||||||
||||investment||||||
||||Subsidy||||||
|2018|Zero-balan||obtained||||||
|provincial|ce special||for||||||
|foreign|account of||conforms|||||Income-rel|
|||Award||N|N|17,300.00|||
|economic|the Finance||with the|||||ated|
|and trade|bureau of||local||||||
|funds|Wuhan||support||||||
||||policy for||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
||||investment||||||
||||incentive to||||||
||||encourage||||||
||||investment||||||
||||Subsidy||||||
||||obtained||||||
||||for||||||
||Labor and||conforms||||||
|Job-huntin|||||||||
||employme||with the||||||
|g and|||||||||
||nt bureau||local|||||Income-rel|
|entreprene||Subsidy||N|N|6,000.00|||
||of Caidian||support|||||ated|
|urship|||||||||
||District,||policy for||||||
|subsidy|||||||||
||Wuhan||investment||||||
||||incentive to||||||
||||encourage||||||
||||investment||||||
||||Subsidy||||||
||Bureau of||obtained||||||
||Science,||for||||||
|Subsidy for|Technolog||conforms||||||
|science &|y and||with the||||||
|technology|Economic||local|||||Income-rel|
|||Subsidy||N|N||300,000.00||
|innovation|Informatio||support|||||ated|
|platform in|n of||policy for||||||
|2017|Caidian||investment||||||
||District,||incentive to||||||
||Wuhan||encourage||||||
||||investment||||||
||||Subsidy||||||
||||obtained||||||
||||for||||||
||||conforms||||||
|Guiding|||||||||
||Caidian||with the||||||
|funds for|||||||||
||Bureau of||local|||||Income-rel|
|business||Award||N|N||150,000.00||
||Finance,||support|||||ated|
|developme|||||||||
||Wuhan||policy for||||||
|nt|||||||||
||||investment||||||
||||incentive to||||||
||||encourage||||||
||||investment||||||
|Subsidy for|Wuhan||Subsidy||||||
|||||||||Income-rel|
|cultivating|Science|Subsidy|obtained|N|N||50,000.00||
|||||||||ated|
|enterprise|and||for||||||

|||||||||
|-|-|-|-|-|-|-|-|
||Technolog||conforms|||||
||y Bureau||with the|||||
||(Wuhan||local|||||
||Intellectual||support|||||
||Property||policy for|||||
||Office)||investment|||||
||||incentive to|||||
||||encourage|||||
||||investment|||||
||||Subsidy|||||
||||obtained|||||
||||for|||||
|2018|||conforms|||||
||Treasury|||||||
|municipal|||with the|||||
||branch of|||||||
|foreign|||local||||Income-rel|
||Wuhan|Award||N|N|271,800.00||
|economic|||support||||ated|
||Finance|||||||
|and trade|||policy for|||||
||bureau|||||||
|funds|||investment|||||
||||incentive to|||||
||||encourage|||||
||||investment|||||

Other explanation:
Nil
38. Non-operating expenditure
RMB/CNY
|||||||
|-|-|-|-|-|-|
||||||Amount included in current|
|Item||Current period||Last period||
||||||non-recurring profits or losses|
|Penalty expenditure||1,100.00||40,000.00|1,100.00|
|Other||||132,806.76||
|Total|1,100.00||172,806.76||1,100.00|

 Other explanation:
Nil
39. Income tax expenses
(1)Statement of income tax expense
RMB/CNY
||||
|-|-|-|
|Item|Current period|Last period|

||||||
|-|-|-|-|-|
|Current income tax expense||388,847.80||908,807.04|
|Deferred income tax expense||215,062.28||-444,975.63|
|Total|603,910.08||463,831.41||

 (2)Adjustment on accounting profit and income tax expenses
RMB/CNY
||||
|-|-|-|
|Item||Current period|
|Total profit|3,184,321.21||
|Income tax based on statutory/applicable rate||796,080.30|
|Impact by different tax rate applied by subsidies||-193,287.88|
|Impact of the deductible temporary differences or deductible|||
|loss of deferred income tax asset without recognized in the||274.41|
|period|||
|Income tax expense|603,910.08||

 Other explanation
40. Annotation of cash flow statement
(1)Cash received with other operating activities concerned
RMB/CNY
||||||
|-|-|-|-|-|
|Item||Current period||Last period|
|Unit intercourse account||1,869,387.03||1,042,828.59|
|Collection management fee and utilities|||||
|||1,189,095.86||601,727.14|
|etc.|||||
|Repayment from employees||32,462.10||22,608.36|
|Margin||40,263.30||500,000.00|
|Interest income||48,764.26||71,314.28|
|Government subsidy||223,300.00||771,800.00|
|Total|3,403,272.55||3,010,278.37||

 Note of cash received with other operating activities concerned:
The cash received with other operating activities concerned in the period mainly including collection management fee and utilities, government subsidy, margin and other intercourse funds
(2)Cash paid with other operating activities concerned
RMB/CNY
||||||
|-|-|-|-|-|
|Item||Current period||Last period|
|Unit intercourse account||1,315,156.92||1,840,448.01|
|Advances to employees||2,563,755.64||1,046,817.78|
|Litigation fee||||249,530.00|
|Deposit, margin||1,656,408.00||831,867.00|
|Social expenses||1,299,864.19||1,166,779.68|
|Water and electricity||2,365,472.40||2,270,904.17|
|Travel expenses||638,939.25||849,867.40|
|Freight||2,983,611.66||2,336,595.10|
|Traffic expenses||521,848.44||620,026.07|
|Repairs||1,067,602.12||965,726.34|
|Audit and consulting fees||792,049.00||1,037,410.89|
|Security||620,945.00||218,400.00|
|Financial institutions handling fee||62,759.86||103,694.09|
|Office expenses||508,512.98||408,916.56|
|Communication fee||154,173.54||195,355.57|
|Lease fee||2,444,912.69||2,418,018.66|
|Other||1,614,513.51||1,107,946.89|
|Total|20,610,525.20||17,668,304.21||

 Note of cash paid with other operating activities concerned:
(3)Cash received with other investment activities concerned
RMB/CNY
||||||
|-|-|-|-|-|
|Item||Current period||Last period|
|Redemption of principal of financial|||||
|||49,000,000.00||80,000,000.00|
|products|||||
|Total|49,000,000.00||80,000,000.00||

 Note of cash received with other investment activities concerned
Nil
(4)Cash paid related with investment activities
RMB/CNY
||||
|-|-|-|
|Item|Current period|Last period|
|Purchasing financial products|49,000,000.00|80,000,000.00|

||||
|-|-|-|
|Total|49,000,000.00|80,000,000.00|

 Note of cash paid related with investment activities
Nil
41.Supplementary information to statement of cash flow
(1)Supplementary information to statement of cash flow
RMB/CNY
||||||
|-|-|-|-|-|
|Supplementary information||Current period||Last period|
|1. Net profit adjusted to cash flow of|||||
|||--||--|
|operation activities:|||||
|Net profit|2,580,411.13||2,793,133.60||
|Add: Provision for assets impairment||6,025,283.55||7,322,855.85|
|Amortization of intangible assets||872,474.94||709,576.88|
|Amortization of long-term deferred|||||
|||116,167.92||63,722.66|
|expenditure|||||
|Loss from disposal of fixed assets,|||||
|intangible assets and other long-term||-129,039.57||333,454.38|
|assets(gain is listed with “-”)|||||
|Financial expenses (gain is listed with “-”)||5,262,857.89||5,536,037.89|
|Investment loss (income is listed with “-”)||-74,936.14||-245,679.10|
|Decrease of deferred income tax assets||||1,218.57|
|(increase is listed with “-”)|||||
|Decrease of inventory (increase is listed|||||
|||-23,735,632.38||4,786,891.71|
|with “-”)|||||
|Decrease of operating receivable accounts|||||
|||-17,697,245.84||-15,034,088.55|
|(increase is listed with “-”)|||||
|Increase of operating payable accounts|||||
|||71,973,879.06||-32,938,449.52|
|(decrease is listed with “-”)|||||
|Net cash flow arising from operating|45,194,220.56||-26,671,325.63||
|activities|||||
|2. Material investment and financing not|||||
|||--||--|
|involved in cash flow:|||||
|3. Net change of cash and cash|||||
|||--||--|
|equivalents:|||||
|Balance of cash at period end||38,041,641.85||23,838,986.21|
|Less: Balance of cash at period-begin||29,171,804.99||66,240,945.59|
|Add: Balance of cash equivalent at||||3,256,408.54|

|||||
|-|-|-|-|
|period-end||||
|Less: Balance of cash equivalent at||||
||||15,234,028.71|
|period-begin||||
|Net increased amount of cash and cash|8,869,836.86|-54,379,579.55||
|equivalent||||

(2)Constitution of cash and cash equivalent
RMB/CNY
||||||
|-|-|-|-|-|
|Item||Closing balance||Opening balance|
|Ⅰ. Cash|38,041,641.85||29,171,804.99||
|Including:Cash on hand||426,742.83||236,354.29|
|Bank deposit available for payment|||||
|||37,614,899.02||28,935,450.70|
|at any time|||||
|Ⅲ. Balance of cash and cash equivalent at|36,831,046.46||27,961,209.60||
|period-end|||||

Other explanation:
Ending Monetary fund-other monetary fund refers to the margin of bank acceptance 9,939,899.76 Yuan, which is not belonging to the cash and cash equivalent. Ending Monetary fund-Bank deposit has 1,210,595.39 Yuan frozen by the court, which is not belonging to the cash and cash equivalent either.
42. Assets with ownership or use right restricted
RMB/CNY
||||
|-|-|-|
|Item|Ending book value|Restriction reasons|
|Monetary fund|11,150,495.15|Issuing the bank acceptance|
|Note receivable|3,866,647.92|Pledged|
|Inventory|14,609,128.53|Pledged|
|Fixed assets|37,728,701.12|Bank loan secured|
|Intangible assets|42,487,962.49|Bank loan secured|
|Disposal of fixed assets|92,857,471.69|Court closure|
|Intangible assets|36,306,830.17|Bank loan secured|
|Total|239,007,237.07|--|

Other explanation:
Nil
43. Item of foreign currency
(1) Item of foreign currency
RMB/CNY
|||||
|-|-|-|-|
||Closing balance of foreign||Closing RMB balance|
|Item||Rate of conversion||
||currency||converted|
|Monetary fund|--|--||
|Including:USD|1,361,685.55|6.87|9,356,958.43|
|Euro||||
|HKD|32.66|0.88|28.62|
|Account receivable|--|--||
|Including:USD|5,942,756.38|6.87|40,836,244.74|
|Euro||||
|HKD||||
|Long-term loans|--|--||
|Including:USD||||
|Euro||||
|HKD||||
|Account paid in advance||||
|Including:USD|2,249,052.99|6.87|15,454,592.53|
|Short-term loans||||
|Including:USD|3,300,000.00|6.87|22,676,280.00|

 Other explanation:
Nil
44. Government subsidy
(1)Government subsidy
RMB/CNY
|||||
|-|-|-|-|
||||Amount reckoned into current|
|Category|Amount|Item||
||||gains/losses|
|Award for excellent||||
||200,000.00|Non-operating income|200,000.00|
|enterprise for 2018||||

|||||
|-|-|-|-|
|2018 provincial foreign||||
||17,300.00|Non-operating income|17,300.00|
|economic and trade funds||||
|Job-hunting and||||
||6,000.00|Non-operating income|6,000.00|
|entrepreneurship subsidy||||

(2)Refund of government subsidy
□ Applicable√Not applicable
Other explanation:
Nil
VIII. Equity in other subjects
1. Equity in subsidiary
(1)Constitute of enterprise group
||||||||
|-|-|-|-|-|-|-|
||Main operation|Registered||Share-holding ratio|||
|Subsidiary|||Business nature|||Acquired way|
||place|place||Directly|Indirectly||
|HUAFA Lease|||Property|||Investment|
||Shenzhen|Shenzhen||60.00%|||
|Company|||management|||establishment|
|HUAFA|||||||
||||Property|||Investment|
|Property|Shenzhen|Shenzhen||100.00%|||
||||management|||establishment|
|Company|||||||
|Hengfa|||||||
||||Production|||Investment|
|Technology|Wuhan|Wuhan||100.00%|||
||||sales|||establishment|
|Company|||||||
|HUAFA|||||||
||||Property|||Investment|
|Hengtian|Shenzhen|Shenzhen||100.00%|||
||||management|||establishment|
|Company|||||||
|HUAFA|||||||
||||Property|||Investment|
|Hengtai|Shenzhen|Shenzhen||100.00%|||
||||management|||establishment|
|Company|||||||

Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Nil
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over half and over voting rights:
Nil
Major structured entity included in consolidate statement:
Nil
Basis of termination of agent or consignor:
Nil
Other explanation:
Nil
IX. The risk associated with financial instruments
The Group's main financial instruments include loans, receivables, payable, tradable financial assets, trading and financial liabilities, etc. The risks associated with these financial instruments and the risk management policies adopted by the Group to reduce these risks are described below. The management of the Group manages and monitors these risk exposures to ensure that the above risks are controlled within the limits.
The objective of the Group's risk management is to strike a proper balance between risks and profits, minimize the negative impact of risks on the Group's operating results, and maximize the benefits of shareholders and other equity investors. Based on this risk management objectives, the Group's basic strategy for risk management is to identify and analyze the risks faced by the Group, establish appropriate risk bottom lines and carry out risk management, and timely and reliably monitor the risks control them within the limits.
(1) Market risk
The market risk of financial instruments refers to the risk that the fair value or the future cash flows of financial instruments fluctuate due to the changes in market prices, including foreign exchange risk, interest rate risk and other price risk.
1)FX risk
The Group's exchange rate risk is mainly related to US dollars and Hong Kong dollars. Except the Group's second level subsidiary, Hengfa TechnologyCompany’s monitor business has day-to-day operations in US dollars; other principal business activities of the Group settle accounts in RMB. On 30 June 2019, except for the US dollar balance of assets and liabilities in below table and the sporadic Hong Kong dollar balance, the Group's assets and liabilities are all RMB balance. The exchange rate risk arising from the assets and liabilities of the US dollar, Hong Kong dollar balance may have an impact on the Group's operating results.
Item 2019-6-30(RMB conversion) 2018-12-31(RMB conversion)
|||
|-|-|
|9,356,958.43|2,010,146.81|
|28.61|28.62|
|40,836,244.74|44,086,655.90|
|15,454,592.53|19,035,307.91|
|0.00||
|22,676,280.00|25,068,657.88|

 The Company eyes on the influence from variation of exchange
2) Interest rate risk
The interest rate risk of the Group arises from bank loans. The financial liabilities of floating interest rate make
the Group face cash flow interest rate risk, and the financial liabilities of fixed rate make the Group face the interest rate risk of fair value. The Group determines the relative proportion of fixed rate and floating interest rate contracts based on the prevailing market environment. On 30 June 2019, the Group's interest-bearing debt was mainly the floating interest rate loan contract denominated in Renminbi and US dollars, amounting to RMB 124,676,280 (December 31, 2018: RMB 161,568,657.88).
The Group's risk of changes in the cash flow of financial instruments due to changes in interest rates is mainly related to the floating interest rate bank loans. The Group's policy is to maintain the floating interest rate of these loans so as to eliminate the fair value risk of the interest rate changes.
3) Price risk
The Group sells monitors and so on at market prices and is therefore affected by such price fluctuations.
(2) Credit risk
Credit risk refers to the risk that a party of the financial instrument does not fulfill its obligations and causes property loss to another party. On December 31, 2017, the maximum credit risk exposure that may cause financial losses to the Group is mainly attributable to the failure of the other party to fulfill its obligations resulting in the losses of the Group's financial assets and the Group's financial guarantees, including:
The carrying amount of the financial assets recognized in the consolidated balance sheet; for the financial instruments measured at fair value, the book value reflects its risk exposures but not the maximum risk exposure, and its maximum risk exposure changes with the future changes in fair value.
In order to reduce the credit risk, the Group has set up a special department to determine the credit line, carry out the credit approval, and implement other monitoring procedures to take necessary measures to recover the overdue credit. In addition, the Group reviews the recovery of each individual receivable at every balance sheet date to accrue sufficient provision for bad debts of uncollectible funds. As a result, the Group's management believes that the Group's credit risk has been greatly reduced.
The Group's working capital is deposited in banks with higher credit ratings, so the credit risk of working capital is low.
The Group has adopted necessary policies to ensure that all customers have good credit records. In addition to the top five account receivables, the Group has no other significant credit risk.
The total amount of the top five account receivables is RMB 138,920,788.78.
(3) Liquidity risk
The liquidity risk is the risk that the Group is unable to fulfill its financial obligations on the due date. The Group's approach to manage liquidity risk is to ensure that there is sufficient financial liquidity to fulfill its due debts but not cause unacceptable losses or damages to the corporate reputation. The Group regularly analyzes the structure and duration of liabilities to ensure there are sufficient funds. The management of the Group monitors the use of bank loans and ensures the compliance with loan agreement, and conducts financing consultations with financial institutions in order to maintain a certain line of credit and reduce the liquidity risk.
2. Sensitivity analysis
The Group uses the sensitivity analysis technique to analyze the possible impacts of the reasonable and possible changes in risk variable on the currents profit and losses or the owner's equity. Since any risk variable rarely changes in isolation, and the correlation among the variables has a significant effect on the final effect amount of a certain risk variable changes, and the following contents are on the assumption that the change in each variable is independent.
(1) Sensitivity analysis of foreign exchange risk
Sensitivity analysis of foreign exchange risk assumes that all overseas operating net investment hedges and cash flow hedges are highly effective.
On the basis of the above assumptions, in case that other variabledon’t change, the after-tax effect of the possible and reasonable changes in the exchange rate on the current profits and losses are as follows
|||||||
|-|-|-|-|-|-|
|Item|Exchange ratefluctuation|Jan.-Jun. 2019||Jan.-Jun. 2018||
|||Impact on net profit|Impact on owner'sequity|Impact on net profit|Impact on owner'sequity|
|All foreigncurrency|5% appreciation ofthe RMB|1,031,885.69|1,031,885.69|-284,157.38|-284,157.38|
|All foreigncurrency|5% devaluation ofthe RMB|-1,031,885.69|-1,031,885.69|284,157.38|284,157.38|

X. Related party and related transactions
1. Parent company of the enterprise
|||||||
|-|-|-|-|-|-|
|||||Share-holding||
|||||ratio on the|Voting right ratio|
|Parent company|Registration place|Business nature|Registered capital|||
|||||enterprise for|on the enterprise|
|||||parent company||
|||Production and||||
|Wuhan Zhongheng||||||
|||sales, real estate||||
|New Science &||||||
|||development and||||
|Technology|Wuhan||138,000,000.00|42.13%|42.13%|
|||sales, housing||||
|Industrial Group||||||
|||leasing and||||
|Co., Ltd||||||
|||management||||

Explanation on parent company of the enterprise
Nil
The ultimate control of the enterprise is Li Zhongqiu.
Other explanation:
Nil
2. Subsidiary of the Enterprise
Found more in VIII.
3. Other Related party
|||
|-|-|
|Other Related party|Relationship with the Enterprise|
||Control by same controlling shareholder and ultimate|
|Shenzhen Zhongheng Huafa Science and Technology Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan Hengsheng Yutian Industrial Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan Hengsheng Photo-electricity Industry Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Hong Kong Yutian International Investment Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan New Oriental Real Estate Development Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan Zhongheng Property Management Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan Optical Valley Display System Co., Ltd.||
||controller|

|||
|-|-|
||Control by same controlling shareholder and ultimate|
|Wuhan Yutian Xingye Property Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan Yutian Dongfang Property Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan Xiahua Zhongheng Electronics Co. Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan Zhongheng Yutian Trading Co,, Ltd||
||controller|
||Control by same controlling shareholder and ultimate|
|Wuhan Yutian Hongguang Real Estate Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Shenzhen Zhongheng Huayu Investment Holding Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Yutian Investment Co., Ltd.(Famous Sky Capital Limited)||
||controller|
||Control by same controlling shareholder and ultimate|
|Yutian International Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Hong Kong Zhongheng Yutian Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Shenzhen Yutian Henghua Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Shenzhen Zhongheng Yongye Technology Co., Ltd.||
||controller|
||Control by same controlling shareholder and ultimate|
|Shenzhen Yutian Hengrui Co., Ltd.||
||controller|

Other explanation
Nil
4. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||||Whether over the||
||||Trading limit|||
|Related party|Content|Current Period||approved limited or|Last period|
||||approved|||
|||||not (Y/N)||
|Hong Kong||||||
||Purchasing|||||
|Yutian||||||
|||55,314,886.74|167,780,900.00|N|57,922,243.81|
|International|goods|||||
|Investment Co.,||||||

|||||||
|-|-|-|-|-|-|
|Ltd.||||||
|Wuhan||||||
|Hengsheng|Purchasing|||||
|||57,732,114.71|205,446,000.00|N|44,866,194.55|
|Photo-electricity|goods|||||
|Industry Co., Ltd.||||||

Goods sold/labor service providing
RMB/CNY
|||||
|-|-|-|-|
|Related party|Content|Current period|Last period|
|Hong Kong Yutian||||
|International Investment Co.,|Sales of goods|64,136,216.85|63,231,882.88|
|Ltd.||||
|Wuhan Hengsheng||||
|Photo-electricity Industry|Sales of goods|12,184,138.45|2,772,074.10|
|Co., Ltd.||||

Explanation on goods purchasing, labor service providing and receiving
Nil
(2)Related guarantee
As the guarantor
RMB/CNY
||||||
|-|-|-|-|-|
|||||Completed or not|
|Secured party|Amount guarantee|Start|End||
|||||(Y/N)|
|Hengfa Technology|||||
||30,000,000.00|2018-04-20|2022-04-20|N|
|Company|||||

As the secured party
RMB/CNY
||||||
|-|-|-|-|-|
|||||Completed or not|
|Guarantor|Amount guarantee|Start|End||
|||||(Y/N)|

Explanation on related guarantee
Nil
(3)Remuneration of key manager
RMB/CNY
||||
|-|-|-|
|Item|Current period|Last period|
|Total remuneration|781,248.00|784,673.68|

5. Receivable/payable items of related parties
(1) Receivable item
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Item|Related party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|
||Hong Kong Yutian|||||
|Account|International|||||
|||37,716,619.04||34,850,150.19||
|receivable|Investment Co.,|||||
||Ltd.|||||
||Hong Kong Yutian|||||
|Account paid in|International|||||
|||15,495,075.48||20,591,047.90||
|advance|Investment Co.,|||||
||Ltd.|||||

(2)Payable item
RMB/CNY
|||||
|-|-|-|-|
|Item|Related party|Closing book balance|Opening book balance|
||Wuhan HengshengPhoto-electricity IndustryCo., Ltd.|||
|Account payable||1,933,617.32|871,821.45|

6. Commitments of related party
In line with the claim of application for arbitration from Shenzhen Vanke, Shen HUAFA and Wuhan Zhongheng paid and money together. As the commitment letter to Shen HUAFA from Wuhan Zhongheng Group, if the Vanke wins, the losses from disputes arising by contract will bear by Wuhan Zhongheng Group in full.
XI. Commitment or contingency
1. Important commitment
Important commitment on balance sheet date
As of the balance sheet date, the irrepealable operating lease contract signed by the Company are as:
The Company entered into a house leasing contract with Wuwu Branch of Shenzhen Dacong Industrial Co., Ltd., term of the leasing period from 18 August 2015 to 17 August 2020
Minimum leasing payment for irrepealable operating lease Minimum leasing payment
contract
First year after balance sheet date
3,847,599.84 Second year after balance sheet date 502,325.53 2. Contingency
(1) Contingency on balance sheet date
1. Arbitration case of legal service contract dispute withV&T (Shenzhen) Law Firm
On March 12, 2018, the company received the arbitration notice No. SHEN DX20180087 from Shenzhen Court of International Arbitration,V&T (Shenzhen) Law Firm requested to make a ruling that the Company and Wuhan Zhongheng pay the delinquentlawyer’s fees of RMB 19,402,000 and the liquidated damages (The liquidated damages shall take five ten-thousandths of a day as a standard based on RMB 19,402,000 from August 24, 2017 to the date of payment of the above-mentionedlawyer’s fees, and the liquidated damages up to February 12, 2018 was RMB 1,678,273.00). The company should bear all the arbitration fees for this case.
The company has entrusted lawyers to respond to the lawsuit and file a counterclaim againstV&T Law Firm. The company filed a countersuit againstV&T Law Firm thatV&T Law Firm seriously violated the obligations of the Entrusted Agency Contract and the Supplementary Agreement of the Entrusted Agency Contract, failed to fulfill the contractual obligations, failed to fulfill the duty of diligence and responsibility and failed to safeguard the legitimate rights and interests of the principal. And thelawyer’s fees are far higher than the government guidance price of the Shenzhen lawyer service. It is requested to return the prepaid 2.5 millionlawyers’ fees, terminate the Entrusted Agency Contract and the Supplementary Agreement of the Entrusted Agency Contract previously signed withV&T Law Firm, and bear thelawyers’ fees of 100,000 Yuan for this counterclaim. The case is pending, and on 4 April 2019, the Company received a notice from the Shenzhen International Arbitration Court extending the award to 5 May 2019.
2. Other pending lawsuit
|||||||||
|-|-|-|-|-|-|-|-|
||Amount|||||||
|||Accrual||||||
||involved in||||Enforceme|||
|Basic information of||liability||Outcome and||Disclosur||
||the case (10||Progress||nt of||Index for disclosure|
|litigation (arbitration)||resulted||impact||e date||
||thousand||||judgments|||
|||(Y/N)||||||
||Yuan)|||||||
|In September 2016,|||Judgement on 16|Found more in the|Executing|2018-02-|http://www.cninfo.com.cn/cni|
|the dispute was|||August 2017,|Notice of the||09|nfo-new/disclosure/szse_main|
|submitted for arbitration|||the Company|Company|||/bulletin_detail/true/12044066|
|on “Cooperative|||and its||||06?announceTime=2018-02-0|
|Operation Contract of|46,460|N|controlling||||9 ；|
|Renovation Project at|||shareholders are||||http://www.cninfo.com.cn/ne|
|Huafa Industrial Park,|||applied for||||w/disclosure/detail?plate=szse|
|Gongming Street,|||withdrawal the||||&stockCode=000020&annou|
|Guangming New|||judgement, but it||||ncementId=1205326846&ann|

|||||||||
|-|-|-|-|-|-|-|-|
|District” entered into|||was rejected by||||ouncementTime=2018-08-25|
|between Wuhan|||the Court.|||||
|Zhongheng, the||||||||
|Company and Shenzhen||||||||
|Vanke||||||||
|In March 2016, the|||Now the second|Case closed|Case|2019-05-|http://www.cninfo.com.cn/cni|
|Company and Huafa|||instance||closed|07|nfo-new/disclosure/szse_main|
|Technology bring an|||judgment has||||/bulletin_detail/true/12027024|
|action against the|||been made, and||||23?announceTime=2016-09-1|
|flowed enterprise as|||has applied for||||4 07:41|
|Shenzhen Huayongxing|||compulsory|||||
|Eco Technology Co.,|||execution.|||||
|Ltd, Shenzhen||||||||
|Guanyong Line Board||||||||
|Co., Ltd, Shenzhen||||||||
|Mingyi Electric Co.,||||||||
||1,964.92|N||||||
|Ltd, Shenzhen ORL||||||||
|Technology Co., Ltd.||||||||
|and Shenzhen||||||||
|Kangzhengxin||||||||
|Technology Co., Ltd||||||||
|for delays payment of||||||||
|rent, refuse to move out||||||||
|the site, forcibly occupy||||||||
|the Company’s||||||||
|distribution room and||||||||
|other power supply unit||||||||
|In March 2016, the|||On 15 March|Executing|Executing|2016-09-|http://www.cninfo.com.cn/cni|
|Company and Huafa|||2018, the 2nd|||14|nfo-new/disclosure/szse_main|
|Property bring a suit|||trial decides was||||/bulletin_detail/true/12027024|
|against Shenzhen|||won and has||||23?announceTime=2016-09-1|
|Huayongxing Eco|||applied for||||4 07:41|
|Technology Co., Ltd|947.26|N|compulsory|||||
|and Shenzhen YDX|||execution|||||
|Technology Co., Ltd for||||||||
|violation of the Contract||||||||
|and refuse to clear up||||||||
|and remove the place||||||||
|Arbitration case of legal|1,940.2|N|The arbitration|Waiting for|Waiting|2018-11-1|http://www.cninfo.com.cn/ne|
|service contract dispute|||has been held|adjudicate|for|4|w/disclosure/detail?plate=szse|
|with V&T (Shenzhen)|||and waiting for||adjudicate||&stockCode=000020&annou|
|Law Firm and the|||adjudication||||ncementId=1205602053&ann|
|Company and Wuhan|||||||ouncementTime=2018-11-14|

||
|-|
|Zhongheng Group|

(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosed
XII. Events after balance sheet date
1. important non-adjustment items
RMB/CNY
|||||
|-|-|-|-|
|||Impact on financial status and|Reasons for the inability to|
|Item|Content|||
|||operating results|estimate the impact|

 2. Profit distribution
RMB/CNY 3. Sales return
Nil
4. Explanation on other events after balance sheet date
Nil
XIII. Other important event
1. Earlier accounting errors collection
(1)Retrospective restatement
RMB/CNY
|||||
|-|-|-|-|
|||Items for each comparison||
|Correction content|Treatment procedures||Cumulative impact|
|||period affected||

(2)Prospective application
||||
|-|-|-|
|||Reasons for prospective application|
|Correction content|Approval procedures||
|||adoption|

2. Debt restructuring
3. Assets exchange
(1)Non-monetary assets exchange
(2)Other assets exchange
4. Pension plan
5. Discontinuing operation
RMB/CNY
||||||||
|-|-|-|-|-|-|-|
|||||||Profit of|
|||||||discontinuing|
|||||||operation|
|||||Income tax|||
|Item|Income|Expenses|Total profit||Net profit|attributable to|
|||||expenses|||
|||||||owners of|
|||||||parent|
|||||||company|

 Other explanation
6. Segment
(1)Recognition basis and accounting policy for reportable segment
(2)Financial information for reportable segment
RMB/CNY
||||
|-|-|-|
|Item|Offset of segment|Total|

(3) If there are no segment in the Company, or the total assets and liabilities of the segment are un-able to disclosed, explain the reasons
(4)Other explanation
7. Major transaction and events makes influence oninvestor’s decision
8. Other
XIV. Principle notes of financial statements of parent company
1. Account receivable
(1)Category of account receivable
RMB/CNY
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||||Bad debt||||||||
||Book balance|||||Book balance||Bad debt provision|||
|Category|||provision||Book|||||Book|
||Amoun||Amoun|Accrua|value|Amoun||Amoun|Accrual|value|
|||Ratio|||||Ratio||||
||t||t|l ratio||t||t|ratio||
|Account receivable|||||||||||
|with bad debt|10,293,|100.00|10,293,|100.00||10,293,|100.00|10,293,|100.00||
||||||0.00|||||0.00|
|provision accrual|424.29|%|424.29|%||424.29|%|424.29|%||
|on a single basis|||||||||||
|Including:|||||||||||
|Including:|||||||||||
||10,293,||10,293,|||10,293,||10,293,|||
|Total|||||||||||
||424.29||424.29|||424.29||424.29|||

Accrual of bad debt provision on single basis: 10,293,424.29 Yuan
RMB/CNY
||||||
|-|-|-|-|-|
||Closing balance||||
|Name|||||
||Book balance|Bad debt provision|Accrual ratio|Accrual causes|
|Shenzhen Huafa|||||
|Proerty Leasing|4,558,859.15|4,558,859.15|100.00%|Uncollectible|
|Company|||||
|Portman|4,021,734.22|4,021,734.22|100.00%|Uncollectible|
|Shenzhen Jifang|||||
||1,380,608.00|1,380,608.00|100.00%|Uncollectible|
|Investment Co., Ltd|||||
|Traffic accident|555,785.81|555,785.81|100.00%|Uncollectible|

||||||
|-|-|-|-|-|
|compensation|||||
|Zhao Baomin|553,901.68|553,901.68|100.00%|Uncollectible|
|Hebei Botou Court|520,021.00|520,021.00|101.00%|Uncollectible|
|Electricity charge of|||||
|the canteen in|489,214.70|489,214.70|100.00%|Uncollectible|
|Gongming|||||
|Jiantao (Fogang)|||||
|Laminated Board Co.,|465,528.10|465,528.10|100.00%|Uncollectible|
|Ltd.|||||
|Labor union|72,402.55|72,402.55|100.00%|Uncollectible|
|Lu Wei|290,000.00|290,000.00|100.00%|Uncollectible|
|Dai Qiangbo 4/F hotel|354,569.00|354,569.00|100.00%|Uncollectible|
|Chuangjing|192,794.00|192,794.00|100.00%|Uncollectible|
|Shenzhen Mingli Co.,|||||
||170,394.84|170,394.84|100.00%|Uncollectible|
|ltd|||||
|Other enterprise|5,440,838.45|5,440,838.45|100.00%|Uncollectible|
|Total|10,293,424.29|10,293,424.29|--|--|

Accrual of bad debt provision on single basis:
RMB/CNY
||||||
|-|-|-|-|-|
||Closing balance||||
|Name|||||
||Book balance|Bad debt provision|Accrual ratio|Accrual causes|

 Accrual of bad debt provision on portfolio:
RMB/CNY
|||||
|-|-|-|-|
||Closing balance|||
|Name||||
||Book balance|Bad debt provision|Accrual ratio|

Explanation on portfolio basis:
Nil
Accrual of bad debt provision on portfolio:
RMB/CNY
|||||
|-|-|-|-|
||Closing balance|||
|Name||||
||Book balance|Bad debt provision|Accrual ratio|

Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable√Not applicable
By account age
RMB/CNY
|||
|-|-|
|Account age|Closing balance|
|Total|0.00|

 (2)Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Amount changed in the period||||
|Category|Opening balance||Collected or||Closing balance|
|||Accrual||Written-off||
||||reversal|||

Including major amount bad debt provision that collected or reversal in the period:
RMB/CNY
||||
|-|-|-|
|Enterprise|Amount collected or reversal|Collection by|

(3)Account receivable actually written-off in the period
RMB/CNY
|||
|-|-|
|Item|Amount written-off|

Including major account receivable written-off :
RMB/CNY
|||||||
|-|-|-|-|-|-|
||||||Amount arising|
||Nature of accountreceivable|Amountwritten-off|Causes of|Procedures of||
|Enterprise|||||from related|
||||written-off|written-off||
||||||transactions (Y/N)|

 Explanation on account receivable written-off:
(4)Top 5 account receivables at ending balance by arrears party
(5)Assets and liabilities resulted by account receivable transfer and continues involvement
Other explanation:
2. Other account receivable
RMB/CNY
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Other account receivable|111,782,724.70|99,155,253.08|
|Total|111,782,724.70|99,155,253.08|

(1)Interest receivable
1)Category of interest receivable
RMB/CNY
||||
|-|-|-|
|Item|Closing balance|Opening balance|

2)Significant overdue interest
||||||
|-|-|-|-|-|
|||||Whether impairment|
|Borrower|Closing balance|Overdue time|Overdue reason|occurs and judgment|
|||||basis|

Other explanation:
3)Accrual of bad debt provision
□ Applicable√Not applicable
(2)Dividend receivable
1)Category of dividend receivable
RMB/CNY
||||
|-|-|-|
|Item (or invested enterprise)|Closing balance|Opening balance|

2)Important dividend receivable with account age over one year
RMB/CNY
||||||
|-|-|-|-|-|
|||||Whether impairment|
|Item (or invested|||Reasons for||
||Closing balance|Account age||occurs and judgment|
|enterprise)|||un-collection||
|||||basis|

3)Accrual of bad debt provision
□ Applicable√Not applicable
Other explanation:
(3)Other account receivable
1)Other account receivable by nature
RMB/CNY
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Margin deposit|720,065.04|720,065.04|
|Borrow money|1,475,463.06|2,013,402.14|
|Intercourse funds|119,568,896.93|110,451,250.82|
|Rental income|9,088,088.00|5,857,777.46|
|Total|130,852,513.03|119,042,495.46|

2)Accrual of bad debt provision
RMB/CNY
||||||
|-|-|-|-|-|
||Phase I|Phase II|Phase III||
|||Expected credit losses for|Expected credit losses for||
||Expected credit||||
|Bad debt provision||||Total|
|||the entire duration|the entire duration (with||
||losses over next 12||||
|||(without credit|credit impairment||
||months||||
|||impairment occurred)|occurred)||
|Balance on Jan. 1,|||||
||19,069,788.33|||19,069,788.33|
|2019|||||
|Balance of Jan. 1, 2019|||||
||——|——|——|——|
|in the period|||||
|Balance on Jun. 30,|||||
||19,069,788.33|||19,069,788.33|
|2019|||||

Change of book balance of loss provision with amount has major changes in the period
□ Applicable√Not applicable
By account age
RMB/CNY
|||
|-|-|
|Account age|Closing balance|
|Within one year(One year included)|111,723,124.99|
||111,723,124.99|
|1-2 years|59,599.71|
|Total|111,782,724.70|

 3)Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
RMB/CNY
||||||
|-|-|-|-|-|
|||Amount changed in the period|||
|Category|Opening balance|||Closing balance|
|||Accrual|Collected or reversal||

Nil
Including important bad debt provision that collected or reversal in the period:
RMB/CNY
||||
|-|-|-|
|Enterprise|Amount collected or reversal|Collection by|

4)Other account receivable actually written-off in the period
RMB/CNY
|||
|-|-|
|Item|Amount written-off|

Including important other account receivable written-off in the period:
RMB/CNY
|||||||
|-|-|-|-|-|-|
||Nature of otheraccountreceivable||||Amount arising|
|||Amountwritten-off|Causes of|Procedures of||
|Enterprise|||||from related|
||||written-off|written-off||
||||||transactions (Y/N)|

Explanation on other account receivable written-off:
5) Top 5 other account receivables at ending balance by arrears party
RMB/CNY
|||||||
|-|-|-|-|-|-|
|||||Ratio in total||
||||||Closing balance of|
|Enterprise|Nature|Closing balance|Account age|ending balance of||
||||||bad debt reserve|
|||||other receivables||
|Hengfa Technology||||||
||Intercourse funds|91,887,895.78|Within one year|70.22%||
|Company||||||
|Zhongheng Huafa||||||
||Intercourse funds|20,186,113.28|Within 2 years|15.43%||
|Property||||||
|HUAFA Lease||||||
||Intercourse funds|4,558,859.15|Over 3 years|3.48%|4,558,859.15|
|Company||||||
||Lease fee|||||
|Portman||4,021,734.22|Over 3 years|3.07%|4,021,734.22|
||receivable etc|||||
|Shenzhen Jifang|Lease fee|||||
|||1,380,608.00|Within one year|1.06%||
|Investment Co., Ltd|receivable etc|||||
|Total|--|122,035,210.43|--|93.26%|8,580,593.37|

 3. Long-term equity investment
RMB/CNY
|||||||||
|-|-|-|-|-|-|-|-|
||Closing balance||||Opening balance|||
|Item||Impairment||||Impairment||
||Book balance|||Book value|Book balance||Book value|
|||provision||||provision||
|Investment for||||||||
||187,208,900.00|600,000.00||186,608,900.00|187,208,900.00|600,000.00|186,608,900.00|
|subsidiary||||||||
|Total|187,208,900.00|600,000.00|186,608,900.00||187,208,900.00|600,000.00|186,608,900.00|

 (1)Investment for subsidiary
RMB/CNY
|||||||||
|-|-|-|-|-|-|-|-|
|||Changes in the period|||||Closing|
||Opening|||||Closing||
|The invested||||Accrual of|||balance of|
||balance|Additional|Negative|||balance||
|entity||||impairment|Other||impairment|
||(Book value)|investment|investment|||(Book value)||
|||||provision|||provision|
|HUAFA||||||||
|Lease|0.00|||||0.00|600,000.00|
|Company||||||||
|HUAFA||||||||
||1,000,000.00|||||1,000,000.00||
|Property||||||||

|||||||
|-|-|-|-|-|-|
|Company||||||
|Hengfa||||||
|||183,608,900.||183,608,900.||
|Technology||||||
|||00||00||
|Company||||||
|Huafa Trading||||||
|||||0.00||
|Company||||||
|HUAFA||||||
|Hengtian||1,000,000.00||1,000,000.00||
|Company||||||
|HUAFA||||||
|Hengtai||1,000,000.00||1,000,000.00||
|Company||||||
||186,608,900.00||186,608,900.00||600,000.00|
|Total||||||

4. Operating income and cost
RMB/CNY
||||||
|-|-|-|-|-|
||Current period||Last period||
|Item|||||
||Income|Cost|Income|Cost|
|Other business|18,041,135.31|3,172,031.59|16,961,088.74|2,510,518.82|
|Total|18,041,135.31|3,172,031.59|16,961,088.74|2,510,518.82|

 Whether implemented the new revenue standards
□Yes√No
Other explanation:
Nil
XV. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable□Not applicable
RMB/CNY
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses from the disposal of|||
||129,039.57||
|non-current asset|||
|Governmental subsidy reckoned into|||
|current gains/losses (not including the|||
||223,300.00||
|subsidy enjoyed in quota or ration|||
|according to national standards, which are|||

||||
|-|-|-|
|closely relevant to enterprise’s business)|||
|Gain/loss of entrusted investment or assets|||
||74,936.14||
|management|||
|Other non-operating income and|||
|expenditure except for the aforementioned|9,458.00||
|items|||
|Less: Impact on income tax|54,234.64||
|Total|382,499.07|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√Not applicable
2. ROE and earnings per share
|||||||
|-|-|-|-|-|-|
||||Earnings per share|||
|Profits during report period|Weighted average ROE||Basic earnings per||Diluted earnings per|
||||share(RMB/Share)||share(RMB/Share)|
|Net profits belong to common||0.0091||0.0091||
|stock stockholders of the|0.79%|||||
|Company||||||
|Net profits belong to common||||||
|stock stockholders of the||||||
||0.68%||0.0078||0.0078|
|Company after deducting||||||
|nonrecurring gains and losses||||||

Section XI. Documents available for reference
I. Text of the Annual Report caring signature of the Chairman;
II. Financial statement carrying the signatures and seals of the person in charge of the Company, principal of the accounting works and person in charge of accounting organ;
III. All documents of the Company and manuscripts of public notices that disclosed in the China Securities journal, Securities Times and Hong Kong Commercial Daily designated by CSRC in the report period;
IV. Article of Association
V. Other relevant files.