京粮B：2018年年度报告（英文版）.PDF

HAINAN JINGLIANG HOLDINGS CO., LTD.ANNUAL REPORT 2018March2019Hainan Jingliang Holdings Co., Ltd.Annual Report 20182HAINAN JINGLIANG HOLDINGS CO., LTD.ANNUALREPORT 2018Part I Important NotesThis Summary is based on the full text of the 2018 Annual Report of Hainan Jingliang Holdings Co., Ltd.(together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). Inorder for a full understanding of the Companys operating results, financial position and future development plans,investors should carefully read the aforesaid full text, which has been disclosed together with this Summary on themedia designated by the China Securities Regulatory Commission (the “CSRC”).All the Companys directors have attended the Board meeting for the review of this Report and its summary.Independent auditors modified opinion: Applicable Not applicableBoard-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period: Applicable Not applicableThe Company has no final dividend plan, either in the form of cash or stock.Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period : Applicable Not applicableThis Summary has been prepared in both Chinese and English. Should there be any discrepancies ormisunderstandings between the two versions, the Chinese version shall prevail.Part II Key Corporate Information1. Stock ProfileStock nameJLKG, JL-BStock code000505, 200505Stock exchange for stock listingShenzhen Stock ExchangeUsed stock name (if any)Pearl River A, Pearl River BContact informationBoard SecretarySecurities RepresentativeNameZhao YinhuAddressJing Liang Building, NO. 16 East Third RingMiddle Road, Chaoyang District, BeijingFax010-51672010Tel.010-51672029Email 2. Principal Activities or Products in the Reporting PeriodThe Company is principally engaged in oils and oilseeds processing and trading, as well as food production. ItHainan Jingliang Holdings Co., Ltd.Annual Report 20183runs its oils and oilseeds processing and trading business primarily in Beijing City, Tianjin City and HebeiProvince under the brands of “Gu Chuan”, “Lv Bao”, “Gu Bi”, “Huo Niao” and “Tian Yi”, with the main productsbeing soybean oil, rapeseed oil, sunflower seed oil and sesame oil and paste, among others. As for its foodproduction business, it primarily develops, produces and markets snack food and bread under the brands of “LittlePrince”, “MS Dong”, “Jianqiang De Tudou” and “Gu Chuan”, among others, with the main products being potatochips, cakes and pastries and bread.In 2018, as the China-U.S. trade war escalated, the Company turned to Brazil for the procurement of the majorraw materials for its oils and oilseeds division. This supply source from Brazil, with strong seasonality, a longtransportation distance and unstable quality, caused a considerable rise in cost of sales. Therefore, the oils andoilseeds division took the initiative to adjust operating strategies, gave play to its industrial chain advantage, andstrengthened every link of the industrial china, so as to offset the hit by the trade war. For 2018, the oils andoilseeds division recorded main operating revenue of RMB6.472 billion and a profit before tax of RMB131million, approximately flat with last year.2018 saw the rising prices of raw and auxiliary materials, as well as a fiercer end-market competition in the snackfood industry. The Company primarily competes with Orion, Dali Foods, Lays and Oishi in the areas of friedpotato chips, non-fried potato chips and puffed potato sticks. On the non-fried potato chips market, subsidiaryXiaowangzi is the second largest brand next to Orion, and the largest brand in the separate package and bulksegments, with great market potentials. The snack food business adhered to the “Differentiated AsymmetricCompetition Strategy”, deepened the model of “Professional Production + Cultural Creativity + Internet”, as wellas implemented quality product and product transition strategies. As a result, for 2018, the snack food businessreported operating revenue of RMB817 million, up 5.87% year-on-year; and a profit before tax of RMB151million, representing a 13.07% growth as compared to last year. Meanwhile, thanks to greater efforts in othercities and product development, as well as the proactive efforts in expanding retail channels, the bread processingbusiness posted operating revenue of RMB77.26 million, up 26.86% year-on-year.3. Key Financial Information(1) Key Financial Information of the Past Three YearsIndicate by tick mark whether there is any retrospectively restated datum in the table below. Yes NoUnit: RMB201820172018-over-2017 change(%)2016Operating revenue7,409,124,303.417,917,639,044.13-6.42%8,723,491,657.31Net profit attributable to the listedcompanys shareholders167,956,581.15129,603,167.3629.59%197,319,239.01Net profit attributable to the listedcompanysshareholdersbeforeexceptional items127,425,177.2063,818,849.2199.67%-72,109,287.22Netcashgeneratedfrom/usedinoperating activities850,167,551.24-1,379,507,779.66161.63%948,330,160.14Basic earnings per share (RMB/share)0.240.220.00%0.31Diluted earnings per share (RMB/share)0.240.220.00%0.31Hainan Jingliang Holdings Co., Ltd.Annual Report 20184Weighted average return on equity (%)7.69%5.01%2.68%6.96%31 December 201831 December 2017Change of 31 December2018 over 31 December2017 (%)31 December 2016Total assets4,917,148,996.286,082,383,851.23-19.16%5,007,343,324.00Equityattributabletothelistedcompanys shareholders2,272,469,925.432,101,342,683.378.19%1,383,081,876.55(2) Key Financial Information by QuarterUnit: RMBQ1Q2Q3Q4Operating revenue1,866,527,190.781,773,098,788.631,899,805,985.971,869,692,338.03Net profit attributable to the listedcompanys shareholders31,041,912.7128,877,082.9742,345,394.9365,692,190.54Net profit attributable to the listedcompanysshareholdersbeforeexceptional items29,930,951.8627,428,084.6542,526,321.2127,539,819.48Net cash generated from/used inoperating activities671,468,699.31-625,774,156.43373,889,151.61430,583,856.75Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differsmaterially from what have been disclosed in the Companys quarterly or interim reports. Yes No4. Share Capital and Shareholder Information at the Period-End(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well asHoldings of Top 10 ShareholdersUnit: shareNumberofordinaryshareholders atthe period-end38,776Numberofordinaryshareholdersatthemonth-endpriortothedisclosure of thisReport37,224Numberofpreferredshareholderswithresumedvoting rights atthe period-end0Number of preferredshareholderswithresumedvotingrightsatthemonth-end prior tothe disclosure of thisReport0Top 10 shareholdersName of shareholderNature ofshareholderShareholdingpercentageTotal shares heldat the period-endRestrictedshares heldShares in pledge or frozenStatusSharesBEIJING GRAIN GROUP CO.,LTD.State-ownedlegal person42.06%288,439,561164,877,598BEIJING STATE-OWNEDCAPITALOPERATIONANDMANAGEMENT CENTERState-ownedlegal person7.07%48,510,46048,510,460CHINA DEVELOPMENT BANKCAPITALCO., LTD.State-ownedlegal person3.33%22,828,4510LI SHERYN ZHAN MINGForeignnatural person3.21%22,002,7000GOLD BUFFALO RUNYING(TIANJIN) EQUITYINVESTMENT FUNDMANAGEMENT CO.,LTD.GOLD BUFFALORUNYING (TIANJIN) EQUITYINVESTMENT FUND (L.P.)Other3.20%21,972,4510Hainan Jingliang Holdings Co., Ltd.Annual Report 20185MEI JIANYINGDomesticnatural person0.38%2,604,2030HU TIANGAODomesticnatural person0.36%2,436,0520DONGYANG HENGDIANGUARANTY CO., LTD.Domesticnon-state-ownedlegalperson0.32%2,204,9760WANG DAODomesticnatural person0.31%2,145,1000ZHANG XIAOXIADomesticnatural person0.28%1,949,2500Related or acting-in-concert parties among theshareholders aboveBeijing State-Owned Capital Operation And Management Center owns 100% ofBeijing Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is a shareholderof the Company (a 42.06% holding). Apart from that, the Company does not knowwhether there are any other related parties or acting-in-concert parties among thetop 10 shareholders.Shareholdersinvolvedinsecuritiesmargintrading (if any)1. Shareholder Wang Xiaoxing holds 1,776,000 shares in the Company through hisaccount of collateral securities for margin trading in Soochow Securities Co., Ltd.2. Shareholder Hu Tiangao holds 338,000 shares in the Company through hisaccount of collateral securities for margin trading in Zheshang Securities Co., Ltd.,and 2,098,052 shares in the Company through his ordinary securities account.(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them Applicable Not applicableNo preferred shareholders in the Reporting Period.(3) Ownership and Control Relations between the Actual Controller and the CompanyThe State-Owned Assets Supervision andAdministrationCommission of the Peoples Government of Beijing Municipality5. Corporate BondsDoes the Company have any corporate bonds publicly offered on the stock exchange, which were outstandingbefore the date of this Reports approval or were due but could not be redeemed in full?No.Beijing State-Owned Capital Operation and Management CenterBeijing Capital Agribusiness Group Co., Ltd.Beijing Grain Group Co., Ltd.Hainan Jingliang Holdings Co., Ltd.42.06%100%100%100%Hainan Jingliang Holdings Co., Ltd.Annual Report 20186Part III Operating Performance Discussion and Analysis1. Business Overview of the Reporting PeriodIs the Company subject to any industry-specific disclosure requirements?No.(1) Overall PerformanceIn face of the generally weak market and industry in 2018, the Company pursued progress amid stability. For theyear under review, the Company recorded operating revenue of RMB7.409 billion, with a profit before tax ofRMB277 million and earnings per share of RMB0.24. By operating division, the oils and oilseeds divisionreported main operating revenue of RMB6.472 billion with a profit before tax of RMB131 million; and the foodprocessing division posted operating revenue of RMB891 million with a profit before tax of RMB155 million.Beijing Jingliang Food Co., Ltd., a swapped-in asset in a major asset restructuring, registered main operatingrevenue of RMB7.409billion, a profit before tax of RMB297 million and a net profit attributable to the Companyas the parent before exceptional items of RMB164 million, fulfilling its 2018 annual profit commitment.(2) Major Results AchievedA. Stable and Smooth Operation of Oils and Oilseeds DivisionIn 2018, the Sino-US trade friction continued to escalate, and the Company began to purchase most raw materialsfrom Brazil. The costs of the Company in operating increased significantly because of the Brazilian soybeanslimited supplying season, wide quality range and storage difficulty. Therefore, the oils and oilseeds division tookthe initiative to adjust operating strategies, gave play to its industrial chain advantage, and strengthened every linkof the industrial china, so as to offset the hit by the trade war. For 2018, the oils and oilseeds division recordedmain operating revenue of RMB6.472 billion and a profit before tax of RMB131 million, approximately flat withlast year. Firstly, the platform effect has gradually appeared. In terms of the oils and oilseeds division, five majorplatforms have been established to effectively integrate various resources and improve the efficiency, includingRisk Control and R&D, Operation of Stocks, Import and Export Trade, Production Management and ProductMarketing. Under the impact of the Sino-US trade war, the five major platforms can support each other and sharevarious information in order to maximally mitigate the trade wars impact on various enterprises specialized inoilseed squeezing. For example, Jingliang Tianjin is capable of squeezing soybeans over 1 million tons in a yearwith a profit before tax of RMB30.61 million. Secondly, the structure of small-packed products has beencontinuously optimized. As the sales volume of high value-added oils including sunflower oil, linseed oil, oliveoil, non-GMO soybean oil increases 11%, the sales accounts for over 50% for the first time; the sales volume ofordinary soybean oils with relatively low gross profit rate declines 15% on the year-on-year basis. However, theadjustment of product structure directly improves the operating benefits, and the profit created by small-packedoils has largely increased when compared to that last year. Thirdly, the trade business has made a steady progress.In terms of the oils and oilseeds trade, the future transaction and the stock transaction are combined and theresearch on the market is strengthened by using innovative management means to fend off various operating risks.As a result, the annual sales of oils and oilseeds reached 470,000 tons with the sales revenue of RMB2 billion anda profit before tax of RMB32.7 million.Hainan Jingliang Holdings Co., Ltd.Annual Report 20187B. The Steady-state Growth of the Food DivisionIn 2018, the food processing division recorded main main operating revenue of RMB891 million with theyear-on-year growth of 7.47% and a profit before tax of RMB155 million with the year-on-year growth of 13.60%in the case of continuous influx of strategic competitors and the increased competition in the terminal market,remaining a steady development momentum. The snack food business adhered to the “Differentiated AsymmetricCompetition Strategy”, deepened the model of “Professional Production + Cultural Creativity + Internet”, as wellas implemented quality product and product transition strategies. As a result, for 2018, the snack food businessreported operating revenue of RMB816 million, up 5.87% year-on-year; and a profit before tax of RMB151million, representing a 13.07% growth as compared to last year. Meanwhile, thanks to greater efforts in othercities and product development, as well as the proactive efforts in expanding retail channels, the bread processingbusiness posted operating revenue of RMB77.26 million, up 26.86% year-on-year.C. Steady Development of Land Restoration BusinessIn 2018, No. 1 Document of the Central Committee of the Communist Party of China and the Rural WorkConference proposed the land restoration and rural complex construction, and the rural revitalization strategy alsomentioned the national strategy, which is an important opportunity for enterprises to enter this field. First, forXinyi Yaowan Town project, corresponding equity structure adjustment was made and Shanghai HehengManagement Consulting Co., Ltd. was involved as a wholly-owned subsidiary of Golden Concord HoldingsLimited (GCL Group). By virtue of obvious advantages in professional operation, it could facilitate the projectsconstruction while meeting high standards and achieving high efficiency. Second, for Tangshan CaofeidianProject, the operation is relatively simple as it is the restoration of mud flat land. At present, the project has beenapproved by