Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
Stock code: 000045,200045 Stock Abbreviation: Shen Textile A, Shen Textile B Announcement No. 2019-14
Summary of 2018 Annual Report of Shenzhen Textile
(Holdings) Co., Ltd.
1. Important notes
The summary is abstract from full-text of annual report, for more details information , investors should found in
the full-text of annual report that published on website of Shenzhen Stock Exchange and other website appointed
by CSRC.
Other directors attending the Meeting for annual report deliberation except for the followed:
Name of director absent Title for absent director Reasons for absent Attorney
Zhu Jun Chairman Working reason Zhu Meizhu
Non-standard auditor’s opinion
□ Applicable √Not applicable
Preliminary plan for profit distribution to the common shareholders or turning the capital reserve into the share
capital for the reporting period, which has been reviewed and approved at the board meeting
□ Applicable √Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
Preliminary plan for profit distribution to the preference shareholders for the reporting period which has been
reviewed and approved at the board meeting
□ Applicable √Not applicable
II. Basic information about the company
1. Company profile
Stock abbreviation Shen Textile A，Shen Textile B Stock code 000045,200045
Stock exchange for listing Shenzhen Stock Exchange
Contact person and contact manner Board secretary Securities affairs Representative
Name Jiang Peng Li Zhenyu
6/F, Shenfang Building, No.3 Huaqiang 6/F, Shenfang Building, No.3 Huaqiang
Office Address
North Road, Futian District, Shenzhen North Road, Futian District, Shenzhen
Fax 0755-83776139 0755-83776139
Tel 0755-83776043 0755-83776043
E-mail jiangp@chinasthc.com lizy@chinasthc.com
II. Brief introduction to the main business or products in the reporting period
1. Main Business the Company
The company's main business covered such the high and new technology industry as represented by LCD
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Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
polarizer, its own property management business and the retained business of high-end textile and garment
In the report period, no significant change happened to the main business of the Company. On one hand, the
Company focused on promotion of the polarizer operation capacity, wherein it took measures of optimizing
production process and product structure, tightening quality control and highlighting technology research &
development among others, and shifted its priority from sales to selling profits in a strategically market-oriented
way; on the other hand, it completed the construction and optimization of the Line 6 Project as planned, to be
specific, In June 2018, it completed the technical transformation and test run of TFT-LCD and OLED polarizer
Line 6 Project that was transferred to fixed assets and embarked on a mass production stage. With regard to
optimization and promotion of the Line 6 Project, the Company completed the comprehensive acceleration of the
first three processes--pre-processing, extension and coating, introduced shape grinding machines in the rear
section of the production line in the first half of year and realized regular mass production in the third quarter,
filling the Company's gap in the shape polarizer processing; thirdly, the Company took the initiative to boost
construction of the jumbo TV polarizer industrialization project (Line 7) and completed the project approval,
feasibility study and examination and approval work. Adopted at the General Meeting of Shareholders in August
2018 through deliberation, the Line 7 Project duly embarked on its construction in September 2018 and passed the
EIA in December 2018. The plant and equipment design was optimized in the Line 7 Project on the ground of a
significant technical support given by Nitto Denko in terms of production technology, plant design, and AGV path
optimization among others; fourthly, to enhance management service and increase benefit of property
management enterprises, the Company further intensified all the management service ideas of property
management enterprises, took the initiative to cope with all the adverse effects of such factors as economic
downturn and market depression on property leasing and management and increased the rental income with effort;
fifthly, confronted with the sluggish traditional textile industry, the Company took the initiative to overcome such
unfavorable effects as a rise in the cost of raw materials and labor and gave priority to order production through
optimization of customer and product structure to bring the money-losing textile business into the black; sixthly,
the Company tightened safety and environmental protection work, safeguarded enterprise harmony and stability,
and kept giving a priority to safe and environment-friendly production to take the initiative to discharge its social
responsibility while pursuing a green, health and sustainable development.
As a type of upstream raw materials of LCD panels and one of essential and fundamental materials in the
panel display industry, polarizers are widespread used in a variety of areas, LCD panels and OLED panels for
smart phones, tablet PCs and TV sets, instruments, apparatuses, sunglasses, and light filters of camera equipment,
to name a few. At the moment, the Company has 6 mass polarizer production lines for making products that cover
such areas as TN, STN, TFT, OLED, 3D, dye films, and optical films for touch screens and are primarily used in
TV, NB, navigators, Monitor, vehicle-mounted, industrial control, instruments, apparatuses, smart phones,
wearable equipment, 3D glasses, sunglasses and other products, based on which, the Company has become a
qualified supplier to China Star Optoelectronics Technology (CSOT), BOE, Infovision Optoelectronics (IVO),
Shenchao Optoelectronic, LGD, Tianma and other major panel enterprises through constant extension of its
marketing channels and building of its own brand.
The Company's main products made in each polarizer production line and their application are as follows:
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Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
Line Place Product Planned capacity Main products
breadth
Line 1 Pingshan 500mm 600,000 m2 TN/STN/ dye film
Line 2 Longhua 500mm 1.2 million m2 TN/STN/CSTN
Line 3 Longhua 650mm 1 million m2 TN/STN/CSTN/TFT
Line 4 Pingshan 1490mm 6 million m2 TN/STN/CSTN/TFT
Line 5 Pingshan 650mm 2 million m2 TFT
Line 6 Pingshan 1490mm 10 million m2 TFT/OLED
Line 7 Pingshan 2500mm 32 million m2 TFT/OLED
(Under construction)
(II) Company's business model
The priority of the polarizer industry is gradually shifting from the conventional research &
development-production-sales business model to the customer-oriented business model of joint research &
development and full service. The Company reduced production links and costs and created value for customers
and a win-win situation through cooperation by understanding customers' needs, making high-quality products
through joint research & development and high-standard production management and using advanced polarizer
rolling and attaching equipment in conjunction with downstream panel manufacturers' production lines.
(III) Major factors for driving the Company's performance
Refer to "III. Analysis on core competitiveness" in this section for details.
(IV) Development stage and periodic characteristics of the industry where the Company is involved and the
Company's position in the industry
Refer to "IX. Company's outlook for future development" in Section IV for details.
In the future, the Company will deepen driving the mixed-ownership reform work and strengthen strategic
cooperation based on more than 20 years of industrial operation experience and regional advantages. To be
specific, the Company will further optimize its equity structure, invigorate its operation and promote its
production technology and business management standards through integration of resources in the polarizer and
optical film industries; meanwhile, the Company will spare no effort to push forward the construction of an
ultra-wide polarizer production line to occupy the highly lucrative jumbo LCD TV polarizer product market; in
addition to working on the polarizer industry, the Company will make a leaping development towards the optical
film industry to make SAPO Photoelectric a bigger and stronger enterprise.
3.Major accounting data and financial indicators
（1）Major accounting data and financial indicators for the last three years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √No
In RMB
Changed over last year
2018 2017 2016
（％）
Operating income（RMB） 1,272,356,771.34 1,475,545,719.72 -13.77% 1,198,200,216.42
Net profit attributable to the -22,980,624.93 52,776,101.46 -143.54% -87,270,604.54
shareholders of the listed company
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Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
（RMB）
Net profit after deducting of
non-recurring gain/loss attributable
-65,404,429.81 3,140,446.26 -2,182.65% -102,767,648.41
to the shareholders of listed
company（RMB）
Cash flow generated by business
-460,494,321.15 -28,518,702.31 -1,514.71% -55,264,465.84
operation, net（RMB）
Basic earning per
-0.04 0.100 -140.00% -0.17
share(RMB/Share)
Diluted gains per
-0.04 0.100 -140.00% -0.17
share(RMB/Share)(RMB/Share)
Weighted average ROE(%) -0.96% 2.23% -3.19% -4.10%
End of Changed over last year
End of 2018 End of 2016
2017 （％）
Gross assets（RMB） 4,619,203,416.79 4,195,746,507.56 10.09% 4,119,586,266.47
Net assets attributable to
shareholders of the listed company 2,373,329,991.86 2,397,474,603.79 -1.01% 2,339,554,176.31
（RMB）
（2）Main Financial Index by Quarters
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 221,307,388.08 252,955,020.49 433,011,400.70 365,082,962.07
Net profit attributable to the
5,616,717.00 4,030,259.15 2,621,782.96 -35,249,384.04
shareholders of the listed company
Net profit after deducting of
non-recurring gain/loss attributable
-4,641,384.38 -6,175,930.54 -7,620,712.88 -46,966,402.01
to the shareholders of listed
company
Net Cash flow generated by
-35,263,573.85 -93,587,315.59 -269,937,851.60 -61,705,580.11
business operation
Whether significant variances exist between the above financial index or the index with its sum and the financial
index of the quarterly report as well as semi-annual report index disclosed by the Company.
√ Yes □ No
Operating income First quarter Second quarter Third quarter 1-3 quarter in total
Disclosure amount 221,307,388.08 316,980,662.53 533,270,021.4 1,071,558,072.01
Audited Confirmed
221,307,388.08 252,955,020.49 433,011,400.7 907,273,809.27
Amount
discrepancy 0 -64,025,642.04 -100,258,620.70 -164,284,262.74
4.Share capital and shareholders
（1）Number of holders of ordinary shares and preference shares with restored voting right and Top 10
shareholders
In shares
Total number The total number Total
Total
of common of preferred shar preferred sharehold
shareholders at
shareholders at eholders voting ri ers at the end of the
the end of the
the end of the 36,891 35,264 ghts restored at p 0 month from the date 0
month from the
eriod-end(if of disclosing the
reporting date of disclosing
any)(See Notes annual report(if
period the annual report
8) any)(See Notes 8)
Shareholdings of top 10 shareholders
Shareholders Nature of Proportion of Number of Amount of restricted shares held Number of share
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Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
shareholder shares held(%) shares held pledged/frozen
at period
-end State of share Amount
Shenzhen
Investment State-owned
45.78% 234,069,436 0
Holdings Co., legal person
Ltd.
Shenzhen
Shenchao State-owned
Technology 3.15% 16,129,032 0
Investment Co., Legal person
Ltd.
Fujiang Bairui
Jiayuan, Asset
Management
Other 0.77% 3,934,035 0
Co., Ltd.－
Bairui Jiayuan
Growth I Fund
Domestic
Sun Huiming Nature 0.62% 3,192,767 0
person
Domestic
Li Songqiang Nature 0.56% 2,873,078 0
person
Domestic
Zheng Junsheng Nature 0.36% 1,830,000 0
person
Domestic
Kuang Guowei Nature 0.28% 1,457,000 0
person
Domestic
Zhu Ye Nature 0.22% 1,131,945 0
person
Domestic
Li Zengmao Nature 0.20% 1,038,800 0
person
Domestic
Hong Fan Nature 0.20% 1,028,900 0
person
Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of Shenzhen
Investment Holding Co., Ltd. and a person taking concerted action. Except this, the Company did
Related or acting-in-concert
not whether there is relationship between the top ten shareholders holding non-restricted negotiable
parties among shareholders
shares and between the top ten shareholders holding non-restricted negotiable shares and the top 10
above
shareholders or whether they are persons taking concerted action defined in Regulations on
Disclosure of Information about Shareholding of Shareholders of Listed Companies.
The Company Shareholder Fujiang Bairui Jiayuan, Asset Management Co., Ltd.－Bairui Jiayuan
Explanation on shareholders Growth I Fund holds 3,954,735 shares of the Company through stock account with credit
participating in the margin transaction; The Company Shareholder Li Songqiang holds 2,872,653 shares of the Company
trading business(if any ) through stock account with credit transaction ; The Company Shareholder Zhu Ye holds 1,031,945
shares of the Company through stock account with credit transaction.
2.Number of the preference shareholders and the shareholdings of the top 10 of them
□ Applicable √Not applicable
No preference shareholders in the reporting period
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Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
3.Relationship between the Company and its actual controller in the form of diagram
5. Corporation bonds
Corporate Bonds Indicate by tick market whether the Company has any corporate bonds publicly offered and
listed on the stock exchange, which were undue before the date of this Report’s approval or were due but could
not be redeemed in full.
No
III. Discussion and Analysis of the Management
1. Business Operation summary in the reporting period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In 2018, the economic environment change was intensified, and the Company was affected by unfavorable
factors such as Sino-US trade friction, large exchange rate fluctuations, intensified market competition, high
production unit consumption, poor product structure optimization, and the overall increase in production factors
prices. The business situation of polarizer production and operation was not up to expectations.
In 2018, the Company realized the operating income of RMB 1,272.3568 million, a decrease of 13.77% over
the same period of the previous year; the total profit recorded a loss of RMB 53.4231million, a decrease of 162.89%
over the same period of the previous year; the net profit attributable to owners of the parent company recorded a loss
of RMB 22.9806 million, a YOY decline of 143.54%. The main reasons for the Company's losses were: first, due to
the adverse impact of the decline in the price of the display terminal during the reporting period, the sales price of
polarizer for TV products of the Company declined; secondly, the project of Line 6 was still in the climbing stage
after the project was put into production, resulting in a fixed cost of the product unit was relatively high, third, in the
reporting period, due to the decline of the exchange rate of RMB against the Japanese yen, the purchase cost of
imported raw materials increased, and the exchange loss increased; fourth, due to the decline in the selling price of
the products during the reporting period, the provision for inventory falling price increased.
Facing the increasingly severe overall operation situation of polarizer and the weakening global economic
situation under the trade protectionism, the Company faced up to the difficulties, overcame the difficulties, gave
full play to its internal advantages, deepened and promoted the mixed-ownership reform work, and laid a solid
foundation for further transformation and development of the Company. It optimized the product structure of
traditional textile business to turn loss into profit; strengthened the management services of property-kind
enterprises and improved the efficiency.
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Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
Review of the company's key works carried out in 2018 as follows:
(I) Polarizer's operating capability has been improved
In 2018, based on market-oriented, the Company optimized the product structure, expanded the panel product to
high-value-added orders such as large-size and thin-form product, and shifted the emphasis from sales volume to
sales profit, sped up the introduction and start-up of new projects. Meanwhile, it had comprehensively carried out
high-profit machine verification work; second, focusing on technology research and development and the overall
strategic deployment, it increased the research and development efforts in new products, new materials,
production processes, etc.; third, optimized the production processes, improved the quality control, and controlled
the inventory quantity by reducing product quality abnormality and improving the inventory turnover; fourth,
actively strived for scientific research policy support funds. In 2018, a total of 50.84 million yuan of policy
funding subsidies was attained.
Furthermore, the Company increased research & development of independent intellectual property rights.
Throughout the year, the Company applied for 10 patents (including 4 invention patents and 6 utility model
patents) and imported 1 PCT patent (utility model patent) into South Korea and Japan respectively. Till December
31, 2018, the Company applied for 91 patents in total (66 licensed), including 23 national invention patents (8
licensed), 61 national utility model patents (54 licensed), 1 international invention patent (0 licensed) and 6
international utility model patents (4 licensed). The Company studied and formulated 4 national standards and 2
industrial standards which have been adopted and put into practice. The Company has two technical
platforms--"Shenzhen Polarizing Materials and Technology Engineering Lab" and "Municipal Research and
Development Center" where focus is given to research & development and industrialization of key LCD polarizer
production techniques, research & development and industrialization of new OLED polarizer products and
research on localization of polarizer production materials. The Company raised its research & development
standard in all respects by taking measures of introducing all types of precision testing equipment, improving
methods of preliminary and pilot tests and research & development incentive system and building an
"industry-university-research" integrated innovation platform among others.
(II) Enhancement of management services of property management and textile enterprises for the sake of
benefit increase
In 2018, the Company further reinforced all the management service ideas of property management
enterprises, handled all the adverse effects caused by economic downturn and market depression to property
leasing and management in a scientific way, faced up to difficulty with courage, made great efforts in leasing
operation to promote services and stabilize customers, carried out standardized management, enhanced correction
of potential safety threats, elaborated management process, lowered disbursement and enhanced efficiency to
increase the rental income.
Confronted the depression in the traditional textile industry, the Company took the initiative to overcome
effects of such unfavorable factors as a rise in the cost of raw materials and labor and gave priority to order
production through optimization of customer and product structure to bring the money-losing textile business into
the black.
（III) Completion of construction and optimization of Line 6 Project as scheduled
In view of a certain decline in the price of 32-inch products at the polarizer market at the end of 2017, the
Company optimized and promoted the main equipment in the Line 6 at the end of 2017, wherein the full
acceleration of the first three processes stood out, filling the gap of the Company in shape polarizer processing. In
June 2018, the Company completed the optimization, promotion and test run of the Line 6 Project that was
transferred to fixed assets and embarked on a mass production stage in the third quarter.
(IV) Facilitated construction of jumbo TV polarizer industrialization project with effort
In 2018, the Company took the initiative to boost construction of the jumbo TV polarizer industrialization
project (Line 7). In the first place, project approval, feasibility study and examination and approval were
completed. Adopted at the General Meeting of Shareholders in August 2018 through deliberation, the Line 7
Project duly embarked on its construction in September 2018 and passed the EIA in December 2018. Secondly,
the plant and equipment design was optimized in the Line 7 Project on the ground of a significant technical
support given by Nitto Denko in terms of production technology, plant design, and AGV path optimization among
others. Thirdly, a business unit was set up for the Line 7 Project where independent accounting and business
management were implemented to push forward project construction with all the efforts.
（V）Tightened safety and environmental protection and safeguarding of enterprise harmony and stability
In 2018, the Company kept giving a priority to safe and environment-friendly production by adhering to the
philosophy of safety overriding anything else. As always, the Company highlighted the safety and environmental
protection work. Throughout the year, the Company invested RMB 18.71 million in adding and maintaining safe
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Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
and environment-friendly equipment, predominantly completed upgrading and transformation the waste water
processing system and updating the RTO waste gas processing equipment in the Line 6 and updating and
eliminating high liquor ratio dying equipment for Beauty Century among other work, and fulfilled 100%
up-to-standard waste water and gas emission, 0 more-than-average environmental pollution accident and 0
environmental protection irregularity to practically perform its social responsibility.
（VI) Constant reinforcement of foundation and strengthening of primary Party building work
On the ground of implementing and putting into practice the spirit of the 19th National Congress of the
Communist Party of China, the Company thoroughly carried out the Party's new deployment and demand for
seeing Party self-governance exercised fully and with rigor, carefully fulfilled the entity responsibility of the Party
Committee and supervision responsibility of the Disciplinary Inspection Commission, reinforced the system of
"one post taking a dual responsibility", and implemented the Party Building Responsibility Statement to guarantee
that the Party building work was put into practice; it pushed forward Party building system building and raised the
standard of the normalization of the Party building work step by step; it took the initiative to explore and drive the
Party building work in enterprises involved in mixed-ownership reform and guided corporate business
development by Party building work.
2. Material change in principal activities during the reporting period
□ Yes √ No
3. Products accounting for over 10% of revenue or profit from principal activities of the Company
√ Applicable □ Not applicable
In RMB
Increase/decrease Increase/decrease Increase/decrease
of revenue in the of business cost of gross profit
Gross profit
Name Turnover Operation cost same period of over the same rate over the same
rate(%)
the previous period of period of the
year(%) previous year (%) previous year (%)
Lease and
Management of 98,327,018.46 42,185,793.46 73.72% 4.85% 15.84% 2.05%
Property
Textile 47,188,632.17 687,575.76 12.92% 14.33% 140.62% 3.24%
Polarizer sheet 832,221,198.11 -113,277,631.27 4.07% -2.27% -522.35% -5.29%
Trade 288,744,806.35 15,542,225.95 5.97% -38.13% 103.04% 4.25%
4. Seasonal or cyclical operations requiring special attention
□ Yes √ No
5. Significant YoY changes in the operating revenues, operating costs and net profits attributable to the
common shareholders or their composition
√ Applicable □Not applicable
During the reporting period, the total net profit attributable to ordinary shareholders of the listed company is
RMB-22,980,624.93, which was mainly due to the following factors: 1. The end sales of displayer shrank and the
sales price fell, resulting in the Company's polarizer products’ sales decline; 2. The Phase II of Line 6 project of
TFT-LCD was still in the climbing stage after the project was put into production, resulting in a higher fixed cost of
the product unit; 3. during the reporting period, the RMB exchange rate fell, and the purchase cost of imported raw
materials increased, resulting in an increase in the variable cost of the product unit, and the exchange loss increased;
4. during the reporting period, it’s expected that the decline in product prices may continue, and the provision for
inventory falling price was increased due to the principle of prudence.
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Summary of 2018 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.
6. Suspension in trading or delisting
□ Applicable √ Not applicable
7. Events relating to the financial report
(1) Particulars about the changes in aspect of accounting policy, estimates and calculation method
compared with the financial report of last year
□ Applicable √ Not applicable
There Company has no accounting policy, estimates and calculation method changed in the period
(2) Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the
period
(3) Compare with last year’s financial report; explain changes in consolidation statement’s scope
□ Applicable √ Not applicable
No changes in consolidation statement scope in the reporting period
The Director of Board of Shenzhen Textile (Holdings) Co., Ltd.
April 27, 2019
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