Shandong Airlines Co., Ltd. Summary of Annual Report 2018
Shandong Airlines Co., Ltd. Summary of Annual Report 2018
I. Important Notice
The summary is abstract from full-text of annual report, for more details of operating results, financial condition and future
development plan of the Company; investors should found in the full-text of annual report that published on media appointed by
CSRC.
Other directors attending the Meeting for annual report deliberation except for the followed
Title of the director not
Director not personally attended Reasons for absent Mandatory
personally attended
Wang Mingyuan Director Job-related reason Xu Chuanyu
Wang Jieming Director Job-related reason Li Xiuqin
Lv Hongbing Independent Director Job-related reason Xu Xiangyi
Duan Yalin Independent Director Job-related reason Hu Yuanmu
Prompt of non-standard audit opinion
□ Applicable √ Not applicable
The profit distribution plan that deliberated and approved by the Board is: Based on total stock issued 400,000,000 shares,
distributed2.00Yuan (tax included) bonus in cash for every 10-share hold by all shareholders, 0 shares bonus issued (tax included)
and no capitalizing of common reserves carried out.
Profit distribution pre-plan of preferred stock deliberated and approved by the Board in the reporting period
□ Applicable √ Not applicable
II. Basic information of the company
1. Company profile
Short form of the stock Shanhang-B Stock code 200152
Stock exchange for listing Shenzhen Stock Exchange
Person/Way to contact Secretary of the Board Rep. of security affairs
Name Dong Qiantang Fan Peng
1/F, Tiangong Office Building, North of 3/F, Tiangong Office Building, North of
Red-crowed cranes Hotel, Yaoqiang Red-crowed cranes Hotel, Yaoqiang
Office add.
International Airlines, Licheng District, International Airlines, Licheng District,
Jinan, Shandong Jinan, Shandong
Fax. 0531-85698034 0531-85698034
Tel. 0531-82085939 0531-82085586
E-mail dongqt@sda.cn fanp@sda.cn
2. Main business or product introduction in the reporting period
The Company is mainly engaged in international and domestic air passenger and cargo transportation business; hotel catering; aircraft
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Shandong Airlines Co., Ltd. Summary of Annual Report 2018
maintenance; civil aviation personnel training; insurance agency; airline agency business; ground services related to main business;
sales of aviation materials, general merchandise, food, health foods, handicrafts, souvenirs, etc., and retail sales of tobacco; leasing of
aviation materials; leasing of premises, rental of houses; business services; hotel accommodation agents and ticket agents; conference
services; transport agency services, air cargo storage; and labor services. Among them, international and domestic air passenger and
cargo transportation business is the Company's main business.
For more than 20 years, the company has always been giving first priority to “ensure safety, pay close attention to efficiency, and
strive to punctuality and quality service”. As of the end of 2018, the company has 122 airplanes of Boeing B737 series, and striding
into the ranks of large airlines. At present, the company bases its headquarters in Jinan and has branch offices and flight bases in
Qingdao, Yantai, Xiamen, Chongqing, Beijing, Urumqi and Guiyang. The company operates more than 200 domestic, international
and regional air routes, every week more than 3,700 flights fly to more than 80 large and medium-sized cities across the country, as
well as the regional routes to Taiwan region of China, and the international routes to South Korea, Japan, Thailand, Cambodia and
India.
3. Main accounting data and financial indexes
(1) Main accounting data and financial indexes for recently three years
In RMB
2018 2017 Changes over last year 2016
Operating income 18,765,953,326.74 16,484,713,152.23 13.84% 13,742,365,545.56
Net profit attributable to shareholders of
347,379,314.89 490,353,408.15 -29.16% 532,834,567.17
the listed company
Net profit attributable to shareholders of
the listed company after deducting 132,549,289.96 388,452,214.55 -65.88% 409,577,360.28
non-recurring gains and losses
Net cash flow arising from operating
2,450,017,519.48 1,870,048,122.23 31.01% 2,427,055,988.42
activities
Basic earnings per share (RMB/Share) 0.87 1.23 -29.27% 1.33
Diluted earnings per share (RMB/Share) 0.87 1.23 -29.27% 1.33
4.25 percentage points
Weighted average ROE 7.94% 12.19% 14.88%
down
Changes over end of last
End of 2018 End of 2017 End of 2016
year
Total assets 16,563,979,100.41 13,351,422,839.91 24.06% 12,741,974,788.53
Net assets attributable to shareholder of
4,471,325,978.28 4,253,141,013.93 5.13% 3,836,172,828.06
listed company
(2) Quarterly main financial index
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 4,496,320,014.09 4,232,958,550.56 5,715,619,936.36 4,321,054,825.73
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Shandong Airlines Co., Ltd. Summary of Annual Report 2018
Net profit attributable to
248,925,753.30 -45,195,048.65 612,878,294.50 -469,229,684.26
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
186,835,480.93 -124,926,168.36 582,643,401.11 -512,003,423.72
after deducting non-recurring gains
and losses
Net cash flow arising from
607,015,387.20 251,882,775.68 1,769,003,548.15 -177,884,191.55
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
□Yes √ No
4. Shares and shareholders
(1) Particulars about common stock shareholders, preference shareholders with voting rights recovered
and top ten shareholders
In Share
Total common Total preference
Total common stock Total preference shareholders with
stock shareholders with
shareholders at end of last voting rights recovered at end of
shareholders in 15,411 15,381 voting rights 0 0
month before annual report last month before annual report
reporting recovered at end of
disclosed disclosed
period-end reporting period
Top ten shareholders
Number of shares
Proportion Amount of
Nature of Amount of pledged/frozen
Full name of Shareholders of shares restricted shares
shareholder shares held State of
held held Amount
share
State-owned legal
Shandong Aviation Group 42.00% 168,004,000 168,004,000
person
State-owned legal
Air China Limited 22.80% 91,200,000 91,200,000
person
Foreign legal
NORGES BANK 0.87% 3,498,479 0
person
VANGUARD EMERGING Foreign legal
0.74% 2,960,917 0
MARKETS STOCK INDEX FUND person
WANXIANG INTERNATIONAL Foreign legal
0.66% 2,636,000 0
INVESTMENT CORPORATION person
ISHARES CORE MSCI EMERGING Foreign legal
0.51% 2,035,324 0
MARKETS ETF person
VANGUARD TOTAL Foreign legal
0.47% 1,872,902 0
INTERNATIONAL STOCK INDEX person
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Shandong Airlines Co., Ltd. Summary of Annual Report 2018
FUND
Domestic nature
Hou Chunhu 0.43% 1,731,045 0
person
Domestic nature
Chen Jingjian 0.40% 1,595,200 0
person
Domestic nature
Wang Jingqing 0.32% 1,279,053 0
person
1. Shandong Aviation Group(SDA) is the first largest shareholder of the
Company, who holds the shares of the Company on behalf of the State
with unlisted shares;
2. Air China Limited is the second largest shareholder of the Company,
who holds the shares of the Company on behalf of the State with
Explanation on related relationship or concerted action unlisted shares;
among the above mentioned shareholders 3. Among the above top ten shareholders, Air China Limited is the first
largest shareholder of the SDA, and there exists no associated
relationship between SDA and Air China and the other shareholders, and
they don’t belong to the persons acting in concert regulated by the
Management Regulation of Information Disclosure on Change of
Shareholding for Listed Companies with the other shareholders.
(2) Total preferred stock shareholders of the Company and shares held by top ten shareholders with
preferred stock held
The Company had no shareholders with preferred stock held in the reporting.
(3) Property right and controlling relationships between the actual controllers of the Company and the
Company is as follows:
Shandong Aviation Group
42%
Shandong Airlines Co., Ltd.
5. Corporate bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without payment in full at
maturity on the approval date for annual report disclosed
No
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Shandong Airlines Co., Ltd. Summary of Annual Report 2018
III. Discussion and analysis of business
1. Introduction of operation in the reporting period
In 2018, the Company has basically completed the intended target, and various works of operation are maintaining healthy
development with steady progress.
——Safety position is generally stable: In transpiration, we have ensured security flight of about 434,100 hours and 205,800 vehicles,
a respective increase of 8.1% and 6.1% on a year-on-year basis.
—— Obvious improvement in operation efficiency: On-time performance was 81.64%, a 11.48 percentage points up from a year
earlier, and ranks the No.2 in the industry; at second half of the year, we won the championship six times in succession of punctuality
rate for large airlines in China within the Asia Pacific Area.
——Maintain sustainable profitability: we completed a RTK of 3538 million TK in the year, and passenger traffic volume came to
25,462,000 person-time, cargo and mail transport volume reached 170,100 tons, an increase of 11.10%, 9.88% and 4.86% on a y-o-y
basis respectively; the operation revenue reached 18.77 billion Yuan, an increase of 13.84% from a year earlier; net profit has 0.35
billion Yuan, a decrease of 29.16 % from a year earlier. The passenger load factor (PLF) comes to 83.90%, a 0.75 percentage points
up on a y-o-y basis; freight rate goes to 40.44%, a 0.32 percentage points down from a year earlier.
——Steady improvement in service quality: Passenger satisfaction achieved 93.78 scores, risen by 2.06 score on a year-on-year basis;
passenger complaint rate was 0.692 times/ 10 thousand person, a 0.07 times/10 thousand person down; the acceptance of passenger
complaint rate has the lowest rate in main airlines for five consecutive years; won the title of “Best Airlines for Civil Aviation
Service” for continuous five years; awarded as the “Top 500 Most Valuable Brand in China” for eleven years in a row with brand
value up to 41,652 million Yuan, which ranking increased to ninety-ninth.
The Company mainly carried out the following work:
1. Continuously perfect safety management mechanism, improving the safety management & controlling efficiency
Firstly, improve the political positions and vigorously advocate the concept of safe development. Seriously study and implement
General Secretary Xi Jinping’s important instructions for civil aviation work, correctly handle the relationship between safety and
development, safety and efficiency, safety and normality, and safety and service, continue to strengthen the organization and leadership
of safety work, and implement the concept of safe development. Secondly, focus on the system efficiency and continue to promote the
construction of safety management system. Tease out the block safety responsibility interface, adjust the branch office structure and
business processes, and the coordination of regional security control are enhanced. Thirdly, strengthen the management and control of
qualifications and solidly carry out the construction of “three basics”. Fourthly, persist in the problem-oriented, and deepen the hidden
problem management and the risk prevention and control.
2. Optimize the operational management organization mechanism, and the operation quality is significantly improved
The first is to improve the flight normality control system and consolidate the operation quality foundation. Focus on the adjustment
of flight operation guarantee duties of branch offices and sales departments, and consolidate the responsibility of grassroots security.
The second is to strengthen the synergy linkage, and the operational efficiency is constantly improved. The third is to give play to the
technological advantages and improve the scientific level of operational management. Based on the operational needs of large corps,
build a production and operation information platform. Steadily promote the EFB (Electronic Flight Bag) project which has basically
reached the industry leading level. Vigorously promote the application of HUD (Head-Up Display) and realize the takeoff at the
capital airport with the low visibility of 90 meters.
3. Vigorously increase income and reduce expenditures, and strive to achieve better returns
The first is to continue to improve the route network structure and optimize the productive resource allocation. Spare no effort in
striving for the moment resource and improve the control of main bases. The second is to implement the refined marketing control and
actively expand the revenue channels. Online marketing control platform, market analysis and sales control become more accurate and
efficient. Improve the refund and rescheduling policies, increase the proportion of direct selling, and strengthen the development and
maintenance of large customers. The third is to vigorously implement the cost control, and the cutting down of cost brings notable
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Shandong Airlines Co., Ltd. Summary of Annual Report 2018
results. The fourth is to actively obtain the synergy income and achieve strong support for efficiency work. The fifth is to scientifically
grasp the market features, and the input and output are more matched. Make plans early according to the market features such as the
Spring Festival travel season, the shoulder season, the summer vacation, and the off season. Through the overall arrangement of
production inputs, the income-increasing ability in the peak season and the loss-reducing ability in the off season have been improved,
therefore, the cost pressures such as oil prices and exchange have been effectively overcome, and better returns were achieved.
4. Solidly promote the service innovation and continuously optimize the passenger experience
The first is to continue to improve the standard specifications and improve the service control effectiveness. The second is to promote
the application of new technologies and implement the service innovation and upgrading. The third is to adhere to the
problem-oriented, and improve the service weakness. Vigorously carry out the special treatment of luggage transport, continuously
improve on-board broadcasting services, and optimize the food pairing. The fourth is to enrich the carrier, strengthen the publicity,
and deepen the honest brand.
2. Whether the main business had major change in the reporting period
□ Yes √ No
3. About the industries, products, or regions accounting for over 10% of the company’s operating income
or operating profit
In RMB
Increase/decrease Increase/decrease Increase/decrease of
Gross profit
Name Operating revenue Operating cost of operating of operating cost gross profit ratio
ratio
revenue y-o-y y-o-y y-o-y
Air transport 2.79 percentage
18,061,328,802.95 960,942,787.74 5.32% 12.95% -25.87%
service points down
4. Whether the characteristics of management seasonal or cyclical need special attention
□ Yes √ No
5. In the reporting period, note of major changes in operating income, operating cost, total net profit
attributable to common stock shareholders of listed company or composing the previous reporting period
□ Applicable √ Not applicable
6. Particular about suspended and delisting
□ Applicable √ Not applicable
7. Relevant items involving financial report
(1) Particulars about the changes in aspect of accounting policy, estimates and calculation method
compared with the financial report of last year
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
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
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Shandong Airlines Co., Ltd. Summary of Annual Report 2018
(3) Compare with last year’s financial report; explain changes in consolidation statement’s scope
No changes in consolidation statement scope in the reporting period
Shandong Airlines Co., Ltd.
Legal representative: Sun Xiujiang
23 March 2019
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