2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
Stock Code: 000869， 200869 Stock Abbreviation: Changyu A， Changyu B Announcement No.: 2019-Final01
Yantai Changyu Pioneer Wine Co. Ltd.
2018 Annual Report Abstract
1. Important Notice
This Annual Report abstract comes from the whole contents of annual report. If investors desire to
comprehensively understand the Company’s operating results, financial situation and future
development plan, please read the Annual Report on the media specified by the China Securities
Regulatory Commission.
No directors, supervisors or senior executives issue a statement of objection to 2018 Annual Report.
Except following directors, all other directors have personally attended the meeting for deliberating
the annual report.
Director name with Director post with Reason for non-present Name of mandatory
non-present in person non-present in person in person
Sun Liqiang Director Business trip Zhou Hongjiang
Antonio Appignani Director Business trip Augusto Reina
Non-standard audit opinion notice
□Available Not available
The preliminary scheme of the report period’s ordinary share profit distribution or increasing equity
with reserve deliberated by the board of the directors
Available □Not available
Whether to increase equity with reserve
□Yes No
The Company’s draft plan of ordinary share profit distribution deliberated and passed by the board of
the directors is as following: Based on the Company’s total 685,464,000 shares，the Company plans
to pay CNY 6 (including tax) in cash as dividends for every 10 shares to all shareholders and to send
0 bonus (including tax). The capital reserve will not be converted to capital stock.
The draft plan of preferred share profit distribution during the report period deliberated and passed
by the board of directors
□Available Not available
2. Basic information of the Company
(1) Brief introduction of the Company
Changyu A, 000869,
Abbreviation of Shares: Code number of the Shares
Changyu B 200869
Place of listing of Shares Shenzhen Stock Exchange
Contact person and information Secretary to the Board of Authorized Representative of the
1
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
Directors Securities Affairs
Name Mr. Qu Weimin Mr. Li Tingguo
56 Dama Road, Yantai, 56 Dama Road, Yantai,
Address
Shandong, China Shandong, China
Fax 0086-535-6633639 0086-535-6633639
Tel 0086-535-6633656 0086-535-6633656
E-mail quwm@changyu.com.cn stock@changyu.com.cn
(2) Main businesses during the report period or brief introduction of products
During the report period, the Company’s main business is to produce and operate wine and brandy,
providing domestic and foreign consumers with healthy and fashionable alcoholic drinks. Compared
with last report period, there are no significant changes in the Company’s main business. The wine
industry in which the Company is located is still in the growth stage and the domestic wine market is
generally on the rise. The Company is at the forefront of domestic wine industry..
(3) Key accounting data and financial indicators
①Key accounting data and financial indicators in recent three years
Whether the Company makes retroactive adjustments or restates the accounting data of previous
fiscal years
□Yes No
Unit: CNY
More or less than
Item 2018 2017 2016
Last year (%)
Operation revenue 5,142,244,740 4,932,545,229 4.25% 4,717,596,472
Net profit attributed
to the shareholders of 1,042,632,929 1,031,695,056 1.06% 982,460,488
the listed company
Net profit attributed
to the shareholders of
the listed company
965,426,238 986,095,872 -2.10% 941,730,478
after deducting the
irregular profit and
loss
Net cash flows from
the operating 975,978,746 973,243,027 0.28% 889,911,970
activities
Basic earnings per
1.52 1.51 0.66% 1.43
share (CNY/share)
Diluted earnings per
1.52 1.51 0.66% 1.43
share (CNY/share)
Weighted average for 11.23% 12.14% -0.91% 12.55%
2
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
earning rate of the
net assets
More or less than
Dec. 31st 2018 Dec. 31st 2017 Dec. 31st 2016
Last year (%)
Total assets 13,117,729,052 12,536,755,208 4.63% 11,528,077,971
Net Assets attributed
to the shareholders of 9,606,099,365 8,906,342,299 7.86% 8,209,010,989
the listed company
②Key accounting data by quarter
Unit: CNY
st nd rd th
1 Quarter 2 Quarter 3 Quarter 4 Quarter
Operation revenue 1,804,057,976 1,024,172,088 1,032,328,986 1,281,685,690
Net profit attributed to
the shareholders of the 479,444,238 156,393,167 133,916,250 272,879,274
listed company
Net profit attributed to
the shareholders of the
listed company after 466,181,564 140,497,155 110,520,695 248,226,824
deducting the irregular
profit and loss
Net cash flows from the
507,263,964 45,489,508 224,087,322 199,137,952
operating activities
Whether there are significant differences between above-mentioned financial indicators or their sum
and the related financial indicators in the quarterly report and semi-annual report disclosed by the
Company.
□Yes No
3
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
(4) Capital stock and shareholders’ situation
① Number of ordinary shareholder and preferred shareholder recovering voting power, and situation of shares held by top ten
shareholders
Unit: share
Total number of preferred
Total number of
Total number of preferred shareholder recovering
ordinary shareholders
shareholder recovering voting power by the end
Total shareholders in the report period 42,980 by the end of last month 45,104
voting power by the end 0 0
before the disclosure of last month before the
of report period
day of the annual report disclosure day of the
annual report
The top 10 shareholders holding situation
Number of held Pledged or frozen situation
Shareholding shares with
Name of Shareholders Character of shareholders Number of held shares
ratio (%) restricted Share status Number
condition
Domestic non-state-owned
YANTAI CHANGYU GROUP CO., LTD. 50.40% 345,473,856 0
legal person
GAOLING FUND,L.P. Foreign legal person 3.08% 21,090,219 0
CHINA SECURITIES FINANCE CORP State-owned legal person 2.25% 15,440,794 0
BBH BOS S/A FIDELITY FD - CHINA
Foreign legal person 2.22% 15,241,826 0
FOCUS FD
SHENWAN HONGYUAN Foreign legal person
1.22% 8,347,663 0
SECURITIES(HONGKONG) LIMITED
FIDELITY PURITAN TRUST: FIDELITY Foreign legal person 0.89% 6,100,762 0
4
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
SERIES INTRINSIC OPPORTUNITIES
FUND
TAIKANG LIFE INSURANCE LIMITED
LIABILITY COMPANY-- UNIT Domestic non-state-owned
0.75% 5,159,757 0
–LINKED-- INDUSTRY legal person
CONFIGURATION
GUOTAI JUNAN
Foreign legal person 0.74% 5,043,507 0
SECURITIES(HONGKONG) LIMITED
CENTRAL HUIJIN ASSET
State-owned legal person 0.69% 4,761,200 0
MANAGEMENT LIMITED
TAIKANG LIFE INSURANCE LIMITED
LIABILITY Domestic non-state-owned
0.69% 4,746,954 0
COMPANY-DIVIDEND-PERSONAL legal person
DIVIDEND-019L-FH002 SHEN
Among the top 10 shareholders, there is associated relationship between Taikang Life Insurance Limited
Liability Company- Unit-linked- Industry Configuration and Taikang Life Insurance Limited Liability
The explanation for the associated relationship and
Company- Dividend- Personal dividend-019L-FH002 Shen. Yantai Changyu Group Company Limited has no
accordant action
associated relationship or accordant action relationship with the other 9 listed shareholders, and the
relationship among the other shareholders is unknown.
Explanation for shareholders who involved in
The top 10 shareholders do not involve in financing activities and stock trade business.
financing activities and stock trading business
②Number of preferred shareholder and situation of preferred shares held by top ten preferred shareholders
□Available Not available
There are no shares held by preferred shareholders during the report period.
5
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
③Introduction for property right and control relations between the Company and its actual controllers
6
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
(5) Company Bonds
Whether or not the Company has the corporation bonds issued in public, listed in the stock exchange,
not due on the annual report’s authorized issue date or failed to pay in full on the due date.
No.
3. Management Discussion and Analysis
(1) Brief introduction of operation situation during the report period
①Summary
In 2018, influenced by many factors, such as the slowdown of domestic economic growth and the
increase in uncertainty resulting from Sino-US trade friction, the overall sales amount of domestic
wine industry was relatively stable, but the sales volumes of both imported wine and domestic wine
decreased. As imported wine continued occupying the market of domestic wine, the competition in
domestic wine market was very strong. Furthermore, the increase in the price of raw materials and
packing materials as well as increase in the depreciation of fixed assets, freight and labor cost further
increased the pressure of the company’s increase in profit. Facing quite a lot of external
disadvantages, the Company insisted in taking the market as the center, insisted the development
strategy of “Focus on middle-and-high level, Focus on high quality, Focus on big product”,
intensified internal reform, optimized product structure and market layout, quickened the pace of
new product development and market promotion, and strived to promote product sales, achieving
good results and realizing operating revenue of CNY5142.24million with an increase of 4.25%
compared with last year and net profit of CNY1042.63million belonging to the parent company’s
shareholders with an increase of 1.06% compared with last year.
②Analysis of main business
Increase or decrease of
Description the end of the period Cause of significant changes
over the end of last year
Mainly because of increase in average
Operation revenue 4.25% price of products resulting from
improvement of product mix
Mainly because of increase in the price of
Operating cost 13.76%
raw materials and packing materials
Mainly because of year-on-year increase
Sales expense 0.16%
in wage & welfare
Mainly because of year-on-year increase
Management expense 2.12% in wage & welfare and depreciation of
afforestation fees
Mainly because of increase in expenses
R&D expense 10.72% for technology research and development
in 2018
7
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
Mainly because of increase in loan
Financial expense 93.36%
interest expenditure
Net amount of cash Mainly because of increase in received
flow generated in 0.28% cash from product sales and rendering of
operating activities serdeputy
Net amount of cash
Mainly because of increase in received
flow generated in 38.08%
cash from t recouping the investment
investment activities
Net amount of cash
flow generated in Mainly because of increase in payment of
-77.83%
capital-raising cash for debt repayment
activities
Review and summary of the process of the Company’s early-disclosed development strategy and
business plan during the report period
During the report period, the Company realized the operating revenue of CNY5142.24million with
an increase of 4.25% compared with last year, slightly lower than the target fixed at the beginning of
the year of realizing operating revenue no less than CNY5.2billion. The net profit of CNY1042.63
million belonging to the parent company’s shareholders was realized with an increase of 1.06%
compared with last year. The main work during the report period were shown as followed:
Firstly, the Company took the market as the mirror, further promoted the strategy of three Focus,
strengthened internal adjustment and reform intensity, accelerated the launch of new products and
market expansion of core products, and strived to develop E-business, achieving good results.
During the report period, the Company reorganized sales team, preliminarily realized the reduce in
staff number and the improve of efficiency, conducted the work of “sales team jointly built by
manufacturers and distributors”, actively explored the expense input management and control mode
of “check and balance between manufacturers and distributors ”, and received preliminary effects.
Ten provincial brandy companies were newly established. Specialized provincial wine companies
and comprehensive provincial companies were subdivided. Three business segments, including
provinces and cities such as Zhejiang, Fujian, Guangdong, Jiangsu, Shandong, Beijing and Shanghai
etc and E-business and so on, realized authorized operation. The Company adjusted the function of
VIP customer business, peeled off distribution business in direct supply system, further defined the
relationship between the Changyu parent brand and its subsidiary brands, formed the core brand
system of various liquors and made development planning of each brand. Series of new products,
such as the ninth generation Noble Dragon, new Zenithwirl, 15-year Koya, 10-year Koya, 6-year
Koya, Australian Kilikanoon products and Chilean Indomita products and so on, received wide
praises and the demand of partial products exceeds supply owing to their hot sale. The Company
insisted on the strategy of three Focus, weeded out 134 kinds of wine and centralized most
marketing resources to be used for market promotion of middle-to-high-end wine, five-star and
above brandy and imported wine with own brands, making sales revenue of wine and brandy achieve
different levels of increase.
8
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
Secondly, the Company took the quality as the basis, regarded product quality as an important magic
weapon to defeat enemies. It conducted all-around self-examination, self-correction and
optimization on the selection of grape base, grape planting mode, production process and technology,
quality testing equipment and product quality control system etc, formulated three-year planning,
implementation scheme and specific measures for product development and quality improvement in
future three years, strengthened technical exchanges at home and abroad and team construction of
winemakers, focused on new product development and technical difficulties, improved the quality
traceability system and strengthened quality control in the whole production process, making the
company's technical level and product quality reach a new level. The Company carried out 45
technology researches and completed one sub-project of national 863 project. Drafted standards of
Wine-making Grape and Oak Barrel passed the group standards assessment by China Alcoholic
Drinks Association, filling in gaps of domestic wine industry. Key Technology Research and
Application in Industrialization of Domestic Oak Products was declared for 2018 scientific and
technological progress award of China Alcoholic Drinks Association. Key Technology Research for
Premium and Characteristic Wine-making Grape Cabernet Gernischt and Wine Production won
scientific and technological progress award of China National Light Industry Council. In 2018 IWSC,
Kilikanoon Wines Pty Ltd in Australia was awarded “Australian Best Wine Producer of the Year”
and was the only one chateau awarded by IWSC among more than 4000 chateaux in Australia, of
which 2014 Kilikanoon Estate Special Reserve Shiraz 8K won outstanding gold medal with scores
of 93 points and above) as well as the trophy of “World’s Best Shiraz of the Year” while 2016
Kilikanoon Estate Wine Blend 6K won gold medal with scores of 90 to 92.9 points. Kilikanoon
Wines Pty Ltd was honored with the title of “Australian Best Wine Producer of the Year” in 2018
Mundus Vini. 2014 Kilikanoon Estate Special Reserve Shiraz 8K won gold medal in DAWA with
the score of 95. 2015 Moser Family Cabernet Sauvignon Red Wine, 2016 Moser Legend Cabernet
Sauvignon White Wine, 2015 Golden-label Icewine of Golden Icewine Valley and 2015 Blue-label
Icewine of Golden Icewine Valley won gold medal in the 22nd session of Berliner Wein Trophy.
Changyu Five-star Fine Brandy won gold medal in 2018 Spirits Selection by Concours Mondial de
Bruxelles. Changyu Koya 15-years XO brandy ageing in oak barrel won the design award of luxury
category in 2018 Pentawards Award Ceremony. “Water-drop Decanter” of Changyu Koya 10-years
XO Brandy won the design award of packaging category in 2018 iF Design Award Ceremony held
at BMW Welt in Munich, Germany.
Thirdly, the Company realized online identification and order-driven mode of major products.
During the reporting period, the Company issued Assessment Measures for Performance Rate of
Production Order, gave full play to advantages of advanced production facilities, high automation
and informationization and fast production speed, optimized and adjusted business processes, and
strengthened coordination of supply, production and sales, making 27 kinds of Noble Dragon
products with high sales volume and all domestic chateau wines achieve order-driven mode. Most
domestic wine products achieved online tagging, which improved production efficiency and delivery
speed, dramatically reduced product and capital backlogs and better satisfied the market needs.
Fourthly, the Company enhanced financial management and established and improved the
assessment system taking profit as principal line. During the report period, the Company
strengthened the management in financial budget, fixed funds and overseas enterprises’ financial
9
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
affairs, enhanced the audit in price execution, gross profit margin, capital occupation, key expenses,
and investment projects, increased the investigation of economic responsibility, scientifically
allocated internal capital, vigorously strived for policy-based capital loans and continuously reduce
the cost of capital. It strengthened the simulated profit assessment of authorized business units and
strived to establish a profit assessment system covering all business segments and respective
responsibilities in order to provide a basic basis for more reasonable and efficient performance
assessment and to improve profitability.
Fifthly, the Company successfully completed the procurement of raw materials including grapes and
further strengthened the management in grape base. The Company comprehensively accomplished
the procurement plan of raw materials exemplified as grapes, improved the fermentation rate of
premium wines, further deepened sort management and sort acquisition of grape bases and continued
promoting the mechanization process in vineyards, lowering the operating costs of self-supported
grape bases and making scientific and normative management in grape base reach a higher level. It
raised grape purchase standard, improved raw material quality, actively conducted the introduction,
selective breeding and improvement of new grape varieties and characteristic varieties and cultivated
a lot of new varieties, enriching the variety resource for future product development. It also
organized orchardist to take professional training on grape planting technology, which improved
their grape planting and management level.
Sixthly, the Company continued promoting internationalization strategy and steadily implemented
overseas acquisition. It acquired 80% equity of Kilikanoon Estate Pty Ltd in Australia.
③Revenue and cost
1) Composition of operation revenue
Unit: CNY
2018 2017
Year-on-year
` Proportion in Proportion in increase or
Amount operation Amount operation decrease (%)
revenue revenue
Total
operation 5,142,244,740 100% 4,932,545,229 100% 4.25%
revenue
Industry-classified
Industry of
liquor and
alcoholic 5,142,244,740 100% 4,932,545,229 100% 4.25%
beverage
Product-classified
Wine 4,000,233,434 77.79% 3,829,326,556 77.63% 0.16%
Brandy 999,207,299 19.43% 989,889,728 20.07% -0.64%
10
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
Others 142,804,007 2.78% 113,328,945 2.30% 0.48%
Area-classified
Domestic 4,486,387,956 87.25% 4,497,288,066 91.18% -3.93%
Abroad 655,856,784 12.75% 435,257,163 8.82% 3.93%
2) Condition of industry, product or area accounting for over 10% of the Company’s operation
revenue or operating profit
Available □Not available
Whether the Company needs to follow disclosure requirements of special industry
No
Unit: CNY
Year-on
Year-on- Year-on-
-year
year year
increase
increase increase
Gross or
or or
Operation revenue Operating cost profit decrease
decrease decrease
rate (%) of
(%) of (%) of
gross
operation operating
profit
revenue cost
rate
Sector-classified
Sector of
liquor
and 5,142,244,740 1,901,611,507 63.02% 4.25% 13.76% -3.09%
alcoholic
beverage
Product-classified
Wine 4,000,233,434 1,460,855,413 63.48% 4.46% 15.36% -3.45%
Brandy 999,207,299 403,699,973 59.60% 0.94% 14.58% -4.81%
Others 142,804,007 37,056,121 74.05% 26.01% -29.91% 20.70%
Total 5,142,244,740 1,901,611,507 63.02% 4.25% 13.76% -3.09%
Area-classified
Domestic 4,486,387,956 1,477,589,238 67.07% -0.24% 7.17% -2.27%
Abroad 655,856,784 424,022,269 35.35% 50.68% 44.76% 2.65%
Under the condition that the statistical caliber of the Company’s main business data is adjusted
during the report period, the Company’s main business data adjusted on the basis of caliber at the
end of report period in recent one year.
□Available Not available
(2) Whether major business has significant changes during the report period?
11
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
□Yes No
(3) Condition of products accounting for over 10% in the Company’s main business income or
main business profit
Available □Not available
Unit: CNY
Year-on-y Year-on-y Year-on-y
ear ear ear
increase or increase or increase or
Gross
Operation revenue Operating cost decrease decrease decrease
profit rate
(%) of (%) of (%) of
Operation operating gross
revenue cost profit rate
Wine 4,000,233,434 1,460,855,413 63.48% 4.46% 15.36% -3.45%
Brandy 999,207,299 403,699,973 59.60% 0.94% 14.58% -4.81%
Others 142,804,007 37,056,121 74.05% 26.01% -29.91% 20.70%
Total 5,142,244,740 1,901,611,507 63.02% 4.25% 13.76% -3.09%
(4) Whether there are seasonality or periodicity operating features required special attention
□Yes No
(5) Explanation for significant changes in operation revenue, operating cost, total net profit or
constitution attributable to the ordinary shareholders of the listed company compared with
last report period
□Available Not available
(6) Condition of Facing listing suspension and termination
□Available Not available
(7) Items related to financial report
①Situation explanation for changes in the accounting policy, accounting estimation and
accounting method compared with 2017 annual financial report
□Available Not available
There is no change in the accounting policy, accounting estimation and accounting method during the
report period.
②Situation explanation for the correction of major accounting errors need to be retrospected
and restated during the report period
□Available Not available
There is no situation for the correction of major accounting errors need to be retrospected and
restated.
12
2018Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd.
③Situation explanation for changes in the scope of consolidated statements compared with
2017 annual financial report
Available □Not available
According to Share Sale & Purchase Agreement signed on December 5th, 2017 between the
Company and shareholders of Kilikanoon Estate Pty Ltd, the Company acquired 80% equity of
Kilikanoon Estate Pty Ltd with the price of AUD20,860,825 (equivalence CNY107,194,420) to. The
Company has completed equity transfer on January 18th, 2018, obtaining control rights of finance
and business policy for Kilikanoon Estate Pty Ltd. During the report period, this company has been
included in the scope of consolidated statements.
Yantai Changyu Pioneer Wine Co., Ltd.
Board of Directors
April 20th, 2019
13
