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粤华包B:2019年年度报告摘要(英文版)2020-03-24  

						Foshan Huaxin Packaging Co., Ltd.                                                 Annual Report 2019 (Summary)




Stock Code: 200986                     Stock Name: Huaxin Packaging-B                    Announcement No. 2020-010



                     FOSHAN HUAXIN PACKAGING CO., LTD.
                          ANNUAL REPORT 2019 (SUMMARY)

Part I Important Notes

This Summary is based on the full text of the 2019 Annual Report of Foshan Huaxin Packaging Co., Ltd.

(together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). In

order for a full understanding of the Company’s 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 the

media designated by the China Securities Regulatory Commission (the “CSRC”).



Objections raised by any of the directors, supervisors or senior management against any contents in this Report or

its summary: Not applicable



All the Company’s directors have attended the Board meeting for the review of this Report and its summary.



Independent auditor’s modified opinion: Not applicable



Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:

Applicable



Bonus issue from capital reserves: None

The Board has approved a final dividend plan for ordinary shareholders as follows: based on the 505,425,000

shares, a cash dividend of RMB0.15 (tax inclusive) per 10 shares is to be distributed to the shareholders, with no

bonus issue from either profit or capital reserves.



Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period: Not

applicable




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Foshan Huaxin Packaging Co., Ltd.                                                        Annual Report 2019 (Summary)




This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies

or misunderstandings between the two versions, the Chinese versions shall prevail.

Part II Key Corporate Information

1. Stock Profile

Stock name                          Huaxin Packaging-B           Stock code                   200986
Stock exchange for listing          Shenzhen Stock Exchange
          Contact information                      Board Secretary                        Securities Representative
Name                                Ding Guoqiang                              Shi Hui
                                    2/F, Block 7, 3 Keyang Road, Luoge Park,   2/F, Block 7, 3 Keyang Road, Luoge Park,
                                    Chancheng Economic Development Zone,       Chancheng Economic Development Zone,
Address
                                    Nanzhuang Town, Chancheng District,        Nanzhuang Town, Chancheng District,
                                    Foshan, Guangdong Province, P.R.China      Foshan, Guangdong Province, P.R.China
Fax                                 0756-8666922                               0756-8666922
Tel.                                0756-8666975                               0756-8666978
Email address                       dinggq@htrh-paper.com                      shih@htrh-paper.com


2. Principal Activities or Products in the Reporting Period


The Company specializes in the R&D, production and sales of high-end coated ivory board, chemicals for paper
making and color printing products. The businesses are described as follows:
(I) High-end coated ivory board
High-end coated ivory board is the primary product of the Company. As a category of white paperboard, it is
applied in various fields such as cigarette packaging, food packaging, medicine packaging, cosmetic packaging
and living supplies packaging, which represent the core business of the Company. The R&D, production and sales
of the ivory board is mainly undertaken by Zhuhai Hongta Renheng Packaging Co., Ltd. and Zhuhai Huafeng
Paper Co., Ltd. Hongta Renheng is the core high-end packaging board platform under Huaxin Packaging which is
based in domestic and overseas high-end packaging markets of cigarette and food and provides "personalized"
products and services for customers with "differentiation" business strategy. The Company now has three coated
ivory board production lines, and the annual production capacity around 600,000 tons. The Company's products
can be divided into the following categories:
1. Coated ivory board for cigarette packaging, the primary product of the Company, is used in the high-end
cigarette packaging market. The coated ivory board for cigarette packaging produced by Hongta Renheng takes up
a dominant position in the domestic cigarette packaging field. It represents the highest level of coated ivory board
quality in China. It has won a Golden Award at China’s International Paper & Paper Product Brands Exhibition,
and the top award of the Chinese science and technology community—the first-class State Science and
Technology Advancement Award. The anti-counterfeit coated ivory board with color fiber and true-color fiber
etc.—a technology that is independently developed by the Company and has been granted the national invention
patent of China—has been successfully applied in the packaging of a series of cigarettes in the “Hongta Group”


                                                                                                                          2
Foshan Huaxin Packaging Co., Ltd.                                                       Annual Report 2019 (Summary)



and “HongyunHonghe Group" brands to combat counterfeiting from the packaging materials, reaching the
significant anti-counterfeit results of “easily identifiable but difficult to copy”. The “tobacco fiber ivory board”, a
new product of the Company that pursues the recycling philosophy of “Coming from Tobacco, Used for Tobacco”,
is being tested on the market. And the “black cardboard for cigarette packaging” newly launched to the market is
well-received among customers with stable hue in printing.
2. In terms of ivory board for liquid and food packaging, the Company is the first to break the foreign
technological monopoly with its ivory board for liquid packaging. The Company’s homegrown sterile paperboard
for packaging of liquid milk, fruit juice, herbal tea and other drinks has effectively substituted imported products.
The ivory board series for food packaging such as anti-oil food grade coated board and high-end paper cup have
been recognized by well-known catering groups after they are put into the market. Upholding the philosophy of
sustainable development, Hongta Renheng has successfully developed the “plastic-free coated board for food
packaging” and the “PE-free paper for paper cups”, which is an effective alternative to plastic package and can
help reduce the use of plastic.
3. The high-end commercial ivory board is applied in the segmented packaging market fields like the high-end
medicine, cosmetics, and daily necessities. The anti-counterfeit coated ivory paper with personalized
identification code independently developed by the Company and for which it has been granted the invention
patent has been successfully applied in the anti-counterfeit packaging of the high-end products like high-end
medicine and cosmetics, which does not only solve the difficulties posed by impact from counterfeit and shoddy
products for customers at the source, but also effectively reduces the customer’s anti-counterfeit costs and fake
product crackdown expanses and win high trust from the market. Meanwhile, the “paper for cluster packaging”
launched in 2019 can cater to various sorts of packaging needs and excels as a green material.
(II) Chemicals for paper making
Chemicals for paper making represent an upstream extension of the Company’s business of the paper-making
industrial chain. The R&D, production and sales of which are mainly undertaken by Golden Pheasant Chemical, a
subsidiary of the Company, which mainly supplies carboxylic butadiene-styrene latex, styrene-acrylic latex,
super-fine calcium carbonate and auxiliary chemicals for paper making. These products of domestically first-class
quality are mainly used by major coated board producers in China as adhesive and pigment. Therefore, Golden
Pheasant Chemical is considered a well-known papermaking latex producer in China.
(III) Color printing products
Color printing represents a downstream extension of the Company’s business of the paper-making industrial chain,
which covers designing and manufacturing packaging materials and providing one-stop packaging solutions for
customers. This business is mainly undertaken by Huaxin (Foshan) Color Printing Co., Ltd., which owns offset,
flexo and intaglio printing workshops. Main products include color boxes, various labels (paper label, in-mold
label and sticker), barcode printing, brochures and books, and variable data printing is also available, which cater
to various fields of end consumer goods, including medicine, condiments and beverages. The most outstanding
advantage is customization from the material end, providing greener, more economical and individualized



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Foshan Huaxin Packaging Co., Ltd.                                                                 Annual Report 2019 (Summary)



packaging materials for customers.


3. Key Financial Information


(1) Key Financial Information of the Past Three Years


Indicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No
                                                                                                                           Unit: RMB
                                                                                           2019-over-2018
                                               2019                     2018                                          2017
                                                                                             change (%)
Operating revenue (RMB)                     3,930,629,985.81          3,683,004,543.50                   6.72%    3,583,157,646.37
Net profit attributable to the listed
                                               35,704,671.22             -2,814,965.92                               18,637,865.97
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before                 25,885,573.07            -36,089,244.17                               12,337,519.04
exceptional gains and losses (RMB)
Net cash generated from/used in
                                               91,344,251.74           393,465,394.72                  -76.78%      -21,910,921.08
operating activities (RMB)
Basic   earnings       per     share
                                                         0.07                    -0.01                                           0.04
(RMB/share)
Diluted  earnings       per    share
                                                         0.07                    -0.01                                           0.04
(RMB/share)
Weighted average return on equity                                                        Down by 1.94 percen
                                                       1.80%                   -0.14%                                        0.94%
(%)                                                                                               tage points
                                                                                             Change of 31
                                        31 December 2019        31 December 2018          December 2019 over 31 December 2017
                                                                                         31 December 2018 (%)
Total assets (RMB)                          5,591,643,310.38          5,794,694,744.15                  -3.50%    5,426,368,352.69
Equity attributable to the listed
                                            2,006,651,491.51          1,970,946,820.29                   1.81%    1,982,859,436.21
company’s shareholders (RMB)


(2) Key Financial Information by Quarter

                                                                                                                           Unit: RMB
                                                Q1                       Q2                       Q3                  Q4
Operating revenue                            836,194,775.89           896,931,461.79        1,019,323,202.87      1,178,180,545.26
Net profit attributable to the listed
                                                 -686,073.74            11,175,339.54            10,605,016.06       14,610,389.36
company’s shareholders
Net profit attributable to the listed
company’s shareholders before                 -1,328,036.88            10,141,608.23             8,153,098.75         8,918,902.9
exceptional gains and losses
Net cash generated from/used in
                                             204,685,226.03           -553,846,025.82           424,821,860.58       15,683,190.95
operating activities

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what

have been disclosed in the Company’s quarterly or interim reports.

□ Yes √ No




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Foshan Huaxin Packaging Co., Ltd.                                                            Annual Report 2019 (Summary)



4. Share Capital and Shareholder Information at the Period-End


(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders

                                                                                                                       Unit: share
                                                                  Number
                                                                  of
                                                                  preferred               Number of preferred
Number of                 Number of ordinary                      sharehold               shareholders     with
ordinary                  shareholders at the                     ers with                resumed        voting
shareholder        12,799 month-end prior to the            12714 resumed               0 rights     at      the                  0
s at the                  disclosure of this                      voting                  month-end prior to
period-end                Report                                  rights at               the disclosure of this
                                                                  the                     Report
                                                                  period-en
                                                                  d
                                                       Top 10 shareholders
                                                   Total shares                                      Shares in pledge or frozen
     Name of          Nature of Shareholding
                                                    held at the        Private shares held
    shareholder      shareholder percentage                                                             Status        Shares
                                                   period-end
FOSHAN HUAXIN State-owne
DEVELOPMENT d        legal              65.20% 329,512,030                            329,512,030
CO., LTD.     person
GUOTAI JUNAN
               Foreign
SECURITIES(HON                           0.63%       3,204,010                                   0
               legal person
GKONG) LIMITED
                    Foreign
WU HAOYUAN          natural              0.62%       3,127,291                                   0
                    person
                    Domestic
ZHAI YUZHEN         natural              0.41%       2,054,200                                   0
                    person
                    Domestic
CAI YUJIU           natural              0.39%       1,969,600                                   0
                    person
                    Domestic
MIU JUN             natural              0.31%       1,552,400                                   0
                    person
                    Foreign
NORGES BANK                              0.27%       1,352,720                                   0
                    legal person
                    Domestic
CAO YIFAN           natural              0.24%       1,210,000                                   0
                    person
ESSENCE
INTERNATIONAL
              Foreign
SECURITIES                               0.24%       1,205,252                                   0
              legal person
(HONG KONG)
CO., LTD.
FOSHAN CHAN
                    State-owne
BEN DE ASSET
                    d      legal         0.23%       1,139,420                          1,139,420
MANAGEMENT
                    person
CO., LTD
Related or acting-in-concert
                               It is unknown whether there is among the above shareholders any related or acting-in-concert
parties among the shareholders
                               party as defined in the Administrative Measures for the Acquisition of Listed Companies
above




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Foshan Huaxin Packaging Co., Ltd.                                                          Annual Report 2019 (Summary)



Shareholders       involved      in
                                    None
securities margin trading (if any)


(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them


□ Applicable √ Not applicable

No preferred shareholders in the Reporting Period.


(3) Ownership and Control Relations between the Actual Controller and the Company




5. Corporate Bonds


Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of this

Report’s approval or were due but could not be redeemed in full?

No.


Part III Operating Performance Discussion and Analysis

1. Business Overview of the Reporting Period


(I) Market environment of the industry
In 2019, China’s macro economic growth slowed down, the trade dispute between China and the USA
deteriorated, and the environmental protection policy became stricter. Being in a critical period of shifting the way
of development, refining the economic structure and shifting growth drivers, China was under greater downward


                                                                                                                              6
Foshan Huaxin Packaging Co., Ltd.                                                  Annual Report 2019 (Summary)



pressure in its economy due to the structural, system and economy cycle factors at this period. During the year, the
papermaking industry where the Company competes saw faster integration, fluctuating prices of wood pulp—the
primary raw material, and stability and improvement in the operating environment and earnings. The
centralization degree of the packaging industry is relatively low, the market competition is relatively fierce, and
the overall development walks towards greener and smarter products. The increasing environmental protection
awareness promotes demand for green packaging solutions.
(II) Operating results during the Reporting Period
In 2019, under the correct leadership of its superior, the Company stuck to the leadership of the Party,
implemented education work with the theme as “remain true to original aspiration and remember the mission
firmly” in depth, and pursued high quality development through high quality Party guidance work. It followed the
principles of “Reduce Inventories, Receivables and Expenditure, Improve Efficiency and Control Costs” in
operation, expanded overseas market, improved internal governance level, deepened organization and institution
reform, increased input for R&D and innovation, and strengthened risk management, with internal management
quality and each business module improved obviously.
Profitability continued to improve in the Company’s businesses of ivory board, color printing and papermaking
chemicals. In terms of its papermaking business, operating efficiency improved and cost control measures proved
effective. 521.4 thousand tons of paper products were sold during 2019, up 7.8% year-on-year, with finished
products in stock down by over 10%, which represented a considerable decrease in loss. The color printing
division saw a year-on-year increase in operating revenue and an over-70% year-on-year growth in profit during
2019 due to efforts in market expansion, internal management improvement and product mix adjustment. As for
the chemicals division, the sales volume of latex went up 7.4% during the year when compared to last year against
the unfavorable external environment, thanks to continued innovation in R&D and refinement of the production
process. This division maintained steady earnings and is expected to enjoy plenty of potential for growth.
For the Reporting Period, the Company recorded operating revenue of RMB3,930.63 million, a gross profit of
RMB32.1518 million, and a net profit attributable to the listed company’s shareholders of RMB35.7047 million.
As at the end of the Reporting Period, the total assets of the Company amounted to RMB5,591.6433 million, with
a debt/asset ratio of 36.78%.
(III) Operation measures during the Reporting Period
1. Sticking to the leadership of the Communist Party of China (the “Party”) and integrating such guidance in the
Company’s operations
In 2019, according to the requirements of its superior, the Company strengthened the leadership of Party guidance,
implemented education work with the theme as “remain true to original aspiration and remember the mission
firmly” in depth. The Party members and cadres constantly strengthened their mission and responsibilities, united
and led employees and common people to break through hardships. The Company stuck to the guidance of Xi
Jinping's socialist ideology with China's characteristics in the new era, thoroughly implemented the overall
requirements of Party guidance of state owned enterprise in the new era, and promoted the activities of Party



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Foshan Huaxin Packaging Co., Ltd.                                                  Annual Report 2019 (Summary)



guidance work entering enterprise, workshop and group. The Company integrated Party guidance work into
production operation, imbedded it into management, and completed internal management structure of the
Company according to the principle of “big integration, middle imbedding, and small guiding”. Party
organizations of different levels and wide Party members led to break through difficulties, and promoted the
launch of new products, such as plastic-free food board, tobacco fiber board, black paperboard for cigarette
packaging, etc., with output of color presswork reaching another new high and latex for papermaking growing
into an influential domestic brand. The leadership of Party was enhanced constantly, the quality of Party guidance
was improved constantly, the construction of a clean and honest Party was improved constantly, Party guidance
and operation integrated in depth, promoted effectively and developed together.
2. Enhance technology innovation, and deepen organization and institution reform
In 2019, the Company took technology innovation and mechanism reform as the main tone, coordinated resources,
and improved operation efficiency.
Through constantly adjusting and integrating the R&D-related functions, reforming systems and mechanisms, as
well as following the market-oriented principle in R&D, Hongta Renheng established the New Material
Development and Industrial Technology Research Institute, and established a professional R&D team led by
doctoral holders in relevant fields and comprising seasoned technical staff, which means it is capable of
independent product development. It integrated paper making, chemicals and printing packaging technologies,
expanded and deepened research of “new materials +” of emerging industry, and undertook the R&D of new
products, production processes, technologies and raw and auxiliary materials for the Company. Meanwhile, it also
undertook product development and technical service for external enterprises in the papermaking and chemical
industry, as well as science and technology research programs relating to strategic emerging industries and new
materials initiated by the national, provincial and municipal governments. Besides, it formulated elastic and
marketized new incentive mechanism, stimulated new motivation of technology innovation of technological staff,
thoroughly exerted and mobilized the innovation and positiveness of technological staff.
Huaxin Color Printing continued to strengthen its R&D input, catered to variable data printing needs, and
provided customized packaging printing solutions for customers from the material end. Meanwhile, it refined the
organization of the technology, marketing and production departments, and properly implemented a job rotation
system, which spurred vitality.
3. Reform marketing system, and optimize and coordinate internal system
The marketing department took market as orientation, optimized “value marketing” system. It took sales amount
increase as the main assessment indicator, specified performance assessment at quantitative sales end and
formulated a competitive remuneration incentive mechanism. Combining with product characteristics and status
quo of the market, it constantly optimized marketing structure, realized the optimal configuration and utilization
of marketing resources, jointly optimized each supply chain link. The production and manufacturing department
implemented an appraisal system of “efficiency + profit”, reduced employees and increased efficiency, improved
per capita income, and established a fair promotion system so as to improve the overall business skills.



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Foshan Huaxin Packaging Co., Ltd.                                                          Annual Report 2019 (Summary)



4. Constantly complete institution reform, and reconstruct remuneration system
The Company established position performance remuneration system oriented by performance. Meanwhile, it
expanded the path of vocational technology channels, further stimulated and stabilized staff team, improved talent
introduction and cultivation plans to serve for the future strategic development of the Company. It reformed the
existing remuneration system based on the incentive distribution principle of “focusing on performance, punishing
the lazy and rewarding the diligent, encouraging creation, and increasing profit”. It establishes vocational
promotion channel of five sequences, conducts comprehensive review for technological, technical and
technological talents of different level according to ratio, meets the development needs of the Company and
individual, improves core competitiveness of the Company and individual, guides employee to focus on individual
technique increase and ability improvement. In the meantime, it strengthens recruitment of mature talent from the
labor market as a way to bring fresh impetus to the development of the Company.


2. Significant Change to Principal Activities in the Reporting Period

□ Yes   √ No


3. Product Category Contributing over 10% of Principal Business Revenue or Profit

√ Applicable    □ Not applicable
                                                                                                                  Unit: RMB
                                                                          YoY change in    YoY change in    YoY change in
                         Operating                         Gross profit
 Product category                       Operating profit                 operating revenue operating profit  gross profit
                          revenue                            margin
                                                                                (%)              (%)         margin (%)
Ivory board          3,265,693,118.99    235,684,000.23            7.22%           10.77%           57.54%           2.14%
Presswork              302,420,890.22     75,252,255.78          24.88%            0.72%           12.84%            2.67%
Latex                  316,634,636.91     74,057,245.16          23.39%           -7.01%           -9.78%           -0.72%


4. Business Seasonality to which Special Attention should Be Paid

□ Yes   √ No


5. Significant YoY Changes in Operating Revenue, Cost of Sales and Net Profit Attributable to the Listed
Company’s Ordinary Shareholders or Their Compositions

□ Applicable    √ Not applicable


6. Possibility of Listing Suspension or Termination

□ Applicable    √ Not applicable




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Foshan Huaxin Packaging Co., Ltd.                                                   Annual Report 2019 (Summary)



7. Matters Related to Financial Reporting


(1) YoY Changes to Accounting Policies, Accounting Estimates or Measurement Methods

√ Applicable   □ Not applicable

1. Changes to accounting policies due to changes of Accounting Standards for Business Enterprises
(1) The Company prepared 2019 Financial Statements in accordance with the Notice on Revising and Printing the
Format of 2019 General Enterprises Financial Statement (CK [2019] No. 6), the Notice on Revising and Printing the
Format of Consolidated Financial Statements (2019) (CK [2019] No. 16) issued by the Ministry of Finance and the
requirements of the Accounting Standards for Business Enterprises. Retroactive adjustment was adopted for the
changes in the accounting policy. The significantly affected items and amounts in 2018 Financial Statements are as
follows:
                                                                                           Unit: RMB
       Item and amount in original financial statement              Item and amount in new financial statement
Notes receivable and accounts                 1,058,839,572.02 Notes receivable                      277,623,928.13
receivable                                                       Accounts receivable                 781,215,643.89
Notes payable and accounts                      775,243,787.56 Notes payable                         310,600,000.00
payable                                                          Accounts payable                    464,643,787.56
(2) The Company starts to implement the Accounting Standards for Business Enterprises No.22-Recognition and
Measurement of Financial Instruments, Accounting Standards for Business Enterprises No. 23-Transfer of
Financial Assets, Accounting Standards for Business Enterprises No. 24-Hedging and Accounting Standards for
Business Enterprises No.37-Presentation of Financial Instruments (hereinafter referred to as the new standards
governing financial instruments) revised by the Ministry of Finance. As required by the connection regulation for
the old and new standards, the information of comparative period was not adjusted, and the beginning retained
earnings or other comprehensive income of the Reporting Period shall be retroactively adjusted for the difference
between the original standards and the new one when implemented on the first execution date.
The new standards governing financial instruments change the classification and measurement method for
financial assets and confirm three major measurement categories: amortized cost, measured at fair value through
other comprehensive income, measured at fair value through profit or loss. The Company conducts the above
classification after considering its business model and characteristics of contractual cash flow for financial assets.
In addition, equity investments shall be measured at fair value through profit or loss, and it can be measured at fair
value through other comprehensive income (the disposal profits or losses can not be reversed into the profit or loss
but the dividends income shall be recorded into the current profit or loss) when initially recognized which is
irrevocable once chosen.
The new standards governing financial instruments require that the measurement of financial assets impairment
shall be changed into the expected credit loss model from the incurred loss model which applies to financial assets
measured at amortized cost, financial assets at fair value through other comprehensive income and leasing
receivables.
1) The main influence on the Company’s financial statements on 1 January 2019 by the implementation of new
standards governing financial instruments is as follows:
                                                                                              Unit: RMB
   Item                                                            Balance sheet
                                    31 December 2018                Influence                  1 January 2019
Available-for-sale financial                   288,700.00                  -288,700.00
assets
Other non-current financial                                                 288,700.00                    288,700.00
assets
Notes receivable                          277,623,928.13               -271,186,964.94                  6,436,963.19
Accounts receivable                                                     271,186,964.94               271,186,964.94
financing



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Foshan Huaxin Packaging Co., Ltd.                                                     Annual Report 2019 (Summary)



Other receivables                               26,332,955.74               -7,800,232.76               18,532,722.98
Other current assets                           338,311,849.45               7,800,232.76               346,112,082.21
Short-term borrowings                          862,776,823.86               1,841,377.53               864,618,201.39
Other payables                                 179,737,877.39               -2,296,308.09              177,441,569.30
Current portion of                             200,000,000.00                 454,930.56               200,454,930.56
non-current liabilities

2) The comparison result of financial assets and financial liabilities of the Company respectively classified and
measured according to the new standards governing financial instruments and the original one on 1 January
2019,is as follows:
                                                                                          Unit: RMB
         Item             Original standards governing financial            New standards governing financial
                                       instruments                                   instruments
                                Item              Carrying value               Item             Carrying value
Monetary assets           Loans and accounts             133,983,939.73 Financial assets               133,983,939.73
                          receivable                                    measured at amortized
                                                                        cost
Notes receivable          Loans and accounts               6,436,963.19 Financial assets                 6,436,963.19
                          receivable                                    measured at amortized
                                                                        cost
Notes receivable          Loans and accounts             271,186,964.94 Financial assets at fair       271,186,964.94
                          receivable                                    value through other
                                                                        comprehensive income
                                                                        (note: accounts
                                                                        receivable financing)
Accounts receivable       Loans and accounts             781,215,643.89 Financial assets               781,215,643.89
                          receivable                                    measured at amortized
                                                                        cost
Other receivables         Loans and accounts              18,532,722.98 Financial assets                18,532,722.98
                          receivable                                    measured at amortized
                                                                        cost
Other receivables         Loans and accounts               7,800,232.76 Financial assets at              7,800,232.76
                          receivable                                    amortized cost (note:
                                                                        other current
                                                                        assets-interest
                                                                        receivable)
Other current             Available-for-sale             317,200,000.00 Measured at fair value         317,200,000.00
assets-structured         financial assets                              through profit or loss
deposits
Available-for-sale        Available-for-sale                 288,700.00 Measured at fair value             288,700.00
financial assets          financial assets                              through profit or loss
                                                                        (note: other
                                                                        non-current financial
                                                                        assets)
Notes payable             Other financial                310,600,000.00 Financial liabilities          310,600,000.00
                          liabilities                                   measured at amortized
                                                                        cost
Accounts payable          Other financial                464,643,787.56 Financial liabilities          464,643,787.56
                          liabilities                                   measured at amortized
                                                                        cost
Other payables            Other financial                177,441,569.30 Financial liabilities          177,441,569.30
                          liabilities                                   measured at amortized
                                                                        cost


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Foshan Huaxin Packaging Co., Ltd.                                                 Annual Report 2019 (Summary)



                                                                      Financial liabilities
                        Other financial           1,841,377.53       measured at amortized       1,841,377.53
Other payables
                        liabilities                                  cost (note: short-term
                                                                          borrowings)
                                                                      Financial liabilities
                                                                     measured at amortized
                        Other financial            454,930.56                                     454,930.56
Other payables                                                         cost (note: current
                        liabilities
                                                                     portion of non-current
                                                                           liabilities)
                                                                      Financial liabilities
                        Other financial          862,776,823.86                                862,776,823.86
Short-term borrowings                                                measured at amortized
                        liabilities
                                                                              cost
                                                                      Financial liabilities
Current portion of      Other financial          200,000,000.00                                200,000,000.00
                                                                     measured at amortized
non-current liabilities liabilities
                                                                              cost
                                                                      Financial liabilities
                        Other financial          100,000,000.00                                100,000,000.00
Long-term borrowings                                                 measured at amortized
                        liabilities
                                                                              cost

3) The reconciliation statement of the Company’s original financial assets and liabilities in carrying value after
reclassified and remeasured as new financial assets and liabilities according to new standards governing financial
instruments on 1 January 2019, is as follows:
                                                                                        Unit: RMB
            Item             Carrying value         Reclassified        Remeasure Carrying value presented
                         presented according                               d        according to new financial
                          to original financial                                        instruments standards
                        instruments standards                                            (1 January 2019)
                         (31 December 2018)
  A. Financial assets
  a. Amortized cost
  Monetary assets             133,983,939.73                                              133,983,939.73
 Notes receivable
 Balance          listed
 according to the
 original accounting         277,623,928.13
 standards governing
 financial instruments
 Less: transferred to
 those at fair value
 through          other
 comprehensive                                  -271,186,964.94
 income            (new
 accounting standards
 governing financial
 instruments)
 Balance          listed
 according to the new
 accounting standards                                                                      6,436,963.19
 governing financial
 instruments
 Accounts receivable
 Balance       listed
 according to the            781,215,643.89                                               781,215,643.89
 original accounting


                                                                                                                 12
Foshan Huaxin Packaging Co., Ltd.                                Annual Report 2019 (Summary)



 standards governing
 financial instruments
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
 Other receivables
 Balance          listed
 according to the
 original accounting
 standards governing
 financial instruments       26,332,955.74      -7,800,232.76            18,532,722.98
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
 Other           current
 assets-interest
 receivable
 Balance          listed
 according to the
 original accounting
 standards governing
 financial instruments                          7,800,232.76              7,800,232.76
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
 Total financial assets
                            1,219,156,467.49   -277,623,928.13          947,969,502.55
 at amortized cost
 b. At fair value through profit or loss
 Other           current
 assets-structural
 deposits
 Balance           listed
 according to the
 original accounting
 standards governing
 financial instruments       317,200,000.00                             317,200,000.00
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
 Available-for-sale
 financial assets
 Balance           listed
 according to the
 original accounting           288,700.00
 standards governing
 financial instruments



                                                                                                13
Foshan Huaxin Packaging Co., Ltd.                               Annual Report 2019 (Summary)



 Less: transferred to
 those at fair value
 through           other
 comprehensive                                    -288,700.00
 income             (new
 accounting standards
 governing financial
 instruments)
 Balance           listed
 according to the new
 accounting standards
 governing financial
 instruments
 Other      non-current
 financial assets
 Balance           listed
 according to the
 original accounting
 standards governing
 financial instruments
 Add:        transferred
 from
 available-for-sale
 financial        assets                           288,700.00
 (original accounting
 standards governing
 financial
 instruments)
 Balance           listed
 according to the new
 accounting standards                                                     288,700.00
 governing financial
 instruments
 Total financial assets
 at fair value through 317,488,700.00                                  317,488,700.00
 profit or loss
 c. At fair value through other comprehensive income
 Accounts receivable
                                               271,186,964.94          271,186,964.94
 financing
 Total financial assets
 at fair value through
                                               271,186,964.94          271,186,964.94
 other comprehensive
 income
 B. Financial liabilities
 a. Amortized cost

 Notes payable
 Balance       listed
 according to the            310,600,000.00                            310,600,000.00
 original accounting
 standards governing



                                                                                               14
Foshan Huaxin Packaging Co., Ltd.                             Annual Report 2019 (Summary)



 financial instruments
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
 Accounts payables
 Balance         listed
 according to the
 original accounting
 standards governing
 financial instruments       464,643,787.56                          464,643,787.56
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
 Other payables
 Balance         listed
 according to the
 original accounting
 standards governing
 financial instruments       179,737,877.39   -2,296,308.09          177,441,569.30
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
 Short-term
 borrowings
 Balance         listed
 according to the
 original accounting
 standards governing
 financial instruments       862,776,823.86   1,841,377.53           864,618,201.39
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
 Current portion of
 non-current liabilities
 Balance         listed
 according to the
 original accounting
 standards governing
 financial instruments       200,000,000.00    454,930.56            200,454,930.56
 and balance listed
 according to the new
 accounting standards
 governing financial
 instruments
       Long-term
       borrowings



                                                                                             15
Foshan Huaxin Packaging Co., Ltd.                                                        Annual Report 2019 (Summary)



  Balance          listed
  according to the
  original accounting
  standards governing
  financial instruments 100,000,000.00                                                    100,000,000.00
  and balance listed
  according to the new
  accounting standards
  governing financial
  instruments
  Total        financial
  liabilities          at 2,117,758,488.81                                              2,117,758,488.81
  amortized cost
4) The reconciliation statement of adjusting the Company’s original ending balance of allowance for impairments
of financial assets into new allowance for impairments classified and measured as required by new standards
governing financial instruments is as follows:
                                                                                        Unit: RMB
   Item                  Allowance for impairments     Reclassified       Remeasured           Allowance for
                       according to original standards                                    impairments withdrawn
                              governing financial                                             according to new
                            instruments/provisions                                          standards governing
                           recognized according to                                         financial instruments
                        standards for contingency (31                                         (1 January 2019)
                               December 2018)
Accounts receivable                      46,825,123.33                                               46,825,123.33
Other receivables                        26,857,989.24                                               26,857,989.24
The Company starts to implement the revised Accounting Standards for Business Enterprises No.7-Exchange of
Non-monetary assets since 10 June 2019 and starts to the revised Accounting Standards for Business Enterprises
No. 12-Debt Restructuring since 17 June 2019. This change of accounting policy is treated with prospective
application method.

(2) Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period


□ Applicable    √ Not applicable

No such cases.


(3) YoY Changes to the Scope of Consolidated Financial Statements

√ Applicable    □ Not applicable
Zhejiang Hongta Renheng Packaging Technology Co., Ltd. has been liquidated and de-registered during the Reporting Period, and
has thus no longer been included in the consolidated financial statements.




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