Konka Group Co., Ltd. Interim Report 2018 (Summary)
Stock Code: 000016, 200016 Stock Name: Konka Group, Konka Group-B Announcement No. 2018-66
KONKA GROUP CO., LTD.
INTERIM REPORT 2018 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the 2018 Interim Report of Konka Group 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 condition 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:
Name Office title Objection and explanation of why
Statement of objection:
Except for the following directors, all the other directors attended in person the Board meeting for the
review of this Report and its summary.
Reason for not attending Proxy entrusted to attend the
Name Office title
meeting in person meeting
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable √ Not applicable
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.
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Konka Group Co., Ltd. Interim Report 2018 (Summary)
Part II Key Corporate Information
1. Stock Profile
Stock name Konka Group-A, Konka Group-B Stock code 000016, 200016
Stock exchange for stock
Shenzhen Stock Exchange
listing
Contact information Board Secretary Securities Representative
Name Wu Yongjun Miao Leiqiang
Board Secretariat, 24/F, Konka R&D Centre, 28 Board Secretariat, 24/F, Konka R&D Centre, 28
Keji South Twelfth Road, Science and Keji South Twelfth Road, Science and
Office address
Technology Park, Yuehai Street, Nanshan Technology Park, Yuehai Street, Nanshan
District, Shenzhen, Guangdong Province, China District, Shenzhen, Guangdong Province, China
Tel. 0755-26609138 0755-26609138
E-mail address szkonka@konka.com szkonka@konka.com
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
H1 2018 H1 2017 Change (%)
Operating revenue (RMB) 17,625,414,769.82 11,405,965,979.43 54.53%
Net profit attributable to the listed
341,793,039.03 30,871,267.86 1007.16%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before -300,870,612.80 -44,456,212.17 -576.78%
exceptional items (RMB)
Net cash generated from/used in
-1,838,158,705.86 -2,264,014,704.88 18.81%
operating activities (RMB)
Basic earnings per share (RMB/share) 0.1419 0.0128 1008.59%
Diluted earnings per share (RMB/share) 0.1419 0.0128 1008.59%
Weighted average return on equity (%) 4.19% 1.06% 3.13%
30 June 2018 31 December 2017 Change (%)
Total assets (RMB) 28,134,003,876.94 23,558,735,469.78 19.42%
Equity attributable to the listed
7,940,999,540.26 7,994,145,476.61 -0.66%
company’s shareholders (RMB)
3. Shareholders and Their Holdings on 30 June 2018
Unit: share
Number of preferred shareholders with resumed
Number of ordinary shareholders 87,774 0
voting rights (if any)
Top 10 shareholders
Shareholdi Shares in pledge or
Nature of Number of Restricted frozen
Name of shareholder ng
shareholder shares shares
percentage Status Shares
OVERSEAS CHINESE TOWN State-owned
21.75% 523,746,932 0
ENTERPRISES CO., LTD legal person
CITIC SECURITIES Foreign legal
7.56% 182,100,202 0
BROKERAGE (HONG KONG) person
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Konka Group Co., Ltd. Interim Report 2018 (Summary)
CO., LTD.
Foreign legal
HOLY TIME GROUP LIMITED 2.33% 56,039,500 0
person
GUOYUAN SECURITIES Foreign legal
2.25% 54,203,779 0
BROKER (HK) CO., LTD. person
Foreign legal
GAOLING FUND,L.P. 2.19% 52,801,250 0
person
Domestic
WANG LEI 1.52% 36,715,300 0
natural person
CHINA MERCHANTS State-owned
0.94% 22,665,024 0
SECURITIES (HK) LIMITED legal person
Domestic
NAM NGAI 0.90% 21,712,140 0
natural person
YUNNAN INTERNATIONAL
TRUST CO., LTD-JULI NO. 48 Other 0.88% 21,145,380 0
SINGLE CAPITAL TRUST
Domestic
ZHANG XIAOYU 0.85% 20,476,618 0
natural person
Jialong Investment Limited, a wholly-funded subsidiary of the Company’s first majority
shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” for short), holds
180,001,110 and 18,360,000 ordinary shares in the Company respectively through CITIC
Related or acting-in-concert
Securities Brokerage (Hong Kong) Co., Ltd. and China Merchants Securities (HK) Limited.
parties among shareholders above
Jialong Investment Limited and Overseas Chinese Town Enterprises Co. are parties acting in
concert. Other than that, it is unknown whether the other shareholders are related parties or
acting-in-concert parties or not.
Wang Lei holds 36,715,300 A-shares in the Company through his account of collateral
Shareholders conducting margin securities for margin trading in GF Securities Co., Ltd. Zhang Xiaoyu holds 20,476,618
trading A-shares in the Company through her account of collateral securities for margin trading in
Huaxi Securities Co., Ltd.
4. Change of Controlling Shareholder or Actual Controller in Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The actual controller remained the same in the Reporting Period.
5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
6. Corporate bonds
Does the Company have any corporate bonds publicly offered 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.
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Konka Group Co., Ltd. Interim Report 2018 (Summary)
Part III Operating Performance Discussion and Analysis
(I) Business Overview of Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
1. In the Reporting Period, in order for faster transformation and upgrade and leapfrog growth, the
Company has formulated a strategic plan for its medium- and long-term development, that is, “One
Centric Orientation, Two Development Paths, Three Development Strategies and Four Business
Divisions”. With the centric orientation to become a platform driven by technological innovation, as
well as with industrial products as the basis supported by the composite capabilities of “Technology +
Holding”, the Company will upgrade towards strategic emerging industries, expand its technology
park business, and extend its Internet and supply chain service business, so as to formulate four major
collaborating business divisions—the technology park division, the industrial product division, the
platform service division and the investment & finance division.
Focused on its strategic plan, the Company made the following achievements in the Reporting
Period:
(1)The mixed ownership reform was carried forward for stronger competitiveness in the multimedia
business. Shenzhen Konka Electronics Technology Co., Ltd. has been set up in the Reporting Period
to run the Company’s colour TV and other multimedia businesses, which will accelerate the
Company’s platform transformation, and enable a mixed ownership reform on the said business at a
proper timing for better competitiveness.
Anhui Kaikai Shijie E-commerce Co., Ltd. (“Kaikai Shijie”), one of the Company’s majority-owned
subsidiary, is responsible for operations under the Company’s online colour TV brand—KKTV. In
order to make up its lack of digital contents and shift from a hardware provider to an Internet
company featuring “digital contents + hardware + operation”, Kaikai Shijie has introduced
Guangdong South Aishi Entertainment Technology Co., Ltd. (“South Aishi”) as a 10% shareholder.
South Aishi is a professional Internet company offering Internet TV entertainment services, with
fully-licensed joint operation rights, rich digital contents and years of OTT experience..
(2) The technology park, environmental protection and other businesses have gradually taken shape.
In terms of the technology park business, in addition to carrying forward the existing projects
including Phase I of the Konka Chuzhou Technological Innovation Centre and the Yibin Konka
Smart Terminals Industrial Park, the Company has also newly launched the Konka Belt and Road
Headquarters, Phase II of the Konka Chuzhou Technological Innovation Centre, the Zibo High-End
Equipment Industrial Park, the Nanjing K-Star Cloud Network Headquarters, etc. Meanwhile, talks
are underway for the Konka Smart Appliances and Equipment Industrial Park, the Ankang Smart
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Konka Group Co., Ltd. Interim Report 2018 (Summary)
Plant, Minghu K-Care Town and so on.
In the environmental protection business, the Company acquired a 51% interest in Shandong Econ
Technology Co., Ltd. (“Econ Technology”), which specializes in water treatment. Recently, one of
Econ Technology’s affiliates has won the bids for the RMB1.299 billion urban river comprehensive
treatment PPP project for the Donggang city, as well as for the RMB2.849 billion city centre
comprehensive improvement project for the Weifang Binhai Economic and Technological
Development Zone.
Additionally, the Company has recently acquired a 51% stake in Jiujiang Golden Phoenix Decoration
Material Co., Ltd. (“Golden Phoenix”), which produces glass ceramic materials, a new green material.
This acquisition has great significance for the Company’s plan in the new material sector.
(3)During the Reporting Period, Anhui Konka Electrical Appliance Technology Co., Ltd., a 51%
indirectly controlled subsidiary of the Company, won the bid of RMB455 million for the 100%
interests of Henan Frestec Electrical Appliances Co., Ltd., Henan Frestec Refrigeration Appliance
Co., Ltd. and Henan Frestec Household Appliances Co., Ltd.（The above three companies are
collectively referred to as “Frestec Company”, the asset pool of which mainly includes Frestec
brand, patents and related fixed assets). So far Frestec Company has completed the industrial and
commercial registration of changes and gradually resumes production.This acquisition can help the
Company quickly expand its white goods business under the two collaborating brands of “Konka”
and “Frestec” for better profitability.
(4) During the Reporting Period, four business sub-divisions based on the Internet ecology had taken
shape in the Company’s Internet operation business, including the cross-device user operation
sub-division based on Konka’s smart terminal user operation platform, the IoT (Internet of Things)
operation sub-division based on Konka’s smart terminal hardware, as well as the other two
sub-divisions in planning—the comprehensive healthcare business based on Konka’s comprehensive
healthcare user operation platform and the smart town business based on Konka’s smart town
operation platform, so as to build a complete household smart healthcare ecosystem. The Internet
operation business was running well in the Reporting Period, with a new high in income.
2. Due to the rapid growth in the new businesses, the Company is expected to achieve operating
revenue of approximately RMB17.625 billion for H1 2018, up around 54.53% compared to H1 2017..
3. Exceptional income was RMB643 million for the Reporting Period, which primarily came from
the sale of certain interests in Kaikai Shijie for the mixed ownership reform.
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Konka Group Co., Ltd. Interim Report 2018 (Summary)
(II) Matters Related to Financial Reporting
1. Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared
to Last Accounting Period
□ Applicable √ Not applicable
No such changes.
2. Retrospective Restatements due to Correction of Material Accounting Errors in Reporting
Period
□ Applicable √ Not applicable
No such cases.
3. Changes to Scope of Consolidated Financial Statements Compared to Last Accounting
Period
√ Applicable □ Not applicable
(1) Kangjietong (Hong Kong) Limited was incorporated by Konka Electrical Appliances Investment
& Development Co., Ltd. (a subsidiary of the Company) and Aujet Industry Limited in Hong Kong
on 9 January 2018 with a registered capital of HKD1 million, of which Konka Electrical Appliances
Investment & Development Co., Ltd. contributed HKD0.51 million (or 51%) and Aujet Industry
Limited contributed HKD0.49 million (or 49%). Therefore, the Company has the control over
Kangjietong (Hong Kong) Limited and it has been included into the Company’s consolidation scope
since 9 January 2018.
(2) Sichuan Konka Smart Terminal Technology Co., Ltd. was incorporated by Shenzhen Konka
Mobile Interconnection Technology Co., Ltd. (a subsidiary of the Company) on 15 January 2018 with
a registered capital of RMB100 million, of which Shenzhen Konka Mobile Interconnection
Technology Co., Ltd. contributed RMB100 million (or 100%). Therefore, the Company has the
control over Sichuan Konka Smart Terminal Technology Co., Ltd. and it has been included into the
Company’s consolidation scope since 15 January 2018.
(3) Yibin Konka Technology Park Operation Co., Ltd. was incorporated by Shenzhen Konka
Investment Holding Co., Ltd. . (a subsidiary of the Company) on 15 January 2018 with a registered
capital of RMB100 million, of which Shenzhen Konka Investment Holding Co., Ltd. . contributed
RMB100 million (or 100%). Therefore, the Company has the control over Yibin Konka Technology
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Konka Group Co., Ltd. Interim Report 2018 (Summary)
Park Operation Co., Ltd. and it has been included into the Company’s consolidation scope since 15
January 2018.
(4) Shenzhen Konka Electronics Technology Co., Ltd. was incorporated by the Company on 16
January 2018 with a registered capital of RMB1 billion, of which the Company contributed RMB1
billion (or 100%). Therefore, the Company has the control over Shenzhen Konka Electronics
Technology Co., Ltd. and it has been included into the Company’s consolidation scope since 16
January 2018.
(5) Jiaxin Technology Co., Ltd. was incorporated by Shenzhen Konka Pengrun Technology &
Industry Co., Ltd. (a subsidiary of the Company) in Hong Kong on 25 January 2018 with a registered
capital of HKD10 million, of which Shenzhen Konka Pengrun Technology & Industry Co., Ltd.
contributed HKD10 million (or 100%). Therefore, the Company has the control over Jiaxin
Technology Co., Ltd. and it has been included into the Company’s consolidation scope since 25
January 2018.
(6) Jiali International (Hong Kong) Limited was incorporated by Shenzhen Konka Unifortune Supply
Chain Management Co., Ltd. (a subsidiary of the Company) in Hong Kong on 2 February 2018 with
a registered capital of HKD5 million, of which Shenzhen Konka Unifortune Supply Chain
Management Co., Ltd. contributed HKD5 million (or 100%). Therefore, the Company has the control
over Jiali International (Hong Kong) Limited and it has been included into the Company’s
consolidation scope since 2 February 2018.
(7) Chengdu Konka Incubator Management Co., Ltd. was incorporated by Konka Ventures
Development (Shenzhen) Co., Ltd. (a subsidiary of the Company) on 5 February 2018 with a
registered capital of RMB5 million, of which Konka Ventures Development (Shenzhen) Co., Ltd.
contributed RMB5 million (or 100%). Therefore, the Company has the control over Chengdu Konka
Incubator Management Co., Ltd. and it has been included into the Company’s consolidation scope
since 5 February 2018.
(8) Sichuan Kangjiatong Supply Chain Management Co., Ltd. was incorporated by the Company,
Shenzhen Trade Link Supply Chain Management Co., Ltd. and Sichuan Yibin Port (Group) Co., Ltd.
on 26 March 2018 with a registered capital of RMB30 million, of which the Company contributed
RMB15.3 million (or 51%) in cash, Shenzhen Trade Link Supply Chain Management Co., Ltd.
contributed RMB13.2 million (or 44%) in cash and Sichuan Yibin Port (Group) Co., Ltd. contributed
RMB1.5 million (or 5%) in cash. Therefore, the Company has the control over Sichuan Kangjiatong
Supply Chain Management Co., Ltd. and it has been included into the Company’s consolidation
scope since 26 March 2018.
(9) Konka Suiyong Investment (Shenzhen) Co., Ltd. was incorporated by Shenzhen Konka
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Konka Group Co., Ltd. Interim Report 2018 (Summary)
Investment Holding Co., Ltd. (a subsidiary of the Company) and Suiyong Rongxin Capital
Management Co., Ltd. on 11 May 2018 with a registered capital of RMB50 million, of which
Shenzhen Konka Investment Holding Co., Ltd. contributed RMB25.5 million (or 51%) in cash and
Suiyong Rongxin Capital Management Co., Ltd. contributed RMB24.5 (or 49%) in cash. Therefore,
the Company has the control over Konka Suiyong Investment (Shenzhen) Co., Ltd. and it has been
included into the Company’s consolidation scope since 11 May 2018.
(10) Konka Huanjia (Dalian) Environmental Technology Co., Ltd. was incorporated by the Company,
Huanjia Group and Zhang Yuyin on 6 June 2018 with a registered capital of RMB180 million, of
which the Company contributed 91.8 million (or 51%) in cash, Huanjia Group contributed RMB70.2
million (or 39%) in cash and Zhang Yuyin contributed RMB18 million (or 10%) in cash. Therefore,
the Company has the control over Konka Huanjia (Dalian) Environmental Technology Co., Ltd. and
it has been included into the Company’s consolidation scope since 6 June 2018.
(11) Anhui Konka Electrical Appliance Technology Co., Ltd. was incorporated by Anhui Konka
Tongchuang Electrical Appliances Co., Ltd. (a subsidiary of the Company) and Chuzhou Hanshang
Electrical Appliance Co., Ltd. on 12 June 2018 with a registered capital of RMB100 million, of which
Anhui Konka Tongchuang Electrical Appliances Co., Ltd. contributed RMB51 million (or 51%) in
cash and Chuzhou Hanshang Electrical Appliance Co., Ltd. contributed RMB49 million (or 49%) in
cash. Therefore, the Company has the control over Anhui Konka Electrical Appliance Technology
Co., Ltd. and it has been included into the Company’s consolidation scope since 12 June 2018.
(12) The Company completed the merger & acquisition of Shandong Econ Technology Co., Ltd. on 4
May 2018 with a registered capital of RMB164 million, of which the Company contributed
RMB688.5 million (or 51%) in cash. Therefore, the Company has the control over Shandong Econ
Technology Co., Ltd. and its following subsidiaries: Beijing Econ Runfeng Technology Co., Ltd.,
Shanghai Jiyi Environmental Technology Co., Ltd., Binzhou Econ Zhongke Environmental
Technology Co., Ltd., Laizhou Lairun Holdings Co., Ltd., Econ Environmental Engineering Co., Ltd.,
Rushan Yike Water Treatment Co., Ltd., Binzhou Weiyijie Environmental Technology Co., Ltd.,
Yantai Chunzhiran Environmental Technology Co., Ltd., Rushan Econ Beike Technology Incubator
Co., Ltd., Fujian Econ Changrun Environmental Protection Co., Ltd., Laizhou Lairun Huayang
Heating Co., Ltd., Laizhou Lairun Heating Co., Ltd., Laizhou Lairun Green Energy Co., Ltd.,
Binzhou Beihai Jingmai Industrial Development Co., Ltd., Yantai Huanhai Xinze Enterprise
Management Co., Ltd., Binzhou Weinengda Transport Co., Ltd., Laizhou Binhai Sewage Treatment
Co., Ltd. and Laizhou Lairun Environmental Protection Co., Ltd. And these acquirees have been
included into the Company’s consolidation scope since 4 May 2018.
(13) Shenzhen Konka Electronics Technology Co., Ltd. (a subsidiary of the Company) has completed
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Konka Group Co., Ltd. Interim Report 2018 (Summary)
the merger & acquisition of GuangDong XingDa HongYe Electronic Co., Ltd. on 29 June 2018 with a
registered capital of RMB88.89 million, of which the Company contributed RMB99.45 million (or
51%) in cash. Therefore, Shenzhen Konka Electronics Technology Co., Ltd. has the control over
GuangDong XingDa HongYe Electronic Co., Ltd. and its following subsidiaries: Shanghai Xinfeng
Zhuoqun PCB Co., Ltd. and Zhongshan Zewei Kechuang Investment Management Co., Ltd. And
these acquirees have been included into the Company’s consolidation scope since 29 June 2018.
(14) On 28 June 2018, the Company transferred its 5% interest in Anhui Kaikai Shijie E-commerce
Co., Ltd. (“Kaikai Shijie”) to Guangdong South Aishi Entertainment Technology Co., Ltd. through
putting up the said interest for sale. After the transaction, the Company’s stake in Kaikai Shijie is 46%,
meaning that the Company’s actual control over Kaikai Shijie has ceased. Therefore, Kaikai Shijie
has been excluded from the Company’s consolidated scope since 28 June 2018.
The Board of Directors
Konka Group Co., Ltd.
30 August 2018
9
