Shenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
1
Shenzhen Zhongheng Huafa Co., Ltd.
The First Quarterly Report 2010
(Full Text)
§1. Important Notes
1.1 Board of Directors and the Supervisory Committee of Shenzhen Zhongheng Huafa Co., Ltd.
(hereinafter referred to as the Company) and its directors, supervisors and senior executives hereby
confirm that there are no any fictitious statements, misleading statements, or important omissions
carried in this report, and shall take all responsibilities, individual and/or joint, for the reality,
accuracy and completion of the whole contents.
1.2 Other directors attended the meeting on examining the Quarterly Report except for the
following directors.
Name of absent
directors Title Reason of absence Name of
entrusted
Chen Zhigang Director Busy in works Li Zhongqiu
Yang Junyuan Independent
Director Busy in works Li Ding’an
1.3 The Financial Report for the First Quarterly Report of the Company has not been audited by
CPAs.
1.4 Principal of the Company Li Zhongqiu, Person in Charge of Financial Works Jiang Yanjun, and
Person in Charge of Accounting Organ (Accounting Supervisor) Sun Wei hereby confirm that the
Financial Report of the First Quarterly Report is true and complete.
§2. Company Profile
2.1 Main accounting highlights and financial indexes
Unit: RMB
At the end of the report
period
At the period-end of the
last year
Changes of
increase/decrease (%)
Total assets (RMB) 726,553,455.30 756,779,839.48 -3.99
Owners’ equity attributable to
shareholders of the listed company
(RMB)
264,061,117.19 251,963,858.81 4.80
Share capital (Share) 283,161,227.00 283,161,227.00 0
Net asset per share attributable to
shareholders of listed company
(RMB/Share)
0.9325 0.8898 4.80
In the report period The same period of last
year
Changes of
increase/decrease (%)
Total operating income (RMB) 137,890,464.87 93,287,223.02 47.81
Net profit attributable to shareholders of
the listed company (RMB) 12,049,390.43 2,102,778.89 473.02
Net cash flow arising from operating
activities (RMB) 25,509,411.98 -6,811,000.93 -
Net cash flow arising from operating 0.09 -0.02 -Shenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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activities per share (RMB/Share)
Basic earnings per share (RMB/Share) 0.0427 0.0074 477.03
Diluted earnings per share (RMB/Share) 0.0427 0.0074 477.03
Weighted average return on equity (%) 4.67 0.84 Up 3.83 percentage points
Weighted average return on equity after
deducting non-recurring gains and losses
(%)
1.97 0.90 Up 1.07 percentage points
Items of non-recurring gains and losses Amount from year-begin
to the end of report period
Other non-operating income and expenditure except for the aforementioned items 60,934.04
Gains/losses from non-monetary assets replacements 6,902,326.45
Total 6,963,260.49
Explanations on items of significant non-recurring gains and losses
Gains/losses from non-monetary assets replacements amounting to RMB 6.9 million was the gains
from the assets replacement events of the Company in 2009.
2.2 Total number of shareholders at the end of the report period and shares held by the top ten
shareholders with unrestricted conditions
Unit: Share
Total number of shareholders
at the end of report period
29,755
Particulars about the shares held by the top ten tradable shareholders with unrestricted conditions
Full name of shareholder
Amount of tradable shares with
unrestricted conditions held at the
end of report period
Type of shares
SEG (HONG KONG) CO., LTD. 16,569,560 Domestically listed foreign shares
GOOD HOPE CORNER
INVESTMENTS LTD 13,900,000 Domestically listed foreign shares
Jia Wenjun 1,017,432 RMB ordinary shares
BINGHUA LIU 876,213 Domestically listed foreign shares
Liu Liaoyuan 741,900 Domestically listed foreign shares
Zhu Ming 611,348 Domestically listed foreign shares
Liang Gengpei 595,305 Domestically listed foreign shares
DBS VICKERS (HONG KONG) LTD
A/C CLIENTS 591,150 Domestically listed foreign shares
Luo Ya 589,800 Domestically listed foreign shares
CHEN NI 468,965 Domestically listed foreign shares
§3. Significant Events
3.1 Particulars about material changes in items of main accounting statement and financial index,
and explanations of reasons
√Applicable □InapplicableShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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Large increase in income from main operation in the report period was mainly because flourishing in
production and sales of wholly-owned subsidiary Wuhan Hengfa Science and Technology Co., Ltd.,
Wuhan Hengfa Science and Technology Co., Ltd. realized income from main operation amounting to
RMB 138 million, but RMB 93 million in the same period of last year.
Large increase in net profit in the report period was mainly because Wuhan Hengfa Science and
Technology Co., Ltd. realized large increase in net profit, and realized gains from assets replacement
matters of the Company amounting to RMB 6.9 million.
Large increase in monetary fund was mainly because the account receivable was greatly taken back
and short-term loan increased.
Large increase in inventories was mainly because flourishing in production and sales of Wuhan
Hengfa Science and Technology Co., Ltd., the demand of production enhanced which
correspondingly cause the great rises in account receivable meanwhile.
Large increase in intangible asset was mainly because of increase in intangible assets such as Wuhan
land and property injected in assets replacement matters.
3.2 Analysis and explanation of significant events and their influence and solutions
√Applicable □Inapplicable
In 2009, in order to promote the assets quality and profitability ability of the Company, realize the
integration of industrial assets, and meanwhile eliminate the related matters that the Company rented
plants for long time from controlling shareholder Wuhan Zhongheng New Science & Technology
Industrial Group Co., Ltd. (hereinafter refers to as Wuhan Zhongheng Group) for the Company’s
industry production business in Wuhan, the Company replaced part industry land and property of
controlling shareholder Wuhan Zhongheng Group in Wuhan with printing circuit business and part
industry land of the Company in Gongming.
In Dec. 2009, Wuhan Zhongheng Group transferred the ownership of land of property in Wuhan to
underling wholly-owned subsidiary of the Company ---Wuhan Hengfa Science and Technology Co.,
Ltd., and the Company transferred 100 percent equity stake of underling wholly-owned subsidiary of
the Company ---Wuhan Hengfa Science and Technology Co., Ltd. to Wuhan Zhongheng Group; in
March 2010, the Company and Wuhan Zhongheng Group jointly increased the fund investment on
Wuhan Hengfa Science and Technology Co., Ltd. with land and property in Wuhan and cash, Wuhan
Zhongheng Group transferred its holding 56 percent equity stake of Wuhan Hengfa Science and
Technology Co., Ltd. after being increased fund investment to the Company.
3.3 Implementations of commitments by the Company, shareholders and actual controller
√Applicable □Inapplicable
Item of Commitments Promisee Content of
commitments Implementation
Commitments for Share Merger
Reform N/A N/A N/A
Commitments for share restricted
trade
Wuhan
Zhongheng
New Science &
Technology
Industrial
Group Co.,
Ltd.
Promised that the
holding
non-circulating
shares of the
Company won’t be
traded on the market
within 36 months
since they acquired
listed trading right.
Under implementation
Commitments made in Acquisition
Report or Reports on Change in
Wuhan
Zhongheng
Planed to put related
capital of plastic
injection business and
1. Wuhan Zhongheng Group didn’t
finish the assets injection within the
commitment term;Shenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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Interests New Science &
Technology
Industrial
Group Co.,
Ltd.
its owned 70%
HSGD equity into the
Company within 1
year after equity
ownership transfer of
the purchase was
accomplished.
2. On Jun. 5, 2008, with examination
and approval from the 3rd temporary
meeting of the Board for 2008, the
Company took cash RMB 27 million
buying relevant assets concerning
production of injection products from
Wuhan Zhongheng Group, and thus
part commitment had been finished;
3. In the first 10 days of May, 2008, the
Company officially started off the
significant asset restructure work of
purchasing the 70% equities of Wuhan
Hengsheng Photoelectricity Industry
Co., Ltd.; engaged financial consultant
and law consultant to carry out earnest
investigation on the restructure assets
that may be involved, and negotiated
with relevant departments which were
in charge of this. However, due to that
relevant condition was not mature,
there were obstacles in material asset
restructure and paused the planning in
short-time.
Commitments made in Material
Assets Reorganization N/A N/A N/A
Commitments made in issuing N/A N/A N/A
Other commitments (including
additional commitments) N/A N/A N/A
3.4 Estimation of accumulative net profit from the beginning of the year to the end of next report
period to be loss probably or the warning of its material change compared with the corresponding
period of the last year and explanation of reason
□Applicable √Inapplicable
3.5 Other significant events which need explanations
3.5.1 Particulars about securities investment
□Applicable √Inapplicable
3.5.2 Registration form for receiving research, communication and interview in the report period
In the report period, there were no receptions from the investors such as spot research, telephone
communications and written enquiries.
3.5.3 Particulars about the explanations on other significant events
□Applicable √Inapplicable
3.6 Particulars about derivatives investment
□Applicable √Inapplicable
3.6.1 Particulars about derivatives investment held at the end of report period
□Applicable √InapplicableShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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§4. Appendix
4.1 Balance sheet
Prepared by Shenzhen Zhongheng Huafa Co., Ltd. March 31, 2010 Unit: RMB
Balance at period-end Balance at year-begin
Items Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 142,430,850.25 49,710,132.67 81,045,080.98 49,500,363.83
Settlement provisions
Capital lent
Transaction finance asset
Notes receivable 10,991,296.10 7,058,949.45 16,494,962.28 5,210,693.07
Accounts receivable 154,853,331.24 38,896,467.26 198,525,735.70 189,832,968.64
Accounts paid in
advance 6,794,852.06 1,883,624.62 2,540,752.30 984,065.76
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Interest receivable
Dividend receivable
Other receivables 16,806,694.06 73,870,852.43 98,540,829.55 130,922,698.28
Purchase restituted
finance asset
Inventories 80,075,468.95 9,424,401.27 46,659,614.06 5,430,049.66
Non-current asset due
within one year
Other current assets
Total current assets 411,952,492.66 180,844,427.70 443,806,974.87 381,880,839.24
Non-current assets:
Granted loans and
advances
Finance asset available
for sales
Held-to-maturity
investment
Long-term account
receivable
Long-term equity
investment 189,597,271.45 38,915,789.00
Investment property 39,818,998.49 39,818,998.49 40,432,444.22 40,432,444.22
Fixed assets 209,599,834.87 123,116,775.76 209,483,513.59 126,119,724.23
Construction in progress 813,658.48 789,926.79 813,658.48 789,926.79
Engineering material
Disposal of fixed asset
Productive biologicalShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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asset
Oil and gas asset
Intangible assets 57,552,103.13 6,142,476.15 54,779,557.90 6,053,471.83
Expense on Research
and Development
Goodwill
Long-term expenses to
be apportioned 1,727,677.25 1,727,677.25 2,375,000.00 2,375,000.00
Deferred income tax
asset 5,088,690.42 6,066,614.89 5,088,690.42 6,066,614.89
Other non-current asset
Total non-current asset 314,600,962.64 367,259,740.78 312,972,864.61 220,752,970.96
Total assets 726,553,455.30 548,104,168.48 756,779,839.48 602,633,810.20
Current liabilities:
Short-term loans 90,212,871.29 23,570,130.56 33,442,212.57 23,570,130.56
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial
liabilities
Notes payable 28,054,453.73 18,480,655.16
Accounts payable 111,110,252.67 35,813,613.34 81,546,114.17 50,331,249.99
Accounts received in
advance 1,288,313.47 764,229.57 1,762,766.25 1,442,334.29
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 1,373,122.59 425,331.98 2,047,294.58 526,475.34
Taxes payable 3,137,570.57 2,841,643.07 8,828,793.97 9,015,502.25
Interest payable
Dividend payable
Other accounts payable 5,064,889.80 4,199,566.95 132,645,479.98 40,020,152.97
Reinsurance payables
Insurance contract
reserve
Security trading of
agency
Security sales of agency
Non-current liabilities
due within 1 year
Other current liabilities
Total current liabilities 240,241,474.12 67,614,515.47 278,753,316.68 124,905,845.40
Non-current liabilities:
Long-term loans 215,809,400.00 215,809,400.00 219,621,200.00 219,621,200.00
Bonds payableShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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Long-term account
payable
Special accounts payable
Projected liabilities 6,241,463.99 6,241,463.99 6,241,463.99 6,241,463.99
Deferred income tax
liabilities
Other non-current
liabilities 200,000.00 200,000.00 200,000.00 200,000.00
Total non-current liabilities 222,250,863.99 222,250,863.99 226,062,663.99 226,062,663.99
Total liabilities 462,492,338.11 289,865,379.46 504,815,980.67 350,968,509.39
Owner’s equity (or
shareholders’ equity):
Paid-in capital (or share
capital) 283,161,227.00 283,161,227.00 283,161,227.00 283,161,227.00
Capital public reserve 104,073,326.94 104,073,326.94 104,073,326.94 104,073,326.94
Less: Inventory shares
Reasonable reserve
Surplus public reserve 77,391,593.25 77,391,593.25 77,391,593.25 77,391,593.25
Provision of general risk
Retained profit -200,565,030.00 -206,387,358.17 -212,662,288.38 -212,960,846.38
Balance difference of
foreign currency translation
Total owner’s equity
attributable to parent
company
264,061,117.19 258,238,789.02 251,963,858.81 251,665,300.81
Minority interests
Total owner’s equity 264,061,117.19 258,238,789.02 251,963,858.81 251,665,300.81
Total liabilities and owner’s
equity 726,553,455.30 548,104,168.48 756,779,839.48 602,633,810.20
4.2 Profit statement
Prepared by Shenzhen Zhongheng Huafa Co., Ltd. Jan.-Mar. 2010 Unit: RMB
Amount in this period Amount in last period
Items Consolidation Parent Company Consolidation Parent Company
I. Total operating income 137,890,464.87 20,760,450.39 93,287,223.02 67,051,317.58
Including: Operating income 137,890,464.87 20,760,450.39 93,287,223.02 67,051,317.58
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 132,407,483.84 21,141,217.26 90,575,354.22 64,551,359.97
Including: Operating cost 119,242,694.86 12,094,801.25 79,905,708.80 56,726,518.72
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expenseShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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of compensation
Net amount of
withdrawal of insurance
contract reserve
Bonus expense of
guarantee slip
Reinsurance expense
Operating tax and extras 791,103.86 643,885.18 648,909.94 576,858.85
Sales expenses 953,612.86 129,046.62 1,337,685.11 928,856.61
Administration expenses 7,936,979.56 5,004,864.63 6,848,772.65 4,729,513.79
Financial expenses 3,483,092.70 3,268,619.58 1,834,277.72 1,589,612.00
Losses of devaluation of
asset
Add: Changing income
of fair value(Loss is listed
with “-”)
Investment income (Loss
is listed with “-”)
Including: Investment
income on affiliated company
and joint venture
Exchange income (Loss
is listed with “-”)
III. Operating profit (Loss is
listed with “-”) 5,482,981.03 -380,766.87 2,711,868.80 2,499,957.61
Add: Non-operating
income 6,963,369.25 6,906,387.13 69,557.30 69,557.30
Less: Non-operating
expense 108.76 216,636.94 216,636.94
Including: Disposal loss
of non-current asset
IV. Total Profit (Loss is
listed with “-”) 12,446,241.52 6,525,620.26 2,564,789.16 2,352,877.97
Less: Income tax 396,851.09 462,010.27 423,518.03
V. Net profit (Net loss is listed
with “-”) 12,049,390.43 6,525,620.26 2,102,778.89 1,929,359.94
Net profit attributable to
owner’s equity of parent
company
12,049,390.43 6,525,620.26 2,102,778.89 1,929,359.94
Minority shareholders’
gains and losses
VI. Earnings per share
i. Basic earnings per share 0.0427 0.0232 0.0074 0.0068
ii. Diluted earnings per share 0.0427 0.0232 0.0074 0.0068
VII. Other consolidated
income
VIII. Total consolidated
income 12,049,390.43 6,525,620.26 2,102,778.89 1,929,359.94
Total consolidated income
attributable to owners of
parent company
12,049,390.43 6,525,620.26 2,102,778.89 1,929,359.94Shenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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Total consolidated income
attributable to minority
shareholders
4.3 Cash flow statement
Prepared by Shenzhen Zhongheng Huafa Co., Ltd. Jan.-Mar. 2010 Unit: RMB
Amount in this period Amount in last period
Items Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor
services
195,696,213.79 112,801,087.74 72,909,566.64 66,049,501.30
Net increase of customer
deposit and interbank deposit
Net increase of loan from
central bank
Net increase of capital
borrowed from other financial
institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Net increase of insured
savings and investment
Net increase of disposal of
transaction financial asset
Cash received from interest,
commission charge and
commission
Net increase of capital
borrowed
Net increase of returned
business capital
Write-back of tax received
Other cash received
concerning operating activities 5,610,551.26 3,946,071.59
Subtotal of cash inflow
arising from operating activities 195,696,213.79 112,801,087.74 78,520,117.90 69,995,572.89
Cash paid for purchasing
commodities and receiving labor
service
123,108,416.33 10,689,025.07 54,929,124.15 46,374,370.08
Net increase of customer
loans and advances
Net increase of deposits in
central bank and interbank
Cash paid for original
insurance contract compensation
Cash paid for interest,
commission charge and
commission
Cash paid for bonus ofShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
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guarantee slip
Cash paid to/for staff and
workers 7,416,845.71 1,701,327.92 6,382,987.51 3,962,125.15
Taxes paid 2,348,166.80 1,157,384.09 995,283.89 971,458.57
Other cash paid concerning
operating activities 37,313,372.97 33,745,947.02 23,023,723.28 29,528,059.22
Subtotal of cash outflow
arising from operating activities 170,186,801.81 47,293,684.10 85,331,118.83 80,836,013.02
Net cash flows arising from
operating activities 25,509,411.98 65,507,403.64 -6,811,000.93 -10,840,440.13
II. Cash flows arising from
investing activities:
Cash received from
recovering investment
Cash received from
investment income
Net cash received from
disposal of fixed, intangible and
other long-term assets
Net cash received from
disposal of subsidiaries and
other units
Other cash received
concerning investing activities
Subtotal of cash inflow
from investing activities
Cash paid for purchasing
fixed, intangible and other
long-term assets
497,171.67 1,537,975.77 576,269.73
Cash paid for investment 14,100,000.00 58,300,000.00 14,500,000.00 17,237,700.00
Net increase of mortgaged
loans
Net cash received from
subsidiaries and other units
Other cash paid concerning
investing activities
Subtotal of cash outflow
from investing activities 14,597,171.67 58,300,000.00 16,037,975.77 17,813,969.73
Net cash flows arising from
investing activities -14,597,171.67 -58,300,000.00 -16,037,975.77 -17,813,969.73
III. Cash flows arising from
financing activities
Cash received from
absorbing investment
Including: Cash received
from absorbing minority
shareholders’ investment by
subsidiaries
Cash received from loans 12,000,000.00 140,000,000.00 140,000,000.00
Cash received from issuing
bonds
Other cash received
concerning financing activities
Subtotal of cash inflow
from financing activities 12,000,000.00 140,000,000.00 140,000,000.00Shenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report 2010(Full Text)
11
Cash paid for settling debts 3,811,800.00 3,811,800.00 94,000,000.00 94,000,000.00
Cash paid for dividend and
profit distributing or interest
paying
3,483,092.70 3,268,619.58 1,513,770.50 1,513,770.50
Including: Dividend and
profit of minority shareholder
paid by subsidiaries
Other cash paid concerning
financing activities
Subtotal of cash outflow
from financing activities 7,294,892.70 7,080,419.58 95,513,770.50 95,513,770.50
Net cash flows arising from
financing activities 4,705,107.30 -7,080,419.58 44,486,229.50 44,486,229.50
IV. Influence on cash and cash
equivalents due to fluctuation in
exchange rate
-126,267.15 -55,918.19 -47,519.43 -47,519.43
V. Net increase of cash and cash
equivalents 15,491,080.46 71,065.87 21,589,733.37 15,784,300.21
Add: Balance of cash and
cash equivalents at the period
-begin
27,153,099.93 26,068,936.24 24,314,654.56 23,236,402.77
VI. Balance of cash and cash
equivalents at the period -end 42,644,180.39 26,140,002.11 45,904,387.93 39,020,702.98
4.4 Auditor’s report
Auditor’s opinions: Un-audited
Chairman: Li Zhongqiu
Board of the Directors of
Shenzhen Zhongheng Huafa Co., Ltd.
April 28, 2010
Chairman of the Board: Li Zhongqiu
