Shenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
1
Shenzhen Zhongheng Huafa Co., Ltd.
The First Quarterly Report for 2009
(Full Text)
§1. Important Notice
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 Reason of absence Name of
entrusted
Li Zhongqiu Went abroad Chen Zhigang
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 Fu Yanhua, 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 Data and Financial Indexes:
Unit: RMB
At the end of the report
period At the end of the last year Changes of
increase/decrease (%)
Total assets 514,989,335.39 446,670,716.88 15.30%
Equity attributable to owners of
the parent company 249,912,045.05 247,809,266.16 0.85%
Share capital 283,161,227.00 283,161,227.00
Net asset per share attributable to
owners of the parent company 0.88 0.875 0.57%
In the report period The same period of last
year
Changes of
increase/decrease (%)
Total operating income 93,287,223.02 42,328,434.23 120.39%
Net profit attributable to owners
of the parent company 2,102,778.89 1,523,607.05 38.01%
Net cash flow arising from
operating activities -6,811,000.93 11,291,901.85 -160.32%
Net cash flow arising from
operating activities per share -0.024 0.04 -160.00%
Basic earnings per share 0.0074 0.00513 44.25%
Diluted earnings per share 0.0074 0.00513 44.25%
Return on equity 0.84% 0.63% Increased 0.21 percentage
pointsShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
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Return on equity after deducting
the non-recurring losses and
gains
0.90% 0.14% Increased 0.76 percentage
points
Items of non-recurring gains and losses Amount in year-begin to
the end of report period
Other non-operating income and expense excluded the aforementioned items -147,079.64
Total -147,079.64
Explanations on items of non-recurring gains and losses
Non-operating income was the compensation for violation of contract, non-operating expense was
the account paid for the abnormal operating expense.
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 23,408
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
XIAO GENG NING 1,077,769 Domestically listed foreign shares
BINGHUA LIU 876,213 Domestically listed foreign shares
WU WEI MIN 870,500 RMB ordinary shares
LUO YA 756,620 Domestically listed foreign shares
WANG ZHI YONG 750,000 Domestically listed foreign shares
LIU LIAO YUAN 734,200 Domestically listed foreign shares
FENG ZHI E 693,500 RMB ordinary shares
ZHU MING 611,348 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 □Inapplicable
Monetary assets increased by 88.79%, due to return the short-term loan RMB 94 million, and
newly-increased long-term loan RMB 140 million in the report period.
Notes payable decreased by 43.06%, due to that the Company strengthened in taking back cash when
collecting the account, decreased noted receivable and taking back goods account on notes receivable
which was received in prophase.
Account receivable increased by 19.32%, mainly due to increase of account receivable of the
newly-increased subsidiary -Wuhan Hengfa Science and Technology Co., Ltd in the consolidation scope
in this report period.
Other account receivable increased by 28.12%, mainly due to increase of other account receivable of
the newly-increased subsidiary -Wuhan Hengfa Science and Technology Co., Ltd in the consolidation
scope in this report period.
Inventory increased by 43.16%, mainly due to increase of inventory of the newly-increased subsidiary
-Wuhan Hengfa Science and Technology Co., Ltd in the consolidation scope in this report period.
Other current assets mainly referred to finance adviser fee which was newly increased in the report
period. The adviser period is the same as the period of long-term period. The Company made long-
termShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
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amortizations.
Notes payable increased by 88.43%, mainly due to change by the increase of payment method of notes
in this report period.
Accounting payable increased by 86.09%, mainly due to that the newly-increased subsidiary -Wuhan
Hengfa Science and Technology Co., Ltd increased account payable for purchasing goods in this report
period.
Other account payable as of period-end decreased by 55.83%, mainly due to that the Company paid the
last account for purchasing plastic injection business to Wuhan Zhongheng Group, and balance account
of credits’ right and debt respectively received and paid by Wuhan Zhongheng Group for the Company
because of entrust operation.
Operating income increased by 120.39% over the same period of last year, mainly due to the income
from the newly-increased subsidiary -Wuhan Hengfa Science and Technology Co., Ltd in the
consolidation scope in the report period
Operation cost and business tax & surcharges were because of the relevant operation cost and business
tax & surcharges of the newly-increased subsidiary -Wuhan Hengfa Science and Technology Co., Ltd.
in the consolidated scope.
Sales expense and administration expense respectively increased by 32.31% and 35.84%, due to that the
relevant sales expense and administration expense of the newly-increased subsidiary -Wuhan Hengfa
Science and Technology Co., Ltd. in the consolidated scope.
Financial expense decreased by 19.5% over the same period of last year, due to that the changes of
exchange rate was smaller in the report period, and the exchange loss of export income decreased
compared with that in the same period of last year.
Reason for decrease of non-operating income: tenancy income from Huafa Yard which was reckoned
into the non-operating income would be handed in to Zhenhua Group based on the agreement since
Nov. 2008, so income from this item decreased.
3.2 Analysis and explanation of significant events and their influence and solutions
□Applicable √Inapplicable
3.3 Implementations of commitments by the Company, shareholders and actual controller
√Applicable □Inapplicable
Commitments Content of commitments Implementation
Commitments for Share Merger
Reform Naught Naught
Commitments on share restriction
for trading
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
Interests
Planed to put related capital
of plastic injection business
and its owned 70% HSGD
equity into the Company
within 1 year after equity
ownership transfer of the
purchase was accomplished.
1. Wuhan Zhongheng Group didn’t finish the
assets injection within the commitment term;
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%Shenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report
for 2009(Full Text)
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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 Naught Naught
Commitments made in issuing Naught Naught
Other commitments (including
additional commitments) Naught Naught
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
§4. Appendix
4.1 Balance sheet
Prepared by Shenzhen Zhongheng Huafa Co., Ltd. March 31, 2009 Unit: RMB
Items MerBgaelra n ce at pePriaorde-netn Cd ompany MerBgaelra n ce at yePara-rbeengt iCn ompany
Current assets:
Monetary funds 45,904,387.93 39,020,702.98 24,314,654.56 23,236,402.77
Settlement provisions
Capital lent
Transaction finance asset
Notes receivable 3,853,555.72 3,853,555.72 6,767,862.01 6,767,862.01
Accounts receivable 119,282,626.66 102,208,037.00 98,397,251.00 98,372,655.00
Accounts paid in advance 2,272,739.97 1,259,205.37 2,046,277.06 1,966,277.06
Insurance receivable
Reinsurance receivables
Contract reserve ofShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
5
reinsurance receivable
Interest receivable
Dividend receivable
Other receivables 21,934,625.26 25,896,627.03 15,576,239.03 15,883,360.82
Purchase restituted
finance asset
Inventories 74,562,523.29 49,849,121.97 50,460,254.12 50,350,104.12
Non-current asset due
within one year
Other current assets 1,968,726.48 1,482,142.86
Total current assets 269,779,185.31 223,569,392.93 197,562,537.78 196,576,661.78
Non-current assets:
Granted loans and
advances
Finance asset available
for sales
Held-to-maturity
securities
Long-term account
receivable
Long-term equity
investment 33,203,489.00 30,465,789.00
Investment property 42,272,781.95 42,272,781.95 42,938,764.28 42,938,764.28
Fixed assets 191,093,184.15 173,586,829.59 194,494,830.65 176,935,860.29
Construction in progress 1,641,582.01 1,251,480.79 1,624,882.03 1,135,030.03
Engineering material
Disposal of fixed asset
Productive biological
asset
Oil and gas asset
Intangible assets 6,405,973.46 6,377,405.20 6,253,073.63 6,253,073.63
Expense on Research and
Development
Goodwill
Long-term expenses to be
apportioned
Deferred income tax asset 3,796,628.51 4,813,975.21 3,796,628.51 4,813,975.21
Other non-current asset
Total non-current asset 245,210,150.08 261,505,961.74 249,108,179.10 262,542,492.44
Total assets 514,989,335.39 485,075,354.67 446,670,716.88 459,119,154.22
Current liabilities:
Short-term loans 94,000,000.00 94,000,000.00
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial
liabilitiesShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
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Notes payable 6,462,657.41 6,462,657.41 3,429,765.26 3,429,765.26
Accounts payable 92,847,575.36 59,377,847.33 49,895,119.48 49,732,770.38
Accounts received in
advance 1,882,211.54 1,882,211.54 1,962,952.11 1,962,952.11
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 1,054,784.60 1,053,785.63 908,291.64 844,458.29
Taxes payable 2,344,989.19 2,927,151.96 2,766,213.08 2,678,179.46
Interest payable
Dividend payable
Other accounts payable 20,109,597.83 18,243,894.60 45,523,634.74 53,272,582.46
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 124,701,815.93 89,947,548.47 198,485,976.31 205,920,707.96
Non-current liabilities:
Long-term loans 140,000,000.00 140,000,000.00
Bonds payable
Long-term account
payable
Special accounts payable
Projected liabilities 175,474.41 175,474.41 175,474.41 175,474.41
Deferred income tax
liabilities
Other non-current
liabilities 200,000.00 200,000.00 200,000.00 200,000.00
Total non-current liabilities 140,375,474.41 140,375,474.41 375,474.41 375,474.41
Total liabilities 265,077,290.34 230,323,022.88 198,861,450.72 206,296,182.37
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
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 -214,714,102.14 -209,873,815.40 -216,816,881.03 -211,803,175.34
Balance difference of
foreign currency translation
Total owner’s equity
attributable to parent company 249,912,045.05 254,752,331.79 247,809,266.16 252,822,971.85Shenzhen
Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
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Minority interests
Total owner’s equity 249,912,045.05 254,752,331.79 247,809,266.16 252,822,971.85
Total liabilities and owner’s
equity 514,989,335.39 485,075,354.67 446,670,716.88 459,119,154.22
4.2 Profit statement
Prepared by Shenzhen Zhongheng Huafa Co., Ltd. Jan.-Mar., 2009 Unit: RMB
Items MerAgmero u nt in thiPsa preenrito Cd ompany MerAgmero u nt in lasPta preenrito Cd o mpany
I. Total operating income 93,287,223.02 67,051,317.58 42,328,434.23 41,842,186.23
Including: Operating income 93,287,223.02 56,726,518.72 42,328,434.23 41,842,186.23
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 90,575,354.22 64,551,359.97 42,940,270.50 42,454,270.40
Including: Operating cost 79,905,708.80 56,726,518.72 34,131,325.38 34,131,325.38
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense
of compensation
Net amount of
withdrawal of insurance
contract reserve
Bonus expense of
guarantee slip
Reinsurance expense
Operating tax and extras 648,909.94 576,858.85 477,565.00 452,280.11
Sales expenses 1,337,685.11 928,856.61 1,011,006.23 1,011,006.23
Administration
expenses 6,848,772.65 4,729,513.79 5,041,632.79 4,580,872.02
Financial expenses 1,834,277.72 1,589,612.00 2,278,741.10 2,278,786.66
Losses of devaluation of
asset
Add: Changing income
of fair value(Loss is listed
with “-”)
Investment income
(Loss is listed with “-”) 951,043.53 951,043.53
Including: Investment
income on affiliated
company and joint venture
Exchange income (Loss
is listed with “-”)
III. Operating profit (Loss
is listed with “-”) 2,711,868.80 2,499,957.61 339,207.26 338,959.36
Add: Non-operating
income 69,557.30 69,557.30 1,245,349.09 1,245,349.09Shenzhen Zhongheng Huafa Co., Ltd. The First Quarterly
Report for 2009(Full Text)
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Less: Non-operating
expense 216,636.94 216,636.94 60,949.30 60,701.40
Including: Disposal loss
of non-current asset
IV. Total Profit (Loss is
listed with “-”) 2,564,789.16 2,352,877.97 1,523,607.05 1,523,607.05
Less: Income tax 462,010.27 423,518.03
V. Net profit (Net loss is
listed with “-”) 2,102,778.89 1,929,359.94 1,523,607.05 1,523,607.05
Net profit attributable to
owner’s equity of parent
company
2,102,778.89 1,929,359.94 1,523,607.05 1,523,607.05
Minority shareholders’
gains and losses
VI. Earnings per share
i. Basic earnings per share 0.0074 0.0068 0.00513 0.00513
ii. Diluted earnings per share 0.0074 0.0068 0.00513
4.3 Cash flow statement
Prepared by Shenzhen Zhongheng Huafa Co., Ltd. Jan.-Mar., 2009 Unit: RMB
Items MerAgmero u nt in thiPsa preenrito Cd ompany MerAgmero u nt in lasPta preenrito Cd o mpany
I. Cash flows arising from
operating activities:
Cash received from
selling commodities and
providing labor services
72,909,566.64 66,049,501.30 63,268,673.33 62,791,789.33
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
Insured savings and net
increase of 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
receivedShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
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Other cash received
concerning operating
activities
5,610,551.26 3,946,071.59 1,134,312.25 2,144,025.65
Subtotal of cash inflow
arising from operating
activities
78,520,117.90 69,995,572.89 64,402,985.58 64,935,814.98
Cash paid for
purchasing commodities and
receiving labor service
54,929,124.15 46,374,370.08 34,125,751.78 34,125,751.78
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 of
guarantee slip
Cash paid to/for staff
and workers 6,382,987.51 3,962,125.15 5,259,244.43 5,191,739.57
Taxes paid 995,283.89 971,458.57 4,336,818.33 4,292,705.13
Other cash paid
concerning operating
activities
23,023,723.28 29,528,059.22 9,389,269.19 9,216,206.29
Subtotal of cash outflow
arising from operating
activities
85,331,118.83 80,836,013.02 53,111,083.73 52,826,402.77
Net cash flows arising
from operating activities -6,811,000.93 -10,840,440.13 11,291,901.85 12,109,412.21
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
135,000.00 135,000.00
Net cash received from
disposal of subsidiaries and
other units
Other cash received
concerning investing
activities
Subtotal of cash inflow
from investing activities 135,000.00 135,000.00
Cash paid for
purchasing fixed, intangible
and other long-term assets
1,537,975.77 576,269.73 54,401.68 54,401.68
Cash paid for
investment 14,500,000.00 17,237,700.00
Net increase of
mortgaged loansShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
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Net cash received from
subsidiaries and other units
Other cash paid
concerning investing
activities
Subtotal of cash outflow
from investing activities 16,037,975.77 17,813,969.73 54,401.68 54,401.68
Net cash flows arising
from investing activities -16,037,975.77 -17,813,969.73 80,598.32 80,598.32
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 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 140,000,000.00 140,000,000.00
Cash paid for settling
debts 94,000,000.00 94,000,000.00 11,200,000.00 11,200,000.00
Cash paid for dividend
and profit distributing or
interest paying
1,513,770.50 1,513,770.50 974,187.08 974,187.08
Including: Dividend and
profit of minority
shareholder paid by
subsidiaries
Other cash paid
concerning financing
activities
Subtotal of cash outflow
from financing activities 95,513,770.50 95,513,770.50 12,174,187.08 12,174,187.08
Net cash flows arising
from financing activities 44,486,229.50 44,486,229.50 -12,174,187.08 -12,174,187.08
IV. Influence on cash due to
fluctuation in exchange rate -47,519.43 -47,519.43 -1,337,183.48 -1,337,183.48
V. Net increase of cash and
cash equivalents 21,589,733.37 15,784,300.21 -2,138,870.39 -1,321,360.03
Add: Balance of cash
and cash equivalents at the
period -begin
24,314,654.56 23,236,402.77 18,308,223.25 17,175,103.18
VI. Balance of cash and cash
equivalents at the period -end 45,904,387.93 39,020,702.98 16,169,352.86 15,853,743.15
4.4 Auditor’ report
Auditor’s opinions: Un-audited
Board of the Directors ofShenzhen Zhongheng Huafa Co., Ltd. The First Quarterly Report for 2009(Full Text)
11
Shenzhen Zhongheng Huafa Co., Ltd.
April 27, 2009
