Shenzhen Zhongheng Huafa Co., Ltd.
Text of First Quarterly Report 2021
Stock Code: 000020 200020 Public Notice No.:2021-10
Short Form of the Stock: SHEN HUAFA-A, SHEN HUAFA- B
Shenzhen Zhongheng Huafa Co., Ltd.
Text of First Quarterly Report 2021
1
Shenzhen Zhongheng Huafa Co., Ltd.
Text of First Quarterly Report 2021
Section I. Important Notes
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 should guarantee the reality, accuracy and
completion of the quarterly report, there are no any fictitious statements,
misleading statements or important omissions carried in this report, and shall
take legal responsibilities, individual and/or joint.
All Directors are attended the Board Meeting for Quarterly Report deliberation.
Li Zhongqiu, person in charge of the Company, Yang Bin, person in charger of
accounting works and Wu Ai’jie, person in charger of accounting organ
(accounting officer) hereby confirm that the Financial Statement of this
Quarterly Report is authentic, accurate and complete.
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Shenzhen Zhongheng Huafa Co., Ltd.
Text of First Quarterly Report 2021
Section II. Basic situation of the Company
I. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□Yes √ No
At the same period of last Changes of this period over
Current period
year same period of last year
Operating income (RMB) 190,936,203.57 87,800,584.55 117.47%
Net profit attributable to shareholders of
5,557,677.31 -400,741.17 1,489.06%
the listed company (RMB)
Net profit attributable to shareholders of
the listed company after deducting 5,476,703.89 -208,179.52 2,735.02%
non-recurring gains and losses (RMB)
Net cash flow arising from operating
-5,125,776.38 7,931,308.59 -164.63%
activities (RMB)
Basic earnings per share (RMB/Share) 0.0197 -0.0014 1,507.14%
Diluted earnings per share (RMB/Share) 0.0197 -0.0014 1,507.14%
Weighted average ROE 1.64% -0.12% 1.76%
Changes of this period-end
At the end of the reporting
At the end of last year over same period-end of last
period
year
Total assets (RMB) 637,523,241.97 627,779,621.06 1.55%
Net assets attributable to shareholder of
341,806,414.60 336,248,737.29 1.65%
listed company (RMB)
Items and amount of non-recurring gains and losses
√ Applicable □ Not applicable
In RMB
Amount from year-begin to
Item Note
period-end
Gains/losses from the disposal of non-current asset (including the
-6,163.53
write-off that accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not
including the subsidy enjoyed in quota or ration according to
6,000.00
national standards, which are closely relevant to enterprise’s
business)
Gain or loss on the investment or management of assets 71,186.44
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Shenzhen Zhongheng Huafa Co., Ltd.
Text of First Quarterly Report 2021
Other non-operating income and expenditure except for the
10,677.58
aforementioned items
Less: impact on income tax 727.07
Total 80,973.42 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
II. Total number of shareholders at the end of this report period and top ten shareholders
1. Total number of common shareholders at the end of this report period and top ten common shareholders
In shares
Total preference shareholders
Total common stock shareholders in with voting rights recovered at
22,456 0
reporting period-end end of reporting period (if
applicable)
Top ten shareholders
Amount of Number of share pledged/frozen
Shareholder’s Nature of Proportion of Amount of shares
restricted shares
name shareholder shares held held State of share Amount
held
Wuhan Domestic Pledged 116,100,000
Zhongheng non-state-owned 42.13% 119,289,894 0
Frozen 119,289,894
Group legal person
SEG (HONG Pledged 0
Overseas legal
KONG) CO., 5.85% 16,569,560 0
person Frozen 0
LTD.
GOOD HOPE Pledged 0
CORNER Overseas legal
2.50% 7,072,000 0
INVESTMENTS person Frozen 0
LTD.
Changjiang Pledged 0
Securities
Overseas legal
Brokerage 1.89% 5,355,249 0
person Frozen 0
(Hongkong) Co.,
Ltd.
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Shenzhen Zhongheng Huafa Co., Ltd.
Text of First Quarterly Report 2021
Guoyuan Pledged 0
Securities Overseas legal
1.37% 3,870,117 0
Brokerage (Hong person Frozen 0
Kong) Limited
Overseas nature Pledged 0
Li Zhongqiu 1.00% 2,830,000 0
person Frozen 0
China Merchants Pledged 0
State-owned legal
Securities Hong 0.79% 2,230,608 0
person Frozen 0
Kong Co., Ltd.
LI SHERYN Overseas nature Pledged 0
0.51% 1,446,100 0
ZHAN MING person Frozen 0
Shengyin Pledged 0
Overseas legal
Investment Co., 0.50% 1,408,600 0
person Frozen 0
Ltd.
Domestic nature Pledged 0
# Xu Xinfen 0.45% 1,288,000 0
person Frozen 0
Top ten shareholders with unrestricted shares held
Type of shares
Shareholder’s name Amount of unrestricted shares held
Type Amount
RMB common
Wuhan Zhongheng Group 119,289,894 119,289,894
share
Domestically
SEG (HONG KONG) CO., LTD. 16,569,560 listed foreign 16,569,560
shares
Domestically
GOOD HOPE CORNER
7,072,000 listed foreign 7,072,000
INVESTMENTS LTD.
shares
Domestically
Changjiang Securities Brokerage
5,355,249 listed foreign 5,355,249
(Hongkong) Co., Ltd.
shares
Domestically
Guoyuan Securities Brokerage
3,870,117 listed foreign 3,870,117
(Hong Kong) Limited
shares
Domestically
Li Zhongqiu 2,830,000 listed foreign 2,830,000
shares
Domestically
China Merchants Securities Hong
2,230,608 listed foreign 2,230,608
Kong Co., Ltd.
shares
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Shenzhen Zhongheng Huafa Co., Ltd.
Text of First Quarterly Report 2021
Domestically
LI SHERYN ZHAN MING 1,446,100 listed foreign 1,446,100
shares
Domestically
Shengyin Investment Co., Ltd. 1,408,600 listed foreign 1,408,600
shares
RMB common
# Xu Xinfen 1,288,000 1,288,000
share
Among the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng
New Science & Technology Industrial Group Co., Ltd. and is a party acting in
Explanation on associated concert.Shengyin Investment Co., Ltd. is an overseas wholly-owned subsidiary of Wuhan
relationship among the aforesaid Zhongheng group.
shareholders The Company neither knew whether there exists associated relationship among the other
shareholders, nor they belong to consistent actors that are prescribed in Measures for the
Administration of Disclosure of Shareholder Equity Changes of Listed Companies.
Explanation on top 10 common
shareholders involving margin N/A
business (if applicable)
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement
dealing in reporting period
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back
agreement dealing in reporting period.
2. Total shareholders with preferred stock held and shares held by top ten shareholders with preferred
stock held
□ Applicable √ Not applicable
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Section III. Significant Events
I. Particulars about material changes in items of main accounting statement and financial
index and explanations of reasons
√Applicable □Not applicable
Item March 31, 2021 January 1, 2021 Y-o-y changes Reasons of changes
Other receivables 2,060,681.11 4,466,949.96 -53.87% Decrease in current accounts
Inventory 103,732,453.57 70,502,773.52 47.13% Stocking in this period
The tax to be deducted is deducted for the
Other current assets 1,129,263.49 4,255,643.19 -73.46%
current period.
Long-term prepaid Cloud service fee amortization
19,361.35 77,445.31 -75.00%
expenses
Short-term bank loans were increased in
Short-term loans 20,921,296.00 12,527,808.00 67.00%
the current period.
The deposit received in advance has
Contract liabilities 171,293.92 287,140.66 -40.34%
decreased during the period.
Employee The prepaid wages and expenses are paid
3,106,406.38 5,737,366.59 -45.86%
compensation payable in the current period
Other payables 18,556,536.88 27,608,281.01 -32.79% Decrease in current accounts
Short-term loans increased in the current
Interest payable 63,086.88 26,335.66 139.55%
period.
January to March January to March Reasons of changes
Item Y-o-y changes
2021 2020
Operating income 190,936,203.57 87,800,584.55 117.47% Increase in orders this period
Operating cost 160,692,426.33 73,672,446.25 118.12% Increase in orders this period
Sales expense 9,604,962.16 3,448,537.85 178.52% Increase in orders this period
Increased in R&D investment in this
R&D expenses 1,990,208.94 908,285.77 119.12%
period
Amortization of deferred income for the
Other income 119,520.00 64,770.00 84.53%
current period
Increase in financial income during the
Investment income 71,186.44 37,415.02 90.26%
current period
Government subsidy income from the
Non-operating income 19,464.75 5,492.44 254.39%
previous period
Non-operating Liquidated damages occurred in the
8,950.00 263,835.56 -96.61%
expenses previous period
Income tax expense 1,360,875.84 -85,032.71 -1700.41% Increase in profit for the period
Item January to March January to March Y-o-y changes Reasons of changes
2021 2020
Cash received from Increase in sales collection in this period
the sale of goods and
118,847,638.92 86,584,529.58 37.26%
the provision of labor
services
Cash paid for Increase in orders this period
purchasing goods and
90,764,568.41 56,760,923.41 59.91%
receiving labor
services
Cash paid to and for Increase in orders this period
18,034,045.23 8,467,600.61 112.98%
employees
Taxes paid 8,114,109.92 2,351,100.26 245.12% Increase in orders this period
Cash received from Margin interest increased in this period
71,186.44 37,415.02 90.26%
investment income
Net cash received Disposal of old equipment in the previous
from the disposal of period
fixed assets, intangible 13,000.00 91,000.00 -85.71%
assets and other
long-term assets
Cash paid for the Purchase production equipment in this
purchase and period
construction of fixed
1,624,675.50 467,211.58 247.74%
assets, intangible
assets and other
long-term assets
Other cash paid Bank wealth management decreased in
relating to investing - 25,000,000.00 -100.00% this period
activities
Cash received from Increase in short-term loans
20,710,525.00 6,725,056.80 207.96%
loans
Other cash paid Increase acceptance margin in this period
relating to financing 6,408,886.53 -
activities
Influence on cash and The impact of exchange rate fluctuations
cash equivalents due in the current period
-124,286.41 32,336.78 484.35%
to fluctuation in
exchange rate
II. Analysis and explanation of significant events and their influence and solutions
√ Applicable □Not applicable
(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology Industrial
Group Co., Ltd (hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to in
the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the Company
(namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district, Shenzhen
(the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels were A627-005
andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of plan for 2010
Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint
cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.
The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first
extraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the
“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area at
Gongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Group
shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots
and the respectively contributed and constructed above-ground buildings before the land development, it is
estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total
consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.
The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of
2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewal
and the progress of related transactions of ‘the updated units at Huafa Area, Gong Ming Street, Guangming New
District, Shenzhen’”, the company has signed the “Agreement on the cooperation of urban renewal project of the
updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, “Contract for the
cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street, Guangming New
District” and “Agreement on housing acquisition and removal compensation and resettlement” with Wuhan
Wuhan Zhongheng Group, Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”),
and Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to as “Vanke
Guangming”).
On 12 September 2016, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of
urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”
against the Company and Wuhan Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) has
given a ruling in August 2017. On August 29, 2018, the court accepted the compulsory execution application of
Shenzhen Vanke. In October 2019, as a number of outsiders filed an “execution objection” and applied for “no
execution” to Shenzhen Intermediate People’s Court, the Shenzhen Intermediate People’s Court ruled to terminate
the enforcement procedure on March 20, 2020. If the “execution objection” and “no execution” proposed by
outsiders are rejected according to law, Shenzhen Vanke may continue to apply to the Shenzhen Intermediate
People’s Court to resume execution. Progress of the case found more in the Notices released on Juchao website
dated 14 Sept. 2016, 1 Nov. 2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18
August 2017, 9 Feb. 2018, 25 Aug. 2018 and 7 Sept. 2018 respectively.
(ii) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China
Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. On 1 Feb. 2016, Wuhan Zhongheng
Group pledge the 27,349,953 shares held to China Merchants Securities Assets Co., Ltd. with due date of 31
December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expired
on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end
of this period released, controlling shareholder still not removed the pledge and the Company has apply by letter,
relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice
released on Juchao website date 2 Feb. 2018.
Wuhan Zhongheng Group received the first-instance judgment of Guangdong Higher People’s Court to the
“pledged securities repurchase dispute” case sued by China Merchants Securities Asset Management Co., Ltd. in
March 2021. Wuhan Zhongheng Group refused to accept the judgment and has appealed to the Supreme People's
Court, the judgment of first instance has not yet taken effect. For details, please refer to the company
announcement issued by the company on www.cninfo.com.cn on March 19, 2021.
(iii) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of the Company’ stock,
accounting for 42.13% of the total share capital of the Company, of which 116,489,894 shares were judicially frozen
by Shenzhen Intermediate People's Court (hereinafter referred to as "Shenzhen Intermediate Court") on September
27, 2016, which were frozen again by the Shenzhen Intermediate People's Court on December 14, 2018, with a
frozen period of 36 months; the remaining 2,800,000 shares were frozen by the Shenzhen Intermediate People's
Court on May 29, 2019, and were frozen again by the Higher People’s Court of Guangdong Province on July 5,
2019. For details, please refer to the company’s announcements published on Juchao Website dated October 27,
2016, January 11, 2019, May 31, 2019 and August 7, 2019.
(iv) On September 29, 2016, the company and its controlling shareholder, Wuhan Zhongheng Group, signed the
“Agency Contract” with V&T Law Firm. On October 8, 2016, the three parties also signed the “Supplemental
Agreement for Agency Contract”, it was agreed that V&T acted as an agent for the company and Wuhan
Zhongheng Group to deal with the arbitration case with Shenzhen Vanke. After losing the lawsuit, due to
differences in the payment of attorney fees, V&T sued our company and Wuhan Zhongheng Group to the
Shenzhen Court of International Arbitration, and applied to the court to seize a bank account under our company’s
name and part of our company dormitories, please refer to “Other Announcements on the Progress Involving
Litigation and Arbitration” (Announcement Numbers: 2018-43, 2019-02) released by our company on Juchao
Website dated November 14, 2018 and March 6, 2019. 02. In November 2019, the Shenzhen Court of
International Arbitration ruled that the company and Wuhan Zhongheng Group paid the corresponding fees.
According to the “Agency Contract” and “Supplemental Agreement for Agency Contract” signed by the three
parties, the loss of the arbitrament in this case was borne by Wuhan Zhongheng Group, so it had no impact on the
company’s profit. For details, see the company’s “Other Announcements on the Progress Involving Litigation and
Arbitration” (Announcement No.: 2019-34) released on Juchao Website dated November 25, 2019.
Summary of important issues Disclosure date Interim report disclosure index
Implementation progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
III. Commitments completed in Period and those without completed till end of the Period
from actual controller, shareholders, related parties, purchaser and companies
□ Applicable √ Not applicable
The Company has no commitments completed in Period and those without completed till end of the Period from actual controller,
shareholders, related parties, purchaser and companies.
IV. Financial asset investment
1. Securities investment
□ Applicable √ Not applicable
No security investment in the Period.
2. Derivative investment
□ Applicable √ Not applicable
No derivative investment in the Period.
V. Progress of investment projects with raised funds
□ Applicable √ Not applicable
VI. Prediction of business performance from January – June 2021
Estimation on 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 on reason
□ Applicable √ Not applicable
VII. Major contracts for daily operations
□ Applicable √ Not applicable
VIII. Trust financing
□ Applicable √ Not applicable
No trust financing in the Period.
IX. Guarantee outside against the regulation
□Applicable √Not applicable
The Company had no guarantee outside against the regulation in the period.
X. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
The Company had no non-operational fund occupation form controlling shareholders and its related party in the period.
XI. Registration form for receiving research, communication and interview in the report
period
√ Applicable □ Not applicable
Main content
Reception Type of Index for the interview
Date Method Object and information
location investors and research
provided
Understand the
company's
production and
Office of the operation
BOD locates in Telephone situation,
January 5, 2021 Individual Individual N/A
6/F, Huafa communication litigation
Building progress and the
progress of
urban renewal
projects
