Hainan Jingliang Holdings Co., Ltd. Annual Report 2018 (Summary)
Stock Code: 000505, 200505 Stock Name: JLKG, JL-B Announcement No. 2019-018
HAINAN JINGLIANG HOLDINGS CO., LTD.
ANNUAL REPORT 2018 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the 2018 Annual Report of Hainan Jingliang Holdings 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”).
All the Company’s directors have attended the Board meeting for the review of this Report and its summary.
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:
□ Applicable √ Not applicable
The Company has no final dividend plan, either in the form of cash or stock.
Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period :
□ Applicable √ Not applicable
This Summary has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
Part II Key Corporate Information
1. Stock Profile
Stock name JLKG, JL-B Stock code 000505, 200505
Stock exchange for stock listing Shenzhen Stock Exchange
Used stock name (if any) Pearl River A, Pearl River B
Contact information Board Secretary Securities Representative
Name Zhao Yinhu
Jing Liang Building, NO. 16 East Third Ring
Address
Middle Road, Chaoyang District, Beijing
Fax 010-51672010
Tel. 010-51672029
Email address 593374748@qq.com
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018 (Summary)
2. Principal Activities or Products in the Reporting Period
The Company is principally engaged in oils and oilseeds processing and trading, as well as food production. It
runs its oils and oilseeds processing and trading business primarily in Beijing City, Tianjin City and Hebei
Province under the brands of “Gu Chuan”, “Lv Bao”, “Gu Bi”, “Huo Niao” and “Tian Yi”, with the main products
being soybean oil, rapeseed oil, sunflower seed oil and sesame oil and paste, among others. As for its food
production business, it primarily develops, produces and markets snack food and bread under the brands of “Little
Prince”, “MS Dong”, “Jianqiang De Tudou” and “Gu Chuan”, among others, with the main products being potato
chips, cakes and pastries and bread.
In 2018, as the China-U.S. trade war escalated, the Company turned to Brazil for the procurement of the major
raw materials for its oils and oilseeds division. This supply source from Brazil, with strong seasonality, a long
transportation distance and unstable quality, caused a considerable rise in cost of sales. Therefore, the oils and
oilseeds division took the initiative to adjust operating strategies, gave play to its industrial chain advantage, and
strengthened every link of the industrial china, so as to offset the hit by the trade war. For 2018, the oils and
oilseeds division recorded main operating revenue of RMB6.472 billion and a profit before tax of RMB131
million, approximately flat with last year.
2018 saw the rising prices of raw and auxiliary materials, as well as a fiercer end-market competition in the snack
food industry. The Company primarily competes with Orion, Dali Foods, Lay’s and Oishi in the areas of fried
potato chips, non-fried potato chips and puffed potato sticks. On the non-fried potato chips market, subsidiary
Xiaowangzi is the second largest brand next to Orion, and the largest brand in the separate package and bulk
segments, with great market potentials. The snack food business adhered to the “Differentiated Asymmetric
Competition Strategy”, deepened the model of “Professional Production + Cultural Creativity + Internet”, as well
as implemented quality product and product transition strategies. As a result, for 2018, the snack food business
reported main operating revenue of RMB817 million, up 5.87% year-on-year; and a profit before tax of RMB151
million, representing a 13.07% growth as compared to last year. Meanwhile, thanks to greater efforts in other
cities and product development, as well as the proactive efforts in expanding retail channels, the bread processing
business posted operating revenue of RMB77.26 million, up 26.86% year-on-year.
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
2018-over-2017
2018 2017 2016
change (%)
Operating revenue 7,409,124,303.41 7,917,639,044.13 -6.42% 8,723,491,657.31
Net profit attributable to the listed
167,956,581.15 129,603,167.36 29.59% 197,319,239.01
company’s shareholders
Net profit attributable to the listed 127,425,177.20 63,818,849.21 99.67% -72,109,287.22
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018 (Summary)
company’s shareholders before
exceptional items
Net cash generated from/used in
850,167,551.24 -1,379,507,779.66 161.63% 948,330,160.14
operating activities
Basic earnings per share
0.24 0.2 20.00% 0.31
(RMB/share)
Diluted earnings per share
0.24 0.2 20.00% 0.31
(RMB/share)
Weighted average return on equity
7.69% 5.01% 2.68% 6.96%
(%)
Change of 31
31 December 2018 31 December 2017 December 2018 over 31 December 2016
31 December 2017 (%)
Total assets 4,917,148,996.28 6,082,383,851.23 -19.16% 5,007,343,324.00
Equity attributable to the listed
2,272,469,925.43 2,101,342,683.37 8.19% 1,383,081,876.55
company’s shareholders
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 1,866,527,190.78 1,773,098,788.63 1,899,805,985.97 1,869,692,338.03
Net profit attributable to the listed
31,041,912.71 28,877,082.97 42,345,394.93 65,692,190.54
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 29,930,951.86 27,428,084.65 42,526,321.21 27,539,819.48
exceptional items
Net cash generated from/used in
671,468,699.31 -625,774,156.43 373,889,151.61 430,583,856.75
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
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 Number of preferred
Number of
ordinary shareholders with
Number of preferred
shareholders at resumed voting
ordinary shareholders
38,776 the month-end 37,224 0 rights at the 0
shareholders at with resumed
prior to the month-end prior to
the period-end voting rights at
disclosure of this the disclosure of this
the period-end
Report Report
Top 10 shareholders
Nature of Shareholding Total shares held Restricted Shares in pledge or frozen
Name of shareholder
shareholder percentage at the period-end shares held Status Shares
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018 (Summary)
BEIJING GRAIN GROUP CO., State-owned
42.06% 288,439,561 164,877,598
LTD. legal person
BEIJING STATE-OWNED
State-owned
CAPITAL OPERATION AND 7.07% 48,510,460 48,510,460
legal person
MANAGEMENT CENTER
CHINA DEVELOPMENT State-owned
3.33% 22,828,451 0
BANK CAPITAL CO., LTD. legal person
Foreign
LI SHERYN ZHAN MING 3.21% 22,002,700 0
natural person
GOLD BUFFALO RUNYING
(TIANJIN) EQUITY
INVESTMENT FUND
MANAGEMENT CO.,
Other 3.20% 21,972,451 0
LTD.—GOLD BUFFALO
RUNYING (TIANJIN)
EQUITY INVESTMENT
FUND (L.P.)
Domestic
MEI JIANYING 0.38% 2,604,203 0
natural person
Domestic
HU TIANGAO 0.36% 2,436,052 0
natural person
Domestic
DONGYANG HENGDIAN non-state-own
0.32% 2,204,976 0
GUARANTY CO., LTD. ed legal
person
Domestic
WANG DAO 0.31% 2,145,100 0
natural person
Domestic
ZHANG XIAOXIA 0.28% 1,949,250 0
natural person
Beijing State-Owned Capital Operation And Management Center owns 100% of
Beijing Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is a shareholder
Related or acting-in-concert parties among the
of the Company (a 42.06% holding). Apart from that, the Company does not know
shareholders above
whether there are any other related parties or acting-in-concert parties among the
top 10 shareholders.
1. Shareholder Wang Xiaoxing holds 1,776,000 shares in the Company through his
account of collateral securities for margin trading in Soochow Securities Co., Ltd.
Shareholders involved in securities margin
trading (if any) 2. Shareholder Hu Tiangao holds 338,000 shares in the Company through his
account of collateral securities for margin trading in Zheshang Securities Co., Ltd.,
and 2,098,052 shares in the Company through his ordinary securities account.
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018 (Summary)
(3) Ownership and Control Relations between the Actual Controller and the Company
The State-Owned Assets Supervision and
Administration Commission of the People’s
Government of Beijing Municipality
100%
Beijing State-Owned Capital Operation
and Management Center
100%
Beijing Capital Agribusiness Group Co.,
Ltd.
100%
Beijing Grain Group Co., Ltd.
42.06%
Hainan Jingliang Holdings Co., Ltd.
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
Is the Company subject to any industry-specific disclosure requirements?
No.
(1) Overall Performance
In face of the generally weak market and industry in 2018, the Company pursued progress amid stability. For the
year under review, the Company recorded main operating revenue of RMB7.409 billion, with a profit before tax
of RMB277 million and earnings per share of RMB0.24. By operating division, the oils and oilseeds division
reported main operating revenue of RMB6.472 billion with a profit before tax of RMB131 million; and the food
processing division posted operating revenue of RMB891 million with a profit before tax of RMB155 million.
Beijing Jingliang Food Co., Ltd., a swapped-in asset in a major asset restructuring, registered operating revenue of
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018 (Summary)
RMB7.409 billion, a profit before tax of RMB297 million and a net profit attributable to the Company as the
parent before exceptional items of RMB164 million, fulfilling its 2018 annual profit commitment.
(2) Major Results Achieved
A. Stable and Smooth Operation of Oils and Oilseeds Division
In 2018, the Sino-US trade friction continued to escalate, and the Company began to purchase most raw materials
from Brazil. The costs of the Company in operating increased significantly because of the Brazilian soybeans’
limited supplying season, wide quality range and storage difficulty. Therefore, the oils and oilseeds division took
the initiative to adjust operating strategies, gave play to its industrial chain advantage, and strengthened every link
of the industrial china, so as to offset the hit by the trade war. For 2018, the oils and oilseeds division recorded
main operating revenue of RMB6.472 billion and a profit before tax of RMB131 million, approximately flat with
last year. Firstly, the platform effect has gradually appeared. In terms of the oils and oilseeds division, five major
platforms have been established to effectively integrate various resources and improve the efficiency, including
Risk Control and R&D, Operation of Stocks, Import and Export Trade, Production Management and Product
Marketing. Under the impact of the Sino-US trade war, the five major platforms can support each other and share
various information in order to maximally mitigate the trade war’s impact on various enterprises specialized in
oilseed squeezing. For example, Jingliang Tianjin is capable of squeezing soybeans over 1 million tons in a year
with a profit before tax of RMB30.61 million. Secondly, the structure of small-packed products has been
continuously optimized. As the sales volume of high value-added oils including sunflower oil, linseed oil, olive
oil, non-GMO soybean oil increases 11%, the sales accounts for over 50% for the first time; the sales volume of
ordinary soybean oils with relatively low gross profit rate declines 15% on the year-on-year basis. However, the
adjustment of product structure directly improves the operating benefits, and the profit created by small-packed
oils has largely increased when compared to that last year. Thirdly, the trade business has made a steady progress.
In terms of the oils and oilseeds trade, the future transaction and the stock transaction are combined and the
research on the market is strengthened by using innovative management means to fend off various operating risks.
As a result, the annual sales of oils and oilseeds reached 470,000 tons with the sales revenue of RMB2 billion and
a profit before tax of RMB32.7 million.
B. The Steady-state Growth of the Food Division
In 2018, the food processing division recorded main operating revenue of RMB891 million with the year-on-year
growth of 7.47% and a profit before tax of RMB155 million with the year-on-year growth of 13.60% in the case
of continuous influx of strategic competitors and the increased competition in the terminal market, remaining a
steady development momentum. The snack food business adhered to the “Differentiated Asymmetric Competition
Strategy”, deepened the model of “Professional Production + Cultural Creativity + Internet”, as well as
implemented quality product and product transition strategies. As a result, for 2018, the snack food business
reported operating revenue of RMB816 million, up 5.87% year-on-year; and a profit before tax of RMB151
million, representing a 13.07% growth as compared to last year. Meanwhile, thanks to greater efforts in other
cities and product development, as well as the proactive efforts in expanding retail channels, the bread processing
business posted operating revenue of RMB77.26 million, up 26.86% year-on-year.
C. Steady Development of Land Restoration Business
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018 (Summary)
In 2018, No. 1 Document of the Central Committee of the Communist Party of China and the Rural Work
Conference proposed the land restoration and rural complex construction, and the rural revitalization strategy also
mentioned the national strategy, which is an important opportunity for enterprises to enter this field. First, for
Xinyi Yaowan Town project, corresponding equity structure adjustment was made and Shanghai Heheng
Management Consulting Co., Ltd. was involved as a wholly-owned subsidiary of Golden Concord Holdings
Limited (GCL Group). By virtue of obvious advantages in professional operation, it could facilitate the project’s
construction while meeting high standards and achieving high efficiency. Second, for Tangshan Caofeidian
Project, the operation is relatively simple as it is the restoration of mud flat land. At present, the project has been
approved by the Land and Resources Department of Tangshan, and is undergoing the construction bidding. The
project is expected to commence at the end of March in 2019. Subsequently, it’s required to accelerate the
construction of the project, the government’s acceptance and the declaration and sales of indicators of cultivated
land. It is expected to make profits in 2019.
D. Stable and Orderly Basic Management Work
Standardized operation is the basis for the sustainable and healthy development of listed companies. The
Company insists on effectively combining regulatory requirements with corporate operations to form a
standardized and efficient management and control system. First, the Company establishes and improves its
institutional system and has established a complementary system in accordance with the company’s articles of
association, regulations of shareholders’ meeting, board of directors and board of supervisors, company level and
department level. Second, the Company adheres to the economic analysis and the key work supervision mechanism,
always sticks to the monthly and quarterly analysis of its business operation, researches solutions and supervises
job schedule, which has effectively guaranteed the fulfillment of annual operating indicators; according to The
Supervision Work Procedures, various key works must be supervised by means of weekly supervision, monthly
scheduling, quarterly inspection and annual evaluation to effectively guarantee the fulfillment of various works in
the year. Third, the effect of assessment and incentives has been revealed. The penetration-type and full
coverage-type method have been applied to assess various subsidiaries and cover all team members and senior
executives above directors, in which way, the net profit indicators will be strengthened, and the corporate
performance will be combined with the individual performance. The strict assessment based on indicators has
effectively stimulated the enthusiasm of the management team in making greater achievement.
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
Gross profit
Product category Operating revenue Operating profit operating revenue operating profit gross profit
margin
(%) (%) margin (%)
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018 (Summary)
Oils and oilseeds 6,471,890,047.04 351,838,500.55 5.44% -1.75% 7.92% 0.49%
Food processing 890,987,143.21 278,908,008.83 31.30% 7.47% 12.43% 1.38%
4. Business Seasonality that Calls for Special Attention
□ 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
7. Matters Related to Financial Reporting
(1) YoY Changes to Accounting Policies, Accounting Estimates or Measurement Methods
√ Applicable □ Not applicable
As per the Notice of the Ministry of Finance on Revising and Issuing the Format of 2018 Annual Financial
Statements of General Enterprises (CK[2018] No.15), the Company adjusted accordingly the format of its
financial statements, as well as the comparative data.
(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
Compared with 2017, there are two new subsidiaries included in the consolidated financial statements of 2018:
Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. and Jingliang (Caofeidian) Agricultural
Development Co., Ltd.
Hainan Jingliang Holdings Co., Ltd.
March 30 , 2019
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