Changchai Company, Limited Third Quarter Report 2018 (Summary)
Stock Code: 000570, 200570 Stock Name: Changchai, Changchai-B Announcement No. 2018-027
CHANGCHAI COMPANY, LIMITED
THIRD QUARTER REPORT 2018 (SUMMARY)
Part I Important Notes
The Board of Directors (or the “Board”), the Supervisory Committee as well as the
directors, supervisors and senior management of Changchai Company, Limited (together with
its consolidated subsidiaries, the “Company”, except where the context otherwise requires)
hereby guarantee the factuality, accuracy and completeness of the contents of this Report and
its summary, and shall be jointly and severally liable for any misrepresentations, misleading
statements or material omissions therein.
All the Company’s directors have attended the Board meeting for the review of this
Report and its summary.
Shi Xinkun, the Company’s legal representative, Zhang Xin, the Company’s General
Manager, and Jiang He, head of the Company’s financial department (equivalent to financial
manager) hereby guarantee that the financial statements carried in this Report are factual,
accurate and complete.
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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Changchai Company, Limited Third Quarter Report 2018 (Summary)
Part II Key Corporate Information
I Key Consolidated Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
September 30, 2018 December 31, 2017 Change
Total assets (RMB) 3,756,252,247.55 3,722,905,285.05 0.90%
Equity attributable to owners of the parent
2,109,129,803.12 2,246,896,857.86 -6.13%
(RMB)
July-September January-Septemb YoY
YoY change
2018 er 2018 change
Net sales (RMB) 432,605,495.58 -21.55% 1,619,366,387.84 -12.91%
Net margin attributable to owners of the parent
4,670,842.38 52.03% 23,309,400.04 -45.48%
(RMB)
Net margin attributable to owners of the parent
-5,982,192.17 — 11,280,631.08 -47.29%
before exceptional gains and losses (RMB)
Net cash from operating activities (RMB) — — -54,251,797.59 —
Basic earnings per share (RMB/share) 0.01 0.00% 0.04 -50.00%
Diluted earnings per share (RMB/share) 0.01 0.00% 0.04 -50.00%
Weighted average return on equity (%) 0.22% 0.09% 1.05% -0.80%
Exceptional gains and losses:
√ Applicable □ Not applicable
Unit: RMB
Item Q1-Q3 2018 Note
In July 2018, the company
recovered the entrusted loan of
1,000.00 million yuan which had
fully accrued the asset impairment
Gain or loss on disposal of non-current assets
12,044,376.37 provision. For details, please refer
(inclusive of impairment allowance write-offs)
to the company's announcement on
recovering part of the entrusted loan
disclosed on July 13, 2018
(announcement number: 2018-018).
Government subsidies charged to current profit or
loss (exclusive of government subsidies given in the 475,400.00
Company’s ordinary course of business at fixed
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Changchai Company, Limited Third Quarter Report 2018 (Summary)
quotas or amounts as per government’s uniform
standards)
Capital occupation charges on non-financial
573,182.00
enterprises that are charged to current profit or loss
Gain or loss on fair-value changes in trading financial
assets and liabilities & investment income from
disposal of trading financial assets and liabilities and
455,319.86
available-for-sale financial assets (exclusive of
effective portion of hedges that arise in the
Company’s ordinary course of business)
Other gains and losses that meet definition of
656,800.26
exceptional gain/loss
Less: Income tax effects 2,176,309.53
Total 12,028,768.96 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
II Total Number of Shareholders and Holdings of Top 10 Shareholders at 30 September 2018
1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders
Unit: share
Number of preferred shareholders with
Number of ordinary shareholders 49,459 0
resumed voting rights (if any)
Top 10 shareholders
Shares in
Sharehol Restri
pledge or
ding Number of cted
Name of shareholder Nature of shareholder frozen
percenta shares share
Stat Shar
ge s
us es
State-owned Assets
Supervision and
Administration Commission of State-owned legal person 30.43% 170,845,236
Changzhou Municipal People’s
Government
KGI Asia Limited Foreign legal person 0.57% 3,189,845
Wang Jianwei Domestic natural person 0.34% 1,934,500
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Changchai Company, Limited Third Quarter Report 2018 (Summary)
Zhang Ruirong Domestic natural person 0.32% 1,789,800
Wan Peizhong Domestic natural person 0.29% 1,645,800
Huang Guoliang Domestic natural person 0.27% 1,528,891
Hu Wenyong Domestic natural person 0.27% 1,500,066
Li Suinan Domestic natural person 0.24% 1,356,000
Vanguard Total International
Foreign legal person 0.23% 1,292,594
Stock Index Fund
Xiong Shunbao Domestic natural person 0.23% 1,282,251
Top 10 unrestricted shareholders
Unrestricted Shares by type
Name of shareholder
shares Type Shares
State-owned Assets Supervision and
Administration Commission of Changzhou 170,845,236 RMB-denominated ordinary stock 170,845,236
Municipal People’s Government
KGI Asia Limited 3,189,845 Domestically listed foreign stock 3,189,845
Wang Jianwei 1,934,500 RMB-denominated ordinary stock 1,934,500
Zhang Ruirong 1,789,800 RMB-denominated ordinary stock 1,789,800
Wan Peizhong 1,645,800 RMB-denominated ordinary stock 1,645,800
Huang Guoliang 1,528,891 Domestically listed foreign stock 1,528,891
Hu Wenyong 1,500,066 Domestically listed foreign stock 1,500,066
Li Suinan 1,356,000 Domestically listed foreign stock 1,356,000
Vanguard Total International Stock Index
1,292,594 Domestically listed foreign stock 1,292,594
Fund
Xiong Shunbao 1,282,251 RMB-denominated ordinary stock 1,282,251
It is unknown whether there is any connected party or
acting-in-concert party as defined in the Measures for the
Related or acting-in-concert parties among
Administration of Disclosure of Shareholder Equity Changes of
shareholders above
Listed Companies among the top 10 tradable share holders or the
top 10 unrestricted tradable share holders.
Top 10 ordinary shareholders involved in
N/A
securities margin trading (if any)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary
shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.
2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
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Changchai Company, Limited Third Quarter Report 2018 (Summary)
□ Applicable √ Not applicable
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Changchai Company, Limited Third Quarter Report 2018 (Summary)
Part III Significant Events
I Changes in Key Consolidated Financial Statement Line Items and Explanation of why
√ Applicable □ Not applicable
1. Consolidated Balance Sheet Items as at 30 September 2018
Item 30 September 2018 31 December 2017
Change (%) Explanation of why
(RMB) (RMB)
Notes and accounts 1,485,050,866.65 1,108,415,299.12 33.98% During Q1~Q3 2018, credit sale was
receivable properly carried out to extend market
space, and most multi-cylinder engine
customers were supporting
manufacturers for bigger enterprises,
which means relatively long account
ages for the Company，resulting in an
increase of 117.69% in receivables
compared to the beginning.
Other receivables 21,267,589.07 5,794,971.22 267.00% Temporary loans granted by subsidiary
Changzhou Housheng Investment Co.,
Ltd. to Xuzhou Huadong Foundry
Factory, etc.
Other current assets 23,104,987.78 42,540,184.05 -45.69% Decrease in overpaid VAT
Payroll payable 24,782,530.80 51,247,112.66 -51.64% Salaries and bonuses accrued in the nine
months ended 30 September 2017 were
mostly paid in the corresponding period
of the current year
2. Consolidated Income Statement Items for Q1~Q3 2018
Q1~Q3 2018 Q1~Q3 2017 Change
Item Explanation of why
(RMB) (RMB) (%)
Finance costs -4,311,945.83 -1,287,876.55 —— Increase in foreign exchange income resulted
from exchange rate fluctuations
Asset impairment -2,531,847.48 9,150,039.27 —— Allowances for doubtful accounts receivable
loss recorded based on aging led to an increase in
asset impairment loss, while the collection of
entrusted loans with full-amount impairment
allowances resulted in writedowns in this
item
Investment income 8,053,269.86 13,407,484.45 -39.93% Decline in dividends from Foton Motor
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Changchai Company, Limited Third Quarter Report 2018 (Summary)
Non-operating 2,830,716.11 25,903,268.01 -89.07% Last year saw the non-operating income
income arising from including Changzhou Fuji
Changchai Robin Gasoline Engine Co., Ltd.,
whose equity interests had been acquired by
the Company at a discount, into the
consolidated financial statements
Non-operating 1,698,515.85 7,979,840.88 -78.71% Greater loss on the disposal of inactive
expense materials during the same period of last year
Net profit 23,643,295.60 43,305,505.88 -45.40% Last year saw the non-operating income
arising from including Changzhou Fuji
Changchai Robin Gasoline Engine Co., Ltd.,
whose equity interests had been acquired by
the Company at a discount, into the
consolidated financial statements
Other -144,235,225.00 -41,677,200.00 —— Significant decline in gains on fair value
comprehensive changes of available-for-sale financial assets
income, net of tax
3. Consolidated Cash Flow Statement Items for Q1~Q3 2018
Q1~Q3 2018 Q1~Q3 2017 Change
Item Explanation of why
(RMB) (RMB) (%)
Tax rebates 39,981,450.76 24,619,585.42 62.40% Mainly for the report period received more
export tax rebates.
Taxes paid 21,038,574.94 30,890,368.40 -31.89% Changes in sales and profit, as well as the
effect of the government’s tax cuts
Net cash generated -23,421,616.03 -63,559,009.38 —— Significant decline in payments for
from/used in acquisition of fixed assets, intangible assets
investing activities and other long-lived assets
Net cash generated
Mainly for the last reporting period
from/used in -16,892,465.30 21,794,509.81 ——
borrowings increased more
financing activities
II Progress, Influence and Solutions Associated with Significant Events
√ Applicable □ Not applicable
The controlling shareholder of the Company—State-owned Assets Supervision and Administration
Commission of Changzhou Municipal Government (hereinafter referred to as “Changzhou SASAC”) and
Changzhou Investment Group Co., Ltd. signed the Agreement on Gratuitous Transfer of State-owned Shares Held
by Changchai Company Limited on 16 August 2018, in which the Changzhou SASAC intended to gratuitously
transfer all 170,845,236 shares in Changchai Company Limited held by it to Changzhou Investment Group Co.,
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Changchai Company, Limited Third Quarter Report 2018 (Summary)
Ltd. The issue has been approved by Changzhou People’s Government and the State-owned Assets Supervision
and Administration Commission of Jiangsu Provincial Government. In addition, China securities regulatory
commission (CSRC) has agreed to exempt Changzhou Investment Group Co., Ltd. from the tender offer
obligation for holding the Company’s shares due to gratuitous transfer. The issue is currently going through the
relevant equity transfer procedures. For more details, please refer to the Indicative Announcement on Gratuitous
Transfer of State-owned Shares Held by the Controlling Shareholder (Announcement No.: 2018-015),
Announcement on the Progress of Gratuitous Transfer of State-owned Shares Held by the Controlling Shareholder
(Announcement No.: 2018-020) and Announcement on the Progress of Gratuitous Transfer of State-owned Shares
Held by the Controlling Shareholder (Announcement No.: 2018-025) disclosed by the Company respectively on 1
June 2018, 17 August 2018 and 5 September 2018. After the completion of the transfer, Changzhou Investment
Group Co., Ltd. will be the controlling shareholder of the Company and the actual controller of the Company will
not change.
Overview of significant event Disclosure date Related announcement
1 June 2018 2018-015
Gratuitous transfer of state-owned 16 August 2018 2018-020
shares 5 September 2018 2018-025
20 October 2018 2018-026
III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Parties, Failed to Fulfill on Time during
Reporting Period
√ Applicable □ Not applicable
Date of Period
Type of
Commitme commit of Fulfil
Commitment commit Contents
nt maker ment commit lment
ment
making ment
Rewards Plan for Shareholders in
Next Three Years(2017-2019)
Under the premise of positive
distributive profit (remaining
after-tax profits after making up for Imple
Other
the loss and extracting for the ment
commitments Changchai Year
common reserves) in this year or 11 May in a
made to Company, bonus 2017-2
half year and abundant money flow 2017 norm
minority Limited 019
and no influence on the following-up al
shareholders
going concern after cash bonus, the way
profits allocated by cash every year
shouldn’t be lower than 10% of the
allocable profits from parent
company. Meanwhile, the
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Changchai Company, Limited Third Quarter Report 2018 (Summary)
accumulated allocable profits by
cash in the arbitrary continuous three
accounting years should not be lower
than 30% of the annual average
allocable profits in those three years.
Fulfilled on time Yes
When the commitment was not completely fulfilled at maturity, the specific
N/A
reasons and following work plan shall be given
IV 2018 Annual Operating Performance Forecast
Warning of a forecast loss on or a forecast significant year-on-year change in net profit for year 2018, as well as
explanation of why:
□ Applicable √ Not applicable
V Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Wealth Management Entrustment
√ Applicable □ Not applicable
Unit: RMB’0,000 (in RMB ten thousand yuan)
Outstanding amount Overdue
Type of wealth management Funding source Principal
before maturity amount
Wealth management product purchased
Self-funded 1,600 1,600 0
from securities company
Total 1,600 1,600 0
High-risk wealth management entrustments with amounts that are individually significant, or with low security,
low liquidity, or no protection of the principal:
□ Applicable √ Not applicable
Wealth management entrustments with possible impairments including an expectedly unrecoverable principal:
□ Applicable √ Not applicable
VII Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Changchai Company, Limited Third Quarter Report 2018 (Summary)
VIII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc.
during Reporting Period
√ Applicable □ Not applicable
Date of visit Way of visit Type of visitor About
Progress of lithium battery diaphragm project invested
13 August 2018 Other Individual
with industry funds set up by the Company
18 July 2018 Other Individual Repurchase of B-share
IX Irregularities in Provision of Guarantees for External Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Occupation of the Company’s Capital by Controlling Shareholder or Its Related Parties for
Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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