Changchai Company, Limited Annual Report 2019 (Summary)
Stock Code: 000570, 200570 Stock Name: Changchai, Changchai-B Announcement No. 2020-025
CHANGCHAI COMPANY, LIMITED
ANNUAL REPORT 2019 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the 2019 Annual Report of Changchai Company, Limited (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 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.
Part II Key Corporate Information
1. Stock Profile
Changchai，
Stock name Stock code 000570, 200570
Changchai-B
Stock exchange for stock
Shenzhen Stock Exchange
listing
Contact information Board Secretary Securities Representative
Name He Jianjiang
123 Huaide Middle Road,
Address
Changzhou, Jiangsu, China
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Changchai Company, Limited Annual Report 2019 (Summary)
Fax （86）519-86630954
Tel. （86）519-68683155
Email address cchjj@changchai.com
2. Principal Activities or Products in the Reporting Period
As a manufacturer, we specialize in the manufacture and sale of diesel engines, diesel engine fittings and
castings, gasoline engines, gasoline engine fittings, rotovators, walking tractors, molds and jigs as well as the
assembly and sale of diesel engine and gasoline engine supporting sets.
We mainly manufacture and sell small and medium-sized single-cylinder and multi-cylinder diesel engines
under the brand of “Changchai” which are often used in tractors, combine-harvesters, light commercial vehicles,
agriculture equipment, small-sized engineering machinery, generator sets, ship machines, etc.
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
2019-over-2018
2019 2018 2017
change (%)
Operating revenue 2,040,133,717.30 2,132,902,718.60 -4.35% 2,423,058,958.29
Net profit attributable to the
listed company’s 24,934,586.11 62,021,374.04 -59.80% 46,431,302.73
shareholders
Net profit attributable to the
listed company’s
14,376,783.21 -43,333,196.13 - 18,818,435.16
shareholders before
exceptional gains and losses
Net cash generated
from/used in operating -20,542,857.52 273,819,526.89 - -121,669,279.39
activities
Basic earnings per share
0.04 0.11 -63.64% 0.08
(RMB/share)
Diluted earnings per share
0.04 0.11 -63.64% 0.08
(RMB/share)
Weighted average return on
1.20% 2.84% -1.64% 2.00%
equity (%)
Change of 31
December 2019
31 December 31 December 31 December
over 31
2019 2018 2017
December 2018
(%)
Total assets 3,484,975,990.48 3,542,019,195.75 -1.61% 3,722,905,285.05
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Changchai Company, Limited Annual Report 2019 (Summary)
Equity attributable to the
listed company’s 2,109,239,597.94 2,043,308,026.74 3.23% 2,246,896,857.86
shareholders
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 557,670,611.48 558,159,234.11 460,579,449.28 463,724,422.4
Net profit attributable to the
2,518,025.10 16,539,999.97 950,668.62 4,925,892.42
listed company’s shareholders
Net profit attributable to the
listed company’s shareholders
1,083,678.62 13,143,476.97 197,704.53 -48,076.91
before exceptional gains and
losses
Net cash generated from/used in
-63,832,631.41 -90,395,073.36 -23,645,425.75 157,330,273.00
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
ordinary
Number of shareholders
Number of shareholders
preferred with resumed
ordinary at the
50,382 48,072 shareholders 0 voting rights at 0
shareholder month-end
with resumed the month-end
s prior to the
voting rights prior to the
disclosure of
disclosure of this
this Report
Report
Top 10 unrestricted shareholders
Shareh Shares in pledge or
Total shares
Name of Nature of olding frozen
held at the Restricted shares held
shareholder shareholder percent
period-end Status Shares
age
常州投资
集团有限 国有法人 30.43% 170,845,236
公司
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Changchai Company, Limited Annual Report 2019 (Summary)
KGI ASIA
境外法人 0.57% 3,189,845
LIMITED
雷延琴 境内自然人 0.39% 2,181,447
高粉怀 境内自然人 0.35% 1,950,000
胡文勇 境内自然人 0.28% 1,561,866
黄国良 境内自然人 0.27% 1,528,891
黎穗南 境内自然人 0.27% 1,507,800
周勇 境内自然人 0.27% 1,500,000
薛鸿 境内自然人 0.23% 1,310,900
陶晓芳 境内自然人 0.22% 1,230,000
It is unknown whether there is among the top 10 public shareholders and the top
Related or acting-in-concert
10 unrestricted public shareholders any related parties or acting-in-concert
parties among the
parties as defined in the Administrative Measures for Information Regarding
shareholders above
Shareholding Alteration.
Top 10 ordinary
The shareholders Lei Yanqin and Gao Fenhuai respectively held 2,017,347
shareholders involved in
shares and 1,950,000 shares of the Company through their credit accounts.
securities margin trading
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
(3) Ownership and Control Relations between the Actual Controller and the Company
According to the document of Changzhou Municipal People's Government (CZF[2006] No. 62]),the
controlling shareholder Changzhou Investment Group Co., Ltd. is the enterprise to perform the investor role for
the State-owned Assets Supervision and Administration Commission of Changzhou Municipal People’s
Government as authorized by Changzhou Municipal People’s Government. Thus, the State-owned Assets
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Changchai Company, Limited Annual Report 2019 (Summary)
Supervision and Administration Commission of Changzhou Municipal People’s Government is the actual
controller of the Company.
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.
In 2019, China’s economic situation was extremely severe, with much greater risks and challenges at home
and abroad. The agricultural machinery market remained under depression due to multiple factors such as changes
to the agricultural subsidy policy, stricter emission regulations for diesel engines, more stringent inspection of
safety and environmental protection, fluctuating prices of raw materials, weaker purchasing power of farmers and
the China-U.S. trade war. Amid the deep change in the agricultural machinery industry and the harsh market
environment, the Company formulated effective operating strategies, refined the product mix, worked on segment
markets, strengthened quality control and enhanced internal management. As a result, despite a decreasing output
and sales volume in the industry as a whole, the Company managed to maintain stable and orderly development.
Certain business indicators such as the sales volume decreased, but slower than the industry average. During the
Reporting Period, the Company sold 675,000 units of diesel engines, gasoline engines and related generator sets,
including 138,100 units of gasoline engines, generating total sales revenue of RMB2,040,133,717.30, a drop of
4.35% year-on-year.
In terms of product development and supporting areas, the Company has completed the development of
several models of single-cylinder common rail diesel engines to fully meet the State III emission standards of
three-wheels and State IV emission standards of non-road mobile machinery. The Company has established
all-round connection with industrial mainstream brands for products of State IV standards. For the key product
4G36V16 diesel, it has completed the calibration of emission source machines for multiple after-treatment modes
and multiple power ranges, with a diversity of plant protection tractors as supporting products. The Company
developed supporting resources on all fronts, completed supporting promotion for a number of product models
and achieved marked growth in market alignment.
In terms of market service, the Company further optimized and expanded the franchised dealer team,
strengthened the franchised dealer network, enhanced franchise loyalty, improved the aftermarket sales and
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Changchai Company, Limited Annual Report 2019 (Summary)
service network, developed new dealers and beefed up the sales and management of accessories. The Company
continued to enhance service quality, fully promoted the experience of modular management of busy farming
seasons, intensified training for market service personnel, main engine plants and dealers, explored the service
application of Internet+, drove the analysis, integration and application management of quality information and
service data and improved the overall service capacity of service resources.
In terms of quality management, the Company further implemented quality projects, refined system
management and successfully passed the external review for IATF16949 and the ISO9001 quality system and the
on-site monitoring and review of CNAS. It enhanced the quality of whole machines and parts on all fronts, made
continuous efforts to improve product quality, optimized work flows in a number of aspects, including testing
equipment, product parts traceability systems and quality improvement projects, and refined processes, leading to
enhancement in product image.
In terms of internal management, the Company strengthened production organization and management
according to the actual situation, continuously improved the supply system, intensified delicacy management of
cost and inventory, and promoted cost reduction and expenditure minimization as a response to the continuous
market downturn, leading to substantial achievements in cost reduction and efficiency enhancement and
improvements in production and operation efficiency.
During the Reporting Period, the Company established Jiangsu Changchai Machinery Co., Ltd. to implement
light engine and casting relocation projects. The new subsidiary has a registered capital of RMB300 million with
RMB10 million already paid up. Early-stage work of the project, including feasibility demonstration, planning,
design and registration, has been completed. So far, construction has commenced. The project is planned to be
completed and put into operation in 2021.
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
Product Gross profit
Operating revenue Operating profit operating operating gross profit
category margin
revenue (%) profit (%) margin (%)
Diesel
1,856,130,365.33 295,488,170.00 15.92% -4.59% -5.65% 0.95%
engines
Gasoline
133,936,656.91 25,257,714.51 18.86% 2.77% -4.68% 6.34%
engines
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Changchai Company, Limited Annual Report 2019 (Summary)
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
1. Changes to accounting policies
Changes to the accounting policies and why Approval process Remark
The Notice on Revising and Issuing the Formats of 2019
Financial Statements for General Enterprises issued by the On 27 August 2019, the
Ministry of Finance on 30 April 2019 requires the Company held the 20th
companies which have implemented the new standards Meeting of the 8th Board
governing financial instruments but not the new standards of Directors and the 16th Refer to (1) of
governing revenue and lease or companies which have Meeting of the 8th other notes for
implemented the new standards governing financial Supervisory Committee details
instruments and revenue but not the new standards and approved the Proposal
governing lease to adjust items of financial statements in on Changes of Some
line with requirements of the Appendix 1 and Appendix 2 Accounting Policies
of the Notice.
The Company starts to implement the Accounting
Standards for Business Enterprises No.22-Recognition and
Measurement of Financial Instruments, Accounting
Standards for Business Enterprises No.23-Transfer of
On 9 April 2019, the
Financial Assets, Accounting Standards for Business
Company held the 17th
Enterprises No.24-Hedge Accounting and Accounting
Meeting of the 8th Board
Standards for Business Enterprises No.37-Presentation of
of Directors and 13th Refer to (2) of
Financial Instruments, which revised and issued by the
Meeting of the 8th other notes for
Ministry of Finance in March 2017 and hereinafter
Supervisory Committee details
collectively referred to as new standards governing
and approved the Proposal
financial instruments since 1 January 2019 which stipulate
on Changes in Some
that the company shall classify and measure financial
Accounting Policies
instruments in accordance with regulations on the
execution date, when the data of comparative financial
statements of prior years do not comply with the new
standards, no adjustment is made by the Company.
Other notes:
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Changchai Company, Limited Annual Report 2019 (Summary)
(1) Influence of Changes in Formats of Financial statements
Affected items in the consolidated balance sheet and amount thereof:
31 December 2018 1 January 2019
Notes receivable and Notes receivable 495,370,782.47
accounts receivable 874,229,941.58
Accounts receivable 378,859,159.11
Notes payable and accounts Notes payable 438,375,400.00
payable 1,030,130,275.77
Accounts payable 591,754,875.77
Affected items in the balance sheet of the Company as the parent and amount thereof:
31 December 2018 1 January 2019
Notes receivable and Notes receivable 490,519,795.91
accounts receivable 790,877,079.72
Accounts receivable 300,357,283.81
Notes payable and Notes payable 425,995,400.00
987,550,797.44
accounts payable Accounts payable 561,555,397.44
(2) Influence of Execution of New Standards Governing Financial Instruments
Affected items in the consolidated balance sheet and amount thereof:
Affected amount
Item 31 December 2018 Affected by Affected by 1 January 2019
classification and impairment of
measurement financial assets
Other current assets 34,357,608.97 -8,253,873.41 26,103,735.56
Held-for-trading
8,253,873.41 8,253,873.41
financial assets
Available-for-sale
498,851,369.49 -498,851,369.49
financial assets
Investment in other
472,150,000.00 1,210,000.00 470,940,000.00
equity instruments
Other non-current
27,911,369.49 27,911,369.49
financial assets
Other non-current assets -4,000,000.00 4,000,000.00
Investment in debt
4,000,000.00 -4,000,000.00
obligations
Affected items in the balance sheet of the Company as the parent and amount thereof:
Affected amount
Item 31 December 2018 Affected by Affected by 1 January 2019
classification and impairment of
measurement financial assets
Available-for-sale
470,940,000.00 -470,940,000.00
financial assets
Investment in other
471,350,000.00 410,000.00 470,940,000.00
equity instruments
Other non-current assets -4,000,000.00 4,000,000.00
Investment in debt
4,000,000.00 -4,000,000.00
obligations
2. Changes to accounting estimates
No such cases for the Reporting Period.
3. Changes to accounting measurement methods
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Changchai Company, Limited Annual Report 2019 (Summary)
No such cases for the Reporting Period.
(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
Changchai Company, Limited (hereinafter referred to as “the Company”) reviewed and approved the
Proposal on Establishing the Wholly-owned Subsidiary to Implement the Project of Producing Light Engines and
Casting on the extraordinary board meeting held on 25 February 2019. The Board agreed the Company to invest
RMB0.3 billion for establishing the wholly-owned subsidiary to implement the project of producing light engines
and casting. For details, please refer to the Announcement on the External Investment and Intention of
Establishing the Wholly-owned Subsidiary (No.：2019-004) disclosed on Securities Times, Hong Kong Ta Kung
Pao and Cninfo on 26 February 2019. On 6 March 2019, the wholly-owned subsidiary completed the registration
procedures and obtained the Business License issued by the Administrative Examination and Approval Authority
of Changzhou State Hi-Tech Industry Development Zone (Xinbei District). For more details, please refer to the
Announcement on the Progress of External investment and Intention of Establishing the Wholly-owned
Subsidiary (No.: 2019-005) disclosed on Securities Times, Hong Kong Ta Kung Pao and Cninfo on 7 March 2019.
Therefore, the subsidiary Jiangsu Changchai Machinery Co., Ltd. has been newly added to the consolidated
financial statements of the Reporting Period.
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