Abstract of the 2014 Semi-annual Report of BOE Technology Group Co., Ltd.
Stock code: 200725 Stock abbreviation: BOE B Announcement No.: 2014-050
BOE TECHNOLOGY GROUP CO., LTD.
Abstract of the 2014 Semi-annual Report
1. Important reminders
（1）
This abstract is based on the full text of the semi-annual report. For more details, investors are suggested to read the full text
disclosed at the same time with this abstract on http://www.cninfo.com.cn, the website of Shenzhen Stock Exchange or any other
website designated by CSRC.
This report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version
shall prevail.
（2）Company profile
Stock abbreviation BOE A, BOE B Stock code 000725, 200725
Stock exchange listed with Shenzhen Stock Exchange
Contact information Company Secretary Securities Affairs Representative
Name Liu Hongfeng Xiao Zhaoxiong
Tel. 010－64318888 ext. 010－64318888 ext.
Fax 010－64366264 010－64366264
E-mail liuhongfeng@boe.com.cn xiaozhaoxiong@boe.com.cn
2. Financial highlights and change of shareholders
（1）Financial highlights
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or
correction of any accounting error?
□ Yes √ No
Same period of last
Items Reporting period YoY +/-（％）
year
Operating revenues (RMB Yuan) 16,113,171,584.00 16,254,326,067.00 -0.87%
Net profit attributable to shareholders
1,041,635,714.00 859,288,893.00 21.22%
of the Company (RMB Yuan)
Net profit attributable to shareholders
of the Company after extraordinary 550,289,218.00 767,426,780.00 -28.29%
gains and losses (RMB Yuan)
Net cash flows from operating
3,253,640,502.00 3,727,889,361.00 -12.72%
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) 0.050 0.064 -21.88%
Diluted EPS (RMB Yuan/share) 0.050 0.064 -21.88%
Weighted average ROE (%) 2.38% 3.26% -0.88%
As at the end of last
Items As at the end of the reporting period +/-（％）
year
Total assets (RMB Yuan) 127,935,205,029.00 92,538,451,492.00 38.25%
Net assets attributable to shareholders
74,357,433,156.00 28,251,815,361.00 163.20%
of the Company (RMB Yuan)
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Abstract of the 2014 Semi-annual Report of BOE Technology Group Co., Ltd.
（2） Shareholdings of the top 10 common shareholders
Total number of common
shareholders at the end of the 385,963 shareholders (including 348,808 A-share holders and 37,155 B-share holders)
reporting period
Shareholdings of the top 10 common shareholders
Shareholding Total shares Number of Pledged or frozen shares
Nature of
Name of shareholder percentage held at the restricted Status of Number of
shareholder
(%) period-end shares held shares shares
Beijing State-owned Capital State-owned
11.51% 4,063,333,333 4,063,333,333
Management Center Corporation
Chongqing Capital Photoelectricity State-owned
8.50% 3,000,000,000 3,000,000,000 Pledged 955,000,000
Investment Co., Ltd. Corporation
Hefei Jianxiang Investment Co., State-owned
8.10% 2,857,142,857 2,857,142,857
Ltd. Corporation
Minsheng Royal Fund－CMBC－
Ping An Trust－Ping An Wealth－ Other 6.75% 2,380,952,380 2,380,952,380
Huitai No. 66 Assembled Funds
Trust Plan
Hua An Fund－HXB－Ping An
Trust－Ping An Wealth * Huitai Other 6.75% 2,380,952,380 2,380,952,380
No. 72 Assembled Funds Trust
Hua An Fund－ICBC－Zhongrong
International Trust－Zhongrong－ Other 5.40% 1,904,761,904 1,904,761,904
RJ No. 1 Assembled Funds Trust
Plan
Beijng E-TOWN International
State-owned
Investment & Development Co., 4.21% 1,484,159,406 0
Corporation
Ltd.
Ping An Dahua Fund－Ping An
Bank － Ping An Golden Orange Other 4.05% 1,428,571,428 1,428,571,428
Wealth No. 31 Asset Management
Plan
Ping An Dahua Fund－Ping An
Bank－Ping An Golden Orange Other 4.05% 1,428,571,428 1,428,571,428
Wealth No. 34 Asset Management
Plan
Shenzhen Ping An New Capital
Other 3.37% 1,190,476,190 1,190,476,190
Co., Ltd.
1. When the Company completed private offering of shares in 2010, Beijing
E-TOWN International Investment & Development Co., Ltd. transferred all
shares directly held to Beijing BOE Investment & Development Co., Ltd. for
management, then BOE Investment acquired the attached rights of the shares
attributable to other shareholders in accordance with current effective laws and
rules of the Company excluding right of disposition such as transfer, donation,
mortgage etc. and usufruct (including claim for profit distribution and claim for
Explanation on associated relationship or persons retained assets distribution).
acting in concert among the above-mentioned 2. After the non-public issuing of the Company in 2014, Beijing State-owned
shareholders Capital Operation and Management Center handed over its 70% shares to
Beijing Electronics Holdings Co., Ltd. for management through Stock
Management Protocol, and Beijing Electronics Holdings Co., Ltd. gained the
incidental shareholders’ rights except for disposing right and usufruct of the
shares, of which the rest 30% voting right maintained unanimous with Beijing
Electronics Holdings Co., Ltd. through the agreement according to
Implementation Protocol of Voting Right; Beijing Electronics Holdings Co.,
Ltd. held 66.25% equities of Beijing BOE Investment Development Co., Ltd.
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Abstract of the 2014 Semi-annual Report of BOE Technology Group Co., Ltd.
and was its controlling shareholder.
3. Except for relationship among the above shareholders, the Company is not
aware of whether the other top ten shareholders exist associated relationship or
not, or they are persons acting in concert or not.
Shareholders taking part in margin financing and
Naught
securities lending (if any)
（3）Shareholdings of the top 10 preferred share holders
□ Applicable √ Inapplicable
No preferred shares for the reporting period.
（4）Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
The controlling shareholder did not change in the reporting period.
Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
The actual controller did not change in the reporting period.
3. Discussion and analysis by the management
1）Overview
The first half of 2014 saw a mild recovery of the global economy, but quite a few uncertain and unstable factors still existed. In terms
of the industry as a whole, demand slowed down due to the economic and market environments; prices went down distinctively; and
competition was spreading from technology, production capacity, prices to customers, products, talent, intellectual property rights,
industrial chains and even business modes. With the traditional display panel still being the main competitive factor, competition for
customers became fiercer regarding the system, contents and innovative application products. Despite the sharp market fluctuations,
the fierce competition in the industry and the falling product prices, we managed to produce in a full capacity in the four production
lines and sell all the products produced. For the first half of 2014, the Company achieved operating revenues of RMB 16.1 billion
and net profit attributable to the Company of RMB 1.042 billion. The large and medium-sized products in particular contributed a lot
to the fulfillment of our business plan. In the first half of the year, we smoothly carried out a directional additional issue to raise
funds of RMB 45.7 billion. The 98”8K*4K product was successfully introduced to Japan NHK and shown in the America SID
Display Week. The production capacity and yield of the Hefei 8.5G Line went straight up and mass production was realized ahead of
schedule. The LTPS and Oxide techniques also improved steadily.
Operation of specific divisions:
A. Display device division:
A) Large and medium-sized panel division: Firstly, we deepened cooperation with strategic customers, the notebook transfer-line
products were accepted by the customers, the mainstream display products kept a leading market share and the accumulative profit of
TV products was handsome. The efforts in new application market expansion produced good results, and the see-through displays
and the 110” module gradually came to mass production and sale. Secondly, we developed 22 new products, with the products of a
high gross profit rate accounting for 36% of them. Thirdly, we deepened lean management and the production capacity of the Beijing
8.5G Line hit a record high. Fourthly, the shift to small-sized products produced remarkable results, with the product structure
improved and the proportion of products with a high gross profit rate increased. Fifthly, we enhanced the supply chain management,
and new progress was made in the key material and equipment dualization and domestication projects.
B) Medium and small-sized panel division: We solidified the customer foundation and the position of the biggest supplier. Through
the “early supplier introduction” mechanism, we achieved common interests with our customers. We designed a lot of new products
according to the customers’ needs and more samples were accepted when they were sent to customers for the first time. The
cutting-edge technology and the product innovation capability improved, quite a few high-performance cell phone screens were
developed, and a phasic breakthrough was made in the LTPS technology development. The Beijing 5G Line increased the proportion
of high-end cell phones. The Chengdu 4.5G Line pushed forward the transformation of products for vehicles, medical use and wear.
The transformation of the Hefei 6G Line towards small-sized products produced good results. The interconnection and cross-line
combined transportation mechanism among the production lines improved day by day. And the operating efficiency increased
through information sharing, centralized resource allocation, etc.
C) Electronic material division and vacuum electrical appliance division: In terms of the electronic material division, the vacuum dry
pump maintenance project went on well and was put into operation as planned, and the photoresist products of Beijing Asahi Glass
Electronics Co., Ltd. were introduced to customers. As for the vacuum electrical appliance division, it dealt with the market changes,
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Abstract of the 2014 Semi-annual Report of BOE Technology Group Co., Ltd.
vigorously developed the whole-appliance business and became a new business growth point.
B. Intellectual system division:
A) Display terminal division: The product innovative planning, design and development capability was enhanced and the product
roadmaps were made clear. Considering the market demand for products of better quality, we improved the product performance and
ensured the profitability by fully satisfying customers’ needs. The BiTV 1.0 series and the 1.1 series of products were launched
successively, and the design and development of the BiSD high-end product proceeded in an orderly manner. Joining hands with
international consulting companies, we enhanced the BOE brand through internet influence and promoted physical stores to improve
the brand image when the BiTV product was launched.
B) Lighting/photovoltaic division: The independent R&D ability was enhanced and the business mode was innovated. A lighting
series was launched and well received. We explored ambient lighting and photovoltaic system integration solutions and promoted the
quick birth of application integration innovative products.
C) OEM division: We earnestly carried out the working policy of “follow the strategy, solidify the foundation and stabilize profit”.
As a result, the business results of the large and medium-sized as well as the small and medium-sized operations improved greatly
when compared with the same period of last year.
C. Health care division
A) Professional park division: All main operating indicator objectives were fulfilled, providing a stable cash flow for the Group. The
park operation ability, the property service and the standardization management ability improved. A high-end brand park image took
shape, with recognition from the market and customers.
B) Medical care division: The designs of the top layer and the future business mode were completed. The market research and
preliminary planning for the intelligent medical care park was initiated. The planning for a digital hospital and the design and
development of medical care products proceeded as scheduled.
C) Cloud service project: The organizational structure design was completed. And the preliminary planning and design of cloud
computing products were also finished.
2）Main business analysis
Same period of last Main reasons for
Items Reporting period YoY +/-%
year change
Operating revenues 16,113,171,584.00 16,254,326,067.00 -0.87% --
Operating costs 12,630,118,473.00 12,461,334,555.00 1.35% --
Selling expenses 481,663,833.00 516,250,043.00 -6.70% --
As the new
production lines
came to massive
production and the
Group increased the
Administrative expenses 1,698,855,995.00 1,449,893,803.00 17.17% technology input,
the R&D expenses,
the labor cost, the
amortization of
intangible assets and
the like increased.
Monetary funds
increased and the
Financial expenses 106,739,572.00 193,412,657.00 -44.81% interest income
increased
accordingly.
The operating results
improved and the
Income tax expenses 156,020,200.00 23,290,836.00 569.88% enterprise income
tax increased
accordingly.
R&D inputs 934,158,103.00 885,524,040.00 5.49% --
Net cash flows from operating
3,253,640,502.00 3,727,889,361.00 -12.72% --
activities
Net cash flows from investing
-9,406,248,514.00 -7,512,653,893.00 25.21% --
activities
Net cash flows from financing The cash inflows
activities 30,604,020,368.00 12,752,152,132.00 139.99% from financing
activities increased
due to the additional
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Abstract of the 2014 Semi-annual Report of BOE Technology Group Co., Ltd.
issue.
Net increase in cash and cash
24,494,958,224.00 8,854,254,635.00 176.65% The additional issue
equivalents
3）Core competitiveness analysis
A. We optimize our business layout and steadily increase our ability for sustainable development in the future.
On the basis of solidifying and increasing the competitiveness of our display device business, we continue to explore new
development modes, look for new profit growth points and seek new opportunities for our sustainable development. In the first
half of the year, as the Hefei 8.5G Line and the Erdos 5.5G Line stepped into normal operation, the product range was further
enriched, more customers’ needs were satisfied and the overall influence and competitiveness of our display device business
were further enhanced. In terms of the intelligent system business, we launched a series of new products such as 32”FHD,
42”FHD and 55”FHD/UHD; the OEM output increased significantly year on year; and the overall competitiveness of the
business improved remarkably. Meanwhile, new business exploration produced phasic results; and the top layer design of the
medical care business was completed successfully and carried out step by step. The sound development of all the business
divisions lays a foundation for improving the internal synergistic effect and promoting business upgrading. It will also help us
achieve sustainable development in the long run.
B. Innovation creates value. Our product and technology independent innovation capability improves rapidly.
The key to survive is to improve the performance rapidly and constantly. We have always attached great importance to R&D
input and tried to increase the comprehensive technology competitiveness through constant independent product and technology
innovation. In the first half of the year, we filed 2,600 patent applications. And we now have over 20,000 valid patents in total.
We accumulate technologies and promote continuous innovation of products, which receives international recognition. The
BOE 30” Oxide AMOLED Display Screen won the 2014 CITE Innovative Product and Application Gold Award. The 98” 8K
Display Screen won the CITE Innovation Gold Award and the SID Display Week “Best in Show" Award. Besides, we have also
launched quite a few cutting-edge products. For example, the 6" LTPS cellphone screen with its pixel density reaching 500PPI,
the cellphone screen adopting the most advanced touch-sensitive technology in the industry and the thinnest and lightest
cellphone screen in the world of 0.95mm in thickness.
C. We stick to the principle of “value for both parties” and continuously enhance the ability to expand and cooperate
with strategic customers.
Upholding the policy of “in-depth cooperation, collaborative development and value for both parties”, we continue to enhance
the cooperation with customers at home and abroad, and establish a long-term stable strategic cooperation partnership with
famous brands around the world. While enhancing the cooperation with strategic customers, we constantly improve the
customer structure, enhance expansion of strategic customers and promote full production and sale of products. In the first half
of the year, we initiated an annual strategic cooperation with Konka, providing high-end LCD TV screens for it. Besides, we
kept jointly promoting new products with our strategic customers. During the CES period in 2014, we successfully conducted
joint product and brand promotions with customers, which improved the brand effect and solidified the partnership.
D. We cultivate talent hierarchically and purposefully and strengthen the human capital.
We adhere to a talent development mode of independent cultivation as the main way and new employment as a support, enhance
development of the talent ladder and develop talent in a progressive and fast manner. At the same time, we constantly improve
the organization, the flows and the mechanisms to stimulate the enthusiasm and creativity of employees. In the first half of the
year, we carried out a series of training programs to cultivate management talents and leaders. We adopted more purposeful
cultivation modes for different talents. At the same time, we paid attention to the combination of training and practice to
promote the constant improvement of the talent cultivation system.
4. Matters related to financial reporting
(1) Explain change of the accounting policies, accounting estimates and measurement methods as compared
with the financial reporting of last year
□ Applicable √ Inapplicable
The accounting policies, accounting estimates or measurement methods did not change in the reporting period.
(2) Explain retrospective restatement due to correction of significant accounting errors in the reporting
period
□ Applicable √ Inapplicable
No correction of significant accounting errors in the reporting period.
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Abstract of the 2014 Semi-annual Report of BOE Technology Group Co., Ltd.
(3) Explain change of the consolidation scope as compared with the financial reporting of last year
√ Applicable □ Inapplicable
According to
(announcement No. 2014-035) disclosed by the Company on 24 May 2014, the said equity acquisition was completed. After the
acquisition, the Company held a 51.27% stake in Chongqing BOE, making it the controlling shareholder of Chongqing BOE. As
such, Chongqing BOE was consolidated.
(4) Explanation of the Board of Directors and the Supervisory Committee concerning the “non-standard
audit report” issued by the CPAs firm for the reporting period
□ Applicable √ Inapplicable
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