2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
Stock Code: 000869, 200869 Stock Abbreviation: Changyu A, Changyu B Announcement No.:2020-Final03
Yantai Changyu Pioneer Wine Co., Ltd.
2020 Semi-annual Report Abstract
1. Important Notice
This Semi-annual Report abstract comes from the full text of Semi-annual Report. If investors desire
to comprehensively understand the Company’s operating results, financial situation and future
development plan, please read the Semi-annual Report on the media specified by the China
Securities Regulatory Commission.
Except following directors, all other directors have personally attended the meeting for deliberating
this Semi-annual Report.
Director name with Director post with Reason for non-present Name of mandatory
non-present in person non-present in person in person
Affected by COVID-19
Enrico Sivieri Director Zhou Hongjiang
epidemic
Affected by COVID-19
Stefano Battioni Director Zhou Hongjiang
epidemic
Affected by COVID-19
Aldino Marzorati Director Leng Bin
epidemic
Liu Qinglin Independent Director Due to official business Yu Renzhu
Non-standard audit opinion notice
□AvailableNot available
The pre-arranged planning of profit distribution for ordinary share or the pre-arranged planning of
increasing capital stock with accumulation fund during the report period deliberated by the board of
the directors
AvailableNot available
The Company plans not to distribute cash dividend or give bonus shares or increase capital stock
with accumulation fund.
The pre-arranged planning of profit distribution for preferred share during the report period
deliberated and passed by the board of directors
□AvailableNot available
2. Basic information of the Company
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
1) Brief introduction of the Company
Abbreviation of Shares: Changyu A, ChangyuB Code number of the Shares 000869, 200869
Place of listing of Shares Shenzhen Stock Exchange
Authorized Representative of
Contact person and information Secretary of Board of Directors
Securities Affairs
Name Mr. Jiang Jianxun Mr. Li Tingguo
56 Dama Road, Yantai, Shandong, 56 Dama Road, Yantai, Shandong,
Address
China China
Tel 0086-535-6602761 0086-535-6633656
E-mail jiangjianxun@changyu.com.cn stock@changyu.com.cn
2) Key accounting data and financial indicators
Whether the Company makes retroactive adjustments or restates the accounting data of previous
fiscal years
□Yes No
In the same period of last
During the report period Increase rate (%)
year
Business revenue (CNY) 1,401,606,792 2,558,274,785 -45.21%
Net profit attributed to the
shareholders of the listed company 307,035,572 603,403,789 -49.12%
(CNY)
Net profit attributed to the
shareholders of the listed company
266,766,849 552,490,695 -51.72%
after deducting the irregular profit and
loss (CNY)
Net cash flows from the operating
-29,652,821 499,476,006 -105.94%
activities (CNY)
Basic earnings per share (CNY/share) 0.45 0.88 -48.86%
Diluted earnings per share
0.45 0.88 -48.86%
(CNY/share)
Weighted average for earning rate of
2.93% 6.13% -3.20%
the net assets
The end of this report
The end of last year Increase rate (%)
period
Total assets (CNY) 13,286,972,498 13,647,932,568 -2.64%
Net Assets attributed to the
shareholders of the listed company 10,131,114,317 10,308,910,198 -1.72%
(CNY)
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
3) Situation for the number of shareholders and shareholdings of the Company
Unit: share
Total common shareholders at the Total number of preferred shareholder recovering voting power at the end of report
44,334 0
end of report period period (if have)
Shareholdings of the top 10 shareholders
Shareholding Shareholding Number of restricted Pledged or frozen
Name of Shareholder Character of shareholder
ratio amount share Share status Amount
YANTAI CHANGYU GROUP Domestic non-state-owned legal
50.40% 345,473,856 0 0
CO., LTD. person
GAOLING FUND,L.P. Foreign legal person 3.08% 21,090,219 0 0
CHINA SECURITIES FINANCE
State-owned legal person 2.25% 15,440,794 0 0
CORP
BBH BOS S/A FIDELITY FD -
Foreign legal person 2.22% 15,241,826 0 0
CHINA FOCUS FD
SHENWAN HONGYUAN
SECURITIES(HONG KONG) Foreign legal person 1.20% 8,235,333 0 0
LIMITED
HONG KONG SECURITIES
Foreign legal person 1.14% 7,815,014 0 0
CLEANING CO., LTD.
FIDELITY PURITAN TRUST:
FIDELITY SERIES INTRINSIC Foreign legal person 0.93% 6,350,762 0 0
OPPORTUNITIES FUND
GUOTAI JUNAN
SECURITIES(HONGKONG) Foreign legal person 0.76% 5,224,746 0 0
LIMITED
CENTRAL HUIJIN ASSET
State-owned legal person 0.69% 4,761,200 0 0
MANAGEMENT LTD.
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
HAITONG INTERNATIONAL
SECURITIES COMPANY Foreign legal person 0.60% 4,139,187 0 0
LIMITED- ACCOUNT CLIENT
Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship
Explanation for above shareholders’ associated relationship or
or concerted action relationship with the other 9 circulating shareholders, and the relationship among the
concerted action
other shareholders is unknown.
Explanation for shareholders’ who are involved in securities margin
The top 10 shareholders are not involved in securities margin trading business.
trading business (if have)
4)Changes in controlling shareholders or actual controllers
Changes in the controlling shareholders during the report period
□AvailableNot available
There is no change in the controlling shareholders during the report period.
Changes in the actual controllers during the report period
□AvailableNot available
There is no change in the actual controllers during the report period.
5)Total number of preferred shareholders of the Company and shareholding status of the top 10 preferred shareholders
□AvailableNot available
There is no shareholding status of preferred shareholders during the report period.
6)Situation of corporation bonds
Whether or not there are the Company’s corporation bonds issued in public and listed in the stock exchange, but not due on the issuance date
approved in the semi-annual report or failing to pay in full on the due date
No.
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
3. Management Discussion and Analysis
1) Brief introduction of operation situation during the report period
Whether the Company need to comply with the disclosure requirements of a particular industry
The Company is not required to comply with the disclosure requirements of special industries, and
the operating conditions during the report period are as follows:
①Summary
During the report period, affected by many factors such as the slowdown of domestic economic
growth, increased uncertainty caused by Sino-US trade frictions and COVID-19 epidemic, domestic
wine consumption has experienced a sharp decline, and market competition is very fierce. The sales
of both domestic wine and imported wine continued the “double decline” trend over the past two
years. Some wine production and operation enterprises got into trouble. Facing quite a lot of
unfavorable factors, while taking the protection of the health of employees and cooperative partners
as the top priority of the work, the Company actively resumed all aspects of work based on the
unified arrangements of the state and the actual situation. The Company insisted in taking the market
as the center, insisted the development strategy of “Focus on high quality, Focus on middle-and-high
level, Focus on big product” and the marketing concept of “Increasing sales from the terminal and
continuously-cultivated consumers” without wavering, and strove to promote product sales. In the
first half year, the Company realized the business income of CNY 1,401.61 million with a
year-on-year decrease of 45.21% and the net profit attributable to shareholders of the parent
company realized CNY 307.04 million with a year-on-year decrease of 49.12%. During the report
period, the Company mainly did following work:
Firstly, the Company bended over backwards to raise anti-epidemic materials, carried out the
prevention and control measures, and fight against the epidemic. After the outbreak, the Company
immediately formulated relatively strict epidemic prevention and control measures, regulated
responsibilities at various levels, paid close attention to relevant policies and measures and epidemic
developments, and conducted publicity and guidance work to employees and partners through
various tools such as WeChat, in order to guide them to respond correctly, not to be panic, not to
believe and spread rumors and to spread positive energy. By contacting overseas acquisition
companies and overseas partners, the Company purchased large numbers of anti-epidemic materials
such as masks and protective clothing that are shortage in domestic from eight countries including
Australia, Spain, Chile, France, South Korea, Japan, Malaysia and Thailand, and also provided a
large amount of anti-epidemic materials to the Company’s overseas enterprises when the foreign
epidemic situation is severe, better meeting the anti-epidemic needs of domestic and foreign
employees and partners.
Secondly, the Company vigorously assisted distributors to accelerate product sales. After the
outbreak of the epidemic, due to the drastic reduction in dinner gatherings and the slowdown in sales
of alcoholic beverages, there were greater pressures on distributors’ inventory. The Company
actively took efforts to make measures and maintained daily communication with distributors
through calls, SMS, WeChat, FaceTime, etc. to keep abreast of the market situation and to ensure the
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
normal development of business to the greatest extent. After the country released the restrictions on
personnel flow, the Company’s marketing team seized various opportunities and rushed to the front
line of the market to carry out marketing activities within the scope of the policy and make great
efforts to promote product sales, alleviating the pressure on distributors’ inventory and funds and
ensuring the healthy operation in sales channels.
Thirdly, the Company re-marked brand positioning, focused on strategic brands and improved brand
manager system. The Company divided the brands of all kinds of alcoholic products into four levels,
strategic brand, key brand, cooperative brand and independent brand, according to the resource input,
team input and future pursuit goals. Among them, the strategic brand is the brand built with the
strength of the whole company, which will be promoted by the main sales team and is the main
brand for future sales growth; the key brand is the brand that remains the current investment and
policies basically unchanged; the cooperative brand is the brand that the company does not invest in
resources and basically does not use the power of the sales team, which grows mainly in virtue
of external forces and through actively seeking cooperation with large businessmen. For domestic
wine, the Company formed 7 brand manager systems, containing Moser, AFIP and Golden Ice
Valley, Castel and Baron Balbon, Rena Castle, Noble Dragon, Zenithwirl and J-Lormin. For Brandy,
the Company formed a marketing department system for four major brands including Koya,
Five-star, Mminni and Pagese. For imported wine, the Company has formed four brand teams
including Kilikanoon, Indomita, Atrio and Mirefleurs. The Company reviewed, summarized,
evaluated and improved the marketing contents provided by each brand manager in order to
practically guide the market, preliminarily improving the creation and implementation of marketing
contents of each brand system.
Fourthly, the Company correctly understood the market development situation and further improved
the marketing system. During the report period, with the rapid development of IT and the push from
COVID-19, “online shopping” accelerated to replace “offline shopping”, “experiential scenario”
accelerated to replace “traditional physical shop”, “online customer acquisition mode” accelerated to
replace “traditional customer acquisition mode”, and “online office” accelerated to replace
“traditional office”. In order to better adapt to the new market development trends, while
consolidating the advantages of traditional channels, the Company vigorously promoted digital
marketing transformation, made better use of blockchain technology, exploited new ways for
consumers to interact deeply online and widely attract member customers by virtue of the brand
applet and Smart Retail Mall applet developed by Tencent in order to further enhance customer
stickiness, empower distributors, conduct offline diversion for them, provide big data analysis for
regional consumers and accelerate the integration of online and offline businesses. Adopting the idea
of “Establishing images and maintaining price system for nationwide brands, focusing on sales of
brands owned by E-commerce company”, for Noble Dragon, the Company proposed to adopt the
online mode of “1+4” that made the sales in existing E-commerce company continue growing
stronger and bigger and newly developed four major online enterprises and launched four individual
sets of products to be sold online; for Brandy and Zenithwirl, the Company adopted the mode of
“Mainly based on big online enterprises and supplemented by the E-commerce company” to strive to
expand the scale of online sales.
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
Fifthly, the Company continued strengthening quality management and continuously improved
product quality. In accordance with the quality improvement programme, the Company increased
investment in key links and key equipment affecting product quality. It established brand winemaker
system, completed the selection and appointment, salary settings and work procedures settings of
winemakers at all levels, clarified the core requirements of winemakers at all levels in product shelf
life, blind tasting result, international awards, external quality and presentation ability, and signed
work commitment letter with every winemaker to further clarifying the quality improvement
responsibilities of winemakers, giving full play to the professional potential of winemakers. It
strengthened the integration of both global raw materials and global winemakers and selected
first-class outsourcing design companies for product appearance design to reach the requirement of
“not stunning, not to public”. Besides that, the Company established a dual quality evaluation system
of internal quality management departments plus external consumers to evaluate the quality in an
all-around way and connected the evaluation results with the income of the person in charge of
production.
Sixthly, the Company strengthened financial management and internal audit to prevent operational
risks. During the report period, the Company mainly strengthened capital management, budget
management and tax planning, reduced capital occupation, improved capital turnover efficiency and
enhanced the pertinence and effectiveness of budget management. It further improved the financial
management system for overseas enterprises and focused on monitoring the cash flow to avoid debt
repayment risks. It conducted special audit in key expenses, conducted off-office audit in key
personnel, conducted settlement audit in technological transformation and infrastructure projects,
and investigated personnel accountable for economic losses, ensuring the full implementation of the
Company’s management and control system. It also conducted a comprehensive investigation,
statistic and analysis to the inventory of Changyu products held by distributors, which provided
important decision-making basis for operating management.
Seventhly, the Company accelerated the reform of employment system and improved the capacity of
the team. During the report period, the Company implemented the employment strategy of “Strictly
control the number of new recruits and release the restriction in demission”, raised the standards for
employing new recruits, adopted the mode of “survival of the fittest”, and improved the overall
capacity of the sales team through “upgrade, simplification and absorption”.
In order to achieve the business objectives set by the Company at the beginning of the year, the
Company will focus on following work in the second half of 2020:
Firstly, the Company will take “pursuing market health” as the top priority to implement
distributor-level code scanning during inbound and outbound and establish the timely reporting and
monitoring system for distributors’ inventory. It will establish “limited quantity” and “reduced
quantity” rules to distributors selling core products, which will be associated with cross region sales,
sales at low price and online sales and so on. In addition, the Company will strengthen the flight
audit in allopatric warehouses, cost and distributors’ inventory. It will also vigorously continue
promoting the order-driven system to prevent malicious cross region sales, sales at low price and
illegal online sales so as to maintain the overall stability and smoothness of the Company’s sales
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
system.
Secondly, the Company will further clarify brand and product positioning, clearly divide strategic
brands, key brands, cooperative brands and independent brands, formulate marketing scheme based
on “life taste+ health concepts+ consumption guidance”, distribute market resources on the basis of
brand positioning and do well in brand building and new product market cultivation in order to better
play the role of different brands in promoting and driving product sales.
Thirdly, the Company will strengthen the marketing assessment, determine market personnel’s
income, promotion and dismission through considering the market health degree and the indicator
assessment results, adhere to the assessment of proportion of salary in sales amount and proportion
of sales expense in pre-tax sales amount, and promote the integration of regional logistics and
distribution center in order to better control the market costs.
Fourthly, the Company will further improve the brand winemaker system and continue significantly
improving product quality. It will take the best-selling product in domestic and overseas at the
similar price as the benchmark, strive to realize a comprehensive surpassing in product quality and
cost performance.
Fifthly, the Company will accelerate the pace of digital marketing transformation, work closely with
Tencent and other outsourcing units to do well in the production of products integrating
“anti-cross-region-sales code + marketing code + anti-counterfeiting code”, launch brand applet and
Smart Retail Mall applet and strengthen cooperation with major online business so as to constantly
expand the sales scale of the Company’s online products.
Sixthly, the Company will implement the Youth Excellent Talent Plan and adopt the way of “tutor
leading apprentices” for tracking and training to provide more job exchanges and market practice
opportunities for outstanding talents, which will enhance working ability and broaden promotion
channels.
Seventhly, the Company will scientifically formulate the procurement plan of grapes and other raw
materials according to the industry development trend and the Company’s future development in
order to fully complete the procurement work of raw materials this year.
②Analysis of main business
i. Change in major financial data on year-on-year basis
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
Unit: CNY
In the report In the same period More or less
Reason for changes
period of last year (%)
Mainly owing to the year-on-year decrease in sales volume affected by
Operating revenue 1,401,606,792 2,558,274,785 -45.21%
COVID-19 epidemic
Mainly owing to the year-on-year decrease in sales volume affected by
Operating costs 574,650,677 936,252,225 -38.62%
COVID-19 epidemic
Mainly owing to the year-on-year decrease in marketing activities and
Sales expenses 250,531,046 591,970,801 -57.68%
marketing input affected by COVID-19 epidemic
Mainly owing to the year-on-year decrease in employee compensation,
Administration expense 113,069,869 155,552,312 -27.31%
repair charge and administrative expenses
Financial expense 11,961,102 8,789,583 36.08% Mainly owing to the significant year-on-year increase in long-term loan
Mainly owing to the significant year-on-year decrease in total profit caused
Income tax expense 109,689,969 210,281,578 -47.84%
by the reduce in profitability affected by COVID-19 epidemic
Mainly owing to the significant year-on-year decrease in received cash from
Net cash flow from
-29,652,821 499,476,006 -105.94% selling products and providing labor service affected by COVID-19
operating activities
epidemic
Mainly owing to the significant year-on-year decrease in the cash outflow
Net cash flow from
-39,726,131 -114,534,608 65.32% for investment activities including purchase and construction of fixed assets
investment activities
and fixed time deposit etc
Net cash flow from Mainly owing to the year-on-year increase in received cash from obtaining
4,704,625 -18,128,357 125.95%
financing activities bank loan
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
Mainly owing to the significant year-on-year decrease in received cash from
Net increased amount of
-64,982,286 366,866,743 -117.71% selling products and providing labor service affected by COVID-19
cash and cash equivalents
epidemic
ii. Composition of operating revenue
Unit: CNY
This report period The same period of last year
Year-on-year increase or
Proportion in operating Proportion in operating
Amount Amount decrease (%)
revenue revenue
Total operating revenue 1,401,606,792 100% 2,558,274,785 100% -45.21%
Sector-classified
Sector of liquor and
1,401,606,792 100% 2,558,274,785 100% -45.21%
alcoholic beverage
Product-classified
Wine 993,972,425 70.92% 1,928,554,268 75.38% -48.46%
Brandy 372,909,239 26.61% 563,451,068 22.02% -33.82%
Tourism 22,217,264 1.59% 42,604,382 1.67% -47.85%
Others 12,507,864 0.89% 23,665,067 0.93% -47.15%
Area-classified
Domestic 1,183,622,477 84.45% 2,330,780,056 91.11% -49.22%
Overseas 217,984,315 15.55% 227,494,729 8.89% -4.18%
iii. The cases of industry, product or area accounting for over 10% in the Company’s operating revenue or operating profits
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
Unit: CNY
Year-on-year increase or Year-on-year increase or Year-on-year increase or
Operating Operating Gross
decrease (%) of operating decrease (%) of operating decrease (%) of gross
revenue cost margin
revenue cost profit rate
Sector-classified
Sector of liquor and
1,401,606,792 574,650,677 59% -45.21% -38.62% -4.40%
alcoholic beverage
Product-classified
Wine 993,972,425 397,080,517 60.05% -48.46% -41.62% -4.68%
Brandy 372,909,239 164,881,016 55.79% -33.82% -28.22% -3.45%
Tourism 22,217,264 6,492,009 70.78% -47.85% -47.25% -0.33%
Others 12,507,864 6,197,135 50.45% -47.15% -56.10% 10.10%
Area-classified
Domestic 1,183,622,477 442,340,877 62.63% -49.22% -44.09% -3.43%
Abroad 217,984,315 132,309,800 39.30% -4.18% -8.84% 3.10%
Explanation on the causes of over 30% year-on-year changes of the related comparison data
During the report period, the Company’s operating revenue and operating costs, as well as the operating revenue and operating costs of wine,
brandy, tourism and domestic business, all decreased significantly over the same period of last year, mainly due to the decline in the sales
volume of products affected by COVID-19 epidemic.
③ Assets and liabilities situation
i. Major changes in assets
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
The end of this report period The end of the same period of last year Proportion increase
Proportion in the Proportion in the total or decrease Explanation for major changes
Amount Amount
total assets (%) assets (%) (%)
Mainly owing to the year-on-year decrease in
Monetary funds 1,476,207,055 11.11% 1,848,632,953 13.81% -2.70% the cash inflow for operating activities affected
by COVID-19 epidemic
Account receivable 167,738,633 1.26% 186,131,192 1.39% -0.13% No major change
Mainly owing to the year-on-year increase in
Inventory 2,936,133,260 22.10% 2,606,781,436 19.48% 2.62% work-in-process including bulk wine at the end
of report period
Investment real estate 28,344,687 0.21% 30,560,470 0.23% -0.02% No major change
Mainly owing to the establishment of SAS
Long-term equity investment 42,810,445 0.32% 0 0% 0.32%
L&M HOLDINGS
Mainly owing to the transfer-in of construction
Fixed assets 5,818,499,845 43.79% 5,684,612,653 42.48% 1.31%
in process during the report period
Mainly owing to the transfer of construction in
Construction in process 647,036,593 4.87% 789,872,373 5.90% -1.03% process into fixed assets during the report
period
Mainly owing to the increase in short-term bank
Short-term borrowing 737,183,701 5.55% 678,170,667 5.07% 0.48%
loan in the second half year of last year
Long-term loan 218,613,336 1.65% 165,949,250 1.24% 0.41% No major change
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2020 Semi-annual Report Abstract of Yantai Changyu Pioneer Wine Co., Ltd.
ii. Limitations of assets rights up to the end of the report period
For the limitations of assets rights up to the end of the report period, please refer to Announcement
on External Guarantee (Announcement no.:2016- temporary 021), Announcement on External
Guarantee (Announcement no.:2018- temporary 020), Announcement on External Guarantee
(Announcement no.:2019- temporary 038) and Announcement on Guarantee provided by Spanish
Atrio Company for Bank Loan (Announcement no.:2020- temporary 013) disclosed on China
Securities Journal, Securities Times and CNINFO (http://www.cninfo.com.cn/).
(2) Items related to financial report
①Compared with the financial report of the previous accounting period, explanation for the
changes of accounting policy, accounting estimation and accounting method
Available□Not available
During the report period, the Company made changes to the accounting policy implemented for
“Income” in accordance with the relevant regulations of the Ministry of Finance. For other
information about changes in accounting policy, please refer to Announcement on Changes in
Accounting Policy (Announcement no.: 2020- temporary21)
②The situation explanation for the correction of major accounting errors which need to be
retrospect and restated during the report period
□AvailableNot available
There is no situation for the correction of major accounting errors which need to be retrospect and
restated.
③Compared with the financial report of the previous accounting period, explanation for the
changes of the consolidated statements scope
Available Not available
There is no change of consolidated statements scope during the report period.
Yantai Changyu Pioneer Wine Co., Ltd.
Board of Directors
August 28th, 2020
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