Zhejiang Sanhua Intelligent Controls Co., Ltd. Semi-Annual Report 2019 (Abstract)
Securities Code: 002050 Securities Abbr.: Sanhua Intelligent Control Public Announcement No.: 2019-033
Zhejiang Sanhua Intelligent Controls Co., Ltd.
Semi-Annual Report 2019 (Abstract)
I. Important Notes
This Abstract is extracted from 2019 Semi-Annual Report of Zhejiang Sanhua Intelligent Controls Co., Ltd.
(“the Company”). In order to have a full understanding of the operating results, financial status and future
development planning of the Company, investors are suggested to read the full report carefully on the media
designated by the China Securities Regulatory Commission (the “CSRC”).
Indicate by check mark if independent auditor issues non-standard unqualified opinion
□Applicable √Not applicable
Indicate by check mark if there is a pre-arranged plan of profit distribution or transferring capital reserve into
common stock for the report period which has been reviewed and approved by the Board of Directors
□Applicable √Not applicable
The Company has no interim cash or stock dividend plan, nor any plan to transfer capital reserve into common
stock.
Indicate by check mark if preplan for preferred stocks profit distribution to shareholders for the report period
which has been reviewed and approved by the Board of Directors
□Applicable √Not applicable
II. Company Profile
1. Stock profile
Stock abbr. Sanhua Intelligent Control Stock code 002050
Stock exchange Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Kaicheng Hu Yutong Wong
5F, 18#building, No. 12 St., No. 289
No. 219, Woxi Avenue, Meizhu Town,
Office add. Xiasha Economic Development,
Xinchang County, Zhejiang, China.
Hangzhou, Zhejiang, China.
Tel. 0571-28020008 0575-86255360
E-mail shc@zjshc.com shc@zjshc.com
2. Selected Financial Data
Indicate by check mark if there is any retrospectively restated accounting data of previous years.
□Yes √No
Zhejiang Sanhua Intelligent Controls Co., Ltd. Semi-Annual Report 2019 (Abstract)
Unit: Yuan
Year-over-year
The first half of 2019 The first half of 2018
Increase/Decrease
Revenue 5,831,107,028.08 5,590,333,729.82 4.31%
Net profit attributable to shareholders 692,968,498.78 677,056,092.91 2.35%
Net profit attributable to shareholders
641,841,146.76 674,378,199.87 -4.82%
excluding non-recurring gains and losses
Net cash flows from operating activities 830,554,910.93 181,547,923.55 357.49%
Basic EPS (RMB Yuan / share) 0.25 0.25 0.00%
Diluted EPS (RMB Yuan / share) 0.25 0.25 0.00%
Weighted average ROE 7.99% 8.30% -0.31%
Year-over-year
As of Jun. 30, 2019 As of Dec. 31, 2018
Increase/Decrease
Total assets 13,912,414,966.07 13,932,172,478.62 -0.14%
Net assets attributable to shareholders 8,601,157,451.61 8,614,844,555.48 -0.16%
3. Shareholders and Equity Ownership
Unit: Share
Total number of shareholders of preferred
Total number of shareholders of common stocks at the
36,880 stock with resumed voting right at the end 0
end of the reporting period
of the reporting period
Top 10 shareholders
Pledged or frozen
Quantity of Quantity of restricted stocks
Name Nature Ownership
stocks stocks held
Status Quantity
Domestic
Sanhua Holding
non-state-owned 37.06% 1,024,887,153 Pledged 594,100,000
Group Co., Ltd.
corporate
Zhejiang Sanhua Domestic
Lvneng Industry non-state-owned 20.66% 571,344,580 299,892,703
Group Co., Ltd. corporate
Hong Kong
Securities Clearing Foreign
8.31% 229,842,885
Company Ltd. corporate
(HKSC)
Domestic
Yabo Zhang 1.81% 50,024,000 37,518,000
natural person
Domestic
Xinhecheng
non-state-owned 0.86% 23,660,000
Holdings Co., Ltd.
corporate
Fidelity Fund Foreign 0.82% 22,631,684
Zhejiang Sanhua Intelligent Controls Co., Ltd. Semi-Annual Report 2019 (Abstract)
(Hong Kong) corporate
Limited - Customer
Funds
Western Trust Co.,
Ltd.-Western Trust.
Shanmei-Zhuque Other 0.78% 21,500,000
Industry Investment
Fund Trust
112 Portfolio of
National Social Other 0.71% 19,637,476
Security Fund
Central Huijin Asset Domestic
Management Co., state-owned 0.64% 17,833,400
Ltd. corporate
Shenzhen Anpeng Domestic
Capital Innovation state-owned 0.63% 17,333,333 Pledged 7,800,000
Co., Ltd. corporate
Among the above-mentioned shareholders, Sanhua Holding Group Co., Ltd.,
Zhejiang Sanhua Lvneng Industry Group Co., Ltd. and Yabo Zhang are the persons
Explanation on the above-mentioned
acting in concert. The Company is not made aware whether there is any affiliated
shareholders’ affiliated relationship or
relationship between the other shareholders or whether they are persons acting in
concerted action
concert as defined in Administrative Measures for the Acquisition of Listed
Companies.
Explanation on the above-mentioned
shareholders that are engaged in margin Not applicable
trading business
4. Changing of controlling shareholder or actual controller of the Company
Change of controlling shareholder in the reporting period
□Applicable √Not applicable
No change of controlling shareholder in the reporting period.
Change of actual controller in the reporting period
□Applicable √Not applicable
No change of actual controller in the reporting period.
5. Number of preferred shareholders and top 10 of them
□Applicable √Not applicable
No preferred shareholders in the reporting period.
6. Bonds
Does the Company have any corporate bond that is publicly issued and listed on the stock exchange and
that are immature or not fully redeemed as of the approved issuance date of the Annual Report?
None
III. Management Discussion and Analysis
Zhejiang Sanhua Intelligent Controls Co., Ltd. Semi-Annual Report 2019 (Abstract)
1. Business review for the reporting period
Is the Company subjected to the disclosure requirements for specific industries?
No
In the first half of 2019, the risk of macroeconomic uncertainty in China rises as the sustained weak demand of
global market and the impact of protectionism from the United States. Facing this dynamic business
environment, the Company insists on implementing the globalization strategy and continues to consolidate its
leading position in the industry. The Company’s refrigeration and air-conditioning electrical parts business
remains stable, and the new energy vehicles parts business maintains a positive uptrend despite of the
background of obvious decline in overall automotive industry.
In this reporting period, the Company realizes 5.83 billion Yuan total revenue, 0.83 billion Yuan operating
profit and 0.69 billion Yuan net profit attributable to shareholders, with a year-over-year growth rate of 4.31%,
1.58% and 2.35% respectively. The revenue of refrigeration and air-conditioning electrical parts business is
5.07 billion Yuan, increased by 3.41% compared to same period of prior year., and the revenue of automotive
parts business is 0.76 billion Yuan with a year-over-year growth rate of 10.64%.
The Company’s major business activities in 2019 include:
Ⅰ. Focus on operation and steady growth of core businesses
1. Refrigeration components business
Faced with the slowdown of industry demand and the fierce market competition in the first half of the year, the
Company actively strengthens its strategic cooperation with key customers to maintain market share while
insisting on product innovation with new technology and new materials, and continues to consolidate its
leading position in the industry. The Company constantly optimizes design for its customer solutions, expands
the application fields of energy-efficient products and the penetration into the market. In the global layout, the
factory in Vietnam has completed part of the valve production lines, obtained customer confirmation, and the
construction is progressing rapidly.
2. Automotive components business
Under the background of obvious decline in overall automotive industry in the first half of 2019, the new
energy vehicle parts business is still achieving high growth rate due to the powerful political drivers and
industrial upgrading. The development of new energy vehicles has become a clear trend along with the gradual
mass production of auto makers. Having developed in the new energy vehicle thermal management products
industry for more than a decade, the Company keeps improving its technical and manufacturing capabilities,
and its products are gradually developing from components to modules and subsystems. The Company has
successively obtained orders from customers such as Valeo, MAHLE, Volkswagen, Benz, BMW, Volvo, GM,
Geely, BYD, SAIC Motor, etc. The maximum value per vehicle supplied by the Company is over 5,000 Yuan,
which gives prominence to the Company’s competitive edge in the field of new energy vehicle thermal
management.
Ⅱ. Focus on technology and continuously increase R&D investments
During the reporting period, the Company’s R&D expense is 249 million Yuan with year over year growth rate
of 21.01%. The Company strengthens the core competencies of its strategic products with sustained investment
in R&D. The Company’s R&D mainly focuses on the heat-pump technology of thermal conversion and
temperature control. By the end of this reporting period, the Company owns 1,812 patents including 829
patents of invention.
Zhejiang Sanhua Intelligent Controls Co., Ltd. Semi-Annual Report 2019 (Abstract)
Ⅲ. Strengthen the talent development mechanism of "Selecting, Matching, Educating and Retaining" to
support the Company's globalization
The company insists on the talent development strategy of “Internal training is superior to external
recruitment”, and identifies talents and establishes career development plans for top performers to ensure the
quality and quantity of the Company’s talent reserve is sufficient to support the rapid growth of the Company’s
global business.
Ⅳ. Maintain investor relations and strengthen the awareness of service and return to shareholders
During the reporting period, the Company continues to repurchase its outstanding stocks with its self-owned
funds and promote the reasonable return of the stock value. At the same time, the Company strengthens the
construction of internal control system, standardize the operation of the three meetings, and improves the
Company’s information disclosure and investor relationship management to ensure smooth communication
between investors and the Company by means of platform of Shenzhen Stock Exchange, investors calls,
on-site firm tour and other ways.
2. Matters related to financial statements
(1) Explanation on changes in accounting policy, accounting estimations and accounting methods
comparing to prior year financial statement
√Applicable □Not applicable
1. Since January 1, 2019, the Company has adopted the new Financial Instruments Standards and adjusted
relevant items of the financial statements at the beginning of this year. Detailed information is provided in
"Important Accounting Policies and Changes in Accounting Estimates" (3).
2. In accordance with the Revised Format of General Enterprise Financial Statements for 2019 (Accounting
NO. 6, 2019) and the provisions of Enterprise Accounting Standards, the corresponding comparative data
of the financial statements in first half of 2019 are restated retrospectively. The accounts and amounts of
the financial statements that are significantly affected are shown in the following table:
Unit: Yuan
Accounts and amounts of the original financial statement Accounts and amounts of the new financial statement
Balance sheet as of Dec.31, 2018
Notes receivable and
4,074,693,248.25
accounts receivable Notes receivable 2,229,031,648.98
Notes receivable 2,229,031,648.98
Accounts receivable 1,845,661,599.27 Accounts receivable 1,845,661,599.27
Notes payable and accounts Notes payable 1,142,890,068.69
2,724,982,092.15
payable Accounts payable 1,582,092,023.46
Income statement of the first half of 2018
General and Administrative
General and Administrative 246,280,484.19
451,646,605.56 expense
expense
R&D expense 205,366,121.37
Cash flow statement of the first half of 2018 (Note)
Cash inflows from other Cash inflows from other
6,076,000.00 6,076,000.00
investment activities operating activities
Note: The cash inflows of assets-related government subsidies of 6,076,000.00 Yuan in the cash flow statement is reclassified
Zhejiang Sanhua Intelligent Controls Co., Ltd. Semi-Annual Report 2019 (Abstract)
from "cash inflows from other investment activities" to "cash inflows from other operating activities". The supplementary
information of the notes to the cash flow statement is adjusted accordingly as well.
3. According to the Notice on the Issuance and Amendment of Accounting Standards for Enterprises No. 7 -
Exchange of Non-monetary Assets (Accounting No. 8, 2019) which was issued by Ministry of Finance, the
Company has adopted Accounting Standards for Enterprises No. 7 - Non-monetary Asset Exchange since
June 10, 2019.
4. According to the Notice on the Issuance and Amendment of Accounting Standards for Enterprises No. 12 -
Debt Restructuring (Accounting No. 9, 2019) which was issued by Ministry of Finance, the Company has
adopted Accounting Standards for Enterprises No. 12 - Debt Restructuring since June 17, 2019.
(2) Explanation on retrospective restatement due to significant accounting error correction in the
reporting period
□Applicable √Not applicable
There is no retrospective restatement due to significant accounting error correction in the reporting period
(3) Explanation on changes of consolidation scope comparing to prior year’s financial statement
√Applicable □Not applicable
Reduced scope of consolidation
Unit: Yuan
Net profit from beginning
Net assets on
Corporation Disposal method Disposal date of the reporting period to
disposal date
the disposal date
Shanghai Taiqing International
Liquidation and Cancellation 2019-05-22 6,057.63 -1,711.60
Trade Co., Ltd.
