Konka Group Co., Ltd. First Quarter Report 2018
KONKA GROUP CO., LTD.
FIRST QUARTER REPORT 2018
2018-27
April 2018
1
Konka Group Co., Ltd. First Quarter Report 2018
Part I Important Notes
The Board of Directors (or the “Board”), the Supervisory Board as well as the Directors,
Supervisors and senior management of Konka Group Co., Ltd. (inclusive of its consolidated
subsidiaries, the “Company”; exclusive of its subsidiaries, the “Parent Company”, except
where the context otherwise requires) hereby guarantee the factuality, accuracy and
completeness of the contents of this Report, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions in this Report.
All the Company’s Directors have attended the Board meeting for the review of this Report.
Liu Fengxi, the Company’s legal representative, Li Chunlei, the Company’s Chief Financial
Officer (CFO), and Feng Junxiu, 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 has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version shall
prevail.
2
Konka Group Co., Ltd. First Quarter Report 2018
Part II Key Corporate Information
I Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
January-March 2018 January-March 2017 Change
Sales revenue (RMB) 7,773,238,729.83 4,686,318,957.34 65.87%
Net income attributable to shareholders of
55,758,297.40 26,245,353.83 112.45%
the listed company (RMB)
Net income attributable to shareholders of
the listed company before nonrecurring -68,684,426.14 -18,772,884.12 -265.87%
gains and losses (RMB)
Net cash flows from operating activities
-1,019,365,516.72 -1,629,437,072.94 37.44%
(RMB)
Basic earnings per share (RMB/share) 0.0232 0.0109 112.84%
Diluted earnings per share (RMB/share) 0.0232 0.0109 112.84%
Weighted average return on equity (%) 0.70% 0.90% -0.20%
March 31, 2018 December 31, 2017 Change
Total assets (RMB) 23,501,965,507.75 23,558,735,469.78 -0.24%
Equity attributable to shareholders of the
8,059,777,898.53 7,994,145,476.61 0.82%
listed company (RMB)
Nonrecurring gains and losses:
√ Applicable □ Not applicable
Unit: RMB
Item January-March 2018 Note
Gains and losses on disposal of non-current assets (inclusive of offset allowance for asset
63,391,159.53
impairments)
Government subsidies charged to current profit and loss (exclusive of government subsidies
given in the Company’s ordinary course of business at fixed quotas or amounts as per 57,080,159.10
government’s uniform standards )
Gains and losses on investment or asset management entrustments to other entities 21,676,523.58
Gains and losses on changes in fair value of trading financial assets and liabilities &
investment income from disposal of trading financial assets and liabilities and
38,693,734.33
available-for-sale financial assets (exclusive of effective portion of hedges that arise in the
Company’s ordinary course of business)
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Konka Group Co., Ltd. First Quarter Report 2018
Gains and losses on loan entrustment 235,966.96
Non-operating income and expense other than above 17,047,430.35
Less: Income tax effects 20,793,700.28
Non-controlling interests effects (net of tax) 52,888,550.03
Total 124,442,723.54 --
Explanation of why the Company classifies an item as a nonrecurring gain/loss according to the
definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies
Offering Their Securities to the Public—Nonrecurring Gains and Losses, or reclassifies any
nonrecurring gain/loss item listed in the said explanatory announcement as a recurring gain/loss:
√ Applicable □ Not applicable
Item Amount (RMB) Reason
Government subsidies related to the Company’s ordinary course of
Tax refund of software 24,228,550.05 business and in line with the regulations of national policies at fixed
quotas or amounts as per certain standards
II Total Number of Shareholders and Top 10 Shareholders’ Holdings at Period-End
1. Numbers of Common Shareholders and Preferred Shareholders with Resumed Voting
Rights as well as Holdings of Top 10 Shareholders
Unit: share
Common shareholders at Preferred shareholders with resumed voting rights at
84,394 0
period-end period-end (if any)
Top 10 shareholders
Sharehol Pledged or frozen
ding shares
Nature of percenta Restricted
Name of shareholder Shares
shareholder ge at shares Shar
Status
period-e es
nd (%)
State-owned
OVERSEAS CHINESE TOWN
juridical 21.75% 523,746,932 0
ENTERPRISES CO.
person
Foreign
CITIC SECURITIES BROKERAGE
juridical 7.56% 182,100,202 0
(HONG KONG) CO., LTD.
person
Foreign
HOLY TIME GROUP LIMITED juridical 2.33% 56,000,000 0
person
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Konka Group Co., Ltd. First Quarter Report 2018
Foreign
GUOYUAN SECURITIES BROKER
juridical 2.27% 54,755,145 0
(HK) CO., LTD.
person
Foreign
GAOLING FUND,L.P. juridical 2.19% 52,801,250 0
person
Domestic
WANG LEI natural 1.47% 35,400,939 0
person
Domestic
ZHANG XIAOYU natural 1.08% 26,096,200 0
person
State-owned
CHINA MERCHANTS SECURITIES
juridical 0.97% 23,357,343 0
(HK) LIMITED
person
Foreign
NAM NGAI natural 0.90% 21,788,540 0
person
YUNNAN INTERNATIONAL TRUST
CO., LTD-JULI NO. 48 SINGLE Other 0.84% 20,216,860 0
CAPITAL TRUST
Top 10 non-restricted shareholders
Non-restricted shares held at Type of shares
Name of shareholder
period-end Type Shares
RMB common
OVERSEAS CHINESE TOWN ENTERPRISES CO. 523,746,932 523,746,932
stock
Domestically
CITIC SECURITIES BROKERAGE (HONG KONG)
182,100,202 listed stock for 182,100,202
CO., LTD.
foreign investors
Domestically
HOLY TIME GROUP LIMITED 56,000,000 listed stock for 56,000,000
foreign investors
Domestically
GUOYUAN SECURITIES BROKER (HK) CO., LTD. 54,755,145 listed stock for 54,755,145
foreign investors
Domestically
GAOLING FUND,L.P. 52,801,250 listed stock for 52,801,250
foreign investors
RMB common
WANG LEI 35,400,939 35,400,939
stock
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Konka Group Co., Ltd. First Quarter Report 2018
RMB common
ZHANG XIAOYU 26,096,200 26,096,200
stock
Domestically
CHINA MERCHANTS SECURITIES (HK) LIMITED 23,357,343 listed stock for 23,357,343
foreign investors
Domestically
NAM NGAI 21,788,540 listed stock for 21,788,540
foreign investors
YUNNAN INTERNATIONAL TRUST CO., LTD-JULI RMB common
20,216,860 20,216,860
NO. 48 SINGLE CAPITAL TRUST stock
Jialong Investment Limited, a wholly-funded subsidiary of the Company’s first majority shareholder
Related or Overseas Chinese Town Enterprises Co. (“OCT Group” for short), holds 180,001,110 and 18,360,000
acting-in-concert common shares in the Company respectively through CITIC Securities Brokerage (Hong Kong) Co., Ltd.
parties among and China Merchants Securities (HK) Limited. Jialong Investment Limited and Overseas Chinese Town
shareholders above Enterprises Co. are parties acting in concert. Other than that, it is unknown whether the other shareholders
are related parties or act-in-concert parties or not.
Shareholders
Wang Lei holds 35,400,939 A-shares in the Company through an account of collateral securities for
conducting
margin trading in GF Securities Co., Ltd. Zhang Xiaoyu holds 26,096,200 A-shares in the Company
securities margin
through an account of collateral securities for margin trading in Huaxi Securities Co., Ltd.
trading (if any)
Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted
common 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
□ Applicable √ Not applicable
6
Konka Group Co., Ltd. First Quarter Report 2018
Part III Significant Events
I Changes in Selected Financial Statement Items and Explanation of why
√ Applicable □ Not applicable
(I) During the Reporting Period, in order to accelerate the shift in its business and profit models, the
Company continued to work on the development models of “Hardware + Software”, “Terminals +
Users” and “Technology + Holding”, as well as on the expansion guideline of “Technology +
Industry + Urbanization”, by implementing strategies of “Promote High-End Orientation in
Traditional Business”, “Capitalize Existing Business”, “Turn Traditional Plants into Industrial
Parks” and “Integrate Technologies and Create Added Value”.
During the Reporting Period, the Company improved efficiency in its multi-media business through
promoting corporatization and organizational reform. It also increased its product competitiveness
and overall operating income through more investments in technological innovation, product
development and content operation.
Driven by the fast growing new business, the Company is expected to record sales revenue of
approximately RMB7.773billion in the first quarter of 2018, an around 65.87% rise compared to the
first quarter of 2017.
The estimated influence of non-recurring gains and losses on the net income is about RMB124
million in the Reporting Period.
(II) Changes in Key Financial Indicators:
Unit: RMB’0,000 (in RMB ten thousand)
December 31,
Item March 31, 2018 Change Change (%) Explanation of why
2017
Financial assets at
Changes in the fair value of forward foreign
fair value through 71.73 29.68 42.05 141.68%
exchange contracts
profit or loss
Accounts receivable 425,034.28 344,309.59 80,724.69 23.45% Increase in Sales revenue.
January-March January-March
Item Change Change (%) Explanation of why
2018 2017
Year-over-year increase in revenue from the
Sales revenue 777,323.87 468,631.90 308,691.97 65.87%
supply chain management business
Year-over-year increase in costs in the supply
Cost of sales 714,481.34 402,314.94 312,166.40 77.59%
chain management business
Gain on changes in Changes in the fair value of forward foreign
3,414.22 -6,933.28 10,347.50 149.24%
fair value exchange contracts
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Konka Group Co., Ltd. First Quarter Report 2018
Non-operating Year-over-year increase in loss on disposal of
203.15 76.78 126.37 164.59%
expense property, plant and equipment
II Progress, Influence and Solutions Associated with Significant Events
√ Applicable □ Not applicable
I) Regarding the Kunshan-located Shuiyue Zhouzhuang real estate project, as approved at the 42nd
Meeting of the 6th Board, the Company has won the bid for the use right of the land to the south of
the Quanwang Road, Zhouzhuang Town, Kunshan City. Currently, Phase IV of this project is under
construction, and partial sales are completed.
(II) In regard to the Konka Technological Innovation Center project, as approved at the 24th Meeting
of the 8th Board, the Company entrusted Chuzhou Konka Technology & Industry Development Co.,
Ltd. (Chuzhou Konka TID) to build the center in Chuzhou Economic Development Zone. So far,
the use right of a 45333 ㎡ land has been obtained by Chuzhou Konka TID for this project, and it is
formulating the development plan.
(III) Concerning the intended sale of certain properties in Shanghai, as approved at the 34th Meeting
of the 8th Board, the Company intended to sell its three houses in Shanghai (Room 908, 1801 and
1807, 5 Lane 25, Huihe Road, Hongkou District) via an equity exchange. So far, the evaluation on
these properties has been completed, and the Company is going through the transfer formalities as
per the rules governing the transfer of state-owned assets.
(IV) About the multi-media subsidiary, as approved at the 37th Meeting of the 8th Board, the
Company decided to set up a wholly-owned subsidiary to run the multi-media business covering
color TVs, among others. So far, Shenzhen Konka Electronics Technology Co., Ltd. has been
officially set up.
(V) As for the Yibin-located Konka Intelligent Terminal High-Tech Industrial Park project, as
approved at the 37th Meeting of the 8th Board, the Company intended to establish the said industrial
park at Yibin Lingang Economic and Technological Development Zone and relocate its intelligent
terminal business including mobile phones to this industrial park. So far, the Company has
established a subsidiary for this project and is waiting for the local government to put out the
project land for bids.
Summary of significant event Disclosure date Index to related announcement
Dongguan Plant Renovation Project and New Dongguan Plant
March 11, 2017 http://www.cninfo.com.cn
Project
Announcement on Completion of Transfer of Units of Qingsong
Venture Capital Fund with Industrial and Commercial March 31, 2018 http://www.cninfo.com.cn
Administration
Announcement on Establishment of Business Combination Fund April 18, 2018 http://www.cninfo.com.cn
Announcement on Increased Investment in Sanjiang Properties
April 18, 2018 http://www.cninfo.com.cn
and Related-Party Transaction Rising therefrom
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Konka Group Co., Ltd. First Quarter Report 2018
III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company and Other Commitment Makers, Failed to Fulfill on Time
during Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Operating Result Forecast for January-June 2018
Warning of a forecast loss on or a forecast significant year-over-year change in net income for
January-June 2018, as well as explanation of why:
□ Applicable √ Not applicable
V Securities Investments
√ Applicable □ Not applicable
Nam Opening Closing
Variety Symbol Initial Opening Closing Gain/loss
Closing
e of holding holding in Accountin Sourc
book
of of investment holding holding Reporting
secur percenta percenta value g title e
Period
security security cost (RMB) (share) (share) (RMB)
(RMB)
ity ge ge
Available-f Initial
ZXF or-sale public
Stock 002915 1,459.61 227 0.00% 0 0.00% 0.00 6,893.99
C financial offeri
asset ngs
KCX
Ditto 300730 1,513.16 181 0.00% 0 0.00% 0.00 6,769.40 Ditto Ditto
X
DSX
Ditto 002920 12,537.88 614 0.00% 0 0.00% 0.00 13,882.54 Ditto Ditto
W
MCJ
Ditto 002919 1,406.72 112 0.00% 0 0.00% 0.00 3,308.48 Ditto Ditto
K
Ditto 002922 YGE 3,462.39 279 0.00% 0 0.00% 0.00 6,004.08 Ditto Ditto
GHK
Ditto 300735 5,064.93 507 0.00% 0 0.00% 0.00 9,702.91 Ditto Ditto
J
PYH
Ditto 300664 5,026.08 0 0.00% 0 0.00% 0.00 8,642.82 Ditto Ditto
B
RDG
Ditto 002923 3,129.84 0 0.00% 0 0.00% 0.00 5,650.64 Ditto Ditto
F
ZSK
Ditto 300684 1,376.00 172 0.00% 0 0.00% 0.00 8,307.60 Ditto Ditto
J
XLD
Ditto 300733 5,160.00 0 0.00% 0 0.00% 0.00 6,840.00 Ditto Ditto
L
YQK
Ditto 002925 13,095.00 0 0.00% 0 0.00% 0.00 34,629.00 Ditto Ditto
J
9
Konka Group Co., Ltd. First Quarter Report 2018
Other securities investments
0.00 0 -- 0 -- 0.00 0.00 -- --
held at period-end
110,631.4
Total 53,231.61 2,092 -- 0 -- 0.00 -- --
6
Disclosure date of
announcement on Board’s
N/A
consent for securities
investment
Disclosure date of
announcement on shareholders’
N/A
meeting’s consent for securities
investment (if any)
VI Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: RMB’0,000 (in RMB ten thousand)
Capital source for derivative
U.S. dollar financings
investment
Legal matters involved (if
N/A
applicable)
Disclosure date of board
announcement approving derivative May 24, 2014
investment (if any)
Disclosure date of shareholders’
meeting announcement approving June 10, 2014
derivative investment (if any)
We engage in forward forex transactions to reduce the currency risk when securing
Analysis of risks and control
foreign-currency financing. This is very needed in our routine operation and is in
measures associated with derivative
compliance with the applicable laws and regulations. We have formulated the
investments held in Reporting
Management Rules of Konka Group Co., Ltd. for Investment In Derivative Financial
Period (including but not limited to
Instruments, making clear the relevant consideration and approval procedure, risk control,
market risk, liquidity risk, credit
etc.. We always sign forward forex contracts with large banks such as the Bank of China,
risk, operational risk, legal risk,
which operate steadily and have good credit standing, which could help prevent loss on
etc.)
forward forex contracts due to bank failure.
How we usually measure the fair value of derivative financial instruments: Based on the
Changes in market prices or fair
forward forex sales and purchase contracts that are signed between the Company and
value of derivative investments in
banks and have not expired in a Reporting Period, we recognize the differences between
Reporting Period (fair value
the quotations for these contracts on the balance sheet dates provided by the banks and the
analysis should include
contractual prices as transactional financial assets or liabilities, and the profit/loss on fair
measurement method and related
value changes is recognized accordingly. Because these contracts have locked in exchange
assumptions and parameters)
rates, no changes will occur when comparing the fair value on signing dates with that on
10
Konka Group Co., Ltd. First Quarter Report 2018
delivery dates.
Material changes in accounting
policies and specific accounting
principles adopted for derivative No material changes
investments in Reporting Period
compared to last reporting period
It is considered necessary for the Company to lock in foreign-currency financing costs
Opinion of independent directors through financial instruments, because it could effectively reduce the currency risk when
on derivative investments and risk securing foreign-currency financing. The Company has formulated the internal control
control mechanism for investment in derivative financial instruments, and the relevant risk control
measures that the Company has taken are considered effective.
Unit: RMB’0,000 (in RMB ten thousand)
Type of derivative Opening Closing
Gain/loss in Closing investment amount as a percentage of
financial contractual contractual
Reporting Period the Company’s closing net asset value
instrument amount amount
Forward forex
224,712.77 85,319.52 2,133.33 10.59%
contract
VII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc.
during Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Irregularities in Provision of Guarantees for External Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IX Occupation of the Company’s Money by Its Controlling Shareholder or Related Parties
for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
11
Konka Group Co., Ltd. First Quarter Report 2018
Part IV Financial Statements
I Financial Statements
1. Consolidated Balance Sheet
Prepared by Konka Group Co., Ltd.
March 31, 2018
Unit: RMB
Item March 31, 2018 December 31, 2017
Current assets:
Monetary assets 2,117,778,435.95 3,212,044,851.08
Settlement reserve
Interbank loans granted
Financial assets at fair value through profit or loss 717,258.83 296,799.53
Derivative financial assets
Notes receivable 5,055,795,872.09 5,178,668,988.23
Accounts receivable 4,250,342,804.16 3,443,095,947.26
Prepayments 535,176,019.76 467,123,091.74
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Interest receivable 1,372,365.15 1,813,256.77
Dividends receivable
Other receivables 272,036,785.37 182,405,099.39
Financial assets purchased under resale agreements
Inventories 4,579,475,103.24 4,690,363,565.53
Assets classified as held for sale
Current portion of non-current assets
Other current assets 1,988,929,615.46 1,715,326,868.81
Total current assets 18,801,624,260.01 18,891,138,468.34
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 692,112,236.33 712,170,399.09
12
Konka Group Co., Ltd. First Quarter Report 2018
Held-to-maturity investments
Long-term receivables
Long-term equity investments 1,335,317,343.74 1,319,987,343.74
Investment property 215,047,811.42 216,455,629.99
Property, plant and equipment 1,589,036,269.37 1,587,170,348.35
Construction in progress 140,555,936.41 135,863,821.01
Engineering materials
Proceeds from disposal of property, plant and equipment
Productive living assets
Oil and gas assets
Intangible assets 203,993,082.56 205,057,773.69
R&D expense
Goodwill 3,597,657.15 3,597,657.15
Long-term prepaid expense 154,564,404.30 150,060,937.30
Deferred income tax assets 337,948,558.46 307,942,263.12
Other non-current assets 28,167,948.00 29,290,828.00
Total non-current assets 4,700,341,247.74 4,667,597,001.44
Total assets 23,501,965,507.75 23,558,735,469.78
Current liabilities:
Short-term borrowings 7,094,776,142.17 6,927,472,037.35
Borrowings from central bank
Customer deposits and deposits from banks and other financial
institutions
Interbank loans obtained
Financial liabilities at fair value through profit or loss 13,760,747.13 47,482,470.50
Derivative financial liabilities
Notes payable 568,225,276.62 541,175,312.09
Accounts payable 3,323,036,647.61 3,612,216,266.59
Advances from customers 710,996,014.05 640,510,784.17
Financial assets sold under repurchase agreements
Handling charges and commissions payable
Payroll payable 193,833,901.36 291,370,297.67
Taxes payable 1,278,332,348.68 1,326,569,094.53
Interest payable 34,606,973.14 35,723,963.94
Dividends payable
13
Konka Group Co., Ltd. First Quarter Report 2018
Other payables 1,626,459,597.43 1,608,359,305.87
Reinsurance payables
Insurance contract reserve
Payables for acting trading of securities
Payables for underwriting of securities
Liabilities directly associated with assets classified as held for
sale
Current portion of non-current liabilities 394,871.76 374,358.99
Other current liabilities
Total current liabilities 14,844,422,519.95 15,031,253,891.70
Non-current liabilities:
Long-term borrowings 166,000,000.00 167,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables 41,025.69 61,538.46
Long-term payroll payable 12,312,017.04 13,361,821.86
Specific payables
Provisions 1,552,310.49 6,181,865.10
Deferred income 134,208,522.11 130,049,911.87
Deferred income tax liabilities 26,044,725.18 12,636,633.40
Other non-current liabilities
Total non-current liabilities 340,158,600.51 329,291,770.69
Total liabilities 15,184,581,120.46 15,360,545,662.39
Owners’ equity:
Share capital 2,407,945,408.00 2,407,945,408.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 104,732,242.30 104,732,242.30
Less: Treasury shares
Other comprehensive income 13,571,583.47 3,697,458.95
Specific reserve
Surplus reserves 1,217,644,874.79 1,217,644,874.79
General reserve
14
Konka Group Co., Ltd. First Quarter Report 2018
Retained earnings 4,315,883,789.97 4,260,125,492.57
Total equity attributable to owners of Parent Company 8,059,777,898.53 7,994,145,476.61
Non-controlling interests 257,606,488.76 204,044,330.78
Total owners’ equity 8,317,384,387.29 8,198,189,807.39
Total liabilities and owners’ equity 23,501,965,507.75 23,558,735,469.78
Legal representative: Liu Fengxi CFO: Li Chunlei
Head of the financial department: Feng Junxiu
2. Parent Company Balance Sheet
Unit: RMB
Item March 31, 2018 December 31, 2017
Current assets:
Monetary assets 734,187,293.95 1,760,838,390.83
Financial assets at fair value through profit or loss 717,258.83 296,799.53
Derivative financial assets
Notes receivable 2,816,719,863.12 2,864,064,309.99
Accounts receivable 5,559,277,595.37 4,732,153,992.25
Prepayments 1,394,806,157.68 1,066,260,182.37
Interest receivable 57,364,215.13 23,894,771.88
Dividends receivable 203,670,000.00 2,690,276.72
Other receivables 4,640,090,018.36 4,314,882,334.26
Inventories 1,657,710,511.67 2,090,697,937.23
Assets classified as held for sale
Current portion of non-current assets 100,000,000.00 100,000,000.00
Other current assets 1,662,409,701.81 1,547,454,872.74
Total current assets 18,826,952,615.92 18,503,233,867.80
Non-current assets:
Available-for-sale financial assets 562,612,236.33 562,612,236.33
Held-to-maturity investments
Long-term receivables
Long-term equity investments 2,868,044,424.45 2,649,074,424.45
Investment property 215,047,811.42 216,455,629.99
Property, plant and equipment 475,419,199.00 482,020,892.58
Construction in progress 112,209,457.15 79,927,345.88
Engineering materials
15
Konka Group Co., Ltd. First Quarter Report 2018
Proceeds from disposal of property, plant and equipment
Productive living assets
Oil and gas assets
Intangible assets 91,902,482.16 91,718,400.70
R&D expense
Goodwill
Long-term prepaid expense 73,730,479.55 78,305,555.97
Deferred income tax assets 299,354,801.03 279,324,511.96
Other non-current assets 20,000,000.00 20,000,000.00
Total non-current assets 4,718,320,891.09 4,459,438,997.86
Total assets 23,545,273,507.01 22,962,672,865.66
Current liabilities:
Short-term borrowings 3,436,156,337.31 3,269,730,888.60
Financial liabilities at fair value through profit or loss 13,760,747.13 47,482,470.50
Derivative financial liabilities
Notes payable 2,068,677,122.84 2,394,426,158.76
Accounts payable 6,756,231,381.01 6,167,204,323.22
Advances from customers 596,815,815.61 601,036,147.76
Payroll payable 117,014,504.66 163,066,135.71
Taxes payable 1,061,133,669.37 1,070,771,570.12
Interest payable 48,578,589.94 50,336,913.53
Dividends payable
Other payables 1,980,154,534.60 1,868,073,013.59
Liabilities directly associated with assets classified as held for
sale
Current portion of non-current liabilities
Other current liabilities
Total current liabilities 16,078,522,702.47 15,632,127,621.79
Non-current liabilities:
Long-term borrowings 166,000,000.00 167,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
16
Konka Group Co., Ltd. First Quarter Report 2018
Specific payables
Provisions 1,552,310.49 6,181,865.10
Deferred income 91,099,996.06 94,590,560.82
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 258,652,306.55 267,772,425.92
Total liabilities 16,337,175,009.02 15,899,900,047.71
Owners’ equity:
Share capital 2,407,945,408.00 2,407,945,408.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 111,525,163.22 111,525,163.22
Less: Treasury shares
Other comprehensive income -1,970,304.62 -1,970,304.62
Specific reserve
Surplus reserves 1,217,644,874.79 1,217,644,874.79
Retained earnings 3,472,953,356.60 3,327,627,676.56
Total owners’ equity 7,208,098,497.99 7,062,772,817.95
Total liabilities and owners’ equity 23,545,273,507.01 22,962,672,865.66
3. Consolidated Income Statement
Unit: RMB
Item January-March 2018 January-March 2017
1. Operating revenue 7,773,238,729.83 4,686,318,957.34
Including: Sales revenue 7,773,238,729.83 4,686,318,957.34
Interest revenue
Premium revenue
Handling charge and commission revenue
2. Cost of operating revenue 7,882,064,997.46 4,733,743,173.50
Including: Cost of sales 7,144,813,360.27 4,023,149,407.98
Interest expense
Handling charge and commission expense
Surrenders
Net claims paid
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Konka Group Co., Ltd. First Quarter Report 2018
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surtaxes 13,589,602.99 18,889,210.59
Selling expense 515,116,761.90 518,071,670.57
Administrative expense 162,232,118.05 135,856,678.53
Finance costs 61,086,438.88 42,775,464.29
Asset impairment losses -14,773,284.63 -4,999,258.46
Add: Gain on changes in fair value (“-” for loss) 34,142,182.67 -69,332,778.97
Investment income (“-” for loss) 36,786,042.34 34,979,227.70
Including: Share of profit or loss of joint ventures and
6,970,000.00
associates
Foreign exchange gain (“-” for loss)
Asset disposal income (“-” for loss)
Other income 79,427,673.98 -
3. Operating income (“-” for loss) 41,529,631.36 -81,777,767.43
Add: Non-operating revenue 84,351,129.33 113,572,905.33
Less: Non-operating expense 2,031,498.28 767,810.90
4. Pretax income (“-” for loss) 123,849,262.41 31,027,327.00
Less: Income tax expense 19,428,807.03 5,067,406.90
5. Net income (“-” for net loss) 104,420,455.38 25,959,920.10
5.1 Net income from continuing operations (“-” for net loss)
5.2 Net income from discontinued operations (“-” for net loss)
Attributable to owners of Parent Company 55,758,297.40 26,245,353.83
Attributable to non-controlling interests 48,662,157.98 -285,433.73
6. Other comprehensive income, net of tax 9,213,157.17 2,713,427.50
Attributable to owners of Parent Company 9,874,124.52 2,650,263.36
6.1 Items that will not be reclassified to profit or loss
6.1.1 Changes in net liabilities or assets caused by
remeasurements on defined benefit pension schemes
6.1.2 Share of other comprehensive income of investees that
will not be reclassified to profit or loss under equity method
6.2 Items that may subsequently be reclassified to profit or loss 9,874,124.52 2,650,263.36
6.2.1 Share of other comprehensive income of investees that
will be reclassified to profit or loss under equity method
6.2.2 Gains/Losses on changes in fair value of -31,342.08
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Konka Group Co., Ltd. First Quarter Report 2018
available-for-sale financial assets
6.2.3 Gains/Losses arising from reclassification of
held-to-maturity investments to available-for-sale financial assets
6.2.4 Effective gains/losses on cash flow hedges
6.2.5 Differences arising from translation of foreign
9,905,466.60 2,650,263.36
currency-denominated financial statements
6.2.6 Other
Attributable to non-controlling interests -660,967.35 63,164.14
7. Total comprehensive income 113,633,612.55 28,673,347.60
Attributable to owners of Parent Company 65,632,421.92 28,895,617.19
Attributable to non-controlling interests 48,001,190.63 -222,269.59
8. Earnings per share
8.1 Basic earnings per share 0.0232 0.0109
8.2 Diluted earnings per share 0.0232 0.0109
Legal representative: Liu Fengxi CFO: Li Chunlei
Head of the financial department: Feng Junxiu
4. Parent Company Income Statement
Unit: RMB
Item January-March 2018 January-March 2017
1. Sales revenue 3,669,669,375.96 3,528,146,131.01
Less: Cost of sales 3,269,110,540.85 3,096,777,598.35
Taxes and surtaxes 7,177,383.09 5,965,647.75
Selling expense 378,868,998.55 384,384,952.78
Administrative expense 96,348,524.41 97,836,429.53
Finance costs 92,033,331.44 100,233,983.39
Asset impairment losses
Add: Gain on changes in fair value (“-” for loss) 34,142,182.67 -34,248,996.77
Investment income (“-” for loss) 222,948,489.00 46,382,940.03
Including: Share of profit or loss of joint ventures and
6,970,000.00
associates
Asset disposal income (“-” for loss)
Other income 29,928,292.31 -
2. Operating income (“-” for loss) 113,149,561.60 -144,918,537.53
Add: Non-operating revenue 13,919,212.26 58,888,782.88
Less: Non-operating expense 1,773,382.89 465,857.89
3. Pretax income (“-” for loss) 125,295,390.97 -86,495,612.54
19
Konka Group Co., Ltd. First Quarter Report 2018
Less: Income tax expense -20,030,289.07 -21,258,680.23
4. Net income (“-” for net loss) 145,325,680.04 -65,236,932.31
4.1 Net income from continuing operations (“-” for net loss)
4.2 Net income from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax 5,222,526.42
5.1 Items that will not be reclassified to profit or loss
5.1.1 Changes in net liabilities or assets caused by
remeasurements on defined benefit pension schemes
5.1.2 Share of other comprehensive income of investees that
will not be reclassified into profit or loss under equity method
5.2 Items that may subsequently be reclassified to profit or loss 5,222,526.42
5.2.1 Share of other comprehensive income of investees that
will be reclassified into profit or loss under equity method
5.2.2 Gains/Losses on changes in fair value of available-for-sale
4,296,185.76
financial assets
5.2.3 Gains/Losses arising from reclassification of
held-to-maturity investments to available-for-sale financial assets
5.2.4 Effective gains/losses on cash flow hedges
5.2.5 Differences arising from translation of foreign
926,340.66
currency-denominated financial statements
5.2.6 Other
6. Total comprehensive income 150,548,206.46 -65,236,932.31
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMB
Item January-March 2018 January-March 2017
1. Cash generated by or used in operating activities:
Proceeds from sale of commodities and rendering of services 5,754,785,966.74 3,504,876,874.27
Net increase in customer deposits and deposits from banks and
other financial institutions
Net increase in loans from central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
20
Konka Group Co., Ltd. First Quarter Report 2018
Net increase in proceeds from disposal of financial assets at fair
value through profit or loss
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Tax rebates 168,573,547.32 102,339,410.87
Cash generated by other operating activities 172,592,473.35 118,039,119.57
Subtotal of cash generated by operating activities 6,095,951,987.41 3,725,255,404.71
Payments for commodities and services 6,072,157,862.54 4,440,141,644.59
Net increase in loans and advances to customers
Net increase in deposits in central bank and in interbank loans
granted
Payments for claims on original insurance contracts
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 481,603,150.56 458,532,563.30
Taxes paid 201,309,910.91 135,715,221.18
Cash used in other operating activities 360,246,580.12 320,303,048.58
Subtotal of cash used in operating activities 7,115,317,504.13 5,354,692,477.65
Net cash flows from operating activities -1,019,365,516.72 -1,629,437,072.94
2. Cash generated by or used in investing activities:
Proceeds from disinvestments 37,303,231.61 112,806.75
Investment income 27,461,877.60 30,385,376.69
Net proceeds from disposal of property, plant and equipment,
26,132.00 78,346,069.28
intangible assets and other long-lived assets
Net proceeds from disposal of subsidiaries or other business units
Cash generated by other investing activities 420,950,000.00 557,451,449.68
Subtotal of cash generated by investing activities 485,741,241.21 666,295,702.40
Payments for acquisition of property, plant and equipment,
87,522,934.00 73,620,997.55
intangible assets and other long-lived assets
Payments for investments 8,378,256.00 4,157,113.94
Net increase in pledged loans granted
Net payments for acquisition of subsidiaries and other business
units
Cash used in other investing activities 623,480,000.00 285,575,000.00
Subtotal of cash used in investing activities 719,381,190.00 363,353,111.49
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Konka Group Co., Ltd. First Quarter Report 2018
Net cash flows from investing activities -233,639,948.79 302,942,590.91
3. Cash generated by or used in financing activities:
Capital contributions received 26,400,000.00 265,000.00
Including: Capital contributions by non-controlling interests to
26,400,000.00 265,000.00
subsidiaries
Increase in borrowings obtained 2,430,850,602.39 2,238,876,860.00
Net proceeds from issuance of bonds
Cash generated by other financing activities 444,080,082.06
Subtotal of cash generated by financing activities 2,457,250,602.39 2,683,221,942.06
Repayment of borrowings 2,184,187,298.05 1,143,869,292.69
Payments for interest and dividends 86,485,560.15 105,020,297.25
Including: Dividends paid by subsidiaries to non-controlling
672,569.18 461,972.51
interests
Cash used in other financing activities 318,701.97
Subtotal of cash used in financing activities 2,270,672,858.20 1,249,208,291.91
Net cash flows from financing activities 186,577,744.19 1,434,013,650.15
4. Effect of foreign exchange rate changes on cash and cash
-42,957,026.83 5,263,241.18
equivalents
5. Net increase in cash and cash equivalents -1,109,384,748.15 112,782,409.30
Add: Cash and cash equivalents, beginning of the period 3,097,899,703.76 2,020,902,945.14
6. Cash and cash equivalents, end of the period 1,988,514,955.61 2,133,685,354.44
6. Parent Company Cash Flow Statement
Unit: RMB
Item January-March 2018 January-March 2017
1. Cash generated by or used in operating activities:
Proceeds from sale of commodities and rendering of services 4,460,261,836.82 4,295,329,683.99
Tax rebates 49,651,754.59 26,891,931.97
Cash generated by other operating activities 400,528,693.60 707,878,209.00
Subtotal of cash generated by operating activities 4,910,442,285.01 5,030,099,824.96
Payments for commodities and services 4,046,918,162.79 3,920,920,891.18
Cash paid to and for employees 308,420,198.90 276,264,044.77
Taxes paid 63,378,125.20 46,694,339.02
Cash used in other operating activities 1,120,437,119.07 1,124,083,766.45
Subtotal of cash used in operating activities 5,539,153,605.96 5,367,963,041.42
Net cash flows from operating activities -628,711,320.95 -337,863,216.46
2. Cash generated by or used in investing activities:
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Konka Group Co., Ltd. First Quarter Report 2018
Proceeds from disinvestments
Investment income 33,036,245.41 32,123,053.44
Net proceeds from disposal of property, plant and equipment,
26,132.00 98,058.25
intangible assets and other long-lived assets
Net proceeds from disposal of subsidiaries or other business units
Cash generated by other investing activities 517,743,720.30 557,000,000.00
Subtotal of cash generated by investing activities 550,806,097.71 589,221,111.69
Payments for acquisition of property, plant and equipment,
39,045,066.97 15,173,135.90
intangible assets and other long-lived assets
Payments for investments 212,000,000.00 40,000,000.00
Net payments for acquisition of subsidiaries and other business
units
Cash used in other investing activities 692,763,165.04 333,255,000.00
Subtotal of cash used in investing activities 943,808,232.01 388,428,135.90
Net cash flows from investing activities -393,002,134.30 200,792,975.79
3. Cash generated by or used in financing activities:
Capital contributions received
Increase in borrowings obtained 763,416,364.16 471,029,374.72
Net proceeds from issuance of bonds
Cash generated by other financing activities 141,159,013.75
Subtotal of cash generated by financing activities 763,416,364.16 612,188,388.47
Repayment of borrowings 667,515,069.15 165,708,656.06
Payments for interest and dividends 81,697,528.08 101,133,666.93
Cash used in other financing activities 318,701.97
Sub-total of cash used in financing activities 749,212,597.23 267,161,024.96
Net cash flows from financing activities 14,203,766.93 345,027,363.51
4. Effect of foreign exchange rate changes on cash and cash
-19,141,408.56 7,947,240.71
equivalents
5. Net increase in cash and cash equivalents -1,026,651,096.88 215,904,363.55
Add: Cash and cash equivalents, beginning of the period 1,743,269,944.67 973,613,753.40
6. Cash and cash equivalents, end of the period 716,618,847.79 1,189,518,116.95
II Independent Auditor’s Report
Indicate by tick mark whether the Q1 financial statements have been audited by an independent
auditor.
□Yes √ No
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Konka Group Co., Ltd. First Quarter Report 2018
The Q1 financial statements have not been audited by such an auditor.
The Board of Directors
Konka Group Co., Ltd.
April 27, 2018
24
