Konka Group Co., Ltd.
Interim Report 2019 (Summary)
Stock Code: 000016, 200016 Stock Name: Konka Group-A, Konka Group-B Announcement No. 2019-75
Bond code: 114418, 114423 Bond name: 19 Konka 01, 19 Konka 02
114488, 114489 19 Konka 03, 19 Konka 04
114523, 114524 19 Konka 05, 19 Konka 06
KONKA GROUP CO., LTD.
INTERIM REPORT 2019 (SUMMARY)
Part I Important Notes
This Abstract is based on the full text of the Semi-Annual Report. In order for a full understanding of
the operating results, financial condition and future development planning of the Company, investors
are kindly reminded to read the full text carefully on the media designated by the China Securities
Regulatory Commission (the “CSRC”).
Objections raised by any of the directors, supervisors or senior management against any contents in
this Report or its summary:
Name Office title Objection and explanation of why
Statement of objection:
Except for the following directors, all the other directors attended in person the Board meeting for the
review of this Report and its summary.
Reason for not attending Proxy entrusted to attend the
Name Office title
meeting in person meeting
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable √ Not applicable
This Report and its summary have been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
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Konka Group Co., Ltd.
Interim Report 2019 (Summary)
Part II Key Corporate Information
1. Stock Profile
Stock name Konka Group-A, Konka Group-B Stock code 000016, 200016
Stock exchange for stock
Shenzhen Stock Exchange
listing
Changed stock name (if any) N/A
Contact information Board Secretary Securities Representative
Name Wu Yongjun Miao Leiqiang
Board Secretariat, 24/F, Konka R&D Center, 28 Board Secretariat, 24/F, Konka R&D Center, 28
Keji South Twelfth Road, Science and Keji South Twelfth Road, Science and
Office address
Technology Park, Yuehai Street, Nanshan Technology Park, Yuehai Street, Nanshan
District, Shenzhen, Guangdong Province, China District, Shenzhen, Guangdong Province, China
Tel. 0755-26609138 0755-26609138
E-mail address szkonka@konka.com szkonka@konka.com
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
H1 2019 H1 2018 Change (%)
Operating revenue (RMB) 26,036,442,813.84 17,625,414,769.82 47.72%
Net profit attributable to the listed
352,767,020.73 341,793,039.03 3.21%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before -622,911,633.57 -300,870,612.80 -107.04%
exceptional gains and losses (RMB)
Net cash generated from/used in
-2,042,956,171.77 -1,838,158,705.86 -11.14%
operating activities (RMB)
Basic earnings per share (RMB/share) 0.1465 0.1419 3.24%
Diluted earnings per share (RMB/share) 0.1465 0.1419 3.24%
Weighted average return on equity (%) 4.25% 4.19% 0.06%
30 June 2019 31 December 2018 Change (%)
Total assets (RMB) 37,939,411,460.71 32,985,061,889.03 15.02%
Equity attributable to the listed
8,239,642,204.00 8,104,736,790.53 1.66%
company’s shareholders (RMB)
3. Shareholders and Their Holdings as at 30 June 2019
Unit: share
Number of preferred shareholders with resumed
Number of ordinary shareholders 92,812 0
voting rights (if any)
Top 10 shareholders
Shareholdi Shares in pledge or
Nature of Number of Restricted frozen
Name of shareholder ng
shareholder shares shares
percentage Status Shares
OVERSEAS CHINESE TOWN State-owned
21.75% 523,746,932 0
ENTERPRISES CO., LTD legal person
CITIC SECURITIES Foreign legal 7.56% 182,100,202 0
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Konka Group Co., Ltd.
Interim Report 2019 (Summary)
BROKERAGE (HONG KONG) person
CO., LTD.
Foreign legal
HOLY TIME GROUP LIMITED 2.33% 56,139,100 0
person
GUOYUAN SECURITIES Foreign legal
2.25% 54,203,779 0
BROKER (HK) CO., LTD. person
Foreign legal
GAOLING FUND,L.P. 2.19% 52,801,250 0
person
ZHANG XIAOYU Domestic
1.13% 27,283,178 0
natural person
HONG KONG SECURITIES Foreign legal
1.13% 27,256,732 0
CLEARING COMPANY LTD. person
CHINA MERCHANTS State-owned
0.95% 22,879,324 0
SECURITIES (HK) LIMITED legal person
NAM NGAI Foreign natural
0.93% 22,453,440 0
person
NATIONAL SOCIAL
SECURITY FUND- Other 0.88% 21,099,537 0
PORTFOLIO 118
Jialong Investment Limited, a wholly-funded subsidiary of the Company’s first majority
shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” for short), holds
180,001,110 and 18,360,000 ordinary shares in the Company respectively through CITIC
Related or acting-in-concert
Securities Brokerage (Hong Kong) Co., Ltd. and China Merchants Securities (HK) Limited.
parties among shareholders above
Jialong Investment Limited and Overseas Chinese Town Enterprises Co. are parties acting in
concert. Other than that, it is unknown whether the other shareholders are related parties or
acting-in-concert parties or not.
Shareholders conducting margin Zhang Xiaoyu holds 27,283,178 A-shares in the Company through her account of collateral
trading securities for margin trading in Huaxi Securities Co., Ltd.
4. Change of Controlling Shareholder or Actual Controller in Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The actual controller remained the same in the Reporting Period.
5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
6. Corporate bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were
undue before the date of this Report’s approval or were due but could not be redeemed in full?
Such information is disclosed as below:
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Konka Group Co., Ltd.
Interim Report 2019 (Summary)
(1) Basic Information of Corporate Bonds
Bonds
balance Coupon
Name Abbr. Code Due date
(RMB’0,00 rate
0)
Privately placed corporate bonds in 2019 of 19 Konka
114418 14 January 2022 100,000 5.00%
Konka Group Co., Ltd (Tranche I) (Variety I) 01
Privately placed corporate bonds in 2019 of 19 Konka
114423 14 January 2022 150,000 5.00%
Konka Group Co., Ltd (Tranche I) (Variety II) 02
Privately placed corporate bonds in 2019 of 19 Konka
114488 3 June 2022 50,000 4.50%
Konka Group Co., Ltd (Tranche II) (Variety I) 03
Privately placed corporate bonds in 2019 of 19 Konka
114489 3 June 2022 50,000 4.70%
Konka Group Co., Ltd (Tranche II) (Variety II) 04
Privately placed corporate bonds in 2019 of 19 Konka
114523 22 July 2022 80,000 4.53%
Konka Group Co., Ltd (Tranche III) (Variety I) 05
Privately placed corporate bonds in 2019 of
19 Konka
Konka Group Co., Ltd (Tranche III) (Variety 114524 22 July 2022 70,000 4.70%
06
II)
(2) Financial Indicators as at 30 June 2019
Item 30 June 2019 31 December 2018 Change (%)
Debt/asset ratio 74.08% 71.35% 2.73%
Item H1 2019 H1 2018 Change (%)
EBITDA-to-interest coverage
2.75 2.39 15.06%
ratio
Part III Operating Performance Discussion and Analysis
(I) Business Overview of Reporting Period
Is the Company subject to any industry-specific disclosure requirements?
No.
The Company carried on with its long-term development strategy of “Technology + Industry + Park”
during the Reporting Period, made progress in the following aspects:
1. The mixed-ownership reform progressed further, bringing more vitality to the subordinates. During
the Reporting Period, in order to further promote the mixed-ownership reform on the subordinates
and refine the asset allocation of the Company, Shenzhen Konka E-display Co., Ltd. introduced
Shenzhen MACC Investment Holding Co., Ltd., which owns upstream resources, as a shareholder. In
addition, the multimedia business of the Company kept enhancing its competitiveness by taking
reform measures such as promoting the mixed-ownership reform on the sales subsidiaries and
building an independent domestic service system.
2. Efforts were stepped up in technological R&D to enhance independent innovation. During the
Reporting Period, the Company proactively implemented the approach of “independent innovation +
technology introduction”. R&D investment increased by 14.74% year-on-year in the first half of this
year.and built a three-level lab system (a comprehensive lab at the Headquarters level, key labs at the
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Konka Group Co., Ltd.
Interim Report 2019 (Summary)
level of cooperation between the Headquarters and the business departments, and improvement labs
at the business department level). More than a dozen of high-end personnel from around the world
were introduced to the system, and an intent was reached with research institutes such as the
Shenzhen Institutes of Advanced Technology of the Chinese Academy of Sciences and the Harbin
Institute of Technology, Shenzhen to jointly produce post-doctoral talent. During the period, a
number of programmes featuring independent innovation by the Company received commendations,
including the National Second Prize for Progress in Science and Technology for the programme of the
Digital TV Broadcast System and the Domestication of Core Chips, the Third Prize for Progress in
Science and Technology for the programme of the Research and Industrialization of Key Quality
Management Technologies for Food in Refrigerators by the China Light Industry Council, as well as
the inclusion of the programme of the 8K Equipment End-to-End Signal Connection Key Technology
and R&D of Terminal Display Products in the Key R&D Programmes of Guangdong Province.
3.The Company continued to revitalize the Konka brand. During the Reporting Period, the Company
took proactive measures to revitalize its brand through the approach of “enhance the top brand image,
increase the brand’s popularity among young people, and upgrade the brand image by delivering a
good brand story”. The brand promotion investment increased by 20.08% year-on-year in the first
half of this year.The Company tried to make its brand more attractive to young and international
consumers by means of deep cooperation with widely-recognized media and platforms, as well as
with Lu Han, a top star.
4. The core businesses saw further improvement. As a result, it recorded operating revenue of
RMB26.036 billion for the period, up 47.72% year-on-year.During the Reporting Period, the
environmental business reported close to RMB4.863 billion in operating revenue with steady
progress made in water treatment, recycling of renewable resources and new materials; the white
goods business posted a 50% year-on-year growth in operating revenue thanks to measures such as
the integration of online and offline marketing and product upgrade in addition to the integration of
the “Konka + Frestec” brand resources; and the multimedia business proactively refined its product
mix, promoted mechanism reform and saw a markedly larger size of both the e-commerce and
overseas operations, where a great deal of effort was put;.
5. Technology park development moved on. According to the strategy of “Technology + Industry +
Park”, the Company kept pace with the government planning for industry structure adjustment and
transformation and upgrade, and proactively promoted its technology park business on the basis of its
unique market, industry and operational resources. Following the implementation of a number of
technology park projects in 2018, the Company moved on to plan for new parks in Haimen, Lankao,
Yantai, Chongqing and other cities in the Reporting Period.
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Konka Group Co., Ltd.
Interim Report 2019 (Summary)
(II) Matters Related to Financial Reporting
1. Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared
to Last Accounting Period
√ Applicable □ Not applicable
The Ministry of Finance issued the revised versions of the accounting standards in relation to
financial instruments, including the Accounting Standard No. 22 for Business
Enterprises—Recognition and Measurement of Financial Instruments, the Accounting Standard No.
23 for Business Enterprises—Transfer of Financial Assets and the Accounting Standard No. 24 for
Business Enterprises—Hedge Accounting on 31 March 2017, as well as the Accounting Standard No.
37 for Business Enterprises—Presentation of Financial Instruments on 2 May 2017. The four revised
accounting standards (hereinafter referred to as the “New Accounting Standards for Financial
Instruments”) applied, from 1 January 2019, to enterprises listed domestically in China.
The Company has adopted the New Accounting Standards for Financial Instruments since 1 January
2019 and prepared its financial statements in accordance with the Format of Financial Statements for
General Enterprises (applicable for enterprises adopting the New Accounting Standards for Financial
Instruments or the new revenue accounting standard). Pursuant to the New Accounting Standards for
Financial Instruments, the Company categorizes and measures financial instruments (financial assets
held by the Company) and their impairments based on the “business models” and “cash flow
characteristics of financial asset contracts”, changes the accounting treatment of impairments in
financial assets from the “incurred loss method” to the “expected loss method”, and records the
difference between the original carrying amount of a financial instrument and the new carrying
amount on the date of the adoption of the New Accounting Standards for Financial Instruments in the
beginning retained earnings or other comprehensive income of 2019. And the format of the
Company’s financial statements is adjusted according to the Format of Financial Statements for
General Enterprises (applicable for enterprises adopting the New Accounting Standards for Financial
Instruments or the new revenue accounting standard) (regulatory document CK [2018] No. 15). The
aforesaid accounting policy changes have no material impact on the financial condition, operating
results or cash flows of the Company.
2. Retrospective Restatements due to Correction of Material Accounting Errors in Reporting
Period
□ Applicable √ Not applicable
No such cases.
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Konka Group Co., Ltd.
Interim Report 2019 (Summary)
3. Changes to Scope of Consolidated Financial Statements Compared to Last Accounting
Period
√ Applicable □ Not applicable
How subsidiary was obtained or disposed Effects on overall operations and
Subsidiary
in the Reporting Period operating performance
Shenzhen Konka Shengxing Industrial Set-up No material effects
Co., Ltd.
Shenzhen Youzhihui Technology Co., Set-up No material effects
Ltd.
Suining Konka Electronic Technological Set-up No material effects
Innovation Co., Ltd.
Shenzhen Xiaojia Technology Co., Ltd. Set-up No material effects
Yibin Konka Smart Technology Co., Ltd. Set-up No material effects
Konka Huanjia (Henan) Environmental Set-up No material effects
Technology Co., Ltd.
Laizhou Lairun Sewage Treatment Set-up No material effects
Co.,Ltd.
Funan Kangrun Water Co., Ltd. Set-up No material effects
Weifang Sihai Kangrun Investment Set-up No material effects
Operation Co., Ltd.
Hefei Yihe Electronic Co., Ltd. Set-up No material effects
Lushan Kangrun Environment Set-up No material effects
Management Co., Ltd.
Shenzhen Huanan Investment Set-up No material effects
Partnership (Limited Partnership)
Chongqing Konka Technology Set-up No material effects
Development Co., Ltd.
Dongguan Konka Investment Co., Ltd. Set-up No material effects
Rushan Yikang Shell Technology Cancellation
No material effects
Incubator Co., Ltd.
Yantai Huanhai Xinze Enterprise Cancellation
No material effects
Management Co., Ltd.
Transfer of 15% equity interests in The equity interests transfer generated
Shenzhen Konka E-display Co., Ltd. Shenzhen Konka E-display Co., Ltd. great gains
Chuzhou Konka Technology & Industry Transfer of 51% equity interests in
The equity interests transfer generated
Development Co., Ltd. Chuzhou Konka Technology & Industry
great gains
Development Co., Ltd.
The Board of Directors
Konka Group Co., Ltd.
6 August 2019
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