SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
深圳中恒华发股份有限公司
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
August 2021
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Section I. Important Notice, Contents and Interpretation
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of Shenzhen Zhongheng HUAFA Co., Ltd. (hereinafter referred to as
the Company) hereby confirm that there are no any fictitious statements,
misleading statements, or important omissions carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completion of the whole contents.
Li Zhongqiu, Principal of the Company, Yang Bin, person in charger of
accounting works and Chuai Guoxu, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2021
Semi-Annual Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
Concerning the forward-looking statements with future planning involved in the
Report, they do not constitute a substantial commitment for investors. Majority
investors are advised to exercise caution of investment risks.
Risks factors are being well-described in the Report, found more in risks factors
and countermeasures disclosed in Prospects for Future Development of the
Board of Directors’ Report.
The Company has no plan of cash dividends carried out, bonus issued and
capitalizing of common reserves either.
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Contents
Section I Important Notice, Contents and Interpretation .............................................................. 2
Section II Company Profile and Main Financial Indexes .............................................................. 6
Section III Management Discussion and Analysis ............................................................................................... 9
Section IV Corporate Governance ................................................................................................................ 17
Section V Enviornmental and Social Responsibility .......................................................................................... 18
Section VI Important Matters ........................................................................................................ 19
Section VII Changes in shares and particular about shareholders ............................................. 33
Section VIII Preferred Stock ........................................................................................................... 38
Section IX Corporate Bonds ........................................................................................................... 39
Section X Financial Report ............................................................................................................. 40
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Documents Available for Reference
I. Text of the Annual Report caring signature of the Chairman;
II. Financial statement carrying the signatures and seals of the person in charge of the Company, principal of the
accounting works and person in charge of accounting organ;
III. All documents of the Company and manuscripts of public notices that disclosed in the China Securities journal,
Securities Times and Hong Kong Commercial Daily designated by CSRC in the report period;
IV. Article of Association
V. Other relevant files.
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Interpretation
Items Refers to Contents
Company, Shen HUAFA Refers to SHENZHEN ZHONGHENG HUAFA CO., LTD.
Hengfa Technology Refers to Wuhan Hengfa Technology Co., Ltd.
HUAFA Property Refers to Shenzhen Zhongheng HUAFA Property Co., Ltd
HUAFA Lease Refers to Shenzhen HUAFA Property Lease Management Co., Ltd
Wuhan Zhongheng New Science & Technology Industrial Group Co.,
Wuhan Zhongheng Group Refers to
Ltd
HK Yutian Refers to Hong Kong Yutian International Investment Co., Ltd.
Hengsheng Photo-electricity Refers to Wuhan Hengsheng Photo-electricity Industry Co., Ltd.
Hengsheng Yutian Refers to Wuhan Hengsheng Yutian Industrial Co., Ltd.
Yutian Henghua Refers to Shenzhen Yutian Henghua Co., Ltd.
HUAFA Hengtian Refers to Shenzhen HUAFA Hengtian Co., Ltd.
HUAFA Hengtai Refers to Shenzhen HUAFA Hengtai Co., Ltd.
Shenzhen Vanke Real Estate Co., Ltd, now renamed as Shenzhen Vanke
Shenzhen Vanke Refers to
Development Co., Ltd.
Vanke Guangming Refers to Shenzhen Vanke Guangming Real Estate Development Co., Ltd
V& T Law Firm Refers to Shenzhen V& T Law Firm
Zhongheng Semiconductor (former Shenzhen Zhongheng Semiconductor Co., Ltd. (former “Zhongheng
Refers to
“Huafa Technology ”) Huafa Technology Co., Ltd”)
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Section II. Company Profile and Main Financial Indexes
I. Company profile
Short form of the stock Shen HUAFA A, Shen HUAFA B Stock code 000020, 200020
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
深圳中恒华发股份有限公司
Chinese)
Short form of the Company
深华发
(in Chinese) (if applicable)
Foreign name of the
SHENZHEN ZHONGHENG HUAFA CO., LTD.
Company (if applicable)
Legal representative Li Zhongqiu
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Niu Zhuo
618, 6/F, East Tower, Huafa Building,
Contact add. No.411 Building, Huafa (N) Road,
Futian District, Shenzhen
Tel. 0755-86360201
Fax. 0755-86360201
E-mail huafainvestor@126.com.cn
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2020.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2020.
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
Current period Same period of last year Changes over last year
Operating income(RMB) 391,633,808.55 300,703,421.38 30.24%
Net profit attributable to shareholders of
7,023,114.72 3,165,597.55 121.86%
the listed company(RMB)
Net profit attributable to shareholders of
the listed company after deducting 7,067,951.02 3,167,896.46 123.11%
non-recurring gains and losses(RMB)
Net cash flow arising from operating
-21,818,369.59 21,200,212.24 -202.92%
activities(RMB)
Basic earnings per share(RMB/Share) 0.0248 0.0112 121.43%
Diluted earnings per share(RMB/Share) 0.0248 0.0112 121.43%
Weighted average ROE 2.07% 0.96% 1.11%
Changes over period-end
Current period-end period-end of last year
of last year
Total assets(RMB) 673,387,235.69 627,779,621.06 7.26%
Net assets attributable to shareholder of
343,271,852.01 336,248,737.29 2.09%
listed company(RMB)
V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item Amount Note
Gain/loss of entrusted investment or assets management 149,767.58
Other non-operating income and expenditure except for the
-194,603.88
aforementioned items
Total -44,836.30 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Section III Management Discussion and Analysis
I. Main businesses of the company in the reporting period
After years of development, the company has gradually formed two main businesses in industry and property
management. Among them, the industrial business mainly includes injection molding, polylon (light-weight
packaging materials), and complete machine production and sales of liquid crystal display, property management
business is mainly the lease of its own property.
In the first half of 2021, the company achieved operating income of 391,633,800 yuan, up 30.24% year on
year; Operating profit was 8,552,400 yuan, up 115.69% year on year; Net profit was 7.023,100 yuan, up 121.86%
year on year. In the first half of the year, the operating income of industrial production was 366,572,800 yuan, up
30.37% year on year; the operating profit was 887,700 yuan, up 189.91% year on year; and the net profit was
814,400 yuan, up 198.77% year on year. Property leasing business in the first half of the year achieved operating
income of 250.61 million yuan, 34.01% more than the same period last year, operating profit of 756.35 million
yuan, 52.7% more than the same period last year, net profit of 6.1079 million yuan, 53.06% more than the same
period last year.
II. Core competitiveness analysis
All industrial lands of the Company located in Shenzhen were taken into the first batch of plan under 2010
Shenzhen urban upgrade planning. In the future, development and operation of self-owned land resources would
become the income source of the Company on a long-term and stable basis.
III. Main business analysis
See the “I. Main businesses of the company in the reporting period”
Change of main financial data on a y-o-y basis
In RMB
Same period of last
Current period y-o-y changes (+,-) Reasons
year
Video incomes
Operation income 391,633,808.55 300,703,421.38 30.24%
increased
Operation cost 334,484,096.74 263,959,652.63 26.72%
After-sales service fee
Sales expenses 14,094,617.96 9,100,079.39 54.88%
increased
Administrative
22,680,307.24 17,082,362.66 32.77% Repair fee increased
expenses
Financial cost 5,241,702.86 3,484,228.81 50.44% Exchange increased
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Income tax expense 1,590,676.66 837,369.58 89.96% Profit growth
Increase new products
R&D investment 3,955,647.50 2,423,425.26 63.23%
in the Period
The inventory
Net cash flow arising increased in the Period
from operation -21,818,369.59 21,200,212.24 -202.92% due to the epidemic in
activities the first half year of
last year
Net cash flow arising
Investment for fixed
from investment -2,316,374.60 -1,338,379.56 -73.07%
assets increased
activities
Net cash flow arising
Bank loans increased
from financing 23,182,219.89 -34,838,186.71 166.54%
in the period
activities
The inventory and
Net increase of cash
-1,355,867.36 -14,832,093.81 -90.86% account receivable
and cash equivalent
increased
Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
Constitution of operation income
In RMB
Current period Same period of lat year
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y(+,-)
income income
Total operation
391,633,808.55 100% 300,703,421.38 100% 30.24%
income
According to industries
Display 198,422,034.91 50.67% 163,278,927.45 48.63% 4.21%
Plastic injection
106,953,726.74 27.31% 85,278,752.42 28.36% -3.22%
hardware
Foam parts 22,259,297.79 5.68% 19,908,274.02 6.62% -0.94%
Property leasing 25,060,998.64 6.40% 18,701,335.82 6.22% 0.18%
Scrap income 38,492,780.64 9.83% 12,121,666.69 4.03% 5.80%
Utilities and others 444,969.83 0.11% 1,414,464.98 0.47% -0.36%
According to products
Display 198,422,034.91 50.67% 163,278,927.45 48.63% 4.21%
Plastic injection 106,953,726.74 27.31% 85,278,752.42 28.36% -3.22%
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
hardware
Foam parts 22,259,297.79 5.68% 19,908,274.02 6.62% -0.94%
Property leasing 25,060,998.64 6.40% 18,701,335.82 6.22% 0.18%
Scrap income 38,492,780.64 9.83% 12,121,666.69 4.03% 5.80%
Utilities and others 444,969.83 0.11% 1,414,464.98 0.47% -0.36%
According to region
Hong Kong and
95,569,502.38 22.37% 105,186,479.34 34.98% -12.61%
Taiwan
Central China 203,317,499.60 51.92% 136,683,631.65 45.45% 6.67%
East China 87,594,449.15 22.37% 39,318,383.66 13.08% 9.29%
South China 5,152,357.42 1.32% 19,514,926.73 6.49% -5.17%
The industries, products, or regions accounting for over 10% of the company’s operating revenue or operating profit
√Applicable □ Not applicable
In RMB
Increase/decrea
Increase/decrea Increase/decrea
Operation Operation Gross profit se of gross
se of operation se of operation
income cost ratio profit ratio
income y-o-y cost y-o-y
y-o-y
According to industries
Display 198,422,034.91 182,038,564.14 8.26% 22.00% 19.00% 1.69%
Plastic
injection 106,953,726.74 96,354,708.77 9.91% 25.00% 22.00% 2.25%
hardware
According to products
Display 198,422,034.91 182,038,564.14 8.26% 22.00% 19.00% 1.69%
Plastic
injection 106,953,726.74 96,354,708.77 9.91% 25.00% 19.00% 2.25%
hardware
According to region
Hong Kong and
95,746,383.92 79,562,859.88 16.90% -8.97% -19.29% 10.62%
Taiwan
Central China 207,413,929.85 194,921,928.05 6.02% 67.15% 70.48% -1.84%
East China 87,594,449.15 80,998,643.40 7.53% 122.78% 120.08% 1.14%
South China 5,152,357.42 6,030,530.61 -17.04% -72.26% 195.58% -106.06%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one year’s scope of period-end
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
□ Applicable √ Not applicable
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
Y-o-y
Item 2021-6-30 2021-1-1 changes Causes
(+,-)
20,240,464.79 -98% Discounting of note
Note receivable 491,683.78 receivable increased in
the period
5,774,948.69 10,057,385.11 -43% Discounting of note
Receivable financing receivable increased in
the period
22,540,779.20 4,466,949.96 405% Current accounts
Other account receivable
increased
70,166,013.49 85% Inventory has
Inventory 129,917,660.51 significantly increased
from Hengfa
4,255,643.19 -83% The input tax to be
Other current assets
741,380.21 deducted declined
705% Contract renewal of SAP
Long-term deferred expenses
623,601.59 77,445.31
51,089,579.00 12,527,808.00 308% Loans of Hengfa
Short-term loans
increased
167% Account received in
Contractual liabilities
765,555.97 287,140.66 advance increased
3,886,717.29 5,737,366.59 -32% Last year’s year-end
Wages payable
bonus distributed
582% Loans increased
Interest payable
179,523.72 26,335.66
18,322,972.81 -99% Notes already endorsed
Other current liability
211,799.13 and outstanding declined
Y-o-y
Item Jan.- Jun. 2021 Jan.- Jun. 2020 changes Causes
(+,-)
Operation tax and surcharge 1,428,361.92 1,004,056.05 42% Additional tax increased
1502% Loan subsidies
Interest income
189,945.55 11,856.69
-99% Government subsidy
Other income
3,553.35 348,540.00
124% Wealth management
Investment income
149,767.58 66,780.40 income
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
512% Government subsidy
Non-operation revenue
276,599.04 45,200.06
2847% Penalty expenses
Non-operation expense
215,202.92 7,302.38
IV. Analysis of the non-main business
√Applicable □Not applicable
In RMB
Whether be sustainable
Amount Ratio in total profit Description of formation
(Y/N)
Investment
149,767.58 1.74% Interest settlement Y
income
Asset Inventory reduction
1,350,000.00 15.67% N
impairment provision
Non-operation
276,599.04 3.21% Government subsidy N
revenue
Non-operation
215,202.92 2.50% Penalty N
expense
V. Assets and liability analysis
1. Major changes of assets composition
In RMB
End of the current period End of last year
Ratio in Ratio in Ratio
Notes of major changes
Amount total Amount total changes
assets assets
Monetary fund 59,612,186.22 8.85% 60,968,053.58 9.71% -0.86%
Account
135,750,939.59 20.16% 128,063,911.79 20.40% -0.24%
receivable
Inventory 129,917,660.51 19.29% 70,166,013.49 11.18% 8.11% Inventory from Hengfa increased
Investment real
46,360,497.13 6.88% 47,224,662.27 7.52% -0.64%
estate
Fixed assets 191,477,026.08 28.43% 193,605,444.53 30.84% -2.41%
Construction in
740,000.00 0.11% 740,000.00 0.12% -0.01%
process
Short-term 51,089,579.00 7.59% 12,527,808.00 2.00% 5.59% Loans increased in the period
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
loans
Contractual
765,555.97 0.11% 287,140.66 0.05% 0.06%
liabilities
Long-term
61,000,000.00 9.06% 61,000,000.00 9.72% -0.66%
loans
2. Major foreign assets
□ Applicable √ Not applicable
3. Assets and liability measured by fair value
□ Applicable √ Not applicable
4. Assets right restriction till end of reporting period
Monetary fund 42,990,989.02 Security deposit
Fixed assets 12,375,571.51 Collateral for borrowing
Intangible assets 6,752,967.68 Collateral for borrowing
Disposal of fixed assets 92,857,471.69 Court seizure
Investment real estate 11,503,400.02 Collateral for borrowing
Total 166,480,399.92
VI. Investment analysis
1. Overall situation
□ Applicable √ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company has no securities investment in the Period.
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SEMI-ANNUAL REPORT 2021
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period.
VII. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
VIII. Analysis of main holding company and stock-jointly companies
√Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company Main Register Total Operating Operatin
Type Net assets Net profit
name business capital assets revenue g profit
R&D,
production
and sales
Hengfa
of the 181,643,11 517,551,00 227,012,99 366,572,80 887,707.
Technolog Subsidiary 813,963.14
products as 1.00 0.92 6.37 9.91 92
y Company
well as
export
business
Leasing
HUAFA and
1,000,000. 6,324,584. 2,914,794. 1,253,72
Property Subsidiary manageme 421,786.50 1,043,626.48
00 38 33 7.86
Company nt of own
property
Particular about subsidiaries obtained or disposed in report period
□Applicable √ Not applicable
Explanation of main holding company and stock-jointly companies
Nil
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SEMI-ANNUAL REPORT 2021
IX. Structured vehicle controlled by the Company
□ Applicable √Not applicable
X. Risks and countermeasures
(1) Business analysis
Wuhan Hengfa Technology, as an important subsidiary of the company, is faced with increasing pressure under the
influence of intensifying market competition and tight supply of raw and auxiliary materials and other factors, the
key to solve the dilemma is to upgrade technology, enhance the added value of technology, and improve
profitability; In the context of downstream consumer demand upgrading, it improves production efficiency by
increasing the research and development of new products, adjusting and improving the product structure, and
improving the production process; At the same time, it expands upstream supply channels of raw and auxiliary
materials to avoid material shortage affecting production.
For a certain period of time, property leasing is still another important business for the development of the
company. Making full use of the self-owned property to provide operation, leasing and service businesses will
bring a certain contribution to the company's cash flow. After the gradual implementation of the urban renewal
project, it will bring long-term and stable sources of income for the company.
(2) Business plan
◆Industrial Business Upgrade
The epidemic of COVID-19 is not over yet, and all colleagues in the company continued to work hard to serve
existing customers, vigorously expanded the market, and gained more market share; Meanwhile, the Company
will intensify the development of raw & auxiliary materials suppliers in shortage within the market, try to avoid
the negative impact of upstream material shortage on the Company’s production. On the basis of maintaining
customers, actively looked for high-quality technology projects in consumer electronics, and gradually realized
industrial upgrading through technology optimization and management optimization; at the same time, it
strengthened management, improved production efficiency, improved product quality, and made full use of the
geographical advantages of the company to make the business bigger and stronger.
◆Promote the urban renewal project
Speed up the promotion of renewal unit project of Huafa District, Gongming Street, Guangming New District,
Shenzhen and the renewal project renovation progress of Huafa Building, Huaqiang North Street, Futian District,
Shenzhen, accelerate the settlement of project procedures, and strive to make stage progress as early as possible.
◆Continue to focus on strengthening the company’s internal control
In 2021, the company will further optimize the corporate governance structure and improve the internal control
system and process and strictly implement and improve the executive ability of relevant system in accordance
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
with the governance requirements of listed companies, the company’s management and relevant departments will
execute the administrative provisions for approval procedures of fund utilizing, management system of related
transactions, working system of internal audit, internal reporting system of major information in strict accordance
with the requirements of internal control documents.
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Section IV Corporate Governance
I. In the report period, the Company held annual general meeting and extraordinary
shareholders’ general meeting
1. Shareholders’ General Meeting in the report period
Ratio of investor Date of
Session of meeting Type Date Resolutions
participation disclosure
Juchao
Website(http://www.cninfo.com.cn/new/
disclosure/detail?plate=szse&org
Annual General
AGM 48.98% 20 May 2021 21 May 2021 Id=gssz0000020&stockCode=00
Meeting of 2020
0020&announcementId=120784
5176&announcementTime=2020
-05-22)
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Changes of directors, supervisors and senior executives
□ Applicable √ Not applicable
Directors, supervisors and senior executives of the Company has no changes during the reporting period, found more in the Annual
Report of 2020.
III. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the midterm.
IV. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
The Company had no stock incentive plan, employee stock ownership plan or other employee incentive in the reporting period.
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Section V. Environmental and Social Responsibility
I. Important environmental issues
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
□ Yes √No
Administrative penalties imposed for environmental issues during the reporting period
Impact on the
The company or Reasons for production & Corrective
Violations Penalty results
subsidiary penalty operation of listed measures
company
N/A N/A N/A N/A N/A N/A
Other environmental information disclosed with reference to the key emission units
N/A
Reasons for not disclosed other environmental information
N/A
II. Social responsibility
Not applicable
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Section VI. Important Matters
I. Commitments that the actual controller, shareholders, related party, offeror and committed party as the
Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting
period
□Applicable √Not applicable
During the reporting period of the company, there are no commitments made by the actual controller, shareholders, related parties,
purchasers and the company that have been completed in the reporting period or have not been completed by the end of the reporting
period.
II. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
III. Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.
IV. Appointment and non-reappointment (dismissal) of CPA
Whether the financial report has been audited or not
□Yes √no
The company's semi-annual report has not been audited.
V. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion”
that issued by CPA
□ Applicable √Not applicable
VI. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √Not applicable
VII. Bankruptcy reorganization
□ Applicable √Not applicable
No bankruptcy reorganization for the Company in reporting period
20
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
VIII. Lawsuits
Significant lawsuits and arbitration
√Applicable □Not applicable
Amoun
t of Predicte The results
The basic
money d Advances in and effects Execution of the
situation of Disclosure
involve liabiliti litigation of litigation litigation Disclosure index
litigation date
d (in 10 es (Arbitration) (Arbitration (Arbitration)
(Arbitration)
thousan (Y/N) )
d Yuan)
In September
In September
2018, Shenzhen
2016, Wuhan
Vanke applied for
Zhongheng
compulsory
Group Co.,
execution. In
Ltd. and the
October 2019, due
Company
Ruling on 16 to the outsider's
and
August application of
Shenzhen "objection to http://www.cninfo.com
2017; put
Vanke were execution" and .cn/cninfo-new/disclos
forward the
applied for "non-enforcement ure/szse_main/bulletin
application
arbitration ", the execution _detail/true/12044066
for
due to the Found more procedure was 06?announceTime=20
dismantling
dispute case in terminated. If the 18-02-09 ；
by the 2018-02-0
of “Contract 46,460 No announcem outsider's http://www.cninfo.com
Company 9
for the ent of the application was .cn/new/disclosure/det
and
Cooperative Company rejected by the ail?plate=szse&stockC
controlling
Operation of Shenzhen ode=000020&announc
shareholder,
the Old Intermediate ementId=1205326846
the
Projects at People’s Court, &announcementTime=
application
Huafa Shenzhen Vanke 2018-08-25
was rejected
Industrial would have the
by the court
Park, right to continue
Gongming to apply for the
Street, resumption of
Guangming compulsory
New execution.
District”.
In March The second http://www.cninfo.com
2016, the trial decides Execution .cn/cninfo-new/disclos
Execution 2016-09-1
Company 947.26 No the completed in ure/szse_main/bulletin
completed 4
and HUAFA Company March 2021 _detail/true/12027024
Property suit wins the 23?announceTime=20
21
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
against lawsuit on 16-09-14 07:41
Shenzhen 15 March
Huayongxing 2018, and
Environment has applied
al for
Technology enforcement
Co., Ltd.,
and
Shenzhen
Yidaxin
Technology
Co., Ltd. for
contract
violation and
refuse to
move the site
Application
for
arbitration in
case of
contract
dispute
A decision http://www.cninfo.com
between the
was issued .cn/new/disclosure/det
V&T Arbitration
and the ail?plate=szse&stockC
(Shenzhen) has been Under 2018-11-1
1,940.2 No Company’s ode=000020&announc
Law Firm heard for implementation 4
motion to ementId=1205602053
and adjudication
dismiss was &announcementTime=
Shenzhen
denied. 2018-11-14
Zhongheng
Huafa Co.,
Ltd. and
Wuhan
Zhongheng
Group
Shenzhen The
Zhongheng judgment
http://www.cninfo.com
Huafa (2020) Yue
Semiconduc .cn/new/disclosure/det
Semiconduct 03 Min Chu
tor ail?stockCode=000020
or Co., Ltd No.17 was 2021-06-0
5,200 No Company Trial in progress &announcementId=12
bring a suit issued in 3
has filed an 10151395&orgId=gssz
against May 2021,
appeal 0000020&announcem
Shenzhen all claims of
entTime=2021-06-03
Zhongheng Semiconduct
Huafa Co., or Company
22
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Ltd for the were
ownership rejected
transfer,
performance
of asset
replacement
contract and
compensatio
n
Other lawsuits
□Applicable √ Not applicable
IX. Penalty and rectification
□Applicable √ Not applicable
The Company has no penalty and rectification in the period
X. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √Not applicable
XI. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □ Not applicable
Wh
eth
er
Tradi ove
Relat ng r
Clea
ed Prop
limit the ring
Relat transa ortio Date Index
Conte form
Type of ed ction n in appro app
Relat Relat nt of for Available similar of of
related Pricing trans amou simil
ed ionsh related ved rov relat
transact principle actio nt (in ar market price discl disclo
party ip transac ed
ion n 10 trans (in 10 ed
tion trans osure sure
price thous actio
thousa lim actio
and ns
n
Yuan) nd ited
Yuan) or
not
(Y/
N)
HK Unde Purchas Purcha Synchroniz 3,77 3,775 15,69 N Tele The average
23
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Yutia r e of raw sing ed with the 5.18 .18 7.92 grap market price refers
n the material LCD market hic to the price of
sa s from monito trans same
me related rs fer specifications
co parties which is searched
ntr from through the
ol world famous
professional
market survey
company website
http://www.witsvie
w.com recognized
authority in the
industry and LCD
professional
market survey
company website
http://www.witsvie
w.com
In
principle,
the
transaction
price of
purchased
raw
materials is
determined
at
Purchas
Heng Unde Purcha approximat Tele
e of raw
sheng r the sing ely 1% grap
material 5,06 5,066 13,08
Photo same LCD lower than N hic Ditto
s from 6.05 .05 1.6
-elect contr monito the trans
related
ricity ol rs prevailing fer
parties
average
market
price, with
reference
to the
respective
bargaining
power of
both
parties.
24
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Base on
the
Purchas customer
Heng Unde e of Purcha purchase Tele
sheng r the finished se of order price grap
984. 984.8 6,540.
Photo same goods LCD and reduce N hic Ditto
89 9 8
-elect contr from displa 1 yuan per trans
ricity ol related y unit as fer
parties operation
fee
Determine
Unde Sales of Sales Tele
d on the
HK r the product of grap
basis of the 6,21 6,210 19,62
Yutia same s to LCD N hic Ditto
customer’s 0.03 .03 2.4
n contr related displa trans
sales order
ol parties y fer
price
Determine
Heng Unde Sales of Sales Tele
d on the
sheng r the product of grap
basis of the 1,56 1,561 6,540.
Photo same s to LCD N hic Ditto
customer’s 1.22 .22 8
-elect contr related displa trans
sales order
ricity ol parties y fer
price
Releva
nt
produc
ts of Determine
Heng Unde Sales of Tele
LCD d on the
sheng r the product grap
display basis of the 126. 126.0 654.0
Photo same s to N hic Ditto
, customer’s 07 7 8
-elect contr related trans
plastic sales order
ricity ol parties fer
injecti price
on
hardw
are
Determine
Heng Unde Sales of Tele
d on the
sheng r the product grap
LCD basis of the 44.6 457.8
Photo same s to 44.69 N hic Ditto
glass customer’s 9 6
-elect contr related trans
sales order
ricity ol parties fer
price
Total -- -- 17,76 -- 62,59 -- -- -- -- --
25
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
8.13 5.46
Detail of sales return with major
N/A
amount involved
In the reporting, Hengfa Technology purchased LCD monitors from HK Yutian with US $ 5.6445
million approximately, 23.52% of the annual amount predicted at the beginning of the year; purchased
LCD monitor from Hengsheng Photo-electricity with US $ 6.9138 million approximately, 34.57% of
Report the actual implementation of
the annual amount predicted at the beginning of the year; purchasing LCD Display from Hengsheng
the daily related transactions which
Photo-electricity with about US$ 1.339 million, 13.39% of the annual amount predicted at the
were projected about their total
beginning of the year; sold LCD Display whole machine to HK Yutian with US$ 9.5462 million
amount by types during the
approximately, 31.82% of the annual amount predicted at the beginning of the year; sold LCD display
reporting period(if applicable)
to Hengsheng Photo-electricity with about US$ 1.4541 million, 14.54% of the annual amount
predicted at the beginning of the year; and sold LCD glass to Hengsheng Photo-electricity with
about US$ 68100, 9.73% of the annual amount predicted at the beginning of the year
Reasons for major differences
between trading price and market N/A
reference price
2. Related transactions by assets acquisition and sold
□Applicable √Not applicable
No above mentioned transactions occurred
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable √ Not applicable
No contact of related credit and debt during the reporting period.
5. Contact with the related finance companies and finance companies that controlled by the Company
□ Applicable √ Not applicable
There are no deposits, loans, credits or other financial business between the Company and the finance companies with related
relationships or between the finance companies controlled by the Company and related parties
6. Other significant related transactions
□ Applicable √ Not applicable
The company had no other significant related transactions in reporting period.
26
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
XII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period.
2. Major guarantees
√Applicable □ Not applicable
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Name of Related Count Guaran
Actual
the Announc Actual er Implem tee for
Guarante date of Guarante Collateral Guarant
Company ement guarantee guara ented related
e limit happenin e type (if any) ee term
guarantee disclosur limit ntee(i (Y/N) party
g
d e date f any) (Y/N)
Guarantee of the Company and the subsidiaries
Name of Related Count Guaran
Actual
the Announc Actual er Implem tee for
Guarante date of Guarante Collateral Guarant
Company ement guarantee guara ented related
e limit happenin e type (if any) ee term
guarantee disclosur limit ntee(i (Y/N) party
g
d e date f any) (Y/N)
Wuhan
Joint and
Hengfa
2021-04- several
Technolo 30,000 1 year N Y
27 liability
gy Co.,
guarantee
Ltd.
Total amount of Total amount of actual
30,000 3,480.09
approving guarantee occurred guarantee for
27
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
for subsidiaries in subsidiaries in report
report period (B1) period (B2)
Total amount of Total balance of actual
approved guarantee guarantee for
for subsidiaries at the 30,000 subsidiaries at the end 2,788.96
end of reporting of reporting period
period (B3) (B4)
Guarantee of the subsidiaries for the subsidiaries
Name of Related Count Comple
Actual Guaran
the Announc Actual er te
Guarante date of Guarante Collateral Guarant tee for
Company ement guarantee guara implem
e limit happenin e type (if any) ee term related
guarantee disclosur limit ntee(i entation
g party
d e date f any) or not
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of actual
Total amount of approving
occurred guarantee in
guarantee in report period 30,000 3,480.09
report period
(A1+B1+C1)
(A2+B2+C3)
Total balance of actual
Total amount of approved
guarantee at the end of
guarantee at the end of report 30,000 2,788.96
report period
period (A3+B3+C2)
(A4+B4+C4)
The proportion of the total amount of actually
guarantee in the net assets of the Company (that 8.12%
is A4+ B4+C4)
Including:
Explanation on compound guarantee
3.Trust financing
□Applicable √Not applicable
No trust financing occurred in the reporting period
4.Material contracts for daily operations
□ Applicable √ Not applicable
5. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.
28
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
XIII. Explanation on other significant events
√ Applicable □ Not applicable
(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology Industrial
Group Co., Ltd (hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to in
the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the Company
(namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district, Shenzhen
(the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels were A627-005
andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of plan for 2010
Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint
cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.
The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first
extraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the
“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area at
Gongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Group
shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots
and the respectively contributed and constructed above-ground buildings before the land development, it is
estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total
consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.
The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of
2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewal
and the progress of related transactions of ‘the updated units at Huafa Area, Gong Ming Street, Guangming New
District, Shenzhen’”, the company has signed the “Agreement on the cooperation of urban renewal project of the
updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, “Contract for the
cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street, Guangming New
District” on 26 August 2015, and “Agreement on housing acquisition and removal compensation and resettlement”
with Wuhan Wuhan Zhongheng Group, Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as
“Shenzhen Vanke”), and Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to
as “Vanke Guangming”).
On 12 September 2016, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of
urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”
against the Company and Wuhan Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) has
given a ruling in August 2017. On August 29, 2018, the court accepted the compulsory execution application of
Shenzhen Vanke. In October 2019, as a number of outsiders filed an “execution objection” and applied for “no
execution” to Shenzhen Intermediate People’s Court, the Shenzhen Intermediate People’s Court ruled to terminate
the enforcement procedure on March 20, 2020. If the “execution objection” and “no execution” proposed by
29
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
outsiders are rejected according to law, Shenzhen Vanke may continue to apply to the Shenzhen Intermediate
People’s Court to resume execution. In April 2020, Zhongheng Semiconductor sued the company to Shenzhen
Intermediate People’s Court, and requested the company to transfer the above mentioned two pieces of lands and
compensate the economic loss of 52 million yuan, the company received the first trial verdict in the case in May
2021. and the company appealed to the supreme people’s court against the judgment, which has not yet entered
into force. Progress of the case found more in the Notices released on Juchao website dated 14 Sept. 2016, 1 Nov.
2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017, 9 Feb. 2018,
25 Aug. 2018, 7 Sept. 2018, 21 Apr. 2020, 3 Jun, 2021 and 22 Jul. 2021 respectively.
(ii) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China
Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. On 1 Feb. 2016, Wuhan Zhongheng
Group pledge the 27,349,953 shares held to China Merchants Securities Assets Co., Ltd. with due date of 31
December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expired
on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end
of this period released, controlling shareholder still not removed the pledge and the Company has apply by letter,
relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice
released on Juchao website date 2 Feb. 2018.
(iii) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of the Company’ stock,
accounting for 42.13% of the total share capital of the Company, of which 116,489,894 shares were judicially frozen
by Shenzhen Intermediate People's Court (hereinafter referred to as "Shenzhen Intermediate Court") on September
27, 2016, which were frozen again by the Shenzhen Intermediate People's Court on December 14, 2018, with a
frozen period of 36 months; the remaining 2,800,000 shares were frozen by the Shenzhen Intermediate People's
Court on May 29, 2019, and were frozen again by the Higher People’s Court of Guangdong Province on July 5,
2019. For details, please refer to the company’s announcements published on Juchao Website dated October 27,
2016, January 11, 2019, May 31, 2019 and August 7, 2019.
(iv)Wuhan Zhongheng Group received the first-instance judgment of Guangdong Higher People’s Court to the
“pledged securities repurchase dispute” case sued by China Merchants Securities Asset Management Co., Ltd. in
March 2021. Wuhan Zhongheng Group refused to accept the judgment and has appealed to the Supreme People's
Court, the judgment of first instance has not yet taken effect. For details, please refer to the company
announcement (“progress of the major litigation and arbitration cases of the controlling shareholder”)issued by the
company on www.cninfo.com.cn on March 19, 2021.
(v) On September 29, 2016, the company and its controlling shareholder, Wuhan Zhongheng Group, signed the
“Agency Contract” with V&T Law Firm. On October 8, 2016, the three parties also signed the “Supplemental
Agreement for Agency Contract”, it was agreed that V&T acted as an agent for the company and Wuhan
Zhongheng Group to deal with the arbitration case with Shenzhen Vanke. After losing the lawsuit, due to
30
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
differences in the payment of attorney fees, V&T sued our company and Wuhan Zhongheng Group to the
Shenzhen Court of International Arbitration, and applied to the court to seize a bank account under our company’s
name and part of our company dormitories, please refer to “Other Announcements on the Progress Involving
Litigation and Arbitration” (Announcement Numbers: 2018-43, 2019-02) released on Juchao Website dated
November 14, 2018 and March 6, 2019. The Shenzhen Court of International Arbitration ruled that the company
and Wuhan Zhongheng Group paid the corresponding fees. The loss of the arbitrament in this case was borne by
Wuhan Zhongheng Group in whole, and found more on “Other Announcements on the Progress Involving
Litigation and Arbitration” (Announcement No.: 2019-34) released on Juchao Website dated November 25, 2019.
XIV. Significant event of subsidiary of the Company
□ Applicable √Not applicable
31
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Section VII. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Public
New reserve
Proporti Bonus Proportio
Amount shares transfer Others Subtotal Amount
on shares n
issued into share
capital
I. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
1. State-owned shares
2. State-owned legal
person’s shares
3. Other domestic shares
Including: Domestic
legal person’s shares
Domestic natural
person’s shares
4. Foreign shares
Including: Foreign legal
person’s shares
Foreign natural
person’s shares
II. Unrestricted shares 283,161,227 100.00% 0 0 0 0 0 283,161,227 100.00%
1. RMB ordinary shares 181,165,391 63.98% 0 0 0 0 0 181,165,391 63.98%
2. Domestically listed
101,995,836 36.02% 0 0 0 0 0 101,995,836 36.02%
foreign shares
3. Overseas listed foreign
shares
4. Others
III. Total shares 283,161,227 100.00% 0 0 0 0 0 283,161,227 100.00%
Reasons for share changed
□ Applicable √ Not applicable
32
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of reducing holdings of shares buy-back by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of lock-up stocks
□ Applicable √ Not applicable
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In Share
Total preference shareholders with
Total common stock
voting rights recovered at end of
shareholders in reporting 20,986 0
reporting period (if applicable) (see
period-end
note 8)
Particulars about common shares held above 5% by shareholders or top ten common shareholders
Amount Information of shares pledged,
Amount of
of Amount of tagged or frozen
Proporti common Chang
restricte common
Full name of Nature of on of shares held es in
d shares held
Shareholders shareholder shares at the end of report State of
common without Amount
held reporting period share
shares restriction
period
held
Domestic Pledged 116,100,000
Wuhan
non-state-o
Zhongheng 42.13% 119,289,894 0 0 119,289,894
wned legal Frozen 119,289,894
Group
person
33
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
SEG (HONG Overseas Pledged 0
KONG) CO., legal 5.85% 16,569,560 0 0 16,569,560
Frozen 0
LTD. person
GOOD HOPE Pledged 0
Overseas
CORNER
legal 2.50% 7,072,000 0 0 7,072,000
INVESTMENT Frozen 0
person
S LTD.
Changjiang Pledged 0
Securities Overseas
Brokerage legal 1.89% 5,355,249 0 0 5,355,249
Frozen 0
(Hong Kong) person
Co., Ltd.
Guoyuan Pledged 0
Securities Overseas
Brokerage legal 1.37% 3,870,117 0 0 3,870,117
Frozen 0
(Hong Kong) person
Limited
Overseas Pledged 0
Li Zhongqiu nature 1.00% 2,830,000 0 0 2,830,000
Frozen 0
person
China Pledged 0
State-owne
Merchants
d legal 0.85% 2,394,018 0 0 2,394,018
Securities Hong Frozen 0
person
Kong Co., Ltd.
Domestic Pledged 0
Li Wei nature 0.58% 1,638,100 0 0 1,638,100
Frozen 0
person
Domestic Pledged 0
Xu Xinfen nature 0.56% 1,585,300 0 0 1,585,300
Frozen 0
person
Domestic Pledged 0
LI SHERYN
nature 0.51% 1,446,100 0 0 1,446,100
ZHAN MING Frozen 0
person
Strategy investor or general
legal person becoming the top
10 common shareholders by N/A
placing new shares (if
applicable) (see note 3)
Explanation on associated Among the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng New
relationship among the Technology Industry Group Co., LTD., and belongs to a man of concerted action. It is not known
aforesaid shareholders whether other shareholders of the company are related to each other, or whether they belong to
34
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
the concerted action stipulated in the "Management Measures for Disclosure of Information
about Changes in Shareholders' Shareholding of Listed Companies".
Description of the above
shareholders in relation to
delegate/entrusted voting N/A
rights and abstention from
voting rights.
Special note on the repurchase
account among the top 10
N/A
shareholders (if applicable)
(see note 11)
Particular about top ten shareholders with un-lock up common stocks held
Amount of common shares held without restriction at Type of shares
Shareholders’ name
Period-end Type Amount
RMB common
Wuhan Zhongheng Group 119,289,894 119,289,894
share
Domestically
SEG (HONG KONG) CO.,
16,569,560 listed foreign 16,569,560
LTD.
shares
Domestically
GOOD HOPE CORNER
7,072,000 listed foreign 7,072,000
INVESTMENTS LTD.
shares
Changjiang Securities Domestically
Brokerage (Hong Kong) Co., 5,355,249 listed foreign 5,355,249
Ltd. shares
Domestically
Guoyuan Securities Brokerage
3,870,117 listed foreign 3,870,117
(Hong Kong) Limited
shares
Domestically
Li Zhongqiu 2,830,000 listed foreign 2,830,000
shares
Domestically
China Merchants Securities
2,394,018 listed foreign 2,394,018
Hong Kong Co., Ltd.
shares
Domestically
Li Wei 1,638,100 listed foreign 1,638,100
shares
RMB common
Xu Xinfen 1,585,300 1,585,300
share
LI SHERYN ZHAN MING 1,446,100 Domestically 1,446,100
35
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
listed foreign
shares
Expiation on associated
relationship or consistent
Among the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng New
actors within the top 10
Technology Industry Group Co., LTD., and belongs to a man of concerted action. It is not known
un-lock up common
whether other shareholders of the company are related to each other, or whether they belong to
shareholders and between top
the concerted action stipulated in the "Management Measures for Disclosure of Information
10 un-lock up common
about Changes in Shareholders' Shareholding of Listed Companies".
shareholders and top 10
common shareholders
Explanation on top 10
common shareholders Among the top ten shareholders, Xu Xin Fen holds 400,400 shares through the general account
involving margin business (if and 1184,900 shares through the credit securities account, for a total of 1585,300 shares.
applicable) (see note 4)
Whether top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held of the Company have no
buy-back agreement dealing in reporting period.
IV. Changes of shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report
2020.
V. Changes in controlling shareholders or actual controllers
Change of controlling shareholder during the reporting period
□ Applicable √ Not applicable
The Company had no change of controlling shareholder during the reporting period
Change of actual controller during the reporting period
□ Applicable √ Not applicable
The Company had no change of actual controller during the reporting period
36
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Section VIII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
37
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Section IX. Corporate Bonds
□ Applicable √ Not applicable
38
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Section X. Financial Report
I. Audit report
Whether the semi annual report is audited
□ Yes √ No
The company's semi annual financial report has not been audited
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated Balance Sheet
Prepared by SHENZHEN ZHONGHENG HUAFA CO., LTD.
In RMB
Item June 30, 2021 December 31, 2020
Current assets:
Monetary funds 59,612,186.22 60,968,053.58
Settlement provisions
Capital lent
Trading financial assets
Derivative financial assets
Note receivable 491,683.78 20,240,464.79
Account receivable 135,750,939.59 128,063,911.79
Receivable financing 5,774,948.69 10,057,385.11
Accounts paid in advance 31,961,398.64 39,643,255.11
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable 22,540,779.20 4,466,949.96
Including: Interest receivable
Dividend receivable
Buying back the sale of financial assets
Inventories 129,917,660.51 70,166,013.49
Contractual assets
39
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Assets held for sale
Non-current asset due within one year
Other current assets 741,380.21 4,255,643.19
Total current assets 386,790,976.84 337,861,677.02
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment
Investment in other equity instrument
Other non-current financial assets
Investment real estate 46,360,497.13 47,224,662.27
Fixed assets 191,477,026.08 193,605,444.53
Construction in progress 740,000.00 740,000.00
Productive biological asset
Oil and gas asset
Right-of-use assets
Intangible assets 39,945,399.92 40,820,657.80
Expense on Research and Development
Goodwill
Long-term expenses to be apportioned 623,601.59 77,445.31
Deferred income tax asset 7,383,734.13 7,383,734.13
Other non-current asset 66,000.00 66,000.00
Total non-current asset 286,596,258.85 289,917,944.04
Total assets 673,387,235.69 627,779,621.06
Current liabilities:
Short-term loans 51,089,579.00 12,527,808.00
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable 42,983,519.37 37,416,381.20
Account payable 116,056,638.57 98,318,239.88
40
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Accounts received in advance
Contractual liability 765,555.97 287,140.66
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable 3,886,717.29 5,737,366.59
Taxes payable 12,939,066.90 14,204,642.62
Other account payable 37,074,456.45 27,608,281.01
Including: Interest payable 179,523.72 26,335.66
Dividend payable
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year 12,000,000.00
Other current liabilities 211,799.13 18,322,972.81
Total current liabilities 265,007,332.68 226,422,832.77
Non-current liabilities:
Insurance contract reserve
Long-term loans 61,000,000.00 61,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long-term wages payable
Accrual liability 64,411.00 64,411.00
Deferred income 4,043,640.00 4,043,640.00
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 65,108,051.00 65,108,051.00
Total liabilities 330,115,383.68 291,530,883.77
Owner’s equity:
Share capital 283,161,227.00 283,161,227.00
41
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 146,577,771.50 146,577,771.50
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve 77,391,593.25 77,391,593.25
Provision of general risk
Retained profit -163,858,739.74 -170,881,854.46
Total owner’ s equity attributable to parent company 343,271,852.01 336,248,737.29
Minority interests
Total owner’ s equity 343,271,852.01 336,248,737.29
Total liabilities and owner’ s equity 673,387,235.69 627,779,621.06
Legal Representative: Li Zhongqiu
Person in charge of accounting works: Yang Bin
Person in charge of accounting institute: Chuai Guoxu
2. Balance Sheet of Parent Company
In RMB
Item June 30, 2021 December 31, 2020
Current assets:
Monetary funds 1,331,648.92 966,379.17
Trading financial assets
Derivative financial assets
Note receivable
Account receivable
Receivable financing
Accounts paid in advance 2,199,741.25 73,685.03
Other account receivable 87,948,585.04 93,922,057.92
Including: Interest receivable
Dividend receivable
42
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Inventories 14,806.50 14,806.50
Contractual assets
Assets held for sale
Non-current assets maturing within one year
Other current assets
Total current assets 91,494,781.71 94,976,928.62
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 186,618,400.00 186,618,400.00
Investment in other equity instrument
Other non-current financial assets
Investment real estate 23,353,697.10 23,957,898.42
Fixed assets 96,806,187.37 96,674,476.52
Construction in progress 740,000.00 740,000.00
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 4,336,290.66 4,408,763.52
Research and development costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 7,443,826.11 7,443,826.11
Other non-current assets
Total non-current assets 319,298,401.24 319,843,364.57
Total assets 410,793,182.95 414,820,293.19
Current liabilities:
Short-term borrowings 6,000,000.00
Trading financial liability
Derivative financial liability
Notes payable
Account payable 9,740,367.33 10,745,840.16
Accounts received in advance 46,958.09 83,155.09
43
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Contractual liability
Wage payable 819,533.72 1,476,601.12
Taxes payable 7,316,798.88 7,892,878.33
Other accounts payable 20,487,078.43 21,304,919.43
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due within one year 12,000,000.00
Other current liabilities
Total current liabilities 44,410,736.45 53,503,394.13
Non-current liabilities:
Long-term loans 61,000,000.00 61,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long term employee compensation payable
Accrued liabilities 64,411.00 64,411.00
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 61,064,411.00 61,064,411.00
Total liabilities 105,475,147.45 114,567,805.13
Owners’ equity:
Share capital 283,161,227.00 283,161,227.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 146,587,271.50 146,587,271.50
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve 77,391,593.25 77,391,593.25
44
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Retained profit -201,822,056.25 -206,887,603.69
Total owner’s equity 305,318,035.50 300,252,488.06
Total liabilities and owner’s equity 410,793,182.95 414,820,293.19
3. Consolidated Profit Statement
In RMB
Item 2021 semi-annual 2020 semi-annual
I. Total operating income 391,633,808.55 300,703,421.38
Including: Operating income 391,633,808.55 300,703,421.38
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 381,884,734.22 297,053,804.80
Including: Operating cost 334,484,096.74 263,959,652.63
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract
reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras 1,428,361.92 1,004,056.05
Sales expense 14,094,617.96 9,100,079.39
Administrative expense 22,680,307.24 17,082,362.66
R&D expense 3,955,647.50 2,423,425.26
Financial expense 5,241,702.86 3,484,228.81
Including: Interest expenses 3,774,381.48 4,018,202.27
Interest income 189,945.55 11,856.69
Add: Other income 3,553.35 348,540.00
Investment income (Loss is listed with “-”) 149,767.58 66,780.40
Including: Investment income on affiliated company and
joint venture
The termination of income recognition for financial
assets measured by amortized cost
45
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with “-”)
Loss of credit impairment (Loss is listed with “-”)
Losses of devaluation of asset (Loss is listed with “-”) -1,350,000.00
Income from assets disposal (Loss is listed with “-”) -99,867.53
III. Operating profit (Loss is listed with “-”) 8,552,395.26 3,965,069.45
Add: Non-operating income 276,599.04 45,200.06
Less: Non-operating expense 215,202.92 7,302.38
IV. Total profit (Loss is listed with “-”) 8,613,791.38 4,002,967.13
Less: Income tax expense 1,590,676.66 837,369.58
V. Net profit (Net loss is listed with “-”) 7,023,114.72 3,165,597.55
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”) 7,023,114.72 3,165,597.55
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company 7,023,114.72 3,165,597.55
2.Minority shareholders’ gains and losses
VI. Net after-tax of other comprehensive income
Net after-tax of other comprehensive income attributable to
owners of parent company
(I) Other comprehensive income items which will not be
reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that
re-measured
2.Other comprehensive income under equity method
that cannot be transfer to gain/loss
3.Change of fair value of investment in other equity
instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be
reclassified subsequently to profit or loss
1.Other comprehensive income under equity method
that can transfer to gain/loss
2.Change of fair value of other debt investment
46
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
3.Amount of financial assets re-classify to other
comprehensive income
4.Credit impairment provision for other debt
investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of
foreign currency financial statements
7.Other
Net after-tax of other comprehensive income attributable to
minority shareholders
VII. Total comprehensive income 7,023,114.72 3,165,597.55
Total comprehensive income attributable to owners of parent
7,023,114.72 3,165,597.55
Company
Total comprehensive income attributable to minority
shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0248 0.0112
(ii) Diluted earnings per share 0.0248 0.0112
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before combination while 0
Yuan achieved last period.
Legal Representative: Li Zhongqiu
Person in charge of accounting works: Yang Bin
Person in charge of accounting institute: Chuai Guoxu
4. Profit Statement of Parent Company
In RMB
Item Semi-annual of 2021 Semi-annual of 2020
I. Operating income 22,146,204.31 16,720,522.47
Less: Operating cost 4,439,887.16 2,040,226.11
Taxes and surcharge 572,280.19 542,709.33
Sales expenses
Administration expenses 7,444,373.84 6,208,200.98
R&D expenses
Financial expenses 3,381,988.26 4,015,977.09
47
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Including: Interest expenses 3,385,557.02 4,018,202.27
Interest income 6,881.46
Add: Other income 3,306.96
Investment income (Loss is listed with “-”)
Including: Investment income on affiliated Company and
joint venture
The termination of income recognition for financial
assets measured by amortized cost (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Changing income of fair value (Loss is listed with “-”)
Loss of credit impairment (Loss is listed with “-”)
Losses of devaluation of asset (Loss is listed with “-”)
Income on disposal of assets (Loss is listed with “-”)
II. Operating profit (Loss is listed with “-”) 6,310,981.82 3,913,408.96
Add: Non-operating income 0.35 17,754.80
Less: Non-operating expense 8,500.00
III. Total Profit (Loss is listed with “-”) 6,302,482.17 3,931,163.76
Less: Income tax 1,236,934.73 982,790.94
IV. Net profit (Net loss is listed with “-”) 5,065,547.44 2,948,372.82
(i) continuous operating net profit (net loss listed with ‘-”)
(ii) termination of net profit (net loss listed with ‘-”)
V. Net after-tax of other comprehensive income
(i) Other comprehensive income items which will not be
reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that
re-measured
2.Other comprehensive income under equity method
that cannot be transfer to gain/loss
3.Change of fair value of investment in other equity
instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be
reclassified subsequently to profit or loss
1.Other comprehensive income under equity method
that can transfer to gain/loss
48
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other
comprehensive income
4.Credit impairment provision for other debt
investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of
foreign currency financial statements
7.Other
VI. Total comprehensive income 5,065,547.44 2,948,372.82
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Item Semi-annual of 2021 Semi-annual of 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor
244,756,106.28 251,602,049.92
services
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial
institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Cash received from interest, commission charge and
commission
Net increase of capital borrowed
Net increase of returned business capital
Net cash received by agents in sale and purchase of securities
Write-back of tax received 2,152,394.35
Other cash received concerning operating activities 16,266,093.74 3,743,255.21
Subtotal of cash inflow arising from operating activities 263,174,594.37 255,345,305.13
49
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Cash paid for purchasing commodities and receiving labor
180,586,052.16 179,132,887.12
service
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Net increase of capital lent
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 38,342,263.84 24,991,943.90
Taxes paid 13,863,743.82 3,743,185.15
Other cash paid concerning operating activities 52,200,904.14 26,277,076.72
Subtotal of cash outflow arising from operating activities 284,992,963.96 234,145,092.89
Net cash flows arising from operating activities -21,818,369.59 21,200,212.24
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income 186,685.90 66,780.40
Net cash received from disposal of fixed, intangible and other
21,750.00 411,000.00
long-term assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities 35,000,000.00
Subtotal of cash inflow from investing activities 208,435.90 35,477,780.40
Cash paid for purchasing fixed, intangible and other long-term
2,524,810.50 1,816,159.96
assets
Cash paid for investment
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities 35,000,000.00
Subtotal of cash outflow from investing activities 2,524,810.50 36,816,159.96
Net cash flows arising from investing activities -2,316,374.60 -1,338,379.56
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Including: Cash received from absorbing minority
shareholders’ investment by subsidiaries
Cash received from loans 57,190,879.00 6,725,056.80
Other cash received concerning financing activities
50
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Subtotal of cash inflow from financing activities 57,190,879.00 6,725,056.80
Cash paid for settling debts 30,430,404.00 37,370,812.20
Cash paid for dividend and profit distributing or interest
3,578,255.11 4,192,431.31
paying
Including: Dividend and profit of minority shareholder paid by
subsidiaries
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities 34,008,659.11 41,563,243.51
Net cash flows arising from financing activities 23,182,219.89 -34,838,186.71
IV. Influence on cash and cash equivalents due to fluctuation in
-403,343.06 144,260.22
exchange rate
V. Net increase of cash and cash equivalents -1,355,867.36 -14,832,093.81
Add: Balance of cash and cash equivalents at the period -begin 60,968,053.58 36,645,061.61
VI. Balance of cash and cash equivalents at the period -end 59,612,186.22 21,812,967.80
6. Cash Flow Statement of Parent Company
In RMB
Item Semi-annual of 2021 Semi-annual of 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor
2,336,572.26 17,825,898.30
services
Write-back of tax received
Other cash received concerning operating activities 12,794,492.62 7,210,631.17
Subtotal of cash inflow arising from operating activities 15,131,064.88 25,036,529.47
Cash paid for purchasing commodities and receiving labor
service
Cash paid to/for staff and workers 548,093.93 2,100,854.64
Taxes paid 3,454,113.92 1,790,646.36
Other cash paid concerning operating activities 1,380,064.32 11,480,046.39
Subtotal of cash outflow arising from operating activities 5,382,272.17 15,371,547.39
Net cash flows arising from operating activities 9,748,792.71 9,664,982.08
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income
Net cash received from disposal of fixed, intangible and other
51
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
long-term assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities
Cash paid for purchasing fixed, intangible and other long-term
assets
Cash paid for investment
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities
Net cash flows arising from investing activities
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Cash received from loans
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities
Cash paid for settling debts 6,000,000.00 6,000,000.00
Cash paid for dividend and profit distributing or interest paying 3,383,290.96 3,366,124.47
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities 9,383,290.96 9,366,124.47
Net cash flows arising from financing activities -9,383,290.96 -9,366,124.47
IV. Influence on cash and cash equivalents due to fluctuation in
2,210.11
exchange rate
V. Net increase of cash and cash equivalents 365,501.75 301,067.72
Add: Balance of cash and cash equivalents at the period -begin 966,379.17 2,046,143.44
VI. Balance of cash and cash equivalents at the period -end 1,331,880.92 2,347,211.16
7. Statement of Changes in Owners’ Equity (Consolidated)
Current Amount
In RMB
Semi-annual of 2021
Owners’ equity attributable to the parent Company Min Tota
Item Other ority l
Sha Capi Less Othe Reas Surp Prov Reta Othe Subt
equity inter own
re tal : r onab lus ision ined r otal
instrument ests ers’
52
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
cap Per reser Inve com le reser of profi equit
ital pet ve ntor preh reser ve gene t y
Pre
ual y ensi ve ral
fer
cap Ot shar ve risk
red
ital her es inco
sto
sec me
ck
urit
ies
283
146, 77,3 -170 336, 336,
I. The ending ,16
577, 91,5 ,881, 248, 248,
balance of the 1,2
771. 93.2 854. 737. 737.
previous year 27.
50 5 46 29 29
00
Add: Changes
of accounting
policy
Error
correction of
the last period
Enterprise
combine
under the
same control
Other
283
II. The 146, 77,3 -170 336, 336,
,16
beginning 577, 91,5 ,881, 248, 248,
1,2
balance of the 771. 93.2 854. 737. 737.
27.
current year 50 5 46 29 29
00
III. Increase/
Decrease in
7,02 7,02 7,02
the period
3,11 3,11 3,11
(Decrease is
4.72 4.72 4.72
listed with
“-”)
(i) Total 7,02 7,02 7,02
comprehensiv 3,11 3,11 3,11
e income 4.72 4.72 4.72
(ii) Owners’
devoted and
decreased
53
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(iii) Profit
distribution
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general
risk
provisions
3.
Distribution
for owners (or
shareholders)
4. Other
(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
54
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4. Carry-over
retained
earnings from
the defined
benefit plans
5. Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(v)
Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in
the report
period
(vi) Others
283
146, 77,3 -163 343, 343,
IV. Balance at ,16
577, 91,5 ,858, 271, 271,
the end of the 1,2
771. 93.2 739. 852. 852.
period 27.
50 5 74 01 01
00
Amount of the previous period
In RMB
Semi-annual of 2020
Item
Owners’ equity attributable to the parent Company Mino Total
55
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Other rity owne
equity intere rs’
instrument sts equit
Pe Othe y
Less
rpe r Prov
: Reas
Sha tua Capi com Surp ision Reta
Pr Inve onab
re l tal preh lus of ined Othe Subt
efe ntor le
cap ca reser ensi reser gene profi r otal
rre Oth y reser
ital pit ve ve ve ral t
d er shar ve
al inco risk
sto es
sec me
ck
uri
tie
s
283
I. The ending 146, 77,3 -177 329,
,16 329,4
balance of 587, 91,5 ,712, 428,
1,2 28,04
the previous 271. 93.2 041. 049.
27. 9.89
year 50 5 86 89
00
Add:
Changes of
accounting
policy
Error
correction of
the last
period
Enterprise
combine
under the
same control
Other
II. The 283
146, 77,3 -177 329,
beginning ,16 329,4
587, 91,5 ,712, 428,
balance of 1,2 28,04
271. 93.2 041. 049.
the current 27. 9.89
50 5 86 89
year 00
III. Increase/
Decrease in 3,16 3,16 3,165
the period 5,59 5,59 ,597.
(Decrease is 7.55 7.55 55
listed with
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SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
“-”)
(i) Total 3,16 3,16 3,165
comprehensi 5,59 5,59 ,597.
ve income 7.55 7.55 55
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners
equity with
share-based
payment
4. Other
(iii) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Withdrawal
of general
risk
provisions
3.
Distribution
for owners
(or
shareholders)
4. Other
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(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3.
Remedying
loss with
surplus
reserve
4. Carry-over
retained
earnings
from the
defined
benefit plans
5. Carry-over
retained
earnings
from other
comprehensi
ve income
6. Other
(v)
Reasonable
reserve
1.
Withdrawal
in the report
period
2. Usage in
58
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
the report
period
(vi) Others
283
146, 77,3 -174 332,
IV. Balance ,16 332,5
587, 91,5 ,546, 593,
at the end of 1,2 93,64
271. 93.2 444. 647.
the period 27. 7.44
50 5 31 44
00
8. Statement of Changes in Owners’ Equity (Parent Company)
Current Amount
In RMB
Semi-annual of 2021
Other
equity instrument
Other
Perp Capita Less:
Share compr Reaso Surplu Retai
Item l Invent Total
etual ehensi nable s ned
capit Prefe Other owners’
capit Othe reserv ory ve reserv reserv profi
al rred equity
al r e shares incom e e t
stock e
secur
ities
-206,
I. The ending 283,1 146,58 77,391
887, 300,252,
balance of the 61,22 7,271. ,593.2
603. 488.06
previous year 7.00 50 5
69
Add:
Changes of
accounting
policy
Error
correction of
the last period
Other
II. The -206,
283,1 146,58 77,391
beginning 887, 300,252,
61,22 7,271. ,593.2
balance of the 603. 488.06
7.00 50 5
current year 69
III. Increase/ 5,06
5,065,54
Decrease in 5,54
7.44
the period 7.44
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(Decrease is
listed with “-”)
(i) Total 5,06
5,065,54
comprehensive 5,54
7.44
income 7.44
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(iii) Profit
distribution
1. Withdrawal
of surplus
reserves
2. Distribution
for owners (or
shareholders)
3. Other
(iv) Carrying
forward
internal
owners’ equity
1. Capital
reserves
conversed to
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SEMI-ANNUAL REPORT 2021
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus reserve
4. Carry-over
retained
earnings from
the defined
benefit plans
5. Carry-over
retained
earnings from
other
comprehensive
income
6. Other
(v) Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in the
report period
(vi) Others
-201,
IV. Balance at 283,1 146,58 77,391
822, 305,318,
the end of the 61,22 7,271. ,593.2
056. 035.50
period 7.00 50 5
25
Amount of the previous period
In RMB
Semi-annual of 2020
Other Other Surpl
Shar Capit Less: Reason Total
Item equity instrument compr us Retaine
e al Invent able Other owners’
Pref Perp Othe ehensi reserv d profit
capit reserv ory reserve equity
erre etual r ve e
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al d capit e shares incom
stoc al e
k secu
ritie
s
283,
I. The ending 146,5 77,39 -208,86
161, 298,276,
balance of the 87,27 1,593 3,486.5
227. 605.21
previous year 1.50 .25 4
00
Add:
Changes of
accounting
policy
Error
correction of
the last
period
Other
II. The 283,
146,5 77,39 -208,86
beginning 161, 298,276,
87,27 1,593 3,486.5
balance of the 227. 605.21
1.50 .25 4
current year 00
III. Increase/
Decrease in
the period 2,948,3 2,948,37
(Decrease is 72.82 2.82
listed with
“-”)
(i) Total
2,948,3 2,948,37
comprehensiv
72.82 2.82
e income
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
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SEMI-ANNUAL REPORT 2021
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(iii) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Distribution
for owners
(or
shareholders)
3. Other
(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4. Carry-over
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retained
earnings from
the defined
benefit plans
5. Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(v)
Reasonable
reserve
1.
Withdrawal
in the report
period
2. Usage in
the report
period
(vi) Others
283,
IV. Balance at 146,5 77,39 -205,91
161, 301,224,
the end of the 87,27 1,593 5,113.7
227. 978.03
period 1.50 .25 2
00
III. Company profile
1. The registration place of the enterprise, the form of organization and the headquarters address
Shenzhen Zhongheng HUAFA Company Limited (hereinafter referred to as Company or the Company),
established on 8 December 1981. Uniform social credit code 91440300618830372G.
Registered place and head office of the Company: 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Legal representative: Li Zhongqiu
Registered capital: RMB 283,161,227.00
2. The nature of the business and the main business activities
The Company belongs to the computer, telecommunication and manufacturing of other electronic equipment.
Business scope: producing and sales of vary color TV set, liquid crystal display, LCD (operates in branch),
radio-recorder, sound equipment, electronic watch, electronic game and computers, the printed wiring board,
precision injection parts, light packaging material (operates in Wuhan) and hardware (including tool and mould)
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for various electronic products and supporting parts, plating and surface treatment and tin wire, development and
operation of real estate (Shen Fang Di Zi No.: 7226760) and property management. Funded affiliated companies
in Wuhan and Jilin. Setting up branches in capital of the province (Lhasa City excluded) in China and
municipality directly under the central government.
3. Relevant party offering approval reporting of financial statements and date thereof
The financial statement has been deliberated and approved by BOD on 20 August 2021. According to Article of
Association, the statement shall be submitted for deliberation in shareholders general meeting.
Consolidate scope in the Period including: subsidiaries including Shenzhen HUAFA Property Lease Management
Co., Ltd (no annual inspection in 2011, and business license revoke on 1 April 2014), Shenzhen Zhongheng
HUAFA Property Co., Ltd, Wuhan Hengfa Technology Co., Ltd., Shenzhen HUAFA Hengtian Co., Ltd. and
Shenzhen HUAFA Hengtai Co., Ltd. More of subsidiaries found in “Note VIII. Equity in other subjects”.
IV. Preparation basis of Financial Statements
1. Preparation basis
Base on the running continuously and actual transactions and events, in line with the Accounting Standards for
Business Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry of
Finance (hereinafter collectively referred to as Accounting Standards for Business Enterprise), the Company
prepared and formulate the financial statement lies on the followed important accounting policy and estimation.
2. Going concern
The Company expects that the production and sales will be in a virtuous cycle within 12 months from the end of
he reporting period, and there is no risk that affects the continued operations.
V. Important accounting policy and estimation
Notes on specific accounting policies and accounting estimation:
The following disclosure has covered the specific accounting policies and accounting estimates formulated by the
Company according to the actual production and operation characteristics.
1. Declaration of obedience to Accounting Standards for Business Enterprise
The Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterprise
and also a true and thorough reflection to the relevant information as the Company’s financial position dated 30th
June 2021 and the operation results as well as cash flow for the first half year of 2021.
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2. Accounting period
The Company’s accounting year is Gregorian calendar year, namely from 1st January to 31st December of every
year.
3. Business cycle
The Company’s business cycle is one year (12 months) as a normal cycle, and the business cycle is the
determining criterion for the liquidity of assets and liabilities of the Company.
4. Bookkeeping standard currency
The Renminbi (RMB) is taken as the book-keeping standard currency.
5. Accounting methods for consolidation of enterprises under the same control or otherwise
5.1 Consolidation of enterprises under the same control
Where the Company for long term equity investment arising from business combination under common control
satisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, the
carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by
the Company as at the combination date shall be deemed as the initial investment cost of such long term equity
investment. If the equity instrument issued by combining party are consider as the combination consideration,
than the total value of the issuing shares are consider as the share capital. The difference between the initial cost of
long-term equity investment and book value of consideration (or total face value of the shares issued) paid, capital
surplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted.
5.2 Business combination not under common control
As for business combination not under common control, combination costs refer to the sum of the fair value of the
assets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over
the acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control,
the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair value
on day of purchased. If the consolidation cost larger than the fair value amount of identified net assets from
acquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair value
amount of identified net assets from acquiree’s, the differences should reckoned into current non-operating
income.
6. Preparation methods for consolidated financial statements
6.1 Consolidation financial statement range
The Company includes all the subsidiaries (including the separate entities controlled by the Company) into
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consolidated financial statement, including companies controlled by the Company, non-integral part of the
investees and structural main body.
6.2 Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries.
As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, the
necessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidated
financial statements according to the Company’s accounting policies and periods.
6.3 Offset of consolidated financial statement
The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company
and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and
within subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall be
presented as minority equity under the owner’s equity item in the consolidated balance sheet. The long term equity
investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group as
well as the reduction of owners’ equity, shall be presented as “Less: treasury stock” under the owners’ equity item
in the consolidated balance sheet.
6.4Accounting for acquisition of subsidiary through combination
For subsidiaries acquired under enterprise merger involving enterprises under common control,
the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial
statements from the beginning of the financial year in which the combination took place. When
preparing the consolidated financial statements, for the subsidiaries acquired from business
combination not involving entities under common control, the identifiable net assets of the subsidiaries are
adjusted on the basis of their fair values on the date of acquisition.
6.5 Accounting treatment of disposal subsidiaries
In the case of partial disposal of long-term equity investments in subsidiaries without loss of control, in the
consolidated financial statements, the difference between the disposal price and the net asset share corresponding
to the disposal of long-term equity investments and enjoying the subsidiaries’ continued calculation from the
purchase date or the merger date is used to adjust the capital reserve (capital premium or equity premium). If the
capital reserve is insufficient to offset, the retained earnings are adjusted.
7. Classification of joint venture arrangement and accounting treatment of joint operation
8. Determination criteria of cash and cash equivalent
The cash recognized in the preparation of the cash flow statements, is the Company’s storage cash and deposits
available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements
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refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer to
known sum cash and has slim risk from value changes.
9. Foreign currency exchange and the conversion of foreign currency statements
9.1 Foreign currency exchange
The approximate exchange rate of the spot exchange rate on transaction occurred should be used for standard
money conversion while foreign currency exchange occurred On the balance sheet day, the monetary items are
converted on the current rate on the balance sheet day, concerning the exchange differences between the spot
exchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date,
should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specific
loans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are
still measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged.
Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchange
rate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency and
original amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed)
reckoned into current gains/losses or recognized as other consolidated income.
9.2 Conversion of foreign currency financial statements
Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises,
and the affiliated enterprises on the bookkeeping standard currency different from the Company’s, the accounting
check and preparation of the consolidated financial statements are made. Assets and liabilities items in the balance
sheet are converted on the current rate on the balance sheet day; owners’ equity items besides the “retained profit”
item, the other items are converted on the actual rate. Items of revenue and expenses in profit statement, should
converted by the approximate exchange rate of spot exchange rate on occurring date. The conversion difference of
the foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. If the
foreign cash flow determined by rational system method, the approximate exchange rate of spot exchange rate on
occurring date should prevail. The cash influenced by the rate fluctuation is listed specifically in the cash flow
statement. As for the foreign operation, the conversion difference of the foreign currency statement related to the
foreign operation is transferred in proportion into the disposal of the current loss/gain.
10. Financial instrument
10.1 Category and recognition of financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial
liability or equity instrument for other units.
(1) Financial assets
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The Company classifies financial assets that meet the following conditions as financial assets measured at
amortized cost: ① The Company’s business model for managing financial assets is to collect contractual cash
flows as its goal; ② The contractual terms of the financial assets stipulate that the cash flow generated on a
specific date is only the payment of principal and interest based on the outstanding principal amount.
For investment in non-trading equity instruments, the Company may irrevocably designate it as a financial asset
measured at fair value and its changes included in other comprehensive income at initial recognition. The
designation is made on the basis of a single investment, and the relevant investment meets the definition of equity
instruments from the perspective of the issuer.
Except for financial assets classified as financial assets measured at amortized cost and financial assets measured
at fair value and whose changes are included in other comprehensive income, the Company classifies the financial
assets as financial assets measured at fair value and whose changes are included in current profit or loss. At the
initial recognition, if the accounting mismatch can be eliminated or reduced, the Company can irrevocably
designate the financial asset as a financial asset measured at fair value and its changes are included in the current
profit and loss.
(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at fair value and whose changes are included in
the current profit or loss, financial liabilities formed by the transfer of financial assets that does not meet the
conditions for derecognition or continues to be involved in the transferred financial assets, and financial liabilities
measured at amortized cost at initial recognition. All financial liabilities are not reclassified.
10.2 Measurement of financial instruments
The initial recognition of the Company’s financial instruments is measured at fair value. For financial assets and
financial liabilities measured at fair value and whose changes are included in the current profit and loss, the
related transaction costs are directly included in the current profit and loss; for other types of financial assets or
financial liabilities, the related transaction costs are included in the initial recognition amount. For the accounts
receivable or bills receivable arising from the sale of products or the provision of labor services, not containing or
not considering significant financing components, the Company shall use the amount of consideration expected to
be received as the initial recognition amount. The subsequent measurement of financial instruments depends on
their classification.
(1) Financial assets
① Financial assets measured at amortized cost. After initial recognition, such financial assets are measured at
amortized cost by using the effective interest method. Gains or losses arising from financial assets that are
measured at amortized cost and do not belong to any hedging relationship are included in the current profit or loss
when they are derecognized, reclassified, amortized in accordance with the effective interest rate method, or
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recognized for impairment.
② Financial assets measured at fair value and whose changes are included in the current profit and loss. After
initial recognition, for such financial assets (except for a part of financial assets that belong to the hedging
relationship), the fair value is used for subsequent measurement, and the resulting gains or losses (including
interest and dividend income) are included in the current profit and loss.
③ Investment in debt instruments measured at fair value and whose changes are included in other comprehensive
income. After initial recognition, the subsequent measurement of such financial assets is conducted at fair value.
Interest, impairment losses or gains calculated by using the effective interest rate method and the exchange gains
and losses are included in the current profit and loss, and other gains or losses are included in other
comprehensive income. In derecognition, the accumulated gains or losses previously included in other
comprehensive income are transferred out of other comprehensive income and included in the current profit and
loss.
(2) Financial liabilities
① Financial liabilities measured at fair value and whose changes are included in the current profit and loss. Such
financial liabilities include trading financial liabilities (including derivatives that belong to financial liabilities)
and financial liabilities designated to be measured at fair value and whose changes are included in the current
profit and loss. After initial recognition, the subsequent measurement of such financial liabilities is at fair value,
except for those related to hedge accounting, gains or losses (including interest expenses) resulting from changes
in the fair value of trading financial liabilities are included in the current profit and loss. If a financial liability
designated to be measured at fair value and whose changes are included in the current profit or loss, the amount of
change in the fair value of the financial liability caused by changes in the enterprise’s own credit risk is included
in other comprehensive income, other changes in fair value are included in the current profit and loss. If the
impact of changes in the financial liability’s own credit risk included in other comprehensive income causes or
expands the accounting mismatch in profit or loss, the Company will include all gains or losses on the financial
liability in the current profit and loss.
② Financial liabilities measured at amortized cost. After initial recognition, such financial liabilities are
measured at amortized cost by using the effective interest method.
10.3 The Company’s methods for confirming the fair value of financial instruments
If the financial instrument has an active market, the fair value is determined by the quoted price in the active
market; if the financial instrument doesn’t have an active market, the fair value is determined by adopting the
valuation technique. Valuation techniques mainly include market approach, income approach and cost approach.
In limited circumstances, if the recent information used to determine fair value is insufficient, or the range of
possible estimated amounts of fair value is widely distributed, and the cost represents the best estimate of fair
value within this range, the cost may represent the appropriate estimates of fair value within this distribution range.
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The Company uses all information on the performance and operation of the investee gettable after the initial
recognition date to determine whether the cost represents the fair value or not.
10.4 Confirmation basis and measurement method for the transfer of liabilities of financial assets
(1)Financial assets
If the Company’s financial asset meets one of the following conditions, it shall be terminated for confirmation: ①
The contract right to receive the cash flow of the financial asset is terminated; ② The financial asset has been
transferred, and the Company has transferred almost all risks and rewards of ownership of the financial asset; ③
The financial asset has been transferred, although the Company has neither transferred nor retained almost all the
remuneration in the ownership of the financial asset, it has not retained control of the financial asset.
If the transfer of financial assets meets the conditions for derecognition, the difference between the following two
amounts shall be included in the current profit and loss: ① The book value of the transferred financial assets on
the date of derecognition; ② The sum of the consideration received for the transfer of financial assets and the
amount corresponding to the derecognized part of the cumulative amount of changes in fair value that was directly
included in other comprehensive income (the financial assets involved in the transfer are classified as financial
assets measured at fair value and their changes are included in other comprehensive income).
(2) Financial liability
If the current obligation of the financial liability (or part of it) has been discharged, the Company derecognizes the
financial liability (or part of the financial liability).
If the financial liability (or part of it) is derecognized, the Company shall include the difference between its book
value and the consideration paid (including non-cash assets transferred out or liabilities assumed) into the current
profit and loss.
11.Note receivable
11.1 How to determine expected credit losses
Based on expected credit losses, the Company makes impairment accounting treatment and confirm loss
provisions for financial assets (including receivables) measured at amortized cost and financial assets (including
receivables financing) that are measured at fair value and whose changes are included in other comprehensive
income, and lease receivables.
The Company assesses on each balance sheet date whether the credit risk of relevant financial instruments has
increased significantly since initial recognition, and divides the process of credit impairment of financial
instruments into three stages, and adopts different accounting treatment methods for financial instruments
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impairment at different stages: (1) In the first stage, if the credit risk of a financial instrument has not increased
significantly since its initial recognition, the Company shall measure the loss provisions according to the expected
credit losses of the financial instrument in the next 12 months, and calculate the interest income according to its
book balance (i.e. without deducting impairment) and actual interest rate; (2) In the second stage, if the credit risk
of a financial instrument has increased significantly since the initial recognition but no credit impairment has
occurred, the Company shall measure the loss provisions according to the expected credit losses of the financial
instrument during the entire duration, and calculate the interest income according to its book balance and actual
interest rate; (3) In the third stage, if the credit impairment occurs after initial recognition, the Company shall
measure loss provisions based on the expected credit losses of the financial instrument for the entire duration, and
calculate the interest income according to its book balance and actual interest rate.
(1) Methods of measuring loss provisions for financial instruments with lower credit risk
For financial instruments with lower credit risk on the balance sheet date, the Company can directly make the
assumption that the credit risk of the instrument has not increased significantly since the initial recognition
without comparing with the credit risk at the initial recognition.
If the default risk of financial instruments is low, the debtor’s ability to fulfill its contractual cash flow obligations
is strong in the short term, and even if there are adverse changes in the economic situation and operating
environment over a long period of time, it may not necessarily reduce the borrower’s ability to fulfill the
contractual cash flow obligations, the financial instrument shall be considered to have lower credit risk.
(2) Methods of measuring loss provisions for accounts receivable and lease receivables
①Receivables that do not contain significant financing components. For the receivables formed by transactions
regulated by “Accounting Standards for Business Enterprises No.14-Revenue” and without containing significant
financing components, the Company adopts a simplified method, that is, it always calculates the loss provisions
based on the expected credit losses for the entire duration.
Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly
on the basis of individual financial assets or financial assets portfolios. The Company divides the notes receivable
and accounts receivable into several portfolios based on the characteristics of credit risk, and calculates the
expected credit losses on the basis of the portfolios, the basis for determining the portfolios is as follows:
Accounts receivable portfolio 1: A portfolio that uses the aging of accounts receivables as credit risk
characteristics,
Accounts receivable portfolio 2: Combination of related parties included in the scope of consolidated statements
Notes receivable portfolio 1: Same as the division of accounts receivable portfolio
Notes receivable portfolio 2: Management evaluates that this type of fund is bank acceptance portfolio with lower
credit risk
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For the accounts receivable and notes receivable being divided into portfolio 1, the Company refers to the
historical credit loss experience, combines with the current conditions and the prediction of future economic
situation, and prepares a comparison table of the aging of accounts receivable and the expected credit loss rate of
the entire duration, and calculates the expected credit losses.
For accounts receivable and notes receivable being divided into portfolio 2, the Company refers to historical credit
loss experience, combines with the current conditions and the predictions of future economic conditions, and
calculates the expected credit losses of 0% through default risk exposure and expected credit loss rate for the
entire duration.
②Accounts receivables and leases receivables that contain significant financing components. For accounts
receivables that contain significant financing components and leases receivables regulated by “Accounting
Standards for Business Enterprises No. 21-Leases”, the Company measures loss provisions in accordance with the
general method, that is, the “third stage” model.
(3) Methods of measuring loss reserves for other financial assets
For financial assets other than the above, such as debt investment, other debt investment, other receivables,
long-term receivables other than lease receivables, etc., the Company uses the general method, that is, the
three-stage model to measure loss reserves.
When measuring the credit impairment of financial instruments, the Company considers the following factors in
assessing whether the credit risk has increased significantly:
The Company divides other receivables into a number of portfolios based on the nature of the money, and
calculates the expected credit loss on the basis of the portfolio. The basis for determining the portfolio is as
follows:
Other receivables portfolio 1: A portfolio of unrelated parties with provision for impairment in accordance with
the expected loss rate
Other receivables portfolio 2: A portfolio of related parties included in the scope of the consolidated statement
For other receivables classified into portfolio 1, the Company refers to historical credit loss experience, combines
with current conditions and forecasts of future economic conditions, compiles a comparison table of accounts
receivable aging and expected credit loss rate of the entire duration, and calculates the expected credit loss.
For other receivables classified into portfolio 2, the Company refers to historical credit loss experience, combines
with current conditions and forecasts of future economic conditions, and calculates an expected credit loss of 0%
through the default risk exposure and the expected credit loss rate of the entire duration .
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(4)Accrual method of bad debt provision for those accrual by account age as the portfolio
Account age Expected credit loss rate of receivable (%) Expected credit loss rate of other receivable
(%)
Within one year (one year included) 0 0
1-2 years 5 5
2-3 years 10 10
Over 3 years 30 30
11.2 Accounting treatment methods of expected credit losses
In order to reflect the changes in the credit risk of financial instruments since initial recognition, the Company
remeasures the expected credit losses on each balance sheet date, and the resulting increase or reversal of the loss
provisions should be counted as an impairment loss or gain and included in the current profit and loss, and based
on the type of financial instrument, offsets the book value of the financial asset listed in the balance sheet or
includes in the estimated liability (loan commitment or financial guarantee contract) or includes in other
comprehensive income (debt investments measured at fair value and whose changes are included in other
comprehensive income).
12. Account receivable
Same as 10. Note receivable
13.Receivable financing
Same as 10. Note receivable
14. Other account receivable
Determination and accounting treatment on the expected credit losses of other account receivable
Same as 10. Note receivable
15. Inventory
15.1 Categories of inventory
The inventory is goods or manufactured products held for sale, products in process, and materials and matters
utilized in the production or supply of labor. Mainly including raw material, revolving materials (wrappage and
low-value consumption goods etc.), outside processing materials, goods in process, semi-finished goods, stocks
and so on.
15.2 Accounting method for inventory delivery
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When inventories are issued, the actual cost is determined by the first in first out method.
15.3 Accrual method inventory falling price reserves
On the balance sheet day, the inventory is measured on the lower one between the cost and the net realizable value,
and the provision for the falling price reserves is accrued on each inventory item; however, as for the inventory of
large quantity and low price, the provision is accrued on the inventory category.
15.4 Inventory system
Inventory system of the Company is perpetual inventory system
15.5 Amortization method for the low-value consumables and wrap page
Low-value consumables and packages are amortized by one-point method
16. Contractual assets
17. Contractual costs
18. Assets held for sale
19. Debt investment
20. Other debt investment
21. Long-term account receivable
22. Long-term equity investment
22.1 Recognition of initial investment cost
For a long-term equity investment obtained by a business combination, if it is a business combination under the
same control, take the share of the combine party obtained in the book value of the net assets in the consolidated
financial statements of the ultimate controlling party on the combination date as the initial investment cost; in the
case of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognized
consolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, the
initial investment cost is the actual purchase payment. As for the long term equity investment obtained by the
equity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-term
equity investment obtained by debt reorganization, initial investment cost of such investment should determine by
relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; as for the
long term equity investment obtained by the exchange of the non-monetary assets, the initial investment cost is
recognized on the relevant rules in the “Accounting Standards for Business Enterprise No. 7- Exchange of
Non-Monetary Assets”
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22.2 Subsequent measurement and profit or loss recognition
Where the company has a control over the investee, long-term equity investments are measured using cost method.
Long-term equity investments in associates and joint ventures are measured using equity method. Where part of
the equity investments of an investor in its associates are held indirectly through venture investment institutions,
common fund, trust companies or other similar entities including investment linked insurance funds, such part of
equity investments indirectly held by the investor shall be measured at fair value through profit or loss according
to according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognition
and measurement of Financial Instruments regardless whether the above entities have significant influence on
such part of equity investments, while the remaining part shall be measured using equity method.
22.3 Basis of conclusion for common control and significant influence over the investee
Joint control over an investee refers to where the activities which have a significant influence on return on certain
arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes
the sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets,
research and development activities and financing activities, etc.; Significant influence on the investee refers to
that: significant influence over the investee exists when holding more than 20% but less than 50% of the shares
with voting rights or even if the holding is below 20%, there is still significant influence if any of the following
conditions is met: there is representative in the board of directors or similar governing body of the investee;
participation in the investee’s policy setting process; assign key management to the investee; the investee relies on
the technology or technical information of the investing company; or major transactions with the investee.
23. Investment real estate
Measurement for investment real estate
Cost method
Depreciation or amortization method
The types of investment real estate of the Company include the leased land use rights, leased buildings, and land
use rights held and prepared for transfer after appreciation. Investment real estate is initially measured at cost and
subsequently measured by using the cost model.
The leased buildings in the Company’s investment property adopts straight-line depreciation to calculate and
distill depreciation, specific accounting policy are same as part of the fixed assets. The leased land use rights in
the investment property and the land use rights to be transferred after appreciation adopt straight-line amortization,
specific accounting policy are same as part of the intangible assets.
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24. Fixed assets
(1) Recognition
Fixed assets refers to the tangible assets holding for purpose of producing goods, providing labor services, leasing
or operation management, which has one accounting fiscal year of using life. Meanwhile as up to the following
conditions, they are recognized: the economic interest related to the fixed assets probably flow into the Company;
the cost of the fixed assets can be measured reliably.
(2) Depreciation method
Annual depreciation
Category Depreciation method Depreciation life (year) Salvage rate
rate
Straight-line
House building 20-50 10 1.8-4.5
depreciation
Straight-line
Machinery equipment 10 10 9
depreciation
Straight-line
Mold equipment 3 10 30
depreciation
Transportation Straight-line
5 10 18
equipment depreciation
Straight-line
Instrument equipment 5 10 18
depreciation
Straight-line
Tool equipment 5 10 18
depreciation
Straight-line
Office equipment 5 10 18
depreciation
N/A
(3) Recognition basis, valuation and depreciation method for fixed assets under financing lease
The fixed assets under financing lease are the lease that has substantially transferred all the risks and rewards
associated with asset ownership. The initial valuation of the fixed assets under financing lease is to take the lower
one between the fair value of the leased assets and the present value of the minimum lease payments on the start
date of the lease period as the entry value; the subsequent valuation of the fixed assets under financing lease
adopts the depreciation policy consistent with the own fixed assets to make depreciation and impairment
provision.
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25. Construction in process
Construction in process of the Company divided as self-run construction and out-bag construction. The
Construction in process of the Company carried forward as fixed assets while the construction is ready for the
intended use. Criteria of the expected condition for use should apply one of the follow conditions: The substance
construction (installation included) of the fixed assets has completed all or basically; As the projects have been in
test production or operation, and the results show that the assets can operate properly and produce the qualified
products stably, or the test operation result shows the assets can operate or open properly. The expenditure of the
fixed assets on the construction is a little or little. The fixed assets of the project constructed have been up to the
requirements of the design or contract, or basically up to.
26. Borrowing expenses
26.1 Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it is
capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the
actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital
assets, investment real estate, and inventory reaching the expectant availability or sale ability.
26.2 Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period
of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while
the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or
production.
As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual
interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the
return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is
recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and
times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or
premium to be diluted in every accounting period is recognized in the actual rate method.
The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future
cash flow in the expectant duration period as the current book value of the borrowing.
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27. Biological assets
28. Oil and natural gas assets
29.Right-of-use assets
30. Intangible assets
(1) Accounting method, service life and impairment test
1. Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it is
capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the
actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital
assets, investment real estate, and inventory reaching the expectant availability or sale ability.
2. Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period
of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while
the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or
production.
As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual
interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the
return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is
recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and
times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or
premium to be diluted in every accounting period is recognized in the actual rate method.
The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future
cash flow in the expectant duration period as the current book value of the borrowing.
(2) Accounting policies for internal research and development expenditure
Specific criteria for the research phase and development phase of internal R&D projects, and specific criteria for
development phase expenditures to qualify for capitalization
Expenditures for internal research and development projects at the research phase shall be included in the current
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profit or loss when incurred; expenditures incurred at the development phase and recognized as intangible assets
shall be transferred to intangible assets accounting.
31. Long-term assets impairment
Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets,
construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets and
goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If
the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount,
a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future
cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on
the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the
recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest
group of assets that is able to generate independent cash inflows.
Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective of
whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carrying
amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable
basis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to
each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher
than its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of the
goodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (other
than the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of each
asset.
Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period.
32. Long-term deferred expenses
The Company’s long-term deferred expenditure are expenses paid out and with one year above (one-year
excluded) benefit period. The long-term deferred expenses are diluted by periods according to the benefit period.
As the long-term deferred expenses cannot enable the accounting period’s beneficiary, all dilution values of the
project undiluted yet, are transferred into the current loss/gain.
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33. Contractual liabilities
The company presents the obligation to transfer goods or provide services to customers for consideration received
or receivable as a contract liability.
34. Employees remuneration
(1) Accounting for short-term benefits
In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit
or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for the
current period. At the time of actual occurrence, The Company’s employee benefits are recorded into the profits
and losses of the current year or assets associated costs according to the actual amount. The non-monetary
employee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injury
insurance, maternity insurance and other social insurances, housing fund and labor union expenditure and
personnel education that the Company paid for employees, the Company should recognize corresponding
employees benefits payable according to the appropriation basis and proportion as stipulated by relevant
requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the
current period or recognized as respective assets costs.
(2) Accounting for post-employment benefits
During the accounting period in which an employee provides service, the amount payable calculated under
defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period
or in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method and
attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the
service period of the employee, and record the obligation in the current profit and loss or related assets cost.
(3) Accounting for termination benefits
The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlier
of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the
Company recognizes costs for restructuring involving the payment of termination costs.
(4) Accounting for other long-term employee benefits
The Company provides other long-term employee benefits to its employees. For those falling within the scope of
defined contribution scheme, the Company shall account for them according to relevant requirements of the
defined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets of
the other long-term employee benefits according to relevant requirements of the defined contribution scheme.
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35. Lease liability
36. Accrual liability
The obligation related to contingencies is the current obligation assumed by the company, and performing this
obligation may result in an outflow of economic benefits, and this obligation can be determined as the estimated
liabilities when the amount can be reliably measured. The Company makes initial measurement in accordance
with the best estimate for performing the related current obligation, if the expenditure as needed has a continuous
range, and the likelihood of occurrence of various results in this range is the same, the best estimate is determined
by the median value within the range; if a number of items are involved, the best estimate is determined by the
calculation of various possible outcomes and related probabilities.
At the balance sheet date, the book value of estimated liabilities should be rechecked, if there is conclusive
evidence indicates that this book value cannot truly reflect the current best estimate, and then the book value
should be adjusted in accordance with the current best estimate.
37.Share-based payment
38. Other financial instrument as preferred shares and perpetual bonds
39. Revenue (income)
Accounting policy for recognition and measurement of revenue(income)
The Company recognizes revenue based on the transaction price allocated to the performance obligations at the
time when it has fulfilled the performance obligations in the contract, that is, when the customer obtains control
rights of the relevant goods or services. Obtaining control rights of related goods means being able to lead the use
of the goods and obtain almost all economic benefits from them. Performance obligations refer to the Company's
commitment to transfer clearly distinguishable goods to customers in the contract. The transaction price refers to
the amount of consideration that the Company expects to be entitled to receive due to the transfer of goods to the
customer, not including the amount collected on behalf of a third party and the amount that the Company expects
to return to the customer.
Whether the performance obligation is to be performed within a certain period of time or at a certain point of time
depends on the terms of the contract and relevant legal provisions. If the performance obligation is performed
within a certain period of time, the Company recognizes revenue in accordance with the progress of the
performance. Otherwise, the Company recognizes revenue at a certain point when the customer obtains control
rights of the relevant assets.
The Company's specific revenue recognition methods:
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The sales contract between the Company and the customer usually only contains the performance obligation for
the transferred goods. The Company’s performance obligation for the transfer of goods does not meet the three
conditions for performance within a certain period of time, therefore, the Company usually recognizes revenue at
the time-point of completion of the inspection of incoming on the basis of comprehensive consideration of the
following factors, i.e. for domestic sales, the revenue is recognized when the product has been sent out and the
other party has signed for confirmation. For export sales, the revenue is recognized by the relevant customs
declaration documents when the product has been shipped and customs declaration procedures have been
completed.
The house lease contract signed by the Company and the customer usually only contains the performance
obligation for the provision of lease and property services, the Company recognizes revenue according to the
progress of performance when a performance obligation is performed within a certain period of time, i.e. as
agreed in the lease contract, revenue is recognized when related payments are received or evidence of collections
is obtained.
Different business models of similar business resulted in different accounting policies for revenue recognition
N/A
40. Government subsidy
40.1Category of government subsidy and accounting treatment
Governments subsidy of the Company refer to the monetary and non-monetary assets obtained from government
for free (excluding the capital invested by government as an owner). If the government grants are monetary assets,
it shall be measured according to the amount received or receivable. If the government grants are non-monetary
assets, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at the
nominal amount.
Government grants related to daily activities are included in other income in accordance with the economic
business. Government grants not related to daily activities are included in the non-operating income and
expenditure.
Government grants that the government documents clearly stipulate to be used for the purchase and establishment
or forming long-term assets in other way are recognized as government grants related to assets. For the
government grants that the government documents do not clearly specify the subsidy target and can form
long-term assets, the part corresponding to the asset value is recognized as the government grants related to the
assets, and the rest is recognized as the government grants related to the income. For the government grants which
are difficult to be distinguished, recognize the whole as the government grants related to the income. Government
grants related to assets are recognized as deferred income. The amount recognized as deferred income is included
in the current profit and loss in a reasonable and systematic manner within the useful life of the relevant asset.
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Government grants other than government grants related to assets are recognized as government grants related to
income. If the government grants related to the income are used to compensate the related expenses or losses of
the enterprise in the future period, recognize them as deferred income and include them in the current profit and
loss during the period of recognizing the related expenses. The government grants used to compensate the relevant
expenses or losses incurred by the enterprise are directly included in the current profit and loss.
The Company obtained the policy preferential loan interest subsidy, and the finance allocated the interest subsidy
funds to the loan bank, and the loan bank provides loans to the Company at a preferential interest rate, take the
actual amount of the loan received as the entry value of the loan, and calculate the relevant borrowing costs
according to the loan principal the policy preferential interest rate. If the finance directly appropriates the interest
subsidy funds to the Company, the Company will offset the relevant borrowing costs with the corresponding
interest subsidy.
40.2 Time points to recognize the government grants
Government grants are recognized when they meet the conditions attached to government grants and can be
received. Government grants measured in accordance with the amount receivable are recognized when there is
conclusive evidence at the end of the period that it meets the relevant conditions stipulated in the financial support
policy and is expected to receive financial support funds. Other government grants other than government grants
measured in accordance with the receivable amount are recognized when the grant is actually received.
41. Deferred income tax asset / deferred income tax liability
41.1 Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for an
item that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law,
the tax base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be
determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay
off.
41.2 The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it
is most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet
date, if there have concrete evidence of obtaining, in future period, enough taxable amounts to deduct the
deductible temporary difference, the un-confirmed deferred income tax assets in previous accounting period shall
be recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income
tax assets, book value of the deferred income tax assets shall be kept in decreased.
41.3The taxable temporary differences related to the investments of subsidiary companies and associated
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enterprises shall recognized as deferred income tax liability, unless the Company can control the time of the
reverse of temporary differences and the temporary differences are unlikely to be reversed in the expected future.
As for the deductible temporary difference related to the investment of the subsidiary companies and associated
enterprises, deferred income tax assets shall be recognized while the temporary differences are likely to be
reversed in the expected future and it is likely to acquire any amount of taxable income tax that may be used for
making up the deductible temporary differences.
42. Leasing
(1) Accounting treatment for operating lease
Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either
included in the cost of related asset or charged to profit or loss for the period.
(2) Accounting treatment for finance lease
Accounting treatment for finance lease: At the commencement of the lease term, the Group records the leased
asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum
lease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge,
using the effective interest method amortization during the lease term. Minimum lease payments deducting
unrecognized financing charges are listed as long-term payable.
43. Other important accounting policy and estimates
N/A
44. Changes in important accounting policies and estimates
(1) Changes in important accounting policies
√ Applicable □ Not applicable
Content and reason of changes in
Approval procedure Note
accounting policies
44.1 Change in accounting policies and basis
The revised Accounting Standards for Business Enterprise No. 14- Revenue (hereinafter referred to as New
Revenue Standard) was released by the Ministry of Finance in 2017. the Company implemented the New Revenue
Standards and Notice since 1 Jan. 2020. and relevant content of the accounting polices are adjusted.
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The new revenue standards replaced the "Accounting Standards for Business Enterprises No. 14-Revenue" and
"Accounting Standards for Business Enterprises No. 15-Construction Contracts" (collectively referred to as the
"original revenue standards") promulgated by the Ministry of Finance in 2006. Under the original revenue
standards, the Company used the transfer of risk rewards as the judgment standard for the timing of revenue
recognition. The new revenue standards introduce the “five-step method” of revenue recognition and
measurement, and provide more guidance for specific transactions or events. Under the new revenue standards,
the Company uses the transfer of control as the judgment standard for revenue recognition. For the specific
accounting policies of revenue recognition and measurement, please refer to "Note III. (22) Revenue".
The Company has adjusted relevant accounting policies in accordance with the specific provisions of the new
revenue standards on specific matters or transactions. According to the provisions of the new revenue standards,
the contract assets or contract liabilities are listed in the balance sheet based on the relationship between
performance obligations and customer payments. At the same time, the Company provides more disclosures on
income-related information disclosure requirements in accordance with the new revenue standards, such as
information related to important contracts or business and performance obligations and information related to
transaction prices allocated to the remaining performance obligations, including the usual performance time of
performance obligations, the important payment terms, the nature of the goods the company promises to transfer
(including the explanation of whether the company is an agent), the company’s expected return to customers and
other similar obligations, the expected refund to the customer assumed by the company and other similar
obligations, the type of quality assurance and related obligations.
The Company reviews revenue sources and customer contract procedures to assess the impact of the new revenue
standards on financial statements. The Company’s revenue is mainly derived from the sale of goods, and revenue
is recognized when the goods are delivered or the service acceptance is completed. The adoption of the new
revenue standards has no significant impact on the Company except for the presentation of financial statements.
(2)Changes in important accounting estimates
□ Applicable √Not applicable
(3) Adjustment the financial statements at the beginning of the first year of implementation of new leasing
standards since 2021
Applicable
Whether needs to adjust the balance sheet at the beginning of the year
□Yes √No
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Explanation of reasons for not requiring the adjustment of beginning balance sheet account
No impact items
(4) Retrospective adjustment of early comparison data description when initially implemented the new
leasing standards since 2021
□ Applicable √ Not applicable
45. Other
VI. Taxes
1. Major tax and tax rate
Taxes Taxation basis Tax rate
VAT Sales revenue 13%, 9%, 6%, 5%, 3%
Consumption tax Turnover tax payable 7%
Corporate income tax Taxable income 25%, 15%
Educational surtax Turnover tax payable 3%
Local educational surtax Turnover tax payable 2%, 1.5%
Property tax 70% of original value of the property 1.2%
Explain the different taxation entity of the enterprise income tax
Taxation entity Income tax rate
2. Tax preferences
According to the “Measures for the Determination of High-tech Enterprises”, and through the enterprise
application, expert review, and public announcement and other procedures, the Company’s wholly-owned
subsidiary, Wuhan Hengfa Technology Co., Ltd., has been identified as a high-tech enterprise, and obtained the
“High-tech Enterprise Certificate” jointly issued by the Science and Technology Department of Hubei Province,
Hubei Provincial Finance Department, Hubei Provincial Office, SAT, and Local Taxation Bureau of Hubei
Province on December 1, 2020, the certificate number is GR202042003237, which is valid for 3 years. The
applicable corporate income tax rate of the subsidiary Wuhan Hengfa Technology Co., Ltd. for 2021was 15%.
3. Other
Nil
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VII. Notes to main items in consolidated financial statement
1. Monetary fund
In RMB
Item Ending balance Opening balance
Cash on hand 903.40 138,673.02
Bank deposit 16,620,293.80 30,141,013.39
Other monetary fund 42,990,989.02 30,688,367.17
Total 59,612,186.22 60,968,053.58
Other explanation
Other currency funds are bank acceptance bill margin
2. Trading financial assets
In RMB
Item Ending balance Opening balance
Including:
Including:
Other note:
3. Derivative financial assets
In RMB
Item Ending balance Opening balance
Other note:
4. Note receivable
(1) Category
In RMB
Item Ending balance Opening balance
Commercial acceptance bill 491,683.78 20,240,464.79
Total 491,683.78 20,240,464.79
In RMB
Ending balance Opening balance
Category Bad debt Book Book
Book balance Book balance Bad debt provision
provision value value
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Amoun Proport Amoun Accrua Amoun Proport Accrual
Amount
t ion t l ratio t ion ratio
Including:
Including:
Accrual of bad debt provision on single basis:
In RMB
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio:
In RMB
Ending balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer to
the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
Amount changed in the period
Opening
Category Collected or Ending balance
balance Accrual Written-off Other
reversal
Including major amount bad debt provision that collected or reversal in the period:
□ Applicable √Not applicable
(3) Notes receivable that the company has pledged at the end of the period
In RMB
Item Amount pledge at period-end
(4) Notes endorsement or discount and undue on balance sheet date
In RMB
Item Amount derecognition at period-end Amount not derecognition at period-end
Commercial acceptance bill 211,799.13
Total 211,799.13
89
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
(5) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB
Item Amount transfer to account receivable at period-end
Other note
(6) Note receivable actually written-off in the period
In RMB
Item Written-off amount
Written-off situation of important notes receivable:
In RMB
Whether the
Written-off payment is
Nature of notes Written-off
Name Written-off reason procedure generated by
receivable amount
performed related party
transactions
Notes receivable written-off description:
5. Account receivable
(1) Category
In RMB
Ending balance Opening balance
Bad debt
Book balance Book balance Bad debt provision
Category provision Book Book
Amoun Proport Amoun Accrua value Amoun Proport Amoun Accrual value
t ion t l ratio t ion t ratio
Account receivable
with bad debt 13,146, 13,156, 100.00 13,146, 13,146, 100.00
0.00 9.31% 0.00
provision accrual 290.18 183.96 % 290.18 290.18 %
on a single basis
Including:
Account receivable
135,77 135,75 128,07
with bad debt 9,893.7 9,893.7 128,063,
0,727.1 0.01% 0,939.5 3,805.5 90.69% 0.01%
provision accrual 8 8 911.79
5 9 7
by combination
Including:
Combination 1: 135,77 9,893.7 0.01% 135,75 128,07 90.69% 9,893.7 0.01% 128,063,
90
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SEMI-ANNUAL REPORT 2021
Take account ages 0,727.1 8 0,939.5 3,805.5 8 911.79
of receivables as a 5 9 7
combination of
credit risk
characteristics
148,91 135,75 141,22
13,166, 100.00 13,156, 128,063,
Total 7,017.3 0,939.5 0,095.7 8.66%
077.74 % 183.96 911.79
3 9 5
Accrual of bad debt provision on single basis: 13,146,290.18
In RMB
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Shenzhen Portman
Bowling Club Co., 2,555,374.75 2,555,374.75 100.00% Uncollectible
Ltd.
Hong Kong Haowei
1,870,887.18 1,870,887.18 100.00% Uncollectible
Industrial Co., Ltd.
TCL ACE ELECTRIC
APPLIANCE
1,325,431.75 1,325,431.75 100.00% Uncollectible
(HUIZHOU) CO.,
LTD.
Qingdao Haier Parts
1,225,326.15 1,225,326.15 100.00% Uncollectible
Procurement Co., Ltd.
SKYWORTH
Multimedia 579,343.89 579,343.89 100.00% Uncollectible
(Shenzhen) Co., Ltd.
Shenzhen Huixin
Video Technology Co., 381,168.96 381,168.96 100.00% Uncollectible
Ltd.
Shenzhen Wandelai
Digital Technology 351,813.70 351,813.70 100.00% Uncollectible
Co., Ltd.
Shenzhen Dalong
344,700.00 344,700.00 100.00% Uncollectible
Electronic Co., Ltd.
Shenzhen Keya
332,337.76 332,337.76 100.00% Uncollectible
Electronic Co., Ltd.
Shenzhen Qunping
304,542.95 304,542.95 100.00% Uncollectible
Electronic Co., Ltd.
China Galaxy
288,261.17 288,261.17 100.00% Uncollectible
Electronics (Hong
91
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Kong) Co., Ltd.
Dongguan Weite
274,399.80 274,399.80 100.00% Uncollectible
Electronic Co., Ltd.
Chuangjing 247,811.87 247,811.87 100.00% Uncollectible
Hong Kong New
Century Electronics 207,409.40 207,409.40 100.00% Uncollectible
Co., Ltd.
Shenyang Beitai
203,304.02 203,304.02 100.00% Uncollectible
Electronic Co., Ltd.
Beijing Xinfang Weiye
193,000.00 193,000.00 100.00% Uncollectible
Technology Co., Ltd.
TCL Electronics (Hong
145,087.14 145,087.14 100.00% Uncollectible
Kong) Co., Ltd.
Huizhou TCL Xinte
142,707.14 142,707.14 100.00% Uncollectible
Electronics Co., Ltd.
Sky Worth – RGB
133,485.83 133,485.83 100.00% Uncollectible
Electronic Co., Ltd.
Other 2,039,896.72 2,039,896.72 100.00% Uncollectible
Total 13,146,290.18 13,146,290.18 --
Accrual of bad debt provision on single basis:
In RMB
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio: 9893.78
In RMB
Ending balance
Name
Book balance Bad debt provision Accrual ratio
Within one year
1-2 years 50,840.84 2,542.04 5.00%
2-3 years 65,934.11 6,593.41 10.00%
Over 3 years 2,527.77 758.33 30.00%
Total 119,302.72 9,893.78 --
Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
92
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SEMI-ANNUAL REPORT 2021
In RMB
Account ages Book balance
Within one year (one year included) 135,313,612.32
1-2 years 316,209.95
2-3 years 65,934.11
Over 3 years 13,221,260.95
3-4 years 74,970.77
Over 5 years 13,146,290.18
Total 148,917,017.33
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
Amount changed in the period
Opening
Category Collected or Ending balance
balance Accrual Written-off Other
reversal
Including major amount bad debt provision that collected or reversal in the period:
In RMB
Company Amount collected or reversal Way of collection
(3) Actual written-off accounts receivable in the current period
In RMB
Item Written-off amount
Including the important accounts receivable written-off situation:
In RMB
Whether the
Written-off payment is
Nature of accounts Written-off
Name Written-off reason procedure generated by
receivable amount
performed related party
transactions
Written-off description of accounts receivable:
(4) Top 5 account receivables collected by arrears party at ending balance
In RMB
Ending balance of account Proportion in total account Ending balance of bad debt
Company
receivable receivables at period-end provision
93
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SEMI-ANNUAL REPORT 2021
Qingdao Haidayuan
Purchasing Service Co., 55,398,955.61 41.00%
Ltd.
Hong Kong Yutian
International Investment 29,037,251.56 21.00%
Co., Ltd.
Hefei Hangjia Display
20,818,896.99 15.00%
Technology Co., Ltd.
TCL Air Conditioner
17,304,577.43 13.00%
(Wuhan) Co., Ltd.
Viewsonic
9,050,774.07 7.00%
International Copera
Total 131,610,455.66 97.00%
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
Other note:
Nil
6. Receivable financing
In RMB
Item Ending balance Opening balance
Haier Electronic Acceptance 5,774,948.69 10,057,385.11
Total 5,774,948.69 10,057,385.11
Receivable financing Changes in the period and changes in fair value
□ Applicable √Not applicable
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
Other explanation:
94
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
7. Accounts paid in advance
(1) By account age
In RMB
Ending balance Opening balance
Account ages
Amount Proportion Amount Proportion
Within one year 31,776,308.14 99.42% 39,458,164.61 99.52%
1-2 years 102,781.00 0.32% 102,781.00 0.27%
2-3 years 82,309.50 0.26% 82,309.50 0.21%
Over 3 years 0.00
Total 31,961,398.64 -- 39,643,255.11 --
Explanation on reasons of failure to settle on important account paid in advance with age over one year:
Nil
(2) Top 5 account paid in advance at ending balance by prepayment object
Company Ending balance Proportion in accounts paid in
advance
Hefei Hangjia Display Technology Co., Ltd. 10,981,759.00 34%
AU Optronics Co., Ltd. 8,231,592.52 26%
Nanjing CEC Panda LCD Technology Co., 3,243,380.00 10%
Ltd.
Guangzhou Houxiang Electronic 820,800.00 3%
Technology Co., Ltd.
Gree Precision Mold (Wuhan) Co., Ltd. 745,620.00 2%
Other explanation:
Nil
8. Other account receivable
In RMB
Item Ending balance Opening balance
Other account receivable 22,540,779.20 4,466,949.96
Total 22,540,779.20 4,466,949.96
1) Category of interest receivable
In RMB
Item Ending balance Opening balance
95
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SEMI-ANNUAL REPORT 2021
2) Significant overdue interest
In RMB
Whether there is
Borrower Ending balance Overdue time Reason for overdue impairment and its
judgment basis
Other note:
Nil
3) Accrual of bad debt provision
□ Applicable √Not applicable
(2) Dividend receivable
1) Category of dividend receivable
In RMB
Item (or invested unit) Ending balance Opening balance
2) Important dividend receivable with account age over one year
In RMB
Whether there is
Reasons for
Item (or invested unit) Ending balance Account age impairment and its
non-recovery
judgment basis
3) Accrual of bad debt provision
□ Applicable √Not applicable
Other note:
(3) Other account receivable
1) Other account receivable by nature
In RMB
Nature Ending book balance Opening book balance
Margin & deposit 1,381,560.00 1,681,688.00
Borrow money 2,889,381.44 2,124,073.12
Intercourse funds 23,785,393.79 8,924,093.42
96
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Rental receivable 8,311,911.11 6,224,167.48
Other 1,024,034.71 364,429.79
Less: Bad debt provision -14,851,501.85 -14,851,501.85
Total 22,540,779.20 4,466,949.96
2) Accrual of bad debt provision
In RMB
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance on1 Jan. 2021 117.75 14,812,059.79 14,851,501.85
Balance of 1 Jan. 2021
—— —— —— ——
in the period
Balance on Dec. 31,
117.75 14,812,059.79 14,851,501.85
2021
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
In RMB
Account ages Book balance
Within one year (one year included) 21,174,519.27
1-2 years 297,671.40
2-3 years 312,212.44
Over 3 years 15,607,877.94
3-4 years 1,446,706.00
4-5 years 943,020.00
Over 5 years 13,218,151.94
Total 37,392,281.05
3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
Category Opening Amount changed in the period Ending balance
97
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SEMI-ANNUAL REPORT 2021
balance Collected or
Accrual Written-off Other
reversal
Including the important amount collected or switches back in the period:
In RMB
Company Amount collected or switches back Way of collection
4) The actual written-off other receivables in the current period
In RMB
Item Written-off amount
Including the important written-off situation of other receivables:
In RMB
Whether the
Written-off payment is
Nature of other Written-off
Name Written-off reason procedure generated by
receivables amount
performed related party
transactions
Description of other receivables written-off:
5) Top 5 other receivables collected by arrears party at ending balance
In RMB
Proportion in total
Ending balance of
Company Nature Ending balance Account ages other receivables
bad debt provision
at period-end
Portman Rental receivable 4,021,734.22 Over 3 years 18.00% 4,021,734.22
Shenzhen Jifang
Investment Co., Rental receivable 1,380,608.00 Over 3 years 6.00% 1,380,608.00
Ltd
Fujian Jielian
Electronics Co., Margin & deposit 800,000.00 Over 3 years 4.00% 240,000.00
Ltd.
Compensation for
Intercourse funds 555,785.81 Over 3 years 2.00% 555,785.81
traffic accidents
Hebei Botou Court Intercourse funds 520,021.00 Over 3 years 2.00% 520,021.00
Total -- 7,278,149.03 -- 6,718,149.03
6) Receivables involving government subsidies
In RMB
98
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Estimated time,
Government subsidy
Name Ending balance Ending account age amount and basis of
item
receipt
7) Other receivable for termination of confirmation due to the transfer of financial assets
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other note:
9. Inventories
Whether companies need to comply with the disclosure requirements of the real estate industry
No
(1) Category
In RMB
Ending balance Opening balance
Inventories fall Inventories fall
provision or provision or
contract contract
Item
Book balance performance Book value Book balance performance Book value
costs costs
impairment impairment
provision provision
Raw materials 67,070,060.38 2,191,320.92 64,878,739.46 39,735,101.27 1,691,320.92 38,043,780.35
Inventory
55,795,276.78 2,523,369.82 53,271,906.96 27,562,913.38 1,673,369.82 25,889,543.56
goods
Homemade
semi-finished 11,750,725.54 29,363.73 11,721,361.81 6,213,029.56 29,363.73 6,183,665.83
products
Low priced and
easily worn 156,274.66 110,622.38 45,652.28 159,646.13 110,622.38 49,023.75
articles
Total 134,772,337.36 4,854,676.85 129,917,660.51 73,670,690.34 3,504,676.85 70,166,013.49
(2) Inventories fall provision or contract performance costs impairment provision
In RMB
Item Opening Current increased Current decreased Ending balance
99
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SEMI-ANNUAL REPORT 2021
balance Reversal or
Accrual Other Other
write-off
Raw materials 1,691,320.92 500,000.00 2,191,320.92
Inventory
1,673,369.82 850,000.00 2,523,369.82
goods
Homemade
semi-finished 29,363.73 29,363.73
products
Low priced and
easily worn 110,622.38 110,622.38
articles
Total 3,504,676.85 1,350,000.00 4,854,676.85
Nil
(3) Explanation on capitalization of borrowing costs at ending balance of inventory
Nil
(4) Assets completed without settlement from construction contract at period-end
Nil
10. Contract assets
In RMB
Ending balance Opening balance
Item Book Provision for Book Provision for
Book value Book value
balance impairment balance impairment
The amount and reasons for major changes in the book value of contract assets during the current period:
In RMB
Item Change amount Reason for change
If the provision for bad debts of contract assets is made in accordance with the general model of expected credit losses, please refer to
the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
Accrual provision for impairment of contract assets in the current period
In RMB
Current
Item Current accrual Current reversal Reason
resell/Written-off
Other note:
100
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SEMI-ANNUAL REPORT 2021
11. Assets held for sale
In RMB
Ending book Provision for Ending book Estimated Estimated
Item Fair value
balance impairment value disposal cost disposal time
Other note:
12. Non-current assets due within one year
In RMB
Item Ending balance Opening balance
Important debt investment/other debt investment
In RMB
Ending balance Opening balance
Real Real
Creditor’s Rights Item Face Coupon Expiry Face Coupon Expiry
interest interest
value rate date value rate date
rate rate
Other note:
13. Other current assets
In RMB
Item Ending balance Opening balance
Reclassification of input tax to be
741,380.21 4,255,643.19
deducted
Total 741,380.21 4,255,643.19
Other explanation:
14. Debt investment
In RMB
Ending balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Important debt investment
In RMB
Ending balance Opening balance
Real Real
Creditor’s Rights Item Face Coupon Expiry Face Coupon Expiry
interest interest
value rate date value rate date
rate rate
101
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SEMI-ANNUAL REPORT 2021
Provision for impairment accrual
In RMB
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance of 1 Jan. 2021
—— —— —— ——
in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other note:
15. Other debt investment
In RMB
Accumulat
ed loss
reserves
Fair value Cumulativ
Opening Accrued Ending recognized
Item changes in Cost e fair value Note
balance interest balance in other
this period changes
comprehen
sive
income
Important other debt investment
In RMB
Ending balance Opening balance
Other Creditor’s Real Real
Face Coupon Expiry Face Coupon Expiry
Rights Item interest interest
value rate date value rate date
rate rate
Provision for impairment accrual
In RMB
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance of 1 Jan. 2021
—— —— —— ——
in the period
Change of book balance of loss provision with amount has major changes in the period
102
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SEMI-ANNUAL REPORT 2021
□ Applicable √Not applicable
Other note:
16. Long-term receivables
(1) Long-term receivables
In RMB
Ending balance Opening balance
Discount
Item Book Bad debt Book Bad debt
Book value Book value rate range
balance provision balance provision
Bad debt provision impairment
In RMB
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance of 1 Jan. 2021
—— —— —— ——
in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
(2) Long-term receivables derecognized due to the transfer of financial assets
(3) The amount of assets and liabilities formed by the transfer of long-term receivables and continued
involvement
Other note
17. Long-term equity investment
In RMB
Current changes (+, -)
Ending
Investm Cash
Openin Other balance
ent dividen Ending
g Additio compre of
Capital gain/los Other d or Impair balance
Enterpr balance nal hensive depreci
reducti s equity profit ment Other (book
ise (book investm income ation
on recogni change announ accrual value)
value) ent adjustm reserve
zed ced to
ent s
under issued
103
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SEMI-ANNUAL REPORT 2021
equity
I. Joint venture
II. Associated enterprise
Other note
18. Other equity instrument investment
In RMB
Item Ending balance Opening balance
Itemized disclosure of investment in non-trading equity instruments for the current period
In RMB
Reasons
designated as
The amount of Reason for
fair value
comprehensive transferring
Recognized measurement
Cumulative Accumulated income comprehensive
Item dividend and its changes
gain loss transferred to income to
income included in
retained retained
other
earnings income
comprehensive
income
Other note:
19. Other non-current financial assets
In RMB
Item Ending balance Opening balance
Other note:
20. Investment real estate
(1) Investment real estate measured at cost
√ Applicable □ Not applicable
In RMB
Construction in
Item House and building Land use right Total
process
I. Original book value
1. Opening balance 133,661,686.94 133,661,686.94
2. Current increased
(1) Outsourcing
104
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SEMI-ANNUAL REPORT 2021
(2) Inventory\fixed
assets\construction in
process transfer-in
(3) Increased by
combination
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Ending balance 133,661,686.94 133,661,686.94
II. Accumulated
depreciation and
accumulated
amortization
1. Opening balance 86,437,024.67 86,437,024.67
2. Current increased 864,165.14 864,165.14
(1) Accrual or
864,165.14 864,165.14
amortization
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Ending balance 87,301,189.81 87,301,189.81
III. Impairment
provision
1. Opening balance
2. Current increased
(1) Accrual
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Ending balance
105
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SEMI-ANNUAL REPORT 2021
IV. Book value
1. Ending book value 46,360,497.13 46,360,497.13
2. Opening book value 47,224,662.27 47,224,662.27
(2) Investment real estate measured by fair value
□ Applicable √Not applicable
(3) Investment real estate without property certification held
In RMB
Reason without property certification
Item Book value
held
Other note
Nil
21. Fixed assets
In RMB
Item Ending balance Opening balance
Fixed assets 98,619,554.39 100,747,972.84
Disposal of fixed assets 92,857,471.69 92,857,471.69
Total 191,477,026.08 193,605,444.53
(1) Fixed asset
In RMB
Means of
House Machinery Office Instrument Tool Mold
Item transportati Total
building equipment equipment equipment equipment equipment
on
I. Original
book value
1. Opening 73,200,617 95,162,467 3,589,808. 7,286,291. 3,231,378. 9,160,548. 24,950,960 216,582,07
balance .41 .54 82 60 03 05 .45 1.90
2. Current 11,482,624 1,310,026. 1,896,734. 15,115,702
132,653.66 144,179.07 149,485.44
increased .28 38 15 .98
(1) 11,482,624 1,310,026. 1,896,734. 15,115,702
132,653.66 144,179.07 149,485.44
Purchasing .28 38 15 .98
(2)
Constructio
106
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SEMI-ANNUAL REPORT 2021
n in
process
transfer-in
(3)
Increased
by
combinatio
n
3. Current 10,836,574 11,868,963
122,034.19 53,535.27 37,852.46 818,967.34
decreased .68 .94
(1)
Disposal or
scrapping
Transfer to
10,836,574 11,868,963
Zhengzhou 122,034.19 53,535.27 37,852.46 818,967.34
.68 .94
branch
4. Ending 73,200,617 94,906,526 3,600,428. 7,376,935. 3,343,011. 9,651,607. 26,847,694 218,926,82
balance .41 .35 29 40 01 09 .60 0.15
II.
Accumulati
ve
depreciatio
n
1. Opening 20,835,498 62,315,100 2,530,234. 6,270,774. 2,684,698. 4,790,714. 16,407,078 115,834,09
balance .92 .16 21 21 25 70 .61 9.06
2. Current 3,955,263. 1,894,766. 7,824,460.
952,782.69 96,067.63 78,981.69 78,665.44 767,933.59
increased 27 49 80
3,955,263. 1,894,766. 7,824,460.
(1) Accrual 952,782.69 96,067.63 78,981.69 78,665.44 767,933.59
27 49 80
3. Current 2,194,672. 2,449,303.
44,847.64 29,287.01 9,781.57 170,714.49
decreased 60 31
(1)
Disposal or
scrapping
Transfer to
2,194,672. 2,449,303.
Zhengzhou 44,847.64 29,287.01 9,781.57 170,714.49
60 31
branch
4. Ending 21,788,281 64,075,690 2,581,454. 6,320,468. 2,753,582. 5,387,933. 18,301,845 121,209,25
107
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balance .61 .83 20 89 12 80 .10 6.55
III.
Depreciatio
n reserves
1. Opening
balance
2. Current
increased
(1) Accrual
3. Current
decreased
(1)
Disposal or
scrapping
4. Ending
balance
IV. Book
value
1. Ending 51,412,335 31,732,826 1,018,974. 1,056,466. 4,263,673. 8,545,849. 98,619,554
589,428.89
book value .80 .31 09 51 29 50 .39
2. Opening 52,365,118 32,847,367 1,059,574. 1,015,517. 4,369,833. 8,543,881. 100,747,97
546,679.78
book value .49 .38 61 39 35 84 2.84
(2) Temporarily idle fixed assets
In RMB
Original book Accumulated Provision for
Item Book value Note
value depreciation impairment
House building
(3) Fixed assets leasing-out by operational lease
In RMB
Item Ending book value
House building
108
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(4) Fixed assets without property certification held
In RMB
Reason without property certification
Item Book value
held
Other note
(5) Disposal of fixed assets
In RMB
Item Ending balance Opening balance
Renovation of Gongming Huafa Electric
92,857,471.69 92,857,471.69
Town
Total 92,857,471.69 92,857,471.69
Other explanation
22. Construction in process
In RMB
Item Ending balance Opening balance
Construction in process 740,000.00 740,000.00
Total 740,000.00 740,000.00
(1) Construction in process
In RMB
Ending balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Huafa Building
Reconstruction 240,000.00 240,000.00 240,000.00 240,000.00
Project
Gongming
Electronic City
500,000.00 500,000.00 500,000.00 500,000.00
Reconstruction
Project
Total 740,000.00 740,000.00 740,000.00 740,000.00
109
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(2) Changes of major projects under construction
In RMB
includi
Accum
Propor ng: Interes
Fixed ulated
Other tion of interes t
Openi Curren assets amoun
decrea Ending project t capital
ng t transfe Progre t of Sourceof
Item Budget sed in balanc invest capital ization
balanc increas r-in in ss interes funds
the e ment ized rate of
e ed the t
Period in amoun the
Period capital
budget t of the year
ization
year
(3) The provision for impairment of construction projects
In RMB
Item Current accrual amount Accrual reason
Other note
(4) Engineering materials
In RMB
Ending balance Opening balance
Item Provision for Book Provision for
Book balance Book value Book value
impairment balance impairment
Other note:
23. Productive biological assets
(1) Productive biological assets measured by cost
□ Applicable √Not applicable
(2) Productive biological assets measured by fair value
□ Applicable √Not applicable
24. Oil and gas assets
□ Applicable √Not applicable
110
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
25. Right to use assets
In RMB
Item Total
Other note:
26. Intangible assets
(1) Intangible assets
In RMB
Non-patented Computer
Item Land use right Patent right Total
technology software
I. Original book
value
1. Opening
55,415,814.36 3,113,396.41 58,529,210.77
balance
2. Current
increased
(1) Purchasing
(2) Internal R&D
(3) Increased by
combination
3. Current
decreased
(1) Disposal
4. Ending balance
II. Accumulated
amortization
1. Opening
16,651,035.42 948,089.65 17,599,125.07
balance
2. Current
increased
(1) Accrual 662,350.40 150,518.73
3. Current
111
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SEMI-ANNUAL REPORT 2021
decreased
(1) Disposal
4. Ending balance 17,313,385.82 1,098,608.38 18,413,988.90
III. Depreciation
reserves
1. Opening
109,427.90 109,427.90
balance
2. Current
increased
(1) Accrual 62,388.75 62,388.75
3. Current
decreased
(1) Disposal
4. Ending balance 171,816.65 171,816.65
IV. Book value
1. Ending book
38,102,428.54 1,842,971.38 39,945,399.92
value
2. Opening book
38,764,778.94 2,055,878.86 40,820,657.80
value
The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end 0.00%
(2) The situation of land use rights that have not completed the ownership certificate
In RMB
Reason without property certification
Item Book value
held
Other note:
27. Development expenditure
In RMB
Increase in the current period Decrease in the current period
Opening Internal Ending
Item Recognize Transferred
developme
balance Other d as into current balance
nt
intangible profit and
expenditur
112
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
e assets loss
Total
Other note
28. Goodwill
(1) Goodwill original book value
In RMB
Invested name Increase in the current period Decrease in the current period
or matters Opening Formed by
Ending balance
forming balance business Dispose
goodwill combination
Total
(2) Goodwill provision for impairment
In RMB
Invested name Increase in the current period Decrease in the current period
or matters Opening
Ending balance
forming balance Accrual Dispose
goodwill
Total
Information about the asset group or combination of asset groups where the goodwill is located
Explain the process of goodwill impairment testing, key parameters (such as the growth rate of the forecast period when the present
value of future cash flows are expected, the growth rate of the stable period, the profit rate, the discount rate, the forecast period, etc.)
and the confirmation method of the impairment loss of goodwill:
The impact of goodwill impairment testing
Other note
29. Long-term deferred expenses
In RMB
Amortized in
Item Opening balance Current increased Other decreased Ending balance
Period
Amortization of
77,445.31 660,284.00 114,127.72 623,601.59
cloud service fees
113
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Total 77,445.31 660,284.00 114,127.72 623,601.59
Other explanation
New contract renewal this year
30. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets without offset
In RMB
Ending balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Provision for assets
28,458,252.74 6,761,085.38 28,458,252.74 6,761,085.38
impairment
Accrual liability 64,411.00 16,102.75 64,411.00 16,102.75
Deferred income 4,043,640.00 606,546.00 4,043,640.00 606,546.00
Total 32,566,303.74 7,383,734.13 32,566,303.74 7,383,734.13
(2) Deferred income tax liabilities that are not offset
In RMB
Ending balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
(3) Amount of deferred income tax asset and deferred income tax liability after trade-off
In RMB
Ending balance of Trade-off between the Opening balance of
Trade-off between the
deferred income tax deferred income tax deferred income tax
Item deferred income tax
assets or liabilities assets and liabilities at assets or liabilities
assets and liabilities
after off-set period-begin after off-set
Deferred income tax
7,383,734.13 7,383,734.13
assets
(4) Deferred income tax asset without recognized
In RMB
Item Ending balance Opening balance
Deductible temporary differences 3,163,837.81 3,163,837.81
114
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SEMI-ANNUAL REPORT 2021
Deductible loss 4,098,904.69 4,098,904.69
Total 7,262,742.50 7,262,742.50
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB
Year Ending amount Opening amount Note
2021
2022 742,401.79 742,401.79
2023 404,207.57 404,207.57
2024 1,318,067.59 1,318,067.59
2025 1,634,227.74 1,634,227.74
Total 4,098,904.69 4,098,904.69 --
Other explanation:
31. Other non-current assets
In RMB
Ending balance Opening balance
Item Book Impairment Book Impairment
Book value Book value
balance provision balance provision
Advance payment for equipment 66,000.00 66,000.00 66,000.00 66,000.00
Total 66,000.00 66,000.00 66,000.00 66,000.00
Other explanation:
32. Short-term borrowings
(1) Category
In RMB
Item Ending balance Opening balance
Loan in pledge 51,089,579.00 12,527,808.00
Total 51,089,579.00 12,527,808.00
Explanation on category of short-term loans:
(2) Short-term loans that have been overdue and have not been repaid
The total amount of short-term loans that were overdue and not repaid at the end of the period was RMB 0.00, and the important
short-term loans that were overdue and not repaid are as follows:
115
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SEMI-ANNUAL REPORT 2021
In RMB
Borrower Ending balance Borrowing rate Overdue time Overdue interest rate
Other note:
33. Trading financial liabilities
In RMB
Item Ending balance Opening balance
Including:
Including:
Other note:
34. Derivative financial liabilities
In RMB
Item Ending balance Opening balance
Other note:
35. Notes payable
In RMB
Category Ending balance Opening balance
Bank acceptance draft 42,983,519.37 37,416,381.20
Total 42,983,519.37 37,416,381.20
Totally 0 Yuan due note payable are paid at period-end
36. Account payable
(1) Account payable
In RMB
Item Ending balance Opening balance
Within one year 112,291,685.77 85,862,573.31
Over one year 3,764,952.80 12,455,666.57
Total 116,056,638.57 98,318,239.88
(2) Major account payable over one year
In RMB
Item Ending balance Reasons for non-payment or carry over
116
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Guangdong Yizumi Precision Injection
1,020,000.00 Without settlement
Technology Co., Ltd.
Guangdong Jinhu Rili Polymer Material
1,140,800.00 Without settlement
Co., Ltd.
Kunshan Zhongji Mould Co., Ltd. 379,068.97 Without settlement
Wuhan Jufutai Technology Co., Ltd. 486,188.78 Without settlement
Total 3,026,057.75 --
Other explanation:
37. Accounts received in advance
(1) Accounts received in advance
In RMB
Item Ending balance Opening balance
(2) Important accounts received in advance with account age over one year
In RMB
Item Ending balance Reasons for outstanding or carry-over
Other note:
38. Contract liabilities
In RMB
Item Ending balance Opening balance
Sales received in advance 79,195.32 79,195.32
Lease received in advance 686,360.65 207,945.34
Total 765,555.97 287,140.66
Amount and reasons for significant changes in book value during the reporting period
In RMB
Item Change Amount Reason for change
39. Wage payable
(1) Wage payable
In RMB
Increase during the Decrease during the
Item Opening balance Ending balance
period period
117
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I. Short-term benefits 5,704,816.53 31,508,630.69 33,359,279.99 3,854,167.23
II. Post-employment
benefits-defined 32,550.06 2,773,868.82 2,773,868.82 32,550.06
contribution plans
III. Dismiss welfare 434,715.43 434,715.43
Total 5,737,366.59 34,717,214.94 36,567,864.24 3,886,717.29
(2) Short-term benefits
In RMB
Increase during the Decrease during the
Item Opening balance Ending balance
period period
1. Wages,bonuses,
4,709,654.92 26,915,030.12 28,779,016.40 2,845,668.64
allowancesand subsidies
2. Employee benefits 754.00 2,531,354.04 2,518,017.06 14,090.98
3. Social insurance
37,267.03 2,018,031.09 2,018,031.09 37,267.03
premium
Including:
35,408.95 1,328,799.44 1,328,799.44 35,408.95
Medical insurance
Work
768.30 74,744.97 74,744.97 768.30
injury insurance
Maternity
1,089.78 116,269.95 116,269.95 1,089.78
insurance
4. Housing
24,310.00 44,215.44 44,215.44 24,310.00
accumulation fund
5. Labor union
expenditure and
932,830.58 932,830.58
personnel education
expense
Total 5,704,816.53 31,508,630.69 33,359,279.99 3,854,167.23
(3) Defined contribution plans
In RMB
Increase during the Decrease during the
Item Opening balance Ending balance
period period
1. Basic endowment
31,361.59 2,657,598.87 2,657,598.87 31,361.59
insurance
2. Unemployment 1,188.47 116,269.95 116,269.95 1,188.47
118
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SEMI-ANNUAL REPORT 2021
insurance
Total 32,550.06 2,773,868.82 2,773,868.82 32,550.06
Other explanation:
40. Taxes payable
In RMB
Item Ending balance Opening balance
VAT 4,823,733.87 2,980,992.11
Corporate income tax 5,551,836.24 6,558,810.68
Individual income tax 4,493.98 25,195.14
Urban maintenance and construction tax 532,508.80 1,902,436.52
Property tax 520,220.76 318,618.51
Land use tax 297,696.51 33,280.48
Educational surtax 229,248.99 816,098.15
Local educational surtax 122,702.85 418,611.03
Dike fee 1,665.00 1,665.00
Stamp tax 33,429.90 28,895.00
Disposal fund of waste electrical
821,530.00 1,120,040.00
products
Total 12,939,066.90 14,204,642.62
Other explanation:
41. Other accounts payable
In RMB
Item Ending balance Opening balance
Interest payable 179,523.72 26,335.66
Other payable 36,894,932.73 27,581,945.35
Total 37,074,456.45 27,608,281.01
(1) Interest payable
In RMB
Item Ending balance Opening balance
Interest of short-term loans payable 179,523.72 26,335.66
Total 179,523.72 26,335.66
Significant overdue and unpaid interest:
119
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SEMI-ANNUAL REPORT 2021
In RMB
Loan unit Overdue amount Reason for overdue
Other explanation:
Nil
(2) Dividend payable
In RMB
Item Ending balance Opening balance
Other note, including important dividends payable that have not been paid for more than 1 year, should disclose the reasons for the
non-payment:
Nil
(3) Other accounts payable
1) Other account payable by nature
In RMB
Item Ending balance Opening balance
Margin & deposit 14,026,279.22 11,523,316.67
Lease management fee 3,227,985.19
Intercourse funds 20,346,239.47 5,546,586.51
After sale and repairment 1,027,879.01 1,454,341.68
Energy consumption 1,443,603.28
Shipping 1,494,535.03 902,242.26
Reserve fund 1,346,345.00
Other 2,137,524.76
Total 36,894,932.73 27,581,945.35
2) Significant other account payable with over one year age
In RMB
Item Ending balance Reasons for non-payment or carry over
Shenzhen SED Property Development
1,853,393.35 Without settlement
Co., Ltd.
Shenzhen Huayongxing Environmental
1,000,000.00 Electricity fee deposit
Protection Technology Co., Ltd.
Linghang Technology (Shenzhen) Co.,
656,345.28 Without settlement
Ltd
120
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Shenzhen Tongxing Electronics Co., Ltd. 578,259.83 Without settlement
Total 4,087,998.46 --
Other explanation
Nil
42. Liabilities held for sale
In RMB
Item Ending balance Opening balance
Other note:
43. Non-current liabilities due within one year
In RMB
Item Ending balance Opening balance
Long-term loans due within one year 12,000,000.00
Total 12,000,000.00
Other explanation:
Nil
44. Other current liabilities
In RMB
Item Ending balance Opening balance
Unterminated confirmation on note
211,799.13 18,309,336.77
receivable
Pending sales tax 13,636.04
Total 211,799.13 18,322,972.81
Changes in short-term bonds payable:
In RMB
Premiu
Repay
Interest m and
Bond Issue Openin ment in
Name Face Issue Current accrued discoun Ending
maturit Amoun g the
of bond value date issue at face t balance
y t balance current
value amortiz
period
ation
Other explanation:
Nil
121
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SEMI-ANNUAL REPORT 2021
45. Long-term loans
(1) Category
In RMB
Item Ending balance Opening balance
Mortgage loan 61,000,000.00 61,000,000.00
Total 61,000,000.00 61,000,000.00
Description of Long-term loans classification:
Other explanation, including interest rate range:
46. Bonds payable
(1) Bonds payable
In RMB
Item Ending balance Opening balance
(2) Changes in increase or decrease in bonds payable (excluding preferred stocks, perpetual bonds and
other financial instruments classified as financial liabilities)
In RMB
Premiu
Repay
Interest m and
Bond Issue Openin ment in
Name Face Issue Current accrued discoun Closing
maturit Amoun g the
of bond value date issue at face t balance
y t balance current
value amortiz
period
ation
Total -- -- --
(3) Description of the conditions and time for the conversion of convertible corporate bonds
(4) Description of other financial instruments classified as financial liabilities
Basic situation of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
In RMB
Financial Increase in the current Decrease in the current
Beginning of period Ending of period
instruments period period
issued Amount Book value Amount Book value Amount Book value Amount Book value
122
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Explanation of the basis for the classification of other financial instruments into financial liabilities
Other note
47. Lease liabilities
In RMB
Item Ending balance Opening balance
Other note
48. Long-term payables
In RMB
Item Ending balance Opening balance
(1) List long-term payables according to the nature of the payment
In RMB
Item Ending balance Opening balance
Other note:
(2) Special accounts payable
In RMB
Increase in the Decrease in the Cause of
Item Opening balance Ending balance
current period current period formation
Other note:
49. Long-term Wages payable
(1) Long-term Wages payable
In RMB
Item Ending balance Opening balance
(2) Changes in defined benefit plans
Present value of defined benefit plan obligations:
In RMB
Item The Period Last Period
Plan assets:
In RMB
123
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Item The Period Last Period
Defined benefit plan net liabilities (net assets)
In RMB
Item The Period Last Period
Description of the content of the defined benefit plan and related risks, the impact on the company's future cash flow, time and
uncertainty:
Explanation of major actuarial assumptions and sensitivity analysis results of defined benefit plans:
Other note:
50. Accrual liability
In RMB
Item Ending balance Opening balance Causes
Pending action 64,411.00 64,411.00
Total 64,411.00 64,411.00 --
Other explanations, including important assumptions and estimation about important estimated liabilities:
51. Deferred income
In RMB
Increase during Decrease during
Item Opening balance Ending balance Causes
the period the period
Industrial
transformation 4,043,640.00 4,043,640.00
subsidy
Total 4,043,640.00 4,043,640.00
Items involving Government subsidy:
In RMB
Amount
Amount Amount of
New reckoned
included cost and
subsidy in Assets-rel
Opening in other expense Other Ending
Liability increased non-operat ated/Inco
balance income in offset in change balance
in the ing me-related
the current the current
period income in
period period
the period
The
transforma
Assets-rel
tion and 1,600,000.00 1,600,000.00
ated
upgrading
of
124
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SEMI-ANNUAL REPORT 2021
provincial
traditional
industries
in 2018
Intelligent
transforma Assets-rel
472,640.00 472,640.00
tion in ated
2019
Industrial
transforma
Assets-rel
tion and 1,971,000.00 1,971,000.00
ated
intelligenc
e in 2020
Total 4,043,640.00 4,043,640.00
Other explanation:
52. Other non-current liabilities
In RMB
Item Ending balance Opening balance
Other note:
53. Share capital
In RMB
Changes in the Period (+,-)
Shares
Opening Ending
Issuing new transfer from
balance Bonus shares Other Subtotal balance
shares public
reserves
283,161,227. 283,161,227.
Total shares
00 00
Other explanation:
125
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SEMI-ANNUAL REPORT 2021
54. Other equity instruments
(1) Basic information of other financial instruments such as preferred stocks and perpetual bonds issued at
the end of the period
(2) Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the
period
In RMB
Financial Increase in the current Decrease in the current
Beginning of period Ending of period
instruments period period
issued Amount Book value Amount Book value Amount Book value Amount Book value
Other equity instruments' changes in the current period, explanations of the reasons for the changes, and the basis for related
accounting treatments:
Other note:
55. Capital public reserve
In RMB
Increase during the Decrease during the
Item Opening balance Ending balance
period period
Capital premium
96,501,903.02 96,501,903.02
(equity premium)
Other capital public
50,075,868.48 50,075,868.48
reserve
Total 146,577,771.50 146,577,771.50
Other explanation, including changes and reasons of changes:
56. Treasury stocks
In RMB
Increase in the current Decrease in the current
Item Opening balance Ending balance
period period
Other note, including changes in the current period and explanations of the reasons for the changes:
57. Other comprehensive income
In RMB
The Period Endin
Opening
Item Account Less: Less: Less: Belong to Belong to g
balance
before written in written income parent minority balanc
126
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SEMI-ANNUAL REPORT 2021
income other in other tax company sharehold e
tax in the comprehen compreh expense after tax ers after
year sive ensive tax
income in income
previous in
period and previous
carried period
forward to and
gains and carried
losses in forward
current to
period retained
earnings
in
current
period
Other explanation, including the adjustment on initial recognition for arbitrage items that transfer from the effective part of cash flow
hedge profit/loss:
58. Reasonable reserve
In RMB
Increase in the current Decrease in the current
Item Opening balance Ending balance
period period
Other explanation, including changes and reasons for changes:
59. Surplus public reserve
In RMB
Increase during the Decrease during the
Item Opening balance Ending balance
period period
Statutory surplus
21,322,617.25 21,322,617.25
reserves
Discretionary surplus
56,068,976.00 56,068,976.00
reserve
Total 77,391,593.25 77,391,593.25
Other explanation, including changes and reasons for changes:
Nil
60. Retained profit
In RMB
127
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Item Current period Last period
Retained profit at the end of the previous period
-170,881,854.46 -177,712,041.86
before adjustment
Retained profit at period-begin after adjustment -170,881,854.46 -177,712,041.86
Add: net profit attributable to owners of the
7,023,114.72 3,165,597.55
parent company
Retained profit at period-end -163,858,739.74 -174,546,444.31
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained
profits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
61. Operating revenue and cost
In RMB
Current Period Last Period
Item
Revenue Cost Revenue Cost
Main business 323,468,602.68 282,596,348.19 268,465,953.89 249,723,766.92
Other business 68,165,205.87 47,447,861.39 32,237,467.49 14,235,885.71
Total 391,633,808.55 330,044,209.58 300,703,421.38 263,959,652.63
Information relating to revenue:
In RMB
Category Branch 1 Branch 2 Total
Including:
Including:
Including:
Including:
Including:
Including:
Including:
Information relating to performance obligations:
Nil
Information related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations that have been signed at the end of this reporting period but
128
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
have not yet been fulfilled or have not done with fulfillment is 0.00 yuan, among them, yuan of revenue is expected to be recognized
in YEAR, yuan of revenue is expected to be recognized in YEAR, and yuan of revenue is expected to be recognized in YEAR.
Other explanation
Nil
62. Tax and surcharges
In RMB
Item Current Period Last Period
Urban maintenance and construction tax 53,181.85 61,315.21
Educational surtax 23,402.05 27,476.42
Property tax 671,892.72 463,763.85
Land use tax 380,897.71 247,776.03
Stamp tax 283,562.58 187,803.80
15,425.01 15,920.74
Total 1,428,361.92 1,004,056.05
Other explanation:
63. Sales expense
In RMB
Item Current Period Last Period
Employee compensation 1,940,607.71 1,544,285.76
Freight 4,858,694.34 3,120,326.41
Commodity inspection fee 894,098.13 512,749.42
Customs fee 204,766.55 30,322.36
Commodity loss 3,005,591.44 2,042,886.52
Other 3,190,859.79 1,849,508.92
Total 14,094,617.96 9,100,079.39
Other explanation:
Other is the after-sales service fee, low value and easy consumption, office expenses, etc.
64. Administrative expense
In RMB
Item The Period Last Period
Salary 6,033,625.10 4,290,516.96
Depreciation 1,259,331.29 1,094,911.50
129
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Social security fee 1,182,922.32 307,654.93
Communication fee 1,829,623.45 2,149,616.64
Employee benefits 1,205,669.37 975,973.80
Travel expenses 705,255.91 997,820.46
Amortization of intangible assets 863,491.01 911,802.71
Transportation expenses 220,781.91 728,044.47
Consultation fee 1,448,658.63 154,420.23
Security costs 460,539.40 826,723.53
Repair cost 3,428,358.44 1,186,397.36
Audit fees 714,487.27 703,883.50
Office expenses 1,075,155.32 534,213.91
Communication fee 61,127.20 66,922.51
Amortization of low-value consumables 6,196.30 204,519.80
Securities Information Disclosure Fee 46,361.00 247,008.75
Employee education expenses 12,689.53 123,799.49
Utility bill 284,729.15 194,204.27
Rental fees 521,230.00 496,532.52
Environmental protection fee 47,617.53 202,101.81
Other fees 1,272,457.11 685,293.51
Total 22,680,307.24 17,082,362.66
Other explanation:
65. R& D expenses
In RMB
Item Current Period Last Period
Personnel labor costs 3,424,760.68 1,801,065.20
Depreciation and amortization expense 437,009.74 499,584.18
Other related expenses 93,877.08 122,775.88
Total 3,955,647.50 2,423,425.26
Other explanation:
66. Financial expense
In RMB
Item Current Period Last Period
130
SHENZHEN ZHONGHEN HUAFA CO., LTD.
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Interest costs 3,731,443.17 4,755,143.83
Less: Interest income 203,041.26 529,170.31
Exchange loss 4,068,036.84 800,845.19
Less: exchange gains 2,461,568.22
Handing expense 105,672.13 59,100.48
Other 1,160.00
Total 5,241,702.86 3,484,228.81
Other explanation:
Inquiry letter courier fee
67. Other income
In RMB
Sources Current Period Last Period
Three-agency handling fee 3,553.35
Industrial Transformation Item 348,540.00
Total 3,553.35 348,540.00
68. Investment income
In RMB
Item Current Period Last Period
Financial income 149,767.58 66,780.40
Total 149,767.58 66,780.40
Other explanation:
69. Net exposure hedging income
In RMB
Item The Period Last Period
Other note:
70, Fair value change income
In RMB
Sources of income from changes in Fair
The Period Last Period
value
Other note:
131
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71. Credit impairment loss
In RMB
Item Current Period Last Period
Other explanation:
72. Losses on assets impairment
In RMB
Item Current Period Last Period
II. Inventory falling price loss and
impairment loss of contract performance -1,350,000.00
cost
Total -1,350,000.00
Other explanation:
73. Asset disposal income
In RMB
Source of asset disposal income Current Period Last Period
Dispose income of fixed assets 0.00 -99,867.53
Total 0.00 -99,867.53
74. Non-operating income
In RMB
Amount included in current
Item Current Period Last Period
non-recurring profits or losses
Government subsidy 256,000.00
Disposal of assets 2,786.47 2,786.47
Fine 1,400.00 1,976.00 1,400.00
Other 16,412.57 43,224.00 16,412.57
Total 276,599.04 45,200.06 20,599.04
Government subsidy reckoned into current gains/losses:
In RMB
Subsidy
The special Assets-rela
Issuing Offering impact Amount in Amount in
Item Nature subsidy ted/Income
subject causes current the Period last period
(Y/N) -related
gains/losse
132
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s (Y/N)
Subsidies
received
for
research
and
developme Income-rel
C Award N N 256,000.00
nt, ated
technologic
al renewal
and
transformat
ion, etc.
Other explanation:
75. Non-operating expenditure
In RMB
Amount included in current
Item Current Period Last Period
non-recurring profits or losses
Dealing with fixed assets 22,804.31 22,804.31
Fine expenditure 191,386.99 7,302.38 191,386.99
Total 215,202.92 7,302.38 215,202.92
Other explanation:
Nil
76. Income tax expense
(1) Statement of income tax expense
In RMB
Item Current Period Last Period
Current income tax expense 1,590,676.66 982,790.94
Deferred income tax expense -145,421.36
Total 1,590,676.66 837,369.58
(2) Adjustment on accounting profit and income tax expenses
In RMB
Item Current Period
133
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Total profit 8,613,791.38
Income tax based on statutory/applicable rate 2,490,947.85
Impact by different tax rate applied by subsidies 230,760.37
Impact of deductible loss of un-recognized deferred income
-145,421.36
tax assets in the prior period of use
Income tax expense 1,590,676.66
Other explanation
Nil
77. Other comprehensive income
See note
78. Annotation of cash flow statement
(1) Cash received with other operating activities concerned
In RMB
Item The Period Last Period
Unit intercourse account 15,891,476.38 423,061.34
Collection management fee and utilities
870,339.55
etc.
Repayment from employees 81,510.67 538.70
Margin 3,420.00 178,441.66
Interest income 30,133.34 80,873.96
Government subsidy 259,553.35 2,190,000.00
Total 16,266,093.74 3,743,255.21
Note of cash received with other operating activities concerned:
Nil
(2) Cash paid with other operating activities concerned
In RMB
Item The Period Last Period
Unit intercourse account 19,499,576.94 12,099,293.44
Employee loan 47,686.67 1,518,843.50
Deposit and security deposit 1,804,581.00 777,760.00
Communication fee 165,926.34 2,225,069.64
134
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Utility bill 4,662,103.00 195,404.27
Travel expenses 1,168,068.54 631,364.12
Shipping fee 2,706,778.65 2,885,107.75
Transportation expenses 708,540.18
Repair cost 1,369,952.77 1,186,397.36
Consultation fee 1,400,000.00 700,000.00
Security fee 363,200.00
Financial institution fee 54,316.41
Office expenses 19,086.70 184,663.65
Communication fee 437,439.91 66,922.51
Rental fees 496,532.52
Other 18,919,703.62 2,183,661.37
Total 52,200,904.14 26,277,076.72
Note of cash paid with other operating activities concerned:
(3) Cash received with other investment activities concerned
In RMB
Item Current Period Last Period
Redemption of principal of financial
35,000,000.00
products
Total 35,000,000.00
Note of cash received with other investment activities concerned:
(4) Cash paid related with investment activities
In RMB
Item Current Period Last Period
Purchasing financial products 35,000,000.00
Total 35,000,000.00
Note of cash paid related with investment activities:
(5) Other cash received related to financing activities
In RMB
Item The Period Last Period
Description of other received cash related to financing activities:
135
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(6) Cash paid related with financing activities
In RMB
Item Current Period Last Period
Note of cash paid related with financing activities:
79. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
Supplementary information This Period Last Period
1. Net profit adjusted to cash flow of
-- --
operation activities:
Net profit 7,023,114.72 3,165,597.55
Add: Assets impairment provision
Depreciation of fixed assets,
consumption of oil assets and depreciation 5,855,066.65 6,364,464.64
of productive biology assets
Depreciation of right-of-use
assets
Amortization of intangible assets 875,257.88 911,802.71
Amortization of long-term deferred
114,127.72 116,167.92
expenses
Loss from disposal of fixed assets,
intangible assets and other long-term -156,701.09
assets (gain is listed with “-”)
Losses on scrapping of fixed assets
(gain is listed with “-”)
Gain/loss of fair value changes
(gain is listed with “-”)
Financial expenses (gain is listed
5,241,702.86 3,786,650.62
with “-”)
Investment loss (gain is listed
-149,767.58 -66,780.40
with “-”)
Decrease of deferred income tax
-145,421.36
asset ((increase is listed with “-”)
Increase of deferred income tax
liability (decrease is listed with “-”)
136
SHENZHEN ZHONGHEN HUAFA CO., LTD.
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Decrease of inventory (increase is
-61,101,647.02 -3,086,479.34
listed with “-”)
Decrease of operating receivable
97,224,785.91 -15,138,062.21
accounts (increase is listed with “-”)
Increase of operating payable
-76,901,010.73 25,448,973.20
accounts (decrease is listed with “-”)
Other
Net cash flows arising from
-21,818,369.59 21,200,212.24
operating activities
2. Material investment and financing not
-- --
involved in cash flow
Conversion of debt into capital
Switching Company bonds due
within one year
Financing lease of fixed assets
3. Net change of cash and cash
-- --
equivalents:
Balance of cash at period end 59,612,186.22 21,812,967.80
Less: Balance of cash equivalent at
60,968,053.58 36,645,061.61
year-begin
Add: Balance at year-end of cash
equivalents
Less: Balance at year-begin of cash
equivalents
Net increase of cash and cash
-1,355,867.36 -14,832,093.81
equivalents
(2) Net cash payment for the acquisition of a subsidiary in the period
In RMB
Amount
Including: --
Including: --
Including: --
Other note:
(3) Net cash received from the disposal of subsidiaries
In RMB
137
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SEMI-ANNUAL REPORT 2021
Amount
Including: --
Including: --
Including: --
Other note:
(4) Constitution of cash and cash equivalent
In RMB
Item Ending balance Opening balance
I. Cash 59,612,186.22 60,968,053.58
Including: Cash on hand 903.40 136,673.02
Bank deposit available for payment
16,620,293.80 29,912,316.31
at any time
Other currency funds available for
42,990,989.02
payment at any time
III. Balance of cash and cash equivalent at
59,612,186.22 60,968,053.58
period-end
Other explanation:
80. Note of the changes of owners’ equity
Explain the items and amount at period-end adjusted for “Other” at end of the last year:
Nil
81. Assets with ownership or use right restricted
In RMB
Item Ending book value Limited reason
Money funds 42,990,989.02 Margin
Fixed assets 12,375,571.51 Collateral for borrowing
Intangible assets 6,752,967.68 Collateral for borrowing
Fixed assets liquidation 92,857,471.69 Court seizure
Investment real estate 11,503,400.02 Collateral for borrowing
Accounts receivable financing 0.00 Bill pledge
Total 166,480,399.92 --
Other explanation:
138
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
82. Item of foreign currency
(1) Item of foreign currency
In RMB
Ending balance of foreign Ending RMB balance
Item Rate of conversion
currency converted
Monetary funds -- --
Including: USD 1,346,535.80 6.4705 8,810,879.28
Euro
HKD
Account receivable -- --
Including: USD 5,192,627.92 6.4705 604,526.76
Euro
HKD
Long-term loans -- --
Including: USD
Euro
HKD
Other explanation:
(2) Explanation on foreign operational entity, including as for the major foreign operational entity,
disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping
currency changed, explain reasons
□ Applicable √Not applicable
83. Hedging
According to the hedge classification, disclose the qualitative and quantitative information of hedging items, related hedging tools,
and hedged risks:
84. Government subsidy
(1) Government subsidy
In RMB
139
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Amount reckoned into current
Category Amount Item for presentation
gains/losses
(2) Government grants rebate
□ Applicable √Not applicable
Other explanation:
85. Other
Nil
VIII. Changes of consolidation scope
1. Enterprise combine not under the same control
(1) Enterprise combination under the same control in Period
In RMB
Net profit
Income of
Standard to of
Acquired purchaser
Time point Cost of Ratio of determine purchaser
way Equity Purchasing from
Purchaser for equity equity equity the from
obtained date purchasing
obtained obtained obtained purchasing purchasing
way date to
date date to
period-end
period-end
Other note:
(2) Combination cost and goodwill
In RMB
Combination cost
The method of determining the fair value of the merger cost, contingent consideration and there changes:
The main reasons for the formation of large amounts of goodwill:
Other explanation:
(3) Identifiable assets and liability on purchasing date under the purchaser
In RMB
Fair value on purchasing date Book value on purchasing date
Method for determining the fair value of identifiable assets and liabilities:
140
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SEMI-ANNUAL REPORT 2021
The contingent liabilities of the acquiree assumed in the business combination:
Other explanation:
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date
Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights in
the Period or not
□ Yes √ No
(5) Notes relating to the purchase date or the end of the period in which the merger consideration or the
fair value of the purchasee’s identifiable assets and liabilities cannot be reasonable determined
(6) Other explanations
2. Enterprise combine under the same control
(1) Enterprise combination under the same control in Period
In RMB
Combined Percentage Constitute Combining Basis for Income of Net profit Income of Net profit
party of equity the basis date determinin the of the the of the
acquired in for the g the date combined combined combined combined
enterprise enterprise of party from party from party party
combinatio combinatio combinatio the the during the during the
n n under the n beginning beginning comparison comparison
same of the of the period period
control period of period of
combinatio combinatio
n to the n to the
date of date of
combinatio combinatio
n n
Other note:
(2) Consolidation cost
In RMB
Consolidation cost
Contingent explanation of the consideration and its changes:
Other note:
(3) Book value of the assets/liabilities from combined party at date of combination
In RMB
141
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
Combination date At the end of the previous period
Contingent liabilities of the combined party assumed in the enterprise combination:
Other note:
3. Reverse purchase
Basic information of the transaction, the basis for the reverse purchase of the transaction, whether the assets and liabilities retained by
the listed company constitute a business and its basis, the determination of the merger cost, the amount of equity adjusted in
accordance with the equity transaction and its calculation:
4. Disposal of subsidiaries
Whether there is a single disposal of an investment in a subsidiary that resulted in a loss of control
□ Yes √ No
Whether there is a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during the
period
□ Yes √ No
5. Other reasons for consolidation range changed
Explain the reasons on consolidate scope changes (i.e. subsidiary newly established, subsidiary liquidation etc.) and relevant
information:
6. Other
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
Main operation Registration Share-holding ratio
Subsidiary Business nature Acquired way
place place Directly Indirectly
New
HUAFA Lease Property
Shenzhen Shenzhen 60.00% investment
Company management
acquisition
HUAFA New
Property
Property Shenzhen Shenzhen 100.00% investment
management
Company acquisition
Hengfa Production & New
Wuhan Wuhan 100.00%
Technology sales investment
142
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Company acquisition
HUAFA New
Property
Hengtian Shenzhen Shenzhen 100.00% investment
management
Company acquisition
HUAFA New
Property
Hengtai Shenzhen Shenzhen 100.00% investment
management
Company acquisition
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Nil
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over
half and over voting rights:
Nil
Major structured entity included in consolidates statement:
Nil
Basis of termination of agent or consignor:
Nil
Other explanation
Nil
(2) Important non-wholly-owned subsidiary
In RMB
Gains/losses Dividend announced to
Share-holding ratio of Ending equity of
Subsidiary attributable to minority distribute for minority
minority minority
in the Period in the Period
Explanation on holding ratio different from the voting right ratio for minority shareholders:
Other note:
(3) Main finance of the important non-wholly-owned subsidiary
In RMB
Ending balance Opening balance
Curren Non-c Curren Non-c
Subsid Non-c Total Non-c Total
Curren Total t urrent Curren Total t urrent
iary urrent liabilit urrent liabiliti
t assets assets liabiliti liabilit t assets assets liabiliti liabiliti
assets ies assets es
es ies es es
In RMB
The Period Last Period
Subsidiary Operation Total Cash flow Operation Total Cash flow
Net profit Net profit
Income comprehen from Income comprehen from
143
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SEMI-ANNUAL REPORT 2021
sive operation sive operation
income activity income activity
Other note:
Nil
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
Nil
(5) Financial or other supporting offers to the structured entity included in consolidated financial statement
range
Nil
Other note:
Nil
2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights
(1) Owners’ equity shares changed in subsidiary
(2) Impact on minority’s interest and owners’ equity attributable to parent company
In RMB
Other note
3. Equity in joint venture and associated enterprise
(1) Important joint venture and associated enterprise
Share-holding ratio Accounting
treatment on
Joint venture or
Main operation Registered investment for
associated Business nature
place place Directly Indirectly joint venture
enterprise
and associated
enterprise
Holding shares ratio different from the voting right ratio:
Has major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold:
(2) Main financial information of the important joint venture
In RMB
Ending balance /The Period Opening balance /Last Period
144
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Other note
(3) Main financial information of the important associated enterprise
In RMB
Ending balance /The Period Opening balance /Last Period
Other note
(4) Financial summary for non-important Joint venture and associated enterprise
In RMB
Ending balance /The Period Opening balance /Last Period
Joint venture: -- --
Amount based on share-holding ratio -- --
Associated enterprise: -- --
Amount based on share-holding ratio -- --
Other note
(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise
(6) Excess loss occurred in joint venture or associated enterprise
In RMB
Cumulative unrecognized Unrecognized loss in the
Name of joint venture or Accumulated unrecognized
loss accumulated in the current period (or net profit
associated enterprise loss at the end of the period
previous period shared in the current period)
Other note
(7) Unconfirmed commitment with joint venture investment concerned
(8) Intangible liability with joint venture or associated enterprise investment concerned
4. Major conduct joint operation
Joint business Principal place of Shareholding ratio/shares enjoyed
Registration Business nature
name business Direct Indirect
Explanation of the shareholding ratio or the share enjoyed in the joint operation is different from the voting rights ratio:
If a joint operation is a separate entity, the basis for classification as a joint operation:
145
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SEMI-ANNUAL REPORT 2021
Other note
5. Structured body excluding in consolidate financial statement
Relevant explanations for structured entities not included in the scope of the consolidated financial statements:
6. Other
X. Risk related with financial instrument
XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB
Ending fair value
Item
First-order Second-order Third-order Total
I. Sustaining measured
-- -- -- --
by fair value
II. Non-persistent
-- -- -- --
measure
146
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SEMI-ANNUAL REPORT 2021
2. Recognized basis for the market price sustaining and non-persistent measured by fair value on
first-order
3. The qualitative and quantitative information for the valuation technique and critical parameter that
sustaining and non-persistent measured by fair value on second-order
4. The qualitative and quantitative information for the valuation technique and critical parameter that
sustaining and non-persistent measured by fair value on third-order
5. Continuous third-level fair value measurement items, adjustment information between the opening and
closing book value and sensitivity analysis of unobservable parameters
6. Continuous fair value measurement items, if there is a conversion between various levels in the current
period, the reasons for the conversion and the policy for determining the timing of the conversion
7. Changes in valuation technology during the current period and reasons for the changes
8. The fair value of financial assets and financial liabilities not measured by fair value
9. Other
XII. Related party and related party transactions
1. Parent company of the enterprise
Share-holding
ratio on the Voting right ratio
Parent company Registration place Business nature Registered capital
enterprise for on the enterprise
parent company
Production and
Wuhan Zhongheng
sales, real estate
New Science &
development and
Technology Wuhan 138,000,000.00 42.13% 42.13%
sales, housing
Industrial Group
leasing and
Co., Ltd
management
Explanation on parent company of the enterprise
Nil
The ultimate control of the enterprise is Li Zhongqiu.
Other note:
Nil
2. Subsidiary of the Enterprise
Found more in VIII. Equity in other entity in the Note
147
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3. Joint venture and associated enterprise
Found more in Note
Other associated enterprise or joint ventures which has related transaction with the Company in the period or occurred previous:
Name of joint venture or associated enterprise Relationship with the company
Other note
4. Other Related party
Other Related party Relationship with the Enterprise
Control by same controlling shareholder and ultimate
Wuhan Zhongheng Huafa Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Hengsheng Yutian Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Hengsheng Photo-electricity Industry Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hong Kong Yutian International Investment Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan New Oriental Real Estate Development Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Zhongheng Property Management Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Optical Valley Display System Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Yutian Industrial Real Estate Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Yutian Dongfang Property Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Xiahua Zhongheng Electronics Co. Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Zhongheng Yutian Trading Co,, Ltd
controller
Control by same controlling shareholder and ultimate
Wuhan Yutian Hongguang Real Estate Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Zhongheng Huayu Investment Holding Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Yutian Investment Co., Ltd.
controller
Yutian International Co., Ltd. Control by same controlling shareholder and ultimate
148
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SEMI-ANNUAL REPORT 2021
controller
Control by same controlling shareholder and ultimate
Hong Kong Zhongheng Yutian Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Yutian Henghua Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Zhongheng Yongye Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Yutian Hengrui Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Wuhan Henglian Optoelectronics Co., Ltd.
controller
Other note
Nil
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
Whether over the
Trading limit
Related party Content Current Period approved limited or Last Period
approved
not (Y/N)
Hong Kong
Yutian
International Purchase goods 37,751,811.11 156,979,200.00 N 67,538,078.36
Investment Co.,
Ltd.
Wuhan
Hengsheng
Purchase goods 60,509,427.57 130,816,000.00 N 60,232,724.51
Photo-electricity
Industry Co., Ltd.
Goods sold/labor service providing
In RMB
Related party Content Current Period Last Period
Hong Kong Yutian
International Investment Co., Sales of goods 62,100,265.79 59,074,589.93
Ltd.
Wuhan Hengsheng
Sales of goods 17,319,716.68 10,283,633.89
Photo-electricity Industry
149
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Co., Ltd.
Explanation on goods purchasing, labor service providing and receiving
Nil
(2) Related trusteeship management/contract & entrust management/ outsourcing
The company's entrusted management/contracting situation table:
In RMB
Custody
The name of
Pricing basis income/contrac
the entrusting Name of Types of Start date of End date of
for custody ting income
party / contractor/contr entrusted/contr entrusted/contr entrust/contract
income/contrac confirmed in
outsourcing actor acted assets acted start date ing
ting income the current
party
period
Description of related custody/contracting situation
The company's entrusted management / outsourcing situation table:
In RMB
The name of Custody
the entrusting Name of Entrusted/Outs Start date of End date of Custody fee/package fee
party / contractor/contr ourced Asset commission/out entrustment/out fee/package fee confirmed in
outsourcing actor Type of package sourcing pricing basis the current
party period
Explanation on related lease
(3) Related lease
As a lessor for the Company:
In RMB
Lease income recognized in Lease income recognized at
Lessee Assets type
the Period last Period
As a tenant for the Company:
In RMB
Rent costs recognized in the Rent costs recognized at last
Lessor Assets type
Period Period
Explanation on related lease
(4) Related guarantee
As the guarantor
In RMB
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Completed or not
Secured party Amount guarantee Start End
(Y/N)
Hengfa Technology 27,889,579.00 April 20, 2018 April 20, 2022 N
As the secured party
In RMB
Completed or not
Guarantor Amount guarantee Start End
(Y/N)
Li Zhongqiu 67,000,000.00 July 01, 2019 July 01, 2022 N
Explanation on related guarantee
Nil
(5) Related party’s borrowed/lending funds
In RMB
Related party Loan amount Start date Maturity Note
Borrowing
Lending
(6) Related party’s assets transfer and debt reorganization
In RMB
Related party Related transaction content The Period Last Period
(3) Remuneration of key manager
In RMB
Item The Period Last Period
(8) Other related transactions
6. Receivable/payable items of related parties
(1) Receivable
In RMB
Ending balance Opening balance
Item Related party
Book balance Bad debt provision Book balance Bad debt provision
Hong Kong Yutian
Accounts
International 29,037,251.56 41,513,718.58
receivable
Investment Co.,
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Ltd.
Wuhan Hengsheng
Accounts
Photo-electricity 1,434,688.52 12,676.70
receivable
Industry Co., Ltd.
Hong Kong Yutian
International
Prepayments 27,025,766.19
Investment Co.,
Ltd.
Total 30,471,940.08 68,552,161.47
(2) Payable
In RMB
Item Related party Closing book balance Opening book balance
Wuhan Hengsheng
Account payable Photo-electricity Industry 23,803,488.38 6,795,240.85
Co., Ltd.
Wuhan Hengsheng
Notes payable Photo-electricity Industry
Co., Ltd.
Total 23,803,488.38 6,795,240.85
7. Undertakings of related party
According to the claim request of the arbitration application of Shenzhen Vanke, Shen Huafa and Wuhan Zhongheng are required to
pay or bear jointly. The letter of Undertaking issued by Wuhan Zhongheng Group to Shenzhen Huafa will be fully borne by the
Wuhan Zhongheng Group if the arbitration is decided in favor of Vanke and the dispute arising from the contract leads to the
arbitration losses.
8. Other
Nil
XIII. Share-based payment
1. Overall situation of share-based payment
□ Applicable √Not applicable
2. Share-based payment settled by equity
□ Applicable √Not applicable
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3. Share-based payment settled by cash
□ Applicable √Not applicable
4. Modification and termination of share-based payment
Nil
5. Other
XIV. Undertakings or contingency
1. Important undertakings
Important undertakings on balance sheet date
Nil
2. Contingency
(1) Contingency on balance sheet date
Nil
(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosed
3. Other
As of the date of this report, the company has no undisclosed commitments or contingencies that should be disclosed.
XV. Events after balance sheet date
1. Important non adjustment matters
In RMB
Number of impacts on
The reason why the impact
Item Content financial status and operating
number cannot be estimated
results
2. Profit distribution
In RMB
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3. Sales return
4. Other events after balance sheet date
As of the date of this report, the company has no undisclosed post-balance sheet events that should be disclosed.
XVI. Other important events
1. Previous accounting errors collection
(1) Retrospective restatement method
In RMB
Names of report items in each
Correction of accounting errors Processing program Cumulative influence
comparison period affected
(2) Future applicable law
Reasons for adopting future applicable
Correction of accounting errors Approval procedure
law
2. Debt restructuring
3. Assets replacement
(1) Exchange of non-monetary assets
(2) Other asset replacement
4. Pension plan
5. Termination of operation
In RMB
Termination of
operation profit
Income tax attributable to
Item Income Expense Total profit Net profit
expense owners of the
parent
company
Other note
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6. Segment
(1) Recognition basis and accounting policy for reportable segment
(2) Financial information for reportable segment
In RMB
Item Offset of segment Total
(3) If the company has no reportable segments or is unable to disclose the total assets and liabilities of each
reportable segment, it should state the reasons
(4) Other explanations
7. Major transaction and events makes influence on investor’s decision
8. Other
1. Matters of adjudication of Southern International Arbitration Shen [2017] No. D376 from Southern China
International Economic & Trade Arbitration Commission
(1) Arbitration
In August 2015, Shenzhen Zhongheng Huafa Co., Ltd. (hereinafter referred to as “Shenzhen HUAFA”) and
Wuhan Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan Zhongheng”)
signed the “Cooperation Agreement on Urban Renewal Project of Update Units at Huafa Industrial Park,
Gongming Street, Guangming New District, Shenzhen”. As Shenzhen HUAFA and Wuhan Zhongheng planned to
cooperate with Shenzhen Vanke Real Estate CO., Ltd. (hereinafter referred to as “Shenzhen Vanke”) on the Huafa
urban renewal project (hereinafter referred to as “Huafa Renovation Project) at Gongming Street, Guangming
New District, Shenzhen, both parties appointed that Shenzhen HUAFA entrusted Wuhan Zhongheng to represent
it in this cooperation, and established project company - Shenzhen Vanke Guangming Real Estate Co., Ltd.
(hereinafter referred to as “Vanke Guangming”) as the subject of project implementation with Shenzhen Vanke;
Vanke Guangming signed “Demolition Compensation Agreement” with Shenzhen HUAFA and Wuhan
Zhongheng, and paid the compensation for demolition.
On August 21, 2015, Shenzhen HUAFA, Wuhan Zhongheng and Shenzhen Vanke signed the “Cooperative
Operation Contract of Renovation Project at Huafa Industrial Park, Gongming Street, Guangming New
District”(hereinafter referred to as “Cooperative Operation Contract”), the contract refined and appointed the
cooperation model and operating steps of both sides. And then Shenzhen HUAFA, Wuhan Zhongheng and
Shenzhen Vanke signed the “Agreement on the Housing Acquisition and Removal Compensation and Settlement”.
After signing the above agreement, Shenzhen Vanke paid the cooperation price of 600 million Yuan to Wuhan
Zhongheng through Vanke Guangming.
In September 2016, Shenzhen Vanke filed an arbitration to South China International Economic and Trade
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Arbitration Commission (hereinafter referred to as “South China Arbitration”) as Shenzhen HUAFA and Wuhan
Zhongheng violated the appointment of “Cooperative Operation Contract” and handled the “Confirmation of
Subject of Reconstruction Implementation” at an overdue time, and required Shenzhen HUAFA and Wuhan
Zhongheng to pay liquidated damages and attorneys' fees of 464.60 million yuan.
While filing the arbitration, Shenzhen Vanke also applied for property preservation of 400 million Yuan of
property under the name of Shenzhen Huafa and Wuhan Zhongheng to Shenzhen Intermediate People’s Court.
According to the ruling of Shenzhen Intermediate People's Court and “Notification of Sealing up, Seizing and
Freezing Assets” (The reference numbers are (2016) Yue 03 Cai Bao No. 51, (2016) Yue 03 Cai Bao No. 53), the
27 house properties (Note: the property within the scope of Huafa renovation project) under the name of Shenzhen
HUAFA and 116,489,894 shares (Note: of which 116,100,000 shares have been pledged) of Shenzhen HUAFA
stock held by Wuhan Zhongheng were frozen.
(2) Progress of arbitration
On November 12, 2016, the arbitration court held a hearing on this case.
In December 2016, Wuhan Zhongheng to Shenzhen HUAFA issued a “Commitment Letter” which included that if
the arbitration (Note: the case) ruled in favor of Shenzhen Vanke, the loss of arbitration caused by the contract
disputes should be fully assumed by our company. In the above contingent losses, if the judicial decision ruled
your company to pay the compensation in advance, our company promised to pay your company in cash within
one month, if our company could not pay on time due to uncontrollable factors, our company would like to pay the
corresponding interest according to the benchmark interest rate of bank loans in the corresponding period.
Because the plots in the renovation project placed in our company hadn’t been applied for transfer procedures and
were still under your company’s name (Note: based on the “Asset Replacement Contract” signed by Wuhan
Zhongheng and Shenzhen HUAFA on April 29, 2009), therefore, there was no risk of compliance, at the same time,
our company promised to give priority to paying the above compensation with the compensation for demolition of
renovation project.
On August 16, 2017, South China International Economic and Trade Arbitration Commission made the “Arbitral
Award” SCIA [2017] D376, according to the arbitral award, the applicant and counterclaim respondent in
arbitration case SCIA [2017] D376 were Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as
“Applicant” and “Vanke”). The first respondent and the first applicant for counterclaim were Wuhan Zhongheng
New Science & Technology Industrial Group Co., Ltd (hereinafter referred to as “Wuhan Zhongheng” and “First
Respondent”). The second respondent and the second applicant for counterclaim were Zhongheng Huafa. The
award results were as follows:
① The first respondent and the second respondent pay liquidated damages to the applicant with a base number of
RMB 600 million, calculating by the annual interest rate of 36% from October 1, 2015 to November 11, 2016;
② The first respondent and the second respondent pay the lawyer fees of RMB 1.4 million to the applicant due to
the case;
③ The first respondent and the second respondent pay the property preservation fees of RMB 10,000 to the
applicant;
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④ The arbitration fees for this request and case was RMB 3,101,515.00, the first respondent and the second
respondent should bear 70%, i.e. RMB 2,171,060.50, and the applicant should bear 30%, i.e. RMB 930,454.50.
The applicant had already paid the arbitration fees in full amount for this request which could be used as the
arbitration fees of this case and request and shall not be refunded. The first respondent and the second respondent
should directly pay RMB 2,171,060.50 to the applicant;
The arbitration fee of counterclaim in this case was RMB 76,050 which was undertaken by the first respondent
and the second respondent at their own expense. The first respondent and the second respondent paid the
arbitration fees in full amount for this request which could be used as the arbitration fees of this case and request
and shall not be refunded;
The actual expenses of the arbitrators in this case amounted to RMB 7,754.90, the first respondent and the second
respondent assumed 70%, i.e. RMB 5,428.43, and the applicant assumed 30%, i.e. RMB 2,326.47; the above
actual expenses of the arbitrators had been paid by the Commission, so the first respondent and the second
respondent and the applicant should directly pay RMB 5,428.43 and RMB 2,326.47 respectively to the
Commission;
⑤ Reject the applicant’s other arbitration requests;
⑥ Reject the arbitration counterclaims of the first respondent and the second respondent.
In summary, Wuhan Zhongheng and Shenzhen Huafa should pay liquidated damages, interest, lawyer fees,
property preservation fees, and arbitration fees for this request to Vanke and pay actual expenses of the arbitrators
in this case and pay the actual expenses incurred by the arbitrators in this case to South China International
Economic and Trade Arbitration Commission.
On February 7, 2018, the company and Wuhan Zhongheng Group applied to Shenzhen Intermediate People’s
Court to revoke the Ruling HNGZSC [2017] D376, the court made a judgment on August 16, 2018, rejecting the
company’s request for revocation. The company and its controlling shareholder Wuhan Zhongheng Group
received the “Execution Notice of Shenzhen Intermediate People’s Court” ([2018] Yue03Zhi No. 1870), and the
executor applied to the court for compulsory execution, the company was listed as dishonest person subject to
execution by Shenzhen Intermediate People’s Court. On December 13, 2019, the company announced that it had
been removed from the list of dishonest persons subject to execution by the Shenzhen Intermediate People’s
Court.
The Company and Wuhan Zhongheng Group received an enforcement decision in 2020, terminate the execution
process and wait for the conditions for continuation to be fulfilled before restarting.
(3) The response of the company’s management and the identification of the event
The company engaged lawyers to make an independent investigation and judgment on the event, and issued
special legal opinion that the reasons of Wuhan Zhongheng resulted in a failure of a net handover, and Wuhan
Zhongheng received the full amount of 600 million yuan paid by Vanke Guangming. Therefore, Wuhan
Zhongheng should bear all responsibilities for faults in response to the breach of contract. Wuhan Zhongheng
issued the Commitment Letter in December 2016, pledged that if the arbitration judged Vanke to win the case,
Wuhan Zhongheng should bear all arbitration losses caused by the contract dispute; after the award came into
effect, Wuhan Zhongheng issued the Confirmation Letter again on November 23, 2017 to divide the duty of
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performance of the award; the independent directors of the company issued independent opinions after careful
study and judgment that Wuhan Zhongheng should bear all liability for satisfaction on the Award HNGZSC [2017]
D376.
2. Arbitration case of legal service contract dispute with V&T (Shenzhen) Law Firm
On March 12, 2018, the company received the arbitration notice No. SHEN DX20180087 from Shenzhen Court
of International Arbitration, V&T (Shenzhen) Law Firm requested to make a ruling that the Company and Wuhan
Zhongheng pay the delinquent lawyer’s fees of RMB 19,402,000 and the liquidated damages (The liquidated
damages shall take five ten-thousandths of a day as a standard based on RMB 19,402,000 from August 24, 2017 to
the date of payment of the above-mentioned lawyer’s fees, and the liquidated damages up to February 12, 2018
was RMB 1,678,273.00). The company should bear all the arbitration fees for this case.
On November 5, 2019, the company received the arbitration award HNGZSC [2019] D618 from Shenzhen Court
of International Arbitration, ruling that the company and its controlling shareholder Wuhan Zhongheng New
Science & Technology Industrial Group Co., Ltd should pay Shenzhen V & T Law Firm the arrears of legal fees
of RMB 19,402,000 and the liquidated damages.
Guangdong Haibu Attorneys-at-Law engaged by the company made verification opinion on the legal
responsibility assumed for the performance of the arbitration result and believed that this case was caused by the
Vanke arbitration case No. SHEN DP20160334, and the net land was not handed over on time due to Wuhan
Zhongheng, and Wuhan Zhongheng Heng received 600 million yuan paid by Vanke Guangming in full, so the
company is not liable for compensation under the judgment of the Vanke case. The nature of the attorney fees of
V&T Law Firm is deduction of royalties. V&T Law Firm's deduction for the company is 0, and V&T Law Firm's
attorney fees paid by the company is 0. In addition, Wuhan Zhongheng Group has issued a "Letter of
Commitment" to Shenzhen Huafa in December 2016, if the arbitration decides that Vanke wins the lawsuit,
Wuhan Zhongheng Group will bear the full amount of the arbitration losses caused by the contract disputes.
Wuhan Zhongheng Group, as the beneficiary of the "Entrusted Agency Contract", shall bear all the payment
responsibilities for the “Award” HNGZSC [2019] No. D618, and the company shall not be liable for the losses in
this case.
On November 17, 2020, the court enforced the attorney fees that Wuhan Zhongheng Group should assume. As a
joint defendant, the company was forced to enforce partial payment of 1,564,767.46 yuan, Wuhan Zhongheng
Group returned this partial payment to the listed company on the 24th of that month.
3. Dispute with Shenzhen Zhongheng Semiconductor Co., Ltd. (formerly known as "Shenzhen Zhongheng Huafa
Technology Co., Ltd.") concerning land transfer
(1) Cause of the case
On April 29, 2009, the company signed an Asset Replacement Contract with Wuhan Zhongheng Group.
According to the contract, the company would use the the land use rights of two plots of land located at Huafa
Road, Gongming Town, Bao’an District, Shenzhen, i.e. land parcel number A627-0005 (real estate registration
number 8000101219) and A627-0007 (real estate registration number 8000101218), which are worth 18.55
million yuan, to increase capital to Shenzhen Zhongheng Semiconductor Co., Ltd. (former Zhongheng Huafa
Technology Co., Ltd., hereinafter referred to as "Zhongheng Semiconductor") and transfer ownership to
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Zhongheng Semiconductor, Wuhan Zhongheng Group replaced the company's 100% equity in Zhongheng
Semiconductor with its 56% equity in Wuhan Hengfa Technology Co., Ltd. For the main content of the
above-mentioned Asset Replacement Contract, please refer to the Announcement on Related Transactions of Asset
Replacement with Controlling Shareholders published by the company on Juchao Website dated April 30, 2009,
with the announcement number 2009-17. After Wuhan Zhongheng Group fulfilled its obligations under the Asset
Replacement Contract, the company transferred 100% of its equity in Zhongheng Semiconductor to Wuhan
Zhongheng Group on December 21, 2009; the company also handed over the above two plots of land to
Zhongheng Semiconductor for possession, management, and use, but the land use right has not been transferred to
Zhongheng Semiconductor.
(2) Case progress
On April 17, 2020, the company received the "Notice of Response" (2020) Yue 03 Min Chu No. 17 and other
related materials delivered by the Shenzhen Intermediate People’s Court of Guangdong Province. Zhongheng
Semiconductor sued the company and required the company and the third party (Wuhan Zhongheng Group) to
continue to perform the contract, and transfer ownership of the above two plots of land and compensate for
economic losses of 52 million yuan. The Shenzhen Intermediate People's Court has filed a case with the case
number (2020) Yue 03 Min Chu No. 17.
Since Zhongheng Semiconductor's main appeal is the transfer of land to its name, the company is reaching a
settlement with Zhongheng Semiconductor. The company promises to actively cooperate with the land transfer.
Zhongheng Semiconductor has issued a letter of commitment to the company promising to abandon the demand
for economic compensation. The Company received the first trial verdict of the case in May 2021. Zhongheng
Semiconductor has appealed the decision to the Supreme People’s Court, and the first trial verdict is not yet
entered into force.
XVII. Principle notes of financial statements of parent company
1. Account receivable
(1) Category of account receivable
In RMB
Ending balance Opening balance
Bad debt
Book balance Book balance Bad debt provision
Category provision Book Book
Amoun Proport Amoun Accrua value Amoun Proport Amoun Accrual value
t ion t l ratio t ion t ratio
Account receivable
with bad debt 10,293, 100.00 10,293, 100.00 10,293, 100.00 10,293, 100.00
0.00 0.00
provision accrual 424.90 % 424.90 % 424.90 % 424.90 %
on a single basis
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Including:
Including:
10,293, 10,293, 10,293, 10,293,
Total
424.90 424.90 424.90 424.90
Accrual of bad debt provision on single basis: 10,293,424.90
In RMB
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Hong Kong Haowei
1,870,887.18 1,870,887.18 100.00% Uncollectible
Industrial Co., Ltd.
TCL ACE ELECTRIC
APPLIANCE
1,325,431.75 1,325,431.75 100.00% Uncollectible
(HUIZHOU) CO.,
LTD.
Qingdao Haier Parts
1,225,326.15 1,225,326.15 100.00% Uncollectible
Procurement Co., Ltd.
SKYWORTH
Multimedia 579,343.89 579,343.89 100.00% Uncollectible
(Shenzhen) Co., Ltd.
Shenzhen Huixin
Video Technology Co., 381,168.96 381,168.96 100.00% Uncollectible
Ltd.
Shenzhen Wandelai
Digital Technology 351,813.70 351,813.70 100.00% Uncollectible
Co., Ltd.
Shenzhen Dalong
344,700.00 344,700.00 100.00% Uncollectible
Electronic Co., Ltd.
Shenzhen Keya
332,337.76 332,337.76 100.00% Uncollectible
Electronic Co., Ltd.
Shenzhen Qunping
304,542.95 304,542.95 100.00% Uncollectible
Electronic Co., Ltd.
China Galaxy
Electronics (Hong 288,261.17 288,261.17 100.00% Uncollectible
Kong) Co., Ltd.
Dongguan Weite
274,399.80 274,399.80 100.00% Uncollectible
Electronic Co., Ltd.
Hong Kong New
Century Electronics 207,409.40 207,409.40 100.00% Uncollectible
Co., Ltd.
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Shenyang Beitai
203,304.02 203,304.02 100.00% Uncollectible
Electronic Co., Ltd.
Beijing Xinfang Weiye
193,000.00 193,000.00 100.00% Uncollectible
Technology Co., Ltd.
TCL Electronics (Hong
145,087.14 145,087.14 100.00% Uncollectible
Kong) Co., Ltd.
Huizhou TCL Xinte
142,707.14 142,707.14 100.00% Uncollectible
Electronics Co., Ltd.
Sky Worth – RGB
133,485.83 133,485.83 100.00% Uncollectible
Electronic Co., Ltd.
Other 1,990,217.45 1,990,217.45 100.00% Uncollectible
Total 10,293,424.29 10,293,424.29 -- --
Accrual of bad debt provision on single basis:
In RMB
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio:
In RMB
Ending balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
In RMB
Account age Ending balance
Over 3 years 10,293,424.90
Over 5 years 10,293,424.90
Total 10,293,424.90
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
Opening Amount changed in the period
Category Ending balance
balance Accrual Collected or Written-off Other
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reversal
Including major amount bad debt provision that collected or reversal in the period:
In RMB
Name Amount collected or reversal Way of collection
(3) Actual written-off accounts receivable in the current period
In RMB
Item Written-off amount
Including the important accounts receivable written-off situation:
In RMB
Whether the
Nature of Written-off payment is
Written-off
Name accounts Written-off reason procedure generated by
amount
receivable performed related party
transactions
Written-off description of accounts receivable:
Nil
(4) Top 5 account receivables collected by arrears party at ending balance
In RMB
Ending balance of account Proportion in total account Ending balance of bad debt
Company
receivable receivables at year-end provision
Hong Kong Haowei
1,870,887.18 18.18% 1,870,887.18
Industrial Co., Ltd.
TCL ACE ELECTRIC
APPLIANCE (HUIZHOU) 1,325,431.75 12.88% 1,325,431.75
CO., LTD.
Qingdao Haier Parts
1,225,326.15 11.90% 1,225,326.15
Procurement Co., Ltd.
SKYWORTH Multimedia
579,343.89 5.63% 579,343.89
(Shenzhen) Co., Ltd.
Shenzhen Huixin Video
381,168.96 3.70% 381,168.96
Technology Co., Ltd.
Total 5,382,157.93 52.29%
(5) Account receivable derecognition due to financial assets transfer
Nil
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(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
Other note:
Nil
2. Other account receivable
In RMB
Item Ending balance Opening balance
Other account receivable 87,948,585.04 93,922,057.92
Total 87,948,585.04 93,922,057.92
(1) Interest receivable
1) Category of interest receivable
In RMB
Item Ending balance Opening balance
2) Significant overdue interest
Whether there is
Borrower Ending balance Overdue time Overdue reason impairment and its
judgment basis
Other note:
3)Accrual of bad debt provision
□ Applicable √Not applicable
(2)Dividend receivable
1) Category of dividend receivable
In RMB
Item (or invested unit) Ending balance Opening balance
2) Important dividend receivable with account age over one year
In RMB
Item (or invested unit) Ending balance Account age Reasons for Whether there is
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non-recovery impairment and its
judgment basis
3) Accrual of bad debt provision
□ Applicable √Not applicable
Other note:
(3) Other account receivable
1) Other account receivable by nature
In RMB
Nature Ending book balance Opening book balance
Margin & deposit 4,427,575.45 304,608.00
Borrow money 2,419,063.12 1,869,073.12
Intercourse funds 70,565,408.13 107,488,541.28
Rental receivable 29,316,713.51 5,847,389.48
Other 37,294.00 168,162.09
Less: Bad debt provision -18,817,469.17 -18,512,750.12
Total 87,948,585.04 97,165,023.85
2)Accrual of bad debt provision
In RMB
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance on1 Jan. 2021 111.75 18,817,357.42 18,817,469.17
Balance of 1 Jan. 2021
—— —— —— ——
in the period
Balance on Dec. 31,
111.75 18,817,357.42 18,817,469.17
2021
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
In RMB
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Account age Ending balance
Within one year (one year included) 8,752,615.17
1-2 years 79,196,078.82
2-3 years 312,212.44
Over 3 years 18,505,147.78
Over 5 years 18,505,147.78
Total 106,766,054.21
3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
Amount changed in the period
Opening
Category Collected or Ending balance
balance Accrual Written-off Other
reversal
Including the important amount collected or switches back in the period:
In RMB
Name Amount collected or switches back Way of collection
4) The actual written-off other receivables in the current period
In RMB
Item Written-off amount
Including the important written-off situation of other receivables:
In RMB
Whether the
Written-off payment is
Nature of other Written-off
Name Written-off reason procedure generated by
receivables amount
performed related party
transactions
Description of other receivables written-off:
5) Top 5 other receivables collected by arrears party at ending balance
In RMB
Proportion in total
Ending balance of
Company Nature Ending balance Account ages other receivables
bad debt provision
at period-end
Wuhan Hengfa Intercourse funds 82,263,990.66 Within one year; 77.00%
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Technology Co., 1-2 years
Ltd.
Shenzhen
Zhongheng HUAFA Intercourse funds 8,588,951.51 Within one year 8.00%
Property Co., Ltd
Shenzhen HUAFA
Rental fee
Property Leasing 4,588,859.19 Over 3 years 4.00% 4,588,859.19
receivable
Co., Ltd.
Portman Intercourse funds 4,021,734.22 Over 3 years 4.00% 4,021,734.22
Shenzhen Jifang Rental fee
1,071,160.00 Over 3 years 1.00% 1,071,160.00
Investment Co., Ltd receivable
Total -- 100,534,695.58 -- 9,681,753.41
6) Receivables involving government subsidies
In RMB
Government subsidy Estimated time, amount
Name Ending balance Ending account age
item and basis of receipt
7) Other receivable for termination of confirmation due to the transfer of financial assets
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other note:
3. Long-term equity investments
In RMB
Ending balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment for
186,618,400.00 186,618,400.00 187,218,400.00 600,000.00 186,618,400.00
subsidiary
Total 186,618,400.00 186,618,400.00 187,218,400.00 600,000.00 186,618,400.00
(1) Investment for subsidiary
In RMB
Opening Changes in the period Closing Closing
The invested
balance Accrual of balance balance of
entity Additional Reduce Other
(Book value) impairment (Book value) impairment
166
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
investment investment provision provision
Shenzhen
Huafa
Property
Leasing Co.,
Ltd.
Shenzhen
Zhongheng
HUAFA 1,000,000.00 1,000,000.00
Property Co.,
Ltd
Wuhan
Hengfa 183,608,900. 183,608,900.
Technology 00 00
Co., Ltd.
Shenzhen
HUAFA
1,000,000.00 1,000,000.00
Hengtian Co.,
Ltd.
Shenzhen
HUAFA
1,000,000.00 1,000,000.00
Hengtai Co.,
Ltd.
Ruth Co., Ltd. 9,500.00 9,500.00
186,618,400. 186,618,400.
Total
00 00
(2) Investment for associates and joint venture
In RMB
Current changes (+, -)
Investm Ending
Cash
Openin ent Other balance
dividen Ending
g Additio gain/los compre of
Capital Other d or Impair balance
Enterpr balance nal s hensive depreci
reducti equity profit ment Other (book
ise (book investm recogni income ation
on change announ accrual value)
value) ent zed adjustm reserve
ced to
under ent s
issued
equity
I. Joint venture
II. Associated enterprise
167
SHENZHEN ZHONGHEN HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2021
(3) Other note
4. Operating revenue and cost
In RMB
The Period Last Period
Item
Revenue Cost Revenue Cost
Other business 22,146,204.31 4,439,887.16 16,720,522.47 2,040,226.11
Total 22,146,204.31 4,439,887.16 16,720,522.47 2,040,226.11
Information relating to revenue:
In RMB
Category Branch 1 Branch 2 Total
Including:
Including:
Including:
Including:
Including:
Including:
Including:
Information relating to performance obligations:
Nil
Information relating to the transaction price assigned to the remaining performance obligation:
At end of the period, the corresponding revenue amount for performance obligations that have been signed but have not been
performed or have not been performed is 0.00 yuan, of which, yuan expected to recognized as revenue in the year.
Other explanation:
Nil
5. Investment income
In RMB
Item The Period Last Period
6. Other
Nil
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SEMI-ANNUAL REPORT 2021
XVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
In RMB
Item Amount Note
Gain/loss of entrusted investment or assets
149,767.58
management
Other non-operating income and
expenditure except for the aforementioned -194,603.88
items
Total -44,836.30 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √Not applicable
2. ROE and earnings per share
Earnings per share
Profits during report period Weighted average ROE Basic earnings per Diluted earnings per
share (RMB/Share) share (RMB/Share)
Net profits belong to common
stock stockholders of the 2.40% 0.0248 0.0248
Company
Net profits belong to common
stock stockholders of the
2.40% 0.0286 0.0286
Company after deducting
nonrecurring gains and losses
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
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SEMI-ANNUAL REPORT 2021
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for the
differences adjustment audited by foreign auditing institute, listed name of the institute
4. Other
Nil
170