The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
Stock Code: 000022/200022 Stock Name: Chiwan Wharf A / Chiwan Wharf B Public Announcement No.: 2018-023
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
THE ABSTRACT OF THE 2017 ANNUAL REPORT
I. Important information
This Abstract is based on the full text of the Annual Report. In order for a full understanding of the operating
results, financial condition and future development planning of the Company, investors are kindly reminded to
read the full text carefully on the media designated by the China Securities Regulatory Commission.
This Abstract is prepared in both Chinese and English. Should there be any discrepancy between the two versions,
the Chinese version shall prevail.
Non-standard auditor’s opinion
□ Applicable √ Not applicable
Preliminary plan for profit distribution to the common shareholders or turning the capital reserve into the share
capital for the reporting period, which has been reviewed and approved at the board meeting
√ Applicable □ Not applicable
Share capital increase from the capital reserve
□ Yes √ No
Preliminary plan for profit distribution to the common shareholders for the reporting period which has been
reviewed and approved at the board meeting: Based on the total shares of 644,763,730, a cash dividend of
RMB13.19 (tax included) will be distributed to all the shareholders for every 10 shares that they hold. No bonus
shares will be granted and no capital reserve will be turned into share capital.
Preliminary plan for profit distribution to the preference shareholders for the reporting period which has been
reviewed and approved at the board meeting
□ Applicable √ Not applicable
II. Company profile
1. Stock profile
Chiwan Wharf A,
Stock name Stock code 000022, 200022
Chiwan Wharf B
Stock exchange Shenzhen Stock Exchange
Contact information Company Secretary Securities Representative
Name Wang Yongli Hu Jingjing & Chen Dan
8/F, Chiwan Petroleum Building, Zhaoshang Street, Nanshan District,
Office address
Shenzhen, PRC
Fax +86 755 26684117 +86 755 26684117
Tel. +86 755 26694222 +86 755 26694222
E-mail address cwh@szcwh.com cwh@szcwh.com
2. Brief introduction to the main business or products in the reporting period
(1) The Company’s main business scope and business models
1
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
The Company is principally engaged in the handling, warehousing and transportation of containers and bulk
cargoes, as well as the provision of related services. The Company has 6 container berths and 7 bulk cargo berths
in Chiwan Wharf (Shenzhen), 3 container berths in Mawan Wharf (Shenzhen) and 5 bulk cargo berths in
Machong Wharf (Dongguan). The Company also has an investment in Laizhou Wharf in Shandong Province.
(2) Development stage and seasonality of the industry, as well as the Company’s position in the industry
The port industry in which the Company competes is a basic industry in the national economy, with its
development level tied to the macro economy and trade. Due to seasonal factors and a stronger endogenous
driving force of growth, the world economy was on a track of relatively strong recovery during the reporting
period, which resulted in a faster recovery of international trade and an uptick in growth of port throughput.
The ports run by the Company have been considered hubs for container and bulk cargo carriers in the Pearl River
Delta. The Company’s market position and operating performance remained stable during the reporting period.
3. Accounting and financial highlights
(1) Accounting and financial highlights for the past three years
Does the Company adjust retrospectively or restate the accounting data of previous years?
√ Yes □ No
Unit: RMB
Increase/decrease
Item 2017 2016 of current year over 2015
last year
Operating revenues 2,456,218,834.63 2,381,483,399.94 3.14% 2,342,495,360.79
Net profits attributable to
504,495,064.39 532,376,492.97 -5.24% 521,390,931.84
shareholders of the parent
Net profits attributable to
shareholders of the parent
497,361,340.01 529,198,583.98 -6.02% 520,784,611.74
before extraordinary gains and
losses
Net cash flows from operating
1,162,281,754.31 1,121,032,625.07 3.68% 1,231,610,675.57
activities
Basic EPS (RMB/share) 0.782 0.826 -5.33% 0.809
Diluted EPS (RMB/share) 0.782 0.826 -5.33% 0.809
Weighted average ROE (%) 10.45% 11.57% -1.12% 12.20%
Increase/decrease
Item As of 31 Dec. 2017 As of 31 Dec. 2016 of current year-end As of 31 Dec. 2015
than last year-end
Total assets 7,975,470,563.32 7,792,570,272.01 2.35% 8,186,131,157.94
Net assets attributable to
4,922,969,405.92 4,736,680,543.81 3.93% 4,474,942,668.10
shareholders of the parent
Business mergers under the same control have caused retrospective adjustments or restatements, which are shown
in the table below. For further information, see “(3) YoY changes in the consolidation scope” under “8. Issues
related to the financial report” under “III. Performance discussion and analysis” in this Abstract.
2
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
Unit: RMB
Increase/dec
rease of
2016 current year 2015
Item 2017 over last
year
Before After Before After
After adjustment
adjustment adjustment adjustment adjustment
Operating revenues (RMB) 2,456,218,834.63 1,905,107,140.42 2,381,483,399.94 3.14% 1,872,608,596.16 2,342,495,360.79
Net profits attributable to
shareholders of the parent 504,495,064.39 532,376,492.97 532,376,492.97 -5.24% 527,751,492.42 521,390,931.84
(RMB)
Net profits attributable to
shareholders of the parent
497,361,340.01 530,615,980.15 529,198,583.98 -6.02% 528,043,530.88 520,784,611.74
before extraordinary gains
and losses (RMB)
Net cash flows from
1,162,281,754.31 827,754,904.11 1,121,032,625.07 3.68% 977,850,737.45 1,231,610,675.57
operating activities (RMB)
Basic EPS (RMB/share) 0.782 0.826 0.826 -5.33% 0.819 0.809
Diluted EPS (RMB/share) 0.782 0.826 0.826 -5.33% 0.819 0.809
Weighted average ROE
10.45% 11.64% 11.57% -1.12% 12.34% 12.20%
(%)
Increase/dec
rease of
current
As of 31 Dec. 2016 As of 31 Dec. 2015
As of 31 Dec. year-end
2017 than last
year-end
After After Before After
Before adjustment
adjustment adjustment adjustment adjustment
Total assets (RMB) 7,975,470,563.32 6,620,476,709.79 7,792,570,272.01 2.35% 6,913,772,876.99 8,186,131,157.94
Net assets attributable to
shareholders of the parent 4,922,969,405.92 4,709,815,552.89 4,736,680,543.81 3.93% 4,439,600,537.05 4,474,942,668.10
(RMB)
(2) Accounting highlights by quarter
Unit: RMB
Item Q1 Q2 Q3 Q4
Operating revenues 590,462,575.45 586,188,442.54 686,261,296.41 593,306,520.23
Net profits attributable to
138,193,456.79 137,867,900.71 164,362,034.13 64,071,672.76
shareholders of the parent
Net profits attributable to
shareholders of the parent before 137,529,057.95 138,082,062.94 163,375,030.69 58,375,188.43
extraordinary gains and losses
Net cash flows from operating
327,701,479.55 246,854,052.48 341,832,880.07 245,893,342.21
activities
The financial indicators above or their summations differ from those which had been disclosed in quarterly or
semi-annual reports because they have been retrospectively adjusted as a result of business mergers under the
same control.
3
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
4. Share capital and shareholders
(1) Numbers of the common shareholders and the preference shareholders with resumed voting rights as
well as the shareholdings of the top 10 shareholders
Unit: share
Total number of
Total number of 35,592, Total number of preference
Total number 35,592, including common including preference shareholders with
of common 25,133A-shareholde shareholders at 25,133A-shareh shareholders with resumed voting
0 0
shareholders rs and 10,459 previous month-end olders and resumed voting rights at previous
at period-end B-shareholders of this Report’s 10,459 rights at month-end of this
disclosure B-shareholders period-end (if any) Report’s disclosure
(if any)
5% greater shareholders or top 10 shareholders
Sharehold Total shares +/- in Number of Number of
Nature of ing held Pledged or
Name of shareholder reporting restricted shares non-restricted
shareholder percentag frozen shares
at period-end period held shares held
e
CHINA NANSHAN
State-owned
DEVELOPMENT 32.52% 209,687,067 0 0 209,687,067 0
corporation
(GROUP) INC.
Common
SHENZHEN MALAI
domestic 25.00% 161,190,933 0 0 161,190,933 0
STORAGE CO., LTD.
corporation
KEEN FIELD
Foreign
ENTERPRISES 8.58% 55,314,208 0 0 55,314,208 Unknown
corporation
LIMITED
CMBLSA RE FTIF
TEMPLETON Foreign
7.43% 47,914,954 0 0 47,914,954 Unknown
ASIAN GRW FD GTI corporation
5496
Common
CITIC SECURITIES
domestic 1.47% 9,467,951 0 0 9,467,951 0
CO., LTD
corporation
Foreign
NORGES BANK 0.43% 2,802,863 1,142,301 0 2,802,863 Unknown
corporation
VANGUARD
EMERGING Foreign
0.41% 2,617,518 0 0 2,617,518 Unknown
MARKETS STOCK corporation
INDEX FUND
Domestic
MAI SHUQING 0.35% 2,238,347 1,908,847 0 2,238,347 0
individual
CHINA
MERCHANTS Foreign
0.33% 2,126,022 -325,037 0 2,126,022 Unknown
SECURITIES (HK) corporation
CO., LTD.
CANADA POST
CORPORATION Foreign
0.24% 1,579,096 -52,300 0 1,579,096 Unknown
REGISTERED corporation
PENSION PLAN
Top 10 non-restricted shareholders
Number of non-restricted shares held Type of shares
Name of shareholder
at period-end Type Number
CHINA NANSHAN DEVELOPMENT (GROUP) INC. 209,687,067 A share 209,687,067
SHENZHEN MALAI STORAGE CO., LTD. 161,190,933 A share 161,190,933
KEEN FIELD ENTERPRISES LIMITED 55,314,208 B share 55,314,208
CMBLSA RE FTIF TEMPLETON ASIAN GRW FD GTI 47,914,954 B share 47,914,954
4
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
5496
CITIC SECURITIES CO., LTD 9,467,951 A share 9,467,951
NORGES BANK 2,802,863 B share 2,802,863
VANGUARD EMERGING MARKETS STOCK INDEX
2,617,518 B share 2,617,518
FUND
MAI SHUQING 2,238,347 A share 2,238,347
CHINA MERCHANTS SECURITIES (HK) CO., LTD. 2,126,022 B share 2,126,022
CANADA POST CORPORATION REGISTERED
1,579,096 B share 1,579,096
PENSION PLAN
China Merchants Port Holdings Company Limited (“CMPort”) is a
Related or acting-in-concert parties among the top ten shareholder of China Nanshan Development (Group) Inc., and Shenzhen
non-restrictedly tradable share holders and between the top Malai Storage Co., Ltd. and Keen Field Enterprises Limited are both
ten non-restrictedly tradable share holders and the top ten wholly-funded subsidiaries of CMPort. Other than that, the Company
shareholders does not know whether the other non-restricted shareholders are related
parties or not.
Top ten common shareholders conducting securities margin
N/A
trading (if any)
(2) Number of the preference shareholders and the shareholdings of the top 10 of them
□ Applicable √ Not applicable
No preference shareholders in the reporting period
(3) Relationship between the Company and its actual controller in the form of diagram
State-Owned Assets Supervision and Administration Commission of the State Council
100%
China Merchants Group
61.81%
China Merchants Port Holdings
Entrusted to Company Limited
manage
32.52%
shares held 100% 100% 37.02%
by CND
Group
Malai Storage Keen Field Enterprises CND Group
25% 8.58% 32.52%
14.58% Public Share A
Shenzhen Chiwan Wharf Holdings Limited
19.32% Public Share B
Due to the planning and demonstration of China Merchants Group - the actual controller of the Company on
major events related to the Company and through the application of the Company, the Company’s stock was
suspended from the market opening on 20 November 2017. Subsequently, upon the consultation and
demonstration of related parties, the Company confirmed that the aforementioned major event constituted material
asset reorganization. From the market opening on 4 December 2017, the Company’s stock transferred to the
material asset reorganization event and continued to be suspended. On 1 December 2017, the Company signed the
Agreement of Intent for Reorganization with China Merchants Group (Hong Kong) Co., Ltd. regarding this
5
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
reorganization. The two parties of the Agreement reached the consensus on the intentional arrangements for the
planned asset reorganization issue, and the relevant announcement (Announcement No.: No. 2018-008) was
published on Securities Times, Ta Kung Pao and www.cninfo.com.cn on 27 January 2018.
On 7 February 2018, the Company made the disclosure announcement by publishing the Summary of
the Report for the Acquisition and the Simplified Report of Change in Equity on www.cninfo.com.cn. China
Merchants Gangtong Development (Shenzhen) Co., Ltd. (CMGD) is a wholly-owned subsidiary of Broadford
Global Limited (Broadford Global), which is controlled by China Merchants Group (H.K.) Limited (CMG Hong
Kong). After the completion of the acquisition, CMGD and Broadford Global Limited hold a total of 370,878,000
A-shares and 55,314,208 B-shares of Shenzhen Chiwan, occupying 66.10% of the total issued capital stock of
Shenzhen Chiwan (including A-shares of 57.52% and B-shares of 8.58%); CND Group, Malai Storage and KFEL
no longer hold any share of Shenzhen Chiwan. The controlling shareholder of Shenzhen Chiwan has changed
from China Merchants Port to CMGD with no change in the actual controller, which is still China Merchants
Group.
The ownership and controlling relationship between the actual controller of the Company and the Company is
detailed as follows:
State-Owned Assets Supervision and Administration Commission of the State
Council
100%
China Merchants Group
100%
100%
CMG Hong Kong
100%
Broadford Global Limited
100%
China Merchants Gangtong Development (Shenzhen) Co., Ltd. 8.58%
57.52% 14.58%
Public Share A
Shenzhen Chiwan Wharf Holdings Limited
Public Share B
19.32%
5. Corporate bonds
□ Applicable √ Not applicable
III. Performance discussion and analysis
Investors are kindly reminded to read the full text of this Report carefully and pay special attention to the
following risk factors:
Any forward-looking statement such as those involving future plans or development strategies in this Report shall
not be considered as virtual promises of the Company to investors. And investors are kindly reminded to pay
attention to possible risks. Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn have been designated by
the Company for information disclosure. And all information about the Company shall be subject to what’s
disclosed on the aforesaid media. Investors are kindly reminded to pay attention to possible risks.
Is the Company subject to any disclosure requirements for special industries?
No.
6
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
1. Business review for the reporting period
During 2017, the global economy grew at a faster pace, with higher international trade volumes and prices, as well
as a basically stable financial market. China’s economic growth reached 6.9% for the year as its supply-side
structural reform boosted investment and export. The country’s foreign trade was improving, with the total value
coming to an end of the recent years’ negative growth and rebounding 14.2% over last year. As a result, the
country’s shipping market saw a general recovery, with faster growth in port throughput. According to the
preliminary data of China’s Ministry of Transport, the country’s coastal ports above the designated size registered
a cargo throughput of 8.63 billion metric tons, representing a year-over-year growth of 6.4% (3.2 percentage
points higher than last year), and a container throughput of 0.21 billion TEU, up 7.7% from a year earlier (4.3
percentage points higher than last year).
During the reporting period, the Company forged ahead, faithfully following the policy of “Adhere to a
Down-to-Earth Working Style and Focus on the Main Business for Development”. All the business plans that the
Company set out for the year have been implemented successfully, with the yearly cargo throughput reaching
69.847 million tons, representing a steady year-over-year increase of 1.8%.
(1) Container handling business
A higher container shipping demand spurred by the recovery in international trade, the slowdown in growth in the
worldwide shipping capacity and the slightly increased shipping rates brought better earnings to shipping
companies. Mergers, restructuring and federalization were still taking place in the shipping sector. The three
major shipping unions, namely, 2M, OCEAN and THE began running in April, which has caused adjustments to
global shipping routes, as well as a more centralized market.
During the reporting period, the combined container throughput of the ports of the three major cities in South
China was 66.11 million TEU, up 5.9% from last year, of which Shenzhen ports handled 25.25 million TEU, a
5.3% year-over-year growth. With hub ports for containers in South China, the Company responded to changing
shipping routes in an effective way by soliciting business from new routes and local sources to maintain stability
in business. The Company handled a total of 5.374 million TEU of containers throughout the year, up 2.9% from
last year and accounting for 21% of the Shenzhen market. In the meantime, the Company continued to forge
ahead with the “Internet + Smart Port” campaign to upgrade its comprehensive logistics services. In addition, the
Company’s ePort platform, a one-stop customer service system, went online, which would connect both the
upstream and downstream links for better services.
(2) Bulk cargo handling business
During the reporting period, China’s supply-side structural reform optimized production capacity and spurred
growth in imports of grain and fertilizers. During 2017, China imported 0.13 billion tons of grain, a 13.9%
year-over-year increase; and 9.17 million tons of fertilizers, up 10.2% from the year earlier. By seizing market
opportunities, the Company handled a total of 21.203 million tons of bulk cargos throughout the year, increasing
12.7% compared to last year.
With respect to grain and feedstuff handling, the Company adopted a business strategy of working on both
domestic and foreign trade and successfully attracted new clients by virtue of a keen sense of the market and
quality services. Meanwhile, the Company improved its port operation procedure for better efficiency and
furthered cooperation with clients to satisfy their various needs. As a result, the Company’s customer service
quality and local influence kept improving. During 2017, the Company’s grain and feedstuff throughput increased
9.4% from last year, of which the inbound data went up 13.0% on a year-over-year basis, solidifying the
Company’s position as a leading grain and feedstuff handling service provider, as well as priority ports for
handling imported and exported grain and feedstuff, in the Pearl River Delta.
As for fertilizer handling, by paying close attention to changes in the market and staying in close contact with
clients, the Company handled significantly more cargos from its core clients, attracted new potash clients,
restarted the bonded and re-exported calcium phosphate business which had stopped for over two years, and
handled an increasing quantity of exported urea and imported pure sodium carbonate. Additionally, the Company
offered customized, value-added support services to increase customer loyalty, and extended its rail-water gallery
for more business opportunities. During 2017, the fertilizers handled by the Company rose significantly by 40%
from last year, the compound fertilizer imports handled accounted for a 55% of the national market, and the
potash imports handled took up 9% nationwide, which have further secured the Company’s leading position on
the market.
7
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
(3) Support services and investment management
The Company’s business of support tow truck, tugboat, customs clearance and barge services operated well.
Earnings in this respect have risen as the Company also looked for income while ensuring the support services.
Meanwhile, the Company’s main joint ventures, including China Overseas Harbour Affairs (Laizhou) Co., Ltd.,
China Merchants Bonded Logistics Co., Ltd. and China Merchants Holdings (International) Information
Technology Co., Ltd., offered slightly lower returns to the Company compared to last year.
The Company’s primary business results are set out as follows:
Main business indicator 2017 2016 Change
Total throughput (thousand tons) 69,847 68,603 1.8%
Among which: Container throughput (thousand TEU) 5,374 5,222 2.9%
Bulk cargo throughput (thousand tons) 21,203 18,822 12.7%
Hours charged for tow trucks (thousand hours) 1,169 1,165 0.4%
Hours charged for tugboats (hour) 38,392 32,530 18.0%
During the reporting period, the Company carried out the tasks it had set out for the year, with its focus on lean
management for the purposes of better quality and efficiency of internal management. It improved the structure of
its Headquarters for a more professional division of functions, as well as for a more solid organizational and
human resources structure; further strengthened budgetary and performance management for more effective
internal control; made better use of its existing facilities and equipment through technical modification and
procedure reform, and enhanced resource allocation assessment and asset control, which have resulted in a
significantly higher ratio of resource utilization; and promoted integrated financial management to management
the liquidity of each entity within the Company in a more effective way, improve the debt structure and look for
the best financial outcome.
2. Outlook of the Company’s future development
(1) Outlook and trends of the industry
In 2018, with the continuing steady recovery of the world economy, the economic operation in China is predicted
to remain stable. In the future, while the inclination of the national policy towards the real economy is expected to
shore up the needs for goods trade, there are some unfavorable external conditions, such as the evolution of the
global trade and investment outlook and the trade protectionism raising its head. The positive trend of the shipping
industry is expected to be sustained, but we need to be cautiously optimistic since the imbalance between supply
and demand has not been solved from the root after going through the phased repair. The port industry has
generally maintained the development tendency of advancement in steady growth, and will enter the key
transformation phase from high-speed growth to high-quality development. However, the structural excess of the
industrial capacity and the slowed increase of demands are becoming normal and with the market-oriented reform
of the port charges, the port companies are faced with challenges in their profitability. It has become an inexorable
trend for the port companies to actively seek to transform from port operators to port comprehensive service
providers by making use of the Internet technology and the industrial integration opportunity.
In terms of container handling, the regional container transportation demands are expected to grow moderately.
Affected by factors such as the regional competition, the allied operation of shipping companies and the
adjustment of the regional urban planning, the Company faces great pressure in the growth of its container
business. The Company will closely follow up with the latest mergers and acquisitions of its customers, reinforce
the flexibility of the business negotiations and actively secure new routes, while initiating the berth upgrading
project and helping to push the expansion and dredging works of Tonggu Fairway and the construction of the
public fairway in the western port area so as to improve the hardware resource conditions at the port for sustained
stability of the container business.
As for bulk cargo handling, regional demand for grain, feedstuff and fertilizer is expected to keep growing. The
new bulk grain warehouse resource input, the bonded and transit businesses and the cultivation of new supply of
goods and new business forms will bring business growth opportunities to the Company. The Company will
follow closely the market and industrial policy changes and take positive business tactics. Meanwhile, it will
8
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
accelerate the upgrading of the berth and warehousing resources in Chiwan Port and the construction of the
warehousing facilities in Machong Port so as to enhance the overall resource capacity and ensure the steady
advancement of the business scale and the industrial position of bulk cargo handling.
(2) Development strategy
During the 13th Five-Year Plan period, focusing on the strategy vision of “Building the Regional 1st Level’s Port
Integrated Service Provider”, the Company sticks to the principle of “Based on Main Business of Port Service, Be
a Local Standard; Expand Comprehensive Service for Business Upgrade”. We strive to build a company featuring
excellent management, great efficiency, potential for sustained development and the ability to create constant
value for its shareholders, employees, customers and the society.
In the reporting period, we researched and formulated the implementation schemes for our strategic planning,
proposing the “123 Development Strategy”: sticking to one center - centered around innovation-driven, playing
the role of two platforms - the financing platform and the investment subject platform, and well establishing three
bases - the business development and innovation base, the technological support and incubation base and the
talent cultivation and reservation base.
The Company considers entering the ro-ro port warehousing market in the future and starting from the
ro-rologistics, gradually expand the domestic and even the overseas commercial vehicle ro-ro port businesses,
developing new business growth points other than container and bulk cargo handling businesses.
(3) Business plans for 2018
2018 is the first year of implementing the spirit of the 19th National Congress of the CPC. Faced with the
complicated market situation in the new age, the Company will vigorously respond to the challenges and seek to
achieve sound growth of its business results and profits. Our main business plans are as follows:
1) To focus on the operation of the port main business and expand the business scale advantage
We will closely follow the shipping market and industrial trend changes, take positive business tactics, develop
new supply of goods and new customers while maintaining the existing customers, and consolidate and further
enhance our market position in the regional port. Meanwhile, we will cultivate new business forms by combining
with the port main business, develop logistics value chain services and provide more breakthrough value-added
supporting businesses to achieve the stable growth of our business scale and profits.
2) To optimize resource allocation and improve resource guarantee capability
We will actively carry forward the construction of the Tonggu Fairway and the public fairway in the western port
area, speed up the upgrading of Berth 10# and 11# in Chiwan Port and Berth 5# in Mawan Port, and improve the
container navigating and berthing capabilities in the port. We will accelerate the construction of Berth 5# and 6#
in Chiwan Port and the warehousing upgrading in the port, the construction of the bulk grain warehouses in
Machong Port and the compound fertilizer surge bins, and improve the bulk cargo berthing and warehousing
capabilities in the port. We will intensify the optimized use of stock resources and establish the collaborative
sharing mechanism for the bulk cargo business resources in the two ports to fully enhance the resource guarantee
capability.
3) To base on lean management and innovation to promote quality and efficiency for internal management
Lean management and innovation will be pushed forward oriented by problems in the actual production and
operation. We will reinforce the system construction and the talent team building to strengthen the internal
management foundation; deepen the corporate culture and brand construction to enhance the Company’s soft
power for competition; specifically propel the major cost control, track and increase profit margins with long-term
effects; expedite the application of the Internet technology in ports to improve the management quality and
efficiency; focus on boosting the factorization of bulk cargo bagging, the optimization and promotion of the
intelligent tally system and the establishment of the staff incentive mechanism closely related to performance.
4) To intensify the investment expansion and drive our leaping management
We will keep looking for regional opportunities for resource integration and business expansion, and make use of
our financing platform and brand advantage, so as to further perfect and enlarge our business layout. Meanwhile,
we will adjust to the progress of the shareholders’ committed implementation of the horizontal competition and
vigorously seek opportunities to achieve the synergistic effect of capital and business, so as to improve our
integrated competitiveness and drive our leaping development.
9
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
5) Capital needs and use plan
The total investment on fixed assets of the Company in 2018 is planned to reach RMB 675,460,000, of which:
RMB 490,730,000 is for the investment on port warehousing projects; RMB 139,040,000 is for that on
mechanical equipment and technological upgrading projects; RMB 31,420,000 is for that on information projects;
and RMB 14,270,000 is for that on administrative, office and miscellaneous projects. The required funds of the
above capital expenditure are mainly from the cash inflow obtained from Company’s operation and the
borrowings from inter-bank market and financial institutions.
(4) Possible risks and countermeasures
1) External risks
The external risks mainly come from the uncertainty of the macroeconomic recovery and the increasingly fierce
competition among regional ports. As our main business is strongly external and the potential risk factors in the
macroeconomic recovery will bring negative effects to the container shipping market and the large bulk cargo
demands, we face major challenges in maintaining the stability of the port business; the port capacity supply is
excessive in the Pearl River Delta, leading to worsened homogeneous competition among ports, potential risks of
business segregation and increased pressure of decreasing port charge rates. Our investing companies are all in the
port, logistics or the related industries and face the same business fluctuation risks, thus resulting in the fluctuation
of our investment returns.
We attach importance to the research and estimation of the external operating environment, intensify the business
operation risk warning ability, plan in advance effective measures to actively respond to market changes and seek
opportunities among challenges to strive for the stability of the core business. We will further optimize the port
resource allocation, enhance our comprehensive competitiveness, reinforce our advantageous position within the
region and build an industrial benchmark enterprise. Meanwhile, we will strengthen our control on investments
and external expansion and balance the return risk fluctuation by expanding the business layout, innovating
business models and optimizing the profiting structure.
2) Internal risks
The internal risks mainly come from the increased operation costs and relatively onefold business structure. The
price of such production factors as land and labor continues to rise and the port operation costs go up rigidly,
causing narrowed corporate profit margins; our port loading and unloading businesses occupy a big proportion
with relatively single profiting source and thus, our business extension and expansion abilities are yet to be
improved.
We further develop and enhance the profits of using stock resources by continuing to advance the lean
management, increase our investment on scientific researches, focus on the technological innovation of techniques
and reduce the labor scale to achieve improved quality, efficiency and abilities. With our existing advantages, we
will base on our port main business, develop comprehensive port services and cultivate new profit growth points
to gradually transform from a conventional port operator to a comprehensive port service provider.
3. Significant changes in the main business in the reporting period
□ Yes √ No
4. Products contributing over 10% of the main business revenue or profit
□ Applicable √ Not applicable
5. Seasonal or periodic characteristics in the operating performance that need special attention
□ Yes √ No
10
The Abstract of the 2017 Annual Report of Shenzhen Chiwan Wharf Holdings Limited
6. Significant YoY changes in the operating revenues, operating costs and net profits attributable to the
common shareholders or their composition
□ Applicable √ Not applicable
7. Listing suspension or termination
□ Applicable √ Not applicable
8. Issues related to the financial report
(1) YoY changes in the accounting policy, accounting estimation and measurement methods
Compared with the financial statement of the previous year, the major changes in the Company’s accounting
policy are: On 28 April 2017, the Ministry of Finance published the Accounting Standards for Business
Enterprises No. 42 - Non-current Assets or Disposal Groups Held for Sale and Discontinued Operations; on 10
May 2017, the Ministry of Finance revised and published the Accounting Standards for Business Enterprises No.
16 - Government Subsidies; in accordance with the issuance requirements of the Ministry of Finance, we have
implemented the Standards No. 42 since 28 May 2017 and the Standards No. 16 since 12 June 2017.
Implementing the Standards No. 42 does not produce effects on the Company’s net loss/profits, total assets and
net assets of the current and previous periods; implementing the Standards No. 16 does not product any effect on
the Company’s net loss/profits, total assets and net assets of the current and previous periods.
(2) Retrospective restatements due to correction of significant accounting errors in the reporting period
□ Applicable √ Not applicable
No such cases
(3) YoY changes in the consolidation scope
Our Company signed the Supplementary Agreement to the MEDIA PORT INVESTMENTS LIMITED Shareholder
Agreement with China Merchants Port Holdings Co., Ltd. (the “CMPH”), FATTEN INVESTMENTS LIMITED
and MEDIA PORT INVESTMENTS LIMITED on 23 August 2017 in Shenzhen. After the signing of the
agreement, our Company will realize the control and consolidation of Shenzhen Mawan Wharf Co., Ltd.
("SMW"), SMP and Shenzhen Mawan Terminals Co., Ltd. ("SMT") (together referred to as "Mawan Companies").
For more details, please see the Connected Transaction Announcement on the Signing of Supplementary
Agreement to the MEDIA PORT INVESTMENTS LIMITED Shareholder Agreement (Announcement No.
2017-034) that we published on http://www.cninfo.com.cn on 25 August 2017.
As of the end of September 2017, we had completed the director appointment for MEDIA PORT
INVESTMENTS LIMITED and realized our control over Mawan Companies in form and nature. Based on the
related provisions of the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial
Statements, our Company has consolidated Mawan Companies since September 2017, and in accordance with the
requirements on company consolidation under the same control, has adjusted the opening balance of the
comparative financial statement and the amount of the same period for the previous year.
For and on behalf of the Board
Bai Jingtao
Chairman of the Board
Shenzhen Chiwan Wharf Holdings Limited
Dated 7 March 2018
11
