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深纺织B:2020年第三季度报告正文(英文版)2020-10-31  

                        Stock code: 000045,200045     Stock Abbreviation: Shen Textile A, Shen Textile B   Announcement No. :2020-48




                            Shenzhen Textile (Holdings) Co., Ltd.


                             The Third Quarterly Report 2020




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Shenzhen Textile (Holdings) Co., Ltd.                                                  The Third Quarterly Report 2020




                                                I Important Notice



The Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of the Company
hereby guarantees that there are no misstatement, misleading representation or important omissions in this report
and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof.


All the directors attended the board meeting for reviewing the Quarterly Report.


Mr.Zhu Jun, Person in charge of the Company, Mr. He Fei, Chief financial officer and the Ms. Mu Linying, the
person in charge of the accounting department (the person in charge of the accounting) hereby confirm the
authenticity and completeness of the financial report enclosed in this Quarterly Report.


This Report has been prepared in both Chinese and English, in case any discrepancy, the Chinese version shall
prevail.




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Shenzhen Textile (Holdings) Co., Ltd.                                                                      The Third Quarterly Report 2020




                                             II Basic Information of the Company



1. Main financial data and financial index
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √No
                                                                                                                       In RMB

                                            As at the end of the                                              Changed (%)over end of
                                                                            As at the end of last year
                                              reporting period                                                         prev. year

 Gross assets(Yuan)                              4,760,429,824.39                     4,531,399,885.99                              5.05%

 Net assets attributable to the
 shareholders of the listed                        2,754,887,410.53                     2,727,764,144.36                              0.99%
 company(Yuan)

                                                                                             Between beginning
                                                                    Increase/decrease
                                                                                              of the year to the      Changed (%)over
                                          Reporting period         over the same period
                                                                                              end of the report        end of prev. year
                                                                    of last year(%)
                                                                                                    period

 Operating revenue(Yuan)                   616,632,602.23                     -2.38%         1,472,945,950.97                     -10.21%

 Net profit attributable to the
 shareholders of the listed                   24,726,413.83                   172.89%               25,446,148.57                    50.63%
 company(Yuan)

 Net profit after deducting of
 non-recurring gain/loss
                                              20,780,909.95                 1,447.56%               13,662,964.52                   213.00%
 attributable to the shareholders
 of listed company(Yuan)

 Net cash generated from /used in
                                              85,768,341.55                    -67.35%            -49,851,133.68                    -117.40%
 operating activities(Yuan)

 Basic earning per share
                                                     0.0487                   173.60%                        0.0500                  51.06%
 (Yuan/Share)

 Diluted gains per share
                                                     0.0487                   173.60%                        0.0500                  51.06%
 (Yuan/Share)

 Weighted average return on
                                                      0.90%                     0.53%                        0.93%                    0.25%
 equity(%)
Items and amount of non-current gains and losses
√ Applicable □ Not applicable
                                                                                                                                       In RMB

                                                                         Amount (Year-beginning to
                                  Items                                     the end of the report                      Notes
                                                                                  period.)


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Shenzhen Textile (Holdings) Co., Ltd.                                                                   The Third Quarterly Report 2020


 Non-current asset disposal gain/loss (including the write-off
                                                                                         262,826.07
 part for which assets impairment provision is made)

 Govemment subsidy recognized in current gain and loss
 (excluding those closely related to the Company’s business and                      19,189,814.08
 granted under the state’s policies)

 Other non-operating income and expenditure except for the
                                                                                         -80,453.65
 aforementioned items

 Less: Amount of influence of income tax                                                 129,760.77

 Amount of influence of minority interests(After tax)                                7,459,241.68

 Total                                                                                11,783,184.05                   --

For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.


2. Total Shareholders and Shares Held by Top Ten Shareholders at the End of the Reporting Period
(1) About Total Common Shareholders, Total Preference Shareholders with the Voting Power Recovered and the
Shares Held by Top Ten Common Shareholders
                                                                                                 In shares
                                                                         Total preference
                                                                         shareholders with the voting
 Total number of common shareholders at the
                                                               29,807    power recovered at the end                                     0
 period-end
                                                                         of the reporting period (if
                                                                         any)

                                                Shares held by the top 10 shareholders

                                                         Share                           Amount of tradable      Pledging or freezing

 Shareholder name        Properties of shareholder     proportion        Quantity           shares with          Status of
                                                                                                                             Quantity
                                                           %                              Conditional held      the shares

 Shenzhen
 Investment              State-owned legal person         45.96%        234,069,436
 Holdings Co., Ltd.

 Shenzhen
 Shenchao
                         State-owned
 Technology                                                3.17%         16,129,032
                         Legal person
 Investment Co.,
 Ltd.


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Shenzhen Textile (Holdings) Co., Ltd.                                                                 The Third Quarterly Report 2020


 Sun Huiming           Domestic Nature person            0.63%        3,224,767

 Su Weipeng            Domestic Nature person            0.55%        2,823,066

 Deng Yan              Domestic Nature person            0.45%        2,277,700

 Dai Guangxia          Domestic Nature person            0.34%        1,720,600

 Wang Zhongjing        Domestic Nature person            0.33%        1,671,700

 Hou Xiulan            Domestic Nature person            0.32%        1,612,591

 Li Zengmao            Domestic Nature person            0.31%        1,590,097

 Shen Zhenxing         Domestic Nature person            0.29%        1,455,300

                                    Shareholding of top 10 shareholders of unrestricted shares

                                                           Quantity of unrestricted shares                     Share type
                Name of the shareholder                    held at the end of the reporting
                                                                                                         Share type           Quantity
                                                                       period

 Shenzhen Investment Holdings Co., Ltd.                                         234,069,436        RMB Common shares

 Shenzhen Shenchao Technology Investment Co., Ltd.                               16,129,032        RMB Common shares

                                                                                                   Foreign shares placed
 Sun Huiming                                                                      3,224,767
                                                                                                   in domestic exchange

 Su Weipeng                                                                       2,823,066        RMB Common shares

 Deng Yan                                                                         2,277,700        RMB Common shares

 Dai Guangxia                                                                     1,720,600        RMB Common shares

 Wang Zhongjing                                                                   1,671,700        RMB Common shares

 Hou Xiulan                                                                       1,612,591        RMB Common shares

 Li Zengmao                                                                       1,590,097        RMB Common shares

 Shen Zhenxing                                                                    1,455,300        RMB Common shares

                                                         Shenzhen    Shenchao     Technology        Investment    Co.,     Ltd.     is   a
                                                         wholly-owned subsidiary of Shenzhen Investment Holdings Co., Ltd.,
                                                         According to the decision of the State-owned Assets Supervision and
                                                         Administration    Commission         of    Shenzhen     Municipal        People's
                                                         Government, Shenzhen Shenchao Technology Investment Co., Ltd was
                                                         transferred to Shenzhen Major Industrial Investment Group Co., Ltd in
                                                         June 2019. Shenzhen Investment Holdings Co., Ltd and Shenzhen
 Related or acting-in-concert parties among
                                                         Shenchao Technology Investment Co., Ltd are both controlled by the
 shareholders above
                                                         State-owned Assets Supervision and Administration Commission of the
                                                         Shenzhen Municipal People's Government. Except this, the Company
                                                         did not whether there is relationship between the top ten shareholders
                                                         holding non-restricted negotiable shares and between the top ten
                                                         shareholders holding non-restricted negotiable shares and the top 10
                                                         shareholders or whether they are persons taking concerted action
                                                         defined in Regulations on Disclosure of Information about Shareholding



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Shenzhen Textile (Holdings) Co., Ltd.                                                      The Third Quarterly Report 2020


                                                    of Shareholders of Listed Companies.

 Explanation on shareholders participating in the   The Company Shareholder Dai Guangxia holds 200,600 shares of the
 margin trading business (if any)                   Company through stock account with credit transaction;

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
buy-back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
have no buy –back agreement dealing in reporting period.
(2) Total number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the
report period
□ Applicable √Not applicable




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Shenzhen Textile (Holdings) Co., Ltd.                                                           The Third Quarterly Report 2020




                                                   III Significant Events

1. Major changes of main accounting statement items and financial indicators in the reporting period, as
well as reasons for the changes
√ Applicable □ Not applicable
                                  September         January 1,2020
                                                                           Scale of
           Items                 30,2020(In           (In RMB                                      Causes of change
                                                                             change
                                 RMB10,000 )               10,000 )
Accounts receivable           53,008.74             36,532.50          45.10%         Due to the increase in sales of polarizers.
                                                                                      Due to the decrease in interest receivable in
Other receivables             806.66                1,244.08           -35.16%
                                                                                      the current period.
                                                                                      Due to the input tax to be deducted for
Other current assets          8,416.89              14,082.16          -40.23%
                                                                                      certification, transferred to the tax payable.
                                                                                      Due to the increased investment in the Line
Construction in progress      122,245.46            83,986.63          45.55%
                                                                                      7 project during the current period.
                                                                                      Due to the implementation of the "New
                                                                                      Income Standards" in the current period to
Advance receipt               1,883.22              3,053.01           -38.32%
                                                                                      reclassify this item to contract liabilities
                                                                                      and return the advance trade payment.
                                                                                      Due to the settlement and payment of
Taxes payable                 1,056.88              2,254.56           -53.12%        corporate income tax of the previous year
                                                                                      in this period.
                                                                                      Due to the loan for the newly added Line 7
Long term loan                25,460.00             0.00               -
                                                                                      project in this period.
                                                                                      Due to the fulfillment of restricted stock
Treasury stock                752.54                1,613.90           -53.37%
                                                                                      repurchase obligations.
Undistributed profit          7,475.39              4,930.78           51.61%         Due to profit during the reporting period.
                                                           Amount
                               Amount incurred
                                                     incurred in the
                                in the reporting                           Scale of
           Items                                    previous period                                  Causes of change
                                  period(In                                 change
                                                       (In RMB
                                 RMB10,000 )
                                                           10,000 )
                                                                                      Due to the increase in sales staff salaries,
Sales expense                 2,480.03              1,418.86           74.79%
                                                                                      transportation costs and sales service fees.

                                                                                      Due to increased research and development
R&D expense                   4,056.55              2,914.84           39.17%
                                                                                      efforts in this period.
                                                                                      Due to the decrease in interest income in
Financial expense             269.98                46.15              485.01%
                                                                                      this period.
                                                                                      Due to the increase in accounts receivable
Credit impairment loss        -926.57               844.72             -209.69%       in this period, the provision for bad debts
                                                                                      increased accordingly.
Operating profit              3,075.63              1,045.27           194.24%        The sales volume of polarizer products in


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Shenzhen Textile (Holdings) Co., Ltd.                                                 The Third Quarterly Report 2020


                                                                            the current period has increased
                                                                            significantly, and the growth rate of
                                                                            operating costs is significantly less than the
                                                                            growth rate of sales revenue..
Non-operating income                                                        Received insurance claims in the same
                              4.39           475.29           -99.08%       period last year, but none during the
                                                                            reporting period.
Non-perating expense                                                        During the reporting period, the tax owed
                              12.43          0.61             1937.70%      before repayment was none in the same
                                                                            period of the previous year.
Total profit                                                                The polarizer business has substantially
                              3,067.58       1,519.95         101.82%
                                                                            reduced losses.
Income tax expense                                                          Mainly because of the impact of the
                              869.90         1,550.21         -43.89%       epidemic, the profit of the property leasing
                                                                            business decreased.
Net profit                                                                  Mainly due to the increase in total profits
                              2,197.68       -30.27           7360.26%
                                                                            and the decrease in income tax expenses.
Net cash flow from                                                          The trade payment was recovered in the
operating activities          -4,985.11      28,653.27        -117.40%      same period of last year, but none in this
                                                                            period.
Net cash flows from                                                         During the reporting period, the funds
investing activities                                                        received from the recovery of wealth
                                                                            management investment were more than
                                                                            the funds paid for investment and wealth
                              -15,572.56     -67,821.70       77.04%
                                                                            management, while the funds paid for
                                                                            investment and wealth management in the
                                                                            same period last year were more than
                                                                            recovered.
Net cash flow from                                                          During the reporting period, bank loans
financing activities          24,368.10      -47,339.57       151.48%       were obtained, and bank loans were repaid
                                                                            in the same period last year.

2. The progress of significant events and influence, as well as the analysis and explanation on resolving
proposal.
√ Applicable □ Not applicable
(1) Matters concerning the Company's involving arbitration and the subsidiary’s' 2019 performance commitment
compensation
     On March 9, 2020, the company received the Notice of Arbitration (No.452 -2) from Shenzhen International
Arbitration Court and the Application for Arbitration submitted by Hangzhou Jinjiang Group Co., Ltd., which is
the applicant of this arbitration while the company is the respondent. Hangzhou Jinjiang Group Co., Ltd.
submitted the following arbitration requests: 1. The ruling made the following changes to the Cooperation
Agreement: (1) Delete the original Article 3.1 of the Cooperation Agreement and the relevant unfulfilled rights
and obligations will no longer be fulfilled (2) Delete the original Article 6.4 of the Cooperation Agreement, and
the relevant unfulfilled rights and obligations will no longer be fulfilled; 2. The respondent shall bear the


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Shenzhen Textile (Holdings) Co., Ltd.                                                   The Third Quarterly Report 2020


arbitration fee of the case and the actual expenses of the arbitral tribunal. The applicant reserves the right to
further modify the arbitration request.
      On March 9, 2020, the company received the Notice of Arbitration (No.452 -2) from Shenzhen International
Arbitration Court and the Application for Arbitration submitted by Hangzhou Jinjiang Group Co., Ltd., which is
the applicant of this arbitration while the company is the respondent. Hangzhou Jinjiang Group Co., Ltd.
submitted the following arbitration requests: 1. The ruling made the following changes to the Cooperation
Agreement: (1) Delete the original Article 3.1 of the Cooperation Agreement and the relevant unfulfilled rights
and obligations will no longer be fulfilled (2) Delete the original Article 6.4 of the Cooperation Agreement, and
the relevant unfulfilled rights and obligations will no longer be fulfilled; 2. The respondent shall bear the
arbitration fee of the case and the actual expenses of the arbitral tribunal. The applicant reserves the right to
further modify the arbitration request. For details, please refer to the Announcement of 2020-07 on the website of
http://www.cninfo.com.cn.
      On March 26, 2020, the company received the Notice on Extending the Time Limit Appointed by Arbitrators
(2020 SGZS No.452 -3) delivered by Shenzhen International Arbitration Court. Due to the complexity of the
dispute and the special epidemic background, the applicant needs extra time to negotiate and communicate the
procedural matters of the case with the respondent, so it applies to Shenzhen International Arbitration Court to
extend the time limit for appointing arbitrators in this case. Shenzhen International Arbitration Court believes that
the applicant's request is reasonable, and both parties are requested to notify Shenzhen International Arbitration
Court in writing of the arbitrator's appointment result before March 30, 2020. Therefore, the company shall
appoint an arbitrator before March 30, 2020 instead of within 15 days after receiving the arbitration notice on
March 9, 2020, and notify the Shenzhen International Arbitration Court of the results in writing. For details,
please refer to the Announcement of 2020-21 on the website of http://www.cninfo.com.cn.
      On April 17, 2020, the company received the Notice of Arbitral Tribunal Composition (2020 SGZS No.452-4)
from Shenzhen International Arbitration Court. Both parties to the arbitration informed Shenzhen International
Arbitration Court in writing of the results of arbitrator selection according to the arbitration procedure before
March 30, 2020, and appointed 1 arbitrator respectively and 1 chief arbitrator together. On April 16, 2020, the
arbitration tribunal was formed to hear the case.
      As of the disclosure date of this report, the company has entrusted a lawyer to submit evidence and materials
of this arbitration to the arbitration tribunal in accordance with the arbitration procedures, and submitted a letter of
invitation for the applicant to clarify the arbitration request and arrange the hearing. However, due to the epidemic,
the arbitration has not yet been held, and the time of the court session has yet to be scheduled. In view of the
company's involvement in the above arbitration and the uncertainty of the arbitration results, Jinjiang Group's
unfulfilled commitment to the company's subsidiary SAPO Photoelectric in 2019 is uncertain. The company will
continue to pay attention to the follow-up progress of this arbitration and fulfill its information disclosure
obligations in a timely manner.
(2) Progress of Transferring the Equity of Guanhua
      In order to further revitalize the Company's existing assets, concentrate resources on its main business and
stimulate the vitality of the enterprise, the Proposal on Transfer of 50.16% Equity of Shenzhen Guanhua Printing
and Dyeing Co., Ltd. was deliberated and passed at the 22nd meeting of the 7th Board of Directors and the 2nd
Extraordinary General Meeting in 2019. It was agreed that the Company would transfer 50.16% of Guanhua
equity held by the Company through public listing at a price of not less than 340,468,300 yuan in Shenzhen
United Property and Share Rights, which was approved by the state-owned assets management department for
filing. However, due to market reasons and changes in relevant conditions, after comprehensive consideration by
the Company, the shares of Guanhua are not listed on Shenzhen United Property and Share Rights Exchange, and


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Shenzhen Textile (Holdings) Co., Ltd.                                                 The Third Quarterly Report 2020


the Company planned to choose a suitable time to list within the validity period of the underlying equity
evaluation report (August 30, 2020) according to market conditions and in combination with the actual operation
of the Company. For details, please refer to the Announcement of 2019-55,2019-63 and 2019-71 on the website of
http://www.cninfo.com.cn.
      Due to market reasons and changes in relevant circumstances, the company did not publicly list and transfer
the equity of the target company on the Shenzhen United Property and Share Rights Exchange. As of the
disclosure date of this report, the evaluation report of Guanhua Company has passed its validity period (valid until
August 30, 2020). If the equity transfer continues to be implemented, a new asset evaluation will be required. In
view of the market reasons affected by the new crown pneumonia epidemic this year, combined with the
company's actual operating conditions, the Company, after careful consideration, plans to terminate the transfer of
50.16% of Guanhua's equity. On October 29, 2020, the thirty-third meeting of the seventh board of directors of the
company reviewed and approved the "Proposal on Terminating the Transfer of 50.16% Equity in Shenzhen
Guanhua Printing and Dyeing Co., Ltd.". Due to market reasons and changes in relevant circumstances, the
company agreed to terminate the case above, the proposal still needs to be submitted to the Company’s
shareholders meeting for deliberation. For the above content, please refer to the "Announcement on the
Termination of the Transfer of 50.16% Equity of Shenzhen Guanhua Printing and Dyeing Co., Ltd." (No. 2020-49)
of Juchao Information Network (http://www.cninfo.com.cn).
(3) Progress in subsidiaries participating in the establishment of industrial funds
      On November 16, 2017, the company's controlling subsidiary Shengbo Optoelectronic Co., Ltd signed the
Changxing Junying Equity Investment Partnership (Limited Partnership) Agreement with the fund manager
Huizhi Investment Management Co., Ltd, general partner Jinxin Investment Co., Ltd and other limited partners,
and co-sponsored the establishment of an industrial fund, focusing on the optical film industry chain related
projects related to the company's main business, with a fund size of RMB 50 million. SAPO as one of the limited
partners of the industrial fund, subscribed for a capital contribution of RMB 28.5 million. For details Juchao
Website:(http://www.cninfo.com.cn. (Announcement No.2017--55).
      On February 10, 2018, Changxing Junying Equity Investment Partnership completed the industrial and
commercial registration and completed the private equity investment fund registration on February 8, 2018. For
details Juchao Website:(http://www.cninfo.com.cn. (Announcement No.2018--05).
      As of September 30, 2020, Changxing Junying had accumulated 3 investment projects with a total
investment of RMB 42 million.
                                                                                      Fund contribution(In RMB
  No                                    Name                           Investment
                                                                                              10,000)

   1   Shenzhen Kaichuang Shijia Technology Co., Ltd.                 Optical Film                1,400
   2   Shenzhen shenfuyu Electronic Technology Co., Ltd.              Optical Film                1,300

   3   Shenzhen Hengbaoshun Technology Development Co., Ltd.          Optical Film                1,500
(4) The matter about the provision of guarantees for subsidiaries to apply for bank mortgage loans
     In order to meet the capital demand for the construction of Line 7 project, the 28th meeting of the 7th Board
of Directors reviewed and approved the Proposal on Subsidiaries Applying for Mortgage Loans from Banks and
the Proposal on Providing Guarantee for Subsidiaries' Mortgage Loans, and the Second Extraordinary General
Meeting of Shareholders in 2020 reviewed and approved the Proposal on Providing Guarantee for Subsidiaries'
Mortgage Loans, and agreed that SAPO will apply for a fixed asset loan of RMB 800 million from the syndicate
led by Shenzhen Branch of Bank of Communications Co., Ltd. with some of its self-held properties, with a term
of no more than 8 years, and the specific terms are subjected to “Syndicated Loan for the Industrialization Project

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Shenzhen Textile (Holdings) Co., Ltd.                                                          The Third Quarterly Report 2020


of Polarizers for Ultra-Large TVs (Line 7)" and "The Mortgage Contract for the Syndicated Loan for the
Industrialization Projects of Polarizers for Ultra-large TVs (Line 7)" signed by SAPO and the lender; it is agreed
that the Company will provide joint liability guarantee to the above syndicate for 60% of the total debts of SAPO
under the above project loans, of which the principal amount of the secured creditor's rights is RMB 480 million,
and the legal representative of the company or its authorization is authorized Represent the company in handling
the above guarantee matters and sign the guarantee contract and any other documents related to this guarantee. For
details, please refer to Announcement Nos. 2020-18, 2020-19 and 2020-22 on cninfo (http://www.cninfo.com.cn).
As of the date of the disclosure of this report, the company has signed the "Guarantee Contract for Syndicated
Loans for the Industrialization Project of Polarizers for Ultra-large TVs (Line 7)" with Bank of Communications
Co., Ltd. Shenzhen Branch, the guarantee agent of the syndicate. For details, please refer to the "Announcement
on the Progress of the Company's Provision of Guarantees for Subsidiaries" (No. 2020-46) on
cninfo(http://www.cninfo.com.cn) on October 24, 2020.


              Announcement                         Date of disclosure                      Website for disclosure

Matters concerning the Company's                                            http//www.cninfo.com.cn. Announcement
                                            March 11,2020
involving arbitration for its                                               No.2020-07
subsidiary’s 2019 performance                                              http//www.cninfo.com.cn. Announcement
                                            March 28,2020
commitment compensation                                                     No.2020-21

                                                                            http//www.cninfo.com.cn. Announcement
                                            March 18,2020
                                                                            No.2020-18

Matters concerning the Company                                              http//www.cninfo.com.cn. Announcement
                                            March 18,2020
providing guarantee for its                                                 No.2020-19

subsidiary’s bank mortgage loans                                           http//www.cninfo.com.cn. Announcement
                                            April 7,2020
applied.                                                                    No.2020-22

                                                                            http//www.cninfo.com.cn. Announcement
                                            October 24, 2020
                                                                            No.2020-46

Matters concerning the equity transfer of                                   http//www.cninfo.com.cn. Announcement
                                            October 31, 2020
Guanhua                                                                     No.2020-49

Progress in the implementation of share repurchase
□ Applicable √Not applicable
Progress in the implementation of the reduction of the repurchased shares by means of centralized bidding
 Applicable √Not applicable

3. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer,
directors, supervisors, senior executives or other related parties in the reporting period and commitments
unfinished in implementation at the end of the reporting period
√Applicable □Not applicable
                          Commit                                                           Time of
                                                                                                       Period of
      Commitment           ment     Type                       Contents                    making                    Fulfillment
                                                                                                      commitment
                           maker                                                         commitment

Commitment on share       Shenzhe Share     As Shenzhen Investment Holdings Co., Ltd., August 4,      Sustained     Under

                                                                                                                               11
Shenzhen Textile (Holdings) Co., Ltd.                                                                      The Third Quarterly Report 2020


reform                      n         reducti the controlling shareholder of the company,           2006        and effective Fulfillment
                            Investm on         committed when the restricted-for-sale shares
                            ent       commit from the shares restructuring were listed for
                            Holding ment       circulation in the market: i. if they plan to sell
                            s Co.,             the shares through the securities exchange
                            Ltd.               system in the future, and the decrease of the
                                               shares they hold reaches 5% within 6 months
                                               after the first decrease, they will disclose an
                                               announcement indicating the sale through the
                                               company within two trading days before the
                                               first decrease; ii. They shall strictly observe
                                               the “Guidelines on Transfer of
                                               Restricted-for-sale Original Shares of Listed
                                               Companies” and the provisions of the
                                               relevant business principles of Shenzhen
                                               Stock Exchange.

Commitment in the
acquisition report or the
report on equity changes

Commitment made upon
the assets replacement

                                               Shenzhen Investment Holdings Co., Ltd.
                                               signed a “Letter of Commitment and
                                               Statement on Horizontal Competition
                                               Avoidance” when the company issued
                                      Commi non-public stocks in 2009. Pursuant to the
                                      tments Letter of Commitment and Statement,
                                      on       Shenzhen Investment Holdings Co., Ltd. and
                                      horizon its wholly owned subsidiary, subsidiaries
                            Shenzhe
                                      tal      under control or any other companies that
                            n
                                      compet have actual control of it shall not be involved
                            Investm
Commitments made                      ition,   in the business the same as or similar to those October 9,       Sustained    Under
                            ent
upon issuance                         related Shenzhen Textile currently or will run in the         2009        and effective Fulfillment
                            Holding
                                      transac future, or any businesses or activities that
                            s Co.,
                                      tion     may constitute direct or indirect competition
                            Ltd.
                                      and      with Shenzhen Textile; if the operations of
                                      capital Shenzhen Investment Holdings Co., Ltd. and
                                      occupa its wholly owned subsidiaries, subsidiaries
                                      tion     under control or other companies that have
                                               actual control of it compete with Shenzhen
                                               Textile in the same industry or contradict the
                                               interest of the issuer in the future, Shenzhen
                                               Investment Holdings Co., Ltd. shall urge such



                                                                                                                                            12
Shenzhen Textile (Holdings) Co., Ltd.                                                                  The Third Quarterly Report 2020


                                            companies to sell the equity, assets or
                                            business to Shenzhen Textile or a third party;
                                            when the horizontal competition may occur
                                            due to the business expansion concurrently
                                            necessary for Shenzhen Investment Holdings
                                            Co., Ltd. and its wholly owned subsidiaries,
                                            subsidiaries under control or other companies
                                            that have actual control of it and Shenzhen
                                            Textile, Shenzhen Textile shall have priority.

                                            The commitments during the period
                                            non-public issuance in 2012: 1. Shenzhen
                                            Investment Holdings, as the controlling
                                            shareholder of Shenzhen Textile, currently
                                            hasn't the production and business activities
                                            of inter-industry competition with Shenzhen
                                            Textile or its share-holding subsidiary. 2.
                                            Shenzhen Investment Holdings and its
                                            share-holding subsidiaries or other enterprises
                                            owned the actual control rights can't be
                                   Commi directly and indirectly on behalf of any
                                   tments person, company or unit to engage in the
                                   on       same or similar business in any districts in the
                                   horizon future by the form of share-holding, equity
                         Shenzhe
                                   tal      participation, joint venture, cooperation,
                         n
                                   compet partnership, contract, lease, etc., and ensure
                         Investm
                                   ition,   not to use the controlling shareholder's status July 14,        Sustained    Under
                         ent
                                   related to damage the legitimate rights and interests       2012         and effective Fulfillment
                         Holding
                                   transac of Shenzhen Textile and other shareholders,
                         s Co.,
                                   tion     or to gain the additional benefits. 3. If there
                         Ltd.
                                   and      will be the situation of inter-industry
                                   capital competition with Shenzhen Textile for
                                   occupa Shenzhen Investment Holdings and its
                                   tion     share-holding subsidiaries or other enterprises
                                            owned the actual control rights in the future,
                                            Shenzhen Investment Holdings will promote
                                            the related enterprises to avoid the
                                            inter-industry competition through the
                                            transfer of equity, assets, business and other
                                            ways. 4. Above commitments will be
                                            continuously effective and irrevocable during
                                            Shenzhen Investment Holdings as the
                                            controlling shareholder of Shenzhen Textile
                                            or indirectly controlling Shenzhen Textile.

Equity incentive         Shenzhe Other      1.The company undertakes not to provide            November     December     Under

                                                                                                                                        13
Shenzhen Textile (Holdings) Co., Ltd.                                                             The Third Quarterly Report 2020


commitment                  n         commit loans, loan guarantees, and any other forms of 27,2017    27,2021      Fulfillment
                            Textile( ment     financial assistance to the incentive objects
                            Holding           for obtaining the restricted stocks in the
                            s) Co.,           incentive plan; 2. The company undertakes
                            Ltd.              that there is no circumstance that the stock
                                              incentive shall be prohibited as stipulated in
                                              the provisions of Article 7 of the “Measures
                                              for the Management of Stock Incentives of
                                              Listed Companies”.

Other commitments
made to minority
shareholders

Executed timely or not? Yes

If the commitments
failed to complete the
execution when expired,
should specifically
                            Not applicable
explain the reasons of
unfulfillment and the net
stage of the working
plan

4. Financial asset investment
(1) Investment in securities
□ Applicable √ Not applicable
No securities investment during the report period.
(2) Investments in derivatives
□ Applicable √ Not applicable
No derivative investment during the report period.

V. Progress of investment projects with raised funds
       Progress of polarizer industrialization project for ultra-large TV (Line 7)
     In order to meet the needs of downstream panel customers, improve the overall production efficiency of Line
7 project and enhance the competitiveness of the enterprise, SAPO Photoelectric, a subsidiary, increases its
investment by 147.2 million yuan to build one RTP production line and 2 RTS production lines, with its own
funds and bank loans. For details, please refer to Announcement No.2020-25 of CNInfo
(http://www.cninfo.com.cn).
     As of the disclosure date of this report, the Line 7 project has completed the capping of the main plant and
the manufacturing of extension equipment. Affected by the Coronavirus epidemic, due to labor shortages,
insufficient supply of engineering materials and equipment, transportation restrictions, etc., the construction of the
Line 7 project was not fully resumed until mid-March 2020. The company further strengthened the monitoring
and management of budget, schedule, quality and other aspects, rearranged the construction time node, and is
currently carrying out the purification and decoration engineering construction and the installation of extension


                                                                                                                                  14
Shenzhen Textile (Holdings) Co., Ltd.                                                        The Third Quarterly Report 2020


machine equipment. It is planned to complete the main machine equipment debugging in March 2021, and start
the trial production.
      During the reporting period, the Company has prudently demonstrated that it will invest 147.2 million yuan
in the construction of 1 RTP production line and 2 RTS production lines on the Line 7 project. The source of funds
is its own funds and bank loans. The main reasons for this increase in investment are first to meet the needs of
downstream panel customers and enhance the depth of customer cooperation; second, to help improve the overall
production efficiency of the Line 7 project, simplify the production process, and effectively reduce production
costs; third, to further improve Enterprise competitiveness provides guarantee for the successful operation of Line
7 project. For the above details, please refer to the "Announcement on the Increase of Investment and
Construction Progress in the Industrialization Project of Polarizers for Ultra-large TVs (Line 7)" on cninfo
(http://www.cninfo.com.cn) on April 30, 2020. (No. 2020-25). As of the disclosure date of this report, the
company has built one RTP production line, and the RTP equipment production is in progress. It is expected to
achieve mass production in Q3 of 2021; one RTS production line is already under construction and is expected to
achieve mass production in Q3 of 2021.
     As of Sep. 30,2020, the total investment contract amount of the Line 7 project was 1,573.4259 million yuan,
and the actual paid-in investment was 1,347.7947 million yuan (with raised funds of 409.9510 million yuan, and
its own funds and government funds of 937.8437 million yuan used).
6. Forecast of 2020 business performance
A warning and explanation of the reason for predicting that the cumulative net profit from the beginning of the
year to the end of the next reporting period may be a loss or a significant change compared with the same period
of the previous year
□ Applicable √Not applicable

7. Major contracts for daily operations
□ Applicable √Not applicable

8. Entrusted Financial Management
√ Applicable □ Not applicable
                                                                                                                  In RMB 10,000

 Type                              Source            Amount                  Unexpired balance           Overdue amount

 Bank financing product            Self fund                        77,900                   19,000                          0

 Others                            Self fund                        51,500                   51,500                          0

 Total                                                             129,400                   70,500                          0

Specific Circumstance of Trust Investment which is Large in single amount, low insecurity, poor in liquidity or
unguaranteed in high risk
√ Applicable □ Not applicable
                                                                                                                  In RMB10,000
Name      Type     Pr     Amou    Ca    Star   Exp   Fun    Me    Refer   Exp    Act    The      Amo       W      Whet     Summ
of        of       od     nt      pit   t      iry   ds     tho   ence    ecte   ual    actual   unt       het    her      ary of
Truste    Truste   uc             al    Dat    Dat   All    d     Annu    d      prof   recov    of        her    there    events
e         e        t              So    e      e     oca    of    alize   Inco   it     ery of   provi     pas    is any   and
Organ     Organ    Ty             ur                 tion   Re    d       me     and    profit   sion      sed    entru    relate
izatio    izatio   pe             ce                        war   Rate    (if    loss   and      for       the    sted     d
n (or     n (or                                             d     of      any)   duri   loss     impa      stat   finan    search

                                                                                                                              15
Shenzhen Textile (Holdings) Co., Ltd.                                                               The Third Quarterly Report 2020


Truste   Truste                                             Det       Retur          ng     durin      irme     uto   cial     index
e        e)                                                 erm       n              the    g the      nt (if   ry    plan     (if
Name                                                        inat                     repo   report     any)     pro   in the   any)
)                                                           ion                      rtin   ing                 ced   future
                                                                                     g      perio               ure
                                                                                     peri   d
                                                                                     od
                                                            Re
SPD                                                         pay
                                                     Ban
Bank.             Str                                       me
                                        Feb          k
Fengh             uc                          Aug           nt o                            Rede
                                  Se    rua          fina
uang              tur                         ust           f pr                            mptio                     Not
                                  lf    ry           nci               3.85          539.                       Ye
Buildi   Bank     al    28,000                3,            inci              539           n at                      appli
                                  fu    5,           al                  %            54                        s
ng                de                          202           pal                             matur                     cable
                                  nd    202          pro
Sub-              po                          0             and                             ity
                                        0            duc
Branc             sit                                           int
                                                     ts
h                                                           ere
                                                            st

                                                            Re
SPD                                                         pay
                                                     Ban
Bank.             Str                                       me
                                              Sept   k
Fengh             uc                    Ma                  nt o                            Rede
                                  Se          emb    fina
uang              tur                   rch                 f pr                            mptio                     Not
                                  lf          er     nci               3.85   233.   233.                       Ye
Buildi   Bank     al    12,000          12,                 inci                            n at                      appli
                                  fu          14,    al                  %     57     57                        s
ng                de                    202                 pal                             matur                     cable
                                  nd          202    pro
Sub-              po                    0                   and                             ity
                                              0      duc
Branc             sit                                           int
                                                     ts
h                                                           ere
                                                            st

                                                            Re
                                                            de
                                                            mpt
China
                                                            ion
South                                                Pub
                  M                     Sep                 on
ern                                           Oct    lic
                  on              Se    tem                 T
Asset    Fund                                 ober   fun                                                              Not
                  eta             lf    ber                 day        2.20                 Unex                Ye
Mana     comp           30,500                29,    d                                                                appli
                  ry              fu    8,                  ,            %                  pired               s
geme     any                                  202    pro                                                              cable
                  Fu              nd    202                 arri
nt                                            0      duc
                  nd                    0                   val
Co.,                                                 ts
                                                            on
Ltd.
                                                            T+
                                                            1
                                                            day

China    Fund     M               Se    Sep   Oct    Pub    Re         2.20                 Unex                Ye    Not
                        12,000
South    comp     on              lf    tem   ober   lic    de           %                  pired               s     appli

                                                                                                                                   16
Shenzhen Textile (Holdings) Co., Ltd.                                                               The Third Quarterly Report 2020


ern      any      eta             fu    ber   29,      fun      mpt                                                  cable
Asset             ry              nd    15,   202      d        ion
Mana              Fu                    202   0        pro      on
geme              nd                    0              duc      T
nt                                                     ts       day
Co.,                                                            ,
Ltd.                                                            arri
                                                                val
                                                                on
                                                                T+
                                                                1
                                                                day

                                                                              772.   773.
Total                   82,500    --     --       --    --          --   --                    --               --     --       --
                                                                               57     11

Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may
result in impairment
□ Applicable √ Not applicable

9. Violation of external guarantees
□ Applicable √Not applicable
The Company has no external guarantee get out of the line in the Period

10. Controlling shareholder and its related parties occupying non-business capital of the listed company
□ Applicable √Not applicable
There are no controlling shareholder and its related parties occupying non-business capital of the listed company
in Period.
11. Registration form for receiving research, communication, interviews and other activities during the
reporting period
□ Applicable √Not applicable
The company did not receive research, communication, interviews and other activities in Period.



                                                             The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd.


                                                                                            October 31,2020




                                                                                                                                     17