Shandong Airlines Co., Ltd. Summary of Annual Report for 2011
Shandong Airlines Co., Ltd.
Summary of Annual Report 2011
§1. Important Notice
1.1 Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Shandong Airlines Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are
no any fictitious statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of
the whole contents.
The summary of Annual Report 2011 is abstracted from the Annual Report; and full text of the
Annual Report is published on Internet website http://www.cninfo.com.cn in the mean time. The
investors are suggested to read the full text of annual report to get more details.
1.2 Other directors all attend the meeting except the followed list:
Name of absent Entrusted
Position of absentee Reasons for absent
director person
Wang Mingyuan Director Business Ma Chonxian
1.3 Reanda Certified Public Accountants has audited the Annual Financial Report and issued
standard unqualified Auditors’ Report for the Company.
1.4 Zhang Xingfu, Principal of the Company; Xu Guojian, Person in Charge of Accounting Works;
Wang Wuping, Person in Charge of Accounting Organ(Accounting Supervisor) hereby confirm that
the Financial Report of the Annual Report is true and complete.
§2. Company Profile
2.1 Basic information
Short form of the stock Shanhang B
Stock code 200152
Listed stock exchange Shenzhen Stock Exchange
2.2 Contact person and method
Authorized Representative in Charge
Secretary of the Board of Directors
of Securities Affairs
Name Dong Qiantang Fan Peng
19/F, SDA Building, No. 5746, Er 8/F, SDA Building, No. 5746, Er
Contact address
Huan East Road, Jinan, Shandong Huan East Road, Jinan, Shandong
Telephone 0531－85698229 0531－85698678
Fax 0531－85698679 0531－85698679
E-mail dongqt@shandongair.com.cn fanp@shandongair.com.cn
§3. Summary of Accounting Data and Financial Indexes
3.1 Major accounting data
Unit: RMB
Increase/decrease in this
2011 2010 year compared with that 2009
of last year (%)
Total operating
9,666,969,745.20 7,292,615,957.10 32.56% 5,366,113,363.68
income (RMB)
Operation profit
993,953,929.71 823,686,010.62 20.67% 261,760,990.12
(RMB)
Total profit (RMB) 1,031,016,217.61 844,544,446.68 22.08% 403,361,305.82
Net profit 771,225,549.05 634,364,547.92 21.57% 302,282,325.68
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Shandong Airlines Co., Ltd. Summary of Annual Report for 2011
attributable to
shareholders of the
listed company
(RMB)
Net profit
attributable to
shareholders of the
listed company 751,635,820.83 625,449,962.16 20.18% 203,597,306.19
after deducting
non-recurring gains
and losses (RMB)
Net cash flow
arising from
2,245,050,664.90 1,675,078,629.81 34.03% 1,317,347,150.42
operating activities
(RMB)
Increase/decrease at the
end of this year compared
At the end of 2011 At the end of 2010 At the end of 2009
with that at the end of last
year (%)
Total assets (RMB) 9,772,985,545.97 8,923,799,368.85 9.52% 8,096,403,730.75
Total liability
7,723,740,626.16 7,503,677,927.17 2.93% 7,230,857,576.50
(RMB)
Owners’ equity
attributable to
shareholders of the 2,049,244,919.81 1,406,659,169.90 45.68% 852,294,621.98
listed company
(RMB)
Total share capital
400,000,000.00 400,000,000.00 0.00% 400,000,000.00
(Share)
3.2 Major financial indexes
Unit: RMB
Increase/decrease this
2011 2010 year compared with 2009
that last year (%)
Basic earnings per share
1.93 1.59 21.57% 0.76
(RMB/Share)
Diluted earnings per share
1.93 1.59 21.57% 0.76
(RMB/Share)
Basic earnings per share
after deducting
1.88 1.56 20.18% 0.51
non-recurring gains and
losses (RMB/Share)
Weighted average return 11.79 percentage d
45.05% 56.84% 43.11%
on equity (%) own
Weighted average return
on equity after deducting 12.14 percentage
43.90% 56.04% 29.04%
non-recurring gains and down
losses (%)
Net cash flow arising
from operating activities 5.61 4.19 34.03% 3.29
per share (RMB/Share)
Increase/decrease at
At the end of 2011 At the end of 2010 the end of this year At the end of 2009
compared with that at
the end of last year
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Shandong Airlines Co., Ltd. Summary of Annual Report for 2011
(%)
Net asset per share
attributable to shareholders of
5.12 3.52 45.68% 2.13
listed company
(RMB/Share)
5.06 percentage
Asset-liability ratio(%) 79.03% 84.09% 89.31%
down
3.3 Items of non-recurring gains and losses
√Applicable □Inapplicable
Unit: RMB
Note(If
Items of non-recurring gains and losses Amount of 2011 Amount of 2010 Amount of 2009
applicable)
Gains and losses from the disposal of
-9,599,890.07 -7,700,920.17 2,758,500.92
non-current asset
Governmental subsidy calculated into Government route
current gains and losses, while closely subsidy and others
related with the business of the
Company, excluding the fixed-amount 21,698,008.50 16,013,518.70 135,213,761.47
or fixed-proportion governmental
subsidy according to the unified national
standard
Losses/gains from changes of fair values
occurred in holding transaction financial
assets and transaction financial liabilities,
and investment income obtaining from
the disposal of transaction financial
-10,862,464.69 -8,872,312.71 -10,020,739.69
assets and transaction financial liabilities
and financial assets available for sales,
excluded effective hedging business
relevant with normal operations of the
Company
Other non-operating income and Other non-operating
expenditure except for the 24,964,169.47 income/expenditure 12,545,837.53 3,628,053.31
aforementioned items
Effect of income tax -6,751,319.93 -3,071,587.08 -32,894,894.00
Effect of equity of minority shareholders 141,224.94 49.49 337.48
Total 19,589,728.22 8,914,585.76 98,685,019.49
§4. Particulars about Shareholders and controlling block diagram
4.1 Statement of shares held by top 10 shareholders and top 10 circulated shareholders
Unit: Share
Total shareholders at one
Total shareholders at
18,512 month-earlier of the date for 18,318
year-end of 2011
annual report disclosed
Particulars about shares held by the top ten shareholders
Number of share
Nature of Non-circulating
Full name of Shareholders Proportion Shares held pledged/
shareholders shares
frozen
SHANDONG AVIATION State-owned
42.00% 168,004,000 168,004,000 0
GROUP legal person
State-owned
AIR CHINA LIMITED 22.80% 91,200,000 91,200,000 0
legal person
Domestic
Yao Ming 0.57% 2,288,700 0 0
natural person
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Shandong Airlines Co., Ltd. Summary of Annual Report for 2011
GUOTAI JUNAN
Foreign legal
SECURITIES(HONGKO 0.56% 2,250,532 0 0
person
NG) LIMITED
Foreign
Chen Tianming 0.40% 1,590,322 0 0
natural person
Domestic
Chen Jingjian 0.34% 1,378,200 0 0
natural person
Foreign
HUANG LIU LIA 0.23% 918,917 0 0
natural person
Domestic
Ou Yanping 0.23% 903,343 0 0
natural person
WANXIANG
INTERNATIONAL Foreign legal
0.21% 833,300 0 0
INVESTMENT person
CORPORATION
Domestic
Ye Qufa 0.20% 809,600 0 0
natural person
Particulars about shares held by the top ten shareholders of circulation share
Full name of the shareholders Circulating shares held Type of shares
Yao Ming 2,288,700 Domestically listed foreign share
GUOTAI JUNAN
2,250,532 Domestically listed foreign share
SECURITIES(HONGKONG) LIMITED
Chen Tianming 1,590,322 Domestically listed foreign share
Chen Jingjian 1,378,200 Domestically listed foreign share
HUANG LIU LIA 918,917 Domestically listed foreign share
Ou Yanping 903,343 Domestically listed foreign share
WANXIANG INTERNATIONAL
833,300 Domestically listed foreign share
INVESTMENT CORPORATION
Ye Qufa 809,600 Domestically listed foreign share
Bao Xiuzhen 800,000 Domestically listed foreign share
JOHN POSS 748,300 Domestically listed foreign share
1. Shandong Aviation Group is the first largest shareholder of the Company, who holds
the shares of the Company on behalf of the State with unlisted shares.
2. Air China Limited is the second largest shareholder of the Company, who holds the
shares of the Company on behalf of the State with unlisted shares; Air China is the first
largest shareholder of SDA and the actual controller of the Company.
Explanation on associated 3. Among the above the top ten shareholders, Air China, shareholders of state-owned
relationship or accordant legal person’s share, is the first largest shareholder of the SDA, and there exists no
action among the aforesaid associated relationship between SDA and Air China and the other shareholders, and
shareholders they don’t belong to the consistent actionist regulated by the Management Regulation of
Information Disclosure on Change of Shareholding for Listed Companies with the other
shareholders. The Company is not aware of their associated relationship among the
other shareholders of circulation share, whether belongs to the consistent actionist
regulated by the Management Regulation of Information Disclosure on Change of
Shareholding for Listed Companies.
4.2 Property right and controlling relationships between the actual controller of the Company
and the Company is as follows:
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Shandong Airlines Co., Ltd. Summary of Annual Report for 2011
Shandong Aviation Group
42%
Shandong Airlines Co., Ltd.
§5. Report of the Board of Directors
5.1 Discussion and analysis by the management team
The year 2011 represented a key period for the Company, during which, the Company was dedicated
to consolidating its foundation and fostering its new advantage in scientific development. During the
reporting period, with extensive supports from its shareholders, the Company adopted adequate
measures to reflect both changes in internal and external environment when managing the
implementation of its eight strategies, focusing on upgrade of abilities in five aspects. Particularly,
the Company made overall planning with layout on a systematic basis, conducted coordinative
progresses, carried out each of its strategies in full, maintained stable safety production, continued to
improve operation quality, realized a new record as to its efficiency, achieved positive service
development, and strengthened infrastructure management steadily, representing a good opening for
its developing strategy capitalizing the opportunities brought by the 12th Five-Year Plan.
1. Executed the safety management system and kept flat safety production
In 2011, the safety flight amounted to 199,000 hours and 107,200 flights, representing increases of
15.8% and 13.2% respectively as compared to the same period of last year. The Company continued
to maintain the overall safety on a stable basis, without any safety threat arising from transportation
accident due to the carelessness of the Company. In addition, the Company also reinforced
application of SMS platform, improved data process procedure on such platform, and expressly
standardized date category and process procedure thereof. Supervision and review on date feedback
were also stressed, making the data feedback rate reaching 96.4%. The Company focused on
management over core segments and safety monitor, so as to strengthen monitor on flight quality.
The flight legs under monitor were 107,000 in aggregate, with monitor rate of 99.8%, representing an
increase of 0.51 percentage points. Besides, the Company completed the supplementary review
(CCAR-121-R4) conducted by Civil Aviation Administration of China, the 3rd IOSA review and the
safety audit on wet lease operation of Air China.
2. Reinforced system management and continued to improve operation quality
The Company conducted further special reform on flight delay, aiming to improve management of
flight punctuality. In specific, it was clearly determined on the classification for major airports and
relevant reforming standards, and on establishment of flight alarming system and coordination
working mechanism. Moreover, the Company even prepared the rehearsal scheme in case of vast
flight delay, so as to get more capable of dealing with delay issues. In 2011, the average flight
punctuality rate was 79.68%, ranking the second among all civil aviation operators. Dedicated efforts
were also made in increasing operational foundation security and improving management on
operation control. By application of new technologies, the Company successfully commenced
construction for nine operation control projects. By application of remote release system, the
Company increased 22 new remote release airports, making the coverage of such kind of airports
amounting to 82%. The Company increased guarantee on flight intelligence by upgrading the service
system for flight intelligence.
3. Optimized allocation for core assets and achieved a new record as to its efficiency
In 2011, the transportation turnover volume provided by the Company totaled to 1,444,000,000
ton-kilometer, carrying passengers of 11,186,000 people and freights of 114,300 tons in total,
representing increases of 22.6%, 19.7% and 14.5% as compared to the same period of last year. The
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Shandong Airlines Co., Ltd. Summary of Annual Report for 2011
Company recorded operation income of RMB 9.667 billion (representing an increase of 32.56% as
compared to the same period of last year), total profit of RMB 1.031 billion (representing an increase
of 22.08% as compared to the same period of last year), net profit of RMB 0.771 billion (representing
an increase of 21.46% as compared to the same period of last year) and total assets of RMB 9.773
billion (representing an increase of 9.52% as compared to the same period of last year), respectively.
4. Established healthy service management system, bringing normal operation for service
development
Through improving service management system and upgrading service management capability, the
Company realized stable operation of each of its service indexes and obvious improvement in several
key service indexes. In addition, the Company stressed on construction of service standard system,
under which, it prepared the service standards in respect of 11 aspects on customer level and
conducted overall business management procedure on its management level. It issued 15 detailed
provisions on inter-group procedures and 5 procedure documents such as Supervision and Review on
Service Quality. The Company also emphasized on brand building and brand connotation.
Particularly, the Company made a painting aircraft under the name of “Air Asian Beach” by virtue of
the cooperation platform provided by the material partner Asian Beach Games, so as to carry out its
sports marketing. Besides, the Company also participated in shooting the film Recovery of Beichuan,
successfully making the brand of Shandong Airlines being familiar by TV audiences. The Company
was awarded again as the Top 500 Most Valued Brands in China by virtue of its brand value of RMB
8655 million, ranking 147 of such 500 brands (representing 3 positions upward as compared to the
last ranking and an increase of RMB 2617 million in brand value).
5.2 Statement of main operations classified according to industries or products
Unit: RMB’0000
Main operations classified according to industries
Increase/decre
Increase/decre Increase/decrea
ase in income
ase in cost of se in gross
Gross profit from
Classified according Income from Cost of operations profit ratio
ratio operations
to industries operations operations over the last over the last
(%) over the last
year year
year
(%) (%)
(%)
Aviation transportation Up 0.2 percentage
service 952,367.52 722,898.47 24.09% 32.77% 32.41% point
Logistics transportation Down 16.18
service 801.19 277.32 65.39% -40.11% 12.49% percentage point
Down
Hotel and food service 12.76percentage
2,308.14 2,185.00 5.33% -9.18% 4.97% point
Down
Training service 6.01percentage
1,733.33 703.24 59.43% 277.47% 343.13% point
Main operations classified according to products
Increase/decre
Increase/decre Increase/decrea
ase in income
ase in cost of se in gross
Gross profit from
Classified according Income from Cost of operations profit ratio
ratio operations
to products operations operations over the last over the last
(%) over the last
year year
year
(%) (%)
(%)
Aviation transportation Up 0.2 percentage
service 952,367.52 722,898.47 24.09% 32.77% 32.41% point
Logistics transportation Down 16.18
service 801.19 277.32 65.39% -40.11% 12.49% percentage point
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Shandong Airlines Co., Ltd. Summary of Annual Report for 2011
Down
Hotel and food service 12.76percentage
2,308.14 2,185.00 5.33% -9.18% 4.97% point
Down
Training service 6.01percentage
1,733.33 703.24 59.43% 277.47% 343.13% point
5.3 Reasons for major changes on profit constitution, main business and structures as well as
profitability for main business compare with year-earlier period
□Applicable √Inapplicable
§6. Financial Report
6.1 Explanation on changes on accounting policies, accounting estimation and calculation
compare with latest annual report
□Applicable √Inapplicable
6.2 Content of fundamental accounting errors, amount changed as well as their reasons and
influence
□Applicable √Inapplicable
6.3 Explanation on changes of consolidation range compare with latest annual report
□Applicable √Inapplicable
6.4 Explanation on “Qualified Opinion” from the Certified Public Accountants in the report
period by the Board of Directors and Supervisory Committee
□Applicable √Inapplicable
Board of Directors of
Shandong Airlines Co., Ltd.
March 21, 2012
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