承德南江股份有限公司 2016 年年度报告摘要 Stock Code: 200160 Short Form of the Stock: Nanjiang B Public Notice No.: 2017-028 Chengde Nanjiang Co., Ltd. Summary of Annual Report 2016 I. Important Notice The summary is abstract from full-text of annual report, for more details of operating results, financial condition and future development plan of the Company; investors should found in the full-text of annual report that published on media appointed by CSRC. Objection statement of directors, supervisors and senior executives Name Position Content and reason Statement Other directors attending the Meeting for annual report deliberation except for the followed Name of director absent Title for absent director Reasons for absent Attorney Prompt of non-standard audit opinion □ Applicable √ Not applicable Profit distribution pre-plan of common stock or capitalizing of common reserves pre-plan deliberated by the Board in the reporting period □ Applicable √ Not applicable The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. Profit distribution pre-plan of preferred stock deliberated and approved by the Board in the reporting period □ Applicable √ Not applicable II. Company information 1. Company Profile Short form of the stock Nanjiang-B Stock code 200160 Stock exchange for listing Shenzhen Stock Exchange Person/Way to contact Secretary of the Board Rep. of security affairs Name Li Wenying Wang Haijian XiaBanCheng Town, Chengde County, XiaBanCheng Town, Chengde County, Hebei Office add. Hebei Province Province Fax. 0314-3111475 0314-3111475 Tel. 0314-3115048 0314-3115048 E-mail liwy@dftechgroup.com wanghj@dftechgroup.com 2 Main business or product introduction in the reporting period During the reporting period, the company's main business was real estate development, business model was the development and sales of commercial housing, business scope was mainly located in Chengde region. The main products of the company's real estate business included residential and commercial housing, currently Nanjiang Huijing Tiandi project is for sale . In 2016, the real estate industry adopted the destocking policy at the beginning of the year and the successively introduced regulatory policies to hot cities at the second half of the year, and experienced the process from general loose to local continuous tightening. During the reporting period, influenced by the national strategy of Beijing-Tianjin-Hebei integration, the volume and price of real 1 承德南江股份有限公司 2016 年年度报告摘要 estate market in areas around Beijing rose, showing a promising prospect for profits. The construction of Beijing-Shenyang high-speed rail made Chengde enter into the “capital one hour economic circle”, and brought a new wave of heat to the local real estate. In the future, the company shall make use of this development opportunity to actively expand business areas, continuously improve service quality, build high-end boutique residential housing, and improve market competitiveness. 3. Main accounting data and financial indexes (1) Main accounting data and financial indexes for recently three years Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not □Yes √ No In RMB 2016 2015 Changes over last year 2014 Operating income 367,898,631.53 141,221,936.00 160.51% 322,502,631.63 Net profit attributable to 3,760,806.51 58,872,707.12 -93.61% 80,280,395.81 shareholders of the listed company Net profit attributable to shareholders of the listed company 553,720.92 -31,171,146.45 101.78% 3,121,357.84 after deducting non-recurring gains and losses Net cash flow arising from 54,484,351.33 19,812,057.85 175.01% -134,329,924.08 operating activities Basic earnings per share 0.01 0.08 -87.50% 0.11 (RMB/Share) Diluted earnings per share 0.01 0.08 -87.50% 0.11 (RMB/Share) Weighted average ROE 1.06% 18.43% -17.37% 32.13% Changes over end of End of 2016 End of 2015 End of 2014 last year Total assets 626,756,827.34 854,793,263.22 -26.68% 642,501,296.47 Net assets attributable to 359,826,450.98 352,256,123.56 2.15% 289,982,016.44 shareholder of listed company (2) Quarterly main financial index In RMB First quarter Second quarter Third quarter Fourth quarter Operating income 46,379,194.49 145,035,287.25 103,804,200.47 72,679,949.32 Net profit attributable to 1,078,731.20 723,138.74 2,454,508.79 -495,572.22 shareholders of the listed company Net profit attributable to 1,147,902.15 924,846.14 2,520,155.95 -4,039,183.32 2 承德南江股份有限公司 2016 年年度报告摘要 shareholders of the listed company after deducting non-recurring gains and losses Net cash flow arising from 30,707,074.03 46,147,909.94 3,894,432.69 -26,265,065.33 operating activities Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial index disclosed in the company’s quarterly report and semi-annual report □Yes √ No 4. Shares and shareholders 1. Particulars about common stock shareholders, preference shareholders with voting rights recovered and top ten shareholders In Share Total preferenc Total e Total preference common sharehold shareholders with Total common stock stock ers with voting rights shareholders at end of shareholder 19,555 19,555 voting 0 recovered at end of 0 last month before s in rights last month before annual report disclosed reporting recovered annual report period-end at end of disclosed reporting period Top ten shareholders Amount of shares Number of share Full name of Nature of Proportion of Amount of non-tradable pledged/frozen Shareholders shareholder shares held held shares held State of share Amount Domestic Wang Dong 29.49% 208,324,800 208,324,800 Frozen 208,324,800 natural person China Everbright Overseas legal Securities (HK) 13.28% 93,833,093 0 person Limited GUOTAI JUNAN Overseas legal SECURITIES(HON 6.87% 48,524,062 0 person GKONG) LIMITED Chengde North Domestic Industrial non-state-owned 2.62% 18,517,651 18,517,651 Corporation legal person Domestic Wang Zhengsong 1.89% 13,327,891 13,327,891 natural person Domestic Wang Wensheng 1.03% 7,258,007 0 natural person Domestic Zhou Haihong 0.95% 6,708,495 0 natural person Domestic Li Tianyun 0.73% 5,158,000 0 natural person Shanghai H.K. Overseas legal 0.71% 4,995,920 0 Wangguo Securities person Domestic Chen Yan 0.57% 4,023,256 0 natural person The Company is unknown whether there exists associated relationship or belongs to Explanation on associated relationship consistent actor regulated by “management method for acquisition of listed company” among the aforesaid shareholders among the above said shareholders. 3 承德南江股份有限公司 2016 年年度报告摘要 Explanation on involving margin N/A business (if applicable) (2) Total preferred stock shareholders of the Company and shares held by top ten shareholders with preferred stock held □ Applicable √ Not applicable The Company had no shareholders with preferred stock held in the reporting. (3) Property right and controlling relationships between the actual controllers of the Company and the Company is as follows: Wang Dong 29.49% CHENGDE NANJIANG CO., LTD. 5. Corporate bonds Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but not fully cashed on the approval date of annual report No III. Discussion and analysis by the Management Team 1. Introduction of operation in the reporting period Whether the company needs to comply with the disclosure requirements of the particular industry Yes Real estate industry The Company is comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange No.3-engaged in real estate business for the listed companies” In 2016, the real estate market was like the rising wind and scudding clouds, and experienced a few ups and downs of “overall rise, local overheating, regulation and upgrading, rapid cooling”. Since the central government put forward the “three remove one reduce one supplement”, the governments in many places successively introduced the policies such as reducing the down-payment proportion of the first-time house purchase, adjusting the house-purchase tax, reducing the bank's benchmark interest rate, etc., influenced by the continuous slack policy of currency and industry and centralized release of improvement demands, both the volume and price of real estate market rose and reached a record high. But with the rapid rise in housing price and land price in hot cities, the policy differentiation became further apparent. On the one hand, the regulatory policies in hot cities continued to tighten, the limitation on purchase and loan and the regulatory measures increased frequently so as to restrain the investment and speculative demand and prevent the market risks; on the other hand, the third- and fourth-tier cities still adhered to the destocking policy, the regional differentiation intensified, industry concentration further improved, and the market differentiation became more obvious. During the reporting period, influenced by the “Beijing-Tianjin-Hebei synergetic development”, the value of real estate in areas around Beijing highlighted. In 2016, with the steady promotion of “Beijing-Tianjin-Hebei traffic integration and medical integration”, some cities around Beijing and Hebei ushered in a round of significant rise in housing price, and the local limitations on purchase and loan was also successively introduced. With the saturation of city carrying capacity in Beijing, the continuously high housing prices and strict limitations on purchase and loan, some rigid demand and investment demand shall continue to overflow to areas around Beijing. At the same time, with decentralization to non-capital core functions of Beijing, the areas around Beijing need to undertake the progressively increasing industrial functions, and the real estate market in areas around Beijing shall still become the main objective to the decentralized industrial people, rigid demand customers and investors, and the overall market prospects are 4 承德南江股份有限公司 2016 年年度报告摘要 promising. During the reporting period, benefited by the national strategy of “Beijing-Tianjin-Hebei integration” and the construction of Beijing-Shenyang high-speed rail, the real estate of Chengde ushered in a wave of rapid rise, the company clutched the market opportunities to comprehensively speed up the sales of Nanjiang Huijing Tianadi project, and achieved good sales performance. At the same time, the company still actively promoted the strategy transformation, constantly explored the future development direction, and sought new profit growth points. During the reporting period, the company did not add any new land reserve. (II) Company operating conditions during the reporting period Up to December 31, 2016, the company's total assets has reached 626,756,827.34Yuan, net assets attributable to shareholders of listed company is359,826,450.98Yuan; in 2016, the company has achieved operating income of 367,898,631.53Yuan, net profit attributable to shareholders of listed company is3,760,806.51Yuan. During the reporting period, the company's real estate development is as follows: (1) Business formt Meter capacity Completed construction are Name of item Format Saleable area (㎡) Equity ratio building are (㎡) (㎡) Residence 154,301.45 154,301.45 153,049.71 85.27% NanjiangHuijin Business 25,352.10 25,352.10 25,352.10 14.01% g Tiandi Public area 1,304.43 1,304.43 0.72% Total 180,957.98 180,957.98 178,401.81 100% (2) According to region Developed land area Meter capacity Completed construction Total investment Area Name of item amount (in 100 (㎡) building are (㎡) are (㎡) million Yuan) Chengde NanjiangHuijing Tiandi 97,627.39 180,957.98 180,957.98 6.66 During the reporting period, the company's real estate sales as follows: (1) Business formt Current Gross Name of Proportio Saleable area The pre-sale area Operating Operating Format settlement area margin item n (%) (㎡) (㎡) income (RMB) cost(RMB) (㎡) (%) Nanjiang 353,111,510.7 298,839,250.4 Residence 85.79% 153,049.71 45,318.96 79,148.74 15.36% Huijing 7 6 Tiandi Business 14.21% 25,352.10 5,826.66 243.96 1,209,811.18 608,585.79 49.69% 354,321,321.9 299,447,836.2 Total 100% 178,401.81 51,145.62 79,392.70 15.48% 5 5 (2) According to region Operating Proportion( The pre-sale area Settlement Area Name of item Saleable area (㎡) income(RMB) %) (㎡) area (㎡) Chengde NanjiangHuijing 354,321,321.95 100% 178,401.81 51,145.62 79,392.70 Total Tiandi 354,321,321.95 100% 178,401.81 51,145.62 79,392.70 2. Whether the main business had major change in the reporting period □ Yes √ No 3. About the industries, products, or regions accounting for over 10% of the company’s operating income or operating profit √Applicable □Not applicable In RMB 5 承德南江股份有限公司 2016 年年度报告摘要 Increase/decrease Increase/decrease Increase/decrease Operating Item Operating profit Gross profit ratio of operating of operating of gross profit revenue revenue y-o-y profit y-o-y ratio y-o-y Property sales 354,321,321.95 299,447,836.25 15.49% 870.69% 1,000.25% -9.95% Chemical 9,397,196.11 8,740,329.32 6.99% -90.37% -91.04% 6.86% materials 4. Whether the characteristics of management seasonal or cyclical need special attention □ Yes √ No 5. In the reporting period, note of major changes in operating income, operating cost, total net profit attributable to common stock shareholders of listed company or composing the previous reporting period √Applicable □Not applicable In reporting period, the area of real estate carried over to income increased over that of last period, operation revenue and costs increased correspondingly. Income from land sales decreased over that of last period, than the net profit attribtuable to commone shareholders of listed company are decreased on a y-o-y basis. 6. Particular about suspended and delisting □ Applicable √ Not applicable 7. Relevant items involving financial report (1) Particulars about the changes in aspect of accounting policy, estimates and calculation method compared with the financial report of last year √Applicable □ Not applicable (1) Execution of “VAT Accounting Rules” The Ministry of Finance issued the “VAT Accounting Rules” (No. CK [2016]22) on December 3, 2016. Impacts on the Company in execution are as: Content and reasons Approval procedures Item and amount impacted (1) “business tax and surcharge” in profit statement “VAT Accounting Rules” Taxes and surcharge adjusted to “taxes and surcharge” (No. CK [2016]22) (2) The house duty, use tax of land, vehicle and vessel usage tax and stamp tax, which is from operation Increased taxes and surcharge of 958,566.12 activities since 1 May 2016, shall be listed in “taxes “VAT Accounting Rules” Yuan, administrative expenses decreased and surcharge” instead of “administrative expenses”. (No. CK [2016]22) 958,566.12 Yuan in the year The taxes occurred before 1 May 2016 shall not be adjusted, and comparative data either. (2) Major accounting errors within reporting period that needs retrospective restatement □ Applicable √ Not applicable 6 承德南江股份有限公司 2016 年年度报告摘要 No major accounting errors within reporting period that needs retrospective restatement for the Company in the period. (3) Compare with last year’s financial report; explain changes in consolidation statement’s scope √Applicable □ Not applicable 1. On 23 September 2016, being deliberated and approved by 11th session of 6th BOD, a wholly-owned subsdiary was established in Hangzhou – Hangzhou Hangfeng Technology Co., Ltd., with registered capital of 50 million Yuan, which is included in the consolidation range in the yera. 2. The 12th session of 6th BOD was held on 19 October 2016, deliberated and approved the Proposal of Cancelling Controlling Subsidiary Hangzhou Dongfeng Stealth Technology Co., Ltd., after calleration, the enterprise will not included in consoliation socpe any more. 3. On 9 December 2016, being deliberated and approved by 15th session of 6th BOD, the Company estaiblished a wholly-owned subsidairy - Chengde Kefeng Aerospace Technology Development Co., Ltd. in Chengde, with registered capital of 30 million Yuan, which in included in the consolidation range in the yera. 7