Foshan Huaxin Packaging Co., Ltd. Interim Report 2020 (Summary)
Stock Code: 200986 Stock Name: Huaxin Packaging-B Announcement No. 2020-040
FOSHAN HUAXIN PACKAGING CO., LTD.
INTERIM REPORT 2020 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the Interim Report of Foshan Huaxin Packaging Co., Ltd. (together with its consolidated
subsidiaries, the “Company”, except where the context otherwise requires). In order for a full understanding of the Company’s
operating results, financial condition and future development plans, investors should carefully read the aforesaid full text, which has
been disclosed together with this Summary on the media designated by the China Securities Regulatory Commission (the “CSRC”).
Except for the following directors, all the other directors attended in person the Board meeting for the review of this Report and its
summary.
Reason for not attending
Name Office title Proxy
meeting in person
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable √ Not applicable
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese versions shall prevail.
Part II Key Corporate Information
1. Stock Profile
Stock name Huaxin Packaging-B Stock code 200986
Stock exchange for stock listing Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Ding Guoqiang Shi Hui
2/F, Block 7, 3 Keyang Road, Luoge Park, 2/F, Block 7, 3 Keyang Road, Luoge Park,
Chancheng Economic Development Zone, Chancheng Economic Development Zone,
Office address
Nanzhuang Town, Chancheng District, Nanzhuang Town, Chancheng District,
Foshan, Guangdong Province, P.R.China Foshan, Guangdong Province, P.R.China
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2020 (Summary)
Tel. 0756-8666629 0756-8666978
E-mail address dinggq@htrh-paper.com shih@htrh-paper.com
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
H1 2020 H1 2019 Change (%)
Operating revenue (RMB) 1,849,582,374.70 1,733,126,237.68 6.72%
Net profit attributable to the listed
47,569,827.49 10,489,265.80 353.51%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before exceptional 42,274,052.09 8,813,571.35 379.65%
gains and losses (RMB)
Net cash generated from/used in operating
547,232,009.55 -349,160,799.79 -
activities (RMB)
Basic earnings per share (RMB/share) 0.0941 0.0208 352.40%
Diluted earnings per share (RMB/share) 0.0941 0.0208 352.40%
Up by 1.82 percentage po
Weighted average return on equity (%) 2.35% 0.53%
ints
30 June 2020 31 December 2019 Change (%)
Total assets (RMB) 5,817,684,697.84 5,591,643,310.38 4.04%
Equity attributable to the listed company’s
2,046,639,944.00 2,006,651,491.51 1.99%
shareholders (RMB)
3. Shareholders and Their Holdings as at the End of the Reporting Period
Unit: share
Number of preferred
Number of ordinary shareholders 12,553 shareholders with resumed 0
voting rights (if any)
Top 10 shareholders
Name of Nature of Shareholding Number of Shares in pledge or frozen
Private shares
shareholder shareholder percentage shares Status Shares
FOSHAN
HUAXIN State-owned
65.20% 329,512,030 329,512,030
DEVELOPME legal person
NT CO., LTD.
WU Foreign natural
0.62% 3,127,291
HAOYUAN person
GUOTAI
JUNAN
Foreign legal
SECURITIES( 0.43% 2,156,804
person
HONGKONG)
LIMITED
ZHAI Domestic
0.41% 2,066,800
YUZHEN natural person
Domestic
CAI YUJIU 0.38% 1,940,400
natural person
Domestic
MIU JUN 0.30% 1,512,900
natural person
NORGES Foreign legal
0.27% 1,352,720
BANK person
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2020 (Summary)
ESSENCE
INTERNATION
AL
Foreign legal
SECURITIES 0.24% 1,205,252
person
(HONG
KONG) CO.,
LTD.
FOSHAN
CHAN BEN DE
State-owned
ASSET 0.23% 1,139,420 1,139,420
legal person
MANAGEMEN
T CO., LTD
Domestic
ZHANG LI 0.20% 1,011,300
natural person
Related or acting-in-concert
It is unknown whether there is among the above shareholders any related or acting-in-concert
parties among the shareholders
party as defined in the Administrative Measures for the Acquisition of Listed Companies
above
Shareholders involved in
N/A
securities margin trading (if any)
4. Change of Controlling Shareholder or Actual Controller in Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The actual controller remained the same in the Reporting Period.
5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
6. Corporate bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were undue before the date of this
Report’s approval or were due but could not be redeemed in full?
No.
Part III Operating Performance Discussion and Analysis
1. Business Overview of Reporting Period
Is the Company subject to any industry-specific disclosure requirements?
No.
(I) Market Environment
In the first half of 2020, the sudden outbreak of COVID-19 and the complex external economic environment brought various
uncertainties and challenges to the Company’s business divisions. Sinarmas Paper (China) Investment Co., Ltd. (hereinafter,
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2020 (Summary)
“Sinamas Paper”) passed the anti-trust review unconditionally on its acquisition of 100% of Shandong Bohui Group Co., Ltd.
(hereinafter, “Bohui Group”), marking substantial progress on the acquisition. The ivory board industry sees faster integration, more
concentration, improving trends and expectedly higher market prices. The increasingly strict policies of environmental protection and
plastic bag restriction across the world provide a boost to demand for ivory board. However, the spreading of the pandemic overseas
has produced a great impact on ivory board exports both directly and indirectly. But market demand for color printing, which goes
with the ivory board industry, is in gradual recovery as the pandemic is under control domestically.
(II) Operating Results of the Reporting Period
In the first half of 2020, the Company followed the leadership of the governing party, promoted deep integration of party committee
building and business operations, promoted high-quality development through high-quality party committee building, gave play to
the “controlling directions, managing the overall situation and ensuring implementation” roles of the party committee and the role of
party organizations of all levels as fighting bastions, proactively responded to the uncertainties and challenges brought by the
pandemic, and ensured stable production and operation. Meanwhile, it actively expanded external markets, deepened organizational
reform, increased investment in R&D and innovation, improved internal management and strengthened risk control. As a result, the
Company achieved significant improvement in internal management and a significant year-on-year improvement in operating
performance.
For the Reporting Period, the Company recorded operating revenue of RMB1,849,582,374.70, a gross profit of RMB93,959,067.49,
and a net profit attributable to the listed company’s shareholders of RMB47,569,827.49. As at the end of the Reporting Period, the
total assets of the Company amounted to RMB5,817,684,697.84, with a debt/asset ratio of 37.81%.
(III) Management Measures in the Reporting Period
1. Persisting in the guidance of Party building and strengthening the integration of Party building and operation
In the first half year of 2020, the Company persisted in the guidelines of Xi Jinping Thought on Socialism with Chinese
Characteristics for a New Era, and conscientiously implemented the decisions and arrangements of the Party Central Committee.
With “three integrations with internationalization” and “double integrations” as the focus, the Company integrated Party building
with production, operation, corporate culture, team building, and the work of different societies and associations, and gave full play
to the role of its Party committee in “controlling directions, managing the overall situation and ensuring implementation”. During the
epidemic, the Company conducted the education themed “Enforcing Strict Discipline over the Party and Strengthening the
Awareness for Political Responsibilities”, so as to convert the unique political advantages of the Party into strengths in fighting
against the epidemic, resuming work and production, and managing production and operation, promote production and operation
towards continuous improvements, and achieve growth in all business segments in all respects.
2. Reinforcing the internal mechanism reform and enhancing operation efficiency
In the first half of 2020, the Company continued to improve its organizational structure and at the same time stepped up effort in the
recruitment of marketized mature talents, and introduced professionals to inject new impetus into the Company for its development.
Furthermore, the Company promoted the new appraisal model focusing on the maximization of “efficiency and profits” to boost the
morale of employees. It carried out a reform on its existing remuneration system based on the principle of linking performance with
salary, which “values performance, rewards the diligent, punishes the lazy, encourages creation, and increases profits”. The Company
established promotion channels comprising five hierarchies to conduct annual comprehensive review of technical, skilled and
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2020 (Summary)
management talents at each hierarchy in a specific proportion, thus satisfying the development needs of both itself and its employees,
improving the core competitiveness of both, and guiding employees to focus on improving their skills and abilities.
3. Increasing spending on R&D and innovation and improving the incentive mechanism
In 2020, the Company continued to improve R&D spending and pursued “differentiation” in the increasingly homogeneous market.
Its newly founded New Material Development and Industrial Technology Research Institute integrates paper manufacturing,
chemical engineering, printing and packaging technologies of the paper-making industrial chain, extends research into the “new
materials+” in emerging industries, and engages in the R&D of new products, new processes, new technologies and new raw and
auxiliary materials in businesses. In addition, the Research Institute undertakes the product R&D and technical services to external
companies in paper manufacturing and chemical industry, and engages in the scientific research projects on new materials in national
and provincial strategic emerging industries. New Material Development and Industrial Technology Research Institute has set up a
flexible and market-oriented new incentive mechanism to inspire the technological innovation ability of scientific and technological
personnel, and fully exert and mobilize their creativity and activity.
4. Advancing the marketing system reform and promoting synergy in the internal management system
The Company has established a market-oriented system in its marketing department to optimize “value marketing”. It appraises sales
performance by measuring the growth of sales volume, forming a competitive remuneration and incentive mechanism. Moreover,
based on its product characteristics and the market status quo, the Company has continued to improve its marketing structure towards
better allocation and use of marketing resources. It has made improvement to various supply chain links to enhance its overall
business capacity.
2. Matters Related to Financial Reporting
(1) Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared to the Last
Accounting Period
□ Applicable √ Not applicable
No such cases.
(2) Retrospective Restatements due to the Correction of Material Accounting Errors in the Reporting
Period
□ Applicable √ Not applicable
No such cases.
(3) Changes to the Scope of Consolidated Financial Statements Compared to the Last Accounting Period
□ Applicable √ Not applicable
No such cases.
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