2020 Semiannual Report
Stock Code: 688007 Stock Short Name: Appotronics
Appotronics Corporation Limited
2020 Semiannual Report
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2020 Semiannual Report
Important Note
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior officers of
the Company hereby warrant that the information contained in this Semiannual Report is
true, accurate and complete and this Semiannual Report is free from any misrepresentation,
misleading statement or material omission, and agree to assume joint and several liability for
this Semiannual Report.
II. Alert of significant risks
During the reporting period, there has been no extremely significant risk that may have a material
effect on the production and operation of the Company. The Company has described in detail the risks
that may exist. Please refer to Section IV “Discussion and Analysis of Business Situations” for the
relevant risks.
III. All directors of the Company attended the meeting of the Board of Directors.
IV. This semiannual report has not been audited.
V. BO Lianming, Principal of the Company, ZHAO Ruijin, Person in Charge of the Accounting
Body and WEI Yanlin, Chief Accountant, hereby represent that the financial statements
contained in this Semiannual Report are true, accurate and complete.
VI. Profit distribution proposal or proposal for capitalization of capital reserve approved by the
Board of Directors during the reporting period
None
VII. Isthereanymaterialeventconcerninganyspecialarrangementofcorporategovernance?
□ Applicable√ N/A
VIII. Risk statement regarding forward-looking statements
√ Applicable□ N/A
The forward-looking statements contained herein regarding the future plans, development strategies or
other matters of the Company do not constitute any substantive covenant made by the Company to the
investors. The investors should be aware of the risk of investment.
IX. Is there any non-operational occupation of funds by the controlling shareholder or its
affiliates?
No
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X. Is there any external guarantee provided in contravention of the stipulated
decision-making procedure?
No
XI. Others
□ Applicable√ N/A
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Table of Contents
Section I. Definitions ........................................................................................................................... 5
Section II. Company Profile and Financial Highlights ......................................................................... 5
Section III. Operational Highlights ........................................................................................................ 9
Section IV. Discussion and analysis of business situations.................................................................. 23
Section V. Significant Matters ............................................................................................................ 35
Section VI. Changes in Shares and Shareholders ................................................................................. 97
Section VII. Preferred Shares .............................................................................................................. 103
Section VIII. Directors, Supervisors, Senior Officers and Employees ......................................... 104
Section IX. Corporate Bonds.............................................................................................................. 104
Section X. Financial Report .............................................................................................................. 104
Section XI. List of Documents Available for Inspection .................................................................... 234
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Section I. Definitions
For purpose of this report, unless the context otherwise requires, the following terms shall have the
meanings indicated below:
Terms
Company or Appotronics means Appotronics Corporation Limited
Appotronics Ltd. means Appotronics Corporation Ltd., the former name of the
Company
CINEAPPO means CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd.
Fengmi means Fengmi (Beijing) Technology Co., Ltd.
Appotronics HK means Appotronics Hong Kong Limited
Appotronics Holdings means Shenzhen Appotronics Holdings Co., Ltd.
CINIONIC means Cinionic Limited (previously known as Barco Cineappo
Limited) and its wholly-owned subsidiaries
GDC means GDC Technology Limited (British Virgin Islands)
China Film means China Film Co., Ltd.
CFEC means China Film Equipment Co., Ltd.
Xiaomi means Xiaomi Group, a Hong Kong listed company (1810.HK),
and its affiliates
Tianjin Jinmi means Tianjin Jinmi Investment Partnership (LP)
Shunwei Technology means Suzhou Industrial Park Shunwei Technology Venture
Capital Partnership (LP)
Xiaomi Communications means Xiaomi Communications Technologies Co., Ltd. and its
affiliates
DonView means Beijing DonView Digital Technology Co., Ltd., Beijing
DonView Education Technology Co., Ltd., and their
controlled subsidiaries
Orient Appotronics means Beijing Orient Appotronics Technology Co., Ltd.
Section II. Company Profile and Financial Highlights
I. Company profile
Chinese name 深圳光峰科技股份有限公司
Short name in Chinese 光峰科技
English name Appotronics Corporation Limited
Short name in English Appotronics
Legal representative BO Lianming
Registered address 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road,
Yuehai Street, Nanshan District, Shenzhen
Postal code of registered address 518052
Office address 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road,
Yuehai Street, Nanshan District, Shenzhen
Postal code of office address 518052
Website http://www.appotronics.com
Email ir@appotronics.cn
Reference to changes during the reporting N/A
period
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II. Contact person and contact information
Board Secretary (Domestic representative for information
disclosure)
Name YAN Li
Address 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road,
Yuehai Street, Nanshan District, Shenzhen
Telephone 0755-32950536
Facsimile 0755-86186299
Email ir@appotronics.cn
III. Description of changes to the media for information disclosure and place for keeping
semiannual reports
Designated newspaper for information China Securities Journal, Shanghai Securities News,
disclosure Securities Times, Securities Daily
Websites designated by the China Securities www.sse.com.cn
Regulation Commission for publishing the
semiannual reports
Place for keeping the semiannual reports Office of the Board of Directors
Reference to changes during the reporting N/A
period
IV. Stock and depository receipts of the Company
(I) Stock of the Company
√ Applicable□ N/A
Stock of the Company
Type of stock Stock exchange Stock short name Stock code Former stock short
and board name
A-shares Shanghai Stock Appotronics 688007 N/A
Exchange, STAR
Market
(II) Depository receipts of the Company
□ Applicable√ N/A
V. Other related information
□ Applicable√ N/A
VI. Main accounting data and financial highlights of the Company in the past three years
(I) Main accounting data
Unit: Yuan Currency: RMB
During the
Change over the
Main accounting data reporting period Prior period
prior period (%)
(Jan. - Jun.)
Operating income 716,025,207.34 853,356,964.84 -16.09
Net profits attributable to shareholders 14,327,442.96 66,579,574.06 -78.48
of the listed company
Net profits attributable to shareholders
of the listed company after deduction of -30,232,495.13 41,604,643.75 -172.67
non-recurring profit or loss
Net cash flow from operating activities 63,006,061.80 -14,543,413.52 N/A
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Changes at the
end of the
At the end of the At the end of the reporting period
reporting period prior year from the end of
the prior year
(%)
Net assets attributable to shareholders 1,973,397,952.69 1,974,559,837.64 -0.06
of the listed company
Total assets 3,082,777,641.24 3,099,508,090.85 -0.54
(II) Financial highlights
During the
reporting Change over the
Financial highlights Prior period
period prior period (%)
(Jan. - Jun.)
Basic earnings per share (RMB/share) 0.03 0.17 -82.35
Diluted earnings per share
0.03 0.17 -82.35
(RMB/share)
Basic earnings per share after
deduction of non-recurring profit or -0.07 0.11 -163.64
loss (RMB/share)
Weighted average return on net assets 0.72 8.89 -8.17 percentage
(%) points
Weighted average return on net assets
-7.12 percentage
after deduction of non-recurring profit -1.52 5.60
points
or loss (%)
Proportion of R&D investments to 12.19 10.47 +1.72 percentage
operating income points
Explanation about the main accounting data and financial highlights in the past three years
√ Applicable□ N/A
1. The decrease in the operating income by 16.09% year on year was primarily due to the shut-down of
cinemas under the impact of COVID-19, leading to the decrease of the Company’s cinema services and
sales; meanwhile, the decrease in demand both in and outside of China under the impact of COVID-19
also affected the expansion of large venue, business education, and other To-B operations;
2. The decrease in the net profit attributable to the shareholders of the listed company by 78.48% was
primarily due to the decrease in the incomes during the period, the decline in the profitability caused by
the changed income structure, and losses suffered by major subsidiaries under the impact of COVID-19;
3. The decrease in the net profit attributable to shareholders of the listed company after deduction of
non-recurring profit or loss by 78.48% was primarily due to the decrease in the incomes during the
period and the decline in the profitability caused by the changed income structure;
4. The net cash flows from operating activities turned from negative to positive primarily due to the
increase in payment by bank's acceptance bills during the period, leading to the decrease in cash
payment for actual procurement, and to the reduction in taxes paid during the period given the decrease
in the income and profit.
5. The decrease in the basic earnings per share and diluted earnings per share by 82.35% was primarily
due to the decrease in the net profit attributable to the shareholders of the listed company and the
increase in the IPO share capital of the Company.
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VII. Differences in accounting data under Chinese Accounting Standards and Oversea
Accounting Standards
□ Applicable√ N/A
VIII. Items and amounts of non-recurring profit or loss
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item of non-recurring profit or Amount Note (if applicable)
loss
Gain or loss on disposal of 45,940.33
non-current assets
Government grants recognized
in profit or loss other than grants
which are closely related to the
Company's business and are
29,851,687.48
either in fixed amounts or
determined under quantitative
methods in accordance with the
national standard
Net profit or loss of subsidiaries
from the beginning of the period
up to the business combination
date recognized as a result of 11,655,728.28
business combination of
enterprises involving enterprises
under common control
Profit or loss on changes in the
fair value of held-for-trading
financial assets, derivative
financial assets, held-for-trading
financial liabilities and
derivative financial liabilities
and investment income on
disposal of held-for-trading
10,824,793.71
financial assets, derivative
financial assets, held-for-trading
financial liabilities, derivative
financial liabilities and other
debt investments, other than
those used in the effective
hedging activities relating to
normal operating business
Other non-operating income and
-366,405.89
expenses other than the above
Effects attributable to minority -1,938,077.23
interests
Effect of income tax -5,513,728.59
Total 44,559,938.09
IX. Others
□ Applicable√ N/A
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Section III. Operational Highlights
I. Main business, business model, and status of industry during the reporting period
(I) Main business and main products or services
1. Main business
We are a leading laser display technology enterprise in the world owning proprietary
technologies and core patents and having core device research, development and
manufacturing capability. In the reporting period, we were mainly engaged in the research
and development, production and sale of core laser display devices and complete laser
display equipment, and provision of laser film cinema services.
2. Main products and services
Our products may be classified into core laser display devices and complete laser
display equipment. The core devices can be further classified into laser light source
(cinema light source and large venue light source), light generator and laser projection
screen, and complete laser display equipment can be further classified into laser cinema
projector, large venue laser projector, laser video wall, laser education projector, laser TV
and smart mini projector, of which, the former four products fall within the field of To B,
while the latter two fall within the field of To C.
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(II) Main business model
We are mainly engaged in the R&D, production, sale of core laser display devices and
complete laser display equipment, and provision of customized R&D and manufacturing
services to customers, and have an independent and complete R&D, procurement, sales,
production and service system.
1. R&D mode
We mainly adopt the independent R&D mode. Our technology development focuses
on creating and mastering core and key technologies. When a kind of technology becomes
relatively mature, it will be applied in product development. Our product development is
driven by product planning. We set up product lines and product development teams by
market segment, and develop series products based on product platform.
2. Procurement mode
Our Resources Development Department and Supply Chain Center Planning
Management Department are responsible for procurement, of which, the Resources
Development Department is responsible for the selection of suppliers, determination of
purchasing prices, building of business system and supply platform and other front-end
affairs, and the Planning Management Department is responsible for the preparation and
implementation of procurement plans and other back-end procurement affairs.
3. Production mode
Our production mode relies on own production, supplemented by OEM, mainly
because of the different production capacity required by different manufacturing processes
and modes and consideration of cost-effectiveness. Our core devices sold or offered to
customers are manufactured by us. Laser TV and smart mini projector products are
assembled by OEMs. Other complete equipment products are also manufactured by us.
4. Sales mode
Our sales mode is mainly classified into product sales and cinema service, as
described below:
(1) Product sales mode
Our products include core laser display devices and complete laser display equipment.
① The sale of core devices is implemented in the mode of customized development
and direct sale.
② The sale of complete equipment has three modes, which are customized direct sale,
non-customized direct sale and distribution. Including:
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Xiaomi, DonView, CVTE, VAVA, Haier, ViewSonic and other companies purchase
customized complete equipment products developed by us for them.
Large venue laser projectors are sold mainly using the off-line direct sale mode, while
Fengmi branded laser TV and smart mini projector products are sold both at the online
retail stores on Tmall, JD, Youpin, Pinduoduo and other platforms, and off-line physical
stores.
Other complete equipment products are sold mainly through distributors.
(2) Mode of cinema service
We established CINEAPPO jointly with CFEC, a wholly owned subsidiary of China
Film. CINEAPPO purchases laser cinema light source from Appotronics, and then provides
cinema services to downstream cinema customers (“Laser as a service”).
Such mode of cinema service was a first in the industry, under which CINEAPPO
charges service fees according to the length of use of light source by the cinemas (the fees
are charged by the hour or a certain period of time), while the cinemas do not need to
purchase light source equipment, thereby effectively easing their capital pressure and
reducing their labor and maintenance costs. CINEAPPO connects the light source
equipment with its remote information platform, provide remote license and smart timer
services in respect of such light source, and gives support to day-to-day operation of such
light source, such as asset monitoring and tracking, inspection and maintenance order.
(III) Industry in which the Company operates
1. Development stage, basic characteristics and main technical barriers of the industry
1.1 Industry
According to the Industrial Classification for National Economic Activities
(GB/T4754-2017) published by the National Bureau of Statistics, we are classified into the
“display device manufacturing” industry (industrial code: C3974) of the “computer,
communication and other electronic equipment manufacturing” industry (industrial code:
C39). According to the Guidelines on the Industrial Classification for the Listed Companies
published by the China Securities Regulatory Commission, we are classified into the
“computer, communication and other electronic equipment manufacturing” industry
(industrial code: C39).
1.2 Development stage of the industry
(1) Laser display To B market: Growth stage in which the performance of mature
products is improved and the products are continuously upgraded
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On the To B market, laser display technology is mainly applied in cinema projection
and large venue display, including cinema projection, security and surveillance, command
and control, theater performance, exhibition and display, artificial and virtual reality and
other scenarios. In recent years, due to its remarkable advantages such as stable
performance, long service life and rich color, laser display technology has been rapidly
replacing the traditional light source technology used in cinema projection and large venue
display equipment.
Since the launch of the first ALPD laser cinema projector jointly developed by
Appotronics, China Film and Barco in 2014, ALPD laser light source has been widely
applied in the cinemas throughout the country, and entered the overseas projector market,
making Appotronics a leader on the laser cinema projector market. In addition, the laser
display technology is rapidly penetrating into the large venue display market.
Though the growth of laser display on To B market is temporarily hindered by the
epidemic situation, laser display has great growth potentials due to its unique advantages.
We expect that as the epidemic situation is put under control gradually, the demands for
laser display technologies and products on To B market will grow continuously and
steadily, and the laser display technologies and products for To B market will provide
better performance and more functions through continuous innovation.
(2) Laser display To C market: As an emerging industry, it is at the early stage of
rapid development
The application of laser display technology in TV and other household products is a
wholly new creation. Based on the long-term accumulation of ALPD technology,
Appotronics has made a breakthrough in the application of core devices and imaging
solutions of laser display and achieved superiority in the field of household display,
including lower cost, higher efficiency and smaller size, among others, which created laser
TVs.
Since Appotronics launched the first 100 inch laser TV in the world and introduced
the concept of laser TV based on “ultra short throw front laser projector with anti-ambient
light screen” in 2013 in cooperation with LG, HiSense, Xiaomi, Changhong, Haier and
other well-known companies have been engaged in R&D, production and marketing of
laser TV products, promoting the rapid growth of the market size of laser TV and other
related household products.
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Household laser display products have three unique advantages, which are large size,
eye care and portability. Along with the continuous development of the industry chain, the
costs of core materials and devices will be further lowered and their performance will be
further improved. It is expected that household laser display products will develop toward
lower price, smaller size and better display effect in the next few years, and become
common household products.
1.3 Analysis of the position of the Company in the industry and changes therein
At the beginning of the industrialization of laser display technology, as one of the
leading companies in the field of laser display, Appotronics has mastered core technologies.
We have not only created the fundamental key architecture for laser phosphor display
technology, but also built a proprietary IP protection system through patent layout in China,
the United States, Japan, Europe and other countries.
1.4 Development of new technologies, new industries, new types of operation and new
modes during the reporting period and future trend
(1) Projectors are expanding into the household consumer market at a rapid growth
rate in the market segment
Given the rapid technical advancement and high household demand on large-screen
displays, smart projector devices have become the largest market segment for projector
devices in China on the basis of the rapid increase in sales thanks to their cost effectiveness
and portability compared with large-screen TVs. In the Guidelines for Myopia Prevention
in Children and Adolescents during COVID-19 Epidemic (Updated Version) released by
the National Health Commission, projectors are recommended as the first choice of devices
for use during the teaching sessions. Compared with conventional liquid crystal screens,
some projectors equipped with advanced laser technologies can protect consumers during
long-time online work and study and reduce the harm due to eye fatigue. According to IDC,
it is expected that the projector device market of China will grow at the compound growth
rate of 14% between 2020 and 2024.
(2) The accelerated technical upgrade in the smart mini projector industry leads to a
promising prospect for the application of laser light sources
The projector light sources are gradually evolving from bulbs to semiconductor solid
light sources. The Report of Market Research and Investment Forecast Analysis of China
Projector Industry released by Forward Industry Research Institute revealed the rapid
growth of projectors within the range of 1500-2000 lumens with a rapidly increasing share
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of smart projectors, and the development trend of high-definition, high-brightness, and
smart projects. With respect to market demands, it is expected that projectors within the
range of 1500-2000 lumens will gain increasing shares in projectors, which may further
reducing the survival space of low-brightness projectors. In the future, on the basis of the
development in fundamental hardware technologies such as light sources, lighting
technologies, and lens technologies, the optimization of overall device design, and the
development of software technologies such as smart sensing capabilities and image quality
optimization technologies, the smart projector market will further expand thanks to the
greatly improved display performance and use experience of projector devices, technical
upgrade, and reduced costs.
1.5 The core technology of the Company is the mainstream technical route for the
laser projector industry
With respect to the laser phosphor display technology, the Summary Report on
Chinese Laser Projector Market for 2020Q2 issued by AVC showed that the blue laser +
phosphor powder technology architecture, represented by ALPD, was still the
mainstream light source technology.
II. Core technologies and progress in R&D of technologies
1. Core technologies and their advancement, and changes during the reporting period
We have been committed in the breakthroughs, innovations, commercialization and
industrialization of laser display technology, and created technology reserves and patent
portfolios covering the whole technology chain of laser display from key system
architecture, core devices to key algorithm. ALPD technology architecture has been
upgraded to the fourth generation. The performance of each generation of architecture
platform has been improved in an all-round way as compared to the previous generation,
thereby enabling us to maintain the technical and performance advantages in the industry.
As a Leader Level Member of the Laser Illuminated Projector Association (LIPA), we have
participated in and led the preparation of the international laser display standard.
During the reporting period, we have poured substantial R&D resources in the
preparation and processing of thin film materials, micro- & nano- optical structure
technology, light source architecture, dynamic control, complete equipment structure,
machine perception and miniaturization of laser display system. The big data, algorithm
and design solutions accumulated by us over the years will enable us to rapidly develop
products and solutions meeting the requirements of different application scenarios, such as
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cinema projection, home entertainment, outdoor exhibition, ultra large-sized display, and
immersive display.
In addition, we are developing laser display technology with high dynamic contrast
and high dynamic color gamut, battery-powered high-performance mini laser projector
technology and other technologies. Such new technologies have been continuously
validated and will be applied in our future products.
2. R&D achievements during the reporting period
(1) Achievements of product R&D
For software, Fengmi, a controlled subsidiary of the Company, released the FengOS
operating system, which upgraded the experience in page performance by employing the
independently developed browser and core standard components on the basis of the
independently developed Feng Dynamic Page (FDP) technical architecture, hence
enhanced the flexibility in content operation, improved the capability of continuous
delivery in agile operation, and realized more complex interaction functions.
For products, we developed high-, medium-, and low-end laser TV products to cater
for different user demands on the household market. Having the highest brightness of 4,000
lumens, covering the REC.709, DCI, and REC.2020 color gamuts, and with the maximum
color gamut area of 158% NTSC, our products are at the highest level in the industry. In the
business field, we developed the ultra-high bright large venue projector S4K60, which can
reach the highest brightness of 60,000 lumens in the industry; we continuously improved
the performance of ultra short throw business education projector devices on the basis of
the previous generation of light generators and released the 4K resolution ultra short throw
business education device with the brightness improved by 50% and screen size increased
from 100 inch to 150 inch, which further improved the application scope and
competitiveness of the products; and we released economic light sources suitable for
medium- and small-sized cinemas covering the brightness of 5,000 to 25,000 lumens for
screen sizes of 6 meter to 8 meter, which further optimized light source costs while
ensuring the brightness and image quality, hence are more suitable for use in medium- and
small-sized cinemas.
(2) Patent acquisition
By the end of the period, the Company obtained 88 new patents at home and abroad,
including 41 patents for invention granted at home and abroad, and filed 156 new patent
application in and outside of China, including 80 applications for invention patent in and
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outside of China. By the end of the period, we have obtained 996 patents throughout the
world, including 747 domestic patents and 249 foreign patents, had 824 domestic and
foreign patents pending and 259 PCT patents pending, obtained 57 software copyrights,
and owned 608 domestic and foreign trademarks.
3. R&D expenses
Unit: Yuan
R&D expenses expensed in the current 87,295,450.75
period
R&D expenses capitalized in the current -
period
Total R&D expenses 87,295,450.75
Proportion of R&D expenses to operating 12.19
income (%)
Proportion of R&D expenses capitalized -
(%)
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4. R&D projects
√ Applicable□ N/A
Unit: Yuan
Progress
Investment in
Estimated total Aggregate or Technological Application
No. Item the current Goals
investment investment interim level scenario
period
results
1 Key Enterprise Development of laser The development Through
Laboratory for phosphor display optical of key laser transformation of
Laser Display in engine, high-performance display technology lab R&D results,
Guangdong fluorescent materials and and devices based develop multiple
Province Labor fluorescent components, on laser phosphor laser display
34,000,000.00 3,688,412.87 9,913,384.52
trial portable laser display technology takes terminal products,
technology, and laser the lead in the and promote the
display technology with industry. development of
high contrast and high the entire display
color reproduction industry chain.
2 Trichromatic Laser This project will research This project will This project will
Display Complete the industrialization of the greatly promote establish a
Equipment technology of RGB the industrial trichromatic laser
Production trichromatic laser with upgrading of display complete
Demonstration Line phosphor to satisfy the trichromatic laser equipment
market demands for RGB display production
trichromatic laser display, technology, and demonstration
Labor
102,840,000.00 5,425,895.79 14,829,614.56 build a mass production gain international line.
trial
line for trichromatic laser competitive edge
display complete for proprietary
equipment, acquire trichromatic laser
proprietary IP, and realize display
large-scale application of technology.
trichromatic laser display
products.
3 Core devices Labor By employing the fourth Take the lead in Upgrading of light
28,850,535.08 14,242,356.66 14,242,356.66
trial generation of light the industry; the source for
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2020 Semiannual Report
generator technologies cost effectiveness, small-sized
and making use of the color gamut, light cinema projectors,
advantages of the APLD effect, and other trichromatic laser
technology, create a new performance are TV and other
generation of high-end but greatly improved, fields.
inexpensive trichromatic to better satisfy
light generator products, the demands of
so as to reduce the cost, customers.
improve the color gamut
brightness, hence improve
the cost effectiveness of
cinema light sources.
4 High-performance New generation of mini Smart mini Household mini
mini projector projector products with projector takes the projector market.
greatly improved cost lead in the
Labor
36,861,102.98 11,886,775.48 11,886,775.48 effectiveness by industry.
trial
employing a new
generation of platform
display technology.
5 Laser cinema DCI-compliant overseas The first DCI-compliant
projector small cinema projector proprietary DCI small cinema
meeting overseas compliant projector to
Labor
46,686,367.07 11,033,536.34 11,033,536.34 standards. projector in China expand the
trial
to cater for overseas market.
demands on the
overseas market.
6 Laser TV 4K trichromatic laser TV The 4K 4K household
with a new generation of trichromatic laser laser TV
light generator TV equipped with
technologies, with the the FengOS
Labor
67,071,461.81 23,738,663.45 23,738,663.45 independently developed system suitable for
trial
FengOS system, achieves large screens takes
great improvement in the lead in the
color gamut, brightness, industry.
cost effectiveness, and
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ease of use.
7 Other complete High-lumen, large-size, The high-end large High-end large
equipment (large and wide-color gamut venue projector venue projector,
venue + business large venue projectors and and business business education
education) business projectors with education projector and
Labor higher brightness and cost projector take the other fields.
38,415,018.29 17,279,810.17 17,279,810.17
trial effectiveness, which are lead in the
models for expanding the industry.
high-end market in the
large venue and business
education fields.
Total / 354,724,485.23 87,295,450.75 102,924,141.18 / / / /
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Remark
□ Applicable√ N/A
5. R&D staff
Unit: Yuan Currency: RMB
Basic information
Number of R&D staff (persons) 336
Proportion of R&D staff to total employees of the 30
Company (%)
Total compensation of R&D staff (RMB) 54,917,336.45
Average compensation of R&D staff (RMB) 163,444.45
Education
Academic background Number Proportion (%)
Doctor 24 7.14
Master 77 22.92
Undergraduate 176 52.38
College or below 59 17.56
Total 336 100.00
Age structure
Age Number Proportion (%)
≤30 149 44.35
31≤X≤40 153 45.53
41≤X≤50 26 7.74
>50 8 2.38
Total 336 100.00
Note: The average compensation of R&D staff shown in the table above was the average compensation
for the first half of 2020.
6. Other information
□ Applicable√ N/A
III. Material changes in the main assets during the reporting period
√ Applicable□ N/A
Please see “Section IV Discussion and Analysis of Business Situations - Main business activities during
the reporting period - Analysis of assets and liabilities”.
Wherein, the overseas assets were RMB 409,708,787.31, representing 13.29 of the total assets.
IV. Analysis of core competitiveness during the reporting period
(I) Analysis of core competitiveness
√ Applicable□ N/A
1. Advantage in proprietary technologies
Since we invented ALPD technology, the fundamental key technology architecture
has been gradually formed and improved. On the basis of this technology, we have
established rich product lines, which have a remarkable substitution effect on the traditional
products in cinema, TV, business education, large venue and other fields. ALPD
technology has become the mainstream technical route for laser display. By relying on
technical innovation rather than consumption of resources, we have realized rapid
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development, continuously improved the performance and cost-performance ratio of our
products, and maintained the competitive advantages in the industry.
2. Sound IP protection system
With our core patents covering laser phosphor display technologies, we have gradually
built up a patent system containing the largest number of patents covering the widest scope
with the highest quality in the industry. With key core patent at the center, we have built a
united whole patent system, and is hard to be simulated or broken by the competitors. In
addition to patented technologies, we also own multiple know-how accumulated including
core algorithms through R&D efforts over the years.
3. Advantage in product performance
Through more than ten years of R&D efforts, our technical advantages have been
given full play in cinema, household, large venue and other fields. Our products show
superior performance in luminance, service life, color gamut, removal of speckle and other
aspects. Through sufficient validation at R&D and quality labs and on-site use for a long
time, all types of our products have become mature. Since its installation in June 2014, the
first set of ALPD cinema light source has been stably operating for nearly six years. Our
products in other fields have also won trust on the market with their outstanding
performance and reliable quality.
4. Advantage in multiple product series
At present, our ALPD technology has certain demonstration effect in the field of
laser display, and its application covers professional market and mass market, and high-end
market and low-end market. Our multiple product series can satisfy the demands of various
scenarios. In addition, we have adopted the differential development strategy and upgraded
ALPD technology from multiple angles to satisfy the demands of different market
segments and applications.
5. Advantage in talents and teams
Our founder and Chairman, Dr. LI Yi, is a well-known expert in the field of laser
display. Our President, Dr. BO Lianming is a well-known leader in the display industry.
Under the leadership of our outstanding management team, we now have a sound corporate
governance system and strong internal controls, and have greatly improved our
management level and risk prevention capability. In addition, we have a group of
high-quality R&D personnel, including a lot of doctors graduated from famous domestic
and foreign universities. Our R&D team has taken the lead in the research of laser display
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technology in the industry. Through the combination of technology and management, we
are able to precisely catch the development trend of the display industry.
6. Advantage in business model
For the To C market, we developed the FengOS system - an open operating system
customized for laser TVs and smart projectors. This system can integrate every smart laser
TV terminal into the content ecology industry chain, hence implementing in-depth
integration of hardware and software by integrating the innovative, concise, and smart
operating system into advanced hardware. The Company also became the only player in the
laser display industry with the capability of manufacturing core devices and complete
equipment and the capability of designing and developing the operating system.
For the cinema projector market, based on our advanced technology and stable
products, we took the lead in releasing the “cinema service mode” for cinema laser light
sources in the industry. Under this mode, a cinema only needs to pay for the duration in use
instead of purchasing a light source. This not only effectively reduced their fund pressure
and maintenance cost, but also protected the cinema from the depreciation of cinema light
sources upon the occurrence of material adverse effects, such as COVID-19. This mode
presents the Company with stable incomes for a long period of time and promotes the rapid
application of the ALPD technology.
7. Comprehensive capability of product development
In the laser display field, as the core device, the light generator is the most expensive
and most highly technical part in laser display equipment, and is the most critical part in the
complete equipment. With the capability of manufacturing core devices based on our
fundamental key technologies, we have built up the unique advantage in the laser display
industry. Along with the constant upgrade in technologies and products, we have
accumulated precious technologies and experience in system development and key
algorithms, which lead to our comprehensive capability of product development.
(II) Events occurred during the reporting period that have a material effect on the Company’s
core competitiveness, analysis of the effect and countermeasures
□ Applicable√ N/A
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Section IV. Discussion and analysis of business situations
I. Discussion and analysis of business situations
The year 2020 is a year for Appotronics to take our initiative in addressing the crisis
and challenge - the spread of COVID-19 throughout the world caused in-depth impact on
the world, and the complicated international conditions also brought more uncertainties.
Appotronics, as a corporate citizen, is not immune to the condition, especially its cinema
services.
In the past three years, our cinema services increased at the compound growth rate of
83.32%, reaching the income of RMB 398 million in 2019, increased by 30.78% year on
year and accounting for 20.11% in our total incomes at the gross margin rate of 66.01%. As
our business platform of cinema services, the controlled subsidiary CINEAPPO realized the
net profit of RMB 145 million in 2019, but suffered the loss of RMB 34.6384 million from
January to June 2020. During the reporting period, the Company made the provision for
depreciation expenses of RMB 36,60 million for equipment for cinema services, and made
share-based payment of RMB 17.5765 million for implementing incentives of restricted
shares. The performance of the Company declined sharply in the first half year under the
impact of cinema shut-down, equipment depreciation, and share-based payment.
To address this crisis and seize the opportunity of demand recovery, we actively
adjusted our services, improved operation quality, implemented the scheme of “broadening
sources of incomes and reducing expenses”, improved operating efficiency, reduced
expenses and costs, and responded to the market rapidly to minimize our losses. With the
efforts of all our employees, we realized the operating income of RMB 716 million and the
net profit attributable to shareholders of the listed company of RMB 14.3274 million. On
the background that China Film Administration released the announcement for orderly
reopening of cinemas in July, it is expected that our incomes from cinema services will
recover gradually.
We completed the following main tasks during the reporting period:
1. The operation in the form of business units went on well, and the information-based
corporate operation became more healthy
The Company set up the Large Venue, Education, Overseas, and Household ODM
business units according to the business maturity in October 2019. During the reporting
period, all the business units operated well with improved independent decision-making
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and accelerate market response capabilities; our business expanded via the online channel
by enhancing online promotion, training, and channel certification; we released industrial
standards and solutions to build our position as a professional expert; and proactively took
opportunities of recovery to show the resilience of our business under the impact of
COVID-19. Meanwhile, we intensified informatization efforts. For example, the CRM
system was employed to start sales process management for all To-B business, off-line
customers of To-C business were recorded on the online CRM system, and online business
was connected with e-commerce warehouse to eliminate blind spot in warehouse storage.
In addition, we also initiated information-based budget management and control in all
aspect to improve operating efficiency, making the corporate operation more healthy.
2. Focused on our strategy and business to proactively explore patent operation modes
While making our best efforts to keep the stability of our “fundamental business”, the
management insisted on ensuring the investment in R&D. The R&D expenses of the first
half year were RMB 87 million, accounting for 12.19% of our income. With the continuous
improvement and expansion of the core industrial chain, we further focused on the
development strategy of “core technology + core patent + ecology” and built up a
comprehensive patent protection system on this basis. Through the global patent layout, we
proactively safeguarded our rights in patents and explored patent operation modes to seek
and realize our patent value. On one hand, we protected our investment in R&D by
safeguarding our rights in patents; on the other hand, we realized product innovation
through constant technical upgrade, which result in new patents in an attempt to drive the
development of the entire industry by our leading core devices.
3. The household business realized growth despite the adverse environment, and
FengOS supported service offering by integrating software with hardware
On the background of COVID-19, the household large-screen demands explored,
leading to the rapid development of the content industry and accelerated implementation of
ultra-definition content. Given the rapid development of the smart mini projector industry,
we realized the growth of 59.72% for our smart mini projector business, which effectively
filled up the gap left by the decline in other businesses. During the reporting period, we
released the independently developed FengOS operating system, and opened the FengOS
system for cooperation with large-screen hardware and projector manufacturers. Under the
Pro theme, we also released two hardware products - the 4K laser TV product Cinema Pro
and high-brightness smart projector Vogue Pro. The Cinema Pro product was equipped
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with a brand new ALPD laser light source to improve the brightness by over 40%, while
Vogue Pro was equipped with the FengOS system to achieve more functions and
entertainment options, hence implementing in-depth integration of hardware and the smart
operating system.
4. Incubation of new business was almost completed, which may become a new
growth driver
On the professional cinema application market, the DCI-compliant digital film
projector C5 - the first one in China and the smallest one with the lowest noise on the world
- was put into trial production, and we invested in GDC as expected in the first half year. In
consideration of the post-COVID-19 development of the cinema industry, we will carry out
our layout of the cinema solution business. For the household market, the laser projection
screen product working with laser TVs was almost completed, and our independently
developed flexible anti-ambient light screen with the thickness of 500 micrometer, which
was convenient for installation and transportation, will gradually realize mass production
and sale. The new business is taking shape after the efforts for three years, and is expected
to become a new growth driver in the future.
5. New product series was released to enrich the product portfolio
During the reporting period, we released new products to cater for more consumer
scenarios. In the education field, we continuously improved the performance of ultra short
throw business education projector devices on the basis of the previous generation of light
generators and released the 4K resolution ultra short throw business education projectors
with the brightness improved by 50% and screen size increased from 100 inch to 150 inch,
which further improved the application scope and competitiveness of the products. In the
household field, we developed high-, medium-, and low-end laser TV products to cater for
different user demands on the household market. Having the highest brightness of 4,000
lumens, covering the REC.709, DCI, and REC.2020 color gamuts, and with the maximum
color gamut area of 158% NTSC, our products are at the highest level in the industry. For
cinemas, we successfully developed the economic light source suitable for medium- and
small-sized cinemas, which further optimized light source costs while ensuring the
brightness and image quality, hence are more suitable for use in medium- and small-sized
cinemas.
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II. Risk factors
√ Applicable□ N/A
Risk of the technology R&D falling short of expectations
The core of our development is technical innovation. If we fail to effectively judge the
direction of technical innovations, or to make continuous technical innovations, or to make
effective R&D investments due to limited funds, or to successfully commercialize the
technologies developed by us, our core competitiveness in technical innovation may be
impaired, and we may encounter technological risks in future development.
Risk of unsustainability of rapid growth driven by the mode of cooperation
We adopt the business strategy of joint venture and cooperation, which combines the
advantages and resources of all partners. If our technical and product innovations slow
down and cannot satisfy the market demands, or our innovation capability decreases
continuously as a result of which our products are surpassed by our competitors, such
cooperation may bring lower benefits, or become unable to drive our rapid growth or
unable to continue.
Risks related to tax benefits and government grants
During the reporting period, we have received certain VAT reduction and government
grants pursuant to the applicable policies of the country. Generally, along with the growth
of our operating performance, though the effect of tax benefits and government grants on
our current net profit decreases, and our operating results do not rely on tax benefits and
government grants, such tax benefits and government grants still have certain effect on our
operating results. The decrease in our revenue from tax benefits and government grants
may affect our profit.
Risk related to the management of light source
In our light source service, we enter into an agreement with a customer, pursuant to
which, we charge a service fee on the customer based on the duration of use of the light
source, while the customer uses the light source and pays fees therefor, and is responsible
for the day-to-day safekeeping and maintenance of the light source and damages thereto,
but we do not collect any deposit or other similar fees for the light source. The cinemas will
use their best endeavors to maintain the light source in good condition in order to ensure
normal projection of films and continuity of their business operation. However, we still
face the risk of impairment of assets due to damage or loss of light source caused by
improper safekeeping on the part of the cinemas. In particular, due to the effect of the
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outbreak of Covid-19, most cinemas have closed down. If such situation persists, some
cinemas may go bankrupt, as a result of which our assets may face additional risks.
Risk of business development on the overseas market
As the outbreak of Covid-19 has not been effectively put under control in the world,
the stagnation of economic activities abroad will have certain effect on our export, the
business development of Cinionic and GDC on the overseas market, and the operation and
marketing of our subsidiaries in Hong Kong and the United States. If the COVID-19 is out
of control throughout the world for a long period of time, or the intense international
condition persists, the Company faces risks of failing to meet its expectation of the
expansion speed of overseas business.
Risk related to the supply of important raw materials
The key components of our products include laser devices, chips and lenses, which are
mainly purchased from some key suppliers of the United States and Japan. If such suppliers
significantly change the prices for such components, or are unable to supply such
components in a timely manner with both quality and quantity guaranteed, or fall into
difficulties in operation, or are unable to supply such components in a normal manner due
to trade dispute between the relevant countries, COVID-19 or any other reason, it may have
an adverse effect on our production and operation.
Risk of impairment of inventories
Our inventories mainly comprise raw materials and goods in stock. As of the end of
the reporting period, the carrying amount of our inventories was RMB 403 million. If any
significant change in the competition pattern of the industry, material innovation in laser
display technology and products or the change in the macro environment results in a large
quantity of unsalable products, the recoverable amount of the inventories will be lower than
their carrying amount. The impairment of inventories will have a negative effect on our
earnings.
Risk of IP litigation
IP protection and management includes protection of our proprietary and core
technologies, and prevention of infringement on third-party IP. On the one hand, the
process of patent application often lasts a long time and requires continuous and huge
investment. If any proprietary IP in the process of patent application is infringed by any
third party, it may have an adverse effect on our production and operation. On the other
hand, due to the increasingly fierce competition in the industry, many manufacturers wish
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to gain competitive advantages through developing core laser phosphor display technology.
If we fail to effectively prevent infringement on our proprietary IP, or inadvertently
infringe on any IP of others during the development of products, we may face IP litigations
or disputes, which may have an adverse effect on our business development and financial
condition.
Risk of increasingly fierce market competition
Laser display is a new and thriving field in the display device industry. A lot of
international and domestic companies have entered the field, further heating up the market
competition. If we cannot maintain our competitive advantages in technology, product, cost,
service and other areas, or the competitors combine their advantages and resources through
acquisition and merger, or the top technology companies in the world increase their
investment in the field of laser display, we may face the risks of decrease in the amount or
growth rate of operating income, gross margin, profitability and market share.
Risk of macro-environment
Thanks to the high efficiency and quick response of the Chinese government,
COVID-19 was under proper control in China, and cinemas reopened gradually from July
20. However, COVID-19 is still very serious throughout the rest of the world. In addition,
the deterioration of the relationship between China and the United States created more
uncertainty in the global economy. If the global economic declines continuously, resulting
in less consumer demands, our product lines will be affected to different degrees.
Risk of loss on external investments
We attempt to expand our scale of operation through merger, acquisition or otherwise
according to the development situation of the industry, to continuously improve our overall
competitiveness. If the environments or policies in respect of the industry in which the
investee operates undergo any material change, or the technological level of the investee
falls short of our expectation, or the operating performance of the investee decreases
sharply due to poor management, the returns on investment in the investee may fall short of
expectation and we may need to recognize an impairment loss on the long-term equity
investment. If we fail to achieve a synergy effect through acquisition of the investee, our
strategic plan may be unable to be implemented as scheduled.
III. Main business activities during the reporting period
Please refer to “I. Discussion and analysis of business situations” in this section for details.
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(I) Analysis of main business
1 Analysis of changes in the lines of financial statements
Unit: Yuan Currency: RMB
Item Amount of the current Amount of the prior
% Change
period period
Operating income 716,025,207.34 853,356,964.84 -16.09
Operating costs 529,787,789.94 511,757,903.12 3.52
Sales expenses 50,833,894.50 60,585,489.84 -16.10
Administration expenses 77,813,657.09 58,777,738.22 32.39
Financial expenses 8,037,691.04 17,357,639.69 -53.69
R&D expenses 87,295,450.75 89,309,489.80 -2.26
Net cash flow from operating
63,006,061.80 -14,543,413.52 N/A
activities
Net cash flows from investment
-92,315,802.97 -18,809,408.04 N/A
activities
Net cash flows from financing
-115,291,912.69 79,108,521.49 -245.74
activities
Description of reasons for changes in the operating income: The decrease in the operating
income by 16.09% year on year was primarily due to the shut-down of cinemas under the
impact of COVID-19, leading to the decrease of the Company’s cinema light source services
and sales; meanwhile, the decrease in demand both in and outside of China under the impact
of COVID-19 also affected the expansion of large venue, business education, and other
To-B operations.
Description of reasons for changes in the sales expenses: The decrease in the sales
expenses by 16.10% year on year was primarily due to the intensified expense control
implemented by the Company under the impact of COVID-19, which reduced the expenditures
in remuneration, travel expenses, and entertainment expenses relating to sales personnel,
and the marketing and advertising expenses.
Description of reasons for changes in the administration expenses: The increase in the
administrative expenses by 32.39% year on year was primarily due to the increase in
share-based payment and service fees relating to litigations during the period.
Description of reasons for changes in the financial expenses: The decrease in the
financial expenses by 53.69% year on year was primarily due to the reduction of long-term
loans of the Company and the reduced capital costs.
Description of reasons for changes in the R&D expenses: The R&D expenses decreased by
2.26% year on year, which were almost same as the prior period. The main reasons were
the stable R&D team and slightly increased depreciation and amortization, which were set
off by the slight decrease in material consumed in R&D and third-party service and test
during the period.
Description of reasons for changes in the net cash flows from operating activities: The
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increase in the net cash flows from operation activities was primarily due to the increased
settlement by using notes, which reduced the needs of cash payment for procurement, and
the decrease in taxes paid given the decline in the overall income and profit.
Description of reasons for changes in the net cash flows from investment activities: The
change was primarily caused by the buy-back of financial products and differences in
redemption amounts during the period.
Description of reasons for changes in the net cash flows from financing activities: The
net cash flows from financing activities changed from net inflows to net outflows, which
was primarily due to the reduction of new loans year on year because the Company gradually
reduced long-term loans bearing high interest rates.
2 Others
(1) DetaileddescriptionofmajorchangesintheprofitcompositionorprofitsourcesoftheCompany
□ Applicable√ N/A
(2) Others
□ Applicable√ N/A
(II) Explanation about material change in profit due to non-main business
□ Applicable√ N/A
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(III) Analysis of assets and liabilities
√ Applicable□ N/A
1. Statusofassetsandliabilities
Unit: Yuan
% of total
% of total assets Balance at the end
Balance at the end assets at the
Item at the end of the of the prior period % Change Remark
of the period end of the prior
period last year
period last year
Cash and bank Primarily due to the increase in the
729,447,665.39 23.66 522,897,380.65 23.72 39.50
balances working capital of the Company
Held-for-trading Primarily due to the purchase of wealth
495,000,000.00 16.06 N/A
financial assets management products by the Company
Primarily due to the implementation of
Contract assets 3,914,909.70 0.13 N/A new standard on incomes, which lead to
changes in the items presented
Other current 35,547,978.31 1.15 64,705,623.81 2.93 -45.06 Primarily due to the decrease in the input
assets VAT to be deducted
Primarily due to the investment in GDC
Long-term equity and adjustment of gains/losses on
268,154,993.87 8.70 134,030,375.31 6.08 100.07
investments long-term equity investment recognized
during this period
Primarily due to the increase in the
Construction in investment for the construction in
30,992,866.46 1.01 19,921,502.98 0.90 55.57
progress progress of the headquarters building of
Appotronics during this period
14,996,204.71 0.49 Primarily due to the increase in
Long-term
4,288,337.27 0.19 249.70 decoration expenses of newly leased
prepaid expenses
properties
Short-term Primarily due to the decrease of
115,636,028.30 3.75 242,000,000.00 10.98 -52.22
borrowings short-term borrowings of the Company
Primarily due to the increase in payment
Notes payable 126,525,026.22 4.10 31,926,388.58 1.45 296.30 by bank's acceptance bills for
procurement during this period
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2020 Semiannual Report
Primarily due to the implementation of
Contract liabilities 19,442,085.20 0.63 N/A new standard on incomes, which lead to
changes in the items presented
Primarily due to the decrease in the
Employee benefits
16,524,638.79 0.54 33,990,627.07 1.54 -51.38 number of staff during the period, leading
payable
to reduced bonuses and remuneration
Primarily due to the decreased payment
of enterprise income tax for the previous
Taxes payable 8,453,167.47 0.27 29,022,599.44 1.32 -70.87
year and the decline in taxes payable in
the current period
Primarily the land-transferring fees not
Other payables 42,106,615.24 1.37 187,575,802.83 8.51 -77.55 paid by the end of the prior period last
year
Non-current Primarily due to the increase in the
liabilities due 144,769,488.72 4.70 91,354,110.00 4.14 58.47 long-term borrowings due within one
within one year year
Primarily due to the implementation of
Other current
1,667,826.54 0.05 N/A new standard on incomes, and the taxes
liabilities
corresponding to contract liabilities
Primarily due to the transfer of long-term
Long-term
79,892,744.86 2.59 322,571,733.30 14.63 -75.23 borrowings to non-current liabilities due
borrowings
within one year
Primarily due to the provision of “three
Provisions 33,664,528.96 1.09 13,936,139.89 0.63 141.56 guarantee” service expenses that have not
be actually incurred
No other description.
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2. Encumbrancesonassetsasoftheendofthereportingperiod
√ Applicable□ N/A
Item Amount Reason
Other cash and bank balances - 23,151,615.78 Security deposit for notes and
security deposit letters of credit
Bank deposits - frozen funds 20,000,000.00 Funds frozen in connection with
litigations
Note: As of the date of this report, among the frozen funds stated above, RMB 20 million has been
released.
3. Otherinformation
□ Applicable√ N/A
(IV) Analysis of investments
1. Overallanalysisofexternalequityinvestments
√ Applicable□ N/A
At the end of the reporting period, the Company holds the long-term equity investment of RMB
268.1550 million, RMB 128.6206 million more than the opening amount, which is primarily due to the
additional investment in GDC Technology Limited (British Virgin Islands).
(1) Materialequityinvestments
√ Applicable□ N/A
In the twentieth session of the First Board of Directors held on December 6, 2019, the Proposal on
Proposed Additional Capital Contribution to the Wholly-owned Subsidiary and Foreign Investments in
GDC was discussed and approved, according to which it was agreed to make additional capital
contribution of USD 18.2 million to the Company’s wholly-owned subsidiary APPOTRONICS HONG
KONG LIMITED for acquisition of 36% shares of GDC Technology Limited (British Virgin Islands).
Please refer to the Announcement No. 2019-029 issued by the Company on www.sse.com.cn and the
designated media for information disclosure on December 7, 2019. In March 2020, the Company
completed the approval and filing procedures for overseas investments by National Development and
Reform Commission and Ministry of Commerce. After meeting the precedent closing conditions of this
acquisition, on April 9, 2020, the Company paid the total consideration of approximately USD 18.11
million by its own funds. During the reporting period, the Company holds 36% equity interests in GDC,
namely, 93,071,822 shares of GDC.
According to the report from KPMG, the net after-tax profit after deduction of non-operating
gains/losses realized by GDC in 2019 exceeded the promised performance covenant, hence completed
the performance covenant for 2019.
(2) Materialnon‐equityinvestments
□ Applicable√ N/A
(3) Financialassetsatfairvalue
√ Applicable□ N/A
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2020 Semiannual Report
As of June 30, 2020, the balance of held-for-trading financial assets was RMB 495,000,000.00,
which was structured deposits; the balance of investment in other equity instruments was RMB
11,975,419.38, which was investment in equity instruments not held for trading. The change in fair value
of such financial assets was RMB 0 in the reporting period.
(V) Sale of material assets and equities
□ Applicable√ N/A
(VI) Analysis of major investees
√ Applicable□ N/A
Unit: In RMB 0’000 RMB
Shareho
Comp Registered lding Operating
Main business Total assets Net assets Net profit
any capital percenta income
ge
Provision of
CINE cinema laser light
10,000.00 55.20% 89,516.04 34,032.98 7,852.89 -3,463.84
APPO source service and
sales of projectors
R&D and sale of
Feng
household display 5,000.00 55.00% 43,183.20 -3,907.37 39,633.59 -1,041.86
mi
products
Appot R&D and sale of
100.00
ronics laser light source 16,357.75 40,989.21 35,550.59 7,300.72 -300.61
%
HK
(VII) Structured entities controlled by the Company
□ Applicable√ N/A
IV. Other disclosures
(I) Warningoftheestimatethattheaccumulatednetprofitsfromthebeginningoftheyeartothe
endofthenextreportingperiodwillbenegativeorwillchangesignificantlycomparingwiththe
sameperiodofthepreviousyear,anddescription
√ Applicable□ N/A
Due to the impact of this epidemic, businesses in the movie industry where the Company's cinema
light source service belongs have also suspended, causing the Company stops its cinema service
business. Meanwhile, the shrink of consumption demand as the result of the macro environment has also
affected the Company's other businesses to a certain extent. As GDC invested by the Company belongs
to the cinema projection equipment industry, it is also affected by the discontinued operation of cinemas,
so that it may fail to achieve the expected results, which will increase the Company’s external
investment risks. Therefore, the Company is exposed to the risk that the Company's performance from
the beginning of the year to the end of the next reporting period will be lower than that of the same
period of the previous year.
(II) Otherdisclosures
□ Applicable√ N/A
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2020 Semiannual Report
Section V. Significant Matters
I. General meetings of shareholders held
Reference to resolutions
Date of disclosure of
Session Date of meeting published on the
resolutions
designated website
Annual general meeting May 22, 2020 www.sse.com.cn May 23, 2020
of shareholders in 2019
Explanation about the general meetings of shareholders
□ Applicable√ N/A
II. Proposals for profit distribution and capitalization of the capital reserve
(I) Profit distribution proposal or proposal for capitalization of capital reserve during the
reporting period
Whether to implement profit distribution or No
capitalization of capital reserve
Number of bonus shares distributed per 10 shares 0
Cash dividends distributed per 10 shares (inclusive 0
of tax)
Number of shares distributed out of the capital 0
reserve
Description of the proposal for profit distribution on ordinary shares and capitalization of the capital
reserve
None
III. Fulfillment of covenants
(I) Covenants made by the actual controller, shareholders, affiliates and acquirer of the
Company, the Company itself and other related parties during the reporting period or the
outstanding covenants made by them in the prior periods
√ Applicable□ N/A
Reason
Whether Wheth Action
for
there’s a er the plan if
failure to
time covena failing
fulfill
Backgrou Covena Validity limit for nt has to
Covenant the
nd of Covenantor nt period of the been fulfill
Type covenant
covenant Content covenant fulfillme strictly the
on time
nt of the fulfille covena
(if
covenan d on nt on
applicabl
t time time
e)
Restrictio Covenant Note 1 36 months Yes Yes N/A N/A
n on the by the after
sale of controlling completio
Covenant shares shareholder n of the
relating to regarding IPO and
IPO restriction the
on the sale extended
of shares period
held by stated
35 / 234
2020 Semiannual Report
him, below
voluntary
lock-up of
such
shares,
extension
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 2 36 months Yes Yes N/A N/A
n on the by the after
sale of actual completio
shares controller n of the
regarding IPO and
restriction the
on the sale extended
of shares period
held by stated
him, below,
Covenant voluntary and 6
relating to lock-up of months
IPO such after
shares, terminatio
extension n of
of lock-up employm
period, ent with
intention to the
hold and Company
dispose of
shares and
other
issues
Restrictio Covenant Note 3 36 months Yes Yes N/A N/A
n on the by the after
sale of concert completio
shares parties of n of the
the actual IPO and
controller the
regarding extended
restriction period
on the sale stated
Covenant
of shares below
relating to
held by
IPO
them,
voluntary
lock-up of
such
shares,
extension
of lock-up
period,
intention to
36 / 234
2020 Semiannual Report
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 4 12 months Yes Yes N/A N/A
n on the by the after
sale of directors completio
shares regarding n of the
restriction IPO and
on the sale the
of shares extended
held by period
them, stated
voluntary below
Covenant
lock-up of
relating to
such
IPO
shares,
extension
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 5 12 months Yes Yes N/A N/A
n on the by the after
sale of supervisors completio
shares regarding n of the
restriction IPO
on the sale
of shares
held by
them,
voluntary
Covenant
lock-up of
relating to
such
IPO
shares,
extension
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 6 12 months Yes Yes N/A N/A
n on the by HU Fei, after
sale of as a senior completio
Covenant
shares officer and n of the
relating to
member of IPO and
IPO
key the
technical extended
staff, period
37 / 234
2020 Semiannual Report
regarding stated
restriction below,
on the sale and 6
of shares months
held by after
him, terminatio
voluntary n of
lock-up of employm
such ent with
shares, the
extension Company
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 7 12 months Yes Yes N/A N/A
n on the by the after
sale of senior completio
shares officers n of the
BO IPO and
Lianming, the
WU Bin, extended
LI Lu, period
ZHAO stated
Ruijin and below
XIAO
Yangjian
regarding
restriction
Covenant on the sale
relating to of shares
IPO held by
them,
voluntary
lock-up of
such
shares,
extension
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 8 12 months Yes Yes N/A N/A
n on the by the key after
Covenant sale of technical completio
relating to shares staff YU n of the
IPO Xin, WU IPO and
Xiliang, listing of
WANG stock and
38 / 234
2020 Semiannual Report
Lin and the
GUO extended
Zuqiang period
regarding stated
restriction below
on the sale
of shares
held by
them,
voluntary
lock-up of
such
shares,
extension
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 9 12 months Yes Yes N/A N/A
n on the by the after
sale of holders of completio
shares more than n of the
5% shares IPO and
regarding listing of
restriction stock
on the sale
of shares
held by
them,
Covenant
voluntary
relating to
lock-up of
IPO
such
shares,
extension
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 10 12 months Yes Yes N/A N/A
n on the by the after
sale of other completio
shares shareholder n of the
Covenant s regarding IPO and
relating to restriction listing of
IPO on the sale stock
of shares
held by
them,
voluntary
39 / 234
2020 Semiannual Report
lock-up of
such
shares,
extension
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Restrictio Covenant Note 11 At least Yes Yes N/A N/A
n on the by the 12 months
sale of senior after
shares officers completio
and key n of the
employees IPO and
participatin listing of
g in the stock
strategic
allotment,
LI Yi, BO
Lianming,
WU Bin,
LI Lu,
GAO
Lijing,
CHEN
Xuxiang,
LAI
Covenant Yongsai
relating to and GAO
IPO Xiaohong,
regarding
restriction
on the sale
of shares
held by
him,
voluntary
lock-up of
such
shares,
extension
of lock-up
period,
intention to
hold and
dispose of
shares and
other
issues
Others Issuer’s Note 12 36 months Yes Yes N/A N/A
Covenant
plan for after
relating to
stabilizing completio
IPO
the n of the
40 / 234
2020 Semiannual Report
Company’s IPO and
stock price listing of
and stock
covenant
regarding
share
repurchase
measures
within
three years
after the
listing
Others Controlling Note 13 36 months Yes Yes N/A N/A
shareholder after
and the completio
actual n of the
controller’s IPO and
plan for listing of
stabilizing stock
the
Company’s
Covenant
stock price
relating to
and
IPO
covenant
regarding
share
repurchase
measures
within
three years
after the
listing
Others Directors Note 14 36 months Yes Yes N/A N/A
and senior after
officers’ completio
plan for n of the
stabilizing IPO and
the listing of
Company’s stock
stock price
Covenant
and
relating to
covenant
IPO
regarding
share
repurchase
measures
within
three years
after the
listing
Others Issuer’s Note 15 Permanen No Yes N/A N/A
covenant t
Covenant regarding
relating to measures
IPO against
fraud in
IPO
41 / 234
2020 Semiannual Report
Others Controlling Note 16 Permanen No Yes N/A N/A
shareholder t
, actual
controller
and their
Covenant concert
relating to parties’
IPO covenant
regarding
measures
against
fraud in
IPO
Others Directors, Note 17 Permanen No Yes N/A N/A
supervisors t
and senior
officers’
Covenant
covenant
relating to
regarding
IPO
measures
against
fraud in
IPO
Others Issuer’s Note 18 Permanen No Yes N/A N/A
covenant t
regarding
Covenant remedial
relating to measures
IPO for diluted
earnings in
the current
period
Others Controlling Note 19 Permanen No Yes N/A N/A
shareholder t
, actual
controller
and their
concert
Covenant parties’
relating to covenant
IPO regarding
remedial
measures
for diluted
earnings in
the current
period
Others Directors, Note 20 Term of No Yes N/A N/A
supervisors office
and senior
officers’
Covenant
covenant
relating to
regarding
IPO
remedial
measures
for diluted
earnings in
42 / 234
2020 Semiannual Report
the current
period
Others Issuer’s Note 21 Permanen No Yes N/A N/A
covenant t
Covenant
regarding
relating to
profit
IPO
distribution
policy
Others Issuer’s Note 22 Permanen No Yes N/A N/A
covenant t
regarding
restraint
measures
Covenant and
relating to liability for
IPO compensati
on in the
event of
failure to
fulfill its
covenants
Others Controlling Note 23 Permanen No Yes N/A N/A
shareholder t
, actual
controller
and their
concert
parties’
covenant
Covenant regarding
relating to restraint
IPO measures
and
liability for
compensati
on in the
event of
failure to
fulfill their
covenants
Others Directors, Note 24 Term of No Yes N/A N/A
supervisors office
and senior
officers’
covenant
regarding
restraint
Covenant
measures
relating to
and
IPO
liability for
compensati
on in the
event of
failure to
fulfill their
covenants
Covenant Resolve Controlling Note 25 Permanen No Yes N/A N/A
43 / 234
2020 Semiannual Report
relating to horizontal shareholder t
IPO competitio ’s covenant
n issues on
avoiding
horizontal
competitio
n and
regulating
and
reducing
related-part
y
transaction
s
Resolve Actual Note 26 Permanen No Yes N/A N/A
related-pa controller’s t
rty covenant
transactio on
n issues avoiding
horizontal
competitio
n and
regulating
and
reducing
related-part
y
transaction
s
Others Covenant Note 27 Permanen No Yes N/A N/A
by the t
grantee of
share
incentives
regarding
informatio
Covenant n
related to disclosure
share documents
incentives Others Company’s Note 28 Permanen No Yes N/A N/A
covenant t
on
refraining
from
providing
financial
assistance
Note 1:
Appotronics Holdings, as the controlling shareholder of the Company, hereby covenants that:
“1. With respect to the shares directly or indirectly held by us in the Company, we undertake:
(1) within 36 months after completion of the IPO and the extended period stated below (“Lock-up
Period”), not to transfer or appoint any other person to manage the shares held by us in the Company
44 / 234
2020 Semiannual Report
directly or indirectly issued prior to the IPO of the Company (“Pre-IPO Shares”), or to request the
Company to repurchase such Pre-IPO Shares; and
(2) to comply with the applicable laws and regulations, the Rules Governing the Listing of Stocks on the
Sci-tech Innovation Board of the Shanghai Stock Exchange and other business rules of the Shanghai
Stock Exchange regarding share transfer by the controlling shareholder and the actual controller of a
listed company.
The foregoing covenants shall not apply to any transfer to any person who controls, is controlled by or is
under common control with the transferor within 12 months after completion of the IPO.
2. If the closing price of the Company’s stock has been lower than the offering price of the IPO for 20
consecutive trading days within six months after completion of the IPO, or on the date that is six months
after completion of the IPO, the Lock-up Period for the shares held by us in the Company shall be
extended by an additional six months after the expiration of the initial Lock-up Period.
3. After the expiration of the Lock-up Period, if we dispose of any shares held by us in the Company, we
will do so in strict accordance with the applicable laws, rules, regulations and normative documents,
through call auction on the secondary market, private transfer, allotment, block trade or otherwise.
4. After the expiration of restriction on the sale of shares, if we dispose of any Pre-IPO Shares, we will
ensure that the Company continues to operate stably. If we transfer our control over the Company, we
will ensure that such transfer is conducted on an arm’s length basis, without prejudice to the legitimate
rights and interests of the Company and other shareholders. We are free from the following
circumstances upon the transfer of our control over the Company:
(1) any illegal occupation by us of the funds of the Company;
(2) any obligation owed by me to the Company’s debt or any outstanding guarantee offered by the
Company for me;
(3) any outstanding covenant made by us to the Company or any other shareholder; or
(4) any other circumstance on our part that has a material adverse effect on the interests of the Company
or the minority shareholders.
5. If we dispose of any Pre-IPO Shares within two years after the expiration of the Lock-up Period, the
selling price shall not be lower than the offering price of the IPO, as adjusted for any distribution of
dividends or bonus shares, capitalization of the capital reserve or rights issue by the Company during the
period from the date of listing of the Company’s stock to the date of such disposal pursuant to the
applicable rules of the Shanghai Stock Exchange. If we dispose of any Pre-IPO Shares two years after
the expiration of the Lock-up Period, the selling price shall be determined according to the market price
of the Company’s stock then.
6. We will strictly comply with the applicable laws, rules, regulations and normative documents, and
regulatory requirements, and will not dispose of any shares held by us in the Company during the
Lock-up Period. After the expiration of the Lock-up Period, we will formulate the share disposal plan in
a prudent manner, and dispose of the shares at such time as we deem fit in our sole discretion, taking
45 / 234
2020 Semiannual Report
into consideration the situations of the stock market, movement of the Company’s stock price, and the
relevant public information, subject to the applicable laws, rules, regulations and normative documents.
7. If we dispose of any shares held by us in the Company within two years after the expiration of the
Lock-up Period, we will do so in accordance with the provisions of the China Securities Regulatory
Commission and the Shanghai Stock Exchange regarding disposal of shares by a shareholder and the
relevant information disclosure.
8. If the Company meets the criteria for delisting due to any serious violation as set forth below, we will
not dispose of any shares held by us in the Company from the date that the relevant administration
penalty or judicial judgment is imposed or made, till the date of delisting of the Company’s stock:
(1) where the Company has committed fraud in IPO, seriously violated the laws regarding information
disclosure or otherwise seriously disrupted the order of stock market, as a result of which its listing
status is seriously undermined; or
(2) where the Company has seriously violated the laws regarding national security, public security,
ecological security, production safety or public health, and such violation is of a serious nature, has
seriously damaged the national interest or public interest, or seriously undermined its listing status.
9. We will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect
regarding the duties and obligations of a shareholder.
10. We will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
Note 2：
LI Yi, as the actual controller of the Company, hereby undertakes:
“1. With respect to the shares directly or indirectly held by me in the Company, I undertake:
(1) within 36 months after completion of the IPO and the extended period stated below, and 6 months
after termination of my employment with the Company (“Lock-up Period”), not to transfer or appoint
any other person to manage the shares held by me in the Company directly or indirectly issued prior to
the IPO of the Company (“Pre-IPO Shares”), or to request the Company to repurchase such Pre-IPO
Shares;
The foregoing covenants shall not apply to any transfer to any person who controls, is controlled by or is
under common control with the transferor within 12 months after completion of the IPO;
(2) within four years after the expiration of restriction on the sale of Pre-IPO shares, not to transfer more
than 25% of the total Pre-IPO Shares held by me in aggregate every year;
(3) so long as I remain a director of the Company, not to transfer more than 25% of the total shares held
by me in the Company;
46 / 234
2020 Semiannual Report
(4) within half a year after I retire from my post as director of the Company, not to transfer any shares
held by me in the Company; and
(5) to comply with the applicable laws and regulations, the Rules Governing the Listing of Stocks on the
Sci-tech Innovation Board of the Shanghai Stock Exchange and other business rules of the Shanghai
Stock Exchange regarding share transfer by the actual controller, directors or key technical staff of a
listed company.
I will comply with foregoing covenants notwithstanding any change in my shareholding in the Company
due to any equity distribution made by the Company or otherwise.
2. If the closing price of the Company’s stock has been lower than the offering price of the IPO for 20
consecutive trading days within six months after completion of the IPO, or on the date that is six months
after completion of the IPO, the Lock-up Period for the shares held by me in the Company shall be
extended by an additional six months after the expiration of the initial Lock-up Period.
3. After the expiration of the Lock-up Period, if I dispose of any shares held by me in the Company, I
will do so in strict accordance with the applicable laws, rules, regulations and normative documents,
through call auction on the secondary market, private transfer, allotment, block trade or otherwise.
4. After the expiration of restriction on the sale of shares, if I dispose of any Pre-IPO Shares, I will
ensure that the Company continues to operate stably. If I transfer my control over the Company, I will
ensure that such transfer is conducted on an arm’s length basis, without prejudice to the legitimate rights
and interests of the Company and other shareholders. I am free from the following circumstances upon
the transfer of my control over the Company:
(1) any illegal occupation by us of the funds of the Company;
(2) any obligation owed by me to the Company’s debt or any outstanding guarantee offered by the
Company for me;
(3) any outstanding covenant made by us to the Company or any other shareholder; or
(4) any other circumstance on our part that has a material adverse effect on the interests of the Company
or the minority shareholders.
5. If I dispose of any Pre-IPO Shares within two years after the expiration of the Lock-up Period, the
selling price shall not be lower than the offering price of the IPO, as adjusted for any distribution of
dividends or bonus shares, capitalization of the capital reserve or rights issue by the Company during the
period from the date of listing of the Company’s stock to the date of such disposal pursuant to the
applicable rules of the Shanghai Stock Exchange. If we dispose of any Pre-IPO Shares two years after
the expiration of the Lock-up Period, the selling price shall be determined according to the market price
of the Company’s stock then.
6. I will strictly comply with the applicable laws, rules, regulations and normative documents, and
regulatory requirements, and will not dispose of any shares held by me in the Company during the
Lock-up Period. After the expiration of the Lock-up Period, I will formulate the share disposal plan in a
prudent manner, and dispose of the shares at such time as we deem fit in our sole discretion, taking into
47 / 234
2020 Semiannual Report
consideration the situations of the stock market, movement of the Company’s stock price, and the
relevant public information, subject to the applicable laws, rules, regulations and normative documents.
7. During my employment with the Company, I will truthfully report the shares held by me in the
Company and changes therein to the Company on a regular basis (other than changes arising from any
dividend distribution or capitalization of the capital reserve by the Company).
8. If I dispose of any shares held by me in the Company within two years after the expiration of the
Lock-up Period, I will do so in accordance with the provisions of the China Securities Regulatory
Commission and the Shanghai Stock Exchange regarding disposal of shares by the actual controller,
directors or key technical staff and the relevant information disclosure.
9. If the Company meets the criteria for delisting due to any serious violation as set forth below, I will
not dispose of any shares held by me in the Company from the date that the relevant administration
penalty or judicial judgment is imposed or made, till the date of delisting of the Company’s stock:
(1) where the Company has committed fraud in IPO, seriously violated the laws regarding information
disclosure or otherwise seriously disrupted the order of stock market, as a result of which its listing
status is seriously undermined; or
(2) where the Company has seriously violated the laws regarding national security, public security,
ecological security, production safety or public health, and such violation is of a serious nature, has
seriously damaged the national interest or public interest, or seriously undermined its listing status.
10. I will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect
regarding the duties and obligations of the actual controller, directors and key technical staff.
11. I will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
Note 3：
Each of the concert parties of the actual controller of the Company hereby covenants that:
“1. With respect to the shares directly or indirectly held by us in the Company, we undertake:
(1) within 36 months after completion of the IPO and the extended period stated below (“Lock-up
Period”), not to transfer or appoint any other person to manage the shares held by us in the Company
directly or indirectly issued prior to the IPO of the Company (“Pre-IPO Shares”), or to request the
Company to repurchase such Pre-IPO Shares; and
(2) to comply with the applicable laws and regulations, the Rules Governing the Listing of Stocks on the
Sci-tech Innovation Board of the Shanghai Stock Exchange and other business rules of the Shanghai
Stock Exchange regarding share transfer by the controlling shareholder and the actual controller of a
listed company.
48 / 234
2020 Semiannual Report
The foregoing covenants shall not apply to any transfer to any person who controls, is controlled by or is
under common control with the transferor within 12 months after completion of the IPO.
2. If the closing price of the Company’s stock has been lower than the offering price of the IPO for 20
consecutive trading days within six months after completion of the IPO, or on the date that is six months
after completion of the IPO, the Lock-up Period for the shares held by us in the Company shall be
extended by an additional six months after the expiration of the initial Lock-up Period.
3. After the expiration of the Lock-up Period, if we dispose of any shares held by us in the Company, we
will do so in strict accordance with the applicable laws, rules, regulations and normative documents,
through call auction on the secondary market, private transfer, allotment, block trade or otherwise.
4. If we dispose of any Pre-IPO Shares within two years after the expiration of the Lock-up Period, the
selling price shall not be lower than the offering price of the IPO, as adjusted for any distribution of
dividends or bonus shares, capitalization of the capital reserve or rights issue by the Company during the
period from the date of listing of the Company’s stock to the date of such disposal pursuant to the
applicable rules of the Shanghai Stock Exchange. If we dispose of any Pre-IPO Shares two years after
the expiration of the Lock-up Period, the selling price shall be determined according to the market price
of the Company’s stock then.
5. We will strictly comply with the applicable laws, rules, regulations and normative documents, and
regulatory requirements, and will not dispose of any shares held by us in the Company during the
Lock-up Period. After the expiration of the Lock-up Period, we will formulate the share disposal plan in
a prudent manner, and dispose of the shares at such time as we deem fit in our sole discretion, taking
into consideration the situations of the stock market, movement of the Company’s stock price, and the
relevant public information, subject to the applicable laws, rules, regulations and normative documents.
6. If we dispose of any shares held by us in the Company within two years after the expiration of the
Lock-up Period, we will do so in accordance with the provisions of the China Securities Regulatory
Commission and the Shanghai Stock Exchange regarding disposal of shares by a shareholder and the
relevant information disclosure.
7. If the Company meets the criteria for delisting due to any serious violation as set forth below, we will
not dispose of any shares held by us in the Company from the date that the relevant administration
penalty or judicial judgment is imposed or made, till the date of delisting of the Company’s stock:
(1) where the Company has committed fraud in IPO, seriously violated the laws regarding information
disclosure or otherwise seriously disrupted the order of stock market, as a result of which its listing
status is seriously undermined; or
(2) where the Company has seriously violated the laws regarding national security, public security,
ecological security, production safety or public health, and such violation is of a serious nature, has
seriously damaged the national interest or public interest, or seriously undermined its listing status.
8. We will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect
regarding the duties and obligations of a shareholder.
49 / 234
2020 Semiannual Report
9. We will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
Note 4：
Each director of the Company, who is also a shareholder, hereby covenants that:
“1. With respect to the shares directly or indirectly held by me in the Company, within 12 months after
completion of the IPO and the extended period stated below (“Lock-up Period”), I will not transfer or
appoint any other person to manage the shares held by me in the Company directly or indirectly issued
prior to the IPO of the Company (“Pre-IPO Shares”), or request the Company to repurchase such
Pre-IPO Shares.
2. If the closing price of the Company’s stock has been lower than the offering price of the IPO for 20
consecutive trading days within six months after completion of the IPO, or on the date that is six months
after completion of the IPO, the Lock-up Period for the shares held by me in the Company shall be
extended by an additional six months after the expiration of the initial Lock-up Period.
3. During my employment with the Company, I will truthfully report the shares held by me in the
Company and changes therein to the Company on a regular basis (other than changes arising from any
dividend distribution or capitalization of the capital reserve by the Company).
4. If I dispose of any Pre-IPO Shares within two years after the expiration of the Lock-up Period, the
selling price shall not be lower than the offering price of the IPO, as adjusted for any distribution of
dividends or bonus shares, capitalization of the capital reserve, issuance of new shares or rights issue by
the Company during the period from the date of listing of the Company’s stock to the date of such
disposal pursuant to the applicable rules of the Shanghai Stock Exchange. If the Company has
distributed any dividends or bonus shares, capitalized the capital reserve or made any rights issue during
the period from the date of listing of the Company’s stock to the date of such disposal, the minimum
selling price and number of shares salable shall be adjusted accordingly.
5. If I retire from my post as director of the Company prior to the expiration of my term of office, I will
comply with the following restrictive provisions:
(1) so long as I remain a director of the Company, I will not transfer more than 25% of the total shares
held by me in the Company; and
(2) within half a year after I retire from my post as director of the Company, I will not transfer any
shares held by me in the Company.
I will comply with foregoing covenants notwithstanding any change in my shareholding in the Company
due to any equity distribution made by the Company or otherwise.
6. If the Company meets the criteria for delisting due to any serious violation as set forth below, I will
not dispose of any shares held by me in the Company from the date that the relevant administration
penalty or judicial judgment is imposed or made, till the date of delisting of the Company’s stock:
50 / 234
2020 Semiannual Report
(1) where the Company has committed fraud in IPO, seriously violated the laws regarding information
disclosure or otherwise seriously disrupted the order of stock market, as a result of which its listing
status is seriously undermined; or
(2) where the Company has seriously violated the laws regarding national security, public security,
ecological security, production safety or public health, and such violation is of a serious nature, has
seriously damaged the national interest or public interest, or seriously undermined its listing status.
7. I will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect.
8. If I acquire any additional shares of the Company or become eligible to sell any shares held by me in
the Company, I will strictly comply with, and cooperate with the Company to comply with, all
applicable information disclosure provisions and requirements regarding the dealings in the Company’s
shares.
I will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith. If I fail to perform my duties and obligations under the covenants set forth above, I will
indemnify the Company and other shareholders or stakeholders of the Company for the losses arising
therefrom according to law, and surrender my gains from illegal disposal of the Company’s shares (if
any) to the Company. ”
Note 5:
Each supervisor of the Company, who is also a shareholder, hereby covenants that:
“1. With respect to the shares directly or indirectly held by me in the Company, within 12 months after
completion of the IPO (“Lock-up Period”), I will not transfer or appoint any other person to manage the
shares held by me in the Company directly or indirectly issued prior to the IPO of the Company
(“Pre-IPO Shares”), or request the Company to repurchase such Pre-IPO Shares.
2. During my employment with the Company, I will truthfully report the shares held by me in the
Company and changes therein to the Company on a regular basis (other than changes arising from any
dividend distribution or capitalization of the capital reserve by the Company).
3. If I retire from my post as supervisor of the Company prior to the expiration of my term of office, I
will comply with the following restrictive provisions:
(1) so long as I remain a supervisor of the Company, I will not transfer more than 25% of the total shares
held by me in the Company; and
(2) within half a year after I retire from my post as supervisor of the Company, I will not transfer any
shares held by me in the Company.
I will comply with foregoing covenants notwithstanding any change in my shareholding in the Company
due to any equity distribution made by the Company or otherwise.
4. If the Company meets the criteria for delisting due to any serious violation as set forth below, I will
not dispose of any shares held by me in the Company from the date that the relevant administration
penalty or judicial judgment is imposed or made, till the date of delisting of the Company’s stock:
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(1) where the Company has committed fraud in IPO, seriously violated the laws regarding information
disclosure or otherwise seriously disrupted the order of stock market, as a result of which its listing
status is seriously undermined; or
(2) where the Company has seriously violated the laws regarding national security, public security,
ecological security, production safety or public health, and such violation is of a serious nature, has
seriously damaged the national interest or public interest, or seriously undermined its listing status.
5. I will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect
regarding the duties and obligations of a supervisor.
6. If I acquire any additional shares of the Company or become eligible to sell any shares held by me in
the Company, I will strictly comply with, and cooperate with the Company to comply with, all
applicable information disclosure provisions and requirements regarding the dealings in the Company’s
shares.
7. I will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith. ”
Note 6:
HU Fei, as the deputy general manager and member of key technical staff of the Company, hereby
covenants that:
“1. With respect to the shares directly or indirectly held by me in the Company, I undertake:
(1) within 12 months after listing of the Company’s stock and the extended period stated below, and 6
months after termination of my employment with the Company (“Lock-up Period”), not to transfer or
appoint any other person to manage the shares held by me in the Company directly or indirectly issued
prior to the IPO of the Company (“Pre-IPO Shares”), or to request the Company to repurchase such
Pre-IPO Shares;
(2) within four years after the expiration of restriction on the sale of Pre-IPO shares, not to transfer more
than 25% of the total Pre-IPO Shares held by me in aggregate every year;
(3) so long as I remain a senior officer of the Company, not to transfer more than 25% of the total shares
held by me in the Company;
(4) within half a year after I retire from my post as senior officer of the Company, not to transfer any
shares held by me in the Company; and
(5) to comply with the applicable laws and regulations, the Rules Governing the Listing of Stocks on the
Sci-tech Innovation Board of the Shanghai Stock Exchange and other business rules of the Shanghai
Stock Exchange.
2. If the closing price of the Company’s stock has been lower than the offering price of the IPO for 20
consecutive trading days within six months after completion of the IPO, or on the date that is six months
after completion of the IPO, the Lock-up Period for the shares held by me in the Company shall be
extended by an additional six months after the expiration of the initial Lock-up Period.
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3. If I dispose of any Pre-IPO Shares within two years after the expiration of the Lock-up Period, the
selling price shall not be lower than the offering price of the IPO, as adjusted for any distribution of
dividends or bonus shares, capitalization of the capital reserve, issuance of new shares or rights issue by
the Company during the period from the date of listing of the Company’s stock to the date of such
disposal pursuant to the applicable rules of the Shanghai Stock Exchange. If the Company has
distributed any dividends or bonus shares, capitalized the capital reserve or made any rights issue during
the period from the date of listing of the Company’s stock to the date of such disposal, the minimum
selling price and number of shares salable shall be adjusted accordingly.
4. If the Company meets the criteria for delisting due to any serious violation as set forth below, I will
not dispose of any shares held by me in the Company from the date that the relevant administration
penalty or judicial judgment is imposed or made, till the date of delisting of the Company’s stock:
(1) where the Company has committed fraud in IPO, seriously violated the laws regarding information
disclosure or otherwise seriously disrupted the order of stock market, as a result of which its listing
status is seriously undermined; or
(2) where the Company has seriously violated the laws regarding national security, public security,
ecological security, production safety or public health, and such violation is of a serious nature, has
seriously damaged the national interest or public interest, or seriously undermined its listing status.
5. I will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect.
6. During my employment with the Company, I will truthfully report the shares held by me in the
Company and changes therein to the Company on a regular basis (other than changes arising from any
dividend distribution or capitalization of the capital reserve by the Company). If I acquire any additional
shares of the Company or become eligible to sell any shares held by me in the Company, I will strictly
comply with, and cooperate with the Company to comply with, all applicable information disclosure
provisions and requirements regarding the dealings in the Company’s shares.
7. I will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith. ”
Note 7:
Each of the senior officers of the Company other than HU Fei, who is also a shareholder, hereby
covenants that:
“1. With respect to the shares directly or indirectly held by me in the Company, within 12 months after
completion of the IPO and the extended period stated below (“Lock-up Period”), I will not transfer or
appoint any other person to manage the shares held by me in the Company directly or indirectly issued
prior to the IPO of the Company (“Pre-IPO Shares”), or request the Company to repurchase such
Pre-IPO Shares.
2. If the closing price of the Company’s stock has been lower than the offering price of the IPO for 20
consecutive trading days within six months after completion of the IPO, or on the date that is six months
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after completion of the IPO, the Lock-up Period for the shares held by me in the Company shall be
extended by an additional six months after the expiration of the initial Lock-up Period.
3. During my employment with the Company, I will truthfully report the shares held by me in the
Company and changes therein to the Company on a regular basis (other than changes arising from any
dividend distribution or capitalization of the capital reserve by the Company).
4. If I dispose of any Pre-IPO Shares within two years after the expiration of the Lock-up Period, the
selling price shall not be lower than the offering price of the IPO, as adjusted for any distribution of
dividends or bonus shares, capitalization of the capital reserve, issuance of new shares or rights issue by
the Company during the period from the date of listing of the Company’s stock to the date of such
disposal pursuant to the applicable rules of the Shanghai Stock Exchange. If the Company has
distributed any dividends or bonus shares, capitalized the capital reserve or made any rights issue during
the period from the date of listing of the Company’s stock to the date of such disposal, the minimum
selling price and number of shares salable shall be adjusted accordingly.
5. If I retire from my post as senior officer of the Company prior to the expiration of my term of office, I
will comply with the following restrictive provisions:
(1) so long as I remain a director of the Company, I will not transfer more than 25% of the total shares
held by me in the Company; and
(2) within half a year after I retire from my post as director of the Company, I will not transfer any
shares held by me in the Company.
I will comply with foregoing covenants notwithstanding any change in my shareholding in the Company
due to any equity distribution made by the Company or otherwise.
6. If the Company meets the criteria for delisting due to any serious violation as set forth below, I will
not dispose of any shares held by me in the Company from the date that the relevant administration
penalty or judicial judgment is imposed or made, till the date of delisting of the Company’s stock:
(1) where the Company has committed fraud in IPO, seriously violated the laws regarding information
disclosure or otherwise seriously disrupted the order of stock market, as a result of which its listing
status is seriously undermined; or
(2) where the Company has seriously violated the laws regarding national security, public security,
ecological security, production safety or public health, and such violation is of a serious nature, has
seriously damaged the national interest or public interest, or seriously undermined its listing status.
7. I will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect.
8. If I acquire any additional shares of the Company or become eligible to sell any shares held by me in
the Company, I will strictly comply with, and cooperate with the Company to comply with, all
applicable information disclosure provisions and requirements regarding the dealings in the Company’s
shares.
9. I will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith. ”
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Note 8:
Each of the members of key technical staff of the Company other than LI Yi and HU Fei, who is also a
shareholder, hereby covenants that:
“1. Within 12 months after completion of the IPO and listing of stock (“the IPO”) and the extended
period stated below (“Lock-up Period”), I will not transfer or appoint any other person to manage the
shares held by me in the Company directly or indirectly issued prior to the IPO of the Company
(“Pre-IPO Shares”), or request the Company to repurchase such Pre-IPO Shares.
2. Within four years after the expiration of the Lock-up Period, I will not transfer more than 25% of the
total Pre-IPO Shares held by me in aggregate every year. If the Company has distributed any dividends
or bonus shares, capitalized the capital reserve or made any rights issue during such period, the number
of shares salable shall be adjusted accordingly.
3. During my employment with the Company, I will truthfully report the shares held by me in the
Company and changes therein to the Company on a regular basis (other than changes arising from any
dividend distribution or capitalization of the capital reserve by the Company). If I acquire any additional
shares of the Company or become eligible to sell any shares held by me in the Company, I will strictly
comply with, and cooperate with the Company to comply with, all applicable information disclosure
provisions and requirements regarding the dealings in the Company’s shares.
4. I will strictly comply with the applicable laws and regulations, the Rules Governing the Listing of
Stocks on the Sci-tech Innovation Board of the Shanghai Stock Exchange and other business rules of the
Shanghai Stock Exchange, and the Articles of Association of Appotronics Corporation Limited in effect.
5. I will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith. ”
Note 9：
Each of the holders of more than 5% of the shares of the issuer hereby covenants that:
“1. With respect to the shares directly or indirectly held by us in the Company, within 12 months after
completion of the IPO (“Lock-up Period”), we will not transfer or appoint any other person to manage
the shares held by us in the Company directly or indirectly issued prior to the IPO of the Company
(“Pre-IPO Shares”), or request the Company to repurchase such Pre-IPO Shares.
2. After the expiration of the Lock-up Period, if we dispose of any shares held by me/us in the Company,
we will do so in strict accordance with the applicable laws, rules, regulations and normative documents,
through call auction on the secondary market, private transfer, allotment, block trade or otherwise.
3. If we dispose of any Pre-IPO Shares within two years after the expiration of the Lock-up Period, the
selling price shall not be lower than the offering price of the IPO, as adjusted for any distribution of
dividends or bonus shares, capitalization of the capital reserve or rights issue by the Company during the
period from the date of listing of the Company’s stock to the date of such disposal pursuant to the
applicable rules of the Shanghai Stock Exchange. If we dispose of any Pre-IPO Shares two years after
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the expiration of the Lock-up Period, the selling price shall be determined according to the market price
of the Company’s stock then.
4. We will strictly comply with the applicable laws, rules, regulations and normative documents, and
regulatory requirements, and will not dispose of any shares held by us in the Company during the
Lock-up Period. After the expiration of the Lock-up Period, we will formulate the share disposal plan in
a prudent manner, and dispose of the shares at such time as we deem fit in our sole discretion, taking
into consideration the situations of the stock market, movement of the Company’s stock price, and the
public information, subject to the releavnt laws, rules, regulations and normative documents.
5. If we dispose of any shares held by us in the Company within two years after the expiration of the
Lock-up Period, we will do so in accordance with the provisions of the China Securities Regulatory
Commission and the Shanghai Stock Exchange regarding disposal of shares by a shareholder and the
relevant information disclosure.
6. We will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect
regarding the duties and obligations of a shareholder.
We will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith. ”
Note 10:
Each of the other corporate shareholders hereby covenants that:
“1. With respect to the shares directly or indirectly held by us in the Company, within 12 months after
completion of the IPO (“Lock-up Period”), we will not transfer or appoint any other person to manage
the shares held by us in the Company directly or indirectly issued prior to the IPO of the Company
(“Pre-IPO Shares”), or request the Company to repurchase such Pre-IPO Shares.
2. We will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect
regarding the duties and obligations of a shareholder.
3. If we acquire any additional shares of the Company or become eligible to sell any shares held by us in
the Company, we will strictly comply with, and cooperate with the Company to comply with, all
applicable information disclosure provisions and requirements regarding the dealings in the Company’s
shares.
We will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith. ”
Each of the other natural-person shareholders hereby covenants that:
“1. With respect to the shares directly or indirectly held by me in the Company, within 12 months after
completion of the IPO (“Lock-up Period”), I will not transfer or appoint any other person to manage the
shares held by me in the Company directly or indirectly issued prior to the IPO of the Company
(“Pre-IPO Shares”), or request the Company to repurchase such Pre-IPO Shares.
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2. I will strictly comply with the provisions and requirements of the applicable laws, rules, regulations
and normative documents, and the Articles of Association of Appotronics Corporation Limited in effect
regarding the duties and obligations of a shareholder.
3. If I acquire any additional shares of the Company or become eligible to sell any shares held by me in
the Company, I will strictly comply with, and cooperate with the Company to comply with, all
applicable information disclosure provisions and requirements regarding the dealings in the Company’s
shares.
I will faithfully fulfill the covenants set forth above and assume the legal liabilities in connection
therewith. ”
Note 11:
Each of the senior officers and key employees participating in the strategic allotment, namely LI Yi, BO
Lianming, WU Bin, LI Lu, GAO Lijing, CHEN Xuxiang, LAI Yongsai and GAO Xiaohong, hereby
covenants that:
“1. I am the actual holder of the asset management plan, and have not participated in the strategic
allotment on behalf of any other investor or appointed any other investor to participate in the strategic
allotment on my behalf;
2. I use my own funds to participate in the strategic allotment;
3. I believe in the long-term investment value of the Company, and agree with the asset management
plan to subscribe for the shares available to it through the strategic allotment at such offering price as
finally determined;
4. I agree to accept such number of shares available through the strategic allotment as finally determined
by the issuer and the lead underwriter, subject to the number/amount of share that the asset management
plan undertakes to subscribe for;
5. I will not participate in the online or off-line offering in connection with the IPO of the Company;
6. I will hold the shares acquired through the strategic allotment for a period of not less than 12 months,
calculated from the date of listing of the shares publically offered this time;
7. I will not transfer any shares held by me under the asset management plan during the Lock-up Period
in any manner;
8. There isn’t any illegal benefit transfer between me and the Company or any other stakeholder. ”
Note 12:
The issuer hereby covenants:
“I. Conditions for triggering and stopping the stock price stabilization measures
(I) Condition for triggering the measures
If, within 36 months after completion of the IPO and listing of the Company’s RMB-denominated
ordinary shares (A-shares) on the STAR Market (“IPO”), the closing price of the Company’s stock has
been lower than its most recently audited net assets per share (as adjusted for any distribution of
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dividends or bonus shares, capitalization of the capital reserve, issuance of new shares or rights issue by
the Company) for 20 consecutive trading days (“Trigger Condition” or “Trigger Condition for
Stabilization of Stock Price”), except for any event of force majeure, the Company and the related
persons shall take the following measures to stabilize the Company’s stock price subject to the
provisions of the China Securities Regulatory Commission (“CSRC”) and the Shanghai Stock Exchange
(“SSE”) regarding share repurchase, acquisition of additional shares and information disclosure and
other applicable provisions:
(1) repurchase of shares by the Company;
(2) acquisition of additional shares of the Company by the controlling shareholder and the actual
controller;
(3) acquisition of additional shares of the Company by the directors and senior officers;
(4) other measures permitted by the applicable laws, rules, regulations and normative documents, and
the CSRC and the SSE.
If the Company intends to repurchase shares upon satisfaction of the Trigger Condition, the Company
shall hold a meeting of the Board of Directors within 10 days and a general meeting of shareholders
within 30 days, to review the specific proposal for stabilizing the stock price and the period for
implementing such proposal, and implement such proposal within five trading days after the same has
been approved by the general meeting of shareholders.
(2) Condition for stopping the measures
If, prior to or during the implementation of the stock price stabilization measures, the closing price of the
Company’s stock has been higher than its most recently audited net assets per share for 20 consecutive
trading days, the Company shall stop the stock price stabilization measures to the extent permitted by the
applicable laws, rules, regulations and normative documents.
After the stock price stabilization measures have been completed or stopped, if the Trigger Condition is
satisfied again, the Company shall implement the stock price stabilization plan again.
II. Measures for stabilizing the stock price of the Company
Upon satisfaction of the Trigger Condition, the Company and its controlling shareholder, actual
controller, directors and senior officers shall promptly take all or part of the following measures to
stabilize the stock price of the Company:
(I) Repurchase of shares by the Company
1. Any share repurchase by the Company for purpose of stabilizing its stock price shall comply with the
Contract Law of the People’s Republic of China, the Securities Law of the People’s Republic of China,
the Administrative Measures for Repurchase by the Listed Companies of their Public Shares (Tentative),
the Supplementary Provisions on Repurchase by the Listed Companies of their Public Shares through
Call Auction, the Opinion on Supporting Repurchase by the Listed Companies of their Public Shares,
the Rules of the Shanghai Stock Exchange for Implementation of Share Repurchase by the Listed
Companies, and other applicable laws, rules, regulations and normative documents.
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2. Any share repurchase by the Company for purpose of stabilizing its stock price shall meet the
following conditions:
(1) the Company’s stock has been listed for at least one year;
(2) after the completion of such share repurchase, the Company shall be solvent and have the ability to
continue as a going concern;
(3) after the completion of such share repurchase, the shareholding structure of Company shall continue
to meet the listing conditions; and
(4) such other conditions as may be set forth by the CSRC.
If the Company repurchases shares for purpose of stabilizing its stock price and reduces its registered
capital accordingly, the Company may do so even if its stock has been listed for less than one year.
3. The share repurchase proposal requires the approval of the shareholders representing more than two
thirds of the total votes present at the general meeting of shareholders. The controlling shareholder and
the actual controller of the Company undertake to vote for such share repurchase proposal.
4. The general meeting of shareholders may authorize the Board of Directors to decide on the share
repurchase proposal, provided that the relevant resolution of the general meeting of shareholders shall
specify the specific powers delegated to the Board of Directors and the delegation period. The resolution
of the Board of Directors on the share repurchase proposal requires the approval of more than two thirds
of the directors present at the meeting of the Board of Directors. The non-independent directors of the
Company undertake to vote for the share repurchase proposal (to the extent that they have the voting
power).
5. After the share repurchase proposal has been approved by the general meeting of shareholders, the
Company shall notify its creditors and submit the relevant documents and go through the applicable
approval or filing procedures with the CSRC, the SSE and other competent authorities according to law, ,
and may implement the share repurchase proposal only after the applicable approval, filing, information
disclosure and other procedures have been completed. If the share repurchase proposal fails to be
approved by the general meeting of shareholders, the Company shall procure the controlling shareholder
and the actual controller to perform their obligations to acquire additional shares of the Company as
promised by them.
6. In addition to the requirements of the applicable laws, rules, regulations and normative documents,
any share repurchase by the Company for purpose of stabilizing its stock price shall also comply with
the following provisions:
(1) the Company shall repurchase its shares on the secondary market through call auction or tender offer;
(2) the total amount used by the Company in the share repurchase shall not exceed 80% of its IPO net
proceeds;
(3) the total number of shares repurchased by the Company within 12 consecutive months shall not
exceed 2% of the total shares of the Company as of the end of the preceding year; and
(4) the total amount used by the Company under a share repurchase plan shall not be lower than 5% and
not be more than 10% of its audited net profit attributable to the shareholders of the parent company for
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the preceding accounting year, or such other higher ratio may be applied as approved by the Board of
Directors;
In case of any conflict between the provisions of Paragraph (3) and Paragraph (4) above, Paragraph (3)
shall prevail.
(5) the Company may use its own funds, proceeds from issuance of preferred shares or bonds, the excess
funds raised through issuance of ordinary shares beyond what is actually required, the surplus funds of
the projects in which the funds raised invest, the funds raised that have been permanently applied to
replenish working capital according to law, loans from financial institutions and other legal funds to
repurchase its shares.
7. The Board of Directors of the Company shall pay close attention to the Company’s capital position,
solvency and ability to continue as a going concern, draw up and implement the share repurchase plan
prudently, and ensure that the number and amount of the shares repurchased are appropriate for the
actual financial condition of the Company.
The Company shall establish sound and effective internal controls in respect of share repurchase, draw
up the detailed operation plans, prevent insider trading and other unfair transactions, and shall not
manipulate its stock price or make any illegal benefit transfer to any of its directors, supervisors, senior
officers, controlling shareholder or actual controller through any share repurchase.
(II) Acquisition of additional shares of the Company by the controlling shareholder and the actual
controller
1. Upon satisfaction of the Trigger Condition, if the Company is unable to make share repurchase, the
controlling shareholder and the actual controller shall acquire additional shares of the Company, subject
to the Administrative Measures for the Acquisition of the Listed Companies and other applicable laws,
rules, regulations and normative documents, provided that such transaction will not cause the
shareholding structure of Company to cease to meet the listing conditions and/or trigger obligation to
make a tender offer by the controlling shareholder.
2. Subject to Paragraph 1 above, the controlling shareholder and the actual controller of the Company
shall, within 10 trading days after satisfaction of the Trigger Condition, notify the Company in writing of
their plan to acquire additional shares, which shall specify, among others, the scope of number of shares
to be acquired, upper limit of the purchase price and time limit for such acquisition. The Company shall
announce such plan within 3 trading days prior to the implementation of such plan.
3. The controlling shareholder and the actual controller shall acquire additional shares of the Company
on the secondary market through call auction or otherwise legally.
4. The stock price stabilization plan implemented by the controlling shareholder and the actual controller
shall also comply with the following provisions:
(1) the amount used by the controlling shareholder and the actual controller in the acquisition of
additional shares under a single plan shall not be lower than 20% of the aggregate cash dividends (after
tax) received by them from the Company after the listing of the Company;
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(2) the total amount used by the controlling shareholder and the actual controller in the acquisition of
additional shares under a single plan or within 12 consecutive months shall not exceed 50% of the
aggregate cash dividends (after tax) received by them from the Company after the listing of the
Company;
(3) the total number of additional shares acquired by the controlling shareholder and the actual controller
under a single plan shall not exceed 2% of the total shares of the Company; and
(4) the purchase price paid by the controlling shareholder and the actual controller for the additional
shares shall not exceed 100% of the most recently audited net assets per share of the Company.
In case of any conflict between the provisions of Paragraph (1) and Paragraph (3) above, Paragraph (3)
shall prevail.
5. The controlling shareholder and the actual controller shall be jointly and severally liable for such
acquisition of additional shares.
(III) Acquisition of additional shares of the Company by the directors and senior officers
1. Upon satisfaction of the Trigger Condition, if the Company is unable to make share repurchase, and
the controlling shareholder and the actual controller are unable to acquire additional shares of the
Company, or fail to put forward or implement the plan to acquire additional shares of the Company, the
directors and senior officers shall acquire additional shares of the Company, subject to the
Administrative Measures for the Acquisition of the Listed Companies, the Management Rules for
Shareholding by Directors, Supervisors and Senior Officers of Listed Companies in the Companies and
Changes in such Shareholding and other applicable laws, rules, regulations and normative documents,
provided that such transaction will not cause the shareholding structure of Company to cease to meet the
listing conditions.
2. Subject to Paragraph 1 above, the directors and senior officers of the Company shall, within 10
trading days after satisfaction of the Trigger Condition, notify the Company in writing of their plan to
acquire additional shares, which shall specify, among others, the scope of number of shares to be
acquired, upper limit of the purchase price and time limit for such acquisition. The Company shall
announce such plan within 3 trading days prior to the implementation of such plan.
3. The stock price stabilization plan implemented by the directors and senior officers shall also comply
with the following provisions:
(1) the amount used by any director or senior officer in the acquisition of additional shares under a single
plan shall not be lower than 20% of the aggregate cash dividends, remunerations and subsidies (in each
case, if any and after tax) received by such director or senior officer from the Company in the preceding
year;
(2) the total amount used by any director or senior officer in the acquisition of additional shares under a
single plan or within 12 consecutive months shall not exceed 50% of the aggregate cash dividends,
remunerations and subsidies (in each case, if any and after tax) received by such director or senior
officer from the Company in the preceding year; and
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(3) the purchase price paid by the directors and senior officers for the additional shares shall not exceed
100% of the most recently audited net assets per share of the Company.
4. The Company shall request each new director or senior officer appointed within three years after
completion of the IPO to sign a letter of undertaking, warranting that he will fulfill the covenants made
by the existing directors and senior officers in the IPO.
(IV) Other measures permitted by the applicable laws, rules, regulations and normative documents, and
the CSRC and the SSE
The Company and the related persons may take one or more measures to stabilize the Company’s stock
price according to the situations of the Company and the market, provided that such measures shall be
taken for purpose of safeguarding the listing status of the Company and protecting the interests of the
Company and the investors, and comply with the applicable laws, rules, regulations and normative
documents, and the relevant provisions of the SSE, and shall perform the relevant obligation of
information disclosure.
III. Restraint mechanisms for stock price stabilization plan
Upon satisfaction of the Trigger Condition, if the Company or any controlling shareholder, actual
controller, director or senior officer fails to take the stock price stabilization measures stated above, the
Company and such person shall be bound by the following restraint mechanisms:
1. The Company or such controlling shareholder, actual controller, director or senior officer (as
applicable) shall publicly explain the reason for failure to take the stock price stabilization measures to
the general meeting of shareholders of the Company and on the media for information disclosure
designated by the CSRC, and apologize to the shareholders of the Company and the investors, and the
Company shall assume the relevant legal liabilities.
2. If any controlling shareholder, actual controller, director or senior officer fails to fulfill his covenant
regarding acquisition of additional shares, the issuer may defer the payment of cash dividends (if any)
for the year in which the obligation to acquire additional shares is triggered and the following year and
50% of the total remuneration and subsidies for such year payable to him, and prohibit him from
transferring the shares held by him in the Company, until he has taken and completed the relevant stock
price stabilization measures.
3. The Company shall remind and procure the directors and senior officers newly appointed in the future
to fulfill the covenants made by the existing directors and senior officers in the IPO regarding the stock
price stabilization measures.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares) on the STAR Market. ”
Note 13:
Appotronics Holdings, as the controlling shareholder of the Company, hereby covenants that:
“We will seriously perform our duties in accordance with the requirements of the Plan of Appotronics
Corporation Limited on Stabilizing the Stock Price of the Company if the Stock Price is Lower than the
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Net Assets per Share of the Company within Three Years after Completion of the IPO and Listing of the
Company’s RMB-denominated Ordinary Shares (A-shares) on the STAR Market, and ensure the
implementation of the Plan through the restraint mechanisms set forth therein, to maintain the stability of
the Company’s stock price and protect the interests of the investors.
We will actively support the Company in repurchasing shares according to law, and will not engage in
any abuse of rights, insider trading, market manipulation or other illegal acts to the detriment of the
interests of the Company and other shareholders in connection with the share repurchase by the
Company.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
LI Yi, as the actual controller of the Company, hereby covenants that:
“I will seriously perform my duties in accordance with the requirements of the Plan of Appotronics
Corporation Limited on Stabilizing the Stock Price of the Company if the Stock Price is Lower than the
Net Assets per Share of the Company within Three Years after Completion of the IPO and Listing of the
Company’s RMB-denominated Ordinary Shares (A-shares) on the STAR Market, and ensure the
implementation of the Plan through the restraint mechanisms set forth therein, to maintain the stability of
the Company’s stock price and protect the interests of the investors.
I will actively support the Company in repurchasing shares according to law, and will not engage in any
abuse of rights, insider trading, market manipulation or other illegal acts to the detriment of the interests
of the Company and other shareholders in connection with the share repurchase by the Company. I will
be honest, keep my promise, be assiduous in my duties, and safeguard the interests of the Company and
the legitimate rights and interests of the shareholders and creditors of the Company in the share
repurchase by the Company. I covenant that the share repurchase by the Company will not prejudice the
Company’s solvency and ability to continue as a going concern.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
Note 14:
Each of the directors and senior officers of the Company hereby covenants that:
“I will seriously perform my duties in accordance with the requirements of the Plan of Appotronics
Corporation Limited on Stabilizing the Stock Price of the Company if the Stock Price is Lower than the
Net Assets per Share of the Company within Three Years after Completion of the IPO and Listing of the
Company’s RMB-denominated Ordinary Shares (A-shares) on the STAR Market, and ensure the
implementation of the Plan through the restraint mechanisms set forth therein, to maintain the stability of
the Company’s stock price and protect the interests of the investors.
I will be honest, keep my promise, be assiduous in my duties, and safeguard the interests of the
Company and the legitimate rights and interests of the shareholders and creditors of the Company in the
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share repurchase by the Company. I covenant that the share repurchase by the Company will not
prejudice the Company’s solvency and ability to continue as a going concern.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
Note 15:
The issuer hereby covenants:
“1. If the competent securities regulatory authority or any other competent authority finds that the
Company’s IPO prospectus contains any misrepresentation or misleading statement or omits any
material fact, which has a material and substantial effect on the determination of whether the Company
meets the conditions for IPO and listing set forth in the applicable laws, regulations and normative
documents, the Company undertakes to take the following measures to repurchase all new shares issued
in the IPO according to law:
(1) subject to the applicable laws, regulations and normative documents, if such event occurs after
completion of the IPO but prior to the listing of the new shares of the Company, within 30 working days
after the competent securities regulatory authority or any other competent authority makes the relevant
decision, the Company shall repurchase all new shares issued in the IPO from the investors who have
successfully subscribed for the new shares on line and the investors who have received the new shares
allotted off the line at the offering price plus interest at the bank deposit rate for the same period; and
(2) subject to the applicable laws, regulations and normative documents, if such event occurs after
completion of the IPO and the listing of the new shares of the Company, within 5 working days after the
competent securities regulatory authority or any other competent authority makes the relevant decision,
the Company shall prepare a share repurchase plan and submit the same to the general meeting of
shareholders for approval, and after the plan has been approved by the general meeting of shareholders,
repurchase all new shares issued in the IPO to the extent practicable. The repurchase price shall be
determined on the basis of the offering price, taking into account the relevant market factors. If the
Company has distributed any dividends or bonus shares, capitalized the capital reserve or made any
rights issue after the listing of the Company, the price and number of shares repurchased shall be
adjusted accordingly.
2. If the Company’s IPO prospectus contains any misrepresentation or misleading statement or omits
any material fact, the Company shall indemnify the investors for the losses incurred in dealings in the
stock of the Company resulting therefrom in the following manner according to law: after the competent
securities regulatory authority has found that the Company violated the law and issued an official
decision on administrative penalty, the Company shall arrange for registration of the investors who
claim compensation from the Company, and after verifying their qualifications and amount of losses,
pay compensation to such investors in a timely manner. ”
Note 16:
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The controlling shareholder Appotronics Holdings, the actual controller LI Yi and their concert parties
hereby covenant that:
“The Company’s IPO prospectus is free from any misrepresentation, misleading statement or material
omission. If the prospectus contains any misrepresentation or misleading statement or omits any material
fact, which has been found to have a material and substantial effect on the determination of whether the
Company meets the conditions for IPO set forth in the applicable laws, we/I and the related persons will
promptly put forward proposals for compensation and conduct share repurchase according to law, vote
for such proposals at the meeting of the Board of Directors or general meeting of shareholders, and
indemnify the investors for the losses incurred in dealings in the stock of the Company resulting
therefrom according to law.
Procedures for compensation and criteria for determining the losses suffered by the investors: Within 20
working days after the competent securities regulatory authority or any other competent authority finds
that the Company’s IPO prospectus contains any misrepresentation or misleading statement or omits any
material fact, the procedures for compensating the losses of the investors shall be commenced. The
losses of the investors shall be determined through consultation with the investors, or in such manner as
required by the competent securities regulatory authority or judicial authority. ”
Note 17:
Each of the directors, supervisors and senior officers of the Company hereby covenants that:
“The Company’s IPO prospectus is free from any misrepresentation, misleading statement or material
omission. If the prospectus contains any misrepresentation or misleading statement or omits any material
fact, I will indemnify the investors for the losses incurred in dealings in the stock of the Company
resulting therefrom according to law.
Procedures for compensation and criteria for determining the losses suffered by the investors: Within 20
working days after the competent securities regulatory authority or any other competent authority finds
that the Company’s IPO prospectus contains any misrepresentation or misleading statement or omits any
material fact, the procedures for compensating the losses of the investors shall be commenced. The
losses of the investors shall be determined through consultation with the investors, or in such manner as
required by the competent securities regulatory authority or judicial authority. ”
Note 18:
The issuer’s covenant regarding remedial measures for diluted earnings in the current period:
“(I) Focus on technology R&D and product innovations, and continuously improve the IP protection
system
The Company will focus on technology R&D and product innovations relying on its technology R&D
capabilities. Since its establishment, the Company has obtained a lot of domestic and foreign patents in
respect of laser display and related fields. In the future, the Company will continue to consolidate and
enhance its market competitive advantages through conforming to the development law of the industry,
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increasing R&D investments, improving product functions and quality, optimizing product portfolio and
other measures. In addition, the Company will continue to improve its IP protection system, apply for
patents in respect of its core technologies throughout the world, reasonably use legal means to protect its
proprietary IP, and promote the establishment of industrial technical standards and the harmonious and
healthy development of the laser display industry.
(II) Enhance the building of marketing system and improve profitability
The Company will, based on the current marketing system, give full play to the advantages of the
multi-level and all-round marketing mode combining online sales with off-line sales, agent mode with
direct sale mode, and sales on the domestic market with exploitation of overseas market, to expand the
market layout, and continuously optimize the sales service system and enhance brand influence relying
on the advantages of technologies and products, to realize synchronous and sound development of the
base and quality of customers. In addition, the Company will actively cultivate and develop overseas
market, promote its laser display products with proprietary IP in the world based on its leading
technologies and outstanding products, and giving full play to the synergy effect with its strategic
partners, to realize the continuous growth of sales and improvement of profitability.
(III) Enhance internal controls and team building of talents, and improve management and operational
efficiency in an all-round way
The Company has established relatively sound internal controls and management system, and will
continue to improve its management and operation level, revise and improve internal controls, control
management and operating risks, and ensure the continuous and effective implementation of internal
controls. In addition, the Company will enhance the building of IT system and budget management,
control costs and expenses meticulously, improve the use efficiency of funds, and realize reduction of
costs and improvement of efficiency. The Company will also continuously improve the compensation
and incentive mechanisms, recruit outstanding talents, motivate the employees to the maximum extent,
and give full play to the employees’ creative power and maximize their potentials. Through such
measures, the Company will improve its management and operational efficiency in an all-round way,
and realize long-term, steady and healthy development.
(IV) Enhance management over the funds raised and strive to yield the desired results as soon as
practicable
The projects in which the funds raised will invest orient on the main business of the Company and
comply with the applicable industrial policies of the country, and after being completed, will improve
the Company’s technological level, increase its production scale and market share, and improve its
profitability, core competitiveness and sustainability.
After completion of the IPO, the Company will strictly manage the use and ensure the full and efficient
use of the funds raised in accordance with the Company Law, the Securities Law, the Rules Governing
the Listing of Stocks on the Sci-tech Innovation Board of the Shanghai Stock Exchange, the
Administrative Measures of the Shanghai Stock Exchange for Fund-raising by the Listed Companies,
and other applicable laws, rules, regulations and normative documents, and the Measures of Appotronics
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Corporation Limited for Management and Use of Funds Raised. In addition, the Company will,
according to the use and amount of the offering proceeds as promised, actively push forward the
building and implementation of the relevant projects, and have the projects yield the desired results as
soon as practicable, to safeguard the interests of all shareholders of the Company.
After receipt of the offering proceeds, the Company will actively push forward the investment in and
building of the relevant projects, and fully mobilize R&D, procurement, production, sales,
administrative and other resources of the Company, to promptly and efficiently complete the projects. In
addition, the Company will ensure the availability of the relevant personnel, provide thorough and
comprehensive skill trainings to new employees, and through active market exploitation and sound
communications with the customers, ensure that the products of the newly built projects will be launched
on the market successfully. Through these all-round measures, the Company will procure the relevant
investment projects to reach the designed production capacity and yield the desired results as soon as
practicable.
(V) Improve the profit distribution policy and enhance the mechanism of returns to investors
The general meeting of shareholders of the Company has adopted the Articles of Association of
Appotronics Corporation Limited (draft) for the IPO, which further specifies and improves the
Company’s profit distribution principles and approaches, the respective conditions and proportion of
cash dividends and stock dividends, and improves the Company’s decision-making procedures and
mechanisms with respect to profit distribution, and decision-making procedures for the adjustment of the
profit distribution policy.
In addition, the Company has formulated the Plan of Appotronics Corporation Limited on the
Shareholder Returns within Three Years after Completion of the IPO and Listing of the Company’s
Shares on the STAR Market, to make specific arrangements for profit distribution within three years
after completion of the IPO. The Company will maintain the consistency and stability of its profit
distribution policy, attach importance to the reasonable returns to investors, enhance the protection of the
investors’ rights and interests, and take into account both the overall interest of all shareholders and the
sustainable development of the Company.
The Company reminds the investors to be aware that the remedial measures for diluted earnings stated
above do not mean any warranty made by the Company as to its earnings in the future. After being
approved by the general meeting of shareholders of the Company, this proposal will take effect from the
date of completion of the IPO and listing of the Company’s RMB-denominated ordinary shares
(A-shares) on the STAR Market.
(VI) Covenants of the directors and senior officers regarding the serious implementation of the remedial
measures for diluted earnings of the Company
Pursuant to the relevant provisions of the CSRC, each of the directors and senior officers of the
Company hereby covenants as follows with respect to the remedial measures for diluted earnings of the
Company:
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1. Not to transfer benefits to any other entity or individual without compensation or on unfair terms, or
otherwise damage the interest of the Company;
2. To exercise self-discipline in consumption in performing his duties;
3. Not to use the assets of the Company to engage in any investment or consumption activities not in
connection with his duties;
4. To link the compensation system adopted by the Board of Directors or the Compensation Committee
with the implementation of the Company’s remedial measures for diluted earnings in the current period;
5. If the Company implements any share incentive plan in the future, to link the conditions to exercise
rights under such share incentive plan with the implementation of the Company’s remedial measures for
diluted earnings in the current period; and
6. To indemnify the Company or shareholders of the Company for the losses arising from any breach of
or refusal to fulfill the covenants by him according to law.
(VII) Controlling shareholder, actual controller and their concert parties
Note 19:
Each of controlling shareholder, actual controller and their concert parties hereby covenants as follows
with respect to the serious implementation of the remedial measures for diluted earnings of the
Company:
1. Not to interfere with management and operation of the Company beyond its/his powers;
2. Not to infringe on the interest of the Company;
3. Not to transfer benefits to any other entity or individual without compensation or on unfair terms, or
otherwise damage the interest of the Company; and
4. To indemnify the Company or shareholders of the Company for the losses arising from any breach of
or refusal to fulfill the covenants by it/him according to law.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
2. Covenants of the controlling shareholder and the actual controller regarding the remedial measures for
diluted earnings in the current period
Each of the concert parties of the controlling shareholder Appotronics Holdings and the actual controller
hereby undertakes:
“1. Not to interfere with management and operation of the Company beyond its powers;
2. Not to infringe on the interest of the Company;
3. Not to transfer benefits to any other entity or individual without compensation or on unfair terms, or
otherwise damage the interest of the Company; and
4. To indemnify the Company or shareholders of the Company for the losses arising from any breach of
or refusal to fulfill the covenants by it according to law.
As one of the persons responsible for the remedial measures for diluted earnings, if we breach or refuse
to fulfill the covenants set forth above, we agree that the CSRC, the SSE and other securities regulatory
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authorities may mete out punishments on or take other administrative actions against us pursuant to the
relevant provisions and rules established or published by them.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). The covenants and warranties stated above
shall remain in effect so long as we remain a concert party of the controlling shareholder or the actual
controller of the Company. ”
LI Yi, as the actual controller of the Company, hereby undertakes:
“1. Not to interfere with management and operation of the Company beyond his powers;
2. Not to infringe on the interest of the Company;
3. Not to transfer benefits to any other entity or individual without compensation or on unfair terms, or
otherwise damage the interest of the Company;
4. To indemnify the Company or shareholders of the Company for the losses arising from any breach of
or refusal to fulfill the covenants by him according to law;
5. To exercise self-discipline in consumption in performing his duties;
6. Not to use the assets of the Company to engage in any investment or consumption activities not in
connection with his duties;
7. To link the compensation system adopted by the Board of Directors or the Compensation Committee
with the implementation of the Company’s remedial measures for diluted earnings in the current period;
and
8. If the Company implements any share incentive plan in the future, to link the conditions to exercise
rights under such share incentive plan with the implementation of the Company’s remedial measures for
diluted earnings in the current period.
As one of the persons responsible for the remedial measures for diluted earnings, if I breach or refuse to
fulfill the covenants set forth above, I agree that the CSRC, the SSE and other securities regulatory
authorities may mete out punishments on or take other administrative actions against me pursuant to the
relevant provisions and rules established or published by them.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). The covenants contained in Paragraphs 1
through 4 above shall remain in effect so long as I remain the actual controller of the Company, and the
covenants contained in Paragraphs 3 through 8 above shall remain in effect so long as I remain a director
of the Company. ”
Note 20:
Each of the directors and senior officers of the Company hereby covenants that:
“1. Not to transfer benefits to any other entity or individual without compensation or on unfair terms, or
otherwise damage the interest of the Company;
2. To exercise self-discipline in consumption in performing his duties;
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3. Not to use the assets of the Company to engage in any investment or consumption activities not in
connection with his duties;
4. To link the compensation system adopted by the Board of Directors or the Compensation Committee
with the implementation of the Company’s remedial measures for diluted earnings in the current period;
5. If the Company implements any share incentive plan in the future, to link the conditions to exercise
rights under such share incentive plan with the implementation of the Company’s remedial measures for
diluted earnings in the current period; and
6. To indemnify the Company or shareholders of the Company for the losses arising from any breach of
or refusal to fulfill the covenants by him according to law.
As one of the persons responsible for the remedial measures for diluted earnings, if I breach or refuse to
fulfill the covenants set forth above, I agree that the CSRC, the SSE and other securities regulatory
authorities may mete out punishments on or take other administrative actions against me pursuant to the
relevant provisions and rules established or published by them.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
Note 21:
The issuer hereby covenants as follows with respect to the profit distribution policy of the Company:
“I. Considerations in the preparation of the shareholder returns plan
The Company focuses on the long-term and sustainable development, and in preparing the plan, has
taken into consideration its strategic development plan, actual business situation, development objectives,
future profitability, status of cash flows, shareholder returns, cost of social capital, external financing
environment and other relevant factors, and established a clear profit distribution mechanism on the
basis of the balance between the reasonable returns on investment for shareholders and its sustainable
development, to ensure the consistency and stability of the profit distribution policy and that the
Company is able to operate continuously and healthily in the long run.
II. Principles observed in the preparation of the shareholder returns plan
(I) To strictly observe the basic principles for profit distribution set forth in the Articles of Association
of Appotronics Corporation Limited (“AOA”);
(II) To give full consideration and listen to the opinions of the shareholders (especially the minority
shareholders) and the independent directors;
(III) To strike a balance between the short-term interest and long-term development, and ensure that the
profit distributions made by the Company will not undermine its ability to continue as a going concern;
and
(IV) To give priority to the distribution of cash dividends, attach importance to the provision of
reasonable returns to investors, and ensure that the profit distributions are made continuously and stably
and comply with the applicable laws, rules, regulations and normative documents, and the AOA.
III. Detailed shareholder returns plan within three years following completion of the IPO
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(I) Intervals of profits distribution
The Company shall make profit distributions at least once a year to the extent there are distributable
profits. The annual profit distributions shall be made within two months following the relevant annual
general meeting of shareholders. The Company may make interim profit distributions in cash according
to its production and business situations and capital requirements. Such interim profit distributions shall
be proposed by the Board of Directors according to the capital position of the Company, and made
within two months after the same have been approved by the general meeting of shareholders.
(II) Form of profit distribution
The Company may distribute its profits in the form of cash dividends, stock dividends or a combination
of cash dividends and stock dividends or otherwise permitted by the applicable laws, rules, regulations
and normative documents, provided that cash dividends shall take precedence over stock dividends. The
Company shall distribute its profits in cash to the extent that the conditions for distribution of cash
dividends are satisfied.
The cash dividends shall be distributed once every year in principle, but the Board of Directors may
propose the distribution of interim cash dividends according to the earnings and capital position of the
Company.
(III) Conditions for distribution of cash dividends
The Company shall distribute cash dividends for a year if:
(1) the Company has earned a distributable profit in such year (after making up for the losses in prior
years and appropriating public reserves), has sufficient cash flows, and will be able to continue as a
going concern after such distribution of cash dividends;
(2) the Company’s accumulated distributable profit is positive;
(3) the Company’s auditor has issued a standard unqualified opinion on the Company’s financial report
for such year;
(4) the Company does not have any material investment plan or material capital expenditures (except the
projects in which the offering proceeds invest);
Material capital expenditures mean: (1) the aggregate amount of expenditures on external investments,
acquisition of assets, purchase of equipment or land or other transactions that the Company plans to
conduct in the next 12 months is equal to or exceeds 50% of the most recently audited net assets of the
Company; or (2) the aggregate amount of expenditures on external investments, acquisition of assets,
purchase of equipment or land or other transactions that the Company plans to conduct in the next 12
months is equal to or exceeds 30% of the most recently audited total assets of the Company.
(5) there isn’t any special circumstance that makes the profit distribution unsuitable as approved by the
general meeting of shareholders. If the conditions set forth above are not satisfied, the Board of
Directors shall determine whether or not to distribute cash dividends according to the actual
circumstances.
(IV) Ratio of cash dividends
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Subject to the satisfaction of the conditions for distributing cash dividends, we will distribute not less
than 10% of the distributable profit made in each year in cash.
A subsidiary shall prepare its distribution plans on the basis of the distributable profit reported in the
financial statements of the parent company. The Company shall determine the specific profit distribution
ratio on the basis of the lower of the distributable profits reported in the consolidated financial
statements and the financial statements of the parent company, to avoid excess profit distribution.
If the Company has repurchased any shares by cash through tender offer or call auction in a year, the
repurchase price paid by the Company shall be deemed as the cash dividends already distributed by the
Company, and taken into account in the calculation of the cash dividend ratio for such year.
(V) Differential cash dividend policy
The Board of Directors will adopt the following differential cash dividend policy according to the
procedures set forth in the AOA, giving comprehensive consideration to the characteristics of the
industry in which the Company operates, its development stage, business model and earnings, material
capital expenditure arrangements and other relevant factors:
(1) If the Company is at the mature stage and does not have any material capital expenditure
arrangement, at least 80% of the distributable profit will be distributed in cash;
(2) If the Company is at the mature stage and has certain material capital expenditure arrangements, at
least 40% of the distributable profit will be distributed in cash; or
(3) If we are at the growth stage and have certain material capital expenditure arrangements, at least 20%
of the distributable profit will be distributed in cash.
If it is hard to determine the development stage but there are certain material capital expenditure
arrangements, the policy set forth above may apply.
We will formulate or adjust the shareholder returns plan subject to the profit distribution policy set forth
above, according to our actual situations and the opinions of the shareholders (in particular, the minority
shareholders) and the independent directors.
(VI) Conditions for distribution of stock dividends
The Company may distribute profits in the form of stock dividends according to its earnings and cash
flows in a given year and on the premise of full distribution of cash dividends, to the extent that the
Company maintains the minimum cash dividend ratio and reasonable share capital and shareholding
structure, and ensures that the increase in share capital keeps pace with the growth of its operating
performance.
IV. Cycle for drawing up the shareholder returns plan and the relevant decision-making mechanism
(I) The Company shall review the shareholder returns plan at least once every three years, make
appropriate and necessary amendments to its profit distribution policy and decide on the shareholder
returns plan for the giving period according to the opinions of the shareholders (in particular, holders of
public shares), the independent directors and supervisors, subject to the applicable laws, rules,
regulations and normative documents.
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(II) The Board of Directors shall draw up the specific profit distribution proposal for each year according
to the AOA, earnings, capital requirements and shareholder returns plan of the Company, thoroughly
discuss the reasonableness of such profit distribution proposal, seriously analyze and discuss the timing,
conditions, minimum ratio, conditions for adjustment, decision-making procedures and other issues in
respect of distribution of cash dividends, adopt a special resolution thereon, and submit the same to the
general meeting of shareholders for consideration. The independent directors shall explicitly express
their opinions on such profit distribution proposal, and may solicit the opinions of minority shareholders,
and then directly submit a profit distribution proposal to the Board of Directors for consideration.
(III) In considering a specific cash dividend distribution proposal, the general meeting of shareholders
shall actively communicate and exchange with shareholders, in particular minority shareholders in
various ways, including without limitation online voting and inviting minority shareholders to
participate in the general meeting of shareholders, fully listen to the opinions and claims of minority
shareholders, and promptly answer the questions raised by minority shareholders. The dividend
distribution proposal requires the approval of the shareholders representing a majority of the total votes
present at the general meeting of shareholders in person or by proxy.
(V) The Board of Supervisors shall supervise the implementation of the Company’s profit distribution
policy and shareholder returns plan by the Board of Directors and the management of the Company and
the relevant decision-making procedures, and if the Company makes a profit in a year and does not
intend to distribute profits, make an explanation and issue an opinion about the implementation of the
relevant policies and plans.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
Note 22:
The issuer hereby covenants:
“The Company will strictly perform all duties and obligations under all covenants made by it publicly in
connection with the IPO (“Covenants”). If the Company fails to perform all duties and obligations under
the Covenants, the Company shall make a public explanation and apologize to the shareholders and
investors of public shares at the general meeting of shareholders and on the media for information
disclosure designated by the CSRC, disclose the reasons for failure to fulfill the relevant Covenants,
make supplementary or alternate covenants, or put forward other solutions, and assume the relevant legal
liabilities and liability for compensation according to law. The shareholders and investors of public
shares shall have the right to take legal actions to request the Company to fulfill the Covenants.
The Company shall not increase the salaries or subsidies of the directors, supervisors and senior officers
who assume personal liability for failure of the Company to fulfill the Covenants in any manner until the
Company has fully removed the adverse effect of its failure to fulfill the Covenants.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). ”
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Note 23:
The controlling shareholder Appotronics Holdings, the actual controller LI Yi and their concert parties
hereby covenant that:
“1. We/I will strictly perform all duties and obligations under all covenants made by us/me publicly in
connection with the IPO (“Covenants”).
2. If we/I fail to perform, or actually become unable to perform, or become unable to perform as
scheduled all duties and obligations under the Covenants (except those resulting from any change in the
applicable laws, regulations and policies, natural disaster, event of force majeure or any other objective
circumstances beyond our/my control), we/I will:
(1) promptly and fully disclose the reasons for failure or inability to perform, or inability to perform as
scheduled the relevant Covenants through the Company, and make a public apology to other
shareholders of the Company;
(2) make supplementary or alternate covenants to the Company and other shareholders of the Company,
to protect their rights and interests to the maximum extent practicable.
(3) submit such supplementary or alternate covenants to the general meeting of shareholders for
consideration; and
(4) surrender all gains (if any) obtained from failure to perform the relevant Covenants to the Company,
and indemnify the Company and other shareholders of the Company for the losses arising therefrom
according to law.
3. If we/I fail to perform, or actually become unable to perform, or become unable to perform as
scheduled the duties and obligations under the Covenants due to any change in the applicable laws,
regulations and policies, natural disaster, event of force majeure or any other objective circumstances
beyond our/my control, we/I will:
(1) promptly and fully disclose the reasons for failure or inability to perform, or inability to perform as
scheduled the relevant Covenants through the Company; and
(2) make supplementary or alternate covenants to the Company and other shareholders of the Company,
to protect their rights and interests to the maximum extent practicable.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). The covenants set forth above shall remain
in effect so long as we/I remain the controlling shareholder/actual controller/concert party of the actual
controller (as applicable) of the Company. ”
Note 24:
Each of the directors, supervisors and senior officers of the Company hereby covenants that:
“1. I will strictly perform all duties and obligations under all covenants made by me publicly in
connection with the IPO (“Covenants”).
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2. If I fail to perform, or actually become unable to perform, or become unable to perform as scheduled
all duties and obligations under the Covenants (except those resulting from any change in the applicable
laws, regulations and policies, natural disaster, event of force majeure or any other objective
circumstances beyond my control), I agree to surrender the gains obtained from breach of the Covenants
to the Company, and indemnify the Company or the investors for the losses arising therefrom according
to law.
3. If I fail to perform, or actually become unable to perform, or become unable to perform as scheduled
the duties and obligations under the Covenants due to any change in the applicable laws, regulations and
policies, natural disaster, event of force majeure or any other objective circumstances beyond my control,
I will:
(1) promptly and fully disclose the reasons for failure or inability to perform, or inability to perform as
scheduled the relevant Covenants through the Company; and
(2) make supplementary or alternate covenants to the Company and the shareholders of the Company, to
protect their rights and interests to the maximum extent practicable.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
Company’s RMB-denominated ordinary shares (A-shares). The covenants and warranties set forth above
shall remain in effect so long as I remain a director/supervisor/senior officer (as applicable) of the
Company.” ”
Note 25:
Appotronics Holdings, as the controlling shareholder of the issuer, hereby covenants that:
“I. We acknowledge that as of the date of this Letter of Undertaking, we and our subsidiaries have not,
directly or indirectly, engaged in any business or activity competing with the main business presently
conducted by Appotronics in or outside China in any manner.
II. We covenant and warrant that so long as we remain the controlling shareholder of Appotronics, we
and our subsidiaries will not engage in any competing business that might have a material adverse effect
on the main business of Appotronics.
III. We and our subsidiaries will avoid and reduce related-party transactions with Appotronics to the
maximum extent practicable.
IV. With respect to the related-party transactions that are unavoidable or conducted with good reason:
1. We will abstain from the review of and voting on related-party transactions involving us in strict
accordance with the applicable laws, rules, regulations and normative documents, and the Articles of
Association, the Policy on Related-party Transaction and other regulations of Appotronics;
2. We will enter into contracts or agreements with Appotronics in respect of such related-party
transactions according to the general commercial principle of “fairness, free will and valuable
consideration”, and ensure that the price for such related-party transactions is fair and does not
materially differ from the price or rate that will be offered by or to an independent third party on the
market;
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3. We will duly perform the applicable approval procedures and the obligation of information disclosure
in connection with such related-party transactions in accordance with the applicable laws, rules,
regulations and normative documents; and
4. We will not transfer any profits or benefits through any related-party transaction or take advantage of
our decision-making power over the management of Appotronics to damage the legitimate rights and
interests of Appotronics and the other shareholders of Appotronics.
V. We undertake to exercise the relevant rights and perform the relevant obligations in strict accordance
with the applicable laws, rules, regulations and normative documents, and the Articles of Association of
Appotronics, and not to take advantage of our position and influence as the controlling shareholder to
seek illegal gains or damage the legitimate rights and interests of Appotronics and the other shareholders
of Appotronics.
VI. We will procure our subsidiaries to comply with the covenants set forth above, and indemnify
Appotronics and the other shareholders of Appotronics for damages to their legitimate rights and
interests resulting from any breach by us or any of our subsidiaries of the covenants set forth above.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
RMB-denominated ordinary shares (A-shares) of Appotronics Corporation Limited. The covenants and
warranties set forth above shall remain in effect so long as we remain the controlling shareholder of
Appotronics. ”
Note 26:
LI Yi, as the actual controller of the issuer, hereby covenants that:
“I. I acknowledge that as of the date of this Letter of Undertaking, I and my subsidiaries have not,
directly or indirectly, engaged in any business or activity competing with the main business presently
conducted by Appotronics in or outside China in any manner.
II. I covenant and warrant that so long as I remain the actual controller of Appotronics, I and my
subsidiaries will not engage in any competing business that might have a material adverse effect on the
main business of Appotronics.
III. I and my subsidiaries and other business or economic entities in which I hold the post of director or
senior officer (each an “Employer”) will avoid and reduce related-party transactions with Appotronics to
the maximum extent practicable.
IV. With respect to the related-party transactions that are unavoidable or conducted with good reason:
1. I will abstain from the review of and voting on related-party transactions involving me in strict
accordance with the applicable laws, rules, regulations and normative documents, and the Articles of
Association, the Policy on Related-party Transaction and other regulations of Appotronics;
2. I will enter into contracts or agreements with Appotronics in respect of such related-party transactions
according to the general commercial principle of “fairness, free will and valuable consideration”, and
ensure that the price for such related-party transactions is fair and does not materially differ from the
price or rate that will be offered by or to an independent third party on the market;
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3. I will duly perform the applicable approval procedures and the obligation of information disclosure in
connection with such related-party transactions in accordance with the applicable laws, rules, regulations
and normative documents; and
4. I will not transfer any profits or benefits through any related-party transaction or take advantage of my
decision-making power over the management of Appotronics to damage the legitimate rights and
interests of Appotronics and the other shareholders of Appotronics.
V. I undertake to exercise the relevant rights and perform the relevant obligations in strict accordance
with the applicable laws, rules, regulations and normative documents, and the Articles of Association of
Appotronics, and not to take advantage of my position and influence as the actual controller to seek
illegal gains or damage the legitimate rights and interests of Appotronics and the other shareholders of
Appotronics.
VI. I will procure my subsidiaries and the Employers to comply with the covenants set forth above, and
indemnify Appotronics and the other shareholders of Appotronics for damages to their legitimate rights
and interests resulting from any breach by me or any of my subsidiaries or the Employers of the
covenants set forth above.
This Letter of Undertaking shall take effect from the date of completion of the IPO and listing of the
RMB-denominated ordinary shares (A-shares) of Appotronics Corporation Limited. Unless otherwise
agreed, the covenants and warranties set forth above shall remain in effect so long as I remain the actual
controller of Appotronics. ”
Note 27:
Each of the grantees of share incentives of the Company hereby covenants that if the relevant
information disclosure documents of the Company contain any misrepresentation or misleading
statement or omit any material fact, as a result of which that the grantee becomes ineligible for the
equities granted to him or the relevant equity attribution arrangement, the grantee shall surrender all
benefits received by him under the incentive plan to the Company after the relevant information
disclosure documents of the Company have been found to contain any misrepresentation or misleading
statement or omit any material fact.
Note 28:
The Company undertakes not to provide loans or any other financial assistance to any grantee of
restricted shares under the incentive plan, including guarantee for any loan obtained by such grantee.
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IV. Appointment and termination of appointment of accounting firm
Explanation about the appointment and termination of appointment of accounting firm
□ Applicable√ N/A
Explanation about re-appointment of accounting firm during the audit period
□ Applicable√ N/A
Explanation about the modified audit opinion issued by the accounting firm
□ Applicable√ N/A
Explanation about the modified audit opinion issued by the accounting firm on the financial statemetns
in the semiannual report
□ Applicable√ N/A
V. Matters relating to bankruptcy and reorganization
□ Applicable√ N/A
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VI. Material litigations and arbitrations
√ The Company was involved in material litigations or arbitration during the reporting period
□ The Company was not involved in material litigations or arbitration during the reporting period
(I) Litigations and arbitrations already disclosed in interim announcements about which no new information is available
√ Applicable□ N/A
Summary and type of case Reference
I. Cases of dispute over infringement on patents for invention [2019] Yue 73 Zhi Min Chu No. 663 and No. 664 Please refer to the Announcement No.
1. Plaintiff: Delta Electronics, Inc. 2019-005 issued by the Company on
Defendant 1: Appotronics Corporation Limited www.sse.com.cn and the designated media for
Defendant 2: Futian SPN Projector & Video System Firm of Shenzhen information disclosure on July 30, 2019.
2. Background
The Plaintiff alleges that the production, sale and offer for sale of “Appotronics Laser Projector AL-LX410UST”
by Defendant 1 and Defendant 2 for purpose of production and operation has infringed on the Plaintiff’s patent
for invention and caused economic losses to the Plaintiff.
3. Amount claimed: RMB 16.1453 for each case
4. The Guangzhou IP Court has issued Civil Rulings [2019] Yue 73 Zhi Min Chu No. 663 and No. 664, ordering
the seizure and freeze of an aggregate of RMB 10 million of deposit or other properties in the equivalent amount
of the Company.
II. Cases of dispute over infringement on patents for invention [2019] Yue 03 Min Chu No.s 2942-2951 Please refer to the Announcement No.
1. Parties 2019-006 issued by the Company on
Plaintiff: Appotronics Corporation Limited www.sse.com.cn and the designated media for
Defendant 1: Delta Electronics Business Management (Shanghai) Co., Ltd. information disclosure on July 31, 2019.
Defendant 2: Delta Video Display System (Wujiang) Limited
Defendant 3: Shenzhen Super Network Technology Co., Ltd.
2. Background: The Plaintiff alleges that it is the owner of the patents for invention ZL200810065225.X “a
phosphor-based light source structure for improving the efficiency of light conversion”, and ZL200880107739.5
“a multi-color lighting apparatus using moving pattern plate containing wavelength conversion material, and the
production, sale and offer for sale of a variety of laser projector products by Defendant 1, Defendant 2 and
Defendant 3 for purpose of production and operation has infringed on such patents for invention owned by the
Plaintiff and caused economic losses to the Plaintiff.
3. Amount claimed: 56.00 million.
III. Case for changing the inventor of patent 19-cv-00466-RGD-LRL in the United States District Court for the Please refer to the Announcement No.
Eastern District of Virginia 2019-012 issued by the Company on
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1. Parties www.sse.com.cn and the designated media for
Plaintiff: Appotronics Corporation Limited information disclosure on September 9, 2019.
Defendant: Delta Electronics, Inc.
2. Background
The Company brings a suit against Delta in the United States District Court for the Eastern District of Virginia
for breach of non-disclosure agreement, wrongful appropriation of the technical solutions actually invented by
the Company’s employees LI Yi and HU Fei, and filing for patent application in the United States without
authorization, and petitions the court to order that the inventors of the patent-in-suit US 9,024,241 shall be
changed from WANG Bo, ZHANG Kesu and HUA Jianhao into LI Yi and HU Fei.
IV. Cases of dispute over infringement on patents for invention [2019] Jing 73 Min Chu No. 1275 and No. 1276 Please refer to the Announcement No.
1. Parties 2019-014 issued by the Company on
Plaintiff: Delta Electronics, Inc. www.sse.com.cn and the designated media for
Defendant 1: Fengmi (Beijing) Technology Co., Ltd. information disclosure on September 21, 2019.
Defendant 2: Appotronics Corporation Limited
2. Background: The Plaintiff alleges that it is the owner of the patents for invention ZL201410249663.7
“manufacturing method of light source module and color wheel” and ZL201610387831.8 “phosphor color wheel
and its applicable light source system”, and the joint production and sale of Mijia Laser Projector TV
“MJJGTYDS01FM” by Defendant 1 and Defendant 2 has infringed on such patents for invention owned by the
Plaintiff and caused economic losses to the Plaintiff.
3. Amount claimed: 32.02 million.
V. Case of dispute over title to patents [2019] Yue 03 Min Chu No. 4309 Please refer to the Announcement No.
1. Parties 2019-028 issued by the Company on
Plaintiff: Appotronics Corporation Limited www.sse.com.cn and the designated media for
Defendant: Delta Electronics, Inc. information disclosure on November 8, 2019.
2. Background
The Plaintiff brings a suit in the Shenzhen Intermediate People’s Court, alleging that the Defendant filed a patent
application in respect of the technical solution owned by the Plaintiff and named WANG Bo, ZHANG Kesu and
HUA Jianhao as the inventors of such technical solution without authorization, thereby infringed on the technical
achievements made by the Plaintiff and the right of authorship of LI Yi and HU Fei, the actual inventors, and
petitions the court to declare that Plaintiff 1, Appotronics Corporation Limited owns the patent
ZL201610387831.8 “phosphor color wheel and its applicable light source system”, and that Plaintiff 2, HU Fei
and Plaintiff 3, LI Yi are the first and second inventors of the patent ZL201610387831.8 “phosphor color wheel
and its applicable light source system”.
VI. Case of dispute over infringement on patents for invention (2020) Jin 03 Zhi Min Chu No. 159 Please refer to the Announcement No.
1. Parties 2020-021 issued by the Company on
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2020 Semiannual Report
Plaintiff: Fengmi (Beijing) Technology Co., Ltd. www.sse.com.cn and the designated media for
Defendant 1: Chengdu XGIMI Technology Co., Ltd. information disclosure on June 3, 2020.
Defendant 2: Chengdu XGIMI Vision E-commerce Co., Ltd. Tianjin Second Branch
2. Background
According to the investigation, the Plaintiff detected that Defendant 2 sold and offered for sale the product
accused of infringement that were manufactured by Defendant 1. The product accused of infringement - Z6
series projector - adopted the technical solution falling within the protection scope of the claims in the patent No.
ZL201110086731.9 “High-brightness excitation method and light-emitting device based on optical wavelength
conversion”, hence constituted infringement. The Plaintiff held that the two defendants implemented the patent
at issue for business purposes without permission, hence violated the provisions of Article 11 of the Patent Law
of the People’s Republic of China, and should be held legally liable for stopping infringement and making
compensation for losses.
3. Amount claimed: 46.00 million.
VII. Cases of dispute over infringement on patents for invention [2019] Jing 73 Min Chu No. 1277 and No. 1278 Please refer to the Announcement No.
1. Parties 2020-022 issued by the Company on
Plaintiff: Delta Electronics, Inc. www.sse.com.cn and the designated media for
Defendant 1: Fengmi (Beijing) Technology Co., Ltd. information disclosure on June 13, 2020.
Defendant 2: Appotronics Corporation Limited
2. Background: The Plaintiff alleges that it is the owner of the patents for invention ZL201310017478.0 “Optical
system” and ZL201010624724.5 “Light source system and projecting device comprising same”, and the joint
production and sale of Mijia Laser Projector TV “MJJGTYDS01FM” by Defendant 1 and Defendant 2 has
infringed on such patents for invention owned by the Plaintiff and caused economic losses to the Plaintiff.
3. Amount claimed: 32.02 million.
Note: The Guangzhou IP Court has issued Civil Rulings [2019] Yue 73 Zhi Min Chu No. 663 and No. 664, ordering the freeze of an aggregate of RMB 20 million
of deposit of the Company. As of the date when this Report is released, this amount has been released.
(II) Litigations and arbitrations that have not been disclosed in interim announcements or about which there’s new information available
√ Applicable□ N/A
Unit: Yuan Currency: RMB
During the reporting period:
Whether
Party jointly Type of any Enforcement
Plaintiff/ Amount Result and
Defendant/respondent and severally litigation/ Background provision Status of judgment/
claimant claimed effect
liable arbitration is award
recognized
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2020 Semiannual Report
and the
amount
Delta Appotronics Futian SPN Infringement In the case of dispute 1,614.53 No Stayed, Stayed RMB 10
Electronics, Corporation Limited Projector & on patent for over infringement on RMB 10 million has
Inc. Video invention patents for invention million been
System Firm [2019] Yue 73 Zhi has been released
of Shenzhen Min Chu No. 662, the released
Plaintiff alleges that it
is the owner of the
patent for invention
ZL201610387831.8
“phosphor color
wheel and its
applicable light source
system”, and the
production, sale and
offer for sale of
“Appotronics Laser
Projector
AL-LX410UST” by
Defendant 1 and
Defendant 2 for
purpose of production
and operation has
infringed on such
patent for invention of
the Plaintiff and
caused economic
losses to the Plaintiff.
Appotronics Dehao Electronic Shenzhen Infringement In the cases of dispute 2,081.52 No Pending Judgment of Pending
Corporation Technology Ltd. Super on patent for over infringement on second first second trial
Limited, and Network invention patents for invention trial instance:
Shenzhen Technology [2018] Yue 03 Min The
YLX Co., Ltd. Chu No.s 1899-1907, Defendant
Technology the Plaintiff alleges should stop
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Development that the production, its act of
Co., Ltd. sale and offer for sale infringement
of a variety of and pay the
projector products by Plaintiff for
Defendant 1 and the
Defendant 2 for economic
purpose of production losses and
and operation has reasonable
infringed on the expenses,
Plaintiff’s patent for RMB 17.80
invention and caused million in
economic losses to the total.
Plaintiff.
Appotronics Dehao Electronic Shenzhen Infringement In the cases of dispute 2,081.52 No Pending Judgment of Pending
Corporation Technology Ltd. Super on patent for over infringement on second first second trial
Limited Network invention patents for invention trial instance:
Technology [2018] Yue 03 Min The
Co., Ltd. Chu No.s 1891-1898 Defendant
and 1940, the Plaintiff should stop
alleges that the its act of
production, sale and infringement
offer for sale of a and pay the
variety of projector Plaintiff for
products by the
Defendant 1 and economic
Defendant 2 for losses and
purpose of production reasonable
and operation has expenses,
infringed on the RMB 17.80
Plaintiff’s patent for million in
invention and caused total.
economic losses to the
Plaintiff.
Casio Appotronics AV Design Infringement In the cases of dispute 2,049.95 No The Judgment of The
Computer Corporation Limited (Beijing) on patent for over infringement on Parties first withdrawing
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Co., Ltd. Technology invention patents for invention entered instance: All ruling has
Development [2016] Jing 73 Min into a claims made been
Co., Ltd. Chu No.s 59-60, the mediation by Casio received
Plaintiff alleges that it agreement Computer
is the owner of the in March Co., Ltd.
patents for invention 2020. were
201210334155.X and dismissed.
201010293730.7, and The Parties
the production, sale entered into
and offer for sale of a mediation
Laser TV agreement in
APUS-20(S) by March 2020.
Defendant 1 and
Defendant 2 for
purpose of production
and operation has
infringed on such
patents for invention
of the Plaintiff and
caused economic
losses to the Plaintiff.
Appotronics Casio Computer Co., Casio Infringement In the cases of dispute 760 No The The Parties The
Corporation Ltd. (China) Co., on patent for over infringement on Parties entered into withdrawing
Limited Ltd. and invention patents for invention entered a mediation ruling has
Beijing [2018] Jing 73 Min into a agreement in been
Hongyang Chu No.s 1239 and mediation March 2020. received
Jiye 1240, the Plaintiff agreement
Technology alleges that it is the in March
Co., Ltd. owner of the patent 2020.
for invention
ZL200810065225.X,
and the production,
sale and offer for sale
of two laser projector
products by
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Defendant 1,
Defendant 2 and
Defendant 3 for
purpose of production
and operation has
infringed on such
patent for invention of
the Plaintiff and
caused economic
losses to the Plaintiff.
(III) Other information
√ Applicable□ N/A
As of June 30, 2020, the cases of petition for invalidation involving the Company that were pending trial by the State Intellectual Property Office are as follows:
1. Cases of petition for invalidation brought against the Company as the patent assignee
No. Case No. Current Patent No. at issue Title of patent at Petitioner Background Remark
patent issue for
assignee invalidation
1 4W108668 Appotronics ZL200810065225.X A phosphor-based Dehao On March 27, 2019, the petitioner for The State
Corporation light source Electronic invalidation filed a petition for invalidation of Intellectual
Limited structure for Technology the patent for invention 200810065225.X titled Property Office
improving the Ltd. “a phosphor-based light source structure for decided that the
efficiency of light improving the efficiency of light conversion” patent at issue is
conversion owned by the Company, which was found to valid. Please
comply with the relevant provisions of the refer to our
Patent Law, the Rules for Implementation of Interim
the Patent Law and the Guidelines for Announcement
Examination according to prima facie No. 2020-026
examination, and was accepted by the State on July 8, 2020
Intellectual Property Office on April 4, 2019. for details.
2 4W108847 Appotronics ZL200810065225.X A phosphor-based WEI Qun On May 9, 2019, the petitioner for invalidation The State
Corporation light source filed a petition for invalidation of the patent for Intellectual
Limited structure for invention 200810065225.X titled “a Property Office
improving the phosphor-based light source structure for decided that the
efficiency of light improving the efficiency of light conversion” patent at issue is
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2020 Semiannual Report
conversion owned by the Company, which was found to valid. Please
comply with the relevant provisions of the refer to our
Patent Law, the Rules for Implementation of Interim
the Patent Law and the Guidelines for Announcement
Examination according to prima facie No. 2020-026
examination, and was accepted by the State on July 8, 2020
Intellectual Property Office on June 5, 2019. for details.
3 4W110041 Appotronics ZL200810065225.X A phosphor-based Delta On February 5, 2020, the petitioner for The State
Corporation light source Electronics invalidation filed a petition for invalidation of Intellectual
Limited structure for Business the patent for invention 200810065225.X titled Property Office
improving the Management “a phosphor-based light source structure for decided that the
efficiency of light (Shanghai) improving the efficiency of light conversion” patent at issue is
conversion Co., Ltd. owned by the Company, which was found to valid. Please
comply with the relevant provisions of the refer to our
Patent Law, the Rules for Implementation of Interim
the Patent Law and the Guidelines for Announcement
Examination according to prima facie No. 2020-026
examination, and was accepted by the State on July 8, 2020
Intellectual Property Office on February 20, for details.
2020.
4 4W110045 Appotronics ZL200880107739.5 A multi-color Delta On February 12, 2020, the petitioner for Pending trial
Corporation lighting apparatus Electronics invalidation filed a petition for invalidation of
Limited using moving Business the patent for invention 200880107739.5 titled
pattern plate Management “a multi-color lighting apparatus using moving
containing (Shanghai) pattern plate containing wavelength conversion
wavelength Co., Ltd. material” (“Patent 7739”) owned by the
conversion Company, which was found to comply with the
material relevant provisions of the Patent Law, the Rules
for Implementation of the Patent Law and the
Guidelines for Examination according to prima
facie examination, and was accepted by the
State Intellectual Property Office on March 5,
2020.
5 4W110558 Appotronics ZL201110086731.9 High-brightness Chengdu On June 3, 2020, the petitioner for invalidation Pending trial
Corporation excitation method XGIMI filed a petition for invalidation of the patent for
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2020 Semiannual Report
Limited and light-emitting Technology invention 201110086731.9 titled
device based on Co., Ltd. “High-brightness excitation method and
optical light-emitting device based on optical
wavelength wavelength conversion” owned by the
conversion Company, which was found to comply with the
relevant provisions of the Patent Law, the Rules
for Implementation of the Patent Law and the
Guidelines for Examination according to prima
facie examination, and was accepted by the
State Intellectual Property Office on June 12,
2020.
2. Cases of petition for invalidation brought by the Company
No. Case No. Current patent Patent No. at issue Title of patent at Petitioner Background Remark
assignee issue for
invalidation
1 4W109295 Delta ZL201610387831.8 Phosphor color Appotronics On July 29, 2019, the Company filed a petition On December 9,
Electronics, wheel and its Corporation for invalidation of the patent for invention 2019, the State
Inc. applicable light Limited 201610387831.8 titled “phosphor color wheel Intellectual
source system and its applicable light source system” owned Property Office
by Delta Electronics, Inc. with the State decided to
Intellectual Property Office, which was found to suspend the trial
comply with the relevant provisions of the from November
Patent Law, the Rules for Implementation of the 7, 2019 to
Patent Law and the Guidelines for Examination November 7,
according to prima facie examination, and was 2020.
accepted by the State Intellectual Property
Office on July 30, 2019.
2 4W109538 Delta ZL201410249663.7 Manufacturing Appotronics On September 20, 2019, the Company filed a Pending trial
Electronics, method of light Corporation petition for invalidation of the patent for
Inc. source module Limited invention 201410249663.7 titled
and color wheel “manufacturing method of light source module
and color wheel” owned by Delta Electronics,
Inc. with the State Intellectual Property Office,
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which was found to comply with the relevant
provisions of the Patent Law, the Rules for
Implementation of the Patent Law and the
Guidelines for Examination according to prima
facie examination, and was accepted by the
State Intellectual Property Office on September
23, 2019.
3 4W110623 Delta ZL201010624724.5 Light source Appotronics On June 15, 2020, the Company filed a petition Pending trial
Electronics, system and Corporation for invalidation of the patent for invention
Inc. projecting device Limited 201010624724.5 titled “Light source system
comprising same and projecting device comprising same” owned
by Delta Electronics, Inc. with the State
Intellectual Property Office, which was found to
comply with the relevant provisions of the
Patent Law, the Rules for Implementation of the
Patent Law and the Guidelines for Examination
according to prima facie examination, and was
accepted by the State Intellectual Property
Office.
3. During the reporting period, the National Intellectual Property Administration examined and declared that the following patents held by the Company are valid,
namely patent for invention 200880107739.5 titled “A multi-color lighting apparatus using moving pattern plate containing wavelength conversion material” and
patent for invention 200810065225.X titled “A phosphor-based light source structure for improving the efficiency of light conversion”. Please refer to the Interim
Announcements 2020-005 and 2020-026 for details.
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VII.Penalties imposed on the listed company and its directors, supervisors, senior officers,
controlling shareholder, actual controller and acquirer and rectification of the relevant
violations
□ Applicable√ N/A
VIII. Credit standing of the Company and its controlling shareholder and actual controller
during the reporting period
□ Applicable√ N/A
IX. Share incentive plan, employee stock ownership plan and other employee incentive measures
of the Company and their effect
(I) Equity incentives already disclosed in the interim announcements about which no new
information is available
√ Applicable□ N/A
Summary Reference
On September 27, 2019, the Company held the 17th Please refer to the relevant announcement
meeting of the 1st Board of Directors and the 7th meeting issued by the Company on
of the 1st Board of Supervisors, which reviewed and www.sse.com.cn and the designated media
approved the Proposal on the 2019 Restricted Share for information disclosure on September
Incentive Plan (Draft) of the Company and Summary of 28, 2019.
the Plan and other related proposals.
On October 14, 2019, the Company held the 6th Please refer to the relevant announcement
extraordinary general meeting of shareholders in 2019, issued by the Company on
which reviewed and approved the Proposal on the 2019 www.sse.com.cn and the designated media
Restricted Share Incentive Plan (Draft) of the Company for information disclosure on October 15,
and Summary of the Plan and other related proposals. 2019.
On October 14, 2019, the Company held the 18th meeting Please refer to the relevant announcement
of the 1st Board of Directors and the 8th meeting of the 1st issued by the Company on
Board of Supervisors, which reviewed and approved the www.sse.com.cn and the designated media
Proposal on the Adjustment of the 2019 Restricted Share for information disclosure on October 15,
Incentive Plan and the Proposal on Initial Grant of 2019.
Restricted Shares, pursuant to which, the Company
initially granted 4.4 million shares to 169 persons at the
price of RMB 17.5 per share on October 14, 2019. The
Company’s independent directors expressed their
independent opinions on such proposals, and the Board of
Supervisors expressed its opinion after review of such
proposals.
(II) Incentives that have not been disclosed in any interim announcement or about which there’s
new information available
Share incentives
□ Applicable√ N/A
Other description
□ Applicable√ N/A
Employee stock ownership plan
□ Applicable√ N/A
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Other incentives
□ Applicable√ N/A
X. Material related-party transactions
(I) Related-party transactions in connection with day-to-day operation
1. Matters already disclosed in the interim announcements about which no new
informationisavailable
√ Applicable□ N/A
Summary Reference
The Company expects to engage in routine Please refer to the Announcement No. 2020-014
related-party transactions with China Film “Announcement on expected routine related-party
Equipment Co., Ltd. and its affiliates, Xiaomi transactions in 2020” issued by the Company on
Communications Technologies Co., Ltd. and its www.sse.com.cn and the designated media for
affiliates, Beijing DonView Education Technology information disclosure on April 29, 2020）。
Co., Ltd. and its affiliates, and CINIONIC for a
total expected amount of RMB 1,253.1000
million.
2. Matters already disclosed in the interim announcements about which there’s new
informationavailable
□ Applicable√ N/A
3. Mattersthathavenotbeendisclosedinanyinterimannouncement
□ Applicable√ N/A
(II) Related-party transactions involving acquisition or sale of assets or equities
1. Matters already disclosed in the interim announcements about which no new
informationisavailable
□ Applicable√ N/A
2. Matters already disclosed in the interim announcements about which there’s new
informationavailable
□ Applicable√ N/A
3. Mattersthathavenotbeendisclosedinanyinterimannouncement
□ Applicable√ N/A
4. Fulfillmentofperformancecovenants(ifany)duringthereportingperiod
□ Applicable√ N/A
(III) Related-party transactions involving joint external investments
1. Matters already disclosed in the interim announcements about which no new
informationisavailable
□ Applicable√ N/A
2. Matters already disclosed in the interim announcements about which there’s new
informationavailable
□ Applicable√ N/A
3. Mattersthathavenotbeendisclosedinanyinterimannouncement
□ Applicable√ N/A
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2020 Semiannual Report
(IV) Accounts receivable from and payable to related parties
1. Matters already disclosed in the interim announcements about which no new
informationisavailable
□ Applicable√ N/A
2. Matters already disclosed in the interim announcements about which there’s new
informationavailable
□ Applicable√ N/A
3. Mattersthathavenotbeendisclosedinanyinterimannouncement
□ Applicable√ N/A
(V) Material related-party transactions
□ Applicable√ N/A
(VI) Others
□ Applicable√ N/A
XI. Material contracts and performance thereof
1 Trusteeship, contracting and lease
□ Applicable√ N/A
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2020 Semiannual Report
2 Guarantees
√ Applicable□ N/A
Unit: In RMB 0’000 RMB
External guarantees provided by the Company (excluding those provided for the subsidiaries)
Whether
Relationship Whether
Commencement the Whether a
between the the Amount of Whether
date of obligation guarantee
guarantor Guaranteed Guarantee Guarantee Type of obligation the overdue there’s a Related
Guarantor Obligor guarantee guaranteed for a
and the amount start date expiry date guarantee guaranteed obligation counter relationsh
(signing date of has related
listed has been guaranteed guarantee
agreement) become party
company discharged
overdue
Total amount of guarantees provided during the reporting period (excluding those
provided for the subsidiaries)
Balance of guarantees at the end of the reporting period (excluding those provided
for the subsidiaries) (A)
Guarantees provided by the Company or its subsidiaries for the subsidiaries of the Company
Whether
Whether
Relationship Relationship Commencement the Amount of
the Whether
between the between the date of Inception Expiry date obligation the
Guaranteed Type of obligation there’s a
Guarantor guarantor Obligor obligor and guarantee date of of guaranteed overdue
amount guarantee guaranteed counter
and the listed the listed (signing date of guarantee guarantee has obligation
has been guarantee
company company agreement) become guaranteed
discharged
overdue
Three years
CINEAPPO after the
Laser due date for
Appotronics Joint and
Cinema Controlled the
Corporation Headquarters 70,000 2020-5-31 2020-5-31 several No No No
Technology subsidiary obligations
Limited liability
(Beijing) under the
Co., Ltd. master
contract
Appotronics CINEAPPO Controlled Joint and
Headquarters 6,000 2019-6-27 2019-6-27 2023-6-26 No No No
Corporation Laser subsidiary several
92 / 234
2020 Semiannual Report
Limited Cinema liability
Technology
(Beijing)
Co., Ltd.
Two years
Appotronics after the Joint and
Controlled
Corporation Headquarters Fengmi 16,500 2019-10-21 2019-10-21 due date for several No No No
subsidiary
Limited the liability
obligations
Initial
Two years
utilization
after the
date or
latest due
Appotronics actual date Joint and
Controlled date of the
Corporation Headquarters Fengmi 10,000 2018-11-23 of several No No No
subsidiary loans under
Limited utilization liability
the
under the
financing
financing
letter
letter
Total amount of guarantees provided for the subsidiaries during the reporting period 17,56
Balance of guarantees provided for the subsidiaries at the end of the reporting 41,62
period (B)
Total amount of guarantees provided by the Company (including those provided for the subsidiaries)
Total amount guaranteed (A+B) 41,62
Proportion of total amount guaranteed to the net assets of the Company (%) 19.8
Including:
Total amount of guarantees provided for the shareholders, actual controller and their
affiliates (C)
Total amount of debt guarantees directly or indirectly provided for the obligors 26,50
whose equity-debt ratio exceeds 70% (D)
Total amount guaranteed in excess of 50% of the net assets of the Company (E)
Total amount guaranteed (C+D+E) 26,50
Explanation about outstanding guarantees for which the Company may assume joint
93 / 234
2020 Semiannual Report
and several liability
Explanation about guarantees
Note: With respect to the guarantee provided by the Company for Fengmi in the amount of RMB 100 million as of the date of this Report, the guarantee contract has
been executed but the relevant bank loan has not been granted, so no liability for guarantee has been incurred.
94 / 234
2020 Semiannual Report
3 Other material contracts
□ Applicable√ N/A
XII.Poverty alleviation of listed companies
□ Applicable√ N/A
XIII. Convertible corporate bonds
□ Applicable√ N/A
XIV. Environment
(I) Environmental protection information of the Company and its major subsidiaries that are
identified as major polluters by the environmental protection authority
□ Applicable√ N/A
(II) Environmental protection information of the Company that is not identified as a major
polluter
√ Applicable□ N/A
We have not been identified as a major polluter during the reporting period. We attach importance to
environmental protection and have taken the following environmental protection measures to fulfill our
social responsibility:
Disposal of solid wastes
Our solid wastes include consumer wastes, general industrial solid wastes and hazardous wastes. The
consumer wastes are collected and then handed over to the environmental sanitation entity for
centralized treatment. The general industrial solid wastes mainly consist of leadless waste scruff and
waste packing materials generated in the production process, which are collected by category and then
handed over to the relevant resource recycling entities for recycling. The hazardous wastes mainly
consist of waste active carbon generated in the waste gas treatment process, and wastes containing
industrial alcohol and waste packing materials containing cleaning agents that are generated in the
production process, which are collected and then handed over to the qualified entities for treatment.
Sewage treatment
Our sewage includes domestic sewage and industrial sewage. The domestic sewage is pre-treated
through septic tank or otherwise, and after meeting the relevant standard, discharged to the municipal
sewage treatment pipelines and sewage treatment plant. The industrial sewage is handed over to the
qualified entities for treatment. In addition, we have optimized the technologies currently used to reduce
the sewage discharged. We appoint a third party to inspect our domestic sewage every year.
Waste gas treatment
Our waste gas mainly includes waste gas containing tin and organic waste gas generated in the
production process. We have built a waste gas treatment system, comprising UV photolysis, active
carbon adsorption plant, air purification equipment and other equipment. The concentration of tin and
NmHc in the waste gas discharged by us to the air meets the local standard for Atmospheric Pollutant
Emission Limit. We appoint a third party to conduct the relevant inspections every year.
Certifications relating to environmental protection
We passed ISO14001 environmental management system certification in 2008, and has maintained such
certification to date. In 2019, we passed QC080000 hazardous substance process management system
certification. All of our products are green products and have passed RoHS, REACH and China
environmental labeling product certification, among others.
(III) Reason for failure to disclose environmental protection information of the Company that is
not identified as a major polluter
□ Applicable√ N/A
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2020 Semiannual Report
(IV) New information about the environmental protection information disclosed during the
reporting period
□ Applicable√ N/A
XV. Other significant matters
(I) Changes, reasons, and impacts of accounting policies, accounting estimates, and accounting
methods compared with the previous accounting period
√ Applicable□ N/A
Please refer to V.44 of Section X Financial Report for details.
(II) Description of retrospective restatement, amount of adjustment, reasons and impacts of
materialaccountingerrorsoccurredduringthereportingperiod
□ Applicable√ N/A
(III) Others
□ Applicable√ N/A
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2020 Semiannual Report
Section VI. Changes in Shares and Shareholders
(I) Changes in ordinary shares
(I) Statement of changes in ordinary shares
1. Statement of changes in ordinary shares
Unit: Share
Before the change +/- After the change
Capitalization
Proportion New Bonus Proportion
Number of capital Others Sub-total Number
(%) shares shares (%)
reserves
I. Non-tradable shares 394,361,498 87.33 -3,538,402 -3,538,402 390,823,096 86.55
1. Shares held by the State
2. Shares held by state-owned
corporations
3. Shares held by other domestic 243,665,462 53.96 -3,538,402 -3,538,402 240,127,060 53.18
investors
Including: Shares held by domestic 233,615,923 51.73 -3,538,402 -3,538,402 230,077,521 50.95
non-stated-owned corporations
Shares held by domestic natural 10,049,539 2.23 10,049,539 2.23
persons
4. Shares held by foreign investors 150,696,036 33.37 150,696,036 33.37
Including: Shares held by foreign 135,203,427 29.94 135,203,427 29.94
corporations
Shares held by foreign natural 15,492,609 3.43 15,492,609 3.43
persons
II. Tradable shares 57,192,913 12.67 3,538,402 3,538,402 60,731,315 13.45
1. RMB-denominated ordinary shares 57,192,913 12.67 3,538,402 3,538,402 60,731,315 13.45
2. Foreign currency-denominated shares
listed domestically
3. Foreign currency-denominated shares
listed overseas
4. Others
III. Total shares 451,554,411 100.00 0 0 451,554,411 100.00
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2020 Semiannual Report
2. Explanationaboutchangesinordinaryshares
√ Applicable□ N/A
On January 14, 2020, 3,538,402 off-line allotted shares in IPO were eligible for trading on the market. Please refer to the Announcement No. 2020-001
“Announcement of Appotronics Corporation Limited on the circulation of off-line allotted shares in IPO” issued by the Company on www.sse.com.cn on January 14,
2020 for details.
98 / 234
2020 Semiannual Report
3. Effect of the changes in shares on the earnings per share, net assets per share and other
financial indicators for the duration after the reporting period to the disclosure date of the
semiannualreport(ifany)
□ Applicable√ N/A
4. Other information disclosed as the Company deems necessary or required by the
securitiesregulatoryauthority
□ Applicable√ N/A
(II) Changes in non-tradable shares
√ Applicable□ N/A
Unit: Share
Balance of Number of Number of
Balance of
non-tradable non-tradable non-tradable
tradable
shares at the shares shares
shares at the Reason for
Shareholder beginning of unlocked increased Unlock date
end of the restriction
the during the during the
reporting
reporting reporting reporting
period
period period period
Off-line 3,538,402 3,538,402 0 0 Non-tradable January 22,
allotment off-line 2020
account allotted
shares in
IPO
Total 3,538,402 3,538,402 0 0 / /
(II) Shareholders
(I) Total number of shareholders:
Total number of shareholders of ordinary shares as of the 16,563
end of the reporting period
Total number of shareholders of preferred shares whose 0
voting right has been restituted as of the end of the
reporting period
Number of holders of depository receipts
□ Applicable√ N/A
(II) Shares held by top 10 shareholders and top 10 holders of tradable shares as of the end of the
reporting period
Unit: Share
Shares held by top 10 shareholders
Shares
Number of
pledged or
Change Balance of non-tradable
frozen
during shares held shares held,
Sharehold Number of Shareho
the as at the end Proport including the N
er non-tradable lder
reporti of the ion (%) shares lent out u
(full name) shares held Share nature
ng reporting under the m
period period refinancing status
be
arrangement r
99 / 234
2020 Semiannual Report
Shenzhen 0 79,762,679 17.66 79,762,679 79,762,679 0 Domest
Appotroni ic
cs non-stat
Holdings None ed
Co., Ltd. owned
corpora
tion
SAIF IV 0 62,980,676 13.95 62,980,676 62,980,676 0 Foreign
Hong corpora
Kong tion
None
(China
Investment
s) Limited
CITIC PE 0 41,774,562 9.25 41,774,562 41,774,562 0 Foreign
Investment corpora
(Hong tion
None
Kong)
2016
Limited
Fuzhou 0 25,064,737 5.55 25,064,737 25,064,737 0 Domest
Haixia ic
Appotroni non-stat
cs None ed
Investment owned
Partnershi corpora
p (LP) tion
Shenzhen 0 24,139,500 5.35 24,139,500 24,139,500 0 Domest
Yuanshi ic
Laser non-stat
Industrial ed
None
Investment owned
Consulting corpora
Partnershi tion
p (LP)
Shenzhen 0 20,430,250 4.52 20,430,250 20,430,250 0 Domest
Appotroni ic
cs Daye non-stat
Investment None ed
Partnershi owned
p ( LP) corpora
tion
GREEN 0 16,504,518 3.66 16,504,518 16,504,518 0 Foreign
FUTURE corpora
HOLDIN None tion
GS
LIMITED
Shenzhen 0 15,662,374 3.47 15,662,374 15,662,374 0 Domest
Appotroni ic
cs Hongye non-stat
Investment None ed
Partnershi owned
p (LP) corpora
tion
100 / 234
2020 Semiannual Report
Shenzhen 0 12,353,106 2.74 12,353,106 12,353,106 0 Domest
Jinleijing ic
Investment non-stat
Limited None ed
Partnershi owned
p (LP) corpora
tion
Changzho 0 11,667,635 2.58 11,667,635 11,667,635 0 Domest
u Lisheng ic
Equity non-stat
Investment None ed
Partnershi owned
p (LP) corpora
tion
Shares held by top 10 holders of tradable shares
Type and number of
Number of
shares
Shareholder tradable shares
Numbe
held Category
r
UBS AG 1,557,640 RMB-denomi 1,557,6
nated ordinary 40
share
Huatai Securities Co., Ltd. 978,400 RMB-denomi 978,40
nated ordinary 0
share
ZHONG Haidi 834,659 RMB-denomi 834,65
nated ordinary 9
share
National Social Security Fund Portfolio No. 102 700,000 RMB-denomi 700,00
nated ordinary 0
share
LONG Shixue 464,700 RMB-denomi 464,70
nated ordinary 0
share
GAO Ermei 393,713 RMB-denomi 393,71
nated ordinary 3
share
China Merchants Bank Co., Ltd. - Pengyang Jingxin 385,157 RMB-denomi 385,15
Hybrid Securities Investment Fund nated ordinary 7
share
WANG Danping 329,210 RMB-denomi 329,21
nated ordinary 0
share
ZHANG Shangmin 317,734 RMB-denomi 317,73
nated ordinary 4
share
Guotai Junan Securities Co., Ltd. 288,088 RMB-denomi 288,08
nated ordinary 8
share
101 / 234
2020 Semiannual Report
Affiliates or concert parties among the shareholders stated 1. As of the end of the reporting period,
above among our top 10 shareholders,
Appotronics Holdings, Yuanshi,
Appotronics Daye, Appotronics Hongye
and Jinleijing are concert parties. We have
not received any notice about affiliates or
concert parties among other shareholders
stated above.
2. We are not aware whether there are
affiliates or concert parties as defined in the
Administrative Measures for the
Acquisition of the Listed Companies among
the holders of tradable shares.
Holders of preferred shares whose voting right has been N/A
restituted and the number of shares held by them
Top 10 holders of non-tradable shares and lock-up period
√ Applicable□ N/A
Unit: Share
Unlocking of
non-tradable shares
Number of
Number of Lock-up
No. Holder of non-tradable shares non-tradable
Unlock shares period
shares held
date newly
unlocked
1 Shenzhen Appotronics Holdings 79,762,679 July 22, 0 36
Co., Ltd. 2022 months
after the
listing
date
2 SAIF IV Hong Kong (China 62,980,676 July 22, 0 12
Investments) Limited 2020 months
after the
listing
date
3 CITIC PE Investment (Hong Kong) 41,774,562 July 22, 0 12
2016 Limited 2020 months
after the
listing
date
4 Fuzhou Haixia Appotronics 25,064,737 July 22, 0 12
Investment Partnership (LP) 2020 months
after the
listing
date
5 Shenzhen Yuanshi Laser Industrial 24,139,500 July 22, 0 36
Investment Consulting Partnership 2022 months
(LP) after the
listing
date
6 Shenzhen Appotronics Daye 20,430,250 July 22, 0 36
Investment Partnership ( LP) 2022 months
after the
listing
date
102 / 234
2020 Semiannual Report
7 GREEN FUTURE HOLDINGS 16,504,518 July 22, 0 12
LIMITED 2020 months
after the
listing
date
8 Shenzhen Appotronics Hongye 15,662,374 July 22, 0 36
Investment Partnership (LP) 2022 months
after the
listing
date
9 Shenzhen Jinleijing Investment 12,353,106 July 22, 0 36
Limited Partnership (LP) 2022 months
after the
listing
date
10 Changzhou Lisheng Equity 11,667,635 July 22, 0 12
Investment Partnership (LP) 2020 months
after the
listing
date
Affiliates or concert parties among the As of the end of the reporting period, among our top 10
shareholders stated above shareholders, Appotronics Holdings, Yuanshi,
Appotronics Daye, Appotronics Hongye and Jinleijing
are concert parties. We have not received any notice
about affiliates or concert parties among other
shareholders stated above.
Statement of top 10 holders of domestic depository receipts as of the end of the reporting period
□ Applicable√ N/A
Number of non-tradable depository receipts held by top 10 holders and lock-up period
□ Applicable√ N/A
(III) Statement of top 10 shareholders by number of votes held as of the end of the reporting
period
□ Applicable√ N/A
(IV) Strategic investors or general corporations that become top shareholders as a result of
allotment of new shares/depository receipts
□ Applicable√ N/A
(III) Changes in the controlling shareholder or actual controller
□ Applicable√ N/A
(IV) Implementation of and changes in arrangements relating to depository receipts during the
reporting period
□ Applicable√ N/A
(V) Shares with special voting rights
Section VII. Preferred Shares
□ Applicable√ N/A
103 / 234
2020 Semiannual Report
Section VIII. Directors, Supervisors, Senior Officers and Employees
I. Changes in shareholding
(I) Changes in shareholding of current directors, supervisors, senior officers and key technical
staff and the former directors, supervisors, senior officers and key technical staff who left the
Company during the reporting period
□ Applicable√ N/A
Other information
□ Applicable√ N/A
(II) Share incentives granted to directors, supervisors, senior officers and key technical staff
during the reporting period
1.Shareoptions
□ Applicable√ N/A
2.TypeIrestrictedshares
□ Applicable√ N/A
3.TypeIIrestrictedshares
□ Applicable√ N/A
II. Changes in directors, supervisors, senior officers and key technical staff
√ Applicable□ N/A
Name Position Change
ZENG Luhai Deputy General Manager Left the Company
XIAO Yangjian Deputy General Manager & Board Left the Company
Secretary
Changes in directors, supervisors, senior officers and key technical staff
√ Applicable□ N/A
1. Mr. ZENG Luhai resigned from his position as Deputy General Manager of the Company due to
personal career development reasons, and will act as a consultant of the Company after resigning from
the Company. The Company issued an announcement regarding this event on January 23, 2020.
2. Mr. XIAO Yangjian resigned from his position as Deputy General Manager & Board Secretary of the
Company due to personal career development reasons, and will hold no position in the Company after
resigning from the Company. The Company issued an announcement regarding this event on May 21,
2020.
III. Other information
□ Applicable√ N/A
Section IX. Corporate Bonds
□ Applicable√ N/A
Section X. Financial Report
I. Auditor's report
□ Applicable√ N/A
104 / 234
2020 Semiannual Report
II. Financial statements
ConsolidatedBalanceSheet
At June 30, 2020
Prepared by: Appotronics Corporation Limited
Unit: Yuan Currency: RMB
Item Note At June 30, 2020 At December 31, 2019
Current Assets:
Cash and bank balances VII. 1 729,447,665.39 875,858,784.58
Balances with clearing
agencies
Placements with banks and
other financial institutions
Held-for-trading financial VII. 2 495,000,000.00 540,000,000.00
assets
Derivative financial assets
Notes receivable VII. 4 4,181,386.79 4,042,559.63
Accounts receivable VII. 5 134,035,161.27 176,035,155.24
Receivables financing VII. 6 362,600.00 1,980,500.00
Prepayments VII. 7 39,439,987.06 35,070,999.13
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer's share of
insurance contract reserves
Other receivables VII. 8 11,424,632.94 9,618,750.08
Including: Interest receivable
Dividends receivable
Financial assets purchased
under resale agreements
Inventories VII. 9 402,722,530.65 299,966,170.35
Contract assets VII. 10 3,914,909.70
Held-for-sale assets
Non-current assets due within
one year
Other current assets VII. 13 35,547,978.31 44,405,513.30
Total Current Assets 1,856,076,852.11 1,986,978,432.31
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivables
Long-term equity VII. 17 268,154,993.87 139,534,371.94
investments
Other equity instrument VII. 18 11,975,419.38 11,975,419.38
investments
Other non-current financial
assets
Investment properties
Fixed assets VII. 21 455,164,004.06 471,204,340.95
Construction in progress VII. 22 30,992,866.46 20,132,004.07
Bearer biological assets
Oil and gas assets
Use right assets
105 / 234
2020 Semiannual Report
Intangible assets VII. 26 324,969,424.31 332,331,324.07
Development expenditure
Goodwill
Long-term prepaid expenses VII. 29 14,996,204.71 16,908,070.34
Deferred tax asset VII. 30 114,095,667.69 109,023,941.85
Other non-current assets VII. 31 6,352,208.65 11,420,185.94
Total Non-current Assets 1,226,700,789.13 1,112,529,658.54
Total assets 3,082,777,641.24 3,099,508,090.85
Current Liabilities:
Short-term borrowings VII. 32 115,636,028.30 76,765,319.05
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable VII. 35 126,525,026.22 37,335,841.79
Accounts payable VII. 36 198,595,546.20 176,624,445.46
Receipts in advance VII. 37 173,963,358.36 184,444,643.33
Contract liabilities VII. 38 19,442,085.20
Financial assets sold under
repurchase agreements
Customer deposits and
deposits from banks and other
financial institutions
Funds from securities trading
agency
Funds from underwriting
securities agency
Employee benefits payable VII. 39 16,524,638.79 50,586,932.71
Taxes payable VII. 40 8,453,167.47 42,924,647.79
Other payables VII. 41 42,106,615.24 14,364,076.43
Including: Interest payable
Dividends payable VII. 41 11,279,223.68
Fees and commissions
payable
Amounts payable under
reinsurance contracts
Held-for-sale liabilities
Non-current liabilities due VII. 43 144,769,488.72 64,968,795.02
within one year
Other current liabilities 1,667,826.54
Total Current Liabilities 847,683,781.04 648,014,701.58
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings VII. 45 79,892,744.86 279,615,107.27
Bonds payable
Including: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term accounts payable VII. 48 3,539,750.00 3,488,100.00
Long-term employee benefits
payable
Provisions VII. 50 33,664,528.96 27,072,676.49
106 / 234
2020 Semiannual Report
Deferred income VII. 51 16,784,096.20 17,108,361.69
Deferred tax liabilities
Other non-current liabilities
Total Non-current 133,881,120.02 327,284,245.45
Liabilities
Total Liabilities 981,564,901.06 975,298,947.03
Owners' (or Shareholders')
Equity:
Paid-in capital (or share VII. 53 451,554,411.00 451,554,411.00
capital)
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve VII. 55 1,224,027,021.21 1,207,942,318.37
Less: Treasury shares
Other comprehensive income VII. 57 4,300,879.05 3,287,063.85
Special reserve
Surplus reserve VII. 59 22,800,224.13 22,800,224.13
General risk reserve
Retained profits VII. 60 270,715,417.30 288,975,820.29
Total owners’ (or
shareholders’) equity
1,973,397,952.69 1,974,559,837.64
attributable to owners of the
Parent Company
Minority interests 127,814,787.49 149,649,306.18
Total Owners’ (or
2,101,212,740.18 2,124,209,143.82
Shareholders’) Equity
Total Liabilities and
Owners’(or Shareholders’) 3,082,777,641.24 3,099,508,090.85
Equity
Legal representative: Person in Charge of the Accounting Body: Chief Accountant:
BO Lianming WEI Yanlin ZHAO Ruijin
Balance Sheet of the Parent Company
At June 30, 2020
Prepared by: Appotronics Corporation Limited
Unit: Yuan Currency: RMB
Item Note At June 30, 2020 At December 31, 2019
Current Assets:
Cash and bank balances 474,625,994.92 570,479,390.49
Held-for-trading financial 495,000,000.00 540,000,000.00
assets
Derivative financial assets
Notes receivable 1,518,836.79 3,542,559.63
Accounts receivable XVII. 1 381,316,044.94 299,315,776.44
Receivables financing 362,600.00 442,500.00
Prepayments 13,215,986.43 6,410,257.48
Other receivables XVII. 2 32,169,108.08 67,227,575.21
107 / 234
2020 Semiannual Report
Including: Interest receivable
Dividends receivable
Inventories 157,332,693.76 135,617,379.22
Contract assets 3,883,882.70
Held-for-sale assets
Non-current assets due within
one year
Other current assets 2,946,612.19 12,280,164.39
Total Current Assets 1,562,371,759.81 1,635,315,602.86
Non-current Assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity XVII. 3 393,643,159.82 257,795,276.13
investments
Other equity instrument 7,075,419.38 7,075,419.38
investments
Other non-current financial
assets
Investment properties
Fixed assets 56,384,337.62 60,391,512.92
Construction in progress 17,253,087.13 1,385,496.59
Bearer biological assets
Oil and gas assets
Use right assets
Intangible assets 323,721,801.47 330,796,423.87
Development expenditure
Goodwill
Long-term prepaid expenses 11,819,212.96 12,771,126.83
Deferred tax asset 11,124,507.71 9,545,438.20
Other non-current assets 6,099,956.30 6,744,453.85
Total Non-current Assets 827,121,482.39 686,505,147.77
Total assets 2,389,493,242.20 2,321,820,750.63
Current Liabilities:
Short-term borrowings 52,418,795.92 10,217,738.36
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 20,559,800.24 37,335,841.79
Accounts payable 182,773,808.53 162,596,838.45
Receipts in advance 6,672,836.65 11,116,659.11
Contract liabilities 6,597,357.56
Employee benefits payable 9,595,495.89 26,985,668.92
Taxes payable 2,243,767.43 1,534,242.70
Other payables 72,454,716.04 42,599,703.36
Including: Interest payable
Dividends payable 11,279,223.68
Held-for-sale liabilities
Non-current liabilities due
within one year
Other current liabilities 343,217.43
Total Current Liabilities 353,659,795.69 292,386,692.69
Non-current Liabilities:
Long-term borrowings
108 / 234
2020 Semiannual Report
Bonds payable
Including: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term accounts payable 3,539,750.00 3,488,100.00
Long-term employee benefits
payable
Provisions 17,615,667.43 14,631,273.00
Deferred income 15,571,644.47 15,724,174.30
Deferred tax liabilities
Other non-current liabilities
Total Non-current 36,727,061.90 33,843,547.30
Liabilities
Total Liabilities 390,386,857.59 326,230,239.99
Owners' (or Shareholders')
Equity:
Paid-in capital (or share 451,554,411.00 451,554,411.00
capital)
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1,328,516,411.30 1,310,939,867.82
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 21,522,683.40 21,522,683.40
Retained profits 197,512,878.91 211,573,548.42
Total Owners’ (or
1,999,106,384.61 1,995,590,510.64
Shareholders’) Equity
Total Liabilities and
Owners’(or Shareholders’) 2,389,493,242.20 2,321,820,750.63
Equity
Legal representative: Person in Charge of the Accounting Body: Chief Accountant:
BO Lianming WEI Yanlin ZHAO Ruijin
Consolidated Income Statement
Jan. - Jun. 2020
Unit: Yuan Currency: RMB
Item Note Half year of 2020 Half year of 2019
I. Total operating income 716,025,207.34 853,356,964.84
Including: Operating income VII. 61 716,025,207.34 853,356,964.84
Interest income
Premiums earned
Fee and commission income
II. Total operating costs 756,098,193.88 742,125,211.65
Including: Operating costs VII. 61 529,787,789.94 511,757,903.12
Interest expenses
Fee and commission expenses
109 / 234
2020 Semiannual Report
Surrenders
Claims and policyholder
benefits (net of amounts recoverable
from reinsurers)
Net withdrawal of insurance
contract reserves
Insurance policyholder
dividends
Expenses for reinsurance
accepted
Taxes and levies VII. 62 2,329,710.56 4,336,950.98
Sales expenses VII. 63 50,833,894.50 60,585,489.84
Administration expenses VII. 64 77,813,657.09 58,777,738.22
R&D expenses VII. 65 87,295,450.75 89,309,489.80
Financial expenses VII. 66 8,037,691.04 17,357,639.69
Including: Interest expense 11,612,825.87 18,267,758.92
Interest income 4,618,971.33 2,986,857.28
Add: Other income VII. 67 32,922,034.97 17,417,109.11
Investment income (loss is
VII. 68 11,726,688.51 -3,460,616.55
indicated by “-”)
Including: Income from
investments in associates and joint 901,894.80 -3,458,306.31
ventures
Gains from
derecognition of financial assets at
amortized assets (loss is indicated by
“-”)
Foreign exchange gains (loss is
indicated by “-”)
Gains from net exposure
hedges (loss is indicated by “-”)
Gains from changes in fair
values (loss is indicated by “-”)
Losses of credit impairment
VII. 71 2,170,106.96 -761,760.88
(loss is indicated by “-”)
Impairment losses of assets
VII. 72 -12,109,681.09 -1,379,296.10
(loss is indicated by “-”)
Gains from disposal of assets
VII. 73 149,620.91
(loss is indicated by “-”)
III. Operating profit (loss is indicated
-5,214,216.28 123,047,188.77
by “-”)
Add: Non-operating income VII. 74 270,615.48 2,330,175.84
Less: Non-operating expenses VII. 75 740,701.95 1,031,334.68
IV. Total profits (total losses are
-5,684,302.75 124,346,029.93
indicated by “-”)
Less: Income tax expense VII. 76 2,693,941.42 33,140,213.74
V. Net profits (net losses are indicated
-8,378,244.17 91,205,816.19
by “-”)
(I) Categorized by the continuity of operation
1. Net profits from continuing
operations (net losses are indicated by -8,378,244.17 91,205,816.19
"-")
2. Net profits from discontinued
operations (net losses are indicated by
“-”)
(II) Categorized by the ownership
110 / 234
2020 Semiannual Report
1. Net profits attributable to
shareholders of the Parent Company 14,327,442.96 66,579,574.06
(net losses are indicated by "-")
2. Profits or losses attributable to
minority shareholders (net losses are -22,705,687.13 24,626,242.13
indicated by “-”)
VI. Other comprehensive income, net
1,039,650.57 -434,926.03
of tax
(I) Other comprehensive income
that can be attributable to owners of 1,013,815.20 -432,661.21
the Parent Company, net of tax
1. Other comprehensive income
that cannot be reclassified
subsequently to profit or loss
(1) Changes from remeasurement of
defined benefit plans
(2) Other comprehensive income that
cannot be reclassified to profit or loss
under the equity method
(3) Changes in fair value of
investments in other equity
instruments
(4) Changes in fair value of
enterprises’ own credit risks
2. Other comprehensive income
that will be reclassified to profit or 1,013,815.20 -432,661.21
loss
(1) Other comprehensive income that
will be reclassified to profit or loss -135,706.31
under the equity method
(2) Changes in fair value of other debt
investments
(3) Amount of financial assets
reclassified to other comprehensive
income
(4) Provision for credit impairment of
other debt investments
(5) Reserve for cash flow hedges
(6) Exchange differences on 1,149,521.51
translation of financial statements -432,661.21
denominated in foreign currencies
(7) Others
(II) Other comprehensive income
that can be attributable to minority 25,835.37 -2,264.82
shareholders, net of tax
VII. Total comprehensive income -7,338,593.60 90,770,890.16
(I) Total comprehensive income that
can be attributable to owners of the 15,341,258.16 66,146,912.85
Parent Company
(II) Total comprehensive income
that can be attributable to minority -22,679,851.76 24,623,977.31
shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.03 0.17
(RMB/share)
(II) Diluted earnings per share 0.03 0.17
111 / 234
2020 Semiannual Report
(RMB/share)
For business combination involving entities under common control occurred during the period, net profit
of the acquiree generated before the business combination is nil, and net profit of the acquiree generated
in prior period is nil.
Legal representative: Person in Charge of the Accounting Body: Chief Accountant:
BO Lianming WEI Yanlin ZHAO Ruijin
Income Statement of the Parent Company
Jan. - Jun. 2020
Unit: Yuan Currency: RMB
Item Note Half year of 2020 Half year of 2019
I. Operating income XVII. 4 384,899,378.41 427,684,505.04
Less: Operating costs XVII. 4 256,660,786.97 290,643,668.97
Taxes and levies 1,352,141.01 3,071,754.81
Sales expenses 27,526,291.43 40,844,366.05
Administration expenses 56,310,385.85 39,125,724.07
R&D expenses 51,085,854.54 56,165,426.14
Financial expenses -6,218,121.07 -126,392.93
Including: Interest expense 354,733.03 2,053,982.09
Interest income 6,827,084.77 4,133,521.27
Add: Other income 26,399,900.47 9,867,959.13
Investment income (loss is
XVII. 5 10,824,793.71 -64,542.33
indicated by “-”)
Including: Income from
investments in associates and joint
ventures
Gains from
derecognition of financial assets at
amortized assets (loss is indicated by
“-”)
Gains from net exposure
hedges (loss is indicated by “-”)
Gains from changes in fair
values (loss is indicated by “-”)
Losses of credit impairment
-144,581.15 859,443.66
(loss is indicated by “-”)
Impairment losses of assets
-10,600,208.60 -1,501,552.91
(loss is indicated by “-”)
Gains from disposal of assets
(loss is indicated by “-”)
II. Operating profit (loss is indicated
24,661,944.11 7,121,265.48
by “-”)
Add: Non-operating income 253,319.61 2,325,793.95
Less: Non-operating expenses 350,387.34 839,436.27
III. Total profits (total losses are
24,564,876.38 8,607,623.16
indicated by “-”)
Less: Income tax expense 4,758,965.06 1,257,976.90
IV. Net profits (net losses are indicated
19,805,911.32 7,349,646.26
by “-”)
(I) Net profits from continuing
19,805,911.32 7,349,646.26
operations (net losses are indicated by
112 / 234
2020 Semiannual Report
“-”)
(II) Net profits from discontinued
operations (net losses are indicated by
“-”)
V. Other comprehensive income, net of
tax
(I) Other comprehensive income
that cannot be reclassified
subsequently to profit or loss
1.Changes from remeasurement
of defined benefit plans
2. Other comprehensive income
that cannot be reclassified to profit or
loss under the equity method
3.Changes in fair value of
investments in other equity
instruments
4.Changes in fair value of
enterprises’ own credit risks
(II) Other comprehensive income
that will be reclassified to profit or
loss
1. Other comprehensive income
that will be reclassified to profit or
loss under the equity method
2. Changes in fair value of other
debt investments
3. Amount of financial assets
reclassified to other comprehensive
income
4. Provision for credit impairment
of other debt investments
5. Reserve for cash flow hedges
6. Exchange differences on
translation of financial statements
denominated in foreign currencies
7. Others
VI. Total comprehensive income 19,805,911.32 7,349,646.26
VII. Earnings per share:
(I) Basic earnings per share 0.04 0.02
(RMB/share)
(II) Diluted earnings per share 0.04 0.02
(RMB/share)
Legal representative: Person in Charge of the Accounting Body: Chief Accountant:
BO Lianming WEI Yanlin ZHAO Ruijin
Consolidated Cash Flow Statement
Jan. - Jun. 2020
Unit: Yuan Currency: RMB
113 / 234
2020 Semiannual Report
Item Note Half year of 2020 Half year of 2019
I. Cash Flows from Operating
Activities:
Cash receipts from the sale of
goods and the rendering of 857,080,419.89 958,367,229.40
services
Net increase in customer
deposits and deposits from banks
and other financial institutions
Net increase in loans from the
central bank
Net increase in taking from
banks and other financial
institutions
Cash receipts from premiums
under direct insurance contracts
Net cash receipts from
reinsurance business
Net cash receipts from
policyholders’ deposits and
investment contract liabilities
Cash receipts from interest, fees
and commissions
Net increase in taking from
banks
Net increase in financial assets
sold under repurchase
arrangements
Net cash received from
securities trading agencies
Receipts of tax refunds 4,632,072.61 2,508,672.80
Other cash receipts relating to
VII. 78 81,270,397.72 52,872,028.86
operating activities
Sub-total of cash inflows
942,982,890.22 1,013,747,931.06
from operating activities
Cash payments for goods
572,318,784.38 665,098,139.82
purchased and services received
Net increase in loans and
advances to customers
Net increase in balance with the
central bank and due from banks
and other financial institutions
Cash payments for claims and
policyholders' benefits under
direct insurance contracts
Net increase in placements with
banks and other financial
institutions
Cash payments for interest, fees
and commissions
Cash payments for insurance
policyholder dividends
Cash payments to and on behalf
163,925,755.54 143,289,429.46
of employees
Payments of various types of
43,586,182.30 111,587,382.38
taxes
114 / 234
2020 Semiannual Report
Other cash payments relating to
VII. 78 100,146,106.20 108,316,392.92
operating activities
Sub-total of cash outflows
879,976,828.42 1,028,291,344.58
from operating activities
Net cash flow from
63,006,061.80 -14,543,413.52
operating activities
II. Cash Flows from Investing
Activities:
Cash receipts from disposals
1,075,000,000.00 3,700,000.00
and recovery of investments
Cash receipts from investment
10,824,793.71
income
Net cash receipts from
disposals of fixed assets,
3,600.00 4,467.91
intangible assets and other
long-term assets
Net cash receipts from
disposals of subsidiaries and other
business units
Other cash receipts relating to
investing activities
Sub-total of cash inflows
1,085,828,393.71 3,704,467.91
from investing activities
Cash payments to acquire or
construct fixed assets, intangible 19,930,656.68 22,513,875.95
assets and other long-term assets
Cash payments to acquire
1,158,213,540.00
investments
Net increase in pledged loans
receivables
Net cash payments for
acquisitions of subsidiaries and
other business units
Other cash payments relating to
investing activities
Sub-total of cash outflows
1,178,144,196.68 22,513,875.95
from investing activities
Net cash flows from
-92,315,802.97 -18,809,408.04
investment activities
III. Cash Flows from Financing
Activities:
Cash receipts from capital
contributions
Including: Cash receipts from
capital contributions from
minority shareholders of
subsidiaries
Cash receipts from borrowings 98,922,683.45 256,260,000.00
Other cash receipts relating to
financing activities
Sub-total of cash inflows
98,922,683.45 256,260,000.00
from financing activities
Cash repayments of borrowings 179,644,434.20 156,491,119.70
Cash payments for distribution
of dividends or profits or 34,547,574.58 17,090,008.81
settlement of interest expenses
115 / 234
2020 Semiannual Report
Including: Payments for
distribution of dividends or profits
to minority shareholders of
subsidiaries
Other cash payments relating to
VII. 78 22,587.36 3,570,350.00
financing activities
Sub-total of cash outflows
214,214,596.14 177,151,478.51
from financing activities
Net cash flows from
-115,291,912.69 79,108,521.49
financing activities
IV. Effect of Foreign Exchange
Rate Changes on Cash and Cash 1,108,215.61 -519,590.51
Equivalents
V. Net Increase in Cash and
-143,493,438.25 45,236,109.42
Cash Equivalents
Add: Opening balance of cash
829,789,487.86 472,508,550.40
and cash equivalents
VI. Closing Balance of Cash and
686,296,049.61 517,744,659.82
Cash Equivalents
Legal representative: Person in Charge of the Accounting Body: Chief Accountant:
BO Lianming WEI Yanlin ZHAO Ruijin
Cash Flow Statement of the Parent Company
Jan. - Jun. 2020
Unit: Yuan Currency: RMB
Item Note Half year of 2020 Half year of 2019
I. Cash Flows from Operating
Activities:
Cash receipts from the sale of
goods and the rendering of 351,592,568.58 422,086,255.83
services
Receipts of tax refunds 3,108,523.77
Other cash receipts relating to
147,176,514.17 183,663,872.41
operating activities
Sub-total of cash inflows
501,877,606.52 605,750,128.24
from operating activities
Cash payments for goods
320,604,308.34 286,971,692.80
purchased and services received
Cash payments to and on
98,194,575.75 89,454,762.70
behalf of employees
Payments of various types of
4,579,897.88 43,848,346.80
taxes
Other cash payments relating
87,411,317.15 222,179,859.64
to operating activities
Sub-total of cash outflows
510,790,099.12 642,454,661.94
from operating activities
Net cash flow from operating
-8,912,492.60 -36,704,533.70
activities
II. Cash Flows from Investing
Activities:
116 / 234
2020 Semiannual Report
Cash receipts from disposals
1,075,000,000.00 4,635,457.67
and recovery of investments
Cash receipts from investment
10,824,793.71
income
Net cash receipts from
disposals of fixed assets,
3,600.00
intangible assets and other
long-term assets
Net cash receipts from
disposals of subsidiaries and
other business units
Other cash receipts relating to
investing activities
Sub-total of cash inflows
1,085,828,393.71 4,635,457.67
from investing activities
Cash payments to acquire or
construct fixed assets, intangible 14,697,925.55 18,327,199.02
assets and other long-term assets
Cash payments to acquire
1,161,213,540.00
investments
Net cash payments for
acquisitions of subsidiaries and
other business units
Other cash payments relating
to investing activities
Sub-total of cash outflows
1,175,911,465.55 18,327,199.02
from investing activities
Net cash flows from
-90,083,071.84 -13,691,741.35
investment activities
III. Cash Flows from Financing
Activities:
Cash receipts from capital
contributions
Cash receipts from borrowings 52,241,387.30 132,000,000.00
Other cash receipts relating to
financing activities
Sub-total of cash inflows
52,241,387.30 132,000,000.00
from financing activities
Cash repayments of
10,000,000.00 44,440,000.00
borrowings
Cash payments for distribution
of dividends or profits or 23,000,602.77 2,432,260.06
settlement of interest expenses
Other cash payments relating
22,587.36 3,570,350.00
to financing activities
Sub-total of cash outflows
33,023,190.13 50,442,610.06
from financing activities
Net cash flows from
19,218,197.17 81,557,389.94
financing activities
IV. Effect of Foreign Exchange
Rate Changes on Cash and 295,306.01 -607,553.95
Cash Equivalents
V. Net Increase in Cash and
-79,482,061.26 30,553,560.94
Cash Equivalents
Add: Opening balance of cash
524,648,100.62 295,049,085.02
and cash equivalents
117 / 234
2020 Semiannual Report
VI. Closing Balance of Cash
445,166,039.36 325,602,645.96
and Cash Equivalents
Legal representative: Person in Charge of the Accounting Body: Chief Accountant:
BO Lianming WEI Yanlin ZHAO Ruijin
118 / 234
2020 Semiannual Report
Consolidated Statement of Changes in Owners’ Equity
Jan. - Jun. 2020
Unit: Yuan Currency: RMB
Item Half year of 2020
Equity attributable to owners of the Parent Company
Minority
Paid-in Other equity instruments Less: Other General interests
Special Surplus Retained
capital (or Capital reserve Treasury comprehensive risk Others Sub-total
Preferred Perpetual reserve reserve profits
share capital) Others shares income reserve
shares bonds
I. Closing
balance of the 451,554,411.00 1,207,942,318.37 3,287,063.85 22,800,224.13 288,975,820.29 1,974,559,837.64 149,649,306.18
preceding year
Add: Changes in
accounting 1,278,734.88 1,278,734.88 -646,507.57
policies
Correction
s of prior
period errors
Business
combination
involving
entities under
common control
Others
II. Opening
balance of the 451,554,411.00 1,207,942,318.37 3,287,063.85 22,800,224.13 290,254,555.17 1,975,838,572.52 149,002,798.61
current year
III. Changes
for the year
(decrease is 16,084,702.84 1,013,815.20 -19,539,137.87 -2,440,619.83 -21,188,011.12
indicated by
“-”)
(I) Total
comprehensive 1,013,815.20 14,327,442.96 15,341,258.16 -22,679,851.76
income
(II) Owners’
contributions
16,084,702.84 16,084,702.84 1,491,840.64
and reduction
in capital
1. Ordinary
119 / 234
2020 Semiannual Report
shares
contributed by
owners
2. Capital
contribution
from holders of
other equity
instruments
3. Share-based
payment
16,084,702.84 16,084,702.84 1,491,840.64
recognized in
owners' equity
4. Others
(III) Profit
-33,866,580.83 -33,866,580.83
distribution
1. Transfer to
surplus
reserve
2. Transfer to
general
reserve
3.
Distributions
-33,866,580.83 -33,866,580.83
to owners (or
shareholders)
4. Others
(IV) Transfers
within
owners’
equity
1.
Capitalization
of capital
reserve
2.
Capitalization
of capital
reserve
3. Loss offset
by surplus
reserve
4.Retained
earnings
120 / 234
2020 Semiannual Report
carried
forward from
changes in
defined
benefit plans
5.Retained
earnings
carried
forward from
other
comprehensive
income
6.Others
(V) Special
reserve
1. Transfer to
special
reserve in the
period
2. Amount
utilized in the
period
(VI) Others
IV. Closing
balance of the 451,554,411.00 1,224,027,021.21 4,300,879.05 22,800,224.13 270,715,417.30 1,973,397,952.69 127,814,787.49
current year
Item Half year of 2019
Equity attributable to owners of the Parent Company
Minority
Paid-in capital Other equity instruments Less: Other General Total Owner's E
Special Surplus Retained interests
(or share Capital reserve Treasury comprehensive risk Others Sub-total
Preferred Perpetual reserve reserve profits
capital) Others shares income reserve
shares bonds
I. Closing
balance of the 383,554,411.00 205,995,596.85 1,044,703.00 12,695,712.93 112,623,054.78 715,913,478.56 110,985,548.13 826
preceding year
Add: Changes
in accounting
policies
Correctio
ns of prior
121 / 234
2020 Semiannual Report
period errors
Business
combination
involving
entities under
common
control
Others
II. Opening
balance of the 383,554,411.00 205,995,596.85 1,044,703.00 12,695,712.93 112,623,054.78 715,913,478.56 110,985,548.13 826
current year
III. Changes
for the year
(decrease is -432,661.21 66,579,574.06 66,146,912.85 24,623,977.31 90
indicated by
“-”)
(I) Total
comprehensive -432,661.21 66,579,574.06 66,146,912.85 24,623,977.31 90
income
(II) Owners’
contributions
and reduction
in capital
1. Ordinary
shares
contributed by
owners
2. Capital
contribution
from holders
of other equity
instruments
3. Share-based
payment
recognized in
owners' equity
4. Others
(III) Profit
distribution
1. Transfer to
surplus reserve
2. Transfer to
general
reserve
3.
Distributions
to owners (or
shareholders)
4. Others
122 / 234
2020 Semiannual Report
(IV) Transfers
within owners’
equity
1.
Capitalization
of capital
reserve
2.
Capitalization
of capital
reserve
3. Loss offset
by surplus
reserve
4.Retained
earnings
carried
forward from
changes in
defined benefit
plans
5.Retained
earnings
carried
forward from
other
comprehensive
income
6.Others
(V) Special
reserve
1. Transfer to
special reserve
in the period
2. Amount
utilized in the
period
(VI) Others
IV. Closing
balance of the 383,554,411.00 205,995,596.85 612,041.79 12,695,712.93 179,202,628.84 782,060,391.41 135,609,525.44 917
current year
Legal representative: Person in Charge of the Accounting Body: Chief Accountant:
BO Lianming WEI Yanlin ZHAO Ruijin
123 / 234
2020 Semiannual Report
Statement of Changes in Owners’ Equity of the Parent Company
Jan. - Jun. 2020
Unit: Yuan Currency: RMB
Half year of 2020
Other equity instruments Specia
Less: Other
Item Paid-in capital l Total Owner's
Preferre Perpetua Other Capital reserve Treasur comprehensiv Surplus reserve Retained profits
(or share capital) reserv Equity
d shares l bonds s y shares e income
e
I. Closing
451,554,411.0 1,310,939,867.8 21,522,683.4 211,573,548.4 1,995,590,510.6
balance of the
preceding year 0 2 0 2 4
Add: Changes
in accounting
policies
Correctio
ns of prior
period errors
Others
II. Opening
451,554,411.0 1,310,939,867.8 21,522,683.4 211,573,548.4 1,995,590,510.6
balance of the
current year 0 2 0 2 4
III. Changes
for the year
(decrease is 17,576,543.48 -14,060,669.51 3,515,873.97
indicated by
“-”)
(I) Total
comprehensiv 19,805,911.32 19,805,911.32
e income
(II) Owners’
contributions
17,576,543.48 17,576,543.48
and reduction
in capital
1. Ordinary
shares
contributed by
owners
2. Capital
contribution
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2020 Semiannual Report
from holders
of other equity
instruments
3. Share-based
payment
17,576,543.48 17,576,543.48
recognized in
owners' equity
4. Others
(III) Profit -33,866,580.8
distribution -33,866,580.83
3
1. Transfer to
surplus
reserve
2.
Distributions -33,866,580.8
-33,866,580.83
to owners (or 3
shareholders)
3. Others
(IV) Transfers
within
owners’
equity
1.
Capitalization
of capital
reserve
2.
Capitalization
of capital
reserve
3. Loss offset
by surplus
reserve
4.Retained
earnings
carried
forward from
changes in
defined
benefit plans
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2020 Semiannual Report
5.Retained
earnings
carried
forward from
other
comprehensiv
e income
6.Others
(V) Special
reserve
1. Transfer to
special reserve
in the period
2. Amount
utilized in the
period
(VI) Others
IV. Closing 451,554,411.00 1,328,516,411.30 21,522,683.40 197,512,878.91 1,999,106,384.61
balance of the
current year
Half year of 2019
Other equity instruments Less: Other
Item Paid-in capital Special Total Owner's
Preferred Perpetual Capital reserve Treasury comprehensive Surplus reserve Retained profits
(or share capital) Others reserve Equity
shares bonds shares income
I. Closing
balance of the 383,554,411.00 308,318,059.21 11,418,172.20 120,632,947.59 823,923,590.00
preceding year
Add: Changes
in accounting
policies
Corrections
of prior period
errors
Others
II. Opening
balance of the 383,554,411.00 308,318,059.21 11,418,172.20 120,632,947.59 823,923,590.00
current year
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2020 Semiannual Report
III. Changes for
the year
(decrease is 7,349,646.26 7,349,646.26
indicated by
“-”)
(I) Total
comprehensive 7,349,646.26 7,349,646.26
income
(II) Owners’
contributions
and reduction in
capital
1. Ordinary
shares
contributed by
owners
2. Capital
contribution
from holders of
other equity
instruments
3. Share-based
payment
recognized in
owners' equity
4. Others
(III) Profit
distribution
1. Transfer to
surplus reserve
2. Distributions
to owners (or
shareholders)
3. Others
(IV) Transfers
within owners’
equity
1. Capitalization
of capital
reserve
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2020 Semiannual Report
2. Capitalization
of capital
reserve
3. Loss offset by
surplus reserve
4.Retained
earnings carried
forward from
changes in
defined benefit
plans
5.Retained
earnings carried
forward from
other
comprehensive
income
6.Others
(V) Special
reserve
1. Transfer to
special reserve
in the period
2. Amount
utilized in the
period
(VI) Others
IV. Closing 383,554,411.00 308,318,059.21 11,418,172.20 127,982,593.85 831,273,236.26
balance of the
current year
Legal representative: Person in Charge of the Accounting Body: Chief Accountant:
BO Lianming WEI Yanlin ZHAO Ruijin
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2020 Semiannual Report
III. Company profile
1. Profile
√ Applicable□ N/A
Appotronics Corporation Limited (hereinafter referred to as “Company” or “the Company”), formally
named as Appotronics Corporation Ltd.(hereinafter referred to as “Appotronics Ltd.”), was jointly
invested and established by LI Yi and XU Yanzheng and registered in Nanshan Branch of Market
Supervision and Regulation Bureau of Shenzhen Municipality on October 24, 2006 with the business
license numbered in 4403011245637. Upon establishment, the registered capital of Appotronics Inc. was
RMB 100,000. On May 31, 2018, the benchmark date, Appotronics Inc was changed into a company
limited by shares as a whole. On July 20, 2018, the Company completed the registration in Nanshan
Branch of Market Supervision and Regulation Bureau of Shenzhen Municipality and headquartered in
Shenzhen, Guangdong Province. The Company now holds the business license with the unified social
credit code of 91440300795413991N and has registered capital amounted to RMB 451,554,411.00. The
Company has 451,554,411 shares in total (with the par value of RMB 1 per share). The Company’s
shares were listed for trading on Shanghai Stock Exchange on July 22, 2019.
The Company can be classified into the computer, communication and other electronic equipment
manufacturing industry. It mainly engages in research and development, production, sales and services
of laser display core devices and complete equipment, and can provide customers with technical
research and development services and customized products.
This financial statements have been approved by the Company’s twenty-fifth session of the first board of
directors on August 25, 2020 for public disclosure.
2. Scopeofconsolidatedfinancialstatements
√ Applicable□ N/A
The Company has included 20 subsidiaries into the consolidated financial statements for the current
period, including Appotronics Timewaying (Beijing) Technology Co., Ltd., Shenzhen Appotronics
Software Technology Co., Ltd., Shenzhen City Appotronics Xiaoming Technology Co., Ltd., Beijing
Orient Appotronics Technology Co., Ltd., Fengmi (Beijing) Technology Co., Ltd., CINEAPPO Laser
Cinema Technology (Beijing) Co., Ltd., Shenzhen Appotronics Laser Display Technology Co., Ltd.,
Shenzhen Appotronics Laser Technology Co., Ltd., Qingda Appotronics (Xiamen) Technology Co., Ltd.,
Shenzhen Appotronics Home Line Technology Co., Ltd., Appotronics Hong Kong Limited, Appotronics
USA, Inc., Fabulus Technology Hong Kong Limited, JoveAI Limited, JoveAI Innovation, Inc.,
FORMOVIE TECHNOLOGY INC, WEMAX LLC, JOVEAI ASIA COMPANY LIMITED, Shenzhen
Appotronics Display Device Co., Ltd. and other subsidiaries. Refer to descriptions in IX of Section XI
for details.
IV. Basis of preparation of financial statements
1. Basisofpreparation
The Company’s financial statements are prepared on a going-concern basis.
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2. Goingconcern
√ Applicable□ N/A
The Company has detected no events or circumstances that may cast significant doubt upon its ability to
continue as a going concern within 12 months from the reporting period.
V. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates:
√ Applicable□ N/A
The Company establishes the specific accounting policies and makes the specific accounting estimates
with respect to the impairment of financial instruments, depreciation of fixed assets, amortization of
intangible assets, recognition of revenues and other transactions and events according to the actual
production and operation characteristics of the Company.
1. StatementofcompliancewiththeAccountingStandardsforBusinessEnterprises
The financial statements prepared by the Company conform to the requirements of the Accounting
Standards for Business Enterprises and truly and completely reflect the Company’s financial position,
operating results, changes in shareholders' equity, cash flows and other related information.
2. Accountingperiod
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operatingcycle
√ Applicable□ N/A
The Company has a relatively short operating cycle, and determines the liquidity of assets and liabilities
on the basis of 12 months.
4. Functionalcurrency
The Company adopts RMB as its functional currency.
5. The accounting treatment of business combinations involving entities under common control
andnotinvolvingentitiesundercommoncontrol
√ Applicable□ N/A
1. Accounting treatment of business combinations involving entities under common control
Assets and liabilities acquired from a business combination by the Company are measured at the
carrying amounts of the assets and liabilities of the acquiree in the consolidated financial statements of
the ultimate controller at the date of combination. The difference between the carrying amount of the
owners’ equity of the acquiree as stated in the consolidated financial statements of the ultimate
controller and the carrying amount of the total consideration paid or total par value of the shares issued
in connection with the combination is treated as an adjustment to the capital reserve. In case the capital
reserve is not sufficient to absorb the difference, the remaining balance is adjusted against the retained
earnings.
2. Accounting treatment of business combinations not involving entities under common control
Where the cost of combination exceeds the Company’s interest in the fair value of the acquiree’s
identifiable net assets, the difference is recognized as goodwill. Where the cost of combination is less
than the Company’s interest in the fair value of the acquiree’s identifiable net assets, the Company
firstly reassesses the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities
and the measurement of the cost of combination. If after that reassessment, the cost of combination is
still less than the Company’s interest in the fair value of the acquiree’s identifiable net assets, the
acquirer recognizes the remaining difference immediately in profit or loss for the current period.
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6. Methodofpreparationofconsolidatedfinancialstatements
√ Applicable□ N/A
The parent company includes all of its controlled subsidiaries in its consolidated financial
statements. The consolidated financial statements are prepared by the parent company in accordance
with the Accounting Standards for Business Enterprises No. 33 -- Consolidated Financial Statements, on
the basis of the respective financial statements of the parent company and its subsidiaries, by reference
to other relevant data.
7. Classificationofjointarrangementsandaccountingtreatmentofjointoperations
√ Applicable□ N/A
1. Joint arrangements are classified into joint operations and joint ventures.
2. When the Company is a party to a joint operation, the Company recognizes the following items
relating to its interest in the joint operation:
(1) the assets individually held by the Company, and the Company’s share of the assets held jointly;
(2) the liabilities incurred individually by the Company, and the Company’s share of the liabilities
incurred jointly;
(3) the Company’s revenue from the sale of its share of output of the joint operation;
(4) the Company’s share of revenue from the sale of assets by the joint operation; and
(5) the expenses incurred individually by the Company, and the Company’s share of the expenses
incurred jointly.
8. Recognitionofcashandcashequivalents
Cash represented in the statement of cash flows comprises cash on hand and deposits that can be readily
withdrawn on demand. Cash represented in the statement of cash flows comprises cash on hand and
deposits that can be readily withdrawn on demand (generally, within three months from the date of
acquisition). Cash equivalents are the Group's short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
9. Translationoftransactionsandfinancialstatementsdenominatedinforeigncurrencies
√ Applicable□ N/A
1. Transactions denominated in foreign currencies
A foreign currency transaction is recorded in RMB, on initial recognition, by applying the spot
exchange rate on the date of the transaction. At the balance sheet date, foreign currency monetary items
are translated into RMB using the spot exchange rates at the balance sheet date. Exchange differences
arising from such translations are recognized in profit or loss for the current period, except for those
attributable to foreign currency borrowings that have been taken out specifically for the acquisition or
construction of qualifying assets and accrued interest. Non-monetary items denominated in foreign
currencies that are measured at historical cost are translated using the foreign exchange rates ruling at
the transaction dates, without adjusting the amounts in RMB. Non-monetary items denominated in
foreign currencies that are measured at fair value are translated using the foreign exchange rates
prevailing at the dates when the fair value was determined, with exchange differences arising from such
translations recognized in profit or loss for the current period or other comprehensive income.
2. Translation of financial statements denominated in foreign currencies
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Asset and liability items on the balance sheet are translated at the spot exchange rate prevailing at
the balance sheet date; shareholders' equity items other than "retained profits” are translated at the spot
exchange rates at the dates on which such items arose; income and expense items in the income
statement are translated at the exchange rates that approximate the actual spot exchange rates on the
dates of the transactions. Exchange differences arising from such translations are recognized in other
comprehensive income.
10. Financialinstruments
√ Applicable□ N/A
1. Classification of financial assets and financial liabilities
On initial recognition, the Company’s financial assets are classified into three categories, including
(1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive
income; and (3) financial assets at fair value through profit or loss for the current period.
Upon initial recognition, the Company’s financial liabilities are classified into four categories,
including (1) financial liabilities at fair value through profit or loss for the current period; (2) financial
liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or
continuing involvement in the financial assets transferred; (3) financial guarantee contracts not falling
under Clauses (1) and (2), and loan commitments not falling under Clause (1) and below market interest
rate; and (4) financial liabilities at amortized cost.
2. Recognition, measurement and derecognition of financial assets and financial liabilities
(1) Recognition and initial measurement of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, a financial asset or liability
is recognized. Financial assets and liabilities are initially measured at fair value. Transaction costs
relating to financial assets or liabilities at fair value through profit or loss are directly recognized in
profit or loss for the current period. Transaction costs relating to other kinds of financial assets or
liabilities are included in their initially recognized amount. However, the accounts receivable, if do not
contain any significant financing component or are recognized by the Company without taking into
consideration the financing components under the contracts with a term of less than one year upon initial
recognition, are initially measured at transaction price.
(2) Subsequent measurement of financial assets
1) Financial assets at amortized cost
Financial assets at amortized cost are subsequently measured at amortized cost using the effective
interest method. Gains or losses arising from financial assets at amortized cost that do not belong to any
hedging relationship are recognized in profit or loss for the current period upon derecognition,
reclassification, amortization using the effective interest method or recognition of impairment.
2) Investments in debt instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequently
measured at fair value. Interest, impairment losses or gains and exchange gains or losses calculated
using the effective interest method are recognized in profit or loss for the current period, and other gains
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or losses are recognized in other comprehensive income. Upon derecognition, the aggregate gains or
losses previously recognized in other comprehensive income are transferred to profit or loss for the
current period.
3) Investments in equity instruments at fair value through other comprehensive income
Investments in equity instruments at fair value through other comprehensive income are
subsequently measured at fair value. Dividends received (other than those received as recovery of
investment cost) are recognized in profit or loss for the current period, and other gains or losses are
recognized in other comprehensive income. Upon derecognition, the accumulated gains or losses
previously recognized in other comprehensive income are transferred to retained earnings.
4) Financial assets at fair value through profit or loss for the current period
Financial assets at fair value through profit or loss for the current period are subsequently measured
at fair value, with gains or losses arising therefrom, including interest and dividend income, recognized
in profit or loss for the current period, except the financial assets belonging to any hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss for the current period
Financial liabilities at fair value through profit or loss for the current period include financial
liabilities held for trading (including derivatives classified as financial liabilities), and financial liabilities
directly designated as at fair value through profit or loss for the current period. Such financial liabilities
are subsequently measured at fair value. Changes in the fair value of financial liabilities designated as at
fair value through profit or loss for the period arising out of changes in the Company’s own credit risk
are recognized in other comprehensive income, unless such treatment will result in or increase any
accounting mismatch in profit or loss. Other gains or losses arising from such financial liabilities,
including interest expenses and changes in fair value not arising out of changes in the Company’s own
credit risk, are recognized in profit or loss for the current period, except the financial liabilities
belonging to any hedging relationship. Upon derecognition, the accumulated gains or losses previously
recognized in other comprehensive income are transferred to retained earnings.
2) Financial liabilities arising as a result of the transfer of financial assets not meeting the criteria
for derecognition or continuing involvement in the financial assets transferred
Such financial liabilities are measured in accordance with the Accounting Standards for Business
Enterprises No. 23 -- Transfer of Financial Assets.
3) Financial guarantee contracts not falling under Clauses 1) and 2), and loan commitments not
falling under Clause 1) and below market interest rate
Such financial liabilities are subsequently measured at the higher of ① provision for impairment
losses determined according to the policy for impairment of financial instruments; and ② balance of the
initially recognized amount after deduction of the accumulated amortization determined in accordance
with the relevant policy.
4) Financial liabilities at amortized cost
Financial liabilities at amortized cost are subsequently measured at amortized cost using the
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effective interest method. Gains or losses on financial liabilities at amortized cost that do not belong to
any hedging relationship are recognized in profit or loss for the current period upon derecognition or
amortization using the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
① the contractual right to receive cash flows from the financial assets has expired; or
② the financial assets have been transferred and such transfer meets the criteria for derecognition
of financial assets as set forth in the Accounting Standards for Business Enterprises No. 23 -- Transfer of
Financial Assets.
2) A financial liability (or part thereof) is derecognized when all or part of the outstanding
obligations thereon have been discharged.
3. Recognition and measurement of financial assets transferred
When a financial asset of the Company is transferred, if substantially all the risks and rewards
incidental to the ownership of the financial asset have been transferred, the financial asset is
derecognized, and the rights and obligations incurred or retained in such transfer are separately
recognized as assets or liabilities (as the case may be); if substantially all the risks and rewards
incidental to the ownership of the financial asset have been retained, the financial asset transferred
continues to be recognized. If the Company neither transferred nor retained a substantial portion of all
risks and rewards incidental to the ownership of the financial asset, then: (1) if the Company does not
retain control over the financial asset, the financial asset is derecognized, and the rights and obligations
incurred or retained in such transfer are separately recognized as assets or liabilities (as the case may be);
and (2) if the Company retains control over the financial asset, the financial asset continues to be
recognized to the extent of the Company’s continuing involvement in the financial asset transferred, and
a corresponding liability is recognized.
If an entire transfer of a financial asset meets the criteria for derecognition, the difference between
(1) the carrying amount of the financial asset transferred at the date of derecognition; and (2) the sum of
the consideration received from the transfer and the portion of the accumulated amount of changes in
fair value directly recorded as other comprehensive income originally that corresponds to the part
derecognized (where the financial asset transferred is an investment in debt instruments at fair value
through other comprehensive income) is recognized in profit or loss for the current period. If part of a
financial asset is transferred and the part transferred entirely meets the criteria for derecognition, the
total carrying amount of the financial asset immediately prior to the transfer is allocated between the part
derecognized and the part not derecognized in proportion to their relative fair value at the date of transfer,
and the difference between (1) the carrying amount of the part derecognized; and (2) the sum of the
consideration received from the transfer of the part derecognized and the portion of the accumulated
amount of changes in fair value directly recorded as other comprehensive income originally that
corresponds to the part derecognized (where the financial asset transferred is an investment in debt
instruments at fair value through other comprehensive income) is recognized in profit or loss for the
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current period.
4. Determination of fair value of financial assets and financial liabilities
The Company adopts the valuation techniques applicable to the current situations and with
sufficient data available and support of other information, to determine the fair value of financial assets
and financial liabilities. The Company classifies the inputs used by the valuation techniques in the
following levels and uses them in turn:
(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset or
liability available at the date of measurement;
(2) Level 2 inputs: inputs other than inputs included within Level 1 that are observable directly or
indirectly. This category includes quoted prices for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in inactive markets, observable inputs other than quoted
prices (such as interest rate and yield curves observable during regular intervals of quotation), and inputs
validated by the market;
(3) Level 3 inputs: inputs that are unobservable. This category includes interest rate or stock
volatility that cannot be directly observed or validated by observable market data, future cash flows from
retirement obligation incurred in business combinations, and financial forecasts made using own data.
5. Impairment of financial instruments
(1) Measurement and accounting treatment of impairment of financial instruments
The Company determines the impairment and assesses provision for impairment losses of financial
assets at amortized cost, investments in debt instruments at fair value through other comprehensive
income, lease receivable, loan commitments other than financial liabilities designated at fair value
through profit or loss for the current period, and financial guarantee contracts other than financial
liabilities designated at fair value through profit or loss for the current period and financial liabilities
arising as a result of the transfer of financial assets not meeting the criteria for derecognition or
continuing involvement in the financial assets transferred, on the basis of expected credit losses.
Expected credit loss is the weighted average of credit losses on financial instruments taking into
account the possibility of default. Credit loss is the difference between all contractual cash flows
receivable under the contract and estimated future cash flows discounted at the original effective interest
rate, i.e. the present value of all cash shortage, wherein the Company’s purchased or originated financial
assets that have become credit impaired are discounted at their credit-adjusted effective interest rate.
With respect to purchased or originated financial assets that have become credit impaired, at the
balance sheet date, the Company recognizes a loss allowance equal to the accumulated amount of
changes in lifetime expected credit losses since initial recognition.
With respect to accounts receivable that do not contain any significant financing component or are
recognized by the Company without taking into consideration the financing components under the
contracts with a term of less than one year, the Company uses the simple measurement method and
recognizes a loss allowance equal to the lifetime expected credit loss.
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With respect to financial assets not using the measurement methods stated above, at each balance
sheet date, the Company assesses whether the credit risk has increased significantly since initial
recognition, and recognizes a loss allowance equal to the lifetime expected credit loss if the credit risk
has increased significantly since initial recognition, or to the expected credit losses within the next 12
months if the credit risk has not increased significantly since initial recognition.
The Company uses reasonable and supportable information, including forward-looking information,
and compares the possibility of default at the balance sheet date with the possibility of default upon
initial recognition, to determine whether the credit risk of the financial instruments has increased
significantly since initial recognition.
At the balance sheet date, if the Company determines that a financial instrument only has low credit
risk, the Company assumes that its credit risk has not increased significantly since initial recognition.
The Company assesses expected credit risk and measures expected credit losses of financial
instruments individually or collectively. When assessing the financial instruments collectively, the
Company includes the financial instruments in different groups according to their common risk
characteristics.
At each balance sheet date, the Company re-assesses the expected credit losses, with the amount of
increase in or reversal of loss allowance recognized in profit or loss for the current period as impairment
losses or gains. With respect to a financial asset at amortized cost, its carrying amount recorded in the
balance sheet is written off against the loss allowance. With respect to an investment in debt instruments
at fair value through other comprehensive income, the Company recognizes the loss allowance in other
comprehensive income, without reducing its carrying amount.
(2) Financial instruments for which expected credit risk is assessed and expected credit losses are
measured collectively
Item Basis for determining a group Method for measuring
expected credit losses
Other receivables - group of By reference to historic credit
deposit and security receivable loss experience, and taking
Nature of receivables into account the current
Other receivables- group of situations and prediction of
withholding receivable future economic conditions,
Other receivables - group of Receivables from related calculate the expected credit
receivables from related parties parties in the scope of losses according to the default
in the scope of consolidation consolidation risk exposure and 12-month or
Other receivables - grouping rate of lifetime expected credit
Aging
by aging loss.
(3) Accounts receivable for which expected credit losses are measured collectively
1) Groups and method for measuring expected credit losses
Basis for determining a group Method for measuring expected
Item
credit losses
Bank acceptance bills receivable By reference to historic credit
Commercial acceptance bills Type of notes loss experience, and taking into
receivable account the current situations and
Accounts receivable - group of Receivables from related parties prediction of future economic
receivables from related parties in the scope of consolidation conditions, calculate the
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2020 Semiannual Report
in the scope of consolidation expected credit losses according
to the default risk exposure and
rate of lifetime expected credit
loss.
By reference to historic credit
loss experience, and taking into
account the current situations and
prediction of future economic
Accounts receivable - grouping
Aging conditions, prepare a comparison
by aging table of the aging of accounts
receivable and rate of lifetime
expected credit loss, and
calculate the expected credit
losses.
2) Accounts receivable - comparison table of the age of accounts receivable and rate of lifetime
expected credit loss
Accounts receivable
Aging Rate of expected credit loss for accounts
receivable (%)
Within 1 year (including, the same below) 5.00
1-2 years 25.00
2-3 years 50.00
Over 3 years 100.00
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented in the balance sheet separately, without
offsetting each other. However, the Company may represent the financial assets and financial liabilities
on a net basis in the balance sheet only if: (1) the Company has a legal right that is currently enforceable
to set off the recognized financial assets and financial liabilities, and (2) the Company intends either to
settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously.
With respect to the transfer of financial assets not meeting the criteria for derecognition, the
Company does not offset the financial assets transferred against the relevant liabilities.
11. Notesreceivable
Methodforrecognitionofexpectedcreditlossesofnotesreceivableandrelevantaccounting
treatments
√ Applicable□ N/A
The Company's method for recognition of expected credit losses of notes receivable and relevant
accounting treatments are disclosed in V10 of Section X in details.
12. Accountsreceivable
Method for recognition of expected credit losses of accounts receivable and relevant
accountingtreatments
√ Applicable□ N/A
The Company's method for recognition of expected credit losses of accounts receivable and relevant
accounting treatments are disclosed in V.10 of Section X in details.
13. Receivables financing
√ Applicable□ N/A
The Company's policies on receivables financing are disclosed in V10 of Section X in details.
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14. Otherreceivables
Method for recognition of expected credit losses of other receivables and relevant
accountingtreatments
√ Applicable□ N/A
The Company's method for recognition of expected credit losses of other receivables and relevant
accounting treatments are disclosed in V10 of Section X in details.
15. Inventories
√ Applicable□ N/A
1. Categories of inventories
Inventories mainly include finished goods or commodities held for sale in the ordinary course of
businesses, work in progress in the process of production or materials and supplies consumed in the
process of production or rendering service.
2. Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average
method.
3. Basis for determining net realizable value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If
the net realisable value is below the cost of inventories, a provision for decline in value of inventories is
made. For inventories directly used for sale, the net realizable value is determined as the estimated
selling price in the ordinary course of business less the estimated costs necessary to make the sale and
relevant taxes. For inventories required for processing, the net realizable value is determined as the
estimated selling price of finished goods in the ordinary course of business less the estimated costs of
completion, and the estimated costs necessary to make the sale and relevant taxes. As at the balance
sheet date, if in the same item of inventories, some are agreed with contractual prices while the others
are not, the net realizable value for such inventories is determined separately, and compared with the
costs of the two parts of inventories distinctively, as to determine the provisions or reversal of provisions
for decline in value of inventories separately.
4. Inventory count system
The perpetual inventory system is maintained for stock system.
5. Amortization method for low cost and short-lived consumable items and packaging materials
(1) Low cost and short-lived consumable items
Low cost and short-lived consumable items are amortized using the immediate write-off method.
(2) Packaging materials
Low cost and short-lived consumable items are amortized using the immediate write-off method.
16. Contractassets
(1).Recognitionmethodandcriteriaofcontractassets
√ Applicable□ N/A
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2020 Semiannual Report
Contract assets refer to the rights of the Company for collecting the considerations for goods or
services that have been transferred to customers, which rights depend on factors other than the lapse of
time.
(2).Method for recognition of expected credit losses of contract assets and relevant
accountingtreatments
√ Applicable□ N/A
The Company adopted the simplified model of expected credit losses for contract assets, that is, the
loss provision is made according to the amount of expected credit losses during the entire lifetime.
The Company considered all reasonable and supportable information, including forward-looking
information, and estimated the expected credit losses of contract assets on the individual or group basis.
17. Held‐for‐saleassets
√ Applicable□ N/A
1. Categories of non-current assets or disposal group classified as held-for-sale
Non-current assets or disposal groups classified as held for sale are required to satisfy the following
conditions: (1) the assets or disposal groups are available for immediate sale in its present condition
subject only to terms that are usual and customary for sales of such asset or disposal group; (2) the sale
is highly probable, i.e. the Company has made a resolution about selling plan and obtained a confirmed
purchase commitment and the sale is expected to be completed within one year.
Non-current assets or disposal groups acquired by the Company for resale only are classified as
held for sale at the acquisition date if the assets or disposal groups can satisfy the condition that“ the sale
is expected to be completed within one year” at the acquisition date and are highly probable to meet
other conditions for being classified as held for sale in a short term (within 3 months in general).
Despite transactions between unrelated parties not completed within one year, the Company
continues to classify as held for sale the non-current assets or disposal groups that the Company still
undertakes to sell if the failure in completion is due to one of the following reasons beyond the
Company's control: (1) purchasers or other parties set conditions unexpectedly, which has led to a sale
deferral, but the Company has taken measures promptly in response to such conditions and expects to
solve the delay problem within one year from date when conditions leading to the sale deferral are set; (2)
there are rare circumstances occurring, as a result of which non-current assets or disposal groups
classified as held for sale fail to be sold, but the Company has taken necessary measures in the initial
year to address these new circumstances to enable the non-current assets or disposal groups to satisfy
classification criteria of held-for-sale category.
2. Measurement of non-current assets or disposal groups classified as held for sale
(1) Initial and subsequent measurement
When the Company measures the non-current assets or disposal groups classified as held for sale
upon initial recognition or re-measures them at the balance sheet date, if their carrying amount is higher
than the net amount of their fair value less costs to sell, the carrying amount should be reduced to the net
amount of fair value less costs to sell, and such reduction is recognized in impairment loss of assets and
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included in profit or loss for the current period with a provision for impairment loss of held-for-sale
assets made.
Non-current assets or disposal groups classified as held for sale at the acquisition date are measured
at the lower of their initial amount measured at the assumption of not being classified as held for sale
and the net amount of fair value less costs to sell. Except non-current assets or disposal groups acquired
through business combination, the balance of non-current assets or disposal groups incurred by
recognizing the net amount of fair value less costs to sell as the initial measurement amount is included
in profit or loss for the current period.
Impairment losses recognized in disposal groups classified as held for sale are firstly offset against
the carrying amount of goodwill in the disposal groups and then offset against the carrying amount of
each non-current asset in proportion to their shares in the disposal groups.
When the non-current assets held for sale or in the disposal groups make no provision of
depreciation or amortization, the interests incurred by the liabilities and other expenses in the disposal
groups held for sale shall continue to be recognized.
(2) Accounting treatment for reversal of impairment loss of assets
When there is an increase in the net amount of fair value of non-current assets held for sale less
costs to sell at the balance sheet date subsequently, the original deduction should be reversed in
impairment loss of assets recognized after the classification of held-for-sale category, and the reverse
amount is included in profit or loss for the current period. No reversion is made for the impairment loss
of assets recognized before the classification of held-for-sale category.
When there is increase in the net amount of fair value of disposal groups held for sale less costs to
sell at the balance sheet date subsequently, the original deduction should be reversed in impairment loss
of non-current assets recognized after the classification of held-for-sale category, and the reverse amount
is include in profit or loss for the period. No reversion is made for the carrying amount of goodwill that
has been offset and the impairment loss of non-current assets recognized before the classification of
held-for-sale category.
The reversed amount of impairment loss of assets recognized in disposal groups held for sale is
added to the carrying amount of each non-current asset other than goodwill in proportion to their shares
in the disposal groups.
(3) Accounting treatment for discontinued classification of held for sale and derecognition
When a non-current asset or disposal group ceases to be classified as held for sale since it no longer
meets the criteria for classification of held-for-sale category, or when a non-current asset is removed
from a disposal group classified as held for sale, the non-current asset or disposal group is measured at
the lower of: 1) the carrying amount recognized before classification of held-for-sale category, subject to
the amount adjusted according to depreciation, amortization or impairment that would have been
recognized if it had not been classified as held for sale; and 2) the recoverable amount.
Gains or losses from derecognized non-current assets or disposal groups classified as held for sale
that have not been recognized are included in profit or loss for the current period.
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18. Debtinvestments
Methodforrecognitionofexpectedcreditlossesofdebtinvestmentsandrelevantaccounting
treatments
□ Applicable√ N/A
19. Otherdebtinvestments
Method for recognition of expected credit losses of other debt investments and relevant
accountingtreatments
□ Applicable√ N/A
20. Long‐termreceivables
Method for recognition of expected credit losses of long‐term receivables and relevant
accountingtreatments
□ Applicable√ N/A
21. Long‐termequityinvestments
√ Applicable□ N/A
1. Judgments on joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities of such arrangement require unanimous consent of the
parties sharing control. Significant influence is the power to participate in the financial and operating
policy making of an entity, but does not control or jointly control over those policies.
2. Determination of investment cost
(1) In case of an equity investment acquired through a business combination involving entities
under common control, if the acquirer pays consideration for the business combination by cash, transfer
of non-monetary assets, assumption of liabilities or issuance of equity securities, the initial investment
cost of the long-term equity investment is the Company’s share of the carrying amount of the
owners’ equity of the acquiree in the consolidated financial statements of the ultimate controller at the
date of combination. The difference between: (i) the initial investment cost of the long-term equity
investment; and (ii) the carrying amount of the consideration paid for the combination or the total par
value of the shares issued is treated as an adjustment to the capital reserve. In case the capital reserve is
not sufficient to absorb the difference, the remaining balance is adjusted against the retained earnings.
For a long-term equity investment acquired through business combination involving
enterprises under common control that is achieved through multiple transactions by steps, the
Company shall judge whether such transactions constitute a package deal. If such transactions
constitute a package deal, the Company accounts for such transactions as one transaction to
acquire control. If such transactions do not constitute a package deal, the initial investment cost
is the Company’s share of the carrying amount of the owners’ equity of the acquiree in the
consolidated financial statements of the ultimate controller at the date of combination. The
difference between: (i) the initial investment cost of the long-term equity investment at the date
of combination; and (ii) the sum of the carrying amount of long-term equity investment before
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the combination and the carrying amount of the consideration paid for acquisition of the
additional shares at the date of combination is adjusted against the capital reserve.In case the
capital reserve is not sufficient to absorb the difference, the remaining balance is adjusted
against the retained earnings.
(2) In case of an equity investment acquired through a business combination not involving entities
under common control, the initial investment cost is the fair value of the carrying amount of the
consideration paid for the combination at the date of acquisition.
For a long-term equity investment acquired through a business combination not involving entities
under common control and achieved through multiple transactions by steps, the accounting treatment
thereof in the separate financial statements is different from that in the consolidated financial statements
as stated below:
1) In the separate financial statements, the sum of the carrying amount of the equity investment
originally held in the acquiree and the additional investment cost incurred is recorded as the initial
investment cost of the equity investment changed into the cost method.
2) In the consolidated financial statements, it is required to judge whether such transactions
constitute a package deal. If such transactions constitute a package deal, the Company accounts for such
transactions as one transaction to acquire control. If such transactions do not constitute a package deal,
the Company re-measures the fair value of the equity held in the acquiree prior to the date of acquisition,
and records the difference between the fair value and the carrying amount as investment income for the
current period; if the equity held in the acquiree prior to the date of acquisition involves other
comprehensive income under equity method, such other comprehensive income is transferred to the
income of the period in which the date of acquisition falls, except for other comprehensive income
arising from re-measurement of changes in net liabilities or net assets of defined benefit plans.
(3) In the event of no business combination: (3) The initial investment cost is the purchase price
actually paid if it is acquired by cash, or the fair value of the equity securities issued if it is acquired
through issuance of equity securities, or determined in accordance with the Accounting Standards for
Business Enterprises No. 12 -- Debt Restructuring if it is acquired through debt restructuring, or
determined in accordance with the Accounting Standards for Business Enterprises No. 7 -- Exchange of
Non-monetary Assets if it is acquired through exchange of non-monetary assets.
3. Subsequent measurement and recognition of profit or loss
Long-term equity investments in investees are measured using the cost method. Long-term equity
investments in associates and joint ventures are measured using the equity method.
4. Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary
(1) Separate financial statements
The difference between the carrying amount of the equity disposed of and the proceeds of disposal
actually received is recognized in profit or loss for the current period. If the remaining equity empowers
the Company to exercise significant influence or joint control over the investee, the remaining equity is
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accounted for using the equity method; if the remaining equity does not empower the Company to
exercise control, joint control or significant influence over the investee, the remaining equity is
accounted for in accordance with the Accounting Standards for Business Enterprises No. 22 --
Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statements
1) Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary which does not constitute a package deal
Prior to the loss of control, the difference between the proceeds from disposal and the share owned
by the Company in the net assets of the subsidiary in relation to the long-term equity investment
disposed of that is calculated continuously from the date of acquisition or combination is adjusted
against the capital reserve (capital premium). In case the capital premium is not sufficient to absorb the
difference, the remaining balance is adjusted against the retained earnings.
When losing control over a subsidiary, the remaining equity is re-measured at its fair value at the
date of loss of control. The sum of the consideration received from the disposal of the equity and the fair
value of the remaining equity, net of the share owned by the Company in the net assets of the subsidiary
in relation to the long-term equity investment disposed of as calculated continuously from the date of
acquisition or combination according to the previous shareholding ratio, is recognized in the investment
income for the period in which the control is lost, and the goodwill is reduced accordingly. Other
comprehensive income relating to the equity investment in the subsidiary is transferred to the investment
income for the period in which the control is lost.
2) Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary which constitutes a package deal
The Company accounts for such transactions as one transaction to dispose of and lose its control
over the subsidiary. However, the difference between the proceeds from each disposal before loss of
control and the share owned by the Company in the net assets of the subsidiary in relation to the
investment disposed of is recognized in other comprehensive income in the consolidated financial
statements, which is wholly transferred to the profit or loss in the period in which the control is lost.
22. Investmentproperties
N/A
23. Fixedassets
(1).Criteriaforrecognition
√ Applicable□ N/A
Fixed assets are tangible assets held for production of goods, rendering of service, lease or
operation and management with a useful life of more than one accounting year. A fixed asset is
recognized if the economic benefits relating to it are very likely to flow to the Company and its cost can
be reliably measured.
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(2).Methodofdepreciation
√ Applicable□ N/A
Annual
Method of Depreciation Residual value rate
Category depreciation rate
depreciation period(years) (%)
(%)
Machinery and Straight line 5 5.00% 19.00%
equipment method
Transportation Straight line 5 5.00% 19.00%
equipment method
Electronic Straight line 3-5 5.00% 19.00%-31.67%
equipment and method
others
Operating leased Straight line 3、7 5.00% 31.67%、13.57%
equipment method
(3).Identification basis, valuation method and depreciation method for fixed assets
acquired under finance leases
□ Applicable√ N/A
24. Constructioninprogress
√ Applicable□ N/A
1. A construction in progress is recognized if the economic benefits relating to it are very likely to
flow to the Company and its cost can be reliably measured. A construction in progress is measured at the
actual cost incurred before it is completed and ready for intended use.
2. When a construction in progress is ready for intended use, it is transferred to fixed assets at its
actual construction cost. A construction in progress that is ready for intended use but the final settlement
of which has not yet been completed is transferred to fixed assets at estimated value first, and after the
completion of final settlement, the estimated value is adjusted according to the actual cost, but the
accrued depreciation is not adjusted.
25. Borrowingcosts
√ Applicable□ N/A
1. Recognition for capitalization of borrowing costs
Borrowing costs incurred by the Company that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other
borrowing costs are recognized as expenses and charged to the current profit and loss.
2. Period for capitalizing borrowing expenses
(1) Borrowing expenses are capitalized when all of the following conditions are met: 1) capital
expenditure has been incurred; 2) borrowing expenses have been incurred; and 3) activities relating to
the acquisition, construction or production of the asset that are necessary to prepare the asset for its
intended use or sale have commenced.
(2) Where acquisition and construction or production of a qualified asset is interrupted abnormally
and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall
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be suspended. The borrowing expenses incurred during these periods shall be recognized as expenses for
the current period until the acquisition, construction or production of a qualifying asset is resumed.
(3) Capitalization of borrowing expenses shall be ceased when acquisition, construction or
production of the qualifying asset has prepared for its intended use or sale.
3. Capitalization rate and capitalization amount of borrowing expenses
As for the specific borrowings for the acquisition and construction or production of assets
qualifying for capitalization, the to-be-capitalized amount of interests shall be determined in light of the
actual cost incurred on the current specific borrowings (including the amortization of discounts or
premiums determined using the effective interest method) minus the income of interests earned from the
unused borrowings by depositing it in the bank or investment income from such borrowing by making it
as a temporary investment; where a general borrowing is used for the acquisition and construction or
production assets qualifying for capitalization, the Company shall calculate and determine the
to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average
value of the accumulative expenditures to asset minus the specific borrowing by the capitalization rate of
the general borrowing used.
26. Biologicalassets
□ Applicable√ N/A
27. Oilandgasassets
□ Applicable√ N/A
28. Userightassets
□ Applicable√ N/A
29. Intangibleassets
(1). Measurement,servicelifeandimpairmenttest
√ Applicable□ N/A
1.Intangible assets include land use rights, patents, and software etc. and are measured at cost
initially.
An intangible asset with a finite useful life is amortized over its useful life in a systematical and
rational expected realization of economic benefits relative to the intangible asset, or is amortized using
the straight-line method if it is impossible to determine expected realization reliably. The specific years
are as follows:
Item Amortization period(years)
Land use rights 30
Patents 10
Software 3-5
(2). Accountingpolicyoninternalresearchanddevelopmentexpenditures
□ Applicable√ N/A
30. Impairmentoflong‐termassets
√ Applicable□ N/A
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For long-term equity investments, fixed assets, construction in progress, intangible assets with a
finite useful life and other long-term assets, if there’s an indication of impairment at the balance sheet
date, the Company assesses their recoverable amount. Goodwill arising from business combinations and
intangible assets with an infinite useful life are tested for impairment every year regardless of whether
there’s an indication of impairment. Goodwill is tested for impairment together with the relevant
groups of assets or combinations of groups of assets.
If the recoverable amount of a long-term asset is less than its carrying amount, the difference is
measured as impairment loss of the asset and recognized in profit or loss for the current period.
31. Long‐termprepaidexpenses
√ Applicable□ N/A
Long-term prepaid expenses are expenses that have already been incurred but should be amortized
over a period of more than one year (excluding one year). Long-term prepaid expenses are stated as the
amount actually incurred and shall be amortized evenly by stages within the benefit period or specified
period. If an item of long-term prepaid expenses will not benefit the subsequent periods, the amortized
value of the item that has not yet been amortized is wholly transferred to profit or loss for the current
period.
32. Contractliabilities
Recognitionmethodforcontractliabilities
√ Applicable□ N/A
The Company presents contract liabilities as its obligations for transferring goods or providing
services to customers corresponding to considerations that have been received or receivable.
Before goods are transferred to a customer, if the customer has paid the contractual consideration or
the Company has obtained the right of unconditionally receiving the contractual consideration, we
recognize the amount received or receivable as contract liabilities at the earlier of the actual payment of
such amount by the customer and the due payment date of such amount.
33. Employeebenefits
(1) Accountingtreatmentofshort‐termemployeebenefits
√ Applicable□ N/A
The short-term employee benefits actually incurred are recognized as liabilities in the accounting
period during which employee services are rendered, and included in profit or loss for the current period
or the cost of related assets.
(2) Accountingtreatmentofpost‐employmentbenefits
√ Applicable□ N/A
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
(1) In the accounting period during which employee services are rendered, the amount in
contribution as calculated according to the defined contribution plan is recognized as liabilities and
included in profit or loss for the current period or the cost of related assets.
(2) The accounting treatment of a defined benefit plan generally involves the following steps:
1) According to the projected unit credit method, use the unbiased and consistent actuarial
assumptions to estimate demographic variables and financial variables, measure the obligation arising
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from the defined benefit plan and determine the period to which the relevant obligation belongs.
Meanwhile, discount the obligation arising from the defined benefit plan, in order to determine the
present value of the benefit plan obligation and the current service cost.
2) If the defined benefit plan has assets, the deficit or surplus resulting after reducing the present
value of the defined benefit plan obligation by the fair value of the defined benefit plan is recognized as
a net liability or asset of the defined benefit plan. If the defined benefit plan has a surplus, the net assets
of the defined benefit plan are measured at the lower of surplus in the defined benefit plan and asset
ceiling;
3) At the end of the reporting period, the cost of employee benefits arising from the defined benefit
plan is recorded as service cost, net interest on the net liabilities or net assets of the defined benefit plan,
and changes arising from re-measurement of the net liabilities or net assets of the defined benefit plan,
wherein the service cost and the net interest on the net liabilities or net assets of the defined benefit plan
are included in profit or loss for the current period or the cost of related assets, and the changes arising
from re-measurement of the net liabilities or net assets of the defined benefit plan are included in other
comprehensive income, which will not be reserved to profit or loss in subsequent periods, but may be
transferred within the scope of equity.
(3) Accountingtreatmentofterminationbenefits
√ Applicable□ N/A
When the Company can no longer withdraw the offer of termination benefits as a result of
termination of employment or redundancy, or recognizes the restructuring costs or expenses relating to
payment of termination benefits, whichever the earlier, the employee benefit liabilities arising from
recognition of termination benefits are recognized in profit or loss for the current period.
(4) Accountingtreatmentofotherlong‐termemployeebenefits
√ Applicable□ N/A
Other long-term employee benefits are accounted for in accordance with the provisions applicable
to defined contribution plans if they are qualified as defined contribution plans, otherwise, are accounted
for in accordance with the provisions applicable to defined benefit plans. In order to simplify the
accounting treatment, the total net amount of the cost of employee benefits arising from the defined
benefit plans that is recorded as service cost, net interest on the net liabilities or net assets of other
long-term employee benefits, changes arising from re-measurement of the net liabilities or net assets of
other long-term employee benefits and other components is included in profit or loss for the current
period or the cost of related assets.
34. Leasingliabilities
□ Applicable√ N/A
35. Provisions
√ Applicable□ N/A
1. An obligation arising from any external guarantee, instigation, product quality warranty, onerous
contract or other contingencies is recognized as a provision if it is a present obligation assumed by the
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Company, and it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and the amount of the obligation can be reliably measured.
2.The amount recognized as a provision is the best estimate of the consideration required to settle
the present obligation. The carrying amount of provisions is reviewed at the balance sheet date.
36. Share‐basedpayments
√ Applicable□ N/A
1. Categories of share-based payments
Share-based payments include equity-settled share-based payments and cash-settled share-based
payments
2. Accounting treatment for implementation, modification and termination of share-based payment
plan
(1) Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees that can be
executed immediately upon being granted, are measured at the fair value of the equity instruments at the
grant date, and recognized as related costs or expenses with a corresponding adjustment to capital
reserve. At each balance sheet date during the vesting period, equity-settled share-based payments in
exchange for services rendered by employees that cannot be executed until services in the vesting period
are completed or required performance conditions are satisfied, are measured at the fair value of the
equity instruments at the grant date based on the best estimate of exercisable numbers of equity
instruments, and recognized as related costs or expenses with a corresponding adjustment to capital
reserve.
For equity-settled share-based payments in exchange for services rendered by other parties, if the
fair value of services from other parties can be measured reliably, they are measured at the fair value of
services from other parties at the date when such services are received. If the fair value of services from
other parties cannot be measured reliably but the fair value of the equity instruments can be measured
reliably, they are measured at the fair value of the equity instruments at the date when such services are
received. The fair value of the equity instruments are recognized as related costs or expenses, with a
corresponding increase in owners' equity.
(2) Cash-settled share-based payments
Cash-settled share-based payments in exchange for services rendered by employees that can be
executed immediately upon being granted, are recognized as related costs or expenses based on the fair
value of liabilities assumed by the Company at the grant date, with a corresponding increase in liability.
At each balance sheet date during the vesting period, cash-settled share-based payments in exchange for
services rendered by employees that cannot be executed until services in the vesting period are
completed or required performance conditions are satisfied, are measured at the fair value of liabilities
assumed by the Company based on the best estimate of exercisable conditions, and recognized as related
costs or expenses and relevant liabilities.
(3) Modification and termination of share-based payment plan
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In case the Company modifies a share-based payment plan, if the modification increases the fair
value of the equity instruments granted, the Company will include the incremental fair value of the
equity instruments granted in the measurement of the amount recognized for services received. If the
modification increases the number of the equity instruments granted, the Company will include the fair
value of additional equity instruments granted in the measurement of the amount recognized for services
received. If the Company modifies the exercisable conditions of the share-based payment plan in a
manner beneficial to the employee, the Company will consider the modified exercisable conditions when
dealing with exercisable conditions.
If the modification decreases the fair value of the equity instruments granted, the Company will
continue to measure the amount recognized for services received at the fair value of the equity
instruments at the grant date without including the decremental fair value of the equity instruments. If
the modification decreases the number of the equity instruments granted, the Company will treat the
decreased number as the cancelled number of equity instruments granted. If the Company modifies the
exercisable conditions in a manner unbeneficial to the employee, the Company will not consider the
modified exercisable conditions when dealing with exercisable conditions.
If cancellation or settlement of the equity instruments granted occurs (not due to unsatisfaction of
exercisable conditions) during the vesting period, the Company will account for the cancellation or
settlement of the equity instruments granted as an acceleration of vesting, and recognize immediately the
amount that otherwise would have been recognized over the remainder of the vesting period.
37. Preferredshares,perpetualbondsandotherfinancialinstruments
□ Applicable√ N/A
38. Revenue
(1).Accountingpoliciesadoptedforincomerecognitionandmeasurement
√ Applicable□ N/A
1. Principles for revenue recognition
The Company recognizes revenue upon the fulfillment of its performance obligations, that is, when
the customer receives the control over relevant goods or services.
At the beginning date of a contract, the Company assesses the contract to identify individual
performance obligations contained in the contract and determine whether individual obligations are to be
performed during a period of time or at a specific time point, and then separately recognize revenue
upon the fulfillment of individual obligations.
An obligation meeting one of the following conditions is one to be performed within a period of
time, and the remaining are obligations to be performed at a specific time point:
1) The customer receives and consumes the economic benefits from the performance of the
Company when the Company performs its obligations;
2) The customer can control the goods in progress during the performance of the Company; or
3) The goods generated during the performance process of the Company have irreplaceable uses,
and the Company is entitled to payment for the portion completed during the entire contract term.
The Company recognizes revenue according to the performance progress during the period of time
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for obligations to be performed during a period of time. If the performance progress cannot be
determined reasonably, and the Company is expected to be paid based on the costs incurred, the
Company recognizes revenue according to the amount of costs incurred until the performance progress
can be determined reasonably.
For obligations to be performed at a specific time point, the Company recognizes revenue when the
customer receives the control over the relevant goods or services. The following will be considered
when determining whether the customer has obtained the control over the goods or services:
1) The Company has the present rights of receiving payments for such goods or services;
2) The Company has transferred the physical goods to the customer;
3) The Company has transferred major risks and rewards of the legal title or ownership in the goods
to the customer; and
3) The Customer has accepted such goods or services.
If a contract contains two or more performance obligations, the Company allocates the transaction
price to individual performance obligations according to the relative proportion of the individual sale
prices of the goods or services promised under such individual performance obligations, and measures
the revenue according to the transaction price allocated to individual performance obligations.
The transaction price refers to the amount of the consideration expected to be received by the
Company on the basis of transferring goods to the customer. Amounts received by the Company on
behalf of third parties, and amounts expected to be refunded to the customer, are accounted for as
liabilities, but are not included in the transaction price. If a contract contains a major financing portion,
the Company determines the transaction price as the amount payable in cash when the customer obtains
the control over the goods or services. The difference between the transaction price and contract
consideration is amortized using the effective interest method during the term of the contract. If the
Company expects that the interval between the acquisition of the goods or services by the customer and
the payment of prices by the customer will not exceed one year from the commencement date of the
contract, no significant financing factor is considered.
The rights of the Company for collecting the considerations for goods or services that have been
transferred to customers (which rights depend on factors other than the lapse of time) are presented as
contract assets, for which the provision of impairment is made on the basis of expected credit loss. The
rights of the Company for unconditionally collecting payments from customers (depending only on the
lapse of time) are presented as receivables. The obligations of the Company for transferring goods or
providing services to customers corresponding to considerations that have been received or receivable
are presented as contract liabilities.
2. Specific methods for revenue recognition
(1) Revenue from sales of goods
Goods sold to the domestic market: 1) Under the direct sale model and the distribution mode, the
Company recognizes the revenue when the goods sent have been delivered to customers with customers'
receipt given to the Company. For goods sold attached with return conditions, the Company recognizes
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the revenue when the validity period of goods return conditions expires; for goods required for
installment and inspection after sales, the Company recognizes the revenue when such goods have been
installed and inspected with customers' acceptance certificate given to the Company; for goods sold
through a physical store, the Company recognizes the revenue when such goods are delivered to
customers with payments received. If the Company shares profits from sales of product to customers, the
Company recognizes the revenue at the settlement prices agreed between the parties when customers
receive and inspect the goods. After the customers sold such goods, the Company shares the rewards of
the incomes from external sales implemented by the customers after deducting relevant costs, and
recognizes the share revenue on this basis. 2) Under the commissioned sales mode, the Company
recognizes the revenue when it receives the list of commissioned sales from the customer.
Goods exported to overseas markets: The Company mainly adopts FCA for export of goods. Under
this mode, the Company recognizes revenue when it delivers goods at the designated location with
export customs clearance procedures completed.
(2) Revenue from light source services
For light source products of laser digital cinema projector leased by the Company with technical
services to customers, the Company recognizes the revenue by multiplying actual hours in consumption
by the agreed unit price at the end of each month if the rent is charged by actual hours in consumption
pursuant to contract provisions, or by apportioning over the agreed service period at the end of each
month (time proportion) if the rent is charged on a monthly, quarterly or annual basis.
For other products leased by the Company, the Company recognizes the revenue by apportioning
over the service period pursuant to contract provisions.
(3) Other incomes
For installation services provided by the Company, the Company recognizes the revenue when it
has completed the services and received customers’ acceptance certificate; for repair and maintenance
services provided by the Company, the Company recognizes the revenue when it has completed the
services and received payments; for technology development services provided by the Company, the
Company recognizes the revenue when it has completed the services or when the agreed time point of
service acceptance is reached.
(2).Description of differences in the accounting policies in revenue recognition due to
differentoperatingmodesadoptedforthesamebusinesstype
□ Applicable√ N/A
39. Contractcosts
√ Applicable□ N/A
Contract costs include incremental costs incurred for acquiring the contract and contract
performance costs. The incremental costs incurred for acquiring the contract (“Contract Acquisition
Costs”) refer to costs that would not be incurred if the contract is not acquired. If such costs are expected
to be recovered, such costs are recognized as an asset as Contract Acquisition Costs.
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The costs incurred by the Company for performing a contract are recognized as an asset of contract
performance costs if they do not fall within the scope of other Accounting Standards for Business
Enterprises, like inventories, and meet all the following conditions:
1. The cost is directly related to a present or expected contract, including direct labor, direct
materials, manufacturing expenses (or similar expenses), costs explicitly to be borne by users, and other
costs arising from the contract;
2. The cost leads to the increase in resources of the Company for fulfilling its performance
obligations in the future; and
3. The cost is expected to be recovered.
Assets recognized by the Company from Contract Acquisition Costs and contract performance
costs (hereinafter referred to as “assets related to contract costs”) are amortized on the same basis as
recognizing incomes from goods related to assets, and are recognized in the profit or loss for the current
period. If the amortization period of assets recognized from the incremental costs of acquiring a contract
is no more than one year, such incremental costs are recognized in the profit or loss for the current
period.
When the book value of assets related to contract costs is greater than the difference between the
following two items, the Company makes a provision of impairment on the exceeding portion and
recognizes losses of asset impairment:
1. Remaining consideration expected to be collected for transferring the goods related to the assets;
and
2. Costs expected to be incurred for transferring the related goods.
40. Governmentgrants
√ Applicable□ N/A
1. Government grants are recognized if (1) the Company meets the conditions attaching to the
government grants; and (2) the Company will receive the government grants. Government grants in the
form of monetary assets are measured at the amount received or receivable. Government grants in the
form of non-monetary assets are measured at fair value, or if their fair value is unavailable, at nominal
amount.
2. Determination and accounting treatment of government grants related to assets
Government grants related to assets are government grants which are offered for purchasing,
constructing or otherwise acquiring long-term assets as provided by the applicable government
documents. In the absence of such express provision in the applicable government documents,
government grants related to assets are those with a primary condition that the Company should
purchase, construct or otherwise acquire long-term assets. Government grants related to assets are offset
against the carrying amount of the relevant assets or recognized as deferred income. Government grants
related to assets recognized as deferred income shall be included in profit or loss over the service life of
the relevant assets on a reasonable and systemic basis. Government grants measured at nominal amount
are directly recognized in profit or loss for the current period. In case of sale, transfer, retirement or
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damage of the relevant assets before the end of intended service life, the balance of the unallocated
deferred income is transferred to profit or loss for the period in which the assets are disposed of.
3. Determination and accounting treatment of government grants related to income
Government grants related to income are government grants other than those related to assets.
Government grants related to both assets and income in which it is difficult to make a distinction
between the portion related to assets and the portion related to income are wholly classified as
government grants related to income. Government grants related to income as compensation for
expenses or losses to be incurred in subsequent periods are recognized as deferred income and in the
period for recognizing the relevant costs, expenses or losses, included in profit or loss for the current
period or offset against the relevant costs. Government grants related to income as compensation for
expenses or losses already incurred are directly included in profit or loss for the current period or offset
against the relevant costs.
4. Government grants related to daily operations of the Company are recognized in other income or
offset against the relevant costs and expenses depending on the nature of economic business.
Government grants not related to daily operations of the Company are recognized in non-operating
income or expenses.
5. Accounting treatment of policy preferential loans and interest subsidies
(1) If the Ministry of Finance appropriates the interest subsidies to the lending bank, who then
grants the loan to the Company at the policy preferential rate, the loan is stated as the amount actually
received, and the borrowing cost is calculated according to the principal of the loan and the policy
preferential rate.
(2) If the Ministry of Finance directly appropriates the interest subsidies to the Company, the
interest subsidies are offset against the borrowing cost.
41. Deferredtaxassetsanddeferredtaxliabilities
√ Applicable□ N/A
1. The difference between the tax base of an asset or liability and its carrying amount (or in case of
an item not recognized as asset or liability whose tax base can be determined according to the applicable
tax law, the difference between its tax base and carrying amount) is recognized as a deferred tax asset or
deferred tax liability according to the tax rate applicable to the period in which the asset or liability is
expected to be recovered or settled.
2. Deferred income tax assets are recognized to the extent of the amount of income tax payable that
will be available in future periods against which deductible temporary differences are deductible. At the
balance sheet date, deferred tax assets not recognized in prior periods are recognized if there’s
conclusive evidence that it is probable that sufficient taxable income will be available in future periods
against which the deductible temporary differences are deductible.
3. At the balance sheet date, the carrying amount of deferred income tax assets is reviewed and
reduced to the extent that it is no longer probable that sufficient taxable income will be available in
future periods to allow the benefit of the deferred tax assets to be utilized. If it is probable that sufficient
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taxable income will be available, the reduced amount is reversed.
4. The income taxes and deferred income taxes are included in profit or loss for the current period
as income tax expenses or gains, except the income taxes arising from any: (i) business combination; or
(ii) transaction or event directly recognized in owners’ equity.
42. Leases
(1).Accountingtreatmentofoperatingleases
√ Applicable□ N/A
If the Company is a lessee, the rents paid by the Company are included in the costs of the relevant
assets or in profit or loss for the current period over the whole lease term on a straight line basis. The
initial direct cost incurred by the Company is directly recognized in profit or loss for the current period.
Contingent rents are recognized in profit or loss in the period in which they are incurred.
If the Company is a lessor, the rents received by the Company are recognized in profit or loss for
the current period over the whole lease term on a straight line basis. The initial direct cost incurred by
the Company is directly recognized in profit or loss for the current period. However, if such initial direct
cost is of a large amount, the initial direct cost is capitalized and recognized in profit or loss by
installments. Contingent rents are recognized in profit or loss in the period in which they are incurred.
(2).Accountingtreatmentoffinanceleases
√ Applicable□ N/A
If the Company is a lessee, the lower of the fair value of the leased asset at the inception of the
lease and the present value of the minimum lease payments is recorded as the carrying amount of the
rented assets, with the minimum lease payments as the carrying amount of long-term payables and the
difference charged to unrecognized financing fees at the commencement date of the lease term. The
initial direct cost incurred by the Company is directly recognized in the value of the rented assets. In
each period of the lease term, the financing fees for the period is recognized by using the effective
interest method.
If the Company is a lessor, the aggregate of the minimum lease receivable at the inception of the
lease and the initial direct costs is recognized as the carrying amount of the finance lease receivable and
the unguaranteed residual value is recorded at the same time at the commencement date of the lease term;
the difference between the aggregate of the minimum lease receivable, the initial direct costs and the
unguaranteed residual value, and the aggregate of their present values is recognized as unearned
financing income. In each period of the lease term, the financing income for the period is recognized by
using the effective interest method.
(3).Methodfordeterminationandaccountingtreatmentsofleaseundernewleasestandards
□ Applicable√ N/A
43. Othersignificantaccountingpoliciesandaccountingestimates
□ Applicable√ N/A
44. Changesinsignificantaccountingpoliciesandaccountingestimates
(1).Changesinsignificantaccountingpolicies
√ Applicable□ N/A
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Remarks(name and amount of
Changes in accounting policies and line items in financial statements
Approval procedures
associated reasons that have been materially
affected)
Implement the Accounting Standard for Approved by the See the table below
Business Enterprises No. 14 - Revenue management of the
amended and released by the Ministry of Company
Finance
Other description:
In accordance with the Accounting Standards for Business Enterprises No.14- Revenue(Cai Kuai
[2017] No. 2) issued by the Ministry of Finance on July 5, 2017, for enterprises listed in domestic and
oversea stock exchange concurrently and enterprises listed overseas with the financial statements
prepared under internal financial reporting standards or accounting standards for business enterprises,
the new revenue standard shall be implemented from January 1,2018; and for other enterprises listed in
domestically, the revenue standard shall be implemented from January 1, 2020. As a domestic listed
company, the Company adopted the new revenue standard as at January 1, 2020, and made adjustment
on the opening balance of relevant item recognized in the financial statements, but the data in
comparable period can be unadjusted: (1) the goods payments received in advance originally qualified
for conditions of “Receipts in advance” were charged to the line item of Contract liability”; (2) the rights
of the Company for collecting considerations of goods that have been transferred to customers are
presented under “contract assets”, which rights are dependent upon factors other than the lapse of time;
and (3) for goods sold under the model of “profit distribution”, income from customers received but not
recognized were changed as it satisfied the new revenue standard, with an adjustment on the opening
balance of relevant item recognized.
The new revenue standards, when implemented, will mainly bring the following influences to the
Company’s financial statements as at January 1, 2020:
Balance sheet
Item Adjustment influence
At December 31, 2019 of the new revenue January 1, 2020
standards
Accounts
176,035,155.24 15,587,556.77 191,622,712.01
receivable
Inventories 299,966,170.35 -16,355,310.22 283,610,860.13
Contract assets - 3,740,605.96 3,740,605.96
Other current
44,405,513.30 -2,340,625.20 42,064,888.10
assets
Receipts in
184,444,643.33 -16,910,443.03 167,534,200.30
advance
Contract
15,777,305.81 15,777,305.81
liabilities
Other current
1,133,137.22 1,133,137.22
liabilities
Retained
288,975,820.29 1,278,734.88 290,254,555.17
profits
Total equity
attributable to 1,974,559,837.64 1,278,734.88 1,975,838,572.52
owners of the
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2020 Semiannual Report
Parent
Company
Minority
149,649,306.18 -646,507.57 149,002,798.61
interests
(2).Changesinsignificantaccountingestimates
□ Applicable√ N/A
(3).Descriptionof adjustments inopening balancesof line items infinancial statementsof
the year due to implementation of new income standard and new lease standard since
2020
√ Applicable□ N/A
Consolidated Balance Sheet
Unit: Yuan Currency: RMB
At December 31,
Item January 1, 2020 Adjusted amount
2019
Current Assets:
Cash and bank balances 875,858,784.58 875,858,784.58
Balances with clearing agencies
Placements with banks and
other financial institutions
Held-for-trading financial assets 540,000,000.00 540,000,000.00
Derivative financial assets
Notes receivable 4,042,559.63 4,042,559.63
Accounts receivable 176,035,155.24 191,622,712.01 15,587,556.77
Receivables financing 1,980,500.00 1,980,500.00
Prepayments 35,070,999.13 35,070,999.13
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer's share of insurance
contract reserves
Other receivables 9,618,750.08 9,618,750.08
Including: Interest receivable
Dividends receivable
Financial assets purchased
under resale agreements
Inventories 299,966,170.35 283,610,860.13 -16,355,310.22
Contract assets 3,740,605.96 3,740,605.96
Held-for-sale assets
Non-current assets due within
one year
Other current assets 44,405,513.30 42,064,888.10 -2,340,625.20
Total Current Assets 1,986,978,432.31 1,987,610,659.62 632,227.31
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 139,534,371.94 139,534,371.94
Other equity instrument 11,975,419.38 11,975,419.38
investments
Other non-current financial
assets
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2020 Semiannual Report
Investment properties
Fixed assets 471,204,340.95 471,204,340.95
Construction in progress 20,132,004.07 20,132,004.07
Bearer biological assets
Oil and gas assets
Use right assets
Intangible assets 332,331,324.07 332,331,324.07
Development expenditure
Goodwill
Long-term prepaid expenses 16,908,070.34 16,908,070.34
Deferred tax asset 109,023,941.85 109,023,941.85
Other non-current assets 11,420,185.94 11,420,185.94
Total Non-current Assets 1,112,529,658.54 1,112,529,658.54
Total assets 3,099,508,090.85 3,100,140,318.16 632,227.31
Current Liabilities:
Short-term borrowings 76,765,319.05 76,765,319.05
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 37,335,841.79 37,335,841.79
Accounts payable 176,624,445.46 176,624,445.46
Receipts in advance 184,444,643.33 167,534,200.30 -16,910,443.03
Contract liabilities 15,777,305.81 15,777,305.81
Financial assets sold under
repurchase agreements
Customer deposits and deposits
from banks and other financial
institutions
Funds from securities trading
agency
Funds from underwriting
securities agency
Employee benefits payable 50,586,932.71 50,586,932.71
Taxes payable 42,924,647.79 42,924,647.79
Other payables 14,364,076.43 14,364,076.43
Including: Interest payable
Dividends payable
Fees and commissions payable
Amounts payable under
reinsurance contracts
Held-for-sale liabilities
Non-current liabilities due 64,968,795.02 64,968,795.02
within one year
Other current liabilities 1,133,137.22 1,133,137.22
Total Current Liabilities 648,014,701.58 648,014,701.58
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings 279,615,107.27 279,615,107.27
Bonds payable
Including: Preferred shares
Perpetual bonds
Leasing liabilities
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Long-term accounts payable 3,488,100.00 3,488,100.00
Long-term employee benefits
payable
Provisions 27,072,676.49 27,072,676.49
Deferred income 17,108,361.69 17,108,361.69
Deferred tax liabilities
Other non-current liabilities
Total Non-current Liabilities 327,284,245.45 327,284,245.45
Total Liabilities 975,298,947.03 975,298,947.03
Owners' (or Shareholders') Equity:
Paid-in capital (or share capital) 451,554,411.00 451,554,411.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1,207,942,318.37 1,207,942,318.37
Less: Treasury shares
Other comprehensive income 3,287,063.85 3,287,063.85
Special reserve
Surplus reserve 22,800,224.13 22,800,224.13
General risk reserve
Retained profits 288,975,820.29 290,254,555.17 1,278,734.88
Total owners’ (or shareholders’) 1,974,559,837.64 1,975,838,572.52 1,278,734.88
equity attributable to owners of
the Parent Company
Minority interests 149,649,306.18 149,002,798.61 -646,507.57
Total Owners’ (or 2,124,209,143.82 2,124,841,371.13 632,227.31
Shareholders’) Equity
Total Liabilities and 3,099,508,090.85 3,100,140,318.16 632,227.31
Owners’(or Shareholders’) Equity
Description of adjustments on each line item:
√ Applicable□ N/A
In accordance with the Accounting Standards for Business Enterprises No.14- Revenue(Cai Kuai
[2017] No. 2) issued by the Ministry of Finance on July 5, 2017, for enterprises listed in domestic and
oversea stock exchange concurrently and enterprises listed overseas with the financial statements
prepared under internal financial reporting standards or accounting standards for business enterprises,
the new revenue standard shall be implemented from January 1,2018; and for other enterprises listed in
domestically, the revenue standard shall be implemented from January 1, 2020. As a domestic listed
company, the Company adopted the new revenue standard as at January 1, 2020, and made adjustment
on the opening balance of relevant item recognized in the financial statements, but the data in
comparable period can be unadjusted: (1) the goods payments received in advance originally qualified
for conditions of “Receipts in advance” were charged to the line item of Contract liability”; (2) the rights
of the Company for collecting considerations of goods that have been transferred to customers are
presented under “contract assets”, which rights are dependent upon factors other than the lapse of time;
and (3) for goods sold under the model of “profit distribution”, income from customers received but not
recognized were changed as it satisfied the new revenue standard, with an adjustment on the opening
balance of relevant item recognized.
Balance Sheet of the Parent Company
Unit: Yuan Currency: RMB
At December 31,
Item January 1, 2020 Adjusted amount
2019
Current Assets:
Cash and bank balances 570,479,390.49 570,479,390.49
Held-for-trading financial 540,000,000.00 540,000,000.00
assets
Derivative financial assets
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2020 Semiannual Report
Notes receivable 3,542,559.63 3,542,559.63
Accounts receivable 299,315,776.44 295,616,359.63 -3,699,416.81
Receivables financing 442,500.00 442,500.00
Prepayments 6,410,257.48 6,410,257.48
Other receivables 67,227,575.21 67,227,575.21
Including: Interest receivable
Dividends receivable
Inventories 135,617,379.22 135,617,379.22
Contract assets 3,699,416.81 3,699,416.81
Held-for-sale assets
Non-current assets due within
one year
Other current assets 12,280,164.39 12,280,164.39
Total Current Assets 1,635,315,602.86 1,635,315,602.86
Non-current Assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 257,795,276.13 257,795,276.13
Other equity instrument 7,075,419.38 7,075,419.38
investments
Other non-current financial
assets
Investment properties
Fixed assets 60,391,512.92 60,391,512.92
Construction in progress 1,385,496.59 1,385,496.59
Bearer biological assets
Oil and gas assets
Use right assets
Intangible assets 330,796,423.87 330,796,423.87
Development expenditure
Goodwill
Long-term prepaid expenses 12,771,126.83 12,771,126.83
Deferred tax asset 9,545,438.20 9,545,438.20
Other non-current assets 6,744,453.85 6,744,453.85
Total Non-current Assets 686,505,147.77 686,505,147.77
Total assets 2,321,820,750.63 2,321,820,750.63
Current Liabilities:
Short-term borrowings 10,217,738.36 10,217,738.36
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 37,335,841.79 37,335,841.79
Accounts payable 162,596,838.45 162,596,838.45
Receipts in advance 11,116,659.11 4,387,326.61 -6,729,332.50
Contract liabilities 6,485,831.14 6,485,831.14
Employee benefits payable 26,985,668.92 26,985,668.92
Taxes payable 1,534,242.70 1,534,242.70
Other payables 42,599,703.36 42,599,703.36
Including: Interest payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due
within one year
Other current liabilities 243,501.36 243,501.36
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2020 Semiannual Report
Total Current Liabilities 292,386,692.69 292,386,692.69
Non-current Liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term accounts payable 3,488,100.00 3,488,100.00
Long-term employee benefits
payable
Provisions 14,631,273.00 14,631,273.00
Deferred income 15,724,174.30 15,724,174.30
Deferred tax liabilities
Other non-current liabilities
Total Non-current Liabilities 33,843,547.30 33,843,547.30
Total Liabilities 326,230,239.99 326,230,239.99
Owners' (or Shareholders') Equity:
Paid-in capital (or share 451,554,411.00 451,554,411.00
capital)
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1,310,939,867.82 1,310,939,867.82
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 21,522,683.40 21,522,683.40
Retained profits 211,573,548.42 211,573,548.42
Total Owners’ (or 1,995,590,510.64 1,995,590,510.64
Shareholders’) Equity
Total Liabilities and 2,321,820,750.63 2,321,820,750.63
Owners’(or Shareholders’)
Equity
Description of adjustments on each line item:
√ Applicable□ N/A
In accordance with the Accounting Standards for Business Enterprises No.14- Revenue(Cai Kuai
[2017] No. 2) issued by the Ministry of Finance on July 5, 2017, for enterprises listed in domestic and
oversea stock exchange concurrently and enterprises listed overseas with the financial statements
prepared under internal financial reporting standards or accounting standards for business enterprises,
the new revenue standard shall be implemented from January 1,2018; and for other enterprises listed in
domestically, the revenue standard shall be implemented from January 1, 2020. As a domestic listed
company, the Company adopted the new revenue standard as at January 1, 2020, and made adjustment
on the opening balance of relevant item recognized in the financial statements, but the data in
comparable period can be unadjusted: (1) the goods payments received in advance originally qualified
for conditions of “Receipts in advance” were charged to the line item of Contract liability”; and (2) the
rights of the Company for collecting considerations of goods that have been transferred to customers are
presented under “contract assets”, which rights are dependent upon factors other than the lapse of time.
(4).Descriptionof retrospective adjustmentson comparable data in previousperiods upon
thefirstadoptionofthenewrevenuestandardandnewleasestandardfrom2020
□ Applicable√ N/A
45. Others
□ Applicable√ N/A
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2020 Semiannual Report
VI. Taxes
1. Majorcategoriesoftaxesandtaxrates
Description of major categories of taxes and tax rates
√ Applicable□ N/A
Category of tax Basis of tax computation Tax rate
Sales of goods or rendering of
Value-added tax (VAT) 3%、6%、9%、13%
taxable services
City maintenance and
Turnover tax payable 5%、7%
construction tax
8.25%、8.70%、8.84%、12.5%、
Enterprise income tax Taxable income
15%、16.5%、20%、21%、25%
Education surcharges Turnover tax payable 3%
Local education surcharges Turnover tax payable 2%
Disclosure of taxpayers with different rates of enterprise income tax:
√ Applicable□ N/A
Taxpayer Rate of enterprise income tax(%)
Appotronics Corporation Limited 15.00
Fengmi (Beijing) Technology Co., Ltd. 15.00
Shenzhen Appotronics Software Technology Co., 12.50
Ltd.
Appotronics Timewaying (Beijing) Technology 20.00
Co., Ltd.
Shenzhen Appotronics Xiaoming Technology Co., 20.00
Ltd.
Shenzhen Appotronics Laser Technology Co., Ltd. 20.00
Qingda Appotronics (Xiamen) Technology Co., 20.00
Ltd.
Shenzhen Appotronics Home Line Technology Co., 20.00
Ltd.
Appotronics Technology (Changzhou) Co., Ltd. 20.00
Shenzhen Appotronics Display Device Co., Ltd. 20.00
Appotronics Hong Kong Limited 8.25、16.50
Beijing Orient Appotronics Technology Co., Ltd. 20.00
Fabulus Technology Hong Kong Limited 16.50
JoveAI Innovation, Inc. 8.70、8.84、21.00
Appotronics USA, Inc. 21.00
FORMOVIE TECHNOLOGY INC 21.00
JoveAI Limited Tax exemption
WEMAX LLC 21.00
JOVEAI ASIA COMPANY LIMITED 20.00
Other taxpayers except above 25.00
Note:
1. Appotronics Hong Kong Limited and Fabulus Technology Hong Kong Limited, as domiciled in
Hong Kong, one of which can apply the two-level income tax system, namely, applying the tax rate of
8.25% for the first HKD 2 million taxable income and 16.5% for the remaining taxable income.
2. JoveAI Limited, as domiciled in the Cayman Islands, is exempt from enterprise income tax.
3. Appotronics USA, Inc., as domiciled in the United States, applies the federal enterprise income
tax rate of 21%.
4. JoveAI Innovation, Inc., as domiciled in the United States, applies the federal enterprise income
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2020 Semiannual Report
tax rate of 21%, the California state enterprise income tax rate of 8.84%, and the Delaware state
enterprise income tax rate of 8.70%.
5. FORMOVIE TECHNOLOGY INC, as domiciled in the United States, applies the federal
enterprise income tax rate of 21%.
5. WEMAX LLC, as domiciled in the United States, applies the federal enterprise income tax rate
of 21%.
7. JOVEAI ASIA COMPANY LIMITED, as domiciled in Viet Nam, applies the corporate income
tax rate of 20%.
2. Taxincentives
√ Applicable□ N/A
1. On December 9, 2019, the Company obtained the High-tech Enterprise Certificate (Certificate
No.: GR201944204257) jointly issued by Shenzhen Science and Technology Innovation Commission,
Shenzhen Finance Bureau and Shenzhen Tax Service of State Taxation Administration with a valid term
of three years. Therefore, the Company can pay the enterprise income tax at a rate of 15% from 2019 to
2021.
2. On November 30, 2018, Fengmi (Beijing) Technology Co., Ltd. obtained the High-tech
Enterprise Certificate (Certificate No.: GR201811009590) jointly issued by Beijing Municipal Science
and Technology Commission, Beijing Finance Bureau and Beijing Tax Service of State Taxation
Administration with a valid term of three years. However, as Fengmi (Beijing) Technology Co., Ltd.
failed to complete the registration in competent authorities, it enjoyed no tax incentives in 2018. It can
pay the enterprise income tax at a rate of 15% since 2019.
3. In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on Enterprise Income Tax Policies for Further Encouraging the Development of Software and
Integrated Circuit Industries (Cai Shui (2012) No.27), commencing from the first year of earning profits
prior to December 31,2017, a qualified company can be exempted from the enterprise income tax for the
first two years and enjoy a 50% tax reduction on the statutory tax rate of 25% from the third to the fifth
year until the tax incentive period expires. Therefore, the Company’s subsidiary, Shenzhen Appotronics
Software Technology Co., Ltd., is qualified for the tax incentive policy of “exemption from income tax
for the first two years and 50% reduction for next three years”, which means, it can be exempted from
enterprise income tax from 2016 to 2017, and pay the enterprise income tax at a rate of 12.5% from
2018 to 2020.
4. In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on Value-added Tax Policies for Software Products ( Cai Shui [2011] No.100), for
self-developed and produced software products sold by general VAT taxpayers, the
tax-refund-upon-collection policy is applicable to the part of their actual VAT burden in excess of 3%
after the VAT has been collected at a tax rate of 17%. The Company’s subsidiary Shenzhen Appotronics
Software Technology Co., Ltd. is qualified for enjoying such tax incentive from January 1, 2015.
162 / 234
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5. In accordance with Article 1 (26) of Annex 3 of the Notice of the Ministry of Finance and the
State Administration of Taxation on Implementing the Pilot Program of Replacing Business Tax with
Value-Added Tax in an All-round Manner (Cai Shui [2016] No.36), taxpayers are exempted from VAT
if they provide technology transfer, technology development, and technology consultation and services
in connection therewith. The Company is qualified for enjoying such tax incentive from January 26,
2018.
6. In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on Implementing the Inclusive Tax Deduction and Exemption Policies for Micro and Small
Enterprises (Cai Shui [2019] No.13), the annual taxable income of a small low-profit enterprise that is
not more than RMB 1 million shall be levied with the enterprise income tax rate at a discount of 25%,
namely, for which the applicable enterprise income tax rate is 20%; for the annual taxable income more
than RMB 1 million but no more than RMB 3 million, the taxable income shall be calculated at a
discount of 50%, namely, for which the applicable enterprise income tax rate is 20%. The following
subsidiaries are qualified for enjoying such tax incentives: Beijing Orient Appotronics Technology Co.,
Ltd., Appotronics Timewaying (Beijing) Technology Co., Ltd., Shenzhen Appotronics Xiaoming
Technology Co., Ltd., Shenzhen Appotronics Laser Technology Co., Ltd., Qingda Appotronics (Xiamen)
Technology Co., Ltd., Shenzhen Appotronics Home Line Technology Co., Ltd., Appotronics
Technology (Changzhou) Co., Ltd., and Shenzhen Appotronics Display Device Co., Ltd.
3. Others
□ Applicable√ N/A
VII.Notes to items in the consolidated financial statements
1. Cashandbankbalances
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Cash on hand 3,189.12 3,348.57
Bank deposits 699,310,868.31 857,708,997.58
Other monetary funds 30,133,607.96 18,146,438.43
Total 729,447,665.39 875,858,784.58
Including: Total
98,559,109.82 132,334,643.95
oversea deposits
Other description:
In other monetary funds, an amount of RMB 23,151,615.78 is restricted for being used as margins
while in bank deposits, an amount of RMB 20,000,000.00 is restricted for being frozen due to litigation.
2. Held‐for‐tradingfinancialassets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Financial assets at fair value through
495,000,000.00 540,000,000.00
profit or loss
Including:
Structural deposits 495,000,000.00 540,000,000.00
163 / 234
2020 Semiannual Report
Total 495,000,000.00 540,000,000.00
Other description:
□ Applicable√ N/A
3. Derivativefinancialassets
□ Applicable√ N/A
4. Notesreceivable
(1). Categoriesofnotesreceivable
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Bank acceptances 2,126,550.00 3,891,456.00
Commercial acceptances 2,054,836.79 151,103.63
Total 4,181,386.79 4,042,559.63
(2). NotesreceivablepledgedbytheCompanyattheendoftheperiod
□ Applicable√ N/A
(3). Notesreceivablewhichareundueasatthebalancesheetdatebutendorsedor
discountedbytheCompanyattheendoftheperiod
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount derecognized at the end Amount not derecognized at the
Item
of the period end of the period
Bank acceptances 900,000.00
Commercial acceptances 324,337.00
Total 1,224,337.00
(4). Notestransferredtoaccountsreceivableduetodrawer'sfailureincashingattheendof
theperiod
□ Applicable√ N/A
(5). Disclosurebycategoriesofprovisionforbaddebts
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Closing balance Opening balance
Provision for bad Provision for bad
Carrying amount Carrying amount
debts debts
Category Proportion Book Proportion Book
Proportion of value Proportion of value
Amount Amount Amount Amount
(%) provision (%) provision
(%) (%)
Provision
for bad
debts made
individually
Including:
Provision
for bad
4,211,325.57 100.00 29,938.78 0.71 4,181,386.79 4,050,512.45 100.00 7,952.82 0.20 4,042,559.63
debts made
by group
Including:
Bank
acceptance 2,126,550.00 50.50 2,126,550.00 3,891,456.00 96.07 3,891,456.00
bills
164 / 234
2020 Semiannual Report
Commercial
2,084,775.57 49.50 29,938.78 1.44 2,054,836.79 159,056.45 3.93 7,952.82 5.00 151,103.63
acceptances
Total 4,211,325.57 / 29,938.78 / 4,181,386.79 4,050,512.45 / 7,952.82 / 4,042,559.63
Provision for bad debts made individually:
□ Applicable√ N/A
Provisionforbaddebtsmadebygroup:
√ Applicable□ N/A
Itembygroup: Commercialacceptances
Unit: Yuan Currency: RMB
Closing balance
Name Proportion of provision
Notes receivable Provision for bad debts
(%)
Commercial 1.44
2,084,775.57 29,938.78
acceptance bills group
Total 2,084,775.57 29,938.78 1.44
Recognition criterion to make the bad debt provision by group and explanation
□ Applicable√ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables.
□ Applicable√ N/A
(6). Provisionforbaddebts
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Changes for the current period
Opening Closing
Category Recovery or Write off or
balance Provision balance
reversal cancellation
Commercial 7,952.82 21,985.96 29,938.78
acceptances
Total 7,952.82 21,985.96 29,938.78
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
Other description:
None
(7). Notesreceivableactuallycanceledinthecurrentperiod
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
5. Accountsreceivable
(1). Disclosurebyaging
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Aging Closing balance of carrying amount
Within 1 year
Including: Subitems within 1 year
Sub-total of items within 1 year 132,580,489.29
1 to 2 years 9,833,618.95
2 to 3 years 1,416,964.56
Total 143,831,072.80
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(2). Disclosurebycategoriesofprovisionforbaddebts
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Closing balance Opening balance
Provision for bad Provision for bad
Carrying amount Carrying amount
debts debts
Category Proporti Book Proporti Book
Proporti on of value Proporti on of value
Amount Amount Amount Amount
on (%) provisio on (%) provisio
n (%) n (%)
Provision
for bad
debts
made
individual
ly
Including:
Provision
for bad
143,831,072. 9,795,911. 134,035,161. 203,746,783. 12,124,606. 191,622,712.
debts 80
100.00
53
6.81
27 87
100.00
71
5.95
01
made by
group
Including:
Accounts
receivable
for which
the
provision 143,831,072.
100.00
9,795,911.
6.81
134,035,161. 203,746,783.
100.00
12,124,606.
5.95
191,622,712.
for bad 80 53 27 87 71 01
debts is
made by
aging
group
143,831,072. 9,795,911. 134,035,161. 203,746,783. 12,124,606. 191,622,712.
Total 80
/
53
/
27 87
/
71
/
01
Provision for bad debts made individually:
□ Applicable√ N/A
Provision for bad debts made by group:
√ Applicable□ N/A
Item by group: Accounts receivable for which the provision for bad debts is made by aging group
Unit: Yuan Currency: RMB
Closing balance
Name Proportion of provision
Accounts receivable Provision for bad debts
(%)
Within 1 year 132,580,489.29 6,629,024.51 5.00
1-2 years 9,833,618.95 2,458,404.74 25.00
2-3 years 1,416,964.56 708,482.28 50.00
Total 143,831,072.80 9,795,911.53 6.81
Recognition criterion to make the bad debt provision by group and explanation:
√ Applicable□ N/A
Recognition criterion to make the bad debt provision by group and explanation can refer to V.10 of
Section X for details.
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables.
166 / 234
2020 Semiannual Report
□ Applicable√ N/A
(3). Provisionforbaddebts
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Changes for the current period
Opening Recovery Closing
Category Write off or Other
balance Provision or balance
cancellation changes
reversal
Provision for
bad debts
12,124,606.71 -2,328,695.18 9,795,911.53
made by
group
Total 12,124,606.71 -2,328,695.18 9,795,911.53
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(4). Accountsreceivableactuallycanceledinthecurrentperiod
□ Applicable√ N/A
(5). Topfiveclosingbalancesofaccountsreceivablecategorizedbydebtors
√ Applicable□ N/A
Carrying Proportion to the balance of accounts Provision for bad
Entity amount receivable(%) debts
Customer 61,820,725.66 42.98 3,091,036.29
1
Customer 26,341,388.52 18.31 1,317,069.43
2
Customer 10,190,007.00 7.09 509,500.35
3
Customer 6,464,740.91 4.49 1,547,150.28
4
Customer 2,195,500.00 1.53 109,775.00
5
Sub-total 107,012,362.09 74.40 6,574,531.35
(6). Accountsreceivablederecognizedduetotransferoffinancialassets
□ Applicable√ N/A
(7). Assets and liabilities arising from transfer of accounts receivable and continued
involvement
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
6. Receivablesfinancing
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Bank acceptance bills receivable 362,600.00 1,980,500.00
Total 362,600.00 1,980,500.00
Changes in amount and fair value of receivables financing:
□ Applicable√ N/A
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2020 Semiannual Report
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
7. Prepayments
(1). Disclosureofprepaymentsbyaging
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 32,644,779.66 82.77 34,948,314.45 99.65
1 to 2 years 6,794,374.05 17.23 122,684.68 0.35
2 to 3 years 833.35 0.00
Total 39,439,987.06 100.00 35,070,999.13 100.00
Reasons for overdue settlement of prepayments with significant amounts aged more than 1 year:
None
(2). Topfiveclosingbalancesofprepaymentscategorizedbyreceivers
√ Applicable□ N/A
Proportion to the balance of
Entity Carrying amount
prepayments (%)
Supplier 1 13,030,362.87 33.04
Supplier 2 3,909,472.50 9.91
Supplier 3 2,678,466.27 6.79
Supplier 4 2,270,088.50 5.76
Supplier 5 1,935,509.79 4.91
Sub-total 23,823,899.93 60.41
Other description
□ Applicable√ N/A
8. Otherreceivables
Presentedbyitems
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest receivable
Dividends receivable
Other receivables 11,424,632.94 9,618,750.08
Total 11,424,632.94 9,618,750.08
Other description:
□ Applicable√ N/A
Interestreceivable
(1). Categoriesofinterestreceivable
□ Applicable√ N/A
(2). Significantinterestsoverdue
□ Applicable√ N/A
(3). Provisionforbaddebts
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
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2020 Semiannual Report
Dividendsreceivable
(1). Dividendsreceivable
□ Applicable√ N/A
(2). Dividendsreceivablewithsignificantamountsagedmorethan1year
□ Applicable√ N/A
(3). Provision for bad debts
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
Otherreceivables
(4). Disclosurebyaging
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Aging Closing balance of carrying amount
Within 1 year
Including: Subitems within 1 year
Sub-total of items within 1 year 5,917,632.34
1 to 2 years 4,959,142.86
2 to 3 years 441,715.69
Over 3 years 675,637.60
Total 11,994,128.49
(5). Categoriesbythenatureofotherreceivables
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance of carrying Opening balance of carrying
Nature of receivables
amount amount
Deposits/margins/petty cash 10,159,405.34 8,772,420.22
Withholding 604,218.29 1,275,175.63
Temporary receivables 1,230,504.86 10,289.71
Total 11,994,128.49 10,057,885.56
(6). Provisionforbaddebts
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Stage I Stage II Stage III
Provision for bad Lifetime ECL
12-month ECL Lifetime ECL (with Total
debts (without credit
in the future credit impairment)
impairment)
Balance as at
439,035.48 100.00 439,135.48
January 1, 2020
Balance as at
January 1, 2020 in
the current period
--transferred to
Stage II
--transferred to
Stage III
--reversed to Stage
II
--reversed to Stage
I
169 / 234
2020 Semiannual Report
Provision 130,360.07 130,360.07
Reversal
Write-off
Cancellation
Other changes
Balance as at June
569,395.55 100.00 569,495.55
30, 2020
Descriptionofsignificantchangesinthebalanceofotherreceivableswithchangedprovisionsforlosses
inthecurrentperiod:
□ Applicable√ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period:
□ Applicable√ N/A
(7). Provisionforbaddebts
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Changes for the current period
Opening Closing
Category Recovery Write off or Other
balance Provision balance
or reversal cancellation changes
Provision for
bad debts 439,135.48 130,360.07 569,495.55
made by group
Total 439,135.48 130,360.07 569,495.55
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(8). Otherreceivablesactuallycanceledinthecurrentperiod
□ Applicable√ N/A
(9). Topfiveclosingbalancesofotherreceivablescategorizedbydebtors
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Provision
Proportion to the for bad
Nature of other Closing
Entity Aging balance of other debts
receivables balance
receivables (%) Closing
balance
Shenzhen Meisheng
Margins 3,574,618.00 1-2 years 29.80 178,730.90
Industry Co., Ltd.
China Securities
Depository and Within 1
Deposits/margins 2,000,000.00 16.67 100,000.00
Clearing Co., Ltd. year
Shanghai Branch
Shenzhen Science Within 1
and Technology year, 1-2
Deposits 1,257,075.20 10.48 62,853.76
Assessment years, 2-3
Management Center years
Hong Kong Science
& Technology Parks Deposits 1,110,223.68 1-2 years 9.26 55,511.21
Corporation
Beijing Dongsheng
Bozhan Technology Within 1
Deposits/margins 658,584.72 5.49 32,929.24
Development Co., year
Ltd.
170 / 234
2020 Semiannual Report
Total / 8,600,501.60 / 71.70 430,025.11
(10). Accountsreceivableinvolvinggovernmentgrants
□ Applicable√ N/A
(11). therreceivablesderecognizedduetotransferoffinancialassets
□ Applicable√ N/A
(12). Assets and liabilities arising from transfer of other receivables and continued
involvement
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
9. Inventories
(1). Categoriesofinventories
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision for Provision for
decline in value of decline in value of
Item Carrying Carrying
inventories/impair Book value inventories/impair Book value
amount amount
ment of contract ment of contract
performance cost performance cost
Raw
254,078,688 235,649,613 169,021,593 150,119,877
material 18,429,074.88 18,901,716.15
.64 .76 .23 .08
s
Work in 14,784,099. 13,305,687. 12,337,519. 11,651,087.
1,478,412.05 686,431.07
progress 68 63 02 95
Goods 149,723,126 95,889,640. 75,034,497.
on hand .64
23,614,864.89 126,108,261
29
20,855,142.36
93
.75
Goods
17,355,687. 17,355,687. 40,421,349. 40,421,349.
upon
48 48 51 51
delivery
Material
s for
consigne 10,306,931. 10,303,280. 6,405,637.9 6,384,047.6
3,651.86 21,590.33
d 89 03 9 6
processi
ng
Total 446,248,534
43,526,003.68
402,722,530 324,075,740
40,464,879.91
283,610,860
.33 .65 .04 .13
(2). Provisionfordeclineinvalueofinventoriesandimpairmentofcontractperformance
cost
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Increase Decrease
Opening Closing
Item Reversal or
balance Provision Others Others balance
write-off
Raw
18,901,716.15 7,274,390.65 7,747,031.92 18,429,074.88
materials
Work in
686,431.07 1,376,044.40 584,063.42 1,478,412.05
progress
171 / 234
2020 Semiannual Report
Goods on
20,855,142.36 11,528,667.49 8,768,944.96 23,614,864.89
hand
Goods
upon
delivery
Materials
for
21,590.33 17,938.47 3,651.86
consigned
processing
Total 40,464,879.91 20,179,102.54 17,117,978.77 43,526,003.68
(3). Descriptionofcapitalizedamountofborrowingcostsincludedintheclosingbalanceof
inventories
□ Applicable√ N/A
(4). Descriptionofamortizationofcontractperformancecostduringtheperiod
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
10. Contractassets
(1).Descriptionofcontractassets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Carrying Provision for Carrying Provision for
Book value Book value
amount impairment amount impairment
Goods payment 4,143,457.96 228,548.26 3,914,909.70 3,937,479.96 196,874.00 3,740,605.96
Total 4,143,457.96 228,548.26 3,914,909.70 3,937,479.96 196,874.00 3,740,605.96
(2).Amountandreasonsofmajorchangesinthebookvalueduringthereportingperiod
□ Applicable√ N/A
(3).Descriptionofprovisionforimpairmentmadeoncontractassetsduringtheperiod
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Reversal Write-off/cancellation
Item Provision Reason
in the period
Goods payment 31,674.26
Total 31,674.26 /
If a provision for bad debts of accounts receivable is made in accordance with the general model of
ECL, please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables.
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
11. Held‐for‐saleassets
□ Applicable√ N/A
12. Non‐currentassetsduewithinoneyear
□ Applicable√ N/A
13. Othercurrentassets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
172 / 234
2020 Semiannual Report
Item Closing balance Opening balance
Input VAT to be deducted 35,391,912.94 37,976,562.19
Prepaid enterprise income tax 156,065.37 4,088,325.91
Total 35,547,978.31 42,064,888.10
Other description:
None
14. Debtinvestments
(1).Descriptionofdebtinvestments
□ Applicable√ N/A
(2).Debtinvestmentswithsignificantamountsattheendoftheperiod
□ Applicable√ N/A
(3).Description of provision for impairment
□ Applicable√ N/A
15. Other debt investments
(1).Descriptionofotherdebtinvestments
□ Applicable√ N/A
(2).Otherdebtinvestmentswithsignificantamountsattheendoftheperiod
□ Applicable√ N/A
(3).Description of provision for impairment
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
16. Long-term receivables
(1) Descriptionoflong‐termreceivables
□ Applicable√ N/A
(2) Provisionforbaddebts
□ Applicable√ N/A
(3) Long‐termreceivablesderecognizedduetotransferoffinancialassets
□ Applicable√ N/A
(4) Assets and liabilities arising from transfer of long‐term receivables and continued
involvement
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
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2020 Semiannual Report
17. Long-term equity investments
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Changes for the current period Closing
Investmen Declared balance of
Adjustment in Other Provision
Opening Decreased t profit or cash Closing provision
Investees Additional other equity for Other
balance investmen loss under dividend balance for
investment comprehensiv change impairmen s
t equity s or impairmen
e income s t
method profits t
I. Joint
venture
Sub-total
II.
Associates
Cinionic 139,534,371.9 217,201.2 138,692,410.2
-1,059,162.87
Limited 4 2 9
GDC
Technolog 127,773,820.6 765,306.4 129,462,583.5
923,456.56
y Limited 2 0 8
(BVI)
Sub-total 139,534,371.9 127,773,820.6 982,507.6 268,154,993.8
-135,706.31
4 2 2 7
139,534,371.9 127,773,820.6 982,507.6 268,154,993.8
Total -135,706.31
4 2 2 7
Other description
The difference between the adjustment for gains/losses of long-term equity investment during the period and the investment returns is the difference from the
combination and set-off of upstream transactions.
174 / 234
2020 Semiannual Report
18. Otherequityinstrumentinvestments
(1).Descriptionofotherequityinstrumentinvestments
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Shen Zhen Timewaying Technology 7,075,419.38 7,075,419.38
Co., Ltd.
Shenzhen Bevix Technology Co., Ltd. 4,900,000.00 4,900,000.00
Total 11,975,419.38 11,975,419.38
(2).Descriptionofequityinvestmentsnotheldfortrading
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
19. Othernon‐currentfinancialassets
□ Applicable√ N/A
20. Investment properties
Measurement mode of investment properties
N/A
21. Fixed assets
Presentedbyitems
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Fixed assets 455,164,004.06 471,204,340.95
Disposal of fixed assets
Total 455,164,004.06 471,204,340.95
Other description:
None
Fixedassets
(1). Description of fixed assets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Electronic
Machinery and Transportation Operating leased
Item equipment and Total
equipment equipment equipment
others
I. Cost:
1.Opening
82,619,598.35 1,020,400.05 31,265,315.39 525,597,112.41 640,502,426.20
balance
2. Increase 12,312,206.56 3,674,254.43 17,545,660.28 33,532,121.27
(1)Purchas 15,986,460.99
12,312,206.56 3,674,254.43
e
(2)
Transfer from
17,545,660.28 17,545,660.28
construction in
progress
(3)
Increase due to
business
combination
175 / 234
2020 Semiannual Report
3. Decrease 288,679.29 210,903.03 3,084,721.48 3,584,303.80
(1)
Disposal or 288,679.29 210,903.03 499,582.32
retirement
(2)
Transfer to 3,084,721.48 3,084,721.48
inventories
4.Closing
94,643,125.62 1,020,400.05 34,728,666.79 540,058,051.21 670,450,243.67
balance
II. Accumulated
depreciation
1.Opening
29,391,420.36 292,223.86 12,083,558.96 127,530,882.07 169,298,085.25
balance
2. Increase 7,815,934.89 87,399.54 2,841,383.57 36,660,302.40 47,405,020.40
(1)
7,815,934.89 87,399.54 2,841,383.57 36,660,302.40 47,405,020.40
Provision
3. Decrease 178,134.48 174,820.37 1,063,911.19 1,416,866.04
(1)
Disposal or 178,134.48 174,820.37 352,954.85
retirement
(2)
Transfer to 1,063,911.19 1,063,911.19
inventories
4.Closing
37,029,220.77 379,623.40 14,750,122.16 163,127,273.28 215,286,239.61
balance
III. Provision for
impairment
1.Opening
balance
2. Increase
(1)
Provision
3. Decrease
(1)
Disposal or
retirement
4.Closing
balance
IV. Book value
1. Closing
57,613,904.85 640,776.65 19,978,544.63 376,930,777.93 455,164,004.06
balance
2. Opening
53,228,177.99 728,176.19 19,181,756.43 398,066,230.34 471,204,340.95
balance
(2). Temporarily idle fixed assets
□ Applicable√ N/A
(3). Fixed assets rent under finance lease
□ Applicable√ N/A
(4). Fixed assets leased out under operating lease
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance of carrying amount
Operating leased equipment 376,930,777.93
176 / 234
2020 Semiannual Report
(5). Fixed assets of which certificates of title have not been obtained
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
Disposaloffixedassets
□ Applicable√ N/A
22. Construction in progress
Presentedbyitems
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Construction in progress 30,992,866.46 20,132,004.07
Total 30,992,866.46 20,132,004.07
Other description:
None
Constructioninprogress
(1). Description of Construction in progress
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision
Item Carrying Carrying Provision for
for Book value Book value
amount amount impairment
impairment
Headquarter
17,253,087.13 17,253,087.13 1,385,496.59 1,385,496.59
buildings
Light
sources to 13,739,779.33 13,739,779.33 18,746,507.48 18,746,507.48
be leased
Total 30,992,866.46 30,992,866.46 20,132,004.07 20,132,004.07
177 / 234
2020 Semiannual Report
(2). Changes in significant constructions in progress for the current period
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount
injected
Amount of Including: Interest
Amount as a
Opening Other Closing Construction accumulated Capitalised Capitalization Source of
Item Budget amount Increase transferred to proportion
balance decreases balance progress capitalized interest for rate for the funds
fixed assets of budget
interest the period period (%)
amount
(%)
Headquarter Self-financin
534,635,200.00 1,385,496.59 15,867,590.54 17,253,087.13 3.23
buildings
Light Self-financin
sources to 18,746,507.48 12,538,932.13 17,545,660.28 13,739,779.33
be leased
Total 534,635,200.00 20,132,004.07 28,406,522.67 17,545,660.28 30,992,866.46 / / / /
(3). Provision for impairment losses for construction in progress in the current period
□ Applicable√ N/A
Other description
□ Applicable√ N/A
Materialsforconstruction
□ Applicable√ N/A
23. Bearer biological assets
(1). Bearer biological assets measured at cost
□ Applicable√ N/A
(2). Bearer biological assets measured at fair value
□ Applicable√ N/A
Other description
□ Applicable√ N/A
178 / 234
2020 Semiannual Report
24. Oil and gas assets
□ Applicable√ N/A
25. Userightassets
□ Applicable√ N/A
26. Intangible assets
(1). Description of intangible assets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Land use rights Patents Software Total
I. Cost
1.Opening balance 330,630,000.00 23,247,800.00 10,196,548.78 364,074,348.78
2. Increase 303,152.64 303,152.64
(1) Purchase 303,152.64 303,152.64
(2)Internal
R&D
(3) Increase
due to business
combination
3. Decrease
(1)Disposal
4.Closing balance 330,630,000.00 23,247,800.00 10,499,701.42 364,377,501.42
II. Accumulated
Amortization
1.Opening
16,531,500.06 12,535,490.06 2,676,034.59 31,743,024.71
balance
2. Increase 5,510,500.02 1,162,390.02 992,162.36 7,665,052.40
(1) Provision 5,510,500.02 1,162,390.02 992,162.36 7,665,052.40
3. Decrease
(1)Disposal
4.Closing 22,042,000.08 13,697,880.08 3,668,196.95 39,408,077.11
balance
III. Provision for
impairment
1.Opening
balance
2. Increase
(1) Provision
3. Decrease
(1)Disposal
4.Closing
balance
IV. Book value
1. Closing balance 308,587,999.92 9,549,919.92 6,831,504.47 324,969,424.31
2. Opening balance 314,098,499.94 10,712,309.94 7,520,514.19 332,331,324.07
The proportion of intangible assets generated by the Company's internal research and development to the
balance of intangible assets at the end of the period is 0%.
(2). Landuserightsofwhichcertificatesoftitlehavenotbeenobtained
□ Applicable√ N/A
Other description:
179 / 234
2020 Semiannual Report
□ Applicable√ N/A
27. Development expenditure
□ Applicable√ N/A
28. Goodwill
(1). Originalbookvalueofgoodwill
□ Applicable√ N/A
(2). Impairmentprovisionofgoodwill
□ Applicable√ N/A
(3). Relevant information of groups of assets or combinations of groups of assets where
thegoodwillisrecognized
□ Applicable√ N/A
(4). Specify test procedure, key parameters of impairment of goodwill (such as increase
rate at theprojection period, increase rate at the steadyperiod, profit rate, discount
rate, and projection period upon the estimates of the presented value of future cash
flow)aswellasrecognitionmethodforimpairmentloss
□ Applicable√ N/A
(5). Impactsontestofgoodwillimpairment
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
29. Long-term prepaid expenses
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Opening Other
Item Increase Amortization Closing balance
balance decreases
Renovation 16,908,070.34 606,210.23 3,264,991.68 14,249,288.89
costs
Service fees 844,339.62 97,423.80 746,915.82
Total 16,908,070.34 1,450,549.85 3,362,415.48 14,996,204.71
Other description:
None
30. Deferred tax assets and deferred tax liabilities
(1). Deferredtaxassetsthatarenotoffset
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Deducible Deducible
Deferred tax Deferred tax
temporary temporary
asset asset
difference difference
Provision for impairment
36,194,716.25 5,864,962.15 35,664,470.56 5,836,098.21
of assets
Unrealized profits for
354,219,403.76 88,018,859.65 382,370,535.17 95,185,982.07
inside transactions
Deductible losses 41,067,865.66 10,266,966.41
Provisions 28,973,907.94 5,481,910.24 25,267,517.71 4,667,623.73
Deferred income 16,286,885.41 2,514,556.91 16,475,547.96 2,546,469.56
Share-based payment
12,301,140.62 1,948,412.33 4,987,200.41 787,768.28
expenses
Total 489,043,919.64 114,095,667.69 464,765,271.81 109,023,941.85
180 / 234
2020 Semiannual Report
(2). Deferredtaxassetsthatarenotoffset
□ Applicable√ N/A
(3). Deferred tax assets and deferred tax liabilities that are presented at the net amount
afteroffset
□ Applicable√ N/A
(4). Detailsofunrecognizeddeferredtaxassets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Deducible temporary 43,561,465.48 30,524,539.70
difference
Deductible losses 179,388,652.04 162,566,621.36
Total 222,950,117.52 193,091,161.06
(5). Deductible losses, for which no deferred tax assets are recognized, will expire
in the following years
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Year Closing balance Opening balance Remark
2020 9,243,377.13 9,243,377.13
2021 9,487,530.31 9,487,530.31
2022 11,900,329.00 11,900,329.00
2023 47,115,450.59 47,115,450.59
2024 (Note 1) 84,819,934.33 84,819,934.33
2025 16,822,030.68
Total 179,388,652.04 162,566,621.36 /
Other description:
√ Applicable□ N/A
Note 1: Due to the implementation of the new revenue standard in the current period, the reparable
losses of subsidiaries decreased in 2019; meanwhile, the deferred tax assets corresponding to unrealized
internal gains/losses on the consolidated statements decreased.
31. Othernon‐currentassets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision Provision
Item Carrying Carrying
for Book value for Book value
amount amount
impairment impairment
Prepayment
for purchase
of 6,352,208.65 6,352,208.65 11,420,185.94 11,420,185.94
long-term
assets
Total 6,352,208.65 6,352,208.65 11,420,185.94 11,420,185.94
Other description:
None
181 / 234
2020 Semiannual Report
32. Short-term borrowings
(1). Categories of short-term borrowings
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Guaranteed loans 28,602,306.05 50,000,000.00
Credit loans 54,476,763.36 10,000,000.00
Guaranteed loans and loans 32,199,672.45 16,337,875.56
against collateral
Interest payable 357,286.44 427,443.49
Total 115,636,028.30 76,765,319.05
Description for categories of short-term borrowings:
None
(2). Short-term borrowings overdue but not yet repaid
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
33. Held‐for‐tradingfinancialliabilities
□ Applicable√ N/A
34. Derivativefinancialliabilities
□ Applicable√ N/A
35. Notespayable
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Category Closing balance Opening balance
Bank acceptance bills 126,525,026.22 37,335,841.79
Total 126,525,026.22 37,335,841.79
Total notes payable matured but not paid yet is RMB 0 at the end of the period.
36. Accountspayable
(1). Presented by accounts payable
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Amounts payable for purchase 198,595,546.20 176,624,445.46
Total 198,595,546.20 176,624,445.46
(2). Accountspayablewithsignificantamountsagedmorethan1year
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
37. Receipts in advance
(1). Presented by receipts in advance
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Receipts in advance for goods 173,963,358.36 167,534,200.30
and cinema services
Total 173,963,358.36 167,534,200.30
182 / 234
2020 Semiannual Report
(2). Receiptsinadvancewithsignificantamountsagedmorethan1year
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Reasons for not repaid or
Item Closing balance
carried-forward
Jiangsu Happy Blue Sea Cinema 35,493,335.55 Receipts in advance cinema
Development Co., Ltd. services
Total 35,493,335.55 /
Other description:
□ Applicable√ N/A
38. Contractliabilities
(1).Descriptionofcontractliabilities
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Receipts in advance for goods 19,442,085.20 15,777,305.81
Total 19,442,085.20 15,777,305.81
(2).Amountandreasonsofmajorchangesinthebookvalueduringthereportingperiod
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
39. Employee benefits payable
(1).Presentedbyemployeebenefitspayable
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Opening
Item Increase Decrease Closing balance
balance
1. Short-term benefits 50,334,348.08 123,101,364.00 156,974,389.27 16,461,322.81
2.Post-employment
benefits-defined 240,147.90 1,150,522.82 1,327,354.74 63,315.98
contribution plan
3. Termination benefits 12,436.73 5,021,391.68 5,033,828.41
Total 50,586,932.71 129,273,278.50 163,335,572.42 16,524,638.79
(2).Presentedbyshort‐termemployeebenefits
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Opening
Item Increase Decrease Closing balance
balance
I. Wages or salaries,
bonuses, allowances and 50,091,330.65 110,772,242.86 144,539,237.15 16,324,336.36
subsidies
II. Staff welfare 3,232,087.89 3,232,087.89
III. Social security
60,144.93 2,006,273.77 2,055,913.48 10,505.22
contributions
Including: Medical
46,782.99 1,878,771.60 1,915,871.04 9,683.55
insurance
Work injury
4,733.59 17,286.78 21,198.70 821.67
insurance
Maternity insurance 8,628.35 110,215.39 118,843.74
IV. Housing funds 2,113.00 6,666,826.30 6,665,837.30 3,102.00
183 / 234
2020 Semiannual Report
V.Union running costs and
180,759.50 423,933.18 481,313.45 123,379.23
employee education costs
VI. Short-term paid leaves
VII.Short-term profit
sharing plan
Total 50,334,348.08 123,101,364.00 156,974,389.27 16,461,322.81
(3).Presentedbydefinedcontributionplan
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Opening
Item Increase Decrease Closing balance
balance
1. Basic pensions 232,248.74 1,109,469.14 1,278,506.24 63,211.64
2. Unemployment
7,899.16 41,053.68 48,848.50 104.34
insurance
3.Enterprise annuity
contribution
Total 240,147.90 1,150,522.82 1,327,354.74 63,315.98
Other description:
□ Applicable√ N/A
40. Taxes payable
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Value-added tax (VAT) 246,070.95 776,108.18
Enterprise income tax 6,824,644.08 39,874,754.97
Individual income tax 857,706.75 1,447,882.44
City maintenance and 267,509.52 364,569.72
construction tax
Education surcharges 114,646.93 156,244.17
Local education surcharges 76,431.29 104,162.78
Stamp duty 66,157.95 200,925.53
Total 8,453,167.47 42,924,647.79
Other description:
None
41. Otherpayables
Presentedbyitems
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest payable
Dividends payable 11,279,223.68
Other payables 30,827,391.56 14,364,076.43
Total 42,106,615.24 14,364,076.43
Other description:
None
Interestpayable
□ Applicable√ N/A
184 / 234
2020 Semiannual Report
Dividendspayable
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Dividends on ordinary shares 11,279,223.68
Total 11,279,223.68
Other description, including significant dividend payable with ageing of over 1 year, and the reason of
non-payment shall be disclosed:
None
Otherpayables
(1). Otherpayablespresentedbynature
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Withholding 116,156.76 145,265.79
Deposits/margins 4,187,542.19 2,626,034.93
Withdrawals in advance 17,230,992.61 11,539,286.03
Temporary receipts payable 9,292,700.00 53,489.68
Total 30,827,391.56 14,364,076.43
(2). Otherpayableswithsignificantamountsagedmorethan1year
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
42. Held‐for‐saleliabilities
□ Applicable√ N/A
43. Non-current liabilities due within one year
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest payable 262,155.82 127,055.02
Guaranteed loans and loans 144,507,332.90 64,841,740.00
against collateral
Total 144,769,488.72 64,968,795.02
Other description:
None
44. Other current liabilities
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Taxes to be written off for 1,667,826.54 1,133,137.22
contract liabilities
Total 1,667,826.54 1,133,137.22
Changes in short-term bonds payable:
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
185 / 234
2020 Semiannual Report
45. Long-term borrowings
(1). Categories of long-term borrowings
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Guaranteed loans and loans 79,750,396.00 279,060,423.10
against collateral
Interest payable 142,348.86 554,684.17
Total 79,892,744.86 279,615,107.27
Description for categories of long-term borrowings:
None
Other description, including interest range:
□ Applicable√ N/A
46. Bonds payable
(1). Bondspayable
□ Applicable√ N/A
(2). Changes in bonds payable: (excluding other financial instruments such as
preference shares, perpetual bonds and others classified as financial liabilities)
□ Applicable√ N/A
(3). Descriptionofconvertingtermsandperiodofconvertiblecorporatebonds
□ Applicable√ N/A
(4). Descriptionofotherfinancialinstrumentsclassifiedasfinancialliabilities
Basic information of other financial instruments including outstanding preferred shares and perpetual
bonds at the end of the period
□ Applicable√ N/A
Changes in financial instruments including outstanding preferred shares and perpetual bonds at the end
of the period
□ Applicable√ N/A
Other financial instruments classified as financial liabilities
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
47. Leasingliabilities
□ Applicable√ N/A
48. Long-term accounts payable
Presentedbyitems
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Long-term accounts payable 3,539,750.00 3,488,100.00
Total 3,539,750.00 3,488,100.00
Other description:
None
Long‐termaccountspayable
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
186 / 234
2020 Semiannual Report
Purchase of patent use rights by 3,539,750.00 3,488,100.00
installment
Total 3,539,750.00 3,488,100.00
Other description:
None
Specialpayables
□ Applicable√ N/A
49. Long‐termemployeebenefitspayable
□ Applicable√ N/A
50. Provisions
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Opening balance Closing balance Reason
Products quality 27,072,676.49 33,664,528.96 Expenses for “three
warranty guarantees” services
Total 27,072,676.49 33,664,528.96 /
Other description, including significant assumptions and estimates relative to material provisions:
None
51. Deferred income
Description of Deferred income
√ Applicable□ N/A
Unit:Yuan Currency: RMB
Opening
Item Increase Decrease Closing balance Reason
balance
Government 17,108,361.69 11,083,800.00 11,408,065.49 16,784,096.20
grants
Total 17,108,361.69 11,083,800.00 11,408,065.49 16,784,096.20 /
[Note]: Government grants included in the current profit or loss or offset relevant cost are disclosed in
VII.84 of Section X in details.
Projects relating to government grants:
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount
Amount
Increased recognized
recognized
government in Other Related to
Projects with Opening in other Closing
grants for non-operatin change assets/inco
liabilities balance income for balance
the current g income for s me
the current
period the current
period
period
8K Ultra High Government
Definition grants
Laser Display related to
2,000,000.0 1,982,118.0
Technology 17,881.98 assets
0 2
Engineering
Research
Center
High Government
Performance grants
Resin and related to
18,125.06 18,125.06
Composite income
Materials
Preparation
187 / 234
2020 Semiannual Report
Technique for
Additive
Manufacturing
Key Government
Enterprise grants
Laboratory for 4,820,417.3 4,345,430.1 related to
474,987.14
Laser Display 1 7 income
in Guangdong
Province
Ultra-high Government
Brightness grants
Laser Light related to
Source 2,142,818.8 2,142,818.8 income
Engineering 7 7
Technology
Research
Center
Trichromatic Government
Laser Display grants
Complete related to
7,694,753.4 8,873,800.0 2,241,562.3 14,326,991.
Equipment income
3 0 9 04
Production
Demonstration
Line
Key Government
Technology of grants
Trichromatic related to
Laser Display 2,210,000.0 2,642,247.0 income
432,247.02
Complete 0 2
Equipment
Industrializati
on
17,108,361. 11,083,800. 11,408,065. 16,784,096.
Total
69 00 49 20
Other description:
□ Applicable√ N/A
52. Other non-current liabilities
□ Applicable√ N/A
53. Share capital
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Changes (+, -)
Opening balance Issue Capitalization Closing balance
Bonus
New of capital Others Sub-total
shares
share reserve
Total
451,554,411.00 451,554,411.00
shares
Other description:
None
188 / 234
2020 Semiannual Report
54. Other equity instruments
(1) Basicinformationofotherfinancialinstrumentsincludingoutstandingpreferredshares
andperpetualbondsattheendoftheperiod
□ Applicable√ N/A
(2) Changesinfinancialinstrumentsincludingoutstandingpreferredsharesandperpetual
bondsattheendoftheperiod
□ Applicable√ N/A
Changes of other equity instruments in the current period, reasons for such change and basis for related
accounting treatments:
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
55. Capital reserve
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Opening balance Increase Decrease Closing balance
Capital premium
1,200,466,394.58 1,200,466,394.58
(Share premium)
Other capital
7,475,923.79 16,084,702.84 23,560,626.63
reserve
Total 1,207,942,318.37 16,084,702.84 1,224,027,021.21
Other description, including changes in the current period and reasons for changes:
On October 14, 2019, the Company held the eighteenth session of the first board of directors and
the eighth session of the first board of supervisors, in which resolutions on matters related to the 2019
Restricted Stock Incentive Plan were discussed and approved. As the Company’s implementation of this
incentive plan was approved in the general meeting of shareholders, it was determined that 4.4 million
shares of restricted shares were granted to 169 incentive participants who met the grant conditions at a
grant price of RMB 17.5 per share on the grant date of October 14, 2019. The total expense of
equity-settled share-based payments amounted to RMB 17,576,543.48, in which RMB 16,084,702.84
were recognized in the capital reserve and RMB 1,491,840.64 were charged to the amount attributable to
minority interests.
56. Treasury shares
□ Applicable√ N/A
189 / 234
2020 Semiannual Report
57. Other comprehensive income
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount recognized in the current period
Less: Amount
Less: Amount
previously
previously
included in
included in
Amount other Attributable to Attributable to
Opening other Closing
Item incurred for comprehensive Less: Income owners of the minority
balance comprehensive balance
current period income and tax expense parent company shareholders
income and
before tax transferred to after tax after tax
transferred to
retained
profit or loss
earnings for the
for the period
period
I. Other
comprehensive
income that
cannot be
reclassified
subsequently to
profit or loss
II. Other
comprehensive
income that
3,287,063.85 1,013,815.20 1,013,815.20 25,835.37 4,300,879.05
will be
reclassified to
profit or loss
Including:
Other
comprehensive
income that -135,706.31 -135,706.31 -135,706.31
will be
reclassified to
profit or loss
190 / 234
2020 Semiannual Report
under the
equity method
Exchange
differences on
translation of
financial
3,287,063.85 1,149,521.51 1,149,521.51 25,835.37 4,436,585.36
statements
denominated in
foreign
currencies
Total other
comprehensive 3,287,063.85 1,013,815.20 1,013,815.20 25,835.37 4,300,879.05
income
Other descriptions, including adjustments on transferring effective portion of cash flow hedges to amount upon initial recognition of the hedged item:
The other comprehensive income that will be reclassified to profit or loss under the equity method is the difference on translation of foreign currency financial
statements on the basis of long-term equity investments of the Hong Kong subsidiary accounted for using the equity method during the period.
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58. Special reserve
□ Applicable√ N/A
59. Surplus reserve
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Opening Increase Decrease Closing balance
balance
Statutory surplus
21,522,683.40 21,522,683.40
reserve
Surplus reserve
recovered through
business combination 1,277,540.73 1,277,540.73
involving entities
under common control
Total 22,800,224.13 22,800,224.13
Surplus reserve description, including changes in the current period and reasons for changes:
None
60. Retained profits
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Current period Last year
Retained profits at the end of prior
288,975,820.29 112,623,054.78
period before adjustment
Total adjusted retained profits at the
beginning of the period (Add:+; Less: 1,278,734.88
-)
Retained profits at the beginning of the
290,254,555.17 112,623,054.78
period after adjustment
Add: Net profit attributable to owners
14,327,442.96 186,457,276.71
of the Parent Company for the period
Less: Appropriation to statutory surplus
10,104,511.20
reserve
Appropriation to discretionary
surplus reserve
Appropriation to general risk
reserve
Declaration of dividends on
33,866,580.83
ordinary shares
Conversion of ordinary shares'
dividends into share capital
Retained profits at the end of the period 270,715,417.30 288,975,820.29
Details of adjustments to retained profits at the beginning of the period:
1) As a result of the retrospective adjustment of the Accounting Standards for Business Enterprises and
related new regulations, retained profits at the beginning of the period were affected by RMB
1,278,734.88.
2. Retained profits at the beginning of the period were affected by RMB 0 due to changes in accounting
policies.
3. Retained profits at the beginning of the period were affected by RMB 0 due to the correction of
significant accounting errors.
4. Retained profits at the beginning of the period were affected by RMB 0 due to changes in the scope of
consolidation resulting from business combination involving entities under common control.
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5. Retained profits at the beginning of the period were affected by RMB 0 in total due to other
adjustments.
61. Operatingincomeandoperatingcosts
(1).Descriptionofoperatingincomeandoperatingcosts
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount for the current period Amount for the prior period
Item
Revenue Cost Revenue Cost
Main business 716,025,207.34 529,787,789.94 853,356,964.84 511,757,903.12
Total 716,025,207.34 529,787,789.94 853,356,964.84 511,757,903.12
(2).Descriptionofincomesfromcontracts
□ Applicable√ N/A
(3).Descriptionofperformanceobligations
□ Applicable√ N/A
(4).Descriptionofallocationtoremainingperformanceobligations
□ Applicable√ N/A
Other description:
None
62. Taxes and levies
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current period Amount for the prior period
City maintenance and 854,951.57 1,975,668.74
construction tax
Education surcharges 378,217.31 854,233.24
Local education surcharges 248,054.96 561,364.18
Others 848,486.72 945,684.82
Total 2,329,710.56 4,336,950.98
Other description:
None
63. Sales expenses
√ Applicable□ N/A
Unit:Yuan Currency:RMB
Amount for the current Amount for the prior
Item
period period
Employee benefits 23,380,108.03 25,006,899.21
Business travel expenses 650,816.90 2,972,256.98
Business entertainment expenses 344,196.59 1,217,757.65
Marketing fees 11,258,761.35 15,155,417.35
Advertising costs and business publicity 2,025,841.22
3,340,057.79
expenses
After-sale repair expenses 7,335,750.91 4,797,990.08
Other expenses 5,838,419.50 8,095,110.78
Total 50,833,894.50 60,585,489.84
Other description:
None
64. Administrationexpenses
√ Applicable□ N/A
Unit: Yuan Currency: RMB
193 / 234
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Item Amount for the current Amount for the prior
period period
Employee benefits 27,739,712.49 33,954,968.02
Rent expense 3,676,664.67 8,124,328.18
Service fees 17,562,845.34 2,764,441.73
Depreciation and amortization fees 8,228,493.80 7,371,168.39
Share-based payment expenses 17,576,543.47
Other expenses 3,029,397.32 6,562,831.90
Total 77,813,657.09 58,777,738.22
Other description:
None
65. R&Dexpenses
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Item Amount for the current Amount for the prior
period period
Employee benefits 54,917,336.45 52,557,555.42
Material consumption expenses 9,045,544.84 10,978,567.36
Rent expense 4,614,423.44 5,519,043.68
Service fees 2,313,102.75 6,105,287.85
Depreciation and amortization fees 6,299,814.11 4,291,396.67
Testing expenses 1,963,709.91 2,564,033.45
Patent fees 4,325,481.23 4,412,009.53
Other expenses 3,816,038.02 2,881,595.84
Total 87,295,450.75 89,309,489.80
Other description:
None
66. Financialexpenses
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current Amount for the prior
period period
Interest expenses 11,612,825.87 18,267,758.92
Less: Interest income -4,618,971.33 -2,986,857.28
Exchange profit or loss 189,748.99 1,440,004.41
Bank service charges 854,087.51 636,733.64
Total 8,037,691.04 17,357,639.69
Other description:
None
67. Otherincome
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current Amount for the prior
period period
Government grants related to assets 17,881.98 2,000,000.00
Government grants related to income 31,357,361.04 15,417,109.11
Additional deduction of input VAT 1,546,791.95
Total 32,922,034.97 17,417,109.11
Other description:
Government grants recognized in other income in the current period are disclosed in VII.84 of Section X
in details.
68. Investment income
√ Applicable□ N/A
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Unit: Yuan Currency: RMB
Amount for the current
Item Amount for the prior period
period
Long-term equity investment accounted
901,894.80 -3,460,616.55
for using the equity method
Investment income from disposal of
financial assets at fair value through 10,824,793.71
profit or loss
Total 11,726,688.51 -3,460,616.55
Other description:
None
69. Incomefromnetexposurehedges
□ Applicable√ N/A
70. Gains from changes in fair values
□ Applicable√ N/A
71. Lossesofcreditimpairment
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Item Amount for the current period Amount for the prior period
Bad debt losses 2,170,106.96 -761,760.88
Total 2,170,106.96 -761,760.88
Other description:
None
72. Impairment losses of assets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount for the current
Item Amount for the prior period
period
2. Losses of decline in value of
inventories and losses of contract -12,109,681.09 -1,379,296.10
performance cost
Total -12,109,681.09 -1,379,296.10
Other description:
None
73. Gainsondisposalofassets
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current period Amount for the prior period
Gains on disposal of assets 149,620.91
Total 149,620.91
Other description:
□ Applicable√ N/A
74. Non-operating income
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount included in
Amount for the current Amount for the prior
Item non-recurring profit or
period period
loss for the period
Gains from damage
and retirement of 8,412.77 8,412.77
non-current assets
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Amounts not required
4,200.00 818,292.07 4,200.00
for payment
Indemnity 252,001.08 1,500,000.00 252,001.08
Others 6,001.63 11,883.77 6,001.63
Total 270,615.48 2,330,175.84 270,615.48
Government grants included in profit or loss for the period
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
75. Non-operating expenses
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount included in
Amount for the current Amount for the prior
Item non-recurring profit or
period period
loss for the period
External donations 563,138.63 563,138.63
Losses from damage
and retirement of 140,563.32 816,871.91 140,563.32
non-current assets
Penalties and
1,000.00 214,462.77 1,000.00
overdue fines
Others 36,000.00 36,000.00
Total 740,701.95 1,031,334.68 740,701.95
Other description:
None
76. Income tax expense
(1) Statementofincometaxexpense
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current period Amount for the prior period
Income tax expense in the current 7,761,319.12 36,244,557.63
period
Deferred income tax expenses -5,067,377.70 -3,104,343.89
Total 2,693,941.42 33,140,213.74
(2) Reconciliationofincometaxexpensestotheaccountingprofit
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current period
Total profit -5,684,302.75
Income tax expense calculated based on -852,645.41
statutory/applicable tax rate
Effect of different tax rates of subsidiaries -4,137,384.06
operating in other jurisdictions
Effect of adjustment on income tax for the period -295,268.25
Effect of non-taxable income -470,704.61
Effect of non-deductible cost, expense and loss 1,808,156.04
Effect of utilizing deductible loss not recognized
for deferred tax assets for prior period
Effect of deductible temporary difference or 6,641,787.71
deductible loss not recognized for deferred tax
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2020 Semiannual Report
assets for the current period
Income tax expense 2,693,941.42
Other description:
□ Applicable√ N/A
77. Other comprehensive income
√ Applicable□ N/A
Other comprehensive income net of tax has been disclosed in VII.57 of Section X in details.
78. Items in cash flow statement
(1). Othercashreceiptsrelatingtooperatingactivities
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current period Amount for the prior period
Government grants 29,527,428.69 18,030,440.03
Non-operating income 258,002.71 1,513,303.93
Interest income 4,618,971.33 2,986,857.28
Other monetary funds-margins 20,402,679.86 24,642,060.94
Bank deposits-frozen funds due to
litigation 10,000,000.00
Receivables and payables 16,463,315.13 5,699,366.68
Total 81,270,397.72 52,872,028.86
Description of other cash receipts relating to operating activities:
None
(2). Othercashpaymentsrelatingtooperatingactivities
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current period Amount for the prior period
Sales expenses, administrative and 67,811,667.43 84,083,929.16
R&D expenses paid in cash
Financial expenses paid in cash 854,087.51 636,733.64
Non-operating expenses 600,138.63 214,462.77
Other monetary funds-margins 27,484,998.92 18,134,123.73
Receivables and payables 3,395,213.71 5,247,143.62
Total 100,146,106.20 108,316,392.92
Description of other cash payments relating to operating activities:
None
(3). Other cash receipts relating to investing activities
□ Applicable√ N/A
(4). Other cash payments relating to operating activities
□ Applicable√ N/A
(5). Othercashreceiptsrelatingtofinancingactivities
□ Applicable√ N/A
(6). Other cash payments relating to financing activities
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Amount for the current period Amount for the prior period
Share-based payment expenses 22,587.36
Issue expenses 3,570,350.00
Total 22,587.36 3,570,350.00
Description of other cash payments relating to financing activities:
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None
79. Supplementaryinformationtothecashflowstatement
(1) Supplementaryinformationtothecashflowstatement
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Supplementary information 2019 2018
1. Reconciliation of net profit to
cash flow from operating activities:
Net profit -8,378,244.17 91,205,816.19
Add: Provision for impairment of
12,109,681.09 761,760.88
assets
Losses of credit impairment -2,170,106.96 1,379,296.10
Depreciation of fixed assets, depletion
of oil and gas assets, depreciation of 47,418,126.65 37,653,612.42
bearer biological assets
Amortization of use right assets
Amortization of intangible assets 7,660,838.99 7,226,875.32
Amortization of long-term prepaid 3,409,529.26
1,346,577.20
expenses
Losses on disposal of fixed assets,
intangible assets and other long-term -149,620.91 816,871.91
assets (gains are indicated by “－”)
Losses on retirement of fixed assets
132,150.55
(gains are indicated by “－”)
Losses on changes in fair values
(gains are indicated by “－”)
Financial expenses (income is 11,802,574.86
19,707,763.33
indicated by “－”)
Investment losses (income is indicated -11,726,688.51
3,460,616.55
by “－”)
Decrease in deferred tax assets -5,071,725.84
-3,104,697.63
(increase is indicated by “-”)
Increase in deferred tax liabilities
(decrease is indicated by “-”)
Decrease in inventories (increase is -142,500,844.11
-91,143,123.90
indicated by “－”)
Decrease in receivables from 67,912,872.37
operating activities (increase is -22,249,801.57
indicated by “－”)
Increase in payables from operating 64,980,975.06
activities (decrease is indicated by -61,604,980.32
“－”)
Others 17,576,543.47
Net cash flow from operating 63,006,061.80
-14,543,413.52
activities
2. Significant investing and
financing activities that do not
involve cash receipts and payments:
Conversion of debt into capital
Convertible corporate bonds due
within one year
Fixed assets acquired under finance
leases
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3. Net changes in cash and cash
equivalents:
Closing balance of cash 686,296,049.61 517,744,659.82
Less: Opening balance of cash 829,789,487.86 472,508,550.40
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash
-143,493,438.25 45,236,109.42
equivalents
(2) Netcashpaidtoacquiresubsidiariesforthecurrentperiod
□ Applicable√ N/A
(3) Netcashreceiptsfromdisposalofsubsidiariesforthecurrentperiod
□ Applicable√ N/A
(4) Compositionofcashandcashequivalents
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
I. Cash 686,296,049.61 829,789,487.86
Including: Cash on hand 3,189.12 3,348.57
Bank deposit that can be paid at 679,310,868.31
827,470,990.73
any time
Other monetary funds that can 6,981,992.18
2,315,148.56
be paid at any time
Deposits in the Central Bank
that can be used for payments
Deposits made with other banks
Placements with banks
II. Cash equivalents
Including: Investments in debt
securities due within three months
III. Closing balance of cash and cash
686,296,049.61 829,789,487.86
equivalents
Including: Restricted cash and cash
equivalents of the Parent Company
or subsidiaries within the Group
Other description:
√ Applicable□ N/A
In the cash flow statement, the following are excluded from the scope of cash equivalents: the
margins of RMB 23,151,615.78 under restriction, the fund of RMB 20,000,000.00 frozen due to
litigation.
80. Notes to items in the statement of changes in owners' equity
Describe matters such as the names and the adjustment amounts of the items included in “others” in
respect of adjustments to the closing balances of the prior year:
□ Applicable√ N/A
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81. Assets with limited ownership or use right
√ Applicable□ N/A
Unit:Yuan Currency:RMB
Item Closing balance of carrying Reason
amount
Cash and bank balances 23,151,615.78 Margins
Bank deposits 20,000,000.00 Frozen due to litigation
Total 43,151,615.78 /
Other description:
None
82. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable□ N/A
Unit:Yuan
Closing balance of
Closing balance of
Item Exchange rate RMB equivalent
foreign currency
balance
Cash and bank balances - - 114,063,299.33
Including: USD 15,939,775.69 7.0795 112,845,641.99
VND 128,710,543.00 0.00030595 39,378.47
HKD 1,286,444.37 0.9134 1,175,089.75
GBP 365.96 8.7144 3,189.12
Accounts receivable - - 24,631,615.01
Including: USD 3,479,287.38 7.0795 24,631,615.01
Short-term borrowings - - 12,281,152.08
Including: USD 1,734,748.51 7.0795 12,281,152.08
Accounts payable - - 60,890,264.62
Including: USD 8,569,726.64 7.0795 60,669,379.75
EUR 27,745.87 7.9610 220,884.87
Other receivables - - 1,451,045.43
Including: USD 37,674.71 7.0795 266,718.11
VND 110,630,000.00 0.00030595 33,846.80
HKD 1,259,503.11 0.9134 1,150,480.52
Other payables - - 5,846,302.51
Including: USD 707,891.14 7.0795 5,011,515.30
EUR 64,845.30 7.9610 516,233.44
HKD 348,740.77 0.9134 318,553.77
Other description:
None
(2). Descriptionofoverseasoperatingentities,includingsignificantoverseasoperatingentities,of
whichthemajoroperationplace,functionalcurrencyandchoosingbasisaswellasthereason
forchangeoffunctionalcurrencyshouldbedisclosed
□ Applicable√ N/A
83. Hedge
□ Applicable√ N/A
84. Governmentgrants
1. Basicgovernmentgrants
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Category Amount Item presented Amount recognized in
200 / 234
2020 Semiannual Report
current profit or loss
Government grants related to assets Deferred
17,881.98
income
Government grants related to income
and used for compensation of the Deferred
11,083,800.00 11,390,183.51
Company’s relevant costs or losses in income
subsequent periods
Government grants related to income
and used for compensation of the
19,967,177.53 Other income 19,967,177.53
Company’s relevant costs or losses that
have been incurred
Note: the amount refers to government grants actually received in the current period. The amount
recognized in the profit or loss for the current period include the amount of government grants that is
received in previous periods and recognized in the profit or loss for the current period.
2. Refundofgovernmentgrants
□ Applicable√ N/A
Other description
None
85. Others
□ Applicable√ N/A
VIII. Changes in scope of consolidation
1. Business combination not involving enterprises under common control
□ Applicable√ N/A
2. Business combination involving entities under common control
□ Applicable√ N/A
3. Counter purchase
□ Applicable√ N/A
4. Disposal of subsidiaries
Single disposal of investments in subsidiaries, i.e. the loss of control
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
Disposal of investment in a subsidiary through multiple transactions by steps with loss of control over
the subsidiary in the current period
□ Applicable□ N/A
Package deal
□ Applicable√ N/A
Non-package deal
□ Applicable√ N/A
5. Changesinscopeofconsolidationforotherreasons
Description of changes in the scope of consolidation for other reasons (e.g., new subsidiary
establishment and subsidiary liquidation, etc.) and the relevant information:
√ Applicable□ N/A
1. Increased scope of combination
Company Time point of Capital
Method of Proportion of
obtaining contribution
obtaining equity contribution
equity (RMB)
Shenzhen Appotronics
Establishment 2020-2-13 3,000,000.00 100.00%
Display Device Co., Ltd.
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WEMAX LLC Establishment 2020-3-17 / /
JOVEAI ASIA
Establishment 2020-4-24 709,310.00 64.29%
COMPANY LIMITED
6. Others
□ Applicable√ N/A
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2020 Semiannual Report
IX. Equity in other entities
1. Equityinsubsidiaries
(1). Compositionofenterprisegroup
√ Applicable□ N/A
Princip Proportion of
al Registr shareholding (%) Acquisiti
Subsidiary
operati ation Business nature on
Name
on place Direct Indirect method
place
Appotronics Timewaying Sales; technology
(Beijing) Technology Co., Beijing Beijing development, 90.00
Ltd. consulting
Technology
Shenzhen Appotronics development and
Shenzh Shenzh
Software Technology Co., sales of computer 100.00
en en
Ltd. software and
hardware
Technology
Beijing Orient
promotion; computer
Appotronics Technology Beijing Beijing 59.00
systems, application
Co., Ltd.
software services
Development,
Shenzhen Appotronics
Shenzh Shenzh consultation and Establish
Xiaoming Technology 100.00
en en transfer of laser ment
Co., Ltd.
display technology
Fengmi (Beijing) Technology and Establish
Beijing Beijing 55.00
Technology Co., Ltd. software development ment
R&D and sales of Business
laser display products combinat
ion
Shenzhen Appotronics
Shenzh Shenzh involvin
Laser Display Technology 100.00
en en g entities
Co., Ltd.
under
common
control
Research and Business
development, combinat
production, sales and ion
CINEAPPO Laser
service of laser involvin
Cinema Technology Beijing Beijing 24.84 30.36
cinema projection g entities
(Beijing) Co., Ltd.
equipment under
common
control
Qingda Appotronics Information
Xiame Establish
(Xiamen) Technology Beijing technology consulting 51.00
n ment
Co., Ltd. services
Software
Shenzhen Appotronics development for
Shenzh Shenzh Establish
Laser Technology Co., semiconductor 100.00
en en ment
Ltd. optoelectronic
devices
Software
Shenzhen Appotronics
Shenzh Shenzh development related Establish
Home Line Technology 100.00
en en to semiconductor ment
Co., Ltd.
optoelectronic
203 / 234
2020 Semiannual Report
products
Information
Appotronics Hong Kong Hong Hong Establish
technology consulting 100.00
Limited Kong Kong ment
services
R&D, manufacture Business
and sales of combinat
semiconductor ion
optoelectronic involvin
Appotronics USA, Inc. USA USA 100.00
products g entities
under
common
control
Fabulus Technology Hong Hong Hong R&D, manufacture Establish
100.00
Kong Limited Kong Kong and sales of screens ment
Cayma Cayma No specific business
Establish
JoveAI Limited n n conducted 64.29
ment
Island Island
R&D of laser display Establish
JoveAI Innovation, Inc. USA USA 64.29
software system ment
Technical research
and development of
Appotronics Technology Changz Changz Establish
projection equipment, 100.00
(Changzhou) Co., Ltd. hou hou ment
screen and electronic
computer.
FORMOVIE No specific business Establish
USA USA 55.00
TECHNOLOGY INC conducted ment
Shenzhen Appotronics Shenzh Shenzh No specific business Establish
100.00
Display Device Co., Ltd. en en conducted ment
Sale of laser Establish
WEMAX LLC USA USA 100.00
equipment ment
Technical research
and development of
JOVEAI ASIA Vietna Vietna Establish
projection equipment, 64.29
COMPANY LIMITED m m ment
screen and electronic
computer.
Description of the difference between the proportion of shareholding and the proportion of voting rights
in a subsidiary:
None
Basis for holding half of the voting rights or below but still controlling the investee, and holding over
half voting right but having no control over the investee:
None
Basis for controls over significant structured entities included in consolidation scope:
None
Basis to determine the company acts as the agent or the principal:
None
Other description:
None
(2). Significant non-wholly subsidiaries
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Profit or loss Dividends declared
Shareholding by
attributable to for distribution to Closing balance
minority
Subsidiaries minority minority of minority
shareholders
shareholders for the shareholders in the interests
Percentage (%)
current period current period
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2020 Semiannual Report
Fengmi
(Beijing)
45.00 -4,688,356.17 -17,583,172.99
Technology
Co., Ltd.
CINEAPPO
Laser Cinema
Technology 44.80 -15,518,003.49 152,467,740.13
(Beijing) Co.,
Ltd.
Description of the difference between the proportion of shareholding by minority shareholders and their
proportion of voting rights in a subsidiary:
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
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2020 Semiannual Report
(3). Significant financial information of significant non-wholly subsidiaries
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Subsidiaries Current Non-current Total Current Non-current Total Current Non-current Current Non-current Total
Total assets
assets assets assets liabilities Liabilities Liabilities assets assets liabilities Liabilities Liabilities
Fengmi 421,067,008.90 10,764,967.98 431,831,976.88 467,579,146.78 3,326,547.85 470,905,694.63 252,558,076.54 7,968,567.46 260,526,644.00 288,201,120.45 2,437,972.51 290,639,092.96
CINEAPPO 147,816,334.88 747,344,068.24 895,160,403.12 462,864,399.74 91,966,226.31 554,830,626.05 255,777,103.29 789,861,645.43 1,045,638,748.72 383,085,231.40 289,141,441.68 672,226,673.08
Amount for the current period Amount for the prior period
Total Cash flow from Total Cash flow from
Subsidiaries
Operating income Net profit comprehensive operating Operating income Net profit comprehensive operating
income activities income activities
Fengmi 396,335,864.51 -10,418,569.26 -10,418,569.26 83,212,791.30 327,846,132.62 -16,225,067.89 -16,225,067.89 -5,554,506.48
CINEAPPO 78,528,870.68 -34,638,400.65 -34,638,400.65 22,787,991.80 267,701,240.20 77,574,624.13 77,574,624.13 41,227,104.36
Other description: Due to the implementation of the new revenue standard, Fengmi (Beijing) Technology Co., Ltd. adjusted the opening balances on the balance
sheet on a retrospective basis without adjusting comparable data.
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(4). Significant limitations on use of the group assets and paying off the group debts:
□ Applicable√ N/A
(5). Financial or other support provided to structured entities included in consolidated
financial statements:
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
2. Changes of shares of owners' equity in subsidiaries but continue to remain control over
transactions of subsidiaries
□ Applicable√ N/A
3. Equity in joint ventures or associates
√ Applicable□ N/A
(1). Significant associates or joint ventures
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Proportion of Accounting
shareholding (%) treatment
Name of Principal
Registration method for
associates or operation Business nature
place investments in
joint ventures place Direct Indirect
joint ventures
and associates
R&D, production,
GDC Asia and British and sale of digital Accounting for
Technology North Virgin cinema servers and 36.00 under equity
Limited (BVI) America Islands cinema management method
system
Description of variances between shareholding ratio and the ratio of voting rights in joint ventures or
associates:
None
Basis that the Company owns less than 20% voting rights but may exercise major impact, or that the
Company owns 20% or over voting rights but does not has major impact:
None
(2). Major financial information of significant joint ventures
□ Applicable√ N/A
(3). Major financial information of significant associates
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance/amount of this Opening balance/amount
period of last period
GDC GDC (note 2)
Current assets 586,292,470.81 395,470,018.62
Non-current assets 249,809,120.86 435,956,015.86
Total assets 836,101,591.67 831,426,034.48
Current liabilities 629,982,428.50 365,525,438.62
Non-current Liabilities 19,357,179.51 283,701,219.95
Total Liabilities 649,339,608.01 649,226,658.57
Minority interests
Interests attributable to shareholders of 186,761,983.66 182,199,375.91
the parent company
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Share of net assets calculated by 67,234,314.12 65,591,775.33
ownership percentage
Adjustment 62,228,269.46 62,182,045.29
--Goodwill 62,182,045.29 62,182,045.29
--Unrealized profits for inside
transactions
--Others 46,224.17
Carrying amount of investment of 129,462,583.58 127,773,820.62
associate
Fair values of equity investments in
associates having publicly quoted prices
Operating income 44,845,312.70
Net profit 2,142,306.37
Net profit of discontinued operations
Other comprehensive income 2,565,157.07
Total comprehensive income 4,707,463.44
Dividends received from associates in the
current year
Other description
Note 1: “Others” in the adjustment matters refer to the portion not belonging to the Company in the
exchange differences for converting foreign currency-denominated statements of associates into
RMB-denominated statements.
Note 2: The opening balance in respect of GDC is the recent unaudited data as of the recognition date
(March 31, 2020), and the data on gains/losses from GDC during the period is the cumulated data from
April to June.
(4). Summary financial information of insignificant joint ventures and associates
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance/2019 Opening balance / 2018
Associates:
Total carrying amount of 138,692,410.29 139,534,371.94
investments
Total amounts calculated based on shareholding proportions
Opening book value 139,534,371.94
--Net profit 217,201.22 -3,458,306.31
--Other comprehensive income -1,059,162.87 -2,035,318.38
--Total comprehensive income -841,961.65 -5,493,624.69
Other description
1、 The amount of other comprehensive income arise from the exchange difference on the translation
of foreign currency statements due to different functional currencies in use by the investee and the
investor enterprise, and the exchange difference on the translation of foreign currency statements of the
investee.
2、 Basic information of associates:
Accounting
Principal Proportion of shareholding (%)
treatment
Registration Business method for
Associates
operation place nature investments
Direct Indirect
place in joint
ventures
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2020 Semiannual Report
and
associates
Accounting
Sale of
Cinionic Europe and for under
Hong Kong cinema 20
Limited USA equity
projectors
method
(5). Descriptions of significant limitations over the ability of joint ventures or
associates to transfer funds to the Company
□ Applicable√ N/A
(6). Excessive loss of joint venture or associates
□ Applicable√ N/A
(7). Unrecognizedcommitmentrelatingtoinvestmentsinjointventures
□ Applicable√ N/A
(8). Contingentliabilitiesrelatingtoinvestmentsinjointventuresorassociates
□ Applicable√ N/A
4. Significant joint operations
□ Applicable√ N/A
5. Interests in structured entities that are not included in consolidated financial
statements
Description of structured entities that are not included in consolidated financial statements:
□ Applicable√ N/A
6. Others
□ Applicable√ N/A
X. Risks associated with financial instruments
√ Applicable□ N/A
The Company's risk management objectives are to achieve a proper balance between
risks and yield, minimize the adverse impacts of risks on the Company's operation
performance, and maximize the benefits of the shareholders and other stakeholders. Based
on these risk management objectives, the Company's basic risk management strategy is to
identify and analyze its exposure to various risks, establish an appropriate maximum
tolerance to risk, implement risk management, and monitor regularly and effectively these
exposures to ensure the risks are monitored at a certain level.
The Company is exposed to various risks associated with financial instruments in its
daily routines, primarily including credit risk, liquidity risk and market risk. The
management has reviewed and approved policies to manage these risks, summarized as
below.
(I) Credit risk
Credit risk refers to the risk that a party of the financial instrument will default on its
obligations resulting in financial loss to the counterparty.
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1. Management of credit risk
(1) Evaluation of credit risk
The Company assesses at each balance sheet date whether the credit risk of the
underlying financial instruments has increased significantly since initial recognition. In
determining whether the credit risk has increased significantly since initial recognition, the
Company considers reasonable and supportable information that is available without undue
cost or effort, including quantitative and qualitative analysis based on historical data,
ranking of external credit risks and forward-looking information. The Company compares
the risk of a default occurring on a financial instrument as at the balance sheet date with the
risk of a default occurring on the financial instrument as at the date of initial recognition
based on individual financial instrument or a group of financial instruments with similar
credit risk characteristic, to determine the change of the risk of a default occurring on a
financial instrument over the expected life.
The Company considers the credit risk of financial instruments has increased
significantly when one or more of the following quantitative and qualitative criteria are
met:
1) The quantitative criterion primarily refers to a certain percentage of increase in the
probability of default over the remaining life of the financial instruments as of the balance
sheet date when comparing with that at initial recognition of the financial instruments;
2) The qualitative criteria includes, inter alia, adverse material changes in business or
financial conditions that are expected to cause a significant decrease in the debtor's ability
to meet its debt obligations, and an actual or expected significant adverse change in the
technological, market, economic, or legal environment of the debtor that results in a
significant decrease in the debtor’s ability to meet its debt obligations.
(2) Definition of defaulted or credit-impaired assets
A financial asset is defined as defaulted when the financial instrument meets one or
more conditions stated as below, and the criteria of defining defaulted asset is consistent
with that of defining credit-impaired asset:
1) significant financial difficulty of the debtor;
2) a breach of contract terms with binding force by the debtor;
3) it is becoming probable that the debtor will enter bankruptcy or other financial
reorganization;
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4) the creditor of the debtor, for economic or contractual reasons relating to the
debtor’s financial difficulty, has granted to the debtor a concession(s) that the creditor
would not otherwise consider.
2. Measurement of ECL
Key parameters to measure ECL include the probability of default, loss given default
and the exposure at default. The Company established models of the probability of default,
loss given default and the exposure at default on the basis of qualitative analysis on
historical statistical data (such as counterparty ranking, guarantee methods, collateral
category, and repayment way) and forward-looking information.
3. Details of reconciliation of the opening balance and the closing balance of provision
for impairment of financial instruments can refer to the description in VII 4, 5 and 8 of
Section X.
4. Credit risk exposure and credit risk concentration
The Company's credit risk is primarily from cash and bank balances and receivables. In
order to control the risks associated with aforementioned items, the Company has taken the
following measures.
(1) Cash and bank balances
The credit risk of the Company is limited because the Company has deposited bank
deposits and other monetary funds in banks with high credit ratings.
(2) Receivables
The Company regularly evaluates the creditworthiness of its customers with deals on
credit, and selects to deal with approved and creditworthy customers subject to the results
of the credit assessment with monitoring the balance of its receivables, so as to ensure that
the Company is not exposed to significant risk of bad debt.
No collaterals are required since the Company only deals with third parties that are
approved and creditworthy. The concentrated credit risks are managed by customers. As
June 30, 2020, the Company faced certain credit concentration risks 74.40% (June 30, 2020)
of the Company's accounts receivable comes from top 5 customers. The Company held no
collateral or other credit ranking measures for the balance of accounts receivable.
The maximum exposure to the Company is the carrying amount of each financial asset
in the balance sheet.
(II) Liquidity risk
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Liquidity risk refers to the risk that the Company is in shortage of funds in performing
obligations that are settled by delivering cash or another financial asset. Liquidity risk may
arise from an inability to sell a financial asset at fair value as soon as possible, a
counterparty's inability to pay its contractual liabilities, the accelerated maturity of
liabilities, or an inability to generate expected cash flows.
In order to control this risk, the Company balances the continuity and flexibility of
financing by using various financing measures such as notes settlement and bank loans
comprehensively and adopting both long-term and short-term financing methods to
optimize the financing structure. The Company has received credit facilities from a number
of commercial banks to satisfy its working capital requirements and capital expenditures.
Financial liabilities classified by remaining maturity dates
Closing balance
Item Undiscounted
Book value Within 1 year 1-3 years Over 3 years
contract amount
Bank borrowings 339,536,470.76 351,355,411.88 269,576,858.96 81,778,552.92
Notes payable 126,525,026.22 126,525,026.22 126,525,026.22
Accounts payable 198,595,546.20 198,595,546.20 198,595,546.20
Other payables 42,106,615.24 42,106,615.24 42,106,615.24
Long-term
3,539,750.00 3,539,750.00 3,539,750.00
accounts payable
Sub-total 710,303,408.42 722,122,349.54 640,343,796.62 81,778,552.92
(Continued to above table)
Opening balance
Item Undiscounted Over 3
Book value Within 1 year 1-3 years
contract amount years
Bank borrowings 421,349,221.34 444,275,984.40 159,065,657.15 285,210,327.25
Notes payable 37,335,841.79 37,335,841.79 37,335,841.79
Accounts payable 176,624,445.46 176,624,445.46 176,624,445.46
Other payables 14,364,076.43 14,364,076.43 14,364,076.43
Long-term
3,488,100.00 3,488,100.00 3,488,100.00
accounts payable
Sub-total 653,161,685.02 676,088,448.08 390,878,120.83 285,210,327.25
(III) Market risk
Market risk refers to the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices. Market risk mainly includes
interest rate risk and currency risk.
1. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. Interest rate risk is the
risk that the fair value or future cash flows of a financial instrument will fluctuate because
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2020 Semiannual Report
of changes in market interest rates. The Company is exposed to the risk of fair value
interest rate due to financial instruments with a fixed interest rate and to the risk of cash
value interest rate due to financial instruments with a floating interest rate. The Company
determines the proportion between the fixed-rate financial instruments and the floating-rate
financial instruments based on market conditions, and maintains appropriate portfolios of
financial instruments through regular review and monitoring. The cash flow interest rate
risk exposed to the Company relates primarily to the Company’s floating-rate
interest-bearing bank borrowings.
As of June 30, 2020, the Company held bank loans of RMB 339,536,470.76
(December 31, 2019: RMB 420,240,038.66 Yuan) at floating rates. On the assumption that
other variables remain unchanged, a change in the interest rate by 50 base points will not
cause significant impact on the total profits and shareholders’ equity of the Company.
2. Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange rates. The Company's
exposure to the currency risk is primarily associated with the Company’s monetary assets
and liabilities dominated in foreign currencies. The Company's exposure to the currency
risk is primarily associated with the Company’s monetary assets and liabilities dominated
in foreign currencies. If the monetary assets and liabilities dominated in foreign currencies
are imbalanced in a short time, the Company will purchase and sell foreign currencies at
the market exchange rate to keep the net risk exposure acceptable.
The closing balance of the Company’s monetary assets and liabilities dominated in
foreign currencies are disclosed in VII.82 of Section X in details.
XI. Disclosure of fair value
1. Theclosingbalanceofthefairvalueofassetsandliabilitiesmeasuredatfairvalue
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance of fair value
Item
Level 1 Level 2 Level 3 Total
I. Continuous fair value
measurement
(I) Held-for-trading 495,000,000.00 495,000,000.00
financial assets
1. Financial assets at fair 495,000,000.00 495,000,000.00
value through profit or loss
(1) Investment in debt
instrument
(2) Investment in equity
instrument
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(3)Derivative financial
assets
(4) Structural deposits 495,000,000.00 495,000,000.00
2. Designated as financial
assets at fair value through
profit or loss
(1) Investment in debt
instrument
(2) Investment in equity
instrument
(II) Other debt investments
(III) Other equity 11,975,419.38 11,975,419.38
instrument investments
(IV) Investment properties
1. Land use right for
leasing purpose
2. Buildings leased
3. Land use right held for
the purpose of transfer
after value appreciation
(V) Biological assets
1. Consumable biological
assets
2. Bearer biological assets
Total assets continuously 506,975,419.38 506,975,419.38
measured at fair value
(VI) Held-for-trading
financial liabilities
1. Financial liabilities at
fair value through profit or
loss
Including: Held-for-trading
bonds issued
Derivative financial
liabilities
Others
2. Designated as financial
liabilities at fair value
through profit or loss
Total liabilities
continuously measured at
fair value
II. Non-continuous fair
value measurement
(I) Held-for-sale assets
Total assets that are not
continuously measured at
fair value
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Total liabilities that are
not continuously
measured at fair value
2. Basis for determining the market price of continuous and non-continuous level 1 fair
value measurement items
□ Applicable√ N/A
3. Valuation techniques and qualitative and quantitative information of key parameters
adopted for continuous and non-continuous level 2 fair value measurement items
□ Applicable√ N/A
4. Valuation techniques and qualitative and quantitative information of key parameters
adopted for continuous and non-continuous level 3 fair value measurement items
√ Applicable□ N/A
The fair value of short-term wealth management products of banks is determined
based on their par value. The fair value of investments in equity instruments is determined
by using the cost as the best estimate, since such investments are unlisted equity
investments that do not have quoted prices in active markets.
5. Reconciliation between opening and closing carrying amounts and sensitivity analysis of
unobservableparametersforcontinuouslevel3fairvaluemeasurementitems
□ Applicable√ N/A
6. Where transfers among levels occurred in the period, transfer reasons and policies for
determiningtransfertimepointforcontinuousfairvaluemeasurementitems
□ Applicable√ N/A
7. Changesinvaluationtechniquesintheperiodandreasonsforchanges
□ Applicable√ N/A
8. Fairvalueoffinancialassetsandfinancialliabilitiesnotmeasuredatfairvalue
□ Applicable√ N/A
9. Others
□ Applicable√ N/A
XII.Related-party relationships and transactions
1. ParentoftheCompany
√ Applicable□ N/A
Unit: In RMB 0’000 RMB
Proportion of the Proportion of the
Name of the Registration Business Registered Company's Company's voting
parent place nature capital shares held by right held by the
the parent (%) parent (%)
Shenzhen R&D and
Appotronics sales of
Shenzhen 1,000 20.80 20.80
Holdings semiconductor
Co., Ltd. products
Description of the parent of the Company
None
The ultimate controlling party of the Company is LI Yi.
Other description:
None
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2. Subsidiaries of the Company
Please refer to the Notes for details about the subsidiaries of the Company.
√ Applicable□ N/A
Please refer to the description in XII.2 of Section X for details about the subsidiaries of the Company.
3. AssociatesandjointventuresoftheCompany
Information of the significant joint ventures or associates of the Company are disclosed in the Annex.
√ Applicable□ N/A
Please refer to the description in XII.3 of Section X for the details about the major joint ventures or
associates of the Company.
Details of other joint ventures or associates having related-party transactions and balances with the
Company in the period or in prior periods:
√ Applicable□ N/A
Name of associates or joint ventures Relationship with the Company
GDC Technology Limited (BVI) Enterprise with 36% equity interests held by the
Company
Cinionic Limited Enterprise with 20% equity interests held by the
Company
Other description
□ Applicable√ N/A
4. OtherrelatedpartiesoftheCompany
√ Applicable□ N/A
Name of other related party Relationship between other related party and the
Company
Shenzhen YLX Technology Development Co.,
Controlled by the same de facto controller
Ltd.
Shenzhen Bevix Technology Co., Ltd. holding more than 5% of shares in the company
Shenzhen Lighting Institute Affiliates of the de facto controller
Shenzhen Fengye Investment Consulting
Affiliates of the de facto controller
Limited Partnership (LP)
China Film Equipment Corporation and its Minority shareholders holding more than 10% shares
affiliates in the subsidiary and their affiliates
Xiaomi Communications Technologies Co., Minority shareholders holding more than 10% shares
Ltd. and its affiliates in the subsidiary and their affiliates
Beijing Donview Education Technology Co., Minority shareholders holding more than 10% shares
Ltd. and its affiliates in the subsidiary and their affiliates
Other description
None
5. Related‐partytransactions
(1). Salesandpurchaseofgoods,renderingandreceiptofservices
Purchase of goods/receipt of services
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount for the current Amount for the prior
Related party Subject matter
period period
China Film Equipment
Power supply, water
Corporation and its 10,824,895.69 22,838,096.22
cooling and services
affiliates
Xiaomi Communications
Electronic components
Technologies Co., Ltd. and 99,513,144.41 82,763,206.03
and services
its affiliates
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2020 Semiannual Report
Beijing Donview Education
Technology Co., Ltd. and Service 17,123.89 27,452.70
its affiliates
GDC and its affiliates Circuit board 3,586,000.00 0.00
Total 113,941,163.99 105,628,754.95
Sales of goods/rendering of services
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount for the current Amount for the prior
Related party Subject matter
period period
China Film Equipment Laser cinema projector
Corporation and its light source and cinema 34,976,389.39 43,561,500.35
affiliates services
Xiaomi Communications Laser TV, smart mini
Technologies Co., Ltd. and projector 254,631,263.83 259,366,426.80
its affiliates
Beijing Donview Education Laser business
Technology Co., Ltd. and education projector 6,138,857.93 27,229,934.46
its affiliates
CINIONIC Laser light source 35,973,430.61 53,450,024.46
GDC and its affiliates Laser light source parts 13,274.34 0.00
Sub-total 331,733,216.10 383,607,886.07
Description of sales and purchase of goods, rendering and receipt of services
□ Applicable√ N/A
(2). Details of trust with related parties/subcontracting and trust management/
contract‐issuing
Details of trust / contracting where a group entity is the trustor / main contractor:
□ Applicable√ N/A
Description of trust/subcontracting with related parties
□ Applicable√ N/A
Details of trust/contracting where a group entity is the trustor/main contractor:
□ Applicable√ N/A
Description of management/contract-issuing with related parties
□ Applicable√ N/A
(3). Leaseswithrelatedparties
The Company as the lessor:
□ Applicable√ N/A
The Company as the lessee:
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Lease fees recognized in Lease fees recognized in
Name of lessor Type of leased assets
the current period the prior period
China Film Equipment
Corporation and its Property lease 835,379.65 1,118,156.20
affiliates
Description of leases with related parties
□ Applicable√ N/A
(4). Guaranteeswithrelatedparties
The Company as a guarantor:
□ Applicable√ N/A
The Company as a guaranteed party:
√ Applicable□ N/A
Unit: Yuan Currency: RMB
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2020 Semiannual Report
Whether the
Guaranteed Inception date Expiry date of obligation
Guarantor
amount of guarantee guarantee guaranteed has
been discharged
Shenzhen YLX Technology
2,041,659.00 2018-1-17 2020-7-17 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
1,237,500.00 2018-3-26 2020-9-23 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
1,987,500.00 2018-3-26 2020-9-23 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
2,340,154.00 2018-4-25 2020-10-25 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
1,575,000.00 2018-6-1 2020-12-1 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
1,324,988.00 2018-6-27 2020-12-26 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
2,546,656.00 2018-8-17 2021-2-17 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
3,827,620.00 2018-9-27 2021-3-26 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
12,207,707.90 2018-11-1 2021-4-30 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
7,172,908.00 2018-11-30 2021-4-29 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
43,670,392.00 2018-12-19 2021-12-19 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
16,481,996.00 2018-12-19 2021-6-21 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
7,745,992.00 2018-12-29 2021-12-29 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
20,152,663.00 2019-1-30 2022-1-30 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
7,896,000.00 2019-3-1 2022-3-1 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
12,201,000.00 2019-3-1 2022-3-1 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
8,001,000.00 2019-3-29 2022-8-29 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
9,000,662.00 2019-5-9 2022-4-30 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
8,448,000.00 2019-6-4 2022-6-4 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
10,650,000.00 2019-7-8 2022-7-4 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
15,450,000.00 2019-7-29 2022-7-29 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
10,001,332.00 2019-8-21 2022-8-21 No
Development Co., Ltd., LI Yi
Shenzhen YLX Technology
18,296,999.00 2019-9-18 2022-9-18 No
Development Co., Ltd., LI Yi
Description of guarantees with related parties
□ Applicable√ N/A
(5). Borrowings/loanswithrelatedparties
□ Applicable√ N/A
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2020 Semiannual Report
(6). Assetstransfer/debtrestructuringwithrelatedparties
□ Applicable√ N/A
(7). Compensationforkeymanagementpersonnel
√ Applicable□ N/A
Unit: In RMB 0’000 RMB
Amount for the prior
Item Amount for the current period
period
Compensation for key management 657.82 682.63
personnel
(8). Otherrelated‐partytransactions
□ Applicable√ N/A
6. Amounts due from / to related parties
(1). Amountsduefromrelatedparties
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Related party Carrying Provision for Provision for
Carrying amount
amount bad debts bad debts
China Film Equipment
Accounts
Corporation and its 1,320,333.26 81,543.92 17,494,326.54 874,716.33
receivable
affiliates
Beijing Donview
Accounts Education Technology
2,198.00 109.90 8,829,840.85 442,339.31
receivable Co., Ltd. and its
affiliates
Xiaomi
Accounts Communications
61,820,725.66 3,091,036.29 45,679,955.49 2,283,997.77
receivable Technologies Co., Ltd.
and its affiliates
Accounts
CINIONIC 10,072,422.34 503,621.12 24,298,258.08 1,214,912.90
receivable
Sub-total 73,215,679.26 3,676,311.23 96,302,380.96 4,815,966.31
Prepayments GDC and its affiliates 2,270,088.50
China Film Equipment
Prepayments Corporation and its 2,678,466.27 3,350,592.41
affiliates
Sub-total 4,948,554.77 3,350,592.41
China Film Equipment
Other
Corporation and its 296,435.00 14,821.75 290,866.00 14,543.30
receivables
affiliates
Xiaomi
Other Communications
100,000.00 5,000.00 100,000.00 5,000.00
receivables Technologies Co., Ltd.
and its affiliates
Sub-total 396,435.00 19,821.75 390,866.00 19,543.30
(2). Amountsduetorelatedparties
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Related party Closing balance of Opening balance of
carrying amount carrying amount
Accounts China Film Equipment Corporation and its 7,787,327.81 11,595,819.93
219 / 234
2020 Semiannual Report
payable affiliates
Sub-total 7,787,327.81 11,595,819.93
Receipts in China Film Equipment Corporation and its 1,082,606.56 15,407,937.54
advance affiliates
Sub-total 1,082,606.56 15,407,937.54
Contract China Film Equipment Corporation and its 1,964,601.77 429,634.22
liabilities affiliates
Sub-total 1,964,601.77 429,634.22
Other China Film Equipment Corporation and its 9,645.00
payables affiliates
Sub-total 9,645.00
7. Relatedpartycommitments
□ Applicable√ N/A
8. Others
□ Applicable√ N/A
XIII. Share-based payments
1. Summaryofshare‐basedpayments
√ Applicable□ N/A
Unit: Share Currency: RMB
Total number of the Company's equity instruments Restricted shares 4.4000 million shares
granted during the period
Total number of the Company's equity instruments None
executed during the period
Total number of the Company's equity instruments None
lapsed during the period
Range of exercise prices and remaining contractual
life of the Company's share options outstanding at Granted on October 14, 2019
the end of the period
Range of exercise prices and remaining contractual grant price: RMB 17.50/share; remaining
life of the Company's other equity instruments contractual life: 4/16/28 months
outstanding at the end of the period
Other description
None
2. Equity‐settledshare‐basedpayments
√ Applicable□ N/A
Unit: Yuan Currency: RMB
The method of determining the fair value of equity Open market quotes
instruments at the grant date
The basis of determining the number of equity Actual grant amount
instruments expected to be executed
Reasons for the significant difference between the None
estimate in the current period and that in the prior
period
Amounts of equity-settled share-based payments 23,560,626.63
accumulated in capital reserve
Total expenses recognized arising from equity-settled 17,576,543.47
share-based payments
Other description
The difference between the the total expenses recognized by equity-settled share-based payments in the
current period and the amount of share-based payments included in owners' equity arises from the
exchange rate translation difference.
220 / 234
2020 Semiannual Report
3. Cash‐settledshare‐basedpayments
□ Applicable√ N/A
4. Modificationtoandterminationofshare‐basedpayments
□ Applicable√ N/A
5. Others
□ Applicable√ N/A
XIV. Commitments and contingencies
1. Significant commitments
√ Applicable□ N/A
Significant external commitments, and nature and amount thereof as of the balance sheet date
1. Significant lease contracts which the Company has entered into or will perform and their
financial impacts are disclosed in the following table:
Rent
Rent Rent
No. Rent address area(square Rent period
purpose expense/year
meters)
Research
20/F, 21/F, 22/F, United Headquarter and From May 1,
Building, High-Tech Zone, No. 63 developmen 2018 to
1 5,808.79 5,310,893.71
Xuefu Road, Nanshan District, t, office December 31,
Shenzhen administrati 2021
on
Research
and From February
23/F, United Headquarter Building,
developmen 1, 2020 to
2 High-Tech Zone, No. 63 Xuefu Road, 2,047.93 1,872,393.14
t, office January 31,
Nanshan District, Shenzhen
administrati 2025
on
From December
Yaochuan Industrial Zone, Tangwei
Plant and 1, 2018 to
3 Community, Fuhai Street, Bao'an 23,765.57 13,405,336.20
dormitory November 30,
District, Shenzhen
2022
Room101, 1/F, Building 22E, Phase III Office From March 20,
4 of Hong Kong Science and Technology 1,138.25 administrati 2019 to March 3,354,004.80
Park on 19, 2022
Research
and
C1002, Building B6, Dongsheng From May 11,
developmen
5 Science & Technology Park, 66 West 998.39 2020 to May 10, 1,706,605.80
t, office
Xiaokou Road, Haidian District, Beijing 2021
administrati
on
2. Contingencies
(1). Significantcontingenciesasofthebalancesheetdate
√ Applicable□ N/A
Cause of
Case No. Plaintiffs Defendants Patents involved Progress
action
(2019)
Yue 73
Appotronics Pending
Zhi Min Infringement ZL201310017478.0
Delta Corporation Limited; trial
Chu of patent
Electronics, Futian SPN Projector
No.663 rights of
Inc. & Video System
(2019) inventions
Firm of Shenzhen Pending
Yue 73 ZL20310625063.1
trial
Zhi Min
221 / 234
2020 Semiannual Report
Chu
No.664
(2019)
Jing 73 Pending
ZL201410249663.7
Min Chu trial
No.1275
(2019)
Jing 73 Pending
ZL201610387831.8
Min Chu Fengmi (Beijing) trial
No. 1276 Technology Co.,
(2019) Ltd.; Appotronics
Jing 73 Corporation Limited Pending
ZL201310017478.0
Min Chu trial
No. 1277
(2019)
Jing 73 Pending
ZL201010624724.5
Min Chu trial
No. 1278
As of June 30, 2020, the Company has had RMB 20 million frozen a result of the above litigations. As
of the date of this report, RMB 20 million involved under [2019] Yue 73 Zhi Min Chu No.s 663 and 664
has been released.
(2). Description shall also be provided even if the Company has no significant
contingenciestobedisclosed:
□ Applicable√ N/A
3. Others
□ Applicable√ N/A
XV. Events after the balance sheet date
1. Materialnon‐adjustingevent
□ Applicable√ N/A
2. Profitdistribution
□ Applicable√ N/A
3. Salesreturn
□ Applicable√ N/A
4. Description of other events after the balance sheet date
□ Applicable√ N/A
XVI. Other significant events
1. Correctionsofpriorperioderrors
(1). Retrospectiveapplication
□ Applicable√ N/A
(2). Prospectiveapplication
□ Applicable√ N/A
2. Debtrestructuring
□ Applicable√ N/A
3. Assetswap
(1). Exchangeofnon‐monetaryassets
□ Applicable√ N/A
(2). Otherassetswap
□ Applicable√ N/A
222 / 234
2020 Semiannual Report
4. Annuityplan
□ Applicable√ N/A
5. Discontinued operations
□ Applicable√ N/A
6. Segment reporting
(1). Determination basis and accounting policies of reporting segments
□ Applicable√ N/A
(2). Financialinformationofreportingsegments
□ Applicable√ N/A
(3). If the Company has no reporting segments, or cannot disclose the total assets and
liabilitiesofreportingsegments,specifythereasons
√ Applicable□ N/A
The Company has no reporting segments due to absence of diversified operations.
(4). Otherdescription:
√ Applicable□ N/A
Categorized by businesses and products:
Unit:
Yuan
Amount of the current period Amount of the prior period
Project Principal activity Principal activity cost Principal activity Principal activity cost
income income
Sales 687,172,378.00 485,666,508.20 646,147,276.73 444,567,381.82
Lease service 27,433,018.22 42,549,487.82 198,853,981.12 59,785,111.50
Other business 1,419,811.12 1,571,793.92 8,355,706.99 7,405,409.80
Sub-total 716,025,207.34 529,787,789.94 853,356,964.84 511,757,903.12
Categorized by regions:
Unit:
Yuan
Amount of the current period Amount of the prior period
Project Principal activity Principal activity cost Principal activity Principal activity cost
income income
Domestic 640,139,114.14 503,435,571.70 771,763,293.59 483,942,730.42
Overseas 75,886,093.20 26,352,218.24 81,593,671.25 27,815,172.70
Sub-total 716,025,207.34 529,787,789.94 853,356,964.84 511,757,903.12
7. Other significant transactions and matters having an impact on the decisions of investors
□ Applicable√ N/A
8. Others
□ Applicable√ N/A
223 / 234
2020 Semiannual Report
XVII. Notes to key items in the Parent Company's financial statements
1. Accounts receivable
(1). Disclosure by aging
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Aging Closing balance of carrying amount
Within 1 year
Including: Subitems within 1 year
Others 16,147,768.10
Group of receivables from related parties in the scope 341,024,873.57
of consolidation
Sub-total of items within 1 year 357,172,641.67
1 to 2 years 25,404,808.35
2 to 3 years 49,366.65
Over 3 years
Total 382,626,816.67
(2). Disclosurebycategoriesofprovisionforbaddebts
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Closing balance Opening balance
Provision for bad Provision for bad
Carrying amount Carrying amount
debts debts
Category Proportion Book Proportion Bo
Proportion of value Proportion of val
Amount Amount Amount Amount
(%) provision (%) provision
(%) (%)
Provision for
bad debts
made
individually
Including:
Provision for 382,626,816.67 100.00 1,310,771.73 0.34 381,316,044.94 296,895,698.30 100.00 1,279,338.67 0.43 295,616
bad debts
made by
group
Including:
Group of 18,111,934.75 4.73 1,310,771.73 7.24 16,801,163.02 17,257,141.02 5.81 1,279,338.67 7.41 15,977
aging
Combination
of related
parties in the 364,514,881.92 95.27 364,514,881.92 279,638,557.28 94.19 279,638
scope of
consolidation
Total 382,626,816.67 100.00 1,310,771.73 0.34 381,316,044.94 296,895,698.30 100.00 1,279,338.67 0.43 295,616,
Provision for bad debts made individually:
□ Applicable√ N/A
Provision for bad debts made by group:
√ Applicable□ N/A
Item by group: Group of aging
Unit: Yuan Currency: RMB
224 / 234
2020 Semiannual Report
Closing balance
Name Proportion of provision
Accounts receivable Provision for bad debts
(%)
Within 1 year 16,147,768.10 807,388.40 5.00
1-2 years 1,914,800.00 478,700.00 25.00
2-3 years 49,366.65 24,683.33 50.00
Total 18,111,934.75 1,310,771.73 7.24
Recognition criterion to make the bad debt provision by group and explanation:
□ Applicable√ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables.
□ Applicable√ N/A
(3). Provisionforbaddebts
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Changes for the current period
Opening Closing
Category Recovery Write off or Other
balance Provision balance
or reversal cancellation changes
Provision for
bad debts
made
individually
Provision for
bad debts
1,279,338.67 31,433.06 1,310,771.73
made by
group
Total 1,279,338.67 31,433.06 1,310,771.73
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(4). Accountsreceivableactuallycanceledinthecurrentperiod
□ Applicable√ N/A
(5). Topfiveclosingbalancesofaccountsreceivablecategorizedbydebtors
√ Applicable□ N/A
Proportion to the
Provision for
Entity Carrying amount balance of accounts
bad debts
receivable(%)
Fengmi (Beijing) Technology Co., Ltd. 244,410,569.50 63.88
CINEAPPO Laser Cinema Technology
61,166,154.66 15.99
(Beijing) Co., Ltd.
Appotronics Hong Kong Limited 46,266,620.95 12.09
Appotronics Technology (Changzhou) Co., Ltd. 5,555,472.59 1.45
Qingda Appotronics (Xiamen) Technology Co.,
4,243,723.75 1.11
Ltd.
Sub-total 361,642,541.45 94.52
(6). Accountsreceivablederecognizedduetotransferoffinancialassets
□ Applicable√ N/A
(7). Assets and liabilities arising from transfer of accounts receivable and continued
involvement
□ Applicable√ N/A
225 / 234
2020 Semiannual Report
Other description:
□ Applicable√ N/A
2. Other receivables
Presentedbyitems
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest receivable
Dividends receivable
Other receivables 32,169,108.08 67,227,575.21
Total 32,169,108.08 67,227,575.21
Other description:
□ Applicable√ N/A
Interestreceivable
(1).Categoriesofinterestreceivable
□ Applicable√ N/A
(2).Significantinterestsoverdue
□ Applicable√ N/A
(3).Provision for bad debts
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
(4).Dividendsreceivable
□ Applicable√ N/A
(5).Dividendsreceivablewithsignificantamountsagedmorethan1year
□ Applicable√ N/A
(6).Provision for bad debts
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
Otherreceivables
(7).Disclosurebyaging
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Aging Closing balance of carrying amount
Within 1 year
Including: Subitems within 1 year
Within 1 year 13,729,992.78
Sub-total of items within 1 year 13,729,992.78
1 to 2 years 17,698,419.15
2 to 3 years 441,715.69
Over 3 years 675,637.60
Total 32,545,765.22
(8).Categoriesbythenatureoftheamount
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance of carrying Opening balance of carrying
Nature of receivables
amount amount
Deposits/margins/petty cash 7,342,161.24 6,343,792.67
Withholding 650,484.24
226 / 234
2020 Semiannual Report
Receivables from related parties 25,012,622.34 60,540,712.71
in the scope of consolidation
Temporary receivables 190,981.64 10,289.71
Total 32,545,765.22 67,545,279.33
(9).Provisionforbaddebts
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Stage I Stage II Stage III
Provision for bad Lifetime ECL
12-month ECL Lifetime ECL (with Total
debts (without credit
in the future credit impairment)
impairment)
Balance as at
317,704.12 317,704.12
January 1, 2020
Balance as at
January 1, 2020 in
the current period
--transferred to
Stage II
--transferred to
Stage III
--reversed to Stage
II
--reversed to Stage
I
Provision 58,953.02 58,953.02
Reversal
Write-off
Cancellation
Other changes
Balance as at June
376,657.14 376,657.14
30, 2020
Descriptionofsignificantchangesinthebalanceofotherreceivableswithchangedprovisionsforlosses
inthecurrentperiod:
□ Applicable√ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period:
□ Applicable√ N/A
(10). Provisionforbaddebts
√ Applicable□ N/A
Unit:YuanCurrency:RMB
Changes for the current period
Opening Closing
Category Recovery Write off or Other
balance Provision balance
or reversal cancellation changes
Provision for
bad debts
317,704.12 58,953.02 376,657.14
made by
group
Total 317,704.12 58,953.02 376,657.14
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(11). Otherreceivablesactuallycanceledinthecurrentperiod
□ Applicable√ N/A
Description of other receivables cancellation:
227 / 234
2020 Semiannual Report
□ Applicable√ N/A
(12). Topfiveclosingbalancesofotherreceivablescategorizedbydebtors
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Provision
Nature of Proportion to the for bad
Entity other Closing balance Aging balance of other debts
receivables receivables (%) Closing
balance
Shenzhen Appotronics Within
Laser Display Internal 1 year
13,969,500.00 42.92
Technology Co., Ltd. transaction and 1-2
years
Fengmi (Beijing) Internal Within
10,621,938.36 32.64
Technology Co., Ltd. transaction 1 year
Shenzhen Meisheng Supplier 1-2
3,574,618.00 10.98 178,730.90
Industry Co., Ltd. deposit years
China Securities
Depository and Clearing
Supplier Within
Co., Ltd. Shanghai 2,000,000.00 6.15 100,000.00
security 1 year
Branch (settlement
reserve)
Shenzhen Science and Within
Technology Assessment 1 year,
Management Center Supplier 1-2
1,257,075.20 3.86 62,853.76
deposit years,
2-3
years
Total 31,423,131.56 96.55 341,584.66
(13). Accountsreceivableinvolvinggovernmentgrants
□ Applicable√ N/A
(14). therreceivablesderecognizedduetotransferoffinancialassets
□ Applicable√ N/A
(15). Assets and liabilities arising from transfer of other receivables and continued
involvement
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
3. Long-term equity investments
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Carrying Provision for Carrying Provision for
Book value Book value
amount impairment amount impairment
Investments
in 439,528,444.09 45,885,284.27 393,643,159.82 303,680,560.40 45,885,284.27 257,795,276.13
subsidiaries
Total 439,528,444.09 45,885,284.27 393,643,159.82 303,680,560.40 45,885,284.27 257,795,276.13
(1) Investmentsinsubsidiaries
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Investees Opening Increase Decrease Closing Provision Closing
228 / 234
2020 Semiannual Report
balance balance for balance of
impairment provision
for
impairment
Appotronics
Timewaying
(Beijing) 27,000,000.00 27,000,000.00 27,000,000.00
Technology
Co., Ltd.
Shenzhen
Appotronics
Software 516,813.05 972,563.80 1,489,376.85
Technology
Co., Ltd.
Beijing Orient
Appotronics
5,900,000.00 5,900,000.00
Technology
Co., Ltd.
Fengmi
(Beijing)
28,203,950.93 1,457,301.95 29,661,252.88 6,057,491.48
Technology
Co., Ltd.
Shenzhen
Appotronics
Laser Display 18,966,857.26 18,966,857.26
Technology
Co., Ltd.
CINEAPPO
Laser Cinema
Technology 30,767,063.78 1,556,102.08 32,323,165.86
(Beijing) Co.,
Ltd.
Qingda
Appotronics
(Xiamen) 5,100,000.00 5,100,000.00 827,792.79
Technology
Co., Ltd.
Shenzhen
Appotronics
Xiaoming 12,000,000.00 12,000,000.00 12,000,000.00
Technology
Co., Ltd.
Appotronics
Hong Kong 173,225,875.38 128,861,915.86 302,087,791.24
Limited
Appotronics
Technology
2,000,000.00 2,000,000.00
(Changzhou)
Co., Ltd.
Shenzhen
Appotronics
Display 3,000,000.00 3,000,000.00
Device Co.,
Ltd.
Total 303,680,560.40 135,847,883.69 439,528,444.09 45,885,284.27
229 / 234
2020 Semiannual Report
(2) Investmentsinassociatesandjointventures
□ Applicable√ N/A
Other description:
□ Applicable√ N/A
4. Operatingincomeandoperatingcosts
(1). Descriptionofoperatingincomeandoperatingcosts
√ Applicable□ N/A
Unit:Yuan Currency:RMB
Amount for the current period Amount for the prior period
Item
Revenue Cost Revenue Cost
Main business 384,899,378.41 256,660,786.97 427,684,505.04 290,643,668.97
Total 384,899,378.41 256,660,786.97 427,684,505.04 290,643,668.97
(2). Descriptionofincomesfromcontracts
□ Applicable√ N/A
(3). Descriptionofperformanceobligations
□ Applicable√ N/A
(4). Descriptionofallocationtoremainingperformanceobligations
□ Applicable√ N/A
Other description:
None
5. Investment income
√ Applicable□ N/A
Unit: Yuan Currency: RMB
Amount for the current
Item Amount for the prior period
period
Investment income from disposal of -64,542.33
long-term equity investments
Investment income from disposal of
10,824,793.71
held-for-trading financial assets
Total 10,824,793.71 -64,542.33
Other description:
None
6. Others
□ Applicable√ N/A
XVIII. Supplementary information
1. Breakdown of non-recurring profit or loss for the current period
√ Applicable□ N/A
Unit: 元 Currency: 人民币
Item Amount Description
Gain or loss on disposal of non-current assets 45,940.33
Government grants recognized in profit or loss
(other than grants which are closely related to the
Company's business and are either in fixed 29,851,687.48
amounts or determined under quantitative methods
in accordance with the national standard)
Net profit or loss of subsidiaries from the
beginning of the period up to the business
11,655,728.28
combination date recognized as a result of
business combination of enterprises involving
230 / 234
2020 Semiannual Report
enterprises under common control
Profit or loss on changes in the fair value of
held-for-trading financial assets, derivative
financial assets, held-for-trading financial
liabilities and derivative financial liabilities and
investment income on disposal of held-for-trading
10,824,793.71
financial assets, derivative financial assets,
held-for-trading financial liabilities, derivative
financial liabilities and other debt investments,
other than those used in the effective hedging
activities relating to normal operating business
Other non-operating income and expenses other
-366,405.89
than the above
Other gains or losses meeting the definition of
non-recurring profit or loss
Effect of income tax -5,513,728.59
Effects attributable to minority interests -1,938,077.23
Total 44,559,938.09
It is required to specify the reason for defining items as non-recurring profit or loss items according to
Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.
1－Non-recurring Profit or Loss, and reasons for defining non-recurring profit or loss items illustrated in
Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.
1－Non-recurring Profit or Loss as recurring profit or loss items.
□ Applicable√ N/A
2. Returnonnetassetsandearningspershare
√ Applicable□ N/A
Weighted Earnings per share
average return
Profit for the reporting period Basic earnings per Diluted earnings per
on net assets
(%) share share
Net profit attributable to ordinary
0.72 0.03 0.03
shareholders of the Company
Net profit after deduction of
non-recurring profits or losses
-1.52 -0.07 -0.07
attributable to ordinary shareholders
of the Company
2. Calculation process of weighted average return on net assets
Amount of the current
Item No.
period
Net profit attributable to ordinary shareholders of the Company A 14,327,442.96
Non-recurring profit or loss B 44,559,938.09
Net profits after deduction of non-recurring profits or losses
C=A-B -30,232,495.13
attributable to ordinary shareholders of the Company
Opening balance of net assets attributable to ordinary shareholders
D 1,975,838,572.52
of the Company
Net assets increased due to issue of new shares or debt-to-equity
E
swap that are attributable to ordinary shareholders of the Company
Accumulated months from the month following the addition of net
F
assets to the end of the reporting period
Net assets reduced by repurchases or cash dividends that are
G 33,866,580.83
attributable to ordinary shareholders of the Company
231 / 234
2020 Semiannual Report
Accumulated months from the month following the reduction of
H 1
net assets to the end of the reporting period
Effect of share-based payments on net
I1 16,084,702.84
assets
Accumulated months from the month
following the addition or reduction of net J1 3
assets to the end of the reporting period
Others Effect of translation of financial statements
denominated in foreign currencies on net I2 1,013,815.20
assets
Accumulated months from the month
following the addition or reduction of net J2 3
assets to the end of the reporting period
Months of reporting period K 6
L=D+A/2+E×F/K-G×H/K
Weighted average net assets 1,985,907,122.88
±I×J/K
Weighted average return on net assets M=A/L 0.72%
Weighted average return on net assets after deduction of
N=C/L -1.52%
non-recurring profit or loss
3. Calculation process of basic and diluted earnings per share
(1) Calculation process of basic earnings per share
Amount of the
Item No.
current period
14,327,442.
Net profit attributable to ordinary shareholders of the Company A
96
44,559,938.
Non-recurring profit or loss B
09
Net profits after deduction of non-recurring profits or losses attributable to ordinary -30,232,49
C=A-B
shareholders of the Company 5.13
451,554,41
Total shares at the beginning of the period D
1.00
Shares increased from conversion of reserve into capital or share dividend distribution E
Shares increased due to issue of new shares or debt-to-equity swap F
Accumulated months from the month following the addition of shares to the end of the
G
reporting period
Reduced shares arising from repurchase H
Accumulated months from the month following the reduction of shares to the end of
I
the reporting period
Number of reduced shares during the reporting period J
Months of reporting period K 6
L=D+E+F×G/K-H 451,554,41
Weighted average number of outstanding ordinary shares
×I/K-J 1.00
Basic earnings per share M=A/L 0.03
Basic earnings per share after deduction of non-recurring profit or loss N=C/L -0.07
(2) Calculation process of diluted earnings per share
Item No. Amount of the current period
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2020 Semiannual Report
Net profit attributable to ordinary shareholders of the Company A 14,327,442.96
Effect of diluted potential ordinary shares on net profit B
Net profits after dilution attributable to ordinary shareholders of
C=A-B 14,327,442.96
the Company
Non-recurring profit or loss D 44,559,938.09
Net profits after dilution and deduction of non-recurring profits
E=C-D -30,232,495.13
or losses attributable to ordinary shareholders of the Company
Weighted average number of outstanding ordinary shares F 451,554,411.00
Weighted average number of ordinary shares added to
G 1,336,784.26
warrants, share options, and convertible bonds, etc.
Weighted average number of outstanding ordinary shares after
H=F+G 452,891,195.26
dilution
Diluted earnings per share M=C/H 0.03
Diluted earnings per share after deduction of non-recurring
N=E/H -0.07
profit or loss
3. Differences in accounting data under Chinese Accounting Standards and Oversea
Accounting Standards
□ Applicable√ N/A
4. Others
□ Applicable√ N/A
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2020 Semiannual Report
Section XI. List of Documents Available for Inspection
1. 2020 Semiannual Financial Statements with seals and signatures of the
principal of the Company, the person in charge of the accounting body and
the chief accountant
List of Documents 2. All original documents and announcements of the Company publicly
Available for Inspection disclosed in the websites designated by the Company as of the reporting
period
3. The above-mentioned documents are prepared in: Office of the Board of
Directors of Appotronics Corporation Limited
Legal representative: BO Lianming
Approval for submission by the Board of Directors: August 25, 2020
Revision information
□ Applicable√ N/A
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