深康佳B:2020年半年度报告摘要(英文版)

Konka Group Co., Ltd.
Interim Report 2020 (Summary)


Stock Code: 000016, 200016        Stock Name: Konka Group-A, Konka Group-B                   Announcement No. 2020-91

Bond code: 114418, 114423         Bond name: 19 Konka 01, 19 Konka 02

        114488, 114489                   19 Konka 03, 19 Konka 04

        114523, 114524                   19 Konka 05, 19 Konka 06




                                KONKA GROUP CO., LTD.
                            INTERIM REPORT 2020 (SUMMARY)



Part I Important Notes

This Abstract is based on the full text of the Interim Report. In order for a full understanding of the
operating results, financial condition and future development planning of the Company, investors are
kindly reminded to read the full text carefully on the media designated by the China Securities
Regulatory Commission (the “CSRC”).
Objections raised by any of the directors, supervisors or senior management against any contents in
this Report or its summary:
               Name                                Office title                     Objection and explanation of why



Statement of objection:
Except for the following directors, all the other directors attended in person the Board meeting for the
review of this Report and its summary.
                                                                  Reason for not attending     Proxy entrusted to attend the
            Name                    Office title
                                                                     meeting in person                   meeting



Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable √ Not applicable



                                                              1
Konka Group Co., Ltd.
Interim Report 2020 (Summary)


This Report and its summary have been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.

Part II Key Corporate Information

1. Stock Profile
 Stock name                       Konka Group-A, Konka Group-B              Stock code                    000016, 200016
 Stock exchange for stock
                                  Shenzhen Stock Exchange
 listing
 Changed stock name (if any)      N/A
        Contact information                      Board Secretary                                   Securities Representative
 Name                             Wu Yongjun                                             Miao Leiqiang
                                  Board Secretariat, 24/F, Konka R&D Center,             Board Secretariat, 24/F, Konka R&D Center, 28
                                  28 Keji South Twelfth Road, Science and                Keji South Twelfth Road, Science and
 Office address                   Technology Park, Yuehai Street, Nanshan                Technology Park, Yuehai Street, Nanshan
                                  District, Shenzhen, Guangdong Province,                District, Shenzhen, Guangdong Province,
                                  China                                                  China
 Tel.                             0755-26609138                                          0755-26609138
 E-mail address                   szkonka@konka.com                                      szkonka@konka.com


2. Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No
                                                      H1 2020                        H1 2019                      Change (%)
 Operating revenue (RMB)                             17,524,183,896.74             26,036,442,813.84                           -32.69%
 Net profit attributable to the listed
                                                            94,701,792.63                352,767,020.73                        -73.15%
 company’s shareholders (RMB)
 Net profit attributable to the listed
 company’s      shareholders     before               -650,010,495.47               -622,911,633.57                            -4.35%
 exceptional gains and losses (RMB)
 Net cash generated from/used            in
                                                     -1,076,366,927.48              -2,042,956,171.77                          47.31%
 operating activities (RMB)
 Basic earnings per share (RMB/share)                              0.0393                        0.1465                        -73.17%
 Diluted earnings per share (RMB/share)                            0.0393                        0.1465                        -73.17%
 Weighted average return on equity (%)                             1.16%                         4.25%                          -3.09%
                                                    30 June 2020                 31 December 2019                 Change (%)
 Total assets (RMB)                                  43,508,804,666.20             42,586,955,452.27                             2.16%
 Equity attributable to the          listed
                                                      8,042,493,415.89              8,068,505,598.13                            -0.32%
 company’s shareholders (RMB)


3. Shareholders and Their Holdings as at the End of the Reporting Period

                                                                                                                               Unit: share
                                                                        Number of preferred shareholders with resumed
 Number of ordinary shareholders                             145,344                                                                  0
                                                                        voting rights (if any)
                                                           Top 10 shareholders
            Name of shareholder                Nature of       Shareholdi        Number of         Restricted      Shares in pledge or



                                                                    2
Konka Group Co., Ltd.
Interim Report 2020 (Summary)

                                          shareholder         ng             shares           shares               frozen
                                                          percentage
                                                                                                                            Share
                                                                                                              Status
                                                                                                                              s
 OVERSEAS CHINESE TOWN                    State-owned
                                                              21.75%      523,746,932                   0
 ENTERPRISES CO., LTD                     legal person
 CITIC SECURITIES BROKERAGE               Foreign legal
                                                               7.56%      182,100,202                   0
 (HONG KONG) CO., LTD.                    person
 GUOYUAN SECURITIES BROKER                Foreign legal
                                                               2.47%       59,497,225                   0
 (HK) CO., LTD.                           person
                                          Foreign legal
 HOLY TIME GROUP LIMITED                                       2.33%       56,139,100                   0
                                             person
                                          Foreign legal
 GAOLING FUND,L.P.                                             2.19%       52,801,250                   0
                                             person
                                           Domestic
 WANG JINGFENG                              natural            1.01%       24,250,000                   0
                                            person
                                            Foreign
 NAM NGAI                                   natural            0.92%       22,063,940                   0
                                            person
 CHINA MERCHANTS SECURITIES               State-owned
                                                               0.83%       19,973,520                   0
 (HK) LIMITED                             legal person
 Haitong International Securities         Foreign legal
                                                               0.52%       12,452,154                   0
 Company Limited-Account Client              person
                                          Foreign legal
 SPDR Portfolio Emerging Markets ETF                           0.46%       11,176,363                   0
                                             person
                                          Happy Bloom Investment Limited, a wholly-owned subsidiary of the Company’s first
                                          majority shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” for short),
                                          holds 180,001,110 and 18,360,000 ordinary shares in the Company respectively
 Related or acting-in-concert parties
                                          through CITIC Securities Brokerage (Hong Kong) Co., Ltd. and China Merchants
 among shareholders above
                                          Securities (HK) Limited. Happy Bloom Investment Limited and Overseas Chinese
                                          Town Enterprises Co. are parties acting in concert. Other than that, it is unknown
                                          whether the other shareholders are related parties or acting-in-concert parties or not.
                                          Wang Jingfeng holds 23,000,000 A-shares in the Company through his securities
 Shareholders conducting margin trading
                                          account for customer credit trading guarantee in Guotai Junan Securities Co., Ltd.


4. Change of Controlling Shareholder or Actual Controller in Reporting Period

Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The actual controller remained the same in the Reporting Period.

5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them

□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.




                                                               3
Konka Group Co., Ltd.
Interim Report 2020 (Summary)

6. Corporate bonds

Does the Company have any corporate bonds publicly offered on the stock exchange, which were
undue before the date of this Report’s approval or were due but could not be redeemed in full
Such information is disclosed as below:

(1) Basic Information of Corporate Bonds
                                                                                                                   Bonds
                                                                                                                  balance     Coupo
                    Name                          Abbr.         Code           Issue date         Due date
                                                                                                                 (RMB’0,0    n rate
                                                                                                                    00)
 Privately placed corporate bonds in 2019 of
 Konka Group Co., Ltd (Tranche I) (Variety     19 Konka 01    114418       14 January 2019    14 January 2022      100,000     5.00%
 I)
 Privately placed corporate bonds in 2019 of
 Konka Group Co., Ltd (Tranche I) (Variety     19 Konka 02    114423       14 January 2019    14 January 2022      150,000     5.00%
 II)
 Privately placed corporate bonds in 2019 of
 Konka Group Co., Ltd (Tranche II) (Variety    19 Konka 03    114488       3 June 2019        3 June 2022           50,000     4.50%
 I)
 Privately placed corporate bonds in 2019 of
 Konka Group Co., Ltd (Tranche II) (Variety    19 Konka 04    114489       3 June 2019        3 June 2022           50,000     4.70%
 II)
 Privately placed corporate bonds in 2019 of
 Konka Group Co., Ltd (Tranche III)            19 Konka 05    114523       22 July 2019       22 July 2022          80,000     4.53%
 (Variety I)
 Privately placed corporate bonds in 2019 of
 Konka Group Co., Ltd (Tranche III)            19 Konka 06    114524       22 July 2019       22 July 2022          70,000     4.70%
 (Variety II)

(2) Financial Indicators as at the End of the Reporting Period
               Item                            30 June 2020                  31 December 2019                   Change (%)
 Debt/asset ratio                                             77.16%                         76.69%                           0.47%
               Item                              H1 2020                           H1 2019                      Change (%)
 EBITDA-to-interest coverage
                                                                1.73                            2.75
 (times)                                                                                                                     -37.09%


Part III Operating Performance Discussion and Analysis

(I) Business Overview of Reporting Period

Is the Company subject to any industry-specific disclosure requirements?
No.
In the Reporting Period, the Company carried on with its long-term development strategy of
“Technology + Industry + Parks”. Focusing on “Semiconductor + New Consumer Electronics +
Technology Parks”, the Company continued to move towards a technology-driven platform. What the
Company has accomplished in the Reporting Period is summarized as follows:
1. R&D investment was stepped up to help the Company move towards a technology company. R&D
investment increased 64.14% in the Reporting Period compared to the same period of last year and
extended its reach to key areas in the upstream of the consumer electronics industry. In terms of its
consumer electronics business, the Company actively integrated cutting-edge technologies such as
8K, 5G, AI and IoT to its products. The APHAEA-A5 AI TV launched by the Company is a master



                                                                       4
Konka Group Co., Ltd.
Interim Report 2020 (Summary)


control system in smart home for it can connect to other smart appliances through voice control.
During the national “Two Sessions” in 2020, the Company took part in the building of a “5G+8K”
UHD live broadcasting system with its new Micro LED 8K TV. The program of “5G+ UHD
End-to-End Live Broadcasting System” led by the Company was selected in the “Top 10
Demonstration Programs of Shenzhen for 5G Application”. The programs of the Research and
Industrialization of the Next-generation Internet Intelligent Terminal Key Technology and the A
Method for Fuzzy Control of the Rotating Speed of Variable Frequency Compressor for Refrigerator,
both led by the Company, won the Guangdong Provincial Second Prize for Progress in Science and
Technology and the Henan Province Scientific and Technological Achievement Award respectively.
As for new businesses, construction of the closed beta test base for semiconductor in Yancheng has
commenced; and development of Micro LED-related technologies and products is in steady progress.
2. The Company continued to enhance branding. During the Reporting Period, branding was
enhanced to boost the appeal of the Company’s brand to technology lovers and young consumers
through the following measures, including participating in China’s central TV station CCTV’s Top
National Brands promotion program, planning events such as the 40th anniversary of Konka,
organizing a “5G+8K+satelite” UHD live broadcasting event for five cities in China to the audience
end of Xinhua News, being the only company in the industry to sponsor the online drama Cross Fire
(in Chinese: 《穿越火线》), etc. Branding expenditure increased 39.13% in the Reporting Period
compared to a year ago.
3. Affected by the COVID-19 pandemic, the Company saw a loss in the first quarter of 2020. As the
pandemic is contained, market demand is in recovery and the Company adopted various cost actions,
the second quarter of 2020 saw gradual improvement in the Company’s operating performance.
However, due to a year-on-year drop of 32.69% in operating revenue in the Reporting Period, net
profit attributable to the listed company’s shareholders was RMB95 million, down 73.15%
year-on-year.

(II) Matters Related to Financial Reporting

1. Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared
to Last Accounting Period

√ Applicable □ Not applicable
On 5 July 2017, the Ministry of Finance issued the Accounting Standard No. 14 for Business
Enterprises—Revenue (hereinafter, the “New Revenue Standard”) and required domestically listed
companies to implement the New Revenue Standard from 1 January 2020. Therefore, the Company
has implemented the New Revenue Standard from 1 January 2020.




                                                 5
Konka Group Co., Ltd.
Interim Report 2020 (Summary)

2. Retrospective Restatements due to Correction of Material Accounting Errors in Reporting
Period

□ Applicable √ Not applicable
No such cases.

3. Changes to Scope of Consolidated Financial Statements Compared to Last Accounting
Period

√ Applicable □ Not applicable
                                              How subsidiary was obtained or disposed       Effects on overall operations and
               Subsidiary
                                                     in the Reporting Period                     operating performance
 Zhongshan      Kangxin         Electronic
                                                        Newly established
 Technology Co., Ltd.
 Liaoyang     Kangshun          Intelligent
                                                        Newly established
 Technology Co., Ltd.
 Nanjing Konka Electronics Co., Ltd.                    Newly established
 Gaoping     Kangrun      Environmental
                                                        Newly established
 Protection & Water Co., Ltd.
 Mengcheng Kangrun Anjian Water Co.,
                                                        Newly established
 Ltd.
 Xixian   Kangrun    Xijian     Water
                                                        Newly established               Beneficial to the development of the
 Environment Development Co., Ltd.
                                                                                        Company’s relevant business
 Morsemi Semiconductor        Technology
                                                        Newly established
 (Hong Kong) Limited
 Chongqing    Kangxingrui       Scraped
                                                        Newly established
 Automobile Recycling Co., Ltd.
 Konka      Xinyun      Semiconductor
                                                        Newly established
 Technology (Yancheng) Co., Ltd.
 Chongqing Kanglei          Optoelectronic
                                                        Newly established
 Technology Co., Ltd.
 Yibin     Kangrun          Environmental
                                                        Newly established
 Technology Co., Ltd.
 Yuekang Semiconductor        Technology
                                                           De-registered                No material influence
 (Yantai) Co., Ltd.
 E3info (Hainan) Technology Co., Ltd.                                                   Beneficial to the development of the
 Shenzhen Konka Yifang Technology                         Transfer equity               Company’s relevant business and bring
 Co., Ltd.                                                                              about a certain amount of gains




                                                                                                 The Board of Directors
                                                                                                 Konka Group Co., Ltd.

                                                                                            27 August 2020




                                                                 6

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