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个股公告正文

张 裕B:2017年年度报告摘要(英文版)

日期:2018-04-23附件下载

    Shares Code: 000869, 200869 Shares Abbreviation: Changyu A, Changyu B Notice No.: 2018-Final01
    
    Yantai Changyu Pioneer Wine Co. Ltd. 2017 Annual Report Abstract
    
    1. Important Warning
    
    This Annual Report abstract comes from the whole contents of annual report. If investors desire to
    
    comprehend the Company’s operating results, financial situation and future development plan, please
    
    read the Annual Report on the media specified by the China Securities Regulatory Commission.
    
    Objections statement of directors, supervisors & senior managers
    
     Name                         Position                       Content and reason
    
    
    Statement
    
    Except the following directors, all other directors have personally attended the meeting for
    
    deliberating the annual report.
    
     Director  name  with  Director   post   with  Reason for non-present  Name of mandatory
     non-present in person    non-present in person    in person
     Sun Liqiang            Director               Business trip           Zhou Hongjiang
     Antonio Appignani      Director               Business trip           Augusto Reina
     Wang Shigang          Independent director     Business trip           Wang Zhuquan
    
    
    Non-standard audit opinion notice
    
    □Available ?Not available
    
    The preliminary scheme of the report period’s common stock profit distribution or increasing equity
    
    with reserve deliberated by the board of the directors
    
    ?Available □Not available
    
    Whether to increase equity with reserve
    
    □Yes ?No
    
    The Company’s preliminary scheme of common stock profit distribution deliberated and passed by
    
    the board of the directors is as following: Based on the Company total 685,464,000 shares,we plan
    
    to pay CNY 5 in cash as dividends for every 10 shares (including tax) to the Company’s all
    
    shareholders, send 0 bonus(including tax) and capital reserve will not be transferred to equity.
    
    The preliminary scheme of this report period’s preferred share profit distribution deliberated and
    
    passed by the board
    
    □Available ?Not available
    
    2. Brief Introduction of the Company
    
    (1) Company introduction
    
    Abbreviation of the Shares:        Changyu A,   Code number of the Shares        000869,
                                    Changyu B                                   200869
    Place of listing of the Shares       Shenzhen Stock Exchange
    Abbreviation of the Shares after    -
    alteration (if have)
    Contact person and information    Secretary to the Board of     Authorized Representative of the
                                    Directors                   Securities Affairs
    Name                           Mr. Qu Weimin             Mr. Li Tingguo
    Address                         56   Dama   Road,   Yantai, 56    Dama    Road,    Yantai,
                                    Shandong, China            Shandong, China
    Fax                             0086-535-6633639          0086-535-6633639
    Tel                             0086-535-6633656          0086-535-6633656
    E-mail                          quwm@changyu.com.cn     stock@changyu.com.cn
    
    
    (2) Main businesses during the report period or product brief introduction
    
    During the report period, the Company’s main business is to produce and operate wine and brandy,
    
    thus providing the domestic and foreign consumers with healthy and fashionable alcoholic drinks.
    
    Compared with earlier stage, there are no significant changes happened to the Company’s main
    
    businesses. The wine industry that the Company involved in is still in the growth stage, the whole
    
    domestic wine market is on the rising trend. The Company takes the dominant position in the
    
    domestic wine market.
    
    (3) Key accounting data and financial indicators
    
    ①Key accounting data and financial indicators in recent three years
    
    Whether the Company makes retroactive adjustments or restates the accounting data of previous
    
    fiscal years because of changes of accounting policy and/or accounting errors.
    
    □Yes ?No
    
    Unit: CNY
    
            Item              2017             2016       More or less than        2015
                                                             Lastyear (%)
    Business revenue    4,932,545,229       4,717,596,472      4.56%            4,649,722,368
    Net profit attributed
    to the shareholders of 1,031,695,056       982,460,488       5.01%            1,030,073,860
    the listed company
    Net profit attributed
    to the shareholders of
    the listed company   986,095,872         941,730,478       4.71%            993,268,823
    after deducting the
    irregular profit and
    loss
    Net cash flows from
    the operating        973,243,027         889,911,970       9.36%            1,143,046,367
    activities
    Basic earnings per   1.51               1.43             5.59%            1.5
    share (CNY/share)
    Diluted earnings per  1.51               1.43             5.59%            1.5
    share (CNY/share)
    Weighted average for
    earning rate of the    12.14%            12.55%           -0.41%           14.40%
    net assets
                          Dec. 31st 2017     Dec.31st 2016    More or lessthan    Dec.31st 2015
                                                             Last year (%)
    Total assets         12,536,755,208      11,528,077,971     8.75%            10,344,211,461
    Net Assets attributed 8,906,342,299       8,209,010,989      8.49%            7,564,099,003
    to the shareholders of
    the listed company
    
    
    ②Key financial indicators by quarter
    
    Unit: CNY
    
                              1st Quarter        2nd Quarter       3rd Quarter       4th Quarter
    Business revenue       1,896,586,469      870,511,728        1,030,899,920      1,134,547,112
    Net profit attributed to   516,634,494        153,434,560        146,115,408       215,510,594
    the shareholders of the
    listed company
    Net profit attributed to   512,684,945        140,221,430        138,825,432       194,364,065
    the shareholders of the
    listed company after
    deducting the irregular
    profit and loss
    Net cash flows from the 384,358,508        36,001,811         386,267,511       166,615,197
    operating activities
    
    
    Whether there are differences between the above mentioned financial indicators or their sum and the
    
    related financial indicators in the quarterly reports and semi-annual reports disclosed by the
    
    Company.
    
    □Yes ?No
    
    (4) Capital stock and shareholders’ situation
    
    ① Number of common stockholder and preferred shareholder recovering voting power, and situation of shares held by top ten
    
    shareholders
    
    Unit: share
    
                                                                                                      Total number of preferred
                                               Totalnumberof               Totalnumberofpreferred         shareholder recovering
                                               commonshareholders          shareholderrecovering
    Total shareholdersinthereportperiod        48,966 bytheendoflastmonth   44,606 votingpowerbytheend        0 voting powerby the end        0
                                               before thedisclosure           ofreportperiod                of last monthbefore the
                                               day oftheannualreport                                     disclosure day of the
                                                                                                      annual report
                                                    Thetop10shareholdersholdingsituation
                                                               Percentage   Shareshelduntiltheend   Numberof       Pledgedorfrozen
             NameofShareholders          Characterofshareholders                 ofthereportperiod      restricted
                                                                  (%)                              shares     Sharestatus    Amount
     YANTAI CHANGYUGROUPCO.LTD.  Domesticnon-state-owned 50.40%        345,473,856           345,473,856
                                             legalperson                                                     --           0
            GAOLING FUND,L.P.           Foreignlegalperson   3.08%         21,090,219            21,090,219    --           0
      CHINASECURITIESFINANCECORP   State-ownedlegalperson 2.32%         15,924,155            15,924,155    --           0
      BBHBOSS/AFIDELITYFD-CHINA     Foreignlegalperson   2.22%         15,241,826            15,241,826
                 FOCUSFD                                                                                  --           0
              GUOTAI JUNAN             Foreignlegalperson   1.00%         6,881,493             6,881,493
      SECURITIES(HONGKONG)LIMITED                                                                      --           0
     FIDELITYPURITANTRUST:FIDELITY                      0.89%         6,100,762             6,100,762
      SERIESINTRINSICOPPORTUNITIES     Foreignlegalperson                                                  --           0
                   FUND
           CENTRALHUIJINASSET        State-ownedlegalperson 0.69%         4,761,200             4,761,200
            MANAGEMENT LTD.                                                                             --           0
      VANGUARDEMERGINGMARKETS     Foreignlegalperson   0.55%         3,788,487             3,788,487
            STOCK INDEXFUND                                                                             --           0
          FIDELITYCHINASPECIAL         Foreignlegalperson   0.55%         3,779,202             3,779,202
              SITUATIONSPLC                                                                              --           0
               NORGESBANK              Foreignlegalperson   0.52%         3,558,797             3,558,797     --           0
    The explanationfortheassociatedrelationshipand    Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or
    accordant action                              accordant action relationship with the other 9 listed shareholders, and the relationship among the other
                                               shareholders isunknown.
    Explanation forshareholderswhoinvolvedin        Thetop10shareholdersdonotinvolveinfinancingactivitiesandstocktradebusiness.
    financing activitiesandstocktradingbusiness(ifany)
    
    
    ②Number of preferred shareholder and situation of preferred shares held by top ten preferred shareholders
    
    □Available ?Not available
    
    There are no shares held by preferred shareholders during the report period.
    
    ③Introduction for property right and control relations between the Company and its actual controllers
    
    Yantai Guofeng Investment
    
    Illva Saronno Holding Spa Holdings Co., Ltd
    
    (5) Company Bonds
    
    Whether the Company exists public offering and lists on the Stock Exchange, and the Company is
    
    unable to fully pay company bonds in the approved announcement date of this annual report before
    
    maturity or in the maturity date.
    
    No.
    
    3. Management Discussion and Analysis
    
    (1) Brief introduction of operation situation during the report period
    
    Whether the Company need to follow the disclosure requirement of special business?
    
    No.
    
    ①Summary
    
    In 2017, influenced by the slowdown of domestic economic growth, the overall domestic wine
    
    industry was relatively stable and the demand in wine maintained the growth momentum with small
    
    amplitude, but the impact from imported wine became ever more severe and entire domestic wine
    
    brands were weak; owing to significant decrease in production of international and domestic
    
    wine-making grapes, the price of bulk wine increased by a large margin; based on environmental
    
    protection and governance factors, the cost of packing materials continued increasing; with the
    
    investment projects’ gradually putting into operation, the depreciation of fixed assets increased.
    
    Above-mentioned adverse factors brought bigger challenges for the Company to achieve sustained
    
    and steady growth. Facing quite a lot of external disadvantages, the Company insisted in taking the
    
    market as the center, insisted the development strategy of “Focus on middle-and-high level, Focus on
    
    high quality, Focus on big product”, comprehensively implemented the development strategy of
    
    same importance between wine and brandy, optimized product structure and market layout,
    
    accelerated the development of new product and did best to promote product sales, achieving good
    
    results and realizing business income of CNY4932.55million with an increase of 4.56% compared
    
    with last year and net profit of CNY1031.69 million belonging to the parent company’s shareholders
    
    with an increase of 5.01% compared with last year.
    
    ②Analysis of main business
    
                               Increase ordecreaseof
             Description          theendoftheperiod             Causeofsignificantchanges
                               overtheendoflastyear
    Operating revenue                          4.56%Mainly becauseofincreaseinsalesvolume
    Operating cost                             6.08%Mainly becauseofincreaseinsalesvolume
    Sales expense                              1.54%Mainly because of year-on-year increase in wage &
                                                  welfare,advertisingpromotionfeein2017
    Management expense                       10.01%Mainly because of year-on-yearincreaseindepreciation
                                                  costandofficeexpensein2017
    R&D investment                           0.34%Mainly because of increase in expenses for technology
                                                  researchanddevelopmentin2017
    Financial expense                         -15.38%Mainly becauseofdecreaseinloaninterestexpenditure
    Net amountofcashflow                      9.36%Mainly because of increase in received cash from
    generated inoperatingactivities                     productsalesandrenderingofservice
    Net amountofcashflow                           Mainlybecauseofincreaseinfixedtermdepositatleast
    generated ininvestmentactivities             -19.31%three  months and cash used to acquire overseas
                                                  enterprise
    Net amountofcashflow                           Mainly because of decrease in received cash from loan,
    generated incapital-raising                 -494.03%pledge loansecuritydepositandinterest
    activities
    
    
    Review and summary of the process of the Company’s early-disclosed development strategy and
    
    business plan during the report period
    
    During the report period, the Company realizes the business income of CNY4.93255billion with an
    
    increase of 4.56% compared with last year, exceeding the target fixed at the beginning of the year of
    
    realizing business income no less than CNY4.9billion. Facing to the unfavorable business
    
    environment, the Company insists the development trend of “Focus on middle and high level, Focus
    
    on high quality, Focus on big product”, fully implement the development strategy of same
    
    importance between wine and brandy, pushes hard on harmonious development of multi-liquor,
    
    which played an important part in realizing the increase in the business income.
    
    The main work during the report period is shown as followed:
    
    Firstly, the Company further integrated and perfected marketing system, accelerated new products’
    
    launch in market, energetically developed E-business and export business and strengthened the
    
    management in market, achieving good results. During the report period, the Company optimized
    
    and integrated middle-and-low channel and B-category supermarket semi-direct supply company as
    
    well as distributors selling Castel, Noble Dragon or other main products, pushed out new products,
    
    such as 9th-generation Noble Dragon, new Zuishixian, Reserve five-star brandy and Cabernet
    
    Sauvignon dry white wine and so on, strived to expand E-business and export business and
    
    intensified the punishment to fleeing goods, effectively protecting distributors’ interest and realizing
    
    various degrees of increase in brandy, imported wine and other liquor as well as online sales and
    
    export business.
    
    Secondly, the research for new products and new technologies was continued being conducted and the
    
    quality management was strengthened in order to improve technological level and product quality.
    
    The Company carried out 44 technology research, obtained 3 scientific and technological
    
    achievements at ministerial and provincial level, newly applied and obtained authorization of 8
    
    national patent. The Company undertook three projects about Yantai scientific and technological
    
    development plan, including “Selection Research and Development Application of New Strain about
    
    Premium and Characteristic Grape Variety Cabernet Gernischt in Yantai Producing Region”, which
    
    passed result authentication and acceptance of China National Light Industry Council and Yantai
    
    Science and Technology Bureau and reached international advanced level. “Establishment and
    
    Application of Quality Evaluation and Control System about Premium Wine-making Grape Material
    
    and Wine” won first prize of China General Chamber of Commerce
    
    scientific and technological progress. The Company perfected quality control system, strengthened
    
    supervision, inspection and punishment degree, reinforced monitoring in key quality safety
    
    indicators, making product quality steadily improve. 2015 Golden-label Icewine of Changyu Golden
    
    Icewine Valley won special gold medal in 2017 IWSC. 2014 Merlot dry red wine of Xinjiang Changyu
    
    Balboa Family won gold medal in 2017 Decanter Asia Wine Awards.
    
    Thirdly, informatization construction was steadily promoted and the market service ability of
    
    production system had a bigger improvement. The Company completed the construction of projects,
    
    such as first-phase ERP informatization of SAP and order production system of chateau wine and so
    
    on; fully implement the order production mode of chateau wine, shortened production cycle, reduced
    
    fund occupation and intensified management in the logistics link of chateau wine, effectively
    
    preventing the overstock of products; further standardized submission procedure of production and
    
    sales plan, assuring the timely grasp in the implementation situation of order and improving the level
    
    of market service ability of production system.
    
    Fourthly, the procurement of raw materials, such as grapes, was completed successfully and the
    
    management in grape base was further strengthened. The Company comprehensively accomplished
    
    the procurement plan of raw material, such as grapes, and further deepened sort management and sort
    
    acquisition in grape base, making scientific and normative management in grape base reach a higher
    
    level; perfected grape purchase policy, improving the stable development of grape base; improved
    
    grape purchase standard and promoted raw material quality; actively introduced new grape variety,
    
    conducted selection and improvement work, cultivated a lot of new varieties, enriching the variety
    
    resource for future product development; took series of technology research and promotion work on
    
    how to improve raw material quality in self-supporting base and organized orchardist to take
    
    professional training on grape planting technology for many times, improving their level of grape
    
    planting and management.
    
    Fifthly, the Company continued promoting internationalization strategy and steadily implemented
    
    overseas acquisition. This company, together with LAMBO SpA, establishes a joint venture
    
    enterprise Indomita Wine Company Chile, SpA (Chinese name: 智利魔狮葡萄酒简式股份公司,
    
    for short “Indomita Wine”). After establishment, as transferee, Indomita Wine acquires 100% equity
    
    of all three subsidiaries under Chile Bethwines. In addition, the Company reached the agreement in
    
    acquiring 80% equity of Kilikanoon Estate Pty Ltd in Australia with transferor.
    
    ③Revenue, sales and cost
    
    1) Composition of operating incomes
    
    Unit: CNY
    
                   2017                           2016
                                                                                 Year-on-year
     `                               Proportionin                     Proportionin  increaseor
                   Amount            operating     Amount            operating     decrease(%)
                                     incomes                         incomes
     Total         4,932,545,229        100%        4,717,596,472        100%        4.56%
     operation
     revenue
     Industry-classified
     Industryof
     liquorand      4,932,545,229        100%        4,717,596,472        100%        4.56%
     alcoholic
     beverage
     Product-classified
     Wine         3,829,326,556        77.63%       3,700,806,317        78.45%       3.47%
     Brandy        989,889,728         20.07%       905,687,936         19.20%       9.30%
     Others        113,328,945         2.30%        111,102,219         2.36%        2.00%
     Area-classified
     Domestic      4,497,288,066        91.18%       4,437,302,746        94.06%       1.35%
     Abroad        435,257,163         8.82%        280,293,726         5.94%        55.86%
    
    
    2) Sales
    
     Sector          Project          Unit           2017           2016           Year-on-year
                                                                                increaseor
                                                                                decrease(%)
                    Salesvolume     Ton            104,016         98,958                   5.11%
     Wine
                    Production       Ton            97,620          99,784                  -2.17%
                    Salesvolume     Ton            39,130          40,171                  -2.59%
     Brandy
                    Production       Ton            37,666          43,262                 -12.93%
    
    
    3) Composition of operating costs
    
    Unit: CNY
    
     Sector      Project        2017                      2016                       Year-on-year
                                                                                  increaseor
                             Amount        Proportion   Amount         Proportion   decrease(%)
                                           in the                       inthe
                                           operating                    operating
                                           cost (%)                     cost(%)
                Blending      711,224,945     56.16%      692,570,791      57.49%      -1.32%
                liquor
                Packing       395,026,889     31.19%      372,613,924      30.93%      0.27%
     Wine      material
                Wages       47,843,744      3.78%       44,895,195       3.73%       0.05%
                manufacturing  112,295,874     8.87%       94,704,442       7.86%       1.01%
                cost
                Blending      204,764,927     58.12%      187,495,081      58.99%      -0.87%
                liquor
                Packing       117,982,142     33.49%      105,943,197      33.33%      0.15%
     Brandy     material
                Wages       9,678,688       2.75%       11,965,588       3.76%       -1.02%
                manufacturing  19,903,211      5.65%       12,441,839       3.91%       1.73%
                cost
    
    
    ④Costs
    
    Unit: CNY
    
                                                            Year-on-year        Explanation     of
                       2017               2016               increaseordecrease   significantchanges
                                                            (%)
                                                                              Mainly because of
                                                                              year-on-year
     Salesexpense       1,272,522,443        1,253,260,668        1.54%             increase in wage &
                                                                              welfare, advertising
                                                                              promotion  fee  in
                                                                              2017
                                                                              Mainly because of
                                                                              year-on-year
     Management        340,781,958         309,783,548         10.01%            increase        in
     expense                                                                   depreciation   cost
                                                                              and office expense
                                                                              in2017
                                                                              Mainly because of
     Financialexpense    18,590,259          21,968,859          -15.38%           decrease  in  loan
                                                                              interestexpenditure
    
    
    ⑤Cash flow
    
    Unit: CNY
    
                                                                              Year-on-year
    Item                                    2017                 2016         increase     or
                                                                              decrease(%)
    Subtotal ofcashinflowinoperating    4,965,586,341          4,525,609,466          9.72%
    activities
    Subtotal ofcashoutflowinoperating   3,992,343,314          3,635,697,496          9.81%
    activities
    Net amountofcashflowgeneratedin  973,243,027            889,911,970            9.36%
    operating activities
    Subtotal ofcashinflowininvestment   216,678,355            112,952,925            91.83%
    activities
    Subtotal ofcashoutflowininvestment  1,036,886,116          800,394,471            29.55%
    activities
    Net amountofcashflowgeneratedin  -820,207,761           -687,441,546           -19.31%
    investment activities
    Subtotal ofcashinflowin           1,064,892,130          1,191,567,445          -10.63%
    capital-raising activities
    Subtotal ofcashoutflowin          1,307,993,557          1,232,491,837          6.13%
    capital-raising activities
    Net amountofcashflowgeneratedin  -243,101,427           -40,924,392            -494.03%
    capital-raising activities
    Net increaseofcashandcash         -76,053,030            164,700,643            -146.18%
    equivalents
    
    
    ⑥Assets and liabilities situation
    
    Unit: CNY
    
                 Attheendof2017              Attheendof2016              Proportion
                                                                         increaseor   Explanation on
                                   Proportion                    Proportion  decrease     majorchanges
                 Amount            inthetotal  Amount            inthetotal
                                   assets(%)                    assets(%)  (%)
    Monetary     1,402,522,509       11.19%    1,391,517,607       12.07%    -0.88%      -
    funds
    Receivables   263,796,355         2.1%      173,062,628         1.50%     0.6%       -
    Inventory     2,473,614,046       19.73%    2,248,609,740       19.51%    0.22%      -
    Investment real 18,467,989          0.15%                       0%       0.15%      -
    estate
    Long-term
    equity        0                 0%                         0%       0%         -
    investments
                                                                                    Mainly
                                                                                    because  parts
                                                                                    of construction
    Fixed assets   5,329,083,969       42.51%    4,683,187,493       40.62%    1.89%      projects  have
                                                                                    been
                                                                                    transferred  to
                                                                                    fixedasset
                                                                                    Mainly
                                                                                    because  parts
    Construction in                                                                    of construction
    progress      1,026,141,569       8.19%     1,346,281,737       11.68%    -3.49%      projects  have
                                                                                    been
                                                                                    transferred  to
                                                                                    fixedasset
    Short-term    714,434,286         5.70%     662,388,882         5.75%     -0.05%      -
    borrowings
    Long-term     156,125,854         1.25%     49,140,555         0.43%     0.82%      -
    borrowings
    
    
    ⑦Expectation for the Company’s future development
    
    On the basis of our limited experience and special skills, we make the following estimation of the wine
    
    sector and the Company’s future development:
    
    1) The sector competition setup and development trend
    
    Under the slowdown effect of national macroscopic economy growth, the operation situation of the
    
    Company will become more severe, plus the change of the alcohol consumption environment, leading to
    
    difficulties in selling high-end products; Consumers tend to be more rational, which requires Changyu to
    
    make more efforts in improving the cost performance of products; Owing that influx of plenty of
    
    imported wines would further compress the domestic wine market shares and the new channels such as
    
    E-commerce cause great impact on the traditional sales channels, the competition in the domestic wine
    
    industry will still be fierce at present and in the future long time; Raw material cost, freight and
    
    depreciation expense and other expenses are likely to increase, bringing big pressure to the Company’s
    
    profitability. But in the long run, thanks to increase in their income, more and more people would pursue
    
    health and fashion life mode and the people would be in more favor of wines which fit quite well with
    
    the trend of consumption, ceaselessly stimulating the demands for premium wine. This decides that the
    
    Chinese wine industry owns a huge market development potential, especially that brandy and wine with
    
    high price ratio might have a faster growth. In addition, with the increased consumption by domestic
    
    middle class, “drink less, drink good, drink healthily” will become future tendency and wine will keep
    
    continuous and rapid development trend in China. In such a case of long-term coexistence of
    
    opportunities and challenges, those enterprises that possess strong brand influence and marketing ability,
    
    catch the opportunities, actively take adjustments, make full use of newly emerging and traditional sales
    
    channels, timely satisfy the consumers’ demands and provide products with high price ratio will have the
    
    opportunity to be the final winner of competition and then form a new structure of the future Chinese
    
    wine market.
    
    2) The Company’s development strategy
    
    The Company will insist the development direction of “Focus on middle-and-high level, Focus on high
    
    quality, Focus on big product”, comprehensively implement the development strategy of same
    
    importance between wine and brandy, endeavour to promote the harmonious development of various
    
    liquor; actively expand the scope of consumption field and marketing mode, industriously develop
    
    middle-and--high-end wines and brandy, strengthen the marketing level of imported wine and strive to
    
    provide consumers with a rich variety of products in high price ratio.
    
    3) Management plan in new year
    
    In 2018, the Company will try its best to realize business income of not less than CNY5.2 billion and
    
    control the main operating costs and three period expenses below CNY3.7 billion.
    
    4) The measures the Company will take
    
    In order to better catch the opportunities and face the challenges, the Company will take full advantage
    
    of self-owned advantages, adhere to market-orientation, intensify internal adjustment and reformation
    
    degree, enlarge subsidiaries’ autonomous right in operation, increase enterprise vitality, implement the
    
    performance assessment mode of mainly focusing on profit, pay attention to following aspects in 2018 in
    
    order to achieve the annual operation target:
    
    Firstly, the Company will insist the development direction of focusing on middle-and-high-level products,
    
    focusing on high quality and focusing on big product. Based on product Characteristics, the Company
    
    will further clear brand positioning of wine, brandy and imported liquor and insist in focusing on the
    
    strategy of developing middle-and-high-level products. The Company will further perfect quality
    
    management traceability system and actively promote the construction of product quality traceability
    
    informatization system; build raw material base in premium wine-making grape region including France,
    
    Chile and Australia and so on in order to improve the scientific management level of domestic base and
    
    to assure the stable supply of premium bulk wine; take international advanced level as benchmarking,
    
    confirmedly promote high quality strategy, improve internal quality and external appearance of products
    
    in order to achieve the comprehensive transcendence to major competitive products. The Company will
    
    centralize resources to make several big products at different levels, through which the Company could
    
    promote the continuous improvement of the Company’s brand awareness and influence.
    
    Secondly, the Company will reform sales system to build new sales system that could adapt to
    
    development requirement. The Company will further perfect the relatively-independent sales system
    
    construction of wine, brandy and imported liquor to promote comprehensive development of various
    
    liquor; through downsizing staff and improving efficiency, perfecting salary system and other measures,
    
    increase the salary of sales personnel, improve their work enthusiasm and stimulate the market vitality;
    
    strengthen system construction of backbone distributor, build unified customer complaint system facing
    
    distributors and customers, improve their internal motivation in selling Changyu products; focus on
    
    brand image of “Internationalization, High Quality”, actively develop the export business and improve
    
    brand influence.
    
    Thirdly, the Company will carry out order mode and promote informatization system construction for
    
    production and sales plan. The Company will accelerate the informatization system construction, roundly
    
    promote order-driven mode, build the company into a smart factory, significantly improve the market
    
    service capacity of production system, reduce the inventory scale and fund occupation, thoroughly sole
    
    the problem of disconnection between production and sales.
    
    Fourthly, the Company will strengthen finance governance to perfect evaluation system whose principal
    
    line is profit. The Company will establish the assessment system taking profit as main line to improve
    
    profitability; strengthen profit assessment in self-supporting grape base, perfect the budget management
    
    of various expense and control operating cost; optimize the Company’s analysis system of consolidated
    
    statement and financial assessment to improve supervision efficiency of financial assessment; continue
    
    reinforcing the management of major expense and consumption level; actively strive for project loan and
    
    policy-based fund loan to reduce loan cost; reinforce tax planning and reduce tax bearing level.
    
    Fifthly, the Company will reinforce supervision and administration function to improve management
    
    level of overseas acquired enterprise. The Company will faithfully strengthen operation management of
    
    overseas asset to assure the healthy operation of overseas acquired enterprise; improve the positivity of
    
    overseas management team and build overseas acquired enterprise to be “International Marketing
    
    Platform”, “Grape Resource Platform” and “Technology Communication Platform” through series
    
    measures, such as reinforcing the third-party audit and perfecting enthusiasm policy and so on.
    
    Sixthly, the Company will reasonably delegate power to lower levels and reinforce monitoring
    
    simultaneously to improve enthusiasm of subsidiaries. Meanwhile the Company delegates more
    
    autonomy in management to subsidiaries, the C will also reinforce supervision to ensure that the
    
    subsidiaries could maintain right development direction and operation trajectory.
    
    Seventhly, the Company will steadily promote the construction of investment projects to assure the
    
    project quality. The Company will accelerate to complete the commissioning work of production
    
    lines in research and development center, improve production stability and give full play to high
    
    efficiency of production lines; accelerate to promote putting Tinlot chateau and Koya chateau into
    
    operation; complete the construction of second-phase SAP project in Changyu industrial park
    
    (Yantai Changyu international wine city).
    
    (2) Whether major business has significant changes during the report period?
    
    □Yes ?No
    
    (3) The condition of products accounting for over 10% in the Company’s main operating
    
    incomes or main operating profits
    
    ?Available □Not available
    
    Unit: CNY
    
                                                                Year-on-y  Year-on-y  Year-on-y
                                                                ear        ear        ear
                                                      Gross     increaseor  increaseor  increaseor
                Operating income      Operatingcost       profitrate  decrease    decrease    decrease
                                                                (%)of     (%)of     (%)of
                                                                operating   operating   gross
                                                                income     cost       profitrate
     Wine       3,829,326,556         1,266,391,452       66.93%    3.47%     5.11%     -0.52%
     Brandy      989,889,728          352,328,968         64.41%    9.30%     10.85%    -0.50%
    
    
    (4) Whether there are features of operating seasonality or periodicity required special attention
    
    □Yes ?No
    
    (5) Explanation for the operating income, operating cost, total net profit attributed to the
    
    common shareholders of the listed company or constituting major changes compared with
    
    former report period
    
    □Available ?Not available
    
    (6) Face of suspension and termination of listing
    
    □Available ?Not available
    
    (7) Related items involving financial report
    
    ①Explanation for the changes of the accounting policy, accounting estimation and accounting
    
    method
    
    ?Available □Not available
    
    In accordance with related regulation of Ministry of Finance, the Company plans to change the
    
    accounting policy about “Government Grants”. Detailed information are shown as follows:
    
    Before the change: The Company executes 《Accounting Standard for Business Enterprises No. 16 -
    
    Government Grants》involved in《Notification of Ministry of Finance on Printing and Distributing 38
    
    Items of Specific Standards Including 
    
    (Cai Kuai [2006] No.3) printed and distributed by Ministry of Finance on February 15th, 2006. Hereby,
    
    the Company classifies received government grants into “Non-operating Income” on the basis of
    
    benefit period.
    
    After the change: The Company executes《Accounting Standard for Business Enterprises No. 16 -
    
    Government Grants》(Cai Kuai [2017] No.15) formulated by Ministry of Finance. For the rest unchanged
    
    parts, the Company will still execute relevant standards and regulations published by Ministry of Finance
    
    on February 15th, 2006. Hereby, the accounting treatment in government grants will be divided into three
    
    classes: firstly, loan interest subsidy offsets “Financial Expense”; secondly, it is classified into “Other
    
    Income”; thirdly, those that are not relevant with operating activity are classified into “Non-operating
    
    Income”.
    
    ②During the report period, the situation explanation for the correction of major accounting
    
    errors which need to be retrospect and restated
    
    □Available ?Not available
    
    There is no situation for the correction of major accounting errors which need to be retrospect and
    
    restated.
    
    ③Compared with the previous year’s financial report, explanation for the changes of the
    
    consolidated statements scope.
    
    ?Available □Not available
    
    ①On May 11th, 2017, this company, together with LAMBO SpA signed Agreement among Shareholders
    
    and Price Adjustment Agreement, establishes a joint venture enterprise Indomita Wine Company Chile,
    
    SpA (Chinese name: 智利魔狮葡萄酒简式股份公司, for short “Indomita Wine”) with an investment
    
    of USD4,190,000. This Company offers USD40,110,000, holding 85% equity of Indomita Wine. After
    
    establishment, as transferee, Indomita Wine offers USD47,190,000, acquiring 100% equity of all three
    
    subsidiaries under Chile Bethwines. On July 1st, 2017, this Company completed all the prerequisites
    
    regarding share purchase, obtaining the control of three subsidiaries under Chile Bethwines. During the
    
    report period, Indomita Wine and its subsidiaries all are included in the consolidate scope.
    
    ②On January 18th, 2017, this company newly establishes Sales & Marketing Company of Yantai
    
    Changyu Pioneer Wine Company Limited with the registered capital of CNY5million and the business
    
    scope of wholesale business and retail business. This newly established company is included in the
    
    consolidate scope during the report period.
    
    Yantai Changyu Pioneer Wine Co. Ltd.
    
    Board of Directors
    
    April 23rd, 2018

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