深华发B:2021年第一季度报告正文--英文版

Shenzhen Zhongheng Huafa Co. Ltd.Stock Code: 000020 200020 Public Notice No.:2021-10

Short Form of the Stock: SHEN HUAFA-A SHEN HUAFA- B

Shenzhen Zhongheng Huafa Co. Ltd.1Shenzhen Zhongheng Huafa Co. Ltd.

Section I. Important Notes

Board of Directors and the Supervisory Committee of Shenzhen Zhongheng

Huafa Co. Ltd (hereinafter referred to as the Company) and its directors

supervisors and senior executives should guarantee the reality accuracy and

completion of the quarterly report there are no any fictitious statements

misleading statements or important omissions carried in this report and shall

take legal responsibilities individual and/or joint.All Directors are attended the Board Meeting for Quarterly Report deliberation.Li Zhongqiu person in charge of the Company Yang Bin person in charger of

accounting works and Wu Ai’jie person in charger of accounting organ

(accounting officer) hereby confirm that the Financial Statement of this

Quarterly Report is authentic accurate and complete.

2Shenzhen Zhongheng Huafa Co. Ltd.

Section II. Basic situation of the Company

I. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data

□Yes √ No

At the same period of last Changes of this period over

Current period

year same period of last year

Operating income (RMB) 190936203.57 87800584.55 117.47%

Net profit attributable to shareholders of

5557677.31-400741.171489.06%

the listed company (RMB)

Net profit attributable to shareholders of

the listed company after deducting 5476703.89 -208179.52 2735.02%

non-recurring gains and losses (RMB)

Net cash flow arising from operating

-5125776.387931308.59-164.63%

activities (RMB)

Basic earnings per share (RMB/Share) 0.0197 -0.0014 1507.14%

Diluted earnings per share (RMB/Share) 0.0197 -0.0014 1507.14%

Weighted average ROE 1.64% -0.12% 1.76%

Changes of this period-end

At the end of the reporting

At the end of last year over same period-end of last

period

year

Total assets (RMB) 637523241.97 627779621.06 1.55%

Net assets attributable to shareholder of

341806414.60336248737.291.65%

listed company (RMB)

Items and amount of non-recurring gains and losses

√ Applicable □ Not applicable

In RMB

Amount from year-begin to

Item Note

period-end

Gains/losses from the disposal of non-current asset (including the

-6163.53

write-off that accrued for impairment of assets)

Governmental subsidy reckoned into current gains/losses (not

including the subsidy enjoyed in quota or ration according to

6000.00

national standards which are closely relevant to enterprise’s

business)

Gain or loss on the investment or management of assets 71186.44

3Shenzhen Zhongheng Huafa Co. Ltd.

Other non-operating income and expenditure except for the

10677.58

aforementioned items

Less: impact on income tax 727.07

Total 80973.42 --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies

Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to

the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their

Securities to the Public --- Extraordinary Profit/loss explain reasons

□ Applicable √ Not applicable

In reporting period the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of

extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to

the Public --- Extraordinary Profit/loss

II. Total number of shareholders at the end of this report period and top ten shareholders

1. Total number of common shareholders at the end of this report period and top ten common shareholders

In shares

Total preference shareholders

Total common stock shareholders in with voting rights recovered at

224560

reporting period-end end of reporting period (if

applicable)

Top ten shareholders

Amount of Number of share pledged/frozen

Shareholder’s Nature of Proportion of Amount of shares

restricted shares

name shareholder shares held held State of share Amount

held

Wuhan Domestic Pledged 116100000

Zhongheng non-state-owned 42.13% 119289894 0

Frozen 119289894

Group legal person

SEG (HONG Pledged 0

Overseas legal

KONG) CO. 5.85% 16569560 0

person Frozen 0

LTD.GOOD HOPE Pledged 0

CORNER Overseas legal

2.50%70720000

INVESTMENTS person Frozen 0

LTD.Changjiang Pledged 0

Securities

Overseas legal

Brokerage 1.89% 5355249 0

person Frozen 0

(Hongkong) Co.Ltd.

4Shenzhen Zhongheng Huafa Co. Ltd.

Guoyuan Pledged 0

Securities Overseas legal

1.37%38701170

Brokerage (Hong person Frozen 0

Kong) Limited

Overseas nature Pledged 0

Li Zhongqiu 1.00% 2830000 0

person Frozen 0

China Merchants Pledged 0

State-owned legal

Securities Hong 0.79% 2230608 0

person Frozen 0

Kong Co. Ltd.LI SHERYN Overseas nature Pledged 0

0.51%14461000

ZHAN MING person Frozen 0

Shengyin Pledged 0

Overseas legal

Investment Co. 0.50% 1408600 0

person Frozen 0

Ltd.Domestic nature Pledged 0

# Xu Xinfen 0.45% 1288000 0

person Frozen 0

Top ten shareholders with unrestricted shares held

Type of shares

Shareholder’s name Amount of unrestricted shares held

Type Amount

RMB common

Wuhan Zhongheng Group 119289894 119289894

Domestically

SEG (HONG KONG) CO. LTD. 16569560 listed foreign 16569560

Domestically

GOOD HOPE CORNER

7072000 listed foreign 7072000

INVESTMENTS LTD.shares

Domestically

Changjiang Securities Brokerage

5355249 listed foreign 5355249

(Hongkong) Co. Ltd.shares

Domestically

Guoyuan Securities Brokerage

3870117 listed foreign 3870117

(Hong Kong) Limited

Domestically

Li Zhongqiu 2830000 listed foreign 2830000

Domestically

China Merchants Securities Hong

2230608 listed foreign 2230608

Kong Co. Ltd.shares

5Shenzhen Zhongheng Huafa Co. Ltd.

Domestically

LI SHERYN ZHAN MING 1446100 listed foreign 1446100

Domestically

Shengyin Investment Co. Ltd. 1408600 listed foreign 1408600

RMB common

# Xu Xinfen 1288000 1288000

Among the top ten shareholders Li Zhongqiu is the actual controller of Wuhan Zhongheng

New Science & Technology Industrial Group Co. Ltd. and is a party acting in

Explanation on associated concert.Shengyin Investment Co. Ltd. is an overseas wholly-owned subsidiary of Wuhan

relationship among the aforesaid Zhongheng group.shareholders The Company neither knew whether there exists associated relationship among the other

shareholders nor they belong to consistent actors that are prescribed in Measures for the

Administration of Disclosure of Shareholder Equity Changes of Listed Companies.Explanation on top 10 common

shareholders involving margin N/A

business (if applicable)

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement

dealing in reporting period

□ Yes √ No

The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back

agreement dealing in reporting period.

2. Total shareholders with preferred stock held and shares held by top ten shareholders with preferred

stock held

□ Applicable √ Not applicable

6Section III. Significant Events

I. Particulars about material changes in items of main accounting statement and financial

index and explanations of reasons

√Applicable □Not applicable

Item March 31 2021 January 1 2021 Y-o-y changes Reasons of changes

Other receivables 2060681.11 4466949.96 -53.87% Decrease in current accounts

Inventory 103732453.57 70502773.52 47.13% Stocking in this period

The tax to be deducted is deducted for the

Other current assets 1129263.49 4255643.19 -73.46%

current period.Long-term prepaid Cloud service fee amortization

19361.3577445.31-75.00%

expenses

Short-term bank loans were increased in

Short-term loans 20921296.00 12527808.00 67.00%

the current period.The deposit received in advance has

Contract liabilities 171293.92 287140.66 -40.34%

decreased during the period.Employee The prepaid wages and expenses are paid

3106406.385737366.59-45.86%

compensation payable in the current period

Other payables 18556536.88 27608281.01 -32.79% Decrease in current accounts

Short-term loans increased in the current

Interest payable 63086.88 26335.66 139.55%

period.January to March January to March Reasons of changes

Item Y-o-y changes

20212020

Operating income 190936203.57 87800584.55 117.47% Increase in orders this period

Operating cost 160692426.33 73672446.25 118.12% Increase in orders this period

Sales expense 9604962.16 3448537.85 178.52% Increase in orders this period

Increased in R&D investment in this

R&D expenses 1990208.94 908285.77 119.12%

period

Amortization of deferred income for the

Other income 119520.00 64770.00 84.53%

current period

Increase in financial income during the

Investment income 71186.44 37415.02 90.26%

current period

Government subsidy income from the

Non-operating income 19464.75 5492.44 254.39%

previous period

Non-operating Liquidated damages occurred in the

8950.00263835.56-96.61%

expenses previous period

Income tax expense 1360875.84 -85032.71 -1700.41% Increase in profit for the period

Item January to March January to March Y-o-y changes Reasons of changes2021 2020

Cash received from Increase in sales collection in this period

the sale of goods and

118847638.9286584529.5837.26%

the provision of labor

services

Cash paid for Increase in orders this period

purchasing goods and

90764568.4156760923.4159.91%

receiving labor

services

Cash paid to and for Increase in orders this period

18034045.238467600.61112.98%

employees

Taxes paid 8114109.92 2351100.26 245.12% Increase in orders this period

Cash received from Margin interest increased in this period

71186.4437415.0290.26%

investment income

Net cash received Disposal of old equipment in the previous

from the disposal of period

fixed assets intangible 13000.00 91000.00 -85.71%

assets and other

long-term assets

Cash paid for the Purchase production equipment in this

purchase and period

construction of fixed

1624675.50467211.58247.74%

assets intangible

assets and other

long-term assets

Other cash paid Bank wealth management decreased in

relating to investing - 25000000.00 -100.00% this period

activities

Cash received from Increase in short-term loans

20710525.006725056.80207.96%

loans

Other cash paid Increase acceptance margin in this period

relating to financing 6408886.53 -

activities

Influence on cash and The impact of exchange rate fluctuations

cash equivalents due in the current period

-124286.4132336.78484.35%

to fluctuation in

exchange rate

II. Analysis and explanation of significant events and their influence and solutions

√ Applicable □Not applicable

(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology IndustrialGroup Co. Ltd (hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to in

the announcement dated 30 April 2009) and pursuant to the contract since part of the assets of the Company

(namely two parcel of industrial lands located at Huafa road Gongming town Guangming new district Shenzhen

(the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763 No. of parcels were A627-005

andA627-007 and the aggregate area was 48200 sq.m) were the lands listed in the first batch of plan for 2010

Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint

cooperation the Company has not completed the transfer procedures in respect of the aforesaid land.The Company convoked the first extraordinary meeting of the Board in 2015 on February 16 2015 and the first

extraordinary general meeting of the Board in 2015 on March 4 2015 which considered and approved the“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area atGongming street Guangming new district Shenzhen” specified that the Company and Wuhan Zhongheng Group

shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots

and the respectively contributed and constructed above-ground buildings before the land development it is

estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total

consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of

2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewaland the progress of related transactions of ‘the updated units at Huafa Area Gong Ming Street Guangming NewDistrict Shenzhen’” the company has signed the “Agreement on the cooperation of urban renewal project of theupdated units at Huafa Area Gong Ming Street Guangming New District Shenzhen” “Contract for thecooperative venture of reconstruction project for Huafa Industrial Park Gong Ming Street Guangming NewDistrict” and “Agreement on housing acquisition and removal compensation and resettlement” with Wuhan

Wuhan Zhongheng Group Shenzhen Vanke Real Estate Co. Ltd. (hereinafter referred to as “Shenzhen Vanke”)and Shenzhen Vanke Guangming Real Estate Development Co. Ltd. (hereinafter referred to as “VankeGuangming”).On 12 September 2016 Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation ofurban renewal project of the updated units at Huafa Area Gong Ming Street Guangming New District Shenzhen”

against the Company and Wuhan Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) has

given a ruling in August 2017. On August 29 2018 the court accepted the compulsory execution application of

Shenzhen Vanke. In October 2019 as a number of outsiders filed an “execution objection” and applied for “noexecution” to Shenzhen Intermediate People’s Court the Shenzhen Intermediate People’s Court ruled to terminate

the enforcement procedure on March 20 2020. If the “execution objection” and “no execution” proposed by

outsiders are rejected according to law Shenzhen Vanke may continue to apply to the Shenzhen Intermediate

People’s Court to resume execution. Progress of the case found more in the Notices released on Juchao website

dated 14 Sept. 2016 1 Nov. 2016 16 Nov. 2016 on 18 Feb. 2017 24 March 2017 25 April 2017 1 July 2017 18August 2017 9 Feb. 2018 25 Aug. 2018 and 7 Sept. 2018 respectively.(ii) On 31 December 2015 the 88750047 shares held by Wuhan Zhongheng Group are pledge to China

Merchants Securities Assets Co. Ltd. with due date of 31 December 2016. On 1 Feb. 2016 Wuhan Zhongheng

Group pledge the 27349953 shares held to China Merchants Securities Assets Co. Ltd. with due date of 31

December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expired

on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end

of this period released controlling shareholder still not removed the pledge and the Company has apply by letter

relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice

released on Juchao website date 2 Feb. 2018.Wuhan Zhongheng Group received the first-instance judgment of Guangdong Higher People’s Court to the

“pledged securities repurchase dispute” case sued by China Merchants Securities Asset Management Co. Ltd. in

March 2021. Wuhan Zhongheng Group refused to accept the judgment and has appealed to the Supreme People's

Court the judgment of first instance has not yet taken effect. For details please refer to the company

announcement issued by the company on www.cninfo.com.cn on March 19 2021.(iii) The controlling shareholder Wuhan Zhongheng Group holds 119289894 shares of the Company’ stock

accounting for 42.13% of the total share capital of the Company of which 116489894 shares were judicially frozen

by Shenzhen Intermediate People's Court (hereinafter referred to as "Shenzhen Intermediate Court") on September

27 2016 which were frozen again by the Shenzhen Intermediate People's Court on December 14 2018 with a

frozen period of 36 months; the remaining 2800000 shares were frozen by the Shenzhen Intermediate People's

Court on May 29 2019 and were frozen again by the Higher People’s Court of Guangdong Province on July 5

2019. For details please refer to the company’s announcements published on Juchao Website dated October 27

2016 January 11 2019 May 31 2019 and August 7 2019.

(iv) On September 29 2016 the company and its controlling shareholder Wuhan Zhongheng Group signed the

“Agency Contract” with V&T Law Firm. On October 8 2016 the three parties also signed the “SupplementalAgreement for Agency Contract” it was agreed that V&T acted as an agent for the company and Wuhan

Zhongheng Group to deal with the arbitration case with Shenzhen Vanke. After losing the lawsuit due to

differences in the payment of attorney fees V&T sued our company and Wuhan Zhongheng Group to the

Shenzhen Court of International Arbitration and applied to the court to seize a bank account under our company’sname and part of our company dormitories please refer to “Other Announcements on the Progress InvolvingLitigation and Arbitration” (Announcement Numbers: 2018-43 2019-02) released by our company on Juchao

Website dated November 14 2018 and March 6 2019. 02. In November 2019 the Shenzhen Court of

International Arbitration ruled that the company and Wuhan Zhongheng Group paid the corresponding fees.According to the “Agency Contract” and “Supplemental Agreement for Agency Contract” signed by the threeparties the loss of the arbitrament in this case was borne by Wuhan Zhongheng Group so it had no impact on thecompany’s profit. For details see the company’s “Other Announcements on the Progress Involving Litigation andArbitration” (Announcement No.: 2019-34) released on Juchao Website dated November 25 2019.Summary of important issues Disclosure date Interim report disclosure index

Implementation progress of shares buy-back

□ Applicable √ Not applicable

Implementation progress of the reduction of repurchases shares by centralized bidding

□ Applicable √ Not applicable

III. Commitments completed in Period and those without completed till end of the Period

from actual controller shareholders related parties purchaser and companies

□ Applicable √ Not applicable

The Company has no commitments completed in Period and those without completed till end of the Period from actual controller

shareholders related parties purchaser and companies.IV. Financial asset investment

1. Securities investment

□ Applicable √ Not applicable

No security investment in the Period.

2. Derivative investment

□ Applicable √ Not applicable

No derivative investment in the Period.V. Progress of investment projects with raised funds

□ Applicable √ Not applicable

VI. Prediction of business performance from January – June 2021

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the

warning of its material change compared with the corresponding period of the last year and explanation on reason

□ Applicable √ Not applicable

VII. Major contracts for daily operations

□ Applicable √ Not applicableVIII. Trust financing

□ Applicable √ Not applicable

No trust financing in the Period.IX. Guarantee outside against the regulation

□Applicable √Not applicable

The Company had no guarantee outside against the regulation in the period.X. Non-operational fund occupation from controlling shareholders and its related party

□ Applicable √ Not applicable

The Company had no non-operational fund occupation form controlling shareholders and its related party in the period.XI. Registration form for receiving research communication and interview in the report

period

√ Applicable □ Not applicable

Main content

Reception Type of Index for the interview

Date Method Object and information

location investors and research

provided

Understand the

company's

production and

Office of the operation

BOD locates in Telephone situation