Stock Code: 000869 200869 Stock Abbreviation: Changyu A Changyu B Announcement No.:2020-Final03
Yantai Changyu Pioneer Wine Co. Ltd.
2020 Semi-annual Report Abstract
1. Important Notice
This Semi-annual Report abstract comes from the full text of Semi-annual Report. If investors desire
to comprehensively understand the Company’s operating results financial situation and future
development plan please read the Semi-annual Report on the media specified by the China
Securities Regulatory Commission.
Except following directors all other directors have personally attended the meeting for deliberating
this Semi-annual Report.
Director name with
non-present in person
Director post with
non-present in person
Reason for non-present
in person
Name of mandatory
Enrico Sivieri Director
Affected by COVID-19
epidemic
Zhou Hongjiang
Stefano Battioni Director
Affected by COVID-19
epidemic
Zhou Hongjiang
Aldino Marzorati Director
Affected by COVID-19
epidemic
Leng Bin
Liu Qinglin Independent Director Due to official business Yu Renzhu
Non-standard audit opinion notice
□Available?Not available
The pre-arranged planning of profit distribution for ordinary share or the pre-arranged planning of
increasing capital stock with accumulation fund during the report period deliberated by the board of
the directors
?Available?Not available
The Company plans not to distribute cash dividend or give bonus shares or increase capital stock
with accumulation fund.The pre-arranged planning of profit distribution for preferred share during the report period
deliberated and passed by the board of directors
□Available?Not available
2. Basic information of the Company
1) Brief introduction of the Company
Abbreviation of Shares: Changyu A ChangyuB Code number of the Shares 000869 200869
Place of listing of Shares Shenzhen Stock Exchange
Contact person and information Secretary of Board of Directors
Authorized Representative of
Securities Affairs
Name Mr. Jiang Jianxun Mr. Li Tingguo
Address
56 Dama Road Yantai Shandong
China
56 Dama Road Yantai Shandong
China
Tel 0086-535-6602761 0086-535-6633656
E-mail jiangjianxun@changyu.com.cn stock@changyu.com.cn
2) Key accounting data and financial indicators
Whether the Company makes retroactive adjustments or restates the accounting data of previous
fiscal years
□Yes ?No
During the report period
In the same period of last
year
Increase rate (%)
Business revenue (CNY) 1401606792 2558274785 -45.21%
Net profit attributed to the
shareholders of the listed company
(CNY)
307035572 603403789 -49.12%
Net profit attributed to the
shareholders of the listed company
after deducting the irregular profit and
loss (CNY)
266766849 552490695 -51.72%
Net cash flows from the operating
activities (CNY)
-29652821 499476006 -105.94%
Basic earnings per share (CNY/share) 0.45 0.88 -48.86%
Diluted earnings per share
(CNY/share)
0.45 0.88 -48.86%
Weighted average for earning rate of
the net assets
2.93% 6.13% -3.20%
The end of this report
period
The end of last year Increase rate (%)
Total assets (CNY) 13286972498 13647932568 -2.64%
Net Assets attributed to the
shareholders of the listed company
(CNY)
10131114317 10308910198 -1.72%
3) Situation for the number of shareholders and shareholdings of the Company
Unit: share
Total common shareholders at the
end of report period
44334
Total number of preferred shareholder recovering voting power at the end of report
period (if have)
0
Shareholdings of the top 10 shareholders
Name of Shareholder Character of shareholder
Shareholding
ratio
Shareholding
amount
Number of restricted
share
Pledged or frozen
Share status Amount
YANTAI CHANGYU GROUP
CO. LTD.
Domestic non-state-owned legal
person
50.40% 345473856 0 0
GAOLING FUNDL.P. Foreign legal person 3.08% 21090219 0 0
CHINA SECURITIES FINANCE
CORP
State-owned legal person 2.25% 15440794 0 0
BBH BOS S/A FIDELITY FD -
CHINA FOCUS FD
Foreign legal person 2.22% 15241826 0 0
SHENWAN HONGYUAN
SECURITIES(HONG KONG)
LIMITED
Foreign legal person 1.20% 8235333 0 0
HONG KONG SECURITIES
CLEANING CO. LTD.
Foreign legal person 1.14% 7815014 0 0
FIDELITY PURITAN TRUST:
FIDELITY SERIES INTRINSIC
OPPORTUNITIES FUND
Foreign legal person 0.93% 6350762 0 0
GUOTAI JUNAN
SECURITIES(HONGKONG)
LIMITED
Foreign legal person 0.76% 5224746 0 0
CENTRAL HUIJIN ASSET
MANAGEMENT LTD.
State-owned legal person 0.69% 4761200 0 0
HAITONG INTERNATIONAL
SECURITIES COMPANY
LIMITED- ACCOUNT CLIENT
Foreign legal person 0.60% 4139187 0 0
Explanation for above shareholders’ associated relationship or
concerted action
Among the top 10 shareholders Yantai Changyu Group Company Limited has no associated relationship
or concerted action relationship with the other 9 circulating shareholders and the relationship among the
other shareholders is unknown.
Explanation for shareholders’ who are involved in securities margin
trading business (if have)
The top 10 shareholders are not involved in securities margin trading business.
4)Changes in controlling shareholders or actual controllers
Changes in the controlling shareholders during the report period
□Available?Not available
There is no change in the controlling shareholders during the report period.
Changes in the actual controllers during the report period
□Available?Not available
There is no change in the actual controllers during the report period.
5)Total number of preferred shareholders of the Company and shareholding status of the top 10 preferred shareholders
□Available?Not available
There is no shareholding status of preferred shareholders during the report period.
6)Situation of corporation bonds
Whether or not there are the Company’s corporation bonds issued in public and listed in the stock exchange but not due on the issuance date
approved in the semi-annual report or failing to pay in full on the due date
No.
3. Management Discussion and Analysis
1) Brief introduction of operation situation during the report period
Whether the Company need to comply with the disclosure requirements of a particular industry
The Company is not required to comply with the disclosure requirements of special industries and
the operating conditions during the report period are as follows:
①Summary
During the report period affected by many factors such as the slowdown of domestic economic
growth increased uncertainty caused by Sino-US trade frictions and COVID-19 epidemic domestic
wine consumption has experienced a sharp decline and market competition is very fierce. The sales
of both domestic wine and imported wine continued the “double decline” trend over the past two
years. Some wine production and operation enterprises got into trouble. Facing quite a lot of
unfavorable factors while taking the protection of the health of employees and cooperative partners
as the top priority of the work the Company actively resumed all aspects of work based on the
unified arrangements of the state and the actual situation. The Company insisted in taking the marketas the center insisted the development strategy of “Focus on high quality Focus on middle-and-highlevel Focus on big product” and the marketing concept of “Increasing sales from the terminal andcontinuously-cultivated consumers” without wavering and strove to promote product sales. In the
first half year the Company realized the business income of CNY 1401.61 million with a
year-on-year decrease of 45.21% and the net profit attributable to shareholders of the parent
company realized CNY 307.04 million with a year-on-year decrease of 49.12%. During the report
period the Company mainly did following work:
Firstly the Company bended over backwards to raise anti-epidemic materials carried out the
prevention and control measures and fight against the epidemic. After the outbreak the Company
immediately formulated relatively strict epidemic prevention and control measures regulated
responsibilities at various levels paid close attention to relevant policies and measures and epidemic
developments and conducted publicity and guidance work to employees and partners through
various tools such as WeChat in order to guide them to respond correctly not to be panic not to
believe and spread rumors and to spread positive energy. By contacting overseas acquisition
companies and overseas partners the Company purchased large numbers of anti-epidemic materials
such as masks and protective clothing that are shortage in domestic from eight countries including
Australia Spain Chile France South Korea Japan Malaysia and Thailand and also provided a
large amount of anti-epidemic materials to the Company’s overseas enterprises when the foreign
epidemic situation is severe better meeting the anti-epidemic needs of domestic and foreign
employees and partners.Secondly the Company vigorously assisted distributors to accelerate product sales. After the
outbreak of the epidemic due to the drastic reduction in dinner gatherings and the slowdown in sales
of alcoholic beverages there were greater pressures on distributors’ inventory. The Company
actively took efforts to make measures and maintained daily communication with distributors
through calls SMS WeChat FaceTime etc. to keep abreast of the market situation and to ensure the
normal development of business to the greatest extent. After the country released the restrictions on
personnel flow the Company’s marketing team seized various opportunities and rushed to the front
line of the market to carry out marketing activities within the scope of the policy and make great
efforts to promote product sales alleviating the pressure on distributors’ inventory and funds and
ensuring the healthy operation in sales channels.Thirdly the Company re-marked brand positioning focused on strategic brands and improved brand
manager system. The Company divided the brands of all kinds of alcoholic products into four levels
strategic brand key brand cooperative brand and independent brand according to the resource input
team input and future pursuit goals. Among them the strategic brand is the brand built with the
strength of the whole company which will be promoted by the main sales team and is the main
brand for future sales growth; the key brand is the brand that remains the current investment and
policies basically unchanged; the cooperative brand is the brand that the company does not invest in
resources and basically does not use the power of the sales team which grows mainly in virtue
of external forces and through actively seeking cooperation with large businessmen. For domestic
wine the Company formed 7 brand manager systems containing Moser AFIP and Golden Ice
Valley Castel and Baron Balbon Rena Castle Noble Dragon Zenithwirl and J-Lormin. For Brandy
the Company formed a marketing department system for four major brands including Koya
Five-star Mminni and Pagese. For imported wine the Company has formed four brand teams
including Kilikanoon Indomita Atrio and Mirefleurs. The Company reviewed summarized
evaluated and improved the marketing contents provided by each brand manager in order to
practically guide the market preliminarily improving the creation and implementation of marketing
contents of each brand system.
Fourthly the Company correctly understood the market development situation and further improved
the marketing system. During the report period with the rapid development of IT and the push from
COVID-19 “online shopping” accelerated to replace “offline shopping” “experiential scenario”
accelerated to replace “traditional physical shop” “online customer acquisition mode” accelerated to
replace “traditional customer acquisition mode” and “online office” accelerated to replace
“traditional office”. In order to better adapt to the new market development trends while
consolidating the advantages of traditional channels the Company vigorously promoted digital
marketing transformation made better use of blockchain technology exploited new ways for
consumers to interact deeply online and widely attract member customers by virtue of the brand
applet and Smart Retail Mall applet developed by Tencent in order to further enhance customer
stickiness empower distributors conduct offline diversion for them provide big data analysis for
regional consumers and accelerate the integration of online and offline businesses. Adopting the ideaof “Establishing images and maintaining price system for nationwide brands focusing on sales ofbrands owned by E-commerce company” for Noble Dragon the Company proposed to adopt the
online mode of “1+4” that made the sales in existing E-commerce company continue growing
stronger and bigger and newly developed four major online enterprises and launched four individual
sets of products to be sold online; for Brandy and Zenithwirl the Company adopted the mode of
“Mainly based on big online enterprises and supplemented by the E-commerce company” to strive to
expand the scale of online sales.
Fifthly the Company continued strengthening quality management and continuously improved
product quality. In accordance with the quality improvement programme the Company increased
investment in key links and key equipment affecting product quality. It established brand winemaker
system completed the selection and appointment salary settings and work procedures settings of
winemakers at all levels clarified the core requirements of winemakers at all levels in product shelf
life blind tasting result international awards external quality and presentation ability and signed
work commitment letter with every winemaker to further clarifying the quality improvement
responsibilities of winemakers giving full play to the professional potential of winemakers. It
strengthened the integration of both global raw materials and global winemakers and selected
first-class outsourcing design companies for product appearance design to reach the requirement of
“not stunning not to public”. Besides that the Company established a dual quality evaluation system
of internal quality management departments plus external consumers to evaluate the quality in an
all-around way and connected the evaluation results with the income of the person in charge of
production.Sixthly the Company strengthened financial management and internal audit to prevent operational
risks. During the report period the Company mainly strengthened capital management budget
management and tax planning reduced capital occupation improved capital turnover efficiency and
enhanced the pertinence and effectiveness of budget management. It further improved the financial
management system for overseas enterprises and focused on monitoring the cash flow to avoid debt
repayment risks. It conducted special audit in key expenses conducted off-office audit in key
personnel conducted settlement audit in technological transformation and infrastructure projects
and investigated personnel accountable for economic losses ensuring the full implementation of the
Company’s management and control system. It also conducted a comprehensive investigation
statistic and analysis to the inventory of Changyu products held by distributors which provided
important decision-making basis for operating management.Seventhly the Company accelerated the reform of employment system and improved the capacity ofthe team. During the report period the Company implemented the employment strategy of “Strictlycontrol the number of new recruits and release the restriction in demission” raised the standards for
employing new recruits adopted the mode of “survival of the fittest” and improved the overall
capacity of the sales team through “upgrade simplification and absorption”.In order to achieve the business objectives set by the Company at the beginning of the year the
Company will focus on following work in the second half of 2020:
Firstly the Company will take “pursuing market health” as the top priority to implement
distributor-level code scanning during inbound and outbound and establish the timely reporting and
monitoring system for distributors’ inventory. It will establish “limited quantity” and “reducedquantity” rules to distributors selling core products which will be associated with cross region sales
sales at low price and online sales and so on. In addition the Company will strengthen the flight
audit in allopatric warehouses cost and distributors’ inventory. It will also vigorously continue
promoting the order-driven system to prevent malicious cross region sales sales at low price and
illegal online sales so as to maintain the overall stability and smoothness of the Company’s sales
system.Secondly the Company will further clarify brand and product positioning clearly divide strategic
brands key brands cooperative brands and independent brands formulate marketing scheme based
on “life taste+ health concepts+ consumption guidance” distribute market resources on the basis of
brand positioning and do well in brand building and new product market cultivation in order to better
play the role of different brands in promoting and driving product sales.Thirdly the Company will strengthen the marketing assessment determine market personnel’s
income promotion and dismission through considering the market health degree and the indicator
assessment results adhere to the assessment of proportion of salary in sales amount and proportion
of sales expense in pre-tax sales amount and promote the integration of regional logistics and
distribution center in order to better control the market costs.
Fourthly the Company will further improve the brand winemaker system and continue significantly
improving product quality. It will take the best-selling product in domestic and overseas at the
similar price as the benchmark strive to realize a comprehensive surpassing in product quality and
cost performance.
Fifthly the Company will accelerate the pace of digital marketing transformation work closely with
Tencent and other outsourcing units to do well in the production of products integrating
“anti-cross-region-sales code + marketing code + anti-counterfeiting code” launch brand applet and
Smart Retail Mall applet and strengthen cooperation with major online business so as to constantly
expand the sales scale of the Company’s online products.Sixthly the Company will implement the Youth Excellent Talent Plan and adopt the way of “tutorleading apprentices” for tracking and training to provide more job exchanges and market practice
opportunities for outstanding talents which will enhance working ability and broaden promotion
channels.Seventhly the Company will scientifically formulate the procurement plan of grapes and other raw
materials according to the industry development trend and the Company’s future development in
order to fully complete the procurement work of raw materials this year.
②Analysis of main business
i. Change in major financial data on year-on-year basis
Unit: CNY
In the report
period
In the same period
of last year
More or less
(%)
Reason for changes
Operating revenue 1401606792 2558274785 -45.21%
Mainly owing to the year-on-year decrease in sales volume affected by
COVID-19 epidemic
Operating costs 574650677 936252225 -38.62%
Mainly owing to the year-on-year decrease in sales volume affected by
COVID-19 epidemic
Sales expenses 250531046 591970801 -57.68%
Mainly owing to the year-on-year decrease in marketing activities and
marketing input affected by COVID-19 epidemic
Administration expense 113069869 155552312 -27.31%
Mainly owing to the year-on-year decrease in employee compensation
repair charge and administrative expenses
Financial expense 11961102 8789583 36.08% Mainly owing to the significant year-on-year increase in long-term loan
Income tax expense 109689969 210281578 -47.84%
Mainly owing to the significant year-on-year decrease in total profit caused
by the reduce in profitability affected by COVID-19 epidemic
Net cash flow from
operating activities
-29652821 499476006 -105.94%
Mainly owing to the significant year-on-year decrease in received cash from
selling products and providing labor service affected by COVID-19
epidemic
Net cash flow from
investment activities
-39726131 -114534608 65.32%
Mainly owing to the significant year-on-year decrease in the cash outflow
for investment activities including purchase and construction of fixed assets
and fixed time deposit etc
Net cash flow from
financing activities
4704625 -18128357 125.95%
Mainly owing to the year-on-year increase in received cash from obtaining
bank loan
Net increased amount of
cash and cash equivalents
-64982286 366866743 -117.71%
Mainly owing to the significant year-on-year decrease in received cash from
selling products and providing labor service affected by COVID-19
epidemic
ii. Composition of operating revenue
Unit: CNY
This report period The same period of last year
Year-on-year increase or
decrease (%) Amount
Proportion in operating
revenue
Amount
Proportion in operating
revenue
Total operating revenue 1401606792 100% 2558274785 100% -45.21%
Sector-classified
Sector of liquor and
alcoholic beverage
1401606792 100% 2558274785 100% -45.21%
Product-classified
Wine 993972425 70.92% 1928554268 75.38% -48.46%
Brandy 372909239 26.61% 563451068 22.02% -33.82%
Tourism 22217264 1.59% 42604382 1.67% -47.85%
Others 12507864 0.89% 23665067 0.93% -47.15%
Area-classified
Domestic 1183622477 84.45% 2330780056 91.11% -49.22%
Overseas 217984315 15.55% 227494729 8.89% -4.18%
iii. The cases of industry product or area accounting for over 10% in the Company’s operating revenue or operating profits
Unit: CNY
Operating
revenue
Operating
cost
Gross
margin
Year-on-year increase or
decrease (%) of operating
revenue
Year-on-year increase or
decrease (%) of operating
cost
Year-on-year increase or
decrease (%) of gross
profit rate
Sector-classified
Sector of liquor and
alcoholic beverage
1401606792 574650677 59% -45.21% -38.62% -4.40%
Product-classified
Wine 993972425 397080517 60.05% -48.46% -41.62% -4.68%
Brandy 372909239 164881016 55.79% -33.82% -28.22% -3.45%
Tourism 22217264 6492009 70.78% -47.85% -47.25% -0.33%
Others 12507864 6197135 50.45% -47.15% -56.10% 10.10%
Area-classified
Domestic 1183622477 442340877 62.63% -49.22% -44.09% -3.43%
Abroad 217984315 132309800 39.30% -4.18% -8.84% 3.10%
Explanation on the causes of over 30% year-on-year changes of the related comparison data
During the report period the Company’s operating revenue and operating costs as well as the operating revenue and operating costs of wine
brandy tourism and domestic business all decreased significantly over the same period of last year mainly due to the decline in the sales
volume of products affected by COVID-19 epidemic.
③ Assets and liabilities situation
i. Major changes in assets
The end of this report period The end of the same period of last year Proportion increase
or decrease
(%)
Explanation for major changes
Amount
Proportion in the
total assets (%)
Amount
Proportion in the total
assets (%)
Monetary funds 1476207055 11.11% 1848632953 13.81% -2.70%
Mainly owing to the year-on-year decrease in
the cash inflow for operating activities affected
by COVID-19 epidemic
Account receivable 167738633 1.26% 186131192 1.39% -0.13% No major change
Inventory 2936133260 22.10% 2606781436 19.48% 2.62%
Mainly owing to the year-on-year increase in
work-in-process including bulk wine at the end
of report period
Investment real estate 28344687 0.21% 30560470 0.23% -0.02% No major change
Long-term equity investment 42810445 0.32% 0 0% 0.32%
Mainly owing to the establishment of SAS
L&M HOLDINGS
Fixed assets 5818499845 43.79% 5684612653 42.48% 1.31%
Mainly owing to the transfer-in of construction
in process during the report period
Construction in process 647036593 4.87% 789872373 5.90% -1.03%
Mainly owing to the transfer of construction in
process into fixed assets during the report
period
Short-term borrowing 737183701 5.55% 678170667 5.07% 0.48%
Mainly owing to the increase in short-term bank
loan in the second half year of last year
Long-term loan 218613336 1.65% 165949250 1.24% 0.41% No major change
ii. Limitations of assets rights up to the end of the report period
For the limitations of assets rights up to the end of the report period please refer to Announcement
on External Guarantee (Announcement no.:2016- temporary 021) Announcement on External
Guarantee (Announcement no.:2018- temporary 020) Announcement on External Guarantee
(Announcement no.:2019- temporary 038) and Announcement on Guarantee provided by Spanish
Atrio Company for Bank Loan (Announcement no.:2020- temporary 013) disclosed on China
Securities Journal Securities Times and CNINFO (http://www.cninfo.com.cn/).
(2) Items related to financial report
①Compared with the financial report of the previous accounting period explanation for the
changes of accounting policy accounting estimation and accounting method
?Available□Not available
During the report period the Company made changes to the accounting policy implemented for
“Income” in accordance with the relevant regulations of the Ministry of Finance. For other
information about changes in accounting policy please refer to Announcement on Changes in
Accounting Policy (Announcement no.: 2020- temporary21)
②The situation explanation for the correction of major accounting errors which need to be
retrospect and restated during the report period
□Available?Not available
There is no situation for the correction of major accounting errors which need to be retrospect and
restated.
③Compared with the financial report of the previous accounting period explanation for the
changes of the consolidated statements scope
?Available ?Not available
There is no change of consolidated statements scope during the report period.Yantai Changyu Pioneer Wine Co. Ltd.
Board of Directors
August 28
th
2020
