2021-08-27-深交所-深纺织Ｂ_2021年半年度报告（英文版）_190页_2mb

Summary of Shenzhen Textile (Holdings) Co., Ltd. 2021 Semi-Annual Report

Core Content

The Shenzhen Textile (Holdings) Co., Ltd. (hereafter referred to as the Company) released its 2021 Semi-Annual Report in August 2021. The report outlines the company's financial performance, business operations, core competitiveness, and risk factors. It also provides definitions of key terms and highlights the company's management strategies, industry development, and corporate governance.

Main Business and Financial Highlights

Main Business

The company primarily engages in the LCD polarizer industry, which is a key upstream material for LCD panels and a critical component in the flat panel display industry. It also operates in property management and high-end textile and garment production.

During the reporting period, the company:

• Strengthened marketing and R&D efforts.
• Established long-term cooperative relationships with major downstream customers like Huaxing Optoelectronics, BOE, Sharp, LGD, Shenzhen Tianma, and Huike.
• Continued cost reduction and quality improvement through process optimization, logistics improvement, and technology upgrades.
• Successfully completed the Line 7 industrialization project for ultra-large-size TV polarizers, which entered mass production in July.
• Focused on asset revitalization by transferring and liquidating poorly managed shareholding enterprises.

Financial Performance

• Operating income increased to RMB 1,101,536,407.38, a year-on-year (YoY) increase of 28.64%.
• Total profit reached RMB 121 million, a YoY increase of 3,349.62%.
• Net profit attributable to shareholders amounted to RMB 76,603,074.39, a YoY increase of 10,543.24%.
• Basic and diluted earnings per share rose to RMB 0.1509, a YoY increase of 10,678.57%.
• Total assets increased to RMB 5,181,566,725.34, a YoY increase of 4.27%.
• Net assets attributable to shareholders reached RMB 2,822,952,777.84, a YoY increase of 2.05%.

Key Business Models and Strategies

The company has transitioned to a customer-centric business model, focusing on joint research and development, comprehensive services, and value creation. It aims to:

• Optimize product and customer structures.
• Improve internal management.
• Upgrade production technology.
• Broaden procurement channels and reduce production costs.
• Enhance market competitiveness.

The company also emphasizes:

• Quality control with certifications such as ISO9001, ISO14001, and OHSAS18000.
• Talent development through professional management teams and collaboration with Nitto Denko, a world-class polarizer manufacturer.
• Strategic management reforms to improve decision-making and market response speed.
• Policy support as a national high-tech enterprise, allowing it to benefit from duty-free imports of key raw materials and government financial support.

Industry Development and Market Position

• The Chinese mainland new display industry has shown positive growth, with higher growth rates than the global industry.
• LCD panel production capacity in mainland China is expected to reach over 70% of the world total by 2023.
• The polarizer industry in mainland China is facing a supply gap, presenting a favorable development opportunity for domestic manufacturers.
• The company is a leading player in the polarizer R&D, production, and sales in China, with strong market and policy advantages.

Risk Factors

The company faces the following risks:

• Macroeconomic risks.
• Market competition risks.
• Raw material risks.

For detailed information on these risks and the company's countermeasures, refer to Section III: Management Discussion & Analysis.

Non-Recurring Gains and Losses

The company did not recognize any non-recurring gains or losses during the reporting period. The non-recurring items were not classified as recurring.

Key Partners and Subsidiaries

• SAPO Photoelectric: A key subsidiary involved in polarizer R&D and production.
• Nitto Denko: A world-class polarizer manufacturer with which the company has technical cooperation.
• Jinjiang Group: A strategic partner with whom the company has cooperative relations.
• Other subsidiaries include Shenchao Technology, Beauty Century, Shenzhen Xieli, Jinxin Investment, Changxing Junying, and Huaiji Investment.

Information Disclosure

• The company's information disclosure is carried out through designated media such as Securities Times, China Securities Journal, Securities Daily, Shanghai Securities News, Hongkong Commercial Daily, and Juchao Website.
• No changes were made to the company's contact information, registered address, or website during the reporting period.

Conclusion

The report highlights the company's strong performance in the polarizer industry, driven by market demand, technological innovation, and strategic management reforms. It also outlines key advantages in technology, market position, quality control, and policy support, while acknowledging the challenges in the global market and supply chain. The company is actively working to optimize its business model, reduce costs, and enhance its market share in the growing flat panel display industry.