[年报]东旭B:2016年年度报告（英文版）
Dongxu Optoelectronic Technology Co., Ltd. 2016 Annual Report March 2017 I. Important Notice, Table of Contents and Definitions The Board of Directors ,Supervisory Committee, all directors, supervisors and senior executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. Mr.Li Zhaoting, The Company leader, Mr.Zhou Bo, Chief financial officer and the Mr.Gao Feipeng, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in this annual report. All the directors attended the board meeting for reviewing the Annual Report. The development strategy, operation plan and other forward-looking statements involved in this report will not constitute any substantive commitment to the investors by the Company. Investors please be aware of the investment risks. The company has already described the risk items existed in details in the report with reference to (IV) possible risks of IX Future Development and Prospect in Section IV Operation Conditions Discussion and Analysis. The profit distribution proposal reviewed and approved by the boarding meeting was summarized as follows: total share of 4,939,928,983 for Base on the Company‘s total share capital as at December 31,2016, the Company would distribute cash dividend to all the shareholders at the rate of CNY 0.70 for every 10 shares(including tax), 0 bonus share (including tax) and no reserve would be converted into share capital. Table of Contents I.Important Notice, Table of contents and Definitions II. Basic Information of the Company and Financial index III. Outline of Company Business IV. Management’s Discussion and Analysis V. Important Events VI. Change of share capital and shareholding of Principal Shareholders VII. Situation of the Preferred Shares VIII. Information about Directors, Supervisors and Senior Executives IX. Administrative structure X. Corporate Bond XI. Financial Report XII. Documents available for inspection Definition Terms to be defined Refers to Definition Company Law Refers to Company Law of the People’s Republic of China Securities Law Refers to Securities Law of the People’s Republic of China CSRC Refers to China Securities Regulatory Commission SZSE Refers to Shenzhen Stock Exchange Dongxu Group Refers to Dong Xu Group Co., Ltd. Baoshi Group Refers to Shijiazhuang Baoshi Electronics Group Co., Ltd Dongxu Optoelectronic , Company, The Company Refers to Dongxu Optoelectronic Technology Co., Ltd. Dongxu（Yingkou）Optoelectronic Refers to Dongxu（Yingkou）Optoelectronic Display Co., Ltd. Sichuan Xuhong Optoelectronic Refers to Sichuan Xuhong Optoelectronic Technology Co., Ltd. Wuhu Optoelectronic Refers to Wuhu Dongxu Optoelectronic Technology Co., Ltd., was the implementation unit of the non-public item to raise money for and invest in of “The Project of Production Line for Panel Display Plate” in 2013 Wuhu Equipment Refers to Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. Shijiazhuang Equipment Refers to Shijiazhuang Dongxu Optoelectronic Equipment Technology Co., Ltd. Dongxu (Kunshan ) Refers to Dongxu（Kunshan）Display material Co., Ltd.， In 2015, was the implementation unit of the non-public item to raise money for and invest in “Project of Production Line for the 5th-generation CF for TFT-LCD”. Sichuan Ruiyi Refers to Sichuan Ruiyi Construction Engineering Co., Ltd. Fuzhou Optoelectronic Refers to Dongxu Optoelectronic Technology Co., Ltd.， In 2016, was the non-public item to raise money for and invest in “Project of Production Line for the 8.5th-generation CF for TFT-LCD” BOE Refers to BOE Technology Group Co., Ltd. IVO Refers to Infovision Optoelectronics Co., Ltd. CPT Refers to Chunchwa Picture Tubes Co., Ltd. CRT Refers to Cathode Ray Tube TFT-LCD Refers to "Thin Film Transistor Liquid Crystal Display" Glass substrate Refers to A thin glass sheet with extremely smooth surface is a basic component of constituting LCD display device as well as one of the critical basic materials in panel display industry. The glass sheet can be divided into various generations by its size, and the higher the generation is, the bigger the size will be. G5 glass substrate Refers to The size of the 5th-generation glass substrate is 1100 mm×1300 mm. G6 glass substrate Refers to The size of the 6th-generation glass substrate is 1500 mm×1850 mm. G8.5 glass substrate Refers to The size of the 8.5th-generation glass substrate is 2300 mm×2500 mm CF Refers to Critical original materials of LCD panel for realizing colorization display Polaroid Refers to A two-dimensional carbon material composed of carbon atoms closely and cyclically packed by benzene ring structures (ie, hexagonal honeycomb structures) Grapheme materials Refers to Refers to two-dimensional carbon materials related to grapheme, with a layer less than 10 carbon atoms II. Basic Information of the Company and Financial index I. Company Information Stock abbreviation Dongxu Optoelectronic, Dongxu B Stock code： 000413、200413 Stock abbreviation after change (if any) Dongxu Optoelectronic, Dongxu B Stock exchange for listing： Shenzhen Stock Exchange Name in Chinese 东旭光电科技股份有限公司 Chinese Abbreviation 东旭光电 English name (If any) Dongxu Optoelectronic Technology Co., Ltd. English abbreviation (If any) Dongxu Optoelectronic Legal Representative Li Zhaoting Registered address No.9, Huanghe Road, Shijiazhuang High-tech Industrial Development Area, Shijiazhuang, Hebei Province Postal code of the Registered Address 050035 Office Address No.5 Court, No.23 A Fuxing Road, Haidian District, Beijing Postal code of the office address 100036 Internet Web Site www:dongxuguangdian.com.cn [email protected] II. Contact person and contact manner Board secretary Securities affairs Representative Name Gong Xin Wang Qingfei Contact address No.5 Court, No.23 A Fuxing Road, Haidian District, Beijing No.5 Court, No.23 A Fuxing Road, Haidian District, Beijing Tel 010-68297016 010-68297016 Fax 010-68297016 010-68297016 [email protected] [email protected] III. Information disclosure and placed Newspapers selected by the Company for information disclosure China Securities Journal ,Shanghai Securities News,Securities Times, Securities Daily and Hong Kong Commercial Daily Internet website designated by CSRC for publishing the Annual report of the Company http://www.cninfo.com.cn The place where the Annual report is prepared and placed Securities Dept of the Company IV. Registration changes of the Company Organization Code No Change Changes in principal business activities since listing (if any) No Change Changes is the controlling shareholder in the past (is any) No Change V. Other Relevant Information CPAs engaged Name of the CPAs Hebei Guanghuacai Guanghua Certified public Accountants LLP. Office address 4/F,Anqiao Business Building , No.77 Guangan Street, Changan District, Shijiazhuang Names of the Certified Public Accountants as the signatories Wang Fengqi, Meng Xiaoguang The sponsor performing persist ant supervision duties engaged by the Company in the reporting period. √Applicable □Not applicable Name Office address Representative Consistent supervision period Guangzhou Securities Co., Ltd. 19-20/F, Guangzhou International Finance Center Tower , No.5 Zhujiang West Road, Tianhe District ,Guangzhou. Wu Jian, Wang Hongwei 2016.3.21-2017.12.31 The sponsor performing persist ant supervision duties engaged by the Company in the reporting period. □ Applicable √ Not applicable VI. Summary of Accounting data and Financial index May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to change of the accounting policy and correction of accounting errors. □ Yes √ No 2016 2015 Changed over last year（％） 2014 Operating Gross income 6,901,321,122.65 4,650,208,448.10 48.41% 1,600,750,745.69 （RMB） Net profit attributable to the shareholders of the listed company（RMB） 1,239,928,899.40 1,326,233,674.37 -6.51% 468,902,701.44 Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company（RMB） 953,819,209.18 822,699,390.70 15.94% 78,312,630.78 Cash flow generated by business operation, net（RMB） 1,390,048,492.32 1,780,128,962.94 -21.91% -1,017,554,188.65 Basic earning per share(RMB/Share) 0.29 0.48 -39.58% 0.17 Diluted gains per share(RMB/Share)(RMB/Share) 0.29 0.48 -39.58% 0.17 Net asset earning ratio（%） 7.28% 14.99% -7.71% 6.11% End of 2016 End of 2015 Changed over last year（％） End of 2014 Gross assets（RMB） 46,826,319,570.41 28,798,623,253.33 62.60% 18,488,221,665.49 Net assets attributable to shareholders of the listed company（RMB） 22,216,300,365.86 14,319,481,941.28 55.15% 7,677,125,274.36 VII. The differences between domestic and international accounting standards 1．Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. □ Applicable□√ Not applicable Nil 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √Not applicable Nil VIII. Main Financial Index by Quarters In RMB First quarter Second quarter Third quarter Fourth quarter Operating income 1,581,690,834.17 1,300,368,320.24 1,379,624,393.30 2,639,637,574.94 Net profit attributable to the shareholders of the listed company 347,750,532.74 198,213,177.98 255,873,197.91 438,091,990.77 Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company 269,369,501.10 190,525,152.03 158,346,261.62 335,578,294.43 Net Cash flow generated by business operation -934,819,444.05 2,215,928,386.99 348,241,152.18 -239,301,602.80 Whether significant variances exist between the above financial index or the index with its sum and the financial index of the quarterly report as well as semi-annual report index disclosed by the Company. □ Yes √No IX. Items and amount of non-current gains and losses √Applicable □Not applicable In RMB Items Amount (2016) Amount (2015) Amount (2014) Notes Non-current asset disposal gain/loss(including the write-off part for which assets impairment provision is made) 19,167.58 -42,342.96 -89,370.72 Govemment subsidies recognized in current gain and loss(excluding those closely related to the Company’s business and granted under the state’s policies) 356,943,995.55 514,763,264.28 441,054,640.22 Income from the exceeding part between investment cost of the Company paid for obtaining subsidiaries , associates and joint-ventures and recognizable net assets fair value attributable to the Company when acquiring the investment 1,804,209.86 18,763,137.14 580.38 Net profit or loss of subsidiaries from the beginning of the period up to the business combination date recognized as a result of business combination of enterprises under common control 84,703,345.09 44,240,758.16 Reversal of impairment provisions for the accounts receivable on which 14,009,355.59 impairment tests were carried out separately Gain/loss on loans obtained by entrusting others 8,022,209.26 4,500,000.00 4,083,333.33 Other non-operating income and expenditure beside for the above items -9,601,776.32 2,588,776.63 175,950.50 Less: Influenced amount of income tax 52,541,535.96 82,348,493.83 65,281,344.97 Amount of influence of minority interests（After tax） 18,536,579.75 53,402,758.27 33,594,476.24 Total 286,109,690.22 503,534,283.67 390,590,070.66 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. □ Applicable√ Not applicable None of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. III. Outline of Company Business I. Main Business the Company is Engaged in During the Report Period Whether the company needs to comply with the disclosure requirements of the particular industry No The company has successfully completed the transformation and upgrading from the traditional CRT industry to the panel display industry since the recombination in 2011, the company main business covers production of the optoelectronic display materials including TFT-LCD, sapphire, color filter and polaroid, etc., sales of high-end equipment with provision of corresponding technical services. As well as undertaking the building installation project and other business. Apart from the main business, the company arranged the strategic newly-developing materials field related to graphene positively and realized the breakthrough in the single-layer graphene and graphene lithium ion cell business. 1. High-end equipment and technical service business Through the independent research and development and technology accumulation for many years, the company broke through the techniques blockade of foreign manufacturers firstly, developed the whole-set processing equipment and manufacture technology for the flat panel display glass substrate with the proprietary intellectual property rights and became the fifth liquid crystal glass substrate manufacturer globally as well as the enterprise with the electronic glass manufacturing processes for overflow down-draw process and float glass process. The effective breakthrough in the electronic-grade glass manufacture equipment field provides the solid foundation for the company high-end equipment business entry into the extension market. The company high-end equipment and the technology service business adopt mainly the customized production and service methods, which will be settled based on the production line works progress note and the mainly products include Stocker automatic control system, polishing automatic line host synthesis equipment and automatic grinding cleaning equipment, etc. Recently, the state has been continuously increasing the policy support on the intelligent manufacturing equipment industry and has issued in succession the "12th five-year plan" Development Program for the High-End Equipment Manufacturing Industry, "12th five-year plan" Development Program for the Intelligent Manufacturing Equipment Industry, "12th five-year plan" Special Program for Intelligent Manufacturing Scientific and Technological Development and Made in China 2025, etc., which provide the huge market space for the equipment manufacturing industry. As China is on the way transforming from the big manufacturing country to the powerful manufacturing country, the intelligent manufacturing equipment industry will usher in an era with rapid-development opportunities and broad market space under the joint action of the domestic equipment replacement of imported goods, the industrial production replacement of the human work, etc. 2. Display materials business including LC glass substrate and others The LD glass substrate is the core raw material of the upstream LC display panel and one panel comprises two glass substrates commonly accounting for 15%-20% of the overall panel production cost or so, which is characterized with high technical barrier, high monopolization and high profit space, etc. Based on the breakthrough in the LC glass substrate set manufacturing equipment field, the company breaks the international monopoly firstly and achieves the domestication of the LC glass substrate. At present, the company possesses 20 LC glass substrate production lines (including under-construction and proposed projects) covering G5, G6 and G8.5 production lines and ranks firstly on the volume production capacity stably. To strive for the territory advantages and reduce the transport cost, the company adopts the factory building strategy matching nearby with the panel clients as well as the point-to-point sales strategy and at present the clients extend all over the mainstream panel factories in Chinese Mainland and Taiwan such as BOE, CATIC, Tianma, IVO, CPT, and Innolux Corporation, etc. The company, apart from strengthening the LC glass substrate main business, started to enrich the industrial structure in 2015 gradually, focused on the horizontal expansion in the optoelectronic display core materials field and arranged the sapphire materials, CF and polaroid, etc. in succession with continuous improvement of the industrial distribution frontier, safety and profitability. The sapphire crystal is used extensively in LED substrate materials, consumer electronics, optical elements and other fields; at present the main products of the company are 2-inch and 4-inch substrate products; CF and polaroid projects are during investment and construction and will give full play to the co-movement effects after construction together with the company glass substrate business and increase the ratio of display materials domestication. As a series of polices at home has been supporting TFT-LCD industry since 2006, the LC panel industry has risen and developed successively from Japan, South Korea, Taiwan and the Chinese Mainland has become the second LCD panel industry base following Korea. Up to now, there is a batch of LCD panel manufacturers with the large scale and international competition including BOE, Huaxing Optoelectronic , CATIC, IVO and Tianma, etc., and the domestication for the upstream raw materials production will usher in an era with historic opportunities combining the continuous release of the panel capacity at home. 3. Building installation business As the company traditional business, the building installation business played an important role in assisting the company production base building and maintenance, etc. and decreased effectively each engineering construction cost of the company. At the same time, as the supplement to the main business, the building installation business has brought about a certain incomes and profits for the company in recent years along with the continuous development of the industrialization and urbanization at home. Such business of the company mainly takes the subsidiary Sichuan Ruiyi Constructional Engineering Co., Ltd. as the operation subject, which possesses the qualification of the architectural engineering construction general contracting Class I and municipal public works construction general contracting Class I, etc. and mainly conducts the housing building, civil engineering, public facilities building, other works lump sum and professional construction. The building installation industry is an important pillar industry for the national economy and also the important guarantee for the new-type urbanization executed by the state. The new-type urbanization is the largest domestic-demand potential and also the important driving force for the economic development, which will bring about the broader market space for the company building installation business through the covered underground comprehensive pipe rack transformation, sponge city building and shantytown transformation, etc. II. Major Changes in Main Assets 1.Major Changes in Main Assets Main assets Major changes Fixed assets The increase for the period was mainly caused by the fixed assets conversion from the LC glass substrate production lines projects under construction of Shijiazhuang Xuxin, Wuhu Optoelectronic Technology and Zhengzhou Xufei Company. Intangible assets The increase for the period was mainly caused by the acquisition of Shanghai Tanyuan Huigu New Materials Technology Co., Ltd., the proprietary technology purchase after the successful acquisition as well as the land usage rights purchase by subsidiaries Fuzhou Dongxu Optoelectronic Technology Co., Ltd. and Taizhou Xiwang New Energy Technology Co., Ltd. Construction in process The decrease for the period was mainly caused by the fixed assets conversion from the LC glass substrate production lines projects under construction of Shijiazhuang Xuxin, Wuhu Optolectronic Technology and Zhengzhou Xufei Company. 2. Main Conditions of Overseas Assets □ Applicable √Not applicable III. Analysis On core Competitiveness Whether the company needs to comply with the disclosure requirements of the particular industry No The company's core competitiveness is mainly reflected in the following aspects: 1. Strong ability of independent R & D and innovation As of the end of the reporting period, the company and the trusteeship company and the controlling shareholder have about 1000 items of independent intellectual property rights related to liquid crystal glass substrate, PDP glass substrate and High alumina float plate glass being obtained and/or under the application process. After years of technology accumulation and upon the strong independent research and development ability, the company has become the only company in China that simultaneously mastered the two kinds of glass-substrate production process which are the overflow melting method and the floating method. The TFT-LCD glass substrate whole-set equipment production line was identified as the "National strategic innovation product", and the method for treating glass liquid in platinum channel was awarded “Golden prize of Chinese patents”. Besides, the company stressed the cooperation and exchanges with domestic and foreign well-known research institutions and professional universities and colleges, and set up the National Engineering Laboratory for flat panel display glass technology and equipment, national enterprise technology center, academician workstation, graphene research institute and so on, which will provide a strong technical support and R&D support for the company’s further development. 2. The leading position in domestic substrate industry and the scale advantage At the end of the reporting period, the company has four LCD glass substrate production bases which are Zhengzhou, Shijiazhuang, Wuhu and Fuzhou production base, with the comprehensive coverage of G5, G6 and G8.5 TFT-LCD glass substrate products and the production capacity ranked first in China while ranked fourth in the world. With each production line being put into production, the company’s market share of the domestic LCD glass substrate increased year by year, and the company’s pricing power towards the downstream customers enhanced, while the scale effect effectively ensured the profitability of the company's substrate product. Upon the company's leading position in the field of LCD glass substrate, the company expanded the new display material business represented by polarizer and color filter. The above-mentioned three core display materials will achieve good tandem effect, thus to effectively enhance the company’s core competitiveness in the field of TFT-LCD. 3.The industry chain integration advantages with the lead of the control power Dongxu Group as the company dominant shareholder, has evolved into the multi-industry group of synergetic development of high-end manufacture, new materials, new energy and new-type environmental protection, etc. through the sound development for 20 years and was listed into “Top 100 Enterprises of the Brand Value in 2016 China”with the value of 15.896 billion yuan in 2016, whose brand influence became more prominent. Based on the powerful resources of the dominant shareholder and brand advantages, Dongxu Optoelectronic started the extended development strategy oriented by “merger plus joint venture”, introduced in succession several advanced production technologies of Japanese enterprises, entered into fields of polaroid, sapphire and graphene (graphene lithium ion cell), etc. with the mainline of full play of the industrial synergy, orientation of realizing the absolute control power and purpose of “one plus one greater than two” effect, and added the new energy to the rapid development of the company. 4. Policy Support and Costs Advantage In recent years, the central government has issued a series of policies to boost the domestically-made photoelectric display materials, and the policies include “raised the tariff of 6-G and below 6-G glass substrate to 6%", “raised the export tax rebate rate of liquid crystal glass substrate etc. to 17%" and “critical material matching rate of small and middle size TFT-LCD panel manufacturing up to 60%”. Meanwhile, considering the investment promotion and capital introduction and adjustment for industrial structure and so forth factors, many local governments will provide supports in terms of land, taxes and subsidies. To better cover the needs of downstream customers, the company adopted the strategy of setting up the matching factory near the panel manufacturers. Compared to the foreign manufacturers, the strategy would save tariff costs while effectively avoiding the high transportation costs and reducing the risk of damage to the product. With the company’s expanding production capacity, constant development of technology and the further dilution of fixed costs such as depreciation, the company’s costs advantage is increasingly obvious. 5. High-efficient management and decision-making mechanism Since Dongxu Group becoming the master of the company, the company’s management system got a thorough transformation from the state-owned enterprise to private company. The company inherited Dongxu Group’s rich and good operation and management experiences in the electronic glass industry, and developed a high-efficient management system and incentive mechanism. The company brings together a large number of high-tech talents, and the management can accurately judge the market and the industrial development direction to quickly and flexibly grasp the opportunity, with market-oriented means to mobilize the talented people and capital resources and other resources to timely seize the strategic high ground. In the rapid-changing and high-barrier consumer electronics industry chain, the company’s advantage of high-efficient management and decision-making mechanism is becoming more outstanding. IV. Management’s Discussion and Analysis I. General The year 2016 was the crucial year for implementation of Dongxu Optoelectronic strategies centering on mainly several main lines of building advanced-line substrate production line, deepening existed products market layout and promoting the horizontal expansion in the new-material field vigorously, when each production operation activity were prompted stably. Under the leading of the company Board of Directors and the management layer as well as the unremitting endeavor of all staff, the company leading position as the LC glass substrate was strengthened and the optoelectronic display materials and graphene business were laid out smoothly with forming the good industrial collaboration and cluster effects. Within the report period, the company achieved the operation revenue of 6.901 billion yuan with comparing by 48.41% compared with that in 2015 and the net profits of 1.24 billion yuan belonging to the parent company . Each business of the company was developed in details in 2016 as follows: 1.Strengthen the leading position of LC glass substrate and fill up the black of G8.5 domestication Under the influence of the tightened supply of LCD panel caused by South Korean production line switching to OLED, the price of the small and medium size LCD panels in 2016 kept increasing, drove the strong demands of the LC glass substrate market and stabilization of the price and gross margin. Until the end of the report period, the company G5 and G6 LC glass substrate production lines with number of 7 and 6 all had realized volume production with above 80% average comprehensive yield and realization of 1.213 billion yuan for the total sales incomes of the whole year (increase by 23.82% compared with that in 2015) and 428 million yuan for the gross profit. The company took part actively in the industrial exhibitions home and abroad, promoted persistently and strengthened the cognition and reputation of the company brands. At present, the company substrate products have already covered the mainstream panel manufacturers in Chinese Mainland and Taiwan including BOE, Shenchao Optoelectronic, Innolux Corporation, IVO, Tianma and AU Optoelectronic, etc. with continuous promotion of the industrial safety and reliability. In August 2016, the company collected 6.95 billion yuan capital for the non-public offer shares and such amount was used for investment and building G8.5 LC glass substrate production line and BOE production line nearby was selected to build the factory, which would fill in the domestication black effectively of the large-size glass substrate after reaching the design capacity. Until the end of the report period, The factories and ancillary clean rooms for partial production lines of the project are completed; and the ancillary electromechanical and power equipment are being installed. Otherwise, to copy with the display technology upgrading in the future, the company intensified the research and development, completed smoothly the overall performance parameters test and overall-performance optimization integration for the LTPS (low-temperature polycrystalline silicon) glass substrate material and built the communication channel with clients of Everdisplay Optronics and CSOT, etc. In the future, the company will transform G5 and G6 production lines properly based on the downstream market demands. 2. Give play to the substrate production technology spillover effects and the high-end equipment business develops continuously At present, as the only enterprise grasping both the overflow melting method and float glass substrate production process at home, the company, based on the advanced set-type equipment technology of independent research and development, realizes the design, production, manufacturing, installation and technology services for the LC glass substrate and high-alumina cover-plate glass production lines equipment in set and all production lines are in stable operation with stable promotion of the yield. The strong R&D, production and integration capacities for the electronic-grade glass manufacture equipment in set bring about the obvious spillover effects for the high-end equipment business of the company. In 2004, the company entered into the strategic cooperation agreements with BOE and Infovision Optoelectronics (Kunshan) Co., Ltd. for expanding the panel production line equipment business with the downstream panel manufacturers. As the company breaks through the foreign blockade at the aspect of the independent research and development and settles the solid foundation based on the breakthrough of the front-end equipment with the highest technical content among the electronic equipment, the company high-end equipment and technical service business develops continuously, exploit and store a large batch of large-size group clients in the intelligent application field under the background of the industrial manufacturing equipment replacement of the manual work and satisfaction of the high-efficient production. Within the report period, the company high-end equipment and technical service business realized the revenue of 3.887 billion yuan with the gross profit declining to 38.17% reasonably due to the original whole-set customized equipment transformation into partial generalized equipment. 3. Arrange the optoelectronic display core raw materials and the industrial cluster effects appear To realize the strategic target of the "the largest optoelectronic display materials manufacturer in China" and keep up with the global display technology and innovation trend, the company, on the basis of strengthening and improving LC glass substrate main business continuously, expand the new business field continuously combining the main business and has already laid out the sapphire, CF and polaroid high-end display materials. Within the period, the company sapphire business was expanded partially with smooth market expansion, achieved the operation revenue of 550 million yuan with increasing by 95.21% compared that in 2015 and possessed the stable clients including Xuzhou GAPSS, North Microelectronics and Sino Nitride Semiconductor. The present products cover the large-size sapphire crystal ingot, 2-6 inches sapphire crystal bar, 2-6 inches sapphire substrate ,optical window materials and Mobile phone panel and lens cover ,etc. The company G5 TFT-LCD using CF production line project is under construction and will improve efficiently the additional value of the existed G5 LC glass substrate products after reaching the design capacity, which will also become another new profit increase point for the company. Otherwise, to seize quickly the polaroid demands of the large-size LC panel enterprises at home, fill up efficiently the black for the original polaroid volume production, in February 2016, the company cooperated with Sumitomo Chemical as one enterprise of the global Top 3 polaroid manufacturer in the polaroid industry hand in hand. In October 2016, the joint-venture Xuyou Electronic Material Technology (Wuxi) Co., Ltd. was registered and established officially with Tunghsu photoelectricity holding 51% and the wholly-owned subsidiary thereof Fuzhou Xuyou Electronic Material Technology Co., Ltd. was registered in December. Such project will invest and build 2 wide polaroid production lines, among which, the front-end preparation work for 1 line at present is completed and the front and back sections for one original volume production line are located in Wuxi and Fuzhou respectively. The workshop transform in Wuxi has already been completed and relevant production equipment will enter into the site with installation commission. 4. The endogenous and extended two-wheel drive and the graphene business completes multiple-point layout Since 2014, the company conducted the industrial layout (graphene industry) through adoption of the "endogenous and extended" two-wheel drive. The company has conducted the cooperation and exchange with multiple scientific research institutions in succession including Beijing Institute of Technology, Shanghai Jiaotong University, China Graphene Alliance and the Catalan Institute of Nanoscience and Nanotechnology, etc., constructed the overall industry-university-research technical innovation system and settled the strong technical strength for the rapid development of the company graphene business. Within the report period, the company built the graphene industry development funds in the scale of 100 and 200 million yuan respectively with Taizhou New Energy Industrial Park Management Committee and Jingyang People’s Government in Deyang city, which will speed up the company layout of the graphene industry. In March 2016, the company completed the acquisition of Shanghai Tanyuan Huigu through the capital increment, which is the graphene preparation and application enterprise owning the single-layer graphene preparation technology, graphene lithium ion materials and cell preparation technology, issued the first "graphene lithium ion cell product"in July, which can realize the short-time rapid charging and discharging and may be applied in the various power battery fields including the new-energy automobile and unmanned aerial vehicles. Otherwise, the company plans to invest 1.65 billion yuan in Taizhou to build the graphene lithium ion cell product project and such project had already obtained the land and completed the filing by the end of the report period with the continuous promoting of relevant environmental, safety and profession assessment. 5. Correspond to the new-type urbanization building trend and maintain the stability of the building installation business As the company traditional business, the building installation business gives an important play to the aspect of the company production lines building assistance and external works contracting, decreases effectively the company operation cost and improves the production lines building efficiency. Simultaneously, conforming to the policy background of the new-type urbanization at present, as the industrialization and urbanization develop continuously, the company building installation business maintains the stable performance increase through applying its own advantages. The company building installation business was completed mainly by Sichuan Ruiyi achieved the total operation revenue of 1.18 billion yuan and 40 million yuan for profits within the report period. II. Main business analysis 1. General Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”. 2. Revenue and cost (1)Component of Business Income In RMB 2016 2015 Increase /decrease Amount Proportion Amount Proportion Total operating revenue 6,901,321,122.65 100% 4,650,208,448.10 100% 48.41% Industry Equipment and Technology serves 3,886,546,674.10 56.32% 2,335,561,840.90 50.22% 66.41% Glass substrate 1,213,279,834.92 17.58% 979,843,906.90 21.07% 23.82% Sapphire material 547,559,756.10 7.93% 280,494,160.83 6.03% 95.21% Supply chain business 24,058,595.55 0.35% 0.00 0.00% Graphene 1,376,522.48 0.02% 0.00 0.00% Construction Installation 1,183,752,400.10 17.15% 890,941,023.85 19.16% 32.87% Electric vacuum glass devices and supporting electronic device 421,367.52 0.01% 7,123,333.34 0.15% -94.08% Other 44,325,971.88 0.64% 156,244,182.28 3.37% -71.63% Products Equipment and Technology serves 3,886,546,674.10 56.32% 2,335,561,840.90 50.22% 66.41% Glass substrate 1,213,279,834.92 17.58% 979,843,906.90 21.07% 23.82% Sapphire material 547,559,756.10 7.93% 280,494,160.83 6.03% 95.21% Supply chain business 24,058,595.55 0.35% 0.00 0.00% Graphene 1,376,522.48 0.02% 0.00 0.00% Construction Installation 1,183,752,400.10 17.15% 890,941,023.85 19.16% 32.87% Electric vacuum （未完）  |