Weifu High-Technology Group Co., Ltd. Full-Text of First Quarterly Report 2011

Weifu High-Technology Group Co., Ltd. Full-Text of First Quarterly Report 2011

Weifu High-Technology Group Co., Ltd.

The First Quarterly Report 2011

(Full Text)

§1. Important Notes

1.1 Board of Directors and the Supervisory Committee of Weifu High-Technology Group Co., Ltd. (hereinafter referred to as the Company) and its directors, supervisors and senior executives hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.

1.2 The First Quarterly Financial Report of 2011 has not been audited by CPAs.

1.3 Wang Weiliang, Principal of the Company; Sun Qingxian, Person in Charge of Accounting Works; Sun Qingxian, Person in Charge of Accounting Organ(Accounting Supervisor) hereby confirm that the Financial Report of the First Quarterly Report is true and complete.

§2. Company Profile

2.1 Main accounting highlights and financial indexes:

Unit: RMB

At the end of the report period / At the period-end of the last year / Changes of increase/decrease (%)
Total assets (RMB) / 7,340,213,490.31 / 6,761,622,809.90 / 8.56%
Owners’ equity attributable to shareholders of the listed company (RMB) / 4,396,937,862.89 / 4,106,208,383.62 / 7.08%
Share capital (Share) / 567,275,995.00 / 567,275,995.00 / 0.00%
Net asset per share attributable to shareholders of listed company (RMB/Share) / 7.75 / 7.24 / 7.04%
In the report period / The same period of last year / Changes of increase/decrease (%)
Total operating income (RMB) / 1,617,839,294.12 / 1,188,216,542.85 / 36.16%
Net profit attributable to shareholders of the listed company (RMB) / 290,729,479.27 / 114,030,846.25 / 154.96%
Net cash flow arising from operating activities (RMB) / -107,850,912.52 / -88,249,244.11
Net cash flow arising from operating activities per share (RMB/Share) / -0.19 / -0.16
Basic earnings per share (RMB/Share) / 0.51 / 0.20 / 155.00%
Diluted earnings per share (RMB/Share) / 0.51 / 0.20 / 155.00%
Weighted average return on equity (%) / 6.84% / 3.91% / 2.93%
Weighted average return on equity after deducting non-recurring gains and losses (%) / 6.84% / 3.97% / 2.87%

Items of non-recurring gains and losses

√ Applicable □ Inapplicable

Unit: RMB

Items of non-recurring gains and losses / Amount / Remarks
(If applicable)
Gains and losses from the disposal of non-current asset / -218,377.94
Other non-operating income and expenditure except for the aforementioned items / 53,278.07
Impact on income tax / 17,797.54
Influenced amount of minority shareholders’ equity / 1,723.43
Total / -145,578.90 / -

2.2 Total number of shareholders at the end of the report period and shares held by the top ten shareholders with unrestricted conditions

Unit: Share

Total number of shareholdersat the end of report period / 42,816
Particulars about the shares held by the top ten tradable shareholders with unrestricted conditions
Full Name of shareholder / Amount of tradable shares with unrestricted conditions held at the end of report period / Type of shares
ROBERT BOSCH GMBH / 18,387,200 / Domestically listed foreign share
China Construction Bank- Fullgoal Tianbo Innovation Theme Stock Fund, / 18,300,000 / RMB common share
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED / 12,333,700 / Domestically listed foreign share
China Construction Bank- Huashang Shengshi Growth Stock Fund / 11,097,272 / RMB common share
DRAGON BILLION CHINA MASTER FUND / 11,066,646 / Domestically listed foreign share
China Construction Bank- China AMC Advantage Growth Stock Fund / 10,379,508 / RMB common share
China Minsheng Banking Corp., Ltd. – Huashang Strategy Selected Flexible Allocation Mix Stock Fund / 8,971,691 / RMB common share
Agriculture Bank of China – Changsheng Tongde Theme Growth Stock Fund / 8,500,504 / RMB common share
GAOLING FUND,L.P. / 8,202,516 / Domestically listed foreign share
Bank of Communications – Hua An Innovation Stock Fund / 8,180,000 / RMB common share

§3. Significant Events

3.1 Particulars about material changes in items of main accounting statement and financial index, and explanations of reasons

√Applicable □Inapplicable

1. Construction in process growth 65.56 percent over year-begin, mainly due to the increase of investment in technology reform.
2. Short-term loans growth 67.59 percent over year-begin, mainly because the rapidly development in business which caused the increase of bank short-tem loans.
3. Operating income increased 36.16 percent over same period of last year, mainly due to the rapidly development in business of the Company.
4. Sales expense decreased 43.88 percent over same period of last year, mainly because the strength on sales management, lower the procedures which down the expenses.
5. Investment income increased 112.63 percent over same period of last year, mainly because the profit contributed from the stock-joint company – Boshi Auto Diesel System Co., Ltd. was dramatically growth.
6. Operating profit increased 152.88 percent over same period of last year, mainly because the growth of main business and rapidly increase of investment income.
7. Net profit attributable to owners’ of parent company increased 154.96 percent over same period of last year, mainly because the business profit gains a rapidly growth.
8. Income tax expenses increased 325.38 percent over same period of last year, mainly because the dramatically growth in profit and the income tax correspondingly soaring in the report period.
9. Net cash flow arising from financing activities decreased 34.31 percent over same period of last year, mainly because the Company adopts the concentrated capital management that reduced the bank loans.

3.2 Analysis and explanation of significant events and their influence and solutions

3.2.1 Particular about Qualified Opinion

□Applicable √Inapplicable

3.2.2 Particular about fund offered to shareholder or its related parties by the Company and external guarantee with procedure violation

□Applicable √Inapplicable

3.2.3 Particular about the significant contract of routine operation signed and implemented

□Applicable √Inapplicable

3.2.4 Other

√Applicable □Inapplicable

Proposal of shares private offering was deliberated and passed by the Second Extraordinary Shareholders’ General Meeting of 2010.
The plan of share privately offering of the Company requires approval from relevant governments of Ministry of Commerce, and should put into practice after approval from CSRC, and will exercise on the plan approved by CSRC. (Found more details on Notice of Resolution of the 2nd Extraordinary Shareholders’ General Meeting of 2010 published on Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website ( dated 25 December 2010). The Plan has submitted to Ministry of Commerce for approval.

3.3 Implementations of commitments by the Company, shareholders and actual controller

Commitments make within the report period or persisted to the period by listed company and its director, supervisor and senior executives, shareholder with over 5 percent shares held and its actual controller

√Applicable □Inapplicable

Item of Commitments / Promisee / Content of commitments / Implementation
Commitments for Share Merger Reform / Wuxi Industry Development Group Co., Ltd. / The total realized net profit of the Company from 2006 to 2008 was RMB 0.85 billion, and that in 2008 was RMB 0.34 billion. Based on circulating A shares before the share reform, arranging additionally delivering 0.5 shares per 10 shares, the proportion of cash dividend from 2006 to 2008 was not lower than 50 percent of profit available for distribution of investors realized by the Company in those years. / Implementation has accomplished
Commitments made in Acquisition Report or Reports on Change in Interests / Inapplicable / Inapplicable / Inapplicable
Commitments made in Material Assets Reorganization / Inapplicable / Inapplicable / Inapplicable
Commitments made in issuing / Inapplicable / Inapplicable / Inapplicable
Other commitments (including additional commitments) / Wuxi Industry Development Group Co., Ltd. / In order to promote the listed company’s steady and healthy development, fully mobilize senior executives so as to ensure to combine the interests of the governance and shareholders of the Company, Weifu Industry Group committed: after Weifu High-tech finishing Share Merger Reform, under related regulations of the state and Wuxi government in terms of governance encouragement system of listed company, the Group would the stock incentive plan for management level of Weifu High-tech. / The said commitment is being implemented, and would be performed since related policy is perfected.

3.4 Estimation of 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 of reason

□Applicable √Inapplicable

3.5 Other significant events which need explanations

3.5.1 Particulars about securities investment

□Applicable √Inapplicable

3.5.2 Registration form for receiving research, communication and interview in the report period

Date / Place / Method / Investor / Contents discussed and materials supplied
2011-01-06 / Conference room of the Company / Spot research / Bank of Communications Schroders / Operation status and future development of the Company
2011-01-07 / Conference room of the Company / Spot research / China life, Franklin / Operation status and future development of the Company
2011-02-16 / Conference room of the Company / Spot research / China Merchants Securities / Operation status and future development of the Company

3.6 Particulars about derivatives investment

□Applicable √Inapplicable

3.6.1 Particulars about derivatives investment held at the end of report period

□Applicable √Inapplicable

§4. Appendix

4.1 Balance sheet

Prepared by Weifu High-Technology Group Co., Ltd. March 31, 2011 Unit: RMB

Items / Balance at period-end / Balance at year-begin
Consolidation / Parent Company / Consolidation / Parent Company
Current assets:
Monetary funds / 440,153,613.59 / 113,844,527.83 / 596,958,764.21 / 149,943,763.55
Settlement provisions
Capital lent
Transaction finance asset
Notes receivable / 928,172,190.22 / 334,796,016.10 / 835,266,266.32 / 291,611,147.00
Accounts receivable / 1,273,126,939.90 / 662,696,163.98 / 999,798,439.30 / 567,607,398.18
Accounts paid in advance / 161,242,930.98 / 49,143,543.26 / 105,176,780.11 / 42,468,803.76
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Interest receivable
Dividend receivable / 348,145,326.00 / 356,642,016.22 / 8,496,690.22
Other receivables / 6,260,157.64 / 209,714,516.96 / 6,892,216.92 / 137,067,355.21
Purchase restituted finance asset
Inventories / 1,015,286,595.84 / 327,185,568.10 / 917,694,296.54 / 277,723,002.78
Non-current asset due within one year
Other current assets / 9,460,705.44 / 9,210,782.24
Total current assets / 4,181,848,459.61 / 2,054,022,352.45 / 3,470,997,545.64 / 1,474,918,160.70
Non-current assets:
Granted loans and advances
Finance asset available for sales
Held-to-maturity investment
Long-term account receivable
Long-term equity investment / 1,677,404,531.34 / 2,330,524,423.27 / 1,892,112,152.46 / 2,558,225,582.62
Investment property / 4,831,654.06 / 4,965,879.52
Fixed assets / 1,100,426,560.71 / 534,913,750.15 / 1,110,068,115.28 / 538,628,218.28
Construction in progress / 235,522,152.48 / 190,034,500.42 / 142,256,732.63 / 125,932,175.31
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets / 84,844,330.34 / 26,566,210.95 / 85,655,823.12 / 26,733,764.37
Expense on Research and Development
Goodwill / 1,784,086.79 / 1,784,086.79
Long-term expenses to be apportioned / 6,972,940.63 / 7,473,629.75
Deferred income tax asset / 46,578,774.35 / 16,195,351.53 / 46,308,844.71 / 16,198,870.70
Other non-current asset
Total non-current asset / 3,158,365,030.70 / 3,098,234,236.32 / 3,290,625,264.26 / 3,265,718,611.28
Total assets / 7,340,213,490.31 / 5,152,256,588.77 / 6,761,622,809.90 / 4,740,636,771.98
Current liabilities:
Short-term loans / 452,487,493.42 / 422,487,493.42 / 270,000,000.00 / 240,000,000.00
Loan from central bank
Absorbing deposit and interbank deposit
Capital borrowed
Transaction financial liabilities
Notes payable / 333,322,030.70 / 149,908,487.00 / 389,985,533.69 / 200,278,487.00
Accounts payable / 1,346,990,282.72 / 886,028,388.30 / 1,195,053,077.84 / 766,617,178.72
Accounts received in advance / 49,301,783.80 / 19,714,919.93 / 42,271,899.15 / 20,438,892.15
Selling financial asset of repurchase
Commission charge and commission payable
Wage payable / 279,885,181.17 / 184,145,069.43 / 269,751,945.96 / 168,133,427.32
Taxes payable / 80,627,688.79 / 19,772,775.50 / 107,903,963.31 / 28,582,184.41
Interest payable / 490,000.00 / 320,000.00 / 490,000.00 / 320,000.00
Dividend payable / 3,464,336.15 / 18,696,539.18
Other accounts payable / 71,286,963.19 / 55,039,782.89 / 62,501,613.74 / 56,125,853.06
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Non-current liabilities due within 1 year
Other current liabilities / 34,484,063.05 / 818,616.49 / 24,330,259.35
Total current liabilities / 2,652,339,822.99 / 1,738,235,532.96 / 2,380,984,832.22 / 1,480,496,022.66
Non-current liabilities:
Long-term loans / 3,000,000.00 / 3,000,000.00
Bonds payable
Long-term account payable / 15,670,000.00 / 15,670,000.00
Special accounts payable
Projected liabilities / 1,481,745.84 / 1,481,745.84
Deferred income tax liabilities / 2,801,008.40 / 2,801,008.40
Other non-current liabilities / 14,593,000.00 / 13,350,000.00
Total non-current liabilities / 36,064,008.40 / 1,481,745.84 / 34,821,008.40 / 1,481,745.84
Total liabilities / 2,688,403,831.39 / 1,739,717,278.80 / 2,415,805,840.62 / 1,481,977,768.50
Owner’s equity (or shareholders’ equity):
Paid-in capital (or share capital) / 567,275,995.00 / 567,275,995.00 / 567,275,995.00 / 567,275,995.00
Capital public reserve / 895,918,416.59 / 923,981,806.57 / 895,918,416.59 / 923,981,806.57
Less: Inventory shares
Reasonable reserve
Surplus public reserve / 283,637,997.50 / 283,637,997.50 / 283,637,997.50 / 283,637,997.50
Provision of general risk
Retained profit / 2,650,105,453.80 / 1,637,643,510.90 / 2,359,375,974.53 / 1,483,763,204.41
Balance difference of foreign currency translation
Total owner’s equity attributable to parent company / 4,396,937,862.89 / 3,412,539,309.97 / 4,106,208,383.62 / 3,258,659,003.48
Minority interests / 254,871,796.03 / 239,608,585.66
Total owner’s equity / 4,651,809,658.92 / 3,412,539,309.97 / 4,345,816,969.28 / 3,258,659,003.48
Total liabilities and owner’s equity / 7,340,213,490.31 / 5,152,256,588.77 / 6,761,622,809.90 / 4,740,636,771.98

4.2 Profit statement

Prepared by Weifu High-Technology Group Co., Ltd. Jan.-Mar. 2011 Unit: RMB

Items / Amount in this period / Amount in last period
Consolidation / Parent Company / Consolidation / Parent Company
I. Total operating income / 1,617,839,294.12 / 833,816,030.01 / 1,188,216,542.85 / 620,875,087.08
Including: Operating income / 1,617,839,294.12 / 833,816,030.01 / 1,188,216,542.85 / 620,875,087.08
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost / 1,386,509,213.86 / 765,447,648.44 / 1,104,946,771.10 / 598,485,518.44
Including: Operating cost / 1,184,963,972.83 / 686,865,102.01 / 912,432,310.56 / 543,290,152.03
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Operating tax and extras / 9,261,487.17 / 2,765,743.21 / 7,273,043.66 / 2,886,121.77
Sales expenses / 32,177,349.01 / 15,345,785.51 / 57,338,278.79 / 18,051,258.95
Administration expenses / 151,019,027.30 / 55,378,432.40 / 121,954,130.96 / 31,498,573.74
Financial expenses / 9,744,277.83 / 5,015,193.28 / 10,783,524.08 / 7,035,121.44
Losses of devaluation of asset / -656,900.28 / 77,392.03 / -4,834,516.95 / -4,275,709.49
Add: Changing income of fair value(Loss is listed with “-”)
Investment income (Loss is listed with “-”) / 109,618,904.88 / 96,625,366.65 / 51,554,055.40 / 40,645,604.74
Including: Investment income on affiliated company and joint venture / 109,618,904.88 / 96,625,366.65 / 51,554,055.40 / 40,645,604.74
Exchange income (Loss is listed with “-”)
III. Operating profit (Loss is listed with “-”) / 340,948,985.14 / 164,993,748.22 / 134,823,827.15 / 63,035,173.38
Add: Non-operating income / 210,625.24 / 39,500.48 / 332,671.41 / 213,053.41
Less: Non-operating expense / 2,096,976.41 / 1,044,989.10 / 4,419,244.04 / 3,467,563.52
Including: Disposal loss of non-current asset / 344,580.11 / 190,448.07 / 3,005,127.90 / 2,780,963.25
IV. Total Profit (Loss is listed with “-”) / 339,062,633.97 / 163,988,259.60 / 130,737,254.52 / 59,780,663.27
Less: Income tax / 33,879,944.33 / 10,107,953.11 / 7,964,652.51 / 634,192.51
V. Net profit (Net loss is listed with “-”) / 305,182,689.64 / 153,880,306.49 / 122,772,602.01 / 59,146,470.76
Net profit attributable to owner’s equity of parent company / 290,729,479.27 / 153,880,306.49 / 114,030,846.25 / 59,146,470.76
Minority shareholders’ gains and losses / 14,453,210.37 / 8,741,755.76
VI. Earnings per share
i. Basic earnings per share / 0.51 / 0.27 / 0.2 / 0.1
ii. Diluted earnings per share / 0.51 / 0.27 / 0.2 / 0.1
VII. Other consolidated income / 0 / 0
VIII. Total consolidated income / 305,182,689.64 / 153,880,306.49 / 122,772,602.01 / 59,146,470.76
Total consolidated income attributable to owners of parent company / 290,729,479.27 / 153,880,306.49 / 114,030,846.25 / 59,146,470.76
Total consolidated income attributable to minority shareholders / 14,453,210.37 / 8,741,755.76

Concerning the enterprise consolidation under common control occurred in the period; the mergered party realized net profit before consolidation amounting to RMB00.00.

4.3 Cash flow statement

Prepared by Weifu High-Technology Group Co., Ltd. Jan.-Mar. 2011 Unit: RMB

Items / Amount in this period / Amount in last period
Consolidation / Parent Company / Consolidation / Parent Company
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services / 1,456,797,712.42 / 761,419,287.88 / 711,875,710.60 / 544,597,363.13
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Net increase of disposal of transaction financial asset
Cash received from interest, commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Write-back of tax received / 9,619,790.95 / 4,695,694.80
Other cash received concerning operating activities / 5,601,759.92 / 293,454.14 / 3,013,148.50 / 1,986,922.08
Subtotal of cash inflow arising from operating activities / 1,472,019,263.29 / 761,712,742.02 / 719,584,553.90 / 546,584,285.21
Cash paid for purchasing commodities and receiving labor service / 1,229,369,538.68 / 737,043,899.43 / 575,102,203.72 / 607,368,109.67
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers / 127,421,249.42 / 50,906,182.11 / 133,901,456.62 / 68,940,714.76
Taxes paid / 157,919,411.89 / 45,360,892.78 / 68,933,287.31 / 27,300,383.24
Other cash paid concerning operating activities / 65,159,975.82 / 22,885,094.47 / 29,896,850.36 / 3,564,999.71
Subtotal of cash outflow arising from operating activities / 1,579,870,175.81 / 856,196,068.79 / 807,833,798.01 / 707,174,207.38
Net cash flows arising from operating activities / -107,850,912.52 / -94,483,326.77 / -88,249,244.11 / -160,589,922.17
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income / 9,250,000.00 / 9,250,000.00
Net cash received from disposal of fixed, intangible and other long-term assets / 229,542.96 / 53,242.58 / 7,981,216.45 / 7,408,899.52
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities / 229,542.96 / 53,242.58 / 17,231,216.45 / 16,658,899.52
Cash paid for purchasing fixed, intangible and other long-term assets / 143,013,092.88 / 83,260,554.37 / 41,569,130.98 / 14,355,694.14
Cash paid for investment / 23,818,800.00 / 23,818,800.00 / 123,265,900.00 / 124,885,900.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities / 166,831,892.88 / 107,079,354.37 / 164,835,030.98 / 139,241,594.14
Net cash flows arising from investing activities / -166,602,349.92 / -107,026,111.79 / -147,603,814.53 / -122,582,694.62
III. Cash flows arising from financing activities
Cash received from absorbing investment / 810,000.00 / 1,490,490.00
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries / 810,000.00 / 1,490,490.00
Cash received from loans / 361,512,141.78 / 331,512,141.78 / 758,317,956.54 / 706,050,000.00
Cash received from issuing bonds
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities / 362,322,141.78 / 331,512,141.78 / 759,808,446.54 / 706,050,000.00
Cash paid for settling debts / 179,024,648.36 / 149,024,648.36 / 498,048,025.08 / 442,048,025.08
Cash paid for dividend and profit distributing or interest paying / 20,005,382.76 / 4,221,179.73 / 10,925,741.04 / 7,239,868.19
Including: Dividend and profit of minority shareholder paid by subsidiaries / 15,232,203.03
Other cash paid concerning financing activities / 2,265,668.46
Subtotal of cash outflow from financing activities / 199,030,031.12 / 153,245,828.09 / 511,239,434.58 / 449,287,893.27
Net cash flows arising from financing activities / 163,292,110.66 / 178,266,313.69 / 248,569,011.96 / 256,762,106.73
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate
V. Net increase of cash and cash equivalents / -111,161,151.78 / -23,243,124.87 / 12,715,953.32 / -26,410,510.06
Add: Balance of cash and cash equivalents at the period -begin / 465,219,784.67 / 85,169,165.70 / 327,527,351.45 / 85,790,609.19
VI. Balance of cash and cash equivalents at the period -end / 354,058,632.89 / 61,926,040.83 / 340,243,304.77 / 59,380,099.13

4.4 Auditor’ report

Auditor’s opinions: Un-audited

Board of Directors of

Weifu High-Technology Group Co., Ltd.

23 April 2011

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