东方园林(002310) - 2018 Q2 - 季度财报

Section I Important Notice, Table of Contents, and Definitions Important Notice The company's board, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report and assume legal responsibility - Company's board, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, with no false records, misleading statements, or major omissions, and assume legal responsibility[3] - Company head He Qiaonv, chief accountant Zhou Shu, and head of accounting Li Fuliang declare the financial report in this semi-annual report is true, accurate, and complete[3] - Company plans no cash dividends, no bonus shares, and no conversion of capital reserves into share capital[5] Table of Contents This section lists the complete directory structure of the report, providing quick navigation for investors across all chapters Definitions This section defines common terms used in the report, ensuring accurate understanding of key concepts like company name, business models, and reporting period - "Orient Landscape/The Company/Company" refers to Beijing Orient Landscape Environmental Co., Ltd. and its former names[10] - "PPP" refers to Public-Private-Partnership (Government and Social Capital Cooperation Model)[11] - "Reporting Period" refers to January 1, 2018, to June 30, 2018[11] Section II Company Profile and Key Financial Indicators I. Company Profile This section introduces the company's basic information, including stock abbreviation, code, listing exchange, and legal representative - Company stock abbreviation: Orient Landscape, stock code: 002310, listed on Shenzhen Stock Exchange[14] - Company Chinese name: Beijing Orient Landscape Environmental Co., Ltd., Legal Representative: He Qiaonv[14] II. Contact Persons and Information This section provides contact details for the company's Board Secretary and Securities Affairs Representative, facilitating investor communication - Board Secretary: Yang Lijing, Securities Affairs Representative: Xia Keqin[15] - Contact address: 7th Floor, Building 104, No. 10 Jia, Jiuxianqiao North Road, Chaoyang District, Beijing, Phone: 010-59388886, Email: orientlandscape@163.com[15] III. Other Information This section states that the company's contact information, information disclosure, and document storage locations remained unchanged during the reporting period - Company's registered address, office address, postal code, website, and email remained unchanged during the reporting period[16] - Company's selected information disclosure newspaper, CSRC designated website, and semi-annual report storage location remained unchanged during the reporting period[17] IV. Key Accounting Data and Financial Indicators During the reporting period, the company's operating revenue and net profit attributable to shareholders achieved significant growth, with a substantial increase in net cash flow from operating activities Key Accounting Data and Financial Indicators (Current Period vs. Prior Year Period) | Indicator | Current Period | Prior Year Period | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 6,463,116,764.33 | 4,984,296,874.06 | 29.67% | | Net Profit Attributable to Listed Company Shareholders (Yuan) | 664,287,700.68 | 467,661,973.81 | 42.04% | | Net Profit Attributable to Listed Company Shareholders After Deducting Non-Recurring Gains and Losses (Yuan) | 659,653,530.00 | 586,034,003.49 | 12.56% | | Net Cash Flow from Operating Activities (Yuan) | 426,822,681.60 | 222,991,167.67 | 91.41% | | Basic Earnings Per Share (Yuan/Share) | 0.25 | 0.17 | 47.06% | | Diluted Earnings Per Share (Yuan/Share) | 0.25 | 0.17 | 47.06% | | Weighted Average Return on Net Assets | 5.70% | 4.98% | 0.72% | | Indicator | End of Current Period | End of Previous Year | Change from Previous Year-End | | Total Assets (Yuan) | 40,153,438,647.91 | 35,114,336,798.86 | 14.35% | | Net Assets Attributable to Listed Company Shareholders (Yuan) | 11,808,318,062.71 | 11,314,528,075.16 | 4.36% | V. Differences in Accounting Data under Domestic and Overseas Accounting Standards The company reported no differences in net profit and net assets between financial reports prepared under international or overseas accounting standards and Chinese accounting standards - Company reported no differences in net profit and net assets between financial reports disclosed under international accounting standards and Chinese accounting standards during the reporting period[19] - Company reported no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese accounting standards during the reporting period[20] VI. Non-Recurring Gains and Losses and Amounts Total non-recurring gains and losses for the reporting period amounted to 4.634 million yuan, primarily including government subsidies, non-current asset disposal gains/losses, and fair value change gains/losses Non-Recurring Gains and Losses and Amounts | Item | Amount (Yuan) | | :--- | :--- | | Gains and losses from disposal of non-current assets | 171,755.01 | | Government subsidies recognized in current profit or loss | 17,179,008.06 | | Gains and losses from changes in fair value and investment income | 786,775.60 | | Other non-operating income and expenses | -358,841.55 | | Other gains and losses that meet the definition of non-recurring gains and losses | -8,819,407.31 | | Less: Income tax impact | 3,880,987.54 | | Minority interest impact (after tax) | 444,131.59 | | Total | 4,634,170.68 | Section III Company Business Overview I. Main Businesses Engaged by the Company During the Reporting Period The company has successfully transformed into an ecological environment construction and operation enterprise, forming business systems in water environment governance, industrial hazardous waste disposal, and all-for-one tourism - Company has transformed into an ecological environment construction and operation enterprise, with main businesses including water environment governance, industrial hazardous waste disposal, and all-for-one tourism[26] - In H1 2018, company won 36 PPP projects, with a total bid amount of approximately 33.948 billion yuan, covering water environment comprehensive governance, all-for-one tourism, and rural revitalization[27] (I) Main Businesses Engaged by the Company The company primarily engages in ecological environment construction and operation businesses, including water environment governance, industrial hazardous waste disposal, and all-for-one tourism - Company has transformed into an ecological environment construction and operation enterprise, with main businesses including water environment governance, industrial hazardous waste disposal, and all-for-one tourism[26] - In H1 2018, company won 36 PPP projects, with a total bid amount of approximately 33.948 billion yuan, covering water environment comprehensive governance, all-for-one tourism, and rural revitalization[27] (II) Industry Situation of the Company The company's industries are strongly supported by national policies, with huge and continuously growing market demand, providing broad development space for its businesses - Water environment governance industry driven by national policies, entering a decisive stage in the next three years, company's "three-in-one" concept aligns with national strategy, expecting significant development space[29] - All-for-one tourism industry shifting from "scenic spot tourism" to "all-for-one tourism", national policies emphasize integrated development and innovative product supply, company will build characteristic projects with "investment + construction + operation" model[30] - Industrial hazardous waste disposal industry has huge market potential, stricter policies drive enterprises to prioritize hazardous waste disposal, company accelerating technology R&D and introduction, actively expanding market[31][32] - Rural revitalization strategy elevated to national importance, supporting policies will continuously drive rural construction, providing broad market space for company's ecological protection and tourism businesses[33] II. Significant Changes in Major Assets During the reporting period, the company's fixed assets and construction in progress both increased significantly, primarily due to the purchase of office buildings and the consolidation of several companies - Increase in fixed assets mainly due to purchase of office buildings and consolidation of Shenzhen Jiezhi Technology Co., Ltd., Jiangsu Yingtian Chemical Co., Ltd., and other companies[36] - Increase in construction in progress mainly due to increased investment in production equipment and plants, and consolidation of Shenzhen Jiezhi Technology Co., Ltd., Jiangsu Yingtian Chemical Co., Ltd., Wujiang Taihu Industrial Waste Treatment Co., Ltd., and other companies[36] III. Analysis of Core Competencies The company's core competencies include extensive project experience, leading water environment governance technology, rapidly expanding industrial hazardous waste disposal capabilities, and strong brand influence - Company holds 12.56% market share in ecological construction and environmental protection, and 10.60% in tourism PPP sub-sectors, with 20 all-for-one tourism projects totaling approximately 26 billion yuan in investment, becoming an industry leader[37] - Company has multiple professional R&D and design departments, based on proprietary patented technologies, combined with acquisitions of Shanghai Liyuan and Zhongshan Environmental, optimizing water treatment technology advantages[39] - Company accelerating hazardous waste disposal market layout, possessing 140 authorized patents, forming standardized treatment process modules, and has reserved 1.76 million tons of industrial hazardous waste disposal capacity across 28 provinces nationwide[40] - Company boasts world-class technology, design personnel, and experienced operational teams, and motivates employees through stock option incentive plans and employee stock ownership plans[41] - Company consistently focuses on brand building, participating in major projects like the Olympics and World Expo, and being selected for Ministry of Finance national demonstration projects, forming a highly influential brand advantage[42] Section IV Management Discussion and Analysis I. Overview Amidst a tightening financial environment, the company achieved fruitful financial and business results, with operating revenue increasing by 29.67% and net profit by 42.04% year-on-year - In H1 2018, company achieved operating revenue of 6.463 billion yuan, a 29.67% year-on-year increase; net profit attributable to listed company shareholders was 664 million yuan, a 42.04% year-on-year increase[45] - Water environment comprehensive governance business revenue was 2.705 billion yuan (41.85% of total), all-for-one tourism business revenue was 1.162 billion yuan (17.97%), and hazardous waste disposal business revenue was 482 million yuan (7.46%)[45] - During the reporting period, company won 36 PPP orders, with a total bid amount of approximately 33.948 billion yuan, an 18.65% year-on-year increase, primarily in water environment comprehensive governance[49] - Company's future development strategy includes continued deep cultivation of water environment comprehensive governance, all-for-one tourism, ecological restoration, and rural revitalization, alongside financial system reforms to strengthen financing capabilities and adjust business areas and models in response to the "deleveraging" environment[54][55] - Company expanded hazardous waste treatment capacity through new construction and M&A, completing acquisitions of Shenzhen Jiezhi Technology Co., Ltd. and five other companies, and establishing six new companies, significantly enhancing hazardous waste disposal capabilities[52] (I) Financial Performance During the reporting period, the company's operating revenue and net profit attributable to the parent company both achieved substantial growth, with net cash flow from operating activities doubling year-on-year Key Financial Indicators Data | Indicator | Current Period | Prior Year Period | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (Billion Yuan) | 6.463 | 4.984 | 29.67% | | Net Profit Attributable to Parent Company Owners (Billion Yuan) | 0.664 | 0.468 | 42.04% | | Selling Expense Ratio | 0.24% | 0.36% | -0.12% | | Administrative Expense Ratio | 12.20% | 10.81% | 1.39% | | Financial Expense Ratio | 4.67% | 3.55% | 1.12% | | Weighted Average Return on Net Assets | 5.70% | 4.98% | 0.72% | | Earnings Per Share (Yuan) | 0.25 | 0.17 | 47.06% | | Cash Received from Sales of Goods and Provision of Services (Billion Yuan) | 5.014 | 3.732 | 34.35% | | Net Cash Flow from Operating Activities (Billion Yuan) | 0.427 | 0.223 | 91.41% | | Indicator | End of Reporting Period | Beginning of Reporting Period | Year-on-Year Change | | Total Assets (Billion Yuan) | 40.153 | 35.114 | 14.35% | | Total Equity Attributable to Parent Company Owners (Billion Yuan) | 11.808 | 11.315 | 4.36% | (II) Business Performance The company achieved significant progress in its three major business segments: comprehensive water environment governance, industrial hazardous waste disposal, and all-for-one tourism - In H1 2018, company won 36 PPP orders, with a total bid amount of approximately 33.948 billion yuan, a 18.65% year-on-year increase, covering water environment comprehensive governance, all-for-one tourism, municipal landscaping, and rural revitalization[49] - All-for-one tourism business achieved significant expansion, winning 11 projects in H1 with a total investment of approximately 12.7 billion yuan, and investing in and operating scenic spots in Tengchong, Lin'an, Chongqing, and Lu'an[50] - Company continued to deepen its hazardous waste disposal industry layout, accumulating 1.76 million tons of industrial hazardous waste environmental assessment approvals (1.14 million tons for resource utilization, 0.62 million tons for harmless disposal), with 8 additional projects under construction to add 0.49 million tons of disposal capacity[51] - During the reporting period, company completed acquisitions of Shenzhen Jiezhi Technology Co., Ltd., Jiangsu Yingtian Chemical Co., Ltd., and five other companies, and established six new companies, significantly enhancing hazardous waste disposal capacity[52] (III) Company's Future Development Strategy The company will continue to deeply cultivate core businesses and implement financial system reforms to address challenges and ensure healthy development - Company will continue to deeply cultivate industries such as water environment comprehensive governance, all-for-one tourism, ecological restoration, and rural revitalization[54] - Company will strengthen financing capabilities for both the entity and projects, building a robust financial system, including adjusting loan structures, strengthening strategic cooperation with financial institutions, and introducing strategic investors to reduce asset-liability ratio[54][55] - Company will adjust business regions (focusing on financially strong areas) and business models (flexibly adopting EPC or PPP), and implement a financial veto mechanism to strictly control project commencement conditions[55] - Hazardous waste disposal industry will be a key expansion area for the company in the coming years, accelerating layout through a combination of new construction and M&A, building the broadest coverage and most comprehensive qualification system[56][57] II. Analysis of Main Business The company's main business revenue increased by 29.67%, with significant growth in engineering construction, water environment comprehensive governance, and all-for-one tourism, while management and financial expenses also rose Year-on-Year Changes in Key Financial Data | Item | Current Period (Yuan) | Prior Year Period (Yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 6,463,116,764.33 | 4,984,296,874.06 | 29.67% | | Operating Cost | 4,401,809,279.13 | 3,392,258,073.29 | 29.76% | | Selling Expenses | 15,820,126.47 | 18,159,609.24 | -12.88% | | Administrative Expenses | 788,406,987.27 | 538,736,981.38 | 46.34% | | Financial Expenses | 301,953,952.46 | 176,812,079.17 | 70.78% | | Income Tax Expense | 115,441,765.15 | 129,064,016.76 | -10.55% | | R&D Investment | 315,369,815.81 | 113,305,097.11 | 178.34% | | Net Cash Flow from Operating Activities | 426,822,681.60 | 222,991,167.67 | 91.41% | | Net Cash Flow from Investing Activities | -2,722,625,849.36 | -771,966,192.92 | -252.69% | | Net Cash Flow from Financing Activities | 1,077,157,014.41 | 966,610,370.43 | 11.44% | | Net Increase in Cash and Cash Equivalents | -1,218,592,652.09 | 417,635,343.58 | -391.78% | Operating Revenue Composition (by Product) | Product Category | Current Period Amount (Yuan) | Proportion of Operating Revenue | Prior Year Period Amount (Yuan) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Municipal Landscaping | 1,697,205,728.61 | 26.26% | 1,624,687,096.53 | 32.60% | 4.46% | | Water Environment Comprehensive Governance | 2,704,658,605.29 | 41.85% | 1,911,222,269.29 | 38.34% | 41.51% | | All-for-One Tourism | 1,161,653,837.58 | 17.97% | 98,613,807.01 | 1.98% | 1,077.98% | | Solid Waste Disposal | 482,053,405.53 | 7.46% | 980,278,948.90 | 19.67% | -50.82% | | Design and Planning | 234,557,747.02 | 3.63% | 141,313,832.29 | 2.84% | 65.98% | - Engineering construction revenue increased year-on-year, primarily due to active participation in water environment comprehensive governance and all-for-one tourism projects[62] - Operating revenue in Northwest, Southwest, Central, and South China regions grew rapidly, mainly because project value recognition in these areas increased in 2018[62] III. Analysis of Non-Main Business During the reporting period, non-main business primarily generated asset impairment losses of 151.28 million yuan, accounting for 19.43% of total profit, mainly from the provision for impairment of accounts receivable and other receivables Non-Main Business Analysis | Item | Amount (Yuan) | Proportion of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Asset Impairment | 151,283,657.99 | 19.43% | Mainly asset impairment losses from provisions for accounts receivable and other receivables | No | IV. Analysis of Assets and Liabilities At the end of the reporting period, the company's total assets increased by 14.35% year-on-year, with a decrease in cash and cash equivalents proportion and an increase in fixed assets and construction in progress Significant Changes in Asset Composition | Major Asset | End of Current Period Amount (Yuan) | Proportion of Total Assets | End of Prior Year Period Amount (Yuan) | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 2,033,656,434.16 | 5.06% | 3,092,864,539.50 | 11.95% | -6.89% | | Accounts Receivable | 9,110,946,609.70 | 22.69% | 5,754,568,014.49 | 22.23% | 0.46% | | Inventories | 14,090,982,641.34 | 35.09% | 9,319,528,426.80 | 36.00% | -0.91% | | Fixed Assets | 1,836,587,403.13 | 4.57% | 872,905,747.99 | 3.37% | 1.20% | | Construction in Progress | 305,097,134.98 | 0.76% | 41,204,261.42 | 0.16% | 0.60% | | Short-term Borrowings | 3,394,907,976.37 | 8.45% | 1,943,725,371.00 | 7.51% | 0.94% | | Long-term Borrowings | 507,487,157.08 | 1.26% | 206,926,499.00 | 0.80% | 0.46% | Asset Restrictions as of the End of the Reporting Period | Item | Period-End Book Value (Yuan) | Reason for Restriction | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,108,275,560.73 | Margin Deposit | | Inventories | 124,656,129.20 | Loan Collateral | | Fixed Assets | 696,936,873.06 | Loan Collateral | | Intangible Assets | 128,354,026.48 | Loan Collateral/Pledge | | Accounts Receivable | 364,866,545.19 | Loan Pledge | | Other Non-Current Assets - BOT Projects in Progress | 44,215,120.79 | Loan Pledge | | Long-term Equity Investments | 49,500,000.00 | Loan Pledge | | Total | 2,516,804,255.45 | -- | V. Analysis of Investment Status During the reporting period, the company acquired several significant equity investments totaling 776 million yuan through acquisitions, aiming to expand its hazardous waste disposal market presence Significant Equity Investments Acquired During the Reporting Period | Investee Company Name | Main Business | Investment Method | Investment Amount (Yuan) | Shareholding Ratio | | :--- | :--- | :--- | :--- | :--- | | Shenzhen Jiezhi Technology Co., Ltd. | Online recovery and regeneration of etching waste liquid | Acquisition | 371,000,000.00 | 70.00% | | Jiangsu Yingtian Chemical Co., Ltd. | Disposal and utilization of solvent-based hazardous waste | Acquisition | 184,000,000.00 | 60.00% | | Wujiang Taihu Industrial Waste Treatment Co., Ltd. | Hazardous waste disposal | Acquisition | 221,000,000.00 | 65.00% | | Total | -- | -- | 776,000,000.00 | -- | - These significant equity investments were all made using self-owned funds, aimed at expanding the hazardous waste disposal market, and have completed industrial and commercial change procedures[72] VI. Significant Asset and Equity Disposals The company did not undertake any significant asset or equity disposals during the reporting period - Company did not dispose of significant assets during the reporting period[78] - Company did not dispose of significant equity during the reporting period[79] VII. Analysis of Major Holding and Participating Companies The company owns several important subsidiaries covering environmental landscape design, seedling cultivation, engineering construction, and environmental protection industries, and expanded its environmental protection business through new establishments and acquisitions Major Subsidiaries and Participating Companies with Over 10% Impact on Company's Net Profit | Company Name | Company Type | Main Business | Registered Capital (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Beijing Orient Lihe Landscape Design Co., Ltd. | Subsidiary | Environmental landscape design | 25,000,000.00 | 55,573,025.56 | | Hubei Shunda Construction Group Co., Ltd. | Subsidiary | Construction engineering | 70,000,000.00 | 102,282,792.79 | - During the reporting period, company established Beijing Orient Kolin Environmental Testing Co., Ltd. and Orient Landscape Group Culture & Tourism Co., Ltd., and completed acquisitions of Shenzhen Jiezhi Technology Co., Ltd. and five other companies[81][83] - Company transferred equity of environmental protection business subsidiaries to Orient Landscape Group Environmental Co., Ltd. (newly established) under its wholly-owned subsidiary Beijing Orient Landscape Environmental Investment Co., Ltd. to meet operational management needs[82] VIII. Structured Entities Controlled by the Company The company did not control any structured entities during the reporting period - Company did not control any structured entities during the reporting period[84] IX. Forecast of Operating Performance for January-September 2018 The company expects net profit attributable to shareholders for January-September 2018 to increase by 20.00% to 50.00% year-on-year, driven by steady growth in water environment comprehensive governance and all-for-one tourism projects Forecast of Operating Performance for January-September 2018 | Indicator | Range/Amount | | :--- | :--- | | Net Profit Attributable to Listed Company Shareholders Change Range | 20.00% to 50.00% | | Net Profit Attributable to Listed Company Shareholders Change Interval (10,000 Yuan) | 103,978.33 to 129,972.91 | | Net Profit Attributable to Listed Company Shareholders for Jan-Sep 2017 (10,000 Yuan) | 86,648.60 | - Performance change mainly due to company's full utilization of project advantages in water environment comprehensive governance and all-for-one tourism markets, with steady project implementation, expected to drive year-on-year growth in operating revenue and profit[84] X. Risks Faced by the Company and Countermeasures The company faces risks from tightening credit, policy changes, and PPP model uncertainties, and has implemented measures like strengthening settlement management and optimizing financing structures - Company faces risks of continuous tightening credit environment, declining social financing scale growth, and increased financing difficulties for private enterprises[86] - Industry risks include local government revenue affected by real estate market, reduced municipal landscaping investment due to government debt cleanup, and PPP policy restrictions, potentially leading to slower order growth, extended construction periods, and difficulties in accounts receivable collection[87] - Traditional business models carry risks of advance payments, inventory, and accounts receivable collection efficiency affected by local government finances; PPP models face uncertainties due to imperfect policy environment, long project cycles, and impact of government changes on performance[88][89] - Company faces risks of revenue recognition and project settlement discrepancies, potential losses and impairment of completed but unsettled inventory, and accounts receivable collection risks[90][91][92][94][95] - Company has implemented measures such as establishing a settlement management department, formulating settlement management procedures, and preparing tracking reports to strengthen settlement management and risk control, completing 3.963 billion yuan in settlements in H1 2018[96] Section V Significant Matters I. Information on Annual General Meetings and Extraordinary General Meetings Held During the Reporting Period During the reporting period, the company held three shareholder meetings, including two extraordinary general meetings and one annual general meeting, with investor participation rates around 49% Shareholder Meeting Information for the Reporting Period | Meeting Session | Meeting Type | Investor Participation Ratio | Date of Meeting | | :--- | :--- | :--- | :--- | | First Extraordinary General Meeting of 2018 | Extraordinary General Meeting | 49.54% | February 09, 2018 | | Second Extraordinary General Meeting of 2018 | Extraordinary General Meeting | 49.57% | April 24, 2018 | | 2017 Annual General Meeting | Annual General Meeting | 49.63% | May 16, 2018 | II. Profit Distribution or Capital Reserve to Share Capital Conversion Plan for the Reporting Period The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period - Company plans no cash dividends, no bonus shares, and no conversion of capital reserves into share capital for the semi-annual period[100] III. Commitments Fulfilled and Overdue Unfulfilled by Actual Controller, Shareholders, Related Parties, Acquirers, and the Company During and as of the End of the Reporting Period The company reported no commitments fulfilled or overdue unfulfilled by its actual controller, shareholders, related parties, acquirers, or the company during or as of the end of the reporting period - No commitments fulfilled or overdue unfulfilled by actual controller, shareholders, related parties, acquirers, and the company during and as of the end of the reporting period[101] IV. Appointment and Dismissal of Accounting Firms The company's semi-annual financial report was not audited - Company's semi-annual report was not audited[102] V. Board of Directors' and Supervisory Board's Explanations on "Non-Standard Audit Report" for the Current Period The company reported no "non-standard audit report" issued by the accounting firm for the current reporting period - No "non-standard audit report" from the accounting firm for the current reporting period[103] VI. Board of Directors' Explanations on "Non-Standard Audit Report" for the Previous Year The company reported no explanations regarding a "non-standard audit report" for the previous year during the reporting period - No explanations regarding "non-standard audit report" for the previous year during the reporting period[103] VII. Bankruptcy Reorganization Matters The company did not have any bankruptcy reorganization matters during the reporting period - Company had no bankruptcy reorganization matters during the reporting period[104] VIII. Litigation Matters The company had no significant litigation or arbitration matters during the reporting period - No significant litigation or arbitration matters for the company during the reporting period[105] IX. Media Scrutiny In May 2018, the company provided explanations regarding public media scrutiny concerning its bond issuance and the provision ratio for bad debts of accounts receivable - In May 2018, company noted public media reports questioning its bond issuance and accounts receivable bad debt provision ratio, and has provided explanations[105] X. Penalties and Rectification The company had no penalties or rectification situations during the reporting period - Company had no penalties or rectification situations during the reporting period[106] XI. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller The company reported no issues regarding the integrity status of the company, its controlling shareholder, or actual controller during the reporting period - No issues regarding integrity status of the company, its controlling shareholder, or actual controller during the reporting period[107] XII. Implementation of Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company continued to implement multiple phases of equity incentive plans and employee stock ownership plans, with exercise prices adjusted and the first exercise period of the third phase completed - Second phase equity incentive plan's initial grant stock option exercise price adjusted from 18.20 yuan to 7.14 yuan, and reserved grant portion exercise price adjusted from 24.10 yuan to 9.53 yuan[108][109][112][115] - Third phase equity incentive plan's initial grant stock option exercise price adjusted from 22.28 yuan to 8.80 yuan, and reserved grant portion exercise price adjusted from 16.63 yuan to 16.54 yuan[116][117][119][122] - In January 2018, the first exercise period of the third phase stock option incentive plan's initial grant was completed, increasing company's total share capital by 1,623,204 shares[122] - First phase employee stock ownership plan completed purchase of 10,955,441 shares, and was extended in April 2018 to May 14, 2019[125][126] - Second phase employee stock ownership plan completed purchase of 92,474,622 shares, with a total transaction amount of 1.476 billion yuan[128][129] - Third phase employee stock ownership plan completed purchase of 46,047,584 shares, with a total transaction amount of 895 million yuan[131] XIII. Significant Related Party Transactions The company reported no related party transactions related to daily operations, asset or equity acquisitions/disposals, joint external investments, or non-operating related party receivables/payables during the reporting period, but there were related party guarantees - No related party transactions related to daily operations during the reporting period[133] - No non-operating related party receivables and payables during the reporting period[136] - No other significant related party transactions during the reporting period[137] XIV. Significant Contracts and Their Performance The company had no significant entrustment, contracting, leasing, or other major contracts during the reporting period, but provided multiple significant guarantees for subsidiaries, totaling 7.91% of the company's net assets - No entrustment, contracting, or leasing situations during the reporting period[138][139][140] Company's Guarantees for Subsidiaries (Partial) | Guaranteed Entity Name | Guarantee Limit (10,000 Yuan) | Actual Guarantee Amount (10,000 Yuan) | Guarantee Type | Guarantee Period | Fulfilled | | :--- | :--- | :--- | :--- | :--- | :--- | | Nantong Jiuzhou Environmental Protection Technology Co., Ltd. | 8,000 | 7,000 | Joint and Several Liability Guarantee | Two years from the expiration of the performance period of the guaranteed debt under the main contract | No | | Hangzhou Fuyang Jinyuan Copper Co., Ltd. | 13,000 | 3,000 | Joint and Several Liability Guarantee | Two years from the expiration of the performance period of the guaranteed debt under the main contract | No | | Shanghai Liyuan Water Treatment Technology Co., Ltd. | 15,000 | 12,892.65 | Joint and Several Liability Guarantee | Two years from the expiration of the performance period of the guaranteed debt under the main contract | No | | Zhongshan Environmental Industry Co., Ltd. | 12,000 | 8,500 | Joint and Several Liability Guarantee | Two years from the expiration of the performance period of the guaranteed debt under the main contract | No | - Actual guarantee balance totaled 933.5955 million yuan at the end of the reporting period, accounting for 7.91% of the company's net assets[151] - Debt guarantees provided directly or indirectly for guaranteed entities with an asset-liability ratio exceeding 70% totaled 513.2072 million yuan[152] - No irregular external guarantees by the company during the reporting period[153] XV. Social Responsibility The company highly values environmental protection, with key polluting subsidiaries strictly implementing pollution prevention measures, and actively fulfills its social responsibility for targeted poverty alleviation - Company and its subsidiaries are key polluting units designated by environmental protection authorities, including Nantong Jiuzhou Environmental Protection Technology Co., Ltd., Hangzhou Fuyang Jinyuan Copper Co., Ltd., etc.[156] - Company highly prioritizes pollution control, using advanced facilities and processes, strictly controlling pollutant emissions, and implementing environmental "three simultaneous" system, obtaining relevant administrative permits[159][160] - Company formulates and drills emergency plans for environmental incidents, ensuring effective and feasible environmental risk control, and develops enterprise environmental self-monitoring plans as required[161][162] - Company actively responds to national targeted poverty alleviation efforts, establishing a poverty alleviation leadership group, helping impoverished households escape poverty through employment, and formulating assessment and incentive schemes[164][165] XVI. Explanation of Other Significant Matters The company is planning to issue shares to acquire assets from related parties, which may constitute a major asset restructuring, leading to the suspension of its shares from trading since May 25, 2018 - Company is planning to issue shares to acquire assets from related parties, which may constitute a major asset restructuring[167] - Company's shares (stock abbreviation: Orient Landscape; stock code: 002310) have been suspended from trading since the market open on May 25, 2018, with multiple announcements of suspension progress and extension of resumption[167][168] - As of the report date, the company and relevant parties are actively advancing various tasks for this restructuring, including transaction scheme design, due diligence, auditing, and valuation, and the shares have not yet resumed trading[169] XVII. Significant Matters of Company Subsidiaries The company reported no significant matters concerning its subsidiaries during the reporting period - No significant matters concerning company subsidiaries during the reporting period[170] Section VI Share Changes and Shareholder Information I. Share Change Information During the reporting period, the company's total share capital increased by 1,623,204 shares due to the exercise of the first exercise period of the third phase stock option incentive plan's initial grant Share Change Information | Share Class | Quantity Before Change (Shares) | Proportion Before Change | Increase/Decrease in Current Change (Shares) | Quantity After Change (Shares) | Proportion After Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 1,059,533,270 | 39.52% | -39 | 1,059,533,231 | 39.49% | | II. Unrestricted Shares | 1,621,622,010 | 60.48% | 1,623,243 | 1,623,245,253 | 60.51% | | III. Total Shares | 2,681,155,280 | 100.00% | 1,623,204 | 2,682,778,484 | 100.00% | - Share change due to company exercising 1,623,204 stock options for 81 incentive recipients from the first exercise period of the third phase stock option incentive plan's initial grant in January 2018[173] - New shares completed registration with China Securities Depository and Clearing Corporation Limited Shenzhen Branch on January 10, 2018[174] II. Number of Shareholders and Shareholding Information At the end of the reporting period, the company had 89,290 common shareholders, with He Qiaonv and Tang Kai as actual controllers, holding 41.52% and 7.65% of shares respectively - Total number of common shareholders at the end of the reporting period: 89,290[179] Shareholding Information of Common Shareholders Holding 5% or More or Top 10 Common Shareholders (Partial) | Shareholder Name | Shareholder Nature | Shareholding Ratio | Number of Common Shares Held at Period-End (Shares) | Number of Restricted Common Shares Held (Shares) | Number of Unrestricted Common Shares Held (Shares) | Pledge or Freeze Status (Shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | He Qiaonv | Domestic Natural Person | 41.52% | 1,113,789,413 | 835,342,060 | 278,447,353 | Pledged 770,859,379 | | Tang Kai | Domestic Natural Person | 7.65% | 205,349,530 | 154,012,147 | 51,337,383 | - | | Zhongtai Chuangzhan (Zhuhai Hengqin) Asset Management Co., Ltd. | Domestic Non-State-Owned Legal Person | 3.75% | 100,621,920 | 0 | 100,621,920 | Pledged 99,079,700 | | Zhonghai Trust Co., Ltd. - Zhonghai Trust - Anying No. 19 Orient Landscape Employee Stock Ownership Plan Collective Fund Trust | Domestic Non-State-Owned Legal Person | 3.45% | 92,474,622 | 0 | 92,474,622 | - | - He Qiaonv and Tang Kai are a married couple and the company's actual controllers. He Qiaonv and He Guojie are siblings[180] III. Changes in Controlling Shareholder or Actual Controller The company's controlling shareholder and actual controller remained unchanged during the reporting period - Company's controlling shareholder remained unchanged during the reporting period[182] - Company's actual controller remained unchanged during the reporting period[182] Section VII Information on Preference Shares Information on Preference Shares The company had no preference shares during the reporting period - Company had no preference shares during the reporting period[185] Section VIII Information on Directors, Supervisors, and Senior Management I. Changes in Shareholdings of Directors, Supervisors, and Senior Management During the reporting period, the shareholdings of some directors, supervisors, and senior management changed, with Vice Presidents Jia Ying and Hou Jiandong increasing their holdings, and Supervisory Board Chairman Fang Yi decreasing hers Changes in Shareholdings of Directors, Supervisors, and Senior Management (Partial) | Name | Position | Beginning of Period Shareholding (Shares) | Shares Increased This Period (Shares) | Shares Decreased This Period (Shares) | End of Period Shareholding (Shares) | | :--- | :--- | :--- | :--- | :--- | :--- | | He Qiaonv | Chairman | 1,113,789,413 | 0 | 0 | 1,113,789,413 | | Fang Yi | Chairman of Supervisory Board | 11,337,390 | 0 | 100,000 | 11,237,390 | | Jia Ying | Vice President | 0 | 32,700 | 0 | 32,700 | | Hou Jiandong | Vice President | 1,000 | 8,000 | 0 | 9,000 | II. Changes in Company Directors, Supervisors, and Senior Management The company's directors, supervisors, and senior management remained unchanged during the reporting period, with specific details available in the 2017 annual report - Company's directors, supervisors, and senior management remained unchanged during the reporting period, specific details available in the 2017 annual report[189] Section IX Information on Corporate Bonds I. Basic Information on Corporate Bonds The company's four publicly issued and listed corporate bonds, totaling 2.25 billion yuan, were all unexpired at the end of the reporting period, with annual interest payments and principal repayment at maturity Basic Information on Corporate Bonds | Bond Abbreviation | Bond Code | Issue Date | Maturity Date | Bond Balance (10,000 Yuan) | Interest Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | 16 Donglin 01 | 112380 | April 19, 2016 | April 19, 2021 | 100,000 | 5.78% | | 16 Donglin 02 | 112426 | August 10, 2016 | August 10, 2021 | 60,000 | 4.70% | | 16 Donglin 03 | 112464 | October 24, 2016 | October 24, 2021 | 60,000 | 4.00% | | 18 Donglin 01 | 112705 | May 18, 2018 | May 18, 2021 | 5,000 | 7.00% | - All corporate bonds accrue simple interest annually, no compound interest, with annual interest payments and principal repayment at maturity[192] - During the reporting period, 16 Donglin 01 completed its 2018 interest payment on time, other bonds had not yet entered their interest payment and redemption periods[192] II. Information on Bond Trustees and Credit Rating Agencies The bond trustee for the company's corporate bonds is Huatai United Securities Co., Ltd., and the credit rating agency is Shanghai Brilliance Credit Rating & Investors Service Co., Ltd., with no changes during the reporting period - Bond Trustee: Huatai United Securities Co., Ltd., Contact Person: Liu Hongze, Phone: 010-56839492[194] - Credit Rating Agency: Shanghai Brilliance Credit Rating & Investors Service Co., Ltd.[194] - No changes in the bond trustee or credit rating agency appointed by the company during the reporting period[194] III. Use of Corporate Bond Proceeds The proceeds from each bond issuance were used as committed in the prospectus, primarily for supplementing working capital and repaying other borrowings, with an ending balance of 3.2863 million yuan - 16 Donglin 01 proceeds: 207 million yuan for working capital, 790 million yuan for repaying other borrowings[195] - 16 Donglin 02 proceeds entirely used to repay principal and interest of "15 Orient Landscape CP002"[195] - 16 Donglin 03 proceeds: 190 million yuan for working capital, 410 million yuan for repaying principal and interest of "13 Orient Landscape MTN001"[195] - 18 Donglin 01 proceeds: 50 million yuan entirely used to supplement working capital[195] - All corporate bond proceeds were used consistently with the purposes, plans, and other agreements committed in the prospectus[196] IV. Corporate Bond Credit Rating Information Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. maintained the company's main credit rating at AA+ and the bond credit ratings for "16 Donglin 01, 02, 03" and "18 Donglin 01" at AA+, with a stable outlook - Shanghai Brilliance Rating maintained company's main credit rating at AA+, with a stable outlook[197] - Maintained AA+ bond credit ratings for 16 Donglin 01, 16 Donglin 02, 16 Donglin 03, and 18 Donglin 01[197] - No rating differences for other bonds or debt financing instruments issued by the company in China during the reporting period[197] V. Corporate Bond Credit Enhancement Mechanisms, Repayment Plans, and Other Repayment Safeguard Measures All corporate bonds were issued without collateral, with repayment plans and safeguard measures consistent with the prospectus, and a special repayment reserve account established for management - All corporate bonds mentioned above were issued without collateral[198] - Repayment plans and safeguard measures during the reporting period were consistent with the prospectus and relevant commitments, with no changes[198] - All corporate bonds have a special repayment reserve account established for the collection and management of repayment reserves[198] VI. Convening of Bondholder Meetings During the Reporting Period The company did not have any matters requiring a bondholder meeting during the reporting period, thus no bondholder meetings were held - No matters requiring a bondholder meeting during the reporting period, thus no bondholder meetings were held[199] VII. Performance of Duties by Bond Trustee During the Reporting Period During the reporting period, the bond trustee, Huatai United Securities Co., Ltd., performed its duties in accordance with relevant regulations and agreements, and publicly disclosed temporary trustee reports on significant company matters - During the reporting period, bond trustee performed duties in accordance with "Measures for the Administration of Corporate Bond Issuance and Trading" and "Bond Trustee Agreement"[200][201] - Trustee publicly disclosed temporary trustee reports on company's change in business scope and registered capital, suspension of trading due to major asset restructuring, and other matters[201] - Trustee had no conflicts of interest in performing its duties[201] VIII. Key Accounting Data and Financial Indicators as of the End of the Reporting Period and Previous Year-End (or Same Period of Previous Year) At the end of the reporting period, the company's liquidity ratios decreased, asset-liability ratio increased, and EBITDA interest coverage ratio decreased, but loan and interest repayment rates remained 100% Key Accounting Data and Financial Indicators | Item | End of Current Period | End of Previous Year | Change from Previous Year-End | | :--- | :--- | :--- | :--- | | Current Ratio | 102.46% | 112.76% | -10.30% | | Asset-Liability Ratio | 70.21% | 67.62% | 2.59% | | Quick Ratio | 46.49% | 54.01% | -7.52% | | Item | Current Period | Prior Year Period | Change from Prior Year Period | | EBITDA Interest Coverage Ratio | 4.23 | 5 | -15.40% | | Loan Repayment Rate | 100.00% | 100.00% | 0.00% | | Interest Payment Rate | 100.00% | 100.00% | 0.00% | IX. Company's Overdue Unpaid Debts The company had no overdue unpaid debts - Company had no overdue unpaid debts[203] X. Interest Payment and Redemption of Other Bonds and Debt Financing Instruments During the Reporting Period During the reporting period, all other bonds and debt financing instruments of the company were paid interest and redeemed on time, with no delays or inability to pay interest and principal - During the reporting period, other bonds and debt financing instruments were paid interest and redeemed on time, with no delays or inability to pay interest and principal[204] Other Bonds and Debt Financing Instruments with Timely Interest Payment and Redemption During the Reporting Period | Bond Abbreviation | Bond Type | Actual Issuance Size (Billion) | Maturity Date | Principal and Interest Repayment Status | | :--- | :--- | :--- | :--- | :--- | | 17 Orient Landscape SCP001 | Super Short-term Commercial Paper | 10 | 2018-03-04 | Timely interest payment and redemption | | 17 Orient Landscape SCP002 | Super Short-term Commercial Paper | - | 2018-05-22 | Timely interest payment and redemption | | 15 Orient Landscape MTN001 | Medium-term Notes | - | 2018-06-10 | Timely interest payment and redemption | | 17 Orient Landscape SCP003 | Super Short-term Commercial Paper | - | 2018-07-15 | Timely interest payment and redemption | XI. Bank Credit Lines Obtained, Utilized, and Bank Loan Repayment During the Reporting Period The company maintains good cooperative relationships with financial institutions, securing high credit lines, with 11.087 billion yuan obtained and 5.153 billion yuan utilized, and all bank loans repaid on time - As of the end of the reporting period, company headquarters obtained 11.087 billion yuan in credit lines from various financial institutions[205] - 5.153 billion yuan of credit lines utilized, 5.934 billion yuan unused[205] - During the reporting period, company repaid bank loans on time, with no extensions or reductions[205] XII. Execution of Commitments and Agreements in Corporate Bond Prospectus During the Reporting Period The company strictly adhered to the relevant agreements and commitments in the prospectus, with no matters causing significant impact on investors' interests - Company strictly adhered to relevant agreements and commitments in the prospectus, with no matters causing significant impact on investors' interests[206] XIII. Significant Matters Occurred During the Reporting Period During the reporting period, the company experienced changes in its business scope and registered capital, and its shares were suspended from trading due to a planned major asset restructuring - In December 2017, company changed business scope, adding sports event operation, exhibition organization, cultural and artistic exchange activities, etc.[207] - In June 2018, company again changed business scope, prioritizing water pollution control, adding sales of electronic products, computers, software, and auxiliary equipment, and changing registered capital to 2.682778484 billion yuan[210] - In May 2018, company planned to issue shares to acquire assets from related parties, potentially constituting a major asset restructuring, leading to suspension of company shares from trading since market open on May 25, 2018, and not yet resumed as of report date[213] XIV. Whether Corporate Bonds Have Guarantors The company's corporate bonds do not have guarantors - Company's corporate bonds do not have guarantors[214] Section X Financial Report I. Audit Report The company's semi-annual financial report was not audited - Company's semi-annual financial report was not audited[216] II. Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2018 1. Consolidated Balance Sheet As of June 30, 2018, the company's consolidated total assets reached 40.153 billion yuan, with a high proportion of current assets, and short-term borrowings and accounts payable as major current liabilities Consolidated Balance Sheet (Period-End Balance) | Item | Period-End Balance (Yuan) | | :--- | :--- | | Cash and Cash Equivalents | 2,033,656,434.16 | | Accounts Receivable | 9,110,946,609.70 | | Inventories | 14,090,982,641.34 | | Total Current Assets | 25,989,964,903.92 | | Fixed Assets | 1,836,587,403.1