KINGFA(SH:600143)2020-10-14 16:00Important Notes The board of directors guarantees the authenticity and completeness of this unaudited quarterly report - The company's Board of Directors, Supervisory Committee, and all directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report and assume corresponding legal responsibilities4 - All company directors attended the board meeting to review this quarterly report4 - The company's third-quarter report for 2020 is unaudited4 Company Profile and Financial Summary The company achieved explosive performance growth in the first three quarters of 2020, with significant increases in revenue, net profit, and operating cash flow Core Financial Data Summary The company experienced explosive growth in the first three quarters of 2020, driven by substantial increases in revenue, net profit, and operating cash flow Key Financial Data for the First Three Quarters of 2020 | Indicator | Jan-Sep 2020 (RMB) | Jan-Sep 2019 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 26,199,862,922.02 | 20,376,130,654.30 | 28.58% | | Net Profit Attributable to Shareholders | 3,794,203,086.82 | 944,403,397.65 | 301.76% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 3,761,459,967.85 | 777,006,745.84 | 384.10% | | Net Cash Flow from Operating Activities | 6,044,225,788.17 | 1,872,438,224.72 | 222.80% | | Basic Earnings Per Share (RMB/Share) | 1.4743 | 0.3573 | 312.62% | | Weighted Average Return on Equity | 30.74% | 9.14% | Increased by 21.60 percentage points | Non-recurring Gains and Losses for the First Three Quarters of 2020 | Item | Amount for Jan-Sep (RMB) | Notes | | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | -10,453,015.49 | Mainly losses from disposal of fixed assets | | Government Grants Included in Current Profit/Loss | 80,419,619.32 | Mainly government grants recognized in the current period | | Gains/Losses from Fair Value Changes of Financial Instruments | -6,897,950.69 | - | | Other Non-operating Income and Expenses | -24,108,239.20 | - | | Total | 32,743,118.97 | - | Shareholder Structure Analysis As of the reporting period end, the company had 115,253 shareholders, with a relatively concentrated and stable ownership structure led by the founder - As of the reporting period end, the total number of common shareholders was 115,25311 Top 10 Shareholders | Shareholder Name | Number of Shares Held (shares) | Shareholding Ratio (%) | Share Status | | :--- | :--- | :--- | :--- | | Yuan Zhimin | 510,380,393 | 19.83 | Pledged 255,190,197 | | Xiong Haitao | 216,241,359 | 8.40 | None | | Li Nanjing | 90,769,754 | 3.53 | None | | Song Ziming | 70,928,880 | 2.76 | Pledged 20,300,000 | | 2016 Employee Stock Ownership Plan | 70,766,436 | 2.75 | None | | China Securities Finance Corporation Limited | 68,880,813 | 2.68 | None | | Central Huijin Asset Management Ltd. | 56,573,900 | 2.20 | None | | Xia Shiyong | 55,601,209 | 2.16 | None | | HKSCC NOMINEES LIMITED | 54,377,538 | 2.11 | None | | Xiong Lingyao | 45,000,200 | 1.75 | None | Analysis of Significant Events This section details significant changes in key financial statement items and analyzes their underlying causes Analysis of Significant Changes in Key Financial Items The company reported significant fluctuations across its financial statements, including major changes in assets, liabilities, expenses, and cash flows Significant Changes in Balance Sheet Items | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Construction in Progress | 73.83% | Construction of parent company's pilot plant and Zhuhai Wantong's 30,000-ton PLA project | | Other Non-current Assets | 99.88% | Increase in prepayments for construction and equipment | | Short-term Borrowings | -62.04% | Company reduced short-term loans | | Notes Payable | 257.23% | Increased use of notes for payment of goods | | Taxes Payable | 162.46% | Increase in corporate income tax payable | Significant Changes in Income Statement Items | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Taxes and Surcharges | 52.80% | Driven by an increase in value-added tax | | Selling Expenses | 66.31% | Increase in sales bonuses and commissions | | General & Administrative Expenses | 37.92% | Increase in employee compensation | | Research & Development Expenses | 33.17% | Increase in product R&D investment | | Non-operating Expenses | 671.06% | Increase in donation expenses | | Income Tax Expense | 414.26% | Increase in corporate income tax | Significant Changes in Cash Flow Statement Items | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 222.80% | Increase in cash receipts from sales and advances from customers | | Net Cash Flow from Investing Activities | 55.02% | Resulted from external equity transactions in the same period last year | | Net Cash Flow from Financing Activities | -196.34% | Decrease in bank loans | Appendix: Financial Statements This appendix presents the unaudited consolidated and parent company financial statements for the period ended September 30, 2020 Financial Statements This appendix provides the unaudited consolidated and parent company financial statements of Kingfa Sci & Tech Co, Ltd as of September 30, 2020 - The appendix includes the company's unaudited consolidated and parent company balance sheets, income statements, and cash flow statements for Q3 2020202733 Consolidated Balance Sheet As of September 30, 2020, total assets grew to RMB 30.27 billion, while total liabilities decreased, optimizing the company's capital structure Key Items from Consolidated Balance Sheet (Unit: RMB billion) | Item | September 30, 2020 | December 31, 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 30.27 | 29.17 | 3.78% | | Total Liabilities | 15.48 | 18.46 | -16.15% | | Equity Attributable to Parent Company | 14.06 | 10.54 | 33.43% | Parent Company Balance Sheet The parent company's total assets remained stable at RMB 20.77 billion, while owner's equity grew by 20.99%, indicating solid profitability Key Items from Parent Company Balance Sheet (Unit: RMB billion) | Item | September 30, 2020 | December 31, 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 20.77 | 20.66 | 0.49% | | Total Liabilities | 12.16 | 13.55 | -10.26% | | Owner's Equity | 8.60 | 7.11 | 20.99% | Consolidated Income Statement For the first three quarters of 2020, the company's total revenue grew by 28.58% and net profit attributable to shareholders surged by 301.76% Key Items from Consolidated Income Statement (Unit: RMB billion) | Item | Jan-Sep 2020 | Jan-Sep 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 26.20 | 20.38 | 28.58% | | Operating Profit | 4.54 | 1.07 | 323.31% | | Net Profit Attributable to Parent Company Shareholders | 3.79 | 0.94 | 301.76% | | Basic Earnings Per Share (RMB/Share) | 1.4743 | 0.3573 | 312.62% | Parent Company Income Statement The parent company's net profit grew by 598.45% in the first three quarters of 2020, significantly outpacing the consolidated growth rate Key Items from Parent Company Income Statement (Unit: RMB billion) | Item | Jan-Sep 2020 | Jan-Sep 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 10.67 | 8.39 | 27.09% | | Operating Profit | 1.96 | 0.28 | 604.67% | | Net Profit | 1.75 | 0.25 | 598.45% | Consolidated Cash Flow Statement Net cash flow from operating activities increased by 222.80% in the first three quarters of 2020, while financing activities resulted in a net cash outflow Key Items from Consolidated Cash Flow Statement (Unit: RMB billion) | Item | Jan-Sep 2020 | Jan-Sep 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 6.04 | 1.87 | 222.80% | | Net Cash Flow from Investing Activities | -1.92 | -4.27 | 55.02% | | Net Cash Flow from Financing Activities | -3.50 | 3.63 | -196.34% | | Net Increase in Cash and Cash Equivalents | 0.60 | 1.25 | -52.43% | Parent Company Cash Flow Statement The parent company generated strong operating cash flow of RMB 4.37 billion, a 124.45% increase, while actively reducing debt Key Items from Parent Company Cash Flow Statement (Unit: RMB billion) | Item | Jan-Sep 2020 | Jan-Sep 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 4.37 | 1.95 | 124.45% | | Net Cash Flow from Investing Activities | 0.11 | -3.97 | N/A | | Net Cash Flow from Financing Activities | -3.97 | 2.82 | -240.79% | | Net Increase in Cash and Cash Equivalents | 0.50 | 0.81 | -38.87% |