华建集团(600629) - 2018 Q4 - 年度财报

Definitions This chapter defines and explains common terms used in the report, including regulatory bodies, exchanges, company names, subsidiary names, and currency units, to ensure clarity and consistency of the report content - Defined regulatory bodies such as the China Securities Regulatory Commission, Shanghai Stock Exchange, and Shanghai State-owned Assets Supervision and Administration Commission[11] - Clarified that "Company", "the Company", and "Huajian Group" all refer to East China Architectural Design & Research Institute Co., Ltd[11] - Listed the full names and abbreviations of major subsidiaries and related parties, such as East China Design Institute, Shanghai Institute, and Modern Construction Consulting[11] Company Profile and Key Financial Indicators This chapter provides Huajian Group's basic information, contact details, registered and office addresses, information disclosure media, and details the company's key accounting data and financial indicators for the past three years, along with quarterly financial data for 2018, reflecting its financial performance and operational overview during the reporting period - The company's legal representative is Qin Baohua, stock abbreviation is "Huajian Group", stock code is 600629, listed on the Shanghai Stock Exchange[13][17] Key Accounting Data for the Past Three Years (Consolidated Statements) | Key Accounting Data | 2018 (CNY) | 2017 (CNY) | Period-on-Year Change (%) | 2016 (CNY) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 5,958,919,916.66 | 5,289,745,002.50 | 12.65 | 4,550,810,980.01 | | Net Profit Attributable to Shareholders of Listed Company | 263,540,732.70 | 256,411,168.89 | 2.78 | 241,396,227.63 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains and Losses) | 216,674,164.86 | 215,535,400.69 | 0.53 | 178,024,916.12 | | Net Cash Flow from Operating Activities | 338,073,328.56 | 407,213,953.73 | -16.98 | 174,562,406.83 | | Net Assets Attributable to Shareholders of Listed Company (Period-End) | 2,697,690,239.18 | 2,482,114,202.98 | 8.69 | 1,004,627,679.90 | | Total Assets (Period-End) | 8,484,849,666.81 | 7,403,521,911.15 | 14.61 | 4,838,575,387.50 | Key Financial Indicators for the Past Three Years (Consolidated Statements) | Key Financial Indicators | 2018 | 2017 | Period-on-Year Change (%) | 2016 | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (CNY/share) | 0.6098 | 0.6195 | -1.57 | 0.6723 | | Diluted Earnings Per Share (CNY/share) | 0.6098 | 0.6195 | -1.57 | 0.6723 | | Basic Earnings Per Share (Excluding Non-Recurring Gains and Losses) (CNY/share) | 0.5013 | 0.5207 | -3.73 | 0.4958 | | Weighted Average Return on Net Assets (%) | 10.18 | 12.48 | decrease of 2.30 percentage points | 27.71 | | Weighted Average Return on Net Assets (Excluding Non-Recurring Gains and Losses) (%) | 8.37 | 10.49 | decrease of 2.12 percentage points | 20.43 | - The company's 2018 quarterly financial data shows significant growth in operating revenue and net cash flow from operating activities in the fourth quarter[23] 2018 Quarterly Key Financial Data (Consolidated Statements) | Indicator | Q1 (Jan-Mar) (CNY) | Q2 (Apr-Jun) (CNY) | Q3 (Jul-Sep) (CNY) | Q4 (Oct-Dec) (CNY) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,291,947,639.57 | 1,535,554,917.17 | 1,436,786,480.57 | 1,694,630,879.35 | | Net Profit Attributable to Shareholders of Listed Company | 71,138,198.99 | 76,512,501.95 | 60,331,921.50 | 55,558,110.26 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains and Losses) | 47,924,634.81 | 72,174,311.58 | 43,148,679.77 | 53,426,538.70 | | Net Cash Flow from Operating Activities | -446,888,951.73 | -43,007,611.44 | 54,611,823.51 | 773,358,068.22 | Non-Recurring Gains and Losses Items and Amounts | Non-Recurring Gains and Losses Item | 2018 Amount (CNY) | 2017 Amount (CNY) | 2016 Amount (CNY) | | :--- | :--- | :--- | :--- | | Gains and Losses from Disposal of Non-Current Assets | 5,345,334.19 | 1,881,799.70 | 2,091,678.79 | | Government Subsidies Included in Current Profit and Loss (Excluding those closely related to the company's business and enjoyed at fixed or quantitative standards) | 53,282,727.50 | 49,202,830.41 | 75,658,053.17 | | Other Non-Operating Income and Expenses Apart from the Above | 1,590,585.74 | 1,711,704.67 | 2,018,208.39 | | Impact on Minority Interests | -3,360,667.00 | -3,035,995.66 | -3,351,491.35 | | Income Tax Impact | -9,991,412.59 | -8,884,570.92 | -13,045,137.49 | | Total | 46,866,567.84 | 40,875,768.20 | 63,371,311.51 | Items Measured at Fair Value | Item Name | Beginning Balance (CNY) | Ending Balance (CNY) | Current Period Change (CNY) | | :--- | :--- | :--- | :--- | | Available-for-Sale Financial Assets - Available-for-Sale Equity Instruments | 6,679,912.64 | 7,277,293.41 | 597,380.77 | Company Business Overview This chapter outlines Huajian Group's main businesses, operating model, industry conditions, and core competencies during the reporting period, positioning itself as a comprehensive solution provider with engineering design consulting at its core, covering architecture, planning, municipal, and water conservancy sectors, securing business through bidding and direct client engagement, and demonstrating significant advantages in brand, talent, technological R&D, and market presence Main Business, Operating Model, and Industry Overview The company's main business focuses on engineering design consulting, providing high-quality integrated solutions for urban construction across architecture, planning, municipal, and water conservancy sectors, primarily operating through bidding and direct client engagement, while facing new demands from a stable yet changing economy, high-quality development, upgraded urban construction methods, and accelerated technological iteration, leading to intensified market competition and declining profit margins - The company's main business centers on engineering design consulting, providing high-quality integrated solutions for urban construction, covering architecture, planning, municipal, and water conservancy sectors, and actively engaging in engineering survey, planning and design, engineering design, municipal design, water conservancy engineering design, landscape architecture design, construction decoration design, historical building protection and utilization design, architectural acoustics design, whole-process project management, construction engineering contracting (EPC), engineering supervision, construction engineering investment control, technology consulting, and project planning[28] - The company generally undertakes business through two modes: bidding (public and invited tenders) and direct client engagement[29] - The industry faces new requirements such as a stable yet changing economy, high-quality development, continuous deepening of national reforms, upgrading of urban construction methods, and building a beautiful China[30] - From an investment environment perspective, fixed asset investment growth has slowed, investment structure has optimized, PPP investment has returned to rationality, and the "Belt and Road" initiative continues to gain momentum[30] - The overall industry development scale is accelerating, with rapid growth in practitioners and operating revenue, but overall operating profit margins have declined[30] - Business structure is diversified, with a continuous decline in the proportion of traditional survey and design business, architectural design as the main source of income, transportation design growing by nearly 100%, engineering consulting business showing rapid future growth, and engineering general contracting business profitability needing improvement[31] - Management models are primarily based on economic responsibility, project management forms are diverse, labor costs account for 20%-40% of operating revenue, talent loss is severe, state-owned enterprise reform is slow, and the industry remains cautious about capital operations[31] - Expenditures on scientific and technological activities and income from achievement transfers continue to grow, with BIM technology being a key focus area for industry R&D[32] Core Competitiveness Analysis The company's core competitiveness lies in its brand recognition and reputation, talent advantages, strong technological R&D and application capabilities, and extensive business scope and market presence, having been listed among ENR's "Top 150 Global Design Firms" for over a decade - The company has been listed among the "Top 150 Global Design Firms" by Engineering News-Record (ENR) for over ten consecutive years[33] - It boasts excellent brand recognition and reputation, having designed a number of renowned landmark buildings, such as the National Exhibition and Convention Center (Shanghai) and the Zhuhai Port of the Hong Kong-Zhuhai-Macao Bridge[33] - The company possesses significant talent advantages, including 2 academicians of the Chinese Academy of Engineering, 7 national engineering survey and design masters, 9 Shanghai leading talents, 1,412 senior professional title holders, and 1,634 individuals with various professional registration qualifications[34] - It demonstrates strong technological R&D and application capabilities, with core technologies such as super high-rise building analysis and design, critical deep foundation design for buildings in soft soil areas, and large-span spatial structure analysis and design, achieving breakthroughs in BIM technology and architectural industrialization technology[35] - With a comprehensive business scope and broad market presence, the company has formed a vertical business chain covering survey, design, whole-process project management, and engineering contracting, with operations spanning planning, architecture, water conservancy, and municipal sectors, supported by 35 domestic branches and 9 overseas branches[36] Discussion and Analysis of Operations This chapter provides an in-depth analysis of Huajian Group's 2018 operating results, financial position, cash flows, investment activities, future development strategies, and risks, highlighting growth in new contract value and operating revenue, steady progress in national and international strategies, but also challenges in profit growth, goodwill impairment, and R&D investment Overview of Operating Results In 2018, the company achieved growth in both new contract value and operating revenue, with a slight increase in net profit attributable to the parent company, driven by a significant rise in large-scale high-end projects and various business segments, while steadily advancing its national and deep internationalization strategies, and securing international awards for its overseas operations 2018 Key Operating Data | Indicator | Amount (billion CNY) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | New Contract Value | 9.638 | 15.55 | | Operating Revenue | 5.959 | 12.65 | | Net Profit Attributable to Parent Company | 0.264 | 2.78 | 2018 New Contract Value by Business Segment | Business Segment | Amount (billion CNY) | Year-on-Year Growth (%) | Share of Total New Contract Value (%) | | :--- | :--- | :--- | :--- | | Engineering Design | 5.782 | 21.74 | 60 | | Engineering General Contracting | 3.147 | 6.97 | 33 | | Engineering Technical Management Services | 0.526 | 16.16 | - | | Engineering Survey | 0.183 | flat | 2 | - The company signed 114 design and consulting contracts over 10 million CNY and 9 engineering contracting contracts over 50 million CNY, indicating a substantial increase in large-scale high-end projects[40][41] - The nationalization strategy progressed steadily, with the establishment of Xiong'an Design Institute and South China Center, and new contract values exceeding 300 million CNY in Guizhou, Jiangsu, Hubei, Fujian, Anhui, and Shandong, excluding Shanghai[43] - Adhering to a "deep internationalization" strategy, overseas business continued to grow, with 202 new overseas projects signed, totaling 556 million CNY in contract value, a 13.53% year-on-year increase; overseas main business revenue reached 355 million CNY, a 2.42% year-on-year increase[44] - Overseas project market distribution was primarily Asia (63%), Africa (15%), Americas (9%), Europe (7%), and Oceania (6%)[44] - The Vietnam Alpha Town project received two top awards in 2018 for Best Office Architecture Design and Best Office Architecture Development in Vietnam Real Estate[44] Analysis of Key Financial Data During the reporting period, the company's operating revenue grew by 12.65%, but operating profit and net profit growth were slower, mainly due to goodwill impairment and increased R&D investment, with both main business revenue and costs rising, and engineering design remaining the primary revenue source, while accounts receivable and available-for-sale financial assets significantly increased, as did long-term borrowings, posing challenges from industry restructuring and intensified market competition - The company achieved operating revenue of 5.959 billion CNY, a 12.65% year-on-year increase; operating profit of 319 million CNY, a 1.24% year-on-year increase; and net profit of 306 million CNY, a 4.17% year-on-year increase; the slower profit growth compared to revenue was primarily due to a 40.11 million CNY provision for goodwill impairment and increased R&D investment[45] Analysis of Profit Statement and Cash Flow Statement Related Items | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 5,958,919,916.66 | 5,289,745,002.50 | 12.65 | | Operating Cost | 4,442,619,185.27 | 3,939,424,366.14 | 12.77 | | Selling Expenses | 75,151,296.06 | 64,524,909.44 | 16.47 | | Administrative Expenses | 809,187,888.35 | 721,573,205.04 | 12.14 | | R&D Expenses | 238,036,409.64 | 171,448,735.87 | 38.84 | | Financial Expenses | -466,299.68 | -8,881,130.18 | 94.75 | | Asset Impairment Losses | 114,707,732.84 | 83,311,887.34 | 37.68 | | Net Cash Flow from Operating Activities | 338,073,328.56 | 407,213,953.73 | -16.98 | | Net Cash Flow from Investing Activities | -333,075,064.52 | -439,519,037.81 | 24.22 | | Net Cash Flow from Financing Activities | 53,146,347.23 | 469,695,745.63 | -88.68 | - Main business revenue was 5.946 billion CNY, a 12.66% year-on-year increase; main business cost was 4.436 billion CNY, a 12.83% year-on-year increase[48] Main Business by Product Segment | Product Segment | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Margin (%) | Operating Revenue Year-on-Year Change (%) | Operating Cost Year-on-Year Change (%) | Gross Margin Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Engineering Design | 3,777,362,551.88 | 2,453,639,855.78 | 35.04 | 14.00 | 14.68 | decrease of 0.39 percentage points | | Engineering Contracting | 1,595,430,124.44 | 1,563,634,891.83 | 1.99 | 10.48 | 10.56 | decrease of 0.07 percentage points | | Engineering Technical Management & Survey | 559,936,166.23 | 410,707,753.47 | 26.65 | 9.24 | 10.31 | decrease of 0.71 percentage points | | Information Technology Services & Sales | 12,946,685.65 | 7,755,722.49 | 40.09 | 68.32 | 55.93 | increase of 4.75 percentage points | | Total | 5,945,675,528.20 | 4,435,738,223.57 | 25.40 | 12.66 | 12.83 | decrease of 0.11 percentage points | Main Business by Region | Region | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Margin (%) | Operating Revenue Year-on-Year Change (%) | Operating Cost Year-on-Year Change (%) | Gross Margin Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shanghai Local Projects | 2,927,963,690.52 | 2,358,116,658.86 | 19.46 | 8.43 | 6.54 | increase of 1.43 percentage points | | Projects Outside Shanghai | 2,661,994,466.69 | 1,864,461,301.38 | 29.96 | 19.37 | 23.32 | decrease of 2.24 percentage points | | Overseas Projects | 355,717,370.99 | 213,160,263.33 | 40.08 | 2.42 | 3.52 | decrease of 0.63 percentage points | | Total | 5,945,675,528.20 | 4,435,738,223.57 | 25.40 | 12.66 | 12.83 | decrease of 0.11 percentage points | - Total R&D investment was 263 million CNY, accounting for 4.41% of operating revenue; the number of R&D personnel was 332, accounting for 4.63% of the company's total workforce[59] - Investment income was 55.8844 million CNY, a 210.46% year-on-year increase, primarily due to increased cash dividends from associate Shanghai New Jiangwan City Investment Development Co., Ltd. and increased investment income recognized under the equity method from the new equity investment in Wuxi Municipal Design and Research Institute Co., Ltd[64] Asset and Liability Status Changes | Item Name | Period-End Amount (CNY) | Period-End Share of Total Assets (%) | Prior Period-End Amount (CNY) | Prior Period-End Share of Total Assets (%) | Period-End Change from Prior Period-End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Notes and Accounts Receivable | 2,021,658,367.32 | 23.83 | 1,457,319,046.95 | 19.68 | 38.72 | Due to revenue growth, new large-value settlement receivables from completed general contracting projects | | Available-for-Sale Financial Assets | 469,244,993.41 | 5.55 | 251,947,613.48 | 3.40 | 86.84 | Subsidiary Yunzhu Investment's new equity investment in Shanghai Shentong Jinpu Phase I New Industry Equity Investment Partnership (Limited Partnership) | | Notes and Accounts Payable | 2,480,693,922.77 | 29.24 | 1,850,779,249.27 | 25.00 | 34.04 | Increase in estimated payable subcontracting fees at period-end based on completion progress | | Long-Term Borrowings | 245,594,333.75 | 2.89 | 128,913,719.16 | 1.74 | 90.51 | New medium-to-long-term M&A loans and special borrowings | - Restricted assets at period-end totaled 238 million CNY, mainly including 16.5063 million CNY in frozen monetary funds and 219 million CNY in fixed assets pledged by subsidiary Wuhan Zhenghua for long-term borrowings[67] - The industry landscape is moving towards deep restructuring and reshuffling, with structural imbalances in supply and demand, and integrated development becoming a key pursuit, leading to diversified enterprise development positioning[69] - Engineering general contracting and whole-process engineering consulting models will become the main service models in the future, with data and technology serving as important entry points for business innovation and development[69] - The industry faces issues such as the gap between scaled expansion and high-quality growth, inadequate implementation of regulatory policies, insufficient integration of industry and technology, and an imbalance between talent supply and demand[70] Future Development Strategy and Risks The company's future development strategy is guided by "comprehensive marketization, cross-sector integration, high-tech specialization, and deep internationalization," focusing on urban modernization, urban renewal, national new area construction, and the "Belt and Road" initiative, with plans to deepen its "grand operation" mechanism to achieve over 10 billion CNY in new contract value, strengthen capital operations, and pursue incremental growth, while facing risks related to macroeconomics, policies, market operations, project management, human resources, accounts receivable management, and investment and M&A integration - The company's "13th Five-Year Plan" development strategy and future core development philosophy are to become an "integrated service provider offering high-quality comprehensive solutions for urban construction," with the basic principles of "comprehensive marketization, cross-sector integration, high-tech specialization, and deep internationalization"[83] - The company will continue to focus on urban modernization, urban renewal, and characteristic towns markets, concentrate on national new area construction such as "Xiong'an New Area" and "Guangdong-Hong Kong-Macao Greater Bay Area," and actively respond to the "Belt and Road" initiative to expand its international market presence[83] - The company plans to deepen the implementation of its "grand operation" mechanism, establish integrated coordination management, and strive to achieve the goal of "exceeding 10 billion CNY" in new contract value in 2019[85] - The company will deeply cultivate specialized fields, expand and optimize specialized businesses, and build specialized teams such as the Transportation Hub and Vertical City Design Institute, Medical and Elderly Care Institute, and Marine Institute[86] - It will continue to strengthen and expand the engineering general contracting business segment, improve profitability, and build professional service capabilities for whole-process engineering consulting[86][87] - The company will strengthen capital operations and management, promote incremental development, plan to increase capital in Shanghai Institute, Shenyuan Geotechnical, and Huajian International, and seek suitable domestic and international acquisition projects[87] - The company faces risks from macroeconomic downturns, policy changes (e.g., qualification relaxation, architect responsibility system), intensified market competition, increased project management complexity, loss of core talent, accounts receivable management, and investment and M&A integration[88][89][90] Significant Matters This chapter discloses Huajian Group's significant matters during the reporting period, including profit distribution plans, fulfillment of commitments, changes in accounting policies and estimates, appointment of accounting firms, major litigation and arbitration, equity incentive plans, related party transactions, and social responsibility performance Profit Distribution Plan The company proposes to distribute a cash dividend of CNY 1.8 (tax inclusive) per 10 shares to all shareholders based on the total share capital at the equity registration date for the 2018 profit distribution, and to convert capital reserves into 2 shares per 10 shares, with this plan subject to approval by the general meeting of shareholders - The company proposes to distribute a cash dividend of CNY 1.8 (tax inclusive) per 10 shares to all shareholders based on the total share capital at the equity registration date for the 2018 profit distribution, totaling approximately 80.1230 million CNY (tax inclusive)[93] - Concurrently, the company proposes to convert capital reserves into 2 shares per 10 shares for all shareholders, totaling approximately 89.0255 million shares[93] Ordinary Share Dividend Distribution Plans for the Past Three Years | Dividend Year | Cash Dividend per 10 Shares (CNY) (Tax Inclusive) | Capital Reserve to Share Capital Increase per 10 Shares (shares) | Cash Dividend Amount (CNY) (Tax Inclusive) | Ratio to Net Profit Attributable to Ordinary Shareholders of Listed Company in Consolidated Statements (%) | | :--- | :--- | :--- | :--- | :--- | | 2018 | 1.8 | 2 | 80,122,955.76 | 30.40 | | 2017 | 1.5 | 0 | 64,831,219.80 | 25.28 | | 2016 | - | - | - | - | - As of March 29, 2019, the company's total share capital increased from 432,208,132 shares to 445,127,532 shares, and the 2018 dividend distribution and capital increase plans will be implemented based on this new share capital[95] Fulfillment of Commitments Controlling shareholder Shanghai Modern Architectural Design (Group) Co., Ltd. strictly fulfilled its commitments regarding share lock-up, resolution of horizontal competition, resolution of related party transactions, and asset value guarantee for injected assets during the reporting period - Controlling shareholder Shanghai Modern Architectural Design (Group) Co., Ltd.'s shares in Huajian Group, obtained through a major asset restructuring, were restricted from listing or transfer for 36 months from the issuance completion date, and this commitment has been strictly fulfilled[97] - Modern Group committed to resolving horizontal competition, not directly or indirectly operating businesses that compete with Huajian Group, and plans to inject Shanghai Land Highway Engineering Consulting Design Co., Ltd. into Huajian Group when appropriate[97][99] - Modern Group committed to strictly controlling related party transactions, avoiding and reducing related party transactions with Huajian Group, and preventing illegal occupation of funds and assets[99] - Modern Group committed to compensating Huajian Group with shares or cash if the target assets experienced impairment, and this commitment has been strictly fulfilled[99] - Modern Group committed that the cumulative net profit (excluding non-recurring gains and losses) of Wuxi Municipal Design and Research Institute Co., Ltd.'s 28% equity asset for 2018-2020 would not be less than 24.4175 million CNY, and this commitment has been strictly fulfilled[100] Changes in Accounting Policies and Estimates The company adjusted its financial statement format in accordance with new Ministry of Finance regulations and changed the bad debt provision ratio for accounts receivable in its engineering contracting business, resulting in a 4.1291 million CNY decrease in bad debt provisions and a 0.9256 million CNY increase in income tax expense at period-end - In accordance with the Ministry of Finance's "Notice on Revising and Issuing the 2018 General Enterprise Financial Statement Format," the company adjusted its financial statement format, such as combining "Notes Receivable" and "Accounts Receivable"[102] - The company changed its accounting estimate for bad debt provisions for accounts receivable in its engineering contracting business, adjusting the provision ratios for various aging intervals[102][103] Changes in Bad Debt Provision Ratios for Engineering Contracting Accounts Receivable | Aging | Provision Ratio Before Change (%) | Provision Ratio After Change (%) | | :--- | :--- | :--- | | Within 6 months (inclusive) | 0.00 | 0.00 | | 6 months - 1 year (inclusive) | 10.00 | 3.00 | | 1-2 years (inclusive) | 20.00 | 10.00 | | 2-3 years (inclusive) | 40.00 | 40.00 | | 3-4 years (inclusive) | 70.00 | 60.00 | | 4-5 years (inclusive) | 70.00 | 80.00 | | Over 5 years | 100.00 | 100.00 | - The change in accounting estimate resulted in a 4.1291 million CNY decrease in "Accounts Receivable - Bad Debt Provision" and a 4.1291 million CNY decrease in "Asset Impairment Losses" for the current period; a corresponding 0.9256 million CNY decrease in deferred income tax assets and a 0.9256 million CNY increase in income tax expense[104] Appointment of Accounting Firm The company appointed Zhonghua Certified Public Accountants (Special General Partnership) as its audit firm for the 2018 financial report and internal control, with audit fees of 1.4 million CNY and 0.6 million CNY, respectively - The company appointed Zhonghua Certified Public Accountants (Special General Partnership) as its domestic accounting firm, with a fee of 1.4 million CNY and an audit tenure of 4 years[108] - The internal control audit firm is Zhonghua Certified Public Accountants (Special General Partnership), with a fee of 0.6 million CNY[108] Major Litigation and Arbitration Matters During the reporting period, the company had no major litigation or arbitration matters - The company had no major litigation or arbitration matters this year[108] Equity Incentive Plan The company disclosed its 2018 Restricted Stock Incentive Plan (Draft) on December 25, 2018, and completed the stock registration on March 29, 2019 - The company disclosed its 2018 Restricted Stock Incentive Plan (Draft) and other related content on December 25, 2018[111] - As of March 29, 2019, the company had completed the implementation of the aforementioned plan and disclosed temporary announcements[111] Major Related Party Transactions During the reporting period, the company engaged in daily operational related party transactions, primarily involving the acceptance of property services and provision of labor, and its wholly-owned subsidiary, East China Architectural Design and Research Institute Co., Ltd., acquired 28% equity in Wuxi Municipal Design and Research Institute Co., Ltd. from controlling shareholder Shanghai Modern Architectural Design (Group) Co., Ltd. in cash - The company's estimated daily related party transaction amount for 2018 was approximately 176 million CNY[112] - The company's wholly-owned subsidiary, East China Architectural Design and Research Institute Co., Ltd., acquired 28% equity in Wuxi Municipal Design and Research Institute Co., Ltd. from controlling shareholder Shanghai Modern Architectural Design (Group) Co., Ltd. in cash[113] Related Party Receivables and Payables | Related Party | Related Relationship | Beginning Balance (CNY) | Amount Incurred (CNY) | Ending Balance (CNY) | | :--- | :--- | :--- | :--- | :--- | | Shanghai Modern Architectural Design (Group) Co., Ltd. | Parent Company | 34,292,179.82 | -30,000.00 | 34,262,179.82 | Major Contracts and Guarantees The company has leasing arrangements, acting as a lessee for office buildings, and provides guarantees for its subsidiaries, with the total guarantee amount representing 5.86% of the company's net assets Company as Lessor Leasing Information | Lessor Name | Lessee Name | Leased Asset Description | Lease Income (CNY) | Related Party Transaction | | :--- | :--- | :--- | :--- | :--- | | Modern Real Estate Company | Company's Subsidiaries | Office Building | Not Applicable | Yes | | The Company | Modern Design Group | Office Building | 1,310,912.35 | Yes | | The Company | Modern Property Company | Office Building | 545,975.49 | Yes | Company and its Subsidiaries' Guarantees for Subsidiaries | Indicator | Amount (CNY) | | :--- | :--- | | Total Guarantees for Subsidiaries Incurred During Reporting Period | 198,499,409.59 | | Total Guarantees for Subsidiaries Outstanding at Period-End (B) | 158,015,838.42 | | Total Guarantees (A+B) | 158,015,838.42 | | Total Guarantees as % of Company's Net Assets | 5.86 | | Debt Guarantees Provided Directly or Indirectly for Guaranteed Parties with Debt-to-Asset Ratio Exceeding 70% (D) | 123,699,838.42 | | Total of the Above Three Guarantee Amounts (C+D+E) | 123,699,838.42 | - Total guarantees for subsidiaries incurred during the reporting period amounted to 198 million CNY, including 164 million CNY in bank guarantees issued by East China Design Institute for wholly-owned or controlled subsidiaries, and 5 million USD in letter of credit guarantees for subsidiary Wilson[118] Social Responsibility Performance The company actively fulfills its social responsibilities, engaging in poverty alleviation efforts, investing 58,800 CNY in funds and 200,000 CNY in in-kind donations in 2018, supporting 17 impoverished students, and improving educational resources in impoverished areas - The company actively fulfills its social responsibilities, with details on poverty alleviation work available in the company's 2018 Social Responsibility Report published on the Shanghai Stock Exchange website on April 30, 2019[121][124] 2018 Targeted Poverty Alleviation Achievements | Indicator | Quantity and Implementation (ten thousand CNY) | | :--- | :--- | | Overall Situation - Funds | 5.88 | | Overall Situation - In-kind Donations | 20 | | Overall Situation - Number of Registered Impoverished People Helped to Escape Poverty (persons) | 0 | | Education Poverty Alleviation - Amount Invested in Supporting Impoverished Students | 1.38 | | Education Poverty Alleviation - Number of Impoverished Students Supported (persons) | 17 | | Education Poverty Alleviation - Amount Invested in Improving Educational Resources in Impoverished Areas | 20 | | Basic Social Security - Amount Invested in Helping Impoverished Disabled People | 0.5 | | Basic Social Security - Number of Impoverished Disabled People Helped (persons) | 1 | | Social Poverty Alleviation - Amount Invested in Designated Poverty Alleviation Work | 4 | Changes in Ordinary Shares and Shareholder Information This chapter details Huajian Group's ordinary share capital changes, restricted share movements, securities issuance and listing, as well as the total number of shareholders, top ten shareholders, and ultimate controlling party during the reporting period Ordinary Share Capital Changes During the reporting period, there were no changes in the company's total ordinary share capital or capital structure, with the period-end total restricted shares amounting to 59,334,425 shares, primarily held by the controlling shareholder, Shanghai Modern Architectural Design (Group) Co., Ltd., due to shares issued for asset acquisition - During the reporting period, there were no changes in the company's total ordinary share capital or capital structure[127] Changes in Restricted Shares | Shareholder Name | Restricted Shares at Year-Beginning (shares) | Shares Released from Restriction This Year (shares) | Shares Added to Restriction This Year (shares) | Restricted Shares at Year-End (shares) | Reason for Restriction | Date of Release from Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shanghai Modern Architectural Design (Group) Co., Ltd. | 11,060,377 | 11,060,377 | 0 | 0 | Not to be listed or transferred within 36 months from the completion of asset acquisition by share issuance | 2018.9.10 | | Shanghai Modern Architectural Design (Group) Co., Ltd. | 59,334,425 | 0 | 0 | 59,334,425 | Not to be listed or transferred within 36 months from the completion of asset acquisition by share issuance | 2020.3.3 | | Everbright Pramerica Fund - Bank of Ningbo - Jizhou Asset Management (Shanghai) Co., Ltd. | 4,933,399 | 4,933,399 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | Caitong Fund - Industrial and Commercial Bank of China - Shaanxi International Trust - Shanguotou · Wenjian No. 5 Targeted Investment Collective Fund Trust Plan | 1,933,892 | 1,933,892 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | Shanghai Electric Power Science and Technology Chengding Smart Industry Investment Partnership (Limited Partnership) | 1,480,019 | 1,480,019 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | Shanghai Shibei Hi-Tech Co., Ltd. | 1,381,351 | 1,381,351 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | Tibet Honghan Equity Investment Management Co., Ltd. | 1,381,351 | 1,381,351 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | North Trust Ruifeng Fund - China Merchants Bank - China Foreign Economic and Trade Trust Co., Ltd. - Foreign Trade Trust - Zhiyuan Huiying Phase 1 Private Securities Investment Fund | 1,381,351 | 1,381,351 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | Caitong Fund - Industrial and Commercial Bank of China - Shenzhen Pusu Capital Management Co., Ltd. | 986,680 | 986,680 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | Caitong Fund - China Merchants Bank - Hunan Tianrui Fengnian Equity Investment Co., Ltd. | 246,670 | 246,670 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | Citic-Prudential Fund Management Co., Ltd. | 88,804 | 88,804 | 0 | 0 | Not to be listed or transferred within 12 months from the completion of non-public offering | 2018.3.19 | | Total | 84,208,319 | 24,873,894 | 0 | 59,334,425 | / | / | Shareholders and Ultimate Controlling Party As of the end of the reporting period, the company had 16,919 ordinary shareholders, with Shanghai Modern Architectural Design (Group) Co., Ltd. as the controlling shareholder, holding 56.10% of the shares, and the ultimate controlling party being the Shanghai State-owned Assets Supervision and Administration Commission - As of the end of the reporting period, the total number of ordinary shareholders was 16,919[132] Top Ten Shareholders' Shareholding | Shareholder Name (Full Name) | Shares Held at Period-End (shares) | Percentage (%) | Number of Restricted Shares Held (shares) | Share Status | Shareholder Nature | | :--- | :--- | :--- | :--- | :--- | :--- | | Shanghai Modern Architectural Design (Group) Co., Ltd. | 242,455,352 | 56.10 | 59,334,425 | None | State-owned Legal Person | | Shanghai Guosheng (Group) Co., Ltd. | 66,083,468 | 15.29 | - | Unknown | State-owned Legal Person | | Everbright Pramerica Fund - Bank of Ningbo - Jizhou Asset Management (Shanghai) Co., Ltd. | 4,933,399 | 1.14 | - | Unknown | Other | | China Galaxy Securities Co., Ltd. Agreed Repurchase Securities Trading Special Securities Account | 4,280,000 | 0.99 | - | Unknown | Other | | Caitong Fund - Industrial and Commercial Bank of China - Shaanxi International Trust - Shanguotou · Wenjian No. 5 Targeted Investment Collective Fund Trust Plan | 1,933,892 | 0.45 | - | Unknown | Other | | Industrial and Commercial Bank of China Co., Ltd. - CSI Shanghai State-owned Enterprise ETF | 1,922,123 | 0.44 | - | Unknown | Other | | Shanghai Electric Power Science and Technology Chengding Smart Industry Investment Partnership (Limited Partnership) | 1,480,019 | 0.34 | - | Unknown | Other | | Shanghai Shibei Hi-Tech Co., Ltd. | 1,381,351 | 0.32 | - | Unknown | Other | | Yang Qiming | 1,262,500 | 0.29 | - | Unknown | Domestic Natural Person | | Wang Yueying | 1,185,500 | 0.27 | - | Unknown | Domestic Natural Person | - The company's controlling shareholder is Shanghai Modern Architectural Design (Group) Co., Ltd., and the ultimate controlling party is the Shanghai State-owned Assets Supervision and Administration Commission[138][141][579] Other Legal Persons Holding More Than Ten Percent of Shares | Legal Person Shareholder Name | Person in Charge or Legal Representative | Date of Establishment | Registered Capital (ten thousand CNY) | Main Business Operations or Management Activities | | :--- | :--- | :--- | :--- | :--- | | Shanghai Guosheng (Group) Co., Ltd. | Shou Weiguang | September 26, 2007 | 2,006,600.00 | Engages in investment primarily non-financial, supplemented by financial activities, capital operations and asset management, industry research, socio-economic consulting, etc. | Preferred Shares Information During the reporting period, Huajian Group had no preferred shares - The company has no preferred shares[145] Directors, Supervisors, Senior Management, and Employees This chapter details the shareholding changes, remuneration, and appointments of Huajian Group's directors, supervisors, and senior management, as well as the professional composition, educational background, compensation policies, and training plans for the company's employees D&O Shareholding and Remuneration During the reporting period, the company's chairman changed from Qin Yun to Qin Baohua, Sun Rongqian and Ma Dong resigned as supervisors, and Zhou Qing was appointed as a new supervisor, with several directors and senior management increasing their shareholdings through secondary market transactions, and the total pre-tax remuneration for D&Os increasing significantly from the previous year to 17.0986 million CNY, primarily due to the implementation of professional manager assessment and compensation management methods and the distribution of tenure incentives - During the reporting period, the company's chairman changed from Qin Yun to Qin Baohua, Sun Rongqian and Ma Dong resigned as supervisors, and Zhou Qing was appointed as a new supervisor[155] - Several directors and senior management increased their shareholdings through secondary market transactions during the reporting period, such as Zhang Hua increasing by 102,600 shares, Shen Di by 28,100 shares, and Long Ge by 55,000 shares[147] - Total pre-tax remuneration received from the company during the reporting period was 17.0986 million CNY, a significant increase from 2017, primarily due to the implementation of professional manager assessment and compensation management methods and incentive fund plans, as well as the distribution of 60% of the 2015-2017 tenure incentives in 2018[147][148] D&O Appointments The company's directors, supervisors, and senior management hold positions in shareholder entities and other organizations, such as Qin Baohua serving as Chairman of Shanghai Modern Architectural Design (Group) Co., Ltd., Li An as Director and Vice President of Shanghai Guosheng (Group) Co., Ltd., and Zhuo Fumin as Chairman/Managing Partner of Source Code Capital - Qin Baohua serves as Chairman of Shanghai Modern Architectural Design (Group) Co., Ltd., Zhang Hua serves as Director of Shanghai Modern Architectural Design (Group) Co., Ltd., and Li An serves as Director and Vice President of Shanghai Guosheng (Group) Co., Ltd[150] - Independent Director Zhuo Fumin serves as Chairman/Managing Partner of Source Code Capital, Zhu Jiandi serves as Chief Partner, Chairman, and Chief Accountant of Lixin Certified Public Accountants (Special General Partnership), and Sheng Leiming serves as Chairman of the Partners' Meeting and Lawyer at Guantao Zhongmao Law Firm[151][152] Employee Information and Training The company has a total of 7,171 employees, with technical personnel accounting for the largest proportion, and the vast majority holding bachelor's degrees or higher, while it has established a fair, efficiency-oriented incentive-based compensation distribution mechanism and places high importance on talent development and training, conducting programs for leadership capability enhancement, core talent team building, and job skill training Employee Professional Composition | Professional Category | Number of Employees (persons) | | :--- | :--- | | Production Personnel | - | | Sales Personnel | 115 | | Technical Personnel | 6,315 | | Financial Personnel | 101 | | Administrative Personnel | 640 | | Total | 7,171 | Employee Education Level | Education Level Category | Number (persons) | | :--- | :--- | | Bachelor's Degree (inclusive) and Above | 6,241 | | Below Bachelor's Degree | 930 | | Total | 7,171 | - The company has 1,634 individuals with various professional registration qualifications and 1,412 individuals with senior professional titles[158] - The company has established a competitive incentive-based compensation distribution mechanism that is fair, efficiency-oriented, position-centric, and performance-based, implementing artificial cost and total wage budget control and management[159] - The company places high importance on talent development and training, and in 2018, it conducted programs for leadership capability enhancement, core talent team building, and employee job skill and competency training, while also exploring plans for establishing the Huajian Academy, in line with the group's strategy[161][162] Corporate Governance This chapter outlines Huajian Group's corporate governance practices, covering shareholders and general meetings, controlling shareholders and listed companies, directors and the board of directors, supervisors and the supervisory board, performance evaluation and incentive/restraint mechanisms, information disclosure and transparency, insider registration management, senior management, and investor relations, demonstrating a sound and well-operated corporate governance structure Corporate Governance Overview The company strictly convenes and holds general meetings in accordance with regulations, ensuring equal rights for all shareholders, while the controlling shareholder acts in a standardized manner, without directly or indirectly interfering with company decisions and operations, and the board of directors, composed of seven directors including three independent directors and one employee director, operates in compliance with procedures, with independent directors diligently performing their duties, and the supervisory board conscientiously overseeing board operations and financial conditions; the company has refined its performance evaluation standards and incentive/restraint mechanisms for senior management, drafting the 2018 Restricted Stock Incentive Plan, and strictly adheres to information disclosure regulations, ensuring true, accurate, timely, and complete information, while strengthening insider information management - The company strictly convenes and holds general meetings in accordance with the "Articles of Association," "Rules of Procedure for General Meetings," and relevant laws and regulations, ensuring all shareholders' right to know, participate, and vote on major company matters[165] - The company's controlling shareholder, Shanghai Modern Architectural Design (Group) Co., Ltd., acts in a standardized manner, without directly or indirectly interfering with the company's decision-making and operational activities beyond the general meeting[165] - The company's board of directors consists of seven directors, including one chairman, three independent directors, and one employee director, with the selection of directors and the composition of the board meeting legal, regulatory, and "Articles of Association" requirements[165] - The company's board of directors has five specialized committees: Strategy and Investment Committee, Audit and Risk Control Committee, Remuneration and Assessment Committee, Nomination Committee, and Budget Management Committee, which are clearly divided, with distinct responsibilities, and operate effectively[166] - The supervisory board conscientiously fulfills its duties in accordance with relevant laws and regulations, overseeing the daily operations of the board of directors, the company's financial condition, operating performance, related party transactions, and the legality and compliance of director and senior management selection and performance[167] - The company continuously improved its performance evaluation standards and incentive and restraint mechanisms for senior management, drafting the "East China Architectural Design Group Co., Ltd. 2018 Restricted Stock Incentive Plan (Draft)" and its summary[167] - The company strictly adheres to the "Information Disclosure Management System" and other relevant regulations, ensuring true, accurate, timely, and complete information disclosure, completing the disclosure of 60 temporary announcements during the reporting period[168] - The company strictly regulates the confidentiality management of inside information, the registration management of insiders before the legal public disclosure of inside information, and the reporting of major event progress memorandums[168] General Meeting of Shareholders During the reporting period, the company held 3 general meetings of shareholders, and all resolutions were disclosed on the Shanghai Stock Exchange website - During the reporting period, the company held 3 general meetings of shareholders, including the 2017 Annual General Meeting, the 2018 First Extraordinary General Meeting, and the 2018 Second Extraordinary General Meeting[170] - All resolutions of the general meetings of shareholders have been published on the Shanghai Stock Exchange website[170] Director Performance The company's Board of Directors held 11 meetings, including 3 on-site meetings, 7 teleconference meetings, and 1 hybrid meeting, with all directors diligently attending the meetings Directors' Attendance at Board and Shareholder Meetings | Director Name | Independent Director | Number of Board Meetings to Attend This Year | Number of Personal Attendances | Number of Attendances by Teleconference | Number of Attendances by Proxy | Number of Absences | Absent Twice Consecutively | Number of Shareholder Meeting Attendances | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Qin Baohua | No | 4 | 4 | 2 | 0 | 0 | No | 2 | | Zhang Hua | No | 11 | 11 | 7 | 0 | 0 | No | 3 | | Li An | No | 11 | 9 | 7 | 2 | 0 | No | 0 | | Zhuo Fumin | Yes | 11 | 11 | 7 | 0 | 0 | No | 0 | | Zhu Jiandi | Yes | 11 | 11 | 7 | 0 | 0 | No | 2 | | Sheng Leiming | Yes | 11 | 11 | 8 | 0 | 0 | No | 2 | | Wang Ling | No | 11 | 11 | 7 | 0 | 0 | No | 2 | | Qin Yun | No | 7 | 7 | 5 | 0 | 0 | No | 1 | - During the year, 11 board meetings were held, including 3 on-site meetings, 7 teleconference meetings, and 1 hybrid meeting[171] Performance of Special Committees During the reporting period, the company's Board of Directors' specialized committees, including the Strategy and Investment Committee, Audit and Risk Control Committee, Remuneration and Assessment Committee, Nomination Committee, and Budget Management Committee, all operated effectively, providing important advisory opinions and suggestions for the company's decision-making - During the reporting period, the company held 4 meetings of the Strategy and Investment Committee, 5 meetings of the Audit and Risk Control Committee, 2 meetings of the Remuneration and Assessment Committee, 1 meeting of the Nomination Committee, and 1 meeting of the Budget Management Committee[173] - Each specialized committee provided important advisory opinions and suggestions on the feasibility assessment of proposed investment projects, audit of periodic reports, implementation of internal control standards, selection of audit firms, appointment of senior management, remuneration of directors, supervisors, and senior management, and the company's sustainable development[173] Senior Management Evaluation and Incentive Mechanism The company's Board of Directors approved resolutions on the "Huajian Group Manager 2015-2017 Tenure and 2017 Annual Performance Assessment Report and 2017 Annual Performance Salary Distribution Plan," the "Huajian Group Incentive Fund Plan 2017 Implementation Plan," and the "Huajian Group Operating Level Leadership Personnel 2015-2016 Tenure Incentive Distribution Plan," continuously improving the performance evaluation standards and incentive and restraint mechanisms for senior management - The company's Board of Directors approved the "Resolution on the Huajian Group Manager 2015-2017 Tenure and 2017 Annual Performance Assessment Report and 2017 Annual Performance Salary Distribution Plan" and the "Resolution on the Huajian Group Incentive Fund Plan 2017 Implementation Plan"[174] - The company's Board of Directors approved the "Resolution on the Huajian Group Operating Level Leadership Personnel 2015-2016 Tenure Incentive Distribution Plan"[174] Internal Control Report The company has disclosed its 2018 Internal Control Evaluation Report, and Zhonghua Certified Public Accountants issued a standard unqualified audit report on internal control - The company evaluated the effectiveness of its internal controls as of December 31, 2018, and formed the "East China Architectural Design Group Co., Ltd. 2018 Internal Control Evaluation Report"[175] - Zhonghua Certified Public Accountants (Special General Partnership) audited the effectiveness of the company's internal controls over financial reporting as of December 31, 2018, and issued a standard unqualified "East China Architectural Design Group Co., Ltd. 2018 Internal Control Audit Report"[175] Corporate Bonds Information During the reporting period, Huajian Group had no corporate bonds - The company has no corporate bonds[654] Financial Report This chapter includes Huajian Group's 2018 audit report, consolidated and parent company financial statements (balance sheet, income statement, cash flow statement, statement of changes in owners' equity), and detailed notes to the financial statements, covering the company's basic information, scope of consolidation, significant accounting policies and estimates, taxation, notes to consolidated financial statement items, changes in the scope of consolidation, interests in other entities, risks related to financial instruments, fair value disclosures, related parties and related party transactions, commitments and contingencies, post-balance sheet events, other significant matters, and notes to parent company financial statement key items Audit Report Zhonghua Certified Public Accountants (Special General Partnership) issued a standard unqualified audit report on Huajian Group's 2018 financial statements, with key audit matters including operating revenue recognized using the percentage-of-completion method, bad debt provisions for accounts receivable, and goodwill impairment testing - Zhonghua Certified Public Accountants (Special General Partnership) issued a standard unqualified audit report for Huajian Group[178] - Key audit matters include operating revenue recognized using the percentage-of-completion method, due to significant management estimates and judgments involved[182] - Key audit matters include bad debt provisions for accounts receivable, due to significant management estimates and judgments regarding recoverability and provision ratios[185][186] - Key audit matters include goodwill impairment testing, due to the complexity of the testing process and significant management estimates and judgments in determining key parameters in the net present value of cash flows valuation model[189] Financial Statements This chapter provides Huajian Group's 2018 consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, comprehensively presenting the company's financial position, operating results, and cash flow situation 2018 Consolidated Balance Sheet Key Data | Item | Period-End Balance (CNY) | Period-Beginning Balance (CNY) | | :--- | :--- | :--- | | Total Current Assets | 6,086,890,667.35 | 5,269,642,505.44 | | Total Non-Current Assets | 2,397,958,999.46 | 2,133,879,405.71 | | Total Assets | 8,484,849,666.81 | 7,403,521,911.15 | | Total Current Liabilities | 5,319,533,156.89 | 4,575,659,314.56 | | Total Non-Current Liabilities | 291,713,762.67 | 176,473,435.58 | | Total Liabilities | 5,611,246,919.56 | 4,752,132,750.14 | | Total Owners' Equity Attributable to Parent Company | 2,697,690,239.18 | 2,482,114,202.98 | | Minority Interests | 175,912,508.07 | 169,274,958.03 | | Total Owners' Equity (or Shareholders' Equity) | 2,873,602,747.25 | 2,651,389,161.01 | 2018 Consolidated Income Statement Key Data | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | I. Total Operating Revenue | 5,958,919,916.66 | 5,289,745,002.50 | | II. Total Operating Costs | 5,718,340,335.04 | 5,006,182,467.70 | | III. Operating Profit (Loss indicated by "-") | 319,366,188.09 | 315,451,843.27 | | IV. Total Profit (Total Loss indicated by "-") | 374,239,501.33 | 364,039,951.57 | | V. Net Profit (Net Loss indicated by "-") | 306,454,144.26 | 294,190,138.99 | | Net Profit Attributable to Parent Company Shareholders | 263,540,732.70 | 256,411,168.89 | | VI. Net Other Comprehensive Income After Tax | 16,866,523.30 | -21,472,628.05 | | VII. Total Comprehensive Income | 323,320,667.56 | 272,717,510.94 | | VIII. Earnings Per Share: (I) Basic Earnings Per Share (CNY/share) | 0.6098 | 0.6195 | 2018 Consolidated Cash Flow Statement Key Data | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | I. Net Cash Flow from Operating Activities | 338,073,328.56 | 407,213,953.73 | | II. Net Cash Flow from Investing Activities | -333,075,064.52 | -439,519,037.81 | | III. Net Cash Flow from Financing Activities | 53,146,347.23 | 469,695,745.63 | | V. Net Increase in Cash and Cash Equivalents | 49,911,895.24 | 437,885,410.69 | Company Basic Information Huajian Group, formerly Shanghai Lengguang Industrial Co., Ltd., was renamed East China Architectural Design Group Co., Ltd. in 2015 after multiple capital changes and major asset restructurings, with a registered capital of 432 million CNY and a business scope covering construction engineering design, survey, supervision, cost consulting, and information technology R&D, and its consolidated financial statements are prepared under the reverse acquisition principle, with East China Design Institute as the accounting parent company - Huajian Group, originally named Shanghai Lengguang Industrial Co., Ltd., was listed on the Shanghai Stock Exchange on February 9, 1993[225] - After multiple capital changes, the company's registered capital was 432,208,132 CNY as of the end of the reporting period[225][226][227][228][232][233][234] - In 2015, the company completed a major asset swap and share issuance for asset acquisition, with 100% equity of East China Design Institute being injected into the company, and the company's controlling shareholder changed to Modern Group[230] - These consolidated financial statements are prepared under the principle of reverse acquisition, with East China Design Institute as the accounting parent company and the company as the subsidiary in the consolidated financial statements[244][248] - East China Design Institute holds multiple Grade A qualifications in municipal engineering, architecture, landscape architecture engineering design, general contracting for housing construction projects, and urban and rural planning preparation[241] Significant Accounting Policies and Estimates This chapter details the company's accounting policies and estimates for financial statement preparation, including enterprise accounting standards, accounting period, operating cycle, functional currency, accounting treatment for business combinations, consolidated financial statement preparation methods, classification of joint arrangements, criteria for cash and cash equivalents, foreign currency transactions and translation of foreign currency financial statements, financial instruments, receivables, inventories, long-term equity investments, investment properties, fixed assets, construction in progress, borrowing costs, intangible assets, impairment of long-term assets, long-term deferred expenses, employee benefits, provisions, revenue, government grants, deferred income tax assets/liabilities, leases, and goodwill, also disclosing changes in accounting policies and esti