2019-10-29 16:00Important Notice This section confirms the authenticity and integrity of the quarterly report and its financial statements Report Authenticity Guarantee The company's management confirms the truthfulness, accuracy, and completeness of the quarterly report and its financial statements - Management confirmed the truthfulness, accuracy, and completeness of the Q3 2019 report4 - This quarterly report is unaudited5 Company Overview This section provides key financial performance indicators and details of major shareholders as of the reporting period Key Financial Data As of Q3 2019, total assets decreased slightly, while operating revenue saw marginal growth and net profit attributable to shareholders increased Key Financial Data for Q1-Q3 2019 | Indicator | Q1-Q3 2019 | Q1-Q3 2018 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 55,854,565,973.46 Yuan | 55,743,017,047.66 Yuan | 0.20% | | Net Profit Attributable to Shareholders | 2,117,314,530.86 Yuan | 1,937,997,873.37 Yuan | 9.25% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 1,851,125,301.39 Yuan | 1,568,902,246.70 Yuan | 17.99% | | Net Cash Flow from Operating Activities | -170,771,090.96 Yuan | -156,228,879.98 Yuan | Not Applicable | | Basic Earnings Per Share (Yuan/share) | 0.2920 | 0.3204 | -8.86% | | Weighted Average Return on Net Assets (%) | 7.90% | 8.81% | Decrease of 0.91 percentage points | Non-recurring Gains and Losses (Year-to-Date) | Item | Amount (Yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | 139,217,269.44 | | Government Subsidies Included in Current Profit/Loss | 111,854,469.76 | | Other Non-operating Income and Expenses | 30,124,423.25 | | Total | 266,189,229.47 | Shareholder Information The company has 85,065 shareholders, with China Merchants Group Logistics and HKSCC NOMINEES LIMITED as major holders Top Ten Shareholders' Holdings | Shareholder Name | Number of Shares Held | Proportion (%) | | :--- | :--- | :--- | | China Merchants Group Logistics Co., Ltd. | 2,461,596,200 | 33.26 | | HKSCC NOMINEES LIMITED | 2,107,465,449 | 28.48 | | China Merchants Group Co., Ltd. | 1,600,597,439 | 21.63 | | Central Huijin Asset Management Co., Ltd. | 51,346,878 | 0.69 | - China Merchants Group Logistics Co., Ltd. is a wholly-owned subsidiary of China Merchants Group Co., Ltd., forming a concerted action relationship11 Significant Events This section details major changes in financial statements, progress on key corporate actions, government subsidies received, and operational statistics across business segments Analysis of Significant Changes in Financial Statements and Indicators Significant changes include a decrease in monetary funds due to debt repayment, a surge in R&D expenses, and a sharp decline in financing cash inflows Major Changes in Consolidated Balance Sheet | Item | Change Rate (%) | Primary Reason | | :--- | :--- | :--- | | Monetary Funds | -37.17 | Repayment of borrowings and advances | | Short-term Borrowings | -100.00 | Repayment of all short-term borrowings | | Other Payables | -54.15 | Repayment of advances and non-affiliated party fund transfers | | Capital Reserve | 47.92 | Capital premium formed from issuing shares to acquire minority interests in Sinotrans Air Transportation Development | | Minority Interests | -69.13 | Issuance of shares to acquire minority interests in Sinotrans Air Transportation Development | Major Changes in Consolidated Income Statement (Jan-Sep) | Item | Change Rate (%) | Primary Reason | | :--- | :--- | :--- | | Research and Development Expenses | 415,725% | Increased investment in information technology construction | | Other Income | 172.49% | Significant year-on-year increase in government subsidies due to increased China-Europe freight train operations | | Gains/Losses from Changes in Fair Value | -100.00% | Primarily from disposed Meileng shares in the prior year, no such item this year | | Income Tax Expense | -33.72% | Significant decrease in fair value change gains due to Meileng share disposal, leading to reduced income tax | Major Changes in Consolidated Cash Flow Statement (Jan-Sep) | Item | Change Rate (%) | Primary Reason | | :--- | :--- | :--- | | Total Cash Outflow from Investing Activities | -50.26% | Decrease in term deposits during the period | | Total Cash Inflow from Financing Activities | -93.41% | Significant decrease in borrowing scale compared to the prior year | Progress of Significant Events The company completed the share-for-share merger of Sinotrans Air Transportation Development and is processing subsequent legal procedures - The company completed the share-for-share merger and absorption of its subsidiary Sinotrans Air Transportation Development, listing A-shares on the Shanghai Stock Exchange on January 18, 201917 Government Subsidies In Q3 2019, the company received 431 million yuan in income-related government subsidies, largely from China-Europe freight train operations Major Government Subsidy Projects in Q3 2019 (Exceeding 5 Million Yuan) | Subsidy Project | Subsidy Amount (RMB: 10,000 Yuan) | | :--- | :--- | | Xiang-Europe Freight Train Financial Subsidy | 24,577.35 | | China-Europe Freight Train Russia-Xi'an Route | 8,959.67 | | International Railway Container Train Subsidy (Dongguan) | 4,499.95 | | Shenyang China-Europe Freight Train Operation Platform Project | 3,304.35 | | Total | 41,341.32 | Operational Statistics by Business Segment Q1-Q3 2019 saw mixed performance, with sea freight growing, air and project logistics declining, and express delivery showing strong growth Year-on-Year Changes in Operational Data by Business Segment for Q1-Q3 2019 | Business Segment | Sub-segment | Unit | Jan-Sep 2019 | Jan-Sep 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Freight Forwarding | Sea Freight Forwarding | 10,000 TEUs | 952.0 | 937.2 | +1.6% | | | Air Freight Forwarding | Million kg | 340.3 | 388.0 | -12.3% | | Professional Logistics | Project Logistics | Million tons | 4.7 | 8.4 | -44.0% | | Other Services | Express Delivery Services | 10,000 pieces | 9,629.3 | 6,507.9 | +48.0% | Appendix This section includes the unaudited financial statements, details on the adoption of new accounting standards, and the audit status of the report Financial Statements This section presents the company's unaudited consolidated and parent company financial statements as of September 30, 2019 Consolidated Balance Sheet As of September 30, 2019, total assets were 60.15 billion yuan, with an asset-liability ratio of 51.5% Key Items from Consolidated Balance Sheet (September 30, 2019) | Item | Amount (Yuan) | | :--- | :--- | | Total Assets | 60,145,601,423.62 | | Total Liabilities | 30,977,549,521.39 | | Total Equity Attributable to Parent Company Owners | 27,742,697,946.82 | | Minority Interests | 1,425,353,955.41 | Consolidated Income Statement For Q1-Q3 2019, total operating revenue was 55.86 billion yuan, with net profit attributable to parent company shareholders at 2.12 billion yuan Key Items from Consolidated Income Statement (Q1-Q3 2019) | Item | Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 55,854,565,973.46 | | Operating Profit | 2,589,622,582.95 | | Total Profit | 2,619,747,006.20 | | Net Profit | 2,215,314,409.49 | | Net Profit Attributable to Parent Company Shareholders | 2,117,314,530.86 | Consolidated Cash Flow Statement For Q1-Q3 2019, operating cash flow was negative, while financing activities resulted in a significant net outflow Consolidated Cash Flow Statement Summary (Q1-Q3 2019) | Item | Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | -170,771,090.96 | | Net Cash Flow from Investing Activities | 601,366,539.56 | | Net Cash Flow from Financing Activities | -6,110,769,044.44 | | Net Increase/Decrease in Cash and Cash Equivalents | -5,647,611,541.38 | Adjustments for First-Time Adoption of New Accounting Standards The company adopted new leasing standards from January 1, 2019, impacting opening balance sheet items like right-of-use assets and lease liabilities - The company adopted new leasing standards from January 1, 2019, and adjusted relevant items in the opening financial statements4245 Major Impact of New Leasing Standards on Opening Consolidated Financial Statements | Adjustment Item | Adjustment Amount (Yuan) | | :--- | :--- | | Right-of-Use Assets | +1,978,154,247.26 | | Lease Liabilities (Non-current) | +1,574,632,544.99 | | Non-current Liabilities Due Within One Year | +387,602,306.48 | | Long-term Deferred Expenses | -104,226,489.17 | | Retained Earnings | -67,948,139.86 | Audit Report This quarterly report has not been audited - The report explicitly states that this quarterly financial report is unaudited (applicable option is "Not Applicable")45