2019Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd. Stock Code: 000869， 200869 Stock Abbreviation: Changyu A， Changyu B Announcement No.: 2020-Final01 Yantai Changyu Pioneer Wine Co. Ltd. 2019 Annual Report Abstract 1. Important Notice This Annual Report abstract comes from the whole contents of annual report. If investors desire to comprehensively understand the Company’s operating results, financial situation and future development plan, please read the Annual Report on the media specified by the China Securities Regulatory Commission. No directors, supervisors or senior executives issue a statement of objection to 2019 Annual Report. Except following directors, all other directors have personally attended the meeting for deliberating the annual report. Director name with Director post with Reason for non-present Name of mandatory non-present in person non-present in person in person Augusto Reina Director Die of illness -- AldinoMarzorati Director Trip blocked due to Zhou Hongjiang COVID-19 epidemic Enrico Sivieri Director Trip blocked due to Zhou Hongjiang COVID-19 epidemic Non-standard audit opinion notice □Available Not available The preliminary scheme of the report period’s ordinary share profit distribution or increasing equity with reserve deliberated by the board of the directors Available □Not available Whether to increase equity with reserve □Yes No The Company’s preliminary scheme of profit distribution deliberated and passed by the board of directors this time is shown as following: Based on the Company’s total 685,464,000 shares, we plan to pay CNY7(including tax) in cash as dividends for every 10 shares to all shareholders and send 0 bonus share (including tax). Capital reserve will not be transferred to equity. The draft plan of preferred share profit distribution during the report period deliberated and passed by the board of directors □Available Not available 1 2019Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd. 2. Basic information of the Company (1) Brief introduction of the Company Changyu A, 000869, Abbreviation of Shares: Code number of the Shares Changyu B 200869 Place of listing of Shares Shenzhen Stock Exchange Secretary to the Board of Authorized Representative of Contact person and information Directors the Securities Affairs Name Mr. Jiang Jianxun Mr. Li Tingguo 56 Dama Road, Yantai, 56 Dama Road, Yantai, Address Shandong, China Shandong, China Fax 0086-535-6602761 0086-535-6633639 Tel 0086-535-6633639 0086-535-6633656 E-mail [email protected] [email protected] (2) Main businesses during the report period or brief introduction of products During the report period, the Company’s main businesses are production and operation of wine and brandy, thus providing domestic and foreign consumers with healthy and fashionable alcoholic drinks. Compared with earlier stage, there are no significant changes happened to the Company’s main businesses. The wine industry that the Company involved in is still in growth stage. Although being affected by many factors for the short-term, the competition in the market is fierce and the wine consumption temporarily declines. However, seen from the long term, the whole domestic wine market is on the rising trend. The Company is at the forefront in the domestic wine market. (3) Key accounting data and financial indicators ①Key accounting data and financial indicators in recent three years Whether the Company makes retroactive adjustments or restates the accounting data of previous fiscal years □Yes No Unit: CNY More or less than Item 2019 2018 2017 Last year (%) Operation revenue 5,031,011,489 5,142,244,740 -2.16% 4,932,545,229 Net profit attributed to the shareholders of 1,129,735,749 1,042,632,929 8.35% 1,031,695,056 the listed company Net profit attributed to the shareholders of 892,075,931 965,426,238 -7.60% 986,095,872 the listed company 2 2019Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd. after deducting the irregular profit and loss Net cash flows from the operating 837,838,024 975,978,746 -14.15% 973,243,027 activities Basic earnings per 1.65 1.52 8.55% 1.51 share (CNY/share) Diluted earnings per 1.65 1.52 8.55% 1.51 share (CNY/share) Weighted average for earning rate of the 11.30% 11.23% 0.07% 12.14% net assets More or less than Dec. 31st 2019 Dec. 31st 2018 Dec. 31st 2017 Last year (%) Total assets 13,647,932,568 13,117,729,052 4.04% 12,536,755,208 Net Assets attributed to the shareholders of 10,308,910,198 9,606,099,365 7.32% 8,906,342,299 the listed company ②Key accounting data by quarter Unit: CNY 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Operation revenue 1,667,424,758 890,850,027 968,100,175 1,504,636,529 Net profit attributed to the shareholders of the 456,381,471 147,022,318 125,557,834 400,774,126 listed company Net profit attributed to the shareholders of the listed company after 450,709,661 101,781,034 119,702,422 219,882,814 deducting the irregular profit and loss Net cash flows from the 294,678,342 204,797,664 145,855,707 192,506,311 operating activities Whether there are significant differences between above-mentioned financial indicators or their sum and the related financial indicators in the quarterly report and semi-annual report disclosed by the Company. □Yes No 3 2019Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd. (4) Capital stock and shareholders’ situation ① Number of ordinary shareholder and preferred shareholder recovering voting power, and situation of shares held by top ten shareholders Unit: share Total number of preferred shareholder Total number of shareholders by Total number of preferred shareholder Total shareholders in recovering voting power by the end of 43,856 the end of last month before the 45,626 recovering voting power by the end of 0 0 the report period last month before the disclosure day of disclosure day of the annual report report period (if have) (see note 8) the annual report (if have) (see note 8) Shareholders holding more than 5% or the top 10 shareholders holding situation Pledged or frozen Name of Shareholders Character of shareholders Percentage (%) Amount of holding shares Number of restricted shares Share status Amount YANTAI CHANGYU GROUP CO., LTD. Domestic non-state legal person 50.40% 345,473,856 0 - 0 GAOLING FUND, L.P. Foreign legal person 3.08% 21,090,219 0 - CHINA SECURITIES FINANCE CORP State legal person 2.25% 15,440,794 0 - 0 BBH BOS S/A FIDELITY FD - CHINA Foreign legal person 2.22% 15,241,826 0 - 0 FOCUS FD SHENWAN HONGYUAN SECURITIES Foreign legal person 1.20% 8,243,333 0 - 0 (HONGKONG) LIMITED FIDELITY PURITAN TRUST: FIDELITY Foreign legal person 0.93% 6,350,762 0 - 0 SERIES INTRINSIC OPPORTUNITIES FUND GUOTAI JUNAN SECURITIES Foreign legal person 0.70% 4,810,345 0 - 0 (HONGKONG) LIMITED CENTRAL HUIJIN ASSET MANAGEMENT State legal person 0.69% 4,761,200 0 - 0 4 2019Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd. LIMITED VANGUARD EMERGING MARKETS 0 Foreign legal person 0.55% 3,788,487 - 0 STOCK INDEX FUND FIDELITY CHINA SPECIAL SITUATIONS Foreign legal person 0.55% 3,779,202 0 - 0 PLC Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or The explanation for the associated relationship and accordant action accordant action relationship with the other 9 listed shareholders, while the relationship among the other shareholders is unknown. Explanation for the top 10 shareholders who involved in financing activities and The top 10 shareholders do not involve in financing activities and stock trade business. stock trading business (if have) ②Number of preferred shareholder and situation of preferred shares held by top ten preferred shareholders □Available Not available There are no shares held by preferred shareholders during the report period. ③Introduction for property right and control relations between the Company and its actual controllers 5 2019Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd. 6 2019Annual Report Abstract of Yantai Changyu Pioneer Wine Co. Ltd. (5) Company Bonds Whether or not the Company has the corporation bonds issued in public, listed in the stock exchange, not due on the annual report’s authorized issue date or failed to pay in full on the due date. No. 3. Management Discussion and Analysis (1) Brief introduction of operation situation during the report period ①Summary In 2019, influenced by many factors, such as the slowdown of domestic economic growth and the increase in uncertainty resulting from Sino-US trade friction, the competition in domestic wine market was very strong. The sales volumes of both imported wine and domestic wine decreased continued from 2018 and some wine production enterprises got into trouble. Facing quite a lot of external disadvantages, the Company persisted in taking the market as the center, adhered to the development strategy of “Focus on middle-and-high level, Focus on high quality, Focus on big product” and the marketing philosophy of “obtaining growth from the terminal and nurturing consumers”, and strived to promote product sales, achieving good results and realizing operating revenue of CNY 5,031.01 million with a year-on-year decrease of 2.16% and net profit of CNY 1,129.74 million belonging to the parent company’s shareholders with a year-on-year increase of 8.35%. ②Analysis of main business 1) Summary Increase or decrease of the Description end of the period over the Cause of significant changes end of last year Operating revenue -2.16% Mainly because of decrease in sales volume Operating cost -0.74% Mainly because of decline in wine sales Mainly because of return of trademark use fee Sales expense -17.37% during this report period Mainly because of year-on-year decrease in wage & Management expense -9.22% welfare and depreciation expenses Mainly because of increase in expenses for R&D expense 26.27% technology research and development in 2019 Mainly because of decrease in loan interest Financial expense -1.82% expenditure Net amount of cash flow Mainly because of decrease in received cash from -14.15% generated in operating activities product sales and rendering of service 7 2019Annual Report Abstract of Yantai Changyu Pioneer Wine Co.