南玻集团-ag九游会

summary of annual report 2017

i. important notice

board of directors and the supervisory committee of csg holding co., ltd. (hereinafter referred to as the company) and its directors, supervisors and senior executives hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the , accuracy and completeness of the whole contents.

ms. chen lin, chairman of the board, mr. pan yonghong, responsible person in charge of accounting and (accounting officer) confirm that the financial report enclosed in this 2017 annual report is true, accurate and complete.

except for the following director, other directors personally attended the meeting of the board of directors deliberating this annual report.

this report involves future plans and some other forward-looking statements, which shall not be considered as virtual promises to investors. investors are kindly reminded to pay attention to possible risks.

details of the risk factors and countermeasures of future development have been well-described in this report, please find in section iv business discussion and analysis.

the deliberated and approved plan of profit distribution and capital reserve converted into share capital in the board meeting is distributing cash dividend of rmb 0.5 (tax included) for every 10 shares to all shareholders based on 2,484,147,547 shares of the total share capital while dividends will be distributed. meanwhile the company will transfer capital reserve into capital with 1.5 shares for every 10 shares to all shareholders based on 2,484,147,547 shares of the total share capital.

this report is prepared both in chinese and english. should there be any inconsistency between the chinese and english versions, the chinese version shall prevail.

ii. company information

1. company profile

2. main business or product introduction in the report period

csg is a leading domestic brand of energy-saving glass and a renowned brand of solar pv products and display devices. its products and technologies are very popular at home and abroad. its main business covers r&d, manufacturing and sales of high quality float glass and architectural glass, solar glass, silicon material, renewable energy products such as pv battery and modules, and new materials and information display products such as ultra-thin electronic glass and display devices. it also provides one-stop services such as project development, construction, operation and maintenance of solar photovoltaic power plants.

flat glass industry

csg now has 10 float glass production lines representing the most advanced technology in domestic market and 2 solar glass production lines. the annual capacity of various high-grade float glass has reached more than 2.32 million tons and the annual capacity of solar rolled glass has reached over 0.43 million tons. the company owns quartz sand raw material bases in jiangyou, sichuan province and yingde, guangdong province. the production bases for flat glass, solar glass of the company located in dongguan, chengdu, langfang, wujiang, and xianning, which can produce various colors of high-grade float glass and ultra-clear float glass with thickness from 1.3mm to 25mm. those products are widely used in high-grade buildings, decoration and furniture, mirror, automotive windshield, scanner, copier, pdp tv, rear-projection television, display devices and solar energy field, each performance indicator of which has reached domestic advanced level.

the company always adheres to innovation, transformation and upgrading, and further enhances the profitability of flat glass industry by the implementation of differentiated competitive strategy. in 2017, the second-line technological transformation project of the subsidiary hebei csg was successfully completed and entered commercial operations. the original float glass production line was transformed into a structure with one melter and two production lines, which can simultaneously produce two types of float glass to satisfy different specifications and requirements and thus significantly improve the flexibility of production line. the first-line technological transformation project of its subsidiary chengdu csg has succeeded which is targeted to produce high quality auto glass. the technology transformation and operation of such two production lines of float gloss shall further improve the competency of csg in the market of flat glass.

architectural glass industry

as the nation's largest supplier of high-grade engineering and architectural glass, csg has five architectural and energy-saving glass processing centers which are located in tianjin, dongguan, xianning, wujiang and chengdu. the company possesses the world's most advanced glass deep-processing equipment and testing instruments, and its products cover all kinds of architectural glass. r&d and use of coating technology of the company keep pace with the world and its technology of high end product is even of the world’s leading level. following the second generation of energy-saving glass products, the company has successively developed the third generation and multi-function energy-saving glass products with continuous improving energy-saving and heat-preservation effect.its high-quality energy-saving low-e insulating glass has occupied more than 50% of the domestic high-end market. at present, the company’s low-e coated insulating glass and low-e coated glass have reached annual capacity of more than 16.00 million square meters and 36.00 million square meters respectively.

the company’s quality management system for engineering and architectural glass has been respectively approved by organizations of uk aoqc and australia qas. the product quality which meets the national standards of the us, the uk and australia enables csg has an advantage in the international tendering and bidding. since 1988, csg's engineers and technicians have been continuously participating in the formulation and compilation of various national standards and industry standards. various high-quality architectural glass of the company has been used in many landmark buildings at home and abroad, such as beijing capital international airport, cctv, shanghai oriental fisherman's wharf, china resources headquarters building, shenzhen kingkey100 building, shenzhen bay science and technology ecological park, ping an international finance centre, anhui radio-television new center, hangzhou international airport, yaxia headquarters building, chengdu international finance centre, hangzhou hampton and other more than ten hilton hotel, hong kong four seasons hotel, melbourne airport, midtown, international centre of abu dhabi.

solar energy industry

csg has entered solar photovoltaic industry since 2005 and is one of enterprises which first enter the field in china. after more than ten years of construction, operation and technological upgrading, csg has built an industry chain in the world, covering high purity polycrystalline silicon materials, silicon wafer, silicon solar cell and modules, and design and construction of solar photovoltaic power plants, by which the company ensures the stable quality and best cost-efficiency of its pv products to customers.

the company now produces 9,000 ton/year of polycrystalline silicon, 2.2 gw/year of silicon wafer, 0.85gw/year of solar cell, and 0.4gw/year of modules. the quality and performance indicators of the company's polysilicon have reached the advanced level in the industry and it has reserved electronic-grade polysilicon production technology. meanwhile, the company is also promoting silicon wafer project of yichang csg and technological innovation and expansion and reconstruction projects of solar cell module in dongguan in order to enhance the anti-risk capacity of its pv industry chain and drive the balanced, stable development of its pv industry chain. when the projects are completed, the quality and performance indicators of the company's silicon wafers and silicon solar cells will be greatly increased and the general competitiveness of the chain will be further improved.

to perfect its solar energy chain, the company established shenzhen csg pv energy co., ltd., a wholly-owned subsidiary, in 2015, of which the mainline business is to invest and develop solar photovoltaic power plants and extend csg's solar energy industry to cover highly value-added terminal applications. at the end of 2016, the company newly established new energy application department to generally manage the investment, operation and maintenance of the company's pv power plants and effectively integrate internal assets, so as to enlarge and strengthen its solar energy business.

electronic glass and display industry

the company has built two complete chains of full-set out-cell touch panel from raw material, processing to touch panel integration module, one of which is “glass coating → glass yellow light →film modules", and the other of which is "pet coating →film yellow light →film module”, and one ag glass production line of “glass ag surface physical treatment-chemical processing” with its more than ten years of experience since 2000 when it established shenzhen nanbo display technology co., ltd. its production capacity covers glass coating, glass pattern processing, glass touch panel module, flexible material filming, flexible material pattern processing, and full lamination of flexible touch panel display that holds a complete industry chain from ultra-thin sensor processing and ultra-thin touch panel module assembly to achieve high definition display and ultra-narrow edge touch panel solutions, the main products of which covers differential products of glass substrate composite coating like anti-glare glass (ag), anti-reflection glass (ar), anti-fingerprint glass (af), semi-translucent glass, reflective and semi-transparent optics coating glass (rt), diamond-like carbon(dlc). csg displays have become a supplier of high-quality electronic application materials for the touch industry, and touch sensor and tp suppliers to provide customers with one-stop tp solutions.

the company, with its more than 20 years of experience in float glass production and powerful technology and innovation team, entered the ultra-thin electronic glass market in 2010 and gradually completed the nationwide strategic layout. there are four production bases, namely hebei panel glass, yichang nanbo photoelectric glass, qingyuan csg and xianning csg photovoltaic glass. the production capacity ranks first in china. the quality of csg’s aluminum and high-aluminum electronic glass between 0.2mm to 1.1mm has reached the domestic leading level, the performance of which is comparable to that of imported products, breaking the monopoly of foreign technology. currently, the products are widely used in mobile terminal cover glass, tempered glass protective film, ito conductive glass, extending to the fields of high-speed rail, military industry, smart home and others.

 (1) main accounting data and financial indexes in the last three years

whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not

√yes   □ no

unit: rmb

see the full text of the 2017 annual report "vi. particulars about the changes accounting policy, accounting estimate and calculation method ” and "section x financial reports: v. corrections to the prior accounting errors in item 31 of important accounting policies and accounting estimates"

（2）main financial indexes by quarter

whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial index disclosed in the company’s quarterly report and semi-annual report or not

4. particulars about share capital and shareholders

(1),top ten shareholders

unit: share

(2) particulars about the total amount of and top ten preference shareholders

the company had no preference shareholders in the report period.

(3) property right and controlling relationship between the largest shareholder and the company is as follow:

whether the company has a public offering and is listed on the stock exchange, and the company bonds that have not been fully paid or matured on the date of approval of the annual report

no

 (1)basic information of corporate bonds

(2) latest tracking ratings and rating changes of corporate bonds

according to track rating of china chengxin securities rating co., ltd. (abbreviation “ccxr”) in 2017, the company's subject credit rating is aa +, rating outlook is stable, and the bonds credit rating of the current period is evaluated as aa +.

(3) the main accounting data and financial indicators of the company for the last two years as of the end of the report period

rmb 0,000

iii. business discussion and analysis

1. introduction of the operation in the report period

since 2017, the global economic recovery has been gathered momentum by main economies. china’s economy has continued the development tendency of seeking advancement in stability, constantly deepened the supply-side structural reform, steadily propelled the tasks of de-capacity, de-leveraging, de-stocking, de-cost and addressing weakness, further promoted replacing old growth drivers with new ones, and continuously improved the structure of economic development.

for csg, the year 2017 was not only a year serving as a connecting link between the preceding and the following, but also an important year for effectuating its future development. oriented by market demand, the company carefully analyzed its competitive advantages, took the initiative to transform business mode and update technologies, and improved operating quality by fine management to realize the advancement in stability. in 2017, the operation revenue of the company was rmb 10,879 million with year-on-year increase of rmb 1,905 million and growth rate of 21.23%, the net profit was rmb 829 million, with year-on-year increase of 24 million and growth rate of 3.04%, and the net profit attributable to the parent company was 825 million, with year-on-year increase of 28 million and growth rate of 3.47%.

(i) glass industry

affected by the national environmental protection policies and supply-side reforms, each business segment of the company faced various opportunities and challenges. therefore, the company tried to exploit the development opportunities for each product in the process of supply-side structural reform, the details of which were as follows.

float glass: the overall growth rate of domestic housing starts in 2017 slightly slowed down. however, the total amount of construction area still increased, as well as the booming production and sales in the auto market, export growth, and the favorable demand for electrical glass and other industrial glass, float glass products got a rising market. the company took this opportunity to further strengthen overall management and control of sales, accurately grasp market conditions, strengthen industry synergy, promote the differentiation of glass products, and further increase the market share of industrial glass. at the same time, it strengthened the internal management, refined farming, continuous improvement of process technology, promoted energy conservation and consumption reduction, tapping potential and increasing efficiency in an orderly manner. the key indicators such as the daily output of glass and the yield rate of float glass were further improved. the growth of production and sales volume was stable. the revenue increased by 32% and the profit increased by 99%.

architectural glass: in 2017, architectural glass was affected by the sharp increase in the prices of bulk raw materials, especially glass originals, and the growth of downstream fixed asset investment slowed down, its profitability was squeezed. under this pressure, the company responded positively, adjusted its market strategy, strengthened industry synergy, strengthened communication with customers, launched functional glass such as glass with the function of antireflection, electric heating and heat preservation, and opened up new product application markets to achieve revenue growth by 5 %, but subject to the skyrocketing prices of bulk materials, overall profitability of its architectural glass fell by 51%.

(ii) solar energy industry

in 2017, the price of all types of photovoltaic products had a year-on-year decrease compared with the 2016 average price. in 2017, the company made an overall arrangement in advance and responded positively. through the simultaneous production and project construction model, the company completed the technological transformation of polysilicon, silicon wafer, solar cell, and module, as well as the expansion of production capacity, which enabled the company's product quality continuously to improve and enter the industry's advanced level. at the same time, by continuously exploiting internal capacity, the unit consumption of various materials has decreased significantly, and the total non-silicon cost of each product has dropped significantly year-on-year. the construction of solar power plants was also progressing as scheduled. the company's installed capacity of the power plants has reached 128mw as of the end of december 2017. the company has actively explored the application fields such as photovoltaic power generation and bipv (building integrated photovoltaic), and further strengthened the industrial development. it realized annual revenue growth of 35% while net profit decrease of 12%.

(iii) electronic glass and display industry

in 2017, the company attached great importance to improve the quality of electronic glass so as to keep playing its leading role in the industry and get closer to international advanced level. at the same time, it strengthened the promotion of high-alumina glass market, especially the promotion of the terminal market, and gradually tapped into the main mobile terminal manufacturers in china. with the stability of the process, the entire production chain of the display business was opened up, and the production and sales volume of each product increased substantially. the annual revenue of the electronic glass and display industry increased by 102%, achieving a net profit of rmb 59 million, a substantial increase of 487%.

2. major changes of main business in the report period

□ yes √ no

3. list of products exceed 10% of the operating income or operating profits of the company

□not applicable

unit: rmb

4. whether there is seasonal or cyclical characteristics of operation needed to pay particular attention to

yes  √ no

5. statement on significant changes of the amount or composition of operating income, operating costs, net profit attributable to common shareholders of the listed company during the report period compared with the previous report period

□applicable  √not applicable

6. particular about the company suspended from the stock market listing and delisting

□applicable √ not applicable

7. particulars related to financial report

(1) explanation on

√applicable  □not applicable

on august 18, 2017, the 2^nd meeting of the 8^th session of the board of directors reviewed and approved the proposal for changing accounting policy, which was based on the request of the notice issued by the ministry of finance on the issuance of the revised “enterprise accounting standards no. 16—government grants” (finance and accounting [2017] no. 15), and revised financial statement presentation. “other income” item should be presented separately above “operating profit” item in the income statement. the "other income" items are separately presented on the "operating profit" item. since january 1, 2017, government subsidies related to daily activities of enterprises have been reclassified from "non-operating income" item to "other income" item.the comparative financial statements of the year 2016 were not restated.

on april 20, 2018, the 5^th meeting of the 8th session of the board of directors reviewed and approved the proposal for changing accounting policy, which was based on the request of the notification of the issuance of no. 42 of enterprise accounting standards: non-current assets held for sale, disposal group and termination of operation(finance and accounting [2017] no. 13) and the notification on reversing and issuing the formats of common enterprise financial statements (finance and accounting [2017] no. 30), issued by the ministry of finance, and revised financial statement presentation. the “asset disposal income” was added to the profit statement, the “gain/loss resulting from the disposal of non-current assets” which was originally booked in “non-business income” and “non-business expenditure” was listed in “asset disposal gain” and the comparable data during the comparable period would be adjusted. two items, (i) net profit from continuous operation” and “(ii) net profit from terminated operation”, will respectively reflect the net profit involved with continuous operation and terminated operation.

the company has conducted necessary communication with the accounting firm on this matter.

(2) particular about major accounting errors correction that needs retroactive re-statement in the report period

□applicable √ not applicable

(3) whether the consolidated scope changed during the report period compared with the financial report of last year

√applicable  □not applicable

on october 11, 2017, the group established a subsidiary company, china csg（australia）pty ltd. as of december 31, 2017, the group who holds 100% of its shares has not invested yet.