Stockcode:000045,200045 StockAbbreviation:ShenTextileA,ShenTextileB AnnouncementNo.2019-14 Summaryof2018AnnualReportofShenzhenTextile (Holdings)Co.,Ltd. 1.Importantnotes Thesummaryisabstractfromfull-textofannualreport,formoredetailsinformation,investorsshouldfoundinthefull-textofannualreportthatpublishedonwebsiteofShenzhenStockExchangeandotherwebsiteappointedbyCSRC. OtherdirectorsattendingtheMeetingforannualreportdeliberationexceptforthefollowed: Nameofdirectorabsent Titleforabsentdirector Reasonsforabsent Attorney ZhuJun Chairman Workingreason ZhuMeizhu Non-standardauditor’sopinion □Applicable√Notapplicable Preliminaryplanforprofitdistributiontothecommonshareholdersorturningthecapitalreserveintothesharecapitalforthereportingperiod,whichhasbeenreviewedandapprovedattheboardmeeting □Applicable√Notapplicable TheCompanyhasnoplanofcashdividendscarriedout,bonusissuedandcapitalizingofcommonreserveseither.Preliminaryplanforprofitdistributiontothepreferenceshareholdersforthereportingperiodwhichhasbeenreviewedandapprovedattheboardmeeting □Applicable√Notapplicable II.Basicinformationaboutthecompany 1.Companyprofile Stockabbreviation ShenTextileA，ShenTextileB Stockcode 000045,200045 Stockexchangeforlisting ShenzhenStockExchange Contactpersonandcontactmanner Boardsecretary SecuritiesaffairsRepresentative Name JiangPeng LiZhenyu OfficeAddress 6/F,ShenfangBuilding,No.3Huaqiang 6/F,ShenfangBuilding,No.3Huaqiang NorthRoad,FutianDistrict,Shenzhen NorthRoad,FutianDistrict,Shenzhen Fax 0755-83776139 0755-83776139 Tel 0755-83776043 0755-83776043 E-mail jiangp@chinasthc.com lizy@chinasthc.com II.Briefintroductiontothemainbusinessorproductsinthereportingperiod 1. MainBusinesstheCompany Thecompany'smainbusinesscoveredsuchthehighandnewtechnologyindustryasrepresentedbyLCD polarizer,itsownpropertymanagementbusinessandtheretainedbusinessofhigh-endtextileandgarment Inthereportperiod,nosignificantchangehappenedtothemainbusinessoftheCompany.Ononehand,theCompanyfocusedonpromotionofthepolarizeroperationcapacity,whereinittookmeasuresofoptimizingproductionprocessandproductstructure,tighteningqualitycontrolandhighlightingtechnologyresearch&developmentamongothers,andshifteditspriorityfromsalestosellingprofitsinastrategicallymarket-orientedway;ontheotherhand,itcompletedtheconstructionandoptimizationoftheLine6Projectasplanned,tobespecific,InJune2018,itcompletedthetechnicaltransformationandtestrunofTFT-LCDandOLEDpolarizerLine6Projectthatwastransferredtofixedassetsandembarkedonamassproductionstage.WithregardtooptimizationandpromotionoftheLine6Project,theCompanycompletedthecomprehensiveaccelerationofthefirstthreeprocesses--pre-processing,extensionandcoating,introducedshapegrindingmachinesintherearsectionoftheproductionlineinthefirsthalfofyearandrealizedregularmassproductioninthethirdquarter,fillingtheCompany'sgapintheshapepolarizerprocessing;thirdly,theCompanytooktheinitiativetoboostconstructionofthejumboTVpolarizerindustrializationproject(Line7)andcompletedtheprojectapproval,feasibilitystudyandexaminationandapprovalwork.AdoptedattheGeneralMeetingofShareholdersinAugust2018throughdeliberation,theLine7ProjectdulyembarkedonitsconstructioninSeptember2018andpassedtheEIAinDecember2018.TheplantandequipmentdesignwasoptimizedintheLine7ProjectonthegroundofasignificanttechnicalsupportgivenbyNittoDenkointermsofproductiontechnology,plantdesign,andAGVpathoptimizationamongothers;fourthly,toenhancemanagementserviceandincreasebenefitofpropertymanagemententerprises,theCompanyfurtherintensifiedallthemanagementserviceideasofpropertymanagemententerprises,tooktheinitiativetocopewithalltheadverseeffectsofsuchfactorsaseconomicdownturnandmarketdepressiononpropertyleasingandmanagementandincreasedtherentalincomewitheffort;fifthly,confrontedwiththesluggishtraditionaltextileindustry,theCompanytooktheinitiativetoovercomesuchunfavorableeffectsasariseinthecostofrawmaterialsandlaborandgaveprioritytoorderproductionthroughoptimizationofcustomerandproductstructuretobringthemoney-losingtextilebusinessintotheblack;sixthly,theCompanytightenedsafetyandenvironmentalprotectionwork,safeguardedenterpriseharmonyandstability,andkeptgivingaprioritytosafeandenvironment-friendlyproductiontotaketheinitiativetodischargeitssocialresponsibilitywhilepursuingagreen,healthandsustainabledevelopment. AsatypeofupstreamrawmaterialsofLCDpanelsandoneofessentialandfundamentalmaterialsinthepaneldisplayindustry,polarizersarewidespreadusedinavarietyofareas,LCDpanelsandOLEDpanelsforsmartphones,tabletPCsandTVsets,instruments,apparatuses,sunglasses,andlightfiltersofcameraequipment,tonameafew.Atthemoment,theCompanyhas6masspolarizerproductionlinesformakingproductsthatcoversuchareasasTN,STN,TFT,OLED,3D,dyefilms,andopticalfilmsfortouchscreensandareprimarilyusedinTV,NB,navigators,Monitor,vehicle-mounted,industrialcontrol,instruments,apparatuses,smartphones,wearableequipment,3Dglasses,sunglassesandotherproducts,basedonwhich,theCompanyhasbecomeaqualifiedsuppliertoChinaStarOptoelectronicsTechnology(CSOT),BOE,InfovisionOptoelectronics(IVO),ShenchaoOptoelectronic,LGD,Tianmaandothermajorpanelenterprisesthroughconstantextensionofitsmarketingchannelsandbuildingofitsownbrand. TheCompany'smainproductsmadeineachpolarizerproductionlineandtheirapplicationareasfollows: Line Place Product Plannedcapacity Mainproducts breadth Line1 Pingshan 500mm 600,000m2 TN/STN/dyefilm Line2 Longhua 500mm 1.2millionm2 TN/STN/CSTN Line3 Longhua 650mm 1millionm2 TN/STN/CSTN/TFT Line4 Pingshan 1490mm 6millionm2 TN/STN/CSTN/TFT Line5 Pingshan 650mm 2millionm2 TFT Line6 Pingshan 1490mm 10millionm2 TFT/OLED Line7 Pingshan 2500mm 32millionm2 TFT/OLED (Underconstruction) (II)Company'sbusinessmodel Thepriorityofthepolarizerindustryisgraduallyshiftingfromtheconventionalresearch&development-production-salesbusinessmodeltothecustomer-orientedbusinessmodelofjointresearch&developmentandfullservice.TheCompanyreducedproductionlinksandcostsandcreatedvalueforcustomersandawin-winsituationthroughcooperationbyunderstandingcustomers'needs,makinghigh-qualityproductsthroughjointresearch&developmentandhigh-standardproductionmanagementandusingadvancedpolarizerrollingandattachingequipmentinconjunctionwithdownstreampanelmanufacturers'productionlines. (III)MajorfactorsfordrivingtheCompany'sperformance Referto"III.Analysisoncorecompetitiveness"inthissectionfordetails. (IV)DevelopmentstageandperiodiccharacteristicsoftheindustrywheretheCompanyisinvolvedandtheCompany'spositionintheindustry Referto"IX.Company'soutlookforfuturedevelopment"inSectionIVfordetails. Inthefuture,theCompanywilldeependrivingthemixed-ownershipreformworkandstrengthenstrategiccooperationbasedonmorethan20yearsofindustrialoperationexperienceandregionaladvantages.Tobespecific,theCompanywillfurtheroptimizeitsequitystructure,invigorateitsoperationandpromoteitsproductiontechnologyandbusinessmanagementstandardsthroughintegrationofresourcesinthepolarizerandopticalfilmindustries;meanwhile,theCompanywillsparenoefforttopushforwardtheconstructionofanultra-widepolarizerproductionlinetooccupythehighlylucrativejumboLCDTVpolarizerproductmarket;inadditiontoworkingonthepolarizerindustry,theCompanywillmakealeapingdevelopmenttowardstheopticalfilmindustrytomakeSAPOPhotoelectricabiggerandstrongerenterprise. 3.Majoraccountingdataandfinancialindicators （1）Majoraccountingdataandfinancialindicatorsforthelastthreeyears Indicatebytickmarkwhetherthereisanyretrospectivelyrestateddatuminthetablebelow. □Yes√No InRMB Changedoverlastyear 2018 2017 （％） 2016 Operatingincome（RMB） 1,272,356,771.34 1,475,545,719.72 -13.77% 1,198,200,216.42 Netprofitattributabletothe -22,980,624.93 52,776,101.46 -143.54% -87,270,604.54 shareholdersofthelistedcompany （RMB） Netprofitafterdeductingof non-recurringgain/lossattributable -65,404,429.81 3,140,446.26 -2,182.65% -102,767,648.41 totheshareholdersoflisted company（RMB） Cashflowgeneratedbybusiness -460,494,321.15 -28,518,702.31 -1,514.71% -55,264,465.84 operation,net（RMB） Basicearningper -0.04 0.100 -140.00% -0.17 share(RMB/Share) Dilutedgainsper -0.04 0.100 -140.00% -0.17 share(RMB/Share)(RMB/Share) WeightedaverageROE(%) -0.96% 2.23% -3.19% -4.10% Endof Changedoverlastyear Endof2018 2017 （％） Endof2016 Grossassets（RMB） 4,619,203,416.79 4,195,746,507.56 10.09% 4,119,586,266.47 Netassetsattributableto shareholdersofthelistedcompany 2,373,329,991.86 2,397,474,603.79 -1.01% 2,339,554,176.31 （RMB） （2）MainFinancialIndexbyQuarters InRMB Firstquarter Secondquarter Thirdquarter Fourthquarter Operatingincome 221,307,388.08 252,955,020.49 433,011,400.70 365,082,962.07 Netprofitattributabletothe 5,616,717.00 4,030,259.15 2,621,782.96 -35,249,384.04 shareholdersofthelistedcompany Netprofitafterdeductingof non-recurringgain/lossattributable -4,641,384.38 -6,175,930.54 -7,620,712.88 -46,966,402.01 totheshareholdersoflisted company NetCashflowgeneratedby -35,263,573.85 -93,587,315.59 -269,937,851.60 -61,705,580.11 businessoperation Whethersignificantvariancesexistbetweentheabovefinancialindexortheindexwithitssumandthefinancialindexofthequarterlyreportaswellassemi-annualreportindexdisclosedbytheCompany. √Yes□No Operatingincome Firstquarter Secondquarter Thirdquarter 1-3quarterintotal Disclosureamount 221,307,388.08 316,980,662.53 533,270,021.4 1,071,558,072.01 AuditedConfirmed 221,307,388.08 252,955,020.49 433,011,400.7 907,273,809.27 Amount discrepancy 0 -64,025,642.04 -100,258,620.70 -164,284,262.74 4.Sharecapitalandshareholders （1）NumberofholdersofordinarysharesandpreferenceshareswithrestoredvotingrightandTop10shareholders Inshares Totalnumber Total Thetotalnumber Total ofcommon shareholdersat ofpreferredshar preferredsharehold shareholdersat theendofthe eholdersvotingri ersattheendofthe theendofthe 36,891monthfromthe 35,264ghtsrestoredatp 0monthfromthedate 0 reporting dateofdisclosing eriod-end(if ofdisclosingthe period theannualreport any)(SeeNotes annualreport(if 8) any)(SeeNotes8) Shareholdingsoftop10shareholders Shareholders Natureof Proportionof Numberof Amountofrestrictedsharesheld Numberofshare shareholder sharesheld(%) sharesheld pledged/frozen atperiod Stateofshare Amount -end Shenzhen Investment State-owned 45.78%234,069,436 0 HoldingsCo., legalperson Ltd. Shenzhen Shenchao State-owned Technology Legalperson 3.15%16,129,032 0 InvestmentCo., Ltd. FujiangBairui Jiayuan,Asset Management Other 0.77% 3,934,035 0 Co.,Ltd.－ BairuiJiayuan GrowthIFund Domestic SunHuiming Nature 0.62% 3,192,767 0 person Domestic LiSongqiang Nature 0.56% 2,873,078 0 person Domestic ZhengJunshengNature 0.36% 1,830,000 0 person Domestic KuangGuoweiNature 0.28% 1,457,000 0 person Domestic ZhuYe Nature 0.22% 1,131,945 0 person Domestic LiZengmao Nature 0.20% 1,038,800 0 person Domestic HongFan Nature 0.20% 1,028,900 0 person ShenzhenShenchaoTechnologyInvestmentCo.,Ltd.isawholly-ownedsubsidiaryofShenzhen Relatedoracting-in-concert InvestmentHoldingCo.,Ltd.andapersontakingconcertedaction.Exceptthis,theCompanydid partiesamongshareholders notwhetherthereisrelationshipbetweenthetoptenshareholdersholdingnon-restrictednegotiable above sharesandbetweenthetoptenshareholdersholdingnon-restrictednegotiablesharesandthetop10 shareholdersorwhethertheyarepersonstakingconcertedactiondefinedinRegulationson DisclosureofInformationaboutShareholdingofShareholdersofListedCompanies. TheCompanyShareholderFujiangBairuiJiayuan,AssetManagementCo.,Ltd.－BairuiJiayuan Explanationonshareholders GrowthIFundholds3,954,735sharesoftheCompanythroughstockaccountwithcredit participatinginthemargin transaction;TheCompanyShareholderLiSongqiangholds2,872,653sharesoftheCompany tradingbusiness(ifany) throughstockaccountwithcredittransaction;TheCompanyShareholderZhuYeholds1,031,945 sharesoftheCompanythroughstockaccountwithcredittransaction. 2.Numberofthepreferenceshareholdersandtheshareholdingsofthetop10ofthem □Applicable√Notapplicable Nopreferenceshareholdersinthereportingperiod 3.RelationshipbetweentheCompanyanditsactualcontrollerintheformofdiagram 5.Corporationbonds CorporateBondsIndicatebytickmarketwhethertheCompanyhasanycorporatebondspubliclyofferedandlistedonthestockexchange,whichwereunduebeforethedateofthisReport’sapprovalorwereduebutcouldnotberedeemedinfull. No III.DiscussionandAnalysisoftheManagement 1.BusinessOperationsummaryinthereportingperiod Whetherthecompanyneedstocomplywiththedisclosurerequirementsoftheparticularindustry No In2018,theeconomicenvironmentchangewasintensified,andtheCompanywasaffectedbyunfavorablefactorssuchasSino-UStradefriction,largeexchangeratefluctuations,intensifiedmarketcompetition,highproductionunitconsumption,poorproductstructureoptimization,andtheoverallincreaseinproductionfactorsprices.Thebusinesssituationofpolarizerproductionandoperationwasnotuptoexpectations. In2018,theCompanyrealizedtheoperatingincomeofRMB1,272.3568million,adecreaseof13.77%overthesameperiodofthepreviousyear;thetotalprofitrecordedalossofRMB53.4231million,adecreaseof162.89%overthesameperiodofthepreviousyear;thenetprofitattributabletoownersoftheparentcompanyrecordedalossofRMB22.9806million,aYOYdeclineof143.54%.ThemainreasonsfortheCompany'slosseswere:first,duetotheadverseimpactofthedeclineinthepriceofthedisplayterminalduringthereportingperiod,thesalespriceofpolarizerforTVproductsoftheCompanydeclined;secondly,theprojectofLine6wasstillintheclimbingstageaftertheprojectwasputintoproduction,resultinginafixedcostoftheproductunitwasrelativelyhigh,third,inthereportingperiod,duetothedeclineoftheexchangerateofRMBagainsttheJapaneseyen,thepurchasecostofimportedrawmaterialsincreased,andtheexchangelossincreased;fourth,duetothedeclineinthesellingpriceoftheproductsduringthereportingperiod,theprovisionforinventoryfallingpriceincreased. Facingtheincreasinglysevereoveralloperationsituationofpolarizerandtheweakeningglobaleconomicsituationunderthetradeprotectionism,theCompanyfaceduptothedifficulties,overcamethedifficulties,gavefullplaytoitsinternaladvantages,deepenedandpromotedthemixed-ownershipreformwork,andlaidasolidfoundationforfurthertransformationanddevelopmentoftheCompany.Itoptimizedtheproductstructureoftraditionaltextilebusinesstoturnlossintoprofit;strengthenedthemanagementservicesofproperty-kindenterprisesandimprovedtheefficiency. Reviewofthecompany'skeyworkscarriedoutin2018asfollows: (I) Polarizer'soperatingcapabilityhasbeenimproved In2018,basedonmarket-oriented,theCompanyoptimizedtheproductstructure,expandedthepanelproducttohigh-value-addedorderssuchaslarge-sizeandthin-formproduct,andshiftedtheemphasisfromsalesvolumetosalesprofit,speduptheintroductionandstart-upofnewprojects.Meanwhile,ithadcomprehensivelycarriedouthigh-profitmachineverificationwork;second,focusingontechnologyresearchanddevelopmentandtheoverallstrategicdeployment,itincreasedtheresearchanddevelopmenteffortsinnewproducts,newmaterials,productionprocesses,etc.;third,optimizedtheproductionprocesses,improvedthequalitycontrol,andcontrolledtheinventoryquantitybyreducingproductqualityabnormalityandimprovingtheinventoryturnover;fourth,activelystrivedforscientificresearchpolicysupportfunds.In2018,atotalof50.84millionyuanofpolicyfundingsubsidieswasattained. Furthermore,theCompanyincreasedresearch&developmentofindependentintellectualpropertyrights.Throughouttheyear,theCompanyappliedfor10patents(including4inventionpatentsand6utilitymodelpatents)andimported1PCTpatent(utilitymodelpatent)intoSouthKoreaandJapanrespectively.TillDecember31,2018,theCompanyappliedfor91patentsintotal(66licensed),including23nationalinventionpatents(8licensed),61nationalutilitymodelpatents(54licensed),1internationalinventionpatent(0licensed)and6internationalutilitymodelpatents(4licensed).TheCompanystudiedandformulated4nationalstandardsand2industrialstandardswhichhavebeenadoptedandputintopractice.TheCompanyhastwotechnicalplatforms--"ShenzhenPolarizingMaterialsandTechnologyEngineeringLab"and"MunicipalResearchandDevelopmentCenter"wherefocusisgiventoresearch&developmentandindustrializationofkeyLCDpolarizerproductiontechniques,research&developmentandindustrializationofnewOLEDpolarizerproductsandresearchonlocalizationofpolarizerproductionmaterials.TheCompanyraiseditsresearch&developmentstandardinallrespectsbytakingmeasuresofintroducingalltypesofprecisiontestingequipment,improvingmethodsofpreliminaryandpilottestsandresearch&developmentincentivesystemandbuildingan"industry-university-research"integratedinnovationplatformamongothers. (II)Enhancementofmanagementservicesofpropertymanagementandtextileenterprisesforthesakeofbenefitincrease In2018,theCompanyfurtherreinforcedallthemanagementserviceideasofpropertymanagemententerprises,handledalltheadverseeffectscausedbyeconomicdownturnandmarketdepressiontopropertyleasingandmanagementinascientificway,faceduptodifficultywithcourage,madegreateffortsinleasingoperationtopromoteservicesandstabilizecustomers,carriedoutstandardizedmanagement,enhancedcorrectionofpotentialsafetythreats,elaboratedmanagementprocess,lowereddisbursementandenhancedefficiencytoincreasetherentalincome. Confrontedthedepressioninthetraditionaltextileindustry,theCompanytooktheinitiativetoovercomeeffectsofsuchunfavorablefactorsasariseinthecostofrawmaterialsandlaborandgaveprioritytoorderproductionthroughoptimizationofcustomerandproductstructuretobringthemoney-losingtextilebusinessintotheblack. （III)CompletionofconstructionandoptimizationofLine6Projectasscheduled Inviewofacertaindeclineinthepriceof32-inchproductsatthepolarizermarketattheendof2017,theCompanyoptimizedandpromotedthemainequipmentintheLine6attheendof2017,whereinthefullaccelerationofthefirstthreeprocessesstoodout,fillingthegapoftheCompanyinshapepolarizerprocessing.InJune2018,theCompanycompletedtheoptimization,promotionandtestrunoftheLine6Projectthatwastransferredtofixedassetsandembarkedonamassproductionstageinthethirdquarter. (IV)FacilitatedconstructionofjumboTVpolarizerindustrializationprojectwitheffort In2018,theCompanytooktheinitiativetoboostconstructionofthejumboTVpolarizerindustrializationproject(Line7).Inthefirstplace,projectapproval,feasibilitystudyandexaminationandapprovalwerecompleted.AdoptedattheGeneralMeetingofShareholdersinAugust2018throughdeliberation,theLine7ProjectdulyembarkedonitsconstructioninSeptember2018andpassedtheEIAinDecember2018.Secondly,theplantandequipmentdesignwasoptimizedintheLine7ProjectonthegroundofasignificanttechnicalsupportgivenbyNittoDenkointermsofproductiontechnology,plantdesign,andAGVpathoptimizationamongothers.Thirdly,abusinessunitwassetupfortheLine7Projectwhereindependentaccountingandbusinessmanagementwereimplementedtopushforwardprojectconstructionwithalltheefforts. （V）Tightenedsafetyandenvironmentalprotectionandsafeguardingofenterpriseharmonyandstability In2018,theCompanykeptgivingaprioritytosafeandenvironment-friendlyproductionbyadheringtothephilosophyofsafetyoverridinganythingelse.Asalways,theCompanyhighlightedthesafetyandenvironmentalprotectionwork.Throughouttheyear,theCompanyinvestedRMB18.71millioninaddingandmaintainingsafe andenvironment-friendlyequipment,predominantlycompletedupgradingandtransformationthewastewaterprocessingsystemandupdatingtheRTOwastegasprocessingequipmentintheLine6andupdatingandeliminatinghighliquorratiodyingequipmentforBeautyCenturyamongotherwork,andfulfilled100%up-to-standardwastewaterandgasemission,0more-than-averageenvironmentalpollutionaccidentand0environmentalprotectionirregularitytopracticallyperformitssocialresponsibility. （VI)ConstantreinforcementoffoundationandstrengtheningofprimaryPartybuildingwork Onthegroundofimplementingandputtingintopracticethespiritofthe19thNationalCongressoftheCommunistPartyofChina,theCompanythoroughlycarriedouttheParty'snewdeploymentanddemandforseeingPartyself-governanceexercisedfullyandwithrigor,carefullyfulfilledtheentityresponsibilityofthePartyCommitteeandsupervisionresponsibilityoftheDisciplinaryInspectionCommission,reinforcedthesystemof"oneposttakingadualresponsibility",andimplementedthePartyBuildingResponsibilityStatementtoguaranteethatthePartybuildingworkwasputintopractice;itpushedforwardPartybuildingsystembuildingandraisedthestandardofthenormalizationofthePartybuildingworkstepbystep;ittooktheinitiativetoexploreanddrivethePartybuildingworkinenterprisesinvolvedinmixed-ownershipreformandguidedcorporatebusinessdevelopmentbyPartybuildingwork. 2.Materialchangeinprincipalactivitiesduringthereportingperiod □Yes√No 3.Productsaccountingforover10%ofrevenueorprofitfromprincipalactivitiesoftheCompany √Applicable□Notapplicable InRMB Increase/decreaseIncrease/decreaseIncrease/decrease Grossprofit ofrevenueinthe ofbusinesscost ofgrossprofit Name Turnover Operationcost rate(%) sameperiodof overthesame rateoverthesame theprevious periodof periodofthe year(%) previousyear(%)previousyear(%) Leaseand Managementof 98,327,018.46 42,185,793.46 73.72% 4.85% 15.84% 2.05% Property Textile 47,188,632.17 687,575.76 12.92% 14.33% 140.62% 3.24% Polarizersheet 832,221,198.11 -113,277,631.27 4.07% -2.27% -522.35% -5.29% Trade 288,744,806.35 15,542,225.95 5.97% -38.13% 103.04% 4.25% 4.Seasonalorcyclicaloperationsrequiringspecialattention □Yes√No 5.SignificantYoYchangesintheoperatingrevenues,operatingcostsandnetprofitsattributabletothecommonshareholdersortheircomposition √Applicable□Notapplicable Duringthereportingperiod,thetotalnetprofitattributabletoordinaryshareholdersofthelistedcompanyis RMB-22,980,624.93,whichwasmainlyduetothefollowingfactors:1.Theendsalesofdisplayershrankandthesalespricefell,resultingintheCompany'spolarizerproducts’salesdecline;2.ThePhaseIIofLine6projectofTFT-LCDwasstillintheclimbingstageaftertheprojectwasputintoproduction,resultinginahigherfixedcostoftheproductunit;3.duringthereportingperiod,theRMBexchangeratefell,andthepurchasecostofimportedrawmaterialsincreased,resultinginanincreaseinthevariablecostoftheproductunit,andtheexchangelossincreased;4.duringthereportingperiod,it’sexpectedthatthedeclineinproductpricesmaycontinue,andtheprovisionforinventoryfallingpricewasincreasedduetotheprincipleofprudence. 6.Suspensionintradingordelisting □Applicable√ Notapplicable 7.Eventsrelatingtothefinancialreport (1)Particularsaboutthechangesinaspectofaccountingpolicy,estimatesandcalculationmethodcomparedwiththefinancialreportoflastyear □Applicable√ Notapplicable ThereCompanyhasnoaccountingpolicy,estimatesandcalculationmethodchangedintheperiod (2)Majoraccountingerrorswithinreportingperiodthatneedsretrospectiverestatement □Applicable√Notapplicable NomajoraccountingerrorswithinreportingperiodthatneedsretrospectiverestatementfortheCompanyintheperiod (3)Comparewithlastyear’sfinancialreport;explainchangesinconsolidationstatement’sscope □Applicable√ Notapplicable Nochangesinconsolidationstatementscopeinthereportingperiod TheDirectorofBoardofShenzhenTextile(Holdings)Co.,Ltd. April27,2019