Stockcode:000018，200018 StockID:SinoGreatWall，Sino-B AnnouncementNo.2019-042 Summaryof2018AnnualReportofSinoGreatWallCo.,Ltd. 1.Importantnotes Thesummaryisabstractfromfull-textofannualreport,formoredetailsinformation,investorsshouldfoundinthefull-textofannualreportthatpublishedonwebsiteofShenzhenStockExchangeandotherwebsiteappointedbyCSRC. Objectionsofthedirectors,supervisorsandseniormanagement Name Officetitle Objection&reason Statement OtherdirectorsattendingtheMeetingforannualreportdeliberationexceptforthefollowed: Nameofdirectorabsent Titleforabsentdirector Reasonsforabsent Attorney JiangChongguang Independentdirector Duetoworkreasons YuHaichun Non-standardauditor’sopinion √Applicable□Notapplicable Duetotheinabilitytoobtainsufficientandappropriateauditevidenceasthebasisforexpressingauditopinionsonthefinancialstatements,ReandaPublicCertifiedAccountants(LLP)issuedanauditreportthatcouldreservationopinionsonthecompany.TheboardofdirectorsandtheboardofsupervisorsoftheCompanyhavemadedetailedexplanationsonrelevantmatters,towhichinvestorsshallpayattention. Preliminaryplanforprofitdistributiontothecommonshareholdersorturningthecapitalreserveintothesharecapitalforthereportingperiod,whichhasbeenreviewedandapprovedattheboardmeeting □Applicable√Notapplicable TheCompanywillnotdistributecashdividendorbonusshares,neithercapitalizingofcommonreservesforthereportperiod. PlansforprofitdistributiononpreferencesharesforthereportingperiodapprovedbytheBoard □Applicable√Notapplicable II.Basicinformationaboutthecompany 1.Companyprofile StockID SinoGreatWall，Sino-B Stockcode: 000018、200018 StockExchangeListed ShenzhenStockExchange Contactpersonandcontactmanner Boardsecretary SecuritiesaffairsRepresentative Name YangChunling SunYu SinoGreatWallBuilding,No.3JinxiuStreet,SinoGreatWallBuilding,No.3JinxiuStreet, Contactaddress EconomicTechnologyDevelopmentZone, EconomicTechnologyDevelopmentZone, Beijing Beijing Fax 010-89045856 010-89045856 Tel 010-89045855 010-89045855 Email. 1208806865@qq.com 000018sz@sina.com 2.Briefintroductiontothemainbusinessorproductsinthereportingperiod (I)Companymainbusinessscopeandbusinessmodel Withinthereportperiod,thecorebusinessofSinoGreatWallistheengineeringconstructionandmedicaltreatmentandhealthindustryinvestmentandmanagement.TheengineeringconstructionmainlyincludestheinternationalEPCanddomesticPPPbusiness.Themedicaltreatmentandhealthindustryinvestmentandmanagementmainlycomprisesthehospitalsandmedicaltreatmentoperationmanagementthroughengagementintheindustrythroughseveralwaysincludingacquisitionofexistinghospitals,constructionofnewhospitalsaswellasbuildingandinvestingthehospitalPPPproject,etc.Atpresent,thecompanybusinesscoversthehousebuilding,roadsandbridges,powerandchemicalindustryaswellasmedicaltreatmentandhealth,etc.amongmanycountriesandregionsinSoutheastAsia,theMiddleEast,SouthAsiaandAfrica,etc. ThecompanymainlyengagesintheforeignengineeringconstructionthroughEPC,namelycontractingthewholeprocessorseveralphasesamongtheconstructionprojectdesign,purchase,constructionandtrailoperation,etc.throughintegratingthehigh-qualityresourcesathomeandabroad.Forthedomesticengineeringconstruction,thecompanymainlyadoptsPPPmode,namelytheprojectoperationmodethroughcooperationofthegovernmentalandsocialcapital.Undersuchmode,thegovernmentwillselectthesocialcapitalwiththeinvestmentandoperationmanagementcapacitythroughthecompetitivewaysandbothpartiesshallenterintothecontractsubjecttotheequality-basedconsultationprinciple,underwhich,thesocialcapitalshallprovidepublicservicesandthegovernmentshallpaytheconsiderationagainstthesocialcapitalbasedonthepublicserviceachievementassessmentresult. TheCompanybusinessincludestheprojectdevelopment,financing,design,procurementandconstruction,etc.anditwillalsoparticipateininvestmentinandprovisionofoperationservicesforhigh-qualityprojectswithgooddevelopmentprospect. (II)Engineeringconstructionindustrymacro-situation,competitionpatternandpositioninindustry Foreignengineering:withthecomprehensiveadvanceofthe“OneBeltandOneRoad”initiative,theCompany’scontractedengineeringprojectsindustryforothercountriesisinthegoodgrowthmomentumwhollywithcontinuousexpansionoftheindustryscale. Duringthereportingperiod,thecompanywasawardedwiththe138thmedalinthe"2018ENRTop250InternationalContractors"(ranked39thamongChineseenterprisesand1stamongChineseprivateenterprises).AccordingtostatisticsfromtheMinistryofCommerceandtheStateAdministrationofForeignExchange,China'sindustry-wideforeigndirectinvestmentin2018wasUSD129.83billion,withayear-on-yearincreaseof4.2%.TurnoverfromoverseascontractedprojectsreachedUSD169.04billion,withayear-on-yearincreaseof0.3%.Theturnoverofoverseascontractedprojectsin63countriesandregionsalongthe"theBeltandRoad"wasUSD89.33billion,accountingfor52%ofthetotalforthesameperiod.TheChinesegovernmenthascontinuedtopushforwardtheconstructionof"theBeltandRoad"andhasstrengthenedstrategicdockingwithcountriesandregionsalongtheline.Ithasembracedabroadercooperationspaceininfrastructureconstruction,metallurgicalengineering,equipmentmanufacturingandotherfields,andcreatedmoremarketopportunitiesforthecompany'soverseasbusinessexpansion. Intermsofdomesticprojects:InordertofurtherstandardizethedevelopmentofthePublic-PrivatePartnership(PPP)market,inthefirsthalfof2018,relevantgovernmentdepartmentssuccessivelyissuedpolicydocumentssuchasNoticeonRegulatingInvestmentandFinancingBehaviorofFinancialEnterprisestoLocalGovernmentsandState-ownedEnterprisesandNoticeoftheMinistryofFinanceonFurtherStrengtheningtheStandardizedManagementofPublicPrivatePartnership(PPP)DemonstrationProject,furtherguidingtheeffectiveallocationofresourcesandpreventingrisks,ensuringthattrulystandardizedandefficientPPPprojectscanbeimplementedandthemarketwilldeclineintheshortterm.AfterOctober2018,withtheendofPPPclearingandgovernmentdebtregulation,investmententerpriseshavereboundedsteadily,andtherestartofinfrastructureinvestmentisexpectedtoboosttheoverallinvestment. (III)Company’squalification Atpresent,theCompanypossessestheconstructioncertificatessuchasConstructionalEngineeringConstructionGeneralConstructing-GradeI,HighwayEngineeringGeneralConstructing-GradeI；MunicipalutilityconstructionGeneralConstructing-GradeI；UrbanandroadlightingengineeringConstructing-GradeI；EnvironmentalengineeringConstructing-GradeI；DesignandconstructionofarchitecturaldecorationConstructing-GradeI,ElectromechanicalEquipmentInstallationProjectSpecializedContracting-GradeI,ConstructionCurtainWallProjectSpecializedContracting-GradeI,FireControlFacilitiesProjectSpecializedContracting-GradeI,Possessing10first-classqualificationsofprofessionalcontractingforengineeringofwaterproof,anti-corrosionandinsulation;meanwhile,possessestwoclass-aspecial-gradedesignqualificationsofbuildingcurtainwallengineeringdesignandarchitecturaldecorationengineeringdesign;inaddition,possesses5second-classqualifications,includingthesecond-classgeneralcontractingqualificationofconstructionofwaterconservancyandhydropowerprojects,thesecond-classofgeneralcontractingofmetallurgyengineeringconstruction,thesecond-classqualificationofprofessionalcontractingofsteelstructureengineering,the second-classqualificationofprofessionalcontractingofelectronicandintelligentengineeringandthesecond-classgeneralcontractingqualificationofmechanicalandelectricalengineeringconstruction,andpossessesthethird-classgeneralcontractingqualificationofrailwayconstruction,thespecializedcontractingqualificationforspecialprojectsandsoforthqualifications.Thescopecoversarchitecture,highways,railways,municipalutilities,waterconservancyandhydropower,petrochemical,electricpowerandotherspecialties. Fortheoverseasmarket,theCompanyhasalwaysbeendevelopingthemarket,accumulatingthetalentandtechnologyandimprovingtheadaptivecapacityofoverseastandardsandthelocalprojectmanagementabilitycontinuouslyformanyyears. Forthedomesticbusiness,accumulatesexperienceinaspectsoftheprojectbidding,financingwaysandoperationmanagementandformsitsuniqueoperationways. （IV）FinancingSituation Duringthereportingperiod,thecompany'sfinancingstructurewasreasonableanditbettersupportedthecompany'sbusinessdevelopment.Thefinancingduringthereportingperiodisasfollows: InRMB No FinancingChannel December31, Financingcostrange Structure 2018 1 Bankloans 2,758,060,500 3.15%-8.1% Within1year 228,632,300 3.25%-5.75% 1-2years 19,995,100 6.75% 2-3years Subtotal 3,006,688,000 2 Trustfinancing 558,770,000 7%-9.77% Within1year 1,200,000,000 6.65%-11% 1-2years 300,000,000 6.30% 2-3years Subtotal 2,058,770,000 3 Bondfinancing 200,000,000 5.96%-6.2% 1-2years 145,000,000 6.20% 2-3years Subtotal 345,000,000 4 Notes 75,257,400 0-10% Within1year Total 5,485,715,400 (V)QualityControlSystem Qualityisthelifeofengineeringconstructioncompanies.Qualityisthebestdisplayandpromotionoftheimageofconstructioncompanies.Thecompanyhasalwaysattachedgreatimportancetoprojectqualitymanagement,hasadedicatedQC(QualityControl)department,andisfullyresponsibleforthemanagementofthecompany'sconstructionprojects,formingasetofeffectiveandmaturequalitycontrolprocessesandsystems.Qualitycontrolmeasureshavebeencontinuouslyoptimizedtocoverallaspectsandoperateefficiently;qualitymanagementisscientificandstandardized.Duringthereportingperiod,thecompanydidnothavemajorprojectqualityproblems. (VI)SafetyProductionOperation Thecompanyhasfirmlyestablishedtheguidingprincipleof"safetyfirst,preventionfirst",attachesgreatimportancetosafetyproduction,carefullyorganizessafetyeducationandtraining,adherestothesafetyredline,strictlyimplementsthesafetyproductionresponsibilitysystem,andconductsin-depthsafetyinspectionsandhiddentroubleinvestigations,enhancessafetyprecautions,andcreatesasafe,harmonious,standardizedconstructionenvironment,andconstantlyimprovesthelevelofprecisionmanagementofsafetyproduction.Duringthereportingperiod,thecompanydidnothavemajorsafetyissues,allworkwascarriedoutinanorderlymanner,andtheconstructionwassafeandstable. 3.Majoraccountingdataandfinancialindicators （1）Majoraccountingdataandfinancialindicatorsforthelastthreeyears MaytheCompanymakeretroactiveadjustmentorrestatementoftheaccountingdataofthepreviousyears □Yes√No InRMB 2018 2017 Changedoverlastyear 2016 （％） Operatingrevenue 2,426,987,687.02 6,497,124,980.52 -62.65% 4,664,999,117.17 Netprofitattributabletothe shareholdersofthelistedcompany -1,704,739,736.40 380,090,990.82 -548.51% 473,661,862.67 （Yuan） Netprofitafterdeductingof non-recurringgain/lossattributable -1,411,440,495.34 377,087,197.69 -474.30% 470,274,602.37 totheshareholdersoflisted company（Yuan） Netcashflowgeneratedby 827,879,055.45 -1,781,868,618.65 -146.46% -1,687,875,813.94 businessoperation,net（Yuan） Basicearningper -1.004 0.220 -560.45% 0.28 share(Yuan/Share) Dilutedgainsper -1.004 0.220 -560.45% 0.28 share(Yuan/Share)(Yuan/Share) Netassetearningratio（%） -142.85% 19.35% -162.20% 31.18% Endof2018 Endof Changedoverlastyear Endof2016 2017 （％） Grossassets 9,603,455,934.89 11,667,845,186.30 -17.69% 7,986,178,961.63 Netassetsattributableto 235,202,473.51 2,151,482,467.52 -89.07% 1,777,948,117.49 shareholdersofthelistedcompany (2)MainFinancialIndexbyQuarters InRMB Firstquarter Secondquarter Thirdquarter Fourthquarter Operatingincome 923,442,740.92 663,528,834.32 672,083,613.81 167,932,497.97 Netprofitattributabletothe 218,523,628.75 -74,524,173.03 -118,516,821.76 -1,730,222,370.36 shareholdersofthelistedcompany Netprofitafterdeductingof non-recurringgain/lossattributable 56,977,615.63 -65,023,592.77 -144,157,168.17 -1,284,719,983.99 totheshareholdersoflisted company NetCashflowgeneratedby 809,676,459.22 288,487,906.41 189,148,952.32 -459,434,262.50 businessoperation Whethersignificantvariancesexistbetweentheabovefinancialindexortheindexwithitssumandthefinancialindexofthequarterlyreportaswellassemi-annualreportindexdisclosedbytheCompany. □Yes√No 4.Sharecapitalandshareholders （1）NumberofholdersofordinarysharesandpreferenceshareswithrestoredvotingrightandTop10shareholders Inshares Total Totalnumber shareholders at Thetotalnumber Total ofcommon ofpreferredshar preferredsharehold shareholdersat 77,544theendofthe 78,961eholdersvotingri 0ersattheendofthe 0 theendofthe monthfromthe ghtsrestoredatp monthfromthedate reporting eriod-end ofdisclosingthe period dateofdisclosing annualreport theannualreport ShareholdingsofTop10shareholders Shareholders Numberof Numberorshare Natureof Proportionof sharesheld pledged/frozen shareholdersharesheld（%） atperiod Amountofrestrictedsharesheld -end Stateofshare Amount Domestic Pledge 583,454,462 ChenLue Natural 34.36%145,863,639 437,590,917Freeze 583,454,556 person STYLE-SUCCForeign 5.47%92,970,910 0 ESSLIMITEDlegalperson Domestic UnionHoldingsNon- 5.18%87,935,921 0 Co.,Ltd. State-owned legalperson Domestic HeFeiyan Natural 3.23%54,800,458 0Freeze 54,800,458 person JiutaiFund－ Bankof Communication s－Jiutai HuitongNo.2 Other 2.40%40,696,772 0 specific customerasset management plan RichCrown Foreign InvestmentCo.,legalperson 1.37%23,235,313 0 Ltd. QinghaiHeyi Domestic Industry Non- 0.79%13,357,084 0Pledge 13,357,084 Development State-owned Co.,Ltd. legalperson Domestic HuangHuaian Natural 0.72%12,300,000 0 person Domestic ZhangXubao Natural 0.34% 5,852,820 0 person Domestic ChenLihong Natural 0.28% 4,775,760 0 person ThelargestshareholderofMr.ChenLueandtheFourthlargestshareholderofMs.HeFeiyan Explanationonassociated aforesaidarepersonsactinginconcerted;Thecontrollingshareholderoftheabove-mentionedthird relationshipamongthe shareholderShenzhenUnionHoldingsCo.,Ltd.AndSixthshareholderRichCrownInvestmentCo., aforesaidshareholders Ltd..IsUnionDevelopmentGroupLtd.;Itisunknownwhetherthereisrelationshipbetweenother shareholdersandwhethertheyarepersonstakingconcertedactionspecifiedintheRegulationson DisclosureofInformationaboutChangeinShareholdingofShareholdersofListedCompanies. Notestotheshareholders involvedinfinancing Notapplicable securities(ifany) (2)TotalpreferenceshareholdersandthesharesheldbytheTop10Preferenceshareholders □Applicable□Notapplicable TheCompanyhadnoshareholderswithpreferredstockheldinthereporting. (3)BlockdiagramoftheownershipandcontrolrelationsbetweentheCompanyandtheactualcontroller 5.Corporationbonds Whetherthecompanyhascorporatebondsthathavebeenpubliclyissuedandlistedonthestockexchange,andnotyetdueorduebutnotfollycashedontheapprovaldateofannualreport No III.DiscussionandAnalysisoftheManagement 1.BusinessOperationsummaryinthereportingperiod Whetherthecompanyneedstocomplywiththedisclosurerequirementsoftheparticularindustry Referencedisclosure CivilEngineeringConstruction 2018isanextremelydifficultyearforthecompany,withtheglobaleconomicsituationincreasinglycomplicated,internationaltradeprotectionontherise,growthrateofforeignengineeringcontractingindustrysloweddownandcompetitionintensified.Duetothenationalcapitalmanagementpolicyatthebeginningof2018andtheenvironmentalimpactofdeleveraging,thecompanywassubjectedtoloanrecoverywithdifferentdegreessuchasloanwithdrawalandloancut,resultingintheliquiditydifficultiesofthecompany'soperatingfundsandtriggeringaseriesofchainreactionsofoperatingdifficulties.Overduerepaymentappearedinthefinancingofthecompany,itssubsidiariesandbanksandotherfinancialinstitutions.Majoraccounts,someassetsandsharesofsubsidiarieswerefrozenbyoverduefinancialinstitutionsinprelitigationpreservation,furthercausingsomeemployeesofthecompanytodefaultontheirwages,somesupplierstodefaultontheirdebts,andbiddingfornewprojectswasalsogreatlyaffected.Thecompany'soperatingincomehasbeengreatlyreduced,andtheannualoperatingresultsin2018showlossesforthefirsttime.In2018,thecompanyrealizedoperationincomeofRMB2.431billion,adecreaseof62.58%fromthelastyear;realizedtheoperatingprofitsofRMB-1.48billion,adecreaseof391.32%fromthelastyear;andthenetprofitattributabletotheparentcompanywasRMB-1.736billion,adecreaseof556.66%fromthelastyear. Intermsofengineeringconstruction,thecompanyovercamedifficultiesandobstacles,rootedintheexistingbusinessareaandscale,andcontinuedtosteadilyexpanditsbusiness.Duringthereportingperiod,thecompanyfaceddifficultiesbothdomesticallyandabroad.Intermsofforeignbusiness,thecompanyundertookthetraditionalconstructionbusiness-CambodiaMekongRiverVillaProject;Meanwhile,itactivelyparticipatedininvestmentandfinancing,development,constructionandoperationprojects,andjointlydevelopsDongpoxiComprehensiveParkinLaoswithinternationalengineeringcompanies;Inaddition,ItcompletedanddeliveredtheresidentialandcommercialbuildingsofthestockprojectNAGAPhaseIIIntegratedentertainmentinCambodiaandtheCambodiaHaoliDiamondProject,andmaintainedthenormaloperationofthestockprojectsin Cambodia,Russia,SriLanka,Malaysia,AlgeriaandMyanmarregions.Intermsofdomesticbusiness,thecompanyhassuccessfullyconnectedwithstrategicprojectssuchasChengduRennanSquareProject,FutureNewWorldProject,XinhuiHiltonHotelandVillaProject.Meanwhile,itactivelyexpandsitsmajorclientsandreachesstrategiccooperationintentionswithwell-knownrealestatedevelopersandinvestmentcompanies,whichareexpectedtosignhigh-valuebusinesscontractswiththecompanyin2019. Themedicalandhealthindustryisanimportantpillarinthecompany'stransformationanddevelopmentstrategy.Duetotheinfluenceoftheadjustmentofnationalfinancialpolicies,thecompanyactivelyexpandedthetraditionalconstructionbusinessofinfrastructure,utilizedexistingresources,andstrengthenedhorizontalintegration.ItisexpectedthatsomebreakthroughswillbemadeinMedicalengineeringandprotontherapyprojectsinthefuture. Insmarthousingsector,itwilllocatethetrendandaccuratelypositionit,andcomprehensivelypushforwardtheimplementationofstrategicdevelopmentgoals.Inrecentyears,theChinesegovernmenthassuccessivelyissuedrelevantpoliciestovigorouslypromotethetransformationoftheconstructionindustrytoconstructionindustrialization.Thecompanyhassetupa"SinoGreatWallIntelligenceResidentialCo,Ltd."inZhanjiang,Guangdong,toproducefabricatedsupportingproducts.Duringthereportingperiod,theconstructionofthebase'sfactorybuildingframeworkwasbasicallycompleted.Duetothefinancialenvironment,theproductionlinehasnotyetbeenestablishedandputintoproduction.Meanwhile,thecompanypromotedtheruralassemblybusinessandmadeapreliminarylayoutinkeyregionsofthecountry. Facedwiththefinancialdifficulties,thecompanyhasmadeconcertedeffortsfromtoptobottomtoconquerthedifficulties.Ithassuccessivelycarriedoutaseriesofreformsandinnovationsinenterprisemanagementmode,timelyinvestigatedandre-electedboardmembers,integratedtheseniormanagementteam,re-organizedthebusinesssectors,definedtheresponsibilityassessment,strengthenedtheassetpreservation,comprehensivelyoptimizedcontrolandothermeasurestoeffectivelystimulateenterprisedevelopmentpotentialinadversity. 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(%) EPC 1,853,545,312.441,854,176,312.80 -0.03% -56.57% -38.80% -29.05% Decorationwork 430,784,976.15 494,437,274.02 -14.78% -78.62% -70.55% -31.47% OnArea 2,284,330,288.592,348,613,586.82 -2.81% -63.64% -50.12% -27.88% Overseas 1,725,531,194.491,817,363,558.28 -5.32% -53.99% -40.14% -24.36% Domestic 701,456,492.53 632,137,076.59 9.88% -74.47% -65.84% -22.76% 4.Seasonalorcyclicaloperationsrequiringspecialattention □Yes √No 5.Materialdifferenceofrevenue,operatingcostsornetprofitattributabletoholdersofordinarysharesoftheCompanyforthereportingperiodfromthelastreportingperiod √Applicable□Notapplicable Duetothenationalcapitalmanagementpolicyatthebeginningof2018andtheenvironmentalimpactof deleveraging,thecompanywassubjectedtoloanrecoverywithdifferentdegreessuchasloanwithdrawaland loancut,resultingintheliquiditydifficultiesofthecompany'soperatingfundsandtriggeringaseriesofchain reactionsofoperatingdifficulties.Overduerepaymentappearedinthefinancingofthecompany,itssubsidiariesandbanksandotherfinancialinstitutions.Majoraccounts,someassetsandsharesofsubsidiarieswerefrozenbyoverduefinancialinstitutionsinprelitigationpreservation,furthercausingsomeemployeesofthecompanyto defaultontheirwages,somesupplierstodefaultontheirdebts,andbiddingfornewprojectswasalsogreatly affected.Thecompany'soperatingincomehasbeengreatlyreduced,andtheannualoperatingresultsin2018 showlossesforthefirsttime. 6.Suspensionintradingordelisting □Applicable√Notapplicable 7.Eventsrelatingtothefinancialreport (1)Reasonforchangesinaccountingpolicies,accountingestimatesandaccountingmethodsascomparedtothefinancialreportfortheprioryear √Applicable□Notapplicable TheformatoffinancialstatementsofgeneralenterpriseshasbeenrevisedinaccordancewiththeprovisionsofNoticeonRevisionandIssueof2018FormatofFinancialStatementsforGeneralEnterprises(CK[2018]No.15)issuedbytheMinistryofFinance. (2)Reasonforretrospectiverestatementtocorrectmajoraccountingerrorsduringthereportingperiod □Applicable √ Notapplicable NomajoraccountingerrorswithinreportingperiodthatneedsretrospectiverestatementfortheCompanyintheperiod. (3)Reasonforchangesinscopeoftheconsolidatedfinancialstatementsascomparedtothefinancialreportfortheprioryear √Applicable□Notapplicable Duringthereportingperiod,thechangesinthescopeofconsolidatedstatementsaredetailedinthenotestothe financialreports.