StockCode:200986                  StockName:HuaxinPackaging-B                  AnnouncementNo.2019-012
          FOSHANHUAXINPACKAGINGCO.,LTD.

            ANNUALREPORT2018(SUMMARY)

PartIImportantNotes
ThisSummaryisbasedonthefulltextofthe2018AnnualReportofFoshanHuaxinPackagingCo.,Ltd.(togetherwithitsconsolidatedsubsidiaries,the“Company”,exceptwherethecontextotherwiserequires).InorderforafullunderstandingoftheCompany’soperatingresults,financialpositionandfuturedevelopmentplans,investorsshouldcarefullyreadtheaforesaidfulltext,whichhasbeendisclosedtogetherwiththisSummaryonthemediadesignatedbytheChinaSecuritiesRegulatoryCommission(the“CSRC”).
Objectionsraisedbyanyofthedirectors,supervisorsorseniormanagementagainstanycontentsinthisReportoritssummary:

            Name                        Officetitle                  Objectionandexplanationofwhy

Statementofobjection:
Exceptforthefollowingdirectors,alltheotherdirectorsattendedinpersontheBoardmeetingforthereviewofthisReportanditssummary.

          Name                  Officetitle          Reasonfornotattendingthe  Proxyentrustedtoattendthe
                                                          meetinginperson                meeting

ZhangWenjing              IndependentDirector        Forthereasonofwork        LiJun

Independentauditor’smodifiedopinion:
□Applicable√Notapplicable
Board-approvedfinalcashand/orstockdividendplanforordinaryshareholders:
□Applicable√Notapplicable
TheCompanyhasnofinaldividendplan,eitherintheformofcashorstock.
Board-approvedfinalcashand/orstockdividendplanforpreferredshareholders:
□Applicable√Notapplicable
ThisReportanditssummaryhavebeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionsshallprevail.
PartIIKeyCorporateInformation
1.StockProfile

Stockname                      HuaxinPackaging-B      Stockcode              200986


Stockexchangeforstocklisting      ShenzhenStockExchange

        Contactinformation                    BoardSecretary                    SecuritiesRepresentative

Name                          DingGuoqiang                        ShiHui

                                2/F,Block7,3KeyangRoad,LuogePark,  2/F,Block7,3KeyangRoad,LuogePark,

Address                        ChanchengEconomicDevelopmentZone,  ChanchengEconomicDevelopmentZone,

                                NanzhuangTown,ChanchengDistrict,    NanzhuangTown,ChanchengDistrict,

                                Foshan,GuangdongProvince,P.R.China    Foshan,GuangdongProvince,P.R.China

Fax                            0756-8666922                        0756-8666922

Tel.                            0756-8666975                        0756-8666978

Emailaddress                    dinggq@htrh-paper.com                shih@htrh-paper.com

2.PrincipalActivitiesorProductsintheReportingPeriod
TheCompanyspecializesintheR&D,productionandsalesofhigh-endcoatedivoryboard,chemicalsforpapermakingandcolorprintingproducts.Thebusinessesaredescribedasfollows:
A.High-endcoatedivoryboard
TheivoryboardisaproductoftheCompany’smainbusiness,asacategoryofivoryboard,iswidelyappliedinvariousfieldssuchascigarettepackaging,foodpackaging,medicinepackaging,cosmeticpackagingandlivingsuppliespackaging,whichisanimportantsourceoftheCompany'smajorbusinessincome.TheR&D,productionandsalesoftheivoryboardismainlyundertakenbyZhuhaiHongtaRenhengPackagingCo.,Ltd.andZhuhaiHuafengPaperCo.,Ltd.HongtaRenhengisthecorehigh-endpackagingboardplatformunderHuaxinPackagingwhichisbasedindomesticandoverseashigh-endpackagingmarketsofcigaretteandfoodandprovides"personalized"productsandservicesforcustomerswith"differentiation"businessstrategy.TheCompanynowhasthreecoatedivoryboardproductionlines,andtheannualproductioncapacityaround600,000tons.TheCompany'sproductscanbedividedintothefollowingcategories:
a.Coatedivoryboardforcigarettepackagingofcompany’sdominantproduct,iswidelyusedinthehigh-endcigarettepackagingmarket.ThecoatedivoryboardforcigarettepackagingproducedbyHongtaRenhengtakesupadominantpositioninthedomesticcigarettepackagingfield.ItrepresentsthehighestlevelofcoatedivoryboardqualityinChina.IthaswonaGoldenAwardatChina’sInternationalPaper&PaperProductBrandsExhibition,andthetopawardoftheChinesescienceandtechnologycommunity―thefirst-classStateScienceandTechnologyAdvancementAward.Theanti-counterfeitcoatedivoryboardwithcolorfiberandtrue-colorfiberetc.―atechnologythatisindependentlydevelopedbytheCompanyandhasbeengrantedthenationalinventionpatentofChina―hasbeensuccessfullyappliedinthepackagingofaseriesofcigarettesinthe“HongtaGroup”and“HongyunHongheGroup"brandstocombatcounterfeitingfromthepackagingmaterials,reachingthesignificantanti-counterfeitresultsof“easilyidentifiablebutdifficulttocopy”.Currently,anewtypeofivoryboardforcigarettepackagingisatthestageoftrialproduction.
b.TheivoryboardsforliquidfoodpackagingisanimportantdevelopmentdirectionoftheCompany.HongtaRenhengisthefirsttobreaktheforeigntechnologicalmonopoly,byindependentlydevelopingthesterilepaperforpackagingofliquidmilk,fruitjuice,herbalteaandotherdrinks,effectivelysubstitutingimportedproducts.Theseriesoffoodpackagingproductssuchasanti-oilfoodgradecoatedboardandhigh-endpapercuphavebeenrecognizedbywell-knowncateringgroupssuchasMcDonald’saftertheyareputintothemarket.
c.Thehigh-endcommercialivoryboardpapersaimtomeetthepersonalizeddemandsofcustomers.Theyarewidelyappliedinthe
segmentedpackagingmarketfieldslikethehigh-endmedicine,cosmetics,anddailynecessities.Theanti-counterfeitcoatedivorypaperwithpersonalizedidentificationcodeindependentlydevelopedbytheCompanyandforwhichithasbeengrantedtheinventionpatenthasbeensuccessfullyappliedintheanti-counterfeitpackagingofthehigh-endproductslikehigh-endmedicineandcosmetics,whichdoesnotonlysolvethedifficultiesposedbyimpactfromcounterfeitandshoddyproductsforcustomersatthesource,butalsoeffectivelyreducesthecustomer’santi-counterfeitcostsandfakeproductcrackdownexpansesandwinhightrustfromthemarket.B.Papermakingbusiness
Chemicalsforpapermakingisbusinesstoextendthepaper-makingindustrychainbytheCompany,theR&D,productionandsalesofwhicharemainlyundertakenbyZhuhaiJinjiChemicalCo.,Ltd.,asubsidiaryoftheCompany,whichmainlysuppliesthecarboxylicbutadiene-styrenelatex,styrene-acryliclatexandcalciumcarbonateofdomesticallyfirst-classquality.
C.Colorprintingbusiness
ColorprintingbusinessisanimportantindustriallinkagesupportingbusinessoftheCompany,whichcoversdesigningandmanufacturingpackagingmaterialsandprovidingpackagingsolutionsforcustomers.ThisbusinessismainlyundertakenbyHuaxin(Foshan)ColorPrintingCo.,Ltd..TheCompanynowownstheoffset,flexoandintaglioprintingworkshop.Mainproductsincludecolorboxes,variouslabels(paperlabel,in-moldlabelandsticker),barcodeprinting,brochure,booksandperiodicalsinvolvedinwideterminalconsumptionindustry.
3.KeyFinancialInformation
(1)KeyFinancialInformationofthePastThreeYears
Indicatebytickmarkwhetherthereisanyretrospectivelyrestateddatuminthetablebelow.
□Yes√No

                                                                                                  Unit:RMB
                                    2018              2017          2018-over-2017          2016

                                                                        change(%)

Operatingrevenue(RMB)            3,683,004,543.50    3,583,157,646.37              2.79%    3,607,758,904.01
Netprofitattributabletothelisted        -2,814,965.92        18,637,865.97          -115.10%      61,324,088.11
company’sshareholders(RMB)
Netprofitattributabletothelisted

company’s  shareholders  before      -36,089,244.17        12,337,519.04          -392.52%      27,820,866.82
exceptionalitems(RMB)

Netcashgeneratedfrom/usedin      393,465,394.72      -21,910,921.08          1,895.75%    409,111,111.08
operatingactivities(RMB)

Basic  earnings  per  share              -0.01                0.04          -125.00%              0.12
(RMB/share)

Diluted  earnings  per  share              -0.01                0.04          -125.00%              0.12
(RMB/share)

Weightedaveragereturnonequity            -0.14%              0.94%Downby1.08percen            3.13%
(%)                                                                          tagepoints

                                                                        Changeof31

                              31December2018    31December2017  December2018over  31December2016
                                                                    31December2017(%)

Totalassets(RMB)                  5,794,694,744.15    5,426,368,352.69              6.79%    6,182,737,808.93
Equityattributabletothelisted    1,970,946,820.29    1,982,859,436.21            -0.60%    1,980,395,170.24
company’sshareholders(RMB)
(2)KeyFinancialInformationbyQuarter

                                                                                                  Unit:RMB
                                    Q1                Q2                Q3                Q4

Operatingrevenue                    791,489,361.74      955,666,979.18      966,386,108.12      969,462,094.46
Netprofitattributabletothelisted      -10,204,661.39        -5,095,101.40        5,007,777.78        7,477,019.09
company’sshareholders
Netprofitattributabletothelisted

company’s  shareholders  before      -11,700,027.27        -7,503,716.60        4,637,788.37      -21,523,288.67
exceptionalitems

Netcashgeneratedfrom/usedin      25,982,578.72      42,810,407.39      316,624,480.08        8,047,928.53
operatingactivities
IndicatebytickmarkwhetheranyofthequarterlyfinancialdatainthetableaboveortheirsummationsdiffersmateriallyfromwhathavebeendisclosedintheCompany’squarterlyorinterimreports.
□Yes√No
4.ShareCapitalandShareholderInformationatthePeriod-End
(1)NumbersofOrdinaryShareholdersandPreferredShareholderswithResumedVotingRightsaswellasHoldingsofTop10Shareholders

                                                                                                  Unit:share
                                                      Number            Numberofpreferred

                      Numberofordinary            of                shareholders  with

Numberof            shareholders  at  the            preferred          resumed    voting

ordinary        13,422month-endpriortothe      13,367sharehold        0rights    at    the            0
shareholder            disclosure  of  this            ers  with          month-endpriorto

s                    Report                          resumed            thedisclosureofthis

                                                      voting              Report

                                                      rights

                                            Top10shareholders

  Nameof      Natureof    ShareholdingTotalshares                                Sharesinpledgeorfrozen
  shareholder    shareholder    percentage  heldatthe        Privatesharesheld          Status      Shares

                                        period-end

FOSHAN

HUAXIN      State-owned          65.20%329,512,030                  329,512,030

DEVELOPMElegalperson
NTCO.,LTD.
GUOTAI

JUNAN      Foreignlegal

SECURITIES(person              0.63%  3,192,453                            0

HONGKONG)
LIMITED

WU          Foreignnatural        0.51%  2,561,991                            0

HAOYUAN  person

CAIYUJIU    Domestic            0.31%  1,570,000                            0

              naturalperson

MIUJUN    Domestic            0.30%  1,522,800                            0

              naturalperson

NORGES    Foreignlegal          0.27%  1,352,720                            0


BANK        person

ESSENCE
INTERNATIO

NAL        Foreignlegal

SECURITIES  person              0.24%  1,205,252                            0

(HONG
KONG)CO.,
LTD.
FOSHAN
CHANBEN  State-owned

DEASSET    legalperson          0.23%  1,139,420                    1,111,959

MANAGEMEN
TCO.,LTD

KGIASIA    Foreignlegal          0.22%  1,111,959                            0

LIMITED    person

PENG        Domestic            0.21%  1,053,239                            0

RUIHUA      naturalperson

Related  or  acting-in-concertItisunknownwhetherthereisamongtheaboveshareholdersanyrelatedoracting-in-concertpartiesamongtheshareholderspartyasdefinedintheAdministrativeMeasuresfortheAcquisitionofListedCompanies.
above

Shareholders    involved    inNone

securitiesmargintrading(ifany)
(2)NumberofPreferredShareholdersandShareholdingsofTop10ofThem
□Applicable√Notapplicable
NopreferredshareholdersintheReportingPeriod.

(3)OwnershipandControlRelationsbetweentheActualControllerandtheCompany
5.CorporateBonds
DoestheCompanyhaveanycorporatebondspubliclyofferedonthestockexchange,whichwereoutstandingbeforethedateofthisReport’sapprovalorwereduebutcouldnotberedeemedinfull?
No.
PartIIIOperatingPerformanceDiscussionandAnalysis
1.BusinessOverviewoftheReportingPeriod
IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries?
No.
A.MarketEnvironment
In2018,affectedbyChina-UStradeconflictsandexchangeratefluctuations,macroeconomicindexfellandthepackagingandpaper-makingindustriesthatarehighlyassociatedwithmacroeconomywereimpactedatdifferentdegrees.Themarketenddemands
showedgreatdecreaseandthesupplysidecontinuedthetrendof2017withnewincreasesinsteadofanydecreasein2018.Thecapacitythatcouldbeplacedinmarketincreased,whilethewholeindustrywitnessedoversupply.ASAResult,thepaper-makingindustrytookonanoveralltrendofnarrowedprofitmargins.
B.CompanyPerformanceduringtheReportingPeriod
In2018,basedonthecoreconceptsof“fournews”and“strictness,practicality,transparencyandrapidness”,theCompanystucktothree“consistencies”,aimedat“fivenewforces”,sought“fourbreakthroughs”andcenteredaround“threedecreases,oneincreaseandonecontrol”tokeepstrengtheningpartybuilding,strivetoexplorestrategicreforms,proactivelyexpandexternalmarkets,fullyenhancetheinternalmanagementlevel,continuetorefinetheinstitutionalreform,increaseR&Dinvestmentandseektheincreaseofoperatingprofits.
ThecompetitionwasfiercewithunbalancedsupplyanddemanddevelopmentintheivoryboardindustryinwhichtheCompanyisengagedandrelatedindustries.Theproductionandoperationoftheivoryboardsegmentwerebasicallystable.Inthewholeyear,theproductionreached513,000tons,whichwasanincreaseof15%fromthepreviousyear;thesalesvolumereached483,000tons,anincreaseof2.2%fromthepreviousyear;andthepriceroseby6.63%fromthepreviousyear,whichwasanincreaseagainstthetrend.Inrespectofthecostend,affectedbythepersistentlyhighpriceofrawwoodpulp,productioncostsincreasedsubstantially,resultinginbigYOYdecreaseintheprofitsofthepapersegmentandcausinglosses.Intermsoftheprintingsegment,thetotaloperatingrevenueandprofitsincreasedby15%and561%respectivelyfromthepreviousyearaSAResultofproactiveattractiontoexternalqualityresourcesanddiversificationoftheindustrialchain.Inthechemicalindustry,latexsalesvolumeincreasedby3%fromthepreviousyearandrevenueroseby2%fromthepreviousyearduetopersistentoptimizationofproductiontechniques,andtheoperatingbudgetgoalestablishedatthebeginningoftheyearwasachieved.Despitethegoodperformanceoftheprintingandchemicalsegments,thewhole-yearbudgetgoalwasnotachievedbytheCompanyasawholeduetothelossesinthepapersegment.For2018,theCompanyrecordedoperatingrevenueofRMB3,683million,anetprofitattributabletothelistedcompany’sshareholdersofRMB-2.81million,andnetcashgeneratedfromoperatingactivitiesofRMB393.47million.Asat31December2018,totalassetsstoodatRMB5,794.69millionandequityattributabletothelistedcompany’sshareholdersofRMB1,970.95million.
C.ManagementMeasuresTakenwithintheReportingPeriod
a.Reformtheorganizationstructureandoptimizeremunerationdistributionandtalentpromotionmechanism
Aimedat“reducinghierarchies,groupingfunctionsandflatteningmanagement”,theCompanyadjusteditsinternalorganizationstructuretoservethepurposeofmatchingstaffabilitieswithpositionrequirementsandestablishedaperformance-basedpositionperformanceandremunerationsystem.ThereformontheCompany’sexistingremunerationsystemwascarriedoutinaccordancewiththemotivatingdistributionprincipleof“focusingonperformance,awardingdiligenceandpunishinglaziness;encouragingcreationandincreasingprofits”.Thecareerpromotionchannelwasestablishedandacomprehensivereviewonthetechnical,skilledandmanagementprofessionalsateachhierarchywouldbeconductedinproportionannuallytoguidestafftobeconcernedwiththeimprovementintheirskillsandabilities,effectivelymotivateandstabilizethestaffteamandservethefuturestrategicdevelopmentoftheCompany.
b.Reformthemarketingsystemandinspirethesalespotential
Inaccordancewiththethinkingof“neweraandnewmarketing”,theCompanycarriedoutanall-roundreformonitsmarketingsystemtohighlightthecorefunctionofmarketing.Abrandnewperformanceappraisalsystemwasimplementedtoinspirestaffto
developneworders;anewmechanismofbottomout,awardingdiligenceandpunishinglazinesswasestablishedtokeepimprovingcorporatecompetitiveness.
c.Practicetheconceptof“fournewness”andstrictlycontrolperiodcosts
Centeringaroundtheconceptof“fournewness”of“newmeasuresforreforms,newmethodsformanagement,newthinkingforoperationsandnewmechanismsforactivation”,theCompanyimplementedtheoutsourcingofwarehousingandlogisticsinitsfactoryareatosaveandreducelogisticscoststhroughaprofessionalwarehousingandlogisticsoutsourcingservicemode.TheCompanyexpandedfinancingchannelsandfinancingmodestoincreasethefundutilizationefficiencyandcontroltheriskofexchangeratefluctuations,resultinginanobviousYOYdecreaseinfinancialcosts.
d.Persistintechnology-orientationandintensifythecreationofprofitsthroughR&D
TheCompanyadjustedtheorganizationoftheTechnicalR&DDepartmenttomakethefunctionofnewproductdevelopmentandthefunctionofroutineprocessmaintenancerunindependently.Itpersistedinthegoaloftechnology-orientation,intensifiedthecorefunctionoftechnicalR&Dandmotivatedthevitalityofinnovationandprofitscreation.Sofartherehavebeenmorethantentypesofnewproductprojectsbeingdeveloped,withbreakthroughsmadeinsomeproducts.
2.SignificantChangetoPrincipalActivitiesintheReportingPeriod
□Yes  √No
3.ProductCategoryContributingover10%ofPrincipalBusinessRevenueorProfit
√Applicable  □Notapplicable

                                                                                                  Unit:RMB
                  Operating                    Grossprofit    YoYchangein  YoYchangein  YoYchangein
Productcategory    revenue    Operatingprofit    margin    operatingrevenueoperatingprofit    grossprofit

                                                                  (%)            (%)        margin(%)

Ivoryboard      2,948,225,373.27149,605,735.68          5.07%          5.72%        -57.08%        -7.43%
Presswork        300,249,287.80  66,689,633.12          22.21%        17.48%        80.41%          7.75%
Latex            340,511,671.17  82,087,112.39          24.11%        -0.87%        52.93%          8.48%
4.BusinessSeasonalitytowhichSpecialAttentionshouldBePaid
□Yes  √No
5.SignificantYoYChangesinOperatingRevenue,CostofSalesandNetProfitAttributabletotheListedCompany’sOrdinaryShareholdersorTheirCompositions
□Applicable  √Notapplicable
6.PossibilityofListingSuspensionorTermination
□Applicable  √Notapplicable

7.MattersRelatedtoFinancialReporting
(1)YoYChangestoAccountingPolicies,AccountingEstimatesorMeasurementMethods
√Applicable  □Notapplicable
1)TheCompanyprepared2018FinancialStatementsinaccordancewiththeNotesoftheMinistryofFinanceonRevisingandPrintingtheFormatof2018GeneralEnterprisesFinancialStatement(CK[2018]No.15)andtheinterpretationofitandtherequirementsoftheAccountingStandardsforEnterprises.Retroactiveadjustmentwasadoptedforthechangesintheaccountingpolicy.Thesignificantlyaffecteditemsandamountsin2017FinancialStatementSAReasfollows:

  Itemandamountinoriginalfinancialstatement    Itemandamountinnewfinancialstatement

Notesreceivable                  430,699,664.45Notesandaccounts      1,160,829,887.51

Accountsreceivable              730,130,223.06

                                            receivable

Interestreceivable                    141,388.09Otherreceivables          20,249,531.23

Otherreceivables                  20,108,143.14

Notespayable                      8,530,196.41Notesandaccounts        349,777,358.80

Accountspayable                341,247,162.39payable

Interestpayable                    7,865,380.83Otherpayables            50,811,351.70

Dividendspayable                  12,116,789.76

Otherpayables                    30,829,181.11

Administrativeexpense            125,476,808.28Administrative          120,342,343.74

                                            expense

                                            R&Dexpense              5,134,464.54

Cashgeneratedfromother          66,763,328.29Cashgeneratedfrom      81,627,128.29

operatingactivities[Note]                        other    operating

                                            activities

Cashgeneratedfromother          735,773,715.83Cashgeneratedfrom      720,909,915.83

investingactivities[Note]                      other    investing

                                            activities

[Note]:thepresentationofactuallyreceivedGovernmentsubsidyofRMB14,863,800.00relatedtoassetsincashflowstatementshallbeadjustedfrom“cashgeneratedfromotherinvestingactivities”to“cashgeneratedfromotheroperatingactivities”.
2)TheMinistryofFinancein2017announcedtheInterpretationtotheAccountingStandardsforEnterprisesNo.9-RegardingtheAccountingTreatmentofNetInvestmentLossesundertheEquityMethod,InterpretationtotheAccountingStandardsforEnterprisesNo.10-RegardingtheDepreciationMethodBasedontheUseofIncomesGeneratedfromFixedAssets,InterpretationtotheAccountingStandardsforEnterprisesNo.11-RegardingtheAmortizationMethodBasedontheUseofIncomesGeneratedfromIntangibleAssetsandInterpretationtotheAccountingStandardsforEnterprisesNo.12-RegardingWhethertheProviderandtheReceiverofKeyManagementPersonnelServiceAreRelatedParties.TheCompanyhasimplementedtheaforementionedinterpretationstotheaccountingstandardsforenterprisessince1January2018andtheimplementationdoesnothaveanyeffectontheopeningfinancialdataoftheCompany.
(2)RetrospectiveRestatementsduetoCorrectionofMaterialAccountingErrorsintheReportingPeriod□Applicable  √Notapplicable

Nosuchcases.
(3)YoYChangestotheScopeofConsolidatedFinancialStatements
√Applicable  □Notapplicable
KunshanFocaiPackaging&PrintingCo.,Ltd.hasbeenliquidatedandde-registeredduringtheReportingPeriod,andhasthusno
longerbeenincludedintheconsolidatedfinancialstatements.