UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of April 2018

Commission File Number: 001-14550

 

 

China Eastern Airlines Corporation Limited

(Translation of Registrant’s name into English)

 

 

Board Secretariat’s Office

5/F, Block A2, Northern District, CEA Building

36 Hongxiang 3rd Road, Minhang District

Shanghai, China 200335

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: ☒    Form 20-F  ☐    Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:    ☐  Yes    ☒  No

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  n/a

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

				China Eastern Airlines Corporation Limited
						(Registrant)
Date		April 27, 2018		By		/s/ Wang Jian
				Name:		Wang Jian
				Title:		Company Secretary

 

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Certain statements contained in this announcement may be regarded as “forward-looking statements” within the meaning of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The forward-looking statements included in this announcement represent the Company’s views as of the date of this announcement. While the Company anticipates that subsequent events and developments may cause the Company’s views to change, the Company specifically disclaims any obligation to update these forward-looking statements, unless required by applicable laws. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this announcement.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

 

				(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock code: 00670)

2018 FIRST QUARTERLY REPORT

 

 

1.	IMPORTANT NOTICE

This announcement is made by China Eastern Airlines Corporation Limited (the “Company”) pursuant to the disclosure requirement under Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) (which requires any issuer listed on The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) whose securities are also listed on other stock exchange(s) to simultaneously inform the Hong Kong Stock Exchange of any information released to any of such other exchange(s) and to ensure that such information is released to the market in Hong Kong at the same time as it is released to the other market(s)). At the request of the Shanghai Stock Exchange, a similar announcement of the even date is being made simultaneously by the Company in Shanghai pursuant to the relevant provisions of the Shanghai listing rules and regulations.

This quarterly report was prepared in accordance with the regulations as prescribed by the China Securities Regulatory Commission in relation to disclosure of information in quarterly reports for listed companies, and is published simultaneously in Shanghai and Hong Kong. The financial statements of the Company for the first quarter of 2018 were not audited, and were prepared in accordance with the China Accounting Standards for Business Enterprises.

The board of directors (the “Board”) and the supervisory committee of the Company, and its directors, supervisors and senior management hereby confirm that the information set out in this quarterly report does not contain false information, misleading statement or material omission, and accept joint and several responsibility for the correctness, accuracy and completeness of the information set out in this quarterly report.

 

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All directors of the Company attended the meeting of the Board to consider this quarterly report.

Liu Shaoyong, the person-in-charge of the Company, Ma Xulun, the officer-in-charge of accounting of the Company, and Wu Yongliang, the officer-in-charge of the accounting department (accounting officer) of the Company hereby confirm that the financial statements forming part of this quarterly report are true, accurate and complete.

During the first quarter of 2018, the Company achieved outstanding operating results. Net profit excluding non-recurring profit and loss attributable to shareholders of the listed company increased by 62.41% from last year, and net cash flows from operating activities increased by 147.13% from last year.

The financial statements in the first quarterly report of the Company are unaudited.

Pursuant to the notices regarding the “Accounting Standards for Business Enterprises No. 14 — Revenue”, “Accounting Standards for Business Enterprises No. 22 — Recognition and Measurement of Financial Instrument”, “Accounting Standards for Business Enterprises No. 23 — Transfer of Financial Assets”, “Accounting Standards for Business Enterprises No. 24 — Hedge Accounting” and “Accounting Standards for Business Enterprises No. 37 — Presentation and Reporting of Financial Instrument” amended and published by the Ministry of Finance of the People’s Republic of China, the Company began to apply those amended Accounting Standards for Business Enterprises from 1 January 2018 onwards. The Company adjusted the opening balance of retained earnings in 2018 and increased the opening balance of undistributed profits for the period amounted to RMB352 million for the cumulative effect of initial application of such standards.

 

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2.	MAIN FINANCIAL DATA AND CHANGES IN SHAREHOLDERS OF THE COMPANY

 

2.1

Main financial data

 

Unit: million Currency: RMB

Increase/decrease

as at the end

of the reporting

As at the

period compared

end of the

As at the end

with the end

reporting period

of last year

of last year

(%)

Total assets

227,472

227,464

0.00

Net assets attributable to shareholders of the listed company

55,383

53,106

4.29

From the

From the

Increase/

beginning of the

beginning of last

decrease

year to the end

year to the end

compared

of the reporting

of the reporting

with the same

period

period last year

period last year

(%)

Net cash flows from operating activities

6,376

2,580

147. 13

From the

From the

Increase/

beginning of the

beginning of last

decrease

year to the end

year to the end

compared

of the reporting

of the reporting

with the same

period

period last year

period last year

(%)

Revenue

26,753

24,536

9.04

Net profit attributable to shareholders of the listed company

1,983

2,818

-29.63

Net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss

1,897

1,168

62.41

Decreased by

Weighted average return on net assets (%)

3.64

5.79

2.15 pts

Basic earnings per share (RMB/share)

0.1371

0.1948

-29.63

Diluted earnings per share (RMB/share)

0.1371

0.1948

-29.63

 

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Non-recurring profit and loss and relevant amounts

 

		Unit: million Currency: RMB
		Amount for
Item		the period
Gains or losses from disposal of non-current assets			2
Non-operating incomes and expenses other than the above			117
Effect on minority interests (net of tax)			(3	)
Effect on income tax			(30	)
Total			86

 

 

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2.2	The total number of the Company’s shareholders and the shareholding of the 10 largest shareholders and the shareholding of the 10 largest holders of listed shares (or holders of shares without trading moratorium) as at the end of the reporting period

 

		Unit: Shares
Total number of shareholders			228,532

 

Shareholding of the 10 largest shareholders
										Number of shares with				Pledged or locked-up
Name of shareholder (in full)		Shareholdings as at the end of the period				Proportion				trading moratorium held				Status of shares				Number of shares				Nature of shareholders
						(%)
China Eastern Air Holding Company Limited (中國東方航空集團有限公司)			5,072,922,927				35.06				0				Nil				0				State-owned legal person
HKSCC NOMINEES LIMITED			4,183,499,289				28.92				0				Unknown Note				—				Overseas legal person
China Securities Finance Corporation Limited (中國證券金融股份有限公司)			513,064,959				3.55				0				Nil				0				State-owned legal person
China National Aviation Fuel Holding Company (中國航空油料集團公司)			504,767,895				3.49				0				Nil				0				State-owned legal person
Delta Air Lines, Inc.			465,910,000				3.22				0				Nil				0				Overseas legal person
Shanghai Licheng Information Technology Consulting Co., Ltd. (上海勵程信息技術諮詢有限公司)			465,838,509				3.22				0				Pledged				465,838,509				Domestic nonstate-owned legal person
CES Finance Holding Co., Ltd. (東航金控有限責任公司)			457,317,073				3.16				0				Nil				0				State-owned legal person
China COSCO Shipping Corporation Limited (中國遠洋海運集團有限公司)			232,919,254				1.61				0				Nil				0				State-owned legal person
Central Huijin Asset Management Ltd. (中央匯金資產管理有限責任公司)			70,984,100				0.49				0				Nil				0				State-owned legal person
China Construction Bank Corporation —Boshi Industry Mixed Securities Investment Fund (LOF) (中國建設銀行股份有限公司 —博時主題行業混合型證券投資基金 (LOF))			70,000,000				0.48				0				Nil				0				Unknown

 

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Shareholding of the 10 largest holders of shares without trading moratorium
Name of shareholder		Number of listed shares without trading moratorium held				Class and number of shares
						Class				Number
China Eastern Air Holding Company Limited (中國東方航空集團有限公司)			5,072,922,927				RMB ordinary shares				5,072,922,927
HKSCC NOMINEES LIMITED			4,183,499,289				Overseas listed foreign shares				4,183,499,289
China Securities Finance Corporation Limited (中國證券金融股份有限公司)			513,064,959				RMB ordinary shares				513,064,959
China National Aviation Fuel Holding Company (中國航空油料集團公司)			504,767,895				RMB ordinary shares				504,767,895
Delta Air Lines, Inc.			465,910,000				Overseas listed foreign shares				465,910,000
Shanghai Licheng Information Technology Consulting Co., Limited (上海勵程信息技術諮詢有限公司)			465,838,509				RMB ordinary shares				465,838,509
CES Finance Holding Co., Ltd. (東航金控有限責任公司)			457,317,073				RMB ordinary shares				457,317,073
China COSCO Shipping Corporation Limited (中國遠洋海運集團有限公司)			232,919,254				RMB ordinary shares				232,919,254
Central Huijin Asset Management Ltd. (中央匯金資產管理有限責任公司)			70,984,100				RMB ordinary shares				70,984,100
China Construction Bank Corporation —Boshi Industry Mixed Securities Investment Fund (LOF) (中國建設銀行股份有限公司 —博時主題行業混合型證券投資基金 (LOF))			70,000,000				RMB ordinary shares				70,000,000

 

Description of connected relationship or activities in concert among the above shareholders		Among the 4,183,499,289 shares held by HKSCC NOMINEES LIMITED, 2,626,240,000 shares are held by CES Global Holdings (Hong Kong) Limited (“CES Global”) in the capacity of beneficial owner; China Eastern Air Holding Company Limited (“CEA Holding”) owns 100% equity interest in CES Finance Holding Co., Ltd (“CES Finance”); CES Finance owns 100% equity interest in CES Global; thus, CEA Holding indirectly owns 100% equity interests in CES Global. The Company is not aware of any other connected relationship or activities in concert among the 10 largest holders of shares without trading moratorium.

 

Note:

As of 20 March 2018, 260,000,000 H shares of the Company pledged to The Hong Kong and Shanghai Banking Corporation Limited by CES Global, a shareholder of the Company, had been released. As at the date of this announcement, CES Global has pledged a total of 1,450,000,000 H shares of the Company. For details, please refer to the announcement of the Company published on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange on 20 March 2018.

 

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3.	IMPORTANT MATTERS

 

3.1

Details of and reasons for the substantial changes in main items of financial statements and financial indicators of the Company

During the first quarter of 2018, the Company achieved passenger traffic volume amounted to 48.336 billion passenger-kilometres, representing an increase of 9.08% from last year; and served 28.7161 million travelers, representing an increase of 7.7% from last year; and achieved passenger load factor of 81.69%, basically remained the same as last year.

During the first quarter of 2018, the Company achieved outstanding operating results. Operating income amounted to RMB26,753 million, total profits amounted to RMB2,766 million and net profit attributable to shareholders of parent company amounted to RMB1,983 million. During the first quarter of 2018, the Company achieved net profit excluding non-recurring profit and loss attributable to shareholders of the listed company amounted to RMB1,897 million, representing an increase of 62.41% from last year.

During the first quarter of 2018, the Company’s net profit attributable to shareholders of the listed company reduced by 29.63% from last year, which was mainly due to one-off gain amounted to RMB1,754 million from the disposal of certain business and assets of the Company during the first quarter of 2017.

 

		Change
		compared
		to the end
Item		of last year		Reason for the Change
Monetary capital		-38.12%		Primarily due to the enhancement of the capital turnover efficiency during the reporting period and the decrease in the fund held as compared to the end of last year
Trade receivables		-34.32%		Primarily due to the decrease in the estimated notes receivables to be received from the clearing centre
Prepayments		60.86%		Primarily due to the increase in advance payment for meals on aircraft made by the Company

 

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		Change
		compared
		to the end
Item		of last year		Reason for the Change
Non-current assets classified as held for sale		-100.00%
Deferred income tax assets		54.10%		Primarily due to the completion of the disposal of Shanghai Airlines Travel Hotel and Investment Management Co. Ltd. by the Company during the
Non-current liabilities classified as held for sale		-100.00%		reporting period
Hedge Instruments		61.11%		Primarily due to the decrease in the fair value of the foreign exchange forward contracts held by the Company during the reporting period
Bill payables		-74.08%		Primarily due to the payment of commercial bills of exchange to certain suppliers by the Company during the reporting period
Other current liabilities		-70.00%		Primarily due to the repayment of super short-term commercial paper during the reporting period
Long-term borrowings		54.83%		Primarily due to the Company’s new RMB- denominated long-term borrowings during the reporting period
Deferred income tax liabilities		650.00%		Primarily due to the effects incurred on pledged income tax by the adjusted accumulative amount as a result of the amended “Accounting Standard for Business Enterprises No. 14 – Revenue” applicable to the Company
		Change
		compared
Item		to last year		Reason for the Change
Finance costs		-191.72%		Primarily due to the substantial increase in the realization of exchange gains of RMB1,464 million during the reporting period, as compared to exchange gains of RMB188 million last year
Investment income		-96.20%		Primarily due to the disposal of equity interest in Eastern Air Logistics Co., Ltd. (“Eastern Logistics”) by the Company last year, resulting in an investment income of RMB1,754 million

 

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		Change
		compared
Item		to last year		Reason for the Change
Non-operating income		-84.61%		Primarily due to the Company’s reclassification of government grants in relation to its ordinary business and income from jointly-operated routes from “non- operating incomes” to “other income” in the income statement pursuant to the “Accounting Standards for Business Enterprises No. 16 – Government Grant” published by the Ministry of Finance of the People’s Republic of China
Refund of taxes		140.30%		Primarily due to the increase in the tax exemption and tax credit in respect of value-added tax received by the Company during the reporting period
Cash received from disposal of investment		-100.00%		Primarily due to the disposal of equity interest in Eastern Logistics last year by the Company
Cash received from borrowings		-33.94%		Primarily due to the improvement of the debt structure of the Company through financing via channels including issuance of super short- term commercial paper and acquisition of bank borrowings last year

 

3.2

Analysis of the progress of significant events and their effects and proposed solutions

 

(1)

Establishment of Special Purpose Vehicles and provision of guarantee

On 19 January 2018, in order to successfully change the operating leases of the existing 67 aircraft from overseas leasing to domestic leasing, the 2018 11th ordinary meeting of the eighth session of the Board considered and approved to invest in and establish not more than 67 special purpose vehicles in Dongjiang Free Trade Port Zone of Tianjin and to provide them guarantees with an aggregate amount of not more than RMB9.8 billion meeting. The matter regarding the guarantees was considered and approved at the 2018 first extraordinary general meeting of the Company held on 8 February 2018. For details, please refer to the announcements of the Company published on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange on 19 January and 8 February 2018.

 

(2)

Issuance of JPY-denominated credit enhanced bonds

On 2 February 2018, the application for the listing of bonds denominated in Japanese Yen of the Company was approved by Tokyo Stock Exchange. On 9 March 2018, the Company issued the JPY-denominated credit enhanced bonds. On 19 March 2018, the Company listed the JPY-denominated credit enhanced bonds. For details, please refer to the announcements of the Company published on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange on 2 February, 9 March and 19 March 2018.

 

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(3)

Resignation of director and election of employee representative director

On 6 February 2018, Mr. Xu Zhao has resigned from his position as a director and a member of the Audit and Risk Management Committee of the Company. On 8 February 2018, Mr. Yuan Jun was elected as an employee representative director of the Company at the sixth session of the Company’s fourth general meeting of the employee representatives. On 29 March 2018, the Board has appointed Mr. Cai Hongping as a member of the eighth session of the Audit and Risk Management Committee of the Board. For details, please refer to the announcements of the Company published on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange on 6 February, 8 February and 29 March 2018.

 

(4)

Contractual operation of the bellyhold space

On 1 March 2018, the Company entered into contractual operation agreement and operation cost agreement (“Bellyhold Space Agreements”) with China Cargo Airlines Co., Limited (“China Cargo Airlines”). The Company will let China Cargo Airlines operate the bellyhold space business as a long-term contractor. The Company will receive contractual fees and revenue of the contractual operation from China Cargo Airlines, and reimburse the operation cost to China Cargo Airlines. On 29 March 2018, the 2018 first extraordinary general meeting of the Company considered and passed the resolution regarding the Bellyhold Space Agreements and the transactions contemplated thereunder as well as the resolution regarding the transactions under contractual operation of the Company’s bellyhold space and the annual caps for daily connected transactions from 2018 to 2019. For details, please refer to the announcements of the Company published on the website of the Shanghai Stock Exchange on 1 March and 29 March 2018 and on the website of Hong Kong Stock Exchange on 1 March, 12 March 2018 and 29 March 2018.

 

(5)

2017 profit distribution proposal

On 29 March 2018, the 2017 profit distribution proposal of the Company was considered and approved during the 2018 second regular meeting of the eighth session of the Board. The Company proposed to distribute cash dividends amounted to approximately RMB740.25 million for the year 2017. With the total share capital of the Company being 14,467,585,682 shares, cash dividends distributed per share amounted to RMB0.051 (tax inclusive) and shall be paid to holders of A shares of the Company in Renminbi and holders of H shares of the Company in Hong Kong Dollars. The proposal shall be submitted to the 2017 annual general meeting (“AGM”) of the Company for consideration and approval. For details, please refer to the announcements of the Company published on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange on 29 March 2018.

 

(6)

Amendment of certain provisions of the Articles of Association

On 29 March 2018, the resolution regarding the “amendments to certain provisions of the articles of association” was considered and approved during the 2018 second regular meeting of the eighth session of the Board. The above resolution shall be submitted to the 2017 AGM of the Company for consideration and approval. For details, please refer to the announcement of the Company published on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange on 29 March 2018.

 

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3.3

The status of implementation of the matters undertaken by the Company and shareholders holding more than 5% interests

 

Whether the

undertaking

has been

Whether

strictly

Time and

there is an

implemented

Background of

Type of

Undertaking

term of

implementation

in a timely

undertaking

undertaking

party

Content of undertaking

undertaking

period

manner

Other undertaking

Trading moratorium of shares

CEA Holding/CES Finance

CEA Holding and CES Finance undertook that they will not dispose of the 241,547,927 A shares and 457,317,073 A shares held by each of them, within 24 months from the lifting of the trading moratorium on 18 April 2016.

Time of undertaking: April 2016; term of undertaking: from 18 April 2016 to 17 April 2018

Yes

Completed

 

3.4

Warning of and reasons for any expected accumulated losses from the beginning of the year to the end of the following reporting period or substantial changes in profitability compared to the same period last year

Not applicable

By order of the Board

CHINA EASTERN AIRLINES CORPORATION LIMITED

Liu Shaoyong

Chairman

Shanghai, the People’s Republic of China 26 April 2018

As at the date of this announcement, the directors of the Company include Liu Shaoyong (Chairman), Ma Xulun (Vice Chairman, President), Li Yangmin (Director, Vice President), Gu Jiadan (Director), Tang Bing (Director, Vice President), Tian Liuwen (Director, Vice President), Yuan Jun (Employee representative Director), Li Ruoshan (Independent non-executive Director), Ma Weihua (Independent non-executive Director), Shao Ruiqing (Independent non-executive Director) and Cai Hongping (Independent non-executive Director).

 

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4.	APPENDICES

 

4.1

Financial Statements

China Eastern Airlines Corporation Limited

Consolidated and Company’s Balance Sheet as at 31 March 2018

 

 

14

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4.1

Financial Statements (Cont’d)

China Eastern Airlines Corporation Limited

Consolidated and Company’s Balance Sheet as at 31 March 2018 (Cont’d)

 

 

15

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4.1

Financial Statements (Cont’d)

China Eastern Airlines Corporation Limited

Consolidated and Company’s Balance Sheet as at 31 March 2018 (Cont’d)

 

The financial statements are signed by:

Person-in-charge of the Company: Liu Shaoyong

Officer-in-charge of accounting: Ma Xulun

Officer-in-charge of the accounting department: Wu Yongliang

 

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4.1

Financial Statements (Cont’d)

China Eastern Airlines Corporation Limited

Consolidated and Company’s Income Statement for the Period from January to March 2018 (Cont’d)

 

 

17

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4.1

Financial Statements (Cont’d)

China Eastern Airlines Corporation Limited

Consolidated and Company’s Income Statement for the Period from January to March 2018 (Cont’d)

 

 

18

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4.1

Financial Statements (Cont’d)

China Eastern Airlines Corporation Limited

Consolidated and Company’s Cash Flow Statement for the Period from January to March 2018

 

 

19

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4.1

Financial Statements (Cont’d)

China Eastern Airlines Corporation Limited

Consolidated and Company’s Cash Flow Statement for the Period from January to March 2018 (Cont’d)

 

 

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4.1

Financial Statements (Cont’d)

China Eastern Airlines Corporation Limited

Consolidated and Company’s Cash Flow Statement for the Period from January to March 2018 (Cont’d)

 

 

21