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*ST东海B:2017年半年度报告(英文版)2017-08-19  

						司公限有份股心中游旅海东大南海                                         2017   文全告报度年半年
 Stock Code: 000613, 200613         Short Form of the Stock: *ST Donghai-A, *ST Donghai-B




     海南大东海旅游中心股份有限公司
   Hainan Dadonghai              Tourism Centre (Holdings) Co., Ltd.




                 Semi-Annual Report 2017
                       (Full-text)




                      Disclosure Date: 19August 2017




                                           1
司公限有份股心中游旅海东大南海                                               2017   文全告报度年半年

            Section I. Important Notice, Contents and Paraphrase




Important Notice:

Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as the
Company) hereby confirm that there are no any fictitious statements, misleading statements, or
important omissions carried in this report, and shall take all responsibilities, individual and/or
joint, for the reality, accuracy and completion of the whole contents.
Li Yuanbin, Principal of the Company, Fu Zongren, person in charger of accounting works and
Fu Zongren, person in charge of accounting organ (accounting principal) hereby confirm that
the Financial Report of 2017 Semi-Annual Report is authentic, accurate and complete.
All directors are attending the Board Meeting for Report deliberation.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of
common reserves either.
Concerning the forward-looking statements with future planning involved in the Report, they
do not constitute a substantial commitment for investors. Investors are advised to exercise
caution of investment risks.




                                              2
      司公限有份股心中游旅海东大南海                                                                             2017   文全告报度年半年
                                                               Content

Section I Important Notice adn Paraphrase..........................................................................................3

Section II Company Profile and Main Finnaical Indexes ....................................................................4

Section III Summary of Company Business ........................................................................................6

Section IV Discussion and Analysis of Operation ...............................................................................7

Section V Important Events ............................................................................................................... 11

Section VI Changes in shares and particular about shareholders ......................................................18

Section VII Preferred Stock ...............................................................................................................22

Section VIII Particulars about Directors, Supervisors and Senior Executives ..................................22

Section IX Corporate Bonds ............................................................................................................22

Section X Financial Report ................................................................................................................23

Section XI Documents available for reference ................................................................................74




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       司公限有份股心中游旅海东大南海                                                        2017   文全告报度年半年
                                           Paraphrase

                         Items              Refers to                             Contents
CSRC                                        Refers to   China Securities Regulation Commission
SSE                                         Refers to   Shenzhen Stock Exchange

Company Law                                 Refers to   Company Law of The People’s Republic of China

Securities Law                              Refers to   Securities Law of The People’s Republic of China

Company/the Company                         Refers to   Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.

                                                        Article of Association of Hainan Dadonghai Tourism Centre
Article of Association                      Refers to
                                                        (Holdings) Co., Ltd.

                                                        Shareholders’ General Meeting of Hainan Dadonghai Tourism
Shareholders’ General Meeting              Refers to
                                                        Centre (Holdings) Co., Ltd.

                                                        Board of directors of Hainan Dadonghai Tourism Centre
BOD                                         Refers to
                                                        (Holdings) Co., Ltd.

                                                        Supervisory Committee of Hainan Dadonghai Tourism Centre
Supervisory Committee                       Refers to
                                                        (Holdings) Co., Ltd.

Yuan                                        Refers to   RMB/CNY




                                          Risk Warning
Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) are the
media for information disclosure appointed by the Company for year of 2017, all information under
the name of the Company disclosed on the above said media shall prevail.
The report is prepared in bilingual versions of Chinese and English respectively, in the event of any
discrepancy in understanding the two aforementioned versions, the Chinese version shall prevail.
Investors are advised to exercise caution of investment risks.




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       司公限有份股心中游旅海东大南海                                                                    2017   文全告报度年半年

               Section II Company Profile and Main Finnaical Indexes

I. Company profile

Short form of the stock           *ST Donghai-A , *ST Donghai-B         Stock code                   000613, 200613

Short form of the Stock after
                                  N/A
changed (if applicable)

Stock exchange for listing        Shenzhen Stock Exchange

Name of the Company (in
Chinese)
                                  司公限有份股心中游旅海东大南海
Short form of the Company
(in Chinese)
                                  海东大
Foreign name of the Company
                                  Hainan Dadonghai Tourism Centre (Holdings) Co.,Ltd
(if applicable)

Foreign name of the Company
                                  DADONGHAI
in short (if applicable)

Legal representative              Li Yuanbin


II. Person/Way to contact

                                                       Secretary of the Board                    Rep. of security affairs

Name                                           Wang Hongjuan

Contact add.                                   Dadonghai Sanya

Tel.                                           0898-88219921

Fax.                                           0898-88214998

E-mail                                         hnddhhn@21cn.com


III. Others

1. Way of contact

Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
√Applicable      □ Not applicable

Registrations add.                                 Dadonghai Sanya

Code for the registration address                  572021




                                                                  5
        司公限有份股心中游旅海东大南海                                                                      2017   文全告报度年半年
Office address                                      Dadonghai Sanya

Code for the office address                         572021

Website                                             ——

E-mail                                              hnddhhn@21cn.com

Inquiry date of the notice disclosed on appointed
                                                    ——
website


2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not
□ Applicable     √ Not applicable

The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2016.


IV. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data
□Yes    √ No

                                                                                                            Increase/decrease in this
                                                     Current period            Same period of last year
                                                                                                                   report y-o-y

Operating revenue (RMB)                                      15,096,273.42                12,062,797.60                           25.15%

Net profit attributable to shareholders of
                                                              1,719,253.80                    172,122.52                          898.85%
the listed company(RMB)

Net profit attributable to shareholders of
the     listed   company    after     deducting               1,719,253.80                     94,716.52                     1,715.16%
non-recurring gains and losses(RMB)

Net cash flow arising from operating
                                                              3,231,073.10                  1,453,697.44                          122.27%
activities(RMB)

Basic earnings per share (RMB/Share)                                  0.0047                      0.0005                          840.00%

Diluted earnings per share (RMB/Share)                                0.0047                      0.0005                          840.00%

Weighted average ROE (%)                                              2.29%                       0.22%                            2.07%

                                                                                                            Increase/decrease in this
                                                  End of current period           End of last period       report-end over that of last
                                                                                                                   period-end

Total assets (RMB)                                           96,200,796.86               105,444,153.63                            -8.77%

Net assets attributable to shareholder of
                                                             75,995,669.24                74,276,415.44                            2.31%
listed company(RMB)


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      司公限有份股心中游旅海东大南海                                                                       2017   文全告报度年半年
V. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.


2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.


VI. Items and amounts of extraordinary profit (gains)/loss

□Applicable   √Not applicable
The Company has no extraordinary profit(gains) in the period




                          Section III Summary of Company Business

I. Main businesses of the company in the reporting period

Whether the company needs to comply with the disclosure requirements of the particular industry
No
The company's main business is hotel accommodation and catering services. Procurement of goods is mainly the
goods and materials necessary for hotel and catering operations by taking the principle of low price and fine
quality, some goods are purchased by directly signing purchase contracts with suppliers, and some good are
purchased by procurement agents. The selling is mainly based on internet marketing and supplemented by the
individual travelers of non-internet marketing and business and the tourists from travel agencies. The hotel is
located at the central zone of Dadonghai scenic spot in Sanya City, Hainan Province, and it has become a member
of the nationwide famous hotels because of the convenient transportation, beautiful environment, long history, and
rich culture. However, in recent years, the local high-, middle- and low-grade hotels or guesthouses numerously
emerge, resulting in the supply much larger than the market demand, the industry competition is rather fierce, and
the pressure of decline in business remains.




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      司公限有份股心中游旅海东大南海                                                                    2017   文全告报度年半年
II. Major changes in main assets

1. Major changes in main assets


               Major assets                                               Note of major changes


                                         Increased 980,000Yuan over that of year-beginning, mainly because the villa in Building
Construction in process
                                         C and swimming pool are in renovation and reformation during the reporting period

                                         Decreased 17.1 million Yuan over that of year-beginning, mainly because debt
Monetary fund                            investment 9 million Yuan paid and contact account 10 million Yuan with Luoniushan
                                         Group Co., Ltd.

                                         Decreased 350,000 Yuan over that of year-beginning, mainly because business from
Account receivable
                                         those units settled by month declined

                                         Increased 140,000 Yuan over that of year-beginning, mainly because the personal
Other account receivable
                                         account ready for settlement increased

                                         Decreased 290,000 Yuan over that of year-beginning, mainly because the long-term
Non-current assets due within one year
                                         amortization expenses due within one year was amortized by month after re-listed

                                         Increased 9.14 million Yuan over that of year-beginning, mainly because debt investment
Other current assets
                                         increased 9 million Yuan


2. Main overseas assets

□ Applicable √ Not applicable




III. Core Competitiveness Analysis

Whether or not the Company complies with disclosure requirement of the special industry
No

The company takes hotel accommodation and catering services as the principle works, locates at Dadonghai bay
which is one of the China “Top 40 scenery” and the only AAAA scenic spot open for free in Sanya and has the
maximum passenger flow volume in Sanya City, and is about a 5-minute drive from downtown of Sanya City and
about a 30-munite drive from Sanya Phoenix Airport. The hotel is only tens of meters distant from the sea level,
possesses beautiful landscaping full of blooming flowers all the year round, and enjoys exceptional geography,
natural environmental advantages. The hotel has opened for more than two decades which is one of the oldest
hotels in Sanya and has received many domestic and foreign heads of state and national leaders. In the recent
years, the company has comprehensively upgraded and rebuilt the hotel’s software and hardware facilities, further
improved the hotel's internal and external business environment, and effectively enhanced the business
competitiveness. Currently, the management of the company’s hotel is still in the front rank among hotels in the
same area, with the same scale, and at the same level.
In the future work, the company will keep trying to improve the hotel’s internal and external business
environment, strengthen the sales efforts and the staff construction, and further improve the operational capability.

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     司公限有份股心中游旅海东大南海                                                            2017   文全告报度年半年
During the reporting period, the company's core competence had no significant change.




                  Section IV Discussion and Analysis of Operation

1. Introduction

During the reporting period, the Company realized main business income of 15,096,300 Yuan, increased by
3,033,500 Yuan compared with the same period last year, an increase of 25.15%; operating profit earns
17,190,000 Yuan, increased by 1,547,100 Yuan compared with the same period last year, an increase of 898.85%;
net profit earns 1,719,300 Yuan, increased by 1,547,100 Yuan compared with the same period last year, an
increase of 898.85%.



During the reporting period, the Company keep innovating in new market development and use marketing
strategy in a flexible way to expoile the sales channel, acquiring a large number of guest source from Russian by
making use of the favorable geographical advantage. Moreover, we put more effors in renovation and reforming
of the equipment and facilities, strengthing skill training for the employees in order to improve the product quality.
Strictly controlling the cost management, perfect the Company’s internal control system in order to earns and less
expenditure costs, we completed the operation targets that formulated at beginning of the year basically. Main
works are as:


1. Actively expand market, broaden marketing channels, and flexibly utilize marketing strategy to strive for a
large number of Russian customers.
During the reporting period, the company continued to increase the sales efforts of network marketing channels,
strengthen the cooperation with the domestic leading travel network companies, such as Ctrip, Qunar, Tuniu,
Alitrip, Asiatravel, CFHC Tmall, etc., and make the best of network channels and e-commerce platforms to
expand network marketing. Take advantage of hotel location, and flexibly utilize the marketing strategies to
cooperate with Russian tourist suppliers including Haolide International Travel Agency, Anex Tour, Youyi
International Travel Agency, etc. to win a large number of Russian customers. During the reporting period, the
company achieved main business income of RMB 15,096,300, an increase of RMB 3,033,500 compared with the
same period last year, and rate of increase was 25.15%.
2. Continue to increase the investment in the renovation of hotel facilities and strengthen the training of service
skills so as to improve the quality of hotel products and enhance the product competitiveness.
     During the reporting period, in the face of the constantly emerging new hotels, the company continued to
increase investment, decorated and renovated the hotel's C building, villas and swimming pools in the off season,
and optimized the hotel's landscape. Based on the “people first” operation principle, strengthen the business
service skills training, at the same time, continue to enrich the staff’s cultural life, create the harmonious working
environment, and enhance the corporate culture construction. Re-newing the equipment and facilities, improve

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        司公限有份股心中游旅海东大南海                                                                         2017   文全告报度年半年
service skill traning for strengthening the quality of the hotel products and market competitiveness.


3. Strictly curb the costs and budget management, improve internal control mechanism, increase revenue and
reduce expenditures, safety in production


During the reporting period, the company took business expansion as the guiding and financial management as the
operating service, strengthened the procurement cost control management and budget management, achieved the
diversification of procurement cost enquiry channels through network price query and hotel industry price
inquiries and other measures, shopped around for super quality and competitive price, and scientifically controlled
the operating costs; strictly and reasonably controlled various costs and expenditures, diligently checked up and
made repairs, and resolutely put an end to various wasting of resources, effectively improved the procurement cost
rationality and income cost-effectiveness. At the same time, the company continued to improve the internal
control system, strengthen the internal control work norms and implementation, intensify the effective
implementation of internal controls, increase revenue and reduce expenditure, and implement safety production so
as to effectively improve the operating efficiency, ensure the safety of operation, and achieve the maximization of
corporate benefits.


In 2017, the Company continue to consolidate and expand sales channels, improve the hotel’s quality and service
standards, enhance the comprehensive competitveness, to laying out a solid foundation for sustained, stable and
healthy development of the Company.




II. Main business analysis

See the “I-Introduction” in “Discussion and Analysis of Operation”
Change of main financial data on a y-o-y basis
                                                                                                                                 In RMB

                                                        Same period of          Y-o-y
                                     Current period                                                        Reasons for changes
                                                           last year       increase/decrease

                                                                                                More revenue from guest houses and
Operation revenue                     15,096,273.42       12,062,797.60               25.15%
                                                                                                catering

Operation cost                          5,256,112.51       4,460,023.31               17.85% Increase of the operation business

Sales    expenses                       2,458,144.93       2,099,035.74               17.11% Increase of the remuneration

                                                                                                Increase of the remuneration and
Administrative expenses                 5,089,450.57       4,989,443.77                 2.00%
                                                                                                promotion costs

                                                                                                Income from savings interests
Financial cost                           -180,672.66        -204,752.54               11.76%
                                                                                                decreased

Income tax expenses                                            57,374.17            -100.00% The losses from previous year are not


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      司公限有份股心中游旅海东大南海                                                                            2017   文全告报度年半年
                                                                                                  reckoned for income tax expenses

Net cash flow arising from
                                         3,231,073.10       1,453,697.44                122.27% Increase of gross margin
operation activities

Net cash flow arising from                                                                        Increase of the investment for
                                     -10,333,145.20         -9,410,799.00                -9.80%
investment activities                                                                             transformation & renovation

Net cash flow arising from                                                                        The contact account paid to
                                     -10,000,000.00
financing activities                                                                              Luoniushan Group

                                                                                                  The contact account paid to
Net increase of cash and cash
                                     -17,102,072.10         -7,957,101.56              -114.93% Luoniushan Group and amount from
equivalent
                                                                                                  transformation & renovation

Major changes on profit composition or profit resources in reporting period
□Applicable     √Not applicable
No changes on profit composition or profit resources in reporting period
Constitution of main business
                                                                                                                                   In RMB
                                                                                   Increase or      Increase or      Increase or
                                                                                   decrease of     decrease of    decrease of gross
                        Operating
                                          Operating cost     Gross profit ratio operating revenue operating cost   profit ratio over
                         revenue
                                                                                over same period over same period same period of
                                                                                   of last year     of last year      last year
According to industries

Tourism &
                        15,096,273.42        5,256,112.51              65.18%              25.15%             17.85%               3.42%
catering

According to products

Room revenue            11,676,662.38        4,079,275.81              65.06%              19.01%              11.21%              3.91%

Catering and
entertainment             1,841,782.51        939,586.67               48.98%              79.74%             69.38%               6.81%
revenue

Rental revenue            1,577,828.53        237,250.03               84.96%              28.66%              -0.01%              5.34%

According to region

Hainan Province         15,096,273.42        5,256,112.51              65.18%              25.15%             17.85%               3.42%


III. Analysis of the non-main business

√Applicable    □ Not applicable
                                                                                                                                   In RMB

                                Amount             Ratio in total profit                  Note                  Whether be sustainable

Non-operation                                                               Refundable holiday road tolls
                                          260.00                  0.02%                                       Lack of sustainability
revenue                                                                     received




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      司公限有份股心中游旅海东大南海                                                                         2017   文全告报度年半年
IV. Assets and liability

1. Major changes of assets composition

                                                                                                                                In RMB

                           Current period-end      Same period-end last year

                                        Ratio in                     Ratio in    Ratio
                                                                                                        Notes of major changes
                           Amount        total        Amount           total    changes

                                         assets                        assets

Monetary fund           10,108,175.91    10.51%     11,825,290.70      11.39%    -0.88%

                                                                                          Business from those units settled by month
Account receivable         337,187.05     0.35%        531,683.28       0.51%    -0.16%
                                                                                          declined

Inventory                  253,215.05     0.26%        235,587.40       0.23%     0.03%

Investment real estate 9,096,265.77       9.46%       9,570,789.33      9.21%     0.25% Accrual of the depreciation and amortization

Fix assets              39,264,470.61    40.82%     41,663,971.17      40.11%     0.71% Depreciation accrual for the fix assets

Construction in                                                                           The renovation and reformation engineering
                           978,211.64     1.02%                                   1.02%
process                                                                                   money paid in advance

Other account
                           316,384.24     0.33%        414,276.84       0.40%    -0.07%
receivable

                                                                                          The taxes paid in advance are re-listed for
Other current assets    11,020,867.76    11.46%       9,000,000.00      8.66%     2.80%
                                                                                          accounting policy changed last year

Financial assets                                                                          Equity transfer of the Sanya Xiangyu E-Business
                                                      4,500,000.00      4.33%    -4.33%
available for sale                                                                        Company

Long-term
amortization             1,071,343.97     1.11%       1,508,750.00      1.45%    -0.34% The balance for amortization declined year by year
expenses


2. Assets and liability measured by fair value

□ Applicable √ Not applicable


3. Assets right restriction till end of reporting period

Nil


V. Investment

1. Overall situation

√Applicable    □ Not applicable



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      司公限有份股心中游旅海东大南海                                                                  2017   文全告报度年半年
    Current investment amount (RMB)              Same period of last year (RMB)                   Changes (+,-)

                                  9,000,000.00                          9,000,000.00                                    0.00%


2. The major equity investment obtained in the reporting period

□ Applicable √ Not applicable


3. The major non-equity investment doing in the reporting period

□ Applicable √ Not applicable


4. Financial assets investment

(1) Securities investment

□ Applicable √ Not applicable
The company had no securities investment in the reporting period.


(2) Derivative investment

□ Applicable √ Not applicable
The Company has no derivatives investment in the Period


VI. Sales of major assets and equity

1. Sales of major assets

□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.


2. Sales of major equity

□ Applicable √ Not applicable


VII. Analysis of main holding company and stock-jointly companies

□ Applicable √ Not applicable
The Company had no information of main holding company and stock-jointly companies disclosed in the reporting period.


VIII. Structured vehicle controlled by the Company

□ Applicable √ Not applicable




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      司公限有份股心中游旅海东大南海                                                                      2017   文全告报度年半年
IX. Prediction of business performance from January – September 2017

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the
warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable


X. Risks and countermeasures

(1) Marco Policy risks
In order to normalize and optimize tourism market or further to promote clear-party construction, related
departments may further issue some relative policies. While these polices may cause restrain and effect on
regional tourism development. Main business income may be affected since we are engaged in tourism service.
Countermeasures: The Company will further to improve the hard and soft equipments and facilities of the hotel
while expanding the business scope, and win more market shares via high-class service and comfortable
environment so as to ensure the main business income level.

(2) Natural disaster risks

In recent years, various natural disasters take place frequently, Hainan Island belongs to oceanic climate, where
has high incidence of disastrous weather in summer. If Sanya becomes the landing place of typhoon, it may cause
great damages to the facilities of the Company and affect the Company’s normal operation.
Countermeasures: The Company will strengthen the construction and maintenance for infrastructure, continue to
buy property insurances, positively adopt effective prevention measures, and improve the ability of resisting
natural disasters.

(3) Risks of HR

Demand for talend in aspect of hotel sales and management are increasingly due to the constantly rise of hotel
industry, flow of hotel talented people comes more widespread and more frenquent, we may face the risks of
development restrained from brain drain.

Countermeasure: we will continue to improved the talent introduction, taining system, incentive mechanism,
remuneration and welfare as well as insurance mechanism, strive to attract talent, cultivate them and retain them.
Meanwhile, strengthen staff quality and skills as well as the manaegment ability, further putting more efforts in
enterprise culture construction, enhance the cohesion in the Company, guarantee a stable of the core managemers
and skill technicians.

(4) Operational risks of main business
With the ceaseless development of global tourist industry constantly and ceaseless rising of high-class,
middle-class and low-class hotels, the tourist sources keep shunting, and the competition of tourism service
industry in Sanya becomes increasingly fierce. While the main business of the Company is just a small-scale hotel,
as the main business is single and the business scope is limited, the tourist market conditions and tourist quantity
directly make significant affects on the company performance.

Countermeasure: made a scientific management and decision-making procedures, strengthen the awarenes of risk
prevention, building and improving relevant mechanism and regulized the management in the Company.
Furthermore, increase the sales ability, on base of the former saels networ, continues to exploit foreign high-end


                                                                14
      司公限有份股心中游旅海东大南海                                                                   2017   文全告报度年半年
tourism market under the superior geographical location and enviornment for highering the occupancy rate.
Besides, we will push forward the material asset reorganization, expanding opertaion projects, enrich the
industrial structure for increasing the profit increasing point.
(5) Suspension risk
Stock of the Company will suspended after the annual report of 2017 released, if the audited net profit for year of
2017 recognized as negative.
Countermeasures: take a variety of measures in order to improve the sustainable ability and strive to avold the
suspension conditions.

                                           Section V. Important Events

I. In the report period, the Company held annual general meeting and extraordinary
shareholders’ general meeting

1. Annual General Meeting in the report period


                                Ratio of
  Session of
                   Type         investor          Date        Date of disclosure               Index of disclosure
   meeting
                              participation

                                                                                   The “Resolution Notice of Annual     General
                                                                                   Meeting of 2016” (No.: 2017-027)
                  Annual
                                                                                   published on Securities Times, Hong Kong
AGM of 2016       general       26.37%        21 April 2017        22 April 2017
                                                                                   Commercial Daily and Juchao website
                 meeting
                                                                                   (http://www.cninfo.com.cn) dated 22 April
                                                                                   2017 respectively

                                                                                   The “Resolution Notice of First
     First                                                                         Extraordinary Shareholders Meeting of
                Extraordina
Extraordinary                                                                      2017” (No.: 2017-038) published on
                    ry
 Shareholders                    9.48%        12 May 2017          13 May 2017     Securities Times, Hong Kong Commercial
                shareholder
  Meeting of                                                                       Daily and Juchao website
                s meeting
     2017                                                                          (http://www.cninfo.com.cn) dated 13 May
                                                                                   2017 respectively

                                                                                   The “Resolution Notice of Second
    Second                                                                         Extraordinary Shareholders Meeting of
                Extraordina
Extraordinary                                                                      2017” (No.: 2017-057) published on
                    ry
 Shareholders                    9.47%        12 July 2017         13 July 2017    Securities Times, Hong Kong Commercial
                shareholder
  Meeting of                                                                       Daily and Juchao website
                s meeting
     2017                                                                          (http://www.cninfo.com.cn) dated 13 July
                                                                                   2017 respectively


2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

□ Applicable   √ Not applicable


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      司公限有份股心中游旅海东大南海                                                                           2017   文全告报度年半年
II. Profit distribution and capitalization of capital reserves in the Period

□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the semi-annual year


III. Commitments completed in Period and those without completed till end of the Period from actual
controller, shareholders, related parties, purchaser and companies

√Applicable    □ Not applicable

                                                   Type of
                                                                                                                     Comm
                                                                                                            Commitme        Implementati
               Commitments                Promise commit                 Content of commitments                      itment
                                                                                                             nt date             on
                                                                                                                      term
                                                    ments

                                                             On May 30, 2007, Luoniushan Co., Ltd.
                                                             made commitments in the Company’s
                                                             "Instructions for reform of non-tradable
                                                             shares" (Revision) and "Instructions for
                                                                                                                              Till end of the
                                                             reform of non-tradable shares" (Abstract of
                                                                                                                              reporting
                                                          revision) that in view of Dadonghai
                                                   Commi                                                                      period, the
                                                   tments Company’s losses in successive years and on
                                          Luonius for                                                                     6   original plans
Commitments for                                           the verge of delisting, in order to reverse the    27 June
                                          han      Share                                                                month of material
Share Merger Reform                                       company's business difficulties, improve            2017
                                          Co., Ltd Merger                                                                 s   assets
                                                          profitability and recover the continuous
                                                   Reform                                                                     reorganizatio
                                                          business capacity, Luoniushan Co., Ltd., the
                                                                                                                              n was
                                                             controlling shareholder of Dadonghai
                                                                                                                              terminated
                                                             Company made commitments to actively
                                                             seek restructuring parties to reorganize the
                                                             assets of Dadonghai Company at the
                                                             appropriate time.

Commitments          in    report    of
acquisition or equity change

Commitments in assets reorganization

Commitments make in initial public
offering or re-financing

Equity incentive commitment

Other commitments for medium and
small shareholders

Completed on time(Y/N)                    Yes

If the commitments is not fulfilled on
time, shall explain the specify reason N/A
and the next work plan


                                                                    16
        司公限有份股心中游旅海东大南海                                                                2017   文全告报度年半年
IV. Engagement and non-reappointment of CPA
Whether the semi-annual report was audited or not

□Yes   √ No
The semi-annual report of the Company had no audited.

VII. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from
the CPA
□ Applicable √ Not applicable


VI. Explanation on “Qualified Opinion” of previous year from the Board

□ Applicable √ Not applicable


VII. Bankruptcy reorganization

□ Applicable √ Not applicable
In reporting period, the Company has no bankruptcy reorganization occurred.


VIII. Lawsuits

Significant lawsuits and arbitrations of the Company
□ Applicable √ Not applicable

The Company has no significant lawsuits and arbitrations in reporting period
Other lawsuits
□ Applicable √ Not applicable


IX. Penalty and rectification

□ Applicable √ Not applicable
The Company has no penalty and rectification in the Period


X. Integrity of the company and its controlling shareholders and actual controllers

□ Applicable √ Not applicable


XI. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives

□ Applicable √ Not applicable
During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives
that have not been implemented.




                                                               17
         司公限有份股心中游旅海东大南海                                                                        2017      文全告报度年半年
XII. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □Not applicable

                                                                                         Whether
                                                                               Trading
                                                       Related                   over the
                          Content                     transacti Proporti limit                     Clearing Availabl            Index
                  Type of                                                        approve                              Date of
                              of    Pricing Related       on     on in approve                     form for e similar             of
 Related Relation related
                           related principl transacti amount similar                d               related           disclosu
  party   ship transacti
                          transacti    e    on price (in 10 transacti d (in 10                     transacti market            disclos
                    on                                                           limited                                 re
                             on                        thousan    ons    thousan                      on      price              ure
                                                      d Yuan)                     or not
                                                                         d Yuan)
                                                                                  (Y/N)
                                                                                                   Same as Same as
           First                                                                                   the        the
Luonius                         Accom
           majority Consum                Market Market                                            transacti transacti
han Co.,                        modatio                      25.23    1.67%          0Y
           sharehol ption                 price    price                                           on with on with
Ltd.                            n
           der                                                                                     non-rela non-rela
                                                                                                   ted party ted party

Total                                        --       --     25.23     --            0       --          --         --       --     --
Detail of sales return with major
                                          N/A
amount involved
Report the actual implementation of
the daily related transactions which
were projected about their total N/A
amount by types during the reporting
period
Reasons for major differences
between trading price and market          Not applicable
reference price


2. Related transactions by assets acquisition and sold

□ Applicable      √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period


3. Related transactions of mutual investment outside

□ Applicable      √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period


4. Contact of related credit and debt

√Applicable       □ Not applicable
There are non-operational contact of related credit and debts in the Company
√ Yes    □No

                                                                 18
       司公限有份股心中游旅海东大南海                                                                              2017   文全告报度年半年
Related party claims receivable: Nil


Debt payable to related parties:

                                                                   The newly     The amount
                                                 Balance of                                                       Current      Balance at
                                                                  added amount of recovery in
                       Related                   period-begin                                                     interest     period-end
       Related                     Resulted                         in Period      Period
                       relation                     (in 10                                      Interest   rate    (in 10        (in 10
        party                        reason                          (in 10        (in 10
                        ship                      thousand                                                        thousand      thousand
                                                                    thousand      thousand
                                                    Yuan)                                                          Yuan)         Yuan)
                                                                     Yuan)         Yuan)

Luoniushan                        Inter-enterp

Group Co.,       Related party rise capital                   0          1,981         1,000
Ltd.                              exchange

Influence on operation result
                                  The related debts have no major influence on operation results of the Company and shows a certain
and financial statue of the
                                  extent positive influence on financial status of the Company
Company from related debts


5. Other material related transactions

□Applicable       √Not applicable
The Company has no other material related transactions in the period


XIII. Non-business capital occupying by controlling shareholders and its related parties

□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period


XIV. Major contract and implantation

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable √ Not applicable
The Company had no trusteeship in the reporting period.


(2) Contract

□ Applicable √ Not applicable
The Company had no contract in the reporting period.




                                                                        19
      司公限有份股心中游旅海东大南海                                                                               2017   文全告报度年半年
(3) Leasing

√Applicable    □Not applicable
Leasing

                                                                                Leasing age
            Items                                    Lessee                                                     Term of lease
                                                                                limit (year)

Restaurant in 1st floor Ma Ming (Hainan Hangpai Food Co.,                            5-year         2016-01-01 to 2020-12-31

of Building B                 Ltd. )

Shooping         mall      of Xu Jipeng                                              3-year         2016-11-15 to 2019-11-14

Building B

Ground floor of the Chen Junwei                                                      3-year         2016-03-01 to 2019-02-28

Building A

Seaside sidewalk snack        Sanya Leda Cantering Management                        5-year         2016-05-01 to 2021-04-30

booth and wooden house        Co., Ltd.

Seaside locker room           Zhong Zhengao                                          3-year         2016-12-01 to 2019-11-30


Items bring over 10% of the total profit in reporting period
√Applicable    □Not applicable

                                        Amount                                            Standard
                                                                              Earnings
                                       for leasing                Date of                     for      Impact on      Related    Related
               Leasing      Assets                    Starting                 (in 10
  Lessor                                 (in 10                  terminatio               earnings        the       transaction relationshi
                 party     leasing                      date                  thousand
                                       thousand                      n                   determinat Company           (Y/N)           p
                                                                               Yuan)
                                         Yuan)                                                ion

               Ma Ming
         (Hainan Restaurant
   The   Hangpai in 1st floor                        2016-01-0 2020-12-3                               Revenue
                                         1,886                                  75.6     Contract                         N     N/A
 Company  Food        of                                 1           1                                 increased
           Co., Building B
          Ltd. )
                Sanya      Seaside
                 Leda      sidewalk
    The        Cantering    snack                    2016-05-0 2021-04-3                               Revenue
                                          566                                   180      Contract                         N     N/A
 Company Manageme booth and                              1           0                                 increased
                nt Co.,    wooden
                 Ltd.       house

                Zhong      Seaside                   2016-12-0 2019-11-3                               Revenue
     v                                     10                                   36       Contract                         N     N/A
               Zhengao      locker                       1           0                                 increased


                                                                     20
       司公限有份股心中游旅海东大南海                                                                     2017   文全告报度年半年
                            room


2. Major guarantee

□ Applicable √ Not applicable
The Company had no major guarantee in the reporting period.


3. Other material contracts
□ Applicable √ Not applicable
The Company had no other material contracts in the reporting period.


XV. Social responsibility

1. Execution of social responsibility of targeted poverty alleviation

(1) Summary of targeted poverty alleviation for fist half year

(2) Targeted poverty alleviation of the listed company for first half year: Nil

(3) Follow-up targeted poverty alleviation plans: Nil

2. Major environmental protection

Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental Protection
No


XVI. Explanation on other significant events

√Applicable   □ Not applicable
1. On 8 March 2001, the Company received a written decision of administrative penalty ZJFZi [2001] No.3
“Penalty Decision on Hainan Dadonghai Tourism Center (Holdings) Co., Ltd. in Violation of Securiteis Laws and
Regulations ” from CSRC for false profit and rule-violation. Penalty including confiscate their illegal income of
19.31 million Yuan and improse a fine of 0.5 million Yuan. On 20 Feburary 2017, the Company paid the penalty
in full to CSRC.
2. Lawyer’s Letter received by the Company: based on the preliminary calculation by Sanya Power Supply
Bureau, totally 10313373 KWH was undercounted from July 2006 to April 2016 under the name of South China
Hotel. Found more in the “Notice of Reciveing the Lawyer’s Letter (Notice No.: 2016-016)” released on
Securities Times, Hong Kong Commercial Daily and Juchao Website dated 31 May 2016. Currently, the
Company still in negotiation and communication with Sanya Power Supply Bureau, relevant results are not comes
out.




                                                                21
      司公限有份股心中游旅海东大南海         2017   文全告报度年半年
XVII. Major event of the subsidiaries

□ Applicable √ Not applicable




                                        22
      司公限有份股心中游旅海东大南海                                                                              2017    文全告报度年半年
         Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in shares

1. Changes in shares
                                                                                                                                   In Share

                                          Before change               Increase/decrease in this time (+ , - )                After changed

                                                                           Bon Capitalizat
                                                                  New      us     ion of
                                        Amount       Ratio                                     Other       Subtotal       Amount       Ratio
                                                                  issue    shar   public
                                                                            e     reserve

I. Restricted shares                    10,455,687    2.87%                                            0              0   10,455,687     2.87%


1.   State-owned shares

2.    State-owned       corporate
                                         2,369,400    0.65%                                            0              0    2,369,400     0.65%
shares

                                         8,086,287    2.22%                                            0              0    8,086,287     2.22%
3. Other domestic shares
Including: Domestic legal
                                         7,953,000    2.18%                                   -132,000     -132,000        7,821,000     2.15%
person shares

Domestic natural person
                                          133,287     0.04%                                    132,000      132,000         265,287      0.07%
shares

II. Unrestricted shares                353,644,313   97.13%                                            0              0 353,644,313     97.13%

                                       265,644,313   72.96%                                            0              0 265,644,313     72.96%
1. RMB common shares

2.Domestically listed foreign
                                        88,000,000   24.17%                                            0              0   88,000,000    24.17%
shares
III. Total shares                      364,100,000   100.00%                                           0              0 364,100,000    100.00%
Reasons for share changed
√Applicable        □Not applicable
In the process of subsequent work of share-trading reform of the Company, according to relevant regulations the release procedures
were in process and part of the shareholders handling the payment of account paid in advance. Thus, the share structure changes in
the report period but retained the same in total share capital.


Approval of share changed
□ Applicable √ Not applicable


Ownership transfer of share changed



                                                                      23
        司公限有份股心中游旅海东大南海                                                                        2017   文全告报度年半年
  □ Applicable √ Not applicable


  Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
  shareholders of Company in latest year and period
  □ Applicable √ Not applicable


  Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
  □ Applicable √ Not applicable


  2. Changes of restricted shares

  √ Applicable      □ Not applicable
                                                                                                                               In Share
                                         Number of
                                            shares Number of Number of Number of
                                          restricted   shares new shares       shares         Restriction
            Shareholders’ name                                                                                      Released date
                                              at     released in restricted restricted at      reasons
                                         Period-begi the period in the Year Period-end
                                               n
                                                                                            Legal           After relevant reimbursement
Xiao Tiefeng                                132,000       0          0           132,000 commitment in and unrestricted procedures
                                                                                            share reform    completed   x

                                                                                            Legal           After relevant reimbursement
Sanya Real Estate Valuation Agent           924,000       0          0           924,000 commitment in and unrestricted procedures
                                                                                            share reform    completed

Hainan Hong Kong-Macao                                                                      Legal           After relevant reimbursement
International Trade Development Co.,        924,000       0          0           924,000 commitment in and unrestricted procedures
Ltd.                                                                                        share reform    completed

                                                                                            Legal           After relevant reimbursement
Haikou Dongfang Urban credit
                                            924,000       0          0           924,000 commitment in and unrestricted procedures
Cooperative
                                                                                            share reform    completed

                                                                                            Legal           After relevant reimbursement
Hainan Branch of Bank of
                                            924,000       0          0           924,000 commitment in and unrestricted procedures
Communications Co., Ltd.
                                                                                            share reform    completed

                                                                                            Legal           After relevant reimbursement
Shenyang Jin’an Industrial
                                            831,600       0          0           831,600 commitment in and unrestricted procedures
Corporation
                                                                                            share reform    completed

                                                                                            Legal           After relevant reimbursement
Sales Dept. of Sanya Wanli Building
                                             92,400       0          0            92,400 commitment in and unrestricted procedures
Materials
                                                                                            share reform    completed

                                                                                            Legal           After relevant reimbursement
Hainan Nongken Sanya Timber Mill             46,200       0          0            46,200
                                                                                            commitment in and unrestricted procedures


                                                                     24
        司公限有份股心中游旅海东大南海                                                                       2017   文全告报度年半年
                                                                                         share reform   completed

                                                                                         Legal          After relevant reimbursement
Guangzhou Company of Hainan
                                          660,000      0           0           660,000 commitment in and unrestricted procedures
International Investment Co., Ltd.
                                                                                         share reform   completed

                                                                                         Legal          After relevant reimbursement
Southern Industrial and Trading
                                          660,000      0           0           660,000 commitment in and unrestricted procedures
Corporation
                                                                                         share reform   completed

                                                                                         Legal          After relevant reimbursement
Guangzhou Dongzhan Industrial Co.
                                          924,000      0           0           924,000 commitment in and unrestricted procedures
LTD
                                                                                         share reform   completed

                                                                                         Legal          After relevant reimbursement
Sanya Zhongxing Development Co.,
                                         2,541,000     0           0         2,541,000 commitment in and unrestricted procedures
Ltd.
                                                                                         share reform   completed

                                                                                         Legal          After relevant reimbursement
Hainan Dadonghai Tourism Co. Ltd.         739,200      0           0           739,200 commitment in and unrestricted procedures
                                                                                         share reform   completed

                                                                                         Legal          After relevant reimbursement
Ma Xiaoping                                     0      0         132,000       132,000 commitment in and unrestricted procedures
                                                                                         share reform   completed

                                                                                         Legal          After relevant reimbursement
Beijing Xueli Clothing Accessories
                                          132,000      0        -132,000             0 commitment in and unrestricted procedures
Co., Lt.d
                                                                                         share reform   completed

                                                                                         Supervisor
Chen Gang (former named Chen                                                                            Comply with relevant
                                            1,287      0           0             1,287 un-tradable
Shengguang)                                                                                             regulations
                                                                                         shares

Total                                   10,455,687     0           0        10,455,687            --                     --


  II. Securities issuance and listing

  □ Applicable √ Not applicable


  III. Amount of shareholders of the Company and particulars about shares holding

                                                                                                                               In Share

  Total common stock                                              Total preference shareholders
  shareholders in reporting                                17,444 with voting rights recovered at                                            0
  period-end                                                      end of reporting period

                       Particulars about common shares held above 5% by shareholders or top ten common shareholders

                                                  Nature of      Proporti   Number of Changes in Amount Amount of
            Full name of Shareholders                              on of
                                                 shareholder                common          report      of      un-restricte
                                                                  shares                                                         Number of
                                                                                                                                    share

                                                                  25
       司公限有份股心中游旅海东大南海                                                                           2017   文全告报度年半年
                                                                                                         restricte                 pledged/frozen
                                                                             shares held                               d shares
                                                                   held                     period       d shares                  State of Amou
                                                                            at period-end                               held
                                                                                                           held                     share    nt

                                            Domestic non
Luoniushan Co., Ltd.                        state-owned           16.90%     61,515,370              0               61,515,370
                                            corporate

                                            Domestic nature
Pan Guoping                                                         8.48%    30,879,791              0               30,879,791
                                            person

Changxin Fund- Shanghai Pudong
Development Bank - Gold Investment          Other                   3.30%    12,000,052     4,970,010                12,000,052
Asset No.2 Management Plan

First Shanghai Securities Limited           Foreign corporate       2.62%      9,552,798             0                 9,552,798

HGNH INTERNATIONAL ASSETS
MANAGEMENT CO., LTD. – Clients             Foreign corporate       2.29%      8,327,502    2,468,200                  8,327,502
fund

                                            Domestic nature
Hu Jianguo                                                          1.71%      6,227,640     564,700                   6,227,640
                                            person

Yunnan International Trust Co., Ltd. –
Yunnan Trust Yunqilongxiang No.2 Trust      Other                   1.37%      5,000,084     500,084                   5,000,084
Plan

China Investment Securities (HK) Co., Ld.
                                            Foreign corporate       1.30%      4,722,300    1,090,000                  4,722,300
– customer deposit

                                            Domestic nature
Zhang Fengxiu                                                       1.07%      3,901,372             0                 3,901,372
                                            person

                                            Domestic non
Yangpu Tongrong Investment Management
                                            state-owned             0.99%      3,609,000 -1,009,800                    3,609,000
Consultation Co., Ltd
                                            corporate

Strategy investors or general legal person becomes top 10
                                                                 N/A
common shareholders due to rights issued

                                                                 The Company is unknown whether there exists associated relationship or
Explanation on associated relationship or accordant action belongs to the consistent actor regulated by the Management Measure of
among the aforesaid shareholders                                 Information Disclosure on Change of Shareholding for Listed Company
                                                                 among the other shareholders.

                                 Particular about top ten shareholders with un-restrict common shares held

                                                            Amount of un-restrict common                          Type of shares
                  Shareholders’ name
                                                                shares held at Period-end                Type                      Amount

Luoniushan Co., Ltd.                                                              61,515,370 RMB common share                          61,515,370

Pan Guoping                                                                       30,879,791 Domestically listed                       30,879,791



                                                                   26
      司公限有份股心中游旅海东大南海                                                                       2017   文全告报度年半年
                                                                                                 foreign share

Changxin Fund- Shanghai Pudong Development Bank -
                                                                                 12,000,052 RMB common share                  12,000,052
Gold Investment Asset No.2 Management Plan

                                                                                              Domestically listed
First Shanghai Securities Limited                                                 9,552,798                                    9,552,798
                                                                                                 foreign share

HGNH INTERNATIONAL ASSETS MANAGEMENT
                                                                                  8,327,502 RMB common share                   8,327,502
CO., LTD. – Clients fund

Hu Jianguo                                                                        6,227,640 RMB common share                   6,227,640

Yunnan International Trust Co., Ltd. – Yunnan Trust
                                                                                  5,000,084 RMB common share                   5,000,084
Yunqilongxiang No.2 Trust Plan

China Investment Securities (HK) Co., Ld. – customer
                                                                                  4,722,300 RMB common share                   4,722,300
deposit

Zhang Fengxiu                                                                     3,901,372 RMB common share                   3,901,372

Yangpu Tongrong Investment Management Consultation
                                                                                  3,609,000 RMB common share                   3,609,000
Co., Ltd

Expiation on associated relationship or consistent actors The Company is unknown whether there exists associated relationship or belongs
within the top 10 un-restrict common shareholders and to the consistent actor regulated by the Management Measure of Information
between top 10 un-restrict common shareholders and top Disclosure on Change of Shareholding for Listed Company among the other
10 common shareholders                                    shareholders.

Explanation on top ten common shareholders involving
                                                          N/A
margin business

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement
dealing in reporting period
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back
agreement dealing in reporting period.


IV. Changes of controlling shareholders or actual controller

Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Changes of actual controller in reporting period had no change in reporting period.




                                                                 27
      司公限有份股心中游旅海东大南海                                 2017   文全告报度年半年

                                      Section VII. Preferred Stock

□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.




                                                       28
        司公限有份股心中游旅海东大南海                                                                    2017   文全告报度年半年


               Section VIII. Directors, Supervisors and Senior Executives

I. Changes of shares held by directors, supervisors and senior executives

□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report
2016.


II. Resignation and dismissal of directors, supervisors and senior executives

□ Applicable √ Not applicable
Directors, supervisors and senior executives has no changed in the period, found more in Annual Report 2016




                                         Section IX Corporate Bond

Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
semi-annual report approved for released or fail to cash in full on due
No




                                                                   29
Section X Financial Report

          HAINAN DADONGHAI TOURISM CENTER
          (HOLDINGS) CO., LTD

                Financial Report and Financial Statement



                Semi-Annual 2017




            1
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO.,
                    LTD

           Financial Report and Financial Statement
                            (Jan. 1, 2017- Jun. 30, 2017)




                             Content                          Page


   I.    Financial Statement


         Balance Sheet                                                1-2


         Profit Statement                                              3


         Statement of Cash Flow                                        4


         Statement of Changes in Owners’ Equity                      5-6


   II.   Notes to Financial Statement                                1-48




                                           1
                           HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
                                              Balance Sheet
                                              June 30, 2017
                                       (Expressed in Renminbi unless otherwise stated)
                              Assets                             Note V       Ending balance      Beginning balance

Current assets:

Monetary funds                                                       (I)         10,108,175.91        27,210,248.01

Financial assets measured at fair value through rofit or
loss for the current period

Derivative financial assets

Notes receivable

Accounts receivable                                                 (II)            337,187.05           690,444.72

Prepayments                                                         (III)            38,660.36            58,783.23

Interests receivable

Dividends receivable

Other receivables                                                   (IV)            316,384.24           174,103.52

Inventories                                                         (V)             253,215.05           219,179.72

Assets classified as held for sale

Non-current assets maturing within one year                         (VI)            292,184.72           584,369.42

Other current assets                                                (VII)        11,020,867.76         1,876,449.22

Total current assets                                                             22,366,675.09        30,813,577.84

Non-current assets:

Available-for-sale financial assets                              (VIII)

Held-to-maturity investments

Long-term receivables

Long-term equity investments                                        (IX)

Investment property                                                 (X)            9,096,265.77        9,333,527.55

Fixed assets                                                        (XI)         39,264,470.61        40,395,680.91

Construction in progress                                            (XII)           978,211.64

Project materials

Disposal of fixed assets

Productive biological assets

Oil and gas assets

Intangible assets                                                (XIII)          23,423,829.78        23,830,023.36

Development expenses

Goodwill

Long-term deferred expenses                                      (XIV)             1,071,343.97        1,071,343.97

Deferred income tax assets
                                                                1
                                                           页 第表报
Other non-current assets

Total non-current assets                                                             73,834,121.77        74,630,575.79

Total assets                                                                         96,200,796.86       105,444,153.63
The accompanying notes to the financial statements are an integral part of the financial statements.

Legal Representative:             Accounting Principal:              The Accounting Firm’s Principal:




                                                                 2
                                                          页 第表报
                           HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
                                         Balance Sheet (continued)
                                              June 30, 2017
                                          (Expressed in Renminbi unless otherwise stated)
                Liabilities and owners 'equity                     Note V        Ending balance     Beginning balance
Current liabilities:
Short-term borrowings
Financial liabilities measured at fair value through profit
or loss for the current period
Derivative financial liabilities
Notes payable

Accounts payable                                                   (XVI)             2,042,988.73         1,967,565.51

Accounts received in advance                                       (XVII)            1,246,924.32         1,894,524.28

Employee benefits payable                                         (XVIII)            1,799,762.38         2,148,514.36

Taxes and surcharges payable                                       (XIX)               539,524.00           582,944.27
Interests payable
Dividends payable

Other payables                                                        (XX)          13,086,243.15        23,084,504.73

Liabilities classified as held for sale
Non-current liabilities maturing within one year
Other current liabilities
Total current liabilities                                                           18,715,442.58        29,678,053.15
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: preferred shares
Perpetual capital securities
Long-term payables
Long-term employee benefits payable
Special payables

Estimated liabilities                                              (XXI)             1,489,685.04         1,489,685.04
Provisions
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities                                                        1,489,685.04         1,489,685.04
Total liabilities                                                                   20,205,127.62        31,167,738.19
Owners 'equity:

Share capital                                                      (XXII)          364,100,000.00       364,100,000.00
Other equity instruments
Including: preferred shares
Perpetual capital securities

Capital reserves                                                  (XXIII)                                54,142,850.01
                                                                  3
                                                           页 第表报
                                                                                        54,142,850.01
 Less: treasury stock
 Other comprehensive income
 Special reserves
 Surplus reserves
 General risk reserves

 Undistributed profit                                              (XXIV)             -342,247,180.77      -343,966,434.57
 Total owners 'equity                                                                   75,995,669.24       74,276,415.44
 Total liabilities and owners 'equity                                                   96,200,796.86      105,444,153.63
The accompanying notes to the financial statements are an integral part of the financial statements.

Legal Representative:                 Accounting Principal:            The Accounting Firm’s Principal:

                          HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
                                             Profit Statement
                                            Semi-Annual 2017
                                          (Expressed in Renminbi unless otherwise stated)
                              Item                                  Note V           Current period        Last period

 I. Operating income                                                (XXV)                15,096,273.42      12,062,797.60

 Less: operating cost                                               (XXV)                 5,256,112.51        4,460,023.31

 Business taxes and surcharges                                      (XXVI)                  754,244.27         566,956.63

 Selling expenses                                                  (XXVII)                2,458,144.93        2,099,035.74

 Administrative expenses                                           (XXVIII)               5,089,450.57        4,989,443.77

 Financial expenses                                                 (XXIX)                 -180,672.66         -204,752.54

 Losses from asset impairment                                       (XXX)

 Plus: gains from changes in fair value ("-" for losses)

 Investment income ("- " for loss)
 Including: income from investments in associates and
 joint ventures

 II. Operating profits ("-" for losses)                                                   1,718,993.80         152,090.69

 Plus: non-operating income                                         (XXXI)                      260.00           77,406.00

 Including: Gains from disposal of non-current assets

 Less: non-operating expenses

 Including: Loss on disposal of non-current assets

 III. Total profits ("-" for total losses)                                                1,719,253.80         229,496.69

 Less: income tax expenses                                                                                       57,374.17

 IV. Net profit ("-" for net loss)                                                        1,719,253.80         172,122.52

 V. Net after-tax of other comprehensive income
 (I) Other comprehensive income items which will not be
 reclassified subsequently to profit of loss
      1.    Changes as a result of remeasurement of net
            defined benefit plan liability or asset

      2.    Share of the other comprehensive income of
                                                                   4
                                                              页 第表报
           the investee accounted for using equity method
           which will not be reclassified subsequently to
           profit and loss
 (II) Other comprehensive income items which will be
 reclassified subsequently to profit or loss
      1.   Share of the other comprehensive income of
           the investee accounted for using equity method
           which will be reclassified subsequently to
           profit or loss
      2.   Gains or losses arising from changes in fair
           value of available-for-sale financial assets
      3.   Gains or losses arising from reclassification of
           held-to-maturity investment as
           available-for-sale financial assets
      4.   The effect hedging portion of gains or losses
           arising from cash flow hedging instruments
      5.   Translation differences arising on translation of
           foreign currency financial statements

      6.   Others
 VI. Total comprehensive income                                                           1,719,253.80          172,122.52

 VII. Earnings per share:                                          X. (II)

 (I) Basic earnings per share                                                                   0.0047              0.0005

 (II) Diluted earnings per share                                                                0.0047              0.0005
Legal Representative:              Accounting Principal:              The Accounting Firm’s Principal:




                        HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
                                       Statement of Cash Flow
                                          Semi-Annual 2017
                                          (Expressed in Renminbi unless otherwise stated)
                                   Item                                       Note V        Current period    Last period
I. Cash flows from operating activities
  Cash received from sale of goods and rendering of services                                 15,736,183.76    12,211,146.88
  Refunds of taxes and surcharges                                                                                  4,801.73

  Cash received from other operating activities                              (XXXII)            677,415.38      545,761.73

Sub-total of cash inflows from operating activities                                          16,413,599.14    12,761,710.34
  Cash paid for goods purchased and services received                                          3,826,391.38    3,278,812.89
  Cash paid to and on behalf of employees                                                      5,608,808.99    4,775,931.92
  Cash paid for taxes and surcharges                                                           1,610,025.50    1,706,387.86

  Cash paid for other operating activities                                   (XXXII)           2,137,300.17    1,546,880.23

Sub-total of cash outflows from operating activities                                         13,182,526.04    11,308,012.90
Net cash flows from operating activities                                                       3,231,073.10    1,453,697.44
II. Cash flows from investing activities
  Cash received from disposal of investments

                                                                  5
                                                           页 第表报
  Cash received from returns on investments
  Net cash received from disposal of fixed assets, intangible assets
and other long-term assets
  Net cash received from disposal of subsidiaries and other business
units
  Cash received from other investing activities
Sub-total of cash inflows from investing activities
  Cash paid to acquire and construct fixed assets, intangible assets
                                                                                           1,333,145.20     410,799.00
and other long-term assets
  Cash paid for investments                                                                9,000,000.00    9,000,000.00
  Net cash paid to acquire subsidiaries and other business units
  Cash paid for other investing activities
Sub-total of cash outflows from investing activities                                      10,333,145.20    9,410,799.00
Net cash flows from investing activities                                                 -10,333,145.20   -9,410,799.00
III. Cash flows from financing activities
  Cash from absorption of investments
  Cash received from borrowings
  Cash received from bonds issue

  Cash received from other financing activities                          (XXXII)          19,810,000.00

Sub-total of cash inflows from financing activities                                       19,810,000.00

  Cash paid for debt repayments
   Cash paid for distribution of dividends and profits or payment of
interests
  Cash paid for other financing activities                                                29,810,000.00

Sub-total of cash outflows from financing activities                     (XXXII)          29,810,000.00

Net cash flows from financing activities                                                 -10,000,000.00
IV. Effect of fluctuation on exchange rate on cash and cash
equivalents
V. Net increase in cash and cash equivalents                                             -17,102,072.10   -7,957,101.56
  Plus: balance of cash and cash equivalents at the beginning of the
                                                                                          27,210,248.01   19,782,392.26
period
VI. Balance of cash and cash equivalents at the end of the period                         10,108,175.91   11,825,290.70
The accompanying notes to the financial statements are an integral part of the financial statements.
Legal Representative:             Accounting Principal:               The Accounting Firm’s Principal:




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                                                                     HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
                                                                               Statement of Changes in Owners' Equity
                                                                                         Semi-Annual 2017
                                                                                 (Expressed in Renminbi unless otherwise stated)
                                                                                                                          Current period
                                                                                  Other                                                  Other
                                                                            equity instrument                                          compreh
                                                                                                                                                  Speci
                      Item                                                                                                  Less:        ensive
                                                                                 Perpetua                    Capital                                al    Surplus    Undistributed     Total owner's
                                                    Share capital                                                         treasury      income
                                                                      Preferre   l capital                   reserve                              reser   reserves      profit            equity
                                                                                                Other                       stock
                                                                      d stock    securitie                                                         ve
                                                                                     s
I. Balance as at the end of last year               364,100,000.00                                        54,142,850.01                                              -343,966,434.57    74,276,415.44
Plus: Changes in accounting policies
  Correction of accounting errors in prior
periods
  Others
II. Balance as at the beginning of year             364,100,000.00                                        54,142,850.01                                              -343,966,434.57    74,276,415.44
III. Increases/decreases in the period (“-” for
                                                                                                                                                                        1,719,253.80     1,719,253.80
decreases)
(I) Total comprehensive income                                                                                                                                          1,719,253.80     1,719,253.80
(II) Capital contributed or reduced by owners
1. Ordinary shares contributed by owners
2. Contributions from holders of other equity
instruments
3.Amounts of share-based payments
recognized in owners’ equity
4.Others
(III) Profit distribution
1. Withdrawal of surplus reserves
2. Profit distributed to owners (or
shareholders)
3. Others
(IV) Internal carry-forward of owners' equity
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1. Conversion of capital reserves into paid-in
capital (or share capital)
2. Conversion of surplus reserves into paid-in
capital (or share capital)
3. Making up losses with surplus reserves
4. Others
(V) Special reserves
1. Withdrawal in the period
2. Use in the period
(VI) Others
IV. Balance as at the end of the period          364,100,000.00                                      54,142,850.01   -342,247,180.77   75,995,669.24
   The accompanying notes to the financial statements are an integral part of the financial statements.
   Legal representative:            Accounting Principal:                   The Accounting Firm’s Principal:




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                                                                HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
                                                                       Statement of Changes in Owners' Equity (continued)
                                                                                       Semi-Annual 2017
                                                                            (Expressed in Renminbi unless otherwise stated)
                                                                                                                     Last period
                                                                                Other                                            Other
                                                                          equity instrument                                    compreh
                                                                                                                                 ensive   Specia   Surplu
                      Item                                                      Perpet                                Less:
                                                                                                                                income       l        s     Undistributed     Total owner's
                                                    Share capital                 ual              Capital reserve   treasur
                                                                     Preferre                                                             reserv   reserv      profit            equity
                                                                                capital    Other                     y stock
                                                                     d stock                                                                 e       es
                                                                                securiti
                                                                                   es
I. Balance as at the end of last year               364,100,000.00                                  54,142,850.01                                           -341,305,382.08    76,937,467.93
Plus: Changes in accounting policies
  Correction of accounting errors in prior
periods
  Others
II. Balance as at the beginning of year             364,100,000.00                                  54,142,850.01                                           -341,305,382.08    76,937,467.93
III. Increases/decreases in the period (“-” for                                                                                                                172,122.52       172,122.52
decreases)
(I) Total comprehensive income                                                                                                                                   172,122.52       172,122.52

(II) Capital contributed or reduced by owners
1. Ordinary shares contributed by owners
2. Contributions from holders of other equity
instruments
3.Amounts of share-based payments
recognized in owners’ equity
4.Others
(III) Profit distribution
1. Withdrawal of surplus reserves
2. Profit distributed to owners (or
shareholders)

                                                                                                    9
                                                                                              页 第表报
3. Others
(IV) Internal carry-forward of owners' equity
1. Conversion of capital reserves into paid-in
capital (or share capital)
2. Conversion of surplus reserves into paid-in
capital (or share capital)
3. Making up losses with surplus reserves
4. Others
(V) Special reserves
1. Withdrawal in the period
2. Use in the period
(VI) Others
IV. Balance as at the end of the period          364,100,000.00                                      54,142,850.01   -341,133,259.56   77,109,590.45
The accompanying notes to the financial statements are an integral part of the financial statements.
Legal representative:            Accounting Principal:                   The Accounting Firm’s Principal:




                                                                                                     10
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司公限有份股心中游旅海东大南海
2017      告报务财度年半年
                  注附表报务财
  HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO.,
                        LTD
           NOTES TO FINANCIAL STATEMENT
                  SEMI-ANNUAL 2017



1. Company basic information

1.1    Company profile

      Hainan Dadonghai Tourism Center (Holdings) Co., Ltd. (hereinafter referred to as “the
      Company”), was founded as a standardized LLC on April 26, 1993, reorganized and
      incorporated on the basis of the former Hainan Sanya Dadonghai Tourism Center
      Development Ltd. and approved by the Hainan Provincial Stock System Experimentation
      Leading Team Office with a document of Qiong Gu Ban Zi [1993] No. 11. On May 6, 1996,
      the Company underwent a restructuring and a corresponding division under the approval of
      the Hainan Provincial Securities Administration Office with a document of Qiong Zheng Ban
      [1996] No. 58. On October 8, 1996 and January 28, 1997, the Company, with duly approval,
      went public by issuing 80 million shares of B stock and 14 million shares of A stock
      respectively on Shenzhen Security Exchange. On June 20, 2007, the Company experienced a
      reform of non-tradable shares, through which non-tradable share holders of the Company got
      circulating right of their shares by paying shares to tradable share holders, and tradable share
      holders got paid three shares for every ten of their shares. The Company operates business in
      the industry of tourism and catering services.


      As of June 30, 2017, the Company’s total capital stock is 364,100,000 shares. The Company’s
      registered capital is RMB 364.1 million. The legal representative is Li Yuanbin. The
      registration number of its Business License for Enterprise Legal Person (Duplicate) is
      4600001003983. The legal registerred residence is Dadonghai, Hedong District, Sanya. Its
      scope of business includes: accommodation and catering industry (limited to those operated
      by branches); photography; operation of ornamental plant bonsai, knitwear and textiles,
      general merchandise, hardware and electrical equipment, chemical products (excluding those
      require specialized licenses), daily necessities, industrial means of production (excluding
      those require specialized licenses), metal materials and machinery equipment; commission
      sale of plane, bus, train and ship tickets (items in require of administrative permission shall be



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司公限有份股心中游旅海东大南海
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                  注附表报务财
    operated under license). The Company’s largest shareholder is the Hainan Luoniushan
    (Holdings) Co., Ltd.


    These financial statements have been approved by all directors of the Company on August 17,
    2017 for disclosure.

1.2 Scope of consolidation (aggregation) of financial statements
    Until June 30, 2017, the scope of consolidation (aggregation) of financial statements as below:

                                  Company Name                               Relationship

          South China Grand Hotel of Hainan Dadonghai Tourism Center

            (Holdings) Co., Ltd (hereinafter referred to as “South China     Subsidiary

                                   Grand Hotel”)

         The consolidate (Summarize) financial statement range in the period and its changes found
         more in the “VI Change of Consolidate Range” in Note


2      Basis of preparation for financial statements
       2.1 Basis of preparation
          Based on going concern, according to actually occurred transactions and events, the
          Company prepares its financial statements in accordance with the Accounting Standards
          for Business Enterprises – Basic Standards and concrete accounting standards,
          Accounting Standards for Business Enterprises – Application Guidelines, Accounting
          Standards for Business Enterprises – Interpretations and other relevant provisions
          (collectively known as “Accounting Standards for Business Enterprises”), as well as the
          disclosure requirements of Regulation on the Preparation of Information Disclosure of
          Companies Issuing Public Shares No.15 - General Requirements for Financial Reports (as
          revised in 2014) by the China Securities Regulatory Commission.


       2.2 Going concern
          The Company is currently operating normal, net cash flows from operating activities is
          positive, the Company is expected to continue operate as going concern in the next twelve
          months.


3      Principal accounting policies and estimates



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司公限有份股心中游旅海东大南海
2017      告报务财度年半年
                  注附表报务财
       3.1 Statement on compliance with Accounting Standards for Business
           Enterprises
         The financial statements prepared by the Company meet the requirements of the
         Accounting Standards for Business Enterprises and truly and completely reflect the
         Company’s financial position, and its operating results, cash flows and other related
         information.


       3.2 Accounting period
         The accounting year is from January 1 to December 31 in calendar year.


       3.3 Operating cycle
         The operating cycle of the Company is twelve months.


       3.4 Functional currency
         RMB is adopted as the functional currency.


       3.5 Recognition criteria of cash and cash equivalents
         For the purpose of preparing the statement of cash flows, the term “cash” refers to the
         cash on hand and the unrestricted deposit. The term “cash equivalents” refers to
         short-term (maturing within three months from acquisition) and highly liquid investments
         that are readily convertible to known amounts of cash and which are subject to an
         insignificant risk of change in value.


       3.6 Foreign currency transactions
         Foreign currency transactions are converted into RMB for recording purpose at the spot
         exchange rate on the date when the transaction occurs.


         Balances of foreign currency monetary items are measured at the spot exchange rate on
         the balance sheet date. The exchange difference arising therefrom shall be included in the
         current profit and loss, except that those exchange differences arising from the special
         borrowings of foreign currency related to the acquired and constructed assets qualified for
         capitalization shall be dealt with according to the principle of borrowing cost
         capitalization. Foreign currency non-monetary items measured at historical costs shall



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                  注附表报务财
         still be converted at the spot exchange rates on the date when the transactions occur, and
         the amount in functional currency shall remain unchanged. Foreign currency
         non-monetary items measured at fair value shall be translated at the spot exchange rates
         on the date when the fair value is determined. The exchange difference arising therefrom
         shall be included in the current profit and loss or capital reserves.



       3.7 Financial instruments
         Financial instruments include financial assets, financial liabilities and equity instruments.


           3.7.1     Classification of financial instruments

               Financial assets and liabilities are classified into the following categories according
               to the purpose of acquisition: financial assets or financial liabilities measured at fair
               value and whose variation is included in the current profit and loss, including
               financial assets or financial liabilities held for trading and financial assets or
               financial liabilities directly designated to be measured at fair value through current
               profit    and    loss,    held-to-maturity     investments,       accounts   receivables,
               available-for-sale financial assets and other financial liabilities, etc.




           3.7.2     Recognition basis and measurement method of financial instruments

               (1) Financial assets (financial liabilities) measured at fair value and whose
                     variation is included in the current profit and loss
                    Financial assets (financial liabilities) are initially recorded at fair values when
                    acquired (deducting cash dividends that have been declared but not distributed
                    and bond interests that have matured but not been drawn). Relevant transaction
                    expenses are included in the current profit and loss.


                    The interests or cash dividends to be received during the holding period are
                    recognized as investment income. Change in fair values is included in the
                    current profit and loss at the end of the period.


                    Difference between the fair value and initial book-entry value is recognized as
                    investment income upon disposal; meanwhile, adjustment is made to gains or



                                                          4
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司公限有份股心中游旅海东大南海
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                  注附表报务财
                  losses from changes in fair values.


              (2) Held-to-maturity investments
                  Held-to-maturity investments are initially recorded at fair values plus the
                  related trade expenses when acquired (deducting bond interests that have
                  matured but not been drawn).


                  The interest revenue calculated at amortization cost and effective interest rate
                  (nominal interest rate is adopted when the difference between the actual
                  interest rate and the nominal interest rate is minor) during the holding period is
                  recognized as investment income. Effective interest is recognized when
                  obtained, and remains unchanged in the predictable holding period or
                  applicable shorter period.


                  The difference between the amount received and the book value of the
                  investment is included in the investment profit and loss upon disposal.


              (3) Accounts receivable
                  For creditor’s rights receivable arising from external sales of goods or
                  rendering of service by the Company and other creditor's rights of other
                  enterprises (excluding liability instruments quoted in an active market) held by
                  the Company, including accounts receivable, other receivables, notes
                  receivable and prepayments, etc., the initial recognition amount shall be the
                  contract price or agreement price receivable from purchasing party. Accounts
                  receivable with financing nature are initially recognized at their present values.


                  The difference between the amount received and the book value of the
                  accounts receivable is included in the current profit and loss upon recovery or
                  disposal.


              (4) Available-for-sale financial assets
                  Available-for-sale financial assets are initially recorded at fair values plus the
                  related trade expenses when acquired (deducting cash dividends that have been
                  declared but not been paid or bond interests that have matured but not been


                                       页 第注附表报务财5
司公限有份股心中游旅海东大南海
2017      告报务财度年半年
                  注附表报务财
                  drawn).


                  The interests or cash dividends to be received during the holding period are
                  recognized as investment income. It is measured in fair value at the end of the
                  period and change in fair values is included in other comprehensive income at
                  the end of the period. However, the equity instrument investments unquoted in
                  an active market and whose fair value cannot be measured reliably, and the
                  derivative financial assets which are connected with the said equity instrument
                  and must be settled by delivering the said equity instrument shall be measured
                  on the costs basis.


                  The difference between the amount received and the book value of the
                  financial asset is included in the investment profit and loss upon disposal.
                  Meanwhile, the corresponding part of fair value accumulated change accounted
                  as other comprehensive income is transferred into investment profit or loss.


              (5) Other financial liabilities
                  Other financial liabilities are initially recognized at the sum of fair value and
                  transaction expenses and subsequently measured at amortized costs.



          3.7.3    Recognition basis and measurement method of transfer of financial assets

              When transfer of financial assets occurs, if nearly all of the risks and rewards of
              ownership of the financial assets have been transferred to the transferee, the
              Company derecognizes the financial assets; if nearly all of the risks and rewards of
              ownership of the financial assets are retained, the Company shall not derecognize
              the financial assets.


              The principle of substance over form is adopted to determine whether the transfer
              of a financial asset satisfies the criteria as described above for derecognition of a
              financial asset. The Company shall classify the transfer of a financial asset into the
              entire transfer and the partial transfer of financial asset. If the entire transfer of
              financial asset satisfies the criteria for derecognition, the difference between the
              amounts of the following two items shall be included in the current profit and loss:


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                  注附表报务财
              (1) The book value of the transferred financial asset;
              (2) The sum of the consideration received from the transfer and the accumulated
                   amount of the changes in fair value originally and directly included in owners’
                   equity (the situation       where the financial asset transferred           is an
                   available-for-sale financial asset is involved in)


             If the partial transfer of financial asset satisfies the criteria for derecognition, the
             entire book value of the transferred financial asset shall be split into the
             derecognized and recognized part according to their respective fair value and the
             difference between the amounts of the following two items shall be included in the
             current profit and loss:
             (1) The book value of derecognized part;
             (2) The sum of the consideration for the derecognized part and the portion of
                   derecognition corresponding to the accumulated amount of the changes in fair
                   value originally and directly included in owners’ equity (the situation where
                   the financial asset transferred is an available-for-sale financial asset is
                   involved in).


                   If the transfer of financial assets does not meet the derecognition criteria, the
                   financial assets shall continue to be recognized, and the consideration received
                   will be recognized as a financial liability.




           3.7.4   Derecognition criteria of financial liabilities

              A financial liability shall be totally or partly derecognized if its present obligations
              are totally or partly dissolved. Where the Company enters into an agreement with a
              creditor so as to substitute the existing financial liabilities with any new financial
              liability, and the new financial liability is substantially different from the
              contractual stipulations regarding the existing financial liability, it shall
              derecognize the existing financial liability, and shall at the same time recognize a
              new financial liability.


              Where substantial revisions are made to some or all of the contractual stipulations



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司公限有份股心中游旅海东大南海
2017      告报务财度年半年
                  注附表报务财
                 of the existing financial liability, the Company shall derecognize the existing
                 financial liability totally or partly, and at the same time recognize the financial
                 liability with revised contractual stipulations as a new financial liability.


                  Upon total or partial derecognition of financial liabilities, the difference between
                 the book value of the financial liabilities derecognized and the consideration paid
                 (including non-cash assets surrendered or new financial liabilities assumed) shall
                 be included in the current profit and loss.


                 Where the Company redeems part of its financial liabilities, it shall, on the
                 redemption date, allocate the entire book value of whole financial liabilities
                 according to the comparative fair value of the part that continues to be recognized
                 and the de-recognized part. The difference between the book value allocated to the
                 derecognized part and the considerations paid (including non-cash assets
                 surrendered and the new financial liabilities assumed) shall be included in the
                 current profit and loss.




              3.7.5   Method of determining the fair value of financial assets and financial
liabilities

                 For financial instruments with active market, their fair values are determined with
                 quoted market price. For financial instruments without active market, their fair
                 values are determined by using valuation technique. During the valuation, the
                 Company use valuation techniques that are appropriate in the circumstances and for
                 which sufficient data and other information are available to measure fair value,
                 select inputs that are consistent with the characteristics of the asset or liability that
                 market participants would take into account in a transaction for the asset or liability,
                 and give priority to the use of relevant observable inputs. Unobservable inputs are
                 only adopted when relevant observable inputs cannot be obtained or are
                 impracticable to obtain.




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司公限有份股心中游旅海东大南海
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                  注附表报务财
       3.7.6   Providing of impairment provision on financial assets (exclude receivable
accounts)

               The Company performs inspection on the book value of financial assets apart from
               those financial assets measured at fair value through current profit and loss on the
               balance sheet date. Impairment provision is required if objective evidences of
               impairment occurs to the financial assets.



                  (1) Impairment provision of available-for-sale financial assets:

                  If there is a serious decline in fair value of the available-for-sale financial assets
                  at the end of the period, or such decline is not temporary after considering
                  various factors, the impairment shall be confirmed, the accumulated losses due
                  to decreases in fair value previously included in owner’s equity shall be
                  reversed, and the impairment loss shall be recognized.



                  If, in a subsequent period, the carrying amount of available-for-sale debt
                  instruments investments increases and the increase can be related objectively to
                  an event occurring after the impairment was recognized, the previously
                  recognized impairment losses are reversed, included in current profit or loss.



                  The impairment losses of available-for-sale equity instruments cannot be
                  reversed through profit or loss.



                  (2) Impairment provision of held-to-maturity investment:
                  Measurement of held-to-maturity investment impairment loss is governed by
                  measurement of account receivables impairment loss.


       3.8 Provision for bad debts of receivables

       3.8.1   Provision for bad debts of account receivables that are individually significant:

               Assessment basis or standard of amount individually significant: top five accounts
               receivable and other receivables in terms of individual amount at the end of the
               year.



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               Method of provision for bad debts of accounts receivable that are individually
               significant: after separate impairment test, provision for bad debts shall be made at
               the difference of present value of estimated future cash flows in short of their book
               values, and shall be include in current profit and loss. For accounts receivable with
               no impairment found after separate tests, they shall be included in corresponding
               portfolios for provisions for bad debts. For accounts receivable with confirmed
               impairment losses after separate tests, they shall not be included in portfolios of
               accounts receivable with similar credit risk features for impairment tests.




       3.8.2   Provision for bad debts of accounts receivable made on the basis of
portfolio:

                                                      Basis of determining portfolio

               Aging portfolio                                Length of the aging

                                    Method of making provision for bad debts on the basis of portfolio

               Aging portfolio                                Aging analysis method



               Proportions of provision for bad debts on the basis of aging analysis in portfolios
               are as follows:
                                                       Proportion of provision for      Proportion of provision for other
                            Aging
                                                         account receivable (%)                  receivables (%)

               Within 1 year (including 1 year)

               1-2 years                                            5                                     5

               2-3 years                                           15                                    15

               3-4 years                                           25                                    25

               4-5 years                                           50                                    50

               More than five years                                100                                   100



   3.8.3       Accounts receivable that are individually insignificant but with bad debt
provision provided on an individual basis:

               Reason for bad debt provision provided on an individual basis: For account


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               receivable with an individual balance lower than the top five at the end of the year
               and with objective evidence showing it may be impaired, and for uncollectible
               accounts receivable arising from repeal and liquidation of debtor after taking legal
               clearance procedures, their provision for bad debts shall be provided on an
               individual basis.


               Method of provision for bad debt: For accounts receivable with objective evidence
               showing they may be impaired, they shall be separate from relevant portfolios and
               separately tested for impairment to recognize the impairment losses.
               Other remarks: provision for impairment of accounts receivable, excluding debts
               receivable and other receivables, shall be made at the specific identification
               method.




       3.8.4   Reversal of bad debt provisions

               If there is evidence showing that the value of the account receivable has been
               recovered, and that the recovery is objectively related to events after recognition of
               the loss, the originally recognized impairment loss should be reversed and included
               in current profit and loss. However, the book values after such reversal shall not
               exceed the amortized costs of the account receivable on the reversal date, assuming
               there is no provision for impairment.


       3.9 Inventories

       3.9.1   Classification of inventories

               Inventories are classified into raw materials, stock commodities, low-cost
               consumables, food materials, fuels, etc.




       3.9.2   Measurement method of dispatched inventories

               Stock commodities are measured at selling price and their purchase and sale price
               differential are amortized over every month at the method of comprehensive
               differential. The purchasing and storage of stock materials are measured at actual



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               cost, and at the first-in-first-out method when fetched for use. Low-cost
               consumables are amortized in full when fetched for use.




       3.9.3   Determination basis of net realizable values of inventories and provision
method of inventory depreciation reserve

               After the comprehensive inventory count at the end of the period, provisions for
               inventory depreciation reserve are made or adjusted at the lower of their costs or net
               realizable values.


               In normal operation process, for merchandise inventories for direct sale, including
               stock commodities and materials for sale, their net realizable values are determined
               at the estimated selling prices minus the estimated selling expenses and relevant
               taxes and surcharges; for inventories held to execute sales contract or service
               contract, their net realizable values are calculated on the basis of contract price. If
               the quantities of inventories specified in sales contracts are less than the quantities
               held by the Company, the net realizable value of the excess portion of inventories
               shall be based on general selling prices.


               At the end of the period, provisions for inventory depreciation reserve are made on
               an individual basis. For inventories with large quantity and low unit price, the
               provisions for inventory depreciation reserve are made on a category basis. For
               inventories related to the product portfolios manufactured and sold in the same area,
               and of which the final usage or purpose is identical or similar thereto, and which is
               difficult to separate from other items for measurement purposes, the provisions for
               inventory depreciation reserve shall be made on a portfolio basis.


               If any factor rendering write-downs of the inventories has been eliminated, the
               amounts written down are recovered and reversed from the inventory depreciation
               reserve, which has been provided for. The reversed amounts are included into the
               current profit and loss.




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       3.9.4      Inventory system

                  Perpetual inventory system is adopted.




       3.9.5      Amortization method of low-cost consumables and packaging materials

                  (1) Low-cost consumables are amortized at lump-sum method;


                  (2) Packaging materials are amortized at lump-sum method.


       3.10      Long-term equity investments

       3.10.1     Determination basis of joint control or significant influence over the investee

                  Joint control is the relevant agreed sharing of control over an arrangement, and the
                  arranged relevant activity must be decided under unanimous consent of the parties
                  sharing control. When the Company and other joint parties do joint control and
                  have rights to the net assets over an investee, the investee shall be the Company’s
                  joint venture.


                Significant influence is the power to participate in the financial and operating policy
                decisions of the investee but is not control or joint control over those polices (such as
                has a representative in the Board or similar authority organ under the name of the
                invested unit). When an investing enterprise is able to have significant influences on
                an investee, the investee shall be its associate.




          3.10.2       Determination of investment cost

                  (1) Long-term equity investments acquired from business combinations
                      For business combination under common control: if the Company makes
                      payment in cash, transfer non-cash assets or bear debts and issues equity
                      securities as the consideration for the business combination, the book value of
                      the owners’ equity of the combinee obtained is recognized as the initial cost of
                      the long-term equity investment on the combination date. The difference
                      between the initial investment cost and the carrying amount of cash paid,


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                  non-cash assets transferred, liabilities assumed and par value of share issued
                  shall be adjusted to the stock premium in the capital reserved; if there is no
                  sufficient premium in the capital reserve for write-downs, the retained earnings
                  are adjusted.


                  When exercising control over an investee under common control due to
                  additional investment or other reasons, the initial investment cost of the
                  long-term equity investment shall be determined by the absorbing party’s share
                  of the net assets of the party being absorbed in the consolidated financial
                  statements of the ultimate controlling party at combination date. The difference
                 between the initial investment cost of the long-term equity investment at
                  combination date and the sum of the total of the carrying amount of equity
                  investment held by the acquirer before the combination date and the newly
                  increased investment on the combination date shall be adjusted to share
                 premium. If the balance of share premium is not sufficient, any excess shall be
                  adjusted to retained earnings.


                  For business combination not under common control, the Company recognizes
                  the combination cost determined on the combination date as the initial cost of
                  long-term equity investment. When exercising control over an investee not
                  under common control due to additional investment or other reasons, in
                  stand-alone financial statements, the investor shall change to the cost method
                  and use the carrying amount of the previously-held equity investment, together
                  with the additional investment cost, as the initial investment cost under the cost
                  method. The audit, legal, valuation and consulting fees, other intermediary fees,
                  and related administrative fees paid by the absorbing party or acquirer for the
                 business combination, shall be recognized in profit or loss as incurred; the cost
                  of issuing equity securities or debt securities as the combination consideration
                  shall be included in the initial cost of the equity securities or debt securities.



              (2) Long-term equity investments acquired by other means
                 For long-term equity investments acquired from making payments in cash, the
                 initial cost is the actually paid purchase cost.


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                   For long-term equity investments acquired from issuance of equity securities,
                   the initial cost is the fair value of the issued equity securities.



                   If the exchange of non-monetary assets has commercial substance, and the fair
                   values of assets traded out and traded in can be measured reliably, the initial
                   cost of long-term equity investment traded in with non-monetary assets are
                   determined based on the fair values of the assets traded out together with
                   relevant taxes unless there is any conclusive evidence that the fair values of the
                   assets traded in are more reliable. If the exchange of non-monetary assets does
                   not meet the above criteria, the book value of the assets traded out and relevant
                   taxes are recognized as the initial cost of long-term equity investment traded in.


                   For long-term equity investment acquired from debt restructuring, the initial
                   cost is determined based on the fair value.




       3.10.3       Subsequent measurement and recognition of profit or loss

                (1) Long-term equity investment adopting cost method
                   Long-term equity investments of the Company in its subsidiaries are accounted
                   for at cost method, except for the actual price paid for acquisition of
                   investment or the cash dividends or profits contained in the consideration
                   which have been declared but not yet distributed, the Company recognizes the
                   proportion it shall enjoy in the cash dividends or profits declared by the
                   investee as current investment income.


                (2) Long-term equity investment adopting equity method
                   A long-term equity investment in an associate or a joint venture shall be
                   accounted for using the equity method. If the cost of initial investment is in
                   excess of the proportion of the fair value of the net identifiable assets in the
                   investee when the investment is made, the difference will not be adjusted to the
                   initial cost of long-term equity investment; if the cost of initial investment is in
                   short of the proportion of the fair value of the net identifiable assets in the
                   investee when the investment is made, the difference will be included in the

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                  current profit and loss.


                  The Company recognizes the share of the investee’s net profits or losses, as
                  well as its share of the investee’s other comprehensive income, as investment
                  income or losses and other comprehensive income, and adjusts the carrying
                  amount of the investment accordingly. The carrying amount of the investment
                  shall be reduced by the portion of any profit distributions or cash dividends
                  declared by the investee that is attributable to the investor. The investor’s share
                  of the investee’s owners’ equity changes, other than those arising from the
                  investee’s net profit or loss, other comprehensive income or profit distribution,
                  would be recognized in the investor’s equity, and the carrying amount of the
                  long-term equity investment shall be adjusted accordingly.


                  The Company recognizes its share of the investee’s net profits or losses after
                  making appropriate adjustments based on the fair values of the investee’s
                  identifiable net assets at the acquisition date according to the Company’s
                  accounting policies and accounting period. When holding the investment, if the
                  investee is capable of providing consolidated financial statements, the profit or
                  loss shall be measured based on the net profit, other comprehensive income
                  and other changes in owners’ equity attributed to the Company recorded in the
                  consolidated financial statements.


                  The unrealized profits or losses resulting from transactions between the
                  Company and its associate or joint venture are eliminated in proportion to the
                  Company’s equity interest in the investee, based on which investment income
                  or losses shall be recognised. Any losses resulting from transactions between
                  the investor and the investee, which are attributable to asset impairment shall
                 be recognized in full. The transactions of investing or selling assets between
                  the Company and its associate or joint venture are accounted for under relevant
                  accounting policies when the asset constitutes a business.



                  When the Company confirms that it should share losses of the investee,
                  treatment shall be done in following sequence: firstly, the book value of the
                  long-term equity investment shall be reduced; secondly, where the book value
                  is insufficient to cover the share of losses, investment losses are recognized to


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                  the extent of book value of long-term equity which form net investment in the
                  investee in substance and the book value of long-term equity shall be reduced;
                  finally, after all the above treatments, if the Company is still responsible for
                  any additional liabilities in accordance with the provisions stipulated in the
                  investment contracts or agreements, estimated liabilities are recognized and
                  included into current investment loss according to the obligations estimated to
                  undertake. If the investee achieves profit in subsequent periods, the treatment is
                  in the reversed sequence described above, i.e. after deduct any unrecognized
                  investment losses, reduce book value of estimated liabilities recognized, restore
                  book values of other long-term equity which form net investment in the
                  investee in substance, and of long-term equity investment, and recognize
                  investment income at the same time.


              (3) Disposal of long-term equity investment
                  On disposal of a long-term equity investment, the difference between the
                  proceeds actually received and the carrying amount shall be recognized in
                  profit or loss for the current period.


                  For a long-term equity investment accounted for using the equity method, any
                  other comprehensive income previously recognized shall be accounted for on
                  the same basis as would have been required if the investee had directly
                  disposed of the related assets or liabilities on a por-rata basis upon the disposal
                  of the equity investment. The owners’ equity recognised due to the investor’s
                  share of the investee’s owners’ equity changes, other than those arising from
                  the investee’s net profit or loss, other comprehensive income or profit
                  distribution, is included in current profit or loss on a pro-rata basis.


                  When the Company can no longer exercise joint control of or significant
                  influence over an investee due to partial disposal of equity investment or other
                  reasons, the remaining equity investment shall be accounted for in accordance
                  with “Accounting Standard for Business Enterprises No.22-Financial
                  Instruments: Recognition and Measurement”. The difference between the fair
                  value and the carrying amount at the date of the loss of joint control or



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                  significant influence shall be charged to profit or loss for the current period.
                  When the previously-held equity investment is accounted for under the equity
                  method, any other comprehensive income previously recognized shall be
                  accounted for on the same basis as would have been required if the investee
                  had directly disposed of the related assets or liabilities for the current period
                  upon discontinuation of the equity method. The owners’ equity recognised due
                  to the investor’s share of the investee’s owners’ equity changes, other than
                  those arising from the investee’s net profit or loss, other comprehensive income
                  or profit distribution, is transferred to current profit or loss upon
                  discontinuation of the equity method.


                  When no longer exercise control over an investee due to partial disposal of
                  equity investment or other reasons, and with the retained interest, still has joint
                  control of , or significant influence over, the investee, when preparing the
                  individual financial statements, the Company shall change to the equity method
                  and adjust the remaining equity investment as if the equity method had been
                  applied from the date of the first acquisition. If the Company can not exercise
                 joint control of or significant influence over the investee after partial disposal
                  of equity investment, the remaining equity investment shall be accounted for in
                  accordance     with    “Accounting        Standard   for   Business   Enterprises
                 No.22-Financial Instruments: Recognition and Measurement”, and the
                 difference between the fair value and carrying amount at the date of the loss of
                 control shall be charged to profit or loss for the current period.


                 The equity investment disposed was obtained over additional investment or
                 other reasons through business combination, when preparing the individual
                 financial statements, and the remaining equity investment accounted on cost
                 method or equity method, the other comprehensive income and other owner’s
                 equity recognized due to the equity investment held before acquisition date was
                 accounted for under the equity method are carried forward on a pro-rata basis;
                 when the remaining equity investment is accounted for in accordance with
                 “Accounting Standard for Business Enterprises No. 22 – Financial Instruments:
                 Recognition and Measurement”, the other comprehensive income and other



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                  owner’s equity are totally carried forward.


       3.11   Investment property
                  Investment property refers to possessing real estate for gaining rent or capital
                  appreciation, or both, including the rental of the land use right, possession and
                  prepare to value-added after the transfer of the land use rights and the rental of
                  buildings leased (Including rental buildings after completion of construction or
                  development activities or in the development processing).


                  Investment property is measured at their actual cost in the Company. Due to
                  the method of determining is actual cost model for investment property-its
                  method of provision for depreciation policy is same with fixed assets’ when the
                  investment properties are constructions or buildings, its method of provision
                  for amortization policy is same with Intangible assets’ when the investment
                  property is land usage right.



       3.12   Fixed assets

   3.12.1     Recognition criteria of fixed assets

              Fixed assets refer to the tangible assets held for the purpose of producing
              commodities, rendering services, renting or business management with useful lives
              exceeding one year. Fixed assets will only be recognized when all the following
              criteria are satisfied:
              (1) It is probable that the economic benefits relating to the fixed assets will flow
                   into the Company;
              (2) The costs of the fixed assets can be measured reliably.



   3.12.2     Classification of fixed assets

              Fixed assets are classified into buildings and constructions, machinery equipment,
              transportation equipment, electronic entertainment equipment, other equipment and
              Improvement.




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   3.12.3     Initial measurement of fixed assets

              Fixed assets are initially measured at their actual cost when acquired.


              The costs of a purchased fixed asset are determined at the purchase price, the
              relevant taxes, and the traffic expenses, loading and unloading fees, installation
              fees and professional service fees arising from preparing the fixed asset for its
              intended use.


              If the payment for a fixed asset is delayed beyond the normal credit conditions and
              it is of financing nature in effect, the costs of the fixed asset shall be determined
             based on the present value of the purchase price.


              The cost of a self-constructed fixed asset shall be formed by the necessary expenses
              incurred for preparing the asset for its intended use.


              The fixed assets which the debtor uses to pay back the debt in debt restructuring
              should be recognized at the fair value of the fixed assets. The difference between
              the book value of restructured debts and the fair value of fixed assets used to pay
             back the debt should be recorded into current profit and loss;


              On the premise that non-monetary asset trade is of commercial nature and the fair
              value of the asset traded in or out can be measured reliably, the fixed asset traded in
              with non-monetary asset should be recognized at the fair value of the asset traded
              out, unless any unambiguous evidence indicates that the fair value of the asset
              traded in is more reliable; as to the non-monetary asset trade not meeting the
              aforesaid premise, the book value of the asset traded out and related taxes and
              surcharges payable should be recognized as the cost of the fixed asset, with gains or
              losses not recognized.


              As for the book-entry value, the fixed assets acquired from the absorption and
              merger of an enterprise under common control are recognized at the book value of
              the merged enterprise; the fixed assets acquired from the absorption and merger of
              an enterprise not under common control are recognized at the fair value.



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              The book-entry value of a fixed asset acquired under financing lease is measured at
              the asset’s fair value on the commencement date of the lease or the present value of
              the minimum lease payment, whichever is lower.




   3.12.4     Method of provision for impairment of fixed assets

              The fixed assets are depreciated at straight-line-method, and the depreciation rates
              are determined as follows based on the category, estimated economic useful lives
              and estimated residual values (5% of original values):



                                                                Estimated net residual   Annual depreciation
                                        Estimated useful life
                     Category                                            rate                   rate
                                               (Year)
                                                                         (%)                    (%)

              Buildings and
                                               20-40                      5                   4.75-2.37
              constructions

              Machinery equipment               8-20                      5                  11.87-4.75

              Electronic

              entertainment                     5-16                      5                   19-5.93

              equipment

              Transportation
                                                7-12                      5                  13.57-7.91
              equipment

              Other equipment                    8                        5                    11.87

              Improvement                        5                                               19



3.13     Construction in progress
        The initial book values of the fixed assets are stated at total expenditures incurred before
        construction in progress reaches the working condition for their intended use. For
        construction in progress that has reached working conditions for its intended use but for
        which the completion of settlement has not been handled, it shall be transferred into fixed
        assets at the estimated value according to the project budget, construction price or actual
        cost, etc. from the date when it reaches the working conditions for its intended use. And

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         the fixed assets shall be depreciated in accordance with the Company’s policy on fixed
         asset depreciation. Adjustment shall be made to the originally and provisionally estimated
         value based on the actual cost after the completion of settlement is handled, but
         depreciation already provided will not be adjusted.


       3.14    Borrowing costs

   3.14.1      Recognition principles of capitalization of borrowing costs

               Borrowing costs include the interest of borrowings, the amortization of discount or
               premium, auxiliary expenses, exchange differences incurred by foreign currency
               borrowings, etc.


               The borrowing costs incurred to the Company and directly attributable to the
               acquisition and construction or production of assets eligible for capitalization
               should be capitalized and recorded into asset costs; other borrowing costs should be
               recognized as costs according to the amount incurred and be included into current
               profit and loss.


               Assets eligible for capitalization refer to fixed assets, investment property,
               inventories and other assets which may reach their intended use or sale status only
               after long-time acquisition and construction or production activities.


               Borrowing costs may be capitalized only when all the following conditions are met
               at the same time:
               (1) Asset disbursements, which include those incurred by cash payment, the
                    transfer of non-cash assets or the undertaking of interest-bearing debts for
                    acquiring and constructing or producing assets eligible for capitalization, have
                    already been incurred;


               (2) Borrowing costs have already been incurred;


               (3) The acquisition and construction or production activities which are necessary
                    to prepare the assets for their intended use or sale have already been started.




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   3.14.2     Capitalization period of borrowing costs

              Capitalization period refers to the period from the beginning of capitalization to the
              cease of capitalization, excluding the period of capitalization suspension of
              borrowing costs.


              Capitalization of borrowing costs should be ceased when the acquired and
              constructed or produced assets eligible for capitalization have reached their
              intended use or sale condition.


              When some projects among the acquired and constructed or produced assets
              eligible for capitalization are completed and can be used separately, the
              capitalization of borrowing costs of such projects should be ceased.


              If all parts of the acquired and constructed or produced assets are completed but the
              assets cannot be used or sold externally until overall completion, the capitalization
              of borrowing costs should be ceased at the time of overall completion of the said
              assets.




   3.14.3     Period of capitalization suspension

              If the acquisition and construction or production activities of assets eligible for
              capitalization are interrupted abnormally and this condition lasts for more than
              three months, the capitalization of borrowing costs should be suspended; if the
              interruption is necessary for the acquisition and construction or production to
             prepare the assets for their intended use or sale, the capitalization of borrowing
             costs should continue. The borrowing costs incurred during interruption are
             recognized in the current profit and loss, and the capitalization of borrowing costs
             continues after the restart of the acquisition and construction or production
             activities of the assets.




   3.14.4     Calculation method of capitalization amount of borrowing costs

              As for special borrowings borrowed for acquiring and constructing or producing


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              assets eligible for capitalization, borrowing costs of special borrowing actually
              incurred in the current period less the interest income of the loans unused and
              deposited in bank or return on temporary investment should be recognized as the
              capitalization amount of borrowing costs.


              As for general borrowings used for acquiring and constructing or producing assets
              eligible for capitalization, the interest of general borrowings to be capitalized
              should be calculated by multiplying the weighted average of asset disbursements of
              the part of accumulated asset disbursements exceeding special borrowings at the
              end of every month by the capitalization rate of used general borrowings. The
              capitalization rate is calculated by weighted average interest rate of general loans.


             As for borrowings with discount or premium, the to-be-amortized discount or
             premium in each accounting period should be recognized by effective interest rate
             method, and the interest for each period should be adjusted.


          3.15     Intangible assets

        3.15.1     Measurement method of intangible assets

              (1) The Company initially measures intangible assets at cost on acquisition;
                  The cost of an externally acquired intangible asset comprises its purchase price,
                  related taxes and surcharges and any other directly attributable expenditure of
                  preparing the asset for its intended use. If the deferred payment of purchase
                  price of intangible assets exceeding normal credit terms is substantially of
                  financial nature, the cost of intangible assets should be recognized at the
                  present value of the purchase price.


                  The intangible assets which the debtor uses to pay back the debt in debt
                  restructuring should be recognized at the fair value of the intangible assets. The
                  difference between the book value of restructured debts and the fair value of
                  intangible assets used to pay back the debt should be recorded into the current
                  profit and loss;




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                    On the premise that non-monetary assets trade is of commercial nature and the
                    fair value of the assets traded in or out can be measured reliably, the intangible
                    assets traded in by the trade of non-monetary assets should be recognized at the
                    fair value of the assets traded out, unless any unambiguous evidence indicates
                    that the fair value of the assets traded in is more reliable; as to the
                    non-monetary assets trade not meeting the aforesaid premise, the book value of
                    the assets traded out and related taxes payable should be recognized as the cost
                    of the intangible assets traded in, with gains or losses not recognized.


                    The intangible assets obtained by the absorption and merger of an enterprise
                    under common control are recognized at the book value of the merged
                    enterprise; the intangible assets obtained by the absorption and merger of an
                    enterprise not under common control are recognized at the fair value.


                    Costs of intangible assets developed internally and independently include: the
                    costs of materials and labor services used to develop the intangible assets, the
                    registration fee, the amortization of other patents and franchise used in the
                    process of development, the interest of capitalization, and other direct expenses
                    for preparing the intangible assets for their intended use.


                (2) Subsequent measurement
                    The useful life of intangible asset is analyzed on acquisition.


                    As for intangible assets with limited useful lives, straight-line amortization
                    method is adopted in the period when the intangible assets generate economic
                    benefit for enterprise; if the period when the intangible assets generate
                    economic benefit for enterprise cannot be forecasted, the intangible assets
                    should be deemed as those with indefinite useful lives and should not be
                    amortized.




       3.15.2   Estimation of useful life of intangible assets with limited useful life

                                 Item                Estimated useful life                       Basis

                Land use right                                50 years            Validity term of land use certificate




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               The useful lives and amortization method of intangible assets with limited useful
               lives are reviewed at the end of each period.
               Upon review, the useful lives and amortization method of the intangible assets as at
               the end of the year are not different from those estimated before.




   3.15.3      Determination basis of intangible assets with indefinite useful lives

               As at the balance sheet date, the Company has no intangible assets with indefinite
               useful lives.


       3.16    Impairment of long-term assets
         If there is any indication that the long-term assets such as long-term equity investment,
         investment properties accounted through cost pattern, fixed assets, construction in
         progress, intangible assets etc. may be impaired at the balance sheet date, an impairment
         test would be implemented. If the result of impairment test indicates the recoverable
         amounts of the long-term assets are lower than their book values, the difference between
         the recoverable amounts and book values is recognized as impairment loss, provisions for
         impairment of the long-term assets are made. The recoverable amounts of the long-term
         assets are the higher of their fair values less costs to disposal and the present values of the
         estimated future cash flows of the long-term assets. The provision for impairment is
         recognized and calculated on the individual basis. If it is difficult to estimate the
         recoverable amount of the individual asset, the Company estimates the recoverable
         amount of the asset group that the individual asset belongs to. The asset group is the
         minimum asset group which can generate cash flows independently.


         The mentioned impairment loss will not be reversed in subsequent accounting period
         once it had been recognized.


       3.17    Long-term deferred expenses
         Long-term deferred expenses are various expenses already incurred, which shall be
         amortized over current and subsequent periods with the amortization period exceeding
         one year.




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   3.17.1         Amortization method

                Long-term deferred expenses are evenly amortized over the beneficial period.




   3.17.2         Amortization period

                                         Item                                   Amortization period

                 Hotel exterior wall decoration                                                           4 years



       3.18      Employee compensation

       3.18.1       Short-term employee benefits

                  The Company recognizes, in the accounting period in which an employee provides
                  service, actually occurred short-term employee benefits as a liability, with a
                  corresponding charge to current profit or loss or relevant cost of assets.


                  Payments made by the Company of social security contributions for employees,
                  and union running costs and employee education costs provided in accordance with
                  relevant requirements, in the accounting period in which employees provide
                  services, is calculated according to prescribed bases and percentages of provision in
                  determining the amount of employee benefits.


                  Employee benefits which are non-monetary benefits are measured at fair value.




       3.18.2       Termination benefits

                  When the Company cannot unilaterally withdraw the offer of termination benefits
                  because of an employment termination plan or a curtailment proposal, or when the
                  Company recognizes costs or expenses related to a restructuring that involves the
                  payment of termination benefits (the earlier is adopted), the employee benefits
                  liabilities caused by termination benefits are recognized and included in current
                  profit or loss.




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       3.18.3     Post-employment benefits

                Payments made by the Company of basic endowment insurance and unemployment
                insurance in accordance with relevant requirements of local government, in the
                accounting period in which employees provide services, is calculated according to
                prescribed bases and percentages of provision of local requirements in determining
                the amount payable, is recognized as a liability, with a corresponding charge to
                current profit or loss or relevant cost of assets.


       3.19     Estimated liabilities
                When the Company is involved in proceedings, debt guarantees, onerous contracts
                and reorganization events, if such events may require delivery of assets or
                rendering of services in the future and the amounts of such events can be reliably
                measured, estimated liabilities are recognized.




   3.19.1       Recognition criteria of estimated liabilities

                The Company recognizes the estimated liabilities when obligations related to
                contingencies satisfy all the following conditions:
                (1) The obligation is a present obligation of the Company;


                (2) The performance of the obligation is likely to result in outflow of economic
                     benefits from the Company; and


                (3) The amount of the obligation can be measured reliably.




   3.19.2       Measurement method of estimated liabilities

                The estimated liabilities of the Company are initially measured as the best estimate
                of expenses required for the performance of relevant present obligations.


                The Company, when determining the best estimate, has had a comprehensive



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                consideration of risks with respect to contingencies, uncertainties and the time
                value of money. If the time value of money is significant, the best estimate shall be
                determined after discounting the relevant future outflow of cash.


                The best estimate shall be accounted as follows in different circumstances:


                If there is continuous range (or interval) for the necessary expenses, and
                probabilities of occurrence of all the outcomes within this range are equal, the best
                estimate shall be determined at the average amount of upper and lower limits
                within the range.



                If there is no continuous range (or interval) for the necessary expenses, or
                probabilities of occurrence of all the outcomes within this range are unequal despite
                such a range exists, the outcomes within this range are unequally likely to occur, in
                case that the contingency involves a single item, the best estimate shall be
                determined at the most likely outcome; if the contingency involves two or more
                items, the best estimate should be determined according to all the possible
                outcomes with their relevant probabilities.


                When all or part of the expenses necessary for the settlement of an estimated
                liability of the Company is expected to be compensated by a third party, the
                compensation should be separately recognized as an asset only when it is virtually
                certain that the compensation will be received. The amount recognized for the
                compensation should not exceed the book value of the estimated liability.


        3.20    Revenue

       3.20.1    Recognition and measurement principles of revenue from sales of goods

                (1) Overall recognition and measurement principles of revenue from sales of
                     goods
                    When the Company has transferred significant risks and rewards of ownership
                    of the goods to the buyer; the Company retains neither continuous management
                    rights associated with ownership of the goods sold nor effective control over



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                    the goods sold; the relevant amount of revenue can be measured reliably; it is
                    highly likely that the economic benefits associated with the transaction will
                    flow into the enterprise, and the relevant amount of cost incurred or to be
                    incurred can be measured reliably, revenue from sales of goods shall be
                    recognized.


                (2) Recognition criteria of revenue from selling goods and specific recognition
                     timing criteria of revenue of the Company
                     The Company provides hotel accommodation service as well as goods. After
                     the recognition of both housekeeping department and hotel reception desk, the
                     daily business report is established. The accounting department makes sure the
                     significant risks and rewards of ownership of the goods have been transferred
                     to the client, the selling revenue is recognized.


       3.20.2     Recognition and measurement principles of revenue from providing labor
services
                (1) The hotel room service, catering (breakfast) service etc. of the Company, after
                     the hotel room service, catering (breakfast) service etc. had provided, and each
                     consumption department had checked with the receptionist, the daily business
                     report and detailed report of account receivables are established, and the
                     reports are submitted to accounting department, which recognizes the revenue
                     after examining the daily reports.


                (2) Revenue from outsourced restaurant and site rental is recognized according to
                     contract or agreement time period and time of collecting.




   3.20.3       Recognition basis of revenue from transferring the use right of assets

                The economic benefits related to the transaction may flow into entities and the
                amount of revenue can be reliably measured. The amount of revenue from
                transferring use right of assets is recognized as follows in different circumstances:
                (1) The amount of interest income is determined by the time and effective interest
                     rate for others to use the monetary fund of the Company.


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              (2) The amount of revenue from usage is determined according to the charging
                   time and method as agreed in relevant contract or agreement.


       3.21   Government subsidies

   3.21.1     Types

              Government subsidies are monetary assets and non-monetary assets acquired free
              of charge by the Company from the government. Government subsidies are
              classified into government subsidies related to assets and government subsidies
              related to income.



   3.21.2     Accounting treatment

              Government subsidies related to acquisition and construction of fixed assets,
              intangible assets and other long-term assets are recognized as deferred income, and
              included in non-operating income by stages within the useful life of the assets
              acquired and constructed;


              If government subsidies related to income are used to compensate the enterprise’s
              relevant expenses or losses in future periods, such government subsidies should be
              recognized as deferred income on acquisition and be included into the current
              non-operating income in the period of recognizing relevant expenses; if
              government subsidies related to income are used to compensate the enterprise’s
              relevant expenses or losses incurred, such government subsidies are directly
              included into the current non-operating income on acquisition.


 3.22     Deferred income tax assets and deferred income tax liabilities
              Deductible temporary differences are recognized as deferred income tax assets to
              the extent that it shall not exceed future taxable income possibly available to be
              against the deductible temporary difference.


              Deductible temporary differences are recognized as deferred income tax liabilities
              except in special circumstances.



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              Special circumstances in which deferred income tax assets or deferred income tax
              liabilities shall not be recognized include: the initial recognition of goodwill; other
              transactions or matters excluding business combinations, which affect neither
              accounting profits nor the taxable income (or deductible losses) when occurred.


              If the Company has the legal right of netting and intends to settle in net amount or
              to obtain assets and discharge liabilities simultaneously, the income tax assets and
              income tax liabilities of the Company for the current period shall be presented
              based on the net amount after offset.


              When the Company has the legal rights to balance income tax assets and income
              tax liabilities in current period with net settlement, and deferred income tax assets
              and deferred income tax liabilities are related to the income tax which imposed on
              the same taxpaying subject by the same tax collection authority or to different
              taxpaying subjects, but, in each important future period in connection with the
              reverse of deferred income tax assets and liabilities, the involved taxpaying subject
              intends to balance income tax assets and liabilities in current period with net
              settlement at the time of obtaining assets and discharging liabilities, deferred
              income tax assets and deferred income tax liabilities of the Company shall be
              presented based on the net amount after offset.


       3.23   Operating lease

   3.22.1     Accounting of leased assets

              Lease fees paid by the Company for leased asset shall be amortized at straight-line
              method over the whole lease period (including rent-free period) and shall be
              included in the current expenses. Initial direct costs related to lease transactions
              paid by the Company shall be included in the current expenses.


              If the expense related to the lease which shall be paid by the Company is assumed
              by the lessor of the asset, such expenses shall be deducted from total lease fees, and
              residual lease fees shall be amortized over the lease period and included in the
              current expenses.



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   3.23.2      Accounting of leasing assets

               Lease fees received by the Company from leasing assets shall be amortized at
               straight-line method over the whole lease period (including rent-free period), and
               shall be recognized as lease income. Initial direct costs related to lease transactions
               paid by the Company shall be included in the current expenses; if the amount is
               large, it shall be capitalized, and shall be included in the current income by stages
               within the whole lease period on same basis for recognition of lease income.


               If the expenses related to the lease which shall be paid by the lessee are borne by
               the Company, such expenses shall be deducted from total lease income by the
               Company, and residual lease fees shall be amortized over the lease period.



       3.24    Adjustments for changes in principal accounting policies and
estimates

   3.24.1      Adjustments for changes in accounting policies

               There are no changes in principal accounting policies for the Company during the
               reporting period.



   3.24.2      Adjustments for changes in accounting estimates

               There are no changes in principal accounting estimates for the Company during the
               reporting period.



 4 Taxation

       Major tax types and tax rates applicable to the Company

                   Taxation type                   Basis of tax assessment                  Tax rate
                                          Differential section of VAT calculated on
                                          revenue from sale of goods and service
                                                                                       5%, 6%, 11%, 17%
         Value added tax (VAT)            deduct VAT paid in current period in




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                                            accordance with tax law

                                            Levy by taxable business revenue
          Business tax                                                                                    5%

          Urban maintenance and             Levy by the taxable business tax and VAT
                                                                                                          7%
          construction tax

                                            Levy by the taxable business tax and VAT
          Education surcharge                                                                             3%
                                            Levy by the taxable business tax and VAT
          Local education surcharge                                                                       2%
                                            Remaining value after deducting 30% of
                                            the original value of houses (including
          Property tax                                                                              1.2%, 12%
                                            land price), Rental income


          Land use tax                      Land area                                               18 yuan/    ㎡
                                            Levy by taxable income
          Enterprise income tax                                                                           25%

        Other explanation: In accordance with the “Fully Implementation of the Pilot Proposals for
        the Change from Business Tax to Value-Added Tax” (Cai Shui [2016] No.36) issued by
        Ministry of Finance and SAT, the proposals for the change from business tax to VAT will
        carry out since 1 May 2016, the Company pay the VAT with rate of 5%, 6%, 11% and 17%
        respectively for different business revenue.




5      Notes to the main items of financial statements

5.1 Monetary funds
                         Item                    Ending balance                       Beginning balance

          Cash                                                  329,071.51                         273,523.86

          Bank Deposit                                      9,779,104.40                        26,936,724.15

                         Total                             10,108,175.91                        27,210,248.01

          The main reason for the decrease in bank deposits is to pay RMB 10 million to
          Luoniushan Group Co., Ltd. and pay RMB 9 million to Wuhan Aierjia Technology
          Development Co., Ltd. for the creditors’ investment.
          Other notes: The closing balance is unsecured, unfrozen or doesn’t have other restrictions
          on realization or the funds deposit in the overseas, or have potential recovery risks.




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5.2 Accounts receivable

5.2.1    Accounts receivable by type

                                                              Ending balance                                                       Beginning balance

                                       Book balance             Provision for bad debts                      Book balance            Provision for bad debts
                 Type                                                                        Book                                                                 Book
                                                   Proporti                      Proporti                               Proporti                       Proporti
                                    Amount                        Amount                     Value        Amount                       Amount                     Value
                                                      on                           on                                       on                           on

        Accounts receivable

        with large single

        amount and accrued          1,466,400.49   57.13%        1,466,400.49    100.00%                 1,466,400.49   50.22%        1,466,400.49     100.00%

        for provision of bad

        debt on a single basis

        Accounts receivable

        accrued for provision
                                    1,100,308.71   42.87%          763,121.66     69.36%    337,187.05   1,453,566.38   49.78%          763,121.66     52.50%     690,444.72
        of bad debt by

        portfolio

        Accounts receivable

        with insignificant single

        amount but accrued for

        provision of bad debt


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                                                           Ending balance                                                       Beginning balance

                                    Book balance             Provision for bad debts                      Book balance            Provision for bad debts
                Type                                                                      Book                                                                 Book
                                                Proporti                      Proporti                               Proporti                       Proporti
                                 Amount                        Amount                     Value        Amount                       Amount                     Value
                                                   on                           on                                       on                           on

       on a single basis

                Total            2,566,709.20   100.00%       2,229,522.15     86.86%    337,187.05   2,919,966.87   100.00%       2,229,522.15     76.35%     690,444.72




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       (1)      Accounts receivable with large single amount and accrued for provision of bad debt
       on a single basis as at June 30, 2017

                                                                           Ending balance
              Content of accounts
                                                           Provision for       Proportion of
          receivable (By Company)         Book balance                                           Reason for provision
                                                            bad debts          provision (%)

                                                                                                Over five years, the bill

        Sanya       Power     Supply                                                             signing expenses was
                                             775,304.98      775,304.98             100.00%
        Company                                                                                    un-collectable for

                                                                                                  personnel changes

                                                                                                Over five years, the bill

        Hainan Hong Kong & Macao                                                                 signing expenses was
                                             464,563.21      464,563.21             100.00%
        International Tourism Ltd.                                                              un-collectable for bills

                                                                                                    un-recognized

                                                                                                Over five years, the bill

                                                                                                 signing expenses was
        Sanya City Council reception         101,652.32      101,652.32             100.00%
                                                                                                   un-collectable for

                                                                                                  personnel changes

        LLC SOUTH CROSS
                                             124,879.98      124,879.98             100.00%
        TRAVELINN                                                                              Had declared bankruptcy

                     Total                 1,466,400.49    1,466,400.49




        (2)     Accounts receivable accrued for provision of bad debt by aging analysis method in
       portfolio:

                                                                     Ending balance
                Aging
                                     Accounts receivable             Provision for bad debts   Proportion of provision

        Within 1 year                              298,461.50


        1-2 years                                   18,633.00                         931.65            5.00%


        2-3 years                                    5,262.00                         789.30            15.00%


        3-4 years                                    6,942.00                       1,735.50            25.00%


        4-5 years                                   22,690.00                     11,345.00             50.00%



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        More than five
                                                     748,320.21                     748,320.21              100.00%
        years

                Total                              1,100,308.71                     763,121.66               69.36%

       5.2.2        Situation of withdrawing or write-off for bad debts provision of accounts
                receivable in current period

               No situation of withdrawing or write-off for bad debts provision of accounts
               receivable in current period.


       5.2.3 Top five accounts receivable

                                      Relationship                                                   Proportion in total

                  Name                  with the          Book balance               Aging          accounts receivable
                                                                                                            (%)
                                       Company

        Sanya Power Supply            Non related                                More than five
                                                              775,304.98                                   30.21%
        Company                                                                      years
                                         party

        Hainan Hong Kong &
                                      Non related
        Macao       International                             464,563.21         More than five            18.10%
        Tourism Ltd.                     party                                       years

        LLC SOUTH CROSS               Non related
                                                              124,879.98           2-3 years               4.87%
        TRAVELINN
                                         party

        Reception       centre   of
                                      Non related
        Sanya           Municipal                             101,652.32         More than five            3.96%
        Committee                        party                                       years

        Hainan Baoping Travel         Non related                                More than five
                                                               46,798.32                                   1.82%
        Agency                                                                       years
                                         party

                   Total                                     1,513,198.81                                  58.95%

        5. 3 Prepayments
        5.3.1 Aging analysis of repayment
                                                 Ending balance                              Beginning balance
                  Aging
                                       Book balance            Proportion            Book balance           Proportion

        Within 1 year
                                                 38,660.36             100.00%                 58,783.23         100.00%

                   Total                         38,660.36             100.00%                 58,783.23         100.00%

                 Other explanation: prepayment including the insurance expenses, fuel costs and


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                book allowance etc.


       5.3.2 Top five prepayment collected by objects at ending balance
                                                                              Proportion in total
                            Name                          Book balance
                                                                               prepayment (%)

       Sunshine Property Insurance Co., LTD Hainan
                                                                  19,445.29                 50.30%
       Branch

       China Petrochemical Marketing Co. Ltd Sanya
                                                                   9,036.31                 23.37%
       Branch

       China Post Group Corporation Sanya Branch                   5,400.00                 13.97%

       Sanya Daily Office                                          4,778.76                 12.36%

                            Total                                 38,660.36                100.00%




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       5.4 Other receivables

       5.4.1     Other receivables by type:

                                                                        Ending balance                                                            Beginning balance

                                                 Book balance              Provision for bad debts                          Book balance              Provision for bad debts
                         Type                                                                               Book                                                                   Book
                                                                                          Proportio                                    Proporti                       Proportio
                                             Amount        Proportion       Amount                           Value       Amount                        Amount                       Value
                                                                                              n                                            on                            n

          Other receivables with large

          single amount and accrued                                                                                     77,363,143.3
                                           77,363,143.31     98.67%      77,363,143.31     100.00%                                     98.85%        77,363,143.31    100.00%
                                                                                                                                   1
          for provision of bad debt on a

          single basis

          Other receivables accrued for
                                                                                                                                                                                  174,103.5
          provision of bad debt by          1,045,483.05        1.33%       729,098.81      69.74%         316,384.24    903,202.33     1.15%          729,098.81      80.72%
                                                                                                                                                                                          2
          portfolio

          Other receivables with

          insignificant single amount

          but accrued for provision of

          bad debt on a single basis
                                                                                                                        78,266,345.6    100.00                                    174,103.5
                         Total             78,408,626.36    100.00%      78,092,242.12      99.60%         316,384.24                                78,092,242.12     99.78%
                                                                                                                                   4        %                                             2




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       (1)       Other receivables with large single amount and accrued for provision of bad debt on a
       single basis as at period-end

               Other                                            Ending balance

        receivables (By                     Provision for     Proportion of
                            Book balance                                                 Reason for provision
             Company)                         bad debts        provision

        Hainan                                                                     Over five years account age,

        Dadonghai           54,767,945.15   54,767,945.15         100.00%         un-collectable     for debtor has

        Hotel Co., Ltd.                                                                  abnormal operation

        Cash dividends

        distributed in      16,899,000.00   16,899,000.00         100.00%                   un-collectable
        1994-1996

        Hainan Hong
                                                                                   Over five years account age,
        Kong & Macao
                             4,145,704.16    4,145,704.16         100.00%        un-collectable for mis-listing the
        International
        Tourism Ltd.                                                                contract income on account


        Guangdong                                                                 The bonus money before 1996,

        Jinma Tourism        1,200,494.00    1,200,494.00         100.00%      un-collectable for equity change with

        Ltd.                                                                                Shenzhen Difu

                                                                               un-collectable for the trustee fee paid

        Shareholder           350,000.00      350,000.00          100.00%      on behalf of other shareholders while

        custody fee                                                                             listing

               Total        77,363,143.31   77,363,143.31



       (2)       Other receivables accrued for provision of bad debt by aging analysis method in
       portfolio:

                                                                     Beginning balance

                    Aging                                                                      Proportion of provision
                                      Accounts receivable        Provision for bad debts
                                                                                                          (%)

        Within 1 year                            298,329.64

        1-2 years                                 18,468.00                       923.40                              5.00

        2-3 years                                    600.00                         90.00                         15.00




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                  注附表报务财
                                                                              Beginning balance

                      Aging                                                                            Proportion of provision
                                                 Accounts receivable     Provision for bad debts
                                                                                                                (%)

          More than five years                              728,085.41                  728,085.41                      100.00

                      Total                               1,045,483.05                  729,098.81




          5.4.2       Provision for bad debts accrued, regain or switch back in the Period
               No provision for bad debts accrued, regain or switch back in the Period.


       5.4.3      Other receivables by fund quality

                       Fund quality                           Ending book balance                  Beginning book balance

          Original relevant companies fund
                                                                          54,767,945.15                          54,767,945.15
          accounts

          Contracting profit receivable                                       4,145,704.16                        4,145,704.16

          Distributing dividends receivable                               18,099,494.00                          18,099,494.00

          Guarantee deposit                                                    563,818.99                           563,818.99

          Advance money for custody fee                                        350,000.00                           350,000.00

          Other fund accounts                                                  245,477.64                             23,114.20

          Petty money                                                           78,772.22                             78,772.22

          Utilities                                                             92,411.70                           164,165.49

          Money from invested items                                             30,500.00                             30,500.00

          Personal      social        security    、                            29,502.50                             37,831.43
          Accumulation fund

          Project funds                                                          3,700.00                              3,700.00

          Cash deposit for invoices                                              1,300.00                              1,300.00

                              Total                                       78,408,626.36                          78,266,345.64




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       5.4.4       Top five other account receivables collected by arrears party at ending balance
                                                                                                Proportion in           Ending
                                             Nature of            Ending
                 Company name                                                      Aging          total other       balance of bad
                                              money               balance
                                                                                                 receivables        debt provision

          Hainan Dadonghai Hotel             Current                             More than
                                                           54,767,945.15                           69.85%            54,767,945.15
          Co., Ltd.                          accounts                            five years

                                           Dividends
                                          distributed
          Cash                dividends                                          More than
                                          and ought to     16,899,000.00                           21.55%            16,899,000.00
          distributed in 1994-1996                                               five years
                                                be
                                           recovered

          Hainan Hong Kong &
                                             Current                             More than
          Macao           International                      4,145,704.16                          5.29%              4,145,704.16
                                             accounts                            five years
          Tourism Ltd.

          Guangdong              Jinma                                           More than
                                           Dividends         1,200,494.00                          1.53%              1,200,494.00
          Tourism Ltd.                                                           five years

                                                                                 More than
          Shareholder custody fee         Custody fee             350,000.00                       0.45%               350,000.00
                                                                                 five years

                      Total                     --         77,363,143.31             --            98.67%            77,363,143.31

       5.5 Inventories

       5.5.1       Classification of inventories

                                                 Ending balance                                   Beginning balance
                  Item                Book           Depreciatio                                       Depreciatio
                                                                      Book value     Book balance                      Book value
                                     balance          n reserve                                         n reserve

          Stock materials           923,401.41       742,966.17       180,435.24          876,822.10   742,966.17       133,855.93

          Stock
                                     22,771.38         11,102.41       11,668.97           22,771.38    11,102.41        11,668.97
          commodities

          Food and
                                     39,315.16                         39,315.16           52,660.42                     52,660.42
          beverages

          Fuels                      21,795.68                         21,795.68           20,994.40                     20,994.40

                  Total           1,007,283.63       754,068.58       253,215.05          973,248.30   754,068.58       219,179.72




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       5.5.2       Inventory depreciation reserve

                                              Provision in Period          Decrease in Period
          Category of       Beginning
                                            Withdrawi                    Reversal or                      Ending balance
           inventories       balance                       Other                            Other
                                               ng                         Write-off

          Stock
                            742,966.17                                                                          742,966.17
          materials

          Stock
                                11,102.41                                                                        11,102.41
          commodities

                Total       754,068.58                                                                          754,068.58



       5.6 Non-current liabilities maturing within one year
                         Item                       Ending balance         Beginning balance                Remarks

          Long-term deferred expenses                                                                  Hotel exterior
          needed to be amortised within one                292,184.72                  584,369.42      wall
          year                                                                                         decoration

                         Total                             292,184.72                  584,369.42




          5.7     Other current assets
                                                                             Beginning                    Remarks
                         Item                       Ending balance
                                                                              balance

          Prepay corporate income tax                     1,702,702.80        1,702,702.80

          Prepay VAT                                        318,164.96          173,746.42


          Debt investment                                                                       Wuhan           Aierjia

                                                                                                Technology
                                                          9,000,000.00
                                                                                                Development        Co.,

                                                                                                Ltd.

          Total                                          11,020,867.76        1,876,449.22




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       5.8 Available-for-sale financial assets

       5.8.1            Available-for-sale financial assets

                                                                     Ending balance                                                 Beginning balance

                          Item                                           Provision for                                                   Provision for
                                                  Book balance                               Book value         Book balance                                   Book value
                                                                         impairment                                                      impairment


          Available-for-sale debts


          Available-for-sale equity
                                                     5,000,000.00          5,000,000.00                              5,000,000.00          5,000,000.00
          instruments.

          Of which:

          Measured at fair value


          Measured at cost                           5,000,000.00          5,000,000.00                              5,000,000.00          5,000,000.00


                          Total                      5,000,000.00          5,000,000.00                              5,000,000.00          5,000,000.00




       5.8.2            Available-for-sale financial assets measured at cost at the end of the period

                                                   Book balance                                           Provision for impairment                       Shareho     Cash

                                                                                                                                                          lding      divid
                                                                                                                          Decr
                                                                                                               Incre
                                                                                                                                                         ratio in    ends
                                                 Increa   Decrea                                                           ease
                 Item                                                                                          ase in
                                  Beginning                                Ending            Beginning                                  Ending
                                                                                                                                                         investee     in
                                                 se in      se in                                                           in
                                   balance                                balance               balance        Perio                    balance
                                                                                                                                                           (%)       Peri
                                                 Period    Period                                                         Perio
                                                                                                                 d
                                                                                                                                                                      od
                                                                                                                            d

          Shenzhen
          Difu
          Investment &
                                  5,000,000.00                            5,000,000.00        5,000,000.00                             5,000,000.00         14.28
          Development
          Ltd


                Total
                                  5,000,000.00                            5,000,000.00        5,000,000.00                             5,000,000.00




        5.9             Long-term equity investments

       5.9.1            The classification of long-term equity investment is as follows:

                                                                                   Ending balance                                      Beginning balance


                                  Investee                                               Provision for       Book                              Provision for        Book
                                                                    Book balance                                          Book balance
                                                                                          impairment         Value                                impairment        Value




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                                                          Ending balance                          Beginning balance


                          Investee                             Provision for   Book                      Provision for   Book
                                           Book balance                                Book balance
                                                                impairment     Value                     impairment      Value


       Hubei Jingsha Dadonghai Club Ltd.     4,566,207.42       4,566,207.42             4,566,207.42     4,566,207.42


       Sanya Shun’an Casino                 5,150,166.84       5,150,166.84             5,150,166.84     5,150,166.84


                           Total             9,716,374.26       9,716,374.26             9,716,374.26     9,716,374.26




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       5.9.2        Details of long-term equity investment

                                                                                                                                         Remark on                        Provisi
                                                                                                          Shareholdi                                                                 Cash
                          Accoun                                                                                        Voting ratio   different ratios                   on for
                                    Investment    Beginning      Increase in   Decrease      Ending       ng ratio in                                     Provision for             dividen
               Investee     ting                                                                                        in investee    of shareholding                    impair
                                      costs         balance        Period      in Period     balance       investee                                       impairment                 ds in
                          Method                                                                                            (%)         and voting in                     ment in
                                                                                                             (%)                                                                    Period
                                                                                                                                          investee                        Period

          Hubei

          Jingsha
                                   4,566,207.42   4,566,207.42                             4,566,207.42        91.00           91.00                      4,566,207.42
          Dadonghai       Cost

          Club Ltd.       method

          Sanya

          Shun’an        Cost     5,150,166.84   5,150,166.84                             5,150,166.84        70.00           70.00                      5,150,166.84

          Casino          method

          Subtotal of
                                   9,716,374.26   9,716,374.26                             9,716,374.26                                                   9,716,374.26
          cost method




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5.10   Investment real estate
        Investment real estate by cost measurement
                                                          Houses and
                                Item                                       Land use right      Total
                                                           buildings

        I. Original book value:

        1. Beginning balance                               18,856,504.44      5,662,740.59   24,519,245.03

        2. Increase in Period

        (1) Purchase

        (2) Transfer from fixed assets\intangible
        assets

        (3) Increase in business merger

        3. Decrease in Period

        (1) Disposal

        (2) Other transfer

        4. Ending balance                                  18,856,504.44      5,662,740.59   24,519,245.03

        II. Accumulated depreciation and
        accumulated amortization

        1. Beginning balance                                9,771,216.42      2,107,046.45   11,878,262.87

        2. Increase in Period                                209,091.78          28,170.00     237,261.78

        (1) Withdraw or amortize

        3. Decrease in Period

        (1) Disposal

        (2) Other transfer

        4. Ending balance                                   9,980,308.20      2,135,216.45   12,115,524.65

        III. Depreciation reserve

        1. Beginning balance                                1,404,400.47      1,903,054.14    3,307,454.61

        2. Increase in Period

        (1) Withdraw

        3. Decrease in Period

        (1) Disposal

        (2) Other transfer

        4. Ending balance                                   1,404,400.47      1,903,054.14    3,307,454.61

        IV   .   Book value

        1. Book value at the end of the period              7,471,795.77      1,624,470.00    9,096,265.77



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                                                                          Houses and
                                     Item                                                      Land use right              Total
                                                                           buildings

          2. Book value at the beginning of the period                       7,680,887.55          1,652,640.00           9,333,527.55

        5.11         Fixed assets

       5.11.1        Fixed assets

                                            Buildings and                                     Electronic
                       Item                                    Machines         Vehicles                     Others           Total
                                            Constructions                                    Equipments

          I. Original book value:
                                            136,564,783.1                      2,091,322.7   2,585,268.9    1,703,389.4   156,086,235.2
                 1.Beginning balance                         13,141,471.00
                                                        5                                7             2              5               9
               2. Increase in
                                                                                253,752.14    -16,489.74     14,423.30       251,685.70
          Period
                 (1) Purchase                                                   253,752.14      6,758.12     14,423.30       274,933.56
               (2) transfer in of
                                                                                              -23,247.86                     -23,247.86
          the construction project
               (3) the increase in
          business combination
                 3. Decrease in Period
                   (1) Disposal or
          scrap



                                            136,564,783.1                      2,345,074.9   2,568,779.1    1,717,812.7   156,337,920.9
                 4.Ending balance                            13,141,471.00
                                                        5                                1             8              5               9

          II. Accumulated
          depreciation
                                                                               1,252,935.7                  1,447,909.8
                 1.Beginning balance        68,185,246.92     9,092,676.08                   2,111,146.45                 82,089,914.95
                                                                                         0                            0
                 2. Increase in Period       1,066,956.49       138,639.24       87,765.30     51,597.85     37,937.12     1,382,896.00

          (1) Withdraw                       1,066,956.49       138,639.24       87,765.30     51,597.85     37,937.12     1,382,896.00

                 3. Decrease in Period
                   (1) Disposal or
          scrap
                                                                               1,340,701.0   2,162,744.3    1,485,846.9
                 4.Ending balance           69,252,203.41     9,231,315.32                                                83,472,810.95
                                                                                         0             0              2

          III Depreciation reserve
            .
                 1.Beginning balance        31,072,788.17     2,527,851.26                                                33,600,639.43
                 2. Increase in Period

          (1) Withdraw
                 3. Decrease in Period
                   (1) Disposal or
          scrap
                 4.Ending balance           31,072,788.17     2,527,851.26                                                33,600,639.43

          IV Book value of fixed
            .

          assets
                                                                               1,004,373.9
          (1) Book value at the end         36,239,791.57     1,382,304.42                    406,034.88    231,965.83    39,264,470.61
                                                                                         1



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                                             Buildings and                                      Electronic
                    Item                                        Machines          Vehicles                        Others              Total
                                             Constructions                                     Equipments

         of the period

         (2) Book value at the
                                             37,306,748.06     1,520,943.66      838,387.07     474,122.47       255,479.65       40,395,680.91
         beginning of the period

        Other explanation: no temporary idle fixed assets at end of the period, and no fixed assets
                 mortgage or guarantee


5.12 Construction in process

                                                                Ending balance                               Beginning balance

                                                                     Provisio                                        Provision
                         Item
                                                                       n for                            Book               for          Book
                                                  Book balance                         Book Value
                                                                     impairm                           balance       impairme           Value

                                                                           ent                                             nt

         Reconstruction                    of
                                                      805,644.64                        805,644.64
         swinging pool

         Hatchway               of        the
                                                      100,000.00                        100,000.00
         sightseeing elevator

         Reconstruction                    of
                                                        46,800.00                        46,800.00
         high-voltage            metering

         cubicle

         Reconstruction              of   fire
                                                        25,767.00                        25,767.00
         stair in Building A

         Total                                        978,211.64                        978,211.64




       5.13        Intangible assets
                                Item                                   Land use right                                  Total


         I. Original book value

                                                                                      81,653,137.15                              81,653,137.15
               1. Beginning balance

               2. Increase in the period

               3. Decrease in the period



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                         Item                                 Land use right                         Total

                                                                         81,653,137.15                       81,653,137.15
              4. Ending balance

         II. Accumulated amortization

                                                                         30,382,276.95                       30,382,276.95
              1. Beginning balance

                                                                           406,193.58                          406,193.58
              2. Increase in the period

              3. Decrease in the period

                                                                         30,788,470.53                       30,788,470.53
              4. Ending balance

         III. Depreciation reserve

                                                                         27,440,836.84                       27,440,836.84
              1. Beginning balance

              2. Increase in the period

              3. Decrease in the period

                                                                         27,440,836.84                       27,440,836.84
              4. Ending balance

         IV. Booking value

                                                                         23,423,829.78                       23,423,829.78
              1. Ending book value

                                                                         23,830,023.36                       23,830,023.36
              2. Beginning book value

         Note: The provision for impairment of intangible assets was the excess of the book value over
         the marker price of the lands at Oceanside which was restricted for use under the plan of Sanya
         Municipal Government.


       5.14        Long-term deferred expenses
                                  Beginning balance                                                  Ending balance

                                                                                                                  Long-term
                             Long-term       Long-term          Increase in     Amortization    Long-term
                  Item                                                                                             prepaid
                             deferred     prepaid expenses        Period          in Period      deferred
                                                                                                                 expenses due
                             expenses     due within a year                                     expenses
                                                                                                                 within a year

        Hotel exterior
        wall coating       1,071,343.97         584,369.42                         292,184.70   1,071,343.97        292,184.72
        project

              Total        1,071,343.97         584,369.42                         292,184.70   1,071,343.97        292,184.72




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       5.15       Provision for assets impairment
                                                                                Decrease in Period
                                               Beginning        Increase in
                         Item                                                  Revers                 Ending balance
                                                 balance          Period                 Write-off
                                                                                 al

         Provision for bad debts               80,321,764.27                                            80,321,764.27

         Inventory depreciation reserve          754,068.58                                                754,068.58

         Provision for impairment of
         available-for-sale financial           5,000,000.00                                             5,000,000.00
         assets

         Provision for impairment of
                                                9,716,374.26                                             9,716,374.26
         long-term equity investments

         Provision for     impairment of
                                               33,600,639.43                                            33,600,639.43
         fixed assets

         Provision for impairment of
                                               27,440,836.84                                            27,440,836.84
         intangible assets

         Impairment        provision     of
                                                3,307,454.61                                             3,307,454.61
         investment real estate

                         Total                160,141,137.99                                           160,141,137.99



       5.16       Accounts payable

         5.16.1          Details of accounts payable are as follows:

                           Item                            Ending balance                    Beginning balance

         Within 1 year (including 1 year)                               801,070.51                         856,048.21


         1-2 years (including 2 years)                                  329,718.70                         199,317.78


         2-3 years (including 3 years)                                  334,316.59                         334,316.59


         Over 3 years                                                   577,882.93                         577,882.93


                          Total                                        2,042,988.73                      1,967,565.51

        5.16.2 Accounts payable with major amount and aging of over one year




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                             Item                             Ending balance                           Reason

                                                                                          Purchase     amount        recorded
          Provisional estimation                                         719,013.26
                                                                                          without invoice issued

                            Total
                                                                         719,013.26                       /



       5.17     Accounts received in advance

       5.17.1      Accounts received in advance

                           Item                             Ending balance                        Beginning balance

          Within 1 year (including 1 year)                               625,072.93                                1,272,672.89


          1-2 years (including 2 years)                                  141,408.02                                 141,408.02


          2-3 years (including 3 years)                                   65,874.80                                  65,874.80


          Over 3 years                                                   414,568.57                                 414,568.57


                          Total                                         1,246,924.32                               1,894,524.28




       5.17.2         Accounts received in advance with major amount and aging of over one year


                                                                                               Outstanding or carry-over
                                    Item                            Ending balance
                                                                                                        reasons

          Guangzhou South Holiday International Travel
                                                                             101,244.00              No settlement
          Service Co., Ltd. Sanya Branch

          Hainan       QiongZhong      Ecological    Investment
                                                                              31,314.00              No settlement
          Guarantee Co., Ltd.

          Beijing Yualuxincheng Management Consulting
                                                                              30,540.00              No settlement
          Co., Ltd.

          PEGAS        Zheng Qingbo                                           32,243.02              No settlement

          Sanya Public Security Fire Control Team                             19,420.88              No settlement

                                    Total                                    214,761.90




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       5.18       Employee compensation payable
       5.18.1     Classification of employee compensation payable

                                                                    Increase in         Decrease in       Beginning
                         Item               Ending balance
                                                                      Period              Period           balance

        Short-term employee benefits             2,148,514.36       5,388,428.75         5,737,180.73      1,799,762.38


        Post-employment benefits -
                                                                      470,188.05          470,188.05
        defined contribution plans

        Termination benefits

        Other benefits due within one

        year

                        Total                    2,148,514.36       5,858,616.80         6,207,368.78      1,799,762.38




       5.18.2      Short-term employee benefits

                                                    Beginning            Increase in      Decrease in
                           Item                                                                           Ending balance
                                                      balance              Period            Period

        (1) Salary, bonus, allowance and
                                                     1,299,545.99        4,273,089.74      4,695,482.96       877,152.77
               subsidy

        (2) Employee welfare                                               674,073.97        674,073.97

        (3) Social insurance premium                                       222,048.79        222,048.79

        Of     which:     including:   medical
                                                                           198,783.08        198,783.08
        insurance expenses

        Work injury insurance expenses                                      10,135.79         10,135.79


        Maternity insurance                                                 13,129.92         13,129.92

        (4) Housing provident funds                                         69,293.32         59,593.32         9,700.00

        (5) Labor union expenditures and
                                                      848,968.37           149,922.93         85,981.69       912,909.61
               employee education expenses

        (6) Short-term paid absences

                           Total                     2,148,514.36        5,388,428.75      5,737,180.73     1,799,762.38




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        5.18.3 Details of defined contribution plans

                                                  Beginning         Increase in       Decrease in
                         Item                                                                        Ending balance
                                                   balance            Period            Period

         Basic   endowment          insurance
                                                                      455,465.02        455,465.02
         expenses

         Unemployment insurance expenses                                14,723.03        14,723.03


                        Total                                         470,188.05        470,188.05




       5.19      Taxes and surcharges payable
                         Item                            Ending balance                    Beginning balance

         VAT                                                            205,157.45                     228,923.41


         Individual income tax                                                                                  1.14


         Urban maintenance and
                                                                           4,842.25                       6,505.86
         construction tax

         Educational surtax                                                2,075.24                       2,788.22


         Local educational surtax                                          1,383.50                       1,858.82


         Property tax                                                   199,326.91                     234,032.26


         Land use tax                                                   108,590.91                     108,588.06


         Stamp tax                                                                                            246.50

                                                                          18,147.74
         Security for disabled person

                                                                        539,524.00                     582,944.27
                         Total

         Other explanation: in line with relevant regulation of accounting rules of business enterprise,
         the business income tax prepaid in previous at period-end will re-classified to other current
         assets for calculation


       5.20      Other payables


        5.20.1       Other payables by fund quality

                     Fund quality                      Ending balance                     Beginning balance




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        Fine for rule-breaking operation
                                                                                                  19,810,000.00
        on the stock of the Company

        Audit fee                                                  285,003.21                        285,003.21

        Project funds                                              327,589.46                        317,277.05

        Agency fund                                                 30,884.66                        139,319.74

        Quality retention money                                     35,731.15                        230,096.75

        Guarantee deposit                                          333,000.00                        350,600.90

        membership of Board director,
                                                                    40,506.98                        214,506.98
        the board of supervisors

        Personal fund accounts                                      67,918.27                         73,752.85

        Other fund accounts                                     11,144,451.10                      1,001,405.96

        Deposit and rental                                         821,158.32                        662,541.29

                         Total                                  13,086,243.15                     23,084,504.73


       Other explanation: the fine 19,810,000.00 Yuan for illegal stock operation of the Company are
                      paid to CSRC on 20 February 2017


        5.20.2          Other payables with large amount and aging of over one year

                                                                          Reason for
                    Company name               Ending balance                                     Remark
                                                                        non-repayment

        Hong Kong Deloitte & Touche
                                                      285,003.21         No settlement
        LLP

        Sanya Shuxin Building
                                                      170,000.00         No settlement
        Waterproofing Co. Ltd

        China Building Decoration
                                                      161,111.03         No settlement
        Company Hannan Branch

                         Total                        616,114.24



         5.21 Estimates liabilities

                          Item                         Ending balance                    Beginning balance

        Accrual the un-payment electricity                           1,489,685.04                  1,489,685.04




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                                  Item                                         Ending balance                            Beginning balance

         account

                                  Total                                                           1,489,685.04                     1,489,685.04


       Other explanation: See Note IX



       5.22        Share capital
                                                                                                                                     Unit: share

                                          Before this change                       Increase or decrease ( ,
                                                                                                        -+    )                 After this change


                                                                                          Share


                                                                                          capital

                     Item                               Proporti                Shares converte                                                 Proportio
                                          Amount                   New issue                           Others       Sub-total    Amount
                                                         on (%)                 granted   d from                                                  n (%)


                                                                                          reserve


                                                                                           fund


         1. Restricted shares              10,455,687      2.87                                                                    10,455,687         2.87


         (1) State shareholding


         (2) State-owned legal
                                            2,369,400      0.65                                                                     2,369,400         0.65
         person shareholding


         (3) Other domestic capital
                                            8,085,000      2.22                                                                     8,085,000         2.22
         shareholding


         Including: domestic legal
                                            7,953,000      2.18                                                                     7,953,000         2.18
         person shareholding


         Domestic natural person
                                              132,000      0.04                                                                       132,000         0.04
         shareholding


         (4) Foreign capital


         shareholding


         Including: overseas legal


         person shareholding


         Overseas natural person


         shareholding




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                                               Before this change                      Increase or decrease ( ,
                                                                                                           -+    )                     After this change


                                                                                              Share


                                                                                              capital

                       Item                                  Proporti               Shares converte                                                      Proportio
                                               Amount                   New issue                         Others       Sub-total        Amount
                                                              on (%)                granted   d from                                                      n (%)


                                                                                              reserve


                                                                                               fund


         (5) Senior officers shares                  1,287                                                                                       1,287


         2. Unrestricted shares                353,644,313     97.13                                                                     353,644,313         97.13


         (1) RMB ordinary shares               265,644,313     72.96                                                                     265,644,313         72.96


         (2) Foreign shares listed in
                                                88,000,000     24.17                                                                      88,000,000         24.17
         China


         (3) Foreign shares listed


         overseas


         (4). Others


         3. Total shares                       364,100,000    100.00                                                                     364,100,000      100.00




        5.23        Capital reserves
                        Item                     Beginning balance            Increase in Period          Decrease in Period           Ending balance

         Capital (share capital)
                                                        33,336,215.58                                                                     33,336,215.58
         premium

         Other capital reserves                         20,806,634.43                                                                     20,806,634.43

                       Total                            54,142,850.01                                                                     54,142,850.01



       5.24         Undistributed profits
                                        Item                                            The Period                                 Last period

         Undistributed profits as at June 30, 2016                                            -343,966,434.57                           -341,305,382.08

         Plus: net profit attributable to owner of
                                                                                                 1,719,253.80                                 172,122.52
         parent company in Period

         Less: appropriation of statutory surplus



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          reserves

          Appropriation of discretionary surplus

          reserve

          Appropriation of reserve funds

          Appropriation of enterprise expansion funds

          Appropriation of bonus and welfare funds

          Appropriation of general risk reserve

          Ordinary share dividends payable

          Ordinary share dividends transferred to
          share capital

          Undistributed profits as at June 30, 2016                       -342,247,180.77                     -341,133,259.56




          5.25 Operating income and operating cost

          5.25.1          Operating income and operating cost

                                                      The Period                                     Last period
                     Item
                                            Income                  Cost                    Income                  Cost

          Operating income                 13,518,444.89           5,018,862.48        10,836,467.50               4,222,761.53


          Operating cost                    1,577,828.53             237,250.03             1,226,330.10            237,261.78

                                           15,096,273.42           5,256,112.51        12,062,797.60               4,460,023.31
                     Total

Other explanation: The current operating income increased by 25.15% compared with the previous year,
of which the main operating income increased by 20.34% compared with the previous year, mainly due
to the increase of Russian tourists in the current period. The main operating costs increased by 17.85%
compared with the previous year, mainly due to the increase in food and beverage consumption brought
by the increase of passenger traffic in the report period.




       5.25.2       Primary business (by industry)

                Name of industry                        The Period                                    Last period




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                                      Operating income      Operating cost         Operating income    Operating cost

         Tourism, catering and
                                         15,096,273.42          5,256,112.51          12,062,797.60      4,460,023.31
         service industry

                    Total                15,096,273.42          5,256,112.51          12,062,797.60      4,460,023.31




   5.25.3         Primary business (by products)

                                                   The Period                                  Last period
              Name of products
                                      Operating income       Operating cost        Operating income    Operating cost

         Guest room income                11,676,662.38          4,079,275.81           9,811,796.58     3,668,041.91

         Catering and entertainment
                                           1,841,782.51              939,586.67         1,024,670.92         554,719.62
         income

         Rental income                     1,577,828.53              237,250.03         1,226,330.10         237,261.78

                    Total                 15,096,273.42          5,256,112.51          12,062,797.60     4,460,023.31




         5.25.4         Primary business (by region)

                                                   The Period                                 Last period
               Name of region
                                      Operating income       Operating cost        Operating income    Operating cost

         Hainan region                   15,096,273.42          5,256,112.51          12,062,797.60      4,460,023.31

                    Total                15,096,273.42          5,256,112.51          12,062,797.60      4,460,023.31




       5.26       Business tax and surcharges
                         Item                            The Period                            Last period

         Urban maintenance and
                                                                       52,296.64                             40,719.96
         construction tax

         Educational surtax                                            37,289.14                             29,085.71


         Property tax                                                 441,630.64


         Land use tax                                                 217,184.65




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                          Item                      The Period                      Last period

                                                                    4,980.00
         Vehicle and vessel use tax

         Stamp tax                                                   863.20


         Business tax                                                                             497,150.96

         Total                                                    754,244.27                      566,956.63


Other explanation:
1. Due to the increase of property tax, land use tax, travel tax, stamp tax and others, the Ministry of
    Finance issued Accounting Regulations for Value-added Tax (CS No. [2016] 22) on December 3,
    2016, which reclassifies the property tax, land use tax, travel tax, and stamp tax generated from the
    business operation since May 1, 2016 to the “taxes and additional” project, and the taxes and dues
    occurred before May 1, 2016 shall not be adjusted. The comparative data shall not be adjusted.
2. According to the Notice on Comprehensively Launching the Pilot of Business Tax to Value-added
   Tax (CS No.[ 2016] 36) of the Ministry of Finance and the State Administration of Taxation,
   because the business tax to value-added tax policy has been comprehensively launched since May 1,
   2016.


       5.27      Selling expenses
                          Item                      The Period                      Last period

                                                                1,532,804.73                 1,257,447.17
         Staff wages and benefits

                                                                  224,176.69                      217,223.10
         Social workers insurance expenses

         Depreciation                                             245,942.02                      272,774.51


         Water and electricity fees                                83,061.58                       95,815.71


         Repair charges                                            65,649.32                       57,227.50


         Other expenses                                           306,510.59                      198,547.75


         Total                                                  2,458,144.93                 2,099,035.74



       5.28      Administrative expenses
                          Item                       The Period                     Last period

         Staff wages and benefits                               2,450,309.99                  2,069,711.09

                                                                  325,482.11                      250,843.95
         Social workers insurance expenses



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         Taxes                                                                                 646,738.02


         Business entertainment                                  402,028.00                    295,348.47


         Travel expenses                                          97,189.95                     87,737.20


         Social labor insurance premium                          406,193.58                    406,193.58


         Other expenses                                        1,408,246.94               1,232,871.46


                          Total                                5,089,450.57               4,989,443.77




       5.29       Financial expenses
                          Type                      The Period                   Last period

         Interest expenses

         Less: interest income                                 -204,780.17                 -258,930.94

         Gains or losses on exchange

         Handling charges                                         24,107.51                     54,178.40

                          Total                                -180,672.66                 -204,752.54



       5.30       Losses on assets impairment
                          Item                      The Period                   Last period

         Losses on bad debt

         Losses on inventory depreciation

         Losses on impairment of other
         current assets

         Losses on impairment of
         long-term equity investments

         Loss on fixed asset impairment

         Loss on intangible asset
         impairment

                          Total

         Other explanation: there no loss of impairment of fix assets occurred in the period and last
         period



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       5.30       Non-operating income

        Non-operating income by items

                                                                                    Amount included in current
                      Item                 The Period            Last period
                                                                                   non-recurring profits or losses

         Total gains on disposal of

         non-current assets

         Including: gain on disposal

         of fixed assets

         Gain on disposal of

         intangible assets

         Income from compensation                                    64,926.00


         Others                                    260.00            12,480.00


                     Total                         260.00            77,406.00




        5.32      Notes to statement of cash flow

         5.32.1        Other cash receipts related to operating activities

                               Item                         The Period                       Last period

         Compensation for articles in the guest
                                                                                                        77,406.00
         rooms

                                                                      204,780.17                      258,930.94
         Interest income

                                                                      472,635.21                      209,424.79
         Other income

                                                                      677,415.38                      545,761.73
         Total




         5.32.2        Cash paid for other operating activities

                               Item                         The Period                       Last period

         Business entertainment expenses                              402,028.00                      295,848.47




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                              Item                                 The Period                       Last period

         Audit fee                                                           400,000.00                      390,000.00


         Announcement fee                                                     60,000.00                       60,000.00


         Traveling expenses                                                  109,715.87                       95,971.20


         Promotion expenses                                                   21,162.60                           5,312.00


         Repair charge                                                       100,191.70                       71,380.30


         Directors and supervisors membership dues                           354,000.00                      234,000.00


         Others                                                              690,202.00                      394,368.26


         Total                                                              2,137,300.17                   1,546,880.23




         5.32.3 Cash received with other financing activities concerned

                              Item                                 The Period                       Last period

                                                                           19,810,000.00
         LUONIUSHAN Group Co. Ltd.

         Total                                                             19,810,000.00




         5.32.4 Cash paid for other financing activities

                              Item                                 The Period                       Last period

         LUONIUSHAN Group Co. Ltd.                                         10,000,000.00

         CSRC                                                              19,810,000.00

         Total                                                             29,810,000.00




       5.33       Supplementary information to statement of cash flows

   5.33.1         Supplementary information to statement of cash flows

                                      Item                                        The Period             Last period

         (1) Net profit adjusted to cash flows from operating activities

         Net profit                                                                  1,719,253.80             172,122.52


         Plus: provision for asset impairment

         Depreciation of fixed assets, gas and oil assets and productive             1,591,987.78           1,764,713.08



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                                         Item                             The Period        Last period

       biological assets

        Amortization of intangible assets                                      434,363.58       434,363.58


        Amortization of long-term deferred expenses                            292,184.70       266,250.00


        Loss on disposals of fixed assets, intangible assets and other

        long-term assets ("-" for gains)

        Loss on write-off of fixed assets ("-" for gains)

        Losses from the changes in fair value ("-" for gains)

        Financial expenses ("-" for gains)

        Investments loss ("-" for gains)

        Loss from debts restructuring ("-" for gains)

        Decrease in deferred income tax assets ("-" for increases)

        Increase in deferred income tax liabilities ("-" for decreases)

        Decrease in inventories ("-" for increases)                            -34,035.33        -17,511.97


        Decrease in operating receivables ("-" for increases)                  159,732.97      -290,307.05


        Increase in operating payables ("-" for decreases)                    -932,414.40      -875,932.72


        Others (Projected liabilities)

       Net cash flows from operating activities                              3,231,073.10     1,453,697.44


        2. Significant investing and financing activities not involving

        cash receipts and payments

        Conversion of debt into capital

        Convertible corporate bonds maturing within one year

        Fixed assets under financial lease

        3. Net changes in cash and cash equivalents

        Ending balance of cash                                              10,108,175.91    11,825,290.70


        Less: Beginning balance of cash                                     27,210,248.01    19,782,392.26


        Plus: Ending balance of cash equivalents




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                                     Item                              The Period            Last period

        Less: Beginning balance of cash equivalents

        Net increase in cash and cash equivalents                        -17,102,072.10       -7,957,101.56




         5.33.2      Breakdowns of cash and cash equivalents:

                                     Item                             Ending balance      Beginning balance

        1. Cash                                                           10,108,175.91       27,210,248.01


        Including: cash on hand                                             329,071.51           273,523.86


        Bank deposit available for payment at any time                     9,779,104.40       26,936,724.15


        Other monetary funds available for payment at any time

        Deposits in the central bank available for payment

        Deposits with banks and other financial institutions

        Loans to banks and other financial institutions

        2. Cash equivalents

        Including: Bond investment due within three months

        3. Ending balance of cash and cash equivalents                    10,108,175.91       27,210,248.01




   6Business combination and consolidated financial statements


       6.1     Scope of consolidation (aggregation) of financial statements
        The scope of consolidation (aggregation) of financial statements covers the headquarter of the
        Company and the subsidiary South China Grand Hotel of Hainan Dadonghai Tourism Center
        (Holdings) Co., Ltd., which is subject to independent accounting.


       6.2    Changes in scope of consolidation (aggregation) of financial
         statements:
        There is no change in scope of consolidation (aggregation) of the financial statements of the
        Company in the year.




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   7 Risks relating to financial instruments


        The Company faces a variety of financial risks in business process: credit risk, market risk and
        liquidity risk. The Company’s Board of Directors is overall responsible for risk management
        objectives and determining policies, and bears the ultimate responsibility for risk management
        objectives and policies, but the board has authorized the Company’s enterprise management
        department to design and executive the procedure which could guarantee the effective
        implementation of risk management objectives and policies. The Company’s internal auditors
        will audit the policies and procedures of risk management as well, and will report the discovery
        to Audit Committee.
        The overall objective of the Company’s risk management is to set the risk management policies
        to reduce risks as possible without giving excessive influence to competitiveness and strain
        capacity of the Company.


       7.1    Credit risk
        Credit risk is the risk of financial loss on one party of a financial instrument due to the failure
        of another party to meet its obligations. The Company mainly faces credit risk generated from
        customers through credit sales. The Company will understand and assess the credit risk of the
        new customer before signing the new contract. The Company makes credit rating for existing
        customers and aging analysis of accounts receivable to ensure the Company’s overall credit
        risk falls within a controllable range.


       7.2    Market risk
        Market risk is the risk of financial instruments’ fair value and future cash flow fluctuating
        due to change of market price, including currency risk, interest risk and other pricing risk.


       7.3    Liquidity risk
        Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfilling
        the obligations when paying cash or settle in way of other financial assets. The policy of
        the Company is to ensure there are enough cash to pay back mature debts. The liquidity
        risk is centralized controlled by the Company’s accounting department. The accounting
        department ensures the Company to possess enough cash to pay back the debts in all
        reasonable foreseeable circumstances through monitor the balance of cash, monitor the



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          securities that can be converted into cash at any time and rolling forecasts of future cash
          flows in twelve months.




   8 Related parties and related party transactions


  8.1       The largest shareholder of the Company

                                                                                                 Registered                                                     Ultimate
           Name of       Relationship                                                Nature                         Shareholding
                                          Business   Registered       Legal                       Capital                                Voting ratio in the    controller
            parent         with the                                                     of                           ratio in the
                                           Type        place      representative                  (RMB                                     Company (%)            of the
           company        Company                                                   Business                        Company (%)
                                                                                                  0’000)                                                       Company


                                                                                                                                                                Hainan
                                                                                    Plant
                                                                                                                                                                LuoNiu
          Luoniushan     The largest      Listed     Haikou                         and
                                                                  Xu Zili                       115,151.00                    16.90                    16.90    Shan
          Co., Ltd.      shareholder      company    City                           culturing
                                                                                                                                                                Holding
                                                                                    business
                                                                                                                                                                Group


          Note: As of June 30, 2016, Luoniushan Co., Ltd., as the largest shareholder, held 61,515,400
          shares (16.90% of the total share capital of the Company).


   8.2      Related party transactions

       8.2.1          Sale of goods/rendering of labor services

                                       Contents       Pricing method                          The Period                                 Last period

                                      of related               and                                    Proportion                                    Proportion
           Related party                party        decision-making                                   in similar                                    in similar
                                                                                   Amount                                       Amount
                                      transactio        procedure of                                 transactions                                   transaction
                                         ns          related transaction                                      (%)                                       s (%)

           Luoniushan                 Accommo
                                                        Market price               252,303.00                  1.67%                20,672.00              0.17%
          Co., Ltd.                       dation



       8.2.2          Receivables and payables of related parties

                       Name                          Related party                           Ending balance                          Beginning balance



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         Accounts receivable        Luoniushan Co., Ltd.                       51,896.00                  10,668.00




       8.2.3     Remuneration of key management

                        Name                        The Period (RMB ’0,000)           Last period (RMB ’0,000)

          Remuneration of key management                                   73.15                              64.58




   9      Contingencies


          At May 26,2016        the Company received lawyer’s letter of Hainan Yunfan law firm which is
                               ,
          entrusted by Hainan Power Grid Co., LTD Sanya Power Supply Bureau (hereinafter referred to
          as the "Sanya Power Supply Bureau"), the letter claims that Sanya Power Supply Bureau found
          that the Company’s subsidiary South China Grand Hotel of Hainan Dadonghai Tourism Center
          (Holdings) Co., Ltd’s the amount of CT is different with its marketing management system
          record. The inconformity time is July, 2006, and the hotel’s CT is changing on April, 2016.
          Therefore, undercounted electricity consumption amount is 10,313,373.00 kilowatt-hours, and
          estimated cost is 7,200,165.75 Yuan as various electricity prices and charges.


          According to the file “Law Advisory Opinion about Retroactive Power (Charge) Dispute
          between South China Grand Hotel and Sanya Power Supply Bureau” issued by Beijing Junhe
          (Haikou) Law Firm at December 20, 2016, which claims that Sanya Power Supply Bureau has
          responsibility for CT to purchase, install, enseal, unseal and change, therefore, the
          responsibility of the guilty party for undercounted electricity consumption of South China
          Grand Hotel is Sanya Power Supply Bureau. According to the one hundred and thirty-five item
          of “General Rule of Civil Law”, this item claims that limitation of action is two years if
          accuser request people's court’s protection, except situations provided by law. The Company
          has withheld the undercounted electricity consumption cost in 2016 which is about
          1,489,685.04 Yuan during the period from April, 2014 to April, 2016.




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   10      Commitments


    There are no commitments required to be disclosed by the Company.




   11      Notes to other significant events


   11.1 Correction of accounting errors in previous period
          11.1.1 Retrospective restatement method
          There is no correction of accounting errors using retrospective restatement method in previous
          period.


           11.1.2 Prospective application method

          There is no correction of accounting errors using prospective application method in previous period



   11.2     Others
In accordance with the requirements of the Regulatory Guidelines of Listed Companies No. 4 - Actual
Controller, Shareholders, Related Parties, Purchaser and Commitments and Fulfillment of Listed
Companies (CSRC Announcement No. [2013] 55) of China Securities Regulatory Commission, on
June 7, 2014, Luoniushan Co., Ltd. (hereinafter referred to as “Luoniushan”) sent out the Letter about
Changing the Commitments of Luoniushan Co., Ltd. to Hainan Dadonghai Tourism Centre (Holdings)
Co., Ltd. to the Company, and made commitments that Luoniushan shall actively seek reorganization
party to reorganize the assets of Dadonghai within three years from the date the Company’s general
meeting of shareholders considered and approved this commitment. The above matters have been
considered and approved by the general meeting of shareholders of Dadonghai on June 27, 2014.
On February 22, 2017, the company received the Letter about the Progress of Planning and Preparing
for the Fulfillment of Commitments from the largest shareholder Luoniushan, Luoniushan planned to
transfer 100% equity stake it held in the wholly-owned subsidiary - Industrial Corporation (thereinto,
Industrial Corporation shall firstly plan to accept the transfer of some equity stake of financial assets
held by Luoniushan, tentatively confirmed as 6.91% equity stake of Sanya Rural Commercial Bank,
which is subject to the transaction object confirmed by ultimate negotiation) to the Company, the means
of transaction is expected to be cash offer, and the transaction amount is approximately RMB 300
million. At present, the work is being promoted.




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  13      Supplementary information


       13.1       Details of current non-recurring profits and losses
                                          Item                                    The Period   Introduction

         Profits or losses from disposal of non-current assets

         Tax refunded, reduced or exempted with unauthorized approval or

         without formal documents of approval

         Government subsidies included into current profits and losses (other

         than government subsidies related closely to enterprise business and

         granted by quota or quantity according to national unified standard)

         Fund occupancy expenses collected from non-financial enterprises

         and accounted into current profit and loss

         Gains from differences between the investment costs of acquiring of

         subsidiaries, joint ventures or associates and the share of fair value

         of identifiable net assets of the investees at such investment

         Gains or losses from non-monetary assets exchange

         Gains or losses from commissioned investment or management on

         assets

         Provisions for asset impairment due to force majeure, such as

         natural disasters

         Gain or loss from debt restructuring

         Enterprise reorganizing expenses, such as employee

         accommodation costs and integration expenses

         Gains or losses from excess over fair value due to obvious unfair

         transaction price

         Current net gains or losses of subsidiaries acquired through business

         combination under common control from the beginning of current

         period till the date of consolidation


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                                           Item                                     The Period        Introduction

         Gains or losses incurred by contingencies irrelevant to the

         Company’s normal business

         Gains or losses from changes in fair value of financial assets or

         liabilities held for trading, as well as investment income from

         disposal of financial assets or liabilities held for trading and

         available-for-sale financial assets, other than those in valid hedging

         businesses related to the Company’s normal businesses

         Reversal of provisions for impairment of accounts receivable tested

         for impairment independently

         Gains or losses from external consigned loans

         Gains or losses from external consigned loans

         Effect on current profit and losses of one-off adjustments for current

         profit and loss in accordance with the requirements of laws and

         regulations regarding taxation or accounting

         Trustee fee obtained from entrusted operations

         Other non-operating income and expense other than the

         abovementioned ones

         Effect of income tax

         Effect of minority interest (after tax)

                                          Total



       13.2      Return on net assets and earnings per share

                                                                 Weighted average      Earnings per share (RMB)

                 Profit during the reporting period                 return on net   Basic earnings   Diluted earnings
                                                                     assets (%)       per share         per share

         Net profits attributable to ordinary shareholders
                                                                       2.29%           0.0047            0.0047
         of the Company

         Net profits attributable to ordinary shareholders
                                                                       2.29%           0.0047            0.0047
         of the Company after deduction of non-recurring


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         profits or losses




       13.3      Accounting difference between IFRS and CAS
         There are no accounting differences between IFRS and CAS.




                Section XI. Documents available for references


I. Text of Semi-Annual Report 2017 with signature of the legal person;

II. Financial statement with signature and seal of legal person, person in charge of accounting works and

person in charge of accounting organ (accountant in charge);
III. The original manuscripts of all documents and announcements of the Company publicly disclosed
on website appointed by CSRC;
IV. Other relevant documents

The above said documents are prepared in the security department of the Company




                                           HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD

                                                                         17 August 2017




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