CSG HOLDING CO., LTD. THE FIRST QUARTER REPORT 2019 Chairman of the Board: CHEN LIN April 2019 CSG HOLDING CO., LTD. The First Quarter Report 2019 Section I Important Notice Board of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referred to as the Company) and its directors, supervisors and senior executives 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 facticity, accuracy and completeness of the whole contents. All directors were present at the meeting of the Board for deliberating the First Quarter Report of the Company in person. Ms. Chen Lin, Chairman of the Board, Mr. Wang Jian, responsible person in charge of the accounting and Ms. Wang Wenxin, principal of the financial department (accounting officer) confirm that the Financial Report enclosed in the First Quarter Report 2019 is true, accurate and complete. This report is prepared both in Chinese and English. Should there be any inconsistency between the Chinese and English versions, the Chinese version shall prevail. 1 CSG HOLDING CO., LTD. The First Quarter Report 2019 Section II The basic situation of the Company I. Main accounting data and indices Whether the company need to retroactively adjust or restate the previous year's accounting data or not □Yes √ No The 1st quarter of 2019 The 1st quarter of 2018 Percentage of change (%) Operating income (RMB) 2,222,721,514 2,629,471,994 -15.47% Net profit attributable to shareholders of 132,188,324 159,382,821 -17.06% the listed company(RMB) Net profit attributable to shareholders of the listed company after deducting 82,573,767 152,948,714 -46.01% non-recurring gains and losses(RMB) Net cash flow arising from operating 136,317,362 60,223,706 126.35% activities(RMB) Basic earnings per share (RMB/Share) 0.05 0.06 -16.67% Diluted earnings per share (RMB/Share) 0.05 0.06 -16.67% Weighted average ROE (%) 1.44% 1.86% -0.42% 31 March 2019 31 December 2018 Percentage of change (%) Total assets (RMB) 19,038,937,263 19,114,234,184 -0.39% Net assets attributable to shareholder of 9,241,889,126 9,103,154,571 1.52% listed company(RMB) The total share capital of the company as of the previous trading day of disclosure: The total share capital of the company as of the previous trading day of disclosure ( share ) 2,862,840,482 Fully diluted earnings per share calculated with latest equity ( RMB/share ) 0.05 Note: The total amount of 436,719 shares of restricted stocks held by 8 unqualified original incentives, which had been repurchased but not yet cancelled, were deducted from the total share capital. Items and amounts of extraordinary profit (gains)/losses √Applicable □ Not applicable Unit: RMB Amount from beginning of the year to Item Note the end of the report period Gains/losses from the disposal of non-current asset (including the 6,877,195 write-off that accrued for impairment of assets) Governmental subsidy reckoned into current gains/losses (not 47,460,637 including the subsidy enjoyed in quota or ration according to 2 CSG HOLDING CO., LTD. The First Quarter Report 2019 national standards, which are closely relevant to enterprise’s business) Loss and profit on external entrusted loan 5,345,912 Other non-operating income and expenditure except for the -736,384 aforementioned items Other gains/losses satisfied definition of extraordinary profit - (gains)/loss Less: Impact on income tax 8,049,219 Impact on minority shareholders’ equity (post-tax) 1,283,584 Total 49,614,557 -- During the report period, the Company didn’t have the case of extraordinary profit (gains)/loss defined as a regular profit and loss project, which was defined and enumerated according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss. II. Total of shareholders at the end of the report period and particulars about the shares held by the top ten shareholders 1. The total number of common shareholders and the number of preference shareholders with voting rights recovered as well as the top ten shareholders Unit: Share The total number of common shareholders The total number of preference shareholders with voting 149,447 N/A at the end of the report period rights recovered at end of report period (if applicable) Particulars about the shares held by the top ten shareholders Number of share Proportion Amount of Amount of pledged/frozen Name of shareholder Nature of shareholder of shares restricted shares held Share held (%) shares held Amount status Foresea Life Insurance Co., Ltd. – Haili Domestic non state-owned 14.81% 423,988,067 Niannian legal person Foresea Life Insurance Co., Ltd. – Domestic non state-owned 3.76% 107,659,097 Universal Insurance Products legal person Domestic non state-owned Shenzhen Jushenghua Co., Ltd. 2.75% 78,757,679 Pledged 63,000,000 legal person Foresea Life Insurance Co., Ltd. – Own Domestic non state-owned 2.06% 58,877,419 Fund legal person Central Huijin Asset Management Ltd. State-owned legal person 1.84% 52,650,444 China Galaxy International Securities Foreign legal person 1.30% 37,313,064 (Hong Kong) Co., Limited UBS AG Foreign legal person 1.14% 32,607,190 3 CSG HOLDING CO., LTD. The First Quarter Report 2019 China Merchants Securities (HK) Co., State-owned legal person 1.03% 29,604,239 Limited Shenzhen International Holdings (SZ) State-owned legal person 0.92% 26,450,000 Limited VANGUARD EMERGING MARKETS Foreign legal person 0.61% 17,563,848 STOCK INDEX FUND Particular about the top ten shareholders with un-restrict shares held Amount of unrestricted Type of shares Shareholders’ name shares held at the end of Type Amount the period Foresea Life Insurance Co., Ltd. – Haili Niannian 423,988,067 RMB ordinary shares 423,988,067 Foresea Life Insurance Co., Ltd. – Universal Insurance Products 107,659,097 RMB ordinary shares 107,659,097 Shenzhen Jushenghua Co., Ltd. 78,757,679 RMB ordinary shares 78,757,679 Foresea Life Insurance Co., Ltd. – Own Fund 58,877,419 RMB ordinary shares 58,877,419 Central Huijin Asset Management Ltd. 52,650,444 RMB ordinary shares 52,650,444 Domestically listed China Galaxy International Securities (Hong Kong) Co., Limited 37,313,064 37,313,064 foreign shares UBS AG 32,607,190 RMB ordinary shares 32,607,190 Domestically listed China Merchants Securities (HK) Co., Limited 29,604,239 29,604,239 foreign shares Shenzhen International Holdings (SZ) Limited 26,450,000 RMB ordinary shares 26,450,000 Domestically listed VANGUARD EMERGING MARKETS STOCK INDEX FUND 17,563,848 17,563,848 foreign shares Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, Foresea Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related legal person of Foresea Life Insurance Statement on associated relationship or Co., Ltd. and Chengtai Group Co., Ltd., another related legal person of Foresea Life consistent action among the above Insurance Co., Ltd, which held 36,534,458 shares via China Galaxy International shareholders: Securities (Hong Kong) Co., Limited. Except for the above-mentioned shareholders, it is unknown whether other shareholders belong to related party or have associated relationship regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies. Explanation on the top ten shareholders with un-restrict shares held which involving N/A margin business (if applicable) Whether the top ten common shareholders or the top ten common shareholders holding unrestricted shares had a buy-back agreement dealing in the report period or not 4 CSG HOLDING CO., LTD. The First Quarter Report 2019 □ Yes √ No The top ten common shareholders or the top ten common shareholders holding unrestricted shares of the Company had no buy-back agreement dealing in the report period. 2. The total number of preferred shareholders of the company and particulars about the top ten preferred shareholders □ Applicable √ Not applicable 5 CSG HOLDING CO., LTD. The First Quarter Report 2019 Section III. Important events I. Particulars and explanations about significant changes in main accounting statements and financial indices √Applicable □ Not applicable Unit: RMB 0,000 Amount of Percentage Note 31 March 2019 31 December 2018 change of change Accounts receivable (1) 92,781 59,223 33,558 57% Assets held for sale (2) - 4,598 -4,598 -100% Other current assets (3) 13,756 44,533 -30,777 -69% Bills payable (4) 27,500 10,515 16,985 162% Payroll payable (5) 12,525 26,646 -14,121 -53% Interest payable (6) 10,066 7,361 2,705 37% Amount of Percentage Note Jan.-Mar.2019 Jan.-Mar.2018 change of change Asset impairment loss (7) 682 463 219 47% Income from asset disposal (8) 688 -102 790 - Other income (9) 4,746 758 3,988 526% Non-operating income (10) 69 220 -151 -69% Non-operating expenses (11) 142 86 56 65% Minority shareholder gains and losses (12) 375 -36 411 - Other comprehensive income (13) -122 -203 81 - Note: (1) The increase in accounts receivable was mainly due to the increase in accounts receivable of the glass industry. (2) The decrease in assets held for sale was mainly due to the disposal of assets held for sale. (3) The decrease in other current assets was mainly due to the recovery of entrusted loans during the period. (4) The increase in bills payable was mainly due to the increase in new bills issued during the period. (5) The decrease in payroll payables was mainly due to the payment of the employee's year-end bonus accrued at the end of last year was paid during the report period. (6) The increase in interest payable was mainly due to the fact that interest payment for medium-term notes had not been paid in the period for they were not due yet. (7) The increase in asset impairment losses was mainly due to the increase in provision for bad debts of accounts receivable. (8) The increase in income from asset disposal was mainly due to the disposal of assets held for sale during the period. (9) The increase in other income was mainly due to the increase in amortization of government subsidies. (10) The decrease in non-operating income was mainly due to a slight decrease in government grants during the period. (11) The increase in non-operating expenses was mainly due to the increase in donation expenses. (12) The increase in minority shareholders' gains and losses was mainly due to the increase in net profit of some subsidiaries with 6 CSG HOLDING CO., LTD. The First Quarter Report 2019 minority shareholders. (13) The increase in other comprehensive income was mainly due to the change in the translation difference of foreign currency statements. II. The progress and the impact of material events and analysis on the solutions √Applicable □ Not applicable 1. Short-term Financing Bills On Dec.14, 2016, the second extraordinary shareholders’ general meeting of 2016 of CSG deliberated and approved the proposal of the offering and registration of short-term financing bills, and agreed the Company’s registration and issuance of short-term financing bills with a total amount of RMB 2.7 billion, which could be issued by stages within period of validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. However, the term of each issue shall not be longer than one year and the registered quota shall not exceed 40 percent of the Company’s net assets. 2. Ultra-short-term financing bills On May 14, 2018, the Company’s 2017 annual shareholders’ meeting deliberated and approved the resolution on the application for registration and issuance of ultra-short-term financing bills, which agreed that the Company should register and issue ultra-short-term financing bills with a registered amount not exceeding 4 billion yuan (not subject to the restriction that the amount of ultra-short-erm issued shall not exceed 40% of net assets). With the period of validity of the quota not longer than two years, such ultra-short-term financing bills will be issued by installments in accordance with the actual capital needs of the Company and the situation of inter-bank market funds. On Sep. 17, 2018, the Chinese Association of Interbank Market Traders held its 63rd registration meeting in 2018, and decided to approve the registration of the ultra-short-term financing bills with a total amount of 1.5 billion yuan and a validity period of two years. The ultra-short-term financing bills are underwritten jointly by Minsheng Bank of China Limited and Industrial Bank Co., Ltd, and can be issued by installments within the validity period of registration. 3. Perpetual bonds On April 15, 2016, the Shareholders’ General Meeting 2015 of CSG deliberated and approved the proposal of application for registration and issuance of perpetual bonds, and agreed the Company to register and issue perpetual bonds with a total amount of RMB 3.1 billion which could be issued by stages within period of validity of the registration according to the Company’s actual demand for funds and the capital status of inter-bank market. 4. Medium-term notes On 10 December 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltd deliberated and approved the proposal of application for registration and issuance of medium-term notes with a total amount of RMB 1.2 billion at most. On 21 May 2015, National Association of Financial Market Institutional Investors (NAFMII) held the 32nd registration meeting of 2015, in which NAFMII decided to accept the registration of the Company’s medium-term notes, amounting to RMB 1.2 billion and valid for two years. China Merchants Bank Co., Ltd. and Shanghai Pudong Development Bank Co., Ltd. were joint lead underwriters of these medium-term notes which could be issued by stages within period of validity of the registration on Jul.14, 2015, the Company issued the first phase of medium-term notes with a total amount of RMB 1.2 billion and valid term of 5 years at the issuance rate of 4.94%, which will be redeemed on 14 July 2020. On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal of application for registration and issuance of medium-term notes with a total amount of RMB 0.8 billion, which could be issued by stages within 7 CSG HOLDING CO., LTD. The First Quarter Report 2019 period of validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. On 2 March 2018, National Association of Financial Market Institutional Investors (NAFMII) held the 14th registration meeting of 2018, in which NAFMII decided to accept the registration of the Company’s medium-term notes, amounting to RMB 0.8 billion and valid for two years. Shanghai Pudong Development Bank Co., Ltd. and China CITIC Bank Corporation Limited were joint lead underwriters of these medium-term notes which could be issued by stages within period of validity of the registration. On May 4, 2018, the Company issued the first phase of medium-term notes with a total amount of RMB 0.8 billion and valid term of three years at the issuance rate of 7%, which will be redeemed on May 4, 2021. On May 22, 2017, the Shareholders’ General Meeting of 2016 of CSG deliberated and approved the proposal of application for registration and issuance of medium-term notes with a total amount of RMB 1 billion, which could be issued by stages within period of validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn. 5. Public issuance of corporate bonds On March 2, 2017, the 2nd Extraordinary General Meeting of Shareholders of 2017 deliberated and approved “the Proposal on the Public Issuance of Corporate Bonds for Qualified Investors". On February 27, 2019, the First Extraordinary General Meeting of Shareholders of 2019 deliberated and approved “the Proposal on Extending the Validity of the Shareholders' Meeting Resolution for the Public Issuance of Corporate Bonds for Qualified Investors”, and agreed the Company to issue corporate bonds with a total issue of no more than RMB 2 billion and a term of no more than 10 years. 6. Meetings of Medium-term note holders during the report period On January 8, 2019, the Company released “the Announcement on Convening of 2015 First-phase of Medium-term Note Holders' Meeting of CSG Holding Co., Ltd.” and “the Announcement on Convening of 2018 First-phase of Medium-term Note Holders' Meeting of CSG Holding Co., Ltd.” due to the Company’s capital reduction for the repurchase and cancellation of some restricted shares of the restricted equity incentive plan. On January 22, 2019, the Company's 2015 first-phase of medium-term note holders’ meeting and 2018 first-phase of medium-term note holders’ meeting were held and voted off-site. The 2015 first-phase of medium-term note holders’ meeting and the 2018 first-phase of medium-term note holders’ meeting did not take effect as the total voting rights held by the holders attending the meeting did not reach two-thirds of the total voting rights as required. 7. Entrusted Loan On December 21, 2018, the Extraordinary Meeting of the 8th Board of Directors deliberated and approved “the Proposal on Providing External Entrusted Loans”. The Company issued an entrusted loan with a total amount of RMB 0.3 billion to Tengchong Yuezhou Water Investment Development Co., Ltd. via China Everbright Bank shenzhen(Nanshan) branch. The valid term of the entrusted loan was 3 months and its annual interest rate was 8.5%. On March 22, 2019, the principal and income of the above-mentioned entrusted loan was repaid as agreed in the contract. Progress of implementation of share repurchase □Applicable √ Not applicable Progress of implementation of the reduction of the repurchased shares by means of centralized price bidding □Applicable √ Not applicable 8 CSG HOLDING CO., LTD. The First Quarter Report 2019 III. Failure in due fulfillment of commitments of the actual controllers, shareholders, affiliates, and acquirers of listed company as well as the listed company during the report period □Applicable √Not applicable It did not exist that commitments of the actual controllers, shareholders, affiliates, and acquirers of listed company as well as the listed company failed to be fulfilled on time during the report period. IV. Predict of the business performance from January to June 2019 Warnings and reasons of the predict that the cumulative net profit from the begin of the year to the end of next report period may be loss or have great changes comparing with the same period of last year □Applicable √ Not applicable V. Securities investment □ Applicable √ Not applicable There was no securities investment during the report period. VI. Derivative investment □ Applicable √ Not applicable There was no derivative investment during the report period. VII. Registration form for receiving research, communication and interview during the report period □ Applicable √ Not applicable The Company did not receive any research, communication or interviews during the report period. VIII. Particulars about illegal external guarantee □ Applicable √Not applicable The Company had no illegal external guarantee in the report period. IX. Particulars about non-operating fund of listed company which is occupied by controlling shareholder and its affiliated enterprises □ Applicable √ Not applicable 9 CSG HOLDING CO., LTD. The First Quarter Report 2019 Section IV Financial Report I. Financial Statements 1. Consolidated balance sheet Prepared by CSG Holding Co., Ltd. Unit: RMB Item Ending balance Beginning balance Current asset: Monetary Fund 2,367,406,487 2,226,447,720 Settlement provisions Lendings to Banks and Other Financial Institutions Transactional financial assets Financial assets measured at fair value through profit or loss Derivative financial assets Notes receivable and accounts receivable 1,446,468,814 1,311,608,760 Incl.: Notes receivable 518,658,477 719,375,448 Accounts receivable 927,810,337 592,233,312 Prepayments 102,966,630 91,176,675 Premium receivable Accounts receivable reinsurance Reserve for reinsurance receivable contracts Other receivables 213,754,669 207,424,295 Incl.: Interest receivable Dividend receivable Buying back the sale of financial assets Stock 753,404,127 600,139,750 Contract assets Assets held for sale 45,983,520 Non-current assets due within one year Other current assets 137,555,392 445,327,449 Total current assets 5,021,556,119 4,928,108,169 10 CSG HOLDING CO., LTD. The First Quarter Report 2019 Non-current assets: Loans and advances Debt investment Available for sale financial assets Other debt investment Held-to-maturity investment Long-term receivables Long-term equity investment Investment in other equity instruments Other non-current financial assets Investment real estate Fixed assets 9,754,386,128 9,930,843,775 Construction in progress 2,578,710,963 2,559,179,442 Productive biological assets Oil and gas assets Right of use assets Intangible assets 1,042,727,117 1,035,731,324 Development expenditure 63,358,454 74,549,257 Goodwill 376,720,156 376,720,156 Long-term prepaid expenses 12,278,598 12,746,609 Deferred tax assets 135,084,054 139,529,518 Other non-current assets 54,115,674 56,825,934 Total non-current assets 14,017,381,144 14,186,126,015 Total assets 19,038,937,263 19,114,234,184 Current liabilities: Short-term loan 2,907,911,732 2,922,679,590 Borrowing from the Central Bank Loans from other banks Transactional financial liabilities Financial liabilities measured at fair value through profit or loss Derivative financial liabilities Notes payable and accounts payable 1,407,340,246 1,315,009,263 Advance payment 193,978,924 206,631,008 11 CSG HOLDING CO., LTD. The First Quarter Report 2019 Financial Assets Sold for Repurchase Absorbing deposits and interbank deposits Acting trading securities Acting underwriting securities Payroll payable 125,250,903 266,459,151 Taxes payable 99,658,810 111,967,365 Other payables 514,488,917 552,751,187 Incl.: Interest payable 100,660,637 73,612,703 Dividend payable 2,827,373 2,846,362 Fees and commissions payable Accounts payable reinsurance Contract liability Liabilities held for sale Non-current liabilities due within one year 769,577,381 819,448,742 Other current liabilities 300,000 300,000 Total current liabilities 6,018,506,913 6,195,246,306 Non-current liabilities: Insurance contract reserve Long term loan 2,306,137,500 2,315,700,000 Bonds payable Incl.: Preferred stock Perpetual bond Lease liability Long-term payables 536,586,830 529,910,796 Long-term payroll pay Estimated liabilities Deferred income 564,376,142 601,825,780 Deferred income tax liabilities 21,412,781 22,118,840 Other non-current liabilities Total non-current liabilities 3,428,513,253 3,469,555,416 Total Liabilities 9,447,020,166 9,664,801,722 Owners' equity: Share capital 2,862,840,482 2,863,277,201 Other equity instruments 12 CSG HOLDING CO., LTD. The First Quarter Report 2019 Incl.: Preferred stock Perpetual bond Capital reserve 1,101,170,945 1,095,339,421 Less: treasury shares 275,555,628 277,180,983 Other comprehensive income 3,858,321 5,080,234 Special reserves 6,816,584 6,068,600 Surplus reserve 924,305,375 924,305,375 General risk preparation Undistributed profits 4,618,453,047 4,486,264,723 Total owner's equity attributable to the parent company 9,241,889,126 9,103,154,571 Minority shareholders' equity 350,027,971 346,277,891 Total owner's equity 9,591,917,097 9,449,432,462 Total Liabilities and Owner's Equity 19,038,937,263 19,114,234,184 Legal Representative : Chen Lin Responsible person in charge of the accounting: Wang Jian Principal of the financial department: Wang Wenxin 2. Balance Sheet of the Parent Company Unit: RMB Item Ending balance Beginning balance Current asset: Monetary Fund 1,157,296,686 1,700,726,151 Transactional financial assets Financial assets measured at fair value through profit or loss Derivative financial assets Notes receivable and accounts receivable Incl.: Notes receivable Accounts receivable Prepayments 821,265 438,167 Other receivables 3,384,540,626 2,912,516,245 Incl.: Interest receivable Dividend receivable Stock Contract assets 13 CSG HOLDING CO., LTD. The First Quarter Report 2019 Assets held for sale Non-current assets due within one year Other current assets 300,000,000 Total current assets 4,542,658,577 4,913,680,563 Non-current assets: Debt investment Available for sale financial assets Other debt investment Held-to-maturity investment Long-term receivables 1,200,000,000 1,200,000,000 Long-term equity investment 4,969,220,435 4,964,696,831 Investment in other equity instruments Other non-current financial assets Investment real estate Fixed assets 19,707,895 20,926,071 Construction in progress Productive biological assets Oil and gas assets Right of use assets Intangible assets 732,793 879,146 Development expenditure Goodwill Long-term prepaid expenses Deferred tax assets Other non-current assets 1,711,338 732,038 Total non-current assets 6,191,372,461 6,187,234,086 Total assets 10,734,031,038 11,100,914,649 Current liabilities: Short-term loan 2,050,000,000 2,000,000,000 Transactional financial liabilities Financial liabilities measured at fair value through profit or loss Derivative financial liabilities Notes payable and accounts payable 150,209,636 261,024 14 CSG HOLDING CO., LTD. The First Quarter Report 2019 Advance payment Contract liability Payroll payable 6,383,825 41,096,020 Taxes payable 2,223,489 1,099,231 Other payables 1,161,989,965 1,668,587,218 Incl.: Interest payable 55,455,963 41,572,125 Dividend payable 2,827,373 2,846,362 Liabilities held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 3,370,806,915 3,711,043,493 Non-current liabilities: Long term loan 2,000,000,000 2,000,000,000 Bonds payable Incl.: Preferred stock Perpetual bond Lease liability Long-term payables Long-term payroll pay Estimated liabilities Deferred income 184,088,245 184,642,520 Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 2,184,088,245 2,184,642,520 Total Liabilities 5,554,895,160 5,895,686,013 Owners' equity: Share capital 2,862,840,482 2,863,277,201 Other equity instruments Incl.: Preferred stock Perpetual bond Capital reserve 1,245,998,259 1,240,166,735 Less: treasury shares 275,555,628 277,180,983 Other comprehensive income Special reserves 15 CSG HOLDING CO., LTD. The First Quarter Report 2019 Surplus reserve 938,850,735 938,850,735 Undistributed profits 407,002,030 440,114,948 Total owner's equity 5,179,135,878 5,205,228,636 Total Liabilities and Owner's Equity 10,734,031,038 11,100,914,649 3. Consolidated Income Statement Unit: RMB Item Balance of this period Balance of last period I. Total revenue 2,222,721,514 2,629,471,994 Incl. :Business income 2,222,721,514 2,629,471,994 Interest income Earned premium Fee and commission income II. Total business cost 2,112,290,384 2,449,790,563 Incl. :Business cost 1,710,257,358 1,983,212,565 Interest expense Fee and commission expenses Surrender value Net reimbursement expenditure Net amount of withdrawal of insurance contract reserve Expenditures dividend policy Amortized Reinsurance Expenditures Taxes and surcharges 26,974,283 37,091,336 Sales expense 82,460,250 79,742,352 Management costs 123,978,598 171,498,676 Research and development expenses 79,671,948 81,471,157 Financial expenses 82,123,543 92,147,066 Incl. : Interest expense 87,627,795 96,320,142 Interest income 6,719,497 10,389,262 Asset impairment loss 6,824,404 4,627,411 Credit impairment loss Plus: Other income 47,460,637 7,579,659 Investment income (“-“ for loss) 16 CSG HOLDING CO., LTD. The First Quarter Report 2019 Incl. : Investment income in associates and joint ventures Exchange gains (“-“ for loss) Net open hedge income (“-“ for loss) Fair value change income(“-“ for loss) Asset disposal income(“-“ for loss) 6,877,195 -1,023,284 III. Operational profit (“-“ for loss) 164,768,962 186,237,806 Plus: non-operational income 687,874 2,200,396 Less: non-operational expenses 1,424,258 861,285 IV. Gross profit (“-“ for loss) 164,032,578 187,576,917 Less: Income tax expenses 28,094,174 28,552,401 V. Net profit (“-“ for net loss) 135,938,404 159,024,516 (I) Classification by business continuity 1. Net profit from continuous operation(“-“ for net loss) 135,938,404 159,024,516 2. Discontinued operating net profit(“-“ for net loss) (II) Classification by ownership 1. Net profit attributable to the owners of parent company 132,188,324 159,382,821 2. Minor shareholders’ equity 3,750,080 -358,305 VI. Net after-tax amount of other comprehensive income -1,221,913 -2,029,007 Net after-tax amount of other comprehensive income -1,221,913 -2,029,007 attributable to the owner of the parent company (I) Other comprehensive income that cannot be reclassified into profit or loss 1. Re-measure the change in the defined benefit plan 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method 3. Changes in fair value of other equity instruments investment 4. Changes in the fair value of the company's own credit risk 5.Others (II) Other comprehensive income that will be reclassified -1,221,913 -2,029,007 into profit or loss 1. Other comprehensive income that can be transferred to profit or loss under the equity method 17 CSG HOLDING CO., LTD. The First Quarter Report 2019 2. Changes in fair value of other debt investments 3. Gains and losses from changes in fair value of available-for-sale financial assets 4. The amount of financial assets reclassified into other comprehensive income 5. Held-to-maturity investments reclassified as gains and losses on available-for-sale financial assets 6. Other debt investment credit impairment provisions 7. Cash flow hedge reserve 8. Foreign-currency financial statement translation -1,221,913 -2,029,007 difference 9. Others Net after-tax amount of other comprehensive income attributable to minority shareholders VII. Total comprehensive income 134,716,491 156,995,509 Total comprehensive income attributable to owners of the 130,966,411 157,353,814 Company Total comprehensive income attributable to minority 3,750,080 -358,305 shareholders VIII. Earnings per share (I) Basic earnings per share 0.05 0.06 (II) Diluted earnings per share 0.05 0.06 Legal Representative : Chen Lin Responsible person in charge of the accounting: Wang Jian Principal of the financial department: Wang Wenxin 4. Income Statement of the Parent Company Unit: RMB Item Balance of this period Balance of last period I. Operating revenue 20,108,542 14,497,732 Less: Business cost Taxes and surcharges 220,610 125,403 Sales expense Management costs 22,307,483 36,644,195 Research and development expenses 8,833 18 CSG HOLDING CO., LTD. The First Quarter Report 2019 Financial expenses 31,366,290 8,614,081 Incl. : Interest expense 36,970,255 17,912,092 Interest income 5,862,210 9,650,504 Asset impairment loss -3,481 761 Credit impairment loss Plus: Other income 678,275 470,940 Investment income (“-“ for loss) Incl. : Investment income in associates and joint ventures Net open hedge income (“-“ for loss) Fair value change income(“-“ for loss) Asset disposal income(“-“ for loss) 2,440 II. Operational profit (“-“ for loss) -33,112,918 -30,413,328 Plus: non-operational income 127,450 Less: non-operational expenses III.. Gross profit (“-“ for loss) -33,112,918 -30,285,878 Less: Income tax expenses IV. Net profit (“-“ for net loss) -33,112,918 -30,285,878 (I) Net profit from continuous operation(“-“ for net loss) -33,112,918 -30,285,878 (II) Discontinued operating net profit(“-“ for net loss) V. Net after-tax amount of other comprehensive income (I) Other comprehensive income that cannot be reclassified into profit or loss 1. Re-measure the change in the defined benefit plan 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method 3. Changes in fair value of other equity instruments investment 4. Changes in the fair value of the company's own credit risk 5.Others (II) Other comprehensive income that will be reclassified into profit or loss 1. Other comprehensive income that can be transferred to profit or loss under the equity method 2. Changes in fair value of other debt investments 19 CSG HOLDING CO., LTD. The First Quarter Report 2019 3. Gains and losses from changes in fair value of available-for-sale financial assets 4. The amount of financial assets reclassified into other comprehensive income 5. Held-to-maturity investments reclassified as gains and losses on available-for-sale financial assets 6. Other debt investment credit impairment provisions 7. Cash flow hedge reserve 8.Foreign-currency financial statement translation difference 9. Others VI. Total comprehensive income -33,112,918 -30,285,878 VII. Earnings per share (I) Basic earnings per share (II) Diluted earnings per share 5. Consolidated Cash Flow Statement Unit: RMB Item Balance of this period Balance of last period I. Net cash flow from business operation: Cash received from sales of products and providing of 2,268,333,166 2,585,745,573 services Net increase in customer deposits and interbank deposits Net increase in borrowing from the Central Bank Net increase in disbursements to other financial institutions Cash received from the premium of the original insurance contract Net cash received from reinsurance business Net increase of insured deposit and investment Disposal of the net increase in financial assets measured at fair value through profit or loss Cash charged with interest, handling fees and commissions Net increase in funds disbursed Net increase in repurchase business funds Net cash received from trading securities 20 CSG HOLDING CO., LTD. The First Quarter Report 2019 Refunds of taxes 1,825,553 8,714,717 Received other cash related to business activities 26,891,640 19,321,411 Subtotal of cash inflow from operating activities 2,297,050,359 2,613,781,701 Cash paid for the purchase of goods and services 1,445,370,845 1,794,681,827 Net increase in customer loans and advances Deposit of net increase in Central Bank and interbank payments Cash for payment of original insurance contract claims Net increase in financial assets held for trading purposes Net increase in funds dismantled Cash for payment of interest, handling fees and commissions Cash paid for policy dividends Cash paid to and for employees 418,315,107 421,471,968 Payments of all types of taxes 138,793,875 182,508,067 Payment of other cash related to business activities 158,253,170 154,896,133 Subtotal of cash outflow from operating activities 2,160,732,997 2,553,557,995 Net cash flow from operating activities 136,317,362 60,223,706 II. Cash flows from investing activities: Recovery of Cash Received from Investment Cash received from investment income Net cash recovered from disposal of fixed assets, 334,400 1,772,886 intangible assets and other long-term assets Net cash received from disposal of subsidiaries and other business units Other cash received relating to investing activities 209,085 3,249,483 Subtotal of cash inflows from investment activities 543,485 5,022,369 Cash paid for the purchase and construction of fixed 127,234,513 112,300,336 assets, intangible assets and other long-term assets Cash for investment payments Net increase in pledge loans Net cash paid by subsidiaries and other business units Other cash paid relating to investing activities 606,824 14,102,400 Subtotal of cash outflows from investment activities 127,841,337 126,402,736 Net cash flows from investing activities -127,297,852 -121,380,367 21 CSG HOLDING CO., LTD. The First Quarter Report 2019 III. Cash flow from financing activities: Cash received by absorbing investments Incl. : Cash received by subsidiary companies to absorb minority shareholders' Investment Cash received from the loan 835,500,000 850,600,000 Cash received from the issuance of bonds Other financing-related cash received 500,000,000 303,833 Subtotal of cash inflows from financing activities 1,335,500,000 850,903,833 Cash paid for debt repayment 930,211,970 545,750,000 Cash paid for dividends, profits or interest payments 62,397,350 81,914,082 Incl. : Dividends and profits paid by subsidiaries to minority shareholders Payment of other cash related to financing activities 359,331,565 213,115,386 Subtotal of cash outflows from financing activities 1,351,940,885 840,779,468 Net cash flow from financing activities -16,440,885 10,124,365 IV. Influence of exchange rate alternation on cash and cash -1,620,779 -4,370,245 equivalents V. Net increase in cash and cash equivalents -9,042,154 -55,402,541 Plus: Balance of cash and cash equivalents at the 2,225,126,913 2,459,753,165 beginning of term VI. Balance of cash and cash equivalents at the end of term 2,216,084,759 2,404,350,624 6. Cash Flow Statement of the Parent Company Unit: RMB Item Balance of this period Balance of last period I. Net cash flow from business operation: Cash received from sales of products and providing of services Refunds of taxes Received other cash related to business activities 12,431,042 10,761,525 Subtotal of cash inflow from operating activities 12,431,042 10,761,525 Cash paid for the purchase of goods and services Cash paid to and for employees 51,404,986 38,812,139 Payments of all types of taxes 1,047,643 701,230 Payment of other cash related to business activities 8,308,180 4,822,289 22 CSG HOLDING CO., LTD. The First Quarter Report 2019 Subtotal of cash outflow from operating activities 60,760,809 44,335,658 Net cash flow from operating activities -48,329,767 -33,574,133 II. Cash flows from investing activities: Recovery of Cash Received from Investment Cash received from investment income Net cash recovered from disposal of fixed assets, 2,440 intangible assets and other long-term assets Net cash received from disposal of subsidiaries and other business units Other cash received relating to investing activities Subtotal of cash inflows from investment activities 2,440 Cash paid for the purchase and construction of fixed 1,522,855 262,260 assets, intangible assets and other long-term assets Cash for investment payments Net cash paid by subsidiaries and other business units Other cash paid relating to investing activities Subtotal of cash outflows from investment activities 1,522,855 262,260 Net cash flows from investing activities -1,522,855 -259,820 III. Cash flow from financing activities: Cash received by absorbing investments Cash received from the loan 700,000,000 500,000,000 Cash received from the issuance of bonds Other financing-related cash received 152,171,097 Subtotal of cash inflows from financing activities 700,000,000 652,171,097 Cash paid for debt repayment 650,000,000 250,000,000 Cash paid for dividends, profits or interest payments 22,874,958 19,945,850 Payment of other cash related to financing activities 670,685,645 Subtotal of cash outflows from financing activities 1,343,560,603 269,945,850 Net cash flow from financing activities -643,560,603 382,225,247 IV. Influence of exchange rate alternation on cash and cash -17,160 -33,040 equivalents V. Net increase in cash and cash equivalents -693,430,385 348,358,254 Plus: Balance of cash and cash equivalents at the 1,699,514,334 1,680,672,390 beginning of term VI. Balance of cash and cash equivalents at the end of term 1,006,083,949 2,029,030,644 23 CSG HOLDING CO., LTD. The First Quarter Report 2019 II. Note to the Adjustment of Financial Statements Adjustment of the relevant financial statements at current year beginning according to new standards for financial instruments, the new standards for revenues and the new standards for lease initially implemented □ Applicable √Not applicable 2. Note to the retroactive adjustment of the previous comparative data according to the new standards for financial instruments and the new standards for lease initially implemented □ Applicable √Not applicable II. Report of the Auditors Whether the First Quarter Report has been audited or not □ Yes √ No The First Quarter Report hasn’t been audited. Board of Directors of CSG Holding Co., Ltd. 26 April 2019 24