BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) Stock Code: 200725 Stock Name: BOE B Announcement No. 2018-052 BOE TECHNOLOGY GROUP CO., LTD. THIRD QUARTER REPORT 2018 (SUMMARY) Part I Important Notes The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of BOE Technology Group Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein. All the Company’s directors have attended the Board meeting for the review of this Report and its summary. Mr. Wang Dongsheng, the Company’s legal representative, Mr. Chen Yanshun, president of the Company’s Execution Committee (Chief Executive Officer), Ms. Sun Yun, the Company’s Chief Financial Officer, and Ms. Yang Xiaoping, head of the Company’s financial department (equivalent to financial manager) hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete. This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail. Part II Key Corporate Information I Key Consolidated Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No Item 30 September 2018 31 December 2017 Change (%) Total assets (RMB) 289,680,059,305.00 256,108,741,849.00 13.11% Equity attributable to the listed 85,818,805,445.00 84,809,816,377.00 1.19% 1 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) company’s shareholders (RMB) Item Q3 2018 YoY change (%) Q1-Q3 2018 YoY change (%) Operating revenue (RMB) 25,990,508,323.00 4.79% 69,464,413,289.00 0.08% Net profit attributable to the listed 403,860,235.00 -81.42% 3,379,066,735.00 -47.82% company’s shareholders (RMB) Net profit attributable to the listed company’s shareholders before 119,979,875.00 -93.68% 1,098,848,634.00 -81.43% exceptional items (RMB) Net cash generated from/used in -- -- 18,297,602,412.00 -1.05% operating activities (RMB) Basic earnings per share (RMB/share) 0.012 -80.65% 0.097 -47.57% Diluted earnings per share (RMB/share) 0.012 -80.65% 0.097 -47.57% Weighted average return on equity (%) 0.47% -82.33% 3.92% -50.75% Exceptional gains and losses: √ Applicable □ Not applicable Unit: RMB Item Q1-Q3 2018 Note Gain or loss on disposal of non-current assets (inclusive of impairment allowance -17,906,941.00 N/A write-offs) Tax rebates, reductions and exemptions given with ultra vires approval or in lack of 0.00 N/A official approval documents Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per 2,431,679,361.00 N/A government’s uniform standards) Capital occupation charges on non-financial enterprises that are charged to current profit or 0.00 N/A loss Gain equal to the amount by which investment costs for the Company to obtain subsidiaries, associates and joint ventures are lower than the Company’s enjoyable fair 9,317,244.00 N/A value of identifiable net asset value of investees when making investments Gain or loss on non-monetary asset swaps 0.00 N/A Gain or loss on investments or assets entrusted to other entities for management 0.00 N/A Allowance for asset impairments due to acts of God such as natural disasters 0.00 N/A Gain or loss on debt restructuring 0.00 N/A Restructuring costs in staff arrangement, integration, etc. 0.00 N/A Gain or loss on over-fair value amount as a result of transactions with distinctly unfair 0.00 N/A prices Current profit or loss on subsidiaries obtained in business combinations involving 0.00 N/A 2 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) enterprises under common control from period-beginning to combination dates, net Gain or loss on contingencies that do not arise in the Company’s ordinary course of 0.00 N/A business Gain or loss on fair-value changes in trading financial assets and liabilities & investment income from disposal of trading financial assets and liabilities and available-for-sale 273,977,796.00 N/A financial assets (exclusive of effective portion of hedges that arise in the Company’s ordinary course of business) Reversed portion of impairment allowance for accounts receivable which are tested 153,235.00 N/A individually for impairment Gain or loss on loan entrustments 0.00 N/A Gain or loss on fair-value changes in investment property of which subsequent 0.00 N/A measurement is carried out using fair value method Effects of all adjustments required by taxation, accounting and other applicable laws and 0.00 N/A regulations on current profit or loss Income from charges on entrusted management 0.00 N/A Non-operating income and expense other than above 48,197,584.00 N/A Other gains and losses that meet definition of exceptional gain/loss 0.00 N/A Less: Income tax effects 313,681,228.00 N/A Non-controlling interests effects (net of tax) 151,518,950.00 N/A Total 2,280,218,101.00 -- Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items: □ Applicable √ Not applicable No such cases for the Reporting Period. 3 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) II Total Number of Shareholders and Holdings of Top 10 Shareholders at 30 September 2018 1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders Unit: share Number of ordinary shareholders 1,423,472 (including 1,384,020 A-shareholders and 39,452 B-shareholders) Top 10 shareholders Nature of Shareholding Number of Restricted Shares in pledge or frozen Name of shareholder shareholder percentage shares shares Status Shares Beijing State-owned Capital State-owned Operation and Management 11.68% 4,063,333,333 0 N/A 0 legal person Center Chongqing Ezcapital State-owned Opto-electronics Industry 7.62% 2,653,000,041 0 N/A 0 legal person Investment Co., Ltd. Hefei Jianxiang Investment State-owned 7.21% 2,510,142,953 0 N/A 0 Co., Ltd. legal person Beijing Yizhuang Investment State-owned 3.57% 1,241,423,641 0 N/A 0 Holdings Co., Ltd legal person Beijing BOE Investment & State-owned 2.36% 822,092,180 0 N/A 0 Development Co., Ltd. legal person Hong Kong Securities Foreign 1.42% 493,694,620 0 N/A 0 Clearing Company Ltd. legal person National Social Security Fund Other 1.07% 371,014,227 0 N/A 0 Portfolio 108 Beijing Electronics Holdings State-owned 0.79% 273,735,583 0 N/A 0 Co., Ltd. legal person Central Huijin Assets State-owned 0.71% 248,305,300 0 N/A 0 Management Co., Ltd legal person China Securities Finance Other 0.38% 132,480,249 0 N/A 0 Corporation Limited Top 10 unrestricted shareholders Shares by type Name of shareholder Unrestricted shares Type Shares Beijing State-owned Capital Operation and RMB-denominated 4,063,333,333 4,063,333,333 Management Center ordinary stock Chongqing Ezcapital Opto-electronics 2,653,000,041 RMB-denominated 2,653,000,041 4 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) Industry Investment Co., Ltd. ordinary stock RMB-denominated Hefei Jianxiang Investment Co., Ltd. 2,510,142,953 2,510,142,953 ordinary stock Beijing Yizhuang Investment Holdings Co., RMB-denominated 1,241,423,641 1,241,423,641 Ltd ordinary stock Beijing BOE Investment & Development RMB-denominated 822,092,180 822,092,180 Co., Ltd. ordinary stock Hong Kong Securities Clearing Company RMB-denominated 493,694,620 493,694,620 Ltd. ordinary stock National Social Security Fund Portfolio RMB-denominated 371,014,227 371,014,227 108 ordinary stock RMB-denominated Beijing Electronics Holdings Co., Ltd. 273,735,583 273,735,583 ordinary stock RMB-denominated Central Huijin Assets Management Co., Ltd 248,305,300 248,305,300 ordinary stock China Securities Finance Corporation RMB-denominated 132,480,249 132,480,249 Limited ordinary stock 1. Beijing State-owned Capital Operation and Management Center held 100% equities of Beijing Electronics Holdings Co., Ltd. 2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOE Investment & Development Co., Ltd. and was its controlling shareholder. 3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co., Ltd. and Chongqing Capital Photoelectricity Investment Co., Ltd., by entering into Implementation Protocol of Voting Right respectively, agreed to maintain all of the shares held by them respectively unanimous with Beijing BOE Investment & Related or acting-in-concert parties among Development Co., Ltd. when executing the voting rights of the shareholders. shareholders above 4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital Operation and Management Center handed over 70% of the shares directly held by it to Beijing Electronics Holdings Co., Ltd. for management through Stock Management Protocol, and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except for disposing right and usufruct of the shares, of which the rest 30% voting right maintained unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement according to Implementation Protocol of Voting Right. 5. Except for the above relationships, the Company does not know any other connected party or acting-in-concert party among the top 10 shareholders. Top 10 ordinary shareholders involved in Naught securities margin trading Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yea √ No 5 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) No such cases in the Reporting Period. 2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them □ Applicable √ Not applicable 6 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) Part III Significant Events I Changes in Selected Consolidated Financial Statement Line Items and Explanation of why √ Applicable □ Not applicable Unit: RMB 30 September 2018 31 December 2017 (or Change Item Explanation of why (or Q1~Q3 2018) Q1~Q3 2017) (%) Mass production on new production lines and Inventories 12,178,965,256.00 8,957,719,381.00 36% additions to the consolidation scope Long-term equity Shift of associate to subsidiary during the 4,036,661,192.00 6,928,854,415.00 -42% investments current period Construction in Rise in investments in new constructions in the 67,442,708,371.00 50,761,250,426.00 33% progress current period Rise in material purchases as a result of the Notes and accounts 22,096,470,048.00 16,749,587,533.00 32% production and sales ramp-up in the current payable period Current portion of 6,068,813,097.00 9,109,708,511.00 -33% Repayment of bank loans in the current period non-current liabilities Finance costs 2,242,661,339.00 1,413,361,041.00 59% Greater exchange loss and interest expenditure Decline in inventory valuation allowances, Asset impairment loss 783,454,658.00 1,757,042,642.00 -55% which were recorded at the lower of the cost and the net realizable value Rise in government subsidies in the current Other investment 2,261,274,910.00 458,317,281.00 393% period Higher gains on wealth management products Investment income 258,565,775.00 61,147,940.00 323% during the current period Net cash generated Rise in bank loan repayments in the current from/used in financing 11,681,695,994.00 27,057,943,017.00 -57% period activities II Progress, Influence and Solutions Associated with Significant Events √ Applicable □ Not applicable 1. The wholly-owned subsidiary, BOE Technology (Hong Kong) Co., Ltd., filed lawsuits to Beijing Municipal Higher People's Court against following Defendants: Letv Mobile Intelligent Information Technology (Beijing) Co., Ltd. (referred to as “Letv Mobile” 7 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) hereinafter) , TV Plus Holdings (Beijing) Limited, Leseil Mobile Technology (Beijing) Co., Ltd. and JiaYueting, with the total amount of claims being about US$41.84 million. Beijing Municipal Higher People's Court issued Notice of Case Acceptance and Civil Ruling Paper for property preservation on 6 July 2017 and 31 July 2017 respectively. Letv Mobile raised the jurisdiction objection to Beijing Municipal Higher People's Court, which was rejected, and also instituted an appeal to the Supreme People's Court for verdict on jurisdiction objection. On 29 June 2018, the Supreme People's Court issued the final verdict to dismiss Letv Mobile’s appeal and sustain the original ruling. For receivables corresponding to aforementioned amount of claims, the Company has counted provision for bad debts as per regulations in accounting standard accordingly; therefore, it has uncertain influences on the Company. index to disclosure website for Overview of significant events Disclosure date interim report Announcement on Connected Transaction regarding Participation in 31 July 2018 www.cninfo.com.cn Beijing Electronic Control Industrial Investment Co., Ltd. III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Other Parties, Failed to Fulfill on Time during Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. IV 2018 Annual Operating Performance Forecast Warning of a forecast loss on or a forecast significant year-on-year change in net profit for year 2018, as well as explanation of why: □ Applicable √ Not applicable 8 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) V Securities Investments √ Applicable □ Not applicable Unit: RMB Gain/Lo ss on Purcha fair-valu Accumulated Fundin Security Security Initial Measure sed in Sold in Gain/loss in Beginning e fair-value Ending carrying Accountin Security type ment Report Reporting Reporting g code name investment cost method carrying amount changes changes charged ing Period Period amount g title in to equity source Period Reportin g Period Available-f Domestically/ Fair TPV or-sale Self-fu Overseas HK00903 134,658,158.00 value 21,584,703.00 0.00 -13,251,799.00 0.00 0.00 196,070.00 14,791,508.00 Technology financial nded listed stock method assets Available-f Domestically/ Fair Electronic or-sale Self-fu Overseas SH600658 90,160,428.00 value 108,996,372.00 0.00 23,298,083.00 0.00 0.00 1,875,523.00 69,973,707.00 Zone financial nded listed stock method assets Available-f Domestically/ Fair Bank of or-sale Self-fu Overseas HK01963 120,084,375.00 value 130,968,760.00 0.00 -15,895,655.00 0.00 0.00 3,033,233.00 104,188,720.00 Chongqing financial nded listed stock method assets BlackRock Available-f Global Fair or-sale Self-fu Funds BLK Allocation 0.00 value 6,347,799.00 0.00 2,081,841.00 0.00 6,179,429.00 2,570,403.00 0.00 financial nded Fund (USD) method assets A2 Domestically/ China Fair Available-f Self-fu HK06066 70,041,364.00 65,856,319.00 0.00 -24,453,603.00 0.00 0.00 0.00 45,587,761.00 Overseas Securities value or-sale nded 9 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) listed stock method financial assets Available-f Domestically/ New century Fair or-sale Self-fu Overseas HK01518 medical 140,895,855.00 value 178,837,871.00 0.00 605,921.00 0.00 662,426.00 1,127,547.00 141,501,776.00 financial nded listed stock treatment method assets Available-f Domestically/ Z-Obee Fair or-sale Self-fu Overseas HK00948 Holdings 0.00 value 246,566.00 0.00 305,200.00 0.00 290,658.00 299,797.00 0.00 financial nded listed stock Ltd. method assets Other securities investments held at the 0.00 -- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -- -- period-end Total 555,840,180.00 -- 512,838,390.00 0.00 -27,310,012.00 0.00 7,132,513.00 9,102,573.00 376,043,472.00 -- -- Disclosure date of announcement on Board’s consent for securities N/A investments Disclosure date of announcement on general meeting’s consent for securities N/A investments 10 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) VI Wealth Management Entrustment √ Applicable □ Not applicable Unit: RMB’0,000 (in RMB ten thousand yuan) Outstanding amount Type of wealth management Funding source Principal Overdue amount before maturity Wealth management product Self-funded 1,257,000 583,200 0 purchased from bank Total 1,257,000 583,200 0 High-risk wealth management entrustments with amounts that are individually significant, or with low security, low liquidity, or no protection of the principal: □ Applicable √ Not applicable Wealth management entrustments with possible impairments including an expectedly unrecoverable principal: □ Applicable √ Not applicable VII Investments in Derivative Financial Instruments □ Applicable √ Not applicable No such cases in the Reporting Period. VIII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc. during Reporting Period √ Applicable □ Not applicable Date of visit Way of visit Type of visitor About 3 July 2018 By one-on-one meeting Institution 4 July 2018 By one-on-one meeting Institution 5 July 2018 By one-on-one meeting Institution Performance of the Company for the first 12 July 2018 By one-on-one meeting Institution half of the year and industrial situation; 17 July 2018 By one-on-one meeting Institution Main operating information of the 18 July 2018 By one-on-one meeting Institution Company; Technology and product innovation; 26 July 2018 By one-on-one meeting Institution Future strategic layout. 29 August 2018 By one-on-one meeting Institution 13 September 2018 By one-on-one meeting Institution 20 September 2018 By one-on-one meeting Institution 11 BOE Technology Group Co., Ltd. Third Quarter Report 2018 (Summary) IX Irregularities in Provision of Guarantees for External Parties □ Applicable √ Not applicable No such cases in the Reporting Period. X Occupation of the Company’s Capital by Controlling Shareholder or Its Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. Chairman of the Board (signature): Wang Dongsheng Date of the Board’s approval of this Report: 26 October 2018 12