The 3rd Quarterly Report 2017(Text) Stock code:200771 Stock ID:Hangqilun B Announcement No.2017-69 Hangzhou Steam Turbine Co., Ltd. The Third Quarterly Report 2017(Text) 1 The 3rd Quarterly Report 2017(Text) 1 Important notes The Board of Directors,the Supervisory Committee, the directors, the supervisors, and executives of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Quarterly Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Quarterly Report. All of the directors presented the board meeting at which this Quarterly Report was examined. Mr. Zheng Bin, The Company Leader, Mr. Pu Yangshuo, Chief financial officer and the Mr.Zhao Jiamao, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in the report. 2 The 3rd Quarterly Report 2017(Text) II.Main financial data and changes of shareholders (1)Main accounting data and financial Index Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not. No As at the end of the As at the end of last year Changed (%)over end of prev. year reporting period Gross assets(RMB) 11,224,208,951.10 10,550,899,708.34 6.38% Net assets attributable to the shareholders of 6,278,110,666.11 6,385,346,243.23 -1.68% the listed company(RMB) Increase/decrease over Between beginning of Changed (%)over Reporting period the same period of last the year to the end of end of prev. year year(%) the report period Operating income(RMB) 925,501,518.37 5.84% 2,589,226,220.63 15.50% Net profit attributable to the shareholders of 19,997,776.79 168.75% 63,993,581.17 206.05% the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 9,699,270.59 126.56% 13,259,488.98 116.58% listed company(RMB) Cash flow generated by business operation, -- -- 199,924,781.38 -44.63% net(RMB) Basic earning per share(RMB/Share) 0.027 169.23% 0.085 206.25% Diluted gains per 0.027 169.23% 0.085 206.25% share(RMB/Share)(RMB/Share) Weighted average income/asset ratio(%) 0.32% 1.02% 1.01% 2.45% Items and amount of non-current gains and losses In RMB Amount (Year-beginning to the Non-recurring gain and loss items Notes end of the report period.) Non-current asset disposal gain/loss(including the write-off part for which 2,724,203.46 assets impairment provision is made) Govemment subsidy recognized in current gain and loss(excluding those closely related to the Company’s business and granted under the state’s 3,158,099.85 policies) Gain/loss from change of fair value of transactional financial asset and 52,715,774.41 3 The 3rd Quarterly Report 2017(Text) liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets other than valid period value instruments related to the Company’s common businesses Other non-business income and expenditures other than the above 3,384,963.82 Less:Amount of influence of income tax 10,147,425.90 Influence on minority shareholders’ equity (after tax) 1,101,523.45 Total 50,734,092.19 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. None of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 4 The 3rd Quarterly Report 2017(Text) II.Total Shareholders and Shares Held by Top Ten Shareholders at the End of the Reporting Period 1. About Total Common Shareholders, Total Preference Shareholders with the Voting Power Recovered and the Shares Held by Top Ten Common Shareholders In shares Total preference shareholders with the Total number of common shareholders at 14,916 voting power recovered at the end of the 0 the period-end reporting period(if any) Shares held by the top 10 shareholders Pledging or Amount of Share freezing Properties of tradable shares Shareholder name proportion Quantity Status shareholder with Conditional Qua % of the held ntity shares State-owned Hangzhou Steam Turbine Power Group Co., Ltd. 63.64% 479,824,800 479,824,800 legal person BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX Foreign legal 0.63% 4,722,804 0 FUND person Foreign legal NORGES BANK 0.57% 4,303,675 0 person Foreign legal VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 0.46% 3,454,046 0 person Foreign legal GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 0.35% 2,670,262 0 person Foreign legal ISHARES CORE MSCI EMERGING MARKETS ETF 0.34% 2,546,600 0 person State-owned China Merchants Secutities(HK)Co., Ltd. 0.31% 2,319,872 0 legal person Domestic Xia Zulin 0.28% 2,147,400 0 Natural person Foreign legal CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD 0.25% 1,905,960 0 person Foreign legal CREDIT SUISSE AG HONG KONG BRANCH 0.23% 1,729,759 0 person Shares held by the Top 10 Shareholders of Non-restricted shares Number of the non-restricted Share type Shareholders’ Names shares held Share type Quantity 5 The 3rd Quarterly Report 2017(Text) BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX Foreign shares placed 4,722,804 4,722,804 FUND in domestic exchange Foreign shares placed NORGES BANK 4,303,675 4,303,675 in domestic exchange Foreign shares placed VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 3,454,046 3,454,046 in domestic exchange Foreign shares placed GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 2,670,262 2,670,262 in domestic exchange Foreign shares placed ISHARES CORE MSCI EMERGING MARKETS ETF 2,546,600 2,546,600 in domestic exchange Foreign shares placed China Merchants Secutities(HK)Co., Ltd. 2,319,872 2,319,872 in domestic exchange Foreign shares placed Xia Zulin 2,147,400 2,147,400 in domestic exchange CHINA INT'L CAPITAL CORP HONG KONG SECURITIES Foreign shares placed 1,905,960 1,905,960 LTD in domestic exchange Foreign shares placed CREDIT SUISSE AG HONG KONG BRANCH 1,729,759 1,729,759 in domestic exchange Foreign shares placed Shenwan Hongyuan Securities(H.K)Co., Ltd. 1,368,900 1,368,900 in domestic exchange (1)It is unknown to the Company if there is any relationship among the top 10 common share holders without restriction; (2) Hangzhou Steam Turbine Explanation on associated relationship or concerted action of the Group Co., Ltd. is not an action-in-concert” party with any of other above shareholders shareholders as described by the “Administration Rules of Informational Disclosure about Change of Shareholding Statues of PLCs”. Note to the top 10 common stockholders involved in margin Not applicable financing & securities lending (If any) Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period. 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. 2.Total number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the report period Not applicable 6 The 3rd Quarterly Report 2017(Text) III. Significant Events I. Changes in the principal accounting statement items and financial indications and the causes In RMB Balance sheet items Ending balance in Opening balance in Proportion Causes of change CNY CNY of the change Note receivable Mainly due to the notes receivable received in 631,626,005.81 479,716,321.62 31.67% the current period increased Advance payments Mainly due to current advances to raw 359,433,917.88 202,184,858.83 77.77% materials increased Note payable Mainly due to increase in acceptance of current 195,415,523.63 143,007,715.10 36.65% period Advances from Mainly due to the current increase in the new 2,396,631,380.02 1,827,959,793.62 31.11% customers contract Taxes and surcharges Mainly due to there is no value-added tax at the 18,561,605.50 90,239,673.16 -79.43% payable beginning of this period Deferred income Mainly due to increase in financial subsidies 9,357,937.15 5,422,895.00 72.56% received in the current period Income statement End of term Same period of last Scale of Remarks on the change items term change Operation income Mainly due to this issue will further strengthen 2,589,226,220.63 2,241,834,391.89 15.50% the market development efforts, increase the number of sales units Operation cost Mainly due to the current operating income 1,828,109,215.33 1,487,970,320.21 22.86% increased year on year, the corresponding increase in operating costs Mainly due to the accounts receivable with long Impairment loss on 95,749,825.99 166,025,332.68 -42.33% aging accounts are better recovered and bad assets debts are reduced Mainly due to the current sale of Long Beach Investment income 106,730,672.88 21,938,936.95 386.49% shares and received the formation of Hangzhou Bank dividend income increased Cash flow statement Amount in the Same period of the Proportion Causes of change Items reporting period previous year , CNY n f the change Cash flow generated Mainly due to cash paid for the purchase of by business 199,924,781.38 361,060,410.70 -44.63% goods in the current period increased year on operation, net year Net cash flow -60,830,933.81 -460,559,408.37 86.79% Mainly due to the net redemption and 7 The 3rd Quarterly Report 2017(Text) generated by investment income of the current financial investment products increased year on year Net increasing of Mainly due to the net cash flow from investing cash and cash 89,725,778.97 -155,001,766.35 157.89% activities increased during the current period equivalents II. Progress of Significant Events, their Influences and Analytical Notice on the Solutions Not applicable III. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer, directors, supervisors, senior executives or other related parties in the reporting period and commitments unfinished in implementation at the end of the reporting period Non-existence IV. Anticipation of Business Performance of 2017 Alert of loss or significant change in net profit from the beginning of year to the end of next report period or comparing with the same period of last year, and statement of causations. Not applicable V. Investment in securities Non-existence VI. Investment in derivatives Non-existence VII. Registration form of such Activities as Reception, Research, Communication, Interview in the Reporting Period Reception time Way of reception Types of visitors Basic index August 31, Onsite Details are the relevant information disclosure Individual 2017 investigation (http://www.cninfo.com.cn/) VIII. Outward Guarantee against the Regulations Not applicable IX. Non-operational Occupancy of the Company’s Capital by the Controlling Shareholder and its Related Parties Non-existence X. Implementation of the social Responsibility of taking targeted measures to alleviate poverty in light of local Conditions. In The report third quarter, the company neither carried out the work of taking targeted measures to alleviate poverty in light of local conditions nor has such a plan. 8 The 3rd Quarterly Report 2017(Text) Hangzhou Steam Turbine Co., Ltd. Chairman of the Board: Zheng Bin October 25, 2017 9