深圳中恒华发股份有限公司 2018 年第一季度报告全文 Shenzhen Zhongheng Huafa Co., Ltd. First Quarterly Report 2018 April 2018 1 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Section I. Important Notes Board of Directors and the Supervisory Committee of Shenzhen Zhongheng Huafa Co., Ltd (hereinafter referred to as the Company) and its directors, supervisors and senior executives should guarantee the reality, accuracy and completion of the quarterly report, there are no any fictitious statements, misleading statements or important omissions carried in this report, and shall take legal responsibilities, individual and/or joint. All Directors are attended the Board Meeting for Quarterly Report deliberation. Li Zhongqiu, person in charge of the Company, Yang Bin, person in charger of accounting works and Wu Ai’jie, person in charger of accounting organ (accounting officer) hereby confirm that the Financial Statement of this Quarterly Report is authentic, accurate and complete. 2 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Section II. Basic situation of the Company I. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data □Yes √ No At the same period of last Changes of this period over Current period year same period of last year Operating income (RMB) 171,620,013.62 191,829,256.72 -10.54% Net profit attributable to shareholders of 307,367.89 421,173.37 -27.02% the listed company (RMB) Net profit attributable to shareholders of the listed company after deducting 5,469.74 -36,964.59 114.80% non-recurring gains and losses (RMB) Net cash flow arising from operating 337,819.42 -18,501,959.59 101.83% activities (RMB) Basic earnings per share (RMB/Share) 0.0011 0.0015 -26.67% Diluted earnings per share (RMB/Share) 0.0011 0.0015 -26.67% Weighted average ROE 0.10% 0.13% -0.03% Changes of this period-end At the end of the reporting At the end of last year over same period-end of last period year Total assets (RMB) 600,196,482.65 629,762,731.38 -4.69% Net assets attributable to shareholder of 320,980,345.91 320,672,978.02 0.10% listed company (RMB) Items and amount of non-recurring gains and losses √ Applicable □ Not applicable In RMB Amount from year-begin to Item Note period-end Gains/losses from the disposal of non-current asset (including the -266,354.57 write-off that accrued for impairment of assets) Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to 450,000.00 national standards, which are closely relevant to enterprise’s business) Other non-operating income and expenditure except for the 60,618.20 3 深圳中恒华发股份有限公司 2018 年第一季度报告全文 aforementioned items Other gain/loss items satisfying the definition of nonrecurring 110,910.67 gain/loss account Less: impact on income tax 53,276.15 Total 301,898.15 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss 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, explain reasons □ Applicable √ Not applicable In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss 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 number of shareholders at the end of this report period and top ten shareholders 1. Total number of common shareholders at the end of this report period and top ten common shareholders In shares Total preference shareholders Total common stock shareholders in with voting rights recovered at 28,974 0 reporting period-end end of reporting period (if applicable) Top ten shareholders Amount of Number of share pledged/frozen Shareholder’s Nature of Proportion of Amount of shares restricted shares name shareholder shares held held State of share Amount held Wuhan Domestic Pledged 116,489,894 Zhongheng non-state-owned 41.14% 116,489,894 0 Frozen 116,489,894 Group legal person SEG (HONG Pledged 0 Overseas legal KONG) CO., 5.85% 16,569,560 0 person Frozen 0 LTD. GOOD HOPE Pledged 0 CORNER Overseas legal 4.49% 12,700,000 0 INVESTMENTS person Frozen 0 LTD Changjiang Pledged 0 Securities Overseas legal 1.89% 5,355,249 0 Brokerage person Frozen 0 (Hongkong) Co., 4 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Ltd. Domestic nature Pledged 0 Zhong Jiachao 1,124,774 0 person Frozen 0 LI SHERYN Overseas legal Pledged 0 1,036,200 0 ZHAN MING person Frozen 0 Domestic nature Pledged 0 Li Senzhuang 956,600 0 person Frozen 0 Domestic nature Pledged 0 Han Yaming 864,200 0 person Frozen 0 Overseas legal Pledged 0 BINGHUA LIU 840,313 0 person Frozen 0 Domestic nature Pledged 0 Zhou Hongbing 800,000 0 person Frozen 0 Top ten shareholders with unrestricted shares held Type of shares Shareholder’s name Amount of unrestricted shares held Type Amount RMB common Wuhan Zhongheng Group 116,489,894 116,489,894 share Domestically SEG (HONG KONG) CO., LTD. 16,569,560 listed foreign 16,569,560 shares Domestically GOOD HOPE CORNER 12,700,000 listed foreign 12,700,000 INVESTMENTS LTD shares Domestically Changjiang Securities Brokerage 5,355,249 listed foreign 5,355,249 (Hongkong) Co., Ltd. shares RMB common Zhong Jiachao 1,124,774 1,124,774 share Domestically LI SHERYN ZHAN MING 1,036,200 listed foreign 1,036,200 shares Domestically Li Senzhuang 956,600 listed foreign 956,600 shares Domestically Han Yaming 864,200 listed foreign 864,200 shares 5 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Domestically BINGHUA LIU 840,313 listed foreign 840,313 shares RMB common Zhou Hongbing 800,000 800,000 share Among the top ten shareholders, Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd. neither bears associated relationship with other shareholders, nor belongs to Explanation on associated the consistent actor that are prescribed in Measures for the Administration of Disclosure of relationship among the aforesaid Shareholder Equity Changes of Listed Companies. The Company neither knew whether there shareholders exists associated relationship among the other tradable shareholders, nor they belong to consistent actors that are prescribed in Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed Companies. Explanation on top 10 common shareholders involving margin N/A business (if applicable) 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. 2. Total shareholders with preferred stock held and shares held by top ten shareholders with preferred stock held □ Applicable √ Not applicable 6 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Section III. Significant Events I. Particulars about material changes in items of main accounting statement and financial index and explanations of reasons √Applicable □Not applicable Item 2018-3-31 2017-1-1 Y-o-y changes Reasons of changes Account paid in 21,059,239.02 2,878,128.01 631.70% Account paid in advance for material to Haier advance in the Period 8,687,027.96 4,335,729.72 100.36% Rental from Jifang Investment are not Other receivables collected in the period Construction in 1,172,756.00 654,356.00 79.22% Fence construction in Gongming increased in process the period Accounts payable 57,200,204.76 84,004,870.73 -31.91% Payable are written down by part of the payment paid in advance Account received 367,676.99 278,128.18 32.20% Some of the account for goods are collected in advance advance in the period Employee salary 3,106,633.16 5,083,357.93 -38.89% Year-end bonus are issued in the period payable Interest payable 255,829.74 164,895.80 55.15% Short-term loans increased in the period Item Jan.-March of 2018 Jan.-March of 2017 Y-o-y changes Reasons of changes Financial expenses 4,354,111.52 2,759,446.38 57.79% Short-term loans increased in the period Assets impairment - -93,425.39 100.00% Bad debt of last period are collected loss Income from 110,910.67 - Income from bank financial products investment Asset disposal -266,354.57 -17,113.46 Current fixed assets disposal losses. income Non-operating 1,381.80 271.73 408.52% Current tax payment is overdue. expenditure Item Jan.-March of 2018 Jan.-March of 2017 Y-o-y changes Reasons of changes 7,128,845.32 4,088,728.88 74.35% VAT paid in the period are increased at last Taxes paid period Cash received from 42,000,000.00 - Bank financial products are redemption recovering investment Cash received from 110,910.67 - Income from bank financial products 7 深圳中恒华发股份有限公司 2018 年第一季度报告全文 investment income Net cash received 412,682.00 55,901.58 638.23% Collection of the account from fixed assets from disposal of disposal declined in the period fixed, intangible and other long-term assets Cash paid for 3,851,816.62 2,406,232.31 60.08% Renewing fixed assets equipment in the purchasing fixed, period intangible and other long-term assets Cash paid for 42,000,000.00 - Purchasing bank financial prodcuts investment Cash received from 131,532,341.95 41,987,422.93 213.27% short-term loans increased in the period loans Cash paid for 131,560,722.31 41,098,717.81 220.11% Short-term loans are paid in the period settling debts II. Analysis and explanation of significant events and their influence and solutions √ Applicable □Not applicable (I) The Company signed Asset Exchange Contract with Wuhan Zhongheng Group on 29 April 2009 (details were referred to in the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the Company (namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district, Shenzhen (the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels were A627-005 andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of plan for 2010 Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land. The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first extraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the “Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area at Gongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Group shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots and the respectively contributed and constructed above-ground buildings before the land development, it is estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation. The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting held on September 11, 2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewal and the progress of related transactions of ‘the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen’”, the company has signed the “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, “Contract for the cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street, Guangming New District” and “Agreement on housing acquisition and removal compensation and resettlement” with Wuhan Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan Zhongheng Group”), Shenzhen 8 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”), and Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to as “Vanke Guangming”). On 12 September 2016, the Company received a “Notice of Arbitration No.: SHEN DP20160334” from SCIA, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen” against the Company and Wuhan Zhongheng Group. The arbitration court holds hearings on 12 November 2016 and 13 May 2017. Shenzhen Court of International Arbitration (SCIA) has given a ruling in August 2017, although most of the arbitration claims proposed by Shenzhen Vanke are rejected by arbitration court, the arbitration procedures and so-called cognizance of fact of contract breach still has problems in arbitration. The results have damaged the legitimate rights and interest of the Company, and we have putting forward the application for dismantling in February 2018 to the Shenzhen Intermediate People’s Court. The Court has accepted the case formally. Progress of the case found more in the Notices released on Juchao website (www.cninfo.com.cn) dated 14 Sept. 2016, 1 Nov. 2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017 and 9 Feb. 2018 respectively. (ii) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. Wuhan Zhongheng Group deferred the repurchase business day to 30 June 2017. on 1 Feb. 2016, Wuhan Zhongheng Group pledge the 27,349,953 shares held to China Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. The above mentioned shares are deferred for repurchase of stock pledge by Wuhan Zhongheng Group; pledge expired on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end of this period released, controlling shareholder still not removed the pledge and the Company has apply by letter, relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice released on Juchao website (www.cninfo.com.cn) date 2 Feb. 2018. (iii) stock of the Company 116,489,894 shares (41.14% in total share capital of the Company) held by controlling shareholdre Wuhan Zhongheng Group are being judicially freeze from 27 September 2016 to 26 September 2018. Found more in the notice released by the Company on Juchao Website (www.cninfo.com.cn) dated 27 October 2016 (iv) On March 21, 2014, Huafa Property and Shenzhen Jifang Investment Co., Ltd. (hereinafter referred to as "Jifang Investment") signed the "Shenzhen Housing Leasing Contract" and the "Supplemental Agreement on Leasing Contract", which were canceled on February 5, 2016. As Jifang Investment occupied the site, and defaulted rent, management fee and water and electricity bills in the long term, in order to safeguard the legitimate rights and interests, Huafa Property submitted a request for arbitration to Shenzhen Arbitration Commission on March 8, 2016, and received the (2016) SZCZ No. 346 ruling paper from Shenzhen Arbitration Commission in November 2016 which ruled Huafa Property won the lawsuit. See details on the notice published at www.cninfo.com.cn by the Company on November 8, 2016. (v) Mr. Li Yongping, the director and vice-president of the company, has applied for resigning the director, vice-president and the committee member of the special committee under the board of directors of the company due to the mandatory retirement age (60 years old), recommended by the company’s second largest shareholder, SEG (Hong Kong) Co., Ltd., the company’s first extraordinary general meeting of shareholders in 2017 considered and approved Mr. Zhang Guangliu to be the director of the company, and elected Mr. Zhang Guangliu as the vice-president of the company’s 9th Board of Directors by the 3rd extraordinary meeting of the board of directors of the company in 2017, see details on the relevant announcement the company issued at www.cninfo.com.cn on July 19, 2017. (vi) Commitment of overweight On 20 November 2017 and 28 November 2017, the controlling shareholders respectively made commitments to increase the shareholding of 2.83 million shares of the company’s B Shares and no less than 2.8 million shares of the company’s A Shares, with a commitment period of 6 months. As of the disclosure date of this report, it’s still in the commitment fulfillment period, and the 9 深圳中恒华发股份有限公司 2018 年第一季度报告全文 commitment has not been fulfilled. Summary of important issues Disclosure date Interim report disclosure index 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 Commitment Commitment Commitments Promise Content of commitments Implementation commitments date term The enterprise and its subsidiaries will not participate directly or indirectly in operation of the Implement business with competitive of Shen Wuhan since 12 April Huafa and its controlling subsidiary In normal Zhongheng 2007-03-29 2007 concerned, and not to damage the implementing Group throughout the interest of the Shen Huafa and its year controlling subsidiary by making use of the potential controlling-ship of the Shen Huafa either The enterprise and its subordinate enterprise shall avoid a related transaction as far as possible with Shen Huafa and its controlling subsidiary, as for the related dealings occurred inevitable or Commitments for have reasonable cause, the share reform enterprise promise to follow the Implement principle of fair-ness, justice and Wuhan since 12 April open-ness, signed the agreement in In normal Zhongheng 2007-03-29 2007 line with the laws, perform legal implementing Group throughout the program, fulfill information year disclosure obligation and relevant approval procedures according to the relevant laws, regulations and “Listing Rules” of the Shenzhen Stock Exchange, guarantee not to damage the legal interest of Shen Huafa and its shareholders through related transactions Wuhan After acquisition and assets Implement In normal Zhongheng restructuring, guarantee to have an 2007-03-29 since 12 April implementing Group independent staff, owns 2007 10 深圳中恒华发股份有限公司 2018 年第一季度报告全文 independent and completed assets, throughout the and independent in aspect of year business, financial and institution from Shen Huafa Commitments in report of acquisition or equity change Commitments in assets reorganization Commitments make in initial public offering or re-financing Equity incentive commitment Regarding the lawsuit with Shenzhen Vanke: 1. If the arbitration judges Shenzhen Vanke to win, the arbitration losses caused Implemented Wuhan by the contract disputes shall be since 20 In normal Zhongheng undertaken by Wuhan Zhongheng 2016-12-20 December implementing Group Group in full; 2. The contingent 2016 losses and risks arising from the termination of relevant contracts shall be undertaken by Wuhan Other Zhongheng Group in advance. commitments for medium and Ended as the small Promise to increasing shares of reporting period, shareholders Wuhan In 6 months holding as 2.83 million shares of the promises during Zhongheng 2017-11-20 since the date B-stock of the Company in 6 performance period Group of notification months since the letter delivery has not been implemented yet Ended as the Promise to increasing shares of reporting period, Wuhan n 6 months holding as 2.8 million shares of the promises during Zhongheng 2017-11-28 since the date A-stock at least in 6 months since performance period Group of notification the letter delivery has not been implemented yet Completed on Yes time(Y/N) 11 深圳中恒华发股份有限公司 2018 年第一季度报告全文 If the commitments is not fulfilled on time, shall Not applicable explain the specify reason and the next work plan IV. Predict of the business performance from January to June 2018 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 No security investment in the Period. VI. Derivative investment □ Applicable √ Not applicable No derivative investment in the Period. VII. Registration form for receiving research, communication and interview in the report period √Applicable □ Not applicable Date Method Type of investors Basic situation index of investigation 2018-01-04 Telephone communication Individual N/A VIII. Guarantee outside against the regulation □Applicable √Not applicable The Company has no external security against the rules in the Period. IX. Non-operational fund occupation from controlling shareholders and its related party □ Applicable √ Not applicable There are no controlling shareholders' and its related party's non-business capital occupying of the listed company. 12 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Section IV. Financial Statement I. Financial statement 1. Consolidate balance sheet Prepared by Shenzhen Zhongheng Huafa Co., Ltd In RMB Item Closing balance Opening balance Current assets: Monetary funds 50,833,311.45 68,812,495.97 Settlement provisions Capital lent Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable 46,630,194.64 64,778,266.65 Accounts receivable 138,153,697.04 148,795,998.26 Accounts paid in advance 21,059,239.02 2,878,128.01 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Interest receivable Dividend receivable Other receivables 8,687,027.96 4,335,729.72 Purchase restituted finance asset Inventories 56,501,648.45 60,387,021.65 Assets held for sale Non-current asset due within one year Other current assets 50,470.51 52,310.51 Total current assets 321,915,589.07 350,039,950.77 Non-current assets: Loans and payments on behalf 13 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Finance asset available for sales Held-to-maturity investment Long-term account receivable Long-term equity investment Investment property 51,978,405.02 52,410,958.62 Fixed assets 82,477,515.62 83,619,842.39 Construction in progress 1,172,756.00 654,356.00 Engineering material Disposal of fixed asset 92,857,471.69 92,857,471.69 Productive biological asset Oil and gas asset Intangible assets 42,934,409.72 43,307,316.37 Expense on Research and Development Goodwill Long-term expenses to be 129,166.54 141,666.55 apportioned Deferred income tax asset 6,731,168.99 6,731,168.99 Other non-current asset Total non-current asset 278,280,893.58 279,722,780.61 Total assets 600,196,482.65 629,762,731.38 Current liabilities: Short-term loans 166,169,693.38 166,620,264.81 Loan from central bank Absorbing deposit and interbank deposit Capital borrowed Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable 19,369,890.24 17,810,270.28 Accounts payable 57,200,204.76 84,004,870.73 Accounts received in advance 367,676.99 278,128.18 Selling financial asset of repurchase Commission charge and commission payable 14 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Wage payable 3,106,633.16 5,083,357.93 Taxes payable 11,310,456.31 15,136,277.68 Interest payable 255,829.74 164,895.80 Dividend payable Other accounts payable 21,371,341.16 19,927,276.95 Reinsurance payables Insurance contract reserve Security trading of agency Security sales of agency Liability held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 279,151,725.74 309,025,342.36 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable Special accounts payable Projected liabilities 64,411.00 64,411.00 Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 64,411.00 64,411.00 Total liabilities 279,216,136.74 309,089,753.36 Owner’s equity: Share capital 283,161,227.00 283,161,227.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 146,587,271.50 146,587,271.50 15 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Less: Inventory shares Other comprehensive income Reasonable reserve Surplus public reserve 77,391,593.25 77,391,593.25 Provision of general risk Retained profit -186,159,745.84 -186,467,113.73 Total owner’s equity attributable to 320,980,345.91 320,672,978.02 parent company Minority interests Total owner’s equity 320,980,345.91 320,672,978.02 Total liabilities and owner’s equity 600,196,482.65 629,762,731.38 Person in charger of accounting works: Yang Bin Person in charge of accounting organ: Wu Ai’jie 2. Balance Sheet of Parent Company In RMB Item Closing balance Opening balance Current assets: Monetary funds 14,421,294.39 25,181,764.87 Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable Accounts receivable Account paid in advance Interest receivable Dividends receivable Other receivables 108,465,005.40 99,922,143.84 Inventories 14,806.50 14,806.50 Assets held for sale Non-current assets maturing within one year Other current assets 16 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Total current assets 122,901,106.29 125,118,715.21 Non-current assets: Available-for-sale financial assets Held-to-maturity investments Long-term receivables Long-term equity investments 186,608,900.00 186,608,900.00 Investment property 27,281,005.68 27,583,299.22 Fixed assets 5,730,531.04 6,821,367.58 Construction in progress 1,172,756.00 654,356.00 Project materials Disposal of fixed assets 92,857,471.69 92,857,471.69 Productive biological assets Oil and natural gas assets Intangible assets 4,807,364.25 4,843,600.68 Research and development costs Goodwill Long-term deferred expenses 129,166.54 141,666.55 Deferred income tax assets 7,519,546.71 7,519,546.71 Other non-current assets Total non-current assets 326,106,741.91 327,030,208.43 Total assets 449,007,848.20 452,148,923.64 Current liabilities: Short-term borrowings 120,000,000.00 120,000,000.00 Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable Accounts payable 9,740,367.33 10,745,840.16 Accounts received in advance 44,210.00 67,210.00 Wage payable 833,147.02 1,039,196.20 Taxes payable 8,943,727.62 9,305,468.70 Interest payable Dividend payable 17 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Other accounts payable 12,412,764.86 14,339,551.78 Liability held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 151,974,216.83 155,497,266.84 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable Special accounts payable Projected liabilities 64,411.00 64,411.00 Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 64,411.00 64,411.00 Total liabilities 152,038,627.83 155,561,677.84 Owners’ equity: Share capita 283,161,227.00 283,161,227.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 146,587,271.50 146,587,271.50 Less: Inventory shares Other comprehensive income Reasonable reserve Surplus reserve 77,391,593.25 77,391,593.25 Retained profit -210,170,871.38 -210,552,845.95 Total owner’s equity 296,969,220.37 296,587,245.80 Total liabilities and owner’s equity 449,007,848.20 452,148,923.64 18 深圳中恒华发股份有限公司 2018 年第一季度报告全文 3. Consolidated Profit Statement In RMB Item Current Period Last Period I. Total operating income 171,620,013.62 191,829,256.72 Including: Operating income 171,620,013.62 191,829,256.72 Interest income Insurance gained Commission charge and commission income II. Total operating cost 171,509,663.58 191,831,362.18 Including: Operating cost 152,728,695.85 172,648,617.84 Interest expense Commission charge and commission expense Cash surrender value Net amount of expense of compensation Net amount of withdrawal of insurance contract reserve Bonus expense of guarantee slip Reinsurance expense Operating tax and extras 1,117,886.20 1,491,954.21 Sales expenses 3,844,118.14 3,335,114.13 Administration expenses 9,464,851.87 11,689,655.01 Financial expenses 4,354,111.52 2,759,446.38 Losses of devaluation of asset -93,425.39 Add: Changing income of fair value(Loss is listed with “-”) Investment income (Loss is listed 110,910.67 with “-”) Including: Investment income on affiliated company and joint venture Exchange income (Loss is listed with “-”) Assets disposal income (Loss is listed with “-”) 19 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Other income III. Operating profit (Loss is listed with 221,260.71 -2,105.46 “-”) Add: Non-operating income 512,000.00 628,235.81 Less: Non-operating expense 267,736.37 17,385.19 IV. Total Profit (Loss is listed with “-”) 465,524.34 608,745.16 Less: Income tax expense 158,156.45 187,571.79 V. Net profit (Net loss is listed with “-”) 307,367.89 421,173.37 (I) Continuous operation net profit 307,367.89 421,173.37 (Net loss is listed with “-”) (II) Discontinued operation net profit (Net loss is listed with “-”) Net profit attributable to owner’s of 307,367.89 421,173.37 parent company Minority shareholders’ gains and losses VI. Net after-tax of other comprehensive income Net after-tax of other comprehensive income attributable to owners of parent company (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1. Changes as a result of re-measurement of net defined benefit plan liability or asset 2. Share of the other comprehensive income of 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 20 深圳中恒华发股份有限公司 2018 年第一季度报告全文 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. Other Net after-tax of other comprehensive income attributable to minority shareholders VII. Total comprehensive income 307,367.89 421,173.37 Total comprehensive income 307,367.89 421,173.37 attributable to owners of parent Company Total comprehensive income attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share 0.0011 0.0015 (ii) Diluted earnings per share 0.0011 0.0015 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party Legal representative: Li Zhongqiu Person in charger of accounting works: Yang Bin Person in charge of accounting organ: Wu Ai’jie 4. Profit Statement of Parent Company In RMB Item Current Period Last Period I. Operating income 9,695,927.93 8,977,861.54 Less: Operating cost 1,069,611.54 921,292.12 Operating tax and extras 608,353.57 664,530.25 Sales expenses 21 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Administration expenses 5,038,857.70 5,698,725.53 Financial expenses 2,469,805.69 1,638,096.80 Losses of devaluation of asset -93,425.39 Add: Changing income of fair value(Loss is listed with “-”) Investment income (Loss is listed with “-”) Including: Investment income on affiliated company and joint venture Assets disposal income (Loss is listed with “-”) Other income II. Operating profit (Loss is listed 509,299.43 148,642.23 with “-”) Add: Non-operating income 48,833.89 Less: Non-operating expense III. Total Profit (Loss is listed with 509,299.43 197,476.12 “-”) Less: Income tax expense 127,324.86 72,725.38 IV. Net profit (Net loss is listed with 381,974.57 124,750.74 “-”) (I) Continuous operation net profit 381,974.57 124,750.74 (Net loss is listed with “-”) (II) Discontinued operation net profit (Net loss is listed with “-”) 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 re-measurement of net defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which will not be reclassified subsequently to profit and loss (II) Other comprehensive income 22 深圳中恒华发股份有限公司 2018 年第一季度报告全文 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. Other VI. Total comprehensive income 381,974.57 124,750.74 VII. Earnings per share: (i) Basic earnings per share 0.0013 0.0004 (ii) Diluted earnings per share 0.0013 0.0004 5. Consolidated Cash Flow Statement In RMB Item Current Period Last Period I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor 129,571,099.86 117,280,399.55 services Net increase of customer deposit and interbank deposit Net increase of loan from central bank Net increase of capital borrowed 23 深圳中恒华发股份有限公司 2018 年第一季度报告全文 from other financial institution Cash received from original insurance contract fee Net cash received from reinsurance business Net increase of insured savings and investment Net increase of amount from disposal financial assets that measured by fair value and with variation reckoned into current gains/losses Cash received from interest, commission charge and commission Net increase of capital borrowed Net increase of returned business capital Write-back of tax received Other cash received concerning 1,231,864.14 1,310,630.85 operating activities Subtotal of cash inflow arising from 130,802,964.00 118,591,030.40 operating activities Cash paid for purchasing commodities and receiving labor 96,423,780.37 103,498,045.42 service Net increase of customer loans and advances Net increase of deposits in central bank and interbank Cash paid for original insurance contract compensation Cash paid for interest, commission charge and commission Cash paid for bonus of guarantee slip Cash paid to/for staff and workers 18,269,550.80 17,901,932.73 Taxes paid 7,128,845.32 4,088,728.88 Other cash paid concerning 8,642,968.09 11,604,282.96 operating activities Subtotal of cash outflow arising from 130,465,144.58 137,092,989.99 24 深圳中恒华发股份有限公司 2018 年第一季度报告全文 operating activities Net cash flows arising from operating 337,819.42 -18,501,959.59 activities II. Cash flows arising from investing activities: Cash received from recovering 42,000,000.00 investment Cash received from investment 110,910.67 income Net cash received from disposal of fixed, intangible and other long-term 412,682.00 55,901.58 assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing 42,523,592.67 55,901.58 activities Cash paid for purchasing fixed, 3,851,816.62 2,406,232.31 intangible and other long-term assets Cash paid for investment 42,000,000.00 Net increase of mortgaged loans Net cash received from subsidiaries and other units obtained Other cash paid concerning investing activities Subtotal of cash outflow from investing 45,851,816.62 2,406,232.31 activities Net cash flows arising from investing -3,328,223.95 -2,350,330.73 activities III. Cash flows arising from financing activities Cash received from absorbing investment Including: Cash received from absorbing minority shareholders’ investment by subsidiaries Cash received from loans 131,532,341.95 41,987,422.93 25 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing 131,532,341.95 41,987,422.93 activities Cash paid for settling debts 131,560,722.31 41,098,717.81 Cash paid for dividend and profit 2,860,474.39 2,261,986.58 distributing or interest paying Including: Dividend and profit of minority shareholder paid by subsidiaries Other cash paid concerning financing activities Subtotal of cash outflow from 134,421,196.70 43,360,704.39 financing activities Net cash flows arising from financing -2,888,854.75 -1,373,281.46 activities IV. Influence on cash and cash equivalents due to fluctuation in -200,355.12 -184,437.86 exchange rate V. Net increase of cash and cash -6,079,614.40 -22,410,009.64 equivalents Add: Balance of cash and cash 81,474,974.30 104,015,312.97 equivalents at the period -begin VI. Balance of cash and cash 75,395,359.90 81,605,303.33 equivalents at the period -end 6. Cash Flow Statement of Parent Company In RMB Item Current Period Last Period I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor 5,470,760.50 5,288,856.39 services Write-back of tax received Other cash received concerning 100,278,749.63 20,545,629.33 operating activities 26 深圳中恒华发股份有限公司 2018 年第一季度报告全文 Subtotal of cash inflow arising from 105,749,510.13 25,834,485.72 operating activities Cash paid for purchasing commodities and receiving labor service Cash paid to/for staff and workers 899,173.60 1,584,455.10 Taxes paid 1,637,395.79 904,864.06 Other cash paid concerning 110,421,369.31 17,530,909.03 operating activities Subtotal of cash outflow arising from 112,957,938.70 20,020,228.19 operating activities Net cash flows arising from operating -7,208,428.57 5,814,257.53 activities II. Cash flows arising from investing activities: Cash received from recovering investment Cash received from investment income Net cash received from disposal of fixed, intangible and other long-term assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing activities Cash paid for purchasing fixed, 1,036,800.00 1,367,692.31 intangible and other long-term assets Cash paid for investment Net cash received from subsidiaries and other units Other cash paid concerning investing activities Subtotal of cash outflow from investing 1,036,800.00 1,367,692.31 activities Net cash flows arising from investing -1,036,800.00 -1,367,692.31 27 深圳中恒华发股份有限公司 2018 年第一季度报告全文 activities III. Cash flows arising from financing activities Cash received from absorbing investment Cash received from loans 100,000,000.00 Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing 100,000,000.00 activities Cash paid for settling debts 100,199,862.50 Cash paid for dividend and profit 2,315,212.52 1,643,625.00 distributing or interest paying Other cash paid concerning financing activities Subtotal of cash outflow from 102,515,075.02 1,643,625.00 financing activities Net cash flows arising from financing -2,515,075.02 -1,643,625.00 activities IV. Influence on cash and cash equivalents due to fluctuation in -166.89 42.91 exchange rate V. Net increase of cash and cash -10,760,470.48 2,802,983.13 equivalents Add: Balance of cash and cash 25,181,764.87 10,375,152.87 equivalents at the period -begin VI. Balance of cash and cash 14,421,294.39 13,178,136.00 equivalents at the period -end II. Audit report Whether the first quarterly report had been audited or not □ Yes √ No The first quarterly report of the Company had not been audited. 28