The 3st Quarterly Report 2015 (Main Text). Stock code: 000024, 200024 Stock short name: ZSDC, ZSJB Announcement No.: [CMPD] 2015 - 101 The 3st Quarterly Report 2015 (Main Text) Section I Important Notice Board of Directors and Board of Supervisors of the Company and its directors, supervisors and officers hereby guarantee that this resolution is free from any fault, misleading statement or major omission and bear joint and several liabilities for the truthfulness, accuracy and completeness of contents described herein. All board members have been present at the board meeting for auditing the Q3 report. The Report Q3 2015 has not been audited by the accounting firm. The legal representative Sun Chengming, Chief Financial Director Wu Zhenqin and Manager of Finance Department Li Shifang hereby state that the financial statements under the Report are authentic and complete. The Report is made in Chinese and English. In case of any discrepancy, the Chinese version shall prevail. 1 The 3st Quarterly Report 2015 (Main Text). Section II Changes in Main Financial Data and Shareholders I. Main accounting data and financial indices No retroactive adjustment or restatement of accounting data for previous years due to changes in accounting policies and correction of accounting errors End of report period End of last year Increase or decrease Total assets (yuan) 181,417,972,515.29 151,692,365,118.58 19.60% Net assets attributable to the shareholders of listed company 32,871,275,531.09 31,094,416,110.82 5.71% (yuan) From beginning of Year-on-year increase Year-on-year increase or Report period year to end of report or decrease decrease period Business income (yuan) 5,932,085,076.85 -23.02% 23,906,033,514.31 0.64% Net profits attributable to the shareholders of listed company 73,504,383.25 -83.85% 2,219,006,547.94 -0.97% (yuan) Net profits attributable to shareholders of listed company after 149,400,339.79 -68.01% 1,899,717,324.43 -17.76% deducting non-recurring profits and losses (yuan) Net cash flow from business -- -- -2,652,969,494.21 51.72% activities (yuan) Basic earnings per share (yuan 0.03 -83.33% 0.86 -1.15% /share) Diluted earnings per share (yuan 0.03 -83.33% 0.86 -1.15% /share) 1.41 percentage point 1.23 percentage points l Weighted average return on equity 0.22% 6.95% s lower ower Items and amount of non-recurring profits and losses Unit: yuan Items of non-recurring profits or losses Amount from beginning of year to end of report period Losses and profits on disposal of non-current assets 64,022.09 Government subsidies 11,958,706.10 Profits or losses from external entrusted loans 19,141,960.71 Other non-business incomes and expenditures deducted by the above items 8,297,525.04 2 The 3st Quarterly Report 2015 (Main Text). Other profits or losses recognized by CSRC 298,306,322.02 Affected amount of minority shareholders -9,792,112.92 Affected amount after income taxes -8,687,199.53 Total 319,289,223.51 Note 1: From January to September, the net profits attributable to the shareholders of listed company and operating income maintained simultaneous increase. At the end of reporting period, the balance of advances received was RMB 53,272 million increasing by RMB 17,673 million, up 50% from the year earlier. In this quarter, operating income decreased by RMB 1,774 million, down 23.02% from the year earlier due to the carry-forward progress of the Company’s property project, which resulted in the gross profits decreasing by RMB 20.24 million during the reporting period. However, exchange losses generated from the foreign currency loans increased due to the fluctuation of foreign exchange rate in August resulting in the sharp decrease of the net profits attributable to the shareholders of listed company from the year earlier. From January to September, exchange losses included in the financial expenses amounted to RMB 382,317.4 thousand (wherein the exchange losses amounting to RMB 428.31 million in the third quarter), while exchange losses included in the financial expenses amounted to RMB 50,151.7 thousand in the same period last year. Holding a certain amount of foreign currency loans is the important factor that comprehensive financing cost of the Company is low; in view of the frequent fluctuation of foreign exchange rate, the Company successively substitute RMB loans for part of foreign currency loans by taking into account the demand for foreign currency to reduce the fluctuation risk of foreign exchange rate. Note 2: the long-term equity investment after change in control of Shenzhen Overseas Chinese Town Co., Ltd. (OCT) by the Company is measured by fair value. The equity fair value is mainly inventory evaluation added value. From January to September, 2014, based on the ratio of actual carry-forward inventory area in the total salable area of inventory to be carried forward on the date of control right change of OCT, the added value of long-term equity investment acknowledged by assessment added value subject to corresponding written off is RMB 29,197,537.31. Note 3: The Company acquired control over Beijing Guangying Residential Property Development Limited and consolidated financial statements on May 1, 2015. Its identifiable net assets was measured as per the fair value by the Company on the date of control right change and the investment income of RMB 432,538,803 is included due to inventory evaluation appreciation. In May to September 2015, based on the ratio of actual carry-forward inventory area in the total salable area of inventory to be carried forward on the date of control right change, the inventory evaluation appreciation subject to corresponding written off is RMB 458,087,030.62 (Net amount after deduction of income tax expenses and minority shareholders’ profit or loss is RMB 116,812,192.81). Due to control right change, other owners’ equity in connection with the previously held equities transferred and included in the investment income is RMB 11,777,249.14. II. Total and top ten shareholders at the end of reporting period 1. Total and top ten common shareholders at the end of report period Unit: share Total number of common shareholders at the end of report 99,026 (A-shares: 89,426, B-shares: 9,600) period Top ten common shareholders Nature of Quantity of Quantity of Pledged or frozen Name of shareholder Share shareholder shares restricted shares shares 3 The 3st Quarterly Report 2015 (Main Text). Quant Status ity China Merchants Shekou Industrial Zone Holdings State-owned 40.38% 1,040,128,975 1,040,128,975 None None Co., Ltd. corporate Overseas FULL SPACE INVESTMENT LIMITED 5.48% 141,216,075 141,216,075 None None corporate Overseas China Merchants Securities (HK) Co., Ltd. 2.96% 76,125,377 73,863,367 None None corporate Overseas FOXTROT INTERNATIONAL LIMITED 1.61% 41,580,000 41,580,000 None None corporate Overseas ORIENTURE INVESTMENT LTD 1.55% 39,904,717 39,904,717 None None corporate Overseas GOLDEN CHINA MASTER FUND 1.03% 26,487,893 None None None organization Domestic Sun Huigang natural 0.98% 25,310,000 None None None person Domestic non-state-o National Social Security Fund 118 Portfolio 0.86% 22,189,608 None None None wned corporate Domestic non-state-o National Social Security Fund 108 Portfolio 0.68% 17,541,741 None None None wned corporate Overseas CITIGROUP GLOBAL MARKETS LIMITED 0.57% 14,760,893 None None None organization Top ten un-restricted common shareholders Class of shares Name of shareholder Quantity of un-restricted common shares Class Quantity GOLDEN CHINA MASTER FUND 26,487,893 B share 26,487,893 Sun Huigang 25,310,000 A share 25,310,000 National Social Security Fund 118 Portfolio 22,189,608 A share 22,189,608 National Social Security Fund 108 Portfolio 17,541,741 A share 17,541,741 CITIGROUP GLOBAL MARKETS LIMITED 14,760,893 A share 14,760,893 Fang Deji 13,640,535 A share 13,640,535 GREENWOODS CHINA ALPHA MASTER 13,031,565 B share 13,031,565 FUND 4 The 3st Quarterly Report 2015 (Main Text). Invesco Great Wall Selective Blue Chip Share 13,000,000 A share 13,000,000 Securities Investment Funds Rongtong New Blue Chip Securities Investment 11,364,786 A share 11,364,786 Funds National Social Security Fund 413 Portfolio 11,000,023 A share 11,000,023 China Merchants Shekou Industrial Zone Holdings Co., Ltd. (hereinafter referred to as “CMSIZH”) and its subsidiaries - FULL SPACE INVESTMENT LIMITED, FOXTROT INTERNATIONAL LIMITED and ORIENTURE Statement on relationship and acting in concert of INVESTMENT LTD are Persons Acting in Concert; GOLDEN CHINA the above-mentioned shareholders MASTER FUND and GREENWOODS CHINA ALPHA MASTER FUND are Persons Acting in Concert. Dafeng International, a subsidiary of CMSIZH, has entrusted 73,863,367 shares of the Company to China Merchants Securities (Hong Kong) Co., Ltd. Description of the top 10 common shareholders None envolved in securities margin trading (if any) 5 The 3st Quarterly Report 2015 (Main Text). Section III Important Events I. Facts and causes for change in main accounting statement items and financial indices during the report period Unit: RMB 10,000 Increase or Financial liabilities 2015.09.30 2014.12.31 decrease Main cause of change (±%) Land prepayment converted into Prepayments 136,083 361,919 -62% inventory The increase of the due intercourse Other receivables 1,616,843 894,186 81% funds of joint ventures and associated enterprises Other current assets 514,687 355,070 45% Increase of pre-paid tax Short-term loans 30,000 388,690 -92% Payment of short-term debt The increase of the payable project Notes payable 55,993 4,734 1083% funds with bills Increase of advance payment for Advances received 5,327,221 3,559,929 50% building sales expense received The payment of unpaid taxes and Tax payable 141,242 313,369 -55% dues Interests payable 28,809 19,214 50% Increase of borrowings Other payables 1,598,584 1,178,251 36% Increase of payables for partners Issuing the tickets and convertible Bonds payable 762,942 301,808 153% bonds The increasing payables by Long-term payables 361,944 10,435 3368% transferring the rights and interests of subsidiary companies The fair-value adjustment of assets Deferred income tax liabilities 48,048 3,582 1241% by enterprise merger Increase or January - January - Profits or losses decrease Main cause of change September 2015 September 2014 (±%) Year-on-year increase of interest Financial expenses 115,514 49,584 133% exchange and foreign exchange loss at current period The original holding shares shall be Investment income 54,288 21,572 152% remeasured in accordance with the fair value for the changes of control 6 The 3st Quarterly Report 2015 (Main Text). right of the newly-added subsidiary companies. Increase or January - January - Cash flow decrease Main cause of changes September 2015 September 2014 (±%) Cash inflows for operating Increase of received payment for 4,633,691 3,529,602 31% activities building sales expense Net cash flows from operating Increase of received payment for -265,297 -549,463 52% activities building sales expense Consolidation of newly-added Sub-total of cash inflows from 70,090 4,003 1651% subsidiaries’ cash at the beginning of investing activities period The increasing investment spending Sub-total of cash outflows from 157,094 11,785 1233% of joint ventures and associated investing activities enterprises Investment spending cash is greater Net cash flows from investing -87,004 -7,783 1018% than the increased net cash of activities acquisition subsidiaries Cash inflows for financing 2,338,104 1,647,066 42% The increase of bank loans and bonds activities The year-on-year increase of bank Net cash flows from financing 670,522 323,679 107% loans and bonds are more than that of activities return loans II. Analysis and interpretation of key progress and influence Disclosing website of interim report Summary of important events Date of disclosure provided Approved in the 6th Temporary Conference of the 7th Board of Directors of the Company in 2015, the Company has applied to China Securities Regulatory Commission for withdrawal of the Detailed information has been disclosed on documents on applying for the public China Securities Journal, Securities Times, issuance of convertible bonds in 2014. The August 12, 2015 Shanghai Securities News, Hong Kong Company has received the Notice on Commercial Daily, Securities Daily and Review Termination of the Administrative Cninfo http://www.cninfo.com.cn. Licensing Application by China Securities Regulatory Commission ([2015] No.131). China Securities Regulatory Commission decided to terminate the review for the above administrative license application. 7 The 3st Quarterly Report 2015 (Main Text). Relevant matters relating to the Issuance of Detailed information has been disclosed on A-shares by China Merchants Shekou China Securities Journal, Securities Times, Industrial Zone Holdings Co., Ltd. for September 18, 2015, September 24, 2015, Shanghai Securities News, Hong Kong Stock-for-stock of the Company and October 10, 2015 Commercial Daily, Securities Daily and Issuance of A-shares to Specific Objects Cninfo http://www.cninfo.com.cn. for Raising of Supporting Funds III. Existing commitments made by the Company or shareholders of 5% and above in/before the report period □ Applicable □ Inapplicable Commitmen Performanc Commitment Content Time Term t party e Till two During the years after report the period, Commitment of After reform of non-tradable shares, land and shareholder commitmen equity division CMSIZH other high-quality assets will be continued to be December 9, 2005 no longer ts have reform input to support the Company development. holds the been shares of the strictly Company fulfilled. WHEREAS, the convertible bonds to be issued by China Merchants Property in public in 2015 During the are required for issuance of convertible bond this report time, as the holding stockholder of CMSIZH period, makes a commitment: provided that the Company Commitment made Long-term commitmen CMSIZH and investors suffer losses arising out of the March 11, 2015 in IPO/refinancing effective ts have violation of laws and rules including the matter of been leaving non-disclosed land idle during the report strictly period by China Merchants Property, the fulfilled. committing party shall undertake the corresponding liability for damage. Not to (directly or indirectly) engage in or develop any businesses or projects with business Till two During the scopes similar to the Company; not to establish, years after report develop, participate in or assist in any enterprises the period, Other commitments with any direct or indirect competition with the shareholder commitmen for non-majority CMSIZH Company for the China Merchants Group and the March 19, 2008 no longer ts have shareholders related parties or on behalf of any third parties; holds the been not to engage in or participate in (directly or shares of the strictly indirectly in) activities that compete with the Company fulfilled. Company by taking advantages of the information obtained from the Company; and not to have any 8 The 3st Quarterly Report 2015 (Main Text). other competing behaviors that infringe or may infringe the Company interests. Has the commitment performed in a Yes timely manner Cause for failed performance and Inapplicable next plan (if any) IV. Estimates of 2015 Business Performance Inapplicable V. Security investment Inapplicable VI. Equities of other listed company held by the company Inapplicable VII. Investment in derivatives Inapplicable VIII. Research, communication, interview, etc. received during the reporting period Category of the Main discussion points and Time Place Method Party received party information provided Telephone July 1, 2015 Shenzhen Individual investors Individual investors communication Telephone July 2, 2015 Shenzhen Individual investors Individual investors communication Telephone July 3, 2015 Shenzhen Individual investors Individual investors communication Telephone July 6, 2015 Shenzhen Individual investors Individual investors communication Telephone July 7, 2015 Shenzhen Individual investors Individual investors communication Telephone July 8, 2015 Shenzhen Individual investors Individual investors communication 9 The 3st Quarterly Report 2015 (Main Text). Telephone ① Introduction to the July 9, 2015 Shenzhen Individual investors Individual investors communication Company’s business operation; Telephone July 10, 2015 Shenzhen Individual investors Individual investors ② Discussion on industrial communication development; Jefferies, China July 10, 2015 Shenzhen Field research Institution investors ③ Provision of declared AMC information and the project Monday, July 13, Telephone Shenzhen Individual investors Individual investors brochure of the Company; 2015 communication ④ Visit to the on-sale Telephone buildings of the Company July 14, 2015 Shenzhen Individual investors Individual investors communication and provision of sales Telephone brochure. July 15, 2015 Shenzhen Individual investors Individual investors communication Telephone July 16, 2015 Shenzhen Individual investors Individual investors communication Telephone July 17, 2015 Shenzhen Individual investors Individual investors communication Telephone July 20, 2015 Shenzhen Individual investors Individual investors communication Telephone July 21, 2015 Shenzhen Individual investors Individual investors communication Telephone July 21, 2015 Shenzhen Institution investors GF Securities communication Telephone July 22, 2015 Shenzhen Individual investors Individual investors communication Telephone July 23, 2015 Shenzhen Individual investors Individual investors communication Telephone July 24, 2015 Shenzhen Individual investors Individual investors communication Telephone July 27, 2015 Shenzhen Individual investors Individual investors communication Telephone July 28, 2015 Shenzhen Individual investors Individual investors communication Telephone July 29, 2015 Shenzhen Individual investors Individual investors communication Telephone July 30, 2015 Shenzhen Individual investors Individual investors communication Telephone July 31, 2015 Shenzhen Individual investors Individual investors communication 10 The 3st Quarterly Report 2015 (Main Text). Telephone August 3, 2015 Shenzhen Individual investors Individual investors communication Telephone August 4, 2015 Shenzhen Individual investors Individual investors communication Telephone August 4, 2015 Shenzhen Institution investors PINGAN Securities communication Telephone August 5, 2015 Shenzhen Individual investors Individual investors communication Telephone August 6, 2015 Shenzhen Individual investors Individual investors communication Telephone August 7, 2015 Shenzhen Individual investors Individual investors communication Telephone August 10, 2015 Shenzhen Individual investors Individual investors communication ① Introduction to the Telephone August 10, 2015 Shenzhen Institution investors GTJA Company’s business communication operation; Telephone August 11, 2015 Shenzhen Individual investors Individual investors ② Discussion on industrial communication development; Telephone ③ Provision of declared August 12, 2015 Shenzhen Individual investors Individual investors communication information and the project Telephone brochure of the Company; August 13, 2015 Shenzhen Individual investors Individual investors communication ④ Visit to the on-sale buildings of the Company Telephone August 14, 2015 Shenzhen Individual investors Individual investors and provision of sales communication brochure. Telephone August 17, 2015 Shenzhen Individual investors Individual investors communication Telephone August 18, 2015 Shenzhen Individual investors Individual investors communication Telephone August 19, 2015 Shenzhen Individual investors Individual investors communication Telephone August 20, 2015 Shenzhen Individual investors Individual investors communication Telephone August 21, 2015 Shenzhen Individual investors Individual investors communication Telephone August 24, 2015 Shenzhen Individual investors Individual investors communication Telephone August 25, 2015 Shenzhen Individual investors Individual investors communication 11 The 3st Quarterly Report 2015 (Main Text). Telephone August 26, 2015 Shenzhen Individual investors Individual investors communication Telephone August 27, 2015 Shenzhen Individual investors Individual investors communication Telephone August 28, 2015 Shenzhen Individual investors Individual investors communication Telephone August 31, 2015 Shenzhen Individual investors Individual investors communication Telephone September 1, 2015 Shenzhen Individual investors Individual investors communication Telephone September 2, 2015 Shenzhen Individual investors Individual investors communication Telephone September 3, 2015 Shenzhen Individual investors Individual investors communication Telephone September 4, 2015 Shenzhen Individual investors Individual investors communication Telephone September 7, 2015 Shenzhen Individual investors Individual investors communication Telephone September 8, 2015 Shenzhen Individual investors Individual investors communication Telephone September 9, 2015 Shenzhen Individual investors Individual investors communication September 10, Shenzhen Field research Institution investors Samsung Securities 2015 September 10, Telephone Shenzhen Individual investors Individual investors 2015 communication September 11, Telephone Shenzhen Individual investors Individual investors 2015 communication September 14, Telephone Shenzhen Individual investors Individual investors 2015 communication September 15, Telephone Shenzhen Individual investors Individual investors 2015 communication September 16, Telephone Shenzhen Individual investors Individual investors 2015 communication September 17, Telephone Shenzhen Individual investors Individual investors 2015 communication China Securities, September 17, Telephone Shenzhen Institution investors Guotai Junan 2015 communication Securities, GF 12 The 3st Quarterly Report 2015 (Main Text). Securities, Haitong Securities, Orient Securities, Essence Securities, Industrial Securities, Rongtong Fund, Invesco Great Wall, Greenwoods Asset, etc. September 18, Telephone ① Introduction to the Shenzhen Individual investors Individual investors 2015 communication Company’s business operation; China Securities, ② Discussion on industrial GF Securities, development; Haitong Securities, September 20, Shenzhen Field research Institution investors Invesco Great Wall, ③ Provision of declared 2015 Rongtong Fund, information and the project ICBC Credit brochure of the Company; Suisse, etc. ④ Visit to the on-sale buildings of the Company September 21, Telephone Shenzhen Individual investors Individual investors and provision of sales 2015 communication brochure. China Securities, China AMC, E September 22, Telephone Shenzhen Institution investors Fund, Yuanta 2015 communication Securities, China Southern Fund, etc. September 22, Telephone Shenzhen Individual investors Individual investors 2015 communication GTJA, China International Fund Management, September 23, Telephone Shenzhen Institution investors China AMC, GF 2015 communication Fund, E Fund, Invesco Great Wall Fund, etc. September 23, Telephone Shenzhen Individual investors Individual investors 2015 communication September 24, Telephone Shenzhen Individual investors Individual investors 2015 communication September 25, Telephone Shenzhen Individual investors Individual investors 2015 communication 13 The 3st Quarterly Report 2015 (Main Text). September 28, Telephone Shenzhen Individual investors Individual investors 2015 communication Morgan Stanley, September 29, Telephone Shenzhen Institution investors LBN ADVISERS, 2015 communication DBS BANK, etc. September 29, Telephone Shenzhen Individual investors Individual investors 2015 communication September 30, Telephone Shenzhen Individual investors Individual investors 2015 communication 14