FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Stock Code: 000026 200026 Short Form of Stock: FIYTA , FIYTA B Announcement No: 2020-022 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary 1 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Section 1 Important Notice The Board of Directors, the Supervisor y Committee, directors, supervisors and senior executives hereby individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are neither material omissions nor errors which would render any statement misleading. All the directors attended the board meeting for reviewing the Quarter Report. Huang Yongfeng, the Company leader, Chen Zhuo, chief financia l officer, and Tian Hui, the manager of the accounting department (treasurer) hereby confirm the authenticity and completeness of the financial report enclosed in this Quarter Report. 2 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Section 2 Company Profile I. Summary of Accounting/Financial Data Does the Company need to make retroactive adjustment or restatement of the accounting data of the previous years No Year-on-year Same period of the previous Reporting period increase/decrease in the year reporting period Revenue in CNY 588, 361,057.06 893, 389,751.73 -34.14% Net profit attributable to the Company’s -12,974, 795.53 64,359,084.45 -120.16% shareholders, in CNY Net profit attributable to the Company’s shareholders less the non-recurring items, in -13,738, 773.72 61,517,359.28 -122.33% CNY Net cash flows arising from operating activities, -106,747,751.88 10,730,388.47 -1,094.82% in CNY Basic earning per share (CNY/share) -0.0294 0.1467 -120.04% Diluted earning per share (CNY/share) -0.0294 0.1453 -120.23% Return on equity, weighted average -0.49% 2.47% -2.96% Increase/decrease at the end End of the reporting period End of the previous year of the year over the end of the previous year Total assets (in CNY) 3,651,180,885.03 3,760,923,285.37 -2.92% Net profit attributable to the Company’s 2,635,350,676.43 2,654,533,766.99 -0.72% shareholders, in CNY Non-recurring gain/loss items and the amount involved In CNY Amount from the year beginning Items Note to the end of the reporting period Gain/loss from disposal of non-current assets, including the part offset -62,305. 15 from the provision for impairment of assets. The government subsidies included in the profits and losses of the current period ( (excluding government grants which are closely related 742, 609.63 to the Company’s business and conform with the national standard amount or quantity) 3 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Other non-operating income and expenses other than the aforesaid 268, 428.02 items Less: Amount affected by the income tax 184, 754.31 Total 763, 978.19 -- 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. Inapplicable II. Statement of total shareholders and shares held by the top 10 shareholders by the end of the reporting period 1. Quantity of the shares held by the common shareholders and preferred shareholders whose voting rights are restored and statement of shareholding by the top 10 shareholders In shares Total preference shareholders with the Total common shareholders at the end 37,827 voting power recovered at the end of the 0 of the reporting period reporting period (if any) Shareholding by top 10 shareholders Number of the Pledging or freezing Names of the Nature of the Shareholding Shareholding restricted shares Status of the Shareholders shareholder proportion quantity Quantity held shares AVIC International State corporate 36.79% 162, 977,327 0 Holding Limited Domestic natural #Yang Zugui 3.84% 17,018,806 0 person Domestic natural Yang Sancai 1.17% 5,202,700 0 person ZHONGYIN FUND - ICBC - Shanghai Domestic Haitong Securities non-state-owned 0.23% 999, 200 0 & Assets legal person Management Co., Ltd. Domestic natural Zhang Xuewei 0.22% 958, 000 0 person 4 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Penghua Fund - Minsheng Bank - Domestic Penghua Fund - non-state-owned 0.21% 951, 700 0 Huili No. 1 Assets legal person Management Plan Domestic natural Ma Xinting 0.20% 900, 000 0 person Domestic natural # Li Enhai 0.20% 883, 500 0 person Domestic natural # Shen Xuewen 0.20% 883, 420 0 person Domestic natural Liang Shaoyun 0.18% 781, 312 0 person Shares held by top 10 shareholders of unrestricted shares Share type Names of the Shareholders Quantity of unrestricted shares held a Share type Quantity CNY ordinary AVIC International Holding Limited 162, 977,327 162, 977,327 shares CNY ordinary #Yang Zugui 17,018,806 17,018,806 shares CNY ordinary Yang Sancai 5,202,700 5,202,700 shares ZHONGYIN FUND - ICBC - Shanghai CNY ordinary Haitong Securities & Assets 999, 200 999, 200 shares Management Co., Ltd. CNY ordinary Zhang Xuewei 958, 000 958, 000 shares Penghua Fund - Minsheng Bank - CNY ordinary Penghua Fund - Huili No. 1 Assets 951, 700 951, 700 shares Management Plan CNY ordinary Ma Xinting 900, 000 900, 000 shares CNY ordinary # Li Enhai 883, 500 883, 500 shares CNY ordinary # Shen Xuewen 883, 420 883, 420 shares CNY ordinary Liang Shaoyun 781, 312 781, 312 shares 5 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Explanation on associated relationship or consistent action of the above Inapplicable shareholders Note to the top 10 shareholders involved in margin financing & securities lending Inapplicable (if any) Did the top ten common shareholders or top ten shareholders of unrestricted common shares conduct contractual repurchase during the reporting period? No 2. Total preferred shareholders and the shareholding by the top 10 preferred shareholders Inapplicable 6 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Section 3 Significant Events I. Changes of the major financial data and fina ncial indicators during the reporting period and the causes (I) Balance sheet items Items Amount at the end of the Amount at the year Variation proportion (% ) Cause of the movement reporting period beginning Advance payments 17,670,023. 88 10,847,962.28 62.89% It was mainly due to increase of the advance payment during the reporting period over the year beginning Accounts payable 109, 655,368.72 279, 772,787.37 -60.81% It was mainly due to partial payment for goods procured during the reporting period Advance receipts 11,669, 963.64 23,433,463.57 -50.20% It was mainly due to decrease of the advances on sales during the reporting period over the year beginning Payroll payable 43,225,454. 85 82,602,845.67 -47.67% Mainly consists of the commissions of the previous year,the year-end bonus, etc. payable to employees during the reporting period (II) Profit Statement I tems Items Reporting period Same period of the previous Variation proportion (% ) Cause of the movement year Operating revenue 588, 361,057.06 893, 389,751.73 -34.14% Mainly due to the impact of COVID-19 epidemic upon the revenue from the watch industry Taxes and surcharges 3,674,419.66 7,967,226.11 -53.88% Decrease of VAT, etc. was mainly due to the impact from the decline of the operation revenue during the reporting period Other income 742, 609.63 3,807,765.25 -80.50% Mainly due to decrease of the government subsidy received during the reporting period Operation profit -18,792, 471.52 82,187,315.46 -122.87% Mainly due to decrease of the operation revenue during the reporting period 7 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary (III)Items of Cash Flow Statement Items Reporting period Same period of the previous Variation proportion (% ) Cause of the movement year Net cash flows arising -106,747,751.88 10,730,388.47 -1094.82% It mainly refers to the decrease from operating activities of sales revenue collection during the reporting period affected by the decline in operation revenue Net cash flow arising from -24,341, 946.96 -50,729, 730.85 -52.02% It mainly refers to the decrease investment activities of the capital input for store improvement during the reporting period compared with the same period of last year and the project payment paid for FIYTA Clock Building in the same period of the previous year. Net cash flow arising from 82,992,799. 27 22,731,443.97 265. 10% It was mainly due to the mild capital-raising activities increase of the bank loans over the same period of the previous year during the reporting period Net increase of cash and -48,188, 978.55 -17,400, 331.36 176. 94% It mainly refers to the decrease cash equivalents of sales revenue collection during the reporting period affected by the decline in operation revenue FIYTA's principal business activities are watch brand management and watch retails. The sudden outbreak of COVID -19 at the beginning of 2020 resulted in a serious negative impact on the offline consumption. During the reporting period, the company launched the "War System", strictly in accordance with the deployment of the central government and superiors, and did its best to prevent and control the epidemic. In order to cope with the impact of the epidemic on the business, the Company quickly adjusted its business strategy, made full efforts to promote cost control, and strengthened cash flow management. While carrying forward the resumption of work and production of offline channels, the Company also accelerated the investment in online platforms, and actively expanded community marketing and social marketing through WeChat, live show, etc. Judging from the performance of the operating data in each month of the first quarter, the Company showed a robust market recovery ability and strong adaptability to the adjustment. In February, the month worst affected by the epidemic, the Company's business revenue fell by more than 70% year on year and recorded a substantial loss.In march, with the operating environment still extremely difficult, the Company's revenue returned to about 70% of the level of the same period last year with only a slight deficit. It is expected that the Compan y as a whole may achieve monthly profit in April and gradually turn to normal in the second quarter. After the baptism with the epidemic, our team shall be further enhanced in its combat capability. At present, it is still uncertain about the development trend of the epidemic both at home and abroad and its subsequent impact on the consumer market. The Company shall pay close attention to and actively cope with the situation. Under the personal direction of General Secretary Xi Jinping, China has brought the epidemic under fundamental control. The 8 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Chinese government is trying every means to support the whole people to get through this tough time with various policies and promote the economy recovery. At present, the Company has restored its production and o peration basically to normal, the rate of employees’ return to work has exceeded 96%, and there is no confirmed COVID -19 case; the Company's offline sales channels have been basically restored to operation, and the sales have been improved day by day. The order delivery of the Company's precision technology and smart watches and other innovative business as well as the launch of new smart watches are being carried out in an planned way and the Company is maintaining a good momentum of growth in its business . The Company shall continue to take "brand power, product power and channel power" as the core, speed up the digital transformation, strengthen the competitive superiority; shall increase investment in precision technology to build hard core strength; accelerate innovation-driven development, and promote the Company's overall business to smart retail and high-end precision technology transformation and upgrading. The Company believes that all the above work shall provide the Company with continuous impetus to meet market opportunities and sustainable development in the future. II. Progress of significant events, their effects and analysis on the solutions Repurchase and Cancellation of the Partially Restricted Shares Involved in 2018 A Share Restricted Stoc k Incentive Plan (Phase 1) The 3rd session of the Ninth Board of Directors held on November 12, 2018 and 2019 1st Extraordinary General Meeting held on January 11, 2019 decided to start 2018 A-Share Restricted Stock Incentive Program (Phase I), which was later on reviewed and approved at the 5th session of the Ninth Board of Directors held on January 11, 2019, and the Company eventually granted 4.224 million restricted A-shares to 128 persons eligible for the incentive. For the detail, refer to the relevant announcement disclosed in the Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn on January 12, 2019. This part of A-share restricted shares was all granted and registered for listing by January 30, 2019. As three original incentive objects of the above incentive plan, namely Wu Yue (27,000 shares granted), Yang Shu zhi (20,000 shares granted), Lin Yichao (20,000 shares granted) have resigned, according to the 2018 A-Share Restricted Stock Incentive Plan (Phase I) (Draft Revision), they have no longer met the incentive conditions. The 15th session of the Ninth Board of Directors held on January 10, 2020 and the 16th Session of the Board of Directors held on March 18, 2020 reviewed and approved the "Proposal on the Repurchase and Cance llation of Partial Restricted Shares in the 2018 A-Share Restricted Stock Incentive Plan (Phase I), according to which the Company was going to repurchase and cancel 67,000 A-share restricted shares held by the aforesaid three incentive objects, already granted but not yet lifted. The said proposal is still necessary to be submitted to 2020 1st Extraordinary General Meeting for approval before implementation. Inquiry index of the provisional reports General on Significant Events Date of disclosure disclosed in the website. Announcement on the Resolution of the 15th Session of the Ninth Board of Directors, January 11, 2020 www.cninfo.com.cn 2020-003 Announcement on Repurchase and Cancellation of the Partially Restricted January 11, 2020 www.cninfo.com.cn Shares Involved in 2018 A Share Restricted Stock Incentive Plan (Phase I) 2020-005 9 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary Announcement on the Resolution of the 16th Session of the Ninth Board of Directors, March 20, 2020 www.cninfo.com.cn 2020-011 Announcement on Repurchase and Cancellation of the Partially Restricted March 20, 2020 www.cninfo.com.cn Shares Involved in 2018 A Share Restricted Stock Incentive Plan (Phase I) 2020-016 Notice on Holding 2020 1st Extraordinary March 27, 2020 www.cninfo.com.cn General Meeting 2020-018 Progress of implementation of the stock repurchase The 7th session of the Ninth Board of Directors held on April 4, 2019 and 2019 2nd Extraordinary General Meeting held on April 23, 2019, reviewed and approved the “Proposal for the Repurchase of Partial Domestically Listed Foreign Shares (B-shares) in the Company, and subsequently the Company disclosed the repurchase report and published a series of announcements on the progress in accordance with relevant regulations. For detail of the above, please refer to the relevant announcements disclosed by the Company in the Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn. As of the end of the reporting period, the Company repurchased 13,730,000 shares in the Company by way of centralized bidding, accounting for 3.10% of the Company's total capital stock; the highest transaction price of the repurchased shares was HK$6.56 per share, and the lowest transaction price was HK$5.55/share, the total amount paid has been HK$83,367,947.33 (excluding stam p duty, commission, and other transaction expenses.) The Company’s repurchase of the shares was in compliance with the relevant laws and regulations and in line with the Company's established repurchase program. Progress of implementation of reduction of the holding size of the shares repurchased by centralized bidding Inapplicable III. Commitments unfinished in implementation by the Company's actual controller, shareholders, related parties, acquirer and the Company, etc. in the reporting period Inapplicable IV. Portfolio investment Inapplicable V. Entrusted financial management Inapplicable 10 FIYTA Precision Technology Co., Ltd. 2020 First Quarter Report, Summary VI. Investment in derivatives Inapplicable VII. Registration Form of Activities of Reception for Investigation and Sur vey, Communications, Interviews, etc. in the Reporting Period Index of Basic Information on the Time of Reception Way of Reception Types of Visitors Received Investigation and Survey http://irm.cninfo.com.cn/ircs/company/compa January 08, 2020 Field survey Institution nyDetail?stockcode= 000026&orgId=gssz000 0026 VIII. Outward guarantee against regulations Inapplicable IX. Non-operational Occupancy of the Company’s Capital by the Controlling Shareholder and its Related Parties Inapplicable FIYTA Precision Technology Co., Ltd. Board of Directors April 10, 2020 11