FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text Stock Code: 000026; 200026 Abbreviation of the Stock: FIYTA; FIYTA B Announcement No.: 2022-020 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report The Company and all the members of the Board of Directors ensure that the information disclosed is authentic, accurate and complete, and there are no false records, misleading statements or significant omissions in the Report. Important Notice: 1. The Board of Directors, the Supervisory Committee, directors, supervisors and senior executives hereby individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of the Report and confirm that there are neither material omissions nor errors which would render any statement misleading. 2. The Company leader, the chief financial officer, and the manager of the accounting department (treasurer) hereby confirm the authenticity, accuracy and completeness of the financial report enclosed in this Quarter Report. 3. Has the First Quarter Report been audited No I. Financial Highlights (I) Summary of Accounting/Financial Data Does the Company need to make retroactive adjustment or restatement of the accounting data of the previous year No Year-on-year Same period of the previous Reporting period increase/decrease in the year reporting period Revenue in CNY 1,173,700,720.94 1,378,277,735.81 -14.84% Net profit attributable to the Company’s 86,354,073.76 118,222,042.23 -26.96% shareholders, in CNY Net profit attributable to the Company’s shareholders less the non-recurring items, in 84,104,404.06 113,576,505.85 -25.95% CNY Net cash flows arising from operating activities, 16,020,422.02 28,711,219.83 -44.20% in CNY Basic earning per share (CNY/share) 0.2083 0.2780 -25.07% Diluted earning per share (CNY/share) 0.2083 0.2780 -25.07% Return on equity, weighted average 2.84% 4.15% -1.31% 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) 4,073,600,004.56 4,110,579,952.49 -0.90% Owner’s equity attributable to the Company’s 3,071,285,561.15 3,013,232,642.53 1.93% shareholders, in CNY (II) Non-recurring gain/loss items and the amount involved In CNY Items Amount in the reporting period Notes Gain/loss from disposal of non-current assets, including the part -729,742.09 written-off with the provision for impairment of assets. 1 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text The government subsidies included in the profits and losses of the current period ( (excluding government grants which are closely related 4,320,020.38 to the Company’s normal business and conform with the national standard amount or quantity) Other non-operating income and expenses other than the aforesaid -696,466.55 items Less: Amount affected by the income tax 644,142.04 Total 2,249,669.70 -- Details of other gains and losses in compliance with the definition of non-recurring gains and losses. Inapplicable Explanation of the non-recurring gains and losses listed in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public as recurring gains and losses Inapplicable (III) Statement of Change in the Major Accounting Data and Financial Indicators and the Causes (I) Items of the Balance Sheet Amount at the end of Amount at the year Variation Items Cause of the movement the reporting period beginning proportion Advance Mainly due to increase of the advance payment for purchase of 16,424,587.28 7,946,750.81 106.68% payments brand watches and drive units. Other current 47,565,284.72 72,698,692.72 -34.57% Mainly due to decrease of input VAT to be deducted assets Mainly due to increase of the short-term bank borrowings in the Short term loans 351,228,111.21 265,994,595.43 32.04% reporting period. Mainly due to increase of notes paid for precision technology Notes payable 585,143.10 21,223.10 2657.10% business during the reporting period. Mainly due to decrease of inventory purchase in the reporting period Accounts payable 156,895,550.94 254,588,895.34 -38.37% over the year beginning. Payroll payable to Mainly due to the year-end bonus paid already during the reporting 91,015,889.47 145,936,150.06 -37.63% the employees period. Shares in stock 92,229,615.49 60,585,678.92 52.23% Mainly due to the implementation of the repurchase of B-shares. (II) Profit Statement Items End of the reporting Same period of the Variation Items Cause of the movement period previous year proportion Mainly due to increase of the loss from disposal of the assets Income from -729,742.09 55,838.26 -1406.89% brought about from the closing of partial shops during the reporting disposal of assets period. Non-operating Mainly due to increase of the loss of the deposit brought about from 769,784.25 16,194.20 4653.46% expenditures the closing of partial shops during the reporting period. II. Information of the Shareholders (I) Total number of the common shareholders and preferred shareholders whose voting rights are restored and shares held by the top 10 shareholders In shares Total preference shareholders Total common shareholders at the end with the voting power recovered 34,734 0 of the reporting period at the end of the reporting period (if any) Shareholding by top 10 shareholders Number of the Pledging, marking or freezing Names of the Nature of the Shareholding Number of shares restricted shares Status of the Shareholders shareholder proportion held Quantity held shares AVIC International State corporate 38.25% 162,977,327 0 Holding Limited Domestic natural Qiu Hong 0.54% 2,300,000 0 person 2 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text China Ifund Asset Management Co., Ltd. - Ifund All-Weather No. 2 Others 0.43% 1,841,716 0 Phase G Private Equity Securities Investment Fund Domestic natural Li Shuyuan 0.30% 1,296,400 0 person Construction Bank of China - Penghua Huizhi Optimized Others 0.30% 1,278,707 0 Hybrid Securities Investment Fund Domestic natural Zhang Yinnan 0.28% 1,195,128 0 person China Everbright Bank Co., Ltd - Yingda Ruisheng Flexible Others 0.27% 1,162,000 0 Configuration Hybrid Securities Investment Fund Domestic natural Chen Hao 0.25% 1,051,743 0 person Domestic natural # Shen Xuewen 0.22% 920,200 0 person Domestic natural # Huang Yun 0.20% 868,700 0 person Shares held by top 10 shareholders of unrestricted shares Share type Names of the Shareholders Quantity of unrestricted shares held by the shareholders Share type Quantity CNY ordinary AVIC International Holding Limited 162,977,327 162,977,327 shares CNY ordinary Qiu Hong 2,300,000 2,300,000 shares China Ifund Asset Management Co., Ltd. - Ifund All-Weather No. 2 Phase G CNY ordinary 1,841,716 1,841,716 Private Equity Securities Investment shares Fund CNY ordinary Li Shuyuan 1,296,400 1,296,400 shares Construction Bank of China - Penghua CNY ordinary Huizhi Optimized Hybrid Securities 1,278,707 1,278,707 shares Investment Fund Domestically listed Zhang Yinnan 1,195,128 1,195,128 foreign shares China Everbright Bank Co., Ltd - Yingda CNY ordinary Ruisheng Flexible Configuration Hybrid 1,162,000 1,162,000 shares Securities Investment Fund CNY ordinary Chen Hao 1,051,743 1,051,743 shares CNY ordinary # Shen Xuewen 920,200 920,200 shares CNY ordinary # Huang Yun 868,700 868,700 shares Explanation on associated relationship or consistent action of the above Inapplicable shareholders 1. China Ifund Asset Management Co., Ltd. - Ifund All-Weather No. 2 Phase G Private Equity Securities Investment Fund, one of the Company’s shareholders, holds 1,841,716 shares in the Note to the top 10 shareholders involved Company by means of credit transaction guaranty securities account ; in margin financing & securities lending (if any) 2. Shen Xuewen, one of the Company’s shareholders, holds 920,200 shares in the Company by means of a credit transaction guaranty securities account; 3. Huang Yuntong, one of the Company’s shareholders, holds 868,700 shares in the Company by means of a credit transaction guaranty securities account. 3 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text Note: Ended the reporting period, the Company repurchased 6,147,304 B-shares in the Company held in the special securities account, that had not been stated as one of the top 10 shareholders. (II) Total Preference Shareholders and the Shareholding by the Top 10 Preference Shareholders Inapplicable III. Note to other significant events (I) Matters in Connection with 2018 Restricted A-Share Incentive Scheme (Phase I) The 4th session of the Tenth Board of Directors held on December 28, 2021 reviewed and approved the Proposal on the Release Conditions having been Satisfied for the Second Release Period of 2018 Restricted A-Share Incentive Scheme (Phase I). The 1,244,421 restricted shares (accounting for 0.29% of the Company's total share capital) that could be lifted this time were listed for trading on February 07, 2022. For the details please refer to the "Indicative Announcement on the First Release of the Restricted Sales Period and the Listing of the Restricted Shares for Trading Involved in the 2018 A-Share Restricted Stock Incentive Scheme (Phase I) 2022-002” disclosed in http://www.cninfo.com.cn. According to the “Proposal for Repurchase and Cancellation of the Partial Restricted Shares Involved in 2018 Restricted A-Share Incentive Scheme (Phase I)” approved at the 10th Sessions of the Tenth Board of Directors held on March 08, 2022, the Company decided to repurchase and cancel a total of 60,120 restricted A-shares that were granted with the restriction but not released to the three retired incentive objects in the 2018 Restricted A-Share Incentive Scheme (Phase I). For the details please refer to the "Announcement on Repurchase and Cancellation of Partial Restricted Shares Involved in the 2018 A-Share Restricted Stock Incentive Scheme (Phase I) 2022-013” disclosed in the Securities Times, Hong Kong Commercial Daily and http://www.cninfo.com.cn. The said repurchase proposal is still necessary to be submitted to the General Meeting for approval. (II) Matters in Connection with 2018 Restricted A-Share Incentive Scheme (Phase II) According to the “Proposal for Repurchase and Cancellation of the Partial Restricted Shares Involved in 2018 Restricted A-Share Incentive Scheme (Phase II)” approved at the 10th Sessions of the Tenth Board of Directors held on March 8, 2022, the Company decided to repurchase and cancel a total of 250,000 restricted A-shares that were granted with the restriction but not released to the three retired incentive objects in the 2018 Restricted A-Share Incentive Scheme (Phase II). For the details please refer to the "Announcement on Repurchase and Cancellation of Partial Restricted Shares Involved in the 2018 A-Share Restricted Stock Incentive Scheme (Phase II) 2022-014” disclosed in http://www.cninfo.com.cn. The said repurchase proposal is still necessary to be submitted to the General Meeting for approval. (III) Personnel Change of the Company's Senior Executives The 5th Sessions of the Tenth Board of Directors held on February 08, 2022 reviewed and approved the Proposal on the Designation Appointment of the Chief Accountant and the Proposal on the Designation of the Chief Accountant to Perform the Duties of the Board Secretary, and decided to appoint Mr. Song Yaoming as the Chief Accountant of the Company and the Company designated Mr. Song Yaoming to perform the duties of the Board Secretary before the new Board Secretary is duely appointed. For the details please refer to the “Announcement on the Change of the Company’s Chief Accountant and Designating the Board Secretary to Perform the Duties of the Board Secretary 2022-004. (IV) Repurchase of Partial Domestically Listed Foreign Investment Shares (B-Shares) The 2nd session of the Tenth Board of Directors held on October 25, 2021 and 2021 5th Extraordinary General Meeting held on November 30, 2021, reviewed and approved the “Proposal for the Repurchase of Partial Domestically Listed 4 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text Foreign Shares in the Company (B-shares)”. Ended the reporting period, the Company accumulatively repurchased 6,147,304 shares in the Company through a centralized bidding method with the special account for the securities repurchased, accounting for 1.44% of the Company’s total share capital. the total amount already paid was HK$ 47,412,881.31 (with the stamp duty, commission and other transaction costs exclusive). For the detail, refer to the serial announcements of progress disclosed in http://www.cninfo.com.cn. IV. Quarterly Financial Statements (I) Financial Statements 1. Consolidated Balance Sheet Prepared by FIYTA Precision Technology Co., Ltd. March 31, 2022 In CNY Items Ending balance Opening balance Current assets: Monetary capital 218,304,647.14 210,254,737.14 Settlement reserve Inter-bank lending Transactional financial assets Derivative financial assets Notes receivable 59,755,241.62 61,258,145.80 Accounts receivable 368,376,666.35 388,885,601.28 Financing with accounts receivable Advance payments 16,424,587.28 7,946,750.81 Receivable premium Reinsurance accounts receivable Reserve for reinsurance contract receivable Other receivables 61,456,146.17 61,553,267.82 Including: Interest receivable Dividends receivable Redemptory monetary capital for sale Inventories 2,063,658,306.12 2,050,148,750.89 Contract assets Held-for-sale assets Non-current assets due within a year Other current assets 47,565,284.72 72,698,692.72 Total current assets 2,835,540,879.40 2,852,745,946.46 Non-current assets: Loan issuing and advance in cash Equity investment Other equity investment Long term accounts receivable Long-term equity investments 55,155,605.31 55,155,605.31 Investment in other equity instruments 85,000.00 85,000.00 Other non-current financial assets Investment-oriented real estate 379,566,781.99 383,425,916.35 Fixed assets 344,285,099.32 349,495,316.65 Construction-in-progress Productive biological asset 5 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text Oil and Gas Assets Use right assets 139,320,869.07 147,932,475.42 Intangible assets 33,025,945.42 34,035,330.43 Development expenses Goodwill Long term expenses to be apportioned 160,198,264.89 163,790,333.44 Deferred income tax asset 81,925,389.33 81,233,274.65 Other non-current assets 44,496,169.83 42,680,753.78 Total non-current assets 1,238,059,125.16 1,257,834,006.03 Total assets 4,073,600,004.56 4,110,579,952.49 Current liabilities: Short term loans 351,228,111.21 265,994,595.43 Borrowings from central bank Loans from other banks Transactional financial liabilities Derivative financial liabilities Notes payable 585,143.10 21,223.10 Accounts payable 156,895,550.94 254,588,895.34 Advance receipt 8,309,629.50 11,025,664.72 Contract liabilities 20,669,861.56 22,505,426.65 Money from sale of the repurchased financial assets Deposits taking and interbank placement Acting trading securities Income from securities underwriting on commission Payroll payable to the employees 91,015,889.47 145,936,150.06 Taxes payable 50,953,819.51 67,769,880.01 Other payables 168,956,402.57 167,808,759.95 Including: interest payable Dividends payable 4,007,982.64 5,015,026.30 Service charge and commission payable Payable reinsurance Held-for-sale liabilities Non-current liabilities due within a year 80,568,807.41 86,949,906.35 Other current liabilities 2,624,889.05 2,798,738.32 Total current liabilities 931,808,104.32 1,025,399,239.93 Non-current liabilities: Reserve for insurance contract Long-term borrowings Bonds payable Including: preferred shares Perpetual bond Lease liabilities 63,696,369.47 64,918,722.10 Long-term accounts payable Long term payroll payable to the employees Estimated liabilities Deferred income 1,792,833.90 1,792,833.90 Deferred income tax liability 5,017,135.72 5,236,514.03 Other non-current liabilities Total non-current liabilities 70,506,339.09 71,948,070.03 6 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text Total liabilities 1,002,314,443.41 1,097,347,309.96 Owner’s equity: Capital stock 426,051,015.00 426,051,015.00 Other equity instruments Including: preferred shares Perpetual bond Capital reserve 1,044,036,681.84 1,040,908,194.13 Less: shares in stock 92,229,615.49 60,585,678.92 Other comprehensive income -7,706,898.98 -7,658,346.40 Special reserve 1,325,577.43 1,062,731.13 Surplus reserve 275,010,401.50 275,010,401.50 Reserve against general risks Retained earnings 1,424,798,399.85 1,338,444,326.09 Total owners’ equity attributable to the 3,071,285,561.15 3,013,232,642.53 parent company Minority shareholders’ equity Total owner’s equity 3,071,285,561.15 3,013,232,642.53 Total liabilities and owners’ equity 4,073,600,004.56 4,110,579,952.49 Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming Person in charge of the Accounting Department: Tian Hui 2. Consolidated Profit Statement In CNY Items Amount incurred in the reporting period Amount incurred in the previous period I. Turnover 1,173,700,720.94 1,378,277,735.81 Including: operating income 1,173,700,720.94 1,378,277,735.81 Interest income Earned insurance premium Service charge and commission income II. Total operating costs 1,065,454,948.14 1,232,594,973.38 Including: Operating costs 725,288,861.90 863,898,587.47 Interest payment Service charge and commission payment Surrender Value Compensation expenses, net Provision of reserve for insurance liabilities, net Payment of policy dividend Reinsurance expenses Taxes and surcharges 6,623,183.80 7,586,076.81 Sales costs 257,444,571.92 280,821,158.83 Administrative expenses 55,399,290.60 56,888,205.32 R & D expenditures 12,984,545.64 13,209,007.18 Financial expenses 7,714,494.28 10,191,937.77 Where: Interest cost 5,184,394.84 7,371,044.43 Interest income 750,842.75 1,055,297.15 Plus: Other income 4,320,020.38 6,070,986.55 Investment income (loss is stated with “-”) Including: return on investment in associate and joint venture Gain from the derecognition of 7 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text the financial assets measured at amortised cost Exchange income (loss stated with “-“) Net exposure hedge income (loss stated with “-“) Income from change of fair value (loss is stated with “-”) Loss from impairment of credit (loss 29,964.40 101,926.46 is stated with “-”) Loss from impairment of assets (loss is stated with “-”) Income from disposal of assets (loss -729,742.09 55,838.26 is stated with “-“) III. Operating Profit (loss is stated with “-“) 111,866,015.49 151,911,513.70 Plus: Non-operating income 73,317.70 53,671.38 Less: Non-operating expenditures 769,784.25 16,194.20 IV. Total profit (total loss is stated with “-”) 111,169,548.94 151,948,990.88 Less: Income tax expense 24,815,475.18 33,706,891.38 V. Net Profit (net loss is stated with “-“) 86,354,073.76 118,242,099.50 (I) Classification based on operation sustainability 1. Net Profit from sustainable operation 86,354,073.76 118,242,099.50 (net loss is stated with “-”) 2. Net Profit from termination of operation (net loss is stated with “-”) (II) Classification by ownership 1. Net profit attributable to the parent 86,354,073.76 118,222,042.23 company’s owner 2. Minority shareholders’ gain/loss 20,057.27 VI. Net of other comprehensive income after -48,552.58 -7,350,304.91 tax Net of other comprehensive income after tax attributable to the parent company’s -48,552.58 -7,350,270.06 owner (I) Other comprehensive income which cannot be re-classified into gain and loss 1. Movement of the net liabilities and net assets re-measured for setting the beneficial plan 2. Other comprehensive income which can be converted into gain and loss based on the equity method 3. Movement of the fair value of the investment in other equity instruments 4. Movement of the fair value of the Company’s own credit risk 5. Others (II) Other comprehensive income which -48,552.58 -7,350,270.06 shall be re-classified into gain and loss 1. Other comprehensive income which can be converted into gain and loss based on the equity method 2. Movement of the fair value of the investment in other debt instruments 3. Amount of the reclassified financial assets counted to the other comprehensive income 4. Provision for impairment of the credit of the other debt investment 5. Reserve for cash flow hedge 6. Conversion difference in foreign -48,552.58 -7,350,270.06 currency statements 8 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text 7. Others Net amount of other comprehensive income after tax attributable to minority -34.85 shareholders VII. Total comprehensive income 86,305,521.18 110,891,794.59 Total comprehensive income attributable 86,305,521.18 110,871,772.17 to the parent company’s owner Total comprehensive income attributable 20,022.42 to minority shareholders VIII. Earnings per share: (I) Basic earnings per share 0.2083 0.2780 (II) Diluted earnings per share 0.2083 0.2780 Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming Person in charge of the Accounting Department: Tian Hui 3. Consolidated Cash Flow Statement In CNY Items Amount incurred in the reporting period Amount incurred in the previous period I. Cash flows arising from operating activities: Cash received from sales of goods and 1,341,476,147.74 1,523,350,402.04 supply of services Net increase of customers’ deposit and due from banks Net increase of borrowings from the central bank Net increase of borrowings from other financial institutions Cash received from the premium of the original insurance contract Net cash received from the reinsurance business Net increase of the reserve from policy holders and investment Cash received from interest, service charge and commission Net increase of loan from other banks Net increase of fund from repurchase business Net cash received from securities trading on commission Rebated taxes received 448,081.85 136,077.50 Other operation activity related cash 13,508,738.54 17,653,164.00 receipts Subtotal of cash flow in from operating 1,355,432,968.13 1,541,139,643.54 activity Cash paid for purchase of goods and 950,732,002.36 1,090,077,507.00 reception of labor services Net increase of loans and advances to customers Net increase of due from central bank and due from other banks Cash from payment for settlement of the original insurance contract Net increase of the lending capital Cash paid for interest, service charge and commission Cash for payment of policy dividend Cash paid to and for staff 234,412,020.13 237,448,359.49 9 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text Taxes paid 69,645,546.92 75,193,535.72 Other business activity related cash 84,622,976.70 109,709,021.50 payments Subtotal of cash flow out from operating 1,339,412,546.11 1,512,428,423.71 activity Net cash flows arising from operating 16,020,422.02 28,711,219.83 activities II. Cash flow arising from investment activities: Cash received from recovery of investment Cash received from investment income Net cash from disposal of fixed assets,intangible assets and recovery of 3,705.21 9,762.94 other long term assets Net cash received from disposal of subsidiaries and other operating units Other investment related cash receipts Subtotal of cash flow in from investment 3,705.21 9,762.94 activity Cash paid for purchase/construction of fixed assets, Intangible assets and other 29,038,120.17 45,203,402.55 long term assets Cash paid for investment Net increase of the pledged loan Net cash paid for acquisition of subsidiaries and other operation units Other investment related cash payments Subtotal of cash flow out from investment 29,038,120.17 45,203,402.55 activity Net cash flow arising from investment -29,034,414.96 -45,193,639.61 activities: III. Cash flow arising from fund-raising activities: Cash received from absorbing 58,216,000.00 investment Incl.: Cash received from the subsidiaries’ absorption of minority shareholders’ investment Cash received from loans 593,052,257.18 404,237,473.75 Other fund-raising activity related cash receipts Subtotal of cash flow in from fund raising 593,052,257.18 462,453,473.75 activity Cash paid for debt repayment 500,000,000.00 251,180,000.00 Cash paid for dividend/profit 4,471,210.32 5,950,681.24 distribution or repayment of interest Including: Dividend and profit paid by the subsidiaries to minority shareholders Other fund-raising activity related cash 67,053,433.45 25,620,115.35 receipts Sub-total cash flow paid for financing 571,524,643.77 282,750,796.59 activities Net cash flow arising from fund-raising 21,527,613.41 179,702,677.16 activities IV. Change of exchange rate influencing the -463,710.47 -407,377.48 cash and cash equivalent V. Net increase of cash and cash 8,049,910.00 162,812,879.90 equivalents Plus: Opening balance of cash and 210,254,737.14 353,057,285.71 cash equivalents VI. Ending balance of cash and cash 218,304,647.14 515,870,165.61 10 FIYTA Precision Technology Co., Ltd. 2022 First Quarter Report, Full Text equivalents Legal representative: Zhang Xuhua Chief Financial Officer: Song Yaoming Person in charge of the Accounting Department: Tian Hui (II) Auditor’s Report Has the First Quarter Report been audited No FIYTA Precision Technology Co., Ltd. Board of Directors April 23, 2022 11