Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 HAINAN JINGLIANG HOLDINGS CO., LTD. FIRST QUARTER REPORT 2019 April 2019 1 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Part I Important Notes The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of Hainan Jingliang Holdings Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein. All the Company’s directors have attended the Board meeting for the review of this Report and its summary. Li Shaoling, the Company’s legal representative, Guan Ying, the Company’s head for financial affairs, and Liu Quanli, head of the Company’s financial department (equivalent to financial manager) hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete. This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail. 2 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Part II Key Corporate Information I Key Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No Q1 2019 Q1 2018 Change (%) Operating revenue (RMB) 1,707,549,259.31 1,866,527,190.78 -8.52% Net profit attributable to the listed 26,311,530.50 31,041,912.71 -15.24% company’s shareholders (RMB) Net profit attributable to the listed company’s shareholders before exceptional 17,033,200.00 29,930,951.86 -43.09% items (RMB) Net cash generated from/used in operating 172,926,738.46 671,468,699.31 -74.25% activities (RMB) Basic earnings per share (RMB/share) 0.04 0.05 -20.00% Diluted earnings per share (RMB/share) 0.04 0.05 -20.00% Weighted average return on equity (%) 1.15% 1.47% -0.32% 31 March 2019 31 December 2018 Change (%) Total assets (RMB) 4,957,598,566.20 4,917,148,996.28 0.82% Equity attributable to the listed company’s 2,298,664,279.60 2,272,469,925.43 1.15% shareholders (RMB) Exceptional gains and losses: √ Applicable □ Not applicable Unit: RMB Item Q1 2019 Note Gain or loss on disposal of non-current assets (inclusive of 12,024,268.43 impairment allowance write-offs) Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course 529,365.60 of business at fixed quotas or amounts as per government’s uniform standards) Non-operating income and expense other than the above -31,600.05 Less: Income tax effects 3,130,733.50 Non-controlling interests effects (net of tax) 112,969.98 3 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Total 9,278,330.50 -- Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items: □ Applicable √ Not applicable No such cases for the Reporting Period. II Total Number of Shareholders and Holdings of Top 10 Shareholders at 31 March 2019 1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders Unit: share Number of preferred shareholders Number of ordinary shareholders at 36,473 with resumed voting rights at the 0 the period-end period-end (if any) Top 10 shareholders Shares in pledge or Nature of Shareholding Restricted shares Name of shareholder Total shares held frozen shareholder percentage held Status Shares BEIJING GRAIN GROUP CO., State-owned legal 42.06% 288,439,561 164,877,598 LTD. person BEIJING STATE-OWNED State-owned legal CAPITAL OPERATION AND 7.07% 48,510,460 48,510,460 person MANAGEMENT CENTER CHINA DEVELOPMENT BANK State-owned legal 3.33% 22,828,451 CAPITAL CO., LTD. person GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND MANAGEMENT CO., Other 3.20% 21,972,451 LTD.—GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND (L.P.) Foreign natural LI SHERYN ZHAN MING 2.71% 18,578,700 person Domestic natural MEI JIANYING 0.38% 2,604,203 person 4 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Domestic natural HU TIANGAO 0.35% 2,376,052 person Foreign legal SOCIETE GENERALE 0.32% 2,183,500 person Domestic DONGYANG HENGDIAN non-state-owned 0.31% 2,105,469 GUARANTY CO., LTD. legal person Domestic natural ZHANG XIAOXIA 0.28% 1,949,250 person Top 10 unrestricted shareholders Shares by type Name of shareholder Unrestricted shares held Type Shares BEIJING GRAIN GROUP CO., RMB-denominated 123,561,963 123,561,963 LTD. ordinary stock CHINA DEVELOPMENT BANK RMB-denominated 22,828,451 22,828,451 CAPITAL CO., LTD. ordinary stock GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND RMB-denominated MANAGEMENT CO., 21,972,451 21,972,451 ordinary stock LTD.—GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND (L.P.) Domestically listed LI SHERYN ZHAN MING 18,578,700 18,578,700 foreign stock RMB-denominated MEI JIANYING 2,604,203 2,604,203 ordinary stock RMB-denominated HU TIANGAO 2,376,052 2,376,052 ordinary stock RMB-denominated SOCIETE GENERALE 2,183,500 2,183,500 ordinary stock DONGYANG HENGDIAN RMB-denominated 2,105,469 2,105,469 GUARANTY CO., LTD. ordinary stock Domestically listed ZHANG XIAOXIA 1,949,250 1,949,250 foreign stock RMB-denominated WANG XIAOXING 1,775,000 1,775,000 ordinary stock Beijing State-Owned Capital Operation And Management Center owns 100% of Beijing Related or acting-in-concert parties Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is a shareholder of the Company (a among the shareholders above 42.06% holding). Apart from that, the Company does not know whether there are any other related parties or acting-in-concert parties among the top 10 shareholders. 5 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 1. Shareholder Hu Tiangao holds 338,000 shares in the Company through his account of Top 10 ordinary shareholders collateral securities for margin trading in Zheshang Securities Co., Ltd., and 2,038,052 shares involved in securities margin trading in the Company through his ordinary securities account. (if any) 2. Shareholder Wang Xiaoxing holds 1,775,000 shares in the Company through his account of collateral securities for margin trading in Soochow Securities Co., Ltd. Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yea √ No No such cases in the Reporting Period. 2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them □ Applicable √ Not applicable 6 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Part III Significant Events I Changes in Key Financial Statement Line Items and Explanation of why √ Applicable □ Not applicable 1. Monetary capital as at 31 March 2019 declined compared to 31 December 2018, primarily driven by the repayment of bank loans and the purchase of growth receipts with raised funds for cash management purposes during Q1 2019. 2. The change in available-for-sale financial assets was primarily driven by the reclassification of certain “available-for-sale financial assets” as “financial assets at fair value through profit or loss” into “investments in other equity instruments” according to the new accounting standards governing financial instruments. 3. Other current assets as at 31 March 2019 rose compared to 31 December 2018, primarily driven by the growth receipts purchased during Q1 2019 with raised funds for cash management purposes being undue at 31 March 2019. 4. Notes and accounts payable as at 31 March 2019 rose compared to 31 December 2018, primarily driven by the purchases of raw materials during Q1 2019. 5. Payroll payable as at 31 March 2019 declined compared to 31 December 2018, primarily driven by the payment of the 2018 annual performance remuneration during Q1 2019. 6. Finance costs went down in Q1 2019 compared to Q1 2018, primarily driven by a smaller interest expense due to decreased bank loans during Q1 2019. 7. Net cash generated from operating activities went down in Q1 2019 compared to Q1 2018, primarily driven by more purchases of raw materials during Q1 2019. II Progress, Influence and Solutions with regard to Significant Events √ Applicable □ Not applicable Summary of the significant event Disclosure date Index to the related announcement 1. On 20 February 2019, Proposal on Election of the Chairman of the www.cninfo.com.cn: Announcement 8th Board of Directors of the Company was reviewed and approved at on the Resignation of Chairman and the 31th Meeting of the 8th Board of Directors by the Company. The 21 February 2019 the Election for New Chairman Board of Directors of the Company agreed that Mr. Li Shaoling held (Announcement No. 2019-002) the post of the Chairman of the 8th Board of Directors. According to the 7 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 relevant regulations of Articles of Association, the Chairman is the legal representative of the Company. At present, the Company has completed the procedures for industrial and commercial registration of changes in its legal representative, and obtained the business license or enterprise legal person approved and renewed by Hainan Administrative Bureau or Industry and Commerce. Progress of any share repurchases: □ Applicable √ Not applicable Progress of any reduction of the repurchased shares through centralized bidding: □ Applicable √ Not applicable III Commitments that the Company’s Actual Controller, Shareholders, Related Parties, Acquirers, the Company Itself or Other Parties, Failed to Fulfill on Time during the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. IV Operating Performance Forecast for H1 2019 Warning of a forecast loss on or a forecast significant year-on-year change in the net profit of H1 2019, as well as explanation of why: □ Applicable √ Not applicable V Securities Investments √ Applicable □ Not applicable Gain/lo ss of Accumula change tive Endin Variet Symb Name Accounti Beginni Purchased in Gain/los Initial s in fair changes in Sold in the g y of ol of of ng ng the s in Account Capital investm value fair value Reporting Reporti carryi securi securi securi measurem carryin Reporting ng ing title source ent cost in the recorded Period ng ty ty ty ent model g value Period Period Reporti into value ng equities Period 2040 GC00 Cost 3,142,600,00 3,142,600,00 322,286 Other Self-rai Other 0.00 01 1 method 0.00 0.00 .47 assets sed 8 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 2040 GC00 Cost 70,200,000.0 70,200,000.0 96,465. Other Self-rai Other 0.00 07 7 method 0 0 51 assets sed 3,212,800,00 3,212,800,00 418,751 Total 0.00 -- 0.00 0.00 0.00 0.00 -- -- 0.00 0.00 .98 Disclosure date of announcement on Board’s consent for 21 February 2019 securities investment Disclosure date of announcement on shareholders’ N/A meeting’s consent for securities investment (if any) VI Investments in Derivative Financial Instruments √ Applicable □ Not applicable Unit: RMB’0,000 Ending investment Actual gain/loss Ending as % of the Type of derivative Start date End date in Reporting investment Company’s ending net Period assets Soybean hedging 1 January 2019 31 March 2019 3,172.23 1.38% -81.59 Agricultural product future 1 January 2019 31 March 2019 1,616 0.70% -271 contract Agricultural product future 1 January 2019 31 March 2019 1,195 0.52% -33 contract Agricultural product future 1 January 2019 31 March 2019 2 0.00% 208 contract Agricultural product future 1 January 2019 31 March 2019 51 0.02% 0 contract Total -- -- 6,036.23 2.62% -177.59 Funding source Self-funded Legal matters involved (if N/A applicable) Disclosure date of board announcement approving 21 February 2019 derivative investment (if 9 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 any) Disclosure date of general meeting announcement 9 March 2019 approving derivative investment (if any) The Company’s conduction of hedging business is not aimed at speculation, but mainly to effectively avoid the impact of raw material price fluctuation on the Company. However, there will be certain risks: 1. Price fluctuation risk: price fluctuation risk may be generated when the futures market changes greatly, resulting in transaction losses; 2. Capital risk: capital risk may be correspondingly brought because the futures trading adopts margin and marking-to-market system; 3. Internal control risk: there may be risks due to imperfect internal control system for the high expertise and complexity of futures trading; 4. Technical risk: there may be technical risks due to incomplete computer systems. Analysis of risks and control The Company adopts following risk control measures: 1. Matching the hedging business with the measures associated with Company’s production and operation so as to maximally reduce the price fluctuation risk; 2. The derivative investments held Company will reasonably dispatch its own funds for hedging business, strictly control the hedging in Reporting Period fund scale and reasonably plan and use margins; 3. Management System for Commodity Futures (including but not limited to Trading is formulated based on actual situation of the Company and pursuant to governing market risk, liquidity risk, stipulations of Guidelines for Standard Operation of Main board Companies Listed in Shenzhen Stock credit risk, operational risk, Exchange which have made clearly stipulations about the amount, variety scope, approval authority, legal risk, etc.) internal approval procedures, responsible departments and persons, information isolation measures, internal risk report and related solution process, information disclosure, etc. regarding hedging business. The Company will strictly control all sectors in accordance with Management System for Commodity Futures Trading; 4. Establishing qualified systems for transaction, communication and information services so as to guarantee the normal operation of the transaction system and smooth proceeding of transactions. When a wrong order occurs, corresponding measures should be timely taken to reduce losses. Changes in market prices or fair value of derivative investments in Reporting The value of the Company’s future contracts changed according to the contract prices declared by the Period (fair value analysis future exchange, which were broadly representative. And the fair value of the Company’s future should include measurement contracts was executed in strict compliance with the future exchange’s settlement methods. method and related assumptions and parameters) Major changes in accounting policies and specific accounting principles adopted for N/A derivative investments in Reporting Period compared to last reporting period Opinion of independent After check, The Company carried out the business of futures hedging based on normal production directors on derivative and management, relying on specific business. Under the premise of ensuring normal production and 10 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 investments and risk control management, the Company used futures hedging tools to avoid the adverse impacts on the Company’s operation from the large price fluctuation of raw materials and products, which is not detrimental to the interests of the Company and all other shareholders, especially minority shareholders. At the same time, the Company formulated relevant systems, and specific operating instructions for the business of futures hedging through strengthening internal control and implementing risk prevention measures. It is agreed that the Company and its subsidiaries will continue to conduct futures hedging business according to the relevant regulations. VII Communications with the Investment Community such as Researches, Inquiries and Interviews during the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. VIII Irregularities in the Provision of Guarantees □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. 11 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Part IV Financial Statements I Financial Statements 1. Consolidated Balance Sheet Prepared by Hainan Jingliang Holdings Co., Ltd. 31 March 2019 Unit: RMB Item 31 March 2019 31 December 2018 Current assets: Monetary capital 488,126,501.99 924,870,016.78 Settlement reserve Interbank loans granted Trading financial assets Financial assets at fair value through profit or loss Derivative financial assets 61,508,961.00 71,260,414.60 Notes and accounts receivable 96,916,812.55 97,775,710.11 Including: Notes receivable 410,429.54 Accounts receivable 96,506,383.01 97,775,710.11 Prepayments 113,376,773.82 120,181,442.89 Premiums receivable Reinsurance receivables Receivable reinsurance contract reserve Other receivables 15,756,505.97 18,256,513.93 Including: Interest receivable 2,133,849.72 2,400,877.51 Dividends receivable Financial assets purchased under resale agreements Inventories 1,240,776,747.17 1,224,186,963.07 Contractual assets Assets classified as held for sale Current portion of non-current assets Other current assets 778,685,680.59 288,821,816.63 12 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Total current assets 2,795,147,983.09 2,745,352,878.01 Non-current assets: Loans and advances to customers Investments in debt obligations Available-for-sale financial assets 20,000,000.00 Investments in other debt obligations Held-to-maturity investments Long-term receivables Long-term equity investments 187,125,274.16 182,827,226.11 Investments in other equity instruments 20,000,000.00 Other non-current financial assets Investment property 32,991,663.95 33,395,101.68 Fixed assets 1,275,635,891.13 1,271,803,080.56 Construction in progress 27,961,203.26 37,369,757.78 Productive living assets Oil and gas assets Right-of-use assets Intangible assets 378,055,999.37 383,382,527.68 R&D expense Goodwill 191,394,422.51 191,394,422.51 Long-term prepaid expense 33,737,059.71 34,671,018.22 Deferred income tax assets 13,927,065.43 15,330,980.14 Other non-current assets 1,622,003.59 1,622,003.59 Total non-current assets 2,162,450,583.11 2,171,796,118.27 Total assets 4,957,598,566.20 4,917,148,996.28 Current liabilities: Short-term borrowings 1,329,168,292.50 1,437,715,080.91 Borrowings from central bank Interbank loans obtained Trading financial liabilities Financial liabilities at fair value through profit or loss Derivative financial liabilities Notes and accounts payable 228,615,002.80 140,564,713.11 Advances from customers 185,808,365.02 145,317,064.18 13 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Financial assets sold under repurchase agreements Customer deposits and interbank deposits Payables for acting trading of securities Payables for underwriting of securities Payroll payable 15,500,452.97 31,494,568.05 Taxes payable 27,407,214.57 35,783,819.84 Other payables 130,572,740.19 111,288,708.99 Including: Interest payable 14,833,643.11 26,972,826.90 Dividends payable 11,197,317.01 11,197,317.01 Handling charges and commissions payable Reinsurance payables Contractual liabilities Liabilities directly associated with assets classified as held for sale Current portion of non-current liabilities Other current liabilities 11,100,915.25 Total current liabilities 1,917,072,068.05 1,913,264,870.33 Non-current liabilities: Insurance contract reserve Long-term borrowings Bonds payable Including: Preferred shares Perpetual bonds Lease liabilities Long-term payables Long-term payroll payable 40,245,406.52 40,245,406.52 Provisions Deferred income 74,530,445.42 74,953,385.51 Deferred income tax liabilities 57,660,581.98 49,618,839.47 Other non-current liabilities Total non-current liabilities 172,436,433.92 164,817,631.50 Total liabilities 2,089,508,501.97 2,078,082,501.83 Owners’ equity: 14 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Share capital 685,790,364.00 685,790,364.00 Other equity instruments Including: Preferred shares Perpetual bonds Capital reserves 1,595,711,805.31 1,595,711,805.31 Less: Treasury stock Other comprehensive income -116,738.00 438.33 Special reserves Surplus reserves 122,122,436.98 122,122,436.98 General reserve Retained earnings -104,843,588.69 -131,155,119.19 Total equity attributable to owners of the 2,298,664,279.60 2,272,469,925.43 Company as the parent Non-controlling interests 569,425,784.63 566,596,569.02 Total owners’ equity 2,868,090,064.23 2,839,066,494.45 Total liabilities and owners’ equity 4,957,598,566.20 4,917,148,996.28 Legal representative: Li Shaoling Head for financial affairs: Guan Ying Head of the financial department: Liu Quanli 2. Balance Sheet of the Company as the Parent Unit: RMB Item 31 March 2019 31 December 2018 Current assets: Monetary capital 1,028,420.43 13,597,659.66 Trading financial assets Financial assets at fair value through profit or loss Derivative financial assets Notes and accounts receivable 74,460.00 79,986.00 Including: Notes receivable Accounts receivable 74,460.00 79,986.00 Prepayments 20,000.00 20,000.00 Other receivables 12,420,402.45 227,353.10 Including: Interest receivable Dividends receivable Inventories 4,824,035.45 4,824,035.45 15 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Contractual assets Assets classified as held for sale Current portion of non-current assets Other current assets 2,117,690.86 1,962,371.32 Total current assets 20,485,009.19 20,711,405.53 Non-current assets: Investments in debt obligations Available-for-sale financial assets 20,000,000.00 Investments in other debt obligations Held-to-maturity investments Long-term receivables Long-term equity investments 2,377,420,527.10 2,375,639,964.05 Investments in other equity instruments 20,000,000.00 Other non-current financial assets Investment property 5,703,185.18 5,778,794.33 Fixed assets 3,222,868.08 3,260,620.04 Construction in progress Productive living assets Oil and gas assets Right-of-use assets Intangible assets 145,408.80 171,069.18 R&D expense Goodwill Long-term prepaid expense 157,232.68 180,817.60 Deferred income tax assets Other non-current assets Total non-current assets 2,406,649,221.84 2,405,031,265.20 Total assets 2,427,134,231.03 2,425,742,670.73 Current liabilities: Short-term borrowings Trading financial liabilities Financial liabilities at fair value through profit or loss Derivative financial liabilities Notes and accounts payable 16 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Advances from customers 38,896.41 38,896.41 Contractual liabilities Payroll payable 300,469.34 438,195.96 Taxes payable 968,602.50 976,458.68 Other payables 463,519,055.23 449,947,050.56 Including: Interest payable 21,082,795.47 21,082,795.47 Dividends payable 3,213,302.88 3,213,302.88 Liabilities directly associated with assets classified as held for sale Current portion of non-current liabilities Other current liabilities Total current liabilities 464,827,023.48 451,400,601.61 Non-current liabilities: Long-term borrowings Bonds payable Including: Preferred shares Perpetual bonds Lease liabilities Long-term payables Long-term payroll payable Provisions Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities 464,827,023.48 451,400,601.61 Owners’ equity: Share capital 685,790,364.00 685,790,364.00 Other equity instruments Including: Preferred shares Perpetual bonds Capital reserves 2,173,387,468.71 2,173,387,468.71 Less: Treasury stock Other comprehensive income Special reserves 17 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Surplus reserves 109,487,064.39 109,487,064.39 Retained earnings -1,006,357,689.55 -994,322,827.98 Total owners’ equity 1,962,307,207.55 1,974,342,069.12 Total liabilities and owners’ equity 2,427,134,231.03 2,425,742,670.73 3. Consolidated Income Statement Unit: RMB Item Q1 2019 Q1 2018 1. Revenue 1,707,549,259.31 1,866,527,190.78 Including: Operating revenue 1,707,549,259.31 1,866,527,190.78 Interest income Premium income Handling charge and commission income 2. Costs and expenses 1,701,869,672.84 1,841,620,802.54 Including: Cost of sales 1,587,493,295.12 1,729,424,214.02 Interest expense Handling charge and commission expense Surrenders Net claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surcharges 4,739,849.10 6,306,256.24 Selling expense 53,329,529.57 47,255,530.90 Administrative expense 48,807,017.63 47,273,728.57 R&D expense 248,751.52 417,383.55 Finance costs 7,246,885.74 11,042,135.57 Including: Interest expense 16,484,863.99 23,168,464.32 Interest income 8,697,066.79 6,130,369.62 Asset impairment loss 4,344.16 -98,446.31 Credit impairment loss Add: Other income 529,365.60 374,931.06 Return on investment (“-” for loss) 3,057,637.45 3,756,489.11 18 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Including: Share of profit or loss of joint ventures and associates Foreign exchange gain (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) 15,874,468.46 19,033,892.64 Asset disposal income (“-” for loss) 12,024,268.43 -20,558.77 3. Operating profit (“-” for loss) 37,165,326.41 48,051,142.28 Add: Non-operating income 1,151,376.64 2,194,528.27 Less: Non-operating expense 182,176.69 101,985.74 4. Profit before tax (“-” for loss) 38,134,526.36 50,143,684.81 Less: Income tax expense 8,993,780.25 13,089,751.48 5. Net profit (“-” for net loss) 29,140,746.11 37,053,933.33 5.1 By operating continuity 5.1.1 Net profit from continuing operations 29,140,746.11 37,053,933.33 (“-” for net loss) 5.1.2 Net profit from discontinued operations (“-” for net loss) 5.2 By ownership 5.2.1 Net profit attributable to owners of the 26,311,530.50 31,041,912.71 Company as the parent 5.2.1 Net profit attributable to 2,829,215.61 6,012,020.62 non-controlling interests 6. Other comprehensive income, net of tax -117,176.33 Attributable to owners of the Company as the -117,176.33 parent 6.1 Items that will not be reclassified to profit or loss 6.1.1 Changes caused by remeasurements on defined benefit pension schemes 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 6.1.3 Changes in the fair value of investments in other equity instruments 6.1.4 Changes in the fair value of the company’s credit risks 6.1.5 Other 6.2 Items that will be reclassified to profit -117,176.33 or loss 19 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 6.2.2 Changes in the fair value of investments in other debt obligations 6.2.3 Gain/Loss on changes in the fair value of available-for-sale financial assets 6.2.4 Other comprehensive income arising from the reclassification of financial assets 6.2.5 Gain/Loss arising from the reclassification of held-to-maturity investments to available-for-sale financial assets 6.2.6 Allowance for credit impairments in investments in other debt obligations 6.2.7 Reserve for cash flow hedges 6.2.8 Differences arising from the translation of foreign currency-denominated -117,176.33 financial statements 6.2.9 Other Attributable to non-controlling interests 7. Total comprehensive income 29,023,569.78 37,053,933.33 Attributable to owners of the Company as the 26,194,354.17 31,041,912.71 parent Attributable to non-controlling interests 2,829,215.61 6,012,020.62 8. Earnings per share 8.1 Basic earnings per share 0.04 0.05 8.2 Diluted earnings per share 0.04 0.05 Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before the combinations was RMBXXX, with the amount for the same period of last year being RMBXXX. Legal representative: Li Shaoling Head for financial affairs: Guan Ying Head of the financial department: Liu Quanli 4. Income Statement of the Company as the Parent Unit: RMB Item Q1 2019 Q1 2018 1. Operating revenue 0.00 0.00 Less: Cost of sales 0.00 75,609.15 Taxes and surcharges 36,788.40 38,992.73 20 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Selling expense Administrative expense 8,299,221.03 3,955,623.47 R&D expense Finance costs 3,694,507.98 2,459,641.30 Including: Interest expense 3,699,792.76 2,980,777.10 Interest income 9,134.39 934,956.82 Asset impairment loss 4,344.16 -98,446.31 Credit impairment loss Add: Other income Return on investment (“-” for loss) Including: Share of profit or loss of joint ventures and associates Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) Asset disposal income (“-” for loss) 2. Operating profit (“-” for loss) -12,034,861.57 -6,431,420.34 Add: Non-operating income Less: Non-operating expense 3. Profit before tax (“-” for loss) -12,034,861.57 -6,431,420.34 Less: Income tax expense 4. Net profit (“-” for net loss) -12,034,861.57 -6,431,420.34 4.1 Net profit from continuing operations (“-” for net loss) 4.2 Net profit from discontinued operations (“-” for net loss) 5. Other comprehensive income, net of tax 5.1 Items that will not be reclassified to profit or loss 5.1.1 Changes caused by remeasurements on defined benefit pension schemes 5.1.2 Other comprehensive income that will not be reclassified to profit or 21 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 loss under the equity method 5.1.3 Changes in the fair value of investments in other equity instruments 5.1.4 Changes in the fair value of the company’s credit risks 5.1.5 Other 5.2 Items that will be reclassified to profit or loss 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 5.2.2 Changes in the fair value of investments in other debt obligations 5.2.3 Gain/Loss on changes in the fair value of available-for-sale financial assets 5.2.4 Other comprehensive income arising from the reclassification of financial assets 5.2.5 Gain/Loss arising from the reclassification of held-to-maturity investments to available-for-sale financial assets 5.2.6 Allowance for credit impairments in investments in other debt obligations 5.2.7 Reserve for cash flow hedges 5.2.8 Differences arising from the translation of foreign currency-denominated financial statements 5.2.9 Other 6. Total comprehensive income -12,034,861.57 -6,431,420.34 7. Earnings per share 7.1 Basic earnings per share 7.2 Diluted earnings per share 5. Consolidated Cash Flow Statement Unit: RMB Item Q1 2019 Q1 2018 1. Cash flows from operating activities: 22 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Proceeds from sale of commodities 1,993,101,212.16 2,175,325,772.32 and rendering of services Net increase in customer deposits and interbank deposits Net increase in borrowings from the central bank Net increase in loans from other financial institutions Premiums received on original insurance contracts Net proceeds from reinsurance Net increase in deposits and investments of policy holders Net increase in proceeds from disposal of financial assets at fair value through profit or loss Interest, handling charges and commissions received Net increase in interbank loans obtained Net increase in proceeds from repurchase transactions Net proceeds from acting trading of securities Tax rebates 1,989,284.94 4,353,341.48 Cash generated from other operating 222,605,666.42 640,978,685.79 activities Subtotal of cash generated from 2,217,696,163.52 2,820,657,799.59 operating activities Payments for commodities and 1,703,243,616.27 1,348,654,820.64 services Net increase in loans and advances to customers Net increase in deposits in the central bank and in interbank loans granted Payments for claims on original insurance contracts Net increase in financial assets held for trading purposes Net increase in interbank loans granted 23 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Interest, handling charges and commissions paid Policy dividends paid Cash paid to and for employees 86,117,594.16 79,113,433.88 Taxes paid 44,910,779.37 50,185,919.15 Cash used in other operating 210,497,435.26 671,234,926.61 activities Subtotal of cash used in operating 2,044,769,425.06 2,149,189,100.28 activities Net cash generated from/used in 172,926,738.46 671,468,699.31 operating activities 2. Cash flows from investing activities: Proceeds from disinvestment 408,094,662.13 232,510,000.00 Return on investment 2,718,922.13 1,472,885.18 Net proceeds from the disposal of fixed assets, intangible assets and other 44,844.68 322,250.00 long-lived assets Net proceeds from the disposal of subsidiaries and other business units Cash generated from other investing 104,370,288.32 activities Subtotal of cash generated from 410,858,428.94 338,675,423.50 investing activities Payments for the acquisition of fixed assets, intangible assets and other 17,181,094.76 13,101,741.12 long-lived assets Payments for investments 822,386,686.00 621,530,000.00 Net increase in pledged loans granted Net payments for the acquisition of 1,780,563.05 7,764,985.00 subsidiaries and other business units Cash used in other investing 140,631,056.14 activities Subtotal of cash used in investing 841,348,343.81 783,027,782.26 activities Net cash generated from/used in -430,489,914.87 -444,352,358.76 investing activities 3. Cash flows from financing activities: Capital contributions received 6,553,500.00 Including: Capital contributions by non-controlling interests to 24 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 subsidiaries Borrowings obtained 342,470,792.50 150,698,502.12 Net proceeds from the issuance of bonds Cash generated from other financing 46,091,606.72 1,443,544,816.72 activities Subtotal of cash generated from 388,562,399.22 1,600,796,818.84 financing activities Repayments of borrowings 446,871,965.95 323,198,502.12 Payments for interest and dividends 17,691,810.54 21,335,613.45 Including: Dividends paid by subsidiaries to non-controlling interests Cash used in other financing 46,119,629.69 1,318,105,876.66 activities Subtotal of cash used in financing 510,683,406.18 1,662,639,992.23 activities Net cash generated from/used in -122,121,006.96 -61,843,173.39 financing activities 4. Effect of foreign exchange rate -59,331.42 -528,252.76 changes on cash and cash equivalents 5. Net increase in cash and cash -379,743,514.79 164,744,914.40 equivalents Add: Cash and cash equivalents, 867,870,016.78 1,014,438,663.43 beginning of the period 6. Cash and cash equivalents, end of 488,126,501.99 1,179,183,577.83 the period 6. Cash Flow Statement of the Company as the Parent Unit: RMB Item Q1 2019 Q1 2018 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of services Tax rebates 1,800.00 Cash generated from other operating 20,428,310.16 7,179,777.27 activities Subtotal of cash generated from 20,430,110.16 7,179,777.27 operating activities Payments for commodities and 14,172.05 services Cash paid to and for employees 4,980,819.49 1,802,949.00 Taxes paid 39,120.34 2,116,405.74 25 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Cash used in other operating 29,639,022.05 10,336,154.55 activities Subtotal of cash used in operating 34,673,133.93 14,255,509.29 activities Net cash generated from/used in -14,243,023.77 -7,075,732.02 operating activities 2. Cash flows from investing activities: Proceeds from disinvestment Return on investment Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets Net proceeds from the disposal of subsidiaries and other business units Cash generated from other investing activities Subtotal of cash generated from investing activities Payments for the acquisition of fixed assets, intangible assets and other 47,052.41 long-lived assets Payments for investments 13,500,000.00 Net payments for the acquisition of 1,780,563.05 subsidiaries and other business units Cash used in other investing activities Subtotal of cash used in investing 1,827,615.46 13,500,000.00 activities Net cash generated from/used in -1,827,615.46 -13,500,000.00 investing activities 3. Cash flows from financing activities: Capital contributions received Borrowings obtained 3,500,000.00 27,500,000.00 Net proceeds from the issuance of bonds Cash generated from other financing activities Subtotal of cash generated from 3,500,000.00 27,500,000.00 financing activities Repayments of borrowings Payments for interest and dividends 26 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 Cash used in other financing 1,775,293.17 activities Subtotal of cash used in financing 1,775,293.17 activities Net cash generated from/used in 3,500,000.00 25,724,706.83 financing activities 4. Effect of foreign exchange rate changes on cash and cash equivalents 5. Net increase in cash and cash -12,570,639.23 5,148,974.81 equivalents Add: Cash and cash equivalents, 13,597,659.66 15,360,177.32 beginning of the period 6. Cash and cash equivalents, end of 1,027,020.43 20,509,152.13 the period II Adjustments to the Financial Statements 1. Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New Standards Governing Financial Instruments, Revenue or Leases □ Applicable √ Not applicable 2. Retrospective Restatement of Previous Comparative Data due to the First Execution of any New Standards Governing Financial Instruments or Leases □ Applicable √ Not applicable III Independent Auditor’s Report Indicate by tick mark whether the financial statements above have been audited by an independent auditor. □Yes √ No These financial statements have not been audited by such an auditor. Hainan Jingliang Holdings Co., Ltd. 27 April 2019 27