Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 (Summary) Stock Code: 000505, 200505 Stock Name: JLKG, JL-B Announcement No. 2019-030 HAINAN JINGLIANG HOLDINGS CO., LTD. FIRST QUARTER REPORT 2019 (SUMMARY) 1 Hainan Jingliang Holdings Co., Ltd. First Quarter Report 2019 (Summary) 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 (Summary) 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 (Summary) 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 (Summary) 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 (Summary) 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 (Summary) 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 (Summary) 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 (Summary) 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 (Summary) 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 (Summary) 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. Hainan Jingliang Holdings Co., Ltd. 27 April 2019 11