Changchai Company, Limited Interim Report 2018 (Summary) Stock Code: 000570, 200570 Stock Name: Changchai-A, Changchai-B Announcement No. 2018-023 CHANGCHAI COMPANY, LIMITED INTERIM REPORT 2018 (SUMMARY) Part I Important Notes This Summary is based on the full text of the 2018 Interim Report of Changchai Company, Limited (together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). In order for a full understanding of the Company’s operating results, financial condition and future development plans, investors should carefully read the aforesaid full text, which has been disclosed together with this Summary on the media designated by the China Securities Regulatory Commission (the “CSRC”). Independent auditor’s modified opinion: □ Applicable √ Not applicable Board-approved interim cash and/or stock dividend plan for ordinary shareholders: □ Applicable √ Not applicable The Company has no interim dividend plan, either in the form of cash or stock. Board-approved interim cash and/or stock dividend plan for preferred shareholders: □ Applicable √ Not applicable 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. Part II Key Corporate Information 1. Stock Profile Stock name Changchai A, Changchai B Stock code 000570, 200570 Stock exchange for stock listing Shenzhen Stock Exchange Contact information Board Secretary Securities Representative Name He Jianjiang 123 Huaide Middle Road, Changzhou, Office address Jiangsu, China Tel. (86)519-68683155 E-mail address cchjj@changchai.com 2. Key Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No 1 Changchai Company, Limited Interim Report 2018 (Summary) H1 2018 H1 2017 Change (%) Operating revenue (RMB) 1,186,760,892.26 1,308,106,180.92 -9.28% Net profit attributable to the listed company’s 18,638,557.66 39,679,158.13 -53.03% shareholders (RMB) Net profit attributable to the listed company’s 17,262,823.25 20,774,047.49 -16.90% shareholders before exceptional items (RMB) Net cash generated from/used in operating -5,608,853.15 64,379,323.31 — activities (RMB) Basic earnings per share (RMB/share) 0.03 0.07 -57.14% Diluted earnings per share (RMB/share) 0.03 0.07 -57.14% Weighted average return on net assets (%) 0.86% 1.71% -0.85% 30 June 2018 31 December 2017 Change (%) Total assets (RMB) 3,694,504,040.78 3,722,905,285.05 -0.76% Net assets attributable to the listed company’s 2,122,495,960.74 2,246,896,857.86 -5.54% shareholders (RMB) 3. Shareholders and Their Holdings at Period-End Unit: share Number of preferred Number of ordinary 50,159 shareholders with resumed 0 shareholders voting rights (if any) Top 10 shareholders Pledged or Nature of Shareholdin Number of Restricted frozen shares Name of shareholder shareholder g percentage shares shares Status Shares State-owned Assets Supervision and Administration State-owned 30.43% 170,845,236 Commission of legal person Changzhou Municipal People’s Government Foreign legal KGI Asia Limited 0.57% 3,189,845 person Domestic natural Zhang Ruirong 0.32% 1,789,800 person Domestic natural Wan Peizhong 0.29% 1,645,800 person Domestic natural Huang Guoliang 0.27% 1,528,891 person Domestic natural Hu Wenyong 0.27% 1,515,066 person Domestic natural Li Suinan 0.24% 1,356,000 person Domestic natural Liang Nianyou 0.24% 1,348,452 person 2 Changchai Company, Limited Interim Report 2018 (Summary) Vanguard Total Foreign legal International Stock 0.24% 1,344,607 person Index Fund Domestic natural Xiong Shunbao 0.23% 1,282,251 person It is unknown whether there is any connected party or acting-in-concert party as defined in the Measures for the Connected or acting-in-concert parties among shareholders above Administration of Disclosure of Shareholder Equity Changes of Listed Companies among the top 10 tradable share holders or the top 10 unrestricted tradable share holders. Shareholder Xiong Shunbao holds 1,282,251 shares of the Shareholders conducting margin trading (if Company through the client account of collateral securities in any) Guolian Securities Co., Ltd. for margin trading, accounting for a stake of 0.23%. 4. Change of Controlling Shareholder or Actual Controller in Reporting Period Change of the controlling shareholder in the Reporting Period: □ Applicable √ Not applicable The controlling shareholder remained the same in the Reporting Period. Change of the actual controller in the Reporting Period: □ Applicable √ Not applicable The actual controller remained the same in the Reporting Period. 5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them □ Applicable √ Not applicable No preferred shareholders in the Reporting Period. 6. Corporate bonds Does the Company have any corporate bonds publicly offered and listed on the stock exchange, which were undue before the date of this Report’s approval or were due but could not be redeemed in full? No. Part III Operating Performance Discussion and Analysis 1. Business Overview of Reporting Period Is the Company subject to any disclosure requirements for special industries? No. For the first half of 2018, the Company sold 315.5 thousand diesel engines and related generator sets, as well 3 Changchai Company, Limited Interim Report 2018 (Summary) as 68.6 thousand gasoline engines and related generator sets for RMB1,187 million, representing net profit of RMB18.9079 million (a year-on-year decline of 52.79%). During the period, the Company’s operations was in face of quite many difficulties caused by the continued deep change in the domestic agricultural machinery market, including rising diesel engine manufacturing costs resulted from increasingly stringent emission regulations, as well as effects of enhanced environment supervision on certain component suppliers. Nonetheless, despite all these challenges, the Company still managed to achieve good operating results amid a sharp growth decline across the industry, thanks to the management’s swift moves to change operational strategy along with the entire staff’s hard work. Firstly, the Company has become a larger supply source for its major domestic customers and the domestic markets of three-wheelers, mid-and-large tractors and harvesters in spite of sharp weakening across these markets. Meanwhile, its unit sales in overseas emerging markets saw a rise, generating revenue of US$27.77 million during the Reporting Period. Secondly, the Company has launched a 4G33V16 diesel engine for automotive use project under China’s Motor Vehicle Emission Standards VI, and the technology roadmap has been determined, with the related project design and theoretical computation well underway. Additionally, three technology roadmaps and the prototypes based on two of these technology roadmaps have been completed for the Company’s 4G33V16 diesel engine for non-road vehicles project under China’s Motor Vehicle Emission Standards IV, with the harvester carrying test in progress. In all, the first half of 2018 saw a bigger market share of the Company’s single-cylinder engines, as well as major breakthroughs made by its competitive 4G33 Engine in market segments for mid-and-large tractors, crawler rice harvester, etc. In the second half of the year, in order to fulfill its annual targets, the Company will continue to benchmark itself against the best operations in the industry and try to narrow the gap with them on quality-related loss control, production safety and environmental protection, cost and expense reduction, production capacity utilization, talent development, etc. 2. Matters Related to Financial Reporting (1) Changes in Accounting Policies, Accounting Estimates or Measurement Methods Compared to Last Accounting Period □ Applicable √ Not applicable No such changes. (2) Retrospective Restatements due to Correction of Material Accounting Errors in Reporting Period □ Applicable √ Not applicable 4 Changchai Company, Limited Interim Report 2018 (Summary) No such cases. (3) Changes in Scope of Consolidated Financial Statements Compared to Last Accounting Period □ Applicable √ Not applicable No such changes. 5