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苏常柴B:2018年第三季度报告全文(英文版)2018-10-30  

						Changchai Company, Limited                  Third Quarter Report 2018




     CHANGCHAI COMPANY, LIMITED
          THIRD QUARTER REPORT 2018




                             October 2018




1
Changchai Company, Limited                                            Third Quarter Report 2018




                               Part I Important Notes

     The Board of Directors (or the “Board”), the Supervisory Committee as well as the
directors, supervisors and senior management of Changchai Company, Limited (together with
its consolidated subsidiaries, the “Company”, except where the context otherwise requires)
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.
    Shi Xinkun, the Company’s legal representative, Zhang Xin, the Company’s General
Manager, and Jiang He, 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
Changchai Company, Limited                                                                 Third Quarter Report 2018




                               Part II Key Corporate Information

I Key Consolidated Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No
                                                  September 30, 2018       December 31, 2017            Change
Total assets (RMB)                                  3,756,252,247.55            3,722,905,285.05                0.90%
Equity attributable to owners of the parent
                                                    2,109,129,803.12            2,246,896,857.86               -6.13%
(RMB)
                                                   July-September                        January-Septemb       YoY
                                                                          YoY change
                                                        2018                                 er 2018          change
Net sales (RMB)                                       432,605,495.58           -21.55% 1,619,366,387.84       -12.91%
Net margin attributable to owners of the parent
                                                        4,670,842.38           52.03%      23,309,400.04      -45.48%
(RMB)
Net margin attributable to owners of the parent
                                                       -5,982,192.17                —      11,280,631.08     -47.29%
before exceptional gains and losses (RMB)
Net cash from operating activities (RMB)                   —                  —          -54,251,797.59              —
Basic earnings per share (RMB/share)                               0.01         0.00%                  0.04   -50.00%
Diluted earnings per share (RMB/share)                             0.01         0.00%                  0.04   -50.00%
Weighted average return on equity (%)                            0.22%          0.09%               1.05%      -0.80%

Exceptional gains and losses:
√ Applicable □ Not applicable
                                                                                                              Unit: RMB
                             Item                               Q1-Q3 2018                      Note
                                                                                In July 2018, the company
                                                                                recovered the entrusted loan of
                                                                                1,000.00 million yuan which had
                                                                                fully accrued the asset impairment
    Gain or loss on disposal of non-current assets
                                                            12,044,376.37       provision. For details, please refer
    (inclusive of impairment allowance write-offs)
                                                                                to the company's announcement on
                                                                                recovering part of the entrusted loan
                                                                                disclosed on July 13, 2018
                                                                                (announcement number: 2018-018).
    Government subsidies charged to current profit or
                                                                  475,400.00
    loss (exclusive of government subsidies given in the


3
Changchai Company, Limited                                                                  Third Quarter Report 2018


    Company’s ordinary course of business at fixed
    quotas or amounts as per government’s uniform
    standards)
    Capital occupation charges on non-financial
                                                                     573,182.00
    enterprises that are charged to current profit or loss
    Gain or loss on fair-value changes in trading financial
    assets and liabilities & investment income from
    disposal of trading financial assets and liabilities and
                                                                     455,319.86
    available-for-sale financial assets (exclusive of
    effective portion of hedges that arise in the
    Company’s ordinary course of business)
    Other gains and losses that meet definition of
                                                                     656,800.26
    exceptional gain/loss
    Less: Income tax effects                                        2,176,309.53
    Total                                                       12,028,768.96                      --
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 30 September 2018

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 with
    Number of ordinary shareholders                        49,459                                                       0
                                                                      resumed voting rights (if any)
                                                     Top 10 shareholders
                                                                                                           Shares in
                                                                       Sharehol                  Restri
                                                                                                           pledge or
                                                                         ding      Number of      cted
            Name of shareholder          Nature of shareholder                                              frozen
                                                                       percenta     shares       share
                                                                                                          Stat    Shar
                                                                          ge                        s
                                                                                                           us      es
    State-owned Assets
    Supervision and
    Administration Commission of       State-owned legal person         30.43%     170,845,236
    Changzhou Municipal People’s
    Government
    KGI Asia Limited                   Foreign legal person              0.57%       3,189,845

4
Changchai Company, Limited                                                               Third Quarter Report 2018


    Wang Jianwei                      Domestic natural person       0.34%        1,934,500
    Zhang Ruirong                     Domestic natural person       0.32%        1,789,800
    Wan Peizhong                      Domestic natural person       0.29%        1,645,800
    Huang Guoliang                    Domestic natural person       0.27%        1,528,891
    Hu Wenyong                        Domestic natural person       0.27%        1,500,066
    Li Suinan                         Domestic natural person       0.24%        1,356,000
    Vanguard Total International
                                      Foreign legal person          0.23%        1,292,594
    Stock Index Fund
    Xiong Shunbao                     Domestic natural person       0.23%        1,282,251
                                           Top 10 unrestricted shareholders

                                                 Unrestricted                      Shares by type
                Name of shareholder
                                                   shares                       Type                      Shares
    State-owned Assets Supervision and
    Administration Commission of Changzhou       170,845,236    RMB-denominated ordinary stock         170,845,236
    Municipal People’s Government
    KGI Asia Limited                                3,189,845   Domestically listed foreign stock         3,189,845
    Wang Jianwei                                    1,934,500   RMB-denominated ordinary stock            1,934,500
    Zhang Ruirong                                   1,789,800   RMB-denominated ordinary stock            1,789,800
    Wan Peizhong                                    1,645,800   RMB-denominated ordinary stock            1,645,800
    Huang Guoliang                                  1,528,891   Domestically listed foreign stock         1,528,891
    Hu Wenyong                                      1,500,066   Domestically listed foreign stock         1,500,066
    Li Suinan                                       1,356,000   Domestically listed foreign stock         1,356,000
    Vanguard Total International Stock Index
                                                    1,292,594   Domestically listed foreign stock         1,292,594
    Fund
    Xiong Shunbao                                   1,282,251   RMB-denominated ordinary stock            1,282,251

                                                 It is unknown whether there is any connected party or
                                               acting-in-concert party as defined in the Measures for the
    Related or acting-in-concert parties among
                                               Administration of Disclosure of Shareholder Equity Changes of
    shareholders above
                                               Listed Companies among the top 10 tradable share holders or the
                                                 top 10 unrestricted tradable share holders.
    Top 10 ordinary shareholders involved in
                                             N/A
    securities margin trading (if any)
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.



5
Changchai Company, Limited                                                Third Quarter Report 2018


2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them

□ Applicable √ Not applicable




6
Changchai Company, Limited                                                            Third Quarter Report 2018




                                      Part III Significant Events

I Changes in Key Consolidated Financial Statement Line Items and Explanation of why

√ Applicable □ Not applicable
1. Consolidated Balance Sheet Items as at 30 September 2018
        Item           30 September 2018 31 December 2017 Change
                                                                                   Explanation of why
                            (RMB)             (RMB)        (%)

Notes and accounts      1,485,050,866.65     1,108,415,299.12 33.98%During Q1~Q3 2018, credit sale was
receivable                                                          properly carried out to extend market space,
                                                                    and most multi-cylinder engine customers
                                                                    were supporting manufacturers for bigger
                                                                    enterprises, which means relatively long
                                                                    account ages for the Company,resulting in
                                                                    an increase of 117.69% in receivables
                                                                    compared to the beginning.

Other receivables            21,267,589.07       5,794,971.22 267.00%Temporary loans granted by subsidiary
                                                                     Changzhou Housheng Investment Co., Ltd.
                                                                     to Xuzhou Huadong Foundry Factory, etc.

Other current assets         23,104,987.78     42,540,184.05 -45.69%Decrease in overpaid VAT

Payroll payable              24,782,530.80     51,247,112.66 -51.64%Salaries and bonuses accrued in the nine
                                                                    months ended 30 September 2017 were
                                                                    mostly paid in the corresponding period of
                                                                    the current year

2. Consolidated Income Statement Items for Q1~Q3 2018
                         Q1~Q3 2018          Q1~Q3 2017       Change
        Item                                                                       Explanation of why
                           (RMB)               (RMB)           (%)

Finance costs                -4,311,945.83    -1,287,876.55      —— Increase in foreign exchange income resulted
                                                                      from exchange rate fluctuations

Asset    impairment          -2,531,847.48     9,150,039.27      —— Allowances for doubtful accounts receivable
loss                                                                  recorded based on aging led to an increase in
                                                                      asset impairment loss, while the collection of
                                                                      entrusted loans with full-amount impairment
                                                                      allowances resulted in writedowns in this
                                                                      item

Investment income             8,053,269.86    13,407,484.45 -39.93%Decline in dividends from Foton Motor

Non-operating                 2,830,716.11    25,903,268.01 -89.07% Last year saw the non-operating income
income                                                              arising from including Changzhou Fuji

7
Changchai Company, Limited                                                            Third Quarter Report 2018


                                                                       Changchai Robin Gasoline Engine Co., Ltd.,
                                                                       whose equity interests had been acquired by
                                                                       the Company at a discount, into the
                                                                       consolidated financial statements

Non-operating                 1,698,515.85     7,979,840.88 -78.71%Greater loss on the disposal of inactive
expense                                                            materials during the same period of last year

Net profit                   23,643,295.60    43,305,505.88 -45.40%Last year saw the non-operating income
                                                                   arising from including Changzhou Fuji
                                                                   Changchai Robin Gasoline Engine Co., Ltd.,
                                                                   whose equity interests had been acquired by
                                                                   the Company at a discount, into the
                                                                   consolidated financial statements

Other                   -144,235,225.00      -41,677,200.00     —— Significant decline in gains on fair value
comprehensive                                                        changes of available-for-sale financial assets
income, net of tax

3. Consolidated Cash Flow Statement Items for Q1~Q3 2018
                        Q1~Q3 2018           Q1~Q3 2017       Change
        Item                                                                        Explanation of why
                          (RMB)                (RMB)           (%)

Tax rebates                  39,981,450.76    24,619,585.42    62.40%Mainly for the report period received more
                                                                     export tax rebates.

Taxes paid               21,038,574.94        30,890,368.40   -31.89%Changes in sales and profit, as well as the
                                                                     effect of the government’s tax cuts

Net cash generated       -23,421,616.03      -63,559,009.38      —— Significant decline in payments for
from/used in                                                          acquisition of fixed assets, intangible assets
investing activities                                                  and other long-lived assets

Net cash generated
                                                                        Mainly for the last reporting period
from/used in             -16,892,465.30       21,794,509.81      ——
                                                                        borrowings increased more
financing activities



II Progress, Influence and Solutions Associated with Significant Events

√ Applicable □ Not applicable
     The controlling shareholder of the Company—State-owned Assets Supervision and Administration
Commission of Changzhou Municipal Government (hereinafter referred to as “Changzhou SASAC”) and
Changzhou Investment Group Co., Ltd. signed the Agreement on Gratuitous Transfer of State-owned Shares Held
by Changchai Company Limited on 16 August 2018, in which the Changzhou SASAC intended to gratuitously
transfer all 170,845,236 shares in Changchai Company Limited held by it to Changzhou Investment Group Co.,
Ltd. The issue has been approved by Changzhou People’s Government and the State-owned Assets Supervision
and Administration Commission of Jiangsu Provincial Government. In addition, China securities regulatory

8
Changchai Company, Limited                                                                Third Quarter Report 2018


commission (CSRC) has agreed to exempt Changzhou Investment Group Co., Ltd. from the tender offer
obligation for holding the Company’s shares due to gratuitous transfer. The issue is currently going through the
relevant equity transfer procedures. For more details, please refer to the Indicative Announcement on Gratuitous
Transfer of State-owned Shares Held by the Controlling Shareholder (Announcement No.: 2018-015),
Announcement on the Progress of Gratuitous Transfer of State-owned Shares Held by the Controlling Shareholder
(Announcement No.: 2018-020) and Announcement on the Progress of Gratuitous Transfer of State-owned Shares
Held by the Controlling Shareholder (Announcement No.: 2018-025) disclosed by the Company respectively on 1
June 2018, 17 August 2018 and 5 September 2018. After the completion of the transfer, Changzhou Investment
Group Co., Ltd. will be the controlling shareholder of the Company and the actual controller of the Company will
not change.


      Overview of significant event                 Disclosure date                     Related announcement
                                           1 June 2018                          2018-015

    Gratuitous transfer of state-owned     16 August 2018                       2018-020
    shares                                 5 September 2018                     2018-025
                                           20 October 2018                      2018-026


III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Parties, Failed to Fulfill on Time during
Reporting Period

√ Applicable □ Not applicable
                                                                                         Date of   Period
                                   Type of
                     Commitme                                                            commit      of        Fulfil
    Commitment                     commit                     Contents
                      nt maker                                                            ment     commit      lment
                                    ment
                                                                                         making     ment
                                              Rewards Plan for Shareholders in
                                              Next Three Years(2017-2019)
                                              Under the premise of positive
                                               distributive profit (remaining
                                               after-tax profits after making up for
                                               the loss and extracting for the                                 Imple
    Other
                                               common reserves) in this year or                                ment
    commitments      Changchai                                                                     Year
                                               half year and abundant money flow        11 May                 in a
    made        to   Company,      bonus                                                           2017-2
                                               and no influence on the following-up     2017                   norm
    minority         Limited                                                                       019
                                               going concern after cash bonus, the                             al
    shareholders
                                               profits allocated by cash every year                            way
                                               shouldn’t be lower than 10% of the
                                               allocable profits from parent
                                               company. Meanwhile, the
                                               accumulated allocable profits by
                                               cash in the arbitrary continuous three


9
Changchai Company, Limited                                                              Third Quarter Report 2018


                                            accounting years should not be lower
                                            than 30% of the annual average
                                            allocable profits in those three years.
 Fulfilled on time                                                                    Yes
 When the commitment was not completely fulfilled at maturity, the specific
                                                                                      N/A
 reasons and following work plan shall be given


IV 2018 Annual Operating Performance Forecast

Warning of a forecast loss on or a forecast significant year-on-year change in net profit for year 2018, as well as
explanation of why:
□ Applicable √ Not applicable

V Securities Investments

□ Applicable √ Not applicable
No such cases in the Reporting Period.

VI Wealth Management Entrustment

√ Applicable □ Not applicable
                                                                    Unit: RMB’0,000 (in RMB ten thousand yuan)
                                                                             Outstanding amount         Overdue
         Type of wealth management          Funding source      Principal
                                                                               before maturity          amount
 Wealth management product purchased
                                           Self-funded              1,600                    1,600                  0
 from securities company
 Total                                                              1,600                    1,600                  0
High-risk wealth management entrustments with amounts that are individually significant, or with low security,
low liquidity, or no protection of the principal:
□ Applicable √ Not applicable
Wealth management entrustments with possible impairments including an expectedly unrecoverable principal:
□ Applicable √ Not applicable

VII Investments in Derivative Financial Instruments

□ Applicable √ Not applicable
No such cases in the Reporting Period.

VIII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc.
during Reporting Period

√ Applicable □ Not applicable

10
Changchai Company, Limited                                                         Third Quarter Report 2018



     Date of visit   Way of visit   Type of visitor                           About

                                                      Progress of lithium battery diaphragm project invested
 13 August 2018      Other          Individual
                                                      with industry funds set up by the Company
 18 July 2018        Other          Individual        Repurchase of B-share


IX Irregularities in Provision of Guarantees for External Parties

□ Applicable √ Not applicable
No such cases in the Reporting Period.

X Occupation of the Company’s Capital by Controlling Shareholder or Its Related Parties for
Non-Operating Purposes

□ Applicable √ Not applicable
No such cases in the Reporting Period.




11
Changchai Company, Limited                                                         Third Quarter Report 2018




                                    Part IV Financial Statements

I Financial Statements

1. Consolidated Balance Sheet

Prepared by Changchai Company Limited
                                                   30 September 2018
                                                                                                     Unit: RMB
                                   Item                                30 September 2018    31 December 2017
 Current assets:
     Monetary capital                                                      411,034,175.51       430,305,367.71
     Settlement reserve
     Interbank loans granted
     Financial assets at fair value through profit or loss
     Derivative financial assets
     Notes and accounts receivable                                       1,485,050,866.65     1,108,415,299.12
       Including: Notes receivable                                         631,687,682.49       716,404,345.57
                   Accounts receivable                                     853,363,184.16       392,010,953.55
     Prepayments                                                            19,751,263.00         17,781,007.77
     Premiums receivable
     Reinsurance receivables
     Receivable reinsurance contract reserve
     Other receivables                                                      21,267,589.07          5,794,971.22
     Financial assets purchased under resale agreements
     Inventories                                                           424,522,218.24       508,246,807.48
     Assets classified as held for sale
     Current portion of non-current assets
     Other current assets                                                   23,104,987.78         42,540,184.05
 Total current assets                                                    2,384,731,100.25     2,113,083,637.35
 Non-current assets:
     Loans and advances to customers
     Available-for-sale financial assets                                   616,859,101.49       793,522,639.04
     Held-to-maturity investments


12
Changchai Company, Limited                                                         Third Quarter Report 2018


     Long-term receivables
     Long-term equity investments
     Investment property                                                   51,208,092.83          52,864,348.43
     Fixed assets                                                         518,930,402.74        560,049,970.50
     Construction in progress                                              79,665,817.80          94,581,989.06
     Productive living assets
     Oil and gas assets
     Intangible assets                                                    103,850,781.63        107,795,746.86
     R&D expense
     Goodwill
     Long-term prepaid expense
     Deferred income tax assets                                             1,006,950.81           1,006,953.81
     Other non-current assets
 Total non-current assets                                                1,371,521,147.30     1,609,821,647.70
 Total assets                                                            3,756,252,247.55     3,722,905,285.05
 Current liabilities:
     Short-term borrowings                                                 27,000,000.00          24,900,000.00
     Borrowings from central bank
     Customer deposits and interbank deposits
     Interbank loans obtained
     Financial liabilities at fair value through profit or loss
     Derivative financial liabilities
     Notes and accounts payable                                          1,143,196,396.32       963,299,000.18
     Advances from customers                                               51,157,778.08          40,153,984.91
     Financial assets sold under repurchase agreements
     Handling charges and commissions payable
     Payroll payable                                                       24,782,530.80          51,247,112.66
     Taxes payable                                                         10,298,127.47           4,017,920.78
     Other payables                                                       219,162,163.02        195,985,676.91
     Reinsurance payables
     Insurance contract reserve
     Payables for acting trading of securities
     Payables for underwriting of securities
    Liabilities directly associated with assets classified as held for
 sale

13
Changchai Company, Limited                                                        Third Quarter Report 2018


     Current portion of non-current liabilities
     Other current liabilities                                             2,924,539.46           2,028,937.59
 Total current liabilities                                             1,478,521,535.15      1,281,632,633.03
 Non-current liabilities:
     Long-term borrowings                                                 21,000,000.00          21,500,000.00
     Bonds payable
       Including: Preferred shares
                     Perpetual bonds
     Long-term payables
     Long-term payroll payable
     Provisions
     Deferred income                                                      60,992,858.46          60,992,858.46
     Deferred income tax liabilities                                      66,800,998.95          92,409,779.39
     Other non-current liabilities
 Total non-current liabilities                                           148,793,857.41        174,902,637.85
 Total liabilities                                                     1,627,315,392.56      1,456,535,270.88
 Owners’ equity:
     Share capital                                                       561,374,326.00        561,374,326.00
     Other equity instruments
       Including: Preferred shares
                     Perpetual bonds
     Capital reserves                                                    164,328,665.43        164,328,665.43
     Less: Treasury stock
     Other comprehensive income                                          370,833,325.00        515,068,550.00
     Specific reserve                                                     13,289,059.21          13,289,059.21
     Surplus reserves                                                    313,705,210.16        313,705,210.16
     General reserve
     Retained earnings                                                   685,599,217.32        679,131,047.06
 Total equity attributable to owners of the Company as the parent      2,109,129,803.12      2,246,896,857.86
 Non-controlling interests                                                19,807,051.87          19,473,156.31
 Total owners’ equity                                                 2,128,936,854.99      2,266,370,014.17
 Total liabilities and owners’ equity                                 3,756,252,247.55      3,722,905,285.05


Legal representative: Shi Xinkun          General manager: Zhang Xin   head of financial department: Jiang He



14
Changchai Company, Limited                                                Third Quarter Report 2018


2. Balance Sheet of the Company as the Parent

                                                                                            Unit: RMB
                                   Item                      30 September 2018     31 December 2017
 Current assets:
     Monetary capital                                            368,196,862.63        366,907,287.64
     Financial assets at fair value through profit or loss
     Derivative financial assets
     Notes and accounts receivable                             1,374,522,228.30      1,031,361,397.27
       Including: Notes receivable                               617,668,214.49        711,474,345.57
                    Accounts receivable                          756,854,013.81        319,887,051.70
     Prepayments                                                   4,181,621.10           9,815,561.98
     Other receivables                                            10,525,373.22          11,798,211.40
     Inventories                                                 299,370,138.70        376,814,388.82
     Assets classified as held for sale
     Current portion of non-current assets
     Other current assets                                                               20,692,057.15
 Total current assets                                          2,056,796,223.95      1,817,388,904.26
 Non-current assets:
     Available-for-sale financial assets                         616,149,000.00        785,837,500.00
     Held-to-maturity investments
     Long-term receivables
     Long-term equity investments                                231,752,730.03        231,752,730.03
     Investment property                                          51,208,092.83         52,864,348.43
     Fixed assets                                                418,626,042.81        453,155,359.47
     Construction in progress                                     79,280,694.44         93,681,793.26
     Productive living assets
     Oil and gas assets
     Intangible assets                                            72,708,970.40         75,623,219.49
     R&D expense
     Goodwill
     Long-term prepaid expense
     Deferred income tax assets                                      934,554.06             934,554.06
     Other non-current assets
 Total non-current assets                                      1,470,660,084.57      1,693,849,504.74

15
Changchai Company, Limited                                                         Third Quarter Report 2018


 Total assets                                                            3,527,456,308.52     3,511,238,409.00
 Current liabilities:
     Short-term borrowings                                                 10,000,000.00
     Financial liabilities at fair value through profit or loss
     Derivative financial liabilities
     Notes and accounts payable                                          1,053,470,134.46       883,244,989.22
     Advances from customers                                               49,253,055.31         38,382,261.14
     Payroll payable                                                       19,402,520.44         41,401,495.39
     Taxes payable                                                          2,031,773.51           1,373,036.64
     Other payables                                                       201,143,326.08        185,981,889.23
    Liabilities directly associated with assets classified as held for
 sale
     Current portion of non-current liabilities
     Other current liabilities
 Total current liabilities                                               1,335,300,809.80     1,150,383,671.62
 Non-current liabilities:
     Long-term borrowings                                                  19,000,000.00         19,500,000.00
     Bonds payable
       Including: Preferred shares
                     Perpetual bonds
     Long-term payables
     Long-term payroll payable
     Provisions
     Deferred income                                                       60,992,858.46         60,992,858.46
     Deferred income tax liabilities                                       65,441,175.00         90,894,450.00
     Other non-current liabilities
 Total non-current liabilities                                            145,434,033.46        171,387,308.46
 Total liabilities                                                       1,480,734,843.26     1,321,770,980.08
 Owners’ equity:
     Share capital                                                        561,374,326.00        561,374,326.00
     Other equity instruments
       Including: Preferred shares
                     Perpetual bonds
     Capital reserves                                                     183,071,147.70        183,071,147.70
     Less: Treasury stock

16
Changchai Company, Limited                                                         Third Quarter Report 2018


     Other comprehensive income                                         370,833,325.00          515,068,550.00
     Specific reserve                                                     13,289,059.21          13,289,059.21
     Surplus reserves                                                   313,705,210.16          313,705,210.16
     Retained earnings                                                  604,448,397.19          602,959,135.85
 Total owners’ equity                                                 2,046,721,465.26       2,189,467,428.92
 Total liabilities and owners’ equity                                 3,527,456,308.52       3,511,238,409.00


Legal representative: Shi Xinkun          General manager: Zhang Xin   head of financial department: Jiang He

3. Consolidated Income Statement for Q3

                                                                                                     Unit: RMB
                                   Item                                  Q3 2018                 Q3 2017
 1. Revenue                                                              432,605,495.58       551,411,429.29
     Including: Operating revenue                                        432,605,495.58       551,411,429.29
                Interest income
                Premium income
                Handling charge and commission income
 2. Operating costs and expenses                                         435,376,583.73       553,758,537.78
     Including: Cost of sales                                            368,800,817.45       470,832,920.30
                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                                       3,622,252.63          1,498,185.39
                Selling expense                                           41,800,679.58         38,153,014.94
                Administrative expense                                    21,842,985.31         31,350,187.76
                R&D expense                                               15,978,761.69         13,545,557.30
                Finance costs                                              -4,179,608.71        -1,621,327.91
                   Including: Interest expense                               740,882.96            557,914.97
                                    Interest income                          682,638.32            988,604.45
                Asset impairment loss                                    -12,489,304.22
 Add: Other income

17
Changchai Company, Limited                                                            Third Quarter Report 2018


         Investment income (“-” for loss)                                    7,677,178.18         4,049,357.83
          Including: Share of profit or loss of joint ventures and
 associates
         Gain on changes in fair value (“-” for loss)
         Foreign exchange gain (“-” for loss)
         Asset disposal income (“-” for loss)
 3. Operating profit (“-” for loss)                                          4,906,090.03         1,702,249.34
 Add: Non-operating income                                                       727,633.08         4,129,944.60
 Less: Non-operating expense                                                     171,349.64         1,585,185.70
 4. Profit before tax (“-” for loss)                                         5,462,373.47         4,247,008.24
 Less: Income tax expense                                                        726,986.79           992,114.23
 5. Net profit (“-” for net loss)                                            4,735,386.68         3,254,894.01
     5.1 Net profit from continuing operations (“-” for net loss)            4,735,386.68         3,254,894.01
     5.2 Net profit from discontinued operations (“-” for net loss)
     Net profit attributable to owners of the Company as the parent            4,670,842.38         3,072,285.14
     Net profit attributable to non-controlling interests                         64,544.30           182,608.87
 6. Other comprehensive income, net of tax                                    -18,037,000.00           -42,075.00
     Attributable to owners of the Company as the parent                      -18,037,000.00           -42,075.00
        6.1 Items that will not be reclassified to profit or loss
       6.1.1 Changes in net liabilities or assets caused by
 remeasurements on defined benefit pension schemes
         6.1.2 Share of other comprehensive income of investees
 that will not be reclassified to profit or loss under equity method
        6.2 Items that may subsequently be reclassified to profit or
                                                                              -18,037,000.00           -42,075.00
 loss
         6.2.1 Share of other comprehensive income of investees
 that will be reclassified to profit or loss under equity method
        6.2.2 Gain/Loss on changes                 in     fair   value   of
                                                                              -18,037,000.00           -42,075.00
 available-for-sale financial assets
         6.2.3 Gain/Loss arising from reclassification of
 held-to-maturity investments to available-for-sale financial assets
          6.2.4 Effective gain/loss on cash flow hedges
        6.2.5 Differences arising from translation of foreign
 currency-denominated financial statements
          6.2.6 Other
     Attributable to non-controlling interests
 7. Total comprehensive income                                                -13,301,613.32        3,212,819.01
     Attributable to owners of the Company as the parent                      -13,366,157.62        3,030,210.14

18
Changchai Company, Limited                                                            Third Quarter Report 2018


     Attributable to non-controlling interests                                   64,544.30            182,608.87
 8. Earnings per share
     8.1 Basic earnings per share                                                      0.01                  0.01
     8.2 Diluted earnings per share                                                    0.01                  0.01


Legal representative: Shi Xinkun             General manager: Zhang Xin   head of financial department: Jiang He

4. Income Statement of the Company as the Parent for Q3

                                                                                                        Unit: RMB
                                      Item                                  Q3 2018                Q3 2017
 1. Operating revenue                                                      416,427,359.56        519,533,251.59
 Less: Cost of sales                                                       362,072,818.22        448,760,167.59
       Taxes and surcharges                                                   2,893,386.71         1,417,116.02
       Selling expense                                                      39,994,953.30         34,703,041.46
       Administrative expense                                               17,353,285.58         26,533,742.68
       R&D expense                                                          15,978,761.69         13,545,557.30
       Finance costs                                                         -4,413,035.38        -2,767,240.21
          Including: Interest expense                                          768,546.57            469,437.35
                       Interest income                                         591,988.98            775,478.29
       Asset impairment loss                                                -12,556,816.51
 Add: Other income
        Investment income (“-” for loss)                                    7,576,950.00         3,757,000.00
          Including: Share of profit or loss of joint ventures and
 associates
        Gain on changes in fair value (“-” for loss)
        Asset disposal income (“-” for loss)
 2. Operating profit (“-” for loss)                                         2,680,955.95         1,097,866.75
 Add: Non-operating income                                                     344,083.46          2,746,050.87
 Less: Non-operating expense                                                   170,435.64            777,184.55
 3. Profit before tax (“-” for loss)                                        2,854,603.77         3,066,733.07
 Less: Income tax expense                                                                            291,560.85
 4. Net profit (“-” for net loss)                                           2,854,603.77         2,775,172.22
     4.1 Net profit from continuing operations (“-” for net loss)           2,854,603.77         2,775,172.22
     4.2 Net profit from discontinued operations (“-” for net loss)
 5. Other comprehensive income, net of tax                                  -18,037,000.00            -42,075.00


19
Changchai Company, Limited                                                          Third Quarter Report 2018


     5.1 Items that will not be reclassified to profit or loss
     5.1.1 Changes in net liabilities or assets caused by
 remeasurements on defined benefit pension schemes
      5.1.2 Share of other comprehensive income of investees that
 will not be reclassified to profit or loss under equity method
     5.2 Items that may subsequently be reclassified to profit or loss     -18,037,000.00           -42,075.00
      5.2.1 Share of other comprehensive income of investees that
 will be reclassified to profit or loss under equity method
      5.2.2 Gain/Loss on changes in fair value of available-for-sale
                                                                           -18,037,000.00           -42,075.00
 financial assets
      5.2.3 Gain/Loss arising from reclassification of
 held-to-maturity investments to available-for-sale financial assets
       5.2.4 Effective gain/loss on cash flow hedges
      5.2.5 Differences arising from translation of foreign
 currency-denominated financial statements
       5.2.6 Other
 6. Total comprehensive income                                             -15,182,396.23        2,733,097.22
 7. Earnings per share
      7.1 Basic earnings per share
      7.2 Diluted earnings per share


Legal representative: Shi Xinkun           General manager: Zhang Xin    head of financial department: Jiang He

5. Consolidated Income Statement for Q1~Q3

                                                                                                      Unit: RMB
                                    Item                                 Q1~Q3 2018            Q1~Q3 2017
 1. Revenue                                                              1,619,366,387.84    1,859,517,610.21
     Including: Operating revenue                                        1,619,366,387.84    1,859,517,610.21
                 Interest income
                 Premium income
                 Handling charge and commission income
 2. Operating costs and expenses                                         1,599,958,648.92    1,840,879,902.93
     Including: Cost of sales                                            1,403,155,726.44    1,612,225,242.18
                 Interest expense
                 Handling charge and commission expense
                 Surrenders
                 Net claims paid


20
Changchai Company, Limited                                                        Third Quarter Report 2018


                 Net amount provided as insurance contract reserve
                 Expenditure on policy dividends
                 Reinsurance premium expense
                 Taxes and surcharges                                      9,361,725.89        8,530,314.39
                 Selling expense                                         94,028,755.44        93,968,371.07
                 Administrative expense                                  63,731,730.10        84,002,874.30
                 R&D expense                                             36,524,504.36        34,290,938.27
                 Finance costs                                            -4,311,945.83       -1,287,876.55
                   Including: Interest expense                             2,545,980.06        3,024,858.13
                                         Interest income                   1,574,301.49        2,984,418.67
                 Asset impairment loss                                    -2,531,847.48        9,150,039.27
 Add: Other income                                                          129,600.00
         Investment income (“-” for loss)                                8,053,269.86       13,407,484.45
          Including: Share of profit or loss of joint ventures and
 associates
         Gain on changes in fair value (“-” for loss)
         Foreign exchange gain (“-” for loss)
         Asset disposal income (“-” for loss)
 3. Operating profit (“-” for loss)                                    27,590,608.78        32,045,191.73
 Add: Non-operating income                                                 2,830,716.11       25,903,268.01
 Less: Non-operating expense                                               1,698,515.85        7,979,840.88
 4. Profit before tax (“-” for loss)                                   28,722,809.04        49,968,618.86
 Less: Income tax expense                                                  5,079,513.44        6,663,112.98
 5. Net profit (“-” for net loss)                                      23,643,295.60        43,305,505.88
     5.1 Net profit from continuing operations (“-” for net loss)      23,643,295.60        43,305,505.88
     5.2 Net profit from discontinued operations (“-” for net loss)
     Net profit attributable to owners of the Company as the parent      23,309,400.04        42,751,443.27
     Net profit attributable to non-controlling interests                   333,895.56           554,062.61
 6. Other comprehensive income, net of tax                              -144,235,225.00      -41,677,200.00
     Attributable to owners of the Company as the parent                -144,235,225.00      -41,677,200.00
     6.1 Items that will not be reclassified to profit or loss
       6.1.1 Changes in net liabilities or assets caused by
 remeasurements on defined benefit pension schemes
         6.1.2 Share of other comprehensive income of investees
 that will not be reclassified to profit or loss under equity method



21
Changchai Company, Limited                                                           Third Quarter Report 2018


     6.2 Items that may subsequently be reclassified to profit or loss    -144,235,225.00       -41,677,200.00
         6.2.1 Share of other comprehensive income of investees
 that will be reclassified to profit or loss under equity method
        6.2.2 Gain/Loss on changes               in   fair   value   of
                                                                          -144,235,225.00       -41,677,200.00
 available-for-sale financial assets
         6.2.3 Gain/Loss arising from reclassification of
 held-to-maturity investments to available-for-sale financial assets
          6.2.4 Effective gain/loss on cash flow hedges
        6.2.5 Differences arising from translation of foreign
 currency-denominated financial statements
          6.2.6 Other
     Attributable to non-controlling interests
 7. Total comprehensive income                                            -120,591,929.40         1,628,305.88
     Attributable to owners of the Company as the parent                  -120,925,824.96         1,074,243.27
     Attributable to non-controlling interests                                 333,895.56           554,062.61
 8. Earnings per share
     8.1 Basic earnings per share                                                     0.04                  0.08
     8.2 Diluted earnings per share                                                   0.04                  0.08


Legal representative: Shi Xinkun           General manager: Zhang Xin     head of financial department: Jiang He

6. Income Statement of the Company as the Parent for Q1~Q3

                                                                                                       Unit: RMB
                                    Item                                  Q1~Q3 2018            Q1~Q3 2017
 1. Operating revenue                                                     1,537,762,482.71    1,748,840,798.71
 Less: Cost of sales                                                      1,353,150,662.71    1,535,510,001.55
       Taxes and surcharges                                                   7,281,502.74        7,469,956.58
       Selling expense                                                      86,373,935.16        85,011,010.11
       Administrative expense                                               50,165,905.14        70,323,735.83
       R&D expense                                                          36,524,504.36        34,290,938.27
       Finance costs                                                         -6,333,999.37       -3,403,441.05
          Including: Interest expense                                         2,380,867.34        2,712,359.91
                       Interest income                                        1,395,580.84        2,600,951.07
       Asset impairment loss                                                 -2,631,847.48        9,150,039.27
 Add: Other income                                                             129,600.00
        Investment income (“-” for loss)                                    7,597,950.00       10,709,750.99


22
Changchai Company, Limited                                                          Third Quarter Report 2018


          Including: Share of profit or loss of joint ventures and
 associates
         Gain on changes in fair value (“-” for loss)
         Asset disposal income (“-” for loss)
 2. Operating profit (“-” for loss)                                      20,959,369.45        21,198,309.14
 Add: Non-operating income                                                   2,104,313.37        3,313,407.07
 Less: Non-operating expense                                                 1,695,773.85        6,969,533.83
 3. Profit before tax (“-” for loss)                                     21,367,908.97        17,542,182.38
 Less: Income tax expense                                                    3,037,417.85        4,164,955.68
 4. Net profit (“-” for net loss)                                        18,330,491.12        13,377,226.70
     4.1 Net profit from continuing operations (“-” for net loss)        18,330,491.12        13,377,226.70
     4.2 Net profit from discontinued operations (“-” for net loss)
 5. Other comprehensive income, net of tax                               -144,235,225.00       -41,677,200.00
     5.1 Items that will not be reclassified to profit or loss
     5.1.1 Changes in net liabilities or assets caused by
 remeasurements on defined benefit pension schemes
      5.1.2 Share of other comprehensive income of investees that
 will not be reclassified to profit or loss under equity method
     5.2 Items that may subsequently be reclassified to profit or loss   -144,235,225.00       -41,677,200.00
      5.2.1 Share of other comprehensive income of investees that
 will be reclassified to profit or loss under equity method
      5.2.2 Gain/Loss on changes in fair value of available-for-sale
                                                                         -144,235,225.00       -41,677,200.00
 financial assets
      5.2.3 Gain/Loss arising from reclassification of
 held-to-maturity investments to available-for-sale financial assets
       5.2.4 Effective gain/loss on cash flow hedges
      5.2.5 Differences arising from translation of foreign
 currency-denominated financial statements
       5.2.6 Other
 6. Total comprehensive income                                           -125,904,733.88       -28,299,973.30
 7. Earnings per share
      7.1 Basic earnings per share
      7.2 Diluted earnings per share


Legal representative: Shi Xinkun           General manager: Zhang Xin    head of financial department: Jiang He

7. Consolidated Cash Flow Statement for Q1~Q3

                                                                                                      Unit: RMB

23
Changchai Company, Limited                                                           Third Quarter Report 2018


                                   Item                                    Q1~Q3 2018           Q1~Q3 2017
 1. Cash flows from operating activities:
     Proceeds from sale of commodities and rendering of services          1,502,082,934.17    1,847,464,192.62
     Net increase in customer deposits and interbank deposits
     Net increase in borrowings from 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
     Tax rebates                                                            39,981,450.76        24,619,585.42
     Cash generated from other operating activities                          9,176,454.39         8,501,430.20
 Subtotal of cash generated from operating activities                     1,551,240,839.32    1,880,585,208.24
     Payments for commodities and services                                1,302,400,952.42    1,592,437,011.20
     Net increase in loans and advances to customers
   Net increase in deposits in central bank and in interbank loans
 granted
     Payments for claims on original insurance contracts
     Interest, handling charges and commissions paid
     Policy dividends paid
     Cash paid to and for employees                                        227,468,105.70       244,510,500.67
     Taxes paid                                                             21,038,574.94        30,890,368.40
     Cash used in other operating activities                                54,585,003.85        73,799,301.59
 Subtotal of cash used in operating activities                            1,605,492,636.91    1,941,637,181.86
 Net cash generated from/used in operating activities                       -54,251,797.59      -61,051,973.62
 2. Cash flows from investing activities:
     Proceeds from disinvestment                                            23,459,682.03        12,000,000.00
     Investment income                                                       8,053,269.86        13,407,484.45
   Net proceeds from disposal of fixed assets, intangible assets and
                                                                               295,880.71           612,112.84
 other long-lived assets
     Net proceeds from disposal of subsidiaries or other business units



24
Changchai Company, Limited                                                          Third Quarter Report 2018


     Cash generated from other investing activities
 Subtotal of cash generated from investing activities                      31,808,832.60        26,019,597.29
   Payments for acquisition of fixed assets, intangible assets and
                                                                           27,248,307.93        64,624,007.34
 other long-lived assets
     Payments for investments                                                                    6,000,000.00
     Net increase in pledged loans granted
   Net payments for acquisition of subsidiaries and other business
                                                                                                 1,854,599.33
 units
     Cash used in other investing activities                               27,982,140.70        17,100,000.00
 Subtotal of cash used in investing activities                             55,230,448.63        89,578,606.67
 Net cash generated from/used in investing activities                      -23,421,616.03      -63,559,009.38
 3. Cash flows from financing activities:
     Capital contributions received
      Including: Capital contributions by non-controlling interests to
 subsidiaries
     Increase in borrowings obtained                                       17,000,000.00        44,900,000.00
     Net proceeds from issuance of bonds
     Cash generated from other financing activities
 Subtotal of cash generated from financing activities                      17,000,000.00        44,900,000.00
     Repayment of borrowings                                               15,400,000.00         5,000,000.00
     Payments for interest and dividends                                   18,492,465.30        18,105,490.19
      Including: Dividends paid by subsidiaries to non-controlling
 interests
     Cash used in other financing activities
 Subtotal of cash used in financing activities                             33,892,465.30        23,105,490.19
 Net cash generated from/used in financing activities                      -16,892,465.30       21,794,509.81
 4. Effect of foreign exchange rate changes on cash and cash
 equivalents
 5. Net increase in cash and cash equivalents                              -94,565,878.92     -102,816,473.19
 Add: Cash and cash equivalents, beginning of the period                  325,263,654.43       583,278,129.09
 6. Cash and cash equivalents, end of the period                          230,697,775.51       480,461,655.90


Legal representative: Shi Xinkun          General manager: Zhang Xin     head of financial department: Jiang He

8. Cash Flow Statement of the Company as the Parent for Q1~Q3

                                                                                                      Unit: RMB
                                   Item                                  Q1~Q3 2018            Q1~Q3 2017

25
Changchai Company, Limited                                                          Third Quarter Report 2018


 1. Cash flows from operating activities:
     Proceeds from sale of commodities and rendering of services          1,415,048,015.22   1,708,157,948.66
     Tax rebates                                                            31,526,429.06       24,619,585.42
     Cash generated from other operating activities                          7,685,480.38        6,986,793.79
 Subtotal of cash generated from operating activities                     1,454,259,924.66   1,739,764,327.87
     Payments for commodities and services                                1,235,746,003.49   1,483,506,231.99
     Cash paid to and for employees                                        198,291,459.90      218,784,328.58
     Taxes paid                                                             15,439,986.70       26,440,358.98
     Cash used in other operating activities                                51,499,872.31       68,004,253.14
 Subtotal of cash used in operating activities                            1,500,977,322.40   1,796,735,172.69
 Net cash generated from/used in operating activities                       -46,717,397.74     -56,970,844.82
 2. Cash flows from investing activities:
     Proceeds from disinvestment
     Investment income                                                       7,597,950.00       10,709,750.99
   Net proceeds from disposal of fixed assets, intangible assets and
                                                                               154,889.08          193,991.71
 other long-lived assets
     Net proceeds from disposal of subsidiaries or other business units
     Cash generated from other investing activities
 Subtotal of cash generated from investing activities                        7,752,839.08       10,903,742.70
   Payments for acquisition of fixed assets, intangible assets and
                                                                            25,507,202.39       63,978,352.64
 other long-lived assets
     Payments for investments
   Net payments for acquisition of subsidiaries and other business
                                                                                                26,516,925.27
 units
     Cash used in other investing activities
 Subtotal of cash used in investing activities                              25,507,202.39       90,495,277.91
 Net cash generated from/used in investing activities                       -17,754,363.31     -79,591,535.21
 3. Cash flows from financing activities:
     Capital contributions received
     Increase in borrowings obtained                                        10,000,000.00       20,000,000.00
     Net proceeds from issuance of bonds
     Cash generated from other financing activities
 Subtotal of cash generated from financing activities                       10,000,000.00       20,000,000.00
     Repayment of borrowings                                                   500,000.00
     Payments for interest and dividends                                    17,852,241.03       16,841,229.78



26
Changchai Company, Limited                                                           Third Quarter Report 2018


     Cash used in other financing activities
 Sub-total of cash used in financing activities                             18,352,241.03        16,841,229.78
 Net cash generated from/used in financing activities                        -8,352,241.03        3,158,770.22
 4. Effect of foreign exchange rate changes on cash and cash
 equivalents
 5. Net increase in cash and cash equivalents                              -72,824,002.08      -133,403,609.81
 Add: Cash and cash equivalents, beginning of the period                   272,064,464.71       558,159,090.01
 6. Cash and cash equivalents, end of the period                           199,240,462.63       424,755,480.20


Legal representative: Shi Xinkun         General manager: Zhang Xin      head of financial department: Jiang He

II 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.




27