无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 Stock Code: 000581, 200581 Notice No.: 2018-026 Short Form of the Stock: Weifu High-Tech, Su Weifu-B WEIFU HIGH-TECHNOLOGY GROUP CO., LTD. TEXT of 3Q REPORT 2018 Section I. Important Notes Board of Directors and the Supervisory Committee of Weifu High-Technology Group Co., Ltd. (hereinafter referred to as the Company) and its directors, supervisors and senior executives hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. All directors of the Company are attended the Meeting for quarterly report deliberation. Chen Xuejun, Principal of the Company; Ou Jianbin, Person in Charge of Accounting Work; Ou Jianbin, Person in Charge of Accounting Organization (Accounting Officer) hereby confirm that the Financial Report of the Third Quarterly Report is authentic, accurate and complete. 1 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 Section II. Basic information of Company I. Main accounting data and index Whether it has retroactive adjustment or re-statement on previous accounting data or not □Yes √No Current period-end Period-end of last year Increase/decrease Total assets(RMB) 20,773,232,822.40 20,231,006,224.36 2.68% Net assets attributable to shareholders 15,595,739,954.18 14,835,673,669.75 5.12% of listed company (RMB) Increase/decrease in Increase/decrease in Year-begin to end of comparison with Current period comparison with same the Period year-begin to period of last year Period-end of last year Operating revenue (RMB) 1,898,914,219.62 3.60% 6,859,716,110.61 4.55% Net profit attributable to shareholders 510,387,493.91 -3.29% 2,055,630,198.83 10.89% of the listed company (RMB) Net profit attributable to shareholders of the listed company after deducting 452,953,425.86 -5.90% 1,831,818,927.43 8.42% non-recurring gains and losses(RMB) Net cash flow arising from operating -- -- 506,069,810.46 11.06% activities(RMB) Basic earnings per share 0.51 -3.77% 2.04 10.87% (RMB/Share) Diluted earnings per share 0.51 -3.77% 2.04 10.87% (RMB/Share) Weighted average ROE 3.41% -0.40% 13.33% -0.34% Items and amount of extraordinary profit (gains)/losses √Applicable □Not applicable In RMB Amount from year-begin Item Note to end of the Period Gains/losses from the disposal of non-current asset (including the write-off that accrued for -5,470,321.32 impairment of assets) Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed 30,811,684.32 in quota or ration according to national standards, which are closely relevant to enterprise’s 2 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 business) Gains/losses from entrusted investment or assets management 239,529,818.37 Restoring of receivable impairment provision that tested individually 512,580.00 Other non-operating income and expenditure except for the aforementioned items 357,642.14 Less: impact on income tax 40,267,115.83 Impact on minority shareholders’ equity (post-tax) 1,663,016.28 Total 223,811,271.40 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □ Applicable √ Not applicable In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss. II. Statement of the total shareholders and shares-held of top ten shareholders at end of the Period 1. Common and preferred stockholders with voting rights recover and the top ten share-holding In Share Total common shareholders at the Total preferred stockholders with voting rights recover at the end of 63,367 0 end of report period report period (if applicable) Top ten shareholders Number of share Proportion Amount of Nature of Amount of pledged/frozen Shareholders of shares restricted shareholder shares held State of held shares held Amount share WUXI INDUSTRY DEVELOPMENT GROUP State-owned 20.22% 204,059,398 CO., LTD. corporate ROBERT BOSCH GMBH Foreign corporate 14.16% 142,841,400 Hong Kong Securities Clearing Company Ltd. Foreign corporate 2.68% 27,062,534 (HKSCC) Bank of Communication – HSBC Jixin Double Other 2.45% 24,749,432 Core Strategy Mixed Securities Investment Fund BBH BOS S/A FIDELITY FD - CHINA FOCUS Foreign corporate 1.75% 17,705,754 FD Central Huijin Investment Ltd. State-owned 1.27% 12,811,200 3 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 corporate FIDELITY INVMT TRT FIDELITY INTL Foreign corporate 0.55% 5,568,804 SMALL CAP FUND State-owned Huatai Securities Co., Ltd. 0.54% 5,481,598 corporate Agricultural Bank of China – CIC 500 ETF Other 0.52% 5,294,649 RBC EMERGING MARKETS EQUITY FUND Foreign corporate 0.47% 4,760,065 Particular about top ten shareholders with un-restrict shares held Amount of un-restrict Type of shares Shareholders common shares held Type Amount WUXI INDUSTRY DEVELOPMENT GROUP CO., 204,059,398 RMB common shares 204,059,398 LTD. RMB common shares 115,260,600 ROBERT BOSCH GMBH 142,841,400 Domestically listed foreign shares 27,580,800 Hong Kong Securities Clearing Company Ltd. 27,062,534 RMB common shares 27,062,534 (HKSCC) Bank of Communication – HSBC Jixin Double Core 24,749,432 RMB common shares 24,749,432 Strategy Mixed Securities Investment Fund BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 17,705,754 Domestically listed foreign shares 17,705,754 Central Huijin Investment Ltd. 12,811,200 RMB common shares 12,811,200 FIDELITY INVMT TRT FIDELITY INTL SMALL 5,568,804 Domestically listed foreign shares 5,568,804 CAP FUND Huatai Securities Co., Ltd. 5,481,598 RMB common shares 5,481,598 Agricultural Bank of China – CIC 500 ETF 5,294,649 RMB common shares 5,294,649 RBC EMERGING MARKETS EQUITY FUND 4,760,065 Domestically listed foreign shares 4,760,065 Among the top ten shareholders, there has no associated relationship Explanation on related relationship or concerted between Wuxi Industry Development Group Co., Ltd. and other shareholders, the first largest shareholder of the Company; and they do not action among the abovementioned shareholders belong to the consistent actionist regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company. Explanation on top 10 shareholders involving margin Not applicable business (if applicable) (see note 4) Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period □ Yes √ No The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period. 2. Total of shareholders with preferred stock held and the top ten shareholdings □Applicable √Not applicable 4 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 Section III. Important events I. Particular about major changes from items of main accounting statements and financial indexes as well as reasons √ Applicable □Not applicable (I) Changes of items of balance sheet and cause analysis: 1. Other account receivable: increased 13.9407 million Yuan over that of beginning of the year with 185.96% up, mainly due to the increase of intercourse funds between units; 2. Construction in progress: increased 81.4001 million Yuan over that of beginning of the year with 81.12% up, mainly because equipment for technical improvement increased; 3. Short-term loans: increased 104.7551 million Yuan over that of beginning of the year with 43.11% up, mainly because loans from subsidiary increased; 4. Taxes payable: decreased 36.9732 million Yuan over that of beginning of the year with 39.39% down, mainly because income tax payables declined; 5. Deferred income tax liability: decreased 14.9778 million Yuan over that of beginning of the year with 86.05% down, mainly due to the sales of financial assets available for sale and decline of fair value; 6. Other comprehensive income: decreased 84.4024 million Yuan over that of beginning of the year with 96.83% down, mainly because the fair value of financial assets available for sale declined (II) Changes of items of income statement and cause analysis: 1. Sales expenses: increased 39.08 million Yuan from last period, mainly because guarantee fee and salary for sales increased on a y-o-y basis; 2. Financial expenses: decreased 16.03 million Yuan from last period, mainly because exchange earnings and interest income increased on a y-o-y basis (III) Changes of items of cash flow statement and cause analysis: 1. Net cash flow arising from investment activity: 2400.72 million Yuan declined as out-flow compared with same period of last year, mainly because recovery of financial products due increased on a y-o-y basis; 2. Net cash flow arising from financing activity: 556.93 million Yuan increased as out-flow compared with same period of last year, mainly because dividend distribution increased on a y-o-y basis. II. Progress of significant events, their influences, and analysis and explanation of their solutions √ Applicable □Not applicable (I) Proposed application for listing in the national middle and small enterprises stock transfer system by the controlling subsidiary Weifu Tianli On 25 October 2016, the 8th board of directors of the Company held the 9th meeting to consider and approve the 5 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 proposal relating to proposed application for listing in the national middle and small enterprises stock transfer system by the controlling subsidiary Ningbo Weifu Tianli Supercharging Technique Co., Ltd. on 30 December 2016, Weifu Tianli was served with the notice of acceptance from the National Middle and Small Enterprise Stock Transfer System Company Limited (GP2016120120). The relevant announcements (No.: 2016-020, No.: 2016-023 and 2017-001) were published on China Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchao Information Website (http://www.cninfo.com.cn). At the current stage, this matter is in the progress of consideration and approval. (II) Parts of the joint-stock enterprise’s equity held by the Company freeze 1. On 6 March 2017, the Company received litigation documents mailed by Shenzhen Intermediate People’s Court of Guangdong Province (hereinafter referred to as Shenzhen Intermediate People’s Court). The documents were concerning about the dispute case that the plaintiff applicant China Cinda Asset Management Co., Ltd. Shenzhen Branch appealed the respondent Weifu High Technology and other seven respondents and the third party Shenzhen Hejun Venture Holding Co., Ltd. (hereinafter referred to as Hejun Company) damaged the interests of corporate creditors, two cases are included in total. After civil ruling as No.(2016)Y03MC2490 and No.(2016) Y03MC2492 from Shenzhen Intermediate People's Court, the assets under the name of above said eight defendants 217 million Yuan in total are being seal up, seized or freeze. Ended as the reporting period, the 4.71 million shares of Miracle Logistics and 11,739,102 shares of SDEC Stock held by the Company has been freeze. The first trial open dated 24 September 2017, and further courts will give until further notice. 2. The Company has applied to the Futian Court for compulsory liquidation of Hejun Company. Futian Court has made a civil ruling ((2017) Yue 0304 QS No. 5) which ruled to execute compulsory liquidation to Hejun Company. The Company will actively cooperate with the court to do the relevant liquidation work and safeguard the legitimate rights and interests of the Company. (III) In accordance with the 15th session of 8th BOD held on 26 March 2018, the Company plans to invest on the E-round preferred stock issued by Protean Holdings Corp. and a Sino-foreign joint venture will establishes by the two parties in China. According to the investment cooperation agreement, the company paid the initial investment of 24 million US dollars on May 21, 2018. The company obtained the equity certificate of subscribing 10,212,765 shares of E-round preferred stock issued by Protean and became a shareholder of the Protean E-round preferred stock with the equity certificate number of Number E-1, which certified that the Company was the stock holder of 10,212,765 shares under the name of Protean Company. Relevant works with joint venture concerned are still in smooth process. Disclosure Overview Query index for interim notice date Proposed application for listing in 2016-10-27 (Notice No. 2016-023) Published on Juchao Website (www.cninfo.com.cn) the national middle and small enterprises stock transfer system by 2017-01-07 (Notice No. 2017-001) Published on Juchao Website (www.cninfo.com.cn) the controlling subsidiary Weifu Tianli 6 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 Parts of the joint-stock enterprise’s 2017-03-08 (Notice No. 2017-002) Published on Juchao Website (www.cninfo.com.cn) equity held by the Company freeze 2017-12-06 (Notice No. 2017-023) Published on Juchao Website (www.cninfo.com.cn) The Company invest on the E-round 2018-03-28 (Notice No. 2018-003) Published on Juchao Website (www.cninfo.com.cn) preferred stock issued by Protean Holdings Corp. and a Sino-foreign 2018-05-30 (Notice No. 2018-014) Published on Juchao Website (www.cninfo.com.cn) joint venture will establishes by the two parties in China III. Commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period □ Applicable √ Not applicable There are no commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period. IV. Estimation of operation performance for year of 2018 Estimation of accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation of reason □Applicable √Not applicable V. Particular about security investment √ Applicable □Not applicable In RMB Book Changes Curre Profit Account value at in fair Book Variety Short Cumulativ nt and loss Code of Initial ing the value of Current value at Sourc of form of e fair value purch in the Accountin securiti investm measure beginni the sales the end e of securitie securitie ent cost changes in ase Reporti g subject es ment ng of current amount of the stock s s equity amou ng model the profit period nt Period period and loss Domesti Financial Measure c and 199,208 186,966 -52,859, -2,897,858 37,880, -52,805, 105,848 assets Own 600841 SDEC d by fair foreign ,000.00 ,000.00 532.00 .24 000.00 846.59 ,940.00 available funds value stocks for sales Domesti Financial Miracle Measure c and 69,331, 79,410, -37,632, 5,664,952. -37,397, 41,777, assets Own 002009 Logistic d by fair foreign 500.00 600.00 900.00 50 400.00 700.00 available funds s value stocks for sales 7 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 268,539 266,376 -90,492, 2,767,094. 37,880, -90,203, 147,626 Total -- 0.00 -- -- ,500.00 ,600.00 432.00 26 000.00 246.59 ,640.00 Disclosure date of 2012-03-24 securities investment 2013-06-04 approval from the Board VI. Trust financing √ Applicable □Not applicable In 10 thousand Yuan Type Capital resources Amount for entrust Balance un-expired Overdue amount Bank financing product Own funds 348,000 257,000.00 0 Trust financing products Own funds 112,790 97,808.00 0 Other Own funds 166,150 101,546.87 0 Total 626,940 456,354.87 0 Details of the single major amount, or high-risk trust investment with low security, poor fluidity and non-guaranteed: √ Applicable □Not applicable In 10 thousand Yuan Amou Whet Summ nt of her ary of Ref Actu reserve Wheth has the eren al Capita Anticipa for er entru items Truste Sou ce colle l Criteri ted Actual devalu approv st and e rce S E ann cted Trustee invest a for income gains/los ation ed by finan relate institut Type Amount of tart nd ual gains type ment fixing (if ses in of legal ce d ion r fun date date rate /losse purpos reward applicab period withdr proced plan query name ds of s in e le) awing ure in index retu perio (if (Y/N) the (if rn d applica futur applic ble) e able) Refere nce Bank Bank Colle non-gua Ow annual financi financi cted ranteed n 2018- 2019- ized 5.00 10,012.6 10,012.6 Bank al 581,000 al by Y Y floating fun 01-03 04-08 yield % 2 2 produc produc agree income ds by ts ts ment agree ment Trust Non-gua Ow Collec Refere Colle 2018- 2019- 6.00 Trust financi ranteed 143,000 n tive nce 4,465.24 4,465.24 cted Y Y 01-04 01-28 % ng floating fun trust annual by 8 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 produc income ds schem ized agree ts e yield ment by agree ment Refere Fund nce Colle Non-gua Ow produc annual Others cted ranteed n 2018- 2019- ts with ized 7.00 (funds, Other 92,000 7,738.04 7,738.04 by Y Y floating fun 01-04 09-09 fixed yield % etc.) agree income ds incom by ment e agree ment Total 816,000 -- -- -- -- -- -- 22,215.9 22,215.9 -- -- -- -- Entrust financial expected to be unable to recover the principal or impairment might be occurred □ Applicable √ Not applicable VII. Particulars about derivatives investment □ Applicable √ Not applicable The Company had no derivatives investment in Period. VIII. Registration form of receiving research, communication and interview in the report period √ Applicable □Not applicable Type of Date Method Index for the interview and research investors Form 1 July to 30 Written The Company answered 36 questions for investors online through the investor relations Other September 2018 inquiry interactive platform(http://irm.p5w.net/dqhd/sichuan/) Telephone Form 1 July to 30 Basic condition of the Company and views on market in 2017, communication with communicat Other September 2018 investors by telephone more than 50 ion IX. External security against the rules □ Applicable √ Not applicable The Company has no external security against the rules in the Period 9 无锡威孚高科技集团股份有限公司 2018 年第三季度报告正文 X. Controlling shareholders' and its related party's non-business capital occupying of the listed company □ Applicable √ Not applicable There are no controlling shareholders' and its related party's non-business capital occupying of the listed company. Board of Directors of Weifu High-Technology Group Co., Ltd. 30 Oct. 2018 10