CSG HOLDING CO., LTD. THE THIRD QUARTER REPORT 2017 Chairman of the Board: CHEN LIN October 2017 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Section I. Important Notice Board of Directors and the Supervisory Committee of CSG Holding 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 facticity, accuracy and completeness of the whole contents. All directors were present the meeting of the Board for deliberating the Third Quarter Report of 2017 of the Company in person. Ms. Chen Lin, Chairman of the Board, Mr. Pan Yonghong, responsible person in charge of accounting and Ms.Wang Wenxin, principal of the financial department (accounting officer) confirm that the Financial Report enclosed in the Third Quarter Report of 2017 of the Company is true, accurate and complete. This report is prepared both in Chinese and English. Should there be any inconsistency between the Chinese and English versions, the Chinese version shall prevail. 1 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Section II. The Basic Information of the Company I. Main accounting data and financial indices Whether retrospective adjustment has been carried out on financial reports of previous periods or not □Yes √ No Increase/decrease in The end of current period The end of last year comparison with the end of last year Total assets (RMB ) 18,913,831,052.00 16,979,235,630.00 11.39% Net assets attributable to shareholders of the Company 8,345,605,690.00 7,812,335,004.00 6.83% (RMB ) Increase/decrease in Increase/decrease in comparison with the From 1 January to 30 Current period comparison with the same period of last September 2017 same period of 2016 year Operating revenues (RMB ) 2,846,570,536.00 24.09% 7,790,908,397.00 19.45% Net profit attributable to shareholders of the Company 318,019,208.00 28.23% 711,011,371.00 -0.54% (RMB ) Net profit attributable to shareholders of the Company after 278,181,102.00 25.57% 639,126,346.00 -0.92% deducting extraordinary gains and losses (RMB ) Net cash flows from operating -- -- 1,788,098,692.00 12.30% activities (RMB ) Basic earnings per share 0.15 25.00% 0.33 -2.94% (RMB/Share) Diluted earnings per share 0.15 25.00% 0.33 -2.94% (RMB/Share) Weighted average ROE (%) 3.91% 0.79% 8.74% -0.25% Items and amounts of extraordinary profit (gains)/loss √Applicable □ Not applicable Unit: RMB Amount from the beginning of year to Item Note the end of the report period 2 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Gains/losses from the disposal of non-current asset (including the 243,956.00 write-off that accrued for impairment of assets) Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to 53,962,640.00 national standards, which are closely relevant to enterprise’s business) Gains on disposal of available-for-sale financial assets, gains and losses from change of fair values of held-for-transaction financial assets and financial liabilities except for the effective hedge 427,636.00 business related to normal business of the Company, and investment income from disposal of transactional financial assets and liabilities and financial assets available for sale Other non-operating income and expenditure except for the 31,651,965.00 aforementioned items Less: Impact on income tax 12,997,490.00 Impact on minority shareholders’ equity (post-tax) 1,403,682.00 Total 71,885,025.00 -- Explain reasons for 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, √Applicable □ Not applicable Item Amount involved (RMB) Gains on disposal of available-for-sale financial assets 427,636.00 II. Total of shareholders at the end of the report period and particulars about shareholdings of the top ten shareholders 1. Particulars about the total number of common shareholders and preference shareholders with voting rights recovered as well as the shareholdings of the top ten shareholders Unit: Share Total number of common shareholders Total number of preference shareholders with voting rights 160,427 0 at the end of the report period recovered at end of report period (if applicable) Particulars about the shareholdings of the top ten shareholders Number of share Proportion Amount of Nature of Amount of pledged/frozen Name of shareholder of shares restricted shareholder shares held Share held (%) shares held Amount status Domestic non Foresea Life Insurance Co., Ltd. – Haili Niannian 15.45% 368,685,276 0 state-owned legal 3 CSG HOLDING CO., LTD. The Third Quarter Report 2017 person Domestic non Foresea Life Insurance Co., Ltd. – Universal state-owned legal 3.92% 93,616,606 0 Insurance Products person Domestic non Shenzhen Jushenghua Co., Ltd. state-owned legal 2.87% 68,484,938 0 Pledged 68,484,915 person Domestic non Foresea Life Insurance Co., Ltd. – Own Fund state-owned legal 2.15% 51,197,756 0 person State-owned legal Central Huijin Asset Management Ltd. 1.92% 45,782,995 0 person China Galaxy International Securities (Hong Foreign legal 1.35% 32,176,044 0 Kong) Co., Limited person State-owned legal China Merchants Securities (HK) Co., Limited 1.09% 26,108,208 0 person State-owned legal China North Industries Corporation 0.99% 23,600,000 0 person Domestic non Shenzhen International Holdings (SZ) Limited state-owned legal 0.96% 23,000,000 0 person BBH A/C VANGUARD EMERGING Foreign legal 0.64% 15,272,911 0 MARKETS STOCK INDEX FUND person Particulars about top ten shareholders with unrestricted shares held Type of shares Name of shareholder Amount of unrestricted shares held Type Amount Foresea Life Insurance Co., Ltd. – Haili Niannian 368,685,276 RMB ordinary shares 368,685,276 Foresea Life Insurance Co., Ltd. – Universal 93,616,606 RMB ordinary shares 93,616,606 Insurance Products Shenzhen Jushenghua Co., Ltd. 68,484,938 RMB ordinary shares 68,484,938 Foresea Life Insurance Co., Ltd. – Own Fund 51,197,756 RMB ordinary shares 51,197,756 Central Huijin Asset Management Ltd. 45,782,995 RMB ordinary shares 45,782,995 China Galaxy International Securities (Hong Domestically listed 32,176,044 32,176,044 Kong) Co., Limited foreign shares Domestically listed China Merchants Securities (HK) Co., Limited 26,108,208 26,108,208 foreign shares China North Industries Corporation 23,600,000 RMB ordinary shares 23,600,000 Shenzhen International Holdings (SZ) Limited 23,000,000 RMB ordinary shares 23,000,000 4 CSG HOLDING CO., LTD. The Third Quarter Report 2017 BBH A/C VANGUARD EMERGING Domestically listed 15,272,911 15,272,911 MARKETS STOCK INDEX FUND foreign shares Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, Foresea Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related Statement on associated relationship or consistent legal person of Foresea Life Insurance Co., Ltd, which held 31,769,094 shares action among the above shareholders: via China Galaxy International Securities (Hong Kong) Co., Limited. Except for the above-mentioned shareholders, It is unknown whether other shareholders belong to related party or have associated relationship regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies. Whether the top ten shareholders or top ten shareholders with unrestricted shares carried out buy back deals in the report period □Yes √ No There were no buy back deals carried out by the top ten shareholders or top ten shareholders with unrestricted shares held in the report period. 2. Total number of preference shareholders and particulars about the shareholdings of the top ten preference shareholders □Applicable √ Not applicable 5 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Section III. Important events I. Particulars and explanations about significant changes in main accounting statements and financial indices √Applicable □Not applicable Unit: RMB Increased/Decreased Item of balance sheet Note 30 September 2017 31 December 2016 Rate amount Monetary capital (1) 1,813,992,086 586,803,505 1,227,188,581 209% Prepayments (2) 136,813,682 95,733,132 41,080,550 43% Other receivables (3) 44,597,554 33,229,149 11,368,405 34% Inventories (4) 699,223,499 477,780,925 221,442,574 46% Long-term deferred (5) 11,385,720 975,660 10,410,060 1067% expenses Notes payable (6) 177,701,622 20,000,000 157,701,622 789% Advance payment (7) 237,939,772 142,330,979 95,608,793 67% Other payables (8) 477,515,523 188,321,450 289,194,073 154% Long-term payables (9) 1,272,296,270 - 1,272,296,270 - Special reserve (10) 3,206,127 5,843,473 (2,637,346) -45% Other comprehensive (11) 2,707,049 4,653,971 (1,946,922) -42% income Item of income From January to From January to Increased/Decreased Note Rate statement September 2017 September 2016 amount Taxes and surcharges (12) (93,649,001) (39,641,644) (54,007,357) 136% Assets impairment loss (13) (2,971,645) (2,012,347) (959,298) 48% Investment income (14) 427,638 (14,264,359) 14,691,997 - Other income (15) 24,459,278 - 24,459,278 - Non-operating expenses (16) (1,877,014) (778,905) (1,098,109) 141% Minority interests (17) 10,810,974 3,760,892 7,050,082 187% Note: (1) The increase in monetary capital was mainly due to increasing monetary capital for repayment of debts. (2) The increase in prepayments was mainly due to the increase in prepaid materials. (3) The increase in other receivables was mainly attributable to the increase in margin receivable. (4)Inventories increased mainly because Hebei CSG was transferred to commercial operation and the stocking increased. 6 CSG HOLDING CO., LTD. The Third Quarter Report 2017 (5) The increase in long-term deferred expenses was mainly due to the increase in financial leasing fee to be amortized for the current period and the lower balance of the previous period. (6) The increase in notes payable was mainly due to the increase in the newly opened bills and the lower balance of the previous period. (7) The increase in advance payment was mainly due to the increase in advances from customers. (8) The increase in other payables was mainly attributable to the increase in interestless borrowings from shareholders. (9)The increase in long-term payables was mainly due to the increase in the amount of financial lease payments. (10)The decrease of special reserve was mainly due to the increase of input in safety production. (11) The decrease in other comprehensive income was mainly due to the decrease in the translation of foreign currency statements. (12) Taxes and surcharges increased mainly because the "management fee - tax" subject was reclassified to the "tax and surcharges" subject in the current period. (13) The increase in assets impairment loss was mainly due to the increase in accounts receivable. (14)The increase in investment income was mainly attributable to the use of cost method by Shenzhen Display, a subsidiary of the Company, which was accounted for using equity method in the previous period. (15) The increase in other income was mainly attributable to the reclassification of non-operating income by accounting standards. (16) The increase in non-operating expenses was mainly due to the slight increase in the current period and the lower balance of the previous period. (17) The increase in minority interests was mainly due to the increase in net profit for the current period. II. The progress of material events and the impact as well as the analysis of solutions √Applicable □Not applicable 1. Public Issuance of Corporate Bonds to Qualified Investors On Feb. 13, 2017, the interim meeting of the 7th session of the board of directors of the Company deliberated and approved the Proposal on Public Issuance of Corporate Bonds to Qualified Investors. The Company proposed to issue corporate bonds to qualified investors with the total face value no more than RMB 2 billion (including RMB 2 billion), and the valid period no more than 10 years (including 10 years).This proposal was deliberated and approved by the Second Extraordinary Shareholders’ General Meeting held on Mar. 2, 2017. For details, please refer to the Announcement on Public Issuance of Corporate Bonds disclosed on Feb. 14, 2016 (Announcement No.: 2017-011). 2. Short-term Financing Bills On Dec.14, 2016, the second extraordinary shareholders’ general meeting of 2016 of CSG deliberated and approved the proposal of the offering and registration of short-term financing bills, and agreed the Company’s registration and issuance of short-term financing bills with a total amount of RMB 2.7 billion, which could be issued by stages within period of validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. However, the term of each issue shall not be longer than one year and the registered quota shall not exceed 40 percent of the Company’s net assets. For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn. 3. Medium-term notes On 10 December 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltd deliberated and approved the proposal of application for registeration and issuance of medium term notes with total amount of RMB 1.2 billion at 7 CSG HOLDING CO., LTD. The Third Quarter Report 2017 most. On 21 May 2015, National Association of Financial Market Institutional Investors (NAFMII) held the 32nd registration meeting of 2015, in which NAFMII decided to accept the registration of the Company’s medium term notes, amounting to RMB 1.2 billion and valid for two years. China Merchants Bank Co., Ltd. and Shanghai Pudong Development Bank Co., Ltd. were joint lead underwriters of these medium term notes which could be issued by stages within period of validity of the registration.On 10 July 2015, the Company issued the first batch of medium term notes with total amount of RMB 1.2 billion and valid term of 5 years at the issuance rate of 4.94%, which will be redeemed on 14 July 2020. On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal of application for registration and issuance of medium term notes with total amount of RMB 0.8 billion, which could be issued by stages within period of validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. On May 22, 2017, the Shareholders’ General Meeting of 2016 of CSG deliberated and approved the proposal of application for registration and issuance of medium term notes with total amount of RMB 1 billion, which could be issued by stages within period of validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn. III. Commitments made by the actual controller, the shareholders, the related parties, the purchasers and the Company which failed to be fulfilled in time during the report period □ Applicable √Not applicable There were no commitments made by the actual controller, the shareholders, the related parties, the purchasers or the Company which failed to be fulfilled in time during the report period. IV. Prediction of business performance of 2017 Alert of loss or significant change in accumulative net profit from the beginning of year to the end of the next report period or compared with the same period of last year, and statement of causations. □ Applicable √Not applicable V. Securities investment □ Applicable √Not applicable The Company had no securities investment in the report period. VI. Derivatives investment □ Applicable √Not applicable The Company had no derivatives investment in the report period. VII. Reception of research, communication and interview in the report period □ Applicable √Not applicable The Company had no reception of research, communication or interview in the report period. 8 CSG HOLDING CO., LTD. The Third Quarter Report 2017 VIII. Particulars about illegal external guarantee □ Applicable √Not applicable The Company had no illegal external guarantee in the report period. IX. Particulars about non-operating fund of listed company which is occupied by controlling shareholder and its affiliated enterprises □ Applicable √ Not applicable In the report period, it did not exist that non-operating fund of listed company was occupied by controlling shareholder or its affiliated enterprises. X. Performance of social responsibility for targeted poverty alleviation There was no targeted poverty alleviation carried out in the third quarter of the year. 9 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Section IV. Financial Report (I) Financial Statements 1. Consolidated Balance Sheet Prepared by CSG Holding Co., Ltd. Unit: RMB Item Ending balance Beginning balance Current asset: Monetary capital 1,813,992,086.00 586,803,505.00 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable 451,639,877.00 456,347,237.00 Account receivable 758,405,366.00 627,985,983.00 Prepayment 136,813,682.00 95,733,132.00 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other receivables 44,597,554.00 33,229,149.00 Repurchasing of financial assets Inventories 699,223,499.00 477,780,925.00 Assets held for sales Non-current asset due in 1 year Other current asset 252,885,021.00 199,905,577.00 Total of current asset 4,157,557,085.00 2,477,785,508.00 Non-current assets Loans and payment on other’s behalf disbursed 10 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Available-for-sale financial asset Expired investment in possess Long-term receivables Long-term equity investment Investment real estates Fixed assets 11,780,940,567.00 11,457,972,991.00 Construction in process 1,308,381,089.00 1,362,096,377.00 Engineering goods Fixed asset disposal Production physical assets Gas & petrol Intangible assets 1,041,511,092.00 1,032,458,977.00 Development expenditure 54,651,376.00 66,927,714.00 Goodwill 397,392,156.00 397,392,156.00 Long-term prepaid expenses 11,385,720.00 975,660.00 Differed income tax asset 81,175,884.00 96,451,854.00 Other non-current asset 80,836,083.00 87,174,393.00 Total of non-current assets 14,756,273,967.00 14,501,450,122.00 Total of assets 18,913,831,052.00 16,979,235,630.00 Current liabilities Short-term loans 2,923,324,500.00 4,017,869,662.00 Loan from Central Bank Deposit received and hold for others Call loan received Financial liabilities measured at fair value with variations accounted into Derivative financial liabilities Notes payable 177,701,622.00 20,000,000.00 Accounts payable 1,366,106,933.00 1,169,869,370.00 Prepayment received 237,939,772.00 142,330,979.00 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 194,979,060.00 193,372,239.00 Tax payable 118,978,726.00 115,592,616.00 11 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Interest payable 68,055,118.00 78,225,904.00 Dividend payable Other payables 477,515,523.00 188,321,450.00 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Liabilities held for sales Non-current liabilities due within one year 1,246,512,613.00 1,029,340,000.00 Other current liability 300,000.00 300,000.00 Total of current liability 6,811,413,867.00 6,955,222,220.00 Non-current liabilities Long-term borrowings 1,734,120,000.00 1,438,660,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable 1,272,296,270.00 Long-term payable employees’ remuneration Special payable Anticipated liabilities Differed income 398,223,071.00 422,993,254.00 Differed income tax liability 23,502,507.00 29,749,137.00 Other non-recurring liabilities Total of non-current liabilities 3,428,141,848.00 1,891,402,391.00 Total of liability 10,239,555,715.00 8,846,624,611.00 Owners’ equity Share capital 2,386,635,893.00 2,075,335,560.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 983,779,003.00 1,260,702,197.00 Less: Shares in stock Other comprehensive income 2,707,049.00 4,653,971.00 12 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Special reserves 3,206,127.00 5,843,473.00 Surplus reserves 888,850,230.00 888,850,230.00 Common risk provision Undistributed profit 4,080,427,388.00 3,576,949,573.00 Total of owner’s equity belong to the 8,345,605,690.00 7,812,335,004.00 parent company Minor shareholders’ equity 328,669,647.00 320,276,015.00 Total of owners’ equity 8,674,275,337.00 8,132,611,019.00 Total of liability and owners’ equity 18,913,831,052.00 16,979,235,630.00 Legal representative: Chen Lin Principal in charge of accounting: Pan Yonghong Head of accounting department: Wang Wenxin 2. Balance Sheet of the Parent Company Unit: RMB Item Ending balance Beginning balance Current asset: Monetary capital 1,148,643,424.00 302,841,481.00 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable Account receivable Prepayment 118,166.00 16,880.00 Interest receivable Dividend receivable Other receivables 2,692,358,457.00 3,863,121,029.00 Inventories Assets held for sales Non-current asset due in 1 year Other current asset Total of current asset 3,841,120,047.00 4,165,979,390.00 Non-current assets Available-for-sale financial asset 13 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Expired investment in possess Long-term receivables 2,003,645,000.00 2,003,645,000.00 Long-term equity investment 4,790,440,632.00 4,790,440,632.00 Investment real estates Fixed assets 23,269,424.00 26,073,848.00 Construction in process Engineering goods Fixed asset disposal Production physical assets Gas & petrol Intangible assets 1,054,769.00 1,393,454.00 Development expenditure Goodwill Long-term prepaid expenses Differed income tax asset Other non-current asset 1,023,096.00 Total of non-current assets 6,819,432,921.00 6,821,552,934.00 Total of assets 10,660,552,968.00 10,987,532,324.00 Current liabilities Short-term loans 1,900,000,000.00 3,495,163,044.00 Financial liabilities measured at fair value with variations accounted into Derivative financial liabilities Notes payable Accounts payable 34,528.00 317,874.00 Prepayment received Employees’ wage payable 42,549,933.00 18,380,010.00 Tax payable 1,917,636.00 1,804,568.00 Interest payable 11,481,863.00 3,794,646.00 Dividend payable Other account payable 1,740,089,791.00 240,593,894.00 Liabilities held for sales Non-current liabilities due within one year 1,000,000,000.00 1,000,000,000.00 Other current liability 14 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Total of current liability 4,696,073,751.00 4,760,054,036.00 Non-current liabilities Long-term borrowings 1,380,000,000.00 1,380,000,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable Long-term payable employees’ remuneration Special payable Anticipated liabilities Differed income 15,903,470.00 12,035,040.00 Differed income tax liability Other non-recurring liabilities Total of non-current liabilities 1,395,903,470.00 1,392,035,040.00 Total of liability 6,091,977,221.00 6,152,089,076.00 Owners’ equity Share capital 2,386,635,893.00 2,075,335,560.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 1,128,495,950.00 1,405,529,511.00 Less: Shares in stock Other comprehensive income Special reserves Surplus reserves 903,395,590.00 903,395,590.00 Undistributed profit 150,048,314.00 451,182,587.00 Total of owners’ equity 4,568,575,747.00 4,835,443,248.00 Total of liability and owners’ equity 10,660,552,968.00 10,987,532,324.00 3. Consolidated Income Statement Unit: RMB Item Balance of this period Balance of last period I. Total revenue 2,846,570,536.00 2,293,975,948.00 15 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Incl. Business income 2,846,570,536.00 2,293,975,948.00 Interest income Insurance fee earned Fee and commission received II. Total business cost 2,513,603,071.00 2,028,376,616.00 Incl. Business cost 2,091,578,265.00 1,653,218,094.00 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Net insurance policy reserves provided Insurance policy dividend paid Reinsurance expenses Tax and surcharges 31,903,226.00 16,256,972.00 Sales expense 87,244,775.00 75,980,642.00 Administrative expense 210,018,993.00 205,673,948.00 Financial expenses 90,994,862.00 74,309,241.00 Asset impairment loss 1,862,950.00 2,937,719.00 Plus: gains from change of fair value (“- “for loss) Investment gains (“-“ for loss) 427,638.00 Incl. Investment gains from affiliates Exchange gains (“-“ for loss) Other gains 785,044.00 III. Operating profit (“-“ for loss) 334,180,147.00 265,599,332.00 Plus: non-operating income 48,031,745.00 32,054,790.00 Incl. Income from disposal of non- 325,119.00 1,168,444.00 current assets Less: non-operating expenses 1,144,422.00 117,277.00 Incl. Loss from disposal of non-current 9,407.00 52,978.00 assets IV. Gross profit (“-“ for loss) 381,067,470.00 297,536,845.00 Less: Income tax expenses 59,459,173.00 44,177,962.00 V. Net profit (“-“ for net loss) 321,608,297.00 253,358,883.00 Net profit attributable to the owners of 318,019,208.00 248,016,059.00 16 CSG HOLDING CO., LTD. The Third Quarter Report 2017 parent company Minor shareholders’ equity 3,589,089.00 5,342,824.00 VI. Net amount of other gains after tax -870,658.00 197,502.00 Net amount of other gains after tax attributable to owners of parent -870,658.00 197,502.00 company (I) Other comprehensive income that will not be reclassified into gains/losses afterward 1. Change of net liability or asset of beneficiary plan from recalculating 2. The share of comprehensive income in invested entities under equity method which can not be reclassified into profit or loss (II) Other comprehensive income items that will be reclassified into gains/losses -870,658.00 197,502.00 in the subsequent accounting period 1. The share of comprehensive income in invested entities under equity method which can be reclassified into profit or loss afterward 2.Gains and losses from changes in fair value available for sale financial assets 3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency -870,658.00 197,502.00 financial statements 6.Other Net of profit of other comprehensive income attributable to Minority shareholders’ equity VII. Total of misc. incomes 320,737,639.00 253,556,385.00 Total of misc. incomes attributable to 317,148,550.00 248,213,561.00 the owners of the parent company Total misc gains attributable to the 3,589,089.00 5,342,824.00 17 CSG HOLDING CO., LTD. The Third Quarter Report 2017 minor shareholders VIII. Earnings per share: (I) Basic earnings per share 0.15 0.12 (II) Diluted earnings per share 0.15 0.12 Legal representative: Chen Lin Principal in charge of accounting: Pan Yonghong Head of accounting department: Wang Wenxin 4. Income Statement of the Parent Company Unit: RMB Item Balance of this period Balance of last period I. Revenue 15,038,839.00 8,473,838.00 Less: business cost Tax and surcharges 131,076.00 Sales expense Administrative expense 22,633,169.00 33,376,309.00 Financial expenses 20,017,263.00 4,164,111.00 Asset impairment loss 78,215.00 1,429.00 Plus: gains from change of fair value (“- “for loss) Investment gains (“-“ for loss) 2,011,500.00 5,806,369.00 Incl. Investment gains from affiliates Other gains II. Operating profit (“-“ for loss) -25,809,384.00 -23,261,642.00 Plus: non-operating income 402,190.00 433,427.00 Incl. Income from disposal of non- 720.00 current assets Less: non-operating expenses 816,000.00 Incl. Loss from disposal of non-current assets III. Gross profit (“-“ for loss) -26,223,194.00 -22,828,215.00 Less: Income tax expenses IV. Net profit (“-“ for net loss) -26,223,194.00 -22,828,215.00 V. Net amount of other gains after tax (I) Other comprehensive income that will not be reclassified into gains/losses 18 CSG HOLDING CO., LTD. The Third Quarter Report 2017 afterward 1. Change of net liability or asset of beneficiary plan from recalculating 2. The share of comprehensive income in invested entities under equity method which can not be reclassified into profit or loss (II) Other comprehensive income items that will be reclassified into gains/losses in the subsequent accounting period 1. The share of comprehensive income in invested entities under equity method which can be reclassified into profit or loss afterward 2.Gains and losses from changes in fair value available for sale financial assets 3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial statements 6.Other VI. Total of comprehensive income -26,223,194.00 -22,828,215.00 VII. Earnings per share: (I) Basic earnings per share (II) Diluted earnings per share 5. Consolidated income statement for Jan.-Sept. 2017 Unit: RMB Item Balance of this period Balance of last period I. Total revenue 7,790,908,397.00 6,522,141,590.00 Incl. Business income 7,790,908,397.00 6,522,141,590.00 Interest income Insurance fee earned Fee and commission received 19 CSG HOLDING CO., LTD. The Third Quarter Report 2017 II. Total business cost 7,016,245,101.00 5,748,510,149.00 Incl. Business cost 5,829,092,727.00 4,730,036,597.00 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Net insurance policy reserves provided Insurance policy dividend paid Reinsurance expenses Tax and surcharges 93,649,001.00 39,641,644.00 Sales expense 243,589,506.00 204,545,473.00 Administrative expense 612,573,333.00 564,611,454.00 Financial expenses 234,368,889.00 207,662,634.00 Asset impairment loss 2,971,645.00 2,012,347.00 Plus: gains from change of fair value (“- “for loss) Investment gains (“-“ for loss) 427,638.00 -14,264,359.00 Incl. Investment gains from affiliates -14,264,359.00 Exchange gains (“-“ for loss) Other gains 24,459,278.00 III. Operating profit (“-“ for loss) 799,550,212.00 759,367,082.00 Plus: non-operating income 64,061,341.00 82,093,154.00 Incl. Income from disposal of non- 382,853.00 1,417,086.00 current assets Less: non-operating expenses 1,877,014.00 778,905.00 Incl. Loss from disposal of non-current 138,897.00 72,962.00 assets IV. Gross profit (“-“ for loss) 861,734,539.00 840,681,331.00 Less: Income tax expenses 139,912,194.00 122,021,126.00 V. Net profit (“-“ for net loss) 721,822,345.00 718,660,205.00 Net profit attributable to the owners of 711,011,371.00 714,899,313.00 parent company Minor shareholders’ equity 10,810,974.00 3,760,892.00 VI. Net amount of other comprehensive -1,946,922.00 705,555.00 income after tax 20 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Net amount of other gains after tax attributable to owners of parent -1,946,922.00 705,555.00 company (I) Other comprehensive income that will not be reclassified into gains/losses afterward 1. Change of net liability or asset of beneficiary plan from recalculating 2. The share of comprehensive income in invested entities under equity method which can not be reclassified into profit or loss (II) Other comprehensive income items that will be reclassified into gains/losses -1,946,922.00 705,555.00 in the subsequent accounting period 1. The share of comprehensive income in invested entities under equity method which can be reclassified into profit or loss afterward 2.Gains and losses from changes in fair value available for sale financial assets 3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency -1,946,922.00 705,555.00 financial statements 6.Other Net of profit of other comprehensive income attributable to Minority shareholders’ equity VII. Total of comprehensive income 719,875,423.00 719,365,760.00 Total of misc. incomes attributable to 709,064,449.00 715,604,868.00 the owners of the parent company Total misc gains attributable to the 10,810,974.00 3,760,892.00 minor shareholders VIII. Earnings per share: (I) Basic earnings per share 0.33 0.34 21 CSG HOLDING CO., LTD. The Third Quarter Report 2017 (II) Diluted earnings per share 0.33 0.34 6. Income statement of the Parent Company for Jan.-Sept. 2017 Unit: RMB Item Balance of this period Balance of last period I. Revenue 42,334,105.00 9,551,232.00 Less: business cost 0.00 60,334.00 Tax and surcharges 5,268,020.00 Sales expense Administrative expense 93,173,393.00 95,283,586.00 Financial expenses 39,817,558.00 15,427,933.00 Asset impairment loss 85,921.00 -1,768,813.00 Plus: gains from change of fair value (“- “for loss) Investment gains (“-“ for loss) 2,011,500.00 405,086,976.00 Incl. Investment gains from affiliates Other gains 18,000.00 II. Operating profit (“-“ for loss) -93,981,287.00 305,635,168.00 Plus: non-operating income 1,196,570.00 1,199,607.00 Incl. Income from disposal of non- 2,520.00 current assets Less: non-operating expenses 816,000.00 Incl. Loss from disposal of non-current assets III. Gross profit (“-“ for loss) -93,600,717.00 306,834,775.00 Less: Income tax expenses -45,852.00 IV. Net profit (“-“ for net loss) -93,600,717.00 306,880,627.00 V. Net amount of other comprehensive income after tax (I) Other comprehensive income that will not be reclassified into gains/losses afterward 1. Change of net liability or asset of beneficiary plan from recalculating 2. The share of comprehensive income in invested entities under equity 22 CSG HOLDING CO., LTD. The Third Quarter Report 2017 method which can not be reclassified into profit or loss (II) Other comprehensive income items that will be reclassified into gains/losses in the subsequent accounting period 1. The share of comprehensive income in invested entities under equity method which can be reclassified into profit or loss afterward 2.Gains and losses from changes in fair value available for sale financial assets 3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial statements 6.Other VI. Total of comprehensive income -93,600,717.00 306,880,627.00 VII. Earnings per share: (I) Basic earnings per share (II) Diluted earnings per share 7. Consolidated Cash Flow Statement for Jan.-Sept. 2017 Unit: RMB Item Balance of this period Balance of last period I. Net cash flow from business operation Cash received from sales of products 8,716,345,821.00 7,467,528,727.00 and providing of services Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract 23 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Net cash received from reinsurance business Net increase of client deposit and investment Net increase of disposal of the financial assets measured by fair value with the changes included in the current gains and losses Cash received as interest, processing fee, and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned 13,944,024.00 40,275,710.00 Other cash received from business 104,334,381.00 68,764,580.00 operation Sub-total of cash inflow from business 8,834,624,226.00 7,576,569,017.00 activities Cash paid for purchasing of 5,170,500,238.00 4,361,925,084.00 merchandise and services Net increase of client trade and advance Net increase of savings in central bank and brother company Cash paid for original contract claim Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 903,582,623.00 798,870,174.00 Taxes paid 560,097,169.00 480,049,004.00 Other cash paid for business activities 412,345,504.00 343,525,795.00 Sub-total of cash outflow from business 7,046,525,534.00 5,984,370,057.00 activities Net cash flow generated by business 1,788,098,692.00 1,592,198,960.00 operation II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment profit 24 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Net cash retrieved from disposal of fixed assets, intangible assets, and other 1,524,109.00 2,390,680.00 long-term assets Net cash received from disposal of 150,000,000.00 subsidiaries or other operational units Other investment-related cash received 25,793,594.00 40,170,833.00 Sub-total of cash inflow due to 27,317,703.00 192,561,513.00 investment activities Cash paid for construction of fixed assets, intangible assets and other long- 1,059,799,002.00 804,655,768.00 term assets Cash paid as investment 4,250,000.00 Net increase of loan against pledge Net cash received from subsidiaries and 507,974,099.00 other operational units Other cash paid for investment 36,752,523.00 24,021,775.00 activities Sub-total of cash outflow due to 1,096,551,525.00 1,340,901,642.00 investment activities Net cash flow generated by investment -1,069,233,822.00 -1,148,340,129.00 III. Cash flow generated by financing Cash received as investment 14,500,000.00 Incl. Cash received as investment from 14,500,000.00 minor shareholders Cash received as loans 3,013,919,750.00 7,959,211,141.00 Cash received from bond placing Other financing-related cash received 3,179,276,494.00 118,403,662.00 Subtotal of cash inflow from financing 6,193,196,244.00 8,092,114,803.00 activities Cash to repay debts 3,824,757,768.00 7,874,819,707.00 Cash paid as dividend, profit, or 468,236,090.00 816,685,415.00 interests Incl. Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 1,390,858,313.00 120,833,724.00 Subtotal of cash outflow due to 5,683,852,171.00 8,812,338,846.00 financing activities 25 CSG HOLDING CO., LTD. The Third Quarter Report 2017 Net cash flow generated by financing 509,344,073.00 -720,224,043.00 IV. Influence of exchange rate -1,130,269.00 2,793,736.00 alternation on cash and cash equivalents V. Net increase of cash and cash 1,227,078,674.00 -273,571,476.00 equivalents Plus: Balance of cash and cash 584,566,990.00 574,744,877.00 equivalents at the beginning of term VI. Balance of cash and cash 1,811,645,664.00 301,173,401.00 equivalents at the end of term 8. Cash Flow Statement of the Parent Company for Jan.-Sept. 2017 Unit: RMB Item Balance of this period Balance of last period I. Net cash flow from business operation Cash received from sales of products and providing of services Tax returned Other cash received from business 7,093,227.00 3,384,187.00 operation Sub-total of cash inflow from business 7,093,227.00 3,384,187.00 activities Cash paid for purchasing of merchandise and services Cash paid to staffs or paid for staffs 46,944,641.00 85,566,148.00 Taxes paid 6,646,035.00 39,724,582.00 Other cash paid for business activities 21,006,751.00 8,827,849.00 Sub-total of cash outflow from business 74,597,427.00 134,118,579.00 activities Net cash flow generated by business -67,504,200.00 -130,734,392.00 operation II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment profit 2,011,500.00 395,236,932.00 Net cash retrieved from disposal of 1,808.00 2,520.00 fixed assets, intangible assets, and other 26 CSG HOLDING CO., LTD. The Third Quarter Report 2017 long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 5,954,000.00 3,000,000.00 Sub-total of cash inflow due to 7,967,308.00 398,239,452.00 investment activities Cash paid for construction of fixed assets, intangible assets and other long- 1,680,804.00 280,145.00 term assets Cash paid as investment 196,755,000.00 Net cash received from subsidiaries and 464,345,956.00 other operational units Other cash paid for investment activities Sub-total of cash outflow due to 1,680,804.00 661,381,101.00 investment activities Net cash flow generated by investment 6,286,504.00 -263,141,649.00 III. Cash flow generated by financing Cash received as investment Cash received as loans 2,100,693,638.00 7,375,164,309.00 Cash received from bond placing Other financing-related cash received 2,411,868,907.00 663,060,790.00 Subtotal of cash inflow from financing 4,512,562,545.00 8,038,225,099.00 activities Cash to repay debts 3,396,723,365.00 7,168,164,309.00 Cash paid as dividend, profit, or 209,502,162.00 705,743,777.00 interests Other cash paid for financing activities Subtotal of cash outflow due to 3,606,225,527.00 7,873,908,086.00 financing activities Net cash flow generated by financing 906,337,018.00 164,317,013.00 IV. Influence of exchange rate 681,240.00 -2,565,241.00 alternation on cash and cash equivalents V. Net increase of cash and cash 845,800,562.00 -232,124,269.00 equivalents Plus: Balance of cash and cash 301,637,933.00 394,606,753.00 equivalents at the beginning of term 27 CSG HOLDING CO., LTD. The Third Quarter Report 2017 VI. Balance of cash and cash 1,147,438,495.00 162,482,484.00 equivalents at the end of term II .Auditor’s Report Whether the third quarter report has been audited or not □Yes √No The third quarter report of the Company has not been audited. Board of Directors of CSG Holding Co., Ltd. 27 October 2017 28