ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD. THIRD QUARTER REPORT 2017 2017-075 October 2017 1 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Part I Important Statements The board of directors (the “Board”), the supervisory board (the “Supervisory Board”) as well as the directors, supervisors and senior management of ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. (the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report, and shall be jointly and severally liable for any false representation, misleading statements or material omissions in this Report. All the directors of the Company attended the board meeting for the review of this Report. Zhou Jianguo, Board Chairman, Chen Maozheng, GM, Tang Xiaoping, accounting head for this Report, and Qiao Yanjun, head of the accounting organ (head of accounting), hereby guarantee that the Financial Report carried in the Report is factual, accurate and complete. This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail. 2 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Part II Company Fundamentals I Key Consolidated Operating Results Indicate by tick mark whether the Company needs to retrospectively restate any of its accounting data. □ Yes √ No September 30, 2017 December 31, 2016 Change Total assets (RMB) 3,820,236,889.03 3,785,600,783.23 0.91% Equity attributable to owners of the 2,796,350,633.17 2,643,860,443.09 5.77% parent (RMB) July-September January-September YoY change YoY change 2017 2017 Net sales (RMB) 233,287,425.63 -63.92% 964,594,407.66 -44.71% Net margin attributable to owners of the 12,356,333.26 -87.90% 149,582,935.10 -36.85% parent (RMB) Net margin attributable to owners of the parent before exceptional gains and 12,359,686.56 -87.86% 149,439,732.67 -34.78% losses (RMB) Net cash from operating activities -- -- -200,649,011.12 -136.41% (RMB) Basic earnings per share (RMB/share) 0.0122 -87.91% 0.1479 -36.82% Diluted earnings per share (RMB/share) 0.0122 -87.91% 0.1479 -36.82% Weighted average return on equity (%) 0.45% -3.61% 5.50% -4.17% Exceptional gains and losses: √ Applicable □ Not applicable Unit: RMB Item January-September 2017 Note Gains/Losses on disposal of non-current assets (inclusive of offset -61,706.41 asset impairment provisions) Non-operating income and expense other than above 252,642.99 Less: Income tax effects 47,734.15 Total 143,202.43 -- Explanation of why the Company classified an item as an exceptional gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gains and Losses, or reclassified any exceptional gain/loss item given as an example in the said explanatory announcement as a recurrent gain/loss: 3 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 □ Applicable √ Not applicable No such cases in the Reporting Period. II Total Number of Shareholders and Shareholdings of Top 10 Shareholders at Period-End 1. Numbers of Common Shareholders and Preference Shareholders with Resumed Voting Rights, and Shareholdings of Top 10 Shareholders Unit: share Total number of common shareholders at Total number of preference shareholders with 76,443 0 period-end resumed voting rights at period-end (if any) Top 10 shareholders Total shares Pledged or frozen shares Nature of Shareholding Restricted shares Name of shareholder held at shareholder percentage held at period-end Status Number period-end Shenzhen Investment State-owned 63.55% 642,884,262 Holdings Co., Ltd corporation Shandong Gold Financial Holding Capital Management Domestic Co., Ltd. - Shandong Gold non-state-owned 1.02% 10,300,000 Financial Holding Sustaining corporation Fund 1 Domestic Lu Zhigao 0.32% 3,246,949 individual Domestic Tan Shiqing 0.13% 1,286,701 individual Domestic Yang Shuilian 0.13% 1,273,700 individual Domestic Yang Jianxiong 0.12% 1,255,750 individual Central Huijin Asset State-owned 0.12% 1,165,500 Management Co., Ltd. corporation Domestic Peng Wei 0.11% 1,129,082 individual Foreign Wu Haoyuan 0.11% 1,109,300 individual Guotai Junan Securities Foreign 0.10% 1,015,683 (Hong Kong) Limited corporation Top 10 non-restricted shareholders Name of shareholder Non-restricted shares Type of stock 4 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 held at period-end Type Number Shenzhen Investment Holdings Co., Ltd 642,884,262 RMB ordinary shares 642,884,262 Shandong Gold Financial Holding Capital Management Co., 10,300,000 RMB ordinary shares 10,300,000 Ltd.-Shandong Gold Financial Holding Sustaining Fund 1 Lu Zhigao 3,246,949 RMB ordinary shares 3,246,949 Tan Shiqing 1,286,701 RMB ordinary shares 1,286,701 Yang Shuilian 1,273,700 RMB ordinary shares 1,273,700 Domestically listed stock Yang Jianxiong 1,255,750 1,255,750 for foreign investors Central Huijin Asset Management Co., Ltd. 1,165,500 RMB ordinary shares 1,165,500 Peng Wei 1,129,082 RMB ordinary shares 1,129,082 Domestically listed stock Wu Haoyuan 1,109,300 1,109,300 for foreign investors Domestically listed stock Guotai Junan Securities (Hong Kong) Limited 1,015,683 1,015,683 for foreign investors The Company has found no related parties or act-in-concert parties Related or acting-in-concert parties among shareholders as defined in the Administrative Measures for Shareholding Changes above in Listed Companies among the shareholders above. Shareholder No. 4 holds all his shares in the Company in his account Top 10 common shareholders conducting securities margin of collateral securities for margin trading. Shareholder No.3 holds trading (if any) some of his shares in the Company in such an account. Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yea √ No No such cases in the Reporting Period. 2. Total Number of Preference Shareholders and Shareholdings of Top 10 of Them at Period-End □ Applicable √ Not applicable 5 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Part III Significant Events I Changes in Key Consolidated Financial Statement Items and Reasons for Such Changes √ Applicable □ Not applicable Unit: RMB January-September January-September Income statement item Change Main reason for change 2017 2016 Decreases in spot housing sales Net sales 964,594,407.66 1,744,462,098.00 -44.71% carryforwards and in provision of construction services Decreases in spot housing sales Cost of sales 686,017,275.92 1,266,493,613.92 -45.83% carryforwards and in provision of construction services Taxes and surtaxes 30,671,236.84 135,398,032.24 -77.35% Decreased real estate income Increases in sales agency costs and Selling expense 12,382,407.96 8,844,726.66 40.00% commission expenditure caused by projects newly open for sale Decreases in interest and capitalized Finance costs -2,414,867.29 -11,918,313.56 -79.74% interest associated with real estate projects Reversal of bad-debt provision for compensation in Luofu Mountain Asset impairment losses 0.00 -4,800,000.00 -100.00% lawsuit case in period January through September 2016 Return of compensation in Luofu Non-operating income 320,231.95 5,639,605.16 -94.32% Mountain lawsuit case in period January through September 2016 January-September January-September Cash flow statement item Change Main reason for change 2017 2016 Net cash flows from operating Decrease in cash generated by sale of -200,649,011.12 551,101,766.41 -136.41% activities goods Net cash flows from investing Receipt of downpayment for transfer of 8,643,770.86 -141,856.79 6193.31% activities car rental subsidiary Net cash flows from financing Repayment of bank loans in period -18,576,803.21 -397,151,521.05 95.32% activities January through September 2016 Balance sheet item September 30, 2017 December 31, 2016 Change Main reason for change Decrease in receivables arising from Notes receivable 14,453,488.81 20,606,778.91 -29.86% provision of construction services Accounts receivable 165,767,740.97 108,298,050.40 53.07% Receivables arising from sale of housing 6 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 and provision of construction services Other current assets 31,220,302.17 13,358,714.45 133.71% Reclassification of prepaid taxes Settlement of balance payment for Accounts payable 88,556,436.28 168,614,299.95 -47.48% finished product Non-current liabilities due within Increase in bank loans due within one 54,000,000.00 37,234,933.67 45.03% one year year II Progress, Influence and Solutions Associated with Significant Events √ Applicable □ Not applicable Because Shenzhen Investment Holdings Co., Ltd., the controlling shareholder of ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. (“SPG” or the “Company”), were planning a significant event that involved the Company, the Company’s stock (A-stock: stock name: SPG A, stock code: 000029; B-stock: stock name: SPG B, stock code: 200029) has been suspended since the opening of September 14, 2016. On September 30, 2016, the Company disclosed the Announcement on Share Trading Suspension Due to Significant Asset Reorganization (No. 2016-025), and continued the suspension due to major assets reorganization since the market opening on September 30, 2016. The Company is organizing relevant intermediaries to conduct supplementary due diligence on the parties to the reorganization of assets and trading, carry out supplementary audit and evaluation work, and update the major asset restructuring plan or report (draft) and other relevant documents. The major assets reorganization of the Company involves state-owned enterprise reform in Shenzhen with a complex transaction structure. Because the target assets to be acquired are associated with an industry-leading enterprise of a large size, the intended transaction is considered a significant, unprecedented event. Thus, it is necessary to communicate with the regulatory authorities for further discussions, demonstrations and improvement concerning the reorganization plan. Additionally, due to expiry, the audit report and evaluation report of the target assets need to be renewed, and the renewed evaluation report also needs to be filed with the state-owned assets administration, which altogether requires some time. For more information, please see the Company's subsequent announcements. During the continued suspension, the Company will keep promoting the work of this major asset reorganization with parties concerned, paying full attention to the progress of the issue and fulfilling the obligation of timely information disclosure in strict accordance with the provisions and requirements of relevant laws and regulations, that is, the Company will disclose the progress of related matters at least every five trading days. There is considerable uncertainty for the major assets restructuring prepared by the Company. Investors are kindly reminded to pay attention to investment risk. Summary of significant event Disclosure date Index to related announcement Announcement on Postponed Share Trading Resumption Significant asset reorganization 10/14/2017 Relating to Significant Asset Reorganization in Planning disclosed on www.cninfo.com.cn 7 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company and Other Commitment Makers, Failed to Fulfill on Time during Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. IV Forecast of 2017 Annual Operating Results Warning of a possible loss on or a significant year-over-year change in accumulative net margin during the period the beginning of the current year through the end of the next reporting period, as well as the reasons: √ Applicable □ Not applicable Forecast: Significant decrease at the same direction Type of the forecast data: Interval data 2017 2016 Change Forecast accumulative net 16,000 -- 21,800 31,150 Decrease 48.64% -- 30.02% margin (RMB'0,000) Basic earnings per share 0.1582 -- 0.2155 0.3080 Decrease 48.64% -- 30.03% (RMB/share) Note Real estate sales carryforwards decreased in Reporting Period compared to Q3 2016 V Securities Investments □ Applicable √ Not applicable No such cases in the Reporting Period. VI Investments in Derivative Financial Instruments □ Applicable √ Not applicable No such cases in the Reporting Period. VII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc. during Reporting Period √ Applicable □ Not applicable Date of visit Way of visit Type of visitor About 07/18/2017 By phone Individual Inquired of semi-annual operating conditions of the Company, the 8 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 progress of assets reorganization and the expected relisting time, and didn’t offer written materials Inquired of the relisting time of assets reorganization, the estimated 07/28/2017 By phone Individual disclosed time of semi-annual report, and didn’t offer written materials Inquired of the progress of assets reorganization and the relisting time, 08/10/2017 By phone Individual and didn’t offer written materials Inquired of the progress of assets reorganization and the relisting time, 08/25/2017 By phone Individual and didn’t offer written materials Inquired of the progress of assets reorganization and the reason for the 09/13/2017 By phone Individual postponement of relisting, and didn’t offer written materials Inquired of the progress of assets reorganization, the operating 09/29/2017 By phone Individual conditions of the Company and the estimated disclosed time of third quarter report, and didn’t offer written materials VIII Irregularities Arising from Provision of Guarantees for Third Parties □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s Funds by Its Controlling Shareholder or Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. X Targeted Measures Taken to Help People Lift Themselves out of Poverty 1. Outline of Targeted Measures in the Reporting Period 2. List of Targeted Measures of Listed Companies in the Reporting Period Measurement Indicator Number/Progress unit I. General condition —— —— II. Itemized investment —— —— 1. Out of poverty by industrial development —— —— 2. Out of poverty by transferring employment —— —— 3. Out of poverty by relocating —— —— 4. Out of poverty by education —— —— 9 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 5. Out of poverty by improving health —— —— 6. Out of poverty by protecting ecological environment —— —— 7. Subsidy for the poorest —— —— 8. Social poverty alleviation —— —— 9. Other items —— —— III. Received awards(contents and rank) —— —— 3. Subsequent Targeted Measure Plans 10 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Part IV Financial Statements I Financial Statements 1. Consolidated Balance Sheet Prepared by ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. September 30, 2017 Unit: RMB Item September 30, 2017 December 31, 2016 Current assets: Cash on hand and at bank 1,057,942,554.74 1,266,057,324.40 Settlement reserve Interbank lendings Financial assets at fair value through gains/losses Derivative financial assets Notes receivable 14,453,488.81 20,606,778.91 Accounts receivable 165,767,740.97 108,298,050.40 Prepayments 13,703,629.69 15,865,139.33 Premiums receivable Reinsurance premiums receivable Receivable reinsurance contract reserve Interest receivable Dividends receivable 1,052,192.76 1,052,192.76 Other accounts receivable 88,021,593.80 67,514,794.65 Financial assets purchased under agreements to resell Inventories 1,911,577,458.16 1,734,553,042.10 Assets held for sale Non-current assets due within one year Other current assets 31,220,302.17 13,358,714.45 Total current assets 3,283,738,961.10 3,227,306,037.00 Non-current assets: Loans and advances to customers Available-for-sale financial assets 17,464,240.74 17,464,240.74 Held-to-maturity investments 11 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Long-term accounts receivable Long-term equity investments 37,447,267.61 37,447,267.61 Investment property 399,523,239.12 416,227,686.30 Fixed assets 40,967,984.94 45,531,813.41 Construction in progress Engineering materials Disposal of fixed assets Productive living assets Oil-gas assets Intangible assets 4,764,525.00 5,146,080.00 R&D expense Goodwill Long-term deferred expense 600,744.52 695,720.30 Deferred income tax assets 35,729,926.00 35,781,937.87 Other non-current assets Total non-current assets 536,497,927.93 558,294,746.23 Total assets 3,820,236,889.03 3,785,600,783.23 Current liabilities: Short-term borrowings 131,697,522.84 111,709,916.44 Borrowings from Central Bank Money deposits accepted and inter-bank deposits Interbank borrowings Financial liabilities at fair value through gains/losses Derivative financial liabilities Notes payable Accounts payable 88,556,436.28 168,614,299.95 Advances received 278,808,406.35 325,851,112.54 Financial assets sold for repurchase Fees and commissions payable Payroll payable 26,879,422.81 38,949,995.06 Taxes payable 66,343,322.90 65,765,997.90 Interest payable 16,535,277.94 17,142,210.94 Dividends payable Other accounts payable 380,693,975.16 358,208,718.03 12 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Reinsurance premiums payable Insurance contract reserve Payables for acting trading of securities Payables for acting underwriting of securities Liabilities held for sale Non-current liabilities due within one year 54,000,000.00 37,234,933.67 Other current liabilities Total current liabilities 1,043,514,364.28 1,123,477,184.53 Non-current liabilities: Long-term borrowings 98,000,000.00 136,000,000.00 Bonds payable Of which: Preference shares Perpetual bonds Long-term accounts payable 8,996,594.99 10,156,728.82 Long-term payroll payable Special payables Provisions Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 106,996,594.99 146,156,728.82 Total liabilities 1,150,510,959.27 1,269,633,913.35 Owners’ equity: Share capital 1,011,660,000.00 1,011,660,000.00 Other equity instruments Of which: Preference shares Perpetual bonds Capital reserve 978,244,910.11 978,244,910.11 Less: Treasury shares Other comprehensive income 13,559,786.67 10,652,531.69 Special reserve Surplus reserve 59,394,668.24 59,394,668.24 Provisions for general risks Retained earnings 733,491,268.15 583,908,333.05 13 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Equity attributable to owners of the parent 2,796,350,633.17 2,643,860,443.09 Minority interests -126,624,703.41 -127,893,573.21 Total owners’ equity 2,669,725,929.76 2,515,966,869.88 Total liabilities and owners’ equity 3,820,236,889.03 3,785,600,783.23 Legal representative: Zhou Jianguo Accounting head for this Report: Tang Xiaoping Head of the accounting department: Qiao Yanjun 2. Parent Company Balance Sheet Unit: RMB Item September 30, 2017 December 31, 2016 Current assets: Cash on hand and at bank 717,104,701.43 818,261,250.52 Financial assets at fair value through gains/losses Derivative financial assets Notes receivable Accounts receivable 44,515,071.91 7,327,250.98 Prepayments Interest receivable Dividends receivable 169,393,952.18 Other accounts receivable 905,005,607.04 844,149,690.07 Inventories 502,249,822.63 538,828,597.52 Assets held for sale Non-current assets due within one year Other current assets 18,973,760.44 1,884,516.01 Total current assets 2,357,242,915.63 2,210,451,305.10 Non-current assets: Available-for-sale financial assets 12,000,000.00 12,000,000.00 Held-to-maturity investments Long-term accounts receivable Long-term equity investments 297,461,748.63 297,461,748.63 Investment property 346,767,663.56 360,712,864.13 Fixed assets 24,996,251.06 26,785,752.21 Construction in progress 14 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Engineering materials Disposal of fixed assets Productive living assets Oil-gas assets Intangible assets 82,800.00 331,200.00 R&D expense Goodwill Long-term deferred expense 497,524.14 623,881.08 Deferred income tax assets 3,313,320.43 3,313,320.43 Other non-current assets Total non-current assets 685,119,307.82 701,228,766.48 Total assets 3,042,362,223.45 2,911,680,071.58 Current liabilities: Short-term borrowings Financial liabilities at fair value through gains/losses Derivative financial liabilities Notes payable Accounts payable 17,427,447.26 32,687,289.94 Advances received 93,435.00 96,638,512.60 Payroll payable 12,783,415.49 16,433,909.11 Taxes payable 37,908,568.75 30,504,993.33 Interest payable 16,535,277.94 17,142,210.94 Dividends payable Other accounts payable 235,859,067.86 232,434,218.15 Liabilities held for sale Non-current liabilities due within one year 54,000,000.00 37,234,933.67 Other current liabilities Total current liabilities 374,607,212.30 463,076,067.74 Non-current liabilities: Long-term borrowings 98,000,000.00 136,000,000.00 Bonds payable Of which: Preference shares Perpetual bonds Long-term payables 15 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Long-term payroll payable Special payables Provisions Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 98,000,000.00 136,000,000.00 Total liabilities 472,607,212.30 599,076,067.74 Owners’ equity: Share capital 1,011,660,000.00 1,011,660,000.00 Other equity instruments Of which: Preference shares Perpetual bonds Capital reserve 978,244,910.11 978,244,910.11 Less: Treasury shares Other comprehensive income Special reserve Surplus reserve 36,265,054.83 36,265,054.83 Retained earnings 543,585,046.21 286,434,038.90 Total owners’ equity 2,569,755,011.15 2,312,604,003.84 Total liabilities and owners’ equity 3,042,362,223.45 2,911,680,071.58 3. Consolidated Income Statement for July-September Unit: RMB Item July-September 2017 July-September 2016 1. Operating revenue 233,287,425.63 646,575,128.32 Including: Net sales 233,287,425.63 646,575,128.32 Interest revenue Premium revenue Fee and commission revenue 2. Operating expenses 212,356,504.34 510,103,979.66 Including: Cost of sales 191,067,478.03 450,466,369.81 Interest expense Fee and commission expense 16 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Surrenders Net claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surtaxes 6,757,925.61 49,029,822.53 Selling expense 5,549,604.20 3,736,985.23 Administrative expense 8,760,792.21 11,740,962.01 Finance costs 220,704.29 -4,870,159.92 Asset impairment losses Add: Gains on fair value changes (“-” for losses) Investment income (“-” for losses) Including: Share of gains/losses of associates and joint ventures Exchange gains (“-” for losses) Other income 3. Operating margin (“-” for losses) 20,930,921.29 136,471,148.66 Add: Non-operating income 3,210.52 426,147.22 Including: Gains on disposal of non-current assets Less: Non-operating expense 7,681.58 14,709.01 Including: Losses on disposal of non-current 3,518.85 2,374.95 assets 4. Gross margin (“-” for losses) 20,926,450.23 136,882,586.87 Less: Income tax expense 8,520,281.69 34,747,273.16 5. Net margin (“-” for losses) 12,406,168.54 102,135,313.71 Attributable to owners of the parent 12,356,333.26 102,114,004.00 Attributable to minority interests 49,835.28 21,309.71 6. Other comprehensive income, net of tax 2,101,707.56 -475,668.34 Other comprehensive income, net of tax attributable 1,471,195.30 -332,967.84 to owners of the parent 6.1 Other comprehensive income that will not be reclassified into gains/losses 6.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 6.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 17 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 6.2 Other comprehensive income to be 1,471,195.30 -332,967.84 subsequently reclassified into gains/losses 6.2.1 Share of other comprehensive income of investees that will be reclassified into gains/losses under equity method 6.2.2 Gains/Losses on fair value changes of available-for-sale financial assets 6.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 6.2.4 Effective gains/losses on cash flow hedges 6.2.5 Currency translation differences 1,471,195.30 -332,967.84 6.2.6 Other Other comprehensive income, net of tax attributable 630,512.26 -142,700.50 to minority interests 7. Total comprehensive income 14,507,876.10 101,659,645.37 Attributable to owners of the parent 13,827,528.56 101,781,036.16 Attributable to minority interests 680,347.54 -121,390.79 8. Earnings per share 8.1 Basic earnings per share 0.0122 0.1009 8.2 Diluted earnings per share 0.0122 0.1009 Where business mergers under the same control occurred in the current period, the net margin achieved by the merged parties before the business mergers was RMB0.00, with the amount for the same period of last year being RMB0.00. Legal representative: Zhou Jianguo Accounting head for this Report: Tang Xiaoping Head of the accounting department: Qiao Yanjun 4. Parent Company Income Statement for July-September Unit: RMB Item July-September 2017 July-September 2016 1. Operating revenue 13,471,349.96 266,626,675.90 Less: Operating expenses 6,307,313.70 155,326,755.18 Taxes and surtaxes 1,612,856.89 29,125,547.39 Selling expense 266,196.50 1,675,287.56 Administrative expense 3,272,107.52 5,434,083.01 Finance costs -2,381,767.73 -4,659,769.98 Asset impairment losses 18 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Add: Gains on fair value changes (“-” for losses) Investment income (“-” for loss) Including: Share of gains/losses of associates and joint ventures Other income 2. Operating margin (“-” for losses) 4,394,643.08 79,724,772.74 Add: Non-operating income Including: Gains on disposal of non-current assets Less: Non-operating expense 12,234.00 Including: Losses on disposal of non-current assets 3. Gross margin (“-” for losses) 4,394,643.08 79,712,538.74 Less: Income tax expense 1,873,814.49 19,931,610.08 4. Net margin (“-” for losses) 2,520,828.59 59,780,928.66 5. Other comprehensive income, net of tax 5.1 Other comprehensive income that will not be reclassified into gains and losses 5.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 5.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 5.2 Other comprehensive income to be subsequently reclassified into gains/losses 5.2.1 Share of other comprehensive income of investees that will be reclassified into gains/losses under equity method 5.2.2 Gains/Losses on fair value changes of available-for-sale financial assets 5.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 5.2.4 Effective gains/losses on cash flow hedges 5.2.5 Currency translation differences 5.2.6 Other 6. Total comprehensive income 2,520,828.59 59,780,928.66 7. Earnings per share 7.1 Basic earnings per share 0.0025 0.0591 7.2 Diluted earnings per share 0.0025 0.0591 19 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 5. Consolidated Income Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Operating revenue 964,594,407.66 1,744,462,098.00 Including: Net sales 964,594,407.66 1,744,462,098.00 Interest revenue Premium revenue Fee and commission revenue 2. Operating expenses 760,136,084.33 1,432,716,353.04 Including: Cost of sales 686,017,275.92 1,266,493,613.92 Interest expense Fee and commission expense Surrenders Net claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surtaxes 30,671,236.84 135,398,032.24 Selling expense 12,382,407.96 8,844,726.66 Administrative expense 33,480,030.90 38,698,293.78 Finance costs -2,414,867.29 -11,918,313.56 Asset impairment losses -4,800,000.00 Add: Gains on fair value changes (“-” for losses) Investment income (“-” for losses) 650,000.00 625,209.41 Including: Share of gains/losses of associates and -63,790.59 joint ventures Exchange gains (“-” for losses) Other income 3. Operating margin (“-” for losses) 205,108,323.33 312,370,954.37 Add: Non-operating income 320,231.95 5,639,605.16 Including: Gains on disposal of non-current assets Less: Non-operating expense 129,295.37 115,286.41 Including: Losses on disposal of non-current 61,706.41 5,022.45 assets 4. Gross margin (“-” for losses) 205,299,259.91 317,895,273.12 20 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Less: Income tax expense 55,693,421.41 81,031,960.64 5. Net margin (“-” for losses) 149,605,838.50 236,863,312.48 Attributable to owners of the parent 149,582,935.10 236,875,125.51 Attributable to minority interests 22,903.40 -11,813.03 6. Other comprehensive income, net of tax 4,153,221.38 -2,717,649.11 Other comprehensive income, net of tax attributable 2,907,254.98 -1,902,354.38 to owners of the parent 6.1 Other comprehensive income that will not be reclassified into gains/losses 6.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 6.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 6.2 Other comprehensive income to be 2,907,254.98 -1,902,354.38 subsequently reclassified into gains/losses 6.2.1 Share of other comprehensive income of investees that will be reclassified into gains/losses under equity method 6.2.2 Gains/Losses on fair value changes of available-for-sale financial assets 6.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 6.2.4 Effective gains/losses on cash flow hedges 6.2.5 Currency translation differences 2,907,254.98 -1,902,354.38 6.2.6 Other Other comprehensive income, net of tax attributable 1,245,966.40 -815,294.73 to minority interests 7. Total comprehensive income 153,759,059.88 234,145,663.37 Attributable to owners of the parent 152,490,190.08 234,972,771.13 Attributable to minority interests 1,268,869.80 -827,107.76 8. Earnings per share 8.1 Basic earnings per share 0.1479 0.2341 8.2 Diluted earnings per share 0.1479 0.2341 Where business mergers under the same control occurred in the current period, the net margin achieved by the merged parties before the business mergers was RMB0.00, with the amount for the same period of last year being RMB0.00. 6. Parent Company Income Statement for January-September Unit: RMB 21 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Item January-September 2017 January-September 2016 1. Operating revenue 243,028,509.35 578,764,259.97 Less: Operating expenses 117,577,476.14 335,572,846.36 Taxes and surtaxes 7,458,223.71 62,674,556.43 Selling expense 1,230,781.87 4,064,476.96 Administrative expense 14,566,751.21 18,760,239.38 Finance costs -15,001,382.11 -15,121,347.54 Asset impairment losses -4,800,000.00 Add: Gains on fair value changes (“-” for losses) Investment income (“-” for loss) 170,043,952.18 625,209.41 Including: Share of gains/losses of associates and -63,790.59 joint ventures Other income 2. Operating margin (“-” for losses) 287,240,610.71 178,238,697.79 Add: Non-operating income 2.69 5,011,250.72 Including: Gains on disposal of non-current assets Less: Non-operating expense 12,574.69 31,734.06 Including: Losses on disposal of non-current assets 3. Gross margin (“-” for losses) 287,228,038.71 183,218,214.45 Less: Income tax expense 30,077,031.40 45,659,475.88 4. Net margin (“-” for losses) 257,151,007.31 137,558,738.57 5. Other comprehensive income, net of tax 5.1 Other comprehensive income that will not be reclassified into gains and losses 5.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 5.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 5.2 Other comprehensive income to be subsequently reclassified into gains/losses 5.2.1 Share of other comprehensive income of investees that will be reclassified into gains/losses under equity method 5.2.2 Gains/Losses on fair value changes of available-for-sale financial assets 5.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 22 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 5.2.4 Effective gains/losses on cash flow hedges 5.2.5 Currency translation differences 5.2.6 Other 6. Total comprehensive income 257,151,007.31 137,558,738.57 7. Earnings per share 7.1 Basic earnings per share 0.2542 0.1360 7.2 Diluted earnings per share 0.2542 0.1360 7. Consolidated Cash Flow Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Cash generated by or used in operating activities: Cash generated by sale of commodities and rendering 952,036,798.69 1,697,750,778.39 of service Net increase in money deposits from customers and interbank placements Net increase in loans from Central Bank Net increase in funds borrowed from other financial institutions Cash received as premiums of original insurance contracts Net cash generated by reinsurance business Net increase in deposits of policy holders and investment fund Net increase in disposal of financial assets at fair value through gains/losses Interest, fees and commissions received Net increase in interbank borrowings Net increase in funds in repurchase business Tax rebates received Cash generated by other operating activities 63,746,128.65 141,397,167.24 Subtotal of cash generated by operating activities 1,015,782,927.34 1,839,147,945.63 Cash paid for goods and services 851,439,343.84 829,026,819.30 Net increase in loans and advances to customers Net increase in funds deposited in Central Bank and interbank placements Cash paid for claims of original insurance contracts 23 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Interest, fees and commissions paid Cash paid as policy dividends Cash paid to and for employees 111,403,737.30 110,555,686.90 Taxes paid 137,641,963.40 212,631,127.12 Cash used in other operating activities 115,946,893.92 135,832,545.90 Subtotal of cash used in operating activities 1,216,431,938.46 1,288,046,179.22 Net cash from operating activities -200,649,011.12 551,101,766.41 2. Cash generated by or used in investing activities: Cash generated by disinvestments 1,376,616.35 Cash received as investment income 650,000.00 689,000.00 Net cash generated by disposal of fixed assets, 14,976.00 5,900.00 intangible assets and other long-term assets Net cash generated by disposal of subsidiaries or other 7,286,982.00 business units Cash generated by other investing activities Subtotal of cash generated by investing activities 9,328,574.35 694,900.00 Cash paid to acquire fixed assets, intangible assets and 684,803.49 836,756.79 other long-term assets Cash paid for investments Net increase in pledged loans Net cash paid to acquire subsidiaries and other business units Cash used in other investing activities Subtotal of cash used in investing activities 684,803.49 836,756.79 Net cash from investing activities 8,643,770.86 -141,856.79 3. Cash generated by or used in financing activities: Cash received as capital contributions Including: Cash received from minority shareholder investments by subsidiaries Cash received as borrowings 20,900,000.00 18,000,000.00 Cash generated by issuance of bonds Cash generated by other financing activities Subtotal of cash generated by financing activities 20,900,000.00 18,000,000.00 Repayment of borrowings 32,216,016.22 394,180,434.67 Cash paid for interest expenses and distribution of 7,260,786.99 20,971,086.38 dividends or profit Including: dividends or profit paid by subsidiaries to 24 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 minority interests Cash used in other financing activities Sub-total of cash used in financing activities 39,476,803.21 415,151,521.05 Net cash from financing activities -18,576,803.21 -397,151,521.05 4. Effect of foreign exchange rate changes on cash and -532,868.23 275,526.59 cash equivalents 5. Net increase in cash and cash equivalents -211,114,911.70 154,083,915.16 Add: Opening balance of cash and cash equivalents 1,265,767,290.57 1,169,756,306.36 6. Closing balance of cash and cash equivalents 1,054,652,378.87 1,323,840,221.52 8. Parent Company Cash Flow Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Cash generated by or used in operating activities: Cash generated by sale of commodities and rendering 122,602,887.22 564,947,718.21 of service Tax rebates received Cash generated by other operating activities 17,886,514.26 200,849,272.34 Subtotal of cash generated by operating activities 140,489,401.48 765,796,990.55 Cash paid for goods and services 68,730,205.88 79,393,857.65 Cash paid to and for employees 29,550,117.76 28,900,972.17 Taxes paid 61,804,843.80 103,944,998.09 Cash used in other operating activities 61,639,460.72 99,666,579.67 Subtotal of cash used in operating activities 221,724,628.16 311,906,407.58 Net cash from operating activities -81,235,226.68 453,890,582.97 2. Cash generated by or used in investing activities: Cash generated by disinvestments Cash received as investment income 650,000.00 689,000.00 Net cash generated by disposal of fixed assets, intangible assets and other long-term assets Net cash generated by disposal of subsidiaries or other 7,286,982.00 business units Cash generated by other investing activities Subtotal of cash generated by investing activities 7,936,982.00 689,000.00 Cash paid to acquire fixed assets, intangible assets and 112,874.00 38,189.00 other long-term assets 25 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Third Quarter Report 2017 Cash paid for investments Net cash paid to acquire subsidiaries and other business units Cash used in other investing activities Subtotal of cash used in investing activities 112,874.00 38,189.00 Net cash from investing activities 7,824,108.00 650,811.00 3. Cash generated by or used in financing activities: Cash received as capital contributions Cash received as borrowings Cash generated by issuance of bonds Cash generated by other financing activities Subtotal of cash generated by financing activities Repayment of borrowings 21,216,016.22 369,180,434.67 Cash paid for interest expenses and distribution of 6,495,933.73 19,969,650.74 dividends or profit Cash used in other financing activities Sub-total of cash used in financing activities 27,711,949.95 389,150,085.41 Net cash from financing activities -27,711,949.95 -389,150,085.41 4. Effect of foreign exchange rate changes on cash and -33,480.46 15,773.98 cash equivalents 5. Net increase in cash and cash equivalents -101,156,549.09 65,407,082.54 Add: Opening balance of cash and cash equivalents 818,261,250.52 852,492,165.42 6. Closing balance of cash and cash equivalents 717,104,701.43 917,899,247.96 II Auditor’s Report Are the Q3 2017 financial statements audited? □Yes √ No These financial statements are unaudited. 26