Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 Stock code: 200054 Stock Abbreviation: Jianshe Vehicle B Announcement No.: 2019-043 Chongqing Jianshe Vehicle System Co., Ltd. The First Quarterly Report 2019 1 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 1 Important notes The Board of Directors,the Supervisory Committee, the directors, the supervisors, and executives of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Quarterly Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Quarterly Report. Except the following directors, all the directors attended the board meeting for reviewing the annual Report. The name of the directors absent Positions Reasons for the absence Name of the consignee Yan Xuechuan Director Business trip Lv Hongxian Hao Lin Director Business trip Li Dingqing Liu Zhiqiang Independent Director Business trip Peng Jue Mr. Lv Hongxian, The Company Leader, Mr.Tan Mingxian, Chief financial officer and the Ms.Niu Yanli, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in the report. 2 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 II. Basic Information of the Company I.Main financial data and financial index Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data. □Yes√No Changes of this period over This period Same period of last year same period of last year (%) Operation revenue(Yuan) 208,419,491.98 266,811,269.51 -21.89% Net profit attributable to the shareholders -15,704,995.56 55,789.60 -28,250.40% of the listed company(Yuan) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of -15,991,228.39 -275,476.62 5,704.93% listed company(Yuan) Net Cash flow generated by business 29,472,232.97 18,706,058.10 57.55% operation(Yuan) Basic earning per share(Yuan/Share) -0.1316 0.0005 -26,420.00% Diluted gains per -0.1316 0.0005 -26,420.00% share(Yuan/Share)(Yuan/Share) Net asset earning ratio(%) -5.50% 0.02% -5.52% Changes of this period-end End of this period End of last period over same period-end of last year(%) Gross assets(Yuan) 1,322,738,049.45 1,461,770,573.54 -9.51% Net assets attributable to shareholders of 277,596,454.98 293,301,450.54 -5.35% the listed company(Yuan) Items and amount of non-current gains and losses √ Applicable □ Not applicable In RMB Amount (Year-beginning Items to the end of the report Notes period.) Govemment subsidies recognized in current gain and loss(excluding those closely related to 30,000.00 the Company’s business and granted under the state’s policies) 3 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 Other non-business income and expenditures other than the above 256,232.83 Total 286,232.83 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. □ Applicable √ Not applicable None of Non-recurring gain /loss items recorgnized as recurring gain /loss/itesm as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 4 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 II. Total Shareholders and Shares Held by Top Ten Shareholders at the End of the Reporting Period 1. About Total Common Shareholders, Total Preference Shareholders with the Voting Power Recovered and the Shares Held by Top Ten Common Shareholders In shares Total preference shareholders with Total number of common 8,077 the voting power recovered at the 0 shareholders at the period-end end of the reporting period(if any) Shares held by the top 10 shareholders Amount of Pledging or freezing Properties of Share tradable shares Shareholder name Quantity Status of shareholder proportion % with Conditional Quantity the shares held China Military Equipment State-owned legal 71.13% 84,906,250 84,906,250 Group Co., Ltd. person Domestic natural Gu Zuocheng 1.89% 2,261,000 2,218,750 person Domestic Hengsheng Sun Group Co., Ltd. non-state-owned legal 1.47% 1,750,000 1,750,000 Freeze 1,750,000 person Domestic natural Liu Dan 0.90% 1,071,751 0 person Domestic natural Xu Yuanhui 0.56% 666,789 0 person Overseas natural Yu Lingfeng 0.51% 612,921 0 person Domestic natural Chen Xinqiang 0.51% 612,400 0 person Domestic natural Zhang Meilan 0.43% 513,560 0 person Domestic natural Feng Yonghui 0.42% 500,000 500,000 person Domestic natural Li Jianping 0.37% 445,569 0 person Shares held by the Top 10 Shareholders of Non-restricted shares Number of the Share type Shareholders’ Names non-restricted shares held Share type Quantity Foreign shares placed in Liu Dan 1,071,751 1,071,751 domestic exchange Foreign shares placed in Xu Yuanhui 666,789 666,789 domestic exchange Foreign shares placed in Yu Lingfeng 612,921 612,921 domestic exchange 5 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 Foreign shares placed in Chen Xinqiang 612,400 612,400 domestic exchange Foreign shares placed in Zhang Meilan 513,560 513,560 domestic exchange Foreign shares placed in Li Jianping 445,569 445,569 domestic exchange CORE PACIFIC-YAMAICHI Foreign shares placed in 424,550 424,550 INTERNATIONAL (H.K.) LIMITED domestic exchange Foreign shares placed in Chen Houping 423,561 423,561 domestic exchange Foreign shares placed in Liu Guosheng 345,575 345,575 domestic exchange Foreign shares placed in Lin Fan 303,400 303,400 domestic exchange There is no affiliated relationship between the top ten non-restricted tradable shareholders and the controlling shareholder China Military Equipment Group Co., Ltd. nor do they belong to the consistent actors stipulated in the Administrative Explanation on associated relationship among Measures for the Acquisition of Listed Companies; it is unknown to the company the aforesaid shareholders whether there is an affiliated relationship between the top ten non-restricted tradable shareholders as well as between the top ten non-restricted tradable shareholders and the other top ten shareholders, or whether they are included in the consistent actors stipulated in the Administrative Measures for the Acquisition of Listed Companies. 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 number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the report period □ Applicable √Not applicable 6 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 III. Significant issues III. Significant Issues I. Major changes of main accounting statement items and financial indicators in the reporting period, as well as reasons for the changes √ Applicable □ Not applicable During the reporting period, the Company's product sales and sales price decreased YOY, resulting in a loss of net profit. II. The progress of significant events and influence, as well as the analysis and explanation on resolving proposal. √ Applicable □ Not applicable 1.Cancel the Technology Center of the branch Chongqing Jianshe Motorcycle Co., Ltd. Chongqing Jianshe Motorcycle Co., Ltd. Branch Technology Center's business scope is motorcycle research and development, which is no longer the company's main business development direction. In order to further improve the company's business structure and reduce the level of operation, the company convened the 13th meeting of the eighth Board of Directors on January 14, 2019, and deliberated and passed the Proposal on Cancellation of Branch Technology Center (for details, see the Announcement on Cancellation of Branch Technology Center disclosed on January 16, 2019). The cancellation will not change the scope of the company's consolidated financial statements, will not affect the company's business development and sustained profitability, and will not harm the interests of the company and all shareholders. On March 29, 2019, Chongqing Municipal Market Supervision Administration issued the Notice of Cancellation of Foreign-invested Enterprises (ZY) YZXZ Zi [2019] No. 000137, confirming that the Technology Center of the company's branch had been canceled. 2. Purchase of equity in Chongqing Jianshe HANON Automobile Thermal Management System Co., Ltd. To further highlight the development of the main business, On March 31, 2019, the company held the 15th meeting of the eighth Board of Directors to consider and pass the Proposal on the Purchase of Equity and Related Party Transactions of Chongqing Jianshe HANON Automobile Thermal Management System Co.,Ltd. On April 8, 2019, the company signed the Stock Rights Transfer Agreement with Chongqing Jianshe Mechanical and Electric Co., Ltd. to purchase 24.64% equity of Jianshe Hanang held by Chongqing Jianshe Mechanical and Electric Co., Ltd. at 24.64% of the appraised value, i.e. 102.7433 million yuan. On April 11, 2019, it was approved and implemented by the company's first extraordinary shareholders' meeting in 2019. On April 18, 2019, the company has already paid 102.7433 million yuan for this share transfer. After the completion of this transaction, our company and HANON respectively hold 50% equity in Jianshe Hanang. According to Stock Rights Transfer Agreement, the period from the base date of this equity transfer evaluation (November 30, 2018) to the actual delivery date of the equity transfer is the transitional period of this equity transfer, during which the Company shall enjoy or bear the profits and losses arising from Jianshe HANON . 3. Joint venture Chongqing Pingshan Taikai Carburetor Co., Ltd. In order to improve the efficiency of the use of funds, the company and other shareholders of the joint venture Pingshan Taikai reduced the registered capital of Pingshan Taikai by a total of USD 9 million, of which the 7 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 company holds 50% equity in Pingshan Taikai and will recover the investment of USD 4.5 million. After the capital reduction is completed, the registered capital of Pingshan Taikai will be reduced from USD 19 million to USD 10 million US dollars. The capital reduction has been reviewed and approved by the 12th meeting of the eighth board of directors of the company on December 4, 2018, and by the 48th board meeting (temporary) of Pingshan Taikai on December 6, 2018.The industrial and commercial registration work for the capital reduction was completed on March 28, 2019. Summary of material issues Date of disclosure Index of provisional announcement For details, please refer to the related announcements Cancel the Technology Center of the of the company disclosed on The Securities Times, branch Chongqing Jianshe January 16,2019 Hong Kong Commercial Daily and Motorcycle Co., Ltd. www.cninfo.com.cn(Announcement No.:2019-001,2019-002) For details, please refer to the related announcements of the company disclosed on The Securities Times, January 16,2019 Hong Kong Commercial Daily and www.cninfo.com.cn(Announcement Purchase of equity in Chongqing Jia No.:2019-001,2019-003) nshe HANON For details, please refer to the related announcements Automobile Thermal Management S of the company disclosed on The Securities Times, ystem Co., Ltd. Hong Kong Commercial Daily and April 1,2019 www.cninfo.com.cn(Announcement No.:2019-014,2019-015, 2019-017, 2019-018, 2019-019 and 2019-023) For details, please refer to the related announcements of the company disclosed on The Securities Times, Joint venture Chongqing Pingshan Taikai December 5,2018 Hong Kong Commercial Daily and Carburetor Co., Ltd. www.cninfo.com.cn(Announcement No.:2018-069,2018-071) Progress in the implementation of share repurchase □ Applicable √ Not applicable Progress in the implementation of the reduction of the repurchased shares by means of centralized bidding □ Applicable √ Not applicable III. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer, directors, supervisors, senior executives or other related parties in the reporting period and commitments unfinished in implementation at the end of the reporting period □ Applicable √Not applicable No such cases in the reporting period. 8 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 IV.Prediction of Business performance for January- June 2019 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 Securities investments □ Applicable √ Not applicable No such cases in the Reporting Period VI. Investment in derivatives □ Applicable √Not applicable No such cases in the Reporting Period VII. The registration form of acceptance of investigation, communication and interview in the report period for future reference √ Applicable □Not applicable Way of Reception time Types of visitors Basic index reception Q: what is the purpose of acquiring the equity of Construction HANON? A: Further highlight the development of the main business, broaden the company's January 16,2019 By phone Other business scope in the field of auto parts, upgrade and expand the product technology capabilities, and achieve product and technology structure adjustment. Q: What’s the impact of the acquisition of Construction HANON's equity on the Company? A: In the early stage namely the preparation stage and product market development stage of HANON, with the scale of production and sales of the company has not yet formed, so there will be certain losses, which will affect March 26,2019 By phone Individual the investment income of the Company. However, in the long run, it will help the Company to participate in the competition in the middle and high-end market, avoiding future market competition risks and achieving a healthy development of the Company. VIII. External guarantee get out of line □ Applicable √Not applicable No such cases in the reporting period. 9 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2019 IX. Controlling shareholder and its related parties occupying non-business capital of the listed company □ Applicable √Not applicable No such cases in the reporting period. 10