Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 April 2016 1 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 I. Important Notice The Board of Directors ,Supervisory Committee, all directors, supervisors and senior executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. All of the directors presented the board meeting at which this Quarterly Report was examined. Mr. Li Zhaoting, The Company leader, Mr.Zhou Bo, Chief financial officer and the Mr..Zhou Bo, the person in charge of the accounting department (the person in charge of the accounting )declare: the financial report carried in this report is authentic and completed 2 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 II. Main financial data and changes of shareholders I. Main financial data and financial index Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not. □ Yes √ No Changes of this period over same This period Same period of last year period of last year(%) Operating income(RMB) 1,581,690,834.17 598,858,730.43 164.12% Net profit attributable to the shareholders 347,750,532.74 158,271,987.10 119.72% of the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the 269,369,501.10 34,492,437.26 680.95% shareholders of listed company(RMB) Cash flow generated by business -934,819,444.05 -58,734,373.46 operation, net(RMB) Basic earning per share(RMB/Share) 0.09 0.06 50.00% Diluted gains per 0.09 0.06 50.00% share(RMB/Share)(RMB/Share) Weighted average return on equity 2.40% 2.04% 0.36% (%) Changes of this period-end over End of this period End of last period same period-end of last year(%) Gross assets(RMB) 28,606,491,414.24 28,798,623,253.33 -0.67% Net assets attributable to the shareholders 14,668,221,597.95 14,319,481,941.28 2.44% of the listed company(RMB) Items and amount of non-current gains and losses √ Applicable □ Not applicable In RMB Amount (Year-beginning to the Items Notes end of the report period.) Non-current asset disposal gain/loss(including the write-off part for -1,872.47 which assets impairment provision is made) Govemment subsidy recognized in current gain and loss(excluding 95,649,849.99 those closely related to the Company’s business and granted under the 3 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 state’s policies) Other non-operating income and expenditure beside for the above items 750,000.00 Other profit/loss that meet the definition of exceptional profit/loss 203,555.54 Less: Influenced amount of income tax 14,407,999.97 Amount of influence of minority interests(After tax) 3,812,501.45 Total 78,381,031.64 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies 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 recognized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 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 210,114(including 191,376 shareholders holding A the voting power recovered at the 0 shareholders at the period-end shares and 18,738 shareholders holding B shares) end of the reporting period(if any) Shares held by the top 10 shareholders Amount of Pledging or freezing Share Properties of tradable shares Status Shareholder name proportion Quantity shareholder with Conditional of the Quantity % held shares Domestic Non Dongxu Group -State-owned legal 21.64% 829,975,697 829,975,697 Pledge 761,912,697 person Domestic Non Shijiazhuang Baoshi Electronic Group -State-owned legal 8.67% 332,382,171 Pledge 300,920,148 Co., Ltd. person Minsheng Royal Fund Management Co., Ltd.-Ping An Bank-Ping An Trust-Ping Other 4.78% 183,284,457 183,284,457 An Wealth* Huitai No.163 Single Fund 4 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Trust Bosera Capital-Ping An Bank- Ping An Trust-Ping An Wealth* Huitai No.164 Other 4.36% 167,155,426 167,155,426 Single Fund Trust Guangzhou Securities-China Guangfa Bank-Guangzhou Securities No.2 Other 3.44% 131,964,809 131,964,809 Collective Asset Management Plan of Kunpeng Dingcheng HuaAn Future Asset-ICBC-No.1 Asset Management Plan of Dongxu Other 2.52% 96,774,193 96,774,193 Optoelectronic’s Private Placement Dongxu Optoelectronic Technology Co., Ltd-Phase 1 for Employee Stock Other 1.89% 72,639,296 72,639,296 Ownership Plan State-owned legal China Securities Finance Co., Ltd. 1.64% 62,771,232 person Kunshan Development Zone State-owned legal 1.15% 43,988,269 43,988,269 State-invested Holding Co., Ltd. person Bank of China-Huaxia New Economic Other 0.95% 36,608,098 Mixed Securities Investment Funds Shares held by the Top 10 Shareholders of Non-restricted shares Number of the non-restricted Share type Shareholders’ Names shares held Share type Quantity Shijiazhuang Baoshi Electronic Group Co., Ltd. 332,382,171 RMB Common shares 332,382,171 China Securities Finance Co., Ltd. 62,771,232 RMB Common shares 62,771,232 Bank of China-Huaxia New Economic Mixed 36,608,098 RMB Common shares 36,608,098 Securities Investment Funds National social security fund 407 27,923,842 RMB Common shares 27,923,842 Central Huijin Investment Ltd. 24,205,500 RMB Common shares 24,205,500 Wang Wenxue 15,300,592 RMB Common shares 15,300,592 National social security fund 412 8,189,576 RMB Common shares 8,189,576 China Mensheng Bank-Oriental Featured mixed Open 7,000,000 RMB Common shares 7,000,000 Securities Investment Funds Yinhua Funds-Agricultural Bank of China-Yinhua 6,632,927 RMB Common shares 6,632,927 CSI Financial Asset management Plan China Mensheng Bank-Yinhua Shenzhen 100 index 6,462,257 RMB Common shares 6,462,257 securities investment fund Explanation on associated relationship or concerted Shijiazhuang Baoshi Electronic Group Co., Ltd, the first 10 shareholders 5 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 action of the above shareholders with unrestricted circulating shares and Dongxu Group Co., Ltd, Dongxu Optoelectronic Technology Co., Ltd., the first 10 shareholders- Association relationship existed in Employee Stock Ownership Plan Phase 1, constituting the relationship of persons acting in concert. Wang wenxue, the first 10 ordinary shareholders with shares without restricted condition, separately held 15,300,592 of the Company’s shares Note to the top 10 common stockholders involved in by means of the securities accounts with customer credit guarantee of margin financing & securities lending (If any) China Securities , which separately occupy 0.40% of the Company’s total shares. 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 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 III Significant Events 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 Same period of last Increase Financial index This period(RMB) Main reason for change year(RMB) /decrease Consolidated Balance sheet index Mainly due to the due in payment of purchase Notes receivable -57.22% 21,825,778.49 51,014,152.00 money and endorsements increase Mainly due to the increase of the advance Prepayments 359.45% payment for procurement because of the 1,924,694,013.81 418,910,587.57 business growth Engineering Mainly due to the increase of the procurement of 8802.22% material 3,401,983.66 38,214.99 project goods and materials Mainly due to adopting the note payment for the Notes payable 33.36% 547,569,238.30 410,594,929.94 procurement Mainly due to advances on sales by realized Advance payment -98.27% 1,696,808.30 97,920,689.41 sales in the current period Mainly due to the payment for the transfer of the Advance receipts -69.99% equity held by Xufei and Xuxin original 161,989,524.74 539,796,113.78 shareholders Consolidated income statement index Mainly due to the increase in business revenue Business income 164.12% 1,581,690,834.17 598,858,730.43 as the intensified market development efforts Mainly due to the increase in operating income Business cost 171.93% 1,052,404,374.82 387,008,712.20 resulted in the increase in operating costs Mainly due to the increase in operating income Business tax and 139.70% led to the increase of the corresponding business surcharge 15,952,780.71 6,655,407.72 tax and surcharges Mainly due to the increase in operating income resulted in the increase in corresponding freight Sales expense 130.33% 13,736,690.70 5,964,007.91 and miscellaneous charges, entertainment expenses and travel expenses and so on Administrative Mainly due to the business expansion led to the 59.06% expense 117,505,746.39 73,873,638.77 increase in staff wages, research fees etc. 7 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Asset impairment Mainly due to the increase in the quality of -92.63% loss 406,342.06 5,512,801.36 assets Non-operational -34.62% Mainly for the time delay of government subsidy income 95,857,790.53 146,612,477.61 Income tax Mainly due to the business expansion resulted in 46.38% expenses 60,750,772.80 41,500,719.51 the increase in profits Consolidated Cash flow statement index Mainly due to the business growth and the Net Cash flow increase in procurement led to the increase of generated by -1491.61% -934,819,444.05 -58,734,373.46 cash payment for the purchase of goods and business operation receiving service Net cash flow Mainly due to the payment for the transfer of the generated by -231.39% equity held by Xufei and Xuxin original -465,514,552.86 -140,475,266.25 investment shareholders Net cash flow Mainly due to the increase of repaying the generated by -154.97% principal and paying the interests, and the -424,474,217.67 772,255,350.24 financing reduction of financing amount II. The progress of significant events and influence, as well as the analysis and explanation on resolving proposal. √Applicable □Not applicable Examined an approved in the 18th board meeting of the seventh board of directors, the 20th meeting of the seventh board of supervisors and 2016 first extraordinary general shareholder meeting convened by the company, the company planned the non-public share-issuing for raising funds to invest and build the third 8.5-generation production line of the TFT-LCD glass substrate project in Fuqing City, Fujian Province. Currently, the project has been submitted to the China Securities Regulatory Commission (hereinafter referred to as "CSRC”) for deliberation and the company has received the Notice of Feedback Opinions on the Review of the Project needed Administrative Licensing from CSRC (No. 160620). Description of the website for disclosing Overview of material matters Date of disclosing provisional announcements The Announcement on Receiving the Notice of China Securities Journal , Securities Times, Shanghai Feedback Opinions on the Review of the April 21,2016 Securities News ,Hong Kong Commercial Daily and Project needed Administrative Licensing www.cninfo.com.cn. Announcement No.2016-046 from CSRC China Securities Journal , Securities Times, Shanghai The Reply to the feedback opinions on the April 26,2016 Securities News ,Hong Kong Commercial Daily and application files for non-public share-issuing www.cninfo.com.cn. Announcement No.2016-050 8 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 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 Time of Period of Commitment making Fulfillmen Commitment Type Contents commitme maker commitme t nt nt If listed companies plans to sell tradable stocks through the bid trading system of Shenzhen Stock Exchange and sell greater than 5% of shares Share within six months after the first sales, will Shijiazhuang Under Commitment on reduction disclose the contents specified by the Form Guide March 29, Long-term Baoshi Electronics Fulfillmen share reform commitme to Prompt Announcement of Removing 2007 effective Group Co., Ltd t nt Restriction on Sales of Non-tradable Stocks of Listed Companies through the prompt announcement of disclosing sales of listed companies. Commitment in the acquisition report or the report on equity changes Commitment made upon the assets replacement 1.From the date of commitment letter issued, except the managed hosting company for Dongxue Optoelectronic , this company and Commitm majority-owned subsidiaries do not in any way, ents on directly or indirectly engaged in business and horizontal Commitments Dongxue Optoelectronic and its subsidiaries are Under competitio December Long-term made upon Li Zhaoting the same, or similar, future Dongxue Fulfillmen n, related 22, 2011 effective issuance Optoelectronic shares and its subsidiaries are not t transaction engaged in the same or similar businesses. and capital 2.The company assurances against the use of occupation precious stones share any act prejudicial to the control relationship of Dongxu Optoelectronic interests and its wholly-owned subsidiaries, 9 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 holding, or causing Dongxue Optoelectronic shares and its wholly-owned subsidiaries, holding form business competition decisions. 3. The company will not directly invest, purchase and Dongxu Optoelectronic identical or similar business enterprises and projects. 4.If the assets owned by the Dongxu Optoelectronic . compete with , the company will adopt effective measures and give up the same business.5. If the reason of the oneself is the cause of horizontal competition with Baoshi Stock and resulted in losses to Baoshi Stock, the oneself will bear the relevant full responsibilities.6. Under the circumstance with in accordance with securities regulatory conditions, the oneself promised that all the stake that entrusted to the escrow company managed by Baoshi Stock will be injected into Baoshi Stock. As long as the oneself is the actual controller of Baoshi Stock, the commitment is valid. 1.From the date of commitment letter issued, except the managed hosting company for Dongxue Optoelectronic , this company and majority-owned subsidiaries do not in any way, directly or indirectly engaged in business and Dongxue Optoelectronic and its subsidiaries are the same, or similar, future Dongxue Optoelectronic shares and its subsidiaries are not Commitm Dongxu Group, engaged in the same or similar businesses. ents on Dongxu 2.The company assurances against the use of horizontal Optoelectronic precious stones share any act prejudicial to the Under competitio April Long-term Investment Co., control relationship of Dongxu Optoelectronic Fulfillmen n, related 1,2012 effective Ltd., Shijiazhuang interests and its wholly-owned subsidiaries, t transaction Baoshi Electronics holding, or causing Dongxue Optoelectronic and capital Group Co., Ltd shares and its wholly-owned subsidiaries, holding occupation form business competition decisions. 3. The company will not directly invest, purchase and Dongxu Optoelectronic identical or similar business enterprises and projects. 4.If the assets owned by the Dongxu Optoelectronic . compete with , the company will adopt effective measures and give up the same business. 5. If the company has horizontal 10 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 competition with Dongxu Optoelectronic and lead to lose to it, the company will bear all the responsibilities.6. Before December 31, 2015, by way of designated placement, the company will transfer all the shares that Dongxu Optoelectronic Investment, entrusted to Zhengzhou Xufei company and all the shares that are entrusted to Baoshi Group, to Dongxu Optoelectronics; Before December 31, 2016, by way of designated placement, the company will transfer all the shares that Dongxu Group entrusted to Dongxu Yingkou and Sichuan Xuhong to Dongxu Optoelectronics. Within the time limit mentioned above, if there were the external factors such as a depression of industry as a whole, or the changes in regulatory requirements, which lead to the result that the shares of hosting company can not meet the requirements of capital investment, Li Zhaoting, the actual controller, Dongxu Optoelectronic Investment , Dongxu Group and Baoshi Group as well as the company will actively negotiate with related parties, continue to entrust the above mentioned shares and the power of management to Dongxu Optoelectronics. Within the period when the company is still the controlling shareholder of Dongxu Optoelectronics, the commitments are in effect. To avoid the horizontal competition with the issuer, the company’s actual controller-Zhaoting, Li and the holding company-Dongxu group promised: 1. As of this declaration and from the date of commitment letter issued, except the Commitm managed hosting companies, the other companies ents on directly or indirectly controlled by the controller horizontal or holding company have no horizontal Under Li Zhaoting; competitio December Long-term competitions with Dongxu Optoelectronic Fulfillmen Dongxu Group n, related 16,2015 effective Technology Co., Ltd. 2. Any other companies t transaction controlled by the actual controller or holding and capital company shall avoid businesses identical or occupation similar to the company may lead to a competitive relation and cannot do any harm activities to Dongxu Optoelectronic Technology Co., Ltd and companies controlled by Dongxu Optoelectronic Technology Co., Ltd as long as there are no 11 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 alterations of the actual controller and the holding company. Any businesses opportunities under the main business scope of Dongxu Optoelectronic Technology Co., Ltd and its controlled companies shall not take by the companies controlled by the actual controller or the holding company, and the business opportunities shall be given to Dongxu Optoelectronic Technology Co., Ltd and its controlled companies.3. As long as the actual controller and the holding company are the same, the actual controller and the holding company shall continue to strictly performance the relevant declarations and commitments of avoiding horizontal competition. As of the date of Share Dongxu Group Co., Ltd. subscribed for 25.01% disclosure limited of the shares privately issued by the Company and April April Dongxu Group of the commitme promised that the period of sale restriction of such 18,2013 18,2016 report has nt shares was 36 months from the first day of listing. been completed Guangzhou Securities Co., Ltd., Huaan It was promised that after Dongxu Optoelectronic Future Asset Technology Co., Ltd completed the non public Management Share issuance of shares to the company and specific Under (Shanghai) Co., limited objects for raising funds, the new shares December December Fulfillmen Ltd.;Minsheng commitme subscribed by the company shall not be 16,2015 16,2016 t Bank Fund nt transferred to any others in 12 months Management Co., commenced from the publicly listed date of the Ltd.; Boshi Assets new shares Management Co., Ltd. Dongxu The company, one of the subscription objects, Group;Changjiang promised that after Dongxu Optoelectronic Securities Technology Co., Ltd completed the non public (Shanghai )Asset issuance of shares to the company and specific Under Management Co., objects for raising funds, the shares (New shares) December December Fulfillmen Ltd.;Kunshan issued by Dongxu Optoelectronic Technology 16,2015 16,2018 t Development Co., Ltd and subscribed by the company shall not Zone State be transferred to any others in 36 months Investment Co., commenced from the publicly listed date of the Ltd.;Beijing new shares. 12 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Yingfei Hailin Investment Center (Limited partnership). In view of:The main business of Dongxu Optoelectronic is the production of TFT-LCD glass substrate, and the company now is applying for non-public offering of ,bonds (2) Dongxu Group is the controlling shareholder of Dongxu Optoelectronic; and during the period of holding, Dongxu Group has signed patent license contracts separately with Dongxu Optoelectronic and its subsidiaries including Wuhu Dongxu Optoelectronic Science and Technology Co., Ltd. (hereinafter referred to as Wuhu Optoelectronic), Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. (hereinafter referred to as Wuhu Equipment) and Shijiazhuang Dongxu Optoelectronic Equipment Technology Co., Ltd. (hereinafter referred to as Shijiazhuang Equipment). For this purpose, Dongxu Group has Other made following promises: Any patents related to Valid for 5 Under February Dongxu Gruop Commitm panel display glass substrate not included in the years Fulfillmen 8,2015 ent aforesaid Contract on the Licensing of Patent t Exploitation obtained by Dongxu group in the future, Dongxu group shall sign a free contract of licensing the new pertinent patents with the company and the company’s subsidiaries (Wuhu Optoelectronic Technology Co.,Ltd, Wuhu Equipment Company and Shijiazhuang Equipment Company) with the same articles of the former patent licensing contract. After the company successfully completed the issuance of corporate bonds, whether Dongxu group control the company during the duration of the bonds, Dongxu group shall renew the patent licensing contract unreserved with the company and the company’s subsidiaries (Wuhu Optoelectronic Technology Co.,Ltd, Wuhu Equipment Company and Shijiazhuang Equipment Company) under the company’s requirement until the bonds expired. In view of: Other June Long-term Under Dongxu Gruop The main business of Dongxu Optoelectronic is Commitm 17,2015 effective Fulfillmen the production of TFT-LCD glass substrate, and 13 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 ent the company now is applying for non-public t offering of stock; (2) Dongxu Group is the controlling shareholder of Dongxu Optoelectronic; and during the period of holding, Dongxu Group has signed patent license contracts separately with Dongxu Optoelectronic and its subsidiaries including Wuhu Dongxu Optoelectronic Science and Technology Co., Ltd. (hereinafter referred to as Wuhu Optoelectronic), Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. (hereinafter referred to as Wuhu Equipment) and Shijiazhuang Dongxu Optoelectronic Equipment Technology Co., Ltd. (hereinafter referred to as Shijiazhuang Equipment). For this purpose, Dongxu Group has made following promises: within the term of validity involving patent right stated in patent license contracts, whether Dongxu Optoelectronic is in the control of Dongxu Group or not, Dongxu Group promises that when the above mentioned patent license contracts expire, the group will unconditionally renew the contracts with Dongxu Optoelectronic and its subsidiaries (Wuhu Optoelectronic, Wuhu Equipment, Shijiazhuang Equipment and etc) according to the terms of original contracts based on the requirements of Dongxu Optoelectronic. (a) Promised that not freely or unfairly transfer interests to other units or individuals, nor adopt other ways to jeopardize the company’s interests. (b) Promised that restrict the post consumer Li Zhaoting, behaviors of the directors and senior management Gongxin, Zhou personnel. (c) Promised that not use the Bo, Niu Jianlin, company's assets to engage in the investment Lu Guihua, Mu Other &consuming activities which are irrelevant to Under Tiehu, Zhang February Long-term Commitm perform the duties. (d) Promised that the salary Fulfillmen Shuangcai, Shi 6,2016 effective ent system set up by the board of directors or the t Zhiqiang , Xiao Remuneration Committee is relevant to the Zhaoxiong, Liu implementation status of the company’s fill-up Wentai and Zhou return measures. (e) Promised that the vesting Bo conditions of the company’s equity incentive are relevant to the implementation status of the company’s fill-up return measures. (f) Promised the full implementation of the relevant fill-up 14 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 return measures established by the company and any commitment related to the fill-up return measures, if such commitment is breached and resulted in losses to the company or the investors, the concerning party shall take the responsibility for compensating the company or the investors according to the law. As one of the relevant responsibility bodies of the fill-up return measures, if the oneself breaches the above-said commitments or refuse to fulfill the above-said commitments, the oneself agrees the punishments or relevant supervise measures carried out in accordance with the regulations and rules issued or enacted by CSRC, Shenzhen Stock Exchange and other securities regulatory organizations. Not act in excess of authority to interfere the Other Under Dongxu Group, Li company’s management and operating February Long-term Commitm Fulfillmen Zhaoting activities, not encroach on the interests of the 6,2016 effective ent t company. In view of: Dongxu Optoelectronic Technology Co., Ltd. is applying for public offering of corporate bonds, and the total scale of bonds will not exceed 1 billion yuan. After the deduction of issue expenses, all the funds raised are planed to be used to supplement the liquidity and support the R&D, production and material purchase of glass substrate and the equipment. Thus, the To raise demands of business operation and expansion in Dongxu funds to the company will be satisfied. The company Valid for 5 Under Optoelectronic February use the promises: 1. The funds raised through the public years Fulfillmen Technology Co., 10,2015 commitme offering of corporate bonds will not be directly or t Ltd. nt indirectly invested in real estate development business, or used to increase the capital fund or as loans in subsidiaries engaged in real estate business; 2. the funds raised through the public offering of corporate bonds will not be used for real estate development business in any form. The term of validity of the promises is consistent with the duration of the corporate bonds issued in the company this time. Equity incentive commitment Other Dongxu Group Share The holding company-Dongxu group and its July April 11, As of the 15 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 commitments holdings controlled subsidiaries have planned to buy the 11,2015 2016 date of made to commitme company’s shares in the transaction market (i.e disclosure minority nt secondary market) via Trading System of the of the shareholders Shenzhen Stock Exchange with the total amount report has no more than RMB 100 million in six months been commenced from the date of the announcement completed (Jul 11, 2015). Dongxu group promised that it . will not reduce its stake in six months subsequently. In light of Dongxu Optoelectronic Technology Co., Ltd planned to release its 2015 annual report on Feb 6, 2016, and the impact of the window period for regular reports, the company’s controlling shareholder plans to extend three months for the plan of buying shares, beyond that, any other commitments unchanged. Jixing New Material Investment (HK) Co., Ltd. and Lubao, Wang (The legal representative of the company (HK)) jointly promised that the net Performan profits after tax attributable to Jixing New ce Material Investment Co., Ltd in year 2015, year Wang Lubao, commitme 2016, year 2017 shall accordingly be not less than Jixing New Under nt and RMB30 million, RMB60 million, RMB 100 January December Material Fulfillmen compensat million. If the net profits attributable to Jixing 20,2015 31,2018 Investment (HK) t ion New Material Investment Co., Ltd after audited in Co., Ltd. arrangeme any year of year 2015, year 2016 and year 2017 nts are less than the promised net profits, the difference shall be compensated by Jixing New Material Investment (HK) Co., Ltd. and Lubao, Wang in cash. To ensure Dongxu Optoelectronic Technology Co., Ltd realizing expected benefits on the M&A of Shanghai Tanyuan Huigu New Materials Technology Co., Ltd, the promisee voluntarily Performan promised the profits of Shanghai Tanyuan Huigu ce Guo Shouwu, Ma New Materials Technology Co., Ltd for the next commitme Shengjie, Wu three years as follows: (a) Business performance Under nt and March December Haixia , Shen commitment: the net profits of Shanghai Tanyuan Fulfillmen compensat 8,2016 31,2018 Wenzhuo and Huigu New Materials Technology Co., Ltd in t ion Shenli year-2016, year-2017, year-2018 shall arrangeme accordingly not be less than RMB 5 million, nts RMB 10 million, RMB 20 million. (b) Compensation mode: if the net profits of Shanghai Tanyuan Huigu New Materials Technology Co., Ltd in year-2016, year-2017, 16 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 year-2018 accordingly do not reach the promised net profits, the promised party shall fully compensate the difference by cash. Executed timely Yes or not? IV.Prediction of Business performance for January- June 2016 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. Registration form of such Activities as Reception, Research, Communication, Interview in the Reporting Period √Applicable □Not applicable Reception time Way of reception Types of visitors Basic index Juchao website(www.cninfo.com.cn) : February 18,2016 By Phone Organization Investor relations information Juchao website(www.cninfo.com.cn): March 10,2016 Field research Organization Investor relations information January 1, 2016 -March 31,2016 By Phone Individual None VIII. External guarantee get out of line □ Applicable √Not applicable The Company has no external guarantee get out of the line in the Period 17 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 IX. Controlling shareholder and its related parties occupying non-business capital of the listed company □ Applicable √Not applicable There are no controlling shareholder and its related parties occupying non-business capital of the listed company in Period IV. Financial Statement I. Financial statement 1. Consolidated balance sheet Prepared by:Dongxu Optoelectronic Technology Co., Ltd. March 31,2016 In RMB Items At the end of term Beginning of term Current asset: Monetary fund 10,474,163,241.67 12,409,510,170.26 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 21,825,778.49 51,014,152.00 Account receivable 1,345,429,139.10 1,042,538,312.51 Prepayments 1,924,694,013.81 418,910,587.57 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other account receivable 57,359,641.35 55,197,871.28 Repurchasing of financial assets Inventories 2,012,976,069.72 2,177,979,684.06 18 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Assets held for sales Non-current asset due in 1 year 139,395.72 Other current asset 1,185,405,223.79 1,216,401,769.76 Total of current assets 17,021,853,107.93 17,371,691,943.16 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset Expired investment in possess Long-term receivable Long term share equity investment 72,206,625.47 72,426,252.41 Property investment Fixed assets 6,790,889,488.06 6,900,189,927.76 Construction in progress 3,651,610,948.26 3,433,016,388.90 Engineering material 3,401,983.66 38,214.99 Fixed asset disposal Production physical assets Gas & petrol Intangible assets 476,015,397.29 462,291,286.50 R & D petrol Goodwill 28,896,444.38 Long-germ expenses to be amortized 16,052,106.09 16,560,387.39 Deferred income tax asset 305,189,850.42 299,129,677.91 Other non-current asset 240,375,462.68 243,279,174.31 Total of non-current assets 11,584,638,306.31 11,426,931,310.17 Total of assets 28,606,491,414.24 28,798,623,253.33 Current liabilities Short-term loans 3,469,000,000.00 3,783,300,000.00 Loan from Central Bank Deposit received and hold for others Call loan received Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable 547,569,238.30 410,594,929.94 19 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Account payable 638,136,804.30 675,736,226.62 Advance payment 1,696,808.30 97,920,689.41 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 31,522,244.21 36,856,257.86 Tax payable 114,797,988.59 105,451,423.67 Interest payable 63,984,390.39 55,405,608.76 Dividend payable 20,000,000.00 20,000,000.00 Other account payable 161,989,524.74 539,796,113.78 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Liabilities held for sales Non-current liability due in 1 year 954,000,000.00 876,987,200.00 Other current liability 78,869,933.33 93,402,963.08 Total of current liability 6,081,566,932.16 6,695,451,413.12 Non-current liabilities: Long-term loan 6,005,612,000.00 6,249,397,300.00 Bond payable 988,973,274.00 988,400,388.00 Including:preferred stock Sustainable debt Long-term payable 50,054,541.66 57,000,000.00 Long-term payable employees’s remuneration Special payable Expected liabilities Deferred income 287,671,268.56 246,925,387.61 Deferred income tax liability Other non-current liabilities 220,000,000.00 Total non-current liabilities 7,552,311,084.22 7,541,723,075.61 Total of liability 13,633,878,016.38 14,237,174,488.73 Owners’ equity Share capital 3,835,000,526.00 3,835,000,526.00 Other equity instrument 20 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Including:preferred stock Sustainable debt Capital reserves 9,392,378,029.82 9,391,388,905.89 Less:Shares in stock 9,011,520.00 9,011,520.00 Other comprehensive income Special reserves Surplus reserves 132,723,528.42 132,723,528.42 Common risk provision Undistributed profit 1,317,131,033.71 969,380,500.97 Total of owner’s equity belong to the parent company 14,668,221,597.95 14,319,481,941.28 Minority shareholders’ equity 304,391,799.91 241,966,823.32 Total of owners’ equity 14,972,613,397.86 14,561,448,764.60 Total of liabilities and owners’ equity 28,606,491,414.24 28,798,623,253.33 Legal Representative: Li Zhaoting Person in charge of accounting:Zhuo Bo Accounting Dept Leader:Zhou Bo 2.Parent Company Balance Sheet In RMB Items At the end of term Beginning of term Current asset: Monetary fund 7,522,035,434.29 9,835,157,652.41 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 8,800,440.00 611,200.00 Account receivable 18,764,968.63 25,928,808.63 Prepayments 56,567,118.92 5,148,881.09 Interest receivable Dividend receivable 380,000,000.00 380,000,000.00 Other account receivable 1,333,639,595.50 1,257,350,098.69 Inventories 456,851,300.49 337,875,634.06 Assets held for sales Non-current asset due in 1 year Other current asset 19,211.84 19,211.84 Total of current assets 9,806,678,069.67 11,842,091,486.72 21 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Non-current assets: Disposable financial asset Expired investment in possess Long-term receivable Long term share equity investment 10,930,791,252.96 9,838,056,379.92 Property investment Fixed assets 52,804,187.76 54,559,265.28 Construction in progress Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 10,114,660.14 10,196,051.07 R & D petrol Goodwill Long-germ expenses to be amortized Deferred income tax asset 784,271.45 784,271.45 Other non-current asset Total of non-current assets 10,994,494,372.31 9,903,595,967.72 Total of assets 20,801,172,441.98 21,745,687,454.44 Current liabilities Short-term loans 2,280,000,000.00 2,630,000,000.00 Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable 193,087,050.00 69,458,800.00 Account payable 13,894,234.87 131,278,936.59 Advance payment 421,587.90 115,587.90 Employees’ wage payable 3,581,033.76 3,725,606.27 Tax payable 4,951,027.58 15,710,028.19 Interest payable 55,325,444.44 42,908,777.78 Dividend payable Other account payable 2,928,453,294.67 3,495,678,670.89 Classified as held for sale debt 22 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Non-current liability due in 1 year 200,000,000.00 Other current liability 20,000.00 20,000.00 Total of current liability 5,679,733,673.22 6,388,896,407.62 Non-current liabilities: Long-term loan 360,000,000.00 640,000,000.00 Bond payable 988,973,274.00 988,400,388.00 Including:preferred stock Sustainable debt Long-term payable Long-term payable to employees Special payable Expected liabilities Deferred income 5,000.00 5,000.00 Deferred income tax liability Other non-current liabilities Total of Non-current liabilities 1,348,978,274.00 1,628,405,388.00 Total of liability 7,028,711,947.22 8,017,301,795.62 Owners’ equity Share capital 3,835,000,526.00 3,835,000,526.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 9,322,094,967.43 9,321,098,967.43 Less:Shares in stock 9,011,520.00 9,011,520.00 Other comprehensive income Special reserves Surplus reserves 113,734,304.09 113,734,304.09 Undistributed profit 510,642,217.24 467,563,381.30 Total of owners’ equity 13,772,460,494.76 13,728,385,658.82 Total of liabilities and owners’ equity 20,801,172,441.98 21,745,687,454.44 3.Consolidated Income statement In RMB 23 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Items Amount in this period Amount in last period I. Income from the key business 1,581,690,834.17 598,858,730.43 Incl:Business income 1,581,690,834.17 598,858,730.43 Interest income Insurance fee earned Fee and commission received II. Total business cost 1,250,579,052.09 532,052,836.45 Incl:Business cost 1,052,404,374.82 387,008,712.20 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 15,952,780.71 6,655,407.72 Sales expense 13,736,690.70 5,964,007.91 Administrative expense 117,505,746.39 73,873,638.77 Financial expenses 50,573,117.41 53,038,268.49 Asset impairment loss 406,342.06 5,512,801.36 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) -219,626.96 Incl: investment gains from affiliates Gains from currency exchange(“-”for loss) III. Operational profit(“-”for loss) 330,892,155.12 66,805,893.98 Add :Non-operational income 95,857,790.53 146,612,477.61 Including:Income from disposal of non-current assets Less:Non business expenses 6,257.47 42,970.83 Incl:Loss from disposal of non-current assets 1,872.47 IV.Total profit(“-”for loss) 426,743,688.18 213,375,400.76 Less:Income tax expenses 60,750,772.80 41,500,719.51 V. Net profit 365,992,915.38 171,874,681.25 Net profit attributable to the owners of parent company 347,750,532.74 158,271,987.10 Minority shareholders’ equity 18,242,382.64 13,602,694.15 24 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 VI. Other comprehensive income Net of profit of other comprehensive income attributable to owner s of the parent company. (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit plans of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss. (II) Other comprehensive income that will be reclassified into profit o r loss. 1.Other comprehensive income under the equity method investee can be reclassified into profit or loss. 2.Gains and losses from changes in fair value available for sale fi nancial 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 Net of profit of other comprehensive income attributable to Minor ity shareholders’ equity VII. Total comprehensive income 365,992,915.38 171,874,681.25 Total comprehensive income attributable to the owner of the 347,750,532.74 158,271,987.10 parent company Total comprehensive income attributable minority shareholders 18,242,382.64 13,602,694.15 VIII. Earnings per share (I)Basic earnings per share 0.09 0.06 (II)Diluted earnings per share 0.09 0.06 If there are entities merged under common control, their net profit realized before the merger were totaled to RMB***. While it was RMB*** previous period. Legal Representative:Li Zhaoting Person in charge of accounting:Zhou Bo Accounting Dept Leader:Zhou Bo 25 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 4. Income statement of the Parent Company In RMB Items Amount in this period Amount in last period I. Income from the key business 227,019,059.10 2,404,239.32 Less:Business cost 132,893,796.16 534,875.83 Business tax and surcharge 42,000.00 309,381.25 Sales expense 13.00 99.00 Administrative expense 13,225,719.79 15,686,433.58 Financial expenses 37,597,734.18 35,108,028.41 Asset impairment loss Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) -219,626.96 Incl: investment gains from affiliates II. Operational profit(“-”for loss) 43,040,169.01 -49,234,578.75 Add :Non-operational income 38,666.93 3,824.00 Including:Income from disposal of non-current assets Less:Non business expenses 41,000.83 Incl:Loss from disposal of non-current assets 41,000.83 III.Total profit(“-”for loss) 43,078,835.94 -49,271,755.58 Less:Income tax expenses IV. Net profit(“-”for net loss) 43,078,835.94 -49,271,755.58 V.Net of profit of other comprehensive income (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit plans of changes in ne t debt or net assets 2.Other comprehensive income under the equity method inv estee can not be reclassified into profit or loss. ( II ) Other comprehensive income that will be reclassified into p rofit or loss. 1.Other comprehensive income under the equity method inv estee can be reclassified into profit or loss. 2.Gains and losses from changes in fair value available for s 26 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 ale financial assets 3.Held-to-maturity investments reclassified to gains and los ses 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 comprehensive income 43,078,835.94 -49,271,755.58 VII. Earnings per share: (I)Basic earnings per share (II)Diluted earnings per share 5. Consolidated Cash flow statement In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or rending of services 1,492,494,598.14 519,179,640.50 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 Net cash received from reinsurance business Net increase of client deposit and investment Net increase of the financial assets that are measured at fair value and whose movement is counted to the current gain and loss Cash received as interest, processing fee and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned 102,343,332.12 4,354,246.00 Other cash received from business operation 155,626,401.01 853,635,703.93 Sub-total of cash inflow 1,750,464,331.27 1,377,169,590.43 Cash paid for purchasing of merchandise and services 2,282,862,743.80 577,108,284.02 Net increase of client trade and advance 27 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Net increase of savings n 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 140,977,434.66 106,946,029.90 Taxes paid 187,365,571.21 163,570,527.12 Other cash paid for business activities 74,078,025.65 588,279,122.85 Sub-total of cash outflow from business activities 2,685,283,775.32 1,435,903,963.89 Cash flow generated by business operation, net -934,819,444.05 -58,734,373.46 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 1,456,438.37 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 6,120,000.00 Sub-total of cash inflow due to investment activities 6,120,000.00 1,456,438.37 Cash paid for construction of fixed assets, intangible assets 164,168,185.45 91,931,704.62 and other long-term assets Cash paid as investment 50,000,000.00 Net increase of loan against pledge Net cash received from subsidiaries and other operational 307,466,367.41 units Other cash paid for investment activities Sub-total of cash outflow due to investment activities 471,634,552.86 141,931,704.62 Net cash flow generated by investment -465,514,552.86 -140,475,266.25 III.Cash flow generated by financing Cash received as investment 500,000.00 2,000,000.00 Incl: Cash received as investment from minor shareholders 500,000.00 Cash received as loans 575,000,000.00 1,110,000,000.00 Cash received from bond placing Other financing –related ash received 259,587,557.66 Sub-total of cash inflow from financing activities 835,087,557.66 1,112,000,000.00 Cash to repay debts 1,055,801,800.00 191,909,293.14 28 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Cash paid as dividend, profit, or interests 161,509,621.90 147,835,356.62 Incl: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 42,250,353.43 Sub-total of cash outflow due to financing activities 1,259,561,775.33 339,744,649.76 Net cash flow generated by financing -424,474,217.67 772,255,350.24 IV. Influence of exchange rate alternation on cash and cash 2,714,265.17 equivalents V.Net increase of cash and cash equivalents -1,822,093,949.41 573,045,710.53 Add: balance of cash and cash equivalents at the beginning 11,964,769,404.73 3,349,892,384.04 of term VI ..Balance of cash and cash equivalents at the end of term 10,142,675,455.32 3,922,938,094.57 6. Cash Flow Statement of the Parent Company In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or rending of services 260,102,617.67 1,238,860.00 Tax returned 77,000.00 155,285.79 Other cash received from business operation 159,509,303.96 652,383,248.30 Sub-total of cash inflow 419,688,921.63 653,777,394.09 Cash paid for purchasing of merchandise and services 339,861,960.78 2,334,233.47 Cash paid to staffs or paid for staffs 3,129,144.31 8,250,030.14 Taxes paid 8,001,056.42 2,485,250.46 Other cash paid for business activities 485,075,155.07 618,444,110.50 Sub-total of cash outflow from business activities 836,067,316.58 631,513,624.57 Cash flow generated by business operation, net -416,378,394.95 22,263,769.52 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 323,000,000.00 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 6,120,000.00 29 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Sub-total of cash inflow due to investment activities 6,120,000.00 323,000,000.00 Cash paid for construction of fixed assets, intangible assets 8,200.00 and other long-term assets Cash paid as investment 1,392,801,140.00 182,345,300.00 Net cash received from subsidiaries and other operational units Other cash paid for investment activities Sub-total of cash outflow due to investment activities 1,392,809,340.00 182,345,300.00 Net cash flow generated by investment -1,386,689,340.00 140,654,700.00 III.Cash flow generated by financing Cash received as investment Cash received as loans 430,000,000.00 960,000,000.00 Cash received from bond placing Other financing –related ash received Sub-total of cash inflow from financing activities 430,000,000.00 960,000,000.00 Cash to repay debts 860,000,000.00 Cash paid as dividend, profit, or interests 50,054,483.17 32,746,619.60 Other cash paid for financing activities Sub-total of cash outflow due to financing activities 910,054,483.17 32,746,619.60 Net cash flow generated by financing -480,054,483.17 927,253,380.40 IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash equivalents -2,283,122,218.12 1,090,171,849.92 Add: balance of cash and cash equivalents at the beginning 9,835,157,652.41 1,736,774,243.99 of term VI ..Balance of cash and cash equivalents at the end of term 7,522,035,434.29 2,826,946,093.91 II. Auditor’ report Is the First Quarterly Report be audited? □ Yes √No The First Quarterly report is not audited. 30 Dongxu Optoelectronic Technology Co., Ltd. The First Quarterly Report 2016 Dongxu Optoelectronic Technology Co., Ltd. Board Chairman: Li Zhaoting Issue day approved by the Board of Directors:April 28,2016 31