Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 August 2017 1 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 I. Important Notice, Table of Contents and Definitions 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. Mr.Li Zhaoting, The Company leader, Mr. Huang Jinliang,Chief financial officer and the Mr.Gao Feipeng, 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 this semi-annual report. All the directors attended the board meeting for reviewing the semi-annual Report. All the directors attended the board meeting for reviewing the Annual Report. The development strategy, operation plan and other forward-looking statements involved in this report will not constitute any substantive commitment to the investors by the Company. Investors please be aware of the investment risks. The company has already described the risk items existed in details in the report with reference to (IV) possible risks of X Operation Conditions Discussion and Analysis. The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. 2 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Table of Contents 2017 Semi-Annual Report I.Important Notice and Definitions II. Corporate Profile and Key Financial Indicators III. Business Profile IV. Performance Discussion and Analysis V. Important Events VI. Change of share capital and shareholding of Principal Shareholders VII. Situation of the Preferred Shares VIII .Information about Directors, Supervisors and Senior Executives IX. Corporate Bonds X. Financial Report XI. Documents available for inspection 3 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Definition Terms to be defined Refers to Definition Company Law Refers to Company Law of the People’s Republic of China Securities Law Refers to Securities Law of the People’s Republic of China CSRC Refers to China Securities Regulatory Commission SZSE Refers to Shenzhen Stock Exchange Tunghsu Group Refers to Tunghsu Group Co., Ltd. Baoshi Group Refers to Shijiazhuang Baoshi Electronics Group Co., Ltd Dongxu Optoelectronic , Company, The Refers to Dongxu Optoelectronic Technology Co., Ltd. Company Guangzhou Securities Co., Ltd. Guangzhou Securities , Sponsor institutions Refers to Dongxu(Yingkou)Optoelectronic Refers to Dongxu(Yingkou)Optoelectronic Display Co., Ltd. Xuhong Optoelectronic Refers to Sichuan Xuhong Optoelectronic Technology Co., Ltd. Wuhu Dongxu Optoelectronic Technology Co., Ltd., was the implementation unit of the non-public item to raise money for and Wuhu Optoelectronic Refers to invest in of “The Project of Production Line for Panel Display Plate” in 2013 Wuhu Equipment Refers to Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. Shijiazhuang Equipment Refers to Shijiazhuang Dongxu Optoelectronic Equipment Technology Co., Ltd. Dongxu(Kunshan)Display material Co., Ltd., In 2015, was the implementation unit of the non-public item to raise money for and Dongxu (Kunshan ) Refers to invest in “Project of Production Line for the 5th-generation CF for TFT-LCD”. Dongxu Construction Group Co., Ltd.( Original Sichuan Ruiyi Dongxu Construction Refers to Construction Engineering Co., Ltd.) Fuzhou Xufu Optoelectronic Technology Co., Ltd., In 2016, was the Fuzhou Xufu Refers to non-public item to raise money for and invest in “Project of Production Line for the 8.5th-generation CF for TFT-LCD” Fuzhou Dongxu Optoelectronic Technology Co., Ltd., In 2016, was Fuzhou Optoelectronic Refers to the non-public item to raise money for and invest in “Project of Production Line for the 8.5th-generation CF for TFT-LCD” Dongxu finance Tunghsu Group Finance Co., Ltd. 4 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Shanghai Tanyuan Huigu Refers to Shanghai Tanyuan Huigu New Material Technology Co., Ltd. Mingshuo Technology Refers to Mingshuo (Beijing) Electronic Technology Co., Ltd Shanghai Sunlong Bus Co., Ltd. , SUNLONG Refers to 2017 issue of shares and payment of cash to buy the assets of the enter prise BOE Refers to BOE Technology Group Co., Ltd. IVO Refers to Infovision Optoelectronics Co., Ltd. CSOT Refers to China Star optoelectronics Technology Co., Ltd. JONHON Refers to China Aviation Optical-Electrical Technology Co Ltd Innolux Refers to Innolux Display Corporation Tianma Refers to Tianma Microelectronics Co Ltd TFT-LCD Refers to Thin Film Transistor Liquid Crystal Display LTPS Refers to Low Temperature Poly-silicon AMOLED Refers to Active-matrix organic light emitting diode A thin glass sheet with extremely smooth surface is a basic component of constituting LCD display device as well as one of the critical basic Glass substrate Refers to materials in panel display industry. The glass sheet can be divided into various generations by its size, and the higher the generation is, the bigger the size will be. G5 glass substrate Refers to The size of the 5th-generation glass substrate is 1100 mm×1300 mm. G6 glass substrate Refers to The size of the 6th-generation glass substrate is 1500 mm×1850 mm. G8.5glass substrate Refers to The size of the 8.5th-generation glass substrate is 2200mm×2500mm Critical original materials of LCD panel for realizing colorization CF Refers to display A two-dimensional carbon material composed of carbon atoms closely Polaroid Refers to and cyclically packed by benzene ring structures (ie, hexagonal honeycomb structures) Refers to two-dimensional carbon materials related to grapheme, with Grapheme materials Refers to a layer less than 10 carbon atoms In addition to mobile phones, tablet PCs and other displays, for the Cover glass Refers to touch screen touch module, display and non-touch screen display to protect the transparent glass lens 5 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 II. Corporate Profile and Key Financial Indicators 1. Company Information Stock abbreviation Dongxu Optoelectronic, Dongxu B Stock code: 000413、200413 Stock abbreviation after Dongxu Optoelectronic, Dongxu B change (if any) Stock exchange for listing Shenzhen Stock Exchange Name in Chinese 东旭光电科技股份有限公司 Chinese Abbreviation 东旭光电 English name (If any) Dongxu Optoelectronic Technology Co., Ltd. English abbreviation (If any) Dongxu Optoelectronic Legal Representative Li Zhaoting 2. Contact person and contact manner Board secretary Securities affairs Representative Name Gong Xin Wang Qingfei No.5 Court, No.23 A Fuxing Road, No.5 Court, No.23 A Fuxing Road, Contact address Haidian District, Beijing Haidian District, Beijing Tel 010-68297016 010-68297016 Fax 010-68297016 010-68297016 E-mail gongxin_dx@126.com wangqingfei@dong-xu.com 3. Other (1). Way of contact Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not □ Applicable √ Not applicable Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more details in annual report 2016. (2). Information inquiry Whether information disclosure and preparation place changed in reporting period or not □ Applicable √ Not applicable None of the official presses, website, and place of enquiry has been changed in the semi report period. For details 6 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 please find the Annual Report 2016. (3). Change of business registration Whether the registration has changed during the report period Applicable √ Applicable □Not applicable On May 12, 2017, The Company received a notice from the sponsor-Guangzhou Securities: Mr. Wang Hongwei, the original sponsor representative, cannot continue to perform his duties due to changes in his work, thus Guangzhou securities hereby appoints Ms. Shi Jianhua to take the place of Mr. Wang Hongwei to perform the relevant duties of continuous supervision, with the continuous supervision period lasts to December 31, 2017. For the detailed information, please refer to the Company's announcement disclosed on Cninfo.com.cn website: No2017-.051, Announcement about Alteration of the Continuous Supervision Sponsor Representative of Non-public Share Issuance. 4. Summary of Accounting Data and Financial Indicators Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data. □ Yes √No Reporting period Same period of last year YoY+/-(%) Operating income(RMB) 4,641,285,527.91 2,882,059,154.41 61.04% Net profit attributable to the shareholders 635,855,750.37 545,963,710.72 16.46% of the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 559,990,548.41 459,894,653.13 21.76% listed company(RMB) Cash flow generated by business operation, -1,414,361,686.97 1,281,108,942.94 -210.40% net(RMB) Basic earning per share(RMB/Share) 0.13 0.14 -7.14% Diluted gains per 0.13 0.14 -7.14% share(RMB/Share)(RMB/Share) Weighted average income/asset ratio(%) 2.84% 3.79% -0.95% As at the end of the As at the end of last year YoY+/-(%) reporting period Gross assets(RMB) 47,746,487,539.58 46,826,319,570.41 1.97% Shareholders’ equity attributable to 22,506,905,931.67 22,216,300,365.86 1.31% shareholders of the listed company(RMB) 7 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 5. Differences between accounting data under domestic and overseas accounting standards (1).Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. √Applicable □Not applicable Nil (2). Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √Not applicable Nil 6.Items and amount of non-current gains and losses √Applicable □Not applicable In RMB Items Amount Notes Non-current asset disposal gain/loss(including the write-off part -30,537.14 for which assets impairment provision is made) Govemment subsidies recognized in current gain and loss(excluding those closely related to the Company’s business 65,632,104.25 and granted under the state’s policies) Gain/loss on loans obtained by entrusting others 4,137,082.94 Operating income and expenses other than the aforesaid items 18,148.98 Other non-business income and expenditures other than the above 22,183,417.04 Less: Amount of influence of income tax 15,552,946.64 Amount of influence of minority interests(after tax) 522,067.47 Total non current gains and losses attributable to 75,865,201.96 -- shareholders of the parent company 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 recorgnized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 8 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 III. Business Profile 1.Main Business the Company is Engaged in During the Report Period Whether the company needs to comply with the disclosure requirements of the particular industry No During the reporting period, the company's main business covered glass substrate, sapphire, color filters, polarizers and other optoelectronic display materials, whole-set equipment and its technical services, building and installation engineering construction, etc; meanwhile, the company has been making great efforts to promote the industrialization of graphene technology represented by grapheme-based lithium batteries and graphene heat dissipation film. (1). Optoelectronic display material business The company's products in the field of optoelectronic display materials cover LCD glass substrate, sapphire, color filters, polarizers, etc., and the domestically-made materials for the mentioned products showed the core competitiveness of China in the display industry. The company's liquid crystal glass substrate business steadily ranked first in China and ranked fourth in the world. The company had successively implemented the layout of 20 production lines (including under-construction lines and planned lines) of glass substrate in places such as Shijiazhuang, Zhengzhou, Wuhu and Fuzhou, including G5, G6 and G8.5 glass substrate production lines. At the time when the company continued to consolidate its position in the glass substrate industry, in order to utilize industrial cluster effect, the company had successively expanded the business of sapphire, color filter, polarizer, etc. During the reporting period, the company's Fuzhou first G8.5 production line and Fuzhou Xuyou polarizer production line were put into operation, thus further consolidated the company's position in the industry. The company has a steady and good cooperation relationship with the downstream panel manufacturers, and the LCD glass substrate, polarizer and other products have been mainly sold to BOE, Huaxing Optoelectronic, Dragon Optoelectronics, AVIC Optoelectronics, Qunchuang Optoelectronic, Shen Tianma and other mainstream panel manufacturers, thus gained good economic results. (2). High-end equipment and technical services business The whole-set equipment of the LCD glass substrate and touch screen glass production equipment belongs to the head-end equipment of electronic equipment having the highest technology. The company, upon its own independent research and development, made breakthroughs to the foreign blockade of the above-mentioned equipment, realized the comprehensive independent research and development, design, production, manufacture and installation and so on. After years of development, the company has accumulated rich experience in the intelligent manufacturing field, and its relevant equipment has a strong spillover effect. In recent years, the company, based on the previous research and development of glass substrate whole-set equipment, actively expanded and applied more high-end equipment and technical services, continuously developed Group clients of all kinds of intelligent application fields and ensured the growth ability of the company's high-end equipment and technical services business. Currently, the company's high-end equipment and technical services mainly adopts the customized production and service, with the settlement in accordance with the progress node of the production line, mainly including the products of Stocker automation control system, automatic polishing line host synthesis equipment, automatic grinding and cleaning equipment. (3). Construction and installation business The company's wholly-owned subsidiary-Dongxu Construction is the implementation main-body for the 9 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 company's construction and installation business, which effectively reduced the company's construction costs in the assistance of the company's production base construction, maintenance and so on aspects. In recent years, with the continuous development of domestic industrialization and urbanization, the company's construction and installation business has realized a stable growth. Currently, influenced by the national policy, the PPP mode that's characterized in local government's introducing of social capital to participate in public utilities investment will lead the main market of the domestic infrastructure construction. In order to fit the market development trend, the company, during the reporting period, had increased RMB 2 billion-by self-owned funds-to the capital of Dongxu Construction, so as to enhance its competiveness in the PPP business to the underground integrated pipe gallery, municipal infrastructure, sponge city and smart city. 2.Major Changes in Main Assets (1).Major Changes in Main Assets Main assets Major changes Equity assets The main reason for this period is to invest in dongxu financial company The main reason for this period is the increase of the fixed assets under construction of Fixed assets the 8.5 generation glass base plate production line in fuzhou Construction in process This period increases mainly the project construction of polarizing film (2)Main Conditions of Overseas Assets □ Applicable √ Not applicable 3.Analysis On core Competitiveness Whether the company needs to comply with the disclosure requirements of the particular industry No In the annual report of 2016, the Company has disclosed five core competencies, namely, "strong ability of independent R & D and innovation ", "domestic substrate leading position and scale advantage", "control-oriented industry chain integration advantage"," policy support and costs advantage" and " efficient management and decision-making mechanism advantage". IV. Performance Discussion and Analysis 1.General The year of 2017 is the year of strategic transformation for Dongxu Optoelectronic. When the previous glass substrate and display materials investment enter into the harvest period, the company committed to put great effort 10 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 into the industry synergy of big manufacturing industry, and based on the breakthroughs in the field of graphene and grapheme-based lithium-ion batteries, the company launched the acquisition matter of Sunlong Bus, striving to shape a closed-loop industrial chain of "high-end materials – grapheme-based lithium battery-new energy vehicles". In the first half of 2017, every business of the company has been steadily moved forward and has a good operation status, thus further consolidated the company's industrial position and gained certain extent of good economic results. During the reporting period, the Company achieves an operating income of RMB4641.2855 million , an increase of 61.04% over the same period in 2016; the net profit attributable to the parent Company of RMB 635.8558 million, an increase of 16.46 % over the same period in 2016. The company's each business development status in the first half of 2017 and the industry planning of the second half of 2017: (1).Conforming to the trend and speeding up the construction of high-generation glass substrate production line In recent years, the large-size and high-generation panel and glass substrate have become the industry trend. According to the research report by research company Witsvie, the average size of television panel worldwide reached 44.7 inches in the first half of 2007, an increase of 1.7 inches from the previous year. The Fuzhou 8.5 generation TFT-LCD liquid crystal glass substrate project, as the company's project invested by the raised money of RMB 6.95 billion by private placement, is an important project in the company's layout for coping with the industrial changes. During the reporting period, the first line of the company's Fuzhou 8.5 generation glass substrate production line has been put into operation and the second line has been under the steady construction. The successful launch of the company's 8.5 generation product into the market had an important impact to consolidate the company's industrial position and balance the rising of the new-generation AMOLED display technology. In the future, the company will, according to the downstream market demand, constantly optimize the LTPS technology and other new glass substrate production technology, thus to better fit the new development trend of the market. (2). Advance shoulder to shoulder, many achievements of optoelectronic display materials The company has been engaged in the optoelectronic display industry for more than a decade, starting with the glass substrate industry, closely following-up the world trend of display technology and the innovation trend, thus grasped the historical opportunity of home-manufacturing materials replacing the core display materials, continuously rolled out new products and horizontally expanded, and constructed the core competiveness based on the opportunity of the high-tech optoelectronic display materials. On the basis of the company's constant consolidation and enhancement of the main business of LCD glass substrate, combined with the main business, the company continuously expanded the new business area, and currently the company has successfully been engaged in the three high-end display materials namely sapphire, color filter and polarizer, thus realized achievements in many aspects. During the reporting period, the company has made a new progress in the lateral extension of core display material. The company's color film project has been speeding up the progress, and it's expected there will be new product line completed in the second half of the year. Fuzhou Xuyou polarizer project has been put into operation in a relatively fast speed, marking that the company officially entered the field of polarizer manufacturing. The polarizer industry will be one of the core pillar industries of the company's optoelectronic display business after the production of glass substrate, and that will shape an industrial synergy effect of the company's existing optoelectronic business that has the industry of glass substrate, color filters and sapphire, thus further enhancing the company's comprehensive strength. 11 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 (3). Preliminary achievement, the optimized layout of graphene business accelerated During the reporting period, the monolayer grapheme and the grapheme-based lithium ion battery fabricated by Shanghai Tanyuan Graphene has gained the market attention and recognition, and the subsequent single product and the technological upgrading have been actively promoted. The company's Taizhou grapheme-based lithium ion battery project, which has successfully completed the land bidding and auction, project filing, EIA publicity and other procedures, is currently under the communication with the design and construction unit about the design and construction plan under the company's full efforts, and it's carrying out the multi-round demonstration and striving to realize the commencement of project construction as soon as possible. Meanwhile, the company together with Taizhou graphene industry fund, through the means of acquisition and capital increase, obtained the 51% stake of Ming Shuo Technology Company, which has the reversible liquid crystal phase-change graphene composite heat dissipation material as the core technology and it is specializing in providing high-power LED lighting equipment and integrated lighting solutions, with its related graphene lighting products have been actually applied in Beijing and other places and that has gained some extent of economic benefits. In addition, the company's industrial application of heat-dissipation graphene film technology has achieved stage achievement, and the company has signed a "strategic cooperation agreement" with Shanxi Energy Investment and Shanxi Jian Bang Group in connection to the project cooperation of the Graphene electric heating replacing loose coal combustion heating project of Shanxi Provincial rural area. (4). Regular development but with novelty thoughts and innovation, acquired SUNLONG Bus to enter the new energy automotive industry With the company's smooth progress and putting-into operation of each project of optoelectronic display materials, the company’s main business will tend to become mature and steady. In order to give full play to the industrial synergies of big manufacturing industries and find new profit growth points, the company has decided to enter the field of new energy passenger cars and logistics vehicles. During the reporting period, the Company launched the restructuring project that planned to acquire 100% equity of Sunlong Bus through the way to buy assets by issuing shares and paying cash. The company has been engaged in the high-end equipment manufacturing industry for nearly 20 years, possessing a strong ability in technology, management, funds and talents. Sulong Bus has the mature technology, rich-experience industrial management team and excellent product design ability. Meanwhile, upon more than ten years accumulated experience in new energy passenger car, Sulong Bus possessed the good market channels and the excellent overseas market development capabilities. The company acquired Sulong Bus to formally enter the field of new energy passenger car, so as to enrich the company’s existed industrial structure. By utilizing the advantage of each other, the company can snatch the good industrial opportunity in the field of new energy passenger bus and logistics vehicles, thus to better provide more opportunities for the company’s rapid growth in the next few years. Furthermore, during the reporting period, the Company invested RMB 100 million to subscribe the new shares of Yi Huatong issued by directional added share-issuance. Yi Huatong is a high-tech company that specialized in hydrogen fuel cell engine research and development and the industrialization. For one hand, the company's subscription is based on the optimistic future development and the profitability of Yi Huatong, and for the other hand, the company can utilize this to build strategic partnership with Yi Huatong, thus speeding up bringing the advanced hydrogen fuel cell engine technology of Yi Huatong into the company's layout of new energy automotive projects, further accelerating the market-launch speed of the company's hydrogen fuel cell vehicle, so as to consolidate the company's industrial position in the new energy automotive market and to bring the new profit growth point for the company. (5). Fulfilling the commitment, injecting the cover-glass business to enrich the company's profit growth point 12 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Cover glass belongs to the windows protective screen industry of panel display, and the industry is high technological and has large market scale, large industrial radiation and the obvious stimulation effect. Xuhong Optoelectronic mainly engaged in high aluminum cover glass production and sales, and the high aluminum cover glass possesses the characteristics of high transmittance, high impact resistance, high scratch resistance, high bending toughness, ultra thin and other technical characteristics. In order to solve the horizontal competition, in 2011, Tunghsu Group entrusted the company to carry out the management of Xuhong Optoelectronic and promised to inject its equity into the company. Currently, Xuhong Optoelectronic has a large-scale ultra-thin touch screen glass production line, with the annual production scale of 7 million pieces, and the company had won the first prize award of science and technology progress of Sichuan province and the National Invention Exhibition Gold Award. Xuhong Optoelectronic is one of the domestic companies that take the lead in the research and mass production of high aluminum cover glass, and the Panda Glass, which was rolled out in 2014 by Xuhong, successfully broke the situation of the foreign enterprises' long-term absolute monopoly in the domestic market. Currently, its business covered the area and regions of East China, North China, Southwest China and Southern China. With the approaching of mobile phone wireless charging and 5G and other new transmission mode, the wide use of flexible OLED brings a vast market space for 3D curve glass. During the reporting period, the company has officially launched the acquisition of Xuhong Optoelectronic equity and will use the raised match funds to construct "Curve Surface display Cover-glass production project". After the completion of the acquisition, the company will have the new income from cover glass, and the flat display glass business layout will be more perfect, which will be conducive to consolidate the company's domestic leading position in the panel glass display. 2.Main business analysis Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”. Changes in the financial data In RMB This report period Same period last year YOY change(%) Cause change The expansion of major Operating income 4,641,285,527.91 2,882,059,154.41 61.04% departments caused sales increase The main line of business Operating cost 3,338,875,149.90 1,938,309,643.65 72.26% expansion leads to increased costs Sale expenses 29,084,235.15 31,577,716.56 -7.90% Administrative expenses 193,715,154.96 236,706,264.85 -18.16% The main financing cost Financial expenses 317,954,221.40 94,439,392.61 236.68% increases The increase in the total Income tax expenses 179,430,671.23 90,283,601.51 98.74% profit R & D Investment 60,448,452.51 45,720,772.21 32.21% Cash flow generated by -1,414,361,686.97 1,281,108,942.94 -210.40% 13 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 business operation, net Net cash flow generated -1,221,706,350.75 -607,815,301.45 -101.00% by investment Net cash flow generated -484,304,608.85 3,091,864,784.09 -115.66% by financing Net increasing of cash -3,111,660,192.21 3,774,917,627.41 -182.43% and cash equivalents Major changes to the profit structure or sources of the Company in the reporting period □ Applicable √Not applicable Breakdown of main business In RMB Increase/decrease Increase/decrease Increase/decrease of revenue in the of business cost of gross profit Operation Operation cost Gross profit same period of the same period in the same revenue the previous of the previous period of the year(%) year(%) previous year(%) Industry Equipment and Technology 2,447,761,486.65 1,493,187,482.28 39.00% 45.72% 52.21% -2.60% services Optoelectronic 1,010,179,019.72 705,344,018.20 30.18% 33.41% 29.12% 2.32% display materials Graphene 553,117.12 212,805.97 61.53% 8,882.50% 290.54% 846.44% New-type urbanization 518,052,658.25 496,996,645.73 4.06% 18.96% 21.72% -2.17% construction Electronic communication 656,139,547.42 642,040,363.66 2.15% products Products Equipment and Technology 2,447,761,486.65 1,493,187,482.28 39.00% 45.72% 52.21% -2.60% services Optoelectronic 1,010,179,019.72 705,344,018.20 30.18% 33.41% 29.12% 2.32% display materials Graphene 553,117.12 212,805.97 61.53% 8,882.50% 290.54% 846.44% New-type urbanization 518,052,658.25 496,996,645.73 4.06% 18.96% 21.72% -2.17% construction Electronic 656,139,547.42 642,040,363.66 2.15% 14 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 communication products Area China mainland 4,254,203,301.68 2,975,051,195.40 30.07% 59.93% 70.16% -4.20% Hongkong, Macao and 378,386,334.24 362,687,161.44 4.15% 78.15% 93.72% -7.70% Taiwan Overseas 96,193.24 42,959.00 55.34% 3.Non-core business analysis □ Applicable √Not applicable Proportion in total Amount Sustainable(yes or not) profit(%) Related factors description Non-operation 66,069,887.52 7.55% Government grants Yes revenue 4.Analysis of assets and liabilities (1).Significant changes in asset composition In RMB End of Reporting period End of same period of last year As a Change in percentage of As a percentage percentage(% Reason for significant change Amount Amount total of total assets(%) ) assets(%) 22,873,558,64 26,056,117,216 Monetary fund 47.91% 55.64% -7.73% 1.80 .86 Accounts 2,341,912,029. 1,652,714,640. 4.90% 3.53% 1.37% receivable 32 77 3,670,952,734. 2,688,967,436. Inventories 7.69% 5.74% 1.95% 10 27 Real estate 58,974,678.04 0.12% 0.00% 0.12% Investment Long-term equity 477,648,310.8 1.00% 72,354,803.70 0.15% 0.85% investment 7 15 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 9,068,489,094. 8,952,341,070. Fixed assets 18.99% 19.12% -0.13% 66 47 Construction in 2,457,153,171. 1,772,629,310. 5.15% 3.79% 1.36% process 64 84 4,474,513,562. 4,940,816,200. Short-term loans 9.37% 10.55% -1.18% 31 13 5,830,941,823. 6,596,159,000. Long-term loans 12.21% 14.09% -1.88% 23 00 (2).Asset and Liabilities Measured by Fair Value □ Applicable √ Not applicable (3). Restricted asset rights as of end of the reporting period Items Ending book value Limited reason Monetary fund 947,883,742.41 Certificates of deposit and pledge Investment property 58,974,678.04 Get the loan with pawn Fixed assets 7,559,438,628.83 Get the loan with pawn Construction in process 751,214,924.79 Get the loan with pawn Intangible assets 248,103,470.07 Get the loan with pawn Total 9,565,615,444.14 5.Investment situation (1).External investment √ Applicable □Not applicable Investments made in same period of last Investments made in the reporting period +/- % year 6,175,411,729.77 1,102,954,500.00 459.90% (2).Condition of Acquiring Significant Share Right Investment during the Report Period √Applicable □ Not applicable Name of the Main Invest Invest Share Invest Progre Gain or Whether Date of Disclos Capital Product Company Busines ment ment Proport Partner ment ss up Antici Less or to Disclosu ure Source Type Invested s Way Amoun ion % Horizo to pated the Involve re(Note Index 16 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 t n Balanc Incom Current in 5) e e Investm Lawsuit Sheet ent Date Technol ogy develop ment, Qian technol Xinmin ogy g, Jin transfer Xiuzhe ; asset n, Chen manage Wei, ment, Wang investm Yingch ent ao, Announ Mingzhuo(Be manage Beijing cement ijing) ment; Heyiyo Purcha 80,142, Self Long-t Graphe Compl -375,92 May number: Electronic sales of 51.00% u No se 857.00 fund erm ne eted 7.67 11,2017 2017-04 Technology buildin Invest 6 Co., Ltd g ment CNINF material Partner s, metal ship material (LP s, ),Jiang electron Wei, Li ic Hongle product i and s, Zhu househ Lei. old applian ces, etc Sales of Chuanglian electron (Huatai) Purcha 100.00 Self Long-t Supply Compl 5,185,96 ic 0.00 No No Hongkong se % fund erm chain eted 2.98 product Co., Ltd. s Tianlong Sales of huatai electron Purcha 100.00 Self Long-t Supply Compl industrial ic 0.00 No 0.00 No se % fund erm chain eted (Hong product Kong) co. s 17 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 LTD Electro Electro Dongxu(Xuh nic Harald nic ua) commu acquisit 100,20 Self Rammi Long-t commu Compl -320,04 International 55.00% No nication on 8.63 fund nger erm nication eted 5.40 Equipment product Doctor product Co., Ltd. s s 80,243, 4,489,98 Total -- -- -- -- -- -- -- -- 0 -- -- 065.63 9.91 (3).Situation of the Significant Non-equity Investment Undergoing in the Report Period □ Applicable √ Not applicable (4).Investment of Financial Asset (1)Securities investment □ Applicable √ Not applicable (2)Investment in Derivatives □ Applicable √ Not applicable The Company had no investment in derivatives in the reporting period. 6. Sales of major assets and equity (1). Sales of major assets □ Applicable √ Not applicable The Company had no sales of major assets in the reporting period. (2).Sales of major equity □ Applicable √ Not applicable 7.Analysis of the Main Share Holding Companies and Share Participating Companies √ Applicable □ Not applicable Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company In RMB Company Sectors Registered Operating Company Name Total assets Net assets Turnover Net Profit type engaged in capital profit 18 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Wuhu Dongxu Equipment Optoelectronic and 98,000,000.0 8,944,733,89 2,826,899,34 2,830,168,46 803,918,979. 755,485,990.8 Subsidiary Equipment Technology 0 5.68 4.11 6.00 70 0 Technology Co., Ltd serves Wuhan Dongxu Photoelectric 2,000,000,00 12,006,625,0 5,466,612,48 404,414,266. Optoelectronic Subsidiary disply glass -119,404.26 12,622,231.34 0.00 58.06 5.58 30 Technology Co., Ltd substrate Dongxu Engineering 100,000,000. 4,602,669,21 3,143,968,40 518,052,658. 19,559,654.6 Construction Group Subsidiary 14,644,719.84 construction 00 2.25 9.52 30 5 Co., Ltd. Real estate Beijing Xufeng Real 870,000,000. 2,903,023,95 468,486,727. Subsidiary Development 0.00 6,604,655.21 6,624,244.60 estate Co., Ltd. 00 8.16 21 and sales Sales of optoelectroni Dongxu (Kunshan) c devices and 500,000,000. 526,028,832. 498,217,899. Display Material Subsidiary 0.00 -364,830.51 -360,330.51 other 00 69 62 Co., Ltd. electronic devices Jiangsu Jixing New Sapphire 392,000,000. 619,817,363. 477,257,330. 223,319,885. 22,824,563.5 Subsidiary 20,274,253.55 Material Co., Ltd. material 00 43 78 36 1 Technologica Beijing Xutan New l 15,000,000.0 11,218,649.2 -2,837,414.7 Material Technology Subsidiary 5,636,967.58 264,245.28 -2,837,414.77 developmen 0 6 7 Co., Ltd. t Beijing Dongxu Project 104,363,042. 102,357,112. Huaqing Investment Subsidiary 5,000,000.00 -977,503.65 -977,503.65 investment 44 91 Co., Ltd. Zhengzhou Xufei Optoelectron Optoelectronic 1,650,000,00 5,537,882,26 1,947,564,31 671,849,865. 56,428,410.5 Subsidiary ic display 53,750,338.21 Technology Co., 0.00 5.31 6.60 60 2 materials Ltd. ShijiazhuangXuxin Optoelectron Optoelectronic 1,906,000,00 3,441,192,63 2,068,503,55 230,378,513. 26,641,852.2 Subsidiary ic display 29,045,244.66 Technology Co., 0.00 0.26 7.21 20 4 materials Ltd. Fuzhou Dongxu Optoelectron Optoelectronic 10,000,000.0 3,638,855,65 2,877,969,80 46,983,656.1 Subsidiary ic display 5,446,776.41 4,434,987.61 Technology Co., 0 0.73 5.34 8 materials Ltd. Xuyou Electronic Subsidiary The JPY18150 744,019,016. 739,920,421. 5,752,136.43 5,895,922.83 19 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Material Technolog development million 61 08 (Wuxi) Co., Ltd. ,production and process of Graphene Investment Shenzhen Xuhui 100,000,000. 115,859,060. 110,079,953. -1,188,861.7 Subsidiary Managemen 94,042.74 -1,088,467.27 Investment Co., Ltd. 00 24 85 3 t Shanghai Tanyuan Technologica Huigu New Material 60,000,000.0 106,800,734. 104,463,802. -6,900,666.2 Subsidiary l 194,829.10 20,745,934.23 Technology Co., 0 97 03 3 development Ltd. Subsidiaries obtained or disposed in the reporting period √ Applicable □Not applicable Name Mode Influence Huzhou Mingshuo Optoeletronic Acquisiton Profit increase Technology Co., Ltd. Mingshuo (Beijing) Electronic Technology Acquisiton Profit increase Co., Ltd. Chuanglianhuatai (Hongkong) Co., Ltd. Acquisiton Profit increase Tianlonghuatai Industry (Hongkong) Acquisiton Profit increase Co.,Ltd. Dongxu (Xuhua) International Equipment Acquisiton Profit increase Co., Ltd. Hunan Dongxu Weisheng Smart New establishment Profit increase Technology Co.,Ltd. Hunan Dongxu Delai Electronic New establishment Profit increase Technology Co., Ltd. Wuhu Dongxu Weiyu Medical Apparatus New establishment Profit increase Technology Co.,Ltd. Hunan Dongxu Weigao Medical Apparatus New establishment Profit increase Technology Co.,Ltd. Shandong Qihui Medical Technology New establishment Profit increase Co.,Ltd. Guangdong Dongxuweiyu Medical New establishment Profit increase Apparatus Technology Co.,Ltd. 8.Structured vehicle controlled by the Company □ Applicable √ Not applicable 20 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 9. Prediction of business performance for January -September 2017 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 10.Risks facing the Company and countermeasures (1). Risk of market competition The TFT-LCD glass substrate production industry the company belongs to has been monopolized by foreign manufacturers for a long time, and the USA Corning, Japan Asahi Glass, Nippon Electric Glass and other international giants have a high market share. The glass substrate products produced by the company have the advantages of low costs in production and transportation and timely delivery in the domestic market. At present, the company has a number of 5G and 6G glass substrate production lines in the mass production, having a relatively high market share in the domestic market. The company's 8.5 generation glass substrate production line is under construction, but in the process of project construction, it is facing with the uncertainties of industrial policy, market change and technological upgrading, which may lead to the difference occurred between the forecast and the implementation schedule and implementation effect of the project. Furthermore, compared with the USA Corning, the production line already planned by the company is relatively small, especially in the reserve of production technology of 10G and above 10G glass substrate, the company still has a large gap to catch. In the future, there still will be some uncertainties for the company in connection to whether the company can fit the market trend to develop and roll out the larger size LCD glass substrate products and continuously expand the market share, so that may have a certain impact on the company's operating results. Solutions: The Company will summarize the construction and operation experience of the 5G and 6G glass substrate production lines and speed up the construction progress of the 8.5G glass substrate line. Meanwhile, in order to snatch the good market opportunity, the company, together with Japan NEG, has already set up a joint venture company to build the postprocessing line of 8.5G line, which will further accelerate the Market launch of the company's 8.5 generation glass substrate, thus reducing the implementation risk of the production line. Furthermore, relying on the company's customer resources and market advantages in the liquid crystal glass substrate, the company actively made the layout of optoelectronic display materials like color filters and polarizers, thus to enhance the added value of products and deepen the cooperation with the downstream customers, so as to shape a good industrial synergy and cluster effect. (2). Technical upgrading and replacement risk The TFT-LCD glass substrate's downstream LCD panel has a high maturity of technology, which is suitable for large-scale production. Although the liquid crystal glass substrate, especially the large size liquid crystal glass substrate, can cover many lines and have a long life cycle, the panel display technology belongs to the filed featuring fast-upgrading and replacement of technology. At present, the TFT-LCD technology occupies a dominant position-which has a relatively stable demand of glass substrate, but if there are significant technological changes occurred in the downstream flat panel display industry-like the TFT-LCD technology is replaced by other new technologies such as OLED and the company failed to achieve timely upgrading of the 21 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 technology, then the company will face a certain degree of risk in technological upgrading and replacement. Solutions: the company has a strong technical strength, and the company is the only domestic company that mastered the two production technological processes of glass substrate namely the overflow melting method and the floating method. The whole-set equipment production line of TFT-LCD glass substrate was recognized as the "National strategic product innovation" and the processing method of molten glass in platinum channel had won the "China Patent Gold Award". In order to cope with the risks of alternative technology, the Company will, based on the gained successful experience of industrialization, continue to increase the R & D funding and strengthen the R & D cooperation with universities and research institutes and enhance the research and development on new-technological display glass products such as ultra-thin glass products, large-size glass products, LTPS glass products and OLED. (3). Risks in asset acquisitions and business integration In March 2017, the Company disclosed "Issuing shares and paying cash to buy assets and raise matching funds namely the related transaction scheme", and the scheme has been examined and approved by the Board of Directors, the Supervisory Committee and the Extraordinary Shareholders' General Meeting and then it has been submitted to the CSRC for examination and approval. At present, the scheme has passed the centralized examination of operators by the Ministry of Commerce, and received the "Acceptance notice of administrative license application" issued by CSRC on June 29. Now it is in the stage of giving-reply process to the first feedback. This acquisition of Sunlong Bus will enable the company to enter the field of new energy bus, and the injection of the new assets will face a certain extent risk of business integration. Solutions: After the completion of the acquisition, the company plans to reorganize the organizational structure of Sunlong Bus and improve its corporate governance; through sending financial staff into the company to strengthen the financial supervision and management of Sunlong Bus; through staff training and cultural exchanges to enhance the cultural identity of staff in Sunlong Bus; maintaining the stabilization of the existing management team and the core technical team of Sunlong Bus and providing the necessary support to the production and operation of Sunlong Bus. 22 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 V. Important Events 1. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period (1).Annual General Meeting Investor Index to disclosed Meeting Type Convened date Disclosure date participation ratio information The First provisional Provisional Announcement No. shareholders’ shareholders’ 31.02% February 10,2017 February 11,2017 2017-010, General meeting in General meeting www.cninfo.com.cn 2017 The Second provisional Provisional Announcement No. shareholders’ shareholders’ 18.22% March 31,2017 April 1,2017 2017-032, General meeting in General meeting www.cninfo.com.cn 2017 Annual Announcement No. 2016 Shareholders’ Shareholders’ 20.43% April 17,2017 April 18,2017 2017-038, general meeting General Meeting www.cninfo.com.cn The Third provisional Provisional Announcement No. shareholders’ shareholders’ 23.62% June 2,2017 June 3,2017 2017-059, General meeting in General meeting www.cninfo.com.cn 2017 The Fourth provisional Provisional Announcement No. shareholders’ shareholders’ 28.76% June 26,2017 June 27,2017 2017-068, General meeting in General meeting www.cninfo.com.cn 2017 2. Preferred stockholders restored voting rights to request to convene Provisional Shareholders’ Meeting. □Applicable√Not applicable 2. Proposal for profit distribution and converting capital Reserve into share actual for the reporting period □ Applicable √Not applicable For the reporting period, the Company plans not to distribute cash dividends or bonus shares or convert capital reserve into share capital. 23 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 3. The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor, senior management personnel and other related parities. √ Applicable □ Not applicable Period Time of Commitment of Fulfil Commitment Type Contents making maker commi lment commitment tment If listed companies plans to sell tradable stocks through the bid trading system of Shenzhen Stock Exchange and sell greater than 5% of shares within Shijiazhuang Long-t Unde Commitment Share six months after the first sales, will disclose the Baoshi March erm r on share reduction contents specified by the Form Guide to Prompt Electronics 29,2007 effecti Fulfil reform commitment Announcement of Removing Restriction on Sales of Group Co., Ltd ve lment 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 Not overstepping its authority to interfere with the company's management activities. (2) Not encroach the interests of the company. (3) If the CSRC or Shenzhen Stock Exchange has different requirements on the commitment made by the Company / I to ensure the sound implementation of the returns fill-up measures for the diluted returns at the period caused Commitment by this transaction, the Company / I shall voluntarily Long-t Unde Tunghsu made upon the and unconditionally make the commitment in erm r Group,Li June 10,2017 assets accordance with the requirements of the CSRC or the effecti Fulfil Zhaoting replacement Shenzhen Stock Exchange. (4) As one of the relevant ve lment liability subjects to the returns fill-up measures, the Company / I undertake that strictly abide by the above commitment made by the Company / I and ensure that the returns fill-up measures of the Company / I can be soundly implemented. If the Company / I violate the above commitments or refuse to fulfill the above commitments, the Company / I 24 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 hereby agree to impose relevant penalties or relevant management measures on the Company / I in accordance with the relevant regulations and rules formulated and issued by the securities regulatory authorities such as the CSRC and the Shenzhen Stock Exchange. Undertake that faithfully and diligently perform duties and protect the lawful rights and interests of the company and all its shareholders; (2) undertake that not transfer benefits to other units or individuals in gratuitous or unfair conditions and not take any other ways to damage the interests of the company; (3) undertake that curb the position-related consumption behavior; (4) undertake not to use the company's assets to engage in investment or consumption activities that have nothing to do with the performance of the duties; (5) undertake that the remuneration system established by the board of directors or the remuneration and assessment Gong Xin, Han committee is linked to the company's implementation Zhiguo, Huang of the returns fill-up measures, and make affirmative Jinliang, Li vote for the relevant motions of the board of directors Zhaoting, Liu and the general meeting of shareholders when Wentai, Lu participating in the decision; (6) if the company Long-t Unde Guihua, Wang launches the equity incentive policy subsequently, erm r June 10,2017 Jianqiang, Wang then undertake that the terms of exercise of the effecti Fulfil Junming, Wang company's equity incentive to be announced are ve lment Lipeng, Wang linked to the performance of the company's measures Zhonghui and of returns fill-up and make affirmative vote for the Zhang relevant motions of the board of directors and the Shuangcai. general meeting of shareholders when participating in the decision; (7)If the CSRC or Shenzhen Stock Exchange has different requirements on the commitment made by I to ensure the sound implementation of the returns fill-up measures for the diluted returns at the period caused by this transaction, I shall voluntarily and unconditionally make the commitment in accordance with the requirements of the CSRC or the Shenzhen Stock Exchange. (8) As one of the relevant liability subjects to the returns fill-up measures, I undertake that strictly abide by the above commitment made by I and ensure that the returns-fill-up measures of the Company shall be soundly implemented. I hereby 25 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 agree to impose relevant penalties or relevant management measures on the Company / I in accordance with the relevant regulations and rules formulated and issued by the securities regulatory authorities such as the CSRC and the Shenzhen Stock Exchange. Commitmen 1.From the date of commitment letter issued, except ts on the managed hosting company for Dongxue horizontal Optoelectronic , this company and majority-owned Long-t Unde competition, subsidiaries do not in any way, directly or indirectly December 22, erm r Li Zhaoting related engaged in business and Dongxu Optoelectronic and 2011 effecti Fulfil transaction its subsidiaries are the same, or similar, future ve lment and capital Dongxu Optoelectronic shares and its subsidiaries are occupation not engaged in the same or similar businesses. 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 engaged in the same or similar businesses. 2.The company assurances against the use of precious Commitments Dongxu stones share any act prejudicial to the control made upon Optoelectronic Commitmen relationship of Dongxu Optoelectronic interests and issuance Investment Co., ts on its wholly-owned subsidiaries, holding, or causing Ltd., horizontal Dongxue Optoelectronic shares and its wholly-owned Long-t Unde Shijiazhuang competition, subsidiaries, holding form business competition erm r April1, 2012 Baoshi related decisions. 3. The company will not directly invest, effecti Fulfil Electronics transaction purchase and Dongxu Optoelectronic identical or ve lment Group Co., and capital similar business enterprises and projects. Ltd.Tunghsu occupation 4.If the assets owned by the Dongxu Optoelectronic . Group, compete with , the company will adopt effective measures and give up the same business. 5. If the company has horizontal 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 26 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Optoelectronics; Before December 31, 2016, by way of designated placement, the company will transfer all the shares that Tunghsu 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 , Tunghsu 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. 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) Tunghsu Group is the controlling shareholder of Dongxu Optoelectronic; and during the period of holding, Tunghsu 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), Valid Wuhu Dongxu Optoelectronic Equipment Technology for Unde Other Co., Ltd. (hereinafter referred to as Wuhu Equipment) February Decem r Tunghsu Group commitment and Shijiazhuang Dongxu Optoelectronic Equipment 8,2015 ber Fulfil Technology Co., Ltd. (hereinafter referred to as 31,202 lment Shijiazhuang Equipment). For this purpose, Tunghsu 0 Group has made following promises: Any patents related to panel display glass substrate not included in the aforesaid Contract on the Licensing of Patent Exploitation obtained by Tunghsu Group in the future, Tunghsu 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 27 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 licensing contract. After the company successfully completed the issuance of corporate bonds, whether Tunghsu Group control the company during the duration of the bonds, Tunghsu 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: 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 Valid Dongxu To raise equipment. Thus, the demands of business operation for Unde Optoelectronic funds to use and expansion in the company will be satisfied. The February 10, Decem r Technology Co., the company promises: 1. The funds raised through the 2015 ber Fulfil Ltd. commitment public offering of corporate bonds will not be directly 31,202 lment or indirectly invested in real estate development 0 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. Dongxu investment/Baoshi group promised the net profit level of the next three years and profit compensation scheme in respective to Xufei Optoelectronic Technology Co., Ltd and Xuxin Optoelectronic Technology Co., Ltd as follows: The Net profits after deducting non-recurring gain or loss Valid Performance that are attributable to Xufei Optoelectronic for Unde compensatio Technology Co., Ltd in year 2015, year 2016, year Decem r Baosi Group Marc 2, 2015 n 2017, year 2018 shall accordingly be not less than ber Fulfil commitment RMB 36,669,800, RMB 84,562,800, RMB 31,201 lment 156,531,100, RMB 225,405,200;The Net profits after 8 deducting non-recurring gain or loss that are attributable to Xuxin Optoelectronic Technology Co., Ltd in year 2015, year 2016, year 2017, year 2018 shall accordingly be not less than RMB23,348,800, RMB55,420,500, RMB 86,627,700, RMB 28 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 158,345,000. If any year’s actual net profits are less than the estimated profits as aforesaid within the compensation period, Dongxu investment/Baoshi group shall make up the difference in accordance with the aforesaid principles in cash to Dongxu Optoelectronic Technology Co., Ltd; If the actual net profits are not less than the estimated profits, there is no need for Dongxu investment / Baoshi group to carry out the compensation. The compensation period includes the year contained the date on which the transaction completed and the subsequent two consecutive accounting years. In view of: (1) 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 stock; (2) Tunghsu Group is the controlling shareholder of Dongxu Optoelectronic; and during the period of holding, Tunghsu 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) Long-t Unde and Shijiazhuang Dongxu Optoelectronic Equipment Other June 17, erm r Tunghsu Group Technology Co., Ltd. (hereinafter referred to as commitment 2015 effecti Fulfil Shijiazhuang Equipment). For this purpose, Tunghsu ve lment 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 Tunghsu Group or not, Tunghsu 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. Tunghsu Commitmen To avoid the horizontal competition with the issuer, Long-t Unde Decembert 16, Group,Li ts on the company’s actual controller-Zhaoting, Li and the erm r 2015 Zhaoting horizontal holding company-Tunghsu Group promised: 1. As of effecti Fulfil 29 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 competition, this declaration and from the date of commitment ve lment related letter issued, except the managed hosting companies, transaction the other companies directly or indirectly controlled and capital by the controller or holding company have no occupation horizontal competitions with Dongxu Optoelectronic Technology Co., Ltd. 2. Any other companies controlled by the actual controller or holding company shall avoid businesses identical or 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 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. If I (the company) violated the above commitment, I (the company) will bear all the losses of Dongxu Optoelectronic and its controlled enterprises arising from this. In order to safeguard the the company's main business of TFT-LCD glass substrate production, the controlling shareholder-Tunghsu Group Co. Ltd made a commitment valid in the period of the company’s application for non-public share issuance: given (1) Valid The main business of Dongxu Optoelectronic for Unde Technology Co., Ltd is TFT-LCD glass substrate Other December Decem r Tunghsu Group production, and currently it is applying for non-public commitment 16,2015 ber Fulfil share issuance; (2) Tunghsu Group, which is the 31,201 lment controlling shareholder of Dongxu Optoelectronic, 8 respectively signed Patent Licensing Contract with Dongxu Optoelectronic, Dongxu Optoelectronic’s subsidiaries of Wuhu Dongxu Optoelectronic Technology Co., Ltd (hereinafter referred to as "Wuhu Optoelectronics"), Wuhu Dongxu 30 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 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") during the control period. Therefore, Tunghsu Group made a commitment as follows: In the term of validity of the patents involved in the patent licensing contract, whether Tunghsu Group controls Dongxu Optoelectronic or not, after the commitment of the above-said Patent Licensing Contract expired, Tunghsu Group will, according to the requirements by Dongxu Optoelectronic, unconditionally renew Patent Licensing Contract with Dongxu Optoelectronic and Dongxu Optoelectronic’s subsidiaries (Wuhu Optoelectronics, Wuhu Equipment and Shijiazhuang Equipment) according to the original contract terms. Tunghsu The company, one of the subscription objects, Group;Changjia promised that after Dongxu Optoelectronic ng Securities Technology Co., Ltd completed the non public (Shanghai )Asse issuance of shares to the company and specific t Management objects for raising funds, the shares (New shares) Valid Co., issued by Dongxu Optoelectronic Technology Co., for Unde Ltd.;Kunshan Share Ltd and subscribed by the company shall not be December16,2 Decem r Development limited transferred to any others in 36 months commenced 015 ber Fulfil Zone State commitment from the publicly listed date of the new shares. As a 16,201 lment Investment Co., result of the issuance of new shares by the Company 8 Ltd.;Beijing to the Company, the shareholding of Dongxu Yingfei Hailin Optoelectronic Co., Ltd. by Dongxu Optoelectronic Investment Co., Ltd. will also be subject to the above Center (Limited commitments. partnership). Valid for Unde Tunghsu Other Not act in excess of authority to interfere the February Decem r Group,Li Commitmen company’s management and operating activities, not 6,2016 ber Fulfil Zhaoting t encroach on the interests of the company. 31,201 lment 9 Li Zhaoting, (a) Promised that not freely or unfairly transfer Valid Unde Zhou Bo,Niu Other interests to other units or individuals, nor adopt other for February r Jianlin, Gong Commitmen ways to jeopardize the company’s interests. (b) Decem 6,2016 Fulfil Xin, Lu t Promised that restrict the post consumer behaviors of ber lment Guihua, Mu the directors and senior management personnel. (c) 31,201 31 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Tiehu, Zhang Promised that not use the company's assets to engage 9 Shuangcai, Shi in the investment &consuming activities which are Zhiqiang , Liu irrelevant to perform the duties. (d) Promised that the Wentai,Xiao salary system set up by the board of directors or the Zhaoxiong and Remuneration Committee is relevant to the Zhou Bo implementation status of the company’s fill-up return measures. (e) Promised that the vesting 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 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. China Life AMP Asset The subscription of this issue a total of nine, namely Management Qianhai Equity Investment Fund Co., Ltd.;Nuoan (LP);AEGON-Industrial Fund,Shenzhen Taianer Fund Information Technology Co., Ltd.,Penghua Fund Management Management Co., Ltd.;China Fund Management Co., Co., Ltd.; Ltd.,China Life AMP Asset Management Co., Valid Penghua Fund Ltd.,Nuoan Fund Management Co., Ltd.,Zhongou for Unde Management Share STAS Asset Management(Shanghai)Co., Ltd. And August Augus r Co., Ltd.; limited Sws Mu Fund Management Co., Ltd.The aforesaid 26,2016 t Fulfil Qianhai Equity commitment issuer has issued the following commitments on the 25,201 lment Investment Fund non-public issue of shares: The allocated shares shall 7 (LP); Sws Mu not be transferred within 12 months from the date of Fund listing of the new shares and apply for new shares in Management the new shares within 12 months Increase the shares Co., Ltd.; to lock. Shenzhen Taianer Information 32 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Technology Co., Ltd.; AEGON-Industr ial Fund.; Zhongou STAS Asset Management(Sh anghai)Co., Ltd; CITIC Fund Management Co., Ltd.. Before December 31, 2017, the whole stake of Dongxu Yingkou and Sichuan Xu Hong-which is held by Tunghsu Group and it’s commissioned to the company for management-will be injected into Commitmen Dongxu Optoelectronic by the way of directional ts on add-share-issuance. In the above period, if any other Valid horizontal external factors such as the decline of overall industry for Unde competition, boom and changes of regulatory requirements led to December Decem r Tunghsu Group related the trusteeship company’s stake not meeting the 9,2016 ber Fulfil transaction conditions of asset injection, then the actual controller 31,201 lment and capital Li Zhaoting, Dongxu Optoelectronic Investment, 7 occupation Tunghsu Group and Baoshi Group will actively consult with the relevant parties to keep the above-mentioned stake to be continuously commissioned to Dongxu Optoelectronic for management. Equity incentive commitment Jixing New Material Investment (HK) Co., Ltd. and Lubao, Wang (The legal representative of the company (HK)) jointly promised that the net profits Performance after tax attributable to Jixing New Material Other Jixing New commitment Investment Co., Ltd in year 2015, year 2016, year Long-t Unde commitments Material and 2017 shall accordingly be not less than RMB30, January 20, erm r made to Investment compensatio 000,000, RMB60,000,000, RMB 100,000,000. If the 2015 effecti Fulfil minority (HK) Co., Ltd. ; n net profits attributable to Jixing New Material ve lment shareholders Wang Lubao arrangement Investment Co., Ltd after audited in any year of year s 2015, year 2016 and year 2017 are less than the promised net profits, the difference shall be compensated by Jixing New Material Investment 33 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 (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 promised the profits of Shanghai Tanyuan Huigu New Materials Performance Technology Co., Ltd for the next three years as Valid Guo Shouwu, commitment follows: (a) Business performance commitment: the for Unde Ma Shengjie, and net profits of Shanghai Tanyuan Huigu New Decem r Wu Haixia , compensatio Materials Technology Co., Ltd in year-2016, March 8,2016 ber Fulfil Shen Wenzhuo n year-2017, year-2018 shall accordingly not be less 31,201 lment and Shen Li arrangement than RMB 5 million, RMB 10 million, RMB 20 9 s million. (b) Compensation mode: if the net profits of Shanghai Tanyuan Huigu New Materials Technology Co., Ltd in year-2016, year-2017, year-2018 accordingly do not reach the promised net profits, the promised party shall fully compensate the difference by cash. All eight shareholders of Ming Shuo (Beijing) Electronic Technology Co., Ltd namely Chen Wei, Beijing Heyiyou Zhu Lei, Wang Yingchao, Jin Xiuzhen, Jiang Wei, Li Investment Performance Honglei, Beijing He Yiyou Investment Partnership Partnership( LP) commitment (limited partnership) and Qian Xinming voluntarily Valid ;Chen Wei, Unde and make the commitment for the profits of the next three for Jiang Wei, Jin r compensatio years of Ming Shuo (Beijing) Electronic Technology May 11,2017 June Xiuzhen, Li Fulfil n Co., Ltd and such commitment is as follows: The 30,202 Honglei, Qian lment arrangement audited net profits after tax in 2017, 2018 and 2019 0 Xinming, Wang s (determined by the lower principle after the deduction Yingchao and of non recurring gains and losses) are no less than Zhu Lei. RMB 10.5 million, RMB 20 million and RMB 40 million respectively. Executed Yes timely or not? 4. Particulars about engagement and disengagement of CPAs firm Whether the semi-annual financial report had been audited? √Yes □ No Name Zhongxingcai Guanghua Certified Public Accountants (LLP) The Remuneration of auditing the semi annual financial report by the domestic accounting firm(RMB’0000) Whether to change the accounting firm? 34 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 □ Yes √No 5.Explanations given by board of directors and supervisory board regarding “ Modified auditor’s” Issued by CPAs firm for the reporting period □ Applicable √ Not applicable 6. Explanations given by Board of Directors regarding “ Modified auditor’s Report” Issued for last year □ Applicable √ Not applicable 7. Bankruptcy and restructuring □ Applicable √ Not applicable No such cases in the reporting period. 8. Legal matters Signifieant lawsuits or arbitrations □ Applicable √ Not applicable No such cases in the reporting period. Other legal matters □ Applicable √ Not applicable 9. Punishments and rectifications □ Applicable √ Not applicable No such cases in the reporting period. 10. Credit conditions of the Company as well as its Controlling shareholder and actual Controller □ Applicable √ Not applicable 11.Equity incentive plans, employee stock ownership plans or other incentive measures for employees √ Applicable □Not applicable 1.Equity Incentive Plan During the reporting period, the third installment of 1.192 million restricted shares of the company's restricted stock incentive plan implemented in 2014 that have yet to be unlocked remained locked state. (For the details, please refer to the "Restricted stock incentive plan (Draft) of Dongxu Optoelectronics Technology Co., Ltd" disclosed on http//Cninfo.com.cn ) 2.The Company's Employee Stock Ownership Plan 1. On July 30, 2017, the Second Phase Employee Stock Ownership Plan (Draft) and its Summary of Dongxu Optoelectronics Technology Co., Ltd was examined and approved in the 19th meeting of the 8th term Board of 35 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Directors. The company planned to implement the Second Phase Employee Stock Ownership Plan to attract and retain outstanding management talent and business backbone personnel. This employee stock ownership planned to use the means of subscribing collective fund trust plan (The collection fund trust plan has an upper limit of 570 million shares and per share is RMB1.0) to purchase in the secondary market (including bulk transactions and auction transactions) and by other ways permitted by laws and regulations to obtain and hold the A shares of Dongxu Optoelectronics, and that shall not be used to buy other listed companies' shares. The related draft plan shall be implemented after getting approval from the company's shareholders' general meeting (For the details, please refer to the "The second-phase employee stock ownership plan (Draft) of Dongxu Optoelectronics Technology Co., Ltd" disclosed on http//Cninfo.com.cn) 2. In the report period, the first phase employee stock ownership plan of Dongxu Optoelectronics Technology Co., Ltd that was implemented in 2015 by the company remained in the lock-up period. (For the details, please refer to "The first-phase employee stock ownership plan (Draft) of Dongxu Optoelectronics Technology Co., Ltd" and the No. 2015-007, Announcement disclosed on http//Cninfo.com.cn) 12.Material related transactions (1). Related transactions in connection with daily operation √ Applicable □Not applicable Whether Trading Principl over the limit Market Index Subjects e of approve Amount price of of of the pricing Ratio in approve Date of Related Relation Type of Price of of trade Way of similar inform related the similar d disclosu parties ship trade trade RMB0’ payment trade ation transacti related trades d re 000 availabl disclos ons transacti limited e ure ons (RMB or not ’0000) (Y/N) Yingchu an Fengxia ng Controll Sales Street ed by Constru Goods/L Referen Compre the same ction & Currenc April 2017-0 abor ce price 9,778.90 9,778.9 30,000 No 9,778.90 hensive actual installati y 29,2017 41 service setting Constru controll on received ction er Manage ment Co., Ltd Yixian Controll Sales Constru Referen Xuhua ed by Goods/L ction & Currenc April 2017-0 ce price 778.38 778.38 280,000 No 778.38 Park the same abor installati y 29,2017 41 setting Constru actual service on 36 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 ction controll received Develop er ment Co., Ltd. Guangd ong Controll Huakai ed by Constru Real Labor Referen the same ction & Currenc June estate service ce price 756.60 756.6 9,528 No 756.6 actual installati y 01,2017 Develop received setting controll on ment er Co., Ltd. Shijiazh uang Controll Sales Bofa ed by Goods/L Referen Mechani the same Currenc April 2017-0 abor A frame ce price 253.38 253.38 1,000 No 253.38 cal actual y 29,2017 41 service setting Equipm controll received ent Co., er Ltd Dongxu Controll ( Yingko Sales ed by u) Goods/L Referen the same Currenc April 2017-0 Optoele abor A frame ce price 307.69 307.69 1,000 No 307.69 actual y 29,2017 41 ctronic service setting controll Display received er Co., Ltd Sichuan Controll Xuhong Sales ed by Optoele Goods/L Referen the same Custodi Currenc April 2017-0 ctronic abor ce price 319.37 319.37 1,000 No 319.37 actual an fee y 29,2017 41 Technol service setting controll ogy Co., received er Ltd. Controll Tunghsu Sales ed by Group Goods/L Referen the same Interest Currenc April 2017-0 Finance abor ce price 1,427.88 1,427.88 10,000 No 1,427.88 actual income y 29,2017 41 Co., service setting controll Ltd. received er 37 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Dongxu Controll ( Yingko Sales Semi-fin ed by u) Goods/L ished Referen the same Currenc April 2017-0 Optoele abor products ce price 1,204.98 1,204.98 3,200 No 1,204.98 actual y 29,2017 41 ctronic service , PP setting controll Display received cases er Co., Ltd 14,827.1 Total -- -- -- 335,728 -- -- -- -- -- 8 Details of any sales return of a large Nil amount Give the actual situation in the report period where a forecast had been made for the total amounts of routine Nil related-party transactions by type to occur in the current period(if any) Reason for any significant difference between the transaction price and the Nil market reference price (if applicable) (2). Related-party transactions arising from asset acquisition or sold □Applicable √ Not applicable No such cases in the reporting period. (3). Related-party transitions with joint investments □Applicable √ Not applicable No such cases in the reporting period. (4). Credits and liabilities with related parties √ Applicable □Not applicable Whether has non-operational contact of related liability and debts or not □ Yes √ No No such cases in the reporting period. (5). Other significant related-party transactions □Applicable √ Not applicable No such cases in the reporting period. 38 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 13. Particulars about the non-operating occupation of funds by the Controlling shareholder and other related parties of the Company □Applicable √ Not applicable The company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties during the reporting period. 14. Significant contracts and execution (1).Entrustments, contracting and leasing (1)Entrustment √ Applicable □Not applicable Description of custodies During the reporting period, the Company continued entrusted with the management of Dongxu( Yingkou) Optoelectronic Display Co., Ltd. and Sichuan Xuhong Optoelectronic Technology Co., Ltd. In December 2011, Tunghsu Group signed the Equity Trusteeship Agreement with the Company , of which 60% share rights of Dongxu (Yingkou) Optoelectronic Display Co., Ltd., 51% share rights of Sichuan Xuhong Optoelectronic Technology Co., Ltd. were entrusted by the Company, where the agreement went into effect as of March 2012. The clients paid the Company 500 thousand RMB of management fee per year for each subject. See details in the table below: Name of Clients/Contractee Name of Type of Entrusting Starting Date Expiration Confirmed Trustee/Cont Asset/Contracting of Entrusting Date of Entrusting ractee Asset /Contracting Entrusting /Contracting Fee at /Contractin the Current Period g Tunghsu Group, Yingkou Coastal Development Dongxu Management Right of January 2012 Notes 1 707,547.18 Construction Co., Ltd.Minmetals (Yingkou) Optoelectron Dongxu(Yingkou) Industrial Park Development Co., Ltd. ic Optoelectroric Display Technology Co., Ltd. Tunghsu Group, Mianyang Investment City Co., Ltd. Management Right of March 2012 Notes 2 3,429,535.76 Development (Group ) Co., Ltd., Sichuan Sichuan Xuhong Changhong Electric Co., Ltd. Optoelectronic Technology Co., Ltd. Total 4,137,082.94 Note 1: The trustee fee includes share right trustee fee(500 thousand RMB/year) and operation trustee fee. The operation trustee fee is basic management fee and incentive management fee, of which the basic management fee is 1 million RMB/year, the incentive management fee is counted by 5% of the after-tax net profit yearly achieved by the trustee company(the base of the incentive management fee deducts the loss of the previous year.) Note 2: The trustee fee includes share right trustee fee(500 thousand RMB/year) and operation trustee fee. The operation trustee fee is basic management fee and incentive management fee, of which the basic management fee is 1 million RMB/year, the incentive management fee is counted by 5% of the after-tax net profit yearly 39 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 achieved by the trustee company Note3:On April 20, 2016, Dongxu (Yingkou) Optoelectronic Display Co.,Ltd, upon the approval by general shareholders’ meeting, amended the Article of Association, thus the stake of Dongxu (Yingkou) Optoelectronic Display Co.,Ltd held by Dong Xu Group was changed to 47.8% from 60%. Note 4:On April 1, 2016, Sichuan Xuhong Optoelectronic Technology Co. Ltd, with the consent of the shareholders' meeting, increased the capital with in accordance with the relevant provisions of Articles of Association; after capital increase, the stake of Sichuan Xuhong Optoelectronic Technology Co. Ltd held by Tunghsu Group was changed to 86.64% from 51%. Items which resulted in profit or loss achieving over 10% of the total profit for the Company □ Applicable √ Not applicable No such cases in the reporting period. (2)Contracting □Applicable √ Not applicable No such cases in the reporting period. (3)Leasing □Applicable √ Not applicable No such cases in the reporting period. (2)Contracting □Applicable √ Not applicable No such cases in the reporting period. (3)Leasing □Applicable √ Not applicable No such cases in the reporting period. (2).Significant guarantees √ Applicable □Not applicable (1)Guarantees In RMB’0000 External Guarantee (Exclude controlled subsidiaries) Relevant Date of Actual Complete Guarantee Name of the Amount of disclosure happening mount of Guarantee type Guarantee term implementa for Company Guarantee date/No. of (Date of guarantee tion associated 40 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 the signing or not parties guaranteed agreement) (Yes or no) amount Total of external guarantee Total of actual external approved in Period(A1) guarantee in Period(A2) Total balance of actual Total of external guarantee external guarantee at approved at Period-end(A3) Period-end(A4) Guarantee of the Company for the controlling subsidiaries Guarante Relevant e Date of Complete disclosure for Name of the Amount happening Actual implemen date/No. of Guarantee Guarantee associate Company of (Date o mount of tation the type term d guaranteed guarantee signing guarantee or guaranteed parties agreement) not amount (Yes or no) Wuhu Dongxu The joint Optoelectronic June November 132,000 94,000 liability 8 years No No Technology Co., 20,2013 12,2013 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic September December 10,000 10,000 liability 8 years No No Technology Co., 27,2013 13,2013 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic September December 10,000 10,000 liability 8 years No No Technology Co., 27,2013 19,2013 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic September February 20,000 10,000 liability 8 years No No Technology Co., 27,2013 19,2014 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic September February 10,000 10,000 liability 8 years No No Technology Co., 27,2013 25,2014 guaranty Ltd. Wuhu Dongxu September The joint 20,000 April 8,2014 20,000 8 years No No Optoelectronic 27,2013 liability 41 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Technology Co., guaranty Ltd. Wuhu Dongxu The joint Optoelectronic September 20,000 May 6,2014 20,000 liability 8 years No No Technology Co., 27,2013 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic June 7,500 May 31,2017 7,500 liability 1 year No No Technology Co., 23,2016 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic June 9,000 June 9,2017 9,000 liability 1 year No No Technology Co., 23,2016 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic June 3,000 June 9,2017 3,000 liability 1 year No No Technology Co., 23,2016 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic June 15,000 June 28,2017 15,000 liability 1 year No No Technology Co., 21,2016 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic June 14,316 June 28,2017 14,316 liability 1 year No No Technology Co., 21,2016 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic October December 10,000 10,000 liability 1 year No No Technology Co., 31,2016 6,2016 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic October December 10,000 4,000 liability 1 year No No Technology Co., 31,2016 26,2016 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic October November 52,300 52,300 liability 6 years No No Technology Co., 31,2016 25,2016 guaranty Ltd. Wuhu Dongxu The joint April February Optoelectronic 6,000 6,000 liability 1 year No No 19,2016 23,2017 Technology Co., guaranty 42 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Ltd. Zhengzhou Xufei The joint Optoelectronic May 10,000 May 30,2016 10,000 liability 1.5 years No No Technology Co., 27,2016 guaranty Ltd. Zhengzhou Xufei The joint Optoelectronic October November 10,000 5,000 liability 1 year No No Technology Co., 31,2016 29,2016 guaranty Ltd. Wuhu Dongxu Two years Optoelectronic The joint from te date June September Equipment 150,000 45,000 liability of advance of No No 20,2013 25,2014 Technology Co., guaranty the loan due Ltd. date Wuhu Dongxu Two years Optoelectronic The joint from te date September Equipment July 1,2016 9,500 9,500 liability of advance of No No 23,2016 Technology Co., guaranty the loan due Ltd. date Total of guarantee for Total of actual guarantee subsidiaries 70,000 for subsidiaries in the 54,816 approved in the Period (B1) Period (B2) Total of guarantee for Total of actual guarantee subsidiaries 528,616 for subsidiaries at 354,616 approved at Period-end (B3) Period-end (B4) Guarantee of the subsidiaries for the controlling subsidiaries Guarante Relevant e Date of Complete disclosure for Name of the Amount happening Actual implemen date/No. of Guarantee Guarantee associate Company of (Date o mount of tation the type term d guaranteed guarantee signing guarantee or guaranteed parties agreement) not amount (Yes or no) Total amount of guarantee to Total guarantee quota to the the subsidiaries actually subsidiaries approved in the incurred in the reporting reporting period (C1) period (C2) 43 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Total balance of actual Total guarantee quota to the guarantee to the subsidiaries at subsidiaries approved at the end the end of the reporting period of the reporting period (C3) (C4) Total of Company’s guarantee(namely total of the large three aforementioned) Total of guarantee in the Period Total of actual guarantee in 54,816 54,816 (A1+B1+C1) the Period(A2+B2+C2) Total of actual guarantee at Total of guarantee at Period-end 528,616 Period-end 354,616 (A3+B3+C3) (A4+B4+C4) The proportion of the total amount of actually guarantee in the 15.76% net assets of the company(A4+B4+C4) Description of the guarantee with complex method (2)Illegal providing of external guarantees □ Applicable √Not applicable No illegal providing of external guarantees in the report period. (3). Other significant contracts □Applicable √ Not applicable No such cases in the reporting period. 15.Social responsibilities (1).Overview of the annual targeted poverty alleviation (1)Half-year poverty relieving summary In December 2016, the company, for promoting the original old liberated area culture of “Jinsui revolutionary base area” in Shanxi and the sustainable development of the educational business as well as inheriting the spirit of arduous struggle for the nation and people of the older generation of revolutionaries, entered into the Donation Agreement with Shanxi Jinsui Culture and Education Development Foundation (hereinafter referred to as “Jinsui Foundation”), under which, the company would donate 3 million yuan to Shanxi Jinsui Culture and Education Development Foundation freely from the its own fund. During the reporting period, the Company actively followed up and supervised the use of donation funds for poverty alleviation. In July 2017, Shanxi Province Jinsui Cultural and Educational Development Foundation has set up the special commonweal fund "Special fund for Assistance of School Learn and Realizing Dreams ", which is the Going-school assistance commonweal fund specifically used for helping the fresh high-school graduates who have passed the graduation-year college entrance examination and would enter the college &universities from martyrs families and poor families in the old revolutionary base areas of Shanxi Jinsui. 44 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 The Foundation will carry out the organization and implementation work of the special fund in Xing County Shanxi Province from July 2017 to September 2017. According to the commonweal purpose and the relevant provisions of the foundation, this special fund in 2017 will provide no more than RMB 1 million to the 40 new college students of poor families in Dai County Xinzhou City, the 100 new college students of poor families in Xing County Luliang City and the 60 new college students of poor families in Shilou County Luliang City, thus to help them go learning in the college and realize their college & university learning dream. (2).Major environmental protection The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department No 16.Other material events □Applicable √ Not applicable No such cases in the reporting period. 17. Material events of subsidiaries □ Applicable √ Not applicable VI. Change of share capital and shareholding of Principal Shareholders 1.Changes in share capital (1). Changes in share capital In shares Before the change Increase/decrease(+,-) After the Change Amount Proporti Capitaliz Shar on ation of e Bonus Proportio common Other Subtotal Quantity allot shares n reserve ment fund 1.Shares with conditional 1,700,531,769 34.42% -299,922 -299,922 1,700,231,847 34.42% subscription 1. State-owned legal 43,988,269 0.89% 0 0 43,988,269 0.89% person shares 45 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 3.Other domestic shares 1,656,543,500 33.53% -299,922 -299,922 1,656,243,578 33.53% Incl:Domestic legal 1,654,982,828 33.50% 0 0 1,654,982,828 33.50% person shares Domestic Natural Person 1,560,672 0.03% -299,922 -299,922 1,260,750 0.03% shares II.Shares with 3,239,397,214 65.58% 299,922 299,922 3,239,697,136 65.58% unconditional subscription 1.Common shares in RMB 2,989,397,213 60.52% 299,922 299,922 2,989,697,135 60.52% 2.Foreign shares in 250,000,001 5.06% 0 0 250,000,001 5.06% domestic market III. Total of capital shares 4,939,928,983 100.00% 0 0 4,939,928,983 100.00% Reasons for share changed: √ Applicable □ Not applicable On July 28, 2016, the general elections of the board of directors and the board of supervisors were completed. After six months commenced from the date the directors, supervisors and senior executives leave the post, all the shares held by such executives will become the outstanding shares. Approval of Change of Shares □ Applicable √ Not applicable Ownership transfer of share changes □ Applicable √ Not applicable Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period □ Applicable √ Not applicable Other information necessary to disclose for the company or need to disclosed under requirement from security regulators □ Applicable √ Not applicable (2). Change of shares with limited sales condition □ Applicable √ Not applicable 2.Issuing and listing □ Applicable √ Not applicable 3. Shareholders and shareholding In Shares Total number of common Total number of preferred 391,573(Including 373,915 shareholders holding A shares shareholders at the end of shareholders that had restored 0 and 17,658 shareholders holding B shares) the the 46 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 reporting period voting right at the end of the reporting period (if any) (note 8) Particulars about shares held above 5% by shareholders or top ten shareholders Number os share Proporti Number of Changes Nature of Amount of Amount of pledged/frozen on of shares held in Shareholders shareholde restricted un-restricted State shares at period reporting r shares held shares held of Amount held(%) -end period share Domestic Non Tunghsu Group -State-own 11.32% 558,968,800 0 439,882,697 119,086,103 Pledge 558,962,697 ed legal person Domestic Non Shijiazhuang Baoshi Electronic -State-own 6.73% 332,382,171 0 0 332,382,171 Pledge 153,520,000 Group Co., Ltd. ed legal person China Fund Management Co., Ltd.-Huaxia Bank-TTCO Trust Co., Ltd.-TTCO Trust Other 4.51% 222,575,516 0 222,575,516 0 Co., Ltd.-Shunjing No.5 Single capital trust Sws Mu Fund Management Co.,Ltd.-China Merchants Bank-Huarun Shen State Other 2.25% 111,287,758 0 111,287,758 0 investment trust-Ruihua increase funds No. 2 Collective capital trust plan Penghua Fund-Ningbo Bank -Daye Trust-Daye TrustDongxu Optoelectronic Other 2.25% 111,287,758 0 111,287,758 0 increase funds II Single fund trust STAS Asset Management- Ningbo Bank-Minsheng Trust -China Minsheng TrustZhixin Other 2.25% 111,287,758 0 111,287,758 0 No.208 Dongxu Optoelectronic increase collective fund trust plan 47 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Domestic Non Shenzhen Taianer Information -State-own 2.24% 110,492,845 0 110,492,845 0 Pledge 110,492,845 Technology Co., Ltd. ed legal person Domestic Non Qianhai Equity Investment -State-own 2.24% 110,492,845 0 110,492,845 0 Pledge 48,492,845 Fund (LP) ed legal person Nuoan Fund-Industrial Securities-Nanjing Shuangan Other 2.24% 110,492,845 0 110,492,845 0 Assets Management Co., Ltd. Minsheng Royal Fund Management Co., Ltd.-Ping An - Bank-Ping An Trust-Ping An Other 2.09% 103,146,380 80,138,07 0 103,146,380 Wealth* Huitai No.163 Single 7 Fund Trust Before the country's top ten shareholders of Shenzhen Taianer Information Strategy investors or general legal person Technology Co., Ltd. and Qianhai Equity Investment Fund (LP) becomes top 10 shareholders due to rights Where involved in the company in 2016 non-public offering to subscribe, became the issued (if applicable)(See Notes 3) top 10 shareholders. The sub-holding restricted period of 12 months, ie August 28,2016 to August 17,2017. Among the shareholders , Tunghsu Group and Baoshi Group have relationship and Notes to the related relationship between constitute persons taking concerted action. The company does not know whether there the top ten shareholders or their concerted is relationship between other shareholders or whether they are persons taking action concerted action defined in Administrative Measures Relating to Acquisitions of Listed Companies Shareholding of top 10 shareholders of unrestricted shares Quantity of unrestricted shares held at Share type Name of the shareholder the end of the reporting period (Note 4) Share type Quantity RMB Common Shijiazhuang Baoshi Electronic Group Co., Ltd. 332,382,171 332,382,171 shares RMB Common Tunghsu Group 119,086,103 119,086,103 shares Minsheng Royal Fund Management Co., Ltd.-Ping RMB Common An Bank-Ping An Trust-Ping An Wealth* Huitai 103,146,380 103,146,380 shares No.163 Single Fund Trust HuaAn Future Asset-ICBC-No.1 Asset Management RMB Common 49,877,765 49,877,765 Plan of Dongxu Optoelectronic’s Private Placement shares 48 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 RMB Common China Securities Finance Co., Ltd. 34,080,112 34,080,112 shares Bank of China-Huaxia New Economic Mixed RMB Common 34,078,650 34,078,650 Securities Investment Funds shares RMB Common Huijin Asset Management Co., Ltd. 24,205,500 24,205,500 shares RMB Common Xie Xiantuan 17,044,700 17,044,700 shares RMB Common Shen Jufeng 9,474,500 9,474,500 shares RMB Common Wang Yong 7,780,000 7,780,000 shares Explanation on associated relationship or consistent The top 10 tradable shareholders of Shijiazhuang Baoshi Electronic Group C action among the top 10 shareholders of o., Ltd. and the top ten shareholders of Tunghsu non-restricted negotiable shares and that between the Group Co., Ltd. have relationship and constitute persons taking concerted act top 10 shareholders of non-restricted negotiable ion. shares and top 10 shareholders The top 10 tradable common shareholders Xie Xiantuan and Shen Jufeng by Huatai Securities Co., Ltd..and Shanghai Securities Co., Ltd. customer Notes to the shareholders involved in financing credit-backed securities trading account were holding 17,044,700 shares, securities (if any)(See Notes 4) 9,469,500 shares, accounting for0.35% and 0.19% of the total shares respectively. 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. 4. Change of the controlling shareholder or the actual controller Change of the controlling shareholder in the reporting period □ Applicable √ Not Applicable There was no any change of the controlling shareholder of the Company in the reporting period. Change of the actual controller in the reporting period □ Applicable √ Not applicable There was no any change of the actual controller of the Company in the reporting period. VII. Situation of the Preferred Shares □Applicable √Not applicable 49 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 The Company had no preferred shares in the reporting period 50 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 VIII. Information about Directors, Supervisors and Senior Executives 1. Change in shares held by directors, supervisors and senior executives √ Applicable □Not applicable Amount of Amount of Number of Number of Number of Shares Shares shares shares restricted restricted restricted held at held at increased decreased stock stock stock Office the Name Position the at the at the granted at granted at granted at status year-end year-beg reporting reporting the the reporting the ing in(share) period(sha period(sha year-begin period(share year-ending (share) re) re) . share) ) (share) Li Zhaoting Board chairman In office 0 0 0 0 0 0 0 Wang Lipeng Director,GM In office 0 0 0 0 0 0 0 Director, Gong Xin In office 100,000 0 0 100,000 100,000 0 100,000 Board secretary Zhang Independent director In office 0 0 0 0 0 0 0 Shuangcai Lu Guihua Independent director In office 0 0 0 0 0 0 0 Han Zhiguo Independent director In office 0 0 0 0 0 0 0 Chairman of the Guo Chunlin supervisory In office 0 0 0 0 0 0 0 committee Xu Lingzhi Supervisor In office 0 0 0 0 0 0 0 Chen Dewei Supervisor In office 0 0 0 0 0 0 0 Xie Juwen Supervisor In office 0 0 0 0 0 0 0 Wang Supervisor In office 0 0 0 0 0 0 0 Huanhuan Wang Deputy GM In office 0 0 0 0 0 0 0 Jianqiang Wang Deputy GM In office 0 0 0 0 0 0 0 Zhonghui Liu Wentai Deputy GM In office 125,000 0 0 125,000 150,000 0 150,000 Wang Deputy GM In office 0 0 0 0 0 0 0 Junming Huang CFO In office 0 0 0 0 0 0 0 51 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Jinliang Zhou Bo Director, CFO Dimission 0 0 0 0 0 0 0 Total -- -- 225,000 0 0 225,000 250,000 0 250,000 2. Change in shares held by directors, supervisors and senior executives √ Appicable □Not applicable Name Positions Types Date Reason Zhou Bo Director,CFO Dimission April 28,2017 Job change Huang Jinliang CFO Appointment April 28,2017 New Appointment 52 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 IX. Corporate Bond Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but not folly cashed on the approval date of annual report Yes 1. Basic information of the corporate bonds Bond Abbreviated Interes Method of repayment of the Bond Name Code Issue Date Date Due Balance(R Bond Name t Rate principal and interest payment MB’0000) 2015- corporate Interest paid every year, the bond of Dongxu 15 Dongxu May principal will be repaid with the 112243 May 19,2020 100,000 6.00% Optoelectronic bonds 19,2015 last unpaid interest in one time as Technology Co., Ltd the bond due Listed place or Transaction place for Shenzhen Stock Exchange the corporate bonds Arrangement of investor’s eligibility Investor’s puttable right Information about interest paid and The first period bond interest 60,000,000.00 was paid in full amount on schedule in the bonds honored during the reporting current period. period Implementation of relevant special clauses(if applicable) such as option None happened in the reporting period clause for the bond issuer or investors and exchangeable clause 2.Information about the bond trustee and credit rating agency Bond trustee: 19-20/F, Main Tower , Guangzhou Guangzhou Shi Jianhua, Business International Finance Center, No.5 Telepho Name Securities Co., Contacts Yan 020-88836999 Address Zhujiang West Road, Tianhe ne Ltd. Xiangjun District Guangzhou City The credit rating agency who follow up and rate the corporate bonds in the reporting period: Business Room 508 Ailiyuan Apartment, No.38 Water Name United Rating Co.,Ltd Address Park North Road, Nankai District, Tianjin City 53 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 3.Information about the use of the funds raised by issuing corporate bonds The information of the use of the funds raised Using the funds raised by issuing corporate bonds strictly conforming to the purpose by issuing corporate bonds and related stipulated by Rules of Management and Use of the Raised Funds and the Prospectus, implementation procedure and implemented the corresponding approval procedures Operation status of the special account for the Normal raised funds Whether the use of the raised funds conforming to the purpose, use plan and other The use of the raised funds conformed to the purpose promised in the Prospectus provisions specified in the Prospectus 4. Information about the rating of the corporate bonds On May 24,2017, United Ratings Co., Ltd. issued trace rating report LHPZ [2017] No. 448 based on the company’s 2016 Annual Report. This rating result is long-term credit rating AA+ and its outlook is "Steady".“"15 Dongxu bond" bond credit rating of AA , 5. The corporate bond’s credit mechanism, repayment plan and other safeguard measures for repayment Repayment Plan I. Payment of the interest 1. The interest of the bonds shall be paid each year and the last payment of interest shall be paid with the principal. Every payment of interest shall not be charged on interest after the interest paying day and the principal shall not be charged on interest after the bond’s date due. The interest payment day of this corporate bond is May 19 of each year from 2016 to 2020(If it is not a working day, the payment day will be postponed to the first working day after the day).If the investors exercise the puttable right at the end of the third year in the duration of the bond, the interest payment day of the bonds sold back is May 19 of each year from 2016 to 2018. 2. The payment of the interest of the bonds shall be handled through the bond registration institution and other related institutions. The concrete information of the interest payment will be specified in the Interest Payment Announcement issued on the media designated by CSRC, with in accordance with the relevant state regulations. 3. According to relevant national tax laws and regulations, the investor of the corporate bond shall fully bear the relevant tax should be paid. II. The repayment of the principal 1. The principal will be fully repaid in a time, and its repaying day is May 19, 2020. If the investors exercise the puttable right at the end of the third year in the duration of the bond, the repaying day of the principal of the bonds being sold back is May 19, 2018. (If the repaying day aforesaid is not a working day, the repaying day shall be postponed to the first working day after the original day, and there is no need to pay interest in the deferred period) 2. The repayment of the principal of the bonds will be handled through the bond registration institution and other related institutions. The concrete information of repayment of the principal of the bonds will be specified in the Principal Repayment Announcement issued on the media designated by CSRC, with in accordance with the relevant state regulations. Safeguard measures for the repayment I. A designated special department in charge of the repayment working 54 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 The company designated its finance department to take the lead in the coordination work for repayment of the bonds and the finance department shall coordinate other relevant departments to schedule the demanded funds for the repayment of the bonds in every year’s financial budget, for ensuring the repayment of the interest and principal of the bonds is timely, guaranteeing the bond-holder’s interest. The company will set up a working team for repayment 15days before the day that is the interest paying day or principal repaying day of the bonds, with the personnel of the finance department being included, to specially in charge of the work of paying the interest of the bonds and the repayment of the principal. II. Establishing Meeting Rules for Bond-holders According to the provisions specified in the Pilot Approach, the company with bond trustee has established the Meeting Rules for Bond-holders for the corporate bonds. The Meeting Rules for Bond-holders specified the scope, procedures and other important items for the bond-holders to exercise rights through the Meeting of the Bond-holders, which provided a reasonable institutional arrangement for the timely and full payment to the interest and the principal of the corporate bonds. III. Making the full use of the bond trustee According to the requirements specified in the Pilot Approach, the company has adopted the institution of bond trustee, engaged Guangzhou Securities Co.,Ltd as the trustee of the bonds this time and signed the Agreement of Bond Entrusted Management with Guangzhou Securities. The Bond Trustee shall represent all the bond-holders to supervise the relevant information about the company and take all necessary measures to protect the legitimate interest of the bond-holders when the interest or principal of the bonds cannot be repaid in time. The company shall strictly conform to the provisions specified in the Agreement of Bond Entrusted Management, being cooperative when the bond trustee performance its duties, and regularly submit the report of commitment fulfillment status to the bond trustee. When there is a possible bond default, the company shall notice the bond trustee in time, thus the bond trustee can take other necessary measures in time according to the Bond Entrusted Management. Ⅳ. Strictly fulfilling the obligation of information disclosure The company shall adhere to the information disclosure principles of authentic, accurate and completed, making the information of the company’s repaying ability and use of the raised funds to be supervised by the bond trustee and shareholders, for preventing the risk of repayment. According to the Agreement of Bond Entrusted Management and relevant regulations, the company shall release the information of major issues, which include but not limited to the following contents: (1) According to the Prospectus and agreement with the registered trustee institution, the company shall transfer the maturity interest payment or principal to the account designated by the registered trustee institution; (2) By estimate or in fact, the company cannot fully repay the interest or principal of the bonds in time according to the provisions stipulated in the Prospectus; (3) Singing the guarantee contract for external or other major contracts may have significant adverse effects of repaying the interest and principal of the bonds; (4) A severe loss occurred or expected to occur, and the loss exceeds 10% of the net asset audited in the last accounting year; (5) Occurrence of capital reduction, merger, division, dissolution, file for bankruptcy, entering into bankruptcy procedure or other main changes of the company; (6) Occurrence of the amount of subject in the major arbitration or lawsuit exceeding 10% of the net asset audited in the last accounting year; (7) Planning to dispose the asset or debt with subject amount exceeding 10% of the net asset audited in the last accounting year; (8) Planning to change the bond trustee; (9) Failing to perform or Planning to change the stipulations specified in the Prospectus; (10) Alteration of the designated person for specially in charge of the relevant matters of the corporate bonds; (11) Occurrence of suspending the bond transaction; (12) Others may significantly impact the repaying of the interest and principal or circumstances specified by laws, administrative regulations and stipulations by the CSRC or exchange. 55 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Ⅴ. Setting up the capital management plan and strictly implementing the plan After the issuance of the bonds, the company shall further reinforce the company’s assets and liabilities management, liquidity management, use management of the raised funds, funds management and so forth according to the company’s debt structure. Also, the company will set up monthly and yearly funds use plan based on the maturity of repaying the interest and principal, ensuring on-schedule, timely and full-amount preparing of the funds for repaying every year’s interest or principal of the bonds to adequately protect the investor’s interest. VI. Commitments According to the resolutions of the issuance of the bonds approved on the board meeting on Oct 21, 2014 and the general meeting of shareholders on Nov 6, 2014, when the company cannot repay the interest or principal of the bonds in time or fully repay the interest or principal of the bonds, the company shall take the following resolutions and make corresponding measures: (1) None profit distribution to shareholders; (2) Postponing capital expenditure items, such as major investment, merger and acquisition; (3) Reducing or stopping the salaries and bonuses of the directors and senior management personnel; (4) No transferring of principal responsible personnel and so on. 6. Information about the bond-holder meeting during the reporting period There was no bond-holder meeting convened in the reporting period. 7. Information about the obligations fulfilled by the bond trustee in the reporting period The bond trustee has been continuously following up the company’s credit status, and paid a visit to the company in June 2017, checking the bank statement of the designated account for the raised funds. Also, the trustee has been continuously supervising the use of the raised funds. 8. The key accounting data and financial indicators of the latest two years to the end of the reporting period In RMB’0000 As at the end of the reporting Items As at the end of last year YoY+/-(%)he same period period Current ratio 331.70% 380.90% -49.20% Debt ratio 50.52% 50.73% -0.21% Quick ratio 296.36% 316.23% -19.87% Reporting period Same period of last year YoY+/-(%) EBITDA/Total debts 2.8326 2.9984 -5.53% Interest coverage ratio 100.00% 100.00% 0.00% Cash interest coverage ratio 100.00% 100.00% 0.00% The material reasons for the changed ratio of the accounting data or financial indicators exceeds 30% over the last 56 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 year □ Applicable √ Not applicable 9. The company fails to repay the debt □ Applicable √ Not applicable No such cases in the reporting period. 10. Information about the repayment of interest and principal for other bonds or debt financing instruments 1. Bonds issuing, interest payment and cashing within the report period The company 8th Board of Directors approved the application to National Association of Financial Market Institutional Investors (NAFMII) for registration and issuance of less than 4.7 billion yuan medium term note on September 8, 2016. The extraordinary general shareholders’ meeting was convoked on September 26, 2016 and approved the program concerning the proposed registration and issuance of the medium term note. The medium term note in 2016 was 4.7 billion yuan in two periods including the first period with two types of (3+2 years) and 5 years totaling up to 3 billion yuan and the second period with two types of (3+2 years) and 5 years totaling up to 1.7 billion yuan, which would both adopt the interest payment per year, principal repayment upon expiration and the interest payment together with the principal cashing for the last period. The interest payment period has not expires within the report period and the interest accrued was 23,924,931.51 yuan. 2. Unmatured bonds issuing, interest payment and cashing in previous years As approved by China Securities Regulatory Commission file of ZJXK[2015] No. 635, the company issued toward the public 1 billion bones on May 19, 2015 and the first period bond interest 60,000,000.00 was paid in full amount on schedule in the current period. 11.Information about the bank credit obtaining and use, as well as repayment of the bank loans during the reporting period 12. Information about fulfillment of the stipulations or commitments specified in the Prospectus of the issuance of the bonds during the reporting period During the reporting period, the company had been strictly conforming to the stipulations specified in the Prospectus of the issuance of the bonds to use the raised funds, and the company had fulfilled the commitments of not using any raised funds to indirectly or directly invest real estate business or raise capital for the subsidiaries engaged in real estate business. 13. Major events occurred during the reporting period 14. Whether the corporate bonds have a guarantor □ Yes √No 57 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 X. Financial Report I. Auditor’s report Whether the semi-annual report is audited √ Yes □No Type of audit opinion Standard Unqualified Audit Opinion Date for signing the auditor’s report August 10,2017 Name of audit firm Zhongxingcai Guanghua Certified Public Accountants (LLP) The audit report number ZXCGHSZZD(2017)No.:105085 Name of the certified accountants Qi Zhenghua, Meng Xiaoguang Whether the semi-annual report is non-standard audit report □ Yes √No II. Financial statements Currency unit for the statements in the notes to these financial statements: RMB 1.Consolidated Balance sheet Prepared by: Dongxu Optoelectronic Technology Co., Ltd. June 30,2017 In RMB Items Year-end balance Year-beginning balance Current asset: Monetary fund 22,873,558,641.80 26,056,117,216.86 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 94,998,273.32 55,340,287.95 Account receivable 2,341,912,029.32 1,652,714,640.77 Prepayments 1,800,672,152.60 862,432,895.10 Insurance receivable Reinsurance receivable 58 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Provisions of Reinsurance contracts receivable Interest receivable 16,239,166.23 Dividend receivable Other account receivable 1,028,308,709.54 186,071,085.24 Repurchasing of financial assets Inventories 3,670,952,734.10 2,688,967,436.27 Assets held for sales 3,855,435.58 Non-current asset due in 1 year Other current asset 2,624,314,218.42 3,203,453,317.38 Total of current assets 34,454,811,360.91 34,705,096,879.57 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 477,648,310.87 72,354,803.70 Property investment 58,974,678.04 Fixed assets 9,068,489,094.66 8,952,341,070.47 Construction in progress 2,457,153,171.64 1,772,629,310.84 Engineering material 304,468.05 Fixed asset disposal Production physical assets Gas & petrol Intangible assets 570,576,105.15 578,194,545.68 R & D petrol 1,941,747.58 Goodwill 67,977,513.17 33,935,384.57 Long-germ expenses to be amortized 16,507,614.66 11,756,506.76 Differed income tax asset 302,145,572.07 312,555,500.36 Other non-current asset 270,262,370.83 387,151,100.41 Total of non-current assets 13,295,531,614.25 12,121,222,690.84 Total of assets 47,746,487,539.58 46,826,319,570.41 Current liabilities Short-term loans 4,474,513,562.31 4,940,816,200.13 59 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 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 219,260,464.01 393,136,676.05 Account payable 1,218,159,019.40 1,165,418,491.73 Advance payment 742,441,952.77 414,078,061.38 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 45,837,714.84 42,851,392.30 Tax payable 136,565,229.52 224,310,530.71 Interest payable 178,823,882.97 81,610,513.91 Dividend payable 62,702,011.96 30,000,000.00 Other account payable 130,162,161.94 114,993,136.80 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 3,083,133,090.74 1,618,589,512.42 Other current liability 95,735,818.64 85,535,473.05 Total of current liability 10,387,334,909.10 9,111,339,988.48 Non-current liabilities: Long-term loan 5,830,941,823.23 6,596,159,000.00 Bond payable 5,660,557,536.50 5,653,912,494.73 Including:preferred stock Sustainable debt Long-term payable 1,366,525,476.86 1,514,308,568.67 Long-term payable employees’s remuneration Special payable Expected liabilities 60 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Differed income 375,000,727.41 380,949,662.27 Differed income tax liability 401,452.67 413,257.79 Other non-current liabilities 500,000,000.00 500,000,000.00 Total non-current liabilities 13,733,427,016.67 14,645,742,983.46 Total of liability 24,120,761,925.77 23,757,082,971.94 Owners’ equity Share capital 4,939,928,983.00 4,939,928,983.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 15,207,757,024.07 15,207,210,810.89 Less:Shares in stock 4,422,320.00 4,422,320.00 Other comprehensive income -1,368.93 Special reserves Surplus reserves 188,044,070.48 188,044,070.48 Common risk provision Undistributed profit 2,175,599,543.05 1,885,538,821.49 Total of owner’s equity belong to the 22,506,905,931.67 22,216,300,365.86 parent company Minority shareholders’ equity 1,118,819,682.15 852,936,232.61 Total of owners’ equity 23,625,725,613.81 23,069,236,598.47 Total of liabilities and owners’ equity 47,746,487,539.58 46,826,319,570.41 Legal representative :Li Zhaoting Person-in-charge of the accounting work:Huang Jinliang Person-in -charge of the accounting organ:Gao Feipeng 2. Balance sheet of the Parent Company In RMB Items Year-end balance Year-beginning balance Current asset: Monetary fund 10,805,236,113.83 16,951,756,537.76 Financial assets measured at fair value 61 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 with variations accounted into current income account Derivative financial assets Bill receivable 450,000.00 946,400.00 Account receivable 14,559,673.35 19,896,753.26 Prepayments 9,921,641.91 4,280,852.37 Interest receivable Dividend receivable 570,000,000.00 Other account receivable 7,811,632,642.58 4,925,419,456.78 Inventories 479,930,164.82 500,254,494.97 Assets held for sales Non-current asset due in 1 year Other current asset 1,501,365,249.58 2,000,019,211.84 Total of current assets 20,623,095,486.07 24,972,573,706.98 Non-current assets: Disposable financial asset Expired investment in possess Long-term receivable Long term share equity investment 15,476,184,303.46 11,373,791,986.49 Property investment Fixed assets 46,995,082.55 49,516,721.87 Construction in progress Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 9,784,286.69 9,951,171.11 R & D petrol Goodwill Long-germ expenses to be amortized Differed income tax asset 337,853.35 3,712,603.85 Other non-current asset 1,381,400.00 Total of non-current assets 15,534,682,926.05 11,436,972,483.32 Total of assets 36,157,778,412.12 36,409,546,190.30 Current liabilities 62 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Short-term loans 2,660,000,000.00 3,242,500,000.00 Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable 159,820,750.00 Account payable 146,849,648.18 147,012,816.26 Advance payment 421,587.90 10,587.90 Employees’ wage payable 3,845,281.50 3,700,741.68 Tax payable 19,655,819.05 20,970,299.00 Interest payable 168,253,395.67 72,569,720.24 Dividend payable 62,702,011.96 Other account payable 2,802,343,584.48 2,889,692,312.04 Liabilities held for sales Non-current liability due in 1 year 1,775,233,333.36 400,005,000.00 Other current liability Total of current liability 7,639,304,662.10 6,936,282,227.12 Non-current liabilities: Long-term loan 2,535,266,666.62 2,887,600,000.00 Bond payable 5,660,557,536.50 5,653,912,494.73 Including:preferred stock Sustainable debt Long-term payable Employees’ wage payable Special payable Expected liabilities Differed income Differed income tax liability Other non-current liabilities Total of Non-current liabilities 8,195,824,203.12 8,541,512,494.73 Total of liability 15,835,128,865.22 15,477,794,721.85 Owners’ equity Share capital 4,939,928,983.00 4,939,928,983.00 Other equity instrument Including:preferred stock 63 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Sustainable debt Capital reserves 15,130,988,536.27 15,130,191,736.27 Less:Shares in stock 4,422,320.00 4,422,320.00 Other comprehensive income Special reserves Surplus reserves 169,054,846.15 169,054,846.15 Undistributed profit 87,099,501.48 696,998,223.03 Total of owners’ equity 20,322,649,546.90 20,931,751,468.45 Total of liabilities and owners’ equity 36,157,778,412.12 36,409,546,190.30 3.Consolidated income statement In RMB Items Report period Same period of the previous year I. Income from the key business 4,641,285,527.91 2,882,059,154.41 Incl:Business income 4,641,285,527.91 2,882,059,154.41 Interest income Insurance fee earned Fee and commission received II. Total business cost 3,925,002,093.95 2,325,029,677.70 Incl:Business cost 3,338,875,149.90 1,938,309,643.65 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 45,165,094.52 20,441,727.88 Sales expense 29,084,235.15 31,577,716.56 Administrative expense 193,715,154.96 236,706,264.85 Financial expenses 317,954,221.40 94,439,392.61 Asset impairment loss 208,238.02 3,554,932.15 Add:Gains from change of fir value (“-”for loss) 64 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Investment gain(“-”for loss) 6,676,924.21 81,758.31 Incl: investment gains from affiliates -15,506,492.83 81,758.31 Gains from currency exchange (“-”for loss) Other income 86,680,000.00 III. Operational profit(“-”for loss) 809,640,358.17 557,111,235.02 Add :Non-operational income 66,069,887.52 103,509,279.68 Including:Income from disposal of non-current assets Less:Non business expenses 450,171.43 12,489.34 Incl:Loss from disposal of non-current 30,537.14 4,430.74 assets IV.Total profit(“-”for loss) 875,260,074.26 660,608,025.36 Less:Income tax expenses 179,430,671.23 90,283,601.51 V. Net profit 695,829,403.03 570,324,423.85 Net profit attributable to the owners of 635,855,750.37 545,963,710.72 parent company Minority shareholders’ equity 59,973,652.66 24,360,713.13 VI. Other comprehensive income -1,368.93 Net of profit of other comprehensive inco me attributable to owners of the parent co -1,368.93 mpany. (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit pla ns of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclass ified into profit or loss. (II) Other comprehensive income that will be -1,368.93 reclassified into profit or loss. 1.Other comprehensive income under the equity method investee can be reclassifie d into profit or loss. 2.Gains and losses from changes in fair v 65 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 alue available for sale financial assets 3.Held-to-maturity investments reclassifi ed to gains and losses of available for sal e financial assets 4.The effective portion of cash flow hedg es and losses 5.Translation differences in currency fina -1,368.93 ncial statements 6.Other Net of profit of other comprehensive inco me attributable to Minority shareholders’ equity VII. Total comprehensive income 695,828,034.10 570,324,423.85 Total comprehensive income attributable 635,854,381.44 545,963,710.72 to the owner of the parent company Total comprehensive income 59,973,652.66 24,360,713.13 attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share 0.13 0.14 (II)Diluted earnings per share 0.13 0.14 The current business combination under common control, the net profits of the combined party before achieved ne t profit of RMB 0, last period the combined party realized RMB 0. Legal representative :Li Zhaoting Person-in-charge of the accounting work:Huang Jinliang Person-in -charge of the accounting organ:Gao Feipeng 4. Income statement of the Parent Company In RMB Items Report period Same period of the previous year I. Income from the key business 38,597,681.18 383,847,821.44 Incl:Business cost 28,092,263.28 236,140,885.06 Business tax and surcharge 3,585,313.26 521,358.24 Sales expense 684,247.25 Administrative expense 22,819,056.56 27,351,438.20 Financial expenses 251,791,850.48 75,426,926.67 66 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Asset impairment loss -279,738.15 230,615.03 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 6,675,734.01 81,758.31 Incl: investment gains from affiliates -15,507,683.03 81,758.31 Other income II. Operational profit(“-”for loss) -260,735,330.24 43,574,109.30 Add :Non-operational income 6,388.00 51,255.93 Including:Income from disposal of non-current assets Less:Non business expenses Incl:Loss from disposal of non-current assets III.Total profit(“-”for loss) -260,728,942.24 43,625,365.23 Less:Income tax expenses 3,374,750.50 6,546,013.74 IV. Net profit(“-”for net loss) -264,103,692.74 37,079,351.49 V.Net of profit of other comprehensive i ncome (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit pl ans of changes in net debt or net assets 2.Other comprehensive income under th e equity method investee can not be recl assified into profit or loss. (II) Other comprehensive income that will b e reclassified into profit or loss. 1.Other comprehensive income under th e equity method investee can be reclassi fied into profit or loss. 2.Gains and losses from changes in fair value available for sale financial assets 3.Held-to-maturity investments reclassif ied to gains and losses of available for s ale financial assets 67 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 4.The effective portion of cash flow hed ges and losses 5.Translation differences in currency fin ancial statements 6.Other VI. Total comprehensive income -264,103,692.74 37,079,351.49 VII. Earnings per share: (I)Basic earnings per share (II)Diluted earnings per share 5. Consolidated Cash flow statement In RMB Items Report period Same period of the previous year I.Cash flows from operating activities Cash received from sales of goods or 4,944,527,769.84 3,428,041,704.57 rending of services Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Net increase of trade financial asset disposal Cash received as interest, processing fee and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned 71,010,781.41 121,533,678.40 Other cash received from business 205,407,031.15 160,131,838.12 operation 68 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Sub-total of cash inflow 5,220,945,582.40 3,709,707,221.09 Cash paid for purchasing of 5,057,263,911.26 1,610,664,099.74 merchandise and services Net increase of client trade and advance 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 237,953,186.59 292,568,158.80 Taxes paid 531,991,037.56 313,119,724.25 Other cash paid for business activities 808,099,133.96 212,246,295.36 Sub-total of cash outflow from business 6,635,307,269.37 2,428,598,278.15 activities Cash flow generated by business -1,414,361,686.97 1,281,108,942.94 operation, net II.Cash flow generated by investing Cash received from investment 5,399,999,000.00 retrieving Cash received as investment gains 22,183,417.04 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 190,962.49 6,120,000.00 Sub-total of cash inflow due to 5,422,373,379.53 6,120,000.00 investment activities Cash paid for construction of fixed assets, intangible assets 1,215,593,735.72 306,468,934.04 and other long-term assets Cash paid as investment 5,375,599,000.00 299,846,640.00 Net increase of loan against pledge Net cash received from subsidiaries and 2,886,994.56 7,619,727.41 other operational units Other cash paid for investment 50,000,000.00 69 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 activities Sub-total of cash outflow due to 6,644,079,730.28 613,935,301.45 investment activities Net cash flow generated by investment -1,221,706,350.75 -607,815,301.45 III.Cash flow generated by financing Cash received as investment 185,130,000.00 81,000,000.00 Incl: Cash received as investment from 185,130,000.00 81,000,000.00 minor shareholders Cash received as loans 3,252,676,666.66 4,077,100,000.00 Cash received from bond placing Other financing –related ash received 235,701,557.06 1,878,688,941.32 Sub-total of cash inflow from financing 3,673,508,223.72 6,036,788,941.32 activities Cash to repay debts 2,975,447,331.44 2,251,801,800.00 Cash paid as dividend, profit, or 732,650,977.80 598,359,752.63 interests Incl: Dividend and profit paid by 30,000,000.00 subsidiaries to minor shareholders Other cash paid for financing activities 449,714,523.33 94,762,604.60 Sub-total of cash outflow due to 4,157,812,832.57 2,944,924,157.23 financing activities Net cash flow generated by financing -484,304,608.85 3,091,864,784.09 IV. Influence of exchange rate 8,712,454.36 9,759,201.83 alternation on cash and cash equivalents V.Net increase of cash and cash -3,111,660,192.21 3,774,917,627.41 equivalents Add: balance of cash and cash 25,037,335,091.60 11,964,769,404.73 equivalents at the beginning of term VI ..Balance of cash and cash 21,925,674,899.39 15,739,687,032.14 equivalents at the end of term 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 51,105,726.47 404,441,782.23 rending of services 70 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Tax returned Other cash received from business 4,513,958,096.78 200,000,000.00 operation Sub-total of cash inflow 4,565,063,823.25 604,441,782.23 Cash paid for purchasing of 172,870,594.52 363,482,385.72 merchandise and services Cash paid to staffs or paid for staffs 5,039,091.78 5,700,415.82 Taxes paid 8,445,826.76 9,832,273.74 Other cash paid for business activities 7,197,399,250.81 878,044,549.66 Sub-total of cash outflow from business 7,383,754,763.87 1,257,059,624.94 activities Cash flow generated by business -2,818,690,940.62 -652,617,842.71 operation, net II.Cash flow generated by investing Cash received from investment 5,399,999,000.00 retrieving Cash received as investment gains 592,183,417.04 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 5,992,182,417.04 6,120,000.00 investment activities Cash paid for construction of fixed assets, intangible assets 7,800.00 and other long-term assets Cash paid as investment 9,117,899,000.00 1,392,801,140.00 Net cash received from subsidiaries and other operational units Other cash paid for investment 170,000,000.00 activities Sub-total of cash outflow due to 9,287,899,000.00 1,392,808,940.00 investment activities Net cash flow generated by investment -3,295,716,582.96 -1,386,688,940.00 III.Cash flow generated by financing 71 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Cash received as investment Cash received as loans 2,016,666,666.66 3,062,700,000.00 Cash received from bond placing Other financing –related ash received 108,271,893.76 70,281,601.36 Sub-total of cash inflow from 2,124,938,560.42 3,132,981,601.36 financing activities Cash to repay debts 1,576,266,666.68 1,220,000,000.00 Cash paid as dividend, profit, or 552,539,171.23 389,290,594.79 interests Other cash paid for financing activities 28,679,113.18 245,087,948.72 Sub-total of cash outflow due to 2,157,484,951.09 1,854,378,543.51 financing activities Net cash flow generated by financing -32,546,390.67 1,278,603,057.85 IV. Influence of exchange rate 433,490.32 alternation on cash and cash equivalents V.Net increase of cash and cash -6,146,520,423.93 -760,703,724.86 equivalents Add: balance of cash and cash 16,951,756,537.76 9,835,157,652.41 equivalents at the beginning of term VI ..Balance of cash and cash 10,805,236,113.83 9,074,453,927.55 equivalents at the end of term 7. Consolidated Statement on Change in Owners’ Equity Amount in this period In RMB Amount in this period Owner’s equity Attributable to the Parent Company Other Equity Minor instrusment Other Commo Total of Items Share Less: Speciali Attribut shareho Capital Compre Surplus n risk owners’ Capita prefer Shares zed able lders’ Sustai reserves hensive reserves provisio equity l red Other in stock reserve profit equity nable Income n stock debt 4,939, 15,207, 1,885,5 23,069, I.Balance at the 4,422,3 188,044 852,936 928,98 210,810 38,821. 236,598 end of last year 20.00 ,070.48 ,232.61 3.00 .89 49 .47 72 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the 4,939, 15,207, 1,885,5 23,069, 4,422,3 188,044 852,936 beginning of 928,98 210,810 38,821. 236,598 20.00 ,070.48 ,232.61 current year 3.00 .89 49 .47 III.Changed in the 546,213 -1,368.9 290,060 265,883 556,489 current year .18 3 ,721.56 ,449.54 ,015.35 (1)Total 635,855 59,973, 695,829 comprehensive ,750.37 652.66 ,403.03 income (II)Investment 186,888 187,434 or decreasing of ,381.50 ,594.68 capital by owners 1.Ordinary Share 546,213 186,888 186,888 s invested by share .18 ,381.50 ,381.50 holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 546,213 546,213 4.Other .18 .18 -345,79 -345,79 (III)Profit 5,028.8 5,028.8 allotment 1 1 1.Providing of surplus reserves 2.Providing of common risk provisions 73 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 3.Allotment to the -345,79 -345,79 owners (or 5,028.8 5,028.8 shareholders) 1 1 4.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V). Special reserves 1. Provided this 5,289,1 5,289,1 year 90.20 90.20 -5,289,1 5,289,1 2.Used this term 90.20 90.20 -1,368.9 19,021, 19,020, (VI)Other 3 415.38 046.45 4,939, 15,207, 2,175,5 1,118,8 23,625, IV. Balance at the 4,422,3 -1,368.9 188,044 928,98 757,024 99,543. 19,682. 725,613 end of this term 20.00 3 ,070.48 3.00 .07 05 15 .82 Amount in last year In RMB Amount in last year Owner’s equity Attributable to the Parent Company Other Equity Total Minor Items instrusment Other Commo of Share Less: Speciali Attribut shareho Capital Compre Surplus n risk owner Capita prefer Shares zed able lders’ Sustai reserves hensive reserves provisio s’ l red Other in stock reserve profit equity nable Income n equity stock debt 74 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 3,835, 9,391,3 14,561, I.Balance at the 9,011,5 132,723 969,380 241,966 000,52 88,905. 448,764 end of last year 20.00 ,528.42 ,500.97 ,823.32 6.00 89 .60 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the 3,835, 9,391,3 14,561, 9,011,5 132,723 969,380 241,966 beginning of 000,52 88,905. 448,764 20.00 ,528.42 ,500.97 ,823.32 current year 6.00 89 .60 1,104, 5,815,8 8,507,7 III.Changed in the -4,589,2 55,320, 916,158 610,969 928,45 21,905. 87,833. current year 00.00 542.06 ,320.52 ,409.29 7.00 00 87 (1)Total 1,239,9 1,310,5 70,595, comprehensive 28,899. 24,656. 756.94 income 40 34 (II)Investment 1,104, 5,815,8 7,446,5 -4,589,2 521,242 or decreasing of 928,45 21,905. 82,118. 00.00 ,556.53 capital by owners 7.00 00 53 1.Ordinary Share 1,104, 5,805,5 7,431,6 521,242 s invested by share 928,45 07,668. 78,682. ,556.53 holders 7.00 84 37 2 . Holders of oth er equity instrume nts invested capital 3.Allotment to the -4,589,2 4,589,2 owners (or 00.00 00.00 shareholders) 10,314, 10,314, 4.Other 236.16 236.16 (IV) Internal -323,77 -298,45 55,320, -30,000 transferring of 0,578.8 0,036.8 542.06 ,000.00 owners’ equity 8 2 1. Capitalizing of 55,320, -55,320, capital reserves (or 542.06 542.06 75 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up -268,45 -298,45 -30,000 losses by surplus 0,036.8 0,036.8 ,000.00 reserves. 2 2 4. Other (VI )Special reserves 1. Provided this year 2.Used this term (VII)Other IV. Balance at the end of this term (V) Special reserves 1. Provided this 5,758,1 5,758,1 year 64.61 64.61 -5,758,1 -5,758,1 2.Used this term 64.61 64.61 49,131, 49,131, (VI)Other 095.82 095.82 4,939, 15,207, 1,885,5 23,069, IV. Balance at the 4,422,3 188,044 852,936 928,98 210,810 38,821. 236,598 end of this term 20.00 ,070.48 ,232.61 3.00 .89 49 .47 8.Statement of change in owner’s Equity of the Parent Company Amount in this period In RMB Amount in this period Other Equity instrusment Other Less: Common Attribut Total of Items Share Capital Compreh Surplus preferre Shares in risk able owners’ Capita Sustain Other reserves ensive reserves d stock stock provision profit equity able Income 76 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 debt I.Balance at the 4,939,92 15,130,19 4,422,320 169,054,8 696,998 20,931,75 end of last year 8,983.00 1,736.27 .00 46.15 ,223.03 1,468.45 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the 4,939,92 15,130,19 4,422,320 169,054,8 696,998 20,931,75 beginning of 8,983.00 1,736.27 .00 46.15 ,223.03 1,468.45 current year -609,89 III.Changed in the 796,800.0 -609,101, 8,721.5 current year 0 921.55 5 (I)Total -264,10 -264,103, comprehensive 3,692.7 692.74 income 4 (II) Investment or 796,800.0 796,800.0 decreasing of 0 0 capital by owners 1.Ordinary Share s invested by share holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 796,800.0 796,800.0 4.Other 0 0 -345,79 (III)Profit -345,795, 5,028.8 allotment 028.81 1 1.Providing of surplus reserves 2.Allotment to the -345,79 -345,795, owners (or 5,028.8 028.81 77 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 shareholders) 1 3.Other (IV)Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V) Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at the 4,939,92 15,130,98 4,422,320 169,054,8 87,099, 20,322,64 end of this term 8,983.00 8,536.27 .00 46.15 501.48 9,546.90 Amount in last year In RMB Amount in last year Other Equity instrusment Other Less: Common Attribut Total of Items Share Capital Compreh Surplus preferre Sustain Shares in risk able owners’ Capital Other reserves ensive reserves d stock able stock provision profit equity Income debt I.Balance at the 3,835,00 9,321,098 9,011,520 113,734,3 467,563 13,728,38 end of last year 0,526.00 ,967.43 .00 04.09 ,381.30 5,658.82 Add: Change of accounting policy Correcting of previous errors 78 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Other II.Balance at the 3,835,00 9,321,098 9,011,520 113,734,3 467,563 13,728,38 beginning of 0,526.00 ,967.43 .00 04.09 ,381.30 5,658.82 current year III.Changed in the 1,104,92 5,809,092 -4,589,20 55,320,54 229,434 7,203,365 current year 8,457.00 ,768.84 0.00 2.06 ,841.73 ,809.63 (I)Total 553,205 553,205,4 comprehensive ,420.61 20.61 income (II) Investment or 1,104,92 5,809,092 -4,589,20 6,918,610 decreasing of 8,457.00 ,768.84 0.00 ,425.84 capital by owners 1.Ordinary Share 1,104,92 5,805,507 6,910,436 s invested by share 8,457.00 ,668.84 ,125.84 holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and -4,589,20 4,589,200 accounted as 0.00 .00 owners’ equity 3,585,100 3,585,100 4.Other .00 .00 -323,77 (III)Profit 55,320,54 -268,450, 0,578.8 allotment 2.06 036.82 8 1.Providing of 55,320,54 -55,320, surplus reserves 2.06 542.06 2.Allotment to the -268,45 -268,450, owners (or 0,036.8 036.82 shareholders) 2 3.Other (IV)Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of 79 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V) Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at the 4,939,92 15,130,19 4,422,320 169,054,8 696,998 20,931,75 end of this term 8,983.00 1,736.27 .00 46.15 ,223.03 1,468.45 III.Brief introduction of the Company: Approved by Hebei Economic System Reform Commission with the Approval of Establishment of Dongxu Optoelectronic Technology Co., Ltd.(Hereinafter referred to as “The Company”or “Dongxu Optoelectronic”)(Ji Ti Gfai Wei Gu Zi(1992) No.5 Document) in 1992, Shijiazhuang Baoshi Electronic Glass Co., Ltd. is a joint stock limited company company jointly established by Shijiazhuang Kinescope General Factory (transformed into Shijiazhuang Baoshi Electronics Group Co., Ltd.later), China Electronic Import and export Corporaqtion and Zonghua Hebei Import and Export Company. At the Time of establishment, the Company had 25.68 million shares (the par value of each share is RMB 10) and total share capital of RMB 256.80 million. On July 17, 1993, the Company held a provisional shareholders' general meeting and decided to split the stock equity with par value of RMB 10 per share into stock equity with par value of RMB 1 per share. As a result, the total number of the Company's shares became 256.80 million and its total share capital became RMB 256.80 million. Approved by Securities Commission under State Council with the Approval of Issue of 100 Million Domestically Listed Foreign Investment Shares by Shijiazhuang Baoshi Electronic Glass Co., Ltd. (Zheng Wei Fa (1996) No. 15 Document) on June 11, 1996, the Company issued 100 million domestically listed foreign investment shares (B shares) (the par value of each share is RMB 1). Approved by China Securities Regulatory Commission with the Approval of the Application of Shijiazhuang Baoshi Electronic Glass Co., Ltd. to Publicly Issue Shares (Zheng Jian Fa Zi (1996) No. 174 Document) on August 30 of the same year, the Company publicly issued 26.20 million shares (the par value of each share is RMB 1). As of September 17, 1996, the total share capital of the Company increased to RMB 383 million. On July 17, 1993, the Company held a provisional shareholders' general meeting and decided to split the stock equity with par value of RMB 10 per share into stock equity with par value of RMB 1 per share. As a result, the total number of the Company's shares became 256.80 million and its total share capital became RMB 256.80 million. Approved by Securities Commission under State Council with the Approval of Issue of 100 Million Domestically Listed Foreign Investment Shares by Shijiazhuang Baoshi Electronic Glass Co., Ltd. (Zheng Wei Fa (1996) No. 15 Document) on June 11, 1996, the Company issued 100 million domestically listed foreign investment shares (B 80 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 shares) (the par value of each share is RMB 1). Approved by China Securities Regulatory Commission with the Approval of the Application of Shijiazhuang Baoshi Electronic Glass Co., Ltd. to Publicly Issue Shares (Zheng Jian Fa Zi (1996) No. 174 Document) on August 30 of the same year, the Company publicly issued 26.20 million shares (the par value of each share is RMB 1). As of September 17, 1996, the total share capital of the Company increased to RMB 383 million. The 6th Provisional shareholder meeting in 2013 approved the name change of Shijiazhuang Baoshi Electronic G lass Co., Ltd. to Dongxu Optoelectronic Technology Co., Ltd.. According to the resolution of annual shareholder meeting in 2013 and the provisions of amendments to articles of association approved on April 27, 2014, the company has transferred 20 shares for each 10 shares to all shareholders, and with total shares of 1806 million transferred on the basis of the general capital of 903 million on December 31, 2013. Thus, the registered capital of RMB1806 million applied to add by the company should be transferred into the share capital by the capital reserve with the reference date on May 27, 2014, and the registered capital is RMB2709 million after changed. As per the provisions of “Restricted Stock Incentive Plan of Dongxu Optoelectronic Technology Co., Ltd. (Draft)” and its summary proposal approved after the second temporary shareholders’ resolution in 2014, the company has implemented the stock option incentive to grant 41 people the restricted stocks of RMB3,080,000.00 with the price of RMB3.88 per share, which are all in cash subscription. Thus, the company shall increase the share capital of RMB3.08 million and the capital reserve of RMB 8,870,400.00, and the share capital is RMB2,712,080,000.00 after changed. Under the provisions of “Proposal on Repurchase of Part of Domestic Listed Foreign Shares (Share B)” approved after the second temporary shareholders’ resolution in 2014, the company has repurchased 49,999,999.00 B shares released outside, and the repurchased shares shall be written off and the registered capital is reduced correspondingly. Thus, the company shall decrease the share capital of RMB49,999,999.00 and the capital reserve of RMB218,024,376.60, and the share capital is RMB2,662,080,001.00 after changed. Referring to the resolutions determined on the 27th Meeting of the 7th Board of Directors of the company, the 31st Meeting of the 7th Board of Directors, the 1st General Meeting of Extraordinary Shareholders in 2015, the 38th Meeting of the 7th Board of Directors and the Regulatory Approval No. [2015] 2270 by China Securities Regulatory Commission: Replies on Approval of Private Issuing of Stocks by Dongxu Photoelectric Technology Co., Ltd., it is approved that the company issues new shares less than 1,186,943,620 privately. The planned number of privately issued stocks is less than (including) 1,186,943,620. The actual issuance number of the stock is 1,173,020,525, and the modified equity capital is 3,835,100,526.00 yuan. According to ZJXK [2016] NO. 1322 document On the Approval of Non-public Stock to Dongxu Photoelectric S cience&Technology Co. Ltd permitted by China Securities Regulatory Commission and also was resolved in the 7 th board of the forty-eight meeting and the first extraordinary shareholders' general meeting , it is approved that t he company issues new shares less than 1,104,928,457.00 privately. The planned number of privately issued stock s is less than (including) 1,104,928,457.00. The actual issuance number of the stock is 1,104,928,457.00, and the modified equity capital is 4,939,928,983.00 yuan. As of June 30, 2017, Registered capital :RMB 4,939,928,983.00, Legal representative: Li Zhaoting, Enterprise unified social credit code: 911301001043959836, Registered Address: No.9, Huanghe Road, Shijiazhuang High-tech Industrial Development Area, Shijiazhuang, Hebei Province. 81 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Dongxu Optoelectronic Parent Company is the Tunghsu Group,Uitimate controller is Li Zhaoting. In the reporting period, 16 subsidiaries and 29 sub-subsidiaries were included in the consolidation scope by the company, see details at Note 7 “Rights and Interests in Other Subjects ”. The consolidation scope of the company increased by 11 companies year on year at this reporting period, see details at Note 6“Change of Consolidation Scope” Financial statements and notes to the financial statements approved at the 20th meeting of the 8th Board of of Directors on August 10, 2017. Business scope: electronic vacuum glass devices and supporting electronic components, automotive parts production and sales and after-sales services; management of the enterprise's own products export business and the business of mechanical equipment, spare parts, raw materials imports business (except the goods and technology that the country limit or prohibit to import and export), flat panel display glass substrate industry, investment, construction and operation and related technology development, technology consulting, technology services, technology transfer. (Can not operate the laws, regulations and the State Council decided to ban or restrict, ; can operate after get approval from other departments). IV.Basis for the preparation of financial statements 1.Basis for the preparation The financial statements of the company are prepared based on the going-concern assumption and the actual transactions and items,,the Company prepared financial statements in accordance with the ASBE-Basic Standard and revised thereafter, Application Guidance of Accounting Standard for Business Enterprises, Interpretation of Accounting Standards for Business Enterprises and other regulations(hereinafter referred to as “the Accounting Standards for Business Enterprises”, “China Accounting Standards” or “CAS”),Rules for Preparation Convention of Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission. In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to relevant requirements. 2. Going-concern The company has the capacity to continually operate within 12 months at least since the end of report period, and hasn’t the major issues impacting on the sustainable operation ability. V. Principal Accounting Policies and Estimations Important prompt: Nil 82 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 1.Statement on compliance with accounting standards for business Enterprises The Company state: the financial statements prepared are in line with the requirements in enterprise accounting st andards in line with of system, and have truly and completely reflected of the financial status in June 30,2017 , operational results, cash flow, and other relevant information of January –June 2017. 2.Accounting year: The Group’s fiscal periods include fiscal years and fiscal periods shorter than a complete fiscal year..from January 1 to December 31 as one accounting year. 3. Operating Cycle The normal business cycle refers to the period from the assets used for processing after purchased by the company to the cash or cash equivalents achieved. 12 months are regarded as one operating cycle in the company, and which is as the division criterion for the liquidity of assets and liabilities. The parent company and the subsidiay- Shijiazhuang Colour Bulb Co., Ltd., which is engaged in manufacturing industry, with normal operating cycle that is one year;The Subsidiary-Wuhu Dongxu Optoelectronic Equipment Co., Ltd., Which is engaged in Manufacturing industry, with normal operating cycle that is more than one year; The subsidiarys-Wuhu Dongxu Optoelectronic Technology Co., Ltd., Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. , Zhenzhou Xufei Optoelectronic Technology Technology Co., Ltd, Jiangsu Jixing New Material Co., Ltd., Dongxu(Kunshan) Display Material Co., Ltd.and Wuhan Dongxu Optoelectronc Technology Co., Ltd., Which are engaged in Manufacturing industry, with normal operating cycle that is shorter than one year ; The Subsidiary-Sichuan Ruiyi Construction Engineering Co., Ltd. And Hebei Xubao Construction installation engineering Co., Ltd., which are engaged in Construction installation, with normal that is more than one year; The Subsidiary-Beijing Xufeng Real estate, which is engaged in real estate Development industry, with normal operating cycle that is more than one year; The Subsidiary-Beijing Xutan New Material Co., Ltd., which is engaged in Technology service industry, with normal operating cycle that is shorter than one year; The Subsidiary-Beijing Dongxu Huaqing Investment Co., Ltd., which is engaged in Investment Management Industry, with normal operating cycle that is shorter than one year; The Sub-Subsidiary,Jiangsu Dongxu Yitai Intelligent Equipment Co.,Ltd, is engaged in manufacturing industry but with uncertain operating cycle; The Sub-Subsidiary,Shijiazhuang Dongxu Optoelectronic Euqipment Technology Co., Ltd, which is engaged in Manufacturing industry, with normal operating cycle that is one year; The Sub-Subsidiary,Beijing Dongxu Investment Development Co., Ltd., which is engaged in Investment industry, with normal operating cycle that is one year; The sub-subsidiary, Wuhu Ruiyi Service Co.,Ltd, is engaged in labor dispatch, with normal operating cycle that is one year. 4.Standard currency for bookkeeping: The Company takes RMB as the standard currency for bookkeeping. 5. Accounting treatment methods of the merger of enterprises under the control of the same company and different companies Business combination refers to the transactions or items with one reporting entity formed by the combination of 83 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 two or more separate enterprises. The business combination shall be divided into the business combination under common control and the business combination under non-common control. (1) Business Combination under Common Control The business combination under common control refers to the business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. Of which, the combining party is that acquiring the control right to other combining enterprises at combining date, and the combining date means the date that the combining party actually acquires the control right of the combined party. The assets and liabilities acquired by the combining party are measured in accordance with the book value of the combined party at the combining date. For the balance between the book value of net assets acquired by the combining party and the book value of the combining valuable consideration (or the nominal amount of issued shares), the capital reserves (stock premium) shall be adjusted, or the retained earnings shall be adjusted when the capital reserves (stock premium) are insufficient. All the costs directly incurred for the business combination by the combining party shall be recorded into the current profits and losses when occurred. (2)Business Combination under Non-common Control The business combination under non-common control refers to the business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the combination. Of which, the acquirer is that obtaining the control right to other combining enterprises at acquisition date, and other combining enterprises refers to the acquiree. The acquisition date means the date that the acquirer actually obtains the control right of the acquiree. For the business combination under non-common control, the merger costs include the assets paid for obtaining the control right of acquiree by the acquirer, the liabilities occurred or borne and the fair value of equity securities issued, the intermediary fees for audit, legal services, evaluation and consultation when the business combination issued, and other management costs shall be recorded into the current profits and losses when occurred. The transaction costs of equity securities or debt securities issued for the merger consideration by the acquirer shall be included into the initially recognized amount of the equity securities or the debt securities. The contingent consideration involved shall be recorded into the merger cost as per the fair value at the acquisition date. Within 12 months after the acquisition date, the combining business reputation should be adjusted correspondingly if the contingent consideration is required to adjust because of new or further evidence for the existed situation on the acquisition date. The merger cost issued by the acquirer and the identifiable net assets acquired in the combination are measured as per the fair value on the acquisition date. The difference of the merger cost minus the fair value shares of identifiable net assets obtained by the acquiree during the merger on the acquisition date, is recognized as the business reputation. While the merger cost is less than the fair value shares of identifiable net assets obtained by the acquiree during the merger, all the measurement on the identifiable assets, the liabilities, the fair value of liabilities and the merger cost obtained by the acquiree should firstly be rechecked, and the difference shall be recorded into the current profits and costs if the merger cost is still less than the fair value shares of identifiable net assets obtained by the acquiree during the merger after rechecking. If the deductible temporary difference of acquiree obtained by the acquirer is not recognized due to the recognition condition of the deferred income tax assets unmet on the acquisition date. Within 12 months after the acquisition date, the relevant deferred income tax assets shall be recognized and the business reputation shall be reduced if the acquired new or further evidence shows that the relevant situation has already existed and the economic benefit gained by the acquiree from the deductible temporary difference is expected to achieve, and the differences are recognized as the current profits and losses if the business reputation is insufficient to offset. With the exception of the above, the deferred income tax assets related to the business combination are recorded into the current profits and losses. 84 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 For the business combination under non-common control realized step-by-step through multiple transactions, the multiple transactions shall be judged if belong to “the package deal” according to the “Notice on Issuance of Interpretation of Accounting Standards for Business Enterprises from Ministry of Finance” (Finance and Accounting [2012] No.19) and the judgment standards on “the package deal” in Article 51 of “Accounting Standards for Business Enterprises No.33 – Consolidated Financial Statement” (please see 5 (2) in Notes 3). For the package deal, please refer to above description of this section and Notes 3, 12 “Long-term Equity Investment” to conduction the accounting treatment. For the non-package deal, the relevant accounting treatment should be respectively conducted for the individual financial statement and the consolidated financial statements: For the individual financial statements, the sum of the book value of equity investment from the purchased party held before the purchase date and the new investment cost at the purchase date shall be as the initial investment cost of the investment. For the other comprehensive incomes involved in the equity of the acquiree held before the acquisition date, the investment and the relevant other comprehensive incomes shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquiree (Namely, the rest is transferred into the current investment incomes with the exception of the corresponding shares of changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the acquiree as per the equity method). In the consolidated financial statements, the equity of the acquiree held before the acquisition date shall be measured again as per the fair value of the equity on the acquisition date, and the difference between the fair value and the book value is recorded into the current investment income. For the other comprehensive incomes involved in the equity of the acquire held before the acquisition date, the relevant other comprehensive incomes shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquire (Namely, the rest is transferred into the current investment incomes on the acquisition date, with the exception of the corresponding shares of changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the acquire as per the equity method). 6. Compiling method of consolidated accounting statements (1) Compiling method of consolidated accounting statements The company starts to include the actual control right to the net assets and the production and management decisions of the subsidiaries into the combination scope since the date of the actual right acquired, and will stop covering into the combination scope on the date of the actual right lost. For the disposed subsidiaries, the business performance and the cash flow before the disposal date have been properly covered in the consolidated profit statement and the consolidated cash flow statement. For the subsidiaries disposed in the current period, the opening balance of the consolidated balance sheet shall not be adjusted. Meanwhile, for the subsidiaries increased through the business combination under non-common control, the business performance and the cash flow after the acquisition date have been properly included in the consolidated profit statement and the consolidated cash flow statement, and the opening balance and the comparison balance of the consolidated financial statement shall not be adjusted. For the subsidiaries increased through the business combination under common control, the business performance and the cash flow from the beginning of current combination period to the combination date have been properly included in the consolidated profit statement and the consolidated cash flow statement, and the comparison balance of the consolidated financial statement shall be adjusted simultaneously. When the preparation of the consolidated financial statement, the necessary adjustment shall be made according to the accounting policy of the company and the financial statement of the subsidiaries during the fiscal period if the accounting policy or the fiscal period adopted by the subsidiaries and the company is discrepant. For the subsidiaries acquired through the business combination under non-common control, the financial statement shall be adjusted on the basis of the fair value of the identifiable net assets on the acquisition date. 85 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 All the major balances, transactions and the unrealized profits of the company shall be offset in the preparation of the consolidated financial statement. Those not belong to the company in the shareholders’ equity and the current net profit or loss of the subsidiaries shall be respectively as the minority equity and the minority interest income and individually listed under the shareholders’ equity and the net profit of the consolidated financial statement. The minority equity portion from the net profit or loss in current period shall be as “minority interest income” and listed under the net profit in the consolidated financial statement. Moreover, the minority equity is still offset even if the losses of the subsidiaries undertaken by the minority shareholders are beyond the portion of the shareholders’ equity shared by the minority shareholders of the company at the beginning of period. When the control on the original subsidiaries lost due to the disposal of partial equity investment or other reasons, the remaining equity should be measured again according to the fair value on the control lost date. The difference of the consideration acquired by the disposal of equity and the fair value of the surplus equity minus the net assets portion of the original subsidiaries calculated from the purchase date as per the original stock proportion shall be recorded into the current investment income after the control lost. Other comprehensive returns relevant to the original subsidiary shares investment shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquiree when the control lost (Namely, all the rest are transferred into the current investment incomes, with the exception of the changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the original subsidiaries). Thereafter, the subsequent measurement shall be made for the rest equity according to the relevant provisions of “Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investment” or “Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”. For the details, please see Notes 3, 13 “Long-term Equity Investment” or Notes 3, 10 “Financial Instruments”. For the equity investment in the subsidiary through the step-by-step disposal of multiple transactions till the control right lost, the company should respectively dispose all the transactions if belong to the package deal. As long as the terms, conditions and economic influence on all the transactions of the disposal of the equity investment in the subsidiary meet one status below, it usually shows that the multiple transactions matters should be conducted the accounting treatment as the package deal: ① these transactions are made simultaneously or under the consideration of the influence each other. ② these transactions shall be as the whole to achieve one complete business results. ③ one transaction occurs depending on the appearance of other one transaction at least. ④ one transaction is economic under the consideration with other transactions even if it is not economic when individually considerate. For the non-package deal, each transaction shall be respectively conducted the accounting treatment according to the applicable principles of “Partial Disposal of Long-term Equity Investment in Subsidiary without Control Lost” (please refer to 13, (2) ④ in Notes 3,) and “The Control on Original Subsidiary Lost due to Disposal of Part of Equity Investment or Other Reasons” (details please see forepart). For the package deal from the transactions after the disposal of equity investment in the subsidiary till the control right lost, the transactions shall be as one transaction of the disposal of subsidiary and the control lost for the accounting treatment. Therefore, every balance between the net assets proportion of the subsidiary shared relative to the disposal price and the disposal investment before the control right lost, shall be recognized as other comprehensive incomes in the consolidated financial treatment and transferred into the current profits and losses when the control lost. 7.Joint venture arrangements classification and Co-operation accounting treatment 86 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Joint enterprise arrangement is two or more parties jointly control the enterprise. The company enjoys rights and bears obligations based on joint enterprise arrangement. Joint enterprise arrangement is composed of joint operation and joint enterprises. Joint operation means the company has the right to arrange related assets and related liabilities. Joint enterprises means the company only has the right to arrange the net asset. The company adopts equity method to calculate investment to joint enterprises by referring to accounting policies stated in "Long-term Stock Ownership for Equity Method Calculation" in Annex V 14 (2). As one party of joint operation, the company confirms assets and liabilities only held by itself and confirms joint assets and liabilities as proportion of the company’s shares; confirm incomes from sales and production in the way of joint operation as proportion of the company’s shares; confirm the company’s own expenses and all expenses in the way of joint operation as proportion. As a party of joint operation, the company funds or sells assets (not used for operation, the same below) of joint operation or purchases assets from joint operation. Before the assets are sold to a third party, the company only confirms the loss and benefit in the trade which belong to other parties in the joint operation. In case the assets is in conformity to the asset impairment loss regulated in Asset Impairment --No.8 of Accounting Criteria for Enterprises, the company confirms all losses in full amount for the company funding or selling assets of joint operation. The company confirms the loss as proportion of shares for the company purchasing assets from joint operation. 8. Recognition Standard of Cash & Cash Equivalents The cash stated in cash flow statement refers to cash in hand and bank deposits usable for payment at any time. Cash equivalent refers to the investments with holding period of less than three months that are readily convertible to known amount of cash and subject to insignificant risk of changes in value. 9. Accounting and Translation Method of Foreign Currency Transaction (1) Translation Method of Foreign Currency Transaction The shot exchange rate (usually refers to the middle rate at the date of currency exchange published by the People’s Bank of China, hereinafter inclusive) on the transaction date is adopted to convert to the amount of functional currency when the foreign currency transaction issued in the company is initially recognized. However, the foreign currency exchanges or the transactions relative to the foreign currency exchanges occurred in the company shall be translated into the amount of functional currency as per the actually adopted exchange rate. (2) Translation Method for Monetary Items of Foreign Currency and Non-monetary Items of Foreign Currency On the balance sheet date, the monetary items of foreign currency are translated as per the shot exchange rate on the balance sheet date, and the foreign exchange conversion gap arising from which shall be recorded into the profits and losses of the current period, except for ① the balance of exchange arising from special foreign currency borrowings for the purchase and construction of qualified assets subject to the principle of borrowing costs. ② the exchange balance generated from other book balances in the foreign currency monetary items available for sale with the exception of the post-amortization costs shall be recorded into other comprehensive incomes. The non-monetary items of foreign currency measured at the historical cost shall still be measured by the amount of functional currency translated at the spot exchange rate on the transaction date. The non-monetary items of foreign currency measured at the fair value shall be translated at the spot exchange rate on the fair value 87 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 recognized date, and the gap of the translated amount of functional currency and the original the amount of functional currency shall be as the fair value variation (change in exchange rate included) to make treatment and recorded into the current profits and losses or recognized as other comprehensive incomes. (1) Translation Method of Foreign Currency Financial Statement For the overseas business operation involved in the preparation of the consolidated financial statement, the exchange balance arising from the change in exchange rate for the foreign currency monetary items of the net investment in the overseas business, shall be as “translation reserve of foreign currency statement” and recognized as other comprehensive incomes. The profits and losses of the current disposal period shall be recorded when disposal of the overseas business operations. The foreign currency financial statement of the overseas business operation shall be translated as RMB statement as per the following methods: the assets and liabilities in the balance sheet shall be translated at a spot exchange rate on the balance sheet date. For the shareholders’ equity items, other items shall be translated at a spot exchange rate when occurring, except for the “undistributed profit” items. The earnings and expenses items in the profit statement shall be translated at a spot exchange rate on the transaction date. Moreover, the undistributed profits at the beginning of this year are the profits translated at the end of last year which shall be distributed and listed all the items measurement as per the translated profits. The difference between the translated assets items and the sum of the liabilities items and the shareholders’ equity items shall be as the translation reserve of foreign currency statement and recognized as other comprehensive incomes. When disposing the overseas business operation and losing the control right, the translation reserves of foreign currency statement related to the overseas business operation which listed in the shareholders’ equity items in the balance sheet, are all recorded into the current disposal profits and losses or shifted as per the disposal proportion of the overseas business operation. The cash flows of foreign currency and overseas subsidiary shall be translated at the spot exchange rate on the cash flow date. The influence amount of the change in exchange rate on the cash shall be individually listed and reported as the adjustment items in the cash flow statement. The amount at the beginning of this year and the actual amount of last year shall be listed according to the translated amount of the financial statement. If the control on the overseas business operation lost due to the disposal of partial equity investment or other reasons when disposing all the owners’ equity of the overseas business operation of the company, the translation reserves of foreign currency statement belong to the owners’ equity of the parent company related to the overseas business operation which listed in the shareholders’ equity items in the balance sheet, are all recorded into the current disposal profits and losses. If the held equity proportion of the overseas business operation reduced due to the disposal of partial equity investment or other reasons, but the control on the overseas business operation not lost, the translation reserves of foreign currency statement related to the partial disposal of the overseas business operation shall be belong to the minority equity and not recorded into the current profits and losses. When disposing partial equity of the joint ventures or the cooperative enterprises of the overseas business operations, the translation reserves of foreign currency statement related to the overseas business operations shall be recorded into the current disposal profits and losses as per the disposal proportion of the overseas business operations. 10.Financial instruments One financial asset or financial liability shall be recognized when the company becomes the party in the financial instrument contract. The financial assets and the financial liabilities are measured at the fair value in the initial recognition. For the financial assets and liabilities that measured at the fair values and the variation included in the current profits and losses, the relative transaction expenses shall be directly recorded into the profits and losses. 88 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 For the financial assets and liabilities of other categories, the expenses related to transactions are recognized as initial amount. (1) Determination Method for the Fair Value of Financial Assets and Liabilities The fair value refers to the price that receivable for the sale of one asset or paid for the transfer of one liability in the orderly transactions occurring on the measurement date for the market participants. If there exists the active market for the financial instrument, the company shall recognize the fair value according to the quotation in the active market which refers to the price that easy to periodically acquire from Exchanges, Commission Brokers, Guilds and Pricing Services, and stands for the price of the market transactions actually occurred in the fair dealing. For there isn’t the active market for the financial instrument, the company shall recognize the fair value with adopting the valuation technique which includes the price used in the market transactions recently conducted by the parities with voluntary trade and under the consideration and acquainting of the situation, the current fair value in reference to other same financial instruments, the discount cash flow method and the option pricing model. (2) Classification, Recognition and Measurement of Financial Assets The accounting recognition and de-recognition shall be conducted at the transaction date in the conventional way for the financial assets dealing. The financial assets are divided into the financial assets, the held-to-maturity investment, the loans, the receivables and the sellable financial assets which are measured at their fair values and of which the variation are recorded into the current profits and losses when recognized initially. ① The financial assets measured at the fair value and of which the variation recorded into the current profits and losses Including the tradable financial assets and the financial assets designated at their fair values and of which the variation is recorded into the current profits and losses. The tradable financial assets refer to the financial assets meeting any of the following requirements: A. the purpose to acquire the financial assets is for selling in the short-term. B. forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which there are objective evidences proving that the company may manage the combination by way of short-term profit making in the near feature. C. being a derivative instrument, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments belong to financial guarantee contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quotation in the active market and whose fair value cannot be reliably measured, and which shall be settled by the delivery of the equity instruments. The financial assets meeting any of the following requirements can be designated when they are initially recognized as financial assets measured at their fair values and of which the variation is recorded into the current profits and losses: A. the designation is able to eliminate or obviously reduce the discrepancies in the recognition or measurement of relevant gains or losses arisen from the different basis of measurement of the financial assets. B. the official written documents on risk management or investment strategies of the company have recorded that the combination of the financial assets, or the combination of the financial assets and liabilities will be managed and evaluated on the basis of the fair value and reported to the key management personnel. The financial assets measured at their fair values and of which the variation is recorded into the current profits and losses shall be made the subsequent measurement as per the fair value, and the gains or losses formed from the variation of the fair value as well as the dividend and interest incomes related to the financial assets shall be recorded into the current profits and losses. (2)The investments of held-to-maturity The held-to-maturity investment refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and the company holds for a definite purpose or is able to hold until its 89 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 maturity. The held-to-maturity investments shall be made the subsequent measurement on the basis of the actual interest rate and the post-amortization costs, and the gains or losses arising from de-recognition, impairment or amortization shall recorded into the current profits and losses. The actual interest rate method is the way to calculate the post-amortization costs and the interest incomes or expenditure at each period as per the actual interest rate of the financial assets or liabilities (a group of financial assets or liabilities included). The actual interest rate means that the future cash flow of the financial assets or liabilities within the predicted term of existence or within a shorter applicable term shall be discounted as the rate used for the current book value of the financial assets or liabilities. When calculating the actual interest rate, the company should consider all the contract terms of the financial assets or liabilities to estimate the future cash flow (without regard to the future credit loss), and take account of all the charges, transaction expenses and discounts or premium belong to the actual interest rate and paid or received between all the parties of the financial assets or liabilities contracts. (3)Loans and Receivables The loans and the receivables refer to a non-derivative financial asset without the quotation, a fixed or determinable amount of repo price in the active market. The financial assets divided into loans and receivables of the company shall include the bill receivable, the accounts receivable, the interest receivable, the dividends receivable and other receivables The loans and the receivables shall be made the subsequent measurement on the basis of the actual interest rate and the post-amortization costs, and the gains or losses arising from de-recognition, impairment or amortization shall recorded into the current profits and losses. ④ The financial assets available for sale The sellable financial assets refer to the non-derivative financial assets which are designated as sellable when they are initially recognized as well as the financial assets other than the financial assets, the loans, the receivables and the held-to-maturity investments measured at the fair value and of which the variation recorded into the current profits and losses. The costs of the sellable liability instrument investments at the end of period shall be recognized as per the post-amortization cost method, which is the amount that the accumulated amortization amount, formed after the amortization for the initially recognized amount with the compensated capital deducted plus or minus the difference between the initially recognized amount and the amount at the maturity date with use of the actual interest rate method, with deduction of the impairment losses occurred. The costs of the sellable equity instrument investments at the end of period are the initially acquired costs. The sellable financial assets shall be conducted the subsequent measurement at the fair value, the balance The gains or losses arising from the change in the fair value, except that the impairment losses and the exchange balance related to the monetary financial assets of foreign currency and the post-amortization costs are recorded into the current profits and losses, shall be recognized as other comprehensive incomes, transferred out and recorded into the current profits and losses when the de-recognition of the financial assets. However, The equity instrument investment which has no quotation in the active market and whose fair value cannot be reliably measured, and the derivative financial assets which are connected with the equity instrument and required to settle by the delivery of the equity instrument shall be conducted the subsequent measurement by costs. The interests acquired from the sellable financial assets during the holding period and the cash dividends declared to deliver by the investee shall be recognized as the investment returns. ② The financial assets impairment available for sale The decline for the fair value of the sellable equity instrument investments can be judged as serious or 90 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 non-transient depreciation by the relevant comprehensive factors, which shows that the sellable equity instrument investments have the impairment. Of which, the “serious depreciation” refers to the decline range of the fair value accumulatively over 20%, and the “non-transient depreciation” is the decline period of the fair value continuously beyond 12 months. When the sellable financial assets impair, the accumulated losses formed due to the depreciation of the fair value for other comprehensive incomes originally recorded shall be transferred out and recognized as the current profits and losses, and the transferred accumulative losses are the balances of the costs of the assets initially acquired with deduction of the withdrawn capitals, the amortized amount, the current fair value and the impairment losses initially recorded into profits and losses. After the impairment losses recognized and if there are objective evidences proving that the financial assets values have resumed after the period and have objectively involved in the matters occurred after the losses recognized, the impairment losses originally recognized shall be switched back, the reverse of the impairment losses for the sellable equity instrument investments shall be recognized as other comprehensive incomes and the reverse of the impairment losses for the sellable liability instrument shall be recorded into the current profits and losses. The equity instrument investment which has no quotation in the active market and whose fair value cannot be reliably measured, or the impairment losses of the derivative financial assets which are connected with the equity instrument and required to settle by the delivery of the equity instrument shall not be reversed. (3) Recognition criteria and measurement methods of transferred financial assert For financial asset that satisfies the following criteria, it shall stop recognizing the financial asset: 1) the contract rights to collect the cash flow of the financial assert has been terminated; 2) the financial assert has been transferred with nearly all of the risks and rewards related to the ownership of the financial assert transferred to transferee; 3) the financial assert has been transferred with the control to such financial asserts waived, though this enterprise has not transferred or retained nearly all the risks and rewards related to the ownership of the financial assert. If this enterprise has neither transferred nor retained almost all the risks and rewards on the asset ownership, it shall, within the extent of its continuous involvement in the transferred financial asset and recognize the relevant liability. The term "continuous involvement in the transferred financial asset" shall refer to the risk level that this enterprise faces resulting from the change of the value of the financial asset. If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between the amounts of the book value of the transferred financial asset and the sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in the owner's equities of other comprehensive income, shall be recorded in the profits and losses of the current period. If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book value of the transferred financial asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not been stopped, be apportioned according to their respective relative fair value, and the difference between the amounts of the following 2 items shall be included into the profits and losses of the current period: 1)sum of consideration the portion whose recognition has been stopped and the accumulative amount changes in fair value originally recorded owner’s equities which is corresponding to stopped, the book value of the portion whose recognition has been stopped; 2) the book value of the portion whose recognition has been stopped. For the financial asset sold with recourse attached, it is to transfer the financial asset held by endorsement, prior to confirmation that nearly all of the risks and rewards related to the ownership of the financial asset has been transferred to transferee. Where this enterprise has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. If it retained 91 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset. Where this enterprise does not transfer or retain nearly all of the risks and rewards related to the ownership of a financial asset, it shall deal with it according to principles stipulated above. (4)Classification and Measurement of Financial Liability Financial liabilities shall be classified into the two categories when they are initially recognized: the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses; other financial liabilities. For the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses, the related transaction cost shall be included directly in the current profits and losses; for other financial liabilities, the related transaction cost included in the initially recognized amount. 1) The condition for classifying the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses as transactional financial liabilities and the financial liabilities which are measured at their fair values at initial recognition and of which the variation is included in the current profits and losses is the same as these for classifying it as the transaction financial asset and the financial asset which are measured at their fair values and of which the variation is included in the current profits and losses. This enterprise shall make subsequent measurement on its financial liabilities according to their fair values. The profits and losses, arising from the change in the fair value of the financial asset, and the dividends and interests expenses associated with the financial asset, shall be recorded into the profits and losses of the current period. 2) Other Financial Liability And are not quoted in an active market, for which there is no quoted price in the active market and whose fair value cannot be reliably measured, this enterprise shall make subsequent measurement according to its cost. For other financial liabilities, this enterprise shall make subsequent measurement on the basis of the post-amortization costs by adopting the actual interest rate method, with profits or losses resulting from stopping recognition or amortization recorded into the profits and losses of the current period. (5) Termination from Recognition of Financial Liability Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly. Where this enterprise (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it shall terminate the recognition of the existing financial liability, and shall at the same time recognize the new financial liability. Where the recognition of a financial liability is totally or partially terminated, this enterprise shall include into the profits and losses of the current period the gap between the carrying amount which has been terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed). (6) Offset of Financial Asset and Financial Liability Where this enterprise has the legal right to offset its recognized financial asset and financial liability, and it is able to perform this legal right, and if it plans to settle with the net amount of and cash the financial asset and liquidate the financial liability, it shall itemize and show in the balance sheet the amounts after the financial asset and the financial liability offset each other. For any other circumstances, the financial asset and financial liability shall not offset each other, and shall be itemized and shown separately in the balance sheet (7) Equity Instruments 92 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 The "equity instruments" refers to the contracts which can prove that this enterprise holds the surplus equities of the assets after the deduction of all the debts. This enterprise deal the equity instruments issued (including refinancing), repurchased, sold or cancelled as changes of equity. It shall not recognize the changes of fair value of equity instruments. The transaction expenses associated with equity transactions shall be deducted from the equity. This enterprise shall deduct the shareholders' equity for various kinds of distributions (not including stock dividends) to the holders of equity instruments. It shall not recognize the amount of changes in the fair value of equity instruments. 11.Account receivable (1)Provision for bad debts of account receivable that are individually significant The judgment basis for significant single-item amount or The accounts receivable with single-item amount of RMB 5 standard for significant amount million and above Impairment test shall be separately conducted. If the test proves the occurrence of impairment, impairment loss shall be determined and provision for bad debts shall be made according to the difference between the present value of its future cash flow and its book value. For the accounts receivable whose The method of separate provision for bad debts for the accounts impairment is not proved by separate test, such accounts receivable with significant single-item amount receivable, together with those with insignificant single-item amount, are divided into some groups based on similar characteristics of credit risks. For these groups of accounts receivable, provision for bad debts shall be made according to the regulation mentioned in "(2) provision for bad debts shall be made for accounts receivable on group basis". (2)The accounts receivable of bad debt provisions made by credit risk Group Name Withdrawing Method Aging Group Aging Analysis Method Other Group Other method In Group ,Accounts on age basis in the portfolio: √ Applicable □ Not applicable Aging Rate for receivables(%) Rate for other receivables(%) During the credit period 0.00% 0.00% The credit period within 1 year 5.00% 5.00% 1-2 years 10.00% 10.00% 2-3 years 30.00% 30.00% 3-4 years 50.00% 50.00% 93 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 4-5 years 70.00% 70.00% Over 5 years 100.00% 100.00% In Group, adopting balance percentage method for bad debt provision: □ Applicable √ Not applicable In Group ,adopting other method for bad debt provision: √ Applicable □ Not applicable Name Account receivable proportion Other account receivable proportion Related party group 0.00% 0.00% (3) Accounts receivable that are individually insignificant but with bad debt provision provided on an individual basis The accounts receivable with single-item amount of less than Reason for separate provision for bad debts RMB 5 million whose risk characteristics can’t be reflected by provision for bad debts on basis of group. Provision for bad debts is made according to the difference Method of provision for bad debts between the present value of its future cash flow and its book value. 12. Inventories Whether the company needs to comply with the disclosure requirements of the particular industry No (1)Classification of Inventories This enterprise's inventories is classified as raw materials, works in process, finished products, circulation materials, low-value consumption goods, packing materials, supplies purchasing, engineering construction, development cost,etc. (2) Obtaining and Measurement of Inventories The perpetual inventory systems are adopted for this enterprise's inventories. The inventories shall be measured by their actual cost when they are obtained. Raw materials, works in process, finished products, etc. shall be measured with the weighted average method when they are being sent out. Low-value consumption goods shall be written off by one-off write-off method when they are withdrawn for use. Circulation packaging materials shall be recorded into cost according to the predicted usage times. (3) Methods to make provision for loss on decline in value of inventories If the cost of inventories is higher than the net realizable value at the end of each period, this enterprise shall make the provision for the loss on decline in value of inventories. This enterprise makes provision for the loss on decline in value of inventories on the ground of each item of inventories. If the factors causing any write-down of the inventories have disappeared, the amount of write-down shall be resumed and be reversed from the provision for the loss on decline in value of inventories that has been made. (4) Method for confirming the net realizable value of inventories The net realizable value of inventories refers to the amount of the estimated selling price, less the estimated costs of completion, the estimated selling costs and related tax payments. 94 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 (5) Cost of Development Cost of development includes completed development product, development product under construction, leasing development product and simulated development land. Completed development product means the estate which has been built and up for sale; Development product under construction means the estate which hasn’t been built and in the purpose of sale; Leasing development product means the estate which is temporarily leased under business mode for which the company’s intents to sell, which the leasing development product amortizes by stages within the estimated available years; Simulated development land means the land which has been purchased and determined to be developed as Sales or Leasing Estate. 13. Long-term Equity Investment The long-term equity investment in this section refers to the long-term equity investment of this enterprise that is able to control to or does joint control with or significant influences over the invested enterprise. For the long-term equity investment of this enterprise that is not able to control to or does not do joint control with or have significant influences over the invested enterprise, this enterprise shall record it as available-for-sale financial asset or the financial asset measured by its fair value with its changes in fair value recorded into the profits or losses of current period as the changes. For details of its accounting policy, please refer to Note III.9 "Financing Instruments" The term "joint control" refers to the joint control over an arrangement of this enterprise in accordance with the contracts and agreements, and decisions over relevant activity of such arrangement shall not be unless the assent on sharing the control power. The term "significant influences" refers to this enterprise's power to participate in making decisions on the financial and operating policies of the invested enterprise, but not to control or do joint control together with other parties over the formulation of these policies. (1)Ascertaining of Investment Cost For the merger of enterprises under the same control, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, no-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reverse. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of book value of the owner’s equity of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. For the merger of enterprises under the same control through gaining the shares of the combined enterprise by multiple steps of deals, it shall deal with it in the following two ways depending on that if it belongs to "a package deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control power; if it does not belong to "a package deal", it shall, on the date of merger, regard the share of book value of the owner’s equity of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity investment held by this enterprise before the date of merger shall be accounted for by equity method, or shall be recorded as the other comprehensive income recognized as available-for-sale financial asset and not accounted for. 95 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 For the merger of enterprises not under the same control, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The merger costs include the assets paid, liabilities occurred or borne and sum of the fair value of the equity securities issued by the purchaser. For the merger of enterprises not under the same control through gaining the shares of the combined enterprise by multiple steps of deals, it shall deal with it in the following two ways depending on that if it belongs to "a package deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control power; if it does not belong to "a package deal", it shall, on the date of merger, regard the sum of book value of the owner’s original equity of the merged enterprise and the newly increased investment cost as the initial cost of the long-term equity investment. For the shares originally held by this enterprise accounted for by weighted equity method, the relevant other comprehensive income shall not be accounted for temporarily. For the equity investment accounted for as available-for-sale financial asset, the difference of its fair value and its face value and the accumulated changes in its fair value originally recorded as other comprehensive income shall be switched to the profits or losses of the current period. The audit cost, law service cost, evaluation and consultation fees and agent commissions as well as other related administration costs occurred and borne by the merging or purchasing enterprise for the purpose of merger, shall be recorded into the profits or losses of current period at the time when the costs occurred. Other equity investments except the long-term equity investment formed by merger of enterprises shall be initially ascertained by their costs which, depending on the different ways in acquiring the long-term equity investments, shall be recognized separately as cash purchasing prices actually paid by this enterprise, fair value of the equity securities issued by this enterprise, agreed value of the investment contracts or agreements, fair value or original book value of the assets obtained by exchange of no-monetary assets, the fair value of the long-term equity investment itself, etc. The relevant expenses, tax payments as well as other necessary expenses directly associated with obtaining the long-term equity investment shall be recorded into the investment costs as well. If this enterprise is able to do joint control or significant influence, which does not constitute control, over the invested entity as a result of additional investment, the long-term equity investment cost shall be the sum of the fair value of the equity investment ascertained in accordance with the Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instrument and the cost of the increased investment. (2) Subsequent Measurement and Recognition Method A long-term equity investment of this enterprise that does joint control (not including joint venture) or significant influences over the invested entity shall be measured by employing the equity method. Besides, the cost method is employed in this enterprise's financial reports to measure the long-term equity investment that could form control over the invested entity. (1)Long-term equity investment measured by employing the cost method The price of a long-term equity investment measured by employing the cost method shall be included at its initial investment cost. If there are additional investments, the cost of the long-term equity investment shall be adjusted. Except the prices actually paid when obtaining the investment or cash dividends or profits being approved in the consideration but not yet issued, the investment income of the current period shall be recognized in accordance with the cash dividends or profits being approved by the invested entity. (2)Long-term equity investment measured by employing the equity method If the initial cost of a long-term equity investment is more than the investing enterprise's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the investing enterprise's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of long-term equity investment shall be adjusted simultaneously. 96 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 When employing the equity method, this enterprise shall, in accordance with the attributable share of the net profits or losses of the invested entity, recognize the investment profits or losses and adjust the book value of the long-term equity investment. This enterprise shall, in the light of the profits or cash dividends declared to distribute by the invested entity, calculate the proportion it shall obtain, and shall reduce the book value of the long-term equity investment correspondingly. Where any change is made to the owner's equity other than the net profits and losses of the invested entity, the book value of the long-term equity investment shall be adjusted and included in the capital reserves. This enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by the invested entity are different from those adopted by this enterprise, an adjustment shall be made to the financial statements of the invested entity in accordance with the accounting policies and accounting periods of this enterprise and recognize the investment profits or losses and other comprehensive incomes. For the transactions between this enterprise and its joint ventures and associated entities, where the assets invested or sold do not constitute a business, the unrealized internal transaction profits or losses shall be calculated in accordance with proportion shared, with the proportion shared by this enterprise offset and recognize the investment profits or losses based thereof. However, if losses occurred in the internal transaction between the invested entities is the impairment loss of transferred assets, they shall not be offset. When the assets invested by this enterprise to its joint ventures or associated entities constitute a business, and the investing party obtains long-term equity but without control power, the fair value of the invested business shall be recognized as the initial investment cost of the additional long-term equity investment. The total difference between the original investment cost and the book face of the invested business shall be recorded into the profits or losses of the current period. If the assets purchased from the joint ventures or associated entities constitute a business, this enterprise shall account for the business in accordance with this enterprise Accounting Standard No. 20 - Business Combinations, with the total profits or losses associated with the transaction recognized. The Company bears the net losses of its invested business to the limit of the book value of its long-term equity investment and other long-term equity that in real terms constitutes investment on the business. For additional loss of its invested business, if the Company is obligated to undertake, it shall be recognized as estimated liabilities accordingly and recorded in current investment losses. If the invested business earns profits afterwards, the Company shall reinstate and recognize its share of gains after compensating its unrecognized share of losses. ③Purchase of minority interest While compiling consolidated financial statements, the Company adjusts its capital reserve in terms of the difference between the increase of long-term equity investments due to purchase of minority interest and its share of the subsidiaries’ net assets since the purchase (or combination) date or dates. If its capital reserve is not sufficient to write down the difference, then the Company adjusts its retained income. ④Disposal of long-term equity investments In consolidated financial statements, the Company records in shareholders’ equity the difference between partial disposals of its long-term equity investments in its subsidiaries and its share of the subsidiaries’ net assets if it does not lose control of the subsidiaries; and if such partial disposals result in loss of its control of the subsidiaries, the difference shall be treated in accordance with the accounting policies related and specified in “Compiling Principles for Consolidated Financial Statements”, Note III.6.(2). For disposals of long-term equity investments under other circumstances, the difference between the book value and the actual received consideration is recorded in current profit and loss. For the long-term equity investments calculated by equity method, the same method applies to the remaining equity after disposal. Meanwhile, the other comprehensive gains originally recorded in shareholders’ equity is treated pro rata by the same method how the invested businesses handle the accounts while directly disposing the 97 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 related assets or liabilities. The investor recognizes the ownership interest due to equity changes except net profit and loss, other comprehensive gains and profit distribution, and carries it over pro rata to current profit and loss. For long-term equity investments calculated by costs method, the same method applies to the remaining equity after disposal. Other comprehensive gains calculated and recognized by equity method or recognition and measurement principles for financial instruments before the Company obtains control of the invested businesses are treated on the same basis that the invested businesses directly dispose the related assets or liabilities, and it will be carried over pro rata to current profit and loss; and among the invested businesses’ net assets that are calculated and recognized by equity method are all other equity changes than net profit and loss, other comprehensive gains and profit distribution carried over pro rata to current profit and loss. For disposals of long-term investment equity resulting in loss of control over the invested businesses, when compiling individual financial statements, the Company changes to adopt equity method to calculate the remaining equity that is still sufficient to exert joint control or significant influence, and to make adjustments as since it was acquired; and if the remaining equity is not sufficient, it will be handled in accordance with the relevant recognition and measurement principles for financial instruments and the difference between its fair value and book value will be recorded in current profit and loss since the Company loses control of the invested businesses. For other comprehensive gains recognized by equity method or recognition and measurement principles for financial instruments before the Company obtains control over the invested businesses, the Company adopts the same basis to handle the accounts as the invested businesses directly dispose the related assets or liabilities, and among the invested businesses’ net assets that are calculated and recognized by equity method are all other equity changes than net profit and loss, other comprehensive gains and profit distribution carried over pro rata to current profit and loss. For the remaining equity calculated by equity method, other comprehensive gains and other ownership interests will be carried over pro rata while for those treated in accordance with the recognition and measurement principles for financial instruments, other comprehensive gains and other ownership interests will be carrier over entirely. Under the circumstances that the Company loses joint control over or has no significant influence on the invested businesses due to partial equity disposal, the remaining equity changes to be calculated in accordance with the recognition and measurement principles for financial instruments, and the difference between its fare value on the date that the Company loses the joint control and significant influence and the book value is recorded in current profit and loss. For other comprehensive gains recognized due to calculation of the original equity investments by equity method, the Company adopts the equity method no longer but the same basis to handle the accounts as the invested businesses directly dispose the related assets or liabilities while carrying over to current profit and loss all the ownership interest recognized due to other equity changes than net profit and loss, other comprehensive gains and profit distribution. If the Company gradually loses control of a subsidiary through multiple transactions, which is a package deal as a whole, then all these transactions will be treated as control losing equity disposal, and before loss of control, the difference between each transaction consideration and the book value of the corresponding long-term equity investment is recognized as other comprehensive gains and in the end, carried over to current profit and loss upon loss of control. 14. Investment real estate The measurement mode of investment property The measurement by the cost method Depreciation or amortization method Investment real estate refers to the properties held for the purpose of generating rent and/or capital appreciation. 98 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 The company’s investment real estate includes the land use right rented and the constructions leased. The Company makes initial measurement at the costs that the properties is acquired and records as part of the property costs the subsequent expenses that could bring economic benefit inflows and be measured reliably while other subsequent expenses as part of current profit and loss. Such properties are depreciated or amortized in accordance with the relevant regulations for fixed assets or intangible assets. 15. Fixed assets (1) Recognition criteria of fixed assets1 Fixed assets refer to tangible assets that are held for production, services, leases or operations and the useful life of which are over one accounting year. Fixed assets are recognized if it produces economic benefit inflows and its costs can be measured reliably. The Company makes initial measurements on fixed assets at the costs that they are acquired. (2)Depreciation method Estimated useful Estimated residual value Type Detail Depreciation rate(%) rate Life Over the period of title (the period specified on the real estate title House and Building Straight-line method certificate or land use 5% 3.17% right certificate) or 30 years in case of no period of title Machinery equipment- Straight-line method 5 5% 19% Kiln Machinery equipment- Straight-line method 3 95.5% 1.5% Platinum passage Machinery equipment- Glass flat-panel and other Straight-line method 15 5% 6.33% equipment Machinery equipment- Other Production Straight-line method 10 5% 9.5% equipment Transportation Straight-line method 5 5% 19% equipment Other equipment Straight-line method 5 5% 19% (3)Cognizance evidence and pricing method of financial leasing fixed assets Fixed assets from finance lease are depreciated during the useful life if it is reasonable to determine that the ownership could be obtained upon lease expiration; otherwise, the Company chooses the shorter of the lease period and the remaining useful life to depreciate the assets. 99 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 16.Projects under construction The costs of construction in progress include all necessary project expenditures, the borrowing expenses that should be capitalized before the works reaches the expected usable status and other relevant expenses. Construction in progress changes to fixed assets when it reaches the expected usable status. 17. Borrowing expenses Borrowing expenses include interest, amortization of discount or premium, auxiliary expenses, translation differences arising from borrowings in foreign currency etc. The Company starts to capitalize the borrowing expenses in direct connection to purchase, construction or production of the assets that meet capitalization conditions when there are assets expenditures and borrowing expenses incurred and/or the Company starts all the necessary events to purchase, construct or produce such assets till the assets can be used and sold. Other borrowing expenses are recognized as costs when incurred. The Company capitalizes the actual interest expense incurred by use of special borrowings, minus the interest income from the remaining borrowing funds in bank or any investment income earned from the interim investment of those borrowings; and for general borrowings, the amount to capitalize is the weighted average of the accumulated assets expenditures in exceed of the special borrowings times the capitalization rate of the used general borrowings, which is determined by the weighted average interest rate of the general borrowings. During capitalization, all translation differences of special borrowings in foreign currency should be capitalized while those of general borrowings in foreign currency are recorded in current profit and loss. The assets to capitalize are fixed assets, investment properties, inventories etc., which can be used or sold after a certain period of time to purchase, construct or produce. The Company stops capitalization of borrowing costs if an abnormal interruption more than 3 consecutive months occurs during purchase, construction or production of the assets that are eligible to capitalization till all those restart. If general borrowings are used to purchase, construct or produce the capitalization eligible assets, the borrowing cost to capitalize is the weighted average of the accumulated assets expenditures in exceed of the special borrowings times the capitalization rate of the used general borrowings, which is determined by the weighted average interest rate of the general borrowings. 18.Intangible assets 1. Valuation Method, Service Life and Impairment Test of Intangible Assets (1) Valuation method, service life and impairment test The Company makes initial measurements on intangible assets in terms of the costs and determines the useful life when obtaining the assets. For intangible assets of a limited useful life, from the time the assets are available for use, the Company adopts the amortization method that reflects realization of the expected economic benefits, or the straight-line amortization method if unable reliably to determine how to realize the expected economic benefits; and no amortization are made for intangible assets of an unlimited useful life. At the end of each year, the Company reviews the useful life and amortization methods of intangible assets of a limited useful life and makes adjustments and accounting treatment if different from the previous estimates. For the intangible assets that are estimated to produce no more economic benefits in the future, the Company records the book value of such assets all in current profit and loss. 2. Accounting Policy of Internal Research and Development Expenditure 100 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 The expenditures for internal research and development projects of an enterprise shall be classified into research expenditures and development expenditures. The research expenditures shall be recorded into the profit or loss for the current period. Development expenses can only be capitalized when the following conditions are satisfied: the technology is feasible for use or sales; there is the intention to use or sell the intangible assets; it can be proven that the product generated by the intangible assets is demanded or the intangible assets in demanded; if the intangible is used internally, it can be proven that it is useful; with necessary technical and financial resources and other resources to complete the development of the intangible assets and the intangible assets can be used or sold; the development expense can be reliably measured. If not, the development expense is accounted into the current gain/loss account. If a research project meets the above-mentioned conditions and passes the technical and economic feasibility study, the project will enter the development stage. 19. Impairment of the long-term assets On balance sheet dates, the Company determines whether there are impairments occurring to fixed assets, construction in progress, intangible assets of a limited life, investment properties measured in the cost model as well as non-current and non-financial assets like the long-term equity investments on subsidiaries, joint ventures and associated companies. If impaired, the Company estimates the retrievable amount and conducts an impairment test. Impairment tests need to be done on goodwill, intangible assets of an unlimited life and the intangible assets that are not yet to reach the usable status, no matter they are impaired or not. If the impairment test result shows the retrievable amount lower than the book value, impairment provisions will be set aside and recorded in impairment loss. The retrievable amount is the fair value of the assets minus the disposal expenses or the present value of the estimated future cash flows of the assets, whichever is higher. The fair value of the assets is determined in terms of the price specified in the selling agreement that is fair trade; if no selling agreement but there is an active assets market existing, it is determined in terms of the buyer’s offer; and if no selling agreement and active assets market, the fair value can be estimated based on the best available information. Disposal expenses include all related legal charges, taxes, delivery fees or the direct expenses incurred to have the assets reach the usable or sellable status. To determine the present value of the estimated future cash flows from the assets, the Company chooses an appropriate discount rate in the light of the continual usage of the assets and the estimated future cash flows occurring upon final disposal. Impairment provisions of the assets are calculated and recognized on the basis of individual assets. If unable to estimate the retrievable amount of individual assets, the Company determines the amount by reference to the asset group that includes the individual assets. Asset groups are the minimum assets combination that independently produces cash inflows. For the goodwill separately listed in financial statements, while an impairment test being conducted, the book value is apportioned to the asset groups or combination of asset groups expected to benefit from the synergy effects arising from business combinations. The Company recognizes impairment losses when the test result shows that the retrievable amount of the asset groups or combination of asset groups is lower than their book values. The impairment loss will be first used to write down the book values of the asset groups or combination of asset groups and then those of other assets pro rata. Once the aforesaid impairment losses are recognized, they cannot be reinstated in the future. 20.Long-term amortizable expenses Long-term unamortized expenses are valued at the actual costs and amortized at average in an estimated beneficial period of time. If those cannot benefit the Company in future accounting periods, the remaining will be recorded 101 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 21. Remuneration (1) Accounting methods for short-term compensation Employee remuneration refers to all kinds of rewards or compensations given in return for employees’ services or employment termination. It includes short-term compensation, post-employment benefits, demission benefits and other long-term employee benefits as well as the benefits the Company provides to employees’ spouses, children, dependents, deceased employees’ family and other beneficiaries. The Company classifies into short-term compensation the employee remuneration that needs to be paid off entirely in the twelve months following the reporting year the employees have provided their services, which excludes those given for employment termination. Short-term compensation includes payroll, bonus, allowances and subsidies, employee welfare, social security expenses including medical insurance, injury insurance and birth insurance, housing fund, labor union and employee training expenditures, short-term paid leaves, short-term profit share plans, non-monetary benefits and other short-term rewards. It recognizes as liabilities the actual short-term compensation incurred during the accounting period that the employees provide their services and records in current profit and loss or the relevant asset costs. Non-monetary benefits are measured at the fair value. (2) Accounting methods for post-employment benefits Post-employment benefits are mainly defined contribution plans, which include basic pension, unemployment insurance etc. The corresponding contributions are recorded in the relevant asset costs or current profit and loss when incurred. (3) Accounting methods for demission benefits Demission benefits are the compensations paid to terminate employment before expiration or encourage employees to accept lay-off. (4) Accounting methods for other long-term employee benefits Other long-term employee benefits are all other employee compensations than short-term compensation, post-employment benefits and demission benefits. They are long-term paid leaves, long-term benefits for the disabled, long-term profit sharing plans etc. 22. Estimated Liabilities The Company recognizes as estimated liabilities the obligations that meet the following conditions: A. Current obligations being undertaken by the Company; B. Fulfillment of the obligations that lead to cash flow out of the Company; C. The amount of the obligations that can be measured reliably. If it is expected that a third party can compensate for all or partial expenditures to pay off the recognized estimated liabilities, the compensation can be recognized separately as assets only when the Company is sure to receive it. The amount to recognize cannot exceed the book value of the recognized liabilities. 23 Share-based Payment (1) Types of Share-based Payment It is divided into equity-settled share-based payment and cash-settled share-based payment. (2) Recognition of Equity Instruments’ Fair Value For the granted equity instruments that there is an active market for, e.g. options, the Company determines the fair value by reference to the quotation prevailing in the active market. For those that there is no active market for, the options pricing model is adopted to determine the fair value. 102 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 (3) Recognition Basis for Best Estimates on Exercisable Equity Instruments On each balance sheet date during the vesting period, the Company makes best estimates based on the latest number changes of its employees and adjusts the quantity of estimated exercisable equity. The final quantity of estimated exercisable equity instruments should be consistent with that of the actual ones on vesting dates. 24.Revenues Whether the company needs to comply with the disclosure requirements of the particular industry No Income, is an enterprise formed in daily activities, will lead to an increase in shareholders' equity, the total inflow of capital has nothing to do with the economic interests of the owner of investment. The company involved in inco me, including revenue from selling goods, income of labor ,transferring assets use right and real estate development income.. (1)Recognition time for sales of goods After transferring the significant risks and compensation of the merchandise ownership to the buyer, the Company no longer holds the rights to manage and have control over the merchandise, and recognizes the revenue if the economic benefits arising from the related transactions can flow into the Company and all the costs and revenues related to such product sales can be measured reliably. (2) Services Service transaction can be estimated reliably, meaning the following conditions are satisfied: amount of revenue c an be measured reliably; the relevant economic benefits are likely to flow into the enterprise; completion of the tra nsaction can be measured reliably; transactions that have occurred and will occur costs can be reliably measured For the services that start and end during the same accounting year, the revenue shall be recognized upon completion; if the services end in a different accounting year and the service transaction results can be measured reliably, the Company adopts the completion percentage method to recognize the revenue on balance sheet dates; if not measurable reliably, the Company recognizes the revenue at the amount of the service costs that are incurred and can be compensated expectedly; otherwise, the service costs incurred are recognized as current expenses. The Company adopts the following methods to determine the completion progress of service transactions: ①measurement of the completed jobs; ②the proportion of the completed services to all; ③the proportion of the costs incurred to the total. The company provides services at the balance sheet date, the transaction can not be reliably estimated, it shall be t reated as follows: the costs incurred are expected to be compensated, according to the amount of labor costs that h ave occurred service revenue is recognized, and the same amount knot turn labor costs; the costs incurred are not e xpected to be compensated, labor costs should be recognized in profit or loss has occurred, no service revenue is r ecognized. Contract or agreement entered into with other companies, including the sale of goods when providing services, the sale of goods and rendering of services can be measured in part to distinguish and separate, should be part of the s ale of goods as sale of goods, the provision of services and as part of the provision of services deal with. Sales of goods and rendering of services can not be distinguished, or can be distinguished but can not be measured separat ely, should be part of the sale of goods and provision of services as part of the total sales of goods. (3) Use Rights of Assets on Alienation 103 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Transfer of right to Use Rights of Assets on Alienation consists of interest income, fee income etc. If the related economic benefits can flow into the Company and the revenue can be measured reliably, the amount of usage revenue will be calculated and determined according to the payment time and terms of the related contract or agreement. (4) Construction Contracts A construction contract is a contract for the construction of one or more of the assets in terms of design, technolog y and features, end-use and other closely related and approved. Construction contracts are divided into fixed price contracts and cost-plus contracts. A fixed price contract is to determine the price of a construction contract works in accordance with a fixed price o r fixed unit price contract. Cost-plus contracts, refers to the contract or otherwise agreed cost basis, plus the cost of a fixed fee or a percentag e of the project to determine the price of a construction contract. At the balance sheet date, shall be multiplied by the total contract revenue before completion less the cumulative a mount of revenue recognized after the accounting period, recognized as the current contract revenue; at the same t ime, according to the contract multiplied by the estimated total cost of completion less accumulated previous acco unting period after the amount recognized as an expense is recognized as current contract costs. Current period complete a construction contract, the contract shall be in accordance with the actual total income b efore deducting the cumulative amount of revenue recognized after the accounting period, recognized as the curre nt contract revenue; at the same time, according to the contract costs incurred for the deductible costs previously a ccumulated recognized after the accounting period recognized as current contract costs. If the results cannot be measured reliably but the costs can be retrieved, the revenue will be recognized at the retrievable amount of the actual construction contract costs and the costs treated as expenses when incurred; if not retrievable, the costs will also be treated as expenses and no revenue will be recognized. (5)Income of Real Estate Development The company’s real estate development products can confirm the income when meeting the follow conditions: The sales contract has been signed; the down-payment has been charged and the bank mortgage procedure has been completed or has obtained the rights to charge the purchase payment; the main-body of the house has been completed and has passed the acceptance and inspection; the costs of the sales of the item can be measured 25.Governmental subsidy (1)Basis and accounting methods for assets related government subsidies Government grants means that the Company obtains monetary or non monetary assets free of charge from the government, excluding the capital invested by the government as an investor who also enjoys the corresponding owner's equity. Government grants consist of the government grants pertinent to assets and the government grants pertinent to income. If the government grant is a monetary asset, it shall be measured according to the amount received or receivable. If the government grant is a non-monetary asset, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured according to the nominal amount. Government grants measured in nominal terms are directly included in the current profits and losses. The government grants pertinent to assets are recognized as deferred income and are credited to profit or loss by stages in accordance with a reasonable and systematic method within the useful life of the pertinent assets. If the pertinent assets are sold, transferred, scrapped or destroyed before the end of their useful life, the non-allocated pertinent deferred income balance shall be transferred to the profit or loss of the period of assets disposal, and the recognized government grant needs to be refunded, then it shall write down the carrying amount of the relevant 104 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 deferred income and the excess part shall be included in the current profit and loss. (2)Accounting Method The government grants pertinent to income that are used to compensate the relevant costs or losses of the subsequent period of the enterprise are recognized as deferred income and are credited to the current profit or loss for the period when the relevant costs, expenses or losses are recognized; those government grants used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the current profits and losses. 26.Deferred income tax assets/Deferred income tax liability The balance between the book value and the tax basis of some items of assets and liabilities, as well as the temporary differences issued as the balance between the book value and the tax basis of the tax basis items that unrecognized as assets and liabilities but can be determined as per the provisions of tax law, which shall be determined as the deferred income tax assets and the deferred income tax liabilities in accordance with the balance sheet debt law. Taxable temporary differences related to the initial recognition of goodwill, as well as the initial recognition of an asset or liability in a transaction that neither belongs to a business consolidation, nor affects the accounting profit and taxable income (or deductible loss) when it happens, the relevant deferred income tax liabilities shall not be recognized. In addition, as for taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, if the Company could control the reverse time of such differences and such differences cannot be reversed in the foreseeable future, the relevant deferred income tax liabilities also shall not be recognized. Apart from the above-mentioned exceptional cases, the Company recognizes all other deferred income tax liabilities caused by taxable temporary differences. Deductible temporary differences related to the initial recognition of an asset or liability in a transaction that neither belongs to a business consolidation, nor affects the accounting profit and taxable income (or deductible loss) when it happens, the relevant deferred income tax assets shall not be recognized. In addition, as for deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, if such differences cannot be reversed in the foreseeable future or are not likely to obtain the taxable income to deduct the deductible temporary differences of the taxable income, the relevant deferred income tax liabilities shall not be recognized. Apart from the above-mentioned exceptional cases, the Company recognizes other deferred income tax liabilities caused by deductible temporary differences within the limit of likely obtained taxable income that can be used to deduct the deductible temporary differences of the taxable income. The corresponding deferred tax assets of deductible loss and tax reduction that can be carried forward during subsequent years shall be recognized within the limit of likely obtained future taxable income that can be used to deduct the deductible loss and tax reduction. As per the provisions of tax law, the deferred income tax assets and deferred income tax liabilities shall be measured at the applicable tax rates used during the period of expectation recovery of relevant assets or pay-off relevant liabilities at the balance sheet date. The book value of the deferred income tax assets shall be re-checked at the balance sheet date. The book value of the deferred income tax assets shall be written-down if it is unlikely to obtain sufficient taxable income in the future to deduct the benefit of the deferred tax assets and the written-down amount shall be carried forward if it is likely to obtain sufficient taxable income. 105 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 27.Operational leasing (1)Accounting of operational leasing The Company will transfer substantially all the risks and rewards of ownership of an asset lease is recognized as a finance lease. Other forms of lease besides financial leasing are considered as operating leasing. Lease payments under an operating lease shall be accounted into the relevant asset cost or current profit or loss over the lease term on a straight-line basis. (2) Accounting Method for Financing Leases At the commencement of the lease term, an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments shall be regarded as the recorded value of the leased assets and an amount equal to the minimum lease payments shall be recognized as a long-term recorded value of the leased assets of payables. The balance between the recorded amount of the leased asset and the recorded amount of the payable shall be accounted for as unrecognized finance charge. 28. Other significant accounting policies and estimates 1. Share Repurchase Share repurchase refers to the behavior of repurchasing a certain sum of Company's outstanding stocks from the stock market by cash and other methods; and the behavior that the incentive objects of restricted stocks fail to submit a written application to the Board in the prescribed period shall be deemed as voluntarily give up the unlocking, the corresponding restricted stocks shall no longer be unlocked and shall be logged out after the repurchase at the awarded price by the Company. If any period fails to meet the unlocking conditions within the unlocking period, the restricted stock with the unlocking application qualification in the current period cannot be unlocked and shall be logged out after the repurchase by the Company. Upon the legal procedures and reporting approval and through repurchasing the Company’s stocks, the Company’s reduction of capital is conducted according to the total nominal value of written-off stocks. The part of price paid to stock repurchase (including transaction expenses) that excesses the total nominal amount shall offset the capital reserve (share premium), earned surplus and undistributed profits in sequence; The part of price paid to stock repurchase (including transaction expenses) that less than the total nominal amount shall increase the capital reserve (share premium). 2.Safety production expenses The company counts and draws safety production expenses specified in Notification on Printing and Distributing and Administrative Measures on Drawing and Using Enterprise’s Safety Production Expenses issued by Ministry of Finance and State Administration of Work Safety. Safety production expenses is specialized in improving safe production. Safety production expense is counted into related product’s cost or current profit and loss. At the same time, it is also counted into specialized reserve. In case the safety production expense to be delivered is used in expense, we directly consume specialized reserve. In case safety production expense to be delivered belongs to fixed asset and is spent in construction in-process, confirm it as fixed asset when the project is completed safely and is ready to put into use. Meantime, consume specialized reserve as the cost forming into fixed asset and confirm it as equivalent accumulated depreciation. 106 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 29.Change of main accounting policies and estimations (1)Change of main accounting policies □Applicable √Not applicable (2) Change of main accounting estimations □ Applicable √ Not applicable 30.Other 1. Income tax Income tax is composed of current income tax and deferred income tax. All taxes and expenses are written in current profit and loss except those for reputation adjustment in enterprise combination or trades directly counted into shareholder’s equity or some deferred income tax which is counted in shareholder’s equity. Current income tax is payable tax amount currently calculated as current taxable income. Payable tax amount is calculated by adjusting pre-tax accounting profit specified in related tax laws. The company confirms deferred income tax by adopting liability method in Balance Sheet based on the temporary difference between book value of asset and liability in Balance Sheet and tax base. Temporary difference of items of payable taxes are confirmed to be related deferred income tax liabilities, except the temporary difference of payable taxes are made in the following conditions: A. Initial confirmation of reputation or that of assets or liabilities made in trades with these features: the trade is not enterprise combination and it neither influences accounting profit nor amount of payable tax when it happens. B. As for temporary difference of items of payable taxes related to investment to subsidiaries, joint enterprises and associated enterprises. The temporary difference return time may be controlled and may not return in foreseeable future. On the date of balance sheet , the company will calculate deferred income tax assets and deferred income tax liabilities according to applicable tax between expected recovered assets and paid liabilities, and also the company will reflect the income tax influence in ways of expected recovered assets and paid liabilities on the date of balance sheet. On the date of balance sheet, the company will check the book value of the deferred income tax assets. If it was unlikely to obtain sufficient taxable income taxes to offset benefit of deferred income tax assets, while it was likely to obtain sufficient taxable income, carrying amount of deferred income tax assets shall be written down. VI. Taxation 1.Main categories and rates of taxes Taxes Tax references Applicable tax rates Sales revenue and VAT 3%、6%、11%、17% Technical services revenue 107 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Urban construction tax Turnover tax to be paid allowances 7% Enterprises income tax Taxable income 15%、16.5%、25% Educational surtax Turnover tax to be paid allowances 3% Local education surcharge Turnover tax to be paid allowances 2% The disclosure on the rate of income tax of taxpayers in different enterprises is stated below Name of Taxpayer Rate of Income Tax Dongxu Optoelectronic Technology Co., Ltd. 15% Wuhu Dongxu Optoelectronic Technology Co., Ltd 15% Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd 15% Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd 15% Zhengzhou Xufei Optoelectronic Technology Co., Ltd. 15% Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd 15% Hebei Xubao Construction Installation Engineering Co., Ltd. 25% Shijiazhuang Baoshi Color Bulb Co., Ltd. 25% Wuhan Dongxu Optoelectronic Technology Co., Ltd. 25% Dongxu Construction Group Co., Ltd. 25% Beijing Xufeng Real Estate Co., Ltd. 25% Dongxu (Kunshan)Display Material Co., Ltd. 25% Beijing Dongxu Investment Developement Co., Ltd. 25% Wuhu Ruiyi Labor Co., Ltd. 25% Jiangsu Jixing New Material Co., Ltd. 15% Beijing Xutan New Material Co., Ltd. 25% Beijing Dongxu Huuaqing Investment Co., Ltd. 25% Jiangsu Dongxu Yitai Intelligent Equipment Co., Ltd. 25% Fuzhou Dongxu Optoelectronic Technology Co., Ltd. 25% Shenzhen Xuhui Investment Holdings Co., Ltd 25% hanghai Tanyuan Huigu New Material Technology Co., Ltd. 15% Fuzhou Dongxu Investment Development Co., Ltd. 25% Fuzhou Xufu Optoelectronic Technology Co., Ltd. 25% Taizhou Xiwang New Energy Technology Co., Ltd. 25% Xiamen Xuqi Investment Management Co., Ltd. 25% Shenzhen Xinyingtong Technology Co., Ltd. 25% Xuyou Electronic Material Technology (Wuxi)Co., Ltd. 25% Fuzhou Xuyou Electronic Material Technology Co., Ltd. 25% 108 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Sichuan Dongxu Ruiyi Enterprise Management Co., Ltd. 25% Sichuan Dongxu Ruiyi Environment Engineering Co., Ltd. 25% Sichuan Dongxu Ruiyi Survey & Design Co., Ltd. 25% Sichuan Dongxu Ruiyi Trade Co., Ltd. 25% Sichuan Dongxu Prosperity Construction Development Co., Ltd. 25% Shenzhen Xingxinda Technology Co., Ltd. 25% Mingshuo(Beijing)Electronic Technology Co., Ltd. 15% Huzhou Mingshuo Optoelectronic Technology Co., Ltd. 25% Dongxu Xuhua(International) Equipment Co., Ltd. Not applicable Hunan Dongxu Delai Electronic Technology Co., Ltd. 25% Wuhu Dongxu Weiyu Medical Apparaturs Technology Co., Ltd. 25% Hunan Dongxu Weishi Electronic Technology Co., Ltd. 25% Hunan Dongxu Weigao Medical Apparaturs Technology Co., 25% Ltd. Guangdong Dongxu Weiyu Medical Apparaturs Technology Co., 25% Ltd. Shandong Qihui Medical Technology Co., Ltd 25% Chuanglian Huatai(Hongkong) Co., Ltd. 16.5% Tianlong Huatai Industry(Hongkong) Co., Ltd. 16.5% Taizhou Dongxu Graphene Industry Investment Fund Not applicable Management Center(LP) 2.Tax Preference ① On September 29, 2015,The Company was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2015. ② On October 21, 2014,Wuhu Dongxu Optoelectronic Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2014. ③ On October 21, 2016,Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ④ On November 21, 2016,Shijiazhuang Dongxu Optoelectronic Equipment Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑤ On August 3, 2015,Zhengzhou Xufei Optoelectronic Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2015. ⑥ On November 21,2016,Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. was rated as the national 109 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑦ On November 30, 2016,Jiangsu Jixing New Material Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑧On November 24,2016,Shanghai Tanyuan Huigu New Material Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑨On December 1, 2016, Mingshuo(Beijing)Electronic Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. VII. Notes to the major items of consolidated financial statement 1.Monetary Capital In RMB Items Year-end balance Year-beginning balance Cash 425,749.93 187,232.52 Bank deposit 22,254,637,844.45 25,349,745,448.62 Other 618,495,047.42 706,184,535.72 Total 22,873,558,641.80 26,056,117,216.86 Other notes Notes 1:The amount of restricted monetary capital of the total monetary capital in the end of the period is RMB 943,221,108.77. Mainly for the draft earnest money and the fixed deposit receipt. 2.Bills receivable (1)Classification bill receivable Items Year-end balance Year-beginning balance Bank acceptance 91,708,273.32 50,040,287.95 Trade acceptance 3,290,000.00 5,300,000.00 Total 94,998,273.32 55,340,287.95 (2)Bills transferred to accounts receivable because drawer of the Bills fails to execute the contract or agreement, and undue Bills endorsed to other parties at the end of the period. In RMB Items End of the period amounts derecognizing End of the period amount unterminated Bank acceptance 99,462,400.00 110 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Trade acceptance 59,710,478.59 Total 159,172,878.59 3. Account receivable (1)Classification account receivables. In RMB Amount in year-end Amount in year- begin Book Balance Bad debt provision Book Balance Bad debt provision Classification Book Proportio Proportio Proportio Proportion( Book value Amount Amount value Amount Amount n(%) n(%) n(%) %) Receivables subject 1,674,2 to provision for bad 2,363,80 21,892,9 2,341,912 21,491,16 1,652,714,6 99.97% 0.93% 05,803. 100.00% 1.28% debts on credit risk 5,007.31 77.99 ,029.32 2.65 40.77 42 characteristics basis Receivables that are individually insignificant but with 746,626. 746,626. 0.03% provision for bad 84 84 debts made on an individual basis 1,674,2 2,364,55 22,639,6 2,341,912 21,491,16 1,652,714,6 100.00% 0.96% 05,803. 100.00% 1.28% 1,634.15 04.83 ,029.32 2.65 40.77 Total 42 Receivable accounts with large amount individually and bad debt provisions were provided □ Applicable √ Not applicable Account receivable on which bad debt provisions are provided on age basis in the group √ Applicable □ Not applicable In RMB Balance in year-end Aging Receivable accounts Bad debt provision Proportion Subitem within 1 year Within credit period 1,897,527,356.92 Within 1 year after credit period 304,454,799.49 15,222,739.94 5.00% Subtotal within 1 year 2,201,982,156.41 15,222,739.94 0.69% 1-2 years 20,054,690.29 2,006,069.03 10.00% 2-3 years 11,519,231.55 3,455,169.46 30.00% Over 3 years 2,153,404.39 1,208,999.56 3-4 years 1,888,809.68 944,404.85 50.00% 111 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Over 5 years 264,594.71 264,594.71 100.00% Total 2,235,709,482.64 21,892,977.99 0.98% Notes: In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision □Applicable √ Not applicable In the groups, accounts receivable adopting other methods to accrue bad debt provision Group Name Closing balance Bad debt provision Related party group 128,095,524.67 (2)Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB 4,964,564.17;The amount of the reversed or collected part during the reporting period was of RMB4,223,221.57. Where the current bad debts back or recover significant amounts: In RMB Name Back or withdraw money Method (3)The ending balance of account receivables owed by the imputation of the top five parties The total receivable amount of top five closing balances collected by the debtors in the current reporting period is RMB507,068,428.48, which accounts for 21.44% of the total receivables. The total amount of closing balance for corresponding accrued bad-debt provision is RMB792,218.65. 4. Payment in advance (1)Payment in advance: In RMB Amount in year-end Amount in year- begin Aging Amount Proportion(%) Amount Proportion(%) Within 1 year 1,530,035,703.49 84.97% 776,749,368.51 90.06% 1-2 years 211,566,799.70 11.75% 57,435,800.50 6.66% 2-3 years 34,077,114.54 1.89% 28,247,726.09 3.28% Over 3 years 24,992,534.87 1.39% Total 1,800,672,152.60 -- 862,432,895.10 -- Notes: (2) Top 5 of the closing balance of the prepayment collected according to the prepayment target As of June 30,2017,The total prepayment amount of top five closing balances collected by the objects of prepayment in the current reporting period is RMB1,135,009,252.91, which accounts for 63.03% of the total 112 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 closing prepayment balance. Other notes: Compared with prepaid account at the beginning, increase in prepaid account at the end of this year was caused by advanced-material prepayment’s increase. 5.Interest receivable (1)Classification Interest receivable In RMB Items Amount in year-end Amount in year-begin Fixed deposit 16,239,166.23 Total 16,239,166.23 6. Other accounts receivable (1) Other accounts receivable disclosed by Classification In RMB Amount in year-end Amount in year- begin Book Balance Bad debt provision Book Balance Bad debt provision Classification Book Proportio Proportio Proportio Proportion( Book value Amount Amount value Amount Amount n(%) n(%) n(%) %) Other receivables subject to provision 1,030,08 1,775,56 1,028,308 188,125 2,053,982 186,071,08 for bad debts on 100.00% 0.17% 100.00% 1.09% 4,273.89 4.35 ,709.54 ,067.48 .24 5.24 credit risk characteristics basis 1,030,08 1,775,56 1,028,308 188,125 2,053,982 186,071,08 Total 100.00% 0.17% 100.00% 1.09% 4,273.89 4.35 ,709.54 ,067.48 .24 5.24 Receivable accounts with large amount individually and bad debt provisions were provided □Applicable √Not applicable Account receivable on which bad debt provisions are provided on age basis in the group √ Applicable □ not applicable In RMB Amount in year-end Aging Account receivable Bad debt provision Rate of alloance(%) Subitem within 1 year Within credit period 1,342,173.52 0.00% Within 1 year after credit period 2,146,378.10 107,318.90 5.00% Subtotal within 1 year 3,488,551.62 107,318.90 3.00% 113 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 1-2 years 1,155,138.40 115,513.84 10.00% 2-3 years 130,129.79 39,038.94 30.00% 3-4 years 8,497.64 4,248.82 50.00% Over 5 years 1,509,443.85 1,509,443.85 100.00% Total 6,291,761.30 1,775,564.35 28.22% Notes of the basis of recognizing the group: Other receivable account in Group on which bad debt provisions were provided on percentage basis: □Applicable √Not applicable Other Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: □Applicable √Not applicable (2)Other account receivable classified by account nature In RMB Nature Closing book value Opening book value Related party exchange Current account 55,797,728.61 7,072,359.41 Deposit 13,671,610.51 72,905,814.34 Personal official borrowing 20,914,377.23 9,218,737.75 Persona Returnable Insuranc 6,327,909.07 18,908,561.60 e Deposit 898,830,410.30 1,577,343.37 Export tax refunds 28,250,476.87 75,152,190.18 Total 1,023,792,512.59 188,125,067.48 (3)The ending balance of other receivables owed by the imputation of the top five parties In RMB The closing balance Amount in Name Nature Aging Proportion of bad debts year-end Beijing culture Silicon Valley Asset Deposit 370,000,000.00 Within 1 year 35.92% Operation Co., Ltd. Beijing Hua Xi travel culture Deposit 230,000,000.00 Within 1 year 22.33% industry Co. Chengdu rural property rights Deposit 80,000,000.00 Within 1 year 7.77% exchange Co., Ltd. Shanghai Huimao Deposit 50,000,000.00 Within 1 year 4.85% 114 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Management Co., Ltd. Xian Runyin Finance leasing Co., Deposit 23,000,000.00 Within 1 year 2.23% Ltd. Total -- 753,000,000.00 -- 73.10% 7.Inventory Whether the company needs to comply with the disclosure requirements of the particular industry No (1)Inventory types In RMB Year-end balance Year-beginning balance Items Provision for bad Provision for bad Book Balance Book value Book Balance Book value debts debts Raw materials 1,859,267,689.87 2,130,151.05 1,857,137,538.82 898,356,338.67 1,993,847.52 896,362,491.15 Processing 109,104,315.18 109,104,315.18 75,349,308.19 75,349,308.19 products Stock goods 350,584,459.75 69,316.24 350,515,143.51 267,103,365.46 267,103,365.46 Construction cont ract has been com 214,516,430.63 214,516,430.63 368,022,163.44 368,022,163.44 pleted unsettled a ssets Development cost 1,139,225,487.35 1,139,225,487.35 1,082,130,108.03 1,082,130,108.03 Goods in transit 453,818.61 453,818.61 Total 3,673,152,201.39 2,199,467.29 3,670,952,734.10 2,690,961,283.79 1,993,847.52 2,688,967,436.27 Whether the company is required to comply with the "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 4 - listed companies engaged in seed industry, planting business" disclosure requirements No (2) Inventory depreciation reserve In RMB Items Year-beginning Increase Decrease Year-end balance 115 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 balance Accrual Other Switch back Other Raw materials 1,993,847.52 136,303.53 2,130,151.05 Stock goods 69,316.24 69,316.24 Total 1,993,847.52 205,619.77 2,199,467.29 Notes1:basis of provision for inventory revaluation reserve was cost and net realizable value, and reason of inventory revaluation reserve provision was that final realizable net value was lower than cost. (3) Explanation on inventories with capitalization of borrowing costs included at ending balance A.The development cost details No Name (Planned)Start Expected first batch Estimated total Year-beginning Year-end balance time completion time investment balance 01 Dongxu 2015-12-29 2017-12-31 2.2 billion 1,082,130,108.03 1,139,225,487.35 International Center B. Capitalization of project interest Name Interest amount of interest in Interest capitalization Interest capitalization rate current period accumulated amount (%) Dongxu International Center 94,597,013.19 7.00 (4) Assets unsettled formed by construction contract which has completed at period-end In RMB Items Amount Accumulated Incurred Cost 2,091,078,268.52 Accumulated Confirmed Gross Profit 393,675,037.02 Settlement Amount 2,270,236,874.91 Unliquidated Completed Assets Formed in the Construction 214,516,430.63 Contract 8. Other current assets In RMB Items Closing balance Opening balance USD exchange 58,000,000.00 58,000,000.00 Prepaid or pending certified taxes 1,066,314,218.42 1,124,023,317.38 Short-term Financing 1,500,000,000.00 2,021,430,000.00 Total 2,624,314,218.42 3,203,453,317.38 116 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Other notes: Notes:The decrease in other current assets at the end of the period was mainly due to the decrease in short-term financial management. 9. Available-for-sale financial assets (1) Available-for-sale financial assets In RMB Closing balance Opening balance Items Provision for Provision for Book balance Book value Book balance Book value impairment impairment (2) Available-for-sale financial assets measured by cost at the period-end No 10. Long-term equity investment In RMB Increase/decrease Closing Adjustme Withdraw balance nt of Declarati Opening Add Other n Closing of Investees other on of cash balance investmen equity impairme Other balance impairme comprehe dividends t changes nt nt nsive or profit provision provision income I. Joint ventures II. Associated enterprises Zhongda Chengxin International 72,354,80 171,370.9 72,526,17 Commercial 3.70 6 4.66 Factoring Co., Ltd. Tunghsu Group 400,000,0 -15,702,5 384,297,4 Finance Co., 00.00 80.22 19.78 Ltd. Dongxu 20,800,00 20,824,71 24,716.43 (Deyang) 0.00 6.43 117 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Graphene Industry Developmen t Fund Partnership (LP) 72,354,80 420,800,0 -15,506,4 477,648,3 Subtotal 3.70 00.00 92.83 10.87 72,354,80 420,800,0 -15,506,4 477,648,3 Total 3.70 00.00 92.83 10.87 Other notes: Note: The deadline for the investee has not been audited. 11. Fixed assets (1) List of fixed assets In RMB Machinery Items House, building Transportations Other equipment Total eqiupment I. Original price 1. Balance at 1,226,566,989.39 8,768,047,126.90 43,197,759.54 58,817,344.45 10,096,629,220.28 period-beginning 2.Increase in the 167,291,490.29 268,536,975.56 3,079,970.82 3,469,290.13 442,377,726.80 current period (1) Purchase 62,688,587.96 3,079,970.82 3,333,626.06 69,102,184.84 (2)Inventory\Fixed assets\ Transferred 167,291,490.29 205,848,387.60 373,139,877.89 from construction in progress (3)Increased of 135,664.07 135,664.07 Enterprise Combination 3.Decreased amount 787,832.00 91,549.87 879,381.87 of the period (1)Disposal 787,832.00 91,549.87 879,381.87 4. Balance at 1,393,858,479.68 9,036,584,102.46 45,489,898.36 62,195,084.71 10,538,127,565.21 118 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 period-end II. Accumulated depreciation 1.Opening balance 236,064,086.50 856,391,505.22 25,311,875.86 26,484,237.39 1,144,251,704.97 2.Increased amount 16,809,605.02 301,663,230.38 3,020,809.02 4,629,983.26 326,123,627.68 of the period (1) Withdrawal 16,809,605.02 301,663,230.38 3,020,809.02 4,550,880.76 326,044,525.18 (2)Increased of Enterprise 79,102.50 79,102.50 Combination 3.Decrease in the 712,609.21 60,697.73 773,306.94 reporting period (1)Disposal 712,609.21 60,697.73 773,306.94 4.Closing balance 252,873,691.52 1,158,054,735.60 27,620,075.67 31,053,522.92 1,469,602,025.71 III. Impairment provision 1.Opening balance 36,444.84 36,444.84 2.Increase in the reporting period (1)Withdrawal 3.Decrease in the reporting period (1)Disposal 4. Closing balance 36,444.84 36,444.84 IV. Book value 1.Book value of the 1,140,984,788.16 7,878,492,922.02 17,869,822.69 31,141,561.79 9,068,489,094.66 period-end 2.Book value of the 990,502,902.89 7,911,619,176.84 17,885,883.68 32,333,107.06 8,952,341,070.47 period-begin (2) Details of fixed assets failed to accomplish certification of property In RMB Items Book value Reason 108# Gas station 185,203.53 Processing 109#Oxygen gasification station 363,180.76 Processing 119 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Main entrance Guard room 155,598.44 Processing Bathroom 79,845.61 Processing East entrance Guard room 85,167.80 Processing Compressed air station, circulating water 799,359.47 Processing pump house, refrigeration station Dangerous goods warehouse 347,448.54 Processing Wastewater treatment plant 822,944.36 Processing Broken glass warehouse 2,593,172.40 Processing Substation 340,535.78 Processing Boiler room 4,424,742.33 Processing Rear engineering workshop(101) 45,425,185.54 Processing Auxiliary building (102) 4,145,856.57 Processing Comprehensive power station(I)(103) 4,584,314.54 Processing Water Station (104) 5,995,777.21 Processing Guard Room (105) 422,219.31 Processing Other notes Notes 1: The main reason for the increase in fixed assets at the end of the period is the reversal of the glass substrate production line. 12. Project under construction (1)Project under construction In RMB Year-end balance Year-beginning balance Items Book balance Provision for Book value Book balance Provision for Book value devaluation devaluation Wuhu LCD glass substrate 1,854,902,937.28 1,854,902,937.28 1,676,291,711.39 1,676,291,711.39 production line project Wuhan LCD glass substrate 14,645,209.52 14,645,209.52 14,645,209.52 14,645,209.52 production line project Kunshan Color 159,319,216.99 159,319,216.99 60,284,978.33 60,284,978.33 film project Sapphire crystal 276,923.08 276,923.08 205,128.21 205,128.21 120 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 sultivation and processing of production line equipment Project of Production Line for the 19,227,737.81 19,227,737.81 35,847,492.91 35,847,492.91 8.5th-generation Glass glass substrate Polarized 423,426,356.48 423,426,356.48 Total 2,471,798,381.16 14,645,209.52 2,457,153,171.64 1,787,274,520.36 14,645,209.52 1,772,629,310.84 (2) Changes of significant construction in progress In RMB Includin g: Transferr Capitaliz Capitaliz capitaliz Source Name of Opening ed to Other End Proporti Project ation of Budget Increase ation of ation of of project balance fixed decrease balance on % process interest interest interest funding assets rate (%) this period Xinyingt ong 58,541,1 58,541,1 1,175.16 100.00% 100.00% Other Jingji 38.40 38.40 Office Wuhan LCD glass 757,652. 1,676,29 178,611, 1,854,90 643,201, 55,936,0 Raise substrate 91.28% 91.28% 31.32% 00 1,711.39 225.89 2,937.28 595.57 59.10 funds producti on line project Kunshan Color 311,550. 60,284,9 99,034,2 159,319, Raise 9.61% 9.61% film 00 78.33 38.66 216.99 funds project Sapphire crystal 205,128. 2,061,40 1,989,61 276,923. 5,906.40 95.12% 95.12% Other sultivatio 21 8.62 3.75 08 n and 121 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 processi ng of producti on line equipme nt Project of Producti on Line for the 612,694. 35,847,4 116,381, 133,001, 19,227,7 Raise 3.49% 3.49% 8.5th-ge 00 92.91 472.61 227.71 37.81 funds neration Glass glass substrate Fuzhou Xu Fu 8.5 82,306.0 176,368, 176,368, Raise generatio 0 200.05 200.05 funds ns of industria l lines Phase 1 project 220,000. 423,426, 423,426, Raise 28.60% 28.6% of Asahi 00 356.48 356.48 funds polarizer 3,239,69 3,239,69 Other Other 7.98 7.98 1,991,28 1,772,62 1,057,66 373,139, 2,457,15 643,201, 55,936,0 Total -- -- -- 3.56 9,310.84 3,738.69 877.89 3,171.64 595.57 59.10 (3)Provision for impairment of construction projects In RMB Items Amount Reason Wuhu LCD glass substrate production line project Other notes Note 1: Subsidiary Wuhan Dongxu Optoelectronic Technology Co. Ltd stopped its on-construction projects at the end of 2014. The produced fee was upfront cost rather than physical assets which has no disposal value. 122 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 According to book value and recoverable value, cash flow will not be produced in the future, Therefore, the subsidiary of Wuhan Dongxu Optoelectronic Technology Co., Ltd. 2016 shareholders' meeting resolution of the full amount of impairment provision. 13. Engineering Material In RMB Items Closing balance Opening balance Special Equipment 263,312.81 Special material 41,155.24 Total 304,468.05 14. Intangible assets (1)Information Non patent Items Land use right Patent right Patent technology Total technology I. Original price 1. Balance at 567,156,948.81 1,677,806.92 47,023,137.22 22,120,666.71 637,978,559.66 period-beginning 2.Increase in the 99,976.23 1,040,000.00 1,139,976.23 current period (1) Purchase 99,976.23 1,040,000.00 1,139,976.23 (2)Internal Development (3)Increased of Enterprise Combination 3.Decreased amount of the period (1)Disposal 4. Balance at 567,156,948.81 1,777,783.15 47,023,137.22 23,160,666.71 639,118,535.89 period-end II.Accumulated 123 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 amortization 1. Balance at 43,923,262.93 632,128.66 13,540,982.34 1,687,640.05 59,784,013.98 period-beginning 2. Increase in the 5,677,279.46 96,989.24 2,265,509.52 718,638.54 8,758,416.76 current period (1) Withdrawal 5,677,279.46 96,989.24 2,265,509.52 718,638.54 8,758,416.76 3.Decreased amount of the period (1)Disposal 4. Balance at 49,600,542.39 729,117.90 15,806,491.86 2,406,278.59 68,542,430.74 period-end III. Impairment provision 1. Balance at period-beginning 2. Increase in the current period (1) Withdrawal 3.Decreased amount of the period (1)Disposal 4. Balance at period-end 4. Book value 1.Book value at 517,556,406.42 1,048,665.25 31,216,645.36 20,754,388.12 570,576,105.15 period -end 2.Book value at 523,233,685.88 1,045,678.26 33,482,154.88 20,433,026.66 578,194,545.68 period-beginning The intangible assets by the end of the formation of the company's internal R & D accounted of the proportion of the balance of intangible assets. ⑵Details of Land use right failed to accomplish certification of property In RMB 124 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Items Book value Reason Land use right 55,668,374.98 Processing 15. Development expenditure In RMB Beginning Ending Items Increase In the period Decrease in period balance balance A kind of graphene-based water-based anti-corrosion coating and its ancillary 1,941,747.58 1,941,747.58 products which can be used in the field of heavy preserving 16. Goodwill (1) Original book value of goodwill In RMB Name of the investees or the Opening balance Increase Decrease Closing balance events formed goodwill Shanghai Tanyuan Huigu 33,935,384.57 33,935,384.57 New Meterial Co., Ltd. Mingshuo (Beijng) Electronic 33,319,677.71 33,319,677.71 Technology Co., Ltd. Chuanglian Huatai(Hongkong 722,450.89 722,450.89 ) Co., Ltd. Total 33,935,384.57 34,042,128.60 67,977,513.17 125 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 17.Long-term amortization expenses In RMB Balance in Increase at this Amortization at Items Decrease Balance in year-end year-begin period this period Building renovation 11,756,506.76 2,641,353.65 3,852,355.75 10,545,504.66 NEG Technology 6,167,700.00 205,590.00 5,962,110.00 Use fee Total 11,756,506.76 8,809,053.65 4,057,945.75 16,507,614.66 18. Deferred income tax assets and deferred income tax liability (1) Details of the un-recognized deferred income tax assets In RMB Balance in year-end Balance in year-begin Items Temporarily Deductable Deferred Income Tax Temporarily Deductable Deferred Income Tax or Taxable Difference Assets or Taxable Difference Assets Assets devaluation 28,658,373.79 5,713,064.67 24,724,135.41 5,154,470.27 provision Not realized the internal 1,901,559,690.60 286,978,331.46 1,949,789,000.92 294,212,728.05 profit Deductible loss 22,417,562.27 3,362,634.34 Deferred income 62,948,666.55 9,442,299.98 65,420,100.08 9,813,015.00 difference Impairment of assets under the control of 79,173.07 11,875.96 84,351.33 12,652.70 enterprises under the same control Total 1,993,245,904.01 302,145,572.07 2,062,435,150.01 312,555,500.36 (2)Deferred income tax assets and liabilities are presented as net amount after neutralization In RMB Balance in year-end Balance in year-begin Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference liabilities difference liabilities Value added evaluation of enterprise merger 2,676,351.13 401,452.67 2,755,051.93 413,257.79 under the same control 126 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Total 2,676,351.13 401,452.67 2,755,051.93 413,257.79 (3)Deferred income tax assets and liabilities are presented as net amount after neutralization In RMB Deferred Income Tax Temporarily Deductable Deferred Income Tax Temporarily Deductable Assets or Liabilities at or Taxable Difference at Items Assets or Liabilities at or Taxable Difference at the Beginning of Report the Beginning of Report the End of Report Period the End of Report Period Period Period Deferred income tax 302,145,572.07 312,555,500.36 assets Deferred income tax 401,452.67 413,257.79 liabilities (4)Details of income tax assets not recognized In RMB Items End of term Beginning of term Deductible losses 328,343,011.44 57,681,700.17 Bad debt provision 86,413.68 814,857.00 Impairment of fixed assets 36,444.84 36,444.84 Provision for impairment of construction 14,645,209.52 14,645,209.52 projects Inventory falling price reserves 69,316.24 Total 343,180,395.72 73,178,211.53 (5) The un-recognized deductible losses of deferred income tax assets will due in the following years: In RMB Year End of term Beginning of term Remark 2017 856,290.76 856,290.76 2018 15,649.80 15,649.80 2019 4,010,267.09 944,397.82 2020 3,995,431.56 4,898,217.97 2021 50,803,937.37 50,967,143.82 2022 268,661,434.86 Total 328,343,011.44 57,681,700.17 -- 127 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 19.Other non-current assets In RMB Items Closing balance Opening balance Prepaid engineering equipment 238,462,370.83 387,151,100.41 Prepaid Investment 31,800,000.00 Total 270,262,370.83 387,151,100.41 Other notes The main reason for the decrease of other non-current assets at the end of the period is the equipment received in the current period. 20. Short-term loan (1)Categories of short-term loans In RMB Items Closing balance Opening balance Pledge loan 637,338,652.73 443,307,086.78 Mortgage loan 118,497,469.58 172,315,413.35 Guarantee loan 3,518,677,440.00 4,325,193,700.00 Total 4,474,513,562.31 4,940,816,200.13 Notes: 1. There is no mature but unredeemed short-term borrowing in the company during the accounting period. 2. The increase of short-term borrowings at the end compared to the beginning is mainly due to the production, business operation and property investment, which jointly cause borrowing increase. 3. the final mortgage was RMB118,497,469.58: Thereinto, the collateral for the borrow money of RMB 25,000,000.00 is the house property of Jiangsu Jixing New Materials Co., Ltd with the House property number of YangFangzi No.81800980-81800982 and the land of No. 10483, No.10484 and No. 10486 of YangGuoYong; the collateral for the borrow money of RMB 19,000,000.00 is the land of No. 10485-2011 of YangGuoYong and the land of No. 10487-2011 of YangGuoYong; the subsidiary-Shenzhen Xinyingtong Technology Co. Ltd has a mortgage loan of RMB 74,497,469.58; thereinto: the RMB 15,000,000.00 loan was provided a joint and several liability guarantee by Zeng Jiankai and Zhong Yuhua and was provided the mortgage-backed guarantee by Liu Jun, Zhong Yuhua and Zhang Lixia with the mortgage of lands of No. 50000671902, No. 3000415955 and No. 5000615797 of Shen Real-estate Zi; the RMB 38,000,000.00 loan was provided a joint and several liability guarantee by Zeng Jianyi and was provided the mortgage-backed guarantee by Zhao Baomei using the House property of certificate of property No. 3000492775 of No.6 buliding of Xiangmi Lake First Ecology as the mortgage; the RMB 21,497,469.58 loan was provided the mortgage-backed guarantee by using the cash deposit of RMB 21,430,000.00 as the mortgage. 4. Guarantee loan was RMB 3,518,677,440.00: 128 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Whereby,Li Zhaoting offered RMB 58,000,000.00 joint liability guarantee to Zhengzhou Xufei Optoelectronic Technology Co., Ltd., Tunghsu Group Co., Ltd and Li Zhaoting offered RMB 350,677,440.00 joint liability guarantee to Zhengzhou Xufei Optoelectronic Technology Co., Ltd.,Tunghsu Group , The Company and Li Zhaoting offered RMB 50,000,000.00 joint liability guarantee to Zhengzhou Xufei Optoelectronic Technology Co., Ltd.,Tunghsu Group offered RMB500,000,000.00 joint liability guarantee to The Company,Li Zhaoting offered RMB400,000,000.00 joint liability guarantee to The Company, Tunghsu Group and Li Zhaoting offered RMB700,000,000.00 joint liability guarantee to The Company, Tunghsu Group, Li Zhaoting and Li Qing ffered RMB860,000,000.00 joint liability guarantee to The Company. The company offered RMB 105,000,000.00 guarantee to subsidiary -- Wuhu Dongxu Optoelectronic Technology Co., Ltd., Tunghsu Group offered RMB 105,000,000.00 joint liability guarantee to Wuhu Dongxu Optoelectronic Technology Co., Ltd ., Tunghsu Group offered RMB 50,000,000.00 joint liability guarantee to Wuhu Dongxu Optoelectronic Technology Co., Ltd .,The Company and Li Zhaoting offered RMB 250,000,000.00 guarantee to subsidiary -- Wuhu Dongxu Optoelectronic Technology Co., Ltd.,Li Zhaoting offered RMB 100,000,000.00 joint liability guarantee to Wuhu Dongxu Optoelectronic Technology Co., Ltd .,The Company offered RMB 95,000,000.00 Joint liability guarantee to subsidiary- Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. 5. The amount of loan with a pledge of collateral at the end of the period was RMB 637,338,652.73: thereinto, the RMB 28,683,304.13 was provided a pledge guarantee by Shenzhen Xinyingtong Technology Co., Ltd by using certificate of time deposit; the RMB 125,326,400.00 loan with a pledge of collateral was provided a pledge guarantee by Shenzhen Xinyingtong Technology Co. Ltd by using the deposit of USD 18,481,500.00 as a pledge; the object of pledge for the RMB 483,328,948.60 was the other monetary funds deposited in the special account for deposit. (2) Situation of Overdue Outstanding Short-Term Borrowing Final overdue outstanding short-term borrowing was zero, and situation of important overdue outstanding short-term borrowing was as follows: In RMB Unit Closing balance Interest rate Time Overdue interest rate Other notes: 21. Note payable In RMB Type Closing balance Opening balance Commercial acceptance 159,820,750.00 Bank acceptance 219,260,464.01 233,315,926.05 Total 219,260,464.01 393,136,676.05 Amount due in next fiscal period is RMB 0.00. 22.Account payable (1)Account payable 129 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 In RMB Items Closing balance Opening balance Engineering fund 216,639,043.03 266,567,513.92 Material fund 978,299,169.90 849,166,049.63 Transportation expenses 2,118,059.68 1,263,084.00 Other 21,102,746.79 48,421,844.18 Total 1,218,159,019.40 1,165,418,491.73 (2)Significant accounts payable that aged over one year In RMB The reason for not repaid or carried forwar Items Balance in year-end d Not reached the agreed payment terms and Beijing Guoshun Investment Co., Ltd. 41,088,123.25 deadlines Ningxia Tianshun Electric Power Not reached the agreed payment terms and 31,115,140.33 Engineering Co., Ltd. deadlines Dingzhou Jiaping Construction Not reached the agreed payment terms and 24,969,982.50 Engineering Co., Ltd. deadlines Qinghai Construction Engineering Co., Not reached the agreed payment terms and 14,643,907.65 Ltd. deadlines Total 111,817,153.73 -- Other notes:The increase of the accounts payable of the period are mainly due to the increase of material payment payable and freight payable. 23.Advance account (1)Advance account In RMB Items Closing balance Opening balance Goods 85,689,449.05 173,306,846.80 Engineering fund 423,224,878.72 9,243,589.58 House selling 231,527,625.00 231,527,625.00 Other 2,000,000.00 Total 742,441,952.77 414,078,061.38 130 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 24. Employee compensation payable (1)Classification of employee compensation payable In RMB Items Balance in year-begin Increase at this period Decrease at this period Balance in year-end I. 42,104,784.31 228,011,761.01 224,571,685.19 45,544,860.13 Short-term remuneration II. Post-employment benefit 746,607.99 18,690,851.71 19,144,604.99 292,854.71 s - defined contribution p lans Total 42,851,392.30 246,702,612.72 243,716,290.18 45,837,714.84 (2)Short-term remuneration In RMB Items Balance in year-begin Increase at this period Decrease at this period Balance in year-end 1.Wages, bonuses 18,652,928.59 188,383,769.02 186,779,978.50 20,256,719.11 allowances and subsidies 2.Employee welfare 13,616,866.62 13,616,866.62 3. Social insurance 408,535.42 10,324,945.78 10,570,430.36 163,050.84 premiums Including:Medical 366,897.76 9,336,391.63 9,665,771.88 37,517.51 insurance Work injury ,insurance 12,214.89 553,461.58 554,313.56 11,362.91 Maternity insurance 29,422.77 435,092.57 350,344.92 114,170.42 4. Public reserves for 375,641.47 8,674,426.92 8,893,160.35 156,908.04 housing 5.Union funds and staff 22,667,582.74 5,999,838.28 3,864,900.11 24,802,520.91 education fee 7. Short term profit 96.09 1,011,914.39 846,349.25 165,661.23 sharing plan Total 42,104,784.31 228,011,761.01 224,571,685.19 45,544,860.13 (3)Defined contribution plans listed In RMB Items Balance in year-begin Increase at this period Decrease at this period Balance in year-end 1. Basic old-age 715,861.56 17,837,865.92 18,301,663.76 252,063.72 insurance premiums 131 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 2.Unemployment 30,746.43 852,985.79 842,941.23 40,790.99 insurance Total 746,607.99 18,690,851.71 19,144,604.99 292,854.71 Other notes: Note :Employee benefits payable has no arrears of wages. 25. Taxes payable In RMB Items Closing balance Opening balance VAT 42,572,313.79 83,366,319.90 Enterprise Income tax 55,477,471.01 97,859,353.22 Individual income tax 20,316,022.94 22,560,220.31 City Construction tax 3,048,648.21 3,774,222.43 Business Tax 3,789,219.75 3,789,219.75 House property tax 6,970,326.94 6,187,382.79 Land use tax 945,440.24 746,349.07 Educational surtax 2,100,924.84 2,619,192.11 Stamp Tax 159,412.38 544,438.49 Other 1,185,449.42 2,863,832.64 Total 136,565,229.52 224,310,530.71 26. Interest payable In RMB Items Closing balance Opening balance Interest on long-term borrowings payable 28,839,315.61 3,602,056.66 Enterprise bond interest 148,052,010.66 66,833,709.29 Interest on short-term borrowings 1,932,556.70 2,133,954.29 Total 178,823,882.97 81,610,513.91 Particulars of significant overdue unpaid interest: In RMB Name Overdue amount Overdue reason 27. Dividends payable In RMB Items Closing balance Opening balance 132 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Common stock dividend 62,702,011.96 30,000,000.00 Total 62,702,011.96 30,000,000.00 Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed: 28. Other accounts payable (1) Other accounts payable listed by nature of the account In RMB Items Closing balance Opening balance Current account 37,631,454.33 27,062,361.47 Deposit 7,330,341.69 17,201,477.44 Individual official borrowing 350,363.60 106,501.37 Government Subsidy 15,000,000.00 15,000,000.00 Deposit 5,937,709.42 1,533,593.97 Social security withholding 2,108,864.35 352,709.67 Engineering fund 1,553,725.90 Equipment fund 12,291,891.45 6,065,857.97 Material fund Petty cash 3,148,000.00 484,092.66 Equity section 22,594,191.20 22,594,191.20 Restricted stock repurchase obligations 4,422,320.00 4,422,320.00 Other 19,347,025.90 18,616,305.15 Total 130,162,161.94 114,993,136.80 In RMB 29.Non-current liabilities due within 1 year In RMB Items Closing balance Opening balance Long-term loans due 1 year 2,618,261,390.49 1,049,874,000.00 Long-term payable due 1 year 423,174,302.28 525,979,430.08 Deferred income due within one year 41,697,397.97 42,736,082.34 Total 3,083,133,090.74 1,618,589,512.42 Other notes: Note 1: compared with the beginning of the period, non-current liabilities due within one year was increased at the end of the period because of the increased maturity of loans and financing lease. 133 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 30.Other current liabilities In RMB Items Closing balance Opening balance USD exchange 67,744,000.00 69,370,000.00 For resale tax 27,991,818.64 16,165,473.05 Total 95,735,818.64 85,535,473.05 Increase or decrease in short-term bonds payable: In RMB Premium Amount This and Balance Issuing Issuing in period for Name Par value Term This issue Interest discount in date amount year-beg repaymen amortizati year-end in t on Other notes: Notes :In 1993,the Group signed the agreement on exchange of US dollars which agreed returning 10,000,000 US dollars to the Exchange Unit and repossess the RMB 58,000,000 exchanged in November 1998, As of June 30, 2017, the Group still consults with the Exchange Unit on the returning of the exchange. 31. Long-term loan (1) Category of long-term loan In RMB Items Closing balance Opening balance Mortgage loans 3,263,703,213.74 4,758,433,000.00 Guarantee loans 4,985,499,999.98 2,487,600,000.00 Credit loans 200,000,000.00 400,000,000.00 Less :Long-term loan due 1 year -2,618,261,390.49 -1,049,874,000.00 Total 5,830,941,823.23 6,596,159,000.00 Notes: Notes 1:At the end of the period, the Company has no long-term borrowings that have not yet been repaid. Note 2: The mortgage of RMB 3,263,703,213.74 is both the mortgage loan and the guarantee loan, reclassified into the non-current liabilities due within one year RMB 673,028,057.13. (1) Among the loan of RMB 408,000,000.00, due within one year is RMB 136,000,000.00, the collateral and guarantor of the loan: a. Wuhu Dongxu Optoelectronic Technology Co. Ltd mortgages 202 acres of state-owned land use rights and the factory after the completion of the project, and two precious metal platinum channels to provide the collateral; b. the loan guarantor is Wuhu Construction Investment Co., Ltd. (2) Among the loan of RMB 1,640,000,000.00, due within one year is RMB 327,500,000.00, the collateral 134 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 and guarantor of the loan: a. Wuhu Dongxu Optoelectronic Technology Co. Ltd mortgages 8 precious metal platinum channel assets to provide the collateral; b. Dongxu Optoelectronic Technology Co., Ltd. provide full joint liability guarantee for its subsidiary Wuhu Dongxu Optoelectronic Technology Co., Ltd. (3) Among the loan of RMB 450,000,000.00, due within one year is RMB 80,000,000.00, the collateral and guarantor of the loan: a. Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. mortgages the Wukai (construction) state-owned 2013 No. 020, Wukai (construction) state-owned 2013 No. 021, Wukai (construction) state-owned 2014 No. 008 land use rights and the fixed assets after the completion of the project; b. Dongxu optoelectronic Technology Co., Ltd. provide full joint liability guarantee for its subsidiary Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. (4)Among the loan of RMB 709,195,200.00元, Non-current Liability due within one year is RMB 123,548,800.00, the collateral and guarantor: a. the guarantor is Henan Energy and Chemical Industry Group Co., Ltd., Dongxu Gruop, and Henan Energy and Chemical Industry Group Co., Ltd. provides the joint liability guarantee for the loan principal equivalent to RMB 200 million under the project and its interest, penalty interest, compound interest, compensation, liquidated damages, compensation for damage and the cost of debt to the lender; the guarantor Tunghsu Group provides the joint liability guarantee for the loan principal equivalent to RMB 450 million under the project and its interest, penalty interest, compound interest, compensation, liquidated damages, compensation for damage and the cost of debt to the lender. On the ground buildings, machinery and equipment (including 4 Precious Metals Platinum channel) collateral valuation value of RMB1,055,713,019.27. (5)For the RMB 56,508,013.74 loan, of which the non-current liabilities due within one year are RMB 5,979,257.13, and such loan with a pledge of collateral not only is the collateral loan but also is the guarantee loan, which was provided a joint and several liability guarantee by Zneg Jiankai and his spouse Zhong Yuhua and was a collateral loan that was provided a collateral of house by Shenzhen Xinyingtong Technology Co. Ltd. Note 3: Among the credit loan of RMB 200,000,000.00, due within one year is RMB 200,000,000.00. Note 4:Among the guarantee loan of RMB 4,985,499,999.98, due within one year is RMB 1,745,233,333.36, of which: TUNGHSU GROUP, Li Zhaoting, Li Qing provide the joint liability guarantee for the Company’s loan of RMB 2,487,500,000.00, TUNGHSU GROUP and Li Zhaoting provides the joint liability guarantee for the Company’s loan of RMB 600,000,000.00; TUNGHSU GROUP provides the joint liability guarantee for the Company’s loan of RMB498,000,000.00; TUNGHSU GROUP , Dongxu Optoelectronic Investment Co., Ltd.and Li Zhaoting provides the joint liability guarantee for the Company’s loan of RMB 400,000,000.00;Li Zhaoting provides the joint liability guarantee for the Company’s loan of RMB 124,999,999.98. Among the loan of RMB 695,000,000.00, due within one year is RMB 170,000,000.00, and the loan is both the mortgage loan and the guarantee loan: the guarantor Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. mortgages the assets owned by itself according to the law and formed by this project, including land use rights, factories and other buildings, machinery and equipment (including three precious metal platinum channels) to provide the collateral; b. TUNGHSU GROUP and Li Zhaoting and Li Qing provide the guarantee. TUNGHSU GROUP and Li Zhaoting provides the joint liability guarantee for Fuzhou Dongxu Optoelectronic Technology Co., Ltd’s loan of RMB 100,000,000.00; Nippon Electric Co., Ltd. provides the joint liability guarantee for Fuzhou Dongxu Optoelectronic Technology Co., Ltd’s loan of RMB 80,000,000.00. Notes 5.Rate of annual long-term borrowing is generally ranged from 4.90% to 9.00%. Other notes: 135 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 32. Bonds payable (1) Bonds payable In RMB Items Closing balance Opening balance 15 Dongxu Bonds 992,015,480.73 990,780,313.28 Mid-term Note I 2,981,029,962.31 2,976,537,353.65 Mid-term Note II 1,687,512,093.46 1,686,594,827.80 Total 5,660,557,536.50 5,653,912,494.73 (2) Changes on bonds payable (not including other financial instrument classified as preferred stock and perpetual capital securities of financial liabilities) In RMB 15 1,000,000 1,000,000 990,780,3 30,000,00 1,235,167 60,000,00 992,015,4 Dongxu 2015.5.19 5 Years ,000.00 ,000.00 13.28 0.00 .45 0.00 80.73 Bonds Mid-term 3,000,000 2016.11.1 3,000,000 2,976,537 91,025,64 4,492,608 2,981,029 5 years Note I ,000.00 7 ,000.00 ,353.65 3.83 .66 ,962.31 Mid-term 1,700,000 2016.12.0 1,700,000 1,686,594 20,192,65 917,265.6 1,687,512 5 Years Note II ,000.00 2 ,000.00 ,827.80 7.54 6 ,093.46 5,700,000 5,653,912 141,218,3 6,645,041 60,000,00 5,660,557 Total -- -- -- ,000.00 ,494.73 01.37 .77 0.00 ,536.50 (3)Other financial instruments that are classified as financial liabilities The issuance of preferred stock and other financial instruments such as perpetual debt Note: on September 8, 2016, the 8th board of directors meeting of the company examined and approved the company’s application for registration of the medium-term notes issued no more than RMB 4.7 billion. The accepting institution was National Association of Financial Market Institutional Investors. On September 26, 2016, the extraordinary shareholders' general meeting adopted the bill on the registration and issuance of medium-term notes. RMB 4.7 billion medium-term notes was divided into 2 phases in 2016. Among them: total amount of the first phase of the medium-term notes varieties (3 + 2) and five-year notes was RMB 3 billion. Total amount of the second phase of the medium-term notes varieties (3 + 2) and five-year notes was RMB 1.7 billion. Table of changes in financial instruments such as preferred stock and perpetual debt In RMB External Balance in year-begin Increase at this period Decrease at this period Balance in year-end financial Amount Book value Amount Book value Amount Book value Amount Book value instruments 136 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 33. Long-term payable (1) Long-term payable listed by nature of the account In RMB Items Closing balance Opening balance Long-term payable 2,025,481,796.75 2,335,133,534.47 Less:Unconfirmed financing costs -235,782,017.61 -294,845,535.72 Less:Port due Within 1 year -423,174,302.28 -525,979,430.08 Total 1,366,525,476.86 1,514,308,568.67 Other notes: Detail: Name of lessor Initial amount Increase in the Repayment amount Closing balance period Wuxi Finance Leasing Co., Ltd. 206,000,000.00 206,000,000.00 Beijing Cultural Technology Finance 278,478,157.00 55,695,631.40 222,782,525.60 Leasing Co., Ltd. Beijing Guozi Finance Leasing Co., 259,979,122.62 28,886,569.18 231,092,553.44 Ltd. Haitong Hengxin International 402,769,234.00 57,538,462.00 345,230,772.00 Leasing Co., Ltd. Ligen Finance Leasing(Shanghai) Co., 90,749,640.25 18,149,928.04 72,599,712.21 Ltd. Jiangsu Runxing Finance Leasing Co., 240,000,000.00 8,000,000.00 232,000,000.00 ltd. Hebei Finance Leasing Co., Ltd. 60,755,349.99 15,542,800.00 45,212,549.99 Lujin Shenhua Finance Leasing 171,417,988.80 17,141,798.88 154,276,189.92 (Shanghai) Co., Ltd. Xian Runyin Finance Leasing Co., 624,984,041.81 13,624,722.22 611,359,319.59 Ltd. Dongyin Finance leasing 110,928,174.00 110,928,174.00 (Tianjing)Co., Ltd. Total 2,335,133,534.47 110,928,174.00 420,579,911.72 2,025,481,796.75 Notes Tunghsu Group Co., Ltd, Li Zhaoting and Li Qing offered a guarantee of melts rent at RMB 1,001,584,005.42. 34.Deferred income In RMB Items Balance in Increase at this Decrease at this Balance in year-end Reason 137 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 year-begin period period Govemment Subsidy 373,714,638.12 391,273.75 373,323,364.37 Less :Government subsidies due within -26,809,305.17 -13,399,652.78 -13,404,652.59 -26,804,305.36 one year Not realized after 49,971,106.49 6,596,345.48 43,374,761.01 sale rental return Less:Unrealized customer service due -15,926,777.17 -6,929,704.03 -7,963,388.59 -14,893,092.61 within 1 year rent to profit or loss Total 380,949,662.27 -20,329,356.81 -14,380,421.95 375,000,727.41 -- Details of government subsidies In RMB Amount Beginning of New subsidy in transferred to Asset-related or Items Other changes End of term term current period non-operational income-related income Grant of Government 27,683,400.00 1,122,300.00 26,561,100.00 Related to assets Infrastructure Grant of Industry Revitalizatio n and Technology 2,877,777.88 116,666.64 2,761,111.24 Related to assets Reconstructio n Project Grant of Glass-tube Secondary 5,000.00 5,000.00 Related to assets Environment al Protection Technical 2,933,333.31 133,333.33 2,799,999.98 Related to assets reconstructi on Grant of Glass 11,000,000.00 500,000.00 10,500,000.00 Related to assets Substrate Project Industry Development 5,133,333.31 233,333.33 4,899,999.98 Related to assets Fund Project finance 344,666.69 15,666.67 329,000.02 Related to assets discount 138 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Grant of Industry Revitalizatio n and Technology 78,184,000.02 3,257,666.67 74,926,333.35 Related to assets Reconstructio n Project 2013 Provincial strategic emerging 4,583,333.35 166,666.67 4,416,666.68 Related to assets industries of special grant funds Technology reconstructi on 30,978,333.32 1,078,000.00 29,900,333.32 Related to assets Special funds Investment and Subsidies of “Double Hundred Plan” Project 1,983,333.33 100,000.02 1,883,333.31 Related to assets granted by the People's Government of Henan Province TFT glass substrate 99,166.67 4,999.98 94,166.69 Related to assets technology R& D fund TFT glass substrate project 6,611,111.10 333,333.36 6,277,777.74 Related to assets Subsidy Investment and Subsidies within Budget for Technological Transformation Project by National 9,255,555.57 466,666.68 8,788,888.89 Related to assets Development and Reform Commission and the Ministry of Industry and Information 139 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Technology TFT glass substrate project 13,222,222.23 666,666.66 12,555,555.57 Related to assets Subsidy Subsidy Major Scientific and Technical Projects by 661,111.10 33,333.36 627,777.74 Related to assets Finance Bureau of Zhengzhou City Financial Supports for National Key Industry and Technical 9,255,555.57 466,666.68 8,788,888.89 Related to assets Transformation on Projects Granted by the Municipal Finance Bureau Financial Supports for Industrial Development Granted by the Finance Bureau 4,627,777.77 233,333.34 4,394,444.43 Related to assets of the Economic and Technological l Development Zone Funds for Independent Innovation of 3,966,666.67 199,999.98 3,766,666.69 Related to assets Provincially Supported Enterprises Supporting Funds on Finance 1,322,222.23 66,666.66 1,255,555.57 Related to assets Discounts Funds for 991,666.67 49,999.98 941,666.69 Related to assets 140 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Education, Science and Culture Granted by the Finance Bureau Supporting Funds for Industrial Structure -adjusting 1,928,888.88 93,333.36 1,835,555.52 Related to assets Projects Granted by the Regional Finance Bureau Industry discount 1,111,111.10 53,333.34 1,057,777.76 Related to assets and expenses Financial 3,527,777.86 166,666.68 3,361,111.18 Related to assets discount Industrial restructuring 3,813,333.33 160,000.02 3,653,333.31 Related to assets project financial funds Special Funds for High-end Information Industry Chain Granted by the Finance Bureau 4,194,444.45 166,666.68 4,027,777.77 Related to assets of the Economic and Technological l Development Zone 2015 project equipment 32,273,366.64 1,145,800.03 31,127,566.61 Related to assets investment subsidies Zhengzhou City F inance Bureau in 2011 and 2012 ha s been the accepta 2,585,555.55 86,666.64 2,498,888.91 Related to assets nce of the provinc ial industrial struc ture adjustment pr 141 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 oject the second b atch of funds Strategic emerging industry 27,500,000.00 1,000,000.00 26,500,000.00 Related to assets Development project funds High-tech Zone appropriated 6,293,333.33 213,333.33 6,080,000.00 Related to assets substrate project The production line of incentive 20,748,842.77 753,471.70 19,995,371.07 Related to assets funds Special funds for 2015 scientific and technological 7,028,417.42 301,701.96 6,726,715.46 Related to assets achievements transform project G8.5tft-lcd glass substrate manufacturing precision 45,000,000.00 45,000,000.00 Related to assets intelligent digital workshop construction project Green key technology 12,000,000.00 12,000,000.00 Related to assets reform of glass substrate(1200) Intelligent manufacturing pilot 1,000,000.00 1,000,000.00 Related to assets demonstration project grant (100) Research funding 1,590,000.00 1,590,000.00 Related to income 159 Special funds for scientific research 400,000.00 400,000.00 Related to income 40 142 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Total 373,714,638.12 13,000,000.00 13,391,273.75 373,323,364.37 -- 35.Other Non-current liabilities In RMB Items Closing balance Opening balance CDB financing 500,000,000.00 500,000,000.00 Total 500,000,000.00 500,000,000.00 Other notes: Notes:According to the investment contract signed by Dongxu Optoelectronic Technology Co., Ltd, Wuhu Dongxu Photoelectric Technology Co., Ltd., Fuzhou Dongxu Investment Development Co., Ltd and China Development Fund Co., Ltd, China Development Fund Co., Ltd increased the capital of RMB 500,000,000.00 to Fuzhou Dongxu Investment Development Co., Ltd, annually enjoying a fix rate of return. After the project is completed, Dongxu Optoelectronic Technology Co., Ltd shall make the installment redemption to the stake held by China Development Fund Co., Ltd. 36.Stock capital In RMB Increase/decrease this time (+ , - ) Balance Balance Issuing of new Transferred Year-beginning Bonus shares Other Subtotal year-end share from reserves Total of capital 4,939,928,983. 4,939,928,983. shares 00 00 37. Capital reserves In RMB Items Year-beginning balance Increase in current Decrease in current Year-end balance Share premium 15,175,688,435.63 796,800.00 250,586.82 15,176,234,648.81 Other 31,522,375.26 31,522,375.26 Total 15,207,210,810.89 796,800.00 250,586.82 15,207,757,024.07 Other notes, including changes and reason of change: Notes :Equity incentive amortization expenses RMB796,800.00 should be added to the capital reserves. In current period, capital of subsidiary company Fuzhou Dongxu Optoelectronic Technology Co., Ltd was increased, thus resulting capital reserves decrease RMB 250,586.82. 38.Treasury stock In RMB 143 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Decrease in the current Items Year-beginning balance Increase in the current Year-end balance period The obligation to repurchase equity 4,422,320.00 4,422,320.00 incentive Total 4,422,320.00 4,422,320.00 39. Other comprehensive income In RMB Amount of current period Less : Previously rec Amount for After - tax a After - tax a Year-beginni Year-end Items ognized in pro the period Less: ttributable t ttributable t ng balance balance fit or loss in ot before inco Income tax o the parent o minority s her comprehen me tax company hareholders sive income II.Other comprehensive income to be subsequently reclassified into profit -1,368.93 -1,368.93 -1,368.93 loss Balance form the translation of -1,368.93 -1,368.93 -1,368.93 foreign currency financial statements Total of Other comprehensive -1,368.93 -1,368.93 0.00 -1,368.93 income 40. Special reserves In RMB Decrease in the current Items Year-beginning balance Increase in the current Year-end balance period Safety production cost 5,289,190.20 5,289,190.20 41. Surplus reserve In RMB Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period 144 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Statutory surplus reserve 188,044,070.48 188,044,070.48 Total 188,044,070.48 188,044,070.48 42. Retained profits In RMB Items Amount of current period Amount of previous period Before adjustments: Retained profits in last period 1,885,538,821.49 969,380,500.97 end After adjustments: Retained profits at the period 1,885,538,821.49 969,380,500.97 beginning Add:Net profit belonging to the owner of the 635,855,750.37 1,239,928,899.40 parent company Less:Statutory surplus reserve 55,320,542.06 Dividend of common stock payable 345,795,028.81 268,450,036.82 Retained profits at the period end 2,175,599,543.05 1,885,538,821.49 As regards the details of adjusted the beginning undistributed profits (1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning undistributed profits are RMB 0.00. (2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.00. (3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 . (4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits are RMB 0.00. (5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 . 43. Business income, Business cost In RMB Amount of current period Amount of previous period Items Income Cost Income Cost Main business 4,632,685,829.16 3,337,781,315.84 2,872,447,933.52 1,935,634,364.40 Other business 8,599,698.75 1,093,834.06 9,611,220.89 2,675,279.25 Total 4,641,285,527.91 3,338,875,149.90 2,882,059,154.41 1,938,309,643.65 145 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 44. Business tax and subjoin In RMB Items Amount of current period Amount of previous period Urban construction tax 15,013,280.82 11,474,361.56 Education surcharge 10,904,037.45 8,203,130.71 Property tax 4,756,218.45 Land use tax 8,002,134.32 vehicle and vessel usage tax 8,618.64 Stamp tax 5,606,307.49 Business tax 761,365.31 Other 874,497.35 2,870.30 Total 45,165,094.52 20,441,727.88 Other notes: Note: According to CK (2016) NO. 22 notice "On printing and Distributing Value-Added tax Accounting Regulations" issued by the Ministry of Finance, after comprehensive regulations for business tax paid VAT, business tax and additional course changed name to "tax and additional" course. The course accounts consumption tax of business activities, urban maintenance and construction tax, resource tax, educational expenses additional and the property tax, land-using tax, vehicle-using taxes, stamp duty and other relevant taxes. The "business tax and additional" column in the income statement should be changed to "tax and additional” column. The company’s property tax, land-using tax, vehicle-using taxes, stamp duty and other relevant taxes should be listed in the management fees. And also be listed in this course since May 1, 2016. 45.Sales expenses In RMB Items Amount of current period Amount of previous period Wage and welfare insurance 7,294,517.68 8,043,637.06 Shipment 15,328,447.68 10,518,390.78 Travel 943,021.18 1,564,588.04 Business expenses 1,092,211.73 889,762.89 Consumables and repairs 44,401.46 35,298.52 Office fee 63,078.18 693,969.53 Depreciation 242,381.24 115,233.72 Advertising 847,755.97 9,039,375.46 Other 3,228,420.03 677,460.56 Total 29,084,235.15 31,577,716.56 146 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 46. Administrative expenses In RMB Items Amount of current period Amount of previous period Wage and additional cost 68,826,404.16 68,805,600.28 Business expenses 1,322,409.53 1,479,520.63 Labor protect fee 1,207,592.76 3,529,985.13 Office fees 4,267,054.65 20,578,493.71 Travel fees 2,219,022.10 3,054,740.65 Publicize Fees 2,197,489.82 1,393,515.31 Miscellaneous charges 1,218,777.26 319,840.58 Tax 14,572,906.28 Depreciation accumulative 26,238,710.55 23,481,335.52 Low value consumables and repair costs 917,518.47 1,090,291.06 Research expenses 53,235,234.93 45,720,772.21 Consultation fees 10,915,428.13 12,360,432.61 Rental fees 8,040,238.09 19,769,433.60 Communication fees 124,253.08 625,548.95 Transportation feed 125,702.79 2,920,583.91 Equity incentive cost 796,800.00 1,992,000.00 Other 12,062,518.64 15,011,264.42 Total 193,715,154.96 236,706,264.85 47. Financial expenses In RMB Items Amount of current period Amount of previous period Interest expenses 519,566,583.75 193,938,482.48 Less:Interest income 193,951,294.79 83,547,417.93 Net interest expenses 325,615,288.96 110,391,064.55 Exchange gains and losses -12,688,695.73 -18,221,357.21 Financial institution 1,926,814.75 649,340.38 Bill discount rate 1,519,815.05 Other 7,500.50 100,529.84 Financing fee 3,093,312.92 147 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Total 317,954,221.40 94,439,392.61 48. Asset impairment loss In RMB Items Amount of current period Amount of previous period 1. Bad debt loss 2,618.25 3,554,932.15 II.Losses for falling price of inventory 205,619.77 Total 208,238.02 3,554,932.15 49.Investment income In RMB Items Amount of current period Amount of previous period Long-term equity investment income by equity -15,506,492.83 81,758.31 method Financing 22,183,417.04 Total 6,676,924.21 81,758.31 50.Other income In RMB Source Amount of current period Amount of previous period Tax returns 86,680,000.00 51. Non-operating income In RMB The amount of non-operating Items Amount of current period Amount of previous period gains & losses Govemment Subsidy 65,632,104.25 103,218,866.64 65,632,104.25 Other 437,783.27 290,413.04 437,783.27 Total 66,069,887.52 103,509,279.68 66,069,887.52 Government subsidy reckoned into current gains/losses In RMB Issuing Whether the Whether Assets-relate Items Issuing body Nature Reason impact of special Amount of Amount of d/income 148 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 subsidies on subsidies -related the current current previous profit and period period loss Grants obtained due to the country encourage and support Yangzhong specific Talent project Related to Finance Subsidy industries Yes No 600,000.00 240,000.00 funds income Bureau (Obtained in accordance with the national policies and regulations) Grants obtained due to research and Yangzhong Innovation development, Related to Technology Award Yes No 10,000.00 fund technical income Bureau renovation and transformatio n, etc Grants obtained due to research Yangzhong and Equipment Developme development, Related to investment nt and Award Yes No 109,100.00 298,200.00 technical income fund Reform renovation Commission and transformatio n, etc Grants obtained due Yangzhong Technology to research Related to Technology Award Yes No 20,000.00 9,000.00 Patent fund and income Bureau development, technical 149 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 renovation and transformatio n, etc Grants obtained due to research and Technology Yangzhong development, Related to Innovation Technology Award Yes No 15,000.00 technical income Award. Bureau renovation and transformatio n, etc Grants obtained due to the country Provincial encourage Industry and and support information Yangzhong specific industry Related to Finance Subsidy industries Yes No transformatio income Bureau (Obtained in n and accordance upgrading of with the special funds national policies and regulations) Grants obtained due to research Provincial and Science and Yangzhong development, Related to technology Technology Award Yes No technical income awards in Bureau renovation 2015 and transformatio n, etc Grants Labor and Yangzhong obtained due employment Social to the country Related to management Award Yes No Security encourage income center steady Bureau and support post subsidies specific 150 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 industries (Obtained in accordance with the national policies and regulations) Grants obtained due to research and The fourth Yangzhong development, Related to batch of grant Technology Subsidy Yes No technical income funds Bureau renovation and transformatio n, etc Grants obtained due to research and Yangzhong development, Related to Patent fund Technology Subsidy Yes No technical income Bureau renovation and transformatio n, etc Grants obtained due to the country encourage and support 16 provincial Yangzhong specific special funds Related to Finance Award industries Yes No for business income Bureau (Obtained in development accordance with the national policies and regulations) 16 national Yangzhong Grants Related to special fund Finance Award obtained due Yes No income for foreign Bureau to the country 151 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 trade and encourage economic and support development specific industries (Obtained in accordance with the national policies and regulations) Grants obtained due to research and Yangzhong Patent development, Related to Technology Subsidy Yes No funding technical income Bureau renovation and transformatio n, etc Grants obtained due to research 16 years of and Yangzhong special funds development, Related to Technology Subsidy Yes No for research technical income Bureau cooperation renovation and transformatio n, etc Grants obtained due The second to batch of conforming patent to the local applications Zhengzhou supporting Related to for funding Technolog y Subsidy Yes No policies such income by the Bureau as local opening of government’s the CMC in investment 2015 attraction policy Zhengzhou Zhenzhou Subsidy Grants Yes No Related to 152 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 City Finance Finance obtained due income Bureau Bureau to students conforming apply for to the local subsidies supporting policies such as local government’s investment attraction policy Grants obtained due Zhengzhou to City Social conforming Security Zhengzhou to the local Bureau in the Social supporting Related to fifth Subsidy Yes No security policies such income installment of Bureau as local unemployme government’s nt insurance investment in 2015 attraction policy Grants obtained due Zhengzhou to City conforming Economic to the local Zhengzhou Development supporting Related to Technology y Subsidy Yes No Zone in 2016 policies such income Bureau the second as local batch of government’s patent funds investment attraction policy Zhengzhou Grants City Science obtained due and to Zhengzhou Technology conforming Related to Technology y Subsidy Yes No Bureau, to the local income Bureau Finance supporting Bureau 2016 policies such the first batch as local 153 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 of large-scale government’s scientific investment equipment attraction and facilities policy to share subsidies Grants obtained due to Zhengzhou conforming City Bureau to the local Zhengzhou of Finance supporting Related to Finance Subsidy Yes No cited the policies such income Bureau project as local funding government’s investment attraction policy Grants obtained due Zhengzhou to City Social conforming Security Zhengzhou to the local Bureau in Social supporting Related to December Subsidy Yes No security policies such income 2016 work Bureau as local injury government’s prevention investment fee attraction policy Grants obtained due Zhengzhou to City Bureau conforming of Commerce to the local in 2015 Zhengzhou supporting Related to Zhengzhou Commercial Award Yes No policies such income City, opening al Bureau as local up special government’s funds investment (national p attraction policy Zhengzhou Zhengzhou Subsidy Grants Yes No Related to 154 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Economic Technology y obtained due income and Bureau to Technologica conforming l to the local Development supporting Zone Finance policies such Bureau 2016 as local annual R & D government’s costs ladder investment subsidy attraction policy Grants Zhengzhou obtained due City, Human to Resources Zhengzhou conforming and Social human to the local Security resources and supporting Related to Award Yes No Department social policies such income of college security as local graduates department government’s employment investment awards attraction policy Received the Grants quality of the obtained due opening Zhengzhou to district economic and conforming quality Technologica to the local promotion l supporting Related to Award Yes No 200,000.00 district Development policies such income leading group Zone quality as local office, leading group government’s director of office investment quality award attraction 2016 policy Received the Grants Zhengzhou obtained due Finance to Zhengzhou Bureau, conforming Related to Finance Subsidy Yes No 492,000.00 social to the local income Bureau security fund, supporting college policies such graduates as local 155 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 employment government’s trainee investment subsidies attraction policy Grants To receive obtained due foreign to intellectual Henan conforming resources Provincial to the local from Department supporting Related to Zhengzhou of human Subsidy Yes No 50,000.00 policies such income human resources and as local resources and social government’s Social security investment Security attraction Bureau policy Grants obtained due to the country encourage Human and support Resources specific Province Related to Office Subsidy industries No No Finance Dept income funding for (Obtained in funding accordance with the national policies and regulations) Grants obtained due to the country encourage and support Central specific innovation Wuhu Related to Award industries Yes No 100,000.00 team support Finance income (Obtained in fund accordance with the national policies and regulations) Wuhu social Wuhu human Subsidy Grants Yes No 108,000.00 Related to 156 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 security resources obtained due income center steady service center to the country hillock encourage subsidy and support specific industries (Obtained in accordance with the national policies and regulations) Grants Economic obtained due and Trade to research Development and R&D Bureau of development, Related to equipment Wuhu Subsidy Yes No 519,000.00 technical income grants economic and renovation Technology and Development transformatio Zone n, etc Grants obtained due Economic to and Trade conforming Development Disposable to the local Bureau of Industrial supporting Related to Wuhu Award Yes No Development policies such income economic and Award Fund as local Technology government’s Development investment Zone attraction policy Grants obtained due to the country Innovative encourage Wuhu Related to construction Subsidy and support Yes No Finance income special funds specific industries (Obtained in accordance 157 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 with the national policies and regulations) Grants obtained due to the country encourage Wuhu science and support and Wuhu specific Related to Technology Technology Award industries Yes No income Award in Bureau (Obtained in 2015 accordance with the national policies and regulations) Grants obtained due to the country Economic encourage and Trade and support Private Development specific enterprises Related to Bureau of Award industries Yes No hundred income Wuhu (Obtained in special funds economic and accordance Technology with the national policies and regulations) Grants obtained due to the country encourage and support Wuhu science Wuhu specific and Related to Technology Award industries Yes No Technology income Bureau (Obtained in Award 2016 accordance with the national policies and regulations) 158 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Grants obtained due Economic to the country and Trade encourage Economic Development and support and Trade Bureau of specific Related to Development Wuhu Award industries Yes No income Council economic and (Obtained in Award Technology accordance Development with the Zone national policies and regulations) Grants obtained due Wuhu to the country Municipal encourage Administratio Wuhu and support n of work Municipal specific safety to pay Related to Administr Award industries Yes No for the income ation of work (Obtained in demonstratio safety accordance n of with the occupational national health policies and regulations) Wuhu Grants economic and Economic obtained due Technologica and Trade to research l Development and Development Bureau of development, Related to Zone Wuhu Subsidy Yes No technical income Economic economic and renovation and Trade Technology and Development Development transformatio Bureau R & Zone n, etc D funding Grants Wuhu social obtained due Wuhu social insurance to the country Related to insurance Subsidy Yes No center post encourage income center subsidies and support specific 159 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 industries (Obtained in accordance with the national policies and regulations) Grants obtained due Economic to the country and Trade encourage Development and support Provincial Bureau of specific Related to innovation Wuhu Award industries Yes No income pilot Award economic and (Obtained in Technology accordance Development with the Zone national policies and regulations) Grants obtained due to the country encourage and support Patent specific Finance Related to financial Award industries Yes No Bureau income reward (Obtained in accordance with the national policies and regulations) Grants obtained due to the country Financial encourage incentives for Finance and support Related to Award Yes No high-tech Bureau specific income products industries (Obtained in accordance with the 160 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 national policies and regulations) Grants obtained due to the country 15 Wuhu encourage provincial and support treasury specific payment Finance Related to Subsidy industries Yes No center Bureau income (Obtained in provincial accordance foreign trade with the policy national policies and regulations) Grants obtained due to the country encourage Wuhu social and support security Wuhu social specific Related to center steady insurance Subsidy industries Yes No income hillock center (Obtained in subsidy accordance with the national policies and regulations) Grants obtained due Development Economic to Zone and Trade conforming Economic Development to the local and Trade Bureau of supporting Related to Development Wuhu Award Yes No policies such income Bureau economic and as local (2012-2015) Technology government’s Land use tax Development investment incentives Zone attraction policy Technology Wuhu Grants Related to Subsidy Yes No project Technology obtained due income 161 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 funds Bureau to conforming to the local supporting policies such as local government’s investment attraction policy Grants obtained due to research Bengbu Inst and National key of glass development, Related to R&D Subsidy Yes No technology technical income program design renovation and transformatio n, etc Grants Suqian obtained due Economic Suqian to and economic and conforming Technologica Technology to the local l Development supporting Related to Development Award Yes No 20,000.00 Zone policies such income Zone 2015 Administr as local Industrial ation government’s Development Committee investment Guided Fund attraction Award policy Grants State obtained due Administr to the country 15 years of ation of encourage software Taxation of and support Related to products after Shijiazhuang Subsidy specific Yes No income the first tax hi tech industries return Industrial (Obtained in Development accordance Zone with the national 162 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 policies and regulations) Grants obtained due Anhui to Jiangbei conforming Industrial to the local Concentrat supporting 90,342,000.0 Related to Tax Returns? Subsidy Yes No ion Zone policies such 0 income Administr as local ation government’s Committe e investment attraction policy Grants obtained due Suqian to Economic conforming Development to the local Zone Finance Finance supporting Related to Bureau Subsidy Yes No 230,000.00 Bureau policies such income personnel as local introduction government’s of special investment funds attraction policy Grants obtained due to conforming Jiangsu to the local Awards for Taizhou New supporting 36,497,930.5 Related to science and Enerty Award Yes No policies such 0 income technology Administrativ as local e Committee government’s investment attraction policy Grants 2015 Yangzhong obtained due achievements Related to Technology Subsidy to the country Yes No 301,701.96 transformatio assets Bureau encourage n Fund and support 163 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 specific industries (Obtained in accordance with the national policies and regulations) Grants obtained due to research Grant of Shiijiazhu and Glass-tube ang development, Related to Secondary Municipal Subsidy Yes No 5,000.00 5,000.00 technical assets Environment Finance renovation al Protection Bureau and transformatio n, etc Grants Investment obtained due and Subsidies to of “Double conforming Hundred Henan Office to the local Plan” Project of industry supporting Related to Subsidy Yes No 100,000.02 100,000.02 granted by and policies such assets the People's information as local Government government’s of Henan investment Province attraction policy Grants obtained due to research TFT glass Zhengzho u and substrate Science & development, Related to Subsidy Yes No 4,999.98 4,999.98 technology Technology technical assets R& D fund Bureau renovation and transformatio n, etc TFT glass Zhengzho u Grants Related to substrate Municipal Subsidy obtained due Yes No 333,333.36 333,333.36 assets project Finance to 164 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Subsidy Bureau conforming to the local supporting policies such as local government’s investment attraction policy Investment and Subsidies within Grants Budget for obtained due Technologica to the country l encourage Transformati and support National on Project by specific Development Related to National Subsidy industries Yes No 466,666.68 466,666.68 & Reform assets Development (Obtained in Commission and Reform accordance Commission with the and the national Ministry of policies and Industry and regulations) Information Technology Grants obtained due to conforming TFT glass Zhengzhou to the local substrate Municipal supporting Related to Subsidy Yes No 666,666.66 666,666.66 project Finance policies such assets Subsidy Bureau as local government’s investment attraction policy Special Grants Funds for Zhengzho u obtained due Related to Major Technology Subsidy to Yes No 33,333.36 33,333.36 assets Scientific and Bureau conforming Technical to the local 165 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Projects by supporting Finance policies such Bureau of as local Zhengzhou government’s City investment attraction policy Grants Financial obtained due Supports for to National Key Zhengzho u conforming Industry and Economic to the local Technical and supporting Related to Transformati Technology Subsidy Yes No 466,666.68 466,666.68 policies such assets on Projects Development as local Granted by Zone Finance government’s the Municipal Bureau investment Finance attraction Bureau policy Financial Grants Supports for obtained due Industrial to Development conforming Granted by Zhengzhou to the local the Finance Municipal supporting Related to Bureau of the Subsidy Yes No 233,333.34 233,333.34 Finance policies such assets Economic Bureau as local and government’s Technologica investment l attraction Development policy Zone Grants obtained due to Funds for conforming Independent Henan to the local Innovation of provincial Related to Subsidy supporting Yes No 199,999.98 199,999.98 Provincially finance assets policies such Supported department as local Enterprises government’s investment attraction 166 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 policy Grants obtained due to conforming Supporting Henan to the local Funds on provincial supporting Related to Subsidy Yes No 66,666.66 66,666.66 Finance finance policies such assets Discounts department as local government’s investment attraction policy Grants obtained due to Funds for conforming Education, Zhengzho u to the local Science and Municipal supporting Related to Culture Subsidy Yes No 49,999.98 49,999.98 Finance policies such assets Granted by Bureau as local the Finance government’s Bureau investment attraction policy Grants Supporting obtained due Funds for to Zhengzho u Industrial conforming Economic Structure to the local and -adjusting supporting Related to Technology Subsidy Yes No 93,333.36 93,333.36 Projects policies such assets Development Granted by as local Zone Finance the Regional government’s Bureau Finance investment Bureau attraction policy Grants Zhengzhou obtained due Industry Municipal to Related to discount and Subsidy Yes No 53,333.34 53,333.34 Finance conforming assets expenses Bureau to the local supporting 167 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 policies such as local government’s investment attraction policy Grants obtained due to conforming Henan to the local Financial provincial supporting Related to Subsidy Yes No 166,666.68 166,666.68 discount finance policies such assets department as local government’s investment attraction policy Grants obtained due to Zhengzhou conforming Industrial Economic to the local restructuring and supporting Related to project Technology Subsidy Yes No 160,000.02 160,000.02 policies such assets financial Development as local funds Zone Finance government’s Bureau investment attraction policy Special Grants Funds for obtained due High-end to Information conforming Industry Henan Office to the local Chain of industry supporting Related to Granted by Subsidy Yes No 166,666.68 166,666.68 and policies such assets thFinance information as local Bureau of the government’s Economic investment and attraction Technologica policy l Develop 168 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Grants obtained due to Zhengzho u conforming 2015 project Municipal to the local equipment Commission supporting Related to Subsidy Yes No 1,145,800.02 954,833.35 investment of industry policies such assets subsidies and as local information government’s investment attraction policy Zhengzhou City Finance Grants Bureau in obtained due Henan 2011 and to Provincial 2012 has conforming Department been the to the local of Finance acceptance of supporting Related to and Subsidy Yes No 86,666.64 the provincial policies such assets Zhengzhou industrial as local Municipal structure government’s Bureau of adjustment investment Finance project the attraction second batch policy of funds Grants obtained due to research Shijiazhuang and Technical Municipal development, Related to reconstructio Development Subsidy No No 133,333.34 133,333.34 technical assets n and Reform renovation Commission and transformatio n, etc Grants Shijiazhuang obtained due Grant of high-tech to Glass Related to Administr Subsidy conforming No No 500,000.00 500,000.00 Substrate assets ative to the local Project Committe e supporting policies such 169 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 as local government’s investment attraction policy Grants obtained due to conforming Shijiazhua ng to the local Industrial high-tech supporting Related to Development Subsidy No No 233,333.34 233,333.34 Administrativ policies such assets Fund e Committee as local government’s investment attraction policy Grants obtained due to research and Project Shijiazhuang development, Related to finance Finance Subsidy No No 15,666.66 15,666.66 technical assets discount Bureau renovation and transformatio n, etc Grants obtained due to the country encourage Industrial and support revitalization Shijiazhuang specific and Related to Finance Subsidy industries No No 3,257,666.66 3,257,666.66 technological assets Bureau (Obtained in transformatio accordance n project with the national policies and regulations) 2013 Shijiazhuang Grants Related to Production Municipal Subsidy obtained due No No 166,666.66 166,666.66 assets line Development to 170 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 technology and deform conforming research and Commission to the local development supporting granted funds policies such as local government’s investment attraction policy Grants obtained due to research Technology and Shiijiazhuang reconstructio development, Related to Finance Subsidy No No 1,078,000.00 411,333.34 n Special technical assets Bureau funds renovation and transformatio n, etc Grants obtained due to conforming Strategic Shijiazhuang to the local emerging Municipal supporting Related to industries of Development Subsidy No No 1,000,000.00 1,000,000.00 policies such assets special grant and deform as local funds Commission government’s investment attraction policy Grants obtained due to the country encourage and support Glass Shijiazhuang specific Related to substrate Finance Subsidy No No 213,333.34 industries assets project grants Bureau (Obtained in accordance with the national policies and 171 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 regulations) Grants obtained due to conforming Shijiazhuang to the local Product line high-tech supporting Related to Award No No 753,471.70 grants Administrativ policies such assets e Committee as local government’s investment attraction policy Grants obtained due Wuhu to Economic conforming and Technolo to the local Grant of gical supporting Related to Government Yes No 1,122,300.00 1,122,300.00 Development policies such assets Infrastructure Z one as local Finance government’s Bureau investment attraction policy Grants obtained due to the country Grant of encourage Industry and support Wuhu Revitalizatio specific Development Related to n and industries Yes No 116,666.64 116,666.64 & Reform assets Technology (Obtained in Commission Reconstructio accordance n Project with the national policies and regulations) Wuhu Economic Grants economic and and Trade obtained due Related to Technologica Development Award to the country Yes No 114,800.00 income l Bureau encourage Development and support 172 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Zone specific Economic industries and Trade (Obtained in Development accordance Bureau with the export national incremental policies and Award regulations) Grants obtained due Economic to and Trade conforming Development Economic to the local Bureau of the and Trade supporting 13,312,000.0 Related to Development Development Award Yes No policies such 0 income Zone Bureau as local (2012-2016) government’s income tax investment rebate attraction policy Grants obtained due to the country The center of encourage the Party and support Organization specific Department Finance Related to Subsidy industries Yes No 500,000.00 allocation of Bureau income (Obtained in the third accordance batch of with the funding national policies and regulations) 65,632,104.2 102,724,666. Total -- -- -- -- -- -- 4 77 52.Non-Operation expense In RMB Amount of current period Amount of previous period The amount of non-operating Items gains & lossed 173 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Total of Non-current assets 30,537.14 4,430.74 30,537.14 Disposition Including:Disposal of fixed 30,537.14 4,430.74 30,537.14 assets Other 47,405.21 8,058.60 47,405.21 Late fee 372,229.08 372,229.08 Total 450,171.43 12,489.34 53. Income tax expense (1) Lists of income tax expense In RMB Items Amount of current period Amount of previous period Income tax at current period 168,815,696.55 96,541,646.19 Deferred income tax 10,614,974.68 -6,258,044.68 Total 179,430,671.23 90,283,601.51 (2)Accounting profit and income tax expense adjustment process In RMB Items Amount of current period Total profit 875,260,074.26 Income tax expense at statutory / applicable tax rates 131,289,011.14 Effect of different tax rates applicable to subsidiaries 5,128,640.60 Income tax adjustments on prior periods -455,067.73 Effect of non-taxable income 3,468,853.45 Affect the use of deferred tax assets early unconfirmed -299,981.46 deductible losses The current period does not affect the deferred tax assets 40,299,215.23 recognized deductible temporary differences or deductible loss Income tax expense 179,430,671.23 54. Supplementary information to cash flow statement (1) Other cash received relevant to operating activities In RMB 174 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Items Amount of current period Amount of previous period Interest income 46,287,121.18 834,422.60 Government subsidy 151,920,830.50 37,959,400.00 Deposits income 7,195,087.47 87,399,022.47 Fine income 149,451.17 Current account income 3,450,177.56 Other 3,992.00 30,339,364.32 Petty cash Total 205,407,031.15 160,131,838.12 (2)Other cash paid related to operating activities In RMB Items Amount of current period Amount of previous period Consultation Services fee 11,033,384.47 32,247,294.56 Business expenses 2,414,621.26 2,127,609.09 Current account 18,284,472.99 91,000,000.00 Labour insurance expenses 1,467,300.61 1,782,256.94 Advertising expenses 3,035,900.89 9,282,425.84 Water and electricity expense 8,040,238.09 18,775,746.81 Travel expenses 3,162,043.28 4,427,379.48 Petty cash 1,202,892.54 549,954.75 Office expenses 19,931,417.84 16,145,841.08 Deposit 703,722,436.70 2,900,000.00 Meeting expenses 664,731.28 82,754.80 Communication fees 181,311.02 625,548.95 Transportation Fees 1,500,571.81 10,179,140.76 R &D 23,904,716.85 12,716,824.11 Auto Fees 1,742,196.91 136,936.54 Other 7,810,897.42 9,266,581.65 Total 808,099,133.96 212,246,295.36 (3)Other Cash received related to investment activities In RMB Items Amount of current period Amount of previous period 175 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Investment 6,120,000.00 The post-money balance of the cash and cash equivalents of Jiangsu Jixing’s acquisition date which deducted the currency paid for the acquisition. Total 190,962.49 6,120,000.00 (4)Other Cash payable related to investment activities In RMB Items Amount of current period Amount of previous period Investment Total 50,000,000.00 (5)Other Cash received related to Financing activities In RMB Items Amount of current period Amount of previous period Interest income 131,901,557.06 82,859,831.69 Finance lease 103,800,000.00 1,237,280,000.00 Bill finance 58,549,109.63 CDB financing 500,000,000.00 Total 235,701,557.06 1,878,688,941.32 (6)Other Cash payable related to Financing activities In RMB Items Amount of current period Amount of previous period Bank charges 1,926,814.75 702,462.93 cash deposit 953,930.20 Bill financing 77,900,000.00 Finance lease 419,037,111.72 16,160,141.67 Financing service 1,130,000.00 Total 449,714,523.33 94,762,604.60 55. Supplement Information for cash flow statement (1)Supplement Information for cash flow statement 176 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 In RMB Supplement Information Amount of current period Amount of previous period I. Adjusting net profit to cash flow from -- -- operating activities Net profit 695,829,403.03 570,324,423.85 Add: Impairment loss provision of assets 208,238.02 3,554,932.15 Depreciation of fixed assets, oil and gas 326,123,627.68 228,573,241.42 assets and consumable biological assets Amortization of intangible assets 8,758,416.76 7,533,311.24 Amortization of long-term deferred expenses 4,057,945.75 3,393,264.63 Loss on disposals of fixed assets, intangible assets and other long-term assets ("-" for 30,537.14 4,430.74 gains) Financial expenses 364,241,342.58 104,180,049.74 Investment loss -6,676,924.21 -81,758.31 Decrease of deferred income tax assets 10,409,928.29 -6,258,044.68 Deferred tax liabilities increase -11,805.12 Decrease of inventory -981,985,297.83 -41,358,720.57 Decease of operating receivables -2,509,332,255.72 -548,903,925.81 Increased of operating Payable 673,985,156.66 960,147,738.54 Net cash flows arising from operating -1,414,361,686.97 1,281,108,942.94 activities 2.Significant investment and financing -- -- activities that without cash flows: Fixed assets acquired under finance leases 110,928,174.00 1,652,037,077.85 3.Changes Balance of cash and cash -- -- equivalents Ending balance of cash 21,925,674,899.39 15,739,687,032.14 Less: Beginning balance of cash 25,037,335,091.60 11,964,769,404.73 Net increase of cash and cash equivalents -3,111,660,192.21 3,774,917,627.41 (2) Net Cash paid of obtaining the subsidiary In RMB Amount 177 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Cash or Cash Equivalent of Enterprise consolidation that Occurred 57,243,065.638,000,000.00 in the Current Period Paid in the Current Period Including: -- Mingshuo(Beijing)Electronic Technology Co., Ltd. 57,142,857.00 Chuanglian Huatai(Hongkong)Co., Ltd. Dongxu(xuhua) International equipment co. LTD 100,208.63 Less:Cash or Cash Equivalent Owned by Subsidiary on the 54,547,033.56 Purchasing Date Including: -- Ming shuo(Beijing) electronics Technology Co., Ltd. 54,255,862.44 Chuang lian hua tai(hongkong) Co., Ltd. 108,530.20 Dongxu(xuhua) International equipment co. LTD 182,640.92 Including: -- Received Net Cash Paid by Subsidiary 2,696,032.07 (3)Composition of cash and cash equivalents In RMB Items Balance in year-end Balance in year-Beginning I. cash 21,925,674,899.39 25,037,335,091.60 Including: value-cash 425,749.93 187,232.52 Bank deposit on demand 21,914,145,210.81 25,009,252,814.98 Other monetary funds on demand 11,103,938.65 27,895,044.10 III. Balance of cash and cash equivalents at 21,925,674,899.39 25,037,335,091.60 the period end 56. The assets with the ownership or use right restricted In RMB Items Book value in year-end Reason Monetary funds 943,221,108.77 Pledge of collateral Fixed assets 7,559,438,628.83 Pledge loans Intangible assets 248,103,470.07 Pledge loans Real estate investment 58,974,678.04 Pledge loans Construction in process 751,214,924.79 Pledge loans Total 9,560,952,810.50 -- 178 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 57. Foreign currency monetary items (1) Foreign currency monetary items In RMB Closing foreign currency Closing convert to RMB Items Exchange rate balance balance Including:USD 2,906,419.39 6.7744 19,689,247.52 Euro 135,576.50 7.7496 1,050,663.64 HKD 4,697.04 0.8679 4,076.56 JPY 4,110,917,807.00 0.0605 248,710,527.32 GBP 2,277.81 8.8144 20,077.53 Including:USD 18,210,668.16 6.7744 123,366,350.38 JPY 1,705,632,320.16 0.0605 103,190,755.37 Account receivable Including:USD 10,593,354.68 6.7744 71,763,621.94 Short-term loan Including:USD 22,023,777.99 6.7744 149,197,881.62 VIII.Changes of consolidation scope 1.Enterprise consolidation not under the same control (1)Enterprise consolidation not under the same control in reporting period In RMB Income of Net Profit of Determinatio Acquire Acquire from Ratio of Time-point of Obtained Method of n Basis on from the the Name of Obtained Purchasing Obtained Cost of Obtained the Purchasing Purchasing Acquiree Equity Date Equity Equity Equity Purchasing Date to the Date to the (100%) Date End of the End of the Period Period Acquired the Mingshuo(Be control right ijing)Electron 57,142,857.0 and the ic May 31,2017 36.36% Purchase May 31,2017 94,042.74 -375,927.67 0 business Technology registration Co., Ltd. has been 179 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 changed. Chuanglian Huatai January January Acquired the 386,643,953. 100.00% Purchase 5,185,962.98 (Hongkon 1,2017 1,2017 control right 88 g)Co., Ltd. Tianlong Huatai January January Acquired the Industry(Hon 100.00% Purchase 1,2017 1,2017 control right gkong) Co., Ltd. Dongxu(Xuh ua) January January Acquired the International 100,208.63 55.00% Purchase -320,045.40 1,2017 1,2017 control right Equipment Co., Ltd. (2) Consolidation Cost and Goodwill In RMB Mingshuo(Beijing)Electronic Chuanglian Huatai(Hongkong) Dongxu(Xuhua) International Combined cost Technology Co., Ltd. Co., Ltd Equitment Co., Ltd. --Cash 57,142,857.00 100,208.63 Total Consolidation cost 57,142,857.00 100,208.63 Less:Reduction: Obtained Definable Net Assets Fair 23,823,179.29 -722,450.89 100,208.63 Proportion Goodwill/ The Consolidation Cost is Less Than the Obtained 33,319,677.71 722,450.89 Definable Net Assets Fair Proportion (3) The identifiable assets and liabilities of acquiree at purchase date In RMB Mingshuo(Beijing)Electronic Chuanglian Huatai(Hongkong)Co., Dongxu(Xuhua) International Technology Co., Ltd. Ltd Equitment Co., Ltd. Fair value on Book value on Fair value on Book value on Fair value on Book value on purchase date purchase date purchase date purchase date purchase date purchase date Monetary fund 54,255,862.44 54,255,862.44 108,530.20 108,530.20 182,640.92 182,640.92 Account 3,237,093.72 3,237,093.72 33,330,248.60 33,330,248.60 receivable 180 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Inventories 3,410,416.00 3,410,416.00 Fixed assets 1,760,577.41 1,760,577.41 Prepayments 337,280.70 337,280.70 Other receivable 6,017,888.47 6,017,888.47 4,294.43 4,294.43 Long-term equity 3,855,435.58 3,855,435.58 Investment Long-term Deferred 11,000.00 11,000.00 expenses Deferred Income 16,381.78 16,381.78 tax assets Other non-current 2,200.00 2,200.00 assets Borrowing 33,328,948.60 33,328,948.60 Account payable 2,337,681.38 2,337,681.38 690,688.59 690,688.59 Advance 202,015.40 202,015.40 Payments Employees’ wage 332,415.27 332,415.27 payable Tax payable 59,542.45 59,542.45 Other account 2,647,520.16 2,647,520.16 141,592.50 141,592.50 4,737.84 4,737.84 payable Other current 1,811,333.04 1,811,333.04 liabilities Net assets 65,513,628.40 65,513,628.40 -722,450.89 -722,450.89 182,197.51 182,197.51 Less:Minority shareholders 41,690,449.11 41,690,449.11 81,988.88 81,988.88 equity Acquire net assets 23,823,179.29 23,823,179.29 -722,450.89 -722,450.89 100,208.63 100,208.63 2.Other reasons for the merger scope change Other causes of the consolidation scope changes (e.g., the new subsidiary, liquidation subsidiary, etc.) and its related conditions: On April 26, 2017, Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. and Changsha Shunyan Management Firm (limited partnership) and Liu Xuehua jointly set up Hunan Dongxu Wei Sheng Intelligent Technology Co., Ltd,with the registered capital of RMB 50 million, of which Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd subscribed RMB 25.5 million , Changsha Shunyan Administration Enterprise (LP) Subscribed RMB 17 million and Liu Xuehua subscribed RMB 7.5 million, and the paid-up capital was RMB 50 million; On April 26, 2017, the subsidiary-Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd and Liu 181 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Haijun and Liao Shaoye jointly set up Hunan Dongxu Deilai Electronic Technology Co., Ltd, With the Registered capital of RMB 50 million, of which Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd.subscribed RMB 25.5 million, Liu Haijun Subscribed RMB 17 million and Liao Shaoye subscribed RMB 7.5 million, and the paid-up capital was RMB 36.8883815 million; On April 18, 2017, the subsidiary- Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd, Changsha Wenchao Administration Enterprise (LP) and Ning Yongchao jointly set up Wuhu Dongxu Weiyu Medical apparatus Technology Co., ltd,the Registered capital of RMB 100 million, of which Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd subscribed RMB 51 million, Changsha Wenchao Administration Enterprise (LP) subscribed RMB 34 million and Ning Yongchao subscribed RMB 15 million, and the paid-up capital was RMB 100 million; On April 26, 2017, Wuhu Dongxu Weiyu Medical apparatus Technology Co., ltd sep up wholl owned subsidiary Hunan Dongxu Weigao Medical apparatus Technology Co., ltd, The Registered capital of RMB 20 million, and the paid-up capital was RMB 20 million. , Optoelectronic Equipment Technology Co., Ltd and Liu Haijun and Liao Shaoye jointly set up Hunan Dongxu Deilai Electronic Technology Co., Ltd; On May 8, 2017, the subsidiary-Shenzhen Xuhui Investment Holding Co., Ltd. and Taizhou Dongxu Graphene Industry Investment Fund Management Center (limited partnership) acquired Mingshuo (Beijing) Electronic Technology Co., Ltd and part of the equity of its wholly-owned subsidiary-Huzhou Mingshuo Optoelectronics Technology Co., Ltd. with the registered capital of Ming Shuo (Beijing) Electronic Technology Co., Ltd was RMB 78.571429, and the paid-up capital was RMB 44.255429. Thereinto, Shenzhen Xu Hui Investment Holdings Co.,Ltd contributed funds of RMB 28.571429,Taizhou Dongxu Graphene Industry Investment Fund Management Center (limited partnership) contributed funds of 11.5 million, Qian Xinming contributed funds of RMB 3.85 million, Jin Xiuzhen contributed funds of RMB 2.04435 million, Chen Wei contributed funds of RMB 7.5922 million, Wang Yingchao contributed funds of RMB 2.86055 million, Beijing Heyiyou Investment Partnership contributed funds of RMB 10.89935 million , Jiang Wei contributed funds of RMB 1.43605 million, Li Honglei contributed funds of RMB 5.63255 million and Zhu Lei contributed fund of 4.18495 million. On June 6, 2017, Wuhu Dongxu Weiyu Medical apparatus Technology Co., ltd, set up a wholly-owned subsidiary-Shandong Qi Hui Medical apparatus Technology Co., ltd, with the registered capital of RMB 20 million and the paid-up capital of RMB 5 million. On June 29, 2017, Wuhu Dongxu Weiyu Medical apparatus Technology Co., ltd, set up a wholly-owned subsidiary-Guangdong Dongxu Weiyu Medical apparatus Technology Co., ltd, with the registered capital of RMB 20 million and the paid-up capital of RMB 0.00. On April 13, 2017, the subsidiary-Dongxu Construction Group Co., Ltd acquired 100.00% stake of Hebei Xubao Construction and Installation Co., Ltd-which is a wholly-owned subsidiary of the company, thus Hebei Xubao Construction and Installation Co., Ltd has become the sub-subsidiary of the company. IX. Equity in other entities 1. Equity in subsidiary (1) The structure of the enterprise group Name of Main Places of Registration Nature of Shareholding Ratio (%) Obtaining Subsidiary Operation Place Business direct indirect Method Shijiazhuang 9 Huanghe Road, Shijiazhuang Manufacturing 81.26% Establish Colour Bulb Co., Shijiazhuang 182 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Ltd. High-tech Industrial Development Area, Shijiazhuang, Hebei Province Room 302, A floo Wuhu Dongxu r, Optoelectronic Management Co Equipment Wuhu Manufacturing 95.00% Establish mmittee of Jiangb Technology Co., ei Industry Zone, Ltd. Anhui Prov No.36, Daowei 2 Road, Wanchun Wuhu Dongxu Street , Wuhu Optoelectronic Wuhu Economy Manufacturing 100.00% Establish Technology Co., Technology Ltd. Development Zone 1/F, No.2 Business tower, Huazhong Wuhan Dongxu Shuguang Optoelectronic Wuhan Software park, Manufacturing 62.50% Establish Technology Co., No.1Guanshan Ltd. Road,Donghu Development Zone, Wuhan Building 15, No. 21, Ring Road 18 Dongxu 1 West Third Sect Construction & Non control Construction Sichuan 100.00% ion,Jinniu District installation combination Group Co., Ltd. , Chengdu Room C17, Building 1, Beijing Xufeng No.10, Xinghuo Real estate Real Estate Co., Beijing Road, 100.00% Establish Development Ltd. Technology City, Fengtai District, Beijing Dongxu Room 1517, Kunshan Manufacturing 80.00% Establish (Kunshan) Building 1 183 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Display Material (International Co., Ltd. Building), No. 167, Qianjin Middle Road, Suzhou City, Jiangsu Province 66,No 3 Zhengzhou Xufei Jingnan Road, Optoelectronic Econornic & Non control Zhengzhou Manufacturing 100.00% Technology Co., Technology combination Ltd. Development Zone, Zhengzhou No.69,Tianshan Shijiazhuang Street, Xuxin High-tech Non control Optoelectronic Shijiazhuang Manufacturing 100.00% Area, combination Technology Shijiazhuang, Co.,Ltd. Hebei N0.1198, 689 Beijing Xutan Builing, No.5, New Material Zhongguan Technology Beijing 70.00% Establish Technology Co., Village South Service Ltd. Street, Haiding District, Beijing New Material Jiangsu Jixing Industry Zone, Non control New Material Jiangsu Manufacturing 50.50% Youfang Town, combination Co., Ltd. Yangzhong City 1201-E18(Area)1 2/F,No.1, 6-3 Beijing Dongxu Building, Huaqing Investment Beijng Autornobile 70.00% Establish Investment Co., Management Museum East Ltd. Road, Fengtai District, Beijing (072) Room 109,Supervision Fuzhou Dongxu Building, Optoelectronic Fuzhou Processing trade Manufacturing 100.00% Establish Technology Co., Free zone, Ltd. Fuzhou, Fujian.(No.9, 184 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Xinjiang Road, Xincuo Town, Fuqing City) 9 Huanghe Road, Shijiazhuang Shijiazhuang Dongxu High-tech Optoelectronic Industrial Shijiazhuang Manufacturing 95.00% Establish Equipment Development Technology Co., Area, Ltd. Shijiazhuang, Hebei Province Room 267, 2/F, No. 2 ,Building, Beijing Dongxu No.9 Haiying Investment Beijing Road, Investment 100.00% Establish Development Co., Technology City, Ltd. Fengtai District, Beijing. 9 Huanghe Road, Shijiazhuang Hebei Xubao High-tech Construction Industrial Onstruction & Installation Shijiazhuang 100.00% Establish Development installation Engineering Co., Area, Ltd. Shijiazhuang, Hebei Province Room 311-D, B Building, Jiangbei Industrial Wuhu Ruiyi Anhui Concentration Labor dispatch 100.00% Establish Service Co., Ltd. Zone Administrative Committee, Anhui Room 2369, No.888, CBD, Jiangsu Dongxu Renmin Road, Yitai Intelligent Suqian Economic Manufacturing 100.00% Establish Equipment Co., Technology Ltd. Development Zone, Suqian 185 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Room 02, 2/F,No.3 Shanghai Building, Tanyuan Huigu No.28,, Non control New Material Shanghai Jiangcchuan Manufacturing 50.50% combination Technology Co., East Road, Ltd. Minhang District ,Shang hai Room 201, A unit, No.1 Shenzhen Xuhui Qianwan Road, Investment Co., Shenzhen Qianhai Investnebt 100.00% Establish Ltd. Shengang Cioeration Area, Shenzhen. 297, Room Fuzhou Xufu 109,Supervision Optoelectronic Building, Fuzhou Manufacturing 16.67% 83.33% Establish Technology Co., Processing trade Ltd. Free zone, Fuzhou, Fujian 230, Room Fuzhou Dongxu 109,Supervision Investment Building, Fuzhou Investment 100.00% Establish Development Processing trade Co., Ltd. Free zone, Fuzhou, Fujian Dongxu Taizhou Room 205, 2/F, 7 Graphene Building , Industry No.818 , Investment Investment Fund Taizhou Longfeng Road, 25.00% Establish Management Management New Energy Center (limited Industry Zone , partnership) Taizhou A, C Building, Taizhou Xiwang No.29-1 Shiji New Enerty Taizhou Road, Jiulong Manufacturing 100.00% Establish Technology Co., Town, Hailing Ltd. District , Taizhou Xiamen Xuqi D,3 unit, D Investment Xiamen 100.00% Establish Investment Building, Xiamen Management 186 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Management Co., Internationa Ltd. Shipping Center, No.97 Xiangyu Road, Fujian) free trade zone (FTZ) in Xiamen area, China No.1509, A unit, Shenzhen Spacefight Xinyingtong Building Shennan Non control Shenzhen Supply chain 70.00% Technology Co., Road, Futian combination Ltd. District ,Shenzhe n. Xuyou Electronic Material No. 61 Xinmei Technology Wuxi Road, Xinwu Manufacturing 51.00% Establish (Wuxi) Co., District, Wuxi Ltd. 1/F, TechnologyInn ovation Center , Fuzhou Xuyou Rongqiao Electronic Enconomic & Material Fuzhou Manufacturing 100.00% Establish Technology Technology Co., Development Ltd. Zone, No.36 Xihuan North Road, Shizhu Street, Fuqing Room 605, Sichuan Machinery DongxuRuiyi Building, No.14 Envinonment Chengdu 100.00% Establish Environment First Huan Road, control Co., Ltd. Jinjiang District Chendu Room 606 Sichuan Dongxu Machinery Ruiyi Survey Building, No.14 Construction & Chengdu 100.00% Establish and Design Co. First Huan Road, installation Ltd. Jinjiang District Chendu 187 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Room 607 Machinery Sichuan Building, No.14 DongxuRuiyi Chengdu rade 100.00% Establish First Huan Road, Trade Co., Ltd. Jinjiang District Chendu Room 608 Sichuan Dongxu Machinery Technology Ruiyi Enterprise Building, No.14 Chengdu consultation 100.00% Establish Management First Huan Road, Service Co., Ltd. Jinjiang District Chendu No.846.Tianfu Sichuan Dongxu South Road Proserity Huayang Street, Construction Construction Chengdu 70.00% Establish Tianfu District, Installation Development Chengdu, Co., Ltd. Sichuan Room 201, A Building, No. Shenzhen Qianhai Bay 1 Xngxinda Non control Shenzhen Road, Supply chain 100.00% Technology Co., combination Shenzhen-Hongk Ltd. ang Cooperation Area, Shenzhen Romm Chuanglian C,21/F.,Central Huatai 88,88 Des Vorux Non control Hongkong Supply chain 100.00% (Hongkong) Road combination Co., Ltd. Central,Hong Kong Romm Tianlong Huatai C,21/F.,Central Industry 88,88 Des Vorux Non control Hongkong Supply chain 100.00% (Hongkong) Road combination Co., Ltd. Central,Hong Kong Dongxu(Xuhua) International Zeil 79, Frankfurt Non control Germany Supply chain 100.00% Equipment Co., am Main combination Ltd. Hunan Dongxu Changsha 201-2,2 Building Supply chain 100.00% Establish 188 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Weisheng g, No.1 Tongxin intelligent Road, technology Co., Wangcheng Ltd. Economic Development Zone, Changsha. 01-2,2 Building g, No.1 Tongxin Hunan Dongxu Road, Delai Electronic Changsha Wangcheng Supply chain 100.00% Establish Technology Co., Economic Ltd. Development Zone, Changsha. Room 307-1, B Wuhu Dongxu Building, CMC Weiyu Medical of Jiangbei Instrument Wuhu Industrial 100.00% Establish Technology Co., Concentration Ltd. Area, Wuhu, Anhui Room 1313, 13/F, 4 Building, 2 Hunan Dongxu District, Jinqiao Weigao Medical Market, Purui Instrument Changsha west Road, Supply chain 100.00% Establish Technology Co., Wangcheng Ltd. Economic Development Zone, Changsha. Room B288, 2/F,Beijing Mingshuo Chenmao (Beijing) Hongxiang Non control Electronic Beijing Manufacturing 51.00% Hotel, No.15 combination Technology Co., Longxiang Ltd. Road, Haidian District, Beijing Huzhou No.800, Mingshuo Rujiadian Road, Non control Optoelectronic Huzhou Manufacturing 100.00% Lianshi Town, combination Technology Co., Huzhou Ltd. 189 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Room 902, 9/F, International Shangdong Wealth Center, QihuiMedical Jinan No.156, Jingqi Supply chain 100.00% Establish Technology Co., Road, Shizhong Ltd. District, Jinan, Shandong Room B, 104 Unit, No.Building, Guangdong Tianfu Dongxu Weiyu Technology Medical Foshan Center, Xianan Supply chain 100.00% Establish Instrument Co., Ershang Yuanxi Ltd. Industry Area, Guicheng Street, Nanhai District, Foshan Notes: holding proportion in subsidiary different from voting proportion: Other notes: According to the signed agreement, Taizhou Dongxu Graphene Industry Investment Fund Management Center (limited partnership) sets up the investment decision committee as the highest decision-making organ, which is responsible for making decisions on project investment, disinvestment and other matters. The investment decision committee is made up of five committee members. Wherein, the general partner Beijing Dongxu Huaqing Investment Co., Ltd. appoints 2 members, the limited partner Dongxu Photo-electricity Technology Co., Ltd. appoints 1 member and the other 2 members are appointed through social recruiting. The limited partner Taizhou Jintaiyang Energy Co., Ltd. doesn’t appoint members. And the chairman of committee shall be assumed by the representative of general partner. The decisions will be valid with the consent of the majority of committee members (4 votes and above), and the chairman of investment committee has the one-vote veto. As the executive partner, the general partner Beijing Dongxu Huaqing Investment Co., ltd. assumes unlimited, joint liabilities for the limited partnership’s debts. As the posterity limited partner, Dongxu Photo-electricity Technology Co., Ltd. bears responsibilities for the limited partnership’s debts with its subscribed investment. And Taizhou Jintaiyang Energy Co., Ltd., as the priority limited partner, assumes responsibilities for the limited partnership’s debts with its subscribed investment. (2) Significant not wholly owned subsidiary In RMB Profit or Loss Owned by Dividends Distributed to Shareholding Ratio of Equity Balance of the the Minority the Minority Name of Subsidiary Minority Shareholders Minority Shareholders in Shareholders in the Shareholders in the (%) the End of the Period Current Period Current Period Wuhu Dongxu Optoelectronic 5.00% 40,110,808.85 30,000,000.00 241,895,271.51 Equipment Technology 190 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Co., Ltd. Jiangsu Jixing New 49.50% 10,035,755.51 236,242,378.74 Material Co., Ltd. Xuyou Electronic Material Technology 49.00% 2,876,620.75 359,413,409.33 (Wuxi )Co., Ltd. Shanghai Tanyuan Huigu New Material 49.50% 10,269,237.44 51,709,582.00 Technology Co., Ltd. Dongxu(Kunshan) Display Material Co., 20.00% -72,066.10 99,643,579.92 Ltd. (3) The main financial information of significant not wholly owned subsidiary In RMB Year-end balance Year-beginning balance Non Current Non Non Current Non Name Current Total Total Current Total Total current Liabilitie current current Liabilitie current assets assets liabilities assets assets liabilities assets s liabilities assets s liabilities Wuhu Dongxu Optoelec tronic 8,643,58 301,147, 8,944,73 5,697,30 420,528, 6,117,83 8,143,19 239,681, 8,382,87 5,986,43 410,000, 6,396,43 Equipme 6,658.24 237.44 3,895.68 5,794.96 756.61 4,551.57 7,927.02 494.27 9,421.29 3,459.96 000.00 3,459.96 nt Technolo gy Co., Ltd. Jiangsu Jixing 289,579, 330,237, 619,817, 136,468, 6,091,55 142,560, 267,316, 347,522, 614,839, 151,462, 6,393,25 157,856, New 766.77 596.66 363.43 478.93 3.72 032.65 881.20 378.96 260.16 927.25 5.68 182.93 Material Co., Ltd. Xuyou Electroni c 318,428, 425,590, 744,019, 4,098,59 4,098,59 715,998, 19,476,2 735,474, 1,449,98 1,449,98 Material 0.00 029.81 986.80 016.61 5.53 5.53 252.12 29.51 481.63 3.38 3.38 Technolo gy (Wuxi 191 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 )Co., Ltd. Shanghai Tanyua n Huigu New Materia 27,880,6 78,920,0 106,800, 1,935,48 401,452. 2,336,93 23,077,9 76,269,8 99,347,7 15,216,6 413,257. 15,629,9 l 95.96 39.01 734.97 0.27 67 2.94 26.17 55.09 81.26 55.67 79 13.46 Technol ogy Co., Ltd. Dongxu (Kunsh an) 264,352, 261,676, 526,028, 27,810,9 27,810,9 380,566, 153,271, 533,837, 35,259,3 35,259,3 0.00 0.00 Display 678.60 154.09 832.69 33.07 33.07 410.60 205.53 616.13 86.00 86.00 Material Co., Ltd. In RMB Amount of current period Amount of previous period Cash flows Cash flows Total Total Name Business from Business from Net profit Comprehensi Net profit Comprehensi income operating income operating ve income ve income activities activities Wuhu Dongxu Optoelectroni 2,830,168,46 755,485,990. 755,484,621. -701,105,382. 1,423,880,48 479,358,368. 479,358,368. 1,081,984,21 c Equipment 6.16 77 84 38 4.78 65 65 2.37 Technology Co., Ltd. Jiangsu Jixing New 223,319,885. 20,274,253.5 20,274,253.5 223,976,847. 16,278,201.0 16,278,201.0 2,406,278.55 6,352,806.87 Material Co., 36 5 5 42 3 3 Ltd. Xuyou Electronic Material -1,414,361,68 5,895,922.83 5,895,922.83 Technology 7.00 (Wuxi ) Co., Ltd. Shanghai 194,829.10 20,745,934.2 20,745,934.2 -6,548,738.14 6,157.72 -1,106,271.37 -1,106,271.37 -816,509.12 Tanyuan 192 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Huigu New 3 3 Material Technology Co., Ltd. Dongxu (Kunshan) 337,152,293. Display 0.00 -360,330.51 -360,330.51 -1,811,972.93 -1,811,972.93 -7,143,942.55 10 Material Co., Ltd. 2. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise Proportion Accounting treatment of the Main operating investment of Name Registration place Business nature place Directly Indirectly joint venture or associated enterprise 2814-2816, Office Building (A),Letai Center, Tunghsu Group No.39. Equity method Hebei Finance services 40.00% Finance Co., Ltd. Zhongshan East accounting Road, Shijiazhuang, Hebei (2) Main financial information of significant associated enterprise In RMB Closing balance/This period Opening balance/Last period Current assets 4,222,854,038.02 Non-current assets 4,951,451,490.74 Total of assets 9,174,305,528.76 Current liabilities 8,213,561,979.32 Total liabilities 8,213,561,979.32 Attributable to shareholders of the parent 960,743,549.44 company Share of net assets calculated by stake 384,297,419.78 Book value of equity investment in 384,297,419.78 193 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 associates Business income 75,053,678.73 Net profit -39,256,450.56 Total comprehensive income -39,256,450.56 (3)Summary financial information of insignificant joint venture or associated enterprise In RMB Closing balance/This period Opening balance/Last period Joint venture: -- -- Total investment book value 93,350,891.09 72,354,803.70 The total number of shares in each of the -- -- following shares --Net 196,087.39 81,758.31 -- Total comprehensive income 196,087.39 81,758.31 Associated enterprise: 93,350,891.09 72,354,803.70 The total number of shares in each of the -- -- following shares X. The risk related financial instruments The Company faces a variety of financial risks in the course of operation: credit risk, market risk and liquidity risk. The Business Management Department of the Company management is fully responsible for the determination of risk management objectives and policies, and assumes the ultimate responsibility for the risk management objectives and policies. The Business Management Department of the Company reviews the effectiveness of the performed programs as well as the rationality of risk management objectives and policies through monthly work statement submitted by the Functional Department. The objective of the Company’s engagement in risk management is to obtain a proper balance between the risks and benefits, reduce the risks’ negative impact on the Company's operating performance to the lowest level and maximize the interests of shareholders and other equity investors. Based on the risk management objectives, the basic strategy of the Company's risk management is to identify and analyze the risks faced by the Company, establish appropriate baseline of risk tolerance, conduct risk management as well as timely and reliably supervise various risks to control the risks within a limited range. 1. Credit Risk Credit risk refers to the financial loss risk of the other Party if one Party of financial instruments fails to perform its obligations. The Company mainly faces customer credit risk caused by the credit sale. The Company would make an evaluation on new customers’ credit risk before signing new contracts, which includes external credit rating and bank reference letter (when available) under certain circumstances. The Company sets quota on credit sale for each customer and such quota is the maximum amount without additional approvals. The company ensures that the company's overall credit risk is within a manageable range through quarterly audits of existing customer credit ratings and monthly audits of accounts receivable aging analysis. In monitoring the customer's credit risk, according to the customer's credit characteristics of its grouping. Customers who are rated as "high risk" will be placed on the restricted 194 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 customer list and the company will be able to credit it in the next period, subject to additional approval, otherwise it must be required to pay the corresponding payment in advance. 2. Market Risk The market risk of financial instruments refers to the risk that the fair value or future cash flow of the financial instruments would fluctuate due to the market price changes, which includes interest rate risk ,foreign exchange risk and other price risks. (1) Interest Rate Risk Interest rate risk refers to the risk that the fair value or future cash flow of the financial instruments would fluctuate due to the market price changes. The interest rate risk faced by the Company mainly comes from short-term bank loans. The Company meets various short-term financing needs through establishing good bank-enterprise relationship as well as reasonably designing credit line, credit type and credit term to guarantee the sufficient bank credit line. In addition, the Company also reasonably reduces the fluctuation risk of interest rate by shortening the term of single loan and performing specially agreed prepayment term. (2) Foreign Exchange Risk Foreign exchange risk refers to the risk that the fair value or future cash flow of the financial instruments would fluctuate due to the market price changes. The Company would match the foreign currency incomes and expenses as far as possible to reduce the foreign exchange risk. On account of the small proportion of foreign financial assets and liabilities in the total assets, there’s no forward foreign exchange contract or currency swap contract signed by the Company in 2016 and January –June 2017. The foreign exchange risk faced by the Company mainly comes from the financial assets and financial liabilities priced by US dollar, Yen and Euro. The exchanged RMB amounts of foreign financial assets and foreign financial liabilities are presented as below: Items 2017.06.30 Exchange rate 2017.6.30 balance of foreign currency balance of RMB Conversion Monetary fund Including:USD 2,906,419.39 6.7744 19,689,247.52 Euro 135,576.50 7.7496 1,050,663.64 HKD 4,697.04 0.8679 4,076.56 JPY 4,110,917,807.00 0.0605 248,710,527.32 GBP 2,277.81 8.8144 20,077.53 Account receivable Including:USD 18,210,668.16 6.7744 123,366,350.38 JPY 1,705,632,320.16 0.0605 103,190,755.37 Account payable Including: JPY USD 10,593,354.68 6.7744 71,763,621.94 Euro Long-term loans Including:USD 195 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Short-term loan Including:USD 22,023,777.99 6.7744 149,197,881.62 XI. Related party and related party transactions 1. Parent company information of the enterprise The parent company The parent company Registered Name Registered address Nature of the Company's of the Company’s capital shareholding ratio vote ratio No.369, Zhujiang Investment , Tunghsu Group Road, High-tech production and R & RMB16.8. billion 11.32% 18.14% zone, Shijiazhuang D, etc. 2. Subsidiaries of the Company See details to Notes VII, Situation of the enterprise subsidiaries refer to the Notes. 3.Other Related parties information of the enterprise Other Related parties name Relation of other Related parties with the company Dongxu Technology Group Co., Ltd. The shareholders of the company Dongxu Optoelectronic Investment Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Electronic vacuum Glass Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Large-diameter plastic tube Co., ltd. Controlled by the same actual controller Shijiazhuang Baoshi Zhonghe Steel Plastic Shape Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Xuming Tube Co., Ltd. Controlled by the same actual controller Shijiazhuang Baodong Electronic Co.,Ltd. Controlled by the same actual controller Hebei Baoshi Lighting Co., Ltd. Controlled by the same actual controller Dongxu(Yingkou)Optoelectronic Display Co., Ltd. Controlled by the same actual controller Jinhou Xulong Solar energy Technology Co., Ltd. Controlled by the same actual controller Sichuan Xuhong Optoelectrnic Technology Co., Ltd Controlled by the same actual controller Shijiazhuang Bofa Mechanical Equipment Co., Ltd. Controlled by the same actual controller Hebei Decoration Printing Machine Co., Ltd. Controlled by the same actual controller Chengdu Zhong Optoelectronic Technology Co., Ltd. General Manager: Li Zhaotin Chengdu Dongxu Intelligent Technology Co., Ltd. Controlled by the same actual controller Shijiazhuang Xuling Electronic Technology Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Electronic Group Co., Ltd. Controlled by the same actual controller Chengdu Taiyisi Technology Co., Ltd. Controlled by the same actual controller Tibet Financial Leasing Co., Ltd. Controlled by the same actual controller 196 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Li Qing The spouse of the actual controller 4. Related transactions. (1)Related transactions on purchasing goods and receiving services Acquisition of goods and reception of labor service In RMB Content of related Amount of current Amount of previous Over the trading limit Related parties Amount of last period transaction or not? period period Baoshi Group Energy 574,553.06 Baoshi Group Security fees 360,500.00 1,500,000.00 Chengdu Dongxu Energy Saving ESL 1,326,857.00 1,787.18 Technology Co., Ltd. Shijiazhuang Baoshi Zhonghe Door 259,246.66 Steel Plastic Shape Co., Ltd. Shijiazhuang Bofa Machining part Mechanical 18,568,179.46 and A frame Equipment Co., Ltd. Sichuan Southwest Mechanery Industry House lease 62,400.00 60,000.00 Group Co., Ltd. Total 1,749,757.00 60,000.00 20,903,766.36 Related transactions on sale goods and receiving services In RMB Related parties Content of related transaction Amount of current period Amount of previous period Chengdu Zhong Optoelectronic Semi-manufacture 3,106,153.76 Technology Co., Ltd. Chengdu Zhong Optoelectronic Traction roll project 504,871.80 188,888.89 Technology Co., Ltd. Yinchuan Fengxxiang Street Comprehensive Contruction Construction installation 97,789,036.93 Management Co., Ltd. Yixian Xuhuayuan Park Construction installation 7,783,800.00 197 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Construction Development Co., Ltd. Guangdong Huakai Real Estate Construction installation 7,565,972.68 Development Co., Ltd. Dongxu Technology Group Graphene(Battery) 2,735.05 Co.,Ltd. Shijiazhuang Bofa Mechanical A frame 2,533,760.68 Equipment Co., Ltd Dongxu(Yingkou) Optoelectronic Display Co., Semi-manufacture 12,049,825.21 Ltd. Dongxu(Yingkou) Optoelectronic Display Co., A frame 3,076,923.08 Ltd. Total 131,306,925.43 3,295,042.65 (2)Related trusteeship or contracting Related trusteeship or contracting in which the Company is the undertake In RMB Name of Clients/Contractee Name of Type of Entrusting Starting Date Expiration Confirmed Trustee/Cont Asset/Contracting Asset of Entrusting Date of Entrusting ractee /Contracting Entrusting /Contracting Fee /Contracti at the Current ng Period Tunghsu Group, Yingkou Coastal Dongxu Management Right of January 2012 Notes 1 707,547.18 Development Construction Co., Optoelectron Dongxu(Yingkou) Ltd.Minmetals (Yingkou) Industrial Park ic Optoelectroric Display Development Co., Ltd. Technology Co., Ltd. Tunghsu Group, Mianyang Investment City Co., Ltd. Management Right of March 2012 Notes 2 3,429,535.76 Development (Group ) Co., Ltd., Sichuan Sichuan Xuhong Changhong Electric Co., Ltd. Optoelectronic Technology Co., Ltd. Total 4,137,082.94 Description of custodies During the reporting period, the Company continued entrusted with the management of Dongxu( Yingkou) Optoelectronic Display Co., Ltd. and Sichuan Xuhong Optoelectronic Technology Co., Ltd. In December 2011, Tunghsu Group signed the Equity Trusteeship Agreement with the Company , of which 60% share rights of Dongxu (Yingkou) Optoelectronic Display Co., Ltd., 51% share rights of Sichuan Xuhong 198 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Optoelectronic Technology Co., Ltd. were entrusted by the Company, where the agreement went into effect as of March 2012. The clients paid the Company 500 thousand RMB of management fee per year for each subject. Notes 1:Trusteeship costs include basic management fees and incentive management fees(0.5 million/years), including basic management fee of 1 million per year, incentive management fees per year managed company with net operating profit after tax of 5% calculation(Base incentive management fees deduct prior years' losses) Notes 2: Trusteeship costs include basic management fees and incentive management fees(0.5 million/years), including basic management fee of 1 million per year, incentive management fees per year managed company with net operating profit after tax of 5% calculation. Notes 3:On April 20, 2016, Dong Xu (Yingkou) Optoelectronic Display Co.,Ltd, upon the approval by general shareholders’ meeting, amended the Article of Association, thus the stake of Dong Xu (Yingkou) Optoelectronic Display Co.,Ltd held by Dong Xu Group was changed to 47.8% from 60%. Notes4. On April 1, 2016, Sichuan Xu Hong Optoelectronic Technology Co. Ltd, with the consent of the shareholders' meeting, increased the capital with in accordance with the relevant provisions of Articles of Association; after capital increase, the stake of Sichuan Xu Hong Optoelectronic Technology Co. Ltd held by Dong Xu Group was changed to 86.64% from 51%. Lists of entrust/contractee In RMB Name of the Name of the Clarge entruster/contract entrustee/ Type Initial date Due date Pricing basis recognized in the ee contractor reporting period Notes (3)Related guarantee condition The Company as a guarantor Execution accomplished Secured party Guarantee amount Start date End date or not The Company was secured party In RMB Guarantor Guarantee Amount Starting date Stop date If completed or not Tunghsu Group , Li 200,000,000.00 November 4,2016 November 3,2017 No Zhaoting Li Zhaoting 200,000,000.00 August 30,2016 August 30,2017 No Li Zhaoting 200,000,000.00 October 19,2016 October 19,2017 No Tunghsu Group , Li 200,000,000.00 November 4,2016 November 4,2017 No Zhaoting, Li Qing Tunghsu Group , Li 360,000,000.00 December 29,2016 December 29,2017 No Zhaoting, Li Qing Tunghsu Group , Li 200,000,000.00 September 30,2016 September 29,2017 No Zhaoting, Li Qing 199 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Tunghsu Group , Li 200,000,000.00 November 4,2016 November 4,2017 No Zhaoting, Li Qing Tunghsu Group 200,000,000.00 November 3,2016 November 3,2017 No Tunghsu Group 200,000,000.00 September 28,2016 September 27,2017 No Tunghsu Group 50,000,000.00 November 23,2016 November 23,2017 No Li Zhaoting 40,000,000.00 December 29,2016 December 29,2017 No Li Zhaoting 60,000,000.00 May 17,2016 May 17,2017 Yes Li Zhaoting 60,000,000.00 December 6,2016 December 6,2017 No Tunghsu Group 50,000,000.00 December 29,2016 December 29,2017 No Li Qing, Li Zhaoting 50,000,000.00 November 29,2016 November 29,2017 No Tunghsu Group , Li 20,000,000.00 August 10,2016 August 9,2017 No Zhaoting Tunghsu Group , Li 30,000,000.00 September 29,2016 August 9,2017 No Zhaoting Tunghsu Group , Li 50,000,000.00 October 13,2016 August 8,2017 No Zhaoting Tunghsu Group , Li 693,700.00 September 26,2016 August 9,2017 No Zhaoting Tunghsu Group , Li 100,000,000.00 December 23,2016 December 23,2018 No Zhaoting, Li Qing Tunghsu Group , Li 200,000,000.00 December 27,2016 December 27,2018 No Zhaoting, Li Qing Tunghsu Group , Li 200,000,000.00 December 29,2016 December 29,2018 No Zhaoting, Li Qing Tunghsu Group , Li 387,700,000.00 April 29,2016 April 29,2018 No Zhaoting, Li Qing Tunghsu Group , Li 599,800,000.00 June 7,2016 June 7,2019 No Zhaoting, Li Qing Tunghsu Group , Li 100,000,000.00 May 17,2016 May 17,2018 No Zhaoting, Li Qing Tunghsu Group 100,000,000.00 May 20,2016 May 20,2018 No Tunghsu Group 81,500,000.00 May 25,2016 May 26,2018 No Tunghsu Group 18,500,000.00 June 13,2016 June 13,2018 No Tunghsu Group, Dongxu Optoelectronic 400,000,000.00 November 30,2016 November 30,2019 No Investment Co., Ltd., Li Zhaoting 200 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Tunghsu Group 200,000,000.00 December 15,2016 December 15,2018 No Tunghsu Group 100,000,000.00 August 5,2016 August 3,2018 No Tunghsu Group, Li 150,000,000.00 May 2,2013 April 11,2022 No Zhaoting, Li Qing. Tunghsu Group, Li 100,000,000.00 September 26,2013 April 11,2022 No Zhaoting, Li Qing. Tunghsu Group, Li 300,000,000.00 April 1,2014 April 11,2022 No Zhaoting, Li Qing. Tunghsu Group, Li 150,000,000.00 April 10,2015 April 12,2022 No Zhaoting, Li Qing. Tunghsu Group, Li Zhaoting, Li Qing, and Li Zhaoting holds 10% of the shares of Dongxu Technology Group, 150,000,000.00 May 19,2016 May 18,2018 No Tunghsu Group holds 90% of the shares of Dongxu Technology Group, Tunghsu Group, Li Zhaoting, Li Qing, and Li Zhaoting holds 10% of the shares of Dongxu Technology Group, 150,000,000.00 May 26,2016 May 25,2018 No Tunghsu Group holds 90% of the shares of Dongxu Technology Group, Tunghsu Group, Li Zhaoting, Li Qing, and Li Zhaoting holds 10% of the shares of Dongxu Technology Group, 159,000,049.50 June 8,2016 April 7,2018 No Tunghsu Group holds 90% of the shares of Dongxu Technology Group, Tunghsu Group, Li Zhaoting, Li Qing, and 40,999,950.50 June 21,2016 April 20,2018 No Li Zhaoting holds 10% of the shares of Dongxu 201 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Technology Group, Tunghsu Group holds 90% of the shares of Dongxu Technology Group, Tunghsu Group , Li 100,000,000.00 March 3,2017 March 2,2019 No Zhaoting Tunghsu Group , Li 204,000,000.00 March 29,2017 September 28,2018 No Zhaoting Tunghsu Group , Li 100,000,000.00 March 31,2017 March 30,2018 No Zhaoting, Li Qing Tunghsu Group , Li 300,000,000.00 June 2,2017 June 2,2019 No Zhaoting, Li Qing Tunghsu Group , Li 200,000,000.00 May 15,2017 May 15,2019 No Zhaoting, Li Qing Li Zhaoting 108,333,333.32 January 6,2017 January 6,2019 No Li Zhaoting 16,666,666.66 January 17,2017 January 6,2019 No Tunghsu Group , Li 199,000,000.00 February 24,2017 August 23,2018 No Zhaoting Tunghsu Group , Li 97,000,000.00 March 29,2017 September 28,2018 No Zhaoting Tunghsu Group , Li 200,000,000.00 June 28,2017 June 27,2018 No Zhaoting Tunghsu Group 50,000,000.00 June 30,2017 June 29,2018 No Tunghsu Group , Li 45,000,000.00 January 3,2017 December 28,2017 No Zhaoting Tunghsu Group 100,000,000.00 June 19,2017 April 4,2018 No Tunghsu Group , Li 100,000,000.00 March 25,2016 February 28,2017 Yes Zhaoting Tunghsu Group 200,000,000.00 January 15,2016 January 15,2017 Yes Li Zhaoting 400,000,000.00 April 15,2016 April 14,2017 Yes Tunghsu Group 200,000,000.00 June 3,2016 June 3,2017 Yes Tunghsu Group , Li 100,000,000.00 April 14,2016 April 13,2017 Yes Zhaoting, Li Qing Tunghsu Group , Li 42,500,000.00 April 15,2016 April 17,2017 Yes Zhaoting Tunghsu Group 60,000,000.00 June 30,2016 June 29,2017 Yes Tunghsu Group 100,000,000.00 March 25,2016 March 25,2017 Yes 202 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Tunghsu Group 30,000,000.00 March 31,2016 March 30,2017 Yes Tunghsu Group 45,000,000.00 January 27,2016 January 27,2017 Yes Tunghsu Group 45,000,000.00 February 29,2016 February 28,2017 Yes Tunghsu Group 15,000,000.00 April 1,2016 March 31,2017 Yes Tunghsu Group 450,000,000.00 January 28,2013 January 27,2021 No Tunghsu Group, Li 90,000,000.00 April 12,2013 April 11,2022 No Zhaoting, Li Qing Tunghsu Group, Li 200,000,000.00 Yes Zhaoting, Li Qing Tunghsu Group, Li No 228,046,429.92 Zhaoting Tunghsu Group 254,117,655.73 No Tunghsu Group, Li No 85,000,000.00 Zhaoting Tunghsu Group, Li No 150,000,000.00 Zhaoting Tunghsu Group, Li No 84,419,919.77 Zhaoting Tunghsu Group, Li No 200,000,000.00 Zhaoting Notes (4) Rewards for the key management personnel In RMB Items Amount of current period Amount of previous period Rewards for the key management 289.98 247.91 personnel 5.Payables and receivables of the related party (1)Receivable In RMB Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision Dongxu Account receivable (Yingkou ) 14,128,295.50 Optoelectronic 203 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Display Co., Ltd. Hebei Baoshi Energy saving Account receivable 10,000.00 10,000.00 lighting technology Co., Ltd. Sichuan Xuhong Account receivable Optoelectronic 1,925,162.08 5,458,541.80 Technology Co., Ltd Yinchuan Fengxiang Street Comprehensive Account receivable 103,801,081.48 Construction Management Co., Ltd. Chengdu Dongxu Prepayments Intelligent 166,857.00 Technology Co., Ltd. Hebei Baoshi Energy saving Prepayments 60,000.00 60,000.00 lighting technology Co., Ltd. Hebei Decoration Prepayments Printing Machinery 835,680.87 835,680.87 Co., Ltd. Shijiazhuang Baoshi Prepayments Electronic vacuum 420,000.00 Glass Co., Ltd. Shijiazhuang Baoshi Prepayments 270,279.00 620,279.00 Group Chengdu Zhong Bill receivable Optoelectronic 710,000.00 Technology Co., Ltd Other non-current Tunghsu Group 132,132,857.44 132,132,857.44 assets (2)Payables In RMB Name Related party Book balance at year end Book balanc at year beginning Account payable Shijiazhuang Bofa Mechanical 8,747.20 8,959,301.52 204 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Equipment Co., Ltd. Shijiazhuang XumingTube Co., Account payable 14,948.00 Ltd. Shijiazhuang Baoshi Electronic Account payable 4,354,418.46 vacuum Glass Co., Ltd. Shijiazhuang Baoshi Account payable Large-diameter plastic tube Co., 533,942.80 533,942.80 ltd Shijiazhuang Baoshi Account payable Zhonghe Steel Plastic Shape 240,296.40 441,578.40 Co., Ltd. Shijiazhuang Xuling Electronic Account payable 1,320,164.09 1,320,164.09 Technology Co., Ltd. Account payable Shijiazhuang Baoshi Group 514,401.13 Chengdu Dongxu Intelligent Account payable 1,253,553.92 Technology Co., Ltd. Advance revenue Tunghsu Group 66,261,470.09 69,676,000.00 Chengdu Zhong Optoelectronic Advance revenue 724,355.00 207,291.65 Technology Co., Ltd Jinzhou Xulong New Material Other payable 1,500,000.00 Technology Co., Ltd. Other payable Shijiazhuang Baoshi Group 12,024,173.50 10,455,242.86 Other payable Tunghsu Group 13,951,402.32 13,873,229.83 Shijiazhuang Baoshi Electronic Other payable 264,000.00 vacuum Glass Co., Ltd. Sichuan Xuhong Optoelectronic Other payable 872,857.78 Technology Co., Ltd. Shijiazhuang XumingTube Co., Other payable 97,031.00 97,031.00 Ltd. XII. Stock payment 1. The Stock payment overall situation □ Applicable √Not applicable 2. The Stock payment settled by equity √ Applicable □Not applicable In RMB 205 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 The determined methods of the fair value of the equity instruments The 20 trading days prior to the announcement of the stock granted to date incentive plan average stock trading company 《Unlock the first phase of the company restricted stock Determine the number of vested equity instruments incentive plan period can unlock the object list》 This estimate and it is estimated that there are significant Nil differences of the previous period Equity-settled share-based payment included in the total amount of 11,419,300.00 capital reserves This period of equity-settled share-based payment confirmation 796,800.00 total costs XIII. Commitments 1. Significant commitments Significant commitments at balance sheet date As of June 30, 2017, there was no significant commitment or contingency in the Group. 2. Contingency (1) Significant contingency at balance sheet date Nil (2) The Company have no significant contingency to disclose, also should be stated There was no significant contingency in the Company. XIV. Enents after balance sheet date 1.Notes of ohter significant events On July 3, 2017, Wuhu Dongxu Weiyu Medical Devices Technology Co., Ltd set up a wholly-owned subsidiary-Anhui Weiwang Medical Devices Technology Co., Ltd.,with the Registered capital Of RMB 20 million and the paid-up capital of RMB 0.00. On July 5, 2017, Wuhu Dongxu Weiyu Medical Devices Technology Co., Ltd set up a wholly-owned subsidiary-Liaoning Dongxu Weiyu Medical Devices Technology Co., Ltd., with ther registered capital of RMB 20 million and the paid-up capital of RMB 0.00. On July 12,2017, Wuhu Dongxu Weiyu Medical Devices Technology Co., Ltd set up a wholly-owned subsidiary-Guangxi Dongxu Weigao Medical Devices Technology Co., Ltd., with ther registered capital of RMB 20 million and the paid-up capital of RMB 0.00. On July 19,2017, Zhengzhou Xufei Optoelectronic Technology Co., Ltd.acquired 100% stake of Suzhou Tengda Phonology Technology Co., Ltd. with ther registered capital of RMB 24 million and the paid-up capital of RMB 24 million . 206 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 XIV. Notes s of main items in financial reports of parent company (1)Account receivable 1.Classification accojunt receivables. In RMB Amount in year-end Amount in year-beginning Book Balance Bad debt provision Book Balance Bad debt provision Classification Book Amount Proportio Amount Proportio Amount Proportio Amount Proportion( Book value value n(%) n(%) n(%) %) Account receivables provided bad debt 15,279,1 719,428. 14,559,67 20,464, 567,495.2 19,896,753. 100.00% 4.71% 100.00% 2.77% provision in credit 02.26 91 3.35 248.49 3 26 risk groups 15,279,1 719,428. 14,559,67 20,464, 567,495.2 19,896,753. Total 100.00% 4.71% 100.00% 2.77% 02.26 91 3.35 248.49 3 26 Accounts receivable of individual significance and subject to individual impairment assessment. □ Applicable√ Not applicable Account receivable on which bad debt provisions are provided on age basis in the group √ Applicable □ Not applicable In RMB Year-end balance Aging Account receivable Bad debt provision Proportion Sub item within 1 year 3-4 years 909,668.39 454,834.20 50.00% Over 5 years 264,594.71 264,594.71 100.00% Total 1,174,263.10 719,428.91 61.27% Notes: Receivable account in Group on which bad debt provisions were provided on percentage basis: √Applicable □ Not applicable Receivable account in Group on which bad debt provisions were provided on other basis: Year-end balance Aging Account receivable Bad debt provision Proportion Related party combination 14,104,839.16 Total 14,104,839.16 (2) Top five of account receivable of closing balance collected by arrears party 207 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 The total receivable amount of top five closing balances collected by the debtors in the current reporting period is RMB 13,846,839.16 , which accounts for 90.63% of the total other receivables. The total amount of balances in the end of the period for corresponding accrued bad-debt provision is RMB 0.00. 2.Other receivable (1)Classification of Other receivable In RMB Amount in year-end Amount in year-beginng Book Balance Bad debt provision Book Balance Bad debt provision Classification Book Amount Proportio Amount Proportio Amount Proportio Amount Proportion( Book value value n(%) n(%) n(%) %) Other account 4,927,3 receivables provided 7,813,09 1,466,58 7,811,632 1,967,568 4,925,419,4 100.00% 0.02% 87,025. 100.00% 0.04% bad debt provision in 9,223.07 0.49 ,642.58 .56 56.78 34 credit risk groups 4,927,3 7,813,09 1,466,58 7,811,632 1,967,568 4,925,419,4 Total 100.00% 0.02% 87,025. 100.00% 0.04% 9,223.07 0.49 ,642.58 .56 56.78 34 Other Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: □Applicable √Not applicable Other receivable accounts in Group on which bad debt provisions were provided on age analyze basis: √ Applicable □Not applicable In RMB Amount in year-end Aging Other receivable Bad debt provision Withdrawal proportion Sub item within 1 year Credit period 830,521.97 Subtotal within 1 year 39.90 2.00 5.00% 1-2 years 2,605.70 260.57 10.00% 2-3 years 130,129.79 39,038.93 30.00% 3-4 years 8,497.64 4,248.82 50.00% Over 5 years 1,423,030.17 1,423,030.17 100.00% Total 2,392,397.27 1,466,580.49 61.30% Notes: Other receivable account in Group on which bad debt provisions were provided on percentage basis: √Applicable □Not applicable 208 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Name Closing balance Bad debt provision Related party transaction 7,049,173,656.75 Deposit 760,643,666.66 Personal loans 284,950.89 Personal insurance and provident fund 457,898.51 Export rebate 146,652.99 Total 7,810,706,825.80 Other Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: □Applicable√Not applicable (2)Accrual period, recovery or reversal of bad debts situation The current amount of provision for bad debts is RMB 0.00; recovery or payback for bad debts Amount is RMB 5 00,988.07. Where the current bad debts back or recover significant amounts: In RMB Name Amount Method (3)Other account receivable classified by account nature In RMB Nature Closing book value Opening book value Deposit 760,643,666.66 5,853,833.34 Personal loans 284,950.89 179,023.27 Related party transaction 7,049,173,656.75 4,918,192,744.41 Current fund 1,635,319.74 Personal insurance and provident fund 457,898.51 21,023.59 Export rebate 146,652.99 Other 757,077.53 3,140,400.73 Total 7,813,099,223.07 4,927,387,025.34 (4) The top five other account receivable classified by debtor at period end In RMB Closing balance of Name Nature Closing balance Aging Proportion % bad debt prof=vision Beijing Xufeng Current account 2,200,142,347.30 Credit period 28.16% Property Co., Ltd. Wuhu Dongxu Current account 1,677,351,260.33 Credit period 21.47% 209 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Optoelectronic Equipment Technology Co., Ltd. Wuhu Dongxu Optoelectronic Current account 1,104,687,825.99 Credit period 14.14% Technology Co., Ltd. Zhengzhou Xufei Optoelectronic Current account 1,407,336,950.00 Credit period 18.01% Technology Co., Ltd. Dongxu Construction Current account 318,069,264.18 Credit period 4.07% Group Co., Ltd. Total -- 6,707,587,647.80 -- 85.85% 3.Long-term equity investment In RMB Year-end balance Year-beginning balance Items Bad debt Bad debt Book balance Book value Book balance Book value provision provision Investment to the 15,377,709,832.6 14,999,537,182.7 11,679,609,832.6 11,301,437,182.7 378,172,649.84 378,172,649.84 subsidiary 3 9 3 9 Investment to joint ventures and 476,647,120.67 476,647,120.67 72,354,803.70 72,354,803.70 associated enterprises 15,854,356,953.3 15,476,184,303.4 11,751,964,636.3 11,373,791,986.4 Total 378,172,649.84 378,172,649.84 0 6 3 9 (1)Investment to the subsidiary In RMB Withdrawn Closing balance impairment Name Opening balance Increase Decrease Closing balance of impairment provision in the provision reporting period Shijiazhuang Baoshi Color Bulb 439,341,956.80 439,341,956.80 Co., Ltd. Hebei Xubao 100,000,000.00 100,000,000.00 Construction 210 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Engineering Installation Co., Ltd. Wuhu Dongxu Optoelectronic Equipment 93,100,000.00 93,100,000.00 Technology Co., Ltd. Wuhu Dongxu Optoelectronic 4,711,064,000.00 4,711,064,000.00 Technology Co., Ltd. Dongxu Construction 1,000,453,728.53 2,000,000,000.00 3,000,453,728.53 Group Co., Ltd. Wuhan Dongxu Optoelectronic 3,125,000.00 3,125,000.00 Technology Co., Ltd. Beijing Xufeng Real Estate Co., 470,000,000.00 470,000,000.00 Ltd. Dongxu (Kunshan) 400,000,000.00 400,000,000.00 Display Material Co., Ltd. Jiangsu Jixing New Material Co., 167,345,300.00 167,345,300.00 Ltd. Beijing Xutan New Material 10,500,000.00 10,500,000.00 Technology Co., Ltd. Beijing Dongxu Huaqing 3,500,000.00 3,500,000.00 Investment Co., Ltd. Shijiazhuang Xuxin 1,966,568,609.92 1,966,568,609.92 Optoelectronic Technology Co., 211 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Ltd. Zhengzhou Xufei Optoelectronic 1,791,853,741.58 1,791,853,741.58 Technology Co., Ltd. Fuzhou Dongxu Optoelectronic 10,000,000.00 1,735,000,000.00 1,745,000,000.00 Technology Co., Ltd. Shanghai Tanyuan Huigu New Material 73,454,500.00 73,454,500.00 Technology Co., Ltd. Fuzhou Xufu Optoelectronic 10,900,000.00 13,100,000.00 24,000,000.00 Technology Co., Ltd. Shenzhen Xuhui Investment 20,000,000.00 50,000,000.00 70,000,000.00 Holding Co., Ltd. Taizhou Dongxug Graphene Industry Investment Fund 25,000,000.00 25,000,000.00 Management Center(Limited Partnership) Xuyou Electronic Materal 383,402,995.80 383,402,995.80 Technology (Wuxi)Co., Ltd. Less: Long-terminvestm 378,172,649.84 378,172,649.84 ent depreciation reserves 11,679,609,832.6 15,377,709,832.6 Total 3,798,100,000.00 100,000,000.00 378,172,649.84 3 3 (2)Investment to joint ventures and associated enterprises In RMB 212 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Increase /decrease in reporting period Closing Adjustme Withdraw balance Decrease Gain/loss nt of Declarati Opening Add Other n Closing of Name d of other on of cash balance investmen equity impairme Other balance impairme investmen Investme comprehe dividends t changes nt nt t nt nsive or profit provision provision income I. Joint ventures II. Associated enterprises Zhongda Chengxin Internatio nal 72,354,80 171,370.9 72,526,17 Commerc 3.70 6 4.66 ial Factoring Co., Ltd. Tunghsu Group 400,000,0 -15,702,5 384,297,4 Finance 00.00 80.22 19.78 Co., Ltd. Dongxu(De yang)Grap hene 19,800,00 19,823,52 Developme 23,526.23 0.00 6.23 nt Fund Partnership (LP) 72,354,80 419,800,0 -15,507,6 476,647,1 Total 3.70 00.00 83.03 20.67 4.Business income and Business cost In RMB Items Amount of current period Amount of previous period Income Cost Income Cost Main business 11,006,532.52 6,941,391.49 369,700,169.65 236,073,823.43 Other business 27,591,148.66 21,150,871.79 14,147,651.79 67,061.63 Total 38,597,681.18 28,092,263.28 383,847,821.44 236,140,885.06 213 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 5. Investment income In RMB Items Amount of current period Amount of previous period Income from long-term equity investment -15,507,683.03 81,758.31 measured by adopting the Equity method Other investment income 22,183,417.04 Total 6,675,734.01 81,758.31 XVI. Supplementary Information 1.Current non-recurring gains/losses √ Applicable □Not applicable In RMB Items Amount Notes Gains/Losses on the disposal of non-current -30,537.14 assets Government grants recognized in the current period, except for those acquired in the ordinary course of business or granted at 65,632,104.25 certain quotas or amounts according to the country’s unified standards Gain/loss on loans obtained by entrusting 4,137,082.94 others Other non-operating income and expenditure 18,148.98 beside for the above items Other profit and loss items that meet the 22,183,417.04 definition of non-recurring profit and loss Less: Influenced amount of income tax 15,552,946.64 Amount of influence of minority interests 522,067.47 Total 75,865,201.96 -- 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 214 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 2 Return on net assets and earnings per share Earnings per share Profit of the report period Return on net assets . Weighted(%) Basic earnings per share Diluted gains per share Net profit attributable to the Common stock shareholders of 2.84% 0.13 0.13 Company. Net profit attributable to the Common stock shareholders of 2.50% 0.11 0.11 Company after deducting of non-recurring gain/loss. 3. Differences between accounting data under domestic and overseas accounting standards 1.Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. □Applicable √Not applicable XI. Documents available for inspection 1.The original semi-annual report bearing the signature of the Chairman of the Board of Directors of the Company; 2.The text of the financial report bearing the seal and signature of the person in charge of the Company, financial controller and the person in charge of accounting organ 3.Original audit report seal with accounting firms and signature and seal from CPA; 4. Originals of all documents and manuscripts of public Notices of the Company Disclosed in public in the newspapers as designated by China Securities Regulatory Commission. 【Notes】This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail. Dongxu Optoelectronic Technology Co., Ltd. Chairman: Li Zhaoting 215 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2017 Issue day approved by the Board of Directors:August , 2017 216