Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Stock code :000413,200413 Abbreviation:Dongxu Optoelectronic, Dongxu B Announcement:2017-105 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 October 2017 1 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 I. Important Notice The Board of Directors ,Supervisory Committee, all directors, supervisors and senior executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. All of the directors presented the board meeting at which this Quarterly Report was examined. Mr. Li Zhaoting, The Company leader, Mr.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 )declare: the financial report carried in this report is authentic and completed. 2 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 II. Basic information about the company I.Main financial data and financial index Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not. □ Yes √ No As at the end of the Changed (%)over end of As at the end of last year reporting period prev. year Gross assets(RMB) 48,694,131,849.40 46,826,319,570.41 3.99% Net assets attributable to the shareholders of the listed company 22,897,698,801.62 22,216,300,365.86 3.07% (RMB) Increase/decrease over Between beginning of Changed (%)over Reporting period the same period of last the year to the end of end of prev. year year(%) the report period Operating income(RMB) 3,227,360,295.67 133.93% 7,868,645,823.58 84.64% Net profit attributable to the shareholders of the listed company 390,258,136.00 52.52% 1,026,113,886.37 27.97% (RMB) Net profit after deducting of non-recurring gain/loss attributable to 378,226,991.24 138.86% 938,217,539.65 51.76% the shareholders of listed company (RMB) Cash flow generated by business -- -- 332,635,634.84 -79.58% operation, net(RMB) Basic earning per share(RMB/Share) 0.080 33.33% 0.210 5.00% Diluted gains per 0.080 33.33% 0.210 5.00% share(RMB/Share)(RMB/Share) Weighted average income/asset ratio 1.72% 0.21% 4.51% -0.72% (%) Items and amount of non-current gains and losses √ Applicable □ Not applicable In RMB Amount (Year-beginning to Items Notes the end of the report period.) Non-current asset disposal gain/loss(including the write-off part -36,971.00 for which assets impairment provision is made) 3 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Govemment subsidy recognized in current gain and loss(excluding those closely related to the Company’s business 76,061,917.45 and granted under the state’s policies) Gain from entrusted investment or assets management 38,932,047.17 Gain/loss on loans obtained by entrusting others 6,811,112.87 Other non-operating income and expenditure beside for the above -439,080.66 items Less: Influenced amount of income tax 18,977,141.62 Amount of influence of minority interests(After tax) 14,455,537.49 Total 87,896,346.72 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. □ Applicable√ Not applicable None of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 4 The Third Quarterly Report 2017 II.Total Shareholders and Shares Held by Top Ten Shareholders at the End of the Reporting Period 1. About Total Common Shareholders, Total Preference Shareholders with the Voting Power Recovered and the Shares Held by Top Ten Common Shareholders In shares Total preference shareholders with Total number of common 405,506(Including 388047shareholders holding a the voting power recovered at the 0 shareholders at the period-end shares and 17459 shareholders holding B shares) end of the reporting period(if any) Shares held by the top 10 shareholders Share Amount of tradable Pledging or freezing Properties of Shareholder name proportion Quantity shares with Status of the shareholder Quantity % Conditional held shares Domestic Non Tunghsu Group Co., Ltd. -State-owned legal 11.32% 558,968,800 439,882,697 Pledge 553,962,697 person Domestic Non Shijiazhuang Baoshi Electronic -State-owned legal 6.73% 332,382,171 0 Pledge 153,520,000 Group Co., Ltd. person China Fund Management Co., Ltd.-Huaxia Bank-TTCO Trust Co., Ltd.-TTCO Trust Other 3.51% 173,239,116 0 Co., Ltd.-Shunjing No.5 Single capital trust Minsheng Royal Fund Management Co., Ltd.-Ping An Bank-Ping An Trust-Ping An Other 1.86% 91,642,280 Wealth* Huitai No.163 Single Fund Trust Domestic Non Qianhai Equity Investment -State-owned legal 1.74% 86,024,545 Fund(LP) person Dongxu Optoelectronic Technology Co., Ltd.-The Other 1.47% 72,639,296 72,639,296 Iphase of ESOP Nuoan Fund-Xingye Securities-Nanjing Shuangan Other 1.45% 71,494,714 Assets Management Co., Ltd. Domestic Non Shenzhen Taianer Information -State-owned legal 1.39% 68,765,682 Pledge 61,165,682 Technology Co., Ltd. person Penghua Fund-Ningbo Bank Other 1.25% 61,987,758 5 The Third Quarterly Report 2017 -Daye Trust-Daye TrustDongxu Optoelectronic increase funds II Single fund trust STAS Asset Management- Ningbo Bank-Minsheng Trust -China Minsheng TrustZhixin Other 1.25% 61,987,758 No.208 Dongxu Optoelectronic increase collective fund trust plan Shares held by the Top 10 Shareholders of Non-restricted shares Number of the non-restricted shares Share type Shareholders’ Names held Share type Quantity RMB Common Shijiazhuang Baoshi Electronic Group Co., Ltd. 332,382,171 332,382,171 shares China Fund Management Co., Ltd.-Huaxia Bank- RMB Common TTCO Trust Co., Ltd.-TTCO Trust Co., Ltd.- 173,239,116 173,239,116 shares Shunjing No.5 Single capital trust RMB Common Tunghsu Group Co., Ltd. 119,086,103 119,086,103 shares Minsheng Royal Fund Management Co., Ltd.-Ping An RMB Common Bank-Ping An Trust-Ping An Wealth* Huitai No.163 91,642,280 91,642,280 shares Single Fund Trust RMB Common Qianhai Equity Investment Fund(LP) 86,024,545 86,024,545 shares Nuoan Fund-Xingye Securities-Nanjing Shuangan RMB Common 71,494,714 71,494,714 Assets Management Co., Ltd. shares RMB Common Shenzhen Taianer Information Technology Co., Ltd. 68,765,682 68,765,682 shares Penghua Fund-Ningbo Bank-Daye Trust-Daye RMB Common TrustDongxu Optoelectronic increase funds II Single 61,987,758 61,987,758 shares fund trust STAS Asset Management-Ningbo Bank-Minsheng RMB Common Trust-China Minsheng TrustZhixin No.208 Dongxu 61,987,758 61,987,758 shares Optoelectronic increase collective fund trust plan HuaAn Future Asset-ICBC-No.1 Asset Management RMB Common 49,877,765 49,877,765 Plan of Dongxu Optoelectronic’s Private Placement shares Among the top ten shareholders holding non-restricted negotiable shares, Explanation on shareholders participating in the margin Tunghsu Group and Baoshi Group have relationship and constitute trading business persons taking concerted action. The Company does not know whether 6 The Third Quarterly Report 2017 there is any relationship among the rest 8 ordinary shareholders or between the rest eight top shareholders of unlimited-sale common stock and the rest 8 ordinary shareholders, nor know whether they belong to the persons acting in concert stipulated by "Measures for the administration of the takeover by listed companies". Participation of top 10 unconditional common share Not applicable shareholders in securities margin trading (if any) Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period. □ Yes √ No The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –back agreement dealing in reporting period. 2.Total number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the report period □ Applicable √Not applicable III Significant Events I. Major changes of main accounting statement items and financial indicators in the reporting period, as well as reasons for the changes √ Applicable □ Not applicable Amount at the Amount at the end of beginning of period Rate of change No Items in statements Reason for change period/ This period /Same period of last (%) year Mainly due to the expansion 1 Account receivable 2,815,556,458.91 1,652,714,640.77 70.36 of business scale and income Mainly due to the new 2 Advance payments 1,986,345,935.58 862,432,895.10 130.32 prepaid payment and equity purchase Other account Mainly due to the increase in 3 319,700,792.58 186,071,085.24 71.82 receivable margin 4 Inventories 3,706,559,024.47 2,688,967,436.27 37.84 Mainly due to stocking Long term share Mainly due to the increase in 5 505,025,114.92 72,354,803.70 597.98 equity investment equity investment Mainly due to the Construction in 6 2,932,425,322.50 1,772,629,310.84 65.43 construction of production progress line 7 The Third Quarterly Report 2017 Mainly due to the merger 7 Goodwill 156,849,701.01 33,935,384.57 362.20 under the same control Mainly due to the increase in Long-term prepaid 8 18,712,963.05 11,756,506.76 59.17 the use of patents and expenses housing renovation fees 9 Notes payable 263,884,722.25 393,136,676.05 -32.88 Mainly due to payment due Mainly due to the increase in 10 Account payable 1,809,200,506.64 1,165,418,491.73 55.24 inventories Advances from Mainly due to the increase in 11 893,259,362.12 414,078,061.38 115.72 customers construction equipment Mainly due to the votes and 12 Interest payable 238,293,444.92 81,610,513.91 191.99 corporate bonds Mainly due to the increase in 13 Other payable 238,163,230.93 114,993,136.80 107.11 margin Mainly due to the expansion 14 Business revenue 7,868,645,823.58 4,261,683,547.71 84.64 of business scale in the current period Mainly due to the increase in 15 Operating cost 5,937,363,039.53 2,883,454,282.36 105.91 operating costs due to the increase in operating costs Mainly due to the increase in Business taxes and 16 58,051,137.61 25,082,445.26 131.44 operating income due to the surcharges increase in tax revenue Mainly due to the current 17 Financial expenses 411,695,344.38 189,141,367.36 117.67 corporate bonds and interest accrued Mainly due to the equity method of accounting for 18 Investment income 21,302,358.40 -29,947.57 71,232.18 investment income and financial benefits Mainly due to the Non-operating 19 76,654,784.57 196,230,891.80 -60.94 reclassification of new income government subsidies Income tax Mainly due to the increase in 20 274,936,572.22 131,886,161.05 108.47 expense the scale of business profits 8 The Third Quarterly Report 2017 II. The progress of significant events and influence, as well as the analysis and explanation on resolving proposal. √Applicable □Not applicable (I) The Phase II Employee Stock Ownership Plan of the company The Company held the 19th meeting of the 8th Board of Directors and the 5th extraordinary shareholders' general meeting respectively on July 30, 2017 and on August 15, 2017, examined and approved the Proposal about the Phase II Employee Stock Ownership Plan (draft) of Dongxu Optoelectronic Technology Co., Ltd and its Summary. On September 5, 2017, the Collective Fund Trust Plan of Zhonghai Trust-Dongxu Optoelectronics ESOP was set up. As of the date of this report, the company's Phase II ESOP has not yet bought the company's stock due to the factors such as the company's third quarterly report disclosure window period. The company's Phase II ESOP planned to complete the purchase of the company's stock in the secondary market within the valid period. (II) The matter of the Company's share issuance and paying cash to purchase the assets and raise the matching funds namely the related transaction On August 24, 2017, the company received the notice from the CSRC that the Company's share issuance and paying cash to purchase the assets and raise the matching funds namely the related transaction matter was conditionally approved by CSRC through the forty-ninth merger and reorganization committee work conference held on August 24, 2017 by CSRC's Audit Committee of Mergers and Reorganization of listed companies. The Company will complete the issuance of shares to buy assets and raise the matching funds and complete the registration, listing of new shares and other related work as soon as possible after receiving the approval document from the China Securities Regulatory Commission. Description of the website for disclosing provisional Overview of material matters Date of disclosing announcement China securities Journal, Hongkong Commercial Daily, The restructuring project was August 24,2017 Secutities Daily , Secutities Times, Shanghai Securities reviewed and approved News and http://www.cninfo.com.cn. The Phase II employee stock China securities Journal, Hongkong Commercial Daily, ownership plan was reviewed and August 16,2017 Secutities Daily , Secutities Times, Shanghai Securities approved News and http://www.cninfo.com.cn. III. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer, directors, supervisors, senior executives or other related parties in the reporting period and commitments unfinished in implementation at the end of the reporting period □ Applicable √ Not applicable The company has no commitments completed in period and those without completed till lend of the period from actual controller, shareholders, related parties, purchaser and companies. 9 The Third Quarterly Report 2017 IV.Prediction of Business performance for 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 III. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer, directors, supervisors, senior executives or other related parties in the reporting period and commitments unfinished in implementation at the end of the reporting period □ Applicable √ Not applicable The company has no commitments completed in period and those without completed till lend of the period from actual controller, shareholders, related parties, purchaser and companies. IV.Prediction of Business performance for January- June 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 V. Investment in securities □ Applicable √ Not applicable No securities investment in period. VI. Investments in derivatives □ Applicable √ Not applicable There is no derivative investment during the report period. VII. The registration form of acceptance of investigation, communication and interview in the report period for future reference √Applicable □Not applicable Reception time Way of reception Types of visitors Basic index Shenzhen Stock Exchange site September 19,2017 Field research Organization interactive company zone From January 1,2017 to By Phone Individual Nil September 30,2017 10 The Third Quarterly Report 2017 VIII. Outward Guarantee against the Regulations □ Applicable √ Not applicable The Company had no guarantee outside against the regulation in the reporting period. IX. Non-operational Occupancy of the Company’s Capital by the Controlling Shareholder and its Related Parties □ Applicable √ Not applicable The Company had no non-operational fund occupation from controlling shareholders and its related party. X.Implementation of the social Responsibility of taking targeted measures to alleviate poverty in light of local Conditions. The third Quarter 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. The donation money is mainly used for the financing of the outstanding students of the poor families in the old liberated areas, the establishment of the Jinsui base information database, the landscaping project of Memorial Cemetery of Jinsui Martyrs, the relocated burial of the revolutionary martyrs, etc. During the reporting period, the Company actively followed up and supervised the use of donation funds for poverty alleviation. From August 17, 2017 to August 19,2017, the company and the Jin Sui Cultural and Educational Development Foundation together carried out the sunshine activities to aid students in Xing county and Shilou County in Shanxi province, and each of the 207 outstanding students of the poor families selected by Jin Sui Cultural and Educational Development Foundation was granted RMB 5,000 of tuition aid and inspirational scholarship, thus to ensure that they enter school smoothly and finish their studies better. Dongxu Optoelectronic Technology Co., Ltd. Board Chairman: Li Zhaoting Issue day approved by the Board of Directors:October 30,2017 11