Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 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 Dongxu Optoelectronic Technology Co., Ltd. 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 Dongxu Optoelectronic Technology Co., Ltd. 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 Dongxu Optoelectronic Technology Co., Ltd. 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 Dongxu Optoelectronic Technology Co., Ltd. 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 Dongxu Optoelectronic Technology Co., Ltd. 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 Dongxu Optoelectronic Technology Co., Ltd. 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 Dongxu Optoelectronic Technology Co., Ltd. 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. 11 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 IV. Financial Statement I. Financial statement 1. Consolidated balance sheet Prepared by:Dongxu Optoelectronic Technology Co., Ltd. September 30,2017 In RMB Items At the end of term Beginning of term Current asset: Cash and bank balances 23,079,862,862.63 26,056,117,216.86 Settlement provision Outgoing call loan Financial assets at fair value through profit or loss Derivative financial assets Notes receivable 71,683,462.88 55,340,287.95 Account receivable 2,815,556,458.91 1,652,714,640.77 Advance payments 1,986,345,935.58 862,432,895.10 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable 57,672,005.02 Dividend receivable Other account receivable 319,700,792.58 186,071,085.24 Securities purchased under agreements to resell Inventories 3,706,559,024.47 2,688,967,436.27 Held-for-sale assets 3,855,435.58 Current portion of non-current assets Other current asset 2,736,060,201.76 3,203,453,317.38 Total of current assets 34,777,296,179.41 34,705,096,879.57 12 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Non-current assets: Loans and advances Available-for-sale financial assets 100,000,056.00 Held-to-maturity investments Long-term receivable Long term share equity investment 505,025,114.92 72,354,803.70 Property investment 58,536,591.26 Fixed assets 8,994,418,300.94 8,952,341,070.47 Construction in progress 2,932,425,322.50 1,772,629,310.84 Engineering material 304,468.05 Fixed assets pending for disposal Productive biological assets Gas & petrol Intangible assets 570,204,643.02 578,194,545.68 Research and Development Expenditures 1,941,747.58 Goodwill 156,849,701.01 33,935,384.57 Long-term prepaid expenses 18,712,963.05 11,756,506.76 Deferred income tax 298,097,383.05 312,555,500.36 Other non-current asset 280,623,846.66 387,151,100.41 Total of non-current assets 13,916,835,669.99 12,121,222,690.84 Total of assets 48,694,131,849.40 46,826,319,570.41 Current liabilities Short-term bank loan facilities 4,312,646,994.13 4,940,816,200.13 Borrowings from central bank Deposits and placements from other financial institutions Placement from banks and other financial institution Financial liabilities at fair value through profit and loss Derivative financial liabilities Notes payable 263,884,722.25 393,136,676.05 Account payable 1,809,200,506.64 1,165,418,491.73 Advances from customers 893,259,362.12 414,078,061.38 Securities sold under agreement to 13 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 repurchase Fees and commissions payable Payroll payable 52,482,311.04 42,851,392.30 Taxes and surcharges payable 161,680,655.31 224,310,530.71 Interest payable 238,293,444.92 81,610,513.91 Dividend payable 30,000,000.00 Other payable 238,163,230.93 114,993,136.80 Reinsurance amounts payable Provision of insurance contract Securities brokering Securities underwriting Held-for-sale liabilities Current portion of non-current liabilities 3,423,604,976.66 1,618,589,512.42 Other current liability 114,871,967.23 85,535,473.05 Total of current liability 11,508,088,171.23 9,111,339,988.48 Non-current liabilities: Long-term bank loan facilities 5,162,408,014.76 6,596,159,000.00 Bond payable 5,662,824,850.40 5,653,912,494.73 Including:preferred stock Perpetual capital securities Long-term payable 1,281,298,458.50 1,514,308,568.67 Long-term employee benefits payable Grants payable Provisions 1,805,878.96 Deferred income 346,910,934.93 380,949,662.27 Deferred tax liabilities 1,365,292.88 413,257.79 Other non-current liabilities 500,000,000.00 500,000,000.00 Total non-current liabilities 12,956,613,430.43 14,645,742,983.46 Total of liability 24,464,701,601.66 23,757,082,971.94 Equity Share capital 4,939,928,983.00 4,939,928,983.00 Other equity instrument Including:preferred stock Perpetual capital securities 14 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Reserves 15,208,155,424.07 15,207,210,810.89 Less: treasury shares 4,422,320.00 4,422,320.00 Other comprehensive income 134,965.02 Specialized reserve Surplus reserves 188,044,070.48 188,044,070.48 General risk reserve Retained earnings 2,565,857,679.05 1,885,538,821.49 Equity contributable to parent company 22,897,698,801.62 22,216,300,365.86 Minority interests 1,331,731,446.12 852,936,232.61 Total equity 24,229,430,247.74 23,069,236,598.47 Total liabilities and equity 48,694,131,849.40 46,826,319,570.41 Legal Representative: Li Zhaoting Person in charge of accounting:Huang Jinliang Accounting Dept Leader: Gao Feipeng 2.Parent Company Balance Sheet In RMB Items Year-end balance Year-beginning balance Current asset: Cash and bank balances 11,659,216,378.49 16,951,756,537.76 Financial assets at fair value through profit or loss Derivative financial assets Notes receivable 350,000.00 946,400.00 Account receivable 15,151,857.89 19,896,753.26 Advance payments 14,806,320.95 4,280,852.37 Interest receivable 52,920,132.78 Dividend receivable 570,000,000.00 Other receivable 5,947,624,193.36 4,925,419,456.78 Inventories 473,080,152.32 500,254,494.97 Held-for-sale assets Current portion of non-current assets Other current asset 1,498,915,249.58 2,000,019,211.84 Total of current assets 19,662,064,285.37 24,972,573,706.98 Non-current assets: Available-for-sale financial assets 100,000,056.00 15 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Held-to-maturity investments Long-term receivable Long term share equity investment 15,720,785,409.61 11,373,791,986.49 Property investment Fixed assets 45,734,411.57 49,516,721.87 Construction in progress Engineering material Fixed assets pending for disposal Productive biological assets Gas & petrol Intangible assets 9,700,844.48 9,951,171.11 Research and Development Expenditures Goodwill Long-term prepaid expenses Deferred income tax 337,853.35 3,712,603.85 Other non-current asset 1,381,400.00 Total of non-current assets 15,877,939,975.01 11,436,972,483.32 Total of assets 35,540,004,260.38 36,409,546,190.30 Current liabilities Short-term bank loan facilities 2,610,000,000.00 3,242,500,000.00 Financial liabilities at fair value through profit and loss Derivative financial liabilities Notes payable 159,820,750.00 Account payable 142,761,263.96 147,012,816.26 Advances from customers 1,811,587.90 10,587.90 Payroll payable 4,502,801.44 3,700,741.68 Tax payable 26,830,702.78 20,970,299.00 Interest payable 228,548,854.70 72,569,720.24 Dividend payable Other payable 2,384,725,301.05 2,889,692,312.04 Held-for-sale liabilities Current portion of non-current liabilities 2,077,233,333.36 400,005,000.00 Other current liability 16 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Total of current liability 7,476,413,845.19 6,936,282,227.12 Non-current liabilities: Long-term bank loan facilities 2,110,383,333.28 2,887,600,000.00 Bond payable 5,662,824,850.40 5,653,912,494.73 Including:preferred stock Perpetual capital securities Long-term payable Long-term employee benefits payable Grants payable Provisions Deferred income Deferred income tax Other non-current liabilities Total of Non-current liabilities 7,773,208,183.68 8,541,512,494.73 Total of liability 15,249,622,028.87 15,477,794,721.85 Equity Share capital 4,939,928,983.00 4,939,928,983.00 Other equity instrument Including:preferred stock Perpetual capital securities Reserves 15,131,386,936.27 15,130,191,736.27 Less: treasury shares 4,422,320.00 4,422,320.00 Other comprehensive income Specialized reserve Surplus reserves 169,054,846.15 169,054,846.15 Retained earnings 54,433,786.09 696,998,223.03 Total equity 20,290,382,231.51 20,931,751,468.45 Total liabilities and equity 35,540,004,260.38 36,409,546,190.30 3.Consolidated Income statement of the Report period In RMB Items Amount in this period Amount in last period I. Revenue 3,227,360,295.67 1,379,624,393.30 17 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Including: business revenue 3,227,360,295.67 1,379,624,393.30 Interest income Premiums earned Fees and commissions income II. Total operating cost 2,840,978,059.52 1,152,908,242.41 Including: Cost of sales 2,598,487,889.63 945,144,638.71 Interest expense Fees and commissions expense Cash surrender amount Net expenses of claim settlement Net provisions for insurance contract reserves Policy dividend expenses Reinsurance expenses Business taxes and surcharges 12,886,043.09 4,640,717.38 Selling expenses 22,296,940.65 16,830,747.06 Administrative expense 115,027,941.33 89,405,271.71 Financial expenses 93,741,122.98 94,701,974.75 Impairment loss on assets -1,461,878.16 2,184,892.80 Add: Gain from fair-value changes(“-“for loss) Investment income(“-“for loss) 14,625,434.19 -111,705.88 Including: investment income from -2,123,195.94 -111,705.88 associates and joint ventures Gain on foreign exchange(“-“for loss) Other income 104,939,239.00 III. Operating profit(“-”for loss) 505,946,909.34 226,604,445.01 Add:Non-operating income 10,584,897.05 92,721,612.12 Including:Gains from disposal of non-current assets Less:Non business expenses 618,747.35 233,375.42 Incl:Loss from disposal of 6,433.86 105.00 non-current assets IV. Profit before tax(“-“for loss) 515,913,059.04 319,092,681.71 18 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Less: Income tax expense 95,505,900.99 41,602,559.54 V. Net profit (“-“for net loss) 420,407,158.05 277,490,122.17 Net profit attributable to the owners of 390,258,136.00 255,873,197.91 parent company Minority interests 30,149,022.05 21,616,924.26 VI. Other comprehensive income after 136,333.95 tax Net of profit of other comprehensive income attributable to owners of the 136,333.95 parent company (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit 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 136,333.95 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 4.The effective portion of cash flow hed ges and losses 5.Translation differences in currency fin 136,333.95 ancial statements 6.Other Net after-tax of other comprehensive incom e attributable to Minority shareholders’ 19 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 equity VII. Total comprehensive income 420,543,492.00 277,490,122.17 Total comprehensive income attributable to the owner of the parent 390,394,469.95 255,873,197.91 company Total comprehensive income 30,149,022.05 21,616,924.26 attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share 0.080 0.060 (II)Diluted earnings per share 0.080 0.060 Legal Representative: Li Zhaoting Person in charge of accounting:Huang Jinliang Accounting Dept Leader: Gao Feipeng 4.Income statement of the Parent Company of the Report period In RMB Items Amount in this period Amount in last period I.Revenue 17,030,588.98 95,273,058.88 Less:Business cost 10,251,594.76 57,140,094.60 Business tax and surcharge 1,248,209.02 Selling expenses Administrative expense 13,048,365.78 19,838,850.46 Financial expenses 39,272,333.52 50,705,333.55 Impairment loss on assets 500,988.07 Add: Gain from fair-value changes(“-“for loss) Investment income(“-“for loss) 14,624,681.78 -111,705.88 Including: investment income from -2,123,948.35 -111,705.88 associates and joint ventures Other income II. Operational profit(“-”for loss) -32,666,220.39 -32,522,925.61 Add:Non-operating income 505.00 1,090,760.52 Including:Gains from disposal of non-current assets Less:Non-operating expenses Incl:Loss from disposal of non-current 20 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 assets III. Profit before tax(“-“for loss) -32,665,715.39 -31,432,165.09 Less: Income tax expense IV. Net profit (“-“for net loss) -32,665,715.39 -31,432,165.09 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 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 -32,665,715.39 -31,432,165.09 VII. Earnings per share: (I)Basic earnings per share (II)Diluted earnings per share 21 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 5. Consolidated income statement between the beginning of the year and end of the report period Items Amount in this period Amount in last period I.Revenue 7,868,645,823.58 4,261,683,547.71 Including:Operating income 7,868,645,823.58 4,261,683,547.71 Interest income Insurance gained Commission charge and commission income II. Total operating cost 6,765,980,153.47 3,477,937,920.11 Including:Operating cost 5,937,363,039.53 2,883,454,282.36 Interest expense Commission chare and commission expense Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 58,051,137.61 25,082,445.26 Selling expenses 51,381,175.80 48,408,463.62 Administrative expense 308,743,096.29 326,111,536.56 Financial expenses 411,695,344.38 189,141,367.36 Asset impairment loss -1,253,640.14 5,739,824.95 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 21,302,358.40 -29,947.57 Incl: investment gains from affiliates -17,629,688.77 -29,947.57 Gains from currency exchange(“-”for loss) Other income 191,619,239.00 III. Operational profit(“-”for loss) 1,315,587,267.51 783,715,680.03 Add:Non-business income 76,654,784.57 196,230,891.80 Incl:Gains from disposal of non-current assets 22 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Less:Non business expenses 1,068,918.78 245,864.76 Incl:Loss from disposal of non-current 36,971.00 4,535.74 assets IV.Total profit(“-”for loss) 1,391,173,133.30 979,700,707.07 Less:Income tax expenses 274,936,572.22 131,886,161.05 V. Net profit(“-”for net loss) 1,116,236,561.08 847,814,546.02 Net profit attributable to the owners of 1,026,113,886.37 801,836,908.63 parent company Minority shareholders’ equity 90,122,674.71 45,977,637.39 VI. Net after-tax of Other 134,965.02 comprehensive income Net after-tax of other comprehensive income attribut 134,965.02 able to owners of the parent company. (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit 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 134,965.02 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 4.The effective portion of cash flow hed ges and losses 5.Translation differences in currency fin 134,965.02 ancial statements 23 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 6.Other Net after-tax of other comprehensive incom e attributable to Minority shareholders’ equity VII. Total comprehensive income 1,116,371,526.10 847,814,546.02 Total comprehensive income attributable to the owner of the parent 1,026,248,851.39 801,836,908.63 company Total comprehensive income 90,122,674.71 45,977,637.39 attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share 0.210 0.20 (II)Diluted earnings per share 0.210 0.20 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. 6.Income Statement of the Parent Between the Beginning of the Year and End of the Report Period In RMB Items Amount in this period Amount in last period I.Revenue 55,628,270.16 479,120,880.32 Less:Business cost 38,343,858.04 293,280,979.66 Business tax and surcharge 4,833,522.28 521,358.24 Selling expenses 684,247.25 Administrative expense 35,867,422.34 47,190,288.66 Financial expenses 291,064,184.00 126,132,260.22 Asset impairment loss 221,249.92 230,615.03 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 21,300,415.79 -29,947.57 Incl: investment gains from affiliates -17,631,631.38 -29,947.57 Other income II. Operational profit -293,401,550.63 11,051,183.69 Add:Non-business income 6,893.00 1,142,016.45 Incl:Gains from disposal of non-current assets 24 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Less:Non business expenses Incl:Loss from disposal of non-current assets III.Total profit -293,394,657.63 12,193,200.14 Less:Income tax expenses 3,374,750.50 6,546,013.74 IV. Net profit -296,769,408.13 5,647,186.40 V. Net after-tax of Other comprehensive income (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit 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 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 -296,769,408.13 5,647,186.40 VII.Earnings per share (I)Basic earnings per share (II)Diluted earnings per share 25 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 7. Consolidated Cash Flow Statement Between the Beginning of the Year and End of the Report Period In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or 7,913,961,377.82 4,942,989,805.57 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 the financial assets that are measured at fair value and whose movement is counted to the current gain and loss Cash received as interest, processing fee and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned 298,618,513.71 237,437,874.03 Other cash received from business 1,165,187,495.09 160,137,838.12 operation Sub-total of cash inflow 9,377,767,386.62 5,340,565,517.72 Cash paid for purchasing of 6,928,907,180.99 2,439,731,746.83 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 26 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Cash paid for policy dividend Cash paid to staffs or paid for staffs 386,961,287.60 377,797,662.45 Taxes paid 757,077,217.86 438,787,541.72 Other cash paid for business activities 972,186,065.33 454,898,471.60 Sub-total of cash outflow from business 9,045,131,751.78 3,711,215,422.60 activities Cash flow generated by business 332,635,634.84 1,629,350,095.12 operation, net II.Cash flow generated by investing Cash received from investment 7,619,999,000.00 retrieving Cash received as investment gains 36,722,122.05 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 7,656,912,084.54 6,120,000.00 investment activities Cash paid for construction of fixed assets, intangible assets and other 1,702,772,272.62 430,192,703.84 long-term assets Cash paid as investment 7,870,751,027.51 299,846,640.00 Net increase of loan against pledge Net cash received from subsidiaries and 27,029,498.90 7,619,727.41 other operational units Other cash paid for investment 170,000,000.00 activities Sub-total of cash outflow due to 9,770,552,799.03 737,659,071.25 investment activities Net cash flow generated by investment -2,113,640,714.49 -731,539,071.25 III.Cash flow generated by financing Cash received as investment 368,016,041.50 7,077,999,994.53 Incl: Cash received as investment from 368,016,041.50 156,000,000.00 minor shareholders Cash received as loans 4,141,342,914.00 4,947,767,840.00 27 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Cash received from bond placing Other financing –related ash received 481,508,116.32 1,873,001,981.91 Sub-total of cash inflow from financing 4,990,867,071.82 13,898,769,816.44 activities Cash to repay debts 4,279,129,971.88 3,852,501,400.00 Cash paid as dividend, profit, or 1,051,568,859.99 873,511,708.17 interests Incl: Dividend and profit paid by 30,000,000.00 20,000,000.00 subsidiaries to minor shareholders Other cash paid for financing activities 493,432,737.76 211,932,472.30 Sub-total of cash outflow due to 5,824,131,569.63 4,937,945,580.47 financing activities Net cash flow generated by financing -833,264,497.81 8,960,824,235.97 IV. Influence of exchange rate -5,059,492.25 5,994,616.53 alternation on cash and cash equivalents V.Net increase of cash and cash -2,619,329,069.71 9,864,629,876.37 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 22,418,006,021.89 21,829,399,281.10 equivalents at the end of term 8. Cash Flow Statement of the Parent Between the Beginning of the Year and End of the Report Period In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or 62,187,688.55 542,513,717.67 rending of services Tax returned 1,170,987.52 Other cash received from business 7,556,107,048.49 200,000,000.00 operation Sub-total of cash inflow 7,618,294,737.04 743,684,705.19 Cash paid for purchasing of 173,174,099.99 523,615,425.75 merchandise and services Cash paid to staffs or paid for staffs 11,623,310.41 12,738,597.08 Taxes paid 13,066,407.94 15,235,441.04 28 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 Other cash paid for business activities 8,920,483,257.03 659,361,568.31 Sub-total of cash outflow from business 9,118,347,075.37 1,210,951,032.18 activities Cash flow generated by business -1,500,052,338.33 -467,266,326.99 operation, net II.Cash flow generated by investing Cash received from investment 7,619,999,000.00 retrieving Cash received as investment gains 608,932,047.17 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 8,228,931,047.17 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 11,684,624,110.50 1,448,701,140.00 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 11,854,624,110.50 1,448,708,940.00 investment activities Net cash flow generated by investment -3,625,693,063.33 -1,442,588,940.00 III.Cash flow generated by financing Cash received as investment 6,921,999,994.53 Cash received as loans 2,666,666,666.66 3,662,700,000.00 Cash received from bond placing Other financing –related ash received 312,673,897.76 70,281,601.36 Sub-total of cash inflow from 2,979,340,564.42 10,654,981,595.89 financing activities Cash to repay debts 2,397,150,000.02 2,170,050,000.00 Cash paid as dividend, profit, or 720,739,699.15 523,948,760.90 29 Dongxu Optoelectronic Technology Co., Ltd. The Third Quarterly Report 2017 interests Other cash paid for financing activities 28,679,113.18 245,087,948.72 Sub-total of cash outflow due to 3,146,568,812.35 2,939,086,709.62 financing activities Net cash flow generated by financing -167,228,247.93 7,715,894,886.27 IV. Influence of exchange rate 433,490.32 alternation on cash and cash equivalents V.Net increase of cash and cash -5,292,540,159.27 5,806,039,619.28 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 11,659,216,378.49 15,641,197,271.69 equivalents at the end of term II. Auditor‘s report Whether the Q3 report is audited □ Yes √ No The Q3 Report is not audited. Dongxu Optoelectronic Technology Co., Ltd. Board Chairman: Li Zhaoting Issue day approved by the Board of Directors:October 30,2017 30