Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report October 2019 1 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Section I. Important Note Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. All the directors are present the meeting of the Board for deliberating the Third Quarter Report of the Company in person. Wang Wenkui, person in charge of the Company, head of the accounting works Wang Huailin and Wang Huailin, accounting body principals (accountant in charge) hereby confirms that the Financial Report of the Third Quarterly Report is authentic, accurate and complete. 2 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Section II. Basic information of Company I. Main accounting data and index Whether it has retroactive adjustment or re-statement on previous accounting data or not □Yes √No Current period-end Period-end of last year Increase/decrease Total assets (RMB) 1,808,039,811.07 2,120,744,292.41 -14.75% Net assets attributable to shareholders of listed company 281,727,950.08 355,289,728.24 -20.70% (RMB) Increase/decrease in Increase/decrease in From year-begin to comparison with Current period comparison with same end of the Period year-begin to period of last year Period-end of last year Operating revenue (RMB) 277,519,139.93 -37.71% 1,034,716,511.73 -26.74% Net profit attributable to shareholders of the listed company -16,033,203.08 -101.83% -73,561,727.96 -300.54% (RMB) Net profit attributable to shareholders of the listed company -17,529,611.58 -525.19% -76,390,167.19 -64.65% after deducting non-recurring gains and losses (RMB) Net cash flow arising from -- -- -174,200,790.16 30.78% operating activities (RMB) Basic earnings per share -0.074 -100.00% -0.342 -302.35% (RMB/Share) Diluted earnings per share -0.074 -100.00% -0.342 -302.35% (RMB/Share) Weighted average ROE -5.53% -3.17% -23.10% -17.72% Items and amount of extraordinary profit (gains)/losses √Applicable □Not applicable In RMB Amount from year-begin to Item Note end of the Period Gains/losses from the disposal of non-current asset (including the -8,753.38 write-off that accrued for impairment of assets) 3 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to 2,778,036.68 national standards, which are closely relevant to enterprise’s business) Gains/losses of debt restructuring 897,752.10 Other non-operating income and expenditure except for the -36,400.96 aforementioned items Less: impact on income tax 266,154.33 Impact on minority shareholders’ equity (post-tax) 536,040.88 Total 2,828,439.23 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □ Applicable √ Not applicable In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss II. Statement of the total shareholders and shares-held of top ten shareholders at end of the Period 1. Number of common shareholders and preference shareholders with voting rights recovered and top ten common shareholders In Share Total preference shareholders Total number of common with voting rights recovered at shareholders at the end of report 8,970 0 period end of reporting period (if applicable) Top ten shareholders Amount of Number of share pledged/frozen Nature of Proportion of Amount of shares Shareholders non-tradable shareholder shares held held State of share Amount shares held China Potevio State-owned Company 53.49% 115,000,000 115,000,000 corporate Limited Shenwan Hongyuan Overseas 2.63% 5,646,500 0 Securities (Hong corporate Kong) co., LTD 4 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report GUOTAI JUNAN Overseas SECURITIES(H 2.55% 5,481,913 0 corporate ONGKONG) LIMITED Domestic nature Zheng Enyue 1.14% 2,449,739 0 person Domestic nature Sun Huiming 0.93% 2,007,110 0 person Guosen Securities (HK) Brokerage Overseas 0.88% 1,901,882 0 Company corporate Limited Domestic nature Gu Jinhua 0.87% 1,871,371 0 person BOCI Overseas SECURITIES 0.68% 1,466,945 0 corporate LIMITED Domestic nature Xiang Yan 0.42% 910,602 0 person Domestic nature Zheng Hongquan 0.39% 831,500 0 person Particular about top ten shareholders with tradable shares held Type of shares Shareholders Amount of tradable shares held Type Amount Domestically Shenwan Hongyuan Securities 5,646,500 listed foreign 5,646,500 (Hong Kong) co., LTD shares GUOTAI JUNAN Domestically SECURITIES(HONGKONG) 5,481,913 listed foreign 5,481,913 LIMITED shares Domestically Zheng Enyue 2,449,739 listed foreign 2,449,739 shares Domestically Sun Huiming 2,007,110 listed foreign 2,007,110 shares Domestically Guosen Securities (HK) Brokerage 1,901,882 listed foreign 1,901,882 Company Limited shares 5 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Domestically Gu Jinhua 1,871,371 listed foreign 1,871,371 shares Domestically BOCI SECURITIES LIMITED 1,466,945 listed foreign 1,466,945 shares Domestically Xiang Yan 910,602 listed foreign 910,602 shares Domestically Zheng Hongquan 831,500 listed foreign 831,500 shares Domestically Liang Wei 772,800 listed foreign 772,800 shares Explanation on associated Among the top ten shareholders, China Potevio Company Limited is neither a related party relationship among the top ten nor a person acting in concert with the others. It’s unknown by the Company whether there shareholders or consistent action are related parties or persons acting in concert among the other shareholders. Explanation on shareholders involving margin business about top N/A ten common shareholders (if applicable) 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 Top ten common shareholders or top ten common shareholders with un-restrict shares not held have a buy-back agreement dealing in reporting period 2. Total of shareholders with preferred stock held and the top ten shareholdings □Applicable √Not applicable 6 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Section III. Important events I. Particular about major changes from items of main accounting statements and financial indexes as well as reasons √ Applicable □Not applicable Items 2019-9-30 (RMB) 2018-12-31 (RMB) Changed amount (R +,- (%) Main reasons for major changes MB) 141,688,791.27 261,938,068.72 -120,249,277.45 -45.91% Account paid for procurement Monetary fund increased in the period Account paid in 32,143,134.36 188,848,712.69 -156,705,578.33 -82.98% The invoice of procurement repaid advance to suppliers in earlier was collected in the period, and written down the account paid in advance 17,366,462.65 9,472,383.76 7,894,078.89 83.34% Investment for the construction of Construction in product research & manufacturing progress center of subsidiary Putian Datang in the period Account received in 23,954,615.81 259,545,648.66 -235,591,032.85 -90.77% Part of the products were sold to advance offset the account received in advance during the period Taxes Payable 2,494,979.34 17,230,159.02 -14,735,179.68 -85.52% VAT payable declined at end of the period Long term payable 26,315,789.49 26,315,789.49 Carry out financial leasing business in the period, and has a balance of financial leasing payable at end of the period Total non-current 32,320,662.49 7,296,315.00 25,024,347.49 342.97% Carry out financial leasing business liabilities in the period, and the long-term payable increased at end of the period Retained profit -114,288,504.76 -40,726,776.80 -73,561,727.96 -180.62% Loss in the reporting period, and the accumulated retained profit declined. From Jan. to From Jan. to Changed amount (R +,- (%) Sept. of 2019 Sept. of 2018 MB) 24,032,020.74 16,474,946.82 7,557,073.92 45.87% Financing interest and expenses Financial expenses increased on a y-o-y basis -441,778.63 333,659.41 -775,438.04 -232.40% Joint-stock enterprise has more Investment income losses over that of last period 7 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Assets disposal 51,857.87 28,492,927.93 -28,441,070.06 -99.82% No material assets disposal occurred income in the period 2,546,510.07 3,975,586.87 -1,429,076.80 -35.95% Non-operating income as Non-operation government grants reckoned into income current gains/losses are declined over that of last period Operating profit -66,101,632.53 -8,592,622.57 -57,509,009.96 -669.28% 1. During the reporting period, the Total profit -63,844,230.26 -4,969,717.67 -58,874,512.59 -1184.67% industry has in the transition-period Net profit -65,196,745.52 -6,802,722.33 -58,394,023.19 -858.39% of 4G and 5G construction, affected by the capital expenditure and -73,561,727.96 -18,365,534.87 -55,196,193.09 -300.54% purchasing policies of key customers, sales income of the Company declined over that of last Net profit period; 2. The Company strengthen attributable to risk controls and industrial owners’ of parent restructuring in the period, and company removed the venue, operating costs is higher relatively; 3. the non-recurring income decreased over that of last period. -174,200,790.16 -251,675,588.51 77,474,798.35 30.78% The Company intensify efforts to Net cash flow repatriate funds, strengthen capital arising from controls, and the net cash out-flow operation activities from operating declined over that of last period Subtotal cash inflow 1,616,022.97 35,621,425.52 -34,005,402.55 -95.46% The net cash collected from disposal from investment fixed assets, intangible assets and activities other long-term assets in the period declined over that of last period -6,588,145.80 24,138,218.08 -30,726,363.88 -127.29% The net cash collected from disposal Net cash flow fixed assets, intangible assets and arising from other long-term assets in the period investment activities declined over that of last period Net cash flow 54,383,791.05 -2,745,163.86 57,128,954.91 2081.08% The loans paid on due in the period arising from decreased over that of lat period financing activities Net increase in cash -126,300,367.44 -230,374,891.34 104,074,523.90 45.18% The net cash flow arising from and cash equivalents operating and financing activities in the period are increased over that of last period 8 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report II. Progress and influence of the main events as well as solution analysis specification □ Applicable √ Not applicable Progress of shares buy-back □ Applicable √ Not applicable Implementation progress of the reduction of repurchases shares by centralized bidding □ Applicable √ Not applicable III. Commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period □ Applicable √ Not applicable There are no commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period. IV. Particular about security investment □ Applicable √ Not applicable The Company had no security investment in Period. V. Trust financing □ Applicable √ Not applicable The Company had no trust financing in Period. VI. Particulars about derivatives investment □ Applicable √ Not applicable The Company had no derivatives investment in Period. VII. Registration form for receiving research, communication and interview in the report period □ Applicable √ Not applicable No registration form for receiving research, communication or interview in the Period. VII. Guarantee outside against the regulation □Applicable √Not applicable The Company had no guarantee outside against the regulation in the reporting period. 9 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report IX. Non-operational fund occupation from controlling shareholders and its related party □ Applicable √ Not applicable The Company had no non-operational fund occupation form controlling shareholders and its related party in the period. 10 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Section IV. Financial Statement I. Financial statement 1. Consolidated Balance Sheet Prepared by Nanjing Putian Telecommunications Co., Ltd. In RMB Item 2019-9-30 2018-12-31 Current assets: Monetary funds 141,688,791.27 261,938,068.72 Settlement provisions Capital lent Tradable financial assets Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial assets Note receivable 33,660,917.60 46,475,656.01 Account receivable 939,330,525.77 941,068,459.35 Receivable financing Accounts paid in advance 32,143,134.36 188,848,712.69 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Other account receivable 40,271,859.67 33,734,948.67 Including: Interest receivable Dividend receivable Buying back the sale of financial assets Inventories 256,235,777.74 286,972,632.59 Contractual assets Assets held for sale Non-current asset due within one 11 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report year Other current assets 16,168,581.50 13,497,540.69 Total current assets 1,459,499,587.91 1,772,536,018.72 Non-current assets: Loans and payments on behalf Debt investment Finance asset available for sales 741,953.00 Other debt investment Held-to-maturity investment Long-term account receivable Long-term equity investment 181,618,438.63 183,244,080.23 Investment in other equity 741,953.00 instrument Other non-current financial assets Investment real estate 8,006,993.16 8,397,113.98 Fixed assets 108,499,135.27 112,504,807.11 Construction in progress 17,366,462.65 9,472,383.76 Productive biological asset Oil and gas asset Right-of-use assets Intangible assets 29,197,593.66 30,285,598.77 Expense on Research and Development Goodwill Long-term expenses to be 3,109,646.79 3,562,336.84 apportioned Deferred income tax asset Other non-current asset Total non-current asset 348,540,223.16 348,208,273.69 Total assets 1,808,039,811.07 2,120,744,292.41 Current liabilities: Short-term loans 462,901,567.72 445,010,000.00 Loan from central bank Capital borrowed Tradable financial liability 12 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Note payable 96,190,328.40 84,374,916.99 Account payable 699,582,470.84 743,028,953.62 Accounts received in advance 23,954,615.81 259,545,648.66 Contractual liability Selling financial asset of repurchase Absorbing deposit and inter-bank deposit Security trading of agency Security sales of agency Wage payable 18,014,505.48 21,132,336.19 Taxes payable 2,494,979.34 17,230,159.02 Other account payable 49,780,012.01 55,128,492.65 Including: Interest payable 396,333.33 454,333.33 Dividend payable 2,018,213.38 2,018,213.38 Commission charge and commission payable Reinsurance payable Liability held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 1,352,918,479.60 1,625,450,507.13 Non-current liabilities: Insurance contract reserve Long-term loans Bonds payable Including: Preferred stock Perpetual capital securities Lease liability Long-term account payable 26,315,789.49 13 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Long-term wages payable Accrual liability Deferred income 6,004,873.00 7,296,315.00 Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 32,320,662.49 7,296,315.00 Total liabilities 1,385,239,142.09 1,632,746,822.13 Owner’s equity: Share capital 215,000,000.00 215,000,000.00 Other equity instrument Including: Preferred stock Perpetual capital securities Capital public reserve 185,374,533.85 185,374,533.85 Less: Inventory shares Other comprehensive income -4,947,638.78 -4,947,588.58 Reasonable reserve Surplus public reserve 589,559.77 589,559.77 Provision of general risk Retained profit -114,288,504.76 -40,726,776.80 Total owner’ s equity attributable to 281,727,950.08 355,289,728.24 parent company Minority interests 141,072,718.90 132,707,742.04 Total owner’ s equity 422,800,668.98 487,997,470.28 Total liabilities and owner’ s equity 1,808,039,811.07 2,120,744,292.41 Legal representative: Wang Wenkui Person in charger of accounting works: Wang Huailin Person in charge of accounting organ: Wang Huailin 2. Balance Sheet of Parent Company In RMB Item 2019-9-30 2018-12-31 Current assets: 14 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Monetary funds 86,598,168.84 80,553,208.65 Tradable financial assets Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial assets Note receivable 12,294,343.98 6,620,178.00 Account receivable 519,970,462.38 586,635,878.62 Receivable financing Accounts paid in advance 7,803,837.06 155,717,638.43 Other account receivable 31,764,192.08 31,077,389.58 Including: Interest receivable Dividend receivable Inventories 105,089,637.14 143,432,315.11 Contractual assets Assets held for sale Non-current assets maturing within one year Other current assets 5,776,997.19 6,222,172.75 Total current assets 769,297,638.67 1,010,258,781.14 Non-current assets: Debt investment Available-for-sale financial assets 741,953.00 Other debt investment Held-to-maturity investments Long-term receivables Long-term equity investments 332,926,189.27 333,367,967.90 Investment in other equity 741,953.00 instrument Other non-current financial assets Investment real estate Fixed assets 47,712,149.88 50,769,872.87 Construction in progress 5,984,113.43 5,839,892.88 Productive biological assets Oil and natural gas assets 15 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Right-of-use assets Intangible assets 11,737,592.29 12,305,246.69 Research and development costs Goodwill Long-term deferred expenses 3,055,872.79 3,403,376.01 Deferred income tax assets Other non-current assets Total non-current assets 402,157,870.66 406,428,309.35 Total assets 1,171,455,509.33 1,416,687,090.49 Current liabilities: Short-term borrowings 382,901,567.72 355,000,000.00 Tradable financial liability Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable 95,817,840.05 80,759,989.55 Account payable 325,561,735.86 340,405,588.53 Accounts received in advance 4,072,334.23 227,951,168.81 Contractual liability Wage payable 8,874,942.68 7,854,213.23 Taxes payable -93,008.05 8,674,579.20 Other accounts payable 197,803,079.59 187,172,612.82 Including: Interest payable 396,333.33 Dividend payable Liability held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 1,014,938,492.08 1,207,818,152.14 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital 16 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report securities Lease liability Long-term account payable 26,315,789.49 Long term employee compensation payable Accrued liabilities Deferred income 1,000,000.00 1,000,000.00 Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 27,315,789.49 1,000,000.00 Total liabilities 1,042,254,281.57 1,208,818,152.14 Owners’ equity: Share capital 215,000,000.00 215,000,000.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 172,417,299.81 172,417,299.81 Less: Inventory shares Other comprehensive income Special reserve Surplus reserve 589,559.76 589,559.76 Retained profit -258,805,631.81 -180,137,921.22 Total owner’s equity 129,201,227.76 207,868,938.35 Total liabilities and owner’s equity 1,171,455,509.33 1,416,687,090.49 3. Consolidated Profit Statement (the period) In RMB Item Current Period Last Period I. Total operating income 277,519,139.93 445,518,808.43 Including: Operating income 277,519,139.93 445,518,808.43 Interest income Insurance gained Commission charge and commission income 17 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report II. Total operating cost 290,840,607.90 451,010,908.82 Including: Operating cost 217,793,388.10 365,244,189.15 Interest expense Commission charge and commission expense Cash surrender value Net amount of expense of compensation Net amount of withdrawal of insurance contract reserve Bonus expense of guarantee slip Reinsurance expense Tax and extras 1,479,817.40 1,932,774.55 Sales expense 30,816,177.32 37,646,375.59 Administrative expense 17,671,873.14 20,948,595.48 R&D expense 14,871,137.85 18,962,492.62 Financial expense 8,208,214.09 6,276,481.43 Including: Interest 10,155,341.90 6,654,462.22 expenses Interest income -1,644,355.60 405,484.76 Add: other income -574,917.29 1,503,777.90 Investment income (Loss is 451.53 -74,133.69 listed with “-”) Including: Investment income 451.53 -74,133.69 on affiliated company and joint venture The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”) Exchange income (Loss is listed with “-”) Net exposure hedging income (Loss is listed with “-”) Income from change of fair value (Loss is listed with “-”) Loss of credit impairment 743,808.60 (Loss is listed with “-”) Losses of devaluation of asset 656,223.89 (Loss is listed with “-”) 18 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Income from assets disposal -46,982.80 -1,663,890.87 (Loss is listed with “-”) III. Operating profit (Loss is listed with -13,199,107.93 -5,070,123.16 “-”) Add: Non-operating income 1,234,394.90 1,149,732.72 Less: Non-operating expense 50,455.76 44,095.97 IV. Total profit (Loss is listed with “-”) -12,015,168.79 -3,964,486.41 Less: Income tax expense -714,264.39 186,886.96 V. Net profit (Net loss is listed with “-”) -11,300,904.40 -4,151,373.37 (i) Classify by business continuity 1.continuous operating net profit -11,300,904.40 -4,151,373.37 (net loss listed with ‘-”) 2.termination of net profit (net loss listed with ‘-”) (ii) Classify by ownership 1.Net profit attributable to owner’s -16,033,203.08 -7,943,829.27 of parent company 2.Minority shareholders’ gains and 4,732,298.68 3,792,455.90 losses VI. Net after-tax of other comprehensive 72,045.56 136,536.55 income Net after-tax of other comprehensive income attributable to owners of parent 64,841.00 122,975.85 company (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1.Changes of the defined benefit plans that re-measured 2.Other comprehensive income under equity method that cannot be transfer to gain/loss 3.Change of fair value of investment in other equity instrument 4.Fair value change of enterprise's credit risk 5. Other (ii) Other comprehensive income 64,841.00 122,975.85 19 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report items which will be reclassified subsequently to profit or loss 1.Other comprehensive income under equity method that can transfer to gain/loss 2.Change of fair value of other debt investment 3.gain/loss of fair value changes for available-for-sale financial assets 4.Amount of financial assets re-classify to other comprehensive income 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset 6.Credit impairment provision for other debt investment 7.Cash flow hedging reserve 8.Translation differences arising on translation of foreign currency 64,841.00 122,975.85 financial statements 9.Other Net after-tax of other comprehensive income attributable to minority 7,204.56 13,560.70 shareholders VII. Total comprehensive income -11,228,858.84 -4,014,836.82 Total comprehensive income -15,968,362.08 -7,820,946.37 attributable to owners of parent Company Total comprehensive income 4,739,503.24 3,806,109.55 attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share -0.074 -0.037 (ii) Diluted earnings per share -0.074 -0.037 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party. Legal representative: Wang Wenkui 20 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Person in charger of accounting works: Wang Huailin Person in charge of accounting organ: Wang Huailin 4. Profit Statement of Parent Company (the period) In RMB Item Current Period Last Period I. Operating income 55,016,398.63 212,300,710.49 Less: Operating cost 46,017,065.17 185,380,547.20 Taxes and surcharge 339,926.58 1,218,648.39 Sales expenses 12,227,904.89 15,127,198.27 Administration expenses 8,590,057.27 9,686,875.92 R&D expenses 3,405,244.12 5,107,630.12 Financial expenses 7,055,637.40 5,692,165.34 Including: interest 10,781,415.05 5,799,507.17 expenses Interest income 63,737.62 163,300.52 Add: other income Investment income (Loss is 451.53 4,902,566.31 listed with “-”) Including: Investment income 451.53 -74,133.69 on affiliated Company and joint venture The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”) Net exposure hedging income (Loss is listed with “-”) Changing income of fair value (Loss is listed with “-”) Loss of credit impairment -2,496,905.43 (Loss is listed with “-”) Losses of devaluation of asset (Loss is listed with “-”) Income on disposal of assets -48,767.77 -1,594,623.47 (Loss is listed with “-”) II. Operating profit (Loss is listed with -25,164,658.47 -6,604,411.91 “-”) 21 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Add: Non-operating income 26,919.61 226,247.94 Less: Non-operating expense 50,000.00 4,298.87 III. Total Profit (Loss is listed with “-”) -25,187,738.86 -6,382,462.84 Less: Income tax IV. Net profit (Net loss is listed with -25,187,738.86 -6,382,462.84 “-”) (i)continuous operating net profit -25,187,738.86 -6,382,462.84 (net loss listed with ‘-”) (ii) termination of net profit (net loss listed with ‘-”) V. Net after-tax of other comprehensive income (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1.Changes of the defined benefit plans that re-measured 2.Other comprehensive income under equity method that cannot be transfer to gain/loss 3.Change of fair value of investment in other equity instrument 4.Fair value change of enterprise's credit risk 5. Other (II) Other comprehensive income items which will be reclassified subsequently to profit or loss 1.Other comprehensive income under equity method that can transfer to gain/loss 2.Change of fair value of other debt investment 3.gain/loss of fair value changes for available-for-sale financial assets 4.Amount of financial assets re-classify to other comprehensive income 22 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset 6.Credit impairment provision for other debt investment 7.Cash flow hedging reserve 8.Translation differences arising on translation of foreign currency financial statements 9.Other VI. Total comprehensive income -25,187,738.86 -6,382,462.84 VII. Earnings per share: (i) Basic earnings per share -0.117 -0.030 (ii) Diluted earnings per share -0.117 -0.030 5. Consolidated Profit Statement (form the year-begin to the period-end) In RMB Item Current Period Last Period I. Total operating income 1,034,716,511.73 1,412,369,413.38 Including: Operating income 1,034,716,511.73 1,412,369,413.38 Interest income Insurance gained Commission charge and commission income II. Total operating cost 1,105,935,444.51 1,454,717,185.78 Including: Operating cost 850,889,156.17 1,189,602,884.47 Interest expense Commission charge and commission expense Cash surrender value Net amount of expense of compensation Net amount of withdrawal of insurance contract reserve 23 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Bonus expense of guarantee slip Reinsurance expense Tax and extras 5,973,001.08 7,597,025.09 Sales expense 109,329,639.37 117,342,559.23 Administrative expense 64,931,448.81 68,339,170.75 R&D expense 50,780,178.34 55,360,599.42 Financial expense 24,032,020.74 16,474,946.82 Including: Interest 22,451,433.76 18,280,015.84 expenses Interest income 756,066.93 2,097,501.83 Add: other income 5,431,925.01 7,303,121.76 Investment income (Loss is -441,778.63 333,659.41 listed with “-”) Including: Investment income -441,778.63 333,659.41 on affiliated company and joint venture The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”) Exchange income (Loss is listed with “-”) Net exposure hedging income (Loss is listed with “-”) Income from change of fair value (Loss is listed with “-”) Loss of credit impairment 75,296.00 (Loss is listed with “-”) Losses of devaluation of asset -2,374,559.27 (Loss is listed with “-”) Income from assets disposal 51,857.87 28,492,927.93 (Loss is listed with “-”) III. Operating profit (Loss is listed with -66,101,632.53 -8,592,622.57 “-”) Add: Non-operating income 2,546,510.07 3,975,586.87 Less: Non-operating expense 289,107.80 352,681.97 IV. Total profit (Loss is listed with “-”) -63,844,230.26 -4,969,717.67 Less: Income tax expense 1,352,515.26 1,833,004.66 V. Net profit (Net loss is listed with “-”) -65,196,745.52 -6,802,722.33 24 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report (i) Classify by business continuity 1.continuous operating net profit -65,196,745.52 -6,802,722.33 (net loss listed with ‘-”) 2.termination of net profit (net loss listed with ‘-”) (ii) Classify by ownership 1.Net profit attributable to owner’s -73,561,727.96 -18,365,534.87 of parent company 2.Minority shareholders’ gains and 8,364,982.44 11,562,812.54 losses VI. Net after-tax of other comprehensive -55.77 929.55 income Net after-tax of other comprehensive income attributable to owners of parent -50.20 929.55 company (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1.Changes of the defined benefit plans that re-measured 2.Other comprehensive income under equity method that cannot be transfer to gain/loss 3.Change of fair value of investment in other equity instrument 4.Fair value change of enterprise's credit risk 5. Other (ii) Other comprehensive income items which will be reclassified -50.20 929.55 subsequently to profit or loss 1.Other comprehensive income under equity method that can transfer to gain/loss 2.Change of fair value of other debt investment 3.gain/loss of fair value changes for available-for-sale financial assets 25 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report 4.Amount of financial assets re-classify to other comprehensive income 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset 6.Credit impairment provision for other debt investment 7.Cash flow hedging reserve 8.Translation differences arising on translation of foreign currency -50.20 929.55 financial statements 9.Other Net after-tax of other comprehensive income attributable to minority -5.57 shareholders VII. Total comprehensive income -65,196,801.29 -6,801,792.78 Total comprehensive income -73,561,778.16 -18,364,698.27 attributable to owners of parent Company Total comprehensive income 8,364,976.87 11,562,905.49 attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share -0.342 -0.085 (ii) Diluted earnings per share -0.342 -0.085 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party. Legal representative: Wang Wenkui Person in charger of accounting works: Wang Huailin Person in charge of accounting organ: Wang Huailin 6. Profit Statement of Parent Company (form the year-begin to the period-end) In RMB Item Current Period Last Period I. Operating income 396,428,217.21 710,107,677.73 26 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Less: Operating cost 367,175,356.61 646,396,562.59 Taxes and surcharge 1,313,334.89 3,407,052.75 Sales expenses 40,603,458.09 48,750,963.33 Administration expenses 33,017,518.85 32,374,205.31 R&D expenses 12,053,250.85 15,267,815.70 Financial expenses 22,010,410.75 15,980,393.39 Including: interest 20,650,023.56 16,156,553.75 expenses Interest income 545,584.57 304,706.64 Add: other income 800,000.00 876,429.06 Investment income (Loss is -441,778.63 5,310,359.41 listed with “-”) Including: Investment income -441,778.63 333,659.41 on affiliated Company and joint venture The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”) Net exposure hedging income (Loss is listed with “-”) Changing income of fair value (Loss is listed with “-”) Loss of credit impairment 65,296.00 (Loss is listed with “-”) Losses of devaluation of asset -1,674,589.82 (Loss is listed with “-”) Income on disposal of assets -40,345.94 17,314,391.94 (Loss is listed with “-”) II. Operating profit (Loss is listed with -79,361,941.40 -30,242,724.75 “-”) Add: Non-operating income 981,722.20 2,220,793.77 Less: Non-operating expense 287,491.39 215,232.33 III. Total Profit (Loss is listed with “-”) -78,667,710.59 -28,237,163.31 Less: Income tax IV. Net profit (Net loss is listed with -78,667,710.59 -28,237,163.31 “-”) (i)continuous operating net profit -78,667,710.59 -28,237,163.31 (net loss listed with ‘-”) 27 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report (ii) termination of net profit (net loss listed with ‘-”) V. Net after-tax of other comprehensive income (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1.Changes of the defined benefit plans that re-measured 2.Other comprehensive income under equity method that cannot be transfer to gain/loss 3.Change of fair value of investment in other equity instrument 4.Fair value change of enterprise's credit risk 5. Other (II) Other comprehensive income items which will be reclassified subsequently to profit or loss 1.Other comprehensive income under equity method that can transfer to gain/loss 2.Change of fair value of other debt investment 3.gain/loss of fair value changes for available-for-sale financial assets 4.Amount of financial assets re-classify to other comprehensive income 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset 6.Credit impairment provision for other debt investment 7.Cash flow hedging reserve 28 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report 8.Translation differences arising on translation of foreign currency financial statements 9.Other VI. Total comprehensive income -78,667,710.59 -28,237,163.31 VII. Earnings per share: (i) Basic earnings per share -0.366 -0.131 (ii) Diluted earnings per share -0.366 -0.131 7. Consolidated Cash Flow Statement (form the year-begin to the period-end) In RMB Item Current Period Last Period I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor 956,964,700.46 1,286,615,100.29 services Net increase of customer deposit and inter-bank deposit Net increase of loan from central bank Net increase of capital borrowed from other financial institution Cash received from original insurance contract fee Net cash received from reinsurance business Net increase of insured savings and investment Cash received from interest, commission charge and commission Net increase of capital borrowed Net increase of returned business capital Net cash received by agents in sale and purchase of securities Write-back of tax received 7,497,786.72 4,289,615.88 29 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Other cash received concerning 40,017,543.26 27,943,664.20 operating activities Subtotal of cash inflow arising from 1,004,480,030.44 1,318,848,380.37 operating activities Cash paid for purchasing commodities and receiving labor 828,366,156.39 1,178,397,147.73 service Net increase of customer loans and advances Net increase of deposits in central bank and inter-bank Cash paid for original insurance contract compensation Net increase of capital lent Cash paid for interest, commission charge and commission Cash paid for bonus of guarantee slip Cash paid to/for staff and workers 176,788,081.38 185,026,140.83 Taxes paid 60,194,143.85 63,321,561.08 Other cash paid concerning 113,332,438.98 143,779,119.24 operating activities Subtotal of cash outflow arising from 1,178,680,820.60 1,570,523,968.88 operating activities Net cash flows arising from operating -174,200,790.16 -251,675,588.51 activities II. Cash flows arising from investing activities: Cash received from recovering 1,183,862.97 investment Cash received from investment 197,567.20 income Net cash received from disposal of fixed, intangible and other long-term 432,160.00 35,423,858.32 assets Net cash received from disposal of subsidiaries and other units Other cash received concerning 30 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report investing activities Subtotal of cash inflow from investing 1,616,022.97 35,621,425.52 activities Cash paid for purchasing fixed, 8,204,168.77 11,483,207.44 intangible and other long-term assets Cash paid for investment Net increase of mortgaged loans Net cash received from subsidiaries and other units obtained Other cash paid concerning investing activities Subtotal of cash outflow from investing 8,204,168.77 11,483,207.44 activities Net cash flows arising from investing -6,588,145.80 24,138,218.08 activities III. Cash flows arising from financing activities Cash received from absorbing investment Including: Cash received from absorbing minority shareholders’ investment by subsidiaries Cash received from loans 323,019,010.00 406,510,000.00 Other cash received concerning 58,561,263.89 financing activities Subtotal of cash inflow from financing 381,580,273.89 406,510,000.00 activities Cash paid for settling debts 283,632,574.54 385,550,000.00 Cash paid for dividend and profit 23,459,616.76 23,705,163.86 distributing or interest paying Including: Dividend and profit of minority shareholder paid by 5,623,300.00 subsidiaries Other cash paid concerning 20,104,291.54 financing activities Subtotal of cash outflow from financing 327,196,482.84 409,255,163.86 activities Net cash flows arising from financing 54,383,791.05 -2,745,163.86 31 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report activities IV. Influence on cash and cash equivalents due to fluctuation in 104,777.47 -92,357.05 exchange rate V. Net increase of cash and cash -126,300,367.44 -230,374,891.34 equivalents Add: Balance of cash and cash 201,369,317.42 311,331,284.54 equivalents at the period -begin VI. Balance of cash and cash 75,068,949.98 80,956,393.20 equivalents at the period -end 8. Cash Flow Statement of Parent Company (form the year-begin to the period-end) In RMB Item Current Period Last Period I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor 273,933,042.75 474,185,803.43 services Write-back of tax received 226,972.07 Other cash received concerning 32,841,184.43 115,782,784.40 operating activities Subtotal of cash inflow arising from 306,774,227.18 590,195,559.90 operating activities Cash paid for purchasing commodities and receiving labor 202,505,864.89 509,750,001.16 service Cash paid to/for staff and workers 73,169,249.50 76,138,859.61 Taxes paid 17,938,872.42 17,207,064.21 Other cash paid concerning 84,037,131.12 73,192,989.93 operating activities Subtotal of cash outflow arising from 377,651,117.93 676,288,914.91 operating activities Net cash flows arising from operating -70,876,890.75 -86,093,355.01 activities II. Cash flows arising from investing activities: Cash received from recovering 32 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report investment Cash received from investment 400,000.00 197,567.20 income Net cash received from disposal of fixed, intangible and other long-term 75,110.00 21,892,918.00 assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing 475,110.00 22,090,485.20 activities Cash paid for purchasing fixed, 1,002,480.46 7,474,536.72 intangible and other long-term assets Cash paid for investment Net cash received from subsidiaries and other units obtained Other cash paid concerning investing activities Subtotal of cash outflow from investing 1,002,480.46 7,474,536.72 activities Net cash flows arising from investing -527,370.46 14,615,948.48 activities III. Cash flows arising from financing activities: Cash received from absorbing investment Cash received from loans 223,019,010.00 312,000,000.00 Other cash received concerning 58,561,263.89 financing activities Subtotal of cash inflow from financing 281,580,273.89 312,000,000.00 activities Cash paid for settling debts 173,622,574.54 319,000,000.00 Cash paid for dividend and profit 18,485,620.63 14,749,795.66 distributing or interest paying Other cash paid concerning 20,000,000.00 financing activities Subtotal of cash outflow from financing 212,108,195.17 333,749,795.66 33 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report activities Net cash flows arising from financing 69,472,078.72 -21,749,795.66 activities IV. Influence on cash and cash equivalents due to fluctuation in exchange rate V. Net increase of cash and cash -1,932,182.49 -93,227,202.19 equivalents Add: Balance of cash and cash 23,812,669.19 110,026,464.66 equivalents at the period -begin VI. Balance of cash and cash 21,880,486.70 16,799,262.47 equivalents at the period -end II. Financial statement adjustment 1. Relevant items of the financial statement at beginning of the year when implementing the new financial instrument standards, new revenue standards or new leasing standards since 2019 √ Applicable □ Not applicable Consolidated Balance Sheet In RMB Item 2018-12-31 2019-01-01 Adjustment Current assets: Monetary funds 261,938,068.72 261,938,068.72 Settlement provisions Capital lent Tradable financial assets Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial assets Note receivable 46,475,656.01 46,475,656.01 Account receivable 941,068,459.35 941,068,459.35 Receivable financing Accounts paid in 188,848,712.69 188,848,712.69 advance 34 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Other account 33,734,948.67 33,734,948.67 receivable Including: Interest receivable Dividend receivable Buying back the sale of financial assets Inventories 286,972,632.59 286,972,632.59 Contractual assets Assets held for sale Non-current asset due within one year Other current assets 13,497,540.69 13,497,540.69 Total current assets 1,772,536,018.72 1,772,536,018.72 Non-current assets: Loans and payments on behalf Debt investment Finance asset available 741,953.00 -741,953.00 for sales Other debt investment Held-to-maturity investment Long-term account receivable Long-term equity 183,244,080.23 183,244,080.23 investment Investment in other 741,953.00 741,953.00 equity instrument Other non-current financial assets Investment real estate 8,397,113.98 8,397,113.98 35 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Fixed assets 112,504,807.11 112,504,807.11 Construction in progress 9,472,383.76 9,472,383.76 Productive biological asset Oil and gas asset Right-of-use assets Intangible assets 30,285,598.77 30,285,598.77 Expense on Research and Development Goodwill Long-term expenses to 3,562,336.84 3,562,336.84 be apportioned Deferred income tax asset Other non-current asset Total non-current asset 348,208,273.69 348,208,273.69 Total assets 2,120,744,292.41 2,120,744,292.41 Current liabilities: Short-term loans 445,010,000.00 445,010,000.00 Loan from central bank Capital borrowed Tradable financial liability Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Note payable 84,374,916.99 84,374,916.99 Account payable 743,028,953.62 743,028,953.62 Accounts received in 259,545,648.66 259,545,648.66 advance Contractual liability Selling financial asset of repurchase Absorbing deposit and 36 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report inter-bank deposit Security trading of agency Security sales of agency Wage payable 21,132,336.19 21,132,336.19 Taxes payable 17,230,159.02 17,230,159.02 Other account payable 55,128,492.65 55,128,492.65 Including: Interest 454,333.33 454,333.33 payable Dividend 2,018,213.38 2,018,213.38 payable Commission charge and commission payable Reinsurance payable Liability held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 1,625,450,507.13 1,625,450,507.13 Non-current liabilities: Insurance contract reserve Long-term loans Bonds payable Including: Preferred stock Perpetual capital securities Lease liability Long-term account payable Long-term wages payable Accrual liability Deferred income 7,296,315.00 7,296,315.00 Deferred income tax liabilities Other non-current 37 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report liabilities Total non-current liabilities 7,296,315.00 7,296,315.00 Total liabilities 1,632,746,822.13 1,632,746,822.13 Owner’s equity: Share capital 215,000,000.00 215,000,000.00 Other equity instrument Including: Preferred stock Perpetual capital securities Capital public reserve 185,374,533.85 185,374,533.85 Less: Inventory shares Other comprehensive -4,947,588.58 -4,947,588.58 income Reasonable reserve Surplus public reserve 589,559.77 589,559.77 Provision of general risk Retained profit -40,726,776.80 -40,726,776.80 Total owner’ s equity attributable to parent 355,289,728.24 355,289,728.24 company Minority interests 132,707,742.04 132,707,742.04 Total owner’ s equity 487,997,470.28 487,997,470.28 Total liabilities and owner’ s 2,120,744,292.41 2,120,744,292.41 equity Explanation Balance Sheet of Parent Company In RMB Item 2018-12-31 2019-01-01 Adjustment Current assets: Monetary funds 80,553,208.65 80,553,208.65 Tradable financial assets Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial 38 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report assets Note receivable 6,620,178.00 6,620,178.00 Account receivable 586,635,878.62 586,635,878.62 Receivable financing Accounts paid in 155,717,638.43 155,717,638.43 advance Other account 31,077,389.58 31,077,389.58 receivable Including: Interest receivable Dividend receivable Inventories 143,432,315.11 143,432,315.11 Contractual assets Assets held for sale Non-current assets maturing within one year Other current assets 6,222,172.75 6,222,172.75 Total current assets 1,010,258,781.14 1,010,258,781.14 Non-current assets: Debt investment Available-for-sale 741,953.00 -741,953.00 financial assets Other debt investment Held-to-maturity investments Long-term receivables Long-term equity 333,367,967.90 333,367,967.90 investments Investment in other 741,953.00 741,953.00 equity instrument Other non-current financial assets Investment real estate Fixed assets 50,769,872.87 50,769,872.87 Construction in progress 5,839,892.88 5,839,892.88 Productive biological 39 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report assets Oil and natural gas assets Right-of-use assets Intangible assets 12,305,246.69 12,305,246.69 Research and development costs Goodwill Long-term deferred 3,403,376.01 3,403,376.01 expenses Deferred income tax assets Other non-current assets Total non-current assets 406,428,309.35 406,428,309.35 Total assets 1,416,687,090.49 1,416,687,090.49 Current liabilities: Short-term borrowings 355,000,000.00 355,000,000.00 Tradable financial liability Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable 80,759,989.55 80,759,989.55 Account payable 340,405,588.53 340,405,588.53 Accounts received in 227,951,168.81 227,951,168.81 advance Contractual liability Wage payable 7,854,213.23 7,854,213.23 Taxes payable 8,674,579.20 8,674,579.20 Other accounts payable 187,172,612.82 187,172,612.82 Including: Interest payable Dividend payable 40 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Liability held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 1,207,818,152.14 1,207,818,152.14 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Lease liability Long-term account payable Long term employee compensation payable Accrued liabilities Deferred income 1,000,000.00 1,000,000.00 Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 1,000,000.00 1,000,000.00 Total liabilities 1,208,818,152.14 1,208,818,152.14 Owners’ equity: Share capital 215,000,000.00 215,000,000.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 172,417,299.81 172,417,299.81 Less: Inventory shares Other comprehensive income 41 Nanjing Putian Telecommunications Co., Ltd. 2019 Third Quarterly Report Special reserve Surplus reserve 589,559.76 589,559.76 Retained profit -180,137,921.22 -180,137,921.22 Total owner’s equity 207,868,938.35 207,868,938.35 Total liabilities and owner’s 1,416,687,090.49 1,416,687,090.49 equity Explanation 2. Explanation on comparative data in the early stage of retroactive adjustment while implemented the new financial instrument standards or new leasing standards since 2019 □ Applicable √ Not applicable III. Audit report Whether the 3rd quarterly report has been audited or not □Yes √ No The 3rd quarterly report of the Company has not been audited. Board of Directors of Nanjing Putian Telecommunications Co., Ltd. 31 October 2019 42