HaiNan Pearl River Holdings Co., Ltd. Abstract of Third Quarter Report 2016 Stock Code: 000505, 200505 Stock Name: *ST Pearl River A, *ST Pearl River B Announcement No. 2016-096 HAINAN PEARL RIVER HOLDINGS CO., LTD. ABSTRACT OF THIRD QUARTER REPORT 2016 1 HaiNan Pearl River Holdings Co., Ltd. Abstract of Third Quarter Report 2016 Section I Important Statements The Board of Directors, the Supervisory Committee, directors, supervisors and senior management staff of HaiNan Pearl River Holdings Co., Ltd. (hereinafter referred to as “the Company”) warrant that the information carried in this report is factual, accurate and complete, without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that. All directors have attended the board session for reviewing this report. Wang Chunli, company principal, Guan Ying, chief of the accounting work and Wu Xiukun, chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual, accurate and complete. This Report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail. 2 HaiNan Pearl River Holdings Co., Ltd. Third Quarter Report 2016 Section II Financial Highlights & Shareholder Changes I Highlights of accounting data and financial indicators Whether the Company performs any retroactive adjustments to or restatements of its accounting data of last year due to change in accounting policies or correction of accounting errors □ Yes √ No 30 September 2016 31 December 2015 +/- (%) Total assets (RMB) 1,905,501,859.63 1,714,444,000.65 11.14% Net assets attributable to shareholders of the Company -307,928,239.56 -217,136,869.15 -41.81% (RMB) July-September January-September YoY +/- (%) YoY +/- (%) 2016 2016 Operating revenues (RMB) 68,143,078.33 30.86% 217,175,606.73 15.40% Net profit attributable to shareholders of the Company -43,420,775.53 22.02% -90,791,370.41 -165.57% (RMB) Net profit attributable to shareholders of the Company -44,205,595.65 24.80% -129,970,101.32 20.06% excluding exceptional profit and loss (RMB) Net cash flows from operating -- -- 173,185,063.30 16.08% activities (RMB) Basic earnings per share -0.10 23.08% -0.21 -162.50% (RMB/share) Diluted earnings per share -0.10 23.08% -0.21 -162.50% (RMB/share) Weighted average return on 0.00% 0.00% 0.00% 0.00% equity (%) Unit: RMB Item January-September 2016 Note Profit/loss on disposal of non-current assets (including offset 284,912.66 amount of asset impairment provisions) Capital occupation charges on non-financial enterprises that are 4,368,243.68 charged to the profit/loss for the Reporting Period Non-operating income and expense other than the above -3,682,689.74 Other profit/loss that meet the definition of exceptional 38,155,550.74 3 HaiNan Pearl River Holdings Co., Ltd. Third Quarter Report 2016 profit/loss Less: Corporate income tax -27,926.79 Minority interests (after tax) -24,786.78 Total 39,178,730.91 -- Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Profit and Loss, or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss □ Applicable √ Not applicable No such cases in the Reporting Period. II Total number of shareholders and shareholdings of top 10 shareholders at the period-end 1. Total number of ordinary shareholders and preference shareholders who had resumed their voting right & shareholdings of top 10 shareholders at the period-end Unit: share Total number of preference Total number of ordinary shareholders who had shareholders at the end of the 35,607 resumed their voting right 0 Reporting Period at the end of the Reporting Period (if any) Shareholdings of top 10 shareholders Number of Pledged or frozen shares Name of Nature of Shareholding Number of restricted shareholder shareholder percentage shares held Status Number shares held Domestic BGG non-state-owne 26.36% 112,479,478 d corporation LI LEON Foreign 2.63% 11,215,043 ZHAN WEI individual YAO XIU Foreign 2.31% 9,850,128 GUANG individual Chongqing International Trust Co., Domestic Ltd.—Yuxin non-state-owne 1.83% 7,827,463 Innovation d corporation Advantage No. 11 Assembled Funds Trust 4 HaiNan Pearl River Holdings Co., Ltd. Third Quarter Report 2016 Domestic Chen Huanan 0.66% 2,802,117 individual Domestic Xu Zhen 0.58% 2,462,300 individual Beijing Shen Zhou Mu Investment Domestic Fund non-state-owne 0.55% 2,343,818 Management d corporation Co., Ltd. – Hongyan Shen Zhou Mu Fund Foreign Yao Liyuan 0.47% 2,005,600 individual Domestic Zhang Xiaoxia 0.46% 1,949,250 individual Beijing Shen Zhou Mu Investment Fund Management Domestic Co., Ltd. non-state-owne 0.42% 1,795,300 –Shangshan d corporation Shen Zhou Mu No. 5 Securities Investment Fund Shareholdings of top 10 non-restricted shareholders Number of non-restricted shares held at the Type of shares Name of shareholder period-end Type Number RMB ordinary BGG 112,479,478 112,479,478 share Domestically LI LEON ZHAN WEI 11,215,043 listed foreign 11,215,043 share Domestically YAO XIU GUANG 9,850,128 listed foreign 9,850,128 share Chongqing International Trust 7,827,463 RMB ordinary 7,827,463 Co., Ltd.—Yuxin Innovation 5 HaiNan Pearl River Holdings Co., Ltd. Third Quarter Report 2016 Advantage No. 11 Assembled share Funds Trust RMB ordinary Chen Huanan 2,802,117 2,802,117 share RMB ordinary Xu Zhen 2,462,300 2,462,300 share Beijing Shen Zhou Mu Investment RMB ordinary Fund Management Co., Ltd. – 2,343,818 2,343,818 share Hongyan Shen Zhou Mu Fund Domestically Yao Liyuan 2,005,600 listed foreign 2,005,600 share Domestically Zhang Xiaoxia 1,949,250 listed foreign 1,949,250 share Beijing Shen Zhou Mu Investment Fund Management Co., Ltd. RMB ordinary 1,795,300 1,795,300 –Shangshan Shen Zhou Mu No. 5 share Securities Investment Fund Among shareholders above, there exists no related-party relationship between the principal shareholder and other shareholders of the Company. Nor they are parties with concerted Related or act-in-concert parties action as prescribed in the Information Disclosure Administrative Methods for Changes in among the shareholders above Shareholding of Shareholders of Listed Companies. And it is unknown whether there is related-party relationship among other shareholders and whether they are prescribed parties with concerted action. Did any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company conduct any promissory repo during the Reporting Period? □ Yea √ No No such cases in the Reporting Period. 2. Total number of preference shareholders and shareholdings of the top 10 of them at the period-end □ Applicable √ Not applicable Section III Significant Events I Changes in main accounting statement items and financial indicators in the Reporting Period, as well as reasons for the changes √ Applicable □ Not applicable 6 HaiNan Pearl River Holdings Co., Ltd. Third Quarter Report 2016 (I) Balance sheet items Unit: RMB 30 September 31 December Change Item Main reason for change 2016 2015 (%) Increase in the property management fees receivable by the Accounts property & hotel management subsidiary and the account receivable 26,338,352.39 17,161,981.62 53.47% receivable by the Company for grain trading Accounts paid in advance 208,170,541.47 108,236,943.90 92.33% Increase in the prepayment in grain trading Increased development costs of the Meilin Phase III project of Inventories 693,760,735.17 531,145,489.05 30.62% subsidiary Hubei Pearl River Available-for-sal Investment in Chongqing Longkin Network Technology Co., e financial assets 31,411,309.90 11,411,309.90 175.26% Ltd. in the current period Long-term deferred Heilongjiang Longshi Pearl River Media Co., Ltd. was expenses 2,754,324.21 8,029,043.26 -65.70% deconsolidated for the current period Short-term borrowings 20,000,000.00 - 100.00% Borrowing from Chongqing Trust Increase in the account payable by sub-subsidiary Hubei Pearl Accounts River Real Estate Development Co., Ltd. for construction payable 77,846,691.18 24,313,483.40 220.18% service Accounts received in House pre-sale revenue received by subsidiary Hubei Pearl advance 873,746,833.94 428,054,670.19 104.12% River Increase in the prepaid taxes on the advances from house buyers of sub-subsidiary Hubei Pearl River Real Estate Taxes payable -51,822,202.70 -5,255,663.63 -886.03% Development Co., Ltd. Other accounts Increase in borrowings from Beijing Wanfa Real Estate payable 964,376,656.93 561,278,959.68 71.82% Development Co., Ltd. Non-current liabilities due within one year 66,456,595.19 353,287,364.69 -81.19% Repayment of borrowings from Chongqing Trust Long-term borrowings 131,000,000.00 390,333,333.34 -66.44% Some borrowings were repaid (II) Items in the income statement and the cash flow statement Unit: RMB January-Sept January-Sept Change Item Main reason for change ember 2016 ember 2015 (%) Selling Increase in the sales commission expenses of sub-subsidiary Hubei Pearl expenses 13,640,847.59 8,424,409.14 61.92% River Real Estate Development Co., Ltd. Finance costs 59,470,769.90 98,672,199.56 -39.73% Some borrowings were repaid Return on -69.47% An income was generated from the sale of the Southwest Securities shares 7 HaiNan Pearl River Holdings Co., Ltd. Third Quarter Report 2016 investment 37,851,133.96 123,966,408.1 in the same period of last year, while there were no such events in the 8 current period Non-operatin 2353.11 Some fixed assets were discarded and the overdue fine in relation to the g expense 6,280,006.34 256,002.30 % Southwest Securities shares held by the Company was paid Corporate Recognized deferred tax assets were reversed in the same period of last income tax 186,308.86 15,833,774.84 -98.82% year, while there were no such events in the current period Other Other comprehensive income shifted to return on investment due to the comprehensi -125,127,595. sale of the Southwest Securities shares held by the Company in the same ve income - 63 100.00% period of last year, while there were no such events in the current period Net cash flows from The sale of the Southwest Securities shares held by the Company investing -22,680,197.1 generated bulk cash in the same period of last year, while there were no activities 5 99,519,007.70 -122.79% such events in the current period Net cash flows from financing -209,839,890. -100,576,038. activities 23 32 -108.64% Decrease in financings secured and increase in borrowings repaid II Progress on significant events, as well as the influence and solutions √ Applicable □ Not applicable Content Disclosure date Index On 19 July 2016, Beijing Wanfa Real Estate Development Co., Ltd. and BGG had signed Equity Transfer Agreement, which Beijing Wanfa Real Estate Development Co., Ltd. transferred 112,479,478 share, all its holding share of the Company , 26.36% of the total to BGG, the transfer event had been www cninfo com cn 2016-09-07 approved by the State-owned Assets Announcement No. 2016-069 Supervision and Administration Commission and completed the transfer on 5 September 2016, BGG now is the first majority shareholder of the Company bu the actual controller still is Beijing State-owned Assets Supervision and Administration Commission. On 8 August 2016, the Company received Permission Recombination Inquiry Letter [2016] No. 52 of www cninfo com cn 2016-10-25 Recombination Inquiry Letter to HaiNan Announcement No. 2016-091 Pearl River Holdings Co., Ltd. (hereinafter referred to as Inquiry Letter) 8 HaiNan Pearl River Holdings Co., Ltd. Third Quarter Report 2016 issued by SZSE . SZSE had proposed several opinions to the significant recombination, and the Company will actively reply the Inquiry Letter and relevant content, and will conduct audit, evaluation with each trading party and promote the evaluation report to the State-owned assets for the record. So far, the reply to the Inquiry Letter and the revision of recombination preplan in line with Management Method of Significant Asset Recombination of Listing Company (New) had been Completed, the relevant signature of the documents was under processing. III Commitments of the Company, its shareholders, actual controller, acquirer, directors, supervisors, senior management or other related parties fulfilled in the Reporting Period or ongoing at the period-end □ Applicable √ Not applicable No such cases in the Reporting Period. IV Performance forecast for Y2016 Warning of possible loss or considerable YoY change in the accumulative net profit made during the year-beginning to the end of the next reporting period, as well as the reasons □ Applicable √ Not applicable V Securities investment □ Applicable √ Not applicable No such cases in the Reporting Period. VI Investment in derivative financial instruments □ Applicable √ Not applicable No such cases in the Reporting Period. VII Visits paid to the Company for purposes of research, communication, interview, etc. during the Reporting Period √ Applicable □ Not applicable 9 HaiNan Pearl River Holdings Co., Ltd. Third Quarter Report 2016 Date of visit Way of visit Type of visitor About Known about the operation situation 2016-01-08 By phone Individual of the Company 2016-01-09 By phone Individual Query name lists of shareholders Known about the operation situation 2016-01-22 By phone Individual of the Company 2016-02-28 By phone Individual isclosure time of annual report Known about the sale progress of the 2016-03-24 By phone Individual assets of the Company Known about recombination progress 2016-06-22 Other Individual of the Company 2016-07-13 Other Individual Query name lists of shareholders Known about resumption time of 2016-09-09 Other Individual Company stock VIII Illegal provision of guarantees for external parties □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s funds for non-operating purposes by the controlling shareholder and its related parties □ Applicable √ Not applicable No such cases in the Reporting Period. HaiNan Pearl River Holdings Co., Ltd. 31 October 2016 10