Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. Stock Code: 000505, 200505 Stock Name: *ST Pearl River A, *ST Pearl River B Announcement No. 2017-025 HaiNan Pearl River Holdings Co., Ltd. Abstract of the Report for the First Quarter of 2017 1 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. 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 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. Section II Profile of the Company I Financial results Whether the Company performed any retroactive adjustments to or restatement of its accounting data due to changes of accounting policies or correction of accounting errors □ Yes √ No January-March 2017 January-March 2016 +/-% Operating revenues (RMB) 250,701,694.22 80,025,245.10 213.28% Net profit attributable to shareholders of 13,757,116.56 -38,541,192.11 135.69% the Company (RMB) Net profit attributable to shareholders of the Company before exceptional profit and 14,595,277.71 -38,415,455.62 137.99% loss (RMB) Net operating cash flow (RMB) -77,228,574.91 124,823,160.52 -161.87% Basic earnings per share (RMB/share) 0.03 -0.09 133.33% Diluted earnings per share (RMB/share) 0.03 -0.09 133.33% Weighted average return on equity (%) 19.12% 0.00% 19.12% 31 March 2017 31 December 2016 +/-% Total assets (RMB) 1,090,959,173.69 1,385,469,635.17 -21.26% Net assets attributable to shareholders of 78,845,419.44 65,088,302.88 21.14% the Company (RMB) Exceptional profit and loss √ Applicable □ Not applicable Unit: RMB Item January-March 2017 Note Profit/loss on disposal of non-current assets (including offset amount of 167,691.55 asset impairment provisions) Capital occupation charges on non-financial enterprises that are charged 512,971.70 to the profit/loss for the Reporting Period Non-operating income and expense other than the above -1,539,967.75 Less: Income tax effects -42,187.36 Minority interests effects (after tax) 21,044.01 Total -838,161.15 -- 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 3 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. No such cases in the Reporting Period. II Total number of shareholders at the period-end and shareholdings of top ten shareholders 1. Numbers of common shareholders and preference shareholders with resumed voting rights as well as shareholdings of top ten shareholders Unit: share Total number of preference Total number of common shareholders with resumed 31,930 0 shareholders at the period-end voting rights at the period-end (if any) Shareholdings of top ten shareholders Name of Nature of Shareholding Number of Number of restricted Pledged or frozen shares shareholder shareholder percentage (%) shares held shares held Status of shares Number of shares Beijing Grain State-owned 28.95% 123,561,963 Group Co., Ltd. corporation Li Sheryn Zhan Foreign 4.84% 20,647,100 Ming individual BOC—Jiashi Securities Domestic Investment Fund non-state-owned 0.61% 2,595,200 in Value-added corporation Industry Domestic Yang Shuling 0.58% 2,458,000 individual Domestic Xu Zhen 0.52% 2,209,200 individual Domestic Gao Biao 0.50% 2,120,000 individual Foreign Yao Liyuan 0.46% 1,950,000 individual Foreign Zhang Xiaoxia 0.46% 1,949,250 individual Domestic Zhong Yi 0.38% 1,640,083 individual Domestic Wang Dao 0.37% 1,595,900 individual Shareholdings of top ten non-restricted shareholders Name of shareholder Number of non-restricted shares held Variety of shares 4 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. Variety Number RMB common Beijing Grain Group Co., Ltd. 123,561,963 123,561,963 shares Domestically Li Sheryn Zhan Ming 20,647,100 listed foreign 20,647,100 shares BOC—Jiashi Securities Investment Fund in RMB common 2,595,200 2,595,200 Value-added Industry shares RMB common Yang Shuling 2,458,000 2,458,000 shares RMB common Xu Zhen 2,209,200 2,209,200 shares RMB common Gao Biao 2,120,000 2,120,000 shares Domestically Yao Liyuan 1,950,000 listed foreign 1,950,000 shares Domestically Zhang Xiaoxia 1,949,250 listed foreign 1,949,250 shares RMB common Zhong Yi 1,640,083 1,640,083 shares RMB common Wang Dao 1,595,900 1,595,900 shares Among shareholders above, there exists no related-party relationship between the principal shareholder and other shareholders of the Company. Nor they are parties Related or acting-in-concert parties among the with concerted action as prescribed in the Information Disclosure Administrative above shareholders Methods for Changes in 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. The shareholder, Zhong Yi held 1,640,083 shares of the Company through the customer credit collateral securities trading account of Fortune Securities Co., Top ten common shareholders conducting Ltd.. The shareholder, Wang Dao held 1,295,900 shares of the Company through securities margin trading (if any) common account and held 300,000 shares of the Company through the customer credit collateral securities trading account of Cinda Securities Co., Ltd.. Did any of the top ten common shareholders or the top ten non-restricted common shareholders of the Company conduct any promissory repo during the Reporting Period? □ Yea √ No No such cases in the Reporting Period. 5 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. 2. Total number of preference shareholders and shareholdings of the top ten of them □ Applicable √ Not applicable 6 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. Section III Significant Events I Changes in major accounting statement items and financial indicators for the Reporting Period, as well as reasons for such changes √ Applicable □ Not applicable Item 03/31/2017 12/31/2016 +/- (%) Reason for change Monetary funds 145,198,515.20 246,504,351.39 -41.10% Mainly because of the repayment of loans and money for land transfer from subsidiary Hubei Pearl River Co., Ltd. in this Reporting Period Inventories 113,680,381.94 297,867,807.05 -61.84% Mainly because of subsidiary Shanghai Real Estate Co., Ltd.’s change of holding purpose of building it holds, from inventories to investment real estate and costs of the selling of real estate transaction from Hubei Company. Other current assets - 8,714,139.07 -100.00% Mainly because there are no such cases in this Reporting Period where subsidiary Hubei Company paid taxes in advance Investment real estate 41,424,771.83 19,244,780.80 115.25% Mainly because of subsidiary Shanghai Real Estate Co., Ltd.’s change of holding purpose of building it holds, from inventories to investment real estate Accounts payable 17,670,161.90 77,627,005.61 -77.24% Mainly because of the payment of parts of project fund from subsidiary Hubei Real 7 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. Estate Co., Ltd. in this Reporting Period Accounts received in 224,367,103.88 365,746,868.16 -38.66% Mainly because of advance income of the selling of real estate transaction from subsidiary Hubei Real Estate Co., Ltd. Non-current liabilities - 78,710,181.59 -100.00% Mainly because of due within one year repayment of loans from subsidiary Mudanjiang Travel Group Long-term borrowings 5,000,000.00 73,666,666.66 -93.21% Mainly because of repayment of loans from subsidiary Mudanjiang Travel Group Minority equity -11,470,075.98 -4,096,952.76 -179.97% Mainly because of dividend of subsidiary Hubei Real Estate Co., Ltd. Item January-March 2017 January-March 2016 +/- (%) Reason for change Operating revenues 250,701,694.22 80,025,245.10 213.28% Mainly because of income of the selling of real estate transaction from subsidiary Hubei Pearl River Co., Ltd. Operating costs 184,669,214.20 62,053,529.67 197.60% Mainly because of costs of the selling of real estate transaction from subsidiary Hubei Pearl River Co., Ltd. Taxes and surtaxes 11,359,640.40 4,535,479.61 150.46% Mainly because of the provision of related taxes for selling of real estate from subsidiary Hubei Pearl River Co., Ltd. Selling expenses 2,813,146.35 4,500,007.25 -37.49% Mainly because of the decrease of sales commission in this Reporting Period 8 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. Financial expenses 3,601,893.63 24,749,365.53 -85.45% Mainly because of repayment of the principal and decrease of financing costs in this Reporting Period Asset impairment loss -4,012,911.94 245,161.16 -1736.85% Mainly because of receiving parts of receivables in this Reporting Period Income tax expenses 8,208,612.14 29,699.94 27538.48% Mainly because of provision of income taxes for revenues from Hubei Pearl River Co., Ltd. and Shanghai Real Estate Co., Ltd. Minority interest 1,806,876.78 -2,335,161.42 177.38% Mainly because of income revenues from subsidiary Hubei Pearl River Co., Ltd. Net cash flow from -77,228,574.91 124,823,160.52 -161.87% Mainly because of operating activities decrease of receipt of house payment in advance from subsidiary Hubei Pearl River Co., Ltd. in this Reporting Period Net cash flow from 53,904,911.22 7,258,357.17 642.66% Mainly because of investment activities receiving cash from recovery of parts of investment and selling of parts of fixed assets and investment real estate Net cash flow from -77,982,172.50 -127,094,529.15 38.64% Mainly because of financing activities increase of receipts from loans in this Reporting Period II Progress of significant events and analysis & explanations on their influence and solutions √ Applicable □Not applicable (I) The Company signed the Supplementary Agreement (II) on the Profit Compensation Agreement that has additional conditions with Beijing Grain Group Co., Ltd. and Beijing State-owned Capital Management Center on February 15, 2017. After the signing of 9 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. the supplementary agreement, the profitability commitment period of the transaction is adjusted from 2016, 2017 and 2018 to 2017, 2018 and 2019, and if the transaction fails to be implemented in 2017, the first year of the profitability commitment period of this transaction will be the year when the target company completes the transaction. The net profit-attributable to the owner of the Company- of the consolidated financial statements after deducting non-recurring gains and losses committed by the target company for 2017, 2018, and 2019 will be adjusted accordingly to not less than RMB 130.1115 million, RMB 150.3937 million and RMB 162.1605 million. (II) To resolve competition between the controlling shareholders and the listed company, to safeguard the interests of listed companies and small and medium shareholders, the Company decides to terminate the grain trade contract signed by parties concerned, to recover the commercial acceptance bill and authorize the management of the Company to handle the specific business and contract’s cancellation and termination. (III) According to the relevant issues raised in "The Notice of the First Review Feedback of China Securities Regulatory Commission Administrative Licensing Project, the Company has updated and revised documents related to major assets reorganization such as the auditing report of the transaction object and files for review of listed companies, has seriously studied and implemented the helpful feedback and has replied to questions raised as required together with the agency in accordance with the latest financial status of the Company and the target company. (IV) In order to ensure the smooth progress of this major assets reorganization, the Company determined to terminate the cooperation agreement with Beijing Anxin Law Firm and entrusted Beijing Zhonglun Law Firm as the special legal adviser for this major assets reorganization, providing documents related to the major assets reorganization such as the legal opinion after the friendly consultations with Beijing Anxin Law Firm and Beijing Zhonglun Law Firm. (V) The progress of the Company's joint and several liability guarantee for ICBC Mudanjiang Sub-Branch and China Citic Bank Mudanjiang Sub-Branch and the Company’s liability of counter guarantee for Heilongjiang Xinzheng Investment Guarantee Group Co., Ltd.: the Company has received the notice from ICBC Mudanjiang Sub-Branch, China Citic Bank Mudanjiang Sub-Branch and Heilongjiang Xinzheng Investment Guarantee Group Co., Ltd. that the Company’s related liabilities have been lifted after the full return of loans by Mudanjiang Pearl River Wanjia Tourism Investment Development Group Co., Ltd.. Generalization of significant events Date of disclosure Index The Company signed the Supplementary Agreement (II) on the Profit Compensation Agreement that has additional conditions with Beijing Grain Group Co., Ltd. and Beijing State-owned Capital Management Center on February 15, 2017. After the signing of the supplementary agreement, the profitability commitment period of the transaction is adjusted from 2016, 2017 and 2018 to 2017, 2018 and 2019, and if the transaction fails to be http://www.cninfo.com.cn implemented in 2017, the first year of the profitability commitment period of 02/16/2017 Announcement No.: this transaction will be the year when the target company completes the 2017-003 transaction. The net profit-attributable to the owner of the Company- of the consolidated financial statements after deducting non-recurring gains and losses committed by the target company for 2017, 2018, and 2019 will be adjusted accordingly to not less than RMB 130.1115 million, RMB 150.3937 million and RMB 162.1605 million. To resolve competition between the controlling shareholders and the listed company, to safeguard the interests of listed companies and small and medium http://www.cninfo.com.cn shareholders, the Company decides to terminate the grain trade contract signed 03/07/2017 Announcement No.: by parties concerned, to recover the commercial acceptance bill and authorize 2017-009 the management of the Company to handle the specific business and contract’s cancellation and termination. 10 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. According to the relevant issues raised in "The Notice of the First Review Feedback of China Securities Regulatory Commission Administrative Licensing Project, the Company has updated and revised documents related to http://www.cninfo.com.cn major assets reorganization such as the auditing report of the transaction object 03/17/2017 Announcement No.: and files for review of listed companies, has seriously studied and implemented 2017-012 the helpful feedback and has replied to questions raised as required together with the agency in accordance with the latest financial status of the Company and the target company. In order to ensure the smooth progress of this major assets reorganization, the Company determined to terminate the cooperation agreement with Beijing http://www.cninfo.com.cn Anxin Law Firm and entrusted Beijing Zhonglun Law Firm as the special legal 04/01/2017 Announcement No.: adviser for this major assets reorganization, providing documents related to the 2017-015 major assets reorganization such as the legal opinion after the friendly consultations with Beijing Anxin Law Firm and Beijing Zhonglun Law Firm. The progress of the Company's joint and several liability guarantee for ICBC Mudanjiang Sub-Branch and China Citic Bank Mudanjiang Sub-Branch and the Company’s liability of counter guarantee for Heilongjiang Xinzheng Investment Guarantee Group Co., Ltd.: the Company has received the notice http://www.cninfo.com.cn from ICBC Mudanjiang Sub-Branch, China Citic Bank Mudanjiang 04/11/2017 Announcement No.: Sub-Branch and Heilongjiang Xinzheng Investment Guarantee Group Co., Ltd. 2017-017 that the Company’s related liabilities have been lifted after the full return of loans by Mudanjiang Pearl River Wanjia Tourism Investment Development Group Co., Ltd.. III Commitments of the Company’s actual controller, shareholders, related parties and acquirer, as well as the Company and other commitment makers, unfulfilled in this reporting period √ Applicable □ Inapplicable For details, please refer to the Report for the First Quarter of 2017 disclosed at the same time with this Abstract on www.cninfo.com.cn. IV Operating result forecast for January-June 2017 Warning of a forecast deficit or considerable YoY change in the accumulative net profit made during the period from the beginning of the year to the end of the next reporting period, as well as explanation of why: □ Applicable √ Not applicable V Securities investments □ Applicable √ Not applicable No such cases in the Reporting Period. 11 Abstract of the Report for the First Quarter of 2017 of HaiNan Pearl River Holdings Co., Ltd. VI Investments in derivative financial instruments □ Applicable √ Not applicable No such cases in the Reporting Period. VII Visits paid to the Company in the Reporting Period for purposes of research, communication, interview, etc. □ Applicable √ Not applicable No such cases in the Reporting Period. 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 by the controlling shareholder or its related parties for non-operating purposes □ Applicable √ Not applicable No such cases in the Reporting Period. HaiNan Pearl River Holdings Co., Ltd. April 29, 2017 12