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珠江B:2017年第三季度报告全文(英文版)2017-10-31  

						HaiNan Pearl River Holdings Co., Ltd.                  Third Quarter Report 2017




            HAINAN PEARL RIVER HOLDINGS CO., LTD.

                           THIRD QUARTER REPORT 2017




                                        October 2017




                                                                                   1
HaiNan Pearl River Holdings Co., Ltd.                                 Third Quarter Report 2017




                                   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.
Director Xue Chunlei didn’t attend the board session in person due to the cause of work,
authorizing director Zhao Yinhu to attend and vote. Other directors have attended the board
session for reviewing this report in person.
Wang Chunli, company principal, Guan Ying, chief of the accounting work and Guan Ying,
head of the accounting department (head of accounting) of the Company, hereby confirm that
the Financial Report carried 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 2017




                                       Section II Company Fundamentals

I Key Consolidated Financail Results

Indicate by tick mark whether the Company needs to retrospectively restate any of its accounting data.

√Yes □No
Reason:
Business merger under the same control

                                                                               December 31, 2016                       Change
                                            September 30, 2017
                                                                   Before adjustment       After adjustment       After adjustment

Total assets (RMB)                              4,747,421,920.84      1,385,469,635.17       5,007,343,324.00                   -5.19%

Equity attributable to owners of the
                                                1,680,315,717.61        65,088,302.88        2,032,242,890.44                -17.32%
parent (RMB)

                                                                                          January-September
                                            July-September 2017      YoY change                                     YoY change
                                                                                                2017

Net sales (RMB)                                 2,232,700,520.70                -22.04%      5,515,262,797.63                   -7.79%

Net     margin        attributable     to
shareholders     of    the   Company               42,164,080.63                14.41%         113,833,212.48                   60.02%
(RMB)

Net     margin        attributable     to
shareholders     of    the   Company
                                                  -18,544,858.72               -148.90%            5,766,539.70              116.35%
before exceptional gains and losses
(RMB)

Net cash from operating activities
                                                    --                    --                 -1,071,443,766.31              -278.96%
(RMB)

Basic earnings per share
                                                            0.07                16.67%                    0.18                  63.64%
(RMB/share)

Diluted earnings per share
                                                            0.07                16.67%                    0.18                  63.64%
(RMB/share)

Weighted average return on equity
                                                          2.05%                  -0.08%                  5.45%                  1.38%
(%)

Exceptional gains and losses:

√ Applicable □ Not applicable
                                                                                                                            Unit: RMB

                                     Item                                January-September 2017                    Note

Capital occupation charges on non-financial enterprises that are                       16,810,053.35


                                                                                                                                         3
HaiNan Pearl River Holdings Co., Ltd.                                                                       Third Quarter Report 2017


charged to the profit/loss for the Reporting Period

Reporting Period net profit/loss of subsidiaries acquired through
business mergers under the same control from period-beginnings                      117,422,986.25
to merger dates

Non-operating income and expense other than above                                     -1,007,624.03

     Minority interests effects (after tax)                                          25,158,742.79

Total                                                                               108,066,672.78                    --

Explanation of why the Company classified an item as an exceptional gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gains and
Losses, or reclassified any exceptional gain/loss item given as an example in the said explanatory announcement as a recurrent
gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.


II Total Number of Shareholders and Shareholdings of Top 10 Shareholders at Period-End

1. Numbers of Common Shareholders and Preference Shareholders with Resumed Voting Rights, and
Shareholdings of Top 10 Shareholders

                                                                                                                             Unit: share

                                                                        Total number of preference shareholders
Total number of common
                                                                30,806 with resumed voting rights at period-end (if                  0
shareholders at period-end
                                                                        any)

                                                         Top 10 shareholders

                                     Nature of    Shareholding Total shares held Restricted shares       Pledged or frozen shares
        Name of shareholder
                                    shareholder    percentage       at period-end   held at period-end   Status            Number

BEIJING GRAIN GROUP CO., State-owned
                                                        28.95%        123,561,963
LTD.                               corporation

                                   Foreign
LI SHERYN ZHAN MING                                      4.99%         21,282,800
                                   individual

                                   Domestic
MEI JIANYING                                             0.61%          2,583,803
                                   individual

                                   Foreign
YAO LIYUAN                                               0.46%          1,950,000
                                   individual

                                   Domestic
ZHANG XIAOXIA                                            0.46%          1,949,250
                                   individual

                                   Domestic
WANG XIAOXING                                            0.43%          1,836,500
                                   individual

CHEN OUQIN                         Domestic              0.39%          1,652,679



                                                                                                                                         4
HaiNan Pearl River Holdings Co., Ltd.                                                                      Third Quarter Report 2017


                                 individual

                                 Domestic
WANG DAO                                               0.38%        1,633,300
                                 individual

                                 Domestic
ZHONG YI                                               0.38%        1,604,283
                                 individual

                                 Domestic
XU ZHEN                                                0.37%        1,595,000
                                 individual

                                                Top 10 non-restricted shareholders

                                                                                                     Type of stock
           Name of shareholder        Non-restricted shares held at period-end
                                                                                              Type                    Number

BEIJING GRAIN GROUP CO.,
                                                                  123,561,963 RMB common stock                        123,561,963
LTD.

                                                                                 Domestically listed stock for
LI SHERYN ZHAN MING                                                21,282,800                                           21,282,800
                                                                                 foreign investors

MEI JIANYING                                                        2,583,803 RMB common stock                           2,583,803

                                                                                 Domestically listed stock for
YAO LIYUAN                                                          1,950,000                                            1,950,000
                                                                                 foreign investors

                                                                                 Domestically listed stock for
ZHANG XIAOXIA                                                       1,949,250                                            1,949,250
                                                                                 foreign investors

WANG XIAOXING                                                       1,836,500 RMB common stock                           1,836,500

CHEN OUQIN                                                          1,652,679 RMB common stock                           1,652,679

WANG DAO                                                            1,633,300 RMB common stock                           1,633,300

ZHONG YI                                                            1,604,283 RMB common stock                           1,604,283

XU ZHEN                                                             1,595,000 RMB common stock                           1,595,000

                                     Among shareholders above, there exists no related-party relationship between the principal
                                     shareholder and other shareholders of the Company. Nor they are acting-in-concert parties as
Related or acting-in-concert parties prescribed in the Information Disclosure Administrative Methods for Changes in
among 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.

                                     Shareholder Wang Xiaoxing held 1,836,500 shares in the Company through the account of
                                     CSRC in Soochow Securities Co., Ltd.
Top    10      common    shareholders Shareholder Zhong Yi held 1,604,283 shares in the Company through the account of
conducting securities margin trading CSRC in Eastmoney Securities Co., Ltd.
(if any)                             Shareholder Wang Dao held 301,900 shares in the Company through his account of CSRC
                                     and held 1,331,400 shares in the Company through his common stock account in Cinda
                                     Securities Co., Ltd.




                                                                                                                                     5
HaiNan Pearl River Holdings Co., Ltd.                                                             Third Quarter Report 2017



Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the

Company conducted 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 Top 10 of Them at Period-End

□ Applicable √ Not applicable




                                                                                                                         6
HaiNan Pearl River Holdings Co., Ltd.                                                     Third Quarter Report 2017




                                    Section III Significant Events

I Changes in Key Consolidated Financial Statement Items and Reasons for Such Changes

√ Applicable □ Not applicable

1. Accounts receivable on September 30, 2017 (3.68% of the net sales during the period from July to September
2017) increased by RMB0.12 billion (143.50%) from the December 31, 2016 due to RMB0.12 billion of accounts
receivables recognized in September 2017 from new strategic customers in the southern markets. As of October
19, 2017, these accounts receivable had all been settled.
2. Prepayments on September 30, 2017 increased by RMB0.25 billion (187.2%) from the December 31, 2016 due
primarily to the arrival at the end of September 2017 of the two shipments of soybean purchased by the subsidiary
Jingliang (Tianjin) Grain & Oil Industry CO. Ltd, which has all been accepted by the end of October 2017 and is
being processed for sale.
3. Interest receivable on September 30, 2017 decreased 67.83% from the December 31, 2016 due primarily to the
interest receivable at the end of 2016 along with the Assets Transfer.
4. Dividends receivable on September 30, 2017 decreased 100% from the December 31, 2016 due primarily to the
dividends receivable at the end of 2016 along with the Assets Transfer.
5. Other current assets on September 30, 2017 decreased 62.66% from the December 31, 2016 due primarily to
decrease in bank wealth management products.
6. Available-for-sale financial assets on September 30, 2017 decreased by RMB10.82 million (35.12%) from the
December 31, 2016 due primarily to the Assets Transfer.
7. Construction in progress on September 30, 2017 decreased 88.99% from the December 31, 2016 due primarily
to the transfer of assets and the shift of Zhejiang Xiaowangzi Food Share Co., Ltd. (“Xiaowangzi Food”)’s
completed production line to fixed assets.
8. Other non-current assets on September 30, 2017 decreased by RMB 4.52 million (100%) from the December 31,
2016 due primarily to the Assets Transfer.
9. Short-term borrowings on September 30, 2017 increased 2113.90% from the December 31, 2016 due primarily
to the borrowings obtained for the purchases in the grease business line for the second half of the year according
to production needs and the market situation.
10. Notes payable on September 30, 2017 increased 66.87% from the December 31, 2016 due primarily to more
letters of credit issued for the more imports’.
11. Accounts payable on September 30, 2017 decreased 84.92% from the December 31, 2016 due primarily to a
decrease of approximately RMB80 million in accounts payable along with the transfer of the related assets, as
well as caused by RMB0.31 billion of accounts payable to suppliers.
12. Advances received on September 30, 2017 decreased 47.01% from the December 31, 2016 amount due
primarily to the Assets Transfer.
13. Payroll payable on September 30, 2017 decreased 90.65% from the December 31, 2016 due primarily to a
decrease in payroll payable along with the Assets Replacement, as well as the payment of last year’s annual
performance salaries in the current year.
14. Taxes payable on September 30, 2017 decreased 96.64% from the December 31, 2016 amount due primarily
to payment of taxes in the current year.
15. Non-current liabilities due within one year on September 30, 2017 decreased 100% from the December 31,

                                                                                                                 7
HaiNan Pearl River Holdings Co., Ltd.                                                        Third Quarter Report 2017


2016 due primarily to repayment of due long-term bank loans.
16. Long-term borrowings on September 30, 2017 decreased 100% from the December 31, 2016 due primarily to
the early repayment of long-term bank loans.
17. The year-over-year decrease of 7.79% in net sales during the period,primarily because the net sales during the
corresponding period of last year had included combined revenue of RMB1.997 billion from 14 trade subsidiaries,
which were all transferred in the current period. Regardless of the effects of the said trade subsidiaries, net sales
increased by RMB1.530 billion (38.46%) during the period January through September 2017 compared to the
same period of last year.
18. The year-over-year increase of 97.25% in taxes and surtaxes during the period primarily resulted from the
reclassification of taxes under “administrative expense” as “taxes and surtaxes” according to the Notice of the
Ministry of Finance (Financial Accounting [2016] No. 22) on Printing and Issuing of VAT Accounting Rules.
19. The year-over-year decrease of 71.11% in finance costs compared to the same period of last year primarily
resulted from significantly decreased loan interest as a result of the repayment of loans with high interest rates.
20. The year-over-year increase of RMB21.90 million (1356.34%) in asset impairment losses during the period
January through September 2017 primarily resulted from the bad-debt provisions made, out of prudence, for the
creditor’s rights associated with the assets transferred by the Company during the transition period, as well as the
reversal into capital reserve at the time of the Asset Transfer.
21. The year-over-year decrease of 86.79% in investment income during the period January through September
2017 primarily resulted from the transfer of equity interests in Heilongjiang Longshi Pearl River Media Co., Ltd.
by the Company and the transfer of 14 trade subsidiaries by BGG Food in last year.
22. The year-over-year decrease of 66.27% in non-operating income during the period January through September
2017 primarily resulted from last year’s relocation compensation income.
23. The year-over-year decrease of 70.66% in non-operating expense during the period January through
September 2017 primarily resulted from last year’s relocation expense.
24. The year-over-year decrease of 278.96% in net cash from operating activities during the period January
through September 2017 primarily resulted from the cash used for the purchases in the grease business line for the
second half of the year according to production needs and the market situation.
25. The year-over-year increase of 52.42% in net cash from investing activities during the period January through
September 2017 primarily resulted from BGG Food’s acquisition of a 19% stake in Xiaowangzi Food.
26. The year-over-year increase of 250.43% in net cash from financing activities during the period January
through September 2017 primarily resulted from the borrowings obtained from bank for the purchases in the
grease business line for the second half of the year according to production needs and the market situation.



II Progress, Influence and Solutions Associated with Significant Events

√ Applicable □ Not applicable

    Announcement of significant event                      Disclosure date              Disclosure website

The major assets restructuring of the
Company got Reply from China Securities
Regulatory Commission to HaiNan Pearl                                        Announcement No. 2017-047 on
                                              08/01/2017
River Holdings Co., Ltd.’s Issuing Shares,                                  www.cninfo.com.cn
Purchasing Assets and Raising Supporting
Funds to Beijing Grain Group Co., Ltd.


                                                                                                                    8
HaiNan Pearl River Holdings Co., Ltd.                                                                   Third Quarter Report 2017


etc. on July 28, 2017.

On September 14, 2017, Beijing Grain
Food Co., Ltd. became the wholly-owned
subsidiary    of    the    Company       after
completing the transfer procedures of
assets planned to be put in in the major
assets restructuring. As of September 30,
2017, the delivery of assets planned to be                                               Announcement No. 2017-059 on
                                                 09/30/2017
put out excluding a small number of assets                                               www.cninfo.com.cn
whose transfer procedures are still in
progress has been finished. The total
amount of assets that have been settled
(including liabilities) accounts for 93.46%
of that of assets (including liabilities)
planned to be put out at this time.


III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company and Other Commitment Makers, Failed to Fulfill on Time
during Reporting Period


□ Applicable √ Not applicable
No such cases in the Reporting Period.


IV Forecast of 2017 Annual Operating Results


Warning of a possible loss on or a significant year-over-year change in accumulative net margin during the period the beginning of

the current year through the end of the next reporting period, as well as the reasons:
□ Applicable √ Not applicable


V Securities Investments


□ Applicable √ Not applicable
No such cases in the Reporting Period.


VI Investments in Derivative Financial Instruments

√ Applicable □ Not applicable
                                                                                                                Unit: RMB'0,000




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HaiNan Pearl River Holdings Co., Ltd.                                                                                  Third Quarter Report 2017



                                                                                                         Proportion of closing         Actual
                                                                                       Closing
                                                                                                       investment amount in the      gain/loss in
      Type of derivative investment             Beginning date      Ending date      investment
                                                                                                     Company’s closing net assets   Reporting
                                                                                       amount
                                                                                                                 (%)                   Period

Futures of agricultural products              01/01/2017           09/30/2017            30,241.88                        18.00%         7,161.1

Capital source for derivative
                                              Self-raised funds
investment

Lawsuit (if applicable)                       Naught

Analysis     on    risks     and   control
                                              In the Reporting Period, the Company possessed the cash for hedging in futures. All cash has
measures of derivative products held
                                              the physical correspondence which is distributed in forward contracts with good liquidity. The
in the Reporting Period (including
                                              credit risk is low and there will be no default risk. In addition, there will be no risk concerning
but not limited to market risk,
                                              operation and laws because of regulated transactions, rigorous decisions on futures and strict
liquidity risk, credit risk, operation
                                              operation process.
risk, law risk, etc.)

Changes of market prices or fair
values in the Reporting Period of the
                                               The value of futures contracts held by the Company is changing with the price of the futures
invested derivatives. And the analysis
                                               exchange. The price of the futures exchange is broadly representative. And the fair value of
on the fair value of the derivatives
                                               futures contracts will be measured in strict accordance with the settlement methods issued by
should include the specific use
                                               the exchange.
methods        and         the     relevant
assumptions and parameters.


VII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc.
during Reporting Period


□ Applicable √ Not applicable
No such cases in the Reporting Period.


VIII Irregularities Arising from Provision of Guarantees for Third Parties


□ Applicable √ Not applicable
No such cases in the Reporting Period.


IX Occupation of the Company’s Funds by Its Controlling Shareholder or Related Parties for
Non-Operating Purposes


□ Applicable √ Not applicable
No such cases in the Reporting Period.




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HaiNan Pearl River Holdings Co., Ltd.                                                                    Third Quarter Report 2017


X Targeted Measures Taken to Help People Lift Themselves out of Poverty

The Company did not take such measures in the third quarter of the year and has no such plans for now.




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HaiNan Pearl River Holdings Co., Ltd.                                                       Third Quarter Report 2017




                                          Section IV Financial Statements

I Financial Statements

1. Consolidated Balance Sheet

Prepared by HaiNan Pearl River Holdings Co., Ltd.
                                                    September 30, 2017
                                                                                                            Unit: RMB

                       Item                         September 30, 2017                  December 31, 2016

Current assets:

  Cash on hand and at bank                                          602,618,963.22                  652,870,239.91

  Settlement reserve

  Interbank lendings

  Financial assets at fair value through
                                                                                                      66,667,426.60
gains/losses
  Derivative financial assets

  Notes receivable

  Accounts receivable                                               203,373,667.83                    83,520,131.60

  Prepayments                                                       382,711,901.44                  132,969,364.73

  Premiums receivable

  Reinsurance premiums receivable

  Receivable reinsurance contract reserve

  Interest receivable                                                    1,344,210.00                  4,178,348.79

  Dividends receivable                                                                                   260,015.00

  Other accounts receivable                                         387,323,095.97                  357,055,607.58

  Financial       assets      purchased   under
agreements to resell

  Inventories                                                       942,254,413.97                  775,376,454.78

  Assets held for sale

  Non-current assets due within one year

  Other current assets                                              158,625,668.06                  424,782,623.76

Total current assets                                               2,678,251,920.49                2,497,680,212.75

Non-current assets:

  Loans and advances to customers


                                                                                                                  12
HaiNan Pearl River Holdings Co., Ltd.                              Third Quarter Report 2017


  Available-for-sale financial assets             20,000,000.00              30,824,994.90

  Held-to-maturity investments

  Long-term accounts receivable

  Long-term equity investments                   143,673,669.92            171,465,314.90

  Investment property                             35,387,907.81              49,490,079.75

  Fixed assets                                  1,249,470,889.94          1,508,710,556.28

  Construction in progress                        12,046,080.75            109,410,883.57

  Engineering materials

  Disposal of fixed assets

  Productive living assets

  Oil-gas assets

  Intangible assets                              385,249,713.38            403,202,499.05

  R&D expense

  Goodwill                                       191,394,422.51            191,394,422.51

  Long-term deferred expense                      28,910,630.29              29,082,767.56

  Deferred income tax assets                       3,036,685.75              11,562,156.93

  Other non-current assets                                                    4,519,435.80

Total non-current assets                        2,069,170,000.35          2,509,663,111.25

Total assets                                    4,747,421,920.84          5,007,343,324.00

Current liabilities:

  Short-term borrowings                         1,387,702,144.26             62,681,281.00

  Borrowings from Central Bank
  Money deposits accepted and inter-bank
deposits

  Interbank borrowings

  Financial liabilities at fair value through
gains/losses

  Derivative financial liabilities

  Notes payable                                   59,004,073.80              35,358,929.55

  Accounts payable                                69,579,932.09            461,294,581.74

  Advances received                              310,980,168.69            586,907,614.36

  Financial assets sold for repurchase

  Fees and commissions payable

  Payroll payable                                  4,166,463.40              44,574,235.79

  Taxes payable                                    4,373,517.40            130,157,235.63



                                                                                         13
HaiNan Pearl River Holdings Co., Ltd.                            Third Quarter Report 2017


  Interest payable                              82,740,158.36              90,011,566.90

  Dividends payable                              3,397,317.01               3,397,317.01

  Other accounts payable                       523,664,156.33            680,347,428.44

  Reinsurance premiums payable

  Insurance contract reserve

  Payables for acting trading of securities
  Payables for acting underwriting of
securities

  Liabilities held for sale

  Non-current liabilities due within one
                                                                          117,210,181.59
year

  Other current liabilities

Total current liabilities                     2,445,607,931.34          2,211,940,372.01

Non-current liabilities:

  Long-term borrowings                                                     73,666,666.66

  Bonds payable

       Of which: Preference shares

                    Perpetual bonds

  Long-term accounts payable

  Long-term payroll payable                     14,310,251.15              14,310,251.15

  Special payables                               1,067,530.32               1,153,176.66

  Provisions

  Deferred income                                                          81,063,077.48

  Deferred income tax liabilities               64,819,485.96              67,598,052.00

  Other non-current liabilities                 78,848,539.08

Total non-current liabilities                  159,045,806.51            237,791,223.95

Total liabilities                             2,604,653,737.85          2,449,731,595.96

Owners’ equity:

  Share capital                                426,745,404.00            426,745,404.00

  Other equity instruments

       Of which: Preference shares

                    Perpetual bonds

  Capital reserve                             2,146,453,884.65          2,603,034,269.96

  Less: Treasury shares

  Other comprehensive income



                                                                                       14
HaiNan Pearl River Holdings Co., Ltd.                                                       Third Quarter Report 2017


  Special reserve

  Surplus reserve                                             109,487,064.39                         109,487,064.39

  Provisions for general risks

  Retained earnings                                        -1,002,370,635.43                       -1,107,023,847.91

Equity attributable to owners of the parent                 1,680,315,717.61                       2,032,242,890.44

  Minority interests                                          462,452,465.38                         525,368,837.60

Total owners’ equity                                       2,142,768,182.99                       2,557,611,728.04

Total liabilities and owners’ equity                       4,747,421,920.84                       5,007,343,324.00

Legal representative: Wang Chunli                                     Accounting head for this Report: Guan Ying


Head of the accounting department: Guan Ying


2. Parent Company Balance Sheet

                                                                                                            Unit: RMB

                       Item                    September 30, 2017                       December 31, 2016

Current assets:

  Cash on hand and at bank                                      3,881,807.77                          33,952,786.37

  Financial assets at fair value through
gains/losses

  Derivative financial assets

  Notes receivable

  Accounts receivable                                               116,589.00                          1,032,085.83

  Prepayments                                                                                         50,000,000.00

  Interest receivable

  Dividends receivable                                                                                   260,015.00

  Other accounts receivable                                   137,306,365.25                         591,785,222.60

  Inventories                                                   4,824,035.45                            4,824,035.45

  Assets held for sale

  Non-current assets due within one year

  Other current assets

Total current assets                                          146,128,797.47                         681,854,145.25

Non-current assets:

  Available-for-sale financial assets                          20,000,000.00                          30,824,994.90

  Held-to-maturity investments

  Long-term accounts receivable


                                                                                                                   15
HaiNan Pearl River Holdings Co., Ltd.                              Third Quarter Report 2017


  Long-term equity investments                  1,970,192,364.05           101,713,800.55

  Investment property                              6,131,637.03               6,383,667.53

  Fixed assets                                     3,692,597.07               4,019,513.64

  Construction in progress

  Engineering materials

  Disposal of fixed assets

  Productive living assets

  Oil-gas assets

  Intangible assets

  R&D expense

  Goodwill

  Long-term deferred expense                                                    278,707.32

  Deferred income tax assets

  Other non-current assets

Total non-current assets                        2,000,016,598.15           143,220,683.94

Total assets                                    2,146,145,395.62           825,074,829.19

Current liabilities:

  Short-term borrowings
  Financial liabilities at fair value through
gains/losses

  Derivative financial liabilities

  Notes payable

  Accounts payable                                 2,667,949.70               2,482,949.70

  Advances received                                   38,896.41                  38,896.41

  Payroll payable                                  1,767,581.53               1,224,801.48

  Taxes payable                                    1,847,136.15              27,537,449.60

  Interest payable                                82,468,756.03              82,468,756.03

  Dividends payable                                3,213,302.88               3,213,302.88

  Other accounts payable                         406,070,656.80            650,471,361.88

  Liabilities held for sale

  Non-current liabilities due within one year

  Other current liabilities

Total current liabilities                        498,074,279.50            767,437,517.98

Non-current liabilities:

  Long-term borrowings


                                                                                         16
HaiNan Pearl River Holdings Co., Ltd.                                                 Third Quarter Report 2017


  Bonds payable

     Of which: Preference shares

                    Perpetual bonds

  Long-term payables

  Long-term payroll payable

  Special payables

  Provisions

  Deferred income

  Deferred income tax liabilities

  Other non-current liabilities

Total non-current liabilities

Total liabilities                                             498,074,279.50                  767,437,517.98

Owners’ equity:

  Share capital                                               426,745,404.00                  426,745,404.00

  Other equity instruments

     Of which: Preference shares

                    Perpetual bonds

  Capital reserve                                         2,156,922,331.37                    546,201,098.01

  Less: Treasury shares

  Other comprehensive income

  Special reserve

  Surplus reserve                                             109,487,064.39                  109,487,064.39

  Retained earnings                                      -1,045,083,683.64                  -1,024,796,255.19

Total owners’ equity                                     1,648,071,116.12                      57,637,311.21

Total liabilities and owners’ equity                     2,146,145,395.62                    825,074,829.19


3. Consolidated Income Statement for July-September

                                                                                                     Unit: RMB

                     Item               July-September 2017                    July-September 2016

1. Operating revenue                                  2,232,700,520.70                       2,863,928,558.65

Including: Net sales                                  2,232,700,520.70                       2,863,928,558.65

        Interest revenue

        Premium revenue

        Fee and commission revenue



                                                                                                            17
HaiNan Pearl River Holdings Co., Ltd.                              Third Quarter Report 2017


2. Operating expenses                           2,168,695,816.83          2,782,480,015.75

Including: Cost of sales                        2,038,177,137.96          2,609,442,165.66

         Interest expense

         Fee and commission expense

         Surrenders

         Net claims paid
         Net    amount      provided       as
insurance contract reserve

         Expenditure on policy dividends

         Reinsurance premium expense

         Taxes and surtaxes                       14,277,726.11               5,338,188.59

         Selling expense                          40,680,538.06              64,393,822.04

         Administrative expense                   35,096,382.98              78,498,045.30

         Finance costs                            11,712,245.37              23,738,739.51

         Asset impairment losses                  28,751,786.35               1,069,054.65

Add: Gains on fair value changes (“-”
                                                   -5,151,289.48            -45,057,864.31
for losses)

      Investment income (“-” for losses)         2,267,152.41              12,817,603.17

      Including: Share of gains/losses of
                                                  -73,625,389.08              8,035,851.80
associates and joint ventures

      Exchange gains (“-” for losses)

      Other income

3. Operating margin (“-” for losses)            61,120,566.80              49,208,281.76

      Add: Non-operating income                   13,045,293.27              54,739,174.77

         Including: Gains on disposal of
                                                                                    719.40
non-current assets

      Less: Non-operating expense                  2,050,620.48              12,329,081.87

         Including: Losses on disposal of
                                                      63,322.91               3,316,449.88
non-current assets
4. Gross margin (“-” for losses)                72,115,239.59              91,618,374.66

      Less: Income tax expense                    16,165,559.76              35,095,731.39

5. Net margin (“-” for losses)                  55,949,679.83              56,522,643.27

      Attributable to owners of the
                                                  42,164,080.63              36,853,580.57
parent

      Attributable to minority interests          13,785,599.20              19,669,062.70

6. Other comprehensive income, net of
                                                                                346,332.92
tax



                                                                                         18
HaiNan Pearl River Holdings Co., Ltd.                                                                  Third Quarter Report 2017


     Other comprehensive income, net
of tax attributable to owners of the                                                                                 346,332.92
parent
         6.1       Other       comprehensive
income that will not be reclassified into
gains/losses
           6.1.1 Changes in net liabilities
or assets with a defined benefit plan
upon re-measurement
           6.1.2      Share        of    other
comprehensive income of investees that
cannot be reclassified into gains/losses
under equity method
         6.2       Other       comprehensive
income to be subsequently reclassified                                                                               346,332.92
into gains/losses
           6.2.1      Share        of    other
comprehensive income of investees that
will be reclassified into gains/losses
under equity method
           6.2.2 Gains/Losses on fair
value    changes      of     available-for-sale                                                                      437,582.65
financial assets
           6.2.3          Gains/Losses      on
reclassifying                held-to-maturity
investments        into     available-for-sale
financial assets
           6.2.4 Effective gains/losses
on cash flow hedges
           6.2.5     Currency      translation
                                                                                                                     -91,249.73
differences

           6.2.6 Other

     Other comprehensive income, net
of tax attributable to minority interests
7. Total comprehensive income                                        55,949,679.83                                56,868,976.19

     Attributable to owners of the
                                                                     42,164,080.63                                37,199,913.49
parent

     Attributable to minority interests                              13,785,599.20                                19,669,062.70

8. Earnings per share

     8.1 Basic earnings per share                                              0.07                                        0.06

     8.2 Diluted earnings per share                                            0.07                                        0.06

Where business mergers under the same control occurred in the current period, the net margin achieved by the merged parties before


                                                                                                                               19
HaiNan Pearl River Holdings Co., Ltd.                                                                Third Quarter Report 2017



the business mergers was RMB0.00, with the amount for the same period of last year being RMB0.00.

Legal representative: Wang Chunli                                              Accounting head for this Report: Guan Ying


Head of the accounting department: Guan Ying


4. Parent Company Income Statement for July-September

                                                                                                                     Unit: RMB

                   Item                           July-September 2017                         July-September 2016

1. Operating revenue                                                          0.00                                  268,164.10

  Less: Operating expenses                                              100,812.20                                   75,609.15

      Taxes and surtaxes                                                145,225.03                                    1,923.11

      Selling expense

      Administrative expense                                         2,984,720.67                                9,051,260.88

      Finance costs                                                -10,284,711.37                                6,925,259.20

      Asset impairment losses                                       96,843,906.63                             165,475,341.33
  Add: Gains on fair value changes (“-”
for losses)

      Investment income (“-” for loss)                              -141,966.40                                   -44,174.66

      Including: Share of gains/losses of
                                                                     2,205,283.12                                   -44,174.66
associates and joint ventures

      Other income

2. Operating margin (“-” for losses)                             -89,931,919.56                            -181,305,404.23

  Add: Non-operating income                                                                                    11,405,419.77

      Including: Gains on disposal of
non-current assets

  Less: Non-operating expense                                                                                    2,868,139.65
      Including: Losses on disposal of
                                                                                                                 1,296,383.08
non-current assets

3. Gross margin (“-” for losses)                                 -89,931,919.56                            -172,768,124.11

  Less: Income tax expense

4. Net margin (“-” for losses)                                   -89,931,919.56                            -172,768,124.11

5. Other comprehensive income, net of
tax
  5.1 Other comprehensive income that
will not be reclassified into gains and
losses

      5.1.1 Changes in net liabilities or



                                                                                                                            20
HaiNan Pearl River Holdings Co., Ltd.                                                        Third Quarter Report 2017


assets with a defined benefit plan upon
re-measurement
       5.1.2       Share        of        other
comprehensive income of investees that
cannot be reclassified into gains/losses
under equity method
     5.2 Other comprehensive income to
be     subsequently        reclassified    into
gains/losses
       5.2.1       Share        of        other
comprehensive income of investees that
will be reclassified into gains/losses
under equity method
       5.2.2 Gains/Losses on fair value
changes of available-for-sale financial
assets
       5.2.3         Gains/Losses            on
reclassifying                held-to-maturity
investments        into     available-for-sale
financial assets
       5.2.4 Effective gains/losses on
cash flow hedges
       5.2.5       Currency          translation
differences
       5.2.6 Other

6. Total comprehensive income                                       -89,931,919.56                   -172,768,124.11

7. Earnings per share

      7.1 Basic earnings per share

      7.2 Diluted earnings per share


5. Consolidated Income Statement for January-September

                                                                                                              Unit: RMB

                     Item                          January-September 2017            January-September 2016

1. Operating revenue                                              5,515,262,797.63                  5,981,423,571.13

Including: Net sales                                              5,515,262,797.63                  5,981,423,571.13

         Interest revenue

         Premium revenue

         Fee and commission revenue

2. Operating expenses                                             5,325,251,308.02                  5,969,251,567.71



                                                                                                                    21
HaiNan Pearl River Holdings Co., Ltd.                              Third Quarter Report 2017


Including: Cost of sales                        4,946,577,567.18          5,505,312,355.60

         Interest expense

         Fee and commission expense

         Surrenders

         Net claims paid

         Net    amount      provided       as
insurance contract reserve

         Expenditure on policy dividends

         Reinsurance premium expense

         Taxes and surtaxes                       40,345,029.56              20,453,582.16

         Selling expense                         133,704,147.54            153,077,792.48

         Administrative expense                  157,738,308.36            207,877,201.35

         Finance costs                            23,373,101.68              80,916,103.90

         Asset impairment losses                  23,513,153.70               1,614,532.22

Add: Gains on fair value changes (“-”
                                                  -13,904,516.93             17,929,229.68
for losses)
      Investment income (“-” for losses)        11,766,061.71              89,067,706.12

      Including: Share of gains/losses of
                                                  -74,720,761.50              7,800,927.54
associates and joint ventures

      Exchange gains (“-” for losses)

      Other income

3. Operating margin (“-” for losses)           187,873,034.39             119,168,939.22

      Add: Non-operating income                   21,928,324.60              65,009,590.71
         Including: Gains on disposal of
                                                     186,159.87               2,603,384.48
non-current assets

      Less: Non-operating expense                  5,739,675.20              19,561,963.96

         Including: Losses on disposal of
                                                     211,359.46               4,237,010.38
non-current assets

4. Gross margin (“-” for losses)               204,061,683.79            164,616,565.97

      Less: Income tax expense                    57,511,192.19              56,511,639.74

5. Net margin (“-” for losses)                 146,550,491.60            108,104,926.23

      Attributable to owners of the
                                                 113,833,212.48              71,134,987.70
parent

      Attributable to minority interests          32,717,279.12              36,969,938.53
6. Other comprehensive income, net of
                                                                                346,332.92
tax
      Other comprehensive income, net
                                                                                346,332.92
of tax attributable to owners of the

                                                                                         22
HaiNan Pearl River Holdings Co., Ltd.                                                                  Third Quarter Report 2017


parent
         6.1       Other       comprehensive
income that will not be reclassified into
gains/losses
           6.1.1 Changes in net liabilities
or assets with a defined benefit plan
upon re-measurement
           6.1.2      Share        of    other
comprehensive income of investees that
cannot be reclassified into gains/losses
under equity method
         6.2       Other       comprehensive
income to be subsequently reclassified                                                                               346,332.92
into gains/losses
           6.2.1      Share        of    other
comprehensive income of investees that
will be reclassified into gains/losses
under equity method
           6.2.2 Gains/Losses on fair
value    changes      of     available-for-sale                                                                      437,582.65
financial assets
           6.2.3          Gains/Losses      on
reclassifying                held-to-maturity
investments        into     available-for-sale
financial assets
           6.2.4 Effective gains/losses
on cash flow hedges
           6.2.5     Currency      translation
                                                                                                                     -91,249.73
differences

           6.2.6 Other

     Other comprehensive income, net
of tax attributable to minority interests
7. Total comprehensive income                                       146,550,491.60                               108,451,259.15

     Attributable to owners of the
                                                                    113,833,212.48                                71,481,320.62
parent

     Attributable to minority interests                              32,717,279.12                                36,969,938.53

8. Earnings per share

     8.1 Basic earnings per share                                              0.18                                        0.11

     8.2 Diluted earnings per share                                            0.18                                        0.11

Where business mergers under the same control occurred in the current period, the net margin achieved by the merged parties before
the business mergers was RMB0.00, with the amount for the same period of last year being RMB0.00.




                                                                                                                               23
HaiNan Pearl River Holdings Co., Ltd.                                                    Third Quarter Report 2017


6. Parent Company Income Statement for January-September

                                                                                                          Unit: RMB

                   Item                      January-September 2017              January-September 2016

1. Operating revenue                                                  2,857.14                        889,099.69

  Less: Operating expenses                                       252,030.50                           248,976.20

      Taxes and surtaxes                                         212,753.35                         4,205,152.57

      Selling expense

      Administrative expense                                   10,807,855.19                       17,301,260.86

      Finance costs                                            -8,270,296.34                       45,574,350.57

      Asset impairment losses                                  91,226,030.51                      165,502,220.51
  Add: Gains on fair value changes (“-”
for losses)

      Investment income (“-” for loss)                       74,749,139.55                         -203,430.18

      Including: Share of gains/losses of
                                                                1,276,389.07                         -203,430.18
associates and joint ventures

      Other income

2. Operating margin (“-” for losses)                        -19,476,376.52                     -232,146,291.20

  Add: Non-operating income                                            920.00                      13,861,534.38

      Including: Gains on disposal of
                                                                                                    2,456,114.61
non-current assets

  Less: Non-operating expense                                    811,971.93                         4,670,182.35
      Including: Losses on disposal of
                                                                                                    1,296,383.08
non-current assets

3. Gross margin (“-” for losses)                            -20,287,428.45                     -222,954,939.17

  Less: Income tax expense

4. Net margin (“-” for losses)                              -20,287,428.45                     -222,954,939.17

5. Other comprehensive income, net of
tax
  5.1 Other comprehensive income that
will not be reclassified into gains and
losses
      5.1.1 Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
      5.1.2      Share       of      other
comprehensive income of investees that
cannot be reclassified into gains/losses
under equity method



                                                                                                                24
HaiNan Pearl River Holdings Co., Ltd.                                                               Third Quarter Report 2017


     5.2 Other comprehensive income to
be     subsequently         reclassified           into
gains/losses
       5.2.1        Share             of          other
comprehensive income of investees that
will be reclassified into gains/losses
under equity method
       5.2.2 Gains/Losses on fair value
changes of available-for-sale financial
assets
       5.2.3         Gains/Losses                   on
reclassifying                    held-to-maturity
investments         into     available-for-sale
financial assets
       5.2.4 Effective gains/losses on
cash flow hedges
       5.2.5       Currency                translation
differences

       5.2.6 Other

6. Total comprehensive income                                              -20,287,428.45                   -222,954,939.17

7. Earnings per share

      7.1 Basic earnings per share

      7.2 Diluted earnings per share


7. Consolidated Cash Flow Statement for January-September

                                                                                                                     Unit: RMB

                      Item                                January-September 2017            January-September 2016

1. Cash generated by or used in
operating activities:
     Cash       generated        by        sale     of
                                                                         5,822,570,435.19                  7,358,401,555.49
commodities and rendering of service
     Net increase in money deposits from
customers and interbank placements
     Net increase in loans from Central
Bank
     Net increase in funds borrowed from
other financial institutions
     Cash      received     as    premiums           of
original insurance contracts
     Net cash generated by reinsurance
business


                                                                                                                           25
HaiNan Pearl River Holdings Co., Ltd.                               Third Quarter Report 2017


  Net increase in deposits of policy
holders and investment fund
  Net increase in disposal of financial
assets at fair value through gains/losses
  Interest,    fees        and   commissions
received

  Net increase in interbank borrowings
  Net increase in funds in repurchase
business

  Tax rebates received                               9,136,150.48              8,368,786.75

  Cash generated by other operating
                                                 6,245,333,510.27           724,710,800.94
activities
Subtotal of cash generated by operating
                                                12,077,040,095.94          8,091,481,143.18
activities

  Cash paid for goods and services               6,237,205,329.97          6,072,636,338.20

  Net increase in loans and advances to
customers
  Net increase in funds deposited in
Central Bank and interbank placements
  Cash paid for claims of original
insurance contracts

  Interest, fees and commissions paid

  Cash paid as policy dividends

  Cash paid to and for employees                  316,577,321.67            346,943,686.55

  Taxes paid                                      250,975,642.80            206,074,416.24
  Cash       used     in    other   operating
                                                 6,343,725,567.81           867,125,230.39
activities
Subtotal of cash used in operating
                                                13,148,483,862.25          7,492,779,671.38
activities
Net cash from operating activities              -1,071,443,766.31           598,701,471.80

2. Cash generated by or used in
investing activities:

  Cash generated by disinvestments                342,702,070.16            508,850,000.00

  Cash received as investment income               19,125,768.85               1,691,359.10
  Net cash generated by disposal of
fixed assets, intangible assets and other          43,621,239.95               5,246,170.07
long-term assets
  Net cash generated by disposal of
                                                                            125,845,729.40
subsidiaries or other business units
     Cash generated by other investing
                                                  603,828,188.53
activities


                                                                                          26
HaiNan Pearl River Holdings Co., Ltd.                               Third Quarter Report 2017


Subtotal of cash generated by investing
                                                 1,009,277,267.49           641,633,258.57
activities
  Cash paid to acquire fixed assets,
intangible assets and other long-term              29,376,357.42              72,614,758.26
assets
  Cash paid for investments                       461,400,000.00            713,237,056.00

  Net increase in pledged loans

  Net cash paid to acquire subsidiaries
                                                  212,344,900.00
and other business units
     Cash used in other investing
                                                  529,501,870.94               2,317,462.49
activities
Subtotal of cash used in investing
                                                 1,232,623,128.36           788,169,276.75
activities

Net cash from investing activities               -223,345,860.87            -146,536,018.18

3. Cash generated by or used in
financing activities:
    Cash        received      as       capital
                                                    9,553,070.16
contributions
    Including:      Cash    received    from
minority shareholder investments by
subsidiaries

    Cash received as borrowings                  1,630,729,869.53           857,454,158.45

    Cash generated by issuance of
bonds
    Cash generated by other financing
                                                 6,783,876,765.24           998,490,709.57
activities
Subtotal of cash generated by financing
                                                 8,424,159,704.93          1,855,944,868.02
activities

    Repayment of borrowings                       375,954,732.20           2,476,309,399.34

    Cash paid for interest expenses and
                                                   63,040,361.51              56,483,231.02
distribution of dividends or profit
     Including: dividends or profit paid
by subsidiaries to minority interests
    Cash     used    in    other   financing
                                                 6,735,878,759.62           153,645,262.99
activities
Sub-total of cash used in financing
                                                 7,174,873,853.33          2,686,437,893.35
activities

Net cash from financing activities               1,249,285,851.60           -830,493,025.33

4. Effect of foreign exchange rate
                                                      252,498.89                 534,997.51
changes on cash and cash equivalents
5. Net increase in cash and cash
                                                   -45,251,276.69           -377,792,574.20
equivalents


                                                                                          27
HaiNan Pearl River Holdings Co., Ltd.                                                    Third Quarter Report 2017


     Add: Opening balance of cash and
                                                                647,870,239.91                    893,327,088.78
cash equivalents
6. Closing balance of cash and cash
                                                                602,618,963.22                    515,534,514.58
equivalents


8. Parent Company Cash Flow Statement for January-September

                                                                                                          Unit: RMB

                    Item                       January-September 2017            January-September 2016
1. Cash generated by or used in
operating activities:
  Cash       generated      by     sale   of
                                                                                                   14,040,000.00
commodities and rendering of service
  Tax rebates received

  Cash generated by other operating
                                                                 15,215,693.63                    177,503,106.64
activities
Subtotal of cash generated by operating
                                                                 15,215,693.63                    191,543,106.64
activities

  Cash paid for goods and services                                                                130,565,200.00

  Cash paid to and for employees                                  3,898,308.75                      6,081,680.56

  Taxes paid                                                     27,309,480.98                     13,640,381.33

  Cash       used   in     other   operating
                                                                  8,470,741.08                     20,724,434.92
activities
Subtotal of cash used in operating
                                                                 39,678,530.81                    171,011,696.81
activities

Net cash from operating activities                              -24,462,837.18                     20,531,409.83

2. Cash generated by or used in
investing activities:

  Cash generated by disinvestments                               10,000,000.00                      8,000,000.00

  Cash received as investment income

  Net cash generated by disposal of
fixed assets, intangible assets and other                        35,000,000.00                      3,060,360.00
long-term assets
  Net cash generated by disposal of
subsidiaries or other business units
  Cash generated by other investing
                                                                   240,582.60
activities
Subtotal of cash generated by investing
                                                                 45,240,582.60                     11,060,360.00
activities
  Cash paid to acquire fixed assets,
                                                                                                       26,549.00
intangible assets and other long-term



                                                                                                                28
HaiNan Pearl River Holdings Co., Ltd.                            Third Quarter Report 2017


assets

  Cash paid for investments                                                39,196,600.00

  Net cash paid to acquire subsidiaries
and other business units
  Cash       used   in     other   investing
activities
Subtotal of cash used in investing
                                                                           39,223,149.00
activities

Net cash from investing activities              45,240,582.60             -28,162,789.00

3. Cash generated by or used in
financing activities:
    Cash        received      as      capital
contributions

    Cash received as borrowings                 29,000,000.00            103,215,780.73

    Cash generated by issuance of
bonds
    Cash generated by other financing
activities
Subtotal of cash generated by financing
                                                29,000,000.00            103,215,780.73
activities

    Repayment of borrowings                     76,469,598.52              84,282,856.00

    Cash paid for interest expenses and
                                                 1,659,125.50               7,857,686.85
distribution of dividends or profit
    Cash     used   in     other   financing
                                                 1,720,000.00                 587,864.64
activities
Sub-total of cash used in financing
                                                79,848,724.02              92,728,407.49
activities

Net cash from financing activities              -50,848,724.02             10,487,373.24

4. Effect of foreign exchange rate
changes on cash and cash equivalents
5. Net increase in cash and cash
                                                -30,070,978.60              2,855,994.07
equivalents
     Add: Opening balance of cash and
                                                33,952,786.37                 479,720.71
cash equivalents
6. Closing balance of cash and cash
                                                 3,881,807.77               3,335,714.78
equivalents


II Auditor’s Report

These financial statements are unaudited.




                                                                                       29
HaiNan Pearl River Holdings Co., Ltd.                   Third Quarter Report 2017




                                        HaiNan Pearl River Holdings Co., Ltd.

                                                  October 31, 2017




                                                                              30