Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 Stock Code: 000505, 200505 Stock Name: JLKG, JL-B Announcement No.: 2019-072 HAINAN JINGLIANG HOLDINGS CO., LTD. THIRD QUARTER REPORT 2019 (SUMMARY) 1 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 Part I Important Notes The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of Hainan Jingliang Holdings Co., Ltd. (together with its consolidated s ubsidiaries, the “Company”, except where the context otherwise requires ) hereby guarantee the factuality, accuracy and completeness of the conte nts of this Report and its summary, and shall be jointly and severally liable fo r any misrepresentations, misleading statements or mate rial omissions therein. All the Company’s directors have attended the Board meeting for the review of this Report and its summary. Li Shaoling, the Company’s legal representative, Guan Ying, the Company’s head for financial affairs, and Liu Quanli, head of the Company’s financial department (equivalent to financial manager) hereby guarantee that the financial statements carried in this Report are factual, accurate and complete. This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail. 2 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 Part II Key Corporate Information I Key Consolidated Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No 30 September 2019 31 December 2018 Change (%) Total assets (RMB) 5,132,178,541.12 4,917,148,996.28 4.37% Equity attributable to the listed 2,358,063,029.90 2,272,469,925.43 3.77% company’s shareholders (RM B) Q3 2019 YoY change (%) Q1-Q3 2019 YoY change (%) Operating revenue (RM B) 1,824,886,529.92 -3.94% 5,108,164,255.31 -7.79% Net profit attributable to the listed 33,840,967.80 -20.08% 85,351,872.21 -16.54% company’s shareholders (RM B) Net profit attributable to the listed company’s shareholders before 28,276,307.45 -34.00% 69,470,781.04 -30.00% exceptional items (RM B) Net cash generated from/used in -- -- 446,745,732.08 6.47% operating activities (RM B) Basic earnings per share (RM B/share) 0.05 -16.67% 0.12 -20.00% Diluted earnings per share 0.05 -16.67% 0.12 -20.00% (RM B/share) Weighted average return on equity 1.48% -26.00% 3.69% -22.00% (%) Exceptional gains and losses: √ Applicable □ Not applicable Unit: RM B Item Q1-Q3 2019 Note Gain or loss on disposal of non-current assets (inclusive of impairment 11,265,753.65 allowance write-offs) Government subsidies recognized in the current period, except for those acquired in the ordinary course of business or granted at certain quotas or 3,058,788.87 amounts according to the government’s unified standards Gains/Losses on fair value changes of trading financial assets and liabilities & investment income from disposal of trading financial assets and 7,948,330.08 liabilities as well as financial assets available for sale (exclusive of 3 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 effective hedges related to normal business operations of the Company) Non-operating income and expense other than above 889,800.28 Project confirmed with the definition of non-recurring gains and losses and -122,538.24 losses Less: Income tax effects 5,760,033.66 Non-controlling interests effects (net of tax) 1,399,009.81 Total 15,881,091.17 -- Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items: □ Applicable √ Not applicable No such cases for the Reporting Period. II Total Numbe r of Shareholde rs and Holdings of Top 10 Shareholde rs at 30 September 2019 1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders Unit: share Number of preferred Number of ordinary shareholders 38,631 shareholders with resumed 0 voting rights (if any) Top 10 shareholders Shares in pledge or Nature of Shareholding Number of Restricted Name of shareholder frozen shareholder percentage shares shares Status Shares State-owned BEIJING GRAIN GROUP CO., LTD. 42.06% 288,439,561 164,877,598 legal person BEIJING STATE-OWNED CAPITAL State-owned OPERATION AND M ANAGEM ENT 7.07% 48,510,460 48,510,460 legal person CENTER CHINA DEVELOPM ENT BANK State-owned 2.97% 20,393,051 0 CAPITAL CO., LTD. legal person Foreign natural LI SHERYN ZHAN M ING 2.54% 17,425,400 0 person GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTM ENT Other 2.20% 15,116,472 0 FUND M ANAGEM ENT CO., 4 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 LTD.—GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTM ENT FUND (L.P.) Domestic M EI JIANYING 0.38% 2,604,203 0 natural person Domestic HU TIANGAO 0.34% 2,356,052 0 natural person Domestic ZHANG XIAOXIA 0.28% 1,949,250 0 natural person Domestic WANG XIAOXING 0.25% 1,742,700 0 natural person Domestic LIN LI 0.24% 1,669,600 0 natural person Top 10 unrestricted shareholders Shares by type Name of shareholder Unrestricted shares Type Shares RM B-denominate BEIJING GRAIN GROUP CO., LTD. 123,561,963 123,561,963 d ordinary stock RM B-denominate CHINA DEVELOPM ENT BANK CAPITAL CO., LTD. 20,393,051 20,393,051 d ordinary stock Domestically LI SHERYN ZHAN M ING 17,425,400 listed foreign 17,425,400 stock GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTM ENT FUND M ANAGEM ENT CO., RM B-denominate 15,116,472 15,116,472 LTD.—GOLD BUFFALO RUNYING (TIANJIN) d ordinary stock EQUITY INVESTM ENT FUND (L.P.) RM B-denominate M EI JIANYING 2,604,203 2,604,203 d ordinary stock RM B-denominate HU TIANGAO 2,356,052 2,356,052 d ordinary stock Domestically ZHANG XIAOXIA 1,949,250 listed foreign 1,949,250 stock RM B-denominate WANG XIAOXING 1,742,700 1,742,700 d ordinary stock RM B-denominate LIN LI 1,669,600 1,669,600 d ordinary stock CHEN OUQIN 1,652,679 RM B-denominate 1,652,679 5 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 d ordinary stock Beijing State-Owned Capital Operation And M anagement Center owns 100% of Beijing Grain Group Co., Ltd., and Beijing Grain Group Co., Related or acting-in-concert parties among shareholders Ltd. is a shareholder of the Company (a 42.06% holding). Apart from above that, the Company does not know whether there are any other related parties or acting-in-concert parties among the top 10 shareholders. 1. Shareholder Wang Xiaoxing holds 1,742,700 shares in the Company through his account of collateral securities for margin trading in Soochow Securities Co., Ltd. Top 10 ordinary shareholders involved in securities 2. Shareholder Hu Tiangao holds 338,000 shares in the Company margin trading (if any) through his account of collateral securities for margin trading in Zheshang Securities Co., Ltd. and 2,018,052 shares in the Company through his common account. Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yea √ No No such cases in the Reporting Period. 2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them □ Applicable √ Not applicable 6 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 Part III Significant Events I Changes in Selected Consolidated Financial Statement Line Items and Explanation of why √ Applicable □ Not applicable 1. The decrease of monetary capital primarily driven by the repayment of bank borrowings and purchase of income receipts regarding cash management of raised funds during the Reporting Period. 2. The increase of prepayments primarily driven by the increase of prepayments to suppliers arising from increase of procurement out of necessity of production and operation during the Reporting Period. 3. The increase of other receivables primarily driven because the charge of warehouse service for Q3 2019 has not been received yet as at 30 September 2019. 4. The increase of other current assets primarily because the purchase of income receipts regarding cash management of raised funds during the Reporting Period has not expired yet as at 30 September 2019. 5. The decrease of construction in progress primarily driven by the transfer of some construction in progress into fixed assets due to completion during the Reporting Period. 6. The increase of other non-current assets primarily driven by the increase of fixed time deposits of more than one year during the Reporting Period. 7. The increase of notes payable and accounts payable primarily driven by the increase of debts to suppliers arising from increase of procurement out of necessity of production and operation. 8. The decrease of payroll payable primarily driven by the payment in the Reporting Period of the 2018 annual performance pay that had been set aside in 2018. 9. The increase of asset disposal income primarily driven by the net income from demolition of some courtyard walls of the Company located at Luhe, Tongzhou District, Beijing for the eastern expansion of Guangqu Road in 2019. 10. The increase of net cash generated from financing activities primarily driven by bank loan repayment in 2019 out of necessity of production and operation plans. 11. The decrease of net profit attributable to the listed company’s shareholders before exceptional items is primarily driven by the negative effects on the Sino-US trade friction and the increase of the raw material cost and others. 7 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 II Progress, Influence and Solutions Associated with Significant Events √ Applicable □ Not applicable Overview of significant events Disclosure date Announcement index The Company and its wholly -owned Cninfo: Announcement of Hainan Jingliang Holdings Co., Ltd. on subsidiary Beijing Jingliang Food 13 July 2019 Suspension of Trading of the Company’s Stocks for Plan of Asset Co., Ltd. intend to purchase 25.1149% Purchase via Cash Payment and Share Offering (2019-045) of equity interests in Zhejiang Cninfo: Indicative Announcement of Hainan Jingliang Holdings Xiaowangzi Food Share Co, Ltd. Co., Ltd. on Plan of Asset Purchase via Cash Payment and Share collectively held by six natural 22 July 2019 Offering and Related-party Transactions and Resumption of persons via cash payment and share Trading of the Company’s Stocks (2019-046) offering. The six natural persons are Cninfo: Announcement of Hainan Jingliang Holdings Co., Ltd. on Wang Yuecheng, Qiu Xiaobin, Hong Progress of Plan of Asset Purchase via Cash Payment and Share M uqiang, Zhu Yanjun, Yao Zishan 21 August 2019 Offering and Related-party Transactions after Disclosure thereof and Shuai Yiwu. The Company held (2019-056) the board meeting on 19 July 2019, on which the Proposal on Plan of Asset Purchase via Cash Payment and Cninfo: Announcement of Hainan Jingliang Holdings Co., Ltd. on Share Offering by Hainan Jingliang Progress of Plan of Asset Purchase via Cash Payment and Share Holdings Co., Ltd. and its Summary 21 September 2019 Offering and Related-party Transactions after Disclosure thereof and proposals in relation to this (2019-065) transaction were reviewed and approved. The 8th Board of Directors and the 8th Cninfo: Announcement of Hainan Jingliang Holdings Co., Ltd. on 24 September 2019 Supervisory Committee expired in Changing Directors and Supervisors (2019-067) September 2019. Then, the Company Cninfo: Announcement of Hainan Jingliang Holdings Co., Ltd. on held the 3rd Extraordinary General 27 September 2019 Resolutions of the 1s t Meeting of the 9 th Board of Directors M eeting of 2019 on 23 September (2019-068) 2019 and approved all proposals in relation to the general election of the Board of Directors and the Supervisory Committee via cumulative voting and held the 1 st M eeting of the 9th Board of Directors and the 1st M eeting of the 9th Cninfo: Announcement of Hainan Jingliang Holdings Co., Ltd. on Supervisory Committee on 26 27 September 2019 Resolutions of the 1 st Meeting of the 9th Supervisory Committee September 2019, on which the (2019-069) Chairman of the Board, the Chairman of the Supervisory Committee and members of all special committees were elected and the senior management were engaged. Progress on any share repurchases: 8 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 □ Applicable √ Not applicable Progress on reducing the repurchased shares by means of centralized bidding: □ Applicable √ Not applicable III Commitme nts that the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Othe r Parties, Failed to Fulfill on Time during Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. IV Securities Investments √ Applicable □ Not applicable Unit: RM B Gain/Lo Accumu ss on lated fair-valu Purchas Gain/los Initial M easure Beginni e fair-valu ed in Sold in s in Ending Account Funding Security Security Security ng e Reporti investm ment carrying changes Reporti Reporti carrying type code name changes ng method in ng ng amount ing title source ent cost amount Reporti charged Period Period Period to ng equity Period 20,647, 20,647, Cost 2,070,7 Self-rais Other 204001 GC001 200,000 200,000 Other method 48.08 ed .00 .00 Cost 300,000 300,000 74,650. Self-rais Other 204004 GC004 Other method ,000.00 ,000.00 83 ed Cost 120,200 120,200 119,991. Self-rais Other 204007 GC007 Other method ,000.00 ,000.00 46 ed Cost 100,300 100,300 98,005. Self-rais Other 204014 GC014 Other method ,000.00 ,000.00 90 ed 21,167, 21,167, 2,363,3 Total 0.00 -- 0.00 0.00 0.00 700,000 700,000 0.00 -- -- 96.27 .00 .00 Disclosure date of announcement on Board’s 21 February 2019 consent for securities investments Disclosure date of N/A announcement on general 9 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 meeting’s consent for securities investments (if any) V Wealth Manage ment Entrustment √ Applicable □ Not applicable Unit: RM B’0,000 (in RM B ten thousand yuan) Type of wealth Outstanding amount Funding source Principal Overdue amount management before maturity Wealth management product purchased from Idle raised 38,700 38,700 0 securities trader Wealth management product purchased from Self-funded 9,030 3,430 0 bank Total 47,730 42,130 0 High-risk wealth management entrustments with amounts that are individually s ignificant, or with low security, low liquidity, or no protection of the principal: √ Applicable □ Not applicable Unit: RM B’0,000 (in RM B ten thousand yuan) Overv Collec iew tion/pa Throu Type Refere Expect Actual Any and Invest yment Impair gh of Way nce ed gain/lo plan index Type Fundi ment of ment prescri Truste wealth Princi Start End of annual earnin ss in for to of ng with gain/lo allowa bed e manag pal date date payba ized gs Report further more trustee source princi ss in nce (if proced ement ck return (if ing entrust infor pal Report any) ure or product (%) any) Period ment matio ing not n (if Period any) Pay the www. Agree princi CITIC Securit Certific 14 cninfo Idle ment pal SECU ies ation 4 July Octob Unred .com.c 38,700 raised of and 2.70% 0 Yes Yes RITIE compa of trust 2019 er eemed n: capital contra earnin S ny receipt 2019 2019- ct gs at 044 the maturi 10 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 ty date of invest ment Total 38,700 -- -- -- -- -- -- 0 0 -- -- -- -- Wealth management entrustments with possible impairments including an expectedly unrecoverable principal: □ Applicable √ Not applicable VI Investments in Derivative Financial Instruments √ Applicable □ Not applicable Unit: RM B’0,000 (in RM B ten thousand yuan) Ending investment Actual Ending as % of the gain/loss in Type of derivative Start date End date investment Company’s ending net Reporting assets Period Agricultural product future 1 January 2019 30 September 2019 7,532.71 3.19% -4,955.39 contract Foreign exchange forwards 1 January 2019 30 September 2019 23 0.01% 376.1 Total -- -- 7,555.71 3.20% -4,579.29 Funding source Self-funded Legal matters involved (if N/A applicable) Disclosure date of board 21 February 2019 announcement approving 30 M arch 2019 derivative investment (if any) Disclosure date of general 9 M arch 2019 meeting announcement approving derivative 20 April 2019 investment (if any) The Company’s conduction of hedging business is not aimed at speculation, but mainly to Analysis of risks and control effectively avoid the impact of raw material price fluctuation on the Company. However, there will measures associated with be certain risks: 1. Price fluctuation risk: price fluctuation risk may be generated when the futures derivative investments held in market changes greatly, resulting in transaction losses; 2. Capital risk: capital risk may be Reporting Period (including correspondingly brought because the futures trading adopts margin and marking-to-market system; but not limited to market risk, 3. Internal control risk: there may be risks due to imperfect internal control system for the high liquidity risk, credit risk, expertise and complexity of futures trading; 4. Technical risk: there may be technical risks due to operational risk, legal risk, incomplete computer systems. The Company adopts following risk control measures: 1. M atching etc.) the hedging business with the Company’s production and operation so as to maximally reduce the price fluctuation risk; 2. The Company will reasonably dispatch its own funds for hedging business, 11 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 strictly control the hedging fund scale and reasonably plan and use margins; 3. Management System of Commodity Futures Trading is formulated at the Company and subsidiaries levels respectively based on actual situation of the Company and pursuant to governing stipulations of Guidelines for Standard Operation of Companies Listed in Shenzhen Stock Exchange which have made clearly stipulations about the amount, variety scope, approval authority, internal approval procedures, responsible departments and persons, information isolation measures, internal risk report and related solution process, information disclosure, etc. regarding hedging business. The Company will strictly control all sectors in accordance with the management system formulated; 4. Establishing qualified systems for transaction, communication and information services so as to guarantee the normal operation of the transaction system and smooth proceeding of transactions. When a wrong order occurs, corresponding measures should be timely taken to reduce losses. Changes in market prices or fair value of derivative investments in Reporting The value of the Company’s future contracts changed according to the contract prices declared by Period (fair value analysis the future exchange, which were broadly representative. And the fair value of the Company’s future should include measurement contracts was executed in strict compliance with the future exchange’s settlement methods. method and related assumptions and parameters) M ajor changes in accounting policies and specific accounting principles adopted N/A for derivative investments in Reporting Period compared to last reporting period The relevant decision-making procedures for the Company and its majority-owned subsidiaries to conduct foreign exchange derivatives trading business are in compliance with relevant national laws, regulations and the governing provisions of the Articles of Association after verification. Opinion of independent Based on normal production and operation, the Company uses foreign exchange derivatives directors on derivative instruments to reduce exchange rate risks and finance costs, and control business risks. There is no investments and risk control harm to the interests of the Company and all other shareholders, especially minority shareholders. It is agreed that the Company and its majority-owned subsidiaries will conduct foreign exchange derivative trading business within the consideration amount, and submit to the general meeting for deliberation. VII Visits Paid to the Company for Purposes of Research, Communication, Intervie w, etc. during Reporting Pe riod □ Applicable √ Not applicable No such cases in the Reporting Period. 12 Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2019 VIII Irregularities in Provision of Guarantees for External Parties □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s Capital by Controlling Shareholde r or Its Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. Hainan Jingliang Holdings Co., Ltd. 19 October 2019 13