Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 HAINAN JINGLIANG HOLDINGS CO., LTD. THIRD QUARTERLY REPORT 2020 October 2020 1 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 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. (hereinafter referred to as the “Company”) hereby guarantee that the contents of this Report and its summary are true, accurate and complete and free of any misrepresentations, misleading statements or material omissions, and collectively and individually accept legal responsibility for such contents. 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 truthful, 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 Quarterly Report 2020 Part II Key Corporate Information I Key Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No 30 September 2020 31 December 2019 Change (%) Total assets (RMB) 6,057,365,761.06 5,231,266,600.19 15.79% Equity attributable to the listed 2,645,832,412.43 2,406,039,283.87 9.97% company’s shareholders (RMB) Q3 2020 YoY change (%) Q1-Q3 2020 YoY change (%) Operating revenue (RMB) 1,928,342,701.75 5.67% 5,679,115,769.38 11.18% Net profit attributable to the listed 40,894,930.95 20.84% 114,657,826.14 34.34% company’s shareholders (RMB) Net profit attributable to the listed company’s shareholders before 32,040,014.29 13.31% 100,035,204.24 44.00% exceptional gains and losses (RMB) Net cash generated from/used in -273,955,632.37 -221.14% -86,859,811.61 -119.44% operating activities (RMB) Basic earnings per share (RMB/share) 0.06 20.00% 0.16 33.33% Diluted earnings per share (RMB/share) 0.06 20.00% 0.16 33.33% Weighted average return on equity (%) 1.56% 5.41% 4.65% 26.02% Exceptional gains and losses: √ Applicable □ Not applicable Unit: RMB Item Q1-Q3 2020 Note Gain or loss on disposal of non-current assets (inclusive of impairment -30,020.88 allowance write-offs) Government grants through profit or loss (exclusive of government grants given in the Company’s ordinary course of business at fixed quotas or 7,543,633.15 amounts as per the government’s uniform standards) Gain or loss on fair-value changes on held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and 13,538,448.19 derivative financial assets and liabilities and other debt investments (exclusive of the effective portion of hedges that arise in the Company’s 3 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 ordinary course of business) Non-operating income and expense other than the above -727,186.58 Less: Income tax effects 5,293,637.02 Non-controlling interests effects (net of tax) 408,614.96 Total 14,622,621.90 -- 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 Number of Shareholders and Holdings of Top 10 of Them as at the End of the Reporting Period 1. Numbers of Ordinary Shareholders and Preference Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders Unit: share Number of preference Number of ordinary shareholders 79,532 shareholders with resumed 0 voting rights (if any) Top 10 shareholders Nature of Shareholding Restricted Shares in pledge or frozen Name of shareholder Total shares held shareholder percentage shares held Status Shares BEIJING GRAIN GROUP State-owned 39.68% 288,439,561 164,877,598 CO., LTD. corporation BEIJING STATE-OWNED State-owned CAPITAL OPERATION AND 6.67% 48,510,460 48,510,460 corporation MANAGEMENT CENTER Domestic WANG YUECHENG 5.66% 41,159,887 41,159,887 individual Foreign LI SHERYN ZHAN MING 1.23% 8,941,300 0 individual CHINA DEVELOPMENT State-owned 0.94% 6,849,384 0 BANK CAPITAL CO., LTD. corporation GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND MANAGEMENT Other 0.51% 3,684,503 0 CO., LTD.—GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND (L.P.) MEI JIANYING Domestic 0.36% 2,604,203 0 4 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 individual Domestic ZHANG XIAOXIA 0.27% 1,949,250 0 individual Domestic WANG XIAOXING 0.24% 1,748,400 0 individual Domestic ZHU PENG 0.22% 1,577,900 0 individual Top 10 unrestricted shareholders Shares by class Name of shareholder Unrestricted ordinary shares held Class Shares RMB-denominate BEIJING GRAIN GROUP CO., LTD. 123,561,963 123,561,963 d ordinary share Domestically LI SHERYN ZHAN MING 8,941,300 listed foreign 8,941,300 share CHINA DEVELOPMENT BANK CAPITAL RMB-denominate 6,849,384 6,849,384 CO., LTD. d ordinary share GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND RMB-denominate MANAGEMENT CO., LTD.—GOLD 3,684,503 3,684,503 BUFFALO RUNYING (TIANJIN) EQUITY d ordinary share INVESTMENT FUND (L.P.) RMB-denominate MEI JIANYING 2,604,203 2,604,203 d ordinary share Domestically ZHANG XIAOXIA 1,949,250 listed foreign 1,949,250 share RMB-denominate WANG XIAOXING 1,748,400 1,748,400 d ordinary share RMB-denominate ZHU PENG 1,577,900 1,577,900 d ordinary share Domestically ORIENT SECURITIES (HONG KONG) 1,354,500 listed foreign 1,354,500 LIMITED share FOSHAN SHUNDE XIHUA RMB-denominate 1,144,000 1,144,000 ELECTRONICS CO., LTD. d ordinary share ① Beijing State-Owned Capital Operation and Management Center owns 100% of Beijing Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is the controlling Related or acting-in-concert parties among the shareholder of the Company (a 39.68% holding). ② Wang Yuecheng is a Deputy shareholders above General Manager of the Company. Apart from the aforesaid, the Company does not know whether there are any other related parties or acting-in-concert parties among the top 10 shareholders. Top 10 shareholders engaged in securities ① Shareholder Wang Xiaoxing held 1,748,400 shares in the Company through his 5 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 margin trading (if any) account of collateral securities for margin trading in Soochow Securities Co., Ltd. ② Shareholder Zhu Peng held 1,315,200 shares in the Company through his account of collateral securities for margin trading in China Merchants Securities Co., Ltd. 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. □ Yes √ No No such cases in the Reporting Period. 2. Number of Preference Shareholders and Shareholdings of Top 10 of Them □ Applicable √ Not applicable 6 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Part III Significant Events I Changes in Key Financial Statement Line Items and Explanation of why √ Applicable □ Not applicable 1. Derivative financial assets increased primarily driven by an increase in deposits for futures contracts in the current period. 2. Prepayments increased primarily driven by an increase in prepayments to suppliers due to new soy bean purchases for the oils and oilseeds business in the current period. 3. Other non-current assets increased primarily driven by new bank deposits with a term of over one year in the current period. 4. Short-term borrowings increased primarily driven by bank loan raised for new soy bean purchases for the oils and oilseeds business in the current period. 5. R&D expense increased primarily driven by the reclassification of certain R&D personnel’s salaries from administrative expense to R&D expense in the current period. 6. Return on investment increased primarily driven by increases in return on joint venture investments and in wealth management income. 7. Gain on fair value changes decreased primarily driven by changes in the value of futures contracts. 8. Net profit increased primarily driven by year-on-year increases in both production and sales volume in the oils pressing business due to a strong market in the current period, boosting revenue and gross profit. 9. Net cash generated from operating activities decreased primarily driven by a year-on-year increase in soy bean purchases for the oils pressing business in the current period. 10. Net cash generated from financing activities increased primarily driven by bank loan raised for new soy bean purchases for the oils and oilseeds business in the current period. II Progress, Influence and Solutions in respect of Significant Events □ Applicable √ Not applicable Progress of any share repurchase: □ Applicable √ Not applicable 7 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Progress of any reduction of the repurchased shares through centralized bidding: □ Applicable √ Not applicable III Commitments that the Company’s Actual Controller, Shareholders, Related Parties, Acquirers, the Company Itself or Other Relevant Parties, Failed to Fulfill on Time during the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. IV Financial Investments 1. Securities Investments √ Applicable □ Not applicable Unit: RMB Gain/los Cumulat s on Account ive fair-valu Purchas Sold in Gain/los Type of Code of Name of Initial ing Opening fair-valu Closing e ed in the the s in the Account Funding securitie securitie securitie investm measure carrying e carrying changes current current current ing title source s s s ent cost ment amount changes amount in the period period period method through current equity period Cost 289,900 289,900 30,767. Self-fun Other 204001 GC001 0.00 Other method ,000.00 ,000.00 16 ded Cost 40,000, 40,000, 34,619. Self-fun Other 204003 GC003 0.00 Other method 000.00 000.00 73 ded Cost 50,000, 50,000, Self-fun Other 204007 GC007 0.00 0.00 Other method 000.00 000.00 ded 379,900 329,900 65,386. 50,000, Total 0.00 -- 0.00 0.00 0.00 -- -- ,000.00 ,000.00 89 000.00 Disclosure date of the announcement on the 7 March 2020 Board’s approval of securities investments Disclosure date of the announcement on the general meeting’s approval of securities investments (if 8 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 any) 2. Investments in Derivative Financial Instruments √ Applicable □ Not applicable Unit: RMB’0,000 Closing investment Actual Closing Type of derivative financial amount as % of the gain/loss in Start date End date investment instrument Company’s closing the current amount net assets period Agricultural commodity 1 January 2020 30 September 2020 27,395.28 10.35% 2,756.59 futures Forex forwards 1 January 2020 30 September 2020 42,364.52 16.01% -1,922.48 Forex forwards 14 September 2020 30 November 2020 802.8 0.30% 0 Forex forwards 16 September 2020 31 December 2020 858 0.32% 0 Forex forwards 17 September 2020 31 December 2020 132 0.05% 0 Forex forwards 25 September 2020 31 December 2020 896.4 0.34% 0 Total -- -- 72,449 27.37% 834.11 Funding source Self-funded Legal matters involved (if N/A applicable) Disclosure date of the 7 March 2020 announcement on the Board’s approval of investments in 28 March 2020 derivative financial instruments (if any) Disclosure date of the announcement on the general meeting’s approval of 18 April 2020 investments in derivative financial instruments (if any) The Company’s conduction of hedging business is not aimed at speculation, but mainly to Risk analysis and control effectively avoid the impact of raw material price fluctuation on the Company. However, there will measures in respect of 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 the Reporting Period correspondingly brought because the futures trading adopts margin and marking-to-market system; (including but not limited to 3. Internal control risk: there may be risks due to imperfect internal control system for the high market risk, liquidity risk, expertise and complexity of futures trading; 4. Technical risk: there may be technical risks due to credit risk, operational risk, incomplete computer systems. The Company adopts following risk control measures: 1. Matching 9 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 legal risk, 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, strictly control the hedging fund scale and reasonably plan and use margins; 3. Management System for Commodity Futures Trading is formulated 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 Management System for Commodity Futures Trading; 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 the 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) Significant changes in accounting policies and specific accounting principles adopted for derivative None investments in the Reporting Period compared to the last reporting period 1. Opinion of independent directors on the Proposal on 2020 Futures Hedging Plan of Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. and Beijing Jingliang Oils Co., Ltd.: after check, the Company carried out the business of futures hedging based on normal production and management, relying on specific business. Under the premise of ensuring normal production and management, the Company used futures hedging tools to avoid the adverse impacts on the Company’s operation from the large price fluctuation of raw materials and products, which is not detrimental to the interests of the Company and all other shareholders, especially minority shareholders. At the same time, the Opinion of independent Company formulated relevant systems, and specific operating instructions for the business of directors on derivative futures hedging through strengthening internal control and implementing risk prevention measures. investments and risk control It is agreed that the Company and its subsidiaries will continue to conduct futures hedging business according to the relevant regulations. 2. Opinion of independent directors on the Proposal on Conducting Foreign Exchange Derivatives Trading Business by the Company and Majority-owned Subsidiaries: after check, 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. Based on 10 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 normal production and operation, the Company uses foreign exchange derivatives instruments to reduce exchange rate risks and finance costs, and control business risks. There is no 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. V Progress of Projects Financed with Raised Funds √ Applicable □ Not applicable The Company’s projects financed with raised funds are the intermediary agency fee and transaction tax and fee project, the technological R&D centre project, and the channel and brand development project. The intermediary agency fee and transaction tax and fee project has been completed, while the other two projects are in a stage of adjustment. VI 2020 Annual Operating Performance Forecast Warning of a forecast loss on or a forecast significant year-on-year change in the 2020 annual net profit, as well as explanation of why: □ Applicable √ Not applicable VII Significant Contracts Arising from the Company’s Ordinary Course of Business □ Applicable √ Not applicable VIII Cash Entrusted for Wealth Management √ Applicable □ Not applicable Unit: RMB’0,000 Unrecovered overdue Type Funding source Amount Undue amount amount Bank’s wealth Self-funded 35,330 8,830 0 management product Broker’s wealth Idle raised funds 38,700 28,000 0 management product Total 74,030 36,830 0 High-risk wealth management transactions with a significant single amount, or with low security, low liquidity or 11 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 no principal protection: √ Applicable □ Not applicable Unit: RMB’0,000 Summ Type Recov ary of Actual ery of Throu Refere Any and wealt Invest Expect gain/lo the Impair gh Way nce plan index Type h Fundi ment ed ss in gain/lo ment prescri Princi Start End of annual for to Trustee of mana ng with return the ss in allowa bed pal date date payba ized further more trustee geme source princi (if Report the nce (if proced ck rate of transa infor nt pal any) ing Report any) ures return ctions matio produ Period ing or not n (if ct Period any) Anno Payba uncem ck of ent princi No. China Inco 22 As Idle 19 pal 2020- Securitie me Februa contra Unred Broker 28,000 raised Augus with 2.95% 0 0 Yes Yes 049 s Co., certifi ry ctually eemed funds t 2020 interes on Ltd. cate 2020 agreed t upon www. maturi cninfo ty .com.c n Total 28,000 -- -- -- -- -- -- 0 0 -- -- -- -- Wealth management transactions with possible impairments including an expectedly unrecoverable principal: □ Applicable √ Not applicable IX Irregularities in the Provision of Guarantees □ Applicable √ Not applicable No such cases in the Reporting Period. X Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. 12 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 XI Communications with the Investment Community such as Researches, Inquiries and Interviews Received during the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. 13 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Part IV Financial Statements I Financial Statements 1. Consolidated Balance Sheet Prepared by Hainan Jingliang Holdings Co., Ltd. 30 September 2020 Unit: RMB Item 30 September 2020 31 December 2019 Current assets: Monetary assets 720,149,456.50 557,168,512.39 Settlement reserve Loans to other banks and financial institutions Held-for-trading financial assets 121,300,000.00 161,300,000.00 Derivative financial assets 273,952,800.00 88,792,254.00 Notes receivable Accounts receivable 89,221,674.32 80,743,986.81 Receivables financing Prepayments 636,843,733.07 138,379,800.10 Premiums receivable Reinsurance receivables Receivable reinsurance contract reserve Other receivables 19,439,812.76 19,220,097.34 Including: Interest receivable 1,854,761.12 3,927,438.90 Dividends receivable Financial assets purchased under resale agreements Inventories 1,308,878,985.35 1,412,755,661.65 Contract assets Assets held for sale Current portion of non-current assets Other current assets 668,986,307.59 560,297,233.13 14 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Total current assets 3,838,772,769.59 3,018,657,545.42 Non-current assets: Loans and advances to customers Debt investments Other debt investments Long-term receivables Long-term equity investments 208,701,333.79 198,301,333.79 Investments in other equity 20,000,000.00 20,000,000.00 instruments Other non-current financial assets Investment property 22,927,669.32 31,781,350.74 Fixed assets 1,143,126,883.39 1,210,450,340.22 Construction in progress 17,745,104.13 17,876,177.78 Productive living assets Oil and gas assets Right-of-use assets Intangible assets 357,094,187.52 368,170,434.38 Development costs Goodwill 191,394,422.51 191,394,422.51 Long-term prepaid expense 20,325,416.09 21,026,628.97 Deferred income tax assets 7,277,974.72 2,603,066.38 Other non-current assets 230,000,000.00 151,005,300.00 Total non-current assets 2,218,592,991.47 2,212,609,054.77 Total assets 6,057,365,761.06 5,231,266,600.19 Current liabilities: Short-term borrowings 2,070,991,982.00 1,329,238,701.60 Borrowings from the central bank Loans from other banks and financial institutions Held-for-trading financial liabilities Derivative financial liabilities Notes payable 68,346,520.70 Accounts payable 151,338,619.76 130,568,413.43 Advances from customers 481,119,461.41 Contract liabilities 427,501,912.35 15 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Financial assets sold under repurchase agreements Customer deposits and deposits from other banks and financial institutions Payables for acting trading of securities Payables for underwriting of securities Employee benefits payable 11,721,759.04 25,192,583.58 Taxes and levies payable 37,554,687.45 47,842,621.41 Other payables 124,220,692.02 96,171,396.23 Including: Interest payable 21,686,584.31 24,604,524.69 Dividends payable 11,013,302.88 11,013,302.88 Fees and commissions payable Reinsurance payables Liabilities directly associated with assets held for sale Current portion of non-current liabilities Other current liabilities 28,340,190.00 Total current liabilities 2,920,016,363.32 2,110,133,177.66 Non-current liabilities: Insurance contract reserve Long-term borrowings Bonds payable Including: Preference shares Perpetual bonds Lease liabilities Long-term payables Long-term employee benefits 5,720,716.87 5,730,662.87 payable Provisions Deferred income 70,249,608.46 71,518,169.27 Deferred income tax liabilities 45,560,808.12 52,788,949.62 Other non-current liabilities Total non-current liabilities 121,531,133.45 130,037,781.76 Total liabilities 3,041,547,496.77 2,240,170,959.42 16 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Owners’ equity: Share capital 726,950,251.00 685,790,364.00 Other equity instruments Including: Preference shares Perpetual bonds Capital reserves 1,679,833,419.67 1,595,672,048.19 Less: Treasury stock Other comprehensive income 81,672.08 267,628.14 Specific reserve Surplus reserves 122,122,436.98 122,122,436.98 General reserve Retained earnings 116,844,632.70 2,186,806.56 Total equity attributable to owners of 2,645,832,412.43 2,406,039,283.87 the Company as the parent Non-controlling interests 369,985,851.86 585,056,356.90 Total owners’ equity 3,015,818,264.29 2,991,095,640.77 Total liabilities and owners’ equity 6,057,365,761.06 5,231,266,600.19 Legal representative: Li Shaoling Head for financial affairs: Guan Ying Head of the financial department: Liu Quanli 2. Balance Sheet of the Company as the Parent Unit: RMB Item 30 September 2020 31 December 2019 Current assets: Monetary assets 17,409,976.16 5,606,837.37 Held-for-trading financial assets Derivative financial assets Notes receivable Accounts receivable 42,510.00 42,510.00 Receivables financing Prepayments 467,482.14 532,843.92 Other receivables 19,277,199.41 12,612,756.48 Including: Interest receivable 17 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Dividends receivable Inventories 4,824,035.45 4,824,035.45 Contract assets Assets held for sale Current portion of non-current assets Other current assets 2,410,159.49 2,114,765.22 Total current assets 44,431,362.65 25,733,748.44 Non-current assets: Debt investments Other debt investments Long-term receivables Long-term equity investments 2,626,437,846.24 2,377,420,527.10 Investments in other equity 20,000,000.00 20,000,000.00 instruments Other non-current financial assets Investment property 5,249,530.28 5,476,357.73 Fixed assets 2,912,507.86 3,028,013.69 Construction in progress Productive living assets Oil and gas assets Right-of-use assets Intangible assets 22,350.00 94,800.66 Development costs Goodwill Long-term prepaid expense 15,723.16 86,477.92 Deferred income tax assets Other non-current assets Total non-current assets 2,654,637,957.54 2,406,106,177.10 Total assets 2,699,069,320.19 2,431,839,925.54 Current liabilities: Short-term borrowings Held-for-trading financial liabilities Derivative financial liabilities Notes payable 18 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Accounts payable Advances from customers 38,896.41 Contract liabilities 38,896.41 Employee benefits payable 275,537.37 480,445.28 Taxes and levies payable 1,017,410.80 1,709,752.97 Other payables 339,863,112.10 503,550,996.94 Including: Interest payable 21,082,795.47 21,082,795.47 Dividends payable 3,213,302.88 3,213,302.88 Liabilities directly associated with assets held for sale Current portion of non-current liabilities Other current liabilities Total current liabilities 341,194,956.68 505,780,091.60 Non-current liabilities: Long-term borrowings Bonds payable Including: Preference shares Perpetual bonds Lease liabilities Long-term payables Long-term employee benefits payable Provisions Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities 341,194,956.68 505,780,091.60 Owners’ equity: Share capital 726,950,251.00 685,790,364.00 Other equity instruments Including: Preference shares Perpetual bonds Capital reserves 2,381,244,900.85 2,173,387,468.71 19 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Less: Treasury stock Other comprehensive income Specific reserve Surplus reserves 109,487,064.39 109,487,064.39 Retained earnings -859,807,852.73 -1,042,605,063.16 Total owners’ equity 2,357,874,363.51 1,926,059,833.94 Total liabilities and owners’ equity 2,699,069,320.19 2,431,839,925.54 3. Consolidated Income Statement for Q3 Unit: RMB Item Q3 2020 Q3 2019 1. Revenues 1,928,342,701.75 1,824,886,529.92 Including: Operating revenue 1,928,342,701.75 1,824,886,529.92 Interest income Insurance premium income Fee and commission income 2. Costs and expenses 1,896,429,445.83 1,764,674,515.46 Including: Cost of sales 1,799,452,877.93 1,652,610,736.57 Interest expense Fee and commission expense Surrenders Net insurance claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and levies 5,605,278.41 5,490,323.70 Selling expense 43,982,894.87 50,699,252.02 Administrative expense 43,872,344.26 47,487,578.68 R&D expense 3,662,915.86 703,632.42 Finance costs -146,865.50 7,682,992.07 Including: Interest 1,944,727.32 13,489,855.34 expense 20 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Interest 2,266,888.66 5,935,578.64 income Add: Other income 4,209,110.12 1,908,875.68 Return on investment (“-” for loss) 9,660,149.23 1,089,429.46 Including: Share of profit or loss 3,457,423.01 of joint ventures and associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Exchange gain (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” 18,961,468.85 -512,728.81 for loss) Credit impairment loss (“-” for loss) Asset impairment loss (“-” for loss) 40,000.00 1,193.30 Asset disposal income (“-” for -30,020.88 -733,109.31 loss) 3. Operating profit (“-” for loss) 64,753,963.24 61,965,674.78 Add: Non-operating income 162,376.14 539,843.22 Less: Non-operating expense 151,689.36 1,127,254.62 4. Gross profit (“-” for loss) 64,764,650.02 61,378,263.38 Less: Income tax expense 19,076,844.38 15,853,529.76 5. Net profit (“-” for net loss) 45,687,805.64 45,524,733.62 5.1 By operating continuity 5.1.1 Net profit from continuing 45,687,805.64 45,524,733.62 operations (“-” for net loss) 5.1.2 Net profit from discontinued operations (“-” for net loss) 5.2 By ownership 5.2.1 Net profit attributable to 40,894,930.95 33,840,967.80 owners of the Company as the parent 5.2.1 Net profit attributable to 4,792,874.69 11,683,765.82 non-controlling interests 6. Other comprehensive income, net of -292,687.90 190,287.74 tax Attributable to owners of the Company -292,687.90 190,287.74 as the parent 21 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 6.1 Items that will not be reclassified to profit or loss 6.1.1 Changes caused by remeasurements on defined benefit schemes 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 6.1.3 Changes in the fair value of investments in other equity instruments 6.1.4 Changes in the fair value arising from changes in own credit risk 6.1.5 Other 6.2 Items that will be reclassified to -292,687.90 190,287.74 profit or loss 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 6.2.2 Changes in the fair value of other debt investments 6.2.3 Other comprehensive income arising from the reclassification of financial assets 6.2.4 Credit impairment allowance for other debt investments 6.2.5 Reserve for cash flow hedges 6.2.6 Differences arising from the translation of foreign -292,687.90 190,287.74 currency-denominated financial statements 6.2.7 Other Attributable to non-controlling interests 7. Total comprehensive income 45,395,117.74 45,715,021.36 Attributable to owners of the Company 40,602,243.05 34,031,255.54 as the parent Attributable to non-controlling 4,792,874.69 11,683,765.82 interests 8. Earnings per share 8.1 Basic earnings per share 0.06 0.05 8.2 Diluted earnings per share 0.06 0.05 22 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before the combinations was RMB , with the amount for the same period of last year being RMB . Legal representative: Li Shaoling Head for financial affairs: Guan Ying Head of the financial department: Liu Quanli 4. Income Statement of the Company as the Parent for Q3 Unit: RMB Item Q3 2020 Q3 2019 1. Operating revenue 657,313.52 0.00 Less: Cost of sales 0.00 0.00 Taxes and levies 98,534.78 33,908.40 Selling expense Administrative expense 10,108,313.15 10,567,161.77 R&D expense Finance costs -7,460.77 4,064,326.05 Including: Interest expense 4,067,234.62 Interest income 8,657.77 3,054.57 Add: Other income Return on investment (“-” for 206,002,223.87 loss) Including: Share of profit or loss of joint ventures and associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) Credit impairment loss (“-” for loss) Asset impairment loss (“-” for loss) Asset disposal income (“-” for loss) 2. Operating profit (“-” for loss) 196,460,150.23 -14,665,396.22 23 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Add: Non-operating income 29,508.17 Less: Non-operating expense 3. Gross profit (“-” for loss) 196,489,658.40 -14,665,396.22 Less: Income tax expense 4. Net profit (“-” for net loss) 196,489,658.40 -14,665,396.22 4.1 Net profit from continuing 196,489,658.40 -14,665,396.22 operations (“-” for net loss) 4.2 Net profit from discontinued operations (“-” for net loss) 5. Other comprehensive income, net of tax 5.1 Items that will not be reclassified to profit or loss 5.1.1 Changes caused by remeasurements on defined benefit schemes 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 5.1.3 Changes in the fair value of investments in other equity instruments 5.1.4 Changes in the fair value arising from changes in own credit risk 5.1.5 Other 5.2 Items that will be reclassified to profit or loss 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 5.2.2 Changes in the fair value of other debt investments 5.2.3 Other comprehensive income arising from the reclassification of financial assets 5.2.4 Credit impairment allowance for other debt investments 5.2.5 Reserve for cash flow hedges 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements 24 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 5.2.7 Other 6. Total comprehensive income 196,489,658.40 -14,665,396.22 7. Earnings per share 7.1 Basic earnings per share 7.2 Diluted earnings per share 5. Consolidated Income Statement for Q1~Q3 Unit: RMB Item Q1~Q3 2020 Q1~Q3 2019 1. Revenues 5,679,115,769.38 5,108,164,255.31 Including: Operating revenue 5,679,115,769.38 5,108,164,255.31 Interest income Insurance premium income Fee and commission income 2. Costs and expenses 5,471,569,621.49 5,018,488,742.07 Including: Cost of sales 5,155,654,135.99 4,693,289,477.71 Interest expense Fee and commission expense Surrenders Net insurance claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and levies 14,256,389.78 17,090,887.34 Selling expense 150,624,014.01 151,930,390.29 Administrative expense 121,904,630.55 128,785,807.05 R&D expense 6,466,632.88 1,234,698.42 Finance costs 22,663,818.28 26,157,481.26 Including: Interest 18,919,769.38 36,471,148.41 expense Interest 7,640,376.87 10,056,207.22 income 25 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Add: Other income 9,256,058.96 11,779,973.90 Return on investment (“-” for loss) 26,356,075.22 10,268,731.55 Including: Share of profit or loss 10,405,201.69 4,824,933.21 of joint ventures and associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Exchange gain (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” -57,915,198.40 25,645,552.41 for loss) Credit impairment loss (“-” for loss) Asset impairment loss (“-” for loss) 40,000.00 -196,502.26 Asset disposal income (“-” for -30,020.88 11,264,409.09 loss) 3. Operating profit (“-” for loss) 185,253,062.79 148,437,677.93 Add: Non-operating income 851,815.96 2,256,286.81 Less: Non-operating expense 1,570,361.13 1,949,673.24 4. Gross profit (“-” for loss) 184,534,517.62 148,744,291.50 Less: Income tax expense 43,538,676.24 37,975,305.88 5. Net profit (“-” for net loss) 140,995,841.38 110,768,985.62 5.1 By operating continuity 5.1.1 Net profit from continuing 140,995,841.38 110,768,985.62 operations (“-” for net loss) 5.1.2 Net profit from discontinued operations (“-” for net loss) 5.2 By ownership 5.2.1 Net profit attributable to 114,657,826.14 85,351,872.21 owners of the Company as the parent 5.2.1 Net profit attributable to 26,338,015.24 25,417,113.41 non-controlling interests 6. Other comprehensive income, net of -185,956.06 241,232.26 tax Attributable to owners of the Company -185,956.06 241,232.26 as the parent 6.1 Items that will not be reclassified to profit or loss 26 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 6.1.1 Changes caused by remeasurements on defined benefit schemes 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 6.1.3 Changes in the fair value of investments in other equity instruments 6.1.4 Changes in the fair value arising from changes in own credit risk 6.1.5 Other 6.2 Items that will be reclassified to -185,956.06 241,232.26 profit or loss 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 6.2.2 Changes in the fair value of other debt investments 6.2.3 Other comprehensive income arising from the reclassification of financial assets 6.2.4 Credit impairment allowance for other debt investments 6.2.5 Reserve for cash flow hedges 6.2.6 Differences arising from the translation of foreign -185,956.06 241,232.26 currency-denominated financial statements 6.2.7 Other Attributable to non-controlling interests 7. Total comprehensive income 140,809,885.32 111,010,217.88 Attributable to owners of the Company 114,471,870.08 85,593,104.47 as the parent Attributable to non-controlling 26,338,015.24 25,417,113.41 interests 8. Earnings per share 8.1 Basic earnings per share 0.16 0.12 8.2 Diluted earnings per share 0.16 0.12 Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before the combinations was RMB , with the amount for the same period of last year being RMB . 27 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Legal representative: Li Shaoling Head for financial affairs: Guan Ying Head of the financial department: Liu Quanli 6. Income Statement of the Company as the Parent for Q1~Q3 Unit: RMB Item Q1~Q3 2020 Q1~Q3 2019 1. Operating revenue 1,033,922.69 0.00 Less: Cost of sales 0.00 0.00 Taxes and levies 101,234.78 102,985.20 Selling expense Administrative expense 23,632,368.27 24,078,567.37 R&D expense Finance costs -12,505.93 11,629,290.32 Including: Interest expense 11,638,818.11 Interest income 16,908.21 14,138.40 Add: Other income 50,313.02 Return on investment (“-” for 206,400,562.23 loss) Including: Share of profit or loss of joint ventures and associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) Credit impairment loss (“-” for loss) Asset impairment loss (“-” for -4,344.16 loss) Asset disposal income (“-” for loss) 2. Operating profit (“-” for loss) 183,763,700.82 -35,815,187.05 Add: Non-operating income 33,509.61 Less: Non-operating expense 1,000,000.00 469,440.00 3. Gross profit (“-” for loss) 182,797,210.43 -36,284,627.05 28 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Less: Income tax expense 4. Net profit (“-” for net loss) 182,797,210.43 -36,284,627.05 4.1 Net profit from continuing 182,797,210.43 -36,284,627.05 operations (“-” for net loss) 4.2 Net profit from discontinued operations (“-” for net loss) 5. Other comprehensive income, net of tax 5.1 Items that will not be reclassified to profit or loss 5.1.1 Changes caused by remeasurements on defined benefit schemes 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 5.1.3 Changes in the fair value of investments in other equity instruments 5.1.4 Changes in the fair value arising from changes in own credit risk 5.1.5 Other 5.2 Items that will be reclassified to profit or loss 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 5.2.2 Changes in the fair value of other debt investments 5.2.3 Other comprehensive income arising from the reclassification of financial assets 5.2.4 Credit impairment allowance for other debt investments 5.2.5 Reserve for cash flow hedges 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements 5.2.7 Other 6. Total comprehensive income 182,797,210.43 -36,284,627.05 7. Earnings per share 29 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 7.1 Basic earnings per share 7.2 Diluted earnings per share 7. Consolidated Cash Flow Statement for Q1~Q3 Unit: RMB Item Q1~Q3 2020 Q1~Q3 2019 1. Cash flows from operating activities: Proceeds from sale of commodities 6,130,501,668.95 5,561,175,595.39 and rendering of services Net increase in customer deposits and deposits from other banks and financial institutions Net increase in borrowings from the central bank Net increase in loans from other financial institutions Premiums received on original insurance contracts Net proceeds from reinsurance Net increase in deposits and investments of policy holders Interest, fees and commissions received Net increase in loans from other banks and financial institutions Net increase in proceeds from repurchase transactions Net proceeds from acting trading of securities Tax and levy rebates 13,983,951.32 8,511,133.41 Cash generated from other operating 981,039,681.44 1,018,233,943.12 activities Subtotal of cash generated from 7,125,525,301.71 6,587,920,671.92 operating activities Payments for commodities and 5,873,912,623.39 4,955,576,528.87 services Net increase in loans and advances to customers Net increase in deposits in the central bank and other banks and financial institutions 30 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Payments for claims on original insurance contracts Net increase in loans to other banks and financial institutions Interest, fees and commissions paid Policy dividends paid Cash paid to and for employees 231,484,488.18 225,542,724.31 Taxes and levies paid 141,181,130.25 113,872,002.20 Cash used in other operating 965,806,871.50 846,183,684.46 activities Subtotal of cash used in operating 7,212,385,113.32 6,141,174,939.84 activities Net cash generated from/used in -86,859,811.61 446,745,732.08 operating activities 2. Cash flows from investing activities: Proceeds from disinvestment 2,021,317,255.39 1,451,236,691.57 Return on investment 13,741,859.72 24,608,980.29 Net proceeds from the disposal of fixed assets, intangible assets and other 128,368.58 69,211.68 long-lived assets Net proceeds from the disposal of 5,000,000.00 subsidiaries and other business units Cash generated from other investing activities Subtotal of cash generated from 2,040,187,483.69 1,475,914,883.54 investing activities Payments for the acquisition of fixed assets, intangible assets and other 22,088,912.56 41,645,608.65 long-lived assets Payments for investments 2,351,915,689.04 1,921,580,563.05 Net increase in pledged loans granted Net payments for the acquisition of 104,730,266.66 subsidiaries and other business units Cash used in other investing 578,813.60 752.21 activities Subtotal of cash used in investing 2,479,313,681.86 1,963,226,923.91 activities Net cash generated from/used in -439,126,198.17 -487,312,040.37 investing activities 3. Cash flows from financing activities: 31 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Capital contributions received Including: Capital contributions by non-controlling interests to subsidiaries Borrowings raised 2,371,670,609.65 1,633,175,871.20 Cash generated from other financing activities Subtotal of cash generated from 2,371,670,609.65 1,633,175,871.20 financing activities Repayment of borrowings 1,639,317,329.25 1,929,842,758.45 Interest and dividends paid 34,506,528.74 75,821,378.17 Including: Dividends paid by subsidiaries to non-controlling interests Cash used in other financing activities Subtotal of cash used in financing 1,673,823,857.99 2,005,664,136.62 activities Net cash generated from/used in 697,846,751.66 -372,488,265.42 financing activities 4. Effect of foreign exchange rates -6,809,062.59 3,782,563.49 changes on cash and cash equivalents 5. Net increase in cash and cash 165,051,679.29 -409,272,010.22 equivalents Add: Cash and cash equivalents, 555,097,777.21 867,870,016.78 beginning of the period 6. Cash and cash equivalents, end of the 720,149,456.50 458,598,006.56 period 8. Cash Flow Statement of the Company as the Parent for Q1~Q3 Unit: RMB Item Q1~Q3 2020 Q1~Q3 2019 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of services Tax and levy rebates 200.00 1,800.00 Cash generated from other operating 57,136,167.69 33,566,371.69 activities Subtotal of cash generated from 57,136,367.69 33,568,171.69 operating activities Payments for commodities and 26,731.99 25,453.09 services 32 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Cash paid to and for employees 16,823,531.12 17,908,969.70 Taxes and levies paid 350,168.29 105,317.14 Cash used in other operating 20,396,962.02 52,051,442.98 activities Subtotal of cash used in operating 37,597,393.42 70,091,182.91 activities Net cash generated from/used in 19,538,974.27 -36,523,011.22 operating activities 2. Cash flows from investing activities: Proceeds from disinvestment Return on investment 205,893,687.32 Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets Net proceeds from the disposal of subsidiaries and other business units Cash generated from other investing activities Subtotal of cash generated from 205,893,687.32 0.00 investing activities Payments for the acquisition of fixed assets, intangible assets and other 158,787.62 187,564.80 long-lived assets Payments for investments 1,780,563.05 Net payments for the acquisition of subsidiaries and other business units Cash used in other investing activities Subtotal of cash used in investing 158,787.62 1,968,127.85 activities Net cash generated from/used in 205,734,899.70 -1,968,127.85 investing activities 3. Cash flows from financing activities: Capital contributions received Borrowings raised 4,000,000.00 28,700,000.00 Cash generated from other financing activities Subtotal of cash generated from 4,000,000.00 28,700,000.00 financing activities Repayment of borrowings 215,400,000.00 Interest and dividends paid 33 Hainan Jingliang Holdings Co., Ltd. Third Quarterly Report 2020 Cash used in other financing activities Subtotal of cash used in financing 215,400,000.00 activities Net cash generated from/used in -211,400,000.00 28,700,000.00 financing activities 4. Effect of foreign exchange rates changes on cash and cash equivalents 5. Net increase in cash and cash 13,873,873.97 -9,791,139.07 equivalents Add: Cash and cash equivalents, 3,536,102.19 13,597,659.66 beginning of the period 6. Cash and cash equivalents, end of the 17,409,976.16 3,806,520.59 period II Adjustments to the Financial Statements 1. Adjustments to the Financial Statements at the Beginning of the First Execution Year (2020) of the New Accounting Standards Governing Revenue and Leases □ Applicable √ Not applicable 2. Retrospective Adjustments to the Comparative Data of Prior Periods due to the First Execution in 2020 of the New Accounting Standards Governing Revenue and Leases □ Applicable √ Not applicable III Independent Auditor’s Report Indicate by tick mark whether the financial statements above have been audited by an independent auditor. □Yes √ No These financial statements have not been audited by such an auditor. Hainan Jingliang Holdings Co., Ltd. 24 October 2020 34