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虹美菱B:2019年第三季度报告全文(英文版)2019-10-18  

						  CHANGHONG MEILING CO., LTD.

THE THIRD QUARTERLY REPORT FOR 2019




            October 2019




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                             CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)




                                     Section I. Important Notes

     Board of Directors and the Supervisory Committee of Changhong Meiling Co., Ltd. (hereinafter referred to
as the Company) and its directors, supervisors and senior executives hereby confirm that there are no any
fictitious statements, misleading statements, or important omissions carried in this report, and shall take all
responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
     Principal of the Company Mr. Wu Dinggang, Person in Charge of Accounting Works Mr. Pang Haitao and
Person in Charge of Accounting Organ (Accounting Officer) Mr. Yang Jun hereby confirm that the Financial
Report of the Third Quarterly Report is authentic, accurate and complete.

     Prompt of non-standard audit opinion
     □ Applicable √ Not applicable
     Third quarterly report of 2019 has not been audited.
     All directors of the Company are attended the Meeting for quarterly report deliberation.




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                                 CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)




                             Section II Basic information of Company

I. Main accounting data and index

Whether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes √No
                                                                                                                Changes of this period-end
                                          End of this period                     End of last period            over same period-end of last
                                                                                                                             year

Total assets(RMB)                                  14,817,745,280.38                  15,561,810,184.54                                -4.78%

Net assets attributable to
shareholders of listed company                      5,028,249,585.27                      5,015,730,486.57                              0.25%
(RMB)

                                                                                                                        Increase/decrease in
                                                                Increase/decrease in
                                                                                             Year-begin to end of           comparison with
                                        Current period         comparison with same
                                                                                                  the Period                 year-begin to
                                                                    period of last year
                                                                                                                       Period-end of last year

Operating revenue (RMB)                  3,907,875,881.65                         -1.74%        13,041,038,562.59                      -1.57%

Net profit attributable to
shareholders of the listed company          26,417,996.84                        76.66%               80,752,019.41                    23.03%
(RMB)

Net profit attributable to
shareholders of the listed company
                                             8,955,796.33                        274.85%              13,431,193.18                   214.58%
after deducting non-recurring gains
and losses(RMB)

Net cash flow arising from
                                              --                            --                     201,226,091.90                     -16.58%
operating activities(RMB)

Basic earnings per share
                                                      0.0253                     76.66%                      0.0773                    23.03%
(RMB/Share)

Diluted earnings per share
                                                      0.0253                     76.66%                      0.0773                    23.03%
(RMB/Share)

                                                               0.23 percentage points                                  0.30 percentage points
Weighted average ROE                                  0.53%                                                    1.60%
                                                               up                                                      up



Items and amount of extraordinary profit (gains)/losses
√Applicable         □Not applicable
                                                                                                                                        In RMB
                              Item                                     Amount from year-begin to                            Note


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                                     CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


                                                                       end of the Period

Gains/losses from the disposal of non-current asset (including the                             Found more in “Income from assets
                                                                               -4,436,536.97
write-off that accrued for impairment of assets)                                               disposal”

Governmental subsidy reckoned into current gains/losses (not
including the subsidy enjoyed in quota or ration according to                                  Found more in “Other income” and
                                                                               77,124,210.10
national standards, which are closely relevant to enterprise’s                                “Non-operation income”
business)

Except for the effective hedging business relevant with normal
operations of the Company, gains/losses from change of the fair
value for holding the trading financial assets, derivative financial
assets, trading financial liabilities and derivative financial                                 Found more in “Gain/loss of changes
                                                                                4,464,614.42
liability, as well as the investment income from disposing the                                 in fair value”, “investment income”
trading financial assets, derivative financial assets, trading
financial liabilities, derivative financial liability and other
creditors’ investment

Switch-back of the receivables for separate impairment tests and
provision for impairment of contract assets                                       662,652.68 --



Other non-operation income and expenditure except for the                                      Found more in “non-operation income
                                                                                1,763,043.66
aforementioned items                                                                           and   expenditure”

Less: impact on income tax                                                     11,543,274.56 --

     Impact on minority shareholders’ equity (post-tax)                          713,883.10 --

Total                                                                          67,320,826.23                      --


Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure
for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as
recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on
Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss,
explain reasons

□Applicable √Not applicable

The Company has no items defined as recurring profit (gain)/loss according to the lists of extraordinary profit
(gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the
Public --- Extraordinary Profit/loss, in the period

II. Total number of shareholders at the end of this report period and top ten shareholders

1. Number of common shareholders and preference shareholders with voting rights recovered and top ten
common shareholders

                                                                                                                             In shares


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                                  CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


                                                                         Total preference shareholders
Total number of common shareholders                                      with voting rights recovered at
                                                                64,377                                                                       0
at the end of report period                                              end of reporting period (if
                                                                         applicable)

                                                         Top ten shareholders

                                                                                                                        Number of share
                                                                                                 Amount of
                                                                 Proportion     Amount of                                pledged/frozen
                                                Nature of
           Shareholder’s name                                    of shares                    restricted shares
                                               shareholder                      shares held
                                                                    held                                                State of
                                                                                                       held                          Amount
                                                                                                                         share

                                          State-owned legal
Sichuan Changhong Electric Co., Ltd.                                23.79%      248,457,724            69,877,638          -             -
                                          person

Hefei Industrial Investment Holding       State-owned legal
                                                                     4.58%        47,823,401                     -         -             -
(Group) Co., Ltd.                         person

CHANGHONG (HK) TRADING
                                          Foreign legal person       2.59%        27,077,797                     -         -             -
LIMITED

                                          Foreign natural
CAO SHENGCHUN                                                        1.41%        14,765,386                     -         -             -
                                          person

Caitong Fund- Ningbo Bank-Haitong         Domestic
Xingtai (Anhui) Emerging Industry         non-state-owned            1.03%        10,733,452                     -         -             -
Investment Fund (Limited Partnership)     legal person

                                          Domestic
China Construction Bank -Huaxia
                                          non-state-owned            0.67%         6,996,400                     -         -             -
Zhongzheng Sichuan SOE reform ETF
                                          legal person

Phillip Securities (Hong Kong) Limited    Foreign legal person       0.60%         6,296,913                     -         -             -

                                          Domestic natural
Ma Guobin                                                            0.56%         5,874,969                     -         -             -
                                          person

                                          Domestic natural
Zheng Huiru                                                          0.45%         4,680,000                     -         -             -
                                          person

China Securities Finance Corporation      Domestic general
                                                                     0.42%         4,362,500                     -         -             -
Limited                                   legal person

                                  Particular about top ten shareholders with un-restrict shares held

                                           Amount of unrestricted shares                               Type of shares
           Shareholders’ name
                                                         held                                  Type                                Amount

Sichuan Changhong Electric Co., Ltd.                            178,580,086 RMB ordinary shares                                    178,580,086

Hefei Industrial Investment Holding
                                                                 47,823,401 RMB ordinary shares                                     47,823,401
(Group) Co., Ltd.

CHANGHONG (HK) TRADING
                                                                 27,077,797 Domestically listed foreign shares                      27,077,797
LIMITED



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                                  CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


CAO SHENGCHUN                                                   14,765,386 Domestically listed foreign shares             14,765,386

Caitong Fund- Ningbo Bank-Haitong
Xingtai (Anhui) Emerging Industry                               10,733,452 RMB ordinary shares                            10,733,452
Investment Fund (Limited Partnership)

China Construction Bank -Huaxia
                                                                 6,996,400 RMB ordinary shares                             6,996,400
Zhongzheng Sichuan SOE reform ETF

Phillip Securities (Hong Kong) Limited                           6,296,913 Domestically listed foreign shares              6,296,913

Ma Guobin                                                        5,874,969 RMB ordinary shares                             5,874,969

Zheng Huiru                                                      4,680,000 RMB ordinary shares                             4,680,000

China Securities Finance Corporation
                                                                 4,362,500 RMB ordinary shares                             4,362,500
Limited

                                           Among the above shareholders, CHANGHONG (HK) TRADING LIMITED (hereinafter
                                           referred to as Hong Kong Changhong) is the wholly-owned subsidiary of Sichuan
                                           Changhong Electric Co., Ltd. (hereinafter referred to as Sichuan Changhong); except the
                                           shares of the Company directly held by Hong Kong Changhong, 6,296,913 shares of
                                           B-stock are also held through Phillip Securities (Hong Kong) Limited, the foregoing
                                           shareholders constitute persons of uniform action. There existed no associated relationship
Explanation on associated relationship     or belong to the concerted actors as specified in the Measures for the Administration of
or consistent actors among the aforesaid   Information Disclosure of Shareholder Equity Changes of Listed Companies among
shareholders                               Sichuan Changhong, Hong Kong Changhong and other top 7 shareholders; “Caitong
                                           Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment Fund
                                           (Limited Partnership) ” refers to the products of Caitong Fund Management Company
                                           subscribe for privately placement of 2016; The company neither knows whether there is
                                           any association among other shareholders, nor knows whether other shareholders belong
                                           to the persons acting in concert that is stipulated in the “Administrative Measures on
                                           Information Disclosure of Changes in Shareholding of Listed Companies”.

                                           As of 30th September 2019, among the top 10 common shareholders, Ma Guobin holds
Explanation on top ten common
                                           5,874,969 shares of the Company through customer credit trading secured account of
shareholders involving margin business
                                           Founder Securities Co., Ltd., and 0 shares hold through common securities account, thus
(if applicable)
                                           5,874,969 shares of the Company are held in total

 Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
 buy-back agreement dealing in reporting period
 □ Yes √ No
 The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
 have no buy-back agreement dealing in reporting period.

 2. Total shareholders with preferred stock held and shares held by top ten shareholders with preferred
 stock held

 □ Applicable √ Not applicable



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                              CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)




                                    Section III. Important events

I. Particular about major changes from items of main accounting statements and financial
indexes as well as reasons

√ Applicable □Not applicable
(i) Changes of items of balance sheet and cause analysis
                                                                                                                         In RMB

          Item        Closing balance     Opening balance     Changes                           Reasons
 Tradable financial                                                        Change of the fair value of forward foreign
                        18,609,751.92         9,253,635.59      101.11%
 assets                                                                    exchange contract in the period
                                                                           The account receivable from subsidiary
 Account
                      2,206,388,200.30    1,673,362,136.29       31.85%    Changhong Air-conditioner and Zhongshan
 receivable
                                                                           Changhong increased in the period
                                                                           The account of equipment relocation are paid in
 Account paid in
                        55,225,984.20        86,180,459.26      -35.92%    advance from subsidiary Changhong
   advance
                                                                           Air-conditioner in the period
 Other account                                                             Cash deposit for the engineering projects are paid
                       130,723,288.12        63,192,740.93      106.86%
 receivable                                                                in the period
 Investment real                                                           The investment real estate from subsidiary
                        97,231,072.87        46,846,507.41      107.55%
 estate                                                                    Changhong Air-conditioner increased in the period
 Tradable financial                                                        Change of the fair value of forward foreign
                        18,131,337.32        55,586,666.70      -67.38%
 liability                                                                 exchange contract in the period
 Account received                                                          The account received in advance from subsidiary
                       240,271,809.66       354,551,354.80      -32.23%
   in advance                                                              Meiling Group declined in the period
                                                                           VAT are paid by subsidiary Changhong
 Taxes Payable          65,314,443.39       109,753,432.17      -40.49%
                                                                           Air-conditioner and Meiling Group in the period
 Non-current
                                                                           The long-term loans due within one year are paid
 liability due             300,000.00       273,682,737.85      -99.89%
                                                                           by parent company in the period
 within one year
                                                                           The long-term loans from parent company
 Long-term loans       301,280,000.00         1,920,000.00    15,591.67%
                                                                           increased in the period
                                                                           The deferred income tax liability recognize by
 Deferred income
                          5,996,351.53        3,098,699.11       93.51%    subsidiary Changhong Air-conditioner increased in
   tax liability
                                                                           the period

 (ii) Changes of items of profit statement and cause analysis
                                                                                                                         In RMB

                                           Same period of
          Item         Current Period                         Changes                           Reasons
                                              last year
                                                                           The exchange loss increased on a y-o-y basis in
Financial expenses        -9,844,161.99      -33,207,231.05      70.36%
                                                                           the period

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                                CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


  Income from fair                                                               Change of the fair value of forward foreign
                           43,185,470.53        -25,833,772.85        267.17%
  value changes                                                                  exchange contract in the period
                                                                                 The loss of forward exchange contract delivery
  Investment income        -38,327,115.65       20,726,039.38        -284.92%
                                                                                 increased from a year earlier
  Income from the
  investment for                                                                 The income from investment for associated
                             1,251,855.70       -12,056,138.08        110.38%
  associated enterprise                                                          enterprise increased on a y-o-y basis in the period
  and joint venture
                                                                                 The financial assets impairment are listed under
  Credit impairment
                             1,082,468.11                      -             -   the item of “Credit impairment loss” for change of
  loss
                                                                                 the accounting policy in the period
  Income from assets
                            -4,436,536.97        3,476,687.51        -227.61%    Losses of the assets disposal in the period
  disposal
                                                                                 Relocation expenditure from subsidiary
  Non-operation
                             3,776,106.23           60,249.87       6,167.41%    Changhong Air-conditioner increased from a year
  expenditure
                                                                                 earlier
                                                                                 Income tax expenses increased on a y-o-y basis in
  Income tax expenses      36,397,055.33        25,015,797.92          45.50%
                                                                                 the period
  Gains/losses of                                                                Mainly due to the year-on-year increase in losses
  minority                 -11,984,976.39          196,132.62       -6,210.65%   of some non-wholly-owned subsidiaries of the
  shareholders                                                                   company.

    (iii) Changes of items of cash flow statement and cause analysis
                                                                                                                               In RMB

                                                Same period of
             Item         Current Period                               Changes                            Reasons
                                                   last year
                                                                                     The export rebates received in the period
Refunds of taxes            280,384,080.90        455,080,647.00          -38.39%
                                                                                     declined on a y-o-y basis
Other cash received
                                                                                     The reversal of the restricted money declined in
concerning operating        125,280,221.18        234,806,474.37          -46.65%
                                                                                     the period
activities
Taxes paid                  448,423,347.16        297,025,746.90          50.97%     VAT paying increased on a y-o-y basis
Cash paid for
purchasing fixed
                                                                                     Fixed assets purchased in the period declined on
assets, intangible          266,302,834.52        436,847,276.96          -39.04%
                                                                                     a y-o-y basis
assets and other
long-term assets
Cash paid for                                                                        The entrusted financial principal paid in the
                          1,981,000,000.00       3,020,000,001.00         -34.40%
investment                                                                           period declined on a y-o-y basis
Other cash paid
                                                                                     The loss of forward exchange contract delivery
concerning investment        76,709,995.61            255,500.00      29,923.48%
                                                                                     increased from a year earlier
activities
Cash received for                                                                    Investment from minority shares are received at
                                            -      24,865,000.00        -100.00%
absorbing investment                                                                 same period last year while no such amount



                                                                                                                                       8
                               CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


                                                                             occurred in the period
Cash received by                                                             Borrowings received in the period declined on a
                         1,308,256,908.10    2,021,566,261.86      -35.28%
borrowing                                                                    y-o-y basis
Other cash paid
                                                                             The restriction for utilization of the financing
concerning financing       32,764,857.16         2,050,458.19    1,497.93%
                                                                             guarantee increased on a y-o-y basis
activities
Influence on cash and
cash equivalents due                                                         Changes in foreign currency exchange rate in the
                           12,976,331.25         3,791,101.79     242.28%
to fluctuation in                                                            period
exchange rate


  II. Analysis and explanation of significant events and their influence and solutions

  √ Applicable □Not applicable
  (i) Particular about the process of the fund raised and investment of fund raised
  In 2016, the Company carried out private placement of A-share with 1,569,999,998.84 Yuan raise in total. Net
  amount raise as 1,540,732,722.76 Yuan after vary issuance costs (tax included) 29,267,276.08 Yuan deducted.

  As approved at the 16th session of the 9th BOD, the 8th session of 9th supervisory committee and the 3rd
  extraordinary meeting of the shareholder general meeting for 2018, being agreed by independent directors as well
  as the no objection verification opinion required from sponsor institution, the Company was approved to invest in
  such break-even financing products that are highly safe, in good liquidity and with a term of not more than one
  year for a single product with the available raised proceeds under the maximum limit of 940 million Yuan. This
  authorization shall be effective for a year since being approved at the general meeting of the Company.


  The resolutions of the 20th session of 9th Board of Directors, the 11th session of 9th Supervisory Committee, and the
  2018 Annual General Meeting of Shareholders passed and agreed the company to postpone the date of reaching
  the expected usable status of the “Intelligent Manufacturing Construction Project” and the "Intelligent R&D
  Capacity Building and Smart Appliance Technology New Product Development Project" in the 2016 non-public
  offering to raise funds for investment projects to the end of December 2021.


  The resolutions of the 24th session of 9th Board of Directors, the 13th session of the 9th Supervisory Committee,and
  the 2nd Extraordinary General Meeting of 2019 passed and agreed the company to invest 120 million Yuan of the
  unused raised funds of the sub-project “intelligent production line construction project for newly increasing
  600,000 medium- and large-volume environmental protection and energy-saving freezer per year” of the
  “Intelligent Manufacturing Construction Project”, which was the 2016 non-public offering to raise funds for
  investment projects, into the “production base project (Phase II) for annual production capacity of 2 million
  washing machines”, and agreed the company to terminate the implementation of the “Smart Life Project” and use
  the project's remaining raised funds and the interest and other proceeds from wealth management to permanently
  replenish the working capital. Up to now, the Company are strictly comply with the resolution of the shareholder
  general meeting and relevant regulations in using the fund raised.


  Ended as 30 September 2019, actually fund of raised used accumulative amounted as 1,107,781,648.76 Yuan in
  total, balance of the account for fund raised counted as 544,831,331.56 Yuan (including interest income

                                                                                                                                9
                            CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


accumulative amounted as 7,679,296.60 Yuan and income from financial product at expiration 73,238,685.81
Yuan, and the bank financial products of 517,000,000.00 Yuan purchased by the idle fund of raised)


Up to 30th September 2019, the Company accumulative used the fund raised in specific account amounted as
1,107,781,648.76 Yuan, the use of purpose including:


1. The intelligent construction (Hefei) has 133,425,464.48 Yuan in used;


2. The production base project (Phase II) for annual production capacity of 2 million washing machines have
1,761,561.00 Yuan paid actually with the self-owned funds, but not transfer out from the specific account of fund
raised, thus the fund raised for the project in specific fund raised account amounted as 0 Yuan.


3. Intelligent R & D capacity building and intelligent home appliances technology development project invested
352,661,186.36 Yuan accumulated;


4. The intelligent life project have 350,814,934.15 Yuan fund raised used in total (including the permanent
replenishment of working capital) (financial income 27,146,472.44 Yuan and interest income 3,668,461.71 Yuan
included), at the same time, on 26 July 2019 and 19 August, the rest fund raised and interest income of
305,813,334.15 Yuan in account for “ intelligent life project” have been withdrawal for supplementing the
working capital permanently. On 11 October 2019, the rest interest income of 29,712.17 Yuan in specific account
of the project have withdrawal by the Company and the account has been closed. Furthermore, the project’s
carrier for implementation - Changmei Technology Co., Ltd. has in the progress of liquidation.


5. Supplementation of the working capital amounted as 270,880,063.77 Yuan (including saving interest
147,341.01 Yuan)

(ii) Progress of shares buy-back

□ Applicable √ Not applicable
(iii) Implementation progress of the reduction of repurchases shares by centralized bidding

□ Applicable √ Not applicable
(IV) progress of the annual performance incentive fund
The “Implementation Plan of Annual Performance Incentive Fund” has been deliberated and approved by the
16th session of 7th Board and 2nd extraordinary general meeting 2012 on 9 August 2012 and 28 August 2012.
Details of the aforesaid event can be found in the announcement (No.: 2012-028 and No.: 2012-035) released on
appointed media Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) dated 10 August 2012 and 29 August 2012.
1. Implementation about 2012, 2013, 2014 and 2016 performance incentive fund provision and distribution
plan



See details in "Implementation of the company's annual incentive fund" in "XI Implementation of the company's


                                                                                                              10
                            CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


stock incentive plan, employee stock ownership plan, or other employee incentive measures" in "Section V
Significant Events" of the company's "2018 Annual Report" disclosed on March 29, 2019.



Up to the end of this reporting period, the company's stock purchased by some annual performance incentive
objects (non-directors, supervisors and senior management) for year of 2012, 2013 and 2014 with their granted
incentive funds and self-own funds have been fully open for trading; the company's stock purchased by some
2016 annual performance incentive objects (non-directors, supervisors and senior management) with their granted
2016 incentive funds and self-own funds has been desterilized by 50% for term of holding for two years; see
below for the overall reducing holding-shares of some above-mentioned incentive objects. During the reporting
period, among the incentive objects, the incumbent director and deputy president Mr. Zhong Ming reducing
78,725 shares ( takes 0.0075% of the total shares of the Company) on 22 August 2019 via centralized bidding
system in Shenzhen Stock Exchange; other incumbent directors, supervisors and senior managements in incentive
objects are not reducing the shares for implementing the performance incentive plan of 2012, 2013, 2014 and
2016.
2. Share holding and reduction of the company’s performance incentive objects
As of September 30, 2019, all incentive objects held a total of 11,323,917 shares, accounting for 1.0841% of the
company’s general capital, of which 9,634,024 shares of A share, accounting for approximately 0.9223% of the
company’s general capital, 1,689,893 shares of B share, and accounting for about 0.1618% of the company’s
general capital. Some 2012, 2013, 2014 and 2016 annual performance incentive objects (not directors, supervisors
or senior management) have totally reduced share of 5,189,898 shares from September 2014 to the end of the this
reporting period, accounting for approximately 0.4968% of the company’s general capital, and reduced holding of
352,563 shares from July to September 2019.



(V) Transaction with Sichuan Changhong Group Finance Co., Ltd.

The resolution of the 34th session of 8th board of directors on August 9, 2017 and the second extraordinary general
meeting of 2017 on September 12, 2017 approved and agreed the company to continue carry out the financial
service cooperation with Sichuan Changhong Group Finance Co., Ltd. (hereinafter referred to as “Changhong
Finance Company”) and sign a triennial Financial Service Agreement, It is agreed that the maximum deposit
balance (including accrued interest and handling fees) and the highest principal and interest of outstanding loan
the Company in any finance company within the three-year validity period from the effective date of the new
agreement shall be adjusted to not exceed RMB 3.8 billion per day. In accordance with the agreement, Changhong
Finance Company shall provide a series of financial services such as deposit and loan in its business scope
according to the requirements of the Company and its subsidiaries.


On 10 December 2018 and 27 December 2018, deliberated and approved by the 17th session of 9th BOD and 4th
Extraordinary shareholders general meeting of 2018, the related transactions of financial service with Changhong
Finance between the Company and controlling subsidiary for year of 2019 including: the maximum balance in
Changhong Finance Company (including accrual interest and handling charges) will not be over 3.8 billion Yuan
everyday, the maximum outstanding loan principal and interest shall not exceed 3.8 billion Yuan; the line of credit
to the Company and subordinate subsidiary from Changhong Finance will not exceed 6 billion Yuan; the upper
limit of notes for business shall not exceed 3 billion Yuan and the upper limit of bill discount business shall not

                                                                                                                11
                                         CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


        exceed 3 billion Yuan. The related transaction with Changhong Finance Company from beginning of the year to
        end of the period including:


        Up to 30 September 2019, the Company and its subsidiaries have opened financial business as savings, note
        drawing and notes discounted with Changhong Finance Company. The Company and its subordinate company
        owns 2,580,645,538.16 Yuan savings in Changhong Finance Company, takes 23.16% of the deposit taking balance
        in Changhong Finance Company without 30% occupied, balance of notes drawing at period-end was
        1,129,785,016.07 Yuan and balance of notes discounted outstanding as 749,980,883.61 Yuan. More details are:


                                                                                                                                  CNY/ RMB
                                                                                                                                   Interest and
             Item            Opening balance          Current increased        Current decreased           Ending balance        handling charge
                                                                                                                                  received/paid

   I.      Savings     in
   Changhong Group             3,119,117,207.91        25,096,857,470.56          25,635,329,140.31         2,580,645,538.16        77,721,913.52
   Finance Company

   II.       Borrowings
   from Changhong
   Group        Finance
   Company

   1.Short-term loans

   2.Long-term loans

   III.             Other
   financial business

   1.notes drawing               819,806,514.07          1,620,131,958.33             1,310,153,456.33      1,129,785,016.07            647,336.38

   2.notes discounted            772,233,395.98          1,097,863,492.58             1,120,116,004.95       749,980,883.61         14,376,818.54

          (VI) Other significant events
                                                                                           Date for         Information index for temporary report
                                    Overview
                                                                                          disclosure                       disclosure

Mr. Wu Dinggang, the former president of the company, applied for
resignation as the president of the company due to changes in his personal
                                                                                                         Juchao Website: http://www.cninfo.com.cn
work, but he continues to serve as the vice-president of the company, a                   2019-1-12
                                                                                                         (No.: 2019-001)
member of the strategy committee of the board of directors, and a member of
the remuneration and appraisal committee.

After the resolution of the board of directors of the company, it’s agreed to
authorize Mr. Kou Huameng, the director and vice president of the company,
                                                                                                         Juchao Website: http://www.cninfo.com.cn
to act on the president’s behalf, the term is from the effective date of the board       2019-1-12
                                                                                                         (No.: 2019-002)
resolution, i.e. January 11, 2019, to the date on which the board of directors
engages a new president.


                                                                                                                                             12
                                        CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)



On January 14, 2019, the company received a Notification Letter of Caitong
Fund Management Co., Ltd. About the Progress of Shareholding Reduction
Plan of Changhong Meiling Co., Ltd. from Caitong Fund Management Co.,
Ltd. (hereinafter referred to as “Caitong Fund”) that held more than 5% of the                    Juchao Website: http://www.cninfo.com.cn
                                                                                        2019-1-15
company’s shares, Caitong Fund reduced its holdings of the company’s shares                       (No.: 2019-003)
of 12,160,298 shares in total by centralized bidding transactions or block
trading from October 18, 2018 to January 13, 2019, accounting for 1.1641%
of the company's total share capital.

The resolutions of Board of Directors, the Board of Supervisors and General
Meeting of passed and agreed the company to provide credit guarantees of                            Juchao Website: http://www.cninfo.com.cn
                                                                                        2019-1-30
2.98 billion yuan in total for its wholly-owned and controlled subsidiaries in                      (No.: 2019-004, No.: 2019-005, No.:
                                                                                        2019-2-14
2019, the guarantee period is one year for the newly increased guarantee                            2019-006, No.: 2019-008, No.: 2019-010 and
                                                                                        2019-2-23
amount for the current year and the amount of renewal insurance during the                          No.: 2019-012)
year.

The resolution of the Board of Directors of the Company passed and agreed
                                                                                                    Juchao Website: http://www.cninfo.com.cn
the company to apply for a special credit line of up to 300 million yuan in the         2019-1-30
                                                                                                    (No.: 2019-004, No.: 2019-007)
bank notes pool to Hefei Branch of China Everbright Bank Co., Ltd.

On February 13, 2019, the company received the “Short Form Report on
Changes in Equity of Changhong Meiling Co., Ltd.” from Caitong Fund,
Caitong Fund and its subordinate assets management plan reduced its holdings
of the shares of Changhong Meiling of 2,600,729 shares in total by centralized
                                                                                                    Juchao Website: http://www.cninfo.com.cn
bidding transactions from January 14, 2019 to February 12, 2019, totally                2019-2-14
                                                                                                    (No.: 2019-011)
8,115,894.30 Yuan reduced, accounting for 0.25% of the company's total share
capital. After this equity change, Caitong Fund(presenting the assets
management plan on behalf) holds 52,229,844 shares of Changhong Meiling,
accounting for 4.999995% of Changhong Meiling's total share capital.

On February 25, 2019, the company received the Notice of Sichuan
Changhong     Electric    Co.,   Ltd.   and   its   Concerted        Action   Person
CHANGHONG          (HK)    TRADING       LIMITED,      Ltd.     to     Increase   the
Shareholding of Changhong Meiling Co., Ltd. and the Equity Changes
(hereinafter referred to as “Notice”). Sichuan Changhong and its concerted
action person CHANGHONG (HK) TRADING LIMITED (hereinafter
referred to as “HK Changhong” or “concerted action person”) bought                  2019-2-26   Juchao Website: http://www.cninfo.com.cn
16,231,024 shares of Changhong Meiling (including 13,751,756 shares of                  2019-2-28   (No.: 2019-013)
Changhong Meiling A shares and 2,479,268 shares of Changhong Meiling B
shares) by bidding transaction method through the secondary market from
November 12, 2018 to February 25, 2019, accounting for 1.55% of
Changhong Meiling’s total share capital, consequently, the equity ratio of
Changhong Meiling held by Sichuan Changhong and concerted action person
accumulatively increased by 5% from September 2009 to February 2019.

In late March 2019, the Company received the "Notice of Civil Penalty"                              Juchao Website: http://www.cninfo.com.cn
                                                                                        2019-3-26
issued by U.S Department of Energy ("DOE", i.e. the US Department of                                (No.: 2019-014)


                                                                                                                                          13
                                         CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


Energy).

The resolutions of the Board of Directors, the Board of Supervisors, and the
Annual General Meeting of Shareholders passed and agreed the company to         2019-3-29、   Juchao Website: http://www.cninfo.com.cn
change the corresponding accounting policies according to the relevant           2019-4-27    (No.: 2019-015, No.: 2019-018, No.:
regulations and requirements of the Ministry of Finance so as to apply to the    2019-5-22    2019-031 and No.: 2019-035)
new regulations.

The resolutions of the Board of Directors and the Annual General Meeting of
Shareholders passed and agreed the company and its subsidiaries to carry out
forward foreign exchange fund trading business from July 1, 2019 to June 30,     2019-3-29    Juchao Website: http://www.cninfo.com.cn
2020, the balance of the business transaction does not exceed US$650 million     2019-4-27    (No.: 2019-015, No.: 2019-020, No.:
(mainly including US dollar, Australian dollar, Euro, and other foreign          2019-5-22    2019-031 and No.: 2019-035)
exchanges are all converted into US dollars), and the maximum
single-business delivery period is no more than one year.

In accordance with the resolutions of the Board and the Annual General
                                                                                 2019-3-29    Juchao Website: http://www.cninfo.com.cn
Meeting, it’s agreed to revise some of the provisions of the "Articles of
                                                                                 2019-4-27    (No.: 2019-015, No.: 2019-022, No.:
Association", "Rules of Procedure of the General Meeting of Shareholders",
                                                                                 2019-5-22    2019-031 and No.: 2019-035)
and “Rules of Procedure of the Board of Directors".

The resolution of the Board of Directors of the company passed and agreed the
company's subsidiaries, Zhongshan Changhong Electric Appliance Co., Ltd.,
Guangdong Changhong Technology Co., Ltd. and Hongyuan Geothermal Heat                         Juchao Website: http://www.cninfo.com.cn
                                                                                 2019-3-29
Pump Technology (Zhongshan) Co., Ltd. to donate a total of 130,000 yuan to                    (No.: 2019-015, No.: 2019-023)
Nantou Town People's Government of Zhongshan City to expand the Nantou
Town Central Primary School.
On April 15, 2019, the company received a Notification Letter of Caitong
Fund Management Co., Ltd. About the Progress of Shareholding Reduction
Plan of Changhong Meiling Co., Ltd. from Caitong Fund. Caitong Fund
reduced holding of 7,430,612 shares in The Company via collective bidding                     Juchao Website: http://www.cninfo.com.cn
                                                                                 2019-4-16
trading during the period from 13 Feb. 2019 to 13 April 2019, accounting for                  (No.: 2019-024)
0.7113% of the total share capital of the Company. After the reduction,
Caitong Fund still holds 44,799,232 shares of the company, accounting for
4.2887% of the company's total equity.

The resolutions of the Board of Directors passed and agreed the company to
implement the new financial instrument standards and change the relevant                      Juchao Website: http://www.cninfo.com.cn
                                                                                 2019-4-20
accounting policies in accordance with the relevant regulations and                           (No.: 2019-025, No.: 2019-028)
requirements of the Ministry of Finance.

The resolution of the Board of Directors of the company passed and agreed
Zhongke Meiling Cryogenics Co., Ltd. (hereinafter referred to as “Zhongke
                                                                                              Juchao Website: http://www.cninfo.com.cn
Meiling”), a holding subsidiary of the company, to invest 10 million yuan to    2019-4-20
                                                                                              (No.: 2019-025)
set up a wholly-owned subsidiary to engage in refrigeration engineering
equipment sales, design and other services.




                                                                                                                                    14
                                          CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


The resolution of the Board of Directors passed and agreed the company to
withdraw some of the investment under the “Soochow-China Merchants
Bank-Donghui 135 Directional Asset Management Plan” issued by Soochow
Securities Co., Ltd. in advance, which was subscribed by the company at an                      Juchao Website: http://www.cninfo.com.cn
                                                                                    2019-4-20
earlier stage, that is, withdraw the principal of the face value of 50 million                  (No.: 2019-025)
yuan and the one-year investment income corresponding to the asset
management plan of about 16 million yuan (after deducting management fees,
custody fees and value-added tax) for the daily operation of the company.

Mr. Li Wei, the former president of the company, resigned as the president,
director, chairman of the strategy committee of the board of directors and
member of the nomination committee of the board of directors of the company
                                                                                                Juchao Website: http://www.cninfo.com.cn
for work reasons. At the same time, the resolutions of the board of directors of    2019-4-27
                                                                                                (No.: 2019-029, No.: 2019-030)
the company passed and agreed to engage Mr. Wu Dinggang as the company’s
chairman of the ninth board of directors for a term of office consistent with the
term of the current board of directors.

The resolutions of the Board of Directors and the Annual General Meeting of
Shareholders of the company passed and agreed the by-election of Mr. Zhong                      Juchao Website: http://www.cninfo.com.cn
                                                                                    2019-4-27
Ming as a non-independent director of the Ninth Board of Directors of the                       (No.: 2019-030, No.: 2019-031 and No.:
                                                                                    2019-5-22
Company, and his term of office is the same as that of the Ninth Board of                       2019-035)
Directors.

Subordinate controlling subsidiary of the Company, have accumulated
                                                                                    2019-6-12   Juchao Website: http://www.cninfo.com.cn
received various kinds of government subsidies as 72,467,598.96 Yuan from 1
                                                                                    2019-8-13   (No.: 2019-036, No.: 2019-048)
Jan. 2019 to 13 August 2019.

The resolutions of the Board of Directors and the Annual General Meeting of
Shareholders passed and agreed the company to use the total share capital of
                                                                                    2019-3-29   Juchao Website: http://www.cninfo.com.cn
1,044,597,881 shares on December 31, 2018 as the base, and distribute a cash
                                                                                    2019-5-22   (No.: 2019-015, No.: 2019-035 and No.:
dividend of 0.6 yuan (including tax) per every 10 shares to all shareholders,
                                                                                    2019-6-18   2019-037)
who distributed cash dividends of 62,675,872.86 yuan (including tax) in total,
the above mentioned profit distribution plan has been completed.

On June 28, 2019, the company received the “Shareholding Reduction Plan”
from Mr. Zhong Ming, the company's director and vice president, Mr. Zhong
Ming planned to reduce his holdings of the Company’s shares of no more than
78,725 shares (not exceeding 0.0075% of the company's total share capital) by
centralized bidding transactions of the stock exchanges within six months after     2019-6-29   Juchao Website: http://www.cninfo.com.cn
15 trading days from the date of the announcement of the shareholding               2019-8-24   (No.: 2019-039, No.: 2019-055)
reduction plan due to his own capital arrangements. On 23 August 2019, the
Company received an Inform Letter of Share Reduction Plan Completion from
Mr. Zhong Ming. Up to 22 August 2019, Mr. Zhong Ming reduced 78,725
shares via centralized bidding system in Shenzhen Stock Exchange.

Being deliberated and approved by the Board, the bad debt of receivable
                                                                                                Juchao Website: http://www.cninfo.com.cn
12,604,521.25 Yuan that unable to collected by the Company and its                  2019-8-16
                                                                                                (No.: 2019-049, No.: 2019-052)
subsidiaries are being verified



                                                                                                                                   15
                                       CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


In order to further utilize the mature intelligent trading platform of Sichuan
Zhiyijia Network Technology Co., Ltd. (hereinafter referred to as Zhiyijia
Company), reducing the repeat investment for such platform construction, and
making use of the intelligent trading platform to giver full play to the
Company’s and controlling shareholder Sichuan Changhong’s collaborative
advantages in home appliance marketing, make it better to adapt to the market
competition and consumer behavior.Being approved by the resolution of the
                                                                                   2019-8-31
Board and shareholders general meeting, self-owned capital 29,087,040 Yuan                     Juchao Website: http://www.cninfo.com.cn
                                                                                   2019-9-6
of the Company (including: 20 million Yuan for registered capital and                          (No.:   2019-057,   No.:   2019-058,   No.:
                                                                                   2019-9-10
9,087,040 Yuan reckoned into capital reserves) is agreed to increase the capital               2019-059 and No.: 2019-067)
                                                                                   2019-9-27
for Zhiyijia Company. After capital increased, the shareholding ratio by the
Company and Sichuan Changhong for Zhiyijia Company comes to 50% each.
Meanwhile, it is agreed to increase the related trading amount predicted for
2019 to 803 million Yuan in total, occurred by the Company and its
controlling companies with Zhiyijia Company in aspect of good sales and
accepting services; it is estimated that the amount from related trading as good
sales and accepting services for year of 2020 was 8526 million Yuan in total.

To ensure the benefit and future development of the Meiling CANDY
Washing Machine Co., Ltd. (hereinafter referred to as Meiling CANDY) and
                                                                                               Juchao Website: http://www.cninfo.com.cn
its shareholders, through friendly consultation with the shareholder-Italy         2019-8-31
                                                                                               (No.: 2019-057)
Candy Hoover Group S.r.l., the subordinate controlling subsidiary Meiling
CANDY was agreed to be liquidated and canceled.

Being approved by the resolution of the Board and shareholders general
meeting, it is agreed to increased the capital to Changhong Finance Company
with 500 million Yuan each with self-owned capital together with Changhong
                                                                                               Juchao Website: http://www.cninfo.com.cn
Huayi Compressor Co., Ltd. (hereinafter referred to as Changhong Huayi).           2019-9-10
                                                                                               (No.:   2019-060,   No.:   2019-061,   No.:
Total capital comes to 1000 million Yuan. Based on the capital increase has        2019-9-27
                                                                                               2019-063 and No.: 2019-067)
involvement in the assessment results of shareholders’ equity, among the 500
million Yuan, 402,998,300 Yuan will reckon into registered capital while
97,001,700 Yuan reckon into capital reserves.

Being approved by resolution of the Board, controlling subsidiary Zhongke
Meiling agreed to implemented the initial offering of shares for year of 2019.
                                                                                               Juchao Website: http://www.cninfo.com.cn
The issuing target will subscribes in cash. It is agreed that the Company          2019-9-10
                                                                                               (No.: 2019-060, No.: 2019-062)
waives the rights of preferential subscription under the same conditions for the
issuance of shares.

Being approved by resolution of the Board, it is agreed to withdrawal parts of
the investment pre-subscribe under the target assets management plan No. 135
issued by Soochow Securities in advance, that is, principal 50 million Yuan                    Juchao Website: http://www.cninfo.com.cn
                                                                                   2019-9-10
and investment income approximately as 1,501,300 Yuan for holding the                          (No.: 2019-060)
principal (about more than 4 months) are collected in advance for routine
operation of the Company


      III. Commitments that the company, shareholders, actual controller, offeror, directors,

                                                                                                                                 16
                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


supervisors, senior management or other related parties have fulfilled during the reporting
period and have not yet fulfilled by the end of reporting period

□ Applicable √ Not applicable

There are no commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior
management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end
of reporting period.

IV. Forecast of operation performance of 2019

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss
probably or the warning of its material change compared with the corresponding period of the last year and
explanation on reason
□ Applicable √ Not applicable

V. Securities Investment

□ Applicable √ Not applicable

No security investment in Period.

VI. Trust financing

√ Applicable □Not applicable
                                                                                                   In 10 thousand Yuan

          Type                  Capital resources   Amount for entrust      Balance un-expired     Overdue amount

                            Idle raised funds                      90,400                 51,700                    0
Bank financing product
                            Own funds                              30,000                 30,000                    0

Financial products of the
                            Own funds                              20,000                 10,000                    0
broker

Total                                                            140,400                  91,700                    0

Details of the single major amount, or high-risk trust investment with low security, poor fluidity and
non-guaranteed:
√ Applicable □Not applicable




                                                                                                                    17
                                                                                                               CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


                                                                                                                                                                                                         In 10 thousand Yuan

                                                                                                                                                                                       Amount
                                                                                                                                                                                          of
                                                                                                                                                                                                  Wheth
                                                                                                                                                                                       reserve             Whether
                                                                                                                                                                                                    er
                                                                                                                                  Refere                                                 for                    has
                                                        Sour                                                           Criteria                                            Actual                 approv
   Trustee                                                                                                                         nce      Anticipated      Actual                    devaluat             entrust   Summary of the items
                Trustee                                 ce of Start                                                      for                                             collected                ed by
institution r               Type        Amount                        End date      Capital investment purpose                    annual    income (if     gains/losse                  ion of              finance and related query index
                 type                                   fund   date                                                    fixing                                            gains/losse              legal
    name                                                                                                                          rate of   applicable)    s in period                 withdra              plan in       (if applicable)
                                                         s                                                             reward                                            s in period              proced
                                                                                                                                  return                                                wing                    the
                                                                                                                                                                                                   ure
                                                                                                                                                                                         (if                future
                                                                                                                                                                                                  (Y/N)
                                                                                                                                                                                       applicab
                                                                                                                                                                                         le)
                                                                 Collected
                                                5,000            in        Investment for the second phase
                                                                                                                                                                                                                      Juchao Website
                                                                 advance
                           Assets                     Self-      Collected debt financing plan for year of                                                                                                            (www.cninfo.com.cn)
SOOCHOW                                         5,000 own 2018-4 in                                          Expiry                                                                                        Not
                          manage                                                                                                                                                                                      (No.: 2018-014, No.:
Securities      Broker                20,000                     advance 2018 that issued on CFAE under liquidati 8.28%                      3,345.61        1,756.64      1,756.64     N/A              Y applicab
                           ment                       fund -12                                                                                                                                                        2018-015 , No.:
Co., Ltd.                                                                                                     on                                                                                           le
                            plan                        s        2021-4-1 the name of Jinshiqi International                                                                                                          2019-025 and No.:
                                               10,000
                                                                     2                                                                                                                                                2019-060)
                                                                           Holding Co., Ltd.

Chengdu                                                 Idle                     Structured deposit products, the
                          Floating                                                                                     4.20%                                                                               Not        Juchao Website
Branch of                                               raise 2018-1 2019-6-1
                 Bank     income               48,000                            structured derivatives link up with annual 4.20%                 944.48       944.48        944.48     N/A              Y applicab (www.cninfo.com.cn)
China Bohai                                             fund 2-21        0
                            type                                                                                        yield                                                                              le         (No.: 2018-078)
Bank                                                     s                       3M Libor
                                                                                 Investment of the central bank bill
                          Break-e                       Idle
                                                                                 in bank market, treasury bond,        3.95%                                                                               Not        Juchao Website
                            ven &                       raise 2018-1 2019-1-3
Hefei Branch                                                                     corporate bonds, short-term
                 Bank      income              23,000                                                                  annual 3.95%                87.12        85.80         85.80     N/A              Y applicab (www.cninfo.com.cn)
of SPD Bank                                             fund 2-26        0
                          protectio                                              financing, medium-term bills,          yield                                                                              le         (No.: 2018-080)
                              n                          s
                                                                                 inter-bank borrowing, inter-bank
                                                                                                                                                                                                                            18
                                                                                                    CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)
                                                               deposits, bills or bill repurchase
                                                               etc.
                                                               The principal of funds raised by
                                                               this structured deposit is included
                                                               in     the        unified     operations
                                                               management of the funds of China
                                                               Guangfa Bank. The proportion of
                                                               investment        in    money    market
                                                               instruments (including but not
                                                               limited      to        bank     deposits,
                                                               inter-bank lending, buy-back, etc.)

                                         Idle                  ranges from 20% to 100%, and
                      Floating                                                                      3.90%                                                      Not     Juchao Website
Hefei Branch                             raise 2018-1 2019-1-2 the proportion of bonds (including
               Bank   income      10,000                                                            annual 3.90%            34.19    34.19   34.19   N/A     Y applicab (www.cninfo.com.cn)
of CGB                                   fund 2-27       8     but not limited to national debt,
                        type                                                                         yield                                                     le      (No.: 2018-080)
                                           s                   central bank bills, financial bonds,
                                                               short-term    financing       bonds,
                                                               enterprise bonds, medium-term
                                                               notes, corporate bonds) and other
                                                               financial assets ranges from 0% to
                                                               80%, and the income is invested
                                                               in the financial derivatives linking
                                                               to the exchange rate of the US
                                                               dollar against the Hong Kong
                                                               dollar.
                                                               The product is mainly composed

                                         Idle                  of risk-free assets investment and
Mianyang              Break-e
                                                                                                   3.75%                                                       Not     Juchao Website
Branch of               ven &            raise 2018-1 2019-1-2 option trading. The product
China          Bank    income     10,000                                                           annual 3.75%             31.85    31.25   31.25   N/A     Y applicab (www.cninfo.com.cn)
                                         fund 2-28       8     principal is invested in bank fixed
Everbright            protectio
                                                                                                    yield                                                      le      (No.: 2018-081)
Bank                      n                s                   time      deposits,     and     the
                                                               corresponding          application     of

                                                                                                                                                                              19
                                                                                                          CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)
                                                                      funds is based on the bank
                                                                      deposits, and the income is linked
                                                                      to     the    bank’s   comprehensive
                                                                      liability cost.

                                                                      Takes the money collect by

                                                                      structured        deposit   sales     as

                                                                      notional principal, and conducted
Anhui
                                            Idle                      investment income and financial
Branch of              Floating                                                                                  4.25%                                               Not     Juchao Website
                                            raise 2019-1
Bank of         Bank   income      22,400                  2019-5-2 derivatives with the benchmark annual 4.25%                  237.35   242.57   242.57   N/A    Y applicab (www.cninfo.com.cn)
                                            fund   -31
Communicat               type                                                                                    yield                                               le      (No.: 2019-009)
                                             s                        comparison value of 3Mshibor
ion Co., Ltd.
                                                                      linked with the counter party by

                                                                      using the cost of above mentioned

                                                                      principal
                                                                      Investment of the central bank bill
                                                                      in bank market, treasury bond,
                       Break-e              Idle
                                                                      corporate bonds, short-term                4.20%                                               Not     Juchao Website
                         ven &              raise 2019-1
Hefei Branch
                Bank    income     10,000                  2019-5-2 financing, medium-term bills,                annual 4.20%    105.86   110.83   110.83   N/A    Y applicab (www.cninfo.com.cn)
of SPD Bank                                 fund   -30
                       protectio                                    inter-bank borrowing, inter-bank             yield                                               le      (No.: 2019-009)
                           n                 s
                                                                      deposits, bills or bill repurchase
                                                                      etc.
                                                                      The principal of funds raised by

                                            Idle                      this structured deposit is included
                       Floating                                                                                  4.25%                                               Not     Juchao Website
                                            raise 2019-1              in      the       unified   operations
Hefei Branch
                Bank   income      10,000                  2019-5-2                                              annual 4.25%    107.12   107.12   107.12   N/A    Y applicab (www.cninfo.com.cn)
of CGB                                      fund   -30                management of the funds of China
                         type                                                                                    yield                                               le      (No.: 2019-009)
                                             s                        Guangfa Bank. The proportion of
                                                                      investment        in    money   market
                                                                                                                                                                                    20
                                                                                                    CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)
                                                                   instruments (including but not
                                                                   limited      to     bank      deposits,
                                                                   inter-bank lending, buy-back, etc.)
                                                                   ranges from 20% to 100%, and
                                                                   the proportion of bonds (including
                                                                   but not limited to national debt,
                                                                   central bank bills, financial bonds,
                                                                   short-term        financing     bonds,
                                                                   enterprise bonds, medium-term
                                                                   notes, corporate bonds) and other
                                                                   financial assets ranges from 0% to
                                                                   80%, and the income is invested
                                                                   in the financial derivatives linking
                                                                   to the exchange rate of the US
                                                                   dollar against the Hong Kong
                                                                   dollar.

Anhui
                                           Idle                    Structured deposit products, the
Branch of              Floating                                                                              4.10%                                             Not     Juchao Website
                                           raise 2019-5 2019-7-1
Bank of         Bank   income     17,000                           structured derivatives link up with annual 4.10%         114.58   114.58   114.58   N/A   Y applicab (www.cninfo.com.cn)
                                           fund   -17       6
Communicat              type                                                                                 yield                                             le      (No.: 2019-033)
                                            s                      3M Libor
ion Co., Ltd.

                                                                   The corporate financial structural


Chengdu                                                            deposit under the Industrial Bank,
                                           Idle
Branch of              Floating                                                                              3.80%                                             Not     Juchao Website
                                           raise 2019-5 2019-8-1 its annual fixed income rate is
Industrial      Bank   income     20,000                                                                     annual 3.80%   195.73   195.73   195.73   N/A   Y applicab (www.cninfo.com.cn)
                                           fund   -17       9      2.01%, the floating earnings are
Bank Co.,               type                                                                                 yield                                             le      (No.: 2019-034)
                                            s
Ltd.                                                               linked to the fluctuation of

                                                                   Shanghai Jingshangwu

                                                                                                                                                                              21
                                                                                                 CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)

                                                                  benchmark price of the Shanghai

                                                                  Gold Exchange

Chengdu                                   Idle                    Structured deposit products, the
                      Floating                                                                        3.55%                                                 Not     Juchao Website
Branch of                                 raise 2019-6 2019-7-2
               Bank   income     20,000                           structured derivatives link up with annual 3.55%       62.25    62.25   62.25   N/A     Y applicab (www.cninfo.com.cn)
China Bohai                               fund   -20       2
                       type                                                                            yield                                                le      (No.: 2019-038)
Bank                                       s                      3M Libor

Chengdu                                   Idle                    Structured deposit products, the
                      Floating                                                                        3.85%                                                 Not     Juchao Website
Branch of                                 raise 2019-6 2019-12-
               Bank   income     26,000                           structured derivatives link up with annual 3.85%      496.38        -       -   N/A     Y applicab (www.cninfo.com.cn)
China Bohai                               fund   -20       18
                       type                                                                            yield                                                le      (No.: 2019-038)
Bank                                       s                      3M Libor

Huining
Road Branch
of Hefei
                                          Idle                    Structured deposit products, the
Science &             Floating                                                                        3.80%                                                 Not     Juchao Website
                                          raise 2019-7 2019-9-1
Technology     Bank   income      5,000                           contract code for investing in gold annual 3.80%       32.27    32.27   32.27   N/A     Y applicab (www.cninfo.com.cn)
                                          fund   -17       7
Rural                  type                                                                            yield                                                le      (No.: 2019-046)
                                           s                      futures: au1912
Commercial
Bank Co.,
Ltd.

                                                                  Structured deposit products,

Hefei Branch                                                      mainly invested in inter-bank
of Shanghai                               Idle
                      Floating                                                                        3.80%                                                 Not     Juchao Website
Pudong                                    raise 2019-7 2019-9-2 central bills, treasury bonds,
               Bank   income      5,000                                                               annual 3.80%       35.39    34.83   34.83   N/A     Y applicab (www.cninfo.com.cn)
Developmen                                fund   -18       4      corporate bonds, short-term
                       type                                                                            yield                                                le      (No.: 2019-046)
t Bank Co.,                                s
Ltd.                                                              financing, medium-term bills,

                                                                  inter-bank lending, inter-bank

                                                                                                                                                                           22
                                                                                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)

                                                                  deposits, bonds or bill repurchase

                                                                  etc., and option products with

                                                                  linked interest rate.

Hefei Branch                              Idle                    Structured deposit products, all or
                      Floating                                                                           3.90%                                                Not     Juchao Website
of Hua Xia                                raise 2019-7 2019-9-1
               Bank   income      7,000                           part of the interest on deposits is    annual 3.90%      46.37    46.37   46.37   N/A     Y applicab (www.cninfo.com.cn)
Bank Co.,                                 fund    -19     9
                       type                                                                              yield                                                le      (No.: 2019-046)
Ltd.                                        s                     linked to the gold futures price

                                                                  Structured deposit products, the

                                                                  structural deposit refers to a

                                                                  business products that enables the
Chengdu
                                          Idle                    depositors to obtain higher returns
Branch of             Floating                                                                           3.80%                                                Not     Juchao Website
                                          raise 2019-8 2019-11-
Industrial     Bank   income      8,700                           on basis of assuming certain risks     annual 3.80%      85.14        -       -   N/A     Y applicab (www.cninfo.com.cn)
                                          fund    -23    25
Bank Co.,              type                                                                              yield                                                le      (No.: 2019-054)
                                            s                     by linking with fluctuations in
Ltd.
                                                                  interest rates, exchange rates,

                                                                  indices or with the credit situation

                                                                  of an entity.

Chengdu
Wuyang                                    Self-                   Structured deposit products,
                      Floating                                                                           3.90%                                                Not     Juchao Website
Dadao                                     own 2019-8 2019-11-
               Bank   income     30,000                           invest through structured interest     annual 3.90%     291.69        -       -   N/A     Y applicab (www.cninfo.com.cn)
Branch of                                 fund    -26    25
                       type                                                                              yield                                                le      (No.: 2019-056)
CITIC Bank                                  s                     rate swaps
Co., Ltd.

Chengdu        Bank   Floating   12,000 Idle 2019-9 2019-12- Structured deposit products, the 3.95% 3.95%                 118.75        -       -   N/A     Y Not     Juchao Website

                                                                                                                                                                             23
                                                                                                                         CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)
Branch of                    income                           raise     -23     23     structured derivatives link up with annual                                                                                     applicab (www.cninfo.com.cn)
China Bohai                   type                            fund                                                          yield                                                                                     le          (No.: 2019-065)
Bank                                                           s                       3M Libor

Chengdu                                                       Idle                     Structured deposit products, the
                          Floating                                                                                            3.95%                                                                                   Not         Juchao Website
Branch of                                                     raise 2019-9 2019-12-
                Bank         income                   5,000                            structured derivatives link up with annual 3.95%                      47.61             -             -   N/A                Y applicab (www.cninfo.com.cn)
China Bohai                                                   fund      -26     23
                              type                                                                                             yield                                                                                  le          (No.: 2019-066)
Bank                                                           s                       3M Libor

Total                                              309,100     --        --     --                      --                       --       --             6,419.74    3,798.91           --             --      --          --                   --


              Entrust financial expected to be unable to recover the principal or impairment might be occurred

              □ Applicable           √ Not applicable

              VII. Particulars about derivatives investment

              √ Applicable □Not applicable

                                                                                                                                                                                                                    In 10 thousand Yuan

                                                                                                                                                                                                             Ratio of
                              Rela                                                                                           Amount                                                                     investment
                                     Whether                                                                                              Amount sold Amount of reserve
                              ted                                                                        Investment         purchased                                                   Investment          amount at             Actual
                                      related                         Initial                                                                  during the     for devaluation of
               Operator relati                      Type                        Start date   End date        amount at      during the                                                  amount at      period-end in            gains/losses
                                      trade or                     investment                                                                  reporting      withdrawing (if
                             onsh                                                                       period-begin        reporting                                                   period-end    net assets of the          in period
                                        not                                                                                                     period           applicable)
                               ip                                                                                            period                                                                     Company at
                                                                                                                                                                                                            period-end

                                                 Forward
              Financial                          foreign
                              N/A       No                          200,656.30 2017-9-29 2020-5-26            149,739.86     168,156.14         194,857.95                         --    130,709.04                 25.49%         -7,671.00
              institutions                       exchange
                                                 contract

                                                                                                                                                                                                                                           24
                                                                                               CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)

Total                                          200,656.30         --       --         149,739.86     168,156.14      194,857.95                   --    130,709.04           25.49%       -7,671.00

Capital resource                             Self-owned capital

Lawsuits (if applicable)                     Not applicable

Disclosure date for approval from the
Board for investment of derivatives (if      2019-3-29
applicable)

Disclosure date for approval from board
of shareholders for investment of            2019-5-22
derivatives (if applicable)

                                             1. Market risk: the changes in domestic and foreign economic situation may create a major volatility in exchange rate, future exchange business under
                                             certain market risks. Forward exchange transaction business of the Company aims at lock-up the price in sale and purchase of foreign exchange, and
                                             lowers the impact on profit from exchange fluctuations. The Company will closely following the changes in exchange rate, based on the target rate fix
                                             by business, with the research and judgment in aspect of the trend in foreign exchange rate, determine the signature planning of agreement for forward
                                             exchange transaction combine with prediction on receipt and payment as well as the tolerance capacity of changing price arising from rate fluctuation;
                                             implement dynamic management on the business to guarantee a reasonable profit standards for the Company.
                                             2. Liquidity risk: all of the foreign exchange funds trading are depend on reasonably estimated of the import-export business in future, satisfy the
Venture analysis and explanation on          requirement of trading truth. In addition, forward exchange transaction operates in way of bank credit; there is no impact on the fund liquidity of the
control measures for derivatives holding Company.
in Period (including but not limited to      3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign exchange
market risk, liquidity risk, credit risks,   contracts with contract price, which leads the risk of income uncertainty. So the Company chose the five major state-owned banks, joint –stock Chinese
operational risk and legal risk etc.)        funded banks as Everbright and Industrial Bank, as well as the foreign funded banks as UOB, Overseas Chinese Bank and Bank of East Asia to conduct
                                             the trading of foreign exchange capital. These banks share a solid strength and management whose failure and the risk of loss may bring to the Company
                                             is very low.
                                             4. Operational risk: the money trading in forward exchange might causes relevant risks due to the incorrect operations by handling personnel, relevant
                                             management mechanism has formulated by the Company, well-defined the operation procedure and duty officer in favor of preventing risk and risk
                                             control.
                                             5. Legal risk: legal disputes may arise from the un-clear trading agreement signed between the Company and banks in aspect of money trading in
                                             forward exchange. The Company strengthens the review on relevant contracts in way of law, and chooses banks for cooperation with good credit status

                                                                                                                                                                                                25
                                                                                                  CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)
                                             in order to control the risk.

Particular about the changes of market       In accordance with the Article 7 “Recognition of Fair Value” of “The Accounting Standards for Enterprises No. 22—Recognition and Measurement of
price or product’s fair value of invested   Financial Instruments”, the Company determined and measure the fair value basically in line with the price provided or obtained from pricing services
derivatives in Period; as for analysis of    such as banks. As for the calculation of fair value for derivatives, it mainly refers to the un-matured contract of forward exchange facilities that signed
the fair value of derivatives, disclosed     with the banks in reporting period, and recognized as tradable financial assets or liabilities based on the difference of forward exchange facilities’
specific treatment methods and relevant      contract quotation at period-end and forward rate. In the reporting period, the gains/losses of forward foreign exchange contract amounting to
hypothesis and parameter setting             -7,671,000,000 Yuan

Explanation on major changes on specific
principle of accounting policy and
                                             Not applicable
accounting calculation for derivatives in
Period, by comparing with last period

                                             Upon inspection, the independent directors of the Company believes that: during the reporting period, the Company carried out its foreign exchange
                                             forward deals in strict compliance with the standardized operation guidelines for listed issuer on main board (2015 amended) issued by Shenzhen Stock
                                             Exchange, the Articles of Association, Authorization Management of the Company, Management System in relating to Foreign Exchange Forward Deals
                                             of Changhong Meiling Co., Ltd., and these deals were conducted within the authorization scope under general meeting and board meeting. The
Specific opinions from independent
                                             Company conducts no foreign exchange transactions on the purpose of getting profit only, all of the forward foreign exchange transactions are operates
directs on derivative investment and risk
                                             based on normal operating and production, which is relying on specific business operations with purpose of avoiding the preventing the risks in
controlling
                                             exchange rate. The forward foreign exchange transactions of the Company are beneficial to prevent the exchange risks exposed by import and export
                                             business and thus met its requirement for operation development. There was no speculative operation, no break of relevant rules and regulations and
                                             relevant business was conducted under corresponding decision-making procedures. Interests of the Company and entire shareholders, especially
                                             minority shareholders, were not prejudiced.




                                                                                                                                                                                                       26
                              CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)




VIII. Registration form for receiving research, communication and interview in the report
period

√ Applicable □Not applicable
        Time              Way             Type                    Basic situation index of investigation

                                                 http://www.cninfo.com.cn/new/disclosure/stock?orgId=gssz0000521&stoc
2019-2-26            Field research Institute
                                                 kCode=000521#

                                                 http://www.cninfo.com.cn/new/disclosure/stock?orgId=gssz0000521&stoc
2019-7-2             Field research Institute
                                                 kCode=000521#


IX. Guarantee outside against the regulation

□Applicable √Not applicable

The Company had no guarantee outside against the regulation in the reporting period.

X. Non-operational fund occupation from controlling shareholders and its related party

□ Applicable √ Not applicable
The Company had no non-operational fund occupation from controlling shareholders and its related party.




                                                                                                                    27
                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)




                                     Section IV. Financial Statement

I. Financial statement

1. Consolidate balance sheet

Prepared by Changhong Meiling Co., Ltd.
                                                                                                           In RMB

                        Item                              2019-9-30                      2018-12-31

Current assets:

     Monetary funds                                              4,075,740,120.45              4,596,077,557.40

     Settlement provisions

     Capital lent

     Tradable financial assets                                         18,609,751.92

     Financial assets measured by fair value
and with variation reckoned into current                                                              9,253,635.59
gains/losses

     Derivative financial assets

     Note receivable                                             2,024,194,132.60              2,387,830,887.74

     Account receivable                                          2,206,388,200.30              1,670,988,644.76

     Receivable financing

     Accounts paid in advance                                          55,225,984.20              86,180,459.26

     Insurance receivable

     Reinsurance receivables

     Contract reserve of reinsurance receivable

     Other account receivable                                         130,723,288.12              62,129,574.17

       Including: Interest receivable                                   7,207,229.14                  2,653,712.36

                    Dividend receivable

     Buying back the sale of financial assets

     Inventories                                                 1,724,779,445.29              2,174,436,573.67

     Contractual assets

     Assets held for sale

     Non-current asset due within one year

     Other current assets                                             993,583,134.61           1,184,686,956.96




                                                                                                                28
                                    CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


Total current assets                                             11,229,244,057.49             12,171,584,289.55

Non-current assets:

     Loans and payments on behalf

     Debt investment

     Finance asset available for sales                                                            45,000,000.00

     Other debt investment

     Held-to-maturity investment

     Long-term account receivable

     Long-term equity investment                                     67,054,112.07                61,869,440.55

     Investment in other equity instrument

     Other non-current financial assets                             45,000,000.00

     Investment real estate                                         97,231,072.87                 46,846,507.41

     Fixed assets                                                 2,030,130,808.74              1,733,957,012.14

     Construction in progress                                      343,617,526.44                464,558,352.60

     Productive biological asset

     Oil and gas asset

     Right-of-use assets

     Intangible assets                                             829,624,319.88                817,579,958.94

     Expense on Research and Development                            82,477,256.77                108,210,966.60

     Goodwill

     Long-term expenses to be apportioned

     Deferred income tax asset                                      93,366,126.12                112,203,656.75

     Other non-current asset

Total non-current asset                                           3,588,501,222.89              3,390,225,894.99

Total assets                                                     14,817,745,280.38             15,561,810,184.54

Current liabilities:

     Short-term loans                                             1,684,437,250.66              2,336,373,929.62

     Loan from central bank

     Capital borrowed

     Tradable financial liability                                   18,131,337.32

     Financial liability measured by fair value
and with variation reckoned into current                                                          55,586,666.70
gains/losses

     Derivative financial liability

     Note payable                                                 3,739,952,714.58              3,727,754,399.60


                                                                                                              29
                                     CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


     Account payable                                               2,297,568,758.71              2,282,174,981.38

     Accounts received in advance                                   240,271,809.66                354,551,354.80

     Contractual liability

     Selling financial asset of repurchase

     Absorbing deposit and inter-bank deposit

     Security trading of agency

     Security sales of agency

     Wage payable                                                   140,009,283.08                163,638,627.79

     Taxes payable                                                   65,314,443.39                109,753,432.17

     Other account payable                                          788,933,166.42                660,320,360.26

        Including: Interest payable                                  24,590,642.71                   7,519,756.26

                    Dividend payable                                  3,579,491.94                 17,317,286.45

     Commission charge and commission
payable

     Reinsurance payable

     Liability held for sale

     Non-current liabilities due within one year                        300,000.00                273,682,737.85

     Other current liabilities

Total current liabilities                                          8,974,918,763.82              9,963,836,490.17

Non-current liabilities:

     Insurance contract reserve

     Long-term loans                                                301,280,000.00                   1,920,000.00

     Bonds payable

        Including: Preferred stock

                    Perpetual capital securities

     Lease liability

     Long-term account payable                                        5,362,034.17                   5,017,208.00

     Long-term wages payable                                         14,353,019.26                 19,073,101.29

     Accrual liability                                              209,105,962.59                273,063,677.21

     Deferred income                                                178,674,326.23                160,250,963.60

     Deferred income tax liabilities                                  5,996,351.53                   3,098,699.11

     Other non-current liabilities

Total non-current liabilities                                       714,771,693.78                462,423,649.21

Total liabilities                                                  9,689,690,457.60             10,426,260,139.38




                                                                                                               30
                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


Owner’s equity:

     Share capital                                               1,044,597,881.00              1,044,597,881.00

     Other equity instrument

        Including: Preferred stock

                     Perpetual capital securities

     Capital public reserve                                      2,684,369,598.46              2,684,369,598.46

     Less: Inventory shares

     Other comprehensive income                                       -19,943,038.08             -18,143,569.26

     Reasonable reserve

     Surplus public reserve                                           399,650,743.38             400,673,993.50

     Provision of general risk

     Retained profit                                                  919,574,400.51             904,232,582.87

Total owner’ s equity attributable to parent
                                                                 5,028,249,585.27              5,015,730,486.57
company

     Minority interests                                                99,805,237.51             119,819,558.59

Total owner’ s equity                                           5,128,054,822.78              5,135,550,045.16

Total liabilities and owner’ s equity                          14,817,745,280.38             15,561,810,184.54


Legal Representative: Wu Dinggang


Person in charge of accounting works: Pang Haitao


Person in charge of accounting institute: Yang Jun


2. Balance Sheet of Parent Company

                                                                                                           In RMB

                         Item                             2019-9-30                      2018-12-31

Current assets:

     Monetary funds                                              2,533,546,477.86              2,897,004,041.87

     Tradable financial assets                                         18,609,751.92

     Financial assets measured by fair value
and with variation reckoned into current                                                              9,253,635.59
gains/losses

     Derivative financial assets

     Note receivable                                             1,859,464,078.52              2,433,243,946.64

     Account receivable                                          1,591,344,853.71              1,050,282,023.37



                                                                                                                31
                                      CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


       Receivable financing

       Accounts paid in advance                                       70,902,531.74                 58,710,427.38

       Other account receivable                                      120,202,355.79                182,744,033.52

         Including: Interest receivable                                4,375,967.13                  2,653,712.36

                      Dividend receivable

       Inventories                                                   508,513,344.71                911,130,106.30

       Contractual assets

       Assets held for sale

       Non-current assets maturing within one
year

       Other current assets                                          932,869,684.42               1,113,987,528.70

Total current assets                                                7,635,453,078.67              8,656,355,743.37

Non-current assets:

       Debt investment

       Available-for-sale financial assets                                                          45,000,000.00

       Other debt investment

       Held-to-maturity investments

       Long-term receivables

       Long-term equity investments                                 1,673,298,342.35              1,731,109,903.70

       Investment in other equity instrument

       Other non-current financial assets                             45,000,000.00

       Investment real estate                                          7,401,135.77                  7,618,550.16

       Fixed assets                                                 1,107,406,361.27              1,082,915,540.08

       Construction in progress                                      119,090,090.55                125,064,106.10

       Productive biological assets

       Oil and natural gas assets

       Right-of-use assets

       Intangible assets                                             490,249,642.28                462,425,105.64

       Research and development costs                                 50,073,095.15                 57,383,653.72

       Goodwill

       Long-term deferred expenses

       Deferred income tax assets                                     69,879,472.55                 78,357,299.17

       Other non-current assets

Total non-current assets                                            3,562,398,139.92              3,589,874,158.57




                                                                                                                32
                                     CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


Total assets                                                      11,197,851,218.59             12,246,229,901.94

Current liabilities:

     Short-term borrowings                                         1,490,939,946.14              1,911,719,726.13

     Tradable financial liability                                    15,587,041.20

     Financial liability measured by fair value
and with variation reckoned into current                                                           19,893,875.00
gains/losses

     Derivative financial liability

     Notes payable                                                 1,914,046,194.51              2,001,442,110.63

     Account payable                                               1,463,334,535.04              2,011,821,519.82

     Accounts received in advance                                   136,130,911.42                105,815,140.88

     Contractual liability

     Wage payable                                                    10,403,330.27                 31,271,182.48

     Taxes payable                                                   15,279,477.06                 21,992,129.58

     Other accounts payable                                         405,280,969.94                427,293,961.56

        Including: Interest payable                                  21,406,060.48                   5,801,215.14

                       Dividend payable                                3,579,491.94                17,317,286.45

     Liability held for sale

     Non-current liabilities due within one year                        300,000.00                258,588,504.48

     Other current liabilities

Total current liabilities                                          5,451,302,405.58              6,789,838,150.56

Non-current liabilities:

     Long-term loans                                                301,280,000.00                   1,920,000.00

     Bonds payable

        Including: preferred stock

                       Perpetual capital securities

     Lease liability

     Long-term account payable

     Long term employee compensation
                                                                     14,353,019.26                 19,073,101.29
payable

     Accrued liabilities                                            201,749,137.83                266,641,323.73

     Deferred income                                                 65,485,095.39                  53,118,676.50

     Deferred income tax liabilities

     Other non-current liabilities

Total non-current liabilities                                       582,867,252.48                340,753,101.52


                                                                                                               33
                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


Total liabilities                                                6,034,169,658.06              7,130,591,252.08

Owners’ equity:

     Share capital                                               1,044,597,881.00              1,044,597,881.00

     Other equity instrument

         Including: preferred stock

                     Perpetual capital securities

     Capital public reserve                                      2,753,017,007.10              2,753,017,007.10

     Less: Inventory shares

     Other comprehensive income

     Special reserve

     Surplus reserve                                               399,432,577.70                400,455,827.82

     Retained profit                                               966,634,094.73                917,567,933.94

Total owner’s equity                                            5,163,681,560.53              5,115,638,649.86

Total liabilities and owner’s equity                           11,197,851,218.59             12,246,229,901.94


Legal Representative: Wu Dinggang


Person in charge of accounting works: Pang Haitao


Person in charge of accounting institute: Yang Jun


3. Consolidated Profit Statement (the period)

                                                                                                        In RMB

                            Item                             Current Period               Last Period

I. Total operating income                                            3,907,875,881.65          3,977,110,177.70

     Including: Operating income                                     3,907,875,881.65          3,977,110,177.70

              Interest income

              Insurance gained

              Commission charge and commission
income

II. Total operating cost                                             3,877,092,843.63          3,959,824,308.46

     Including: Operating cost                                       3,120,899,900.24          3,205,017,999.93

              Interest expense

              Commission charge and commission
expense

     Cash surrender value


                                                                                                             34
                                      CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


         Net amount of expense of compensation

         Net amount of withdrawal of insurance contract
reserve

         Bonus expense of guarantee slip

                Reinsurance expense

                Tax and extras                                           37,337,949.44              37,835,191.90

                Sales expense                                           596,324,632.05             597,903,240.88

                Administrative expense                                   75,991,835.54              79,376,133.44

                R&D expense                                              74,045,366.13              59,438,945.43

                Financial expense                                       -27,506,839.77             -19,747,203.12

                     Including: Interest expenses                        15,687,265.39               9,955,079.26

                                Interest income                          38,289,853.37              24,694,760.73

         Add: other income                                               44,877,387.39              19,485,556.40

              Investment income (Loss is listed with “-”)             -49,991,079.10               5,976,620.29

              Including: Investment income on affiliated
                                                                         10,073,856.02               3,618,239.73
company and joint venture

                     The termination of income recognition
for financial assets measured by amortized cost(Loss is
listed with “-”)

              Exchange income (Loss is listed with “-”)

              Net exposure hedging income (Loss is listed
with “-”)

              Income from change of fair value (Loss is
                                                                         39,820,680.29              -7,042,861.74
listed with “-”)

              Loss of credit impairment (Loss is listed with
                                                                         -8,463,027.84
“-”)
              Losses of devaluation of asset (Loss is listed
                                                                        -14,086,299.07              -9,548,787.87
with “-”)

              Income from assets disposal (Loss is listed
                                                                         -3,498,765.23                192,920.94
with “-”)

III. Operating profit (Loss is listed with “-”)                        39,441,934.46              26,349,317.26

         Add: Non-operating income                                        3,218,452.87               1,361,065.01

         Less: Non-operating expense                                      1,413,579.86                  19,458.62

IV. Total profit (Loss is listed with “-”)                             41,246,807.47              27,690,923.65

         Less: Income tax expense                                        18,695,794.99              14,864,849.63

V. Net profit (Net loss is listed with “-”)                            22,551,012.48              12,826,074.02

   (i) Classify by business continuity


                                                                                                               35
                                      CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


       1.continuous operating net profit (net loss listed
                                                                         22,551,012.48              12,826,074.02
with ‘-”)

       2.termination of net profit (net loss listed with ‘-”)

   (ii) Classify by ownership

       1.Net profit attributable to owner’s of parent
                                                                         26,417,996.84              14,954,274.39
company

       2.Minority shareholders’ gains and losses                        -3,866,984.36              -2,128,200.37

VI. Net after-tax of other comprehensive income                           3,855,002.26               2,472,400.15

   Net after-tax of other comprehensive income
                                                                          2,611,878.24               1,782,853.09
attributable to owners of parent company

       (I) Other comprehensive income items which will
not be reclassified subsequently to profit of loss

               1.Changes of the defined benefit plans that
re-measured

               2.Other comprehensive income under
equity method that cannot be transfer to gain/loss

               3.Change of fair value of investment in
other equity instrument

               4.Fair value change of enterprise's credit
risk

               5. Other

        (ii) Other comprehensive income items which
                                                                          2,611,878.24               1,782,853.09
will be reclassified subsequently to profit or loss

               1.Other comprehensive income under
equity method that can transfer to gain/loss

               2.Change of fair value of other debt
investment

               3.gain/loss of fair value changes for
available-for-sale financial assets

               4.Amount of financial assets re-classify to
other comprehensive income

               5.Gain/loss of held-to-maturity investments
that re-classify to available-for-sale financial asset

               6.Credit impairment provision for other
debt investment

               7.Cash flow hedging reserve

               8.Translation differences arising on
                                                                          2,611,878.24               1,782,853.09
translation of foreign currency financial statements


                                                                                                               36
                                    CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


            9.Other

  Net after-tax of other comprehensive income
                                                                                 1,243,124.02                           689,547.06
attributable to minority shareholders

VII. Total comprehensive income                                                26,406,014.74                       15,298,474.17

     Total comprehensive income attributable to owners
                                                                               29,029,875.08                       16,737,127.48
of parent Company

     Total comprehensive income attributable to
                                                                                -2,623,860.34                      -1,438,653.31
minority shareholders

VIII. Earnings per share:

     (i) Basic earnings per share                                                      0.0253                              0.0143

     (ii) Diluted earnings per share                                                   0.0253                              0.0143

As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before combination while 0
Yuan achieved last period

Legal Representative: Wu Dinggang


Person in charge of accounting works: Pang Haitao


Person in charge of accounting institute: Yang Jun


4. Profit Statement of Parent Company (the period)

                                                                                                                           In RMB

                            Item                                   Current Period                         Last Period

I. Operating income                                                         2,664,004,704.29                    2,490,700,722.60

     Less: Operating cost                                                   2,406,427,108.32                    2,148,535,254.62

          Taxes and surcharge                                                  21,743,329.48                       14,469,596.73

          Sales expenses                                                      138,981,640.75                      201,139,184.30

          Administration expenses                                              32,418,153.86                       36,055,056.31

          R&D expenses                                                         29,405,298.29                       23,407,166.72

          Financial expenses                                                    -6,393,797.98                      -3,565,651.74

               Including: interest expenses                                     11,934,462.19                      13,724,471.67

                        Interest income                                        28,622,977.37                       16,389,944.68

     Add: other income                                                         38,236,515.77                       13,689,025.64

          Investment income (Loss is listed with “-”)                         -3,964,727.76                      19,003,123.97

          Including: Investment income on affiliated
                                                                                 5,794,277.12                       1,686,779.58
Company and joint venture

               The termination of income recognition



                                                                                                                                37
                                       CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


for financial assets measured by amortized cost (Loss is
listed with “-”)

               Net exposure hedging income (Loss is listed
with “-”)

               Changing income of fair value (Loss is listed
                                                                           6,592,242.68             -11,287,554.36
with “-”)

               Loss of credit impairment (Loss is listed with
                                                                          -2,371,132.58
“-”)
               Losses of devaluation of asset (Loss is listed
                                                                          -3,585,011.06             -10,616,799.13
with “-”)

               Income on disposal of assets (Loss is listed
                                                                            132,203.39                   -3,617.48
with “-”)

II. Operating profit (Loss is listed with “-”)                          76,463,062.01              81,444,294.30

         Add: Non-operating income                                           23,930.00                 128,162.00

         Less: Non-operating expense                                        248,133.83

III. Total Profit (Loss is listed with “-”)                             76,238,858.18              81,572,456.30

         Less: Income tax                                                  7,419,865.03              10,250,540.26

IV. Net profit (Net loss is listed with “-”)                            68,818,993.15              71,321,916.04

         (i)continuous operating net profit (net loss listed
                                                                          68,818,993.15              71,321,916.04
         with ‘-”)

         (ii) termination of net profit (net loss listed with
‘-”)

V. Net after-tax of other comprehensive income

         (I) Other comprehensive income items which will
not be reclassified subsequently to profit of loss

                  1.Changes of the defined benefit plans that
re-measured

                  2.Other comprehensive income under
equity method that cannot be transfer to gain/loss

                  3.Change of fair value of investment in
other equity instrument

                  4.Fair value change of enterprise's credit
risk

                  5. Other

          (II) Other comprehensive income items which
will be reclassified subsequently to profit or loss

                  1.Other comprehensive income under
equity method that can transfer to gain/loss



                                                                                                                38
                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


             2.Change of fair value of other debt
investment

             3.gain/loss of fair value changes for
available-for-sale financial assets

             4.Amount of financial assets re-classify to
other comprehensive income

             5.Gain/loss of held-to-maturity investments
that re-classify to available-for-sale financial asset

             6.Credit impairment provision for other
debt investment

             7.Cash flow hedging reserve

             8.Translation differences arising on
translation of foreign currency financial statements

             9.Other

VI. Total comprehensive income                                          68,818,993.15             71,321,916.04

VII. Earnings per share:

      (i) Basic earnings per share                                            0.0659                    0.0683

     (ii) Diluted earnings per share                                          0.0659                    0.0683


Legal Representative: Wu Dinggang


Person in charge of accounting works: Pang Haitao


Person in charge of accounting institute: Yang Jun


5. Consolidated Profit Statement (form the year-begin to the period-end)

                                                                                                        In RMB

                            Item                             Current Period               Last Period

I. Total operating income                                           13,041,038,562.59         13,248,619,747.37

     Including: Operating income                                    13,041,038,562.59         13,248,619,747.37

             Interest income

             Insurance gained

             Commission charge and commission
income

II. Total operating cost                                            12,994,783,658.83         13,201,080,887.97

     Including: Operating cost                                      10,611,455,437.49         10,963,171,561.02

             Interest expense



                                                                                                             39
                                      CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


                Commission charge and commission
expense

         Cash surrender value

         Net amount of expense of compensation

         Net amount of withdrawal of insurance contract
reserve

         Bonus expense of guarantee slip

                Reinsurance expense

                Tax and extras                                          117,977,709.18             102,882,052.60

                Sales expense                                          1,840,716,388.92           1,787,644,342.20

                Administrative expense                                  240,384,878.24             228,370,924.33

                R&D expense                                             194,093,406.99             152,219,238.87

                Financial expense                                         -9,844,161.99             -33,207,231.05

                     Including: Interest expenses                        73,580,264.70              70,110,789.68

                                Interest income                          97,691,279.74              88,992,292.78

         Add: other income                                               80,188,595.99              68,046,614.02

              Investment income (Loss is listed with “-”)              -38,327,115.65             20,726,039.38

              Including: Investment income on affiliated
                                                                          1,251,855.70              -12,056,138.08
company and joint venture

                     The termination of income recognition
for financial assets measured by amortized cost(Loss is
listed with “-”)

              Exchange income (Loss is listed with “-”)

              Net exposure hedging income (Loss is listed
with “-”)

              Income from change of fair value (Loss is
                                                                         43,185,470.53              -25,833,772.85
listed with “-”)

              Loss of credit impairment (Loss is listed with
                                                                           1,082,468.11
“-”)
              Losses of devaluation of asset (Loss is listed
                                                                         -24,702,231.08             -28,486,908.52
with “-”)

              Income from assets disposal (Loss is listed
                                                                          -4,436,536.97              3,476,687.51
with “-”)

III. Operating profit (Loss is listed with “-”)                       103,245,554.69              85,467,518.94

         Add: Non-operating income                                        5,694,649.89               5,443,167.59

         Less: Non-operating expense                                      3,776,106.23                  60,249.87

IV. Total profit (Loss is listed with “-”)                            105,164,098.35              90,850,436.66



                                                                                                                40
                                      CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


       Less: Income tax expense                                          36,397,055.33              25,015,797.92

V. Net profit (Net loss is listed with “-”)                            68,767,043.02              65,834,638.74

   (i) Classify by business continuity

       1.continuous operating net profit (net loss listed
                                                                         68,767,043.02              65,834,638.74
with ‘-”)

       2.termination of net profit (net loss listed with ‘-”)

   (ii) Classify by ownership

       1.Net profit attributable to owner’s of parent
                                                                         80,752,019.41              65,638,506.12
company

       2.Minority shareholders’ gains and losses                        -11,984,976.39               196,132.62

VI. Net after-tax of other comprehensive income                           -3,102,378.92             -6,466,960.36

   Net after-tax of other comprehensive income
                                                                          -1,799,468.82             -5,210,496.62
attributable to owners of parent company

       (I) Other comprehensive income items which will
not be reclassified subsequently to profit of loss

               1.Changes of the defined benefit plans that
re-measured

               2.Other comprehensive income under
equity method that cannot be transfer to gain/loss

               3.Change of fair value of investment in
other equity instrument

               4.Fair value change of enterprise's credit
risk

               5. Other

        (ii) Other comprehensive income items which
                                                                          -1,799,468.82             -5,210,496.62
will be reclassified subsequently to profit or loss

               1.Other comprehensive income under
equity method that can transfer to gain/loss

               2.Change of fair value of other debt
investment

               3.gain/loss of fair value changes for
available-for-sale financial assets

               4.Amount of financial assets re-classify to
other comprehensive income

               5.Gain/loss of held-to-maturity investments
that re-classify to available-for-sale financial asset

               6.Credit impairment provision for other
debt investment


                                                                                                               41
                                    CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


            7.Cash flow hedging reserve

            8.Translation differences arising on
                                                                                -1,799,468.82                      -5,210,496.62
translation of foreign currency financial statements

            9.Other

  Net after-tax of other comprehensive income
                                                                                -1,302,910.10                      -1,256,463.74
attributable to minority shareholders

VII. Total comprehensive income                                                65,664,664.10                       59,367,678.38

     Total comprehensive income attributable to owners
                                                                               78,952,550.59                       60,428,009.50
of parent Company

     Total comprehensive income attributable to
                                                                               -13,287,886.49                      -1,060,331.12
minority shareholders

VIII. Earnings per share:

     (i) Basic earnings per share                                                      0.0773                             0.0628

     (ii) Diluted earnings per share                                                   0.0773                             0.0628

As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before combination while 0
Yuan achieved last period

Legal Representative: Wu Dinggang


Person in charge of accounting works: Pang Haitao


Person in charge of accounting institute: Yang Jun


6. Profit Statement of Parent Company (form the year-begin to the period-end)

                                                                                                                          In RMB

                            Item                                   Current Period                         Last Period

I. Operating income                                                         7,198,760,931.63                    6,883,945,824.65

     Less: Operating cost                                                   6,438,821,213.52                    6,102,437,941.57

          Taxes and surcharge                                                  59,372,381.91                       44,193,309.99

          Sales expenses                                                      477,587,775.78                      501,143,891.03

          Administration expenses                                             100,853,326.37                       94,252,573.07

          R&D expenses                                                         80,879,626.58                       69,052,600.75

          Financial expenses                                                     2,111,585.97                       9,606,238.12

               Including: interest expenses                                    54,418,469.14                       55,250,636.77

                        Interest income                                        68,936,401.63                       57,329,240.66

     Add: other income                                                         56,735,800.59                       49,742,843.47

          Investment income (Loss is listed with “-”)                        20,154,143.04                       42,953,713.52



                                                                                                                                42
                                        CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


               Including: Investment income on affiliated
                                                                            2,961,957.42               3,776,002.08
Company and joint venture

                       The termination of income recognition
for financial assets measured by amortized cost (Loss is
listed with “-”)

               Net exposure hedging income (Loss is listed
with “-”)

               Changing income of fair value (Loss is listed
                                                                           10,027,189.27             -14,687,912.73
with “-”)

               Loss of credit impairment (Loss is listed with
                                                                           10,417,545.43
“-”)
               Losses of devaluation of asset (Loss is listed
                                                                           -6,377,866.03             -14,834,202.44
with “-”)

               Income on disposal of assets (Loss is listed
                                                                             -659,108.67                -880,921.32
with “-”)

II. Operating profit (Loss is listed with “-”)                          129,432,725.13             125,552,790.62

         Add: Non-operating income                                           244,520.00                3,874,754.46

         Less: Non-operating expense                                         248,133.83

III. Total Profit (Loss is listed with “-”)                             129,429,111.30             129,427,545.08

         Less: Income tax                                                   8,477,826.62               7,816,660.55

IV. Net profit (Net loss is listed with “-”)                            120,951,284.68             121,610,884.53

         (i)continuous operating net profit (net loss listed
                                                                          120,951,284.68             121,610,884.53
         with ‘-”)

         (ii) termination of net profit (net loss listed with
‘-”)

V. Net after-tax of other comprehensive income

         (I) Other comprehensive income items which will
not be reclassified subsequently to profit of loss

                  1.Changes of the defined benefit plans that
re-measured

                  2.Other comprehensive income under
equity method that cannot be transfer to gain/loss

                  3.Change of fair value of investment in
other equity instrument

                  4.Fair value change of enterprise's credit
risk

                  5. Other

          (II) Other comprehensive income items which



                                                                                                                 43
                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


will be reclassified subsequently to profit or loss

             1.Other comprehensive income under
equity method that can transfer to gain/loss

             2.Change of fair value of other debt
investment

             3.gain/loss of fair value changes for
available-for-sale financial assets

             4.Amount of financial assets re-classify to
other comprehensive income

             5.Gain/loss of held-to-maturity investments
that re-classify to available-for-sale financial asset

             6.Credit impairment provision for other
debt investment

             7.Cash flow hedging reserve

             8.Translation differences arising on
translation of foreign currency financial statements

             9.Other

VI. Total comprehensive income                                         120,951,284.68            121,610,884.53

VII. Earnings per share:

      (i) Basic earnings per share                                            0.1158                    0.1164

     (ii) Diluted earnings per share                                          0.1158                    0.1164

Legal Representative: Wu Dinggang


Person in charge of accounting works: Pang Haitao


Person in charge of accounting institute: Yang Jun


7. Consolidated Cash Flow Statement (form the year-begin to the period-end)

                                                                                                        In RMB

                           Item                              Current Period               Last Period

I. Cash flows arising from operating activities:

     Cash received from selling commodities and
                                                                    12,688,809,148.13         12,294,447,275.35
providing labor services

     Net increase of customer deposit and inter-bank
deposit

      Net increase of loan from central bank

     Net increase of capital borrowed from other



                                                                                                             44
                                    CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


financial institution

     Cash received from original insurance contract fee

     Net cash received from reinsurance business

     Net increase of insured savings and investment

     Cash received from interest, commission charge
and commission

     Net increase of capital borrowed

     Net increase of returned business capital

     Net cash received by agents in sale and purchase
of securities

     Write-back of tax received                                       280,384,080.90             455,080,647.00

     Other cash received concerning operating activities              125,280,221.18             234,806,474.37

Subtotal of cash inflow arising from operating activities           13,094,473,450.21          12,984,334,396.72

     Cash paid for purchasing commodities and
                                                                    10,506,147,051.44          10,544,503,046.16
receiving labor service

     Net increase of customer loans and advances

     Net increase of deposits in central bank and
inter-bank

     Cash paid for original insurance contract
compensation

     Net increase of capital lent

     Cash paid for interest, commission charge and
commission

      Cash paid for bonus of guarantee slip

     Cash paid to/for staff and workers                              1,153,887,410.73           1,233,337,030.56

     Taxes paid                                                       448,423,347.16             297,025,746.90

     Other cash paid concerning operating activities                  784,789,548.98             668,241,202.55

Subtotal of cash outflow arising from operating
                                                                    12,893,247,358.31          12,743,107,026.17
activities

Net cash flows arising from operating activities                      201,226,091.90             241,227,370.55

II. Cash flows arising from investing activities:

     Cash received from recovering investment                        2,174,000,000.00           1,900,000,000.00

     Cash received from investment income                              37,989,139.50              39,313,892.16

     Net cash received from disposal of fixed,
                                                                       19,483,459.24              17,944,967.00
intangible and other long-term assets

     Net cash received from disposal of subsidiaries



                                                                                                              45
                                      CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


and other units

       Other cash received concerning investing activities               94,129,473.53              95,944,328.41

Subtotal of cash inflow from investing activities                      2,325,602,072.27           2,053,203,187.57

       Cash paid for purchasing fixed, intangible and
                                                                        266,302,834.52             436,847,276.96
other long-term assets

       Cash paid for investment                                        1,981,000,000.00           3,020,000,001.00

       Net increase of mortgaged loans

       Net cash received from subsidiaries and other units
obtained

       Other cash paid concerning investing activities                   76,709,995.61                 255,500.00

Subtotal of cash outflow from investing activities                     2,324,012,830.13           3,457,102,777.96

Net cash flows arising from investing activities                           1,589,242.14          -1,403,899,590.39

III. Cash flows arising from financing activities

       Cash received from absorbing investment                                                      24,865,000.00

        Including: Cash received from absorbing
                                                                                                    24,865,000.00
minority shareholders’ investment by subsidiaries

       Cash received from loans                                        1,308,256,908.10           2,021,566,261.86

       Other cash received concerning financing activities

Subtotal of cash inflow from financing activities                      1,308,256,908.10           2,046,431,261.86

       Cash paid for settling debts                                    1,925,202,449.42           2,133,854,035.14

       Cash paid for dividend and profit distributing or
                                                                        127,772,072.70             109,269,826.49
interest paying

       Including: Dividend and profit of minority
                                                                           2,274,030.00
shareholder paid by subsidiaries

       Other cash paid concerning financing activities                   32,764,857.16               2,050,458.19

Subtotal of cash outflow from financing activities                     2,085,739,379.28           2,245,174,319.82

Net cash flows arising from financing activities                        -777,482,471.18           -198,743,057.96

IV. Influence on cash and cash equivalents due to
                                                                         12,976,331.25               3,791,101.79
fluctuation in exchange rate

V. Net increase of cash and cash equivalents                            -561,690,805.89          -1,357,624,176.01

       Add: Balance of cash and cash equivalents at the
                                                                       4,484,643,187.93           5,089,765,770.39
period -begin

VI. Balance of cash and cash equivalents at the period
                                                                       3,922,952,382.04           3,732,141,594.38
-end

Legal Representative: Wu Dinggang


Person in charge of accounting works: Pang Haitao

                                                                                                                46
                                  CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


Person in charge of accounting institute: Yang Jun


8. Cash Flow Statement of Parent Company (form the year-begin to the period-end)

                                                                                                          In RMB

                           Item                             Current Period               Last Period

I. Cash flows arising from operating activities:

     Cash received from selling commodities and
                                                                    6,358,153,483.13          5,886,537,353.55
providing labor services

     Write-back of tax received                                       135,160,922.67            214,262,771.43

     Other cash received concerning operating activities               66,198,821.85             51,985,080.37

Subtotal of cash inflow arising from operating activities           6,559,513,227.65          6,152,785,205.35

     Cash paid for purchasing commodities and
                                                                    5,874,686,994.43          5,200,208,904.42
receiving labor service

     Cash paid to/for staff and workers                               327,130,629.38            382,116,598.39

     Taxes paid                                                       156,564,790.86             59,998,461.89

     Other cash paid concerning operating activities                  330,317,153.84            280,528,778.03

Subtotal of cash outflow arising from operating
                                                                    6,688,699,568.51          5,922,852,742.73
activities

Net cash flows arising from operating activities                     -129,186,340.86            229,932,462.62

II. Cash flows arising from investing activities:

     Cash received from recovering investment                       2,174,000,000.00          1,860,000,000.00

     Cash received from investment income                              42,579,139.50             41,935,522.31

     Net cash received from disposal of fixed,
                                                                        6,708,283.94                   220,903.00
intangible and other long-term assets

     Net cash received from disposal of subsidiaries
and other units

     Other cash received concerning investing activities              309,067,175.10             89,093,823.56

Subtotal of cash inflow from investing activities                   2,532,354,598.54          1,991,250,248.87

     Cash paid for purchasing fixed, intangible and
                                                                      139,125,420.63            144,003,295.22
other long-term assets

     Cash paid for investment                                       1,987,000,000.00          3,030,704,000.00

     Net cash received from subsidiaries and other units
obtained

     Other cash paid concerning investing activities                   75,426,953.88             30,000,000.00

Subtotal of cash outflow from investing activities                  2,201,552,374.51          3,204,707,295.22

Net cash flows arising from investing activities                      330,802,224.03          -1,213,457,046.35


                                                                                                               47
                                      CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


III. Cash flows arising from financing activities:

       Cash received from absorbing investment

       Cash received from loans                                              1,064,409,999.44                1,549,720,995.00

       Other cash received concerning financing activities                         28,609,663.72                7,594,599.50

Subtotal of cash inflow from financing activities                            1,093,019,663.16                1,557,315,594.50

       Cash paid for settling debts                                          1,451,985,025.00                1,468,595,600.00

       Cash paid for dividend and profit distributing or
                                                                                  114,912,675.86               99,520,906.42
interest paying

       Other cash paid concerning financing activities                            121,717,485.21              279,276,931.43

Subtotal of cash outflow from financing activities                           1,688,615,186.07                1,847,393,437.85

Net cash flows arising from financing activities                              -595,595,522.91                -290,077,843.35

IV. Influence on cash and cash equivalents due to
                                                                                    8,391,306.55                6,180,497.06
fluctuation in exchange rate

V. Net increase of cash and cash equivalents                                  -385,588,333.19               -1,267,421,930.02

       Add: Balance of cash and cash equivalents at the
                                                                             2,894,384,811.05                3,410,029,424.54
period -begin

VI. Balance of cash and cash equivalents at the period
                                                                             2,508,796,477.86                2,142,607,494.52
-end


II. Financial statement adjustment

1.Relevant items of the financial statement at beginning of the year when implementing the new financial
instrument standards, new revenue standards or new leasing standards since 2019

√ Applicable □ Not applicable

Consolidated Balance Sheet
                                                                                                                         In RMB

                         Item                                2018-12-31                 2019-01-01          Adjustment

Current assets:

       Monetary funds                                          4,596,077,557.40          4,596,077,557.40

       Settlement provisions

       Capital lent

       Tradable financial assets                                                             9,253,635.59       9,253,635.59

       Financial assets measured by fair value and
                                                                   9,253,635.59                                 -9,253,635.59
with variation reckoned into current gains/losses

       Derivative financial assets

       Note receivable                                         2,387,830,887.74          2,370,568,253.64      -17,262,634.10



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                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


     Account receivable                                 1,670,988,644.76    1,673,362,136.29      2,373,491.53

     Receivable financing

     Accounts paid in advance                              86,180,459.26      86,180,459.26

     Insurance receivable

     Reinsurance receivables

     Contract reserve of reinsurance receivable

     Other account receivable                              62,129,574.17      63,192,740.93       1,063,166.76

       Including: Interest receivable                       2,653,712.36        2,653,712.36

                    Dividend receivable

     Buying back the sale of financial assets

     Inventories                                        2,174,436,573.67    2,174,436,573.67

     Contractual assets

     Assets held for sale

     Non-current asset due within one year

     Other current assets                               1,184,686,956.96    1,184,686,956.96

Total current assets                                   12,171,584,289.55   12,157,758,313.74    -13,825,975.81

Non-current assets:

     Loans and payments on behalf

     Debt investment

     Finance asset available for sales                     45,000,000.00                        -45,000,000.00

     Other debt investment

     Held-to-maturity investment

     Long-term account receivable

     Long-term equity investment                           61,869,440.55      67,552,541.78       5,683,101.23

     Investment in other equity instrument

     Other non-current financial assets                                       45,000,000.00      45,000,000.00

     Investment real estate                                46,846,507.41      46,846,507.41

     Fixed assets                                       1,733,957,012.14    1,733,957,012.14

     Construction in progress                             464,558,352.60     464,558,352.60

     Productive biological asset

     Oil and gas asset

     Right-of-use assets

     Intangible assets                                    817,579,958.94     817,579,958.94

     Expense on Research and Development                  108,210,966.60     108,210,966.60



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                                    CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


     Goodwill

     Long-term expenses to be apportioned

     Deferred income tax asset                             112,203,656.75     112,203,656.75

     Other non-current asset

Total non-current asset                                  3,390,225,894.99    3,395,908,996.22      5,683,101.23

Total assets                                            15,561,810,184.54   15,553,667,309.96     -8,142,874.58

Current liabilities:

     Short-term loans                                    2,336,373,929.62    2,336,373,929.62

     Loan from central bank

     Capital borrowed

     Tradable financial liability                                              55,586,666.70      55,586,666.70

     Financial liability measured by fair value and
                                                            55,586,666.70                        -55,586,666.70
with variation reckoned into current gains/losses

     Derivative financial liability

     Note payable                                        3,727,754,399.60    3,727,754,399.60

     Account payable                                     2,282,174,981.38    2,282,174,981.38

     Accounts received in advance                          354,551,354.80     354,551,354.80

     Contractual liability

     Selling financial asset of repurchase

     Absorbing deposit and inter-bank deposit

     Security trading of agency

     Security sales of agency

     Wage payable                                          163,638,627.79     163,638,627.79

     Taxes payable                                         109,753,432.17     109,753,432.17

     Other account payable                                 660,320,360.26     660,320,360.26

        Including: Interest payable                          7,519,756.26        7,519,756.26

                       Dividend payable                     17,317,286.45      17,317,286.45

     Commission charge and commission payable

     Reinsurance payable

     Liability held for sale

     Non-current liabilities due within one year           273,682,737.85     273,682,737.85

     Other current liabilities

Total current liabilities                                9,963,836,490.17    9,963,836,490.17

Non-current liabilities:




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                                     CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


     Insurance contract reserve

     Long-term loans                                          1,920,000.00         1,920,000.00

     Bonds payable

        Including: Preferred stock

                     Perpetual capital securities

     Lease liability

     Long-term account payable                                5,017,208.00         5,017,208.00

     Long-term wages payable                                 19,073,101.29        19,073,101.29

     Accrual liability                                      273,063,677.21       273,063,677.21

     Deferred income                                        160,250,963.60       160,250,963.60

     Deferred income tax liabilities                          3,098,699.11          3,098,699.11

     Other non-current liabilities

Total non-current liabilities                               462,423,649.21       462,423,649.21

Total liabilities                                        10,426,260,139.38    10,426,260,139.38

Owner’s equity:

     Share capital                                        1,044,597,881.00     1,044,597,881.00

     Other equity instrument

        Including: Preferred stock

                     Perpetual capital securities

     Capital public reserve                               2,684,369,598.46     2,684,369,598.46

     Less: Inventory shares

     Other comprehensive income                             -18,143,569.26        -18,143,569.26

     Reasonable reserve

     Surplus public reserve                                 400,673,993.50       399,650,743.38            -1,023,250.12

     Provision of general risk

     Retained profit                                        904,232,582.87       901,498,253.96            -2,734,328.91

Total owner’ s equity attributable to parent
                                                          5,015,730,486.57      5,011,972,907.54           -3,757,579.03
company

     Minority interests                                     119,819,558.59       115,434,263.04            -4,385,295.55

Total owner’ s equity                                    5,135,550,045.16     5,127,407,170.58            -8,142,874.58

Total liabilities and owner’ s equity                   15,561,810,184.54    15,553,667,309.96            -8,142,874.58

Explanation:
     The Company implemented the new financial instrument standards since 1 Jan. 2019, the “Financial assets
measured by fair value and with its variation reckoned into current gains/losses” adjusted to “Tradable financial
assets”, the “Financial assets available for sale” adjusted to “Other non-current financial assets”, the “Financial


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                                   CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


liabilities measured by fair value and with its variation reckoned into current gains/losses” adjusted to “Tradable
financial liabilities”.
      Under the convergence provisions of the new financial instrument standards, the Company need not restate
prior comparability, there is no need to adjust the information presented in the comparative financial statements
that is inconsistent with the requirements of the new standards. The difference between original book value of a
financial instrument and the new book value at the date of implementation of these standards, will reckon into the
retained income for period-begin of 2019.
     The joint venture-Sichuan Zhiyijia Network Technology Co., Ltd implemented the new financial instrument
standards since 2019, and adjusted the owners equity at year-beginning, the Company synchronized adjustment
according to the shareholding ratio, and reckoned into the long-term equity investment of year-beginning for year
2019 and retained income for year-begin.


Balance Sheet of Parent Company
                                                                                                             In RMB

                            Item                        2018-12-31            2019-01-01            Adjustment

Current assets:

     Monetary funds                                       2,897,004,041.87     2,897,004,041.87

     Tradable financial assets                                                    9,253,635.59          9,253,635.59

     Financial assets measured by fair value and with
                                                             9,253,635.59                              -9,253,635.59
variation reckoned into current gains/losses

     Derivative financial assets

     Note receivable                                      2,433,243,946.64     2,419,743,946.64       -13,500,000.00

     Account receivable                                   1,050,282,023.37     1,047,769,123.31        -2,512,900.06

     Receivable financing

     Accounts paid in advance                               58,710,427.38        58,710,427.38

     Other account receivable                              182,744,033.52       182,841,331.20             97,297.68

       Including: Interest receivable                        2,653,712.36         2,653,712.36

                   Dividend receivable

     Inventories                                           911,130,106.30       911,130,106.30

     Contractual assets

     Assets held for sale

     Non-current assets maturing within one year

     Other current assets                                 1,113,987,528.70     1,113,987,528.70

Total current assets                                      8,656,355,743.37     8,640,440,140.99       -15,915,602.38

Non-current assets:

     Debt investment

     Available-for-sale financial assets                    45,000,000.00                             -45,000,000.00



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                                    CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


     Other debt investment

     Held-to-maturity investments

     Long-term receivables

     Long-term equity investments                          1,731,109,903.70    1,736,793,004.93    5,683,101.23

     Investment in other equity instrument

     Other non-current financial assets                                          45,000,000.00    45,000,000.00

     Investment real estate                                    7,618,550.16        7,618,550.16

     Fixed assets                                          1,082,915,540.08    1,082,915,540.08

     Construction in progress                               125,064,106.10      125,064,106.10

     Productive biological assets

     Oil and natural gas assets

     Right-of-use assets

     Intangible assets                                      462,425,105.64      462,425,105.64

     Research and development costs                          57,383,653.72       57,383,653.72

     Goodwill

     Long-term deferred expenses

     Deferred income tax assets                              78,357,299.17       78,357,299.17

     Other non-current assets

Total non-current assets                                   3,589,874,158.57    3,595,557,259.80    5,683,101.23

Total assets                                              12,246,229,901.94   12,235,997,400.79   -10,232,501.15

Current liabilities:

     Short-term borrowings                                 1,911,719,726.13    1,911,719,726.13

     Tradable financial liability                                                19,893,875.00    19,893,875.00

     Financial liability measured by fair value and
                                                             19,893,875.00                        -19,893,875.00
with variation reckoned into current gains/losses

     Derivative financial liability

     Notes payable                                         2,001,442,110.63    2,001,442,110.63

     Account payable                                       2,011,821,519.82    2,011,821,519.82

     Accounts received in advance                           105,815,140.88      105,815,140.88

     Contractual liability

     Wage payable                                            31,271,182.48       31,271,182.48

     Taxes payable                                           21,992,129.58       21,992,129.58

     Other accounts payable                                 427,293,961.56      427,293,961.56

        Including: Interest payable                            5,801,215.14        5,801,215.14




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                                     CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


                     Dividend payable                         17,317,286.45       17,317,286.45

     Liability held for sale

     Non-current liabilities due within one year             258,588,504.48      258,588,504.48

     Other current liabilities

Total current liabilities                                   6,789,838,150.56    6,789,838,150.56

Non-current liabilities:

     Long-term loans                                            1,920,000.00        1,920,000.00

     Bonds payable

        Including: preferred stock

                     Perpetual capital securities

     Lease liability

     Long-term account payable

     Long term employee compensation payable                  19,073,101.29       19,073,101.29

     Accrued liabilities                                     266,641,323.73      266,641,323.73

     Deferred income                                           53,118,676.50       53,118,676.50

     Deferred income tax liabilities

     Other non-current liabilities

Total non-current liabilities                                340,753,101.52      340,753,101.52

Total liabilities                                           7,130,591,252.08    7,130,591,252.08

Owners’ equity:

     Share capital                                          1,044,597,881.00    1,044,597,881.00

     Other equity instrument

        Including: preferred stock

                     Perpetual capital securities

     Capital public reserve                                 2,753,017,007.10    2,753,017,007.10

     Less: Inventory shares

     Other comprehensive income

     Special reserve

     Surplus reserve                                         400,455,827.82      399,432,577.70      -1,023,250.12

     Retained profit                                         917,567,933.94      908,358,682.91      -9,209,251.03

Total owner’s equity                                       5,115,638,649.86    5,105,406,148.71    -10,232,501.15

Total liabilities and owner’s equity                      12,246,229,901.94   12,235,997,400.79    -10,232,501.15

Explanation:
    The Company implemented the new financial instrument standards since 1 Jan. 2019, the “Financial assets
measured by fair value and with its variation reckoned into current gains/losses” adjusted to “Tradable financial

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                              CHANGHONG MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2019(Full Text)


assets”, the “Financial assets available for sale” adjusted to “Other non-current financial assets”, the “Financial
liabilities measured by fair value and with its variation reckoned into current gains/losses” adjusted to “Tradable
financial liabilities”.
      Under the convergence provisions of the new financial instrument standards, the Company need not restate
prior comparability, there is no need to adjust the information presented in the comparative financial statements
that is inconsistent with the requirements of the new standards. The difference between original book value of a
financial instrument and the new book value at the date of implementation of these standards, will reckon into the
retained income for period-begin of 2019.
     The joint venture-Sichuan Zhiyijia Network Technology Co., Ltd implemented the new financial instrument
standards since 2019, and adjusted the owners equity at year-beginning, the Company synchronized adjustment
according to the shareholding ratio, and reckoned into the long-term equity investment of year-beginning for year
2019 and retained income for year-begin.


2. Explanation on comparative data in the early stage of retroactive adjustment while implemented the new
financial instrument standards or new leasing standards since 2019
□ Applicable √ Not applicable

III. Audit report

Whether the 3rd quarterly report has been audited or not
□Yes √ No
The 3rd quarterly report of the Company has not been audited.


                                                                               Changhong Meiling Co., Ltd.
                                                                                Chairman: Wu Dinggang
                                                                                    18 October 2019




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