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公司公告

苏常柴B:2021年第三季度报告(英文版)2021-10-29  

                         Stock Code: 000570, 200570           Stock Name: Changchai, Changchai-B            Announcement No. 2021-067




                          CHANGCHAI COMPANY, LIMITED
                          THIRD QUARTERLY REPORT 2021

Changchai Company, Limited (hereinafter referred to as the “Company”) and all the members of
the Company’s Board of Directors hereby guarantee that the contents of this Report are true,
accurate and complete and free of any misrepresentations, misleading statements or material
omissions.

Important Notes:

1. The Board of Directors, the Supervisory Committee as well as the directors, supervisors and senior
management of the Company hereby guarantee that the contents of this Report are true, accurate and complete and
free of any misrepresentations, misleading statements or material omissions, and collectively and individually
accept legal responsibility for such contents.
2. The Company’s legal representative, General Manager, and head of the financial department (equivalent to
financial manager) hereby guarantee that the financial statements carried in this Report are true, accurate and
complete.
3. Indicate whether the financial statements in this Report have been audited by an independent auditor.
□Yes √ No
4. Matters with modified audit opinions given by the auditor
□ Applicable √ Not applicable

I Key Financial Information

(I) Key Accounting Data and Financial Indicators

Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
                                                                                                   YoY change
                                    Q3 2021            YoY change (%)          Q1-Q3 2021
                                                                                                      (%)
 Operating          revenue
                                   484,183,670.58                -17.15%     1,981,354,126.38              13.10%
 (RMB)
 Net profit attributable to
 the listed company’s             -23,478,352.18                    ——      105,710,713.42              171.37%
 shareholders (RMB)
 Net profit attributable to
 the listed company’s               -9,073,885.20                   ——        18,086,529.38             -37.25%
 shareholders        before
 exceptional items (RMB)
 Net      cash   generated
 from/used in operating                        ——                   ——       -316,185,740.11                 ——
 activities (RMB)
 Basic earnings per share
                                             -0.0333                  ——                 0.1734             149.86%
 (RMB/share)
 Diluted earnings         per
                                             -0.0333                  ——                 0.1734             149.86%
 share (RMB/share)
 Weighted average return
                                             -0.75%                 -1.29%                 4.54%                2.68%
 on equity (%)
                                  30 September 2021    31 December 2020                    Change (%)
 Total assets (RMB)                 4,862,324,921.69      3,952,954,464.45                                     23.00%
 Equity attributable to the
 listed company’s                  3,122,661,074.22      2,273,349,347.02                                     37.36%
 shareholders (RMB)
Total share capital up to the former trading date before the disclosure:
 Total share capital up to the former trading date
                                                                                                           705,692,507
 before the disclosure (share)
Fully diluted EPS calculated by the newest share capital:
 Dividend on preferred shares paid (RMB)                                                                          0.00
 Interest on perpetual bonds paid (RMB)                                                                           0.00
 Fully diluted EPS calculated by the newest share
                                                                                                               0.1498
 capital (RMB/share)

(II) Exceptional Gains and Losses

√ Applicable □ Not applicable
                                                                                                             Unit: RMB
                   Item                         Q3 2021           Q1-Q3 2021                        Note
 Gain or loss on disposal               of
 non-current assets (inclusive          of       757,900.36                6,459.16
 impairment allowance write-offs)
 Government grants through profit or
 loss (exclusive of government grants
 continuously given in the Company’s
                                                 360,000.00           766,454.70
 ordinary course of business at fixed
 quotas or amounts as per the
 government’s policies and standards)
 Gain or loss on fair-value changes on                                                For Q1-Q3 2021, the fair
 held-for-trading financial assets and                                                value of stocks in Jiangsu
 liabilities & income from disposal of                                                Liance     Electromechanical
                                             -20,805,528.66      102,081,339.45
 held-for-trading financial assets and                                                Technology Co., Ltd. and
 liabilities   and    available-for-sale                                              Kailong High Technology Co.,
 financial assets (exclusive of the                                                   Ltd. held by the Company’s
 effective portion of hedges that arise                                            wholly-owned        subsidiary
 in the Company’s ordinary course of                                              Changzhou             Horizon
 business)                                                                         Investment Co., Ltd. and
                                                                                   equity in Jiangsu Horizon
                                                                                   New Energy Technology Co.,
                                                                                   Ltd. held by the Company
                                                                                   increased. For Q3, gain or loss
                                                                                   on    fair   value    changes
                                                                                   decreased due to the decline in
                                                                                   stock price.
 Non-operating income and expense
                                                   270,234.72         787,110.59
 other than the above
 Income tax refund                                       0.00       6,307,493.08
 Less: Income tax effects                       -5,013,436.60      22,319,882.62
        Non-controlling interests effects
                                                       510.00           4,790.32
 (net of tax)
 Total                                         -14,404,466.98      87,624,184.04                 --
Other items that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases in the Reporting Period.

(III) Changes in Key Financial Statement Line Items and Explanation of why


√ Applicable □ Not applicable
1. Consolidated Balance Sheet Items
                      30 September      31 December
         Item                                              Change (%)              Explanation of why
                      2021 (RMB)        2020 (RMB)
                                                                    Investments in wealth management
Held-for-trading
                      321,347,440.00         11,500,272.00 2694.26% instruments with idle funds out of the
financial assets
                                                                    amount raised in a private placement
                                                                    Discounting and collection upon maturity of
Notes receivable      346,652,281.02        600,140,938.05  -42.24%
                                                                    bank acceptance notes held by the Company
                                                                    The Company properly allowed customers’
                                                                    buying on credit for more markets and
Accounts                                                            multi-cylinder diesel engine customers are
                     1,033,370,187.93       397,154,016.49 160.19%
receivable                                                          mainly supporting companies of main
                                                                    engine, which are usually given longer
                                                                    payment days.
                                                                    Decrease in imprest cash, security deposits
Other receivables       4,002,431.93          6,212,062.80  -35.57% and other receivables, as well as provisional
                                                                    payments
                                                                    Increase in gains on changes in the fair
                                                                    value of shares held by the Company’s
                                                                    wholly-owned     subsidiary    Changzhou
Other non-current                                                   Horizon Investment Co., Ltd. in Liance
                  234,801,290.76          98,732,938.63     137.81%
financial assets                                                    Technology, Kailong High Tech, etc., as
                                                                    well as of equity interests held by the
                                                                    Company in Jiangsu Horizon New Energy
                                                                    Technology Co., Ltd.
Construction       in                                               Wholly-owned subsidiary Changchai
                        117,018,095.85    66,502,432.41      75.96%
progress                                                            Machinery being under construction
                                                                    Increase in prepayments of Changchai
Other non-current
                         63,853,284.81    19,971,006.56     219.73% Machinery for construction and engineering
assets
                                                                    services
Short-term                                                           Repayment of some short-term borrowings
                         12,000,000.00    22,000,000.00      -45.45%
borrowings                                                           by the Company and its subsidiary
Employee benefits                                                    Salaries and bonuses accrued last year were
                   14,007,846.80          50,127,161.47      -72.06%
payable                                                              paid in the Reporting Period
Deferred income
                  124,661,259.24          80,671,598.82      54.53% Increase in the fair value of financial assets
tax liabilities
                                                                       Inclusion of share premium upon the
Capital reserves        640,676,218.40   164,328,665.43     289.87%
                                                                       completion of a private placement

2. Consolidated Income Statement Items for Q1~Q3
                        Q1~Q3 2021       Q1~Q3 2020
       Item                                               Change (%)               Explanation of why
                          (RMB)            (RMB)
                                                                    Exchange gains and losses resulted from
Finance costs              823,688.31      7,051,835.86     -88.32% exchange rate fluctuations and increase in
                                                                    interest income
                                                                    Decrease in government grants received by
Other income               766,454.70      5,695,097.89     -86.54%
                                                                    the Company
Return         on                                                   Increase in dividends received by the
                          8,663,940.64     5,503,903.85      57.41%
investment                                                          Company from the Bank of Jiangsu
Income        tax        23,705,272.54     5,108,476.05     364.04% Increase in gains on changes in fair value
expense
Credit impairment                                                      Allowances for doubtful accounts
                        -13,804,149.22    -7,335,779.05         ——
losses                                                                 receivable established based on aging
Asset impairment                                                    Decrease in losses on the impairment of
                         -7,356,415.78   -17,398,507.67         ——
losses                                                              assets such as inventories
                                                                    Increase in sales revenue, as well as
                                                                    increase in gains on changes in the fair
Net          profit                                                 value of shares held by the Company’s
attributable    to                                                  wholly-owned       subsidiary   Changzhou
shareholders    of      105,710,713.42    38,953,778.68     171.37% Horizon Investment Co., Ltd. in Liance
the Company as                                                      Technology, Kailong High Tech, etc., as
the parent                                                          well as of equity interests held by the
                                                                    Company in Jiangsu Horizon New Energy
                                                                    Technology Co., Ltd.

3. Consolidated Cash Flow Statement Items for Q1~Q3
       Item             Q1~Q3 2021       Q1~Q3 2020       Change (%)               Explanation of why
                         (RMB)             (RMB)
Net          cash
generated
                                                                         The Company properly allowed customers’
from/used         in -316,185,740.11      17,685,800.21           ——
                                                                         buying on credit for more markets
operating
activities
Net          cash                                                      Large investments in construction in
generated                                                              progress of Changchai Machinery, and
from/used         in -427,869,678.24 -104,621,999.67              —— investments of the Company and its
investing                                                              subsidiaries in wealth management
activities                                                             instruments with idle funds
Net          cash
generated
                                                                         Receipt of funds raised in a private
from/used         in   612,388,654.75     -2,280,722.28           ——
                                                                         placement
financing
activities

II Shareholder Information

(I) Numbers of Ordinary Shareholders and Preference Shareholders with Resumed Voting Rights as well
as Holdings of Top 10 Shareholders

                                                                                                         Unit: share
                                                            Number of preference shareholders
 Number of ordinary shareholders                   51,043                                                           0
                                                            with resumed voting rights (if any)
                                               Top 10 shareholders
                                        Shareho                                       Shares in pledge, marked or
     Name of              Nature of      lding     Total shares      Restricted                  frozen
    shareholder          shareholder    percenta      held          shares held
                                                                                          Status          Shares
                                           ge
 Changzhou
                        State-owned
 Investment Group                       32.26%     227,663,417       56,818,181
                        corporation
 Co., Ltd.
 Nuode Fund-
 Huazhang Tiandi
 Media Investment
 Co., Ltd.-Nuode        Other             1.61%     11,363,636       11,363,636
 Fund Pujiang
 No.64 Single Asset
 Management Plan
 China National
 Gold Group Asset       State-owned
                                          1.51%     10,681,818       10,681,818
 Management Co.,        corporation
 Ltd.
                        Domestic
 Chen Beiwen                              1.03%      7,272,727           7,272,727
                        individual
 Enjoy(Ningbo)Ass       Other             0.97%      6,818,181           6,818,181
et Management
L.P.-Enjoy
Yingshanhong
No.9 Private
Securities
Investment Fund
Changzhou
Transportation
Construction           State-owned
                                     0.67%       4,745,454      4,545,454
Investment             corporation
Development Co.,
Ltd.
                       Domestic
Yao Jianquan                         0.64%       4,545,454      4,545,454
                       individual
                       Domestic
Sun Meichun                          0.64%       4,545,454      4,545,454
                       individual
Jiangxi Jintou         Domestic
Industrial             non-state-o
                                     0.64%       4,545,454      4,545,454
Development Co.,       wned
Ltd.                   corporation
                       Domestic
Minmetals              non-state-o
                                     0.64%       4,545,454      4,545,454
Securities Co., Ltd.   wned
                       corporation
                                     Top 10 unrestricted shareholders
                                                                                    Shares by class
       Name of shareholder            Unrestricted ordinary shares held
                                                                                  Class           Shares
                                                                            RMB-denominate
Chen Jian                                                       3,492,700                        3,492,700
                                                                            d ordinary share
                                                                            Domestically
KGI ASIA LIMITED                                                3,101,695   listed foreign       3,101,695
                                                                            share
                                                                            Domestically
Li Suinan                                                       1,548,100   listed foreign       1,548,100
                                                                            share
                                                                            Domestically
Huang Guoliang                                                  1,528,891   listed foreign       1,528,891
                                                                            share
                                                                            RMB-denominate
Wang Zefeng                                                     1,386,747                        1,386,747
                                                                            d ordinary share
                                                                            Domestically
Lu Zhang                                                        1,337,012   listed foreign       1,337,012
                                                                            share
Tao Xiaofang                                                    1,240,000   RMB-denominate       1,240,000
                                                                                d ordinary share
                                                                                Domestically
 Xue Hong                                                           1,240,000   listed foreign       1,240,000
                                                                                share
                                                                                RMB-denominate
 Chen Xiaojing                                                      1,195,800                        1,195,800
                                                                                d ordinary share
                                                                                RMB-denominate
 Zhang Baoshan                                                      1,150,000                        1,150,000
                                                                                d ordinary share
                                      It is unknown whether there is among the top 10 public shareholders and
 Related or acting-in-concert
                                      the top 10 unrestricted public shareholders any related parties or
 parties among the shareholders
                                      acting-in-concert parties as defined in the Administrative Measures for
 above
                                      Information Regarding Shareholding Alteration.
                                      Chen Jian, Wang Zefeng and Chen Xiaojing respectively held 1,966,800,
 Top 10 shareholders engaged in
                                      1,386,747 and 1,194,000 shares in the Company through their credit
 securities margin trading (if any)
                                      accounts.


III Other Significant Events

√ Applicable □ Not applicable
1. Non-public offering of shares
On 9 April 2020, the 24th meeting of the 8th board of directors of the Company discussed and approved the
Non-public Offering Plan of the Company for 2020. The Company intended to make non-public issuance of
domestic common shares listed in RMB to specific objects, and this matter was approved by the controlling
shareholder Changzhou Investment Group Co., Ltd. and was reviewed and adopted in the meeting of shareholders
of 2019. On 18 September 2020, the temporary meeting of the board of directors of the Company discussed and
approved the relevant revision matters concerning non-public issuance of shares, the Company supplemented and
improved the foresaid plan according to the relevant revision matters, and prepared the Non-public Offering Plan
of the Company for 2020 (Revision Version), which was discussed and approved in the second temporary meeting
of shareholders in 2020.
On 17 December 2020, the Company received the Reply concerning the Approval of the Non-public Offering of
Shares of Changchai Company, Limited (ZJXK [2020] No. 3374) from the China Securities Regulatory
Commission, which approved the non-public offering of up to 168,412,297 shares of the Company. The
Company's offered 144,318,181 RMB ordinary shares (A shares) in a non-public manner. The issuing price was
RMB4.40 per share, total amount raised was RMB634,999,936.40, and the net amount raised was
RMB622,499,996.40. The new shares issued in a non-public manner were listed on the Shenzhen Stock Exchange
on 5 July 2021. For details, please refer to the Report on Non-public Offering by Changchai Company, Limited
and Listing Bulletin disclosed by the Company on www.cninfo.com.cn on 1 July 2021. The Company has
completed the capital registration, industrial and commercial registration of changes, and revision of articles of
association.
IV Quarterly Financial Statements

(I) Financial Statements

1. Consolidated Balance Sheet

Prepared by Changchai Company, Limited
                                               30 September 2021
                                                                                               Unit: RMB
                          Item                           30 September 2021          31 December 2020
 Current assets:
   Monetary assets                                                 672,734,056.90         760,728,222.85
   Settlement reserve
   Loans to other banks and financial institutions
   Held-for-trading financial assets                               321,347,440.00          11,500,272.00
   Derivative financial assets
   Notes receivable                                                346,652,281.02         600,140,938.05
   Accounts receivable                                        1,033,370,187.93            397,154,016.49
   Receivables financing
   Prepayments                                                      10,885,260.69           9,357,840.75
   Premiums receivable
   Reinsurance receivables
   Receivable reinsurance contract reserve
   Other receivables                                                 4,002,431.93           6,212,062.80
      Including: Interest receivable
                   Dividends receivable
   Financial assets purchased under resale
 agreements
   Inventories                                                     589,150,932.87         606,680,340.55
   Contract assets
   Assets held for sale
   Current portion of non-current assets
   Other current assets                                             19,625,671.20          27,299,362.72
 Total current assets                                         2,997,768,262.54          2,419,073,056.21
 Non-current assets:
   Loans and advances to customers
   Debt investments
   Other debt investments
   Long-term receivables
   Long-term equity investments
   Investments in other equity instruments                         829,767,691.82         685,137,950.87
   Other non-current financial assets                              234,801,290.76          98,732,938.63
   Investment property                                              44,583,070.43          46,239,326.03
  Fixed assets                                         415,214,477.96     454,181,555.68
  Construction in progress                             117,018,095.85      66,502,432.41
  Productive living assets
  Oil and gas assets
  Right-of-use assets
  Intangible assets                                    155,021,871.48     158,870,631.71
  Development costs
  Goodwill
  Long-term prepaid expense                                 65,002.89          13,693.20
  Deferred income tax assets                              4,231,873.15       4,231,873.15
  Other non-current assets                              63,853,284.81      19,971,006.56
Total non-current assets                              1,864,556,659.15   1,533,881,408.24
Total assets                                          4,862,324,921.69   3,952,954,464.45
Current liabilities:
  Short-term borrowings                                 12,000,000.00      22,000,000.00
  Borrowings from the central bank
   Loans from other banks and financial
institutions
  Held-for-trading financial liabilities
  Derivative financial liabilities
  Notes payable                                        656,796,159.50     595,346,000.00
  Accounts payable                                     587,456,913.85     612,757,392.46
  Advances from customers                                                     661,612.17
  Contract liabilities                                  37,772,926.63      35,944,517.15
  Financial assets sold under repurchase
agreements
  Customer deposits and deposits from other
banks and financial institutions
  Payables for acting trading of securities
  Payables for underwriting of securities
  Employee benefits payable                             14,007,846.80      50,127,161.47
  Taxes and levies payable                                4,044,397.46       2,869,485.41
  Other payables                                       235,066,490.82     197,545,076.08
     Including: Interest payable
                 Dividends payable                        3,891,433.83       3,891,433.83
  Fees and commissions payable
  Reinsurance payables
   Liabilities directly associated with assets held
for sale
  Current portion of non-current liabilities
  Other current liabilities                               6,106,039.32       5,233,947.12
Total current liabilities                             1,553,250,774.38   1,522,485,191.86
Non-current liabilities:
   Insurance contract reserve
   Long-term borrowings
   Bonds payable
      Including: Preference shares
                     Perpetual bonds
   Lease liabilities
   Long-term payables
   Long-term employee benefits payable
   Provisions
   Deferred income                                      42,179,737.60             56,949,737.60
   Deferred income tax liabilities                     124,661,259.24             80,671,598.82
   Other non-current liabilities
 Total non-current liabilities                         166,840,996.84            137,621,336.42
 Total liabilities                                    1,720,091,771.22         1,660,106,528.28
 Owners’ equity:
   Share capital                                       705,692,507.00            561,374,326.00
   Other equity instruments
      Including: Preference shares
                     Perpetual bonds
   Capital reserves                                    640,676,218.40            164,328,665.43
   Less: Treasury stock
   Other comprehensive income                          548,418,038.05            425,482,758.24
   Specific reserve                                     18,812,986.55             18,812,986.55
   Surplus reserves                                    325,451,531.14            325,451,531.14
   General reserve
   Retained earnings                                   883,609,793.08            777,899,079.66
 Total equity attributable to owners of the Company
                                                      3,122,661,074.22         2,273,349,347.02
 as the parent
 Non-controlling interests                              19,572,076.25             19,498,589.15
 Total owners’ equity                                3,142,233,150.47         2,292,847,936.17
 Total liabilities and owners’ equity                4,862,324,921.69         3,952,954,464.45

Legal representative: Shi Xinkun                                   General Manager: Zhang Xin

Head of the accounting department: Jiang He
2. Consolidated Income Statement for Q1~Q3

                                                                                              Unit: RMB
                                    Item                             Q1~Q3 2021          Q1~Q3 2020
 1. Revenues                                                         1,981,354,126.38   1,751,860,265.23
   Including: Operating revenue                                      1,981,354,126.38   1,751,860,265.23
                Interest income
                Insurance premium income
                Fee and commission income
 2. Costs and expenses                                               1,942,537,176.98   1,694,490,647.57
   Including: Cost of sales                                          1,709,842,352.28   1,468,409,717.46
                Interest expense
                Fee and commission expense
                Surrenders
                Net insurance claims paid
                Net amount provided as insurance contract reserve
                Expenditure on policy dividends
                Reinsurance premium expense
                Taxes and levies                                         9,599,626.55       9,673,762.22
                Selling expense                                        97,211,507.42     102,089,329.05
                Administrative expense                                 69,073,749.70      57,818,820.36
                R&D expense                                            55,986,252.72      49,447,182.62
                Finance costs                                             823,688.31        7,051,835.86
                   Including: Interest expense                           5,806,935.93       5,384,379.68
                                Interest income                          7,246,601.53       4,563,438.25
 Add: Other income                                                        766,454.70        5,695,097.89
        Return on investment (“-” for loss)                            8,663,940.64       5,503,903.85
          Including: Share of profit or loss of joint ventures and
 associates
            Income from the derecognition of financial assets at
 amortized cost (“-” for loss)
        Exchange gain (“-” for loss)
        Net gain on exposure hedges (“-” for loss)
        Gain on changes in fair value (“-” for loss)                101,609,123.57
        Credit impairment loss (“-” for loss)                        -13,804,149.22      -7,335,779.05
        Asset impairment loss (“-” for loss)                          -7,356,415.78     -17,398,507.67
        Asset disposal income (“-” for loss)                              6,459.16         181,780.55
 3. Operating profit (“-” for loss)                                 128,702,362.47      44,016,113.23
 Add: Non-operating income                                               1,268,521.68        628,068.52
 Less: Non-operating expense                                              481,411.09         424,278.65
 4. Gross profit (“-” for loss)                                     129,489,473.06      44,219,903.10
 Less: Income tax expense                                              23,705,272.54        5,108,476.05
 5. Net profit (“-” for net loss)                                        105,784,200.52    39,111,427.05
   5.1 By operating continuity
      5.1.1 Net profit from continuing operations (“-” for net loss)     105,784,200.52    39,111,427.05
      5.1.2 Net profit from discontinued operations (“-” for net loss)
   5.2 By ownership
      5.2.1 Net profit attributable to owners of the Company as the
                                                                           105,710,713.42    38,953,778.68
 parent
      5.2.1 Net profit attributable to non-controlling interests                73,487.10       157,648.37
 6. Other comprehensive income, net of tax                                 122,935,279.81    22,732,693.67
   Attributable to owners of the Company as the parent                     122,935,279.81    22,732,693.67
      6.1 Items that will not be reclassified to profit or loss            122,935,279.81    22,732,693.67
         6.1.1 Changes caused by remeasurements on defined
 benefit schemes
         6.1.2 Other comprehensive income that will not be
 reclassified to profit or loss under the equity method
         6.1.3 Changes in the fair value of investments in other
                                                                           122,935,279.81    22,732,693.67
 equity instruments
          6.1.4 Changes in the fair value arising from changes in own
 credit risk
         6.1.5 Other
      6.2 Items that will be reclassified to profit or loss
         6.2.1 Other comprehensive income that will be reclassified
 to profit or loss under the equity method
         6.2.2 Changes in the fair value of other debt investments
         6.2.3 Other comprehensive income arising from the
 reclassification of financial assets
        6.2.4 Credit impairment allowance for other debt
 investments
         6.2.5 Reserve for cash flow hedges
        6.2.6 Differences arising from the translation of foreign
 currency-denominated financial statements
         6.2.7 Other
   Attributable to non-controlling interests
 7. Total comprehensive income                                             228,719,480.33    61,844,120.72
   Attributable to owners of the Company as the parent                     228,645,993.23    61,686,472.35
   Attributable to non-controlling interests                                    73,487.10       157,648.37
 8. Earnings per share
   8.1 Basic earnings per share                                                   0.1734            0.0694
   8.2 Diluted earnings per share                                                 0.1734            0.0694

Legal representative: Shi Xinkun                                              General Manager: Zhang Xin

Head of the accounting department: Jiang He
3. Consolidated Cash Flow Statement for Q1~Q3

                                                                                          Unit: RMB
                              Item                              Q1~Q3 2021         Q1~Q3 2020
 1. Cash flows from operating activities:
    Proceeds from sale of commodities and rendering of
                                                                1,631,589,730.09   1,611,643,141.67
 services
   Net increase in customer deposits and deposits from other
 banks and financial institutions
   Net increase in borrowings from the central bank
   Net increase in loans from other financial institutions
   Premiums received on original insurance contracts
   Net proceeds from reinsurance
   Net increase in deposits and investments of policy holders
   Interest, fees and commissions received
    Net increase in loans from other banks and financial
 institutions
   Net increase in proceeds from repurchase transactions
   Net proceeds from acting trading of securities
   Tax and levy rebates                                            33,014,359.71     21,886,374.72
   Cash generated from other operating activities                  10,218,300.82     11,604,073.90
 Subtotal of cash generated from operating activities           1,674,822,390.62   1,645,133,590.29
   Payments for commodities and services                        1,610,525,132.37   1,284,823,979.81
   Net increase in loans and advances to customers
   Net increase in deposits in the central bank and other
 banks and financial institutions
   Payments for claims on original insurance contracts
    Net increase in loans to other banks and financial
 institutions
   Interest, fees and commissions paid
   Policy dividends paid
   Cash paid to and for employees                                 253,758,615.93    220,889,699.06
   Taxes and levies paid                                           31,954,409.88     32,562,156.11
   Cash used in other operating activities                         94,769,972.55     89,171,955.10
 Subtotal of cash used in operating activities                  1,991,008,130.73   1,627,447,790.08
 Net cash generated from/used in operating activities            -316,185,740.11     17,685,800.21
 2. Cash flows from investing activities:
   Proceeds from disinvestment                                     28,222,100.00     29,773,443.16
   Return on investment                                             8,762,954.14       5,503,903.85
   Net proceeds from the disposal of fixed assets, intangible
                                                                     815,419.17         108,370.88
 assets and other long-lived assets
   Net proceeds from the disposal of subsidiaries and other
 business units
   Cash generated from other investing activities                                         97,150.00
 Subtotal of cash generated from investing activities            37,800,473.31        35,482,867.89
   Payments for the acquisition of fixed assets, intangible
                                                                120,898,051.55       114,151,611.40
 assets and other long-lived assets
   Payments for investments                                     344,772,100.00        25,022,956.16
   Net increase in pledged loans granted
   Net payments for the acquisition of subsidiaries and other
 business units
   Cash used in other investing activities                                               930,300.00
 Subtotal of cash used in investing activities                  465,670,151.55       140,104,867.56
 Net cash generated from/used in investing activities           -427,869,678.24     -104,621,999.67
 3. Cash flows from financing activities:
   Capital contributions received                               634,999,996.40
      Including: Capital contributions by non-controlling
 interests to subsidiaries
   Borrowings received                                             7,000,000.00       20,000,000.00
   Cash generated from other financing activities                  1,391,000.00
 Subtotal of cash generated from financing activities           643,390,996.40        20,000,000.00
   Repayment of borrowings                                       17,000,000.00        20,000,000.00
   Interest and dividends paid                                     1,307,343.28        2,280,722.28
     Including: Dividends paid by subsidiaries to
 non-controlling interests
   Cash used in other financing activities                       12,694,998.37
 Subtotal of cash used in financing activities                   31,002,341.65        22,280,722.28
 Net cash generated from/used in financing activities           612,388,654.75        -2,280,722.28
 4. Effect of foreign exchange rates changes on cash and cash
                                                                                        -401,452.02
 equivalents
 5. Net increase in cash and cash equivalents                   -131,666,763.60      -89,618,373.76
 Add: Cash and cash equivalents, beginning of the period        629,939,540.50       545,959,998.20
 6. Cash and cash equivalents, end of the period                498,272,776.90       456,341,624.44

Legal representative: Shi Xinkun                                       General Manager: Zhang Xin

Head of the accounting department: Jiang He
(II) Adjustments to the Financial Statements

1. Adjustments to the Financial Statements at the Beginning of the First Execution Year of the New
Standards Governing Leases from 2021

□ Applicable √ Not applicable

2. Retrospective Restatement of Previous Comparative Data due to the First Execution of the New
Standards Governing Leases from 2021

□ Applicable √ Not applicable

(III) Independent Auditor’s Report

Indicate by tick mark whether the financial statements above have been audited by an independent auditor.
□ Yes √ No
These financial statements have not been audited by such an auditor.

                                                                                       The Board of Directors
                                                                                  Changchai Company, Limited
                                                                                             29 October 2021