Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Stock Code:200771 Stock ID: Hangqilun B Announcement No.2019-37 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019 (Stock Code:200771 ) April 2019 1 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) I. ImportantPrompt The Board of Directors, The Supervisory Committee, the supervisors and the directors of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report. All of the directors presented the board meeting at which this Quarterly Report was examined. Chairman Mr. Zheng Bin, Chief Financial Officer Mr.Zhao Jiamao, and the Chief of Accounting Department Mr. Jin Can hereby declare: the Financial Statement in the report is guaranteed to be truthful and complete. II. Basic information about the company I. Main financial data and indices Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data. No Changes of this period over same This period Same period of last year period of last year (%) Operating income(Yuan) 981,379,422.22 962,078,793.39 2.01% Net profit attributable to the shareholders of the listed company(Yuan) 77,880,149.01 39,042,232.50 99.48% Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company (Yuan) 64,434,545.56 28,469,122.60 126.33% Cash flow generated by business operation, net (Yuan) -10,468,568.94 126,725,248.14 -108.26% Basic earning per share(Yuan/Share) 0.10 0.05 100.00% Diluted gains per share(Yuan/Share) 0.10 0.05 100.00% Weighted average return on equity(%) 1.26% 0.66% 0.60% Changes of this period-end over same End of this period End of last period period-end of last year(%) 2 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Gross assets(Yuan) 12,035,257,391.97 11,569,169,903.81 4.03% Net assets attributable to the shareholders of the listed company(Yuan) 6,364,721,242.43 6,007,540,929.16 5.95% Items and amount of non-current gains and losses In RMB Amount (Year-beginning to the Non-recurring gain and loss items Notes end of the report period.) Non-current asset disposal gain/loss(including the write-off part for which assets impairment -1,020.37 provision is made) Governmental Subsidy accounted as current gain/loss, except for those subsidies at with amount or quantity fixed by the national government and closely related to the Company’s 1,618,554.63 business operation. Debt restructuring profit or loss -526,315.79 In addition to normal business with the company effective hedging related business, holders of tradable financial assets, transactions and financial liabilities arising from changes in fair 16,333,452.93 value gains and losses, as well as the disposal of trading of financial assets, trading financial liabilities and available-for-sale financial assets gains return on investment Other non-operating income and expenditure beside for the above items -281,890.11 Less: Influenced amount of income tax 2,706,191.10 Amount of influence of minority interests(After tax) 990,986.74 Total 13,445,603.45 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 3 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) II. Total number of shareholders at the period-end and shareholdings of top 10 shareholders 1. About Total Common Shareholders, Total Preference Shareholders with the Voting Power Recovered and the Shares Held by Top Ten Common Shareholders In shares Total number of common shareholders at Total preference shareholders with the voting power recovered at the 13,879 0 the period-end end of the reporting period(if any) Shares held by the top 10 shareholders Amount of Pledging or freezing Share tradable shares Properties of Shareholder name proporti Quantity with Status of shareholder Quantity on % Conditional the shares held State-owned Hangzhou Steam Turbine Power Group Co., Ltd. 63.64% 479,824,800 479,824,800 legal person VANGUARD EMERGING MARKETS STOCK INDEX Foreign legal 0.63% 4,722,804 0 FUND person VANGUARD TOTAL INTERNATIONAL STOCK INDEX Foreign legal 0.61% 4,596,779 0 FUND person Domestic Zhou Jie 0.56% 4,200,000 0 Natural person Foreign legal ISHARES CORE MSCI EMERGING MARKETS ETF 0.55% 4,144,859 0 person Foreign legal GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 0.49% 3,722,079 0 person State-owned China Merchants Secutities(HK)Co., Ltd. 0.47% 3,508,541 0 legal person Foreign legal NORGES BANK 0.33% 2,514,529 0 person Domestic Xia Zulin 0.31% 2,301,000 0 Natural person Domestic Wang Yihu 0.19% 1,441,324 0 Natural person Shares held by the Top 10 Shareholders of Non-restricted shares Number of the Share type Shareholders’ Names non-restricted Share type Quantity shares held Foreign shares placed in VANGUARD EMERGING MARKETS STOCK INDEX FUND 4,722,804 4,722,804 domestic exchange Foreign shares placed in VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 4,596,779 4,596,779 domestic exchange Foreign shares placed in Zhou Jie 4,200,000 4,200,000 domestic exchange 4 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Foreign shares placed in ISHARES CORE MSCI EMERGING MARKETS ETF 4,144,859 4,144,859 domestic exchange Foreign shares placed in GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 3,722,079 3,722,079 domestic exchange Foreign shares placed in China Merchants Securities(HK)Co., Ltd. 3,508,541 3,508,541 domestic exchange Foreign shares placed in NORGES BANK 2,514,529 2,514,529 domestic exchange Foreign shares placed in Xia Zulin 2,301,000 2,301,000 domestic exchange Foreign shares placed in Wang Yihu 1,441,324 1,441,324 domestic exchange Foreign shares placed in Haitong International Securities Company Limited-Account Client 1,371,396 1,371,396 domestic exchange (1) There is not any relationship between Hangzhou Steam Turbine Group Power Group Co., Ltd. and other shareholders; (2) It is unknown to the Company if there is any relationship among the top 10 common share holders Explanation on associated relationship or concerted action of the above shareholders without restriction; (3) Hangzhou Steam Turbine Group Co., Ltd. is not an “action-in-concert” party with any of other shareholders as described by the “Administration Rules of Informational Disclosure about Change of Shareholding Statues of PLCs”. Note to the top 10 common stockholders involved in margin financing & securities Not applicable lending (If any) Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period. 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 number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the report period Not applicable 5 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) III. Significant Events I. Changes in the principal accounting statement items and financial indications and the causes Scale of Remarks on the change Items End of term Beginning of term change Mainly due to the year-on-year Other current assets 781,347,086.94 1,188,747,955.74 -34.27% decrease in wealth management Mainly due to the new investment in the current phase of the steam turbine Construction in process 553,964,577.53 454,767,328.93 21.81% heavy industry project with the progress of the project Mainly on the end of the current period Employees’ wage payable 66,135,087.07 86,390,955.29 -23.45% provision for payment of wages Mainly due to the increase in fair value Other Comprehensive Income 1,656,792,172.11 1,377,168,522.74 20.30% of Hangzhou Bank's other equity instruments in the current period Mainly due to increase in value-added Tax payable 90,528,916.89 62,405,200.62 45.07% tax and income tax at the end of the period. Income statement items Same period of last Scale of Remarks on the change This period year change Mainly due to the increase in interest Financial expenses 4,347,822.25 13,846,986.06 -68.60% income and the decrease in exchange losses in the current period Mainly due to the good return of the cu rrent period, resulting in a decrease in t Asset impairment loss -18,034,732.47 25,569,130.99 -170.53% he provision for bad debts of accounts r eceivable. Same period of last Scale of Remarks on the change Cash flow statement Items This period year change Net Cash flow generated by business Mainly due to the decrease in cash operation -10,468,568.94 126,725,248.14 -108.26% receipts for sales of goods during the period Net cash flow generated by investment Mainly due to the decrease in new wealth management products in the 305,922,724.58 -280,100,905.12 209.22% current period compared with the same period of last year. Net cash flow generated by Financing Mainly due to the year-on-year -37,535,954.10 10,881,462.31 -444.95% increase in short -term loans 6 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) II. Progress of Significant Events, their Influences and Analytical Notice on the Solutions The company continued to promote the construction of steam turbine heavy industry projects as planned, and fully prepared for the relocation work. As of the disclosure date, the company's newly completed steam turbine power building (formerly the scientific research building) has been partially activated, and the steam turbine heavy indust ry has been partially activated. Progress in the implementation of share repurchase Not applicable Progress in the implementation of the reduction of the repurchased shares by means of centralized bidding Not applicable III. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer, directors, supervisors, senior executives or other related parties in the reporting period and commitments unfinished in implementation at the end of the reporting period Non-existence 7 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) IV.Prediction of Business performance for January- June 2019 Estimation of 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 of reason. Not applicable V. Securities investment Mode of Purchase Sale Gain/los accountin Book value balance at amount amount Book value balance at Accou Sauce Security Security Stock Initial investment Changes in fair value Cumulative fair value s of the g the beginning of the in the in the the end of the reporting nting of the category code Abbreviation: cost of the this period changes in equity reporting measure reporting period this this period items shares period ment period period Domesti c and Other Self 600926 Hangzhou Bank 390,954,040.00 FVM 2,011,876,524.40 328,968,999.26 1,949,891,483.66 0.00 0.00 0.00 2,340,845,523.66 foreign assets funds stocks Total 390,954,040.00 -- 2,011,876,524.40 328,968,999.26 1,949,891,483.66 0.00 0.00 0.00 2,340,845,523.66 -- -- Disclosure date for the notice of Not applicable approval by the Board Disclosure date for the notice of Not applicable approval by shareholders’ Meeting VI. Investment in derivatives Non-existence 8 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) VII. Registration form of such Activities as Reception, Research, Communication, Interview in the Reporting Period No such cases in the reporting period. VIII. Outward Guarantee against the Regulations No such cases in the reporting period. IX. Non-operational Occupancy of the Company’s Capital by the Controlling Shareholder and its Related Parties Non-existence 9 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) IV.FinancialStatement I. Financial statement 1. Consolidated balance sheet Prepared by::Hangzhou Steam Turbine Co., Ltd. In RMB Items March 31,2019 December 31,2018 Current asset: Monetary fund 1,637,876,350.79 1,382,392,009.59 Settlement provision Outgoing call loan Transactional financial assets 66,000,000.00 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable & account receivable 2,630,906,374.10 2,535,887,430.48 Including: Notes receivable 553,627,623.69 595,089,175.22 Account receivable 2,077,278,750.41 1,940,798,255.26 Prepayments 418,751,932.09 370,958,990.74 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Other account receivable 33,424,412.22 32,552,458.76 Including:Interest receivable Dividend receivable 16,557,292.60 16,557,292.60 Repurchasing of financial assets Inventories 2,239,085,430.22 2,188,121,342.87 Contract assets Assets held for sales Non-current asset due within 1 year Other current asset 781,347,086.94 1,188,747,955.74 Total of current assets 7,807,391,586.36 7,698,660,188.18 Non-current assets: Loans and payment on other’s behalf disbursed Debt investment Available for sale of financial assets 2,130,076,555.20 Other investment on bonds Expired investment in possess Long-term receivable 10 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Long term share equity investment 9,581,439.29 8,221,439.29 Other equity instruments investment 2,340,845,523.66 Other non-current financial assets 52,200,030.80 Property investment Fixed assets 778,843,408.32 783,740,928.49 Construction in progress 553,964,577.53 454,767,328.93 Production physical assets Oil & gas assets Use right assets Intangible assets 278,931,164.55 279,740,756.49 Development expenses Goodwill Long-germ expenses to be amortized Deferred income tax asset 213,499,661.46 213,962,707.23 Other non-current asset Total of non-current assets 4,227,865,805.61 3,870,509,715.63 Total of assets 12,035,257,391.97 11,569,169,903.81 Current liabilities Short-term loans 119,500,000.00 139,600,000.00 Loan from Central Bank Borrowing funds Transactional financial liabilities Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Notes payable & account payable 1,480,422,463.77 1,350,583,381.53 Advance receipts 2,523,888,921.39 2,582,234,158.36 Selling of repurchased financial assets Deposit taking and interbank deposit Entrusted trading of securities Entrusted selling of securities Employees’ wage payable 66,135,087.07 86,390,955.29 Tax payable 90,528,916.89 62,405,200.62 Other account payable 42,540,320.98 36,904,303.01 Including:Interest payable 100,958.90 437,314.72 Dividend payable Fees and commissions payable 11 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Reinsurance fee payable Contract Liabilities Liabilities held for sales Non-current liability due within 1 year 100,100,000.00 100,100,000.00 Other current liability Total of current liability 4,423,115,710.10 4,358,217,998.81 Non-current liabilities: Reserve fund for insurance contracts Long-term loan 22,700,000.00 22,700,000.00 Bond payable Including:preferred stock Sustainable debt Lease liability Long-term payable 473,308,843.54 474,876,451.26 Long-term remuneration payable to staff Expected liabilities Deferred income 43,448,778.30 44,675,128.30 Deferred income tax liability 293,515,296.46 244,169,946.57 Other non-current liabilities Total non-current liabilities 832,972,918.30 786,421,526.13 Total of liability 5,256,088,628.40 5,144,639,524.94 Owners’ equity Share capital 754,010,400.00 754,010,400.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 151,684,419.65 151,684,419.65 Less:Shares in stock Other comprehensive income 1,656,792,172.11 1,377,168,522.74 Special reserve 20,697,186.36 21,020,671.47 Surplus reserves 621,112,807.78 621,112,807.78 Common risk provision Retained profit 3,160,424,256.53 3,082,544,107.52 Total of owner’s equity belong to the parent company 6,364,721,242.43 6,007,540,929.16 12 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Minority shareholders’ equity 414,447,521.14 416,989,449.71 Total of owners’ equity 6,779,168,763.57 6,424,530,378.87 Total of liabilities and owners’ equity 12,035,257,391.97 11,569,169,903.81 Legal Representative: Zheng Bin Person in charge of accounting:Zhao Jiamao Accounting Dept Leader: Jin Can 2.Parent Company Balance Sheet In RMB Items March 31, 2019 December 31, 2018 Current asset: Monetary fund 1,128,980,955.32 877,357,020.98 Transactional financial assets 66,000,000.00 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable & account receivable 1,720,369,440.28 1,676,913,196.88 Including:Notes receivable 253,764,623.34 302,284,986.43 Account receivable 1,466,604,816.94 1,374,628,210.45 Prepayments 239,254,834.85 208,498,421.20 Other account receivable 52,559,156.42 19,984,760.06 Including:Interest receivable Dividend receivable 16,557,292.60 16,557,292.60 Inventories 1,605,223,908.55 1,584,030,951.83 Contract assets Assets held for sales Non-current asset due within 1 year Other current asset 558,668,023.95 890,000,000.00 Total of current assets 5,371,056,319.37 5,256,784,350.95 Non-current assets: Debt investment Available for sale of financial assets 2,090,631,297.62 Other investment on bonds Expired investment in possess Long-term receivable Long term share equity investment 502,919,378.03 502,919,378.03 Other equity instruments investment 2,340,845,523.66 Other non-current financial assets 12,754,773.22 13 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Property investment Fixed assets 450,780,087.64 448,890,495.75 Construction in progress 171,204,399.99 142,310,055.48 Production physical assets Oil & gas assets Use right assets Intangible assets 165,734,347.73 165,734,347.73 Development expenses Goodwill Long-germ expenses to be amortized Deferred income tax asset 161,324,402.66 163,871,631.81 Other non-current asset Total of non-current assets 3,805,562,912.93 3,514,357,206.42 Total of assets 9,176,619,232.30 8,771,141,557.37 Current liabilities Short-term loans Transactional financial liabilities Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Notes payable & account payable 686,376,431.31 654,853,099.86 Advance receipts 1,803,448,290.59 1,877,069,335.29 Contract Liabilities Employees’ wage payable 41,137,106.47 43,332,523.01 Tax payable 56,888,515.45 37,809,874.53 Other account payable 27,780,355.44 24,708,959.22 Including:Interest payable 100,958.90 212,010.69 Dividend payable 0.00 0.00 Liabilities held for sales Non-current liability due within 1 year 100,000,000.00 100,000,000.00 Other current liability Total of current liability 2,715,630,699.26 2,737,773,791.91 Non-current liabilities: Long-term loan Bond payable Including:preferred stock 14 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Sustainable debt Lease liability Long-term payable 264,213,580.51 264,512,388.24 Long-term remuneration payable to staff Expected liabilities Deferred income 41,944,793.30 41,944,793.30 Deferred income tax liability 293,515,296.46 244,169,946.57 Other non-current liabilities Total non-current liabilities 599,673,670.27 550,627,128.11 Total of liability 3,315,304,369.53 3,288,400,920.02 Owners’ equity Share capital 754,010,400.00 754,010,400.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 138,953,250.09 138,953,250.09 Less:Shares in stock Other comprehensive income 1,657,407,761.11 1,377,784,111.74 Special reserve 7,524,745.76 7,609,505.31 Surplus reserves 602,356,402.65 602,356,402.65 Retained profit 2,701,062,303.16 2,602,026,967.56 Total of owners’ equity 5,861,314,862.77 5,482,740,637.35 Total of liabilities and owners’ equity 9,176,619,232.30 8,771,141,557.37 Legal Representative: Zheng Bin Person in charge of accounting:Zhao Jiamao Accounting Dept Leader: Jin Can 3.Consolidated Income statement In RMB Same period of the previous Items Report period year I. Income from the key business 981,379,422.22 962,078,793.39 Including:Business income 981,379,422.22 962,078,793.39 Interest income Insurance fee earned Fee and commission received 15 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) II. Total business cost 885,437,628.30 923,882,796.39 Including:Business cost 687,084,952.75 677,035,461.03 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Net amount of withdrawal of insurance contract reserve Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 10,002,595.20 8,754,883.42 Sales expense 42,946,925.81 38,457,390.31 Administrative expense 103,213,462.27 102,361,451.02 R & D costs 55,876,602.49 57,857,493.56 Financial expenses 4,347,822.25 13,846,986.06 Including:Interest expense 3,742,052.78 3,157,102.73 Interest income 5,685,034.53 3,602,405.87 Asset impairment loss -18,034,732.47 25,569,130.99 Credit impairment loss Add:Other income 1,618,554.63 367,707.12 Investment gain(“-”for loss) 16,333,452.93 16,889,734.98 Including: investment gains from affiliates Gains from currency exchange Net exposure hedging income Changing income of fair value Income on disposal of assets III. Operational profit(“-”for loss) 113,893,801.48 55,453,439.10 Add :Non-operational income 85,765.95 2,932,814.41 Less: Non-operating expense 894,992.22 266,922.74 IV. Total profit(“-”for loss) 113,084,575.21 58,119,330.77 Less:Income tax expenses 18,054,696.67 9,310,235.49 V. Net profit 95,029,878.54 48,809,095.28 (I) Classification by business continuity 1.Net continuing operating profit 95,029,878.54 48,809,095.28 2.Termination of operating net profit 16 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) (II) Classification by ownership Net profit attributable to the owners of parent company 77,880,149.01 39,042,232.50 Minority shareholders’ equity 17,149,729.53 9,766,862.78 VI. Net after-tax of other comprehensive income 279,623,649.37 -39,617,101.50 Net of profit of other comprehensive income attributable to owners of the -39,616,527.30 parent company. 279,623,649.37 (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 279,623,649.37 1.Re-measurement of defined benefit plans of changes in net debt or net a ssets 2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss. 3. Changes in the fair value of investments in other equity instruments 279,623,649.37 4. Changes in the fair value of the company’s credit risks 5.Other (II) -39,616,527.30 Other comprehensive income that will be reclassified into profit or loss. 1.Other comprehensive income under the equity method investee can be r eclassified into profit or loss. 2. Changes in the fair value of investments in other debt obligations 3.Gains and losses from changes in fair value available for sale financial a -39,616,101.50 ssets 4. Other comprehensive income arising from the reclassification of financial assets 5.Held-to-maturity investments reclassified to gains and losses of availabl e for sale financial assets 6. Allowance for credit impairments in investments in other debt obligations 7. Reserve for cash flow hedges 8. Translation differences in currency financial statements -425.80 9.Other Net of profit of other comprehensive income attributable to Minority -574.20 shareholders’ equity 17 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) VII. Total comprehensive income 374,653,527.91 9,191,993.78 Total comprehensive income attributable to the owner of the parent 357,503,798.38 -574,294.80 company Total comprehensive income attributable minority shareholders 17,149,729.53 9,766,288.58 VIII. Earnings per share (I)Basic earnings per share 0.10 0.05 (II)Diluted earnings per share 0.10 0.05 Legal Representative: Zheng Bin Person in charge of accounting:Zhao Jiamao Accounting Dept Leader: Jin Can 4. Income statement of the Parent Company In RMB Same period of the previous Items Report period year I. Revenue 576,342,586.70 665,826,865.49 Including:Business cost 391,240,784.15 501,571,098.74 Business tax and surcharge 5,971,671.17 6,750,023.51 Sales expense 22,828,881.22 19,855,662.21 Administrative expense 73,427,839.51 60,560,685.42 R & D costs 31,160,922.92 40,184,459.92 Financial expenses 2,105,878.62 12,917,968.41 Including:Interest expenses 1,967,737.57 1,862,055.93 Interest income 5,028,554.95 2,452,159.72 Asset impairment loss -16,981,527.65 26,529,217.37 Credit impairment loss Add:Other income 298,807.73 0.00 Investment gain(“-”for loss) 44,838,301.36 44,093,063.87 Including: investment gains from affiliates Net exposure hedging income Changing income of fair value Income on disposal of assets II. Operational profit(“-”for loss) 111,725,245.85 41,550,813.78 Add :Non-operational income 12,700.00 3,116,732.00 Less:Non -operational expenses 592,962.79 130,524.05 18 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) III. Total profit(“-”for loss) 111,144,983.06 44,537,021.73 Less:Income tax expenses 12,109,647.46 2,491,113.26 IV. Net profit 99,035,335.60 42,045,908.47 1.Net continuing operating profit 99,035,335.60 42,045,908.47 2.Termination of operating net profit V. Net after-tax of other comprehensive income 279,623,649.37 -39,616,101.50 (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 279,623,649.37 1.Re-measurement of defined benefit plans of changes in net debt or net a ssets 2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss. 3. Changes in the fair value of investments in other equity instruments 279,623,649.37 4. Changes in the fair value of the company’s credit risks 5.Other (II) -39,616,101.50 Other comprehensive income that will be reclassified into profit or loss. 1.Other comprehensive income under the equity method investee can be r eclassified into profit or loss. 2. Changes in the fair value of investments in other debt obligations 3. Gains and losses from changes in fair value available for sale financial as -39,616,101.50 sets 4. Other comprehensive income arising from the reclassification of financial assets 5.Held-to-maturity investments reclassified to gains and losses of availabl e for sale financial assets 6. Allowance for credit impairments in investments in other debt obligations 7. Reserve for cash flow hedges 8. Translation differences in currency financial statements 9.Other VI. Total comprehensive income 378,658,984.97 2,429,806.97 VII. Earnings per share (I)Basic earnings per share 0.13 0.06 (II)Diluted earnings per share 0.13 0.06 19 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Legal Representative: Zheng Bin Person in charge of accounting:Zhao Jiamao Accounting Dept Leader: Jin Can 5. Consolidated Cash flow statement In RMB Same period of the previous Items Report period year I. Cash flows from operating activities Cash received from sales of goods or rending of services 745,588,958.09 838,220,339.60 Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Net increase of amount from disposal financial assets that measured by fair value and with variation reckoned into current gains/losses Cash received from interest, commission charge and commission Net increase of inter-bank fund received Net increase of repurchasing business Net cash received by agent in securities trading Tax returned 2,148,686.90 2,374,074.97 Other cash received from business operation 8,746,017.84 5,420,749.00 Sub-total of cash inflow 756,483,662.83 846,015,163.57 Cash paid for purchasing of merchandise and services 447,021,932.25 425,452,604.80 Net increase of client trade and advance Net increase of savings in central bank and brother company Cash paid for original contract claim Net increase in financial assets held for trading purposes Net increase for Outgoing call loan Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 193,009,920.39 189,311,016.30 Taxes paid 83,045,359.81 64,394,773.79 Other cash paid for business activities 43,875,019.32 40,131,520.54 20 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Sub-total of cash outflow from business activities 766,952,231.77 719,289,915.43 Net cash generated from /used in operating activities -10,468,568.94 126,725,248.14 II. Cash flow generated by investing Cash received from investment retrieving 80,000,000.00 Cash received as investment gains 16,333,452.93 16,889,734.98 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 1,024,205,268.55 880,265,735.99 Sub-total of cash inflow due to investment activities 1,040,538,721.48 977,155,470.97 Cash paid for construction of fixed assets, intangible assets and other 130,558,742.18 100,656,376.09 long-term assets Cash paid as investment 1,360,000.00 Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities 602,697,254.72 1,156,600,000.00 Sub-total of cash outflow due to investment activities 734,615,996.90 1,257,256,376.09 Net cash flow generated by investment 305,922,724.58 -280,100,905.12 III.Cash flow generated by financing Cash received as investment 2,312,067.15 Including: Cash received as investment from minor shareholders Cash received as loans 19,000,000.00 42,000,000.00 Cash received from bond placing Other financing –related cash received Sub-total of cash inflow from financing activities 21,312,067.15 42,000,000.00 Cash to repay debts 39,100,000.00 23,900,000.00 Cash paid as dividend, profit, or interests 19,548,513.32 7,218,537.69 Including: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 199,507.93 Sub-total of cash outflow due to financing activities 58,848,021.25 31,118,537.69 Net cash flow generated by financing -37,535,954.10 10,881,462.31 IV. Influence of exchange rate alternation on cash and cash equivalents -2,433,860.34 -9,365,315.99 V.Net increase of cash and cash equivalents 255,484,341.20 -151,859,510.66 Add: balance of cash and cash equivalents at the beginning of term 1,262,186,817.20 1,222,677,495.94 21 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) VI ..Balance of cash and cash equivalents at the end of term 1,517,671,158.40 1,070,817,985.28 Legal Representative: Zheng Bin Person in charge of accounting:Zhao Jiamao Accounting Dept Leader: Jin Can 6. Cash Flow Statement of the Parent Company In RMB Items Report period Same period of the previous year I.Cash flows from operating activities Cash received from sales of goods or rending of services 357,531,475.37 337,257,363.43 Tax returned 198,416.10 Other cash received from business operation 5,091,255.25 2,486,269.96 Sub-total of cash inflow 362,622,730.62 339,942,049.49 Cash paid for purchasing of merchandise and services 217,084,052.44 225,206,170.83 Cash paid to staffs or paid for staffs 118,261,725.24 119,618,256.32 Taxes paid 46,199,590.52 29,555,820.94 Other cash paid for business activities 19,700,026.88 11,564,241.82 Sub-total of cash outflow from business activities 401,245,395.08 385,944,489.91 Net cash generated from /used in operating activities -38,622,664.46 -46,002,440.42 II. Cash flow generated by investing Cash received from investment retrieving 80,000,000.00 Cash received as investment gains 44,838,301.36 16,083,463.87 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 520,000,000.00 685,025,355.14 Sub-total of cash inflow due to investment activities 564,838,301.36 781,108,819.01 Cash paid for construction of fixed assets, intangible assets 49,962,456.00 32,378,236.48 and other long-term assets Cash paid as investment Net cash received from subsidiaries and other operational units Other cash paid for investment activities 220,000,000.00 895,000,000.00 Sub-total of cash outflow due to investment activities 269,962,456.00 927,378,236.48 22 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Net cash flow generated by investment 294,875,845.36 -146,269,417.47 III. Cash flow generated by financing Cash received as investment Cash received as loans Cash received from bond placing Other financing –related ash received Sub-total of cash inflow from financing activities Cash to repay debts Cash paid as dividend, profit, or interests 2,078,789.36 1,974,653.15 Other cash paid for financing activities Sub-total of cash outflow due to financing activities 2,078,789.36 1,974,653.15 Net cash flow generated by financing -2,078,789.36 -1,974,653.15 IV. Influence of exchange rate alternation on cash and cash -2,550,457.20 -9,124,849.87 equivalents V.Net increase of cash and cash equivalents 251,623,934.34 -203,371,360.91 Add: balance of cash and cash equivalents at the beginning 654,407,180.33 of term 842,347,117.83 VI ..Balance of cash and cash equivalents at the end of 451,035,819.42 term 1,093,971,052.17 Legal Representative: Zheng Bin Person in charge of accounting:Zhao Jiamao Accounting Dept Leader: Jin Can II Adjustments to the Financial Statements 1. Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New Standards Governing Financial Instruments, Revenue or Leases Consolidated balance sheet In RMB Items December 31, 2018 January 1, 2019 Adjustment Current asset: Monetary fund 1,382,392,009.59 1,382,392,009.59 Transactional financial assets Not applicable 66,000,000.00 66,000,000.00 Financial assets measured at fair value with variations accounted into current income account Not applicable 23 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Notes receivable & account receivable 2,535,887,430.48 2,535,887,430.48 Including:Notes receivable 595,089,175.22 595,089,175.22 Account receivable 1,940,798,255.26 1,940,798,255.26 Prepayments 370,958,990.74 370,958,990.74 Other account receivable 32,552,458.76 32,552,458.76 Dividend receivable 16,557,292.60 16,557,292.60 Inventories 2,188,121,342.87 2,188,121,342.87 Other current assets 1,188,747,955.74 1,188,747,955.74 Total of current assets 7,698,660,188.18 7,764,660,188.18 66,000,000.00 Non-current assets: Available-for-sale financial assets 2,130,076,555.20 Not applicable -2,130,076,555.20 Long term share equity investment 8,221,439.29 Other equity instruments investment Not applicable 2,011,876,524.40 2,011,876,524.40 Other non-current Finance assets Not applicable 52,200,030.80 52,200,030.80 Fixed assets 783,740,928.49 783,740,928.49 Construction in progress 454,767,328.93 454,767,328.93 Intangible assets 279,740,756.49 279,740,756.49 Deferred tax assets 213,962,707.23 213,962,707.23 Total of non-current assets 3,870,509,715.63 3,804,509,715.63 -66,000,000.00 Total of assets 11,569,169,903.81 11,569,169,903.81 Current liabilities Short-term loans 139,600,000.00 139,600,000.00 Notes payable & account payable 1,350,583,381.53 1,350,583,381.53 Advance payment 2,582,234,158.36 2,582,234,158.36 Employees’ wage payable 86,390,955.29 86,390,955.29 Tax payable 62,405,200.62 62,405,200.62 Other account payable 36,904,303.01 36,904,303.01 Including:Interest payable 437,314.72 437,314.72 Non-current liability due within 1 year 100,100,000.00 100,100,000.00 Total of current liability 4,358,217,998.81 4,358,217,998.81 Non-current liabilities: Long-term loan 22,700,000.00 22,700,000.00 Long-term payable 474,876,451.26 474,876,451.26 Deferred income 44,675,128.30 44,675,128.30 Deferred income tax liability 244,169,946.57 244,169,946.57 24 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Total non-current liabilities 786,421,526.13 786,421,526.13 Total of liability 5,144,639,524.94 5,144,639,524.94 Owners’ equity Share capital 754,010,400.00 754,010,400.00 Capital reserves 151,684,419.65 151,684,419.65 Other comprehensive income 1,377,168,522.74 1,377,168,522.74 Special reserve 621,112,807.78 621,112,807.78 Surplus reserves 3,082,544,107.52 3,082,544,107.52 Retained profit 6,007,540,929.16 6,007,540,929.16 Total of owner’s equity belong to the parent 416,989,449.71 416,989,449.71 company Minority shareholders’ equity 6,424,530,378.87 6,424,530,378.87 Total of owners’ equity 11,569,169,903.81 11,569,169,903.81 Total of liabilities and owners’ equity 11,569,169,903.81 11,569,169,903.81 Parent Company Balance Sheet In RMB Items December 31, 2018 January 1, 2019 Adjustment Current asset: Monetary fund 877,357,020.98 877,357,020.98 Transactional financial assets Not applicable 66,000,000.00 66,000,000.00 Financial assets measured at fair value with variations accounted into Not applicable current income account Notes receivable & account 1,676,913,196.88 1,676,913,196.88 receivable Including:Notes receivable 302,284,986.43 302,284,986.43 Account receivable 1,374,628,210.45 1,374,628,210.45 Prepayments 208,498,421.20 208,498,421.20 Other account receivable 19,984,760.06 19,984,760.06 Dividend receivable 16,557,292.60 16,557,292.60 Inventories 1,584,030,951.83 1,584,030,951.83 Other current assets 890,000,000.00 890,000,000.00 Total of current assets 5,256,784,350.95 5,322,784,350.95 66,000,000.00 Non-current assets: 25 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Available-for-sale financial assets 2,090,631,297.62 Not applicable -2,090,631,297.62 Long term share equity investment 502,919,378.03 502,919,378.03 Other equity instruments investment Not applicable 2,011,876,524.40 2,011,876,524.40 Other non-current Finance assets Not applicable 12,754,773.22 12,754,773.22 Fixed assets 448,890,495.75 448,890,495.75 Construction in progress 142,310,055.48 142,310,055.48 Intangible assets 165,734,347.73 165,734,347.73 Deferred income tax assets 163,871,631.81 163,871,631.81 Total of non-current assets 3,514,357,206.42 3,448,357,206.42 -66,000,000.00 Total of assets 8,771,141,557.37 8,771,141,557.37 Current liabilities Notes payable & Account payable 654,853,099.86 654,853,099.86 Advance payment 1,877,069,335.29 1,877,069,335.29 Employees’ wage payable 43,332,523.01 43,332,523.01 Tax payable 37,809,874.53 37,809,874.53 Other account payable 24,708,959.22 24,708,959.22 Including:Interest payable 212,010.69 212,010.69 Dividend payable 0.00 0.00 Non-current liability due within 1 100,000,000.00 100,000,000.00 year Total of current liability 2,737,773,791.91 2,737,773,791.91 Non-current liabilities: Long-term payable 264,512,388.24 264,512,388.24 Deferred income 41,944,793.30 41,944,793.30 Deferred income tax liability 244,169,946.57 244,169,946.57 Total non-current liabilities 550,627,128.11 550,627,128.11 Total of liability 3,288,400,920.02 3,288,400,920.02 Owners’ equity Share capital 754,010,400.00 754,010,400.00 Capital reserves 138,953,250.09 138,953,250.09 Other comprehensive income 1,377,784,111.74 1,377,784,111.74 Special reserve 602,356,402.65 602,356,402.65 Surplus reserves 2,602,026,967.56 2,602,026,967.56 Retained profit 5,482,740,637.35 5,482,740,637.35 Total of owners’ equity 8,771,141,557.37 8,771,141,557.37 26 Hangzhou Steam Turbine Co., Ltd. The First Quarterly Report 2019(Full text) Total of liabilities and owners’ equity 8,771,141,557.37 8,771,141,557.37 2. Retrospective Restatement of Previous Comparative Data due to the First Execution of any New Standards Governing Financial Instruments or Leases Not applicable III. Auditor’ report Is the First Quarterly Report be audited? The First Quarterly report is not audited. Hangzhou Steam Turbine Co., Ltd. Chairman of the Board: Zheng Bin April 27,2019 27