2018 the First Quarter Report Main Body of Yantai Changyu Pioneer Wine Co. Ltd. Shares Code: 000869. 200869 Shares Abbreviation: Changyu A、Changyu B Notice No.: 2018-Final02 Yantai Changyu Pioneer Wine Co. Ltd. 2018 the First Quarter Report I. Important Notice The board of directors,the board of supervisors,directors, supervisors & senior managers of the Company collectively and individually accept full responsibility for the truthfulness, accuracy and completeness of the information contained in this report and confirm that to the best of their knowledge and belief there are no unfaithful facts, significant omissions or misleading statements. All directors attended the meeting for deliberating this quarter report. Mr. Zhou Hongjiang (Chairman of the Company), Mr. Jiang Jianxun (Chief Financial Officer) and Mr. Jiang Jianxun (Financial Director) assure the truthfulness, accuracy and completeness of the financial report in the quarter report. 1 2018 the First Quarter Report Main Body of Yantai Changyu Pioneer Wine Co. Ltd. II、Corporate Information 1. Key accounting data and financial indicators Whether the Company makes retroactive adjustments or restates the accounting data of previous fiscal years. □ Yes V No The same period of More or less than last Item The report period last year year (%) Business income (CNY) 1,804,057,976.00 1,896,586,469.00 -4.88% Net profit attributed to the shareholders of the listed 479,444,238.00 516,634,494.00 -7.20% company (CNY) Net profit attributed to the shareholders of the listed 466,181,564.00 512,684,945.00 -9.07% company after deducting the irregular profit and loss (CNY) Net cash flows from the 507,263,964.00 384,358,508.00 31.98% operating activities (CNY) Basic earnings per share 0.70 0.75 -6.67% (CNY) Diluted earnings per share 0.70 0.75 -6.67% (CNY) Weighted average for earning 5.24% 6.10% -0.86% rate of the net assets The end of the More or less than last The end of last year report period year (%) Total assets (CNY) 13,134,043,590.00 12,536,755,208.00 4.76% Net Assets attributed to the shareholders of the listed 9,380,239,163.00 8,906,342,299.00 5.32% company (CNY) Details of irregular profit and loss V Yes □ No Unit:CNY From beginning of year Item Explanation to end of report period Gain on disposal of non-current assets, including 84,719.00 the reversal of accrued impairment provision Government grants credited in profit and loss (except for those recurring government grants that are closely related to the entity's operation, 16,861,473.00 in line with related regulations and have proper basis of calculation) Other non-operating income and expenses 525,389.00 Less: Income tax effect 4,252,831.00 2 2018 the First Quarter Report Main Body of Yantai Changyu Pioneer Wine Co. Ltd. Minority interests effect(after-tax) -43,924.00 Total 13,262,674.00 -- The reasons shall be made clear and definitely as to the irregular profit and loss that the Company has defined by virtue of the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Irregular Profit and Loss and as to regarding the irregular profit and loss as recurrent profit and loss as specified in the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Irregular Profit and Loss. □Available V Not available There is no situation regarding the non-recurring profit and loss as defined and specified in the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Non-recurring Profit and Loss as recurrent profit and loss. 2. The total number of shareholders and top 10 shareholders at the end of the report period 1) The number of the common shareholders and preferred shareholders with recovered voting power as well as the shareholding of top 10 shareholders Unit: share 44,606 Total number of 0 Total number of common preferred shareholders at the end of report shareholders with recov period ered voting power at the end of report period The top 10 common shareholders Number Pledged or Character of Percentage of frozen Name of Shareholders Shares held shareholders (%) restricted Share Amo shares status unt Domestic non- 50.40% 345,473,856 YANTAI CHANGYU GROUP state-owned 0 -- 0 COMPANY LIMITED legal person Foreign legal 3.08% 21,090,219 GAOLING FUND,L.P. 0 -- 0 person CHINA SECURITIES FINANCE State-owned 2.28% 15,638,655 0 -- 0 CORP legal person BBH BOS S/A FIDELITY FD - Foreign legal 2.22% 15,241,826 0 -- 0 CHINA FOCUS FD person GUOTAI JUNAN Foreign legal 1.00% 6,828,497 SECURITIES(HONGKONG) person 0 -- 0 LIMITED SHENWAN HONGYUAN Foreign legal 0.96% 6,554,654 SECURITIES(HONGKONG) person 0 -- 0 LIMITED FIDELITY PURITAN TRUST: Foreign legal 0.89% 6,100,762 FIDELITY SERIES INTRINSIC person 0 -- 0 OPPORTUNITIES FUND UNION LIFE INSURANCE CO., Domestic non- 0.79% 5,446,039 LTD --- DIVIDEND --- state-owned 0 -- 0 PERSONAL INSURANCE legal person 3 2018 the First Quarter Report Main Body of Yantai Changyu Pioneer Wine Co. Ltd. DIVIDEND CENTRAL HUIJIN ASSET State-owned 0.69% 4,761,200 0 -- 0 MANAGEMENT LTD. legal person VANGUARD EMERGING Foreign legal 0.55% 3,788,487 MARKETS STOCK INDEX person 0 -- 0 FUND The top 10 common shareholders with unrestricted shares Name of Shareholders Number of Type of share unrestricted Type of Amount shares held share YANTAI CHANGYU GROUP COMPANY LIMITED 345,473,856 A share 345,473,856 GAOLING FUND,L.P. 21,090,219 B share 21,090,219 CHINA SECURITIES FINANCE CORP 15,638,655 A share 15,638,655 BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 15,241,826 B share 15,241,826 GUOTAI JUNAN SECURITIES(HONGKONG) B share 6,828,497 6,828,497 LIMITED SHENWAN HONGYUAN SECURITIES(HONGKONG) B share 6,554,654 6,554,654 LIMITED FIDELITY PURITAN TRUST: FIDELITY SERIES B share 6,100,762 6,100,762 INTRINSIC OPPORTUNITIES FUND UNION LIFE INSURANCE CO., LTD --- DIVIDEND -- A share 5,446,039 5,446,039 -PERSONAL INSURANCE DIVIDEND CENTRAL HUIJIN ASSET MANAGEMENT LTD. 4,761,200 A share 4,761,200 VANGUARD EMERGING MARKETS STOCK B share 3,788,487 3,788,487 INDEX FUND Among the top 10 shareholders, Yantai Changyu Group The explanation for the associated Company Limited has no associated relationship or accordant relationship and accordant action action relationship with the other 9 listed shareholders, and the of the top 10 shareholders relationship among the other shareholders is unknown. Explanation for the top 10 common shareholders who No involved in financing activities and stock trading business(if any) Whether or not the Company’s top 10 common shareholders and top 10 common shareholders with unrestricted shares promise to buy back trading during the report period □ Yes √ No There are no top 10 common shareholders and top 10 common shareholders with unrestricted shares in the Company promise to buy back trading during the report period. 2) The total number of the preferred shareholders and top 10 preferred shareholders at the end of the report period □Available V Not available 4 2018 the First Quarter Report Main Body of Yantai Changyu Pioneer Wine Co. Ltd. III Major Issue 1. Great changes and reasons on main accountant data and financial index √Available □Not available Compared the end of the report period with the beginning of the report period: notes receivable increases by 109.5%, mainly due to the growth on bank acceptances; advance payment increases by 93.91%, mainly due to the growth of advances payment for raw material procurement; interest receivable increases by 294.4%, mainly due to the growth of bank term deposits; constructions in progress increases by 12.41%, mainly due to the increase in cumulative investment in technological transformation projects; goodwill increases by 28.02%, mainly due to the Company’s acquisition of goodwill generated by Kilikanoon Estate Pty Ltd in Australia; deposits received increases by 35.28%, mainly due to growth of advances from customers; non-current liabilities due within one year increased by 20.11%, mainly due to the transfer of long-term accounts payable. Compared the same period with last year: operating revenue decreases by 4.88%, although cash received related to sell products and supply labor service in the report period increases by 6.84%, it is affected by those factors including the adjustment of Company’s marketing system, payment and settlement methods of partial marketing expenses, commissioning of new product lines being not completed, as well as product optimization. Meanwhile the Company takes actions in improving purchase mode of partial products, strengthening order drive and small order for distributors etc. that makes slight reduction in sales revenue confirmed by accounting standard; sales expense decreases by 4.17%, mainly owing to decrease in advertising expense; administrative expense increases by 19.8% mainly owing to increase in depreciation and intangible assets amortization; financial expense decreases by 19.17% mainly owing that, with the use of partial bank loan into investment project construction, corresponding loan interest is included into the cost of fixed assets; net profit attributable to parent company decreases by 7.2% mainly owing to decrease in income; Other cash paid related to operating activities increases by 27.27% mainly owing to payment of marketing expense exemplified as advertising expense. The judgment of Company is that with the reformation of organizational structure, marketing policies and marketing system are gradually adjusted into position; the construction of marketing team and incentive measures are further perfected; product structure is constantly optimized; new product lines are ready to complete commissioning, the Company will enter new step of steady development in the future and promote the growth of operating performance. 2. Analysis explanation of the major issue’s process, its influence and the solution □Available V Not available 5 2018 the First Quarter Report Main Body of Yantai Changyu Pioneer Wine Co. Ltd. 3. The commitments that the Company’s actual controllers, shareholders, related parties, purchasers, the Company and other related parties do not implement completely exceeding the time limit within report period √available □not available Commitment Commitment Commitment Commitment Commitment Commitments Implementation Party Type content time period Commitments at - - share reform Commitments made in acquisition - - - - report or equity changes report Commitments at asset - - - - restructuring Yantai Solve Changyu horizontal Non-horizontal Has been Group Co., competition 1997.05.18 Permanent competition performing Ltd Clear the According to purpose of "Trademark brand royalty License Contract", the Company will pay trademark Commitments at royalty for the the initial public "Changyu"produ offering or Yantai cts of Yantai refinancing Changyu Changyu Group Has been Group Co., 1997.05.18 Permanent Co., Ltd every performing Ltd year, Yantai Changyu Group Co., Ltd will use trademark to advertise Changyu trademarks and the Contract products. Equity incentive commitments Commitments made to the minority - - - - shareholders of the Company 6 2018 the First Quarter Report Main Body of Yantai Changyu Pioneer Wine Co. Ltd. Commitment under timely Yes implementation or not For commitments that exceed the time limit and are not completed, specific reasons of not No completing the implementation and the next step 4. Forecast on the operating performance in the period from January to June of 2018 Warning and explanation for the estimation on the possible loss of cumulative net profit in the period from the beginning of this year to the end of the next report period or the great change comparing with same period of last year. □Available V Not available 5. The situation of security investment □Available V Not available There is no security investment during the report period. 6. The situation of derivative investment □Available V Not available There is no derivative investment during the report period. 7. The activities registration form of receptions, communication and interview etc. during the report period □Available V Not available There are no activities of receptions, communication and interview etc. during the report period. 8. The situation of illegal external guarantee □Available V Not available There is no illegal external guarantee during the report period. 9. The situation of non-operating fund occupation of controlling shareholders and related parties □Available V Not available There is no non-operating fund occupation of controlling shareholders and related parties during the report period. Yantai Changyu Pioneer Wine Co., Ltd. Board of Directors 27th April 2018 7