Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Stock Code: 603609 Stock Abbreviation (English): Wellhope Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report 1 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Contents Section I Important Statements................................................................................ 3 Section II Company Information ................................................................................ 4 Section III Important Disclosures ................................................................................ 8 Section IV Appendix .................................................................................................. 10 2 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Section I Important Statements I. The Board of Directors, Supervisory Board, Directors, Supervisors and Senior Management of Liaoning Wellhope hereby warrant that there are no false representations, misleading statements or material omissions in this third quarter report, jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the contents of this report. II. All the Board Directors attended the board meeting to deliberate the third quarter report. III. The Company's Chairman Jin Weidong and the Director of internal audit Zhang Wenliang warrant the truthfulness, accuracy and completeness of the information presented in the financial statements in this quarterly report. IV. The third quarter report is unaudited. V. This third quarter report has been issued in both Chinese and English versions. In case there is any discrepancy or inconsistency between the two versions, the Chinese version shall prevail. The disclosed Chinese version of 2019 Third Quarter Report can be obtained at: www.sse.com.cn. 3 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Section II Company Information I. Key financial figures Unit: yuan Currency: RMB Change compared with Item September 30th, 2019 December 31st, 2018 the end of prior year % Total assets 8,829,221,113.87 6,930,694,562.43 27.39 Net assets attributable to 5,205,327,776.91 3,851,915,758.64 35.14 the shareholders of the Company Item January-September, 2019 January-September, 2018 Year-on-year change % Net cash flow from operating 582,911,553.62 278,295,703.02 109.46 activities Item January-September, 2019 January-September, 2018 Year-on-year change % Operating 12,743,225,876.96 11,479,083,463.30 11.01 revenue Net profit attributable to 713,087,990.71 405,271,572.95 75.95 the shareholders of the Company Net profit attributable to the shareholders of the Company 704,761,464.34 398,265,406.12 76.96 deducting non-recurring gains and losses Weighted Increasing 4.14 average return 15.57 11.43 on equity % percentage points Basic earnings per share (yuan 0.80 0.49 63.27 per share) Diluted earnings per share (yuan 0.80 0.49 63.27 per share) 4 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Non-recurring gains and losses Unit: yuan Currency: RMB Item July-September, 2019 January-September, 2019 Gains or losses on disposal of non-current 3,768,699.05 -363,117.50 assets Government grants charged to current gains or losses (excl. the government grants that are closely related to the Company's ordinary course of business and gained 3,547,059.43 19,792,699.84 constantly at fixed quotas or amounts as per certain standards based on the state polices) Gains or losses on fair value changes in holding the trading financial assets and liabilities as well as derivative financial assets and liabilities, and investment income from disposal of trading financial 2,577,987.76 2,093,791.87 assets and liabilities, derivative financial assets and liabilities as well as other debt investment (excl. the effective portion of hedges that arise in the Company's ordinary course of business) Non-operating income and expense other -951,757.29 -13,425,746.89 than those described above Non-controlling interests effects (after-tax) 327,744.32 4,599,140.37 Income tax effects -1,655,046.60 -4,370,241.32 Total 7,614,686.67 8,326,526.37 5 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report II. The number of shareholders, top ten shareholders and top ten shareholders holding unrestricted shares as at the end of the reporting period Unit: share The number of shareholders 26,513 Shareholding of top ten shareholders Total shares Pledged or Frozen Name of Restricted Nature of held at the % shareholder shares held Status Shares shareholder period-end Domestic Jin Weidong 149,549,498 16.21 3,062,117 Pledged 56,270,000 natural person DE HEUS Foreign 82,303,939 8.92 2,296,587 Non MAURITIUS corporation Domestic Ding Yunfeng 81,929,558 8.88 1,531,058 Pledged 49,450,000 natural person Domestic Shao Caimei 54,559,878 5.92 Pledged 16,900,000 natural person Domestic Wang Fengjiu 50,084,602 5.43 Pledged 10,260,000 natural person Domestic Zhang Tiesheng 48,360,000 5.24 Pledged 6,600,000 natural person Shenyang Wellhope Heli Domestic 48,360,000 5.24 Non Investment Co., corporation Ltd. Domestic Wang Zhongtao 47,916,529 5.20 765,529 Pledged 8,140,000 natural person Sinosafe Assets Management- Industrial and Commercial Bank of China-Sinosafe Assets 29,527,559 3.20 29,527,559 Unknown Other Management Stably Increasing Profit No. 12 Collection Asset Management Product Generali China Asset Management- China Minsheng Banking Corp- Generali China 19,685,039 2.13 19,685,039 Unknown Other Asset-Non-public Offering Selection No. 103 Asset Management Product 6 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Top ten shareholders holding unrestricted shares Shares by type Name of shareholder Unrestricted shares held Type Shares RMB common Jin Weidong 146,487,381 146,487,381 stock RMB common Ding Yunfeng 80,398,500 80,398,500 stock RMB common DE HEUS MAURITIUS 80,007,352 80,007,352 stock RMB common Shao Caimei 54,559,878 54,559,878 stock RMB common Wang Fengjiu 50,084,602 50,084,602 stock RMB common Zhang Tiesheng 48,360,000 48,360,000 stock Shenyang Wellhope RMB common 48,360,000 48,360,000 Heli Investment Co., Ltd. stock RMB common Wang Zhongtao 47,151,000 47,151,000 stock National Council for Social RMB common 12,000,000 12,000,000 Security Fund China 503 Portfolio stock RMB common Gao Junsong 10,343,772 10,343,772 stock 1. Jin Weidong, Ding Yunfeng, Wang Fengjiu, Shao Caimei and Relationship of above Wang Zhongtao act in concert; shareholders or statement made 2. Jin Weidong is the actual controller of Shenyang Wellhope Heli by the parties acting in concert Investment Co., Ltd. 3. No relation or concerted action is found among other shareholders. 7 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Section III Important Disclosures I. Changes of major items in the financial statements Item September 30th, 2019 January 1st, 2019 Change Explanation Cash received from Monetary capital 1,609,685,128.42 928,902,753.06 73.29% non-public issuing stock The position of Derivative financial 4,890,492.40 2,042,527.60 139.43% derivative financial assets assets increased Honor of notes and Notes receivable 2,122,085.80 13,611,778.44 -84.41% letter of credit decreased Newly increased accounts receivable Accounts receivable 722,385,769.25 397,891,678.23 81.55% during the settlement period Prepayment for raw Prepayments 263,533,919.32 185,899,348.53 41.76% materials increased Newly increased other Other equity equity instrument instrument 4,547,809.52 3,197,809.52 42.22% investment in the investment current period Completed Construction in constructions that 170,941,517.37 255,719,188.30 -33.15% progress transferred to fixed assets decreased Advance payment for Other non-current 437,311,341.21 197,497,688.18 121.43% long-lived assets and assets fees to farms increased Productive Breeding broilers and 59,836,261.46 30,484,794.88 96.28% biological assets pigs increased Accounts payable related to commodities Accounts payable 811,158,972.23 572,729,779.31 41.63% purchasing and expenses increased Corporate income tax Tax payable 37,842,143.05 28,744,792.72 31.65% payable increased Long-term borrowings Non-current and long-term payables liabilities due within 52,987,170.91 32,999,999.96 60.57% due within one year one year increased Long-term Long-term borrowings 42,500,000.00 118,500,000.00 -64.14% borrowings from bank decreased The reclassification of long-term payables due Long-term payables 14,994,779.23 23,345,833.38 -35.77% within one year decreased Premium generated by Capital reserve 874,272,800.08 153,824,536.37 468.36% non-public issuing stock Exchange differences on translation of foreign Other Not currency financial comprehensive 8,020,686.13 -1,798,486.75 Applicable statements that income calculated under equity method increased 8 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Item January-September, 2019 January-September, 2018 Change Explanation The government grants that are closely related Other income 4,389,415.74 2,201,587.35 99.38% to the Company's ordinary course of business increased Income from investments in Income from 346,071,893.42 197,988,419.80 74.79% associated companies investment and joint ventures increased Gain or loss from Floating gain or loss of changes in fair -874,910.00 926,860.00 -194.40% futures decreased value Withdrawing of Assets impairment Not provision for -5,409,240.15 -8,514,579.41 loss Applicable obsolete stock increased Gain or loss from fixed Gain or loss from Not -566,068.09 -862,349.93 assets disposal assets disposal Applicable increased Non-operating The government grants 18,299,191.94 10,690,785.47 71.17% income increased Non-operating Extraordinary loss 20,913,066.65 5,603,955.67 273.18% expenditure increased Cash received from Net cash flow from selling commodities and 582,911,553.62 278,295,703.02 109.46% operating activities providing labor services increased Net cash flow from Not Cash paid for asset -549,750,402.35 -382,923,285.99 investing activities Applicable acquisition increased Cash received from Net cash flow from Not 616,139,019.52 -85,032,946.74 non-public issuing stock financing activities Applicable in the current year II. Net profit in 2019 is estimated to change significantly compared with the same period of prior year It is anticipated that the white feather broiler market in the fourth quarter will maintain a high prosperity, the Company's production scale of broiler raising and slaughtering will be further expanded. It is estimated that the net profit attributable to the shareholders of the Company in 2019 will increase substantially compared with the same period of prior year. The actual financial data shall be subject to the Company's 2019 annual report and other announcements. Company Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. Legal representative Jin Weidong Date October 25th, 2019 9 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Section IV Appendix I. Financial statement Consolidated Balance Sheet September 30th, 2019 Liaoning Wellhope Unit: yuan Item September 30th, 2019 December 31st, 2018 Current assets: Monetary capital 1,609,685,128.42 928,902,753.06 Derivative financial assets 4,890,492.40 2,042,527.60 Notes receivable 2,122,085.80 13,611,778.44 Accounts receivable 722,385,769.25 397,891,678.23 Prepayments 263,533,919.32 185,899,348.53 Other receivables 111,108,994.19 98,997,213.04 including: Interest receivable Dividends receivable 21,741,783.34 5,481,783.34 Inventory 1,330,584,026.65 1,410,869,192.26 Other current assets 120,994,671.19 118,636,045.77 Total current assets 4,165,305,087.22 3,156,850,536.93 Non-current assets: Available-for-sale financial assets 3,680,000.00 Long-term equity investment 1,720,384,804.80 1,354,820,455.99 Other equity instrument investment 4,547,809.52 Fixed assets 1,874,785,547.90 1,516,702,438.29 Construction in progress 170,941,517.37 255,719,188.30 Productive biological assets 59,836,261.46 30,484,794.88 Intangible assets 213,075,369.97 206,387,940.29 Goodwill 290,425.67 290,425.67 Long-term prepaid expenses 154,154,013.17 177,903,367.82 Deferred income tax assets 28,588,935.58 30,357,726.08 Other non-current assets 437,311,341.21 197,497,688.18 Total non-current assets 4,663,916,026.65 3,773,844,025.50 Total assets 8,829,221,113.87 6,930,694,562.43 Current liabilities: Short-term borrowings 1,411,012,465.70 1,347,690,168.49 Accounts payable 811,158,972.23 572,729,779.31 Advance receipt 201,234,394.23 161,173,916.67 10 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Payroll payable 44,193,611.42 49,731,930.35 Tax payable 37,842,143.05 28,744,792.72 Other payables 365,417,736.77 309,537,195.12 including: Interest payable 1,312,168.75 1,784,257.05 Dividends payable 1,434,027.14 526,000.00 Non-current liabilities due within one year 52,987,170.91 32,999,999.96 Total current liabilities 2,923,846,494.31 2,502,607,782.62 Non-current liabilities: Long-term borrowings 42,500,000.00 118,500,000.00 Long-term payable 14,994,779.23 23,345,833.38 Deferred income 21,027,395.00 20,252,967.41 Total non-current liabilities 78,522,174.23 162,098,800.79 Total liabilities 3,002,368,668.54 2,664,706,583.41 Owners' equity(or shareholders' equity): Paid-up capital (or share capital) 922,304,396.00 845,751,469.00 Capital reserve 874,272,800.08 153,824,536.37 deduct: treasury stock 70,688,750.00 70,688,750.00 Other comprehensive income 8,020,686.13 -1,316,942.00 Surplus reserves 272,882,920.19 272,882,920.19 Undistributed profits 3,198,535,724.51 2,651,462,525.08 Total equity attributable to the owners of 5,205,327,776.91 3,851,915,758.64 parent company Non-controlling interests 621,524,668.42 414,072,220.38 Total owners' equity (or shareholders' 5,826,852,445.33 4,265,987,979.02 equity) Total liabilities and owners' equity (or 8,829,221,113.87 6,930,694,562.43 shareholders' equity) 11 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Consolidated Balance Sheet of Parent Company September 30th, 2019 Unit: yuan Item September 30th, 2019 December 31st, 2018 Current assets: Monetary capital 1,144,744,432.03 750,589,871.09 Derivative financial assets 3,363,265.40 2,042,527.60 Accounts receivable 31,973,440.68 16,033,809.05 Prepayments 1,831,374.99 2,278,798.85 Other receivables 1,484,068,536.13 869,671,230.01 including: Interest receivable Dividends receivable 30,365,270.58 15,225,270.58 Inventory 29,524,950.94 41,986,504.36 Total current assets 2,695,506,000.17 1,682,602,740.96 Non-current assets: Available-for-sale financial assets 3,000,000.00 Long-term equity investment 3,759,934,279.54 3,285,783,087.96 Other equity instrument investment 4,039,369.92 Fixed assets 134,591,950.20 73,509,615.43 Construction in progress 1,095,059.48 56,425,656.79 Intangible assets 15,642,535.81 16,169,866.87 Long-term prepaid expenses 751,060.43 854,845.30 Deferred income tax assets 9,578,983.89 9,060,127.91 Total non-current assets 3,925,633,239.27 3,444,803,200.26 Total assets 6,621,139,239.44 5,127,405,941.22 Current liabilities: Short-term borrowings 1,070,000,000.00 1,075,000,000.00 Accounts payable 36,245,770.92 7,636,692.77 Advance receipt 1,027,833.81 2,690,153.80 Payroll payable 1,651,664.39 2,749,116.65 Tax payable 3,642,935.49 4,166,334.74 Other payables 1,472,570,828.20 1,026,382,418.43 including: Interest payable 1,312,168.75 1,601,798.61 Dividends payable Non-current liabilities due within one year 34,000,000.00 20,000,000.00 Total current liabilities 2,619,139,032.81 2,138,624,716.39 Non-current liabilities: Long-term borrowings 42,000,000.00 118,000,000.00 Deferred income 10,015,625.00 7,425,000.00 12 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Deferred income tax liabilities 94,650.00 Total non-current liabilities 52,110,275.00 125,425,000.00 Total liabilities 2,671,249,307.81 2,264,049,716.39 Owners' equity(or shareholders' equity): Paid-up capital (or share capital) 922,304,396.00 845,751,469.00 Capital reserves 870,289,578.29 160,705,065.92 deduct: treasury stock 70,688,750.00 70,688,750.00 Other comprehensive income 7,216,008.84 -1,305,935.62 Surplus reserves 272,882,920.19 272,882,920.19 Undistributed profits 1,947,885,778.31 1,656,011,455.34 Total owners' equity (or shareholders' 3,949,889,931.63 2,863,356,224.83 equity) Total liabilities and owners' equity (or 6,621,139,239.44 5,127,405,941.22 shareholders' equity) 13 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Consolidated Income Statement January-September, 2019 Liaoning Wellhope Unit: yuan July-September, July-September, January-September, January-September, Item 2019 2018 2019 2018 1. Total operating revenue 5,015,825,872.21 4,628,867,760.81 12,743,225,876.96 11,479,083,463.30 including: Operating revenue 5,015,825,872.21 4,628,867,760.81 12,743,225,876.96 11,479,083,463.30 2. Total operating costs 4,690,833,834.78 4,432,517,695.01 12,126,002,964.90 11,118,921,432.10 including: 4,433,516,820.01 4,212,766,453.17 11,419,337,434.95 10,510,246,761.25 Operating costs Taxes and surtaxes 6,525,828.70 6,081,909.91 19,224,556.04 17,841,100.95 Selling expenses 149,408,169.31 118,948,537.14 389,398,894.38 329,650,050.81 Administrative expenses 64,201,377.00 52,225,577.05 191,117,342.17 155,830,999.54 R&D expenses 17,202,763.02 16,452,748.36 47,224,108.89 46,224,588.44 Financial expenses 19,978,876.74 26,042,469.38 59,700,628.47 59,127,931.11 including: Interest expenses 19,456,681.91 17,684,031.56 59,668,390.61 54,233,446.14 Interest income -3,115,573.29 -979,741.56 -5,756,801.45 -3,881,601.66 add: Other income 2,196,465.64 1,716,287.35 4,389,415.74 2,201,587.35 Income from investment 158,004,862.27 105,248,253.41 346,071,893.42 197,988,419.80 including: Income from investments in associated 151,912,887.19 104,370,812.63 338,108,829.04 193,521,407.95 companies and joint ventures Gain or loss from changes in fair -705,710.00 91,400.00 -874,910.00 926,860.00 value Credit impairment loss -9,144,048.97 -14,437,412.66 -27,678,451.02 -39,469,148.47 Assets impairment loss -5,140,167.72 2,176,821.66 -5,409,240.15 -8,514,579.41 Gain or loss from assets -520,708.86 -23,354.80 -566,068.09 -862,349.93 disposal 3. Operating profit 469,682,729.79 291,122,060.76 933,155,551.96 512,432,820.54 add: Non-operating income 2,484,261.96 2,125,220.64 18,299,191.94 10,690,785.47 deduct: Non-operating 2,590,380.06 1,309,545.58 20,913,066.65 5,603,955.67 expenditure 4. Pretax profit 469,576,611.69 291,937,735.82 930,541,677.25 517,519,650.34 deduct: Income tax expense 34,337,932.36 17,291,819.98 65,556,455.05 50,441,413.36 5. Net profit 435,238,679.33 274,645,915.84 864,985,222.20 467,078,236.98 Net profit from continuing 435,238,679.33 274,645,915.84 864,985,222.20 467,078,236.98 operations 14 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report A. Net profit attributable to the shareholders of parent 354,079,351.53 240,912,462.24 713,087,990.71 405,271,572.95 company B. Non-controlling interests 81,159,327.80 33,733,453.60 151,897,231.49 61,806,664.03 income 6. Other comprehensive 5,964,430.88 3,147,862.52 10,626,389.70 -1,097,710.29 income, net of tax Attributable to owners of 5,874,088.31 3,147,862.52 9,819,172.88 -1,097,710.29 parent company a. Other comprehensive income that cannot be reclassified into gains or losses b. Other comprehensive income that will be reclassified 5,874,088.31 3,147,862.52 9,819,172.88 -1,097,710.29 into the gains or losses (a) Other comprehensive income that can be transferred 5,763,669.61 3,147,862.52 8,832,574.54 -1,097,710.29 in gains or losses under the equity method (b) Exchange differences on translation of foreign currency 110,418.70 986,598.34 financial statements Attributable to non-controlling 90,342.57 807,216.82 interests 7. Total comprehensive income 441,203,110.21 277,793,778.36 875,611,611.90 465,980,526.69 Attributable to the owners of 359,953,439.84 244,060,324.76 722,907,163.59 404,173,862.66 parent company Attributable to non-controlling 81,249,670.37 33,733,453.60 152,704,448.31 61,806,664.03 interests 8. EPS a. Basic earnings per share 0.39 0.29 0.80 0.49 (yuan per share) b. Diluted earnings per share 0.39 0.29 0.80 0.49 (yuan per share) 15 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Consolidated Income Statement of Parent Company January-September, 2019 Unit: yuan July-September, July-September, January-September, January-September, Item 2019 2018 2019 2018 1. Total operating revenue 196,512,399.27 169,196,467.35 458,252,021.02 476,932,368.06 Deduct: Operating costs 131,084,785.29 112,084,564.58 305,136,741.09 319,893,020.91 Taxes and surtaxes 367,562.19 371,820.43 1,180,372.80 1,137,317.46 Selling expenses 3,050,709.07 4,168,046.08 10,301,948.92 10,773,210.49 Administrative expenses 8,319,467.74 3,273,186.47 24,824,924.67 15,686,590.29 R&D expenses 4,946,284.85 8,634,108.47 15,250,620.64 19,626,528.13 Financial expenses 6,015,985.79 6,636,485.68 20,980,959.39 20,128,547.11 including: Interest expenses 14,418,872.89 13,325,163.31 43,531,437.16 41,144,052.39 Interest income -8,416,479.52 -6,702,416.27 -22,709,313.34 -21,120,507.58 add: Other income 1,225,625.00 1,349,375.00 Income from investment 174,957,553.38 111,079,089.08 377,677,888.29 202,759,510.74 including: Income from investments in associated 152,387,386.72 104,279,261.79 338,066,397.52 193,003,760.29 companies and joint ventures Gain or loss from changes in fair -135,780.00 91,400.00 631,000.00 926,860.00 value Credit impairment loss 2,992,205.06 983,608.03 -390,164.84 -19,940,097.74 Assets impairment loss -6,150,602.09 Gain or loss from assets 8,921.74 -22,077.70 disposal 2. Operating profit 221,776,129.52 146,182,352.75 459,822,474.26 267,282,824.58 add: Non-operating income 1,070.00 570,000.00 10,629,590.00 3,342,106.50 deduct: Non-operating 15,000.00 600,000.00 1,341,100.00 600,058.28 expenditure 3. Pretax profit 221,762,199.52 146,152,352.75 469,110,964.26 270,024,872.80 deduct: Income tax expense 6,886,203.87 2,925,154.03 11,221,850.01 7,164,044.08 4. Net profit 214,875,995.65 143,227,198.72 457,889,114.25 262,860,828.72 Net profit from continuing 214,875,995.65 143,227,198.72 457,889,114.25 262,860,828.72 operations 5. Other comprehensive 5,763,669.61 3,147,862.52 8,832,574.54 -1,097,710.29 income, net of tax a. Other comprehensive income that cannot be reclassified into gains or losses b. Other comprehensive income that will be reclassified into 5,763,669.61 3,147,862.52 8,832,574.54 -1,097,710.29 gains or losses (a) Other comprehensive income that can be transferred 5,763,669.61 3,147,862.52 8,832,574.54 -1,097,710.29 in gains or losses under the equity method 6. Total comprehensive income 220,639,665.26 146,375,061.24 466,721,688.79 261,763,118.43 16 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Consolidated Statement of Cash Flow January-September, 2019 Liaoning Wellhope Unit: yuan Item January-September, 2019 January-September, 2018 1. Cash flow from operating activities Cash received from selling commodities, 12,867,947,661.38 11,489,358,737.29 providing labor services Tax refunds 20,422,787.11 19,082,294.89 Cash received from other activities related to 56,208,041.93 60,725,550.46 operating Sub-total of cash inflow of operating activities 12,944,578,490.42 11,569,166,582.64 Cash paid for purchasing commodities and 11,276,295,939.90 10,362,295,276.16 receiving labor services Cash paid to and for employee 471,606,862.89 406,073,770.90 Tax payments 94,435,382.11 102,198,918.06 Cash paid to other activities related to operating 519,328,751.90 420,302,914.50 Sub-total of cash outflow of operating 12,361,666,936.80 11,290,870,879.62 activities Net cash flow from operating activities 582,911,553.62 278,295,703.02 2. Cash flow from investing activities Cash received from disinvestment 1,050,000.00 187,516.32 Cash received from return on investment 22,103,112.29 11,464,468.26 Net cash received from disposal of fixed assets, 1,267,093.00 1,179,134.92 intangible assets and other long-lived assets Net cash received from disposal of subsidiaries 194,529.44 522,233.92 and other business units Cash received from other activities related to 2,377,932.15 994,414.81 investment Sub-total of cash inflow of investing activities 26,992,666.88 14,347,768.23 Cash paid for acquiring and building fixed assets, 384,826,859.83 320,175,157.06 intangible assets and other long-lived assets Cash paid for investments 42,134,198.47 77,095,897.16 Net cash paid for acquiring subsidiaries and 113,573,868.96 other business units Cash paid to other activities related to 36,208,141.97 investment Sub-total of cash outflow of investing activities 576,743,069.23 397,271,054.22 Net cash flow from investing activities -549,750,402.35 -382,923,285.99 17 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report 3. Cash flow from financing activities Cash received from absorbing investments 850,192,738.50 7,570,000.00 including: Capital contributed by non-controlling 80,415,000.00 7,570,000.00 interests to subsidiaries Cash received from borrowings 1,204,498,455.68 1,060,990,000.00 Cash received from other activities related to 640,000.00 financing Sub-total of cash inflow of financing activities 2,055,331,194.18 1,068,560,000.00 Repayments of borrowings 1,205,540,041.67 1,022,300,000.00 Cash paid for distributing dividends, profits, or 227,218,147.63 131,292,946.74 paid for interests including: Dividends or profits paid by 4,420,306.88 1,895,000.00 subsidiaries to non-controlling interests Cash paid to other activities related to financing 6,433,985.36 activities Sub-total of cash outflow of financing activities 1,439,192,174.66 1,153,592,946.74 Net cash flow from financing activities 616,139,019.52 -85,032,946.74 4. Effect of foreign exchange rate fluctuations -3,773,741.25 250,822.26 on cash and cash equivalents 5. Net increase in cash and cash equivalents 645,526,429.54 -189,409,707.45 add: Opening balance of cash and cash 889,204,873.97 740,680,891.81 equivalents 6. Closing balance of cash and cash equivalents 1,534,731,303.51 551,271,184.36 18 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Consolidated Statement of Cash Flow of Parent Company January-September, 2019 Unit: yuan January-September, January-September, Item 2019 2018 1. Cash flow from operating activities Cash received from selling commodities, providing labor 436,047,078.54 457,034,069.76 services Cash received from other activities related to operating 245,362,412.47 291,578,942.04 Sub-total of cash inflow of operating activities 681,409,491.01 748,613,011.80 Cash paid for purchasing commodities and receiving labor 263,010,743.82 300,576,248.55 services Cash paid to and for employee 21,895,620.99 18,367,021.64 Tax payments 15,974,070.95 14,833,947.51 Cash paid to other activities related to operating 401,130,039.95 357,853,863.11 Sub-total of cash outflow of operating activities 702,010,475.71 691,631,080.81 Net cash flow from operating activities -20,600,984.70 56,981,930.99 2. Cash flow from investing activities Cash received from disinvestment 1,050,000.00 812,000.00 Cash received from return on investment 52,466,504.29 18,509,072.37 Net cash received from disposal of fixed assets, intangible 34,000.00 assets and other long-lived assets Net cash received from disposal of subsidiaries and other 4,000,001.00 business units Cash received from other activities related to investment 994,414.81 Sub-total of cash inflow of investing activities 57,550,505.29 20,315,487.18 Cash paid for acquiring and building fixed assets, intangible 9,465,370.42 17,925,156.39 assets and other long-lived assets Cash paid for investments 127,573,378.79 157,553,808.71 Cash paid to other activities related to investment 3,010,000.00 Sub-total of cash outflow of investing activities 140,048,749.21 175,478,965.10 Net cash flow from investing activities -82,498,243.92 -155,163,477.92 3. Cash flow from financing activities Cash received from absorbing investments 769,777,738.50 Cash received from borrowings 770,000,000.00 1,040,000,000.00 Sub-total of cash inflow of financing activities 1,539,777,738.50 1,040,000,000.00 Repayments of borrowings 837,000,000.00 1,002,000,000.00 Cash paid for distributing dividends, profits, or paid for 209,835,858.30 122,958,477.74 interests Sub-total of cash outflow of financing activities 1,046,835,858.30 1,124,958,477.74 Net cash flow from financing activities 492,941,880.20 -84,958,477.74 4. Effect of foreign exchange rate fluctuations on cash and 157.39 288.89 cash equivalents 5. Net increase in cash and cash equivalents 389,842,808.97 -183,139,735.78 add: Opening balance of cash and cash equivalents 740,891,873.25 525,941,409.05 6. Closing balance of cash and cash equivalents 1,130,734,682.22 342,801,673.27 19 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report II. Implementing new financial instrument standards, new income standards and new leasing standards at the beginning of the current year, the adjustment of some items in the financial statements Consolidated Balance Sheet Unit: yuan Currency:RMB Item December 31st, 2018 January 1st, 2019 Adjustment Current assets: Monetary capital 928,902,753.06 928,902,753.06 Derivative financial assets 2,042,527.60 2,042,527.60 Notes receivable 13,611,778.44 13,611,778.44 Accounts receivable 397,891,678.23 397,891,678.23 Prepayments 185,899,348.53 185,899,348.53 Other receivables 98,997,213.04 98,997,213.04 including: Interest receivable Dividends receivable 5,481,783.34 5,481,783.34 Inventory 1,410,869,192.26 1,410,869,192.26 Other current assets 118,636,045.77 118,636,045.77 Total current assets 3,156,850,536.93 3,156,850,536.93 Non-current assets: Available-for-sale financial assets 3,680,000.00 -3,680,000.00 Long-term equity investment 1,354,820,455.99 1,354,820,455.99 Other equity instrument investment 3,197,809.52 3,197,809.52 Fixed assets 1,516,702,438.29 1,516,702,438.29 Construction in progress 255,719,188.30 255,719,188.30 Productive biological assets 30,484,794.88 30,484,794.88 Intangible assets 206,387,940.29 206,387,940.29 Goodwill 290,425.67 290,425.67 Long-term prepaid expenses 177,903,367.82 177,903,367.82 Deferred income tax assets 30,357,726.08 30,357,726.08 Other non-current assets 197,497,688.18 197,497,688.18 Total non-current assets 3,773,844,025.50 3,773,361,835.02 -482,190.48 Total assets 6,930,694,562.43 6,930,212,371.95 -482,190.48 Current liabilities: Short-term borrowings 1,347,690,168.49 1,347,690,168.49 Accounts payable 572,729,779.31 572,729,779.31 Advance receipt 161,173,916.67 161,173,916.67 Payroll payable 49,731,930.35 49,731,930.35 Tax payable 28,744,792.72 28,744,792.72 Other payables 309,537,195.12 309,537,195.12 including: Interest payable 1,784,257.05 1,784,257.05 20 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Dividends payable 526,000.00 526,000.00 Non-current liabilities due within one 32,999,999.96 32,999,999.96 year Total current liabilities 2,502,607,782.62 2,502,607,782.62 Non-current liabilities: Long-term borrowings 118,500,000.00 118,500,000.00 Long-term payables 23,345,833.38 23,345,833.38 Deferred income 20,252,967.41 20,252,967.41 Total non-current liabilities 162,098,800.79 162,098,800.79 Total liabilities 2,664,706,583.41 2,664,706,583.41 Owners' equity (or shareholders' equity): Paid-up capital (or share capital) 845,751,469.00 845,751,469.00 Capital reserve 153,824,536.37 153,824,536.37 deduct: treasury stock 70,688,750.00 70,688,750.00 Other comprehensive income -1,316,942.00 -1,798,486.75 -481,544.75 Surplus reserves 272,882,920.19 272,882,920.19 Undistributed profits 2,651,462,525.08 2,651,462,525.08 Total equity attributable to the owners 3,851,915,758.64 3,851,434,213.89 -481,544.75 of parent company Non-controlling interests 414,072,220.38 414,071,574.65 -645.73 Total owners' equity 4,265,987,979.02 4,265,505,788.54 -482,190.48 (or shareholders' equity) Total liabilities and owners' equity 6,930,694,562.43 6,930,212,371.95 -482,190.48 (or shareholders' equity) 21 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Consolidated Balance Sheet of Parent Company Unit: yuan Currency:RMB Item December 31st, 2018 January 1st, 2019 Adjustment Current assets: Monetary capital 750,589,871.09 750,589,871.09 Derivative financial assets 2,042,527.60 2,042,527.60 Accounts receivable 16,033,809.05 16,033,809.05 Prepayments 2,278,798.85 2,278,798.85 Other receivables 869,671,230.01 869,671,230.01 including: Interest receivable Dividends receivable 15,225,270.58 15,225,270.58 Inventory 41,986,504.36 41,986,504.36 Total current assets 1,682,602,740.96 1,682,602,740.96 Non-current assets: Available-for-sale financial assets 3,000,000.00 -3,000,000.00 Long-term equity investment 3,285,783,087.96 3,285,783,087.96 Other equity instrument investment 2,689,369.92 2,689,369.92 Fixed assets 73,509,615.43 73,509,615.43 Construction in progress 56,425,656.79 56,425,656.79 Intangible assets 16,169,866.87 16,169,866.87 Long-term prepaid expenses 854,845.30 854,845.30 Deferred income tax assets 9,060,127.91 9,060,127.91 Total non-current assets 3,444,803,200.26 3,444,492,570.18 -310,630.08 Total assets 5,127,405,941.22 5,127,095,311.14 -310,630.08 Current liabilities: Short-term borrowings 1,075,000,000.00 1,075,000,000.00 Accounts payable 7,636,692.77 7,636,692.77 Advance receipt 2,690,153.80 2,690,153.80 Payroll payable 2,749,116.65 2,749,116.65 Tax payable 4,166,334.74 4,166,334.74 Other payables 1,026,382,418.43 1,026,382,418.43 including: Interest payable 1,601,798.61 1,601,798.61 Non-current liabilities due within one 20,000,000.00 20,000,000.00 year Total current liabilities 2,138,624,716.39 2,138,624,716.39 Non-current liabilities: Long-term borrowings 118,000,000.00 118,000,000.00 Deferred income 7,425,000.00 7,425,000.00 Total non-current liabilities 125,425,000.00 125,425,000.00 Total liabilities 2,264,049,716.39 2,264,049,716.39 22 / 23 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Third Quarter Report Owners' equity (or shareholders' equity): Paid-up capital (or share capital) 845,751,469.00 845,751,469.00 Capital reserve 160,705,065.92 160,705,065.92 deduct: treasury stock 70,688,750.00 70,688,750.00 Other comprehensive income -1,305,935.62 -1,616,565.70 -310,630.08 Surplus reserves 272,882,920.19 272,882,920.19 Undistributed profits 1,656,011,455.34 1,656,011,455.34 Total owners' equity (or shareholders' 2,863,356,224.83 2,863,045,594.75 -310,630.08 equity) Total liabilities and owners' equity (or 5,127,405,941.22 5,127,095,311.14 -310,630.08 shareholders' equity) 23 / 23