KONKAGROUPCO. LTD.THIRD QUARTERLYREPORT 2020

October 2020

2

Part I Important Notes

The Board of Directors (or the “Board”) the Supervisory Committee as well as the directors

supervisors and senior management of Konka Group Co. Ltd. (together with its consolidated

subsidiaries the “Company” except where the context otherwise requires) hereby guarantee

the factuality accuracy and completeness of the contents of this Report and its summary and

shall be jointly and severally liable for any misrepresentations misleading statements or

material omissions therein.

All the Company’s directors have attended the Board meeting for the review of this Report

and its summary.Liu Fengxi the Company’s legal representative Li Chunlei the Company’s Chief Financial

Officer (CFO) and Feng Junxiu head of the Company’s financial department (equivalent to

financial manager) hereby guarantee that the financial statements carried in this Report are

factual accurate and complete.This Report and its summary have been prepared in both Chinese and English. Should there

be any discrepancies or misunderstandings between the two versions the Chinese versions

shall prevail.Part II Key Corporate Information

I Key Consolidated Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes √ No

30 September 2020 31 December 2019 Change (%)

Total assets (RMB) 44785049225.79 42586955452.27 5.16%

Equity attributable to the listed company’s

shareholders (RMB)

8518673314.06 8068505598.13 5.58%

Q3 2020

YoY change

(%)

Q1-Q3 2020

YoY change

(%)

Operating revenue (RMB) 12276961374.42 -21.53% 29801145271.16 -28.50%

Net profit attributable to the listed

company’s shareholders (RMB)

520661894.19 432.78% 615363686.82 36.60%

Net profit attributable to the listed

company ’ s shareholders before

exceptional items (RMB)

-843908630.71 -99.32% -1493919126.18 -42.78%

Net cash generated from/used in operating

activities (RMB)

-99506432.85 81.21% -1175873360.33 54.29%

Basic earnings per share (RMB/share) 0.2162 432.51% 0.2556 36.61%

Diluted earnings per share (RMB/share) 0.2162 432.51% 0.2556 36.61%

Weighted average return on equity (%) 6.27% 5.07% 7.37% 1.97%

Exceptional gains and losses:

√ Applicable □ Not applicable

Unit: RMB

Item Q1-Q3 2020 Note

Gain/Loss arising from disposal of non-current assets (inclusive of impairment

allowance write-offs)

1306383744.02

Government subsidies recognized in the current period except for those acquired in the

ordinary course of business or granted at certain quotas or amounts according to the

government’s unified standards

451617886.43

Gain/Loss on entrusting others with investments or asset management 29457327.63

Gain/Loss on changes in fair value arising from holding of held-for-trading financial

assets and liabilities and derivative financial assets and liabilities and investment

income from disposal of held-for-trading financial assets and liabilities derivative

financial assets and liabilities and other debt investments other than effective hedge

59718772.71

business related to the Company’s normal operating businesses

Gain/loss on entrustment loans 267097.29

Other non-operating income and expense other than the above 7388516.01

Other gains and losses that meet definition of exceptional gain/loss 675542207.54

Less: Income tax effects 325646046.95

Non-controlling interests effects (net of tax) 95446691.68

Total 2109282813.00 --

Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or

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

Item Amount (RMB) Reason

Tax rebates on software 21347468.54

Recurrent government subsidies given in the Company’s ordinary course of

business at fixed quotas or amounts as per government’s uniform standards

II Total Number of Shareholders and Holdings of Top 10 of Them as at the End of the

Reporting Period

1. Numbers of Ordinary Shareholders and Preference Shareholders with Resumed Voting

Rights as well as Holdings of Top 10 Shareholders

Unit: share

Number of ordinary shareholders 139572

Number of preference shareholders with resumed

voting rights (if any)

0

Top 10 shareholders

Name of shareholder

Nature of

shareholder

Shareh

olding

percent

age

Total shares

held

Restricted

shares held

Shares in pledge or

frozen

Status

Shar

es

OVERSEAS CHINESE TOWN

ENTERPRISES CO. LTD

State-owned

corporation

21.75% 523746932 0

CITIC SECURITIES BROKERAGE

(HONG KONG) CO. LTD.

Foreign

corporation

7.56% 182100202 0

GUOYUAN SECURITIES BROKER (HK)

CO. LTD.

Foreign

corporation

2.44% 58852625 0

HOLYTIME GROUP LIMITED

Foreign

corporation

2.38% 57289100 0

GAOLING FUNDL.P. Foreign 2.19% 52801250 0

corporation

WANG JINGFENG

Domestic

individual

1.52% 36569800 0

NAM NGAI

Foreign

individual

0.94% 22567540 0

CHINAMERCHANTS SECURITIES (HK)

LIMITED

State-owned

corporation

0.82% 19752620 0

Haitong International Securities Company

Limited-Account Client

Foreign

corporation

0.52% 12452154 0

HONG KONG SECURITIES CLEARING

COMPANY LTD.

Foreign

corporation

0.37% 8810290 0

Top 10 unrestricted shareholders

Name of shareholder Unrestricted ordinary shares held

Shares by class

Class Shares

OVERSEAS CHINESE TOWN

ENTERPRISES CO. LTD

523746932

RMB-denominated

ordinary share

523746932

CITIC SECURITIES BROKERAGE

(HONG KONG) CO. LTD.

182100202

Domestically listed

foreign share

182100202

GUOYUAN SECURITIES BROKER (HK)

CO. LTD.

58852625

Domestically listed

foreign share

58852625

HOLYTIME GROUP LIMITED 57289100

Domestically listed

foreign share

57289100

GAOLING FUNDL.P. 52801250

Domestically listed

foreign share

52801250

WANG JINGFENG 36569800

RMB-denominated

ordinary share

36569800

NAM NGAI 22567540

Domestically listed

foreign share

22567540

CHINAMERCHANTS SECURITIES (HK)

LIMITED

19752620

Domestically listed

foreign share

19752620

Haitong International Securities Company

Limited-Account Client

12452154

Domestically listed

foreign share

12452154

HONG KONG SECURITIES CLEARING

COMPANY LTD.

8810290

RMB-denominated

ordinary share

8810290

Related or acting-in-concert parties among

shareholders above

Jialong Investment Limited a wholly-funded subsidiary of the Company’s first

majority shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” for

short) holds 180001110 and 18360000 common shares in the Company

respectively through CITIC Securities Brokerage (Hong Kong) Co. Ltd. and

China Merchants Securities (HK) Limited. Jialong Investment Limited and

Overseas Chinese Town Enterprises Co. are parties acting in concert. Other than

that it is unknown whether the other shareholders are related parties or

acting-in-concert parties or not.Top 10 ordinary shareholders involved in

securities margin trading

A-shareholders Wang Jingfeng held 36309800 A-shares in the Company through

his account of collateral securities for margin trading in Guotai Junan Securities

Co. Ltd..

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted

ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.□ Yes √ No

No such cases in the Reporting Period.

2. Number of Preference Shareholders and Shareholdings of Top 10 of Them

□ Applicable √ Not applicable

Part III Significant Events

I Changes in Key Financial Statement Line Items and Explanation of why

√ Applicable □ Not applicable

(I) During the Reporting Period the Company actively promoted strategic transformation andupgrading by implementing the long-term development strategy of “ Technology + Industry +Parks” and centering on “Semiconductor + New Consumer Electronics + High-Tech Parks” . Interms of the semiconductor business the Company worked on development and commercialization

in respect of Micro LED and Mini LED in addition to the launch of the Mini LED 8K TV. With

regard to the consumer electronics business continued efforts were made to enrich product

categories and content and to enhance coordination between the online and offline marketing

system. By way of live streaming (including live streaming in offline stores) the Company was able

to further boost online and offline sales. As for the high-tech park business the Yangtze River Delta

Headquarters and the Frestec Refrigeration Park among others were launched during the Reporting

Period. These industrial parks are expected to help the Company optimize resource allocation and

promote intelligent upgrading in the high-tech park business.(II) Changes in Key Financial Statement Line Items

Unit: RMB

Item Q1-Q3 2020 Q1-Q3 2019 Amount of change

Percentage

of change

Main reason for change

Operating

revenue

29801145271.16 41681249260.63 -11880103989.47 -28.50%Decreases in both operating revenue

and cost of sales as a result of the

pandemic during the Reporting PeriodCost of sales 27874517742.42 39601480656.43 -11726962914.01 -29.61%

R&D expense 486664300.94 319102256.98 167562043.96 52.51%Greater investments in R&D

Return on

investment

1932345020.63 795857862.21 1136487158.42 142.80%

Disposal of the Company’s interest in

Dongguan Konka Investment Co. Ltd.

Credit

impairment loss

(“-” for loss)

-419369553.83 -89146583.72 -330222970.11 -370.43%

Allowances for doubtful accounts

established in the current period

Asset

impairment loss

(“-” for loss)

-98202971.26 -9456436.22 -88746535.04 -938.48%

Inventory valuation allowances

established in the current period

II Progress Influence and Solutions in respect of Significant Events

(I) Private placements of corporate bonds: So far in respect of the private placement of RMB2.3

billion of corporate bonds the Company has received the No Objection Letter from the Shenzhen

Stock Exchange; and RMB600 million of privately placed corporate bonds are in the process.(II) Launching and establishing funds: Currently Orient Konka Industry M&A Fund respectively

holds 7.75% 2.75% 11.73% 6.05% and 3% equity interest in Jiangxi Yahua Electronic Materials

Co. Ltd. Genew Technologies Co. Ltd. Shenzhen Grentech Technologies Co. Ltd. Huizhou

Xuxin Intelligent Technology Co. Ltd. and Yimeide Technology Co. Ltd. Xinjia Emerging Industry

Development Investment Fund Wuzhen Jiayu Digital Economy Industry Fund and Yibin Kanghui

Emerging Industry Fund have completed the filing in Asset Management Association of China.

Yancheng Electronic Information Industry Fund has accomplished the signing of the partnership

agreement and now the filing in Asset Management Association of China is underway.(III) Yibin Smart Terminal High-Tech Industrial Park has been completed and accepted. Konka

Chuzhou Smart Appliances and Equipment Industrial Park Dongguan Konka Smart Industrial Park

Chongqing Konka Semiconductor Optoelectronic Industrial Park and Suining Konka Electronic

Technology Industrial Park have obtained the project land and are under construction. Yancheng

Semiconductor Closed Beta Test Base has completed the basic construction and is headed towards

interior decoration. Frestec Refrigeration Park Konka Production Base for Exported Intelligent

Terminals and Guxian Green Technology Town are in the pipeline and waiting to bid for the target

land in government auditions.Summary of the significant event Date of disclosure Index to disclosure

Private placement of RMB600 million of corporate bonds 18 September 2019

http://www.cninfo.c

om.cn/new/index

Investment and construction of Dongguan Konka Smart Industrial Park 11 March 2017

Investment and construction of Konka Chuzhou Smart Appliances and Equipment

Industrial Park

5 December 2018

Investment and construction of Yibin Smart Terminal High-Tech Industrial Park 16 December 2017

Investment and construction of Suining Konka Electronic Technology Industrial

Park

17 October 2018

Investment and construction of Chongqing Konka Semiconductor Optoelectronic

Industrial Park

9 October 2019

Investment and construction of Yancheng Semiconductor Closed Beta Base 26 November 2019

Investment and construction of Guxian Green Technology Town 26 November 2019

Orient Konka Industry M &A Fund 7 September 2018

Xinjia Emerging Industry Development Investment Fund 4 March 2020

Wuzhen Jiayu Digital Economy Industry Fund 28 March 2020

Investment and construction of Konka Production Base for Exported Intelligent

Terminals

6 June 2020

Private placement of RMB2.3 billion of corporate bonds 6 June 2020

Investment and construction of Frestec Refrigeration Park 21 July 2020

Yibin Kanghui Emerging Industry Fund 21 July 2020

Yancheng Electronic Information Industry Fund 23 September 2020

Completion of Ownership Transfer with the Industrial and Commercial

Administration in Respect of the Disposal of a 51% Interest in Dongguan Konka

Investment Co. Ltd. in an Open Manner

26 September 2020

Progress of any share repurchase:

□ Applicable √ Not applicable

Progress of any reduction of the repurchased shares through centralized bidding:

□ Applicable √ Not applicable

III Commitments that the Company ’ s Actual Controller Shareholders Related Parties

Acquirers the Company Itself or Other Relevant Parties Failed to Fulfill on Time during the

Reporting Period

□ Applicable √ Not applicable

No such cases in the Reporting Period.

IV Financial Investments

1. Securities Investments

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Investments in Derivative Financial Instruments

□ Applicable √ Not applicable

No such cases in the Reporting Period.V Progress of Projects Financed with Raised Funds

□ Applicable √ Not applicable

VI 2020 Annual Operating Performance Forecast

Warning of a forecast loss on or a forecast significant year-on-year change in the 2020 annual net

profit as well as explanation of why:

□ Applicable √ Not applicable

VII Significant Contracts Arising from the Company’s Ordinary Course of Business

□ Applicable √ Not applicable

VIII Cash Entrusted for Wealth Management

√ Applicable □ Not applicable

Unit: RMB’0000

Type Funding source Amount Undue amount Unrecovered overdue amount

Bank’s wealth management product Self-owned 0 940 0

Total 0 940 0

High-risk wealth management transactions with a significant single amount or with low security

low liquidity or no principal protection:

□ Applicable √ Not applicable

Wealth management transactions with possible impairments including an expectedly unrecoverable

principal:

□ Applicable √ Not applicable

IX Irregularities in the Provision of Guarantees

□ Applicable √ Not applicable

No such cases in the Reporting Period.X Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related

Parties for Non-Operating Purposes

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XI Communications with the Investment Community such as Researches Inquiries and

Interviews Received during the Reporting Period

□ Applicable √ Not applicable

No such cases in the Reporting Period.Part IV Financial Statements

I Financial Statements

1. Consolidated Balance Sheet

Prepared by Konka Group Co. Ltd.

30 September 2020

Unit: RMB

Item 30 September 2020 31 December 2019

Current assets:

Monetary assets 6579261424.18 6599360051.61

Settlement reserve

Loans to other banks and financial institutions

Held-for-trading financial assets 61494666.97

Derivative financial assets

Notes receivable 1846727412.55 2838041432.89

Accounts receivable 5879294945.56 4416179657.87

Receivables financing 90635143.47 143174271.82

Prepayments 2580862758.73 2072550811.86

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract reserve

Other receivables 1710567669.55 1772183366.49

Including: Interest receivable 19432661.26 7807400.40

Dividends receivable 547848.62 547848.62

Financial assets purchased under resale agreements

Inventories 5005680260.84 5318503044.69

Contract assets 57517986.07

Assets held for sale

Current portion of non-current assets 93761768.42 108087016.22

Other current assets 1566320040.85 2093212552.25

Total current assets 25410629410.22 25422786872.67

Non-current assets:

Loans and advances to customers

Debt investments

Other debt investments

Long-term receivables 406490863.41 410509555.85

Long-term equity investments 4080885163.89 3465541196.89

Investments in other equity instruments 26642171.36 21642170.36

Other non-current financial assets 1812985572.95 1753121727.83

Investment property 388983302.24 400197374.07

Fixed assets 2397168269.57 2561254191.55

Construction in progress 6012462841.51 4291544368.52

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets 1135960506.05 1213271713.22

Development costs 1430936.03

Goodwill 779260296.41 779260296.41

Long-term prepaid expense 119132580.66 107590078.88

Deferred income tax assets 1044085436.95 987763182.17

Other non-current assets 1168931874.54 1172472723.85

Total non-current assets 19374419815.57 17164168579.60

Total assets 44785049225.79 42586955452.27

Current liabilities:

Short-term borrowings 11545605169.58 10332687239.63

Borrowings from the central bank

Loans from other banks and financial institutions

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 1206473051.09 1319396374.37

Accounts payable 5853839416.94 5797822479.60

Advances from customers 1076856387.08

Contract liabilities 1637940617.00

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 349178094.68 426870498.58

Taxes and levies payable 301663370.44 607845294.99

Other payables 2130027470.51 2374287243.20

Including: Interest payable 153125872.24 227831108.53

Dividends payable

Fees and commissions payable

Reinsurance payables

Liabilities directly associated with assets held for sale

Current portion of non-current liabilities 13023381.44 210066077.13

Other current liabilities

Total current liabilities 23037750571.68 22145831594.58

Non-current liabilities:

Insurance contract reserve

Long-term borrowings 5169802097.54 4890315729.90

Bonds payable 4991837002.15 4987709643.64

Including: Preference shares

Perpetual bonds

Lease liabilities

Long-term payables 713894401.32 383287104.62

Long-term employee benefits payable 5286794.22 5565646.72

Provisions 137192250.40 206591.51

Deferred income 158620881.77 151874258.45

Deferred income tax liabilities 88347193.28 95467096.05

Other non-current liabilities 110361780.89

Total non-current liabilities 11375342401.57 10514426070.89

Total liabilities 34413092973.25 32660257665.47

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preference shares

Perpetual bonds

Capital reserves 230368577.09 230368577.09

Less: Treasury stock

Other comprehensive income -66091804.01 -21293103.52

Specific reserve

Surplus reserves 1211721109.67 1211721109.67

General reserve

Retained earnings 4734730023.31 4239763606.89

Total equity attributable to owners of the Company as the

parent

8518673314.06 8068505598.13

Non-controlling interests 1853282938.48 1858192188.67

Total owners’ equity 10371956252.54 9926697786.80

Total liabilities and owners’ equity 44785049225.79 42586955452.27

Legal representative: Liu Fengxi CFO: Li Chunlei Head of the financial department: Feng Junxiu

2. Balance Sheet of the Company as the Parent

Unit: RMB

Item 30 September 2020 31 December 2019

Current assets:

Monetary assets 2949020415.52 2498077198.12

Held-for-trading financial assets 61494666.97

Derivative financial assets

Notes receivable 1325764809.15 2148312821.38

Accounts receivable 5604165653.64 9564720940.39

Receivables financing 66002903.68

Prepayments 1003172364.65 911315168.95

Other receivables 8734438082.30 10552820915.47

Including: Interest receivable 11146879.93 7431353.86

Dividends receivable 349515715.50 518580871.02

Inventories 257339197.13 218644308.47

Contract assets

Assets held for sale

Current portion of non-current assets

Other current assets 753175326.36 1096689897.40

Total current assets 20627075848.75 27118078820.83

Non-current assets:

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments 8992378578.30 7712084967.88

Investments in other equity instruments 17940215.36 12940214.36

Other non-current financial assets 250230000.00 250230000.00

Investment property 388983302.24 400197374.07

Fixed assets 430537915.34 444107402.57

Construction in progress 75312908.26 40933270.51

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets 74981659.82 80470750.60

Development costs

Goodwill

Long-term prepaid expense 14247153.98 39047325.68

Deferred income tax assets 815152260.37 883234085.45

Other non-current assets

Total non-current assets 11059763993.67 9863245391.12

Total assets 31686839842.42 36981324211.95

Current liabilities:

Short-term borrowings 4906232184.91 5014312913.74

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 1764184964.11 2610991473.69

Accounts payable 6996269041.93 11078648690.19

Advances from customers 318839961.84

Contract liabilities 198727133.74

Employee benefits payable 130898131.46 125402307.95

Taxes and levies payable 3200613.86 9305344.42

Other payables 4026877947.82 3193392734.69

Including: Interest payable 147583113.80 223847860.57

Dividends payable

Liabilities directly associated with assets held for sale

Current portion of non-current liabilities 130512375.00

Other current liabilities

Total current liabilities 18026390017.83 22481405801.52

Non-current liabilities:

Long-term borrowings 2353034612.32 3438055729.90

Bonds payable 4991837002.15 4987709643.64

Including: Preference shares

Perpetual bonds

Lease liabilities

Long-term payables 24965378.82 21855688.19

Long-term employee benefits payable

Provisions 5426045.35 206591.51

Deferred income 45071455.73 59545839.30

Deferred income tax liabilities

Other non-current liabilities 57440562.28

Total non-current liabilities 7477775056.65 8507373492.54

Total liabilities 25504165074.48 30988779294.06

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preference shares

Perpetual bonds

Capital reserves 114018066.79 114018066.79

Less: Treasury stock

Other comprehensive income -2682217.31 -2682217.31

Specific reserve

Surplus reserves 1227564785.19 1227564785.19

Retained earnings 2435828725.27 2245698875.22

Total owners’ equity 6182674767.94 5992544917.89

Total liabilities and owners’ equity 31686839842.42 36981324211.95

3. Consolidated Income Statement for Q3

Unit: RMB

Item Q3 2020 Q3 2019

1. Revenues 12276961374.42 15644806446.79

Including: Operating revenue 12276961374.42 15644806446.79

Interest income

Insurance premium income

Fee and commission income

2. Costs and expenses 12941220330.25 16025188376.66

Including: Cost of sales 11605524309.54 14927438285.30

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 19117752.68 18882712.84

Selling expense 443120418.41 537449008.46

Administrative expense 290185810.31 214581564.94

R&D expense 228614714.65 161891918.04

Finance costs 354657324.66 164944887.08

Including: Interest expense 209255381.22 286311826.27

Interest income 8632937.66 28365849.61

Add: Other income 149944065.29 298288604.77

Return on investment (“-” for loss) 1333651444.04 236696834.29

Including: Share of profit or loss of joint ventures

and associates

468102.97 -17103633.76

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)

Credit impairment loss (“-” for loss) -379482046.65 -39670359.96

Asset impairment loss (“-” for loss) -96217311.31 2261331.07

Asset disposal income (“-” for loss) 89624963.47

3. Operating profit (“-” for loss) 433262159.01 117194480.30

Add: Non-operating income 13906702.31 41224843.98

Less: Non-operating expense 6986036.13 1809247.39

4. Gross profit (“-” for loss) 440182825.19 156610076.89

Less: Income tax expense -29221823.79 4284277.99

5. Net profit (“-” for net loss) 469404648.98 152325798.90

5.1 By operating continuity

5.1.1 Net profit from continuing operations (“-” for net

loss)

469404648.98 152325798.90

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 parent

520661894.19 97725667.63

5.2.1 Net profit attributable to non-controlling interests -51257245.21 54600131.27

6. Other comprehensive income net of tax -48021475.59 -757628.66

Attributable to owners of the Company as the parent -44481996.02 -2540311.85

6.1 Items that will not be reclassified to profit or loss

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

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 -44481996.02 -2540311.85

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

-44481996.02 -2540311.85

6.2.7 Other

Attributable to non-controlling interests -3539479.57 1782683.19

7. Total comprehensive income 421383173.39 151568170.24

Attributable to owners of the Company as the parent 476179898.17 95185355.78

Attributable to non-controlling interests -54796724.78 56382814.46

8. Earnings per share

8.1 Basic earnings per share 0.2162 0.0406

8.2 Diluted earnings per share 0.2162 0.0406

Legal representative: Liu Fengxi CFO: Li Chunlei Head of the financial department: Feng Junxiu

4. Income Statement of the Company as the Parent for Q3

Unit: RMB

Item Q3 2020 Q3 2019

1. Operating revenue 1874354128.92 3420624874.36

Less: Cost of sales 1859732505.45 3398476539.34

Taxes and levies 1598888.37 2196972.53

Selling expense 59995538.39 289700691.74

Administrative expense 153151582.89 97690345.27

R&D expense 11884823.72 11583116.72

Finance costs 222105925.22 51277210.40

Including: Interest expense 206857085.73 221815070.42

Interest income 116575711.62 107028598.07

Add: Other income 8462482.65 16519680.07

Return on investment (“-” for loss) 523004913.64 151953623.56

Including: Share of profit or loss of joint ventures

and associates

-7427078.59 -7857057.42

Income from the derecognition of financial assets

at amortized cost (“-” for loss)

Net gain on exposure hedges (“-” for loss)

Gain on changes in fair value (“-” for loss)

Credit impairment loss (“-” for loss) -212612195.51 -20000000.00

Asset impairment loss (“-” for loss)

Asset disposal income (“-” for loss) 89600000.00

2. Operating profit (“-” for loss) -25659934.34 -281826698.01

Add: Non-operating income 8790701.45 185713.17

Less: Non-operating expense 2828750.98 169334.48

3. Gross profit (“-” for loss) -19697983.87 -281810319.32

Less: Income tax expense -15512798.22 -65507220.62

4. Net profit (“-” for net loss) -4185185.65 -216303098.70

4.1 Net profit from continuing operations (“-” for net loss) -4185185.65 -216303098.70

4.2 Net profit from discontinued operations (“-” for net

loss)

5. Other comprehensive income net of tax

5.1 Items that will not be reclassified to profit or loss

5.1.1 Changes caused by remeasurements on defined

benefit schemes

5.1.2 Other comprehensive income that will not be

reclassified to profit or loss under the equity method

5.1.3 Changes in the fair value of investments in other

equity instruments

5.1.4 Changes in the fair value arising from changes in

own credit risk

5.1.5 Other

5.2 Items that will be reclassified to profit or loss

5.2.1 Other comprehensive income that will be

reclassified to profit or loss under the equity method

5.2.2 Changes in the fair value of other debt investments

5.2.3 Other comprehensive income arising from the

reclassification of financial assets

5.2.4 Credit impairment allowance for other debt

investments

5.2.5 Reserve for cash flow hedges

5.2.6 Differences arising from the translation of foreign

currency-denominated financial statements

5.2.7 Other

6. Total comprehensive income -4185185.65 -216303098.70

7. Earnings per share

7.1 Basic earnings per share

7.2 Diluted earnings per share

5. Consolidated Income Statement for Q1~Q3

Unit: RMB

Item Q1~Q3 2020 Q1~Q3 2019

1. Revenues 29801145271.16 41681249260.63

Including: Operating revenue 29801145271.16 41681249260.63

Interest income

Insurance premium income

Fee and commission income

2. Costs and expenses 31294628818.95 42723961198.82

Including: Cost of sales 27874517742.42 39601480656.43

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 48302193.04 56271805.11

Selling expense 1412344800.39 1605394922.82

Administrative expense 731101590.75 562506207.37

R&D expense 486664300.94 319102256.98

Finance costs 741698191.41 579205350.11

Including: Interest expense 742208965.50 815995662.79

Interest income 132894768.38 147039381.38

Add: Other income 468038917.63 642173576.13

Return on investment (“-” for loss) 1932345020.63 795857862.21

Including: Share of profit or loss of joint ventures

and associates

45185728.73 -8562359.20

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) -3005381.67

Credit impairment loss (“-” for loss) -419369553.83 -89146583.72

Asset impairment loss (“-” for loss) -98202971.26 -9456436.22

Asset disposal income (“-” for loss) 188079246.33 293705840.64

3. Operating profit (“-” for loss) 577407111.71 587416939.18

Add: Non-operating income 22568475.79 63494286.07

Less: Non-operating expense 14122911.48 5278988.90

4. Gross profit (“-” for loss) 585852676.02 645632236.35

Less: Income tax expense 44203698.68 14595671.18

5. Net profit (“-” for net loss) 541648977.34 631036565.17

5.1 By operating continuity

5.1.1 Net profit from continuing operations (“-” for net

loss)

541648977.34 631036565.17

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 parent

615363686.82 450492688.36

5.2.1 Net profit attributable to non-controlling interests -73714709.48 180543876.81

6. Other comprehensive income net of tax -46863350.96 -3865740.99

Attributable to owners of the Company as the parent -44798700.49 -6200198.54

6.1 Items that will not be reclassified to profit or loss -4800000.00

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

equity instruments

-4800000.00

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 -44798700.49 -1400198.54

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

-44798700.49 -1400198.54

6.2.7 Other

Attributable to non-controlling interests -2064650.47 2334457.55

7. Total comprehensive income 494785626.38 627170824.18

Attributable to owners of the Company as the parent 570564986.33 444292489.82

Attributable to non-controlling interests -75779359.95 182878334.36

8. Earnings per share

8.1 Basic earnings per share 0.2556 0.1871

8.2 Diluted earnings per share 0.2556 0.1871

Legal representative: Liu Fengxi CFO: Li Chunlei Head of the financial department: Feng Junxiu

6. Income Statement of the Company as the Parent for Q1~Q3

Unit: RMB

Item Q1~Q3 2020 Q1~Q3 2019

1. Operating revenue 5249800159.81 8788646584.76

Less: Cost of sales 4810832336.30 8662626032.49

Taxes and levies 4054892.86 5247218.40

Selling expense 406754081.49 892638143.13

Administrative expense 313001635.63 214332248.59

R&D expense 37421071.21 33467367.19

Finance costs 396462530.95 315092491.81

Including: Interest expense 637210813.14 706461849.17

Interest income 359545756.63 332427396.10

Add: Other income 68743421.98 42403642.65

Return on investment (“-” for loss) 1031869975.34 337929362.44

Including: Share of profit or loss of joint ventures

and associates

-8126917.97 -3928528.71

Income from the derecognition of financial assets

at amortized cost (“-” for loss)

Net gain on exposure hedges (“-” for loss)

Gain on changes in fair value (“-” for loss) -3005381.67

Credit impairment loss (“-” for loss) -222810467.29 -26660947.01

Asset impairment loss (“-” for loss) 5726253.37 -3172282.22

Asset disposal income (“-” for loss) 188200000.00 200.00

2. Operating profit (“-” for loss) 353002794.77 -987262322.66

Add: Non-operating income 9106266.95 1708572.98

Less: Non-operating expense 3054317.36 1126692.02

3. Gross profit (“-” for loss) 359054744.36 -986680441.70

Less: Income tax expense 68788742.83 -240955012.03

4. Net profit (“-” for net loss) 290266001.53 -745725429.67

4.1 Net profit from continuing operations (“-” for net loss) 290266001.53 -745725429.67

4.2 Net profit from discontinued operations (“-” for net

loss)

5. Other comprehensive income net of tax

5.1 Items that will not be reclassified to profit or loss

5.1.1 Changes caused by remeasurements on defined

benefit schemes

5.1.2 Other comprehensive income that will not be

reclassified to profit or loss under the equity method

5.1.3 Changes in the fair value of investments in other

equity instruments

5.1.4 Changes in the fair value arising from changes in

own credit risk

5.1.5 Other

5.2 Items that will be reclassified to profit or loss

5.2.1 Other comprehensive income that will be

reclassified to profit or loss under the equity method

5.2.2 Changes in the fair value of other debt investments

5.2.3 Other comprehensive income arising from the

reclassification of financial assets

5.2.4 Credit impairment allowance for other debt

investments

5.2.5 Reserve for cash flow hedges

5.2.6 Differences arising from the translation of foreign

currency-denominated financial statements

5.2.7 Other

6. Total comprehensive income 290266001.53 -745725429.67

7. Earnings per share

7.1 Basic earnings per share

7.2 Diluted earnings per share

7. Consolidated Cash Flow Statement for Q1~Q3

Unit: RMB

Item Q1~Q3 2020 Q1~Q3 2019

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of

services

29184784329.28 41460695427.76

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 158747704.56 596940645.18

Cash generated from other operating activities 2779748792.23 2810409063.92

Subtotal of cash generated from operating activities 32123280826.07 44868045136.86

Payments for commodities and services 28608102086.75 42633289918.22

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 1359110793.58 1354791311.98

Taxes and levies paid 785311074.53 604891331.46

Cash used in other operating activities 2546630231.54 2847652417.14

Subtotal of cash used in operating activities 33299154186.40 47440624978.80

Net cash generated from/used in operating activities -1175873360.33 -2572579841.94

2. Cash flows from investing activities:

Proceeds from disinvestment 695562072.60 222405975.50

Return on investment 97902372.90 109794038.16

Net proceeds from the disposal of fixed assets intangible

assets and other long-lived assets

305251144.96 123083476.75

Net proceeds from the disposal of subsidiaries and other

business units

588620437.06 90801480.11

Cash generated from other investing activities 2057357513.79 1757416878.42

Subtotal of cash generated from investing activities 3744693541.31 2303501848.94

Payments for the acquisition of fixed assets intangible

assets and other long-lived assets

2417483605.63 1280750151.25

Payments for investments 162157119.25 1236659360.00

Net increase in pledged loans granted

Net payments for the acquisition of subsidiaries and other

business units

Cash used in other investing activities 155520775.46 800033420.00

Subtotal of cash used in investing activities 2735161500.34 3317442931.25

Net cash generated from/used in investing activities 1009532040.97 -1013941082.31

3. Cash flows from financing activities:

Capital contributions received 133039439.25 316350268.17

Including: Capital contributions by non-controlling

interests to subsidiaries

133039439.25 316350268.17

Borrowings received 14453038928.17 21816836119.64

Cash generated from other financing activities 1396812658.86 662446627.50

Subtotal of cash generated from financing activities 15982891026.28 22795633015.31

Repayment of borrowings 13243185186.02 15301413298.24

Interest and dividends paid 745791874.18 674111965.45

Including: Dividends paid by subsidiaries to

non-controlling interests

4513500.00 33607322.95

Cash used in other financing activities 1347499266.63 534292325.64

Subtotal of cash used in financing activities 15336476326.83 16509817589.33

Net cash generated from/used in financing activities 646414699.45 6285815425.98

4. Effect of foreign exchange rates changes on cash and cash

equivalents

-22135152.50 7020688.15

5. Net increase in cash and cash equivalents 457938227.59 2706315189.88

Add: Cash and cash equivalents beginning of the period 4493701917.22 3434149481.72

6. Cash and cash equivalents end of the period 4951640144.81 6140464671.60

8. Cash Flow Statement of the Company as the Parent for Q1~Q3

Unit: RMB

Item Q1~Q3 2020 Q1~Q3 2019

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of

services

5287315115.68 15276237884.82

Tax and levy rebates 42763151.28 48371777.09

Cash generated from other operating activities 10273988822.96 9241152305.86

Subtotal of cash generated from operating activities 15604067089.92 24565761967.77

Payments for commodities and services 3473166490.54 13228154713.94

Cash paid to and for employees 280122707.16 538054123.81

Taxes and levies paid 10631888.24 44781446.37

Cash used in other operating activities 10751419805.68 10978851545.86

Subtotal of cash used in operating activities 14515340891.62 24789841829.98

Net cash generated from/used in operating activities 1088726198.30 -224079862.21

2. Cash flows from investing activities:

Proceeds from disinvestment 1217936530.00 166685882.00

Return on investment 187723779.95 96058958.81

Net proceeds from the disposal of fixed assets intangible

assets and other long-lived assets

188253456.56 255200.79

Net proceeds from the disposal of subsidiaries and other

business units

Cash generated from other investing activities 1935867847.12 777615551.82

Subtotal of cash generated from investing activities 3529781613.63 1040615593.42

Payments for the acquisition of fixed assets intangible

assets and other long-lived assets

65949474.37 59662429.02

Payments for investments 1340905815.71 703450000.00

Net payments for the acquisition of subsidiaries and other

business units

Cash used in other investing activities 126968061.44 5137623500.00

Subtotal of cash used in investing activities 1533823351.52 5900735929.02

Net cash generated from/used in investing activities 1995958262.11 -4860120335.60

3. Cash flows from financing activities:

Capital contributions received

Borrowings received 9378654852.74 11517566793.66

Cash generated from other financing activities 132564434.59 2500000.00

Subtotal of cash generated from financing activities 9511219287.33 11520066793.66

Repayment of borrowings 10634198610.76 4960897423.76

Interest and dividends paid 663698397.97 561130301.68

Cash used in other financing activities 494170138.20 10922037.42

Subtotal of cash used in financing activities 11792067146.93 5532949762.86

Net cash generated from/used in financing activities -2280847859.60 5987117030.80

4. Effect of foreign exchange rates changes on cash and cash

equivalents

-5866676.75 -10762185.92

5. Net increase in cash and cash equivalents 797969924.06 892154647.07

Add: Cash and cash equivalents beginning of the period 1337342186.92 1497794555.85

6. Cash and cash equivalents end of the period 2135312110.98 2389949202.92

II Adjustments to the Financial Statements

1. Adjustments to the Financial Statements at the Beginning of the First Execution Year (2020)

of the New Accounting Standards Governing Revenue and Leases

√ Applicable □ Not applicable

Whether items of the balance sheets at the beginning of the year need adjustments

√ Yes □ No

Consolidated balance sheet

Unit: RMB

Item 31 December 2019 1 January 2020 Adjustment

Current assets:

Monetary assets 6599360051.61 6599360051.61

Settlement reserve

Loans to other banks and

financial institutions

Held-for-trading

financial assets

61494666.97 61494666.97

Derivative financial

assets

Notes receivable 2838041432.89 2838041432.89

Accounts receivable 4416179657.87 4419658123.40 3478465.53

Receivables financing 143174271.82 143174271.82

Prepayments 2072550811.86 2072550811.86

Premiums receivable

Reinsurance receivables

Receivable reinsurance

contract reserve

Other receivables 1772183366.49 1772183366.49

Including: Interest

receivable

7807400.40 7807400.40

Dividends

receivable

547848.62 547848.62

Financial assets

purchased under resale

agreements

Inventories 5318503044.69 5307497440.88 -11005603.81

Contract assets 13248335.74 13248335.74

Assets held for sale

Current portion of

non-current assets

108087016.22 108087016.22

Other current assets 2093212552.25 2104218156.06 11005603.81

Total current assets 25422786872.67 25439513673.94 16726801.27

Non-current assets:

Loans and advances to

customers

Debt investments

Other debt investments

Long-term receivables 410509555.85 410509555.85

Long-term equity

investments

3465541196.89 3465541196.89

Investments in other

equity instruments

21642170.36 21642170.36

Other non-current

financial assets

1753121727.83 1753121727.83

Investment property 400197374.07 400197374.07

Fixed assets 2561254191.55 2561254191.55

Construction in progress 4291544368.52 4291544368.52

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets 1213271713.22 1213271713.22

Development costs

Goodwill 779260296.41 779260296.41

Long-term prepaid

expense

107590078.88 107590078.88

Deferred income tax

assets

987763182.17 987763182.17

Other non-current assets 1172472723.85 1172472723.85

Total non-current assets 17164168579.60 17164168579.60

Total assets 42586955452.27 42603682253.54 16726801.27

Current liabilities:

Short-term borrowings 10332687239.63 10332687239.63

Borrowings from the

central bank

Loans from other banks

and financial institutions

Held-for-trading

financial liabilities

Derivative financial

liabilities

Notes payable 1319396374.37 1319396374.37

Accounts payable 5797822479.60 5797822479.60

Advances from

customers

1076856387.08 -1076856387.08

Contract liabilities 959538151.80 959538151.80

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

426870498.58 426870498.58

Taxes and levies payable 607845294.99 607845294.99

Other payables 2374287243.20 2289729308.18 -84557935.02

Including: Interest

payable

227831108.53 227831108.53

Dividends

payable

Fees and commissions

payable

Reinsurance payables

Liabilities directly

associated with assets held

for sale

Current portion of

non-current liabilities

210066077.13 210066077.13

Other current liabilities

Total current liabilities 22145831594.58 21943955424.28 -201876170.30

Non-current liabilities:

Insurance contract

reserve

Long-term borrowings 4890315729.90 4890315729.90

Bonds payable 4987709643.64 4987709643.64

Including: Preference

shares

Perpetual

bonds

Lease liabilities

Long-term payables 383287104.62 383287104.62

Long-term employee 5565646.72 5565646.72

benefits payable

Provisions 206591.51 101491327.80 101284736.29

Deferred income 151874258.45 151874258.45

Deferred income tax

liabilities

95467096.05 95467096.05

Other non-current

liabilities

117318235.28 117318235.28

Total non-current liabilities 10514426070.89 10733029042.46 218602971.57

Total liabilities 32660257665.47 32676984466.74 16726801.27

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preference

shares

Perpetual

bonds

Capital reserves 230368577.09 230368577.09

Less: Treasury stock

Other comprehensive

income

-21293103.52 -21293103.52

Specific reserve

Surplus reserves 1211721109.67 1211721109.67

General reserve

Retained earnings 4239763606.89 4239763606.89

Total equity attributable to

owners of the Company as

the parent

8068505598.13 8068505598.13

Non-controlling interests 1858192188.67 1858192188.67

Total owners’ equity 9926697786.80 9926697786.80

Total liabilities and

owners’ equity

42586955452.27 42603682253.54 16726801.27

Notes to the adjustment

In 2017 the Ministry of Finance issued the revised "Accounting Standards for Business Enterprises

No. 14-Revenue" (referred to as the "New Revenue Standards"). The company will begin

accounting treatment in accordance with the newly revised standards from January 1 2020.

According to the convergence regulations the comparable period information will not be adjusted.

The difference between the implementation of the new standards and the current standards on the

first day will be retrospectively adjusted. Profit or other comprehensive income.

Balance sheet of the Company as the parent

Unit: RMB

Item 31 December 2019 1 January 2020 Adjustment

Current assets:

Monetary assets 2498077198.12 2498077198.12

Held-for-trading

financial assets

61494666.97 61494666.97

Derivative financial

assets

Notes receivable 2148312821.38 2148312821.38

Accounts receivable 9564720940.39 9580894472.00 16173531.61

Receivables financing 66002903.68 66002903.68

Prepayments 911315168.95 911315168.95

Other receivables 10552820915.47 10552820915.47

Including: Interest

receivable

7431353.86 7431353.86

Dividends

receivable

518580871.02 518580871.02

Inventories 218644308.47 207949690.07 -10694618.40

Contract assets

Assets held for sale

Current portion of

non-current assets

Other current assets 1096689897.40 1107384515.80 10694618.40

Total current assets 27118078820.83 27134252352.44 16173531.61

Non-current assets:

Debt investments

Other debt investments

Long-term receivables

Long-term equity

investments

7712084967.88 7712084967.88

Investments in other

equity instruments

12940214.36 12940214.36

Other non-current

financial assets

250230000.00 250230000.00

Investment property 400197374.07 400197374.07

Fixed assets 444107402.57 444107402.57

Construction in progress 40933270.51 40933270.51

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets 80470750.60 80470750.60

Development costs

Goodwill

Long-term prepaid

expense

39047325.68 39047325.68

Deferred income tax

assets

883234085.45 883234085.45

Other non-current assets

Total non-current assets 9863245391.12 9863245391.12

Total assets 36981324211.95 36997497743.56 16173531.61

Current liabilities:

Short-term borrowings 5014312913.74 5014312913.74

Held-for-trading

financial liabilities

Derivative financial

liabilities

Notes payable 2610991473.69 2610991473.69

Accounts payable 11078648690.19 11078648690.19

Advances from

customers

318839961.84 -318839961.84

Contract liabilities 269891156.62 269891156.62

Employee benefits

payable

125402307.95 125402307.95

Taxes and levies payable 9305344.42 9305344.42

Other payables 3193392734.69 3181261535.24 -12131199.45

Including: Interest

payable

223847860.57 223847860.57

Dividends

payable

Liabilities directly

associated with assets held

for sale

Current portion of

non-current liabilities

130512375.00 130512375.00

Other current liabilities

Total current liabilities 22481405801.52 22420325796.85 -61080004.67

Non-current liabilities:

Long-term borrowings 3438055729.90 3438055729.90

Bonds payable 4987709643.64 4987709643.64

Including: Preference

shares

Perpetual

bonds

Lease liabilities

Long-term payables 21855688.19 21855688.19

Long-term employee

benefits payable

Provisions 206591.51 28511322.57 28304731.06

Deferred income 59545839.30 59545839.30

Deferred income tax

liabilities

Other non-current

liabilities

48948805.22 48948805.22

Total non-current liabilities 8507373492.54 8584627028.82 77253536.28

Total liabilities 30988779294.06 31004952825.67 16173531.61

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preference

shares

Perpetual

bonds

Capital reserves 114018066.79 114018066.79

Less: Treasury stock

Other comprehensive

income

-2682217.31 -2682217.31

Specific reserve

Surplus reserves 1227564785.19 1227564785.19

Retained earnings 2245698875.22 2245698875.22

Total owners’ equity 5992544917.89 5992544917.89

Total liabilities and

owners’ equity

36981324211.95 36997497743.56 16173531.61

Notes to the adjustment

In 2017 the Ministry of Finance issued the revised "Accounting Standards for Business Enterprises

No. 14-Revenue" (referred to as the "New Revenue Standards"). The company will begin

accounting treatment in accordance with the newly revised standards from January 1 2020.

According to the convergence regulations the comparable period information will not be adjusted.

The difference between the implementation of the new standards and the current standards on the

first day will be retrospectively adjusted. Profit or other comprehensive income.

2. Retrospective Adjustments to the Comparative Data of Prior Periods due to the First

Execution in 2020 of the New Accounting Standards Governing Revenue and Leases

√ Applicable □ Not applicable

In 2017 the Ministry of Finance issued the revised "Accounting Standards for Business Enterprises

No. 14-Revenue" (referred to as the "New Revenue Standards"). The company will begin

accounting treatment in accordance with the newly revised standards from January 1 2020.

According to the convergence regulations the comparable period information will not be adjusted.

The difference between the implementation of the new standards and the current standards on the

first day will be retrospectively adjusted. Profit or other comprehensive income.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

Konka Group Co. Ltd

30 October 2020