Konka Group Co. Ltd. First Quarterly Report 2021

KONKAGROUPCO. LTD.FIRST QUARTERLYREPORT 2021

April 2021

Konka Group Co. Ltd. First Quarterly Report 2021

1

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. (hereinafter referred to as the

“Company”) 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 Guo Zhihua 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.Konka Group Co. Ltd. First Quarterly Report 2021

Part II Key Corporate Information

I Key Financial Information

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

Q1 2021 Q1 2020 Change (%)

Operating revenue (RMB) 9822169119.30 7806520237.49 25.82%

Net profit attributable to the listed company’s shareholders (RMB) 72822573.66 -220602940.37 133.01%

Net profit attributable to the listed company’s shareholders before

exceptional items (RMB)

-389266066.84 -333520116.21 -16.71%

Net cash generated from/used in operating activities (RMB) -529240793.59 -1031223468.58 48.68%

Basic earnings per share (RMB/share) 0.0302 -0.0916 132.97%

Diluted earnings per share (RMB/share) 0.0302 -0.0916 132.97%

Weighted average return on equity (%) 0.86% -2.77% 3.63%

31 March 2021 31 December 2020 Change (%)

Total assets (RMB)

51058825129.67

49876267493.61 2.37%

Equity attributable to the listed company’s shareholders (RMB) 8508179883.71 8428640176.97 0.94%

Exceptional gains and losses:

√ Applicable □ Not applicable

Unit: RMB

Item Q1 2021 Note

Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) 126657276.21

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

422340713.56

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

liabilities derivative financial assets and liabilities and investment income from disposal of

held-for-trading financial assets and liabilities derivative financial assets and liabilities other debt

obligations other than effective hedge business related to the Company ’ s normal operating

businesses

20876259.35

Gain/loss on entrustment loans 15710462.53

Non-operating income and expense other than the above 2197249.52

Less: Income tax effects 122848096.78

Non-controlling interests effects (net of tax) 2845223.89

Konka Group Co. Ltd. First Quarterly Report 2021

Total 462088640.50

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 1943763.63

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 Shareholders at 31 March 2021

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

Rights as well as Holdings of Top 10 Shareholders

Unit: share

Number of ordinary shareholders at the

period-end

121050

Number of preferred shareholders with resumed voting rights

at the period-end (if any)

0

Top 10 shareholders

Name of shareholder Nature of shareholder

Shareholdi

ng

percentage

Total shares

held

Restricte

d shares

held

Shares in pledge

or frozen

Status Shares

OVERSEAS CHINESE TOWN

ENTERPRISES CO. LTD

State-owned legal

person

21.75% 523746932 0

CITIC SECURITIES BROKERAGE

(HONG KONG) CO. LTD.

Foreign legal person 7.48% 180001110 0

WANG JINGFENG

Domestic natural

person

4.61% 111000000 0

GUOYUAN SECURITIES BROKER

(HK) CO. LTD.

Foreign legal person 2.40% 57850325 0

HOLYTIME GROUP LIMITED Foreign legal person 2.38% 57289100 0

GAOLING FUNDL.P. Foreign legal person 2.19% 52801250 0

NAM NGAI Foreign natural person 0.94% 22567540 0

CHINAMERCHANTS SECURITIES

(HK) LIMITED

State-owned legal

person

0.80% 19358220 0

HAITONG INTERNATIONAL

SECURITIES COMPANY

LIMITED-ACCOUNT CLIENT

Foreign legal person 0.50% 12146654 0

LI PENG

Domestic natural

person

0.40% 9673280 0

Top 10 unrestricted shareholders

Konka Group Co. Ltd. First Quarterly Report 2021

Name of shareholder

Unrestricted

shares held

Shares by type

Type Shares

OVERSEAS CHINESE TOWN ENTERPRISES CO.

LTD

523746932

RMB-denominated ordinary

stock

523746932

CITIC SECURITIES BROKERAGE (HONG KONG)

CO. LTD.

180001110 Domestically listed foreign stock 180001110

WANG JINGFENG 111000000

RMB-denominated ordinary

stock

111000000

GUOYUAN SECURITIES BROKER (HK) CO. LTD. 57850325 Domestically listed foreign stock 57850325

HOLYTIME GROUP LIMITED 57289100 Domestically listed foreign stock 57289100

GAOLING FUNDL.P. 52801250 Domestically listed foreign stock 52801250

NAM NGAI 22567540 Domestically listed foreign stock 22567540

CHINAMERCHANTS SECURITIES (HK) LIMITED 19358220 Domestically listed foreign stock 19358220

HAITONG INTERNATIONAL SECURITIES

COMPANY LIMITED-ACCOUNT CLIENT

12146654 Domestically listed foreign stock 12146654

LI PENG 9673280

RMB-denominated ordinary

stock

9673280

Related or

acting-in-concert

parties among the

shareholders above

Happy Bloom Investment Limited a wholly-owned subsidiary of the Company ’ s first majority

shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” for short) holds 180001110 and

18360000 ordinary shares in the Company respectively through CITIC Securities Brokerage (Hong

Kong) Co. Ltd. and China Merchants Securities (HK) Limited. Happy Bloom 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 shareholders

involved in securities

margin trading (if any)

Wang Jingfeng holds 111000000 A-shares in the Company through his securities account for customer

credit trading guarantee in Guotai Junan Securities Co. Ltd.Li Peng holds 9673280 A-shares in the Company through his securities account for customer credit

trading guarantee in Industrial 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 Preferred Shareholders and Shareholdings of Top 10 of Them

□ Applicable √ Not applicable

Konka Group Co. Ltd. First Quarterly Report 2021

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 carried on with its long-term development strategy of

“ Technology + Industry + Parks ” . It continued to enhance R&D investments and technological

innovation carry out quality product programs and optimized the product mix in a market-oriented

manner. New products including 8K Mini LED TV K-Fresh Cell-Level Fresh-Keeping

Refrigerator and own-branded solid-state drive products were launched. The R&D and

Industrialization of the Key Technology for New Fresh-Keeping Refrigerator Based on Multi-Field

Coupling with the Company as one of the participant was granted the Sci-Tech Progress Award

(Third Prize) of Anhui Province.In the Reporting Period as the COVID-19 pandemic was effectively controlled domestically the

industry began to see increasing prospects and the Company ’ s relevant business operations

gradually returned to normal. As a result the Company recorded a 25.82% year-on-year growth in

operating revenue. It continued to enhance R&D investments and technological innovation carry

out quality product programs and increase quality and efficiency. All these efforts contributed to

improving profitability.(II) Changes in Key Financial Statement Line Items

Unit: RMB

Item 31 March 2021 31 December 2020 Amount of change

Change

(%)

Explanation of why

Held-for-trading

financial assets

0 618249541.66 -618249541.66 -100.00%

Maturity of held-for-trading

financial assets

Current portion of

non-current assets

76834884.42 112310158.82 -35475274.40 -31.59%

Withdrawal of debt investments

due within one year

Long-term

borrowings

8046731152.78 5964748997.54 2081982155.24 34.90%New borrowing

Deferred income 231069638.99 446900524.64 -215830885.65 -48.30%Government grants

Item Q1 2021 Q1 2020 Amount of change

Change

(%)

Explanation of why

Operating revenue 9822169119.30 7806520237.49 2015648881.81 25.82%Relevant businesses gradually

returned to normal with

improving prospects in the

industry

Cost of sales 9414483468.99 7239731075.92 2174752393.07 30.04%

Konka Group Co. Ltd. First Quarterly Report 2021

R&D expense 119087736.76 89539723.57 29548013.19 33.00%Greater R&D investments

Net cash generated

from/used in

operating activities

-529240793.59 -1031223468.58 501982674.99 48.68%

Cash outflow in the current

period decreased compared with

that in the previous period

Net cash flow from

investment activities

-1801820739.71 -495855234.17 -1305965505.54 -263.38%

Increase in payments or fixed

assets intangible assets and

other long-lived assets

II Progress Influence and Solutions with regard to Significant Events

√ Applicable □ Not applicable

(I) Private placements of corporate bonds: So far RMB1 billion out of the private placement plan of

RMB2.3 billion corporate bonds has been issued on 8 January 2021. The balance of RMB1.3 billion

corporate bonds and another private placement plan of RMB600 million corporate bonds are in the

process.(II) Establishment of funds: Currently Orient Konka Industry M&A Fund respectively holds

7.4969% 2.07% 11.73% 9.21% 3.00% and 3.84% equity interest in Jiangxi Yahua Electronic

Materials Co. Ltd. Genew Technologies Co. Ltd. Shenzhen Grentech RF Communication Co.Ltd. Huizhou Xuxin Intelligent Technology Co. Ltd. Yimeide Automation Technology Co. Ltd.and Gma Optoelectronic Technology Co. Ltd. respectively. Kunshan Xinjia Emerging Industrial

Development Investment Fund holds 0.38% equity interest in Tongxin Software Technology Co.

Ltd. Tongxiang Wuzhen Jiayu Digital Economy Industry Fund holds 12.00% equity interest in

Flying Science And Technology (Shenzhen) Co. Ltd. Yibin Kanghui Electronic Information

Industry Equity Investment Fund and Yancheng Kangyan Information Industry Investment Fund

have completed the filing in Asset Management Association of China. Chongqing Kangxin Equity

Investment Fund has accomplished the signing of the partnership agreement and now the filing in

Asset Management Association of China is underway.

(III) Yibin Konka Intelligent Terminal High-Tech Park has been completed and is currently

bringing in business. With respect to Dongguan Konka Intelligent Industrial Park Konka Chuzhou

Smart Appliances and Equipment Industrial Park Chongqing Konka Semiconductor Photoelectric

Industrial Park Suining Konka Electronic Technology Industrial Park and Frestec Refrigeration

Park the land has been obtained for the projects and they are now under construction. The main

body of Yancheng Semiconductor Assembly & Test Base was basically put in place the interior

decoration is in progress and equipment has been partially in place.Summary of the significant event Disclosure date

Index to the

related

announcement

Private placement of corporate bonds of RMB0.6 billion 18 September 2019 http://www.cninf

o.com.cn/new/inInvestment and construction of Dongguan Konka Smart Industrial Park 11 March 2017

Konka Group Co. Ltd. First Quarterly Report 2021

dexInvestment 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 Environmental Protection Technology

Town

26 November 2019

Orient Konka Industrial M &A Fund 7 September 2018

Xinjia Emerging Industry Development Investment Fund 4 March 2020

Wuzhen Jiayu Digital Economy Industrial Fund 28 March 2020

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

Investment and construction of Frestec Refrigeration Park 21 July 2020

Yibin Kanghui Emerging Industrial Fund 21 July 2020

Yancheng Electronic Information Industrial Fund 23 September 2020

Progress of investment and construction of Guxian Environmental Protection

Technology Town in Yantai

1 December 2020

Chongqing Kangxin Semi-conductor Industrial Fund 16 December 2020

Issuing result of private placement of corporate bonds (Phase I) in 2021 9 January 2021

Signing the project entry agreement with Xi'an International Trade & Logistics

Park

10 February 2021

Plan of transfer of 51% of equity in Shenzhen Kangxin Property Co. Ltd. 27 March 2021

Completing the changes in the registration for transferring 17% of equity in

Yantai Kangyun Industrial Development Co. Ltd.

1 April 2021

Signing the agreement regarding transferring 39% of equity in Shanghai Konka

Green Technology Co. Ltd. and receiving the equity transfer money

14 April 2021

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 Parties Failed to Fulfill on Time during the

Reporting Period

Konka Group Co. Ltd. First Quarterly Report 2021

□ Applicable √ Not applicable

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 Operating Performance Forecast for January-June 2021

Warning of a forecast loss on or a forecast significant YoY change in accumulative net profit from

the beginning of the year to the end of the next reporting period 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

Specific type Capital resources Amount incurred Undue Balance Overdue amount

Bank financial products Self-owned funds 61990.62 0 0

Total 61990.62 0 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

Konka Group Co. Ltd. First Quarterly Report 2021

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

Date Place

Way of

communic

ation

Type of

communicati

on party

Communicati

on party

Main discussions and materials

provided by the Company

Index to main

information

communicated

11

January

2021

Conference

Room in the

Office Building

of Konka R&D

Building

By phone Institution

WangAnya

from Taiwan

Dongteng

Innovation

Investment

Co. Ltd.

Inquired about the Company ’s

development direction and

business segments the

development situation of

businesses including Micro

LED technology industrial

park and white household

appliance with no materials

provided.http://www.cni

nfo.com.cn/ne

w/index

Konka Group Co. Ltd. First Quarterly Report 2021

Part IV Financial Statements

I Financial Statements

1. Consolidated Balance Sheet

Prepared by Konka Group Co. Ltd.

31 March 2021

Unit: RMB

Item 31 March 2021 31 December 2020

Current assets:

Monetary assets 5495828722.35 5431530180.90

Settlement reserve

Interbank loans granted

Held-for-trading financial assets 618249541.66

Derivative financial assets

Notes receivable 2105805615.98 2358180193.96

Accounts receivable 4307128915.94 3900897623.59

Accounts receivable financing 62075923.80 84057197.44

Prepayments 1425647455.16 1183270543.41

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract reserve

Other receivables 1955080618.62 2145736640.60

Including: Interest receivable 49890695.48 45109425.85

Dividends receivable 547848.62 4947848.62

Financial assets purchased under resale agreements

Inventories 4956993055.96 4521300677.41

Contract assets 2925007726.20 2870006710.39

Assets held for sale

Current portion of non-current assets 76834884.42 112310158.82

Other current assets 2272999345.72 1913146483.39

Total current assets 25583402264.15 25138685951.57

Non-current assets:

Loans and advances to customers

Konka Group Co. Ltd. First Quarterly Report 2021

Investments in debt obligations

Investments in other debt obligations

Long-term receivables 394038233.01 399497204.03

Long-term equity investments 4532885748.17 4375833584.65

Investments in other equity instruments 25343293.16 25343293.16

Other non-current financial assets 1909816210.38 1878154796.76

Investment property 534822949.03 538585668.29

Fixed assets 3167964226.63 3178642017.84

Construction in progress 9582480644.29 9236643931.68

Productive living assets

Oil and gas assets

Right-of-use assets 92864940.64

Intangible assets 1169901220.57 1189191001.51

Development costs

Goodwill 675795873.17 675795873.17

Long-term prepaid expense 167019596.15 153198562.82

Deferred income tax assets 1278750415.51 1265916437.39

Other non-current assets 1943739514.81 1820779170.74

Total non-current assets 25475422865.52 24737581542.04

Total assets 51058825129.67 49876267493.61

Current liabilities:

Short-term borrowings 11111298316.46 10990550475.78

Borrowings from the central bank

Interbank loans obtained

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 1205764073.28 1335987026.21

Accounts payable 9316824302.89 9632366325.76

Advances from customers

Contract liabilities 933131420.21 1217367735.94

Financial assets sold under repurchase agreements

Customer deposits and interbank deposits

Payables for acting trading of securities

Payables for underwriting of securities

Konka Group Co. Ltd. First Quarterly Report 2021

Employee benefits payable 256391033.99 476616244.45

Taxes payable 466991812.68 508214059.16

Other payables 2146803355.59 1999430899.69

Including: Interest payable 176712151.95 220837380.17

Dividends payable 4410000.00

Handling charges and commissions payable

Reinsurance payables

Liabilities directly associated with assets held for sale

Current portion of non-current liabilities 333303997.49 376896566.29

Other current liabilities 428194177.59 441774317.23

Total current liabilities 26198702490.18 26979203650.51

Non-current liabilities:

Insurance contract reserve

Long-term borrowings 8046731152.78 5964748997.54

Bonds payable 4992387316.57 4993212788.32

Including: Preferred shares

Perpetual bonds

Lease liabilities 55993583.49

Long-term payables 471260368.44 481409849.96

Long-term employee benefits payable 5212124.66 5248309.14

Provisions 107556088.18 102353567.91

Deferred income 231069638.99 446900524.64

Deferred income tax liabilities 79880961.80 75819231.93

Other non-current liabilities 126520389.88 106475449.02

Total non-current liabilities 14116611624.79 12176168718.46

Total liabilities 40315314114.97 39155372368.97

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 236887329.26 230185310.09

Less: Treasury stock

Other comprehensive income -16290398.70 -16583042.42

Konka Group Co. Ltd. First Quarterly Report 2021

Specific reserve

Surplus reserves 1211721109.67 1211721109.67

General reserve

Retained earnings 4667916435.48 4595371391.63

Total equity attributable to owners of the Company as the parent 8508179883.71 8428640176.97

Non-controlling interests 2235331130.99 2292254947.67

Total owners’ equity 10743511014.70 10720895124.64

Total liabilities and owners’ equity 51058825129.67 49876267493.61

Legal representative: Liu Fengxi CFO: Li Chunlei

Head of the financial department: Guo Zhihua

2. Balance Sheet of the Company as the Parent

Unit: RMB

Item 31 March 2021 31 December 2020

Current assets:

Monetary assets 3437036404.30 3481445560.17

Held-for-trading financial assets 298497458.33

Derivative financial assets

Notes receivable 784921259.76 879589355.91

Accounts receivable 5478711363.15 4473251691.85

Accounts receivable financing 5659400.00 5659400.00

Prepayments 927168571.94 1021218285.46

Other receivables 10850207248.05 10034869353.07

Including: Interest receivable 47533681.27 41138869.97

Dividends receivable 750486555.50 749431635.50

Inventories 276282611.59 202406456.36

Contract assets

Assets held for sale

Current portion of non-current assets

Other current assets 1296191313.75 1020031186.39

Total current assets 23056178172.54 21416968747.54

Non-current assets:

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Konka Group Co. Ltd. First Quarterly Report 2021

Long-term equity investments 9030064013.22 8806166599.56

Investments in other equity instruments 17940215.36 17940215.36

Other non-current financial assets 203000000.00 250230000.00

Investment property 402774818.66 406237236.91

Fixed assets 426930324.47 431762044.14

Construction in progress 204671143.65 132464938.18

Productive living assets

Oil and gas assets

Right-of-use assets 5680074.59

Intangible assets 57685850.89 59506272.63

Development costs

Goodwill

Long-term prepaid expense 15016575.03 16532521.69

Deferred income tax assets 1016449004.26 980095292.53

Other non-current assets 11045888.84 10867888.84

Total non-current assets 11391257908.97 11111803009.84

Total assets 34447436081.51 32528771757.38

Current liabilities:

Short-term borrowings 5065072539.35 5052990048.93

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 716219094.93 1344958738.50

Accounts payable 8671785626.53 6811467585.39

Advances from customers

Contract liabilities 718379517.96 723022740.95

Employee benefits payable 62286222.16 147391317.06

Taxes payable 5941749.75 4094133.23

Other payables 4182811180.78 4275347622.57

Including: Interest payable 171666688.63 215828625.04

Dividends payable

Liabilities directly associated with assets held for sale

Current portion of non-current liabilities 9565029.64 5867425.49

Other current liabilities 1268104.34 6108675.36

Total current liabilities 19433329065.44 18371248287.48

Konka Group Co. Ltd. First Quarterly Report 2021

Non-current liabilities:

Long-term borrowings 3928904773.28 2930034612.32

Bonds payable 4992387316.57 4993212788.32

Including: Preferred shares

Perpetual bonds

Lease liabilities 3329397.02

Long-term payables 14900875.71 17633249.67

Long-term employee benefits payable

Provisions 1015259.19 832465.72

Deferred income 46815659.44 61530557.55

Deferred income tax liabilities 2334364.58

Other non-current liabilities 52254630.52 54162098.05

Total non-current liabilities 9039607911.73 8059740136.21

Total liabilities 28472936977.17 26430988423.69

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 112570352.72 112570352.72

Less: Treasury stock

Other comprehensive income -2682217.31 -2682217.31

Specific reserve

Surplus reserves 1227564785.19 1227564785.19

Retained earnings 2229100775.74 2352385005.09

Total owners’ equity 5974499104.34 6097783333.69

Total liabilities and owners’ equity 34447436081.51 32528771757.38

3. Consolidated Income Statement

Unit: RMB

Item Q1 2021 Q1 2020

1. Revenue 9822169119.30 7806520237.49

Including: Operating revenue 9822169119.30 7806520237.49

Interest income

Insurance premium income

Konka Group Co. Ltd. First Quarterly Report 2021

Handling charge and commission income

2. Costs and expenses 10328392295.03 8238718867.67

Including: Cost of sales 9414483468.99 7239731075.92

Interest expense

Handling charge and commission expense

Surrenders

Net insurance claims paid

Net amount provided as insurance contract reserve

Expenditure on policy dividends

Reinsurance premium expense

Taxes and surcharges 19689328.47 15308409.56

Selling expense 384406831.83 474319677.27

Administrative expense 190572518.95 240679941.63

R&D expense 119087736.76 89539723.57

Finance costs 200152410.03 179140039.72

Including: Interest expense 241076377.51 299701187.78

Interest income 38353963.17 75521808.48

Add: Other income 423439468.60 91772474.77

Return on investment (“-” for loss) 143491581.78 54859916.67

Including: Share of profit or loss of joint ventures and

associates

-562268.87

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) 3691020.84

Credit impairment loss (“-” for loss) 1841004.17 -1851680.71

Asset impairment loss (“-” for loss) 340422.57 1008713.42

Asset disposal income (“-” for loss) -150371.12 -21776.59

3. Operating profit (“-” for loss) 66429951.11 -286430982.62

Add: Non-operating income 3641173.82 6708221.29

Less: Non-operating expense 659880.52 329999.39

4. Profit before tax (“-” for loss) 69411244.41 -280052760.72

Less: Income tax expense 50676074.79 -5687275.24

5. Net profit (“-” for net loss) 18735169.62 -274365485.48

Konka Group Co. Ltd. First Quarterly Report 2021

5.1 By operating continuity

5.1.1 Net profit from continuing operations (“-” for net loss) 18735169.62 -274365485.48

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

loss)

5.2 By ownership

5.2.1 Net profit attributable to shareholders of the Company

as the parent

72822573.66 -220602940.37

5.2.1 Net profit attributable to non-controlling interests -54087404.04 -53762545.11

6. Other comprehensive income net of tax 601064.90 305885.47

Attributable to owners of the Company as the parent 292643.72 -1213168.07

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 292643.72 -1213168.07

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 investments in other debt

obligations

6.2.3 Other comprehensive income arising from the

reclassification of financial assets

6.2.4 Credit impairment allowance for investments in

other debt obligations

6.2.5 Reserve for cash flow hedges

6.2.6 Differences arising from the translation of foreign

currency-denominated financial statements

292643.72 -1213168.07

6.2.7 Other

Attributable to non-controlling interests 308421.18 1519053.54

7. Total comprehensive income 19336234.52 -274059600.01

Attributable to owners of the Company as the parent 73115217.38 -221816108.44

Attributable to non-controlling interests -53778982.86 -52243491.57

8. Earnings per share

8.1 Basic earnings per share 0.0302 -0.0916

Konka Group Co. Ltd. First Quarterly Report 2021

8.2 Diluted earnings per share 0.0302 -0.0916

Legal representative: Liu Fengxi CFO: Li Chunlei

Head of the financial department: Guo Zhihua

4. Income Statement of the Company as the Parent

Unit: RMB

Item Q1 2021 Q1 2020

1. Operating revenue 572828936.17 2173088156.73

Less: Cost of sales 526837769.50 1908039936.17

Taxes and surcharges 1530199.56 1190131.21

Selling expense 90725439.78 206626489.19

Administrative expense 63447264.56 122812588.05

R&D expense 12244133.13 10427818.73

Finance costs 84383746.30 98317835.64

Including: Interest expense 214458640.65 247210956.09

Interest income 123379686.00 116118501.10

Add: Other income 21437602.25 47511070.74

Return on investment (“-” for loss) 47236157.82 37878815.64

Including: Share of profit or loss of joint ventures and

associates

-8613603.76

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) 1656645.84

Credit impairment loss (“-” for loss) -27664804.19

Asset impairment loss (“-” for loss)

Asset disposal income (“-” for loss)

2. Operating profit (“-” for loss) -163674014.94 -88936755.88

Add: Non-operating income 1720057.44 141649.22

Less: Non-operating expense 30890.57 101484.58

3. Profit before tax (“-” for loss) -161984848.07 -88896591.24

Less: Income tax expense -38699601.30 -21239920.46

4. Net profit (“-” for net loss) -123285246.77 -67656670.78

4.1 Net profit from continuing operations (“-” for net loss) -123285246.77 -67656670.78

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

5. Other comprehensive income net of tax

Konka Group Co. Ltd. First Quarterly Report 2021

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 investments in other debt

obligations

5.2.3 Other comprehensive income arising from the

reclassification of financial assets

5.2.4 Credit impairment allowance for investments in other

debt obligations

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 -123285246.77 -67656670.78

7. Earnings per share

7.1 Basic earnings per share

7.2 Diluted earnings per share

5. Consolidated Cash Flow Statement

Unit: RMB

Item Q1 2021 Q1 2020

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of services 9512332772.71 8499871584.58

Net increase in customer deposits and interbank deposits

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

Konka Group Co. Ltd. First Quarterly Report 2021

Interest handling charges and commissions received

Net increase in interbank loans obtained

Net increase in proceeds from repurchase transactions

Net proceeds from acting trading of securities

Tax rebates 56409474.20 61099379.53

Cash generated from other operating activities 657621963.41 517064976.00

Subtotal of cash generated from operating activities 10226364210.32 9078035940.11

Payments for commodities and services 9476296648.41 8277120758.49

Net increase in loans and advances to customers

Net increase in deposits in the central bank and in interbank

loans granted

Payments for claims on original insurance contracts

Net increase in interbank loans granted

Interest handling charges and commissions paid

Policy dividends paid

Cash paid to and for employees 625328886.69 522535841.05

Taxes paid 185945308.90 497454218.72

Cash used in other operating activities 468034159.91 812148590.43

Subtotal of cash used in operating activities 10755605003.91 10109259408.69

Net cash generated from/used in operating activities -529240793.59 -1031223468.58

2. Cash flows from investing activities:

Proceeds from disinvestment 45012770.66 51626012.60

Return on investment 31075186.16 42185934.10

Net proceeds from the disposal of fixed assets intangible assets

and other long-lived assets

159251958.00 291834.00

Net proceeds from the disposal of subsidiaries and other

business units

34089192.68

Cash generated from other investing activities 101331124.10 484929444.44

Subtotal of cash generated from investing activities 370760231.60 579033225.14

Payments for the acquisition of fixed assets intangible assets

and other long-lived assets

1803853686.63 986208459.31

Payments for investments 188127428.68 400000.00

Net increase in pledged loans granted

Net payments for the acquisition of subsidiaries and other

business units

Cash used in other investing activities 180599856.00 88280000.00

Konka Group Co. Ltd. First Quarterly Report 2021

Subtotal of cash used in investing activities 2172580971.31 1074888459.31

Net cash generated from/used in investing activities -1801820739.71 -495855234.17

3. Cash flows from financing activities:

Capital contributions received 44368539.07 92900439.00

Including: Capital contributions by non-controlling interests

to subsidiaries

44368539.07 92900439.00

Borrowings raised 7240208717.59 5990188961.51

Cash generated from other financing activities 296375956.73 120900000.00

Subtotal of cash generated from financing activities 7580953213.39 6203989400.51

Repayment of borrowings 4466489496.89 3561043093.07

Interest and dividends paid 226688210.14 251247798.13

Including: Dividends paid by subsidiaries to non-controlling

interests

3087000.00

Cash used in other financing activities 171080346.77 80860476.44

Subtotal of cash used in financing activities 4864258053.80 3893151367.64

Net cash generated from/used in financing activities 2716695159.59 2310838032.87

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

equivalents

3140025.95 9479762.14

5. Net increase in cash and cash equivalents 388773652.24 793239092.26

Add: Cash and cash equivalents beginning of the period 4298056113.24 4493701917.22

6. Cash and cash equivalents end of the period 4686829765.48 5286941009.48

6. Cash Flow Statement of the Company as the Parent

Unit: RMB

Item Q1 2021 Q1 2020

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of services 999059567.78 2771899784.42

Tax rebates 22557838.62 20649207.83

Cash generated from other operating activities 217038045.37 2075822222.03

Subtotal of cash generated from operating activities 1238655451.77 4868371214.28

Payments for commodities and services 898514624.74 1450487246.54

Cash paid to and for employees 140791858.87 133423344.93

Taxes paid 2964844.09 4136871.33

Cash used in other operating activities 223573250.93 2873144580.53

Subtotal of cash used in operating activities 1265844578.63 4461192043.33

Net cash generated from/used in operating activities -27189126.86 407179170.95

2. Cash flows from investing activities:

Konka Group Co. Ltd. First Quarterly Report 2021

Proceeds from disinvestment 69047750.00 32450000.00

Return on investment 158365.75 15939565.72

Net proceeds from the disposal of fixed assets intangible assets

and other long-lived assets

40484.00

Net proceeds from the disposal of subsidiaries and other

business units

Cash generated from other investing activities 586521708.23 432059444.44

Subtotal of cash generated from investing activities 655727823.98 480489494.16

Payments for the acquisition of fixed assets intangible assets

and other long-lived assets

70146625.59 25216708.68

Payments for investments 196500000.00 167400000.00

Net payments for the acquisition of subsidiaries and other

business units

Cash used in other investing activities 1364896522.33 88280000.00

Subtotal of cash used in investing activities 1631543147.92 280896708.68

Net cash generated from/used in investing activities -975815323.94 199592785.48

3. Cash flows from financing activities:

Capital contributions received

Borrowings raised 4888475384.37 2292002445.87

Cash generated from other financing activities 2645944956.96

Subtotal of cash generated from financing activities 7534420341.33 2292002445.87

Repayment of borrowings 3520533434.80 2559852000.00

Interest and dividends paid 196717205.76 218167563.74

Cash used in other financing activities 2551627277.85 4759802.05

Subtotal of cash used in financing activities 6268877918.41 2782779365.79

Net cash generated from/used in financing activities 1265542422.92 -490776919.92

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

equivalents

1751291.25 2905864.39

5. Net increase in cash and cash equivalents 264289263.37 118900900.90

Add: Cash and cash equivalents beginning of the period 2910762592.99 1337342186.92

6. Cash and cash equivalents end of the period 3175051856.36 1456243087.82

Konka Group Co. Ltd. First Quarterly Report 2021

II Adjustments to the Financial Statements

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

New Standards Governing Leases from 2021

√ Applicable □ Not applicable

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

√ Yes □ No

(1) Consolidated Balance Sheet

Unit: RMB

Item 31 December 2020 1 January 2021 Adjustment

Current assets:

Monetary assets 5431530180.90 5431530180.90

Settlement reserve

Interbank loans granted

Held-for-trading financial assets 618249541.66 618249541.66

Derivative financial assets

Notes receivable 2358180193.96 2358180193.96

Accounts receivable 3900897623.59 3900897623.59

Accounts receivable financing 84057197.44 84057197.44

Prepayments 1183270543.41 1182471715.24 -798828.17

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract reserve

Other receivables 2145736640.60 2145209803.70 -526836.90

Including: Interest receivable 45109425.85 45109425.85

Dividends receivable 4947848.62 4947848.62

Financial assets purchased under resale agreements

Inventories 4521300677.41 4521300677.41

Contractual assets 2870006710.39 2870006710.39

Assets classified as held for sale

Current portion of non-current assets 112310158.82 112310158.82

Other current assets 1913146483.39 1913146483.39

Total current assets 25138685951.57 25137360286.50 -1325665.07

Non-current assets:

Loans and advances to customers

Investments in debt obligations

Konka Group Co. Ltd. First Quarterly Report 2021

Investments in other debt obligations

Long-term receivables 399497204.03 399497204.03

Long-term equity investments 4375833584.65 4375833584.65

Investments in other equity instruments 25343293.16 25343293.16

Other non-current financial assets 1878154796.76 1878154796.76

Investment property 538585668.29 538585668.29

Fixed assets 3178642017.84 3178642017.84

Construction in progress 9236643931.68 9236643931.68

Productive living assets

Oil and gas assets

Use rights assets 103838847.54 103838847.54

Intangible assets 1189191001.51 1189191001.51

R&D expense

Goodwill 675795873.17 675795873.17

Long-term prepaid expense 153198562.82 153198562.82

Deferred income tax assets 1265916437.39 1265916437.39

Other non-current assets 1820779170.74 1820779170.74

Total non-current assets 24737581542.04 24841420389.58 103838847.54

Total assets 49876267493.61 49978780676.08 102513182.47

Current liabilities:

Short-term borrowings 10990550475.78 10990550475.78

Borrowings from the central bank

Interbank loans obtained

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 1335987026.21 1335987026.21

Accounts payable 9632366325.76 9632366325.76

Advances from customers

Contractual liabilities 1217367735.94 1217367735.94

Financial assets sold under repurchase agreements

Customer deposits and interbank deposits

Payables for acting trading of securities

Payables for underwriting of securities

Payroll payable 476616244.45 476616244.45

Konka Group Co. Ltd. First Quarterly Report 2021

Taxes payable 508214059.16 508214059.16

Other payables 1999430899.69 1991555887.10 -7875012.59

Including: Interest payable 220837380.17 220837380.17

Dividends payable

Handling charges and commissions payable

Reinsurance payables

Liabilities directly associated with assets classified as

held for sale

Current portion of non-current liabilities 376896566.29 425552664.43 48656098.14

Other current liabilities 441774317.23 441774317.23

Total current liabilities 26979203650.51 27019984736.06 40781085.55

Non-current liabilities:

Insurance contract reserve

Long-term borrowings 5964748997.54 5964748997.54

Bonds payable 4993212788.32 4993212788.32

Including: Preferred shares

Perpetual bonds

Lease liabilities 61732096.92 61732096.92

Long-term payables 481409849.96 481409849.96

Long-term payroll payable 5248309.14 5248309.14

Provisions 102353567.91 102353567.91

Deferred income 446900524.64 446900524.64

Deferred income tax liabilities 75819231.93 75819231.93

Other non-current liabilities 106475449.02 106475449.02

Total non-current liabilities 12176168718.46 12237900815.38 61732096.92

Total liabilities 39155372368.97 39257885551.44 102513182.47

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 230185310.09 230185310.09

Less: Treasury stock

Other comprehensive income -16583042.42 -16583042.42

Specific reserve

Konka Group Co. Ltd. First Quarterly Report 2021

Surplus reserves 1211721109.67 1211721109.67

General reserve

Retained earnings 4595371391.63 4595371391.63

Total equity attributable to owners of the Company as the

parent

8428640176.97 8428640176.97

Non-controlling interests 2292254947.67 2292254947.67

Total owners’ equity 10720895124.64 10720895124.64

Total liabilities and owners’ equity 49876267493.61 49978780676.08 102513182.47

Notes for adjustment

The Ministry of Finance issued the revised "Accounting Standards for Business Enterprises No.

21-Leases"(Cai Kuai [2018]No.35) in 2018 and the Company implemented it since 1 January 2021.

According to the new standards governing leases enterprises implementing this standard for the

first time should adjust the amount of retained earnings and other related items in the financial

statements at the beginning of the year when the standard is first implemented based on the

cumulative impact of the first implementation of the standard and no adjustment is made to the

information for the comparable period.

Balance Sheet of the Company as the Parent

Unit: RMB

Item 31 December 2020 1 January 2021 Adjusted

Current assets:

Monetary assets 3481445560.17 3481445560.17

Held-for-trading financial assets 298497458.33 298497458.33

Derivative financial assets

Notes receivable 879589355.91 879589355.91

Accounts receivable 4473251691.85 4473251691.85

Accounts receivable financing 5659400.00 5659400.00

Prepayments 1021218285.46 1021218285.46

Other receivables 10034869353.07 10034869353.07

Including: Interest receivable 41138869.97 41138869.97

Dividends receivable 749431635.50 749431635.50

Inventories 202406456.36 202406456.36

Contractual assets

Assets classified as held for sale

Current portion of non-current assets

Other current assets 1020031186.39 1020031186.39

Total current assets 21416968747.54 21416968747.54

Konka Group Co. Ltd. First Quarterly Report 2021

Non-current assets:

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Long-term equity investments 8806166599.56 8806166599.56

Investments in other equity instruments 17940215.36 17940215.36

Other non-current financial assets 250230000.00 250230000.00

Investment property 406237236.91 406237236.91

Fixed assets 431762044.14 431762044.14

Construction in progress 132464938.18 132464938.18

Productive living assets

Oil and gas assets

Use rights assets 6321843.42 6321843.42

Intangible assets 59506272.63 59506272.63

R&D expense

Goodwill

Long-term prepaid expense 16532521.69 16532521.69

Deferred income tax assets 980095292.53 980095292.53

Other non-current assets 10867888.84 10867888.84

Total non-current assets 11111803009.84 11118124853.26 6321843.42

Total assets 32528771757.38 32535093600.80 6321843.42

Current liabilities:

Short-term borrowings 5052990048.93 5052990048.93

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 1344958738.50 1344958738.50

Accounts payable 6811467585.39 6811467585.39

Advances from customers

Contractual liabilities 723022740.95 723022740.95

Payroll payable 147391317.06 147391317.06

Taxes payable 4094133.23 4094133.23

Other payables 4275347622.57 4275347622.57

Including: Interest payable 215828625.04 215828625.04

Dividends payable

Konka Group Co. Ltd. First Quarterly Report 2021

Liabilities directly associated with assets classified as

held for sale

Current portion of non-current liabilities 5867425.49 8297306.42 2429880.93

Other current liabilities 6108675.36 6108675.36

Total current liabilities 18371248287.48 18373678168.41 2429880.93

Non-current liabilities:

Long-term borrowings 2930034612.32 2930034612.32

Bonds payable 4993212788.32 4993212788.32

Including: Preferred shares

Perpetual bonds

Lease liabilities 3891962.49 3891962.49

Long-term payables 17633249.67 17633249.67

Long-term payroll payable

Provisions 832465.72 832465.72

Deferred income 61530557.55 61530557.55

Deferred income tax liabilities 2334364.58 2334364.58

Other non-current liabilities 54162098.05 54162098.05

Total non-current liabilities 8059740136.21 8063632098.70 3891962.49

Total liabilities 26430988423.69 26437310267.11 6321843.42

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 112570352.72 112570352.72

Less: Treasury stock

Other comprehensive income -2682217.31 -2682217.31

Specific reserve

Surplus reserves 1227564785.19 1227564785.19

Retained earnings 2352385005.09 2352385005.09

Total owners’ equity 6097783333.69 6097783333.69

Total liabilities and owners’ equity 32528771757.38 32535093600.80 6321843.42

Konka Group Co. Ltd. First Quarterly Report 2021

Notes for adjustment

The Ministry of Finance issued the revised "Accounting Standards for Business Enterprises No.

21-Leases"(Cai Kuai [2018]No.35) in 2018 and the Company implemented it since 1 January 2021.

According to the new standards governing leases enterprises implementing this standard for the

first time should adjust the amount of retained earnings and other related items in the financial

statements at the beginning of the year when the standard is first implemented based on the

cumulative impact of the first implementation of the standard and no adjustment is made to the

information for the comparable period.

2. Retrospective Restatement of Previous Comparative Data due to the First Execution of the

New Standards Governing Leases from 2021

√ Applicable □ Not applicable

The Ministry of Finance issued the revised "Accounting Standards for Business Enterprises No.

21-Leases"(Cai Kuai [2018]No.35) in 2018 and the Company implemented it since 1 January 2021.

According to the new standards governing leases enterprises implementing this standard for the

first time should adjust the amount of retained earnings and other related items in the financial

statements at the beginning of the year when the standard is first implemented based on the

cumulative impact of the first implementation of the standard and no adjustment is made to the

information for the comparable period.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.

28 April 2021