深华发B：2021年第一季度报告全文（英文版）

Shenzhen Zhongheng Huafa Co. Ltd.Shenzhen Zhongheng Huafa Co. Ltd.April 2021

Shenzhen Zhongheng Huafa Co. Ltd.

Section I. Important Notes

Board of Directors and the Supervisory Committee of Shenzhen Zhongheng

Huafa Co. Ltd (hereinafter referred to as the Company) and its directors

supervisors and senior executives should guarantee the reality accuracy and

completion of the quarterly report there are no any fictitious statements

misleading statements or important omissions carried in this report and shall

take legal responsibilities individual and/or joint.

All Directors are attended the Board Meeting for Quarterly Report deliberation.

Li Zhongqiu person in charge of the Company Yang Bin person in charger of

accounting works and Wu Ai’jie person in charger of accounting organ

(accounting officer) hereby confirm that the Financial Statement of this

Quarterly Report is authentic accurate and complete.Shenzhen Zhongheng Huafa Co. Ltd.

Section II. Basic situation of the Company

I. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data

□Yes √ No

Current period

At the same period of last

year

Changes of this period over

same period of last year

Operating income (RMB) 190936203.57 87800584.55 117.47%

Net profit attributable to shareholders of

the listed company (RMB)

5566539.83 -400741.17 1489.06%

Net profit attributable to shareholders of

the listed company after deducting

non-recurring gains and losses (RMB)

5485566.41 -208179.52 2735.02%

Net cash flow arising from operating

activities (RMB)

-5125776.38 7931308.59 -164.63%

Basic earnings per share (RMB/Share) 0.0197 -0.0014 1507.14%

Diluted earnings per share (RMB/Share) 0.0197 -0.0014 1507.14%

Weighted average ROE 1.64% -0.12% 1.76%

At the end of the reporting

period

At the end of last year

Changes of this period-end

over same period-end of last

year

Total assets (RMB) 637533668.46 627779621.06 1.55%

Net assets attributable to shareholder of

listed company (RMB)

341815277.12 336248737.29 1.65%

Items and amount of non-recurring gains and losses

√ Applicable □ Not applicable

In RMB

Item

Amount from year-begin to

period-end

Note

Gains/losses from the disposal of non-current asset (including the

write-off that accrued for impairment of assets)

-6163.53

Governmental subsidy reckoned into current gains/losses (not

including the subsidy enjoyed in quota or ration according to

national standards which are closely relevant to enterprise’s

business)

6000.00

Gain or loss on the investment or management of assets 71186.44

Shenzhen Zhongheng Huafa Co. Ltd.

Other non-operating income and expenditure except for the

aforementioned items

10677.58

Less: impact on income tax 727.07

Total 80973.42 --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies

Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to

the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their

Securities to the Public --- Extraordinary Profit/loss explain reasons

□ Applicable √ Not applicable

In reporting period the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of

extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to

the Public --- Extraordinary Profit/loss

II. Total number of shareholders at the end of this report period and top ten shareholders

1. Total number of common shareholders at the end of this report period and top ten common shareholders

In shares

Total common stock shareholders in

reporting period-end

22456

Total preference shareholders

with voting rights recovered at

end of reporting period (if

applicable)

Top ten shareholders

Shareholder’s

name

Nature of

shareholder

Proportion of

shares held

Amount of shares

held

Amount of

restricted shares

held

Number of share pledged/frozen

State of share Amount

Wuhan

Zhongheng

Group

Domestic

non-state-owned

legal person

42.13% 119289894 0

Pledged 116100000

Frozen 119289894

SEG (HONG

KONG) CO.

LTD.

Overseas legal

person

5.85% 16569560 0

Pledged 0

Frozen 0

GOOD HOPE

CORNER

INVESTMENTS

LTD.

Overseas legal

person

2.50% 7072000 0

Pledged 0

Frozen 0

Changjiang

Securities

Brokerage

(Hongkong) Co.Ltd.Overseas legal

person

1.89% 5355249 0

Pledged 0

Frozen 0

Shenzhen Zhongheng Huafa Co. Ltd.

Guoyuan

Securities

Brokerage (Hong

Kong) Limited

Overseas legal

person

1.37% 3870117 0

Pledged 0

Frozen 0

Li Zhongqiu

Overseas nature

person

1.00% 2830000 0

Pledged 0

Frozen 0

China Merchants

Securities Hong

Kong Co. Ltd.State-owned legal

person

0.79% 2230608 0

Pledged 0

Frozen 0

LI SHERYN

ZHAN MING

Overseas nature

person

0.51% 1446100 0

Pledged 0

Frozen 0

Shengyin

Investment Co.Ltd.Overseas legal

person

0.50% 1408600 0

Pledged 0

Frozen 0

# Xu Xinfen

Domestic nature

person

0.45% 1288000 0

Pledged 0

Frozen 0

Top ten shareholders with unrestricted shares held

Shareholder’s name Amount of unrestricted shares held

Type of shares

Type Amount

Wuhan Zhongheng Group 119289894

RMB common

119289894

SEG (HONG KONG) CO. LTD. 16569560

Domestically

listed foreign

16569560

GOOD HOPE CORNER

INVESTMENTS LTD.

7072000

Domestically

listed foreign

7072000

Changjiang Securities Brokerage

(Hongkong) Co. Ltd.

5355249

Domestically

listed foreign

5355249

Guoyuan Securities Brokerage

(Hong Kong) Limited

3870117

Domestically

listed foreign

3870117

Li Zhongqiu 2830000

Domestically

listed foreign

2830000

China Merchants Securities Hong

Kong Co. Ltd.

2230608

Domestically

listed foreign

2230608

Shenzhen Zhongheng Huafa Co. Ltd.

LI SHERYN ZHAN MING 1446100

Domestically

listed foreign

1446100

Shengyin Investment Co. Ltd. 1408600

Domestically

listed foreign

1408600

# Xu Xinfen 1288000

RMB common

1288000

Explanation on associated

relationship among the aforesaid

shareholders

Among the top ten shareholders Li Zhongqiu is the actual controller of Wuhan Zhongheng

New Science & Technology Industrial Group Co. Ltd. and is a party acting in

concert.Shengyin Investment Co. Ltd. is an overseas wholly-owned subsidiary of Wuhan

Zhongheng group.The Company neither knew whether there exists associated relationship among the other

shareholders nor they belong to consistent actors that are prescribed in Measures for the

Administration of Disclosure of Shareholder Equity Changes of Listed Companies.

Explanation on top 10 common

shareholders involving margin

business (if applicable)

N/A

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement

dealing in reporting period

□ Yes √ No

The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back

agreement dealing in reporting period.

2. Total shareholders with preferred stock held and shares held by top ten shareholders with preferred

stock held

□ Applicable √ Not applicable

Shenzhen Zhongheng Huafa Co. Ltd.

Section III. Significant Events

I. Particulars about material changes in items of main accounting statement and financial

index and explanations of reasons

√Applicable □Not applicable

Item March 31 2021 January 1 2021 Y-o-y

changes

Reasons of changes

Other receivables

2060681.11

4466949.96

-53.87% Decrease in current accounts

Inventory

103742880.06

70502773.52

47.62% Stocking in this period

Other current assets

1129263.49

4255643.19

-73.46% The tax to be deducted is deducted for

the current period.Long-term prepaid

expenses

19361.35

77445.31

-75.00%Cloud service fee amortization

Short-term loans

20921296.00

12527808.00

67.00% Short-term bank loans were increased

in the current period.

Contract liabilities

171293.92

287140.66

-40.34%The deposit received in advance has

decreased during the period.

Employee

compensation

payable

3106406.38

5737366.59

-45.86% The prepaid wages and expenses are

paid in the current period

Other payables

18556536.88

27608281.01

-32.79% Decrease in current accounts

Interest payable

63086.88

26335.66

139.55%Short-term loans increased in the

current period.Item January to March

2021

January to March

2020

Y-o-y

changes

Reasons of changes

Operating income

190936203.57

87800584.55

117.47% Increase in orders this period

Operating cost

160681999.84

73672446.25

118.10% Increase in orders this period

Sales expense

9604962.16

3448537.85

178.52% Increase in orders this period

R&D expenses

1990208.94

908285.77

119.12% Increased in R&D investment in this

period

Other income

119520.00

64770.00

84.53% Amortization of deferred income for

the current period

Investment income 90.26% Increase in financial income during

Shenzhen Zhongheng Huafa Co. Ltd.

71186.44 37415.02 the current period

Non-operating

income

19464.75

5492.44

254.39% Government subsidy income from the

previous period

Non-operating

expenses

8950.00

263835.56

-96.61% Liquidated damages occurred in the

previous period

Income tax expense

1362439.81

-85032.71

-1702.25% Increase in profit for the period

Item January to March

2021

January to March

2020

Y-o-y

changes

Reasons of changes

Cash received from

the sale of goods

and the provision of

labor services

118847638.92

86584529.58

37.26% Increase in sales collection in this

period

Cash paid for

purchasing goods

and receiving labor

services

90764568.41

56760923.41

59.91% Increase in orders this period

Cash paid to and for

employees

18034045.23

8467600.61

112.98% Increase in orders this period

Taxes paid

8114109.92

2351100.26

245.12% Increase in orders this period

Cash received from

investment income

71186.44

37415.02

90.26%Margin interest increased in this

period

Net cash received

from the disposal of

fixed assets

intangible assets and

other long-term

assets

13000.00

91000.00

-85.71%Disposal of old equipment in the

previous period

Cash paid for the

purchase and

construction of fixed

assets intangible

assets and other

long-term assets

1624675.50

467211.58

247.74%Purchase production equipment in

this period

Other cash paid

relating to investing

activities

25000000.00

-100.00% Bank wealth management decreased

in this period

Cash received from

loans

20710525.00

6725056.80

207.96% Increase in short-term loans

Other cash paid

relating to financing

6408886.53

Increase acceptance margin in this

period

Shenzhen Zhongheng Huafa Co. Ltd.

activities

Influence on cash

and cash equivalents

due to fluctuation in

exchange rate

-124286.41

32336.78

484.35%The impact of exchange rate

fluctuations in the current period

II. Analysis and explanation of significant events and their influence and solutions

√ Applicable □Not applicable

(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology Industrial

Group Co. Ltd (hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to in

the announcement dated 30 April 2009) and pursuant to the contract since part of the assets of the Company

(namely two parcel of industrial lands located at Huafa road Gongming town Guangming new district Shenzhen

(the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763 No. of parcels were A627-005

andA627-007 and the aggregate area was 48200 sq.m) were the lands listed in the first batch of plan for 2010

Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint

cooperation the Company has not completed the transfer procedures in respect of the aforesaid land.The Company convoked the first extraordinary meeting of the Board in 2015 on February 16 2015 and the first

extraordinary general meeting of the Board in 2015 on March 4 2015 which considered and approved the“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area atGongming street Guangming new district Shenzhen” specified that the Company and Wuhan Zhongheng Group

shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots

and the respectively contributed and constructed above-ground buildings before the land development it is

estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total

consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of

2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewaland the progress of related transactions of ‘the updated units at Huafa Area Gong Ming Street Guangming New

District Shenzhen’” the company has signed the “Agreement on the cooperation of urban renewal project of theupdated units at Huafa Area Gong Ming Street Guangming New District Shenzhen” “Contract for thecooperative venture of reconstruction project for Huafa Industrial Park Gong Ming Street Guangming New

District” and “Agreement on housing acquisition and removal compensation and resettlement” with WuhanWuhan Zhongheng Group Shenzhen Vanke Real Estate Co. Ltd. (hereinafter referred to as “Shenzhen Vanke”)and Shenzhen Vanke Guangming Real Estate Development Co. Ltd. (hereinafter referred to as “VankeGuangming”).

On 12 September 2016 Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation ofShenzhen Zhongheng Huafa Co. Ltd.

urban renewal project of the updated units at Huafa Area Gong Ming Street Guangming New District Shenzhen”

against the Company and Wuhan Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) has

given a ruling in August 2017. On August 29 2018 the court accepted the compulsory execution application of

Shenzhen Vanke. In October 2019 as a number of outsiders filed an “execution objection” and applied for “noexecution” to Shenzhen Intermediate People’s Court the Shenzhen Intermediate People’s Court ruled to terminate

the enforcement procedure on March 20 2020. If the “execution objection” and “no execution” proposed by

outsiders are rejected according to law Shenzhen Vanke may continue to apply to the Shenzhen Intermediate

People’s Court to resume execution. In mid April 2020 Heng semiconductor sued the company in Shenzhen

intermediate people's court requiring the company to transfer the above two pieces of land and compensate for the

economic loss of 52 million yuan. As of the disclosure date of this report the case has not yet been

concluded.Progress of the case found more in the Notices released on Juchao website dated 14 Sept. 2016 1 Nov.

2016 16 Nov. 2016 on 18 Feb. 2017 24 March 2017 25 April 2017 1 July 2017 18 August 2017 9 Feb. 2018

25 Aug. 2018 and 7 Sept. 2018 respectively.

(ii) On 31 December 2015 the 88750047 shares held by Wuhan Zhongheng Group are pledge to China

Merchants Securities Assets Co. Ltd. with due date of 31 December 2016. On 1 Feb. 2016 Wuhan Zhongheng

Group pledge the 27349953 shares held to China Merchants Securities Assets Co. Ltd. with due date of 31

December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expired

on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end

of this period released controlling shareholder still not removed the pledge and the Company has apply by letter

relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice

released on Juchao website date 2 Feb. 2018.Wuhan Zhongheng Group received the first-instance judgment of Guangdong Higher People’s Court to the

“pledged securities repurchase dispute” case sued by China Merchants Securities Asset Management Co. Ltd. in

March 2021. Wuhan Zhongheng Group refused to accept the judgment and has appealed to the Supreme People's

Court the judgment of first instance has not yet taken effect. For details please refer to the company

announcement issued by the company on www.cninfo.com.cn on March 19 2021.(iii) The controlling shareholder Wuhan Zhongheng Group holds 119289894 shares of the Company’ stock

accounting for 42.13% of the total share capital of the Company of which 116489894 shares were judicially frozen

by Shenzhen Intermediate People's Court (hereinafter referred to as "Shenzhen Intermediate Court") on September

27 2016 which were frozen again by the Shenzhen Intermediate People's Court on December 14 2018 with a

frozen period of 36 months; the remaining 2800000 shares were frozen by the Shenzhen Intermediate People's

Court on May 29 2019 and were frozen again by the Higher People’s Court of Guangdong Province on July 5

2019. For details please refer to the company’s announcements published on Juchao Website dated October 27

2016 January 11 2019 May 31 2019 and August 7 2019.

Shenzhen Zhongheng Huafa Co. Ltd.

(iv) On September 29 2016 the company and its controlling shareholder Wuhan Zhongheng Group signed the

“Agency Contract” with V&T Law Firm. On October 8 2016 the three parties also signed the “Supplemental

Agreement for Agency Contract” it was agreed that V&T acted as an agent for the company and Wuhan

Zhongheng Group to deal with the arbitration case with Shenzhen Vanke. After losing the lawsuit due to

differences in the payment of attorney fees V&T sued our company and Wuhan Zhongheng Group to the

Shenzhen Court of International Arbitration and applied to the court to seize a bank account under our company’sname and part of our company dormitories please refer to “Other Announcements on the Progress InvolvingLitigation and Arbitration” (Announcement Numbers: 2018-43 2019-02) released by our company on Juchao

Website dated November 14 2018 and March 6 2019. 02. In November 2019 the Shenzhen Court of

International Arbitration ruled that the company and Wuhan Zhongheng Group paid the corresponding fees.

According to the “Agency Contract” and “Supplemental Agreement for Agency Contract” signed by the three

parties the loss of the arbitrament in this case was borne by Wuhan Zhongheng Group so it had no impact on thecompany’s profit. For details see the company’s “Other Announcements on the Progress Involving Litigation and

Arbitration” (Announcement No.: 2019-34) released on Juchao Website dated November 25 2019.

Summary of important issues Disclosure date Interim report disclosure index

Implementation progress of shares buy-back

□ Applicable √ Not applicable

Implementation progress of the reduction of repurchases shares by centralized bidding

□ Applicable √ Not applicable

III. Commitments completed in Period and those without completed till end of the Period

from actual controller shareholders related parties purchaser and companies

□ Applicable √ Not applicable

The Company has no commitments completed in Period and those without completed till end of the Period from actual controller

shareholders related parties purchaser and companies.IV. Financial asset investment

1. Securities investment

□ Applicable √ Not applicable

No security investment in the Period.

2. Derivative investment

□ Applicable √ Not applicable

No derivative investment in the Period.Shenzhen Zhongheng Huafa Co. Ltd.

V. Progress of investment projects with raised funds

□ Applicable √ Not applicable

VI. Prediction of business performance from January – June 2021

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the

warning of its material change compared with the corresponding period of the last year and explanation on reason

□ Applicable √ Not applicable

VII. Major contracts for daily operations

□ Applicable √ Not applicable

VIII. Trust financing

□ Applicable √ Not applicable

No trust financing in the Period.IX. Guarantee outside against the regulation

□Applicable √Not applicable

The Company had no guarantee outside against the regulation in the period.X. Non-operational fund occupation from controlling shareholders and its related party

□ Applicable √ Not applicable

The Company had no non-operational fund occupation form controlling shareholders and its related party in the period.XI. Registration form for receiving research communication and interview in the report

period

√ Applicable □ Not applicable

Date

Reception

location

Method

Type of

investors

Object

Main content

and information

provided

Index for the interview

and research

January 5 2021

Office of the

BOD locates in

6/F Huafa

Building

Telephone

communication

Individual Individual

Understand the

company's

production and

operation

situation

litigation

progress and the

N/A

Shenzhen Zhongheng Huafa Co. Ltd.

progress of

urban renewal

projects

Shenzhen Zhongheng Huafa Co. Ltd.

Section IV. Financial Statement

I. Financial statement

1. Consolidate balance sheet

Prepared by Shenzhen Zhongheng Huafa Co. Ltd.March 31 2021

In RMB

Item March 31 2021 March 31 2020

Current assets:

Monetary fund 57688251.58 60968053.58

Settlement provisions

Capital lent

Trading financial assets

Derivative financial assets

Note receivable 9506829.34 20240464.79

Account receivable 141260234.64 128063911.79

Receivable financing 9727239.72 10057385.11

Accounts paid in advance 35287786.09 39643255.11

Insurance receivable

Reinsurance receivables

Contract reserve of reinsurance

receivable

Other account receivable 2060681.11 4466949.96

Including: Interest receivable

Dividend receivable

Buying back the sale of financial

assets

Inventories 103742880.06 70166013.49

Contractual assets

Assets held for sale

Non-current asset due within one

year

Other current assets 1129263.49 4255643.19

Shenzhen Zhongheng Huafa Co. Ltd.

Total current assets 360403166.03 337861677.02

Non-current assets:

Loans and payments on behalf

Debt investment

Other debt investment

Long-term account receivable

Long-term equity investment

Investment in other equity

instrument

Other non-current financial assets

Investment real estate 46792579.70 47224662.27

Fixed assets 181745798.39 193605444.53

Construction in progress 740000.00 740000.00

Productive biological asset

Oil and gas asset

Right-of-use assets

Intangible assets 40383028.86 40820657.80

Expense on Research and

Development

Goodwill

Long-term expenses to be

apportioned

19361.35 77445.31

Deferred income tax asset 7383734.13 7383734.13

Other non-current asset 66000.00 66000.00

Total non-current asset 277130502.43 289917944.04

Total assets 637533668.46 627779621.06

Current liabilities:

Short-term loans 20921296.00 12527808.00

Loan from central bank

Capital borrowed

Trading financial liability

Derivative financial liability

Note payable 37089784.05 37416381.20

Account payable 120547983.80 98318239.88

Accounts received in advance

Shenzhen Zhongheng Huafa Co. Ltd.

Contractual liability 171293.92 287140.66

Selling financial asset of

repurchase

Absorbing deposit and interbank

deposit

Security trading of agency

Security sales of agency

Wage payable 3106406.38 5737366.59

Taxes payable 11967269.75 14204642.62

Other account payable 18556536.88 27608281.01

Including: Interest payable 63086.88 26335.66

Dividend payable

Commission charge and

commission payable

Reinsurance payable

Liability held for sale

Non-current liabilities due within

one year

12000000.00 12000000.00

Other current liabilities 9369289.56 18322972.81

Total current liabilities 233434975.36 226127947.79

Non-current liabilities:

Insurance contract reserve

Long-term loans 58000000.00 61000000.00

Bonds payable

Including: Preferred stock

Perpetual capital

securities

Lease liability

Long-term account payable

Long-term wages payable

Accrual liability 64411.00 64411.00

Deferred income 3924120.00 4043640.00

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities 61988531.00 65108051.00

Shenzhen Zhongheng Huafa Co. Ltd.

Total liabilities 295718391.34 291530883.77

Owner’s equity:

Share capital 283161227.00 283161227.00

Other equity instrument

Including: Preferred stock

Perpetual capital

securities

Capital public reserve 146577771.50 146577771.50

Less: Inventory shares

Other comprehensive income

Reasonable reserve

Surplus public reserve 77391593.25 77391593.25

Provision of general risk

Retained profit -165315314.63 -170881854.46

Total owner’ s equity attributable to

parent company

341815277.12 336248737.29

Minority interests

Total owner’ s equity 341815277.12 336248737.29

Total liabilities and owner’ s equity 637533668.46 627779621.06

Legal Representative: Li Zhongqiu

Person in charge of accounting works: Yang Bin

Person in charge of accounting institute: Wu Aijie

2. Balance Sheet of Parent Company

In RMB

Item March 31 2021 March 31 2020

Current assets:

Monetary funds 1575886.56 966379.17

Trading financial assets

Derivative financial assets

Note receivable

Account receivable

Receivable financing

Shenzhen Zhongheng Huafa Co. Ltd.

Accounts paid in advance 665035.03 73685.03

Other account receivable 91466272.68 93922057.92

Including: Interest receivable

Dividend receivable

Inventories 14806.50 14806.50

Contractual assets

Assets held for sale

Non-current assets maturing within

one year

Other current assets

Total current assets 93722000.77 94976928.62

Non-current assets:

Debt investment

Other debt investment

Long-term receivables

Long-term equity investments 186618400.00 186618400.00

Investment in other equity

instrument

Other non-current financial assets

Investment real estate 23655797.76 23957898.42

Fixed assets 96378435.71 96610714.88

Construction in progress 740000.00 740000.00

Productive biological assets

Oil and natural gas assets

Right-of-use assets

Intangible assets 4372527.09 4408763.52

Research and development costs

Goodwill

Long-term deferred expenses

Deferred income tax assets 7443826.11 7443826.11

Other non-current assets

Total non-current assets 319208986.67 319843364.57

Total assets 412930987.44 414820293.19

Current liabilities

Short-term borrowings

Shenzhen Zhongheng Huafa Co. Ltd.

Trading financial liability

Derivative financial liability

Notes payable

Account payable 9740367.33 10745840.16

Accounts received in advance

Contractual liability 70649.09 79195.32

Wage payable 818625.54 1476601.12

Taxes payable 8714006.22 7892878.33

Other accounts payable 19909799.93 21304919.43

Including: Interest payable

Dividend payable

Liability held for sale

Non-current liabilities due within

one year

12000000.00 12000000.00

Other current liabilities 3959.77

Total current liabilities 51253448.11 53208509.15

Non-current liabilities:

Long-term loans 58000000.00 61000000.00

Bonds payable

Including: preferred stock

Perpetual capital

securities

Lease liability

Long-term account payable

Long term employee compensation

payable

Accrued liabilities 64411.00 64411.00

Deferred income

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities 58064411.00 61064411.00

Total liabilities 109317859.11 114272920.15

Owners’ equity:

Share capital 283161227.00 283161227.00

Other equity instrument

Shenzhen Zhongheng Huafa Co. Ltd.

Including: preferred stock

Perpetual capital

securities

Capital public reserve 146587271.50 146587271.50

Less: Inventory shares

Other comprehensive income

Special reserve

Surplus reserve 77391593.25 77391593.25

Retained profit -203526963.42 -206656480.35

Total owner’s equity 303613128.33 300483611.40

Total liabilities and owner’s equity 412930987.44 414756531.55

3. Consolidated Profit Statement

In RMB

Item Current period Last period

I. Total operating income 190936203.57 87800584.55

Including: Operating income 190936203.57 87800584.55

Interest income

Insurance gained

Commission charge and

commission income

II. Total operating cost 184208445.12 88130200.33

Including: Operating cost 160681999.84 73672446.25

Interest expense

Commission charge and

commission expense

Cash surrender value

Net amount of expense of

compensation

Net amount of withdrawal of

insurance contract reserve

Bonus expense of guarantee

slip

Reinsurance expense

Tax and extras 643046.97 584743.27

Shenzhen Zhongheng Huafa Co. Ltd.

Sales expense 9604962.16 3448537.85

Administrative expense 9403968.16 8058091.66

R&D expense 1990208.94 908285.77

Financial expense 1884259.05 1458095.53

Including: Interest

expenses

1805136.09 2375650.33

Interest income 107550.38 128721.93

Add: other income 119520.00 64770.00

Investment income (Loss is

listed with “-”)

71186.44 37415.02

Including: Investment income

on affiliated company and joint venture

The termination of income

recognition for financial assets measured

by amortized cost(Loss is listed with “-”)

Exchange income (Loss is

listed with “-”)

Net exposure hedging income

(Loss is listed with “-”)

Income from change of fair

value (Loss is listed with “-”)

Loss of credit impairment

(Loss is listed with “-”)

Losses of devaluation of asset

(Loss is listed with “-”)

Income from assets disposal

(Loss is listed with “-”)

III. Operating profit (Loss is listed with

“-”)

6918464.89 -227430.76

Add: Non-operating income 19464.75 5492.44

Less: Non-operating expense 8950.00 263835.56

IV. Total profit (Loss is listed with “-”) 6928979.64 -485773.88

Less: Income tax expense 1362439.81 -85032.71

V. Net profit (Net loss is listed with “-”) 5566539.83 -400741.17

(i) Classify by business continuity

1.continuous operating net profit(net loss listed with ‘-”)

5566539.83 -400741.17

Shenzhen Zhongheng Huafa Co. Ltd.

2.termination of net profit (net losslisted with ‘-”)

(ii) Classify by ownership

1.Net profit attributable to owner’s

of parent company

5566539.83 -400741.17

2.Minority shareholders’ gains and

losses

VI. Net after-tax of other comprehensive

income

Net after-tax of other comprehensive

income attributable to owners of parent

company

(i) Other comprehensive income

items which will not be reclassified

subsequently to profit of loss

1.Changes of the defined

benefit plans that re-measured

2.Other comprehensive

income under equity method that cannot

be transfer to gain/loss

3.Change of fair value of

investment in other equity instrument

4.Fair value change of

enterprise's credit risk

5. Other

(ii) Other comprehensive income

items which will be reclassified

subsequently to profit or loss

1.Other comprehensive

income under equity method that can

transfer to gain/loss

2.Change of fair value of

other debt investment

3.Amount of financial assets

re-classify to other comprehensive

income

4.Credit impairment

provision for other debt investment

5.Cash flow hedging reserve

Shenzhen Zhongheng Huafa Co. Ltd.

6.Translation differences

arising on translation of foreign currency

financial statements

7.Other

Net after-tax of other comprehensive

income attributable to minority

shareholders

VII. Total comprehensive income 5566539.83 -400741.17

Total comprehensive income

attributable to owners of parent Company

5566539.83 -400741.17

Total comprehensive income

attributable to minority shareholders

VIII. Earnings per share:

(i) Basic earnings per share 0.0197 -0.0014

(ii) Diluted earnings per share 0.0197 -0.0014

Enterprise combine under the same control in the Period the combined party realized net profit of 0 Yuan before combination and

realized 0 Yuan at last period for combined party

Legal Representative: Li Zhongqiu

Person in charge of accounting works: Yang Bin

Person in charge of accounting institute: Wu Aijie

4. Profit Statement of Parent Company

In RMB

Item Current period Last period

I. Operating income 10890563.23 7437448.02

Less: Operating cost 1783550.06 613839.48

Taxes and surcharge 277510.56 257246.31

Sales expenses

Administration expenses 2938581.71 3553655.31

R&D expenses

Financial expenses 1709732.01 2015272.00

Including: interest

expenses

1709745.85 2015830.25

Interest income 503.64 3734.78

Shenzhen Zhongheng Huafa Co. Ltd.

Add: other income

Investment income (Loss is

listed with “-”)

Including: Investment income

on affiliated Company and joint venture

The termination of

income recognition for financial assets

measured by amortized cost (Loss is

listed with “-”)

Net exposure hedging income

(Loss is listed with “-”)

Changing income of fair

value (Loss is listed with “-”)

Loss of credit impairment

(Loss is listed with “-”)

Losses of devaluation of asset

(Loss is listed with “-”)

Income on disposal of assets

(Loss is listed with “-”)

II. Operating profit (Loss is listed with

“-”)

4181188.89 997434.92

Add: Non-operating income 0.35

Less: Non-operating expense 8500.00

III. Total Profit (Loss is listed with “-”) 4172689.24 997434.92

Less: Income tax 1043172.31 249358.73

IV. Net profit (Net loss is listed with

“-”)

3129516.93 748076.19

(i) continuous operating net profit(net loss listed with ‘-”)

3129516.93 748076.19

(ii) termination of net profit (netloss listed with ‘-”)

V. Net after-tax of other comprehensive

income

(i) Other comprehensive income

items which will not be reclassified

subsequently to profit of loss

1.Changes of the defined

benefit plans that re-measured

Shenzhen Zhongheng Huafa Co. Ltd.

2.Other comprehensive

income under equity method that cannot

be transfer to gain/loss

3.Change of fair value of

investment in other equity instrument

4.Fair value change of

enterprise's credit risk

5. Other

(ii) Other comprehensive income

items which will be reclassified

subsequently to profit or loss

1.Other comprehensive

income under equity method that can

transfer to gain/loss

2.Change of fair value of

other debt investment

3.Amount of financial

assets re-classify to other

comprehensive income

4.Credit impairment

provision for other debt investment

5.Cash flow hedging

reserve

6.Translation differences

arising on translation of foreign

currency financial statements

7.Other

VI. Total comprehensive income 3129516.93 748076.19

VII. Earnings per share:

(i) Basic earnings per share 0.0111 0.0026

(ii) Diluted earnings per share 0.0111 0.0026

5. Consolidated Cash Flow Statement

In RMB

Item Current period Last period

I. Cash flows arising from operating

activities:

Cash received from selling 118847638.92 86584529.58

Shenzhen Zhongheng Huafa Co. Ltd.

commodities and providing labor

services

Net increase of customer deposit

and interbank deposit

Net increase of loan from central

bank

Net increase of capital borrowed

from other financial institution

Cash received from original

insurance contract fee

Net cash received from reinsurance

business

Net increase of insured savings

and investment

Cash received from interest

commission charge and commission

Net increase of capital borrowed

Net increase of returned business

capital

Net cash received by agents in sale

and purchase of securities

Write-back of tax received 1717004.00

Other cash received concerning

operating activities

1009951.00 1372807.06

Subtotal of cash inflow arising from

operating activities

121574593.92 87957336.64

Cash paid for purchasing

commodities and receiving labor

service

90764568.41 56760923.41

Net increase of customer loans and

advances

Net increase of deposits in central

bank and interbank

Cash paid for original insurance

contract compensation

Net increase of capital lent

Cash paid for interest commission

charge and commission

Shenzhen Zhongheng Huafa Co. Ltd.

Cash paid for bonus of guarantee

slip

Cash paid to/for staff and workers 18034045.23 8467600.61

Taxes paid 8114109.92 2351100.26

Other cash paid concerning

operating activities

9787646.74 12446403.77

Subtotal of cash outflow arising from

operating activities

126700370.30 80026028.05

Net cash flows arising from operating

activities

-5125776.38 7931308.59

II. Cash flows arising from investing

activities:

Cash received from recovering

investment

Cash received from investment

income

71186.44 37415.02

Net cash received from disposal of

fixed intangible and other long-term

assets

13000.00 91000.00

Net cash received from disposal of

subsidiaries and other units

Other cash received concerning

investing activities

25000000.00

Subtotal of cash inflow from investing

activities

84186.44 25128415.02

Cash paid for purchasing fixed

intangible and other long-term assets

1624675.50 467211.58

Cash paid for investment

Net increase of mortgaged loans

Net cash received from

subsidiaries and other units obtained

Other cash paid concerning

investing activities

25000000.00

Subtotal of cash outflow from investing

activities

1624675.50 25467211.58

Net cash flows arising from investing

activities

-1540489.06 -338796.56

III. Cash flows arising from financing

Shenzhen Zhongheng Huafa Co. Ltd.

activities

Cash received from absorbing

investment

Including: Cash received from

absorbing minority shareholders’

investment by subsidiaries

Cash received from loans 20710525.00 6725056.80

Other cash received concerning

financing activities

Subtotal of cash inflow from financing

activities

20710525.00 6725056.80

Cash paid for settling debts 15419668.00 20548487.80

Cash paid for dividend and profit

distributing or interest paying

1780079.26 2393884.15

Including: Dividend and profit of

minority shareholder paid by

subsidiaries

Other cash paid concerning

financing activities

6408886.53

Subtotal of cash outflow from financing

activities

23608633.79 22942371.95

Net cash flows arising from financing

activities

-2898108.79 -16217315.15

IV. Influence on cash and cash

equivalents due to fluctuation in

exchange rate

-124286.41 32336.78

V. Net increase of cash and cash

equivalents

-9688660.64 -8592466.34

Add: Balance of cash and cash

equivalents at the period -begin

30050989.33 36645061.61

VI. Balance of cash and cash

equivalents at the period -end

20362328.69 28052595.27

6. Cash Flow Statement of Parent Company

In RMB

Item Current period Last period

I. Cash flows arising from operating

activities:

Shenzhen Zhongheng Huafa Co. Ltd.

Cash received from selling

commodities and providing labor

services

12621650.08 9931734.48

Write-back of tax received

Other cash received concerning

operating activities

4883321.54 3939188.22

Subtotal of cash inflow arising from

operating activities

17504971.62 13870922.70

Cash paid for purchasing

commodities and receiving labor

service

Cash paid to/for staff and workers 964773.82 622769.26

Taxes paid 773606.33 1239019.63

Other cash paid concerning

operating activities

5419192.42 7205331.06

Subtotal of cash outflow arising from

operating activities

7157572.57 9067119.95

Net cash flows arising from operating

activities

10347399.05 4803802.75

II. Cash flows arising from investing

activities:

Cash received from recovering

investment

Cash received from investment

income

Net cash received from disposal of

fixed intangible and other long-term

assets

Net cash received from disposal of

subsidiaries and other units

Other cash received concerning

investing activities

Subtotal of cash inflow from investing

activities

Cash paid for purchasing fixed

intangible and other long-term assets

Cash paid for investment

Net cash received from

Shenzhen Zhongheng Huafa Co. Ltd.

subsidiaries and other units obtained

Other cash paid concerning

investing activities

Subtotal of cash outflow from investing

activities

Net cash flows arising from investing

activities

III. Cash flows arising from financing

activities

Cash received from absorbing

investment

Cash received from loans

Other cash received concerning

financing activities

Subtotal of cash inflow from financing

activities

Cash paid for settling debts 3000000.00 2000000.00

Cash paid for dividend and profit

distributing or interest paying

1710249.49 2015830.25

Other cash paid concerning

financing activities

Subtotal of cash outflow from financing

activities

4710249.49 4015830.25

Net cash flows arising from financing

activities

-4710249.49 -4015830.25

IV. Influence on cash and cash

equivalents due to fluctuation in

exchange rate

V. Net increase of cash and cash

equivalents

5637149.56 787972.50

Add: Balance of cash and cash

equivalents at the period -begin

737682.09 2046143.44

VI. Balance of cash and cash

equivalents at the period -end

6374831.65 2834115.94

Shenzhen Zhongheng Huafa Co. Ltd.

II. Explanation on financial statement adjustment

1. Financial statement adjustment at the beginning of the first year when implementation of new leasing

rules from 2021

□Applicable √Not applicable

2. Retrospective adjustment of the comparative data for initial new leasing rules from 2021

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