Stock Code: 000413; 200413 Stock abbreviation: Tunghsu Optoelectronic; Tunghsu B No: 2019-025

Tunghsu Optoelectronic

2018 Annual Report Summary

I. Important Notice

This annual report summary is taken form the full text of the Annual Report. Investors are advised to read

carefully the full text of the Annual Report published on the media designated by China Securities Regulatory

Commission in order to fully understand the Company’s operation results financial position and future plan.

Declaration

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

Non-standard auditor’s opinion

□ Applicable √ Not applicable

Plans for profit distribution on ordinary shares or conversion of capital reserves into share capital proposed to the

Board during the reporting period.

√ Applicable □Not applicable

Whether provident fund reserve for share capital

□ Yes √ No

The profit distribution proposal reviewed and approved by the boarding meeting was summarized as follows: The

total share of 5730250118 are the base of Company‘s total share capital. The Company would distribute cash

dividend to all the shareholders at the rate of CNY 0.70 for every 10 shares (with tax inclusive) 0 bonus shares（including tax）and no reserve would be converted into share capital.Plans for profit distribution on preference shares for the reporting period approved by the Board

□ Applicable √ Not applicable

II. Basic information about the Company

1. Company profile

Stock abbreviation

Tunghsu Optoelectronic

Tunghsu B

Stock code 000413 200413

Stock exchange for listing Shenzhen Stock Exchange

Contact person and contact manner Board secretary Securities affairs Representative

Name Gong Xin Wang Qingfei

Contact address

No.1 Caiyuan Street Xicheng District

Beijing

No.1 Caiyuan Street Xicheng District

Beijing

Tel 010-63541061 010-63541061

Fax 010-63541061 010-63541061

E-mail gongxin_dx@126.com wangqingfei@dong-xu.com

2. Major operations or products during the reporting period

The Company is a leading manufacturer of optoelectronic display materials and a comprehensive service provider

of intelligent manufacturing. In the field of optoelectronic display materials With a liquid crystal glass substrate

production capacity ranked first in China and fourth in the world the Company makes a horizontal layout in cover

glass originals cambered cover glass optical films color filters sapphire and other key optoelectronic display

materials and stands out with an industrial cluster advantage; in high-end equipment manufacturing the Company

takes advantage of the technology spillover effect of its independently developed complete-set glass substrate

manufacturing equipment to fulfill an in-depth exploration for high-end intelligent equipment in the

optoelectronic industry chain while extending the high-end equipment manufacturing business to a variety of

areas and acting as its important income and profit source; in new energy automobile the Company takes Sunlong

Bus as carrier to spare no effort to promote the development of such sectors as new energy buses and logistics

vehicles and work hard to build the new energy automobile business to its another important income and profit

source; in addition the Company develops its main businesses in conjunction with its building installation and

electronic communication seen as value-added businesses which supplement its main businesses.

1) Optoelectronic Display Materials Business System

a) LCD glass substrate business

The liquid crystal glass substrate is a core raw material to the upstream of the liquid crystal display panel with

extremely high requirements of manufacturing process. Based on the breakthrough in the field of complete-set of

liquid crystal glass substrate production equipment the company took the lead in breaking the international

monopoly and achieved the home-making of liquid crystal glass substrate. The Company is the only enterprise in

China that masters the two kinds of glass substrate production processes-namely overflow fusion method and the

floating method-at the same time. Currently the Company possesses four production bases of liquid crystal glass

substrate respectively located in Zhengzhou Shijiazhuang Wuhu and Fuzhou covering G5 G6 and G8.5

TFT-LCD liquid crystal glass substrates. The company has 20 liquid crystal glass substrate production lines

(including construction-in-progress and proposed projects) with that the mass production capacity tops first in

China and ranks fourth in the world.

b) Other display material business

To strengthen the competitiveness and profitability of its business of display materials and comply with the OLED

flexible display development trend the Company adopts a horizontal industry train extension strategy. Since 2015

it has laid out in cover glass originals cambered cover glass optical films color filters sapphire and other

businesses hence its business structure has been optimized and industrial cluster effect has taken shape.

Cover glass is intended for protecting touch modules and display screens. The Company has a float-process

high-aluminum cover glass substrate original production line with a high-aluminum cover glass substrate original

production capacity ranked first in China and third in the world; cambered cover glass is also known as 3D cover

glass and characterized by curving flexibility thinness transparency cleanliness fingerprint resistance dazzle

resistance weathering resistance etc. and can promote the touch feelings of intelligent terminal products. The

cambered cover glass production line with a production capacity of nearly 5 million sheets built by the Company

in 2018 has been available for production and sales in batches. Applicable to flexible display this product is one

of powerful measures taken by the Company to comply with the OLED flexible display development trend; the

Company's optical film products can cover diffusion reflection prism composite prism and other sub-areas and

are mainly used in TFT-LCD backlight; color filter is a key component for LCD colorization and the Company's

staple is G5 color filters; sapphire is extensively applied in LED substrate materials and optical elements among

other fields and the Company's current staples include 2-inch and 4-inch LED substrate products.c) Graphene preparation and industrialization business

The graphene with excellent optical electrical thermal and mechanical properties has important application

prospects in the material science energy etc. and it is considered to be a revolutionary new material. In recent

years the Company has highlighted laying out in one of strategic emerging industries--industrial application of

graphene. In the report period the Company successfully kept pace with University of Manchester of UK and

other famous universities and scientific research institutions in the world regarding industrial application of

graphene and sped up improving development of its own products using graphene by internationally advanced

equipment and technical reserves. Based on such four developed industrial product lines as graphene-based

lithium ion battery graphene electric heating graphene energy-saving illumination and graphene anti-corrosion

coating the Company made breakthroughs in techniques of preparation of high-quality graphene and its

derivative raw materials and kept actively exploring new techniques for preparation of graphene and other

two-dimensional materials. At the moment the Company's products of industrial application of graphene mainly

cover all kinds of graphene products graphene-clad anode materials graphene-based lithium ion battery graphene

high-power LED series light graphene intelligent electric heating graphene anti-corrosion coating

graphene-based solid-state flexible lithium ion battery and other products some of which have been supplied in

batches and sold overseas.

2) High-end equipment and technical services business

By a powerful independent R&D capacity the Company takes the lead in breaking the international

comprehensive mold regarding production equipment and technology and becomes China's only company that has

a complete-set liquid crystal glass substrate production process and equipment manufacturing capacity at the same

time. After years of development the Company has completed an in-depth exploration for high-end intelligent

equipment in optoelectronic industry chain and kept developing the business market of high-end equipment with a

high technology and additional value by the technology spillover effect of its independently developed

complete-set glass substrate production equipment in the context that equipment substitutes labor and meets

intelligent efficient production in national industrial manufacturing. Step by step it has become a hi-tech

equipment manufacturer that provides design R&D and manufacturing of high-end intelligent equipment

semiconductor equipment and automatic production line equipment for high-end customers in TFT-LCD and

OLED panel display industry. Besides the Company reached out to intelligent platform robotics expected to

render a new driver to steady development of its high-end equipment business through M&A of Sanbao

Innovation in 2018.

3) New Energy Bus Business

The Company acquired Sunlong Bus in 2017 marking that it is duly stepping into the new energy bus area. At the

moment Sunlong Bus's new energy automobile products including BEV hybrid and fuel cell and other new

energy commercial vehicles are mainly oriented in Mainland China (save Qinghai and Tibet) and sold in batches

to South Korea Southeast Asia Middle East South America and Africa among other regions. In 2018 Sunlong

Bus was ranked in the eighth place for the eighth time regarding sales; by sub-area Sunlong's new energy

highway bus and bus sales were ranked in the fourth and tenth place respectively. In addition to outstanding sales

Sunlong Bus keeps developing new techniques to replace the prior ones and in hydrogen cell bus manufacturing

in particular Since the first hydrogen fuel cell bus was produced in 2007 it has accumulated years of experience.，In 2018 the Company made a full range of major types of hydrogen cell buses ranging from 8m to 12m wherein

10m and 12m urban hydrogen cell buses were successfully incorporated into List of Recommended Types of New

Energy Automobiles in Publicity and Application; in intelligent public transportation product manufacturing

Sunlong Bus worked together with DeepBlue Technology to jointly develop an intelligent Panda Bus

implementing scenario-based application of artificial intelligence and offering a new development function for the

Company's new energy automobile business.

4) Other businesses

a) Construction & installation business

The Company runs its building installation business supplementing its main businesses in a variety of models such

as integrated underground pipe gallery municipal infrastructure sponge city and smart city based on other key

sectors provides infrastructure and construction engineering services in new materials energy-saving

environmental protection bridge engineering and other areas and makes intelligent products and quality services

in conjunction with each other to boost its growth.

b) Electronic communication business

The electronic communication business is a replenishment to the Company's main businesses. The Company

integrates high-end equipment and liquid crystal display materials customer resources and uses its mature

marketing channels to keep increasing import and export channels for liquid crystal display modules memory

chips high-end peripheral and complete-built-unit electronic products and render quality integrated services for

customers with personalized needs.

3. Major accounting data and financial indicators

1) Major accounting data and financial indicators for the last three years

Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data.√Yes □No

Reasons for retrospective restatements:

Business merger under the same control.

In RMB

2018 2017 Changed 2016

over last

year（％）

Before adjustment After adjustment

After

adjustmen

t

Before adjustment After adjustment

Operating revenue（Yuan）

28211700021.12 17336364158.13 17276969039.03 63.29% 7632049549.25 7631092002.07

Net profit attributable to

the shareholders of the

listed company（Yuan）

2163607505.39 1743666827.25 1730174564.57 25.05% 1303685863.90 1301466332.10

Net profit after

deducting of

non-recurring gain/loss

attributable to the

shareholders of listed

company（Yuan）

2045875472.28 1539583478.72 1534569793.43 33.32% 961311896.60 961311896.60

Net Cash flow generated

by business operation（Yuan）

388252004.52 1265773428.34 1253178511.31 -69.02% 748957164.24 741861295.45

Basic earning per

share(Yuan/Share)

0.38 0.33 0.32 18.75% 0.28 0.28

Diluted gains per

share(Yuan/Share)(Yuan/

Share)

0.38 0.33 0.32 18.75% 0.28 0.28

Net asset earning ratio

（%）

6.83% 7.09% 6.95% -0.12% 7.55% 7.54%

End of 2018

End of 2017

Changed

over last

year（％）

End of 2016

Before adjustment After adjustment

After

adjustmen

t

Before adjustment Before adjustment

Gross assets（Yuan） 72576122859.60 67683329226.91 68611332346.16 5.78% 50287380415.68 51373374293.43

Net assets attributable to

shareholders of the listed

company（Yuan）

32521130925.14 30922796455.46 30941044388.04 5.11% 23286206822.68 23325208072.11

2) Main Financial Index by Quarters

In RMB

First quarter Second quarter Third quarter Fourth quarter

Operating income 4665570392.15 6464281398.73 6133715988.34 10948132241.90

Net profit attributable to the

shareholders of the listed company

425984601.17 432311487.91 456861464.93 848449951.38

Net profit after deducting of

non-recurring gain/loss attributable

to the shareholders of listed

company

391131962.40 420213516.37 440653348.34 793876645.17

Net Cash flow generated by

business operation

-1057540776.02 1141158063.68 -599044017.62 903678734.48

Whether significant variances exist between the above financial index or the index with its sum and the financial

index of the quarterly report as well as semi-annual report index disclosed by the Company.□ Yes √ No

4 Share capital and shareholders

1) Number of holders of ordinary shares and preference shares with restored voting right and Top 10

shareholders

In Share

Total number of

common

shareholders at the

end of the

reporting period

350362(includ

ing 333148

shareholdders

hoding A shares

and 17214

shareholders

holding B

shares)

Total

shareholders

at the end of

the month

from the date

of disclosing

the annual

report

357654(includ

ing340582

shareholdders

hoding A shares

and 17072

shareholders

holding B shares)

The total num

ber of preferre

d shareholders

voting rights

restored at per

iod-end

(if any)(See

Notes 8)

0

Total

preferred sharehol

ders at the end of

the month from the

date of disclosing

the annual report(if

any)(See Notes 8)

0

Particulars about shares held above 5% by shareholders or top ten shareholders

Shareholders

Nature of

shareholder

Proportion

of shares

held（%）

Number of shares

held at period -end

Changes in

reporting period

Amount of

restricted

shares held

Number of share pledged/frozen

State of share Amount

Tunghsu Group

Domestic Non

-State-owned

legal person

15.97% 915064091 352006791 Pledge 799643042

Shijiazhuang

Baoshi Electronic

Group Co. Ltd.

Domestic Non

-State-owned

legal person

5.80% 332382171 Pledge 153520000

Shanghai Huimao

Enterprise

Management Co.Ltd.

Domestic Non

-State-owned

legal person

4.58% 262626262 262626262 Pledge 80240722

Minsheng Royal

Fund

Management Co.Ltd － -Ping An

Bank-Daye

Trust·Zengli 2

single Fund Trust

Other 1.70% 97192224

Qianhai equity

investment fund

(limited

partnership)

Domestic Non

-State-owned

legal person

1.45% 83341345

Tunghsu

Optoelectronic

Technology Co.Ltd. － The first

ESOP

Other 1.27% 72639296

Beixin Ruifeng

Fund － China

Merchants Bank

－ Daye Trust －

Daye Trust·Profit

increase 3 single

fund plan

Other 1.08% 62095032

Shenzhen Taianer

Information

Technology Co.Ltd.

Domestic Non

-State-owned

legal person

1.07% 61165682 Pledge 55265682

Zhonghai Trust

Co. Ltd. －

Zhonghai Trust－

Tunghsu

Optoelectronic

ESOP pooled

Fund trust

Other 0.92% 52555280

China Life AMP

Asset

Management Co.Other 0.85% 48619336

Ltd. － Bohai

Bank－Minsheng

Trust － China

Minsheng

Trust-Zhicheng

No.192 Tunghsu

Optoelectronic

Private placement

fund trust plan

Explanation on shareholders

participating in the margin trading

business

The top 10 tradable shareholders of Shijiazhuang Baoshi Electronic Group Co. Ltd. and the

top ten shareholders of Tunghsu

Group Co. Ltd. have relationship and constitute persons taking concerted action.Notes to the shareholders involved in

financing securities (if any)(See

Notes 4)

Not applicable

2) Total preference shareholders and the shares held by the top 10 preference shareholders

□ Applicable √ Not applicable

No preference shares in the Company.

3) Block diagram of the ownership and control relations between the Company and the actual controller

Corporation bonds

Whether or not the Company public offering corporation bonds in stock exchange which undue or without

payment in full at maturity on the approval date for annual report disclosed

Yes

1) Basic information of the corporate bonds

Bond Name

Abbreviated Bond

Name

Code Date Due

Bond Balance

(RMB10000)

Interest Rate

2015- corporate

bond of Tunghsu

Optoelectronic

Technology Co. Ltd

15 Tunghsu bonds 112243 May 192020 95200 6.68%

Information about interest paid

and bonds honored during the

reporting period

The first period bond interest 60000000.00 was paid in full amount on schedule in the current

period

2) Information about the rating of the corporate bonds

On June 14 2018 United Ratings Co. Ltd. issued trace rating report LHPZ [2018] No.960 based on the

company’s 2016 Annual Report. By tracking and rating the long-term credit status of the main body of the

company and corporate bonds publicly issued by the company the rating results is determined as the long-termcredit rating AA+，and its outlook is "Steady".” (For details please refer to the "Tracking Rating Announcement"of the company disclosed on www.cninfo.com on June 16 2018)

According to the United Rating Co.Ltd’s requirements on tacking and rating a regular rating shall be carried out

within 2 months after the company’s disclosure of 2018 annual report. Also the United Rating Co.Ltd shall carry

out randomly tracking and rating during the duration of the corporate bonds based on relevant information.

3) The key accounting data and financial indicators of the latest two years to the end of the reporting

period

In RMB10000

Items 2018 2017

Rate of change in the same

period

Debt ratio 53.95% 53.11% 0.84%

EBITDA/Total debts 12.51% 12.19% 0.32%

Interest coverage ratio 36.79 22.23 65.50%

III. Discussion and Analysis of the Management

1. Business Operation summary in the reporting period

Whether the company needs to comply with the disclosure requirements of the particular industry

No

In 2018 Tunghsu Optoelectronic kept forging ahead despite the difficulty and challenge. In the report period the

Company's management and employees made consorted efforts to steadily push forward all its production and

operation activities and advanced all the work concerning operation plans worked out by its board of directors. In

2018 the Company kept innovating based on the prior results and focused on technical innovation to proceed with

upgrading and growth of the existing industry. In the context that industrial collaboration and cluster effect drove

each other the Company further optimized its industry chain layout in optoelectronic display materials high-end

intelligent manufacturing new energy automobile and graphene and promoted production capacity and growth to

implement rapid and efficient growth. In the report period the Company took the initiative to blaze new trails in a

pioneering spirit and forge ahead with determination. It implemented an operating income of RMB 28.212 billion

up 63.29% compared with 2017; it implemented a net profit attributable to listed company shareholders of RMB

2.153 billion up 24.43% compared with 2017.

1) Optoelectronic display material business

a) Ever-rising performance driven by advanced glass substrate business

In 2018 an increase in the demand for jumbo display screens at panel market drove an ever-increasing demand for

display screen glass substrates. In the context the Company's glass substrate production agreed with the demand

of liquid crystal panels leading a steady development in its glass substrate business. At the moment the Company

has five liquid crystal glass substrate production bases located at Zhengzhou Shijiazhuang Wuhu Fuzhou and

Yingkou and more than 20 liquid crystal glass substrate production lines covering G5 G6 and G8.5 liquid crystal

glass substrate products and can provide high-quality glass substrate products for downstream panel customers

with different dimension needs. In compliance with the development trend and technical reform of jumbo and

multi-screen times the Company effectively yield and output rate of jumbo liquid crystal glass substrates lowers

production cost and boosts stable growth of performance. In the report period the Company took advantage of

strengths of multiple dimensions and types of liquid crystal glass substrate products and full coverage of major

panel manufacturers in Mainland China and Taiwan including BOE Century Technology (Shenzhen) Corporation

Infovision Optoelectronics Shenzhen Tianma AU Optronics etc. to implement a sales income of RMB 4.716

billion in the year. In the report period the project of "key techniques for highly uniform ultra-clean glass

substrate for optoelectronic display equipment development and industrialization" which the Company's

wholly-owned subsidiaries including Wuhu Equipment Wuhu Optoelectronic Zhengzhou Xufei and

Shijiazhuang Xuxin got involved in won the first prize regarding substrates in the 2018 "National Award for

Science and Technology Progress" awarded by the State Council of the People's Republic of China.

b) Company's accumulation of OLED display glass substrate techniques under a horizontal layout

In the wake of breakthrough in and demand for flexible display techniques on market it is expected that flexible

display screens will boom in the future. In the context the Company complies with the OLED flexible display

screen trend and makes an optimal horizontal layout in high-aluminum cover glass substrate cambered cover

glass optical film color filter and other key optoelectronic display materials that apply to flexible display area. In

the report period the Company implemented bulk supply to downstream which became a new performance

growth point step by step.

In 2018 the Company's wholly-owned subsidiary Xuhong Optoelectronics built and put into production and sales

a cover glass production line for cambered display with an annual capacity of nearly 5 million sheets. Its best

product "Panda King" cover glass made a significant breakthrough in flexibility--implementing 360° bending and

breaking the international technical monopoly. Characterized by fall resistance scratch resistance high

transmittance high touch sensitivity etc. "Panda King" won the first prize of 2018 Sichuan Patent Award and was

successfully incorporated into the raw material supply chain of such distinguished terminal brands as Huawei

MIUI LG Lenovo and VIVO through finish machining of such downstream customers as Lens Technology Biel

Optoelectronics Junda Optoelectronics Firstar Panel Technology and Dongguan Xuhong. The cover project of

"complete-set techniques for mass production of high-strength ultra-thin float-process aluminosilicate screen

protection glass application and development" which Xuhong Optoelectronics got involved in won the second

prize regarding covers in the 2018 "National Award for Science and Technology Progress" awarded by the State

Council of the People's Republic of China.

In the report period the Company's first G5 color filter production line for TFT-LCD was put into trial production

effectively raising the additional value of the existing G5 liquid crystal glass substrate products.

c) Acceleration of industrialization of graphene by building an alliance of international giants for

cooperation

Seizing the academic commanding height and conducting international industrial cooperation and integrated

linkage the Company entered into a Manchester with British University of Manchester and UG2M to address key

problems in product engineering at the current stage and accelerate improving its own product development

system based on worldwide advanced equipment and top technical reserves of University of Manchester. The

Company established a partnership with UG2M--a British company taking the lead in graphene to jointly drive

industrialization of graphene and technical promotion in this respect and incubate products applied in the

graphene industry laying a foundation for selling products in China and around the world. The "Super Light"

graphene product launched by the Company's holding subsidiaries including Huzhou Mingshuo and Mudanjiang

Mingshuo won bids for roadway lighting projects at Hangzhou Puyang Zhangjiakou Mudangjiang etc.indicating that graphene high-power LED street lamp product has been recognized on market step by step by its

own outstanding advantages to further promote its mass industrialization which will have a positive impact on the

business performance of the Company's graphene business sector. In 2018 the Company's graphene business

sector implemented an operating income of RMB 181 million.

2) Intelligent manufacturing service system

Steady promotion of equipment and technical services with sustainable effort

Based on years of experience in electronic glass equipment manufacturing and rapid growth of China's high-end

equipment manufacturing in recent years and guided by a good policy environment the Company has completed

an in-depth exploration for high-end intelligent equipment in optoelectronic industry chain and shifted its

spending from traditional sectors to strategic emerging sectors and development from the equipment technology

market needed to the business market of high-end equipment with a high technology and additional value. Step by

step it has become a hi-tech equipment manufacturer that provides design R&D and manufacturing of high-end

intelligent equipment semiconductor equipment and automatic production line equipment for high-end customers

in TFT-LCD and OLED panel display industry. The Company spares no effort to foster and develop the high-end

intelligent equipment manufacturing seen as a strategic option to seize economic and technological development

commanding height in the future. In the report period the Company acquired Sanbao Innovation to reach out to

intelligent manufacturing service robotics from high-end equipment manufacturing. As a result of the industrial

upgrading the Company improved its competitive edge. And in the wake of ever-rising market demand the

Company took a steady flow of high-end equipment manufacturing orders. In 2018 the Company's business of

high-end equipment and technical services implemented a continuously but steadily rising operating income of

RMB 8.388 billion attributable to orders for high-end equipment including optoelectronic display equipment and

semiconductor equipment concluded with BOE Yuansheng Optoelectronics China Star Optoelectronics Xiamen

Tianma and Shiya Technology among other companies.

3) New Energy Bus Business

New energy automobile business complying with the situation and forging ahead despite the downturn

Only the toughest grass can stand strong winds; fire is the test of gold. In review of the 2018 new energy bus

market in the context of tighter subsidy policy restricted capacity increase and slowdown in technical updating

and upgrading emerging and booming Sunlong Bus built a new pattern by its own comprehensive strength in this

round of shuffle in the industry. In 2018 Sunlong sold 5658 new energy buses and earned a sales income of RMB

4.258 billion ranked in the eighth place in the industry with an increase of 69.39%. In the report period the

Company's hydrogen cell bus won the bid for the Zhangjiakou downtown bus purchase project to provide green

travel services for citizens of Zhangjiakou during the 2022 Beijing-Zhangjiakou Olympic Winter Games and put

into practice the philosophy of green Olympic Winter Games. Till the end of the report period it covered 8-12m

major types of hydrogen cell buses among which 10m and 12m hydrogen cell city buses were successfully

incorporated into the List of Recommended Types of New Energy Automobiles in Publicity and Application and

many hydrogen cell city buses were displayed at international exhibitions. In the corresponding period the

Company's wholly-owned subsidiary Guangxi Sunlong became a military supplier of Back Service Department of

Central Military Commission driving the Company's new products to be steadily launched on military supply

market and assuring the Company's strategic development. Besides the Company is planning a new energy

automobile industry base layout covering East China West China South China and North China and building a

Tunghsu New Energy Automobile Industry Cluster. After this project is completed and put into production the

Company's new energy automobile business sector will act in line with the situation boosting development of

China's new energy automobile industry and driving development of new energy new materials Internet of

Things automatic drive artificial intelligence and other strategic emerging industries concerned.

4) Other value-added business systems

Progress with maintained stability in conjunction with building installation business and electronic

communication business

Building installation engineering business and electronic communication business supplement the Company's

main businesses. In the report period the Company run its building installation business by providing

infrastructure and construction engineering services in new materials energy-saving environmental protection

bridge engineering and other areas and making intelligent products and quality services in conjunction with each

other in a variety of models such as integrated underground pipe gallery municipal infrastructure sponge city and

smart city based on other key sectors to boost its growth. In addition the Company maintained an ever-rising

momentum in the electronic communication business. Under the industrial collaboration effect the Company

made use of high-end equipment and liquid crystal display materials customer resources and its mature marketing

channels to keep increasing import and export channels for liquid crystal display modules memory chips

high-end peripheral and complete-built-unit electronic products and render quality services for customers with

personalized needs. In 2018 the Company's building installation engineering business and electronic

communication business implemented an operating income of RMB 5.28 billion and RMB 3.63 billion

respectively.. Material change in principal activities during the reporting period

□ Yes √No

3. Products accounting for over 10% of revenue or profit from principal activities of the Company

□ Applicable √ Not applicable

4. Seasonal or cyclical operations requiring special attention

□ Yes √ No

5. Material difference of revenue operating costs or net profit attributable to holders of ordinary shares

of the Company for the reporting period from the last reporting period

□ Applicable √ Not applicable

6. Suspension in trading or delisting

□ Applicable √ Not applicable

7. Events relating to the financial report

1) Explanation change of the accounting policy accounting estimate and measurement methods as

compared with the financial reporting of last year

√ Applicable □ Not applicable

（1）Accounting policy changes due to the implementation of the new Accounting Standards for Business

Enterprises.

On June 262018，The Ministry of Finance issued the Notice on Revising and Issuing the Format of General

Enterprise Financial Statements for 2018 (Caikuai [2018] No. 15).

The impact of the implementation of this accounting policy by the Company on the presentation of the items and

amounts of the prior financial statements is as follows:

No Name of affected item in the statements Affected amount of December 31 2017 / 2017

Increase + / decrease -

1 Notes receivable -538128584.84

Account receivable -7912616302.75

Notes receivable & account receivable 8450744887.59

2 Interest receivable -49456785.29

Other receivable 49456785.29

3 Notes payable -1063897679.89

Account payable -4602026192.66

Notes payable & account payable 5665923872.55

4 Interest payable -106119769.42

Dividend payable -35000000.00

Other payable 141119769.42

5 Management expenses -256991555.91

R & D ecpenses 256991555.91

（2）Explanation retrospective restatement due to correction of significant accounting errors in the

reporting period.

□ Applicable √ Not applicable

Nil

（3）Explanation change of the consolidation scope as compared with the financial reporting of last year.

√ Applicable □ Not applicable

a) Enterprise consolidation not under the same control

Name of

Acquirer

Time-point of

Obtained

Equity

Obtained Cost of

Equity

Ratio of

Obtained

Equity

(100%)

Method of

Obtained

Equity

Purchasing

Date

Determination

Basis on the

Purchasing

Date

Income of

Acquire

from the

Purchasing

Date to the

End of the

Period

Net Profit of

Acquire from

the Purchasing

Date to the

End of the

Period

Shenzhen

Sanbao

Innovation

Intelligence

Co. Ltd.

May 30

2018

157598587.50 67.00%

Enterprise

consolidation

not under the

same control

May 30

2018

Acquisition of

control

7659108.35 -12733040.13

Zhongcheng May 30 140000000.00 70.00% Enterprise March 30 Acquisition of -7172706.59

National

construction

1Co. Ltd.

2018 consolidation

not under the

same control

2018 control

Huaxi

Nanchong

Automobile

Co. Ltd.

April 4

2018

56000000.00 100.00% Enterprise

consolidation

not under the

same control

April 4

2018 Acquisition of

control

b) Business combination under the same control

In 10000 yuan

Name Proportion Basis Combination

date

Recognition

basis of

combination

date

income of

the

combined

party from

the

beginning

of the

current

period to

the date of

merger

Net profit of

the merged

party from

the

beginning of

the current

period to the

date of

merger

Income of

the merged

party during

the

comparison

period

Net profit of

the merged

party during

the

comparison

period

Tunghsu

(Yingkou)

Optoelectronic

Display Co.

Ltd.

65.00% Parent

Company

June

302018

Pay the

consideration

and control

the operation

27289664.99 -11435425.33 16069429.21 -13043965.22

c) The disposal of subsidiary

Name Equity disposal

price

Proportion Disposal way Time of loss of

control

Basis difference

between the

disposal price

and the disposal

of the

investment in

the consolidated

financial

statements at

the level of the

net assets of the

subsidiary

Xuyou

Electronic

Material

Technology

（ Wuxi) Co.Ltd.

550000000.00 51.00% Sales April 282018 Received the

consideration

completed the

transfer of

property rights

lost control

3182206.12

Continued

Name Proportion of

remaining

equity on the

date of loss of

control

Book value of

the remaining

equity on the

date of loss of

control

Fair value of

the remaining

equity on the

date of loss of

control

Re-measure the

gain or loss

arising from the

remaining equity

at fair value

Method for determining

the fair value of the

remaining equity on the

date of loss of control

and main assumptions

Amount of other

comprehensive income

related to Atomic Company's

equity investment transferred

to investment gains and

losses

Xuyou

Electronic

Material

Technology

（Wuxi) Co.Ltd.

0.00% 0.00 0.00 0.00 0.00 0.00

4 Subsidiary increased due to new establishment in this period

01) On March 82018Shenzhen Xuhui Investment Holding Co. Ltd and Jiangxi University of Science and

Technology set up a subsidiary-Beijing Xujiang Technology Co. Ltd. with the registered capital of RMB

22.7345 million and the paid-up capital of RMB 22.7345 million. Of which Shenzhen Xuhui Investment

Holding Co. Ltd.Subscribet and pays RMB 12 million holding 52.78% of the shares. Jiangxi University of

Science and Technology subscribet and pays RMB 10.7345 million holding 47.22% of the shares.

02) On March 232018 Mingshuo(Beingjing )Electronic Technology Co. Ltd. set up a wholly-owned

subsidiary-Mudanjiang Mingshuo Optoelectronic Technology Co. Ltd. With the registered capital of RMB30

million and the paid-up capital of RMB 2 million.

03) On May 172018 Tunghsu Constructtion Group Co. Ltd .set up a wholly-owned subsidiary- Luoyang

Construction Engineering Co. Ltd . With the registered capital of RMB 100 million and the paid-up capital of

RMB 100 million.

04) On July 162018 Mingshuo(Beijing)Electronic Technology Co. Ltd.set up a wholly-owned

subsidiary-Zaozhuang Mingshuo Optoelectronic Technology Co. Ltd. With the registered capital of RMB 30

million and the paid-up capital of RMB 10000.

05) On July 262018 Jiangsu Yitai Intelligent Equipment Co. Ltd. acquired equity of Tunghsu Ruiqi (Beijing)

Technology Co. Ltd. With the registered capital of RMB 20 million Jiangsu Tunghsu Yitai Intelligent

Equipment Co. Ltd. holds 51% of the shares Liu Yang holds 32% of the shares Xiajinlong holds 17% of the

shares.

06) November 62018 Tunghsu Optoelectronic Technology Co. Ltd.set up a wholly-owned subsidiary-Anhui

Xuan Optoelectronic Technology Co. Ltd. With the registered capital of RMB 1 million and the paid-up

capital of RMB10 million.Tunghsu Optoelectronic Technology Co. Ltd.

Chairman: Wang Lipeng

Issue day approved by the Board of Directors：April 292019