Tunghsu Optoelectronic Technology Co. Ltd.The Semi-annual Report 2019

August 2019

I. Important Notice Table of Contents and Definitions

The Board of Directors Supervisory Committee all directors supervisors and senior executives of the Company

hereby guarantees that there are no misstatement misleading representation or important omissions in this report

and shall assume joint and several liability for the authenticity accuracy and completeness of the contents hereof.Mr. Wang Lipeng The Company leader Ms. Feng Qiuju Chief financial officer and the Mr. Wang Cang the

person in charge of the accounting department (the person in charge of the accounting) hereby confirm the

authenticity and completeness of the financial report enclosed in this semi-annual report.

All the directors attended the board meeting for reviewing the semi-annual Report.

The development strategy operation plan and other forward-looking statements involved in this report will not

constitute any substantive commitment to the investors by the Company. Investors please be aware of the

investment risks.The company has already described the risk items existed in details in the report with reference to (IV) possible

risks of X Operation Conditions Discussion and Analys is.The Company has no plan of cash dividends carried out bonus issued and capitalizing of common reserves either.Table of Contents

2019 Semi-annual Report

I.Important Notice and Definitions

II. Corporate Profile and Key Financial Indicators

III. Business Profile

IV. Performance Discussion and Analys is

V. Important Events

VI. Change of share capital and shareholding of Principal Shareholders

VII. Situation of the Preferred Shares

VIII. Information about Directors Supervisors and Senior Executives

IX. Corporate Bonds

X. Financial Report

XI. Documents available for inspection

Definition

Terms to be defined Refers to Definition

Company Law Refers to Company Law of the People’s Republic of China

Securities Law Refers to Securities Law of the People’s Republic of China

CSRC Refers to China Securities Regulatory Commission

SZSE Refers to Shenzhen Stock Exchange

Tunghsu Group Refers to Tunghsu Group Co. Ltd.

Baoshi Group Refers to Shijiazhuang Baoshi Electronics Group Co. Ltd

Tunghsu Optoelectronic Company The

Company

Refers to Tunghsu Optoelectronic Technology Co. Ltd.Tunghsu（Yingkou）Optoelectronic Refers to Tunghsu（Yingkou）Optoelectronic Display Co. Ltd.Xuhong Optoelectronic Refers to Sichuan Xuhong Optoelectronic Technology Co. Ltd.Wuhu Optoelectronic Refers to Wuhu Tunghsu Optoelectronic Technology Co. Ltd.Wuhu Equipment Refers to Wuhu Tunghsu Optoelectronic Equipment Technology Co. Ltd.Xufei Optoelectronic Refers to Zhengzhou Xufei Opteelectronic Technology Co. Ltd.Xuxin Optoelectronic Refers to Shijiazhuang Xuxin Optoelectronic Technology Co. Ltd.Jiangsu Jixing Refers to Jiangsu Jixing New Material Co. Ltd.Tunghsu (Kunshan ) Refers to Tunghsu（Kunshan）Display material Co. Ltd.

Chongqing Jihuateng Refers to Chongqing Jinghuateng Optoelectronic Technology Co. Ltd.

Jiangsu Tunghsu Yitai Refers to Jiangsu Tunghsu Yitai Intelligent Equipment Co. Ltd.Hunan Tunghsu Delai Refers to Hunan Tunghsu Delai Electronic Technology Co. Ltd.Tunghsu Construction Refers to Tunghsu Construction Group Co. Ltd.

Fuzhou Xufu Refers to Fuzhou Xufu Optoelectronic Technology Co. Ltd.

Fuzhou Optoelectronic Refers to Fuzhou Tunghsu Optoelectronic Technology Co. Ltd.

Tunghsu Finance Company Refers to Tunghsu Group Finance Co. Ltd.Shanghai Tanyuan Huigu Refers to Shanghai Tanyuan Huigu New Material Technology Co. Ltd.Xutan New Material Refers to Beijing Xutan New Material Technology Co. Ltd.Mingshuo Technology Refers to Mingshuo (Beijing) Electronic Technology Co. Ltd

Tengda Tengda Optical Refers to Suzhou Tengda Optical Technology Co. Ltd.SUNLONG Refers to Shanghai Sunlong Bus Co. Ltd.Guangxi Sunlong Refers toGuangxi Sunlong Automobile Manufacturing Co. Ltd. （FormerGuangxi Yuanzheng New Energy Automobile Co. Ltd.）

Sanbao Innovation Refers to Shenzhen Sanbao Innovation Intelligence Co. Ltd.

BOE Refers to BOE Technology Group Co. Ltd.

CSOT Refers to China Star optoelectronics Technology Co. Ltd.

Tianma Refers to Tianma Microelectronics Co Ltd

TFT-LCD Refers to Thin Film Transistor Liquid Crystal Display

OLED Refers to Organic Light-Emitting Diode OLED

Glass substrate Refers to

A thin glass sheet with extremely smooth surface is a basic component

of constituting LCD display device as well as one of the critical basic

materials in panel display industry. The glass sheet can be divided into

various generations by its size and the higher the generation is the

bigger the size will be.

G5 glass substrate Refers to The size of the 5th-generation glass substrate is 1100 mm×1300 mm.

G6 glass substrate Refers to The size of the 6th-generation glass substrate is 1500 mm×1850 mm.

G8.5 glass substrate Refers to The size of the 8.5th-generation glass substrate is 2300 mm×2500 mm

Optical film Refers to

refers to the general name of optical diaphragms such as diffusion

reflection prism composite prism etc. mainly used in TFT LCD

backlights.

CF Refers to

Critical original materials of LCD panel for realizing colorization

display

Grapheme materials Refers to

Refers to two-dimensional carbon materials related to grapheme with

a layer less than 10 carbon atoms

Cover glass Curved glass 3D cover glass Refers to

In addition to mobile phones tablet PCs and other displays for the

touch screen touch module display and non-touch screen display to

protect the transparent glass lens

New Energy Bus Refers to

Adopting new power systems fully or mainly rely on new

energy-driven passenger bus including pure electric bus and fuel cell

bus

II. Basic Information of the Company and Financial index

I. Company Information

Stock abbreviation Tunghsu Optoelectronic Tunghsu B Stock code 000413、200413Stock abbreviation after

change (if any)

Tunghsu Optoelectronic Tunghsu B

Stock exchange for listing Shenzhen Stock Exchange

Name in Chinese 东旭光电科技股份有限公司

Chinese Abbreviation 东旭光电

English name (If any) Tunghsu Optoelectronic Technology Co.Ltd.

English abbreviation (If any) Tunghsu Optoelectronic

Legal Representative Wang Lipeng

II. 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

III. Other

1. Way of contact

Whether registrations address offices address and codes as well as website and email of the Company changed in

reporting period or not

√ Applicable □Not applicable

Registered address

No.9 Huanghe Road Shijiazhuang High-tech Industrial Development Area

Shijiazhuang Hebei Province

Postal code of the Registered Address 050035

Office Address No.1 Caiyuan Street Xicheng District Beijing

Postal code of the office address 100053

Internet Web Site http://www.Tunghsuguangdian.cn/

E-mail dxgd@dong-xu.com

Provisional announcement of the disclosure of

the designated website date.(If any)

January 82019

Index of designated website disclosed in interim

announcement.(If any)

http://www.cninfo.com.cn

2. Information inquiry

Whether information disclosure and preparation place changed in reporting period or not

□ Applicable √ Not applicable

None of the official presses website and place of enquiry has been changed in the semi report period. For details

please find the Annual Report 2018.IV. Summary of Accounting Data and Financial Indicators

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

Reporting period Same period of last year YoY+/-（%）

Operating Gross income（Yuan） 8475089222.93 11129851790.88 -23.85%

Net profit attributable to the shareholders

of the listed company（Yuan）

844176169.98 858296089.08 -1.65%

Net profit after deducting of non-recurring

gain/loss attributable to the shareholders of

listed company（Yuan）

778095326.66 811345478.77 -4.10%

Cash flow generated by business operation

net（Yuan）

594348068.16 83617287.66 610.80%

Basic earning per share(Yuan/Share) 0.15 0.15 0.00%

Diluted gains per share(Yuan/Share) 0.15 0.15 0.00%

Net asset earning ratio（%） 2.57% 2.74% -0.17%

As at the end of the

reporting period

As at the end of last year YoY+/-（%）

Gross assets（Yuan） 71378527997.21 72576122859.60 -1.65%

Shareholders’ equity attributable to

shareholders of the listed company（Yuan）

32994457818.10 32521130925.14 1.46%

V. Differences between accounting data under domestic and overseas accounting standards

1．Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed

in the financial reports of differences in net income and net assets.

□ Applicable□√ Not applicable

Nil

2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese

accounting standards.

□ Applicable √Not applicable

Nil

VI. Items and amount of non-current gains and losses

√Applicable □Not applicable

In RMB

Items Amount Notes

Non-current asset disposal gain/loss(including the write-off part for

which assets impairment provision is made)

14672155.64

Govemment subsidies recognized in current gain and

loss(excluding those closely related to the Company’s business and

granted under the state’s policies)

68408139.17

Gain/loss on entrusting others with investment or asset

management

246200.42

Other non-operating income and expenditure beside for the above

items

7342788.31

Less: Influenced amount of income tax 12093227.86

Amount of influence of minority interests（After tax） 12495212.36

Total 66080843.32 --

For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on

information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and

its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure

for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as

recurring gains and losses it is necessary to explain the reason.

□ Applicable√ Not applicable

None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information

disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.III. Business Profile

Ⅰ.Main Business the Company is Engaged in During the Report Period

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

No

In recent years driven by the strategy of industrial integration and transformation and upgrading the company has

gradually developed into a leading integrated supplier of intelligent manufacturing in China. The company started

from the photoelectric display industry. While maintaining the leading edge of liquid crystal glass substrate

technology the company horizontally laid out the new material fields represented by photoelectric display

materials such as cover glass original sheet curved glass optical diaphragm etc. The industrial cluster of

photoelectric display materials has outstanding advantages; In the process of graphene industrialization overseas

cooperation and integration will accelerate the improvement of the layout development and sales of graphene

industrial application products; In the field of high-end equipment manufacturing the company has become one of

the stable sources of revenue and profit for the company by virtue of the continuous spillover effect of the

self-developed complete set of glass substrate production equipment technology and in-depth exploration and

expansion of numerous extension fields. In the field of new energy vehicles the company takes Shenlong Bus as

the carrier combines with the new trend of industrial development actively arranges and builds new bases

engages in the research and development manufacturing and sales of new energy buses and logistics vehicles

including hydrogen fuel vehicles and meanwhile strives to continue to develop overseas markets which is

another important source of income and profit for the company. Construction and installation bus iness and

electronic communication business as value-added business provide beneficial supplement to the company's main

business.I. New material business system

1. Glass substrate original f ilm 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. Currently the Company possesses five

production bases of liquid crystal glass substrate respectively located in Zhengzhou Shijiazhuang Wuhu Fuzhou

and Yingkou covering G5 G6 and G8.5 (compatible with 8.6 generation) TFT-LCD liquid crystal glass

substrates. In terms of technology research and development the technical reserve of OLED glass production line

has been completed which is compatible with LTPS and G8.5 and G10 original chip production. In terms of high

generation adaptability light weight thinness and third generation flexible display technology it will continue to

maintain great advantages. So far the company has more than 20 production lines for liquid crystal glass

substrates (including projects under construction and planned projects) with that the mass production capacity

tops first in China and ranks fourth in the world.

2. Other display materials business

In order to enhance the competitiveness and profitability of the display materials business and conform to the

development trend of OLED flexible display the company has adopted the strategy of horizontally expanding the

industrial chain and has successively laid out such businesses as cover glass original sheet curved cover glass

optical diaphragm color filter sapphire etc. The business structure has been optimized and the industrial cluster

effect has taken shape. Cover glass is used to protect touch modules and display screens and is the main raw

material for manufacturing touch screens. It is widely used in the application fields of touch screen products such

as notebook computers palmtop computers vehicle-mounted displays mobile phone screens digital photo frames

and other flat panel display industries. The company has an advanced production line for glass substrates with

float cover plates and is the only enterprise in China that has mastered both overflow melting method and float

method for large-scale production of glass substrates. Meanwhile the Company's optical film products which are

the important material of the display module can cover the polarizer diaphragm tape graphite sheet OCA glue

and other sub-fields and those are widely used in TFT-LCD modules and OLED display modules making the

Company is a stable supplier to BOE-the leading panel manufacturer in China especially gradually consolidated

the strategic supplier place to the OLED flexible display material through the introduction and application of

graphite sheets and OCA rubber products in OLED flexible products. The color filters which are broadly used in

liquid crystal flat panel displays are essential components for true colorization of display devices and they are the

upstream supporting materials for LCD panels. The Company will focus on extending the flat panel display

industry chain to improve the local matching rate of the domestic TFT-LCD industry and reduce the cost of

domestic TFT-LCD products which will enhance the competitiveness of China's TFT-LCD industry. The sapphire

business focuses on the supply of LED substrates and the Company possesses the sapphire crystal growth and

complete processing technology. At present the Company's main products are 4-inch LED substrate products

which provide the sapphire substrates for downstream LED customers and it maintains a stable development

trend.

3. Industrial application of graphene material

The graphene has excellent characteristics of optics electricity heat and mechanics and important application

prospects in terms of materialogy and energy etc. and is deemed as a revolutionary new material. The company

hatched a batch of high-tech subsidiaries of graphene industrialization in the graphene field and formed effective

linkage with the main business of the company to accelerate the development and application of its own graphene

products. Currently the company's industrial application of graphene materials has formed a product layout with

four industrial product series of graphene-based lithium ion batteries graphene energy-saving lighting graphene

electric heating and graphene anticorrosive coatings as the forerunner with exploration for innovative applications

as the development goal. During the reporting period the research and development and innovation incubation

capabilities of graphene-related products reached a new high. Mingshuo Technology Smart Lamp products a

subsidiary of the company integrated the independently developed graphene heat dissipation technology which is

featured by high light efficiency high protection small volume intelligence and green energy conservation and

realizes smart city terminal application with lamp caps as carriers. In addition the company successfully entered

the laboratory of the University of Manchester Engineering Innovation Center in the UK and accelerated the

research and development of key graphene technologies through close cooperation with the world's top graphene

research and development resources. With the gradual implementation and transformation of scientif ic research

achievements in graphene and other fields a new round of performance growth has started.II. High-end equipment manufacturing business

In recent years the development path of intelligent manufacturing has deepened step by step from process

automation to production line automation and intelligent factory. With the prosperity of industrial Internet the

production mode of intelligent factory will subvert the traditional manufacturing mode in the future which is the

development direction of China's high-end equipment manufacturing industry. While realizing the independent

research and development of the equipment the company has further promoted the intelligent development of the

equipment manufacturing industry. Through continuous self-improvement the company has accumulated

abundant high-end equipment research and development and manufacturing strength and has a complete set of

domestic leading liquid crystal glass substrate production technology. The company has realized the independent

development and manufacture of hardware and software of automatic handling equipment in the panel industry

gradually realized the localization substitution of core process equipment and steadily expanded the market of

high-generation panel production equipment. Currently the company's high-end equipment business mainly

adopts the system integration production mode specializing in research development and production of

photoelectric display materials semiconductor field automatic logistics automatic control system customizes

special equipment supply service etc. At present the company has a large number of large customers group

customers and leading enterprises in the industry with demand in the field of intelligence revsing up the

Company's smart manufacturing production performance improvement.

III. New energy automobile business

Under the reshuffle effect of the industry brought by the new energy subsidy policy the Company's new energy

vehicle sector been steadily increasing The company strives to build a new force in the industry landscape.

Currently the company's new energy vehicle products mainly cover pure electric city buses hydrogen fuel cell

buses and hybrid city buses. They are pre-arranged and have the design production and manufacturing

capabilities of new energy logistics vehicles and new energy sanitation special vehicles. They can be customized

and sold according to customer needs. Currently hydrogen fuel cell bus is an important direction for the

development of new energy bus. Conforming to this market trend Shenlong takes the lead in the development of

hydrogen fuel cell bus relying on many years of production experience and strong scientific research ability. The

company adopts lightweight design three-dimensional full- load frame and high charging and discharging

performance power battery technology which greatly improves the driving experience and comfort. The power

safety comfort and stability of the vehicle reach the first-class level in China. Meanwhile thanks to the national

"the belt and road initiative" the overseas new energy bus market is gradually warming up providing a good

external environment for the overseas business development of Sunlong Bus with products sold in batches to

Southeast Asia the Middle East South America and Africa. The start-up and increase-in of the auto finance

business will make the Company's development of new energy auto industry more healthy and sustainable.IV. Other business system

1. Electrocommunication product business

With the "13th Five-Year Plan" for national infrastructure construction the company's construction and

installation business takes smart city construction and green city construction as its direction and engineering

construction as its main focus driving the production and sales of supporting products for smart projects realizing

"smart projects+product integration" and creating a benchmark enterprise for smart construction. The business

covers smart city sponge city municipal infrastructure underground utility tunnel industrial plant land

consolidation and other fields. Relying on the company's core industries it provides an infrastructure construction

system with reasonable layout complete functions supporting facilities and green intelligence to lead the

development so as to make both smart products and quality services supplement the main business and boost the

company's development.

2. Electronic communication product business

As a supplement to the company's main business based on high-quality customer resources such as photoelectric

display materials and high-end equipment the company provides sales services for display materials memory

chips high-end intelligent electronic competition hosts liquid crystal screen modules complete machines and

other related products to meet the needs of customers at different levels and provide high-quality customized

products and services for customers at different levels.Ⅱ.Major Changes in Main Assets

1. Major Changes in Main Assets

Main assets Major changes

Equity assets No significant change

Fixed assets No significant change

Intangible assets No significant change

Construction in process No significant change

Notes receivable

Notes receivable decreased by 87.76% mainly due to bills received in 2018 being cashed

or endorsed in the first half of 2019.Inventories

Inventory growth of 35.42% was mainly due to the completion of follow-up orders stock

up and the increase in completed and unsettled assets in the construction business sector

Long-term receivable

Long-term receivables increased by 68.62% mainly due to the increase in long-term

receivables caused by the increase in installment collection.

2. Main Conditions of Overseas Assets

□ Applicable √ Not applicable

Ⅲ.Analysis On core Competitiveness

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

No

In Annual Report 2018 the Company disclosed five core competitive forces namely “strong advantage inindependent research and development and innovation ability” “scale advantage of core photoelectric displaymaterial” “integration advantage of endogenous and epitaxial industrial chains” “synergistic advantages ofmutual dependence of business sectors” and “advantage in efficient management and decision-makingmechanism”. In the first half year of 2019 such core competitive force has been strengthened and deepened

further without any other signif icant change.IV. Performance Discussion and Analysis

Ⅰ.General

In the first half of 2019 under the boost of the “steady growth” policy and a series of reform measures the

Chinese economy successfully resisted the impact of multiple downside risks and the economy showed a slow

and stable pick-up performance. However as the uncertainty of Sino-US trade disputes increases the global

economic downturn is obvious and ensued with zero interest rate or negative interest rate policies the overall

economic fundamentals in particular from the second quarter tend to have a striking feature of decline. Under this

situation the company closely follows the development orientation of national policies seizes the new

connotation of important strategic opportunities actively enhances the ability of scientif ic and technological

innovation revs up the green development and transforms the pressure of accelerating high-quality economic

development into a driving force solid develops the industry and deeply focuses on development of the fields

including the high-technology semiconductor new materials and equipment manufacturing.

During the reporting period in one respect the Company solidly cultivated the existing industrial structure

focused on technological innovation meticulously developed the business and products promoting development

through R&D adhere to quality and efficiency and on the other respect it optimized management and personnel

structure reduced the costs and increased the efficiency thus improving the business performance. In terms of

refined management the Company adheres to the “1+5” all-round target incentive mechanism further highlights

the strategic leading position of technology and product research and development and takes the comprehensive

budget management and financial management analysis as a platform and builds the cadre management system

and the enterprise culture as the cornerstone; with focusing on endogenous development and internal potential

tapping implementing the enhanced assessment and incentives and with continuous optimizing of organizational

configuration and organizational effectiveness the increasingly strengthening of external market development and

industrial synergy it has revved up the capability of revenue generation profitability efficiency and core

competition. In the first half of 2019 all aspects of the Company's production and operation were steadily

advanced gained with a certain degree of economic benefits. During the reporting period the Company achieved

the operating income of 8.475 billion yuan and realized a net profit of 844 million yuan attributable to

shareholders.The company's each business development status in the first half of 2019:

1. Photoelectric display material business system

(1) Consolidate the main business to achieve stable development and strengthen the leading position of LCD glass

substrates

From the Company's 5th generation of liquid crystal glass substrates to the 8.5th generation of glass substrates the

Company possesses a total of more than 20 production lines which provides a full range of glass substrate

products for downstream panel customers. Utilizing the advantages and fitting the trend the Company has solidly

improved the yield of high-generation glass substrate production lines and increased the market share. At present

the Company's products have been widely purchased by mainstream panel companies such as BOE Shen Chao

Optoelectronics and Longteng Optoelectronics which are used in various display terminals such as portable

display car LED display computer and home appliances. During the reporting period the Company optimized

and adjusted the industrial structure of glass substrates and revved up the technological innovation to further

consolidate the Company's core competitiveness in the field of glass substrates.

(2) Distinguished Quality improvement for providing a solid base to promote the OLED flexible display industry

Fitting the trends based on its own technological advantages the Company has deeply ploughed its technology

research and development and innovation promoting the high-aluminum cover glass substrate products used in

the flexible display f ield and it has gradually entered a good position with the production line has entered a

period of rapid development and the capacity of high-aluminum cover glass substrate ranked first in China third

in the world. During the reporting period relied on the Company's high-end equipment manufacturing capabilities

the Company's subordinate company-Xu Hong Optoelectronics carried out the independent research and

development and now it has owned the completely independent intellectual property rights with a good quality

production technology. The product has fully covered the cover glass products ranging from the thickness of

0.1-6mm with the overall product line has a comprehensive yield of 97%-which far exceeds the industry average

of 80%. The cover glass and curved glass has achieved a balanced ratio which has become an important step in

the Company's layout of development of OLED display industry.(3) Active industrial chain extension and distinct industrial cluster effect

The Company's subordinate company-Tengda Optics continues to expand its optical film business scale and

market share by relying on continuous deepening cooperative relationship with BOE. During the reporting period

in terms of scale it closely followed the layout of BOE's industry and built new plants in Chongqing and

Mianyang to supply BOE. From the product it had strengthened the research and development capabilities

gradually extended from the TFT product field to the OLED flexible display field and the number of applicable

optical films was increased sharply as well as providing BOE with the related materials thus laying a technical

and market foundation for the Company's sustained and stable development. The Company further put efforts

internally and externally in the color filters and consolidated the market competitiveness. During the reporting

period upon the continuous improvement of production line technology and quality level it actively carried out

the new product development and customer certification. At present the Company has established stable

cooperative relations with customers including INES and IVO. The sapphire products closely followed the LED

industry on the large-size development trend. During the reporting period the Company actively implemented the

large-size product technical transformation expanded the production capacity of 4-inch substrate products and

timely met the changes in the product demand structure by downstream customers thus providing a solid basis for

the Company's stable operation.

(4) Vertically advancing the integration and development continuing to promote the graphene industrialization

By continuous ly optimizing the product design the Company strives to create the star products. As the core

industry of Tunghsu Optoelectronic' second take-off development the graphene industry has been strategically

defined with leading path of various graphene preparation technologies and the realization of high value-added

industrial application development such as "lampwick". The Company's controlling subsidiary-MingshuoTechnology has become one of the first six companies selected as responding to the national brand strategy-“New

Action for National Brand Engineering and Service Industry by Xinhua News Agency”. Meanwhile the first

self-developed Industry pioneering-“Graphene cooling LED tube” was awarded the “Aladdin Lamp Award-”

which is regarded as the Oscar of the domestic light ing industry-upon its outstanding originality and technological

advancement which was graded first in the review and final review and its market sales have reached new highs.In addition the Company's international cooperation with Manda continued to advance and became the first

member of China's first Manda Graphene Engineering Innovation Center. Cooperated with the team of Mandano

Award scientists by jointly shared the equipment and resources it has jointly promoted the graphene technology

and incubated the graphene industrialization of related products. Meanwhile the Company seized the

development opportunities timely adjusted its development strategy and sales strategy launched several EMC

projects in a timely manner and it combined with new opportunities in the capital market for striving for greater

development of the graphene industry. With the application of relevant key technical achievements the graphene

industrialization application sector is expected to maintain a strong growth momentum and to contribute the

profits to the listed company.

2. Smart manufacturing business system

Be honest and faithful and keeping doing a good job in development continues to steadily develop the equipment

and technology

In recent years the Company's high-end smart equipment has been deeply cultivated and steadily developed in the

fields of optoelectronic industry chain semiconductor equipment and other general-purpose equipment which has

been benefited from the integration of two technologies and the promotion of smart manufacturing policies.

During the reporting period the Company consolidated its development strength and achieved the development of

its own equipment technology and industrial upgrading based on the customers’ system requirements for products

and supporting equipment. By utilizing the advanced technology and the complete system of high-end equipment

manufacturing capabilities it further promoted the high value-added business which has gained a good reputation

and stable partners in the domestic high-end customer field. The company expands its multi-dimens ional

intelligent manufacturing business develops towards the direction of smart high-end green and integrated and

having a good lay-out of production of smart robots thus to further accelerate the deep expansion and

development of high-end smart manufacturing.

3. New energy vehicle business

Forward-looking concept and synergy with the main business deepen the harmonious development of the new

energy automobile industry

Under the reshuffle effect of the industry brought by the new energy subsidy policy the Company's new energy

vehicle sector has grown substantially and has become a new force in building the industry structure. Under the

Company's forward-looking concept and collaborative development for promoting the energy revolution it deeply

cooperates with Yihuatong to seize the hydrogen fuel bus development opportunities and meanwhile shapes up

the hydrogen fuel cell development technology thus to further improve the industrial synergy effect of the

Company's new energy vehicle business. During the reporting period in the 5th batch of “Recommended Modelsfor Promotion and Application of New Energy Vehic les” issued by the Ministry of Industry and Information

Technology the number of selected models of Shenlong Bus accounted for a percentage of 21.1% in the total

number of selected models nearly 1/4 of the total number of models and ranked the top place and also the total

number of selected models that meet the latest subsidy technical standards for 2019 ranked second in the industry.In addition the Company has been actively accelerating the construction of the new energy automobile industry

base thus to provide a guarantee for the healthy development of the Company's new energy industry cluster.While striving to develop the business as the scale grew in the business development stage the Company

promptly started to strengthen the business-related auto finance work thus laying the foundation for the further

healthy development.

4. Other value-added services

Stable and sound development construction and installation business and electronic communication business are

conducive to promote profitability

As a supplement to the Company's main business the construction and installation business involves smart cities

sponge cities municipal infrastructure underground integrated pipe corridors industrial plants land consolidation

and many other fields. With the smart domestic cities development and the continuous improvement of

industrialization level the construction and installation business has been increasingly innovated meanwhile

which cooperates with other core industries of the Company to expand business space in new materials energy

conservation and environmental protection and other fields to promote the Company’s sustainable development

with smart products and quality services. The electronic communication products business continued to grow

rapidly during the reporting period and by utilizing the Company's various industry business customer resources

it further broadened the sales and contributed to improve the Company's operating income.II.Main business analysis

Refer to relevant contents of “1. Summarization” in “Discussion and Analys is of Management”.

Changes in the financial data

In RMB

This report period Same period last year YOY change（%） Cause change

Operating income 8475089222.93 11129851790.88 -23.85%

Operating cost 6571893216.94 9021989897.09 -27.16%

Sale expenses 155812716.54 93892692.42 65.95%

Mainly due to the increase in

sales promotion & marketing

Administrative expenses 282118024.57 204871395.72 37.70%

Mainly due to the increased

labor costs

Financial expenses 368090095.96 395227116.30 -6.87%

Income tax expenses 186908717.85 282130776.24 -33.75%

Mainly due to the decrease in

profit before tax for the current

period compared with the

previous year

R & D Investment 239995337.32 193027311.57 24.33%

Net cash generate by

operating activities

594348068.16 83617287.66 610.80%

Mainly due to the increase in

sales payment collected

Net cash generated by

investing activities

-100846155.97 -1660557972.96 93.93%

Mainly due to the increase in

the recovery of matured

deposits and the decrease in

investment in fixed assets

during the period.Net cash generated by

financing activities

-20827235.34 -2092134104.87 99.00%

Mainly due to the fund

increase by financing in place.Net increase in cash and

cash equivalents

470382603.34 -3671727390.78 112.81%

Major changes to the profit structure or sources of the Company in the reporting period

□ Applicable √Not applicable

Breakdown of main business

In RMB

Operating

revenue

operating costs

Gross profit

rate(%)

Increase/decrease

of reverse in the

same period of

the previous

year(%)

Increase/decrease

of principal

business cost over

the same period

of previous year

(%)

Increase/decrease

of gross profit

rate over the

same period of

the previous year

(%)

On Industry

Optoelectronic

display material

1965002241.79 1475046536.81 24.93% -9.12% -12.89% 3.24%

Equipment and

Technology

serves

3291442406.83 2330990248.59 29.18% -10.21% -19.25% 7.93%

Industrial

application of

graphene

62522517.77 36518588.14 41.59% 181.81% 302.60% -17.53%

New energy

vehicle

653517499.98 529402326.49 18.99% -36.07% -35.41% -0.83%

Construction

Installation

1533873637.92 1371263434.71 10.60% -1.40% -8.64% 7.08%

Electronic

communication

products

669208048.08 658461020.61 1.61% -57.41% -57.19% -0.50%

On Products

Optoelectronic

display material

1965002241.79 1475046536.81 24.93% -9.12% -12.89% 3.24%

Equipment and

Technology

serves

3291442406.83 2330990248.59 29.18% -10.21% -19.25% 7.93%

Industrial

application of

graphene

62522517.77 36518588.14 41.59% 181.81% 302.60% -17.53%

New energy

vehicle

653517499.98 529402326.49 18.99% -36.07% -35.41% -0.83%

Construction

Installation

1533873637.92 1371263434.71 10.60% -1.40% -8.64% 7.08%

Electronic

communication

products

669208048.08 658461020.61 1.61% -57.41% -57.19% -0.50%

On Area

China 7807204035.77 6045900645.75 22.56% -11.71% -17.67% 5.60%

HongkongMacau

and Taiwan

305000622.44 303790862.26 0.40% -72.05% -71.30% -2.59%

Overseas 63361694.16 51990647.34 17.95% -3.19% 13.70% -12.19%

III.Non-core business analysis

□ Applicable √Not applicable

IV. Analysis of assets and liabilities

1.Signif icant changes in asset composition

In RMB

End of Reporting period End of same period of last year Change in Reason for

Amount

As a percentage

of total

assets(%)

percentage(

%)

significant change

Cash and bank

balances

19608160332.91 27.47% 23794597055.80 35.68% -8.21%

Accounts

receivable

11948970007.58 16.74% 9937647168.77 14.90% 1.84%

Inventories 4754313963.62 6.66% 4210883497.85 6.31% 0.35%

Real estate

Investment

711680374.74 1.00% 66930130.01 0.10% 0.90%

Long-term equity

investment

2191785865.01 3.07% 2142476783.38 3.21% -0.14%

Fixed assets 9043235757.53 12.67% 10938598162.98 16.40% -3.73%

Construction in

process

5511187961.75 7.72% 5387496213.47 8.08% -0.36%

Short-term loans 9194934400.00 12.88% 6812784698.87 10.22% 2.66%

Long-term loans 3200691400.00 4.48% 3823532289.32 5.73% -1.25%

Intangible assets 1114095291.45 1.56% 1149208605.35 1.72% -0.16%

Goodwill 2702403019.28 3.79% 2840823542.00 4.26% -0.47%

Bonds payble 5282105325.64 7.40% 5625817373.23 8.44% -1.04%

2.Asset and Liabilities Measured by Fair Value

√ Applicable □Not applicable

In RMB

Items

Amount at year

beginning

Gain/loss on

fair value

change in the

reporting

period

Cumulative fair

value change

recorded into

equity

Impairment

provisions in

the reporting

period

Purchased

amount in the

reporting

period

Sold amount in

the reporting

period

Amount at year

end

Financial assets

1. Tradable

financial assets

(excluding

derivative

financial

assets)

3000000.00 3000000.00

Other Non

current

financial assets

243158605.30 305000000.00 548158605.30

Total 243158605.30 308000000.00 551158605.30

Financial

Liability

0.00 0.00 0.00

Did great change take place in measurement of the principal assets in the reporting period ?

□ Yes √No

3. Restricted asset rights as of the end of this Reporting Period

Restrictions on asset rights at the end of the reporting period are as follows:

The restrictive currency funds are 4221140438.53 yuan mainly including the security deposit of acceptance bill

the time deposit and the guarantee deposit.The restrictive fixed assets are 10023924207.63 yuan mainly including the fixed assets formed by set mortgage

and finance lease.The restrictive intangible assets are 444132103.11 yuan mainly as the collateral for obtaining loans.The restrictive construction in progress is 2387597640.81 yuan mainly as the collateral to obtain loans.The restrictive investment real estate is 663577011.23 yuan mainly as the collateral to obtain loans.The restrictive inventory amount is 286588819.60 yuan mainly as the collateral to obtain loans.The restrictive accounts receivable is 1739594424.68 yuan mainly is factoring financing.Ⅴ.Investment situation

1．External investment

√ Applicable □Not applicable

Investments made in the reporting period Investments made in same period of last year +/- %

2618415914.74 3148450556.06 -16.83%

2.Condition of Acquiring Signif icant Share Right Investment during the Report Period

√Applicable □ Not applicable

In RMB

Name

of the

Compa

ny

Investe

d

Main

Busines

s

Invest

ment

Way

Invest

ment

Amoun

t

Share

Proport

ion %

Capital

Source

Partner

Invest

ment

Horizo

n

Product

Type

Progre

ss up

to

Balanc

e Sheet

Date

Antici

pated

Incom

e

Gain or

Less or

the

Current

Investm

ent

Whether

to

Involve

in

Lawsuit

Date of

Disclosu

re(Note

5)

Disclos

ure

Index

Tunghs

u

(Jinzho

u)

Precisio

n

optoele

ctronic

technol

ogy co.Ltd.Photoel

ectric

display

material

New

establis

hment

50000

0000.0

0

100.00

%

Self

funds

No

long-te

rm

Photoel

ectric

display

materia

l

Compl

eted

0.00 0.00 No

Tunghs

u

(Jinzho

u)

Intellig

ent

material

technol

ogy co.Ltd.Photoel

ectric

display

material

New

establis

hment

30000

0000.0

0

100.00

%

Self

funds

No

Long-t

erm

Photoel

ectric

display

materia

l

Compl

eted

0.00 0.00 No

Tunghs

u

(Jinzho

u)

Intellig

ent

Opteoel

ectronic

Co.

Ltd.Photoel

ectric

display

material

New

establis

hment

30000

0000.0

0

100.00

%

Self

funds

No

Long-t

erm

Photoel

ectric

display

materia

l

Compl

eted

0.00 0.00 No

Tunghs

u

(Jinzho

u)

Precisio

n

Opteoel

ectronic

Co.

Ltd.Photoel

ectric

display

material

New

establis

hment

50000

0000.0

0

100.00

%

Self

funds

No

Long-t

erm

Photoel

ectric

display

materia

l

Compl

eted

0.00 0.00 No

Liaonin Researc New 10000 100.00 Self No Long-t high-en Compl 0.00 -30.00 No

g

Tunghs

u

Sanbao

Intellig

ent

Technol

ogy

Co.

Ltd.h &

Develo

pment

and

Manufa

cturing

of

Robot

and

Intellig

ent

Electro

nic

equipm

ent

establis

hment

0000.0

0

% funds erm d

manufa

cture

eted

Tunghs

u

Kunsha

n

Display

Materia

ls Co.

Ltd.Photoel

ectric

display

material

Increas

e

capital

40000

0000.0

0

93.40%

Rised

funds

Kunsha

n

Develo

pment

Zone

Guotou

Holdin

gs Co.

Ltd.Long-t

erm

Photoel

ectric

display

materia

l

Compl

eted

0.00

-41854

13.92

No

March

92019

http://w

ww.cnin

fo.com.cn

Total -- --

21000

00000.

00

-- -- -- -- -- -- 0.00

-41854

43.92

-- -- --

3.Situation of the Signif icant Non-equity Investment Undergoing in the Report Period

□ Applicable √ Not applicable

4.Investment of Financial Asset

（1）Securities investment

√ Applicable □Not applicable

Secu

rity

categ

ory

Secu

rity

code

Stock

Abbrevi

ation:

Initial

investm

ent cost

Mode

of

account

ing

measure

ment

Net

carryi

ng

amou

nt

balan

ce at

the

begin

ning

of the

report

ing

perio

d

Chan

ges

in

fair

valu

e of

the

this

perio

d

Cumul

ative

fair

value

change

s in

equity

Purchas

e

amount

in the

this

period

Sale

amo

unt

in

the

this

peri

od

Gain/

loss

of the

repor

ting

perio

d

Net

carryin

g

amount

balance

at the

end of

the

reportin

g

period

Account

ing

items

Sou

rce

of

the

shar

es

Bon

ds

2040

04

GC004 30000

00.00

FVM 0 0 0 30000

00.00

0 0 30000

00.00

Transac

tional

financia

l assets

Self

fun

ds

Total 30000

00.00

-- 0 0 0 30000

00.00

0 0 30000

00.00

-- --

Securities Investment

Approval Board

Announcement

Disclosure Date

Securities Investment

Approval Shareholders'

Meeting Announcement

Disclosure Date (if any)

（2）Investment in Derivatives

□ Applicable √ Not applicable

Nil

Ⅵ. Significant Asset and Right Offering

1.Situation of Signif icant Asset Sale

□ Applicable √ Not applicable

Nil

2.Situation of Substantial Stake Sale

□ Applicable √ Not applicable

Ⅶ.Analysis of the Main Share Holding Companies and Share Participating Companies

√ Applicable □ Not applicable

Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influenc ing to the Company

In RMB

Company

Name

Company

type

Sectors

engaged in

Registered

capital

Total assets Net assets Turnover

Operating

profit

Net Profit

Wuhu

Tunghsu

Optoelectroni

c

Equipment

Technology

Co.Ltd.

Subsidiary

Equipment

and

technology

Service

2500000000.

00

183726319

84.28

368940549

2.48

217858781

6.15

88510714

9.25

753444410.24

Tunghsu

Construction

Group Co.Ltd.Subsidiary Construction

3000000000.

00

860520437

2.88

352291556

5.19

101110346

6.89

12122720

9.43

89344160.05

Wuhu

Tunghsu

Optoelectroni

c

Technology

Co.Ltd.

Subsidiary

Photoelectric

display

material

2000000000.

00

111137015

99.97

554285486

6.59

406102687.

12

55304194

.88

50621430.45

Sichuan

Xuhong

Optoelectroni

c Technology

Co. Ltd.

Subsidiary

Photoelectric

display

material

2000000000.

00

377657557

2.12

224280506

7.29

211894433.

02

66519340

.47

55981994.87

Acquirement and disposal of subsidiaries in the Reporting period

√ Applicable □Not applicable

Name Mode Influence

Wuhan Tunghsu Optoelectronic

Technology Co. Ltd.

Disposition Based on overall strategic layout planning considerations

Zhongcheng Guojian Co. Ltd. Disposition Based on overall strategic layout planning considerations

VIII．Structured vehicle controlled by the Company

□ Applicable √ Not applicable

IX. Prediction of business performance for January -September 2019

Estimation of 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 of reason.

□ Applicable√ Not applicable

X. Risks facing the Company and countermeasures

1. Macroeconomic cyclical fluctuation risk and technology upgrade alternative risk

The Company's optoelectronic display materials business centered on glass substrates which relied on the LCD

panels in the downstream industry. In recent years LCD panels have gradually evolved from low-generation to

high-generation. Due to the gradual saturation demand in the global consumer electronics market the growth of

the consumer electronics industry has slowed down and the competition in LCD panels and upstream glass

substrates has been intensified leading to the price of glass substrates decreased. In addition with the rapid

development of the electronic display industry other new alternatives of composite materials may be surfaced in

the future thus if the downstream flat panel display industry undergoes major technological changes and the

Company fails to timely achieve the technological innovation then the Company will face certain alternative risks

brought by technologies upgrading and will expose to the risk of a downturn in the industry.Improvement actions: After years of development the Company has many times broken through the international

technology blockade upon the strong scientif ic research strength realized the home-made of liquid crystal glass

substrates and gradually become a leading enterprise in the production of integrated photoelectric display

materials and intelligent manufacturing. In recent years under the multi-round industry-driven model the

Company has made coordinated development and synergy development closely tracking and analyzing the trend

of macroeconomic situation predicting the macroeconomic changes mastering the relevant industry policies and

information and timely preventing from the policy risks and industry risks to ensure the efficiency and

effectiveness of the Company's operations as well as effectively responded to the macroeconomic cyclical

fluctuations. Furthermore upon the continuous investment in scientific research the Company has maintained the

technological advantages in the f ield of optoelectronic display. In order to cope with the risks of technology

substitution and to adapt to the development trend and technological changes the Company will continue to

increase investment in research and development putting efforts to make constant breakthroughs in the ultra-thin

glass high-temperature glass and OLED carrier glass thereby effectively improving the core technology level and

market competitiveness of glass substrates.

2. Risks brought by the continuous decline of subsidies for new-energy vehicles

With the gradual maturity of the new energy automobile industry the continuous decline of new energy

automobile subsidies will bring certain impact on the future sales of new energy automobile produc ts. At present

the new energy automobile industry is highly competitive and highly dependent on policy. Although the Company

has detailedly measured the feasibility of realizing the relevant business plan after the subsidies retreat Sunlong

bus will face the risk of its business performance less-than-expected if there are major adverse changes in the

relevant industrial policies in the future. Besides in recent years due to the slow global economic recovery

exchange rate fluctuations changes in the economic pattern and other complex factors the automobile market

competition will be increasingly intens ified.Improvement actions: In the future the competition in China's auto industry will continue to intens ify. Due to the

gap between technology and capital the leading enterprises have strong ability to reduce costs. In the future the

industry concentration is expected to increase significantly and the effect of leading position will be increasingly

obvious-that a leading company with the comprehensive advantages of technology capital R&D and brand will

continue to benefit more and the small-scale companies will have limited profit margins. In addition with the

gradual improvement and upgrade of related technologies in power batteries vehicle manufacturing charging

piles charging stations and so on the production costs and the unit sales prices will be effectively reduced; thus

the production costs of Shenlong Bus is expected to gradually decline which will effectively offset the adverse

effects brought by the subsidy retreat policy and will then drive the demand growth and sales of Shenlong new

energy passenger bus products. In recent years with the increasing awareness of environmental protection among

Chinese people new energy vehicles have become more and more popular and new energy vehicles are more

likely to be accepted by the public as a major force for energy conservation and emission reduction. Furthermore

with the continuous deepening development of the “One Belt One Road” construction-which is deemed as the

world's longest economic corridor across more than 60 countries and regions the overseas new energy bus market

is likely to have a gradual recovery thus providing a good external environment for the development of Sunlong

Bus's overseas business. Meanwhile the building work of the auto finance business was initiated which not only

solved the recent operational disturbances but also mainly solved the diff iculties and shortcomings faced in the

long-term scale development.V. Important Events

1. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period

1.Annual General Meeting

Meeting Type

Investor

participation

ratio

Convened date Disclosure date Index to disclosed information

The First provisional

shareholders’

General meeting in

2019

Provisional

shareholders’

General

meeting

24.21% April 192019 April 202019

Announcement No.:2019-024)..

Published in China Securities Daily Securi

ties Times Shanghai Securities Daily

Securities daily Hong Kong Commercial

Daily and http//.www.cninfo.com.cn.

2018 Shareholders’

general meeting

Annual

Shareholders’

General

Meeting

18.93% May 202019 May 212019

Announcement No.:2019-039)..

Published in China Securities Daily Securi

ties Times Shanghai Securities Daily

Securities daily Hong Kong Commercial

Daily and http//.www.cninfo.com.cn.

The Second

provisional

shareholders’

General meeting in

2019

Provisional

shareholders’

General

meeting

18.96% June 142019 June 152019

Announcement No.:2019-047)..

Published in China Securities Daily Securi

ties Times Shanghai Securities Daily

Securities daily Hong Kong Commercial

Daily and http//.www.cninfo.com.cn.

The Third

provisional

shareholders’

General meeting in

2019

Provisional

shareholders’

General

meeting

19.13% July 152019 July 162019

Announcement No.:2019-047)..

Published in China Securities Daily Securi

ties Times Shanghai Securities Daily

Securities daily Hong Kong Commercial

Daily and http//.www.cninfo.com.cn.

The Fourth

provisional

shareholders’

General meeting in

2019

Provisional

shareholders’

General

meeting

19.11% July 262019 July 272019

Announcement No.:2019-071)..

Published in China Securities Daily Securi

ties Times Shanghai Securities Daily

Securities daily Hong Kong Commercial

Daily and http//.www.cninfo.com.cn.

2. Preferred stockholders restored voting rights to request to convene Provisional Shareholders’ Meeting.

□Applicable√Not applicable

II. Proposal for profit distribution and converting capital Reserve into share actual for the reporting period

□ Applicable √Not applicable

For the reporting period the Company plans not to distribute cash dividends or bonus shares or convert capital

reserve into share capital.III. The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the

reporting period made by the company shareholder actual controller acquirer director supervisor

senior management personnel and other related parities.

□ Applicable √Not applicable

Not -existent

IV. Particulars about engagement and disengagement of CPAs firm

Whether the semi-annual financial report had been audited?

□ Yes √ Not

The semi-annual report was not audited.

V. Explanations given by board of directors and supervisory board regarding “ Modified auditor’s” Issued

by CPAs firm for the reporting period

□ Applicable √ Not applicable

VI. Explanations given by Board of Directors regarding “ Modified auditor’s Report” Issued for last year

□ Applicable √ Not applicable

VII. Bankruptcy and restructuring

□ Applicable √ Not applicable

No such cases in the reporting period.VIII. Legal matters

Significant lawsuits or arbitrations

□ Applicable √ Not applicable

No such cases in the reporting period.Other legal matters

□ Applicable √ Not applicable

IX. Punishments and rectifications

□ Applicable √ Not applicable

No such cases in the reporting period.

X. Credit conditions of the Company as well as its Controlling shareholder and actual Controller

□ Applicable √ Not applicable

XI.Equity incentive plans employee stock ownership plans or other incentive measures for employees

√ Applicable □Not applicable

1. The Company's first session of staff shareholding plan totaled RMB 495.4 million and involved full-amount

subscription of 72639296 shares in the Company's 2015 private placement through Changjiang Xingli No.2

Directed Issue Plan at cost price of RMB 6.82/share. Going public at Shenzhen Stock Exchange on December 17

2015 the preceding shares will sustain 48 months in total. The restriction on sales was relieved in the staff

shareholding plan on December 18 2018. The due date is December 16 2019.On June 15 2019 the company disclosed the Suggestive Announcement on the First Phase of Employee Stock

Ownership Plan 6 months before the expiration of the first phase of employee stock ownership plan according to

the relevant provisions of Shenzhen Stock Exchange's Mainboard Information Disclosure Memorandum No 3 -

Equity Incentive and Employee Stock Ownership Plan.

2. The Company set up the second session of its staff shareholding plan on September 5 2017. Through the

assembled fund trust plan of the Zhonghai Trust-Tunghsu Optoelectronic Staff Shareholding Plan 52555280

shares of the Company were bought at the secondary market in such methods as centralized bidding and block

trade involving the amount of RMB 496412100 RMB 9.45/share in average; on December 28 2017 the

transaction was completed and funds earned were transferred to the account of the assembled fund trust plan. The

duration is 24 months and the duration of the Employee Stock Ownership Plan will expire on September 4 2019.On March 2 2019 the company disclosed the Suggestive Announcement on the Second Phase of Employee Stock

Ownership Plan 6 months before the expiration of the second phase of employee stock ownership plan according

to the relevant provis ions of Shenzhen Stock Exchange's Mainboard Information Disclosure Memorandum No 3 -

Equity Incentive and Employee Stock Ownership Plan.

According to the Guidance on Regulating Asset Management Bus iness of Financial Institutions jointly issued by

the People's Bank of China the Bank of China Insurance Regulatory Commission the China Securities

Regulatory Commission and the State Administration of Foreign Exchange (YF [2018] No.106 hereinafter

referred to as the "New Regulation of Assets") the "Zhonghai Trust Co. Ltd. - Zhonghai Trust-Tunghsu

Optoelectronic Collective Funds Trust Plan for Employee Stock Ownership Plan" subscribed for in the second

phase of the Company's Employee Stock Ownership Plan does not meet the requirements of the new regulation on

leverage ratio. According to the new asset management regulations and related regulatory requirements the

company's second phase of employee stock ownership plan will not be extended. The company disclosed the

Announcement on the Termination of the Company's Second Phase of Employee Stock Ownership Plan on July

27 2019 in accordance with the relevant provisions of Shenzhen Stock Exchange's Mainboard Information

Disclosure Memorandum No 3 - Equity Incentive and Employee Stock Ownership Plan the Second Phase of

Employee Stock Ownership Plan of Tunghsu Photoelectric Technology Co. Ltd. (Draft) and Shenzhen Stock

Exchange's Information Disclosure Guidelines for Listed Companies No.4 - Employee Stock Ownership Plan

(Draft for Comments).

XII.Material related transactions

1. Related transactions in connection with daily operation

√ Applicable □Not applicable

Related

parties

Relation

ship

Type of

trade

Subjects

of the

related

transacti

ons

Principl

e of

pricing

the

related

transacti

ons

Price of

trade

Amount

of trade

(ten

thousand)

Rati

o in

simil

ar

trade

s

Trading

limit

approved(t

en

thousand)

Whe

ther

over

the

appr

oved

limit

Way of

payment

Market

price of

similar

trade

available

Date of

disclosu

re

Index

of

inform

ation

disclos

ure

ed or

not

(Y/N

)

Zhongsh

an

Shenzho

ng Real

Eaeste

Develop

ment

Co.

Ltd.

Controll

ed by

the same

actual

controll

er

Selling

goods

and

providin

g

services

Constru

ction

Enginee

ring

Referen

ce price

setting

22971.2

4

22971.24 70881.1 No Currency 22971.24

April

302019

http://

www.c

ninfo.c

om.cn

Donggu

an Real

Eaeste

Develop

ment

Co.

Ltd.

Controll

ed by

the same

actual

controll

er

Selling

goods

and

providin

g

services

Constru

ction

Enginee

ring

Referen

ce price

setting

9353.83 9353.83 23822.96 No Currency 9353.83

April

302019

http://

www.c

ninfo.c

om.cn

Kunmin

g

Tunghsu

Qiming

Investm

ent

Develop

ment

Co.

Ltd.

Controll

ed by

the same

actual

controll

er

Selling

goods

and

providin

g

services

Constru

ction

Enginee

ring

Referen

ce price

setting

8184.12 8184.12 57164.1 No Currency 8184.12

April

302019

http://

www.c

ninfo.c

om.cn

Huidong

Baoan

Hongji

Real

estate

Develop

ment

Co.

Ltd.

Controll

ed by

the same

actual

controll

er

Selling

goods

and

providin

g

services

Constru

ction

Enginee

ring

Referen

ce price

setting

7878.76 7878.76 22686.34 No Currency 7878.76

April

302019

http://

www.c

ninfo.c

om.cn

Chongqi

ng

Tunghsu

Qide

Real

estate

Co.

Ltd.

Controll

ed by

the same

actual

controll

er

Selling

goods

and

providin

g

services

Constru

ction

Enginee

ring

Referen

ce price

setting

7273.87 7273.87 1600 Yes Currency 7273.87

April

302019

http://

www.c

ninfo.c

om.cn

Zhongsh

an

Shenzho

ng Real

Eaeste

Investm

ent Co.Ltd.

Controll

ed by

the same

actual

controll

er

Selling

goods

and

providin

g

services

Constru

ction

Enginee

ring

Referen

ce price

setting

5174.76 5174.76 500 No Currency 5174.76

April

302019

http://

www.c

ninfo.c

om.cn

Total -- -- 60836.58 -- 176654.5 -- -- -- -- --

Details of any sales return of a large

amount

Nil

Give the actual situation in the report

period where a forecast had been

Nil

made for the total amounts of routine

related-party transactions by type to

occur in the current period(if any)

Reason for any significant difference

between the transaction price and the

market reference price (if applicable)

Not applicable

2. Related-party transactions arising from asset acquisition or sold

□ Applicable √ Not applicable

No such cases in the reporting period.

3. Related-party transitions with joint investments

□Applicable √ Not applicable

No such cases in the reporting period.

4. Credits and liabilities with related parties

√ Applicable □Not applicable

Whether has non-operational contact of related liability and debts or not

□ Yes √ No

No such cases in the reporting period.

5. Other significant related-party transactions

□Applicable √ Not applicable

No such cases in the reporting period.XIII. Particulars about the non-operating occupation of funds by the Controlling shareholder and other

related parties of the Company

□Applicable √ Not applicable

The company was not involved in the non-operating occupation of funds by the controlling shareholder and other

related parties during the reporting period.XIV. Significant contracts and execution

1.Entrustments contracting and leasing

（1）Entrustment

□Applicable √ Not applicable

No such cases in the reporting period.

（2）Contracting

□Applicable √ Not applicable

No such cases in the reporting period.（3）Leasing

□Applicable √ Not applicable

No such cases in the reporting period.

2.Signif icant guarantees

√ Applicable □Not applicable

（1）Guarantees

Ten thousands yuan

External Guarantee (Exclude controlled subsidiaries)

Name of the

Company

Relevant

disclosure

date/No. of

the

guaranteed

amount

Amount of

Guarantee

Date of

happening

(Date of

signing

agreement)

Actual

mount of

guarantee

Guarantee type Guarantee term

Complete

implementa

tion

or not

Guarantee

for

associated

parties

(Yes or no)

Auto sales

mortgage

customers

July

142018

150000 21898.34

The joint

liability

guaranty

12 months No No

Total of external guarantee

approved in the report term

(A1)

0

Total of external guarantee

actually occurred in the report

term (A2)

21898.34

Total of external guarantee

approved as of end of report

term (A3)

150000

Total of external guarantee

actually occurred as of end of

report term (A4)

21898.34

Guarantee of the company for its subsidiaries

Guarantee

provided to

Amount of

guarantee

and date of

disclosure

Amount of

the

guarantee

Actual date of

occurring

(signing date of

agreements

Actual amount

of guarantee

Type of

guarantee

Term

Complete

d or not

Related

guarantee

Wuhu Tunghsu

Optoelectronic

Technology Co.Ltd.June

202013

132000

November

122013

59375

The joint

liability

guaranty

96 months No No

Wuhu Tunghsu

Optoelectronic

Technology Co.Ltd.September

272013

90000 April 82014 34375

The joint

liability

guaranty

96 months No No

Wuhu Tunghsu

Optoelectronic

Equipment

Technology Co.Ltd.

April

122014

150000 October 302014 29000

The joint

liability

guaranty

96 months No No

Wuhu Tunghsu

Optoelectronic

Technology Co.Ltd.November

182016

52300

December

22016

38678.63

The joint

liability

guaranty

6 years No No

Wuhu Tunghsu

Optoelectronic

Equipment

Technology Co.Ltd.

December

26 2017

9500 July 31 2018 9500

The joint

liability

guaranty

1 years No No

Tunghsu（Kunshan）

Display Material

May

112018

38000 May 142018 27166.67

The joint

liability

guaranty

From the

effective date

of the

No No

Co. Ltd. guarantee

contract to

two years

after the

expiration of

the term of

performance

of the finance

lease contract

Tunghsu（Kunshan）

Display Material

Co. Ltd.

July

142018

15000 July 262018 4950

The joint

liability

guaranty

3 years No No

Chongqing

Jinghuateng

Optoelectronic

Technology Co.Ltd.

August

42018

1000

September

262018

1000

The joint

liability

guaranty

1 year No No

Chongqing

Jinghuateng

Optoelectronic

Technology Co.Ltd.

August

42018

1000 February 72018 1000

The joint

liability

guaranty

1 year No No

Zhengzhou Xufei

Optoelectronic

Technology Co.Ltd.

August

312018

8000

September

182018

8000

The joint

liability

guaranty

12 months No No

Jiangsu Jixing New

material Co. Ltd.September

222018

10000

September

302018

8458.34

The joint

liability

guaranty

3 years No No

Shanghai Sunlong

September

222018

4000

November

52018

2000

The joint

liability

guaranty

1 year No No

Zhengzhou Xufei

September

222018

12000

September

282018

12000

The joint

liability

guaranty

1 year No No

Chongqing Jinghua

teng

September

222018

2000

September

272018

2000

The joint

liability

guaranty

1 year No No

Hunan Tunghsu

Delai

October

202018

12000

December

192018

2000

The joint

liability

guaranty

1 year No No

Guangxi Sunlong

October

202018

30000

November

292018

5000

The joint

liability

guaranty

No No

Jiangsu Tunghsu

Yitai

October

202018

2000 January 32019 1500

The joint

liability

guaranty

1 year No No

Suzhou Tengda

October

312018

2000 October 312018 2000

The joint

liability

guaranty

1 year No No

Chongqing Jinghua

teng

October

312018

2500

November

202018

2500

The joint

liability

guaranty

1 year No No

Guangxi Sunlong

October

312018

11000

December

282018

11000

The joint

liability

guaranty

3 years No No

Guangxi Sunlong

October

312018

19000 January 32019 9000

The joint

liability

guaranty

3 years No No

Suzhou Tengda

November

242018

2500

December

32018

2000

The joint

liability

guaranty

1 year No No

Tunghsu（Kunshan）

Display Material

Co. Ltd.

November

24 2018

30000

December

142018

10000

The joint

liability

guaranty

1 year No No

Shanghai Sunlong

December

262018

2500 January 32019 2500

The joint

liability

guaranty

12 months No No

Tunghsu（Kunshan）

Display Material

Co. Ltd.

January

172019

4950 0

The joint

liability

guaranty

24 months No No

Shanghai Sunlong

January

172019

2990 0

The joint

liability

guaranty

6 months No No

Guangxi Sunlong

January

262019

10000 January 282019 10000

The joint

liability

guaranty

1 year No No

Guangxi Sunlong

January

262019

17000 March 62019 10000

The joint

liability

guaranty

1 year No No

Zhengzhou Xufei

January

192019

11000 0

The joint

liability

guaranty

1 year No No

Hunan Tunghsu

Weitao

March

22019

5000 March 202019 3000

The joint

liability

guaranty

1 year No No

Jiangsu Tunghsu

Yitai

March

22019

3000 March 82019 2945

The joint

liability

guaranty

1 year No No

Wuhu Tunghsu

Optoelectronic

March

22019

6000 0

The joint

liability

guaranty

1 year No No

Wuhu Tunghsu

Weigao

March

232019

3000 0

The joint

liability

guaranty

1 year No No

Chongqing

Jinghuateng

April

42019

2000 April 192019 2000

The joint

liability

guaranty

1 year No No

Hunan Tunghsu

Weisheng

April

42019

2000 April 162019 2000

The joint

liability

guaranty

1 year No No

Chenzhou Xuhong

Traffic

May 92019 26200 June 62019 26200

The joint

liability

guaranty

15 years No No

Guangxi Sunlong May 92019 60000 May 212019 60000

The joint

liability

guaranty

36 months No No

Wuhu Tunghsu

Optoelectronic

Equipment

May

302019

28000 June 172019 10500

The joint

liability

guaranty

1 year No No

Shanghai Sunlong

June

282019

87500

The joint

liability

guaranty

No No

Total of guarantee for

subsidiaries

268640

Total of actual guarantee

for subsidiaries in the

140645

approved in the Period (B1) Period (B2)

Total of guarantee for

subsidiaries

approved at Period-end (B3)

906940

Total of actual guarantee

for subsidiaries at

Period-end (B4)

411648.64

Total approved guarantee

amount during the reporting

period(A1+B1+C1)

268640

Total amount of guarantee

amount in the reporting

period(A2+B2+C2)

162543.34

Total amount of guarantee

approved at the end of the

report(A3+B3+C3)

1056940

Total actual guarantee balance

at end of reporting

period(A4+B4+C4)

433546.98

The proportion of the total amount of actually guarantee in the

net assets of the company(A4+B4+C4)

13.14%

Including ：

Amount of guarantee for shareholders actual controller and itsassociated parties（D

0

The debts guarantee amount provided for the Guaranteed

parties whose assets-liability ratio exceed 70% directly or

indirectly（E）

17000

Proportion of total amount of guarantee in net assets of the

Company exceed 50% (F)

0

Total guarantee Amount of the abovementioned guarantees

（D+E+F）

17000

Explanations on possibly bearing joint and several liquidating

responsibilities for undue guarantees (if any)

Nil

Explanations on external guarantee against regulated

procedures (if any)

Nil

（2）Illegal providing of external guarantees

□ Applicable √Not applicable

No illegal providing of external guarantees in the report period.

3. Other significant contracts

□Applicable √ Not applicable

No such cases in the reporting period.XV. Social responsibilities

1.Major environmental protection

The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental

protection department

Yes

Company or

subsidiary

name

Main

pollutant

and specific

pollutant

name

Emission

way

Emission

port number

Emission

port

distribution

condition

Emission

concentratio

n

(mg/Nm3)

Implemente

d pollutant

emission

standards

Total

emission

Verified

total

emission(To

ns)

Excessive

emission

condition

Shanghai

Sunlong

Bus Co.

Ltd.

COD

After the

treatment

reaches the

standard

enter the

urban

sewage pipe

1

Total

discharge of

wastewater

in the

southeast

corner of

the plant

74mg/L

Shanghai

Integrated

wastewater

discharge

standard

DB31/199-2

018

/ /

Not

exceeded

Shanghai

Sunlong

Bus Co.

Ltd.

Ammonia

nitrogen

After the

treatment

reaches the

standard

enter the

urban

sewage pipe

1

Total

discharge of

wastewater

in the

southeast

corner of

the plant

5.63mg/L

Shanghai

Integrated

wastewater

discharge

standard

/ /

Not

exceeded

Shanghai

Sunlong

Bus Co.

Ltd.SS

After the

treatment

reaches the

standard

enter the

urban

sewage pipe

1

Total

discharge of

wastewater

in the

southeast

corner of

the plant

8mg/L

Shanghai

Integrated

wastewater

discharge

standard

DB31/199-2

018

/ /

Not

exceeded

Shanghai

Sunlong

Bus Co.

Ltd.Petroleum

After the

treatment

reaches the

standard

enter the

urban

sewage pipe

1

Total

discharge of

wastewater

in the

southeast

corner of

the plant

0.26mg/L

Shanghai

Integrated

wastewater

discharge

standard

DB31/199-2

018

/ /

Not

exceeded

Shanghai

Sunlong

Bus Co.

Ltd.TP

After the

treatment

reaches the

standard

enter the

urban

sewage pipe

1

Total

discharge of

wastewater

in the

southeast

corner of

the plant

2.19mg/L

Shanghai

Integrated

wastewater

discharge

standard

/ /

Not

exceeded

Shanghai

Sunlong

Bus Co.

Ltd.

VOCs

High-altitud

e emissions

after

treatment

has reached

the standard

4

Factory

west

4.906mg/m3

"Automotiv

e

Manufacturi

ng

(Painting)

Air

Pollutant

Emission

Standards"

DB32/859-2

014

8.27t /

Not

exceeded

Shanghai

Sunlong

Bus Co.

Ltd.

SO2

High-altitud

e emissions

after

treatment

has reached

the standard

10

West part of

the middle

of Factory

10.71mg/m3

"Emission

Standards

for Air

Pollutants

in Industrial

Furnaces"

DB31/860-2

014

0.00115t /

Not

exceeded

Shanghai

Sunlong

Bus Co.

Ltd.NO

High-altitud

e emissions

after

treatment

has reached

the standard

10

West part of

the middle

of Factory

11.375mg/

m3

"Emission

Standards

for Air

Pollutants

in Industrial

Furnaces"

DB31/860-2

014

0.536t /

Not

exceeded

Shanghai

Sunlong

Bus Co.

Ltd.PM

High-altitud

e emissions

after

treatment

has reached

the standard

18

The middle

of Factory

2.669mg/m3

"Integrated

Emission

Standards

for Air

Pollutants"

DB31/933-2

015

2.997t /

Not

exceeded

Guangxi Chemical Continuous 1 There is 1 45mg/L Integrated 0.92t / Not

Sunlong oxygen

demand

Blowdown total sewage

outlet

Wastewater

Discharge

Standard

Level 3

Standard

exceeded

Guangxi

Sunlong

Ammonia

nitrogen

Continuous

Blowdown

1

There is 1

total sewage

outlet

2.24 mg/L

Integrated

Wastewater

Discharge

Standard

Level 3

Standard

0.08t /

Not

exceeded

Guangxi

Sunlong

Toluene

Continuous

Blowdown

31

31 exhaust

outlets in

the painting

workshop

0.135mg/m3

Integrated

Wastewater

Discharge

Standard

Level 3

Standard

0.032t /

Not

exceeded

Guangxi

Sunlong

Xylene

Continuous

Blowdown

31

31 exhaust

outlets in

the painting

workshop

0.45 mg/m3

Integrated

Wastewater

Discharge

Standard

Level 3

Standard

0.03t /

Not

exceeded

Guangxi

Sunlong

Particulate

matter

Continuous

Blowdown

31

31 exhaust

outlets in

the painting

workshop

3.4 mg/m3

Integrated

Wastewater

Discharge

Standard

Level 3

Standard

0.284t /

Not

exceeded

Chengdu

Tunghsu

Intelligence

Technology

Co. Ltd.

Waste water

Directly

discharge to

industrial

port sewage

pipe

network

4

Undergroun

d water pipe

in the park

8mg/L

Water

quality

standard for

sewage to

be

discharged

into urban

sewage

drain

（CJ3082-1

999）

14t/a 15 t/a

Not

exceeded

Chengdu

Tunghsu

Intelligence

Technology

Co. Ltd.

DUST Bag filter 2

Production

Workshop

1mg/ m3

Integrated

Emission

Standard of

Air

Pollutants

(GB16297-

1996)

secondary

standards

110 mg/ m3 120mg/m3

Not

exceeded

Chengdu

Tunghsu

Intelligence

Technology

Co. Ltd.

Tin and its

compounds

Air

extraction

and exhaust

system

2

Production

Workshop

0.24mg/ m3

Integrated

Emission

Standard of

Air

Pollutants

(GB16297-

1996)

secondary

standards

3.3 mg/ m3 8.5 mg/ m3

Not

exceeded

Chengdu

Tunghsu

Intelligence

Technology

Co. Ltd.

NOISE / / In the Zone

Daytime

(65) dB/A

Nightime

(55) dB/A

Emission

Standard for

Industrial

Enterprises

Noise at

16500 m3/h 20000 m3/h

Not

exceeded

Boundary

(GB12348-

2008)

Tunghsu（Yingkou）

Photoelectri

c display

Co. Ltd.

Wastewater

After

treatment

the waste

water from

the plant

area will

enter the

municipal

pipe

network of

the

industrial

base

through the

total

discharge

outlet and

be

discharged

to the No.3

sewage

treatment

plant of

Liaoning

(Yingkou)

coastal

industrial

base for

further

treatment.

1

Near the

gate on the

east side of

the plant

area

PH：6-9；

COD：

52.07mg/L；

SS：

28.78mg/L；

BOD：

22.25mg/L；

ammonia

nitroge：

1.31mg/L

Integrated

Wastewater

Discharge

Standard of

Liaoning

Province

（DB21/16

27-2008）

Waste

water535m3

/d；COD：

9.93t/a；SS：

5.44t/a；

BOD：

4.24t/a；

ammonia

nitroge：

0.25t/a

Waste

water1005.4

m3/d；COD：

57.21t/a；

SS：

56.71t/a；

BOD：

47.64t/a；

ammonia

nitroge：

5.73t/a

Not

exceeded

Fuzhou

Tunghsu

Optoelectro

nic

Technology

Co. Ltd.

COD

After the

treatment

reaches the

standard it

enters the

urban

sewage pipe

network

1

Total

wastewater

discharge

outlet in

southeast

corner of

plant area

50mg/L

Integrated

Wastewater

Discharge

Standard

GB8978-19

97

5.48t/a 117.1t/a

Not

exceeded

Fuzhou

Tunghsu

Optoelectro

nic

Technology

Co. Ltd.

Ammonia

Nitrogen

After the

treatment

reaches the

standard it

enters the

urban

sewage pipe

network

1

Total

wastewater

discharge

outlet in

southeast

corner of

plant area

5mg/L

Water

quality

standard for

sewage to

be

discharged

into urban

sewage

drain

CJ-343-201

0

0.55t/a 15.6t/a

Not

exceeded

Jiangsu

Jixing New

Material

Co. Ltd.

COD

Discharge

into the

municipal

sewage

treatment

plant

through the

sewage pipe

network

1

WS-960001

west side of

sewage

treatment

station

≤500

HJ/T399-20

07

5.2446t 7.35t

Not

exceeded

Jiangsu

Jixing New

Material

COD

Discharge

into the

municipal

1

WS-960001

west side of

sewage

≤5

GB/T11901

-1989

0.325t 0.735t

Not

exceeded

Co. Ltd. sewage

treatment

plant

through the

sewage pipe

network

treatment

station

Jiangsu

Jixing New

Material

Co. Ltd.

Ammonia

Nitrogen

Discharge

into the

atmosphere

through

alkali mist

spraying

treatment

facilities

1

FQ-960001

north side

of

manufacturi

ng

workshop

Emission

concentratio

n ≤ 100

mg/m3;

Emission

rate

≤0.26kg/h

GB16297-1

996

0.002165t 0.566t

Not

exceeded

Sichuan

Xuhong

Optoelectro

nic

Technology

Co. Ltd.

NOX 、particulate

matter

(melting

furnace)

particulate

matter

(ingredients

broken

glass)

After being

treated by

dust

removal

system and

denitration

system it is

discharged

into the

atmosphere

3

Furnace

exhaust gas:

60-meter

high

chimney

batching

particulate

matter in

northwest

of the plant

area:

crushed

glass feed

particulate

matter on

batching

roof in

northwest

of the plant

area: 3rd

floor of

crushed

glass

feeding

building in

northwest

of the plant

area

NO2≤700m

g/m3 NOX

≤400mg/m3

Granule

(melting

furnace)

≤50mg/m3

Particulate

matter

(batching

broken

glass)≤30m

g/m3

Emission

Standard of

Air

Pollutants

for Flat

Glass

Industry

(GB26453-

2011)

NOX ：

82.67tons

/year

SO2：1.28

tons/year

Particulate

matter: 2.09

tons/year

NOX ：

82.67tons/y

ear

SO2：8.49

tons/year

Particulate

matter: 6.23

tons/year

Not

exceeded

Taizhou

Enwang

New Energy

Technology

Co. Ltd.

Waste acid

External

handling

Nil Nil PH 1-3 / 70t 100t

Not

exceeded

Wuhu

Tunghsu

Optoelectro

nic

Technology

Co. Ltd.

（SO2）

After

passing

through the

flue gas

treatment

system it is

directly

discharged

into the

atmosphere.

2

Between

plant 101

and plant

202

4.15 mg/m3

SO2≤400

mg/m3

0.3 t 4.52 t/a

Not

exceeded

Wuhu

Tunghsu

Optoelectro

nic

Technology

Co. Ltd.

(NOX)

After

passing

through the

flue gas

treatment

system it is

directly

discharged

2

Between

plant 101

and plant

202

182.9

mg/m3

NOX≤700

mg/m3

14.3 t 84.76 t/a

Not

exceeded

into the

atmosphere.Wuhu

Tunghsu

Optoelectro

nic

Technology

Co. Ltd.

(COD)

After

neutralizatio

n it enters

the

Chengdong

Sewage

Treatment

Plant

through

municipal

sewage pipe

network

1

East side of

the east gate

of the

company

7 mg/L

COD≤500

mg/L

4.3 t 42.5 t/a

Not

exceeded

Wuhu

Tunghsu

Optoelectro

nic

Technology

Co. Ltd.

NH3 -N)

After

neutralizatio

n it enters

the

Chengdong

Sewage

Treatment

Plant

through

municipal

sewage pipe

network

1

East side of

the east gate

of the

company

1.17 mg/L / 0.72 t 2.86 t/a

Not

exceeded

Wuhu

Tunghsu

Optoelectro

nic

Equipment

Technology

Co. Ltd

Wastewater

noise solid

waste

(waste

cutting

liquid)

Wastewater;

After

treatment it

is

discharged

by Wuhu

Tunghsu

Photovoltai

c

Technology

Co. Ltd

after

reaching the

standard;

Noise:

reasonable

layout and

noise

reduction

measures;

Solid waste:

waste

cutting

liquid shall

be

recovered

and treated

by a

qualified

company

/ /

Meet the

requirement

s and

standards

Integrated

Wastewater

Discharge

Standard

(GB8978-1

996) and

Emisson

Standard for

Industrial

Enterprises

Noise at

Boundary

（GB12348

-2008）

Noise: up to

standard

Wastewater:

up to

standard

after

treatment

solid waste

(waste

cutting

liquid): 0.2

tons

Subject to

the

requirement

s of

environmen

tal

protection

standards

Not

exceeded

Zhengzhou

Xufei

Nitrogen

oxides

The furnace

flue gas is

discharged

after being

treated by a

bag filter

and the

boiler flue

gas is

5

1 chimney

for the

first-stage

glass

furnace 1

chimney for

the

second-stag

e glass

一 Flue gas

discharge

port of

first-stage

furnace:

226mg/m3.

Flue gas

discharge

port of

The flue gas

of glass

furnace

shall be

subject to

the limit

values in

Table 2 of

Emission

7.918t/a 10.014t/a

Not

exceeded

discharged

after being

treated by a

low-nitroge

n burner

furnace and

1 chimney

for each of

the 3 natural

gas boilers

second-stag

e furnace:

288mg/m3

Standard of

Air

Pollutants

for

Electronic

Glass

Industry

(GB29495-

2013) and

the flue gas

of boiler

shall be

subject to

the

emission

limit values

in Table 1

of Emission

Standard of

Air

Pollutants

for Boiler

(GB13271-

2014)

Zhengzhou

Xufei

SO2

The furnace

flue gas is

discharged

after being

treated by a

bag filter

and the

boiler flue

gas is

discharged

after being

treated by a

low-nitroge

n burner

5

1 chimney

for the

first-stage

glass

furnace 1

chimney for

the

second-stag

e glass

furnace and

1 chimney

for each of

the 3 natural

gas boilers

Flue gas

outlet of

first-stage

furnace: not

detected.

Flue gas

outlet of

second-stag

e furnace:

not

detected.The flue gas

of glass

furnace

shall be

subject to

the limit

values in

Table 2 of

Emission

Standard of

Air

Pollutants

for

Electronic

Glass

Industry

(GB29495-

2013) and

the flue gas

of boiler

shall be

subject to

the

emission

limit values

in Table 1

of Emission

Standard of

Air

Pollutants

for Boiler

(GB13271-

2014)

0t/a 1.387t/a

Not

exceeded

Zhengzhou

Xufei

Particulates

The furnace

flue gas is

discharged

after being

treated by a

bag filter

and the

boiler flue

gas is

5

1 chimney

for the

first-stage

glass

furnace 1

chimney for

the

second-stag

e glass

一 Flue gas

discharge

port of

first-stage

furnace:

4.26mg/m3.

Flue gas

discharge

port of

The flue gas

of glass

furnace

shall be

subject to

the limit

values in

Table 2 of

Emission

0.113t/a \

Not

exceeded

discharged

after being

treated by a

low-nitroge

n burner

furnace and

1 chimney

for each of

the 3 natural

gas boilers

second-stag

e furnace:

3.61mg/m3

Standard of

Air

Pollutants

for

Electronic

Glass

Industry

(GB29495-

2013) and

the flue gas

of boiler

shall be

subject to

the

emission

limit values

in Table 1

of Emission

Standard of

Air

Pollutants

for Boiler

(GB13271-

2014)

Zhengzhou

Xufei

COD

Domestic

wastewater

is

discharged

after

biochemical

(AO2)

treatment

and

production

wastewater

is

discharged

after

1

The

company

has set up a

total

wastewater

discharge

port

9.67mg/L

Implementa

tion of the

integrated

sewage

discharge

standard

(GB8978-1

996) table 4

secondary

standards

3.22t/a 9.1t/a

Not

exceeded

Zhengzhou

Xufei

Ammonia

Nitrogen

Domestic

wastewater

is

discharged

after

biochemical

(AO2)

treatment

and

production

wastewater

is

discharged

after

1

The

company

has set up a

total

wastewater

discharge

port

0.41mg/L

Implementa

tion of the

integrated

sewage

discharge

standard

(GB8978-1

996) table 4

secondary

standards

0.07t/a 0.13t/a

Not

exceeded

Chongqing

Jinghuateng

Non-methan

e total

hydrocarbo

n

Be

organized

Emission

standard of

packaging

and printing

industry

/ 0.38

Not

exceeded

Entrust financial expected to be unable to recover the principal or impairment might be occurred

1. Shanghai Sunlong Bus Co. Ltd

Shanghai Sunlong Bus Co. Ltd. operates normally throughout the year. The main pollutants are wastewater

exhaust gas and hazardous waste. The rain and sewage diversion drainage system was completed in 2008. An

industrial wastewater treatment station was built to mainly treat coating wastewater in the production process

with a designed treatment capacity of 10 t/h and a physical and biochemical treatment process adopted. All the

production wastewater will be discharged into the municipal sewage pipe network (Yuanshan Road) together with

38

domestic sewage after reaching the treatment standard and finally into the Bailonggang system. During the

reporting period the wastewater treatment station operated normally and the discharge reached the standard.

Exhaust gas treatment: organic exhaust gas (VOCs) from spraying and painting is treated by zeolite rotating wheel

+RTO combustion process and then discharged at high altitude; low-concentration organic exhaust gas (VOCs) is

treated by activated carbon adsorption and desorption + catalytic combustion process and discharged at high

altitude after reaching the standard; Online monitoring system (FID) is installed at the discharge port of organic

exhaust gas (VOCs) to monitor the emission value in real time; For particulate matter welding fumes etc. filter

core filtration technology is adopted to remove dust and the dust is discharged at high altitude after reaching the

standard; Facilities that need to be heated in the production process shall be natural gas burners. Through the

ternary internal circulation process natural gas is efficiently combusted energy consumption is reduced and

pollutant emission is reduced.

2. Guangxi Sunlong Automobile Manufacturing Co. Ltd

In the first half of 2019 the company's environmental protection equipment and facilities operated continuously

reliably and stably regular pollutant monitoring was carried out and the requirements of the national

environmental protection emission standard were implemented strictly to ensure that all kinds of pollutants reach

the standard for emission.

1) Construction of pollution prevention and control facilities

Exhaust gas emission and treatment: The coating exhaust gas uses water-filled + activated carbon adsorption

device to control volatile organic compounds toluene xylene and other atmospheric pollutants. The purified

exhaust gas is discharged through a 15m high exhaust cylinder. The company has 6 water-filled+activated carbon

adsorption devices; Catalytic combustion device is used to control volatile organic compounds toluene xylene

and other air pollutants in the coating and drying waste gas. The purified waste gas is discharged through a 15m

high exhaust cylinder. The company has 3 sets of catalytic combustion device; The putty polishing chamber glass

fiber reinforced plastic polishing chamber and midway polishing chamber adopt the process of installing bag filter

at the bottom exhaust channel and the top of the air supply to control atmospheric pollutants such as particulate

matters. The collected waste particulate matters after bag filter are respectively discharged through a 15m high

exhaust cylinder. The company has a total of 8 bag dust removal devices. The waste gas from paint makeup is

controlled by activated carbon adsorption devices to control volatile organic compounds particulate matters and

other atmospheric pollutants. The company has 8 sets of activated carbon adsorption devices and the purified

waste gas is discharged through a 15m high exhaust cylinder. Environmental protection equipment and facilities

continued to operate steadily and all kinds of pollution factors met the discharge standards.Wastewater discharge and treatment: the company's wastewater mainly consists of domestic wastewater rain test

wastewater and coating circulating wastewater among which the rain test wastewater is discharged every six

months and the coating circulating wastewater is discharged every quarter the domestic wastewater is treated by

septic tank and mixed with the production wastewater then enters the plant sewage treatment station for treatment

and then is discharged to Wuxiang sewage treatment through municipal sewage pipe network for further treatment.The plant sewage treatment station mainly adopts the process of oil isolation +UASB anaerobic+biological

contact oxidation. About 3000 tons of wastewater are treated in the first half of 2019 and the waste water

pollution factors monitored reach the standard.Noise treatment: reasonable layout of high-noise equipment and noise control measures such as sound insulation

sound absorption and vibration reduction. Noise monitoring at plant boundary is qualified.Solid waste treatment: the solid wastes generated by the company mainly include general solid wastes such as

paper skins and cartons and hazardous wastes such as paint residues and waste organic solvents among which

paint residues and other hazardous wastes are entrusted to CECEP (Guangxi) CleanTech Development Co. Ltd.which has a hazardous waste management license for disposal.In the first half of 2019 a total of 20 tons of hazardous waste such as paint residue and resin-containing waste are

transferred for disposal with a harmless disposal rate of 100%.

3. Chengdu Tunghsu Intelligent Technology Co. Ltd

1) Wastewater: All kinds of wastewater can meet the requirements of Grade III standard of Integrated Wastewater

Discharge Standard (GB8978-1996) after being treated by corresponding measures. Wastewater is discharged into

the sewage pipe network of the park from the main discharge port and enters Qingshui River after being treated

by Chengdu Cooperative Sewage Treatment Plant and an obvious signboard is set at the main discharge port.

2) Exhaust gas: Solder smoke is collected through the exhaust system provided by welding equipment above each

area and finally collected by a 20-meter-high exhaust cylinder and directly discharged after which it can meet

the Grade II standard of Integrated Emission Standard of Air Pollutants (GB16297-1996).

3) Noise: Reasonable arrangement of sound sources; Low noise equipment is adopted in the selection; Most of the

noise equipment is installed in a closed plant building; Evolutionary exhaust system.Environmental impact assessment of construction projects and other administrative permission for environmental

protection

4. Tunghsu (Yingkou) Optoelectronic Display Co. Ltd.

1) The output of grinding wastewater in this project is 160m3/d mainly containing SS and wastewater. The

wastewater is collected through pipelines enters the grinding wastewater equalization tank of the wastewater

treatment station and is pumped into the grinding wastewater treatment sys tem for treatment. The wastewater is

discharged into the sedimentation tank for coagulation sedimentation after being precipitated by stepped

precipitation tank and finally discharged into the integrated treatment system for further treatment and then

discharged into the sewage treatment plant of the industrial base for further treatment through the municipal pipe

network of the industrial base. This project adopts coagulation and sedimentation process to treat grinding

wastewater. The design capacity of the grinding wastewater treatment system is 400 m3/d and the production

capacity of grinding wastewater in this project is 176m3/d. It is fully capable of treating grinding wastewater

generated in this project.

2) The cleaning wastewater enters the regulating tank adjusts its PH value for neutralization treatment and then is

pumped into the sedimentation tank and is discharged into the total sewage outlet of the plant area after

sedimentation treatment. The treatment capacity of the cleaning wastewater treatment system in this project is 700

m3/d and the production capacity of the cleaning wastewater in this project is 210 m3/d which is fully capable of

treating the cleaning wastewater produced in this project.

3) The discharge amount of domestic wastewater in this project is 20 m3/d including washing flushing and

canteen drainage. The main pollutants COD SS ammonia nitrogen etc. are designed in the domestic wastewater

treatment system. Oil separation tank+septic tank is adopted for treatment which has good removal effect on large

suspended solids animal and plant oil etc. Septic tank is a common simple biochemical treatment measure for

wastewater. It has good and stable treatment effect on domestic sewage.

4) Three-layer anti-seepage measures are adopted for the production workshop chemical warehouse and ground

of this project i.e. the bottom layer shall be paved with not less than 30 cm thick concrete for compaction whose

top shall be paved with 100mm thick concrete and then hardened with 200mm thick high-strength concrete to

ensure the permeability coefficient is less than 1x10-7cm/s and the water treatment structure shall be constructed

with anti-seepage concrete; Each link of drainage is transported by cement or ceramic anti-seepage pipelines.

Except for Green land the ground of the plant area is all coated with cement plastering anti-seepage hardening.

After the anti-seepage and anti-corrosion measures mentioned above are adopted the pollution effects of chemical

warehouse and production workshop on groundwater can be effectively prevented.

5.Fuzhou Tunghsu Optoelectronic Co. Ltd.

1. Fuzhou Tunghsu optoelectronic operates normally during the whole year and produces main pollution of waste

water. In 2017 it built the rain and sewage diversion system and waste water treatment station with designed

treatment capacity of 1000t/d which adopts PH adjustment + secondary concrete sedimentation treatment process.

All production waste water will be collected after treatment and meeting standards and discharged into Rongyuan

sewage treatment plant together with pre-treated sanitary sewage by septic tank for uniform treatment. The waste

water treatment station operates normally during the report period and discharges per standards.

6. Jiangsu Jixing New Material Co. Ltd

The existing wastewater treatment facilities of Jiangsu Jixing New Material Co. Ltd are operating normally with

an approved wastewater treatment capacity of 52030 t/a; The expanded sewage treatment station facility was put

into operation in April with an approved wastewater treatment capacity of 147037 t/a.

7.Sichuan Xuhong Optoelectronic Technology Co. Ltd.

1)SCR denitration system (1 set)

The company uses natural gas as the fuel for glass production and the air pollutants produced are mainly

particulates sulfur dioxide and nitrogen oxides. In 2015 the company spent a lot of money to establish an SCR

denitration system. Untreated furnace flue gas enters the electrostatic precipitator of the denitration system

through the flue. The dedusted flue gas enters the SCR reactor with ammonia water as reductant and V2O5/TiO2

as catalyst. Nitrogen oxides in the flue gas are reduced to N2 and then enter the 60-meter-high chimney through

the outlet flue for emission. In order to ensure that the pollutants discharged by the company reach the standard

the denitration system operates continuously throughout the year. The denitration system of the company is

equipped with two flue gas induced draft fans (one for use and one for standby) which adopt double-loop power

supply. The operation personnel of denitration treatment facilities are subject to 4 shifts and 3 rotations to ensure

that the operation personnel are on duty 24 hours a day. The operation management shall be carried out strictly in

accordance with the operation procedures operation instructions and inspection tour operation instructions and

the operation parameters shall be monitored in real time to ensure the normal operation rate of denitration system

to the greatest extent.2) Dust removal equipment (13 filter cartridge dust collectors and 1 bag filter)

The company produces a small amount of particulate matter in the process of glass feeding and batching. At the

beginning of the factory in 2011 the company installed f ilter cartridge dust collectors in all silos broken glass

feeding systems and kiln head feeding ports of the batching workshop to collect the particulate matter generated in

the feeding and batching process. In order to ensure that the discharged particles reach the standard in February

2015 the company collected the exhaust cylinders of all silos into a main pipe and installed a bag filter to carry

out secondary dust removal on the treated residual particles. The dust removal equipment of the company is

operated intermittently. During the gap period the post personnel clean the filter cartridge and filter bag of the

dust removal equipment and carry out regular maintenance to ensure the normal operation of the dust removal

equipment in the operation process.

8. Taizhou Enwang New Energy Technology Co. Ltd.

There are anti-leakage grooves for the process of producing waste acid and the storage position to prevent waste

acid overflow. Changzhou Longshun Environmental Protection Service Co. Ltd is responsible for its waste acid

disposal.

9. Wuhu Tunghsu Optoelectronic Technology Co. Ltd

The company has a flue gas treatment system an industrial wastewater treatment station and a septic tank.In order

to ensure the normal operation of pollution prevention facilities the company has formulated relevant

management systems explicitly requiring the facility usage and operation departments to regularly maintain and

service the facilities. At present the company's pollution prevention and control facilities are operating normally

and stably and the discharge of various pollutants meets the discharge standards.

10. Wuhu Tunghsu Optoelectronic Equipment Technology Co. Ltd

Air pollution prevention and control measures: through strengthening the ventilation and exhaust in the workshop

1. Air pollution prevention and control measures: through strengthening the ventilation and exhaust in the

workshop at the same time through the barrier of the workshop it basically falls inside the workshop; 2.Measures for prevention and control of wastewater pollution: Before domestic wastewater is discharged into the

pipeline of Wuhu Tunghsu Optoelectronic Technology Co. Ltd.. and Wuhu Tunghsu Optoelectronic Technology

Co. Ltd. takes over Chengdong Sewage Treatment Plant and it meets the discharge standard after being treated

by buried sewage treatment facilities; 3. Noise pollution prevention and control measures: low -noise and

high-performance equipment shall be selected and measures such as foundation construction wall barrier and

greening barrier shall be taken for these noise sources; 4. Prevention and control measures for solid waste

pollution: general solid waste is comprehensively utilized waste cutting liquid is entrusted to a qualified unit

(Maanshan Guandong Lubricating Oil Co. Ltd.) for recycling and domestic waste is handed over to the sanitation

department for treatment.

11. Zhengzhou Xufei Optoelectronic Technology Co. ltd

1) Invest 1.094 million yuan to implement ultra-low nitrogen renovation on 3 gas boilers (2 10t/h boilers and 1

6t/h boiler) with nitrogen oxide emission concentration lower than 30mg/m3 which has passed the verification of

Zhengzhou Ecological Environment Bureau.

2) An investment of 790000 yuan has been invested to install an on-line monitoring system for furnace flue gas to

realize the grid connection with Zhengzhou Ecological Environment Bureau.

3) Environmental protection facilities operate continuously and stably throughout the year. There is no unplanned

shutdown. All pollutants are discharged stably up to standard. No environmental violations occur.

4）105500 yuan is invested to install an unorganized emission monitoring system so as to realize grid-connected

operation with Zhengzhou Ecological Environment Bureau.

5）500 yuan is invested to change the transmission of waste water online monitoring data from by telephone card

to by environmental protection dedicated line.

6）17000 yuan is invested to review and assess the emergency plan for environmental emergencies.

7）57000 yuan is invested to carry out cleaning production.

12. Chongqing Jinghuateng Optoelectronic Technology Co. Ltd

Water pollution: the existing 2# biochemical pool of Yingtian ? Liangjiang industrial valley standard plant

building project is used to treat and discharge the municipal sewage pipe network in the park. The domestic

sewage in the plant area is connected to the municipal sewage treatment pipe network and the domestic sewage is

discharged up to the standard.Solid waste: after centralized collection of domestic waste it shall be uniformly treated by the district sanitation

department. It is strictly prohibited to dump and stack waste at will. Domestic waste shall be cleared every day.Solid wastes shall be treated in strict accordance with relevant regulations without causing secondary pollution.

Environmental impact assessment of construction projects and other administrative permission for environmental

protection

1. Shanghai Sunlong Bus Co. Ltd

Shanghai Sunlong Bus Co. Ltd. strictly implements the environmental impact assessment system and Three

Simultaneities system and the construction project is legal and compliant. The project was approved for

completion and acceptance by Shanghai Minhang District Environmental Protection Bureau (MHBGXY [2009]

No. 041) in January 2009.

2. Guangxi Sunlong Automobile Manufacturing Co. Ltd

Nanning Yuanzheng All-aluminum New Energy Automobile Production Base Project was approved by Guangxi

Environmental Protection Bureau on October 22 2015 with the approval document number of GHS [2015]

No.175. The project completed the environmental protection completion acceptance on March 27 2018 with the

completion acceptance document number of GHS [2018] No.45.

3.Chengdu Tunghsu Intelligent Technology Co. Ltd.

Documents such as enterprise investment project filing notice (PF Project No.2011-119) request for instructions

on environmental standards (PH No.2011-88) approval of environmental standards (CHJF No.2011-204) review

opinions on environmental impact report (CHJP 2009-406) etc.

4. Tunghsu (Yingkou) Optoelectronic Display Co. Ltd.

The environmental impact report was approved in February 2012 and the processing environmental protection

acceptance was completed in March 2018. It is qualif ied upon acceptance.

5. Fuzhou Tunghsu Optoelectronic Technology Co. Ltd

The company strictly implements the environmental impact assessment system and "Three Simultaneities" system

and the construction project is legal and compliant. The project was approved by Fuqing Environmental

Protection Bureau in September 2016.

6. Jiangsu Jixing New Material Co. Ltd

Jiangsu Jixing New Material Co. Ltd has obtained the approval of Yangzhong Municipal Environmental

Protection Bureau for the new project of producing 2.6 million large-size Micro-LED sapphire intelligent

production lines annually with the approval document number of YHS [2018] No. 64.

7. Sichuan Xuhong Optoelectronic Technology Co.Ltd

The company's "PDP Glass Substrate Project" and "10 million m2 of High-strength and Ultra-thin Display Cover

Glass Project" compiled environment impact report form and obtained EIA approval. The two projects passed EIA

acceptance in 2015 and 2017 respectively. Our company obtained the new sewage permit in 2017 and 2012. In

2019 it strictly carried out sewage discharge and various environmental management according to the

requirements of the new sewage permit.

8.Taizhou Enwang New Energy Technology Co. Ltd. The company has environmental assessment permission

from Taizhou Environmental Protection Department and the reply is: THSP [2017] No. 20067.

9. Wuhu Tunghsu Optoelectronic Technology Co. Ltd

The company's environmental impact assessment and other environmental protection administrative licenses are

shown in the following table:

Time Environmental impact assessment and other environmental protection administrative permits

November

2011

Anhui Environmental Science Research Institute has compiled and completed the Environmental Impact Report of

Wuhu Tunghsu optoelectronic Technology Co. Ltd. Display Glass Substrate Production Line Project .

December

2011

Anhui Provincial Environmental Protection Department approved the project with EIA Letter [2011] No. 1283 Reply

on Environmental Impact Report of Wuhu Tunghsu Optoelectronic Technology Co. Ltd. Display Glass Substrate

Production Line Project.March 2012 Anhui Environmental Science Research Institute has compiled the Environmental Impact Report of Changes to Flat

Panel Display Glass Substrate Production Line Project of Wuhu Tunghsu optoelectronic Technology Co. Ltd.March 2012 Anhui Environmental Protection Department approved the change of EIA for the project with EIA Letter [2012] No

298 Letter on the Review Opinions of Environmental Impact Report of Wuhu Tunghsu Optoelectronic Technology

Co. Ltd Flat Panel Display Glass Substrate Production Line Project .

April 2014 The Anhui Environmental Protection Department approved the Letter of Anhui Environmental Protection Department

on approving the phased trial production of Wuhu Tunghsu Optoelectronic Technology Co. Ltd Flat Panel Display

Glass Substrate Production Line Project (WHH [2014] No. 472) and approved the phased trial production of the

project.June 2015 Through the 1-4 line G6 liquid crystal (TFT-LCD) glass substrate production line completed environmental

protection stage acceptance.October 2017 Through the 5-8 line G6 liquid crystal (TFT-LCD) glass substrate production line completed environmental

protection stage acceptance.

December

2018

Through the 9-10 line G6 liquid crystal (TFT-LCD) glass substrate production line completed environmental

protection stage acceptance.

10. Wuhu Tunghsu optoelectronic Equipment Technology Co. Ltd

1) Before the construction of the project a third party unit shall be entrusted to prepare the environmental impact

assessment report and file it through Wuhu Environmental Protection Bureau (document No.: HH [2013] No.156).

2) Accepted by Wuhu Environmental Protection Bureau (document No: HY [2016] No.190).

11. Zhengzhou Xufei Optoelectronic Technology co. ltd

EIA for Phase I of the project: on August 16 2009 the Henan Environmental Protection Department passed the

Reply of Henan Environmental Protection Department on the Environmental Impact Report of TFT-LCD Glass

Substrate Production Line of Zhengzhou Xufei Photoelectric Technology Co. Ltd (YHS [2009] No. 295) and on

February 24 2011 the Henan Environmental Protection Department passed the Opinions on Environmental

Protection Acceptance for the completion of TFT-LCD Glass Substrate Production Line Project of Zhengzhou

Xufei Optoelectronic Technology Co. Ltd (YHPY [2011] No. 12).

EIA for Phase II of the roject: On November 2 2010 Henan Environmental Protection Department approved the

Reply of Henan Provinc ial Environmental Protection Department on the Environmental Impact Report of

Zhengzhou Xufei Photoelectric Technology Co. Ltd. on the Project of Annual Output of 2.2 Million sq.m. Liquid

Crystal Glass Substrate Production Line (YHS [2010] No. 251) and on February 28 2014 Henan Environmental

Protection Department approved the Reply of Zhengzhou Xufei Optoelectronic Technology Co. Ltd. on the

Application for Completion of Environmental Protection Acceptance of the Project of Annual Output of 2.2

Million sq.m. Liquid Crystal Glass Substrate Production Line (YHS [2014] No. 77).

12..Chongqing Jinghuateng Optoelectronic Technology Co. Ltd.

Chongqing Jinghuateng：Yu（Liangjiang）HZ{2017}No.240

Emergency response plan of emergency environmental event

1. Shanghai Sunlong Bus Co. Ltd

Shanghai Sunlong Bus Co. Ltd.'s Plan for Environmental Emergencies of Shanghai Sunlong Bus Co. Ltd. has

been filed for environmental protection (Filing No. : 3102212018043) and regular training and drills of the plan

have been organized to effectively improve the enterprises' emergency response and disposal capabilities to

environmental pollution emergencies.

2. Guangxi Sunlong Automobile Manufacturing Co. Ltd

On November 2 2017 the company entrusted Guangxi Gaobiao Monitoring Co. Ltd. to prepare a plan for

environmental emergencies. The report was prepared on January 21 2018 and passed the expert group review. On

May 22 2018 Yongning District Environmental Protection Bureau completed the filing of the plan for

environmental emergencies of Guangxi Sunlong Automobile Manufacturing Co. Ltd. with the filing number of

450109-2018-0002-m.

3. Chengdu Tunghsu Intelligent Technology Co. Ltd

Chengdu Tunghsu Intelligent Technology Co. Ltd. adheres to the principle of "clean production emission up to

standard and total amount control" formulates feasible pollution prevention and control measures establishes and

improves the environmental system formulates environmental management formulation defines the main

responsibilities of the management organization analyzes the environmental risks and collects public

participation opinions which can fully meet the requirements of national and local environmental protection laws

and standards.

4. Tunghsu (Yingkou)Optoelectronic Display Co. Ltd.

The company has a sound environmental emergency plan which mainly includes: environmental pollution

incidents caused by leakage of hazardous waste storage devices leakage of natural gas and diesel oil fire and

explosion accidents in the plant area; Noise ingredient dust outflow of hazardous chemicals environmental

pollution events caused by radiation source leakage and other environmental pollution events caused by force

majeure.

5. Fuzhou Tunghsu Optoelectronic Technology Co. Ltd

The company commissioned a qualified third party to prepare the Plan for Environmental Emergencies of Fuzhou

Tunghsu optoelectronic Technology Co. Ltd. and regularly organize and carry out training and drills of the plan to

effectively improve the enterprises' emergency response capability and disposal capability to environmental

pollution emergencies.

6. Jiangsu Jixing New Material Co. Ltd

Jiangsu Jixing New Material Co. Ltd entrusted a third party to prepare and file the Comprehens ive Plan for

Environmental Emergencies in 2017. The number of the emergency plan is JSJX-YA-2017001 and the version

number of the emergency plan is 2017 (1).

7. Sichuan Xuhong Optoelectronic Technology Co. Ltd.

There are natural gas hydrogen liquefied petroleum gas diesel and other risk substances in the company so in

December 2015 the company organized and formulated the Plan for Environmental Emergencies and submitted it

to Mianyang Environmental Protection Bureau for filing. In 2019 our company will apply to Mianyang

Environmental Protection Bureau to carry out "revision review and filing of the plan for environmental

emergencies" according to relevant management requirements.

8. Wuhu Tunghsu Optoelectronic Technology Co. Ltd

According to the relevant requirements of the Emergency Response Law of the People's Republic of China Wuhu

Tunghsu Optoelectronic Technology Co. Ltd. has compiled the Plan for Environmental Emergencies of Wuhu

Tunghsu Optoelectronic Technology Co. Ltd. in accordance with the Risk Classification Method for

Environmental Emergencies of Enterprises and in combination with the actual situation of Wuhu Tunghsu

Optelectronic Technology Co. Ltd. which describes the emergency rescue principles emergency rescue

procedures and emergency rescue measures for environmental emergencies of the company and is a

programmatic document and operational guideline for guiding the emergency management of environmental

emergencies of the company. The plan was reported to Wuhu Environmental Protection Bureau for filing in

November 2015 (for the record: 340207-2015-016-L). After three years it was reported to Wuhu Environmental

Protection Bureau for filing again in September 2018 as required (for the record: 340207-2018-044-L).

9. Zhengzhou Xufei Optoelectronic Technology co. ltd

The Company's emergency plan for environmental emergencies which passes the expert group review and the

emergency plans for hazardous waste accidents environmental abnormalities in wastewater discharge radiation

sources and exhaust emissions are reviewed.

10.Chongqing Xufuda Optoelectronic Technology Co. Ltd.

The corresponding Emergency Plan Management System has been formulated and all personnel have been

trained and emergency plan team members have been publicized.

11.Chongqing Jinghuateng Optoelectronic Technology Co. Ltd.

The corresponding Emergency Plan Management System has been formulated and all personnel have been

trained and emergency plan team members have been publicized.

Environmental self-monitoring plan

1. Shanghai Sunlong Bus Co. Ltd

Shanghai Sunlong Bus Co. Ltd. strictly abides by national and local laws regulations and relevant provisions

and entrusts ICAS Testing Technology Services (Shanghai) Co. Ltd. to carry out quarterly testing of wastewater

exhaust gas and noise as required. It regularly logs on the environmental protection census platform and the

environmental statistics business system to upload data and information such as testing results.

2. Guangxi Sunlong Automobile Manufacturing Co. Ltd

The preparation of the environmental self-monitoring plan is completed on April 30 2019 and is filed with

Nanning Municipal Bureau of Ecological Environment. Meanwhile relevant monitoring data is filled in on a

monthly basis on the national pollution source monitoring and management sharing platform as required.

3. Chengdu Tunghsu Intelligent Technology Co. Ltd

Since the company does not have an independent sewage treatment station the management committee provides

unified assistance for treatment and since there is no independent monitoring equipment and facilities for waste

gas and noise manual instruments are usually used for monitoring. Since the company does not have the expertise

to monitor exhaust gas and noise the qualif ication testing company (Sichuan Jiuhe Evaluation Company) is

invited to conduct annual workplace hazard factor testing and issue a written testing report which shall be filed

with the system and management committee.

4. Tunghsu (Yingkou) Optoelectronic Display Co. Ltd.

1) The management of solid wastes and hazardous wastes is strengthened relevant management systems are

formulated and ledgers are established the whereabouts of wastes are strictly controlled and wastes are disposed

according to national standards.

2) The wastewater station is equipped with wastewater online monitoring and dosing equipment to monitor the pH

value of wastewater in real time; In the morning and evening the pH value of wastewater from the total sewage

outlet is monitored manually to ensure that the wastewater discharge reaches the standard.

5. Fuzhou Tunghsu Optoelectronic Technology Co. Ltd

The company strictly abides by national and local laws regulations and relevant provisions and entrusts Fujian

Tuopu Detection Technology Co. Ltd. to carry out monthly detection of the company's wastewater quarterly

detection of the company's noise and timely log on to its own monitoring website every month to upload data and

information such as detection results.

6. Jiangsu Jixing New Material Co. Ltd

Hardware facilities: In addition to the PH real-time monitoring equipment installed in the sewage treatment station

of Jiangsu Jixing New Material Co. Ltd 2 sets of PH real-time monitoring equipment 1 set of COD on-line

monitoring equipment 1 set of PLC system that stops discharging when exceeding the standard and 1 set of

real-time data transmission system for sewage treatment are also installed on the sewage discharge pipeline.Software facilities : Jiangsu Jixing New Material Co. Ltd entrusts a third party to regularly monitor the treatment

of wastewater and exhaust gas and entrusts a real-time monitoring equipment maintenance unit to regularly

maintain and check environmental protection equipment.

7. Sichuan Xuhong Optoelectronic Technical Co.Ltd

According to the national environmental protection management requirements the company has prepared a

self-monitoring plan for the environment. The company has installed a flue gas on-line analyzer to carry out

on-line monitoring of the major pollutants nitrogen oxides sulfur dioxide and particulate matter in furnace flue

gas and upload the monitoring data to the national environmental protection platform in real time. For the smoke

blackness hydrogen chloride fluoride and ingredient particles that cannot be monitored online a third party

organization is entrusted to carry out manual monitoring every quarter. For the particulate matter and ammonia

emitted by the factory without organization a third party organization is entrusted to carry out manual monitoring

every six months. All monitoring data are uploaded to the monitoring iInformation disclosure platform of national

key monitoring enterprise pollution source.

8. Wuhu Tunghsu Optoelectronic Technology Co. Ltd

The company has 1 set of waste water on-line monitoring system and 1 set of flue gas on-line monitoring system

for plant 101 and 202 respectively. The monitoring data are uploaded to the municipal environmental monitoring

platform in real time. In addition the company entrusts a qualif ied third-party environmental monitoring agency

to carry out quarterly and annual monitoring of the company's plant environment every year and requires the

monitoring agency to provide monitoring reports. Monitoring items include: monitoring of domestic sewage

production wastewater unorganized waste gas organized waste gas and noise. The company judges whether

relevant environmental indicators meet relevant environmental protection requirements according to monitoring

results. So far the company's emissions of various pollutants have not exceeded the standard.

9. Wuhu Tunghsu Optoelectronic Equipment Technology Co. Ltd

As Wuhu Tunghsu Optoelectronic Equipment Technology Co. Ltd. and Wuhu Tunghsu Optoelectronic

Technology Co. Ltd. are located in a park and the rain and sewage pipelines in the park are managed by Wuhu

Tunghsu Optoelectronic Technology Co. Ltd. with the environmental self-detection scheme adopted. The

company will regularly carry out noise detection and wastewater detection and Wuhu Tunghsu Optoelectronic

Technology Co. Ltd. will supervise the company.

10. Zhengzhou Xufei Optoelectronic Technology co. ltd

The company has an on-line waste gas monitoring system which tests waste gas manually once a month and is

outsourced for test once a year; There is an online monitoring system for wastewater which tests the wastewater

manually once a day and is outsourced for test once a year.

11.Chongqing Jinghuateng Optoelectronic Technology Co. Ltd.

1) Strengthen the management of "Three Simultaneities" of the project to ensure the construction of

environmental protection facilities.

2) Regularly maintain and service mechanical equipment to prevent environmental pollution caused by equipment

failure.

3) Strengthen the operation and management of various pollutant treatment facilities to ensure that pollutants meet

the standards for discharge.

4) Carry out domestic sewage discharge inspection every year and arrange a third party to carry out noise and

workshop environment inspection.Other environmental information to be disclosed

1. Shanghai Sunlong Bus Co. Ltd

The company's unit name unified social credit code legal representative production address main contents of

production and operation products and scale dosage of raw and auxiliary materials and other basic information

the construction and operation of public pollution prevention facilities the names of major pollutants and

characteristic pollutants their emission methods number and distribution of emission ports emission

concentration and environmental protection data pollution such as pollutant emission standards implemented are

released on the environmental information disclosure platform of enterprises and institutions.

2.Guangxi Sunlong Automobile Manufacturing Co. Ltd

On May 16 2019 the company completed the application for the pollution discharge permit and prepared

quarterly and annual pollution discharge permit implementation report according to the requirements of the

pollution discharge permit.

3. Chengdu Tunghsu Intelligent Technology Co. Ltd

In February 2019 Chengdu Tunghsu Intelligent Technology Co. Ltd has carried out a hazard factor test in the

workplace and issued a written test report. The test contents include noise benzene toluene xylene dust tin and

their compounds.

4. Fuzhou Tunghsu Optoelectronic Technology Co. Ltd

1) The environmental self-monitoring information disclosure website of Fuzhou Tunghsu Optoelectronicc

Technology Co. Ltd.:

http://wryfb.fjemc.org.cn/page0.aspx?id=CLDICBRK-37EH-9PYO-8M63-F288U13S89W8

2) The environmental protection acceptance information public website of Fuzhou Tunghsu Optoelectronicc

Technology Co. Ltd.: http://114.251.10.205/#/pub-message

5. Jiangsu Jixing New Material Co. Ltd

Website of EIA report form full publication for sapphire intelligent production line:http://www.212200.com.Pollution discharge permit of Jiangsu Jixing new material Co.Ltd.：3211822016000043A，Validity：From August

1 2019 to July 31 2020.

6. Sichuan Xuhong Optoelectronic Technology Co.Ltd

The company publicized the acquisition of the company's environmental protection administrative licensing

procedures pollution discharge information solid waste management environmental risks and monitoring

information on the environmental credit evaluation website.

7. Wuhu Tunghsu Optoelectronic Technology Co. Ltd.

1) The company's construction of EIA and acceptance are publicized in the EIA information platform of

construction project (http://114.251.10.205/#/pub-message).

2) Use Wechat Public Account to publicize relevant environmental protection information of the company.

8. Zhengzhou Xufei Optoelectronic Technology Co. ltd

Environmental protection credit information management system for enterprises and institutions in Henan

province environmental information disclosure system in Henan province Air pollution source information

filling system and provincial pollution source self-monitoring system

Other information related to environmental protection

Hazardous Waste Pollutants from Shanghai Sunlong Bus Co. Ltd.Name of the

Company

or its

subsidiary

Names of major and

characteristic pollutants

Disposal

mode

Storage

place

Production

distribution

Executive

Standards

Output

in 2018

(tons)

Disposal

Rate

(ton)

Inventory

(ton)

Shanghai

Sunlong

Bus Co.

Ltd

Waste residue

900-252-12

Entrust a

qualif ied

third party

for disposal

Dangerous

waste

temporary

storage

Painting

workshop

assembly shop

commissioning

workshop

/ 8.46 14.74 8.72

Waste thinner

900-252-12

2.55 3.25 2.04

Waste adhesive sealant

900-014-13

6.34 9.36 1.83

Waste empty barrel

900-041-49

10.09 11.27 0.71

Waste rag 900-041-49 0 0 1.3

Used mineral oil

900-218-08

0 0 0.4

Waste activated carbon

900-041-49

15.12 0 20.67

Waste filter

900-041-49

0.27 0 2.52

2.Overview of the annual targeted poverty alleviation

(1) Precision poverty alleviation planning

（2）Half-year poverty relieving summary

1. On January 24 2019 Shanghai Sunlong Bus Co. Ltd. a wholly-owned subsidiary of the company donated a

bus worth 303000 yuan to Shanghai Private Wenqi Middle School in order to help the future development of

education and in response to the "Promoting Education by All Industries" campaign launched by the Overseas

Chinese Affairs Office of Minhang District Shanghai. To provide transportation for teachers and students of

Wenqi Middle School to participate in social practice activities and to facilitate travel to offer love and practical

assistance for educational development with practical actions.

2. On February 21 2019 the company's controlling subsidiary Huzhou Mingshuo Technology actively responded

to the charity donation and assistance activities of the Nanxun District Committee of Huzhou City on the "Three

Years for Low-income People to Be Well-off" donating a special fund of 50000 yuan to help needy people so that

all the people in the district can share the fruits of reform and development.

3. In the first half of 2019 the company's controlling subsidiaries Hunan Tunghsu Weigao Medical Device

Technology Co. Ltd. and Suzhou Tengda Optical Technology Co. Ltd. responded positively to the call of the

state and actively participated in charitable fund-raising activities such as "poverty eradication for a better future"

donating 10000 yuan and 5000 yuan respectively to help the poor.XVI.Other material events

□Applicable √ Not applicable

No such cases in the reporting period.XVII. Material events of subsidiaries

□ Applicable √ Not applicable

VI. Change of share capital and shareholding of Principal Shareholders

I.Changes in share capital

1. Changes in share capital

In shares

Before the change Increase/decrease（+，-） After the Change

Amount Proporti

on Share

allotmen

t

Bonus

shares

Capitalizat

ion of

common

reserve

fund

Other

Subtot

al

Quantity

Proportio

n

1.Shares with conditional

subscription

616094803 10.75% 616094803 10.75%

3.Other domestic shares 616094803 10.75% 616094803 10.75%

Incl：Domestic legal

person shares

614834053 10.73% 614834053 10.73%

Domestic Natural Person

shares

1260750 0.02% 1260750 0.02%

II.Shares with

unconditional subscription

5114155315 89.25% 5114155315 89.25%

1.Common shares in RMB 4864155314 84.89% 4864155314 84.89%

2.Foreign shares in

domestic market

250000001 4.36% 250000001 4.36%

III. Total of capital shares 5730250118 100.00% 5730250118 100.00%

Reasons for share changed

□Applicable √Not applicable

Approval of Change of Shares

□Applicable √Not applicable

Ownership transfer of share changes

□Applicable √Not applicable

Progress on any share repurchase:

□ Applicable √ Not applicable

Progress on reducing the repurchased shares by means of centralized bidding:

□ Applicable √ Not applicable

Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to

common shareholders of Company in latest year and period

□ Applicable √ Not applicable

Other information necessary to disclose for the company or need to disclosed under requirement from security

regulators

□ Applicable √Not applicable

2. Change of shares with limited sales condition

□ Applicable √ Not applicable

II. Issuing and listing

□ Applicable √ Not applicable

III. Shareholders and shareholding

In Shares

Total number of common

shareholders at the end of the

371574(includ ing 354540

shareholdders hoding A shares and

Total number of preferred

shareholders that had restored the

0

reporting period 17034 shareholders holding B

shares)

voting right at the end of the

reporting period (if any) (note 8)

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

Amount of

un-restricted

shares held

Number of share

pledged/frozen

State of

share

Amount

Tunghsu Group

Domestic Non

-State-owned legal

person

15.97% 915064091 352006791 563057300 Pledge 775563042

Shijiazhuang

Baoshi

Electronic

Group Co. Ltd.

Domestic Non

-State-owned legal

person

5.80% 332382171 332382171

Shanghai

Huimao

Enterprise

Management

Co. Ltd.

Domestic Non

-State-owned legal

person

4.58% 262626262 262626262 0 Pledge 80240722

Minsheng

Royal Fund

Management

Co. Ltd－-Ping

An Bank-Daye

Trust·Zengli 2

single Fund

Trust

Other 1.63% 93363625

-3828599

93363625

Tunghsu

Optoelectronic

Technology

Co. Ltd.－The

first ESOP

Other 1.27% 72639296 72639296

Beixin Ruifeng

Fund－China

Merchants Bank

－Daye Trust－

Daye

Trust·Profit

increase 3

single fund plan

Other 1.08% 62095032 62095032

Shenzhen

Taianer

Information

Technology

Co. Ltd.

Domestic Non

-State-owned legal

person

1.07% 61165682 61165682 Pledge 55265682

Zhonghai Trust

Co. Ltd. －

Zhonghai Trust

－ Tunghsu

Optoelectronic

ESOP pooled

Fund trust

Other 0.92% 52555280 52555280

Kunshan

Development

Zone

State-owned

Investment

Holding Co.Ltd.State-owned legal

person

0.73% 41838269

-2150000

41838269

Yang Haihui

Domestic natural

person

0.55% 31767200 31767200

Strategy investors or general legal

person becomes top 10 shareholders

due to rights issued (if applicable)（See Notes 3）

Among the top 10 shareholders Kunshan Development Zone State-owned Investment

Holding Co. Ltd. and Tunghsu Optoelectronic Technology Co. Ltd.－The first ESOP

became the top 10 shareholders of the company by participating in the subscription of the

company's non-public share issuance in 2015-and the sale-restricted period for those shares

held is 36 months that is from December 162015 to December 17 2018. Among the top 10

shareholders Shenzhen Taianer Information Technology Co. Ltd. became the top 10

shareholders of the company by participating in the subscription of the company's non-public

share issuance in 2016-and the sale-restricted period for those shares held is 12 months that

is from August 262016 to August 25 2017. Among the top 10 shareholders Shanghai

Huimao Enterprise Management Co. Ltd Minsheng Jiayin Fund-Ping An Bank-Daye

Trust-Daye Trust Zengli No.2 Single Fund Trust and Beixin Ruifeng Fund-China Merchants

Bank-Daye Trust-Daye Trust Zengli No.3 Single Fund Plan became the top 10 shareholders of

the company by participating in the subscription of shares of the company's 2017 Non-public

Share Issuance and Paying Cash to Purchase Assets and Raising Matching Funds and The

Related Transaction with that: the shares held by Shanghai Huihao Enterprise Management

Co. Ltd has a sale-restricted period of 36 months namely from November 30 2017 -

November 29 2020; and the shares held by Minsheng Jiayin Fund-Ping An Bank-Daye

Trust-Daye Trust Zengli No.2 Single Fund Trust and Beixin Ruifeng Fund-China Merchants

Bank-Daye Trust-Daye Trust Zengli No.3 Single Fund Plan have a sale-restricted period of 12

months namely from December 29 2017 to December 28 2018.

Explanation on shareholders

participating in the margin trading

business

Among the top ten shareholders Tunghsu Group Baoshi Group and Yang Haihui have

relationship and constitute persons taking concerted action. The company does not know

whether there is relationship between other 7 shareholders or whether they are persons taking

concerted action defined in Administrative Measures Relating to Acquisitions of Listed

Companies.

Shareholding of top 10 shareholders of unrestricted shares

Name of the shareholder

Quantity of unrestricted shares held at the end of the

reporting period

Share type

Share type Quantity

Tunghsu Group 563057300

RMB Common

shares

563057300

Shijiazhuang Baoshi Electronic

Group Co. Ltd.

332382171

RMB Common

shares

332382171

Minsheng Royal Fund Management

Co. Ltd－-Ping An Bank-Daye

Trust·Zengli 2 single Fund Trust

93363625

RMB Common

shares

93363625

Tunghsu Optoelectronic Technology

Co. Ltd.－The first ESOP

72639296

RMB Common

shares

72639296

Beixin Ruifeng Fund－China

Merchants Bank－Daye Trust－

Daye Trust·Profit increase 3 single

fund plan

62095032

RMB Common

shares

62095032

Shenzhen Taianer Information

Technology Co. Ltd.

61165682

RMB Common

shares

61165682

Zhonghai Trust Co. Ltd. －

Zhonghai Trust － Tunghsu

Optoelectronic ESOP pooled Fund

trust

52555280

RMB Common

shares

52555280

Kunshan Development Zone

State-owned Investment Holding

Co. Ltd.

41838269

RMB Common

shares

41838269

Yang Haihui 31767200

RMB Common

shares

31767200

Hong Kong Securities Clearing Co.Ltd

30984310

RMB Common

shares

30984310

Explanation on associated

relationship or consistent action

among the top 10 shareholders of

non-restricted negotiable shares and

that between the top 10 shareholders

of non-restricted negotiable shares

and top 10 shareholders

Among the top 10 shareholders of unrestricted tradable shares and the top 10 shareholders of

common shares Tunghsu Group Co. Ltd. has a concerted action relationship with

Shijiazhuang Baoshi Electric Group Co. Ltd. and Yang Haihui.Notes to the shareholders involved

in financing securities (if any)(See

Notes 4)

Not applicable

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.IV. Change of the controlling shareholder or the actual controller

Change of the controlling shareholder in the reporting period

□ Applicable √ Not Applicable

There was no any change of the controlling shareholder of the Company in the reporting period.

Change of the actual controller in the reporting period

□ Applicable √ Not applicable

There was no any change of the actual controller of the Company in the reporting period.VII. Situation of the Preferred Shares

□Applicable √Not applicable

The Company had no preferred shares in the reporting period

VIII. Information about Directors Supervisors and Senior Executives

I. Change in shares held by directors supervisors and senior executives

□Applicable √Not applicable

There was no change in shareholding of directors supervisors and senior management staffs for the specific

information please refer to the 2018 Annual Report.II. Changes in directors supervisors and senior management staffs

□Applicable √Not applicable

No changes happened to any of the directors supervisors or executives in the report period. For details please

refer to the Annual Report 2018.IX. Corporate Bond

Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange and

not yet due or due but not folly cashed on the approval date of annual report

Yes

1. Basic information of the corporate bonds

Bond Name

Abbreviated

Bond Name

Code Issue Date Date Due

Bond

Balance(RMB’

0000)

Interest Rate

Method of

repayment of

the principal

and interest

payment

2015-

corporate bond

of Tunghsu

Optoelectronic

Technology

Co. Ltd

15 Tunghsu

bonds

112243 May 192015 May 192020 95355.8 6.80%

Interest paid

every year the

principal will

be repaid with

the last unpaid

interest in one

time as the

bond due

Listed place or Transaction

place for the corporate bonds

Shenzhen Stock Exchange

Arrangement of investor’s

eligibility

Investor’s put table right

Information about interest paid

and bonds honored during the

reporting period

The fourth period bond interest 65010903.60 was paid in full amount on schedule in the current

period.Implementation of relevant

special clauses(if applicable)

such as option clause for the

bond issuer or investors and

exchangeable clause

Not applicable

II. Information about the bond trustee and credit rating agency

Bond trustee:

Name

Guangzhou

Securities Co.Ltd.

Business

Address

1920/F Main

Tower

Guangzhou

International

Finance Center

No.5 Zhujiang

West Road

Tianhe District

Guangzhou

City

Contacts

Shi Jianhua

Yan Xiangjun

Tel 020-88836999

The credit rating agency who follow up and rate the corporate bonds in the reporting period:

Name United Rating Co.Ltd

Business

Address

Room 508 Ailiyuan Apartment No.38 Water

Park North Road Nankai District Tianjin City

During the report period the bond trustee

credit rating agency employed by the

company that have changed reasons for

the change performing procedures

relevant influence on investors etc ( if

applicable)

Not applicable

III. Information about the use of the funds raised by issuing corporate bonds

The information of the use of the funds

raised by issuing corporate bonds and

related implementation procedure

Using the funds raised by issuing corporate bonds strictly conforming to the purpose

stipulated by Rules of Management and Use of the Raised Funds and the Prospectus

and implemented the corresponding approval procedures

Ending balance of the year(RMB10000) 0

Operation status of the special account for

the raised funds

Normal

Whether the use of the raised funds

conforming to the purpose use plan and

other provisions specified in the

Prospectus

The use of the raised funds conformed to the purpose promised in the Prospectus

IV. Information about the rating of the corporate bonds

On June 21 2019 United Ratings Co. Ltd. issued trace rating report LHPZ [2019] No.1273 based on the

company’s 2018. 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-term

credit rating AA+，and its outlook is "Steady". The credit rating of "15 Tunghsu Bonds" issued by TunghsuOptooelectric Technology Co. Ltd. is AA+. (For details please refer to the "Tracking Rating Announcement" of

the company disclosed on www.cninfo.com on June 25 2019)

V. The corporate bond’s credit mechanism repayment plan and other safeguard measures for repayment

Repayment Plan

I. Payment of the interest

1. The interest of the bonds shall be paid each year and the last payment of interest shall be paid with the principal.

Every payment of interest shall not be charged on interest after the interest paying day and the principal shall not

be charged on interest after the bond’s date due. The interest payment day of this corporate bond is May 19 of

each year from 2016 to 2020(If it is not a working day the payment day will be postponed to the first working day

after the day).If the investors exercise the puttable right at the end of the third year in the duration of the bond the

interest payment day of the bonds sold back is May 19 of each year from 2016 to 2018.

2. The payment of the interest of the bonds shall be handled through the bond registration institution and other

related institutions. The concrete information of the interest payment will be specified in the Interest Payment

Announcement issued on the media designated by CSRC with in accordance with the relevant state regulations.

3. According to relevant national tax laws and regulations the investor of the corporate bond shall fully bear the

relevant tax should be paid.II. The repayment of the principal

1. The principal will be fully repaid in a time and its repaying day is May 19 2020. If the investors exercise the

puttable right at the end of the third year in the duration of the bond the repaying day of the principal of the bonds

being sold back is May 19 2018. (If the repaying day aforesaid is not a working day the repaying day shall be

postponed to the first working day after the original day and there is no need to pay interest in the deferred

period)

2. The repayment of the principal of the bonds will be handled through the bond registration institution and other

related institutions. The concrete information of repayment of the principal of the bonds will be specified in the

Principal Repayment Announcement issued on the media designated by CSRC with in accordance with the

relevant state regulations.Safeguard measures for the repayment

I. A designated special department in charge of the repayment working

The company designated its finance department to take the lead in the coordination work for repayment of the

bonds and the finance department shall coordinate other relevant departments to schedule the demanded funds for

the repayment of the bonds in every year’s financial budget for ensuring the repayment of the interest and

principal of the bonds is timely guaranteeing the bond-holder’s interest. The company will set up a working team

for repayment 15days before the day that is the interest paying day or principal repaying day of the bonds with

the personnel of the finance department being included to specially in charge of the work of paying the interest of

the bonds and the repayment of the principal.II. Establishing Meeting Rules for Bond-holders

According to the provisions specified in the Pilot Approach the company with bond trustee has established the

Meeting Rules for Bond-holders for the corporate bonds. The Meeting Rules for Bond-holders specified the scope

procedures and other important items for the bond-holders to exercise rights through the Meeting of the

Bond-holders which provided a reasonable institutional arrangement for the timely and full payment to the

interest and the principal of the corporate bonds.III. Making the full use of the bond trustee

According to the requirements specified in the Pilot Approach the company has adopted the institution of bond

trustee engaged Guangzhou Securities Co.Ltd as the trustee of the bonds this time and signed the Agreement of

Bond Entrusted Management with Guangzhou Securities. The Bond Trustee shall represent all the bond-holders to

supervise the relevant information about the company and take all necessary measures to protect the legitimate

interest of the bond-holders when the interest or principal of the bonds cannot be repaid in time. The company

shall strictly conform to the provisions specified in the Agreement of Bond Entrusted Management being

cooperative when the bond trustee performance its duties and regularly submit the report of commitment

fulfillment status to the bond trustee. When there is a possible bond default the company shall notice the bond

trustee in time thus the bond trustee can take other necessary measures in time according to the Bond Entrusted

Management.Ⅳ. Strictly fulfilling the obligation of information disclosure

The company shall adhere to the information disclosure principles of authentic accurate and completed making

the information of the company’s repaying ability and use of the raised funds to be supervised by the bond trustee

and shareholders for preventing the risk of repayment. According to the Agreement of Bond Entrusted

Management and relevant regulations the company shall release the information of major issues which include

but not limited to the following contents: (1) According to the Prospectus and agreement with the registered

trustee institution the company shall transfer the maturity interest payment or principal to the account designated

by the registered trustee institution; (2) By estimate or in fact the company cannot fully repay the interest or

principal of the bonds in time according to the provisions stipulated in the Prospectus; (3) Singing the guarantee

contract for external or other major contracts may have signif icant adverse effects of repaying the interest and

principal of the bonds; (4) A severe loss occurred or expected to occur and the loss exceeds 10% of the net asset

audited in the last accounting year; (5) Occurrence of capital reduction merger division dissolution file for

bankruptcy entering into bankruptcy procedure or other main changes of the company; (6) Occurrence of the

amount of subject in the major arbitration or lawsuit exceeding 10% of the net asset audited in the last accounting

year; (7) Planning to dispose the asset or debt with subject amount exceeding 10% of the net asset audited in the

last accounting year; (8) Planning to change the bond trustee; (9) Failing to perform or Planning to change the

stipulations specified in the Prospectus; (10) Alteration of the designated person for specially in charge of the

relevant matters of the corporate bonds; (11) Occurrence of suspending the bond transaction; (12) Others may

signif icantly impact the repaying of the interest and principal or circumstanc es specified by laws administrative

regulations and stipulations by the CSRC or exchange.Ⅴ. Setting up the capital management plan and strictly implementing the plan

After the issuance of the bonds the company shall further reinforce the company’s assets and liabilities

management liquidity management use management of the raised funds funds management and so forth

according to the company’s debt structure. Also the company will set up monthly and yearly funds use plan based

on the maturity of repaying the interest and principal ensuring on-schedule timely and full-amount preparing of

the funds for repaying every year’s interest or principal of the bonds to adequately protect the investor’s interest.VI. Commitments

According to the resolutions of the issuance of the bonds approved on the board meeting on Oct 21 2014 and the

general meeting of shareholders on Nov 6 2014 when the company cannot repay the interest or principal of the

bonds in time or fully repay the interest or principal of the bonds the company shall take the following resolutions

and make corresponding measures: (1) None profit distribution to shareholders; (2) Postponing capital

expenditure items such as major investment merger and acquisition; (3) Reducing or stopping the salaries and

bonuses of the directors and senior management personnel; (4) No transferring of principal responsible personnel

and so on.VI. Information about the bond-holder meeting during the reporting period

There was no bond-holder meeting convened in the reporting period.VII. Information about the obligations fulfilled by the bond trustee in the reporting period

The bond trustee has been continuously following up the company’s credit status 2018 Entrusted Management

Report of 2015 Corporate Bonds of Tunghsu Optoelectronic on May 22 2019.VIII. The key accounting data and financial indicators of the latest two years to the end of the reporting period

Ten Thousands yuan

Items

As at the end of the reporting

period

As at the end of last year YoY+/-（%）he same period

Current ratio 168.15% 167.08% 1.07%

Debt ratio 52.41% 53.95% -1.54%

Quick ratio 126.72% 131.58% -4.86%

Reporting period The same period of last year At the same time rate of change

EBITDA interest coverage ratio 3.51 3.44 2.03%

Loans repayment rate 100.00% 100.00% 0.00%

Interest payment rate 100.00% 100.00% 0.00%

The material reasons for the changed ratio of the accounting data or financial indicators exceeds 30% over the last

year

□ Applicable √ Not applicable

IX. The company fails to repay the debt

□ Applicable √ Not applicable

No such cases in the reporting period.X. Information about the repayment of interest and principal for other bonds or debt financing instruments

1. Bonds issuing interest payment and cashing within the report period

The company 8th Board of Directors approved the application to National Association of Financial Market

Institutional Investors (NAFMII) for registration and issuance of less than 4.7 billion medium term note on

September 8 2016. The extraordinary general shareholders’ meeting was convoked on September 26 2016 and

approved the program concerning the proposed registration and issuance of the medium term note. The medium

term note in 2016 was 4.7 billion in two periods including the first period with two types of (3+2 years) and 5 years

totaling up to 3 billion and the second period with two types of (3+2 years) and 5 years totaling up to 1.7 billion

which would both adopt the interest payment per year principal repayment upon expiration and the interest payment

together with the principal cashing for the last period. The interest payment period has not expires within the report

period .

2. Unmatured bonds issuing interest payment and cashing in previous years

As approved by China Securities Regulatory Commission file of ZJXK[2015] No. 635 the company issued

toward the public 1 billion bones on May 19 2015. and the fourth period bond interest 65010903.6 was paid in full

amount on schedule in the reporting period.XI.Information about the bank credit obtaining and use as well as repayment of the bank loans during the

reporting period

The balance of the total amount of the short-term and long-term loans is RMB12395625800.00 increased

RMB1292929548.67 compared with the end of year 2018 which mainly because of the need of the production and

operation and the construction of projects. The company strictly conformed to requests of bank loans to use the

funds and fully repaid the interest and principal to the bank in time.XII. Information about fulfillment of the stipulations or commitments specified in the Prospectus of the issuance

of the bonds during the reporting period

During the reporting period there is no use of corporate bonds to raise funds and the company has strictly

fulfilled its commitment that the bond raised funds will not be directly or indirectly invested in the real estate

development business and will not be used to increase the capital of subsidiaries engaged in the real estate

business or lend money to them.XIII.Major events occurred during the reporting period

Nil

XIV. Whether the corporate bonds have a guarantor

□ Yes √No

X. Financial Report

I. Audit report

Has this semi-annual report been audited?

□ Yes √ No

The semi-annual financial report has not been audited.II. Financial statements

Currency unit for the statements in the notes to these financial statements :RMB

1.Consolidated Balance sheet

Prepared by: Tunghsu Optoelectronic Technology Co. Ltd.June 302019

In RMB

Items June 302019 December 312018

Current asset：

Cash and bank balances 19608160332.91 19807094397.16

Settlement provision

Outgoing call loan

Transactional financial assets 3000000.00

Financial assets measured at fair

value with variations accounted into

current income account

Derivative financial assets

Notes receivable 61194310.70 499781503.17

Account receivable 11948970007.58 14352781895.39

Financing of receivables

Prepayments 5058031101.05 5215414219.51

Insurance receivable

Reinsurance receivable

Provisions of Reinsurance contracts

receivable

Other account receivable 1180820462.92 1125991020.55

Including：Interest receivable 97484985.07 56811961.67

Dividend receivable

Repurchasing of financial assets

Inventories 4754313963.62 3510786666.85

Contract assets

Assets held for sales 119355435.58 119355435.58

Non-current asset due within 1 year

Other current asset 792954051.81 809360778.49

Total of current assets 43526799666.17 45440565916.70

Non-current assets：

Loans and payment on other’s behalf

disbursed

Debt investment

Available for sale of financial assets 243158605.30

Other investment on bonds

Expired investment in possess

Long-term receivable 580792364.92 344430815.68

Long term share equity investment 2191785865.01 2174347969.22

Other equity instruments investment

Other non-current financial assets 548158605.30

Property investment 711680374.74 686993881.02

Fixed assets 9043235757.53 9634463323.77

Construction in progress 5511187961.75 5013941980.61

Production physical assets

Oil & gas assets

Use right assets

Intangible assets 1114095291.45 1146949745.14

Development expenses 50589620.23 37122235.94

Goodwill 2702403019.28 2835672586.90

Long-germ expenses to be amortized 24320539.97 21884204.82

Deferred income tax asset 572545713.26 533094627.68

Other non-current asset 4800933217.60 4463496966.82

Total of non-current assets 27851728331.04 27135556942.90

Total of assets 71378527997.21 72576122859.60

Current liabilities

Short-term loans 9194934400.00 8361106651.33

Loan from Central Bank

Borrowing funds

Transactional financial liabilities

Financial liabilities measured at fair

value with variations accounted into

current income account

Derivative financial liabilities

Notes payable 1545392945.94 1643167026.68

Account payable 6458794541.00 8632927106.20

Advance receipts 1834097832.98 1402283662.37

Selling of repurchased financial assets

Deposit taking and interbank

deposit

Entrusted trading of securities

Entrusted selling of securities

Employees’ wage payable 154026466.39 238146977.17

Tax payable 611921439.66 817173127.12

Other account payable 2492921065.31 2089603676.60

Including：Interest payable 202034241.49 117554951.58

Dividend payable 401117508.26

Fees and commissions payable

Reinsurance fee payable

Contract Liabilities

Liabilities held for sales

Non-current liability due within 1

year

3290141668.70 3697392864.91

Other current liability 303821093.64 315193128.73

Total of current liability 25886051453.62 27196994221.11

Non-current liabilities：

Reserve fund for insurance

contracts

Long-term loan 3200691400.00 2741589600.00

Bond payable 5282105325.64 5630818825.32

Including：preferred stock

Sustainable debt

Lease liability

Long-term payable 1703412663.14 2644309592.95

Long-term remuneration payable to

staff

Expected liabilities 92169224.93 99765750.04

Deferred income 683720240.53 676146399.31

Deferred income tax liability 50271341.82 55192983.97

Other non-current liabilities 508000000.00 108000000.00

Total non-current liabilities 11520370196.06 11955823151.59

Total of liability 37406421649.68 39152817372.70

Owners’ equity

Share capital 5730250118.00 5730250118.00

Other equity instruments

Including：preferred stock

Sustainable debt

Capital reserves 21816238799.56 21786233393.78

Less：Shares in stock 4422320.00 4422320.00

Other comprehensive income -29175.80 -29175.80

Special reserve 12877156.81 12614331.35

Surplus reserves 245507019.95 245507019.95

Common risk provision

Retained profit 5194036219.58 4750977557.86

Total of owner’s equity belong to the

parent company

32994457818.10 32521130925.14

Minority shareholders’ equity 977648529.43 902174561.76

Total of owners’ equity 33972106347.53 33423305486.90

Total of liabilities and owners’ equity 71378527997.21 72576122859.60

Legal representative ：Wang Lipeng

Person-in-charge of the accounting work：Feng Qiuju

Person-in -charge of the accounting organ：Wang Cang

2. Balance sheet of the Parent Company

In RMB

Items June 302019 December 31 2018

Current asset：

Cash and bank balances 6365489664.34 9732302654.23

Transactional financial assets

Financial assets measured at fair

value with variations accounted into

current income account

Derivative financial assets

Notes receivable 50000.00

Account receivable 159080478.35 176563926.23

Financing of receivables

Prepayments 102252178.91 2008364.11

Other account receivable 8980213046.51 6281675319.27

Including：Interest receivable 27122805.61 7521489.86

Dividend receivable 500000000.00 500000000.00

Inventories 181088528.76 269759580.95

Contract assets

Assets held for sales

Non-current asset due within 1

year

Other current asset 148973.38 148973.38

Total of current assets 15788272870.25 16462508818.17

Non-current assets：

Debt investment

Available for sale of financial assets 129500056.00

Other investment on bonds

Expired investment in possess

Long-term receivable

Long term share equity investment 28666925896.68 26504735200.89

Other equity instruments investment

Other non-current financial assets 429500056.00

Property investment

Fixed assets 153180310.07 160867244.63

Construction in progress

Production physical assets

Oil & gas assets

Use right assets

Intangible assets 9165533.60 9339387.26

Development expenses

Goodwill

Long-germ expenses to be amortized

Deferred income tax asset 143264158.31 119964967.85

Other non-current asset

Total of non-current assets 29402035954.66 26924406856.63

Total of assets 45190308824.91 43386915674.80

Current liabilities

Short-term loans 5269000000.00 4278000000.00

Transactional financial liabilities

Financial liabilities measured at fair

value with variations accounted into

current income account

Derivative financial liabilities

Notes payable

Account payable 7284844.84 11500796.58

Advance receipts 1580498.78 1991498.78

Contract Liabilities

Employees’ wage payable 4481839.86 4484401.86

Tax payable 10425916.65 17959833.09

Other account payable 5411174537.35 3656725253.66

Including：Interest payable 170142763.88 97197464.99

Dividend payable 401117508.26

Liabilities held for sales

Non-current liability due within 1

year

1568557987.37 1533383333.28

Other current liability

Total of current liability 12272505624.85 9504045117.25

Non-current liabilities：

Long-term loan 496000000.00

Bond payable 4682105325.64 5630818825.32

Including：preferred stock

Sustainable debt

Lease liability

Long-term payable

Long-term remuneration payable to

staff

Expected liabilities

Deferred income

Deferred income tax liability

Other non-current liabilities

Total non-current liabilities 5178105325.64 5630818825.32

Total of liability 17450610950.49 15134863942.57

Owners’ equity

Share capital 5730250118.00 5730250118.00

Other equity instruments

Including：preferred stock

Sustainable debt

Capital reserves 21832453907.50 21832453907.50

Less：Shares in stock 4422320.00 4422320.00

Other comprehensive income

Special reserve

Surplus reserves 226517795.62 226517795.62

Retained profit -45101626.70 467252231.11

Total of owners’ equity 27739697874.42 28252051732.23

Total of liabilities and owners’ equity 45190308824.91 43386915674.80

3.Consolidated Income Statement

In RMB

Item Semi-annual of 2019 Semi-annual of 2018

I. Income from the key business 8475089222.93 11129851790.88

Incl：Business income 8475089222.93 11129851790.88

Interest income

Insurance fee earned

Fee and commission received

II. Total business cost 7645968690.88 10087183529.27

Incl：Business cost 6571893216.94 9021989897.09

Interest expense

Fee and commission paid

Insurance discharge payment

Net claim amount paid

Insurance policy dividend paid

Insurance policy dividend paid

Reinsurance expenses

Business tax and surcharge 46727113.64 186096120.70

Sales expense 155812716.54 93892692.42

Administrative expense 282118024.57 204871395.72

R & D expense 221327523.23 185106307.04

Financial expenses 368090095.96 395227116.30

Including：Interest expense 588567514.28 595740917.45

Interest income 228977031.09 198162232.24

Add：Other income 222651739.17 108362056.52

Investment gain（“-”for loss） 22050338.04 23706518.19

Including: investment gains from

affiliates

17437895.79 11836624.48

Financial assets measured at amortized

cost cease to be recognized as income

Gains from currency exchange

Net exposure hedging income

Changing income of fair value

Credit impairment loss -9667362.72

Impairment loss of assets -1753608.15 -1058589.31

Assets disposal income -664826.45

III. Operational profit（“-”for loss） 1062401638.39 1173013420.56

Add ：Non-operational income 7919928.18 5945896.93

Less: Non-operating expense 2315427.97 2767812.01

IV. Total profit(“-”for loss) 1068006138.60 1176191505.48

Less：Income tax expenses 186908717.85 282130776.24

V. Net profit 881097420.75 894060729.24

(I) Classification by business

continuity

1.Net continuing operating profit 881097420.75 894060729.24

2.Termination of operating net profit

(II) Classification by ownership

1.Net profit attributable to the owners of

parent company

844176169.98 858296089.08

2.Minority shareholders’ equity 36921250.77 35764640.16

VI. Net after-tax of other comprehensive

income

14095.23

Net of profit of other comprehensive inco

me attributable to owners of the parent co

mpany.

7752.38

（I）Other comprehensive income items

that will not be reclassified into

gains/losses in the subsequent accounting

period

1.Re-measurement of defined benefit pla

ns of changes in net debt or net assets

2.Other comprehensive income under the

equity method investee can not be reclass

ified into profit or loss.

3. Changes in the fair value of

investments in other equity instruments

4. Changes in the fair value of the

company’s credit risks

5.Other（II）

Other comprehensive income that will be

reclassified into profit or loss.

7752.38

1.Other comprehensive income under the

equity method investee can be reclassifie

d into profit or loss.

2. Changes in the fair value of

investments in other debt obligations

3.Gains and losses from changes in fair v

alue available for sale financial assets

4. Other comprehensive income arising

from the reclassification of financial

assets

5.Held-to-maturity investments reclassifi

ed to gains and losses of available for sal

e financial assets

6. Allowance for credit impairments in

investments in other debt obligations

7. Reserve for cash flow hedges

8.

Translation differences in currency financ

ial statements

7752.38

9.Other

Net of profit of other comprehensive inco

me attributable to Minority shareholders’

equity

6342.85

VII. Total comprehensive income 881097420.75 894074824.47

Total comprehensive income attributable 844176169.98 858303841.46

to the owner of the parent company

Total comprehensive income

attributable minority shareholders

36921250.77 35770983.01

VIII. Earnings per share

（I）Basic earnings per share 0.15 0.15

(II)Diluted earnings per share 0.15 0.15

The current business combination under common control the net profits of the combined party before achieved ne

t profit of RMB0.00 last period the combined party realized RMB0.00.Legal representative ：Wang Lipeng

Person-in-charge of the accounting work：Feng Qiuju

Person-in -charge of the accounting organ：Wang Cang

4. Income statement of the Parent Company

In RMB

Items Semi-annual of 2019 Semi-annual of 2018

I. Income from the key business 118328629.33 55315982.40

Incl：Business cost 104268766.04 38492540.23

Business tax and surcharge 3986637.43 2172697.75

Sales expense

Administrative expense 16722075.57 24293737.94

R & D expense 1697882.99

Financial expenses 144058883.12 251600276.69

Including：Interest expenses 342536623.00 353696339.28

Interest income 199514566.78 102176773.07

Add：Other income 50000.00

Investment gain（“-”for loss） 17437895.79 5131289.44

Including: investment gains from

affiliates

11835887.67

Financial assets measured at

amortized cost cease to be recognized

as income

Net exposure hedging income

Changing income of fair value

Credit impairment loss 3579.22

Impairment loss of assets 241.00 7901312.69

Assets disposal income

II. Operational profit（“-”for loss） -134913899.81 -264013293.46

Add ：Non-operational income 378359.80 671.41

Less：Non -operational expenses 0.15

III. Total profit(“-”for loss) -134535540.01 -264012622.20

Less：Income tax expenses -23299190.46 -1269693.27

IV. Net profit -111236349.55 -262742928.93

1.Net continuing operating profit -111236349.55 -262742928.93

2.Termination of operating net profit

V. Net after-tax of other comprehensive

income

（I）Other comprehensive income items

that will not be reclassified into

gains/losses in the subsequent

accounting period

1.Re-measurement of defined benefit pl

ans of changes in net debt or net assets

2.Other comprehensive income under th

e equity method investee can not be recl

assified into profit or loss.

3. Changes in the fair value of

investments in other equity instruments

4. Changes in the fair value of the

company’s credit risks

5.Other（II）

Other comprehensive income that will b

e reclassified into profit or loss.

1.Other comprehensive income under th

e equity method investee can be reclassi

fied into profit or loss.

2. Changes in the fair value of

investments in other debt obligations

3.

Gains and losses from changes in fair v

alue available for sale financial assets

4. Other comprehensive income

arising from the reclassification of

financial assets

5.Held-to-maturity investments reclassif

ied to gains and losses of available for s

ale financial assets

6. Allowance for credit impairments

in investments in other debt obligations

7. Reserve for cash flow hedges

8.

Translation differences in currency fina

ncial statements

9.Other

VI. Total comprehensive income -111236349.55 -262742928.93

VII. Earnings per share

（I）Basic earnings per share

(II)Diluted earnings per share

5. Consolidated Cash flow statement

In RMB

Items Semi-annual of 2019 Semi-annual of 2018

I.Cash flows from operating activities

Cash received from sales of goods or

rending of services

12538427324.24 9938756230.71

Net increase of customer deposits

and capital kept for brother company

Net increase of loans from central bank

Net increase of inter-bank loans from

other financial bodies

Cash received against original insurance

contract

Net cash received from reinsurance

business

Net increase of client deposit and

investment

Cash received from interest

commission charge and commission

Net increase of inter-bank fund received

Net increase of repurchasing business

Net cash received by agent in

securities trading

Tax returned 159124487.52 89994925.74

Other cash received from business

operation

568920464.24 730551299.36

Sub-total of cash inflow 13266472276.00 10759302455.81

Cash paid for purchasing of

merchandise and services

10469678168.19 8162424567.65

Net increase of client trade and advance

Net increase of savings in central bank

and brother company

Cash paid for original contract claim

Net increase in financial assets held

for trading purposes

Net increase for Outgoing call loan

Cash paid for interest processing fee

and commission

Cash paid for policy dividend

Cash paid to staffs or paid for staffs 547688074.54 608921172.96

Taxes paid 647487169.76 568158273.01

Other cash paid for business activities 1007270795.35 1336181154.53

Sub-total of cash outflow from business

activities

12672124207.84 10675685168.15

Net cash generated from /used in

operating activities

594348068.16 83617287.66

II. Cash flow generated by investing

Cash received from investment

retrieving

1251030000.00

Cash received as investment gains 13923452.07

Net cash retrieved from disposal of

fixed assets intangible assets and other

long-term assets

139400.00 1339040.00

Net cash received from disposal of

subsidiaries or other operational units

393727652.59

Other investment-related cash received 1340340013.92 200000000.00

Sub-total of cash inflow due to

investment activities

1340479413.92 1860020144.66

Cash paid for construction of fixed

assets intangible assets and other

long-term assets

597463088.90 2686335621.99

Cash paid as investment 300000000.00 408243324.50

Net increase of loan against pledge

Net cash received from subsidiaries and

other operational units

107762094.14

Other cash paid for investment

activities

543862480.99 318237076.99

Sub-total of cash outflow due to

investment activities

1441325569.89 3520578117.62

Net cash flow generated by investment -100846155.97 -1660557972.96

III.Cash flow generated by financing

Cash received as investment 125000000.00 4169500.00

Including: Cash received as investment

from minor shareholders

125000000.00 4169500.00

Cash received as loans 4372774810.00 3146840211.91

Cash received from bond placing

Other financing –related cash received 1873790909.69 565785278.10

Sub-total of cash inflow from financing

activities

6371565719.69 3716794990.01

Cash to repay debts 5130065194.65 4528169601.04

Cash paid as dividend profit or

interests

680941043.24 640756867.95

Including: Dividend and profit paid by

subsidiaries to minor shareholders

Other cash paid for financing activities 581386717.14 640002625.89

Sub-total of cash outflow due to

financing activities

6392392955.03 5808929094.88

Net cash flow generated by financing -20827235.34 -2092134104.87

IV. Influence of exchange rate

alternation on cash and cash equivalents

-2292073.51 -2652600.61

V.Net increase of cash and cash

equivalents

470382603.34 -3671727390.78

Add: balance of cash and cash

equivalents at the beginning of term

14916637291.04 25114660756.25

VI ..Balance of cash and cash

equivalents at the end of term

15387019894.38 21442933365.47

6. Cash flow statement of the Parent Company

In RMB

Items Semi-annual of 2019 Semi-annual of 2018

I.Cash flows from operating activities

Cash received from sales of goods or

rending of services

84884151.99 63990000.00

Tax returned 13719.30

Other cash received from business

operation

1224517860.73 330847011.69

Sub-total of cash inflow 1309402012.72 394850730.99

Cash paid for purchasing of

merchandise and services

2016245.08 33858206.35

Cash paid to staffs or paid for staffs 8802854.34 16144890.38

Taxes paid 30828754.47 3755213.45

Other cash paid for business activities 920560919.47 217407719.04

Sub-total of cash outflow from business

activities

962208773.36 271166029.22

Net cash generated from /used in

operating activities

347193239.36 123684701.77

II. Cash flow generated by investing

Cash received from investment

retrieving

1770000000.00

Cash received as investment gains 678923452.07

Net cash retrieved from disposal of

fixed assets intangible assets and other

long-term assets

Net cash received from disposal of

subsidiaries or other operational units

Other investment-related cash received

Sub-total of cash inflow due to

investment activities

2448923452.07

Cash paid for construction of fixed

assets intangible assets and other

long-term assets

Cash paid as investment 2141300000.00 2617565500.00

Net cash received from subsidiaries and

other operational units

Other cash paid for investment

activities

19435140168.74 12759192480.99

Sub-total of cash outflow due to

investment activities

21576440168.74 15376757980.99

Net cash flow generated by investment -21576440168.74 -12927834528.92

III. Cash flow generated by financing

Cash received as investment

Cash received as loans 1741000000.00 580000000.00

Cash received from bond placing

Other financing –related ash received 17708836513.48 10804871140.21

Sub-total of cash inflow from

financing activities

19449836513.48 11384871140.21

Cash to repay debts 1322383333.28 2276373966.68

Cash paid as dividend profit or

interests

264269240.71 348534414.26

Other cash paid for financing activities 750000.00

Sub-total of cash outflow due to

financing activities

1587402573.99 2624908380.94

Net cash flow generated by financing 17862433939.49 8759962759.27

IV. Influence of exchange rate

alternation on cash and cash equivalents

V.Net increase of cash and cash

equivalents

-3366812989.89 -4044187067.88

Add: balance of cash and cash

equivalents at the beginning of term

9732302654.23 11224359236.39

VI ..Balance of cash and cash

equivalents at the end of term

6365489664.34 7180172168.51

7. Consolidated Statement on Change in Owners’ Equity

Amount in this period

In RMB

Items

Semi-annual of 2019

Owner’s equity Attributable to the Parent Company

Minor

shareh

olders’

equity

Total

of

owners

’

equity

share

Capit

a

Other Equity

instrument

Capital

reserve

s

Less:

Shares

in

stock

Other

Compr

ehensi

ve

Incom

e

Specia

lized

reserve

Surplu

s

reserve

s

Comm

on risk

provisi

on

Retain

ed

profit

Other

Subtot

al prefe

rred

stock

Susta

inabl

e

debt

Other

I.Balance at the

end of last year

5730

250

118.0

0

21786

2333

93.78

4422

320.00

-2917

5.80

12614

331.3

5

24550

7019.

95

4750

97755

7.86

32521

1309

25.14

90217

4561.

76

33423

3054

86.90

Add: Change of

accounting

policy

Correcting of

previous errors

Merger of

entities under

common control

Other

II.Balance at the

beginning of

current year

5730

250

118.0

0

21786

2333

93.78

4422

320.00

-2917

5.80

12614

331.3

5

24550

7019.

95

4750

97755

7.86

32521

1309

25.14

90217

4561.

76

33423

3054

86.90

III.Changed in

the current year

30005

405.7

8

26282

5.46

44305

8661.

72

47332

6892.

96

75473

967.6

7

54880

0860.

63

（1）Total

comprehensive

income

84417

6169.

98

84417

6169.

98

36921

250.7

7

88109

7420.

75（II）Investment

or decreasing of

capital by

owners

30005

405.7

8

30005

405.7

8

38682

277.0

3

68687

682.8

1

1．Ordinary Sh

ares invested by

shareholders

30005

405.7

8

30005

405.7

8

38682

277.0

3

68687

682.8

1

2．Holders of o

ther equity instr

uments invested

capital

3．Amount of

shares paid and

accounted as

owners’ equity

4．Other（III）Profit

allotment

-4011

17508

.26

-4011

17508

.26

-4011

17508

.26

1.Providing of

surplus reserves

2.Providing of

common risk

provisions

3．Allotment to

the owners (or

shareholders)

-4011

17508

.26

-4011

17508

.26

-4011

17508

.26

4．Other

(IV) Internal

transferring of

owners’ equity

1. Capitalizing

of capital

reserves (or to

capital shares)

2. Capitalizing

of surplus

reserves (or to

capital shares)

3．Making up

losses by

surplus

reserves.

4.Change

amount of

defined benefit

plans that carry

forward

Retained

earnings

5．Other

comprehensive

income

carry-over

retained

earnings

6．Other

(V). Special

reserves

26282

5.46

26282

5.46

-1295

60.13

13326

5.33

1. Provided this

year

2075

391.67

2075

391.67

2075

391.67

2．Used this

term

-1812

566.21

-1812

566.21

-1295

60.13

-1942

126.34（VI）Other

IV. Balance at

the end of this

term

5730

250

118.0

0

21816

2387

99.56

4422

320.00

-2917

5.80

12877

156.8

1

24550

7019.

95

5194

03621

9.58

32994

4578

18.10

97764

8529.

43

33972

1063

47.53

Amount in last year

In RMB

Items

Semi-annual of 2018

Owner’s equity Attributable to the Parent Company

Minor

shareho

lders’

equity

Total of

owners’

equity

share

Capit

a

Other Equity

instrument

Capital

reserve

s

Less:

Shares

in

stock

Other

Compr

ehensi

ve

Incom

e

Specia

lized

reserve

Surplu

s

reserve

s

Comm

on risk

provisi

on

Retain

ed

profit

Other

Subtot

al prefe

rred

stock

Susta

inabl

e

debt

Other

I.Balance at the

end of last year

5730

250

21987

4052

4422

320.00

-4518.

45

1983

921.21

22413

3824.

3010

37229

30949

7185

12190

31326.

32168

749868

118.0

0

20.42 86 6.37 42.41 49 .90

Add: Change of

accounting

policy

Correcting of

previous errors

Merger of

entities under

common

control

Other

II.Balance at

the beginning

of current year

5730

250

118.0

0

21987

4052

20.42

4422

320.00

-4518.

45

1983

921.21

22413

3824.

86

3010

37229

6.37

30949

7185

42.41

12190

31326.

49

32168

749868

.90

III.Changed in

the current year

-1936

77513

.88

7752.

38

6552.

46

45717

8580.

81

26351

5371.

77

-44451

7148.1

7

-18100

1776.4

0

（1）Total

comprehensive

income

7752.

38

85829

6089.

08

85830

3841.

46

35764

640.16

894068

481.62（II）

Investment or

decreasing of

capital by

owners

-2703

64.11

-2703

64.11

41695

00.00

38991

35.89

1．Ordinary Sh

ares invested b

y shareholders

41695

00.00

41695

00.00

2 ． Holders of

other equity ins

truments invest

ed capital

3．Amount of

shares paid and

accounted as

owners’ equity

4．Other

-2703

64.11

-2703

64.11

-27036

4.11（III）Profit

allotment

-4011

17508

.27

-4011

17508

.27

-40111

7508.2

7

1.Providing of

surplus reserves

2.Providing of

common risk

provisions

3．Allotment to

the owners (or

shareholders)

-4011

17508

.27

-4011

17508

.27

-40111

7508.2

7

4．Other

(IV) Internal

transferring of

owners’ equity

1. Capitalizing

of capital

reserves (or to

capital shares)

2. Capitalizing

of surplus

reserves (or to

capital shares)

3．Making up

losses by

surplus

reserves.

4.Change

amount of

defined benefit

plans that carry

forward

Retained

earnings

5．Other

comprehensive

income

carry-over

retained

earnings

6．Other

(V). Special

reserves

6552.

46

6552.

46

6552.4

6

1. Provided this

year

6552.

46

6552.

46

6552.4

6

2．Used this

term（VI）Other

-1934

07149

.77

-1934

07149

.77

-48445

1288.3

3

-67785

8438.1

0

IV. Balance at

the end of this

term

5730

250

118.0

0

21793

7277

06.54

4422

320.00

3233.

93

1990

473.67

22413

3824.

86

3467

55087

7.18

31213

2339

14.18

774514

178.32

31987

748092

.50

8. Statement of change in owner’s Equity of the Parent Company

Amount in this period

In RMB

Items

Semi-annual of 2019

Share

capital

Other Equity instrument

Capital

reserves

Less:

Shares in

stock

Other

Compreh

ensive

Income

Specializ

ed

reserve

Surplus

reserves

Retaine

d profit

Other

Total of

owners’

equity

preferr

ed

stock

Sustain

able

debt

Other

I.Balance at the

end of last year

57302

50118.

00

218324

53907.5

0

442232

0.00

226517

795.62

46725

2231.1

1

2825205

1732.23

Add: Change of

accounting

policy

Correcting of

previous errors

Other

II.Balance at the

beginning of

current year

57302

50118.

00

218324

53907.5

0

442232

0.00

226517

795.62

46725

2231.1

1

2825205

1732.23

III.Changed in

the current year

-51235

3857.8

1

-5123538

57.81

（I）Total

comprehensive

income

-11123

6349.5

5

-1112363

49.55

(II) Investment

or decreasing of

capital by

owners

1．Ordinary Sha

res invested by s

hareholders

2．Holders of ot

her equity instru

ments invested c

apital

3.Amount of

shares paid and

accounted as

owners’ equity

4．Other（III）Profit

allotment

-40111

7508.2

6

-4011175

08.26

1.Providing of

surplus reserves

2．Allotment to

the owners (or

shareholders)

-40111

7508.2

6

-4011175

08.26

3．Other

(IV) Internal

transferring of

owners’ equity

1. Capitalizing

of capital

reserves (or to

capital shares)

2. Capitalizing

of surplus

reserves (or to

capital shares)

3．Making up

losses by surplus

reserves.

4.Change

amount of

defined benefit

plans that carry

forward

Retained

earnings

5．Other

comprehensive

income

carry-over

retained earnings

6．Other

(V) Special

reserves

1. Provided this

year

2．Used this term（VI）Other

IV. Balance at

the end of this

term

57302

50118.

00

218324

53907.5

0

442232

0.00

226517

795.62

-45101

626.70

2773969

7874.42

Amount in last year

In RMB

Items

Semi-annual of 2018

Share

Capital

Other Equity

instrument

Capital

reserves

Less:

Shares

in stock

Other

Compre

hensive

Income

Specializ

ed

reserve

Surplus

reserves

Retained

profit

Other

Total of

owners’

equity

preferr

ed

stock

Sustai

nable

debt

Other

I.Balance at the

end of last year

5730

25011

8.00

21861

207672

.90

442232

0.00

205144

600.53

6760109

83.59

28468191

055.02

Add: Change of

accounting

policy

Correcting of

previous errors

Other

II.Balance at

the beginning

of current year

5730

25011

8.00

21861

207672

.90

442232

0.00

205144

600.53

6760109

83.59

28468191

055.02

III.Changed in

the current year

-27531

923.63

-663860

437.20

-69139236

0.83

（I）Total

comprehensive

income

-262742

928.93

-26274292

8.93

(II) Investment

or decreasing of

capital by

owners

-27531

923.63

-27531923

.63

1．Ordinary Sh

ares invested by

shareholders

-27531

923.63

-27531923

.63

2．Holders of o

ther equity instr

uments invested

capital

3.Amount of

shares paid and

accounted as

owners’ equity

4．Other（III）Profit

allotment

-401117

508.27

-40111750

8.27

1.Providing of

surplus reserves

2．Allotment to

the owners (or

shareholders)

-401117

508.27

-40111750

8.27

3．Other

(IV) Internal

transferring of

owners’ equity

1. Capitalizing

of capital

reserves (or to

capital shares)

2. Capitalizing

of surplus

reserves (or to

capital shares)

3．Making up

losses by

surplus

reserves.

4.Change

amount of

defined benefit

plans that carry

forward

Retained

earnings

5．Other

comprehensive

income

carry-over

retained

earnings

6．Other

(V) Special

reserves

1. Provided this

year

2．Used this

term（VI）Other

IV. Balance at

the end of this

term

5730

25011

8.00

21833

675749

.27

442232

0.00

205144

600.53

1215054

6.39

27776798

694.19

III. Brief introduction of the Company

Approved by Hebei Economic System Reform Commission with the Approval of Establishment of Tunghsu

Optoelectronic Technology Co. Ltd.（Hereinafter referred to as “The Company” or “Tunghsu Optoelectronic”）(Ji

Ti Gfai Wei Gu Zi(1992) No.5 Document) in 1992 Shijiazhuang Baoshi Electronic Glass Co. Ltd. is a joint stock

limited company jointly established by Shijiazhuang Kinescope General Factory (transformed into Shijiazhuang

Baoshi Electronics Group Co. Ltd.later) China Electronic Import and export Corporation and Zonghua Hebei

Import and Export Company. At the Time of establishment the Company had 25.68 million shares (the par value

of each share is RMB 10) and total share capital of RMB 256.80 million.On July 17 1993 the Company held a provis ional shareholders' general meeting and decided to split the stock

equity with par value of RMB 10 per share into stock equity with par value of RMB 1 per share. As a result the total

number of the Company's shares became 256.80 million and its total share capital became RMB 256.80 million.

Approved by Securities Commission under State Council with the Approval of Issue of 100 Million Domestically

Listed Foreign Investment Shares by Shijiazhuang Baoshi Electronic Glass Co. Ltd. (Zheng Wei Fa (1996) No. 15

Document) on June 11 1996 the Company issued 100 million domestically listed foreign investment shares (B

shares) (the par value of each share is RMB 1). Approved by China Securities Regulatory Commission with the

Approval of the Application of Shijiazhuang Baoshi Electronic Glass Co. Ltd. to Publicly Issue Shares (Zheng

Jian Fa Zi (1996) No. 174 Document) on August 30 of the same year the Company publicly issued 26.20 million

shares (the par value of each share is RMB 1). As of September 17 1996 the total share capital of the Company

increased to RMB 383 million.

According to the Approval of Private Issue of Shares by Shijiazhuang Baoshi Electronic Glass Co. Ltd. (Zhen Jian

Xu Ke (2012) No. 1661 Document) issued by China Securities Regulatory Commission ("CSRC") the Company

privately issued 520 million RMB ordinary shares (A shares) to specific investors at the price of RMB 9.69 per share

on April 3 2013. All investors subscribed for shares in cash. After this private issue the registered capital of the

Company was changed to RMB 903.00 million.

The controlling shareholder of the company by the Shijiazhuang Baoshi Electronic Group Co. Ltd. changed to Tu

nghsu Group a direct stake of 14.40% Shijiazhuang Baoshi Electronic Glass Co. Ltd. held the indirectly 12.27%

of the share.The 6th Provisional shareholder meeting in 2013 approved the name change of Shijiazhuang Baoshi Electronic G

lass Co. Ltd. to Tunghsu Optoelectronic Technology Co. Ltd..

According to the resolution of annual shareholder meeting in 2013 and the provisions of amendments to articles of

association approved on April 27 2014 the company has transferred 20 shares for each 10 shares to all shareholders

and with total shares of 1806 million transferred on the basis of the general capital of 903 million on December 31

2013. Thus the registered capital of RMB1806 million applied to add by the company should be transferred into the

share capital by the capital reserve with the reference date on May 27 2014 and the registered capital is RMB2709

million after changed.

As per the provisions of “Restricted Stock Incentive Plan of Tunghsu Optoelectronic Technology Co. Ltd. (Draft)” and

its summary proposal approved after the second temporary shareholders’ resolution in 2014 the company has

implemented the stock option incentive to grant 41 people the restricted stocks of RMB3080000.00 with the price of

RMB3.88 per share which are all in cash subscription. Thus the company shall increase the share capital of RMB3.08

million and the capital reserve of RMB 8870400.00 and the share capital is RMB2712080000.00 after changed.Under the provisions of “Proposal on Repurchase of Part of Domestic Listed Foreign Shares (Share B)” approved after

the second temporary shareholders’ resolution in 2014 the company has repurchased 49999999.00 B shares released

outside and the repurchased shares shall be written off and the registered capital is reduced correspondingly. Thus the

company shall decrease the share capital of RMB49999999.00 and the capital reserve of RMB218024376.60 and

the share capital is RMB2662080001.00 after changed.Referring to the resolutions determined on the 27

th

Meeting of the 7

th

Board of Directors of the company the 31

st

Meeting of the 7

th

Board of Directors the 1

st

General Meeting of Extraordinary Shareholders in 2015 the 38

th

Meeting of the 7

th

Board of Directors and the Regulatory Approval No. [2015] 2270 by China Securities

Regulatory Commission: Replies on Approval of Private Issuing of Stocks by Tunghsu Photoelectric

Technology Co. Ltd. it is approved that the company issues new shares less than 1186943620 privately. The

planned number of privately issued stocks is less than (including) 1186943620. The actual issuance number of

the stock is 1173020525 and the modified equity capital is 3835100526.00 yuan.

According to Proposals on the Repurchase and Cancellation of Partial Restricted Shares deliberated and approved

on the 43

rd

Meeting of the 7

th

Board of Directors of the company convened on October 29 2015 the company

plans to repurchase and cancel restricted shares. The granted but unlocked restricted shares held by left equity

incentive objects sum to 100000 at the repurchase price of 3.78 yuan/share. Other forms of lease besides financial

leas ing are considered as operating leas ing After the repurchase of shares was cancelled the share capital was

changed to RMB 3835000526.00.

According to ZJXK [2016] No. 1322 document On the Approval of Non-public Stock to Tunghsu Optoelectronic

Technology Co. Ltd permitted by China Securities Regulatory Commission and also was resolved in the 7th board

of the forty-eight meeting and the first extraordinary shareholders' general meeting，it is approved that thecompany issues new shares less than 1104928457.00 privately. The planned number of privately issued stocks is

less than (including) 1104928457.00. The actual issuance number of the stock is 1104928457.00 and the

modified equity capital is 4939928983.00 yuan.

According to the company's eleventh meeting of the eighth Board of Directors held on March 20 2017 the

eighteenth meeting of the eighth Board of Directors held on June 9 2017 the fourth temporary shareholders’

general meeting of 2017 held on June 26 2017 and the Approval on Tunghsu Optoelectronic Technology Co.Ltd’s Share Issuance to Objects Including Shanghai Huimao Enterprise Management Co. Ltd for Asset

Purchase and Raising Matching Funds by CSRC (Zhen Jian Xu Ke [2017] No. 1841 Doc) approved that the

company shall issue 262626262 shares to Shanghai Huimao Enterprise Management Co. Ltd (hereinafter

referred to as "Shanghai Huimao") 106326446 shares to Tunghsu Group Co. Ltd (hereinafter referred to as

"Tunghsu Group") 11380165 shares to Mianyang Science and Technology City Development Investment

(Group) Co. Ltd (hereinafter referred to as "Mianyang Science and Technology Group") and 5020661 shares to

Sichuan Changhong Electric Appliance Co. Ltd (hereinafter referred to as "Sichuan Changhong") for purchasing

the underlying assets; and approved that the Company shall raise no more than RMB 3750000000 of matching

funds by the company’s non-public share issuance. The Company actually issued 385353534.00 shares for

purchasing the assets The issue price per share is 9.90 yuan; and issued 404967601.00 shares for raising the

matching funds The issue price per share is 9.26 yuan;thus the capital stock after the change became RMB

5730250118.00.

As of June 30 2019 Registered capital : RMB 5730250118.00 Legal representative: Wang Lipeng

Enterprise unif ied social credit code: 911301001043959836 Registered Address: No.9 Huanghe Road

Shijiazhuang High-tech Industrial Development Area Shijiazhuang Hebei Province.Tunghsu Optoelectronic Parent Company is the Tunghsu Group，Uitimate controller is Li Zhaoting.Tung Financial statements and notes to the financial statements approved at the 3rd meeting of the 9th Board of

Directors on August 30 2019.

The company's business scope: investing in the project investments with its own funds; research and development

of machinery equipment and electronic products; manufacturing and production-process development of various

non-standard equipments and components; processing and sales of electronic products for grinding machine

(excluding public safety equipment and devices); self operated and agent import and export business of various

commodities and technologies; computer system integration software development technical consulting;

installation of electrical and mechanical equipment (not including pre-licensing ones) engineering advice. (All of

the above scope excluded those prohibited or restricted by laws regulations and State Council decisions; matters

needing approval by other departments can be operated after the approval).On June 30 2019 25 subsidiaries and 97 sub-subsidiaries were included in the consolidation scope by the

company see details at Note 9 “Rights and Interests in Other Subjects ”. The consolidation scope of the companyincreased by 7 companies year on year at this reporting period（Including：12 new Sub-subsidiaries companieswere added 2 were disposed of and 3 were cancelled） see details at Note 8“Change of consolidation scope.

IV.Basis for the preparation of financial statements

1. Basis for the preparation of financial statements

The financial statements of the company are prepared based on the going-concern assumption and the actual

transactions and items，the Company prepared financial statements in accordance with the ASBE-Bas ic Standardand revised thereafter Application Guidance of Accounting Standard for Business Enterprises Interpretation of

Accounting Standards for Business Enterprises and other regulations(hereinafter referred to as “the AccountingStandards for Business Enterprises” “China Accounting Standards” or “CAS”)，Rules for Preparation Convention

of Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in

2014) by China Securities Regulatory Commission.

In accordance with Accounting Standards for Business Enterprises the Company has adopted the accrual basis of

accounting. Except for certain financial instruments the Company adopts the historical cost as the principle of

measurement in the financial statements. The valuation will be made according to the lower one between the

amount of on-sales non-current assets after fair value deducts the predicted costs and the original Net carrying

amount which conforms to the condition of being on-sales. When assets are impaired provisions for asset

impairment are made in accordance with relevant requirements.

2. Ongoing-operation

The company has the capacity to continually operate within 12 months at least since the end of report period and

hasn’t the major issues impacting on the sustainable operation ability.V. The company's major accounting policies accounting estimates and prior errors

Specific accounting policies and accounting estimates are indicated as follows:

Nil

1. Statement on compliance with accounting standards for business Enterprises

The Company state: the financial statements prepared are in line with the requirements in enterprise accounting st

andards in line with of system and have truly and completely reflected of the financial status in June

302019 operational results cash flow and other relevant information of January –June 2019.

2.Accounting year:

The Group’s fiscal periods include fiscal years and fiscal periods shorter than a complete fiscal year..from January

1 to December 31 as one accounting year.

3. The operating cycle

The normal business cycle refers to the period starting from assets purchased for processing to cash or cash

equivalents converted. The Company uses a 12-month operating cycle as liquidity classification criteria for its

4. Currency for bookkeeping：

The Company takes RMB as the standard currency for bookkeeping.5. Accounting treatments for a business combinations under common control and under non common control

The term "business combination" refers to a transaction or event combining two or more separate enterprises into

one reporting entity. Business combinations are classified into business combinations involving enterprises under

common control and business combinations not involving enterprises under common control.

(1) A business combination involving enterprises under common control

A business combination involving enterprises under common control is a business combination in which all of the

combining enterprises are ultimately controlled by the same party or parties both before and after the combination

and that control is not transitory. For the business combination involving enterprises under common control the

party obtaining the control right over other enterprises involved in the combination on the combination date is the

combining party while other enterprises involved in the combination is the combined party. The combination date

is the date on which one combining enterprise obtains control of other combining enterprises .

Assets and liabilities obtained are measured at their respective carrying amounts as recorded by the combining

entities at the date of the combination. The difference between the carrying amount of the net assets obtained and

the carrying amount of the consideration paid for the combination [the aggregate face value of shares issued as

consideration] is adjusted to the share premium in capital reserve. If the share premium is not sufficient to absorb

the difference any excess is adjusted against retained earnings.

Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are

incurred.

（2）A business combination not involving enterprises under common control

A business combination not involving enterprises under common control is a business combination in which all of

the combining enterprises are not ultimately controlled by the same party or parties before and after the

combination. For the business combination not involving enterprises under common control the party obtaining

the control right over other enterprises involved in the combination on the combination date is the combining

party while other enterprises involved in the combination is the combined party. The combination date is the date

on which one combining enterprise obtains control of other combining enterprises.The cost of combination is the aggregate of the fair values at the acquisition date of the assets given liabilities

incurred or assumed and equity securities issued by the acquirer in exchange for control of the acquiree the

intermediary expenses incurred by the acquirer in respect of auditing legal services valuation and consultancy

services and other associated administrative expense attributable to the business combination are charged to profit

or loss when they are incurred. The costs of issuing equity or debt securities as a part of the consideration for the

acquisition are inc luded in the carrying amounts of these equity or debt securities upon initial recognition. The

contingent costs as a part of the consideration for the acquisition are included in the cost of combination on fair

values at the acquisition date and will be adjusted if any new situation incurred or further evidence provided in 12

months subsequent to acquisition date then the goodwill will be adjusted accordingly. The acquiree’s identif iable

assets liabilities and contingent liabilities acquired by the acquirer in a business combination that meet the

recognition criteria are measured at fair value at the acquisition date. Where the cost of combination exceeds the

acquirer’s interest in the fair value of the acquiree’s identif iable net assets the difference is treated as an asset and

recognised as goodwill. Where the cost of combination is less than the acquirer’s interest in the fair value of the

acquiree’s identif iable net assets the acquirer firstly reassesses the measurement of the fair values of the

acquiree’s identif iable assets liabilities and contingent liabilities and measurement of the cost of combination. If

after that reassessment the cost of combination is still less than the acquirer’s interest in the fair value of the

acquiree’s identif iable net assets the acquirer recognizes the remaining difference immediately in profit or loss for

the current period.The deductible temporary difference from the acquiree not recognized as deferred tax assets on the acquisition

date will be recognized as deferred tax assets if in 12 months subsequent to acquisition date there is new

information indicating that relative situation exists and the economic benefit associated with the deductible

temporary difference will flow to the Company the goodwill will be reduced accordingly. If the goodwill is less

than the deductible temporary difference the difference will be charged into profit or loss in current period.

For a business combination involving enterprise not under common control and achieved in stages it should make

judgement on whether those transactions are regard as “Package deal” based on “No. 5 Notice on Explanation on

Accounting Standards for Business Enterprises by the Ministry of Finance" (CAIKUAI [2012] No.19) and Article

51 of "Accounting Standards for Business Enterprises No. 33: Consolidated Financial Statement". If it is regarded

as “package deal” the accounting treatment refers to above-mentioned principle and “Long-term equityinvestment” in Note III 14; If it is not regarded as “package deal” the accounting treatment should be differentfor individual and consolidated financial statements.In individual f inancial statement the initial investment cost is the sum of the Net carrying amount of equity

investment held before the acquisition date and the cost of new investment on acquisition date. When the stock

equity held before the acquisition date involving other consolidated incomes at the disposal date other

consolidated incomes related to this investment shall be subjected to accounting treatment (i.e. except the

corresponding share accounted by equity method in the change due to remeasurement and setting of net

indebtedness or net assets of benefit plan the remaining shall be transferred to the current investment income) on

the same basis as that adopted by the acquiree for the direct disposal of relevant assets or liabilities.In consolidated financial statement the share equity held before the acquisition date shall be measured again

according to the fair value of this share equity on the acquisition date the balance of the fair value and its Net

carrying amount shall be counted in the current investment income; when the share equity held before the

acquisition date involving other consolidated incomes other consolidated incomes related shall be subjected to

accounting treatment (i.e. except the corresponding share accounted by equity method in the change due to

remeasurement and setting of net indebtedness or net assets of benefit plan the remaining shall be transferred to

the current investment income of the acquisition date) on the same basis as that adopted by the acquiree for the

direct disposal of relevant assets or liabilities.

6. Preparation on consolidation financial statements

(1) Preparation on consolidation financial statements

The company starts to include the actual control right to the net assets and the production and management

decisions of the subsidiaries into the combination scope since the date of the actual right acquired and will stop

covering into the combination scope on the date of the actual right lost. For the disposed subsidiaries the business

performance and the cash flow before the disposal date have been properly covered in the consolidated profit

statement and the consolidated cash flow statement. For the subsidiaries disposed in the current period the

opening balance of the consolidated balance sheet shall not be adjusted.

(2) Method of preparing consolidated financial statements

Meanwhile for the subsidiaries increased through the business combination under non-common control the

business performance and the cash flow after the acquisition date have been properly included in the consolidated

profit statement and the consolidated cash flow statement and the opening balance and the comparison balance of

the consolidated financial statement shall not be adjusted. For the subsidiaries increased through the business

combination under common control the business performance and the cash flow from the beginning of current

combination period to the combination date have been properly included in the consolidated profit statement and

the consolidated cash flow statement and the comparison balance of the consolidated financial statement shall be

adjusted simultaneously.When preparing the consolidated financial statement the necessary adjustment shall be made according to the

accounting policy of the company and the financial statement of the subsidiaries during the fiscal period if the

accounting policy or the fiscal period adopted by the subsidiaries and the company is discrepant. For the

subsidiaries acquired through the business combination under non-common control the financial statement shall

be adjusted on the basis of the fair value of the identifiable net assets on the acquisition date.

All the major balances transactions and the unrealized profits of the company shall be offset in the preparation of

the consolidated financial statement.Those not belong to the company in the shareholders’ equity and the current net profit or loss of the subsidiaries

shall be respectively as the minority equity and the minority interest income and individually listed under the

shareholders’ equity and the net profit of the consolidated financial statement. The minority equity portion from

the net profit or loss in current period shall be as “minority interest income” and listed under the net profit in the

consolidated financial statement. Moreover the minority equity is still offset even if the losses of the subsidiaries

undertaken by the minority shareholders are beyond the portion of the shareholders’ equity shared by the minority

shareholders of the company at the beginning of period.When the control on the original subsidiaries lost due to the disposal of partial equity investment or other reasons

the remaining equity should be measured again according to the fair value on the control lost date. The difference

of the consideration acquired by the disposal of equity and the fair value of the surplus equity minus the net assets

portion of the original subsidiaries calculated from the purchase date as per the original stock proportion shall be

recorded into the current investment income after the control lost. Other comprehensive returns relevant to the

original subsidiary shares investment shall be disposed through the accounting treatment on the same basis of the

direct disposal of the relevant assets or liabilities by the acquiree when the control lost (Namely all the rest are

transferred into the current investment incomes with the exception of the changes caused by the net liabilities or

the net assets of the defined benefit plans re-measured by the original subsidiaries). Thereafter the subsequentmeasurement shall be made for the rest equity according to the relevant provisions of “Accounting Standards for

Business Enterprises No. 2 – Long-term Equity Investment” or “Accounting Standards for Business EnterprisesNo. 22 – Recognition and Measurement of Financial Instruments”. For the details please see Notes III 14

“Long-term Equity Investment” or Notes III 10 “Financial Instruments”.

For the equity investment in the subsidiary through the step-by-step disposal of multiple transactions till the

control right lost the company should respectively dispose all the transactions if belong to the package deal. As

long as the terms conditions and economic influence on all the transactions of the disposal of the equity

investment in the subsidiary meet one status below it usually shows that the multiple transactions matters should

be conducted the accounting treatment as the package deal: ① these transactions are made simultaneous ly or

under the consideration of the influence each other. ② these transactions shall be as the whole to achieve one

complete business results. ③ one transaction occurs depending on the appearance of other one transaction at

least. ④ one transaction is economic under the consideration with other transactions even if it is not economic

when individually considerate. For the non-package deal each transaction shall be respectively conducted theaccounting treatment according to the applicable principles of “Partial Disposal of Long-term Equity Investmentin Subsidiary without Control Lost” (please refer to 14 (2) ④ in Notes III) and “The Control on OriginalSubsidiary Lost due to Disposal of Part of Equity Investment or Other Reasons” (details please see forepart). For

the package deal from the transactions after the disposal of equity investment in the subsidiary till the control right

lost the transactions shall be as one transaction of the disposal of subsidiary and the control lost for the

accounting treatment. Therefore every balance between the net assets proportion of the subsidiary shared relative

to the disposal price and the disposal investment before the control right lost shall be recognized as other

comprehensive incomes in the consolidated financial treatment and transferred into the current profits and losses

when the control lost.

7. Accounting treatment for classification and co-operation of joint arrangement

Joint arrangement is an arrangement whereby two or more parties have joint control. The Company classified the

joint arrangement into co-operation arrangement and joint venture according to the right and obligation involving

in the joint arrangement. Under co-operation the Company has joint control and rights to the relevant assets and

liability of the arrangement. Under joint venture the Company only has joint control and rights to the net assets of

the arrangement.The company adopts equity method to calculate investment to joint enterprises by referring to accounting policies

stated in "Long-term Stock Ownership for Equity Method Calculation" in Note V 22 (2).Under co-operation the Company recognizes 1) its solely held of assets and liability 2) assets and liabilities

jointly owned based on share proportions 3) revenue from sales of assets jointly owned by the Company 4)

revenue from sales of assets based on share proportions 5) expense incurred by the Company 6) expense incurred

based on share proportions.When the Company invests sells or purchase assets (the asset does not constitute a business the same below) to

or from the co-operation the Company only recognizes the profit or loss belong to other joint parties before

selling those assets to third party. If those assets are impaired in compliance with Accounting Standards for

Bus iness Enterprises No.8-Assets impairment the Company should recognize loss for all the invested or sold

assets to co-operation. For the assets purchased from co-operation the Company should recognize loss based on

share proportion.

8. Cash and cash equivalent

Cash and cash equivalents comprise cash on hand deposits that can be readily withdraw on demand and

short-term highly liquid investments that are readily convertible into known amounts of cash and are subject to an

insignif icant risk of change in value.

9. Conversion method of foreign currency transactions

(1) Conversion method of foreign currency transactions

The foreign currency transactions are recorded on initial recognition in the functional currency by applying the

foreign currency amount by the spot exchange rate on the transaction dates while the foreign currency exchange

business or transactions relating to foreign currency exchange are recorded in the functional currency by applying

to the foreign currency amount at the actual exchange rate used.

(2) Conversion method of foreign currency monetary items and foreign currency non-monetary items

Foreign currency monetary items are convered using the spot exchange rate on the balance sheet date. The

exchange gains or losses arising from occurrence of transactions and exchange of currencies are recognized in

profit or loss for the period except that (1) exchange differences related to a specific -purpose borrowing

denominated in foreign currency that qualifies for capitalization are capitalized as part of the cost of the qualif ied

asset during the capitalization period; (2) exchange differences arising from changes in the carrying amounts of

available-for-sale monetary items are recognized as other comprehensive income.

Foreign currency non-monetary items measured at historical cost are converted to the amounts in functional

currency at the spot exchange rates on the dates of the transactions and the amounts in functional currency remain

unchanged. Foreign currency non-monetary items measured at fair value are re-converted at the spot exchange

rate on the date the fair value is determined. Difference between the re-converted functional currency amount and

the original functional currency amount is treated as changes in fair value (including changes of exchange rate)

and is recognized in profit and loss or as other comprehensive income.

(3) Conversion of financial statements denominated in foreign currencies

As an accounting treatment in respect to a foreign operation if there are monetary items relating to the investment

to foreign operation the resulting conversion differences are recognized in other comprehensive income as

“conversion reserve”. The conversion differences accumulated in shareholders’ equity with respect to a foreign

operation is transferred to profit or loss in the period when the foreign operation is disposed.

Assets and liabilities of foreign operation are converted to Renminbi at the spot exchange rate on the balance sheet

date. Equity items excluding retained earnings are converted to Renminbi at the spot exchange rates at the

transaction dates. Income and expenses of foreign operation are converted to Renminbi at the rates that

approximate the spot exchange rates at the transaction dates. The beginning balance of retained earnings is the

prior year ending balance of retained earning converted while the ending balance of retained earnings is sum total

of converted items of income statement. The resulting conversion differences are recognized in other

comprehensive income. The conversion differences accumulated in shareholders’ equity with respect to a foreign

operation is transferred to profit or loss in the period when the foreign operation is disposed

Cash flow denominated in foreign currency and cash flow of foreign operation are converted to Renminbi at the

spot exchange rate at the transaction date. The effect of foreign exchange fluctuation is treated as recociling item

that is separately disclosed on cash flow statement.The beginning balance is present as same as converted balance of financial statement in prior year.The conversion differences accumulated in shareholders’ equity with respect to a foreign operation is transferred

to profit or loss in the period when the foreign operation is fully or partially disposed or lost control over the

foreign operation due to other causes.

Disposing investment in a foreign operation without losing control the conversion differences accumulated in

shareholder’s equity associated with the disposing part is transferred to minority stockholder’s interest. Disposing

investment in a foreign operation which is joint venture enterprise the conversion differences accumulated in

shareholder’s equity associated with the disposing part is transferred to profit or loss in the disposing period with

the disposing proportion.

10. Financial instruments

Financial instruments refer to contracts that form financial assets of one party and financial liabilities or equity

instruments of other parties. When the company becomes a party to a financial instrument contract a financial

asset or financial liability is recognized.

Financial assets and financial liabilities are measured at fair value upon initial recognition: ① For financial assets

and financial liabilities measured at fair value whose changes are included in current profits and losses relevant

transaction costs are directly included in current profits and losses; ② For other types of financial assets and

financial liabilities relevant transaction costs are included in the initial recognition amount.If a financial asset or financial liability meets one of the following conditions it indicates that the purpose of

holding the financial asset or bearing the financial liability is transactional: ① The purpose of obtaining the

relevant financial asset or bearing the relevant financial liability is mainly to sell or repurchase in the near future;

② Relevant financial assets or financial liabilities are part of the identif iable portfolio of financial instruments

under centralized management at the time of initial recognition and there is objective evidence indicating that

there is a short-term profit pattern in the near future; ③ Relevant financial assets or financial liabilities are

derivatives except derivatives that meet the definition of financial guarantee contract and derivatives designated

as effective hedging instruments.

(1) Classification and measurement of financial assets

At the time of initial recognition the financial assets of the Company are classified into financial assets measured

by amortized cost financial assets measured by fair value and whose changes are inc luded in other comprehensive

income and financial assets measured by fair value and whose changes are included in current profits and losses

according to the company's business mode of managing financial assets and the contractual cash flow

characteristics of financial assets. Subsequent measurement of financial assets depends on their classification.

①Financial assets measured at amortized cost

The financial assets that meet the following conditions at the same time are classified as financial assets meas ured

in amortized cost: The business mode for managing the financial assets is aimed at collecting the contract cash

flow; The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only

the payment of principal and interest based on the amount of outstanding principal. The Company recognizes

interest income for such financial assets according to the effective interest rate method. Gains or losses arising

from derecognition of such financial assets and losses arising from impairment are directly included in current

profits and losses.

②Financial assets measured at fair value and changes included in other comprehensive income

The financial assets that meet the following conditions at the same time are classified as financial assets measured

at fair value and whose changes are included in other comprehensive income: The business mode for managing

the financial assets of the Company is aimed at both collecting the contractual cash flow and selling the financial

assets; The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only

the payment of principal and interest based on the amount of outstanding principal. Such financial assets are

measured at fair value and their changes are included in other comprehensive gains but impairment losses or

gains exchange gains and losses and interest income calculated according to the actual interest rate method are

included in current profits and losses. When such financial assets are derecognized the changes in fair value

accumulated in other comprehensive income will be carried forward to the current profits and losses.

③Financial assets measured at fair value and changes included in current profits and losses

The above-mentioned financial assets measured in amortized cost and financial assets other than those measured

at fair value with changes included in other comprehensive income are classified as financial assets measured at

fair value with changes included in current profits and losses. At the time of initial recognition in order to

eliminate or signif icantly reduce accounting mismatch financial assets can be designated as financial assets

measured at fair value with changes included in the current profits and losses. In regard with such financial assets

fair value is adopted for subsequent measurement and all changes in fair value are included in current profits and

losses.When the company changes its business mode of managing financial assets it will reclassify all relevant financial

assets affected.

(2) Classification and measurement of financial liabilities

The Company's financial liabilities are classified into: financial liabilities measured at amortized cost and financial

liabilities measured at fair value with changes recorded in current profits and losses upon initial recognition.

Financial liabilities that meet one of the following conditions can be designated as financial liabilities measured at

fair value at the time of initial measurement with changes included in current profits and losses: ① The

designation can eliminate or significantly reduce accounting mismatch; ② According to the company's risk

management or investment strategy stated in official written documents the financial liability portfolio or

financial asset and financial liability portfolio is managed and evaluated on the bas is of fair value and reported to

key management personnel within the company on this basis. Once the designation is made it cannot be revoked.

Financial liabilities designated to be measured at fair value with changes included in current profits and losses are

included in other comprehensive income. The amount of changes in fair value caused by changes in the company's

own credit risk is included in other comprehensive income; Other changes in fair value are included in current

profits and losses. When the financial liability is derecognized the accumulated gains or losses previously

included in other comprehensive income are transferred out of other comprehensive income and included in

retained income.

(3) Derecognition of financial assets and financial liabilities

Financial assets that meet one of the following conditions shall be derecognized:

① Termination of the contractual right to receive cash flow from the financial asset;

② The financial asset has been transferred and the Company has transferred almost all risks and rewards on the

ownership of the financial asset to the transferee;

③ The financial asset has been transferred. Although the Company has neither transferred nor retained almost all

risks and rewards on the ownership of the financial asset it has given up its control over the financial asset.If the current obligation of a financial liability (or part thereof) has been discharged the Company shall terminate

the recognition of the financial liability (or part thereof).

(4) Impairment of financial assets

1) For financial assets measured in amortized cost financial assets measured at fair value with changes included

in other comprehensive income the Company recognizes loss reserves on the basis of expected credit losses.The Company takes into account reasonable and reliable information on historical events current situation and

future economic situation forecasts and uses the risk of default as the weight to calculate the probability weighted

amount of the present value of the difference between the cash flow receivable from the contract and the c ash flow

expected to be received to confirm the expected credit loss.On each balance sheet date the Company separately measures the expected credit losses of financial instruments

at different stages. If the credit risk of financial instruments has not increased signif icantly since the initial

confirmation it is in the first stage. The Company measures the loss reserve according to the expected credit loss

in the next 12 months; If the credit risk of a financial instrument has increased signif icantly since its initial

recognition but no credit impairment has occurred it is in the second stage. The Company measures the loss

reserve according to the expected credit loss of the financial instrument throughout the duration; If a financial

instrument has suffered credit impairment since its initial recognition it is in the third stage. The Company

measures the loss reserve according to the expected credit loss of the instrument throughout the duration.

For financial instruments with low credit risk on the balance sheet date the Company assumes that their credit

risk has not increased signif icantly since the initial confirmation and measures the loss reserve according to the

expected credit loss in the next 12 months.

For financial instruments in the first and second stages and with low credit risk the Company calculates interest

income based on the book balance before deducting impairment provisions and the actual interest rate. For

financial instruments in the third stage the interest income shall be calculated according to their book balance

minus the amortized cost after impairment provision and the actual interest rate.The Company determines the expected credit losses of relevant financial instruments according to the following

methods:

① For financial assets credit loss is the present value of the difference between the contract cash flow to be

collected by the company and the cash flow expected to be collected;

② For lease receivables credit loss is the present value of the difference between the contract cash flow to be

collected by the company and the cash flow expected to be collected;

③ For withdrawn loan commitments the credit loss shall be the present value of the difference between the

contractual cash flow to be collected by the enterprise and the cash flow expected to be collected when the holder

of the loan commitment withdraws the corresponding loan. The Company's estimation of the expected credit loss

of the loan commitment shall be consistent with its expectation of the withdrawal of the loan commitment.

④ For a financial guarantee contract credit loss shall be the estimated amount of payment made by the enterprise

to the contract party for credit loss incurred less the present value of the difference between the amount the

enterprise expects to collect from the contract party the debtor or any other party.

⑤ For financial assets that have suffered credit impairment on the balance sheet date but are not purchased or

incurred credit impairment credit loss is the difference between the book balance of the financial asset and the

present value of the estimated future cash flow discounted at the original actual interest rate.

2) For receivables regardless of whether there is any significant financing component the Company considers all

reasonable and reliable information including forward-looking information estimates the expected credit loss of

receivables in a single or combined way and adopts a simplified model of expected credit loss and always

measures the loss reserve according to the expected credit loss throughout the duration. The accrual method is as

follows:

① At the end of the period an impairment test shall be conducted separately for receivables that have objective

evidence of impairment. Impairment losses shall be recognized and provision for bad debts shall be made

according to the difference between the present value of the estimated future cash flow and its Net carrying

amount.② When a single financial asset cannot evaluate the expected credit loss information at a reasonable cost the

Company divides the receivables portfolio according to the credit risk characteristics and calculates the expected

credit loss based on the portfolio. For receivables classified as risk portfolios the Company refers to the

experience of historical credit losses and calculates the expected credit losses based on the current situation and

the forecast of future economic conditions. The Company will include the accrued or reversed loss reserves into

the current profits and losses.

(5) Transfer of financial assets

If the company has transferred almost all risks and rewards in the ownership of the financial asset to the transferee

the confirmation of the financial asset shall be terminated; If almost all risks and rewards on the ownership of a

financial asset are retained the financial asset shall continue to be recognized.If the Company neither transfers nor retains almost all r isks and rewards in the ownership of financial assets it

shall be handled according to the following situations respectively: If the control over the financial assets is not

retained by the company the recognition of the financial assets shall be terminated and the rights and obligations

arising from or retained in the transfer shall be separately recognized as assets or liabilities; If the control over the

financial asset is retained by the company the relevant financial asset shall continue to be recognized according to

the extent that it continues to be involved in the transferred financial asset and the relevant liabilities shall be

recognized accordingly.

11.Notes receivble

Please refer to section 12 Accounts Receivable for details

12.Account receivable

For accounts receivable refer to the description of impairment of financial assets in Section 10 and Financial

Instruments (4):

(1)The accounts receivable of bad debt provisions made by credit risk Group

Name Withdrawing Method

Aging Group Aging Analysis Method

Other Group Other method

In Group Accounts on age basis in the portfolio：

Aging Rate for receivables(%) Rate for other receivables(%)

Within 1 year（Including 1 year） 5.00% 5.00%

During the credit period 0.00% 0.00%

The credit period within 1 year 5.00% 5.00%

1－2 years 10.00% 10.00%

2－3 years 30.00% 30.00%

3－4 years 50.00% 50.00%

4－5 years 70.00% 70.00%

Over 5 years 100.00% 100.00%

In Group adopting other method for bad debt provision：

Name Account receivable proportion Other account receivable proportion

Affiliated company exchanges 0.00% 0.00%

Security deposit 0.00% 0.00%

Deposit 0.00% 0.00%

Petty cashetc. 0.00% 0.00%

13. Financing of receivables

Not applicable

14.Other account receivable

Determination method and accounting treatment method of expected credit loss of other receivables

Determination method of expected credit loss of other receivables and accounting treatment method

Same as 12 "Accounts Receivable"

15. Inventories

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

No

(1)Classification of Inventories

This enterprise's inventories is classified as raw materials works in process finished products circulation

materials low-value consumption goods packing materials supplies purchasing engineering construction

development costetc.

(2) Obtaining and Measurement of Inventories

The perpetual inventory systems are adopted for this enterprise's inventories. The inventories shall be measured by

their actual cost when they are obtained. Raw materials works in process finished products etc. shall be

measured with the weighted average method when they are being sent out. Low-value consumption goods shall be

written off by one-off write-off method when they are withdrawn for use. Circulation packaging materials shall be

recorded into cost according to the predicted usage times.

(3) Methods to make provision for loss on decline in value of inventories

If the cost of inventories is higher than the net realizable value at the end of each period this enterprise shall make

the provision for the loss on decline in value of inventories. This enterprise makes provision for the loss on

decline in value of inventories on the ground of each item of inventories. If the factors causing any write-down of

the inventories have disappeared the amount of write-down shall be resumed and be reversed from the provision

for the loss on decline in value of inventories that has been made.

(4) Method for confirming the net realizable value of inventories

The net realizable value of inventories refers to the amount of the estimated selling price less the estimated costs

of completion the estimated selling costs and related tax payments.

16. Contract assets

Not applicable

17.Contract cost

Not applicable

18. Held-for-sale assets

The Company will retrieve its Net carrying amount by means of selling assets (including the exchange of

commercial non-monetary assets) instead of sequentially using a non-monetary asset or a disposal group and

when meeting two of the following conditions the Net carrying amount will be divided into on-sales category:

(1) When a certain non-monetary assets or a certain disposal group sells such kind of assets in similar transactions

in accordance with the convention assets can be sold immediately under the current situation.

(2)The Company has made decision for the selling plans and has acquired assured purchase commitment

predicting that selling will be completed within one year.( The selling which can only be sold after acquiring

approval from relevant authorities or supervision departments according to relevant provision requirement has

acquired its approval ).The Company will be specifically for dividing the non-current assets or disposal group which are acquired from

reselling into on-sales category on acquisition date if on acquisition date they can meet the stipulated condition

that the predicted selling will be completed within one year and in a short term (usually 3 months) they are likely

to meet other conditions of dividing into on-sales category.When the non-monetary assets and disposal group were measured by the Company at the beginning or remeasured

and divided into on-sales category on balance sheet date if its Net carrying amount is higher than the net amount

after fair value deducts selling expense the Net carrying amount will be written down to the net amount after fair

value deducts selling expense and the written-down amount will be confirmed as assets impairment losses and

counted into the current profits and losses and the impairment provision w ith on-sales assets will be withdrawn

in the meanwhile. For the on-sales disposal group’s confirmed amount of loss of asset impairment the Net

carrying amount of goodwill will be deducted first and its Net carrying amount will then be deducted

proportionally according to the Net carrying amount’s percentages of all non-current assets in the disposal group

which can be adopted by the measurement stipulations of Accounting Standards for Business Enterprises NO.42-

On-sales Non-current Assets Disposal Groups and Operation Termination

If any increment occurs in the net amount after the on-sales non-current assets on the subsequent balance sheet

date deducts selling expense the amount deducted previously will be recovered and will be transferred back

within the amount of asset impairment losses confirmed after being divided into on-sales category and the amount

transferred back will be counted into the current profits and losses. There will be no restitution for asset

impairment losses confirmed before being divided into on-sales category. The amount deducted previously of

on-sales disposal group shall be recovered and when after being divided into on-sales category it will be

transferred back within the amount of impairment confirmed by non-current assets by the means of the measure

stipulations of Accounting Standards for Business Enterprises NO.42- On-sales Non-current Assets Disposal

Groups and Operation Termination and the amount transferred back will be counted into the current profits and

losses. There will be no restitution for the Net carrying amount of goodwill which has been deducted and for asset

impairment losses confirmed before being divided into on-sales category which can be adopted by the measure

stipulation of this principle.No depreciation and amortization will be made in the non-current assets which are on sales or in the disposal

group. Confirmation will continue to be made in the debt interest in on-sales disposal group as well as other

expenses.When the non-current assets or the disposal group can not meet the conditions of dividing into on-sales category

the Company will not continue to divide it into on-sales category or remove the non-current assets from the

on-sales disposal group and the valuation will be made according to the lower one between two of followings:

(1)Net carrying amount before being divided into on-sales category and the amount of money after being under

the situation where Net carrying amount is supposed not to be divided into on-sales category and adjustment is

made in depreciation amortization or impairment which should have been confirmed. （2）Recoverable amount.When derecognizing the on-sales non-current assets or disposal group the Company will count the gains and

losses which are yet to be confirmed into the current profits and losses.

19.Creditor's rights investment

Not applicable

20.Other Creditor's rights investment

Not applicable

21.Long-term account receivable

Determination method and accounting treatment method of expected credit loss of Long-term receivables

Same as 12 "Accounts Receivable"

22.Long-term Equity Investment

Long-term equity investments refer to all investments that are the Company with control of joint control of or

signif icant influence over an investee. The Company accounted investments that are the Company without control

of joint control of or signif icant influence over an investee as financial assets available-for-sale or financial

assets at fair value through profit or loss. Please refer to Note III 10 “Financial instruments” for detail.Joint control refers to the contractually agreed sharing of control of an arrangement which exists only when

decisions about the relevant activities require the unanimous consent of the parties sharing control. Signif icant

influence refers to the power to participate in the financial and operating policy decisions of the investee but is not

control or joint control of those policies.

(1) Initial measurement

For business combination under common control if the consideration of the merging enterprise is that it makes

payment in cash transfers non-cash assets or bear its debts it shall on the date of combination regard the share of

the Net carrying amount of the stockholder's equity of the merged enterprise as the initial cost of the long-term

equity investment. The difference between the initial cost of the long-term equity investment and the payment in

cash non-cash assets transferred as well as the Net carrying amount of the debts borne by the merging party shall

offset against the capital reserve. If the capital reserve is in sufficient to dilute the retained earnings shall be

adjusted. If the consideration of the merging enterprise is that it issues equity securities it shall on the date of

combination regard the share of the Net carrying amount of the stockholder's equity of the merged enterprise as

the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the

capital stock while the difference between the initial cost of the long-term equity investment and total face value

of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute the

retained earnings shall be adjusted. Business combination under common control achieved in stages by several

transactions shall determine whether the transactions belong to one package. If the transactions belong to one

package the Company accounted these transactions as one transaction with control of the investee. If the

transactions do not belong to one package on the date of combination the Company shall regard the share of the

Net carrying amount of the owner's equity of the merged enterprise as the initial cost of the long-term equity

investment. The difference between the initial cost of the long-term equity investment and the sum of Net carrying

amount of long-term equity investments prior to the combination and the Net carrying amount of consideration

paid at the date of combination in order to achieve control of the investees shall offset against the capital reserve.If the capital reserve is in sufficient to dilute the retained earnings shall be adjusted. No accounting treatment will

be made for the other comprehensive income arising from equity investment under equity method before the

combination date or recognized with available-for-sale financial assets.

For business combination under different control the Company accounts initial cost of long-term equity

investment as combination costs on the acquisition date. Combination costs refer to the fair values on the

acquisition date of the assets paid the liabilities incurred or assumed and the equity securities issued by the

acquirer. Business combination under different control achieved in stages by several transactions shall determine

whether the transactions belong to one package. If the transactions belong to one package the Company accounts

these transactions as one transaction with control of joint control of significant influence over the investee. If the

transactions do not belong to one package the initial cost of long-term equity shall be accounted under cost

method and recognized amount shall be the sum of Net carrying amount of long-term equity investment before

acquisition and cost of additional investment. For equity investments previously accounted under equity method

other comprehensive income related to these investments does not change. For equity investments previously

accounted as financial assets available for sale difference between fair value and Net carrying amount and

accumulated changes in fair value originally recorded in other comprehensive income shall be transferred to profit

or loss of current period.The direct cost for the business combination of the combining party shall including the expenses for audit

assessment and legal services be recorded into the profits and losses at the current period.

Besides the long-term equity investments formed by business combination the initial cost of a long-term equity

investment obtained by other means shall be initially recognized at cost.The cost shall be ascertained in

accordance with the provisions as follows: (a) The initial cost of a long-term equity investment obtained by

making payment in cash shall be the purchase cost which is actually paid; (b) The initial cost of a long-term equity

investment obtained on the basis of issuing equity securities shall be the fair value of the equity securities issued;

(c) The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment

contract or agreement; (d) The initial cost of a long-term investment obtained by the exchange of non-monetary

assets shall be the fair value or Net carrying amount of transferred assets. (e) The initial cost of a long-term

investment shall be the fair value of the long-term investment; etc. The initial cost also consists of the expenses

directly relevant to the obtainment of the long term equity investment taxes and other necessary expenses.Long-term equity investment which due to additional investment can exercise signif icant influence over joint

control of but not control of the investees shall recognize its cost as the sum of fair value of long-term equity

investment before additional investment and cost of additional inv estment according to Accounting Standard for

Bus iness Enterprises No.22-Recognition and Measurement of Financial Instruments.

(2) Subsequent Measurement and Recognition Method

Long-term equity investments which are the Company with joint control of (excluding joint operation) signif icant

influence over the investees shall be accounted under equity method. Besides long-term equity investments which

are the Company with control of the investees shall be accounted under cost method.

(1)A long-term equity investment accounted under cost method

Under the cost method long-term equity investment is measured at initial cost additional investments or

disinvestments shall make an adjustment to the cost of long-term equity investment. The investment income

recognized by the Company shall be limited to the dividends or profits declared to distribute by the invested entity

except dividends or profits declared in the consideration paid to acquire the investees.

(2) A long-term equity investment accounted under the equity method.

Under the equity method where the initial investment cost of a long-term equity investment exceeds the

Company’s share of the fair value of the investee’s identif iable net assets at the time of acquisition no adjustment

is made to the initial investment cost. Where the initial investment cost is less than the Company’s share of the fair

value of the investee’s identifiable net assets at the time of acquisition the difference is recognized in profit or

loss for the period and the cost of the long-term equity investment is adjusted accordingly.Under the equity method the Company recognizes its share of the net profit or loss and other comprehensive

income made by the investee as investment income and other comprehensive income respectively and adjust the

carrying amount of the long-term equity investment accordingly; The carrying amount of the investment is

reduced by the portion of any profit distributions or cash dividends declared by the investee that is distributed to

the Company; the share of changes in owners' equity of the investee other than those arising from net profit or loss

other comprehensive income and profit distribution are recognized in the capital reserve the carrying amount of

the long-term equity investment is adjusted accordingly. The Company recognizes its share of the investee's net

profit or loss after making appropriate adjustments based on the fair value of the investee’s individual separately

identifiable assets etc. at the acquisition date. Where the accounting policies and accounting period adopted by

the investee are not consistent with those of the Company the Company shall adjust the financial statements of

the investee to conform to its own accounting policies and accounting period and recognize investment income

and other comprehensive income based on the adjusted financial statements. For the Company's transactions with

its associates and joint ventures where assets contributed or sold does not constitute a business unrealized

intra-group profits or losses are recognized as investment income or loss to the extent that those attributable to the

Company's proportionate share of interest are eliminated. However unrealized losses resulting from the

Company's transactions with its associates and joint ventures which represent impairment losses on the transferred

assets are not eliminated. When the assets invested by the Company to associates or joint ventures constitute an

operation and the investors thereafter own long-term equity investment without control of the Company fair

value of the operation invested shall be accounted as cost of additional long-term equity investments and

difference between initial recognized cost of additional long-term equity investments and its Net carrying amount

shall be accounted in the profit or loss of current period. When the assets sold by the Company to associates or

joint ventures constitute an operation the difference between consideration paid and Net carrying amount of the

operation shall be recorded in profit or loss of current period. When the assets bought by the Company from

associates or joint ventures constitute an operation gain or loss related shall be recognized according to

Accounting Standard for Business Enterprises No.20-Business Combination.

The Company discontinues recognizing its share of net losses of the investee after the carrying amount of the

long-term equity investment together with any long-term interests that in substance form part of its net investment

in the investee is reduced to zero. If the Company has incurred obligations to assume additional losses of the

investee a provision is recognized according to the expected obligation and recorded as investment loss for the

period. Where net profits are subsequently made by the investee the Company resumes recognizing its share of

those profits only after its share of the profits exceeds the share of losses previously not recognized.

(3) Acquisition of non-controlling shares

When preparing consolidated financial statements differences between additional long-term equity investments

due to acquisition of non-controlling shares and attributable share of invested entity’s identifiable net assets

accumulated since acquisition date (or consolidation date) at shareholding ratio after acquisition shall adjust

capital reserve. If the capital reserve is insufficient to dilute the retained earnings shall be adjusted.

(1) Disposal of long-term equity investments

In consolidated f inancial statements when parent company partially disposes long-term equity investments in

subsidiaries without losing control the difference between proceeds received and attributable share of invested

entity’s identifiable net assets related to such investments sold shall be recorded in shareholder’s equity; when

parent company partially disposes long-term equity investments in subsidiaries with control lost adjustments shall

be made in accordance to Note III 6 (2).Under other circumstances for disposal of long-term equity investment the Company shall derecognize such

investment and recognize in profit or loss the difference between the proceeds received and the carrying amount

of the investment in the associates and joint ventures.In terms of long-term equity investments accounted under equity method the accounting method after disposal

shall not change. The Company shall account for proportionate amount previously recognized in other

comprehensive income in relation to that investment on the same basis as would have been required if the investee

had directly disposed of the related assets or liabilities. The Company shall also reclassify to current period profit

or loss the proportion of changes in shareholders’ equity that had previously been recognized excluding changes

arising from net gain or loss other comprehensive income profit or loss.In terms of long-term equity investments accounted under cost method the accounting method after disposal shall

not change. The Company shall account for proportionate amount previously recognized in other comprehensive

income arising from according equity method or recognition and measurement standard of financial instruments

before control of investees in relation to that investment on the same basis as would have been required if the

investee had directly disposed of the related assets or liabilities. The amount in other comprehensive income shall

be transferred to current period profit or loss proportionately.When the Company loses control over an investee due to partial disposal of its shares during preparation of

individual financial statements if the Company with retained shares after disposal can still joint control or

influence over the investee the Company shall account for the investment under equity method and retained

shares shall be adjusted as would have been required if the retained shares had been recorded on initial recognition

under equity method; if the Company with retained shares after disposal cannot joint control or influence over

the investee the Company shall account for the investment under the recognition and measurement standard of

financial instruments and recognize in profit or loss difference between the fair value of any retained shares and

carrying amount of the investment at the date of control lost. The Company shall account for amount previously

recognized in other comprehensive income arising from according equity method or recognition and

measurement standard of financial instruments before control of investee in relation to that investment on the

same basis as would have been required if the investee had directly disposed of the related assets or liabilities. If

equity method is used before control the Company shall also reclassify to current period profit or loss changes in

shareholders’ equity that had previously been recognized excluding changes arising from net gain or loss other

comprehensive income profit or loss. If retained shares are accounted under equity method other comprehensive

income and changes in shareholders’ equity shall be transferred to current period profit or loss proportionally; if

retained shares are accounted under cost method other comprehensive income and changes in shareholders’

equity shall be transferred to current period profit or loss at once.When the Company ceases to joint control or influence over investee due to partial disposal of its shares retained

shares shall be accounted for under recognition and measurement standard of financial instruments and difference

between fair value and carrying amount shall be recorded in current period profit or loss. The Company shall

account for amount previously recognized in other comprehensive income arising from equity method in relation

to that investment on the same basis as would have been required if the investee had directly disposed of the

related assets or liabilities. The Company shall also reclassify to current period profit or loss the proportion of

changes in shareholders’ equity that had previously been recognized excluding changes arising from net gain or

loss other comprehensive income profit or loss.When the Company ceases to control an investee due to partially dispose its shares by stages if transactions

belong to one package each transaction shall be accounted for as one event which lead to control cease. Prior to

control lost the difference between proceeds received and carrying amount of investment sold shall be recorded in

other comprehensive income first and transferred to current period profit or loss when control lost.

23. Investment real estate

The measurement mode of investment property

The measurement by the cost method

Depreciation or amortization method

Investment property refers to the properties held for the purpose of generating rent and/or capital appreciation.The company’s investment property includes the land use right rented and the constructions leased.The Company makes initial measurement at the costs that the properties is acquired and records as part of the

property costs the subsequent expenses that could bring economic benefit inflows and be measured reliab ly while

other subsequent expenses as part of current profit and loss. Such properties are depreciated or amortized in

accordance with the relevant regulations for fixed assets or intangible assets.

24. Fixed assets

(1) Recognition criteria for fixed assets

Fixed assets are tangible assets that are held for use in the production or supply of goods or services for rental to

others or for administrative purposes and have useful lives of more than one accounting year.

A fixed asset is recognized only when it is probable that economic benefits associated with the asset will flow to

the Company and the cost of the asset can be measured reliably. Fixed assets are initially measured at cost.

（2）Depreciation methods

Type Detail

Estimated useful

Life

Estimated residual value

rate

Depreciation rate(%)

House and Building Straight-line method Over the period of title

(the period specified on

5 3.17

the real estate title

certificate or land use

right certificate) or 30

years in case of no period

of title

Kiln Straight-line method 5 5 19

Platinum passage Straight-line method 3 95.50 1.5

Glass flat-panel and other

equipment

Straight-line method 15 5 6.33

other equipment Straight-line method 10 5 9.5

Transportation

equipment

Straight-line method 5 5 19

Temporary equipment Straight-line method

According to the length

of the project

0

Testing quality

inspection office

equipment tools and

other tool

Straight-line method 5 5 19

The platinum channel is mainly made up of precious metals such as platinum and rhodium which almost has no

losses. Hence the channel has a higher rate of net residual value.Thereinto the fixed asset whose asset impairment provis ion has been withdrawn should also have its accumulated

amount deducted to count and confirm the depreciation rate.When the year of the fixed asset comes to an end the Company will review its service life net residual value and

depreciation method. Should there be any differences between the estimated amount of service life and the

initially estimated one adjustment will be made for the service life; Should there be any differences between the

estimated amount of net residual value and the initially estimated one adjustment will be made for the estimated

one.

(3)Cognizance evidence and pricing method of financial leasing fixed assets

Fixed assets from finance lease are depreciated during the useful life if it is reasonable to determine that the

ownership could be obtained upon lease expiration; otherwise the Company chooses the shorter of the lease

period and the remaining useful life to depreciate the assets.When the year of the fixed asset comes to an end the Company will review its service life net residual value and

depreciation method. Should there be any differences between the estimated amount of service life and the

initially estimated one adjustment will be made for the service life; Should there be any differences between the

estimated amount of net residual value and the initially estimated one adjustment will be made for the estimated

one.

(4)Charge for Major Overhaul

The Company conducts regular checking on major overhaul fee incurred in the fixed asset and any parts of the

fee that have unambiguous evidence to indicate they conform with the condition for confirming fixed asset will be

counted into the fixed asset costs otherwise into the profit and loss of the current period. During the interval

period of regular major overhaul the fixed asset will be depreciated as before.

25. Construction in progress

The costs of construction in progress include all necessary project expenditures the borrowing expenses that

should be capitalized before the works reaches the expected usable status and other relevant expenses.

Construction in progress changes to fixed assets when it reaches the expected usable status.

26. Borrowing expenses

Borrowing costs include interest expenses amortization of discount or premium auxiliary expenses exchange

differences arising from foreign currency borrowings etc. Borrowing costs directly attributable to the acquis ition

construction or production of qualifying asset are capitalized when expenditures for such asset and borrowing

costs are incurred and activities relating to the acquisition construction or production of the asset that are

necessary to prepare the asset for its intended use or sale have commenced. Capitalization of borrowing costs

ceases when the qualifying asset being acquired constructed or produced becomes ready for its intended use or

sale. Other borrowing costs are recognized as an expense in the period in which they are incurred.Where funds are borrowed under a specific-purpose borrowing the amount of the capitalized interest is the actual

interest expense incurred on that borrowing for the period less any bank interest earned from depos iting the

borrowed funds before being used on the asset or any investment income on the temporary investment of those

funds. Where funds are borrowed under general-purpose borrowings the Company determines the amount of

interest to be capitalized on such borrowings by applying a capitalization rate to the weighted average of the

excess of cumulative expenditures on the asset over the amounts of specific -purpose borrowings. The

capitalization rate is the weighted average of the interest rates applicable to the general-purpose borrowings.

During the capitalization period exchange differences related to the principal and interest on a specific -purpose

borrowing denominated in foreign currency are capitalized as part of the cost of the qualifying asset. The

exchange differences related to the principal and interest on foreign currency borrowings other than a

specific-purpose borrowing are recognized as a financial expense when incurred.The qualifying assets to be capitalized are fixed assets investment properties and inventories which need to be

acquired constructed or produced through a long period of time in order to become ready for its intended use or

sale.If general borrowings are used to purchase construct or produce the capitalization eligible assets the borrowing

cost to capitalize is the weighted average of the accumulated assets expenditures in exceed of the special

borrowings times the capitalization rate of the used general borrowings which is determined by the weighted

average interest rate of the general borrowings.

27. Biological assets

Not applicable

28. Oil-gas assets

Not applicable

29. Assets of the right to use

Not applicable

30.Intangible assets

1. Valuation Method Service Life and Impairment Test of Intangible Assets

The Company makes initial measurements on intangible assets in terms of the costs and determines the useful life

when obtaining the assets. For intangible assets of a limited useful life from the time the assets are available for

use the Company adopts the amortization method that reflects realization of the expected economic benefits or

the straight-line amortization method if unable reliably to determine how to realize the expected economic

benefits; and no amortization are made for intangible assets of an unlimited useful life.

At the end of each year the Company reviews the useful life and amortization methods of intangible assets of a

limited useful life and makes adjustments and accounting treatment if different from the previous estimates.

For the intangible assets that are estimated to produce no more economic benefits in the future the Company

records the Net carrying amount of such assets all in current profit and loss.

2. Accounting Policy of Internal Research and Development Expenditure

The expenditures for internal research and development projects of an enterprise shall be classified into research

expenditures and development expenditures.The research expenditures shall be recorded into the profit or loss for the current period.

Development expenses can only be capitalized when the following conditions are satisfied: the technology is

feasible for use or sales; there is the intention to use or sell the intangible assets; it can be proven that the product

generated by the intangible assets is demanded or the intangible assets in demanded; if the intangible is used

internally it can be proven that it is useful; with necessary technical and financial resources and other resources to

complete the development of the intangible assets and the intangible assets can be used or sold; the development

expense can be reliably measured. If not the development expense is accounted into the current gain/loss account.If a research project meets the above-mentioned conditions and passes the technical and economic feasibility study

the project will enter the development stage.

31. Impairment of the long-term assets

Fixed assets construction in progress intangible assets with finite useful lives investment properties measured

using the cost model and long-term equity investments in subsidiaries joint ventures and associates are tested for

impairment if there is any indication that an asset may be impaired at the balance date. If there is an indication that

the asset may be impaired the Company shall estimate the recoverable amount and perform impairment test.Goodwill intangible assets with indefinite useful life and intangible assets not available for use shall be tested

each year no matter whether there is an indication that the asset may be impaired.If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying

amount a provision for impairment and an impairment loss are recognized for the amount by which the asset’s

carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less

costs to sell and the present value of the future cash flows expected to be derived from the asset. Fair value shall

be determined as the price as stipulated in the sales agreement in the orderly transaction. Where there is no sales

agreement but there is an active market of assets fair value shall be determined as the quoted price in active

market for identical assets or liabilities. Where there is no sales agreement and no active market of assets fair

value shall be estimated according to the best information available. The disposal expenses shall inc lude the

relevant legal expenses relevant taxes truckage as well as the direct expenses for bringing the assets into a

marketable state. The present value of the expected future cash flow of an asset shall be determined by the

discounted cash with an appropriate discount rate on the basis of the expected future cash flow generated during

the continuous use or final disposal of an asset. Provision for asset impairment is determined and recognized on

the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset the

recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest

group of assets that is able to generate independent cash inflows.Goodwill that is separately presented in the financial statements is tested at least annually for impairment

irrespective of whether there is any indication that it may be impaired. In conducting the test the carrying value of

goodwill is allocated to the related asset groups or groups of asset groups which are expected to benefit from the

synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset

group or group of asset groups including the goodwill allocated is lower than its carrying amount the

corresponding impairment loss is recognized. The impairment loss is first deducted from the carrying amount of

goodwill that is allocated to the asset group or group of asset groups and then deducted from the carrying

amounts of other assets within the asset groups or groups of asset groups in proportion to the carrying amounts of

other assets.Once the above asset impairment loss is recognized it will not be reversed for the value recovered in the

subsequent periods.

32.Long-term amortizable expenses

Long-term unamortized expenses are valued at the actual costs and amortized at average in an estimated beneficial

period of time. If those cannot benefit the Company in future accounting periods the remaining will be recorded

33.Constract Liabilities

Not applicable

34 Employees’ Remuneration

(1) Accounting methods for short-term compensation

Employee remuneration refers to all kinds of rewards or compensations given in return for employees’ services or

employment termination. It includes short-term compensation post-employment benefits demission benefits and

other long-term employee benefits as well as the benefits the Company provides to employees’ spouses children

dependents deceased employees’ family and other beneficiaries.The Company classifies into short-term compensation the employee remuneration that needs to be paid off

entirely in the twelve months following the reporting year the employees have provided their services which

excludes those given for employment termination. Short-term compensation includes payroll bonus allowances

and subsidies employee welfare social security expenses including medical insurance injury insurance and birth

insurance housing fund labor union and employee training expenditures short-term paid leaves short-term profit

share plans non-monetary benefits and other short-term rewards. It recognizes as liabilities the actual short-term

compensation incurred during the accounting period that the employees provide their services and records in

current profit and loss or the relevant asset costs. Non-monetary benefits are measured at the fair value.

(2) Accounting methods for post-employment benefits

Post-employment benefits are mainly defined contribution plans which include basic pension unemployment

insurance etc. The corresponding contributions are recorded in the relevant asset costs or current profit and loss

when incurred.

(3) Accounting methods for demission benefits

Demission benefits are the compensations paid to terminate employment before expiration or encourage

employees to accept lay-off.

(4) Accounting methods for other long-term employee benefits

Other long-term employee benefits are all other employee compensations than short-term compensation

post-employment benefits and demission benefits. They are long-term paid leaves long-term benefits for the

disabled long-term profit sharing plans etc.

35. Lease liabilit ies

Not applicable

36. Estimated Liabilities

The Company recognizes as estimated liabilities the obligations that meet the following conditions:

A. Current obligations being undertaken by the Company;

B. Fulf illment of the obligations that lead to cash flow out of the Company;

C. The amount of the obligations that can be measured reliably.

If it is expected that a third party can compensate for all or partial expenditures to pay off the recognized

estimated liabilities the compensation can be recognized separately as assets only when the Company is sure to

receive it. The amount to recognize cannot exceed the Net carrying amount of the recognized liabilities.

37. Share-based Payment

(1) Types of Share-based Payment

It is divided into equity-settled share-based payment and cash-settled share-based payment.

(2) Recognition of Equity Instruments’ Fair Value

For the granted equity instruments that there is an active market for e.g. options the Company determines the fair

value by reference to the quotation prevailing in the active market. For those that there is no active market for the

options pricing model is adopted to determine the fair value.

(3) Recognition Bas is for Best Estimates on Exercisable Equity Instruments

On each balance sheet date during the vesting period the Company makes best estimates based on the latest

number changes of its employees and adjusts the quantity of estimated exercisable equity. The final quantity of

estimated exercisable equity instruments should be consistent with that of the actual ones on vesting dates.38.Preferred shares perpetual capital securities and other financial instruments

Not applicable

39.Revenues

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

No

Whether implemented new revenue guidelines

□ Yes √ No

Income is an enterprise formed in daily activities will lead to an increase in shareholders' equity the total inflow

of capital has nothing to do with the economic interests of the owner of investment. The company involved in inco

me including revenue from selling goods income of labor transferring assets use right and

Construction contract income.

(1) Merchandise sales

The merchandises will be transferred to the purchaser when they meet with both the major risk and reward of the

merchandise ownership; The Company will no longer keep the continuous management right which is usually

related to the ownership and no longer carry out valid control on the merchandises sold; The amount of income

can be reliably calculated; Relevant economic interest can inflow; Relevant costs incurred or about to incur can be

reliably calculated to confirm the realization of the income of merchandise sales.Specific methods for revenue recognition: Companies which are engaged in photoelectric display materials

graphene and electronic communication products according to the stipulations in the sales contract will have

their revenue recognized after the goods have been delivered to clients and checked and accepted by clients;

Those which are engaged in passenger car business according to the agreement Confirm the sales revenue when

the goods are delivered to the customer and invoiced according to the contract. ; Those which are engaged in

export sales business will have their revenue recognized when receiving the export certificate(customs

declaration).

(2) Services

Service transaction can be estimated reliably meaning the following conditions are satisfied: amount of revenue c

an be measured reliably; the relevant economic benefits are likely to flow into the enterprise; completion of the tra

nsaction can be measured reliably; transactions that have occurred and will occur costs can be reliably measured

For the services that start and end during the same accounting year the revenue shall be recognized upon

completion; if the services end in a different accounting year and the service transaction results can be measured

reliably the Company adopts the completion percentage method to recognize the revenue on balance sheet dates;

if not measurable reliably the Company recognizes the revenue at the amount of the service costs that are incurred

and can be compensated expectedly; otherwise the service costs incurred are recognized as current expenses.The Company adopts the following methods to determine the completion progress of service transactions:

①measurement of the completed jobs; ②the proportion of the completed services to all; ③the proportion of the

costs incurred to the total.The company provides services at the balance sheet date the transaction can not be reliably estimated it shall be t

reated as follows: the costs incurred are expected to be compensated according to the amount of labor costs that h

ave occurred service revenue is recognized and the same amount knot turn labor costs; the costs incurred are not e

xpected to be compensated labor costs should be recognized in profit or loss has occurred no service revenue is r

ecognized.

Contract or agreement entered into with other companies including the sale of goods when providing services the

sale of goods and rendering of services can be measured in part to distinguish and separate should be part of the s

ale of goods as sale of goods the provision of services and as part of the provision of services deal with. Sales of

goods and rendering of services can not be distinguished or can be distinguished but can not be measured separat

ely should be part of the sale of goods and provision of services as part of the total sales of goods.If property management has provided service economic interest related to property management service is able to

flow into the enterprise and costs related to the property management service can be reliably calculated the

realization of property management income will be confirmed.(3) Use Rights of Assets on Alienation

The right of using transferred asset includes lease earning intermediate business income interest income and

usage fee income.When the right of use the transferred asset can at the same time conform with the condition that relevant interest

income is likely to inflow and the income amount can be reliably calculated the income of the right of use the

transferred asset can be confirmed. The interest income will be counted and confirmed according to the time and

actual interest rate of the enterprise’s monetary capital used by others; The charge for use will be counted and

confirmed according to charging time and method stipulated in the relevant contracts or agreements.

(4)Construction Contracts

Under the situation where the result of contract forming can be reliably estimated the contract income and

contract costs will be confirmed by the contract’s completion percentage on the balance sheet date. The contract’s

completion percentage will be confirmed by the proportion that the accumulated contract costs actually incurred

occupies the predicted total contract cost

That the result of construction contract can be reliably estimated refers to that the following can be conformed

with at the same time: 1)The total income of contract can be reliably calculated; 2)The economic interest related

to the contract has major possibility to flow into the enterprise; 3)The contract costs actually incurred can be

clearly distinguished and reliably calculated; 4)The completion progress of contract and the costs which still needs

to incurred for completing the contract can be reliably confirmed.If the result of construction contract can not be reliably estimated while its costs can be recoverable the contract

income will be confirmed according to the actual contract costs which can be recoverable and the contract costs

will be confirmed the contract fee at its current period; The contract costs which can not be recoverable will be

confirmed as not the cost income but the cost fee when the recovery incurs.If the uncertainties that result construction contract to be not reliably estimated no longer exist the income and fee

related to the construction contract will be confirmed according to the completion percentage.If the predicted total contract cost is more than the total contract income the predic ted loss be will confirmed as

the current fee.The accumulated cost of the construction contract which has incurred the accumulated gross profit (loss) has been

confirmed and the payment amount which has been settled will be presented as the net amount after offset in the

balance sheet. The part that the sum of the accumulated cost incurred and the accumulated gross profit (loss)

confirmed more than the payment amount settled will be presented as the one which has been completed but yet to

be settled.The part where the sum that the payment amount settled of the construction contract is more than the

accumulated cost incurred and the accumulated gross profit (loss) confirmed will be presented as the one which

has been settled but yet to be completed.

40.Governmental subsidy

(1)Basis and accounting methods for assets related government subsidies

Government subsidy means the Company gratuitously obtains monetary assets or non-monetary assets from the

government not including the capital into which the government invests as a investor who has relevant ownership

interest. Government subsidies are divided into the subsidy related to assets and the other related to earnings.Government subsidies related to monetary assets will be measured according to the amount received or the

amount receivable. Those which related to non-monetary assets will be measured according to fair value; For any

fair value which can not be reliable to be obtained the assets will be measured according to the nominal amount

and the one measured according to the nominal amount will be directly counted into the current profits and losses.The government grants pertinent to assets are recognized as deferred income and are credited to profit or loss by

stages in accordance with a reasonable and systematic method within the useful life of the pertinent assets. If the

pertinent assets are sold transferred scrapped or destroyed before the end of their useful life the non-allocated

pertinent deferred income balance shall be transferred to the profit or loss of the period of assets disposal and the

recognized government grant needs to be refunded then it shall write down the carrying amount of the relevant

deferred income and the excess part shall be included in the current profit and loss.

2. Judgment Basis and Accounting Treatment Method of Government subsidy related to Income

The government grants pertinent to income that are used to compensate the relevant costs or losses of the

subsequent period of the enterprise are recognized as deferred income and are credited to the current profit or loss

for the period when the relevant costs expenses or losses are recognized; those government grants used for

compensating the related expenses or losses incurred to the enterprise shall be directly inc luded in the current profits

and losses.

For the government subsidy which includes both the assets related part and the income related part the different

parts are treated separately; if it is difficult to distinguish the whole is classified as the government subsidy related

to the income.Government subsidies related to the daily activities of the company shall be included in other earnings in

accordance with the substance of the economic business. Government subsidies not related to the daily activities

of the company shall be included in the non-operating income and expenditure.

41. Deferred income tax assets/Deferred income tax liability

The balance between the Net carrying amount and the tax basis of some items of assets and liabilities as well as

the temporary differences issued as the balance between the Net carrying amount and the tax basis of the tax basis

items that unrecognized as assets and liabilities but can be determined as per the provisions of tax law which shall

be determined as the deferred income tax assets and the deferred income tax liabilities in accordance with the

balance sheet debt law.Taxable temporary differences related to the initial recognition of goodwill as well as the initial recognition of an

asset or liability in a transaction that neither belongs to a business consolidation nor affects the accounting profit

and taxable income (or deductible loss) when it happens the relevant deferred income tax liabilities shall not be

recognized. In addition as for taxable temporary differences associated with investments in subsidiaries

associates and joint ventures if the Company could control the reverse time of such differences and such

differences cannot be reversed in the foreseeable future the relevant deferred income tax liabilities also shall not

be recognized. Apart from the above-mentioned exceptional cases the Company recognizes all other deferred

income tax liabilities caused by taxable temporary differences.

Deductible temporary differences related to the initial recognition of an asset or liability in a transaction that

neither belongs to a business consolidation nor affects the accounting profit and taxable income (or deductible

loss) when it happens the relevant deferred income tax assets shall not be recognized. In addition as for

deductible temporary differences associated with investments in subsidiaries associates and joint ventures if such

differences cannot be reversed in the foreseeable future or are not likely to obtain the taxable income to deduct the

deductible temporary differences of the taxable income the relevant deferred income tax liabilities shall not be

recognized. Apart from the above-mentioned exceptional cases the Company recognizes other deferred income

tax liabilities caused by deductible temporary differences within the limit of likely obtained taxable income that

can be used to deduct the deductible temporary differences of the taxable income.The corresponding deferred tax assets of deductible loss and tax reduction that can be carried forward during

subsequent years shall be recognized within the limit of likely obtained future taxable income that can be used to

deduct the deductible loss and tax reduction.

As per the provisions of tax law the deferred income tax assets and deferred income tax liabilities shall be

measured at the applicable tax rates used during the period of expectation recovery of relevant assets or pay-off

relevant liabilities at the balance sheet date.The Net carrying amount of the deferred income tax assets shall be re-checked at the balance sheet date. The Net

carrying amount of the deferred income tax assets shall be written-down if it is unlikely to obtain sufficient

taxable income in the future to deduct the benefit of the deferred tax assets and the written-down amount shall be

carried forward if it is likely to obtain sufficient taxable income.42.Operational leas ing

（1）Accounting of operational leasing

The Company will transfer substantially all the risks and rewards of ownership of an asset lease is recognized as a

finance lease. Other forms of lease besides financial leasing are considered as operating leasing.Lease payments under an operating lease shall be accounted into the relevant asset cost or current profit or loss

over the lease term on a straight-line basis.

(2) Accounting Method for Financing Leases

At the commencement of the lease term an amount equal to the lower of the fair value of the leased asset and the

present value of the minimum lease payments shall be regarded as the recorded value of the leased assets and an

amount equal to the minimum lease payments shall be recognized as a long-term recorded value of the leased

assets of payables. The balance between the recorded amount of the leased asset and the recorded amount of the

payable shall be accounted for as unrecognized finance charge.

43. Other significant accounting policies and estimates

（1）Discontinued Operation

①Discontinued operation means enterprises which can meet one of the following conditions and can be

distinguished into a constituent part separately and this part has been disposed or divided into a on-sales category.②This part is a one of the related parts which proposes to dispose an independent main business or an

independent main business area.③This part is a subsidiary acquired from being specifically for reselling.

For accounting treatment methods for discontinued operation see the relevant descriptions at Article 13-

Possession of On-Sales Asset in Note III

(2) Share Repurchase

Share repurchase refers to the behavior of repurchasing a certain sum of Company's outstanding stocks from the

stock market by cash and other methods; and the behavior that the incentive objects of restricted stocks fail to

submit a written application to the Board in the prescribed period shall be deemed as voluntarily give up the

unlocking the corresponding restricted stocks shall no longer be unlocked and shall be logged out after the

repurchase at the awarded price by the Company. If any period fails to meet the unlocking conditions within the

unlocking period the restricted stock with the unlocking application qualification in the current per iod cannot be

unlocked and shall be logged out after the repurchase by the Company.Upon the legal procedures and reporting approval and through repurchasing the Company’s stocks the

Company’s reduction of capital is conducted according to the total nominal value of written-off stocks. The part of

price paid to stock repurchase (including transaction expenses) that excesses the total nominal amount shall offset

the capital reserve (share premium) earned surplus and undistributed profits in sequence; The part of price paid to

stock repurchase (including transaction expenses) that less than the total nominal amount shall increase the capital

reserve (share premium).

44.Change of main accounting policies and estimations

(1)Change of main accounting policies

√ Applicable □ Not applicable

Contents and causes for changes of

accounting policy

Approval procedures Remarks

On April 30 2019 the Ministry of Finance

issued the Notice on Revising and Issuing

the Format of Financial Statements for

General Enterprises in 2019 (CK [2019]

No.6) which revised the format of

financial statements for general enterprises

The company will hold the 3rd meeting of

Ninth board meeting and the 2nd meeing

of ninth meeing board of supervisors on

August 302019 to review and approve the

Notices on the change of accounting

and is applicable to the interim financial

statements and annual financial statements

for non-financial enterprises in 2019 and

the financial statements for subsequent

periods that implement the Accounting

Standards for Enterprises.policy.On March 31 2017 the Ministry of

Finance issued revised Accounting

Standards for Business Enterprises

No.22-Recognition and Measurement of

Financial Instruments (CK [2017] No.7)

Accounting Standards for Business

Enterprises No.23-Transfer of Financial

Assets (CK [2017] No.8) and Accounting

Standards for Business Enterprises

No.24-Hedge Accounting (CK [2017]

No.9). The revised Accounting Standards

for Business Enterprises

No.37-Presentation of Financial

Instruments (CK [2017] No.14)

(collectively referred to as "New Financial

Instrument Standards") was issued on May

2 2017 requiring domestic listed

enterprises to implement it from January 1

2019. The revised Accounting Standards

for Business Enterprises No.7-Exchange of

Non-monetary Assets (CK [2019] No.8) is

implemented on June 10 2019 and the

revised Accounting Standards for Business

Enterprises No.12-Debt Restructuring (CK

[2019] No.9) is implemented on June 17

2019.

The company will hold the 3rd meeting of

Ninth board meeting and the 2nd meeing

of ninth meeing board of supervisors on

August 302019 to review and approve the

Notices on the change of accounting

policy.

Accounting policy changes arising from the implementation of the new accounting standards for bus iness

enterprises

On April 30 2019The Ministry of Finance issued the Notice on Amending the Format of Financial Statements of

General Enterprises in 2019 (CK No. [2019] 6.)

The impact of the company's implementation of this accounting policy on the items and amounts presented in the

previous financial statements is as follows：

Name of affected item in the

statements

Affected amount of December 31 2018 / 2018

Increase + / decrease - -

Notes receivable +499781503.17

Account receivable +14352781895.39

Notes receivable & account

receivable

-14852563398.56

Notes payable +1643167026.68

Account payable +8632927106.20

Notes payable & Account

payable

-10276094132.88

(2) Change of main accounting estimations

□Applicable√ Not applicable

（3）Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New Standards

Governing Financial Instruments Revenue or Leases

√ Applicable □ Not applicable

Consolidated balance sheet

In RMB

Items December 31 2018 January 1 2019 Adjustment amount

Current asset：

Cash and bank balances 19807094397.16 19807094397.16

Settlement provision

Outgoing call loan

Transactional financial assets

Financial assets measured

at fair value with variations

accounted into current

income account

Derivative financial assets

Notes receivable 499781503.17 499781503.17

Account receivable 14352781895.39 14352781895.39

Financing of receivables

Prepayments 5215414219.51 5215414219.51

Insurance receivable

Reinsurance receivable

Provisions of Reinsurance

contracts receivable

Other account

receivable

1125991020.55 1125991020.55

Including：Interest

receivable

56811961.67 56811961.67

Dividend

receivable

Repurchasing of

financial assets

Inventories 3510786666.85 3510786666.85

Contract assets

Assets held for sales 119355435.58 119355435.58

Non-current asset due within

1 year

Other current asset 809360778.49 809360778.49

Total of current assets 45440565916.70 45440565916.70

Non-current assets：

Loans and payment on

other’s behalf disbursed

Debt investment

Available for sale of

financial assets

243158605.30 -243158605.30

Other investment on

bonds

Expired investment in

possess

Long-term receivable 344430815.68 344430815.68

Long term share equity

investment

2174347969.22 2174347969.22

Other equity instruments

investment

Other non-current financial

assets

243158605.30 243158605.30

Property investment 686993881.02 686993881.02

Fixed assets 9634463323.77 9634463323.77

Construction in progress 5013941980.61 5013941980.61

Production physical

assets

Oil & gas assets

Use right assets

Intangible assets 1146949745.14 1146949745.14

Development expenses 37122235.94 37122235.94

Goodwill 2835672586.90 2835672586.90

Long-germ expenses to be

amortized

21884204.82 21884204.82

Deferred income tax asset 533094627.68 533094627.68

Other non-current asset 4463496966.82 4463496966.82

Total of non-current assets 27135556942.90 27135556942.90

Total of assets 72576122859.60 72576122859.60

Current liabilities

Short-term loans 8361106651.33 8361106651.33

Loan from Central Bank

Borrowing funds

Transactional financial

liabilities

Financial liabilities measured

at fair value with variations

accounted into current

income account

Derivative financial

liabilities

Notes payable 1643167026.68 1643167026.68

Account payable 8632927106.20 8632927106.20

Advance receipts 1402283662.37 1402283662.37

Selling of repurchased

financial assets

Deposit taking and

interbank deposit

Entrusted trading of

securities

Entrusted selling of securities

Employees’ wage payable 238146977.17 238146977.17

Tax payable 817173127.12 817173127.12

Other account

payable

2089603676.60 2089603676.60

Including：Interest

payable

117554951.58 117554951.58

Dividend

payable

Fees and commissions

payable

Reinsurance fee payable

Contract Liabilities

Liabilities held for sales

Non-current liability due

within 1 year

3697392864.91 3697392864.91

Other current liability 315193128.73 315193128.73

Total of current liability 27196994221.11 27196994221.11

Non-current liabilities：

Reserve fund for

insurance contracts

Long-term loan 2741589600.00 2741589600.00

Bond payable 5630818825.32 5630818825.32

Including：preferred stock

Sustainable debt

Lease liability

Long-term

payable

2644309592.95 2644309592.95

Long-term remuneration

payable to staff

Expected liabilities 99765750.04 99765750.04

Deferred income 676146399.31 676146399.31

Deferred income tax

liability

55192983.97 55192983.97

Other non-current liabilities 108000000.00 108000000.00

Total non-current liabilities 11955823151.59 11955823151.59

Total of liability 39152817372.70 39152817372.70

Owners’ equity

Share capital 5730250118.00 5730250118.00

Other equity instruments

Including：preferred stock

Sustainable debt

Capital reserves 21786233393.78 21786233393.78

Less：Shares in stock 4422320.00 4422320.00

Other comprehensive income -29175.80 -29175.80

Special reserve 12614331.35 12614331.35

Surplus reserves 245507019.95 245507019.95

Common risk provision

Retained profit 4750977557.86 4750977557.86

Total of owner’s equity

belong to the parent company

32521130925.14 32521130925.14

Minority shareholders’ equity 902174561.76 902174561.76

Total of owners’ equity 33423305486.90 33423305486.90

Total of liabilities and

owners’ equity

72576122859.60 72576122859.60

Notes

According to the Accounting Standards for Business Enterprises No.22-Recognition and Measurement of

Financial Instruments (CK [2017] No.7) the Accounting Standards for Business Enterprises No.23-Transfer of

Financial Assets (CK [2017] No.8) the Accounting Standards for Business Enterprises No.24-Hedge Accounting

(CK [2017] No.9) Accounting Standard for Business Enterprises No.37-Presentation of Financial Instruments

(CK [2017] No.14) (hereinafter referred to as the new financial instruments standards) issued by the Ministry of

Finance in 2017 in combination with the company's business mode of managing financial assets and the

contractual cash flow characteristics of financial assets the original available-for-sale financial assets are adjusted

to be accounted for as financial assets measured at fair value with changes included in current profits and losses.Since the period is more than one year it is listed as "other non-current financial assets" in the report.

Balance sheet of Parent Company

In RMB

Items December 31 2018 January 1 2019 Adjustment amount

Current asset：

Cash and bank balances 9732302654.23 9732302654.23

Transactional financial assets

Financial assets measured

at fair value with variations

accounted into current

income account

Derivative financial assets

Notes receivable 50000.00 50000.00

Account receivable 176563926.23 176563926.23

Financing of receivables

Prepayments 2008364.11 2008364.11

Other account receivable 6281675319.27 6281675319.27

Including：Interest

receivable

7521489.86 7521489.86

Dividend

receivable

500000000.00 500000000.00

Inventories 269759580.95 269759580.95

Contract assets

Assets held for sales

Non-current asset due

within 1 year

Other current asset 148973.38 148973.38

Total of current assets 16462508818.17 16462508818.17

Non-current assets：

Debt investment

Available for sale of

financial assets

129500056.00 -129500056.00

Other investment on

bonds

Expired investment in

possess

Long-term receivable

Long term share equity

investment

26504735200.89 26504735200.89

Other equity instruments

investment

Other non-current financial

assets

129500056.00 129500056.00

Property investment

Fixed assets 160867244.63 160867244.63

Construction in

progress

Production physical

assets

Oil & gas assets

Use right assets

Intangible assets 9339387.26 9339387.26

Development expenses

Goodwill

Long-germ expenses to be

amortized

Deferred income tax asset 119964967.85 119964967.85

Other non-current asset

Total of non-current assets 26924406856.63 26924406856.63

Total of assets 43386915674.80 43386915674.80

Current liabilities

Short-term loans 4278000000.00 4278000000.00

Transactional financial

liabilities

Financial liabilities measured

at fair value with variations

accounted into current

income account

Derivative financial

liabilities

Notes payable

Account payable 11500796.58 11500796.58

Advance receipts 1991498.78 1991498.78

Contract Liabilities

Employees’ wage payable 4484401.86 4484401.86

Tax payable 17959833.09 17959833.09

Other account

payable

3656725253.66 3656725253.66

Including：Interest

payable

97197464.99 97197464.99

Dividend

payable

Liabilities held for sales

Non-current liability due

within 1 year

1533383333.28 1533383333.28

Other current liability

Total of current liability 9504045117.25 9504045117.25

Non-current liabilities：

Long-term loan

Bond payable 5630818825.32 5630818825.32

Including：preferred stock

Sustainable debt

Lease liability

Long-term payable

Long-term remuneration

payable to staff

Expected liabilities

Deferred income

Deferred income tax

liability

Other non-current liabilities

Total non-current liabilities 5630818825.32 5630818825.32

Total of liability 15134863942.57 15134863942.57

Owners’ equity

Share capital 5730250118.00 5730250118.00

Other equity instruments

Including：preferred stock

Sustainable debt

Capital reserves 21832453907.50 21832453907.50

Less：Shares in stock 4422320.00 4422320.00

Other comprehensive income

Special reserve

Surplus reserves 226517795.62 226517795.62

Retained profit 467252231.11 467252231.11

Total of owners’ equity 28252051732.23 28252051732.23

Total of liabilities and

owners’ equity

43386915674.80 43386915674.80

Notes

According to the Accounting Standards for Business Enterprises No.22-Recognition and Measurement of

Financial Instruments (CK [2017] No.7) the Accounting Standards for Business Enterprises No.23-Transfer of

Financial Assets (CK [2017] No.8) the Accounting Standards for Business Enterprises No.24-Hedge Accounting

(CK [2017] No.9) Accounting Standard for Business Enterprises No.37-Presentation of Financial Instruments

(CK [2017] No.14) (hereinafter referred to as the new financial instruments standards) issued by the Ministry of

Finance in 2017 in combination with the company's business mode of managing financial assets and the

contractual cash flow characteristics of financial assets the original available-for-sale financial assets are adjusted

to be accounted for as financial assets measured at fair value with changes included in current profits and losses.Since the period is more than one year it is listed as "other non-current financial assets" in the report.

（4）Retrospective Restatement of Previous Comparative Data due to the First Execution of any New Standards

Governing Financial Instruments or Leases

√ Applicable □Not applicable

From January 1 2019 the company starts to implement the new financial instrument standards. This accounting

policy change does not involve retrospective adjustment of previous years and does not affect the company's

relevant financial indicators in 2018.

45.Other

1. Income tax

Income tax is composed of current income tax and deferred income tax. All taxes and expenses are written in

current profit and loss except those for reputation adjustment in enterprise combination or trades directly counted

into shareholder’s equity or some deferred income tax which is counted in shareholder’s equity.

Current income tax is payable tax amount currently calculated as current taxable income. Payable tax amount is

calculated by adjusting pre-tax accounting profit specified in related tax laws.The company confirms deferred income tax by adopting liability method in Balance Sheet based on the temporary

difference between Net carrying amount of asset and liability in Balance Sheet and tax base.Temporary difference of items of payable taxes are confirmed to be related deferred income tax liabilities except

the temporary difference of payable taxes are made in the following conditions:

A. Initial confirmation of reputation or that of assets or liabilities made in trades with these features: the trade is

not enterprise combination and it neither influences accounting profit nor amount of payable tax when it happens.

B. As for temporary difference of items of payable taxes related to investment to subsidiaries joint enterprises and

associated enterprises. The temporary difference return time may be controlled and may not return in foreseeable

future.On the date of balance sheet the company will calculate deferred income tax assets and deferred income tax

liabilities according to applicable tax between expected recovered assets and paid liabilities and also the company

will reflect the income tax influence in ways of expected recovered assets and paid liabilities on the date of

balance sheet.On the date of balance sheet the company will check the Net carrying amount of the deferred income tax assets. If

it was unlikely to obtain sufficient taxable income taxes to offset benefit of deferred income tax assets while it

was likely to obtain sufficient taxable income carrying amount of deferred income tax assets shall be written

down.

2. Safety production expenses

The company counts and draws safety production expenses specified in Notif ication on Printing and Distributing

and Administrative Measures on Drawing and Using Enterprise’s Safety Production Expenses issued by Ministry

of Finance and State Administration of Work Safety. Safety production expenses is specialized in improving safe

production.Safety production expense is counted into related product’s cost or current profit and loss. At the same time it is

also counted into specialized reserve. In case the safety production expense to be delivered is used in expense we

directly consume specialized reserve. In case safety production expense to be delivered belongs to fixed asset and

is spent in construction in-process confirm it as fixed asset when the project is completed safely and is ready to

put into use. Meantime consume specialized reserve as the cost forming into fixed asset and confirm it as

equivalent accumulated depreciation.

3. Judgement and Estimation for Significant Accounting

During the process of applying accounting policies due to to inherent uncertainties in business activities the

Company requires judgement estimation and assumption for the Net carrying amount of the report items which

can not be measured accurately. Such judgement estimation and assumption is made bas ing on the previous

experience of the Company’s management as well as the consideration of other relevant factors. And the reported

amount of revenue cost and asset as well as the disclosure of balance sheet date and the liability will be

influenced by such judgement estimation and assumption; However there may be differences between the actual

result caused by the uncertainties of such estimation and the current estimation of the Company’s management

thereby signif icant adjustment will be made for the assets influenced in the coming future and the indebted Net

carrying amount.The Company will periodically recheck the above-mentioned judgement estimation and assumption based on

going concern. The changes of accounting estimation only influence those which are influenced at the current

period and of which the influence number will be confirmed at that current period; For those changes which have

influence both at the current period and the future period the influence number of them will be confirmed at that

current period and the future period.On balance sheet date the signif icant fields where the Company needs to make judgement estimation and

assumption for the financial statement items will be as follows:

(1)Revenue Recognition-Construction Contract

When the result of construction contract can be estimated reliably the Company will confirm the contract revenue

on balance sheet date by adopting Percentage of Completion Method. The percentage of completion will be

confirmed according to Article 26-Revenue Recognition Principle in Note III and it will be totalized in each

accounting year of executing this contribution contract.Significant judgement needs to be made when confirming the percentage of completion the contract cost occurred

the total predicted revenue of the contract and total cost of the contract as well as the recoverability of the

contract. The project management will make judgement mainly by means of previous experience and work. The

total predicted revenue and total cost of the contract as well as the estimation changes of contract execution result

will probably have effect on the operation revenue the operation cost at the current changing period or at the

subsequent period as well as the profits and losses during that period and significant influence is likely to be

formed due to the above-mentioned changes.

(2) Provision for bad debts

The Company uses the allowance method to account for bad debt losses in accordance with the accounting policy

for accounts receivable. Impairment of accounts receivable is based on the assessment of the recoverability of

accounts receivable. The identification of impairment of accounts receivable requires management's judgment and

estimation. The difference between the actual result and the original estimate will affect the Net carrying amount

of accounts receivable and the provision or reversal of bad debt provision for accounts receivable during the

period in which the estimate is changed.

(3) Inventory falling price preparation

According to the inventory accounting policy the Company measures the lower of cost and net realizable value

and makes provision for inventory devaluation for inventory whose cost exceeds net realizable value obsolete and

unsalable. The depreciation of inventories to net realizable value is based on the assessment of the saleability of

inventories and their net realizable value. Identif ication of impairment of inventories requires management to

make judgments and estimates on the basis of obtaining conclusive evidence and considering the purpose of

holding the inventory and the influence of events after the balance sheet date. The difference between the actual

result and the original estimate will affect the Net carrying amount of inventory and provision or reversal of

inventory depreciation provis ion during the period in which the estimate is changed.

(4) Depreciation and amortization

After considering the salvage value of investment real estate fixed assets and intangible assets the company shall

accrue depreciation and amortization on a straight-line basis over its useful life. The Company regularly reviews

the service life to determine the amount of depreciation and amortization expenses to be included in each

reporting period. The service life is determined by the Company based on past experience of similar assets and

combined with expected technical updates. If there has been a signif icant change in previous estimates the

depreciation and amortization expense will be adjusted in the future period.

(5) Deferred income tax assets

Insofar as it is highly probable that there will be sufficient taxable profits to offset losses the company will

recognize deferred income tax assets for all unused tax losses. This requires the management of the company to

use a large number of judgments to estimate the time and the amount of future taxable profits and combine the tax

planning strategy to determine the amount of deferred income tax assets that should be recognized.

(6) Income tax

In the normal business activities of the company there are certain uncertainties in the final tax treatment and

calculation of some transactions. It requires the approval of the tax authorities on whether some items can be

listed as deductible in the profit before tax. If there is a difference between the final recognized result of these

taxation matters and the originally estimated amount the difference will have an impact on the income tax and the

deferred income tax of that period with the final recognition being made.VI. Taxation

1.Main categories and rates of taxes

Taxes Tax references Applicable tax rates

VAT Sales revenue 3%10%11%16%17%

Consumption tax

Sales of taxable consumer goods or

sales of taxable consumer goods.Not applicable

Urban construction tax Turnover tax to be paid allowances 5%7%

Enterprises income tax Taxable income 9%10%15%16.5%25%

VAT Technical services revenue 6%

Educational surtax Turnover tax to be paid allowances 3%

Local education surcharge Turnover tax to be paid allowances 1%2%

2.Tax Preference

① On September 11 2018The Company was rated as the national high-tech enterprise with validity of 3 years.

As per the provisions of enterprise income tax law the Company adopts 15% enterprise tax rate applicable for

high-tech enterprises for three years since 2018.②On July 20 2017Wuhu Tunghsu Optoelectronic Technology Co. Ltd. was rated as the national high-tech

enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company adopts 15%

enterprise tax rate applicable for high-tech enterprises for three years since 2017.③On October 21 2016Wuhu Tunghsu Optoelectronic Equipment Technology Co. Ltd. was rated as the national

high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company

adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016.④On November 21 2016Shijiazhuang Tunghsu Optoelectronic Equipment Technology Co. Ltd. was rated as the

national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the

Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016.

⑤On November 29 2018Zhengzhou Xufei Optoelectronic Technology Co. Ltd. was rated as the national

high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company

adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2018.⑥On November 21 2016Shijiazhuang Xuxin Optoelectronic Technology Co. Ltd. was rated as the national

high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company

adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016.⑦On November 30 2016Jiangsu Jixing New Material Co. Ltd. was rated as the national high-tech enterprise

with validity of 3 years. As per the provisions of enterprise income tax law the Company adopts 15% enterprise

tax rate applicable for high-tech enterprises for three years since 2016.⑧On November 24 2016Shanghai Tanyuan Huigu New Material Technology Co. Ltd. was rated as the national

high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company

adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016.⑨On December 1 2016Mingshuo(Beijing) Electric Technology Co. Ltd. was rated as the national high-tech

enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company adopts 15%

enterprise tax rate applicable for high-tech enterprises for three years since 2016.⑩On October 25 2017Beijing Xutan New Material Technology Co. Ltd. was rated as the national high-tech

enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company adopts 15%

enterprise tax rate applicable for high-tech enterprises for three years since 2017.?On November 17 2017Suzhou Tengda Optical Technology Co. Ltd. was rated as the national high-tech

enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company adopts 15%

enterprise tax rate applicable for high-tech enterprises for three years since 2017.?On December 8 2016Sichuan Xuhong Optoelectronic Technology Co. Ltd. was rated as the national

high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company

adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016.?On November 24 2016Shanghai Sunlong Bus Co. Ltd. was rated as the national high-tech enterprise with

validity of 3 years. As per the provisions of enterprise income tax law the Company adopts 15% enterprise tax

rate applicable for high-tech enterprises for three years since 2016.?On December 8 2016Chengdu Tunghsu Intelligence Technology Co. Ltd. was rated as the national high-tech

enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company adopts 15%

enterprise tax rate applicable for high-tech enterprises for three years since 2016.

?Daosui Group Tibet Construction Development Co. Ltd based on the “Notice of the People's Government ofTibet Autonomous Region on Issuing the Measures for the Implementation of Enterprise Income Tax Policy ofTibet Autonomous Region” (Zangzhengfa [2014] No. 51) policy enjoys the corporate income tax at the rate of

15% for the strategy of developing the western region and is exempted from the 40% tax share that originally

belongs to the local place thus actually implementing the income tax rate of 9%.?Guangxi Sunlong Automobile Manufacturing Co. Ltd based on the Guangxi People’s Government’s Circular

on the Continuation and Revision of Certain Policies Concerning the Promotion of the Open Development of the

Guangxi Beibu Gulf Economic Zone” (Gui Zhengfa [2014] No. 5) policy enjoys the corporate income tax at the

rate of 15% for the strategy of developing the western region and is exempted from the 40% tax share that

originally belongs to the local place thus actually implementing the income tax rate of 9%.?Harbin Sunlong New Energy Automobile Sales Co. Ltd based on the “Notice of Ministry of Finance State

Administration of Taxation on the Relevant Issues Concerning the Preferential Policies for Small-scaleLow-profit Enterprises” (Cai Shui [2011] No. 117) and the 28

thclause of “The People's Republic of China

Enterprise Income Tax Law”- that the small profit-making enterprise that meets the requirements enjoys a

reduction of 20% tax rate on the corporate income tax actually implements the income tax rate of 10%.?On October 12 2018Tunghsu(Yingkou) Optoelectronic Display Co. Ltd. was rated as the national high-tech

enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company adopts 15%

enterprise tax rate applicable for high-tech enterprises for three years since 2018.?On November 12 2018Chongqing Jinghuateng Optoelectronic Technology Co. Ltd. was rated as the national

high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company

adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2018.?On November 30 2018Huzhou Mingshuo Optoelectronic Technology Co. Ltd. was rated as the national

high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company

adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2018.? On November 30 2018Jiangsu Tunghsu Yitai Intelligence Equipment Co. Ltd. was rated as the national

high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law the Company

adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2018.

3.Other

VII. Notes of consolidated financial statement

1. Cash and Bank Balances

In RMB

Items Year-end balance Year-beginning balance

Cash 3242652.56 2593055.78

Bank deposit 19052380592.27 19263011567.36

Other monetary assets 552537088.08 541489774.02

Total 19608160332.91 19807094397.16

Including：Total amount deposited

abroad

3087696.74 2307958.14

Other note

Note :The amount of restricted cash and bank balances by the end of the period is RMB 4221140438.53. The main

types are acceptance bill deposit time deposit certificate and letter of guarantee deposit.

2. Transactional financial assets

In RMB

Items Year-end balance Year-beginning balance

Financial assets measured at fair value

through profit or loss

3000000.00

Of which ：

National debt 3000000.00

Of which ：

Total 3000000.00

Other notes

3.Derivative financial assets

4. Notes receivable

（1）Classif ication Notes receivable

In RMB

Items Year-end balance Year-beginning balance

Bank acceptance 53936785.03 142810310.93

Trade acceptance 7257525.67 356971192.24

Total 61194310.70 499781503.17

In RMB

Category

Year-end balance Year-beginning balance

Book balance

Provision for bad

debts Net

carrying

amount

Book balance

Provision for bad

debts Net

carrying

amount Amount

Proportion（%）

Amount

Proportion（%）

Amount

Proportion（%）

Amount

Proportion（%）

Of which ：

Accrual of bad debt

provision by

portfolio

611943

10.70

100.00% 0.00%

6119431

0.70

4997815

03.17

100.00% 0.00%

4997815

03.17

Of which ：

Bank acceptance

539367

85.03

88.14% 0.00%

5393678

5.03

1428103

10.93

28.57% 0.00%

1428103

10.93

Trade acceptance

725752

5.67

11.86% 0.00%

7257525

.67

3569711

92.24