Changchai Company Limited Third Quarterly Report 2023

Stock Code: 000570 200570 Stock Name: Changchai Changchai-B Announcement No. 2023-067

CHANGCHAI COMPANY LIMITED

THIRD QUARTERLY REPORT 2023

Changchai Company Limited (hereinafter referred to as the “Company”) and all the

members of the Company’s Board of Directors hereby guarantee that the contents of this

Report are true accurate and complete and free of any misrepresentations misleading

statements or material omissions.Important Notes:

1. The Board of Directors the Supervisory Committee as well as the directors supervisors and senior

management of the Company hereby guarantee that the contents of this Report are true accurate and complete

and free of any misrepresentations misleading statements or material omissions and collectively and

individually accept legal responsibility for such contents.

2. The Company’s legal representative General Manager and head of the financial department (equivalent to

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

complete.

3. Indicate whether the financial statements in this Report have been audited by an independent auditor.

□ Yes □ No

I Key Financial Information

(I) Key Accounting Data and Financial Indicators

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

Q3 2023 YoY change (%) Q1-Q3 2023 YoY change (%)

Operating revenue

458557165.00-15.95%1809074804.854.95%

(RMB)

Net profit attributable to

the listed company’s 24931699.23 -83.42% 156869023.89 15.51%

shareholders (RMB)

Net profit attributable to

the listed company’s

-16029859.81——-10204315.83——

shareholders before

exceptional items (RMB)

Net cash generated

from/used in operating —— —— -214128249.30 ——

activities (RMB)

Basic earnings per share

0.0353-83.42%0.222315.54%

(RMB/share)

Diluted earnings per

0.0353-83.42%0.222315.54%

share (RMB/share)

Weighted average return 0.71% -4.04% 4.67% 0.46%

1Changchai Company Limited Third Quarterly Report 2023

on equity (%)

31 December

30 September 2023 Change (%)

2022

Total assets (RMB) 5495618169.81 5219359853.42 5.29%

Equity attributable to the

listed company’s 3513146322.70 3284710665.90 6.95%

shareholders (RMB)

(II) Exceptional Gains and Losses

□ Applicable □ Not applicable

Unit: RMB

Item Q3 2023 Q1-Q3 2023 Note

Gain or loss on disposal of non-

current assets (inclusive of 305204.87 105700898.12

impairment allowance write-offs)

Government grants through profit or

loss (exclusive of government grants

continuously given in the Company’s

945026.584244083.10

ordinary course of business at fixed

quotas or amounts as per the

government’s policies and standards)

Gain or loss on fair-value changes on

held-for-trading financial assets and

Increased fair value of the

liabilities & income from disposal of

equity interests held by the

held-for-trading financial assets and

Company in Jiangsu Horizon

liabilities and available-for-sale 44644600.55 67231978.11

New Energy Technology Co.financial assets (exclusive of the

Ltd. and dividend payments of

effective portion of hedges that arise

Bank of Jiangsu

in the Company’s ordinary course of

business)

Non-operating income and expense

-939156.94-1740966.10

other than the above

Less: Income tax effects 4009802.82 8631372.02

Non-controlling interests

-15686.80-268718.51

effects (net of tax)

Total 40961559.04 167073339.72 --

Other items that meet the definition of exceptional gain/loss:

□ Applicable □ Not applicable

No such cases in the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the

Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the

Public—Exceptional Gain/Loss Items:

□ Applicable □ Not applicable

No such cases in the Reporting Period.(III) Changes in Key Financial Statement Line Items and Explanation of why

□ Applicable □ Not applicable

1. Consolidated Balance Sheet Items

30 September 1 January 2023 Change

Item Explanation of why

2023 (RMB) (RMB) (%)

2Changchai Company Limited Third Quarterly Report 2023

The Company properly allowed customers’

buying on credit for more markets and multi-

Accounts

948500359.63 370322179.77 156.13% cylinder diesel engine customers are mainly

receivable

supporting companies of main engine which

are usually given longer payment days.Receivables Decreased bank acceptance notes with high

68624801.14242813392.79-71.74%

financing credit ratings

Increased prepayments for suppliers to

Prepayments 13917494.12 6330202.69 119.86%

provide more support for them

Compensation to be received for land

Other receivables 85082839.10 32938305.16 158.31%

expropriation

Other current Decreased overpaid value added tax

1440860.1449279022.49-97.08%

assets

Deferred income Decreased deductible losses before offsetting

4617363.3226220575.93-82.39%

tax assets

Suppliers were paid more often in the form

Notes payable 654553381.77 471876397.72 38.71%

of notes payable.Employee benefits Salaries and bonuses accrued last year were

14127692.1949351022.47-71.37%

payable paid in the Reporting Period

Taxes and levies Decreased value added tax payable and other

5309868.708570175.39-38.04%

payable taxes and levies payable

2. Consolidated Income Statement Items for Q1~Q3

Q1~Q3 2023 Q1~Q3 2022 Change

Item Explanation of why

(RMB) (RMB) (%)

Decreased exchange gains and interest

Finance costs -4386564.04 -19745726.63 ——

revenue

Other income 4244083.10 3046711.99 39.30% Increased government grants

The fair value of the equity interests held by

the Company in Jiangsu Horizon New

Gain on changes

50146450.23 147105037.74 -65.91% Energy Technology Co. Ltd. increased

in fair value

slower during the current period compared

with the same period of last year.The same period of last year saw reversal of

Asset impairment

-565273.49 4947828.84 -111.42% inventory valuation allowances with no such

loss

reversal in the current period.Expropriation of constructions on the state-

Asset disposal

105700898.12 -361395.36 —— owned land of the Changzhou Wuxing

income

branch company during the Reporting Period

The main reason is that the merger cost of the

company's acquisition of 41.5% equity in

Zhenjiang Siyang Diesel Engine

Non-operating

635091.37 3745972.29 -83.05% Manufacturing Co. Ltd. last year was less

income

than the fair value share of identifiable net

assets obtained with no such goodwill in the

current period.Non-operating Increased abandonment losses during the

2376057.471092345.39117.52%

expense Reporting Period

Unused deferred income tax assets that are

Income tax

12136766.20 21137842.55 -42.58% deductible against losses during the

expense

Reporting Period

Net profit Increased profit of subsidiary Zhenjiang

attributable to 6051686.40 1084518.63 458.01% Siyang Diesel Engine Manufacturing Co.non-controlling Ltd. during the Reporting Period

3Changchai Company Limited Third Quarterly Report 2023

interests

3. Consolidated Cash Flow Statement Items for Q1~Q3

Q1~Q3 2023 Q1~Q3 2022 Change

Item Explanation of why

(RMB) (RMB) (%)

Increase of accounts receivable since most of

the Company’s multi-cylinder diesel engine

Net cash

customers are supporting companies of main

generated

engine which are usually given longer

from/used in -214128249.30 -82550839.42 ——

payment days and the Company properly

operating

allowed customers’ buying on credit for

activities

more markets to step up efforts to expand the

market relative to the capital return of less.The same period of last year saw the

acquisition of a 41.5% interest in Zhenjiang

Siyang and a capital increase by the

Net cash

Company to Jiangsu Horizon New Energy

generated

Technology Co. Ltd. with no such

from/used in 12802394.50 -50712854.83 ——

investments in the current period.investing

Meanwhile part of the compensation for the

activities

expropriation of land of the Changzhou

Wuxing branch company was received in the

current period.Net cash The same period of last year saw discounting

generated of bank acceptance notes with lower credit

from/used in -8773914.91 52000140.67 —— r atings with no such events in the current

financing period.activities

II Shareholder Information

(I) Numbers of Ordinary Shareholders and Preference Shareholders with Resumed Voting Rights as well

as Holdings of Top 10 Shareholders

Unit: share

Number of ordinary Number of preference shareholders with

563850

shareholders resumed voting rights (if any)

Top 10 shareholders

Shares in pledge marked or

Name of Nature of Shareholding Total shares Restricted

frozen

shareholder shareholder percentage held shares held

Status Shares

Changzhou

Investment State-owned

32.26%22766341756818181

Group Co. corporation

Ltd.MORGAN

STANLEY

Foreign

& CO. 1.10% 7769569

corporation

INTERNATI

ONAL PLC.Domestic

Chen Jian 0.57% 4042600

individual

4Changchai Company Limited Third Quarterly Report 2023

KGI ASIA Foreign

0.44%3101695

LIMITED corporation

CITIC

Securities State-owned

0.41%2902151

Company corporation

Limited

MERRILL

LYNCH Foreign

0.35%2442573

INTERNATI corporation

ONAL

Domestic

Wu Chunhua 0.35% 2442200

individual

Shenwan

Hongyuan State-owned

0.24%1686141

Securities corporation

Co. Ltd.Domestic

Li Suinan 0.23% 1593800

individual

Zhang Domestic

0.22%1545300

Wenbing individual

Top 10 unrestricted shareholders

Shares by class

Name of shareholder Unrestricted ordinary shares held

Class Shares

RMB-

Changzhou Investment Group

170845236 denominated 170845236

Co. Ltd.ordinary share

MORGAN STANLEY & RMB-

CO. INTERNATIONAL 7769569 denominated 7769569

PLC. ordinary share

RMB-

Chen Jian 4042600 denominated 4042600

ordinary share

Domestically

KGI ASIA LIMITED 3101695 listed foreign 3101695

share

RMB-

CITIC Securities Company

2902151 denominated 2902151

Limited

ordinary share

RMB-

MERRILL LYNCH

2442573 denominated 2442573

INTERNATIONAL

ordinary share

RMB-

Wu Chunhua 2442200 denominated 2442200

ordinary share

RMB-

Shenwan Hongyuan

1686141 denominated 1686141

Securities Co. Ltd.ordinary share

Domestically

Li Suinan 1593800 listed foreign 1593800

share

RMB-

Zhang Wenbing 1545300 denominated 1545300

ordinary share

It is unknown whether there is among the top 10 public

Related or acting-in-concert parties among the

shareholders and the top 10 unrestricted public shareholders

shareholders above

any related parties or acting-in-concert parties as defined in

5Changchai Company Limited Third Quarterly Report 2023

the Administrative Measures for Information Regarding

Shareholding Alteration.Chen Jian and Wu Chunhua respectively held 2478800 and

Top 10 shareholders engaged in securities

2442200 shares in the Company through their credit

margin trading

accounts.(II) Number of Preference Shareholders and Shareholdings of Top 10 of Them

□ Applicable □ Not applicable

III Other Significant Events

□ Applicable □ Not applicable

IV Quarterly Financial Statements

(I) Financial Statements

1. Consolidated Balance Sheet

Prepared by Changchai Company Limited

30 September 2023

Unit: RMB

Item 30 September 2023 1 January 2023

Current assets:

Monetary assets 793921697.53 930013350.97

Settlement reserve

Loans to other banks and

financial institutions

Held-for-trading financial assets 282842226.89 370103602.57

Derivative financial assets

Notes receivable 302393726.46 297125872.54

Accounts receivable 948500359.63 370322179.77

Receivables financing 68624801.14 242813392.79

Prepayments 13917494.12 6330202.69

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract

reserve

Other receivables 85082839.10 32938305.16

Including: Interest receivable

Dividends

receivable

Financial assets purchased under

resale agreements

6Changchai Company Limited Third Quarterly Report 2023

Inventories 598301697.90 571996881.74

Contract assets

Assets held for sale

Current portion of non-current

assets

Other current assets 1440860.14 49279022.49

Total current assets 3095025702.91 2870922810.72

Non-current assets:

Loans and advances to customers

Debt investments 40368109.09 39309587.93

Other debt investments

Long-term receivables

Long-term equity investments

Investments in other equity

1046911240.08955560240.08

instruments

Other non-current financial

412914576.80373500000.00

assets

Investment property 40361736.50 42160779.65

Fixed assets 668250365.81 720061387.76

Construction in progress 34490146.96 30281547.56

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets 148221028.54 157392217.54

Development costs

Goodwill

Long-term prepaid expense 3064658.61 3279970.32

Deferred income tax assets 4617363.32 26220575.93

Other non-current assets 1393241.19 670735.93

Total non-current assets 2400592466.90 2348437042.70

Total assets 5495618169.81 5219359853.42

Current liabilities:

Short-term borrowings 106666549.81 115437700.65

Borrowings from the central bank

Loans from other banks and

financial institutions

Held-for-trading financial

liabilities

Derivative financial liabilities

Notes payable 654553381.77 471876397.72

Accounts payable 599509101.34 747010098.88

Advances from customers 855803.44 837425.55

Contract liabilities 35020256.88 32843692.83

7Changchai Company Limited Third Quarterly Report 2023

Financial assets sold under

repurchase agreements

Customer deposits and deposits

from other banks and financial

institutions

Payables for acting trading of

securities

Payables for underwriting of

securities

Employee benefits payable 14127692.19 49351022.47

Taxes and levies payable 5309868.70 8570175.39

Other payables 170503548.85 160046882.93

Including: Interest payable

Dividends payable 3891433.83 3891433.83

Fees and commissions payable

Reinsurance payables

Liabilities directly associated with

assets held for sale

Current portion of non-current

liabilities

Other current liabilities 100476641.21 78645741.16

Total current liabilities 1687022844.19 1664619137.58

Non-current liabilities:

Insurance contract reserve

Long-term borrowings

Bonds payable

Including: Preference shares

Perpetual bonds

Lease liabilities

Long-term payables

Long-term employee benefits

payable

Provisions

Deferred income 33648328.84 36205625.94

Deferred income tax liabilities 183284815.01 161360251.33

Other non-current liabilities

Total non-current liabilities 216933143.85 197565877.27

Total liabilities 1903955988.04 1862185014.85

Owners’ equity:

Share capital 705692507.00 705692507.00

Other equity instruments

Including: Preference shares

Perpetual bonds

Capital reserves 640133963.01 640133963.01

8Changchai Company Limited Third Quarterly Report 2023

Less: Treasury stock

Other comprehensive income 732990054.07 655341704.07

Specific reserve 19824064.73 18848856.75

Surplus reserves 349197725.72 349197725.72

General reserve

Retained earnings 1065308008.17 915495909.35

Total equity attributable to owners

3513146322.703284710665.90

of the Company as the parent

Non-controlling interests 78515859.07 72464172.67

Total owners’ equity 3591662181.77 3357174838.57

Total liabilities and owners’ equity 5495618169.81 5219359853.42

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

2. Consolidated Income Statement for Q1~Q3

Unit: RMB

Item Q1~Q3 2023 Q1~Q3 2022

1. Revenues 1809074804.85 1723822161.11

Including: Operating revenue 1809074804.85 1723822161.11

Interest income

Insurance premium income

Fee and commission income

2. Costs and expenses 1793921012.03 1723250063.20

Including: Cost of sales 1550178804.98 1528285603.14

Interest expense

Fee and commission expense

Surrenders

Net insurance claims paid

Net amount provided as insurance

contract reserve

Expenditure on policy dividends

Reinsurance premium expense

Taxes and levies 11219574.86 10481397.49

Selling expense 91990466.03 80388110.83

Administrative expense 76256928.17 63510263.02

R&D expense 68661802.03 60330415.35

Finance costs -4386564.04 -19745726.63

Including: Interest expense 4289281.12 6012305.10

Interest income 8242392.28 8356889.05

Add: Other income 4244083.10 3046711.99

9Changchai Company Limited Third Quarterly Report 2023

Return on investment (“-” for loss) 17099924.85 13836894.98

Including: Share of profit or loss of joint

ventures and associates

Income from the derecognition of financial

assets at amortized cost (“-” for loss)

Exchange gain (“-” for loss)

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

Gain on changes in fair value (“-” for loss) 50146450.23 147105037.74

Credit impairment loss (“-” for loss) -14981433.04 -13768089.86

Asset impairment loss (“-” for loss) -565273.49 4947828.84

Asset disposal income (“-” for loss) 105700898.12 -361395.36

3. Operating profit (“-” for loss) 176798442.59 155379086.24

Add: Non-operating income 635091.37 3745972.29

Less: Non-operating expense 2376057.47 1092345.39

4. Gross profit (“-” for loss) 175057476.49 158032713.14

Less: Income tax expense 12136766.20 21137842.55

5. Net profit (“-” for net loss) 162920710.29 136894870.59

5.1 By operating continuity

5.1.1 Net profit from continuing operations (“-” for

162920710.29136894870.59

net loss)

5.1.2 Net profit from discontinued operations (“-”

for net loss)

5.2 By ownership

5.2.1 Net profit attributable to shareholders of the

156869023.89135810351.96

Company as the parent (“-” for net loss)

5.2.1 Net profit attributable to non-controlling

6051686.401084518.63

interests (“-” for net loss)

6. Other comprehensive income net of tax 77648350.00 107325436.79

Attributable to owners of the Company as the parent 77648350.00 107325436.79

6.1 Items that will not be reclassified to profit or

77648350.00107325436.79

loss

6.1.1 Changes caused by remeasurements on

defined benefit schemes

6.1.2 Other comprehensive income that will not

be reclassified to profit or loss under the equity method

6.1.3 Changes in the fair value of investments

77648350.00107325436.79

in other equity instruments

6.1.4 Changes in the fair value arising from

changes in own credit risk

6.1.5 Other

6.2 Items that will be reclassified to profit or loss

6.2.1 Other comprehensive income that will be

reclassified to profit or loss under the equity method

6.2.2 Changes in the fair value of other debt

investments

6.2.3 Other comprehensive income arising from

the reclassification of financial assets

6.2.4 Credit impairment allowance for other

debt investments

10Changchai Company Limited Third Quarterly Report 2023

6.2.5 Reserve for cash flow hedges

6.2.6 Differences arising from the translation of

foreign currency-denominated financial statements

6.2.7 Other

Attributable to non-controlling interests

7. Total comprehensive income 240569060.29 244220307.38

7.1 Attributable to owners of the Company as the

234517373.89243135788.75

parent

7.2 Attributable to non-controlling interests 6051686.40 1084518.63

8. Earnings per share

8.1 Basic earnings per share 0.2223 0.1924

8.2 Diluted earnings per share 0.2223 0.1924

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

3. Consolidated Cash Flow Statement for Q1~Q3

Unit: RMB

Item Q1~Q3 2023 Q1~Q3 2022

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of

1446377641.191470088784.47

services

Net increase in customer deposits and deposits from

other banks and financial institutions

Net increase in borrowings from the central bank

Net increase in loans from other financial institutions

Premiums received on original insurance contracts

Net proceeds from reinsurance

Net increase in deposits and investments of policy

holders

Interest fees and commissions received

Net increase in loans from other banks and financial

institutions

Net increase in proceeds from repurchase transactions

Net proceeds from acting trading of securities

Tax and levy rebates 88252376.59 23550037.23

Cash generated from other operating activities 15970772.52 17394468.43

Subtotal of cash generated from operating activities 1550600790.30 1511033290.13

Payments for commodities and services 1374158537.72 1204438609.81

Net increase in loans and advances to customers

Net increase in deposits in the central bank and other

banks and financial institutions

Payments for claims on original insurance contracts

Net increase in loans to other banks and financial

institutions

11Changchai Company Limited Third Quarterly Report 2023

Interest fees and commissions paid

Policy dividends paid

Cash paid to and for employees 242312537.73 241596494.16

Taxes and levies paid 31292358.05 47369925.46

Cash used in other operating activities 116965606.10 100179100.12

Subtotal of cash used in operating activities 1764729039.60 1593584129.55

Net cash generated from/used in operating activities -214128249.30 -82550839.42

2. Cash flows from investing activities:

Proceeds from disinvestment 877716751.99 89591553.34

Return on investment 17099924.85 13945782.65

Net proceeds from the disposal of fixed assets

58171702.954424.78

intangible assets and other long-lived assets

Net proceeds from the disposal of subsidiaries and

other business units

Cash generated from other investing activities 208889.64

Subtotal of cash generated from investing activities 952988379.79 103750650.41

Payments for the acquisition of fixed assets

150108371.2942948956.55

intangible assets and other long-lived assets

Payments for investments 790077614.00 111514548.69

Net increase in pledged loans granted

Net payments for the acquisition of subsidiaries and

other business units

Cash used in other investing activities

Subtotal of cash used in investing activities 940185985.29 154463505.24

Net cash generated from/used in investing activities 12802394.50 -50712854.83

3. Cash flows from financing activities:

Capital contributions received

Including: Capital contributions by non-

controlling interests to subsidiaries

Borrowings received

Cash generated from other financing activities 83546936.65

Subtotal of cash generated from financing activities 83546936.65

Repayment of borrowings 9000000.00

Interest and dividends paid 8773914.91 19444136.67

Including: Dividends paid by subsidiaries to non-

controlling interests

Cash used in other financing activities 3102659.31

Subtotal of cash used in financing activities 8773914.91 31546795.98

Net cash generated from/used in financing activities -8773914.91 52000140.67

4. Effect of foreign exchange rates changes on cash and

cash equivalents

5. Net increase in cash and cash equivalents -210099769.71 -81263553.58

Add: Cash and cash equivalents beginning of the

810350966.05573623529.10

period

6. Cash and cash equivalents end of the period 600251196.34 492359975.52

12Changchai Company Limited Third Quarterly Report 2023

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

(II) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation

of the New Accounting Standards Implemented since 2023

□ Applicable □ Not applicable

(III) Independent Auditor’s Report

Indicate by tick mark whether the financial statements above have been audited by an independent auditor.□Yes □ No

These financial statements have not been audited by such an auditor.The Board of Directors

Changchai Company Limited

28 October 2023

13