CSG HOLDING CO., LTD.
THE THIRD QUARTER REPORT 2019
Chairman of the Board:
CHEN LIN
October 2019
Section I. Important NoticeBoard of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referredto as the Company) and its directors, supervisors and senior executives hereby confirm that thereare no any fictitious statements, misleading statements, or important omissions carried in this report,and shall take all responsibilities, individual and/or joint, for the facticity, accuracy andcompleteness of the whole contents.All directors were present at the meeting of the Board for deliberating the Third Quarter Report of2019 of the Company in person.Ms. Chen Lin, Chairman of the Board, Mr. Wang Jian, responsible person in charge of accountingand Ms.Wang Wenxin, principal of the financial department (accounting officer) confirm that theFinancial Report enclosed in the Third Quarter Report of 2019 of the Company is true, accurate andcomplete.This report is prepared both in Chinese and English. Should there be any inconsistency between theChinese and English versions, the Chinese version shall prevail.
Section II. The Basic Information of the CompanyI. Main accounting data and financial indicesWhether retrospective adjustment has been carried out on financial reports of previous periods or not
□Yes √ No
| The end of the report period | The end of the previous year | Increase/decrease in comparison with the end of the previous year | ||||
| Total assets (RMB ) | 18,422,844,539 | 19,114,234,184 | -3.62% | |||
| Net assets attributable to shareholders of the Company (RMB ) | 9,546,827,355 | 9,103,154,571 | 4.87% | |||
| The report period | Increase/decrease in comparison with the same period of the previous year | From 1 January to 30 September 2019 | Increase/decrease in comparison with the same period of 2018 | |||
| Operating income (RMB) | 2,773,417,909 | 3.46% | 7,661,655,487 | -6.01% | ||
| Net profit attributable to shareholders of the listed company (RMB) | 166,970,717 | 43.59% | 544,313,118 | 16.03% | ||
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | 135,913,151 | 57.67% | 419,852,595 | 0.05% | ||
| Net cash flow arising from operating activities (RMB) | -- | -- | 1,508,389,800 | 6.92% | ||
| Basic earnings per share (RMB/Share) | 0.06 | 50% | 0.18 | 12.50% | ||
| Diluted earnings per share (RMB/Share) | 0.05 | 25% | 0.17 | 13.33% | ||
| Weighted average ROE | 1.77% | 0.43% | 5.84% | 0.45% | ||
Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
Unit: RMB
| Item | Amount from the beginning of year to the end of the report period | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | 118,401 | |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 143,444,934 |
| Profits and losses from external entrusted loans | 6,615,566 | |
| Other non-operating income and expenditure except for the aforementioned items | -998,605 | |
| Less: Impact on income tax | 20,592,883 | |
| Impact on minority shareholders’ equity (post-tax) | 4,126,890 | |
| Total | 124,460,523 | -- |
Explain reasons for the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure forCompanies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/lossaccording to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss
□Applicable √ Not applicable
It did not exist that the items were defined as recurring profit (gain)/loss according to the definition or the list of extraordinary profit(gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public ---Extraordinary Profit/loss in the report period.
II. Total of shareholders at the end of the report period and particulars about shareholdingsof the top ten shareholders
1. Particulars about the total number of common shareholders and preference shareholders with votingrights recovered as well as the shareholdings of the top ten shareholders
Unit: Share
| Total number of common shareholders at the end of the report period | 145,442 | Total number of preference shareholders with voting rights recovered at end of report period (if applicable) | 0 | |||||
| Particulars about the shareholdings of the top ten shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Proportion of shares held (%) | Amount of shares held | Amount of restricted shares held | Number of share pledged/frozen | |||
| Share status | Amount | |||||||
| Foresea Life Insurance Co., Ltd. – Haili Niannian | Domestic non state-owned legal person | 15.01% | 466,386,874 | 0 | ||||
| Foresea Life Insurance Co., Ltd. – Universal Insurance Products | Domestic non state-owned legal person | 3.81% | 118,425,007 | 0 | ||||
| Shenzhen Jushenghua Co., Ltd. | Domestic non state-owned legal person | 2.79% | 86,633,447 | 0 | Pledged | 69,300,000 | ||
| Foresea Life Insurance Co., Ltd. – Own Fund | Domestic non state-owned legal person | 2.08% | 64,765,161 | 0 | ||||
| Central Huijin Asset Management Ltd. | State-owned legal person | 1.86% | 57,915,488 | 0 | ||||
| China Galaxy International Securities (Hong Kong) Co., Limited | Foreign legal person | 1.34% | 41,544,370 | 0 | ||||
| UBS AG | Foreign legal person | 1.18% | 36,575,937 | 0 | |||||
| China Merchants Securities (HK) Co., Limited | State-owned legal person | 1.05% | 32,516,355 | 0 | |||||
| Shenzhen International Holdings (SZ) Limited | State-owned legal person | 0.94% | 29,095,000 | 0 | |||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.62% | 19,320,233 | 0 | |||||
| Particulars about top ten shareholders with unrestricted shares held | |||||||||
| Name of shareholder | Amount of unrestricted shares held | Type of shares | |||||||
| Type | Amount | ||||||||
| Foresea Life Insurance Co., Ltd. – Haili Niannian | 466,386,874 | RMB ordinary shares | 466,386,874 | ||||||
| Foresea Life Insurance Co., Ltd. – Universal Insurance Products | 118,425,007 | RMB ordinary shares | 118,425,007 | ||||||
| Shenzhen Jushenghua Co., Ltd. | 86,633,447 | RMB ordinary shares | 86,633,447 | ||||||
| Foresea Life Insurance Co., Ltd. – Own Fund | 64,765,161 | RMB ordinary shares | 64,765,161 | ||||||
| Central Huijin Asset Management Ltd. | 57,915,488 | RMB ordinary shares | 57,915,488 | ||||||
| China Galaxy International Securities (Hong Kong) Co., Limited | 41,544,370 | Domestically listed foreign shares | 41,544,370 | ||||||
| UBS AG | 36,575,937 | RMB ordinary shares | 36,575,937 | ||||||
| China Merchants Securities (HK) Co., Limited | 32,516,355 | Domestically listed foreign shares | 32,516,355 | ||||||
| Shenzhen International Holdings (SZ) Limited | 29,095,000 | RMB ordinary shares | 29,095,000 | ||||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | 19,320,233 | Domestically listed foreign shares | 19,320,233 | ||||||
| Statement on associated relationship or consistent action among the above shareholders: | Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, Foresea Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related legal person of Foresea Life Insurance Co., Ltd, which held 40,187,904 shares via China Galaxy International Securities (Hong Kong) Co., Limited. Except for the above-mentioned shareholders, It is unknown whether other shareholders belong to related party or have associated relationship regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies. | ||||||||
| Explanation on shareholders involving margin business (if applicable) | N/A | ||||||||
Whether the top ten shareholders or top ten shareholders with unrestricted shares carried out buy back deals in the report period
□Yes √ No
There were no buy back deals carried out by the top ten shareholders or top ten shareholders with unrestricted shares held in thereport period.
2. Total number of preference shareholders and particulars about the shareholdings of the top tenpreference shareholders
□Applicable √ Not applicable
Section III. Important eventsI. Particulars and explanations about significant changes in main accounting statements andfinancial indices
√Applicable □Not applicable
Unit: RMB'0,000
| Item of balance sheet | Note | 30 September 2019 | 31 December 2018 | Increased/Decreased amount | Rate |
| Notes receivable | (1) | 49,176 | 71,938 | -22,762 | -32% |
| Accounts receivable | (2) | 78,185 | 59,223 | 18,962 | 32% |
| Inventories | (3) | 81,431 | 60,014 | 21,417 | 36% |
| Assets held for sale | (4) | - | 4,598 | -4,598 | -100% |
| Other non-current assets | (5) | 9,013 | 5,683 | 3,330 | 59% |
| Notes payable | (6) | 19,145 | 10,515 | 8,630 | 82% |
| Advance receipts | (7) | 26,818 | 20,663 | 6,155 | 30% |
| Other payables | (8) | 30,946 | 55,275 | -24,329 | -44% |
| Non-current liabilities due within one year | (9) | 167,581 | 81,945 | 85,636 | 105% |
| Long-term borrowings | (10) | 108,040 | 231,570 | -123,530 | -53% |
| Long-term payables | (11) | 19,054 | 52,991 | -33,937 | -64% |
| Deferred income tax liabilities | (12) | 3,307 | 2,212 | 1,095 | 50% |
| Capital reserve | (13) | 73,051 | 109,534 | -36,483 | -33% |
| Treasury stocks | (14) | 12,232 | 27,718 | -15,486 | -56% |
| Special reserve | (15) | 971 | 607 | 364 | 60% |
| Other comprehensive income | (16) | 706 | 508 | 198 | 39% |
| Item of income statement | Note | From January to September 2019 | From January to September 2018 | Increased/Decreased amount | Rate |
| Credit impairment loss | (17) | -354 | -555 | 201 | -36% |
| Asset impairment loss | (18) | -13,533 | - | -13,533 | |
| Income from asset disposal | (19) | 12 | -46 | 58 | |
| Other income | (20) | 14,344 | 5,476 | 8,868 | 162% |
| Non-operating expenses | (21) | 746 | 149 | 597 | 401% |
| Net amount of other comprehensive income after tax | (22) | 198 | 316 | -118 | -37% |
Note:
(1) The decrease in notes receivable was mainly due to the discounted bills of some subsidiaries.
(2) The increase in accounts receivable was mainly due to the increase in revenue of the glass industry.
(3) The increase in inventories was mainly due to the increase in production capacity and strategic reserves of some subsidiaries.
(4) The decrease in assets held for sale was mainly due to the disposal of assets held for sale.
(5) The increase in other non-current assets was mainly due to the increase in prepaid projects and equipment.
(6) The increase in notes payable was mainly due to the slight increase in new notes issued by some companies in the current period.
(7) The increase in advance receipts was mainly due to the increase in advance receipts from the glass industry.
(8) The decrease in other payables was mainly due to the repurchase of restricted stocks.
(9) The increase in non-current liabilities due within one year was mainly due to the transfer of medium-term notes to non-currentliabilities due within one year.
(10) The decrease in long-term borrowings was mainly due to the transfer of medium-term notes to non-current liabilities due withinone year.
(11) The decrease in long-term payables was mainly due to the repayment of financing leases during the period.
(12) The increase in deferred income tax liabilities was mainly due to the increase in deferred income tax liabilities of certainsubsidiaries.
(13) The decrease in capital reserve was mainly due to the transfer of capital reserve into share capital and repurchase of restrictedstocks during the period.
(14) The decrease in treasury stocks was mainly due to the repurchase of restricted stocks.
(15) The increase in special reserve was mainly due to the increase in investment in safety production during the period.
(16) The increase in other comprehensive income was mainly due to the change in the translation difference of foreign currencystatements.
(17) The decrease in credit impairment loss was mainly due to the decrease in provision for bad debts of some subsidiaries.
(18) The increase in asset impairment loss was mainly due to the provision for impairment of fixed assets and construction inprogress during the period.
(19) The increase in income from asset disposal was mainly due to the disposal of non-current assets.
(20) The increase in other income was mainly due to the increase in amortization of government grants during the period.
(21) The increase in non-operating expenses was mainly due to the increase in compensation and donation expenses.
(22) The decrease in net amount of other comprehensive income after tax was mainly due to changes in the translation differences inforeign currency statements.
II. The progress of material events and the impact as well as the analysis of solutions
√Applicable □ Not applicable
1. Short-term Financing Bills
On Dec.14, 2016, the second extraordinary shareholders’ general meeting of 2016 of CSG deliberated and approved the proposal ofthe offering and registration of short-term financing bills, and agreed the Company’s registration and issuance of short-term financingbills with a total amount of RMB 2.7 billion, which could be issued by stages within period of validity of the registration according tothe Company’s actual demands for funds and the status of inter-bank funds. However, the term of each issue shall not be longer thanone year and the registered quota shall not exceed 40 percent of the Company’s net assets.
2. Ultra-short-term financing bills
On May 14, 2018, the Company’s 2017 annual shareholders’ meeting deliberated and approved the resolution on the application forregistration and issuance of ultra-short-term financing bills. It agreed that the Company should register and issue ultra-short-termfinancing bills with a registered amount not exceeding RMB 4 billion yuan (not subject to the restriction that the amount ofultra-short-term issued shall not exceed 40% of net assets). With the period of validity of the quota not longer than two years, suchultra-short-term financing bills will be issued by installments in accordance with the actual capital needs of the Company and thesituation of inter-bank market funds. On Sep. 17, 2018, the Chinese Association of Interbank Market Traders held its 63rdregistration meeting in 2018, and decided to approve the registration of the ultra-short-term financing bills with a total amount of 1.5billion yuan and a validity period of two years. The ultra-short-term financing bills are underwritten jointly by Minsheng Bank ofChina Limited and Industrial Bank Co., Ltd, and can be issued by installments within the validity period of registration.
3. Perpetual bonds
On April 15, 2016, the Shareholders’ General Meeting 2015 of CSG deliberated and approved the proposal of application forregistration and issuance of perpetual bonds, and agreed the Company to register and issue perpetual bonds with total amount ofRMB 3.1 billion which could be issued by stages within period of validity of the registration according to the Company’s actualdemand for funds and the capital status of inter-bank market.
4. Medium-term notes
On 10 December 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltd deliberated andapproved the proposal of application for registration and issuance of medium-term notes with total amount of RMB 1.2 billion atmost. On 21 May 2015, National Association of Financial Market Institutional Investors (NAFMII) held the 32nd registrationmeeting of 2015, in which NAFMII decided to accept the registration of the Company’s medium-term notes, amounting to RMB 1.2billion and valid for two years. China Merchants Bank Co., Ltd. and Shanghai Pudong Development Bank Co., Ltd. were joint leadunderwriters of these medium term notes which could be issued by stages within period of validity of the registration on Jul.14, 2015,the Company issued the first batch of medium term notes with total amount of RMB 1.2 billion and valid term of 5 years at theissuance rate of 4.94%, which will be redeemed on 14 July 2020.On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal of application forregistration and issuance of medium-term notes with total amount of RMB 0.8 billion, which could be issued by stages within periodof validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. On 2 March2018, National Association of Financial Market Institutional Investors (NAFMII) held the 14
th
registration meeting of 2018, in whichNAFMII decided to accept the registration of the Company’s medium-term notes, amounting to RMB 0.8 billion and valid for twoyears. Shanghai Pudong Development Bank Co., Ltd. and China CITIC Bank Corporation Limited were joint lead underwriters ofthese medium-term notes which could be issued by stages within period of validity of the registration. On May 4, 2018, the Company
issued the first medium-term notes with a total amount of 800 million yuan and a term of three years. The issue rate was 7%, and theredemption date was May 4, 2021.On May 22, 2017, the Shareholders’ General Meeting of 2016 of CSG deliberated and approved the proposal of application forregistration and issuance of medium-term notes with total amount of RMB 1 billion, which could be issued by stages within period ofvalidity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds.For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.
5. Public issuance of corporate bonds
On March 2, 2017, the 2nd Extraordinary General Meeting of Shareholders in 2017 reviewed and approved “the Proposal on thePublic Issuance of Corporate Bonds for Qualified Investors". On February 27, 2019, the First Extraordinary General Meeting ofShareholders in 2019 The “Proposal on Extending the Validity Period of the Shareholders' Meeting for the Public Offering ofCorporate Bonds to Qualified Investors” agreed to issue corporate bonds with a total issue of no more than RMB 2 billion and a termof no more than 10 years.On July 22, 2019, the Company received the “Approval of Approving CSG Holding Co., Ltd. to Issue Corporate Bonds to QualifiedInvestors” issued by China Securities Regulatory Commission (CSRC [2019] No. 1140).
6. Approved by the interim meeting of the Eighth Board of Directors of the Company held on September 11, 2019, the Companyissued an entrusted loan with total amount of RMB 0.3 billion to Tengchong Yuezhou Water Investment Development Co., Ltd.. Thevalidity period of the entrusted loan was 3 months and the annual interest rate was 8.5%.
7.On October 10, 2017, the 3rd Meeting of the Eighth Board of Directors of the Company deliberated and approved 2017 RestrictedA- shares Incentive Plan of CSG Holding Co., Ltd (Draft ) and its summary, the Management Method of the Implementation andReview of 2017 A-share Restricted Stock Incentive Plan of CSG Holding Co., Ltd and the Proposal on Applying the GeneralMeeting of Shareholders to Authorize the Board of Directors to Deal With the Related Matters on the Company’s 2017 RestrictedA-shares Incentive Plan. The above contents are detailed in the Announcement of the Resolution on the 3
rd
Meeting of the EighthBoard of Directors published on www.cninfo.com.cn on October 11, 2017 (Announcement No.: 2017-063). The Company’sindependent directors issued independent opinions on the issues involved with 2017 Restricted A-shares Incentive Plan.On October 26, 2017, the Company convened the 5th Extraordinary General Meeting in 2017, which deliberated and approved theabove three proposals. The Proposal on Adjusting the Object and Quantity Granted of 2017 A-share Restricted Stock Incentive Planand the Proposal on Firstly Granted Restricted Shares to the Object of 2017 Restricted A-share were deliberated and approved on theinterim meeting of the Eighth Board of Directors which was convened on December 11, 2017. It determined December 11, 2017 asthe grant date, to grant 97,511,654 restricted shares to 454 objects at the grant price of RMB 4.28 yuan/share, with 17,046,869 sharesof reserved restricted shares.The granting of shares was completed on December 25, 2017 and the specific content was detailed in the Announcement onCompleting the First Granting of 2017 Restricted Shares disclosed on www.cninfo.com.cn on December 22, 2017 (AnnouncementNo.:2017-079).On July 20, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the the EighthBoard of Supervisors, and reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks ofRestricted Stock Incentive Plan, and agreed to repurchase and cancel the total of 3,319,057 shares of all restricted stocks held by 15unqualified original incentives. The independent directors of the Company issued a consent opinion. And on August 6, 2018, the 2ndExtraordinary General Meeting in 2018 approved the proposal. As of September 10, 2018, the Company had completed the
cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of China Securities Depository and ClearingCorporation Limited. The total number of shares of the Company was changed from 2,856,769,678 shares to 2,853,450,621 shares.On September 13, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on Granting Reserved Restricted Stocks of 2017 Restricted StockIncentive Plan for Incentive Objects, which determined September 13, 2018 as the grant date, to grant 9,826,580 restricted shares to75 objects at the grant price of RMB 3.68 yuan/share. The independent directors issued independent opinions on the above proposal,and the Company's board of supervisors re-checked the list of incentive objects on the grant date. The shares granted had beenregistered in Shenzhen Branch of China Securities Depository and Clearing Corporation Limited and listed on September 28, 2018.The total number of shares of the Company was changed from 2,853,450,621 shares to 2,863,277,201 shares.On December 12, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks ofRestricted Stock Incentive Plan, and agreed to repurchase and cancel the total of 436,719 shares of all restricted stocks held by 8unqualified original incentive objects. The proposal was approved by the 3rd Extraordinary General Meeting in 2018 on December28, 2018. As of June 18, 2019, the Company had completed the cancellation procedures for the above-mentioned restricted stocks inShenzhen Branch of China Securities Depository and Clearing Corporation Limited and the specific content was detailed in theAnnouncement on the Completion of Repurchasing Part of Restricted Stocks disclosed on www.cninfo.com.cn on June 19, 2019(Announcement No.: 2019-040).On December 12, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on the First Achievement of Lifting the Restriction Conditions for theFirst Granted Shares of the Company's 2017 A-share Restricted Stock Incentive Plan in the First Unlock Period. In addition to thefact that the eight incentive objects did not have the conditions to unlock restricted stocks due to their resignation, the total number ofincentive objects who reached the conditions for unlocking restricted stocks was 431 persons, and the number of restricted stocks thatcould be unlocked was 43,353,050 shares, accounting for 1.51% of the current total share capital of the Company. The board ofsupervisors, independent directors, and law firms separately issued clear consent opinions. The unlock date of the restricted stocks,which was the date of listing, was December 21, 2018.On April 16, 2019, the Company held the 8th Meeting of the Eighth Board of Directors and the 8th Meeting of the Eighth Board ofSupervisors, which reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks of RestrictedStock Incentive Plan and the Proposal on Repurchase and Cancellation of Restricted Stocks that Had Not Reached the UnlockingCondition of the Second Unlock Period, and agreed to repurchase and cancel the total of 3,473,329 shares of all restricted stocks heldby 14 unqualified original incentives, as well as the total of 33,734,276 shares of 483 incentive objects that did not meet theunlocking conditions of the second unlock period. The independent directors of the Company issued a consent opinion. And on May9, 2019, the proposals were approved by the 2018 Annual General Meeting of Shareholders. As of June 18, 2019, the Company hadcompleted the cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of China Securities Depositoryand Clearing Corporation Limited and the specific content was detailed in the Announcement on the Completion of RepurchasingPart of Restricted Stock disclosed on www.cninfo.com.cn on June 19, 2019 (Announcement No.: 2019-040).On September 16, 2019, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks ofRestricted Stock Incentive Plan, and agreed to repurchase and cancel the total of 1,281,158 shares of all restricted stocks held by 18unqualified original incentive objects. The proposal was approved by the 4th Extraordinary General Meeting in 2019 on October 10,2019. The proposal was approved by the 4th Extraordinary General Meeting in 2019 on October 10, 2019. The above restricted stockhas not completed the cancellation procedure.
On September 16, 2019, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on the First Achievement of Lifting the Restriction Conditions for theReserved Granted Shares of the Company's 2017 A-share Restricted Stock Incentive Plan in the First Unlock Period. In addition tothe fact that 3 incentive objects did not have the conditions to unlock restricted stocks due to their resignation, the total number ofincentive objects who reached the conditions for unlocking restricted stocks was 71 persons, and the number of restricted stocks thatcould be unlocked was 3,909,350 shares, accounting for 0.13% of the current total share capital of the Company. The board ofsupervisors, independent directors, and law firms separately issued clear consent opinions. The unlock date of the restricted stocks,which was the date of listing, was September 25, 2019.According to the relevant provisions of the "Accounting Standards for Business Enterprises", the implementation of the Company'srestricted stocks will have certain impact on the Company's financial status and operating results in the next few years. The resultsare subject to the annual audit report issued by the accounting firm.
Implementation progress of share buyback
□Applicable √Not applicable
Implementation progress of share buyback reduction through centralized bidding
□Applicable √Not applicable
III. Commitments made by the actual controller, the shareholders, the related parties, thepurchasers and the Company which failed to be fulfilled in time during the report period
□ Applicable √Not applicable
There were no commitments made by the actual controller, the shareholders, the related parties, the purchasers or the Companywhich failed to be fulfilled in time during the report period.
IV. Prediction of business performance of 2019
Alert of loss or significant change in accumulative net profit from the beginning of year to the end of the next report period orcompared with the same period of last year, and statement of causations.
□ Applicable √Not applicable
V. Securities investment
□ Applicable √Not applicable
The Company had no securities investment in the report period.VI. Entrusted financial management
□ Applicable √Not applicable
The Company had no entrusted financial management in the report period.
VII. Derivatives investment
□ Applicable √Not applicable
The Company had no derivatives investment in the report period.VIII. Reception of research, communication and interview in the report period
□ Applicable √Not applicable
The Company had no reception of research, communication or interview in the report period.IX. Illegal external guarantee
□ Applicable √Not applicable
The Company had no illegal external guarantee in the report period.X. Particulars about non-operating fund of listed company which is occupied by controllingshareholder and its affiliated enterprises
□ Applicable √Not applicable
In the report period, it did not exist that non-operating fund of listed company was occupied by controlling shareholder or itsaffiliated enterprises.
Section IV. Financial Report(I) Financial Statements
1. Consolidated Balance Sheet
Prepared by CSG Holding Co., Ltd.
September 30, 2019
Unit: RMB
| Item | September 30, 2019 | December 31, 2018 |
| Current asset: | ||
| Monetary capital | 1,863,545,157 | 2,226,447,720 |
| Notes receivable | 491,760,141 | 719,375,448 |
| Accounts receivable | 781,854,555 | 592,233,312 |
| Prepayments | 115,332,062 | 91,176,675 |
| Other receivables | 204,222,903 | 207,424,295 |
| Accounts receivable | 814,306,954 | 600,139,750 |
| Holding assets for sale | 45,983,520 | |
| Other current assets | 428,468,741 | 445,327,449 |
| Total current assets | 4,699,490,513 | 4,928,108,169 |
| Non-current assets: | ||
| Fixed assets | 10,003,094,368 | 9,930,843,775 |
| Construction in progress | 1,981,632,062 | 2,559,179,442 |
| Intangible assets | 1,039,671,918 | 1,035,731,324 |
| Development expenditure | 57,602,714 | 74,549,257 |
| Goodwill | 376,720,156 | 376,720,156 |
| Long-term prepaid expenses | 11,414,449 | 12,746,609 |
| Deferred tax assets | 163,089,054 | 139,529,518 |
| Other non-current assets | 90,129,305 | 56,825,934 |
| Total non-current assets | 13,723,354,026 | 14,186,126,015 |
| Total assets | 18,422,844,539 | 19,114,234,184 |
| Current liabilities: | ||
| Short-term loan | 2,860,000,039 | 2,922,679,590 |
| Notes payable | 191,449,162 | 105,150,000 |
| Accounts payable | 1,031,457,587 | 1,209,859,263 |
| Advance payment | 268,182,351 | 206,631,008 |
| Payroll payable | 227,888,841 | 266,459,151 |
| Taxes payable | 124,296,873 | 111,967,365 |
| Other payables | 309,463,325 | 552,751,187 |
| Including: interest payable | 42,358,192 | 73,612,703 |
| Dividend payable | 3,043,798 | 2,846,362 |
| Non-current liabilities due within one year | 1,675,813,653 | 819,448,742 |
| Other current liabilities | 300,000 | 300,000 |
| Total current liabilities | 6,688,851,831 | 6,195,246,306 |
| Non-current liabilities: | ||
| Long term borrowing | 1,080,400,000 | 2,315,700,000 |
| Long-term payables | 190,542,654 | 529,910,796 |
| Deferred income | 519,119,390 | 601,825,780 |
| Deferred income tax liabilities | 33,071,122 | 22,118,840 |
| Total non-current liabilities | 1,823,133,166 | 3,469,555,416 |
| Total Liabilities | 8,511,984,997 | 9,664,801,722 |
| Owners' equity: | ||
| Share capital | 3,108,196,163 | 2,863,277,201 |
| Capital reserve | 730,505,435 | 1,095,339,421 |
| Less: Treasury shares | 122,316,511 | 277,180,983 |
| Other comprehensive income | 7,059,689 | 5,080,234 |
| Special reserves | 9,706,398 | 6,068,600 |
| Surplus reserve | 924,305,375 | 924,305,375 |
| Undistributed profit | 4,889,370,806 | 4,486,264,723 |
| Total owner's equity attributable to the parent company | 9,546,827,355 | 9,103,154,571 |
| Minority shareholders' equity | 364,032,187 | 346,277,891 |
| Total owner's equity | 9,910,859,542 | 9,449,432,462 |
| Total Liabilities and Owner's Equity | 18,422,844,539 | 19,114,234,184 |
Legal representative: Chen Lin Principal in charge of accounting: Wang Jian Head of accounting department: Wang Wenxin
2. Balance Sheet of the Parent Company
Unit: RMB
| Item | September 30, 2019 | December 31, 2018 |
| Current asset: | ||
| Monetary capital | 1,171,946,331 | 1,700,726,151 |
| Prepayments | 278,156 | 438,167 |
| Other receivables | 3,552,175,851 | 2,912,516,245 |
| Other current assets | 300,116,326 | 300,000,000 |
| Total current assets | 5,024,516,664 | 4,913,680,563 |
| Non-current assets: | ||
| Long-term receivables | 1,200,000,000 | 1,200,000,000 |
| Long-term equity investment | 5,043,863,570 | 4,964,696,831 |
| Fixed assets | 20,833,632 | 20,926,071 |
| Intangible assets | 574,403 | 879,146 |
| Other non-current assets | 1,358,333 | 732,038 |
| Total non-current assets | 6,266,629,938 | 6,187,234,086 |
| Total assets | 11,291,146,602 | 11,100,914,649 |
| Current liabilities: | ||
| Short-term loan | 2,159,500,000 | 2,000,000,000 |
| Notes payable | 170,000,000 | |
| Accounts payable | 236,346 | 261,024 |
| Payroll payable | 34,230,524 | 41,096,020 |
| Taxes payable | 2,298,360 | 1,099,231 |
| Other payables | 1,316,949,901 | 1,668,587,218 |
| Including: interest payable | 27,375,326 | 41,572,125 |
| Dividend payable | 3,043,798 | 2,846,362 |
| Non-current liabilities due within one year | 1,200,000,000 | |
| Total current liabilities | 4,883,215,131 | 3,711,043,493 |
| Non-current liabilities: | ||
| Long term borrowing | 877,500,000 | 2,000,000,000 |
| Deferred income | 182,990,809 | 184,642,520 |
| Total non-current liabilities | 1,060,490,809 | 2,184,642,520 |
| Total Liabilities | 5,943,705,940 | 5,895,686,013 |
| Owners' equity: | ||
| Share capital | 3,108,196,163 | 2,863,277,201 |
| Capital reserve | 875,332,749 | 1,240,166,735 |
| Less: Treasury shares | 122,316,511 | 277,180,983 |
| Surplus reserve | 938,850,735 | 938,850,735 |
| Undistributed profit | 547,377,526 | 440,114,948 |
| Total owner's equity | 5,347,440,662 | 5,205,228,636 |
| Total Liabilities and Owner's Equity | 11,291,146,602 | 11,100,914,649 |
3. Consolidated Income Statement
Unit: RMB
| Item | Balance of this period | Balance of last period |
| I. Total operating income | 2,773,417,909 | 2,680,693,459 |
| Including: operating income | 2,773,417,909 | 2,680,693,459 |
| II. Total operating costs | 2,464,522,217 | 2,561,744,922 |
| Including: Operating costs | 2,029,994,395 | 2,092,944,976 |
| Taxes and surcharges | 29,661,141 | 35,812,891 |
| sales expense | 93,556,963 | 90,526,141 |
| Management costs | 149,384,270 | 168,654,876 |
| R&D expenses | 89,453,795 | 86,247,328 |
| Financial expenses | 72,471,653 | 87,558,710 |
| Including: interest expense | 77,460,347 | 109,819,290 |
| Interest income | 7,162,227 | 23,542,159 |
| Plus: other income | 35,689,521 | 32,285,163 |
| Credit impairment loss (“-“ for loss) | 223,834 | -1,891,859 |
| Asset impairment loss (“-“ for loss) | -135,326,316 | |
| Asset disposal income (“-“ for loss) | -252,568 | 112,525 |
| III. Operating profit (“-“ for loss) | 209,230,163 | 149,454,366 |
| Plus: non-operating income | 2,790,510 | 5,625,593 |
| Less: non-operating expenses | 1,162,203 | 614,072 |
| IV. Gross profit (“-“ for loss) | 210,858,470 | 154,465,887 |
| Less: Income tax expenses | 35,530,123 | 27,650,222 |
| V. Net profit (“-“ for net loss) | 175,328,347 | 126,815,665 |
| (I) Classification by business continuity | ||
| 1. Net profit from continuing operations (“-“ for net loss) | 175,328,347 | 126,815,665 |
| 2. Termination of operating net profit (“-“ for net loss) | ||
| (II) )Classification by ownership | ||
| 1. Net profit attributable to the owners of parent | 166,970,717 | 116,279,185 |
| company | ||
| 2. Minor shareholders’ equity | 8,357,630 | 10,536,480 |
| VI. Net amount of other gains after tax | 1,699,294 | 2,463,096 |
| Net amount of other gains after tax attributable to owners of parent company | 1,699,294 | 2,463,096 |
| (II)Other comprehensive income that will be reclassified into profit or loss | 1,699,294 | 2,463,096 |
| 8. Foreign currency financial statement translation difference | 1,699,294 | 2,463,096 |
| VII. Total of misc. incomes | 177,027,641 | 129,278,761 |
| Total of misc. incomes attributable to the owners of the parent company | 168,670,011 | 118,742,281 |
| Total misc gains attributable to the minor shareholders | 8,357,630 | 10,536,480 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 0.06 | 0.04 |
| (II) Diluted earnings per share | 0.05 | 0.04 |
Legal representative: Chen Lin Principal in charge of accounting: Wang Jian Head of accounting department: Wang Wenxin
4. Income Statement of the Parent Company
Unit: RMB
| Item | Balance of this period | Balance of last period |
| I. Operating income | 19,599,133 | 14,147,677 |
| Less: Operating costs | 0 | 0 |
| Taxes and surcharges | 33,330 | 144,784 |
| sales expense | ||
| Management costs | 38,951,830 | 39,974,380 |
| R&D expenses | 410,606 | 944,937 |
| Financial expenses | 32,656,871 | 23,855,339 |
| Including: interest expense | 39,315,340 | 45,996,709 |
| Interest income | 6,337,011 | 21,853,898 |
| Plus: other income | 2,146,610 | 470,940 |
| Credit impairment loss (“-“ for loss) | -44,670 | -54,340 |
| Asset disposal income (“-“ for loss) | 502,000 | |
| II. Operating profit (“-“ for loss) | -49,849,564 | -50,355,163 |
| Plus: non-operating income | 10,556 | |
| Less: non-operating expenses | 1,030,000 | 242,988 |
| III. Gross profit (“-“ for loss) | -50,879,564 | -50,587,595 |
| Less: Income tax expenses | 599,358 | |
| IV.Net profit (“-“ for net loss) | -50,879,564 | -51,186,953 |
| (I) Net profit from continuing operations (“-“ for net loss) | -50,879,564 | -51,186,953 |
| (II) Termination of operating net profit (“-“ for net loss) | ||
| VI. Total of misc. incomes | -50,879,564 | -51,186,953 |
| VII. Earnings per share: |
5. Consolidated income statement for Jan.-Sept. 2019
Unit: RMB
| Item | Balance of this period | Balance of last period |
| I. Total revenue | 7,661,655,487 | 8,151,251,436 |
| Including: Business income | 7,661,655,487 | 8,151,251,436 |
| II. Total business cost | 6,991,295,788 | 7,631,820,904 |
| Including: Business cost | 5,701,371,220 | 6,192,441,730 |
| Tax and surcharges | 86,349,138 | 107,743,437 |
| Sales expense | 266,060,362 | 262,743,395 |
| Administrative expense | 442,246,625 | 523,550,697 |
| R&D expenses | 263,729,931 | 271,905,509 |
| Financial expenses | 231,538,512 | 273,436,136 |
| Including: Interest expense | 248,491,952 | 313,350,797 |
| Interest income | 22,085,602 | 46,575,577 |
| Plus: other income | 143,444,934 | 54,760,584 |
| Credit impairment loss (“-“ for loss) | -3,541,836 | -5,545,468 |
| Asset impairment loss (“-“ for loss) | -135,326,316 | |
| Asset disposal income (“-“ for loss) | 118,401 | -455,305 |
| III. Operating profit (“-“ for loss) | 675,054,882 | 568,190,343 |
| Plus: non-operating income | 6,456,825 | 8,221,388 |
| Less: non-operating expenses | 7,455,430 | 1,492,623 |
| IV. Gross profit (“-“ for loss) | 674,056,277 | 574,919,108 |
| Less: Income tax expenses | 111,988,863 | 89,021,326 |
| V. Net profit (“-“ for net loss) | 562,067,414 | 485,897,782 |
| (I) Classification by business continuity | ||
| 1. Net profit from continuing operations (“-“ for net loss) | 562,067,414 | 485,897,782 |
| 2. Termination of operating net profit (“-“ for net loss) | ||
| (II) Classification by ownership | ||
| 1. Net profit attributable to the owners of parent company | 544,313,118 | 469,116,338 |
| 2. Minor shareholders’ equity | 17,754,296 | 16,781,444 |
| VI. Net amount of other gains after tax | 1,979,455 | 3,155,114 |
| Net amount of other gains after tax attributable to owners of parent company | 1,979,455 | 3,155,114 |
| (II)Other comprehensive income that will be reclassified into profit or loss | 1,979,455 | 3,155,114 |
| 8. Foreign currency financial statement translation difference | 1,979,455 | 3,155,114 |
| VII. Total of comprehensive income | 564,046,869 | 489,052,896 |
| Total of misc. incomes attributable to the owners of the parent company | 546,292,573 | 472,271,452 |
| Total misc gains attributable to the minor shareholders | 17,754,296 | 16,781,444 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 0.18 | 0.16 |
| (II) Diluted earnings per share | 0.17 | 0.15 |
Legal representative: Chen Lin Principal in charge of accounting: Wang Jian Head of accounting department: Wang Wenxin
6. Income statement of the Parent Company for Jan.-Sept. 2019
Unit: RMB
| Item | Balance of this period | Balance of last period |
| I. Total revenue | 57,755,818 | 44,248,959 |
| Less: Operating costs | 0 | 0 |
| Tax and surcharges | 518,198 | 391,249 |
| Sales expense | ||
| Administrative expense | 102,583,448 | 135,342,752 |
| R&D expenses | 766,444 | 2,839,736 |
| Financial expenses | 97,201,706 | 53,787,897 |
| Including: Interest expense | 113,702,087 | 94,678,140 |
| Interest income | 19,075,093 | 43,313,805 |
| Plus: other income | 3,612,857 | 2,070,606 |
| Investment income(“-“ for loss) | 390,105,325 | 231,537,606 |
| Credit impairment loss (“-“ for loss) | 49,644 | -8,222 |
| Asset disposal income (“-“ for loss) | 502,000 | 2,440 |
| II. Operating profit (“-“ for loss) | 250,955,848 | 85,489,755 |
| Plus: non-operating income | 2,403,225 | 134,006 |
| Less: non-operating expenses | 4,889,460 | 243,265 |
| III. Gross profit (“-“ for loss) | 248,469,613 | 85,380,496 |
| Less: Income tax expenses | 599,358 | |
| VI. Net profit (“-“ for net loss) | 248,469,613 | 84,781,138 |
| (I) Net profit from continuing operations (“-“ for net loss) | 248,469,613 | 84,781,138 |
| (II) Termination of operating net profit (“-“ for net loss) | ||
| VI. Total of comprehensive income | 248,469,613 | 84,781,138 |
| VII. Earnings per share: |
7. Consolidated Cash Flow Statement for Jan.-Sept. 2019
Unit: RMB
| Item | Balance of this period | Balance of last period |
| I. Net cash flow from business operation | ||
| Cash received from sales of products and providing of services | 8,428,098,411 | 8,874,070,807 |
| Tax returned | 18,305,669 | 81,506,819 |
| Other cash received from business operation | 102,269,234 | 114,952,740 |
| Sub-total of cash inflow from business activities | 8,548,673,314 | 9,070,530,366 |
| Cash paid for purchasing of merchandise and services | 5,090,478,028 | 5,549,504,979 |
| Cash paid to staffs or paid for staffs | 999,968,278 | 1,020,862,956 |
| Taxes paid | 477,640,490 | 605,975,057 |
| Other cash paid for business activities | 472,196,718 | 483,361,352 |
| Sub-total of cash outflow from business activities | 7,040,283,514 | 7,659,704,344 |
| Net cash flow generated by business operation | 1,508,389,800 | 1,410,826,022 |
| II. Cash flow generated by investing | ||
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 514,875 | 3,689,092 |
| Other investment-related cash received | 36,440,563 | 24,683,677 |
| Sub-total of cash inflow due to investment activities | 36,955,438 | 28,372,769 |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 459,047,736 | 462,402,032 |
| Other cash paid for investment activities | 53,341,928 | 93,641,334 |
| Sub-total of cash outflow due to investment activities | 512,389,664 | 556,043,366 |
| Net cash flow generated by investment | -475,434,226 | -527,670,597 |
| III. Cash flow generated by financing | ||
| Cash received as investment | 9,826,580 | |
| Cash received as loans | 2,525,743,740 | 3,871,266,495 |
| Other financing-related cash received | 500,000,000 | 46,330,808 |
| Subtotal of cash inflow from financing activities | 3,025,743,740 | 3,927,423,883 |
| Cash to repay debts | 2,600,659,040 | 3,255,750,000 |
| Cash paid as dividend, profit, or interests | 425,509,363 | 438,702,824 |
| Other cash paid for financing activities | 1,546,884,782 | 568,114,332 |
| Subtotal of cash outflow due to financing activities | 4,573,053,185 | 4,262,567,156 |
| Net cash flow generated by financing | -1,547,309,445 | -335,143,273 |
| IV. Influence of exchange rate alternation on cash and cash equivalents | 1,571,638 | 2,487,631 |
| V. Net increase of cash and cash equivalents | -512,782,233 | 550,499,783 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 2,225,126,913 | 2,459,753,165 |
| VI. Balance of cash and cash equivalents at the end of term | 1,712,344,680 | 3,010,252,948 |
8. Cash Flow Statement of the Parent Company for Jan.-Sept. 2019
Unit: RMB
| Item | Balance of this period | Balance of last period |
| I. Net cash flow from business operation | ||
| Other cash received from business operation | 35,177,783 | 45,225,208 |
| Sub-total of cash inflow from business activities | 35,177,783 | 45,225,208 |
| Cash paid to staffs or paid for staffs | 88,784,201 | 80,647,604 |
| Taxes paid | 3,219,099 | 2,520,750 |
| Other cash paid for business activities | 28,928,195 | 25,910,236 |
| Sub-total of cash outflow from business activities | 120,931,495 | 109,078,590 |
| Net cash flow generated by business operation | -85,753,712 | -63,853,382 |
| II. Cash flow generated by investing | ||
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 2,000 | 2,440 |
| Sub-total of cash inflow due to investment activities | 2,000 | 2,440 |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 4,877,721 | 5,604,540 |
| Cash paid as investment | 66,000,000 | 46,750,000 |
| Sub-total of cash outflow due to investment activities | 70,877,721 | 52,354,540 |
| Net cash flow generated by investment | -70,875,721 | -52,352,100 |
| III. Cash flow generated by financing | ||
| Cash received as investment | 9,826,580 | |
| Cash received as loans | 2,024,500,000 | 2,917,500,000 |
| Other financing-related cash received | 124,357,949 | |
| Subtotal of cash inflow from financing activities | 2,024,500,000 | 3,051,684,529 |
| Cash to repay debts | 1,787,500,000 | 2,150,000,000 |
| Cash paid as dividend, profit, or interests | 207,984,342 | 199,721,074 |
| Other cash paid for financing activities | 550,998,441 | |
| Subtotal of cash outflow due to financing activities | 2,546,482,783 | 2,349,721,074 |
| Net cash flow generated by financing | -521,982,783 | 701,963,455 |
| IV. Influence of exchange rate alternation on cash and cash equivalents | 35,235 | -1,245,875 |
| V. Net increase of cash and cash equivalents | -678,576,981 | 584,512,098 |
| Plus: Balance of cash and cash equivalents at the beginning of term | 1,699,514,334 | 1,680,672,390 |
| VI. Balance of cash and cash equivalents at the end of term | 1,020,937,353 | 2,265,184,488 |
II. Note to the Adjustment of the Financial Statements
1. Adjustment of the relevant items of the financial statements at the current year beginning according tothe new standards for financial instruments, the new standards for revenues and the new standards forlease implemented commencing from year 2019
□ Applicable √Not applicable
2. Note to the retroactive adjustment of the previous comparative data according to the new standards forfinancial instruments and the new standards for lease implemented commencing from year 2019
□ Applicable √Not applicable
III .Auditor’s ReportWhether the third quarter report has been audited or not
□Yes √No
The third quarter report of the Company has not been audited.
Board of Directors ofCSG Holding Co., Ltd.28 October 2019