Weichai Power : THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

濰柴動力股份有限公司

WEICHAI POWER CO., LTD.

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2338)

OVERSEAS REGULATORY ANNOUNCEMENT

This announcement is made pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").

Reference is made to an announcement made by Weichai Power Co., Ltd. (the "Company") on the website of Shenzhen Stock Exchange dated 30 October 2019, which is for information only. The full text of the announcement in Chinese is published on the websites of the Stock Exchange and the Company.

By order of the Board of Directors

Tan Xuguang

Chairman and CEO

Weifang, Shandong, PRC

30 October 2019

As at the date of this announcement, the executive Directors of the Company are Mr. Tan Xuguang, Mr. Zhang Quan, Mr. Xu Xinyu, Mr. Sun Shaojun, Mr. Yuan Hongming and Mr. Yan Jianbo; the non-executive Directors of the Company are Mr. Wang Yuepu, Mr. Jiang Kui, Mr. Gordon Riske and Mr. Michael Martin Macht; and the independent non-executive Directors of the Company are Mr. Zhang Zhong, Mr. Wang Gongyong, Mr. Ning Xiangdong, Mr. Li Hongwu and Mr. Wen Daocai.

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

Stock Code: 000338

Abbreviation: Weichai Power

Announcement No.: 2019-033

WEICHAI POWER CO., LTD.

THIRD QUARTERLY REPORT FOR 2019

(MAIN TEXT)

1

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

SECTION 1 IMPORTANT NOTICE

The board of directors, the Supervisory Committee and the directors, supervisors and senior management of the Company warrant that no false presentations or misleading statements are contained herein, nor with any material omissions, and severally and jointly accept responsibilities for the authenticity, accuracy and completeness of the contents of this quarterly report.

All directors have attended the Board meeting in respect of reviewing this quarterly report.

Tan Xuguang, principal of the Company, Kwong Kwan Tong, principal in‐charge of accounting and Li Xia, head of accounting department (in charge person of accounting), warrant that the financial statements contained in the quarterly report are true, accurate and complete.

2

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

SECTION 2 BASIC INFORMATION OF THE COMPANY

2.1 Major accounting data and financial indicators

Whether the Company has made retrospective adjustment or restatement of accounting data of the prior years □ Yes √No

							Unit: RMB
							Change for the end
				As at the end of	of reporting
				period as
		As at the end of the		last year
			compared to end of
		reporting period					last year
Total assets (RMB)	223,726,604,498.05			205,276,365,174.18	8.99%
Net assets attributable to
shareholders of	42,877,114,285.21			39,313,734,834.02	9.06%
listed company (RMB)
							Change for the period from
			Change for the			the beginning of the year
			From the beginning	to the end of the reporting
			reporting period
		Reporting period
		of the year to the	period over the
			over the
				end of the reporting	corresponding
			corresponding
			period	period of last year
			period of last year
Revenue (RMB)	35,845,761,369.43	-0.20%	126,708,257,889.91	7.21%
Net profit attributable to
shareholders of listed company	1,770,753,119.83	10.07%	7,058,241,497.72	17.61%
(RMB)
Net profit attributable to
shareholders of listed company	1,494,633,694.65	-0.93%	6,447,076,829.66	13.35%
after extraordinary gain/loss
(RMB)
Net cash flows from operating	--	--	4,014,711,229.81	-38.15%
activities (RMB)
Basic earnings per share	0.22	10.95%	0.89	18.55%
(RMB/share)
Diluted earnings per share	0.22	10.95%	0.89	18.55%
(RMB/share)
Weighted average return on net	4.15%	-0.18%	17.20%	0.73%
assets
	Extraordinary gain/loss items and amounts
	√ Applicable □ N/A
							Unit: RMB
	Item			Amount from the beginning		Description
			of the year to the end of the
				reporting period
							3

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

Gains or losses from disposal of non-current assets (including the
part of assets impairment provision already made and written	103,406,089.71
off)
Government subsidy accounted into profit and loss for the
current period, excluding those closely associated with the	140,420,761.47
business of the Company which were given in a fixed amount or
volume in compliance with state standard
Profit and loss from debt restructuring	8,891,743.08
Profit and loss on the changes in fair value generated from
financial assets held for trading, derivative financial
assets, financial liabilities held for trading and derivative
financial liabilities and investment income received from
disposal of financial assets held for trading, derivative	436,033,421.23
financial assets, financial liabilities held for trading,
derivative financial liabilities and other debt investments,
other than effective hedging business relating to ordinary
operating business of the Company
Reversal of impairment provision in respect of receivables and
contract assets for which impairment test is conducted	6,768,474.42
separately
Other non-operating income and expenses other than the above	126,652,586.90
items
Less: Effects of income tax	106,732,364.94
Effects of minority interests (after tax)	104,276,043.81
Total	611,164,668.06	--

Notes for the Company's extraordinary gain or loss items as defined in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Extraordinary Gains or Losses and the extraordinary gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Extraordinary Gains or Losses defined as its recurring gain or loss items

□ Applicable √ N/A

During the reporting period, the Company did not define any extraordinary gain or loss items as defined and illustrated in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Extraordinary Gains or Losses as its recurring gain or loss items.

2.2 Total number of shareholders and information on shareholdings of the top ten shareholders as at the end of the reporting period

1. Number of shareholders of ordinary shares and shareholders of preference shares with resumed voting rights and information on shareholdings of the top tenshareholders

4

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

Unit: Share

Total number of shareholders of

Total number of shareholders of

preference shares with resumed

ordinary shares as at the end of the

180,939

0

voting rights as at the end of the

reporting period

reporting period, if any

f

Information on shareholdings of the top ten shareholders

Nature of

Shareholding

Number of

Number of

Pledged or frozen

Name of shareholder

shareholder

ratio

shares held

restricted

Status of

Quantity

shares held

shares

HKSCC Nominees Limited

Foreign

24.43%

1,938,406,116

shareholder

Weichai Group Holdings

State-owned legal

17.72%

1,406,100,000

1,345,905,600

Limited

person

Hong Kong Securities

Overseas legal

Clearing Company

person

5.13%407,084,690

Limited

Weifang Investment

State-owned legal

Group Company

person

3.74%

296,625,408

296,625,408

Limited

China Securities Finance

Domestic non-

Corporation Limited

state-owned legal

2.06%

163,608,906

person

IVM Technical

Overseas

Consultants Wien

1.58%

125,265,203

legal person

Gesellschaft m.b.H

Central Huijin Assets

State-owned

Management Company

legal person

1.37%

108,492,800

Limited

Shandong Enterprise

Domestic

Trust Operation

non-state- owned

0.83%

66,180,960

Company Limited

legal person

Tan Xuguang

Domestic natural

0.74%

58,842,596

44,131,947

person

Hu Zhongxiang

Domestic

0.63%

50,264,177

natural

person

Information on shareholdings of the top ten non-restricted shareholders

Name of shareholder

Number of non-restricted

Types of shares

shares held

Types of shares

Quantity

HKSCC Nominees Limited

1,938,406,116

Overseas listed

1,938,406,116

foreign shares

Hong Kong Securities Clearing Company

407,084,690

RMB

ordinary

407,084,690

Limited

shares

China Securities Finance Corporation

163,608,906

RMB

ordinary

163,608,906

Limited

shares

5

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

IVM Technical Consultants Wien	125,265,203	RMB	ordinary		125,265,203
Gesellschaft m.b.H		shares
Central Huijin Assets Management	108,492,800	RMB	ordinary
Company Limited		shares		108,492,800
Shandong Enterprise Trust Operation	66,180,960	RMB	ordinary		66,180,960
Company Limited		shares
Weichai Group Holdings Limited	60,194,400	RMB	ordinary		60,194,400
			shares
Hu Zhongxiang	50,264,177	RMB	ordinary		50,264,177
		shares
China Merchants Bank Co., Ltd. - Orient
Hong Rui Feng Flexible Allocation Mixed		RMB	ordinary
Securities Investment Fund (LOF)	43,424,254		43,424,254
		shares
(招商银行股份有限公司－东方红睿丰灵
活配置混合型证券投资基金(LOF))
Abu Dhabi Investment Authority	37,241,939	RMB	ordinary		37,241,939
		shares
Statement on the connected relationship	Among the aforesaid shareholders, Mr. Tan Xuguang is the chairman of Weichai Group
Holdings Limited. The Company is not aware whether there is any connected
or acting in concert relationship among
relationship among the aforementioned shareholders, or whether there is any acting in
the aforementioned shareholders
concert relationship among them.
Description of top 10 shareholders'	Among the top 10 shareholders of the Company, Hu Zhongxiang held 49,369,177 shares
through a client credit trading guarantee securities account of China Galaxy Securities
involvement in financing and securities
lending businesses	Co., Ltd..

Whether any of the top ten shareholders of ordinary shares and the top ten non-restricted shareholders of ordinary shares of the Company conducted any transactions on agreed repurchases during the reporting period

□ Yes √ No

None of the top ten shareholders of ordinary shares or the top ten non-restricted shareholders of ordinary shares of the Company conducted any transactions on agreed repurchases during the reporting period.

2. Total number of shareholders of preference shares and information on shareholdings of the top ten shareholders of preference shares as at the end of the reportingperiod

□ Applicable √ N/A

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WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

SECTION 3 IMPORTANT EVENTS

3.1 Information on and reasons for the changes of financial statistics and financial indicators during the reporting period

√ Applicable □ N/A

Unit: RMB

Item on Statements	As at the end of	As at the end of	Percentage	Reason
the reporting	change
	period	last year
				It is mainly attributable to the
				increase in structured deposits
				in the current period.
Financial assets held for trading	5,915,503,031.17	4,115,199,600.23	43.75%
Construction in progress				It is mainly attributable to the
5,523,692,606.42	2,848,101,239.62	93.94%	increase	in	investments	in
	some construction projects of
				the Company in the current
				year.
Short-term loans	8,037,340,704.45	5,472,765,901.24	46.86%	It is mainly attributable to the
	general	working	capital
				requirements.
Long-term payables	3,520,442,033.45	9,895,419,535.20	-64.42%	It is mainly attributable to the
	effect of implementation of
				new lease standards.
	From the	Corresponding	Percentage
Item on Statements		Reason
beginning of year	change
	to the end of	period of last year
	the reporting period
Research & development expenses	3,585,775,633.45	2,684,165,691.90	33.59%	It is mainly attributable to the
	increase in research and
				development expenditure
				during the period.
				It is mainly attributable to the
				increase	in	structured
Finance expenses	141,092,090.41	99,589,936.90	41.67%	deposits in the current period
	and the	recognition	of
				interest income in investment
				income.
Investment income				It is mainly attributable to the
	490,916,366.16	336,382,718.03	45.94%	increase	in	income	of
	structured	deposits	in	the
				current period.
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WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

Gain on change of fair value				It is mainly attributable to the
	127,437,168.43	27,992,650.96	355.25%	increase in gain on cross
				currency swap instruments.
Impairment loss of assets				It is mainly attributable to the
	-389,707,627.13	-266,412,361.68	-46.28%	increase in provision for
				decline in value of inventories.
Net cash flows from operating				It is mainly attributable to the
activities	4,014,711,229.81	6,491,451,894.12	-38.15%	impact caused by the time
	point of cash collection from
				sales of merchandises.
Net cash flows from investing				It is mainly attributable to the
activities	-6,687,742,942.65	-4,566,690,774.44	-46.45%	increase in structured deposits
	and acquisition of fixed assets
				in the current period.

3.2 Analysis and description on the progress of important events, their impacts and solutions

□Applicable √ N/A

Progress of implementation of share repurchase □Applicable √ N/A

Progress of implementation of the disposal of repurchased shares by way of centralized bidding

• Applicable √ N/A

3.3 Commitments made by the Company's de facto controllers, shareholders, connected parties, acquirers entities and other related committing parties not yet implemented during the reporting period

√ Applicable	□ N/A
The	Commitments	Type of	Contents of commitments	Time of	Period of	Implementation
commitment	by	commitment	commitments	commitments	situation
	Shaanxi	Other	I. Issues relating to the qualification	9 April 2007	Before 30	Implementation
Other	Automotive	commitments	of Shaanxi Zhongqi:		June 2007	of commitments
Group Co.,		1. The business scope of Shaanxi			was not yet
commitments
Ltd., Shaanxi		Zhongqi covers the production and sale			completed.
to medium
Heavy-duty		of full-set automobiles ("Sale and
and minority		export trade (licensed operation) of
Motor
	automobiles (excluding sedans), auto
shareholders
Company
	parts and components and engines
of the
Limited		produced by the company" as stated in
Company			its Business License of Corporate Legal

8

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

Person). According to the announcement "Vehicle Manufacturers and Products" made by the State Development and Reform Commission (the "SDRC"), Shaanxi Automotive, the other shareholder of Shaanxi Zhongqi, remained as the manufacturer of the "Shaan-qi" branded automobiles.

1. In establishing Shaanxi Zhongqi jointly with TAGC, the contribution from Shaanxi Automotive was represented by the operating assets relating to the operation of heavy-duty automobile production, whereas the corresponding undertakings and human resources were taken over by Shaanxi Zhongqi. Whilst the qualification of Shaanxi Automotive for producing and selling heavy-dutyfull-set automobileproducts shall be succeeded by Shaanxi Zhongqi, the formalities for the change of qualification have not been completed under the influence of the "Delong-league" crisis and other factors. Shaanxi Automotive has committed to cooperate in procuring the change of qualification as
   mentioned above according to the law.
   II. Issues relating to land lease:

1. Shaanxi Zhongqi leased from Shaanxi Automotive land parcels and buildings located in No. 39 and No. 71 of Xingfu Bei Road in Xincheng District, Xi'an City and Caojia Town in Qishan County.
2. Shaanxi Automotive failed to provide the relevant title documents including property ownership certificates, land use certificates or leasing registration certificates, etc.
3. Shaanxi Automotive and Shaanxi Zhongqi undertook that they

shall fully negotiate and communicate with local governments to seek elimination of the irregularities existing in the leased land and properties, within the shortest possible timeframe. Where losses are suffered by Shaanxi Zhongqi in this regard, Shaanxi Automotive shall be responsible for its full compensation.

		1.Shaanxi Fast Gear Co., Ltd., a			Implementation
Shaanxi Fast	Other	subsidiary controlled by the Company 1 December	One year	of commitments
	commitments	leased from Shaanxi Auto Gear General		was not yet
Gear Co., Ltd.	2006		completed.
	Works (currently named Shaanxi Fast
		Gear Automotive Transmission Co.,
		Ltd., and hereinafter "Fast
		Transmission") two parcels of land
		located in Daqing Road,
		Lianhu District, Xi'an City and Wu Zhang
					9

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

			Yuan Town in Qishan County and
			Shucang Village in Baoji County, both in
			Shaanxi Province. The aforesaid two
			parcels of land were acquired by Fast
			Transmission by way of allocation, but
			Fast Transmission failed to provide
			competent government authorities
			with documents testifying agreed
			leasing of the land use rights
			concerning such allocated land.
			2. SFGC leased from Fast
			Transmission buildings located in the
			west section of Daqing Road, Lianhu
			District, Xi'an City and Wu Zhang Yuan
			Town in Qishan Country and Shucang
			Village in Baoji County. For some of the
			buildings, title documents including
			property ownership certificates,
			corresponding land use rightcertificates
			and leasing registration etc. have not
			yet been obtained.
			3. Fast Transmission and SFGC
			undertook to fully negotiate
			and communicate with the local
			governments to seek lawful and
			effective regulations or adjustments to
			the leasing of land and properties
			within one year and seek elimination of
			the existing circumstances of
			irregularities in respect of the leasing of
			land parcels and properties.
			During the merger by absorption with
			TAGC, Weichai Power built some
			properties on a parcel of land acquired
			by way of land grant, allocation and			Implementation
			leasing which is to the west of Weizhou
	Weichai	Other	1 December	One year	of commitments
	Power Co.,	Road and to the south of Min Sheng	2006	was not yet
	commitments		completed.
	Ltd.	Road East Street by Weifang Diesel
			Engine Factory (currently named
			Weichai Group Holdings Limited, and
			hereinafter "Weichai Group").
			Application has been made by Weichai
			Power for the grant (transfer) of six
			parcels of land under Weichai Group
			where the aforesaid buildings are
			located, to obtain the land use rights by
			way of land grant to the aforesaid land
			parcels.
Whether the
commitments
have been	No
implemented
timely

10

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

If implementation of commitments is not yet completed, state detailed reasons for not completing implementation

of commitments and next plan

1. Regarding the commitments made by Shaanxi Automotive Group Co., Ltd. and Shaanxi Heavy‐duty Motor Company Limited

According to the Decision Concerning the Administrative and Regulatory Measures under No. (2014) 9 issued by Shandong Regulatory Bureau of China Securities Regulatory Commission (《中国证券监督管理委员会山东监管局（2014）9 号行政监 管措施决定书》), Shaanxi Automotive Group, through Weichai Power Co., Ltd., issued announcements in designated media on 13 August 2014, stating the reasons for not implementing the commitments, updates on progress, next solutions and relevant risk factors as follows: "I. Since 2007, Shaanxi Automotive has striven to transfer the qualification for producing full- set heavy-duty vehicles to Shaanxi Heavy-duty Motor Company Limited, a controlling subsidiary of Weichai Power. However, in actual practice, due to the change of austerity measures and industry policies of the state, competent authorities including the State Development and Reform Commission and the Ministry of Industry and Information Technology do not permit the segregation and partial transfer of qualification with respect to full-set automobile. As such, the "change of holder of sale and production qualification in respect of full- set heavy-duty vehicle products to Shaanxi Heavy-duty Motor Company Limited, a controlling subsidiary of Weichai Power Co., Ltd." as stated in the Decision Concerning the Administrative and Regulatory Measures under No. (2014) 92 issued by Shandong Regulatory Bureau of China Securities Regulatory Commission 《( 中国证券监督管理委员会山东监管局（2014）92 号行政监管措施决定书》) has not been completed due to the aforesaid policy ground albeit efforts made by various parties. Going forward, the Company will actively trace the changes of state policies applicable to the automobile industry. Once permitted under policies, we commit that transfer of sale and production qualification in respect of full-setheavy-duty vehicles will be completed within half a year. II. Since its establishment in 2002, Shaanxi Heavy-duty Motor Company Limited has undergone rapid and healthy development and fully safeguarded the interests of investors. The qualification issue has never had any impact on the normal operation and development of the company. This management approach has also won recognition from competent state authorities. Shareholders from both sides and relevant regulatory bodies have been satisfied with the operation, development and result of performance of the company. III. The land and buildings located at No. 39 and No. 71 of Xingfu Bei Road in Xincheng District, Xi'an City, Shaanxi Province are listed under the "Comprehensive Renovation Work Plan for the Neighborhood at Xingfu Road (《幸福路地区综合改造工作方案》)" in accordance with the Notice Concerning the Issuance of Comprehensive Renovation Work Plan for the Neighborhood at Xingfu Road (《关于印发幸福路地区综合改造工作方案的通 知》) under Shi Zheng Bang Fa No. (2013) 89 issued by the General Office of Xi'an People's Government, requiring enterprises to complete removal by the due date, and the relevant matters shall be implemented according to the government's arrangements. Shaanxi Heavy-duty Motor Company Limited moved to its registered address namely Jingwei Industrial Park, Economic and Technological Development Zone, Xi'an in 2006 and obtained state-owned land use right in respect of land parcels occupying approximately 2,700 mu, satisfying its operation and development needs. Regarding the aforesaid matters, the company will lawfully issue announcement in a timely manner through Weichai Power Co., Ltd."

2. Regarding the commitments made by Shaanxi Fast Gear Co. Ltd.

According to the Decision Concerning the Administrative and Regulatory Measures under No. (2014) 10 issued by Shandong Regulatory Bureau of China Securities Regulatory Commission (《中国证券监督管理委员会山东监管局（2014）10 号行政 监管措施决定书》), Fast Transmission, through Weichai Power Co., Ltd., stated the reasons for not implementing the commitments, updates on progress, next solutions and relevant risk factors as follows: " I. Regarding the regulations on the land and parcels and buildings located in Daqing Road, Lianhu District, Xi'an City and Wu Zhang Yuan Town in Qishan County and Shucang Village in Baoji County, both in Shaanxi Province, which were originally committed by the group for leasing to Shaanxi Fast Gear Co., Ltd., a controlling subsidiary of Weichai Power Co., Ltd., to date, the land use right certificates and property ownership certificates for the buildings located in Wu Zhang Yuan Town in Qishan County and Shucang Village in Baoji County, both in Shaanxi Province have been completed. The land use right certificate for the land parcels in Daqing Road, Lianhu District, Xi'an City has been completed, but the property ownership certificate is on hold as suggested by the government because Lianhu District is located in the zone that has been designated as part of the government's removal area. The factories located in Lianhu District, Xi'an City, Shaanxi Province has been, in accordance with the Notice by Xi'an People's Government Concerning the Administration of the Construction Projects in the Comprehensive Renovation Zone in Tumen Area(《西安市人民政府关于加强土门地区综合改造区域建设项目管理的通告》) under Shi Zheng Gao No. [2013] 4 issued by Xi'an People's Government, the land parcel has been included under the Working Plan of the Comprehensive Renovation of Tumen Area, requiring enterprises to complete removal by the due date, and the relevant matters shall be implemented according to the government's arrangements. The company shall remove on a planned and step-by-step basis and this will not affect the production operation and development of Shaanxi Fast Gear Co. Ltd. II. The group is a wholly state-owned enterprise and its reform and development has been strongly supported by Shaanxi Government and the local government for its region. Its land and properties have been endorsed by the local government and are not subject to risks. The group commits, once again, that it shall bear all losses to be incurred as a result of any failure to normally use/ failure to use those land parcels and buildings by Shaanxi Fast Gear Co. Ltd. which is in turn due to any claim of rights over those land parcels and buildings made by any third parties or imposition of any penalty by the relevant government bodies during the leasing period. Regarding the aforesaid matters, the group will lawfully issue announcement in a timely manner through Weichai Power Co., Ltd. "

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WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

3. Regarding the commitments made by Weichai Power

The 6 parcels of land proposed to be granted have been listed by Weifang People's Government as part of the overall planning for land use under the government's "From City to Industrial Park" initiative, and legal procedures for granting land to Weichai Power will no longer proceed. During the transitional period under the staged implementation of the overall planning of the "From City to Industrial Park" initiative, Weichai Power shall continue to lease those land parcels in the original manner. According to the further communication between the Company and the government, the Company shall implement, by stages, the overall planning of the government's "From City to Industrial Park" initiative.

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WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

3.4. Investments in securities

√ Applicable

□ N/A

Unit: RMB

Gain or

Accumulated

Purchase

Sale

Gain/loss for

Initial

Accounting

Carrying value at

loss on

fair value

amount

amount

the period

Carrying value

Accounted for

Source

Type of

Stock

Investment

method

the beginning of

changes

at the end of

under

Short name

fair value

for the

for the

securities

code

cost

period

included in

period

changes

period

period

equity during

arising

the period

during

the period

Investment in

Domestic

Foton Motor

Fair value

Internal funding

and overseas

600166

194,000,000.00

other

equity

measurement

145,600,000.00

12,800,000.00

158,400,000.00

equity

instruments

Domestic

1,199,540,273.14

Fair value

Investment

Internal funding

000425

XCMG

in other

and

measurement

1,006,304,269.98

411,690,684.76

1,417,994,954.74

equity

overseas

instruments

equity

Total

1,393,540,273.14

--

1,151,904,269.98

424,490,684.76

1,576,394,954.74

--

--

13

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

3.5. Entrusted wealth management

□Applicable

√ N/A

The Company had no entrusted wealth management in the reporting period.

3.6. Investments in derivatives

✓Applicable

□ N/A

Unit: in ten thousand RMB

Proportion of

Name of

Whether or

Type of

Initial

Investment

Amount

Amount

Amount of

investment to the

Actual amount of

operators

not a

acquired

disposed of

Investment

net asset of the

profit and loss

Connection

Derivatives

Investment

Effective

at the

provision for

of derivatives

connected

Expiry Date

during the

during the

at the end of

Company at the

during the

investment

amount of

Date

beginning of

impairment

investment

transaction

reporting

reporting

the Period

end of the

reporting period

derivatives

the Period

(if any)

period

period

reporting period

investment

The Hong Kong

and Shanghai

Banking

Cross Currency

30

30

Corporation

No

No

0.00

-16,132.92

2,478.12

0.04%

18,415.50

Limited, the

Swap Business

September

September

Bank of China,

2015

2020

Barclays

The Hong Kong

14

14

and Shanghai

Banking

September

September

Corporation

Limited,

Cross Currency

2017

2022

Australia and

36,024.30

No

No

0.00

8,523.64

44,679.25

0.67%

New Zealand

Swap Business

Banking Group

Limited, BNP

Paribas, JP

Morgan

Overseas

Cash flow

hedge in

non-

connecting

No

No

respect of

0.00

1 January

2019-2020

1,923.37

-2,496.72

-0.04%

-19,230.62

financial

forward

institutions

2017

etc.

exchange

contracts

Overseas

21 February

2020-2024

non-

connecting

No

No

Interest rate

0.00

2017

-6,169.55

-11,962.56

-0.18%

-12,359.60

financial

swaps hedging

institutions

etc.

Overseas

22 June

1 June 2025

non-

2018

connecting

No

No

Fair value

0.00

823.38

2,137.72

0.03%

6,809.83

financial

hedging

institutions

etc.

Domestic

Structured

27 April

27 March 2020

connecting

No

No

1,643,700.00

361,500.00

1,282,200.00

1,123,200.00

517,000.00

7.75%

16,592.73

2018

financial

deposit

institution

Total

1,643,700.00

--

--

350,467.92

1,282,200.00

1,123,200.00

551,835.81

8.27%

46,252.16

Source of derivatives investment

Internal

funding

funding

Litigation involved (if applicable)

Not applicable

Date of the announcement disclosing

23 September 2015

31 August 2017

the approval by the board of directors of

22 August 2018

derivatives investment by the Board (if

11 January 2019

any)

Risk analysis of positions in derivatives

during the reporting period and

explanations of risk control measures

There is appropriate internal control system for the management of the Company to control the relevant

(including but not limited to market risk,

liquidity risk, credit risk, operation risk,

risks. At the end of reporting period, there was no significant exposure for the positions in derivatives of

the Company.

legal risk etc.)

14

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

In the course of valuation, the Company adopted valuation techniques which were appropriate in the circumstances and for which sufficient data and other information were available for measurement, selecting inputs which were consistent with the characteristics of the assets and liabilities contemplated by market participants under the relevant assets or liabilities transactions. Priorities should be given to the use of relevant observable inputs. Where the relevant observable inputs could not be obtained in a practicablemanner or at all, unobservable inputs would be used instead.

1. On 1 July 2016, Weichai International Hong Kong Energy Group Co., Limited ("Hong Kong Energy") , a subsidiary of the Company, used the 2015 bond cross currency swaps as hedging instrument, and conducted cash flow hedging on the foreign currency bond amounting to USD400 million against the cash flow fluctuation incurred by change in exchange rates. From January to September 2019, the gain on the changes in fair value of the hedging instruments recognized in other comprehensive income amounted to RMB184,155,042.15 (EUR23,754,565.89). The amount included in the statement of profit and loss for the current period was RMB116,624,473.45 (EUR15,034,648.58). There was no material invalid hedge for theperiod. Key parameters of assumption included interest payment ratio, interest receipt ratio, frequency of interest receipt, frequency of interest payment, USD interest rate curve, EUR interest rate curve, USD/EURexchange rate curve etc.
2. The effective date of 2017 bond cross currency swaps contract of Weichai International Hong Kong Energy Group Co., Limited ("Hong Kong Energy"), a subsidiary of the Company, was 14 September 2017. The gain on the changes of fair value from January to September 2019 amounted to RMB360,243,027.80 (EUR46,760,517.62). Key parameters of assumption included interest payment ratio, interest receipt ratio, frequency of interest receipt, frequency of interest payment, USD interest rate curve, EUR interest ratecurve, USD/EUR exchange rate curve etc.

Changes in market price or product fair		(3) At the inception of hedging, KION Group AG, a subsidiary of the Company, conducted cash flow
value of invested derivatives during the
reporting period, where specific methods		hedging on forward currency contracts designated to the exchange rate risk of forecast	sale, forecast
and relevant assumptions and		purchase and firm	commitment. From January to September 2019, the post-tax loss on the changes	in
	fair value of the	hedging instruments recognized in other comprehensive income	amounted	to
parameters used shall be disclosed in the
	RMB30,425,911.20 (EUR3,924,000.00). The post-tax included in the profit or loss for the current period
analysis of derivatives' fair value
	was RMB25,657,324.20 (EUR3,309,000.00). There was no material invalid hedge for the period. Key
		parameters of assumption included contracted exchange rate, prevailing forward exchange rate, discount rate
		etc.

1. KION Group AG, a subsidiary of the Company, conducted cash flow hedging on interest rate swap contracts designated to the interest rate risk of the floating-rateborrowings for acquiring Dematic Group, a subsidiary of the Company. From January to September 2019, the amount after tax loss on the changes in fair value of the hedging instruments recognized in other comprehensive income amounted to RMB50,841,666.60 (EUR6,557,000.00). No amount was taken to profit or loss during the current period. There was no material invalid hedge for the period. Key parameters of assumption included contracted sumof payment, forward interest rate, discount rate etc.
2. On 22 June 2018, KION Group AG, a subsidiary of the Company, entered into interest rate swap contracts to conduct fair value hedging designated on the interest rate risk of the fixed-rate medium-termnotes with a face value of EUR100,000,000.00 issued this period. On 30 September 2019, the aforesaid hedged items of the Group were presented as bonds payable in the financial statements of the Group with a carrying value of RMB615,333,814.20 (EUR79,359,000.00). The carrying value of the adjustment of changes in fair value of the hedged items taken to the hedged items was RMB121,277,185.80 (EUR15,641,000.00). There was no material invalid hedge for the current period. Key parameters ofassumption included contracted sum of payment, forward interest rate, discount rate etc.

			There was a high degree of transparency of the market changes of the subject linked to the structured deposit
			business conducted by the Company with active transactions, whose fair values could be determined based
			on the prices provided or obtained by intermediary financial institutions such as banks.
	Explanations of any significant changes
	in the Company's accounting policies
	and specific accounting and auditing		No change
	principles on derivatives between the
	reporting period and the last reporting
	period
			For details, please refer to the "Independent opinion on the Company's relevant matters by independent
	Specific opinions of independent		directors of Weichai Power Co., Ltd." disclosed by the Company on 31 August 2017 and the "independent
	Directors on the derivatives investment		opinion on the launch of derivative trading business by a controlling subsidiary of the Company by
	and risk control of the Company		independent directors of Weichai Power Co., Ltd." disclosed by the Company on 22 August 2018 and 11
			January 2019.
			15

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

3.7. Meetings with researchers, public relations and interviews during the reportingperiod
✓Applicable	□ N/A
	Time	Way of reception	Type of guests	Basic information of research
3 July 2019	On-site research	Corporation	For details, please refer to the Logbook
				of Investor Relations Activities as of 3 July 2019
				disclosed by the Company on CNINFOwebsite
9 July 2019	On-site research	Corporation	For details, please refer to the Logbook of
				Investor Relations Activities as of	9 July 2019
				(I) disclosed by the Company	on CNINFO
				website
9 July 2019	On-site research	Corporation	For details, please refer to the Logbook
				of Investor Relations Activities as of 9 July 2019
				(II) disclosed by the Company on CNINFO website
15 July 2019	On-site research	Corporation	For details, please refer to the Logbook of
				Investor Relations Activities as of 15 July 2019
				disclosed by the Company on CNINFOwebsite
2 September 2019	On-site research	Corporation	For details, please refer to the Logbook
				of Investor Relations Activities as of 2 September
				2019 disclosed by the Company on CNINFO
				website
3 September 2019	On-site research	Corporation	For details, please refer to the Logbook of
				Investor Relations Activities as of 3 September
				2019 disclosed by the Company on CNINFO
				website
11 September 2019	On-site research	Corporation	For details, please refer to the Logbook of
				Investor Relations Activities as of 11 September
				2019 disclosed by the Company on CNINFO
				website
17 September 2019	On-site research	Corporation	For details, please refer to the Logbook of
				Investor Relations Activities as of 17 September
				2019 (I) disclosed by the Company on CNINFO
				website
17 September 2019	On-site research	Corporation	For details, please refer to the Logbook
				of Investor Relations Activities as of 17
				September 2019 (II) disclosed by the Company
				on CNINFO website
17 September 2019	On-site research	Corporation	For details, please refer to the Logbook of
				Investor Relations Activities as of 17 September
				2019 (III) disclosed by the Company on CNINFO
				website

16

WEICHAI POWER CO., LTD. THIRD QUARTERLY REPORT FOR 2019 (MAIN TEXT)

• 3.8. External guarantees in violation ofregulations

• Applicable ✓N/A

The Company did not have external guarantees in violation of regulations during the reporting period.

• 3.9. Non‐operating funds of the listed company occupied by its controlling shareholders and their associates

• Applicable ✓N/A

There were no non-operating funds of the listed company occupied by its controlling shareholders and their associates during the reporting period.

WEICHAI POWER CO., LTD.

Tan Xuguang, Chairman

30 October2019

17