Jiangsu Expressway : THE THIRD QUARTERLY REPORT OF 2019

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.

江 蘇 寧 滬 高 速 公 路 股 份 有 限 公 司

JIANGSU EXPRESSWAY COMPANY LIMITED

(Established in the People's Republic of China as a joint-stock limited company)

(Stock Code: 00177)

THE THIRD QUARTERLY REPORT OF 2019

1. IMPORTANT NOTICE

1. The board (the "Board") of directors (the "Directors") and the supervisory committee of Jiangsu Expressway Company Limited (the "Company") together with its directors, supervisors and the senior management warrant that the contents of this quarterly report are true, accurate and complete and that there are no false representations, misleading statements contained in, or material omissions from, this quarterly report and they jointly and severally accept legal responsibility for such contents.
2. Absent Directors

Name of absent	Position held by	Reasons for	Name of
director	absent director	absence	proxy
Ma Chung Lai	Director	Due to business	Yao Yongjia
Lawrence		engagement
Wu Xinhua	Director	Due to business	Yao Yongjia
		engagement
Hu Yu	Director	Due to business	Yao Yongjia
		engagement
Zhang Zhuting	Independent Director	Due to business	Lin Hui
		engagement

- 1 -

1. Mr. Gu Dejun, the legal representative of the Company, Mr. Sun Xibin, the accounting chief, and Ms. Ren Zhuohua, the person-in-charge of the accounting department (Accounting Supervisor), warrant the truthfulness, accuracy and completeness of the financial statements contained in this quarterly report.
2. This third quarterly report of the Company is unaudited.
3. Unless otherwise defined, names of roads and companies cited herein shall have the same meanings as those defined under the interim report of the Company as at 30 June 2019.

2. BASIC INFORMATION OF THE COMPANY

1. Major Financial Data

		Unit: yuan	Currency: RMB
			Increase/decrease
			as at the end of the
	As at the end of		Reporting Period
	the Reporting	As at the end of	compared to the end
	Period	the previous year	of the previous year
			(%)
Total assets	52,779,689,441	48,162,728,833	9.59
Net assets attributable
to shareholders of the
Company	27,670,923,793	26,137,197,732	5.87
		From the beginning
	From the of the previous year
	beginning of the	to the end of the
	year to the end	reporting period	Increase/decrease
	of the Reporting	of the previous	compared to the
	Period (January -	year (January -	corresponding period
	September)	September)	of the previous year
			(%)
Net cash flow generated from
operating activities	4,376,860,354	4,246,029,094	3.08

- 2 -

					From the beginning
				From the of the previous year
				beginning of the	to the end of the
				year to the end	reporting period	Increase/decrease
				of the Reporting	of the previous	compared to the
				Period (January -	year (January -	corresponding period
				September)	September)	of the previous year
						(%)
Operating revenue	7,496,407,822	7,641,702,887	-1.90
Net profit attributable
to shareholders of the
Company	3,558,975,772	3,652,096,620	-2.55
Net profit attributable
to shareholders of the
Company net of non-
recurring profit and loss	3,509,992,349	3,196,724,428	9.80
Weighted average return on			Decreased by 1.59
net assets (%)	13.06	14.65	percentage points
Basic earnings per share
(RMB per share)	0.7065	0.7249	-2.54
Diluted earnings per share
(RMB per share)	N/A	N/A	N/A
Items and amounts of non-recurring profit/loss
✓	Applicable		Not applicable

- 3 -

Unit: yuan Currency: RMB

Item

Gains or losses from disposal of non- current assets

Government grants included in gains or losses for the current period (except for government grants which are closely related to normal business of the Company, conformed to the requirements of State policy, and granted continuously according to certain standardized amounts or quotas)

Profit and loss of changes in fair value arising from holding of held-for- trading financial assets, derivative financial assets, held-for- trading financial liabilities and derivative financial liabilities, as well as investment gain realized from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments, except for the effective hedging activities related to ordinary business operations of the Company

Other non-operating income and expenses other than the above items

Affected minority interests (after tax) Affected income tax amount

Total

	Amount from the beginning
	of the year to the end of the
Amount for the Reporting	Reporting Period (January -
Period (July - September)	September)	Explanation
-486	-296,423
521,819	1,504,431	Compensation for
		construction of Ningchang
		Expressway recognized
		during the Reporting
		Period

40,802,107 70,562,286

3,440,698 -5,992,785

-66,236-349,709

-11,191,034-16,444,377

33,506,868 48,983,423

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2.2 Total Numbers of Shareholders, and Shareholdings of the Top Ten Shareholders and the Top Ten Holders of Circulating Shares (or Holders of Shares not Subject to Trading Restrictions) as at the End of the Reporting Period

					Unit: Share
Total number of shareholders	24,098 (including 426 holders of H Shares)
	Shareholdings of top ten shareholders
			Number
			of shares
	Number of shares		held that
	held as at the end		are subject	Shares pledged or frozen
Name of shareholders	of the Reporting		to trading	Status of	Number of	Type of
(full name)	Period	Percentage	restrictions	shares	shares	shareholders
		(%)
Jiangsu Communications	2,742,578,825	54.44	0	Nil	-	State-owned
Holding Company						legal person
Limited
China Merchants Highway	589,059,077	11.69	0	Nil	-	State-owned
Network Technology						legal person
Holdings Co., Ltd.
BlackRock, Inc.	147,121,776	2.92	0	Unknown	-	Foreign legal
						person
Mitsubishi UFJ Financial	123,202,971	2.45	0	Unknown	-	Foreign legal
Group, Inc.						person
JPMorgan Chase & Co.	106,537,872	2.11	0	Unknown	-	Foreign legal
						person
Citigroup Inc.	61,445,317	1.22	0	Unknown	-	Foreign legal
						person
Guotai Junan Securities	48,244,383	0.96	0	Unknown	-	Others
Co., Ltd.
Jiantou Zhongxin Asset	21,410,000	0.42	0	Unknown	-	Others
Management Co., Ltd.

- 5 -

			Number
			of shares
	Number of shares		held that
	held as at the end		are subject	Shares pledged or frozen
Name of shareholders	of the Reporting		to trading	Status of	Number of	Type of
(full name)	Period	Percentage	restrictions	shares	shares	shareholders
		(%)
China Pacific Life	12,616,416	0.25	0	Unknown	-	Others
Insurance Co., Ltd. -
Entrusted Investment
of China Pacific Life
Insurance Dividend
Products (Shou Zi Ying)
(Yangtze River Pension)
(中國太平洋人壽保
險股份有限公司－中
國太平洋人壽股票
紅利型產品（壽自營）
委托投資（長江養老)
Beijing Panfeng	11,998,285	0.24	0	Unknown	-	Others
Investment Management
Partnership (Limited

Partner)-Panfeng Value

Private Securities

Investment Fund(北京 磐灃投資管理合夥 企業（有限合夥)－磐 灃價值私募證券投 資基金)

- 6 -

Shareholdings of top ten holders of shares not subject to trading restrictions

	Number of
	circulating shares
	held that are not
	subject to trading	Type and number of shares
Name of shareholders	restrictions	Type	Number
Jiangsu Communications	2,742,578,825	RMB-denominated	2,742,578,825
Holding Company Limited		ordinary shares
China Merchants Highway	589,059,077	RMB-denominated	589,059,077
Network Technology		ordinary shares
Holdings Co., Ltd.
BlackRock, Inc.	147,121,776	Overseas-listed	147,121,776
		foreign shares
Mitsubishi UFJ Financial	123,202,971	Overseas-listed	123,202,971
Group, Inc.		foreign shares
JPMorgan Chase & Co.	106,537,872	Overseas-listed	106,537,872
		foreign shares
Citigroup Inc.	61,445,317	Overseas-listed	61,445,317
		foreign shares
Guotai Junan Securities Co.,	48,244,383	RMB-denominated	48,244,383
Ltd.		ordinary shares
Jiantou Zhongxin Asset	21,410,000	RMB-denominated	21,410,000
Management Co., Ltd.		ordinary shares
China Pacific Life Insurance	12,616,416	RMB-denominated	12,616,416
Co., Ltd. - Entrusted		ordinary shares
Investment of China Pacific
Life Insurance Dividend
Products (Shou Zi Ying)
(Yangtze River Pension)
( 中國太平洋人壽保險
股份有限公司－中國太
平洋人壽股票紅利型
產品（壽自營）委托投資
（長江養老)
Beijing Panfeng Investment	11,998,285	RMB-denominated	11,998,285
Management Partnership		ordinary shares
(Limited Partnership)-

Panfeng Value Private

Securities Investment Fund( 北京磐灃投資管 理合夥企業（有限合

夥)－磐灃價值私募證 券投資基金)

- 7 -

	Number of
	circulating shares
	held that are not
	subject to trading	Type and number of shares
Name of shareholders	restrictions Type	Number
Illustration on the	(1) the Company is not aware of the existence
related party/	of related party relationship or acting-in-
connected relationship	concert arrangement with respect to the above
or acting-in-concert	shareholders;
arrangement with
respect to the above	(2) during the Reporting Period, there were no
shareholders	related parties, strategic investors or ordinary
	legal persons of the Company becoming the top
	ten shareholders of the Company because of
	placing of new shares; and
	(3) the number of shares held by H shareholders is
	based on the record according to the Securities
	and Futures Ordinance of Hong Kong.
Illustration on	Nil
the preference
shareholders with
voting rights

restored and their shareholdings

2.3 Total Number of Preference Shareholders, and Shareholdings of the Top Ten Preference Shareholders and the Top Ten Holders of Preference Shares not Subject to Trading Restrictions as at the End of the Reporting Period

Applicable ✓ Not applicable

3. SIGNIFICANT EVENTS

3.1 Details of and Reasons for Material Changes in the Major Financial Statement Items and Financial Indicators of the Company

✓	Applicable		Not applicable

- 8 -

(1) Business Progress

In the third quarter of 2019, the Group's businesses are steadily progressing as planned. The Group achieved a total operating revenue of approximately RMB2,660,950,000 for the third quarter based on the PRC accounting standards, representing an increase of approximately 6.44% as compared to the corresponding period of last year.

In particular, revenue from toll business amounted to approximately RMB2,111,818,000, representing an increase of approximately 4.24% year-on-year. In the third quarter, the daily average traffic volume of Shanghai-Nanjing Expressway was 105,428 vehicles, increasing by approximately 8.23% year-on-year, of which, the average daily traffic volume of passenger vehicles was 84,640 vehicles, increasing by approximately 9.97% year-on-year, while the average daily traffic volume of trucks was 20,787 vehicles, increasing by approximately 1.68% year-on-year. The proportion of passenger vehicle traffic volume and truck traffic volume maintained relatively stable at approximately 80.28% and approximately 19.72% respectively. During the Reporting Period, the passenger vehicle and truck traffic volume of major road and bridge projects of the Company showed different levels of growth. Continuing to maintain stable growth, our operation demonstrated an overall favorable performance.

In the third quarter, as affected by the decrease of sales volume of oil products, revenue from the ancillary business of the Company amounted to approximately RMB355,449,000, representing a decrease of approximately 7.34% year-on-year. However, through proactive negotiations with the oil suppliers with an aim to improve the profit margin, in the third quarter, gross profit margin of oil products of the Company increased by approximately 2.38 percentage points year- on-year, accompanied by a year-on-year increase of approximately

3.1 percentage points in gross profit margin of ancillary services business, and the overall operating revenue from service areas recorded an increase. In terms of property business, the Company made great efforts to increase the selling rate under the existing regulation policies. The development and sales of the property projects progressed in an orderly manner, and revenue from pre-sale of property projects amounted to approximately RMB198,363,000. As the scale of delivery of the property projects during the quarter was larger as compared to the corresponding period of last year, carry-over revenue amounted to approximately RMB178,419,000, representing a year-on-year increase of approximately 138.06%. Advertising and other businesses achieved revenue of approximately RMB15,263,000, representing a decrease of approximately 1.82% year-on-year.

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In accordance with the PRC Accounting Standards, the operating cost of the Group amounted to approximately RMB1,111,870,000 for the third quarter, representing an increase of approximately 9.08% year-on-year; the operating profit amounted to approximately RMB1,658,296,000, representing an increase of approximately 8.29% year-on-year; the net profit attributable to shareholders of the Company amounted to approximately RMB1,277,367,000, representing an increase of approximately 9.74% as compared to the corresponding period of last year.

Data of average daily traffic volume and average daily toll revenue of road and bridge projects from January to September 2019

		Average daily traffic volume	Average daily toll revenue
			(vehicle/day)			(RMB'000/day)
			Corresponding			Corresponding
Road and bridge		January -	period of the	Increase/	January -	period of the	Increase/
projects		September	previous year	decrease	September	previous year	decrease
				%			%
Shanghai-Nanjing
Expressway		102,756	96,654	6.31	14,430.79	13,845.14	4.23
Ningchang Expressway	41,669	42,531	-2.03	2,573.87	2,488.99	3.41
Zhenli Expressway		15,437	13,471	14.59	760.46	711.09	6.94
Guangjing Expressway	76,756	72,603	5.72	888.96	829.61	7.15
Xicheng Expressway	84,847	82,079	3.37	1,710.81	1,680.38	1.81
Xiyi Expressway		23,856	22,402	6.49	915.37	883.31	3.63
Jiangyin Bridge		96,535	90,696	6.44	3,447.71	3,240.52	6.39
Sujiahang Expressway	70,067	65,991	6.18	3,592.02	3,333.63	7.75
Wuxi Huantaihu
Expressway		8,743	9,768	-10.50	95	100.92	-5.87
Yanjiang Expressway	56,030	54,107	3.55	4,301.64	4,149.91	3.66
Changjia Expressway	18,957	16,295	16.33	422.34	401.49	5.19
Zhendan Expressway
(Note 1)		17,276	-	-	204.83	-	-
Note 1:	Zhendan Expressway was open for traffic on 30 September 2018.

- 10 -

From January to September 2019, the Group achieved an accumulated operating revenue of approximately RMB7,496,408,000, representing a decrease of approximately 1.9% as compared to the corresponding period of last year, of which, toll revenue amounted to approximately RMB5,891,363,000, representing an increase of approximately 4.84% as compared to the corresponding period of last year; during the Reporting Period, revenue from the ancillary business amounted to approximately RMB966,431,000, representing a decrease of approximately 12.31% year-on-year, which mainly due to the decrease in sales volume of oil products as compared to the corresponding period of last year as the gas stations were closed for renovation and construction of two- compartment oil tanks; the cumulative revenue from pre-sale of property projects under property business during the Reporting Period amounted to approximately RMB906,525,000, and the carry-over revenue from sales amounted to approximately RMB590,222,000, representing a decrease of approximately 32.37% year-on year since the scale being delivered and carried forward during the Reporting Period was less compared to the corresponding period of last year; and revenue from advertising and other businesses amounted to approximately RMB48,392,000, representing an increase of approximately 1.56% as compared to the corresponding period of last year.

In terms of business cost, the Group recorded an accumulated operating cost of approximately RMB3,067,514,000 from January to September, representing a decrease of approximately 6.35% as compared to the corresponding period of last year, mainly due to year-on-year decrease in cost of ancillary business and property business.

The Group recorded an accumulated operating profit of approximately RMB4,653,479,000 from January to September, representing a decrease of approximately 0.73% as compared to the corresponding period of last year. The Group achieved net profit attributable to shareholders of the Company of approximately RMB3,558,976,000, and earnings per share of approximately RMB0.7065, representing a decrease of approximately 2.54% as compared to the corresponding period of last year, which was mainly due to the Company's recognition of valuation gain of approximately RMB430,500,000 upon acquisition of Hanwei Company in accordance with the standards on business combination involving enterprises not under common control during the corresponding period of the previous year. During the Reporting Period, net profit attributable to shareholders of the Company after deduction of non-recurring profits or losses amounted to RMB3,509,992,000， representing an increase of 9.8% year-on-year.

- 11 -

(2) Changes in Financial Indicators

Details of and reasons for material changes in the major financial statement items and financial indicators are as follows:

Reasons for Material Changes in Balance Sheet Items as at 30 September 2019

				Unit: yuan	Currency: RMB
	As at the
	end of the	As at the end
	Reporting	of the previous	Increase/
Item	Period	year	decrease	Reason of change
			%
Cash and bank	539,125,063	649,761,591	-17.03	The main reason was that, during the
balances				Reporting Period, Changyi Company and
				Yichang Company, both being subsidiaries
				of the Company, made payments for the
				construction of projects.
Held-for-trading	1,298,183,472	683,326,861	89.98	Mainly due to the increase of wealth
financial assets				management products held by the Group at
				the end of the Reporting Period as compared
				to that at the beginning of the period.
Accounts receivable	493,563,292	321,158,727	53.68	Mainly due to the increase of toll fees
				receivable at the end of the Reporting Period
				as compared to the beginning of the period.
Prepayments	114,008,750	29,060,041	292.32	Mainly due to the increase in prepayments
				for construction at the end of the Reporting
				Period as compared to the beginning of the
				period.
Other receivables	134,373,976	37,833,951	255.17	Mainly due to the cash dividends declared and
				pending to be paid by associates during the
				Reporting Period.
Other current assets	270,213,233	130,656,171	106.81	Mainly due to the increase in the Group's taxes
				and fees related to pre-sales of real estate at
				the end of the Reporting Period as compared
				to the beginning of the period.
Other investments in	4,409,542,536	3,035,293,680	45.28	Mainly due to the increase in the book value
equity instruments				of other investments in equity instruments
				recognized at fair value by the Group and
				the additional subscription for the asset
				management scheme of Fuanda Fund during
				the Reporting Period.

- 12 -

	As at the
	end of the	As at the end
	Reporting	of the previous	Increase/
Item	Period	year	decrease	Reason of change
			%
Right-of-use assets	4,397,556	-	- The Company recognized the right-of-use assets
				and lease liabilities in respect of related
				leases during the lease terms according
				to the Accounting Standards for Business
				Enterprises No. 21.
Construction in	12,839,225,212	10,087,826,331	27.27	Mainly due to investments in the construction
progress				of road and bridge projects in progress.
Deferred income tax	134,762,296	197,447,059	-31.75	Mainly due to the adjustment of other
assets				comprehensive income based on the
				fair value of other investments in equity
				instruments held by the Company, the
				adjustment to the deferred income tax assets
				accordingly, and the completion of making
				up losses in previous years by Ningchang
				Zhenli Company, a subsidiary of the
				Company, during the Reporting Period.
Notes payable	350,000,000	-	- Mainly due to the issuance of bank acceptances
				by Wufengshan Toll Bridge Company, a
				subsidiary, for the payment of construction
				of project during the Reporting Period.
Accounts payable	764,836,161	1,090,607,320	-29.87	Mainly due to the decrease in payables for the
				construction of projects at the end of the
				Reporting Period.
Receipts in advance	113,685,057	73,454,895	54.77	Mainly due to the increase in advance lease
				payments from the service areas received at
				the end of the Reporting Period as compared
				to the beginning of the period.
Contract liabilities	1,267,240,258	962,200,983	31.70	Mainly due to the increase in pre-sales of real
				estate projects at the end of the Reporting
				Period as compared to the beginning of the
				period.
Other payables	349,969,078	270,459,371	29.40	Mainly due to the increase in temporary earnest
				money from housing purchase at the end
				of the Reporting Period as compared to the
				beginning of the period.
Non-current liabilities	124,943,848	381,700,433	-67.27	Mainly due to the repayment of part of long-
due within one year				term borrowings due within one year during
				the Reporting Period.

- 13 -

	As at the
	end of the	As at the end
	Reporting	of the previous	Increase/
Item	Period	year	decrease	Reason of change
			%
Other current	3,836,056,163	2,212,191,672	73.41	Mainly due to the increase in balance of ultra-
liabilities				short term bonds as a result of new issuance
				during the Reporting Period as compared to
				the beginning of the period.
Other comprehensive	1,129,941,806	837,827,667	34.87	Mainly due to the adjustment of other
income				comprehensive income based on the
				fair value of other investments in equity
				instruments held by the Group during the
				Reporting Period.

Reasons for material changes in income statement items during the Reporting Period

			Unit: yuan	Currency: RMB
	From the
	beginning of
	the year to
	the end of the	Corresponding
	Reporting	period of	Increase/
Item	Period	last year	Decrease Reason of change
			%
Taxes and surcharges	82,251,080	128,824,700	-36.15 The year-on-year decrease in taxes and
			surcharges was mainly due to the year-on-
			year decrease in the delivery scale of the
			property projects of Ninghu Properties, a
			subsidiary of the Company, and the income
			from delivery was mostly generated after
			replacement of business tax with value-added
			tax during the Reporting Period.
Selling expenses	27,383,586	19,452,446	40.77 The year-on-year increase in selling
			expenses was mainly due to the increase
			in advertisement and promotion fee and
			commission fee for agent of real estate sales
			of Ninghu Properties and Hanwei Company
			during the Reporting Period.
Gain on changes in fair	58,202,624	42,263,032	37.72 Mainly due to the year-on-year increase in the
value			fair value of other non-current financial assets
			and trading financial assets held by Ninghu

Investment, a subsidiary of the Company, during the Reporting Period.

- 14 -

	From the
	beginning of
	the year to
	the end of the	Corresponding
	Reporting	period of	Increase/
Item	Period	last year	Decrease Reason of change
			%
Investment income	759,099,755	945,289,473	-19.70 Notwithstanding the year-on-year increase
			in the investment income contributed
			by the joint venture companies, and the
			bonus received from investment in other
			equity instruments during the Reporting
			Period, there was a year-on-year decrease
			in investment income as a result of the
			Company's recognition of valuation
			gain of approximately RMB430,000,000
			upon acquisition of Hanwei Company in
			accordance with the standards on business
			combination involving enterprises not under
			common control during the corresponding
			period of the previous year.
Gain on disposal of	-296,423	-759,212	-60.96 Mainly due to the year-on-year decrease in the
assets			loss from disposal of assets.
Other income	6,153,501	1,550,944	296.76 Mainly due to the inclusion of deductible
			portion into other income as a result of the
			implementation of national policies related
			to deepening the reform of value-added tax,
			which stipulated that commencing from 1
			April 2019, an extra 10% shall be credited
			against deductible input VAT, in line with
			the policy for deduction of tax amount
			payable.
Other comprehensive	290,271,389	1,130,197,136	-74.32 Mainly due to the year-on-year decrease in fair
income, net of tax			value growth of other equity instruments
			investment held by the Group recognized
			during the Reporting Period.

- 15 -

Reason for change in cash flow statement items during the Reporting Period

				Unit: yuan	Currency: RMB
	From the
	beginning of
	the year to
	the end of the	Corresponding
	Reporting	period of	Increase/
Item	Period	last year	Decrease	Reason of change
			%
Net cash flow	-4,076,549,042	-2,297,930,749	77.40	Mainly due to the increase in external
generated from				investment expenditures such as net cash
investment activities				outflow from the purchase of wealth
				management products and investment of the
				asset management scheme of Fuanda Fund
				during the Reporting Period.
Net cash flow	-338,909,583	-1,582,625,192	-78.59	Mainly due to the year-on-year decrease in net
generated from				cash outflow from debt repayment during the
financing activities				Reporting Period.

3.2 Analysis of Progress of Significant Events and Their Impact and Solutions

✓

Applicable

Not applicable

Proactively promoting the removal of provincial boundary toll station

In accordance with the Implementation Plan for Deepening the Reform of

Toll Road System and Eliminating of Provincial Boundary Toll Stations in the Expressway 《( 深 化 收 費 公 路 制 度 改 革 取 消 高 速 公 路 省 界 收 費

站 實 施 方 案》) issued by the State Council, under the requirements of the Ministry of Transport and Jiangsu Province, the Company has been pressing ahead the "four major projects" concerning the construction of the ETC gantry system, ETC lane renovation, construction of overload inspection system and the removal of provincial boundary toll station in a steady manner to ensure all projects can be completed by the end of this year so as to meet the requirement of operating under the same system nationwide from 1 January 2020 as required by the Ministry of Transport and accomplish this significant livelihood project in respect of transport successfully.

- 16 -

Investment and establishment of the phase II real estate parent fund

As considered and approved at the 8th meeting of the ninth session of the board of directors of the Company held on 12 April 2019, Ninghu Investment, a wholly-owned subsidiary of the Company, after ensuring that it has sufficient liquidity in meeting its requirements for its ordinary course of operation, would use its internal resources in an amount of no more than RMB300 million to participate in the investment and establishment of the phase II real estate parent fund; On 11 July 2019, Ninghu Investment, Luode Fund Company and its wholly-owned subsidiary Nanjing Luode Investment Management Co., Ltd. ( 南 京 洛 德 投 資 管 理 有 限 公 司), Nanjing Public Utilities Development Co., Ltd. and Hongyuan Huizhi Investment Co., Ltd. ( 宏 源 匯 智 投 資 有 限 公 司) and its wholly-owned subsidiary Shenyin

• Wanguo Innovation Capital Management Co., Ltd. ( 申 銀 萬 國 創 新 資 本 管 理 有 限 公 司) signed a limited partnership agreement, pursuant to which, all parties jointly established the Phase II Parent Real Estate Fund upon reaching unanimity through consultation. The total size of the fund shall be no more than RMB1 billion, in which Ninghu Investment will invest no more than RMB300 million and other partners will invest no more than RMB700 million. For details of the progress of such investment project, please refer to the announcements published by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on 12 July 2019 and on the website of the Stock Exchange (www.hkex.com.hk) on 12 July 2019, respectively. As at the end of the Reporting Period, Ninghu Investment made capital contribution in an amount of RMB191,557,000.

Equity participation in Group Finance Company

As considered and approved at the 11th meeting of the ninth session of the board of directors of the Company held on 30 July 2019, additional capital contributions to Group Finance Company was made by the Company and Communications Holding, the controlling shareholder of the Company. In particular, each of Communications Holding and the Company made cash contribution of RMB303.4 million and RMB606.8 million, respectively. After such capital contribution, the Company holds 25% of the total share capital of Group Finance Company; at the 2019 first extraordinary general meeting of the Company held on 26 September 2019, the resolution was considered and approved and Mr. Sun Xibin and Mr. Yao Yongjia, both being directors of the Company, were authorised to deal with such consequential related matters as signing of contracts and appropriation and approval of funds. For details of the progress of such investment project, please refer to the announcements published by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on 31 July 2019 and 27 September 2019 and on the website of the Stock Exchange (www.hkex.com.hk) on 31 July 2019 and 27 September 2019, respectively.

- 17 -

Consolidation by merger between investee companies

As considered and approved at the 12th meeting of the ninth session of the board of directors of the Company held on 23 August 2019, Sujiahang Company and Sujiayong Company, both being investee companies of the Company, initiated the consolidation by merger through capital contribution and shares of the same class holding the same rights . The Company subscribed for RMB80,748,700 of the additional registered capital of Sujiahang Company with its entire capital contribution in Sujiayong Company. The Company's shareholding in Sujiahang Company was adjusted from 31.55% to 30.01% after the consolidation. For details of such investment project, please refer to the announcements published by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on 26 August 2019 and on the website of the Stock Exchange (www.hkex.com.hk) on 26 August 2019, respectively. As at the publication date of this report, the consolidation by merger was completed.

3.3 Undertakings not being Fully Performed Timely during the Reporting Period

Applicable ✓ Not applicable

3.4 Warning and Explanation of Reasons in the Forecast of the Possible Aggregate Net Profits from the Beginning of the Year to the End of the Next Reporting Period Becoming a Loss or Significant Changes Compared to the Corresponding Period of the Previous Year

Applicable ✓ Not applicable

Company Jiangsu Expressway Company Limited Legal representative Gu Dejun

Date 25 October 2019

- 18 -

IV. APPENDIX

4.1 Financial Statements

Consolidated Balance Sheet

30 September 2019

Prepared by: Jiangsu Expressway Company Limited

Unit: yuan Currency: RMB Type of Audit: Unaudited

	30 September	31 December
Items	2019		2018
Current Assets:
Cash and bank balances	539,125,063	649,761,591
Held-for-trading financial assets	1,298,183,472	683,326,861
Notes receivable	-	1,681,265
Accounts receivable	493,563,292	321,158,727
Prepayments	114,008,750	29,060,041
Other receivables	134,373,976	37,833,951
Including: Interest receivable	-	-
Dividends receivable	87,928,169	4,989,960
Inventories	3,938,382,530	4,045,555,776
Other current assets	270,213,233	130,656,171
Total Current Assets	6,787,850,316		5,899,034,383
Non-current Assets:
Long-term equity investments	6,261,679,860		5,702,454,036
Other equity instruments investment	4,409,542,536	3,035,293,680
Other non-current financial assets	1,314,630,180	1,111,415,422
Investment properties	18,529,932	19,207,033
Fixed assets	1,725,276,825	1,814,133,323
Construction in progress	12,839,225,212	10,087,826,331
Right-of-use assets	4,397,556	-
Intangible assets	19,257,400,971	20,280,055,629
Long-term deferred expenses	11,438,187	1,654,145
Deferred income tax assets	134,762,296	197,447,059
Other non-current assets	14,955,570	14,207,792
Total Non-current Assets	45,991,839,125		42,263,694,450
TOTAL ASSETS	52,779,689,441		48,162,728,833

- 19 -

	30 September	31 December
Items	2019		2018
Current Liabilities:
Short-term borrowings	1,510,000,000	1,580,000,000
Notes payable	350,000,000	-
Accounts payable	764,836,161	1,090,607,320
Receipts in advance	113,685,057	73,454,895
Employee remuneration payable	3,043,520	2,917,980
Taxes payable	299,233,043	271,704,890
Other payables	349,969,078	270,459,371
Including: Interest payable	67,063,378	93,089,893
Dividends payable	97,197,530	88,979,103
Contract liabilities	1,267,240,258	962,200,983
Non-current liabilities due within one
year	124,943,848	381,700,433
Other current liabilities	3,836,056,163	2,212,191,672
Total Current Liabilities	8,619,007,128		6,845,237,544
Non-current liabilities:
Long-term borrowings	8,123,471,972		7,688,853,902
Bonds payable	3,988,527,122	3,980,548,108
Expected liabilities	-	461,700
Deferred income	41,616,638	43,109,916
Deferred income tax liabilities	278,668,422	250,660,721
Total Non-current Liabilities	12,432,284,154		11,963,634,347
TOTAL LIABILITIES	21,051,291,282		18,808,871,891

- 20 -

		30 September	31 December
Items			2019		2018
OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)
Paid-up capital (or share capital)	5,037,747,500	5,037,747,500
Capital reserve		10,428,388,235	10,428,388,235
Other comprehensive income	1,129,941,806	837,827,667
Surplus reserve		3,411,194,285	3,411,194,285
Retained profits		7,663,651,967	6,422,040,045
Total owners' equity (or shareholders'
equity) attributable to the parent
company		27,670,923,793		26,137,197,732
Minority interests		4,057,474,366		3,216,659,210
TOTAL OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)	31,728,398,159		29,353,856,942
TOTAL LIABILITIES AND OWNERS'
EQUITY (OR SHAREHOLDERS'
EQUITY)		52,779,689,441		48,162,728,833
			Person-in-charge of the
Legal representative:	Accounting chief:	accounting department:
Gu Dejun	Sun Xibin	Ren Zhuohua

- 21 -

Balance Sheet of the Parent Company

30 September 2019

Prepared by: Jiangsu Expressway Company Limited

Unit: yuan Currency: RMB Type of Audit: Unaudited

		30 September	31 December
Items	2019		2018
Current Assets:
Cash and bank balances	86,965,420	100,931,394
Held-for-trading financial assets	970,000,000	193,000,000
Accounts receivable	320,171,215	218,353,103
Prepayments	18,124,166	8,598,094
Other receivables	44,849,156	44,321,154
Including: Interest receivable	26,299,806	30,590,068
Dividends receivable	4,989,960	4,989,960
Inventories	13,750,523	11,305,004
Other current assets	18,465,532	7,000,000
Total Current Assets	1,472,326,012		583,508,749
Non-current Assets:
Long-term equity investments	15,690,497,656		14,290,944,294
Other equity instruments investment	3,323,782,536	1,933,153,680
Fixed assets	912,877,872	948,663,656
Construction in progress	104,624,577	50,503,852
Intangible assets	9,573,777,625	10,087,165,531
Long-term deferred expenses	7,783,019	-
Deferred income tax assets	-	45,120,214
Other non-current assets	2,069,003,645	2,604,419,552
Total Non-current Assets	31,682,346,930		29,959,970,779
TOTAL ASSETS	33,154,672,942		30,543,479,528

- 22 -

		30 September	31 December
Items			2019			2018
Current Liabilities:
Short-term borrowings		2,205,000,000	1,690,000,000
Accounts payable		320,015,619	491,880,235
Receipts in advance		102,039,042	68,061,949
Employee remuneration payable		1,478,744	2,242,393
Taxes payable		124,802,600	135,467,755
Other payables		174,628,053	169,847,846
Including: Interest payable			58,616,719	61,780,551
Dividends payable		97,197,530	88,979,103
Non-current liabilities due within one
year			1,752,389	1,700,433
Other current liabilities		3,836,056,163	2,212,191,672
Total Current Liabilities		6,765,772,610			4,771,392,283
Non-current liabilities:
Long-term borrowings			13,573,972			15,303,902
Bonds payable		3,988,527,121	3,980,548,108
Expected liabilities			-	461,700
Deferred income tax liabilities		17,537,000	-
Total Non-current Liabilities	4,019,638,093			3,996,313,710
TOTAL LIABILITIES		10,785,410,703			8,767,705,993
OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)
Paid-up capital (or share capital)	5,037,747,500			5,037,747,500
Capital reserve		7,327,650,327	7,327,650,327
Other comprehensive income	592,042,341	289,485,952
Surplus reserve		2,518,873,750	2,518,873,750
Retained profits		6,892,948,321	6,602,016,006
TOTAL OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)	22,369,262,239			21,775,773,535
TOTAL LIABILITIES AND OWNERS'
EQUITY (OR SHAREHOLDERS'
EQUITY)		33,154,672,942			30,543,479,528
			Person-in-charge of the
Legal representative:	Accounting chief:	accounting department:
Gu Dejun	Sun Xibin	Ren Zhuohua

- 23 -

Consolidated Income Statement

January - September 2019

Prepared by: Jiangsu Expressway Company Limited

		Unit: yuan Currency: RMB Type of Audit: Unaudited
			Third	Third	First three	First three
			quarter of	quarter of	quarters of	quarters of
			2019	2018	2019	2018
			(July -	(July -	(January to	(January to
Items		September)	September)	September)	September)
I.	Total operating income	2,660,949,953	2,499,923,053	7,496,407,822	7,641,702,887
	Including: Operating income	2,660,949,953	2,499,923,053	7,496,407,822	7,641,702,887
II.	Total operating costs	1,324,089,286	1,228,197,437	3,665,958,491	3,942,271,026
	Including: Operating costs	1,111,869,794	1,019,287,471	3,067,514,181	3,275,660,646
		Taxes and surcharges	26,847,764	21,429,362	82,251,080	128,824,700
		Selling expenses	8,753,254	7,860,157	27,383,586	19,452,446
		Administrative
		expenses	49,896,240	46,375,645	135,570,172	131,875,927
		Financial expenses	126,722,234	133,244,802	353,239,472	386,457,307
		Including: Interest
		expenses	126,464,887	118,235,982	354,118,906	357,933,618
		Interest
		income	2,649,141	2,114,370	6,226,735	5,596,174
	Add:	Other income	3,541,406	518,133	6,153,501	1,550,944
		Investment income
		(loss is indicated
		by "-")	280,900,114	214,757,204	759,099,755	945,289,473
		Including: Income
		from investments in
		associates and joint
		ventures	186,036,950	176,595,355	541,194,786	461,404,311
		Gains from changes
		in fair values (loss
		is indicated by "-")	36,994,733	44,857,499	58,202,624	42,263,032
		Credit impairment
		losses (loss is
		indicated by "-")	-	-	-130,000	-
		Gains from disposal
		of assets (loss is
		indicated by "-")	-486	-543,707	-296,423	-759,212

- 24 -

		Third	Third	First three	First three
		quarter of	quarter of	quarters of	quarters of
		2019	2018	2019	2018
		(July -	(July -	(January to	(January to
Items	September)	September)	September)	September)
III.	Operating profit (loss is
	indicated by "-")	1,658,296,434	1,531,314,745	4,653,478,788	4,687,776,098
	Add: Non-operating income	7,193,823	1,415,955	8,802,302	10,698,524
	Less: Non-operating expenses	3,753,125	5,731,535	14,795,087	20,760,660
IV.	Total profit (total loss is
	indicated by "-")	1,661,737,132	1,526,999,165	4,647,486,003	4,677,713,962
	Less: Income tax expenses	352,490,546	331,937,259	1,003,758,488	943,423,993
V.	Net profit (net loss is indicated
	by "-")	1,309,246,586	1,195,061,906	3,643,727,515	3,734,289,969

1. Classified by continuity of operations

1. Net profit from continuing operations (net loss

	is indicated by "-")	1,309,246,586	1,195,061,906	3,643,727,515	3,734,289,969
(II) Classified by ownership of
	equity
1.	Net profit attributable
	to shareholders of
	the parent company
	(net loss is indicated
	by "-")	1,277,366,744	1,163,954,555	3,558,975,772	3,652,096,620
2.	Minority interests (net
	loss is indicated by
	"-")	31,879,842	31,107,351	84,751,743	82,193,349

- 25 -

		Third	Third	First three	First three
		quarter of	quarter of	quarters of	quarters of
		2019	2018	2019	2018
		(July -	(July -	(January to	(January to
Items		September)	September)	September)	September)
VI. Other comprehensive income,
net of tax	-241,016,260	-168,248,282	290,271,389	1,130,197,136
Other comprehensive income
attributable to owners of the
parent company, net of tax	-235,488,011	-146,135,282	292,114,139	983,505,962
(I) Other comprehensive
	income that cannot be
	reclassified to profit or
	loss	-235,488,011	-92,877,000	292,114,139	708,609,984
1. Re-measurement of
	changes in defined
	benefit plan	-	-	-	-
2.	Other comprehensive
	income that cannot
	be reclassified into
	profit or loss under
	equity method	-10,323,218	-	114,584,747	-
3.	Changes in fair
	value of other
	equity instruments
	investment	-225,164,793	-92,877,000	177,529,392	708,609,984
(II) Other comprehensive
	income that will be
	reclassified to profit or
	loss	-	-53,258,282	-	274,895,978
1.	Other comprehensive
	income that can be
	reclassified to profit
	or loss under equity
	method	-	-53,258,282	-	274,895,978
Other comprehensive
	income attributable to
	minority shareholders, net
	of tax	-5,528,249	-22,113,000	-1,842,750	146,691,174

- 26 -

		Third	Third	First three	First three
		quarter of	quarter of	quarters of	quarters of
		2019	2018	2019	2018
		(July -	(July -	(January to	(January to
Items		September)	September)	September)	September)
VII. Total comprehensive income	1,068,230,326	1,026,813,624	3,933,998,904	4,864,487,105
Total comprehensive income
attributable to owners of the
parent company	1,041,878,733	1,017,819,273	3,851,089,911	4,635,602,582
Total comprehensive income
attributable to minority
shareholders	26,351,593	8,994,351	82,908,993	228,884,523
VIII. Earnings per share:
(1)	Basic earnings per share
	(RMB/share)	0.2500	0.2310	0.7065	0.7249
(2)	Diluted earnings per share
	(RMB/share)	N/A	N/A	N/A	N/A

For the merger of enterprise under common control during the Reporting Period, the net profit recorded by the merged party before the merger was RMB0, and the net profit recorded by the merged party in the previous period was RMB0.

		Person-in-charge of the
Legal representative:	Accounting chief:	accounting department:
Gu Dejun	Sun Xibin	Ren Zhuohua

- 27 -

Income Statement of the Parent Company

January - September 2019

Prepared by: Jiangsu Expressway Company Limited

Unit: yuan Currency: RMB Type of Audit: Unaudited

	Third	Third	First three	First three
	quarter of	quarter of	quarters of	quarters of
	2019	2018	2019	2018
	(July -	(July -	(January to	(January to
Item	September)	September)	September)	September)
I. Operating income	1,731,538,853	1,726,024,198	4,853,585,779	4,849,502,367
Less: Operating costs	678,611,993	667,447,338	1,793,715,022	1,916,799,429
Taxes and surcharges	11,578,470	11,817,133	32,574,562	34,478,187
Administrative expenses	35,377,742	34,185,801	93,100,690	93,599,131
Financial expenses	87,820,543	111,498,724	226,333,570	293,088,871
Including: Interest
expenses	85,908,977	95,615,694	223,024,190	276,398,001
Interest income	950,747	557,785	1,870,663	1,785,949
Add: Other income	2,988,160	-	4,615,983	-
Investment income (loss is
indicated by "-")	240,429,912	178,509,336	601,715,193	497,410,115
Including: Income
from investments in
associates and joint
ventures	129,846,030	117,581,924	375,772,115	304,042,483
Gains from disposal of
assets (loss is indicated
by "-")	-	-27,314	67,584	66,408
II. Operating profit (loss is
indicated by "-")	1,161,568,177	1,079,557,224	3,314,260,695	3,009,013,272
Add: Non-operating income	5,974,377	826,515	7,410,392	827,018
Less: Non-operating expenses	2,937,756	4,733,519	10,616,219	15,523,428
III. Total profit (total loss is
indicated by "-")	1,164,604,798	1,075,650,220	3,311,054,868	2,994,316,862
Less: Income tax expenses	235,895,200	230,517,074	702,758,703	650,026,326

- 28 -

		Third	Third	First three	First three
		quarter of	quarter of	quarters of	quarters of
		2019	2018	2019	2018
		(July -	(July -	(January to	(January to
Item		September)	September)	September)	September)
IV.	Net profit (net loss is indicated
	by "-")	928,709,598	845,133,146	2,608,296,165	2,344,290,536
	(I) Net profit from continuing
	operations (net loss is
	indicated by "-")	928,709,598	845,133,146	2,608,296,165	2,344,290,536
V.	Other comprehensive income,
	net of tax	-204,161,261	-20,828,282	302,556,389	152,255,978
	(I) Other comprehensive income
	that cannot be subsequently
	reclassified to profit or loss	-204,161,261	32,430,000	302,556,389	-122,640,000

1. Re-measurement of changes in defined

	benefit plan	-	-	-	-
2.	Other comprehensive
	income that cannot be
	reclassified into profit or
	loss under equity method	-10,323,218	-	114,584,747	-
3.	Changes in the fair value
	of investments in other
	equity instruments	-193,838,043	32,430,000	187,971,642	-122,640,000

1. Other comprehensive income that will be reclassified to

profit or loss	-	-53,258,282	-	274,895,978
1. Other comprehensive
income that can be
reclassified to profit or
loss under equit method	-	-53,258,282	-	274,895,978
VI. Total comprehensive income	724,548,337	824,304,864	2,910,852,554	2,496,546,514
			Person-in-charge of the
Legal representative:	Accounting chief:	accounting department:
Gu Dejun	Sun Xibin	Ren Zhuohua

- 29 -

Consolidated Cash Flow Statement

January - September 2019

Prepared by: Jiangsu Expressway Company Limited

Unit: yuan Currency: RMB Type of Audit: Unaudited

	First three		First three
	quarters of		quarters of
	2019	2018
	(January -		(January -
Item	September)		September)
I. Cash flows from operating
activities:
Cash receipts from the sale of goods
and the rendering of services	7,936,752,149	7,572,180,183
Other cash receipts relating to
operating activities	128,510,905	116,412,438
Subtotal of cash inflows from
operating activities	8,065,263,054	7,688,592,621
Cash payments for goods purchased
and service received	1,523,831,753	1,482,078,694
Net increase of customer loans and
advances	6,279,959		-
Cash payments to and on behalf of
employees	626,532,001	627,913,561
Taxes payment	1,377,628,585	1,210,692,870
Other cash payments relating to
operating activities	154,130,402	121,878,402
Sub-total of cash outflows from
operating activities	3,688,402,700	3,442,563,527
Net cash flows from operating
activities	4,376,860,354	4,246,029,094

- 30 -

	First three	First three
	quarters of	quarters of
	2019	2018
	(January -	(January -
Item	September)	September)

1. Cash flows from investing activities: Cash receipts from disposals of

investments	6,463,293,632	3,993,100,000
Cash receipts from investment income	275,822,064	269,311,527
Net cash receipts from disposals of
fixed assets, intangible assets and
other long-term assets	117,487	57,731,851
Other cash receipts relating to
investing activities	-	430,771,364
Sub-total of cash inflows from
investing activities	6,739,233,183	4,750,914,742
Cash payments to acquire or construct
fixed assets, intangible assets and
other long-term assets	2,415,731,139	2,331,689,603
Cash payments for investments	8,400,051,086	4,237,155,888
Other cash payments relating to
investing activities	-	480,000,000
Sub-total of cash outflows from
investing activities	10,815,782,225	7,048,845,491
Net cash flows from investing
activities	-4,076,549,042	-2,297,930,749

- 31 -

	First three		First three
	quarters of		quarters of
	2019	2018
	(January -		(January -
Item	September)		September)
III.Cash flows from financing activities:
Cash received from investors	757,906,163	664,482,752
Including: Cash received by
subsidiaries from minority
shareholders' investment	757,906,163	664,482,752
Cash receipts from borrowings	2,352,402,904	5,667,000,000
Cash receipts from issuance of bonds	3,999,280,046	2,997,489,178
Sub-total of cash inflows from
financing activities	7,109,589,113	9,328,971,930
Cash repayments of borrowings	4,662,221,839	8,226,979,797
Cash payments for distribution of
dividends or profits or settlement of
interest expenses	2,783,349,479	2,665,141,042
Other cash payments relating to
financing activities	2,927,378	19,476,283
Sub-total of cash outflows from
financing activities	7,448,498,696	10,911,597,122
Net cash flows from financing
activities	-338,909,583	-1,582,625,192

IV. Effects of changes in foreign exchange rate on cash and cash equivalents

V. Net increase in cash and cash
equivalents	-38,598,271	365,473,153
Add: Opening balance of cash and
cash equivalents	515,126,921	262,758,700
VI. Closing balance of cash and cash
equivalents	476,528,650	628,231,853
		Person-in-charge of the
Legal representative:	Accounting chief:	accounting department:
Gu Dejun	Sun Xibin	Ren Zhuohua

- 32 -

Cash Flow Statement of the Parent Company

January - September 2019

Prepared by: Jiangsu Expressway Company Limited

Unit: yuan Currency: RMB Type of Audit: Unaudited

	First three		First three
	quarters of		quarters of
	2019	2018
	(January -		(January -
Item	September)		September)
I. Cash flows from operating
activities:
Cash receipts from the sale of goods
and the rendering of services	5,028,694,488	5,136,364,270
Other cash receipts relating to
operating activities	21,640,095	61,674,956
Subtotal of cash inflows from
operating activities	5,050,334,583	5,198,039,226
Cash payments for goods purchased
and service received	1,047,143,698	1,148,060,790
Cash payments to and on behalf of
employees	415,704,241	415,513,586
Taxes payment	976,404,442	914,413,753
Other cash payments relating to
operating activities	49,932,741	48,862,905
Sub-total of cash outflows from
operating activities	2,489,185,122	2,526,851,034
Net cash flows from operating
activities	2,561,149,461	2,671,188,192

- 33 -

	First three	First three
	quarters of	quarters of
	2019	2018
	(January -	(January -
Item	September)	September)

1. Cash flows from investing activities: Cash receipts from disposals of

investments	4,069,000,000	3,148,000,000
Cash receipts from investment income	282,064,634	290,603,467
Net cash receipts from disposals of
fixed assets, intangible assets and
other long-term assets	83,000	57,719,500
Other cash receipts relating to
investing activities	554,000,000	369,000,000
Sub-total of cash inflows from
investing activities	4,905,147,634	3,865,322,967
Cash payments to acquire or construct
fixed assets, intangible assets and
other long-term assets	114,959,696	45,176,653
Cash payments for investments	6,942,550,000	3,292,019,800
Other cash payments relating to
investing activities	11,000,000	530,000,000
Sub-total of cash outflows from
investing activities	7,068,509,696	3,867,196,453
Net cash flows from investing
activities	-2,163,362,062	-1,873,486

- 34 -

	First three		First three
	quarters of		quarters of
	2019	2018
	(January -		(January -
Item	September)		September)
III.Cash flows from financing activities:
Cash receipts from borrowings	2,485,002,904	4,850,000,000
Cash receipts from issuance of bonds	3,999,280,045	2,997,489,178
Sub-total of cash inflows from
financing activities	6,484,282,949	7,847,489,178
Cash repayments of borrowings	4,371,782,689	7,984,629,797
Cash payments for distribution of
dividends or profits or settlement of
interest expenses	2,521,326,255	2,545,548,582
Other cash payments relating to
financing activities	2,927,378	6,476,283
Sub-total of cash outflows from
financing activities	6,896,036,322	10,536,654,662
Net cash flows from financing
activities	-411,753,373	-2,689,165,484

IV. Effects of changes in foreign exchange rate on cash and cash equivalents

V. Net increase in cash and cash
equivalents	-13,965,974	-19,850,778
Add: Opening balance of cash and
cash equivalents	100,931,394	135,125,679
VI. Closing balance of cash and cash
equivalents		86,965,420	115,274,901
		Person-in-charge of the
Legal representative:	Accounting chief:	accounting department:
Gu Dejun	Sun Xibin	Ren Zhuohua

- 35 -

4.2 Adjustments to relevant items of financial statements at the beginning of the year upon initial adoption of New Financial Instrument Standard, New Revenue Standard and New Lease Standard

✓	Applicable				Not applicable
Consolidated Balance Sheet
								Unit: yuan Currency: RMB
						31 December
Items		2018			1 January 2019	Adjustments
Current Assets:
Cash and bank balances		649,761,591		649,761,591	-
Held-for-trading financial assets	683,326,861		683,326,861	-
Notes receivable		1,681,265		1,681,265	-
Accounts receivable		321,158,727		321,158,727	-
Prepayments		29,060,041		27,166,724	-1,893,317
Other receivables		37,833,951		37,833,951	-
Including: Interest receivable		-		-	-
	Dividends receivable	4,989,960	4,989,960	-
Inventories		4,045,555,776	4,045,555,776	-
Other current assets		130,656,171	130,656,171	-
Total Current Assets
	5,899,034,383			5,897,141,066	-1,893,317
Non-current Assets:
Long-term equity investments		5,702,454,036		5,702,454,036		-
Other equity instruments investment	3,035,293,680		3,035,293,680		-
Other non-current financial assets	1,111,415,422		1,111,415,422		-
Investment properties		19,207,033		19,207,033		-
Fixed assets		1,814,133,323		1,814,133,323		-
Construction in progress		10,087,826,331		10,087,826,331		-
Right-of-use assets		-	7,419,401		7,419,401
Intangible assets		20,280,055,629		20,280,055,629		-
Long-term deferred expenses		1,654,145		1,654,145		-
Deferred income tax assets		197,447,059		197,447,059		-
Other non-current assets		14,207,792		14,207,792		-
Total Non-current Assets
	42,263,694,450		42,271,113,851	7,419,401
TOTAL ASSETS
	48,162,728,833		48,168,254,917	5,526,084

- 36 -

	31 December
Items	2018		1 January 2019	Adjustments
Current Liabilities:
Short-term borrowings	1,580,000,000		1,580,000,000	-
Accounts payable	1,090,607,320		1,090,607,320	-
Receipts in advance	73,454,895		73,454,895	-
Employee remuneration payable	2,917,980		2,917,980	-
Taxes payable	271,704,890		271,704,890	-
Other payables	270,459,371		270,459,371	-
Including: Interest payable	93,089,893		93,089,893	-
Dividends payable	88,979,103	88,979,103	-
Contract liabilities	962,200,983	962,200,983	-
Non-current liabilities due within
one year	381,700,433	384,931,475	3,231,042
Other current liabilities	2,212,191,672	2,212,191,672	-
Total Current Liabilities
6,845,237,544		6,848,468,586	3,231,042
Non-current liabilities:
Long-term borrowings	7,688,853,902		7,688,853,902		-
Bonds payable	3,980,548,108		3,980,548,108		-
Lease liabilities	-	2,295,042		2,295,042
Expected liabilities	461,700		461,700		-
Deferred income	43,109,916		43,109,916		-
Deferred income tax liabilities	250,660,721		250,660,721		-
Total Non-current Liabilities
11,963,634,347		11,965,929,389	2,295,042
TOTAL LIABILITIES
18,808,871,891		18,814,397,975	5,526,084

- 37 -

	31 December
Items	2018	1 January 2019	Adjustments
OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)
Paid-up capital (or share capital)	5,037,747,500	5,037,747,500	-
Capital reserve	10,428,388,235	10,428,388,235	-
Other comprehensive income	837,827,667	837,827,667	-
Surplus reserve	3,411,194,285	3,411,194,285	-
Retained profits	6,422,040,045	6,422,040,045	-
Total owners' equity (or
shareholders' equity)
attributable to the parent
company	26,137,197,732		26,137,197,732		-
Minority interests	3,216,659,210		3,216,659,210		-
TOTAL OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)	29,353,856,942		29,353,856,942		-
TOTAL LIABILITIES AND
OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)	48,162,728,833		48,168,254,917		5,526,084

- 38 -

Explanation for the adjustments:

✓	Applicable		Not applicable

New Lease Standards

The Group has adopted the Accounting Standards for Business Enterprises No. 21 - Leases (hereinafter referred to as the "New Lease Standards", and the previous lease standards referred to as the "Previous Lease Standards") revised by the Ministry of Finance in 2018 since 1 January 2019 (the "Date of Initial Application"). The New Lease Standards improve the definition of leases by adding the identification, separation and consolidation of leases; abolished the need for a lessee to classify its operating leases and finance leases, the lessee is required to recognise right-of-use assets and lease liabilities for all leases (other than short-term leases and leases of low value assets) at the commencement of the lease term. The Standards improve the lessee's subsequent measurement of the lease by adding accounting treatment methods under the scenarios of option revaluation and lease change; and add relevant disclosure requirements.

For a contract that had already existed prior to the Date of Initial Application, the Group has elected not to reassess whether such contract is, or contains a lease.

For a contract that was signed or amended after the Date of Initial Application, the Group assesses whether such contract is, or contains a lease in accordance with the definition of leases under the New Lease Standards. The New Lease Standards determine whether a contract is a lease or contains a lease based on whether a party to the contract has assigned the right to control the use of one or more identified assets within a certain period in exchange for a consideration. The definition of a lease in the New Lease Standards does not have a significant impact on the scope of the Group's contracts that meet the definition of a lease.

- 39 -

The Group as lessee

The Group adjusted the retained earnings at the Date of Initial Application and the amounts of other related items in the financial statements based on the cumulative effect of the initial adoption of the New Lease Standards, and did not adjust the information for the comparative period.

For operating leases other than leases of low value prior to the Date of Initial Application, the Group elected to apply one or more of the following simplified approaches for each lease:

• For a lease that will be completed within 12 months from the Date of Initial Application, it was treated as a short-term lease;
• The same discount rate was applied to the leases with similar characteristics in measuring the lease liabilities;
• The measurement of right-of-use assets did not include initial direct costs.
• For an operating lease prior to the Date of Initial Application, the Group measured the lease liability at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate at the Date of Initial Application, and chose to measure the right- of-use assets according to each lease as follows:

• the same amount as the lease liability, adjusted for any rental prepayments as necessary.

The Group recognised lease liabilities of RMB5,526,084 and right-of-use assets of RMB7,419,401 as at 1 January 2019. For operating leases prior to the Date of Initial Application, the Group measured the lease liability at the present value discounted using the incremental borrowing rates at the Date of Initial Application, and the weighted average of such rates was 4.75%.

- 40 -

The difference between the lease liabilities recognised by the Group on 1 January 2019 and the significant operating lease commitments disclosed in the 2018 financial statements is as follows:

			RMB
Item	Note	1 January 2019
I.	Operating lease commitments as at 31
	December 2018		8,298,735
	Lease liabilities discounted using the
	incremental borrowing rates at the Date of
	Initial Application		5,979,209
	Less: Recognition of waiver - short-term
	leases		453,125
	Lease liabilities related to the previous
	operating leases recognized duo to the
	application of the New Lease Standards		5,526,084
II. Lease liabilities as at 1 January 2019		5,526,084
	Presented as:
	Current liabilities		3,231,042
	Non-current liabilities		2,295,042

- 41 -

As at 1 January 2019, the carrying amount of right-of-use assets consisted of the following:

		RMB
Item	Note	1 January 2019
Right-of-use assets:
Right-of-use assets recognized in respect of
operating leases prior to the Date of Initial
Application		5,526,084
Reclassification of rental prepayments	1	1,893,317
Total:		7,419,401
By category:
		RMB
Item	Note	1 January 2019
Buildings		7,419,401
Total:		7,419,401

Note 1: The Group's rental prepayments for offices/sales offices were presented as prepayments as at 31 December 2018. As at the Date of Initial Application, they are reclassified to right-of-use assets.

The Group as lessor

Under the Previous Lease Standards, the Group treated the received refundable rental deposits as rights and obligations in relation to the leases. These refundable deposits were not payments relating to the right-of-use assets under the New Lease Standards. Therefore, adjustments were made at the Date of Initial Application to reflect the effects of discounting, and the difference was accounted for as rental received in advance. The change has no significant impact on the financial statements for the current year.

From the Date of Initial Application, the Group allocates the contract consideration in accordance with the Accounting Standards for Business Enterprises No. 14 - Revenue in relation to the allocation of transaction price. The change has no significant impact on the financial statements for the current year.

- 42 -

The Format of Financial Statements of General Enterprises

The Group implemented the Notice on Revising and Issuing the Format of Financial Statements of General Enterprises for 2019 (Cai Kuai [2019] No. 6, hereinafter referred to as "Cai Kuai Circular 6") issued by the Ministry of Finance on 30 April 2019 when preparing the financial statements for the first half year of 2019. Cai Kuai Circular 6 separates the item of "notes receivable and accounts receivable" into two items, namely "notes receivable" and "accounts receivable", and separates the item of "notes payable and accounts payable" into two items, namely "notes payable" and "accounts payable"; newly adds the items of "financing receivables", "right-of-use assets", "lease liabilities" and "special reserve"; clarifies the presentation contents of "other receivables", "non-current assets due within one year", "other payables", "deferred income" and "other equity instruments"; and also provides the requirements for the presentation of loss provisions for loan commitments, financial guarantee contracts and other items. Circular 6 adds the item of "gain on derecognition of financial assets measured at amortized cost" under the item of "investment income", further clarifies or amends the presentation contents of "interest income" under the items of "research and development expenses" and "financial expenses", "other income", "non-operating income" and "non-operating expenses", and adjusts the presentation position of the items of "credit impairment loss" and "asset impairment loss".

1. The impact of the application of the New Lease Standards on the relevant items in the balance sheet of the Group as at 1 January 2019 is as follows:

				RMB
		31 December		1 January
Item	Note	2018	Adjustment	2019
Current assets:
Prepayments		29,060,041	(1,893,317)	27,166,724
Non-current assets:
Right-of-use assets		-	7,419,401	7,419,401
Current liabilities:
Non-current liabilities due
within one year		381,700,433	3,231,042	384,931,475
Non-current liabilities:
Lease liabilities		-	2,295,042	2,295,042

- 43 -

Balance Sheet of the Parent Company
		Unit: yuan Currency: RMB
	31 December	1 January
Items	2018	2019	Adjustment

Current Assets:

Cash and bank balances	100,931,394		100,931,394
Held-for-trading financial assets	193,000,000		193,000,000
Accounts receivable	218,353,103		218,353,103
Prepayments	8,598,094		8,598,094
Other receivables	44,321,154		44,321,154
Including: Interest receivable	30,590,068		30,590,068
Dividends receivable	4,989,960	4,989,960
Inventories	11,305,004	11,305,004
Other current assets	7,000,000	7,000,000
Total Current Assets
583,508,749		583,508,749
Non-current Assets:
Long-term equity investments	14,290,944,294		14,290,944,294
Other equity instruments investment	1,933,153,680		1,933,153,680
Fixed assets	948,663,656		948,663,656
Construction in progress	50,503,852		50,503,852
Intangible assets	10,087,165,531		10,087,165,531
Deferred income tax assets	45,120,214		45,120,214
Other non-current assets	2,604,419,552		2,604,419,552
Total Non-current Assets
29,959,970,779		29,959,970,779

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

TOTAL ASSETS	30,543,479,528 30,543,479,528	-

- 44 -

	31 December	1 January
Items	2018		2019	Adjustment
Current Liabilities:
Short-term borrowings	1,690,000,000		1,690,000,000	-
Accounts payable	491,880,235		491,880,235	-
Receipts in advance	68,061,949		68,061,949	-
Employee remuneration payable	2,242,393		2,242,393	-
Taxes payable	135,467,755		135,467,755	-
Other payables	169,847,846		169,847,846	-
Including: Interest payable	61,780,551		61,780,551	-
Dividends payable	88,979,103	88,979,103	-
Non-current liabilities due within
one year	1,700,433	1,700,433	-
Other current liabilities	2,212,191,672	2,212,191,672	-
Total Current Liabilities
4,771,392,283		4,771,392,283	-
Non-current liabilities:
Long-term borrowings	15,303,902		15,303,902		-
Bonds payable	3,980,548,108		3,980,548,108		-
Expected liabilities	461,700		461,700		-
Total Non-current Liabilities
3,996,313,710		3,996,313,710	-
TOTAL LIABILITIES
8,767,705,993		8,767,705,993	-
OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)
Paid-up capital (or share capital)	5,037,747,500		5,037,747,500		-
Capital reserve	7,327,650,327		7,327,650,327		-
Other comprehensive income	289,485,952		289,485,952		-
Surplus reserve	2,518,873,750		2,518,873,750		-
Retained profits	6,602,016,006		6,602,016,006		-
TOTAL OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)	21,775,773,535		21,775,773,535		-
TOTAL LIABILITIES AND
OWNERS' EQUITY (OR
SHAREHOLDERS' EQUITY)	30,543,479,528		30,543,479,528		-

- 45 -

Explanation for the adjustments:

Applicable ✓ Not applicable

4.3 Explanation on retroactive adjustments to comparative data in the previous periods upon initial adoption of New Financial Instrument Standard and New Lease Standard

Applicable ✓ Not applicable

4.4 Auditor's Report

Applicable ✓ Not applicable

By Order of the Board

Yao Yongjia

Secretary to the Board

Nanjing, the PRC, 25 October 2019

As at the date of this announcement, the Directors of the Company are:

Gu Dejun, Chen Yanli, Chen Yongbing, Sun Xibin, Yao Yongjia, Wu Xinhua, Hu Yu, Ma Chung Lai, Lawrence, Zhang Zhuting *, Chen Liang *, Lin Hui *, Zhou Shudong *, Liu Xiaoxing *

• Independent Non-executive Directors

- 46 -