China Yongda Automobile Services Hldg : ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2017

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China Yongda Automobiles Services Holdings Limited

中國永達汽車服務控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03669) ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2017

The board of directors (the "Board") of China Yongda Automobiles Services Holdings Limited (the "Company") is pleased to announce the unaudited condensed consolidated interim financial results of the Company and its subsidiaries (together, the "Group", "we" or "us") for the six months ended June 30, 2017, together with comparative figures for the six months ended June 30, 2016.

FINANCIAL HIGHLIGHTS OF THE GROUP

• Consolidated revenue including revenue from finance and insurance agency services was RMB22,556 million for the six months ended June 30, 2017, a 18.8% increase from RMB18,990 million for the six months ended June 30, 2016.

• Consolidated gross profit including revenue from finance and insurance agency services was RMB2,642 million for the six months ended June 30, 2017, a 31.3% increase from RMB2,013 million for the six months ended June 30, 2016.

• Consolidated gross profit margin including revenue from finance and insurance agency services was 11.71% for the six months ended June 30, 2017, a 1.11 percentage points increase from 10.60% for the six months ended June 30, 2016.

• Net profit was RMB698 million for the six months ended June 30, 2017, a 72.6% increase from RMB405 million for the six months ended June 30, 2016.

• Net profit attributable to the owners of the Company was RMB652 million for the six months ended June 30, 2017, a 70.2% increase from RMB383 million for the six months ended June 30, 2016.

• Basic earnings per share was RMB0.43 for the six months ended June 30, 2017 (for the six months ended June 30, 2016: RMB 0.26).

MARKET REVIEW

During the first half of 2017, China's passenger vehicles generally maintained a moderate growth in sales volume as compared to the same period in 2016. According to the information of China Association of Automobile Manufacturers, the sales volume of passenger vehicles in China was

11.253 million units in the first half of 2017, representing an increase of 1.6% compared to the same period in 2016, among which, the sales volume of luxury passenger vehicles maintained faster growth at a growth rate of 17.0%, accounting for 9.0% of the passenger vehicle market share. In the first half of 2017, the impact on advance consumption resulting from adjustments to purchase taxes diminished month by month with its negative impact basically eliminated. In anticipation of the upcoming peak season of consumption, the growth of our sales volume will recover gradually and the overall inventory is expected to further reduce in the second half of the year. With the overall macro-economy remaining stable and the impact of vehicle purchase-related policy fading away in the second half of 2017, we expect that the sales volume of passenger vehicles in China would maintain a steady growth and the overall year-on-year growth rate would be much higher than that in the first half of 2017.

The luxury vehicle market ushered in a new wave of growth in 2017 after the passenger vehicle market witnessed a "U-shaped" trend in 2016. The main engine plants of certain brands led by BMW ushered in a window period for product upgrading, which, coupled with the rapid growth of the second-echelon luxury brands, such as Volvo, Cadillac and Lincoln, enabled the entire luxury vehicle market to maintain a growth rate not lower than that of last year. In the medium to long term, benefiting from the strong demand for upgrading and the rising penetration rate of automobile finance, we anticipate that the growth in sales volume of luxury and ultra-luxury brand passenger vehicles in China will maintain a higher growth rate than the overall sales growth of passenger vehicles in China, and the sales volume of luxury and ultra-luxury brand passenger vehicles contributing to the sales volume of the passenger vehicles in China will further increase.

According to the statistics of the Traffic Management Bureau of the Ministry of Public Security, vehicle ownership in China reached 200 million units by the end of March 2017. With rising passenger vehicle ownership and the aging of vehicles in China, the after-sales services market for passenger vehicles in China will maintain a fast growing pace in 2017. The composition of revenue and gross profit of automobile dealers experienced a preliminary structural transformation. The rapid growth of the post-market industry chain businesses, such as after-sales services, pre- owned vehicles, finance and insurance services, would have a positive effect on the profitability of automobile dealers.

According to the data from China Automobile Dealers Association, the transaction volume of pre- owned vehicles in China reached 10.39 million units in 2016. It is expected that the transaction volume of pre-owned vehicles in China would exceed 12.50 million units in 2017, representing a year-on-year increase of 20%. Meanwhile, we noted that with the constant optimization of the pre-owned vehicle industrial and taxation policies in China, the market resources start to become concentrated as compared with the previous dispersed state, and the large pre-owned vehicle dealers groups following on brands and retail sales as their main model will be in a more advantageous position in the future.

According to the 2017 China Auto Internet Finance Development Report, from 2014 to 2016, the overall size and scale of the automobile finance market in China grew from RMB700 billion to over RMB1 trillion at a growth rate of over 20% per annum; while the penetration rate rose from 20% in 2014 to 38% in 2016, compared to that of automobile finance penetration rate of over 50% in developed countries, which indicated that there was still huge room for the development of the domestic market. Meanwhile, we noted that as there was an increasing number of younger vehicle buyers and the credit system had been improved, the "hire-purchase" model under the finance lease business enjoyed growing popularity in the market. As the domestic automobile finance lease market continued to heat up, intensive capital was attracted to this sector. According to the 2017 China Auto Internet Finance Development Report, from 2014 to 2016, the size of the automobile finance lease market in China increased from 0.208 million units to 0.7 million units. In the coming three years, it is expected that the compound annual growth rate (CAGR) will be maintained at over 50% and the penetration rate will reach 6% by 2020.

According to the data from www.chyxx.com, in terms of revenue, the highly dispersed long-term automobile rental market accounts for the largest share of the automobile rental market in China. The long-term automobile rental market increased from RMB7 billion in 2009 to RMB35.5 billion in 2015 at a CAGR of 31%. Driven by factors such as increased car use by enterprises, financial optimization of enterprises and government service vehicles reform, the long-term automobile rental market in China will maintain a faster growth and will undergo further integration in the future. It is expected that the market size of the long-term automobile rental market in China will amount to RMB58 billion by 2018.

According to the statistics of China Association of Automobile Manufacturers, the production and sales volume of new energy vehicles in 2016 in China reached 517,000 units and 507,000 units, respectively, representing a year-on-year growth of 51.7% and 53.2%, respectively. In particular, pure electric vehicles accounted for 81% of new energy vehicles and assumed a leading role in the new energy vehicles industry. With rapid launch of the competitive models, constant introduction of supportive national policies and continuous improvement of infrastructures, we believe that new energy vehicles will show great potential for development in the future.

BUSINESS REVIEW

As a leading passenger vehicle retailer and comprehensive service provider in China, we achieved a strong growth in the first half of 2017. In the first half of 2017, our consolidated revenue and consolidated gross profit, taking into account the revenue from finance and insurance agency services amounted to RMB22,556 million and RMB2,642 million, respectively, representing an increase of 18.8% and 31.3%, respectively, compared to the same period in 2016. Taking into account the revenue from finance and insurance agency services, our consolidated gross profit margin for the first half of 2017 was 11.71%, representing an increase of 1.11 percentage points compared to 10.60% for the same period in 2016. In the first half of 2017, our net profit and net profit attributable to owners of the Company were RMB698 million and RMB652 million, respectively, representing an increase of 72.6% and 70.2%, respectively, as compared to the same period in 2016. Set forth below is a summary of major developments of our business in the first half of 2017:

Fast and Steady Growth in New Vehicle Sales

In the first half of 2017, the passenger vehicle sales market in China generally maintained a moderate growth while our sales of luxury brand automobiles achieved a rapid growth. Under such circumstance, our sales volume of new vehicles still recorded a fast growth and increased by 17.1% to 72,583 units compared to the same period in 2016. Our second-tier luxury brands achieved rapid growth in sales volume compared to the same period in 2016, among which, the sales volume of the Jaguar and Land Rover brands, Volvo brand, Calladic brand and Lincoln brand increased by 21.9%, 94.8%, 92.1% and 45.9% year-on-year, respectively, all becoming the new growth points for the growth of our new vehicle sales.

In the first half of 2017, the revenue from new vehicle sales of our passenger vehicle sales and service segment amounted to RMB18.9 billion, representing a 17.7% increase compared to the same period in 2016. In the first half of 2017, the gross profit margin of new vehicle sales of our passenger vehicle sales and service segment was 3.78%, representing a significant increase compared to 3.01% in the same period in 2016.

With respect to the internal management optimization of our new vehicle sales, we introduced a comprehensive assessment model focusing on the consolidated gross profit of sales, rapidly improved our comprehensive profitability of new vehicles per unit, capitalized on the opportunities from the sales of extended businesses for each vehicle while ensuring the gross profit of sales, and continued to improve the profitability of vehicle per unit in our extended businesses, such as automobile finance, automobile insurance and automobile accessories, and hence ensuring the fast growth in the consolidated gross profit of our new vehicle sales.

With respect to the expansion of sales channels for our new vehicles, we achieved strategic cooperation with several forefront leasing companies in the industry, strengthened our competitive edge as a full service provider in the industry by providing services ranging from new vehicle procurement, car-use and pre-owned vehicle repurchase to leasing companies thereby increased our market share in the sales quota of the automobile leasing market. Meanwhile, we reinforced our advantages in television sales channels and expanded our new model of vehicle sales on televisions to many provinces with rapid economic development in China, thus bringing fresh vehicle purchase experience to our consumers as well as enhancing our brand influence and awareness.