Hong Kong Exchanges and Clearing : OVERSEAS REGULATORY ANNOUNCEMENT - 2019 INTERIM RESULTS OF SKYWORTH DIGITAL CO., LTD.

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SKYWORTH GROUP LIMITED

創 維 集 團 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 00751)

OVERSEAS REGULATORY ANNOUNCEMENT

2019 INTERIM RESULTS OF SKYWORTH DIGITAL CO., LTD.

This announcement is made by the board of directors (the "Board") of Skyworth Group Limited (the "Company") pursuant to Rules 13.09(2) and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Skyworth Digital Co., Ltd. ("Skyworth Digital", Shenzhen Stock Code: 000810), an A-share listed company on the Shenzhen Stock Exchange and a non-wholly owned subsidiary of the Company, has announced its unaudited interim results for the six months ended 30 June 2019 (the "Announcement"). Set out in the Appendix hereto is an extract of the Announcement. The board of directors of Skyworth Digital approved the profit distribution plan of ordinary shares as follows: Cash dividend of RMB0.8 (tax included) will be distributed for every 10 shares to all shareholders based on the share capital of 1,058,938,128 shares. No bonus shares (tax included) will be given. No transfer will be made from capital reserve to share capital. The above distribution will be subject to the approval by shareholders in the 2019 second extraordinary general meeting of Skyworth Digital.

Shareholders of the Company and potential investors should take note that the financial information of the interim results of Skyworth Digital in the Announcement has not been audited and the full version of the 2019 interim report of Skyworth Digital in Chinese has been published on the information website of the Shenzhen Stock Exchange (http://www.cninfo.com.cn).

By order of the Board

Skyworth Group Limited

Lai Weide

Chairman of the Board

Hong Kong, 22 August 2019

As at the date of this announcement, the Board of the Company comprises Mr. Lai Weide as the Chairman of the Board; Mr. Liu Tangzhi as executive director and the chief executive officer; Ms. Lin Wei Ping, Mr. Shi Chi and Mr. Lin Jin as executive directors; and Mr. Li Weibin, Mr. Cheong Ying Chew, Henry and Mr. Li Ming as independent non-executive directors.

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Extract of 2019 Interim Results Announcement of Skyworth Digital Co., Ltd.

Stock Code: 000810

Stock Name: Skyworth Digital

Announcement Number：2019-063

Extract of 2019 Interim Results Announcement of Skyworth Digital Co., Ltd.

I. Important Notes

This extract is compiled based on the full text of the 2019 interim report. Investors should read the full text of the 2019 interim report carefully on the media designated by the China Securities Regulatory Commission to gain a comprehensive view of the business performance, financial position and future development plan of the Company.

Auditor's note on non-compliance with accounting standards

• Applicable √ N/A

Plans on profit distribution of ordinary shares or transfer from capital reserve to share capital during the period reviewed by the board

• Applicable □ N/A

Whether or not to transfer from capital reserve to share capital

• Yes √ No

The profit distribution plan of ordinary shares of the Company approved on the board meeting is as follows: cash dividend of RMB0.8 (tax included) will be distributed for every 10 shares to all shareholders based on the share capital of 1,058,938,128 shares. No bonus share (tax included) will be given. No transfer will be made from capital reserve to share capital.

Plans on profit distribution of preferred shares during the reporting period approved by the board by way of resolution

• Applicable √ N/A

II. Basic Information of the Company

1. Profile of the Company

Stock name	Skyworth Digital		Stock code	000810
Listing stock exchange	Shenzhen Stock Exchange
Contact person and	Secretary of the board		Securities representative
information
Name	Zhang Zhi		Liang Jing
	Unit A 16/F, Skyworth Mansion., Gaoxin Ave.	Unit A 16/F, Skyworth Mansion., Gaoxin
Office address	1.S., Hi-tech Park, Nanshan District,		Ave. 1.S., High-tech Park, Nanshan
	Shenzhen		District, Shenzhen
Telephone	0755-26010018		0755-26010680
Email:	[e-mail]		[e-mail]

2. Major financial information and financial indicators

Whether the Company needs to make retrospective adjustments or restate the accounting information of prior years

• Yes □ No

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Extract of 2019 Interim Results Announcement of Skyworth Digital Co., Ltd.

Reasons for retrospective adjustments or restatements

Changes in accounting policies; merger of enterprises under the control of the same parent company

					Increase or
		Same period of prior year	decrease in the
	The reporting period	reporting period
				from the same
					period prior year
		Before adjustment		After adjustment	After adjustment
Revenue (RMB)	3,894,231,853.12	3,548,594,888.46		3,700,963,731.35	5.22%
Net profit attributable to listing	257,603,878.53	162,416,288.71		159,743,534.51	61.26%
company shareholders (RMB)
Net profit attributable to listing
company shareholders after	221,991,791.44	138,316,023.00		141,639,257.72	56.73%
excluding non-recurring profit
and loss (RMB)
Net cash flow generated from	-86,813,839.02	-324,636,709.42		-304,708,896.68	71.51%
operating activities (RMB)
Basic earnings per share	0.2465	0.1570		0.1544	59.65%
(RMB/share)
Diluted earnings per share	0.2381	0.1504		0.1479	60.99%
(RMB/share)
Weighted average return on	7.99%	5.84%		5.55%	2.44%
equity
					Increase or
					decrease at the end
	At the end of the	At the end of prior year	of the reporting
	reporting period				period from the
				end of prior year
		Before adjustment	After adjustment	After adjustment
Total assets (RMB)	9,330,295,364.28	8,349,143,939.54	8,651,181,722.03	7.85%
Net assets attributable to listing	3,418,087,487.53	3,047,702,515.13	3,175,424,358.71	7.64%
company shareholders (RMB)

Reasons for changes in accounting policies:

1. According to the Notice on Revision of Format of 2018 Financial Statements to be Published by General Enterprises issued on 15 June 2018 and Explanation on Questions Regarding Format of 2018 Financial Statements of General Enterprises issued on 7 September 2018 by the Ministry of Finance ("MOF"), the Company shall present the refund of fees regarding tax withholding under other income instead of revenue when preparing the profit and loss statement; and the Company shall present government subsidies related to assets under cash flows of operational activities instead of cash flow under financing activities when preparing the cash flow statements. The Company has made retrospective adjustments to the comparative information correspondently. Such changes have not affected the net profit attributable to listing company shareholders or the net increase in cash and cash equivalents.
2. The Company held the 9th meeting of the 10th board of directors and the 9th meeting of the 9th board of supervisors on 10 December 2018, which approved the Resolution on Implementing New Accounting Standards and Changing Relevant Accounting Policies. Since 1 January 2018, the Company has adopted the amendments to Accounting Standard for Enterprises No. 14: Revenue as well as Accounting Standard for Enterprises No. 22: Recognition and Measurement of Financial instruments, Accounting Standard for Enterprises No. 23: Transfer of Financial Assets, Accounting Standard for Enterprise No. 24: Hedging Accounting and Accounting Standard for Enterprises No. 37: Presentation of Financial Instruments (the above four referred to as "New Standards for Financial

Instruments" collectively) published by the MOF in 2017. Thus, in this report, retrospective adjustments were made to the information in financial statements for period from January to June 2018 according to the Accounting Standard for Enterprises No. 14: Revenue and the New Standards for Financial Instruments.

3. Number of shareholders and the shareholdings in the Company

			Unit: share
Total number of ordinary		Total number of the preferred
	shareholders whose voting
shareholders at the end of the	55,925	0
rights restored (if any) at the
reporting period
	end of the reporting period
	Shareholding of the top 10 shareholders

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Extract of 2019 Interim Results Announcement of Skyworth Digital Co., Ltd.

	Nature of	Shareholding	Number of	Number of	Pledged or frozen
Name of shareholder	restricted shares	Status of
shareholder	percentage	shares held	Number
	held
	the shares
Shenzhen Chuangwei-	Domestic	54.42%	584,548,508		Pledged	584,548,508
RGB Electronics Co.,	non-state-owned
Ltd	legal person
Shi Chi	Foreign natural	3.42%	36,770,524	27,577,893
person
Skyworth LCD	Foreign legal	3.36%	36,055,014	36,055,014
Technology Co., Ltd.	person
Xie Xiongqing	Domestic natural	2.66%	28,528,051
person
Lin Weijian	Domestic natural	2.23%	23,967,131		Pledged	18,519,999
person
Suining Xingye Asset	State-owned legal	2.04%	21,916,008
Operation Company	person
Li Pu	Domestic natural	1.27%	13,683,310
person
Guangzhou Branch of	Other	0.88%	9,400,000
Hua Xia Securities
Tang Yan	Foreign natural	0.61%	6,507,500
person
Long Weiling	Domestic natural	0.58%	6,200,000
person
		① Shenzhen Chuangwei-RGB Electronics Co., Ltd and Skyworth LCD
		Technology Co., Ltd. are subsidiaries of Skyworth Group Limited and
		persons acting in concert legally. ②Lin Weijian was the supervisor of
		Yingtan Pengsheng Investment Co., Ltd; Lin Weijing was the executive
		director and general manager of Yingtan Pengsheng Investment Co., Ltd;
		Xie Xiongqing was the executive director and general manager of Yingtan
Notes on the relationship or concerted	Pengsheng Investment Co., Ltd; Lin Weijian, Lin Weijing and Xie
Xiongqing are family members. Yingtan Pengsheng Investment Co., Ltd,
action of the above shareholders
Lin Weijian, Xie Xiongqing and Lin Weijing are persons acting in concert
		legally. ③Shi Chi, being the director and general manager of the
		Company, and Tang Yan, being his spouse, are persons acting in concert
		legally. ④ Save for the above, the Company is not aware whether there is
		relationship between other shareholders and whether they are persons
		acting in concert pursuant to the Administration of the Takeover of Listed
		Companies Procedures.
Notes on shareholders conducting margin	As of 28 June 2019, Xie Xiongqing held 28,528,051 shares in the
Company in total, among which 28,528,051 shares were held through an
trading (if any)
	"investor margin account".

1. Changes of controlling shareholders or actual controllers Changes of controlling shareholders during the reporting period □ Applicable √ N/A

There was no change of controlling shareholders of the Company during the reporting period. Changes of actual controllers during the reporting period

□ Applicable √ N/A

There was no change of actual controllers of the Company during the reporting period.

1. Table on total number of preferred shareholders of the Company and shareholdings of the top 10 preferred shareholders

• Applicable √ N/A

There was no preferred shareholder holding any share in the Company during the reporting period.

6. Corporate bond

Whether the Company had any outstanding corporate bonds listed on stock exchanges which were not mature or not fully settled after maturity as of the date when this 2019 interim report was approved to be published

Yes

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Extract of 2019 Interim Results Announcement of Skyworth Digital Co., Ltd.

(1) Basic information of the corporate bond

	Short form				Balance of
Name of the bond	Bond code	Maturity	the bond		Coupon rate
of the bond
				(RMB'0000)
Convertible corporate	Skyworth					1st year: 0.40%, 2nd year:
127013	15 April 2025	104,000	0.60%, 3rd year: 1.00%, 4th
bond of Skyworth	convertible	year: 1.50%, 5th year: 1.80%,
Digital Co., Limited	bond					6th year: 2.00%
(2) Financial indicators as of the end of the reporting period
		At the end of the reporting				Increase or decrease at the
Item		At the end of prior year		end of the reporting period
	period
							from the end of prior year
Gearing ratio			61.66%		61.55%	0.11%
								Increase or decrease in the
Item		The reporting period		Same period prior year		reporting period from the
								same period prior year
EBITDA interest coverage			10.52		16.24	-35.22%
ratio

III. Management Discussion and Analysis of Operational Performance

1. Business Review

Whether the Company is required to comply with the disclosure requirements applicable to special industries:

No

In the first half of 2019, the Company recorded revenue of RMB3.873 billion from its principal activities, representing a year-on-year increase of 5.39%. The respective developments of each business segment are as follows:

(1) Smart Terminals

During the reporting period, the Company recorded revenue of RMB2.917 billion for the sales of digital smart boxes and network access equipment, or a year-on-year increase of 2.13%. The smart terminal segment of the Company created mutual development and competition in three separate domestic markets: (i) In the domestic TV broadcasting market, we actively promoted smart home applications such as smart home appliances, the Internet of Things and security engineering. In addition, we launched new businesses such as Xueliang Project, smart corporations and smart distance learning, and we enhanced TV broadcasting products including 4K ultra high definition smart boxes, PON, Cable Modem, ONU and household network. Also, we actively expanded the business products for corporate clients, including emergency broadcasting systems, integrated systems, video conferencing systems and related business display products. Furthermore, we extensively promoted user value-added services and loading screen advertising based on smart terminals such as high definition (including 4K ultra high definition) interactive set-top boxes. (ii) In the three largest domestic telecommunication operator markets, the Company won the bids for multiple smart terminal products, including IPTV, IPTV+OTT, OTT, PON, network access equipment, smart gateways and smart network products. The bids were offered by the headquarters of the telecommunication operator, and the products were distributed across various provinces. As a result, the Company has strengthened its distribution capability at the provincial, city and county levels. Also, the Company has become a key supplier of smart gateways for China Unicom, a qualified supplier of smart gateway products for China Mobile, and a strategic partner of the China Mobile Group Digital Home Alliance. In the area of pan-smart terminals, our smart door locks, smart speaker products and smart cameras have been shortlisted in the bid for the China Mobile Group.

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