Precision Tsugami China : INSIDE INFORMATION FINANCIAL RESULTS OF THE CONTROLLING SHAREHOLDER, TSUGAMI CORPORATION FOR THE THREE MONTHS ENDED 30 JUNE 2020

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.

Precision Tsugami (China) Corporation Limited

津 上 精 密 機 床（ 中 國 ）有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1651)

INSIDE INFORMATION

FINANCIAL RESULTS OF THE CONTROLLING SHAREHOLDER,

TSUGAMI CORPORATION

FOR THE THREE MONTHS ENDED 30 JUNE 2020

This announcement is issued pursuant to Part XIVA of the Securities and Futures Ordinance and Rule 13.09(2)(a) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong.

On 30 July 2020 (at 12:00 p.m. Hong Kong time), the Company' s controlling shareholder, Tsugami Japan will announce and file its financial results for the three months ended 30 June 2020.

This announcement is issued by Precision Tsugami (China) Corporation Limited (the "Company" ) pursuant to Part XIVA of the Securities and Futures Ordinance and Rule 13.09(2)(a) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The Company' s controlling shareholder, Tsugami Corporation ( "Tsugami Japan" ), is a company listed on the Tokyo Stock Exchange. As at the date of this announcement, Tsugami Japan beneficially owns approximately 70.87% of the issued shares in the capital of the Company.

Tsugami Japan publishes quarterly and annual financial results announcements (hereinafter collectively referred to as "Tsugami Japan' s Disclosures" ) with financial information on, among other things, sales of its China segment, comprising those contributed by operations of the Company and its subsidiaries (hereinafter collectively referred to as the "Group" ). Tsugami Japan' s Disclosures include periodic financial results and explanatory statements on final accounts released by Tsugami Japan pursuant to the requirements under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended). Tsugami Japan' s financial reports are available in the public domain.

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Tsugami Japan will announce and file its financial results for the three months ended 30 June 2020 ( "Tsugami Japan' s Quarterly Financial Results" ) on 30 July 2020 (at 12:00 p.m. Hong Kong time). In addition, Tsugami Japan will file the quarterly securities report for the three months ended 30 June 2020 ( "Tsugami Japan' s Quarterly Securities Report" ) on 12 August 2020. If you wish to review Tsugami Japan' s Quarterly Financial Results and Tsugami Japan' s Quarterly Securities Report prepared by Tsugami Japan, please visit the following websites:

Tsugami Japan' s Quarterly Financial Results (in Japanese):

http://www.tsugami.co.jp/ir/earnings/

Tsugami Japan' s Quarterly Securities Report (in Japanese):

http://www.tsugami.co.jp/ir/security-report/

Except for Tsugami Japan' s Quarterly Securities Report, you can find the English translation of the document above at:

http://www.tsugami.co.jp/eng/ir/

Although Tsugami Japan currently adopts International Financial Reporting Standards ( "IFRS" ) as its accounting standard which is same as the accounting standard the Group adopted for the preparation and presentation of its consolidated financial results and related financial information, the difference in entities comprising Tsugami Japan' s consolidation and the Group' s consolidation makes the financial results and related information set forth in Tsugami Japan' s Quarterly Financial Results and Tsugami Japan' s Quarterly Securities Report not directly comparable to the financial results and related financial information that the Company discloses. For example, any intercompany transactions between Tsugami Japan and the Group would be eliminated for Tsugami Japan' s Quarterly Financial Results but remain recorded for the Group' s financial results.

Translated from Tsugami Japan' s Quarterly Financial Results

- Released by Tsugami Japan and prepared under IFRS

1. Qualitative Information Relating to Consolidated Quarterly Results, Etc.
2. 1. Information Relating to Consolidated Operating Results
      ② In China, revenue was ¥12,092 million, up by 28.9% year over year. Segment profit was ¥2,031 million, up by 65.3% year over year.
3. Condensed Quarterly Consolidated Financial Statements and Significant Notes
4. 1. Notes relating to Condensed Quarterly Consolidated Financial Statements (Segment information)

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1. Segment revenues and operating results Inter-segment sales revenues are based on market prices.
   Revenues and operating results of the Group' s reportable segments are as follows.
   Previous consolidated first quarter (from April 1, 2019 to June 30, 2019)

	(Million yen)
	Reportable
	segment
	China
Revenue
External	7,213
Inter-segment	2,169
Total	9,382
Segment profit (loss)	1,229

(Note)

1. Segment profit is calculated by deducting cost of sales and selling, general and administrative expenses from sales revenue.

Consolidated first quarter under review (from April 1, 2020 to June 30, 2020)

	(Million yen)
	Reportable
	segment
	China
Revenue
External	9,911
Inter-segment	2,180
Total	12,092
Segment profit (loss)	2,031

(Note)

1. Segment profit is calculated by deducting cost of sales and selling, general and administrative expenses from sales revenue.

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3. Supplementary Information

1. Overseas revenue

				(Million yen)
		Previous		Consolidated
		consolidated		first quarter
		first quarter		under review
	(April 1, 2019 to	(April 1, 2020 to
		June 30, 2019)		June 30, 2020)
China	7,314	9,838

(Note) Revenues are classified by country or region based on the customer' s location.

1. Revenue by machinery category
   The relationship between the breakdown of revenue by major product line and the reportable segments is as follows.
   Previous consolidated first quarter (from April 1, 2019 to June 30, 2019)

	(Million yen)
	Reportable
	segment
	China
Major product lines
Automatic lathes	6,040
Grinding machines	225
Machining centers, Rolling machines and Specialized machines	773
Other*	173
Total	7,213

• Other includes parts and services.

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Consolidated first quarter under review (from April 1, 2020 to June 30, 2020)

	(Million yen)
	Reportable
	segment
	China
Major product lines
Automatic lathes	8,323
Grinding machines	436
Machining centers, Rolling machines and Specialized machines	923
Other*	227
Total	9,911

• Other includes parts and services.

Tsugami Japan' s Disclosures contain forward-looking information. Tsugami Japan has full and independent discretion as to the determination of such forward-looking information by considering factors which Tsugami Japan considers appropriate and relevant for its reporting and disclosure purposes. Forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, the Company' s results may differ from those expressed in any forward-looking statements made by Tsugami Japan, including the Tsugami Japan' s Disclosures. In light of the risks and uncertainties, the forward-looking information in the Tsugami Japan' s Disclosures should not be regarded as representations by the board of directors of the Company (the "Board" ) or the Company, or that the plans and objectives will be achieved by the Company. The Company' s shareholders and potential investors are advised not to place undue reliance on the contents of Tsugami Japan' s Disclosures and to exercise caution in dealing in the securities of the Company.

By Order of the Board

Precision Tsugami (China) Corporation Limited

Dr. Tang Donglei

Chief Executive Officer and Executive Director

Hong Kong, 30 July 2020

As at the date of this notice, the executive directors of the Company are Dr. Tang Donglei and Dr. Li Zequn; the non-executive directors of the Company are Mr. Takao Nishijima, Ms. Mami Matsushita and Mr. Seiji Tsuishu; and the independent non-executive directors of the Company are Dr. Eiichi Koda, Dr. Huang Ping and Mr. Tam Kin Bor.

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