Shandong Molong Petroleum Machinery : UNAUDITED 2021 FIRST QUARTERLY REPORT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibilities 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.

(A Sino-foreign joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 568)

ANNOUNCEMENT

UNAUDITED 2021 FIRST QUARTERLY REPORT

This report is published simultaneously in the People's Republic of China pursuant to the Rules Governing the Listing of Shares on Shenzhen Stock Exchange 《( 深圳證券交易所股票上市規則》) and in Hong Kong pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

PART 1 IMPORTANT NOTICE

The board of directors, supervisory committee and the directors, supervisors and senior management of the Company confirm that this quarterly report does not contain any false information, misleading statements or material omissions, and collectively and individually accept responsibility for the truthfulness, accuracy and completeness of its contents.

All directors attended the Board meeting for approving this quarterly report.

Yang Yun Long, person in charge of the Company, Liu Min, accounting officer in charge of the Company and Zhang Xue Mei, head of accounting section (accounting executive) of the Company, hereby confirm the truthfulness, accuracy and completeness of the financial statements contained in this quarterly report.

- 1 -

PART 2 BASIC INFORMATION OF THE COMPANY

1. KEY FINANCIAL DATA AND FINANCIAL INDICATORS
   Any necessary retrospective adjustment or restatement of accounting data of prior years
   □ Yes ✓ No

			Increase/decrease
			in the current
			reporting period
			as compared
		The	to the
		corresponding	corresponding
	The current	period of	period of
	reporting period	last year	last year
Operating income (RMB)	544,093,801.68	526,079,581.62	3.42%
Net profit attributable to shareholders of the
listed Company (RMB)	-109,329,169.93	-74,046,605.73	-47.65%
Net profit attributable to shareholders of the
listed Company excluding extraordinary
profit or loss (RMB)	-110,052,476.77	-73,949,340.08	-48.82%
Net cash flow from operating activities
(RMB)	-198,994,506.89	-121,768,899.10	-63.42%
Basic earnings per share (RMB per share)	-0.137	-0.0928	-47.63%
Diluted earnings per share (RMB per share)	-0.137	-0.0928	-47.63%
Weighted average return on net assets	-6.33%	-4.33%	-2.00%
			Increase/decrease
			at the end of the
			current reporting
			period as
	At the end of		compared to the
	the current	At the end of	end of
	reporting period	last year	last year
Total assets (RMB)	4,945,297,224.14	5,175,635,815.38	-4.45%
Net assets attributable to shareholders of the
listed company (RMB)	1,671,301,045.60	1,780,737,084.59	-6.15%

Extraordinary profit or loss items and amounts

• Applicable □ Not applicable

- 2 -

		Unit: RMB
	Amount from the
	beginning of the year to
	the end of the reporting
Item	period	Note
Profit or loss on disposal of non-	-249,203.45	Mainly comprised the loss on
current assets (including written-		the disposal of certain scrap
off of provisions for assets		equipment by the Company.
impairment)
Government grants included in the	1,074,438.69	Mainly comprised the
profit or loss for the current period		government grants received
(excluding those grants that are		by the Company such as the
closely related to the Company's		subsidies for on-the-job
business and that were granted in		training paid by Shouguang
accordance with the standard		Human Resources and Social
amount or volume prescribed by		Security Bureau.
the State)
Other non-operating income and	67,879.03	-
expenses other than the above
items
Less: Effect of income tax	112,063.72	-
Effect of minority interests	57,743.71	-
(after tax)
Total	723,306.84	-

Explain the reasons for determination of the extraordinary profit or loss items defined by the Company in accordance with the definition set out in the Explanatory Announcement No. 1 on Information Disclosure by Public Issuers - Extraordinary Profit or Loss Items (《公開發行證券 的公司信息披露解釋性公告第1號 - 非經常性損益》), and of the recurring profit or loss items that are in conformity with the definition of ''extraordinary profit or loss items'' as set out in the abovementioned document.

• Applicable ✓ Not applicable

No extraordinary profit or loss item as defined and illustrated in the Explanatory Announcement No. 1 on Information Disclosure by Public Issuers - Extraordinary Profit or Loss Items was deemed to be ordinary profit or loss item for the reporting period.

- 3 -

1. TOTAL NUMBER OF SHAREHOLDERS AND TOP TEN SHAREHOLDERS AS AT THE END OF THE REPORTING PERIOD
   1. Total number of ordinary shareholders, number of preferred shareholders restored by voting rights and top ten shareholders

			Unit: share
Total number of ordinary	31,194	Total number of preferred	0
shareholders as at the	(including 31,149	shareholders restored by
end of the reporting	holders of A shares	voting rights at the end of
period	and 45 holders of	the reporting period (if
	H shares)	any)

Shareholdings of top ten shareholders

				Number of	Pledged or frozen
	Nature of	Percentage of	Number of	shares with	Status of
Name of shareholder	shareholder	shareholding	shares held	sale restriction	shares	Quantity
Shouguang Molong	State-owned legal	29.53%	235,617,000	-	-	-
Holdings Co., Ltd.	person
HKSCC Nominees	Overseas legal	20.31%	162,044,590	-	-	-
Limited	person
Shandong Zhimeng	Domestic non-	8.46%	67,494,910	-	-	-
Holdings Co., Ltd.	stated owned
	legal person
Zhang Yun San	Domestic natural	4.03%	32,168,400	-	-	-
	person
Lin Fu Long	Domestic natural	3.08%	24,602,700	-	-	-
	person
Shouguang Panjin	Domestic non-	2.53%	20,200,000	-	-	-
Property Co., Ltd.	stated owned
	legal person
Hong Kong Securities	Overseas legal	1.15%	9,153,438	-	-	-
Clearing Company	person
Limited
Lin Wei Rong	Domestic natural	0.29%	2,300,000	-	-	-
	person
Sun Xiao Ou	Domestic natural	0.26%	2,085,500	-	-	-
	person
Xie Kun	Domestic natural	0.25%	1,999,600	-	-	-
	person

- 4 -

Shareholdings of top ten shareholders not subject to lock-up

	Number of	Share type
	shares not
	subject to
Name of shareholder	lock-up held	Share type	Quantity
Shouguang Molong Holdings	235,617,000	RMB ordinary shares	235,617,000
Co., Ltd.
HKSCC Nominees Limited	162,044,590	Overseas listed foreign shares	162,044,590
Shandong Zhimeng Holdings	67,494,910	RMB ordinary shares	2,754,910
Co., Ltd.		Overseas listed foreign shares	64,740,000
Zhang Yun San	32,168,400	RMB ordinary shares	23,108,000
		Overseas listed foreign shares	9,060,400
Lin Fu Long	24,602,700	RMB ordinary shares	24,602,700
Shouguang Panjin Property Co.,	20,200,000	RMB ordinary shares	200,000
Ltd.		Overseas listed foreign shares	20,000,000
Hong Kong Securities Clearing	9,153,438	RMB ordinary shares	9,153,438
Company Limited
Lin Wei Rong	2,300,000	RMB ordinary shares	2,300,000
Sun Xiao Ou	2,085,500	RMB ordinary shares	2,085,500
Xie Kun	1,999,600	RMB ordinary shares	1,999,600
Connected relationship or	Shandong Zhimeng Holdings Co., Ltd. and Shouguang Panjin
concert party relationship	Property Co., Ltd. became parties acting in concert through
among the above shareholders	entering into a concert party agreement and they do not control
	each other.
Description of the top ten	Not applicable
ordinary shareholders
participating in margin trading
business (if any)

Whether the top ten ordinary shareholders and the top ten shareholders not subject to lock-up made the repurchase transactions during the reporting period.

• Yes ✓ No

The top ten ordinary shareholders and the top ten shareholders not subject to lock-up did not undertake the repurchase transactions during the reporting period.

2. Total number of preferred shareholders and top ten preferred shareholders □ Applicable ✓ Not applicable

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PART 3 MATERIAL MATTERS

1. CHANGES IN MAJOR FINANCIAL STATEMENTS AND FINANCIAL INDICATORS DURING THE REPORTING PERIOD AND THE REASONS THEREFOR
   ✓ Applicable □ Not applicable

1. The explanation for major changes of the Company's assets and liabilities structure during the reporting period

				Unit: RMB
		31 December
	31 March 2021	2020	Change	Reason for
Items	(Unaudited)	(Audited)	(%)	difference
Financing receivables	18,825,342.43	33,575,777.00	-43.93%	(1)
Prepayments	71,966,964.14	24,755,942.84	190.71%	(2)
Other receivables	108,188,767.56	156,486,818.72	-30.86%	(3)
Other current assets	28,988,342.93	21,904,932.90	32.34%	(4)
Taxes payable	8,956,345.00	27,192,105.60	-67.06%	(5)
Other payables	66,982,576.70	43,853,326.94	52.74%	(6)
Non-current liabilities due
within 1 year	94,438,619.62	139,784,923.46	-32.44%	(7)

1. Financing receivables decreased by 43.93% compared with the beginning of the year, mainly attributable to the negotiation of bank acceptance bills during the current period.
2. Prepayments increased by 190.71% compared with the beginning of the year, mainly attributable to the increased prepayments for materials at the end of the reporting period.
3. Other receivables decreased by 30.86% compared with the beginning of the year, mainly attributable to the collection of certain outstanding amounts during the current period in respect of the disposal of assets in last year.
4. Other current assets increased by 32.34% compared with the beginning of the year, mainly attributable to the increase in input value-added tax at the end of the reporting period.
5. Taxes payable decreased by 67.06% compared with the beginning of the year, mainly attributable to the payment of tax for last year during the current period.
6. Other payables increased by 52.74% compared with the beginning of the year, mainly attributable to the increase in accrued energy charges at the end of the current period.

- 6 -

1. 1. Non-currentliabilities due within 1 year decreased by 32.44% compared with the beginning of the year, mainly attributable to the decrease in long-term borrowings due within one year at the end of the current period.
2. The explanation for major changes of profit or loss indicators year on year during the reporting period

				Unit: RMB
	January to	January to
	March 2021	March 2020	Change	Reason for
Items	(Unaudited)	(Unaudited)	(%)	difference
Business tax and surcharges	2,441,714.88	6,111,171.52	-60.05%	(1)
Administrative expenses	75,691,897.75	58,132,503.25	30.21%	(2)
Research and development
expenses	5,028,713.10	2,591,581.91	94.04%	(3)
Asset impairment loss
(loss expressed with ''-'')	-1,255,284.76	-2,068,041.57	-39.30%	(4)
Credit impairment losses
(loss expressed with ''-'')	-1,876,507.24	-3,836,940.14	-51.09%	(5)
Gain on disposal of assets	7,096.07	46,389.96	-84.70%	(6)
Non-operating income	407,657.70	222,851.14	82.93%	(7)
Non-operating expenses	596,078.19	367,744.50	62.09%	(8)
Income tax expenses	620,782.29	1,432,996.79	-56.68%	(9)

1. Business tax and surcharges decreased by 60.05% compared with the same period of last year, mainly attributable to the decrease in value-added tax payables for the current period and the resulting decrease in surcharges.
2. Administrative expenses increased by 30.21% compared with the same period of last year, mainly attributable to the inclusion of expenses incurred by subsidiaries for routine maintenance in the current period, and the lesser orders secured in the oilfield market which led to a low capacity utilisation rate of certain production lines for further processing and, in turn, an increase in relevant expenses.
3. Research and development expenses increased by 94.04% compared with the same period of last year, mainly attributable to the increased efforts in research and development of new products during the current period and the decreased investment in research and development due to the COVID-19 pandemic over the corresponding period of last year, which resulted in a relatively higher growth in research and development expenses in the current period.

- 7 -

1. 1. Asset impairment loss decreased by 39.30% compared with the same period of last year, mainly attributable to the lower impairment loss provided in respect of inventories for the current period.
   2. Credit impairment loss decreased by 51.09% compared with the same period of last year, mainly attributable to the lower credit impairment loss provided in respect of account receivables for the current period.
   3. Gain on disposal of assets decreased by 84.70% compared with the same period of last year, mainly attributable to the lesser equipment disposed during the current period compared with the same period of last year.
   4. Non-operationincome increased by 82.93% compared with the same period of last year, mainly attributable to the more income from claims of breach of contracts received during the current period compared with the same period of last year.
   5. Non-operatingexpenses increased by 62.09% compared with the same period of last year, mainly attributable to increase in net loss on retirement of certain equipment during the current period.
   6. Income tax expenses decreased by 56.68% compared with the same period of last year, mainly attributable to decrease in deferred income tax expenses recognised for the current period.
2. The explanation for changes of cash flow statement year on year during the reporting period

				Unit: RMB
	January to	January to
	March 2021	March 2020	Change	Reason for
Items	(Unaudited)	(Unaudited)	(%)	difference
Net cash flow generated
from operating activities	-198,994,506.89	-121,768,899.10	-63.42%	(1)
Net cash flows generated
from investing activities	41,565,007.36	-11,021,698.76	477.12%	(2)
Net cash flow generated
from financing activities	-158,652,310.39	73,991,695.09	-314.42%	(3)

1. Net cash flow generated from operating activities decreased by 63.42% compared with the same period last year, mainly attributable to the increase in cash payments for purchase of raw materials during the current period.

- 8 -

1. 1. Net cash flows generated from investing activities increased by 477.12% compared with the same period last year, mainly attributable to the collection of certain outstanding amounts during the current period in respect of the disposal of assets in last year.
   2. Net cash flow generated from financing activities decreased by 314.42% compared with the same period last year, mainly attributable to the increase in cash repayment for due debts during the current period.
2. THE PROGRESS OF SIGNIFICANT EVENTS, THEIR IMPACT AND THE ANALYSIS OF SOLUTIONS
3. • Applicable □ Not Applicable

1. Change of the scope of business of the Company
   The Company convened the eighth extraordinary meeting of the sixth session of the board of directors on 8 February 2021 and the first extraordinary general meeting for 2021 on 3 March 2021. At the meetings, the Company considered and approved the Resolution on the Change of the Scope of Business of the Company and the Amendments to the Articles of Association (《關於變更公司經營範圍及修訂〈公司章程〉的議案》). The related announcement is available on the information disclosure website of cninfo (http://www.cninfo.com.cn). On 4 March 2021, the Company completed the industrial and commercial registration for the change, and received the replaced business licence from Weifang Municipal Administration for March Regulation (濰坊市市場監督管理局).
2. Completion of registration for the transfer under controlling shareholder agreement and change in controlling shareholders of the Company
   On 24 March 2021, the Company was notified by Shouguang Molong Holdings Co., Ltd., a controlling shareholder, that it has entered into an agreement for the transfer of 235,617,000 A shares of the Company held by Mr. Zhang En Rong (which represented 29.53% of the total share capital of the Company), and the registration of transfer was completed with China Securities Depository and Clearing Co., Ltd. Shenzhen Branch on 23 March 2021. Upon completion of the share transfer, Molong Holdings holds 235,617,000 shares of the listed company, all of them are circulating shares not subject to lock-up and representing 29.53% of the total share capital of the listed company, making it become a controlling shareholder of the listed company. the actual controller of the listed company remains e State-owned Assets Supervision and Administration Commission of Shouguang City (壽光市國有資產監督管理 局). The related announcement is available on the information disclosure website of cninfo (http://www.cninfo.com.cn).

- 9 -

	Date of	Search index of interim
Particulars of significant matters	disclosure	report disclosure website
Change of scope of business of the	6 March 2021	cninfo.com
Company		(http://www.cninfo.com.cn)
		(Announcement No. 2021-
		011)
Completion of registration for the transfer	25 March 2021	cninfo.com
under controlling shareholder agreement		(http://www.cninfo.com.cn)
and change in controlling shareholders of		(Announcement No. 2021-
the Company		015)

The implementation of share repurchase

• Applicable ✓ Not Applicable

The implementation of reducing shareholdings in share repurchase through centralized bidding

1. • Applicable ✓ Not Applicable
2. OBLIGATED PARTIES SUCH AS ACTUAL CONTROLLERS, SHAREHOLDERS, RELATED PARTIES, ACQUIRER AND THE COMPANY WHO HAVE NOT FULFILLED THEIR OBLIGATIONS DURING THE REPORTING PERIOD AS SCHEDULED
3. • Applicable ✓ Not Applicable

There were no obligations in the reporting period that the obligated parties such as actual controllers, shareholders, related parties, acquirer and the Company who have not fulfilled their obligations during the reporting period as scheduled.

IV. INVESTMENTS IN FINANCIAL ASSETS

1. Investments in securities

• Applicable ✓ Not applicable

The Company did not hold any investments in securities during the reporting period.

2. Investments in derivatives

• Applicable ✓ Not applicable

The Company did not hold any investments in derivatives during the reporting period.

- 10 -

1. PROGRESS OF FUND-RAISING INVESTMENT PROJECTS

• Applicable ✓ Not applicable

VI. FORECAST OF THE OPERATING RESULTS FROM JANUARY TO JUNE 2021

Alert of forecast regarding potential loss in total net profit from the beginning of the year to the end of the next reporting period or significant year-on-year changes and its reason(s)

• Applicable ✓ Not applicable

VII. MATERIAL CONTRACTS IN THE ORDINARY COURSE OF BUSINESS

• Applicable ✓ Not applicable

VIII. ENTRUSTED WEALTH MANAGEMENT

• Applicable □ Not applicable

Unit: RMB ten thousand

		Amount for
	Source of funds for the	the entrusted		Amount
	entrusted wealth	wealth	Unmatured	due but not
Type	management	management	balance	received
Bank financial products	Self-owned fund	1,000	0	0
Total		1,000	0	0

Particulars of high-risk entrusted wealth management with individually significant, low-security,low-liquidity,non-principal protected products

• Applicable ✓ Not applicable

Expected irrecoverable principal or other potential impairment in entrusted wealth management

• Applicable ✓ Not applicable

IX. NON-COMPLIANT EXTERNAL GUARANTEES

• Applicable ✓ Not applicable

There were no non-compliant external guarantees during the reporting period.

1. OCCUPATION OF NON-OPERATING FUNDS OF THE LISTED COMPANY BY CONTROLLING SHAREHOLDERS AND THEIR RELATED PARTIES
   □ Applicable ✓ Not applicable

- 11 -

There was no occupation of non-operating funds of the listed company by controlling shareholders and their related parties during the reporting period.

XI. ACTIVITY REGISTRATION FORM OF RECEPTION INVESTIGATION, COMMUNICATION, INTERVIEWS AND OTHER ACTIVITIES DURING THE REPORTING PERIOD

• Applicable ✓ Not applicable

There were no such activities during the reporting period.

- 12 -

PART 4 FINANCIAL STATEMENTS

1. FINANCIAL STATEMENTS
   1. Consolidated balance sheet
   Prepared by: Shandong Molong Petroleum Machinery Company Limited

		Unit: RMB
Item	31 March 2021	31 December 2020
Current assets:
Monetary funds	559,304,957.53	759,979,803.03
Settlement deposits	-	-
Lending funds	-	-
Financial assets held for trading	-	-
Derivative financial assets	-	-
Bills receivable	135,794,852.67	164,945,170.51
Accounts receivable	211,149,208.60	287,920,595.28
Financing receivables	18,825,342.43	33,575,777.00
Loans and advances	846,005.30	951,005.30
Prepayments	71,966,964.14	24,755,942.84
Insurance receivables	-	-
Reinsurance receivables	-	-
Reinsurance contract reserves receivable	-	-
Other receivables	108,188,767.56	156,486,818.72
Including: Interest receivables	-	-
Dividends receivable	-	-
Purchases of sell-back financial assets	-	-
Inventories	922,801,841.46	787,377,614.78
Contract assets	-	-
Assets held for sale	-	-
Non-current assets due within one year	-	-
Other current assets	28,988,342.93	21,904,932.90
Total current assets	2,057,866,282.62	2,237,897,660.36

- 13 -

Item	31 March 2021	31 December 2020
Non-current assets:
Loans and advances	-	-
Debt investments	-	-
Other debt investments	-	-
Long-term receivables	-	-
Long-term equity investments	2,314,697.29	2,314,697.29
Investments in other equity instruments	-	-
Other non-current financial assets	-	-
Investment properties	-	-
Fixed assets	2,438,615,362.74	2,493,577,016.35
Construction-in-progress	8,509,049.09	7,620,542.62
Productive biological assets	-	-
Oil and gas assets	-	-
Right-of-use assets	3,826,592.25	4,591,910.73
Intangible assets	389,109,286.64	393,688,845.70
Development expenditures	9,781,661.36	-
Goodwill	-	-
Long-term deferred expenses	-	-
Deferred income tax assets	34,546,184.55	35,217,034.73
Other non-current assets	728,107.60	728,107.60
Total non-current assets	2,887,430,941.52	2,937,738,155.02
Total assets	4,945,297,224.14	5,175,635,815.38

- 14 -

Item	31 March 2021	31 December 2020
Current liabilities:
Short-term borrowings	1,986,021,847.68	2,054,225,378.29
Borrowings from the central bank	-	-
Borrowing funds	-	-
Financial liabilities held for trading	-	-
Derivative financial liabilities	-	-
Bills payable	140,024,134.64	121,472,511.10
Accounts payable	623,475,013.23	648,352,428.48
Receipts in advance	-	-
Contract liabilities	101,795,539.05	83,749,468.02
Proceeds from disposal of buy-back financial
assets	-	-
Customer bank deposits and due to banks and
other financial institutions	-	-
Securities brokerage deposits	-	-
Securities underwriting brokerage deposits	-	-
Salaries payable	54,383,956.92	54,493,884.87
Taxes payable	8,956,345.00	27,192,105.60
Other payables	66,982,576.70	43,853,326.94
Including: Interests payable	-	-
Dividends payable	-	-
Brokerage and commission payables	-	-
Reinsurance payables	-	-
Liabilities held for sale	-	-
Non-current liabilities due within one year	94,438,619.62	139,784,923.46
Other current liabilities	44,228,673.29	50,195,434.08
Total current liabilities	3,120,306,706.13	3,223,319,460.84

- 15 -

Item			31 March 2021	31 December 2020
Non-current liabilities:
Insurance contract reserves			-	-
Long-term borrowings			110,757,919.31	114,063,150.53
Bonds payable			-	-
Including: Preferred shares			-	-
Perpetual bonds			-	-
Lease liabilities			5,121,808.52	4,968,359.84
Long-term payables			-	4,585,000.00
Long-term salaries payable			-	-
Estimated liabilities			12,860,151.58	14,392,824.64
Deferred income			7,176,480.86	7,176,480.86
Deferred income tax liabilities			5,510,580.98	5,560,648.87
Other non-current liabilities			-	-
Total non-current liabilities			141,426,941.25	150,746,464.74
Total liabilities			3,261,733,647.38	3,374,065,925.58
Owners' equity:
Share capital			797,848,400.00	797,848,400.00
Other equity instruments			-	-
Including: Preferred shares			-	-
Perpetual bonds			-	-
Capital reserve			863,169,158.42	863,169,158.42
Less: Treasury shares			-	-
Other comprehensive income			-2,122,446.88	-2,015,577.82
Special reserve			-	-
Surplus reserve			187,753,923.88	187,753,923.88
General risk reserve			11,236.91	11,236.91
Undistributed profits
(loss expressed with ''-'')			-175,359,226.73	-66,030,056.80
Total equity attributable to owners of the
parent company			1,671,301,045.60	1,780,737,084.59
Minority interests			12,262,531.16	20,832,805.21
Total owners' equity			1,683,563,576.76	1,801,569,889.80
Total liabilities and owners' equity		4,945,297,224.14	5,175,635,815.38
Legal representative:	Chief accounting officer: Head of accounting department:
Yang Yun Long	Liu Min	Zhang Xue Mei

- 16 -

2. Balance sheet of the parent company

		Unit: RMB
Item	31 March 2021	31 December 2020
Current assets:
Monetary funds	493,992,963.74	708,481,226.15
Financial assets held for trading	-	-
Derivative financial assets	-	-
Bills receivable	132,213,668.35	164,945,170.51
Accounts receivable	384,588,002.34	442,232,065.03
Financing receivables	14,259,646.25	10,980,000.00
Prepayments	587,705,316.42	618,700,408.46
Other receivables	813,163,416.13	756,323,484.10
Including: Interest receivables	-	-
Dividends receivable	-	-
Inventories	608,551,569.55	511,814,843.00
Contract assets	-	-
Assets held for sale	-	-
Non-current assets due within one year	-	-
Other current assets	10,296,829.26	3,749,202.40
Total current assets	3,044,771,412.04	3,217,226,399.65

- 17 -

Item	31 March 2021	31 December 2020
Non-current assets:
Debt investments	-	-
Other debt investments	-	-
Long-term receivables	-	-
Long-term equity investments	1,144,019,921.73	1,144,019,921.73
Investments in other equity instruments	-	-
Other non-current financial assets	-	-
Investment properties	-	-
Fixed assets	865,478,970.23	889,048,148.96
Construction-in-progress	888,506.47	-
Productive biological assets	-	-
Oil and gas assets	-	-
Right-of-use assets	3,826,592.25	4,591,910.73
Intangible assets	88,920,842.92	91,321,208.29
Development expenditures	9,781,661.36	-
Goodwill	-	-
Long-term deferred expenses	-	-
Deferred income tax assets	32,422,656.74	33,048,514.20
Other non-current assets	378,107.60	378,107.60
Total non-current assets	2,145,717,259.30	2,162,407,811.51
Total assets	5,190,488,671.34	5,379,634,211.16

- 18 -

Item	31 March 2021	31 December 2020
Current liabilities:
Short-term borrowings	1,474,588,356.88	1,543,791,887.49
Financial liabilities held for trading	-	-
Derivative financial liabilities	-	-
Bills payable	631,891,067.03	692,839,443.49
Accounts payable	226,469,698.91	219,825,699.80
Receipts in advance	-	-
Contract liabilities	52,051,029.23	55,899,703.37
Salaries payable	34,253,679.11	34,757,933.77
Taxes payable	6,010,684.71	23,942,984.02
Other payables	160,361,307.43	139,153,160.81
Including: Interests payable	-	-
Dividends payable	-	-
Liabilities held for sale	-	-
Non-current liabilities due within one year	52,800,636.50	63,235,847.52
Other current liabilities	37,850,410.82	46,582,393.75
Total current liabilities	2,676,276,870.62	2,820,029,054.02
Non-current liabilities:
Long-term borrowings	-	-
Bonds payable	-	-
Including: Preferred shares	-	-
Perpetual bonds	-	-
Lease liabilities	5,121,808.52	4,968,359.84
Long-term payables	-	4,585,000.00
Long-term salaries payable	-	-
Estimated liabilities	12,860,151.58	14,392,824.64
Deferred income	-	-
Deferred income tax liabilities	-	-
Other non-current liabilities	-	-
Total non-current liabilities	17,981,960.10	23,946,184.48
Total liabilities	2,694,258,830.72	2,843,975,238.50

- 19 -

Item	31 March 2021	31 December 2020
Owners' equity:
Share capital	797,848,400.00	797,848,400.00
Other equity instruments	-	-
Including: Preferred shares	-	-
Perpetual bonds	-	-
Capital reserve	863,150,490.92	863,150,490.92
Less: Treasury shares	-	-
Other comprehensive income	-	-
Special reserve	-	-
Surplus reserve	187,753,923.88	187,753,923.88
Undistributed profits	647,477,025.82	686,906,157.86
Total owners' equity	2,496,229,840.62	2,535,658,972.66
Total liabilities and owners' equity	5,190,488,671.34	5,379,634,211.16

- 20 -

3. Consolidated income statement

		Unit: RMB
	Amount for the	Amount for the
Item	current period	previous period
I. Total operating revenue	544,093,801.68	526,079,581.62
Including: Operating revenue	544,093,801.68	526,079,581.62
Interest income	-	-
Insurance premium earned	-	-
Brokerage and commission income	-	-
II. Total operating costs	659,121,911.28	598,740,436.26
Including: Operating costs	531,702,272.26	486,514,881.33
Interest expenses	-	-
Brokerage and commission expenses	-	-
Surrenders	-	-
Net compensation expenses	-	-
Net charge of insurance liability
reserve	-	-
Policyholder dividend expenses	-	-
Reinsurance premiums	-	-
Taxes and surcharges	2,441,714.88	6,111,171.52
Selling expenses	3,118,517.16	2,907,377.52
Administrative expenses	75,691,897.75	58,132,503.25
Research and development expenses	5,028,713.10	2,591,581.91
Finance costs	41,138,796.13	42,482,920.73
Including: Interest expenses	36,706,445.15	45,123,737.26
Interest income	1,274,619.35	1,343,525.86
Add: Other income	1,074,438.69	30,107.74
Investment income
(loss expressed with ''-'')	-	-
Including: Gains on investment in
associates and joint ventures	-	-
Gain on derecognition of
financial assets measured at
amortised cost	-	-
Exchange gains (loss expressed with ''-'')	-	-
Net gains on exposure hedges
(loss expressed with ''-'')	-	-
Gain on fair value changes
(loss expressed with ''-'')	-	-
Credit impairment losses	-1,876,507.24
(loss expressed with ''-'')	-3,836,940.14
Asset impairment losses	-1,255,284.76
(loss expressed with ''-'')	-2,068,041.57
Gain on disposal of assets	7,096.07
(loss expressed with ''-'')	46,389.96
III. Operating profit (loss expressed with ''-'')	-117,078,366.84	-78,489,338.65
Add: Non-operating income	407,657.70	222,851.14
Less: Non-operating expenses	596,078.19	367,744.50
IV. Total profit (total loss expressed with ''-'')	-117,266,787.33	-78,634,232.01
Less: Income tax expenses	620,782.29	1,432,996.79

- 21 -

	Amount for the	Amount for the
Item	current period	previous period
V. Net profit (net loss expressed with ''-'')	-117,887,569.62	-80,067,228.80
(I) By business continuity
1. Net profit from continuing operations	-117,887,569.62
(net loss expressed with ''-'')	-80,067,228.80
2. Net profit from discontinued operations
(net loss expressed with ''-'')	-	-
(II) By attributable ownership
1. Net profit attributable to the owners of	-109,329,169.93
the parent company	-74,046,605.73
2. Minority interests	-8,558,399.69	-6,020,623.07
VI. Other comprehensive income, net of tax	-118,743.42	-278,161.67
Other comprehensive income attributable to	-106,869.06
owners of the parent company, net of tax	-250,345.51
(I) Other comprehensive income that may not
be reclassified to profit or loss	-	-
1. Changes on remeasurement of defined
benefit plans	-	-
2. Other comprehensive income that may not
be transferred to profit or loss under
equity accounting	-	-
3. Fair value changes in investments in
other equity instruments	-	-
4. Fair value changes in credit risk of the
Company	-	-
5. Others	-	-
(II) Other comprehensive income that will be	-106,869.06
reclassified to profit or loss	-250,345.51
1. Other comprehensive income that may be
transferred to profit or loss under equity
accounting	-	-
2. Fair value changes in other debt
investments	-	-
3. Reclassification of financial assets to
other comprehensive income	-	-
4. Credit-impaired provision for other debt
investments	-	-
5. Cash flow hedge reserve	-	-
6. Exchange differences on translation of	-106,869.06
foreign financial statements	-250,345.51
7. Others	-	-
Other comprehensive income attributable to	-11,874.36
minority shareholders, net of tax	-27,816.16

- 22 -

	Amount for the	Amount for the
Item	current period	previous period
VII. Total comprehensive income	-118,006,313.04	-80,345,390.47
Total comprehensive income attributable to	-109,436,038.99
owners of the parent company	-74,296,951.24
Total comprehensive income attributable to	-8,570,274.05
minority shareholders	-6,048,439.23
VIII. Earnings per share:
(I) Basic earnings per share	-0.137	-0.0928
(II) Diluted earnings per share	-0.137	-0.0928

Net profit of consolidated entity before business combination under common control was RMB nil for the current period, as compared to the net profit of consolidated entity of RMB nil for the prior period.

Legal representative:	Chief accounting officer:	Head of accounting department:
Yang Yun Long	Liu Min	Zhang Xue Mei

- 23 -

4. Income statement of the parent company

		Unit: RMB
	Amount for the	Amount for the
Item	current period	previous period
I. Operating revenue	484,451,531.33	464,193,684.53
Less: Operating costs	469,449,782.89	427,539,647.88
Taxes and surcharges	1,014,681.42	4,752,890.37
Selling expenses	2,794,473.78	2,682,387.37
Administrative expenses	17,453,511.70	23,473,938.87
Research and development expenses	5,028,713.10	2,591,581.91
Finance costs	24,804,178.93	27,344,167.61
Including: Interest expenses	20,631,299.63	29,867,294.04
Interest income	1,126,196.50	1,373,123.92
Add: Other income	886,529.57	25,983.64
Investment income
(loss expressed with ''-'')	-	-
Including: Gains on investment in
associates and joint ventures	-	-
Gain on derecognition of
financial assets measured at
amortised cost
(loss expressed with ''-'')	-	-
Net gains on exposure hedges
(loss expressed with ''-'')	-	-
Gain on fair value changes
(loss expressed with ''-'')	-	-
Credit impairment losses	-2,134,642.16
(loss expressed with ''-'')	-3,930,744.20
Asset impairment losses	-1,255,284.76
(loss expressed with ''-'')	-2,068,041.57
Gains on disposal of assets
(loss expressed with ''-'')	-	-
II. Operating profit (loss expressed with ''-'')	-38,597,207.84	-30,163,731.61
Add: Non-operating income	140,124.77	68,688.11
Less: Non-operating expenses	346,191.51	321,755.50
III. Total profit (total loss expressed with ''-'')	-38,803,274.58	-30,416,799.00
Less: Income tax expenses	625,857.46	1,453,058.79
IV. Net profit (net loss expressed with ''-'')	-39,429,132.04	-31,869,857.79
(I) Net profit from continuing operations	-39,429,132.04
(net loss expressed with ''-'')	-31,869,857.79
(II) Net profit from discontinued operations
(net loss expressed with ''-'')	-	-

- 24 -

	Amount for the	Amount for the
Item	current period	previous period
V. Other comprehensive income, net of tax

1. Other comprehensive income that may not be reclassified to profit or loss

1. Changes on remeasurement of defined
benefit plans	-	-

2. Other comprehensive income that may not be transferred to profit or loss under

	equity accounting	-	-
3.	Fair value changes in investments in other
	equity instruments	-	-
4.	Fair value changes in credit risk of the
	Company	-	-
5.	Others	-	-

1. Other comprehensive income that will be reclassified to profit or loss

1. Other comprehensive income that may be transferred to profit or loss under equity

	accounting	-	-
2.	Fair value changes in other debt
	investments	-	-
3.	Reclassification of financial assets to
	other comprehensive income	-	-
4.	Credit-impaired provision for other debt
	investments	-	-
5.	Cash flow hedge reserve	-	-
6.	Exchange differences on translation of
	foreign financial statements	-	-
7.	Others	-	-
VI. Total comprehensive income	-39,429,132.04	-31,869,857.79
VII. Earnings per share:
(I) Basic earnings per share	-	-
(II) Diluted earnings per share	-	-

- 25 -

5. Consolidated statement of cash flows

		Unit: RMB
	Amount for the	Amount for the
Item	current period	previous period
I. Cash flows from operating activities:
Cash received from sales of goods and rendering	612,714,179.55
of services	622,939,983.78
Net increase in customer deposits and due to
banks and other financial institutions	-	-
Net increase in borrowings from the central bank	-	-
Net increase in borrowing funds from other
financial institutions	-	-
Cash received from receiving premiums of
original insurance contracts	-	-
Net cash received from reinsurance business	-	-
Net increase in deposits from policyholders and
investments	-	-
Cash received of interests, brokerages and
commissions	-	-
Net increase in borrowing funds	-	-
Net increase in repurchase business capital	-	-
Net cash proceeds from securities brokerage	-	-
Receipts of tax refunds	2,803,476.82	6,810,368.90
Other cash received relating to operating	4,360,773.43
activities	11,173,995.56
Sub-total of cash inflows from operating
activities	619,878,429.80	640,924,348.24
Cash paid for purchasing goods and receiving	574,822,504.93
services	524,263,205.81
Net increase in loans and advances to customers	-434,000.00	-145,974.85
Net increase in deposits with the central bank
and other financial institutions	-	-
Cash paid for compensations of original
insurance contracts	-	-
Net increase in lending funds	-	-
Cash paid for interests, brokerages and
commissions	-	-
Cash paid for policyholder dividends	-	-
Cash paid to and on behalf of employees	58,713,225.60	41,431,460.65
Taxes paid	21,366,163.09	6,601,164.50
Other cash paid relating to operating activities	164,405,043.07	190,543,391.23
Sub-total of cash outflows from operating
activities	818,872,936.69	762,693,247.34
Net cash flow generated from operating
activities	-198,994,506.89	-121,768,899.10

- 26 -

	Amount for the	Amount for the
Item	current period	previous period
II. Cash flows from investing activities:
Cash received from return on investments	-	-
Cash received from gains on investments	-	-
Net cash from disposal of fixed assets,	50,020,691.50
intangible assets and other long-term assets	-
Net cash received from disposal of subsidiaries
and other business entities	-	-
Other cash received relating to investing
activities	-	-
Sub-total of cash inflows from investing
activities	50,020,691.50	-
Cash paid for purchase and construction of fixed
assets, intangible assets and other long-term	8,455,684.14
assets	11,021,698.76
Cash paid for investments	-	-
Net increase in pledged loans	-	-
Net cash paid for acquisition of subsidiaries and
other business entities	-	-
Other cash paid relating to investing activities	-	-
Sub-total of cash outflows from investing
activities	8,455,684.14	11,021,698.76
Net cash flow generated from investing
activities	41,565,007.36	-11,021,698.76
III. Cash flows from financing activities:
Cash received from capital contributions	-	-
Including: Cash received from capital
contributions from minority
shareholders by subsidiaries	-	-
Cash received from borrowings	1,017,360,007.53	1,218,151,500.00
Other cash received relating to financing
activities	-	-
Sub-total of cash inflows from financing
activities	1,017,360,007.53	1,218,151,500.00
Cash paid for repayment of debts	1,140,584,025.11	1,103,736,783.31
Cash paid for distribution of dividends and	35,428,292.81
profits or repayment of interests	40,423,021.60
Including: Dividends and profits paid to
minority shareholders by subsidiaries	-	-
Other cash paid relating to financing activities	-	-
Sub-total of cash outflows from financing
activities	1,176,012,317.92	1,144,159,804.91
Net cash flow generated from financing
activities	-158,652,310.39	73,991,695.09

- 27 -

	Amount for the	Amount for the
Item	current period	previous period
IV. Effect of changes in foreign exchange rate on
cash and cash equivalents	-22,429.03	-3,401,974.52
V. Net increase in cash and cash equivalents	-316,104,238.95	-62,200,877.29
Add: Balance of cash and cash equivalents at	699,989,196.48
the beginning of the period	496,256,836.18
VI. Balance of cash and cash equivalents at the
end of the period	383,884,957.53	434,055,958.89

- 28 -

6. Statement of cash flows of the parent company

		Unit: RMB
	Amount for the	Amount for the
Item	current period	previous period
I. Cash flows from operating activities:
Cash received from sales of goods and rendering	510,400,689.03
of services	551,853,857.37
Refunds of taxes received	2,803,476.82	6,722,591.72
Other cash received relating to operating	22,426,193.24
activities	1,857,741.03
Sub-total of cash inflows from operating
activities	535,630,359.09	560,434,190.12
Cash paid for purchasing goods and receiving	621,448,070.82
services	169,508,007.03
Cash paid to and on behalf of employees	38,035,311.82	26,146,448.77
Cash paid for taxes	19,012,182.13	4,941,242.62
Other cash paid relating to operating activities	113,466,665.44	175,624,282.78
Sub-total of cash outflows from operating
activities	791,962,230.21	376,219,981.20
Net cash flow generated from operating
activities	-256,331,871.12	184,214,208.92
II. Cash flows from investing activities
Cash received from disposal of investments	-	-
Cash received from gains on investments	-	-
Net cash from disposal of fixed assets,	50,000,000.00
intangible assets and other long-term assets	-
Net cash received from disposal of subsidiaries
and other business entities	-	-
Other cash received relating to investing
activities	-	-
Sub-total of cash inflows from investing
activities	50,000,000.00	-
Cash paid for purchase and construction of fixed
assets, intangible assets and other long-term	225,000.00
assets	161,000.00
Cash paid for investments	-	-
Net cash paid for acquisition of subsidiaries and
other business entities	-	-
Other cash paid relating to investing activities	-	-
Sub-total of cash outflows from investing
activities	225,000.00	161,000.00
Net cash flow generated from investing
activities	49,775,000.00	-161,000.00

- 29 -

	Amount for the	Amount for the
Item	current period	previous period
III. Cash flows from financing activities:
Cash received from capital contributions	-	-
Cash received from borrowings	610,760,007.53	762,551,500.00
Other cash received relating to financing activities	-	-
Sub-total of cash inflows from financing activities	610,760,007.53	762,551,500.00
Cash paid for repayment of liabilities	696,484,025.11	978,136,783.31
Cash paid for dividend and profit distributions or	17,923,898.68
interest repayments	27,464,641.02
Other cash paid relating to financing activities	-	-
Sub-total of cash outflows from financing
activities	714,407,923.79	1,005,601,424.33
Net cash flow generated from financing activities	-103,647,916.26	-243,049,924.33
IV. Effect of changes in foreign exchange rate on cash
and cash equivalents	-38,975.03	-3,459,799.67
V. Net increase in cash and cash equivalents	-310,243,762.41	-62,456,515.08
Add: Balance of cash and cash equivalents at the	664,816,726.15
beginning of the period	471,734,072.09
VI. Balance of cash and cash equivalents at the end
of the period	354,572,963.74	409,277,557.01

1. DESCRIPTION OF FINANCIAL STATEMENT ADJUSTMENT
2. 1. Adjustment to the financial statements at the beginning of the year of first implementation since 2021 when the new lease standard was implemented for the first time
   2. • Applicable ✓ Not applicable
   3. Description of the retrospective adjustment to the comparative figures for the previous period since 2021 when the new lease standard was first implemented
   4. • Applicable ✓ Not applicable

- 30 -

III. AUDIT REPORT

Whether the first quarterly report has been audited

• Yes ✓ No

The first quarterly report of the Company is unaudited.

By order of the Board

Shandong Molong Petroleum Machinery Company Limited*

Yang Yun Long

Chairman

Shandong, the PRC

28 April 2021

As at the date of this announcement, the Board comprises the executive Directors, namely Mr. Yang Yun Long, Mr. Yuan Rui, Mr. Liu Min and Mr. Li Zhi Xin; the non-executive Directors, namely Mr. Yao You Ling and Mr. Wang Quan Hong; and the independent non-executive Directors, namely Mr. Tang Qing Bin, Mr. Song Zhi Wang and Mr. Cai Zhong Jie.

• For identification purpose only

- 31 -