Shanghai Qingpu Fire Fighting Equipment : 2017/05/10 - FIRST QUARTERLY RESULT ANNOUNCEMENT FOR THE THREE MONTHS ENDED 31 MARCH 2017

(a joint stock limited company incorporated in the People's Republic of China)

(Stock Code: 8115) FIRST QUARTERLY RESULT ANNOUNCEMENT FOR THE THREE MONTHS ENDED 31 MARCH 2017 CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET ("GEM") OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the main board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the "Stock Exchange") 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. This announcement, for which the directors (the "Directors") of Shanghai Qingpu Fire-Fighting Equipment Co., Ltd. collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM of the Stock Exchange for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquires, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

* For identification purposes only

QUARTERLY RESULTS (UNAUDITED)

The Board of Directors (the "Board") of Shanghai Qingpu Fire-Fighting Equipment Co., Ltd. (the "Company", and together with its subsidiaries, collectively the "Group") is pleased to announce the unaudited results of the Group for the three months ended 31 March 2017 together with the unaudited comparative figures for the corresponding period in 2016, as follows:

Unaudited Three months ended 31 March
2017	2016
Notes	RMB'000	RMB'000
Revenue	3	16,396	20,378
Cost of sales	(12,512)	(16,639)
Gross profit	3,884	3,739
Other income and gains	3	648	459
Selling and distribution expenses	(965)	(771)
Administrative expenses	(4,203)	(4,200)
Finance cost	(5)	(8)
Loss before tax	(641)	(781)
Income tax expense	4	(119)	(208)
Loss for the period and total comprehensive loss for the period	(760)	(989)
Attributable to:
Owners of the Company	(727)	(765)
Non-controlling interests	(33)	(224)
(760)	(989)
Dividend	6	-	-
Loss per share (RMB)
- Basic (cents)	5	(0.39)	(0.41)
- Diluted (cents)	(0.39)	(0.41)

Notes:

1. GENERAL

   Shanghai Qingpu Fire-Fighting Equipment Co., Ltd. (the "Company") was established in the People's Republic of China (the "PRC") and was transformed into a joint stock limited liability company on 1 December 2000 and was renamed as Shanghai Qingpu Fire-Fighting Equipment Co., Ltd. ("上海青浦消防 器材股份有限公司"). The registered office of the Company is located at No. 1988, Jihe Road, Hua Xin Town, Qingpu District, Shanghai, the PRC and its principal place of business in Hong Kong is situated at Unit 2605, Island Place Tower, 510 King's Road, North Point, Hong Kong.

   The Company's H shares are listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited.

   During the period, the Group was involved in the following principal activities:

   • manufacture and sale of pressure vessels (including fire-fighting equipment products and pressure

     vessels);

   • provision of fire technology inspection services;

   • manufacture and trading of iron casted grooved couplings;

   • trading of sanitary-ware and other products;

   • sales of aquarium products; and

   • marine fire-fighting equipment installation and inspection.

     In the opinion of the directors, the Company's immediate holding company is 聯城消防集團股份有限公司 (literally translated as "Liancheng Fire-Fighting Group Joint Stock Co., Ltd.," "Liancheng"), which is a limited liability company established in the PRC, and the ultimate holding company is 浙江恒泰房地產有 限公司 (literally translated as "Zhejiang Hengtai Real Estate Company Limited", "Zhejiang Hengtai"), which is a limited liability company established in the PRC.

2. PRINCIPAL ACCOUNTING POLICIES

   The unaudited condensed financial statements of the Group have been prepared in accordance with International Accounting Standard ("IAS") No. 34 "Interim Financial Reporting" and International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board ("IASB") and the Rules Governing the Listing of Securities on the GEM. The financial information has been prepared under the historical convention, except for investment properties which are measured at fair value.

   The condensed financial statements for the three months ended 31 March 2017 are unaudited, but have been reviewed by the audit committee of the Company.

   The accounting policies adopted are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2016.

3. TURNOVER, OTHER INCOME AND GAINS

   Revenue, represents income arising from the Group's principal activities, being manufacture and sale of pressure vessels (including fire fighting equipment products and pressure vessels), provision of fire technology inspection services, trading of iron casted grooved couplings, sales of aquarium products, trading of sanitary-ware and other products and commission income, and installation and sales of marine fire-fighting equipment and provision of inspection services, net of business tax, value-added tax, trade discounts and returns during the period.

   An analysis of the Group's revenue, other income and gains is as follows:

   Unaudited
   Three months ended 31 March
   2017	2016
   RMB'000	RMB'000
   Revenue
   Sales of pressure vessels	10,231	11,551
   Inspection service fees	1,871	2,439
   Sales of aquarium products	1,719	978
   Commission income on trading of sanitary-ware and other products	355	2,849
   Sales of marine fire-fighting equipment	1,941	2,561
   Marine fire-fighting equipment inspection service fees	279	-
   16,396	20,378
   Other income and gains
   Interest income	3	9
   Income from investment products	76	-
   Gross rental income	425	425
   Sales of scraps	144	25
   648	459
   Total revenue, other income and gains	17,044	20,837

4. INCOME TAX

   No provision for Hong Kong profits tax has been made as the Group had no assessable profits arising in Hong Kong during the three months ended 31 March 2017 (three months ended 31 March 2016: Nil).

   Under the Corporate Income Tax Law, the corporate income tax ("CIT") rate is calculated at a rate of 25% (three months ended 31 March 2016: 25%) on the Group's estimated assessable profits for the three months ended 31 March 2017.

   Two of the Company's subsidiaries have been designated as small-scale enterprises. Pursuant to the notice of the Ministry of Finance and the State Administration of Taxation on Preferential Income Tax Policies for Small Low-Profit Enterprises, these two subsidiaries were subject to the concessionary CIT rates of 10% of assessable profits (i.e. 20% on the 50% assessable profits) and 1% of its revenue (i.e. at a rate of 25% on 4% of its revenue), respectively, for the three months ended 31 March 2017 and 2016.

   Unaudited
   Three months ended 31 March
   2017	2016
   RMB'000	RMB'000
   Current tax - PRC:
   Provision for the period	119	208

   For the three months ended 31 March 2017, the unrecognised deferred tax assets in respect of tax benefits from unrecognised tax losses of the Group is approximately RMB295,000 (three months ended 31 March 2016: approximately RMB506,000). The Group did not have any material unprovided deferred tax for the three months ended 31 March 2017 and 2016 as the temporary differences are immaterial.

5. LOSS PER SHARE

   The calculation of the basic loss per share for the three months ended 31 March 2017 is based on the loss attributable to equity holders of the Company of approximately RMB727,000 (three months ended 31 March 2016: RMB765,000), and on the number of 187,430,000 ordinary shares (31 March 2016: 187,430,000) in issue during the period.

   No adjustment has been made to the basic earnings per share amounts for the three months ended 31 March 2017 and 2016 in respect of a dilution as the Group had no potentially dilutive ordinary shares in issue during those periods.

6. DIVIDEND

   No dividend have been paid or declared by the Group during the three months ended 31 March 2017 (three months ended 31 March 2016: Nil).

7. EQUITY Attributable to owners of the Company

   Share capital RMB'000	Share premium RMB'000	Capital reserve RMB'000	Statutory reserve fund RMB'000	Discretionary common reserve fund RMB'000	Asset revaluation reserve RMB'000	Accumulated losses RMB'000	Total RMB'000	Non- controlling interests RMB'000	Total equity RMB'000
   18,743	10,910	43,655	6,661	1,500	11,299	(7,375)	85,393	(1,019)	84,374
   -	-	-	-	-	-	(727)	(727)	(33)	(760)
   18,743	10,910	43,655	6,661	1,500	11,299	(8,102)	84,666	(1,052)	83,614
   18,743	10,910	43,655	6,443	1,500	11,299	(7,474)	85,076	(378)	84,698
   -	-	-	-	-	-	(765)	(765)	(224)	(989)
   18,743	10,910	43,655	6,443	1,500	11,299	(8,239)	84,311	(602)	83,709

   As at 1 January 2017

   Loss for the period and total comprehensive loss for the period

   As at 31 March 2017

   As at 1 January 2016:

   Loss for the period and total comprehensive loss for the period

   As at 31 March 2016

8. RELATED PARTY TRANSACTIONS

The Group had the following material transactions with related parties, which also constitute continuing connected transactions under the GEM Listing Rules, during the period:

Unaudited
Three months ended 31 March
2017	2016
RMB'000	RMB'000
Sales of goods
中聯城消防科技集團有限公司 (literally translated as "Zhong Lian Cheng Fire-Fighting Technology Group Company Limited", "ZLCFT")	560	-
上海石化消防工程有限公司 (literally translated as "Shanghai Petro-Chemical Fire-fighting Engineering Company Limited", "SPFE")	6	85
上海聯滬消防器材有限公司 (literally translated as "Shanghai Lianhu Fire-fighting Equipment Company Limited", "SLFE")	5	104
571	189

Unaudited
Three months ended 31 March
2017	2016
RMB'000	RMB'000
Inspection services income
SPFE	75	-

In the opinion of the board of directors, the above transactions were carried out in the normal course of business of the Group and at prices and terms comparable with those charged by and contracted with third parties.

BUSINESS AND FINANCIAL REVIEW Turnover

For the three months ended 31 March 2017, the Group recorded a turnover of approximately RMB16,396,000 (three months ended 31 March 2016: RMB20,378,000), representing a decrease of approximately 20% over the corresponding period of last year mainly due to a decrease in trading of sanitary-ware and other products.

Gross profit

For the three months ended 31 March 2017, the Group recorded overall gross profit of approximately RMB3,884,000 (three months ended 31 March 2016: RMB3,739,000). The gross profit ratio increase from approximately 18% for the three months ended 31 March 2016 to 23% for the three months ended 31 March 2017 mainly because of a decrease in trading of sanitary-ware and other products which had a lower gross profit ratio.

Other income and gains

Other income and gains for the three months ended 31 March 2017 increased by approximately RMB189,000 from RMB459,000 for the three months ended 31 March 2016 to approximately RMB648,000. This is mainly due to the increase in the sale of scraps.

Selling and distribution expenses

For the three months ended 31 March 2017, the Group's selling and distribution expenses increased to approximately RMB965,000 from RMB771,000, representing an increase of 25% over the corresponding period of last year. This is mainly because of the increase in distribution expenses in selling of pressure vessels.

Administrative expenses

For the three months ended 31 March 2017, the Group's administrative expenses were basically flat at approximately RMB4,203,000 (three months ended 31 March 2016: RMB4,200,000).

Finance costs

For the three months ended 31 March 2017, the Group's finance costs were RMB5,000 (three months ended 31 March 2016: RMB8,000).

Loss for the period

For the three months ended 31 March 2017, the Group recorded a loss for the period of approximately RMB760,000 (three months ended 31 March 2016: loss RMB989,000). The decrease in loss was primarily attributable to a decrease in the lower profit margin business.

Income tax

Pursuant to the relevant PRC tax regulations, the normal Corporate Income Tax ("CIT") rate is 25%.

The CIT is calculated on the estimated assessable profits at 25% for the three months ended 31 March 2017 (three months ended 31 March 2016: 25%).

The effective tax rate of the Group is (19)% for the three months ended 31 March 2017 (three months ended 31 March 2016: (27)%). It is due to a net loss in a subsidiary offset net profits arising from other subsidiaries of the Group.

Non-controlling interests

For the three months ended 31 March 2017, loss for the period attributable to non-controlling interests is approximately RMB33,000 (three months ended 31 March 2016: loss RMB224,000).

PROSPECT

The Company's fire extinguisher products cover three categories, carbon dioxide, water- based, and dry powder. The wide product range offered by the Company can meet the diversified needs of the customers. In addition, the Company's fire extinguishers for non- marine use are granted the Certificate for Product Type Approval by the CCCF and its fire extinguishers for marine use are granted the Certificates of Type Approval by the China Classification Society, Shanghai Branch ("CCS"). The Company's pressure cylinders have obtained the manufacture licence in the PRC and they meet the quality standards or requirements of the USA and the European Union.

The Company's wholly owned subsidiary 上海安航海上消防設備有限公司 (Shanghai An Hang Marine Fire-Fighting Equipment Co., Ltd.*) ("Shanghai An Hang") is one of the few marine fire-fighting equipment installation companies that are licensed and approved with certificates to operate in Shanghai, the PRC. It is a legal requirement in Shanghai, the PRC, that installation of marine fire-fighting equipment and system must be approved by 中國船級 社 (China Certification Society*) and 中國漁業船舶檢驗局 (Register of Fishing Vessel of the PRC*). In addition, all marine fire-fighting equipment and system that had been installed are required to undergo annual inspection by an approved company with proper certification. Shanghai An Hang extends the Company's business from manufacturing of fire-fighting equipment products, fire-fighting testing and trading into other fire-fighting related business. The Company also shares the customer base of Shanghai An Hang aiming at selling more fire- fighting products.

Measures have been and will be implemented continuously to improve the operation efficiency and to control production costs. Production will be more focused on higher-margin products and production of lower-margin products will be reduced to raise the overall profit margin of the Company. With the economic uncertainties continue to grow in China in 2017, the Company will continue to improve the profitability of the Group by increasing the operation efficiency and reducing the overhead expenses.

LONG TERM STRATEGY

We believe that the Company, with our experienced management team, firm and clear development directions, the manufacturing of quality products and the provision of quality services, will be able to sharpen the competitive edge. After a successful acquisition of the installation and inspection of marine fire-fighting equipment business in 2016 which increase the profitability of the Group, the Company will continue to develop new market of higher- margin products/businesses and also prudently consider acquiring relevant enterprises which possess sound profitability by way of capital increment in accordance with the relevant laws and regulations in order to accelerate the growth of our profitability so that the Company will become a major enterprise in the manufacturing, sale of fire-fighting equipment and relevant business service provider in the PRC and overseas.

DIRECTORS' AND SUPERVISORS' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 31 March 2017, the interests and short positions of the Directors and supervisors of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the "SFO")) as recorded in the register required to be kept under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the minimum standards of dealing by directors as referred to in Rule 5.46 of the Rules Governing the Listing of Securities on the GEM (the "GEM Listing Rules"), were as follows:

Long positions in shares of the Company

Name	Capacity	Number of shares	Approximate percentage of total issued share capital
Mr. Zhou Jin Hui (Note 1)	Held by controlled corporation	133,170,000	71.05%

Note:

1. Liancheng Fire-Fighting Group Company Limited ("Liancheng") hold 131,870,000 domestic shares of the Company. Liancheng Fire Protection Group (Hong Kong) Company Limited, a 100% subsidiary of Liancheng Fire-Fighting Group Company Limited, holds 1,300,000 H shares of the Company. Zhejiang Hengtai Real Estate Joint Stock Co., Ltd. ("Hengtai") owns 80% of Liancheng Fire-Fighting Group Company Limited and Mr. Zhou Jin Hui owns 58% of Zhejiang Hengtai Real Estate Joint Stock Co., Ltd. Accordingly, Zhejiang Hengtai Real Estate Joint Stock Co., Ltd. and Mr. Zhou Jin Hui were deemed to be interested in 131,870,000 domestic shares and 1,300,000 H shares in the Company.

Liancheng is owned as to 80% by Hengtai and 20% by Mr. Zhou Jin Hui.

Save as disclosed above, as at 31 March 2017, none of the Directors and supervisors of the Company has any interests and short positions in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the minimum standards of dealing by directors as referred to in Rule 5.46 of the GEM Listing Rules.

SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 31 March 2017, the following persons (other than the Director and supervisors of the Company) have interests and short positions in the shares and underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO:

Long positions in shares of the Company Name Capacity Number of shares Approximate percentage of Share capital total registered

Liancheng Fire-Fighting Group Company Limited (Note 3)

Beneficial owner 131,870,000

(Note 1) 70.36%

Held by controlled corporation 1,300,000

(Note 2) 0.69%

Zhejiang Hengtai Real Estate Joint Stock Co., Ltd.

Held by controlled corporation 131,870,000

(Note 1) 70.36%

Held by controlled corporation 1,300,000

(Note 2) 0.69%

Mr. Zhou Jin Hui Held by controlled corporation 131,870,000

(Note 1) 70.36%

Held by controlled corporation 1,300,000

(Note 2) 0.69%

Notes:

1. All represent domestic shares of the Company.

2. Liancheng Fire-Fighting Group Company Limited ("Liancheng") hold 131,870,000 domestic shares of the Company. Liancheng Fire Protection Group (Hong Kong) Company Limited, a 100% subsidiary of Liancheng Fire-Fighting Group Company Limited, holds 1,300,000 H shares of the Company. Zhejiang Hengtai Real Estate Joint Stock Co., Ltd. ("Hengtai") owns 80% of Liancheng Fire-Fighting Group Company Limited and Mr. Zhou Jin Hui owns 58% of Zhejiang Hengtai Real Estate Joint Stock Co., Ltd. Accordingly, Zhejiang Hengtai Real Estate Joint Stock Co., Ltd. and Mr. Zhou Jin Hui were deemed to be interested in 131,870,000 domestic shares and 1,300,000 H shares in the Company.

   Liancheng is owned as to 80% by Hengtai and 20% by Mr. Zhou Jin Hui.

3. The board of directors of the Company has been notified that, an aggregate of 131,870,000 domestic shares of the Company (the "Pledged Shares") held by Liancheng Fire-Fighting Group Company Limited ("Liancheng"), the Company's controlling shareholder (as defined in the Rules Governing the Listing of Securities on The Growth Enterprise Market of The Stock Exchange of Hong Kong Limited), have been pledged on 20 January 2016 in favour of an independent third party (the "Lender") as a security for a loan amount of RMB199,000,000 provided by the Lender to Liancheng (the "2016 Loan"). The 2016 Loan was repaid and the Pledged Shares were released on 12 January 2017. On the same date, Liancheng have pledged the Pledged Shares in favour of the Lender as a security for a loan amount of RMB198,000,000 (the

"2017 Loan") provided by the Lender to Liancheng. The Pledged Shares will be released if Liancheng makes a partial repayment amounting to RMB63,000,000 to the Lender. Relevant shares pledge registration procedures have been completed with China Securities Depository and Clearing Corporation Limited. As of 12 January 2017 and the date of this announcement, the Pledged Shares represent approximately 70.36% and 100% of the issued share capital and domestic shares of the Company, respectively.

Save as disclosed above, the Company has not been notified of any other relevant interests representing 5 percent or more in the issued shares capital of the Company as at 31 March 2017.

DIRECTORS' AND SUPERVISORS' INTERESTS IN CONTRACTS

To the best knowledge of the Board, save as disclosed in note 8 of this announcement, no contracts of significance in relation to the Company's business to which the Company was a party and in which any persons who were Directors and supervisors of the Company during the three months ended 31 March 2017 had a material interest, whether directly or indirectly, subsisted at 31 March 2017 or at any time during the three months ended 31 March 2017.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

During the three months ended 31 March 2017, the Company did not purchase, sell or redeem any of the Company's listed securities.

CORPORATE GOVERNANCE

The Company wish to state that it has complied with all code provisions set out in the Code on Corporate Governance Practices contained in the Appendix 15 of the GEM Listing Rules (the "Code") during the period.

1. Corporate Governance Practices

   The Company is committed to promoting good corporate governance, with the objectives of (i) the maintenance of responsible decision making, (ii) the improvement in transparency and disclosure of information to shareholders, (iii) the continuance of respect for the rights of shareholders and the recognition of the legitimate interests of the shareholders, and (iv) the improvement in management of risk and the enhancement of performance by the Company. The Company has applied Appendix 15 of the GEM Listing Rules with these objectives in mind.

2. Directors' Securities Transactions

The Company has adopted a code of conduct regarding directors' securities transactions on terms no less exacting than the required standard of dealings as set out in Rules 5.48 to

5.67 of the GEM Listing Rules. Having made specific enquiry of the Directors of the Company, all Directors have complied with the required standard of dealings and code of conduct regarding securities transactions by directors.

AUDIT COMMITTEE

The Company has an audit committee (the "Audit Committee") established with written terms of reference in compliance with GEM Listing Rules. The primary duties of the Audit Committee are to review and supervise the financial reporting process and internal controls of the Group and to provide advice to the Directors of the Company.

The Audit Committee comprises three independent non-executive Directors, namely Mr. Yang Chun Bao, Mr. Wang Guo Zhong and Mr. Song Zi Zhang.

The Audit Committee has reviewed the Group's unaudited results for the three months ended 31 March 2017 and has provided advice and comments thereon.

By order of the Board

Shanghai Qingpu Fire-Fighting Equipment Co., Ltd. Zhou Jin Hui

Chairperson

Shanghai, 10 May 2017

As at the date of this announcement, the executive Directors are Mr. Zhou Jin Hui, Mr. Shi Hui Xing and Mr. Zhou Guo Ping; and the independent non-executive Directors are Mr. Wang Guo Zhong, Mr. Yang Chun Bao and Mr. Song Zi Zhang.

This announcement, for which the Directors collectively and individually accept full responsibilities, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will be published on the GEM website on the "Latest Company Announcement" page for at least 7 days from the date of publication.