Skyworth : OVERSEAS REGULATORY ANNOUNCEMENT - FINANCIAL INFORMATION REGARDING A SUBSIDIARY OF THE COMPANY

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.

This announcement is for information purposes only and does not constitute an invitation or a solicitation of an offer to acquire, purchase or subscribe for any securities of the Company.

SKYWORTH GROUP LIMITED

創 維 集 團 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 00751)

OVERSEAS REGULATORY ANNOUNCEMENT

FINANCIAL INFORMATION REGARDING

A SUBSIDIARY OF THE COMPANY

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 Group Co., Ltd.* (創維集團有限公司) (the "Subsidiary"), a wholly-owned subsidiary of the Company established under the laws of the People's Republic of China, has disclosed its an unaudited consolidated financial statements for the six months ended 30 June 2020, which is reproduced in the appendix to this announcement.

The Subsidiary's financial information disclosed in this announcement is not an inducement to subscribe for or purchase any securities of the Company or other members of the Group, and no such inducement is intended. No investment decision should be based on such information.

The profit figures set out in this announcement (the "Profit Figures") constitute a profit forecast under Rule 10 of The Code on Takeovers and Mergers (the "Takeovers Code") issued by the Securities and Futures Commission of Hong Kong and is required to be reported on by the Company's financial adviser and auditors or accountants in accordance with Rule 10.4 of the Takeovers Code. In view of the requirements of timely disclosures of the inside information under Rules 13.09(2) and 13.10B of the Listing Rules and the Inside Information Provisions, the Company is required to issue this announcement as soon as practicable and given the time constraints, the Company has encountered genuine practical difficulties (timewise or otherwise) in meeting the reporting requirements set out in Rule 10.4 of the Takeovers Code. Shareholders and potential investors of the Company should note that the Profit Figures have not been reported on and do not meet the standard required by Rule 10 of the Takeovers Code. Shareholders and potential investors of the Company should also note that after the publication of the interim results of the Company for the six months ended 30 June 2020 which is expected to take place on the same date as this announcement, which fall within the ambit of Rule 10.9 of the Takeovers Code, the requirements to report on the Profit Figures under Rule 10.4 of the Takeovers Code would no longer be applicable. Shareholders and potential investors of the Company should therefore exercise caution in placing reliance on the Profit Figures and are advised to exercise caution when dealing in the shares of the

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Company and assessing the merits and demerits of the Offer (as defined in the offer document of the Company dated 27 July 2020).

By order of the Board

Skyworth Group Limited

Lai Weide

Chairman of the Board

Hong Kong, 31 August 2020

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, Mr. Lin Jin and Mr. Lam Shing Choi, Eric as executive directors; and Mr. Li Weibin, Mr. Cheong Ying Chew, Henry and Mr. Hung Ka Hai, Clement as independent non-executive directors.

The directors of the Company jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.

* For identification purpose only

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Appendix - the Subsidiary's financial information for six months ended 30 June 2020

Consolidated Balance Sheet

Prepared by: 創維集團有限公司		As at 30 June 2020		Unit: RMB
	Assets	Closing balance	Opening Balance	Liabilities and shareholders' equity	Closing balance	Opening Balance
Current Assets:			Current Liabilities:
Bank balances and cash	4,074,001,580.27	3,009,251,076.55	Short-term loan	4,783,802,226.17	5,753,929,685.18
Balances with central bank	318,776,703.57	402,284,434.87	Borrowing from central bank	592,963,573.58	1,117,488,046.02
Placements with banks and other financial	1,791,894,204.03	1,879,937,677.07	Deposits from customers and interbank	376,511,572.93	995,721,110.91
institutions
Financial assets held for trading	625,976,403.56	50,477,886.76	Interbank lending	-	-
Derivative financial assets	10,970,830.05	334,118.03	Derivative financial liabilities	9,473,725.37	4,101,859.71
Bills	receivables	2,370,223,797.18	4,192,853,185.09	Financial liabilities held for trading	-	-
Trade	receivables	9,690,738,516.45	10,276,147,668.55	Bills payables	1,979,571,155.85	2,684,862,232.44
Prepayments	529,473,345.00	626,765,907.04	Trade payables	6,076,839,669.00	6,237,751,329.26
Other	receivables	1,686,761,090.92	1,321,334,064.40	Receipts in advance	85,982,069.40	14,282,463.45
Redemptory monetary capital for sale	-	-	Contract liabilities	1,166,529,569.48	1,632,556,147.98
Inventories	8,893,132,448.25	8,739,602,964.78	Wages and salaries payables	563,365,484.65	639,503,380.47
Contract assets	-	-	Taxes and surcharges payables	236,346,489.96	256,429,830.44
Held-for-sale assets	274,734,092.71	-	Other payables	3,378,417,385.13	3,543,772,862.61
Non-current assets maturing within one year	870,147,281.30	1,336,126,469.72	Held-for-sale liabilities	64,039,912.74	-
Other	current assets	2,499,274,165.64	1,442,201,502.34	Non-current liabilities maturing within	2,183,126,049.79	2,331,831,953.63
				one year
Total Current Assets	33,636,104,458.93	33,277,316,955.20	Other current liabilities	1,572,114,365.70	1,087,900,130.11
Non-current Assets：			Total Current Liabilities	23,069,083,249.75	26,300,131,032.21
Loan receivables	6,897,240.00	9,635,744.00	Non-current Liabilities：
Finance lease receivables	2,274,603.41	3,284,551.24	Long-term borrowings	1,837,327,367.39	764,581,323.75
Factoring loan receivable	-	-	Bonds payables	1,687,502,097.81	924,035,778.76
Debt investments	836,053,181.44	575,289,803.61	Lease liabilities	1,132,515,087.92	1,151,480,554.35
Other debt investment	-	-	Long-term payables	241,603,444.45	235,603,444.45
Long-term receivables	146,472.70	152,630.26	Provisions liabilities	82,305,031.12	79,072,942.23
Long-term equity investments	218,929,226.69	217,029,799.14	Deferred income	431,748,913.75	532,985,287.55
Other equity instrument investments	980,570,465.40	1,573,901,797.23	Deferred tax liabilities	148,547,773.93	212,054,231.28
Other non-current financial assets	926,602,120.21	993,022,436.27	Other non-current liabilities	1,329,864,654.25	246,547,323.45
Investment properties	1,457,540,825.57	2,028,863.01	Total Non-current Liabilities	6,891,414,370.62	4,146,360,885.82
Fixed assets	2,974,643,533.32	4,808,815,086.37	Total Liabilities	29,960,497,620.38	30,446,491,918.03
Construction-in-progress	810,675,805.64	877,259,514.56	Owners' Equity：
Right-of-use assets	1,173,604,319.93	1,216,162,158.47	Paid-up capital (Share capital)	1,516,366,055.31	1,516,366,055.31
Intangible assets	2,244,582,726.73	2,454,350,678.58	Other equity instruments	-	-
Development costs	3,769,575.73	-	Capital reserve	2,447,646,523.63	2,475,240,356.77
Goodwill	398,635,942.72	398,635,942.72	Less: Treasury stock	-	-
Long-term deferred expenses	136,115,044.85	151,230,013.98	Other comprehensive income	-16,338,218.79	339,570,398.86
Deferred tax assets	521,813,369.60	485,485,893.85	Surplus reserve	222,585,239.19	222,585,239.21
Other non-current assets	432,929,664.08	291,700,853.59	Provision for general risk	115,369,267.25	115,369,267.25
Total Non-current Assets	13,125,784,118.02	14,057,985,766.88	Retained earnings/Undistributed profit	6,009,387,944.53	5,919,740,933.01
				Total equity attributable to the owners of	10,295,016,811.12	10,588,872,250.41
				the company
				Non-controlling shareholders' equity	6,506,374,145.45	6,299,938,553.64
				Total Owners' Equity	16,801,390,956.57	16,888,810,804.05
Total Assets	46,761,888,576.95	47,335,302,722.08	Total Liabilities and Owners' Equity	46,761,888,576.95	47,335,302,722.08

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Consolidated income statement

Prepared by: 創維集團有限公司	For the 6 months ended 30 June 2020	Unit: RMB
	Item		Current period	Same period of last year
1. Revenue		14,763,581,170.07	15,939,634,830.07
Less:	Cost of sales		12,074,383,294.24	12,871,126,467.16
	Taxes and surcharges		74,731,834.94	86,357,274.80
	Selling expenses		1,181,399,443.42	1,490,272,469.01
	General and administrative expenses	447,180,336.35	359,201,562.32
	Research and development costs		777,152,012.94	870,407,529.93
	Finance costs		242,638,580.28	174,085,460.44
	Including: Interest income		62,760,791.96	39,846,788.17
	Interest expenses		291,619,423.51	227,161,255.58
Add:	Other income		301,680,985.83	262,060,756.16
	Investment income		207,032,806.51	83,178,329.51
	Including: Share of profits of associates and joint	(2,853,354.68)	7,964,409.31
	ventures
	Income from derecognition of financial	135,726,919.21	395,325.00
	assets at amortised cost
	Gain (loss) on fair values changes	202,784,540.38	72,904,504.75
	Gain (loss) on impairment of assets	(20,318,331.78)	(79,039,903.84)
	Gain (loss) on credit impairment		(25,934,935.68)	35,825,887.57
	Gain (loss) on disposal of assets		3,095,431.03	(2,951,598.77)
2. Operating Profit		634,436,164.19	460,162,041.78
Add:	Non-operating income		13,761,602.30	43,933,687.60
Less:	Non-operating expenses		11,873,277.76	23,607,501.25
3. Profit before tax		636,324,488.74	480,488,228.13
Less:	Income tax expenses		132,286,520.17	129,481,439.38
4. Profit for the period		504,037,968.57	351,006,788.75
	Profit attributable to equity owners of the company	230,021,137.52	132,382,773.61
	Profit (loss) attributable to non-controlling interests	274,016,831.05	218,624,015.14

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Consolidated statement of cash flows

Prepared by: 創維集團有限公司	For the 6 months ended 30 June 2020	Unit: RMB
Cash flow items	Current period	Same period of last year
1. Cash flows from operating activities
Proceeds from sales of commodities and rendering of services	19,193,080,471.72	21,930,036,943.32
Net increase in loans and advances to customers	474,884,262.10	688,098,419.65
Net increase in customer deposits and interbank deposits	32,351,611.84	13,456,453.86
Net increase in loan from other financial institutions	-	-
Interests, service charges and commission received	37,678,980.29	56,104,148.40
Taxes and surcharges refunded		478,865,628.12	437,183,597.57
Cash received from other operating activities	2,707,220,106.77	1,139,583,888.01
Subtotal of cash generated from operating activities	22,924,081,060.84	24,264,463,450.82
Payments for commodities and services	14,051,883,172.04	19,382,611,785.25
Net increase in customer deposits received and interbank deposits	618,937,542.74	35,536,055.91
Net increase in borrowings from central bank	526,973,285.81	(329,915,479.00)
Interests, service charges and commission paid	4,086,345.50	35,464,930.12
Cash paid to and for employees		1,646,139,664.40	1,761,086,335.69
Taxes and surcharges paid		665,046,260.91	778,964,425.39
Cash used in other operating activities		3,772,905,639.76	2,346,346,878.77
Subtotal of cash used in operating activities	21,285,971,911.14	24,010,094,932.13
Net cash flows from operating activities	1,638,109,149.69	254,368,518.69
2. Cash flows from investing activities
Proceeds from realisation of investment	1,058,375,083.07	2,701,921,796.77
Proceeds from returns on investments		96,267,471.34	45,842,832.65
Net proceeds from disposal of fixed assets, intangible assets and other	3,098,106.45	2,753,548.04
long-term assets
Net proceeds from disposal of subsidiaries and other operating units	200,565,124.44	-
Cash received from other investing activities	6,295,074.15	69,298,323.95
Subtotal of cash generated from investing activities	1,364,600,859.45	2,819,816,501.42
Payments for acquisition of fixed assets, intangible assets and other	505,927,749.92	549,756,624.01
long-term assets
Payments for investments		2,260,315,054.84	2,209,534,413.64
Net increase in pledged loan		-	-
Payments for acquisition of subsidiaries and other operating units	-	-
Cash used in other investing activities		7,948,795.32	28,834,738.09
Subtotal of cash used in investing activities	2,774,191,600.08	2,788,125,775.74
Net cash flows from investing activities	(1,409,590,740.63)	31,690,725.68
3. Cash flows from financing activities
Cash received from capital contribution	30,080,000.00	70,292,900.00
Cash received from borrowings		8,424,166,385.41	5,655,276,697.17
Cash received from other financing activities	862,459,543.77	545,157,674.24
Subtotal of cash generated from financing activities	9,316,705,929.18	6,270,727,271.41
Repayment of borrowings		7,342,069,526.46	5,136,392,339.46
Distribution of dividends or profits and payments for interest expenses	228,270,244.47	128,711,149.78
Cash used in other financing activities		876,674,834.66	332,183,003.95
Subtotal of cash used in financing activities	8,447,014,605.59	5,597,286,493.19
Net cash flows from financing activities	869,691,323.59	673,440,778.22
4. Effect of foreign exchange rate changes	17,672,851.73	(3,811,512.59)
5. Net increase in cash and cash equivalents	1,115,882,584.39	955,688,510.01
Add: Cash and cash equivalents at beginning of the period	4,068,030,758.83	3,177,164,784.84
6. Cash and cash equivalents at end of the period	5,183,913,343.22	4,132,853,294.84

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