At the end of the reporting period

At the end of the previous year

Change (%) from the end of the previous year to the end of the reporting period

Total assets

3,503,587,770.15

2,719,026,348.13

28.85

Net assets attributable to shareholders of the listed company

1,913,594,589.09

1,090,588,513.77

75.46

From the beginning of the year to the end of the reporting period

(January–September)

From the beginning of the previous year to the end of the reporting period of the previous year

(January–September)

Change (%) Compared with the Same Period of the Previous Year

Net cash flow from operating activities

264,351,217.05

223,193,636.99

18.44

From the beginning of the year to the end of the reporting period

(January–September)

From the beginning of the previous year to the end of the reporting period of the previous year

(January–September)

Increase or decrease compared with the same period of the previous year

(%)

Operating revenue

1,211,454,352.52

812,035,807.60

49.19

Net profit attributable to shareholders of the listed company

217,305,445.78

119,429,063.15

81.95

Net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses

193,485,840.77

98,922,294.95

95.59

Weighted Average Return on Equity (%)

13.65

13.55

Increase by 0.1 percentage points

Basic earnings per share (RMB/share)

1.09

0.69

57.97

Diluted earnings per share (RMB/share)

1.09

0.69

57.97

Project

Amount for this period

(7–9 months)

Amount from the beginning of the year to the end of the reporting period (January–September)

Explanation

Gains or losses on disposal of non-current assets

51,429.12

51,429.12

Approval beyond authorized powers, or approval without formal documentation, or ad hoc tax refunds or reductions

Government grants recognized in the current period’s profit or loss, except those that are closely related to the company’s ordinary operating activities and are granted in accordance with national policies on a fixed rate or quantity basis for continuous periods.

5,557,868.56

28,493,557.06

Fees for the use of funds charged to non-financial enterprises, recognized in current profit or loss

When the cost of an investment in a subsidiary, associate, or joint venture is less than the acquirer’s share of the acquiree’s identifiable net assets at fair value at the acquisition date, the difference gives rise to income.

Gain or Loss on Exchange of Non-monetary Assets

Gains or losses from entrusting others to invest or manage assets

Allowances for impairment of various assets recognized due to force majeure events, such as natural disasters.

Gain or loss on debt restructuring

Enterprise restructuring expenses, such as employee severance costs and integration expenses, etc.

Gains or losses arising from transactions whose transaction prices are manifestly unfair, to the extent that they exceed fair value

Net income or loss of a subsidiary from the beginning of the period to the acquisition date arising from a business combination under common control

Gains or losses arising from contingent events that are unrelated to the company’s ordinary operating activities

Except for effective hedging activities related to the company’s normal operating business, gains or losses arising from changes in fair value of trading financial assets, derivative financial assets, trading financial liabilities, and derivative financial liabilities, as well as investment income from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities, and other debt investments.

Reversal of impairment allowances for receivables and contract assets that are subject to separate impairment testing

Gains and losses from entrusted loans to external parties

Gains or losses arising from changes in the fair value of investment property measured subsequently using the fair value model

The impact on current profit or loss of a one-time adjustment to current profit or loss required by tax, accounting, and other laws and regulations.

Trustee operating income from management fees

Other non-operating income and expenses, excluding the items listed above

-8,040.90

-419,471.93

Other income and expenses that meet the definition of non-recurring gains or losses

Impact of non-controlling interests (after tax)

-9,155.44

-19,290.25

Income tax effect amount

-860,762.79

-4,286,618.99

Total

4,731,338.55

23,819,605.01

Total Number of Shareholders (Accounts)

20,492

Top Ten Shareholders’ Shareholdings

Shareholder Name

(Full name)

Number of shares held at period end

Proportion (%)

Number of Shares Subject to Sale Restrictions

Pledge or Freeze Status

Nature of Shareholder

Share Status

Quantity

Li Zuoyuan

92,722,828

40.05

91,451,745

None

0

Domestic natural person

Xu Nengchen

25,969,680

11.22

25,969,680

None

0

Domestic natural person

Li Xianfeng

12,984,840

5.61

12,984,840

None

0

Domestic natural person

Li Congrong

12,984,840

5.61

12,984,840

None

0

Domestic natural person

Xiangyang Innovation Capital Venture Investment Co., Ltd.

7,716,960

3.33

7,716,960

None

0

Non-state-owned legal person within the territory

Shenzhen Innovation Investment Group Co., Ltd.

4,630,320

2.00

4,630,320

None

0

Non-state-owned legal person within the territory

Beijing Rongding Deyuan Equity Investment Fund Partnership (Limited Partnership)

3,500,000

1.51

3,500,000

None

0

Non-state-owned legal person within the territory

Li Kewu

2,893,860

1.25

2,893,860

None

0

Domestic natural person

Chi Yuan

1,736,415

0.75

1,736,415

None

0

Domestic natural person

Zheng Gang

1,650,000

0.71

1,640,000

None

0

Domestic natural person

Shareholding Information of the Top Ten Shareholders with No Sale Restrictions

Shareholder Name

Number of shares with unrestricted tradability

Types and Number of Shares

Type

Quantity

Li Zuoyuan

1,271,083

Renminbi ordinary shares

1,271,083

Wu Chang

834,300

Renminbi ordinary shares

834,300

UBS AG

639,594

Renminbi ordinary shares

639,594

Shi Shengxing

479,835

Renminbi ordinary shares

479,835

Chen Xiaotan

428,100

Renminbi ordinary shares

428,100

Niu Airong

347,700

Renminbi ordinary shares

347,700

Zheng Shizheng

328,200

Renminbi ordinary shares

328,200

Xu Wen

305,200

Renminbi ordinary shares

305,200

Li Baojin

296,500

Renminbi ordinary shares

296,500

Jiangsu Private Investment Holdings Co., Ltd.

262,100

Renminbi ordinary shares

262,100

Explanation of the Affiliative Relationship or Concerted Action Among the Shareholders Listed Above

Shareholder Li Zuoyuan and Xu Nengchen are married; shareholder Li Zuoyuan and Li Congrong are father and daughter; and shareholder Li Zuoyuan and Li Xianfeng are father and son. Shareholders Li Zuoyuan, Xu Nengchen, Li Congrong, and Li Xianfeng have entered into a concerted action agreement and are thus considered concerted actors. Shenzhen Innovation Investment Group Co., Ltd. holds a 26.67% equity interest in Xiangyang Innovation Capital Venture Investment Co., Ltd., making it the second-largest shareholder of Xiangyang Innovation Capital Venture Investment Co., Ltd. It is unknown whether any other shareholders are affiliated with one another or act as concerted actors.

Explanation of Preferred Shareholders Whose Voting Rights Have Been Restored and the Number of Shares Held

None

Subject

This Issue

Same period last year

Percentage Change (%)

Statement of the Situation

Operating revenue

1,211,454,352.52

812,035,807.60

49.19

Sales increased for the company’s existing customers, including Foton Cummins, Dongfeng Cummins, and Dongfeng Commercial Vehicle, while new customers such as Xi’an Cummins, SIFANG-FIAT, and Guangxi Yuchai have begun receiving bulk shipments.

Cost of sales

816,450,316.15

579,354,547.37

40.92

Related to the increase in operating revenue

Selling expenses

24,513,242.17

13,578,058.83

80.54

Sales revenue increased, particularly due to higher sales to out-of-town customers, leading to a rise in transportation costs; quality claim provisions based on sales revenue increased accordingly; and marketing development expenses also rose.

Administrative expenses

53,085,211.60

28,727,855.62

84.79

Production was halted during the pandemic, and depreciation on equipment was charged to administrative expenses; intermediary service fees incurred in connection with the IPO exceeded those of the same period.

Financial expenses

3,397,035.66

14,674,981.76

-76.85

Bank loan volumes declined, leading to a year-on-year decrease in interest expense; proceeds from the IPO were received, resulting in a year-on-year increase in interest income.

Research and development expenses

62,772,730.40

43,547,950.68

44.15

New project development and increased R&D investment in China VI standards

Investment income

3,487,257.98

-1,548,702.16

 -

The joint venture turned a profit, and investment income increased.

Impairment loss on credit

-7,023,006.17

1,868,925.22

-475.78

An increase in sales revenue led to a rise in accounts receivable, resulting in higher bad debt expense calculated as a percentage of the accounts receivable balance.

Non-operating income

10,372,341.49

4,975,328.51

108.48

Received government listing incentive

Cash and cash equivalents

658,370,136.59

323,321,899.65

103.63

proceeds from the initial public offering increased bank deposits, and with sales rising, cash inflows exceeded those of the same period.

Accounts receivable

505,454,151.25

272,323,848.90

85.61

Operating revenue increased, and the balance of accounts receivable rose.

Receivables Financing

248,043,631.12

175,474,674.70

41.36

Operating revenue increased, and the balance of notes receivable rose.

Prepayments

28,402,820.71

19,568,107.44

45.15

The prepaid material purchase amount exceeds that of the same period.

Fixed assets

1,155,300,842.58

857,638,320.38

34.71

There are many new projects, and the construction of new production lines is boosting capacity, resulting in equipment investment that exceeds the level of the same period last year.

Construction in progress

262,927,314.85

442,177,478.53

-40.54

As projects are commissioned one after another, a significant amount of construction-in-progress—such as equipment and factory buildings—is being capitalized.

Deferred income tax asset

29,024,237.74

21,984,114.87

32.02

Increase in deductible temporary differences

Short-term loans

                 -  

90,000,000.00

-

Repay short-term loans

Accounts Payable

402,869,107.70

236,036,522.48

70.68

Sales volume increased, and higher purchases resulted in

Advances received

555,198.31

-

Accounting standard changes: the “Advances from customers” line item has been reclassified and presented as “Contract liabilities.”

Contract Liabilities

3,862,122.40

 -

Accounting standard changes: the “Advances from customers” line item has been reclassified and presented as “Contract liabilities.”

Employee Compensation Payable

27,511,043.70

19,741,421.20

39.36

Output increased, and employee compensation was higher than in the same period.

Taxes Payable

28,167,963.00

7,682,782.81

266.64

September cash dividends resulted in a relatively large amount of withholding income tax.

Long-term payables

55,362,506.85

Upon completion of the relocation, the government relocation compensation is transferred to asset disposal gains.

Estimated Liabilities

26,489,236.67

19,252,352.04

37.59

Operating revenue increased, and the estimated liability accrued as a percentage of operating revenue was higher than in the same period.

Deferred income tax liability

152,490.49

274,584.34

-44.46

Decrease in taxable temporary differences

Share capital

231,522,000.00

173,641,500.00

33.33

Due to the initial public offering of shares

Capital Reserve

1,077,929,188.59

252,282,659.07

327.27

Share Capital Premium from Initial Public Offering

Surplus Reserve

88,083,959.24

65,964,646.01

33.53

Net profit increased, with a provision made at 10% of net profit.

Retained Earnings

516,059,441.26

449,322,517.37

14.85

Due to both retained net profit and cash dividends

Net cash flow from financing activities

423,269,523.23

-127,389,858.80

 -

proceeds from the IPO have been received, increasing cash inflows

Basic earnings per share

                1.09

               0.69

57.97

Related to profit increase

Diluted earnings per share

                1.09

               0.69

57.97

Related to profit increase

Company Name

Xiangyang Changyuan Donggu Industrial Co., Ltd.

Legal Representative

Li Zuoyuan

Date

October 31, 2020