2017 Annual Report Wuhu Shunrong Sanqi Interactive Entertainment Network
Technology Co., Ltd.
2017 Annual Report
April 2018
2017 Annual Report Section I Table of Contents and Definitions
2017 Annual Report Contents
Section I Table of Contents and Definitions ............................................................................................................................................2 Section II Company Profile and Main Financial Indicators .....................................................................................................................7 Section III Summary of theCompany’s Business ................................................................................................................................. 14 Section IV Discussion and Analysis of Operations ................................................................................................................................ 20 Section V Financial Reports .................................................................................................................................................................. 76
2017 Annual Report Definitions
|||
|-|-|
|Term|Definition|
|CSRC|China Securities Regulatory Commission|
|SZSE|Shenzhen Stock Exchange|
|Company/the Company/Listed Company/Sanqi|Wuhu Shunrong Auto Parts Co., Ltd./Wuhu Shunrong Sanqi Interactive|
|Interactive Entertainment|Entertainment Network Technology Co., Ltd.|
|Shanghai Sanqi Interactive Entertainment|Sanqi Interactive Entertainment (Shanghai) Technology Co., Ltd.|
|Company Law|The Company Law of the People’s Republic of China|
|Securities Law|The Securities Law of the People’s Republic of China|
||Articles of Association of Wuhu Shunrong Auto Parts Co., Ltd. / Articles|
|Articles of Association|of Association of Wuhu Shunrong Sanqi Interactive Entertainment|
||Network Technology Co., Ltd.|
|Auditor|GP Certified Public Accountants (Special General Partnership)|
|Legal counsel|Beijing Tian Yuan Law Firm|
|Sponsor (lead underwriter)|GF Securities Co., Ltd.|
|GF Securities|GF Securities Co., Ltd.|
|Yuan or 10,000 Yuan|RMB yuan or RMB 10,000 yuan|
|Reporting Period/this Reporting Period|From January 1, 2017 to December 31, 2017|
|End of Reporting Period/End of this Reporting||
||December 31, 2017|
|Period||
||A game that is based on web technologies, uses standard protocols as the|
||basic transmission form, and does not require any client software or|
|Browser game||
||requires a mini client based on browser kernel. Game users can directly|
||play the game over the Internet using a web browser.|
||A game that is downloaded over mobile network and runs on a mobile|
|Mobile game||
||phone or other mobile terminals.|
|RPG|Role-playing games|
|ARPG|Action role-playing game|
|SLG|Strategy games|
|MMOARPG|Massive multiplayer on-line action role-playing game|
|Shanghai Mokun|Shanghai Mokun Digital Technology Co., Ltd.|
|Jiangsu Zhiming|Jiangsu Zhiming Network Technology Co., Ltd.|

2017 Annual Report
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|-|-|
|Shunrong Investment|Wuhu Shunrong Investment Co., Ltd.|
|Shunrong Yonghong|Shanghai Shunrong Yonghong Technology Development Co., Ltd.|
|Guangzhou Senyun|Guangzhou Senyun Auto Parts Co., Ltd.|
|Shunrong Auto Parts|Wuhu Shunrong Auto Parts Co., Ltd.|
|Yanling Investment|Shanghai Yanling Investment Management Co., Ltd.|
|Tibet Xintai|Tibet Xintai Culture & Media Co., Ltd.|
|Anhui Vogue Entertainment|Anhui Vogue Entertainment Network Technology Co., Ltd.|
|Vogue Entertainment International|Vogue Entertainment International Limited.|
|G-MEI Network|G-MEI Network Technology Co., Ltd.|
|Guangzhou Sanqi|Guangzhou Sanqi Network Technology Co., Ltd.|
|Guangzhou Xingzhong|Guangzhou Xingzhong Information Technology Co., Ltd.|
|Anhui Xuhong|Anhui Xuhong Information Technology Co., Ltd.|
|ENP Games|ENP Games Co., Ltd.|
|Anhui Sanqi|Anhui Sanqi Network Technology Co., Ltd.|
|Jiangsu Aurora|Jiangsu Aurora Network Technology Co., Ltd.|
|Shanghai Yingtong|Shanghai Yingtong Network Technology Co., Ltd.|
|Wisdom Entertainment International|Wisdom Entertainment Online International Limited.|
|Wisdom Game International|Wisdom Game Online International Limited.|
|Shanghai Guanhang|Shanghai Guanhang Network Technology Co., Ltd.|
|Anhui Jiashang|Anhui Jiashang Network Technology Co., Ltd.|
|Chengdu Shengge|Chengdu Shengge Times Network Technology Co., Ltd.|
|Beijing Shangheng|Beijing Shangheng Jiatian Network Technology Co., Ltd.|
|Jiangsu Jiaqu|Jiangsu Jiaqu Network Technology Co., Ltd.|
|Shanghai Zhiren|Shanghai Zhiren Culture & Media Co., Ltd.|
|Tibet Taifu|Tibet Taifu Culture & Media Co., Ltd.|
|37 Games Entertainment|37 Games Entertainment Limited|
|Shanghai Mobile Game|Shanghai Mobile Game Digital Technology Co., Ltd.|
|Anhui Guanyu|Anhui Guanyu Culture & Media Co., Ltd.|
|Tibet Yaotong|Tibet Yaotong Network Technology Co., Ltd.|
|Tibet Shengge|Tibet Shengge Network Technology Co., Ltd.|
|Guangzhou Jisheng|Guangzhou Jisheng Network Technology Co., Ltd.|
|Guangzhou Sanqi Interactive Entertainment|Guangzhou Sanqi Interactive Entertainment Technology Co., Ltd.|
|Guangzhou Huoshanhu|Guangzhou Huoshanhu Information Technology Co., Ltd.|

2017 Annual Report
|||
|-|-|
|Guangzhou Jishi|Guangzhou Jishi Network Technology Co., Ltd.|
|Huoerguosi Qianyu|Huoerguosi Qianyu Network Technology Co., Ltd.|
|Huoerguosi Xinghui|Huoerguosi Xinghui Network Technology Co., Ltd.|
|Huoerguos Xinrui|Huoerguosi Xinrui Network Technology Co., Ltd.|
|Top Increase|Top Increase Global Limited|
|Lihui Venture|Huoerguosi Lihui Venture Investment Co., Ltd.|
|Anhui Aurora|Anhui Sanqi Aurora Network Technology Co., Ltd.|
|Shanghai Langkun|Shanghai Langkun Digital Technology Co., Ltd.|
|Shanghai Kunkun|Shanghai Kunkun Digital Technology Co., Ltd.|
|Shanghai Miji|Shanghai Miji Digital Technology Co., Ltd.|
|Shanghai Aojue|Shanghai Aojue Digital Technology Co., Ltd.|
|Huoerguosi Jiaji|Huoerguosi Jiaji Digital Technology Co., Ltd.|
|Guangzhou Jisheng|Guangzhou Jisheng Co., Ltd.|
|Chengdu Pengwan Technology Co., Ltd.|Chengdu Pengwan Technology Co., Ltd. and its subsidiaries|
|Shenzhen Moklyin Technology Co., Ltd.|Shenzhen Moklyin Technology Co., Ltd. and its subsidiaries|
||Zhangshu Wangzhong Investment Management Center (Limited|
|Wangzhong Investment||
||Partnership)|

2017 Annual Report Section II Company Profile and Main Financial Indicators
I. Company Information
|||||
|-|-|-|-|
|Stock Name|Sanqi Interactive Entertainment|Stock Code|002555|
|Place of Listing|Shenzhen Stock Exchange|||
|Chinese Name of the|芜湖顺荣三七互娱网络科技股份有限公司|||
|Company||||
|Abbreviation of the Chinese||||
||三七互娱|||
|Name of the Company||||
||WUHU SHUNRONG SANQI INTERACTIVE ENTERTAINMENT NETWORK|||
|Name in English||||
||TECHNOLOGY CO.，LTD.|||
|Legal Representative|Li Weiwei|||
|Registered Address|Nanling County Economic Development Zone, Wuhu City, Anhui Province|||
|Postal Code of the Registered||||
||243000|||
|Address||||
||11/F, Tower A1, Wanjiang Fortune Plaza, No. 88, Ruixiang Road, Jiujiang District, Wuhu City,|||
|Business Address||||
||Anhui Province|||
|Postal Code of the Business|241000|||

2017 Annual Report
|||
|-|-|
|Address||
|Website|www.37.com|
|Email|ir@37.com|

II. Contact Persons and Contact Details
||||
|-|-|-|
||Secretary to the Board of Directors|Securities Affairs Representative|
|Name|Ye Wei|Chen Zhenhua|
||11/F, Tower A1, Wanjiang Fortune Plaza,|11/F, Tower A1, Wanjiang Fortune Plaza,|
|Address|No. 88, Ruixiang Road, Jiujiang District,|No. 88, Ruixiang Road, Jiujiang District,|
||Wuhu City, Anhui Province|Wuhu City, Anhui Province|
|Tel|0553-7653737|0553-7653737|
|Fax|0553-7653737|0553-7653737|
|Email|ir@37.com|ir@37.com|

III. Information Disclosure and Location
|||
|-|-|
|Newspapers designated by the Company for||
||China Securities Journal, Shanghai Securities News and Securities Times|
|information disclosure||
|Website designated by CSRC for publication of||
||http:∥www.cninfo.com.cn|
|annual reports||
||11/F, Tower A1, Wanjiang Fortune Plaza, No. 88, Ruixiang Road, Jiujiang|
|Location of annual reports of the Company||
||District, Wuhu City, Anhui Province|

IV. Changes in Registration Information
|||
|-|-|
|Organization Code|71392778-9|
||1. On March 2, 2011, the Company issued its IPO on SME Board of Shenzhen Stock|
||Exchange. The Company is mainly engaged in manufacturing and sales of plastic fuel|
||tanks of automobiles. 2. On May 27, 2014, the material asset restructuring of the|
||Company involving IPO, assets purchase with cash, supporting fund raising, and|
||related-party transactions was conditionally passed at the 22th Session of 2014 of the|
|Changes in the principal businesses of the|Review Board for Merger, Acquisition, and Restructuring of Listed Companies, China|
|Company since listing of its shares (if any)|Securities Regulatory Commission. On December 2, 2014, the Company received the|
||Reply of CSRC Regarding Wuhu Shunrong Auto Parts Co., Ltd. Issuing Shares to Li|
||Weiwei and Others, Purchasing Assets, and Raising Supporting Funds. Through|
||purchase of 60% of the share in Shanghai Sanqi Interactive Entertainment, the|
||Company grew from single main business of automotive plastic fuel tanks|
||manufacturing to two main businesses, advanced manufacturing and modern cultural|

2017 Annual Report
|||
|-|-|
||creativity industry. 3. On December 18, 2015, the Company received the Reply of|
||China Securities Regulatory Commission Regarding Approval of Non-public Offering|
||of Shares of Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co.,|
||Ltd. (Zheng Jian Xu Ke [2015] No. 2941), according to which, the Company was|
||approved to issue not more than 165,289,300 shares by non-public offering and the|
||funds raised would be used for purchasing 40% of the share in Shanghai Sanqi|
||Interactive Entertainment. Shanghai Sanqi Interactive Entertainment has become a|
||wholly-owned subsidiary of the Company since 2016.|
|Changes in controlling shareholders (if||
||None|
|any)||

V. Other Relevant Information
The accounting firm employed by the Company
|||
|-|-|
|Name of the accounting firm|GP Certified Public Accountants (Special General Partnership)|
|Business address|10/F, Yuehai Group Building, No.555 Dongfeng East Road, Yuexiu, Guangzhou|
|Name of the signature auditor|Xiong Yongzhong, Yang Xinchun|

Sponsor institute employed by the Company to perform the duty of continuous supervision in the auditing period
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|||Name of Sponsor|Period of Continuous|
|Name of Sponsor Institute|Business Address|||
|||Representative|Supervision|
||Metro Plaza, No. 183-187,|||
||Tianhe Road North, Tianhe||From January 12, 2016 to|
|GF Securities Co., Ltd.||Yuan Ruobin and Zhu Baoli||
||District, Guangzhou City,||December 31, 2017|
||Guangdong Province|||

Financial advisor employed by the Company to perform the duty of continuous supervision in the auditing period.
√Applicable□ Not applicable
|||||
|-|-|-|-|
|||Name of Sponsor|Period of Continuous|
|Name of Sponsor Institute|Business Address|||
|||Representative|Supervision|
||Metro Plaza, No. 183-187,|||
||Tianhe Road North, Tianhe||From May 9, 2017 to December|
|GF Securities Co., Ltd.||Lv Shaoyi and Tian Li||
||District, Guangzhou City,||31, 2018|
||Guangdong Province|||

VI. Key Accounting Data and Financial Indicators
Does the Company need to retroactively adjust or restate accounting data of previous years?
2017 Annual Report□ Yes√ No
||||||
|-|-|-|-|-|
||||Variance in||
||2017|2016|comparison with the|2015|
||||previous year||
|Operating income (yuan)|6,188,828,116.75|5,247,893,728.73|17.93%|4,656,787,281.09|
|Net income attributable to|1,620,582,427.47|1,070,162,324.07|||
|shareholders of the listed company|||51.43%|506,016,504.78|
|(yuan)|||||
|Net income attributable to|||||
|shareholders of the listed company|||||
||1,048,251,240.84|1,010,769,599.36|3.71%|449,076,050.96|
|net of non-recurring profit and loss|||||
|(yuan)|||||
|Net cash flow from operating|1, 831,895,928.30|1,051,939,577.83|||
||||74.14%|1,081,238,239.96|
|activities (yuan)|||||
|Basic earnings per share|0.76|0.51|||
||||49.02%|0.29|
|(yuan/share)|||||
|Diluted earnings per share|0.76|0.51|||
||||49.02%|0.29|
|(yuan/share)|||||
|Return on weighted average net|||||
||28.12%|26.56%|1.56%|17.58%|
|assets|||||
||||Variance in||
||||comparison with the||
||End of 2017|End of 2016||End of 2015|
||||end of the previous||
||||year||
|Total assets (yuan)|9,160,137,685.38|6,386,216,011.34|43.44%|4,623,310,755.63|
|Net assets attributable to|7,016,770,210.85|4,523,665,282.04|||
|shareholders of the listed company|||55.11%|3,563,355,144.71|
|(yuan)|||||

The Company considers and uses one non-GAAP measure, Adjusted Net Income/ (Loss), as supplemental measure to review and assess our operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with China Accounting Standards. The Company's Adjusted Net Income is RMB 1,408,706,561.26 for the year 2017, which is defined as net income attributable to shareholders of the listed company of RMB1, 620,582,427.47 excluding performance compensation income/expenses of RMB 397,608,243.44 and related goodwill impairment of RMB 299,457,551.04 generated by business acquisitions, after tax income/loss from disposal of equity investments of RMB 199,561,658.81 and share-based compensation of RMB 85,836,485.00. The Adjusted Net Income for the year 2016 is RMB 1,060,713,029.67. The Adjusted Net Income for the reporting period increased by32.81% compared to last year.
2017 Annual Report VII. Differences in Accounting Data under Domestic and Overseas Accounting Standards 1. The differences in net income and net assets in the financial statements disclosed in accordance with international accounting standards and in accordance with Chinese accounting standards
□ Applicable√ Not applicable
The Company did not have any discrepancies in net income and net assets in the financial reports disclosed in accordance with international accounting standards and the Chinese accounting standards during the reporting period.
2. The differences in net income and net assets in the financial statements disclosed in accordance with overseas accounting standards and in accordance with Chinese accounting standards
□ Applicable√ Not applicable
The Company did not have any discrepancies in net income and net assets in the financial reports disclosed in accordance with overseas accounting standards and in accordance with Chinese accounting standards during the reporting period.
VIII. Key Quarterly Financial Indicators
Unit: yuan
||||||
|-|-|-|-|-|
||Quarter 1|Quarter 2|Quarter 3|Quarter 4|
|Operating income|1,618,738,028.51|1,460,690,875.99|1,384,968,829.74|1,724,430,382.51|
|Net income attributable to|||||
||433,033,150.06|417,517,368.31|360,788,807.71|409,243,101.39|
|shareholders of the listed company|||||
|Net income attributable to|||||
|shareholders of the listed company|345,442,083.59|413,305,351.97|311,725,820.31|-22,222,015.03|
|net of non-recurring profit and loss|||||
|Net cash flow from operating|||||
||638,703,409.51|458,143,900.12|319,124,714.02|415,923,904.65|
|activities|||||

TheCompany’s net income attributable to the shareholders of the listed company after deducting non-recurring gains and losses is RMB -22,222,015.03 in Quarter 4, which was mainly due to the recognition as non-recurring gains and losses by the Company of the compensation of RMB 401,364,984.06 arising from ShanghaiMokun’s failure to meet the performance commitment, and due to the inclusion of the goodwill impairment of RMB 299,457,551.04 corresponding to the asset in recurring gains and losses.
The Company considers and uses one non-GAAP measure, Adjusted Net Income/ (Loss), as supplemental measure to review and assess our operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with China Accounting Standards. The Company's Adjusted Net Income is RMB 1,408,706,561.26 for the year 2017, which is defined as net income attributable to shareholders of the listed company of RMB1, 620,582,427.47 excluding performance compensation income/expenses of RMB 397,608,243.44 and related goodwill impairment of RMB 299,457,551.04 generated by business acquisitions, after tax income/loss
from disposal of equity investments of RMB 199,561,658.81 and share-based compensation of RMB 85,836,485.00. The Adjusted
Net Income for the Quarter 1 to Quarter 4 are RMB 350,533,150.06, RMB 418,801,935.61, RMB 328,279,066.60 and RMB
311,092,408.99 respectively.
2017 Annual Report Is there major discrepancy between above financial indicators or the sum of their direct aggregate and relevant financial indicators in quarterly reports and semi-annual reports disclosed by the Company?
□ Yes√ No
IX. Non-Recurring Items and Amounts
√ Applicable□ Not applicable
Unit: yuan
||||||
|-|-|-|-|-|
|Item|Amount of 2017|Amount of 2016|Amount of 2015|Remarks|
||200,975,719.36|||Mainly the profits andlosses from disposalof long-term equityinvestment anddisposal of fixedassets|
|Profits and losses on disposal of non-current|||||
|assets (including the part written-off with|||||
|||7,667,198.02|557,400.93||
|the provision for impairment loss on assets|||||
|accrued)|||||
|Government subsidy recorded in current|29,695,208.76|||Mainly governmentsubsidies other thanVAT refunds|
|profits and losses (except government|||||
|subsidy closely related to company business||68,413,211.24|60,066,571.65||
|and granted according to the unified quota|||||
|or ration of the national standard)|||||
|Payment for use of funds that is recorded in|15,607,133.62|||Mainly income fromborrowing interest|
|current profits and losses and is collected|||||
|from non-financial businesses|||||
||13,370,838.07|||Mainly the income ofbank financialproducts|
|Profits and losses from entrusting others to|||||
|||6,931,102.57|3,411,610.12||
|invest in or manage assets|||||
|Profits and losses on changes in fair value|40,268,035.00|||Mainly the investmentincome from disposalof available-for-salefinancial assets|
|arising from holding of trading financial|||||
|assets and trading financial liabilities and|||||
|return on investment from disposal of|||||
|trading financial assets, trading financial||3,608,355.70|1,287,609.34||
|liabilities, and available-for-sale financial|||||
|assets, except for effective hedging business|||||
|relating to the normal operating business of|||||
|the Company|||||
|Other non-operating incomes and|1,251,440.52||||
|||-8,461,639.08|-2,191,357.89||
|expenditures except above items|||||
||296,624,143.44|||Mainly performancecompensation income(The amount of|
|Other profits and losses items that fit the|||||
|definition of non-recurring profits and losses|||||

2017 Annual Report
||||||
|-|-|-|-|-|
|||||impairment loss ofRMB 299,457,551.04provided by theCompany on thegoodwill of ShanghaiMokun was includedin current profit orloss), the sharepayment expenses,and performancecompensationexpenses|
|Less: affected amount of income tax|36,707,567.83|10,764,962.34|3,021,230.09||
|Affected amount of minority equity|-11,246,235.69||||
|||8,000,541.40|3,170,150.24||
|(after-tax)|||||
|Total|572,331,186.63|59,392,724.71|56,940,453.82|--|

The reason shall be specified for items of non-recurring profit and loss defined in accordance with definition in Explanatory Announcement No.1 on Information Disclosure for Companies Offering their Securities to the Public - Non-recurring Profit and Loss and items of non-recurring profit and loss listed in the above announcement that are defined to be recurrent profit and loss.
□ Applicable√ Not applicable
The Company did not define items of non-recurring profit and loss defined and listed in Explanatory Announcement No.1 on Information Disclosure for Companies Offering their Securities to the Public - Non-recurring Profit and Loss to be items of recurrent profit and loss in the reporting period.
2017 Annual Report Section III Summary of theCompany’s Business
I. Main Business in the Reporting Period
Does the Company need to comply with the disclosure requirements for special industries?
No
The Company is principally engaged in interactive entertainment business and manufacturing and sales of plastic fuel tanks for automobiles. The interactive entertainment business mainly focuses on the research, development, publishing and operation of mobile games and browser games, while arranging pan-entertainment business including film and TV, animation, music and VR. The Company steadily promoted the development strategy of “platformization, globalization and pan-entertainment” for interactive entertainment business based on IP during the reporting period. Its overall strength ranked the 18th among the top 100 Internet companies in China; the auto parts business developed steadily.
During the reporting period, the Company achieved an operating revenue of RMB 6.189 billion with a year-on-year increase of17.9%, a pretax income of RMB 1.917 billion with a year-on-year increase of45.3%, and the net income attributable to shareholders of the listed company of RMB 1.621 billion with a year-on-year increase of51.4%. The main reasons for theCompany’s increase in the net income attributable to the shareholders of the listed company include: (1) TheCompany’s gameR&D business and mobile game publishing business achieved great development during the reporting period.R&D products represented by Yong Heng Ji Yuan, Swords of Archangels H5 and Mobile Game Chuan Qi Ba Ye have significantly increased theCompany’s profitability in the mobile game business; (2) The Company confirmed related performance compensation gains and goodwill impairment losses for the reason that Shanghai Mokun, its subsidiary, failed to achieve the performance commitments. The main reason for ShanghaiMokun’s failure to reach the performance commitments is that the product launch time was postponed. Shanghai Mokun had successfully launched the major product and has achieved impressive billing as of the release date of this report.
II. Significant Changes in Main Assets
1. Significant changes in main assets
|||
|-|-|
|Main Assets|Description of Significant Changes|
||Equity assets increased RMB 312 million in the reporting period, which was mainly due|
||to the inclusion of Shanghai Mokun, an original JV of the Company, into the|
|Equity assets|consolidation scope within the reporting period. For details, see the Note 10|
||Available-For-Sale Financial Assets and Note 11 Long-Term Equity Investment in the|
||Notes to the Consolidated Financial Statements in part II of Section V Financial Report.|
|Fixed assets|No major change during the reporting period.|
|Intangible assets|No major change during the reporting period.|
|Construction in progress|Construction in process increased RMB 20 million in the reporting period , which was|

2017 Annual Report
|||
|-|-|
||mainly due to the Company’s investment in second-phase equipment project. For details,|
||see the Note 13 Construction in Progress in the Notes to the Consolidated Financial|
||Statements in part II of Section V Financial Report.|
||monetary funds increased RMB 762 million in the reporting period, which was mainly|
||due to the increase in cash inflow generated by the Company's operating activities during|
|Monetary funds||
||the reporting period. For details, see the Item 5 Consolidated Cash Flow Statement in II.|
||Financial Statements of Section V Financial Report.|
||other current assets increased RMB 357 million in the reporting period, which was|
||mainly due to the Company’s confirmation of performance compensation related to the|
||failure of Shanghai Mokun, acquired by the Company during the reporting period, to|
|Other current assets||
||fulfil its performance commitments. For details, see the Note 9 Other Current Assets in|
||the Notes to the Consolidated Financial Statements in part II of Section V Financial|
||Report.|
||Other receivables increased RMB 265 million in the reporting period, mainly because the|
||Company’s loans to others and relevant interest due within 1 year was reclassified from|
|Other receivables||
||other non-current assets to this item. For details, see the Note 6 Other Receivables in the|
||Notes to the Consolidated Financial Statements in part II of Section V Financial Report.|
||Goodwill increased RMB 960 million in the reporting period, which was mainly due to|
||the new consolidation of the goodwill of Shanghai Mokun. For details, see the Note 16|
|Goodwill||
||Goodwill in the Notes to the Consolidated Financial Statements in part II of Section V|
||Financial Report.|
||Other non-current assets increased RMB 594 million in the reporting period, which was|
||mainly due to the prepayment for the purchase of office buildings and parking spaces.|
|Other non-current assets||
||For details, see the Note 19 Other Non-Current Assets in the Notes to the Consolidated|
||Financial Statements in part II of Section V Financial Report.|

2. Main overseas assets
□ Applicable√ Not applicable
III. Analysis of Core Competitiveness
Does the Company need to comply with the disclosure requirements for special industries?
No
The Company steadily promoted the development strategy of “platformization, globalization and pan-entertainment” for interactive entertainment business based on IP and formed the following core competitiveness:
1. Team Strengths
The Company's core team consists of the experienced publishing team of mobile games and browser games, and theR&D team with
2017 Annual Report leading technology. The core team members have years of experience in publishing, operation andR&D of games, as well as numerous successful products. The core team has a prospective insight, full of creativity and efficient execution. It always upholds the marathon-type entrepreneurial spirit and leads the Company to keep up with the industry leader: (1) mobile gameR&D and publishing. The Company's publishing business of domestic mobile games caught up from behind. It achieved a market share of5.2% in 2017, becoming the leading mobile game publisher after Tencent and NetEase (source: 2017-2018 Research Report ofChina’s Mobile Games Market from iiMedia Research). TheCompany’s billing of overseas mobile games publishing business also realized a year-on-year increase of nearly80%. Yong Heng Ji Yuan and Swords of Archangels H5, which are researched and developed by the Company based on its accumulated strength, have respectively obtained a monthly gross billing of more than RMB 350 million globally in the reporting period and a monthly gross billing of over RMB 180 million during the reporting period. Mobile Game Chuan Qi Ba Ye broke RMB 100 million after releasing on the Tencent platform in 30 days. (2) Browser games. TheCompany’s browser game platform ranked second in terms of market share, just behind Tencent. The Company opened a total of nearly 28,000 groups of servers in China in 2017, ranking first in the ranking list of server quantity of operating platforms in 2017. (Source: 2017 Browser Game Data Report from 9K9K.COM).
2. The Company Achieved Differentiated Competitive Advantages in the Mobile Game Publishing Business and Established A Good Brand Image
The Company is experienced in the mobile game publishing business and formed strong differentiated competitive advantages, mainly reflected in:
(1) The Company specializes in mobile game traffic operation and has efficient traffic conversion capabilities. The Company is capable of continuously introducing sufficient users to target games to maintain a healthy growth of active players in an environment where mobile internet traffic prices continue to rise. At the same time, the Company has extensively covered downstream partners in the industry chain and established sustainable cooperation with mainstream channels domestically, to ensure that theCompany’s mobile game products continue to acquire users. The mobile game products launched by the Company achieved high levels of billing in channels such as Tencent, Huawei and OPPO during the reporting period. The newly added registered users of mobile games through traffic operations reached more than 86 million in the reporting period, taking the leading place in the industry;
(2) The Company is able to dig deep into the upper stream of the industry chain for high-quality products, has strong capabilities of adjustment, optimization and operation of products, which continuously improves the quality of games and guarantees a longer life cycle and high cumulative billing of games. TheCompany’s self-developed Yong Heng Ji Yuan has been launched for more than one and a half years. Its users and billing remain stable; newly registered users of the self-developed Swords of Archangels H5 reached 8 million within 3 months after launch at the end of September 2017, with a total top-up billing of over RMB 500 million, which has set a benchmark for H5 game category of the mobile network.
(3) The accumulated registered mobile game users owned by the Company have reached 189 million. The Company, given the circumstances where traffic prices continue to rise, provides players with diversified game options and operation services to attendplayers’ needs through a rich product reserve and customer service system, demonstrating the capability of further improving game experience, activity degree and retention rate. 1) The gameplay provided by the Company includes ARPGs (action role-playing games), SLGs (simulation games) and turn-based RPGs (turn-based role-playing games). Game categories consist of ancient fantasy games, card games, female-oriented games, and games adapted from cartoons and animations, etc. The Company is one of the few publishing company in the industry that can provide comprehensive game categories and one-stop services besides Tencent and NetEase; 2) The Company has a complete player account system, customer service system and experienced customer service team. Combined with sufficient product offerings, it has the ability to further enhance game experience, activity degree and retention rate and increase theCompany’s revenue and advertising effectiveness under the "platformization" strategy.
2017 Annual Report Relying on the publishing with differentiated
competitive advantages during the reporting
period, the Company was awarded “2017
China’s Top 10 Mobile Game Operators” and
“2017China’s Top 10 Mobile Game
Operating Platforms” in 2017 China “Top Ten
Games” Grand Celebration which was guided
by the Digital Publishing Division of the State
Administration of Press, Publication, Radio,
Film and Television, hosted by China
Audio-Video and Digital Publishing
Association and organized by the Game
Committee of the China Audio-Video and
Digital Publishing Association. It also won the
“Top Ten Mobile Game Companies” in 2017
China Game Billboard. The Company achieved a market share of5.2% of the domestic mobile game publishing market in 2017 as of December 31, 2017 and is expected a continuous increase of the market share.
3. Brouser Game Operation Business Kept Leading in China and Fine Operation Created Long-Term Income-Generating
Competitive Products
TheCompany’s browser game platform ranked second in terms of market share, just behind Tencent. The Company opened a total of nearly 28,000 groups of servers domestically in 2017, ranking first in the ranking list of group quantity of operating platforms in 2017. The Company has formed the following competitive advantages with respect to browser game business:
(1) The sound brand reputation of the Company helped establishment of brand barriers for its browser game platform, brought more players with self-owned flow and reduced the Company's costs of acquisition of players;
(2) Leading market position and market share has attracted moreR&D manufacturers and companies to cooperate, while strengthening the Company's bargaining power overR&D manufacturers and media channels;
(3) The pragmatic business style and excellent performance have enabled the Company to establish a close cooperative relationship with multiple Internet media channels and enhance theCompany’s bargaining power over Internet channel suppliers. It can obtain more and better channel resources at the same price.
(4) The Company specializes in fine-quality game operation. The games such as Swords of Archangels and Chuan Qi Ba Ye etc. launched in 2014 still showed strong and lasting vitality. They became rare long-term revenue-generating products in the field of browser games; The new products achieving the total billing of over RMB 10 million in 2017 include: Jin Zhuang Chuan Qi, Mo Yu, Browser Game Yong Heng Ji Yuan, Nine Gods, Journey to the West: The Demons Strike Back and Princess Agents.
(5) The Company's core operating practices for different game genre and different player types accumulated over many years of continuous game operation experience have been widely recognized in the industry. It has acquired the operation rights of multiple gaming platforms such as Jinshan Liebao, 2345 and Douyu, further enriching the publishing channels and increasing market share of the Company. Relying on the outstanding performance of its browser game business during the reporting period, the Company won the “2017 Top 10 Most Popular Browser Games” for Swords of Archangels and Chuan Qi Ba Ye and the "2018 Top 10 Most
2017 Annual Report Anticipated Browser Games" for A Step into the Past and Jin Zhuang Chuan Qi in 2017 China “Top Ten Games” Grand Celebration; Chuan Qi Ba Ye was awarded the "Favorite Browser Game of Players" and Xue Meng Rong Yao was awarded “The Most Anticipated Browser Game of Players” in 2017 Golden Plume Award.
4. Development Capabilities for High-Quality Games
The Company's researched and developed series of core technologies such as game engines and game frameworks with excellent performance and stability can support the development of high-quality online games with engaging gameplay, which is an important guarantee for the Company's continued introduction of delicate games. The mature core technology and rich product experience enable the Company to control costs and shorten the product development period, timely launch of fine games that meet the development direction of the industry and seize the market opportunities with guaranteed quality. The Company implements the principle of market orientation and sustainable development and balances the commercial nature and entertainment of game products with a deep understanding of player needs in the game operation business, making theR&D games launched have the following features:
(1) The life circle of games is long and theplayers’ activity degree is stable. The browser games including Swords of Archangels and Chuan Qi Ba Ye launched in 2014 and the mobile game Yong Heng Ji Yuan launched in June 2016 remained stable and high billing and continued to contribute profits during the reporting period.
(2) The games meet the market demands and have a high success rate. Five web and mobile games launched from 2014 to the release date of this report achieved the monthly gross billing of more than RMB 100 million, realizing a high success rate.
(3) Long-term player recognition forms brand barriers. The Company's self-developed browser games including Chuan Qi Ba Ye and Swords of Archangels have maintained a stable and high billing through excellent self-developed quality since their launch in 2014. They receive continuous recognition from core players as the domestic representatives of "Mir" and "MU" games. Mobile Game Chuan Qi Ba Ye broke through RMB 100 million in 30 days after launch and the gross billing of Swords of Archangels H5 in a single month surpassed RMB 180 million in the reporting period, which verifies the word-of-mouth effect and brand barriers of self-developed games.
The Company completed the acquisition of Shanghai Mokun and strengthened the Company'sR&D capabilities for high-quality games during the reporting period. As of the report date, the Company was researching and developing three browser games including Tu Long Rong Yao, Xue Meng Rong Yao and MU X, and nine mobile games including Mobile Game MU Miracle, Huang Jin Cai Jue, Ling Yu, Fighter of the Desti hny, H-GAME, Mobile Game T, Mobile Game F, Legend Mobile Game Y and Project X - Legend H5, which are expected to be launched in succession in 2018. Based on its strong development capabilities for delicate games, the Company expects to continue to produce long-term high-quality games just like Yong Heng Ji Yuan, Chuan Qi Ba Ye and Swords of Archangels.
2017 Annual Report .
2017 Annual Report Section IV Discussion and Analysis of Operations
I. Overview
The Company focused on IP and steadily promoted the development strategy of “platformization, globalization and pan-entertainment” for interactive entertainment business during the reporting period. Its overall strength ranks the 18th among the top 100 Internet companies in China; its auto parts business achieved a steady development. The Company achieved an operating revenue of RMB 6.189 billion with a year-on-year increase of17.9%, a pretax income of RMB 1.917 billion with a year-on-year increase of45.3% and the net income attributable to shareholders of the listed company of RMB 1.621 billion with a year-on-year increase of51.4%. The Company completed the overall acquisition of Shanghai Mokun and Jiangsu Zhiming in May 2017, enhancing theCompany’s capabilities of gameR&D and publishing.
i. Interactive Entertainment Business
1. Mobile game business. The Company continued to defend the position of first-tier publishers of mobile games in markets at home and abroad. Its investment in mobile gameR&D continued to increase.
(1) TheCompany’s mobile game business obtained an operating revenue of RMB 3.284 billion and the gross profit of RMB 2.512 billion during the reporting period, achieving a year-on-year increase of100.4% and147.7% respectively.
a. Domestic Publishing.
During the reporting period, the Company successfully launched long-term and high-quality games including Yong Heng Ji Yuan, Swords of Archangels H5 and Xian Ling Jue Xing. The highest number of monthly active users (MAU) exceeded 13 million. The highest monthly billing surpassed RMB 500 million. The highest record of single-day billing of Yong Heng Ji Yuan as a representative work broke through RMB 70 million during the reporting period.
The domestic mobile game publishing industry during the reporting period was highly competitive with the following characteristics: (1) The continuous increase in traffic costs has caused industry reshuffle and survival of the fittest. The Company is strong on traffic operation and product operation. The number of its newly registered users of mobile games in the report period exceeded 74 million, leading the industry. Its market share has maintained a steady growth to5.2%, second only to Tencent and NetEase, and was expected to increase during the reshuffle process in the market. Its influence on the flow end and product end will also be enhanced thereby.
(2) Leading products have obvious effects. According to theChina’s Game Industry Report for January-June 2017 released jointly by GPC (Game Committee of the China Audio-Video and Digital Publishing Association), CNG and IDC (International Data Corporation), the proportion of total billing of the top 10 products among the total market billing increased from52.9% to54.9%, showing a significant leading product effect. The Company is expected to expand the competitive advantages in the publishing business relying on the products already released such as Yong Heng Ji Yuan, Swords of Archangels H5 and Xian Ling Jue Xing, reserved self-developed products such as Mobile Game MU Miracle, Project X - Legend H5, and Legend Mobile Game Y, as well as authorized products such as Ming Yun Xian Feng, Sword and Rebirth, Code M - MMO, Code X - Cards, Code H -legend and Code S - SLG.
2017 Annual Report (3) The Company has rapidly expanded its game genre. The Company specializes in product such as ARPG, SLG and turn-based RPG, etc. According to theChina’s Game Industry Report for January-June 2017 released jointly by GPC, CNG and IDC, ARPG, SLG and turn-based RPG totally accounted for more than50% of the market share, which will benefit the further increase of theCompany’s market share. As for game themes, the Company is expected to further expand the market share by publishing multi-category mobile games such as Xian Ling Jue Xing, Ling Yu, Sword and Rebirth and other ancient fantasy games, card games, female-oriented games, and games adapted from cartoons and animations.
b. Overseas publishing. The Company adopted to the strategy of “localized operation+ multi-dimensional marketing” and has accumulated rich experience in overseas game business operation. During the reporting period, the Company's billing of overseas publishing business of mobile games broke through RMB 1 billion, achieving an increase of nearly80% over the same period of last year. Yong Heng Ji Yuan reached a maximum billing of RMB 70 million in a single month overseas during the reporting period and took the first place in the best-selling list of Hong Kong, Macao and Taiwan, Singapore, Malaysia, Vietnam and Philippines etc., the second place in Indonesia and Turkey, the third place in Thailand and South Korea and the fifth place in a number of overseas markets. In addition, Demon Seals, Age of Immortals, Zhu Xian, Loongcraft and other games released by the Company also achieved good results overseas, among which, Demon Seals ranked the 3rd in the best-selling list in Taiwan. Age of Immortals ascended to the second in Singapore and Malaysia. Zhu Xian won the 4th place in Thailand. The Company will continue to explore overseas markets in 2018 and bring together various products to the overseas markets such as Clans of Intrigue, Kun Lun Xu, Divine, Qing Yun Jue and Mo San Guo. At the same time, it will launch Lords of Conquest, Primal Wars: Dino Age and other European and American custom products, and release Demon Seals in Korea and Yong Heng Ji Yuan in Japan to further consolidate the strategic layout of globalization.
(2) With respect to products, theCompany’s self-developed Yong Heng Ji Yuan has achieved a cumulative global billing of over RMB 3.41 billion and a global maximum monthly billing of over RMB 350 million during the reporting period, which laid a solid foundation for theCompany’s mobile gameR&D business. TheCompany’s overall acquisition of Shanghai Mokun during the reporting period strengthened the Company's gameR&D capabilities. As of the end of the reporting period, the Company was researching and developing nine mobile games including Mobile Game MU Miracle, Ling Yu, Fighter of the Destiny, Huang Jin Cai Jue, H-Game, Mobile Game T, Mobile Game F, Legend Mobile Game Y and Project X - Legend H5. It has signed a number of mobile games with the exclusive right, tentatively known as Ming Yun Xian Feng, Sword and Rebirth, Code M - MMO, Code X - Cards, Code H -legend and Code S - SLG, which will be launched in 2018 in succession. Based on the competitive advantages formed by the publishing andR&D business, the Company expects to continue to bring to the market long-term and global high-quality mobile games that are comparable to Yong Heng Ji Yuan and Swords of Archangels H5.
2017 Annual Report 2. Browser game business. 1) TheCompany’s browser game platform ranked second in terms of market share, just behind Tencent. The Company opened a total of nearly 28,000 groups of servers in China in 2017, ranking first in the ranking list of group quantity of operating platforms in 2017. 2) Its 37GAMES international platform market covers more than 180 countries, making it one of the most popular game platforms in the world. TheCompany’s browser game business generated revenue of RMB 2.298 billion and gross profit of RMB 1.537 billion during the reporting period, which was lower than the same period of 2016. The main reasons included:
(1) Browser game users have fallen in size. With the habit of users moving from personal computers to mobile phones and other mobile devices, the scale of browser game users declined during the reporting period;
(2) In the past few years, some browser gameR&D companies have turned to mobile gameR&D due to the rapid demand increase in the mobile game market, which caused a decline in the number of high-quality products on the market and also on the Company. The Company adopted a proactive strategy to respond to market changes during the reporting period. 1) With respect to authorized products, the Company cooperated closely with the top domestic browser gameR&D teams and successively launched Moyu, Journey to the West: The Demons Strike Back, Nine Gods, Princess Agents, and Jue Shi Xian Wang and other products in 2017 combining its IP advantages, which stabilized operating income. It will launch a variety of browser game products in 2018 including Rise of Taichi, One Piece Online, A Step into the Past and The Legendary Swordsman; 2) with respect toR&D, the Company stepped up its efforts to practiceR&D. The self-developed games which were launched in the reporting period included Jin Zhuang Chuan Qi and Browser Game Yong Heng Ji Yuan. Browser games under research and development include Tu Long Rong Yao, Xue Meng Rong Yao and MU X, which are expected to launch in 2018 successively; 3) with respect to strategic investment, the Company and invested companies including Chengdu Pengwan Technology Co., Ltd., Longzhang Animation (Shanghai) Co., Ltd., Chengdu Modu Technology Co., Ltd. and Chengdu Mofei Technology Co., Ltd. actively participate in browser game cooperation and business synergy.
2017 Annual Report 3. Pan-entertainment interaction. 1) With respect to endogenous development, the Company has formed three business segments including mobile game publishing, browser game publishing and gameR&D. Each business segment supports each other, which achieves efficient resource integration in productR&D, marketing and business cooperation, creating a closed loop of the game industry chain and promote the continuous growth of the Company's income level. 2) With respect to outreach development, the Company newly participated in a series of gameR&D and publishing companies with equity during the reporting period, including XD Network Co., Ltd. (gameR&D and publishing), Najia Technology (Shenzhen) Co., Ltd. (gameR&D), Shanghai Yuhouyi Network Technology Co., Ltd. (game publishing), Chengdu Modu Technology Co., Ltd. (gameR&D), Chengdu Mofei Technology Co., Ltd. (gameR&D) and Shenzhen Zen Game Technology Co., Ltd. (gameR&D). Such a series of gameR&D investment increased the sustainable growth capacity of upstream high-quality contents and guaranteed the continuous supply of diversified contents. At the same time, such a series of game publishing investment to jointly explore the market formed a good complement toR&D. The Company completed the overall acquisition of Shanghai Mokun and Jiangsu Zhiming in the reporting period, enhancing theCompany’s capabilities of gameR&D and publishing. 3) With respect to pan-entertainment layout, the Company has invested in film, television, animation, music, VR and other fields. the Company invested and released Reset, a domestic sci-fi movie, in the reporting period through New Clues (Beijing) Film& TV Investment Co., Ltd. indirectly invested by Huai'an Sanqi Yijian Pan-Entertainment Asset Management Center (Limited Partnership); Forever Young, invested by the Company and jointly produced with Hangzhou Southern Pictures Co., Ltd., has grossed over RMB 700 million as of the release day of this report and received favorable comments in the market. At the same time, Till the End of the World, as the first domestic romance film with a background story based on Antarctica, was produced by Beijing C2M Media Co., Ltd, which was invested by the Company. It gained a positive reputation in the market and earned a total revenue of more than RMB 200 million. King of Fighters: Destiny, an animation which was produced by Shanghai Jueli Culture Co., Ltd., where the Company held shares was launched in the reporting period; the Company achieved a breakthrough in digital music business through Shanghai Rock Forward Entertainment Co., Ltd. indirectly invested by Huai'an Sanqi Yijian Pan-Entertainment Asset Management Center (Limited Partnership); VR contentR&D teams of both Archiact Interactive Ltd. and Tianshe (Shanghai) Cultural Media Co., Ltd. where the Company held shares continued to produce Hidden Fortune, a VR game of treasure-hunting, League of Guardians, a VR game of tower defense and other products; 4) The Company established Yangzhou Fuhai Sanqi Internet Culture Investment Center (Limited Partnership) with Shenzhen Oriental Fortune Capital Investment Management Co., Ltd., a leading entertainment investment institution in China, to jointly focus on the investment in the Internet entertainment industry under the hot trend of pan-entertainment.
2017 Annual Report 4. IP strategy. The Company continued to explore quality IPs to produce quality games in combination of its own advantages in the game business. In addition to direct purchase of high-quality IPs, the Company has reached a good cooperation with partners such as Mango Media. They will continue to have more cooperation on IP. The Company built an pan-entertainment strategy system based on high-quality IP strategy to meet the diversified entertainment needs of users, and further explored the value of IP in the fields of film and television, games, animation, live broadcasting, music and VR etc. At present, the Company reserves a large number of quality IPs:
(1) Game IP: MU, World of Legend, Lineage II , Wu Yi, Asura, Seal online, The King of Fighters, Samurai Shodown and Nekketsu Kouha Kunio-kun Series etc.
(2) Film and TV IP: Princess Agents, Fighter of the Destiny, Chinese Hero Zhao Zilong, Journey to the West: the Demons Strike Back, The Monkey King 2 in 3D, Taichi, and Nirvana in Fire etc.
(3) Literature IP: A Step into the Past, Transcending the Nine Heavens, and Gate of Revelation etc.
(4) Animation IP: One Piece and Astro Boy etc.
ii. Auto Parts Business
The Company achieved positive results in the auto parts business in the reporting period by constantly increasing technical
investment, optimizing the technological process and improving its management level.
II. Analysis of Principal Business
1. Overview
Refer to relevant contents in “I. Overview” of “Discussion and Analysis of Operations”
2. Revenue and Costs
(1) Composition of operating revenue
Unit: yuan
|||||||
|-|-|-|-|-|-|
||2017||2016|||
||||||Year-on-year|
|||Proportion in the||Proportion in the||
||Amount||Amount||Increase (Decrease)|
|||Operating Revenue||Operating Revenue||
|Total of operating|6,188,828,116.75||5,247,893,728.73|||
|||100%||100%|17.93%|
|revenue||||||
|By Industries||||||
|Online game|5,628,616,443.76|90.95%|4,622,288,449.71|88.08%|21.77%|
|Auto parts|560,211,672.99|9.05%|625,605,279.02|11.92%|-10.45%|
|By Products||||||
|Browser game|2,298,860,026.39|37.15%|2,948,803,661.57|56.19%|-22.04%|

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Mobile games|3,283,622,990.10|53.06%|1,639,185,366.69|31.24%|100.32%|
|Auto parts|560,211,672.99|9.05%|625,605,279.02|11.92%|-10.45%|
|Other|46,133,427.27|0.74%|34,299,421.45|0.65%|34.50%|
|By Regions||||||
|Domestic market|5,269,286,525.60|85.14%|4,500,535,129.96|85.76%|17.08%|
|Overseas market|919,541,591.15|14.86%|747,358,598.77|14.24%|23.04%|

 (2) Industries, products, or regions taking up more than10% of theCompany’s operating revenue or profits
√ Applicable□ Not applicable
Does the Company need to comply with the disclosure requirements for special industries?
No
Unit: yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||Operating Revenue|Operating Cost|Gross Margin|Increased orDecreased Rate ofOperating Revenueover the Same Periodof the Previous Year||Increased or||Increased or|
||||||||Decreased Rate||Decreased|
||||||||of Operating||Rate of Gross|
||||||||Costs over the||Margin over|
||||||||Same Period of||the Same|
||||||||the Previous||Period of the|
||||||||Year||Previous Year|
||By Industries|||||||||
|Online game||5,628,616,443.76|1,533,843,501.10|72.75%|21.77%|2.10%||5.25%||
|Auto parts||560,211,672.99|414,353,738.66|26.04%|-10.45%|-5.60%||-3.80%||
||By Products|||||||||
|Browsergames||2,298,860,026.39|761,943,558.28|66.86%|-22.04%|-13.12%||-3.40%||
|Mobile games||3,283,622,990.10|771,899,942.82|76.49%|100.32%|23.43%||14.64%||
|Auto parts||560,211,672.99|414,353,738.66|26.04%|-10.45%|-5.60%||-3.80%||
|Other||46,133,427.27||100.00%|34.50%|0.00%||0.00%||
||By Regions|||||||||
|Domesticmarket||5,269,286,525.60|1,745,664,356.75|66.87%|17.08%|7.07%||3.10%||
|Overseasmarket||919,541,591.15|202,532,883.01|77.97%|23.04%|-34.85%||19.56%||

2017 Annual Report□Applicable√ Not applicable
(3) Is the sales proceeds in kind of the Company more than service revenue?
□ Yes√ No
(4) Performance of important sales contracts signed by the Company as of current reporting period□ Applicable√ Not applicable
No
(5) Composition of operating costs
By Industries and Products
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
|||2017||2016||Year-on-year|
|Industries|Item||Proportion in the||Proportion in the|Increase|
|||Amount||Amount|||
||||Operating Costs||Operating Costs|(Decrease)|
|Online game|Online game|1,533,843,501.10|78.73%|1,502,334,412.70|77.39%|2.10%|
|Auto parts|Auto parts|414,353,738.66|21.27%|438,952,363.96|22.61%|-5.60%|

||||||||
|-|-|-|-|-|-|-|
|||2017||2016||Year-on-year|
|Product Types|Item||Proportion in the||Proportion in the|Increase|
|||Amount||Amount|||
||||Operating Costs||Operating Costs|(Decrease)|
|Browser games|Browser games|761,943,558.28|39.11%|876,972,214.03|45.18%|-13.12%|
|Mobile games|Mobile games|771,899,942.82|39.62%|625,362,198.67|32.21%|23.43%|
|Auto parts|Auto parts|414,353,738.66|21.27%|438,952,363.96|22.61%|-5.60%|

 Note:
(6) Is there any change in the scope of consolidation in the reporting period?
√ Yes□ No
In May 2017, the company acquired68.43% of the equity in Shanghai Mokun, and the company began to include Shanghai Mokun and its subsidiaries including Shanghai Langkun, Shanghai Miji, Shanghai Kunkun, Shanghai Aojue and Huoerguosi Jiaji, in the scope of consolidated statements from May 31, 2017.
2. Newly-established subsidiary in the current period:
In February 2017, Tibet Xintai, thecompany’s first-tier subsidiary, established Lihui Venture. The company holds100% of the
equity in this newly-established subsidiary and has included it in the scope of consolidation since February 2017.
2017 Annual Report In March 2017, Jiangsu Aurora, thecompany’s second-tier subsidiary, established Anhui Aurora. The company holds80% of the equity in this newly-established subsidiary and has included it in the scope of consolidation since March 2017.
In April 2017, Top Increase, thecompany’s third-tier subsidiary, established 37 Games company. The company holds100% of the share in this newly-established subsidiary and has included it in the scope of consolidation since April 2017.
In August 2017, Jiangsu Aurora, thecompany’s second-tier subsidiary, established Guangzhou Jisheng. The company holds80% of the share in this newly-established subsidiary and has included it in the scope of consolidation since August 2017.
(7) Significant changes or adjustments of theCompany’s businesses, products, or services in the reporting period
□ Applicable√ Not applicable
(8) Major customers and suppliers
Major customers
||
|-|
|Total sales amount of top 5 customers (yuan)|
|Proportion of the total sales amount of top 5 customersin annual gross sales|
|Proportion of related-party sales amount in salesamount of top 5 customers in annual gross sales|

Information of top 5 customers
|||||
|-|-|-|-|
|||Sales amount (yuan)||
|S/N|Name of Customer||Proportion in annual gross sales|
|1|No. 1|883,130,692.89|14.27%|
|2|No. 2|698,031,405.69|11.28%|
|3|No. 3|367,434,362.57|5.94%|
|4|No. 4|328,889,590.32|5.31%|
|5|No. 5|159,619,183.11|2.58%|
|Total|--|2,437,105,234.58|39.38%|

 Other information of the major customers
□ Applicable√ Not applicable
Major suppliers
|||
|-|-|
|Total purchase amount of top 5 suppliers (yuan)|570,457,026.86|
|Total purchase amount of top 5 suppliers in annualgross purchases|29.66%|
|Proportion of related-party purchase amount in thepurchase amount of top 5 suppliers in annual gross|0.00%|

2017 Annual Report
||
|-|
|purchases|

Information of top 5 suppliers
|||||
|-|-|-|-|
|S/N|Name of supplier|Purchase amount (yuan)|Proportion in annual gross purchases|
|1|No. 1|259,137,583.55|13.47%|
|2|No. 2|131,887,811.91|6.86%|
|3|No. 3|63,933,766.07|3.32%|
|4|No. 4|61,580,079.92|3.20%|
|5|No. 5|53,917,785.41|2.80%|
|Total|--|570,457,026.86|29.66%|

 Other information of the major suppliers
□ Applicable√ Not applicable
3. Expenses
Unit: yuan
||||||
|-|-|-|-|-|
||||Year-on-year||
||2017|2016||Description of significant changes|
||||increase (decrease)||
||1,908,207,466.32|1,607,745,221.19||The variation mainly results from the|
|||||increase in internet traffic charges in|
|||||the reporting period. For details, see|
|Operating expenses|||18.69%|the Note 41 Operating Expenses in the|
|||||Notes to the Consolidated Financial|
|||||Statements in part II of Section V|
|||||Financial Report.|
||776,659,541.86|514,933,615.17||The variation mainly results from|
|||||increase in R&D costs and share-based|
|||||payment expense in the reporting|
|General and||||period. For details, see the Note 42|
||||50.83%||
|administrative expenses||||General and Administrative Expenses|
|||||in the Notes to the Consolidated|
|||||Financial Statements in part II of|
|||||Section V Financial Report.|
||28,555,783.27|-5,460,395.61||The variation mainly results from the|
|||||increase in interest expenditure due to|
|||||additional bank loans and great|
|Financial expenses|||-622.96%||
|||||exchange losses arising from|
|||||depreciation of the U.S. dollar against|
|||||RMB in the reporting period. The|

2017 Annual Report
||
|-|
|variation in the prior year mainly|
|resulted from exchange gains. For|
|details, see the Note 43 Financial|
|Expenses in the Notes to the|
|Consolidated Financial Statements in|
|part II of Section V Financial Report.|

 4. Investment in research& development
√ Applicable□ Not applicable
i. Mobile GameR&D Projects
Project 1: MU (Mobile Game)
MU is an ARPG mobile game that is licensed by Webzen with the theme of miracle client game. With the support of the Unity3D engine, the game not only allows players to experience the classic on-hook treasure hunting, but also restore partial dress-up and a variety of magnificent streamer effects of equipment.
Project 2: Search for Gold (Huang Jin Cai Jue)
Search for Gold (Huang Jin Cai Jue) is a magical ARPG mobile game. The triad of heaven, human and demons constitutes a huge world view. Warriors, wizards and Taoist priests are destined to fight against the demons and recast the heaven! The game not only authentically presents the classic PK, but also creates unique gameplay including capture of the BOSS as a fight pet, cross-server winning and awarding of gold ingots for equipment recovery. It strives to present players with a wonderful world of games. Project 3: Ling Yu
Ling Yu is a 2D H5 mobile game with a theme of immortal cultivation. It's easy to hang up for treasure hunting without burden, which is unique and breaks the traditional features of games. Different choices made by players in the game will affect their own characters, while changing the game's storyline. When the character reaches a certain level, the player will activate the hidden immortal and gain the exclusive and powerful secrets specially for immortals, making the player a unique immortal.
Project 4: Fighter of the Destiny
Fighter of the Destiny is adapted from a novel of the same name from Mao Ni, an author of Tencent Literature. It is a MMORPG mobile game developed based on the Unity engine. It perfectly restores the characters, plots and scenes of the TV series. Chen Changsheng, Xu Yourong and other partners accompany the players to practice, fight against the destiny and change their lives in the game; Qing Gong of four levels in the game help players free to soar the eastern continent. Abundant partners, implements and other game features help players practice and break the predicaments. Furthermore, family, couples and other rich social gameplay allow players to find a good partner to practice together.
Project 5: H-Game
H-Game is an anime IP-based 3D ARPG mobile game based on the Unity engine. It is rich in characters, has a strong sense of
fighting and exquisitely reproduces the feelings of adventure in the fantasy world. It satisfies most of the players for experiencing the
story and is also integrated with team cooperation, wrestle competition and fighting against people, which greatly enhance the fun of
the game.
2017 Annual Report Project 6: Mobile Game T
Mobile Game T is a competitive game of top-view team shooting based on Unity3D. The game brings brand-new 5v5PVP gameplay through exquisite levels and hero designs, so that players can experience the hot shooting fun through the top-level view. The game adopts the next-generation art production method to present cartoons and powerful scenes and characters, magnifies the drama experience of some of the core battles, and combine multiple layers of light and shadow effects, striving to provide players with a sense of reality and stunning visual experience.
Project 7: Mobile Game F
Mobile Game F is a competitive and turn-based 3D card games featuring next-generation screen effects and fighting theme developed based on the Unity3D engine. TheR&D team has made a deep customization of the Unity3D engine, and developed specifications for art resources and development standards in line with the future high-quality mobile game market based on the project type. The game fully exploitsplayers’ free and fragmented time. It solves tedious repetitive operation behaviors with humanized system design such as "mopping-up" and automatic fighting. It always focusesplayers’ interest on the core gameplay, allowing the players to obtain the best gaming experience within a limited time.
Project 8: Legend Mobile Game Y
Legend Mobile Game Y is produced by the company'sR&D team. The classic combination battle of warriors, wizards and Taoist priests is reproduced in the game, following the grand and free world outlook and iterative update of the technical level, so that the PK is more exciting and the siege is more refreshing, with rich and varied BOSS gameplay and a wide variety of luxury equipment. In addition, more layers of remodeling of screen effects and 3D modeling of characters give more freedom of battle experience, satisfying the warriors' pursuit of the game.
Project 9: Project X - Legend H5
Project X - Legend H5 is an ARPG mobile game independently researched and developed by the Company. The screen effects are based on nostalgic realism. It reproduces the classic gameplay including killing the BOSS and PK of miracle games. The brand new placement design, creative combination battle of warriors, wizards and Taoist priests, and the special three-in-one ring help the players to easily upgrade and enjoy PK.
ii. Browser GameR&D Projects
Project 1: Tu Long Rong Yao
Tu Long Rong Yao is an ARPG browser game with the theme of oriental magical realism. The game offers three kinds of occupations for players to choose from. Each profession has its own unique skills and distinctive style equipment to play its own role in the classic system gameplay, giving players a different gaming experience. The game has exquisite scenes, realistic sound effects, gorgeous skill effects and various forms of monsters and characters, allowing players to enjoy the visual and auditory effects while playing the game.
Project 2: Xue Meng Rong Yao
Xue Meng Rong Yao is a 3D MMOARPG browser game that is authorized by NCSOFT Lineage II of South Korea. It successfully restores the classic gameplay and top-level game screen effects of the original client game. The advanced settings and transition of the professions, creation of the equipment and stunning fights fully guarantee the fighting fun of the original client game.
Project 2: MU X
2017 Annual Report MU X is a miracle-type 3D ARPG browser game that uses advanced self-developed 3D game engine to restore the miraculous images of miracle-type games. While continuing to maintain the classic gameplay of miracle-type games, it also features cross-server free trade, multiple roles and other industry-leading and innovative gameplay.
Investment in research& development
|||||
|-|-|-|-|
||2017|2016|Changes in proportion|
|Number of R&D personnel||||
||1, 461|1,004|45.52%|
|(person)||||
|Proportion of R&D personnel|54.05%|45.72%|8.33%|
|Amount of R&D investment||||
||439,094,559.01|317,670,122.59|38.22%|
|(yuan)||||
|Proportion of R&D investment||||
||7.09%|6.05%|1.04%|
|in operating revenue||||
|Amount of capitalized R&D||||
||7,663,076.06|7,073,030.69|8.34%|
|investment (yuan)||||
|Proportion of capitalized R&D||||
||1.75%|2.23%|-0.48%|
|investment in R&D investment||||

Reason for significant changes in the proportion of totalR&D investment in operating revenue compared to the previous year□ Applicable√ Not applicable
Reasons for significant changes in capitalization rate ofR&D investment and their rationality
□ Applicable√ Not applicable
5. Cash flow
Unit: yuan
|||||
|-|-|-|-|
||||Year-on-year increase|
|Item|2017|2016||
||||(decrease)|
|Subtotal of cash inflows from|6, 764,509,897.17|5,304,046,606.31||
||||27. 53%|
|operating activities||||
|Subtotal of cash outflows from|4, 932,613,968.87|4,252,107,028.48||
||||16. 00%|
|operating activities||||
|Net cash flow from operating|1, 831,895,928.30|1,051,939,577.83||
||||74.14%|
|activities||||
|Subtotal of cash inflows from|2, 567,482,176.55|872,586,555.02||
||||194.24%|
|investment activities||||
|Subtotal of cash outflows from|3, 935,420,406.47|2,390,119,798.33||
||||64.65%|
|investment activities||||

2017 Annual Report
|||||
|-|-|-|-|
|Net cash flow from investment|-1, 367,938,229.92|-1,517,533,243.31||
||||-3.98%|
|activities||||
|Subtotal of cash inflows from|1, 344,262,496.88|449,463,250.61||
||||199.08%|
|financing activities||||
|Subtotal of cash outflows from|1,034,016,584.46|280,642,645.46||
||||268.45%|
|financing activities||||
|Net cash flow from financing|310,245,912.42|168,820,605.15||
||||83.77%|
|activities||||
|Net increase of cash and cash|761,697,925.86|-286,575,995.03||
||||-365.79%|
|equivalents||||

Main factors affecting significant changes year on year in relevant data
√Applicable□ Not applicable
1. The net cash flow from operating activities increased by74.14%, mainly due to the increase in operating revenue during the reporting period.
2. The subtotal of cash inflows from investing activities increased by194.24%, mainly due to the increase in the amount of redemption of financial products by the company, the sale of equity of Shanghai Zheyuan Culture& Media Co., Ltd. and Tianjin Zilong Jidian Interactive Entertainment Co., Ltd.
3. The subtotal of cash outflows from investing activities increased by64.65%, mainly due to the increase in the purchase of financial products by the company and the prepayment for the purchase of office buildings and parking spaces.
4. The subtotal of cash inflows from financing activities increased by199.08%, mainly due to the increase in bank loans and share issuance for financing during the reporting period.
5. The subtotal of cash outflows from financing activities increased by268.45%, mainly due to the increase in repayment of bank loans due by the Company, increase in payment of dividends, and the payment for acquisition of minority equity during the reporting period.
Reasons for significant discrepancy between the net cash flow from operating activities and net income of the current year in the reporting period.
□ Applicable√ Not applicable
III. Analysis of Non-Principal Business
√ Applicable□ Not applicable
Unit: yuan
||||||
|-|-|-|-|-|
|||Proportion in Pre-tax|||
||Amount||Reasons for formation|Sustainable or not|
|||incomes|||
||||Mainly the investment income||
|Investment income|256,030,245.92|13.36%||No|
||||from disposal of equity||

2017 Annual Report
||||||
|-|-|-|-|-|
||||investment and performance||
||||compensation||
||||Mainly the impairment loss||
|Impairment loss on|||||
||351,295,883.79|18.33%|on goodwill of Shanghai|No|
|assets|||||
||||Mokun .||
||||Mainly the performance||
||||compensation recognized for||
|Non-operating|||||
||403,057,922.86|21.03%|the failure of Shanghai|No|
|income|||||
||||Mokun to fulfil its||
||||performance commitments||
||||Mainly the VAT refunds and||
|Other income|111,259,077.18|5.80%|other government grants|Yes|
||||related to daily operations||

IV. Analysis of Assets and Liabilities
1. Significant changes in composition of assets
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
||December 31,2017||December 31,2016||Increase||
||||||and||
||||||decrease||
|||Proportion in||Proportion in||Description of significant changes|
||Amount||Amount||in||
|||total assets||total assets|||
||||||proportio||
||||||n||
||1,580,910,931.98||819,213,006.12|||The proportion of monetary funds in|
|||||||total assets on December 31, 2017|
|||||||increased by 4.43% from that of|
|Monetary funds||17.26%||12.83%|4.43%|December 31, 2016, mainly due to the|
|||||||increase in cash inflow generated by|
|||||||the company's operating activities|
|||||||during the reporting period.|
||884,909,012.77||815,645,754.68|||The proportion of accounts receivable|
|||||||in total assets on December 31, 2017|
|||||||decreased by -3.11% from that of|
|Accounts||||||December 31, 2016, mainly due to an|
|||9.66%||12.77%|-3.11%||
|receivable||||||increase in total assets arising from the|
|||||||accelerated collection of accounts|
|||||||receivable during the reporting period|
|||||||and increase in total assets arising from|

2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||||||increase in other assets such as|
|||||||goodwill and other non-current assets.|
|||||||.|
||101,828,085.31||71,481,925.54|||No major changes of the proportion of|
|||||||inventories in total assets on December|
|Inventory||1.11%||1.12%|-0.01%||
|||||||31, 2017 from that of December 31,|
|||||||2016.|
|Investment real|||||||
|||0.00%||0.00%|0.00%||
|estate|||||||
||376,972,832.08||786,567,839.80|||The proportion of long-term equity|
|||||||investments in total assets on|
|||||||December 31, 2017 decreased by|
|Long-term equity||||||-8.20% from that of December 31,|
|||4.12%||12.32%|-8.20%||
|investment||||||2016, mainly due to the inclusion of|
|||||||Shanghai Mocun, the original JV of the|
|||||||Company, in the consolidation scope|
|||||||within the reporting period.|
||292,395,887.17||271,491,379.50|||The proportion of fixed assets in total|
|||||||assets on December 31, 2017 decreased|
|||||||by -1.06% from that of December 31,|
|Fixed assets||3.19%||4.25%|-1.06%|2016, mainly due to an increase in total|
|||||||assets arising from increase in assets|
|||||||such as goodwill and other non-current|
|||||||assets.|
||50,672,878.42||31,078,391.88|||No major changes of the proportion of|
|Construction in||||||construction in process in total assets|
|||0.55%||0.49%|0.06%||
|process||||||on December 31, 2017 from that of|
|||||||December 31, 2016.|
||372,054,500.00||372,878,500.00|||The proportion of short-term loans in|
|||||||total assets on December 31, 2017|
|||||||decreased by -1.78% from that of|
|Short-term loans||4.06%||5.84%|-1.78%|December 31, 2016, mainly due to an|
|||||||increase in total assets arising from|
|||||||increase in assets such as goodwill and|
|||||||other non-current assets.|
||310,775,272.06|||||The proportion of newly-added|
|||||||long-term loans in total assets|
|Long-term loans||3.39%||0.00%|3.39%|accounted for 3.39% by December 31,|
|||||||2017, mainly due to the new mortgage|
|||||||borrowings for purchase of office|

2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||||||space.|
|||||||The proportion of the other non-current|
|||||||assets in total assets on December 31,|
|||||||2017 increased by 2.78% from that of|
|||||||December 31, 2016, mainly due to the|
|Other non-current|592,189,323.9||||||
|||6.46%|234,948,261.89|3.68%|2.78%|Company’s recognition of performance|
|assets|9||||||
|||||||compensation related to the failure of|
|||||||Shanghai Mokun, acquired by the|
|||||||Company during the reporting period,|
|||||||to fulfil its performance commitments.|
|||||||The proportion of goodwill in total|
|||||||assets on December 31, 2017 increased|
||2,540,312,996.||1,579,976,961.|||by 2.99% from that of December 31,|
|Goodwill||27.73%||24.74%|2.99%||
||76||87|||2016, mainly due to recognition of the|
|||||||goodwill generated by the|
|||||||consolidation of Shanghai Mokun.|
|||||||The proportion of other non-current|
|||||||assets in total assets on December 31,|
|Other non-current|914,263,967.1|||||2017 increased by 4.96% from that of|
|||9.98%|320,590,794.35|5.02%|4.96%||
|assets|6|||||December 31, 2016, mainly due to|
|||||||prepayment for purchase of office|
|||||||buildings and parking spaces.|
|||||||The proportion of accounts payable in|
|||||||total assets on December 31, 2017|
|||||||decreased by -2.87% from that of|
||741,792,973.3||||||
|Accounts payable||8.10%|700,713,118.00|10.97%|-2.87%|December 31, 2016, mainly due to an|
||3||||||
|||||||increase in total assets arising from|
|||||||increase in assets such as goodwill and|
|||||||other non-current assets.|
|||||||The proportion of other payables in|
|||||||total assets on December 31, 2017|
|Other payables|61,572,020.26|0.67%|293,166,635.18|4.59%|-3.92%|decreased by -3.92% from that of|
|||||||December 31, 2016, mainly due to|
|||||||decrease of investment payable.|

 2. Assets and liabilities measured at fair values
√ Applicable□ Not applicable
Unit: yuan
|||||||||
|-|-|-|-|-|-|-|-|
|Item|Beginning|Current profits|Cumulative|Impairment|Purchase|Sales amount in|Ending|

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||balance|and losses from|changes in fair|accrued in|amount in|current period|balance|
|||variation in fair|value recorded|current period|current period|||
|||value|in profits and|||||
||||gains|||||
|Financial assets||||||||
|3. Financial||||||||
||||||||57,541,101.9|
|assets available|5,445,472.73||-24,337,628.17||80,189,997.98|3,756,740.62||
||||||||2|
|for sale||||||||
|Total of the|||||||57,541,101.9|
||5,445,472.73||-24,337,628.17||80,189,997.98|3,756,740.62||
|above|||||||2|

 Is there significant change in the measurement attribute of theCompany’s main assets in the reporting period?
□ Yes√ No
3. Limitation of assets rights as of the end of the reporting period
The Company is free from any limitation of assets right as of the end of the reporting period.
V. Analysis of Investments
1. General
√ Applicable□ Not applicable
||||
|-|-|-|
|Investment amount in the reporting period|Investment amount in the same period of||
|||Variation|
|(yuan)|the previous year (yuan)||
|2,401,535,373.99|1,426,943,171.05|68.30%|

 2. Important equity investment in the reporting period
√ Applicable□ Not applicable
Unit: yuan
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Investmentmethod|||||||||Investm||||
|Name|||||||||Progre||||||
||||||||||||ent||||
|of the|Princip|||||||Types|ss as of|||Involve||Disclos|
||||Invest|Shareh|||Invest|||Antici|profit||Disclosu||
|compan|al||||Capital|||of|the|||ment in||ure|
||||ment|olding||Partner|ment|||pated|and loss||re date||
|y|busines||||source|||product|balanc|||litigatio||index|
||||amount|ratio|||horizon|||income|in the||(if any)||
|investe|s|||||||s|e sheet|||n||(if any)|
||||||||||||current||||
|d in|||||||||date||||||
||||||||||||period||||
|Shangh|Technic|Acquisi|952,74||Share||||Compl||||||
|||||68.43%||No|Long|Game|||-24,826,|No|||
|ai|al||9,968.6||payme||||eted||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Mokun|develop|tion|9|nt and|term|R&D|industr|452.48|
||ment|||private|||ial and||
||and|||offerin|||comme||
||services|||g|||rcial||
||in the||||||change||
||fields of||||||s`||
||digital||||||||
||technol||||||||
||ogy and||||||||
||comput||||||||
||er||||||||
||science;||||||||
||comput||||||||
||er||||||||
||network||||||||
||enginee||||||||
||ring;||||||||
||comput||||||||
||er||||||||
||system||||||||
||integrat||||||||
||ion;||||||||
||corpora||||||||
||te||||||||
||marketi||||||||
||ng||||||||
||plannin||||||||
||g; sales||||||||
||of||||||||
||digital||||||||
||product||||||||
||s,||||||||
||comput||||||||
||er||||||||
||hardwar||||||||
||e and||||||||
||softwar||||||||
||e,||||||||
||periphe||||||||
||ral||||||||
||equipm||||||||
||ent,||||||||

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||commu|||||||||||
||nication|||||||||||
||equipm|||||||||||
||ent,|||||||||||
||commu|||||||||||
||nication|||||||||||
||equipm|||||||||||
||ent, and|||||||||||
||electron|||||||||||
||ic|||||||||||
||product|||||||||||
||s;|||||||||||
||design|||||||||||
||of|||||||||||
||comput|||||||||||
||er|||||||||||
||hardwar|||||||||||
||e and|||||||||||
||softwar|||||||||||
||e; data|||||||||||
||processi|||||||||||
||ng|||||||||||
||services|||||||||||
||; import|||||||||||
||and|||||||||||
||export|||||||||||
||busines|||||||||||
||s of|||||||||||
||goods|||||||||||
||and|||||||||||
||technol|||||||||||
||ogy.|||||||||||
||Technic|||||||||||
||al||||||||Compl|||
||develop||||Share|||Game|eted|||
||ment,||||payme|||distribu|industr|||
|Jiangsu|||254,79|||||||||
||transfer|Acquisi||--49.00|nt and||Long|tion|ial and|19,165,2||
|Zhimin|||9,990.8|||No|||||No|
||and|tion||%|private||term|and|comme|38.82||
|g|||0|||||||||
||consulti||||offerin|||operati|rcial|||
||ng||||g|||on|change|||
||services||||||||s|||
||in the|||||||||||

2017 Annual Report
||
|-|
|fields of|
|network|
|technol|
|ogy and|
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|technol|
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|informa|
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2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||network|||||||||||
||(includi|||||||||||
||ng|||||||||||
||distribu|||||||||||
||tion of|||||||||||
||virtual|||||||||||
||currenc|||||||||||
||y of|||||||||||
||online|||||||||||
||games).|||||||||||
||Cultural|||||||||||
||industry|||||||||||
||investm|||||||||||
||ent on|||||||||||
||the|||||||||||
||Internet|||||||||||
||, film|||||||||||
||and|||||||||||
||televisi|||||||||||
||on|||||||||||
|Yangzh||||||||||||
||investm|||||Shenzh||||||
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||ent|||||en||||||
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||busines|||||Orienta|||Compl|||
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||investm|||||Fortune||Invest|industr|||
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||manage||000.00||tary|Invest|term|manage|comme|||
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||investm|||||||||||

2017 Annual Report
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||ent|||||||||||||
||busines|||||||||||||
||s|||||||||||||
||permitt|||||||||||||
||ed by|||||||||||||
||laws|||||||||||||
||and|||||||||||||
||adminis|||||||||||||
||trative|||||||||||||
||regulati|||||||||||||
||ons.|||||||||||||
||Technic|||||||||||||
||al|||||||||||||
||develop|||||||||||||
||ment,|||||||||||||
||transfer,|||||||||||||
||consulti|||||||||||||
||ng and|||||||||||||
||services||||||||||||http://w|
||in the||||||||||||ww.cnin|
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||comput||||||||||||cn/cninf|
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||science||||||||||||isclosur|
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||and|||||||Game|||||e/fulltex|
|XD|||||||||industr|||||
||technol||100,05|||||R&D||||Februar|t/bulleti|
|Networ|||||Proprie||Long||ial and|||||
||ogy and|Other|0,000.0|2.38%||No||and||0.00|No|y 06,|n_detail|
|k Co.,|||||tary||term||comme|||||
||network||0|||||distribu||||2017|/true/12|
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||ogy;||||||||||||44?anno|
||||||||||s`|||||
||sales of||||||||||||unceTi|
||comput||||||||||||me=201|
||ers,||||||||||||7-02-06|
||softwar||||||||||||%2007:|
||e and||||||||||||55|
||auxiliar|||||||||||||
||y|||||||||||||
||equipm|||||||||||||
||ent|||||||||||||
||(except|||||||||||||
||for|||||||||||||
||special|||||||||||||

2017 Annual Report
||
|-|
|product|
|s for|
|informa|
|tion|
|system|
|security|
|of|
|comput|
|ers);|
|comput|
|er|
|system|
|integrat|
|ion;|
|web|
|design;|
|softwar|
|e|
|develop|
|ment;|
|design ,|
|product|
|ion,|
|agency|
|services|
|and|
|publishi|
|ng of|
|various|
|types of|
|advertis|
|ements;|
|investm|
|ent|
|manage|
|ment;|
|busines|
|s|
|consulti|
|ng|
|(except|
|for|

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||brokera|||||||||||
||ge);|||||||||||
||clothing|||||||||||
||sales;|||||||||||
||telecom|||||||||||
||municat|||||||||||
||ions|||||||||||
||busines|||||||||||
||s.|||||||||||
||Product|||||||||||
||ion and|||||||||||
||distribu|||||||||||
||tion of|||||||||||
||broadca|||||||||||
||sting,|||||||||||
||film,|||||||||||
||televisi|||||||||||
||on and|||||||||||
||music|||||||||||
||progra|||||||||||
||ms;|||||||||||
||corpora|||||||||||
||||||||||Compl|||
|Zhongn|te|||||||||||
||||||||||eted|||
|an|image|||||||||||
||||||||||industr|||
|Hong|plannin|||||||Culture||||
||||80,189,||Proprie||Long||ial and|||
|Culture|g;|Other||0.52%||No||and||0.00|No|
||||997.98||tary||term||comme|||
|Group|organiz|||||||media||||
||||||||||rcial|||
|Co.,|ation of|||||||||||
||||||||||change|||
|Ltd.|cultural|||||||||||
||||||||||s|||
||and|||||||||||
||artistic|||||||||||
||exchan|||||||||||
||ge|||||||||||
||activitie|||||||||||
||s;|||||||||||
||technol|||||||||||
||ogy|||||||||||
||develop|||||||||||
||ment|||||||||||
||and|||||||||||
||sales of|||||||||||
||mobile|||||||||||

2017 Annual Report
||
|-|
|phones,|
|comput|
|er|
|hardwar|
|e and|
|softwar|
|e,|
|ancillar|
|y|
|equipm|
|ent,|
|electron|
|ic|
|product|
|s, and|
|commu|
|nication|
|product|
|s;|
|design,|
|product|
|ion,|
|agency|
|services|
|and|
|distribu|
|tion of|
|various|
|types of|
|advertis|
|ements;|
|confere|
|nce and|
|etiquett|
|e|
|services|
|;|
|investm|
|ent in|
|foreign|
|countrie|
|s using|

2017 Annual Report
||
|-|
|its own|
|funds;|
|equity|
|investm|
|ent;|
|educati|
|onal|
|informa|
|tion|
|consult|
|ation|
|(excludi|
|ng|
|interme|
|diary|
|services|
|for|
|self-fun|
|ded|
|oversea|
|s|
|study);|
|manufa|
|cturing|
|of pipe|
|fittings,|
|steel|
|pipes,|
|mechan|
|ical|
|parts,|
|expansi|
|on|
|joints,|
|prefabri|
|cated|
|and|
|directly|
|buried|
|insulati|
|on|
|pipes;|

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Propriet|||||||||||
||ary|||||||||||
||trading|||||||||||
||and|||||||||||
||agency|||||||||||
||services|||||||||||
||for|||||||||||
||import|||||||||||
||and|||||||||||
||export|||||||||||
||of|||||||||||
||various|||||||||||
||types of|||||||||||
||goods|||||||||||
||and|||||||||||
||technol|||||||||||
||ogies|||||||||||
||(except|||||||||||
||for|||||||||||
||product|||||||||||
||s and|||||||||||
||technol|||||||||||
||ogies|||||||||||
||that the|||||||||||
||state|||||||||||
||restricts|||||||||||
||enterpri|||||||||||
||ses to|||||||||||
||operate|||||||||||
||or are|||||||||||
||prohibit|||||||||||
||ed from|||||||||||
||import|||||||||||
||and|||||||||||
||export)|||||||||||
|Guangz|Product||||||||Compl|||
|hou|ion of||||||||eted|||
|||||||||Invest||||
|Haojiah|radio||||||||industr|||
||||5,000,0||Proprie||Long|ment||||
|uo Yiqi|and|Other||20.00%||No|||ial and|0.00|No|
||||00.00||tary||term|manage||||
|Media|televisi||||||||comme|||
|||||||||ment||||
|Partners|on||||||||rcial|||
|hip|progra||||||||change|||

2017 Annual Report
||||
|-|-|-|
|(Limite|ms|s`|
|d|(specifi||
|Partners|c scope||
|hip)|of||
||busines||
||s is||
||subject||
||to the||
||Permit||
||for||
||Product||
||ion and||
||Operati||
||on of||
||Radio||
||and||
||Televisi||
||on||
||Progra||
||ms);||
||advertis||
||ing||
||busines||
||s;||
||movie||
||and||
||televisi||
||on||
||agency||
||services||
||;||
||organiz||
||ation||
||and||
||plannin||
||g||
||services||
||for||
||large-sc||
||ale||
||events||
||(large-s||

2017 Annual Report
||
|-|
|cale|
|events|
|refer to|
|parties,|
|sports|
|games,|
|celebrat|
|ions, art|
|and|
|model|
|contests|
|, art|
|festival|
|s, film|
|festival|
|s,|
|public|
|welfare|
|perform|
|ances,|
|exhibiti|
|ons, etc.|
|Activiti|
|es that|
|are|
|subject|
|to|
|special|
|examin|
|ation|
|and|
|approva|
|l may|
|only be|
|operate|
|d after|
|acquisit|
|ion of|
|relevant|
|approva|
|l;|
|cultural|

2017 Annual Report
||
|-|
|and|
|artistic|
|consulti|
|ng|
|services|
|;|
|plannin|
|g and|
|creative|
|services|
|;|
|plannin|
|g of|
|non-pro|
|fit|
|cultural|
|activitie|
|s|
|particip|
|ated by|
|the|
|masses|
|includin|
|g|
|literary|
|perform|
|ances|
|and|
|competi|
|tions;|
|investm|
|ent with|
|the|
|compan|
|y's own|
|capital;|
|investm|
|ent|
|consulti|
|ng|
|services|
|;|

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||busines|||||||||||
||s|||||||||||
||manage|||||||||||
||ment|||||||||||
||consulti|||||||||||
||ng|||||||||||
||services|||||||||||
||;|||||||||||
||Comput|||||||||||
||er|||||||||||
||system|||||||||||
||integrat|||||||||||
||ion;|||||||||||
||researc|||||||||||
||h and|||||||||||
||develop|||||||||||
||ment,|||||||||||
||sales of|||||||||||
||comput|||||||||||
||er|||||||||||
||hardwar|||||||||||
||e and||||||||Compl|||
|Chengd|softwar||||||||eted|||
|u Modu|e and||||||||industr|||
|||Capital||||||||||
|Technol|electron||12,000,||Proprie||Long|Game|ial and|-1,030,0||
|||increas||20.00%||No|||||No|
|ogy|ic||000.00||tary||term|R&D|comme|25.53||
|||e||||||||||
|Co.,|product||||||||rcial|||
|Ltd.|s;||||||||change|||
||comput||||||||s|||
||er|||||||||||
||network|||||||||||
||technol|||||||||||
||ogy|||||||||||
||services|||||||||||
||; basic|||||||||||
||softwar|||||||||||
||e|||||||||||
||services|||||||||||
||;|||||||||||
||applicat|||||||||||
||ion|||||||||||
||softwar|||||||||||

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||e|||||||||||
||services|||||||||||
||; import|||||||||||
||and|||||||||||
||export|||||||||||
||of|||||||||||
||goods|||||||||||
||and|||||||||||
||technol|||||||||||
||ogy;|||||||||||
||leasing|||||||||||
||of|||||||||||
||network|||||||||||
||connect|||||||||||
||ion|||||||||||
||equipm|||||||||||
||ent,|||||||||||
||furnitur|||||||||||
||e and|||||||||||
||househ|||||||||||
||old|||||||||||
||applian|||||||||||
||ces.|||||||||||
||Researc|||||||||||
||h and|||||||||||
||develop|||||||||||
||ment,|||||||||||
||sales of|||||||||||
||comput|||||||||||
||||||||||Compl|||
||er|||||||||||
|Chengd|||||||||eted|||
||hardwar|||||||||||
|u Mofei|||||||||industr|||
||e and|Capital||||||||||
|Technol|||12,000,||Proprie||Long|Game|ial and|-1,037,5||
||softwar|increas||20.00%||No|||||No|
|ogy|||000.00||tary||term|R&D|comme|01.22||
||e and|e||||||||||
|Co.,|||||||||rcial|||
||electron|||||||||||
|Ltd.|||||||||change|||
||ic|||||||||||
||||||||||s|||
||product|||||||||||
||s;|||||||||||
||services|||||||||||
||,|||||||||||
||develop|||||||||||
||ment,|||||||||||

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||promoti|||||||||||
||on and|||||||||||
||transfer|||||||||||
||of|||||||||||
||comput|||||||||||
||er|||||||||||
||network|||||||||||
||technol|||||||||||
||ogy;|||||||||||
||comput|||||||||||
||er|||||||||||
||system|||||||||||
||integrat|||||||||||
||ion;|||||||||||
||basic|||||||||||
||softwar|||||||||||
||e|||||||||||
||services|||||||||||
||;|||||||||||
||applicat|||||||||||
||ion|||||||||||
||softwar|||||||||||
||e|||||||||||
||services|||||||||||
||;|||||||||||
||technol|||||||||||
||ogy|||||||||||
||import|||||||||||
||and|||||||||||
||export;|||||||||||
||leasing|||||||||||
||of|||||||||||
||furnitur|||||||||||
||e and|||||||||||
||househ|||||||||||
||old|||||||||||
||applian|||||||||||
||ces.|||||||||||
|Shangh|Investm|||||||Invest|Compl|||
|||Newly||||||||||
|ai Fuhai|ent||3,000,0||Proprie||Long|ment|eted|||
|||establis||30.00%||No||||419.01|No|
|Sanqi|manage||00.00||tary||term|manage|industr|||
|||hed||||||||||
|Asset|ment,|||||||ment|ial and|||

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Manage|investm||||||||comme|||
|ment|ent||||||||rcial|||
|Co.,|consulti||||||||change|||
|Ltd.|ng,||||||||s|||
||asset|||||||||||
||manage|||||||||||
||ment,|||||||||||
||busines|||||||||||
||s|||||||||||
||manage|||||||||||
||ment|||||||||||
||consulti|||||||||||
||ng,|||||||||||
||busines|||||||||||
||s|||||||||||
||consulti|||||||||||
||ng,|||||||||||
||financia|||||||||||
||l|||||||||||
||consulti|||||||||||
||ng.|||||||||||
||Technic|||||||||||
||al|||||||||||
||develop|||||||||||
||ment,|||||||||||
||transfer,|||||||||||
||consulti|||||||||||
||ng and|||||||||||
||||||||||Compl|||
||services|||||||||||
|Najia|||||||||eted|||
||in the|||||||||||
|Technol|||||||||industr|||
||fields of|Newly||||||||||
|ogy|||40,000,||Proprie||Long|Game|ial and|||
||digital|establis||7.20%||No||||0.00|No|
|(Shenzh|||000.00||tary||term|R&D|comme|||
||technol|hed||||||||||
|en) Co.,|||||||||rcial|||
||ogy and|||||||||||
|Ltd.|||||||||change|||
||comput|||||||||||
||||||||||s|||
||er|||||||||||
||science|||||||||||
||and|||||||||||
||technol|||||||||||
||ogy;|||||||||||
||comput|||||||||||
||er|||||||||||

2017 Annual Report
||
|-|
|network|
|enginee|
|ring;|
|comput|
|er|
|system|
|integrat|
|ion;|
|design|
|of|
|comput|
|er|
|softwar|
|e and|
|hardwar|
|e; data|
|processi|
|ng|
|services|
|;|
|marketi|
|ng|
|plannin|
|g; sales|
|of|
|comput|
|er|
|hardwar|
|e and|
|softwar|
|e and|
|auxiliar|
|y|
|equipm|
|ent,|
|telecom|
|municat|
|ions|
|equipm|
|ent and|
|electron|
|ic|

2017 Annual Report
||
|-|
|product|
|s, and|
|import|
|and|
|export|
|of|
|goods|
|and|
|technol|
|ogies.|
|Adverti|
|sing|
|busines|
|s; flat|
|and|
|three-di|
|mensio|
|nal|
|design;|
|web|
|design;|
|researc|
|h and|
|develop|
|ment,|
|technic|
|al|
|mainten|
|ance of|
|social|
|network|
|ing|
|platfor|
|ms;|
|sales of|
|toys,|
|artware|
|(excludi|
|ng gold|
|and|
|silver|
|jewelry|

2017 Annual Report
||
|-|
|),|
|digital|
|electron|
|ic|
|product|
|s,|
|statione|
|ry,|
|plastic|
|product|
|s and|
|hardwar|
|e|
|product|
|s.|
|Design|
|and|
|technic|
|al|
|consulti|
|ng of|
|animati|
|on|
|product|
|s.|
|(Items|
|that are|
|subject|
|to|
|approva|
|l|
|accordi|
|ng to|
|the law|
|may|
|only be|
|carried|
|out|
|after|
|approva|
|l by the|
|relevant|

2017 Annual Report
||
|-|
|departm|
|ent) ^|
|Product|
|ion of|
|radio|
|and|
|televisi|
|on|
|progra|
|ms;|
|film|
|product|
|ion;|
|manufa|
|cturing|
|and|
|processi|
|ng of|
|toys,|
|artware|
|(excludi|
|ng gold|
|and|
|silver|
|jewelry|
|),|
|digital|
|electron|
|ic|
|product|
|s,|
|statione|
|ry,|
|plastic|
|product|
|s and|
|hardwar|
|e|
|product|
|s;|
|publicat|
|ion|

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||product|||||||||||
||ion and|||||||||||
||distribu|||||||||||
||tion;|||||||||||
||online|||||||||||
||game|||||||||||
||product|||||||||||
||ion.|||||||||||
||Technic|||||||||||
||al|||||||||||
||develop|||||||||||
||ment,|||||||||||
||transfer,|||||||||||
||consulti|||||||||||
||ng and|||||||||||
||services|||||||||||
||in the|||||||||||
||fields of|||||||||||
||network|||||||||||
||technol|||||||||||
||ogy and|||||||||||
|Shangh||||||||||||
||comput||||||||Compl|||
|ai||||||||||||
||er||||||||eted|||
|11wan||||||||||||
||technol||||||||industr|||
|Networ||Capital||||||Game||||
||ogy;||23,500,||Proprie||Long||ial and|-1,633,1||
|k||increas||25.00%||No||distribu|||No|
||comput||000.00||tary||term||comme|40.77||
|Technol||e||||||tion||||
||er||||||||rcial|||
|ogy||||||||||||
||system||||||||change|||
|Co.,||||||||||||
||integrat||||||||s|||
|Ltd.||||||||||||
||ion;|||||||||||
||network|||||||||||
||enginee|||||||||||
||ring;|||||||||||
||animati|||||||||||
||on|||||||||||
||design;|||||||||||
||creative|||||||||||
||services|||||||||||
||;|||||||||||
||graphic|||||||||||
||design|||||||||||
||and|||||||||||

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||product|||||||||||
||ion;|||||||||||
||sales of|||||||||||
||comput|||||||||||
||ers,|||||||||||
||softwar|||||||||||
||e and|||||||||||
||auxiliar|||||||||||
||y|||||||||||
||equipm|||||||||||
||ent;|||||||||||
||import|||||||||||
||and|||||||||||
||export|||||||||||
||of|||||||||||
||goods|||||||||||
||and|||||||||||
||technol|||||||||||
||ogies.|||||||||||
||||||||||Compl|||
||||||||||eted|||
||Supply|||||||||||
|Archiac|||||||||industr|||
||of VR|Capital||||||VR||||
|t|||6,858,8||Proprie||Long||ial and|||
||game|increas||10.00%||No||Game||0.00|No|
|Interact|||00.00||tary||term||comme|||
||content|e||||||R&D||||
|ive Ltd.|||||||||rcial|||
||s|||||||||||
||||||||||change|||
||||||||||s`|||
||Technol|||||||||||
||ogy|||||||||||
||services|||||||||||
||of|||||||||||
||||||||||Compl|||
||comput|||||||||||
|Chengd|||||||||eted|||
||er|||||||||||
|u 91Act|||||||||industr|||
|||Capital||||||||||
||hardwar|||||||||||
|Technol|||11,500,||Proprie||Long|Game|ial and|1,001,26||
||e and|increas||20.50%||No|||||No|
|ogy|||000.00||tary||term|R&D|comme|0.32||
||softwar|e||||||||||
|Co.,|||||||||rcial|||
||e; R&D|||||||||||
|Ltd.|||||||||change|||
||and|||||||||||
||||||||||s`|||
||sales of|||||||||||
||comput|||||||||||
||er|||||||||||
||hardwar|||||||||||

2017 Annual Report
||
|-|
|e and|
|softwar|
|e and|
|auxiliar|
|y|
|equipm|
|ent,|
|electron|
|ic|
|product|
|s, office|
|equipm|
|ent and|
|commu|
|nication|
|s|
|equipm|
|ent|
|(excludi|
|ng|
|wireless|
|broadca|
|st|
|televisi|
|on|
|transmi|
|ssion|
|equipm|
|ent and|
|satellite|
|ground|
|receptio|
|n|
|equipm|
|ent);|
|network|
|technol|
|ogy|
|develop|
|ment,|
|technic|
|al|

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||consulti|||||||||||
||ng,|||||||||||
||technol|||||||||||
||ogy|||||||||||
||transfer|||||||||||
||;|||||||||||
||multim|||||||||||
||edia|||||||||||
||design;|||||||||||
||animati|||||||||||
||on|||||||||||
||design;|||||||||||
||import|||||||||||
||and|||||||||||
||export|||||||||||
||of|||||||||||
||goods|||||||||||
||and|||||||||||
||technol|||||||||||
||ogies.|||||||||||
||Technic|||||||||||
||al|||||||||||
||develop|||||||||||
||ment,|||||||||||
||technic|||||||||||
||al|||||||||||
||transfer|||||||||||
|Shenzh|and||||||||Compl|||
|en|related||||||||eted|||
|Chanyo|informa||||||||industr|||
|||Capital||||||||||
|u|tion||18,000,||Proprie||Long|Game|ial and|||
|||increas||2.78%||No||||0.00|No|
|Technol|consult||000.00||tary||term|R&D|comme|||
|||e||||||||||
|ogy|ation of||||||||rcial|||
|Co.,|online||||||||change|||
|Ltd.|games||||||||s`|||
||and|||||||||||
||comput|||||||||||
||er|||||||||||
||softwar|||||||||||
||e;|||||||||||
||design|||||||||||
||of web|||||||||||

2017 Annual Report
||
|-|
|pages;|
|domesti|
|c trade|
|(except|
|for the|
|above|
|items|
|that are|
|subject|
|to|
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|and|
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|(except|
|for|
|items|
|that are|
|prohibit|
|ed by|
|laws,|

2017 Annual Report
||
|-|
|adminis|
|trative|
|regulati|
|ons and|
|State|
|Council|
|. The|
|restricte|
|d items|
|may be|
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|items|
|that are|
|subject|
|to|
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|and|
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|l of|
|advertis|
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2017 Annual Report
||
|-|
|busines|
|s|
|accordi|
|ng to|
|laws,|
|adminis|
|trative|
|regulati|
|ons and|
|decisio|
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|Informa|
|tion|
|service|
|busines|
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|(Interne|
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|services|
|only);|
|operatio|
|n of|
|game|
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|s with|
|Internet|
|(includi|
|ng|
|distribu|

2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||tion of|||||||||||
||virtual|||||||||||
||currenc|||||||||||
||y of|||||||||||
||online|||||||||||
||games).|||||||||||
||Design,|||||||||||
||develop|||||||||||
||ment|||||||||||
||and|||||||||||
||sales of|||||||||||
||comput|||||||||||
||er|||||||||||
||hardwar|||||||||||
||e and|||||||||||
||softwar|||||||||||
||e;|||||||||||
||comput|||||||||||
||er|||||||||||
||system|||||||||||
|Chengd|integrat||||||||Compl|||
|u|ion;||||||||eted|||
|Pengwa|network||||||||industr|||
|||Capital||||||||||
|n|enginee||33,021,||Proprie||Long|Game|ial and|2,076,42||
|||increas||22.34%||No|||||No|
|Technol|ring||823.48||tary||term|R&D|comme|6.17||
|||e||||||||||
|ogy|design||||||||rcial|||
|Co.,|and||||||||change|||
|Ltd.|constru||||||||s`|||
||ction|||||||||||
||(operati|||||||||||
||ng with|||||||||||
||qualific|||||||||||
||ations|||||||||||
||and|||||||||||
||licenses|||||||||||
||); web|||||||||||
||design;|||||||||||
||technic|||||||||||
||al|||||||||||
||support|||||||||||
||services|||||||||||
||,|||||||||||

2017 Annual Report
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||technic||||||||||||||
||al||||||||||||||
||consulti||||||||||||||
||ng,||||||||||||||
||technic||||||||||||||
||al||||||||||||||
||services||||||||||||||
||and||||||||||||||
||technol||||||||||||||
||ogy||||||||||||||
||promoti||||||||||||||
||on for||||||||||||||
||comput||||||||||||||
||ers;||||||||||||||
||digital||||||||||||||
||content||||||||||||||
||services||||||||||||||
||;||||||||||||||
||animati||||||||||||||
||on||||||||||||||
||design.||||||||||||||
||||1,||||||||||||
||||602,67||||||||-6,283,7||||
|Total|--|--||--|--|--|--|--|--|0.00||--|--|--|
||||0,580.9||||||||75.68||||
||||5||||||||||||

3. Important non-equity investment in the reporting period
√ Applicable□ Not applicable
Unit: yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Investme|||||||||Reasons|||
||||||Cumulati||||||||
|||||||||||for|||
||||||ve||||Cumulati||||
|||||||||||failure to|||
|||||Investme|investme||||ve||||
|||Investme|Industrie|||||||achieve|||
|||||nt|nt||||returns||||
|||nt in|s of the|||||Anticipat||schedule|Disclosu|Disclosu|
|||||amount|amount|Capital|Project||as of the||||
|Projects|nt|fixed|investme|||||ed||d|re date|re index|
|||||in this|as of the|source|progress||end of||||
||method|assets or|nt|||||income||progress|(if any)|(if any)|
|||||reporting|end of||||this||||
|||not|projects|||||||and|||
|||||period|this||||reporting||||
|||||||||||anticipat|||
||||||reporting||||period||||
|||||||||||ed|||
||||||period||||||||
|||||||||||income|||

2017 Annual Report
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|12/F,|||||||||||||
|14/F,|||||||||||||
|17/F to|||||||||||||
|23/F of|||||||||||||
|Office||||||||||||http://w|
|Building||||||||||||ww.cninf|
|and -3/F||||||||||||o.com.cn|
|and -4/F||||||||||||/cninfo-n|
|of||||||||||||ew/discl|
|undergro||||||||||||osure/szs|
||||Commer||||||||||
|und||||795,864,|795,864,|Mortgag|||||April 26,|e_sme/b|
||Other|Yes|cial real|||||0.00|0.00|N/A|||
|parking||||793.02|793.02|e loan|||||2017|ulletin_d|
||||estate||||||||||
|spaces of||||||||||||etail/true|
|Zhongro||||||||||||/120338|
|ng Plaza,||||||||||||7463?an|
|No. 666||||||||||||nounceTi|
|Huangpu||||||||||||me=201|
|Road||||||||||||7-04-26|
|Middle,|||||||||||||
|Tianhe,|||||||||||||
|Guangzh|||||||||||||
|ou|||||||||||||
|||||795,864,|795,864,||||||||
|Total|--|--|--|||--|--|0.00|0.00|--|--|--|
|||||793.02|793.02||||||||

4. Financial assets measured at fair value
√ Applicable□ Not applicable
Unit: yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|||Profits and|Cumulative||Sales||||
|||||Purchase|||||
||Initial|losses from|changes in fair||amount in|Cumulative|||
|||||amount in the|||Ending|Capital|
|Category of assets|investment|change in fair|value recorded||the|returns on|||
|||||reporting|||balance|source|
||cost|value in the|in profits and||reporting|investment|||
|||||period|||||
|||current period|gains||period||||
||81,100,692||||3,756,740.6||57,541,101.||
|Shares||0.00|-23,559,590.80|80,189,997.98||0.00||Proprietary|
||.72||||2||92||
||81,100,692||||3,756,740.6||57,541,101.||
|Total||0.00|-23,559,590.80|80,189,997.98||0.00||--|
||.72||||2||92||

2017 Annual Report 5. Use of raised funds
√ Applicable□ Not applicable
(1) Overall use of raised funds
√ Applicable□ Not applicable
Unit: 10,000 yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||Total||||||
||||||||Proportion||||
||||Total||amount of||||||
|||||||Cumulativ|of||Purpose||
||||amount of||raised fund|||Total||Amount of|
|||Total||Cumulativ||e amount|cumulative||and||
|Year of|||raised||with|||amount of||raised fund|
||Fundraisin|amount of||e amount||of raised|amount of||direction||
|fundraisin|||funds used||purposes|||raised||s idle for|
||g mode|raised||of raised||fund with|raised fund||of raised||
|g|||in the||changed in|||funds not||over two|
|||funds||funds used||purposes|with||funds not||
||||current||the|||used||years|
|||||||changed|purposes||used||
||||period||reporting||||||
||||||||changed||||
||||||period||||||
||Private||||||||||
|2017||45,596.25|45,596.25|45,596.25|0|0|0.00%|0|--|0|
||offering||||||||||

Total -- 45,596.2 45,596.2 45,596.2 0 0 0.00% 0 -- 0 5 5 5
||
|-|
|Overall use of raised funds|
|With the Reply of China Securities Regulatory Commission on Approving the Share Issuance of Wuhu Shunrong Sanqi Interactive|
|Entertainment Network Technology Co., Ltd. to Yang Dongmai etc. for Purchasing Assets and Raising Supporting Funds (Zheng|
|Jian Permit [2017] No. 579), Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co., Ltd. offered to 2 specific|
|targets including Shenzhen Guodiao Investment M&A Equity Investment Fund Partnership (Limited Partnership) and Shenzhen|
|Yidun Media Investment Fund Partnership (Limited Partnership) 17,866,869 RMB common shares (A shares) of non-public|
|issuance shares (with a nominal value of RMB 1 per share). The issue price was RMB 25.52 per share and the total funds raised|
|were RMB 455,962,496.88. After deduction of the issuance costs of RMB 31,313,316.06 (including tax) and the VAT input tax of|
|RMB 1,768,867.9. The net amount of funds was RMB 426,418,048.75. As of June 30, 2017, the supporting funds raised by the|
|above issuance had been put in place and examined by Pan-China Certified Public Accountants (Special General Partnership). It|
|issued the Tianjian Yan [2017] No. 3-64 Capital Verification Report on July 1, 2017. The funds raised were mainly used for the|
|cash consideration of RMB 422,642,500.00 for purchasing 68.43% of the equity of Shanghai Mokun and 49.00% of the equity of|
|Jiangsu Zhiming and RMB 33,320,000.00 for related intermediary agency expenses of the transaction.|

(2) Projects to be invested in with raised funds
√ Applicable□ Not applicable
Unit: 10,000 yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Projects to be invested|Change|Total|Total|Investme|Cumulati|Investme|Date|Benefit in|Whether|Significa|

2017 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|and investment|of project|amount|investme|nt|ve|nt|when the|this|the|nt change|
|direction of excess|or not|of raised|nt after|amount|investme|progress|project|reporting|expected|in|
|funds|(includin|fund to|adjustme|in this|nt|by the|reaches|period|benefit is|feasibility|
||g partial|be|nt (1)|reporting|amount|end of the|the||reached|of the|
||change)|invested||period|as of the|current|expected||or not|project or|
||||||end of the|period (3)|serviceab|||not|
||||||current|＝(2)/(1)|le||||
||||||period (2)||condition||||
||||||||s||||
|Projects to be invested in|||||||||||
|Cash consideration for|||||||||||
|purchasing 68.43% of|||||||May 31,||||
||No|33,346.25|33,346.25|28,346.25|33,346.25|100.00%||-2,482.65|No|No|
|the equity of Shanghai|||||||2017||||
|Mokun|||||||||||
|Cash consideration for|||||||||||
|purchasing 49.00% of||||||--100.00|May 31,||||
||-- No|8,918|8,918|8,918|8,918|||1,916.52|--Yes|--No|
|the equity of Jiangsu||||||%|2017||||
|Zhiming|||||||||||
|Payment for related|||||||||||
|intermediary agency|||||||June 30,||||
||No|3,332|3,332|3,332|3,332|100.00%||0|Yes|No|
|expenses of the|||||||2017||||
|transaction|||||||||||
|Subtotal of the projects|||||||||||
||--|45,596.25|45,596.25|40,596.25|45,596.25|--|--||--|--|
|to be invested in|||||||||||
|Subtotal of projects to|||||||||||
||--|||||--|--|-566.13|--|--|
|be invested in|||||||||||
|Investment direction of excess funds|||||||||||
|No|||||||||||
|Repayment of bank|||||||||||
||--|0|0|0|0|0.00%|--|--|--|--|
|loan (if any)|||||||||||
|Supplement of current|||||||||||
||--|0|0|0|0|0.00%|--|--|--|--|
|funds (if any)|||||||||||
|Subtotal of investment|||||||||||
|direction of excess|--|0|0|0|0|--|--|0|--|--|
|funds|||||||||||
|Total|--|45,596.25|45,596.25|40,596.25|45,596.25|--|--|-566.13|--|--|
|Failure to meet|Shanghai Mokun Digital Technology Co., Ltd., a subsidiary of the Company, failed to fulfil its||||||||||
|scheduled progress or|performance commitments during the reporting period, the main reason of which was that its product||||||||||

2017 Annual Report
|||
|-|-|
|anticipated income and|launch schedule was postponed. It has successfully launched its main products and achieved impressive|
|reasons (specific|billing as of the date of this report, which was expected to have a positive effect on its future performance.|
|projects)||
|Description of||
|significant changes in|No|
|project feasibility||
|Amount, purpose, and|N/A|
|progress of excess||
|funds||
|Change in place of|N/A|
|implementation of||
|projects invested in||
|with raised funds||
|Adjustment of|N/A|
|implementation||
|method of projects||
|invested in with raised||
|funds||
||Applicable|
||In order to ensure the successful implementation of the Company's restructuring before the raised fundsarrived, the Company had invested in the fundraising projects at the earlier stage with self-raised fundsaccording to the actual situation, including the payment of cash consideration of RMB 50 million andrelated intermediary agency expenses of RMB 4.466 million for this transaction, totaling RMB 54.466million. After the raised funds were in place, the 7th meeting of the 4th Board of Directors of the Companyreviewed and approved the Proposal on Replacing the Up-Front Funds Invested in the Fundraising Projectwith the Funds Raised, agreeing that the company would use the raised funds of RMB54.466 million toreplace the self-raised funds invested in advance.|
|Up-front cost and||
|replacement of projects||
|invested in with raised||
|funds||
|Temporary supplement|N/A|
|of current funds with||
|idle raised funds||
|Amount of surplus|N/A|
|raised funds in project||
|implementation and the||
|reason||
|Purpose and direction||
||The funds raised have all been used up during the reporting period without surplus.|
|of unused raised funds||
|Problems or other||
|situations in use and|No|
|disclosure of raised||

2017 Annual Report
||
|-|
|funds|

(3) Change in projects invested in with raised funds
□ Applicable√ Not applicable
There is no change in projects invested in with raised funds in the reporting period.
VI. Sales of Major Assets and Equity
1. Sales of major assets
□ Applicable√ Not applicable
The Company did not sell any major asset in the reporting period.
2. Sales of major equity
√ Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||Net||||||||||
|||||income||||||||||
|||||realized|||||||Implem|||
|||||by the|||||||entation|||
|||||||Proporti||||||||
|||||equity|||||||of the|||
|||||||on of||||||||
|||||for the|||||||sales as|||
|||||||net||||||||
|||||listed|||||||planned|||
|||||||income||||Transfer||||
|||||compan|||||||or not,|||
||||||Impact|from|Pricing|Related-|Relation|of the||||
|||||y from|||||||and|||
||||Price||of sales|equity|principl|party|ship|equity|||Disclos|
|Counter|Equity|Date of||the|||||||explain|Disclos||
||||(10,000||on the|sales in|e for|transacti|with the|involve|||ure|
|party|sold|sales||beginni|||||||the|ure date||
||||yuan)||Compan|Pre-tax|equity|on or|counter|d in|||index|
|||||ng of|||||||reasons|||
||||||y|income|sales|not|party|whole||||
|||||the|||||||and|||
|||||||of the||||or not||||
|||||current|||||||measure|||
|||||||listed||||||||
|||||period|||||||s taken|||
|||||||compan||||||||
|||||to the|||||||by the|||
|||||||y||||||||
|||||date of|||||||compan|||
|||||sales|||||||y if not.|||
|||||(10,000||||||||||
|||||yuan)||||||||||
|Zhongn|Shangha||||No|||||||||
|||March|||||Market||Non-rel|||||
|an Hong|i Aurora||||effect||||||As|||
|||31,|13,365|29.3||5.36%|fair|No|ated|Yes||||
|Culture|Networ||||on the||||||planned|||
|||2017|||||value||parties|||||
|Group|k||||Compan|||||||||

2017 Annual Report
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Co.,|Technol||||y's||||||||
|Ltd.|ogy Co.,||||business||||||||
||Ltd.||||;||||||||
||||||increase||||||||
||||||its||||||||
||||||current||||||||
||||||net||||||||
||||||income||||||||
||||||No||||||||
||||||effect||||||||
||Shangha||||||||||||
||||||on the||||||||
|Tianjin|i||||||||||||
||||||Compan||||||||
|Kale|Haoyua||||||||||||
||||||y's||||||||
|Interacti|n|January|||||Market||Non-rel|||January|
||||||business||||||As||
|ve|Culture|13,|19,500|0||4.49%|fair|No|ated|Yes||05,|
||||||;||||||planned||
|Technol|&|2017|||||value||parties|||2017|
||||||increase||||||||
|ogy Co.,|Media||||||||||||
||||||its||||||||
|Ltd.|Co.,||||||||||||
||||||current||||||||
||Ltd.||||||||||||
||||||net||||||||
||||||income||||||||
||||||No||||||||
||||||effect||||||||
||Tianjin||||||||||||
||||||on the||||||||
||Zilong||||||||||||
|Huaren|||||Compan||||||||
||Qidian||||||||||||
|Culture|||||y's||||||||
||Interacti|August|||||Market||Non-rel||||
|Limited|||||business||||||As||
||ve|21,|5,500|0||1.00%|fair|No|ated|Yes|||
|Liability|||||;||||||planned||
||Entertai|2017|||||value||parties||||
|Compan|||||increase||||||||
||nment||||||||||||
|y|||||its||||||||
||Co.,||||||||||||
||||||current||||||||
||Ltd.||||||||||||
||||||net||||||||
||||||income||||||||

VII. Analysis of Main Controlling and Shareholding Companies
√ Applicable□ Not applicable
Main subsidiaries and shareholding companies contributing to more than10% of the net income of the Company
Unit: yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company|Type of the|Principal|Registered|Total assets||Operating|Operating||
||||||Net assets|||Net income|
|name:|Company|business|capital|||revenue|profit||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Shanghai|||10,000,000.00||||||
|Sanqi|||||||1,||
|||||6,080,611,03|3,321,683,31|5,619,311,64||1,514,053,82|
|Interactive|Subsidiary|On-line game|||||575,879,628.||
|||||8.82|7.25|4.89||6.46|
|Entertainmen|||||||50||
|t|||||||||

Subsidiaries acquired and disposed in the reporting period
√ Applicable□ Not applicable
||||
|-|-|-|
|Company name:|Methods of subsidiary acquisition and|Impact on overall production, operation,|
||disposal in the reporting period|and performance|
|||Shanghai Mokun’s ability of high-quality|
|||game R&D effectively enhances the R&D|
|Shanghai Mokun|Acquisition||
|||ability of the listed company and improves|
|||users' willingness to pay.|

Description of main controlling and shareholding companies
VIII. Structured Entities Controlled by the Company
□ Applicable√ Not applicable
IX. Prospect for Future Development of the Company
i. Development Strategy and Business Plan of the Company
1. Development Strategy
The Company will adhere to the development strategy of “platformization, globalization and pan-entertainment”, uphold the marathon-type entrepreneurial spirit, and lead the Company to keep catching and surpassing the industry leader under the trend that the global online game industry still maintains growth. The Company will create brand barriers by leveraging team strengths, differentiated competitive advantages of mobile game publishing business, leading advantages in the browser game industry andR&D advantages of superior games, and will enhance operating performance through endogenous and outreach development. Looking into the future, the Company will further develop its IP strategy and customize more premium games with high-quality IPs to become the world's leading developer, operator and distributor of mobile games and browser games, and will continue to increase its presence in the interactive entertainment industry and improve its interactive entertainment ecosystem.
2. Business Plan
(1) Further Promote the“ARPG+ Multi-Category” Product Strategy of Mobile Game
The achievements of games such as Yong Heng Ji Yuan, Swords of Archangels H5, Xian Ling Jue Xing and King of Avalon inR&D and publishing business verified the"ARPG+ multi-category" product strategy of the Company for mobile gameR&D and publishing and the Company's capacities of purchase and conversion of traffic and channel cooperation. Accordingly, the Company
will further strengthen itsR&D and publishing competitive advantages in mobile games and make full use of its abundant product
reserves. It will make greater efforts to expand the leading edge in superior ARPG game products with Mobile Game Chuan Qi Ba
2017 Annual Report Ye, Swords of Archangels H5 and Yong Heng Ji Yuan etc. Meanwhile, it will occupy a larger market share by publishing multi-category mobile games such as Fighter of the Destiny, Xian Ling Jue Xing, Ling Yu, Sword and Rebirth and other ancient fantasy games, card games, female-oriented games, and games adapted from cartoons and animations.
(2) Adequate Browser Game Product Reserves and Continuous Elaborate Operation on High-Quality Products
The Company will conduct elaborate operation on high-quality browser games in 2018. The main products that will be released in 2018 include Rise of Taichi, One Piece Online, A Step into the Past, The Legendary Swordsman and Xue Mai and self-developed Tu Long Rong Yao, Xue Meng Rong Yao and MU X.
(3) In-Depth Localization and Operation on High-Quality Products to Increase Overseas Market Share
The Company will expand the countries and regions covered by the 37GAMES platform to dig deep into the European and American market using English, Asia market, as well as the markets using minor languages such as German, French and Turkish etc. The Company will further leverage its first-mover advantage in overseas markets and rely on advanced gameR&D capabilities and localization capabilities to expand its overseas business scale and increase its overseas market share.
(4) StrengthenR&D of Mobile Games and Browser Games and Consolidate Brand Barriers of Self-Developed Games
The Company will continue to consolidate itsR&D capabilities in mobile games and browser games, enhance the performance of its product engines, improve the artistic quality of its products, and actively carry out design innovations in 2018. Meanwhile, it will conduct multi-platform and multi-gameplay development for the Company's self-developed premium games such as Chuan Qi Ba Ye, Swords of Archangels and Yong Heng Ji Yuan etc. to enhance the core user stickiness, accumulate reputation and further consolidate brand barriers. In addition, the Company will further recruit excellentR&D talents, expandR&D teams and further enrich the product lines.
(5) Strengthen Cooperation withR&D Manufacturers and Media Channels, and Consolidate theCompany’s Bargaining Power in the Industry Chain
The Company will continue to strengthen cooperation withR&D manufacturers and media channels, and expand theCompany’s market share through benign cooperation in 2018, thereby further enhancing its bargaining power in the industry chain.
(6) Maintain Synergy among Business Segments and Enhance Complementarity between Endogenous Development and Outreach Development
While maintaining the rapid growth of endogenous development, the Company will focus on its development strategy and plans and actively accelerate the Company's layout of the upstream and downstream of the industrial chain through investment, equity participation, mergers and acquisitions and other means, including media channels, game videos, andfilm and TV, animation and other interactive entertainment industries, to maximize the value of the platform users and the Company.
(7) Continue to Implement the IP Strategy and Reserve Premium Contents Customized and Developed based on IPs
Based on the pan-entertainment layout such as animation, film and TV, the Company actively seeks ways including investment, mergers and acquisitions to increases investment in animation, VR and other fields to carry out the layout of pan-entertainment industries. Relying on IP, it will develop and publish premium pan-entertainment contents of new areas. In particular, it will soon introduce finished product contents of the animation industry to further expand the Company's brand strength in the game market. iii. Future Challenges Faced by the Company and Countermeasures
2017 Annual Report 1. Market Competition Risks and Countermeasures
The online game industry has formed fierce competition in products and market channels. With the development of various entertainment industries and the Internet industry, online game users are also upgrading their requirements of products. If market competition is further intensified, it will exert pressure on the Company's development from the aspects of products and market channels.
With respect to countermeasures, the Company needs to maintain its existing brand advantages and bargaining power and accelerate the integration of upstream and downstream of the industry chain, while leveraging its first-mover advantage in overseas game markets to accelerate the expansion of overseas business scale. In addition, it should constantly introduce more exquisite mobile games and browser games by virtue of continuously successful productR&D experience and accumulation and through targeted development with abundant IP resources, so as to achieve continuous connection with users through ceaseless boutique games and maintain improvement of core competitiveness in the market.
2. Operational Risks and Countermeasures
The online game industry has the characteristics of fast product replacement, limited life cycle and fast change of user preferences. Game-related companies need to increase investment in technology development and keep up with industry technology trends. If the game industry's technology, products and other aspects undergo major changes, but the Company fails to keep up with the pace of industrial technology development, resulting in failure of products to meet market demand, significant negative impact may generate on user experience of the original business and brand image etc., thereby affecting the Company's operating performance.
With respect to countermeasures, the Company needs to increase its investment in productR&D and should, at the same time, continue outreach development and deploy the upstream of the industrial chain through investment, equity participation, mergers and acquisitions.
3. Loss of Core Personnel and Countermeasures
A stable and high-quality game development talent team is an important guarantee for the Company, as a light-asset online game company, to maintain its leading edge in technology. If the Company cannot effectively maintain the incentive mechanism of the core personnel and constantly improve it in accordance with changes in the market environment, it will affect the enthusiasm and creativity of the core personnel, and even result in the loss of core personnel. If the Company cannot externally introduce technical and operational talents that are closely related to the Company's development and retain them, the Company's business operation, development space and profitability levels will be adversely affected.
In response, the Company attaches great importance to training and seeking of professional talents. It has built a platform-based talent management mechanism in an innovative manner to inspire outstanding game producers through high project awards while giving them great space forR&D and freedom of creation. The Company maintains the stability of core technology and management personnel by signing agreements with key personnel, creating a sound working environment and establishing a good corporate culture. At the same time, the Company has always paid attention to the training and increase of sense of belonging of employees, especially the core employees and managers, to help them build a sense of ownership of the Company and increase their loyalty to the Company.
2017 Annual Report Section V Financial Reports
I. Financial Statements
Numbers in the financial statements and notes thereto are expressed in Renminbi yuan.
Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co., Ltd.
CONSOLIDATED BALANCE SHEET
31 December 2017
(Expressed in Renminbi yuan)
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|1,580,910,931.98|819,213,006.12|
|Notes receivable|55,340,000.00|94,638,841.21|
|Accounts receivable|884,909,012.77|815,645,754.68|
|Advance payments|283,516,789.29|291,963,008.64|
|Interests receivable|582,592.17||
|Other receivables|388,111,919.85|122,662,618.02|
|Inventory|101,828,085.31|71,481,925.54|
|Held-for-sale assets|75,066,714.34||
|Other current assets|592,189,323.99|234,948,261.89|
|Total current assets|3,962,455,369.70|2,450,553,416.10|
|Non-current assets:|||
|Available-for-sale financial assets|882,481,586.86|785,068,643.78|
|Long-term equity investment|376,972,832.08|786,567,839.80|
|Fixed assets|292,395,887.17|271,491,379.50|
|Construction in progress|50,672,878.42|31,078,391.88|
|Intangible assets|44,898,112.29|43,864,656.11|
|Development expenditure|4,070,272.43|8,689,105.40|
|Goodwill|2,540,312,996.76|1,579,976,961.87|

2017 Annual Report
||||
|-|-|-|
|Long-term deferred expenses|79,803,089.59|101,966,657.36|
|Deferred income tax assets|11,810,692.92|6,368,165.19|
|Other non-current assets|914,263,967.16|320,590,794.35|
|Total non-current assets|5,197,682,315.68|3,935,662,595.24|
|Total assets|9,160,137,685.38|6,386,216,011.34|
|Current liabilities:|||
|Short-term loans|372,054,500.00|372,878,500.00|
|Notes payable||17,414,395.42|
|Accounts payable|741,792,973.33|700,713,118.00|
|Payments received in advance|84,886,734.84|59,679,946.95|
|Payroll payable|113,480,021.50|81,943,285.80|
|Taxes payable|58,281,315.47|53,798,244.69|
|Interests payable|390,533.38|411,567.28|
|Other payables|61,572,020.26|293,166,635.18|
|Non-current liabilities due within|||
||28,117,893.57||
|one year|||
|Other current liabilities|57,738,251.19|44,259,562.28|
|Total current liabilities|1,518,314,243.54|1,624,265,255.60|
|Non-current liabilities:|||
|Long-term loans|310,775,272.06||
|Bonds payable|27,163,239.26|23,757,428.88|
|Deferred income|17,226,474.44|9,039,043.38|
|Total non-current liabilities|355,164,985.76|32,796,472.26|
|Total liabilities|1,873,479,229.30|1,657,061,727.86|
|Owner’s equity:|||
|Share capital|2,148,110,844.00|2,084,794,788.00|
|Other equity instruments|1,947,846.62|1,947,846.62|
|Capital reserves|1,972,639,580.66|934,484,599.29|
|Other comprehensive incomes|-25,087,592.30|-4,618,535.07|
|Surplus reserves|99,561,946.09|93,488,947.26|
|Undistributed profit|2,819,597,585.78|1,413,567,635.94|
|Total owner’s equity attributable to|||
||7,016,770,210.85|4,523,665,282.04|
|parent company|||
|Minority interests|269,888,245.23|205,489,001.44|

2017 Annual Report
||||
|-|-|-|
|Total owner's equity|7,286,658,456.08|4,729,154,283.48|
|Total liabilities and owner's equity|9,160,137,685.38|6,386,216,011.34|

 Legal representative: Li Weiwei Person in charge of accounting: Ye Wei Person in charge of the accounting Department: Ye Wei BALANCE SHEET OF THE PARENT COMPANY
(Expressed in Renminbi yuan)
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary capital|5,437,518.91|15,360,874.41|
|Advance payments||1,886,792.45|
|Dividends receivable||500,000,000.00|
|Other receivables|1,655,547,345.04|49,248,886.95|
|Assets held for sale|69,996,897.11||
|Other current assets|403,527,827.28|299,277.50|
|Total current assets|2,134,509,588.34|566,795,831.31|
|Non-current assets:|||
|Available-for-sale financial assets|60,000,000.00|189,996,897.11|
|Long-term equity investment|5,754,424,925.15|5,586,179,960.15|
|Deferred income tax assets|3,334,186.37||
|Other non-current assets|50,000,000.00|298,500,000.00|
|Total non-current assets|5,867,759,111.52|6,074,676,857.26|
|Total assets|8,002,268,699.86|6,641,472,688.57|
|Current liabilities:|||
|Short-term loans|369,000,000.00|370,000,000.00|
|Payroll payable|539,632.89|208,649.67|
|Taxes payable|17,271,522.21|133,574.94|
|Interests payable|390,533.38|411,567.28|
|Other payables|565,086,466.06|285,250,797.14|
|Other current liabilities|936,428.02||
|Total current liabilities|953,224,582.56|656,004,589.03|
|Non-current liabilities:|||
|Total liabilities|953,224,582.56|656,004,589.03|

2017 Annual Report
||||
|-|-|-|
|Owner’s equity:|||
|Share capital|2,148,110,844.00|2,084,794,788.00|
|Capital reserves|4,401,934,248.25|3,253,924,796.01|
|Surplus reserves|99,561,946.09|93,488,947.26|
|Undistributed profit|399,437,078.96|553,259,568.27|
|Total owner's equity|7,049,044,117.30|5,985,468,099.54|
|Total liabilities and owner's equity|8,002,268,699.86|6,641,472,688.57|

 CONSOLIDATED INCOME STATEMENT
(Expressed in Renminbi yuan)
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|I. Total operating revenue|6,188,828,116.75|5,247,893,728.73|
|Including: operating revenue|6,188,828,116.75|5,247,893,728.73|
|II. Total operating costs|5,039,424,012.89|4,137,677,116.62|
|Including: operating costs|1,948,197,239.76|1,941,286,776.66|
|Taxes and surcharges|26,508,097.89|29,714,525.49|
|Operating expenses|1,908,207,466.32|1,607,745,221.19|
|General and administrative|||
||776,659,541.86|514,933,615.17|
|expenses|||
|Financial expenses|28,555,783.27|-5,460,395.61|
|Impairment loss on assets|351,295,883.79|49,457,373.72|
|Investment income|||
||256,030,245.92|54,668,504.76|
|(represented in "-" for loss)|||
|Including: investment income|||
|from associated enterprise and joint|-11,139,329.07|33,654,987.57|
|venture|||
|Gains and losses on asset|||
||1,055,284.09|1,316,063.68|
|disposal (represented in “-” for loss)|||
|Other incomes|111,259,077.18||
|III. Operating profit (represented in "-"|||
||1,517,748,711.05|1,166,201,180.55|
|for loss)|||
|Add: Non-operating income|403,057,922.86|162,018,871.61|
|Less: Non-operating expenditures|4,187,038.90|9,448,442.14|
|IV. Pre-tax profit (represented in "-" for|||
||1,916,619,595.01|1,318,771,610.02|
|total loss)|||

2017 Annual Report
||||
|-|-|-|
|Less: Income tax expense|80,119,872.98|102,102,999.99|
|V. Net profit (represented in “-” for net|||
||1,836,499,722.03|1,216,668,610.03|
|loss)|||
|(I) Net profit of continued|||
|operations (represented in “-” for net|1,836,499,722.03|1,216,668,610.03|
|loss)|||
|Net income attributable to owners|||
||1,620,582,427.47|1,070,162,324.07|
|of parent company|||
|Minority interest income|215,917,294.56|146,506,285.96|
|VI. Other net comprehensive incomes|||
||-19,783,336.38|-14,243,985.29|
|after tax|||
|Other comprehensive incomes after|||
|tax attributable to owners of parent|-20,469,057.23|-8,895,261.69|
|company|||
|(II) Other comprehensive incomes|||
|that can be reclassified as profit or loss in|-20,469,057.23|-8,895,261.69|
|the future|||
|2. Profit and loss on|||
|changes in fair value of available-for-sale|-21,799,686.38|-7,908,783.53|
|financial assets|||
|5. Converted difference in|||
||1,330,629.15|-986,478.16|
|foreign currency statements|||
|Other comprehensive incomes after|||
||685,720.85|-5,348,723.60|
|tax attributable to minority shareholders|||
|VII. Total comprehensive incomes|1,816,716,385.65|1,202,424,624.74|
|Total comprehensive income|||
||1,600,113,370.24|1,061,267,062.38|
|attributable to owners of parent company|||
|Total comprehensive incomes|||
||216,603,015.41|141,157,562.36|
|attributable to minority shareholders|||
|VIIII. Earnings per share:|||
|(1) Basic earnings per share|0.76|0.51|
|(2) Diluted earnings per share|0.76|0.51|

 In case of business combination under common control in the current period, the combined party realized a net profit of RMB 0.00 yuan prior to the combination and it realized a net profit of RMB 0.00 yuan in the prior period.
Legal representative: Li Weiwei Person in charge of accounting: Ye Wei Person in charge of the accounting department: Ye Wei
2017 Annual Report INCOME STATEMENT OF PARENT COMPANY
(Expressed in Renminbi yuan)
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|I. Operating revenue|751,646.53|124,856,929.57|
|Less: Operating cost|31,646.53|123,665,864.69|
|Taxes and surcharges|1,349,357.00|46,078.86|
|Operating expenses||491,661.09|
|General and administrative|||
||17,159,274.42|10,613,763.22|
|expenses|||
|Financial expenses|4,144,539.06|8,035,038.84|
|Impairment loss on assets|10,753,616.43|2,581,848.90|
|Investment income|||
||-294,252,732.59|607,782,394.69|
|(represented in "-" for loss)|||
|Including: investment|||
|income from associated enterprise and|-1,555,025.80|-940,529.89|
|joint venture|||
|Other incomes|156,969.20||
|II. Business profit (represented in “-”|||
||-326,782,550.30|587,205,068.66|
|for loss )|||
|Add: Non-operating revenue|401,364,984.06|178,189.52|
|Less: Non-operating expenditures||2,000,000.00|
|III. Pre-tax profit (represented in “-” for|||
||74,582,433.76|585,383,258.18|
|total loss)|||
|Less: Income tax expense|13,852,445.44|1,019,059.92|
|IV. Net profit (represented in “-” for net|||
||60,729,988.32|584,364,198.26|
|loss)|||
|(I) Net profit of continued|||
|operations (represented in “-” for net|60,729,988.32|584,364,198.26|
|loss)|||
|VI. Total comprehensive incomes|60,729,988.32|584,364,198.26|
|VII. Earnings per share:|||

CONSOLIDATED CASH FLOW STATEMENT
(Expressed in Renminbi yuan)
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|I. Cash flows from operating activities:|||

2017 Annual Report
||||
|-|-|-|
|Cash received from the sales of|||
||6,627,148,304.92|5,123,965,167.21|
|goods or rendering services|||
|Cash received from tax refunds|81,575,068.42|92,618,857.31|
|Other cash received relating to|||
||55,786,523.83|87,462,581.79|
|operating activities|||
|Sub-total of cash inflow from operating|||
||6,764,509,897.17|5,304,046,606.31|
|activities|||
|Cash paid for goods acquired and|||
||1,918,243,942.60|1,847,381,195.05|
|services received|||
|Cash paid to and on behalf of|||
||597,184,300.24|401,186,834.55|
|employees|||
|Taxes paid|363,818,448.62|288,953,619.88|
|Other cash paid relating to|||
||2,053,367,277.41|1,714,585,379.00|
|operating activities|||
|Sub-total of cash outflow from|||
||4,932,613,968.87|4,252,107,028.48|
|operating activities|||
|Net cash flows from operating activities|1,831,895,928.30|1,051,939,577.83|
|II. Cash flows from investing activities|||
|Cash received from withdrawal of|||
||304,550,800.00|33,610,847.31|
|investment|||
|Cash received from return on|||
||25,999,566.33|11,350,004.68|
|investment|||
|Net cash received from disposal|||
|of fixed assets, intangible assets and|8,909,245.08|13,257,703.03|
|other long-term assets|||
|Other cash received relating to|||
||2,228,022,565.14|814,368,000.00|
|investing activities|||
|Sub-total of cash inflow from investing|||
||2,567,482,176.55|872,586,555.02|
|activities|||
|Cash paid for purchase of fixed|||
|assets, intangible assets and other|1,018,821,190.70|209,226,627.28|
|long-term assets|||
|Cash paid for investment|344,220,277.93|1,225,093,171.05|
|Net cash paid for acquisition of|||
||450,009,937.84||
|subsidiaries and other business entities|||
|Other cash paid relating to|||
||2,122,369,000.00|955,800,000.00|
|investing activities|||

2017 Annual Report
||||
|-|-|-|
|Sub-total of cash outflow from|||
||3,935,420,406.47|2,390,119,798.33|
|investing activities|||
|Net cash flows from investing activities|-1,367,938,229.92|-1,517,533,243.31|
|III. Cash flows from financing|||
|activities:|||
|Cash received from absorbing|||
||433,862,496.88|16,002,903.80|
|investment|||
|Including: cash received from|||
|subsidiary investment from minority|4,900,000.00||
|shareholders|||
|Cash received from borrowings|910,400,000.00|406,600,775.46|
|Cash received from issuing bond||26,859,571.35|
|Sub-total of cash inflow from financing|||
||1,344,262,496.88|449,463,250.61|
|activities|||
|Cash paid for repayment of debts|572,506,834.37|65,116,982.42|
|Cash paid for distribution of|||
||368,016,434.03|215,525,663.04|
|dividends or profits or interest payment|||
|Including: dividend and profit|||
|paid to minority shareholders by|128,000,000.00|100,931,000.00|
|subsidiaries|||
|Other cash paid relating to|||
||93,493,316.06||
|financing activities|||
|Sub-total of cash outflow from|||
||1,034,016,584.46|280,642,645.46|
|financing activities|||
|Net cash flows from financing activities|310,245,912.42|168,820,605.15|
|IV. Effect of changes in foreign|||
|exchange rate on cash and cash|-12,505,684.94|10,197,065.30|
|equivalents|||
|V. Net increase in cash and cash|||
||761,697,925.86|-286,575,995.03|
|equivalents|||
|Add: Opening balance of cash|||
||819,213,006.12|1,105,789,001.15|
|and cash equivalents|||
|VI. Closing balance of cash and cash|||
||1,580,910,931.98|819,213,006.12|
|equivalents|||

CASH FLOW STATEMENT OF PARENT COMPANY
(Expressed in Renminbi yuan)
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|

2017 Annual Report
||||
|-|-|-|
|I. Cash flows from operating activities:|||
|Cash received from the sales of|||
||831,026.44|56,370,508.35|
|goods or rendering services|||
|Other cash received relating to|||
||1,173,262,433.61|6,684,417.01|
|operating activities|||
|Sub-total of cash inflow from operating|||
||1,174,093,460.05|63,054,925.36|
|activities|||
|Cash paid for goods acquired and|||
||31,646.53|60,632,762.92|
|services received|||
|Cash paid to and on behalf of|||
||3,096,452.80|6,895,773.15|
|employees|||
|Taxes paid|1,484,543.09|2,105,246.44|
|Other cash paid relating to|||
||1,204,811,508.30|106,063,884.41|
|operating activities|||
|Sub-total of cash outflow from|||
||1,209,424,150.72|175,697,666.92|
|operating activities|||
|Net cash flows from operating activities|-35,330,690.67|-112,642,741.56|
|II. Cash flows from investing activities|||
|Cash received from withdrawal of|||
||195,000,000.00||
|investment|||
|Cash received from return on|||
||1,582,261.90|108,722,924.58|
|investment|||
|Other cash received relating to|||
||6,000,000.00||
|investing activities|||
|Sub-total of cash inflow from investing|||
||202,582,261.90|108,722,924.58|
|activities|||
|Cash paid for investment||474,642,388.20|
|Net cash paid for acquisition of|||
||372,642,500.00||
|subsidiaries and other business entities|||
|Other cash paid relating to|||
|||51,500,000.00|
|investing activities|||
|Sub-total of cash outflow from|||
||372,642,500.00|526,142,388.20|
|investing activities|||
|Net cash flows from investing activities|-170,060,238.10|-417,419,463.62|
|III. Cash flows from financing|||
|activities:|||

2017 Annual Report
||||
|-|-|-|
|Cash received from absorbing|||
||428,962,496.88||
|investment|||
|Cash received from borrowings|560,000,000.00|370,000,000.00|
|Sub-total of cash inflow from financing|||
||988,962,496.88|370,000,000.00|
|activities|||
|Cash paid for repayment of debts|561,000,000.00||
|Cash paid for distribution of|||
||228,181,607.55|111,921,553.41|
|dividends or profits or interest payment|||
|Other cash paid relating to|||
||4,313,316.06||
|financing activities|||
|Sub-total of cash outflow from|||
||793,494,923.61|111,921,553.41|
|financing activities|||
|Net cash flows from financing activities|195,467,573.27|258,078,446.59|
|IV. Effect of changes in foreign|||
|exchange rate on cash and cash||5.12|
|equivalents|||
|V. Net increase in cash and cash|||
||-9,923,355.50|-271,983,753.47|
|equivalents|||
|Add: Opening balance of cash|||
||15,360,874.41|287,344,627.88|
|and cash equivalents|||
|VI. Closing balance of cash and cash|||
||5,437,518.91|15,360,874.41|
|equivalents|||

CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
Current Amount
(Expressed in Renminbi yuan)
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||||
||Owner’s equity attributable to parent company|||||||||||||
|||Other equity||||||||||||
|||instruments||||||||||||
|Item|||Perpe|t|||Other|||Provisio||Minorit|Total|
|||||||Less:|||||Undistri|||
||Share|Prefer|ual||Capital|treasury|compre|Special|Surplus|ns for|buted|y|owner's|
||capital||capita|Other|reserves||hensive|reserves|reserves|general||interests|equity|
|||red||||stocks|||||profit|||
||||l|s|||incomes|||risks||||
|||Share||||||||||||
||||secur|i||||||||||
||||ties|||||||||||
|I. Closing balance|2,084,|||1,947,846.6|934,484||-4,618,5||93,488,||1,413,5|205,489|4,729,1|
|of the prior year|794,78||||,599.29||35.07||947.26||67,635.|,001.44|54,283.|

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
||8.00|2||||94||48|
|II. Opening|2,084,|1,947,||||1,413,5||4,729,1|
||||934,484|-4,618,5|93,488,||205,489||
|balance of current|794,78|846.6||||67,635.||54,283.|
||||,599.29|35.07|947.26||,001.44||
|year|8.00|2||||94||48|
|III. Increase and|||||||||
|decrease of current|63,316||1,038,1|||1,406,0||2,557,5|
|||||-20,469,|6,072,9||64,399,||
|year (represented|,056.0||54,981.|||29,949.||04,172.|
|||||057.23|98.83||243.79||
|in “-” for|0||37|||84||60|
|decrease)|||||||||
|(I) Total||||||1,620,5||1,816,7|
|||||-20,469,|||216,603||
|comprehensive||||||82,427.||16,385.|
|||||057.23|||,015.41||
|incomes||||||47||65|
|(II) Capital input|63,316||1,038,1|||||1,077,2|
||||||||-24,203,||
|and reduced by|,056.0||54,981.|||||67,265.|
||||||||771.62||
|owners|0||37|||||75|
|1. Common shares|63,316||1,148,0|||||1,216,2|
||||||||4,900,0||
|input by|,056.0||09,452.|||||25,508.|
||||||||00.00||
|shareholders|0||24|||||24|
|2. Amount of|||||||||
|share-based|||85,836,||||15,147,|100,984|
|payment recorded|||485.00||||615.00|,100.00|
|in owner's equity|||||||||
||||-195,69|||||-239,94|
||||||||-44,251,||
|3. Others|||0,955.8|||||2,342.4|
||||||||386.62||
||||7|||||9|
|||||||-214,55|-128,00|-336,47|
|(III) Profit|||||6,072,9||||
|||||||2,477.6|0,000.0|9,478.8|
|distribution|||||98.83||||
|||||||3|0|0|
|1. Appropriation|||||6,072,9|-6,072,9|||
|of surplus reserves|||||98.83|98.83|||
|2. Distribution to||||||-208,47|-128,00|-336,47|
|owners (or||||||9,478.8|0,000.0|9,478.8|
|shareholder)||||||0|0|0|
|IV. Closing|2,148,|1,947,|1,972,6|||2,819,5||7,286,658,456.08|
|||||-25,087,|99,561,||269,888||
|balance of current|110,84|846.6|39,580.|||97,585.|||
|||||592.30|946.09||,245.23||
|period|4.00|2|66|||78|||

 Amount of Prior Period
(Expressed in Renminbi yuan)
|||
|-|-|
|Item|Prior period|

2017 Annual Report
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Owner’s equity attributable to parent company|||||||||||||
|||Other equity||||||||||||
|||instruments||||||||||||
|||||||||||||Minorit||
||||Perpet||||Other|||Provisio|||Total|
|||||||Less:|||||Undistri|y||
||Share||ual||Capital||compre|Special|Surplus|ns for|||owner's|
|||Prefer||||treasury|||||buted|interest||
||capital||capita|Other|reserves||hensive|reserves|reserves|general|||equity|
|||red||||stocks|||||profit|s||
||||l|s|||incomes|||risks||||
|||Share||||||||||||
||||securi|||||||||||
||||ties|||||||||||
||1,042,||||1,975,5||||||||3,710,9|
|I. Closing balance|||||||4,276,7||35,052,||506,077|147,570||
||397,39||||51,294.||||||||25,416.|
|of the prior year|||||||26.62||527.43||,201.90|,271.88||
||4.00||||76||||||||59|
|II. Opening|1,042,||||1,975,5||||||||3,710,9|
||||||||4,276,7||35,052,||506,077|147,570||
|balance of current|397,39||||51,294.||||||||25,416.|
||||||||26.62||527.43||,201.90|,271.88||
|year|4.00||||76||||||||59|
|III. Increase and||||||||||||||
|decrease of current|1,042,|||1,947,|-1,041,0||||||||1,018,2|
||||||||-8,895,2||58,436,||907,490|57,918,||
|year (represented|397,39|||846.6|66,695.||||||||28,866.|
||||||||61.69||419.83||,434.04|729.56||
|in “-” for|4.00|||2|47||||||||89|
|decrease)||||||||||||||
|(I) Total|||||||||||1,070,1||1,202,4|
||||||||-8,895,2|||||141,157||
|comprehensive|||||||||||62,324.||24,624.|
||||||||61.69|||||,562.36||
|incomes|||||||||||07||74|
|(III) Capital input||||1,947,||||||||||
||||||1,330,6|||||||17,692,|20,970,|
|and reduced by||||846.6||||||||||
||||||98.53|||||||167.20|712.35|
|owners||||2||||||||||
|1. Common shares||||||||||||||
||||||-259,66|||||||2,030,1|1,770,4|
|input by||||||||||||||
||||||1.93|||||||60.70|98.77|
|shareholders||||||||||||||
|2. Capital input by||||1,947,||||||||||
|||||||||||||15,539,|17,486,|
|owners of other||||846.6||||||||||
|||||||||||||105.81|952.43|
|equity instruments||||2||||||||||
||||||1,590,3|||||||122,900|1,713,2|
|3. Others||||||||||||||
||||||60.46|||||||.69|61.15|
||||||||||||-162,67|-100,93|-205,16|
|(III) Profit|||||||||58,436,|||||
||||||||||||1,890.0|1,000.0|6,470.2|
|distribution|||||||||419.83|||||
||||||||||||3|0|0|
|1. Appropriation|||||||||58,436,||-58,436,|||
|of surplus reserves|||||||||419.83||419.83|||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|2. Distribution to||||||-104,23|-100,93|-205,16|
|owners (or||||||5,470.2|1,000.0|6,470.2|
|shareholder)||||||0|0|0|
|(IV) Internal|1,042,||-1,042,3||||||
|carryover of|397,39||97,394.||||||
|owner's equity|4.00||00||||||
|1. Capitalized|1,042,||-1,042,3||||||
|capital reserve (or|397,39||97,394.||||||
|stock capital)|4.00||00||||||
|IV. Closing|2,084,|1,947,||||1,413,5||4,729,1|
||||934,484|-4,618,5|93,488,||205,489||
|balance of current|794,78|846.6||||67,635.||54,283.|
||||,599.29|35.07|947.26||,001.44||
|period|8.00|2||||94||48|

 STATEMENT OF CHANGES IN OWNER'S EQUITY OF PARENT COMPANY
Current Amount
(Expressed in Renminbi yuan)
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
|||Other equity instruments||||||||||
||||Perpetu||||Other|||||
|||||||Less:||||Undistri|Total|
|Item|Share||al||Capital||comprehe|Special|Surplus|||
|||Preferre||||treasury||||buted|owner's|
||capital||capital|Others|reserves||nsive|reserves|reserves|||
|||d Share||||stocks||||profit|equity|
||||securiti||||incomes|||||
||||es|||||||||
|I. Closing balance|2,084,79||||3,253,924||||93,488,94|553,259|5,985,468|
|of the prior year|4,788.00||||,796.01||||7.26|,568.27|,099.54|
|II. Opening||||||||||||
||2,084,79||||3,253,924||||93,488,94|553,259|5,985,468|
|balance of current||||||||||||
||4,788.00||||,796.01||||7.26|,568.27|,099.54|
|year||||||||||||
|III. Increase and||||||||||||
|||||||||||-153,82||
|decrease in current|63,316,0||||1,148,009||||6,072,998||1,063,576|
|||||||||||2,489.3||
|year (represented|56.00||||,452.24||||.83||,017.76|
|||||||||||1||
|in “-” for decrease)||||||||||||
|(I) Total||||||||||||
|||||||||||60,729,|60,729,98|
|comprehensive||||||||||||
|||||||||||988.32|8.32|
|incomes||||||||||||
|(III) Capital input||||||||||||
||63,316,0||||1,148,009||||||1,211,325|
|and reduced by||||||||||||
||56.00||||,452.24||||||,508.24|
|owners||||||||||||
|1. Common shares|63,316,0||||1,148,009||||||1,211,325|
|input by|56.00||||,452.24||||||,508.24|

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|shareholders||||||
|||||-214,55||
|(III) Profit|||6,072,998||-208,479,|
|||||2,477.6||
|distribution|||.83||478.80|
|||||3||
|1. Appropriation of|||6,072,998|-6,072,9||
|surplus reserves|||.83|98.83||
|2. Distribution to||||-208,47||
||||||-208,479,|
|owners (or||||9,478.8||
||||||478.80|
|shareholder)||||0||
|IV. Closing|||||7,049,044,117.30|
||2,148,11|4,401,934|99,561,94|399,437||
|balance of current||||||
||0,844.00|,248.25|6.09|,078.96||
|period||||||

Amount of Prior Period
(Expressed in Renminbi yuan)
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Prior period|||||||||||
|||Other equity instruments||||||||||
||||Perpetu||||Other|||||
|||||||Less:||||Undistri|Total|
|Item|Share||al||Capital||comprehe|Special|Surplus|||
|||Preferre||||treasury||||buted|owner's|
||capital||capital|Others|reserves||nsive|reserves|reserves|||
|||d Share||||stocks||||profit|equity|
||||securiti||||incomes|||||
||||es|||||||||
|I. Closing balance|1,042,39||||4,296,322||||35,052,52|131,567|5,505,339|
|of the prior year|7,394.00||||,190.01||||7.43|,260.04|,371.48|
|II. Opening||||||||||||
||1,042,39||||4,296,322||||35,052,52|131,567|5,505,339|
|balance of current||||||||||||
||7,394.00||||,190.01||||7.43|,260.04|,371.48|
|year||||||||||||
|III. Increase and||||||||||||
|decrease of current|1,042,39||||-1,042,39||||58,436,41|421,692|480,128,7|
|year (represented|7,394.00||||7,394.00||||9.83|,308.23|28.06|
|in “-” for decrease)||||||||||||
|(I) Total||||||||||||
|||||||||||584,364|584,364,1|
|comprehensive||||||||||||
|||||||||||,198.26|98.26|
|incomes||||||||||||
|||||||||||-162,67||
|(II) Profit|||||||||58,436,41||-104,235,|
|||||||||||1,890.0||
|distribution|||||||||9.83||470.20|
|||||||||||3||
|1. Appropriation of|||||||||58,436,41|-58,436,||
|surplus reserves|||||||||9.83|419.83||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|2. Distribution to||||-104,23||
||||||-104,235,|
|owners (or||||5,470.2||
||||||470.20|
|shareholder)||||0||
|(III) Internal||||||
||1,042,39|-1,042,39||||
|carryover of||||||
||7,394.00|7,394.00||||
|owner's equity||||||
|1. Capitalized||||||
||1,042,39|-1,042,39||||
|capital reserve (or||||||
||7,394.00|7,394.00||||
|stock capital)||||||
|IV. Closing||||||
||2,084,79|3,253,924|93,488,94|553,259|5,985,468|
|balance of current||||||
||4,788.00|,796.01|7.26|,568.27|,099.54|
|period||||||

II. Notes to Items of Consolidated Financial Statements
1. Monetary funds
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Cash on hand|59,238.53|31,328.92|
|Bank deposit|1,573,326,143.60|809,039,113.18|
|Other monetary capital|7,525,549.85|10,142,564.02|
|Total|1,580,910,931.98|819,213,006.12|
|Including: total amount deposited|||
||309,430,937.71|156,677,334.45|
|overseas|||

Additional descriptions
Other monetary capital refers to the balance of the company and its subsidiaries in the third-party payment platform and securities investment accounts.
2. Notes receivable
(1) Presentation of notes receivable by categories
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank acceptance bill|55,340,000.00|94,638,841.21|
|Commercial acceptance bill|0.00|0.00|
|Total|55,340,000.00|94,638,841.21|

2017 Annual Report (2) Notes receivable that are endorsed or discounted by the company at the end of the period but are not mature on the balance sheet date
Unit: yuan
||||
|-|-|-|
||Amount derecognized at the end of the|Amount note derecognized at the end of|
|Item|||
||period|the period|
|Bank acceptance bill|52,112,168.54|0.00|
|Total|52,112,168.54|0.00|

 3. Accounts receivable
(1) Disclosure of accounts receivable by categories
Unit: yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||||Provision for bad||||||||
||Book balance|||||Book balance||Provision for bad debt|||
|Category|||debt||Book||||||
|||||||||||Book value|
|||||Provision|value||||Provision||
||Amount|Ratio|Amount|||Amount|Ratio|Amount|||
|||||ratio|||||ratio||
|Accounts receivable|||||||||||
|which are grouped|||||||||||
|according to credit|932,039,||47,130,5||884,909,0|858,763||43,117,58||815,645,75|
|||99.73%||5.06%|||99.74%||5.02%||
|risk features and for|535.47||22.70||12.77|,336.37||1.69||4.68|
|which provision for|||||||||||
|bad debt is made|||||||||||
|Accounts receivable|||||||||||
|whose single|||||||||||
|amounts are small|||||||||||
||2,493,58||2,493,58|||2,220,4||2,220,496|||
|but for which||0.27%||100.00%|0.00||0.26%||100.00%|0.00|
||9.80||9.80|||96.62||.62|||
|provision for bad|||||||||||
|debt is separately|||||||||||
|made|||||||||||
||934,533,||49,624,1||884,909,012.77|860,983||45,338,07||815,645,754.68|
|Total||100.00%||5.31%|||100.00%||5.27%||
||125.27||12.50|||,832.99||8.31|||

 Accounts receivable whose single amounts are large and for which provision for bad debt is separately made at the end of the period:□ Applicable√ Not applicable
In the group, accounts receivable for which provision for bade debt are made by aging-of-accounts-receivable method:
√ Applicable□ Not applicable
Unit: yuan
2017 Annual Report
|||||
|-|-|-|-|
||Closing balance|||
|Age||||
||Accounts receivable|Provision for bad debt|Provision ratio|
|Accounts receivable due within one year||||
|Subtotal of accounts receivable||||
||927,992,733.55|46,399,636.66|5.00%|
|due within one year||||
|1-2 years|2,664,303.53|266,430.36|10.00%|
|2-3 years|1,237,061.92|371,118.58|30.00%|
|Over 3 years|145,436.47|93,337.10|64.18%|
|3-4 years|76,706.96|38,353.49|50.00%|
|4-5 years|68,729.51|54,983.61|80.00%|
|Total|932,039,535.47|47,130,522.70|5.06%|

 Description of the basis of grouping:
Accounts receivable of the same age have similar credit risk characteristics.
In the group, the accounts receivable for which provision for bad debt is made by the percentage-of-balance method:
□ Applicable√ Not applicable
In the portfolios, accounts receivable for which provision for bad debt is made by other methods:
(2) Provision for bad debt made, recovered, or reversed in the current period
The provision for bad debt increases by RMB 420,382.55 for business combination not under common control in the current period; the provision for bad debt in the amount of RMB 4,491,422.56 yuan is made in the current period; and RMB 0.00 yuan of the provision for bad debt is recovered or reversed in the current period.
Among them, provisions for bad debt whose recovered or reversed amounts are large in the current period are:
Unit: yuan
||||
|-|-|-|
|Name of the entity|Recovered or reversed amount|Means of recovery|

(3) Accounts receivable actually written off in the current period
Unit: yuan
|||
|-|-|
|Item|Amount written off|
|Accounts receivable|625,770.92|

 Of them, significant accounts receivable written off include:
Unit: yuan
|||||||
|-|-|-|-|-|-|
||||||Amount arising from|
||Nature of the|||Write-off procedures||
|Name of the entity||Amount written off|Write-off reasons||related-party|
||account receivable|||performed||
||||||transaction or not|

Description of write-off of accounts receivable:
2017 Annual Report (4) Top 5 accounts receivable in term of closing balance collected as per debtors
|||||
|-|-|-|-|
|Debtor|Book balance|Proportion in the balance ofaccounts receivable|Provision for bad debt|
|No. 1|184,054,231.93|19.69%|9,202,918.96|
|No. 2|173,966,306.59|18.62%|8,698,315.33|
|No.3|45,409,205.50|4.86%|2,270,460.28|
|No. 4|38,441,674.46|4.11%|1,922,083.72|
|No. 5|38,107,381.33|4.08%|1,905,369.07|
|Subtotal|479,978,799.81|51.36%|23,999,147.36|

4. Advance payments
(1) Advance payments presented by ages
Unit: yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Age|||||
||Amount|Ratio|Amount|Ratio|
|Within 1 year|198,328,892.96|69.95%|226,593,287.73|77.61%|
|1-2 years|56,723,653.42|20.01%|62,704,684.15|21.48%|
|2-3 years|28,413,652.41|10.02%|2,628,587.26|0.90%|
|Over 3 years|50,590.50|0.02%|36,449.50|0.01%|
|Total|283,516,789.29|--|291,963,008.64|--|

Reasons for untimely settlement of advance payment whose age is over one year and whose amount is significant:
||||
|-|-|-|
|Entity|Advance payment whoseage is over one year|Reason for no carry-over|
|TOEI ANIMATION CO., LTD.|20,294,889.79|Advance payment for new productdesign, and the game is not released.|
|Longzhang Animation (Shanghai)Co., Ltd.|14,485,783.74|Advance payment for entrusted R&D,and the game is not released.|
|Tencent Technology (Shenzhen)Co., Ltd.|6,937,000.00|Prepaid royalty, and the game is notreleased.|
|Chinese Gamer InternationalCorporation|5,000,000.00|Advance payment for new productdesign, and the game is not released.|
|LEDO (HK)CO.,LIMITED.|4,535,092.02|Advance payment for game sharing, andthe game is not releases.|
|Total|51,252,765.55||

2017 Annual Report (2) Advance payments whose closing balance is within top five and which are collected by payees of the advance payments
||||
|-|-|-|
|Entity|Book balance|Proportion in the balance of advancepayment|
|No. 1|26,031,189.79|9.16%|
|No. 2|20,670,730.34|7.27%|
|No. 3|14,485,783.74|5.10%|
|No. 4|11,920,123.43|4.19%|
|No. 5|10,050,128.69|3.54%|
|Total|83,157,955.99|29.26%|

Additional descriptions:
Provision for bad debt increased by RMB 0.00 yuan for business combination not under common control in the current period. Provision for bad debt in the amount of RMB 720,439.08 yuan was made in the current period, and the provision for bad debt in the amount of RMB 11,934,738.90 yuan was written off in the current period.
5. Interests receivable
(1) Classification of interest receivable
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Time deposit|582,592.17|0.00|
|Total|582,592.17||

6. Other receivables
(1) Disclosure of other receivables by categories
Unit: yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||||Provision for bad||||||||
||Book balance|||||Book balance||Provision for bad debt|||
|Category|||debt||Book||||||
|||||||||||Book value|
|||||Provision|value||||Provision||
||Amount|Ratio|Amount|||Amount|Ratio|Amount|||
|||||ratio|||||ratio||
|Other receivables|||||||||||
||411,171,||23,059,3||388,111,9|131,367||8,705,376||122,662,61|
|which are grouped||100.00%||5.61%|||100.00%||6.63%||
||304.86||85.01||19.85|,994.36||.34||8.02|
|according to credit|||||||||||

2017 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|risk features and for|||||||||||
|which provision for|||||||||||
|bad debt is made|||||||||||
||411,171,||23,059,3||388,111,919.85|131,367||8,705,376||122,662,618.02|
|Total||100.00%||5.61%|||100.00%||6.63%||
||304.86||85.01|||,994.36||.34|||

 Other receivables whose single amounts are significant and for which provision for bad debt is separately made at the end of the period:
□ Applicable√ Not applicable
In the portfolio, other receivables for which provision for bade debt is made by aging-of-other-receivables method:
√ Applicable□ Not applicable
Unit: yuan
|||||
|-|-|-|-|
||Closing balance|||
|Age||||
||Other receivables|Provision for bad debt|Provision ratio|
|Accounts receivable due within one year||||
|Subtotal of accounts receivable||||
||396,403,847.19|19,820,192.36|5.00%|
|due within one year||||
|1-2 years|11,706,554.31|1,170,655.44|10.00%|
|2-3 years|359,145.00|107,743.50|30.00%|
|Over 3 years|2,701,758.36|1,960,793.71|72.57%|
|3-4 years|670,709.95|335,354.98|50.00%|
|4-5 years|2,028,048.41|1,622,438.73|80.00%|
|Over 5 years|3,000.00|3,000.00|100.00%|
|Total|411,171,304.86|23,059,385.01|5.61%|

 Description of the basis of grouping:
Accounts receivable of the same age have similar credit risk characteristics.
In the portfolio, other receivables for which provision for bad debt is made by the percentage-of-balance method:
□ Applicable√ Not applicable
In the portfolios, other receivables for which provision for bad debt is made by other methods:
□ Applicable√ Not applicable
(2) Provisions for bad debt made, recovered, or reversed in the current period
The provision for bad debt increases by RMB 483.908.03 yuan for business combination not under common control in the current period; the provision for bad debt in the amount of RMB 13,871,106.48 yuan is made in the current period; and RMB 0.00 yuan of the provision for bad debt is recovered or reversed in the current period.
Among them, provisions for bad debt whose recovered or reversed amounts are of significance in the current period are:
Unit: yuan
2017 Annual Report
||||
|-|-|-|
|Name of the entity|Recovered or reversed amount|Means of recovery|

(3) Other receivables actually written off in the current period
Unit: yuan
|||
|-|-|
|Item|Amount written off|
|Other receivables|1,005.84|

 Of them, significant other receivables written off include:
Unit: yuan
|||||||
|-|-|-|-|-|-|
||||||Amount arising from|
||Nature of other|||Write-off procedures||
|Name of the entity||Amount written off|Write-off reasons||related-party|
||receivables|||performed||
||||||transaction or not|

 Description of write-off of other receivables:
(4) Classification of other receivables by nature
Unit: yuan
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Deposit, earnest money, and reserve|45,432,385.25|32,683,728.43|
|Investment in films||20,000,000.00|
|Intercompany lending|267,459,561.64|1,500,000.00|
|Receivables from disposal of fixed assets||7,700,000.00|
|Investment margin||65,000,000.00|
|Receivable sharing and royalty|33,849,014.57||
|Equity-related receivables|57,768,000.00||
|Others|6,662,343.40|4,484,265.93|
|Total|411,171,304.86|131,367,994.36|

 (5) Top 5 other receivables in term of closing balance collected as per debtors
Unit: yuan
|||||||
|-|-|-|-|-|-|
|||||Proportion in total|Closing balance of|
|Entity|Nature|Closing balance|Age|closing balance of|provision for bad|
|||||other receivables|debt|
|Shenzhen Zhonghui||||||
||Intercompany|||||
|Television Culture||266,543,561.64|Within 1 year|64.83%|13,327,178.08|
||lending|||||
|Communication Co.,||||||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Ltd.||||||
|Zhongnan Red||||||
||Receivables from|||||
|Culture Group Co.,||42,768,000.00|Within 1 year|10.40%|2,138,400.00|
||equity disposal|||||
|Ltd.||||||
|Tibet Yifu|Deposit, earnest|||||
|||14,200,000.00|Within 1 year|3.45%|710,000.00|
|Advertising Co., Ltd.|money, and reserve|||||
|Shanghai Quwei||||||
||Accounts to be|||||
|Network Technology||12,792,458.57|Within 1 year|3.11%|639,622.93|
||recovered|||||
|Co., Ltd.||||||
|Shanghai Fizeo|Deposit, earnest|||||
|||10,000,000.00|1-2 years|2.43%|1,000,000.00|
|Advertising Co., Ltd.|money, and reserve|||||
|Total|--|346,304,020.21|--|84.22%|17,815,201.01|

 7. Inventory
Shall the company comply with the disclosure requirements for the real estate industry?
No
(1) Classification of inventory
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Falling price|||Falling price||
||Book balance||Book value|Book balance||Book value|
|||reserve|||reserve||
|Raw materials|54,932,578.33||54,932,578.33|22,718,587.77||22,718,587.77|
|Products|||||||
||3,074,467.07||3,074,467.07|1,289,419.12||1,289,419.12|
|in-progress|||||||
|Goods on hand|45,497,455.50|1,676,415.59|43,821,039.91|49,805,352.24|2,331,433.59|47,473,918.65|
|Total|103,504,500.90|1,676,415.59|101,828,085.31|73,813,359.13|2,331,433.59|71,481,925.54|

 Shall the company comply with the disclosure requirements of the Guidelines of Shenzhen Stock Exchange for Industrial Information Disclosure No. 4– Listed Company Engaged in Seeds and Planting Businesses?
No
(2) Inventory falling price reserves
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
|||Increase in the current period||Decrease in the current period|||
|Item|Opening balance|||||Closing balance|
|||Withdrawal|Others|Transfer or|Others||

2017 Annual Report
||||||
|-|-|-|-|-|
||||write-off||
|Goods on hand|2,331,433.59|66,962.78|721,980.78|1,676,415.59|
|Total|2,331,433.59|66,962.78|721,980.78|1,676,415.59|

||||
|-|-|-|
|Item|Basis for inventory falling-price reserve|Reason for inventory falling-price reservereversed or written off in the current period|
|Goods on hand|Realizable net value is lower than the book value.|For the inventory sold, inventory falling-pricereserve is written off.|

(3) Description of inclusion of the amount of borrowing costs capitalized in closing balance of inventory No
(4) Completed and unaccounted assets formed from construction contract at the end of the period
Unit: yuan
|||
|-|-|
|Item|amount|

Additional descriptions:
8. Held-for-sale Assets
Unit: yuan
||||||
|-|-|-|-|-|
||Book value at the end of||||
|Item||Fair value|Expected disposal costs|Expected disposal time|
||the period||||
|Long-term equity|||||
||1,313,076.61|4,000,000.00|0.00|December 31, 2018|
|investment to be sold|||||
|Available-for-sale|||||
||73,753,637.73|86,778,813.76|0.00|December 31, 2018|
|financial assets to be sold|||||
|Total|75,066,714.34|90,778,813.76|0.00|--|

Additional descriptions:
The said assets are expected to be sold in the following 12 months.
9. Other current assets
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Wealth investment product of bank|110,000,000.00|170,000,000.00|
|Remaining VAT credit and VAT to be|76,813,938.41|60,590,757.42|

2017 Annual Report
||||
|-|-|-|
|credited|||
|VAT prepaid|4,010,401.52|4,357,504.47|
|Performance compensation receivable|401,364,984.06||
|Total|592,189,323.99|234,948,261.89|

 Additional descriptions:
The performance compensation receivable means the amount receivable by the company according to the profit compensation agreement entered into by the company and the original shareholders, Yang Dongmai, Chen Wei, and Zhangshu Wangzhong Investment Management Center (Limited Partnership) when the company acquired68.43% of the share in Shanghai Mokun in the current period. According to the calculation method agreed in the profit compensation agreement and in light with the audited net profits attributable to shareholders of parent company achieved by Shanghai Mokun in 2016 (the performance undertaking was fulfilled) and 2017, net of non-recurring profits and losses, the above three original shareholders of Shanghai Mokun shall compensate the company RMB 401,364,984.06 yuan in 2017.
10. Available-for-sale financial assets
(1) Details of available-for-sale financial assets
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item|Book balance|Provision for|||Provision for||
||||Book value|Book balance||Book value|
|||impairment|||impairment||
|Available-for-sale equity|894,281,586.86||||||
|||11,800,000.00|882,481,586.86|796,868,643.78|11,800,000.00|785,068,643.78|
|instrument:|||||||
|Measured at fair|57,541,101.92||||||
||||57,541,101.92|5,445,472.73||5,445,472.73|
|value|||||||
|Measured at cost|836,740,484.94|11,800,000.00|824,940,484.94|791,423,171.05|11,800,000.00|779,623,171.05|
|Total|894,281,586.86|11,800,000.00|882,481,586.86|796,868,643.78|11,800,000.00|785,068,643.78|

 (2) Available-for-sale financial assets measured at fair value at the end of the period
Unit: yuan
|||||
|-|-|-|-|
|Classification ofavailable-for-salefinancial assets||||
||Available-for-sale equity|Available-for-sale debt||
||||Total|
||instrument|instrument||
|Cost of equity instrument||||
|/ amortized cost of debt|81,100,692.72||81,100,692.72|
|instrument||||
|Fair value|57,541,101.92||57,541,101.92|

2017 Annual Report
||||
|-|-|-|
|Aggregate variation in|||
|fair value recorded in|||
||-23,559,590.80|-23,559,590.80|
|other comprehensive|||
|incomes|||

(3) Available-for-sale financial assets measured at costs at the end of the period
Unit: yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Provision for impairment||||Shareholdi|Cash|
||||Decrease||||Decrease||ng ratio in|dividend|
|Invested||Increase in||||Increase in|||||
||||in the||||in the||the|in the|
|entity|Opening|the current||Closing|Opening|the current||Closing|||
||||current||||current||invested|current|
|||period||||period|||||
||||period||||period||enterprise|period|
|Shenzhen|||||||||||
|Mokylin|60,000,000|||60,000,000||||||1,582,261.|
||||||||||1.95%||
|Technolog|.00|||.00||||||90|
|y Co., Ltd.|||||||||||
|Tianjin|||||||||||
|Purple|||||||||||
|Dragon|||||||||||
|Singular|||||||||||
||60,000,000||34,735,789|25,264,211|||||||
|Point|||||||||2.00%||
||.00||.00|.00|||||||
|Interactive|||||||||||
|Entertainm|||||||||||
|ent Co.,|||||||||||
|Ltd.|||||||||||
|Hangzhou|||||||||||
|Southern|69,996,897||69,996,897||||||||
|Pictures|.11||.11||||||||
|Co., Ltd.|||||||||||
|Chengdu|||||||||||
|Jule|||||||||||
||100,000.00|||100,000.00|100,000.00|||100,000.00|8.00%||
|Technolog|||||||||||
|y Co., Ltd.|||||||||||
|Beijing|||||||||||
|Jizhi|||||||||||
||6,000,000.|||6,000,000.|6,000,000.|||6,000,000.|||
|Xunyou|||||||||10.00%||
||00|||00|00|||00|||
|Technolog|||||||||||
|y Co., Ltd.|||||||||||
|Shenzhen|50,000,000|||50,000,000|||||8.89%||

2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|QiFun|.00||.00||||
|Network|||||||
|Corp. Ltd.|||||||
|Guangzho|||||||
|u|||||||
||4,000,000.||4,000,000.|4,000,000.|4,000,000.||
|Joyegame||||||15.00%|
||00||00|00|00||
|Software|||||||
|Co., Ltd.|||||||
|Chengdu|||||||
|Pengwan|5,000,000.|5,000,000.|||||
|Technolog|00|00|||||
|y Co., Ltd.|||||||
|Suzhou|||||||
|Youge|||||||
|Hulian|||||||
|Venture|||||||
||5,000,000.||5,000,000.||||
|Investment||||||2.98%|
||00||00||||
|Center|||||||
|(Limited|||||||
|Partnershi|||||||
|p)|||||||
|Chengdu|||||||
|91ACT|||||||
||8,000,000.|8,000,000.|||||
|Technolog|||||||
||00|00|||||
|y|||||||
|Company|||||||
|Guangzho|||||||
|u Xiaoyi|||||||
|Network|200,000.00||200,000.00|200,000.00|200,000.00|10.00%|
|Technolog|||||||
|y Co., Ltd.|||||||
|Xiamen|||||||
|Intensive|||||||
||8,000,000.||8,000,000.||||
|Joint||||||10.00%|
||00||00||||
|Technolog|||||||
|y Co., Ltd.|||||||
|Beijing|||||||
|Chinese|||||||
||50,000,000||50,000,000||||
|Anci||||||16.67%|
||.00||.00||||
|Equity|||||||
|Investment|||||||

2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|Fund|||||||
|Manageme|||||||
|nt Center|||||||
|(Limited|||||||
|Partnershi|||||||
|p)|||||||
|Hunan|||||||
|Tianlei|||||||
||1,500,000.|1,500,000.|1,500,000.|1,500,000.|||
|Network|||||10.00%||
||00|00|00|00|||
|Technolog|||||||
|y Co., Ltd.|||||||
|Shanghai|||||||
|Mango|||||||
|Creative|||||||
||240,000,00|240,000,00||||8,769,681.|
|Equity|||||7.78%||
||0.00|0.00||||68|
|Investment|||||||
|Fund|||||||
|(L.P.)|||||||
|Beijing|||||||
|Colorful|||||||
||5,000,000.|5,000,000.|||||
|Game|||||8.54%||
||00|00|||||
|Technolog|||||||
|y Co., Ltd.|||||||
|Jiangsu|||||||
|Mingtong|||||||
|Informatio|50,000,000|50,000,000|||||
||||||5.00%||
|n|.00|.00|||||
|Technolog|||||||
|y Co., Ltd.|||||||
|Zhongshen|||||||
|g Chunqiu|||||||
|Film and|||||||
||9,000,000.|9,000,000.|||||
|TV|||||5.00%||
||00|00|||||
|Culture|||||||
|(Beijing)|||||||
|Co., Ltd.|||||||
|Shanghai|||||||
|Mango|||||||
||42,000,000|42,000,000|||||
|Interactive|||||7.00%||
||.00|.00|||||
|Entertainm|||||||
|ent|||||||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Technolog||||||
|y Co., Ltd.||||||
|Archiact||||||
||20,587,940|6,858,800.|6,858,800.|20,587,940||
|Interactive|||||10.00%|
||.96|00|00|.96||
|Ltd.||||||
|Tianjin||||||
|Digital||||||
|Color|80,000,000|||80,000,000||
||||||1.55%|
|Interactive|.00|||.00||
|Technolog||||||
|y Co., Ltd.||||||
|Tianshe||||||
|(Shanghai)||||||
||10,000,000|||10,000,000||
|Culture &|||||18.30%|
||.00|||.00||
|Media Co.,||||||
|Ltd.||||||
|Shanghai||||||
|Quwei||||||
||7,000,000.|||7,000,000.||
|Network|||||4.75%|
||00|||00||
|Technolog||||||
|y Co., Ltd.||||||
|Antic||||||
|gameworl|38,332.98|||38,332.98|5.00%|
|d co.,ltd||||||
|X.D.||||||
|||100,050,00||100,050,00||
|Network|||||2.38%|
|||0.00||0.00||
|Co., Ltd.||||||
|Najia||||||
|Technolog||||||
|||40,000,000||40,000,000||
|y|||||7.20%|
|||.00||.00||
|(Shenzhen||||||
|) Co., Ltd.||||||
|Shenzhen||||||
|Zen-game||18,000,000||18,000,000||
||||||2.78%|
|Technolog||.00||.00||
|y Co., Ltd.||||||
|Haojiahuo||||||
|Media||5,000,000.||5,000,000.||
||||||20.00%|
|Fund I||00||00||
|Partners||||||

2017 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|(Limited|||||||||||
|Partnershi|||||||||||
|p)|||||||||||
|Shenzhen|||||||||||
|Chengwan|||||||||||
|||3,000,000.|3,000,000.|||3,000,000.|3,000,000.||||
|Network|||||||||||
|||00|00|||00|00||||
|Technolog|||||||||||
|y Co., Ltd.|||||||||||
||791,423,17|172,908,80|127,591,48|836,740,48|11,800,000|3,000,000.|3,000,000.|11,800,000|--|10,351,943|
|Total|||||||||||
||1.05|0.00|6.11|4.94|.00|00|00|.00||.58|

 (4) Variation in impairment of available-for-sale financial assets in the reporting period
Unit: yuan
|||||
|-|-|-|-|
|Classification of||||
||Available-for-sale equity|Available-for-sale debt||
|available-for-sale|||Total|
||instrument|instrument||
|financial assets||||
|Opening balance of the||||
||11,800,000.00||11,800,000.00|
|provision for impairment||||
|Withdrawal in current||||
||3,000,000.00||3,000,000.00|
|period||||
|Decrease in the current||||
||3,000,000.00||3,000,000.00|
|period||||
|Closing balance of the||||
||11,800,000.00||11,800,000.00|
|provision for impairment||||

11. Long-term equity investment
Unit: yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease in the current period|||||||||Closingbalanceofprovisionforimpairment|
|||||Gains or||||||||
|||||losses on||||||||
||||||Adjustme|||||||
|||Additiona||investmen|||Issuing|Provision||||
|Invested|Opening||Negative||nt to other|Variation||||Closing||
|||l||t|||cash|for||||
|entity|balance||investmen||comprehe|in other|||Others|balance||
|||investmen||recognize|||dividends|impairme||||
||||t||nsive|incomes||||||
|||t||d under|||or profits|nt||||
||||||incomes|||||||
|||||the equity||||||||
|||||law||||||||
|I. Cooperative enterprises||||||||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|II. Associated enterprises|||||||||
|Yangzhou|||||||||
|Fuhai|||||||||
|Sanqi|||||||||
|Internet||50,000,00|||||50,000,00||
|Culture||0.00|||||0.00||
|Investme|||||||||
|nt Center|||||||||
|(L.P.)|||||||||
|Chengdu|||||||||
|Mixiusi|||||||||
|||||||||2,205,871|
|Technolo|||||||||
|||||||||.87|
|gy Co.,|||||||||
|Ltd.|||||||||
|Shenzhen|||||||||
|EONE|||||||||
|Network|4,338,029|||1,192,297|||5,530,326||
|Technolo|.22|||.18|||.40||
|gy Co.,|||||||||
|Ltd.|||||||||
|Shanghai|||||||||
|Aurora|||||||||
|Network|24,850,47||25,143,47|293,000.8|||||
||||||||0.00||
|Technolo|3.57||4.43|6|||||
|gy Co.,|||||||||
|Ltd.|||||||||
|Shanghai|||||||||
|Tingting|||||||||
|Network|7,870,181|||-1,151,77||6,718,402||6,718,402|
|Technolo|.20|||8.70||.50||.50|
|gy Co.,|||||||||
|Ltd.|||||||||
|Shanghai|||||||||
|Aoting|||||||||
|network||||||||2,978,876|
|Technolo||||||||.18|
|gy Co.,|||||||||
|Ltd.|||||||||
|Shanghai|||||||||
||2,661,827|||-1,808,70|1,609,702||2,462,825||
|Menggon|||||||||
||.62|||4.17|.28||.73||
|gfang|||||||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|Network||||||||
|Technolo||||||||
|gy Co.,||||||||
|Ltd.||||||||
|Beijing||||||||
|Zhuayou||||||||
|Interactiv||||||||
|e|4,951,569|-76,654.7||4,874,914|||4,874,914|
|Network|.26|1||.55|||.55|
|Technolo||||||||
|gy Co.,||||||||
|Ltd.||||||||
|Wuhan||||||||
|Yihua||||||||
|Kaitian||||||||
|Culture|5,107,618|-1,045,75|3,081,218||-1,313,07|5,830,002||
|and|.78|7.92|.74||6.61|.99||
|Communi||||||||
|cation||||||||
|Co., Ltd.||||||||
|Longzhan||||||||
|g||||||||
|Network||||||||
|Technolo|5,979,810|-257,493.||||5,722,316||
|gy|.31|62||||.69||
|(Shanghai||||||||
|) Co.,||||||||
|Ltd.||||||||
|Shenzhen||||||||
|Zhanlong||||||||
|Interactiv||||||||
|e||||||||
||9,483,047|-2,169,47||||7,313,570||
|Entertain||||||||
||.02|6.51||||.51||
|ment||||||||
|Technolo||||||||
|gy Co.,||||||||
|Ltd.||||||||
|Huai’an||||||||
|Sanqi|101,280,0|397,840.8||||101,677,8||
|Jianyi|00.00|0||||40.80||
|Pan-Inves||||||||

2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|tment|||||||
|Managem|||||||
|ent|||||||
|Center|||||||
|(L.P.)|||||||
|Xiamen|||||||
|Yiqi|||||||
|Investme|||||||
||1,875,924|||249,334.0||2,125,258|
|nt|||||||
||.67|||7||.74|
|Managem|||||||
|ent Co.,|||||||
|Ltd.|||||||
|Mango|||||||
|(Xiamen)|||||||
|Incubatio|||||||
|n and|||||||
||40,000,00|||-1,353,23||38,646,76|
|Equity|||||||
||0.00|||7.79||2.21|
|Investme|||||||
|nt Fund|||||||
|Partnershi|||||||
|p (L.P.)|||||||
|Shanghai|||||||
|Jueli|||||||
||31,828,20|||-2,098,33||29,729,86|
|Culture &|||||||
||7.79|||7.87||9.92|
|Media|||||||
|Co., Ltd.|||||||
|Shanghai|||||||
|Zheyuan|||||||
||84,456,68||85,000,00|543,312.0|||
|Culture &||||||0.00|
||7.93||0.00|7|||
|Media|||||||
|Co., Ltd.|||||||
|Chengdu|||||||
|91ACT|||||||
|||11,500,00||1,001,260|11,000,00|23,501,26|
|Technolo|||||||
|||0.00||.32|0.00|0.32|
|gy|||||||
|Company|||||||
|Chengdu|||||||
|Modu|||||||
|||12,000,00||-1,030,02||10,969,97|
|Technolo|||||||
|||0.00||5.53||4.47|
|gy Co.,|||||||
|Ltd.|||||||

2017 Annual Report
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Chengdu||||||||||
|Mofei||||||||||
|||12,000,00||-1,037,50||||10,962,49||
|Technolo||||||||||
|||0.00||1.22||||8.78||
|gy Co.,||||||||||
|Ltd.||||||||||
|Shanghai||||||||||
|Fuhai||||||||||
|Sanqi||||||||||
|Investme||3,000,000||||||3,000,419||
|||||419.01||||||
|nt||.00||||||.01||
|Managem||||||||||
|ent Co.,||||||||||
|Ltd.||||||||||
|Shanghai||||||||||
|11wan||||||||||
|Network||23,500,00||-1,633,14||||21,866,85||
|Technolo||0.00||0.77||||9.23||
|gy Co.,||||||||||
|Ltd.||||||||||
|Penta||||||||||
||980,182.9|||-467,875.||||530,972.6||
|Game|||||||18,665.48|||
||4|||79||||3||
|Co., Ltd.||||||||||
|Chengdu||||||||||
|Pengwan||||||||||
|||33,021,82||2,076,426|||22,003,82|57,102,07||
|Technolo||||||||||
|||3.48||.17|||4.00|3.65||
|gy Co.,||||||||||
|Ltd.||||||||||
|Shanghai|460,904,2||458,141,0|-2,763,23||||||
|||||||||0.00||
|Mokun|79.49||44.54|4.95||||||
|Longzhan||||||||||
|g||||||||||
|Animatio||||||||||
|n||||||||||
|(Shanghai||||||||||
|) Co.,||||||||||
|Ltd.||||||||||
||786,567,8|145,021,8|568,284,5|-11,139,3|4,690,921|11,593,31|31,709,41|376,972,8|16,778,06|
|Subtotal||||||||||
||39.80|23.48|18.97|29.07|.02|7.05|2.87|32.08|5.10|
||786,567,8|145,021,8|568,284,5|-11,139,3|4,690,921|11,593,31|31,709,41|376,972,8|16,778,06|
|Total||||||||||
||39.80|23.48|18.97|29.07|.02|7.05|2.87|32.08|5.10|

2017 Annual Report Additional descriptions
(1) When the company acquired the remaining68.43% of Shanghai Mokun this year, it controlled Shanghai Mokun. Therefore, it is deemed that the investment originally accounted by equity method was disposed according to its fair value.
(2) The company increased its investment in Chengdu Pengwan Technology Co., Ltd. and Chengdu 91ACT Technology Co., Ltd. this year and thus had significant influence on them. The investment originally recorded in available-for-sale financial assets were re-measured and carried over to long-term equity investment accounted by equity method.
(3) As of the end of this reporting period, the excess deficit unrecognized by Longzhang Animation (Shanghai) Co., Ltd. amounted to RMB 5,201,916.08 yuan.
12. Fixed Assets
(1) Details of fixed assets
Unit: yuan
|||||||
|-|-|-|-|-|-|
||Housing and|Machinery and||Electronics and||
|Item|||Means of transport||Total|
||building|equipment||office supplies||
|I. Original book||||||
|value||||||
|1.Opening balance|135,597,500.07|299,583,305.52|15,091,603.97|95,169,527.99|545,441,937.55|
|2.Increase in||||||
||30,569,403.66|40,566,606.54|5,143,156.31|27,550,787.52|103,829,954.03|
|current period||||||
|(1) Purchase||24,551,151.32|1,224,917.85|21,445,588.39|47,221,657.56|
|(2) Construction in||||||
||30,577,453.66|16,015,455.22|||46,592,908.88|
|progress||||||
|(3) Increase of||||||
|business|||3,918,238.46|6,097,149.13|10,015,387.59|
|combination||||||
|3.Decrease in||||||
||1,558,469.66|18,999,213.43|2,195,248.91|2,686,244.15|25,439,176.15|
|current period||||||
|(1) Disposal or||||||
||1,558,469.66|18,999,213.43|2,195,248.91|2,686,244.15|25,439,176.15|
|scrap||||||
|4.Ending balance|164,616,484.07|321,150,698.63|18,039,511.37|120,026,021.36|623,832,715.43|
|II Accumulated||||||
|depreciation||||||
|1. Opening||||||
||35,534,828.04|162,506,051.43|8,817,796.12|67,091,882.46|273,950,558.05|
|balance||||||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|2.Increase in||||||
||5,002,917.82|28,634,373.59|2,815,578.65|22,434,579.26|58,887,449.32|
|current period||||||
|(1) Provision|5,002,917.82|28,634,373.59|2,430,373.57|18,846,246.22|54,913,911.20|
|(2) Increase of||||||
|business|||385,205.08|3,588,333.04|3,973,538.12|
|combination||||||
|3.Decrease in||||||
||895,265.07|13,567,664.27|2,085,486.45|2,140,985.52|18,689,401.31|
|current period||||||
|(1) disposal or||||||
||895,265.07|13,567,664.27|2,085,486.45|2,140,985.52|18,689,401.31|
|scrap||||||
|4.Ending balance|39,642,480.79|177,572,760.75|9,547,888.32|87,385,476.20|314,148,606.06|
|III. Provision for||||||
|impairment||||||
|1.Opening balance||||||
|2.Increase in||||||
|||17,288,222.20|||17,288,222.20|
|current period||||||
|(1) Provision||17,288,222.20|||17,288,222.20|
|3. Decrease in||||||
|current period||||||
|(1) Disposal or||||||
|scrap||||||
|4.Ending balance||17,288,222.20|||17,288,222.20|
|IV. Book value||||||
|1.Ending book||||||
||124,974,003.28|126,289,715.68|8,491,623.05|32,640,545.16|292,395,887.17|
|value||||||
|2.Opening book||||||
||100,062,672.03|137,077,254.09|6,273,807.85|28,077,645.53|271,491,379.50|
|value||||||

13. Construction in Progress
(1) Details of construction in progress
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||Provision for|||Provision for|Book value|
||Book balance||Book value|Book balance|||
|||impairment|||impairment||
|Second-phaseequipment project|||||||
||51,102,382.68|429,504.26|50,672,878.42|31,078,391.88||31,078,391.88|
|Total|51,102,382.68|429,504.26|50,672,878.42|31,078,391.88||31,078,391.88|

 (2) Details of current variation in important construction in progress
Unit: yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Openingbalance||||||||Including:amountofcapitalizedinterestsin thecurrentperiod|||
||||||||Proporti||||||
|||||Transfer-|||||Accumul||Capitaliz||
||||||||on of||||||
|||||ins of|Other||||ated||ation||
||||Increase||||accumul||||||
|||||fixed|decrease||||amount||ratio of||
||||in|||Closing|ated|Project||||Source|
|Project|Budget|||assets in|s in the||||of||interest||
||||current|||balance|project|progress||||of fund|
|||||the|current||||capitaliz||in the||
||||period||||investme||||||
|||||current|period||||ed||current||
||||||||nt in the||||||
|||||period|||||interests||period||
||||||||budget||||||
|Second-||31,078,391.88|||||||||||
|phase|||||||||||||
||||66,616,8|46,592,9||51,102,3||||||Others|
|equipme|||||||||||||
||||99.68|08.88||82.68|||||||
|nt|||||||||||||
|project|||||||||||||
|||||||||||||Others|
|||31,078,391.88|66,616,8|46,592,9||51,102,3|||||||
|Total|||||||--|--||||--|
||||99.68|08.88||82.68|||||||

(3) Provision for impairment of construction in progress in the current period
Unit: yuan
||||
|-|-|-|
|Item|Provision withdrawn in current period|Reason for withdrawal of provision|
|Second-phase equipment project|429,504.26|Realizable net value less than book value|
|Total|429,504.26|--|

Additional descriptions
2017 Annual Report 14. Intangible assets
(1) Details of intangible assets
Unit: yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Land use||Unpatented||Domain|Game||Office||
|Item||Patent||Edition fee|||Trademark||Total|
||right||technology||name|copyright||software||
|I. Original||||||||||
|book value||||||||||
|1.Opening|26,840,827.||||12,778,182.|87,914,583.|1,014,267.7|7,827,547.7|137,075,932|
|||345,593.94||354,930.00||||||
|balance|98||||04|37|1|8|.82|
|2.Increase||||||||||
|||||||14,374,586.||5,961,929.9|20,506,938.|
|in current||87,631.79|||||82,790.39|||
|||||||06||3|17|
|period||||||||||
|(1)||||||||5,949,549.9|6,451,472.1|
|||87,631.79||||331,500.00|82,790.39|||
|Purchase||||||||3|1|
|(2)||||||||||
|||||||7,663,076.0|||7,663,076.0|
|Internal||||||||||
|||||||6|||6|
|R&D||||||||||
|(3)||||||||||
|Increase of||||||6,380,010.0|||6,392,390.0|
|||||||||12,380.00||
|business||||||0|||0|
|combination||||||||||
|3.Decrease||||||||||
||||||||3,288.01||3,288.01|
|in current||||||||||
|period||||||||||
|(1)||||||||||
||||||||3,288.01||3,288.01|
|Disposal||||||||||
|4.Ending|26,840,827.||||12,778,182.|102,289,169|1,093,770.0|13,789,477.|157,579,582|
|||433,225.73||354,930.00||||||
|balance|98||||04|.43|9|71|.98|
|II.||||||||||
|Accumulate||||||||||
|d||||||||||
|amortizatio||||||||||
|n||||||||||
|1.Opening|4,499,882.0|60,351.11||353,680.11|1,757,000.1|50,241,477.|323,060.28|5,128,082.5|62,363,533.|

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|balance|3|||5|41||1|60|
|2.Increase|||||||||
||||||15,492,058.||2,294,594.9|19,092,972.|
|in current|539,494.56|27,952.15|1,249.89|638,909.16||98,712.96|||
||||||99||3|64|
|period|||||||||
|(1)|||||15,492,058.||2,284,690.9|19,083,068.|
||539,494.56|27,952.15|1,249.89|638,909.16||98,712.96|||
|Provision|||||99||9|70|
|(2)|||||||||
|Increase of|||||||||
||||||||9,903.94|9,903.94|
|business|||||||||
|combination|||||||||
|3.Decrease|||||||||
|in current||||||137.00||137.00|
|period|||||||||
|(1)|||||||||
|||||||137.00||137.00|
|Disposal|||||||||
|4.Ending|5,039,376.5|||2,395,909.3|65,733,536.||7,422,677.4|81,456,369.|
|||88,303.26|354,930.00|||421,636.24|||
|balance|9|||1|40||4|24|
|III.|||||||||
|Provision|||||||||
|for|||||||||
|impairment|||||||||
|1. Opening|||||30,440,779.|||30,847,743.|
||||||||406,963.12||
|balance|||||99|||11|
|2. Increase|||||||||
|in current|||||||377,358.34|377,358.34|
|period|||||||||
|(1)|||||||||
||||||||377,358.34|377,358.34|
|Provision|||||||||
|3. Ending|||||30,440,779.|||31,225,101.|
||||||||784,321.46||
|balance|||||99|||45|
|IV. Book|||||||||
|value|||||||||
|1. Closing|21,801,451.|||10,382,272.|6,114,853.0||5,582,478.8|44,898,112.|
|||344,922.47||||672,133.85|||
|book value|39|||73|4||1|29|
|2.Opening|22,340,945.|||11,021,181.|7,232,325.9||2,292,502.1|43,864,656.|
|||285,242.83|1,249.89|||691,207.43|||
|book value|95|||89|7||5|11|

2017 Annual Report At the end of the period, the ratio of the intangible assets formed through internal research and development to the balance of intangible assets is16.91%.
15. Development expenditures
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
|||Increase in current period||Decrease in current period|||
||||||Transferred i||
||Opening|Internal deve||Recognized||Ending|
|Item|||||||
||||||nto current||
||balance|lopment exp|Others|as intangible||balance|
||||||profits or lo||
|||enditure||assets|||
||||||sses||
|I|6,137,026.43|762,426.06|0.00|6,899,452.49|||
|II|763,623.57|||763,623.57|||
|III||3,951,558.23||||3,951,558.23|
|IV|1,788,455.40|118,714.20|||1,788,455.40|118,714.20|
|Total|8,689,105.40|4,832,698.49||7,663,076.06|1,788,455.40|4,070,272.43|

 Additional descriptions
16. Goodwill
(1) Original book value of goodwill
Unit: yuan
||||||
|-|-|-|-|-|
|Name of the||Increase in current period|Decrease in current period||
|invested entity or|||||
||Opening balance|Formed by busin||Ending balance|
|goodwill|||Disposal||
|||ess combination|||
|formation|||||
|Shanghai 37|||||
|Interactive|1,578,065,048.53|||1,578,065,048.53|
|Entertainment|||||
|ENP Games|1,911,913.34|||1,911,913.34|
|Chengdu|||||
||263,737.88|||263,737.88|
|Shengge|||||
|Shanghai Mokun||1,259,793,585.93||1,259,793,585.93|
|Total|1,580,240,699.75|1,259,793,585.93||2,840,034,285.68|

(2) Provision for impairment of goodwill
Unit: yuan
2017 Annual Report
||||||
|-|-|-|-|-|
|Name of the||Increase in current period|Decrease in current period||
|invested entity or|||||
||Opening balance|||Ending balance|
|goodwill||Provision|Disposal||
|formation|||||
|Chengdu|||||
||263,737.88|||263,737.88|
|Shengge|||||
|Shanghai Mokun||299,457,551.04||299,457,551.04|
|Total|263,737.88|299,457,551.04||299,721,288.92|

 The company shall specify the goodwill impairment test procedure, parameters, and recognition method of impairment loss on goodwill:
At the end of 2017, the book value of the goodwill formed by the aforesaid business combination has been allocated to the relevant asset group in a reasonable manner from the date of purchase, and the relevant asset group containing goodwill has been tested for impairment. The Company calculates the recoverable amount of the goodwill formed by the business combination in accordance with the present value of the estimated future cash flow, and determines the above-mentioned key data based on historical experience and market development forecast.
The Company will calculate the future recoverable amount of Shanghai Mokun Digital Technology Co., Ltd. based on the present value of the estimated future cash flow, and determine the above-mentioned key data based on historical experience and market development forecast. With reference to Evaluation Report (Huaxin Zhonghe Ping Bao Zi No. 1050) issued by Huaxin Zhonghe Assets Evaluation Co., Ltd., as the sum of the closing balance of goodwill and the fair value of identifiable net assets is higher than the appraised value of all shareholders' equity, the positive difference equals to the provision for impairment of goodwill made at the end of 2017. Except for the goodwill of Shanghai Mokun Digital Technology Co., Ltd., no impairment was found in other goodwill of the company upon test during the year.
Additional descriptions
17. Long-term deferred expenses
Unit: yuan
|||||||
|-|-|-|-|-|-|
|||Increase in the|Amortized amount|||
|Item|Opening balance|||Other decreases|Closing balance|
|||current period|in the current period|||
|Copyright royalty|95,486,474.35|67,226,410.32|82,738,231.09|5,153,546.92|74,821,106.66|
|Trademark||||||
||212,758.37||112,920.18||99,838.19|
|registration fee||||||
|Building renovation||||||
||6,267,424.64|1,777,105.52|3,162,385.42||4,882,144.74|
|cost||||||
|Total|101,966,657.36|69,003,515.84|86,013,536.69|5,153,546.92|79,803,089.59|

 Additional descriptions
2017 Annual Report 18. Deferred income tax assets / deferred income tax liabilities
(1) Deferred income tax assets without offset
Unit: yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Provisions for|||||
||36,779,247.42|7,231,974.30|24,316,216.59|5,325,124.20|
|impairment of assets|||||
|Deductible loss|3,304,795.02|826,198.75|||
|Changes in fair value of|||||
|available-for-sale|23,559,590.80|2,091,835.89|||
|financial assets|||||
|Accrued compensation|||||
||3,756,740.62|338,106.66|||
|for performance|||||
|Government subsidies|||||
|included in deferred|8,817,182.16|1,322,577.32|4,172,163.95|1,043,040.99|
|income|||||
|Total|76,217,556.02|11,810,692.92|28,488,380.54|6,368,165.19|

 (2) Details of unrecognized deferred income tax assets
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible temporary difference|114,160,721.60||
|Deducible losses|186,240,044.70|115,102,956.23|
|Total|300,400,766.30|115,102,956.23|

 (3) Deductible losses on unrecognized deferred tax assets due in the following years
Unit: yuan
|||||
|-|-|-|-|
|Year|Closing balance|Opening balance|Remarks|
|2018||||
|2019|5,191,066.43|10,025,154.51||
|2020|29,786,482.41|30,548,602.85||
|2021|53,635,799.65|74,529,198.87||

2017 Annual Report
|||||
|-|-|-|-|
|Years after 2021|97,626,696.21|||
|Total|186,240,044.70|115,102,956.23|--|

Additional descriptions:
19. Other non-current assets
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Prepayment for engineering equipment|68,399,174.14|22,090,794.35|
|Prepayment for equity|50,000,000.00|298,500,000.00|
|Prepayment for housing purchase|795,864,793.02||
|Total|914,263,967.16|320,590,794.35|

 Additional descriptions:
20. Short-term loans
(1) Classification of short-term loans
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Guaranteed borrowings|372,054,500.00|372,878,500.00|
|Total|372,054,500.00|372,878,500.00|

 Description of the classification of short-term loans:
The company classifies short-term loans according to the borrowing conditions for short-term loans.
21. Notes payable
Unit: yuan
||||
|-|-|-|
|Type|Closing balance|Opening balance|
|Banker’s acceptance bill||17,414,395.42|
|Total||17,414,395.42|

 The total amount of matured notes payable unpaid at the end of the current period is 0.00.
22. Accounts payable
(1) Presentation of accounts payable
Unit: yuan
2017 Annual Report
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Amount payable for materials|78,742,772.74|131,694,803.22|
|Game sharing payable|406,735,668.55|387,526,162.21|
|Internet promotion and traffic costs|||
||219,833,849.91|167,461,532.64|
|payable|||
|Other costs payable|36,480,682.13|14,030,619.93|
|Total|741,792,973.33|700,713,118.00|

 (2) Significant accounts payable whose age is over one year
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Reason for no payment or carry-down|
|Chengdu Molong Technology Co., Ltd|16,334,639.34|Settlement method is in negotiation|
|Shanghai Lingyao Network Technology|||
||3,472,410.00|Settlement method is in negotiation|
|Co., Ltd|||
|Total|19,807,049.34|--|

Additional descriptions:
23. Payments received in advance
(1) Presentation of payments received in advance
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Payment for goods received in advance|2,085,495.91|740,494.12|
|Game top-up received in advance|81,795,279.69|57,497,008.43|
|Sharing received in advance|1,005,959.24|1,442,444.40|
|Total|84,886,734.84|59,679,946.95|

 24. Payroll payable
(1) Presentation of payroll payable
Unit: yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|I. Short-term|||||
||81,585,709.27|586,309,688.88|555,086,412.23|112,808,985.92|
|compensation|||||

2017 Annual Report
||||||
|-|-|-|-|-|
|II. Post-employment|||||
|benefit – defined|243,576.53|36,417,719.81|36,064,510.76|596,785.58|
|contribution plan|||||
|III. Dismissal welfare|114,000.00|1,543,676.36|1,583,426.36|74,250.00|
|Total|81,943,285.80|624,271,085.05|592,734,349.35|113,480,021.50|

 (2) Presentation of short-term compensation
Unit: yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|1. Salary, bonus,|||||
||78,674,091.95|516,656,964.28|487,209,133.55|108,121,922.68|
|allowance, and subsidy|||||
|2. Employee welfare|||||
||5,763.16|29,813,468.13|29,819,231.29||
|expenses|||||
|3. Social insurance|||||
||169,523.89|18,479,368.51|18,306,127.47|342,764.93|
|premiums|||||
|Including: Medical|||||
||150,195.68|15,989,060.75|15,839,817.19|299,439.24|
|insurance premium|||||
|Work-related injury|||||
||6,437.23|538,528.07|538,732.12|6,233.18|
|insurance premium|||||
|Maternity insurance|||||
||12,890.98|1,664,893.84|1,649,188.85|28,595.97|
|premium|||||
|Major disease insurance|||||
|||286,885.85|278,389.31|8,496.54|
|premium|||||
|4. Housing provident|||||
||98,826.20|15,918,716.88|15,793,675.08|223,868.00|
|fund|||||
|5. Labor-union|||||
|expenditure and|2,637,504.07|5,441,171.08|3,958,244.84|4,120,430.31|
|personnel education fund|||||
|Total|81,585,709.27|586,309,688.88|555,086,412.23|112,808,985.92|

 (3) Presentation of defined contribution plan
Unit: yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|1. Basic endowment|226,973.86|35,237,516.94|34,882,248.45|582,242.35|

2017 Annual Report
||||||
|-|-|-|-|-|
|insurance|||||
|2. Unemployment|||||
||16,602.67|1,180,202.87|1,182,262.31|14,543.23|
|insurance premium|||||
|Total|243,576.53|36,417,719.81|36,064,510.76|596,785.58|

 Additional descriptions:
25. Taxes payable
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Value-added tax|22,778,212.15|20,166,324.01|
|Corporate income tax|31,249,164.08|26,758,616.95|
|Individual income tax|1,078,087.62|527,592.44|
|Urban construction and maintenance tax|929,920.78|2,540,913.79|
|Education surcharges|497,953.99|1,250,581.03|
|Local education surcharges|331,969.34|804,142.95|
|Property tax|454,278.16|455,002.54|
|Land use tax|253,945.28|253,945.34|
|Water conservancy fund|182,693.41|195,487.74|
|Stamp duty|485,653.80|371,327.30|
|River management fee|39,257.62|614.80|
|Embankment protection fee|179.24|179.23|
|Foreign income tax||402,862.35|
|Cultural construction costs||70,654.22|
|Total|58,281,315.47|53,798,244.69|

 Additional descriptions:
26. Interests payable
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Interest on the short-term loan|390,533.38|411,567.28|
|Total|390,533.38|411,567.28|

Information of important overdue interest:
Unit: yuan
2017 Annual Report
||||
|-|-|-|
|Borrowing entity|Overdue amount|Overdue reason|

Additional descriptions:
27. Other payables
(1) Other payables presented by natures of the accounts
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deposit and earnest money|7,650,158.00|1,650,000.00|
|Temporary collection receivable|2,000,000.00|499,955.79|
|Freight and storage fees|9,825,807.62|10,634,324.38|
|Investment payable|35,448,685.81|276,200,000.00|
|Others|6,647,368.83|4,182,355.01|
|Total|61,572,020.26|293,166,635.18|

 28. Non-current liabilities due within one year
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Long-term loans due within one year|28,117,893.57||
|Total|28,117,893.57||

Additional descriptions:
Non-current liabilities that are due within one year are corporate mortgage loans that are used by thecompany’s subsidiaries to purchase office space within one year.
29. Other current liabilities
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Temporary assessment of output tax|53,981,510.57|44,259,562.28|
|Performance compensation payable|3,756,740.62||
|Total|57,738,251.19|44,259,562.28|

 Increase or decrease in short-term bonds payable:
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Bondname|Nominal value|Issuance date|Bondterm|Issuanc|Openin|Issuanc|Interest|Premiu|Repay|Closingbalance|
|||||e|g|e in|provide|m or|ment in||
|||||amount|balance|current|d|discoun|current||

2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|period|period|according tonominal value|tamortization|t|period|period|
|||||amortiz|||
|||||ation|||

Additional description:
30. Long-term loans
(1) Classification of long-term loans
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Mortgaged or guaranteed loans|310,775,272.06||
|Total|310,775,272.06||

Description of the classification of long-term loans:
The long-term loans are mortgage loans used by the company's subsidiaries to purchase office space, and the company assumed joint and several liabilities for the loans.
Additional descriptions, including the interest rate collars:
The interest rate is5% above the benchmark interest rate for 5-year financial institutions' RMB loans.
31. Bonds payable
(1) Bonds payable
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Convertible corporate bonds|27,163,239.26|23,757,428.88|
|Total|27,163,239.26|23,757,428.88|

 (2) Increase / decrease in bonds payable (excluding preferred stock, perpetual capital securities, and other financial instruments classified as financial liabilities)
Unit: yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||Amount|Interestscreditedat parvalue|||Closingbalance|
||||||||||Repayme||
|||||||issued in||Amortizat|||
|Bond||Issuing|Bond|Issuing|Opening||||nt in the||
||Par value|||||the||ion of|||
|name||date|period|value|balance||||current||
|||||||current||premium|||
||||||||||period||
|||||||period|||||
|private|23,028,00||2021/12/1|20,237,72|20,368,37||1,151,400|1,768,572||23,288,349.08|
|||2016/12/2|||||||||
|convertibl|0.00|||0.27|7.02||.00|.06|||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|bonds|||||||||
|1st|||||||||
|private|3,831,571.35||2021/12/1||3,389,051.86|||3,874,890.18|
|onvertibl||||3,367,303||191,578.5|294,259.7||
|||2016/12/2|||||||
|bonds||||.68||7|5||
|2nd|||||||||
|Total|--|--|--|23,605,023.95|23,757,428.88|1,342,978.57|2,062,831.81|27,163,239.26|

 (3) Description of conditions and time of bond-for-share swap for convertible corporate bonds
The issuer of the convertible corporate bonds in this period is ENP Games, a subsidiary controlled by the company, whose convertible corporate bond holders can request conversion from the date of one year after the date of issue to one month before the expiry date. However, the conversion right may not be exercised within one year from the date of issuance.
32. Deferred income
Unit: yuan
|||||||
|-|-|-|-|-|-|
|||Increase in the|Decrease in the||Reason for|
|Item|Opening balance|||Closing balance||
|||current period|current period||formation|
|Government subsidy|4,172,163.95|5,235,700.00|590,681.78|8,817,182.17|Related to assets|
|Deferred income|||||Game royalty not|
||4,866,879.43|10,690,519.57|7,148,106.73|8,409,292.27||
|from royalty income|||||amortized|
|Total|9,039,043.38|15,926,219.57|7,738,788.51|17,226,474.44|--|

Projects involving government subsidies:
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
|||Amount of|Amount recorded|Amount recorded|||
|||||||In relation to|
|||additional|in non-operating|in other incomes|||
|Liability item|Opening balance||||Closing balance|assets/in relation|
|||subsidies in the|revenue in the|in the current|||
|||||||to incomes|
|||current period|current period|period|||
|Subsidy for|||||||
|automobile fuel|||||||
||780,000.08|||130,000.00|650,000.08|Related to assets|
|system R&D|||||||
|center project|||||||
|Subsidy for small|||||||
|and|||||||
|medium-sized|||||||
||180,347.19|||27,450.92|152,896.27|Related to assets|
|enterprises single|||||||
|equipment|||||||
|acquisition|||||||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Anhui Province||||||
|"6+1"||||||
|Independent||||||
|Innovation|798,633.33||98,800.00|699,833.33|Related to assets|
|Capacity||||||
|Construction||||||
|Subsidy Fund||||||
|Nanling County||||||
|Economic and||||||
|Trade Committee||||||
||433,333.35||50,000.00|383,333.35|Related to assets|
|Enterprise||||||
|Development||||||
|Special Fund||||||
|Provincial||||||
|Innovative||||||
|Enterprise R&D|242,812.50||27,750.00|215,062.50|Related to assets|
|Equipment||||||
|Subsidy||||||
|2015 Provincial||||||
|Special Funds for||||||
|the Construction|247,437.50||27,750.00|219,687.50|Related to assets|
|of Innovative||||||
|Provinces||||||
|Subsidies for||||||
|purchase of R&D|744,800.00||78,400.00|666,400.00|Related to assets|
|equipment||||||
|2016 Provincial||||||
|Special Funds for||||||
|the Construction|744,800.00||78,400.00|666,400.00|Related to assets|
|of Innovative||||||
|Provinces||||||
|Equipment||||||
|subsidy for||||||
|industrial||||||
|technology||||||
|reform project||||||
|||3,420,000.00|57,000.00|3,363,000.00|Related to assets|
|provided by the||||||
|strong province||||||
|construction fund||||||
|of Nanling||||||
|County Economic||||||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|and Information||||||
|Commission in||||||
|2017||||||
|Industrial reform||||||
|subsidy of||||||
|Nanling County||||||
|||1,682,700.00|14,022.50|1,668,677.50|Related to assets|
|Economic and||||||
|Information||||||
|Commission||||||
|Special fund for||||||
|innovative||||||
|provisions||||||
|construction of||||||
|Nanling County||133,000.00|1,108.36|131,891.64|Related to assets|
|Economic and||||||
|Information||||||
|Commission in||||||
|2017||||||
|Total|4,172,163.95|5,235,700.00|590,681.78|8,817,182.17|--|

 Additional descriptions:
33. Capital stock
Unit: yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase / decrease in current period (+/-)||||||
||Opening||||||Closing|
|||||Reserve-for-sh||||
|||Offering of||||||
||balance||Bonus shares|are swap|Others|Subtotal|balance|
|||new shares||||||
|Total number|2,084,794,788.00||||||2,148,110,844.00|
|||63,316,056.00||||63,316,056.00||
|of share||||||||

 Additional descriptions:
In this year, the company issued shares and paid cash to buy68.43% shares in Shanghai Mokun and49% shares in Jiangsu Zhiming, and raised funds by issuing 63,316,056.00 shares.
34. Other equity instruments
(1) Variations in preferred stock, perpetual debts, and other financial instruments outstanding at the end of the period
Unit: yuan
2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Outstanding|||Increase in the current||Decrease in the current||||
||Opening||||||Closing||
|financial|||period||period||||
|instruments|Qty.|Book value|Qty.|Book value|Qty.|Book value|Qty.|Book value|
|Convertible|||||||||
|corporate|||||||||
|bond equity|1|1,947,846.62|||||1|1,947,846.62|
|component|||||||||
|value|||||||||
|Total|1|1,947,846.62|||||1|1,947,846.62|

 Description of current increase or decrease in other equity instruments and reasons for the variation and the basis of related
accounting treatment:
Additional descriptions:
35. Capital reserves
Unit: yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|Capital surplus (share|||||
||931,765,345.03|1,251,820,587.00|218,356,526.65|1,965,229,405.38|
|premium)|||||
|Other capital reserves|2,719,254.26|4,690,921.02||7,410,175.28|
||934,484,599.29|||1,972,639,580.66|
|Total||1,256,511,508.02|218,356,526.65||

Additional descriptions, including descriptions of current increase and decrease and reasons for the variation:
(1) The increase in the current year of capital surplus includes the increase in capital reserve of RMB 1,148,009,452.24 yuan generated from thecompany’s issuing shares and raising funds to purchase68.43% equity in Shanghai Mokun and49% equity in Jiangsu Zhiming, the increase in capital reserve of RMB 85,836,485.00 yuan resulted from the equity incentive of Guangzhou Sanqi, a subsidiary held by the company, the increase in capital reserve of RMB 17,826,400.46 yuan resulted from the aquisition of part of a subsidiary of Shanghai Mokun by other investors, the increase in capital reserve of RMB 148,249.30 yuan resulted from option exercise by employees of ENP Games, a subsidiary of the company;
The decrease in the current year of capital premium results from offset of capital reserve of RMB 216,666,155.75 yuan as the company purchases49% share in Jiangsu Zhiming, and the offset of capital reserve-capital premium of RMB 1,690,370.90 yuan as the company transfers5% share in Guangzhou 37, a subsidiary held by the Company.
(2) Other shareholders increase their capital in Wuhan Yihua Kaitian Culture Transmission Co., Ltd and Shanghai Menggongfang Network Technology Co., Ltd, affiliates of Tibet Taifu who is a subsidiary of the company, and thus cause other capital reserve to increase by RMB 4,690,921.02 yuan.
36. Other comprehensive incomes
Unit: yuan
2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|||Accruals in the current period||||||
||||Less: accounts|||||
||||recorded in|||||
||||other|||||
|||Accruals in||||||
||||comprehensive||Attributable|Attributable||
||Opening|the current||Less:|||Closing|
|Item||||||||
||||incomes in the||to parent|to minority||
||balance|period||Income tax|||balance|
||||prior period||company|shareholder||
|||before||expense||||
||||and carried||after tax|s after tax||
|||income tax||||||
||||down to|||||
||||current profits|||||
||||and losses|||||
|II. Other comprehensive incomes that|||||-20,469,057.23|||
|||-21,875,172||-2,091,835.|||-25,087,5|
|can be reclassified as profits and|-4,618,535.07|||||685,720.85||
|||.27||89|||92.30|
|losses in the future||||||||
|Profits and losses on variation in|||||-21,799,686.38|||
|||-24,337,628||-2,091,835.|||-25,470,4|
|fair value of available-for-sale|-3,670,780.00|||||-446,105.90||
|||.17||89|||66.38|
|financial assets||||||||
|Difference from translation of||2,462,455.9|||1,330,629.15|1,131,826.7|382,874.0|
||-947,755.07|||||||
|foreign-currency financial statements||0||||5|8|
|Total of other comprehensive|-4,618,535.07|-21,875,172||-2,091,835.|-20,469,057.23|685,720.85|-25,087,592.30|
|incomes||.27||89||||

 Additional descriptions, including adjustment to the effective part of profits and losses on cash flow hedging converted to initially recognized amount of hedged items:
37. Surplus reserves
Unit: yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|Statutory surplus reserve|93,488,947.26|6,072,998.83||99,561,946.09|
|Total|93,488,947.26|6,072,998.83||99,561,946.09|

 Description of surplus reserves, including descriptions of current increase and decrease and reasons for the variation:
The increase in surplus reserve in the current period is the statutory surplus reserve of10% of the net profit realized by the company in the current period.
38. Undistributed profit
Unit: yuan
||||
|-|-|-|
|Item|Current period|Prior period|

2017 Annual Report
||||
|-|-|-|
|Undistributed profit at the end of the prior periodbefore adjustment|||
||1,413,567,635.94|506,077,201.90|
|Undistributed profit at the beginning of the periodafter adjustment|1,413,567,635.94||
|||506,077,201.90|
|Add: net profit attributable to owner(s) of theparent company in the current period|||
||1,620,582,427.47|1,070,162,324.07|
|Less: Provision of statutory surplus reserve|6,072,998.83|58,436,419.83|
|Dividend payable on common stock|208,479,478.80|104,235,470.20|
|Undistributed profit at the end of the year|2,819,597,585.78|1,413,567,635.94|

 Ledger of undistributed profit at the beginning of the period after adjustment:
1) Due to retrospective adjustment according to the accounting standards for enterprises and their applicable new regulations, undistributed profit of RMB 0.00 at the beginning of the period is affected.
2) Due to changes in the accounting policies, undistributed profit of RMB 0.00 at the beginning of the period is affected.
3) Due to correction of significant accounting errors, undistributed profit of RMB 0.00 at the beginning of the period is affected. 4) Due to changes in the consolidation scope as a result of the common control, undistributed profit of RMB 0.00 at the beginning of the period is affected.
5) A total of undistributed profit of RMB 0.00 at the beginning of the period is affected by other adjustments.
39. Operating revenues and costs
Unit: yuan
||||||
|-|-|-|-|-|
||Accruals in the current period||Accruals in the prior period||
|Item|||||
||Revenue|Cost|Revenue|Cost|
|Main businesses|6,188,729,008.57|1,948,067,595.79|5,247,426,215.96|1,940,783,836.36|
|Other businesses|99,108.18|129,643.97|467,512.77|502,940.30|
|Total|6,188,828,116.75|1,948,197,239.76|5,247,893,728.73|1,941,286,776.66|

 40. Taxes and surcharges
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Urban construction and maintenance tax|7,941,837.63|9,792,292.91|
|Educational surcharge|3,518,238.96|4,546,187.19|
|Property tax|1,145,438.72|790,118.01|
|Land use tax|3,207,777.30|2,140,781.70|
|Vehicle and vessel tax|20,389.47|12,458.00|
|Stamp tax|6,703,094.58|2,572,252.86|

2017 Annual Report
||||
|-|-|-|
|Local educational surcharge|2,345,492.62|3,184,179.41|
|Water conservancy fund|1,404,336.13|1,518,937.12|
|Construction costs of cultural undertakings|104,319.98|88,523.15|
|River management fee|7,404.96|135,997.02|
|Business tax||4,932,798.12|
|Others|109,767.54||
|Total|26,508,097.89|29,714,525.49|

 Additional descriptions:
41. Operating expenses
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Salary and benefits|89,002,610.72|69,275,392.58|
|Depreciation|2,452,462.02|2,261,428.79|
|Office cost|2,294,285.34|3,910,249.66|
|Internet promotion and traffic cost|1,767,614,006.47|1,480,035,900.50|
|Travel cost|2,725,380.16|2,745,335.60|
|Insurance premium|7,521,664.12|6,317,205.24|
|Transportation and storage fees|27,201,590.38|31,710,085.98|
|Packaging fee|1,135,941.11|3,533,778.77|
|Material consumption|2,269,378.06|2,730,746.55|
|Three-guarantee cost|415,210.57|690,279.56|
|Entertainment cost|4,151,221.02|1,819,112.94|
|Others|1,423,716.35|2,715,705.02|
|Total|1,908,207,466.32|1,607,745,221.19|

 Additional descriptions:
During the reporting period, labor dispatch expenses were classified as "wage and welfare expenses". The amount of RMB 18,542,124.59 in the prior period was reclassified from "other" items to "wage and welfare expenses" items.
42. General and administrative expenses
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Salary and benefits|108,714,662.59|78,106,747.94|

2017 Annual Report
||||
|-|-|-|
|Office cost|34,206,282.94|36,843,326.62|
|Travel and meeting cost|12,278,341.07|8,892,605.81|
|Depreciation and amortization|13,818,326.98|13,134,251.68|
|Trade union and educational funds|5,001,412.49|4,073,229.32|
|Business entertainment cost|13,901,648.09|8,708,914.97|
|Taxes||3,789,460.86|
|Labor insurance premium|9,014,592.10|6,183,170.17|
|Lease cost|20,591,183.94|15,864,767.85|
|Agency fees and consulting fees|15,404,989.50|9,397,473.36|
|R&D cost|436,169,030.12|310,597,091.90|
|Share-based compensation|100,984,100.00||
|Others|6,574,972.04|19,342,574.69|
|Total|776,659,541.86|514,933,615.17|

 Additional description:
During the reporting period, Shanghai 37 Interactive Entertainment, a first-level subsidiary of the company, transferred5% share in Guangzhou 37, a second-level subsidiary of the company, toHuai’an Shunjing Enterprise Management Partnership (Limited Partnership) for the consideration of RMB10,000,000.00 yuan in cash. The partners ofHuai’an Shunjing Enterprise Management Partnership (Limited Partnership) are all major managers of Guangzhou 37. After deducting the cash consideration based on the fair value of Guangzhou Sanqi on the reference date, the company recognizes the share-based payment cost of RMB 100,984,100.00 yuan.
43. Financial expenses
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Interest expenditure|32,858,899.90|10,629,855.46|
|Formality charges or other expenses of|||
||606,729.28|1,088,513.84|
|financial institution|||
|Less: interest income|24,363,295.31|5,952,056.07|
|Exchange gains and losses|19,453,449.40|-11,226,708.84|
|Total|28,555,783.27|-5,460,395.61|

 Additional descriptions:
44. Impairment loss on assets
Unit: yuan
2017 Annual Report
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|I. Loss on bad debts|19,082,968.12|37,088,335.72|
|II. Inventory falling price loss|66,962.78|2,095,172.29|
|III. Impairment loss on available-for-sale|||
||3,000,000.00|1,700,000.00|
|financial assets|||
|V. Impairment loss on long-term equity|||
||11,593,317.05|7,150,283.00|
|investment|||
|VII. Impairment loss on fixed assets|17,288,222.20||
|IX. Impairment loss on construction in|||
||429,504.26||
|progress|||
|XII. Impairment loss on intangible assets|377,358.34|1,423,582.71|
|XIII. Impairment loss on goodwill|299,457,551.04||
|Total|351,295,883.79|49,457,373.72|

 Additional descriptions:
45. Investment income
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Income from long-term equity investment|||
||-11,139,329.07|33,654,987.57|
|calculated by equity method|||
|Investment income from disposal of long-term|||
||218,512,763.55|6,351,134.34|
|equity investment|||
|Investment income from available-for-sale|||
||10,503,501.81|3,722,924.58|
|financial assets during holding|||
|Investment income from disposal of|||
||20,264,211.00|3,608,355.70|
|available-for-sale financial assets|||
|Interest income arising from bank financial|||
||13,370,838.07|6,931,102.57|
|products|||
|Investment income arising from changes in fair|||
||1,411,495.72||
|value of original equity|||
|Others|3,106,764.84|400,000.00|
|Total|256,030,245.92|54,668,504.76|

 Additional descriptions:
2017 Annual Report 46. Incomes from assets disposal
Unit: yuan
||||
|-|-|-|
|Source of incomes from assets disposal|Accruals in the current period|Accruals in the prior period|
|Profit or loss arising from fixed asset disposal|1,055,284.09|1,316,063.68|

 47. Other incomes
Unit: yuan
||||||
|-|-|-|-|-|
||Sources of other incomes||Accruals in current period|Accruals of last period|
|VAT refund immediately after collection||81,575,068.42|||
|Support subsidy of Huai’an SoftwarePark||10,516,637.23|||
|Other government subsidy relating tooperation (see Note 48 for details)||19,167,371.53|||
|Total||111,259,077.18|||

48. Non-operating income
Unit: yuan
|||||
|-|-|-|-|
||||Amount included in current|
|Item|Accruals in the current period|Accruals in the prior period||
||||non-recurring profits and losses|
|Government subsidy|11,200.00|161,032,068.55|11,200.00|
|Infringement compensation|1,528,930.43||1,528,930.43|
|Performance compensation||||
||401,364,984.06||401,364,984.06|
|receivable||||
|Others|152,808.37|986,803.06|152,808.37|
|Total|403,057,922.86|162,018,871.61|403,057,922.86|

 Government subsidies recorded in current profits and losses:
Unit: yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Will the|||||
|||||subsidy affect|Special|Accruals in|Accruals in|Related to|
||||Nature of the||||||
|Subsidy item|Granted by|Granted for||the current|subsidy or|the current|the prior|assets/related|
||||subsidy||||||
|||||profits and|not?|period|period|to incomes|
|||||losses|||||
|Refund of|The state||The subsidy||||||
|||||||81,575,068.4|92,618,857.3|Related to|
|VAT tax|taxation|Subsidy|received for|No|No||||
|||||||2|1|income|
|immediately|bureaus of||engaging in||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|after|Shanghai,||the trade or||||||
|collection|Guangzhou||industry||||||
||and Huai’an||encouraged||||||
||etc.||or supported||||||
||||by the state||||||
||||(according to||||||
||||the state-level||||||
||||policy||||||
||||provisions)||||||
||||Subsidy||||||
||||received in||||||
||||accordance||||||
||Huai'an||||||||
|Support|||with local||||||
||Software||||||||
|subsidy of|||government||||||
||Park|||||10,516,637.2|26,076,899.9|Related to|
|Huai'an||Subsidy|support|No|No||||
||Management|||||3|6|income|
|Software|||policies such||||||
||Development||||||||
|Park|||as investment||||||
||Co., Ltd.||||||||
||||promotion by||||||
||||local||||||
||||governments||||||
||||The subsidy||||||
||||received for||||||
||||assuming the||||||
||||state’s role in||||||
|Refund of|||guaranteeing||||||
||The local||||||||
|formality|||a utility or|||||Related to|
||taxation|Subsidy||No|No|1,135,760.56|||
|charges of|||socially|||||income|
||bureaus||||||||
|individual tax|||necessary||||||
||||product||||||
||||supply or||||||
||||price control||||||
||||function||||||
||||Subsidy||||||
||||received in||||||
|Support|||||||||
||||accordance||||||
|subsidy of|The Finance||with local||||||
|The Finance|Bureau of||government|||||Related to|
|||Subsidy||No|No|1,339,770.00|8,072,920.00||
|Bureau of|Jiading,||support|||||income|
|Jiading,|Shanghai||policies such||||||
|Shanghai|||as investment||||||
||||promotion by||||||
||||local||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
||||governments||||||
||||Subsidy||||||
|Subsidy of|||received in||||||
||Wuhu||||||||
|Wuhu|||accordance||||||
||Machinery||||||||
|Machinery|||with local||||||
||Industrial||||||||
|Industrial|||government||||||
||Development||||||19,252,000.0|Related to|
|Development||Subsidy|support|No|No|4,935,700.00|||
||Zone Finance||||||0|income|
|Zone Finance|||policies such||||||
||and Taxation||||||||
|and Taxation|||as investment||||||
||Service||||||||
|Service|||promotion by||||||
||Center||||||||
|Center|||local||||||
||||governments||||||
||||The subsidy||||||
||||received for||||||
||||engaging in||||||
||||the trade or||||||
|Copyright|||||||||
||||industry||||||
|subsidy of|Shanghai||||||||
||||encouraged|||||Related to|
|Shanghai|Copyright|Subsidy||No|No|3,500.00|||
||||or supported|||||income|
|Copyright|Association||||||||
||||by the state||||||
|Association|||||||||
||||(according to||||||
||||the state-level||||||
||||policy||||||
||||provisions)||||||
||||Subsidy||||||
||Huai'an City||||||||
|Excellent|||received for||||||
||Bureau of||||||||
|Copyright of|||research and||||||
||Culture,||||||||
|Huai’an City|||development,|||||Related to|
||Radio, and|Award||No|No|3,000.00|||
|2016, the|||technology|||||income|
||TV News||||||||
|Legendary|||renewal and||||||
||Publishing||||||||
|Dominance|||transformatio||||||
||(Copyright)||||||||
||||n, etc.||||||
||||Subsidy||||||
|Special|||||||||
||||received for||||||
|subsidy fund|Guangzhou||||||||
||||research and||||||
|of|Science and||||||||
||||development,|||||Related to|
|Guangzhou|Technology|Award||No|No|100,000.00|||
||||technology|||||income|
|Enterprise|Innovation||||||||
||||renewal and||||||
|R&D|Commission||||||||
||||transformatio||||||
|Investment|||||||||
||||n, etc.||||||
|Special|Technology|Award|Subsidy|No|No|100,000.00||Related to|

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|subsidy fund|Industry and||received for|||||income|
|of|Information||research and||||||
|Guangzhou|Bureau of||development,||||||
|Enterprise|Tianhe||technology||||||
|R&D|District||renewal and||||||
|Investment|||transformatio||||||
||||n, etc.||||||
||||Subsidy||||||
|Project|||||||||
||||received in||||||
|supporting|||||||||
||Huai'an||accordance||||||
|subsidy of|||||||||
||Overseas||with local||||||
|Huai'an|||||||||
||Students||government||||||
|Overseas||||||||Related to|
||Pioneering|Subsidy|support|No|No|3,540,171.40|6,105,251.40||
|Students||||||||income|
||Park||policies such||||||
|Pioneering|||||||||
||Management||as investment||||||
|Park|||||||||
||Committee||promotion by||||||
|Management|||||||||
||||local||||||
|Committee|||||||||
||||governments||||||
||||Subsidy||||||
||||received in||||||
||Jishan||accordance||||||
||Township||with local||||||
||Government,||government||||||
|Refund of||||||||Related to|
||Nanling|Subsidy|support|No|No|1,411,521.00|668,615.54||
|land use tax||||||||income|
||County,||policies such||||||
||Anhui||as investment||||||
||Province||promotion by||||||
||||local||||||
||||governments||||||
||||Subsidy||||||
||||received in||||||
|“Four|||||||||
||Nanling||accordance||||||
|Standards”|||||||||
||Economic||with local||||||
|enterprise|||||||||
||Development||government||||||
|reward of||||||||Related to|
||Zone|Award|support|No|No|120,000.00|90,000.00||
|Nanling||||||||income|
||Construction||policies such||||||
|Economic|||||||||
||Investment||as investment||||||
|Development|||||||||
||Co., Ltd.||promotion by||||||
|Zone|||||||||
||||local||||||
||||governments||||||
|Special|Science and||Subsidy||||||
|||Subsidy||No|No|90,100.00|90,100.00|Related to|
|subsidy for|Technology||received in||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|rent of key|Industry and||accordance|||||income|
|industry|Information||with local||||||
|enterprises of|Bureau of||government||||||
|Tianhe|Tianhe||support||||||
|Finance|District,||policies such||||||
|Bureau|Guangzhou||as investment||||||
||||promotion by||||||
||||local||||||
||||governments||||||
||||The subsidy||||||
||||received for||||||
|Employment|||||||||
||||assuming the||||||
|stabilization|||||||||
||Guangzhou||state’s role in||||||
|subsidy of|||||||||
||Social||guaranteeing||||||
|Guangzhou|||||||||
||Insurance||a utility or|||||Related to|
|Social||Subsidy||No|No|580,232.70|1,184,923.56||
||Fund||socially|||||income|
|Insurance|||||||||
||Management||necessary||||||
|Fund|||||||||
||Center||product||||||
|Management|||||||||
||||supply or||||||
|Center|||||||||
||||price control||||||
||||function||||||
||Human||||||||
|Supporting|||||||||
||Resources||||||||
|fund of the|||||||||
||and Social||Subsidy||||||
|Finance|||||||||
||Security||received in||||||
|Bureau of|||||||||
||Bureau of||accordance||||||
|Horgos|||||||||
||Horgos||with local||||||
|Economic|||||||||
||Economic||government||||||
|Development||||||||Related to|
||Development|Subsidy|support|No|No|118,857.00|||
|Zone||||||||income|
||Zone||policies such||||||
|Management|||||||||
||Management||as investment||||||
|Committee,|||||||||
||Committee,||promotion by||||||
|Xinjiang|||||||||
||Xinjiang||local||||||
|Uygur|||||||||
||Uygur||governments||||||
|Autonomous|||||||||
||Autonomous||||||||
|Region|||||||||
||Region||||||||
|Special|||Subsidy||||||
|subsidy of|Tianhe||received in||||||
|Tianyinghui|Finance||accordance|||||Related to|
|||Subsidy||No|No|500,000.00|||
|Brand|Bureau of||with local|||||income|
|Building|Guangzhou||government||||||
|Services for|||support||||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|2017|||policies such|||||
||||as investment|||||
||||promotion by|||||
||||local|||||
||||governments|||||
||||Subsidy|||||
||||received in|||||
||||accordance|||||
||Wuhu|||||||
|Tax refund of|||with local|||||
||Advertising|||||||
|Wuhu|||government|||||
||Industrial||||||Related to|
|Advertising||Subsidy|support|No|No|268,618.87||
||Park Asset||||||income|
|Industrial|||policies such|||||
||Management|||||||
|Park|||as investment|||||
||Co., Ltd.|||||||
||||promotion by|||||
||||local|||||
||||governments|||||
||||Subsidy|||||
||||received in|||||
|Anime||||||||
||||accordance|||||
|support funds||||||||
||Shanghai||with local|||||
|of Shanghai||||||||
||Culture||government|||||
|Culture|||||||Related to|
||Radio TV|Subsidy|support|No|No|235,849.06||
|Radio TV|||||||income|
||Management||policies such|||||
|Management||||||||
||Bureau||as investment|||||
|Bureau for||||||||
||||promotion by|||||
|2017||||||||
||||local|||||
||||governments|||||
||||Subsidy|||||
||||received in|||||
||||accordance|||||
|Tax refund of|The||with local|||||
|the|government||government|||||
||||||||Related to|
|government|of Jiading|Subsidy|support|No|No|518,800.00||
||||||||income|
|of Jiading|District,||policies such|||||
|District|Shanghai||as investment|||||
||||promotion by|||||
||||local|||||
||||governments|||||
|Municipal|Huai'an||Subsidy|||||
|Cultural|Software||received in||||Related to|
|||Award||No|No|400,000.00||
|Industry|Park||accordance||||income|
|Development|Management||with local|||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Guidance|Committee of||government||||||
|Fund 2016|Jiangsu||support||||||
||Province||policies such||||||
||||as investment||||||
||||promotion by||||||
||||local||||||
||||governments||||||
||Huai’an||||||||
||Economic||Subsidy||||||
||and||received for||||||
||Technologica||research and||||||
|Overseas|||||||||
||l||development,|||||Related to|
|outsourcing||Award||No|No|400,000.00|410,000.00||
||Development||technology|||||income|
|reward|||||||||
||Zone||renewal and||||||
||Economic||transformatio||||||
||Development||n, etc.||||||
||Bureau||||||||
||||Subsidy||||||
||||received in||||||
||||accordance||||||
||Talent Work||with local||||||
||Leading||government||||||
|Huai’s Talent||||||||Related to|
||Group Office|Subsidy|support|No|No|150,000.00|||
|Plan Subsidy||||||||income|
||of Huai’an||policies such||||||
||City||as investment||||||
||||promotion by||||||
||||local||||||
||||governments||||||
|Special|||Subsidy||||||
|reward for|||received in||||||
|introducing|||accordance||||||
|key|||with local||||||
|enterprises|Tianhe||government||||||
|||||||||Related to|
|provided by|Finance|Award|support|No|No|122,100.00|||
|||||||||income|
|the Business|Bureau||policies such||||||
|and Finance|||as investment||||||
|Bureau of|||promotion by||||||
|Tianhe|||local||||||
|District|||governments||||||
|Fashion|||Subsidy||||||
||Guangzhou|||||||Related to|
|creative||Subsidy|received in|No|No|400,000.00|||
||Finance|||||||income|
|animation|||accordance||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|support of|Bureau||with local||||||
|Guangzhou|||government||||||
|Culture|||support||||||
|Radio and|||policies such||||||
|Television|||as investment||||||
|Press|||promotion by||||||
||||local||||||
||||governments||||||
||||Subsidy||||||
||||received in||||||
|“Four|||accordance||||||
|Standards”|||with local||||||
|enterprise|||government||||||
||Wuhu Bureau|||||||Related to|
|reward of the||Award|support|No|No|2,000.00|5,000.00||
||of Statistics|||||||income|
|Bureau of|||policies such||||||
|Statistics of|||as investment||||||
|Wuhu County|||promotion by||||||
||||local||||||
||||governments||||||
|Technology|||Subsidy||||||
|Innovation|||received for||||||
|Award of|Wuhu Bureau||research and||||||
|Wuhu Bureau|of Science||development,|||||Related to|
|||Award||No|No|50,000.00|||
|of Science|and||technology|||||income|
|and|Technology||renewal and||||||
|Technology|||transformatio||||||
|2016|||n, etc.||||||
||||Subsidy||||||
||||received in||||||
||||accordance||||||
||Wuhu||with local||||||
|Subsidy fund|||||||||
||Economic||government||||||
|of strong||||||||Related to|
||and|Award|support|No|No|500,000.00|||
|manufacturin||||||||income|
||Information||policies such||||||
|g province|||||||||
||Committee||as investment||||||
||||promotion by||||||
||||local||||||
||||governments||||||
|Refund of|||Subsidy||||||
|formality fees|Huai’an State||received in|||||Related to|
|||Award||No|No|25,238.00|||
|for|Tax Bureau||accordance|||||income|
|withholding|||with local||||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|taxes and|||government|||||
|refund of|||support|||||
|taxes by|||policies such|||||
|Huai’an State|||as investment|||||
|Administratio|||promotion by|||||
|n of Taxation|||local|||||
|of Jiangsu|||governments|||||
|Province||||||||
|Employment||||||||
|stabilization||||||||
||Human|||||||
|subsidy of||||||||
||Resources|||||||
|Human|||The subsidy|||||
||and Social|||||||
|Resources|||received for|||||
||Security|||||||
|and Social|||assuming the|||||
||Bureau of|||||||
|Security|||state’s role in|||||
||Horgos|||||||
|Bureau of|||guaranteeing|||||
||Economic|||||||
|Horgos|||a utility or||||Related to|
||Development|Subsidy||No|No|940.75||
|Economic|||socially||||income|
||Zone|||||||
|Development|||necessary|||||
||Management|||||||
|Zone|||product|||||
||Committee,|||||||
|Management|||supply or|||||
||Xinjiang|||||||
|Committee,|||price control|||||
||Uygur|||||||
|Xinjiang|||function|||||
||Autonomous|||||||
|Uygur||||||||
||Region|||||||
|Autonomous||||||||
|Region||||||||
||||The subsidy|||||
|Employment|||received for|||||
|stabilization|||assuming the|||||
||Nanling|||||||
|subsidy of|||state’s role in|||||
||County|||||||
|Nanling|||guaranteeing|||||
||Social|||||||
|County|||a utility or||||Related to|
||Insurance|Subsidy||No|No|81,015.00||
|Social|||socially||||income|
||Fund|||||||
|Insurance|||necessary|||||
||Management|||||||
|Fund|||product|||||
||Center|||||||
|Management|||supply or|||||
|Center|||price control|||||
||||function|||||
|Supporting|The taxation||Subsidy|||||
|fund of Guro|bureau and||received in||||Related to|
|||Subsidy||No|No|1,348,511.17||
|District,|the||accordance||||income|
|Seoul, South|government||with local|||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Korea|of Guro||government||||||
||District,||support||||||
||Seoul, South||policies such||||||
||Korea||as investment||||||
||||promotion by||||||
||||local||||||
||||governments||||||
||||The subsidy||||||
|Employment|||received for||||||
|stabilization|||assuming the||||||
||Shenzhen||||||||
|subsidy of|||state’s role in||||||
||Municipal||||||||
|Shenzhen|||guaranteeing||||||
||Social||||||||
|Municipal|||a utility or|||||Related to|
||Insurance|Subsidy||No|No|2,856.24|24,042.83||
|Social|||socially|||||income|
||Fund||||||||
|Insurance|||necessary||||||
||Management||||||||
|Fund|||product||||||
||Bureau||||||||
|Management|||supply or||||||
|Bureau|||price control||||||
||||function||||||
||||Subsidy||||||
|Provincial|||received in||||||
|Foreign|||accordance||||||
|Trade|||with local||||||
||Nanling||||||||
|Promotion|||government||||||
||County|||||||Related to|
|Policy Fund||Subsidy|support|No|No|64,500.00|||
||Bureau of|||||||income|
|of Nanling|||policies such||||||
||Commerce||||||||
|County|||as investment||||||
|Bureau of|||promotion by||||||
|Commerce|||local||||||
||||governments||||||
|Blue Collar|||||||||
||||Subsidy||||||
|Apartment|||||||||
||||received in||||||
|Rental|||||||||
||Nanling||accordance||||||
|Subsidy of|||||||||
||Economic||with local||||||
|Nanling|||||||||
||Development||government||||||
|Economic||||||||Related to|
||Zone|Subsidy|support|No|No|27,648.00|||
|Development||||||||income|
||Construction||policies such||||||
|Zone|||||||||
||Investment||as investment||||||
|Construction|||||||||
||Co., Ltd.||promotion by||||||
|Investment|||||||||
||||local||||||
|Co., Ltd.|||||||||
||||governments||||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||||The subsidy|||||
||||received for|||||
|Refund of||||||||
||||assuming the|||||
|individual||||||||
||Jiading||state’s role in|||||
|income tax of||||||||
||Branch of||guaranteeing|||||
|Jiading||||||||
||Shanghai||a utility or||||Related to|
|Branch of||Subsidy||No|No|1,568,532.21||
||Local||socially||||income|
|Shanghai||||||||
||Taxation||necessary|||||
|Local||||||||
||Bureau||product|||||
|Taxation||||||||
||||supply or|||||
|Bureau||||||||
||||price control|||||
||||function|||||
||||Subsidy|||||
||||received in|||||
|Reward fund||||||||
||||accordance|||||
|of Anhui|Anhui Xinwu|||||||
||||with local|||||
|Xinwu|Economic|||||||
||||government|||||
|Economic|Development||||||Related to|
|||Subsidy|support|No|No|1,554,900.00||
|Development|Zone||||||income|
||||policies such|||||
|Zone|Management|||||||
||||as investment|||||
|Management|Committee|||||||
||||promotion by|||||
|Committee||||||||
||||local|||||
||||governments|||||
||||The subsidy|||||
|Employee|||received for|||||
|training|||assuming the|||||
||The Finance|||||||
|subsidy of|||state’s role in|||||
||Office of|||||||
|the Finance|||guaranteeing|||||
||Nanxiang|||||||
|Office of|||a utility or||||Related to|
||Town,|Subsidy||No|No|1,123,603.08||
|Nanxiang|||socially||||income|
||Jiading|||||||
|Town,|||necessary|||||
||District,|||||||
|Jiading|||product|||||
||Shanghai|||||||
|District,|||supply or|||||
|Shanghai|||price control|||||
||||function|||||
||||The subsidy|||||
|Supporting|||received for|||||
||China|||||||
|fund of China|||engaging in|||||
||Culture||||||Related to|
|Culture||Subsidy|the trade or|No|No|80,000.00||
||Industry||||||income|
|Industry|||industry|||||
||Association|||||||
|Association|||encouraged|||||
||||or supported|||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||||by the state|||||
||||(according to|||||
||||the state-level|||||
||||policy|||||
||||provisions)|||||
||||The subsidy|||||
||||received for|||||
|Employment|||assuming the|||||
|stabilization|||state’s role in|||||
||Wuhu Social|||||||
|subsidy of|||guaranteeing|||||
||Insurance|||||||
|Wuhu Social|||a utility or||||Related to|
||Treatment|Subsidy||No|No|49,423.00||
|Insurance|||socially||||income|
||and Payment|||||||
|Treatment|||necessary|||||
||Center|||||||
|and Payment|||product|||||
|Center|||supply or|||||
||||price control|||||
||||function|||||
||||Subsidy|||||
||||received in|||||
|Construction|||accordance|||||
|subsidy of|Nanling||with local|||||
|non-public|County Party||government|||||
||||||||Related to|
|building of|Committee|Subsidy|support|No|No|40,000.00||
||||||||income|
|parties “Big|Organization||policies such|||||
|Four|Department||as investment|||||
|Centers”|||promotion by|||||
||||local|||||
||||governments|||||
||||Subsidy|||||
||Nanling||received for|||||
|Provincial||||||||
||County||research and|||||
|Technologica||||||||
||Economic||development,||||Related to|
|l Innovation||Subsidy||No|No|300,000.00||
||and||technology||||income|
|Demonstratio||||||||
||Information||renewal and|||||
|n Enterprise||||||||
||Commission||transformatio|||||
||||n, etc.|||||
||||Subsidy|||||
||Nanling|||||||
||||received in|||||
|Anhui|County|||||||
||||accordance||||Related to|
|Industrial|Economic|Subsidy||No|No|50,000.00||
||||with local||||income|
|Boutique|and|||||||
||||government|||||
||Information|||||||
||||support|||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||Commission||policies such|||||
||||as investment|||||
||||promotion by|||||
||||local|||||
||||governments|||||
||||Subsidy|||||
||||received in|||||
|Special|||accordance|||||
|subsidy fund|||with local|||||
||Wuhu Bureau|||||||
|for talents of|||government|||||
||of Human||||||Related to|
|Wuhu Bureau||Subsidy|support|No|No|20,000.00||
||and Social||||||income|
|of Human|||policies such|||||
||Affairs|||||||
|and Social|||as investment|||||
|Affairs|||promotion by|||||
||||local|||||
||||governments|||||
||||Subsidy|||||
|The country|||received in|||||
|government’s|||accordance|||||
|quality|Nanling||with local|||||
|reward of|County||government|||||
||||||||Related to|
|Nanling|Market|Award|support|No|No|300,000.00||
||||||||income|
|County|Supervision||policies such|||||
|Market|Bureau||as investment|||||
|Supervision|||promotion by|||||
|Bureau|||local|||||
||||governments|||||
||||Subsidy|||||
||Nanling||received for|||||
|High-tech|County||research and|||||
|product|Economic||development,||||Related to|
|||Subsidy||No|No|100,000.00||
|subsidies (2)|and||technology||||income|
|for 2015|Information||renewal and|||||
||Commission||transformatio|||||
||||n, etc.|||||
||||Subsidy|||||
|Subsidy of||||||||
||Nanling||received in|||||
|Nanling||||||||
||County||accordance|||||
|County|||||||Related to|
||Environment|Subsidy|with local|No|No|22,400.00||
|Environment|||||||income|
||al Protection||government|||||
|al Protection||||||||
||Bureau||support|||||
|Bureau||||||||
||||policies such|||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||||as investment|||||
||||promotion by|||||
||||local|||||
||||governments|||||
|Advanced|||Subsidy|||||
|grassroots|||received in|||||
|Party|||accordance|||||
|organization|Nanling||with local|||||
|reward of|County Party||government|||||
||||||||Related to|
|Nanling|Committee|Award|support|No|No|3,000.00||
||||||||income|
|Economic|Organization||policies such|||||
|Development|Department||as investment|||||
|Zone and|||promotion by|||||
|Nanling|||local|||||
|County|||governments|||||
|Advanced|||Subsidy|||||
|grassroots|||received in|||||
|Party|||accordance|||||
|organization|Nanling||with local|||||
|reward of|County Party||government|||||
||||||||Related to|
|Nanling|Committee|Award|support|No|No|10,000.00||
||||||||income|
|Economic|Organization||policies such|||||
|Development|Department||as investment|||||
|Zone and|||promotion by|||||
|Nanling|||local|||||
|County|||governments|||||
||||Subsidy|||||
||||received in|||||
|Special|||accordance|||||
|publication|||with local|||||
||Shanghai|||||||
|fund of|||government|||||
||Press and||||||Related to|
|Shanghai||Subsidy|support|No|No|300,000.00||
||Publication||||||income|
|Press and|||policies such|||||
||Bureau|||||||
|Publication|||as investment|||||
|Bureau|||promotion by|||||
||||local|||||
||||governments|||||
|Provincial|Tianhe||Subsidy|||||
|subsidy for|District||received in|||||
||||||||Related to|
|entrepreneurs|Human|Subsidy|accordance|No|No|300,000.00||
||||||||income|
|hip|Resources||with local|||||
|promoting|and Social||government|||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|employment|Security||support|||||
|of Tianhe|Bureau of||policies such|||||
|District|Guangzhou||as investment|||||
|Human|||promotion by|||||
|Resources|||local|||||
|and Social|||governments|||||
|Security||||||||
|Bureau of||||||||
|Guangzhou||||||||
|Subsidy for||||||||
||||Subsidy|||||
|entrepreneurs||||||||
||||received in|||||
|hip||||||||
||||accordance|||||
|promoting|Guangzhou|||||||
||||with local|||||
|employment|Labor|||||||
||||government|||||
|of|Employment||||||Related to|
|||Subsidy|support|No|No|120,000.00||
|Guangzhou|Service||||||income|
||||policies such|||||
|Labor|Management|||||||
||||as investment|||||
|Employment|Center|||||||
||||promotion by|||||
|Service||||||||
||||local|||||
|Management||||||||
||||governments|||||
|Center||||||||
||||Subsidy|||||
||||received in|||||
||||accordance|||||
||||with local|||||
||Shanghai|||||||
|Special fund|||government|||||
||Municipal||||||Related to|
|for service||Subsidy|support|No|No|21,200.00||
||Bureau of||||||income|
|trade|||policies such|||||
||Finance|||||||
||||as investment|||||
||||promotion by|||||
||||local|||||
||||governments|||||
|Employment|Jiangsu||The subsidy|||||
|stabilization|Huai'an||received for|||||
|subsidy of|Economic||assuming the|||||
|Jiangsu|and||state’s role in|||||
|Huai'an|Technologica||guaranteeing||||Related to|
|||Subsidy||No|No|12,392.10||
|Economic|l||a utility or||||income|
|and|Development||socially|||||
|Technologica|Zone Social||necessary|||||
|l|Insurance||product|||||
|Development|Fund||supply or|||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Zone Social|Management||price control||||||
|Insurance|Center||function||||||
|Fund|||||||||
|Management|||||||||
|Center|||||||||
||||Subsidy||||||
|Work-related|||received in||||||
|injury reward|||accordance||||||
||Guangzhou||||||||
|of|||with local||||||
||Social||||||||
|Guangzhou|||government||||||
||Insurance|||||||Related to|
|Social||Award|support|No|No||7,856.62||
||Fund|||||||income|
|Insurance|||policies such||||||
||Management||||||||
|Fund|||as investment||||||
||Center||||||||
|Management|||promotion by||||||
|Center|||local||||||
||||governments||||||
|Bigger and|||||||||
|stronger|Huai'an||||||||
||||Subsidy||||||
|innovation|Economic||||||||
||||received for||||||
|development|and||||||||
||||research and||||||
|reward of and|Technologica||||||||
||||development,|||||Related to|
|Technologica|l|Award||No|No||10,000.00||
||||technology|||||income|
|l|Development||||||||
||||renewal and||||||
|Development|Zone||||||||
||||transformatio||||||
|Zone|Management||||||||
||||n, etc.||||||
|Management|Committee||||||||
|Committee|||||||||
||||Subsidy||||||
||||received for||||||
|Automotive|Anhui||research and||||||
|Fuel System|Science and||development,|||||Related to|
|||Subsidy||No|No|130,000.00|130,000.00||
|R&D Center|Technology||technology|||||assets|
|Project|Department||renewal and||||||
||||transformatio||||||
||||n, etc.||||||
||||Subsidy||||||
|Subsidy for|Wuhu City||received for||||||
|purchase of|Economic||research and||||||
|||||||||Related to|
|single|and|Subsidy|development,|No|No|27,450.92|27,450.94||
|||||||||assets|
|equipment in|Information||technology||||||
|SMEs|Committee||renewal and||||||
||||transformatio||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
||||n, etc.||||||
||||Subsidy||||||
|Provincial|||||||||
||Nanling||received for||||||
|"6+1"|||||||||
||County||research and||||||
|Independent|||||||||
||Economic||development,|||||Related to|
|Innovation||Subsidy||No|No|98,800.00|98,800.00||
||and||technology|||||assets|
|Capacity|||||||||
||Information||renewal and||||||
|Building|||||||||
||Commission||transformatio||||||
|Subsidy Fund|||||||||
||||n, etc.||||||
|Special|||||||||
|provincial|||||||||
||||Subsidy||||||
|fund for|||||||||
||Nanling||received for||||||
|enterprise|||||||||
||County||research and||||||
|development|||||||||
||Economic||development,|||||Related to|
|of Nanling||Subsidy||No|No|50,000.00|50,000.00||
||and||technology|||||assets|
|County|||||||||
||Information||renewal and||||||
|Economic|||||||||
||Commission||transformatio||||||
|and|||||||||
||||n, etc.||||||
|Information|||||||||
|Commission|||||||||
||||Subsidy||||||
|Provincial|||received for||||||
|Innovative|Wuhu||research and||||||
|Enterprise|Science and||development,|||||Related to|
|||Subsidy||No|No|27,750.00|27,750.00||
|R&D|Technology||technology|||||assets|
|Equipment|Bureau||renewal and||||||
|Subsidy|||transformatio||||||
||||n, etc.||||||
||||Subsidy||||||
|2015|||||||||
||Nanling||received for||||||
|Provincial|||||||||
||County||research and||||||
|Special|||||||||
||Economic||development,|||||Related to|
|Funds for the||Subsidy||No|No|27,750.00|27,750.00||
||and||technology|||||assets|
|Construction|||||||||
||Information||renewal and||||||
|of Innovative|||||||||
||Commission||transformatio||||||
|Provinces|||||||||
||||n, etc.||||||
|Subsidy for|Nanling||Subsidy||||||
|purchase of|County||received for||||||
|||||||||Related to|
|R&D|Economic|Subsidy|research and|No|No|78,400.00|39,200.00||
|||||||||assets|
|equipment|and||development,||||||
|and appliance|Information||technology||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
||Commission||renewal and||||||
||||transformatio||||||
||||n, etc.||||||
||||Subsidy||||||
|2016|||||||||
||||received for||||||
|Provincial|||||||||
||Wuhu||research and||||||
|Special|||||||||
||Science and||development,|||||Related to|
|Funds for the||Subsidy||No|No|78,400.00|39,200.00||
||Technology||technology|||||assets|
|Construction|||||||||
||Bureau||renewal and||||||
|of Innovative|||||||||
||||transformatio||||||
|Provinces|||||||||
||||n, etc.||||||
|Equipment|||||||||
|subsidy for|||||||||
|industrial|||||||||
|technology|||||||||
|reform|||||||||
|project|||Subsidy||||||
|provided by|Nanling||received for||||||
|the strong|County||research and||||||
|province|Economic||development,|||||Related to|
|||Subsidy||No|No|57,000.00|||
|construction|and||technology|||||assets|
|fund of|Information||renewal and||||||
|Nanling|Commission||transformatio||||||
|County|||n, etc.||||||
|Economic|||||||||
|and|||||||||
|Information|||||||||
|Commission|||||||||
|in 2017|||||||||
|Industrial|||||||||
|Technology|||Subsidy||||||
|Award|Nanling||received for||||||
|Subsidy of|County||research and||||||
|Nanling|Economic||development,|||||Related to|
|||Subsidy||No|No|14,022.50|||
|County|and||technology|||||assets|
|Economic|Information||renewal and||||||
|and|Commission||transformatio||||||
|Information|||n, etc.||||||
|Commission|||||||||
|2017|Nanling||Subsidy||||||
|||||||||Related to|
|Provincial|County|Subsidy|received for|No|No|1,108.36|||
|||||||||assets|
|Special|Economic||research and||||||

2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Funds for the|and||development,||||||
|Construction|Information||technology||||||
|of Innovative|Commission||renewal and||||||
|Provinces of|||transformatio||||||
|Nanling|||n, etc.||||||
|County|||||||||
|Economic|||||||||
|and|||||||||
|Information|||||||||
|Commission|||||||||
|(Bureau of|||||||||
|Science and|||||||||
|Technology)|||||||||
||||The subsidy||||||
|Subsidy for|||received for||||||
|the|||assuming the||||||
|elimination|||state’s role in||||||
|of yellow car|Wuhu City||guaranteeing||||||
|provided by|Environment||a utility or|||||Related to|
|||Subsidy||No|No|11,200.00|||
|Wuhu Air|al Protection||socially|||||income|
|Pollution|Bureau||necessary||||||
|Control Joint|||product||||||
|Conference|||supply or||||||
|Office|||price control||||||
||||function||||||
|||||||111,270,277.|161,032,068.||
|Total|--|--|--|--|--|||--|
|||||||18|55||

Additional descriptions:
The amount of government subsidies included in current profits and losses includes government subsidies included in other income and non-operating income.
49. Non-operating expenditures
Unit: yuan
|||||
|-|-|-|-|
||||Amount included in current|
|Item|Accruals in the current period|Accruals in the prior period||
||||non-recurring profits and losses|
|Donations|134,259.40|8,830,161.71|134,259.40|
|Fines and late fees|219,253.60|391,027.78|219,253.60|
|Compensations payable|3,756,740.62||3,756,740.62|
|Others|76,785.28|227,252.65|76,785.28|

2017 Annual Report
|||||
|-|-|-|-|
|Total|4,187,038.90|9,448,442.14|4,187,038.90|

 Additional descriptions:
50. Income tax expense
(1) Details of income tax expense
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Income tax expense in the current period|83,470,564.82|105,142,968.87|
|Deferred income tax expense|-3,350,691.84|-3,039,968.88|
|Total|80,119,872.98|102,102,999.99|

 (2) Adjustment process of accounting profit and income tax expense
Unit: yuan
|||
|-|-|
|Item|Accruals in the current period|
|Total profit|1,916,619,595.01|
|Income tax expense calculate at statutory / applicable tax rate|479,154,898.75|
|Effect of application of a different tax rate to the subsidiaries|-380,387,821.90|
|Effect of income tax before adjustment|3,630,801.13|
|Effect of non-taxable revenue|-101,659,205.72|
|Effect of non-deductible costs, expenses, and losses|115,616,753.32|
|Effect of use of deductible losses on unrecognized deferred||
||-32,822,639.08|
|income tax assets in the prior period||
|Effect of deductible temporary difference or deductible losses on||
||26,863,431.99|
|unrecognized deferred income tax assets in the current period||
|R&D plus deductions|-31,796,610.81|
|Change in the balance of deferred income tax resulting from tax||
||1,520,265.30|
|rate adjustment||
|Income tax expense|80,119,872.98|

 Additional descriptions
51. Other comprehensive incomes
Refer to the Note 39 “Other comprehensive incomes”
2017 Annual Report 52. Items of cash flow statement
(1) Other cash receipts relating to operating activities
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Received operating exchange amount|3,000,000.00|6,042,338.29|
|Received government subsidy|29,104,526.97|67,973,060.30|
|Received interest|8,756,161.69|8,036,639.40|
|Received deposit and earnest money|6,814,202.79|4,000,001.00|
|Housing rent||423,739.74|
|Received others|8,111,632.38|986,803.06|
|Total|55,786,523.83|87,462,581.79|

 Description of other cash receipts relating to operating activities:
(2) Other cash payments relating to operating activities
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Out-of-pocket general and administrative|||
||247,180,669.80|155,615,103.85|
|expenses|||
|Out-of-pocket operating expenses|1,782,270,017.79|1,548,433,319.17|
|Deposit and reserve fund paid|19,562,859.61||
|Formality charges|606,729.28|1,088,513.84|
|Non-operating expenditures|430,298.28|9,448,442.14|
|Other payments|3,316,702.65||
|Total|2,053,367,277.41|1,714,585,379.00|

 Description of other cash payments relating to operating activities:
(3) Other cash receipts relating to investing activities
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Government subsidies received relating to|||
||5,235,700.00|1,568,000.00|
|assets|||
|Bank financial products|2,212,369,000.00|807,800,000.00|
|Recovered movie investment||5,000,000.00|

2017 Annual Report
||||
|-|-|-|
|Refunded royalty|4,417,865.14||
|Earnest money for equity repurchase|6,000,000.00||
|Total|2,228,022,565.14|814,368,000.00|

 Description of other cash receipts relating to investing activities:
(4) Other cash payments relating to investing activities
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Bank financial products|2,122,369,000.00|889,300,000.00|
|Lending to Zhonghui Film and TV||1,500,000.00|
|Investment deposit||65,000,000.00|
|Total|2,122,369,000.00|955,800,000.00|

 Description of other cash payments relating to investing activities:
(5) Other cash receipts relating to financing activities
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Issuance cost for raising capital|4,313,316.06||
|Cash paid for purchasing the minority|||
||89,180,000.00||
|equity of the subsidiaries|||
|Total|93,493,316.06||

Description of other cash receipts relating to financing activities:
53. Supplements to cash flow statement
(1) Supplements to cash flow statement
Unit: yuan
||||
|-|-|-|
|Supplementary information|Current amount|Amount of prior period|
|1. Reconciliation of net profit to cash flows|||
||--|--|
|of operating activities:|||
|Net income|1,836,499,722.03|1,216,668,610.03|
|Add: Provisions for asset impairment|351,295,883.79|49,457,373.72|
|Depreciation of fixed assets , depletion of oil|||
||54,913,911.20|60,373,166.14|
|& gas assets, and depreciation of productive|||

2017 Annual Report
||||
|-|-|-|
|living assets|||
|Amortization of intangible assets|19,083,068.70|10,449,990.71|
|Amortization of long-term advance|||
||86,013,536.69|102,681,716.87|
|payments|||
|Losses on disposal of fixed assets, intangible|||
|assets, and other long-term assets|-1,055,284.09|-1,316,220.96|
|(represented with “-” for gains)|||
|Losses on scrapping of fixed assets|||
|||157.28|
|(represented with “-” for gains)|||
|Financial expenses (represented with “-” for|||
||45,364,584.84|-596,853.38|
|gains)|||
|Investment loss (represented with “-” for|||
||-256,030,245.92|-54,668,504.76|
|gains)|||
|Decrease in deferred income tax assets|||
||-3,350,691.84|-3,039,968.88|
|(represented with “-” for increase)|||
|Decrease in inventory (represented with “-”|||
||-30,413,122.55|-6,022,126.05|
|for increase)|||
|Decrease in operating receivables|||
||-244,342,642.44|-474,333,644.72|
|(represented with “-” for increase)|||
|Decrease in operating payables (represented|||
||270,541,351.33|148,829,490.37|
|with “-” for decrease)|||
|Others|-296,624,143.44|3,456,391.46|
|Net cash flows from operating activities|1,831,895,928.30|1,051,939,577.83|
|2. Investing and financing activities not|||
||--|--|
|concerning cash income and expenses|||
|3. Net change in cash and cash equivalents:|--|--|
|Closing balance of cash|1,580,910,931.98|819,213,006.12|
|Less: Opening balance of cash|819,213,006.12|1,105,789,001.15|
|Net increase in cash and cash equivalents|761,697,925.86|-286,575,995.03|

 (2) Net cash payment for acquisition of subsidiaries in the current period
Unit: yuan
|||
|-|-|
||Amount|
|Cash or cash equivalent payments in the current period for business||
||483,462,500.00|
|combination occurred in the current period||
|Including:|--|

2017 Annual Report
|||
|-|-|
|Shanghai Mokun|483,462,500.00|
|Less: Cash and cash equivalents held by the subsidiary on the||
||33,452,562.16|
|acquisition date||
|Including:|--|
|Shanghai Mokun|33,452,562.16|
|Including:|--|
|Net cash payment for acquisition of the subsidiary|450,009,937.84|

 Additional descriptions:
(3) Components of cash and cash equivalents
Unit: yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|I. Cash|1,580,910,931.98|819,213,006.12|
|Including: cash on hand|59,238.53|31,328.92|
|deposit payable on demand|1,573,326,143.60|809,039,113.18|
|Other monetary funds payable on|||
||7,525,549.85|10,142,564.02|
|demand|||
|III. Closing balance of cash and cash|1,580,910,931.98|819,213,006.12|
|equivalents|||

Additional descriptions:
54. Notes to items of statement of changes inowner’s equity
The company shall specify items of “Others”, under which the closing balance of the prior period is adjusted, and the adjustment amount:
None
55. Assets with restricted ownership or limited right of use
Unit: yuan
||||
|-|-|-|
|Item|Book value at the end of the period|Reason for limitation|
|Other non-current assets|795,864,793.02|Loans borrowed by the company’ssubsidiary with mortgage on the officebuilding for which pre-paid housingpayment is made|
|Total|795,864,793.02|--|

Additional descriptions:
2017 Annual Report 56. Foreign-currency monetary items
(1) Foreign-currency monetary items
Unit: yuan
|||||
|-|-|-|-|
||Balance of foreign currency at||Closing balance translated into|
|Item||Exchange rate for translation||
||the end of the period||Renminbi|
|Monetary capital|--|--|334,644,180.37|
|Including: US dollar|16,185,840.93|6.5342|105,761,521.80|
|Euro|2.94|8.1374|23.92|
|Hong Kong dollar|235,790,101.01|0.8359|197,096,945.43|
|KRW|3,854,375,104.36|0.0061|23,511,688.14|
|NTD|26,038,334.73|0.2199|5,725,829.81|
|JPY|37,709,336.00|0.05789|2,182,993.46|
|THB|1,836,910.50|0.1988|365,177.81|
|Accounts receivable|--|--|123,507,712.82|
|Including: US dollar|2,457,373.75|6.5342|16,056,971.56|
|Euro|38,021.31|8.1374|309,394.61|
|Hong Kong dollar|37,760,965.30|0.8359|31,564,390.89|
|NTD|104,687,702.67|0.2199|23,020,825.82|
|PHP|8,977,590.17|0.1309|1,175,166.55|
|MYR|7,188,832.80|1.6071|11,553,173.19|
|THB|52,087,462.01|0.1988|10,354,987.45|
|Turkish lira|56,150.34|1.7291|97,089.55|
|SGD|178,838.80|4.8831|873,287.74|
|Indonesian Rupiah (Indonesian||||
||5,051,975,939.23|0.000482|2,435,052.40|
|Rupees)||||
|Vietnamese Dong|6,820,135,176.34|0.0003|2,046,040.55|
|KRW|3,263,549,732.00|0.0061|19,907,653.37|
|AUD|6,266.48|5.0928|31,913.93|
|JPY|70,190,217.98|0.05789|4,063,311.72|
|GBP|414.65|8.7792|3,640.30|
|AED|182.45|1.7790|324.58|
|Polish Zloty|979.53|1.8509|1,813.01|
|DKK|676.50|1.0479|708.90|

2017 Annual Report
|||||
|-|-|-|-|
|HUF|2,548.00|0.0255|64.97|
|Brazil Real|5,976.02|1.9725|11,787.70|
|CAD|21.89|5.2090|114.03|
|Other receivables|||1,577,191.56|
|Including: US dollar|3,000.00|6.5342|19,602.60|
|KRW|223,946,568.00|0.0061|1,366,074.06|
|JPY|3,188,599.95|0.05789|184,588.05|
|SGD|31,500.00|0.2199|6,926.85|
|Accounts receivable|||153,823,142.89|
|Including: NTD|112,113,636.17|0.2199|24,653,788.59|
|USD|14,513,527.35|6.5342|94,834,290.41|
|EURO|7,984.30|8.1374|64,971.44|
|THB|28,007.57|0.1988|5,567.90|
|Vietnamese Dong|4,676,607,625.40|0.0003|1,402,982.29|
|KRW|4,901,100,543.09|0.0061|29,896,713.31|
|JPY|51,214,872.14|0.05789|2,964,828.95|
|Other payables|||859,006.92|
|Including: USD|90,000.00|6.5342|588,078.00|
|GBP|44,414,577.00|0.0061|270,928.92|
|Short-term borrowing|||3,054,500.00|
|Including: KRW|500,000,000.00|0.0061|3,054,500.00|

 Additional descriptions:
(2) Description of overseas business entities, including disclosure of the principal places of business overseas, recording currencies, and basis for selection of recording currencies for important overseas business entities, as well as reasons for any change in the recording currency.
□ Applicable√ Not applicable
III. Change in the Scope of Consolidation
1．Business combination not under common control
(1) Business combination not under common control occurred in the current period
Unit: yuan
2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Revenue of|Net profit of|
||||||||the acquired|the acquired|
|||||||Basis for|||
||||||||party from|party from|
|Name of the|Time of|Cost of|Proportion of|Method of||determination|||
||||||Acquisition||the|the|
|acquired|equity|equity|the equity|equity||of the|||
||||||date||acquisition|acquisition|
|party|acquisition|acquisition|acquired|acquisition||acquisition|||
||||||||date to the|date to the|
|||||||date|||
||||||||end of the|end of the|
||||||||period|period|
|ShanghaiMokun||||Acquisition|May 31, 2017|Date ofexercisingcontrol|9,541,311.27|-36,280,070.84|
|||952,749,968.||by share|||||
||May 31, 2017||68.43%||||||
|||69||issuance and|||||
|||||cash payment|||||
||March 3,|430,000,000.||Acquisition|||||
||||31.57%||||||
||2016|00||with cash|||||

Additional descriptions:
According to the Agreement on Assets Acquisition by Share Issuance and Cash Payment by and between Rest Shareholders of Shanghai Mokun Digital Technology Co., Ltd. and Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co., Ltd. singed by the company and Yang Dongmai, Chen Wei, and Wangzhong Investment on July 31, 2016, the company acquires68.42% share in Shanghai Mokun by means of share issuance and cash paying. Of the transaction consideration,65% (RMB 619,287,500.00 yuan) is paid by share issuance, and a total of 35,809,147 shares are issued; the remaining35% (RMB 333,462,500.00 yuan) is paid with cash. The transaction price of the assets to be purchased is determined with reference to the results of the Evaluation Report (Zhong Qi Hua Ping Bao Zi (2017) No. 3021) issued by China Enterprise Appraisals (CEA).
The company originally held31.57% share in Shanghai Mokun. After the purchase of the remaining68.43% share by share issuance and cash payment, Shanghai Mokun became a subsidiary wholly owned by the Company.
(2) Consolidated costs and goodwill
Unit: yuan
|||
|-|-|
|Consolidated costs|Shanghai Mokun|
|-- Cash|333,462,500.00|
|-- Fair value of equity securities issued|619,287,468.69|
|-- Fair value of the share held prior to the acquisition date on the||
||439,548,684.96|
|acquisition date||
|Total combination cost|1,392,298,653.65|
|Less: fair value of identifiable net assets acquired|132,505,067.72|
|Balance between the goodwill/consolidated costs and the fair||
||1,259,793,585.93|
|value of the identifiable net assets acquired||

Description of the method to determine the fair value of consolidated costs and contingent considerations and their variations:
Method to determine the consolidated costs:
2017 Annual Report The transaction price of the assets to be purchased is determined by reference to the evaluation results of the evaluation report of CEA (Zhong Qi Hua Ping Bao Zi (2017) No. 3021) , and is determined by the parties to the reorganization as RMB 952,750,000.00 yuan.
Method to determine the fair value of equity instruments:
According to applicable provisions of the Accounting Standards for Business Enterprises No. 20– Business Combination, the company needs to determine the fair value of the equity instruments issued. In the process of determining the fair value of equity instruments issued, the management of the company gives consideration to the following factors:
As provided in Article 45 of the Administrative Measures for Material Assets Reorganization of Listed Companies, the price of the share issued by the listed company shall not be90% lower than the market reference price, which shall be any of the average stock trading prices of 20, 60, or 120 trading days before the date when the resolution of the Board on this asset acquisition by stock issuance is announced. In determining the price of the stocks issued for asset acquisition, on the basis of full consideration to the price-to-earning ratio of the stock of the listed company and valuation of comparable listed companies, the listed company, through full negotiation with its counterparties and taking the interests of all parties into account, determines to use the average stock trading price of 20 trading days prior to the date when the resolution of the Board on this asset acquisition by share issuance is announced as the market reference price and determines that the issuing price is90% of such market reference price. The average stock trading price of 20 trading days prior to the date when the resolution of the Board on this asset acquisition by stock issuance (total amount of traded stock of 20 trading days prior to the resolution announcement date / total volume of traded stock of 20 trading days prior to the resolution announcement date) is RMB 19.30 yuan / stock. The price of the share issued for asset acquisition is determined to be90% of the market reference price, that is, RMB 17.37 yuan / stock. After distribution of stock dividend of RMB 0.10 yuan / stock, the issuing price of the stock is RMB 17.27 yuan / stock.
Taking the above into consideration, the management of the company deems it inappropriate to use the stock price of the company to determine the fair value of the equity instrument issued. The company shall use the stock issuing price as the fair value of the equity instrument issued for acquisition of Shanghai Mokun.
Major reasons for formation of huge goodwill:
On the acquisition date, the net book value of Shanghai company is RMB 126,125,057.72 yuan. According to the “Evaluation Report on the Value of All Equities in Shanghai Mokun Involved in the Assets to be Acquired by Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co., Ltd. through Share Issuance and Cash Payment”[Zhong Qi Hua Ping Bao Zi (2017) No.3021] issued by Beijing China Enterprise Appraisals Co., Ltd., the appreciation of intangible assets upon evaluation is recognized to be RMB 6,380,010.00 yuan, and the fair value of the identifiable net assets on the acquisition date is RMB 132,505,067.72 yuan. The balance between the consolidated cost and the fair value of the identifiable net assets is recognized as goodwill.
Additional descriptions:
(3) Identifiable assets and liabilities of the acquired party on the acquisition date
Unit: yuan
||||
|-|-|-|
||Shanghai Mokun||
||Fair value on the acquisition date|Book value on the acquisition date|
|Assets:|151,999,008.48|145,618,998.48|
|Monetary funds|33,452,562.16|33,452,562.16|
|Accounts receivable|7,987,268.45|7,987,268.45|

2017 Annual Report
||||
|-|-|-|
|Inventory|0.00|0.00|
|Fixed assets|6,041,849.47|6,041,849.47|
|Intangible assets|6,382,486.06|2,476.06|
|Advance payments|7,600.00|7,600.00|
|Interest receivable|364,624.11|364,624.11|
|Other receivables|5,063,444.43|5,063,444.43|
|Non-current assets due within one year|12,000,000.00|12,000,000.00|
|Other current assets|80,086,426.81|80,086,426.81|
|Long-term deferred expenses|612,746.99|612,746.99|
|Liabilities:|19,493,940.76|19,493,940.76|
|Loans|0.00|0.00|
|Accounts payable|173,180.00|173,180.00|
|Deferred income tax liabilities|0.00|0.00|
|Payments received in advance|1,716,467.56|1,716,467.56|
|Payroll payable|6,103,707.09|6,103,707.09|
|Taxes payable|634,016.72|634,016.72|
|Other payables|78,245.86|78,245.86|
|Deferred income|10,788,323.53|10,788,323.53|
|Net Asset|132,505,067.72|126,125,057.72|
|Less: Minority interest|0.00|0.00|
|Net assets acquired|132,505,067.72|126,125,057.72|

 Determination method of the fair value of identifiable assets and liabilities:
Contingent liabilities of the acquired party assumed in business combination:
Additional descriptions:
(4) Gains or losses on remeasurement of the share held prior to the acquisition date at the fair value Is there more than one transaction for realization of business combination in steps and acquisition of the control in the reporting period?
√ Yes□ No
Unit: yuan
|||||||
|-|-|-|-|-|-|
||Book value of the|Fair value of the|Gains or losses on|Determination|Amount of other|
|Name of the|share originally held|share originally held|remeasurement of|method of the fair|comprehensive|
|acquiree|prior to the|prior to the|the share held prior|value of the share|incomes relating to|
||acquisition date on|acquisition date on|to the acquisition|originally held prior|the share originally|

2017 Annual Report
|||||||
|-|-|-|-|-|-|
||the acquisition date|the acquisition date|date at the fair value|to the acquisition|held prior to the|
|||||date on the|acquisition date|
|||||acquisition date and|converted to|
|||||main assumptions|investment income|
|Shanghai Mokun|458,141,013.24|439,548,684.96|-18,592,328.28|Equity trading price|0.00|

 Additional descriptions:
2. Change in the combination scope arising from other reasons
Describe any change in the combination scope arising from other reasons (such as establishment of a new subsidiary, liquidation of a subsidiary) and relevant details:
In February 2017, Tibet Xintai, the first-tier subsidiary of the company, established Lihui Venture. The company holds100% of the share in this newly-established subsidiary and has included it in the scope of consolidation since February 2017.
In March 2017, Jiangsu Aurora, the second-tier subsidiary of the company, Anhui Aurora. The company holds80% of the share in this newly-established subsidiary and has included it in the scope of consolidation since March 2017.
In April 2017, Top Increase, the third-tier subsidiary of the company, establishes 37 Games company. The company holds100% of the share in this newly-established subsidiary and has included it in the scope of consolidation since April 2017.
In August 2017, Jiangsu Aurora, the second-tier subsidiary of the company, established Guangzhou Jisheng. The company holds80% of the share in this newly-established subsidiary and has included it in the scope of consolidation since August 2017.
See Note IX “Equity in Other Entities” for details.
IV. Equity in Other Entities
1. Equity in subsidiaries
(1) Composition of enterprise group
||||||||
|-|-|-|-|-|-|-|
|Name of the|Principal place of|Place of|Nature of|Shareholding ratio||Way of|
|subsidiary|business|registration|business|Direct|Indirect|acquisition|
|First-tier|||||||
|subsidiary|||||||
|||||||Business|
|Shanghai Sanqi|||||||
|||||||combination not|
|Interactive|Guangzhou|Shanghai|Software|100.00%|||
|||||||under common|
|Entertainment|||||||
|||||||control|
|Shunrong Auto|||||||
||Wuhu|Wuhu|Manufacturing|100.00%||Establishment|
|Parts|||||||
|Tibet Xintai|Tibet|Tibet|Investment|100.00%||Establishment|
|Second-tier|||||||
|subsidiary|||||||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
||||||Business|
|Shunrong|||Investment,||combination|
||Wuhu|Wuhu||100.00%||
|Investment|||Manufacturing||under common|
||||||control|
|Shunrong||||||
||Shanghai|Shanghai|Manufacturing|100.00%|Establishment|
|Yonghong||||||
|Guangzhou||||||
||Guangzhou|Guangzhou|Manufacturing|100.00%|Establishment|
|Senyun||||||
|Yanling||||||
||Shanghai|Shanghai|Investment|100.00%|Establishment|
|Investment||||||
||||||Business|
|Anhui Vogue|||||combination not|
||Guangzhou|Wuhu|Software|100.00%||
|Entertainment|||||under common|
||||||control|
||||||Business|
|Shanghai|||||combination not|
||Guangzhou|Shanghai|Software|100.00%||
|Yingtong|||||under common|
||||||control|
||||||Business|
||||||combination not|
|Guangzhou Sanqi|Guangzhou|Guangzhou|Software|80.00%||
||||||under common|
||||||control|
||||||Business|
|Vogue||||||
||||||combination not|
|Entertainment|BVI|BVI|Software|100.00%||
||||||under common|
|International||||||
||||||control|
||||||Business|
|Guangzhou|||||combination not|
||Guangzhou|Guangzhou|Software|100.00%||
|Xingzhong|||||under common|
||||||control|
||||||Business|
||||||combination not|
|Anhui Sanqi|Guangzhou|Wuhu|Software|100.00%||
||||||under common|
||||||control|
||||||Business|
||||||combination not|
|Jiangsu Aurora|Guangzhou|Huai’an|Software|80.00%||
||||||under common|
||||||control|
|Shanghai|Guangzhou|Shanghai|Software|100.00%|Business|

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Guanhang|||||combination not|
||||||under common|
||||||control|
||||||Business|
||||||combination not|
|Anhui Jiashang|Guangzhou|Wuhu|Software|100.00%||
||||||under common|
||||||control|
||||||Business|
||||||combination not|
|ENP Games|South Korea|South Korea|Software|54.90%||
||||||under common|
||||||control|
||||||Business|
|Easy Gaming,|||||combination not|
||USA|USA|Software|100.00%||
|Inc.|||||under common|
||||||control|
|Lihui Venture|Xinjiang|Xinjiang|Investment|100.00%|Establishment|
|Third-tier||||||
|subsidiary||||||
||||||Business|
|AZA Games Co.|||||combination not|
||South Korea|South Korea|Software|54.90%||
|Ltd|||||under common|
||||||control|
|BRAEVE Co.,||||||
||Japan|Japan|Software|53.33%|Establishment|
|Ltd||||||
||||||Business|
||||||combination not|
|G-MEI Network|Taiwan|BVI|Software|100.00%||
||||||under common|
||||||control|
||||||Business|
||||||combination not|
|Chengdu Shengge|Chengdu|Chengdu|Software|80.00%||
||||||under common|
||||||control|
||||||Business|
|Beijing|||||combination not|
||Guangzhou|Beijing|Software|80.00%||
|Shangheng|||||under common|
||||||control|
||||||Business|
|Jiangsu Jiaqu|Guangzhou|Huai’an|Software|80.00%|combination not|
||||||under common|

2017 Annual Report
|||||||
|-|-|-|-|-|-|
||||||control|
||||||Business|
||||||combination not|
|Shanghai Zhiren|Guangzhou|Shanghai|Software|100.00%||
||||||under common|
||||||control|
||||||Business|
|Shanghai Mobile|||||combination not|
||Guangzhou|Shanghai|Software|80.00%||
|Game|||||under common|
||||||control|
|Anhui Xuhong|Guangzhou|Wuhu|IT|100.00%|Establishment|
||||||Business|
||||||combination not|
|Anhui Guanyu|Guangzhou|Wuhu|Advertising|100.00%||
||||||under common|
||||||control|
|Guangzhou Sanqi||||||
|Interactive|Guangzhou|Guangzhou|Software|80.00%|Establishment|
|Entertainment||||||
||||||Business|
||||||combination not|
|Top Increase|BVI|BVI|Software|100.00%||
||||||under common|
||||||control|
|Anhui Aurora|Guangzhou|Wuhu|Software|80.00%|Establishment|
|Guangzhou||||||
||Guangzhou|Guangzhou|Software|80.00%|Establishment|
|Jisheng||||||
|Fourth-tier||||||
|subsidiary||||||
||||||Business|
||||||combination not|
|Jiangsu Zhiming|Guangzhou|Huai’an|Software|100.00%||
||||||under common|
||||||control|
||||||Business|
|37 Games|||||combination not|
||HK|HK|Software|100.00%||
|Entertainment|||||under common|
||||||control|
||||||Business|
|Wisdom Game|||||combination not|
||BVI|BVI|Software|100.00%||
|International|||||under common|
||||||control|
|Wisdom|HK|HK|Software|100.00%|Business|

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Entertainment|||||combination not|
|International|||||under common|
||||||control|
||||||Business|
||||||combination not|
|Tibet Taifu|Tibet|Tibet|Software|100.00%||
||||||under common|
||||||control|
|Guangzhou||||||
||Guangzhou|Guangzhou|Software|80.00%|Establishment|
|Jisheng Network||||||
|Guangzhou||||||
||Guangzhou|Guangzhou|Software|85.00%|Establishment|
|Huoshanhu||||||
|Guangzhou Jishi|Guangzhou|Guangzhou|Software|80.00%|Establishment|
|Huoerguosi||||||
||Xinjiang|Xinjiang|Software and IT|100.00%|Establishment|
|Xinghui||||||
|Huoerguosi||||||
||Xinjiang|Xinjiang|Software and IT|80.00%|Establishment|
|Xinrui||||||
|37 Games||||||
||South Korea|South Korea|Software|100.00%|Establishment|
|Company||||||
|Fifth-tier||||||
|subsidiary||||||
|Tibet Yaotong|Guangzhou|Tibet|Software|100.00%|Establishment|
|Tibet Shengge|Guangzhou|Tibet|Software|100.00%|Establishment|
|Huoerguosi||||||
||Xinjiang|Xinjiang|Software and IT|100.00%|Establishment|
|Qianyu||||||
||||||Business|
||||||combination not|
|Shanghai Mokun|Shanghai|Shanghai|Software|100.00%||
||||||under common|
||||||control|
|Sixth-tier||||||
|subsidiary||||||
||||||Business|
|Shanghai|||||combination not|
||Shanghai|Shanghai|Software|76.50%||
|Langkun|||||under common|
||||||control|
||||||Business|
||||||combination not|
|Shanghai Kunkun|S hanghai|Shanghai|Software|100.00%||
||||||under common|
||||||control|

2017 Annual Report
|||||||
|-|-|-|-|-|-|
||||||Business|
||||||combination not|
|Shanghai Miji|Shanghai|Shanghai|Software|100.00%||
||||||under common|
||||||control|
||||||Business|
||||||combination not|
|Shanghai Aojue|Shanghai|Shanghai|Software|100.00%||
||||||under common|
||||||control|
|Seventh-tier||||||
|subsidiary||||||
||||||Business|
||||||combination not|
|Huoerguosi Jiaji|Xinjiang|Xinjiang|Software|76.50%||
||||||under common|
||||||control|

Description of shareholding ratio in the subsidiary inconsistent with the percentage of voting rights:
Basis for control on the investee with a half or less of the voting rights and no control on the investee with more than a half of the voting rights:
Basis of control over significant structure entity included in the scope of consolidation:
Basis for identifying the company as an agent or a trustor:
(2) Significant non-wholly-owned subsidiaries
Unit: yuan
||||||
|-|-|-|-|-|
||||Current dividends||
|||Current profits and losses|||
||Shareholding ratio of||announced to be|Closing balance of|
|Name of the subsidiary||attributable to minority|||
||minority shareholders||distributed to minority|minority interest|
|||shareholders|||
||||shareholders||
|Jiangsu Aurora|20.00%|136,927,678.24|98,000,000.00|140,264,144.76|
|Guangzhou Sanqi|20.00%|88,541,223.83|30,000,000.00|118,675,816.34|

 Description of shareholding ratio of minority shareholders in the subsidiary inconsistent with the percentage of voting rights: Additional descriptions:
(3) Major financial information of significant non-wholly-owned subsidiaries
Unit: yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Name of|Closing balance||||||Opening balance||||||
|the||Non-currentassets|||Non-curr|||Non-curr||Currentliabilitiesl|Non-curr||
||Current||Total|Current||Total|Current||Total|||Total|
|subsidiar|||||ent|||ent|||ent||
||assets||assets|liabilities||liabilities|assets||assets|||liabilities|
|y|||||liabilities|||assets|||iabilities||

2017 Annual Report
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Jiangsu|695,370,|290,177|, 985,548,|161,313,|122,914,|284,228,|588,863,|12,653,2|601,516,|83,911,3|10,922,5|94,833,9|
|Aurora|986.38|856.65|843.03|849.14|270.08|119.22|073.64|07.39|281.03|76.34|72.09|48.43|
|Guangzh|1,043,43|115,896|, 1,159,32|531,531,|34,416,6|565,948,|||||||
|ou Sanqi|0,956.42|348.84|7,305.26|578.14|45.44|223.58|||||||

Unit: yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Accruals in the current period||||Accruals in the prior period||||
||Businessrevenue|||Cash flows||||Cash flows|
|Name of the|||Total||||Total||
|||||from|Business|||from|
|subsidiary||Net profit|comprehensi|||Net profit|comprehensi||
|||||operating|revenue|||operating|
||||ve income||||ve income||
|||||activities||||activities|
|Jiangsu|1,014,730,24|684,638,391.|684,638,391.|797,291,694.|713,291,613.|482,429,940.|482,429,940.|317,079,561.|
|Aurora|2.51|21|21|37|54|94|94|41|
|Guangzhou|2,098,517,90|470,530,214.|470,530,214.|863,880,248.|||||
|Sanqi|6.50|76|76|47|||||

Additional descriptions:
In the prior year, Guangzhou Sanqi was not disclosed as a significant non-wholly-owned subsidiary of the company. Thus the data of the prior year in the statements are absent.
2. Transactions resulting in change in share ofowner’s equity in a subsidiary with the company still controlling the subsidiary
(1) Details of change in the share ofowner’s equity in the subsidiary
|||||
|-|-|-|-|
|Name of subsidiary|Change date|Shareholding ratio beforechange|Shareholding ratio afterchange|
|ENP Games|March 2017|55.41%|54.99%|
||August 2017|54.99%|54.90%|
|Guangzhou Sanqi|May 2017|85.00%|80.00%|
|Jiangsu Zhiming|May 2017|51.00%|100.00%|

(2) Effect of the transaction on minority interest andowner’s equity attributable to the parent company Unit: yuan
|||||
|-|-|-|-|
||ENP Games|Guangzhou Sanqi|Jiangsu Zhiming|
|-- Cash||10,000,000.00|89,180,000.00|
|-- Fair value of non-cash assets|||165,619,990.80|
|Total of acquisition cost /||||
|||10,000,000.00|254,799,990.80|
|disposal consideration||||

2017 Annual Report
|||||
|-|-|-|-|
|Less: net assets of the||||
|subsidiary calculate at the ratio|148,249.30|11,690,370.90|38,133,835.05|
|of the share acquired/disposed||||
|Difference|-148,249.30|-1,690,370.90|216,666,155.75|
|Included: adjusted capital||||
||-148,249.30|-1,690,370.90|216,666,155.75|
|reserve||||

Additional descriptions:
(1) The company paid RMB 254,799,999.80 yuan to Hu Yuhang by issuing shares and paying cash to purchase49% share he held in Jiangsu Zhiming. The formalities for industrial and commercial registration of changes was completed on May 10, 2017. Tianjian Accounting Firm issued the Audit Report (Tian Jian Shen (2017) No. 3-460) for the transitional period (from September 1, 2016 to May 31, 2017) .
(2) The company transferred5% share it held in Guangzhou Sanqi Network Technology Co., Ltd. toHuai’an Shunjing Enterprise Management Partnership (Limited Partnership) for RMB 10 million yuan, whose partners are key managers of Guangzhou Sanqi. 3. Equity in joint ventures or associated enterprises
(1) Significant joint ventures or associated enterprises
||||||||
|-|-|-|-|-|-|-|
|||||Shareholding ratio||Accounting|
|Name of the joint||||||method of|
|venture or|Principal place of|Place of|Nature of|||investment in the|
|associated|business|registration|business|Direct|Indirect|joint venture or|
|enterprise||||||associated|
|||||||enterprise|
|Yangzhou Fuhai|||||||
|Sanqi Internet|||||||
|Culture|||||||
||Yangzhou|Yangzhou|Investment||64.52%|Equity method|
|Investment|||||||
|Center (Limited|||||||
|Partnership)|||||||
|Huai’an Sanqi|||||||
|Yijian|||||||
|Entertainment|||||||
|Assets|Huai’an|Huai’an|Investment||39.70%|Equity method|
|Management|||||||
|Center (Limited|||||||
|Partnership)|||||||
|Mango (Xiamen)|||||||
|Creative|||||||
||Xiamen|Xiamen|Investment||31.75%|Equity method|
|Incubation Equity|||||||
|Investment Fund|||||||

2017 Annual Report
||
|-|
|Partnership|
|(Limited|
|Partnership)|

Description of the shareholding ratio in the joint venture or associated enterprise inconsistent with the percentage of voting rights: (1) The company held64.52% share in Yangzhou Fuhai Sanqi Internet Culture Investment Center (Limited Partnership), which is not included in the scope of consolidation because: A. according to the joint venture agreement, the joint venture will set up an Investment Decision-making Committee to take charge of making decisions regarding investment and other businesses of the joint venture. The Committee consists of five members, who are appointed upon the internal resolution of Shanghai Fuhai Sanqi Enterprise Management Co., Ltd. Decisions on investment are adopted upon the consent of four-fifths or more of the members of the Committee; B.Partners’ meeting, the supreme authority of the joint venture, is set up. Resolutions of thepartners’ meetings are adopted upon the consent of the partners jointly holding more than two-thirds of the paid-up contribution. Based on the foregoing agreements, Tibet Taifu, a wholly-owned subsidiary of the company, does not control Yangzhou Fuhai Sanqi Internet Culture Investment Center (Limited Partnership).
(2) In December 2016, Tibet Taifu, a subsidiary of the company, as the junior limited partner, entered into the Partnership Agreement with Guangdong Yijian Investment Co., Ltd., the general partner, and China Resources SDIC Trust Co., Ltd., the senior partner, to establishedHuai’an Sanqi Yijian Entertainment Assets Management Center (limited partnership)(“Huai’an Sanqi”). The term of the partnership is 3 years. Tibet Taifu invested RMB 101,280,000.00 yuan and held39.70% of share in the partnership. The profit distribution ofHuai’an on the project during the investment period shall be decided by the Investment Decision-making Committee (composed of 3 members, with each partner appointing one member) . The specific profit distribution plan shall be passed only after the above members approve it unanimously. The profit distribution order agreed in the agreement is as follows:① the profit obtained during the investment period shall be distributed to the senior limited partner in the first place on a quarterly basis,Huai’an Sanqi shall distribute the profit on the 21st day in the end of each quarter;② If there is any balance in the distributable profit of the project, the paid-up contribution shall be returned to the senior limited partner as profit and shall be paid when the term of operation expires;③ The remaining distributable profit after the above distributions as set out in the foregoing two points shall be distributed according to the negotiation and decision of the junior limited partner and the general partner;④5% of the distributable profit remaining after distributions as set out in the foregoing two points shall be distributed to the general partner, and95% to the junior limited partner.
Basis for holing less than20% of the voting rights with significant influence or holding20% or more of the voting rights without significant influence:
(2) Principal financial information of important associated enterprises
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
|Closing balance / accruals in the current period|||Opening balance / accruals in the prior period||||
|||Mango|||||
|Yangzhou|Huai’an Sanqi||||||
|||(Xiamen)||||Shenzhen|
|Fuhai Sanqi|Yijian||Shanghai||||
|||Creative||Shanghai||Zhanlong|
|Internet|Entertainment||Aurora||Shanghai Jueli||
|||Incubation||Mokun Digital||Interactive|
|Culture|Assets||Network||Culture Media||
|||Equity||Technology||Entertainment|
|Investment|Management||Technology||Co., Ltd.||
|||Investment||Co., Ltd.||Technology|
|Center (limited|Center (limited||Co., Ltd.||||
|||Fund||||Co., Ltd.|
|partnership)|partnership)||||||
|||Partnership|||||

2017 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||||(limited|||||
||||partnership)|||||
|Current assets|72,887,128.32|2,530,160.27|116,887,443.92|107,556,399.76|137,637,440.10|33,366,022.25|8,538,795.74|
|Non-current||||||||
||37,750,000.00|233,574,085.99|9,300,000.00|4,117,539.68|19,276,139.27|2,415,000.56|249,820.75|
|assets||||||||
|Total assets|110,637,128.32|236,104,246.26|126,187,443.92|111,673,939.44|156,913,579.37|35,781,022.81|8,788,616.49|
|Current||||||||
||||4,465,358.22|4,615,752.89|7,795,268.18|5,948,397.93|361,793.08|
|liabilities||||||||
|Non-current||||||||
||||||14,240,430.36|||
|liabilities||||||||
|Total liabilities|||4,465,358.22|4,615,752.89|22,035,698.54|5,948,397.93|361,793.08|
|Owner’s equity||||||||
|attributable to||||||||
|shareholders of|110,637,128.32|236,104,246.26|121,722,085.70|107,058,186.55|134,877,880.83|29,832,624.88|8,426,823.41|
|parent||||||||
|company||||||||
|Share in net||||||||
|assets||||||||
|calculated by|50,000,000.00|101,677,840.80|38,646,762.21|19,270,473.58|42,580,946.98|8,949,787.46|2,528,047.02|
|shareholding||||||||
|ratio||||||||
|-- Goodwill||||7,750,000.00|418,323,332.51|22,878,457.62|6,955,000.00|
|Book value of||||||||
|equity||||||||
|investment in|50,000,000.00|101,677,840.80|38,646,762.21|24,850,473.57|460,904,279.49|31,828,207.79|9,483,047.02|
|associated||||||||
|enterprises||||||||
|Operating||||||||
|||||75,183,236.39|162,330,711.71|35,901,885.79||
|revenue||||||||
|Net profit|137,128.32|11,067,234.25|-4,262,166.26|69,220,185.99|109,611,612.86|-3,110,158.15|-1,723,176.59|
|Total||||||||
|comprehensive|137,128.32|11,067,234.25|-4,262,166.26|69,220,185.99|109,611,612.86|-3,110,158.15|-1,723,176.59|
|incomes||||||||
|Dividend||||||||
|obtained from||||||||
|associated|||8,769,681.68|||||
|enterprises in||||||||
|the current year||||||||

Additional descriptions
2017 Annual Report (3) Summary of financial information of insignificant joint ventures and associated enterprises
Unit: yuan
||||
|-|-|-|
||Closing balance / accruals in the current|Opening balance / accruals in the prior|
||period|period|
|Joint ventures:|--|--|
|Total of the following calculated by|||
||--|--|
|shareholding ratio|||
|Associated enterprises:|--|--|
|Total book value of investments|186,648,229.07|259,501,831.93|
|Total of the following calculated by|||
||--|--|
|shareholding ratio|||
|- Net profit|-10,183,932.08|26,091,438.40|
|- Total comprehensive incomes|-10,183,932.08|26,091,438.40|

 Additional description
Insignificant associated enterprises include: Shenzhen EONE Network Technology Co., Ltd., Penta Game Co., Ltd., Shanghai Tingting Network Technology Co., Ltd., Shanghai Menggongfang Network Technology Co., Ltd., Beijing Zhuayou Interactive Network Technology Co., Ltd., Wuhai Yihua Kaitian Culture and Communication Co., Ltd., Longzhang Network Technology (Shanghai) Co., Ltd., Longzhang Animation (Shanghai) Co., Ltd., Shenzhen Zhanlong Interactive Entertainment Technology Co., Ltd., Xiamen Yiqi Investment Management Co., Ltd., Chengdu 91ACT Technology Co., Ltd., Chengdu Mofei Technology Co., Ltd., Chengdu Modu Technology Co., Ltd., Shanghai Fuhai Sanqi Investment Management Co., Ltd., Shanghai 11wan Network Technology Co., Ltd., Chengdu Pengwan Technology Co., Ltd., and Shanghai Jueli Culture& Media Co., Ltd. Total net profits and comprehensive incomes calculated by shareholding ratio include the returns on investment in Shanghai Aurora Network Technology Co., Ltd., Shanghai Zheyuan Culture& Media Co., Ltd., and Shanghai Mokun.
(4) Excess loss occurred to joint ventures or associated enterprises
Unit: yuan
|||||
|-|-|-|-|
|||Derecognized loss in the current|Accumulated derecognized|
|Name of the joint venture or|Accumulated derecognized|||
|||period (or net profit shared in|losses at the end of the current|
|associated enterprise|losses in the prior period|||
|||the current period)|period|
|Longzhang Animation||||
||-1,554,329.50|-3,647,586.58|-5,201,916.08|
|(Shanghai) Co., Ltd.||||

Additional description
V. Risks in Relation to Financial Instruments
The company's goal in risk management is to strike a balance between risk and return, minimize the adverse impact of the risk on the
company's operating performance, and maximize the benefits of shareholders and other equity investors. Based on this risk
management objective, the basic strategy of the company's risk management is to identify and analyze various risks faced by the
2017 Annual Report company, establish a proper risk tolerance floor and conduct risk management, and supervise various risks in a timely and reliable manner, and control risks within a limited range.
The company faces various risks relating to financial instruments in its day-to-day activities, which mainly include credit risk, liquidity risk and market risk. The management has reviewed and approved the policies for managing these risks, as summarized below. (I) Credit risk
Credit risk refers to the risk that one party to a financial instrument cannot perform its obligations and causes financial losses to the other.
The company's credit risk mainly comes from bank deposits and receivables. In order to control the above related risks, the company has taken the following measures respectively.
1. Bank deposit
The company deposits bank deposits in financial institutions with high credit ratings, so that its credit risk is low.
2. Receivables
The company conducts regular credit evaluations on customers who use credit transactions. According to the results of the credit assessment, the company elects to conduct transactions with approved and well-credited customers and monitors the balance of its receivables to ensure that the Company will not face significant bad debt risks.
As theCompany’s accounts receivable risk points are distributed among multiple partners and multiple customers, as of December 31, 2017,51.36% (December 31, 2016:52.79%) of theCompany’s accounts receivable comes from the top five customers in respect of balance, and the Company does not have significant credit concentration risk.
(1) TheCompany’s receivables that are not past due and not yet impaired, as well as the amounts that are past due but not impaired, and the overdue ageing analysis are as follows:
|||||||
|-|-|-|-|-|-|
|Item|Closing balance|||||
||Not overdue and notimpaired|Overdue but not impaired|||Total|
|||Less than 1year|1-2 years|Over 2years||
|Notes receivable|55,340,000.00|-|-|-|55,340,000.00|
|Other current assets - Bank financialproducts|110,000,000.00|-|-|-|110,000,000.00|
|Subtotal|165,340,000.00|-|-|-|165,340,000.00|

(continued)
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|||||
||Not overdue and notimpaired|Overdue but not impaired|||Total|
|||Less than 1year|1-2 years|Over 2years||
|Notes receivable|94,638,841.21|-|-|-|94,638,841.21|
|Other current assets - Bank financialproducts|170,000,000.00|-|-|-|170,000,000.00|
|Subtotal|264,638,841.21|-|-|-|264,638,841.21|

(2) Please refer to the notes to this financial statement (explanation of receivables in the note to items of the consolidated financial
2017 Annual Report statements) for the details of the individually accrued receivables.
(II) Liquidity risk
Liquidity risk refers to the risk of shortage of funds when the company fulfills its obligations to settle cash or other financial assets. Liquidity risk may arise from the inability to sell financial assets at fair value as soon as possible; or from the otherparty’s inability to repay its contractual obligations; or from early maturity debt; or from the inability to generate expected cash flows.
The company's current financial assets can meet working capital requirements and capital expenditures, and the liquidity risks it bears are not significant.
Financial liabilities classified by remaining due dates
|||||||
|-|-|-|-|-|-|
|Item|Closing balance|||||
||Book value|Undiscountedcontract amount|Less than 1 year|1-3 years|Over 3 years|
|Short-term loan|372,054,500.00|372,054,500.00|372,054,500.00|-|-|
|Notes payable|-|-|-|-|-|
|Accounts payable|741,792,973.33|741,792,973.33|704,225,674.10|37,567,299.23|-|
|Other payables|61,572,020.26|61,572,020.26|35,957,715.81|25,614,304.45|-|
|Subtotal|1,175,419,493.59|1,175,419,493.59|1,112,237,889.91|63,181,603.68|-|

 (continued)
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|||||
||Book value|Undiscountedcontract amount|Less than 1 year|1-3 years|Over 3 years|
|Short-term loan|372,878,500.00|372,878,500.00|372,878,500.00|-|-|
|Notes payable|17,414,395.42|17,414,395.42|17,414,395.42|-|-|
|Accounts payable|700,713,118.00|700,713,118.00|700,713,118.00|-|-|
|Other payables|293,166,635.18|293,166,635.18|293,166,635.18|-|-|
|Subtotal|1,384,172,648.60|1,384,172,648.60|1,384,172,648.60|-|-|

 (III) Market risks
Market risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuate due to changes in market prices. Market risk mainly includes interest rate risk and foreign exchange risk.
1. Interest risk
Interest rate risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuate due to changes in market interest rates. The company does not have the risk of changes in market interest rates.
2. Foreign exchange risk
Foreign exchange risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuate due to changes in foreign exchange rates. The risk of exchange rate changes faced by the company is mainly related to the company's foreign currency
monetary assets and liabilities. The company is mainly operating in the Mainland of China and its major activities are denominated in
RMB. Therefore, the foreign exchange market risk assumed by the company is not significant.
2017 Annual Report In respect of the foreign-currency monetary assets and liabilities of the company at the end of the period, please refer to the notes to the financial statements (explanation of foreign-currency monetary items in the notes to items of consolidated financial statement). VI. Disclosure of Fair Value
1. Closing fair value of assets and liabilities measured at fair value
Unit: yuan
||||||
|-|-|-|-|-|
||Fair value at the end of the period||||
|Item|Measurement of Level 1|Measurement of Level 2|Measurement of Level 3||
|||||Total|
||fair value|fair value|fair value||
|I. Recurring fair value|||||
||--|--|--|--|
|measurement|||||
|(II) Available-for-sale|||||
||57,541,101.92|||57,541,101.92|
|financial assets|||||
|(2) Investment in equity|||||
||57,541,101.92|||57,541,101.92|
|instruments|||||
|II. Non-recurring fair|||||
||--|--|--|--|
|value measurement|||||

2. Determination basis for market price of items measured at recurring and non-recurring Level 1 fair value
The fair value of available-for-sale financial assets is determined based on the open market value.
VII. Related Parties and Related-party Transactions
1. Parent company of the Company
|||||||
|-|-|-|-|-|-|
||||||Percentage of vote|
|Name of the parent||||Shareholding ratio of||
||Place of registration|Nature of business|Registered capital||rights held by the|
|company||||the parent company||
||||||parent company|

 Details of the parent company of the company
The final controllers of the company are Wu Xushun, Wu Weihong, and Wu Weidong.
Additional descriptions:
1. De facto controllers of the company
||||
|-|-|-|
|Name of de facto controllers|Shareholding ratio in the company (%)|Percentage of voting rights in the company|
|||(%)|
|Wu Xushun|9.50|9.5|

2017 Annual Report
||||
|-|-|-|
|Wu Weihong|7.83|7.8|
|Wu Weidong|7.76|7.7|

 Wu Xushun and Wu Weihong are father and daughter; and Wu Xushun and Wu Weidong are father and son. These three
shareholders together hold25.09% of the share in the company.
2. Subsidiaries of the company
See Note IX “Equity in Other Entities” for the details of thecompany’s subsidiaries.
3. Joint ventures and associated enterprises of the company
See Note IX “Equity in Other Entities” for the details of the significant joint ventures and associated enterprises of the company. The information is as follow of other joint ventures or associated enterprises that made related-party transactions with the company during the current period or that made related-party transactions with the company in prior periods and the balance of such transactions remains:
|||
|-|-|
|Name of joint venture or associated enterprise|Relationship with the Company|
|Shenzhen EONE Network Technology Co., Ltd.|Associated enterprise of the company|
|Shanghai Aurora Network Technology Co., Ltd.|Associated enterprise of the company before March 31, 2017|
|Shanghai Aoting Network Technology Co., Ltd.|Associated enterprise of the company|
|Shanghai Tingting Network Technology Co., Ltd.|Associated enterprise of the company|
||Associated enterprise of the company May 31, 2017，and|
|Shanghai Mokun||
||subsidiary of the Company after May 31, 2017|
|Chengdu Modu Technology Co., Ltd.|Associated enterprise of the company|
|Chengdu Mofei Technology Co., Ltd.|Associated enterprise of the company|
|Shanghai 11wan Network Technology Co., Ltd.|Associated enterprise of the company|
|Mango (Xiamen) Creative Incubation Equity Investment Fund||
||Associated enterprise of the company|
|Partnership (Limited Partnership)||
|Huai’an Sanqi Yijian Entertainment Assets Management Center||
||Associated enterprise of the company|
|(Limited Partnership)||
|Longzhang Animation (Shanghai) Co., Ltd.|Associated enterprise of the company|
|Longzhang Network Technology (Shanghai) Co., Ltd.|Associated enterprise of the company|
|Yangzhou Fuhai Sanqi Internet Culture Investment Center||
||Associated enterprise of the company|
|(Limited Partnership)||
||a related party before May 31, 2017 (the director and vice|
||general manager of the company act as directors of the|
|Chengdu 91ACT Technology Co., Ltd.||
||company) , and an associated enterprise of the company as of|
||May 31, 2017|
|Chengdu Pengwan Technology Co., Ltd.|a related party before May 31, 2017 (the director and vice|

2017 Annual Report
||
|-|
|general manager of the company act as directors of the|
|company) , and an associated enterprise of the company|

Additional description
1. The company disposed of Shanghai Aurora Network Technology Co., Ltd. on March 31, 2017, and the related-part transactions disclosed in this reporting period is the accruals between January and March of 2017.
2. The company completed its acquisition of Shanghai Mokun on May 31, 2017, and the related-part transactions disclosed in this reporting period is the accruals between January and May of 2017.
4. Information of other related parties
|||
|-|-|
|Name of other related parties|Relationship with the Company|
||Related party for the past 12 months (vice chairman and general|
|Shenzhen Moklyin Technology Co., Ltd.||
||manager of the Company act as directors of this company)|
||Related party (director and vice general manager of the Company|
|Guangzhou Joyegame Software Co., Ltd.||
||act as directors of this company)|
||Related party (The director and vice general manager of the|
|Shanghai Mango Interactive Technology Co., Ltd.||
||Company act as directors of this company)|
||Related party (The director and vice general manager of the|
|Shenzhen Qifan Network Co., Ltd.||
||Company act as directors of this company)|
||Related party (The director and vice general manager of the|
|Wuhan Yihua Kaitian Culture and Communication Co., Ltd.||
||Company act as directors of this company)|
||Related party (The vice general manager of the Company acts as|
|Beijing Colorful Game Technology Co., Ltd.||
||a director of this company)|
||A natural person who holds no less than 5% shares in the listed|
|Li Weiwei||
||company, vice chairman, general manager|
||A natural person who holds no less than 5% shares in the listed|
|Zeng Kaitian||
||company|

Additional description
5. Information of related-party transactions
(1) Related-party transactions on sale and purchase of goods, and rendering and acceptance of services List of purchased goods/accepted services
Unit: yuan
|||||||
|-|-|-|-|-|-|
|||||Exceeding the||
||Transaction|Accruals in current|Approved transaction|||
|Related party||||approved transaction|Accruals in last period|
||content|period|amount|||
|||||amount?||
|Chengdu Pengwan|Game commission|26,751,740.93|32,158,950.00|No|28,173,467.03|

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Technology Co.,|fee and royalty|||||
|Ltd.|acquisition|||||
|Shanghai Aurora||||||
|Network|Game commission|||||
|Technology Co.,|fee and royalty|11,932,597.82|155,185,950.00|No|76,699,082.85|
|Ltd.|acquisition|||||
|Shanghai Tingting||||||
||Game commission|||||
|Network||||||
||fee and entrusted|7,495,417.36|14,640,750.00|No|985,902.83|
|Technology Co.,||||||
||R&D expense|||||
|Ltd.||||||
||Game commission|||||
|Shenzhen Moklyin|fee, royalty|||||
|Technology Co.,|acquisition and|5,490,077.96|28,512,450.00|No|41,851,736.17|
|Ltd.|entrusted R&D|||||
||expense|||||
|Shanghai Mango||||||
||Game commission|||||
|Interactive||||||
||fee and new|||||
|Entertainment||4,228,519.65|7,304,400.00|No|13,496,263.50|
||product design|||||
|Technology Co.,||||||
||cost|||||
|Ltd.||||||
||Game commission|||||
||fee, royalty|||||
|Shanghai Mokun|acquisition and|1,051,125.60|8,560,500.00|No|5,779,419.80|
||entrusted R&D|||||
||expense|||||
|Beijing Colorful||||||
||Game commission|||||
|Game Technology||952,493.00||Yes||
||fee|||||
|Co., Ltd.||||||
|Longzhang||||||
||Game commission|||||
|Animation||514,216.26||Yes||
||fee|||||
|(Shanghai) Co., Ltd.||||||
|Chengdu 91ACT||||||
||Game commission|||||
|Technology Co.,||255,657.80||Yes|1,744,822.46|
||fee|||||
|Ltd.||||||
|Shenzhen EONE||||||
||Game commission|||||
|Network||||||
||fee and royalty|212,164.40|10,545,000.00|No|1,417,026.79|
|Technology Co.,||||||
||acquisition|||||
|Ltd.||||||
|Chengdu Mofei|Game commission|157,157.40||Yes||

2017 Annual Report
||||||
|-|-|-|-|-|
|Technology Co.,|fee and entrusted||||
|Ltd.|R&D expense||||
||Game commission||||
|Shenzhen Qifan|||||
||fee and royalty|121,757.67|Yes|5,165,805.91|
|Network Co., Ltd.|||||
||acquisition||||
|Shanghai Aoting|||||
||Game commission||||
|Network|||||
||fee and entrusted|38,453.71|Yes|287,608.96|
|Technology Co.,|||||
||R&D expense||||
|Ltd.|||||
|Guangzhou|Game commission||||
|Joyegame Software|fee and entrusted|8,279.46|Yes|235,273.11|
|Co., Ltd.|R&D expense||||

List of sold goods/ rendered services
Unit: yuan
|||||
|-|-|-|-|
|Related party|Transaction content|Accruals in current period|Accruals in last period|
|Shanghai 11wan Network||||
||Software operation revenue|5,545,397.18|0.00|
|Technology Co., Ltd.||||
|Shanghai Mango Interactive||||
|Entertainment Technology Co.,|Software operation revenue|840,274.48|970,760.13|
|Ltd.||||
|Shenzhen Moklyin Technology|Evaluation service revenue,|||
|||473,057.78|482,984.47|
|Co., Ltd.|technical service fee|||
|Beijing Colorful Game||||
||Software operation revenue|12,466.87||
|Technology Co., Ltd.||||

Description of the related-party transactions of purchasing or selling goods and rendering and accepting services
(2) Information of related-party security
The Company provides security for others
Unit: yuan
||||||
|-|-|-|-|-|
|||||Whether the security is|
|The secured party|Security amount|Security start date|Security expiration date||
|||||performed fully|

 The Company is secured by others
Unit: yuan
||||||
|-|-|-|-|-|
|||||Whether the security is|
|Securing party|Security amount|Security start date|Security expiration date||
|||||performed fully|
|Li Weiwei and Zeng|300,000,000.00|May 19, 2016|May 19, 2017|Yes|

2017 Annual Report
||||||
|-|-|-|-|-|
|Kaitian|||||
|Li Weiwei and Zeng|||||
||70,000,000.00|October 28, 2016|October 27, 2017|Yes|
|Kaitian|||||
|Li Weiwei and Zeng|||||
||100,000,000.00|January 23, 2017|July 24, 2017|Yes|
|Kaitian|||||
|Li Weiwei and Zeng|||||
||91,000,000.00|April 14, 2017|October 28, 2017|Yes|
|Kaitian|||||
|Li Weiwei and Zeng|||||
||210,000,000.00|May 23, 2017|May 22, 2018|No|
|Kaitian|||||
|Li Weiwei and Zeng|||||
||90,000,000.00|May 24, 2017|May 22, 2018|No|
|Kaitian|||||
|Li Weiwei, Zeng Kaitian|69,000,000.00|June 9, 2017|June 8, 2018|No|

Description of related-party security
(3) Details of related-party asset transfer and debt restructuring
Unit: yuan
|||||
|-|-|-|-|
|Related party|Transaction content|Accruals in current period|Accruals in last period|

 (4) Compensation of key executives
Unit: yuan
||||
|-|-|-|
|Item|Accruals in current period|Accruals in last period|
|Compensation of key executives|14,575,100.00|13,058,900.00|

 6. Receivables and payables of related party
(1) Receivables
Unit: yuan
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Item|Related party|||||
|||Book balance|Bad-debt provision|Book balance|Bad-debt provision|
||Shenzhen Moklyin|||||
|Accounts receivable||0.00||689.45|34.47|
||Technology Co., Ltd.|||||
||Shanghai Mango|||||
||Interactive|||||
|Accounts receivable||141,403.60|7,070.18|391,386.80|19,569.34|
||Entertainment|||||
||Technology Co., Ltd.|||||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
||Shanghai 11wan|||||
|Accounts receivable|Network Technology|5,473,326.88|273,666.34|||
||Co., Ltd.|||||
||Beijing Colorful|||||
|Accounts receivable|Game Technology|13,214.88|660.74|||
||Co., Ltd.|||||
||Total|5,627,945.36|281,397.27|392,076.25|19,603.81|
||Shenzhen EONE|||||
|Advance payment|Network Technology|1,757,963.61||||
||Co., Ltd.|||||
||Chengdu 91ACT|||||
|Advance payment||1,450,617.07||1,706,274.87||
||Technology Co., Ltd.|||||
||Longzhang|||||
|Advance payment|Animation|14,485,783.74||15,000,000.00||
||(Shanghai) Co., Ltd.|||||
||Longzhang Network|||||
|Advance payment|Technology|1,982,010.00||||
||(Shanghai) Co., Ltd.|||||
|Advance payment|Shenzhen Qifan|||||
|||1,978,994.10||2,228,123.37||
||Network Co., Ltd.|||||
|Advance payment|Chengdu Modu|||||
|||1,000,000.00||||
||Technology Co., Ltd.|||||
|Advance payment|Chengdu Mofei|||||
|||842,842.60||||
||Technology Co., Ltd.|||||
||Total|23,498,211.12||18,934,398.24||

(2) Payables
Unit: yuan
|||||
|-|-|-|-|
|Item|Related party|Closing book balance|Opening book balance|
||Chengdu Pengwan Technology|||
|Account payable||11,622,401.24|1,327,086.55|
||Co., Ltd.|||
||Guangzhou Joyegame Software|||
|Account payable||3,951.38|55,465.52|
||Co., Ltd.|||
||Shanghai Aoting Network|||
|Account payable||7,360.48|96,522.00|
||Technology Co., Ltd.|||
||Shanghai Tingting Network|||
|Account payable||727,664.83|480,918.00|
||Technology Co., Ltd.|||

2017 Annual Report
|||||
|-|-|-|-|
||Shenzhen Moklyin Technology|||
|Account payable||14,717,281.13|20,795,442.37|
||Co., Ltd.|||
||Shenzhen EONE Network|||
|Account payable|||82,480.17|
||Technology Co., Ltd.|||
||Shanghai Mango Interactive|||
|Account payable|Entertainment Technology Co.,|346,198.97|1,163,676.82|
||Ltd.|||
||Beijing Colorful Game|||
|Account payable||1,138,598.90||
||Technology Co., Ltd.|||
||Total|28,563,456.93|24,001,591.43|
||Shenzhen Moklyin Technology|||
|Other payables||0.00|200,000,000.00|
||Co., Ltd.|||
||Huai’an Sanqi Yijian|||
||Entertainment Assets|||
|Other payables||19,032,685.81|31,789,000.00|
||Management Center (limited|||
||partnership)|||
||Mango (Xiamen) Creative|||
||Incubation Equity Investment|||
|Other payables||0.00|40,000,000.00|
||Fund Partnership (limited|||
||partnership)|||
||Chengdu Modu Technology|||
|Other payables||6,000,000.00||
||Co., Ltd.|||
||Chengdu Mofei Technology|||
|Other payables||6,000,000.00||
||Co., Ltd.|||
||Wuhan Yihua Kaitian Culture|||
|Other payables||2,000,000.00||
||Transmission Co., Ltd.|||
||Total|33,032,685.81|271,789,000.00|

 VIII. Share-based Payments
1. General of share-based payments
√ Applicable□ Not applicable
Unit: yuan
|||
|-|-|
|Total equity instruments granted by the company in the current period|110,984,100.00|
|Total equity instruments granted by the company in the current period|110,984,100.00|
|Total equity instruments granted by the company in the current period|0.00|

Additional description
2017 Annual Report 2. Details of share-based payments settled by equity
√ Applicable□ Not applicable
Unit: yuan
|||
|-|-|
|Determination basis for the quantity of exercisable equity||
||Equity transfer contract|
|instruments||
|Reason for significant discrepancy between current estimate and||
||Not applicable|
|prior estimate||
|Accumulated share-based payments settled by equity recorded in||
||100,984,100.00|
|capital surplus||
|Total expense for recognition of share-based payments settled by||
||100,984,100.00|
|equity in the current period||

Additional description
During the reporting period, Shanghai Sanqi Interactive Entertainment, a first-tier subsidiary of the company, transferred5% share held by it in Guangzhou Sanqi, a second-tier subsidiary of the company, toHuai’an Shunjing Enterprise Management Partnership (Limited Partnership) for the consideration of RMB 10,000,000.00 yuan in cash. Partners ofHuai’an Shunjing Enterprise
Management Partnership (Limited Partnership) are key executives of Guangzhou Sanqi. The company recognized the share-based payment cost of RMB 100,984,100.00 yuan based on the fair value of Guangzhou Sanqi on the pricing reference date deducting the cash consideration.
3. Details of share-based payments settled with cash
□ Applicable√ Not applicable
4. Details of alteration and termination of share-based payments
None
5 Others
None
IV. Commitments and Contingencies
1. Significant commitments
Significant commitments as of the balance sheet date
|||
|-|-|
|Item|December 31, 2017|
|Capital commitments for which contracts are signed but no|138,617,129.96|

2017 Annual Report
||
|-|
|provision is made|

Note: it mainly includes the final payment for purchase of office building and equipment.
2. Contingencies
(1) Significant contingencies as of the balance sheet date
There is no significant commitment that may affect the normal production or operation of the company and need to be disclosed as of December 31, 2017.
(2) The company shall clarify if there is no significant contingency to be disclosed.
The company does not have significant contingencies that need to be disclosed.
3. Others
None
X. Matters after the Balance Sheet Date
1. Significant non-adjustment matter
Unit: yuan
|||||
|-|-|-|-|
|||Effect on the financial status|Reason why the effect is unable|
|Item|Content|||
|||and operating result|to bed estimated|

 2. Profit distribution
Unit: yuan
|||
|-|-|
|Profit or dividend to be distributed|214,811,084.40|
|Profit or dividend declared upon approval|214,811,084.40|

 3. Sales return
None
4. Description of other matters after the balance sheet date
None
2017 Annual Report XI. Other Significant Matters
1. Correction of previous accounting errors
(1) Retrospective restatement method
Unit: yuan
|||||
|-|-|-|-|
|Contents of the accounting error||Report item names affected in||
||Procedure||Cumulative effect|
|correction||each comparison period||

(2) Future application method
||||
|-|-|-|
|||Reason for adopting the future application|
|Contents of the accounting error correction|Approval procedure||
|||method|

2. Debt restructuring
None
3. Asset replacement
(1) Non-monetary asset exchange
None
(2) Other asset replacement
None
4. Annuity plan
None
5. Discontinued operations
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
|||||||Profit attributable|
|||||||to the owner of|
|Item|Income|Expense|Pre-tax profit|Income tax cost|Net profit|the parent|
|||||||company for|
|||||||discontinued|

2017 Annual Report
||
|-|
|operations|

 Additional description
None
6. Segment information
(1) The determination basis and accounting policy of the report segment
The company determines the reporting segment based on its internal organizational structure, management requirements, internal reporting system, etc., and determines the reporting segment on the basis of the industry segment. The performance of auto parts business and online game business will be assessed separately. Each segment uses assets and liabilities separately.
(2) Financial information of the report segment
Unit: yuan
||||||
|-|-|-|-|-|
||Automotive parts|Online game business|||
|Item|||Offset between divisions|Total|
||business division|division|||
|Operating income|560,211,672.99|5,628,616,443.76||6,188,828,116.75|
|Operating cost|414,353,738.66|1,533,843,501.10||1,948,197,239.76|
|Total assets|9,255,079.58|9,251,421,700.56|100,539,094.76|9,160,137,685.38|
|Total liabilities|120,816,292.16|1,853,202,031.90|100,539,094.76|1,873,479,229.30|

 7. Other important transactions and events that affect the decision-making of the investors
On February 7, 2018, the company and Hu Yuhang signed the Asset Acquisition Agreement and Profit Compensation Agreement between Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co., Ltd. and JiangsuAurora’s shareholder Hu Yuhang, providing that the company will purchase20% share held by Hu Yuhang in Jiangsu Aurora by paying RMB 1.4 billion yuan in cash. After completion of this transaction, Jiangsu Aurora will become a subsidiary wholly owned by the company. As of the issuance date of this report, the formalities for industrial and commercial registration of changes in relation to Jiangsu Aurora have been completed.
XII. Notes to Main Items of the Financial Statements of Parent Company
1. Other receivables
(1) Disclosure of other receivables by categories
Unit: yuan
||||
|-|-|-|
|Category|Closing balance|Opening balance|

2017 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||Provision for bad||||||||
||Book balance|||||Book balance||Provision for bad debt|||
||||debt||Book||||||
|||||||||||Book value|
|||||Provision|value||||Provision||
||Amount|Ratio|Amount|||Amount|Ratio|Amount|||
|||||ratio|||||ratio||
|Other receivables|1,668,884,090.50|||0.80%|||||||
|which are grouped|||||||||||
|according to credit|||13,336,7||1,655,547|51,832,||2,583,129||49,248,886.|
|||100.00%|||||100.00%||4.98%||
|risk features and for|||45.46||,345.04|015.98||.03||95|
|which provision for|||||||||||
|bad debt is made|||||||||||
||1,668,884,090.50||13,336,7||1,655,547,345.04|51,832,||2,583,129||49,248,886.95|
|Total|||||||||||
||||45.46|||015.98||.03|||

 Other receivables whose single amounts are significant and for which provision for bad debt is separately made at the end of the period:
□ Applicable√ Not applicable
In the portfolio, other receivables for which provision for bad debt is made by aging-of-other-receivables method:
√ Applicable□ Not applicable
Unit: yuan
|||||
|-|-|-|-|
||Closing balance|||
|Age||||
||Other receivables|Provision for bad debt|Provision ratio|
|Accounts receivable due within one year||||
||266,584,909.29|13,329,245.46|5.00%|
|Subtotal of accounts receivable|266,584,909.29|||
|||13,329,245.46|5.00%|
|due within one year||||
|2-3 years|25,000.00|7,500.00|30.00%|
|Total|266,609,909.29|13,336,745.46||

Description of the basis of grouping:
Other accounts receivable of the same age have similar credit risk characteristics.
In the portfolio, other receivables for which provision for bad debt is made by the percentage-of-balance method:
□ Applicable√ Not applicable
In the portfolios, other receivables for which provision for bad debt is made by other methods:
□ Applicable√ Not applicable
(2) Provisions for bad debt made, recovered, or reversed in the current period
The provision for bad debt in the amount of RMB 10,753,616.43 yuan is made in the current period; and RMB 0.00 yuan of the
provision for bad debt is recovered or reversed in the current period.
Among them, provisions for bad debt whose recovered or reversed amounts are of significance in the current period are:
2017 Annual Report Unit: yuan
||||
|-|-|-|
|Entity|Recovered or reversed amount|Means of recovery|

(3) Other receivables actually written off in the current period
Unit: yuan
|||
|-|-|
|Item|Amount written off|

Of them, significant other receivables written off include:
Unit: yuan
|||||||
|-|-|-|-|-|-|
||||||Amount arising from|
||Nature of other||Reasons for|Write-off procedures||
|Entity||Amount written off|||related-party|
||receivables||write-off|performed||
||||||transaction or not|

 Description of write-off of other receivables:
No
(4) Classification of other receivables by nature
Unit: yuan
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Deposit and earnest money|65,000.00|50,116,233.00|
|Receivables and payables of related parties|1,402,274,181.21|194,435.33|
|Intercompany lending|266,543,561.64|1,500,000.00|
|Others|1,347.65|21,347.65|
|Total|1,668,884,090.50|51,832,015.98|

 (5) Top 5 other receivables in term of closing balance collected as per debtors
Unit: yuan
|||||||
|-|-|-|-|-|-|
|||||Proportion in total|Closing balance of|
|Entity|Nature|Closing balance|Age|closing balance of|provision for bad|
|||||other receivables|debt|
||Accounts receivable|||||
|Tibet Taifu Culture &||||||
||from and payable by|1,102,274,181.21|Within 1 year|66.05%||
|Media Co., Ltd.||||||
||related parties|||||
|Shenzhen Zhonghui||||||
|Television Culture|Intercompany|||||
|||266,543,561.64|Within 1 year|15.97%|13,327,178.08|
|Communication Co.,|lending|||||
|Ltd.||||||

2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Jiangsu Zhiming|Accounts receivable|||||
|Network Technology|from and payable by|178,000,000.00|Within 1 year|10.66%||
|Co., Ltd.|related parties|||||
|Anhui Xuhong|Accounts receivable|||||
|Information|from and payable by|102,000,000.00|Within 1 year|6.11%||
|Technology Co., Ltd.|related parties|||||
|Jiangsu Jiaqu|Accounts receivable|||||
|Network Technology|from and payable by|20,000,000.00|Within 1 year|1.20%||
|Co., Ltd.|related parties|||||
|Total|--|1,668,817,742.85|--|99.99%|13,327,178.08|

 2. Long-term equity investment
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Provision for|||Provision for||
||Book balance||Book value|Book balance||Book value|
|||impairment|||impairment||
|Investment in|||||||
||5,724,695,055.23||5,724,695,055.23|5,469,895,064.43||5,469,895,064.43|
|subsidiaries|||||||
|Investment in|||||||
|joint ventures and|||||||
||29,729,869.92||29,729,869.92|116,284,895.72||116,284,895.72|
|associated|||||||
|enterprises|||||||
|Total|5,754,424,925.15||5,754,424,925.15|5,586,179,960.15||5,586,179,960.15|

 (1) Investment in subsidiaries
Unit: yuan
||||||||
|-|-|-|-|-|-|-|
||||||Provision for|Closing balance|
|||Increase in the|Decrease in the||||
|Invested entity|Opening balance|||Closing balance|impairment in the|of provision for|
|||current period|current period||||
||||||current period|impairment|
|Sanqi Interactive|||||||
|Entertainment|||||||
|(Shanghai)|4,720,000,000.00|||4,720,000,000.00|||
|Technology Co.,|||||||
|Ltd.|||||||
|Wuhu Shunrong|||||||
|Auto Parts Co.,|749,895,064.43|||749,895,064.43|||
|Ltd.|||||||

2017 Annual Report
|||||
|-|-|-|-|
|Jiangsu Zhiming||||
|Network||||
|||254,799,990.80|254,799,990.80|
|Technology Co.,||||
|Ltd.||||
|Total|5,469,895,064.43|254,799,990.80|5,724,695,055.23|

(2) Investment in joint ventures and associated enterprises
Unit: yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease in the current period||||||||||
|||||Gains or|||||||Closing|
|||||losses on|||||||balance|
||||||Adjustme|||||||
|||Additiona||investmen|||Issuing|Provision|||of|
||Opening||Negative||nt to other|Variation||||Closing||
|Investor||l||t|||cash|for|||provision|
||balance||investmen||comprehe|in other|||Others|balance||
|||investmen||recognize|||dividends|impairme|||for|
||||t||nsive|incomes||||||
|||t||d under|||or profits|nt|||impairme|
||||||incomes|||||||
|||||the equity|||||||nt|
|||||law||||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||
|Shanghai||||||||||||
|Jueli||||||||||||
||31,828,20|||-2,098,33||||||29,729,86||
|Culture &||||||||||||
||7.79|||7.87||||||9.92||
|Media||||||||||||
|Co., Ltd.||||||||||||
|Shanghai||||||||||||
|Zheyuan||||||||||||
||84,456,68||85,000,00|543,312.0||||||||
|Culture &||||||||||||
||7.93||0.00|7||||||||
|Media||||||||||||
|Co., Ltd.||||||||||||
||116,284,8||85,000,00|-1,555,02||||||29,729,86||
|Subtotal||||||||||||
||95.72||0.00|5.80||||||9.92||
||116,284,895.72||85,000,00|-1,555,02||||||29,729,869.92||
|Total||||||||||||
||||0.00|5.80||||||||

(3) Additional descriptions
The company is not subject to significant restrictions on investment realization and repatriation of investment
income.
2017 Annual Report 3. Operating revenues and costs
Unit: yuan
||||||
|-|-|-|-|-|
||Accruals in the current period||Accruals in the prior period||
|Item|||||
||Revenue|Cost|Revenue|Cost|
|Main businesses|751,646.53|31,646.53|124,584,039.53|123,392,974.65|
|Other businesses|||272,890.04|272,890.04|
|Total|751,646.53|31,646.53|124,856,929.57|123,665,864.69|

 Additional descriptions:
4. Investment income
Unit: yuan
||||
|-|-|-|
|Item|Accruals in the current period|Accruals in the prior period|
|Income from long-term equity investment|||
|||605,000,000.00|
|calculated by cost method|||
|Income from long-term equity investment|||
||-1,555,025.80|-940,529.89|
|calculated by equity method|||
|Investment income from disposal of|||
||-295,279,968.69||
|long-term equity investment|||
|Investment income from available-for-sale|||
||1,582,261.90|3,722,924.58|
|financial assets during holding|||
|Investment income from disposal of|||
||1,000,000.00||
|available-for-sale financial assets|||
|Total|-294,252,732.59|607,782,394.69|

 5. Others
XIII. Supplementary Information
1. Statement of non-recurring profits and losses in the current period
√ Applicable□ Not applicable
Unit: yuan
||||
|-|-|-|
|Item|Amount|Remarks|
|||It mainly includes profits and losses on|
|Profits and losses on disposal of non-current|||
||200,975,719.36|disposal of long-term equity investment|
|assets|||
|||and on disposal of fixed assets|

2017 Annual Report
||||
|-|-|-|
|Government subsidies recorded in current|||
|profits and losses (except those closely||It mainly includes other government|
|related to the business and received as per|29,695,208.76|subsidies except refund of value-added tax|
|the national unified standard quota or||upon collection.|
|quanta)|||
|Payment for the use of state funds collected|||
|||It mainly includes income from interest of|
|from non-financial enterprises recorded in|15,607,133.62||
|||intercompany borrowings.|
|current profits and losses|||
|Profits and losses on assets entrusted to||It mainly includes profits and losses on|
||13,370,838.07||
|others for investment or management||finance products of banks.|
|Profit and loss on variation in fair value of|||
|held-for-trade financial assets or|||
|held-for-trade financial liabilities, and|||
|||It mainly includes investment income from|
|investment income from disposal of|||
||40,268,035.00|disposal of available-for-sale financial|
|held-for-trade financial assets, held-for-trade|||
|||assets.|
|financial liabilities, or salable financial|||
|assets, in addition to the effective hedging|||
|related to normal operations of the Company|||
|Other non-operating revenues or|||
||1,251,440.52||
|expenditures except the above items|||
|||Mainly performance compensation income|
|||(The amount of impairment loss of RMB|
|Other profits and losses items conforming to||299,457,551.04 provided by the Company|
|the definition of non-recurring profits and|296,624,143.44|on the goodwill of Shanghai Mokun was|
|losses||included in current profit or loss), the share|
|||payment expenses, and performance|
|||compensation expenses|
|Less: impact on income tax|36,707,567.83||
|Impact on minority interest|-11,246,235.69||
|Total|572,331,186.63|--|

The Company shall specify the reasons for definition of non-recurring profits and losses items according to Explanatory
Announcement on Information Disclosure by Companies Offering Securities to the Public No. 1– Non-recurring profits and losses and defining non-recurring profits and losses items listed in Explanatory Announcement on Information Disclosure by Companies Offering Securities to the Public No. 1– Non-recurring profits and losses as recurring profits and losses items.
□ Applicable√ Not applicable
2. Return on equity (ROE) and earnings per share
|||||
|-|-|-|-|
|||Earnings per share||
|Profits in the reporting period|ROE|||
|||Basic earnings per share|Diluted earnings per|

2017 Annual Report
|||||
|-|-|-|-|
|||(yuan/share)|share (yuan/share)|
|Net profit attributable to ordinary||0.76|0.76|
|shareholder(s) of the parent|28.12%|||
|company||||
|Net profit attributable to common||||
|shareholder(s) of the Company net|18.19%|0.49|0.49|
|of recurring profits and losses||||

TheCompany’s ROE calculated by net profit attributable to the shareholders of the listed company after deducting non-recurring gains and losses is18.19% in the reporting period, which was mainly due to the recognition as non-recurring gains and losses by the Company of the compensation of RMB 401,364,984.06 arising from ShanghaiMokun’s failure to meet the performance commitment, and due to the inclusion of the goodwill impairment of RMB 299,457,551.04 corresponding to the asset in recurring gains and losses. The Company considers and uses one non-GAAP measure, Adjusted Net Income/ (Loss), as supplemental measure to review and assess our operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with China Accounting Standards. The Company's Adjusted Net Income is RMB 1,408,706,561.26 for the year 2017, which is defined as net income attributable to shareholders of the listed company of RMB1, 620,582,427.47 excluding performance compensation income/expenses of RMB 397,608,243.44 and related goodwill impairment of RMB 299,457,551.04 generated by business acquisitions, after tax income/loss from disposal of equity investments of RMB 199,561,658.81 and share-based compensation of RMB 85,836,485.00. ROE for the year 2017 adjusted on this basis is24.44% (Adjusted ROE for the year 2016 is26.33%). Adjusted basic earnings per share and diluted earnings per share for the year 2017 both are 0.66 yuan (Adjusted basic EPS diluted EPS for the year 2016 both are 0.51 yuan).
3. Others
No