Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 Stock Code: 000505, 200505 Stock Name: JLKG, JL-B Announcement No. 2018-059 HAINAN JINGLIANG HOLDINGS CO., LTD.
THIRD QUARTER REPORT 2018 (SUMMARY)
October 2018
Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary) Part I Important Notes
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior managers of Hainan Jingliang Holdings Co., Ltd. (together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein.
All theCompany’s directors have attended the Board meeting for the review of this Report and its summary.
Wang Guofeng, theCompany’s legal representative, Guan Ying, theCompany’s head for financial affairs, and Liu Quanli, head of theCompany’s financial department (equivalent to financial manager) hereby guarantee that the financial statements carried in this Report are factual, accurate and complete.
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary) Part II Key Corporate Information
I Key Consolidated Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes√ No
||||||||
|-|-|-|-|-|-|-|
||30 September 2018||31 December 2017||Change (%)||
|Total assets (RMB)|5,580,372,664.55||6,082,383,851.23||-8.25%||
|Equity attributable to the listed|2,204,056,918.96||2,101,342,683.37||||
||||||4.89%||
|company’s shareholders (RMB)|||||||
||Q3 2018|YoY change (%)||Q1-Q3 2018||YoY change (%)|
|Operating revenue (RMB)|1,899,805,985.97|-14.91%||5,539,431,965.38||0.44%|
|Net profit attributable to the listed|42,345,394.93|||102,264,390.61|||
|||0.43%||||0.42%|
|company’s shareholders (RMB)|||||||
|Net profit attributable to the listed|||||||
|company’s shareholders before|42,526,321.21|301.98%||99,885,357.72||133.62%|
|exceptional items (RMB)|||||||
|Net cash generated from/used in||||419,583,694.49|||
||--|--||||142.19%|
|operating activities (RMB)|||||||
|Basic earnings per share (RMB/share)|0.06|-14.29%||0.15||-6.25%|
|Diluted earnings per share (RMB/share)|0.06|-14.29%||0.15||-6.25%|
|Weighted average return on equity (%)|2.00%|-0.06%||4.75%||-0.14%|

 Exceptional gains and losses:
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Q1-Q3 2018|Note|
|Gain or loss on disposal of non-current assets (inclusive of|||
||-1,796,072.16||
|impairment allowance write-offs)|||
|Gains/Losses on fair value changes of trading financial assets and|||
|liabilities & investment income from disposal of trading financial|||
|assets and liabilities as well as financial assets available for sale|5,360,397.35||
|(exclusive of effective hedges related to normal business|||
|operations of the Company)|||
|Non-operating income and expense other than above|885,054.45||
|Less: Income tax effects|1,112,344.91||
|Non-controlling interests effects (net of tax)|958,001.84||
|Total|2,379,032.89|--|

Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Gain/Loss Items:
□ Applicable√ Not applicable
Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary) No such cases for the Reporting Period.
II Total Number of Shareholders and Holdings of Top 10 Shareholders at 30 September 2018 1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders
Unit: share
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Number of preferred shareholderswith resumed voting rights (if any)||||||
|Number of ordinary shareholders|37,523|||||0|||
|Top 10 shareholders|||||||||
|||||||Shares in pledge or|||
||Nature of|Shareholding||Number of|Restricted||||
|Name of shareholder||||||frozen|||
||shareholder|percentage||shares|shares||||
|||||||Status||Shares|
|BEIJING GRAIN GROUP CO., LTD.|State-owned legalperson|42.06%||288,439,561|164,877,598||||
|BEIJING STATE-OWNED CAPITALOPERATION AND MANAGEMENTCENTER|State-owned legalperson|7.07%||48,510,460|48,510,460||||
|CHINA DEVELOPMENT BANKCAPITAL CO., LTD.|State-owned legalperson|3.33%||22,828,451|22,828,451||||
|GOLD BUFFALO RUNYING(TIANJIN) EQUITY INVESTMENTFUND MANAGEMENT CO.,LTD.—GOLD BUFFALORUNYING (TIANJIN) EQUITYINVESTMENT FUND (L.P.)|Other|3.33%||22,828,451|22,828,451||||
|LI SHERYN ZHAN MING|Foreign naturalperson|3.19%||21,873,700|0||||
|MEI JIANYING|Domestic naturalperson|0.38%||2,604,203|0||||
|DONGYANG HENGDIANGUARANTY CO., LTD.|Domesticnon-state-ownedlegal person|0.32%||2,204,976|0||||
|HU TIANGAO|Domestic naturalperson|0.30%||2,065,352|0||||
|ZHANG XIAOXIA|Domestic naturalperson|0.28%||1,949,250|0||||
|WANG DAO|Domestic naturalperson|0.28%||1,920,600|0||||
|Top 10 unrestricted shareholders|||||||||
||||||Shares by type||||
|Name of shareholder|Unrestricted shares||||||||
||||||Type||Shares||
|BEIJING GRAIN GROUP CO., LTD.|123,561,963||||RMB-denominated||||
||||||||123,561,963||
||||||ordinary stock||||
|LI SHERYN ZHAN MING|21,873,700||||Domestically listed||||
||||||||21,873,700||
||||||foreign stock||||
|MEI JIANYING|2,604,203||||RMB-denominated||||
||||||||2,604,203||
||||||ordinary stock||||
|DONGYANG HENGDIANGUARANTY CO., LTD.|2,204,976||||RMB-denominated||||
||||||||2,204,976||
||||||ordinary stock||||
|HU TIANGAO|2,065,352||||RMB-denominated||||
||||||||2,065,352||
||||||ordinary stock||||

Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary)
|||||
|-|-|-|-|
|ZHANG XIAOXIA|1,949,250|Domestically listed||
||||1,949,250|
|||foreign stock||
|WANG DAO|1,920,600|RMB-denominated||
||||1,920,600|
|||ordinary stock||
|WANG XIAOXING|1,808,000|RMB-denominated||
||||1,808,000|
|||ordinary stock||
|ZHANG PENG|1,790,000|RMB-denominated||
||||1,790,000|
|||ordinary stock||
|ZHONG YI|1,727,783|RMB-denominated||
||||1,727,783|
|||ordinary stock||
||Beijing State-Owned Capital Operation And Management Center owns 100% of Beijing|||
|Related or acting-in-concert parties|Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is a shareholder of the Company|||
|among shareholders above|(a 42.06% holding). Apart from that, the Company does not know whether there are any|||
||other related parties or acting-in-concert parties among the top 10 shareholders.|||
||1. Shareholder Wang Xiaoxing holds 1,808,000 shares in the Company through his account|||
|Top 10 ordinary shareholders||||
||of collateral securities for margin trading in Soochow Securities Co., Ltd.|||
|involved in securities margin trading||||
||2. Shareholder Zhong Yi holds 1,727,783 shares in the Company through his account of|||
|(if any)||||
||collateral securities for margin trading in Fortune Securities Co., Ltd.|||

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yea√ No
No such cases in the Reporting Period.
2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable√ Not applicable
Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary) Part III Significant Events
I Changes in Selected Consolidated Financial Statement Line Items and Explanation of why√ Applicable□ Not applicable
1. Monetary capital declined as at 30 September 2018 compared to 31 December 2017, primarily driven by the repayment of borrowings duringQ1~Q3 2018.
2. Financial assets at fair value through profit or loss declined as at 30 September 2018 compared to 31 December 2017, primarily because fewer futures contracts resulted in smaller margins.
3. Notes and accounts receivable rose as at 30 September 2018 compared to 31 December 2017, primarily because more customers were allowed to buy on credit to boost sales.
4. Prepayments declined as at 30 September 2018 compared to 31 December 2017, primarily because supplies associated with certain prepayments were received and such prepayments were thus reclassified as inventories. 5. The current portion of non-current assets declined as at 30 September 2018 compared to 31 December 2017, primarily driven by a smaller investment in wealth management products.
6. Other current assets rose as at 30 September 2018 compared to 31 December 2017, primarily driven by larger investments in government securities reverse repurchase and structured deposits.
7. Other non-current assets declined as at 30 September 2018 compared to 31 December 2017, primarily because equipment associated with certain prepayments were received and installed and such prepayments were thus reclassified as fixed assets.
8. Notes and accounts payable declined as at 30 September 2018 compared to 31 December 2017, primarily driven by payments to suppliers.
9. Payroll payable declined as at 30 September 2018 compared to 31 December 2017, primarily driven by the payment inQ1~Q3 2018 of the 2017 annual performance pay that had been set aside in 2017.
10. Other current liabilities declined as at 30 September 2018 compared to 31 December 2017, primarily driven by a smaller book loss on hedged items.
11. Taxes and surcharges declined duringQ1~Q3 2018 compared toQ1~Q3 2017, primarily becauseQ1~Q3 2017 had seen a land value added tax on real estate revenue, while there was no such revenue duringQ1~Q3 2018. 12. Finance costs rose duringQ1~Q3 2018 compared toQ1~Q3 2017, primarily driven by a larger amount of bank loans and higher cost of capital.
13. Asset impairment loss declined duringQ1~Q3 2018 compared toQ1~Q3 2017, primarily driven by some allowances for doubtful accounts inQ1~Q3 2017.
14. Investment income rose duringQ1~Q3 2018 compared toQ1~Q3 2017, primarily driven by the income generated from investments in government securities reverse repurchase and beneficiary certificates.
15. Gain on changes in fair value declined duringQ1~Q3 2018 compared toQ1~Q3 2017, primarily driven by changes in the fair value of futures positions.
16. Net cash generated from operating activities rose duringQ1~Q3 2018 compared toQ1~Q3 2017, primarily driven by the sales of inventory products.
17. Net cash generated from investing activities declined duringQ1~Q3 2018 compared toQ1~Q3 2017, primarily driven by more investments in reverse repurchase andbanks’ wealth management products.
Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary) 18. Net cash generated from financing activities declined duringQ1~Q3 2018 compared toQ1~Q3 2017, primarily driven by a higher amount of bank loan repayment inQ1~Q3 2017.
II Progress, Influence and Solutions Associated with Significant Events
□ Applicable√ Not applicable
III Commitments that theCompany’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Other Parties, Failed to Fulfill on Time during Reporting Period
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IV 2018 Annual Operating Performance Forecast
Warning of a forecast loss on or a forecast significant year-on-year change in net profit for year 2018, as well as explanation of why:
□ Applicable√ Not applicable
V Securities Investments
√ Applicable□ Not applicable
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||Gain/Los||||||||
|||||||s on|Accumul|||||||
|||||||||Purchas||Gain/los||||
||||Initial||Beginni|fair-valu|ated||Sold in|||||
|||||Measur||||ed in||s in|Ending|||
|Security|Security|Security|invest||ng|e|fair-value||Reporti|||Account|Funding|
|||||ement||||Reporti||Reporti|carrying|||
|type|code|name|ment||carrying|changes|changes||ng|||ing title|source|
|||||method||||ng||ng|amount|||
||||cost||amount|in|charged||Period|||||
|||||||||Period||Period||||
|||||||Reportin|to equity|||||||
|||||||g Period||||||||
|||||||||17,709,|17,709,|||||
|||||Cost||||||2,585,3||Other|Self-rais|
|Other|204001|GC001||||||600,000|600,000||0.00|||
|||||method||||||61.95||assets|ed|
|||||||||.00|.00|||||
|||||Cost||||388,400|388,400|74,885.||Other|Self-rais|
|Other|204002|GC002|||||||||0.00|||
|||||method||||,000.00|,000.00|68||assets|ed|
|||||Cost||||57,800,|57,800,|46,619.||Other|Self-rais|
|Other|204003|GC003|||||||||0.00|||
|||||method||||000.00|000.00|45||assets|ed|
|||||Cost||||171,800|171,800|101,482||Other|Self-rais|
|Other|204004|GC004|||||||||0.00|||
|||||method||||,000.00|,000.00|.98||assets|ed|
|||||Cost||||606,000|606,000|501,621||Other|Self-rais|
|Other|204007|GC007|||||||||0.00|||
|||||method||||,000.00|,000.00|.73||assets|ed|
|||||||||18,933,|18,933,|||||
|||||||||||3,309,9||||
|Total|||0.00|--|0.00|0.00|0.00|600,000|600,000||0.00|--|--|
|||||||||||71.79||||
|||||||||.00|.00|||||

Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary)
|||
|-|-|
|Disclosure date of||
|announcement on Board’s||
||27 January 2018|
|consent for securities||
|investments||
|Disclosure date of||
|announcement on general||
|meeting’s consent for|13 February 2018|
|securities investments (if||
|any)||

VI Wealth Management Entrustment
√ Applicable□ Not applicable
Unit:RMB’0,000 (in RMB ten thousand yuan)
||||||
|-|-|-|-|-|
||||Outstanding amount||
|Type of wealth management|Funding source|Principal||Overdue amount|
||||before maturity||
|Wealth management product|||||
||Idle raised|26,000|20,000|0|
|purchased from securities trader|||||
|Wealth management product|||||
||Self-funded|6,780|4,280|0|
|purchased from bank|||||
|Total||32,780|24,280|0|

 High-risk wealth management entrustments with amounts that are individually significant, or with low security, low liquidity, or no protection of the principal:
√ Applicable□ Not applicable
Unit:RMB’0,000 (in RMB ten thousand yuan)
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||Collecti|||||
|||Type|||||||||||Throu|Any||
||||||||||Refere|Actual|on/pay|Impai||||
|||of|||||Invest||||||gh|plan|Overview|
||Type|||Fundi|||||nce|gain/lo|ment of|rment||||
|||wealth|||||ment||||||prescr|for|and index|
||of||Princip|ng|Start|End||Way of|annual|ss in|gain/los|allow||||
|Trustee||manag|||||with||||||ibed|furthe|to more|
||truste||al|sourc|date|date||payback|ized|Reporti|s in|ance||||
|||ement|||||princip||||||proce|r|information|
||e|||e|||||return|ng|Reporti|(if||||
|||produc|||||al||||||dure|entrus|(if any)|
||||||||||(%)|Period|ng|any)||||
|||t|||||||||||or not|tment||
||||||||||||Period|||||
|||||||||Pay the||||||||
|||||||||principal||||||||
|||Certifi||Idle|||Agree||||||||www.cninf|
||Securi|||||28||and||||||||
|CITIC||cation||raise|29||ment||||||||o.com.cn:|
||ties|||||Septe||earnings at|||Redeem|||||
|SECURI||of|6,000|d|June||of||4.00%|59.84|||Yes|No|2018-044|
||comp|||||mber||the|||ed|||||
|TIES||trust||capit|2018||contra||||||||and|
||any|||||2018||maturity||||||||
|||receipt||al|||ct||||||||2018-055|
|||||||||date of||||||||
|||||||||investment||||||||
|||||||||Pay the||||||||
|||||||||principal||||||||
|||Certifi||Idle|||Agree|||||||||
|DONGX|Securi|||||17||and||||||||
|||cation||raise|||ment||||||||www.cninf|
|ING|ties||||4 July|Dece||earnings at|||Unrede|||||
|||of|20,000|d|||of||4.80%|0|||Yes|No|o.com.cn:|
|SECURI|comp||||2018|mber||the|||emed|||||
|||trust||capit|||contra||||||||2018-045|
|TIES|any|||||2018||maturity||||||||
|||receipt||al|||ct|||||||||
|||||||||date of||||||||
|||||||||investment||||||||
|Total|||26,000|--|--|--|--|--|--|59.84|--||--|--|--|

Wealth management entrustments with possible impairments including an expectedly unrecoverable principal:
□ Applicable√ Not applicable
Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary) VII Investments in Derivative Financial Instruments
√ Applicable□ Not applicable
Unit:RMB’0,000 (in RMB ten thousand yuan)
|||||||
|-|-|-|-|-|-|
|||||Ending||
||||||Actual gain/loss|
||||Ending|investment as %||
|Type of derivative|Start date|End date|||in Reporting|
||||investment|of the Company’s||
||||||Period|
|||||ending net assets||
|Soybean hedging|1 January 2018|30 September 2018|6,271.62|2.28%|-4,750.5|
|Foreign exchange forwards|1 January 2018|30 September 2018|0|0.00%|3,322.53|
|Agricultural product future contract|1 January 2018|30 September 2018|2,938.86|1.07%|4,371.86|
|Agricultural product future contract|1 January 2018|30 September 2018|1,512.18|0.55%|346.03|
|Agricultural product future contract|1 January 2018|30 September 2018|0.1|0.00%|-427.76|
|Agricultural product future contract|1 September 2018|19 September 2018|0|0.00%|0.04|
|Total|--|--|10,722.76|3.90%|2,862.2|
|Funding source|Self-funded|||||
|Legal matters involved (if||||||
||N/A|||||
|applicable)||||||
|Disclosure date of board|13 April 2018|||||
|announcement approving derivative|9 June 2018|||||
|investment (if any)||||||
|Disclosure date of general meeting|11 May 2018|||||
|announcement approving derivative|27 June 2018|||||
|investment (if any)||||||
||The Company’s conduction of hedging business is not aimed at speculation, but mainly to|||||
||effectively avoid the impact of raw material price fluctuation on the Company. However,|||||
||there will be certain risks: 1. Price fluctuation risk: price fluctuation risk may be generated|||||
||when the futures market changes greatly, resulting in transaction losses; 2. Capital risk:|||||
||capital risk may be correspondingly brought because the futures trading adopts margin and|||||
||marking-to-market system; 3. Internal control risk: there may be risks due to imperfect|||||
||internal control system for the high expertise and complexity of futures trading; 4. Technical|||||
||risk: there may be technical risks due to incomplete computer systems. The Company adopts|||||
||following risk control measures: 1. Matching the hedging business with the Company’s|||||
|Analysis of risks and control||||||
||production and operation so as to maximally reduce the price fluctuation risk; 2. The|||||
|measures associated with derivative||||||
||Company will reasonably dispatch its own funds for hedging business, strictly control the|||||
|investments held in Reporting Period||||||
||hedging fund scale and reasonably plan and use margins; 3. Regulations for Commodity|||||
|(including but not limited to market||||||
||Futures Trading and Regulations for Futures Business are formulated at the Company and|||||
|risk, liquidity risk, credit risk,||||||
||subsidiaries levels respectively based on actual situation of the Company and pursuant to|||||
|operational risk, legal risk, etc.)||||||
||governing stipulations of Guidelines for Standard Operation of Companies Listed in|||||
||Shenzhen Stock Exchange which have made clearly stipulations about the amount, variety|||||
||scope, approval authority, internal approval procedures, responsible departments and persons,|||||
||information isolation measures, internal risk report and related solution process, information|||||
||disclosure, etc. regarding hedging business. The Company will strictly control all sectors in|||||
||accordance with the two regulations formulated; 4. Establishing qualified systems for|||||
||transaction, communication and information services so as to guarantee the normal operation|||||
||of the transaction system and smooth proceeding of transactions. When a wrong order occurs,|||||
||corresponding measures should be timely taken to reduce losses.|||||
|Changes in market prices or fair||||||
|value of derivative investments in|The value of the Company’s future contracts changed according to the contract prices|||||
|Reporting Period (fair value analysis|declared by the future exchange, which were broadly representative. And the fair value of the|||||
|should include measurement method|Company’s future contracts was executed in strict compliance with the future exchange’s|||||
|and related assumptions and|settlement methods.|||||
|parameters)||||||
|Major changes in accounting||||||
|policies and specific accounting||||||
|principles adopted for derivative|N/A|||||
|investments in Reporting Period||||||
|compared to last reporting period||||||

Hainan Jingliang Holdings Co., Ltd. Third Quarter Report 2018 (Summary)
|||
|-|-|
||The relevant decision-making procedures for the Company and its majority-owned|
||subsidiaries to conduct foreign exchange derivatives trading business are in compliance with|
||relevant national laws, regulations and the governing provisions of the Articles of|
|Opinion of independent directors on||
||Association. Based on normal production and operation, the Company uses foreign exchange|
|derivative investments and risk||
||derivatives instruments to reduce exchange rate risks and finance costs, and control business|
|control||
||risks. There is no harm to the interests of the Company and all other shareholders, especially|
||minority shareholders. It is agreed that the Company and its majority-owned subsidiaries will|
||conduct foreign exchange derivative trading business within the consideration amount.|

 VIII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc. during Reporting Period
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IX Irregularities in Provision of Guarantees for External Parties
□ Applicable√ Not applicable
No such cases in the Reporting Period.
X Occupation of theCompany’s Capital by Controlling Shareholder or Its Related Parties for Non-Operating Purposes
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Hainan Jingliang Holdings Co., Ltd. 23 October 2018