Zhejiang Shibao : INSIDE INFORMATION - 2019 THIRD QUARTERLY REPORT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited ("Hong Kong Stock Exchange") take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Zhejiang Shibao Company Limited*

浙江世寶股份有限公司

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

(Stock Code: 1057)

INSIDE INFORMATION

2019 THIRD QUARTERLY REPORT

This announcement is made by Zhejiang Shibao Company Limited (the "Company") pursuant to the disclosure requirements as set out in Rules 13.09(2)(a) and 13.10B of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The quarterly report (unaudited) contained in this announcement has been prepared in accordance with the "China Accounting Standards of Business Enterprises" and in accordance with the requirements on preparation and disclosure of quarterly report issued by China Securities Regulatory Commission (the "CSRC"), and has been considered and approved by the Board of Directors of the Company.

1. IMPORTANT NOTICE

The Board of Directors, Supervisory Committee, Directors, Supervisors and senior management of the Company undertake that this quarterly report is true, accurate and complete, and does not contain false accounting, misleading statements or material omissions, and jointly and severally accept full legal responsibilities for its contents.

All Directors were present at the Board meeting to consider and approve this quarterly report.

Zhang Shi Quan, the Legal Representative, Zhang Lan Jun, the Person-in-Charge of Accounting Work, and Li Gen Mei, the Person-in-Charge of Accounting Organisation (Head of the Accounting Department), of the Company declare that the financial statements contained in this quarterly report are true, accurate and complete.

* For identification purpose only

1

1. KEY FINANCIAL INFORMATION AND SHAREHOLDERS' SITUATION

1. KEY ACCOUNTING INFORMATION AND FINANCIAL INDICATORS

The Company had no retrospective adjustments or restatement of the financial data in the previous periods made in respect of change in accounting policies and correction of accounting errors.

															Unit: RMB
			30 September 2019			31 December 2018			Change
	Total assets	1,963,877,379.45	2,045,077,333.85		-3.97%
	Net assets attributable to shareholders of	1,443,757,138.87	1,478,546,682.81		-2.35%
	the listed company
			July - September			Change				January -		Change
			2019					September 2019
	Operating revenue	236,322,449.51				-19.78%			686,835,516.68		-22.49%
	Net profit attributable to shareholders of	-16,361,424.73				-3,645.43%			-34,789,543.94		-544.85%
	the listed company
	Net profit after non-recurring gains and
	losses attributable to shareholders of the		-20,113,429.09				-428.47%			-45,769,468.89		-130.64%
	listed company
	Net cash flows from operating activities	21,397,736.69				308.55%			14,254,463.95		300.52%
	Basic earnings per share (RMB/share)	-0.0208				-3,566.67%			-0.0441		-548.53%
	Diluted earnings per share (RMB/share)	-0.0208				-3,566.67%			-0.0441		-548.53%
	Weighted average return on net assets		-1.13%				-1.16%			-2.38%		-2.01%
	(%)
	Items of non-recurring gains and losses and their amounts
															Unit: RMB
	Item							January - September 20189
	Gain or loss on disposal of non-current assets (including those provision for asset

	352,630.44
impairment write-off)

Government subsidy included in profit or loss for the period (except for those

closely related to business of the Company and those granted by the government in10,208,336.20 fixed amount or quantity according to national standards)

	Gain or loss on entrusted investment or asset management		927,949.33
	Other non-operating income and expenses other than the above		-200,355.73
	Less: Effect on enterprise income tax
	Effect on interest of minority shareholders (after tax)		308,635.29
	Total		10,979,924.95

Note: During the reporting period, no non-recurring gains and losses defined and listed in the "Disclosure

Explaining Announcement No.1 for Companies Offering Securities Publicly - Non-Recurring Gains and

Losses" were defined as recurring gains and losses.

2

2. TOTAL NUMBER OF SHAREHOLDERS AND LIST OF SHAREHOLDING FOR TOP TEN SHAREHOLDERS AS AT THE END OF THE REPORTING PERIOD

1) Number of shareholders and list of shareholding for top ten shareholders

Unit: Share

Total number of shareholders of

ordinary shares as at the end of37,698 the reporting period

Shareholding of top ten shareholders

Number of

Status on pledge

Name of shareholders

Nature of

Shareholding

Number of

shares held

or lock-up

shareholders

percentage

shares held

with selling

Status

Number

restrictions

Zhejiang Shibao Holding Group

Domestic

43.28%

341,786,098

Co., Ltd.

non-state owned

legal person

HKSCC Nominees Limited

Foreign legal

27.48%

216,964,273

person

Zhang Shi Quan

Domestic natural

3.34%

26,391,580

19,793,685

person

Li Hong Quan

Domestic natural

0.82%

6,487,263

person

Li Dan

Domestic natural

0.19%

1,530,851

person

Jian Rong Kang

Domestic natural

0.14%

1,118,600

person

Xiao Hui Qiong

Domestic natural

0.14%

1,084,000

person

Chen Wen Ping

Domestic natural

0.12%

920,755

person

Ying Ling Li

Domestic natural

0.11%

897,900

person

Zheng Xiu Feng

Domestic natural

0.10%

812,656

person

3

Shareholding of top ten shareholders of ordinary shares without selling restrictions

				Number of ordinary shares		Types of shares
	Name of shareholders			held without selling
				Types of shares		Number
				restrictions
	Zhejiang Shibao Holding Group Co., Ltd.		341,786,098	RMB-dominated			341,786,098
		ordinary shares
						Overseas listed			216,489,450
	HKSCC Nominees Limited	216,964,273		foreign shares
		RMB-dominated			474,823
						ordinary shares
	Zhang Shi Quan		6,597,895	RMB-dominated			6,597,895
		ordinary shares
	Li Hong Quan		6,487,263	RMB-dominated			6,487,263
		ordinary shares
	Li Dan		1,530,851	RMB-dominated			1,530,851
		ordinary shares
	Jian Rong Kang		1,118,600	RMB-dominated			1,118,600
		ordinary shares
	Xiao Hui Qiong		1,084,000	RMB-dominated			1,084,000
		ordinary shares
	Chen Wen Ping		920,755	RMB-dominated			920,755
		ordinary shares
	Ying Ling Li		897,900	RMB-dominated			897,900
		ordinary shares
	Zheng Xiu Feng		812,656	RMB-dominated			812,656
		ordinary shares

Illustrations on the connected relationship or acting in concert for the shareholders above

Zhejiang Shibao Holding Group Co., Ltd. is the controlling shareholder of the Company and Zhang Shi Quan is the de facto controller of the Company. The Company is not aware of other shareholders who were connected or acted in concert with each other.

Margin trading and short selling by top ten	Nil.
shareholders of ordinary shares without selling
restrictions (if any)

Note: None of the Company's top ten shareholders of ordinary shares and top ten shareholders of ordinary

shares without selling restrictions has conducted agreed repurchase transactions during the reporting

period.

4

1. SIGNIFICANT EVENTS

1. MATERIAL CHANGES TO MAJOR ACCOUNTING ITEMS AND FINANCIAL INDICATORS DURING THE REPORTING PERIOD AND THEIR REASONS

1) Illustrations of items with significant changes in the consolidated balance sheet
						Unit: RMB
Item	30 September 2019		31 December 2018	Change
Amount	% to total assets		Amount	% to total assets
Cash on hand and at bank	126,133,679.60	6.42%	129,531,349.92	6.33%	0.09%
Notes receivable	132,864,262.76	6.77%	142,065,764.04	6.95%	-0.18%
Accounts receivable	395,759,436.92	20.15%	468,614,553.04	22.91%	-2.76%
Inventories	288,339,859.21	14.68%	296,617,482.37	14.50%	0.18%
Fixed assets	682,345,444.53	34.74%	648,472,200.05	31.71%	3.04%
Accounts payable	283,210,992.62	14.42%		308,232,664.17	15.07%	-0.65%

During the reporting period, there was no significant change in the asset composition of the Company.

2) Illustrations of items with significant changes in the consolidated income statement
			Unit: RMB
Item	January-September 2019	January-September 2018	Change
Financial expenses	1,752,264.67	-355,239.00	593.26%
Investment gains	927,949.33	3,020,563.44	-69.28%
Credit impairment losses	-1,302,921.78	1,305,096.97	199.83%
("-" for loss)
Gains from disposal of assets	352,630.44	-102,951.37	442.52%
("-" for loss)
Income tax expenses	-1,265,518.58	112,271.25	-1227.20%

The reasons for the increase/decrease of more than 30% in the figures for the reporting period compared to the corresponding period of last year were analyzed as follows:

Financial expenses increased by 593.26% as compared with the corresponding period of last year, which was mainly due to the decrease in interest income. Investment gains decreased by 69.28% as compared with the corresponding period of last year, which was mainly attributable to the decrease in purchase of short-term bank wealth management products causing the decrease in the relevant income. Credit impairment losses increased by 199.83% as compared with the corresponding period of last year, which was mainly due to the increase in provision of bad debt on accounts receivable. Gains from disposal of assets increased by 442.52% as compared with the corresponding period of last year, which mainly come from the gains of disposal of old equipment. Income tax expenses decreased by 1227.20% as compared with the corresponding period of last year, which was mainly due to the decrease in provision of deferred income expenses.

5

3) Illustrations of items with significant changes in the consolidated statement of cash flows

Item

Sub-total of cash inflow from operating activities

Sub-total of cash outflow from operating activities

Net cash flows from operating activities

Sub-total of cash inflow from financing activities

Sub-total of cash outflow from financing activities

Net cash flows from investing activities

Sub-total of cash inflow from financing activities

Sub-total of cash outflow from financing activities

Net cash flows from financing activities

Net increase in cash and cash equivalents

		Unit: RMB
January-September 2019	January-September 2018	Change
485,779,401.43	511,083,181.74	-4.95%
471,524,937.48	518,192,001.04	-9.01%
`14,254,463.95	-7,108,819.30	300.52%
136,545,058.98	310,360,503.37	-56.00%
199,238,941.43	338,339,191.96	-41.11%
-62,693,882.45	-27,978,688.59	-124.08%
218,700,000.00	224,000,000.00	-2.37%
178,411,688.67	206,734,869.61	-13.70%
40,288,311.33	17,265,130.39	133.35%
-7,930,316.56	-17,817,132.73	55.49%

The reasons for the increase/decrease of more than 30% in the figures for the reporting period compared to the corresponding period of last year were analyzed as follows:

Net cash flows from operating activities increased by 300.52% as compared to the corresponding period of last year, which was mainly due to the decrease in sales scale causing the payment of materials purchased decrease, and the decrease in the number of staff of production lines causing the payment of salary decrease. Net cash flows from investing activities decreased by 124.08% as compared to the corresponding period of last year, mainly due to the decrease in funds used for purchase of wealth management products. Net cash flows from financing activities increased by 133.35% as compared to the corresponding period of last year, mainly due to the increase in bank borrowings. In view of the above, the net cash and cash equivalents increased by 55.49% as compared to the corresponding period of last year.

2. PROGRESS OF IMPORTANT EVENTS AND THEIR IMPACT AND SOLUTIONS During the reporting period, there was no significant event progress of the Company.

6

3. UNDERTAKINGS HAS BEEN FULFILLED DURING THE REPORTING PERIOD AND HAS NOT BEEN FULFILLED AT THE END OF THE REPORTING PERIOD BY THE COMPANY, SHAREHOLDERS, DE FACTO CONTROLLERS, ACQUIRERS, DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT OR OTHER RELATED PARTIES

Party

Particulars

involved in

Type of

Undertaking

Term for

Under-taking

Details of undertaking

on the

under-

undertaking

date

undertaking

performance

taking

Under-

taking made on initial public offering or refinancing

Whether undertaking was fulfilled on time

Zhejiang Shibao Holding Group Co.,

Ltd., the controlling shareholder of the

Under-

Company, undertakes that within 36

On and after 2

Zhejiang

months from the date the A Shares issued

November

Shibao

taking on

under the issue are listed, no transfer or

2 November

2015 of being

Holding

shares with

no entrust others to manage the A Shares

In progress

2012

a controlling

Group Co.,

selling

held by it, and no purchase of these

shareholder of

Ltd.

restrictions

shares by the Company. After the above

the Company

period is expired, no transfer of more than

25% of the total A Shares held by it each

year.

Zhang Shi Quan, Zhang Bao Yi, Tang

Hao Han, Zhang Lan Jun and Zhang Shi

Zhong, the de facto controllers of the

On and after 2

Company, undertake that within 36

November

Zhang Shi

months from the date the A Shares issued

Under-

2015 of being

Quan, Zhang

under the issue are listed, no transfer of

a de facto

Bao Yi, Tang

taking on

paid capital in Shibao Holding. After the

2 November

controller,

Hao Han,

shares with

above period is expired, no transfer of

In progress

2012

director and

Zhang Lan

selling

more than 25% of the total paid capital

senior

Jun, Zhang

restrictions

held by him/her each year during his/her

management

Shi Zhong

term of office; no transfer of the total paid

of the

capital held by him/her within 6 months

Company

after he/she leaves the post as the

Company's director and senior

management.

Zhang Shi Quan, a shareholder of the

Company, undertakes that within 36

months from the date the A Shares issued

On and after 2

under the issue are listed, no transfer or

November

Under-

no entrust others to manage the A Shares

2015 of being

held by him, and no purchase of these

a de facto

taking on

Zhang Shi

shares by the Company. As a director and

2 November

controller,

In progress

shares with

Quan

senior management of the Company, after

2012

director and

selling

the above period is expired, no transfer of

senior

restrictions

more than 25% of the total A Shares held

management

by him each year during his term of

of the

office; no transfer of the A Shares held by

Company

him within 6 months after he leaves the

post.

Yes

7

4. FORECAST ON THE OPERATING RESULTS FOR 2019

	Net profit attributable to shareholders of the listed company		-15,000.00		To		-10,000.00
	of 2019 (RMB ten thousands)
	Net profit attributable to shareholders of the listed company					727.84
	of 2018 (RMB ten thousands)
			Poor performance in the automotive industry has led to a
			decline in operating income and earnings. The
	Illustrations on reasons attributable to the movements in		deterioration in performance of individual customers has
		made it difficult to collect due payment, and it is
	results
		expected that bad debts will occur. Due to product
			quality problems, relevant replacement and repair costs
			need to be undertaken.

5. FINANCIAL ASSETS MEASURED AT FAIR VALUE

Unit: RMB

Gain/loss on

Cumulative

Amount sold

Type of assets

Initial investment

changes in fair

changes in fair

Amount purchased

cost

value for the

value recorded in

for the period

for the period

period

equity

Bank wealth

management

60,000,000.00

90,000,000.00

130,000,000.00

products

Bank wealth

management

10,000,000.00

products

Total

60,000,000.00

100,000,000.00

130,000,000.00

(Continued)

Type of assets

Cumulative

Amount as at the

Source of fund

investment gains

end of the period

Bank wealth

management

927,949.33

20,000,000.00

Fund raising

products

Bank wealth

management

10,000,000.00

Internal fund

products

Total

927,949.33

30,000,000.00

--

1. INFORMATION ON ILLEGAL EXTERNAL GUARANTEES
   During the reporting period, the Company had no illegal external guarantee.
2. INFORMATION ON NON-OPERATING USE OF FUNDS OF THE COMPANY BY THE CONTROLLING SHAREHOLDER AND ITS RELATED PARTIES
   During the reporting period, there was no non-operating use of funds of the Company by the controlling shareholder of the Company and its related parties.

8

8. ENTRUSTED WEALTH MANAGEMENT

									RMB ten thousands
			Source of funds of		Amount of entrusted				Overdue amount not
	Type		entrusted wealth			Unexpired balance
			wealth management			recovered
			management
	Bank wealth		Fund raising		9,000.00		2,000.00
	management products
	Bank wealth		Own funds		1,000.00		1,000.00
	management products
	Total			10,000.00		3,000.00

9. REGISTRATION FORM FOR HOSTING RESEARCHERS, COMMUNICATIONS AND INTERVIEWS DURING THE REPORTING PERIOD

During the reporting period, there was no hosting of researchers, communications and interviews.

9

1. FINANCIAL STATEMENTS

1.	FINANCIAL STATEMENTS
1)	Consolidated Balance Sheet
			Unit: RMB
	Item	30 September 2019	31 December 2018
Current Assets:
	Cash on hand and at bank	126,133,679.60	129,531,349.92
	Financial assets held for trading	30,000,000.00	60,000,000.00
	Notes receivable	132,864,262.76	142,065,764.04
	Accounts receivable	395,759,436.92	468,614,553.04
	Prepayments	6,784,401.54	5,961,331.19
	Other receivables	8,087,161.53	7,223,954.38
	including：interest receivable
	dividend receivable
	Inventories	288,339,859.21	296,617,482.37
	Other current assets	18,711,761.96	14,024,896.78
Total current assets	1,006,680,563.52	1,124,039,331.72
Non-current Assets:
	Investment property	37,051,586.86	23,875,050.98
	Fixed assets	682,345,444.53	648,472,200.05
	Construction in progress	94,026,971.32	101,847,457.97
	Intangible assets	87,485,483.16	90,633,988.60
	Goodwill	4,694,482.34	4,694,482.34
	Deferred income tax assets	4,801,409.28	3,795,739.02
	Other non-current assets	46,791,438.44	47,719,083.17
Total non-current assets	957,196,815.93	921,038,002.13
Total Assets	1,963,877,379.45	2,045,077,333.85

10

1) Consolidated Balance Sheet (continued)

				Unit: RMB
Item		30 September 2019		31 December 2018
Current Liabilities:
Short-term borrowings		63,000,000.00	20,000,000.00
Notes payable		66,000,931.03	120,498,802.21
Accounts payable		283,210,992.62	308,232,664.17
Receipts in advance		4,217,254.48	2,090,618.17
Contract liabilities		6,622,026.05	3,902,211.90
Staff costs payable		12,928,293.70	13,581,085.61
Taxes payable		1,106,229.89	1,905,954.69
Other payables		2,603,213.80	1,884,413.39
including：interest payable		952,871.19	910,048.62
dividend payable
Other current liabilities		17,930,129.86	18,038,269.86
Total current liabilities		457,619,071.43	490,134,020.00
Non-current Liabilities:
Long-term borrowings		9,080,000.00	9,080,000.00
Deferred income		45,323,459.34	52,234,573.03
Deferred income tax liabilities		2,843,889.25	3,106,579.85
Total non-current liabilities		57,247,348.59	64,421,152.88
Total Liabilities		514,866,420.02	554,555,172.88
Shareholders' Equity:
Share capital		789,644,637.00	789,644,637.00
Capital reserve		182,334,093.78	182,334,093.78
Surplus reserve		135,379,620.20	135,379,620.20
Retained earnings		336,398,787.89	371,188,331.83
Equity attributable to equity holders of the	1,443,757,138.87	1,478,546,682.81
parent
Minority interests		5,253,820.56	11,975,478.16
Total Shareholders' Equity		1,449,010,959.43	1,490,522,160.97
Total Liabilities and Shareholders' Equity	1,963,877,379.45	2,045,077,333.85
Legal Representative: Zhang Shi Quan	Chief Financial Officer: Zhang Lan Jun	Head of Finance Section: Li Gen Mei

11

2) Balance Sheet of the Parent

		Unit: RMB
Item	30 September 2019	31 December 2018
Current Assets:
Cash on hand and at bank	43,915,776.25	38,118,008.66
Financial assets held for trading	10,000,000.00	20,000,000.00
Notes receivable		1,840,000.00
Accounts receivable	56,338,960.14	59,046,603.56
Prepayments	1,288,453.01	1,325,090.40
Other receivables	371,815,146.35	373,291,338.80
including：interest receivable
dividend receivable
Inventories	9,715,439.76	10,821,449.25
Other current assets	13,317,248.23	3,907,924.37
Total current assets	506,391,023.74	508,350,415.04
Non-current Assets:
Long-term receivables	288,000,000.00	288,000,000.00
Long-term equity investments	185,159,214.87	185,159,214.87
Investment property	17,223,110.79	17,889,608.94
Fixed assets	111,285,896.06	77,182,953.94
Construction in progress	47,536,895.42	24,842,997.63
Intangible assets	34,013,410.47	34,646,333.12
Deferred income tax assets	97,282.93	97,276.77
Other non-current assets	11,027,015.05	14,091,246.43
Total non-current assets	694,342,825.59	641,909,631.70
Total Assets	1,200,733,849.33	1,150,260,046.74

12

2) Balance Sheet of the Parent (continued)

				Unit: RMB
Item		30 September 2019		31 December 2018
Current Liabilities:
Short-term borrowings		63,000,000.00	20,000,000.00
Notes payable		3,530,000.00	2,450,000.00
Accounts payable		29,323,087.48	12,605,259.36
Receipts in advance		2,950,347.54	2,090,618.17
Contract liabilities		5,500.00	5,500.00
Staff costs payable		437,530.27	1,200,727.74
Taxes payable		209,410.18	798,591.50
Other payables		756,771.20	333,967.46
including：interest payable		73,880.87	27,912.50
dividend payable
Other current liabilities		660,000.00	880,000.00
Total Liabilities		100,872,646.67	40,364,664.23
Non-current Liabilities
Total Liabilities		100,872,646.67	40,364,664.23
Shareholders' Equity:
Share capital		789,644,637.00	789,644,637.00
Capital reserve		187,767,058.72	187,767,058.72
Surplus reserve		74,376,643.16	74,376,643.16
Retained earnings		48,072,863.78	58,107,043.63
Total Shareholders' Equity		1,099,861,202.66	1,109,895,382.51
Total Liabilities and Shareholders' Equity	1,200,733,849.33	1,150,260,046.74
Legal Representative: Zhang Shi Quan	Chief Financial Officer: Zhang Lan Jun	Head of Finance Section: Li Gen Mei

13

3) Consolidated Income Statement

				Unit: RMB
Item	July -	July -	January -	January -
September 2019	September 2018	September 2019	September 2018
1. Total operating revenue	236,322,449.51	294,586,754.54	686,835,516.68	886,165,531.85
Including: Operating revenue	236,322,449.51	294,586,754.54	686,835,516.68	886,165,531.85
2. Total operating costs	258,808,308.53	299,507,977.72	737,867,077.81	910,449,464.70
Including: Operating costs	197,921,911.91	242,637,303.38	570,763,375.85	740,661,930.26
Taxes and surcharges	1,625,410.11	1,525,213.24	5,567,756.49	6,426,732.63
Selling expenses	28,658,547.60	20,248,197.42	68,817,873.76	60,777,060.75
General and administrative	16,953,540.58	17,702,015.31	49,651,446.21	53,210,462.33
expenses
Research and development	13,460,452.95	17,419,220.51	41,314,360.83	49,728,517.73
expenses
Financial expenses	188,445.38	-23,972.14	1,752,264.67	-355,239.00
Including: Interest expenses	991,106.57	878,154.31	2,754,511.24	2,501,368.36
Interest income	595,828.32	931,821.94	1,280,186.34	3,252,406.40
Add : Other gains	3,559,793.23	4,310,443.65	10,208,336.20	11,382,166.44
Investment gains ("-" for loss)	269,260.27	583,972.60	927,949.33	3,020,563.44
Credit impairment losses	-284,653.91		-1,302,921.78	1,305,096.97
("-" for loss)
Assets impairment losses	-581,899.85	315,037.57	-1,651,818.68	-1,489,862.15
("-" for loss)
Gains from disposal of assets	56,632.76	-216,859.28	352,630.44	-102,951.37
("-" for loss)
3. Operating profit ("-" for loss)	-19,466,726.52	71,371.36	-42,497,385.62	-10,168,919.52
Add : Non-operating income	37,142.52	89,447.44	68,819.72	656,868.22
Less : Non-operating expenses	50,348.12	108,988.80	348,154.22	523,542.81
4. Total profit ("-" for total loss)	-19,479,932.12	51,830.00	-42,776,720.12	-10,035,594.11
Less : Income tax expenses	-493,456.83	-236,485.52	-1,265,518.58	112,271.25
5. Net profit ("-" for net loss)	-18,986,475.29	288,315.52	-41,511,201.54	-10,147,865.36
(1) Classification by business continuity
1. Net profit from continuing operation	-18,986,475.29	288,315.52	-41,511,201.54	-10,147,865.36
("-" for net loss)
(2) Classification by ownership
1. Net profit attributable to equity	-16,361,424.73	461,478.88	-34,789,543.94	-5,395,018.74
holders of the parent
2. Minority interests	-2,625,050.56	-173,163.36	-6,721,657.60	-4,752,846.62

14

3) Consolidated Income Statement (continued)

					Unit: RMB
Item		July -	July -	January -	January -
	September 2019	September 2018	September 2019	September 2018
6. Other comprehensive income after tax,	-	-	-	-
net
7. Total comprehensive income		-18,986,475.29	288,315.52	-41,511,201.54	-10,147,865.36
Total comprehensive income attributable to	-16,361,424.73	461,478.88	-34,789,543.94	-5,395,018.74
equity holders of the parent
Total comprehensive income attributable to	-2,625,050.56	-173,163.36	-6,721,657.60	-4,752,846.62
minority interests
8. Earnings per share:
(1) Basic earnings per share		-0.0208	0.0006	-0.0441	-0.0068
(2) Diluted earnings per share		-0.0208	0.0006	-0.0441	-0.0068
Legal Representative: Zhang Shi Quan	Chief Financial Officer: Zhang Lan Jun	Head of Finance Section: Li Gen Mei

15

4) Income Statement of the Parent

					Unit: RMB
Item		July -	July -	January -	January -
	September 2019	September 2018	September 2019	September 2018
1. Operating revenue		11,769,867.58	8,696,733.82	31,104,244.78	32,202,072.98
Less : Operating costs		10,700,115.85	8,198,908.98	29,880,483.14	27,252,822.33
Taxes and surcharges		126,002.89	6,442.63	427,066.64	220,730.63
Selling expenses		176,241.15	170,442.50	660,084.71	391,226.57
General and administrative		3,079,800.85	2,848,025.96	9,594,488.77	10,072,084.29
expenses
Research and development		911,168.84	1,559,904.74	2,603,966.70	5,075,089.55
expenses
Financial expenses		-701,875.25	-984,828.77	-1,971,913.51	-2,723,966.70
Including: Interest expenses	753,321.20	263,881.94	2,085,979.41	716,250.01
Interest income		1,475,542.51	1,256,189.09	4,091,441.80	3,468,696.40
Add : Other gains		279,790.00	192,177.00	618,184.45	192,177.00
Investment gains ("-" for loss)			159,317.65	2,287,030.23
Credit impairment losses		-26.54		-24.62
("-" for loss)
Gains on disposal of assets		-695,999.98		-698,496.38
("-" for loss)
2. Operating profit ("-" for loss)		-2,937,823.27	-2,909,985.22	-10,010,950.57	-5,606,706.46
Add : Non-operating income		4,000.00		4,400.00	20,741.81
Less : Non-operating expenses		4,810.00	1,750.23	24,793.16	2,910.23
3. Total profit ("-" for total loss)		-2,938,633.27	-2,911,735.45	-10,031,343.73	-5,588,874.88
Less : Income tax expenses		-6.64		2,836.12	-8,679.70
4. Net profit ("-" for net loss)		-2,938,626.63	-2,911,735.45	-10,034,179.85	-5,580,195.18
(1) Net profit from continuing operation	-2,938,626.63	-2,911,735.45	-10,034,179.85	-5,580,195.18
("-" for net loss)
5. Other comprehensive income after tax,	-	-	-	-
net
6. Total comprehensive income		-2,938,626.63	-2,911,735.45	-10,034,179.85	-5,580,195.18
Legal Representative: Zhang Shi Quan	Chief Financial Officer: Zhang Lan Jun	Head of Finance Section: Li Gen Mei

16

5) Consolidated Statement of Cash Flows

				Unit: RMB
Item		January - September 2019	January - September 2018
1. Cash flows from operating activities:
Cash received from sale of goods or rendering of services	466,180,745.75	474,393,217.05
Return of taxes and levies		5,038,284.32	4,469,089.06
Cash received relating to other operating activities	14,560,371.36	32,220,875.63
Sub-total of cash inflow from operating activities	485,779,401.43	511,083,181.74
Cash paid for goods purchased and services accepted	248,605,552.93	268,152,315.22
Cash paid to and on behalf of employees	109,893,038.82	126,135,682.44
Payment of taxes and levies		21,403,421.22	28,283,733.80
Cash paid relating to other operating activities	91,622,924.51	95,620,269.58
Sub-total of cash outflow from operating activities	471,524,937.48	518,192,001.04
Net cash flows from operating activities		14,254,463.95	-7,108,819.30
2. Cash flows from investing activities:
Cash received from return of investments	130,000,000.00	302,000,000.00
Cash received from investment gains			943,835.61	3,166,758.90
Net cash received from disposal of fixed assets, intangible	5,601,223.37	4,564,544.47
assets and other long-term assets
Cash received relating to other investing activities			629,200.00
Sub-total of cash inflow from investing activities	136,545,058.98	310,360,503.37
Cash paid to acquire fixed assets, intangible assets and	99,238,941.43	113,339,191.96
other long-term assets
Cash paid for investments		100,000,000.00	225,000,000.00
Sub-total of cash outflow from investing activities	199,238,941.43	338,339,191.96
Net cash flows from investing activities		-62,693,882.45	-27,978,688.59
3. Cash flows from financing activities:
Cash received from borrowings		218,700,000.00	224,000,000.00
Sub-total of cash inflow from financing activities	218,700,000.00	224,000,000.00
Cash paid for debt repayments		175,700,000.00	204,000,000.00
Cash paid for distribution of dividends, profit or interest	2,711,688.67	2,461,257.66
expenses
Cash paid relating to other financing activities			273,611.95
Sub-total of cash outflow from financing activities	178,411,688.67	206,734,869.61
Net cash flows from financing activities		40,288,311.33	17,265,130.39
4. Effect of changes in foreign exchange rate on cash and		220,790.61	5,244.77
cash equivalents
5. Net increase in cash and cash equivalents	-7,930,316.56	-17,817,132.73
Add: Opening balance of cash and cash equivalents	120,293,184.97	160,425,712.97
6. Closing balance of cash and cash equivalents	112,362,868.41	142,608,580.24
Legal Representative: Zhang Shi Quan	Chief Financial Officer: Zhang Lan Jun	Head of Finance Section: Li Gen Mei

17

6) Statement of Cash Flows of the Parent

		Unit: RMB
Item	January - September 2019	January -September 2018
1. Cash flows from operating activities:
Cash received from sale of goods or rendering of services	35,919,419.48	36,578,303.26
Return of taxes and levies	539,462.49
Cash received relating to other operating activities	38,199,438.16	9,372,955.69
Sub-total of cash inflow from operating activities	74,658,320.13	45,951,258.95
Cash paid for goods purchased and services accepted	25,225,758.49	29,432,931.99
Cash paid to and on behalf of employees	9,604,572.82	12,309,973.02
Payment of taxes and levies	3,574,247.61	2,067,206.63
Cash paid relating to other operating activities	25,853,173.71	40,926,367.50
Sub-total of cash outflow from operating activities	64,257,752.63	84,736,479.14
Net cash flows from operating activities	10,400,567.50	-38,785,220.19
2. Cash flows from investing activities:
Cash received from return of investments	20,000,000.00	220,000,000.00
Cash received from investment gains	168,876.71	2,424,252.05
Net cash received from disposal of fixed assets, intangible	484,808.16
assets and other long-term assets
Cash received relating to other investing activities	80,000,000.00	80,000,000.00
Sub-total of cash inflow from investing activities	100,653,684.87	302,424,252.05
Cash paid to acquire fixed assets, intangible assets and	56,540,473.74	64,846,566.29
other long-term assets
Cash paid for investments	10,000,000.00	150,000,000.00
Cash paid relating to other investing activities	80,000,000.00	70,000,000.00
Sub-total of cash outflow from investing activities	146,540,473.74	284,846,566.29
Net cash flows from investing activities	-45,886,788.87	17,577,685.76
3. Cash flows from financing activities:
Cash received from borrowings	189,000,000.00	180,000,000.00
Sub-total of cash inflow from financing activities	189,000,000.00	180,000,000.00
Cash paid for debt repayments	146,000,000.00	160,000,000.00
Cash paid for distribution of dividend and profit or	2,040,011.04	693,412.51
payment of interest expenses
Cash paid relating to other financing activities		273,611.95
Sub-total of cash outflow from financing activities	148,040,011.04	160,967,024.46
Net cash flows from financing activities	40,959,988.96	19,032,975.54

4. Effect of changes in foreign exchange rate on cash and cash equivalents

5.	Net increase in cash and cash equivalents	5,473,767.59	-2,174,558.89
	Add: Opening balance of cash and cash equivalents	37,383,008.66	16,695,331.03
6.	Closing balance of cash and cash equivalents	42,856,776.25	14,520,772.14
Legal Representative: Zhang Shi Quan	Chief Financial Officer: Zhang Lan Jun	Head of Finance Section: Li Gen Mei

18

2. AUDIT REPORT

The third quarter report of the Company is not audited.

By order of the Board

Zhejiang Shibao Company Limited

Zhang Shi Quan

Chairman

Hangzhou, Zhejiang, the PRC

25 October 2019

As at the date of this announcement, the board of directors of the Company comprises Mr. Zhang Bao Yi, Mr. Tang Hao Han, Ms. Zhang Lan Jun and Ms. Liu Xiao Ping as executive directors; Mr. Zhang Shi Quan and Mr. Zhang Shi Zhong as non-executive directors; and Mr. Lin Yi, Mr. Guo Kong Hui and Mr. Shum Shing Kei as independent non-executive directors.

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