Chongqing Jianshe Vehicle System Co., Ltd. Summary of the Annual Report 2017

Stock code: 200054 Stock Abbreviation: Jianmo B Announcement No.: 2018-007

Chongqing Jianshe Vehicle System Co., Ltd.

Summary of the Annual Report 2017

1。 Important notes The summary is abstract from full-text of summary of the semi-annual report, for more details information , investors should found in the full-text of annual report that published on website of Shenzhen Stock Exchange and other website appointed by CSRC. Objection statement of directors, supervisors and senior executives Name Position Content and reason Statement Other directors attending the Meeting for annual report deliberation except for the followed: The name of director who did The name of director who was Positions Reason not attend the meeting in person authorized Wang Jun Independent director Business trip Li Dingqing Non-standard auditor’s opinion □ Applicable √ Not applicable Plans for profit distribution on ordinary shares or conversion of capital reserves into share capital proposed to the Board during the reporting period. □ Applicable √ Not applicable The Company will not distribute ash dividend or bonus shares, neither capitalizing of common reserves for the report period. Plans for profit distribution on preference shares for the reporting period approved by the Board □ Applicable √ Not applicable II. Basic information about the company 1. Company profile Stock ID Jianshe Vehicle B Stock Code 200054 Stock Exchange Listed in Shenzhen Stock Exchange Abbreviations for stocks before Jianmo B change( If any) Contact person and contact manner Board secretary Securities affairs Representative Name Lu Hongxian Liu Hongyu No.1 Jianshe Road, Huaxi Industrial Zone, No.1 Jianshe Road, Huaxi Industrial Zone, Office address Ba’nan District , Chongqing Ba’nan District , Chongqing Fax 023-66295333 023-66295333 Tel 023-66295333 023-66295333 E-mail [email protected] [email protected]

1 Chongqing Jianshe Vehicle System Co., Ltd. Summary of the Annual Report 2017

2. Brief introduction to the main business or products in the reporting period

The company engages mainly in production and sales of the vehicle air compressor including the vane iron and aluminous compressor, piston swash-plate fixed discharge rate compressor, piston swash-plate variable discharge rate compressor and motor compressor (with the discharge rate from 32cc to 480cc), has been awarded “ Famous Brand”, “High-quality Product of French Technological Quality Surveillance Evaluation Commission” and “China Recommended Product for Entry into WTO”, etc. for products and has the strategical cooperative partners including the leading production and sales volume in terms of finished automobile such as Chanan Auto, PEUGEOT, , and Great Wall Automobile, etc.

3.Major accounting data and financial indicators （1）Major accounting data and financial indicators for the last three years Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data. □ Yes √ No In RMB Changed over last year 2017 2016 2015 （％） Operating Gross income（Yuan） 1,009,531,078.68 873,286,486.75 15.60% 1,341,331,910.93 Net profit attributable to the shareholders of the listed company 14,375,111.84 12,267,006.14 17.19% 240,735,112.20 （Yuan） Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed 13,866,734.69 12,908,428.98 -4.40% -255,602,553.80 company（Yuan） Cash flow generated by business 62,980,107.16 108,619,119.02 -42.02% 82,306,010.61 operation, net（Yuan） Basic earning per 0.120 0.103 16.50% 2.017 share(Yuan/Share) Diluted gains per 0.120 0.103 16.50% 2.017 share(Yuan/Share)(Yuan/Share) Net asset earning ratio（%） 5.22% 4.68% 0.54% 175.35% End of Changed over last year End of 2017 End of 2015 2016 （％） Gross assets（Yuan） 1,302,238,427.15 1,559,334,881.03 -16.49% 1,550,615,831.44 Net assets attributable to shareholders of the listed company 282,758,203.49 268,383,091.65 5.36% 256,116,085.51 （Yuan）

（2）Main Financial Index by Quarters

In RMB

First quarter Second quarter Third quarter Fourth quarter Operating income 304,027,257.44 246,047,000.40 213,507,572.24 245,949,248.60 Net profit attributable to the 9,821,043.23 1,597,276.13 3,184,880.64 -228,088.16 shareholders of the listed company Net profit after deducting of non-recurring gain/loss attributable 9,038,679.96 2,103,249.75 2,624,001.74 247,571.72 to the shareholders of listed company Net Cash flow generated by 42,677,534.79 20,457,560.12 19,834,730.29 -19,989,718.04 business operation Whether significant variances exist between the above financial index or the index with its sum and the financial index of the quarterly report as well as semi-annual report index disclosed by the Company.

2 Chongqing Jianshe Vehicle System Co., Ltd. Summary of the Annual Report 2017

□ Yes √No 4.Share capital and shareholders （1）Number of holders of ordinary shares and preference shares with restored voting right and Top 10 shareholders In shares

Total number Total Total The total number of common shareholders at preferred sharehold of preferred shar shareholders at the end of the ers at the end of the 8,270 8,173 eholders voting ri 0 0 the end of the month from the month from the date ghts restored at p reporting date of disclosing of disclosing the eriod-end period the annual report annual report Shareholdings of Top 10 shareholders Number of Number or share Shareholders Nature of Proportion of shares held pledged/frozen （ ） Amount of restricted shares held shareholder shares held % at period -end State of share Amount Chongqing Jianshe State-owned Mechanical and 71.13% 84,906,250 84,906,250 Freeze 6,900,000 legal person Electric Co., Ltd. Domestic Gu Zuocheng natural 1.89% 2,261,000 2,218,750 person Anhui Domestic Hengsheng non-state-ow Economic 1.47% 1,750,000 1,750,000 ned legal Development person Group Co., Ltd. Domestic Liu Dan natural 0.86% 1,032,201 0 person Domestic Yu Lingfeng natural 0.52% 623,621 0 person Domestic Chen Xinqiang natural 0.51% 612,400 0 person Domestic Xu Yuanhui natural 0.51% 610,789 0 person Domestic Zhang Meilan natural 0.43% 513,560 0 person Domestic Feng Yonghui natural 0.42% 500,000 500,000 person CORE PACIFIC-YAM AICHI Overseas 0.36% 424,550 0 INTERNATION legal person AL (H.K.) LIMITED There isn’t any associated relationship between the sponsoring shareholder and the other Explanation on associated shareholders among the top-10 list. None of them are regarded as ‘Acting in concert’ in accordance relationship among the with ‘The rules of information disclosure on change of shareholding.’ Foreign shareholders are aforesaid shareholders unknown for their condition of ‘Associated relationship’ and ‘Acting in concert’. (2)Total preference shareholders and the shares held by the Top 10 Preference shareholders □ Applicable √ Not applicable

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Nil (3)Block diagram of the ownership and control relations between the Company and the actual controller

国务院国有资产监督管理委员会

100%

中国兵器装备集团有限公司

100%

重庆建设机电有限责任公司

71.13%

重庆建设摩托车股份有限公司

5. Corporation bonds

Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due butnot folly cashed on the approval date of annual report No III. Discussion and Analysis of the Management 1. Business Operation summary in the reporting period Whether the company needs to comply with the disclosure requirements of the particular industry No For the year, the company planned the sales volume of the vehicle air compressors 2.3 million with the sales revenue of 880 million yuan. It completed the actual sales volume 2.316 million accounting for 101% of that planned at the beginning of the year and realized the actual operation revenue 909 million yuan accounting for 103% of that planned at the beginning of the year. 1. Industrial structure adjustment. In the current year, the company transfers shares of Shanghai Construction and exits from the motorbike industry; purchases the automobile part processing equipment and integrates the automobile air condition compressor supporting processing business; establishes Han’ang Joint Venture and fills up the product and technology vacancy thereof. 2. Market structure optimization. Firstly, the company strengthens management and development of large clients. The company has cultivated 11 large clients including the top three automobile proprietary brands in China (Chana, Auto and Great Wall Automobile), which accounts for 91.2% of the sales volume. Secondly, the company has been focusing on the international market development. The international market key points include PSA market development strengthening, Iranian market recovery, the market deep development in Malaysia and South America and the new market development in India for the purpose of its rapid development. The sales amount in 2017 hit 582,500 with 293% increase compared with that in the last year. Thirdly, the company develops the new energy market positively. It entered into Levdeo low-speed electrocar project smoothly, won Chana A002EV project, realized the bulk supply for the pure electric logistic vehicle of Taichang (Dongfeng Special Vehicle) and Jiangxi Xindian (Foton) and finished the power-driven products design for passenger cars basically.

4 Chongqing Jianshe Vehicle System Co., Ltd. Summary of the Annual Report 2017

3. Strengthening R&D capacity. Firstly, it finished the testing capacity construction project wholly, put semi-anechoic room for finished automobile into usage and obtained the low-temperature capacity approval by CNAS. Secondly, it improved the client project development capacity and fundamental research level further, applied P4 technology for compressors wholly, finished the whole work in the finished product design state for the self-development 140 irony machine and achieved obvious progress in the aluminous machine blade electroplating. Thirdly, it intensified the technological management, applied for 19 patents for the whole year including 3 invention ones, 10 utility model ones and 6 appearance design ones. 4. Advancing brand building: the company won French PAS “Best Cooperation Award” and “Best Quality Award” among more than 500 suppliers for Great Wall Automobile, whose brand effect improved significantly and the awareness in the industry improved further. 5. Improving manufacturing capacity: firstly, it finished the capacity expansion and technology improvement work wholly, improved the automation level, online surveillance capacity and automatic error prevention capacity further and increased the manufacturing volume from 1,500,000 to 2,300,000 after the capacity expansion through the full manufacturing capacity. Secondly, it optimized the quality management system continuously, passed Dongfeng Peugeot Citroen QSB+approval examination smoothly and improved the new project acquisition capacity further.

2. Material change in principal activities during the reporting period □ Yes √No 3. Products accounting for over 10% of revenue or profit from principal activities of the Company √ Applicable □Not applicable In RMB

Increase Increase Increase /decrease Gross profit /decrease of /decrease of Name Operating income Operating cost of Gross profit ratio% operating income operating cost ratio（％） （％） （％）

Vehicle air 981,936,878.97 166,859,961.89 16.99% 16.15% 10.98% -0.79% conditioner

4. Seasonal or cyclical operations requiring special attention □ Yes √No 5. Material difference of revenue, operating costs or net profit attributable to holders of ordinary shares of the Company for the reporting period from the last reporting period √ Applicable □Not applicable In the year, the company realized the sales volume of the vehicle air compressor increase by 7.38% on the year-on-year basis and the total operation revenue increase of 15.6% for the whole year (including the export sales revenue increase by 260% on the year-on-year basis). Because of the bulky material price and labor cost rise, the main business cost increased by 17.26% on the year-on-year basis in the current period and the product gross profit rate decreased by 7.68% on the year-on-year basis.

6. Suspension in trading or delisting □ Applicable √ Not applicable 7. Events relating to the financial report (1) Reason for changes in accounting policies, accounting estimates and accounting methods as compared to the financial report for the prior year √ Applicable □Not applicable 1. Changes in accounting policies ① Changes in accounting policies due to the adoption of new accounting standards

5 Chongqing Jianshe Vehicle System Co., Ltd. Summary of the Annual Report 2017

a. On April 28, 2017, the Ministry of Finance issued the Accounting Standards for Business Enterprises No. 42—Non-Current Assets and Disposal Groups Held for Sale and Termination of Business Operation (No. 13 [2017] of the Ministry of Finance), which was effective on and from May 28, 2017. The held-for-sale noncurrent assets, disposal groups and discontinued operations on the effective date shall be recognized prospectively. b. On May 10, 2017, the Ministry of Finance issued the Accounting Standards for Business Enterprises No. 16 - Government Subsidies (revised in 2017) (No. 15 [2017] of the Ministry of Finance), which was effective on and from June 12, 2017. The government subsidies existing on January 1, 2017 shall be recognized prospectively, and those increased from January 1, 2017 to the effective date shall be adjusted in accordance with these standards. According to the provisions of No. 15 [2017] of the Ministry of Finance, the Company will present the revised financial statements and adjust the financial interest subsidy from non-operating income to financial expense-interest expenditure. The change has no significant impact on financial conditions, operating results and cash flows. c. On December 25, 2017, the Ministry of Finance issued the Notice on Revising and Issuing the Format of Financial Statements of General Enterprises (No. 30 [2017] of the Ministry of Finance), which is applicable to the preparation of financial statements for 2017 and subsequent periods. 2. Changes in accounting estimates The Company does not have significant changes in accounting estimates this year.

(2) Reason for retrospective restatement to correct major accounting errors during the reporting period □ Applicable √ Not applicable Nil (3) Reason for changes in scope of the consolidated financial statements as compared to the financial report for the prior year □ Applicable √ Not applicable Nil

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