Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited 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.

SKYWORTH DIGITAL HOLDINGS LIMITED (創 維 數 碼 控 股 有 限 公 司)* (Incorporated in Bermuda with limited liability) (Stock Code: 00751)

OVERSEAS REGULATORY ANNOUNCEMENT 2018 ANNUAL RESULTS OF SKYWORTH DIGITAL CO., LTD.

This announcement is made by the board of directors (the “Board”) of Skyworth Digital Holdings Limited (the “Company”) pursuant to Rules 13.09(2) and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Skyworth Digital Co., Ltd. (“Skyworth Digital”, Shenzhen Stock Code: 000810), an A-share listed company on the Shenzhen Stock Exchange and a non-wholly owned subsidiary of the Company, in which the Company is indirectly interested in approximately 57.21% of its shareholding, has issued an announcement relating to its audited annual results for the twelve months ended 31 December 2018 (the “Announcement”). Set out in the Appendix hereto is an extract of certain information in the Announcement. Skyworth Digital does not distribute cash dividends or bonus shares or convert capital reserve into share capital.

Shareholders of the Company and potential investors should take note that the Announcement and the full version of the annual report of Skyworth Digital in Chinese will be published on the information website of the Shenzhen Stock Exchange (http://www.cninfo.com.cn/).

By order of the Board Skyworth Digital Holdings Limited Lai Weide Chairman of the Board Hong Kong, 25 March 2019

As at the date of this announcement, the Board of the Company comprises Mr. Lai Weide as the Chairman of the Board; Mr. Liu Tangzhi as executive director and the chief executive officer; Ms. Lin Wei Ping, Mr. Shi Chi and Mr. Lin Jin as executive directors; and Mr. Li Weibin, Mr. Cheong Ying Chew, Henry and Mr. Li Ming as independent non-executive directors.

* For identification purpose only

-1- Appendix

Stock Code: 000810 Stock Name: Skyworth Digital Announcement Number: 2019-017

Extract of 2018 Annual Results Announcement of Skyworth Digital Co., Ltd.

I. Important notes

1. This summary derives from the full version of the annual report. In order to understand the operating results, financial situation and future development plans of the Company, investors are advised to read the full version of the annual report carefully via the designated media of the China Securities Regulatory Commission. 2. The Board of Directors and its members, the Board of Supervisors and its members, as well as the senior management of the Company confirm that the information contained in the annual report is authentic, accurate and complete and is free from false representations, misleading statements and material omissions. And they jointly and severally accept legal responsibility therefor. 3. All directors attended the board meeting for reviewing this report. 4. Prompt of non-standard audit opinion □ Applicable √ Not Applicable 5. Proposal on profit distribution for ordinary shares or capitalisation from public reserves as audited by the Board of Directors for the reporting period: □ Applicable √ Not Applicable The Company does not propose to distribute cash dividends or bonus shares or convert capital reserve into share capital. Proposal on profit distribution for preferred stocks as approved of by the Board of Directors by resolution for the reporting period: □ Applicable √ Not Applicable

II. General Information of the Company

1. Company information

Stock Name Skyworth Digital Stock Code 000810 Exchange on which listed Shenzhen Stock Exchange Contact person and details Secretary of the Board Representative of Securities Affairs Name Zhang Zhi Liang Jing 16/F, Block A, Skyworth Building, 16/F, Block A, Skyworth Building, High Tech South 1 Avenue, Science High Tech South 1 Avenue, Science Business address and Technology Park, Nanshan and Technology Park, Nanshan District, Shenzhen District, Shenzhen Fax 0755-26010028 0755-26010028 Telephone number 0755-26010018 0755-26010680 E-mail [email protected] [email protected]

-2- 2. Principal activities or products during the reporting period

(I) Principal activities of the Company during the reporting period The Company is mainly engaged in research, development, production, sales, operation of and services involving digital TV smart box terminals and related software systems and platforms, primarily targeting operators (domestic broadcast operators, the top three telecom operators in China, global/overseas Pay-TV operators, Android TV ecosystems, etc.), as well as retail channel markets for domestic B2C and overseas B2B2C commerce. At the same time, being fully engaged in the development and manufacturing of terminals for intelligent access networks, connected home, the Internet of Things (IoT) and smart automotive electronics, the Company is committed to creating a smart internet plus lifestyle that features both “living room for the home” and “living room for the road”. The Company offers a complete series of products, systems and platforms of digital intelligent terminals, together with related operation and services. Major digital smart network set-top boxes include those with 4K ultra-HD, IPTV+OTT, Internet OTT, IPTV, intelligent interconnection integration, DVB cable HD two-way interaction, digital cable TV, terrestrial digital TV, direct broadcast satellite TV features. The Company also offers mainstream terminals for smart network access, connected home and the IoT, including intelligent gateways, ONUs, EPONs, GPONs, Cable Modems, WiFi routers, CATV optical devices, EOCs, C-Docsis, Smart Home, etc. Enabled by the assimilation of various functions, including, among others, integrated network access, interconnection, the IoT, AI, PVR, 4K, audio, projection, karaoke, smart speech and conferencing, products and systems under the Skyworth smart home ecology are becoming more intelligent, platform-oriented, systematic, ecologic, interactive and diversified. Within the domestic B2B broadcasting market, the Company offers platforms and systems that support business operations in related networks, such as the broadcast network cable TV IP, OTT and DVB+OTT. Among others, there are IP-based video business operation platforms (including operation support, media asset management, intelligent EPGs, OTA upgrading, CDN distribution, multi-screen interaction, APP stores, personal cloud storage, unified content management, unified portal management, smart advertising management, big data analysis, etc.). There are also platforms for operator Wi-Fi value-added services management and e-commerce business channelling. As for overseas markets around the world, with the accelerated transformation towards IP-based broadband networks, the advent of artificial intelligence and the Google-led combination of its Android TV ecosystem with rich HD contents, we have seen the needs for new services arising from many Android-based eco-systems, such as IPTV, DVB+OTT and OTT+ operations. The Company focuses on the research, manufacturing and marketing of new product series within the Android ecosystems, and has established global strategic partnership with Google and Netflix. In the B2C retail market, the Company has been actively engaged in the operations and services of independent OTT cloud platforms, in view of the further deployment of Skyworth’s own 2C brands and the rapid growth in active users. Among others, the Company utilizes its big data platform to effectively support refined operation targeting OTT users, which covers a number of operational services such as VIP users, content, pre-movie ads and pop-up ads, as well as APP distribution, APP stores, education, shopping and entertainment. Not only did Skyworth Digital achieve a breakthrough with its “entry-level smart home” smart ecology series to further diversify applications and service ecosystems for smart homes, it also managed to establish a comprehensive and thorough resource deployment in the smart home eco-chain through an approach that focuses on “access, connection & services”. In view of the trends of intelligent driving, dashboard digitisation and new energy vehicles, the Company also prioritises the research, development, manufacturing and sales of line-fit automotive smart electronic systems, including smart centre console (including navigation) systems, event data recorders, smart rearview mirrors, digital LCD instrument cluster systems, and intelligent driver assistance systems and platforms, so as to create a smart car cockpit. At present, the Company mainly works on line-fit projects for domestic Chinese brands and joint-venture automobile brands at home, such as Changjiang New Energy, Haima New Energy, , , Jianghuai Automobile, Dongfeng Peugeot-Citroën, Automobile, Nanjing , Hanteng Auto and Borgward. In terms of intelligent manufacturing, Skyworth LCD, one of the Company’s subsidiaries, is engaged in the R&D, production and sales of small and medium-sized display modules (including OLED modules), LED strips, POS machines and optical films, as well as mobile phone SMT and complete device manufacturing. Its current brand partners include, among others, Samsung, ZTE, OPPO, BOE, LG, TPV, Wingtech, Transsion, Huaqin, Longcheer, Everdisplay, DJI, Urovo, Landi and Verifone. At the same time, the Company actively expands its business presence in other areas, such as small and medium-sized products other than mobile phones (professional displays, commercial displays, flat panel displays, timepieces), display products (TVs, mobile monitors, electronic signages), as well as non-display products (white appliances, advertising light boxes).

-3- The business processes for the Company’s smart terminal products mainly include demand planning, product development, product definition, raw material procurement, manufacturing, sales and after-sales, operational services, etc. In addition to independently designing smart terminal programmes, software and systems in line with the needs of operators and end customers, the Company also integrates or transplants other related software systems and procures raw materials such as chips. Through a combination of independent production and OEM, the Company adopts the MTO (make-to-order) and JIT (just-in-time) models in its manufacturing. And by means of tendering, bidding or retailing, it sells terminals of digital boxes and smart network access to digital TV operators, distributors and end users.

(II) Development stage and cyclical characteristics of the industry during the reporting period In the smart home ecosystem featuring “hardware + platform + contents + services”, set-top boxes are more than digital TV decoders. Today’s digital smart boxes (DSBs) are integrating more and more functions such as video functions, wireless Wi-Fi routing, intelligent network access, intelligent gateways, 4K, HDR, 3D, PVR, AI, audio and projection. Besides, they are evolving towards network intelligence, business diversity, operational intelligence, and platform-based ecological development. Firstly, smart boxes are beginning to integrate far-field and near-field speech technologies, based on smart homes and interconnection. They are becoming an interactive portal for families, as smart interconnection is now possible on mobile devices and instant messaging APPs such as WeChat. Secondly, as the centre of a system that integrates home gateway functions, smart boxes collate information on daily scenarios at home through cameras and sensors featuring motion capture and posture recognition, as well as smart locks and other home security devices. Accordingly, smart boxes are capable of in-depth scene perception and automatic response, as they gradually become a portal for smart sensing. Thirdly, smart boxes integrate online video and audio contents, providing access to various information, news and audible contents via AI clouds. As they make smart recommendations and presentations of related contents through big data platforms. contents, devices, status, user behaviours and scenarios therefore become connected, integrated, and intelligently presented. Smart boxes are becoming a household ecologic platform for information aggregation. According to statistics from Grand View Research, the demand for digital boxes in the global market will reach 337 million units in 2022, maintaining a steady trend of growth.

Volume in million Demand of the global set-top box market

Source: Grand View Research

-4- Faced with the great challenge from IPTVs and online video websites at home, broadcast network operators in China are exploring the in-depth audience needs in order to enhance their service competitiveness. They are also strengthening IP-based networks and actively deploying 4K services. Besides, they are developing innovative and unique business formats such as DVB+OTT and inbound marketing (e.g., “Sharp Eyes” Project, Skynet Project, public Wi-Fi, smart healthcare, smart government, as well as CPC and Government video conferencing). In August 2018, the National Radio and Television Administration (NRTA) of China promulgated the Application Guidelines for 4K Ultra-HD TV Technology (2018) and the China Central Television (CCTV) officially launched a 4K ultra-HD channel. All those show that the 4K industry is embarking on a fast-growth trajectory. In the 4K industry chain, the development of 4K terminals is ahead of other aspects. For China’s cable TV industry, this means the market will respond with a fast release of demand for 4K ultra-HD set-top boxes. The digital economy is affecting and changing our ways of life and consumption habits, in addition to promoting economic transformation and social progress. As the three major communication operators in China make further progress in the provision of higher-speed services at lower prices, the increased usage of data flows can hardly offset the negative impact from the decline in their values, the decline in average revenue per user (ARPU) among operators has therefore become irreversible. The 5G wave predicts the advent of the “Internet of Everything” (IoE), where people, things and media are all interconnected. The three major communication operators have set out to develop home-based IoT and smart homes, allocating considerable resources to digital home projects. Skyworth Digital has established and maintains strategic partnership with the three major communication operators, jointly exploring new products and services based on user values, market demand, and the integration of scenarios and applications. Related business formats include smart access to optical communication terminals, smart multimedia information centres, and pan-intelligent terminals. Tapping into market opportunities arising from the “+N” strategy of operators, the Company is committed to building smart home ecosystems for operator channels in line with customers’ needs. In view of the development, innovation and transformation of the global digital box industry over the past decade or so, the industry is still in the stage of digitalization and integration, and it is evolving in the process of intelligent and multi-functional iteration. Given countries and sectors around the world are in different stages of development, as well as the varying functional needs for digital boxes among operators and customers, there are no obvious cyclical characteristics in the industry. The automobile industry is moving towards the “four features” (electronic, intelligent, connected and sharing), and the trend becomes more evident. In the future, with 5G communications and the IoT, connected cars will combine 5G hardware technologies, consumption, applications and the Internet. On-board intelligent products are becoming more and more integrated, and the functions of intelligent car cockpit are increasingly diverse. We will see a constantly increasing demand for smart central control systems, digital dashboard systems, driver assistance systems, and on-board entertainment & convenience systems. With the development of autonomous driving and driver assistance, there is an increasing demand for products on driving safety and safety-related assistance. The industry of automotive intelligent electronics will maintain its momentum of growth in the long run. Both the smartphone and the optical display industries have entered a sophisticated stage of development. Due to the increasing penetration rate, the declining driving force of new functions and other factors, both the demand for and the shipment of mobile phones decreased across the world in 2018. According to Counterpoint, a market research firm the global smartphone shipment fell by 4% in 2018. Small and medium-sized modules will be transformed from LCDs to AMOLEDs and flexible OLEDs. In view of this trend, the Company’s LCD subsidiary not only explores new technologies and opportunities and strive to capture a larger market share for its mobile phone modules based on previous technological inputs and accumulation, but is also developing the markets of other areas (e.g. professional displays, commercial displays, flat panel displays) and modules (e.g. TVs, mobile monitors and electronic signages). Thanks to flexible displays, 5G communication and other technologies, the global smart phones will be facing more unprecedented opportunities in future, while the business prospects will be also promising for display modules for products other than mobile phones. (III) Presence of the Company in the industry Founded in 2002, the Company is one of first national high-tech enterprises engaged in the R&D, design, production and sales of digital smart set-top boxes. According to the data of Guideline Research and from other resources, the Company as a whole is far ahead of other domestic players in terms of market share in the domestic broadcast operators segment, sales of OTT smart terminals, sales of 4K cable set-top boxes, IPTV+OTT sales to the top three telecom operators in China, and exports to overseas markets. In terms of R&D, production and marketing, the Company adopts the strategy targeting at the global market. With its set-top boxes being sold across the world, the Company is a leader in the DSB industry in China and one of the largest in the world.

-5- The Company is currently in the stage of steady development in the field of automotive intelligent electronics and has tapped into the sector of line-fit business. The Company has obtained the line-fit supplier primary codes in the line-fit projects from more than ten domestic and joint-venture automobile manufacturers in China. It is also actively making deployment in the market of on-board intelligent display touch systems. The Company continues to increase the number of original equipment plants as well as core projects.

3. Accounting and financial highlights (1) Accounting and financial highlights for the recent three years Whether it is necessary for the Company to retrospectively adjust or restate accounting data in previous years □ Yes √ No Unit: RMB Yuan Increase/decrease 2018 2017 2016 over previous year Operating revenue 7,762,616,543.11 7,253,159,800.45 7.02% 5,927,091,441.29 Net profit attributable to shareholders of the Listed 327,946,324.11 94,335,732.74 247.64% 486,402,025.25 Company Net profit attributable to shareholders of the Listed 288,186,655.01 43,559,327.33 561.60% 433,243,232.41 Company after deduction of non-recurring gains and losses Net cash flows from operating -77,562,911.40 -574,994,737.87 86.51% 441,805,802.87 activities Basic earnings per share 0.32 0.09 255.56% 0.48 (yuan/share) Diluted earnings per share 0.30 0.09 233.33% 0.48 (yuan/share) Weighted average return on net 11.46% 3.55% 7.91% 21.33% assets Increase/decrease End of 2018 End of 2017 over the end of End of 2016 previous year Total assets 8,349,143,939.54 7,576,862,757.56 10.19% 6,581,467,425.18 Net asset attributable to shareholders of the Listed 3,047,702,515.13 2,691,541,199.46 13.23% 2,657,280,234.88 Company

(2) Major financial data by quarter

Unit: RMB Yuan Q1 Q2 Q3 Q4 Operating revenue 1,834,863,803.51 1,713,731,084.95 1,924,895,672.60 2,289,125,982.05 Net profit attributable to shareholders of the Listed 67,453,781.24 94,962,507.47 67,751,507.49 97,778,527.91 Company Net profit attributable to shareholders of the Listed 62,885,000.76 75,431,022.24 60,499,823.32 89,370,808.69 Company after deduction of non-recurring gains and losses Net cash flows from operating -310,386,127.51 -14,250,581.91 -164,705,782.73 411,779,580.75 activities Whether the above financial indicators or their totals are significantly different from related results disclosed in the Company’s quarterly or interim reports □ Yes √ No

-6- 4. Equity and shareholders

(1) Numbers of ordinary shareholders and preferred shareholders with restored voting rights, as well as particulars about shares held by the top ten shareholders

Unit: Shares Total number Total number of Total number of of ordinary ordinary Total number of preferred shareholders shareholders shareholders at the preferred with restored voting as at the end 44,144 end of the month 44,679 shareholders with 0 rights at the end of the 0 of the prior to the date of restored voting month prior to the reporting disclosure of this rights at the end of date of disclosure of period annual report the reporting period this annual report Particulars about shares held by the top ten shareholders Number of Shares pledged or Shareholding shares held frozen Name of shareholder Nature of Number of subject to shareholder Percentage shares trading Status of Quantity moratorium shares Domestic Shenzhen Chuangwei-RGB non-state-owned 54.42% 584,548,508 Pledged 584,548,508 Electronics Co., Ltd. legal person Domestic natural Lin Weijian person 4.04% 43,367,131 Pledged 29,849,999 Domestic natural Shi Chi person 3.42% 36,770,524 27,577,893 Skyworth LCD Technology Overseas legal Limited person 3.36% 36,055,014 36,055,014 Domestic natural Xie Xiongqing person 2.66% 28,528,051 Suining Xing Ye Asset State-owned Management Co., Ltd legal person 2.04% 21,916,008 Domestic natural Li Pu person 1.37% 14,683,310 Guangzhou Office of Huaxia Securities Other 0.88% 9,400,000 Overseas natural Tang Yan persons 0.61% 6,507,500 Domestic natural Zhang Zhi person 0.35% 3,759,348 2,819,511 ① Both Shenzhen Chuangwei-RGB Electronics Co., Ltd. and Skyworth LCD Technology Limited are subsidiaries of Skyworth Digital Holdings Limited and are persons acting in concert as defined in law. ② Lin Weijian was formerly a supervisor of Yingtan Pengsheng Investment Co., Ltd. Lin Weijing was formerly an executive director and the general manager of the said company. And Xie Xiongqing was formerly an executive director and the general manager of the same company. The three persons Notes on affiliation or concerted actions are relatives. Yingtan Pengsheng Investment Co., Ltd., Lin among the said shareholders Weijian, Xie Xiongqing and Lin Weijing are persons acting in concert as defined in law. ③ Shi Chi is a director of the Board and General Manager of the Company. He and his spouse Tang Yan are persons acting in concert as defined in law. ④ Except for the aforementioned, the Company is unaware of any connection among or between other shareholders or whether they are persons acting in concert as defined in the "Management Measures for Acquisition of Listed Companies". As of 28 December 2018, Xie Xiongqing held a total of Particulars about shareholders participating in 28,528,051 shares of the Company, of which 28,528,051 shares margin trading and short selling (if any) were held through an "investor credit securities account". (2) Total number of preferred shareholders and particulars about shares held by the top ten shareholders □ Applicable √ Not Applicable There were no holders of preference shares of the Company during the reporting period. (3) Block diagram about property rights and control relationship between the Company and actual controllers

-7-

Simplified Corporate Structure 简明架构图

As at 31 December 2018

黄宏生 林卫平 Mr. Wong Wang Sang, Stephen Ms. Lin Wei Ping

( Major Shareholder ) ( Major Shareholder )

100 %

Target Success Group (PTC) Limited 0.30 % ( 9,160,382 )shares 1.22% (Incorporated in BVI ) (37,300,000 shares) 38.59% , (1,181,356,799), , shares

Skyworth Digital Holdings Limited 创维数码控股有限公司 * 100% (Hong Kong Listed Company)

(Stock Code: 00751) Skyworth LCD Holdings Limited ( I ncorporated in Bermuda) (Incorporated in BVI)

100 % 83%

Skyworth Holdings Limited Skyworth Display Technology Holdings Limited 创维控股有限公司 (Incorporated in Bermuda ) (Incorporated in Samoa )

100 % 100 % Diamond Ray Holdings Limited 光钻控股有限公司

Skyworth Investment (Holdings) Limited (Incorporated in BVI) 创维投资 ( 控股 )有限公司 (Incorporated in BVI ) 100 %

Skyworth LCD Technology Limited 100 % 创维液晶科技有限公司 (Incorporated in Samoa ) Skyworth TV Holdings Limited

创维电视控股有限公司 51.15% (Incorporated in Hong Kong )

Skyworth Group Company Limited * 创维集团有限公司 (Incorporated in PRC)

27.14 % Skyworth Semi -conductor (Shenzhen) Co., Ltd. * 48.85 % 创维半导体 ( 深圳 ) 有限公司 72.86% (Incorporated in PRC )

100 %

Shenzhen Chuangwei - RGB Electronics Co., Ltd. 深圳创维 - RGB 电子有限公司 (Incorporated in PRC)

54.42.%

Skyworth Digital Co., Ltd.

创维数字股份有限公司 3.36% (Shenzhen Listed Company) (Stock Code: 000810.SZ) (Incorporated in PRC)

-8- 5. Particulars about corporate bonds Whether the Company has any corporate bonds publicly offered on the stock exchange, which were undue before the approval date of this annual report or else which were due but could not be redeemed in full No III. Business discussion and analysis 1. Overview of business operation in the reporting period During the reporting period, the Company made significant progress in product sales, market coverage, market share and operation service revenue, with enhanced competitive edge and scale advantages. During the year, it recorded an operating revenue of RMB7,762,616,500, up by 7.02% year on year. Thanks to the effective optimisation of total factor cost and the ideal implementation of foreign exchange risk management policies, the Company recorded a net profit of RMB316,167,800, with a year-on-year increase of 231.95%. Related business operation of the Company is summarised as follows: (I) Intelligent terminals 1. Domestic market of broadcast network operators (BNOs) During the reporting period, the Company recorded an operating revenue of RMB1.729 billion in the domestic market of broadcast operators, covering 533 customers. The Company seized the strategic opportunities arising from the upgrade demand of BNOs for 4K ultra-HD services and optical network transformation and intelligent broadcasting, enhancing the breadth and depth of broadcast products in the market, such as 4K ultra-HD boxes, ONUs, PONs and gateways. It made efforts to promote the application scenarios of smarts homes, IoT and security projects. It was engaged in governmental and corporate tasks such as Project Dazzling Snow (雪亮工程), as well as smart tourism and smart cities projects. During the reporting period, the Company managed to sell its DSB terminals to 533 BNOs in China. Its intelligent access network terminals, such as Cable Modems, ONUs, CATV optical receivers, PONs, EOCs and smart residential gateways, won a number of broadcast bids in provincial and municipal tenders, including those in Guizhou, Guangdong, Jiangsu, Anhuui, Fujian, Hubei and Liaoning. The Company further expanded its PON products in the new markets of Jilin and Guangxi regions, winning bids and completing development and shipment. Besides, it became a pioneer in fibre-to-the-home for BNOs, development and batch shipment of proprietary GPON+OTT hardware and software products for the provincial broadcast network of Guizhou. In response to the overall increase in material costs in 2018, the Company optimised its product margin through a number of strategies, including the integration of the supply chain and the R&D, mass production, promotion of new products, as well as requirements normalisation. As a result, its gross margin improved year on year. According to the data of Guideline Research, the Company claimed the largest share in domestic digital TV box market for the eleventh consecutive year. 2. Sales to the three major communication operators in China During the reporting period, the Company recorded an operating revenue of RMB2.406 billion from the sales to the three major communication operators. In view of the further promotion of the Internet, the IoT, as well as online and data-based operations and applications, we have witnessed the continuous development of the “Broadband China” strategy. The Company made great efforts to seize the unprecedented opportunities arising from big data, cloud computing, IoT, and AI industrialization. Besides, it leveraged on the opportunities arising from efforts of the three major communication operators to actively make strategic deployments in emerging domains and to develop digital homes and the IoT. Leveraging on its independent R&D and technological advantages over the years, the Company strengthened the design of differentiated products such as smart access devices and local area network (LAN) terminals, while making greater efforts in market deployment. With its intelligent terminal products such as IPTV, IPTV+OTT, OTTs, PONs, access devices, intelligent gateways and intelligent local area network (LAN), it also became the successful bidder in the centralised procurement of parent companies of the three major communication operators and made its presence in related provinces. At the same time, the Company reinforced its capabilities of distribution to customers at provincial, prefectural and county levels. During the reporting period, it sold products to 80 provincial and municipal subsidiaries of the three major communication operators. The Company became a core supplier of intelligent gateways for China Unicom and a qualified supplier of the same products for China Mobile. It also became a strategic partner of China Mobile’s Digital Home Alliance. The market penetration of the Company’s intelligent terminal products reached 100% for China Telecom, 60% for China Mobile and 70% for China Unicom.

-9- 3. Retail market of proprietary Internet OTT smart boxes During the reporting period, Skyworth made further deployment of its own 2C brands. For example, “Xiao Pai” (小湃), one of its affordable luxury brands, has launched a number of innovative high-tech products such as TV set-top boxes, smart projectors and smart speaker boxes, which are highly popular and trusted among consumers. The Company’s offline sales was based on 21 provincial representatives and 31 regional ones as well as 365 second-tier distributors, with related channels extending to third- and fourth-tier cities in China and even some towns and villages. The Company remained the top player in the industry in terms of offline sale of OTT intelligent terminals. Products are also marketed through the Company’s own and its distributors’ online stores, as well as on e-commerce platforms such as JD and Tmall. Among others, the Company’s products were the second-best seller within the industry on JD. Skyworth’s proprietary brands ranked among the top three in the industry in terms of the overall retail volume of Internet OTT intelligent terminals. 4. Overseas markets Despite the unstable global political environment and challenging trade tension in 2018, there were still abundant opportunities arising from the continued advancement of digitisation projects by overseas governments, the upgrade of digital boxes, and the advent of the broadband information era. During the reporting period, the Company strengthened its existing business domains and explored new ones, successfully selling Pay-TV, Android TV, OTT smart boxes and PON broadband networks. The operating revenue in overseas markets stood at RMB2.296 billion. The Company attaches great importance to the prospecting of key strategic customers, as well as the integration and cooperation within industry alliances. During the reporting period, the Company became a global strategic partner of Google and Netflix, and transformed itself into the No.1 brand of AndroidTV, and forged the most powerful alliance within the industry, while establishing and maintaining extensive cooperation with chip manufacturers and CA companies. The Company’s performance in overseas markets during the reporting period is detailed as follows: (1) It maintained its leading position and further increased its shares in markets where it has always had dominance, such as Asia, Africa and Latino America. It became the exclusive supplier of Multichoice, a top operator in Africa; (2) In Europe, Strong Group, a subsidiary of the Company, was operating based on the B2B2C model, and the subsidiaries in France, Germany, Austria, Italy, Denmark, Ukraine, Croatia, the Czech Republic and Sweden recorded sales revenues. At the same time, Strong Group made a breakthrough in the B2B business, winning the bid for the AndroidTV project carried out by MTS, a first-class operator in Europe. It was shortlisted by the tier-one telecommunication operators in the continent; (3) The international elite team of the British Caldero Limited has gradually transformed into a high-end team, offering professional services of pre-sales and project delivery to first-class operators around the world. Through synergy with the Headquarters, it won new bids for projects of tier-one carriers in India and Mexico; (4) The branches and subsidiaries of the Company continued to operate well in Mexico, India, South Africa and Malaysia. They became important outlets for the Company’s local production, supply, delivery and after-sales services overseas, further enhancing the Company’s global deployment and customer services. (II) Automotive intelligent electronics (AIE) During the reporting period, the passenger vehicle market in China experienced a downward trend. However, the Company managed to weather through the difficulties for its AIE business and obtained the line-fit supplier codes from eight vehicle manufacturers, including Chery, Haima New Energy, Brilliance, Jiangling New Energy, Hanteng Auto, Borgward, BAIC Yinxiang and , thus becoming a partner of mainstream players in the automobile industry. Besides, the Company successfully sold its core products, including digital LCD dashboards, central control navigation, streaming rearview mirrors and dash cameras, to around two dozen line-fit projects. It recorded an operating revenue of RMB182 million, with a year-on-year increase of 102.66%. Recently, the Company became a supplier for China Mobile’s centralised procurement and a partner of China Mobile Intelligent Mobility Network, with the first shipment completed successfully, which laid the foundation for the subsequent growth of the Company. (III) Intelligent manufacturing During the reporting period, the Company’s LCD subsidiary recorded an operating revenue of RMB847 million from the intelligent manufacturing of optoelectronic display devices, down 16.98% year-on-year, as the demand for and the shipment of mobile phones decreased year on year across the world due to the increasing penetration rate, the declining driving force of new functions and other factors. The Company witnessed steady development in the domains of small and medium-sized LCD modules, OLED modules and POS machines. It also actively expanded its business presence in other areas, such as small and medium-sized products (professional displays, commercial displays, flat panel displays, timepieces), LB/LCM displays (TVs, mobile monitors, electronic signages), as well as non-display ones (white goods, advertising light boxes, LED indicators, LB non-displays). In 2018, the Company officially commenced its cooperation with Wingtech Communications, a leading mobile phone solution provider in the world, in ODM and complete machine projects. It also won strategic customers such as Transsion, Huaqin and Longcheer. The Company also commenced cooperation with Guangzhou CVTE Co., Ltd., the solution company with the largest market share of LCD driver boards in the world. Besides, the Company collaborated with Everdisplay in an OLED OEM project, successfully promoting the manufacturing process and mass production technologies, which laid the foundation for its future presence in OLED module production. The Company gradually started mass production of its medium and small-sized -10- products other than mobile phones. It became a main supplier of POS machines for the clients of Urovo, Landi and Verifone. CSP models developed independently by the Company became certified for LG clients and became eligible for supply to TPV for exports. Mass production was achieved for overseas models. (IV) Value-added services and operations During the reporting period, the Company recorded a steady growth in its user value-added services and various operation sectors: (1) Platforms of value-added services for Internet OTT users. The Company provided value-added services to OTT users based on its proprietary OTT omnimedia operation back office and management system, its member account system and its supporting box terminal software. During the year, it developed plans for 1,300 content features and special MiniLauncher initiatives, thus enriching the forms of operation and increasing the number and the efficiency of its operation significantly. In December 2018, the number of omnimedia monthly active payment accounts increased by more than ten times over the same period last year. As of the end of reporting period, the cumulative number of registered users increased by 18 times compared with the end of last year. During the reporting period, the Company recorded a substantial growth year on year n incomes from VIP membership, pre-movie advertising, pre-TV advertising, APP distribution and online stores; (2) Platform of Internet + Wi-Fi value-added services. The Company focused on promoting operators’ smart medical services, hotel digital rooms, public Wi-Fi and other inbound operations. During the reporting period, the Company independently built and operated Wi-Fi networks for 100 hospitals, with nearly 10,000 Wi-FiAPs involved. In Hebei, Chongqing and Inner Mongolia, the Company acquired public Wi-Fi networks established by third parties, together with about 5,000 third-party APs. It also recorded a steady growth in services for official accounts on social media, including promotion, data traffic diversion, independent operation, entrusted operation and portal advertising. During the reporting period, the scenarios of traffic flow operation became more diverse and the capability of traffic monetizing further stabilised. Overall, the Company has realised a closed loop of Wi-Fi traffic acquisition, traffic channelling and traffic monetizing. (3) Platforms of housekeeper O2O on-site services: ① News of success kept pouring in for the operation business. The Company’s cooperation with China Mobile in “CMCC Fix” was going on smoothly. The Company was also awarded bids for a series of services for China Mobile Terminal Company, covering the areas of parts supply, smart lock installation and services, on-board product installation, on-site installation and maintenance of colour TVs, etc.; ② The B2B2C business was still in the ascendant. The Company undertook on-site services for UBTECH’s robots. It also made efforts to enhance its influence in the industry as an all-round “service housekeeper” for intelligent products; and ③ The overseas service network was further optimised. The service subsidiaries in South Africa, India and Malaysia continued to make profits. 2. Any significant changes in principal activities in the reporting period □ Yes √ No 3. Products accounting for over 10% of the turnover or profit of the Company’s principal activities √ Applicable □ Not Applicable Unit: Yuan Year-on-year Year-on-year Year-on-year Gross Core business Core business increase/decrease increase/decrease increase/decrease Product name profit incomes costs of main operating of main operating of gross profit rate revenue cost rate Digital intelligent 5,751,581,433.09 4,750,463,092.04 17.41% 5.16% 0.63% 3.72% box terminals Network access 463,109,802.62 414,088,633.31 10.59% 162.24% 197.15% -10.50% equipment Operational and technical 187,624,677.83 99,917,391.94 46.75% 79.17% 95.57% -4.46% services Automotive 182,447,587.13 158,940,710.39 12.88% 102.66% 93.09% 4.32% electronics Skyworth 847,062,013.08 735,910,788.78 13.12% -16.98% -13.71% -3.30% LCD business Smart and all-in-one 190,670,570.14 183,938,366.64 3.53% -23.99% -20.45% -4.30% TVs Other intelligent 91,761,908.64 84,636,563.01 7.77% -9.75% 6.80% -14.29% products

-11- 4. Any seasonal or cyclical characteristics in operation requiring special attention □ Yes √ No 5. Reasons for significant changes in the sum or the composition of operating revenue, operating cost, or net profit attributable to ordinary shareholders of the Listed Company in the reporting period as compared with the previous year √ Applicable □ Not Applicable During the reporting period, the total net profit attributable to shareholders of listed ordinary shares increased by RMB234 million from the previous period, with an increase of 247.64%, mainly due to the following reasons: (1) There was an increase in the Company’s market scale and in the main operating revenue, thanks to improved market shares and coverage in the sales to the three major communication operators and BNOs in China, as well as new products such as broadband access and intelligent gateways; and (2) The gross margin increased as a result of in-depth integration, requirements normalisation and new product promotion based on industry alliances, strategic cooperation, internal supply chain and R&D. In addition, during the reporting period, the Company took a proactive and timely approach to monitoring the changes in international foreign exchange rates. With the related risk warning system and measures, it managed to reduce the adverse impact of exchange rate fluctuations. 6. Suspension or termination of listing □ Applicable √ Not Applicable 7. Matters relating to financial reporting (1) Explanations on changes in accounting policies, accounting estimates and measurement methods as compared with the last annual report √ Applicable □ Not Applicable With effect from 1 January 2018, the Company adopted the “Accounting Standards for Business Enterprises No.14 - Revenue”, “Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments”, “Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets”, “Accounting Standards for Business Enterprises No. 24 - Hedging” and “Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments” (the four sets of standards are collectively referred to as the “New Standards for Financial Instruments”), which were revised by the Ministry of Finance of China in 2017. See Note 4 in Section 11 for the details of the revised accounting policies. (1) Impact of the new revenue standards on the Company According to the new revenue standards, the Company may adopt the new standards through a cumulative effect adjustment to unallocated profits and other related items in the financial statements as of the start of initial application (1 January 2018), without adjusting information for comparative periods. When adopting the new revenue standards, the Company only analyses the necessity of adjusting the cumulative effect for contracts open as at the date of initial application. It does not make retrospective adjustments to contract modifications made prior to the beginning of the earliest comparative period or the beginning of 2018. Instead, it identifies satisfied and unsatisfied performance obligations based on the final arrangements for contract modifications. And then it determines the transaction price as well as the shares of the transaction price allocated between satisfied and unsatisfied performance obligations. The impact of the application of the new revenue standards on related items in the balance sheet at the beginning of the current period is shown as follows: Unit: Yuan Cumulative effect Item 31 December 2017 1 January 2018 Reclassification Remeasurement Subtotal Long-term 140,583,926.41 -85,605,597.84 --- -85,605,597.84 54,978,328.57 prepaid expenses Other non-current 27,255,194.83 85,605,597.84 --- 85,605,597.84 112,860,792.67 assets Advances 92,919,384.35 -92,001,421.38 --- -92,001,421.38 917,962.97 receivables Contractual --- 69,988,052.01 --- 69,988,052.01 69,988,052.01 liabilities Other non-current --- 22,013,369.37 --- 22,013,369.37 22,013,369.37 liabilities

-12- On 1 January 2018, the costs incurred by the Company in performing lease contracts for set-top boxes were regarded as the costs of contractual performance and were separately recognised as an asset in accordance with relevant provisions of the new revenue standards. The terms of the lease contracts between the Company and its customers were relatively long, and the amortization periods exceeded one year or one normal business cycle at the time of initial recognition. Therefore, the said costs were reclassified as other non-current assets instead of long-term deferred expenses. At the same time, the recognised costs of contractual performance were amortised on the same basis as that for the recognition of revenue from commodities related to the said assets, and were accounted into current profits and losses. On the date of change, the amount of RMB85,605,597.84, which had been accounted into the long-term deferred expenses, was recognised as other non-current assets. On 1 January 2018, the Company was under performance obligation to transfer goods or provide services to customers due to its receipt of the considerations paid by customers in advance. According to relevant provisions of the new revenue standards, the advances receivables were re-classified as contractual liabilities. Amounts expected to be carried forward beyond one year were presented as other non-current liabilities. On the date of change, the amount of RMB92,001,421.38, which had been included in advances receivables, was adjusted based on liquidity, with RMB69,988,052.01 being recognised as contractual liabilities and RMB22,013,369.37 as other non-current liabilities. (2) Impact of the new standards for financial instruments on the Company Where the recognition and measurement of financial instruments before 1 January 2018 were inconsistent with the new standards, the Company made transitional adjustments in accordance with the new standards. However, the Company did not adjust the information for comparative periods before the said date even if the financial statements were inconsistent with the new standards. Where the original book value of financial instruments was different from the new book value on the implementation date of the new standards, the difference was included in unallocated profits or other comprehensive incomes as at 1 January 2018. The impact of the application of the new standards on related items in the balance sheet at the beginning of the current period is shown as follows: Unit: Yuan Cumulative effect 31 December 1 January Item 2017 Effect of Effect of 2018 classification depreciation of Subtotal and measurement financial assets Bills receivable and accounts 3,722,266,264.35 --- -30,276,163.86 -30,276,163.86 3,691,990,100.49 receivable Other receivables 167,981,979.81 --- -186,576.09 -186,576.09 167,795,403.72 Financial assets 14,500,000.00 -14,500,000.00 --- -14,500,000.00 --- available for sale Other non-current --- 12,025,000.00 --- 12,025,000.00 12,025,000.00 financial assets Deferred income 57,168,140.87 --- 4,277,728.89 4,277,728.89 61,445,869.76 tax assets Deferred income 3,325.21 303,750.00 --- 303,750.00 307,075.21 tax liabilities Surplus reserves 51,856,189.93 --- -2,424,046.37 -2,424,046.37 49,432,143.56 Unallocated 1,351,234,570.52 1,721,250.00 -23,563,009.63 -21,841,759.63 1,329,392,810.89 profits Minority interests 69,899,318.42 --- -197,955.06 -197,955.06 69,701,363.36 On 1 January 2018, the Company re-measured the effect of impairment of financial assets in accordance with relevant provisions of the new standards for financial instruments, based model of expected credit losses of bills receivable, accounts receivable and other receivables. Among others, the effect of impairment was reconsidered and remeasured, for customers which had not conducted transactions with the Company for more than a year and whose expected credit risks were substantiated to be high, as well as for customers which took out insurance beyond the contractual repayment ratio. Among others, an additional provision of RMB30,276,163.86 were made for credit impairment losses regarding bills and accounts receivable, and RMB186,576.09 regarding other receivables. At the same time, due to the additional provision for credit impairment losses based on retroactive adjustments at the beginning of the period, the deferred income tax assets were increased by RMB4,277,728.89, and the surplus reserve was reduced by RMB2,424,046.37. Besides, the undistributed profit and the shareholders’ equity were offset by RMB23,563,009.63 and RMB197,955.06, respectively.

-13- On 1 January 2018, the Company reclassified its equity instrument investment with an original carrying value of RMB10,000,000.00, which had been classified as available-for-sale financial assets in previous years, as financial asset at fair value through profit or loss. As the management expected to hold the investment for more than a year, the said investment was presented as one of other non-current financial assets, and re-measured based on its fair value on the date of change. As a result, other non-current financial assets were recognised as RMB12,025,000.00. Due to the retrospective adjustment of the fair value of financial instruments at the beginning of the period, the deferred income tax liabilities were increased by RMB303,750.00 and the undistributed profits were increased by RMB1,721,250.00. (3) Overall impact on the Company resulting from the changes in presentation format as well as the implementation of the new standards for revenue and for financial instruments Unit: Yuan Effect of the new 31 December Effect of presentation Amount after Accounting 1 January Item 2017 format changes and presentation format Standards for 2018 other adjustments changes Business Enterprises Bills receivable 368,928,499.41 -368,928,499.41 ------Accounts receivable 3,353,337,764.94 -3,353,337,764.94 ------Bills receivable and --- 3,722,266,264.35 3,722,266,264.35 -30,276,163.86 3,691,990,100.49 accounts receivable Interests receivable 751,510.09 -751,510.09 ------Other receivables 167,230,469.72 751,510.09 167,981,979.81 -186,576.09 167,795,403.72 Financial assets available 14,500,000.00 -4,500,000.00 10,000,000.00 -10,000,000.00 --- for sale Long-term equity 5,085,194.50 4,500,000.00 9,585,194.50 --- 9,585,194.50 investments Other non-current ------12,025,000.00 12,025,000.00 financial assets Long-term prepaid 140,583,926.41 --- 140,583,926.41 -85,605,597.84 54,978,328.57 expenses Deferred income tax 57,168,140.87 --- 57,168,140.87 4,277,728.89 61,445,869.76 assets Other non-current assets 27,255,194.83 --- 27,255,194.83 85,605,597.84 112,860,792.67 Total assets 7,576,862,757.56 --- 7,576,862,757.56 -24,160,011.06 7,552,702,746.50 Financial liabilities at fair value through profit 2,319,376.58 -2,319,376.58 ------or loss Tradable financial --- 2,319,376.58 2,319,376.58 --- 2,319,376.58 liabilities Bills payable 1,144,082,973.68 -1,144,082,973.68 ------Accounts payable 1,660,224,211.22 -1,660,224,211.22 ------Bills payable and accounts --- 2,804,307,184.90 2,804,307,184.90 --- 2,804,307,184.90 payable Advances receivables 92,919,384.35 --- 92,919,384.35 -92,001,421.38 917,962.97 Contractual liabilities ------69,988,052.01 69,988,052.01 Interests payable 1,356,215.89 -1,356,215.89 ------Other accounts payable 648,308,947.12 1,356,215.89 649,665,163.01 --- 649,665,163.01 Other current liabilities --- 40,781,262.45 40,781,262.45 --- 40,781,262.45 Estimated liabilities 57,883,168.68 -40,781,262.45 17,101,906.23 --- 17,101,906.23 Deferred income tax 3,325.21 --- 3,325.21 303,750.00 307,075.21 liabilities Other non-current ------22,013,369.37 22,013,369.37 liabilities Total liabilities 4,815,422,239.68 --- 4,815,422,239.68 303,750.00 4,815,725,989.68 Surplus reserves 51,856,189.93 --- 51,856,189.93 -2,424,046.37 49,432,143.56 Unallocated profits 1,351,234,570.52 --- 1,351,234,570.52 -21,841,759.63 1,329,392,810.89 Minority interests 69,899,318.42 --- 69,899,318.42 -197,955.06 69,701,363.36 Total owner’s equity 2,761,440,517.88 --- 2,761,440,517.88 -24,463,761.06 2,736,976,756.82

-14- Note: The above table only presents affected items in financial statements, not the unaffected ones. Therefore, the disclosed subtotals and totals cannot be recalculated based on the figures presented in the table above. For the equity investment with a book value of RMB4,500,000.00, which had been classified as available-for-sale financial assets in the previous years, there was no control, joint control or significant influence previously. However, due to the changes in its operating strategies, the Company deployed staff to the invested entity to take part in the decision-making. As a result, the Company was capable of exercising significant influence on the invested entity. Therefore, the said investment was presented as a long-term equity investment and accounted with the equity method beginning from 1 January 2018. Accordingly, it was included in the current profits and losses for 2018 based on relevant provisions in the Accounting Standards for Business Enterprises. (2) Explanations on retrospective restatement due to major accounting errors during the reporting period. □ Applicable √ Not Applicable There was no retrospective restatement by the Company due to major accounting errors during the reporting period.

(3) Explanations on changes in the scope of consolidation as compared with the last annual report √ Applicable □ Not Applicable 1. Guangzhou Skyworth Automobile Smart Co., Ltd. (广州创维汽车智能有限公司) was newly established on 16 May 2018 and was included in the scope of consolidation; 2. IDIGITAL ELECTRONICS SDN.BHD was newly established on 22 May 2018 and was included in the scope of consolidation; 3. Beijing Skyworth Automobile Smart Co., Ltd. (北京创维汽车智能有限公司) was newly established on 12 December 2018 and was included in the scope of consolidation; 4. Suining Skyworth Optoelectronics Technology Co., Ltd. (遂宁创维光电科技有限公司) was newly established on 3 December 2018 and was included in the scope of consolidation; 5. The (Zhu) Korean Research Institute of Skyworth Automobile Smart ((株)创维智能汽车韩国研究院) was newly established on 27 August 2018 and was included in the scope of consolidation; and 6. Beijing Skyworth Hightong Digital Technology Co., Ltd., a subsidiary of the Company, had held 51% of the equity in Guizhou Panyun Digital Network Technology Co., Ltd. In 2018, the subsidiary was deregistered and liquidated due to the adjustment of the Company’s business strategy.

______Note: If there is any inconsistency between the English and Chinese versions of this Appendix, the Chinese version shall prevail

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