2020 Interim Results of Skyworth Digital Co., Ltd

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SKYWORTH GROUP LIMITED 創維集團有限公司 (Incorporated in Bermuda with limited liability) (Stock Code: 00751)

OVERSEAS REGULATORY ANNOUNCEMENT 2020 INTERIM RESULTS OF SKYWORTH DIGITAL CO., LTD.

This announcement is made by the board of directors (the “Board”) of Skyworth Group 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, has announced its unaudited interim results for the six months ended 30 June 2020 (the “Announcement”). Set out in the Appendix hereto is an extract of the Announcement.

Shareholders of the Company and potential investors should take note that the financial information of the interim results of Skyworth Digital in the Announcement has not been audited and the full version of the 2020 interim report of Skyworth Digital in Chinese has been published on the information website of the Shenzhen Stock Exchange (http://www.cninfo.com.cn).

The profit figures set out in this announcement (the “Profit Figures”) constitute a profit forecast under Rule 10 of The Code on Takeovers and Mergers (the “Takeovers Code”) issued by the Securities and Futures Commission of Hong Kong and is required to be reported on by the Company’s financial adviser and auditors or accountants in accordance with Rule 10.4 of the Takeovers Code. In view of the requirements of timely disclosures of the inside information under Rules 13.09(2) and 13.10B of the Listing Rules and the Inside Information Provisions, the Company is required to issue this announcement as soon as practicable and given the time constraints, the Company has encountered genuine practical difficulties (timewise or otherwise) in meeting the reporting requirements set out in Rule 10.4 of the Takeovers Code. Shareholders and potential investors of the Company should note that the Profit Figures have not been reported on and do not meet the standard required by Rule 10 of the Takeovers Code. Shareholders and potential investors of the Company should also note that after the publication of the interim results of the Company for the six months ended 30 June 2020 which is expected to take place on 31 August 2020, which fall within the ambit of Rule 10.9 of the Takeovers Code, the requirements to report on the Profit Figures under Rule 10.4 of the Takeovers Code would no longer be applicable. Shareholders and potential investors of the Company should therefore exercise caution in placing

1 reliance on the Profit Figures and are advised to exercise caution when dealing in the shares of the Company and assessing the merits and demerits of the Offer (as defined in the offer document of the Company dated 27 July 2020).

By order of the Board Skyworth Group Limited Lai Weide Chairman of the Board

Hong Kong, 24 August 2020

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, Mr. Lin Jin and Mr. Lam Shing Choi, Eric as executive directors; and Mr. Li Weibin, Mr. Cheong Ying Chew, Henry and Mr. Hung Ka Hai, Clement as independent non-executive directors.

The directors of the Company jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.

Extract of 2020 Interim Results Announcement of Skyworth Digital Co., Ltd.

Appendix

Stock Code: 000810 Stock Name: Skyworth Digital Announcement Number: 2020-041

Extract of 2020 Interim Results Announcement of Skyworth Digital Co., Ltd.

I. Important Notes

This extract is compiled based on the full text of the 2020 interim report. Investors should read the full text of the 2020 interim report carefully on the media designated by the China Securities Regulatory Commission to gain a comprehensive view of the business performance, financial position and future development plan of the Company. Auditor’s note on non-compliance with accounting standards □ Applicable √ N/A Plans on profit distribution of ordinary shares or transfer from capital reserve to share capital during the reporting period reviewed by the board □ Applicable √ N/A The Company has no plan to distribute cash dividend. No bonus share will be given. No transfer will be made from capital reserve to share capital. Plans on profit distribution of preferred shares during the reporting period approved by the board by way of resolution □ Applicable √ N/A

II. Basic Information of the Company

1. Profile of the Company

Stock name Skyworth Digital Stock code 000810 Listing stock Shenzhen Stock Exchange exchange Contact person and Secretary of the board Securities representative information Name Zhang Zhi Liang Jing Unit A 16/F, Skyworth Mansion., Gaoxin Ave. Unit A 16/F, Skyworth Mansion., Gaoxin Office address 1.S., Hi-tech Park, Nanshan District, Ave. 1.S., High-tech Park, Nanshan District, Shenzhen Shenzhen Telephone 0755-26010018 0755-26010680 Email [email protected] [email protected]

Extract of 2020 Interim Results Announcement of Skyworth Digital Co., Ltd. 2. Major financial information and financial indicators Whether the Company needs to make retrospective adjustments or restate the accounting information of prior years □ Yes √ No Increase or decrease in Same period of prior the reporting period The reporting period year from the same period prior year Revenue (RMB) 3,705,052,508.70 3,894,231,853.12 -4.86% Net profit attributable to listing 181,555,795.81 257,603,878.53 -29.52% company shareholders (RMB) Net profit attributable to listing company shareholders after 128,249,585.67 221,991,791.44 -42.23% non-recurring profit or loss (RMB) Net cash flow generated from 1,344,588,424.25 -86,813,839.02 1,648.82% operating activities (RMB) Basic earnings per share 0.1733 0.2465 -29.70% (RMB/share) Diluted earnings per share 0.1699 0.2381 -28.64% (RMB/share) Weighted average return on net assets 4.68% 7.99% -3.31% Increase or decrease at At the end of the the end of the reporting At the end of prior year reporting period period from the end of prior year Total assets (RMB) 9,511,116,650.42 10,541,262,868.03 -9.77% Net assets attributable to listing 3,893,244,974.08 3,763,156,124.26 3.46% company shareholders (RMB)

3. Number of shareholders and the shareholdings in the Company

Unit: share Total number of the Total number of ordinary preferred shareholders shareholders at the end of the 53,632 whose voting rights 0 reporting period restored (if any) at the end of the reporting period Shareholding of the top 10 shareholders Pledged or frozen Name of Nature of Shareholding Number of Number of restricted Status of shareholder shareholder percentage shares held shares held Number the shares Shenzhen Domestic Chuangwei-RGB non-state-owned 54.97% 584,548,508 Pledged 404,548,508 Electronics Co., legal person Ltd. Foreign natural Shi Chi 3.46% 36,770,524 27,577,893 person Skyworth LCD Foreign legal Technology Co., 2.08% 22,083,862 person Ltd.

Extract of 2020 Interim Results Announcement of Skyworth Digital Co., Ltd. Suining Xing Ye Asset State-owned 2.06% 21,916,008 Management legal person Co., Ltd. Domestic Xie Xiongqing 1.91% 20,354,453 natural person Domestic Lin Weijian 1.79% 19,021,531 natural person Domestic Li Pu 1.29% 13,683,310 natural person Guangzhou Domestic office of Huaxia non-state-owned 0.88% 9,400,000 Securities legal person Hong Kong Securities Foreign legal Clearing 0.85% 9,044,958 person Company Limited Foreign natural Tang Yan 0.61% 6,507,500 person (1) Shenzhen Chuangwei-RGB Electronics Co., Ltd. and Skyworth LCD Technology Co., Ltd. are subsidiaries of Skyworth Group Limited, and are persons acting in concert legally. (2) Lin Weijian was the supervisor of Yingtan City Pengsheng Investment Co., Ltd.* (鹰潭市鹏盛投资有限公司), Lin Weijing was the executive director and general manager of Yingtan City Pengsheng Investment Co., Ltd.* Xie Xiongqing was the executive director Description of the connected and general manager of Yingtan City Pengsheng Investment Co., Ltd.* Lin relationship or acting in concert of Weijian, Lin Weijing and Xie Xiongqing are relatives. Yingtan City Pengsheng the above shareholders Investment Co., Ltd.*, Lin Weijian, Xie Xiongqing, Lin Weijing are persons acting in concert legally. (3) Shi Chi is a director and general manager of the Company, while Tang Yan is his spouse and they are therefore persons acting in concert legally. (4) Apart from the aforesaid, the Company is not aware of any connected relationship that may exist among the other shareholders, nor does it know whether they are persons acting in concert according to the Measures for the Administration of the Takeover of Listed Companies. Status of engagement in securities As at 30 June 2020, Xie Xiongqing held an aggregate of 20,354,453 shares of financing business by the Company, of which 20,354,453 shares were held through the “investor shareholders (if any) credit securities account”. 4. Changes of controlling shareholders or actual controllers Changes of controlling shareholders during the reporting period □ Applicable √ N/A There was no change of controlling shareholders of the Company during the reporting period. Changes of actual controllers during the reporting period □ Applicable √ N/A There was no change of actual controllers of the Company during the reporting period. 5. Total number of holders of preference shares and shareholding of top 10 holders of preference shares □ Applicable √ N/A

Extract of 2020 Interim Results Announcement of Skyworth Digital Co., Ltd. There was no shareholding by holders of preference shares of the Company during the reporting period. 6. Corporate bonds Whether the Company had any outstanding corporate bonds listed on stock exchanges which were not mature or not fully settled after maturity as of the date when this 2020 interim report was approved to be published No III. Management Discussion and Analysis of Operational Performance 1. Business review for the reporting period The Company is committed to providing a comprehensive yet systematic portfolio of broadband network connectivity, UHD device development and UHD industrial application integrated solutions to users across the globe. The Company has been focusing on research, production and distribution of digital smart devices, broadband access devices and integrated terminals, as well as research and development (R&D) and design of software, systems and platforms, primarily targeting communication operators and digital television operators. It also serves telecom and integrated operators in overseas markets across the globe, including Europe, Africa, the Middle East, India, Southeast Asia, Latin America and other regions. The Company provides related devices and solutions based on the customized needs of domestic and foreign operators. The Company is mainly engaged in the business of manufacturing telecom devices. The evolving telecommunication technologies have promoted the continuous upgrading of products in the telecommunication industry, and drove companies in the industry to improve their comprehensive strength and to provide comprehensive solutions and products to better meet the comprehensive needs of operators and customers, while maintaining a leading position in the competition. The Company continued to consolidate its mature system structure planning and R&D ability, industry chain integration capability as well as supply chain and industrial strength. In response to the global outbreak of COVID-2019 pandemic in the first half of 2020, the Company was fully committed to the prevention and control measures strictly in compliance with relevant requirements of the local governments where its subsidiaries operate, to ensure that R&D, production and sales activities are carried out in an orderly manner. During the reporting period, the work resumption of domestic and foreign operators and customers, and hence orders, have been delayed as a result of the impact of the pandemic. The Company’s revenue decreased by 4.86% year-on-year to RMB3,705,052,500. The Company’s gross profit margin in the first half was 18.68%, with net profit attributable to parent company decreasing by 29.52% year-on-year to RMB181,555,800. (I) Smart devices & broadband connection In the first half of 2020, the smart devices & broadband connection business accounted for 67.50% of the revenue of the Company. Main products and their functions and applications were as follows:

Categories of Products Functions and Applications Main Products Provision of digital TV interactive video and other services Digital smart Including various types of boxes, such as through set-top boxes based on operator cable, satellite antenna, boxes digital 4K, Android TV, IPTV and OTT fiber-optic network, terrestrial broadcasting and the Internet, etc.

Integrated Including broadband integration Built-in smart OS system, mobile APP interaction, gigabit terminals (PON+Wi-Fi+Video), smart home gateway gateway supporting 10GEPON/XGPON. Powered by IP-based, (including intelligent PON upstream gateway communication, network and multimedia audio and video

Extract of 2020 Interim Results Announcement of Skyworth Digital Co., Ltd. and IoT gateway), smart networking technologies, these devices provide users with Internet data (supporting Wi-Fi Mesh, G.hn), etc. These are access, Wi-Fi access, multimedia audio and video and voice integrated smart devices for broadband services with strong service capabilities of large broadband network communication with multi-function access; intelligent applications and value-added services are including broadband access also provided based on an integrated network platform /networking/gateway/smart home/video services Provide operators and home users with multiple Internet access, Broadband Covering fiber-optic access devices home networking and telephone services, etc., through optical network (GPON/EPON, 10GPON), Wi-Fi5/Wi-Fi6 fiber, coaxial cable, network cable and mobile network, and connection wireless routers, Cable Modem, 4G/5G CPE, supported by xPON, Docsis, Ethernet and 4G/5G devices etc. communication technologies During the reporting period, the Company recorded a revenue of RMB2,500,634,000 from smart devices and broadband connection, representing a year-on-year decrease of 17.65%. 1) In the BNO market, as a swift response to the changes in market demand, the Company continued its delivery of integrated terminals, 5G+8K boxes and ONU, PON, Cable Modem and other broadcasting products, while actively promoting its services for corporate clients such as emergency broadcasting and new-generation live satellite with household communication; 2) products for the top 3 telecom operators in China covering IPTV, IPTV+OTT and other set-top boxes, broadband integration, standalone VR glasses, smart gateways, WiFi routers, IoT general-purpose smart devices (e.g. IP cameras and outdoor motion detectors); 3) in the Internet OTT retail market, products includes 4K smart boxes, Tencent Aurora Projector, Aurora fast projectors, security cameras and standalone VR glasses. In the first half of 2020, driven by the demand arising from home quarantine and online courses, a significant increase was recorded for the sales of smart devices, together with the rapid growth in content payment and in operating income; 4) in the overseas markets, the Company continued its mass production to supply products (including smart boxes, broadband network connection devices and Android TV boxes) to Europe, Africa, India, Southeast Asia, the Middle East and Latin America, and maintained in-depth cooperation with Netflix, Google and Amazon. Although overseas subsidiaries, self-owned plants and cooperating OEMs were subject to certain impact of the epidemic, the Company ensured stable delivery with the implementation of effective epidemic prevention and operational measures. Revenue from overseas market recorded a year-on-year growth. (II) Professional display During the reporting period, the Company recorded a revenue of RMB1,057,129,100 for professional display, a year-on-year growth of 43.38%. 1) Automotive smart electronics: with a focus on touch control systems and digital LCD dashboard, secured projects from FAW-Volkswagen, Chery and Geely in the first half of 2020; 2) Mobile display modules: deepening its strategic partnerships with clients such as LGE, ZTE Corporation, Wingtech Technology, Chino-E and Longcheer Holdings, which covered small and medium-sized LCD display modules, OLED display modules and complete devices. At the same time, the Company actively explored emerging fields including displays for industrial automation control systems and electronic car devices, as well as LED display market; 3) Security and commercial display: with a focus on professional display and smart security, products of this business include monitor, large LCD splicing screens, indoor and outdoor LED devices, advertising devices, commercial display and smart door lock. (III) Value-added services and operations During the reporting period, the Company recorded a steady growth in its user value-added services and operations. 1) Operation platform of value-added services for internet OTT users. Value-added operation services

Extract of 2020 Interim Results Announcement of Skyworth Digital Co., Ltd. for OTT users recorded steady growth amid the epidemic, with the number of cumulative users and monthly active users increasing by 83.07% and 70.50% respectively as compared with the same period last year; 2) Operating and servicing platform for large-screen advertisements targeting operators. The Company is engaged in advertising resource operation services with broadcast and TV operators and communication operators. In view of the significant impact of the epidemic suffered by traditional advertisement placing industries (fast-fashion, automotive, tourism, etc.), a strategy of “cost control and strict limit on risk exposure” was adopted in the first half of 2020 and some platform cooperation programmes were cut to maximize the benefits of advertising; 3) Platform of O2O on-site home services. The Company made continuous efforts in improving its service capabilities and efficiency. Despite being subject to certain impact of the epidemic, the business, covering domestic and foreign operator markets, remained on track and recorded growth in revenue. 2. Matters related to financial report (1) Changes in accounting policies, accounting estimates and calculation from the financial report for the prior accounting period □ Applicable √ N/A There were no changes in accounting policies, accounting estimates and calculation of the Company in the reporting period. (2) Major accounting errors during the reporting period that require retrospective restatement □ Applicable √ N/A There were no major accounting errors during the reporting period that required the Company to restate its accounts retrospectively. (3) Changes in consolidated financial statement from the financial report for the prior accounting period √ Applicable □ N/A 1. In 2020, the Company has de-registered and liquidated its wholly-owned subsidiary Caldero Malaysia SDN.BHD. as part of the adjustment to its operating strategy. 2. In June 2020, Shenzhen Skyworth Digital Technology Co., Ltd., the Company’s subsidiary, has completed the acquisition of 34% equity interests in Beijing Skyworth Hightong Digital Technology Co., Ltd. (北京创维海通数字技术有限公司) held by Beijing Xinhai Wantong Technology Centre (Partnership) (北京信海万通科技中心 (合伙)), which constitutes a transaction of acquiring equity interest in a subsidiary owned by minority shareholders of the subsidiary. After completion of the acquisition, shareholding of Shenzhen Skyworth Digital Technology Co., Ltd. in Beijing Skyworth Hightong Digital Technology Co., Ltd. increased from 51% to 85%.

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