Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd.

Stock code: 200725 Stock abbreviation: BOE B Announcement No.:2014-016

BOE Technology Group Co., Ltd.

Abstract of the 2013 Annual Report

1. Important reminders

This abstract is based on the full text of the annual report. For more details, investors are suggested to read the full text disclosed at the same time with this abstract on the website of or any other website designated by CSRC. Company profile: Stock abbreviation BOE A, BOE B Stock code 000725, 200725 Stock exchange listed with Shenzhen Stock Exchange For contact Company Secretary Securities Affairs Representative Name Liu Hongfeng Xiao Zhaoxiong Tel. 010－64318888 ext. 010－64318888 ext. Fax 010－64366264 010－64366264 E-mail [email protected] [email protected]

2. Financial highlights and change of shareholders

（1）Financial highlights

Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or correction of any accounting error? □ Yes √ No Increase or decrease Item 2013 2012 of this year over last 2011 year (%) Operating revenue (RMB Yuan) 33,774,285,620.00 25,771,583,386.00 31.05% 12,741,413,562.00 Net profit attributable to shareholders 2,353,365,694.00 258,133,391.00 811.69% 560,866,477.00 of the Company (RMB Yuan) Net profit attributable to shareholders of the Company after extraordinary 1,713,985,503.00 -544,170,638.00 Inapplicable -3,871,227,843.00 gains and losses (RMB Yuan) Net cash flows from operating 8,956,439,250.00 3,088,875,525.00 189.96% -778,530,727.00 activities (RMB Yuan) Basic EPS (RMB Yuan/share) 0.174 0.019 815.79% 0.041 Diluted EPS (RMB Yuan/share) 0.174 0.019 815.79% 0.041 Weighted average ROE (%) 8.70% 1% 7.70% 2.22% Increase or decrease Item As at 31 Dec. 2013 As at 31 Dec. 2012 of this year-end than As at 31 Dec. 2011 last year-end (%) Total assets (RMB Yuan) 92,538,451,492.00 67,105,360,865.00 37.9% 68,769,415,646.00 Net assets attributable to shareholders 28,251,815,361.00 25,886,959,650.00 9.14% 25,585,892,264.00 of the Company (RMB Yuan)

1 Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd.

（2） Shareholdings of the top 10 shareholders

Total number of shareholders at 411,176 (of which A-share 394,601（of which A-share Total number of shareholders at the end of the fifth trading day holders: 373,251; B-share holders:357,968；-share the end of the reporting period before the disclosure date of the holders: 37,925) annual report holders: 36,633） Shareholdings of the top 10 shareholders Shareholdin Pledged or frozen shares Nature of Total number of Number of restricted Name of shareholder g percentage shareholder shares held shares held Status of Number of (%) shares shares Being E-TOWN International State-owned 10.98% 1,484,159,406 0 Pledged 635,000,000 Investment & Development Co., Ltd. Corporation BOE Investment & State-owned 6.37% 860,981,080 0 Development Co., Ltd. Corporation Beijing Economic-Technological State-owned 6.27% 847,650,000 0 Pledged 423,825,000 Investment & Development Corp. Corporation Rongke Project Investment Co., State-owned 4.99% 675,026,803 0 Ltd. Corporation Beijing BDA Technological Other 4.44% 600,000,000 0 Pledged 300,000,000 Investment Development Co., Ltd. On behalf of Beijing Electronics Holdings Co., Ltd. 2.04% 275,303,883 0 Frozen 2,000,000 the country Hefei Xincheng State-Owned Assets State-owned 2.03% 274,848,276 0 Management Co., Ltd. Corporation State-owned Hefei Lan Ke Investment Co., Ltd. 0.9% 122,369,283 0 Corporation Sinotrans Air Transportation Other 0.83% 111,600,000 0 Development Co., Ltd. CMBC—Yinhua Shenzheng 100 Other 0.7% 95,087,838 0 Index Securities Investment Fund 1. Beijing Electronics Holdings Co., Ltd. holds 66.25% shares of Beijing BOE Investment & Development Co., Ltd. and is its controlling shareholder. 2. When the Company completed private offering of shares in 2010, Beijing E-TOWN International Investment & Development Co., Ltd. transferred all shares directly held to Beijing BOE Investment & Development Co., Ltd. for management, then BOE Investment acquired the attached rights of the shares attributable to other shareholders in accordance with current effective laws and rules of the Company excluding right of disposition such as transfer, Explanation on associated relationship or persons donation, mortgage etc. and usufruct (including claim for profit distribution acting in concert among the above-mentioned and claim for retained assets distribution). shareholders 3. BEIJING ECONOMIC-TECHNOLOGICAL INVESTMENT & DEVELOPMENT CORP. holds 49% shares of BEIJING BDA TECHNOLOGICAL INVESTMENT DEVELOPMENT CO., LTD. Both of them are under the control of the Administration Committee of Beijing Economic and Technological Development Zone, which makes them parties acting in concert. 4. Except for relationship among the above shareholders, the Company is not aware of whether the other top ten shareholders exist associated relationship or not, or they are persons acting in concert or not. Shareholders taking part in margin financing and Naught securities lending (if any)

（3）Relation between the Company and its actual controller in the form of diagram

2 Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd.

State-owned Assets Supervision & Wang Dongsheng 20%, Jiang Yukun 10%, Liang Xinqing 10%, Administration Commission of Beijing Zhao Caiyong 6.667%, Shi Dong 6.667%, Chen Yanshun 6.667%, People’s Government Song Ying 6.667%, Han Guojian 6.667%, Gong Xiaoqing 3.333%, Wang Yanjun 3.333%, Wang Jiaheng 3.333%, Liu Xiaodong

100% 3.333%, Ren Jianchang 1.667%, Sun Jiping 1.667%, Zhang Peng 1.667%, Wang Ai’zhen 1.667%, Mu Chengyuan 1.667%, Xu Yan Beijing State-owned Capital Management 1.667%, Hua Yulun 1.667%, Zhong Huifeng 1.667% Administrative Center 100% 100% Beijing Intelligent Kechuang Technology Development Beijing Electronics Holdings Co., Ltd. Co., Ltd.

66.25% 33.75%

Beijing BOE Investment & Development Co., Ltd.

6.37% 2.04% BOE Technology Group Co., Ltd.

3. Discussion and analysis by the management

(1) Overview In face of the complex competition and the severe market environment in 2013, we firmly upheld the “1433 Strategy” (“Adhere to 1 Goal; Accelerate 4 Innovations; Make Good Use of 3 Kinds of Capital; and Realize 3 Transformations”) and successfully doubled the annual earnings, with significant improvement in the total output, the market share, profitability, technological capability, management capability and other comprehensive indicators. For 2013, the Company achieved operating revenues RMB 33.8 billion, up 31% from last year; and net profit attributable to shareholders of the Company nearly RMB 2.35 billion, up over 811% from last year. In 2013, we expanded the Beijing 8.5G Line by 120K. Both of the Erdos 5.5G AMOLED Line and the Hefei 8.5G Line went into production. Construction of the 8.5G Line commenced in July. Small-size alteration and product shift of the Hefei 6G Line and the Beijing 8.5G Line. On the technology and new products，9.55” Flexible OLED, 30” Hybrid OLED and some other models were successfully turned on. 98” 8K*4K product which the biggest in the world was launched, together with quite a few other new products, which were well-received by the market. In 2013, we also applied for 4,282 new patents and played a leading role in formulating/revising 8 sets of international/domestic technical standards. Operating performances of specific business divisions: (1) Display device division Medium-and large-sized product division: Joining hands with brand-name customers at home and abroad, we developed quite a few globally new products, with a steadily enlarging share in the global market. The proportion of products with high added value gradually rose to 74%. The product structure was gradually optimized. We developed 45 new products, including 7 globally new products. The Beijing 8.5G Line 0.5t Glass Alteration Project went on well. The transformation of production lines towards a smaller product size, higher added value and more uniqueness accelerated and their profitability further improved. Medium-and small-sized panel division: The international market share increased gradually and the operation of the Strategic Customer Business Department was a success. The product structure was continuously enriched and optimized. A total of 49 products were in mass production and on sale, of which products with high added value took up over 70% of the sales volume. The mass production capability of the On Cell Touch Project took shape. The 4.5G Line started mass production of wear, vehicle-mounted and medical products. Small-sized

3 Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd. products accounted for over 70% of the output of the Hefei 6G Line, which successfully put 5 cell phone models into mass production. More key materials were procured from domestic makers. Electronic material, component and vacuum device business divisions: The electronic material and component business division accomplished the 2013 strategic goals set for it, and the vacuum device business division continued to profit. In the vacuum technology business, restructuring accelerated and many high-end products were developed to explore new markets and customers and increase the sales volume. (2) Intelligent system division Concerning the display end business, the 65” and 55” intelligent integrative products were developed independently, the 110” UHD product was put into mass production and for sale and the 3 BiTV1.0 products were launched at the end of 2013. About the lighting/photovoltaic business, the independent R&D capability kept increasing and quite a few globally new products were launched. As for the OEM business, the annual sales volume increased 57% from last year and the medium- and small-sized business profited. (3) Health service division Concerning the professional park business, the service philosophy was updated and notable achievements were made in park brand promotion. Regarding the health medical care business, under the guidance of the Group’s PS+ Strategy, the top-level architecture design and the business segment design were completed. As for the cloud service business, we proactively initiated and pushed forward projects such as planning of the health medical care cloud platform, the cloud service technology development platform (PaaS) and the cloud computing center. In 2013, our efforts helped us win the following awards granted by various organizations: “Chinese Enterprise Innovation Award”, “New IT Leading Enterprise of China”, “Influential Information Enterprise of China for 2013”, “2013 Globally Competitive Brands • China Top 10”, “The Most Innovative Enterprise”, “Golden Roundtable Excellent BOD”, “Top 10 Consumer Electronic Brands of China” for 7 year in a row, etc. In addition, the 65” oxide ultra HD display helped win the “2013 CITE Innovative Product & Application Golden Award” and the 110” LCD TV was honored as “Innovative Ultra HD Product of China’s Color TV Industry for 2013”. (2) Asset and liability analysis

1. Major changes of asset items

Unit: RMB Yuan As at 31 Dec. 2013 As at 31 Dec. 2012 Proportion Proportion Proportion change Explain any major change Amount in total Amount in total （%） assets (%) assets (%) Mainly because of new borrowings Monetary funds 20,464,553,422.00 22.11% 15,211,851,133.00 22.67% -0.56% for new projects and operating cash inflows Accounts 4,855,938,522.00 5.25% 5,196,041,164.00 7.74% -2.49% - receivable Inventories 3,018,804,659.00 3.26% 2,668,906,527.00 3.98% -0.72% - Investing real 1,284,415,937.00 1.39% 1,309,561,041.00 1.95% -0.56% - estate Long-term equity 989,848,083.00 1.07% 971,409,821.00 1.45% -0.38% - investment Fixed assets 32,495,665,045.00 35.12% 34,534,107,374.00 51.46% -16.34% - Mainly because the consolidation scope expanded and some new Construction in projects were still in the construction 22,172,949,652.00 23.96% 2,294,256,409.00 3.42% 20.54% progress period, causing more spending on construction and equipment procurement. Other current 1,872,804,826.00 2.02% 1,284,972,353.00 1.91% 0.11% Deductible VAT increased. assets Interest 109,045,546.00 0.12% 30,850,933.00 0.05% 0.07% Monetary funds increased. receivable

4 Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd.

Available-for-sale The Company purchased new shares 254,506,569.00 0.28% 116,600,700.00 0.17% 0.11% financial assets in the reporting period. The land use rights acquired for the Intangible assets 2,025,945,856.00 2.19% 1,497,109,054.00 2.23% -0.04% new projects The Company enhanced management of the working capital Notes receivable 565,423,076.00 0.61% 860,883,384.00 1.28% -0.67% and some business lines adopted settlement in note less often. Subordinate company was expectedly able to earn good profits in the future and generate a sufficient Deferred income 160,480,672.00 0.17% 47,700,956.00 0.07% 0.1% taxable income to make up for the tax assets loss, so the accumulated loss, etc. were recognized as deferred income tax liabilities. Deductible import VAT and the Other non-current 1,214,223,099.00 1.31% 229,388,552.00 0.34% 0.97% prepayments for engineering assets equipment increased.

2. Major changes of liability items

Unit: RMB Yuan 2013 2012 Proportion Proportion Proportion change Explain any major change Amount in total Amount in total （%） assets (%) assets (%) Short-term New borrowings for new 12,122,769,840.00 13.1% 727,267,475.00 1.08% 12.02% borrowings projects Long-term 20,995,628,956.00 22.69% 17,373,155,700.00 25.89% -3.2% - borrowings Note settlement was adopted in Notes payable 135,654,664.00 0.15% 51,621,956.00 0.08% 0.07% some procurements. Accounts Advances from customers received in 281,618,909.00 0.3% 647,932,719.00 0.97% -0.67% decreased. advance The consolidation scope Payroll payable 845,898,437.00 0.91% 539,910,148.00 0.8% 0.11% expanded, R&D was enhanced and labor cost increased. Taxes and fares The enterprise income tax 190,205,223.00 0.21% 48,857,070.00 0.07% 0.14% payable increased. Interest payable 314,004,348.00 0.34% 98,478,461.00 0.15% 0.19% Borrowings increased. Some new projects were still in the construction period, Other payables 6,062,245,439.00 6.55% 3,201,279,824.00 4.77% 1.78% resulting in an increase in the payables for engineering equipment Non-current liabilities due 308,628,826.00 0.33% 1,544,020,648.00 2.3% -1.97% Some borrowings were repaid. within 1 year The operating revenues for Other current 2013 increased and the 255,465,666.00 0.28% 94,629,652.00 0.14% 0.14% liabilities guarantee money increased accordingly. Convertible debentures Other non-current 6,798,328,315.00 7.35% 1,647,293,045.00 2.45% 4.90% increased and import VAT was liabilities postponed. (3) Outlook of the future development of the Company

5 Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd.

I. Industry competition structure and external economic environment 1. Industry competition structure As the increasingly fierce market competition, on one side the display technique developed rapidly with the refresh rate of new materials, new process and new products quickened day by day; on the other side the competition situation became more and more complicated and the global flat display industry appeared the pattern of “Three Countries and Four Districts Game” as well as the “Complex Fight” such as the intellectual property fight, information fight, talents fight and public opinion fight based on the price fight were intensified, especially after the decelerated growth of the market requirements of the medium-to-large size, all panel manufacturers transferred one after another to the small size market which grew faster that led the market competition of the small size screen more and more fierce. 2. External economic environment Y2014 faced with the global complex political and economic environment and various uncertain factors with the slow down of the economic increase and weak consumer demand as well as the global financial and economic resonance risks were still there; on the other side, China will face up with a new round of reform bandwagon and the reform of ecological politics economy and culture society that “Five-in-One” will vigorously promote the development of the informatization industry, as well as the time with soft and hard fusion, service integration and service transformation is Comprehensive coming. II. Expectation to the future development of the Company The Company, as the provider of optoelectronic display technology, production and solution, we always adhere to the objective of sustainable innovation, transferring ourselves from manufacturer of display accessories to provider of global innovation system products and service, as well as realize sustained and steady profits, so thus to become the world's leading company of the display field. Y2014 is the key year for the execution of the overall strategy “One Four Three Three”. The Company will firmly execute the annual management policy of “Customer-oriented, Lean Management, Innovation and Breakthrough, Profit Multiplication” pull out all stops to carry out the annual career plan operation target and each strategy task. In order to ensure the completion of the 2014 annual operation target of the Company, each business group takes active measures. 1. Business groups of display devices In terms of business of medium-to-large size products: continue to deepen the transformation of miniaturization, value-addition and characteristic construction, constantly deepen the customer-oriented mechanism, further close to the customer, know of the market, do well in the planning and development of new products, and the new products achieve quantitative sales; in terms of business of medium-to-small size products: enlarge the development power of the brand customers, consolidate and enlarge the status of the first strategic supplier; deeply dig out the emerging market etc, ensure the market share of the new products; accelerate the development of the new products and the rate of volume production and listing, accelerate to realize the mass production of In Cell products, complete the breakthrough of high performance technology and improve the rate of the world premiere products. 2. Intelligent system business group The Group defines the vision of “Become the Global Leaders in the Filed of Display and Ambient Lighting and Achieve the Respectable Brand”. In terms of business of display terminal: optimize the business process, strengthen the market insight and planning ability through the innovative commercial model of new business projects; go deep into the investigation and survey of the market and customers requirements, improve the market acuity, dig-in the market and rapidly follow up, so thus to design dazzling products that race to control the market opportunities; ensure the new products can be listed as planed and form stable profit resources as soon as possible; in terms of business of Photovoltaic lighting: enhance the proportion of the first published products and realize volume production selling; ensure the innovation projects such as plant factories go on wheels; in terms of business of the contract manufacturing: constantly enlarge the current customer shipment, go on dig out and cultivate the key strategic customers; accelerate the high performance product development and volume production and listing rate by insisting on customer orientation. 3. Health service business group In terms of business of professional park: do well in the project planning and negotiating such as the health industrial park and synthesis of scientific and technological industry city; improve the service quality, strengthen the ability construction, refine the management; in terms of business unit of health and medical: ensure the starting projects promote smoothly, operate steadily; in terms of the exemplary case of cloud service: accelerate the top-level design and economic and technical feasibility analysis, innovate the commercial model and defines the profit model of data traffic.

6 Abstract of the 2013 Annual Report of BOE Technology Group Co., Ltd.

4. Matters in relation to financial reporting

(1) Explain change of the consolidation scope as compared with the financial reporting of last year

The changes occurred in consolidated scope of this year: gained the subsidiary Hefei Xinsheng by business merger not under the same control.

Hefei Xinsheng is an other limited liability company registered and established in Hefei in Aug. 2009 by Hefei Construction Investment and Holding Co., Ltd., Hefei Xincheng State-owned Assets Management Co., Ltd. (“Hefei Xincheng”) and Hefei BOE. The Company mainly operates the investment, construction, R&D, production and sales of the relevant products of thin-film transistor liquid crystal display and its auxiliary product.

On 31 May 2013, the Company increased the capital of RMB 4.1 billion. On 31 May 2013, the Company held 50.59% of the equity. According to the changed Articles of Incorporation, the Board of Directors consisted of 5 Directors with 3 of the Company and more than 50 voting power that can execute the control of Hefei Xinsheng during the formulating process of the production and operation policies by the Executive Director, so the Company included Hefei Xinsheng into the consolidate scope on 31 May 2013.

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