China Innovationpay : 2016 Third Quarterly Report

Stock Code: 8083

Third Quarterly Report

2016

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET ("GEM") OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE")

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange take no responsibility for the contents of this report, 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 report.

This report, for which the directors (the "Directors") of China Innovationpay Group Limited (the "Company") collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this report is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this report misleading.

China Innovationpay Group Limited

中國創新支付集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

HIGHLIGHTS

The Group recorded a turnover of approximately HK$33,048,000 for the nine months ended 30 September 2016, representing an decrease of 57.8% compared with the same period in 2015.

The Group's operating loss for the nine months period was approximately HK$64,741,000, whereas a loss of HK$74,463,000 for same period was recorded in last year.

For the three months ended 30 September 2016, the Group made sales of HK$15,620,000, representing an decrease of 35.9% over the same period in last year. Gross profit margin decrease from 35% in last year to 31% in current year.

The Directors do not recommend the payment of a dividend for the nine months ended 30 September 2016.

China Innovationpay Group Limited 01 Third Quarterly Report 2016

FINANCIAL RESULTS

The board of directors (the "Board") of China Innovationpay Group Limited (the "Company") announces the unaudited condensed consolidated results of the Company and its subsidiaries (the "Group") for the three months and the nine months ended 30 September 2016 together with the comparative unaudited figures for the corresponding periods in 2015 as follows:

Condensed Consolidated Statement of Comprehensive Income

For the three months ended 30 September		For the nine months ended 30 September
2016	2015	2016	2015
(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
Notes	HK$'000	HK$'000	HK$'000	HK$'000
Continue operations
Revenue	2	15,620	24,370	33,048	78,280
Cost of sales	(10,839)	(15,776)	(15,813)	(49,359)
Gross profit	4,781	8,594	17,235	28,921
Selling and marketing expenses	(5,989)	(5,825)	(14,010)	(28,957)
General & administrative expenses	(19,239)	(15,295)	(67,966)	(43,673)
Equity-settled share-based payments	-	(30,754)	-	(30,754)
(25,228)	(51,874)	(81,976)	(103,384)
Loss from operations	(20,447)	(43,280)	(64,741)	(74,463)
Other revenue/(expenses)	3	(2,877)	304	1,660	212
Gain on disposal of subsidiaries	4	4,431	-	1,531	-
Finance cost	(69)	-	(1,502)	-
Loss before taxation	(18,962)	(42,976)	(63,052)	(74,251)
Taxation	5	-	(94)	(29)	(320)
Loss from continue operations	(18,962)	(43,070)	(63.081)	(74,571)
Minority interest	(1,007)	(970)	(3,317)	(2,300)
Loss attributable to shareholder	(19,969)	(44,040)	(66,398)	(76,871)
Discontinue operations
Loss from discontinue operations	7	(1,603)	-	(8,965)	-
Loss for the period	(21,572)	(44,040)	(75,363)	(76,871)

02 China Innovationpay Group Limited

Third Quarterly Report 2016