Northeast Electric Development : Unaudited Results Announcement For The Six Months Ended 30 June 2019

ANNOUNCEMENT OF INTERIM RESULTS 2019

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.

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 0042)

UNAUDITED RESULTS ANNOUNCEMENT FOR

THE SIX MONTHS ENDED 30 JUNE 2019

The Board of Directors (the "Board") and the directors (the "Directors") of the Northeast Electric Development Company Limited (the "Company") hereby announce the unaudited interim results of the Company and its subsidiaries (collectively, the "Group") as of 30 June 2019.

Chapter 1 IMPORTANT NOTICE

1. The Board, Supervisory Committee, Directors, Supervisors and senior management of the Company hereby confirm that there are no false representations, misleading statements or material omissions contained in this report, and they, severally and jointly, accept full responsibility for the truthfulness, accuracy and completeness of the contents of this interim report.
2. The Company's Chairman, Zhu Jie, Chief Financial Officer, Wang Kai and Chief Accounting Officer, Xing Liwen hereby represent: guaranteeing the truthfulness, accurateness and integrity of the financial reports in the interim report.
3. This announcement has been considered and approved by the seventh meeting of the 9th Board convened on 29 August 2019. All Directors attended the Board meeting in person to consider and approve this report.
4. The Group prepared the Unaudited Results Announcement for the Six Months Ended 30 June 2019 in accordance with PRC GAAP. The audit committee of the Board of the Company has reviewed and confirmed the Company's interim results announcement for 2019. The audit committee has approved the financial accounting principles, standards and methods adopted by the Company for the unaudited interim accounts for the six months ended 30 June 2019.
5. The Company proposes not to distribute cash dividend, issue bonus share, or capitalise from capital reserves.
6. This announcement is published in both Chinese and English. If there are any inconsistencies in content, the Chinese version shall prevail in all aspects.
7. Unless otherwise stated, Renminbi is the only monetary unit in this announcement.
8. This announcement is made pursuant to Rule 13.49(6) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Paragraph 46 of Note 16 thereto.

NORTHEAST DEVELOPMENTELECTRIC LTD.CO.,

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NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

Chapter 2 CORPORATE PROFILE

2.1 Basic information

Stock abbreviation of A shares	ST Northeast Electric A shares stock code	000585
Place of the listing of A Shares	Shenzhen Stock Exchange
Stock abbreviation of H shares	Northeast Electric	H shares stock code	0042
Place of the listing of H shares	The Stock Exchange of Hong Kong Limited
Legal Chinese name	東北電氣發展股份有限公司
Chinese abbreviation	東北電氣
Legal English name	Northeast Electric Development Company Limited
English abbreviation	NEE
Legal representative	Li Tie

2.2 Contact person and contact information

	Secretary to the Board	Representative for securities affairs
Name	Ding Jishi	Zhu Xinguang
Address	22nd Floor, HNA Plaza, No.7 Guoxing	22nd Floor, HNA Plaza, No.7 Guoxing
	Road, Meilan District, Haikou City,	Road, Meilan District, Haikou City,
	Hainan Province	Hainan Province
Telephone	0898-68876008	0898-68876008
Fax	0898-68876033	0898-68876033
Email	[e-mail]	[e-mail]

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2.3 Additional information

Registered address	Room A1-1077, 5th Floor, Building A,
	Entrepreneurship Incubation Center of Haikou
	National High-tech Zone, No.266 Nanhai Avenue,
	Haikou City, Hainan Province
Postal code	571152
Office address	22nd Floor, HNA Plaza, No.7 Guoxing Road, Meilan
	District, Haikou City, Hainan Province
Postal Code	570203
Website	www.nee.com.cn
E-mail address	[e-mail]

LTD.CO.,

DEVELOPMENTELECTRIC

NORTHEAST

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Chapter 3 PRINCIPAL FINANCIAL DATA AND INDICATORS

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

			Increase/decrease in the
		The same	reporting period compared
	The reporting	period of last	with the same period of last
	period	year	year
Operating incomes (RMB)	45,163,758.53	14,296,160.44	215.92%
Net profits attributable to shareholders of the
listed company (RMB)	-3,924,330.74	-14,119,432.82	N/A
Net profits attributable to shareholders of the
listed company after extraordinary items (RMB)	-3,924,330.74	-17,513,717.49	N/A
Net cash flows arising from operating activities
(RMB)	-2,091,919.29	-5,163,724.31	N/A
Basic earnings per share (RMB/Share)	-0.0045	-0.0162	N/A
Diluted earnings per share (RMB/Share)	-0.0045	-0.0162	N/A
Weighted average return on net assets	-50.24%	-6.65%	N/A
	As at the end of		Increase/decrease in the
	the reporting	As at the end of	reporting period compared
	period	last year	with the end of last year
Total assets (RMB)	540,639,229.61	505,113,480.52	7.03%
Net assets attributable to shareholders of the
listed company (RMB)	13,055,892.89	8,619,218.15	51.47%

Description of differences in figures under domestic and foreign accounting standards:

There are no differences in net profits and net assets prepared under PRC GAAP and HKFRS or International Accounting Standards.

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Chapter 4 CHANGES IN SHARES AND SHAREHOLDER INFORMATION

4.1 Changes in shares

Unit: Share

		Before the change		Increase/decrease (+, -) arising from the change		After the change
						Conversion of
				Issue of new		capital reserve
		Number	Percentage	shares	Bonus issue	into shares	Others	Subtotal	Number	Percentage
I. Shares subject to trading moratorium	5,999,022	0.69%	0	0	0	0	0	5,999,022	0.69%
1.	State-owned shares	0	0.00%	0	0	0	0	0	0	0.00%
2.	State-owned legal person shares	0	0.00%	0	0	0	0	0	0	0.00%
3.	Other domestic shares	5,999,022	0.69%	0	0	0	0	0	5,999,022	0.69%
	Including: Domestic legal person
	shares	5,999,022	0.69%	0	0	0	0	0	5,999,022	0.69%
	Domestic natural person shares	0	0.00%	0	0	0	0	0	0	0.00%
4.	Foreign shares	0	0.00%	0	0	0	0	0	0	0.00%
	Including: Overseas legal person
	shares	0	0.00%	0	0	0	0	0	0	0.00%
	Overseas natural person shares	0	0.00%	0	0	0	0	0	0	0.00%
II. Shares not subject to trading
moratorium	867,370,978	99.31%	0	0	0	0	0	867,370,978	99.31%
1.	Renminbi ordinary shares	609,420,978	69.78%	0	0	0	0	0	609,420,978	69.78%
2.	Foreign shares listed domestically	0	0.00%	0	0	0	0	0	0	0.00%		LTD.
3.	Foreign shares listed overseas	257,950,000	29.53%	0	0	0	0	0	257,950,000	29.53%		CO.,
4.	Others	0	0.00%	0	0	0	0	0	0	0.00%
												DEVELOPMENTELECTRICNORTHEAST
III.Total shares	873,370,000	100.00%	0	0	0	0	0	873,370,000	100.00%
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ANNOUNCEMENT OF INTERIM RESULTS 2019

4.2 Number of shareholders and shareholding

										Unit: Share
	Total number of common shareholders				Total number of preferred shareholders with voting rights restored at the
	at the end of the reporting period				62,187	end of the reporting period (if any) (see Note 8)		0
		Shareholdings of common shareholders holding more than 5% of the total share capital or the top ten common shareholders
					Number of		Number of	Number of		Shares pledged or frozen
					ordinary		ordinary	ordinary
					shares as at	Increase/	shares held	shares held not
					the end of the	decrease in the	subject to	subject to
					reporting	reporting	trading	trading		Status of
	Name of shareholder		Nature of shareholder	Percentage	period	period	moratorium	moratorium		shares	Number
	HKSCC Nominees Limited		Overseas legal person	29.43%	257,047,899	0	0	257,047,899
	Beijing Haihongyuan Investment		Domestic	9.33%	81,494,850	0	0	81,494,850		Pledged	81,494,850
	Management Co., Ltd.		non-state-owned
			legal person
	Nanjing FangKai Enterprise		Domestic	1.24%	10,826,001	3,473,901	0	10,826,001
	Management Co., Ltd.		non-state-owned
			legal person
	Fu Lianjun		Domestic natural person	0.56%	4,860,689	2,476,000	0	4,860,689
	Liang Liusheng		Domestic natural person	0.43%	3,781,700	1,067,800	0	3,781,700
	Shi Yubo		Domestic natural person	0.41%	3,560,000	0	0	3,560,000
	Shenzhen Zhongda Software		Domestic	0.41%	3,550,000	0	3,550,000	0
LTD.	Development Co., Ltd.		non-state-owned
		legal person
CO.,
Chen Xiru		Domestic natural person	0.40%	3,450,000		0	3,450,000
DEVELOPMENT
Wan Jinchun		Domestic natural person	0.36%	3,150,151	270,951	0	3,150,151
	Xu Kaidong		Domestic natural person	0.28%	2,432,059	0	0	2,432,059
	Strategic investor or ordinary legal person becoming a top ten								Nil
	common shareholder after placing of new shares (if any)
ELECTRICNORTHEAST
Explanation on the connected relationship and concerted action	So far as the Company is aware, there is no connected relationship among the above shareholders or are parties acting in
	of the above shareholders			concert as required in "Measures for the Administration of the Takeover of Listed Companies".

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ANNOUNCEMENT OF INTERIM RESULTS 2019

Shareholdings of the top ten holders of ordinary shares not subject to trading moratorium

			Number of ordinary shares held	Class of shares
			not subject to trading
			moratorium at the end of the
Name of shareholder	reporting period	Class of shares		Number
HKSCC Nominees Limited	257,047,899	Overseas listed		257,047,899
				foreign shares
Beijing Haihongyuan Investment	81,494,850	RMB ordinary		81,494,850
Management Co., Ltd.			shares
Nanjing FangKai Enterprise	10,826,001	RMB ordinary		10,826,001
Management Co., Ltd.			shares
Fu Lianjun			4,860,689	RMB ordinary		4,860,689
				shares
Liang Liusheng		3,781,700	RMB ordinary		3,781,700
				shares
Shi Yubo			3,560,000	RMB ordinary		3,560,000
				shares
Chen Xiru			3,450,000	RMB ordinary		3,450,000
				shares
Wan Jinchun			3,150,151	RMB ordinary		3,150,151
				shares
Xu Kaidong			2,432,059	RMB ordinary		2,432,059
				shares
MORGAN STANLEY & CO.	2,391,100	RMB ordinary		2,391,100
INTERNATIONAL PLC.		shares
Explanation	on the	connected	So far as the Company is aware, there is no connected relationship
relationship	or concerted action	among the top ten holders of ordinary shares not subject to trading
among the top ten holders of	moratorium or between them and the top ten common shareholders or
ordinary shares not	subject to	are parties acting in concert as required in "Measures for the
t r a d i n g m o r a t o r i u m	a n d t h a t	Administration of the Takeover of Listed Companies".
between them and the top ten
common shareholders
Explanation on the top ten common	Among the above shareholders, Nanjing FangKai Enterprise
shareholders	involved in securities	Management Co., Ltd. holds 3,789,500 shares of the Company through
margin trading business		credit transactions guarantee securities account and 7,036,501 shares
			through ordinary securities account, with 10,826,001 shares in total.
			Wan Jinchun holds 501,100 shares of the Company through credit
			transactions guarantee securities account and 2,649,051 shares
			through ordinary securities account, with 3,150,151 shares in total. Xu
			Kaidong holds 2,431,359 shares of the Company through credit
			transactions guarantee securities account and 700 shares through
			ordinary securities account, with 2,432,059 shares in total.

NORTHEAST DEVELOPMENTELECTRIC LTD.CO.,

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Note:

1. Based on the information that is publicly available to the Company as at the latest practicable date prior to the publishing of this interim report and within the knowledge of the Directors, there was sufficient public float of the Company's shares.
2. Save as disclosed above, as at 30 June 2019, the Directors were not aware that any person (excluding Directors, Supervisors, or chief executives (if applicable) or senior management of the Company the "Senior Management") had any interests or short positions in the shares or underlying shares (as the case may be) of the Company which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance ("SFO") in Chapter 571 of the Laws of Hong Kong, any interests which were required to be recorded in the register pursuant to Section 336 of the SFO, or was a substantial shareholder of the Company (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules")).
3. During the reporting period, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's shares.
4. There is no provision for pre-emptive rights under the laws of the PRC and the Articles of Association of the Company.
5. As of 30 June 2019, the Company did not issue any convertible securities, options, warrants or any other similar right.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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Chapter 5 PROFILES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

1. Changes in shareholdings of directors, supervisors and senior management
   There was no change in shareholdings during the reporting period.
2. Changes in directors, supervisors and senior management

Name	Position	Type	Date	Reason
Li Tie	Former Director, former Chairman	Resigned	19	August 2019	Work adjustment
Ma Yun	Director	Elected	11	March 2019	Operational needs
Fang Guangrong	Independent Director	Elected	11	March 2019	Operational needs
Qin Jianmin	Former Director	Resigned due to	10	March 2019	Resigned due to
		expiration of term of			expiration of term of
		office			office
Jin Wenhong	Former independent Director	Resigned due to	10	March 2019	Resigned due to
		expiration of term of			expiration of term of
		office			office
Lei Xiao	Former shareholder representative	Resigned	19	August 2019	Work adjustment
	supervisor
Wang Kai	Vice general manager, financial	Appointed	12	March 2019	Operational needs
	manager
Xiong Haocheng	Former vice general manager	Resigned due to	10	March 2019	Resigned due to
		expiration of term of			expiration of term of
		office			office
Xiao Xun	Former vice general manager,	Resigned due to	10	March 2019	Resigned due to
	former financial manager	expiration of term of			expiration of term of
		office			office
Zhao Guogang	Former vice general manager,	Resigned due to	10	March 2019	Resigned due to
	former risk control director	expiration of term of			expiration of term of
		office			office

5.3 Equity interest of directors, supervisors and senior management

Save as disclosed above and to the knowledge of the Directors, senior management and supervisors of the Company, as at 30 June 2019, none of the Directors, senior management and supervisors had any interests or short positions in the shares, underlying shares and/or debentures (as the case may be) of the Company and/or any of its associated corporations (within the meaning of Part XV of the SFO, Chapter 571 of the Laws of Hong Kong) which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which are taken to have by such Directors, senior management and supervisors under provisions of the SFO), or which were required to be recorded in the register maintained by the Company pursuant to Section 352 of the SFO, or which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the "Model Code for Securities Transactions by Directors of Listed Issuers" in Appendix X to the Listing Rules.

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NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

Chapter 6 MANAGEMENT DISCUSSION AND ANALYSIS

Business review in the first half of 2019

In the first half of 2019, global economic growth generally slowed down. The drivers of economic growth in America, Europe and Japan were insufficient, and the growth momentum of emerging economies was on a decline. Due to the lack of robust driving forces for major economies, rising geopolitical uncertainties, and serious disruption on the effective layout of global industry chain by the US unilateral trade protectionism, economic growth across the world was facing more uncertain external environment. In China, overall economy maintained stable. Economic operation is kept within a reasonable level by continuously carrying out the reform and opening up strategy and guaranteeing the implementation of all measures.

In the first half of this year, the machinery industry saw a steady development overall. Despite facing financial difficulties and great pressure by the machinery industry in 2019, catalysts still existed. It is preliminarily estimated that the economic operation will be relatively stable this year, with industrial added value reaching approximately 6%, and operating income, total profit and import and export trade maintaining an appropriate rate of growth.

The Company has primarily engaged in the R&D, design, production and sales businesses of products related to power transmission and transformation equipment in recent years. Our main products are enclosed busbars which are mainly applied to the power system field to enhance transmission capacity of the power transmission line, and support transmission of high power electric energy. Enclosed busbar plays an important role in the power system.

During the reporting period, the power transmission and distribution equipment industry in which the Company operates was affected by macro-economic structural adjustments, leading to relatively excessive industrial capacity and intense market competition. The Company faces increasing operational pressure. In the face of such a complex and difficult situation, all personnel of the Company adhered to the overall work plan, worked diligently to fulfill their duties, and strived to achieve breakthroughs. Under the leadership of the Board, the Company properly tackled various challenges, fully implemented the resolutions passed by the general meeting and the Board, optimized its industrial distribution, enhanced operation management, and steadily advanced various work activities.

During the reporting period, the operating income of the Company amounted to RMB45,163,800, representing a year-on-year increase of RMB30,867,600 or 215.92% compared with the same period of last year, mainly due to the hotel catering business independently developed by Tangyuan Technology being put into operation, which significantly improved the Company's revenue structure.

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Major works during the reporting period are as follows:

1. Risk warning on the removal of delisting for A shares
   According to the Audit Report of Northeast Electric Development Co., Ltd. issued by Ruihua Certified Public Accountants (Special General Partnership) (Ruihua CPAs) on 28 March 2019 (Rui Hua Shen Zi [2019] No. 48190004), the Company recorded an operating income of RMB32,311,485.10, a net profit attributable to shareholders of the listed company of RMB14,596,076.43, and a net asset attributable to shareholders of the listed company of RMB8,619,218.15 in 2018. Meanwhile, considering that the net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss in 2018 and in the first quarter of 2019 was negative, portability of principal business was still weak. Shenzhen Stock Exchange gave the risk warning on the removal of delisting for A shares of the Company from the commencement of trading on 21 August 2019 and implemented other risk warnings.

1. Disposal of major assets
   To optimize the Company's asset structure, minimize the impairment loss of assets, and protect the interests of investors, the Board of the Company determined to dispose of the loss-making New Northeast Electric (Jinzhou) Power Capacitor Co., Ltd (the "NNE Jinzhou PC") on 17 September 2017, which was considered and approved by the Shenzhen Stock Exchange, Hong Kong Stock Exchange, and the second extraordinary general meeting of the Company for 2018. On 14 December 2018, the change of industrial and commercial registration in relation to the equity transfer was completed. The Company disclosed the Report for the Implementation of the Disposal of Major Assets, the Legal Opinions of Grandall Law Firm on the Implementation of the Disposal of Major Assets of the Company and the Independent Financial Advisers' Audit Opinions of Haitong Securities Co., Ltd. for the Implementation of the Disposal of Major Assets of the Company on 6 June 2019.

1. Progress of material litigation
   1. Shenyang Tiexi District State-owned Assets Supervision and Administration Bureau vs. the Company for the payment of allowance for staff.
   On 31 July 2018, the Company received the civil judgment (Liao 01 Min Chu (2017) No. 430) issued by Liaoning Shenyang Municipal Intermediate People's Court (the "Shenyang Intermediate Court"). Shenyang Intermediate Court has given a first-instance judgment on the contract dispute between Shenyang Tiexi District State-owned Assets Supervision and Administration Bureau ("Tiexi SASAB") and the Company, Shenyang High Voltage Switchgear Co., Ltd., and New Northeast Electric (Shenyang) High Voltage Switchgear Co., Ltd. Shenyang Intermediate Court rejected the claim of the plaintiff Tiexi SASAB which requested the defendant - the Company to pay arrears of RMB28.53 million, interests and liquidated damages. The plaintiff Tiexi SASAB has appealed to Shenyang Intermediate Court during the appeal period. In the early December 2018, Liaoning Shenyang Municipal High People's Court accepted the appeal. On 8 May 2019, the case was tried in the second instance. On 21 August 2019, a civil order ((2018) Liao Min Zhong No. 1032) was issued by Liaoning Provincial Higher People's Court, stating that the findings of basic facts in the first-instance judgment were unclear and ruled as follows in accordance with Item 3, Paragraph 1 of Article 170 in the Civil Procedure Law of the People's Republic of China: The civil judgment (Liao 01 Min Chu (2017) No. 430) issued by Liaoning Shenyang Municipal Intermediate People's Court shall be abrogated. A retrial for this case shall be performed by Liaoning Shenyang Municipal Intermediate People's Court. For details, please see the announcement on 28 August 2019.

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NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

2. The legal proceeding involving Fuxin Enclosed Busbar Co., Ltd. (the "Fuxin Busbar"), a wholly-owned subsidiary of the Company.

74.4% of the equity in New Northeast Electric (Shenyang) High-voltage Insulated Switchgears Co., Ltd. (formerly known as Shenyang Suntime High Voltage Electric Co., Ltd.) (the "Underlying Equity") was held by Fuxin Busbar by 22 September 2008. Due to the enforcement of the final judgment made by the Supreme People's Court on 5 September 2008 for the case of China Development Bank (Document (2008) Min Er Zhong Zi No.23) and under the coordination, Fuxin Busbar returned the Underlying Equity to Shenyang High Voltage Switchgear Co., Ltd. ("Shenyang HVS") free of charge, and completed the change of equity registration on 22 September 2008 as required by the local industrial and commercial administration. Therefore, the Underlying Equity held by Fuxin Busbar was returned to Shenyang HVS free of charge. However, according to the enforcement ruling issued by the Supreme People's Court on 31 August 2017 (Document (2017) Zui Gao Fa Zhi Fu No.27), "the fact that the return of the Underlying Equity free of charge under the coordination of NEE cannot be ascertained". Given the failure of Shenyang HVS to pay the outstanding equity transfer consideration of USD16 million constituted a breach of contract, the plaintiff Fuxin Busbar, in order to protect its interests, raised an litigation against the above 2 defendants, namely, Shenyang HVS and Northeast Electric, claiming for the return of the consideration for the transfer of Underlying Equity. The Higher People's Court of Hainan Province accepted the case on 30 November 2018, and published an announcement in connection with its service of documents such as pleadings to Shenyang HVS on 3 January 2019. The case was tried on 21 March 2019 and the written judgment of first instance was received on 20 May 2019. As the defendants did not appeal within the announcement period, a final ruling was achieved for the case, and NEE will not bear joint and several liability. See the Announcement dated on 22 August 2019 for details.

(IV) New issue of H shares

In order to raise funds, expand the shareholder base, and enhance the capital strength of the Company, on 5 April 2017, HNA Hospitality Group (Hong Kong) (the person acting in concert with Beijing Haihongyuan) signed the Subscription Agreement with the listed company, agreeing to purchase 155,830,000 new H shares to be allotted and issued by the Company, at the price of HKD2.40 per share.

Beijing Haihongyuan and its person acting in concert, HNA Hospitality Group (Hong Kong), are both subsidiaries of HNA Group Co., Ltd. The matter was approved at the 2nd Extraordinary General Meeting of 2017, Class Meeting of A Shareholders, and Class Meeting of H Shareholders and was submitted to domestic and foreign regulators for approval according to relevant procedures. Now the matter is under review by the International Cooperation Division of the CSRC.

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ANNOUNCEMENT OF INTERIM RESULTS 2019

1. Expansion of new business
2. 1. Catering service development of hotel public spaces
      Remarkable results have been achieved for proactively promoting business transformation. Hainan Tangyuan Technology Co. LTD. (renamed as Hainan Garden Lane Flight Hotel Management Co. LTD., the "Garden Lane Hotel") a wholly-owned subsidiary of the Company, entered into a three-year lease agreement with eight hotels controlled by related parties to develop hotel related business individually, which has been considered and approved by the 3rd Extraordinary General Meeting of 2018 on 29 October 2018. The relevant business has been gradually implemented since February 2019, and the business has been in operation substantially. An additional income of approximately RMB28.9 million has been recorded in the first half of 2019.
   2. Expansion of after-sales repair services of busbar products
      Fuxin Busbar provides after-sales services of repair and maintenance for busbar products to increase service income and improve profitability by taking advantage of customer resources of existing power stations.

Analysis of Main Business

6.1 Overview

The Company has been primarily engaged in the R&D, design, production and sales businesses of products related to power transmission and transformation equipment in recent years. Our main products are enclosed busbars which are mainly applied to the power system field to enhance transmission efficiency of the power transmission line and support transmission of the high power electric energy. Enclosed busbar plays an important role in the power system. Besides, the hotel catering business independently developed by a subsidiary had been in operation during the reporting period, which significantly improved the Company's revenue structure.

There was no material change in the principal business of the Company during the reporting period.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

6.2 Analysis on changes in major financial information

					Unit: RMB
			Increase/
			decrease
			compared with
	The reporting	The same period	the same period
	period	of last year	of last year	Reason for increase/decrease
Operating incomes	45,163,758.53	14,296,160.44	215.92%	Mainly from catering services
				revenue of newly-added hotel
				public spaces
Operating costs	21,417,642.83	12,156,795.16	76.18%	Mainly from catering services
				cost of newly-added hotel public
				spaces
Selling expenses	17,393,737.95	1,897,146.53	816.84%	Mainly from selling expenses of
				catering	services (including
				labour costs and venue rental) of
				newly-added hotel public spaces
Administrative expenses	11,127,965.17	16,549,369.69	-32.76%	M a i n l y	a t t r i b u t a b l e t o t h e
				stripping of loss-making business
				of our subsidiary and the strict
				control	over administrative
				expenses
Financial expenses	-908,599.98	363,263.42	-350.12%	The interest on deposits of
				monetary capital rise significantly
				as compared with the same
				period
Income tax expenses	520,173.40	0.00	N/A	Mainly attributable to the profits
				from Garden Lane Hotel
Net cash flow from operating	-2,091,919.29	-5,163,724.31	-40.51%	M a i n l y	a t t r i b u t a b l e	t o a
activities				year-on-year decrease in the loss
				on operating profit
Net cash flow from investing	-160,513.12	163,504.28	-198.17%	Equipment purchase	in the
activities				current year
Net cash flow from financing	-2,186,838.29	-20,745.19	10,541.42%	Additional expenses from leased
activities				premises in the current period,
				recognized into cash outflows
				from financing activities	based
				on Lease Criteria
Net increase of cash and cash	-4,438,175.88	-5,017,734.77	-11.55%	Combined effect of all the above
equivalents				factors

Explanation:

The Company's enclosed busbar business reduced losses during the reporting period. Meanwhile, the Company developed its own hotel-related business which began to launch step by step since February 2019. Seven subsidiaries under Garden Lane Hotel have been put into operation, with additional revenue of RMB28.9 million from hotel catering services in the first half of 2019 and have gain profits during the reporting period.

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6.3 Main business composition

						Unit: RMB
				Increase/	Increase/
				decrease in	decrease in	Increase/
				operating	operating	decrease in
				incomes	costs	gross margin
				compared	compared	compared
				with the same	with the same	with the same
	Operating	Operating		period of last	period of last	period of last
	incomes	costs	Gross margin	year	year	year
By industry
Power transmission
and transformation	16,259,273.32	10,077,951.70	38.02%	13.73%	-17.10%	23.06%
Catering services	28,904,485.21	11,339,691.13	60.77%	N/A	N/A	N/A
By product
Enclosed busbars	16,259,273.32	10,077,951.70	38.02%	20.88%	-12.17%	23.33%
Catering services	28,904,485.21	11,339,691.13	60.77%	N/A	N/A	N/A
By region
Northeast	13,580,663.74	5,761,200.72	57.58%	214.95%	77.87%	32.69%
North China	5,020,698.81	2,009,182.61	59.98%	7,319.53%	3,894.61%	34.31%
South China	12,203,522.16	4,098,748.59	66.41%	1,537.04%	1,178.92%	9.40%
Central	1,186,293.10	856,954.92	27.76%	658.79%	626.48%	3.21%		LTD.
Northwest	10,005,201.89	7,210,493.75	27.93%	60.51%	16.51%	27.21%
	CO.,
Southwest	3,167,378.83	1,481,062.24	53.24%	723.20%	471.46%	20.60%
	NORTHEAST ELECTRIC DEVELOPMENT
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ANNOUNCEMENT OF INTERIM RESULTS 2019

6.4 Significant changes in composition of assets

							Unit: RMB
		As at the end of the reporting	As at the end of the same period of
		period	last year
			As a percentage		As a percentage
			of total assets		of total assets	Increase/
		Amount	(%)	Amount	(%)	decrease (%)	Explanation for significant change
	Monetary fund	140,874,668.42	26.06%	40,527,885.96	13.76%	12.30%	Mainly attributable to receipt of
							consideration for sale of the
							subsidiary
	Account receivables	30,517,139.65	5.64%	21,389,237.83	7.26%	-1.62%	Increased accordingly with the
							development of new business
	Inventories	13,179,608.97	2.44%	7,655,335.53	2.60%	-0.16%	Increased accordingly with the
							development of new business
	Long-term equity	22,484,598.52	4.16%	19,607,563.41	6.66%	-2.50%
	investments
	Fixed assets	49,711,031.80	9.19%	13,168,325.10	4.47%	4.72%	Due to the reclassification to fixed
							assets in the second half of last
							year as a result of the relocation of
							Fuxin Busbar
	Construction in progress	1,675,213.67	0.31%	37,848,975.31	12.85%	-12.54%	Due to the reclassification to fixed
							assets in the second half of last
							year as a result of the relocation of
LTD.							Fuxin Busbar
Short-term borrowings	4,500,000.00	0.83%			0.83%	New loans of Fuxin Busbar at the
NORTHEAST ELECTRIC DEVELOPMENT CO.,							end of 2018

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6.5 Assets and liabilities at fair value

							Unit: RMB
		Gain/loss
		on changes	Cumulative
		in fair	changes in	Impairment	Purchase
	Amount at the	value for	fair value	for the	in the	Sale in the
	beginning of the	the current	recorded in	current	current	current	Amount at the end
Item	period	period	equity	period	period	period	of the period
Financial assets
Other equity investments	230,996,496.87						230,996,496.87
Total	230,996,496.87						230,996,496.87
Financial liabilities	0.00						0.00

6.6 Restricted assets as at the end of the reporting period

	Book value at the end of
Item	the year	Reasons for restriction
Monetary fund - other monetary funds	5,588,506.07	Performance guarantee
Fixed assets - buildings	14,018,221.48	Mortgage loan
Intangible assets - land use right	12,606,290.23	Mortgage loan
Total	32,213,017.78

6.7 Disposal of major assets

Details of disposal of major assets are set forth in "(II) Disposal of Major Assets - Business Review in the First Half of 2019".

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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6.8 Analysis of major controlling company and invested company

								Unit: RMB
		Principal	Registered			Operating
Company name	Company type	business	capital	Total asset	Net asset	income	Operating profit	Net profit
Northeast Electric	Subsidiary	Trading	USD20 million	71,427,074.18	56,439,125.67		-38,781.38	-38,781.38
Development (HK)
Co., Ltd.
Gaocai Technology	Subsidiary	Investment	USD1	83,173,280.03	4,864,815.08		-6,992.89	-6,992.89
Co., Ltd.
Shenyang Kaiyi	Subsidiary	E electrical	RMB1 million	54,103,261.28	-11,504,953.12		-2,705.79	-2,705.79
Electric Co., Ltd.		equipment
Fuxin Enclosed	Subsidiary	Enclosed busbars	USD8.5 million	144,623,028.49	6,745,759.70	16,259,273.32	176,993.06	147,926.30
Busbar Co., Ltd.
Hainan Tangyuan	Subsidiary	Public space	RMB50 million	375,651,176.45	202,261,115.25	28,904,485.21	2,502,136.61	1,888,335.62
Technology Co.,		business
Ltd. (renamed as
"Hainan Garden
Lane Flight Hotel
Management Co.
LTD.( 海南逸唐飛行
酒店管理有限公司)")
Northeast Electric	Subsidiary	Electric power	RMB10 million	13,389,946.64	7,018,987.77		-69,617.71	-69,617.71
(Chengdu) Electric		engineering
Engineering Design
Co., Ltd.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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1. Risks faced by the Company and measures
2. 1. Market risks in macro-economic environment
      The industry in which the Company operates is closely connected with the demands of power equipment industry. The prosperity of the industry is also directly pegged with the national economy. Given their significant impact on the Company, we will keep focusing on the impact of industry policies, the national macro economy and the global economy on the industry.
   2. Risk of market competition
      Enclosed busbars produced by the Company is the major income source of its principal activities. Intensifying market competition, such as mutual crackdown, price war, etc., creates an adverse impact on the average profit margin of the industry. The Company will continue to improve its technology, develop new products, strengthen innovation ability, scale up production, and enhance the efficiency of operation and management, along with efforts to prevent steady decrease in operating income, gross margin of products and profitability.
   3. Risk of strategic transformation
      To ensure the sustainable development of the Company in the mid and long term, the Company is seeking for strategic transformation by tapping into prospective sectors. The Company may have the risk of strategic transformation slippage, and even failure, provided that transformation is not carried out for various reasons. The Company will actively promote the related work, while developing relevant businesses to realize strategic transformation gradually through various methods.
3. Prospects for the second half of the year
   Centered on the annual business objectives and work tasks for 2019, the Company's management will strive to achieve business transformation and breakthrough at the operating level by enhancing the operation efficiency and core competitiveness. For details, please see "Prospect of Future Development" set out in the Annual Report 2018. By virtue of seizing opportunities, and making full use of the capital market, the Company will fine tune its main business and operating strategy and actively increase the operating income and profits from relevant businesses in the upstream and downstream of hotel operation, in a bid to enhance the sustained profitability and comprehensive competitive strength of the listed company, promote its development and offer maximum protection to the interests of all shareholders, the minority shareholders in particular.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

6.11 Analysis of financial status of the Company in accordance with Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Working capital and financial resources

The net cash generated from the Group's operating activities for the half year ended 30 June 2019 was approximately RMB-2,091,919.29 (for the half year ended 30 June 2018: net cash generated from operating activities was approximately RMB-5,163,724.31).

As at 30 June 2019, the Group had bank deposits and cash of approximately RMB140,874,668.42 (31 December 2018: RMB145,725,658.23) and bank loans of RMB4,500,000 (31 December 2018: RMB4,500,000).

As of 30 June 2019, the Group had current liabilities of RMB410,808,973.82, non-current liabilities of RMB111,276,507.08, and shareholders' equity attributable to shareholders of the Company of RMB13,055,892.89.

The Group's funding needs have no obvious seasonal patterns.

Capital expenditure

The Group's funds can meet the capital requirements of the capital expenditure plan and daily operations.

Capital structure

The Company's sources of funds are mainly operating cash inflows and loans from substantial shareholders.

As at 30 June 2019, the Group's short-term bank borrowings amounted to RMB4,500,000, and the cash and cash equivalents were RMB140,874,668.42 (31 December 2018: RMB145,725,658.23). Borrowings bear fixed interest rate, and no hedging instruments are hedged.

The Group's policy is to manage its capital to ensure that the Group's entities are able to continue to operate while maximizing returns to shareholders by optimizing the ratio of liabilities and equity. The overall strategy of the Group has remained unchanged from previous years.

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ANNOUNCEMENT OF INTERIM RESULTS 2019

Outlook

Details of the outlook are set out in "Prospects for the second half of the year" of "Management Discussion and Analysis".

Significant investments held and the performance of such investments

Details of significant investments held and the performance of these investments are set out in "Analysis of Major Controlling Company and Invested Company" of "Management Discussion and Analysis".

Significant investments and sales

Details of significant investments and sales are set out in "Disposal of major assets" of "Management Discussion and Analysis".

Segmental information of results

Details of segmental information of results are set out in the "Main Business Composition" section of the "Management Discussion and Analysis".

Assets pledge

Details of assets pledge are set out in the "Restricted assets as at the end of the reporting period" section of the "Management Discussion and Analysis".

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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Plan for major investment or acquisition of capital assets in the future

As of the latest practicable date prior to the publication of this report, the Company has no relevant plans.

Gearing ratio

As of 30 June 2019, the Group's gearing ratio (calculated as total liabilities/total assets) was 96% (31 December 2018: 95%).

Risks of exchange rate fluctuation and any related hedges

The Group's assets and liabilities are denominated in Renminbi, so the risk of exchange rate changes has little impact on the Group. The Group has taken the following measures in reducing the risk of exchange rate fluctuations: (1) increase the export price of products to reduce the risk of exchange rate fluctuations; (2) agree with the other party in advance in case of large export contracts, the risks of exchange rate fluctuations shall be borne by both parties when the exchange rate fluctuation exceeds the limit of agreed scope; (3) strive to sign forward agreements with financial institutions to lock up exchange rates and avoid risks.

Contingent liabilities

As of 30 June 2019, the Company had no material contingent liabilities.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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Chapter 7 Significant Events

1. Personnel changes
   Details of personnel changes are set forth in "Profiles of Directors, Supervisors and Senior Management" of Chapter 5.
2. Staff of the Company and remuneration policy
   As at 30 June 2019, the number of employees on the payroll of the company was 155, compared with 167 by the end of 2018. The remuneration of the employees of the Company includes their salaries, bonuses and other fringe benefits. The Company has different rates of remuneration for different employees, which are determined based on their performance, experience, position and other factors in compliance with the relevant PRC laws and regulations.
3. Corporate governance structure
   At present, the actual corporate governance structure basically complies with the related requirements of securities regulatory authorities.
4. Profit distribution plan and its implementation
   The Company proposes not to distribute cash dividend, issue bonus share, or capitalise from capital reserves.
5. Commitments performed during the reporting period and not yet performed as of the end of the reporting period by De Facto controller, shareholders, connected parties, acquirers of the Company and the Company
   The Company did not have any commitments performed during the reporting period and not yet performed as of the end of the reporting period by De Facto controller, shareholders, connected parties, acquirers of the Company and the Company during the reporting period.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

7.6 Explanation given by the Board of Directors on the relevant situation of the "Non-standard Audit Report" of the previous year

NEE has engaged Ruihua Certified Public Accountants (Special General Partnership) as the auditor of the Company for the year of 2018. Ruihua Certified Public Accountants (Special General Partnership) issued an unqualified audit report for the Company's financial report for the year 2018 with paragraphs describing emphasized events.

1. Matters Relating to the Audit Opinion
   Northeast Electric's net loss after deduction of non-recurring gains and losses in 2018 was RMB39,445,995.65, and as of 31 December 2018, Northeast Electric's current liabilities exceeded its current assets by RMB217,093,262.12. Meanwhile, the Company faced a compensation of RMB272 million for resolved litigation cases. These matters indicate there are major uncertainties regarding the Company as a going concern, however, without any effect on the published audit opinions.

1. Explanation given by the Board of Directors on the relevant situation of the "Non-standard Audit Report" of the previous year
   The Board of Directors holds that the above audit opinion objectively and truthfully reflects the financial position of the Company and its risks as a going concern. The Company issued the "Detailed Explanation Given by the Board of Directors on Matters Relating to the Non-standard Audit Opinion", "The Opinions of Independent Directors on Matters Relating to the Non-standard Audit Opinion" and "Detailed Explanation Given by the Supervisory Committee on Matters Relating to the Non-standard Audit Opinion" after its 2018 financial report was issued.
   In the face of the current market and business environment of the Company, the Board of Directors urged the Company's management to integrate the Company's resources, actively change the business development ideas, and seek industrial restructuring. During the reporting period, the Company maintained stable operations, and various tasks were being effectively implemented. The Company's asset quality was gradually improved, the hotel catering services independently developed by its subsidiary were under operation and management, and its ability to continue operations is qualified during the reporting period.

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ANNOUNCEMENT OF INTERIM RESULTS 2019

7.7 Litigation

1. Shenyang Tiexi District State-owned Assets Supervision and Administration Bureau vs. the Company for the payment of allowance for staff
   Details of dispute on allowance for staff are set forth in "(III) Progress of Material Litigation - Business Review in the First Half of 2019".
2. The legal proceedings involving Fuxin Enclosed Busbar Co., Ltd. (the "Fuxin Busbar"), a wholly-owned subsidiary of the Company
   Details of the litigation are set forth in "(III) Progress of Material Litigation - Business Review in the First Half of 2019".
3. The litigation brought by China Development Bank
   The Supreme People's Court issued an enforcement order ((2017) SPC Enforcement Reply No.27) in August 2017 to reject the reconsideration request made by Northeast Electric and affirm the enforcement order of NHC (2015) Gao Zhi Yi Zi No.52. The enforcement order was final. The case was transferred to the First Intermediate People's Court of Hainan Province on 21 June 2019. The ruling of the case is being implemented and no actual performance has been carried out.
4. The litigation on the application made by Fushun Electric Porcelain Manufacturing Co., Ltd. (the "Fushun Electric Porcelain") for adjudicating Northeast Electric as a person subject to enforcement
   The Company received the Notice of Appearance [(2019) Qiong 96 Min Chu No.381] on adjudicating Northeast Electric as a person subject to enforcement by Fushun Electric Porcelain, the bill of indictment, and other related litigation materials served by the First Intermediate People's Court of Hainan Province on 16 July 2019. At present, relevant departments are preparing for relevant evidence to actively respond to the litigation. As the lawsuit has not yet been heard and the final judgment of the court has not been reached, so the negative impact on the Company's current profits or subsequent profits cannot be determined for the time being. For more details, please refer to the announcement dated 23 July 2019.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

1. Integrity of the Company, its controlling shareholders and de facto controller
   The de facto controller of the Company is Hainan Province Cihang Foundation. Through verifying the information published on CREDITCHINA.GOV.CN, the National Enterprise Credit Information Publicity System, and http://zxgk.court.gov.cn/, Hainan Province Cihang Foundation, the de facto controller of the Company, has not been included in the List of Enterprises with Abnormal Business Operation, the list (blacklist) of enterprises in material non-compliance with the laws or be dishonest or the list of persons subject to enforcement due to dishonesty.
   Hainan Province Cihang Foundation, the de facto controller of the Company, has not carried out external financing activities and has no behavior of dishonesty or breach of contract on debts.
2. Material connected transactions
   There are no material connected transactions in the Company during the reporting period.
3. Controlling shareholders and their connected parties' use of capital of the listed company for non-operating purpose
   Controlling shareholders and their connected parties did not dispose of any capital of the listed company for non-operating use during the reporting period.
4. Significant contracts and their execution
   During the reporting period, the Company did not enter into any material guarantee, trust, contractual or lease arrangement.
5. Guarantees
   As at the end of the reporting period, the actual balance of the external guarantee provided by the Company totaled RMB30.15 million, representing 230.93% of the net assets (absolute value) of the Company by the end of the reporting period. The guarantee company of the Company was Jinzhou Power Capacitors Co., Ltd.
6. Corporate governance
   During the reporting period, the listed issuer strictly complied with the code provisions of Corporate Governance Code as set out in Appendix 14 and had no deviations from the Code, except for the following deviations:
   Code Provision E.1.2 stipulates that the chairman of a board of directors shall attend the annual general meeting.
   For more details on the implementation, please refer to the Corporate Governance Report disclosed in the Annual Report 2018. After the issuance of the annual report, the compliance and execution of the Code by the listed issuer remained unchanged.

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ANNOUNCEMENT OF INTERIM RESULTS 2019

7.14 Model Code for Securities Transactions by Directors

The Company takes the "Model Code for Securities Transactions by Directors of Listed Issuers" (the "Model Code") under the Listing Rules of The Stock Exchange of Hong Kong Limited as a code of conduct for directors' securities transactions; after accepting specific enquiries, all members of the Board of the Company confirmed that they had complied with the Model Code during their tenure as directors of the Company.

The Board has formulated guidelines on the trading of securities of listed companies by "directors and relevant employees". The Board of Directors has given written notices in advance to insiders (including the Company's directors, supervisors, senior management and controlling shareholders, de facto controllers as well as connected parties, as defined in the Listing Rules) stating that purchase and sales of shares of the Company shall comply with relevant regulations and forbidding the insider purchase or sales the shares with inside information: no transactions of the company securities shall be carried out during the price-sensitive time within 30 days, a lock-up period from 29 July 2019 to 29 August 2019, prior to results report.

All directors confirmed that: During the reporting period, they adhered to the guidelines, and neither they nor their connected parties conducted securities transactions of the Company.

The Company has complied with Rules 3.10(1), 3.10(2) and 3.10A of the Listing Rules relating to the appointment of a sufficient number of independent non-executive Directors and at least one independent non-executive Director with appropriate professional qualifications, or accounting or related financial management expertise. The Company has appointed three independent non-executive Directors including one with financial management expertise, of whom the biographical details are set out in the Annual Report 2018 of the Company.

The Company has been in place an audit committee under the Board in accordance with Rule 3.21 of the Listing Rules.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

7.15 Others

Purchase, sale and redemption of shares

During the reporting period, the Company and its subsidiaries did not purchase, sell and redeem any shares of the Company.

Loans to an entity

At the end of the reporting period, neither the Company nor its subsidiaries has granted loans to any entity.

Pledge of shares by controlling shareholder

At the end of the reporting period, the controlling shareholder of the Company did not pledge all or part of its equities in the Company to guarantee the Company's debts or warranty.

Terms included in the loan agreements under which the controlling shareholder shall fulfil specific responsibilities

At the end of the reporting period, the Company and its subsidiaries did not have any terms included in the loan agreements under which the controlling shareholder shall fulfil specific responsibilities.

Breach of loan agreements

At the end of the reporting period, the Company and its subsidiaries did not have any breach of loan agreements.

Provision of financial assistance and guarantee to affiliate companies

At the end of the reporting period, the Company and its subsidiaries did not provide any financial assistance and guarantee to affiliate companies.

Share option scheme

During the reporting period, the Company and its subsidiaries did not have any share option scheme.

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ANNOUNCEMENT OF INTERIM RESULTS 2019

Directors, supervisors and chief executive's interests in the shares, underlying shares and debentures of the Company

For details on Directors, supervisors and chief executives' interests in the shares, underlying shares and debentures of the Company, please see "Equity interest of Directors, supervisors and senior management" under "Profiles of Directors, Supervisors and Senior Management".

Audit of interim results

The unaudited results for the six months ended 30 June 2019 were prepared by the Group in accordance with the PRC GAAP.

The audit committee under the Board of the Company has reviewed and confirmed the interim results announcement of the Company for 2019.

The audit committee has approved the financial accounting principles, standards and methods adopted by the Company for the unaudited interim accounts for the six months ended 30 June 2019.

7.16 Subsequent events

1. The Company convened the seventh meeting of the ninth Board on 29 August 2019, at which the following proposals on appointment and election of employees were considered and approved:
2. 1. Mr. Zhu Jie was elected as the president of the Company.
   2. Mr. Su Weiguo was appointed as the vice general manager of the Company, and he ceased to be the secretary to the Board.
   3. Mr. Ding Jishi was appointed as the secretary to the Board of the Company, and he ceased to be the representative for securities affairs of the Company.

The tenure of the above-mentioned persons starts from the date of approval by the Board and ends at the expiry of the term of the ninth Board on 10 March 2022.

1. Name Change of the Subsidiary
   Hainan Tangyuan Technology CO. LTD has completed the changes in industrial and commercial registration on 23 August 2019 and renamed as Hainan Garden Lane Flight Hotel Management Co. LTD. Please refer to the announcement on 27 August 2019 for further information.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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Chapter 8 F I N A N C I A L S T A T E M E N T S ( P R E P A R E D U N D E R T H E P R C GAAP)

1. CONSOLIDATED BALANCE SHEET

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

			Unit: RMB
	Items	30 June 2019	31 December 2018
	Current assets:
	Cash and cash equivalents	140,874,668.42	145,725,658.23
	Reserved deposits
	Loans to banks and other financial institutions
	Financial assets held for trading
	Financial assets at fair value through current profit or loss
	Derivative financial assets
	Notes receivable
	Accounts receivable	30,517,139.65	21,774,633.39
	Receivables financing
LTD.	Prepayment	2,973,847.85	1,941,493.37
Premiums receivable
CO.,
Reinsurance accounts receivable
DEVELOPMENT
Reinsurance contract reserves receivable
	Other receivables	5,828,062.70	3,063,837.30
	Incl.: Interest receivable	1,100,00.00
ELECTRICNORTHEAST
Dividends receivable

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ANNOUNCEMENT OF INTERIM RESULTS 2019

1. CONSOLIDATED BALANCE SHEET (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

		Unit: RMB
Items	30 June 2019	31 December 2018
Financial assets purchased under agreements to resell
Inventories	13,179,608.97	9,588,337.76
Contract assets
Assets held for sale
Non-current asset due within 1 year
Other current assets	796,655.49	1,039,590.89
Total current assets	194,169,983.08	183,133,550.94
Non-current assets:
Loans and advances
Debt investments
Financial assets available for sale
Other debt investments
Held-to-maturity investments
Long-term receivables
Long-term equity investments	22,484,598.52	22,484,598.52
Other equity instrument investments	230,996,496.87	230,996,496.87
Other non-current financial assets
Investment in real estate
Fixed assets	49,711,031.80	50,136,802.72

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

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ANNOUNCEMENT OF INTERIM RESULTS 2019

1. CONSOLIDATED BALANCE SHEET (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

			Unit: RMB
	Items	30 June 2019	31 December 2018
	Construction in progress	1,675,213.67	2,803,418.80
	Operational biological assets
	Oil and gas assets
	Right-of-use assets	26,099,100.00
	Intangible assets	14,852,265.55	15,029,136.13
	Development expenditures
	Goodwill
	Long-term deferred expenses	650,540.12	529,476.54
	Deferred income tax assets
	Other non-current assets
	Total non-current assets	346,469,246.53	321,979,929.58
	Total assets	540,639,229.61	505,113,480.52
	Current liabilities:
	Short-term borrowings	4,500,000.00	4,500,000.00
	Borrowings from central bank
LTD.
Borrowings from banks and other financial institutions
CO.,
Financial liabilities held for trading
DEVELOPMENT
Financial liabilities at fair value through current profit or loss
	Derivative financial liabilities
	Notes payable
NORTHEAST ELECTRIC	Accounts payable	21,144,604.05	12,221,771.06

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ANNOUNCEMENT OF INTERIM RESULTS 2019

1. CONSOLIDATED BALANCE SHEET (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

		Unit: RMB
Items	30 June 2019	31 December 2018
Receipts in advance	5,670,082.47	2,637,043.59
Proceeds from sale of repurchased financial assets
Deposits from customers and interbank
Deposit for agency security transaction
Deposit for agency security underwriting
Employee compensation payable	1,209,124.77	1,554,344.98
Taxes payable	2,904,779.83	2,253,284.13
Other payables	375,380,382.70	377,060,369.30
Incl.: Interest payable		5,712.50
Dividends payable
Fees and commissions payable
Reinsurance accounts payable
Contract liabilities
Liabilities held for sale
Non-current liabilities due within 1 year
				LTD.
Other current liabilities
				NORTHEAST ELECTRIC DEVELOPMENT CO.,
Total current liabilities	410,808,973.82	400,226,813.06
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ANNOUNCEMENT OF INTERIM RESULTS 2019

1. CONSOLIDATED BALANCE SHEET (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

		Unit: RMB
Items	30 June 2019	31 December 2018
Non-current liabilities:
Provision for insurance contracts
Long-term borrowings
Bonds payable
Incl.: Preferred shares
Perpetual bonds
Lease liabilities	28,750,127.56
Long-term payables
Long-term employee compensation payable
Estimated liabilities	72,099,690.00	72,099,690.00
Deferred revenue	10,426,689.52	10,670,597.50
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities	111,276,507.08	82,770,287.50
Total liabilities	522,085,480.90	482,997,100.56

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

34

ANNOUNCEMENT OF INTERIM RESULTS 2019

1. CONSOLIDATED BALANCE SHEET (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

		Unit: RMB
Items	30 June 2019	31 December 2018
Owner's equity:
Share capital	873,370,000.00	873,370,000.00
Other equity instruments
Incl.: Preferred shares
Perpetual bonds
Capital reserve	1,082,843,699.86	1,074,828,788.67
Less: Treasury stock
Other comprehensive income	-28,666,402.92	-29,012,497.21
Special reserve
Surplus reserve	108,587,124.40	108,587,124.40
Provision for general risk
Retained profits	-2,023,078,528.45	-2,019,154,197.71
Total equity attributable to owners of parent company	13,055,892.89	8,619,218.15
Minority interests	5,497,855.82	13,497,161.81
Total owners' equity	18,553,748.71	22,116,379.96
				NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.
Total liabilities and owners' equity	540,639,229.61	505,113,480.52
		35

ANNOUNCEMENT OF INTERIM RESULTS 2019

2. BALANCE SHEET OF PARENT COMPANY

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

			Unit: RMB
	Items	30 June 2019	31 December 2018
	Current assets:
	Cash and cash equivalents	77,793.50	131,150.21
	Financial assets held for trading
	Financial assets at fair value through current profit or loss
	Derivative financial assets
	Notes receivable
	Accounts receivable
	Receivables financing
	Prepayment	1,668,168.36	1,668,168.36
	Other receivables	258,470,901.48	265,704,605.00
	Incl.: Interest receivable
	Dividend receivable
	Inventories
	Contract assets
	Assets held for sale
LTD.
Non-current asset due within 1 year
CO.,
Other current assets	796,348.11	718,327.52
DEVELOPMENTELECTRICNORTHEAST
Total current assets	261,013,211.45	268,222,251.09

36

ANNOUNCEMENT OF INTERIM RESULTS 2019

2. BALANCE SHEET OF PARENT COMPANY (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

		Unit: RMB
Items	30 June 2019	31 December 2018
Non-current assets:
Debt investments
Financial assets available for sale
Other debt investments
Held-to-maturity investments
Long-term receivables
Long-term equity investments	56,436,473.03	56,436,473.03
Other equity instrument investments
Other non-current financial assets
Investment in real estate
Fixed assets	27,371.86	32,630.16
Construction in progress
Operational biological assets
Oil and gas assets
Right-of-use assets
Intangible assets
Development expenditures
Goodwill
Long-term deferred expenses	285,102.66	529,476.54
Deferred tax assets
Other non-current assets
Total non-current assets	56,748,947.55	56,998,579.73
Total assets	317,762,159.00	325,220,830.82

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

37

ANNOUNCEMENT OF INTERIM RESULTS 2019

2. BALANCE SHEET OF PARENT COMPANY (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

			Unit: RMB
	Items	30 June 2019	31 December 2018
	Current liabilities:
	Short-term borrowings
	Financial liabilities held for trading
	Financial liabilities at fair value through current profit or loss
	Derivative financial liabilities
	Notes payable
	Accounts payable
	Advances from customers	581,743.59	581,743.59
	Contract liabilities
	Employee compensation payable	399,773.79	472,797.28
	Taxes payable	233,782.08	243,342.01
	Other payables	335,179,321.60	337,056,335.75
	Incl.: Interest payable
	Dividends payable
	Liabilities held for sale
LTD.
Non-current liabilities due within 1 year
CO.,
Other current liabilities
DEVELOPMENTELECTRICNORTHEAST
Total current liabilities	336,394,621.06	338,354,218.63

38

ANNOUNCEMENT OF INTERIM RESULTS 2019

2. BALANCE SHEET OF PARENT COMPANY (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

		Unit: RMB
Items	30 June 2019	31 December 2018
Non-current liabilities:
Long-term borrowings
Bonds payable
Incl.: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee compensation payable
Estimated liabilities	72,099,690.00	72,099,690.00
Deferred revenue
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities	72,099,690.00	72,099,690.00
Total liabilities	408,494,311.06	410,453,908.63

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

39

ANNOUNCEMENT OF INTERIM RESULTS 2019

2. BALANCE SHEET OF PARENT COMPANY (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

		Unit: RMB
Items	30 June 2019	31 December 2018
Owners' equity:
Share capital	873,370,000.00	873,370,000.00
Other equity instruments
Incl.: Preferred shares
Perpetual bonds
Capital reserve	995,721,167.46	995,721,167.46
Less: Treasury stock
Other comprehensive income
Special reserve
Surplus reserve	108,587,124.40	108,587,124.40
Retained profits	-2,068,410,443.92	-2,062,911,369.67
Total owners' equity	-90,732,152.06	-85,233,077.81
Total liabilities and owners' equity	317,762,159.00	325,220,830.82

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

40

ANNOUNCEMENT OF INTERIM RESULTS 2019

3. CONSOLIDATED INCOME STATEMENT

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

			Unit: RMB
		Amount for the first	Amount for the first
	Items	half of 2019	half of 2018
I.	Total operating income	45,163,758.53	14,296,160.44
	Incl.: Operating income	45,163,758.53	14,296,160.44
	Interest income
	Premiums earned
	Fee and commission income
II.	Total operating cost	49,176,493.66	31,599,566.86
	Incl.: Operating cost	21,417,642.83	12,156,795.16
	Interest expense
	Fee and commission expense
	Surrender value
	Net payment of insurance claims
	Net provision of insurance reserve
	Premium bonus expenditures
	Reinsurance expenses
	Taxes & surcharges	582,834.93	632,992.06
	Cost of sales	17,393,737.95	1,897,146.53
	Administrative expenses	11,127,965.17	16,549,369.69
	Research and development expenses
	Financial expenses	-908,599.98	363,263.42
	Incl.: Interest expenses	632,355.00	337,360.63
	Interest income	1,600,318.15	20,877.42

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

41

ANNOUNCEMENT OF INTERIM RESULTS 2019

3. CONSOLIDATED INCOME STATEMENT (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

			Unit: RMB
		Amount for the first	Amount for the first
	Items	half of 2019	half of 2018
	Add: Other income	243,907.98
	Investment income ("-" represents loss)
	Incl.: Investment income from associates and joint
	ventures
	Derecognition of income from financial assets at
	amortised cost ("-" represents loss)
	Foreign exchange gains ("-" represents loss)
	Net exposure hedge income("-" represents loss)
	Gains on the changes in fair value ("-" represents
	loss)
	Credit impairment loss ("-" represents loss)	830,784.80
	Loss on asset impairment ("-" represents loss)		-563,525.88
	Gain on disposal of assets ("-" represents loss)
	III. Operational profit ("-" represents loss)	-3,375,129.59	-17,866,932.30
	Add: Non-operating income	15,943.26	3,497,158.08
LTD.	Less: Non-operating expenses	29,365.81	102,873.41
IV. Total profit ("-" represents total loss)	-3,388,552.14	-14,472,647.63
CO.,
Less: Income tax expenses	520,173.40
NORTHEAST ELECTRIC DEVELOPMENT

42

ANNOUNCEMENT OF INTERIM RESULTS 2019

3. CONSOLIDATED INCOME STATEMENT (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

			Unit: RMB
		Amount for the first	Amount for the first
	Items	half of 2019	half of 2018
V. Net profit ("-" represents net loss)	-3,908,725.54	-14,472,647.63
A. Classified by business continuity
1.	Profit or loss from continuing operations ("-" represents
	net loss)	-3,908,725.54	-14,472,647.63
2.	Net profit from discontinued operations ("-" represents
	net loss)
B. Classified by ownership
1.	Net profit attributable to owners of the parent company	-3,924,330.74	-14,119,432.82
2.	Net profit attributable to minority interests	15,605.20	-353,214.81
VI. Net other comprehensive income after tax	346,094.29	362,435.62
Net other comprehensive income attributable to owners of the
parent company after tax	346,094.29	362,435.62
A. Other comprehensive income not reclassifiable
to profit or loss
1.	Remeasurement of changes in defined benefit plans
2.	Other comprehensive income not reclassifiable to profit
	or loss under the equity method
3.	Changes in fair value of other equity instruments
	investment
4.	Changes in the fair value of the Company's own credit
	risk
5.	Others

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

43

ANNOUNCEMENT OF INTERIM RESULTS 2019

3. CONSOLIDATED INCOME STATEMENT (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

				Unit: RMB
			Amount for the first	Amount for the first
		Items	half of 2019	half of 2018
	B. Other comprehensive income reclassifiable to profit or loss	346,094.29	362,435.62
	1.	Other comprehensive income reclassifiable to profit and
		loss under the equity method
	2.	Changes in fair value of other debt investments
	3.	Gain or loss on changes in fair value of financial assets
		available for sale
	4.	Amount of financial assets reclassified into other
		comprehensive income
	5.	Gain or loss on reclassification of held-to-maturity
		investments to financial assets available for sale
	6.	Credit impairment provisions for other debt investments
	7.	Cash flow hedge reserve
	8.	Exchange difference on translation of foreign financial
		statements	346,094.29	362,435.62
	9.	Others
	Net other comprehensive income attributable to minority
LTD.	interests after tax
VII. Total comprehensive income	-3,562,631.25	-14,110,212.01
CO.,
Total comprehensive income attributable to owners of the parent
DEVELOPMENT	company	-3,578,236.45	-13,756,997.20
	Total comprehensive income attributable to the minority
	shareholders	15,605.20	-353,214.81
	VIII.Earnings per share
ELECTRICNORTHEAST
(I) Basic earnings per share	-0.0045	-0.0162
	(II) Diluted earnings per share	-0.0045	-0.0162

44

ANNOUNCEMENT OF INTERIM RESULTS 2019

4. INCOME STATEMENT OF PARENT COMPANY

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

		Unit: RMB
	Amount for the first	Amount for the first
Items	half of 2019	half of 2018
I. Total operating income	0.00	0.00
Less: Operating cost	0.00	0.00
Taxes & surcharges		15.00
Cost of sales
Administrative expenses	5,495,067.51	2,768,391.87
Research and development expenses
Financial expenses	4,006.74	29.83
Incl.: Interest expenses
Interest income	541.67	58.72
Add: Other income
Investment income ("-" represents loss)
Incl.: Investment income from associates and joint
ventures
Derecognition of income from financial assets at
amortised cost ("-" represents loss)
Net exposure hedge income ("-" represents loss)
Gains on the changes in fair value ("-" represents
loss)
Credit impairment loss ("-" represents loss)
Loss on asset impairment ("-" represents loss)
Gain on disposal of assets ("-" represents loss)

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

45

ANNOUNCEMENT OF INTERIM RESULTS 2019

4. INCOME STATEMENT OF PARENT COMPANY (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD

				Unit: RMB
			Amount for the first	Amount for the first
		Items	half of 2019	half of 2018
	II.	Operational profit ("-" represents loss)	-5,499,074.25	-2,768,436.70
		Add: Non-operating income		3,260,981.25
		Less: Non-operating expenses
	III.	Total profit ("-" represents total loss)	-5,499,074.25	492,544.55
		Less: Income tax expenses
	IV. Net profit ("-" represents net loss)	-5,499,074.25	492,544.55
		(I) Net profit from continuing operations ("-" represents net loss)	-5,499,074.25	492,544.55
		(II) Net profit from discontinued operations ("-" represents net
		loss)
	V. Net other comprehensive income after tax
		A. Other comprehensive income not reclassifiable to profit or
		loss
		1. Remeasurement of changes in defined benefit plans
		2. Other comprehensive income not reclassifiable to profit or
		loss under the equity method
LTD.		3. Changes in fair value of other equity instruments
	investment
CO.,
	4. Changes in the fair value of the Company's own credit risk
DEVELOPMENTELECTRICNORTHEAST
	5. Others

46

ANNOUNCEMENT OF INTERIM RESULTS 2019

4. INCOME STATEMENT OF PARENT COMPANY (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD

			Unit: RMB
		Amount for the first	Amount for the first
	Items	half of 2019	half of 2018
B. Other comprehensive income reclassifiable to profit or loss
1.	Other comprehensive income reclassifiable to profit and
	loss under the equity method
2.	Changes in fair value of other debt investments
3.	Gain or loss on changes in fair value of financial assets
	available for sale
4.	Amount of financial assets reclassified into other
	comprehensive income
5.	Gain or loss on reclassification of held-to-maturity
	investments to financial assets available for sale
6.	Credit impairment provisions for other debt investments
7.	Cash flow hedge reserve
8.	Exchange difference on translation of foreign financial
	statements
9.	Others
VI. Total comprehensive income	-5,499,074.25	492,544.55
					LTD.
VII. Earnings per share:
				CO.,
(I) Basic earnings per share
(II) Diluted earnings per share
			NORTHEAST ELECTRIC DEVELOPMENT
			47

ANNOUNCEMENT OF INTERIM RESULTS 2019

5. CONSOLIDATED CASH FLOW STATEMENT

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD

			Unit: RMB
		Amount for the first	Amount for the first
	Items	half of 2019	half of 2018
	I. Cash flow from operating activities:
	Cash received­ from sales of goods or rendering of services	38,986,746.98	23,105,995.20
	Net increase in deposits from customers and interbank
	Net increase in borrowings from central bank
	Net increase in borrowings from other financial institutions
	Cash received from premiums under original insurance
	contracts
	Cash received from reinsurance business, net
	Net increase in policyholders' deposits and investment
	Cash from interests, fees and commissions
	Net increase in interbank borrowings
	Net increase in income from repurchase transactions
	Cash received from securities brokerage services, net
	Tax refunds received
LTD.	Cash received from other operating activities	14,822,608.85	59,776,955.15
Sub-total of cash inflows from operating activities	53,809,355.83	82,882,950.35
NORTHEAST ELECTRIC DEVELOPMENT CO.,

48

ANNOUNCEMENT OF INTERIM RESULTS 2019

5. CONSOLIDATED CASH FLOW STATEMENT (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD

		Unit: RMB
	Amount for the first	Amount for the first
Items	half of 2019	half of 2018
Cash paid to goods purchased and labor service received	17,595,768.96	13,914,755.03
Net increase in customers' loans and advances
Net increase in deposits with central bank and inter-bank
Cash paid for compensation payout under original insurance
contracts
Net increase in financial assets held for trading purposes
Net increase in loans to banks and other financial institutions
Cash paid for interests, fees and commissions
Cash paid for policy dividends
Cash paid to and for employees	11,062,378.49	10,172,007.36
Payments of taxes and surcharges	1,217,294.47	999,421.36
Cash payments to other operating activities	26,025,833.20	62,960,490.91
Sub-total of cash outflows for operating activities	55,901,275.12	88,046,674.66
Net cash flow from operating activities	-2,091,919.29	-5,163,724.31

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

49

ANNOUNCEMENT OF INTERIM RESULTS 2019

5. CONSOLIDATED CASH FLOW STATEMENT (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD

			Unit: RMB
		Amount for the first	Amount for the first
	Items	half of 2019	half of 2018
	II. Cash flow from investing activities:
	Cash from disinvestments
	Cash received from return of investments
	Net cash received from disposal of fixed assets, intangible
	assets and other long-term assets		390,000.00
	Net cash received in disposal of subsidiaries and other
	operating units
	Cash received relating to other investing activities
	Sub-total of cash inflows from investing activities		390,000.00
	Cash paid in purchase/construction of fixed assets, intangible
	assets and other long-term assets	160,513.12	226,495.72
	Cash paid for investment
	Net increase of mortgaged loans
	Net cash paid for subsidiaries and other operating units
	Cash payments to other investing activities
LTD.	Sub-total of cash outflows for investing activities	160,513.12	226,495.72
Net cash flow from investing activities	-160,513.12	163,504.28
NORTHEAST ELECTRIC DEVELOPMENT CO.,

50

ANNOUNCEMENT OF INTERIM RESULTS 2019

5. CONSOLIDATED CASH FLOW STATEMENT (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD

			Unit: RMB
		Amount for the first	Amount for the first
	Items	half of 2019	half of 2018
III.	Cash flow from financing activities:
	Cash received by absorbing investment
	Incl.: cash received by subsidiaries from minority shareholders
	Cash received from borrowings
	Cash received from bonds issued
	Cash received relating to other financing activities
Sub-total of cash inflows from financing activities
	Cash paid for repayments of debts
	Cash paid for distribution of dividends, profits and interests	131,478.61	20,745.19
	Incl.: Dividends and profits paid by subsidiaries to minority
	shareholders
	Cash payments to other financing activities	2,055,359.68
Sub-total of cash outflows for financing activities	2,186,838.29	20,745.19
Net cash flow from financing activities	-2,186,838.29	-20,745.19
IV. Effect of changes in foreign currency rates on cash and
	cash equivalents	1,094.82	3,230.45
V. Net increase in cash and cash equivalents	-4,438,175.88	-5,017,734.77
	Add: Balance of cash and cash equivalents at beginning of
	period	84,724,338.23	8,408,461.77
VI. Balance of cash and cash equivalents at end of period	80,286,162.35	3,390,727.00

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

51

ANNOUNCEMENT OF INTERIM RESULTS 2019

6. CASH FLOW STATEMENT OF PARENT COMPANY

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD

				Unit: RMB
			Amount for the first	Amount for the first
		Items	half of 2019	half of 2018
	I.	Cash flow from operating activities:
		Cash received from sales of goods or rendering of services
		Tax refunds received
		Cash received from other operating activities	7,511,146.05	46,239,201.72
	Sub-total of cash inflows from operating activities	7,511,146.05	46,239,201.72
		Cash paid to goods purchased and labor service received
		Cash paid to and for employees	4,138,706.20	2,264,595.24
		Payments of taxes and surcharges		1,677.30
		Cash payments to other operating activities	3,425,100.17	43,980,519.78
	Sub-total of cash outflows for operating activities	7,563,806.37	46,246,792.32
		Net cash flow from operating activities	-52,660.32	-7,590.60
	II.	Cash flow from investing activities:
		Cash from disinvestments
		Cash received from return of investments
LTD.
	Net cash received from disposal of fixed assets, intangible
	assets and other long-term assets
CO.,
	Net cash received in disposal of subsidiaries and other
DEVELOPMENTELECTRICNORTHEAST		operating units
		Cash received relating to other investing activities
	Sub-total of cash inflows from investing activities

52

ANNOUNCEMENT OF INTERIM RESULTS 2019

6. CASH FLOW STATEMENT OF PARENT COMPANY (Continued)

Prepared by: NORTHEAST ELECTRIC DEVELOPMENT CO., LTD

		Unit: RMB
	Amount for the first	Amount for the first
Items	half of 2019	half of 2018
Cash paid in purchase/construction of fixed assets, intangible
assets and other long-term assets
Cash paid for investment
Net cash paid for subsidiaries and other operating units
Cash payments to other investing activities
Sub-total of cash outflows for investing activities
Net cash flow from investing activities
III. Cash flow from financing activities:
Cash received by absorbing investment
Cash received from borrowings
Cash received from bonds issued
Cash received relating to other financing activities
Sub-total of cash inflows from financing activities
Cash paid for repayments of debts
Cash paid for distribution of dividends, profits and interests
Cash payments to other financing activities
Sub-total of cash outflows for financing activities
Net cash flow from financing activities
IV. Effect of changes in foreign currency rates on cash and
cash equivalents	-696.38
V. Net increase of cash and cash equivalents	-53,356.70	-7,590.60
Add: Balance of cash and cash equivalents at beginning of
period	131,150.21	20,119.58
VI. Balance of cash and cash equivalents at end of period	77,793.51	12,528.98

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

53

54	NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Amount for the current period

Unit: RMB

										Amount for the first half of 2019
									Equity attributable to shareholders of parent company
				Other equity instruments				Other								Total
									Less: Treasury	comprehensive			Provision for					shareholders'
Items		Share capital	Preferred		Perpetual		Others	Capital reserve	stock	income	Special reserve	Surplus reserve	general risks	Retained profits	Others	Subtotal	Minority interests	equity
I. Balance at end of last year	873,370,000.00						1,074,828,788.67		-29,012,497.21		108,587,124.40		-2,019,154,197.71		8,619,218.15	13,497,161.81	22,116,379.96
Add: Changes in accounting policies
Corrections to previous errors
Effect of business combination under common control
Others
II. Balance at beginning of year	873,370,000.00						1,074,828,788.67		-29,012,497.21		108,587,124.40		-2,019,154,197.71		8,619,218.15	13,497,161.81	22,116,379.96
III. Changes in the current period ("-" represents loss)							8,014,911.19		346,094.29				-3,924,330.74		4,436,674.74	-7,996,816.08	-3,562,631.25
(I) Total comprehensive income									346,094.29				-3,924,330.74		-3,578,236.45	15,605.20	-3,562,631.25
(II) Increase/Decrease of capital from shareholders							8,014,911.19								8,014,911.19	-8,014,911.19
1.	Ordinary shares invested by shareholders
2.	Capital contributed by holders of other equity
	instrument
3.	Shares payment taken into shareholder's equity																-8,014,911.19
4.	Others							8,014,911.19
(III) Distribution of profit
1.	Appropriation of surplus reserves
2.	Appropriation of general risk provision
3.	Distribution to shareholders
4.	Others

2019 RESULTS INTERIM OF ANNOUNCEMENT

7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)

Amount for the current period (Continued)

Unit: RMB

Amount for the first half of 2019

Equity attributable to shareholders of parent company

Other equity instruments

Other

Total

Less: Treasury

comprehensive

Provision for

shareholders'

Items

Share capital

Preferred

Perpetual

Others

Capital reserve

stock

income

Special reserve

Surplus reserve

general risks

Retained profits

Others

Subtotal

Minority interests

equity

(IV) Transfer within equity

1.

Transfer-in from capital reserves

2.

Transfer-in from surplus reserves

3.

Loss covered by surplus reserves

4.

Changes in defined benefit plan transferred to retained

earnings

5.

Other comprehensive income transferred to retained

earnings

6.

Others

(V) Special reserves

1.

Appropriation of the special reserve

2.

Usage of the special reserves

(VI) Others

IV. Balance at end of Period

873,370,000.00

1,082,843,699.86

-28,666,402.92

108,587,124.40

-2,023,078,528.45

13,055,892.89

5,497,855.82

18,553,748.71

2019 RESULTS INTERIM OF ANNOUNCEMENT

55

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

56	NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)

A mount for the previous period

Unit: RMB

										Amount for the first half of 2018
									Equity attributable to shareholders of parent company
				Other equity instruments				Other								Total
									Less: Treasury	comprehensive			Provision for					shareholders'
	Items	Share capital	Preferred		Perpetual		Others	Capital reserve	stock	income	Special reserve	Surplus reserve	general risks	Retained profits	Others	Subtotal	Minority interests	equity
I. Balance at end of last year	873,370,000.00						883,422,403.92		-29,869,066.75		108,587,124.40		-2,034,142,303.59		-198,631,842.02	3,990,824.31	-194,641,017.71
Add: Changes in accounting policies
	Corrections to previous errors
	Effect of business combination under common control
	Others
II. Balance at beginning of year	873,370,000.00						883,422,403.92		-29,869,066.75		108,587,124.40		-2,034,142,303.59		-198,631,842.02	3,990,824.31	-194,641,017.71
III. Changes in the current period ("-" represents loss)									362,435.62				-14,119,432.82		-13,756,997.20	-353,214.81	-14,110,212.01
(I) Total comprehensive income									362,435.62				-14,119,432.82		-13,756,997.20	-353,214.81	-14,110,212.01
(II) Increase/Decrease of capital from shareholders
1.	Ordinary shares invested by shareholders
2.	Capital contributed by holders of other equity
	instrument
3.	Shares payment taken into shareholder's equity
4.	Others
(III) Distribution of profit
1.	Appropriation of surplus reserves
2.	Appropriation of general risk provision
3.	Distribution to shareholders
4.	Others

2019 RESULTS INTERIM OF ANNOUNCEMENT

7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)

A mount for the previous period (Continued)

Unit: RMB

Amount for the first half of 2018

Equity attributable to shareholders of parent company

Other equity instruments

Other

Total

Less: Treasury

comprehensive

Provision for

shareholders'

Items

Share capital

Preferred

Perpetual

Others

Capital reserve

stock

income

Special reserve

Surplus reserve

general risks

Retained profits

Others

Subtotal

Minority interests

equity

(IV) Transfer within equity

1.

Transfer-in from capital reserves

2.

Transfer-in from surplus reserves

3.

Loss covered by surplus reserves

4.

Changes in defined benefit plan transferred to retained

earnings

5.

Other comprehensive income transferred to retained

earnings

6.

Others

(V) Special reserves

1.

Appropriation of the special reserve

2.

Usage of the special reserves

(VI) Others

IV. Balance at end of Period

873,370,000.00

883,422,403.92

-29,506,631.13

108,587,124.40

-2,048,261,736.41

-212,388,839.22

3,637,609.50

-208,751,229.72

2019 RESULTS INTERIM OF ANNOUNCEMENT

57

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

58	NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

8. STATEMENT OF CHANGES IN EQUITY OF PARENT COMPANY

Amount for the current period

Unit: RMB

Amount for the first half of 2019

Other equity instruments

Other comprehensive

Total shareholders'

Items

Share capital

Preferred

Perpetual

Others

Capital reserve

Less: Treasury stock

income

Special reserve

Surplus reserve

Retained profits

Others

equity

I. Balance at end of last year

873,370,000.00

995,721,167.46

108,587,124.40

-2,062,911,369.67

-85,233,077.81

Add: Changes in accounting policies

Corrections to previous errors

Others

II. Balance at beginning of year

873,370,000.00

995,721,167.46

108,587,124.40

-2,062,911,369.67

-85,233,077.81

III. Changes in the current period ("-" represents loss)

-5,499,074.25

-5,499,074.25

(I) Total comprehensive income

-5,499,074.25

-5,499,074.25

(II) Increase/Decrease of capital from shareholders

1.

Ordinary shares invested by shareholders

2.

Capital contributed by holders of other equity instrument

3.

Shares payment taken into shareholder's equity

4.

Others

(III) Distribution of profit

1.

Appropriation of surplus reserves

2.

Distribution to shareholders

3.

Others

2019 RESULTS INTERIM OF ANNOUNCEMENT

8. STATEMENT OF CHANGES IN EQUITY OF PARENT COMPANY (Continued)

Amount for the current period (Continued)

Unit: RMB

Amount for the first half of 2019

Other equity instruments

Other comprehensive

Total shareholders'

Items

Share capital

Preferred

Perpetual

Others

Capital reserve

Less: Treasury stock

income

Special reserve

Surplus reserve

Retained profits

Others

equity

(IV) Transfer within equity

1.

Transfer-in from capital reserves

2.

Transfer-in from surplus reserves

3.

Loss covered by surplus reserves

4.

Changes in defined benefit plan transferred to retained

earnings

5.

Other comprehensive income transferred to retained

earnings

6.

Others

(V) Special reserves

1.

Appropriation of the special reserve

2.

Usage of the special reserves

(VI) Others

IV. Balance at end of Period

873,370,000.00

995,721,167.46

108,587,124.40

-2,068,410,443.92

-90,732,152.06

2019 RESULTS INTERIM OF ANNOUNCEMENT

59

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

60	NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

8. STATEMENT OF CHANGES IN EQUITY OF PARENT COMPANY (Continued)

Amount for the previous period

Unit: RMB

Amount for the first half of 2018

Other equity instruments

Other

Total

Less: Treasury

comprehensive

shareholders'

Items

Share capital

Preferred

Perpetual

Others

Capital reserve

stock

income

Special reserve

Surplus reserve

Retained profits

Others

equity

I. Balance at end of last year

873,370,000.00

995,721,167.46

108,587,124.40

-2,053,148,900.56

-75,470,608.70

Add: Changes in accounting policies

Corrections to previous errors

Others

II. Balance at beginning of year

873,370,000.00

995,721,167.46

108,587,124.40

-2,053,148,900.56

-75,470,608.70

III. Changes in the current period ("-" represents loss)

492,544.55

492,544.55

(I) Total comprehensive income

492,544.55

492,544.55

(II) Increase/Decrease of capital from shareholders

1.

Ordinary shares invested by shareholders

2.

Capital contributed by holders of other equity

instrument

3.

Shares payment taken into shareholder's equity

4.

Others

(III) Distribution of profit

1.

Appropriation of surplus reserves

2.

Distribution to shareholders

3.

Others

2019 RESULTS INTERIM OF ANNOUNCEMENT

61

8. STATEMENT OF CHANGES IN EQUITY OF PARENT COMPANY (Continued)

Amount for the previous period (Continued)

Unit: RMB

Amount for the first half of 2018

Other equity instruments

Other

Total

Less: Treasury

comprehensive

shareholders'

Items

Share capital

Preferred

Perpetual

Others

Capital reserve

stock

income

Special reserve

Surplus reserve

Retained profits

Others

equity

(IV) Transfer within equity

1.

Transfer-in from capital reserves

2.

Transfer-in from surplus reserves

3.

Loss covered by surplus reserves

4.

Changes in defined benefit plan transferred to

retained earnings

5.

Other comprehensive income transferred to

retained earnings

6.

Others

(V) Special reserves

1.

Appropriation of the special reserve

2.

Usage of the special reserves

(VI) Others

IV. Balance at end of Period

873,370,000.00

995,721,167.46

108,587,124.40

-2,052,656,356.01

-74,978,064.15

Head: Zhu Jie

Chief financial officer: Wang Kai

Chief accounting officer: Xing Liwen

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

2019 RESULTS INTERIM OF ANNOUNCEMENT

ANNOUNCEMENT OF INTERIM RESULTS 2019

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

Explanation

8.1 Explanation of changes in accounting policy, accounting estimates and accounting methods in comparison with the financial reports of the previous year

Contents and reasons of changes in	Examination and
accounting policy	approval procedure	Remark
The Ministry of Finance (MOF) issued the	S u c h c h a n g e	i n	As the relevant leases have been
A c c o u n t i n g S t a n d a r d s f o r B u s i n e s s	accounting policy	has	implemented and completed in
Enterprises No.21 - Leases (hereinafter	been	approved	at	the	February 2019, no adjustment would
referred to as the "New Lease Standard")	fourth	meeting	of	the	b e r e q u i r e d p u r s u a n t t o t h e
based on Cai Kuai [2018] No.35 on 7	ninth Board held on 29	provisions for the transitional period
December 2018, starting on 1 January 2019.	April 2019.			on retained earnings and amount of
The Company has applied the relevant					o t h e r i t e m s i n t h e f i n a n c i a l
standards in its preparation of the interim					statements at the beginning of the
financial statements of 2019.					year in which the standard is first
					applied.
On 30 April 2019, the MOF issued the	S u c h c h a n g e	i n	Please see Explanation for details.
"Notice on Revising and Issuing the Format	accounting policy	has
of 2019 Financial Statements for General	been	approved	at	the
Enterprises" (Cai Kuai No . 6 [2019])	sixth	meeting	of	the
(hereinafter referred to as the "New Format	ninth Board held on 26
of Financial Statements") which revised the	June 2019.
format of financial statements for general
enterprises. The Company has applied the
relevant standards and treated according to
the provisions for the transitional period in its
p r e p a r a t i o n o f t h e i n t e r i m f i n a n c i a l
statements of 2019.

Notes:

Explanation:

On 30 April 2019, the MOF issued the "Notice on Revising and Issuing the Format of 2019 Financial Statements for General Enterprises" (Cai Kuai No. 6 [2019]) which revised the format of financial statements for general enterprises. The report items and the amount importantly impacted by the retroactive restatement due to the changes in format of financial statements of the Group on 31 December 2018 are listed as follows:

62

ANNOUNCEMENT OF INTERIM RESULTS 2019

Consolidated statement:

	Item and amount of the previous report		Item and amount of the current report
	Notes receivable and accounts	30,517,139.65		Notes receivable
	receivable
			Accounts receivable	30,517,139.65
	Notes payable and accounts	22,794,293.57		Notes payable
	payable
			Accounts payable	22,794,293.57
	Financial statement of parent company:
	Item and amount of the previous report		Item and amount of the current report
	Notes receivable and accounts			Notes receivable
	receivable
			Accounts receivable
	Notes payable and accounts			Notes payable
	payable
			Accounts payable
8.2	Description of retrospective restatement	of major accounting errors in the
	reporting period
	There was no retrospective restatement of major accounting errors in the reporting period.
8.3	Description of changes in the coverage	of the consolidated statements as
	compared to the financial report for the previous year
	There is no change in the coverage of the consolidated statements as compared to the
	financial report for the previous year.					NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.
					63

ANNOUNCEMENT OF INTERIM RESULTS 2019

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

8.4 Others

1. Business distribution
   All of the Group's incomes and profits were from the domestic market, so the Group's management considers there is no need to prepare the divisional statement.
2. Taxation
   Main taxation category and tax rate of the Company

Category	Tax Base	Tax Rate
VAT	Taxable income after offsetting deductible input	16%, 13%, 6%
	VAT.
Urban construction &	Turnover tax payable.	7%
maintenance tax
Corporate income tax	Taxable income payable.	25%, 16.5%
Educational surcharge	Turnover tax payable.	5%

Notes:

1. For Northeast Electric (Hong Kong) Limited, a wholly owned subsidiary of the Company registered in HKSAR of the PRC, the profits tax rate is 16.5%.
2. Great Talent Technology Limited is a wholly owned subsidiary, registered in the British Virgin Islands. No corporate income tax is imposed on it.
3. Corporate income tax of Shenyang Kaiyi Electric Co., Ltd., a subsidiary of the Company, is collected in a way of verification.

8.4.3 Net profit

		The same period of
	The reporting period	last year
Net profit attributable to shareholders of parent
company (RMB)	-3,924,330.74	-14,119,432.82

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ANNOUNCEMENT OF INTERIM RESULTS 2019

8.4.4 Earnings per share

		The same period of
	The reporting period	last year
Basic earnings per share (RMB/share)	-0.0045	-0.0162
Diluted earnings per share (RMB/share)	-0.0045	-0.0162

1. Dividends
   No dividends were paid or proposed for the six months ended 30 June 2019 (for the six months ended 30 June 2018: Nil), and no dividend was proposed from the end of the reporting period.
2. Share capital

		The same period
	The reporting period	of last year
Total share capital (RMB)	873,370,000.00	873,370,000.00

8.5 Publication of the interim report on the internet websites of The Stock Exchange of Hong Kong Limited and the Company

All information about the interim report as required by Appendix 16 to the Listing Rules will be published on the Hong Kong Stock Exchange's website (http://www.hkex.com.hk) and the Company's website (http://www.nee.com.cn) in due course.

By order of the Board

Zhu Jie

Chairman

Haikou, Hainan Province, the PRC

29 August 2019

As at the date of the Announcement, the Board of Directors comprises of five executive directors, namely Mr. Zhu Jie, Mr. Li Rui, Ms. Ma Yun, Mr. Bao Zongbao and Mr. Su Weiguo; and three independent non-executive directors, namely Mr. Li Ming, Mr. Qian Fengsheng and Mr. Fang Guangrong.

NORTHEAST ELECTRIC DEVELOPMENT CO., LTD.

65