CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE STOCK EXCHANGE AND GEM, RESPECTIVELY) GEM GEM GEM has been positioned as a mark

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1 CHONG SING HOLDINGS FINTECH GROUP LIMITED (Formerly known as Credit China FinTech Holdings Limited ) (Incorporated in the Cayman Islands with limited liability ) Stock Code : 8207 INTERIM REPORT 2018

2 CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE STOCK EXCHANGE AND GEM, RESPECTIVELY) GEM GEM GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. GEM Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM. GEMGEM GEM Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this report. This report, for which the directors (the Directors ) of Chong Sing Holdings FinTech Group Limited (the Company ) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the GEM Listing Rules ) for the purposes of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this report is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this report misleading. GEM GEM

3 CONTENTS Corporate Information 3 Financial Highlights 6 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 7 Condensed Consolidated Statement of Financial Position 9 Condensed Consolidated Statement of Changes in Equity 11 Condensed Consolidated Statement of Cash Flows 12 Notes to the Condensed Consolidated Financial Statements 13 Management Discussion and Analysis 40 Other Information 63 In the event of any error or omission in the Chinese translation of this interim report, the English text shall prevail. 2 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

4 CORPORATE INFORMATION Directors Executive Directors Mr. Phang Yew Kiat (Vice-chairman and Chief Executive Officer) Mr. Chng Swee Ho Mr. Sheng Jia Mr. Yang Jianhui Non-executive Directors Mr. Li Mingshan (Chairman) Mr. Li Gang Mr. Zhang Zhenxin Ms. Zhou Youmeng Mr. Wong Sai Hung (Resigned on 5 February 2018) Independent Non-executive Directors Mr. Ge Ming Dr. Ou Minggang Dr. Wang Songqi Dr. Yin Zhongli Company Secretary Mr. Kwok Siu Man (A fellow of The Hong Kong Institute of Chartered Secretaries) Compliance Officer Mr. Chng Swee Ho Authorised Representatives Mr. Phang Yew Kiat Mr. Kwok Siu Man Audit Committee Mr. Ge Ming (Chairman) Dr. Ou Minggang Dr. Wang Songqi Dr. Yin Zhongli

5 CORPORATE INFORMATION (Continued) Nomination Committee Dr. Ou Minggang (Chairman) Mr. Ge Ming Dr. Wang Songqi Dr. Yin Zhongli Remuneration Committee Dr. Yin Zhongli (Chairman) Mr. Ge Ming Dr. Ou Minggang Dr. Wang Songqi PRINCIPAL BANKERS China Merchants Bank Hong Kong Branch 21/F, Bank of America Tower 12 Harcourt Road Central, Hong Kong China Construction Bank Corporation (Shanghai Nanjing West Road Sub-branch) No , Nanjing West Road Shanghai, The People s Republic of China INDEPENDENT AUDITOR SHINEWING (HK) CPA Limited Certified Public Accountants 43/F, Lee Garden One 33 Hysan Avenue Causeway Bay, Hong Kong REGISTERED OFFICE Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY Cayman Islands Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY Cayman Islands 4 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

6 CORPORATE INFORMATION (Continued) PRINCIPAL PLACE OF BUSINESS IN HONG KONG Rooms , Level 35 Two Pacific Place 88 Queensway Hong Kong HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN CHINA Room E-F, 28F, Mirae Asset Tower No. 166 Lujiazui Ring Road Pudong, Shanghai The People s Republic of China Postal Code E-F PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE IN CAYMAN ISLANDS SMP Partners (Cayman) Limited 3rd Floor, Royal Bank House 24 Shedden Road P.O. Box 1586 Grand Cayman, KY Cayman Islands SMP Partners (Cayman) Limited 3rd Floor, Royal Bank House 24 Shedden Road P.O. Box 1586 Grand Cayman, KY Cayman Islands HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE Tricor Investor Services Limited Level 22, Hopewell Centre 183 Queen s Road East Hong Kong WEBSITE STOCK CODE INVESTOR RELATIONS CONTACT ir@csfgroup.com ir@csfgroup.com

7 FINANCIAL HIGHLIGHTS First Half of 2018 For the six months ended 30 June Period-onperiod changes (Unaudited) (Unaudited) RMB 000 RMB 000 Operating Results Turnover 1,342,048 1,981, % Profit for the period 306, , % Profit attributable to owners of the Company 308, , % Non-GAAP profit attributable to owners of the Company 330, , % RMB RMB Earnings per share basic 1.37 cents 2.60 cents -47.3% diluted 1.32 cents 2.47 cents -46.6% Non-GAAP earnings per share basic 1.47 cents 1.57 cents -6.4% diluted 1.41 cents 1.49 cents -5.4% 6 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

8 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the three months and six months ended 30 June 2018 For the three months ended 30 June For the six months ended 30 June (Unaudited) (Unaudited) (Unaudited) (Unaudited) Notes RMB 000 RMB 000 RMB 000 RMB 000 Turnover 3 738,178 1,258,897 1,342,048 1,981,812 Interest income 3 101, , , ,116 Interest expenses 6 (86,435) (93,691) (171,651) (187,738) Net interest income 14,700 13,728 30,164 39,378 Financial consultancy service income 3 29,610 22,860 72,238 33,992 Third party payment service income 3 95,206 82, , ,716 Online investment and technology-enabled lending service income 3 323,139 1,015, ,236 1,490,191 Transaction verification service income 3 140, ,504 Gain on transfer of rights on interest on loan receivables 3 30,461 Others 3 49,054 30,623 69,866 55, ,743 1,165,206 1,170,397 1,794,074 Other income 5 44,740 8,330 52,440 11,692 Other gains or losses 5 254, ,042 (2,009) Administrative and other operating expenses (620,197) (706,984) (1,253,576) (1,070,465) Share-based payment expenses (20,401) (46,012) (36,991) (91,510) Share of results of associates 28,056 22,779 48,800 42,642 Gain on disposal of subsidiaries 42, ,098 42, ,098 Gain on deemed disposal of subsidiaries 2,387 3,303 Gain on disposal of hashing power 232,669 Change in fair value of preference share of a subsidiary (25,736) (100,549) (976) (100,549) Change in fair value of crypto currencies 4,632 (118,117) Profit before tax 7 360, , , ,276 Income tax 8 (67,030) (187,424) (82,501) (266,527) Profit for the period 292, , , ,

9 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Continued) For the three months and six months ended 30 June 2018 For the three months ended 30 June For the six months ended 30 June (Unaudited) (Unaudited) (Unaudited) (Unaudited) Notes RMB 000 RMB 000 RMB 000 RMB 000 Other comprehensive income (expense) for the period Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations 32,125 (25,309) (16,491) (39,448) Share of other comprehensive expense of associates 11,806 (2,518) Change in fair value of financial assets through other comprehensive income (135,551) 6,693 (135,551) 6,693 Other comprehensive income (expense) for the period, net of income tax Total comprehensive income for the period (91,620) (18,616) (154,560) (32,755) 201, , , ,994 Profit for the period attributable to: Owners of the Company 257, , , ,921 Non-controlling interests 35, ,720 (1,768) 161, , , , ,749 Total comprehensive income for the period attributable to: Owners of the Company 164, , , ,308 Non-controlling interests 36, ,650 (1,659) 161,686 Earnings per share , , , ,994 RMB RMB RMB RMB Basic 1.14 cents 2.13 cents 1.37 cents 2.60 cents Diluted 1.10 cents 2.00 cents 1.32 cents 2.47 cents 8 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

10 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2018 As at 30 June 2018 (Unaudited) As at 31 December 2017 (Audited) Notes RMB 000 RMB 000 Non-current assets Plant and equipment 195, ,009 Investment property 576,000 Intangible assets 390, ,831 Pledged bank deposits 282, ,468 Goodwill 11 1,133, ,382 Available-for-sale investments 429,511 Financial assets through other comprehensive income ,741 Interests in associates 1,292,078 1,457,723 Interests in joint ventures 3,922,934 4,228,924 Current assets Inventories 38,373 10,465 Trade receivables , ,369 Loan receivables 13 3,880,067 3,453,454 Prepayments and other receivables 13 1,674,041 1,256,108 Amounts due from joint ventures 6,419 4,666 Amounts due from associates 476,719 9,004 Amounts due from related companies 190, ,724 Financial assets through profit or loss ,099 Held for trading investments 219, ,082 Crypto currencies 3, ,921 Bank balance trust account ,724 1,226,622 Bank balances and cash 818, ,249 9,213,531 8,094,664 Current liabilities Accruals and other payables 1,167, ,274 Funds payable and amounts due to customers ,724 1,226,622 Amounts due to non-controlling shareholders 1,549 1,541 Amounts due to related companies 181, ,813 Convertible bonds , ,840 Corporate bonds 175,214 Borrowings 16 1,781,021 1,644,958 Preference share of a subsidiary 119, ,997 Provision for financial guarantee 225,553 Other financial liabilities 536, ,000 Income tax payables 296, ,832 5,636,762 5,455,430 Net current assets 3,576,769 2,639,234 Total assets less current liabilities 7,499,703 6,868,

11 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued) As at 30 June 2018 As at 30 June 2018 (Unaudited) As at 31 December 2017 (Audited) Notes RMB 000 RMB 000 Non-current liabilities Corporate bonds 362,890 61,732 Convertible bonds ,026 1,035,305 Borrowings , ,200 Deferred tax liabilities 100,336 89,505 1,085,052 1,301,742 Net assets 6,414,651 5,566,416 Capital and reserves Share capital , ,512 Reserves 5,599,069 4,831,636 Equity attributable to owners of the Company 5,984,487 5,205,148 Non-controlling interests 430, ,268 Total equity 6,414,651 5,566, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

12 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 30 June 2018 Attributable to owners of the Company Share capital Share premium Statutory reserve Retained profits Investment revaluation reserve Exchange reserve Sharebased payment reserve Capital reserve Special reserve Equity component of convertible bonds Consideration payables reserve Non controlling interests Total equity Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 At 1 January 2018 (audited) 373,512 3,492,300 51,119 1,677,297 (7,118) 275,842 (851,657) 40, ,853-5,205, ,268 5,566,416 Effect on adoption of HKFRS , , ,867 At 1 January 2018 (Unaudited) (Restated) 373,512 3,492,300 51,119 1,949,164 (7,118) 275,842 (851,657) 40, ,853 5,477, ,268 5,838,283 Profit for the period 308, ,715 (1,768) 306,947 Other comprehensive income (expense) exchange differences on translating foreign operations (16,600) (16,600) 109 (16,491) share of other comprehensive expense of associates (2,518) (2,518) (2,518) change in fair value of financial assets through other comprehensive income Total comprehensive income (expense) for the period (135,551) (135,551) (135,551) 308,715 (135,551) (19,118) 154,046 (1,659) 152,387 Issue of shares upon exercise of share options 1,707 55,908 (10,825) 46,790 46,790 Lapse of share options 963 (963) Recognition of equity-settled share-based payments 36,991 36,991 36,991 Appropriation to statutory reserve funds 32,692 (32,692) Conversion of convertible bonds 10, ,037 (25,591) 269, ,645 Acquisition of subsidiaries (Note 19) 19 70,555 70,555 At 30 June 2018 (unaudited) 385,418 3,833,245 83,811 2,226,150 (135,551) (26,236) 301,045 (851,657) 40, ,262 5,984, ,164 6,414,651 At 1 January 2017 (audited) 358,259 2,920,079 36, ,660 72, ,279 (591,729) 40, , ,502 4,195,843 45,737 4,241,580 Profit for the period 566, , , ,749 Other comprehensive income (expense) exchange differences on translating foreign operations (39,306) (39,306) (142) (39,448) change in fair value of available-for-sale investments 6,693 6,693 6,693 Total comprehensive income (expense) for the period 566,921 6,693 (39,306) 534, , ,994 Issue of shares upon exercise of share options 1,169 34,098 (7,565) 27,702 27,702 Recognition of equity-settled share-based payments 91,510 91,510 91,510 Acquisition of subsidiaries 16,087 16,087 Acquisition of available-for-sale investments 2, , , ,714 Issue of consideration shares 4, ,206 (155,502) Deemed disposal of subsidiaries (3) (3) Lapse of share options 862 (862) Appropriation to statutory reserve funds 2,624 (2,624) Conversion of convertible bonds 1,916 65,926 (6,756) 61,086 61,086 Dividend paid to non-controlling shareholders (5,693) (5,693) At 30 June 2017 (unaudited) 367,844 3,284,819 39,193 1,452,819 6,693 33, ,362 (591,732) 40, ,827 5,026, ,746 5,244,

13 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the six months ended 30 June 2018 Six months ended 30 June (Unaudited) (Unaudited) RMB 000 RMB 000 OPERATING ACTIVITIES Increase in loan receivables (450,668) (330,622) Other cash flows generating from operating activities 6, ,472 NET CASH (USED IN) FROM OPERATING ACTIVITIES (443,988) 309,850 INVESTING ACTIVITIES Net cash outflow on acquisition of subsidiaries, associates and available-for-sale investments (567,471) (508,634) Net cash inflow on disposal of subsidiaries 400, ,157 Advanced to associates (371,366) (3,585) Dividend received from associates 155,000 Other cash flows generating from (used in) investing activities 13,238 (15,577) NET CASH USED IN INVESTING ACTIVITIES (370,117) (377,639) FINANCING ACTIVITIES Interest paid (142,702) (131,008) New borrowings raised 680, ,433 Repayment of borrowings (405,392) (289,596) New corporate bonds raised 451,749 Proceeds from exercise of options 46,790 27,702 Dividends paid to non-controlling shareholders (5,693) Other cash flows generating from (used in) financing activities 12,037 (3,018) NET CASH FROM (USED IN) FINANCING ACTIVITIES NET DECREASE IN CASH AND CASH EQUIVALENTS 642,951 (226,180) (171,154) (293,969) Effect of foreign exchange rate changes 20,073 (31,684) CASH AND CASH EQUIVALENTS AT 1 JANUARY CASH AND CASH EQUIVALENTS AT 30 JUNE, represented by bank balances and cash 969,249 1,233, , , CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

14 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL INFORMATION The Company was incorporated in the Cayman Islands on 4 January 2010 as an exempted company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands and its shares are listed on GEM. Mr. Zhang Zhenxin ( Mr. Zhang ) is the substantial shareholder of the Company. The registered office of the Company is situated at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands. The principal activities of the Company during the period are provision of consultancy services and investment holding. The principal activities of the Company s subsidiaries are provision of traditional financing services and related financing consultancy services including entrusted loan service, real estate-backed loan service, pawn loan service, other loan service and microfinance service, and internet financing services including third party payment service, online investment and technology-enabled lending service and related activities on loan portfolio management, as well as provision of social gaming services, provision of IT solution services and provision of transaction verification services. 2. BASIS OF PREPARATION AND ACCOUNTING POLICIES The unaudited condensed consolidated interim financial statements have been prepared in accordance with the Hong Kong Accounting Standard ( HKAS ) No. 34 Interim Financial Reporting and other relevant HKASs and Interpretations and the Hong Kong Financial Reporting Standards ( HKFRSs ) issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) and the applicable disclosure requirements of the GEM Listing Rules. The unaudited condensed consolidated results have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values. The unaudited condensed consolidated financial information has not been audited by the Company s auditors, but has been reviewed by the Company s audit committee (the Audit Committee ). The accounting policies used in the preparation of these results are same with those used in the preparation of the Group s annual financial statements for the year ended 31 December GEM Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands IT GEM

15 2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (Continued) The Group has adopted the complete version of HKFRS 9 Financial instruments ( HKFRS 9 ) in the condensed consolidated financial statements for the six months ended 30 June Except for the foregoing, the Group has not adopted any new standard or interpretation that is not yet effective for the current accounting period. HKFRS 9 introduces new classification and measurement requirements for financial assets on the basis of the Group s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets, a new expected credit loss model that replaces the incurred loss impairment model used in HKAS 39 Financial instruments: Recognition and measurement ( HKAS 39 ) with the result that a loss event will no longer need to occur before an impairment allowance is recognised, and a new hedge accounting model where the hedged ratio is required to be the same as the one used by an entity s management for risk management purposes. As at 1 January 2018, the Directors have reviewed and reassessed the Group s financial assets on that date and the results for the period. The initial application of HKFRS 9 has had impacts on the following financial assets and results of the Group: (i) Investments in equity securities (not held for trading) of RMB429,511,000 that were previously classified as available-forsale investments and measured at cost at each reporting date under HKAS 39 have been designated as equity investments measured at fair value through other comprehensive income of RMB364,558,000 and equity investments measured at fair value through profit or loss of RMB361,099,000, respectively. The reclassification have no significant financial impact. (i) ,511, ,558, ,099,000 (ii) Impairment based on the expected credit loss model on the Group s loan receivables of RMB24,279,000 have been made for the year ended 31 December (ii) 24,279,000 The HKICPA has issued certain amendments to HKFRSs which are first effective for the current accounting period of the Group. Impairment based on the expected credit loss model on the Group s loan receivables of RMB12,360,000 have been made for the six months ended 30 June ,360, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

16 3. TURNOVER The principal activities of the Group are provision of traditional financing services and related financing consultancy services including entrusted loan service, real estate-backed loan service, pawn loan service, other loan service and microfinance service, and internet financing services including third party payment service, online investment and technology-enabled lending service and related activities on loan portfolio management, as well as provision of social gaming services, provision of IT solution services and provision of transaction verification services. Turnover represents interest income (either from entrusted loans, real estate-backed loans, pawn loans, other loans and micro loans) and financial consultancy service income, third party payment service income, online investment and technology-enabled lending service income, social gaming service income, IT solution service income, transaction verification service income and gain on transfer of interest rights, net of corresponding sales related taxes. The amount of each significant category of revenue recognised in turnover for the period is as follows: 3. IT IT For the three months ended 30 June For the six months ended 30 June RMB 000 RMB 000 RMB 000 RMB 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Interest income Entrusted loan service income 10,953 20,903 29,622 43,319 Other loan service and real estate-backed loan service income 90,182 86, , , , , , ,116 Financial consultancy service income 29,610 22,860 72,238 33,992 Third party payment service income 95,206 82, , ,716 Online investment and technology-enabled lending service income 323,139 1,015, ,236 1,490,191 Transaction verification service income 140, ,504 Gain on transfer of rights on interest on loan receivable 30,461 Others 49,054 30,623 69,866 55,336 Turnover 738,178 1,258,897 1,342,048 1,981,

17 4. SEGMENT INFORMATION Operating segments, and the amounts of each segment item reported in the condensed consolidated financial statements, are identified from the financial data and information provided regularly to the Group s chief operation decision maker ( CODM ), who is the most senior executive management, for the purposes of allocating resources to, and assessing the performance of, the Group s various lines of business and geographical locations. The Directors have organised the Group into different segments by the types of services provided, of which the Blockchain services was a new segment identified since the year ended 31 December Specifically, the Group s reportable segments are as follows: 1. Traditional loans and financing provision of financing services in the People s Republic of China ( PRC ) and Hong Kong; 2. Third party payment service provision of online third party payment service and prepaid card issue business; 3. Online investment and technology-enabled lending service provision of internet loan services in the PRC; 4. Blockchain services provision of transaction verification services in Hong Kong, Canada and Georgia; and 5. Others provision of social gaming service in the PRC, provision of IT solution service in Vietnam and property investment. Segment revenue and results For the period ended 30 June 2018 (Unaudited) IT Traditional loans and financing Third party payment service Online investment and technologyenabled lending service Blockchain services Others Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 REVENUE External income and gain 274, , , ,504 69,866 1,342,048 Segment results 93,226 41,692 18,332 21,958 (3,447) 171,761 Share of results of associates 48,800 Unallocated other income 25,777 Other gains or losses 252,042 Gain on disposal of subsidiaries (Note 20) 20 42,760 Change in fair value of a preference share of a subsidiary (976) Share-based payment expenses (36,991) Interest expenses (84,825) Unallocated expenses (28,900) Profit before tax 389, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

18 4. SEGMENT INFORMATION (Continued) Segment revenue and results (Continued) For the period ended 30 June 2017 (Unaudited) 4. Traditional loans and financing Third party payment service Online investment and technologyenabled lending service Others Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 REVENUE External income and gain 291, ,716 1,490,191 55,336 1,981,812 Segment results 45,921 86, ,498 (7,983) 746,385 Share of results of associates 42,642 Unallocated other income 5,887 Other gains or losses (2,009) Gain on disposal of subsidiaries 408,098 Gain on deemed disposal of subsidiaries 3,303 Change in fair value of preference share of a subsidiary (100,549) Share-based payment expenses (91,510) Interest expenses (9,702) Unallocated expenses (7,269) Profit before tax 995,276 The accounting policies of the operating segments are the same as the Group s accounting policies described in note 2. Segment profit or loss represents profit earned by or loss from each segment without allocation of share of results of associates, unallocated other income, other gains or losses, gain on disposal of subsidiaries, gain on deemed disposal of subsidiaries, change in fair value of preference share of a subsidiary, central administration costs, share-based payment expenses and certain interest expenses. This is the measure reported to the CODM for the purposes of resource allocation and performance assessment

19 5. OTHER INCOME AND GAINS OR LOSSES 5. For the three months ended 30 June For the six months ended 30 June RMB 000 RMB 000 RMB 000 RMB 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Government grants (Note) 17,894 2,000 18,494 2,271 Bank interest income 4,614 1,304 6,308 3,616 Interest income on convertible bonds 1,859 Inputed interest on corporate bonds 1,496 3,703 Fair value changes of held for trading investments (5,589) (553) (7,958) (5,712) Fair value changes of financial assets through profit or loss 260, ,000 Others 22,232 5,026 25,779 5, ,151 9, ,482 9,683 Note: Government grants in respect of encouragement of expansion of enterprise were recognised at the time the Group fulfilled the relevant granting criteria. 6. INTEREST EXPENSES 6. For the three months ended 30 June For the six months ended 30 June RMB 000 RMB 000 RMB 000 RMB 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Interest on bank and other borrowings 41,238 40,395 77,909 79,447 Interest on corporate bonds 26,307 2,670 27,452 5,995 Interest on convertible bonds 18,890 50,626 66, ,296 86,435 93, , , CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

20 7. PROFIT BEFORE TAX Profit before tax has been arrived at after charging (crediting): 7. (a) For the three months ended 30 June For the six months ended 30 June RMB 000 RMB 000 RMB 000 RMB 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Staff costs, including directors (a) remuneration Salaries, wages and other benefits 81,670 68, , ,248 Contribution to defined contribution retirement benefits scheme 8,915 5,094 16,287 8,397 Share-based payment expenses 20,401 46,012 36,991 91, , , , ,155 (b) Other items (b) Auditors remuneration , Depreciation and amortisation 103,741 15, ,347 26,119 Net exchange difference 7,236 (3,410) (2,648) (1,620) Operating lease charges in respect of properties Fair value change of preference share of a subsidiary Fair value of change of provision for financial guarantee (included in administrative and other operating expenses) Impairment recognised on loan receivables (included in administrative and other operating expenses) Impairment recognised on other receivables (included in administrative and other operating expenses) 22,340 11,865 35,008 19,046 25, , , ,168 19, ,253 9,289 12,360 8,083 8, INCOME TAX 8. For the three months ended 30 June For the six months ended 30 June RMB 000 RMB 000 RMB 000 RMB 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current tax Provision for Hong Kong Profits Tax 24,935 6,010 27,608 10,269 Provision for PRC Enterprise Income Tax (the EIT ) 39, ,414 52, ,258 64, ,424 79, ,527 Deferred tax 2,506 2,506 67, ,424 82, ,

21 8. INCOME TAX (Continued) (i) Pursuant to the rules and regulations of the Cayman Islands and the British Virgin Islands (the BVI ), the Group is not subject to any income tax in the Cayman Islands and the BVI. 8. (i) (ii) The applicable tax rate for the subsidiaries incorporated in Hong Kong is 16.5% for the three months and six months ended 30 June 2018 and (ii) 16.5% (iii) Profits of the subsidiaries established in the PRC are subject to PRC EIT. (iii) Under the Law of the PRC on EIT (the EIT Law ) and Implementation Regulation of EIT Law, the tax rate of the PRC subsidiaries is 25% for both periods. 25% During the three months and six months ended 30 June 2018 and 2017, several subsidiaries established in the PRC were recognised as High Technology Enterprises and subject to PRC income tax at 15% in accordance with the EIT Law. 15% During the six months ended 30 June 2018, PRC EIT of approximately RMB26,885,000 is arised from the gain on disposal of subsidiaries as set out in note ,885, (iv) According to the requirements of the Provisional Regulations of the PRC on Land Appreciation Tax (the LAT ) effective from 1 January 1994, and the Detailed Implementation Rules on the Provisional Regulations of the PRC on LAT effective from 27 January 1995 as well, all income from the sale or transfer of land use rights, buildings and their attached facilities in the PRC is subject to LAT at progressive rates ranging from 30% to 60% of the appreciation value as calculated according to the Provisional Regulations of the PRC on LAT and its Detailed Implementation Rules. (iv) 30% 60% 9. DIVIDENDS The Board has resolved not to pay an interim dividend for the six months ended 30 June 2018 (six months ended 30 June 2017: Nil) CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

22 10. EARNINGS PER SHARE Basic earnings per share The calculation of basic earnings per share for the three months and six months ended 30 June 2018 is based on the profit attributable to owners of the Company of RMB257,427,000 and RMB308,715,000 respectively (three months and six months ended 30 June 2017: RMB466,054,000 and RMB566,921,000 respectively) and the weighted average of 22,543,500,643 and 22,514,927,535 ordinary shares in issue respectively during the three months and six months ended 30 June 2018 (three months and six months ended 30 June 2017: 21,906,635,503 and 21,778,646,437 ordinary shares respectively). Diluted earnings per share The calculation of diluted earnings per share for the three months and six months ended 30 June 2018 is based on the profit attributable to owners of the Company of RMB257,427,000 and RMB308,715,000 respectively (three months and six months ended 30 June 2017: RMB505,062,000 and RMB566,921,000 respectively) and the weighted average of 23,378,123,199 and 23,347,431,058 ordinary shares in issue respectively during the periods assuming conversion of all dilutive potential shares (three months and six months ended 30 June 2017: 25,275,383,502 and 22,906,402,928 ordinary shares respectively). Dilutive potential shares include share options, shares to be issued under conversion of convertible bonds and share consideration for acquisition of Qiyuan. For the three months and six months ended 30 June 2018 and six months ended 30 June 2017, the computation of diluted earnings per share does not assume the conversion of the Company s outstanding convertible bonds since their exercise would result in an increase in earnings per share. As at 30 June 2018, 1,792,039,042 new shares of the Company might be issued pursuant to the outstanding convertible bonds ,427,000308,715, ,054, ,921,000 22,543,500,643 22,514,927,535 21,906,635,503 21,778,646, ,427,000308,715, ,062, ,921,000 23,378,123,199 23,347,431,058 25,275,383,502 22,906,402,928 1,792,039,

23 11. GOODWILL The carrying amount of goodwill at the end of the reporting period is attributable to the respective cash generating unit of the Group as follows: June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 UCF Pay Limited* ( UCF Pay ) Third party payment service segment Leyu Limited ( Leyu ) Online investment and technology-enabled lending service segment Shenzhen Qiyuan Tianxia Technology Company Limited* ( Qiyuan ) Others segment Amigo Technologies Joint Stock Company ( Amigo Technologies ) Third party payment service and IT solution service segment K & R International Limited ( K&R ) Third party payment service segment (Note a) Glory Metro Holdings Limited ( Glory Metro ) Other segment (Note b) 35,844 35,844 Leyu Limited Leyu 676, , , ,841 Amigo Technologies Joint Stock Company Amigo Technologies IT 55,698 55,698 a 52,325 b 105,065 1,133, ,382 Notes: (a) During the six months ended 30 June 2018, the Group acquired 100% of the equity interest in the registered capital of K&R. Goodwill arose in the acquisition because the cost of the combination includes a control premium. Details are set out in the note 19. (a) 100% 19 (b) During the six months ended 30 June 2018, the Group acquired a 51% equity interest in the registered capital of Glory Metro. Goodwill arose in the acquisition because the cost of the combination includes a control premium. Details are set out in the note 19. (b) 51% 19 * the English translation of Chinese names or words is for information purposes only and should not be regarded as the official English translation of such Chinese names or words 22 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

24 12. FINANCIAL ASSETS THROUGH PROFIT OR LOSS/OTHER COMPREHENSIVE INCOME June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 Unlisted investments Equity securities classified as: Financial assets through profit or loss 621,099 Financial assets through other comprehensive income 627,741 1,248, LOAN RECEIVABLES, PREPAYMENTS AND OTHER RECEIVABLES June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 Loan receivables Secured loans Real estate-backed loans to customers 299, ,322 Entrusted loans to customers 35,608 35,608 Other loans to customers 375, , ,648 1,053,339 Unsecured loans Entrusted loans to customers 216, ,200 Other loans to customers 3,040,457 1,627,616 Micro loans to customers 16,755 17,077 3,273,459 2,466,893 Sub-total 3,984,107 3,520,232 Less: Allowance for loan receivables (104,040) (66,778) 3,880,067 3,453,454 Prepayments and other receivables Prepayments and other receivables 1,674,041 1,256,

25 13. LOAN RECEIVABLES, PREPAYMENTS AND OTHER RECEIVABLES (Continued) The Group normally allows credit terms to customers ranging from 30 days to up to 2 years, depending on the types of loan. Included in the unsecured loan balances are loans of approximately RMB2,796,765,000 (31 December 2017: RMB1,845,962,000) guaranteed by guarantors ,796,765,000 1,845,962,000 (a) Ageing analysis (a) 30 June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 Within 90 days 90 1,294, , to 180 days ,174, , to 365 days ,381 1,031,406 Over 365 days 365 1,148,465 1,619,912 3,880,067 3,453,454 The above ageing analysis is presented based on the date of loans granted to customers. The Group s financing advances to customers included in the loan receivables are due as of the due date specified in respective loan agreements. (b) Loan receivables that are not impaired (b) Included in the Group s loan receivable balances were secured debtors with aggregate carrying amount of approximately RMB142,753,000 (31 December 2017: RMB201,463,000) which were past due as at the reporting date, for which the Group has not provided for impairment loss. For the amount of RMB141,083,000 (31 December 2017: RMB54,445,000), the Group holds collaterals amounting to approximately RMB286,085,000 (31 December 2017: RMB89,334,000) in respect of such loan receivables as at 31 December The remaining balances are unsecured. 142,753, ,463, ,083,000 54,445, ,085,000 89,334, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

26 13. LOAN RECEIVABLES, PREPAYMENTS AND OTHER RECEIVABLES (Continued) (b) Loan receivables that are not impaired (Continued) The aging of loan receivables which were past due but not impaired is as follows: 13. (b) 30 June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 Not yet past due Current 3,737,314 3,251,991 Past due but not impaired Within 90 days , to 180 days to 365 days ,203 Over 365 days ,358 52, , ,463 3,880,067 3,453, BANK BALANCE TRUST ACCOUNT/FUNDS PAYABLE AND AMOUNTS DUE TO CUSTOMERS The Group maintains a segregated trust account with a licensed bank to hold customers monies arising from its third party payment service business. The Group has classified the customers monies as bank balance trust account under the current assets of the consolidated statement of financial position and recognised the corresponding payables to respective customers as funds payable to customers. The Group entitles to interests generated by the bank but is restricted to use the customers monies to settle its own obligations. 15. TRADE RECEIVABLES Customers are generally granted credit terms of 90 to 180 days (31 December 2017: 90 to 180 days). The following is an aged analysis of trade receivables net of allowance for impairment of trade receivables presented based on the invoice date for financial consultancy service income, online investment and technology-enabled lending service income, social gaming service income and IT solution service income and date of providing services for interest income and third party payment service income, which approximates the respective revenue recognition dates, at the end of each reporting period and as follows: IT 30 June 2018 (Unaudited) RMB December 2017 (Audited) RMB days , , days ,058 8, days ,254 40,028 Over 1 year , , ,

27 16. BORROWINGS June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 Secured bank loans (Notes a) a 268, ,222 Secured other loans (Notes b) b 517, ,608 Unsecured bank loans 54,127 69,986 Unsecured other loans 1,053, ,762 Unsecured entrusted loans 131,580 1,893,821 1,760,158 Carrying amount repayable*: * On demand/within one year 1,781,021 1,546,617 After one year but within two years 112,800 14,000 After two years but within five years 131,600 After five years 67,941 Carrying amount of bank loans that are not repayable within one year from the end of the reporting period but contain a repayment on demand clause (shown under current liabilities) Less: amounts due within one year shown under current liabilities 1,893,821 1,760,158 (98,341) 1,893,821 1,661,817 (1,781,021) (1,546,617) Amounts show under non-current liabilities 112, ,200 * The amounts due are based on scheduled repayment dates set out in the loan agreements. Notes: * (a) As at 30 June 2018, no secured bank loans (31 December 2017: RMB112,341,000) were secured by the investment property held by the Group. (a) 112,341,000 As at 30 June 2018, secured bank loans of approximately RMB268,480,000 (31 December 2017: RMB270,881,000) were secured by the pledged bank deposits. 268,480, ,881,000 (b) As at 30 June 2018, secured other loans of approximately RMB517,555,000 (31 December 2017: RMB508,608,000) were secured by share charges on certain wholly-owned subsidiaries. (b) 517,555, ,608, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

28 16. BORROWINGS (Continued) The effective interest rates of borrowings at the end of the reporting period as follows: June 2018 (Unaudited) 31 December 2017 (Audited) Bank and other loans 8.5% 9.95% 17. CONVERTIBLE BONDS The balances as at 30 June 2018 represented 3-year 7% convertible bonds with an aggregate principal amount of HK$1,000,000,000 (equivalent to approximately RMB861,287,000), 3-year 7% convertible bonds with an aggregate principal amount of HK$100,000,000 (equivalent to approximately RMB85,640,000) and 3-year 5.9% plus 3-month LIBOR convertible bonds with an aggregate principal amount of US$45,000,000 (equivalent to approximately RMB298,704,000) ,000,000,000861,287,000 7% 100,000,00085,640,000 7% 45,000,000298,704, % As at 31 December 2017, the balances included a 3-year 7% convertible bond with an aggregate principal amount of HK$1,000,000,000 (equivalent to approximately RMB861,287,000) (the 7% Convertible Bond ). On 31 January 2018, the Company allotted 28,768,000 ordinary shares to the subscriber as a result of the exercise of the conversion rights for the 7% Convertible Bond in the principal amount of HK$19,999, The remaining number of new shares might be issued pursuant to the 7% Convertible Bond as at 30 June 2018 was 1,237,055,469. As at 31 December 2017, the balances included a 3-year 6% convertible bond with an aggregate principal amount of HK$300,000,000 (equivalent to approximately RMB236,419,000) (the 6% Convertible Bond ). On 8 June 2018, the Company allotted 576,923,075 ordinary shares to the subscriber as a result of the exercise of the conversion rights for the 6% Convertible Bond in the principal amount of HK$300,000,000. No remaining number of new shares might be issued pursuant to the 6% Convertible Bond as at 30 June No convertible bonds were issued during the six months ended 30 June ,000,000, ,287,000 7% 7% 19,999, % 28,768,000 1,237,055,469 7% 300,000, ,419,000 6% 6% 300,000,0006% 576,923,075 6%

29 17. CONVERTIBLE BONDS (Continued) The movement of the liability and equity components of the convertible bonds is set out below: 17. Liability component Equity component Total RMB 000 RMB 000 RMB 000 At 31 December 2017 (audited) 1,305, ,853 1,458,998 Effective interest expenses 66,290 66,290 Interest payables (43,745) (43,745) Conversion of convertible bonds (269,645) (25,591) (295,236) Exchange realignment 20,383 20,383 At 30 June 2018 (unaudited) 1,078, ,262 1,206, June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 Represented by: Current liabilities 569, ,840 Non-current liabilities 509,026 1,035,305 1,078,428 1,305, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

30 18. SHARE CAPITAL 18. Number of shares Share capital presented as 000 HK$ 000 RMB 000 Authorised: At 1 January 2018 and 30 June 2018, ordinary shares of HK$0.02 each ,000,000 2,000,000 Issued and fully paid: At 1 January 2018, ordinary shares of HK$0.02 each (audited) ,412, , ,512 Exercise of share options 105,740 2,114 1,707 Conversion of convertible bonds 605,691 12,114 10,199 At 30 June 2018, ordinary shares of HK$0.02 each (unaudited) ,124, , ,418 At 1 January 2017, ordinary shares of HK$0.02 each (audited) ,523, , ,259 Exercise of share options 66,430 1,329 1,169 Issue of shares for acquisition of available-for-sale investments 124,397 2,488 2,204 Issue of consideration shares 255,753 5,115 4,296 Conversion of convertible bonds 108,687 2,174 1,916 At 30 June 2017, ordinary shares of HK$0.02 each (unaudited) ,078, , ,

31 19. ACQUISITION OF SUBSIDIARIES Acquisition of K&R During the six months ended 30 June 2018, the Group acquired 100% equity interest in the issued share capital of K&R from a third party independent to the Group, at a total consideration of approximately HK$109,988,000 (equivalent to approximately RMB87,946,000) satisfied by cash. This acquisition has been accounted for using the acquisition method. The amount of goodwill arising as a result of the acquisition was RMB52,325,000. K&R is engaged in the provision of third party payment services in Hong Kong. Goodwill arose in the acquisition of K&R because the cost of the combination included a control premium. In addition, the consideration paid for the combination effectively included amounts for the benefit of allowing the Group to leverage the third party payment services segment in Hong Kong. These benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill arising from the acquisition is expected to be deductible for tax purposes %109,988,000 87,946,000 52,325,000 Consideration transferred RMB 000 (Unaudited) Cash 87,946 Minimal acquisition-related cost of the transaction was incurred during the period ended 30 June 2018 and was recognised as administrative expenses. Assets acquired and liabilities recognised at the date of acquisition are as follows: RMB 000 (Unaudited) Plant and equipment 1,807 Intangible assets 10,635 Inventories 31 Trade receivables 5 Prepayments and other receivables 7,634 Cash and cash equivalents 17,472 Bank balance trust account 21,105 Funds payables and amounts due to customers (21,105) Other payables (208) Deferred tax liabilities (1,755) Net assets identified 35,621 The fair value of trade and other receivables at the date of acquisition amounted to RMB7,639,000. The gross contractual amounts of those trade and other receivables acquired amounted to RMB7,639,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected amounted to nil. 7,639,000 7,639, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

32 19. ACQUISITION OF SUBSIDIARIES (Continued) Acquisition of K&R (Continued) Goodwill arising on acquisition: 19. RMB 000 (Unaudited) Consideration transferred 87,946 Less: Net assets identified (35,621) Goodwill arising on acquisition 52,325 Net cash outflow on acquisition of K&R: RMB 000 (Unaudited) Cash consideration paid 87,946 Less: cash and cash equivalent balances acquired (17,472) 70,474 Acquisition of Glory Metro During the six months ended 30 June 2018, the Group acquired 51% equity interest in the issued share capital of Glory Metro from a third party independent to the Group, at total consideration of RMB178,500,000 satisfied by cash. This acquisition has been accounted for using the acquisition method. The amount of goodwill arising as a result of the acquisition was RMB105,065,000. Glory Metro is engaged in the provision of exhibition services in Hong Kong and the PRC. Goodwill arose in the acquisition of Glory Metro because the cost of the combination included a control premium. In addition, the consideration paid for the combination effectively included amounts for the benefit of allowing the Group to leverage the FinTech services in Hong Kong and the PRC. These benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill arising from the acquisition is expected to be deductible for tax purposes. 51% 178,500, ,065,

33 19. ACQUISITION OF SUBSIDIARIES (Continued) Acquisition of Glory Metro (Continued) Consideration transferred 19. RMB 000 (Unaudited) Cash 100,531 Consideration payables 77, ,500 Minimal acquisition-related cost of the transaction was incurred during the period ended 30 June 2018 and was recognised as administrative expenses. Assets acquired and liabilities recognised at the date of acquisition are as follows: RMB 000 (Unaudited) Plant and equipment 43 Intangible assets 193,090 Prepayments and other receivables 860 Cash and cash equivalents 2,268 Other payables (3,998) Deferred tax liabilities (48,273) Net assets identified 143,990 The fair value of other receivables at the date of acquisition amounted to RMB860,000. The gross contractual amounts of those other receivables acquired amounted to RMB860,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected amounted to nil. Goodwill arising on acquisition: 860, ,000 RMB 000 (Unaudited) Consideration transferred 178,500 Less: Net assets identified (143,990) Add: 49% non-controlling interests 49% 70,555 Goodwill arising on acquisition 105, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

34 19. ACQUISITION OF SUBSIDIARIES (Continued) Acquisition of Glory Metro (Continued) Net cash outflow on acquisition of Glory metro: 19. RMB 000 (Unaudited) Cash consideration paid (Note) 100,531 Less: cash and cash equivalent balances acquired (2,268) 98,263 Note: Consideration of RMB100,531,000 has been paid during the six months ended 30 June The remaining balance of RMB77,969,000 has been recognised in other payables. 20. DISPOSAL OF SUBSIDIARIES During the six months ended 30 June 2018, the Group disposed of its 100% equity interest in, to independent third parties for a total cash consideration of approximately RMB407,542,000. The aggregate net assets of the subsidiaries disposed of at the date of disposal were as follows: 100,531,000 77,969, %407,542,000 RMB 000 (Unaudited) Investment property 576,000 Trade and other receivables 8,353 Bank balances and cash 7,060 Accruals and other payables (35,692) Borrowings (153,927) Deferred tax liabilities (37,012) Net assets disposed of 364,

35 20. DISPOSAL OF SUBSIDIARIES (Continued) Gain on disposal of subsidiaries 20. RMB 000 (Unaudited) Consideration received and receivable 407,542 Net assets disposed of (364,782) Gain on disposal of subsidiaries 42,760 Net cash inflow arising on disposal RMB 000 (Unaudited) Cash consideration received 407,542 Bank balances and cash disposed of (7,060) 400, COMMITMENT Capital expenditure commitment June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 Capital expenditure contracted for but not provided for in respect of: Acquisition of plant and equipment 18,951 12, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

36 21. COMMITMENT (Continued) Operating lease arrangement The Group as lessee Details of the Group s commitments under non-cancellable operating leases as at 30 June 2018 and 31 December 2017 are set out as follows: The Group leases certain of its staff quarters and offices under operating lease arrangements. The leases typically run for an initial period of three months to three years (31 December 2017: three months to three years). Lease payments are usually increased annually to reflect market rentals. No provision for contingent rent and terms of renewal was established in the leases. The total future minimum lease payments under non-cancellable operating leases are payable as follows: June 2018 (Unaudited) RMB December 2017 (Audited) RMB 000 Within one year 59,850 47,172 In the second to fifth years inclusive 37,833 44,151 97,683 91, RELATED PARTY TRANSACTIONS Significant related party transactions The Group had the following significant transactions with its related parties during the period: 22. For the six months ended 30 June (Unaudited) (Unaudited) Notes RMB 000 RMB 000 Rental expenses paid to: UCF Holdings Group Limited (i) 2,298 2,501 Beijing Xiaoyun Huayuan Real Estate Co., Ltd. (ii) 4,004 Notes: (i) This company is owned by Mr. Zhang, a substantial shareholder of the Company. (i) (ii) Mr. Zhang no longer has interest in Beijing Xiaoyun Huayuan Real Estate Co., Ltd. with effect from 21 April 2017 and thus ceased to be a Connected person of the Company. (ii)

37 22. RELATED PARTY TRANSACTIONS (Continued) Key management personnel remuneration 22. For the six months ended 30 June (Unaudited) (Unaudited) RMB 000 RMB 000 Basic salaries, allowances and other benefits 8,679 8,027 Contribution to retirement benefit scheme Share-based payment expenses 14,921 25,736 23,743 33, FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS The following table presents financial assets and liabilities measured at fair value in the consolidated statement of financial position in accordance with the fair value hierarchy. The hierarchy groups financial assets and liabilities based on the relative reliability of significant inputs used in measuring the fair value of these financial assets and liabilities. The fair value hierarchy has the following levels: Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs) CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

38 23. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Continued) Fair value of the Group s financial assets and financial liabilities that are measured at fair value on a recurring basis Some of the Group s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The level in the fair value hierarchy within which the financial asset (liability) is categorised in its entirety is based on the lowest level of input that is significant to the fair value measurement. The financial assets (liabilities) of the Group at fair value in the statement of financial position are grouped into fair value hierarchy as follows: 23. Level 1 Level 2 Level 3 Total RMB 000 RMB 000 RMB 000 RMB June 2018 (unaudited) Financial assets at fair value through profit or loss ( FVTPL ) Non-derivative financial assets Held for trading investments 169,102 50, ,289 Financial liabilities at FVTPL Preference share of a subsidiary 119, ,973 Other financial liabilities 536, , , , December 2017 (audited) Financial assets at FVTPL Non-derivative financial assets Held for trading investments 299,551 32, ,082 Financial liabilities at FVTPL Preference share of a subsidiary 118, ,997 Provision for financial guarantee 225, ,553 Other financial liabilities 536, , , ,550 There were no transfers between levels of fair value hierarchy in current period and prior year

39 23. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Continued) The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used). 23. Financial assets/ financial Fair value Valuation technique(s) Significant liabilities Fair value hierarchy and key input(s) unobservable input(s) As at 30 June 2018 (unaudited) and 31 December 2017 (audited) Financial assets at FVTPL Assets Held for trading investments RMB50,187,000 (31 December 2017: RMB32,531,000) Financial liabilities at FVTPL Other financial liabilities 50,187,000 32,531,000 Liabilities RMB536,000,000 (31 December 2017: RMB536,000,000) 536,000, ,000,000 Level 3 Level 3 Binominal option pricing model based on the stock price, volatility, dividend yield, risk free rate and option life (notes 1 and 2) 1 2 Binomial option pricing model based on the stock price, volatility, dividend yield, risk free rate and option life (Notes 4 and 5) 4 5 Dividend yield taking into account management s expectation of market conditions of specific industries at 0%. 0% Dividend yield and the expected volatility taking into account management s expectation of market conditions of specific industries at 0% and at 74.51%, respectively. 0% 74.51% Provision for financial guarantee Liabilities nil (31 December 2017: RMB225,553,000) 225,553,000 Level 3 Present value of the contractually determined stream of future cash flows discounted at the required yield (Note 3) 3 The required yield was determined with reference to the historical default rate and credit rating of the borrowers and remaining time to maturity at 5.00%. 5.00% Preference share of a subsidiary Liabilities RMB118,997,000 (31 December 2017: RMB118,997,000) 118,997, ,997,000 Level 3 Black-Scholes option pricing model based on the stock price, volatility, dividend yield, risk free rate and option life (Notes 4 and 5) 4 5 Dividend yield and the expected volatility taking into account management s expectation of market conditions of specific industries at 0% and at 67.59%, respectively. 0% 67.59% 38 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

40 23. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Continued) Notes: 1) An increase in the dividend yield used in isolation would result in an increase in the fair value measurement of convertible bonds included in held for trading investments, and vice versa. 2) An increase in the volatility used in isolation would result in an increase in the fair value measurement of convertible bonds included in held for trading investments, and vice versa. 3) An increase in the interest yield used in isolation would result in a decrease in the fair value measurement of the provision for financial guarantee, and vice versa. 4) An increase in the dividend yield used in isolation would result in a decrease in the fair value measurement of other financial liabilities and preference share of a subsidiary, and vice versa. 5) An increase in the volatility used in isolation would result in an increase in the fair value measurement of other financial liabilities and preference share of a subsidiary, and vice versa. Valuation process Some of the Group s assets are measured at fair value for financial reporting purposes. The appropriate valuation techniques and inputs for the fair value measurements are determined by the directors of the Company and the independent qualified valuer. In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. Where Level 3 inputs are not available, the Group engages independent qualified valuer to perform the valuation. The directors of the Company work closely with the independent qualified valuer to establish the appropriate valuation techniques and inputs to the model. The directors of the Company will review the cause of fluctuations in fair value of the assets and liabilities annually. 24. EVENT AFTER REPORTING PERIOD Subsequent to the end of the reporting period, the Group has entered into the following significant event: On 21 June 2018, Leading Finance Services Holding Company Limited ( Leading Finance ), an indirectly wholly-owned subsidiary of the Company, entered into an agreement to form a joint venture namely. Under the agreement, Leading Finance agreed to inject its 100% equity interest in in exchange for a 35.4% interest in the joint venture. Following the formation of joint venture on 13 July 2018, the Group has accounted for the joint venture as an associate. As of 31 July 2018, the Group transferred the datacenter in Georgia to BitFury Group Limited ) 2) 3) 4) 5) % BitFury Group Limited

41 MANAGEMENT DISCUSSION AND ANALYSIS Business Review Industry Trends The FinTech industry in China is in an important stage of development where payment, consumer finance, online investment and other segments have obtained a broad customer base domestically. With various regulatory policies being gradually implemented, industry development will get into a healthier and more orderly phase. According to the research conducted by iresearch, the comprehensive transaction scale of third party payment in China will grow to RMB554 trillion in 2022 from RMB107 trillion in 2016 while the loan scale of internet consumption finance in China will grow to RMB11 trillion in 2022 from RMB863.1 billion in 2016, presenting promising prospects in the market. Meanwhile, as leading enterprises from the FinTech industry in China accelerated their overseas business expansion, the Southeast Asia region became a premier goal under the Go Global strategy. The rapid development of internet economy in Southeast Asia fostered a sound environment for the launch of FinTech service. According to Google, Southeast Asia currently has 260 million internet users and the number of its internet users is expected to grow at a compound annual growth rate of 14% in the next three years , % By leveraging on its comprehensive business qualifications and risk management capabilities, the Group s various FinTech platforms received affirmation and recognition from regulatory authorities (such as the People s Bank of China) and industry associations (such as the National Internet Finance Association of China). The Group further expanded and diversified our FinTech ecosystem, established our Strategy 3.0 for the new phase of development with focus on four core business segments, namely payment, technology-enabled lending, blockchain and other wealth management, and succeeded to expand our business to Vietnam, Singapore and Indonesia in the Southeast Asia region. By leveraging on our ever-growing FinTech service ecosystem, we believe that the Group will maintain and consolidate its leading position in the industry CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

42 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Operational Highlights Third party payment UCF Pay Limited*( UCF Pay ) has dedicated to forging a domestic leading service platform of internet financial transaction, providing customers with integrated solutions for online + offline payment transactions featuring secure, convenient, speedy service. The total transaction volume in the first half of 2018 reached around RMB364.7 billion, representing a period-on-period growth of approximately 52%. As of the end of June 2018, UCF Pay s accumulated active users reached 4.96 million. Current business scope of UCF Pay covers basic payment service and featured industry solutions including bank custody for online lending, direct banking, industry chain finance, cloud platform and electronic wallet. + 3,64752% 496 Shanghai Jifu Xinxi Jishu Fuwu Co., Ltd.* ( Shanghai Jifu ), our mobile point of sale ( POS ) provider which is 35% owned by the Group, recorded a total transaction volume of RMB1,392.6 billion in the first half of 2018, representing a period-on-period growth of around 129%. The accumulated number of registered users reached million as of the end of June 2018, representing an increase of 2.76 million new registered users as compared to that at the end of Shanghai Jifu was focused on promoting DianPOS/MPOS and Point POS POS) business and received positive market feedback, resulting in a substantial growth in both its transaction volume and number of new registered users. POS 35% 13,926129% 1, MPOS POS Amigo Technologies Joint Stock Company ( Amigo Technologies ) (in which the Group holds a 51% interest), our payment services provider in Vietnam, recorded a total transaction volume of VND96 trillion in the first half of 2018, representing a growth of around 37% period-on-period. In the first half of 2018, Amigo Technologies total number of transactions was approximately million, representing a period-on-period growth of approximately 48%. The growth rate was largely driven by COD (cash-on-delivery) services. Amigo Technologies Joint Stock Company Amigo Technologies 51% 9637% Amigo Technologies 8,94048% COD In the event of any error or omission in the Chinese translation of this interim report, the English text shall prevail

43 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Online investment and technology-enabled lending Shenzhen Yifangyidai Information Technology Service Company Limited* First House Loan achieved a total transaction volume of RMB5.2 billion in the first half of 2018, which demonstrated steady development trend due to stable progress of existing businesses and continuous growth in number of new customers. In terms of product development, First House Loan upgraded its existing personal credit products and launched new products of supply chain finance targeting financing demands of quality companies, creating growth opportunities of new businesses. 52 As of the end of June 2018, our consumer finance platform Weshare had 26.8 million accumulated registered users. The accumulated transaction volume of Weshare reached RMB6.3 billion in the first half of Weshare focused on instant microcredit, redefined previous credit users, provided quality customers with large amount installment and consumer finance services as well as launched Weshare e-loan e and Weshare Buy buyin the first half of the year. Meanwhile, Weshare upgraded its financial cloud platform, launched Weshare cloud platform centering on the new generation of big data-driven Ru Lai risk management to deliver integrated technology for internet credit. Based on its solid presence in the domestic market, Weshare expanded the business to the Southeast Asia region by constructing localised online platform with a view to providing local users with internet financial services. 2, ebuy 42 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

44 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Significant investments Significant investments were mainly classified into three categories, including a) financial assets through other comprehensive income, b) financial assets through profit or loss, and c) financial assets held for trading investments. a) Details of significant financial assets through other comprehensive income: a) b) c) a) At 30/6/2018 Size to Fair value Shareholdings Investment costs Principal business total assets RMB 000 % held RMB 000 % Bitfury Group Limited Unlisted 115, % 115,714 Blockchain business 0.9% Bitfury Group Limited 115, % 115, % Havenport Asset Management Pte. Ltd. Havenport Asset Management Pte.Ltd. Unlisted 82, % 82,186 Asset management service 0.6% 82, % 82, % Unlisted 200,000 4% 200,000 Online lending services 1.5% 200,000 4% 200, % Unlisted 7, % 7,500 Equity investment, asset management 0.05% and consultancy services 7, % 7, % J&D Holdings Limited Unlisted 6, % 6,643 Mobile gaming development 0.05% J&D Holdings Limited 6, % 6, % Long-term equity fund Unlisted # 153,762 N/A 289,313 Investment fund 1.17% # 153, , % Wellrich Investment Fund Limited Unlisted # 32, % 32,232 Investment fund 0.2% Wellrich Investment Fund Limited # 32, % 32, % Unlisted # 10, % 10,000 Education consultancy and technology 0.07% development # 10, % 10, % Others 19,704 19, % 19,704 19, % Total 627, , % 627, , % # New financial assets were added during the six month period ended 30 June #

45 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Significant investments (Continued) a) Details of significant financial assets through other comprehensive income: (Continued) Particulars of significant financial assets through other comprehensive income a) i) Havenport Asset Management Pte. Ltd. i) Havenport Asset Management Pte. Ltd. During the period ended 30 June 2018, we made additional investment in Havenport Asset Management Pte. Ltd., pursuant to which the Group increased its shareholdings from 19.9% as at 31 December 2017 to 40.6% as at 30 June Havenport Asset Management Pte. Ltd. 19.9% 40.6% ii) Long-term equity fund ii) The balance mainly represents an investment of HK$250 million made by the Group in a long-term equity fund for an investment period of twenty-four months, the 250,000,000 fund manager is licensed by Securities and Futures 24 Commission in Hong Kong to carry out Type 9 (asset management) regulated activity under the Securities and Futures Ordinance ( SFO ) during the six months ended 9 30 June The principal purpose of the Fund is to invest in, acquire, hold and trade in shares and other securities listed and traded on The Stock Exchange of Hong Kong Limited and other internationally recognized stock exchanges. A fair value loss of RMB135.6 million 135,600,000 was accounted for, which was primarily due to a drop in quoted market price of certain listed company engaging in the property development business in China. During the interim period ended 30 June 2018, there was no dividend received from the financial assets through other comprehensive income, and no significant change in fair value for other financial assets through other comprehensive income. 44 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

46 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Significant investments (Continued) b) Details of significant financial assets through profit or loss: b) At 30/6/2018 Size to Fair value Shareholdings Investment costs Principal business total assets RMB 000 % RMB 000 % NCF Wealth Holdings Limited Unlisted 621, % 64,953 Online investment and technology 4.7% enabling lending service NCF Wealth Holdings Limited 621, % 64, % Particulars of significant financial assets through profit or loss i) NCF Wealth Holdings Limited i) NCF Wealth Holdings Limited The Group invested in NCF Wealth Holdings Limited at an investment cost of RMB65 million in total in A fair value gain of RMB296.1 million was recorded on 1 January 2018 as an opening adjustment under HKFRS 9, and further fair value gain of RMB260 million was recorded for the first half period ended 30 June Such fair value gain was primarily attributable to the increase in the investee s equity valuation in recent financing rounds by third party institutional investors, and the growth in the investee s profitability and overall financial performance. Financial asset at fair value through profit or loss is stated at fair values based on the valuations performed by independent professional valuers. 65,000,000NCF Wealth Holdings Limited 9 296,100, ,000,

47 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Significant investments (Continued) c) Breakdown of significant financial assets held for trading investments c) At 30/6/2018 Fair value Shareholdings Shareholdings Investment costs Principal business Size to total assets RMB 000 No. of shares % RMB 000 % Convertible bonds Unlisted 31,754 N/A N/A 32,531 Blockchain business 0.24% Bitfury Group Ltd. Bitfury Group Ltd. 31,754 32, % Convertible bonds Unlisted # 18,433 N/A N/A 18,433 Blockchain system development and 0.15% consultancy services # 18,433 18, % Money market Fund Unlisted 94,278 N/A N/A 85,810 N/A 0.7% 94,278 85, % Asia Pacific Silk Road Investment HK listed (767) 5,275 41,680, % 20,901 P2P financing platform and other loan 0.04% Company Limited facilitation services business (767) 5,275 41,680, % 20,901 P2P 0.04% Beijing Kunlun Tech Co Ltd Hangzhou Shunwang Technology Co Ltd Goertek Inc China Merchants Securities CO., LTD 13, , % 13,065 Development and distribution of online PRC listed 0.1% (300418) # games 13, , % 13, % (300418) # 12, , % 12,150 Provision of computer application PRC listed 0.1% (300113) # services 12, , % 12, % (300113) # 10,746 1,054, % 10,649 Manufacture and distribution of PRC listed 0.08% (002241) # electronic components 10,746 1,054, % 10, % (002241) # PRC listed (600999) # 19,866 1,452, % 19,390 Security businesses 0.15% 19,866 1,452, % 19, % (600999) # Others 12, % 12, % Total: 219, , % 219, , % # New convertible bonds acquired and new listed share investments made during the six month period ended 30 June # 46 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

48 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Significant investments (Continued) c) Breakdown of significant financial assets held for trading investments (Continued) Particulars of significant financial assets held for trading investments c) i) Money market fund i) It represents the money market fund products which were highly liquid open-ended with non-guaranteed variable expected return, managed mainly by CCB Principal Asset Management Co., Ltd., China Universal Asset Management Co., and Beijing Panguqidian Investment Management Ltd. During the interim period ended 30 June 2018, a net gain on disposal of money market fund and remeasurement to fair value of RMB8.4 million was recorded and no dividend income was recognised. Beijing Panguqidian Investment Management Ltd. 8,400,000 ii) Listed share investments ii) During the interim period ended 30 June 2018, the Group invested in equity shares of certain listed companies in both Hong Kong and China. In relation to such equity investments, the Group recorded a net loss on disposal of listed share investments and remeasurement to fair value of RMB7.2 million and no 7,200,000 dividend income was received from the listed share investments. iii) Convertible bonds iii) During the interim period ended 30 June 2018, the Group recorded an interest income of approximately RMB2 million in relation to the convertible bonds. 2,000,000 Through equity investments, securities and fund investment, the Group targets to capture sound investment opportunities and diversity risk exposure from time to time. Such investments form part of our Group s cash management activities to enhance rate of returns when there is available cash for which no long-term utilisation plan has been formulated

49 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Financial Review Revenues For the six months ended 30 June 2018, the Group reported revenue of approximately RMB1,342.0 million, a decrease of 32.3% period-on-period. The decrease was primarily attributable to the decrease in revenues from online investment and technology-enabled lending services, due to a decrease in the transaction volume on our key online consumer lending platform Weshare, as well as a decrease in interest and financial consultancy service income caused by a decrease in the gain on transfer of rights on interest on loan receivables, and off-setting a growth in the payment transaction volume on our core third party payment platform UCF Pay and a strong growth in revenue from blockchain services during the six months ended 30 June The following table sets forth the Group s revenues by segment of business for the six months ended 30 June 2018 and ,342,000, % For the six months ended 30 June RMB 000 % of total revenues RMB 000 % of total revenues Traditional loans and financing 274, , Third party payment services 174, , Online investment and technology-enabled lending services 393, ,490, Blockchain services 430, Others 69, , Total 1,342, ,981, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

50 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Financial Review (Continued) Traditional loans and financing Traditional loans and financing income mainly included interest income, financial consultancy service income and gain on transfer of rights on interest on loan receivables, which were derived from the Group s loan financing services including entrusted loans, pawn loans and other loans secured with assets or guarantees. It generated approximately 20.4% of the Group s total revenues and recorded a decrease of approximately 6.0% period-on-period to approximately RMB274.1 million for the six months ended 30 June The traditional loans and financing income slightly decreased due to a decrease in the gain on transfer of rights on interest on loan receivables during the six months ended 30 June % 6.0% 274,100,000 Third party payment service The third party payment business, which included the provision of online payment transactions, payment system consultancy and related services of UCF Pay and payment transaction service of Amigo Technologies, generated revenues of approximately RMB174.4 million for the six months ended 30 June 2018, an increase of approximately 20.5% period-on-period. It represented approximately 13.0% of the Group s total revenues, of which UCF Pay reported revenue of approximately RMB168.3 million and Amigo Technologies reported revenue of approximately RMB5.7 million. The increase reflected a significant growth in the total transaction volume on our core third party payment platform UCF Pay to RMB364.7 billion for the six months ended 30 June 2018, an increase of approximately 52% period-on-period. Amigo Technologies 174,400, % 13.0% 168,300,000 Amigo Technologies 5,700,000 3,647 52%

51 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Financial Review (Continued) Online investment and technology-enabled lending service Our online investment and technology-enabled lending service income mainly included income generated by our online property loan platform First House Loan and our 48%-owned online consumer lending platform Weshare. For the six months ended 30 June 2018, the Group s online investment and technology-enabled lending business recorded revenues of approximately RMB393.2 million, representing a decrease of approximately 73.6% period-on-period. It represented approximately 29.3% of the Group s total revenues, of which First House Loan and Weshare reported revenues of approximately RMB18.6 million and RMB371.1 million, respectively. The decrease in the business segment s revenues was mainly due to a decrease in transaction volumes across the online consumer lending platform Weshare. 48% 393,200, % 29.3% 18,600, ,100,000 Blockchain services Blockchain segment contributed approximately RMB430.5 million of revenue to the Group for the six months ended 30 June It was primarily generated from the blockchain transaction verification services from the Group s industrial-level datacenters. Others Others included social gaming service income and IT solution income generated by our 51%-owned subsidiary Qiyuan and 51%-owned subsidiary Amigo Technologies respectively. The social gaming business contributed approximately RMB9.7 million of revenue to the Group while IT solution business contributed approximately RMB50.5 million of revenue to the Group for the six months ended 30 June ,500,000 51% Amigo Technologies IT 9,700,000IT 50,500, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

52 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Financial Review (Continued) Interest expenses Interest expenses mainly comprised interest due on bank and other loans, Hong Kong dollar ( HK$ )-denominated convertible bonds, United States ( US ) dollar-denominated convertible bonds, HK$denominated corporate bonds, US dollar-denominated corporate bonds and Singapore dollar-denominated corporate bonds. The Group s interest expenses decreased by approximately 8.6% periodon-period to approximately RMB171.7 million for the six months ended 30 June As at 30 June 2018, the Group s balances for external funding were RMB3,510.3 million, of which bank and other borrowings amounted to approximately RMB1,893.8 million (30 June 2017: approximately RMB1,724.9 million) and corporate bonds and convertible bonds amounted to approximately RMB1,616.5 million (30 June 2017: RMB1,408.8 million). Other income and gains or losses Other income mainly comprised bank interest income and government grants. The Group s other gains or losses which mainly comprised fair value changes of financial assets through profit or loss amounting to approximately RMB260 million. 8.6% 171,700,000 3,510,300,000 1,893,800,000 1,724,900,000 1,616,500,000 1,408,800, ,000,

53 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Financial Review (Continued) Administrative and other operating expenses The Group s administrative and other operating expenses primarily comprised salaries and staff welfare, intermediary handling charges for third party payment services, bank and financing charges, sales and marketing related expenses, provision for financial guarantee and rental expenses. Due to a significant increase in the scale and staff headcount of our online investment and technology-enabled lending and third party payment businesses and the depreciation for crypto currencies mining computer equipment, the Group s administrative and other operating expenses increased by approximately 17.1% to approximately RMB1,253.6 million for the six months ended 30 June 2018 period-on-period. 17.1% 1,253,600,000 Provision for financial guarantee represented provision made for loan amount lending out through the loan facilitation platform, namely Weshare. The amount of provision was calculated based on the historical pattern of loan delinquencies. Share-based payment expenses Share-based payment expenses of the Group for the six months ended 30 June 2018 decreased by approximately 59.6% to approximately RMB37.0 million. The decrease in such expenses represented the fair value of certain share options which were granted in earlier years had been amortised over the vesting periods. 59.6% 37,000, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

54 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Financial Review (Continued) Share of results of associates Share of results of associates for the six months ended 30 June 2018 increased to approximately RMB48.8 million. The period-on period increase was mainly attributable to the contribution from our 35% equity interest in Shanghai Jifu. Profit for the period The profit for the six months ended 30 June 2018 was approximately RMB306.9 million, representing a decrease of approximately 57.9% period-on-period as compared to approximately RMB728.7 million for the six months ended 30 June ,800,000 35% 306,900, ,700, % The decrease was mainly due to a decrease in turnover of approximately RMB639.8 million and an increase in administrative and other operating expenses of approximately RMB183.1 million despite the decreases in interest expenses of approximately RMB16.1 million, share-based payment expenses of approximately RMB54.5 million and income tax of approximately RMB184.0 million. 639,800, ,100,000 16,100,000 54,500, ,000,000 Profit attributable to owners of the Company Profit attributable to owners of the Company for the six months ended 30 June 2018 was approximately RMB308.7 million, a decrease of approximately 45.5% as compared to approximately RMB566.9 million for the six months ended 30 June Excluding the non-recurring gain on disposal of subsidiaries, gain on deemed disposal of subsidiaries, share-based payment expenses and certain other non-cash items, profit attributable to owners of the Company under non-generally accepted accounting principles ( GAAP ) for the six months ended 30 June 2018 was approximately RMB330.3 million, a decrease of approximately 3.3% as compared to approximately RMB341.7 million for the six months ended 30 June ,700, ,900, % 330,300, ,700, %

55 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Financial Review (Continued) Reconciliations of non-gaap measures to the nearest comparable GAAP measures The table below sets forth a reconciliation of profit attributable to owners of the Company to non-gaap profit attributable to owners of the Company for the period indicated: For the six months ended 30 June (Unaudited) (Unaudited) RMB 000 RMB 000 Profit attributable to owners of the Company 308, ,921 Adjustments for: Share-based payment expenses 36,991 91,510 Gain on disposal of subsidiaries (42,760) (408,098) Income tax arising from gain on disposal of subsidiaries 26,885 46,417 Gain on deemed disposal of subsidiaries (3,303) Change in fair value of preference share of a 48%-owned subsidiary 48% ,264 Non-GAAP profit attributable to owners of the Company 330, ,711 The Company s management believes that the non-gaap financial measures provide investors with useful supplementary information to assess the performance of the Group s core operations by excluding certain non-cash items and certain impact of acquisition or disposal transactions. Adoption of HKFRS 9 Financial Instruments The Group has adopted the complete version of HKFRS 9 Financial Instruments in its condensed consolidated financial statements with effect from 1 January As a result, the investments in equity securities of RMB429,511,000 that were previously classified as available-for-sale investments under HKAS 39 have been redesignated as equity investments measured at fair value through other comprehensive income of RMB364,558,000 and equity investments at fair value through profit or loss of RMB361,099,000. Also, an impairment based on the expected credit loss model on the Group s loan receivables of RMB12,360,000 has been made for the six months ended 30 June ,511, ,558, ,099,000 12,360, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

56 OUTLOOK AND STRATEGIES FOR 2018 Third party payment UCF Pay will further optimise its financial industry solutions, including bank custody for online lending, direct banking, industry chain finance and cloud platform. UCF Pay will continue to explore new custody banks for its bank custody service and serve other commercial banks for its direct banking service. UCF Pay will also explore overseas market and expand international payment business with preliminary focus on regions with strong market demands and growth potential in Southeast Asia. Shanghai Jifu will focus on promoting smart POS, a product that is launched after two years of research and development. Smart POS integrates convenience services and integration payment as a whole. Shanghai Jifu will take it as its core business, capture its growth potential in payment market and explore customers financial needs to offer comprehensive financial services systems for small and micro businesses, transitioning itself from the payment segment to the financial sector, thereby completing the transformation from payment to payment+. POS POS + Amigo Technologies has joined hands with partner banks to prepare for product development and software testing, and planned to launch marketing activities and offer services in the third quarter of Amigo Technologies Online investment and technology-enabled lending First House Loan will uphold its business philosophy of providing customer-oriented and professional services. First House Loan will continue to focus on corporate demands of key customer groups to offer them diversified financial services through various product supply, and further strengthen its core capabilities in risk management. In terms of business development, First House Loan will continue to expand into more innovative real estate financial business such as new house market, leasehold market and real estate asset management in order to meet more diversified financing needs of corporate and individual customers

57 OUTLOOK AND STRATEGIES FOR 2018 (Continued) Online investment and technology-enabled lending (Continued) Weshare will establish a five-in-one product and business system containing instant microcredit, large amount installment, Weshare Buy, cloud SaaS platform and traffic distribution platform to intensify the development in the FinTech sector in an attempt to capture greater market opportunities. In terms of business development, Weshare will pivot on Weshare Buy to promote the integration of the internet credit and scenario consumption, continue to deliver its technology capabilities in Weshare cloud platform and cooperate with high quality partners to co-create consumer finance products, enabling it to provide corporate customers with multiple core value services covering data, technology, risk control and asset management. Moreover, learning from successful experience, Weshare will strive to expand its global presence into the Southeast Asian market as well as countries and regions beyond these borders. Furthermore, Weshare will continue to facilitate the application of artificial intelligence and blockchain technology in the credit facilitation and reporting area. Weshare will closely monitor the development and issuance of requirements and regulations applicable to online investment and technology-enabled lending platforms in the PRC, and ensure regulatory compliance and rectification measures will be taken. buy SaaS buy LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE During the six months ended 30 June 2018, the Group s main source of funds was mainly from cash generated from financing activities. As at 30 June 2018, the Group had bank balances and cash of approximately RMB818.2 million (31 December 2017: approximately RMB969.2 million), of which approximately 66.7%, approximately 18.4%, approximately 12.8%, approximately 1.3%, approximately 0.5% and approximately 0.3% were denominated in RMB, US dollars, Hong Kong dollars ( HK$ ), Vietnamese Dong, Canadian Dollar and Singapore Dollar respectively. 818,200, ,200, % 18.4% 12.8% 1.3% 0.5% 0.3% As at 30 June 2018, the Group s interest-bearing borrowings, which mainly comprised corporate bonds, convertible bonds, bank and other borrowings, amounted to approximately RMB3,510.3 million (31 December 2017: approximately RMB3,127.0 million). The gearing ratio, representing the ratio of total borrowings to total assets of the Group, was 0.27 as at 30 June 2018 (31 December 2017: 0.25). 3,510,300,000 3,127,000, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

58 LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE (Continued) During the period under review, the Group did not use any financial instruments for hedging purposes. INDEBTEDNESS AND CHARGES ON ASSETS As at 30 June 2018, the Group had long term borrowings amounting to RMB112.8 million (31 December 2017: RMB115.2 million) and short term borrowings amounting to RMB1,781.0 million (31 December 2017: RMB1,644.9 million), of which RMB517.6 million was interest-bearing at fixed rate and secured by share charges on certain wholly-owned subsidiaries of the Group; and RMB268.5 million was interest-bearing at floating rate and secured by bank deposits of RMB282.7 million. The remaining borrowings amounting to RMB1,107.8 million were unsecured and interest-bearing at fixed rates. 112,800, ,200,000 1,781,000,000 1,644,900, ,600, ,500, ,700,000 1,107,800,000 As at 30 June 2018, the Group had long term unsecured corporate bonds in an aggregate principal amount of RMB362.9 million (31 December 2017: RMB61.7 million) and short term unsecured corporate bonds in an aggregate principal amount of RMB175.2 million (31 December 2017: nil). 362,900,000 61,700, ,200,000 As at 30 June 2018, the Group had long term unsecured liability component of convertible bonds amounting to RMB509.0 million (31 December 2017: RMB1,035.3 million) and short-term unsecured liability component of convertible bonds amounting to RMB569.4 million (31 December 2017: RMB269.8 million). 509,000,000 1,035,300, ,400, ,800,

59 MATERIAL ACQUISITIONS OR DISPOSALS OF SUBSIDIARIES AND AFFILIATED COMPANIES During the six months ended 30 June 2018, the Group has completed the following important transactions: the acquisition of 100% of the equity interest in the issued share capital of K&R from a third party independent to the Group, at a total consideration of approximately HK$109,988,000 (equivalent to approximately RMB87,946,000) satisfied by cash. K&R is engaged in the provision of third party payment services in Hong Kong. 100%109,988,000 87,946,000 the acquisition of 51% equity interest in the issued share capital of Glory Metro from a third party independent to the Group, at a total consideration of RMB178,500,000 satisfied by cash. Glory Metro is engaged in the provision of exhibition services in Hong Kong and the PRC. 51% 178,500,000 the disposal of its 100% equity interest in to independent third parties for a total cash consideration of approximately RMB407,542, % 407,542,000 STRUCTURED CONTRACTS For the six months ended 30 June 2018, the Group had a number of operations which were conducted pursuant to structured contracts which allowed the Group to indirectly own and control such operations: (A) Shanghai Yintong Dian Dang Company Limited* ( Shanghai Yintong ) Shanghai Yintong recorded revenue and a net loss of RMB0.09 million and RMB0.3 million, respectively for the six months ended 30 June 2018 (for the year ended 31 December 2017: revenue and a net loss of RMB0.01 million and RMB1.3 million, respectively). As at 30 June 2018, the total assets and net assets of Shanghai Yintong were RMB42.6 million and RMB42.7 million, respectively (as at 31 December 2017: RMB42.8 million and RMB43.1 million, respectively). (A) 90, ,000 10,0001,300,000 42,600,000 42,700,000 42,800,000 43,100, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

60 STRUCTURED CONTRACTS (Continued) (B) UCF Pay For the six months ended 30 June 2018, UCF Pay recorded revenue and a net profit of RMB181.6 million and RMB47.0 million, respectively (for the year ended 31 December 2017: revenue and a net profit of RMB355.2 million and RMB160.7 million, respectively). As at 30 June 2018, the total assets and the net assets of UCF Pay were RMB1,335.0 million and RMB548.0 million respectively (as at 31 December 2017: RMB1,069.0 million and RMB501.0 million, respectively). (C) Qiyuan For the six months ended 30 June 2018, Qiyuan recorded revenue and a net profit of RMB9.7 million and RMB2.8 million, respectively (for the year ended 31 December 2017: revenue and a net profit of RMB121.4 million and RMB19.3 million, respectively). As at 30 June 2018, the total assets and net asset of Qiyuan were RMB126.3 million and RMB90.2 million, respectively (as at 31 December 2017: RMB133.1 million and RMB87.4 million, respectively). (D) Shanghai Jifu For the six months ended 30 June 2018, Shanghai Jifu recorded revenue, a net profit and a total comprehensive income of RMB1,401.1 million, RMB180.5 million and RMB175.0 million, respectively (for the year ended 31 December 2017: revenue, a net profit and a total comprehensive income of RMB1,923.7 million, RMB313.5 million and RMB313.5 million, respectively). For the six months ended 30 June 2018, Shanghai Jifu declared a dividend of RMB600 million (for the year ended 31 December 2017: nil). As at 30 June 2018, the total assets and the net liabilities of Shanghai Jifu were RMB675.9 million and RMB129.7 million respectively (as at 31 December 2017: RMB688.0 million and net assets of RMB295.3 million, respectively). Share of results of associates for the six months ended 30 June 2018 was approximately RMB63.2 million (for the year ended 31 December 2017: RMB109.7 million). (B) 181,600,00047,000, ,200, ,700,000 1,335,000,000548,000,000 1,069,000,000501,000,000 (C) 9,700,000 2,800, ,400,00019,300, ,300,000 90,200, ,100,000 87,400,000 (D) 1,401,100, ,500,000175,000,000 1,923,700, ,500, ,500, ,000, ,900,000129,700, ,000, ,300,000 63,200, ,700,

61 STRUCTURED CONTRACTS (Continued) (E) Leyu Limited ( Leyu ) For the six months ended 30 June 2018, Leyu recorded revenue, a net profit and a total comprehensive income of RMB371.1 million, RMB3.8 million and RMB4.6 million, respectively (for the year ended 31 December 2017: revenue, a net profit and a total comprehensive income of RMB3,208.1 million, RMB517.3 million and RMB517.3 million, respectively). As at 30 June 2018, the total assets and the net assets of Leyu were RMB1,493.5 million and RMB507.6 million respectively (as at 31 December 2017: RMB2,030.5 million and RMB503.1 million, respectively). (E) Leyu Limited Leyu Leyu 371,100,000 3,800,000 4,600,000 3,208,100, ,300,000517,300,000 Leyu 1,493,500, ,600,000 2,030,500, ,100,000 FUTURE PLANS FOR MATERIAL INVESTMENTS OR CAPITAL ASSETS AND EXPECTED SOURCES OF FUNDING Save as disclosed under the sections headed Industry Trends and Outlook and Strategies for 2018 in this report, the Company had no specific future plans for material investments or capital assets as at 30 June INTERIM DIVIDEND The Group has resolved not to pay an interim dividend for the six months ended 30 June 2018 (six months ended 30 June 2017: Nil). CONTINGENT LIABILITIES As at 30 June 2018, the Group had no significant contingent liabilities (31 December 2017: Nil). 60 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

62 CAPITAL COMMITMENTS As at 30 June 2018, the Group had capital expenditure contracted for but not provided for in its financial statements of approximately RMB19.0 million (31 December 2017: RMB12.2 million). 19,000,000 12,200,000 FOREIGN EXCHANGE EXPOSURE The Group operates mainly in Hong Kong and the PRC. For its operations in Hong Kong, most of the transactions are denominated in HK$ and US dollars. The exchange rate of US dollars against HK$ is relatively stable and the related currency exchange risk is considered minimal. For operations in the PRC, most of the Group s transactions are denominated in RMB. Given the floating level of RMB against HK$ during the period under review, no financial instrument was used for hedging purposes. The Group is mainly exposed to the fluctuation of HK$ against RMB as certain of its bank balances, bank borrowings and corporate bonds are denominated in HK$ which is not the functional currency of the relevant group entities. The Group has not made other arrangements to hedge against the exchange rate risk. However, the Directors and management will continue to monitor the Group s foreign exchange exposure and will consider utilising applicable derivatives to hedge exchange risk if necessary. TREASURY POLICIES The Group adopts a conservative approach towards its treasury policies. The Group strives to reduce its exposure to credit risk by performing ongoing credit evaluations of the financial conditions of its customers. To manage liquidity risk, the Directors and management has been closely monitoring the Group s liquidity position to ensure that the liquidity structure of the Group s assets, liabilities and commitments can meet its funding requirements

63 EMPLOYEES AND REMUNERATION POLICIES As at 30 June 2018, the Group had a total of 1,371 staff and 15 contractors (31 December 2017: 1,454 staff and 15 contractors). Total staff costs (including Directors emoluments) were approximately RMB228.5 million for the six months ended 30 June 2018 (six months ended 30 June 2017: RMB220.2 million). Remuneration is determined by reference to market conditions and the performance, qualifications and experience of individual employees. Year-end bonuses based on individual performance will be paid to employees as recognition of and reward for their contributions. Other benefits include contributions to a statutory mandatory provident fund scheme, social insurance together with housing provident funds, central provident fund scheme and mandatory social security for its employees in Hong Kong, the PRC, Singapore and Vietnam, respectively. The Group operates a share option scheme for the purpose of providing incentives and rewards to eligible directors, employees and contractors of the Group, who contribute to the success of the Group s operations. 1, , ,500, ,200,000 ISSUE OF EQUITY SECURITIES On 31 January 2018, the Company allotted 28,768,000 ordinary shares to the subscriber as a result of the exercise of the conversion rights for the 7% Convertible Bonds in the principal amount of HK$1,000,000,000. There were 1,237,055,469 new shares might be issued pursuant to the convertible bonds as at 30 June For details, please refer to note 17 to the condensed consolidated financial statements on page 27 of this report. On 8 June 2018, the Company allotted 576,923,075 ordinary shares to the subscriber as a result of the exercise of the conversion rights for the 6% Convertible Bonds in the principal amount of HK$300,000,000. No remaining number of new shares might be issued pursuant to the convertible bonds as at 30 June For details, please refer to note 17 to the condensed consolidated financial statements on page 27 of this report. Save for the above disclosures, and the share option scheme of the Company as set out in the section of Other Information in this report and the convertible bonds disclosed in note 17 to the condensed consolidated financial statements, no equity-linked agreement that will or may result in the Company issuing shares or that require the Company to enter into any agreement that will or may result in the Company issuing shares was entered into by the Company during the period, or subsisted at the end of the period. 1,000,000,0007% 28,768,000 1,237,055, ,000,0006% 576,923, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

64 OTHER INFORMATION Directors and Chief Executive s Interests and Short Position in the Shares, Underlying Shares and Debentures of the Company and Its Associated Corporations As at 30 June 2018, the interests of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (the SFO )), which were required: (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules, to be notified to the Company and the Stock Exchange were as follows: 571 XV(a) XV 7 8 (b) 352 (c) GEM

65 OTHER INFORMATION (Continued) Directors and Chief Executive s Interests and Short Position in the Shares, Underlying Shares and Debentures of the Company and Its Associated Corporations (Continued) Interests in the ordinary shares of par value of HK$0.02 each of the Company (the Shares ) and the underlying Shares 0.02 Name of Directors/ Chief executive Capacity/ Nature of interests Number of Shares/ underlying Shares interested Note Total interests Approximate percentage of the Company s issued Shares* * Mr. Phang Yew Kiat Beneficial owner 235,000, ,000, % Mr. Chng Swee Ho Beneficial owner 20,000,000 63,000, % Beneficial owner 43,000,000 1 Mr. Sheng Jia Beneficial owner 43,000, ,400, % Family interest 400,000 2 Mr. Yang Jianhui Beneficial owner 1,000, ,000, % Mr. Li Gang Beneficial owner 30,000, ,000, % Mr. Zhang Zhenxin ( Mr. Zhang ) Beneficial owner 593,148,000 3,933,308, % Interest in controlled 3,250,160,000 4 corporations Family interest 90,000,000 5 Ms. Zhou Youmeng Beneficial owner 10,000, ,220, % Beneficial owner 220,000 7 Mr. Ge Ming Beneficial owner 19,400, ,400, % Dr. Ou Minggang Beneficial owner 14,400, ,400, % Dr. Wang Songqi Beneficial owner 1,000, ,000, % Dr. Yin Zhongli Beneficial owner 14,400, ,400, % 64 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

66 OTHER INFORMATION (Continued) Directors and Chief Executive s Interests and Short Position in the Shares, Underlying Shares and Debentures of the Company and Its Associated Corporations (Continued) Interests in the ordinary shares of par value of HK$0.02 each of the Company (the Shares ) and the underlying Shares (Continued) 0.02 Notes: 1. These interests represent the total underlying Shares comprised in the share options granted by the Company on 11 December 2014, 11 December 2015, 8 November 2016 and 23 March These interests represent the Shares held by Ms. Hu Haichen, the wife of Mr. Sheng Jia. Therefore, Mr. Sheng Jia was deemed to be interested in these Shares under the SFO. 3. These interests represent the total underlying Shares comprised in the share options granted by the Company on 23 March These Shares were held by Asia FinTech Company Limited ( Asia FinTech ), which was wholly-owned by Oceanic Plus Limited ( Oceanic Plus ), the entire issued share capital of which was owned by Mr. Zhang. Therefore, Mr. Zhang was deemed to be interested in these Shares under the SFO. 5. These Shares were held by Ms. Zhang Xiaomin ( Ms. Zhang ) who is the wife of Mr. Zhang. Therefore, Mr. Zhang was deemed to be interested in these Shares under the SFO. 6. These interests represent the underlying Shares comprised in the share options granted by the Company on 8 November 2016 and 23 March According to the register kept by the Company pursuant to section 352 of the SFO, Ms. Zhou had been recorded as having an interest in 1,140,000 Shares. However, it had been brought to the attention of the Company that she only held 220,000 shares, and the remaining 920,000 Shares were held by her son. As her son was above 18 years old and his interest did not constitute any family deemed interest of her under the SFO, she should not be deemed to have any interest in the said 920,000 Shares under the SFO. 8. These interests represent the total underlying Shares comprised in the share options granted by the Company on 11 December 2014, 11 December 2015, 12 December 2016 and 23 March These interests represent the total underlying Shares comprised in the share options granted by the Company on 11 December 2015, 12 December 2016 and 23 March Asia FinTech Company Limited Asia FinTech Asia FinTech ,140, , , ,

67 OTHER INFORMATION (Continued) Directors and Chief Executive s Interests and Short Position in the Shares, Underlying Shares and Debentures of the Company and Its Associated Corporations (Continued) Interests in the ordinary shares of par value of HK$0.02 each of the Company (the Shares ) and the underlying Shares (Continued) 0.02 Notes: (Continued) 10. On 19 August 2016, the Board announced its proposal of the Share Subdivision (as defined in the section headed Share Option Scheme below). An ordinary resolution to approve the Share Subdivision was duly passed by the shareholders of the Company (the Shareholders ) by way of poll at the extraordinary general meeting held on 15 September The Share Subdivision took effect on 19 September Accordingly, the number of underlying Shares comprised in each of the share options granted by the Company before 15 September 2016 was adjusted Mr. Wong Sai Hung resigned as a non-executive Director (the NED ) on 5 February For the period from 1 January 2018 to the date of his resignation, he was deemed to be interested in 28,000,000 underlying Shares, representing approximate 0.12% of the issued Shares. These interests represent the total underlying Shares comprised in the share options granted by the Company on 11 December 2014, 11 December 2015 and 8 November All interests stated above are long positions. * The percentage represents the total number of the Shares and the underlying Shares interested divided by the number of issued Shares as at 30 June 2018 (i.e. 23,124,208,080 Shares) ,000, % 12. * 23,124,208,080 Details of the above share options granted by the Company are set out under the section headed Share Option Scheme below. Save as disclosed above, as at 30 June 2018, none of the Directors or chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required: (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she was taken or deemed to have under such provisions of the SFO), or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein, or (c) pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules, to be notified to the Company and the Stock Exchange. XV (a) XV 7 8 (b) 352 (c) GEM CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

68 OTHER INFORMATION (Continued) Substantial Shareholders and Other Persons Interests and Short Positions in Shares and Underlying Shares As at 30 June 2018, so far as is known to the Directors, the following entities and persons, other than a Director and the chief executive of the Company, had interests or short positions in the Shares and underlying Shares as recorded in the register required to be kept by the Company under section 336 of the SFO: 336 Interests in the Shares Long Position Name of substantial Shareholders Capacity/ Nature of interests Number of Shares/ Underlying Shares interested Note Total interests Approximate percentage of the Company s issued Shares* * Asia FinTech Beneficial owner 3,250,160,000 3,250,160, % Oceanic Plus Interest in a controlled corporation 3,250,160, ,250,160, % Ms. Zhang Beneficial owner 90,000,000 3,933,308, % Family interest 3,843,308,000 1 Jiefang Media (UK) Co. Limited ( Jiefang Media ) Beneficial owner 1,689,272,000 1,905,037, % Beneficial owner 215,765,247 2 Shanghai Xinhua Distribution Group Limited Interest in a controlled corporation 1,905,037, ,905,037, % ( Xinhua Distribution ) Shanghai United Media Group ( United Media ) Interest in controlled corporations 1,905,037, ,905,037, % Shanghai Greenland Group Company Limited Interest in controlled corporations 1,905,037, ,905,037, % ( Greenland Group )

69 OTHER INFORMATION (Continued) Substantial Shareholders and Other Persons Interests and Short Positions in Shares and Underlying Shares (Continued) Interests in the Shares Long Position (Continued) Notes: 1. Out of the total 3,843,308,000 Shares, 3,250,160,000 Shares were held by Asia FinTech which was wholly-owned by Oceanic Plus, the entire issued share capital of which was owned by Mr. Zhang who is the husband of Ms. Zhang, and the remaining 593,148,000 Shares were held by Mr. Zhang. Therefore, Ms. Zhang was deemed to be interested in these Shares under the SFO. 2. These represented 215,765,247 underlying Shares in total to be issued to Jiefang Media upon its full conversion of the 7% convertible bonds due 2019 (the Convertible Bonds ) in the principal amount of HK$150,000,000 issued by the Company to Jiefang Media (subject to adjustments as set out in the conditions for issue of the Convertible Bonds). 3. These Shares were held by Jiefang Media. Jiefang Media was whollyowned by Xinhua Distribution which was in turn owned by United Media and its associates as to approximately 50.8% and Greenland Group as to approximately 39%. Therefore, under the SFO, Xinhua Distribution was deemed to be interested in all the Shares held by Jiefang Media, and each of United Media and Greenland Group was deemed to be interested in all the Shares which Xinhua Distribution was deemed to be interested in. * The percentage represents the total number of the Shares interested divided by the number of issued Shares as at 30 June 2018 (i.e. 23,124,208,080 Shares). 1. 3,843,308,0003,250,160,000 Asia FinTechAsia FinTech 593,148, ,000,000 7% 215,765, % 39% * 23,124,208,080 Save as disclosed above, as at 30 June 2018, according to the register required to be kept by the Company under section 336 of the SFO, there was no entity which or person who had any interest or short position in the Shares or underlying Shares, which would fall to be disclosed to the Company under the SFO CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

70 OTHER INFORMATION (Continued) Share Option Scheme The Company has adopted a share option scheme (the Share Option Scheme ) pursuant to the written resolution of the Shareholders on 4 November 2010 for the purpose of providing incentives or rewards to the eligible participants for their contribution to the Group and/or enabling the Group to recruit and retain highcalibre employees and attract human resources that are valuable to the Group. Eligible participants of the Share Option Scheme include the Directors, independent non-executive Directors (the INEDs ), employees of the Group, customers of the Group and consultants, advisers, managers, officers or entities that provide research, development or other technological support to the Group. The Company amended and refreshed the scheme mandate limit under the Share Option Scheme by ordinary resolutions passed by the Shareholders at an extraordinary general meeting held on 26 January The Company underwent a share subdivision of each issued and unissued ordinary share of HK$0.1 each in the share capital of the Company into five shares of HK$0.02 each (the Share Subdivision ) Upon the Share Subdivision becoming effective on 19 September 2016, the exercise prices of the outstanding options granted under the Share Option Scheme were adjusted from HK$1.814 per share, HK$2.13 per share, HK$3.37 per share and HK$3.49 per share to HK$ per Share, HK$0.426 per Share, HK$0.674 per Share and HK$0.698 per Share, respectively and the numbers of Shares to be issued upon the exercise of the options were adjusted from 182,125,000 shares, 30,629,000 shares, 91,920,000 shares and 137,600,000 shares to 910,625,000 Shares, 153,145,000 Shares, 459,600,000 Shares and 688,000,000 Shares, respectively. The above adjustments became effective on 19 September ,125,000 30,629,000 91,920, ,600,000910,625, ,145,000459,600, ,000,000 Share options comprising a total of 85,700,000 underlying Shares were granted during the six months ended 30 June 2018 (for the six months ended 30 June 2017: 7,250,000). Thus, there were 793,505,000 Shares available for issue under the Share Option Scheme, representing approximately 3.43% of issued Shares as at the date of this report (as at 31 December 2017: 871,355,000 Shares, representing approximately 3.87% of the Company s then issued Shares). 85,700,000 7,250, ,505, % 871,355, %

71 OTHER INFORMATION (Continued) Share Option Scheme (Continued) Details of movements of the share options granted under the Share Option Scheme for the six months ended 30 June 2018 were as follows: Category Date of grant Exercise period Exercise price per Share HK$ Weighted average closing price HK$ As at 1 January 2018 Number of underlying Shares comprised in the share options Granted during the period Exercised during the period Cancelled during the period Lapsed during the period As at 30 June 2018 Directors Mr. Phang Yew Kiat 11 December December 2015 to 10 December December December 2016 to 10 December November November 2017 to 7 November March March 2019 to 22 March 2028 Mr. Chng Swee Ho 11 December December 2015 to 10 December December December 2016 to 10 December November November 2017 to 7 November March March 2019 to 22 March 2028 Mr. Sheng Jia 11 December December 2015 to 10 December December December 2016 to 10 December November November 2017 to 7 November March March 2019 to 22 March ,000,000 (2) 50,000, ,000,000 (4) 25,000, ,000,000 (6) 100,000, ,000,000 (9) 60,000, ,000,000 (2) 15,000, ,000,000 (4) 15,000, ,000,000 (6) 10,000, ,000,000 (9) 3,000, ,000,000 (2) 15,000, ,000,000 (4) 15,000, ,000,000 (6) 10,000, ,000,000 (9) 3,000, CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

72 OTHER INFORMATION (Continued) Share Option Scheme (Continued) Category Date of grant Exercise period Exercise price per Share HK$ Weighted average closing price HK$ As at 1 January 2018 Number of underlying Shares comprised in the share options Granted during the period Exercised during the period Cancelled during the period Lapsed during the period As at 30 June 2018 Directors (Continued) Mr. Yang Jianhui 23 March March 2019 to 22 March 2028 Mr. Li Gang 11 December December 2015 to 10 December December December 2016 to 10 December November November 2017 to 7 November March March 2019 to 22 March 2028 Ms. Zhou Youmeng 8 November November 2017 to 7 November March March 2019 to 22 March 2028 Mr. Ge Ming 11 December December 2015 to 10 December December December 2016 to 10 December December December 2017 to 11 December March March 2019 to 22 March ,000,000 (9) 1,000, ,000,000 (2) 10,000, ,000,000 (4) 10,000, ,000,000 (6) 8,000, ,000,000 (9) 2,000, ,000,000 (6) 8,000, ,000,000 (9) 2,000, ,000,000 (2) 5,000, ,400,000 (4) 7,400, ,000,000 (7) 6,000, ,000,000 (9) 1,000,

73 OTHER INFORMATION (Continued) Share Option Scheme (Continued) Category Date of grant Exercise period Exercise price per Share HK$ Weighted average closing price HK$ As at 1 January 2018 Number of underlying Shares comprised in the share options Granted during the period Exercised during the period Cancelled during the period Lapsed during the period As at 30 June 2018 Directors (Continued) Dr. Ou Minggang 11 December December 2016 to 10 December December December 2017 to 11 December March March 2019 to 22 March 2028 Dr. Wang Songqi 23 March March 2019 to 22 March 2028 Dr. Yin Zhongli 11 December December 2016 to 10 December December December 2017 to 11 December March March 2019 to 22 March 2028 Former Directors Mr. Wang Wei # 11 December December 2015 to 10 December 2024 # 11 December December 2016 to 10 December December December 2017 to 11 December 2026 Mr. Wong Sai Hung* 11 December December 2015 to 10 December 2024 * 11 December December 2016 to 10 December November November 2017 to 7 November ,400,000 (4) 7,400, ,000,000 (7) 6,000, ,000,000 (9) 1,000, ,000,000 (9) 1,000, ,400,000 (4) 7,400, ,000,000 (7) 6,000, ,000,000 (9) 1,000, ,000,000 (2) 5,000, ,400,000 (4) 7,400, ,000,000 (7) 6,000, ,000,000 (2) 10,000, ,000,000 (4) 10,000, ,000,000 (6) 8,000, ,600,000 75,000, ,600,000 # Mr. Wang Wei resigned as an INED with effect from 1 April # * Mr. Wong Sai Hung resigned as a NED with effect from 5 February CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018 *

74 OTHER INFORMATION (Continued) Share Option Scheme (Continued) Category Date of grant Exercise period Exercise price per Share HK$ Weighted average closing price HK$ As at 1 January 2018 Number of underlying Shares comprised in the share options Granted during the period Exercised during the period Cancelled during the period Lapsed during the period As at 30 June 2018 Employees (in aggregate) 11 December December 2015 to 10 December June June 2016 to 7 June December December 2016 to 10 December July July 2017 to 4 July December December 2017 to 11 December March March 2018 to 30 March March March 2019 to 22 March ,830,000 (2) (20,625,000) 76,205, ,860,000 (3) (5,710,000) (3,125,000) 86,025, ,000,000 (4) (9,000,000) 53,000, ,600,500 (5) (5,080,000) (2,725,000) 80,795, ,100,000 (7) (1,200,000) (1,500,000) 39,400, ,000,000 (8) (500,000) 5,500, ,700,000 (9) 10,700,000 Consultants 11 December December 2015 to 10 December December December 2016 to 10 December July July 2017 to 4 July December December 2017 to 11 December ,390,500 10,700,000 (41,615,000) (7,850,000) 351,625, ,670,000 (2) (20,925,000) 585,745, ,000,000 (4) (2,200,000) 257,800, ,000,000 (5) (41,000,000) 345,000, ,000,000 (7) 200,000,000 1,452,670,000 (64,125,000) 1,388,545,000 Total 2,225,660,500 85,700,000 (105,740,000) (7,850,000) 2,197,770,

75 OTHER INFORMATION (Continued) Share Option Scheme (Continued) Notes: (1) The vesting period of the share options is from the date of grant until the commencement of the exercise period. (2) The share options are exercisable according to the following vesting schedule: (1) (2) (i) one-fourth of the share options shall vest on 10 December 2015; (i) (ii) one-fourth of the share options shall vest on 10 December 2016; (ii) (iii) one-fourth of the share options shall vest on 10 December 2017; and (iii) (iv) one-fourth of the share options shall vest on 10 December (iv) The closing price of the ordinary shares of HK$0.1 each immediately before the date on which the share options were granted was HK$1.79 per share (equivalent to HK$0.358 per Share). (3) The share options are exercisable according to the following vesting schedule: (3) (i) one-fourth of the share options shall vest on 7 June 2016; (ii) one-fourth of the share options shall vest on 7 June 2017; (i) (ii) (iii) one-fourth of the share options shall vest on 7 June 2018; and (iii) (iv) one-fourth of the share options shall vest on 7 June (iv) The closing price of the ordinary shares of HK$0.1 each immediately before the date on which the share options were granted was HK$2.13 per share (equivalent to HK$0.426 per Share) CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

76 OTHER INFORMATION (Continued) Share Option Scheme (Continued) Notes: (Continued) (4) The share options are exercisable according to the following vesting schedule: (4) (i) 40% of the share options shall vest on 10 December 2016; (i) 40% (ii) 30% of the share options shall vest on 10 December 2017; and (ii) 30% (iii) 30% of the share options shall vest on 10 December (iii) 30% The closing price of the ordinary shares of HK$0.1 each immediately before the date on which the share options were granted was HK$3.43 per share (equivalent to HK$0.686 per Share). (5) The share options are exercisable according to the following vesting schedule: (5) (i) 40% of the share options shall vest on 4 July 2017; (i) 40% (ii) 30% of the share options shall vest on 4 July 2018; and (ii) 30% (iii) 30% of the share options shall vest on 4 July (iii) 30% The closing price of the ordinary shares of HK$0.1 each immediately before the date on which the share options were granted was HK$3.04 per share (equivalent to HK$0.61 per Share). (6) The share options are exercisable according to the following vesting schedule: (6) (i) 40% of the share options shall vest on 7 November 2017; (i) 40% (ii) 30% of the share options shall vest on 7 November 2018; and (ii) 30% (iii) 30% of the share options shall vest on 7 November (iii) 30% The closing price of the Shares immediately before the date on which the share options were granted was HK$0.97 per Share

77 OTHER INFORMATION (Continued) Share Option Scheme (Continued) Notes: (Continued) (7) The share options are exercisable according to the following vesting schedule: (7) (i) 40% of the share options shall vest on 11 December 2017; (i) 40% (ii) 30% of the share options shall vest on 11 December 2018; and (ii) 30% (iii) 30% of the share options shall vest on 11 December (iii) 30% The closing price of the Shares immediately before the date on which the share options were granted was HK$0.76 per Share. (8) The share options are exercisable according to the following vesting schedule: 0.76 (8) (i) 40% of the share options shall vest on 30 March 2018; (i) 40% (ii) 30% of the share options shall vest on 30 March 2019; and (ii) 30% (iii) 30% of the share options shall vest on 30 March (iii) 30% The closing price of the Shares immediately before the date on which the share options were granted was HK$1.02 per Share. (9) The share options are exercisable according to the following vesting schedule: 1.02 (9) (i) 40% of the share options shall vest on 23 March 2019; (i) 40% (ii) 30% of the share options shall vest on 23 March 2020; and (ii) 30% (iii) 30% of the share options shall vest on 23 March (iii) 30% The closing price of the Shares immediately before the date on which the share options were granted was HK$0.96 per Share The fair value of the share options granted to the Directors and employees were calculated using the Black-Scholes option pricing model. The inputs into the model were as follows: 76 CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

78 OTHER INFORMATION (Continued) Share Option Scheme (Continued) The expected volatility of the share options granted under the Share Option Scheme was determined by using the historical volatility of the share price of comparable companies and the Company respectively. The expected life used in the model has been adjusted, based on management s best estimate, for the effects of nontransferability, exercise restrictions and behavioral considerations. 11 December June December July November December March March 2018 Inputs into the model Exercise price # # HK$ HK$0.426 HK$0.674 HK$0.698 HK$0.98 HK$0.786 HK$1.05 HK$ Expected volatility 41.71%-42.35% 44.56%-49.47% 48.48%-50.96% 36.00% 38.6%-52.79% 44.32%-53.52% 40% 30% Expected life 2-5 years 2-5 years 2-4 years years 10 years 10 years 10 years 10 years Expected dividend yield 0.676% 0.219% 0.287% 0.264% 0.164% 0.215% 0.12% 0.07% Risk-free rate 0.43%-1.237% 0.48%-1.31% 0.404%-0.895% 0.42%-0.93% 1.12% 1.57% 1.59% 2.03% The fair values of the share options granted to consultants were measured at the fair value of the services received. The Group recognised total expenses of approximately RMB36,991,000 for the six months ended 30 June 2018 (six months ended 30 June 2017: RMB91,500,000) in relation to share options granted by the Company. # restated as a result of the Share Subdivision effective on 19 September ,991,000 91,500,000 # Purchase, Sale or Redemption of Listed Securities The Company did not redeem any of its Shares listed and traded on the Stock Exchange, nor did the Company or any of its subsidiaries purchase or sell any of such Shares during the six months ended 30 June

79 OTHER INFORMATION (Continued) Corporate Governance The Board is of the view that the Company has complied with all the applicable code provisions set out in the Corporate Governance Code and Corporate Governance Report contained in Appendix 15 to the GEM Listing Rules and all the requirements of the GEM Listing Rules during the six months ended 30 June 2018 except for the following deviation. GEM GEM Code provision E.1.2 of the CG Code requires the chairman of the board of directors to attend the annual general meeting. Due to other business commitments which must be attended by Mr. Li Mingshan, the chairman of the Board (the Chairman ), Mr. Li was not able to attend the annual general meeting of the Company held on 8 May 2018 (the AGM ). Mr. Phang Yew Kiat, the vicechairman, an executive Director and the chief executive officer of the Company, acted as the chairman of the AGM to ensure an effective communication with the Shareholders. The Chairman had enquired about the questions raised and the opinions expressed by the Shareholders at the AGM. E.1.2 Compliance with Requirements under Rule 5.05A of the GEM Listing Rules Upon the appointment of Mr. Yang Jianhui as an executive Director on 8 November 2017, the Company did not have sufficient INEDs representing at least one-third of the Board under Rule 5.05A of the GEM Listing Rules. Immediately after the resignation of Mr. Wong Sai Hung as a NED on 5 February 2018, the Company has fulfilled the aforesaid requirements of Rule 5.05A of the GEM Listing Rules. Code of Conduct Regarding Securities Transactions by Directors The Company has adopted its securities dealing code (the Own Code ) regarding dealings in the Company s securities by the Directors on terms no less exacting than the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules (the Required Standard of Dealings ). A specific enquiry has been made by the Company with each of those who were the Directors during the six months ended 30 June 2018 and all of them have confirmed that they had complied with the required standards set out in the Required Standard of Dealings and the Own Code during such period. GEM5.05A GEM5.05A GEM 5.05A GEM CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018

80 OTHER INFORMATION (Continued) Competing Interests and Conflicts of Interest of Director For the six months ended 30 June 2018, the Directors were not aware of any business or interest of the Directors, the controlling shareholder (as defined in the GEM Listing Rules) of the Company nor their respective close associates (as defined in the GEM Listing Rules) that competed or might, directly or indirectly, compete with the business of the Group and any other conflicts of interest which any such person or entity had or might have with the Group, save that Mr. Zhang, a NED and a substantial shareholder (as defined in the GEM Listing Rules) of the Company, has an interest in the continuing connected transactions of the Company under the GEM Listing Rules relating to a sub-tenancy and master agreement for a business centre, as announced by the Company on 23 October 2014, 25 January 2017 and 15 December 2017, respectively. Mr. Zhang also has an indirect shareholding interest of 51.5% in NCF Wealth Holdings Limited (formerly known as First P2P Limited) ( NCF ), details of which are set out in the Company s announcement dated 12 January The Board considers that Mr. Zhang s interest in NCF is not competing with the Group in any material respect because NCF and the Group have different business focuses. Whilst NCF focuses on the investor/lender end of a fintech system, the Group focuses on the borrower end of a fintech system. As a result, NCF and the Group target at different market segments and are not competing with each other in any material respect. None of the controlling shareholders of the Company or the Directors or their respective close associates has any interest in any business which competes or potentially competes, either directly or indirectly, with the business of the Group in any material respect. GEM GEM GEM GEM NCF Wealth Holdings Limited P2P NCF 51.5% NCF NCF NCF NCF Review by Audit Committee The Audit Committee currently comprises four members, namely Mr. Ge Ming (chairman), Dr. Ou Minggang, Dr. Wang Songqi and Dr. Yin Zhongli, all being INEDs. The Group s unaudited condensed consolidated financial statements for the six months ended 30 June 2018 and this report have been reviewed by the Audit Committee. The Board is of the opinion that such financial information has been prepared in compliance with the applicable accounting standards, the requirements under the GEM Listing Rules and any other applicable legal requirements, and that adequate disclosures have been made. GEM

81 OTHER INFORMATION (Continued) Material Changes Save as disclosed in this interim report, there have been no material changes in respect of any other matters since the publication of the Company s 2017 annual report. Change of Directors and Chief Executive s Information Mr. Wong Sai Hung resigned as a NED with effect from 5 February 2018, details of which are set out in the Company s announcement dated 5 February Event(s) after the Reporting Period On 21 June 2018, Leading Finance Services Holding Company Limited ( Leading Finance ), an indirectly wholly-owned subsidiary of the Company, entered into an agreement to form a joint venture namely. Under the agreement, Leading Finance agreed to inject its 100% equity interest in in exchange for a 35.4% interest in the joint venture. Following the formation of joint venture on 13 July 2018, the Group has accounted for the joint venture as an associate. As of 31 July 2018, the Group transferred the datacenter in Georgia to BitFury Group Limited. 35.4% BitFury Group Limited By order of the Board Chong Sing Holdings FinTech Group Limited Li Mingshan Chairman Hong Kong, 7 August CHONG SING HOLDINGS FINTECH GROUP LIMITED INTERIM REPORT 2018