Shenzhen Textile B: Progress Announcement On Subsidiary'S 2018 Annual Performance Commitment Compensation

In October 31, 2019, Shenzhen City Textile (Group) Limited by Share Ltd (hereinafter referred to as "the company") subsidiary of Shenzhen Shengbo Photoelectric Technology Co., Ltd. (hereinafter referred to as "Shengbo optoelectronics") received the second phase 2018 performance pledge of Hangzhou Jinjiang Group Co., Ltd. (hereinafter referred to as "Jinjiang group") to make up 70 million yuan. According to the agreement on payment of performance commitments in 2018, the two sides confirmed that the amount of performance commitments in was 197 million 268 thousand and 700 yuan, and that the group of paid three times. To the announcement date, Sheng Bo photoelectric has received two performance commitments to make up the total amount of 120 million yuan. The relevant information is hereby announced as follows:

I. Basic Situation

In order to improve the operation of Shengbo optoelectronics company, the company introduced the Jinjiang group as a strategic investor at the end of 2016. It was a limited partnership established by the company, Shengbo optoelectronics, Jinjiang group and Jinjiang group as the actual controller. Hangzhou Jinhang equity investment fund partnership (limited partnership) (hereinafter referred to as "Jinhang investment") jointly signed the "Shenzhen wave optical technology Co., Ltd. capital increase agreement". Jinhang investment as the main body of the increase subscribed Shengbo optoelectronics 40% stake, the capital increase was RMB 1 billion 352 million 640 thousand yuan. Refer to the Announcement No. 2016-63 of giant tide information network (http://www.cninfo.com.cn) in December 28, 2016.

In order to give full play to the institutional advantages of private enterprises and the resource advantages of state-owned enterprises, the company signed a cooperation agreement with the Jinjiang group and Jinhang investment on the premise of consensus on the future management and development of Sheng Bo optoelectronics, and the Jinjiang group's commitment to Sheng Bo optoelectronics industry to achieve better results after the introduction of strategic investors. According to the cooperation agreement, the Jinjiang group will give full play to the advantages of Jinjiang group in terms of system, mechanism, industry and management and the successful experience of industry integration through Kam Hang's investment in Sheng Bo optoelectronics. It has made a performance commitment to Sheng Bo optoelectronics. The specific situations are as follows: sales revenue and net profit in 2017, 2018 and 2019 are no less than 1 billion 500 million yuan /5000 yuan, 2 billion yuan /1 billion yuan, and 2 billion 500 million yuan /1.5 billion yuan. In principle, the proportion of sales revenue of polaroid and related optical coatings products in total revenue is not less than 70% in 2017, and not less than 80% after 2018. If the above performance is not realized, the Jinjiang group shall make up cash in the net profit portion within 10 days from the date of the completion of the annual sales revenue and annual net profit. Refer to the Announcement No. 2016-67 of giant tide information network (http://www.cninfo.com.cn) in December 31, 2016.

In 2018, through the audit of Zhong Qin Wan Xin accounting firm (special general partnership), Sheng Bo photoelectric achieved an annual net profit of -9726.87 million yuan, operating income of 1 billion 125 million yuan, and the sales revenue of polaroid and related optical film products accounted for 74.01% of the total revenue. Although sales of key sales products continued to improve this year, the scale of product sales was not as good as expected. The difference between the three indicators of sales revenue, net profit and sales revenue of polaroid and related optical film products accounted for 875 million 459 thousand yuan, 197 million 268 thousand and 700 yuan and 5.99% respectively. Therefore, Sheng Bo photoelectric 2018 has not fulfilled its performance commitments. According to the agreement on cooperation, the Jinjiang group needs to make up the difference in net profit in cash. Refer to the special statement on the completion of Sheng Bo photoelectric 2018 annual performance pledge by http://www.cninfo.com.cn in April 27, 2019 and the special audit report on the performance of the Sheng Bo photoelectric 2018 annual performance pledge by Zhong Qin Wan Xin accounting firm (special general partnership).

Two. Progress

In line with the principle of cooperation and mutual understanding and mutual accommodation, the company and the Jinjiang group have reached agreement on the 2018 annual performance commitment through friendly consultation. On September 2019, after the twenty-first meeting of the seventh Nikkei Inc's 20 board of directors, the agreement on payment of performance commitments was signed (hereinafter referred to as the "payment agreement"). Refer to the September 21, 2019 announcement of the seventh meeting of the twenty-first meeting of the board of directors of the http://www.cninfo.com.cn (2019-45), the announcement on the progress of the company's signing of the <2018 annual performance pledge payment agreement and the subsidiary company's 2018 annual performance commitments (2019-47).

In October 9, 2019, the company held the first provisional shareholders' meeting in 2019 to consider and adopt the motion on signing the <2018 annual performance pledge payment agreement, and agreed to sign the payment agreement with the Jinjiang group. The payment agreement came into effect on the date of the first provisional shareholders' meeting in 2019.

In October 9, 2019, Sheng Bo photoelectric received the first 2018 annual performance commitments of the Jinjiang group to make up 50 million yuan. Refer to the announcement of the first extraordinary general meeting resolution 2019 (No. 2019-51) in October 10, 2019 and the announcement on the progress of the subsidiary's performance commitments compensation (No. 2019-52) in 2019.

In October 31, 2019, Sheng Bo photoelectric received the second phase 2018 performance pledge of Jinjiang group to make up 70 million yuan.

Three, risk warning

As of the announcement date, the Jinjiang group's remaining performance commitments of 77 million 268 thousand and 700 yuan should be paid before November 30, 2019. The company will continue to pay attention to and urge Jinjiang group to pay according to the agreement of payment agreement, and continue to fulfill the obligation of information disclosure according to the progress. If the Jinjiang group fails to pay the bill on time, the company will request the Jinjiang group to pay the penalty for breach of contract in accordance with the agreement of the payment agreement, so that investors should pay attention to the risk of investment.

Four. Reference documents

China Merchants Bank's collection receipt.

Notice hereby

Shenzhen textile (Group) Limited by Share Ltd

Board of directors

November 1st two 19