Hengxin Technology Ltd. — Interim / Quarterly Report 2014

Aug 27, 2014

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HENGXIN TECHNOLOGY LTD. 亨鑫科技有限公司[*]

(carrying on business in Hong Kong as HX Singapore Ltd.)

(incorporated in Singapore with limited liability)

(Singapore Company Registration Number 200414927H)

(Hong Kong Stock Code: 1085) (Singapore Stock Code: I85)

INTERIM REPORT FOR THE SECOND QUARTER AND SIX MONTHS ENDED 30 JUNE 2014

FINANCIAL HIGHLIGHTS

1. Revenue for the six months ended 30 June 2014 increased by approximately 43.7% to approximately RMB723.3 million

2. Gross profit increased by approximately 20.8% to approximately RMB120.0 million

3. Net profit attributable to equity holders of the parent increased by approximately 42.7% to approximately RMB47.1 million

4. Basic earnings per share was RMB0.12

5. No payment of interim dividend for the six months ended 30 June 2014 has been recommended

• for identification purpose only

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The board of directors (the “ Board ”) of Hengxin Technology Ltd. (the “ Company ”) is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (collectively hereinafter referred as the “ Group ”) for the six months ended 30 June 2014 and for the three months ended 30 June 2014 together with the comparative figures for the corresponding periods in 2013 as follow:

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June (“ 1H ”)

Notes Revenue 5 Cost of sales Gross profit Other income 6 Selling and distribution expenses Administrative expenses Other operating expenses Finance costs 7 Profit before income tax 8 Income tax expense 9 Net profit attributable to equity holders of parent Other comprehensive income Items that may be subsequently classified to profit or loss: Exchange difference arising from consolidation of foreign operations Total comprehensive income attributable to equity holders of the parent Earnings per share attributable to equity holders of the parent Basic and diluted(RMB cents) Dividends per share(RMB cents)

1H2014 1H2013 RMB’000 RMB’000 (unaudited) (unaudited) 723,253 503,186 (603,240) (403,874) 120,013 99,312 6,130 4,414 (34,561) (24,103) (16,754) (17,474) (15,167) (13,341) (2,349) (1,969) 57,312 46,839 (10,167) (13,829) 47,145 33,010 623 (49) 47,768 32,961 12.2 8.5 N.A. N.A.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the three months ended 30 June (“ 2Q ”)

Revenue Cost of sales Gross profit Other income Selling and distribution expenses Administrative expenses Other operating expenses Finance costs Profit before income tax Income tax expense Net profit attributable to equity holders of parent Other comprehensive income Items that may be subsequently classified to profit or loss: Exchange difference arising from consolidation of foreign operations Total comprehensive income attributable to equity holders of the parent Earnings per share attributable to equity holders of the parent Basic and diluted(RMB cents)	2Q2014 2Q2013 RMB’000 RMB’000 (unaudited) (unaudited) 414,482 301,242 (346,246) (240,792) 68,236 60,450 3,342 1,517 (19,359) (12,744) (9,629) (8,652) (7,203) (8,262) (1,242) (424) 34,145 31,885 (6,780) (10,644) 27,365 21,241 (83) (350) 27,282 20,891 7.1 5.5	2Q2014 2Q2013 RMB’000 RMB’000 (unaudited) (unaudited) 414,482 301,242 (346,246) (240,792) 68,236 60,450 3,342 1,517 (19,359) (12,744) (9,629) (8,652) (7,203) (8,262) (1,242) (424) 34,145 31,885 (6,780) (10,644) 27,365 21,241 (83) (350) 27,282 20,891 7.1 5.5
		20,891
		5.5

Profit before income tax is determined after charging (crediting) the following:

Allowance for inventory obsolescence Depreciation of property, plant and equipment Gain on disposal of available-for-sale investment (Gain) loss on disposal of property, plant and equipment Property, plant and equipment written off Amortisation of leasehold land Foreign exchange (gains) losses Interest expense Interest income Research and development expenses	Group 3 mths ended 30 Jun 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 93 — 4,283 5,057 (48) — — 66 32 — 206 140 (115) 2,537 1,242 424 (843) (427) 7,172 5,643	Change % N.M. –15.3% N.M. –100.0% N.M. 47.1% –104.5% 192.9% 97.4% 27.1%	Group 6 mths ended 30 Jun 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 93 — 8,751 10,114 (48) — (19) 66 32 — 346 280 (540) 3,385 2,349 1,969 (1,604) (1,449) 14,652 9,354	Change % N.M. –13.5% N.M. –128.8% N.M. 23.6% –116.0% 19.3% 10.7% 56.6%

N.M.: Not meaningful

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes ASSETS Current assets Cash and bank balances Pledged cash deposits Trade receivables 14 Other receivables and prepayments Inventories Leasehold land Total current assets Non-current assets Leasehold land Property, plant and equipment 13 Other receivables and prepayments Available-for-sale investment Deferred tax assets Total non-current assets Total assets LIABILITIES AND EQUITY Current liabilities Short term loans Trade payables 15 Other payables Income tax payable Total current liabilities NET CURRENT ASSETS	As 30 June 2014 RMB’000 (unaudited) 82,652 22,764 754,925 84,632 135,179 1,355 1,081,507 54,081 148,714 — 10,000 2,770 215,565 1,297,072 40,134 92,229 24,166 5,663 162,192 919,315	at 31 December 2013 RMB’000 (audited) 372,177 1,960 656,795 39,113 182,549 560 1,253,154 18,341 143,615 5,760 10,000 2,737 180,453 1,433,607 176,810 126,254 34,822 721 338,607 914,547

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Notes Non-current liabilities Deferred income Deferred tax liabilities Total non-current liabilities TOTAL LIABILITIES NET ASSETS Equity attributable to equity holders of the parent Share capital 11 General reserves Special reserve Translation reserve Accumulated profits TOTAL EQUITY	As at 30 June 2014 31 December 2013 RMB’000 RMB’000 (unaudited) (audited) 7,500 7,500 3,708 3,467 11,208 10,967 173,400 349,574 1,123,672 1,084,033 295,000 295,000 156,287 149,215 (6,017) (6,017) (697) (1,320) 679,099 647,155 1,123,672 1,084,033

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STATEMENT OF FINANCIAL POSITION — COMPANY LEVEL

ASSETS Current assets Cash and bank balances Other receivables and prepayments Amount due from subsidiaries Total current assets Non-current assets Property, plant and equipment Subsidiaries Total non-current assets Total assets LIABILITIES AND EQUITY Current liabilities Other payables Total current liabilities NET CURRENT ASSETS TOTAL LIABILITIES NET ASSETS Equity attributable to equity holders of the parent Share capital Accumulated profits TOTAL EQUITY TOTAL EQUITY AND LIABILITIES	As 30 June 2014 RMB’000 (unaudited) 25,123 226 75,000 100,349 7 392,544 392,551 492,900 4,763 4,763 95,586 4,763 488,137 295,000 193,137 488,137 492,900	at 31 December 2013 RMB’000 (audited) 17,215 172 95,914
		113,301
		— 392,544
		392,544
		505,845
		7,853
		7,853
		105,448
		7,853
		497,992
		295,000 202,992
		497,992
		505,845

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CONSOLIDATED STATEMENT OF CASH FLOWS

For the period ended 30 June

Group RMB’000 Operating activities Profit before income tax Adjustments for: Depreciation of property, plant and equipment Amortisation of leasehold land Allowance for inventory obsolescence (Gain) loss on disposal of property, plant and equipment Property, plant and equipment written off Interest expense Interest income Gain on disposal of available-for-sale investments Exchange differences arising on foreign currency translation Operating profit before working capital changes Trade receivables Other receivables and prepayments Inventories Trade and bill payables Other payables and accruals Cash (used in) generated from operations Interest paid Interest income received Income tax paid Net cash generated from (used in) operating activities

1 Apr 14 to 30 Jun 14 1 Apr 13 to 30 Jun 13 1 Jan 14 to 30 Jun 14 1 Jan 13 to 30 Jun 13 (unaudited) (unaudited) (unaudited) (unaudited) 34,145 31,885 57,312 46,839 4,283 5,057 8,751 10,114 206 140 346 280 92 — 92 — — 66 (19) 66 32 — 32 — 1,242 424 2,349 1,969 (843) (427) (1,604) (1,449) (48) — (48) — 4,622 1,567 5,592 2,734 43,731 38,712 72,803 60,553 19,359 (86,426) (98,130) (113,371) 2,423 (25,184) (45,519) (34,955) 35,942 692 47,278 6,399 (17,347) 39,308 (34,025) (32,986) 4,799 9,074 (10,656) 1,644 88,907 (23,824) (68,249) (112,716) (1,242) (424) (2,349) (1,969) 843 427 1,604 1,449 (4,276) (7,501) (5,017) (9,935) 84,232 (31,322) (74,011) (123,171)

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Group RMB’000 Investing activities Acquisition of leasehold land Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of available-for-sale investment Proceeds from disposal of available-for-sale investment Net cash used in investing activities Financing activities Repayment of short-term bank loans Proceeds from short-term bank loans Decrease (increase) in pledged bank deposits Dividends paid Net cash (used in) from financing activities Net decrease in cash and cash equivalents Effects of foreign exchange translation Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period

1 Apr 14 to 30 Jun 14 1 Apr 13 to 30 Jun 13 1 Jan 14 to 30 Jun 14 1 Jan 13 to 30 Jun 13 (unaudited) (unaudited) (unaudited) (unaudited) (36,881) — (36,881) — (11,996) (1,512) (13,925) (2,654) — 36 63 36 — — (10,000) — 10,048 — 10,048 — (38,829) (1,476) (50,695) (2,618) (176,810) — (176,810) (71,999) 40,134 — 40,134 60,000 (21,280) (42) (20,804) 19,348 (8,129) — (8,129) — (166,085) (42) (165,609) 7,349 (120,682) (32,840) (290,315) (118,440) 116 (1,401) 790 (2,248) 203,218 179,406 372,177 265,853 82,652 145,165 82,652 145,165

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STATEMENT OF CHANGES IN EQUITY

Consolidated Statement of Changes in Equity for the period ended 30 June 2014

	Share	General	Special	Translation	Accumulated
GROUP	capital	reserve	reserve	reserve	profits	Total
RMB’000
Balance at 1 January 2014	295,000	149,215	(6,017)	(1,320)	**647,155 **	1,084,033
Total comprehensive income for
the period	—	—	—	623	47,145	47,768
Dividends	—	—	—	—	(8,129)	(8,129)
Transfer to reserves	—	7,072	—	—	(7,072)	—
Balance at 30 June 2014	295,000	156,287	(6,017)	(697)	**679,099 **	1,123,672
Consolidated Statement of Changes	in Equity	for the	period ended 30 June 2013
	Share	General	Special	Translation	Accumulated
GROUP	capital	reserve	reserve	reserve	profits	Total
RMB’000
Balance at 1 January 2013	295,000	134,381	(6,017)	(1,098)	583,182	1,005,448
Total comprehensive income for
the period	—	—	—	(49)	33,010	32,961
Transfer to reserves	—	3,301	—	—	(3,301)	—
Balance at 30 June 2013	295,000	137,682	(6,017)	(1,147)	612,891	1,038,409

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STATEMENT OF CHANGES IN EQUITY

Statement of Changes in Equity of the Company for the period ended 30 June 2014

COMPANY Share capital RMB’000 Balance at 1 January 2014 295,000 Total comprehensive income for the period — Dividends — Balance at 30 June 2014 295,000 Statement of Changes in Equity of the Company for the period ended 30 COMPANY Share capital RMB’000 Balance at 1 January 2013 295,000 Total comprehensive income for the period — Balance at 30 June 2013 295,000	Accumulated profits Total 202,992 497,992 (1,726) (1,726) (8,129) (8,129) 193,137 488,137 June 2013 Accumulated profits Total 122,082 417,082 89,632 89,632 211,714 506,714

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The Company is a limited liability company incorporated in Singapore on 18 November 2004 under the Singapore Companies Act and its shares are dual primarily listed on the Singapore Exchange Securities Trading Limited (the “ SGX-ST ”) and The Stock Exchange of Hong Kong Limited (the “ SEHK ”) since 11 May 2006 and 23 December 2010 respectively. The registered office of the Company is located at 10 Anson Road #32-15, International Plaza, Singapore 079903. The principal place of business of the Group is located at No. 138 Taodu Road, Dingshu Town, Yixing City, Jiangsu Province, the People’s Republic of China (the “ PRC ”).

The Company is an investment holding company, and the principal activities of the Group are research, design, development and manufacture of telecommunications and technological products, production of radio frequency coaxial cables for mobile communications and mobile communications systems exchange equipment. The Group’s operations are principally conducted in the PRC.

The consolidated financial statements are presented in Renminbi (“ RMB ”), being the presentation currency of the Group.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The report has been prepared in accordance with the measurement and recognition criteria of the Singapore Financial Reporting Standards (“ SFRS ”). The report also include the applicable disclosure requirements of the Hong Kong Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and the Rules Governing the Listing of Securities on the SEHK (the “ Listing Rules ”).

The report is presented in RMB and all values are rounded to the nearest thousand (“ RMB’000 ”) except when otherwise indicated.

Accounting policies

The Group has applied the same accounting policies and methods of computation in the financial statements for the current financial period reported on, as in the recently audited consolidated financial statements for the financial year ended 31 December 2013.

3. APPLICATION OF SFRS

The Group adopted the new and revised SFRS that are mandatory for the financial periods beginning on or after 1 January 2014.

The adoption of new and revised SFRS did not have any impact on the results of the Group for the financial period ended 30 June 2014.

4. SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products, and currently has three reportable operating segments as follows:

• Manufacturing and sale of RF Coaxial Cable Series for mobile communications (“ RF Coaxial Cables ”)

• Telecommunications equipment and accessories (“ Accessories ”)

• Antennas and High Temperature Resistant Cables (“ Others ”)

– 11 –

An analysis by principal activity of contribution to the results is as follows:

Segment revenues and results

For management purpose, the Group is currently organised into three distinct core product lines — radio frequency coaxial cables, telecommunication equipment and accessories, and others (which includes Antennas and High Temperature Resistant Cables). These product lines are the basis on which the Group reports its primary segment information.

Segment revenue and expense include the operating revenue and expenses which are directly attributable to a segment and the relevant portion of such revenue and expense that can be allocated on a reasonable basis to a segment.

GROUP Six months ended 30 June 2014 Revenue Segment Results Segment profit Interest income Finance costs Other income Other expenses Profit before income tax Income tax Net profit for the period 2013 Revenue Segment Results Segment profit Interest income Finance costs Other income Other expenses Profit before income tax Income tax Net profit for the period	Radio frequency coaxial cables RMB’000 530,054 40,887 1,203 (1,769) 386,959 40,591 1,115 (1,522)	Telecommunication equipment and accessories RMB’000 173,920 13,387 394 (580) 113,398 11,876 327 (447)	Others RMB’000 19,279 1,506 — — 2,829 317 — —	Unallocated RMB’000 — (1,733) 7 — — (5,534) 7 —	Total RMB’000 723,253 54,047 1,604 (2,349) 4,526 (516) 57,312 (10,167) 47,145 503,186 47,250 1,449 (1,969) 2,965 (2,856) 46,839 (13,829) 33,010

• exclude research and development expenses

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Other segment information

Other segment information
GROUP Six months ended 30 June 2014 Capital expenditure Depreciation expense Amortisation of leasehold land Allowance for (reversal of) inventory obsolescence 2013 Capital expenditure Depreciation expense Amortisation of leasehold land Reversal of (Allowance for) inventory obsolescence Statement of net assets As at 30 June 2014 Assets: Segment assets Unallocated assets Total assets Liabilities: Segment liabilities Unallocated liabilities Total liabilities As at 31 December 2013 Assets: Segment assets Unallocated assets Total assets Liabilities: Segment liabilities Unallocated liabilities Total liabilities	Radio frequency coaxial cables RMB’000 10,354 5,346 254 48 1,961 7,149 216 — Radio frequency coaxial cables RMB’000 932,168 123,611 1,057,875 257,996	Telecommunication equipment and accessories RMB’000 3,396 1,753 83 (3) 576 2,099 64 — Telecommunication equipment and accessories RMB’000 305,219 40,473 330,048 80,492	Others RMB’000 167 1,652 9 — 117 865 — — Others RMB’000 34,329 4,553 28,297 3,235	Unallocated RMB’000 8 — — 47 — 1 — — Unallocated RMB’000 — 25,356 — 4,763 — 17,387 — 7,851	Total RMB’000 13,925 8,751 346 92
					2,654 10,114 280 —
					Total RMB’000 1,271,716 25,356
					1,297,072
					168,637 4,763
					173,400
					1,416,220 17,387
					1,433,607
					341,723 7,851
					349,574

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Geographical segment

The segmented information for geographical regions is based on the locations of customers and the location of the assets. In line with the group’s business strategy, the market is currently grouped into three geographical regions, namely Central Asia, South Asia and others.

	Revenue from external	customer	Non-current	assets*
	For the six months	ended	As at
	30 June		30 June	31 December
	2014	2013	2014	2013
	RMB’000	RMB’000	RMB’000	RMB’000
Central Asia	669,711	439,449	202,429	167,375
South Asia	28,631	25,380	366	341
Others	24,911	38,357	—	—
Total	723,253	503,186	202,795	167,716

• excludes available-for-sale investment and deferred tax assets

5. REVENUE

Revenue, which is also the Group’s turnover, represents the net invoiced value of goods sold, after deduction of relevant taxes and allowances for returns and trade discounts. An analysis of the Group’s revenue, other income and gains is as follows:

Sale of goods OTHER INCOME Government grants Interest income Compensation claims received Foreign exchange gains Gain on disposal of available-for-sale investment Others Total	For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 723,253 503,186 For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 3,527 2,509 1,604 1,449 156 274 540 — 48 — 255 182 6,130 4,414	For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 723,253 503,186 For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 3,527 2,509 1,604 1,449 156 274 540 — 48 — 255 182 6,130 4,414
		4,414

6. OTHER INCOME

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7. FINANCE COSTS

FINANCE COSTS
	For the six months ended
	30 June
	2014	2013
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Interest on short term bank borrowings	2,349	1,969

8. PROFIT BEFORE INCOME TAX

Profit before tax is arrived at after charging/(crediting) the following during the period:

Cost of inventories recognised as expense (including allowance of (reversal of) inventory obsolescence) Depreciation of property, plant and equipment Amortisation of leasehold land Employee benefits expense Cost of defined contribution plans Directors’ fees — directors of the Company Directors’ remuneration: Directors of the Company Directors of the subsidiaries Total staff costs Net foreign exchange (gain) loss (Gain) Loss on disposal of property, plant and equipment Property, plant and equipment written off Gain on disposal of available-for-sale investment	For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 603,147 403,874 8,751 10,114 346 280 39,413 23,504 1,860 1,515 872 797 1,083 952 18 20 43,246 26,788 (540) 3,385 (19) 66 32 — (48) —	For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 603,147 403,874 8,751 10,114 346 280 39,413 23,504 1,860 1,515 872 797 1,083 952 18 20 43,246 26,788 (540) 3,385 (19) 66 32 — (48) —
		26,788
		3,385 66 — —

9. INCOME TAX EXPENSE

Current Deferred	For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 9,959 13,512 208 317 10,167 13,829	For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 9,959 13,512 208 317 10,167 13,829
		13,829

The Company is incorporated in Singapore and is subject to income tax rate of 17% for the six months ended 30 June 2014 (2013: 17%).

Under the law of the People’s Republic of China on Enterprise Income Tax (the “ EIT Law ”), applicable income tax rate of Jiangsu Hengxin Technology Co. Ltd, the Group’s PRC incorporated key subsidiary, in 2014 is 15% (2013: 15%).

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Taxes on profits elsewhere have been calculated at the rates of tax prevailing in the country in which the Group operates.

10. DIVIDENDS

The Company did not recommend or declare any interim dividend for the six months ended 30 June 2014. No interim dividend was also declared nor paid for the previous financial period ended 30 June 2013.

11. SHARE CAPITAL

Details of the changes in the Company’s share capital are as follows:

Share capital — Ordinary Shares	No. of shares
	’000	RMB’000	S$ ’000
Balance as at 31 December 2013
and 30 June 2014	388,000	295,000	58,342

In accordance with the memorandum of association and articles of association of the Company, treasury shares are not allowed in the Company.

12. EARNINGS PER SHARE

Earnings per share is calculated by dividing the Group’s net profit attributable to shareholders for the period by the weighted average number of ordinary shares outstanding during the period.

Earnings per share_(RMB) — Basic — Diluted Weighted average no. of shares applicable to basic EPS(’000) Weighted average no. of shares based on fully diluted basis(’000)_	Group 3 months ended 30-Jun-14 30-Jun-13 (unaudited) (unaudited) 7.1 5.5 7.1 5.5 388,000 388,000 388,000 388,000	Group 6 months ended 30-Jun-14 30-Jun-13 (unaudited) (unaudited) 12.2 8.5 12.2 8.5 388,000 388,000 388,000 388,000	Group 6 months ended 30-Jun-14 30-Jun-13 (unaudited) (unaudited) 12.2 8.5 12.2 8.5 388,000 388,000 388,000 388,000
			8.5
			388,000 388,000

There were no potential dilutive ordinary shares in existence during the period ended 30 June 2013 and 2014.

13. PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2014, the Group’s capital expenditure was approximately RMB13.9 million (2013: RMB2.7 million).

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14. TRADE RECEIVABLES

TRADE RECEIVABLES
Trade receivables Allowance for doubtful debts Net Notes receivable Total	30 June 2014 RMB’000 (unaudited) 657,187 (15,762) 641,425 113,500 754,925	31 December 2013 RMB’000 (audited) 609,413 (15,762)
		593,651 63,144
		656,795

The Group allows credit period of 180 days to its trade customers. The aging of trade receivables, net of allowance for doubtful debts presented based on the invoice date at the end of the reporting period is as follows:

0 to 180 days 181 to 360 days 1 to 2 years TRADE PAYABLES Trade payables Bill payables	30 June 2014 RMB’000 (unaudited) 591,447 136,305 27,173 754,925 30 June 2014 RMB’000 (unaudited) 92,229 — 92,229	31 December 2013 RMB’000 (audited) 518,088 69,083 69,624
		656,795
		31 December 2013 RMB’000 (audited) 126,254 —
		126,254

15. TRADE PAYABLES

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Trade payables comprise amounts outstanding for trade purchases. Payment terms with suppliers are mainly on credit within 90 days from the invoice date. The aging of trade payables and notes payables are as follows:

0 to 90 days 91 to 180 days 181 to 360 days Over 360 days	30 June 2014 RMB’000 (unaudited) 85,997 2,633 1,172 2,427 92,229	31 December 2013 RMB’000 (audited) 120,242 3,500 1,074 1,438
		126,254

16. NET ASSET VALUE

The net asset value per ordinary share of the Group and Company is shown below:

Net Assets_(RMB’000) Number of ordinary shares(’000) Net Asset Value per ordinary share(RMB)_	Group 30-Jun-14 31-Dec-13 (unaudited) (audited) 1,123,672 1,084,033 388,000 388,000 2.90 2.79	Company 30-Jun-14 31-Dec-13 (unaudited) (audited) 488,137 497,992 388,000 388,000 1.26 1.28	Company 30-Jun-14 31-Dec-13 (unaudited) (audited) 488,137 497,992 388,000 388,000 1.26 1.28
			1.28

17. RELATED PARTY TRANSACTIONS

(a) Transactions

During the period, the Group had the following significant transactions with Suzhou Hengli Telecommunications Materials Co. Ltd:

Materials Co. Ltd:
	For the six months	ended 30 June
	2014	2013
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Purchase of raw materials	5,475	1,117

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(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the period were as follows:

Short term benefits Retirement benefits scheme contribution Total CAPITAL COMMITMENTS Contracted but not provided for: Property, plant and equipment Donation commitment Total	For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 2,178 1,800 61 61 2,239 1,861 As at 30 June 31 December 2014 2013 RMB’000 RMB’000 8,723 73 6,000 6,500 14,723 6,573	For the six months ended 30 June 2014 2013 RMB’000 RMB’000 (unaudited) (unaudited) 2,178 1,800 61 61 2,239 1,861 As at 30 June 31 December 2014 2013 RMB’000 RMB’000 8,723 73 6,000 6,500 14,723 6,573
		1,861
		at 31 December 2013 RMB’000 73 6,500
		6,573

18. CAPITAL COMMITMENTS

19. OPERATING LEASE ARRANGEMENTS

As at 30 June 2014, the Group had total future minimum lease payments under non-cancellable operating leases, which are payable as follows:

Within one year In the second to fifth years inclusive	As 30 June 2014 RMB’000 845 18 863	at 31 December 2013 RMB’000 801 302
		1,103

Operating lease payments represent rentals payable by the Group and Company for certain of its office and workshop properties. Leases are negotiated for an average of 1 to 3 years.

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(I) MANAGEMENT DISCUSSION AND ANALYSIS

Half year performance — Six months ended 30 June

Material changes are explained below:

Revenue

Revenue increased by approximately RMB220.1 million, or approximately 43.7% from approximately RMB503.2 million in the six months ended 30 June 2013 (“ 1H2013 ”) to approximately RMB723.3 million in the six months ended 30 June 2014 (“ 1H2014 ”) due to increased orders for the Group’s products during the period.

RF Coaxial Cable

Revenue generated from RF Coaxial Cables increased by approximately RMB143.1 million or approximately 37.0% from approximately RMB387.0 million in 1H2013 to approximately RMB530.1 million in 1H2014.

Telecommunication equipment and accessories

Revenue generated from Accessories increased by approximately RMB60.5 million or approximately 53.4% from approximately RMB113.4 million in 1H2013 to approximately RMB173.9 million in 1H2014.

Others (HTRC and Antenna)

Revenue generated in this segment increased by approximately RMB16.5 million or approximately 589.3% from approximately RMB2.8 million in 1H2013 to approximately RMB19.3 million in 1H2014.

Gross profit margin

The Group achieved an overall gross profit margin of approximately 16.6% in 1H2014 compared to approximately 19.7% in 1H2013. Increased competition has led to continuing pressures on the Group’s selling prices during the period. The Group continues to monitor production efficiencies to ensure optimal raw materials and labour utilisation, stringent selection of suppliers in tender biddings to keep costs to a minimum, coupled with efficient use of various resources to keep up with price pressures resulting from keen competition.

Other income

Other income increased by approximately RMB1.7 million or approximately 38.6% from approximately RMB4.4 million in 1H2013 to approximately RMB6.1 million in 1H2014, which is due to higher government grants awarded to the Group’s key subsidiary, Jiangsu Hengxin Technology Co., Ltd. and a gain in foreign exchange during the period as compared to a loss in the corresponding period.

Selling and distribution expenses

Selling and distribution expenses increased by approximately RMB10.5 million or approximately 43.6% from approximately RMB24.1 million in 1H2013 to approximately RMB34.6 million in 1H2014, which is in line with the Group’s higher sales during the period.

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Administrative expenses

Administrative expenses decreased by approximately RMB0.7 million or approximately 4.0% from approximately RMB17.5 million in 1H2013 to approximately RMB16.8 million in 1H2014. The decrease is due to certain cost reductions during the period.

Other operating expenses

Other operating expenses increased by approximately RMB1.9 million or approximately 14.3% from approximately RMB13.3 million in 1H2013 to approximately RMB15.2 million in 1H2014. The increase arose from continued customer requests for new product specifications during the period.

Finance costs

Finance costs increased by approximately RMB0.3 million or approximately 15.0% from approximately RMB2.0 million in 1H2013 to approximately RMB2.3 million in 1H2014 due to higher level of borrowings during the period.

Profit before income tax

Profit before income tax increased by approximately RMB10.5 million or approximately 22.4% from approximately RMB46.8 million in 1H2013 to approximately RMB57.3 million in 1H2014 due to increased revenue during the period.

Income tax expense

The Group’s main subsidiary has been subject to an incentive tax rate of 15% as it has been awarded as a high-tech enterprise in the PRC since 2011.

Income tax expense decreased by approximately RMB3.6 million or approximately 26.1% from approximately RMB13.8 million in 1H2013 to approximately RMB10.2 million in 1H2014. The decrease in income tax expenses is due to an absence of withholding taxes of approximately RMB5.0 million being paid for inter-company dividends declared from the Group’s China subsidiary to its holding company in 1H2013.

Net profit

In view of the above, net profit attributable to equity holders of the parent increased by approximately RMB14.1 million or approximately 42.7% from approximately RMB33.0 million in 1H2013 compared to approximately RMB47.1 million in 1H2014.

Second quarter performance — Three months ended 30 June

Revenue

Group revenue increased by approximately RMB113.3 million, or approximately 37.6% from approximately RMB301.2 million in the three months ended 30 June 2013 (“ 2Q2013 ”) to approximately RMB414.5 million in the three months ended 30 June 2014 (“ 2Q2014 ”) as a result of increased orders for the Group’s products during the period.

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RF Coaxial Cable

Revenue generated from RF Coaxial Cables increased by approximately RMB70.8 million or approximately 30.3% from approximately RMB233.6 million in 2Q2013 to approximately RMB304.4 million in 2Q2014.

Telecommunication equipment and accessories

Revenue generated from Accessories increased by approximately RMB35.6 million or approximately 53.3% from approximately RMB66.8 million in 2Q2013 to approximately RMB102.4 million in 2Q2014.

Others (HTRC and Antenna)

Revenue generated in this segment increased by approximately RMB6.9 million or approximately 862.5% from approximately RMB0.8 million in 2Q2013 to approximately RMB7.7 million in 2Q2014.

Gross profit margin

Gross profit margin for 2Q2014 stood at approximately 16.5% compared to approximately 20.1% in 2Q2013, primarily due to increased competition leading to continued pressures on the Group’s selling prices during the period.

Other income

Other income increased by approximately RMB1.8 million or approximately 120.0% from approximately RMB1.5 million in 2Q2013 to approximately RMB3.3 million in 2Q2014 as a result of higher interest income and government grants received during the period.

Selling and distribution expenses

Selling and distribution expenses increased by approximately RMB6.7 million or approximately 52.8% from approximately RMB12.7 million in 2Q2013 to approximately RMB19.4 million in 2Q2014, which is in line with the Group’s increased revenue during the period.

Administrative expenses

Administrative expenses increased by approximately RMB0.9 million or approximately 10.3% from approximately RMB8.7 million in 2Q2013 to approximately RMB9.6 million in 2Q2014. The increase is due to an increase in staff costs which are partially offset by certain cost reduction during the period.

Other operating expenses

Other operating expenses decreased by approximately RMB1.1 million or approximately 13.3% from approximately RMB8.3 million in 2Q2013 to approximately RMB7.2 million in 2Q2014. The decrease was due to foreign exchange losses in 2Q2013 as compared to a gain in 2Q2014.

Finance costs

Finance costs increased by approximately RMB0.8 million or approximately 200.0% from approximately RMB0.4 million in 2Q2013 to approximately RMB1.2 million in 2Q2014 as there were a higher level of borrowings in 2014 compared to the same period in 2013.

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Profit before income tax

Profit before income tax increased by approximately RMB2.2 million or approximately 6.9% from approximately RMB31.9 million in 2Q2013 to approximately RMB34.1 million in 2Q2014 as a result of increased revenue during the period.

Income tax expense

The Group’s main subsidiary has been subject to an incentive tax rate of 15% as it has been awarded as a high-tech enterprise in the PRC since 2011. The increase in income tax expenses is due to withholding taxes of RMB5.0 million being paid for dividends declared from the Group’s China subsidiary to its holding company during the period.

Income tax expense decreased by approximately RMB3.8 million or approximately 35.8% from approximately RMB10.6 million in 2Q2013 to approximately RMB6.8 million in 2Q2014. The decrease is due to an absence of withholding taxes of approximately RMB5.0 million being paid for inter-company dividends declared from the Group’s China subsidiary to its holding company in 2Q2013.

Net profit

In view of the above, net profit attributable to equity holders of the parent increased by approximately RMB6.2 million or approximately 29.2% from approximately RMB21.2 million in 2Q2013 to approximately RMB27.4 million in 2Q2014.

Statement of Financial Position

Material fluctuations of items in the statement of financial position are explained below:

Pledged bank deposits

Pledged bank deposits are used as security for commercial bills used for payment to suppliers. Pledged bank deposits increased by approximately RMB20.8 million or approximately 1,040.0% from approximately RMB2.0 million as at 31 December 2013 to approximately RMB22.8 million as at 30 June 2014 mainly due to funds being pledged to a bank for a bank borrowing during the period.

Trade receivables

Trade receivables increased by approximately RMB98.1 million or approximately 14.9% from approximately RMB656.8 million as at 31 December 2013 to approximately RMB754.9 million as at 30 June 2014.

Average trade receivables turnover days are 192 days as at 30 June 2014 compared to 193 days as at 31 December 2013 and 211 days as at 31 March 2014.

Nonetheless, most trade receivables balances are recent sales which are well within the average credit period given to our customers.

For amounts due more than six months and longer, these mainly pertain to final payment (upon project completion) owed by the three main PRC telecom operators. These outstanding balances relate to projects undertaken by these operators which had longer project completion date than as initially anticipated. These operators have been the Group’s long-time customers and the

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Group has been receiving regular payments from them. In view of the Group’s long-standing dealings with them and the regular receipts it had obtained from these customers, the Group does not foresee any issue in the collection of these receivables.

The Group will endeavour to continue its collection efforts on the outstanding balances.

Other receivables and prepayments

Other receivables and prepayments increased by approximately RMB45.5 million or approximately 116.4% from approximately RMB39.1 million as at 31 December 2013 to approximately RMB84.6 million as at 30 June 2014. Of this balance, approximately RMB46.9 million relates to advances made to suppliers, compared to approximately RMB10.0 million as at 31 December 2013. The increase in such advances was to enable the Group obtain better pricing from suppliers.

Inventories

Inventories (comprising raw materials, work-in-progress and finished goods) decreased by approximately RMB47.3 million or approximately 25.9% from approximately RMB182.5 million as at 31 December 2013 to approximately RMB135.2 million as at 30 June 2014. The decrease is in response to relatively lower orders during the end of the financial period.

Property, plant and equipment

Property, plant and equipment increased by approximately RMB5.1 million or approximately 3.6% from approximately RMB143.6 million as at 31 December 2013 to approximately RMB148.7 million as at 30 June 2014. During the period, the Group, through an agreement entered into with Yixing Ruidi Copper Co., Ltd, agreed to acquire a dormitory amounting to approximately RMB 7.2 million.

The above purchase accounted mainly for the increase during the period.

Leasehold Land

Leasehold land increased by approximately RMB 36.5 million or approximately 193.1% from approximately RMB 18.9 million as at 31 December 2013 to approximately RMB 55.4 million as at 30 June 2014. During the period, the Group, through an agreement entered into with Yixing Ruidi Copper Co., Ltd, agreed to acquire certain leasehold land for its own use, amounting to a total of approximately RMB 35.8 million. Part of the purchase price was being offset against the deposit paid amounting to approximately RMB 5.76 million which was previously classified as “Other receivables and prepayments” under non-current assets.

Short-term bank loans

Short-term bank loans decreased by approximately RMB136.7 million or approximately 77.3% from approximately RMB176.8 million as at 31 December 2013 to approximately RMB40.1 million as at 30 June 2014 due to a loan repayment made during the financial period.

Trade payables and Other payables

Trade payables decreased by approximately RMB34.1 million or approximately 27.0% from approximately RMB126.3 million as at 31 December 2013 to approximately RMB92.2 million as at 30 June 2014 in line with relatively lower orders at the end of the financial period.

– 24 –

Other payables decreased by approximately RMB10.6 million or approximately 30.5% from approximately RMB34.8 million as at 31 December 2013 to approximately RMB24.2 million as at 30 June 2014 as accruals made in 2013 were paid during the period.

Income tax payable

Income tax payable increased by approximately RMB5.0 million or approximately 714.3% from approximately RMB0.7 million as at 31 December 2013 to approximately RMB5.7 million in 30 June 2014.

Cash and bank balances

Cash and bank balances decreased RMB289.5 million or approximately 77.8% from RMB372.2 million as at 31 December 2013 compared to RMB82.7 million as at 30 June 2014 mainly due to the increased use of working capital from higher sales achieved and a repayment of bank borrowings during the period.

(II) LIQUIDITY, FINANCIAL RESOURCES

In addition to its short-term interesting-bearing facilities, the Group generally finances its operations from cash flows generated internally.

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to shareholders through the optimization of debt and equity balance.

The management of the Group monitors capital based on the Group net gearing ratio. The Group net gearing ratio is calculated as net borrowings divided by total equity. Net borrowings are calculated as total short-term loans less cash and cash equivalents at the end of the reporting period.

Net cash borrowings Total equity Net debt to equity ratio_(%)_	As at 30 June 31 December 2014 2013 RMB’000 RMB’000 (unaudited) (audited) (42,518) (195,367) 1,123,672 1,084,033 (3.78) (18.02)

Amount repayable in one year or less, or on demand:

As at 30 June 2014		As at 31 December 2013
Secured	Unsecured	Secured	Unsecured
RMB’000	RMB’000	RMB’000	RMB’000
(unaudited)	(unaudited)	(audited)	(audited)
20,134	20,000	—	176,810

As at 30 June 2014, the secured bank borrowing is secured by way of a deposit being pledged with the same bank. There is no amount repayable after one year.

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(III) PROSPECTS (A COMMENTARY AT THE DATE OF THE ANNOUNCEMENT OF THE COMPETITIVE CONDITIONS OF THE INDUSTRY IN WHICH THE GROUP OPERATES AND ANY KNOWN FACTORS OR EVENTS THAT MAY AFFECT THE GROUP IN THE NEXT REPORTING PERIOD AND THE NEXT 12 MONTHS)

The growth of OTT (Over-The-Top) services have continued to change the broad telecommunications landscape, witnessing a trend of telecommunication services gradually using alternative technologies, such as through ISPs (Internet Service Providers). As a result, the rate of revenue increase from telecommunications services has tapered over the years. Telecom operators therefore are adopting a more conservative approach in capital spending.

China issued 4G licenses to the three major telecom operators in the PRC in December 2013. This directly increased our sales during the first half of 2014. As described above, the adoption of the old models of simply adding capacity due to increasing demand would inadvertently increase telecom operators’ capital expenditure. Hence telecom operators are exploring efficient uses of existing infrastructure and assets, which could potentially affect the demand for our products.

4G telecommunications require a much higher data capacity and transmission, and this constraint has led to smaller but a larger number of base stations being built but covering a smaller area with higher transmission capacity. These newer base stations adopt smaller sized cables, which have lower selling prices compared to larger cables. However, technology evolvement has also led to other possible alternative products to be used on base stations. The combination of the above elements, coupled with rising competition between telecom operators and telecom equipment suppliers alike are exacting an impact on our margins moving forward.

Looking ahead, the telecoms industry especially in the area of RF cabling systems continues to remain challenging. The Group will continue its efforts to monitor changing market conditions closely, make proactive refinements on the business strategies. Resources will also be devoted to broadening its product variety as well as enhancing its branding.

Directors’ and Chief Executive’s Interests and Short Positions in Shares and Underlying Shares and Debentures

As at 30 June 2014, the interests and short positions of the directors (the “ Directors ”) and chief executives of the Company in shares and underlying shares and debentures of the Company or 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 are required to be notified to the Company and SEHK pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest and short positions which they are deemed or taken to have under such provisions of the SFO) or which are required to be entered into, as recorded in the register required to be kept by the Company pursuant to Section 352 of Part XV of the SFO, or as otherwise notified to the Company and the SEHK pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) as set out in Appendix 10 of the Listing Rules, were as follows:

– 26 –

Long positions in the Company:

Number of issued shares in the Company

				Approximate
				percentage of the
	Personal	Corporate	Total	Company’s issued
Name of Directors	interests	interests	interests	share capital
Mr Cui Genxiang(1)	—	90,294,662	90,294,662	23.27%
Ms Zhang Zhong(2)	—	28,082,525	28,082,525	7.24%

Notes:

• (1) Mr Cui Genxiang beneficially owns the entire issued share capital of Kingever Enterprises Limited (“ Kingever ”), and Kingever in turn holds approximately 23.27% of the total issued shares in the Company.

• (2) Ms Zhang Zhong beneficially owns the entire issued share capital of Wellahead Holdings Limited (“ Wellahead ”), and Wellahead in turn holds approximately 7.24% of the total issued shares in the Company.

Saved as disclosed above, as at 30 June 2014, none of the Directors and chief executives of the Company nor their associates had or deemed to have any interests or short position in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO), which has been recorded in the register maintained by the Company pursuant to Section 352 of Part XV of the SFO or which has been notified to the Company and the SEHK pursuant to the Model Code.

Substantial Shareholders’ and Other Persons’ Interests in Shares and Underlying Shares

As at 30 June 2014, insofar as in known to the Directors and chief executives of the Company, the following shareholders have interests of 5% or more of the issued share capital of the Company were recorded in the register of interests required to be kept by the Company pursuant to Section 336 of Part XV of the SFO:

Long positions:

Long positions:
			Approximate
		Number of	percentage of the
		ordinary	Company’s issued
Name	Capacity and nature of interests	shares held	share capital
Kingever_(Note (a))_	Registered owner and	90,294,662	23.27%
	beneficially owned
Mr Cui Genxiang_(Note (a))_ Deemed interest and interest		90,294,662	23.27%
	in controlled company
Wellahead_(Note (b))_	Registered owner and	28,082,525	7.24%
	beneficially owned
Ms Zhang Zhong_(Note (b))_ Deemed interest and interest		28,082,525	7.24%
	in controlled company

– 27 –

Notes:

• (a) Kingever is a company incorporated in the British Virgin Islands, and the entire issued share capital of which is beneficially owned by Mr Cui Genxiang.

• (b) Wellahead is a company incorporated in the British Virgin Islands, and the entire issued share capital of which is beneficially owned by Ms Zhang Zhong.

Saved as disclosed above, as at 30 June 2014, no person, other than the Directors, whose interests are set out in the paragraph headed “Directors’ and chief executives’ interests and short positions in shares and underlying shares and debentures” above, has an interest or short position in the shares or underlying shares of the Company that was required to be recorded.

Arrangements to Enable Directors to Acquire Benefits by Means of the Acquisition of Shares and Debentures

Neither at the end of the financial period nor at any time during the financial period did there subsist any arrangement whose object is to enable the Directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate.

(IV) SUPPLEMENTARY INFORMATION

1. Audit Committee

The Company’s audit committee members are Mr. Tay Ah Kong Bernard, Mr. Chee Teck Kwong Patrick, Mr. Tam Chi Kwan Michael and Ms. Zhang Zhong. The audit committee, which is chaired by Mr. Tay Ah Kong Bernard, has reviewed the unaudited interim results of the Group for the six months ended 30 June 2014.

2. Compliance with Corporate Governance Code

The Company has complied with all the code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules during the six months ended 30 June 2014.

3. Compliance with the Model Code for Securities Transactions by Directors of Listed Issuer

The Board confirms, having made specific enquiries with all directors of the Company that during the six months ended 30 June 2014, all the directors have complied with the required standards of the Model Code as set out in Appendix 10 of the Listing Rules.

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4 Share capital

• (i) Details of any changes in the company’s share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.

Share capital — Ordinary Shares	No. of shares
	’000	RMB’000
Balance as at 30 June 2014 and 31 December 2013	388,000	295,000

There were no changes in the issued share capital of the Company for the second quarter and six months ended 30 June 2014.

• (ii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.

As at 30 June 2014 and 31 December 2013, there were no treasury shares.

• (iii) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on.

Not applicable.

5. Dividends

No dividend has been recommended by the Company for the period ended 30 June 2014.

6. Review of financial results

The results have not been audited or reviewed by the Company’s auditors.

7. Audit or review in accordance with applicable accounting standards

The figures have not been audited or reviewed by the Company’s auditors.

8. Whether the same accounting policies and methods of computation as in the issuer’s most recently audited annual financial statements have been applied

The Group has applied the same accounting policies and methods of computation in the financial statements for the current financial period reported on, as in the recently audited consolidated financial statements for the financial year ended 31 December 2013.

9. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.

Not applicable.

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10. Purchase, Sales or Redemption of the Company’s Securities

For the six months ended 30 June 2014, neither the Company nor its subsidiaries had purchased, sold or redeemed any of the securities of the Company.

11. Auditors’ report (including any qualifications or emphasis of matter)

Not applicable.

12. If the group has obtained a general mandate from shareholders for Interest Person Transactions (“IPTs”), the aggregate value of such transactions as required under SGX Listing Manual Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect.

No mandate from shareholders has been obtained for IPTs.

13. Disclosure on the Website of the Exchanges

This report shall be published on the websites of SGX-ST (http://www.sgx.com), the SEHK (http://www.hkex.com.hk) and on the Company’s website (http://www.hengxin.com.sg).

14. Negative assurance pursuant to SGX Listing Manual Rule 705(5)

We, Cui Genxiang and Xu Guoqiang , being two directors of Hengxin Technology Ltd. (the “ Company ”), do hereby confirm on behalf of the Board of Directors of the Company (“ Board ”) that, to the best of the Board’s knowledge, nothing has come to the attention of the Board which may render the 2Q2014 and 1H2014 financial results to be false or misleading in any material aspect.

15. Use of IPO proceeds

As at the date of the financial period reported on, the Company has utilised approximately RMB74.5 million of the net proceeds raised from the dual primary listing on the SEHK (the “ IPO Proceeds ”).

The details of the use of the IPO Proceeds are tabulated below:

Intended Use Diversify product portfolio of High Temperature Resistant Cables Diversify product portfolio of Antennas Expansion of sales network into overseas market Enhance research and development General working capital Total	Revised Amount Used Balance RMB’000 RMB’000 RMB’000 7,130(1) (7,130) — 35,370 (35,370) — 7,382 (2,071) 5,311 7,382 (6,042) 1,340 23,859 (23,859) — 81,123 74,472 6,651	Revised Amount Used Balance RMB’000 RMB’000 RMB’000 7,130(1) (7,130) — 35,370 (35,370) — 7,382 (2,071) 5,311 7,382 (6,042) 1,340 23,859 (23,859) — 81,123 74,472 6,651
		6,651

(1) Please refer to the Company’s announcement dated 9 October 2012 on the change in use of proceeds.

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(2) The breakdown of the use of proceeds for general working capital is as follows:

Details

Details Purchase of raw materials Purchase of equipment General admin expenses Total	Used RMB’000 23,032 408 419
	23,859

By Order of the Board of Hengxin Technology Ltd. Cui Genxiang Executive Chairman

Singapore, 13 August 2014

As at the date of this report, the executive directors of the Company are Mr. Cui Genxiang and Mr. Xu Guoqiang; the non-executive director of the Company is Ms. Zhang Zhong; and the independent non-executive directors of the Company are Mr. Tay Ah Kong Bernard, Mr. Chee Teck Kwong Patrick and Mr. Tam Chi Kwan Michael.

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