Stockcode:000570,200570 Stockname:ChangchaiA,ChangchaiB AnnouncementNo.:2017-002 CHANGCHAICOMPANY,LIMITED ABSTRACTOFANNUALREPORT2016 IImportantinformation ThisAbstractisbasedonthefulltextoftheAnnualReport.Inorderforafullunderstandingoftheoperating results,financialconditionandfuturedevelopmentplanningoftheCompany,investorsarekindlyremindedto readthe fulltextcarefully onthemedia designatedbythe ChinaSecurities RegulatoryCommission (the “CSRC”). ThisAnnualReportanditsabstracthavebeenpreparedinbothChineseandEnglish.Shouldtherebeany discrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionshallprevail. Modifiedauditor’sopinion □Applicable√Notapplicable Proposalforprofitdistributiontocommonshareholdersorconvertingcapitalreserveintosharecapitalfor thisReportingPeriod,whichhasbeenconsideredandapprovedbytheBoard √Applicable□Notapplicable Sharecapitalincreasefromcapitalreserve □Yes√No The Board has considered and approved the following proposal for profit distribution to common shareholders:Basedonthetotalsharesof561,374,326,acashdividendofRMB0.3(taxinclusive)per10shares willbedistributedtoallshareholdersoftheCompany.Nobonusshareswillbegranted,norwillanycapital reservebeconvertedintosharecapital. Proposalfor profit distribution to preference shareholders for this Reporting Period, whichhas been consideredandapprovedbytheBoard □Applicable√Notapplicable Stockprofile Stockname ChangchaiA,ChangchaiB Stockcode 000570,200570 Stockexchange ShenzhenStockExchange Contactinformation BoardSecretary SecuritiesRepresentative Name HeJianjiang Officeaddress 123HuaideMiddleRoad,Changzhou,Jiangsu, China Fax (86)519-86630954 Tel. (86)519-68683155 E-mail cchjj@changchai.com IIBriefintroductiontothemainbusinessorproductsinthisReportingPeriod Asamanufacturer,wespecializeinthemanufactureandsaleofdieselengines,dieselenginefittingsand castings,gasolineengines,gasolineenginefittings, cerealharvestingmachinery,rotovators,walkingtractors, moldsandjigsaswellastheassemblyandsaleofdieselengineandgasolineenginesupportingsets. Wemainlymanufactureandsellsmallandmedium-sizedsingle-cylinderandmulti-cylinderdieselengines underthebrandof“Changchai”,whichareoftenusedintractors,combine-harvesters,lightcommercialvehicles, agricultureequipment,small-sizedengineeringmachinery,generatorsets,shipmachines,etc. IIIKeyfinancialresults 1.Keyfinancialresultsforthepastthreeyears IndicatebytickmarkwhethertheCompanyperformedanyretroactiveadjustmentsto orrestatement ofits accountingdataduetochangesofaccountingpoliciesorcorrectionofaccountingerrors. □Yes√No Unit:RMB 2016 2015 +/-% 2014 Operatingrevenues 2,283,028,855.52 2,519,799,547.29 -9.40% 2,489,792,063.33 Net profit attributable to 62,539,896.17 71,102,792.49 -12.04% 64,202,144.29 shareholdersoftheCompany Net profit attributable to shareholders of the Company 56,835,566.28 61,588,462.29 -7.72% 58,685,034.57 beforeexceptionalprofitandloss Net cash flows from operating 99,473,944.04 127,926,882.95 -22.24% -51,507,355.52 activities Basicearningspershare 0.11 0.13 -15.38% 0.11 (RMB/share) Dilutedearningspershare 0.11 0.13 -15.38% 0.11 (RMB/share) Weightedaveragereturnon 3.00% 3.53% -0.53% 3.28% equity(%) December31, December31, +/-% December31, 2016 2015 2014 Totalassets 3,724,857,266.71 3,232,406,102.20 15.23% 3,166,783,758.18 Net assets attributable to 2,323,712,892.92 2,002,910,311.01 16.02% 1,936,936,835.27 shareholdersoftheCompany 2.Keyfinancialresultsbyquarter Unit:RMB 1Q 2Q 3Q 4Q Operatingrevenues 654,517,225.08 509,143,496.61 605,182,860.65 514,185,273.18 Net profit attributable to 24,282,056.99 10,736,085.37 20,090,608.28 7,431,145.53 shareholdersoftheCompany Net profit attributable to shareholders of the Company 24,946,954.15 3,563,547.46 19,718,706.88 8,606,357.79 beforeexceptionalprofitandloss Net cash flows from operating -5,947,696.22 123,983,609.51 -46,874,591.45 28,312,622.20 activities Indicatebytickmarkwhetherthereareanymaterialdifferencesbetweenthefinancialindicatorsaboveortheir summationsandthosewhichhavebeendisclosedinquarterlyorsemi-annualreports. □Yes√No IVSharecapitalandshareholders 1.Numbersofcommonshareholdersandpreferenceshareholderswithresumedvotingrightsaswellas shareholdingsoftoptenshareholders Unit:share Total number Total number of Totalnumber of common Total number preference of common shareholdersat of preference shareholderswith shareholders 49,929 the prior 50,464 shareholders 0 resumed voting 0 at the month-end with resumed rightsattheprior period-end before the votingrightsat month-endbefore disclosure of theperiod-end the disclosure of thisReport thisReport Top10shareholders Shareholdin Totalshares Numberof Pledgedorfrozenshares Nameofshareholder Natureof g heldatthe restricted shareholder percentage period-end sharesheld Status Number (%) State-owned Assets Supervision andOn behalf of Administration Commissionthe 30.43% 170,845,236 0 of Changzhou Municipalgovernment People’sGovernment BoseraValueGrowthFund Other 2.49% 14,000,000 0 GalaxyFuturesCo., Ltd.-GalaxyFutures Other 1.05% 5,915,274 0 ShengshiNo.2Asset ManagementPlan ChinaConstruction Bank-BoseraValueGrowth Other 0.96% 5,400,000 0 No.1Fund KGIAsiaLimited Foreign 0.59% 3,324,845 0 corporation RongtongCapital-Industrial Bank-RongtongCapital Other 0.56% 3,121,200 0 RongtengNo.11Asset ManagementPlan Bankof Communications-EverbrightPramericaState-owned Other 0.53% 2,950,000 0EnterpriseReformThemeStockFund ZhongOuAsset Management-Bankof China-PingAnLife Insurance-ZhongOuAsset Other 0.34% 1,899,930 0 Management-PingAnLife InsuranceEntrusted InvestmentNo.1Asset ManagementPlan LiLiang Domestic 0.33% 1,827,445 0 individual VanguardTotalInternational Foreign 0.29% 1,626,592 0 StockIndexFund corporation It is unknown whether there is among the top 10 tradable Relatedoracting-in-concertpartiesamongshareholdersandthetop10non-restrictedlytradableshareholders theshareholdersabove anyrelatedpartiesoracting-in-concertpartiesasdefined inthe AdministrativeMeasuresforInformationRegardingShareholding Alteration. Shareholder Li Liang held a total of 1,827,445 shares in the ShareholdersconductingsecuritiesmarginCompany,representingastakeof0.33%,throughtheclientaccount trading ofcollateralsecuritiesformargintradingofPingAnSecuritiesCo., Limited. 2.Numberofpreferenceshareholdersandshareholdingsoftoptenofthem □Applicable√Notapplicable NopreferenceshareholdersinthisReportingPeriod. 3.OwnershipandcontrolrelationsbetweentheactualcontrollerandtheCompany STATE-OWNEDASSETSSUPERVISIONANDADMINISTRATION COMMISSIONOFCHANGZHOUMUNICIPALPEOPLE’SGOVERNMENT 30.43% CHANGCHAICOMPANY,LIMITED VPerformancediscussionandanalysis 1.PerformancereviewforthisReportingPeriod Intheyear2016,facingdifficultiessuchasthecontinuousdownwardtrendofthemacro-economy,stricter emissionlawsandregulations,andtheenormouspressurefromsafetyandenvironmentalprotectionrequirements, wetookcorecompetitivenessimprovement asthemostimportantmeasure,byspeedingproduct upgrades, optimizingtheproductstructure,improvingproductquality,continuouslypromotingimportanttechnological transformationprojects,makingfulluseoftheresourceadvantage,seizingopportunitiesindomesticandoverseas markets,andexpandingtheadvantagesofsuperiorproductsandbusinesssegments.Asaresult,wemanagedto maintainastableandorderlydevelopment. In2016,wesoldabout724,400enginesandengineunits,ofwhichabout116,600weremulti-cylinder engines,andabout607,800aresingle-cylinderengines.Weexportedabout124,600enginesandengineunits;and we achievedsales revenueof RMB2.283billion, ayearly decline of9.4%. The net profit attributableto shareholdersoftheCompanywasRMB62.5714million,ayearlydeclineof12.00%.Underthegrimoverall situationofthenationalsmalldieselengineindustry,althoughourcompany'stotalsalesofproductswentdown fromlastyear,ouroverallmarketsharewasstable,maintainingaleadingpositionintheindustry. Intermsofsingle-cylinderengines,ourcompanyadaptedtonewchangesinthemarket,stabilizethemain supportingenterprisemarketshare,integrateAdealerteamandcontinuouslypromotethesecondarynetwork construction.Atthesametime,we alsoacceleratedthepaceofproductandmarketstructureoptimization, increasedtheproportionofsuperiorproducts,andfullyinvolvedinbiddingprojectsandthedevelopmentofkey customers. Concerningmulti-cylinderengines,ontheonehand,ourcompanystabilizedtheexistingsupportingsystem toenhancethesupportingmarketshare,speeduptheagriculturalmarketsupportof4G33and4L88seriesof middleandhighrankingnewproducts,aswellasthepromotionofresourcesofnationalstandardIII.Our companyalsoaccelerated thesupportofendproducts suchaslightengines andricetransplanters,but the supportingsalesofcommercialvehiclesdecreasedsignificantly. Facingamoreseveresituationofforeigntrademarketinthepasttwoyears,ourcompany'sexportbusiness maintainedstableandrapiddevelopment.Bothexportvolumeandexportincomeofourcompanyincreased. Asformarketservice,wefocusedonnationalstandardIIItrainingforproductupgradesandservicestation optimization,andcontinuouslyimprovedtheservicecapacityofnationalstandardIIIproducts.Wemadefulluse oftheInternet,visualizationandothermeanstoimprovetheterminalmarketservicecapabilitiesbyfollowing-up andteamwork. Tosumup,in2016,ourcompanycorrectlygraspedtheindustrytrends,implementedtargetedproduct structureadjustment,anddidalottopositivelyandeffectivelypromoteproductupgrades.Ontheonehand,the upgradeofsinglemulti-cylinderproductstonationalstandardIIIwasbasicallycompleted.Thetechnicalroute wasrecognizedbythemarketandgotanadvantageinthedevelopmentoftheindustry.Ontheotherhand,the productstructureadjustmentachievedinitialsuccess.Newkeyprofitableproductsincreasedsignificantly,making goodpreparationforthenewdevelopmentofthecompany. 2.SignificantchangesinthemainbusinessinthisReportingPeriod □Yes√No 3.Productscontributingover10%ofthemainbusinessrevenueorprofit √Applicable□Notapplicable Unit:RMB Operating Grossprofit Operating Operating Grossprofit Product revenue Operatingprofit margin revenue:YoY profit:YoY margin:YoY +/-% +/-% +/-% Dieselengines 2,258,400,410.51 408,574,378.75 18.09% -9.49% 1.92% 2.02% 4.Seasonalorperiodiccharacteristicsintheoperatingperformancethatneedspecialattention □Yes√No 5.SignificantYoYchangesintheoperatingrevenues,operatingcostsandnetprofitattributabletothe commonshareholdersortheircomposition □Applicable√Notapplicable 6.Possibilityoflistingsuspensionortermination □Applicable√Notapplicable VIIssuesrelatedtothefinancialreport 1.YoYchangesinaccountingpolicies,accountingestimationsandmeasurementmethods □Applicable√Notapplicable Nochanges. 2.RetroactiverestatementsduetocorrectionofsignificantaccountingerrorsinthisReportingPeriod □Applicable√Notapplicable Nosuchcases. 3.YoYchangesinthescopeoftheconsolidatedfinancialstatements □Applicable√Notapplicable Nochanges. 4.ExplanationbytheBoardofDirectorsandtheSupervisoryBoardconcerningthe“auditor’sreportwith modifiedopinion”issuedbytheCPAsfirmfortheCompanyintheReportingPeriod □Applicable√Notapplicable