Lukang Culture (601599):2019 Annual Performance Briefing

Stock Code: 601599 securities short: Lukang cultural Announcement No.: 2020-040

Jiangsu Lukang culture Limited by Share Ltd announcement on the 2019 annual performance briefing

The board of directors and all directors of the company guarantee that there is no false record, misleading statement or major omission in the contents of this announcement, and shall bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.

The Jiangsu Lukang culture Limited by Share Ltd (hereinafter referred to as "the company") held the 2019 annual performance online presentation meeting on June 18, 2020 in China fund newspaper - www.jhbshow.com. This note will be held online in an interactive way, communicating with investors on matters such as company performance and business development that investors are interested in, and answering questions about investors' concerns in the context of information disclosure. The relevant circumstances are announced as follows:

1. The presentation will be held.

In June 4, 2020, the company disclosed the announcement on the 2019 annual performance online briefing (Bulletin number: 2020-035). This note will be held at 10:00-11:00 a.m. on June 18, 2020. Mr. Qian Wenlong, vice chairman and general manager of the company, Mr. Miu Jinyi, vice chairman and deputy general manager, Mr. Huang Chunhong, chief financial officer Xu Qun, and Mr. Zou Guodong, the Secretary of the board, will participate in this meeting and answer questions about investors' concerns. The meeting was unable to attend because of the epidemic situation.

Two, the company answered questions on investors' general concerns at this performance note meeting. The main questions and replies were arranged as follows:

Question 1: at present, the company's share price is at a low level. Is there any handling plan for the company's management?

A: Dear investors, Hello! The fluctuation of stock price in the two tier market is affected by many factors, such as the macro economy, the general market condition, the company's operation and so on, and its fluctuation has certain uncertainty. As a management team, we have always been committed to doing well in the company's business and improving the company's performance steadily, thereby promoting the overall value of the company, providing long-term stable investment returns for shareholders and sharing the growth interests of the shareholders.

Question two: will the dispute and other issues of Wu Yi's annual report be dealt with?

A: Dear investors, Hello! Wu Yi, as director of the company, is only the neutron of 2019 annual report.

The company's Zhejiang Tianyi film and Television Co., Ltd. has some objections to the confirmation of the revenue of some items. The company has made a full explanation of the contents, and has issued a note on the supervision work of the Jiangsu Lukang culture Limited by Share Ltd about the scheduled disclosure matters by the notary public accountants firm (special general partnership). The audit result reflects the Tianyi film 1 in 2019. The financial situation in February 31st, as well as operating results and cash flows in 2019. With regard to Mr. Wu Yi's performance compensation, the company is in the process of consultations with him. The company will disclose information in time according to the progress. Please pay attention to the company announcement.

Question three: Why did the company's annual performance differ significantly from its previous performance forecast in 2019? A: Dear investors, Hello! In the first half of 2019, after more than a year's adjustment period, the management of the film and television industry predicted that the film and television industry would gradually warm up. However, in the second half of 2019, the industry did not show signs of recovery. According to incomplete statistics, in 2019, there were more than 3000 film companies and more than 1000 video studios shutting down. The company's annual performance in 2019 showed a substantial loss, but the company's textile sector achieved a good income in 2019, and the textile business realized 2 billion 565 million yuan in revenue.

Question four: is the company starting to produce melt blown fabrics at present? A: Dear investors, Hello! Jiangsu Lukang science and Technology Co., Ltd., a subsidiary of the company, went through market research and discussed with the management of its subsidiaries. At present, the three melt blown fabric production lines have been put into operation smoothly, and all the indexes of the products have passed technical inspection, meeting or exceeding the relevant national standards, and have strong competitiveness in the industry. At present, the output of melt blown fabric is 4-4.5 million tons / day, and has basically reached the balance of production and marketing.

Question five: what is the sum and purpose of the company's non-public offering shares? Will there be any change in control? Matters are now advancing? A: Dear investors, Hello! The fund raised by the company's non-public offering is mainly intended to supplement the company's liquidity. The non-public offering targets are Huaibei Central Lake Belt Construction Investment Development Co., Ltd. and Anhui hi tech investment new material industry fund partnership (limited partnership). This non-public offering does not involve changes in the control of the company, and the matter is proceeding in an orderly way.

Question six: please introduce the background of strategic investors and introduce what resources will be introduced by strategic investors. What impact will it bring to the development of the company? A: Dear investors, Hello! The main business of the company is the textile business. Due to the requirements of the city's overall planning and town construction in the city of Zhangjiagang, the main factory of the main woolen textile business is located in the Luyuan Industrial Park of Zhangjiagang City, and some subsidiaries are included in the enclosure. The company has signed the "non residential demolition currency" of Tong Qiao town with the people's Government of the town of Zhangjiagang. The compensation agreement. In view of this, the company has been actively looking for suitable industrial transfer points, seeking the best landing plan, minimizing the adverse impact of industrial transfer on the company's future production and operation, and maximally protecting the interests of the company and all shareholders. The strategic investment of the Huaibei Central Lake belt (the subsidiary company of Huaibei Construction Holding Group Co., Ltd.) will help the company form closer cooperation with the Huaibei Economic Development Zone Management Committee, accelerate the transfer and development of the textile promotion industry, reduce the impact of the original house demolition on the operation of the company, thereby consolidating and expanding the textile business. On the other hand, with the operation of this issue, the scale of the company's interest bearing liabilities will decline, which will help the company reduce its financial cost and improve its profitability. This issue will further optimize the capital structure of the company and enhance its ability to resist financial risks.

Question seven: how is the progress of share transfer between some of the company's shareholders and Huaibei?

A: Dear investors, Hello! The company has already confirmed the relevant facts with the two sides of the transfer of shares and urged the two sides to implement the transfer of shares as soon as possible. The two parties have communicated to the company after communication: "according to the supplementary agreement on the framework agreement of the share transfer agreement, the latest deadline for signing the formal equity transfer agreement has not changed since June 30, 2020, and the precondition for the achievement of the transfer is not yet issued. If the formal agreement on equity transfer can not be signed before the latest deadline, the two parties will not postpone the latest signing deadline. Therefore, if the equity transfer agreement has not been signed before June 30, 2020, a formal equity transfer agreement has not been signed. When the precondition of the agreed framework of the share transfer agreement is not satisfied, the transfer of stock rights will be terminated.

Question eight: please briefly describe the next development plan of the company.

A: Dear investors, Hello! Based on the analysis and forecast of the development trend of the film and television industry, the macroeconomic environment, the company's current situation and the future business situation, in order to be cautious, in 2020, the main focus of the film and television sector was adjusted to the sales and receivables withdrawal of the old drama, so as to ensure that the company saved its financial resources and controlled expenditure, and the company would also reduce the investment of new drama and new projects to the maximum extent, and control the new repertoire. Scale to ensure film and television industry

In terms of capital and performance, it can bring certain contribution to listed companies. The next step will be to deepen the main textile industry, reduce some of the film and television business, ensure that more funds can be used for textile business development, enhance the competitiveness of the company, effectively resolve the company's potential risks, reduce operational risks, ensure the healthy and stable development of the textile industry, and lay the foundation for the steady development of the company in the future.

Notice hereby.

Jiangsu Lukang culture Limited by Share Ltd board of directors

June 18, 2020