[28August 2018, Hong Kong] Differ Group Holding Company Limited (“DFH” or “Company”, Stockcode: 6878) together with its subsidiaries (“Group”), a leading provider ofshort to medium-term financing and financing-related solutions and assetmanagement services in the PRC, has announced itsunaudited interim results for the six months ended 30 June 2018 (the “Period”).

Duringthe Period, the Group was able to grasp the opportunities arising from thecontinuous growth of the Marco-economy in China and the favorable government policies,the Group actively adjusted its business strategy by concentrating on itsassets management business, and recorded remarkable results once again.  For the six months ended 30 June 2018, theGroup’s turnover increased significantly by 182.7% to RMB430 million, whileprofit surged by 45.4% to RMB143 million. Basic earnings per share grew toRMB2.48 cents. During the Period, the gearing ratio of the Group was 56.0%(corresponding period of 2017: 58.5%), maintained a healthy level comparing toits peers.

TheGroup completed the acquisition of 100% of the equity interest of DifferCultural Tourism Development Company Limited (“Differ Cultural”) on 23 January2018. Excluding the effect of adopting merger accounting which led toadjustments of 2017 financial results, an increase of 79.1% of profit wasrecorded comparing to the profit before the acquisition in the first half of2017 (RMB80 million approximately).

Business Review

AssetsManagement Business

Duringthe Period, the strategy of concentrating on asset management business broughtabout positive outcomes.  Since thecompletion of acquisition of Differ Cultural, the Group further expanded itsasset management business from distressed asset to including value assets. Thissegment has become the key growth driver. Income from asset management businesssurged by 578.7% to approximately RMB352 million. This was the results of: 1)Differ Cultural – Phase 1 of Differ Sky Realm was completed and delivered inthe second quarter of 2018, generated a revenue of approximately RMB346.8million and 2) an income of approximately RMB5.6 million from the income/fairvalue change of financial assets and rental income. In view of the change inthe macro economic environment, our in-depth experience in handling assets inthe similar class, and the capital appreciation potential of its portfolio ofassets, the management believes that the Acquisition will generate significantreturns in the next few years. The Group will continue to capture theopportunities presented by an abundant supply of valued and distressed assetsin the market.

FinanceLease Services

TheGroup provides financial lease services mainly to machineries, long rangefishing vessels, properties and motor vehicles. During the Period, The Group’s finance lease services income decreasedto approximately RMB20.5 million (corresponding period of 2017f7: RMB 30.8million.) The decline was mainly due to decreased income from Hong Kong. Inaddition, the Group’s finance lease sector has been experiencing an adjustmentperiod and the management expected new projects to come soon so as to drive furthergrowth in the sector.

FinancialServices

Thefinancial services of the Group comprises of express loan services, financialconsultancy services, supply chain management services and guarantee services.During the Period, the Group recorded a combined income of approximatelyRMB56.8 million, representing a reduction of 17.9%. This was attributable tothe fact that the Group decided to focus its resources in its asset managementbusiness. In light of the tightened credit control by PRC banks and the strongdemand for financing services from SMEs, the income of entrusted loan servicesincreased by 57.6%, while income from financial consultancy services recorded areduction due to a decrease of the amount of bank financing obtained by thecustomers of the Group. Income from the guarantee service increased by 210.3%which was mainly due to the fact that the Group has received relatively largeamount of guarantee fees from certain sizable customers.

Mr. HONG Mingxian, Chairmanand Executive Director of DFH stated, “The Group recorded an increase in overall income and profit in the firsthalf of 2018. The outstanding performance is mainly attribute to the robustnessand effectiveness of its business strategy. While focusing on developing assetmanagement business, the Group is relentlessly seeking opportunities to broadenits income stream. During the Period, the Group was granted licenses form theSecurities and Futures Commission of Hong Kong to carry out Type 1 (Dealing inSecurities) and Type 9 (Asset Management) regulated activities. This allowed usto start providing the relevant financial services in Hong Kong in the secondhalf of 2018, with an eye to create niche products and to provide diversifiedfinancial services for customers outside China. Riding the wave ofopportunities brought about by the development of financial technology globallyand internally, as well as the increase in momentum of the asset managementindustry, we are optimistic about the Group’s overall business and financialprospect. In the future, we will further expand our market share and reinforceour leading position so as to maintain our growth momentum. Our goal has beenand will always be creating value to our customers and our shareholders.”