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Contents Page Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disclosure of Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Independent Review Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Condensed Consolidated Statement of Financial Position . . . . . . . . . . . . . . . . .

Condensed Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . .

Condensed Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . .

Notes to the Interim Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTERIM REPORT 2020

Corporate Information BOARD OF DIRECTORS Executive Directors

SHARE REGISTRAR

Ng Siu Fai, Chairman Ng Kam Wah Thomas, Managing Director Ng Ki Hung Frankie Ho Suk Lin

Tricor Standard Limited Level 22 Hopewell Centre 183 Queen’s Road East Hong Kong

Independent Non-executive Directors

REGISTERED OFFICE

Cui Jianhua Tsui Che Yin Frank William Yau

26th Floor Yardley Commercial Building 1-6 Connaught Road West Hong Kong

AUDIT COMMITTEE Tsui Che Yin Frank, Chairman Cui Jianhua William Yau

AUDITOR

REMUNERATION COMMITTEE

CONTACTS

Cui Jianhua, Chairman Tsui Che Yin Frank William Yau

Tel: (852) 2545 0951 Fax: (852) 2541 9794 E-mail: info@jinhuiship.com

NOMINATION COMMITTEE

WEBSITE

Cui Jianhua, Chairman Tsui Che Yin Frank William Yau

www.jinhuiship.com

COMPANY SECRETARY Ho Suk Lin

Financial Highlights

JINHUI HOLDINGS COMPANY LIMITED

Grant Thornton Hong Kong Limited Certified Public Accountants

HIGHLIGHTS FOR THE FIRST HALF OF 2020 •

Revenue for the period: HK$313 million

•

Net profit attributable to shareholders for the period: HK$19 million

•

Operating profit for the period: HK$50 million

•

Basic earnings per share: HK$0.036

•

Gearing ratio as at 30 June 2020: 16%

SHARE LISTING The Company’s shares are listed on the Hong Kong Stock Exchange (stock code: 137)

INTERIM REPORT 2020

Management Discussion and Analysis

The Board is pleased to present the interim report of Jinhui Holdings Company Limited (the “Company”) and its subsidiaries (the “Group”) for the six months ended 30 June 2018.

2020 1st half HK$’000

2019 1st half HK$’000

2019 HK$’000

Average daily TCE

The Group’s revenue for the first half of 2018 was HK$312,736,000 whereas HK$267,513,000 was reported in the same period of 2017. The net profit attributable to shareholders of the Company for the first half of 2018 was HK$18,907,000 while a net loss of HK$35,983,000 was reported in the first half of 2017 due to the recognition of impairment loss on assets held for sale (disposed vessels) of HK$49,149,000 in the first half of 2017. Basic earnings per share was HK$0.036 for the six months ended 30 June 2018 as compared to basic loss per share of HK$0.068 for the corresponding period in 2017.

Daily vessel running cost Daily vessel depreciation Daily vessel finance cost

30 16 3

28 16 5

30 16 4

99%

INTERIM DIVIDEND

As at 30 June 2018, the Group had twenty three owned vessels. The average daily TCE earned by the Group’s owned vessels increased 40% to US$9,892 (approximately HK$77,000) for the first half of 2018 as compared to US$7,044 (approximately HK$55,000) for the first half of 2017. Daily vessel running cost increased 10% from US$3,535 (approximately HK$28,000) for the first half of 2017 to US$3,872 (approximately HK$30,000) for the first half of 2018 due to mild inflation in crew wages, and repair and maintenance expenses being booked during this time of the fiscal year. Subsequent to the reporting date, the Group had disposed of three vessels aged above 15 years. We will continue with our cost reduction effort, striving to maintain a highly competitive cost structure when stacked against other market participants. Daily vessel finance cost decreased 42% from US$620 (approximately HK$5,000) for the first half of 2017 to US$362 (approximately HK$3,000) for the first half of 2018. The decrease was mainly attributable to the reduction in outstanding loan principal upon repayment of all deferred installments on 10 January 2018 for those loans restructured during the forbearance period under the intercreditor deed (the “ICD”) forming between the Group and major lenders, and the full repayment of two vessels’ mortgage loans with relatively higher interest margin amounting to HK$148,980,000 in March 2018. Fleet utilization rate is 99% for the first half of 2018 which is same as the first half of 2017. We will intimately monitor cargo flows in order to deploy our vessels efficiently to optimize revenue and fleet utilization rate and we will keep costs in check to enhance our margins.

INTERIM RESULTS

The Board has resolved not to recommend the payment of any interim dividend for the six months ended 30 June 2018 (30/6/2017: nil).

BUSINESS REVIEW Chartering freight and hire. The Group operates its worldwide shipping activities through Jinhui Shipping and Transportation Limited (“Jinhui Shipping”), an approximately 55.69% owned subsidiary of the Company, whose shares are listed on the Oslo Stock Exchange, Norway. Dry bulk shipping market improved remarkably in the first half of 2018, driven mainly by strong Chinese dry bulk imports and limited tonnage growth and high level of demolitions activities. Both Baltic Dry Index (“BDI”) and charter rates across all vessel classes had been showing encouraging improvements when comparing the first half of 2017. The average of BDI for the first half of 2018 was 1,217 points, which compares to 975 points in the same period in 2017. Average daily time charter equivalent rates (“TCE”)

2020 1st half US$

2019 1st half US$

2019 US$

Post-Panamax fleet Supramax / Handysize fleet

11,722 9,725

7,399 7,015

8,645 8,063

9,892

7,044

8,111

In average

JINHUI HOLDINGS COMPANY LIMITED

Key Performance Indicators for Shipping Business

Average utilization rate

INTERIM REPORT 2020

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 30 June 2020

Note Revenue Other operating income Interest income Shipping related expenses Staff costs Impairment loss on assets held for sale Other operating expenses Operating profit before depreciation and amortization Depreciation and amortization

3 4

Operating profit (loss) Finance costs Profit (Loss) before taxation Taxation Net profit (loss) for the period Other comprehensive income Items that may be reclassified subsequently to profit or loss: Change in fair value of financial assets at fair value through OCI Change in fair value of available-for-sale financial assets Total comprehensive income (loss) for the period

JINHUI HOLDINGS COMPANY LIMITED

Six months ended 30 June 2020 (Unaudited) HK$’000

Six months ended 30 June 2019 (Unaudited) HK$’000

312,736 24,223 6,076 (149,846) (41,268) – (28,554)

267,513 41,943 7,257 (165,376) (29,947) (49,149) (32,164)

123,367 (73,455)

40,077 (83,313)

49,912 (12,645)

(43,236) (23,634)

37,267 –

(66,870) –

37,267

(66,870)

346

–

37,613

(66,820)

Note Net profit (loss) for the period attributable to: Shareholders of the Company Non-controlling interests

Total comprehensive income (loss) for the period attributable to: Shareholders of the Company Non-controlling interests

Earnings (Loss) per share Basic and diluted

Six months ended 30 June 2020 (Unaudited) HK$’000

Six months ended 30 June 2019 (Unaudited) HK$’000

18,907 18,360

(35,983) (30,887)

37,267

(66,870)

19,321 18,292

(35,933) (30,887)

37,613

(66,820)

HK$0.036

HK$(0.068)

INTERIM REPORT 2020

Notes to the Interim Financial Statements 1.

Basis of preparation and accounting policies (Continued) 1.

Notes to the Interim Financial Statements 3.

HKFRS 9 Financial Instruments (Continued) 1.

Revenue Revenue represents chartering freight and hire income arising from the Group’s owned vessels. Revenue recognized during the period is as follows:

HKFRS 9 Financial Instruments (Continued) HKFRS 9 replaces HKAS 39 “Financial Instruments: Recognition and Measurement”. It introduces new requirements for the classification and measurement of financial assets, financial liabilities, new general hedge accounting requirements and impairment requirements for financial assets. Chartering freight and hire income: Hire income under time charters Freight income under voyage charters

The directors have identified the following areas that are most impacted by the application of HKFRS 9: Classification and measurement of financial assets at amortized cost

Six months ended 30 June 2020 (Unaudited) HK$’000

Six months ended 30 June 2019 (Unaudited) HK$’000

312,736 –

254,818 12,695

312,736

267,513

The Group classified its financial assets as at amortized cost if the following criteria are met: (a)

The asset is held within a business model with the objective of collecting the contractual cash flows; and

(b)

The contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Classification and measurement of financial assets at fair value through other comprehensive income (“OCI”) (Continued) Upon the adoption of HKFRS 9: Financial Instruments, the Group’s investments in unlisted club debentures and unlisted club membership classified as available-for-sale financial assets as at 31 December 2017 are reclassified to financial assets at fair value through other comprehensive income (“OCI”) with effect from 1 January 2018. Cumulative fair value changes in the reserve for available-for-sale financial assets are transferred to reserve for financial assets at fair value through OCI with effect from 1 January 2018.

JINHUI HOLDINGS COMPANY LIMITED

Operating profit before depreciation and amortization This is stated after charging / (crediting): Six months ended 30 June 2019 (Unaudited) HK$’000

Six months ended 30 June 2020 (Unaudited) HK$’000 Realized gain on financial assets at fair value through profit or loss Unrealized loss (gain) on financial assets at fair value through profit or loss Net gain on financial assets at fair value through profit or loss Reversal of impairment loss on trade and other receivables Loss on write-off of property, plant and equipment Gain on disposal of investment properties Dividend income

(11,423)

(6,260)

11,360

(9,436)

(63)

(15,696)

(40)

(26)

– – (2,159)

72 (27) (1,137)

INTERIM REPORT 2020

CORPORATE INFORMATION EXECUTIVE DIRECTORS Mr. Mr. Mr. Mr. Mr.

Cheng Li-Yu (Chairman) Chiu Hui-Chin (Chief Executive Officer) Huang Kuo-Kuang Lin Feng-Chieh Tsui Yung Kwok

CORPORATE GOVERNANCE COMMITTEE Mr. Mr. Mr. Mr. Mr.

LEGAL ADVISERS AS TO HONG KONG LAWS

Mr. Cherng Chia-Jiun Mr. Tsai Wen-Yu Mr. Yip Wai Ming

Chiu & Partners

Mr. Cheng Li-Yu Mr. Tsui Yung Kwok COMPANY SECRETARY Mr. Leung Ka Shing (Resigned on 31 January 2019) Ms. Cheung Lai Yin (Appointed on 31 January 2019) AUDIT COMMITTEE Mr. Cherng Chia-Jiun (Chairman) Mr. Tsai Wen-Yu Mr. Yip Wai Ming REMUNERATION COMMITTEE Mr. Mr. Mr. Mr. Mr.

Cherng Chia-Jiun (Chairman) Cheng Li-Yu Huang Kuo-Kuang Tsai Wen-Yu Yip Wai Ming

NOMINATION COMMITTEE Mr. Mr. Mr. Mr. Mr.

Cheng Li-Yu (Chairman) Huang Kuo-Kuang Cherng Chia-Jiun Tsai Wen-Yu Yip Wai Ming

JU TENG INTERNATIONAL HOLDINGS LIMITED

For the six months ended 30 June

Yip Wai Ming (Chairman) Cheng Li-Yu Huang Kuo-Kuang Cherng Chia-Jiun Tsai Wen-Yu

INDEPENDENT NON-EXECUTIVE DIRECTORS

AUTHORISED REPRESENTATIVES

FINANCIAL HIGHLIGHTS

AUDITORS Ernst & Young PRINCIPAL BANKERS Bank of China Bank SinoPac CTBC Bank DBS Bank Fubon Bank KGI Bank OCBC Wing Hang Bank Standard Chartered Bank Sumitomo Mitsui Banking Corporation Taishin International Bank REGISTERED OFFICE

2020 (Unaudited)

2019 (Unaudited)

Changes

4,341

3,946

+10.0%

(47)

(154)

-69.3%

(5.1) (5.1)

(15.5) (15.5)

-67.1% -67.1%

10.2% 0.7% -1.1% 596 -1.6%

6.6% -3.6% -3.9% 534 -4.7%

+3.6% +4.3% +2.8% +11.6% +3.1%

4 5 6 7 8

70 112 43 79.8% 36.0%

69 125 41 -78.1% 40.0%

+1.4% -10.4% +4.9% +157.9% -4.0%

691

172

+300.4%

Notes

Operating Results: Revenue (HK$ million) Loss attributable to equity holders of the Company (HK$ million) Loss per share Basic (HK cents) Diluted (HK cents) Profitability Ratio: Gross profit margin Operating profit/(loss) margin Net loss margin EBITDA (HK$ million) Return on equity Liquidity and Capital Ratio: Inventory turnover days Trade receivables turnover days Trade and bills payables turnover days Interest coverage Net debt to equity Cash flows from operating activities (HK$ million)

1 2

Cricket Square Hutchins Drive PO Box 2681 Grand Cayman KY1-1111 Cayman Islands

Notes: (1)

Operating profit/(loss) margin equals operating profit/(loss) divided by revenue. Operating profit/ (loss) includes gross profit, net of selling and distribution expenses and administrative expenses.

HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG

(2)

Net loss margin equals loss attributable to equity holders of the Company divided by revenue.

(3)

Return on equity equals loss attributable to equity holders of the Company divided by the average of the beginning and closing balance of equity attributable to equity holders of the Company, and is calculated on an annualized basis.

(4)

Inventory turnover days is equal to the closing balance of inventories divided by cost of sales and multiplied by the number of days in the period.

(5)

Trade receivables turnover days is equal to the closing balance of trade receivables divided by revenue and multiplied by the number of days in the period.

(6)

Trade and bills payables turnover days is equal to the closing balance of trade and bills payables divided by cost of sales and multiplied by the number of days in the period.

(7)

Interest coverage ratio equals profit/(loss) before tax and finance costs divided by finance costs.

(8)

Net debt to equity equals net debt divided by net assets. Net debt includes all interest-bearing bank borrowings, net of cash and cash equivalents.

Suites 3311-3312, Jardine House 1 Connaught Place, Central Hong Kong

Interim Report 2020

The board (the “Board”) of directors (the “Directors”) of Ju Teng International Holdings Limited (the “Company” or “Ju Teng”) is pleased to present the unaudited consolidated results of the Company and its subsidiaries (collectively, the “Group”) for the six months ended 30 June 2019 (the “Period”) as follows:

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the six months ended 30 June 2020

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the six months ended 30 June

For the six months ended 30 June 2020

2020 (Unaudited) HK$’000

For the six months ended 30 June Notes

REVENUE Cost of sales

Gross profit

4,341,454 (3,899,449)

2019 (Unaudited) HK$’000 3,945,778 (3,685,467)

442,005

260,311 102,007 (58,894) (344,153) (14,023) (70,115)

Other income and gains Selling and distribution expenses Administrative expenses Other expenses Finance costs

38,568 (66,685) (346,246) (8,801) (73,753)

LOSS BEFORE TAX

(14,912)

(124,867)

Income tax expense

(16,298)

(20,968)

(31,210)

(145,835)

LOSS FOR THE PERIOD Attributable to: Equity holders of the Company Non-controlling interests

LOSS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY – Basic (HK cents) – Diluted (HK cents)

2020 (Unaudited) HK$’000

JU TENG INTERNATIONAL HOLDINGS LIMITED

(47,355) 16,145

(154,478) 8,643

(31,210)

(145,835)

8 (5.1)

(15.5)

(5.1)

(15.5)

LOSS FOR THE PERIOD

2019 (Unaudited) HK$’000

(31,210)

(145,835)

(22,437)

(161,010)

(962)

–

(23,399)

(161,010)

OTHER COMPREHENSIVE INCOME/(EXPENSES) Other comprehensive expenses that may be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations Release of exchange fluctuation reserve upon disposal of a subsidiary Net other comprehensive expenses that may be reclassified to profit or loss in subsequent periods Other comprehensive income/(expenses) that will not be reclassified to profit or loss in subsequent periods: Equity investment designated at fair value through other comprehensive income: Change in fair value Income tax effect

4,233 –

(9,130) 1,162

4,233

(7,968)

OTHER COMPREHENSIVE EXPENSES FOR THE PERIOD, NET OF TAX

(19,166)

(168,978)

TOTAL COMPREHENSIVE EXPENSES FOR THE PERIOD

(50,376)

(314,813)

Attributable to: Equity holders of the Company Non-controlling interests

(59,693) 9,317

(297,385) (17,428)

(50,376)

(314,813)

Interim Report 2020

NOTES TO INTERIM FINANCIAL INFORMATION

30 June 2020

BASIS OF PREPARATION AND CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (continued) 1.

REVENUE, OTHER INCOME AND GAINS An analysis of revenue is as follows:

AS A LESSEE – LEASES PREVIOUSLY CLASSIFIED AS OPERATING LEASES (continued) 1.

For the six months ended 30 June

IMPACTS ON TRANSITION (continued) The condensed consolidated interim financial information has been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). The condensed consolidated interim financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual financial statements as at 31 December 2018. The accounting policies and basis of preparation adopted in the preparation of the interim financial information are the same as those used in the annual financial statements for the year ended 31 December 2018, except in relation to the following new and revised Hong Kong Financial Reporting Standards (“HKFRSs”, which also include HKASs and Interpretations) that affect the Group and has adopted for the first time for the current period’s financial information:

Revenue from contracts with customers Sale of goods (i)

HKFRS 16 Amendments to HKAS 19 Amendments to HKAS 28 HK(IFRIC)-Int 23 Annual Improvements 2015-2017 Cycle

Prepayment Features with Negative Compensation Leases Plan Amendment, Curtailment or Settlement Long-term Interests in Associates and Joint Ventures Uncertainty over Income Tax Treatments Amendments to the following standards: – HKFRS 3 Business Combinations – HKFRS 11 Joint Arrangements – HKAS 12 Income Taxes – HKAS 23 Borrowing Costs

2019 (Unaudited) HK$’000

4,341,454

3,945,778

DISAGGREGATED REVENUE INFORMATION For the six months ended 30 June

Geographical markets The PRC, excluding Hong Kong The ROC Others

NEW AND REVISED HKFRSs Amendments to HKFRS 9

2020 (Unaudited) HK$’000

(ii)

2020 (Unaudited) HK$’000

2019 (Unaudited) HK$’000

4,261,934 54,024 25,496

3,873,419 60,715 11,644

4,341,454

3,945,778

PERFORMANCE OBLIGATION Sale of goods The performance obligation is satisfied upon delivery of the goods and payment is generally due within 60 to 120 days from delivery.

Other than as explained below regarding the impact of HKFRS 16 Leases, the above new and revised HKFRSs have no significant financial effect on the Group’s condensed consolidated interim financial information.

JU TENG INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW & PROSPECTS

FINANCIAL REVIEW

The unresolved U.S.-China trade tensions, together with Brexit, have led to business confidence continue to dwindle. The momentum of global economic activity remained soft in the first half of 2019. According to the “World Economic Outlook” released by the International Monetary Fund, global economic growth is forecasted at 3.2% in 2019. An international research and advisory company, Gartner, indicated that the worldwide PC (including desktop, notebook and ultra-mobile computer) shipments fell by 4.6% year-on-year in the first quarter of 2019, but grew by 1.5% to 63 million units in the second quarter of 2019, following two quarters of decline. As one of the world’s leading manufacturers of notebook computer casings, Ju Teng is striving to seize every opportunity in the PC market. During the Period, Ju Teng recorded an increase in revenue and the Group’s gross profit margin benefited from the weakened Renminbi (“RMB”) since the second quarter of 2019.

During the Period, due to the sales growth of metal casings which have higher unit selling price, the Group’s revenue increased by approximately 10.0% to approximately HK$4,341 million (2018: approximately HK$3,946 million). The Group’s gross profit margin during the Period also increased substantially to approximately 10.2% (2018: approximately 6.6%), which was mainly attributable to the depreciation of RMB against HKD during the Period by approximately 6.3% as compared to that of 2018. Depreciation of RMB against HKD during the Period caused a decrease in the Group’s production costs as most of the Group’s production costs are denominated in RMB while most of the Group’s revenue is denominated in United States dollar (“USD”).

During the Period, the Group’s total revenue increased by approximately 10.0% to approximately HK$4,341 million. Gartner suggested that the growth in PC sales is driven by the demand for Windows 10, while the CPU shortage problem that had affected the market for the past 18 months shows signs of easing. The growth in PC market, which is mainly dominated by the thin and light ultra-mobile computer, in turn encourages the growth of metal casing which has higher gross profit margin. Coupled with the Group’s technological and market share advantages, and given that the Group’s production plants are based in Mainland China, the depreciation of RMB against Hong Kong dollar (“HKD”) in the second quarter of 2019 indirectly led to a decrease in production costs. Thus, the Group’s gross profit for the Period increased by approximately 69.8% year-on-year to approximately HK$442 million and the gross profit margin increased by approximately 3.6% to approximately 10.2%. Looking ahead to the second half of the year, the Group will continue its focus on the production of notebook and 2-in-1 PC casing. Following the application of Intel’s Project Athena on the new model of notebook PC to be released in fall of 2019, it is expected to bring a new wave of demand for mobile PC, as Project Athena is bringing technological breakthrough in terms of battery life, performance, responsiveness, connectivity as well as the form factor. Furthermore, the rising PC price caused by some electronic components shortage last year have also been eased with the increase in the supply of those electronic components. It is expected that factors such as individual market developments, downward trend of RMB, and the current U.S.-China trade dispute will continue to affect the PC market. Gartner suggested that the U.S.-China trade dispute may impact the PC market in the second half of 2019, as most of notebook and tablets PC are still manufactured in Mainland China and sales of these devices to the U.S. could face punitive tariffs if the manufacturers do not take quick action to respond, which will then bring some uncertainty to the PC market. As one of the world’s leading manufacturers of notebook computer casings, the Group, with years of experience in the PC casing market, will continue to closely monitor the development of 5G technology. Once 5G technology is mature in the PC industry, the Group will grasp the market opportunities and strive for the greatest benefit of Ju Teng’s shareholders. We believe with its unlimited potential and flexible market strategy, the Group is able to develop steadily in a challenging environment.

JU TENG INTERNATIONAL HOLDINGS LIMITED

During the Period, other income and gains of the Group mainly consisted of subsidy income of approximately HK$8 million (2018: approximately HK$29 million), interest income of approximately HK$7 million (2018: approximately HK$15 million), gross rental income of approximately HK$13 million (2018: approximately HK$12 million) and foreign exchange gains, net of approximately HK$2 million (2018: approximately HK$28 million) which was mainly resulting from the translation of trade receivables denominated in USD. Due to a decrease in subsidy income and foreign exchange gains, net, the Group recorded a substantial decrease of approximately 62.2% in other income and gains to approximately HK$39 million (2018: approximately HK$102 million) during the Period, accounting for approximately 0.9% (2018: approximately 2.6%) of the Group’s revenue. As a result of the increase in transportation expenses and environmental protection expenditures during the Period, the Group recorded an increase of approximately 2.5% in operating costs, including administrative expenses, and selling and distribution expenses, to approximately HK$413 million (2018: approximately HK$403 million). The percentage of operating costs of the Group decreased to approximately 9.5% (2018: approximately 10.2%) of the Group’s revenue. During the Period, other expenses of the Group mainly consisted of impairment of trade receivables of approximately HK$2 million (2018: approximately HK$10 million), loss on disposal of items of property, plant and equipment, net of approximately HK$5 million (2018: Nil) and loss on disposal of a subsidiary which was engaged in mould production of approximately HK$2 million (2018: Nil). Due to a decrease in impairment of trade receivables, the Group recorded a decrease of approximately 37.2% in other expenses to approximately HK$9 million (2018: approximately HK$14 million), accounting for approximately 0.2% (2018: approximately 0.4%) of the Group’s revenue. Finance costs of the Group increased by approximately 5.2% to approximately HK$74 million (2018: approximately HK$70 million) for the Period as compared to that of 2018, which was mainly attributable to the increase in loan interest rate. Interest capitalised during the Period was approximately HK$4 million (2018: approximately HK$5 million). Income tax expense of the Group decreased by approximately 22.3% to approximately HK$16 million (2018: approximately HK$21 million) for the Period as compared to that of 2018. During the Period, despite the fact that the Group incurred loss before tax on consolidated basis, income tax expenses have been provided for in respect of the assessable profits generated by certain subsidiaries during the Period and the deferred tax assets have not been recognized for certain tax losses incurred by certain subsidiaries.

Interim Report 2020

CEO SPEECH

CORPORATE PROFILE Genertec Universal Medical Group Company Limited (通用環球醫療集團有限公司), along with its subsidiaries, is a diversified medical and health enterprise focusing on fast growing segment of healthrelated industry in China. Leveraging on modern management concepts, a team of professionals, quality medical resources, strong financial capacity and enterprise culture of generosity and industriousness, we

Contents

strive to build a leading medical and health conglomerate, so as to gradually establish a health-related industry ecosphere covering patients’ lifetime. The largest shareholder of the Company is China General Technology (Group) Holding Company Limited (中國通用技術(集團)控股有限責任公司), which is one of the key state-owned enterprises under direct

Corporate Information

Definition

Corporate Profile

administration of the PRC central government with medical services and healthcare as its main business, and a Fortune 500 enterprise. The Company has been deeply routed in medical and health sector for a long time, accumulated extensive quality medical resources around the world, established good cooperation with hundreds of well-known medical experts, and formed strategic partnerships with famous medical institutions in China,

Performance Overview

Management Discussion and Analysis

the United States, the United Kingdom, Germany, etc. By continuously expanding medical resources, we have established a unique and innovative development model and an integration development strategy for medical and health industry, focusing on medical services and, surrounding it, developing our medical finance, medical technology services, medical digitalization business, medical and elderly care services and

Disclosure of Interests

medical health insurance in a synchronized manner.

Corporate Governance

Headquartered in Hong Kong, the Company has set up an operation center in Beijing, established

Other Information

relevant subsidiaries in places where major medical institutions are located and opened offices in central

Independent Review Report

Heilongjiang, forming a business operating network centered on certain regions and radiating nationwide.

Interim Condensed Consolidated Statement of Profit or Loss

We will strive to firmly seize good opportunities from the medical and health industry in China. Making

Interim Condensed Consolidated Statement of Comprehensive Income

Interim Condensed Consolidated Statement of Financial Position

Interim Condensed Consolidated Statement of Changes in Equity

Interim Condensed Consolidated Statement of Cash Flows

Notes to Interim Condensed Consolidated Financial Information

cities of various provinces in China such as Guangdong, Hunan, Sichuan, Henan, Shaanxi, Shandong and

it our mission to promote “Healthy China” plan, we are committed to upgrading China’s medical technology and management level of medical institutions to world standards by providing leading-edge technologies, advanced operation methods, scarce expert resources and insights of industry development, so as to benefit our patients with the highest quality in healthcare service and give back to society.

2020 Interim Report

MANAGEMENT DISCUSSION AND ANALYSIS 1. BUSINESS REVIEW AND PROSPECTS

MANAGEMENT DISCUSSION AND ANALYSIS

1.1.1 Establishment of a nationwide medical services network Since the joint issue of the Guidance on Deepening the Reform of Educational and

In the first half of 2019, the Group made remarkable progress in terms of depth and breadth in

Medical Institutions of State-owned Enterprises (Guo Zi Fa Gai Ge [2017] No.134)

healthcare industry, steadily implemented its development strategy and further strengthened its

by six ministries and commissions including the State-owned Assets Supervision and

business foundation. Focusing on its strategic development objective of building a leading medical and health conglomerate in China, we comprehensively expanded our footprint for hospital group and stably developed our medical finance business, along with further developing medical technology services and medical digitalization business. As a result, the Group’s comprehensive strength continued to be reinforced and its operating results kept growing steadily. For the reporting period, the Group recorded revenue of RMB3,195.4 million, representing an increase of 52.5% as compared to the corresponding period of the previous year; recorded profit for the period of RMB872.5 million, representing an increase of 19.0% as compared to the corresponding period of the previous year; recorded profit for the period attributable to the ordinary shareholders of the parent of RMB812.0 million, representing an increase of 10.4% as compared to the corresponding period of the previous year; and it recorded total assets of RMB57,577.8 million on 30 June 2019, representing an increase of 21.8% as compared to the end of 2018. Our assets recorded a sound growth, with leading asset quality in the industry.

1.1 Hospital Group Business

Group has actively approached several state-owned groups and their quality hospitals to participate in the integration and takeover of their medical institutions through formation of joint ventures and open market bidding, and has made great progress. We have been building up a tightly-knit medical network surrounding key regions and cities across the country, and gradually establishing a number of regional medical centers in the country, laying a solid foundation for building a nationwide medical and health conglomerate with synergic advantages. As of 30 June 2019, the Group had successively entered into project cooperation agreements with Yantai Port Group, XD Group, CNSG Group, Xi’an Aero-Engine Group, Ansteel Group, Pangang Group, CEC Caihong and CR State Asset, to take over their 20 medical institutions. Meanwhile, the Group entered into cooperation agreements with China Minmetals and CR State Asset, respectively, and will include the designated medical institutions into the cooperation scope in phases. In addition, the Group also reached cooperation understanding with many other state-owned groups, and will continue to

The scale of China’s medical market has grown rapidly since the new medical reform, and

push for materialization of more projects relating to medical institutions of SOEs in the

the proportion of total health expenditure to the gross domestic product has been rising for

future.

eight consecutive years, accounting for 6.44% in 2018. Reforms of medical care, medical insurance and pharmaceutical industry kept moving forward. Government policies have been encouraging non-governmental investment in medical industry to facilitate the formation of a diverse medical investment landscape, regulating medicine circulation, improving pricing system of drug supplies and encouraging development of “Internet + Medical care”. Meanwhile, the reform of medical institutions of SOEs by way of spin-off was further carried out and SOEs primarily engaging in healthcare business are encouraged by policies to integrate resources of other SOEs’ medical institutions to achieve centralized management and professional operation. In the first half of 2019, fully leveraging its strengths in resources and proactively making the most of opportunities from the market and policies, the Group carried out its business layout for hospital group on all fronts. Firstly, the Group continuously pushed forward integration and takeover of medical institutions of SOEs, and has made great progress. Secondly, the Group steadily integrated the management of cooperating medical institutions to establish a conglomerate management system. Thirdly, the Group continued its hospital investment and construction and solid implementation of its operating projects. To date, the Group’s nationwide medical services network has been gradually established, and an advanced modern hospital group has begun to take shape in China.

Administration Commission of the State Council, seizing the policy opportunity, the

Genertec Universal Medical Group Company Limited

As of 30 June 2019, the Group had acquired 16 medical institutions, of which, two are Grade III Class A hospitals and nine are Grade II hospitals, with operating capacity of 4,193 beds in total. The number of outpatient visits and inpatient visits amounted to 1.231 million and 67,000, respectively, and the hospital operation recorded revenue of RMB962.8 million in the first half of 2019. In the future, based on local epidemiology survey, the actual situation of each medical institution, and prediction of medical development trends, the Group will enhance the comprehensive strengths and brand awareness of these hospitals by mapping out discipline development, introducing quality medical resources and optimizing operation and management system.

1.1.2 Building up an advanced modern hospital group Hospitals are the core resources to support development of medical and health industry. For medical institutions managed by the Group, the Group will comprehensively improve their medical technology, management efficiency and service capabilities by establishing a tightly-knit healthcare network, introducing modern hospital management mode, connecting with top medical resources at home and abroad and promoting development of related disciplines as a whole. We will focus on four core strategies of “differential positioning, regional focus, conglomerate management and scale-up development” to establish a medical service network with nationwide coverage and regional integration, and build up a modern hospital group with outstanding technology and efficient management. 2020 Interim Report

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30 June 2020

30 June 2020

Notes

NON-CURRENT ASSETS Property, plant and equipment Investment in an associate Right-of-use assets Prepaid land lease payments Goodwill Loans and accounts receivable Restricted deposits Prepayments, deposits and other receivables Derivative financial instruments Deferred tax assets Other assets

271,026 – – 132,134 9,211 31,844,301 – – 81,250 248,471 9,953

Total non-current assets

36,645,541

32,596,346

CURRENT ASSETS Inventories Loans and accounts receivable Prepayments, deposits and other receivables Derivative financial instruments Restricted deposits Cash and cash equivalents

93,722 16,120,838 160,109 3,340 2,920,376 1,633,874

40,537 11,826,005 71,414 – 549,152 2,173,473

20,932,259

14,660,581

662,974 1,247,804 16,270,599 5,794 130,439

482,381 925,718 12,346,798 1,282 70,143

Total current liabilities

18,317,610

13,826,322

NET CURRENT ASSETS

2,614,649

834,259

39,260,190

33,430,605

12 13

13 13

CURRENT LIABILITIES Trade payables Other payables and accruals Interest-bearing bank and other borrowings Derivative financial instruments Tax payable

TOTAL ASSETS LESS CURRENT LIABILITIES

Genertec Universal Medical Group Company Limited

14 15

30 June 2020 (Unaudited) RMB’000

31 December 2019 (Audited) RMB’000

24,625,256 2,642,160 54,076

20,635,191 2,497,091 41,515

Total non-current liabilities

27,321,492

23,173,797

Net assets

11,938,698

10,256,808

4,327,842 4,473,793

4,327,842 4,067,769

8,801,635

8,395,611

1,702,187 1,434,876

1,652,481 208,716

11,938,698

10,256,808

31 December 2019 (Audited) RMB’000

1,147,331 3,579 576,970 – 69,772 34,053,570 247,500 126,745 116,480 274,457 29,137

Total current assets

30 June 2020 (Unaudited) RMB’000

Notes

NON-CURRENT LIABILITIES Interest-bearing bank and other borrowings Other payables and accruals Derivative financial instruments

EQUITY Equity attributable to ordinary shareholders of the parent Share capital Reserves

Other equity instrument Non-controlling interests Total equity

16 17

Peng Jiahong

Yu Gang

Director

2020 Interim Report

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION 1. BASIS OF PREPARATION The interim condensed consolidated financial information for the six months ended 30 June 2019 has been prepared in accordance with HKAS 34 Interim Financial Reporting . The interim condensed consolidated financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual consolidated financial statements for the year ended 31 December 2018.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (CONTINUED) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Continued) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Continued) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Continued) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Continued)

The financial information relating to the year ended 31 December 2018 that is included in the

(a)

HKFRS 16 replaces HKAS 17 Leases , HK(IFRIC)-Int 4 Determining whether an Arrangement

interim condensed consolidated statement of financial position as comparative information does

contains a Lease , HK(SIC)-Int 15 Operating Leases – Incentives and HK(SIC)-Int 27 Evaluating

not constitute the Company’s statutory annual consolidated financial statements for that year but

the Substance of Transactions Involving the Legal Form of a Lease . The standard sets out the

is derived from those financial statements. Further information relating to those statutory financial

principles for the recognition, measurement, presentation and disclosure of leases and requires

statements required to be disclosed in accordance with section 436 of the Hong Kong Companies

lessees to account for all leases under a single on-balance sheet model. Lessor accounting

Ordinance is as follows:

under HKFRS 16 is substantially unchanged from HKAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in HKAS 17. Therefore,

The Company has delivered the financial statements for the year ended 31 December 2018 to the

HKFRS 16 did not have any financial impact on leases where the Group is the lessor.

Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Hong Kong Companies Ordinance. The Company’s auditors have reported on the financial statements for the year ended 31 December 2018. The auditor’s report was unqualified; and did not contain a statement under sections 406(2), 407(2) or 407(3) of the Hong Kong Companies Ordinance. This interim condensed consolidated financial information is presented in Renminbi (“RMB”) and all values are rounded to the nearest thousand (“RMB’000”) except when otherwise indicated.

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Group adopted HKFRS 16 using the modified retrospective method of adoption with the date of initial application of 1 January 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initial adoption as an adjustment to the opening balance of retained earnings at 1 January 2019, and the comparative information for 2018 was not restated and continues to be reported under HKAS 17.

New definition of a lease Under HKFRS 16, a contract is, or contains a lease if the contract conveys a right to control

The accounting policies adopted in the preparation of the interim condensed consolidated financial

the use of an identified asset for a period of time in exchange for consideration. Control is

information are consistent with those applied in the preparation of the Group’s annual consolidated

conveyed where the customer has both the right to obtain substantially all of the economic

financial statements for the year ended 31 December 2018, except for the adoption of the new and

benefits from use of the identified asset and the right to direct the use of the identified asset.

revised Hong Kong Financial Reporting Standards (“HKFRSs”) effective as of 1 January 2019.

The Group elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying HKAS 17 and HK(IFRIC)-Int

Amendments to HKFRS 9

Prepayment Features with Negative Compensation

4 at the date of initial application. Contracts that were not identified as leases under HKAS 17

HKFRS 16

Leases

and HK(IFRIC)-Int 4 were not reassessed. Therefore, the definition of a lease under HKFRS 16

Amendments to HKAS 19

Plan Amendment, Curtailment or Settlement

has been applied only to contracts entered into or changed on or after 1 January 2019.

Amendments to HKAS 28

Long-term Interests in Associates and Joint Ventures

HK(IFRIC)-Int 23

Uncertainty over Income Tax Treatments

At inception or on reassessment of a contract that contains a lease component, the Group

Annual Improvements

Amendments to HKFRS 3, HKFRS 11, HKAS 12 and HKAS 23

allocates the consideration in the contract to each lease and non-lease component on the basis

2015-2017 Cycle

of their standard-alone prices. A practical expedient is available to a lessee, which the Group has adopted, not to separate non-lease components and to account for the lease and the

Other than as explained below regarding the impact of HKFRS 16 Leases , HK(IFRIC)-Int 23

associated non-lease components (e.g., property management services for leases of properties)

Uncertainty over Income Tax Treatments , the new and revised standards are not relevant to the

as a single lease component.

preparation of the Group’s interim condensed consolidated financial information. The nature and impact of the new and revised HKFRSs are described below:

Genertec Universal Medical Group Company Limited

2020 Interim Report

CEO SPEECH

CORPORATE PROFILE Genertec Universal Medical Group Company Limited (通用環球醫療集團有限公司) and its subsidiaries are

Contents

the leading medical and health conglomerate. Focusing on the fast-growing healthcare service industry in China and leveraging on our diversified healthcare resources platform and outstanding financial strength, we have been committed to building up hospitals’ comprehensive strengths in terms of healthcare technology, service quality, operating efficiency as well as managerial capacity.

Corporate Information

Definition

Corporate Profile

Performance Overview

ample experience of serving hospitals over the years, strong financial position and proficient business

Management Discussion and Analysis

established sound cooperation with hundreds of domestic and foreign well-known medical experts and

The largest shareholder of the Company is China General Technology (Group) Holding Company Limited (中國通用技術（集團）控股有限責任公司), which is one of the key state-owned enterprises under direct

Disclosure of Interests

Corporate Governance

Other Information

Report on Review of Interim Condensed Consolidated Financial Statements

administration of the PRC central government with medical and healthcare as its main business. Since the incorporation of the Company, leveraging on our considerable insights into healthcare industry, sourcing capability, we have accumulated over a thousand hospital customers throughout China, academic leaders, and formed strategic partnerships with famous healthcare institutions in China and services providers in America and European countries, including those from the United Kingdom and Germany. Through our continuous expansion of healthcare resources, we have established a unique and innovative business model to provide customers with integrated healthcare solutions, comprising healthcare financial services, hospital investment and management services, healthcare technology services with clinical department upgrade as the core and healthcare digitalization services. We are headquartered in Hong Kong and have set up an operation center in Beijing. We have also established four subsidiaries

57 59 61 64

Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Interim Condensed Consolidated Statement of Financial Position Interim Condensed Consolidated Statement of Changes in Equity Interim Condensed Consolidated Statement of Cash Flows Notes to Interim Condensed Consolidated Financial Statements

in Tianjin Free Trade Zone successively and one subsidiary in Hengqin, Zhuhai, set up or acquired three subsidiaries in connection with the International Land Port Hospital of the First Affiliated Hospital of Xi’an Jiaotong University, and opened offices in central cities of various provinces in China such as Guangdong, Shaanxi, Shandong, Henan, Hunan, Sichuan and Heilongjiang, further strengthening our business network through which our successful regional experience could be used to guide our work in the surrounding areas and then be applied nationwide. We will strive to firmly seize good opportunities from the growing healthcare industry in China and continue to be committed to promoting the development of China’s healthcare service industry. We will establish strategic alliances with a broad range of domestic and foreign leading professional healthcare institutions, well-known experts and international medical equipment suppliers, expand our healthcare resources platform, reinforce our foundation for development and enrich our professional services to fulfil our social responsibilities during our development and enhance our corporate value through continuous innovation.

2020 Interim Report

iii

MANAGEMENT DISCUSSION AND ANALYSIS 1. BUSINESS REVIEW AND PROSPECTS In the first half of 2018, the Group seized the policy opportunities of the medical industry, and it has been pursuing the goal of building itself into a leading medical and health conglomerate in China, and continuing to enrich and integrate its domestic and international medical resources. The Group also expanded its network of hospital clients, and continued to advance the synergetic development of its businesses such as hospital investment and management, medical finance, medical technology and healthcare digitalization services. As a result, the Group achieved a steady increase in its operating performance. For the six months ended 30 June 2018, the Group’s revenue increased by 26.7% to RMB2,094.8 million; while the Group’s profit before tax increased by 25.2% to RMB1,001.7 million as compared to the corresponding period of the previous year. In the same period, the Group achieved a steady growth in its asset size and maintained good asset quality. The corporate credit rating of China Universal Leasing Co., Ltd., a wholly-owned subsidiary of the Group, was successively uprated to AAA by China Cheng Xin International Credit Rating Co., Ltd.（中誠信國

MANAGEMENT DISCUSSION AND ANALYSIS

2. ANALYSIS OF PROFIT OR LOSS 2.1 Overview In the first half of 2018, the Group seized the development opportunities in the healthcare industry, continued to innovate its business development model, consolidated its operational foundation, and achieved a steady growth in operating results. In the first half of 2018, the Group recorded a revenue of RMB2,094.8 million, representing an increase of RMB440.9 million or 26.7% as compared to the corresponding period of the previous year. Profit before tax was RMB1,001.7 million, representing an increase of RMB201.8 million or 25.2% as compared to the corresponding period of the previous year. The following table sets forth the Group’s statement of profit or loss for the six months ended 30 June 2018:

際信用評級有限責任公司）and Shanghai Brilliance Credit Rating & Investors Service Co., Ltd.（上海

For the six months

新世紀資信投資服務有限公司）, which further optimized the Group’s overall financing position.

ended 30 June

1.1 Hospital Investment and Management Business In the first half of 2018, the Group fully utilized its resources advantages, actively seized the policy opportunities available and intensified its efforts to push forward with its hospital investment and management business. On the one hand, the Group steadily pushed ahead with the existing projects and potential cooperative projects. On the other hand, the Group seized the full opportunities of the reform of medical institutions of SOEs by way of spin-off to conduct merger and acquisition negotiations for take-over and integration of the medical institutions owned by SOEs.

Revenue Cost of sales Gross profit

2019

RMB’000

(Unaudited)

2,094,780

1,653,892

26.7%

(574,295)

33.7%

1,079,597

22.9%

(767,807) 1,326,973 44,208

Change

9,949

344.3%

Execution of the Contract for Cooperation on Construction of the New East District of Handan First Hospital

Selling and distribution costs

(171,216)

(157,916)

8.4%

Administrative expenses

(128,089)

(115,387)

11.0%

On 9 August 2018, the Group formally signed a contract with the Health and Family Planning

(68)

(512)

-86.7%

Other expenses

(70,149)

(15,823)

343.3%

799,908

25.2%

(268,406)

(220,993)

21.5%

733,253

578,915

26.7%

0.43

0.34

26.7%

Committee of Handan and Handan First Hospital for co-establishment of the New East District. Handan is an important portal city in southern Hebei province and occupies a central location within Shanxi, Hebei, Shandong and Henan provinces. Handan First Hospital is a large-scale comprehensive Grade III Class A hospital that integrates medical services, teaching, scientific research, disease prevention, health care and rehabilitation. Handan First Hospital plays a leading role in terms of its comprehensive medical strength in the whole city. The New East District planned will operate as a new branch of Handan First Hospital with 2,000 registered beds (to be built in phase I and II), and position as a comprehensive hospital with top specialized departments. In the future, the new branch will work with Handan First Hospital to

Other income and gains

2020

Financial costs

Profit before tax Income tax expense Profit for the period

1,001,659

Basic and diluted earnings per share

(RMB)

provide medical services for approximately 25 million people in Shanxi, Hebei, Shandong and Henan provinces. Total investments for the project will be no more than RMB2 billion, of

Genertec Universal Medical Group Company Limited

2020 Interim Report

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. CORPORATE INFORMATION

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13. CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS

Genertec Universal Medical Group Company Limited (the “Company”) is a limited liability company

30 June

31 December

which was incorporated in Hong Kong on 19 April 2012. Pursuant to the special resolutions of

2020

2019

shareholders dated 6 February 2015 and 10 June 2015, respectively, the Company changed its

(Unaudited)

(Audited)

name from Universal International Leasing Co., Limited to Universal Medical Services & Health

RMB’000

2,063,774

1,831,990

140,166

850,270

2,203,940

2,682,260

Management Company Limited with effect from 17 February 2015 and then to Universal Medical Financial & Technical Advisory Services Company Limited with effect from 11 June 2015. Pursuant

Cash and bank balances

to the special resolution of shareholders dated 6 June 2018, the Company changed its name from

Time deposits

Universal Medical Financial & Technical Advisory Services Company Limited to Genertec Universal Medical Group Company Limited with effect from 9 July 2018. The registered office of the Company is located at Room 702, Fairmont House, 8 Cotton Tree Drive, Central, Hong Kong. The Company’s shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) since 8 July 2015. The Company and its subsidiaries (the “Group”) is principally engaged in the provision of financing to its customers under finance lease arrangements, the provision of advisory services, the sale of

Less: Pledged deposits and restricted bank deposits related to asset-backed securitisations

(140,087)

(403,106)

(119,166)

(529,270)

Time deposits with original maturity of more than three months

medical equipment, the provision of medical equipment leases under operating lease arrangements, and the provision of other services as approved by the Ministry of Commerce of the People’s

Cash and cash equivalents

1,944,687

1,749,884

Republic of China (the “PRC”) in Mainland China. As at 30 June 2018, the cash and bank balances of the Group denominated in RMB amounted

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES 2.1 Basis of preparation

into other currencies, however, under Mainland China’s Foreign Exchange Control Regulations

2.1 Basis of preparation

is permitted to exchange RMB for other currencies through banks authorised to conduct foreign

2.1 Basis of preparation 2.1 Basis of preparation The interim condensed consolidated financial statements for the six months ended 30 June 2018 are prepared in accordance with HKAS 34. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s audited financial statements for the year ended 31 December 2017, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRs”) and included in the 2017 annual report of the Company. These interim condensed consolidated financial statements are presented in Renminbi (“RMB”) and all values are rounded to the nearest thousand (“RMB’000”) except when otherwise indicated.

to RMB1,893,835,000 (31 December 2017: RMB1,728,774,000). RMB is not freely convertible

Genertec Universal Medical Group Company Limited

and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group exchange business. Cash at banks earns interest at either fixed or floating rates based on daily bank deposit rates. As at 30 June 2018, cash of RMB119,633,000 (31 December 2017: RMB346,741,000) was pledged for bank and other borrowings. As at 30 June 2018, cash of RMB20,454,000 (31 December 2017: RMB56,365,000) was not available for use by the Group in accordance with the arrangements entered into by the Group and the special purpose trusts in the securitisation transactions described in note 24. The cash collected by the Group from the associated finance lease contracts of the securitisations has to be passed on to the investors of the asset-backed securities without material delay. As at 30 June 2018, cash of RMB223,039,000 (31 December 2017: RMB130,955,000) was deposited with Genertec Finance Co., Ltd., which is a related party.

2020 Interim Report

管理層討論及分析 MANAGEMENT DISCUSSION AND ANALYSIS 業績分析

RESULTS ANALYSIS

於二零一九年十二月三十一日，本集團總資產為人民幣1,131,901,854.99元，較二零一八年十二月三十一日的人民幣1,257,656,669.24元減少10.00%。其中流動資產總額為人民幣708,206,008.92元，佔總資產的62.57%，較二零一八年十二月三十一日的人民幣801,583,778.55元減少11.65%。物業、廠房及設備總額為人民幣249,779,768.10元，佔總資產的22.07%，較二零一八年十二月三十一日的人民幣262,030,589.13元減少4.68%。於二零一九年十二月三十一日，本集團負債總額為人民幣166,823,065.32元，資產負債率（總負債除以總資產）為14.74%，銀行及其他短期貸款為人民幣 6,483,910.19元，較二零一八年十二月三十一日的人民幣6,981,019.84元減少7.12%。於本年度，本集團未有安排其他籌資活動。

The Group’s total assets decreased by 10.00% from RMB1,257,656,669.24 as at 31 December 2018 to RMB1,131,901,854.99 as at 31 December 2019, of which current assets amounted to RMB708,206,008.92, accounting for 62.57% of the total assets and representing a decrease of 11.65% as compared with RMB801,583,778.55 as at 31 December 2018. Property, plant and equipment amounted to RMB249,779,768.10, accounting for 22.07% of the total assets and representing a decrease of 4.68% as compared with RMB262,030,589.13 as at 31 December 2018. As at 31 December 2019, the Group’s total liabilities amounted to RMB166,823,065.32; the Group’s gearing ratio (total liabilities divided by total assets) was 14.74%; bank and other short-term loans were RMB6,483,910.19, which decreased by 7.12% as compared with RMB6,981,019.84 as at 31 December 2018. During the Year, the Group did not conduct other capital raising activities.

於二零一九年十二月三十一日，本集團銀行存款及現金共折合人民幣459,059,145.36元，較二零一八年十二月三十一日的人民幣441,997,685.40 元增加3.86%。於本年度，本集團的銷售費用、管理費用、研發費用、財務費用分別為人民幣 12,093,142.13元、人民幣51,866,992.48元、人民幣 10,699,510.81元及人民幣－ 5,514,691.80元，較去年度的人民幣19,844,839.89元、人民幣59,379,163.81 元、人民幣5,559,320.05元及人民幣－ 4,125,891.27 元，分別減少39.06%、減少12.65%、增加92.46%及增加33.66%。

As at 31 December 2019, the Group’s bank deposits and cash totaled RMB459,059,145.36, representing an increase of 3.86% as compared with RMB441,997,685.40 as at 31 December 2018. During the Year, the Group’s selling expenses, administration expenses, research and development expenses and finance expenses amounted to RMB12,093,142.13, RMB51,866,992.48, RMB10,699,510.81 and RMB-5,514,691.80, representing a decrease of 39.06%, a decrease of 12.65%, an increase of 92.46% and an increase of 33.66% respectively as compared with RMB19,844,839.89, RMB59,379,163.81, RMB5,559,320.05 and RMB-4,125,891.27 respectively in the Previous Year.

於二零一九年十二月三十一日，本集團的應收賬款及票據分別為人民幣74,162,187.82元和人民幣 39,263,164.85元，較二零一八年十二月三十一日的人民幣115,319,867.21元和人民幣112,895,610.20 元，分別減少35.69%和減少65.22%。

As at 31 December 2019, the Group’s account receivables and bill receivables amounted to RMB74,162,187.82 and RMB39,263,164.85 respectively, representing a decrease of 35.69% and a decrease of 65.22% respectively as compared with RMB115,319,867.21 and RMB112,895,610.20 respectively as at 31 December 2018.

資金流動性分析

Analysis of Capital Liquidity

於二零一九年十二月三十一日，本集團流動資產為人民幣708,206,008.92元（二零一八年十二月三十一日：人民幣801,583,778.55元），流動負債為人民幣101,956,688.99元（二零一八年十二月三十一日：人民幣144,849,434.62元），年應收賬款周轉天數為 125天，年存貨周轉天數為92天。上述數據說明，本公司償債能力較強，但變現能力和管理水平尚需提高。

As at 31 December 2019, the Group’s current assets amounted to RMB708,206,008.92 (as at 31 December 2018: RMB801,583,778.55), current liabilities were RMB101,956,688.99 (as at 31 December 2018: RMB144,849,434.62), the annual receivables turnover period was 125 days and the annual inventory turnover period was 92 days. The above data indicates that the Company has strong solvency but its liquidity ability and management are yet to be improved.

成都普天電纜股份有限公司 CHENGDU PUTIAN TELECOMMUNICATIONS CABLE COMPANY LIMITED

管理層討論及分析 MANAGEMENT DISCUSSION AND ANALYSIS 非流動的負債或貸款於二零一九年十二月三十一日，本集團為購置法國加速器的長期借款餘額為人民幣6,483,910.19元（折合829,621.93歐元）。該貸款為法國政府貸款，年利率為0.5%。該項以歐元計算之借款受國際外匯市場匯率波動的影響，存在一定的匯兌風險。該項長期借款均為分期付款，其期限最長達三十六年。由於該長期借款餘額較小，因此對本集團的營運無重大影響。

Non-current Liabilities or Loans As at 31 December 2019, the outstanding amount of the Group’s longterm loan incurred as a result of the purchase of a French accelerator was RMB6,483,910.19 (equivalent to EUR829,621.93). The loan is a French government loan at an interest rate of 0.5% per annum. The loan denominated in Euro is subject to exchange rate risks resulting from fluctuations of the exchange rate in the international foreign exchange market. This long-term loan is an instalment loan in respect of which the maximum repayment period is thirty-six years. As the outstanding amount of the long-term loan is relatively small, there is no material impact on the operations of the Group.

本集團資本結構情況

Capital Structure of the Group

本集團的資本來源是企業盈利、募集資金、銀行及其他貸款、和老廠區土地轉讓款。募集資本的使用，嚴格按照相關法定程序辦理。此外，為保證資本的合理運用，本集團加強了原有的財務管理制度。資金的使用亦注重避免高風險和提高投資回報率。在本年度，債務到期償還及責任到期履行方面均能夠按照有關合約執行。

The Group’s capital is derived from its profit, proceeds raised, bank and other loans and proceeds from the disposal of the land use rights of the old site of the Company. The use of raised proceeds has strictly complied with the relevant legal requirements. In addition, in order to ensure the proper utilization of capital, the Group has strengthened its existing financial management system. The Group has also paid attention to avoiding high risks and to improving its return on investments. During the Year, debts and obligations were repaid and performed when due in accordance with the relevant contractual terms.

流動資金及資金來源

Liquidity and Source of Funds

本集團於本年度之經營業務現金流量淨額為人民幣72,143,878.43元（去年度：為人民幣－ 42,566,901.22元，增加為人民幣114,710,779.65元）。

During the Year, the Group’s net cash flow from operating activities amounted to RMB72,143,878.43, representing an increase of RMB114,710,779.65 as compared with RMB-42,566,901.22 in the Previous Year.

本集團在本年度用於添置物業、廠房及設備和在建工程支出人民幣18,496,451.64元（去年度：人民幣20,619,783.73元，減少人民幣2,123,332.09元）。

During the Year, the Group spent RMB18,496,451.64, representing a decrease of RMB2,123,332.09 as compared with RMB20,619,783.73 in the Previous Year, for the purchase of property, plant and equipment and expenses on the construction in progress.

於二零一九年十二月三十一日，本集團負債和所有者權益總額為人民幣1,131,901,854.99元（於二零一八年十二月三十一日：人民幣1,257,656,669.24 元）。於本年度內本集團利息支出為人民幣 102,087.06元（去年度：人民幣111,020.63元）。

As at 31 December 2019, the Group’s liabilities and shareholders’ equity amounted to RMB1,131,901,854.99 (as at 31 December 2018: RMB1,257,656,669.24). The Group’s interest expenses amounted to RMB102,087.06 for the Year (for the Previous Year: RMB111,020.63).

或有負債

Contingent Liabilities

於二零一九年十二月三十一日，本集團並無或有負債（於二零一八年十二月三十一日：無）。

As at 31 December 2019, the Group did not have any contingent liabilities (as at 31 December 2018: Nil).

二零二零年中期業績報告 INTERIM REPORT 2020

合併資產負債表 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2020年12月31日

合併資產負債表 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the year end on 31st December 2020

會合01表編製單位：成都普天電纜股份有限公司

2020年12月31日 For the year end on 31st December 2020

Form AC-01 PREPARED BY: CHENGDU PUTIAN TELECOMMUNICATIONS CABLE COMPANY LIMITED

會合01表編製單位：成都普天電纜股份有限公司

Form AC-01 PREPARED BY: CHENGDU PUTIAN TELECOMMUNICATIONS CABLE COMPANY LIMITED

單位：人民幣元 Monetary unit: RMB Yuan 資產

Asset

流動負債：貨幣資金結算備付金拆出資金交易性金融資產衍生金融資產應收票據應收賬款應收款項融資預付款項應收保費應收分保賬款應收分保合同準備金其他應收款買入返售金融資產存貨合同資產持有待售資產一年內到期的非流動資產其他流動資產

Current assets Cash and bank (Note (i)) Settlement funds Loans to other banks Held-for-trading financial assets Derivative financial assets Notes receivable Accounts receivable Receivables financing Advances paid Premiums receivable Reinsurance accounts receivable Reinsurance reserve receivable Other receivables Financial assets under reverse repo Inventories Contractual asset Assets classified as held for sale Non-current assets due within one year Other current assets

流動資產合計非流動資產：發放貸款和墊款債權投資其他債權投資長期應收款長期股權投資其他權益工具投資其他非流動金融資產投資性房地產固定資產在建工程生產性生物資產油氣資產使用權資產無形資產開發支出商譽長期待攤費用遞延所得稅資產其他非流動資產

註釋號 Note No.

期末數 31st Dec 2020

上年年末數 31st Dec 2019

459,059,145.36

441,997,685.40

2 3 4 5

39,263,164.85 74,162,187.82 23,544,919.54 5,227,159.45

112,895,610.20 115,319,867.21

9,417,517.89

11,674,523.95

84,117,089.03

88,937,485.68

非流動資產合計

Total non-current assets

資產總計

Total assets

成都普天電纜股份有限公司 CHENGDU PUTIAN TELECOMMUNICATIONS CABLE COMPANY LIMITED

負債和所有者權益（或股東權益）流動負債：短期借款向中央銀行借款拆入資金交易性金融負債衍生金融負債應付票據應付賬款預收款項合同負債賣出回購金融資產款吸收存款及同業存放代理買賣證券款代理承銷證券款

Total current assets Non-current assets: Loans and advances paid Debt investment Other debt investment Long-term receivables Long-term equity investments Other equity instrument investments Other non-current financial assets Investment property Fixed assets Construction in progress Productive biological assets Oil&gas assets Right-of-use assets Intangible assets Development expenditure Goodwill Loan-term prepayments Deferred tax assets Other non-current assets

16,709,878.31

單位：人民幣元 Monetary unit: RMB Yuan

13,414,824.98

14,048,727.80

708,206,008.92

801,583,778.55

9 10 11

123,928,703.14 4,977,441.00

132,459,948.88 4,977,441.00

12 13 14

70,579,366.92 170,358,882.98 8,841,518.20

66,508,775.47 164,963,313.16 30,558,500.50

45,009,933.83

16 17

應付職工薪酬應交稅費其他應付款應付手續費及佣金應付分保賬款持有待售負債一年內到期的非流動負債其他流動負債流動負債合計

Liabilities and equity Current liabilities: Short-term borrowing Central bank loans Loans from other banks Held-for-trading financial liabilities Derivative financial liabilities Notes payable Accounts payable Advanced received Contract liabilities Financial liabilities under repo Absorbing deposit and interbank deposit Deposit for agency security transaction Deposit for agency security underwriting Employee benefits payable Taxes and rates payable Other payables Handling fee and commission payable Reinsurance accounts payable Liabilities classified as held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities

註釋號 Note No.

期末數 31st Dec 2020

上年年末數 31st Dec 2019

18 19 20

50,506,098.62 254,715.26 4,161,020.10

63,251,671.34 381,164.12 7,298,184.05

21 22 23

24,383,820.96 1,485,079.75 21,165,954.30

27,803,822.80 7,703,317.53 38,411,274.78

101,956,688.99

144,849,434.62

法定代表人：吳長林

主管會計工作的負責人：郁謙

會計機構負責人：彭曉莉

Legal representative: Wu Changlin

Chief accountant: Yu Qian

Head of the accounting department: Peng Xiaoli

47,937,324.47

8,667,587.21 423,695,846.07

456,072,890.69

1,131,901,854.99

1,257,656,669.24 二零二零年中期業績報告 INTERIM REPORT 2020

財務報表附註 NOTES TO FINANCIAL STATEMENTS 2020年度

金額單位：人民幣元

財務報表附註 NOTES TO FINANCIAL STATEMENTS

For the year ended December 31, 2020 Currency Unit: RMB

一、公司基本情況成都普天電纜股份有限公司（以下簡稱公司或本公司）系經國務院有關部門批准，由原中國郵電工業總公司（現為中國普天信息產業集團有限公司）直屬國營郵電部成都電纜廠改組並作為獨立發起人發起設立，於1994年10月1日在成都市工商行政管理局登記註冊，總部位於四川省成都市。公司現持有統一社會信用代碼為 9151010020193968XY的營業執照，註冊資本40,000.00萬元，股份總數400,000,000股（每股面值1元），其中：中國普天信息產業股份有限公司出資24,000.00萬元，持股比例為60%；香港上市普通股（H股）股東出資 16,000.00萬元，持股比例為40%。公司股票已於1994年12月13日在香港聯合交易所掛牌交易。

本公司屬製造行業。主要經營活動：電線電纜、光纖光纜、線纜專用材料、輻照加工、電纜附件的技術研發、產品生產、銷售和服務，電器技術開發、轉讓、諮詢及相關配套服務；設計與安裝：城市與道路照明工程，建築裝修裝飾工程，消防設施工程，機電設備安裝工程，小區樓宇弱電系統工程；批發零售：通信設備（不含無線電發射裝置），照明器具，電工器材、儀器儀表、電子測量儀器，電子元器件，輸配電及控制設備，五金產品及電子產品，塑料製品，礦產品、建材及化工產品（除化學危險品及易製毒化學品），日用百貨；佣金代理（拍賣除外）；自營商品及其同類商品的進出口；自有房地產、機械設備租賃，物業管理。

COMPANY PROFILE Chengdu PUTIAN Telecommunications Cable Company Limited (the “Company”) was incorporated and registered with the Chengdu Administration Bureau of Industry and Commerce on 1 October 1994 after its restructuring from Chengdu Cable Plant of the Posts and Telecommunications Ministry of China (now known as “China PUTIAN Corporation”), as independent promoter, under the approval of the relevant department of the State Council. The Company is headquartered in Chengdu, Sichuan Province, and holds the Business (License numbered 9151010020193968XY). The registered capital of the Company is RMB400,000,000. There are a total of 400,000,000.00 shares in issue with the nominal value of RMB1 each of which: equity interest of China PUTIAN Corporation amounts to RMB240,000,000, representing 60% of the total shares; equity interest of public holders of ordinary shares (H Shares) listed in Hong Kong amounts to RMB160,000,000, representing 40% of the total shares. The shares have been listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) on 13 December 1994. The Company’s business is in the sector of the manufacturing industry. Main business activities: wire and cable, fiber optic cable, cable special materials, radiation processing, cable technology research and development, product production, sales and service, electrical technology development, transfer, consulting and related ancillary services; design and installation: city and road lighting engineering, building construction and decoration engineering, fire safety facilities engineering, mechanical and electrical equipment installation engineering, residential building electroweak system engineering; wholesale and retail: communication equipment (excluding radio transmitters), lighting equipment, electrical equipment, instrumentation, electronic measuring instruments, electronic components, transmission and distribution and control equipment, hardware products and electronic products, plastic products, mineral products, building materials and chemical products (except dangerous chemical products and precursor chemicals), groceries; commission agency (excluding auctions); import and export of self-operated commodities and their similar products; own real estate, machinery and equipment leasing and property management.

2020年度

二、財務報表的編製基礎（續）

金額單位：人民幣元

II.

（一）遵循企業會計準則的聲明（續）

For the year ended December 31, 2020 Currency Unit: RMB

PREPARATION BASIS OF THE FINANCIAL STATEMENTS (I)

Statement of compliance (Continued)

金融資產和金融負債的分類（續）

Cash and bank balances (Continued)

金融資產和金融負債的分類（續）

Cash and bank balances (Continued)

金融資產和金融負債的分類（續）

Cash and bank balances (Continued)

本公司所編製的財務報表符合企業會計準則的要求，真實、完整地反映了公司的財務狀況、經營成果和現金流量等有關信息。

The financial statements have been prepared in accordance with the requirements of China Accounting Standards for Business Enterprises (CASBEs), and present truly and completely the financial position, results of operations and cash flows of the Company.

（二）會計期間

(II)

會計年度自公曆1月1日起至12月31 日止。

（三）營業週期

The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.

(III)

公司經營業務的營業週期較短，以 12個月作為資產和負債的流動性劃分標準。

（四）記賬本位幣

Operating cycle The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if it is expected to be realized or due within 12 months.

(IV)

採用人民幣為記賬本位幣。

Accounting period

Functional currency The Company’s functional currency is Renminbi (RMB) Yuan. 期末數 Closing balance

上年年末數 Closing balance of the preceding period

庫存現金（附註） Cash on hand (Note) 銀行存款 Cash in bank 其他貨幣資金（人民幣） Other cash and bank balances (RMB)

5,969.18 445,329,592.05 13,723,584.13

19,963.86 427,169,522.44 14,808,199.10

合計

459,059,145.36

441,997,685.40

項目

附註：

Items

Total 在租賃開始日，公司將實質上轉移了

Note:

Accounts receivable shall be analyzed by age since the month

與租賃資產所有權有關的幾乎全部風

when such receivables are accrued and shall be settled by time

險和報酬的租賃劃分為融資租賃，除

sequence.

此之外的均為經營租賃。

成都普天電纜股份有限公司 CHENGDU PUTIAN TELECOMMUNICATIONS CABLE COMPANY LIMITED

二零二零年中期業績報告 INTERIM REPORT 2020

CONTENTS Page(s) Corporate Information

Financial Highlights

Management Discussion and Analysis

Other Information

Report on Review of Condensed Consolidated Financial Statements

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

Notes to the Condensed Consolidated Financial Statements

INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS Xingda International Holdings Limited (“Company”) and its subsidiaries (together the “Group” or “Xingda”) are pleased to

MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS REVIEW

present the unaudited interim results for the six months ended 30 June 2019. In the first half of 2019, Xingda adhered to its sound and pragmatic operational approach and actively consolidated its For the six months ended 30 June 2019, the Group recorded revenue amounted to RMB3,769.2 million, representing a 2.5%

leadership in the radial tire cord industry. It also gradually implemented flexible sales strategy, optimized products and

growth relative to the corresponding period last year (first half of 2018: RMB3,677.7 million), attributable mainly to the

expanded its markets. In the first half of 2019, the Group recorded total sales volume of 404,600 tonnes, up 3.0% year-

growth of export sales of radial tire cords and consistent demand for radial tire cords in the domestic market. The Group’s

on-year. Sales volume of radial tire cord climbed moderately by 3.8% year-on-year to 338,200 tonnes, making up 83.6% of

gross profit rose by 17.3% year-on-year to RMB724.3 million (first half of 2018: RMB617.6 million), while gross profit

the Group’s total sales volume (first half of 2018: 83.0%). The sales volume of bead wire and other wire decreased by 0.6%

margin also increased, by 2.4 percentage points, to 19.2% as compared with the last corresponding period (first half of

to 66,400 tonnes, accounting for 16.4% of the Group’s total sales volume (first half of 2018: 17.0%).

2018: 16.8%), thanks mainly to the drop of average price of steel wire rods on a year-on-year basis and the management implementing strict cost control measures as well as increase in revenue during the period. Profit attributable to owners of

During the period, the sales volume of radial tire cord for trucks slightly rose by 0.4% to 216,600 tonnes, against the

the Company increased by 25.3% year-on-year to RMB159.4 million (first half of 2018: RMB127.2 million). Basic earnings

corresponding period last year, owed mainly to the stable demand for replacement of truck tires. As for the sales volume of

per share were RMB10.68 fen. The Board does not recommend payment of an interim dividend for the six months ended

radial tire cord for passenger cars, it increased by 10.4% to 121,600 tonnes, mainly due to the obvious boost in sales orders

30 June 2019.

of radial tire cord for passenger cars from overseas market. The sales volume of the two segments accounted for 64.0% and 36.0% respectively of the Group’s total sales of radial tire cords during the six months ended 30 June 2019 (first half

According to data from China Rubber Industry Association, the 39 key member units of its tire division recorded total

of 2018: 66.2% and 33.8%).

domestic radial tire output of approximately 185 million in the first half of 2019, a year-on-year increase of 1.1%, radialization rate rose mildly to 94.5%. Also, statistics of China’s Ministry of Public Security and China Association of

Sales Volume

Automobile Manufacturers showed, in the first half of 2019, car parc in China surged to historical high at 250 million and

Six months ended 30 June

total land freight traffic volume also increased slightly as compared with the same period last year. The steady growth of logistics activities guaranteed stable demands on the replacement of radial tires as well as the radial tire cords in the first

2020

2019

Tonnes

Change

half of 2019. Radial tire cords

338,200

325,900

On 28 March 2019, it was announced that, among other things, the Board recommended the payment of a final dividend

– For trucks

216,600

215,800

+0.4%

of 15.0 HK cents per share (the “2018 Final Dividend”) of HK$0.1 each in the capital of the Company (the “Share(s)”) for

– For passenger cars

121,600

110,100

+10.4%

66,400

66,800

-0.6%

404,600

392,700

+3.0%

the year ended 31 December 2018 payable to the shareholders of the Company whose names appeared on the register of

Bead wires and other wires

+3.8%

members of the Company (“Register of Members”) as at the close of business on Thursday, 6 June 2019 (“Record Date”). On the Record Date, the Group announced the details in relation to the scrip dividend scheme (“Scrip Dividend Scheme”), pursuant to which shareholders of the Company may opt to receive an allotment of new shares of HK$0.1 each in the share capital of the Company (“Scrip Shares”) in lieu of cash only for the 2018 Final Dividend. Under the Scrip Dividend Scheme, shareholders of the Company whose names appeared on the Register of Members on the Record Date may elect to receive: (a) a cash dividend of 15.0 HK cents for each Share held on the Record Date; or (b) a scrip dividend of Scrip Shares at an issue price, subject to any fractional entitlement being disregarded; or (c) a combination of partly in (a) and partly in (b) above. The issue price of the Scrip Shares is HK$1.87 per Share. With the Scrip Dividend Scheme in place, the Company’s controlling shareholders had opted to receive the 2018 Final Dividend partly in Scrip Shares and partly in cash, and had been allotted, in aggregate, 23,812,299 Scrip Shares, mirroring again its confidence in the Company’s long-term development.

Total

By market, the sales volume of radial tire cord in China slightly rose by 0.4% to 249,100 tonnes (first half of 2018: 248,000 tonnes) in the first half of 2019. In the face of US trade protectionism and guided by the “One Belt One Road” national initiative, Chinese tire enterprises have gradually been establishing production plants in overseas and particularly Southeast Asia in the recent years. Xingda has heeded this trend and also has continued to press ahead with its international sales strategies to broaden its business footprint and international customer base. As a consequence, overseas orders from countries like Thailand, Korea, Japan, Brazil, Germany and Slovakia have steadily increased. Sales of radial tire cords in overseas markets increased during the period by 14.4% year-on-year to 89,100 tonnes (first half of 2018: 77,900 tonnes). The sales volume in domestic and overseas markets constituted 73.6% and 26.4% respectively of the Group’s total sales volume (first half of 2018: 76.1% and 23.9%).

XINGDA INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2020

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2020

At 30 June 2020 As at 30 June 2020 (unaudited) RMB’000

As at 31 December 2019 (audited) RMB’000

4,316,900 356,620 – 153,960

3,843,962 – 344,708 153,960

1,300,000 20,566 28,463

900,000 17,321 29,963

6,176,509

5,289,914

621,066 4,765,132 76,060 –

679,911 5,494,726 60,249 7,315

412,000 – 1,580,288

100,000 52,000 1,104,447

7,454,546

7,498,648

3,452,492 37,524 2,711 26,776 197,077 37,770 2,024,038 525

3,829,080 31,845 1,620 27,195 – 43,597 1,144,443 –

5,778,913

5,077,780

NET CURRENT ASSETS

1,675,633

2,420,868

TOTAL ASSETS LESS CURRENT LIABILITIES

7,852,142

7,710,782

NOTES

NON-CURRENT ASSETS Property, plant and equipment Right-of-use assets Prepaid lease payments Investment properties Fixed bank deposits with more than three months to maturity when placed Deferred tax assets Prepayments

CURRENT ASSETS Inventories Trade, bill and other receivables Financial assets at fair value through profit or loss Prepaid lease payments Fixed bank deposits with more than three months to maturity when placed Pledged bank deposits Bank balances and cash

CURRENT LIABILITIES Trade, bill and other payables Contract liabilities Amount due to a related company Dividend payables to non-controlling interests of a subsidiary Dividend payables Tax liabilities Borrowings – due within one year Lease liabilities

XINGDA INTERNATIONAL HOLDINGS LIMITED

13 13

16 17

As at 30 June 2020 (unaudited) RMB’000

As at 31 December 2019 (audited) RMB’000

12,254 300,000 1,344

12,327 150,000 –

313,598

162,327

7,538,544

7,548,455

148,388 5,267,048

148,388 5,302,835

Equity attributable to owners of the Company Non-controlling interests

5,415,436 2,123,108

5,451,223 2,097,232

TOTAL EQUITY

7,538,544

7,548,455

NOTES

NON-CURRENT LIABILITIES Deferred tax liabilities Borrowings – due after one year Lease liabilities

NET ASSETS CAPITAL AND RESERVES Share capital Share premium and other reserves

The condensed consolidated financial statements on pages 23 to 58 were approved and authorised for issue by the Board of Directors on 22 August 2019 and are signed on its behalf by:

LIU JINLAN

ZHANG YUXIAO

DIRECTOR

INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

GENERAL – CONTINUED

For the six months ended 30 June 2020

PRINCIPAL ACCOUNTING POLICIES – CONTINUED

General – Continued

Application of new and amendments to IFRS Standards – Continued

General – Continued

IFRS 16

Leases

General – Continued

IFRIC 23

Uncertainty over Income Tax Treatments

Amendments to IFRS 9

Prepayment Features with Negative Compensation

Amendments to IAS 19

Plan Amendment, Curtailment or Settlement

The Company is a limited company incorporated in the Cayman Islands and its shares are listed on the Main Board

Amendments to IAS 28

Long-term Interests in Associates and Joint Ventures

of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The addresses of the registered office of the

Amendments to IFRSs

Annual Improvements to IFRSs 2015 – 2017 Cycle

General – Continued

Company is Cricket Square, Hutchins Drive, P. O. Box 2681, Grand Cayman KY1-1111, Cayman Islands. The principal place of business of the Company is Xinghua City, Jiangsu Province, the People’s Republic of China (the “PRC”).

The condensed consolidated financial statements are presented in Renminbi (“RMB”) which is also the functional

disclosures set out in these condensed consolidated financial statements.

currency of the Company and its subsidiaries (the “Group”).

3.1 Impacts and changes in accounting policies of application on IFRS 16 Leases

The Company is an investment holding company and its subsidiaries are engaged in the manufacture and trading of

The Group has applied IFRS 16 for the first time in the current interim period. IFRS 16 superseded IAS 17 Leases

radial tire cords, bead wires and other wires.

(“IAS 17”), and the related interpretations.

BASIS OF PREPARATION

3.1.1 Key changes in accounting policies resulting from application of IFRS 16

The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting issued by the International Accounting Standards Board (the “IASB”) as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange.

The Group applied the following accounting policies in accordance with the transition provisions of IFRS 16. Definition of a lease A contract is, or contains, a lease if the contract conveys the right to control the use of an identified

PRINCIPAL ACCOUNTING POLICIES

asset for a period of time in exchange for consideration.

The condensed consolidated financial statements have been prepared on the historical cost basis except for investment

The Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 at

properties and financial instruments, which are measured at fair values, as appropriate.

inception or modification date, Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed.

Other than changes in accounting policies resulting from application of new International Financial Reporting Standards (“IFRSs”), the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2019 are the same as those followed in the preparation of the Group’s annual financial statements for the year ended 31 December 2018.

As a lessee Allocation of consideration to components of a contract As a practical expedient, leases with similar characteristics are accounted on a portfolio basis when the

Application of new and amendments to IFRS Standards In the current interim period, the Group has applied, for the first time, the following new and amendments to IFRSs

Group reasonably expects that the effects on the financial statements would not differ materially from individual leases within the portfolio.

which are mandatory effective for the annual period beginning on or after 1 January 2019 for the preparation of the Group’s condensed consolidated financial statements:

XINGDA INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2020

CONTENTS 2 6 10 46 53 54 57 59

CORPORATE INFORMATION CHAIRMANâ&#x20AC;&#x2122;S STATEMENT

MANAGEMENT DISCUSSION AND ANALYSIS

OTHER INFORMATION REVIEW REPORT ON INTERIM FINANCIAL STATEMENTS

UNAUDITED INTERIM CONSOLIDATED BALANCE SHEET UNAUDITED INTERIM CONSOLIDATED INCOME STATEMENT

UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES

IN EQUITY 61 63 66 67 69 71

UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED INTERIM BALANCE SHEET

UNAUDITED INTERIM INCOME STATEMENT UNAUDITED INTERIM STATEMENT OF CHANGES IN EQUITY

UNAUDITED INTERIM STATEMENT OF CASH FLOWS

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

315 SUPPLEMENTARY INFORMATION TO UNAUDITED INTERIM FINANCIAL STATEMENTS

BBMG CORPORATION INTERIM REPORT 2020

CHAIRMAN’S STATEMENT

Dear Shareholders, On behalf of the board of directors (the “Board”) of BBMG Corporation* (the “Company” or “BBMG”), I am pleased to present to you the interim results of the Company for the six months ended 30 June 2019 (the “Reporting Period”), and report on the operating results of the Company during the said period for your review.

Review In the first half of 2019, faced with the complex economic conditions, ever-changing operating environment and the challenging market situation, the Company adhered to the general work principle of seeking progress while maintaining stability, implemented the new development philosophy and fulfilled the requirements regarding high-quality development. The Company’s efforts in restructuring, reform and consolidation continued to bear fruits. In the meantime, the Company kept on pioneering and innovating, and maintained a sound operation. During the Reporting Period, the Company recorded an operating revenue of RMB44,611.1 million, representing a year-on-year increase of 26.1%. Net profit attributable to the shareholders of the parent company amounted to RMB3,045.6 million, representing a year-on-year increase of 26.4%. Basic earnings per share attributable to the shareholders of the parent company amounted to RMB0.29.

for identification purposes only

Jiang Deyi Chairman

BBMG CORPORATION INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

BBMG CORPORATION INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

DETAILS OF THE COMPANY’S PRINCIPAL BUSINESS, BUSINESS MODEL AND INDUSTRY SITUATION DURING THE REPORTING PERIOD (I)

retardant paint and comprehensive strength ranked top 3 in China. Tiantan Furniture is the leading enterprise in the furniture industry in China. The production capacity of the single production line of mineral wool boards of STAR-USG Building Materials

Principal business and business model of the Company

ranked number one in the world, which is also the largest production line in Asia

The Company’s principal businesses include cement and ready-mixed concrete – modern

and also ranked number one in China in terms of sales to mid- to high-end channels.

building materials manufacturing and commerce and logistics – property development – property

With strenuous efforts made in implementation of structural adjustment and industrial

investment and management.

upgrade, the Company invested in the construction of BBMG Modern Industrial Park in Dachang, Hebei, and completed the planned upgrade of Doudian Circular Economic

Cement and ready-mixed concrete business: The Company is the third largest cement

Park in Fangshan, Beijing, thereby basically forming the centralized production model

enterprise in the country. The cement business continued to adopt Beijing, Tianjin and

in the industrial parks and gradually achieved industrial synergy. The Company took

Hebei as its core strategic regions, and continued to expand the coverage of its network,

the initiative to be the major supplier for the construction materials required by the

mainly with establishing its presence in 13 provinces (municipalities and autonomous

construction of projects in areas such as Beijing subtown center and the Xiong’an New

regions), including Beijing, Tianjin and Hebei Province, Shaanxi, Shanxi, Inner Mongolia,

Area, which made improvement to the aspects such as product quality, organisational

Northeastern region, Chongqing, Shandong, Henan and Hunan. The production capacity

security as well as management standard. In addition, the Company will continuously

of clinker amounted to approximately 110 million tonnes; the production capacity of

enhance the development of commerce and logistics industry and proactively explore

cement amounted to approximately 170 million tonnes; the production capacity of

the developed marketing modes of e-commerce.

ready-mixed concrete and ready-mixed mortar amounted to approximately 62 million cubic meters and approximately 2.40 million tonnes, respectively; while the production

Property development business sector: The Company is one of the top property

capacity of aggregates and grinding aids and admixtures amounted to approximately

development enterprises in Beijing in terms of comprehensive strength with an annual

38.5 million tonnes and approximately 0.34 million tonnes, respectively. On this basis,

area under construction of 8 million sq.m.. The Company obtained AAA credit rating,

the Company effectively demonstrated the internal synergetic mechanism with cement

and several projects developed and constructed by it were awarded “Guangsha Award”

production and ready-mixed concrete development providing support to each other. The

(廣廈獎), “Tien-yow Jeme Civil Engineering Prize” (中國土木工程詹天佑獎), and “Gold

industry layout of ready-mixed concrete in key regions and markets will be consolidated

Award of Beijing Great Wall Cup for Building Structure (北京結構長城杯金質獎). With

on the basis of concrete group as the platform, aiming to take a leading position in

its rich experience in property development business in respect to planning and design,

the north of the country among its industrial peers and become one of the largest

project management, marketing planning and customer service, the Company remains

professional enterprises engaging in the production of concrete products in the PRC.

committed to providing its customers with products and services with high quality. The

Meanwhile, the Company will insist on promoting market expansion and strategic

Company has more than 50 controlling subsidiaries, making its presence in 15 cities

resources consolidation simultaneously, and has already had a total of about 1.8 billion

including Beijing, Shanghai, Tianjin, Chongqing, Hangzhou, Nanjing, Chengdu, Hefei and

tonnes of limestone reserve in Beijing, Tianjin and Hebei.

Haikou and developing more than 130 property projects with a total gross floor area of approximately 30 million sq.m. These developed a nationwide business presence “from

Modern building materials and commerce and logistics business: The Company is one

Beijing to three major economic rims, namely Beijing, Tianjin and Hebei, Yangtze River

of the largest building materials manufacturers in China, the largest building materials

Delta and Chengdu-Chongqing region”, with a comprehensive development strength

manufacturer and one of the leaders in the building materials industry in the Pan Bohai

covering property projects of multiple categories.

Economic Rim in Beijing. It provides major products and services, namely furniture and woods, wall body and insulation materials, decorative and fitting materials, and building materials and commerce and logistics, among which, the production and sales of BBMG’s aerated products ranked second in the industry, and BBMG’s production capacity of fire

BBMG CORPORATION INTERIM REPORT 2020

Unaudited Interim Balance Sheet

Unaudited Interim Balance Sheet (continued)

As at 30 June 2020

RMB

Assets

30 June 2020

Note XV

31 December 2019

Current Assets

30 June 2020

31 December 2019

25,226,850,000.00

24,931,850,000.00

Liabilities and shareholdersâ&#x20AC;&#x2122; equity

Current liabilities 12,496,534,054.08

Cash and bank balances

57,454.00

â&#x20AC;&#x201C; 13,098,540.40

65,860,189,463.73

66,901,797,608.27

2,321,214.75

2,241,084.31

Prepayments 1

Other current assets

78,374,867,726.96

Total current assets

6,490,366,382.70

15,765,540.40

Accounts receivable Other receivables

73,407,503,615.68

Short-term loans

8,534,173.57

7,262,384.48

145,141,073.53

143,686,136.43

85,430.15

14,420,033.15

46,465,873.53

82,674,779.38

Other payables

4,427,324,415.89

4,398,166,645.39

Short-term financing bonds payable

2,000,000,000.00

6,500,000,000.00

13,102,945,179.25

8,769,671,412.11

44,957,346,145.92

44,847,731,390.94

Accounts payable Receipts in advance Wages payable Tax payable

Non-current liabilities due within one year Non-current assets Investment in other equity instruments

200,000.00

Total current liabilities

Long-term equity investments

44,858,929,917.96

46,569,735,251.07

Investment properties

11,782,278,382.50

10,487,725,592.87

Non-current liabilities

1,128,603,898.45

1,162,385,959.60

Long-term loans

24,388,941,300.00

19,767,370,000.00

Intangible assets

378,726,789.40

368,789,672.92

Bonds payable

21,711,391,470.36

18,518,190,202.83

Deferred income tax assets

271,918,567.36

266,341,821.16

Long-term wages payable

365,218,292.46

363,676,960.00

2,163,750,358.84

2,162,277,161.43

Total non-current liabilities

48,629,301,421.66

40,811,514,324.26

Total liabilities

93,586,647,567.58

85,659,245,715.20

Fixed assets

Deferred income tax liabilities Total non-current assets

Total assets

58,420,657,555.67

136,795,525,282.63

The accompanying notes form an integral part of these financial statements

58,855,178,297.62

132,262,681,913.30

The accompanying notes form an integral part of these financial statements

BBMG CORPORATION INTERIM REPORT 2020

Notes to Unaudited Interim Financial Statements

For the six months ended 30 June 2020

RMB

BASIC INFORMATION BBMG Corporation (hereinafter referred to as the “Company” or “BBMG Group”) is a joint stock company with limited liability incorporated in Beijing, the People’s Republic of China and was established on 22 December

III.

MAJOR ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES FOR BUSINESS ENTERPRISES (continued) 2.

2005. The Renminbi-denominated ordinary shares (A shares) and H shares of the Company are listed on the

Accounting period (continued) Accounting period (continued)

Shanghai Stock Exchange (“Shanghai Stock Exchange”) and The Stock Exchange of Hong Kong Limited

Accounting period (continued)

(“Stock Exchange of Hong Kong”), respectively. The Company’s headquarters is located at No. 36, North

The specific accounting policies and accounting estimates have been prepared by the Group based on

Third Ring East Road, Dongcheng District, Beijing.

actual production and operation characteristics, as mainly embodied in the provision for bad debt of accounts receivable, inventory valuation methods, the depreciation of fixed assets, classification between

The principal business activities of the Company and its subsidiaries (collectively, the “Group”) includes:

investment properties and inventory, classification between investment properties and fixed assets, the

manufacture and sale of cement and building materials, construction and decoration, trade and logistics,

recognition and allocation of development costs on properties under construction, etc.

tourism services, real estate development, property investment and management. The Company’s parent and ultimate holding company is BBMG Assets Management Co., Ltd. (北京金隅資

產經營管理有限責任公司) (formerly named as “BBMG Group Company Limited”, hereinafter referred to

Accounting period The accounting year for the Group is from 1 January to 31 December of each calendar year. The

as “BBMG Assets Company”), a company established in the People’s Republic of China, originally. On 11

accounting period for this report is from 1 January to 30 June 2019.

November 2016, State-owned Assets Supervision and Administration Commission of the People’s Government of Beijing Municipality agreed the gratuitous transfer of 100% shares of the Company held by BBMG Assets Company to Beijing SCOM Center (hereinafter referred to as “BSCOMC”). On 29 December 2016, the transfer

Functional currency The Company’s reporting and presentation currency is Renminbi (“RMB”). Unless otherwise stated,

registration formalities for the gratuitous transfer of the A shares of the Company were completed, after which,

the unit of the currency is RMB yuan.

BSCOMC directly held 4,797,357,572 state-owned shares of the Company, representing 44.93% of the total share capital of the Company, and became the controlling shareholder of the Company.

The subsidiaries, joint ventures and associates of the Group may determine their own functional currencies based on the specific economic environments in their place of business. In the preparation

These financial statements were approved by a resolution of the board of directors of the Company on 27

of financial statements, their functional currencies shall be translated into RMB.

August 2019. The consolidation scope of consolidated financial statements was determined on the basis of control. Please refer to note VI for changes of the period.

Business combinations Business combinations are classified into business combinations under common control and business combinations not under common control.

II.

BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements are prepared in accordance with the “Accounting Standards for Business Enterprises–

Business combinations under common control

Basic Standards” issued by the Ministry of Finance and the specific accounting standards, application guidelines,

A business combination under common control is a business combination in which all of the combining

interpretations and other relevant regulations (collectively referred to as “Accounting Standards for Business

entities are ultimately controlled by the same party or parties both before and after the combination,

Enterprises”) subsequently issued and revised.

and that control is not transitory. For a business combination under common control, the party that, on the combination date, obtains control of another entity participating in the combination is the acquiring

The financial statements are presented on a going concern basis.

party, while that other entity participating in the combination is a party being acquired. The combination date is the date on which the acquiring party effectively obtains control of the party being acquired.

Except for certain financial instruments and investment properties, the financial statements have been prepared under the historical cost convention. The prices of disposal groups held for sale shall be the lower of the book value and the net amount of fair value less disposal expenses. If the assets are impaired, corresponding provisions for impairment shall be made according to relevant provisions.

Contents 目錄

Corporate Information

公司資料

Management Discussion and Analysis

管理層討論與分析

Other Information

其他資料

Report on Review of Condensed Consolidated Financial Statements

簡明綜合財務報表審閱報告

Condensed Consolidated Statement of Profit or Loss

簡明綜合損益表

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

簡明綜合損益及其他全面收益表

Condensed Consolidated Statement of Financial Position

簡明綜合財務狀況報表

Condensed Consolidated Statement of Changes in Equity

簡明綜合權益變動表

Condensed Consolidated Statement of Cash Flows

簡明綜合現金流量表

Notes to the Condensed Consolidated Financial Statements

簡明綜合財務報表附註

Management Discussion and Analysis 管理層討論與分析

Industry Review

行業回顧

During the first half of 2019, the Chinese economy continued its steady growth with further progress in general. With key macroeconomic indicators maintaining within a reasonable range and constant advancement in the supply-side structural reform, there are more positive factors for promoting quality development. In respect of macroeconomic policy, the government reinforced the proactive fiscal policy to improve effectiveness and moderately relaxed the prudent monetary policy. The policy for the real estate industry adhered to the keynote of “no speculation on residential properties” and proposed to “implement the long-term adjustment mechanism of different strategies for different cities under the principle of one strategy for one city, with major responsibilities attributable to the city government”.

二零一九上半年，中國經濟運行延續了總體平穩、穩中有進的發展態勢，主要宏觀經濟指標保持在合理區間，供給側結構性改革持續推進，推動高質量發展的積極因素增多。宏觀經濟政策方面，積極的財政政策要加力提效，穩健的貨幣政策要鬆緊適度。房地產政策延續「房住不炒」的主基調，並提出「落實好一城一策、因城施策、城市政府主體責任的長效調控機制」。

During the first half of 2019, the overall Chinese real estate market maintained its steady trend with a slight decline, further realizing the goal of “no speculation on residential properties”. As shown in the statistics published by the National Bureau of Statistics, from January to June 2019, the sales area of commodity housing in China was 757.86 million square meters, representing a decrease of 1.8% year-on-year, while the sales amount of commodity housing in China was RMB7,069.8 billion, representing a year-on-year growth of 5.6%. Investment in real estate development amounted to RMB6,160.9 billion, representing a year-on-year increase of 10.9%, while the newly commenced housing area was 1,055.09 million square meters, up by 10.1%. Against the backdrop of the Sino-US trade disputes, the Chinese real estate industry withstood the challenges arising from the trade disputes in the macroeconomic environment, demonstrating huge flexibility.

二零一九年上半年，中國房地產市場總體呈現穩中微降，「房住不炒」的目標進一步落實。根據國家統計局數據顯示，今年1至6月，中國商品房銷售面積75,786萬平方米，同比下降1.8% 。中國商品房銷售額70,698億元，同比增長 5.6% 。房地產開發投資61,609億元，同比增長10.9% ，房屋新開工面積105,509萬平方米，增長10.1% 。在中美貿易爭端的背景下，中國的房地產行業展現了很大的彈性，承受住了貿易爭端帶來的宏觀環境方面的壓力。

In February 2019, the Central Committee of the Communist Party of China and the State Council published the “Outline Development Plan for the GuangdongHong Kong-Macao Greater Bay Area” with a total of 11 chapters, including Background of the Plan, Overall Requirements, Spatial Layout, Developing an International Innovation and Technology Hub, Expediting Infrastructural Connectivity and Building a Globally Competitive Modern Industrial System, etc., indicating that the development and construction of the Greater Bay Area has become a decision of the central government and a national strategic plan. Going forward, driven by the continuous progress of reform and openingup, the Greater Bay Area, with unlimited potential, will definitely become a strong engine for economic growth in China. The continuous development and improvement of the city cluster in the Greater Bay Area provided strong support for urban development and demand for residential and commercial properties. In particular, Shenzhen, a leading city of the reform and opening up, has witnessed long-term and rapid economic development. The openness and inclusiveness of Shenzhen constantly attracted talents from all over China, which in turn bring dynamic growth to its development. With the influx of incoming talents and the demand for higher living standards of residents, the demand for quality commodity housing in Shenzhen and the Greater Bay Area will increase steadily in the future, and the market will continue to be dominated by rigid demand. The Group has always been focusing on the development of core regions in the Greater Bay Area and would benefit from the urban development and rapid construction of Shenzhen and the Greater Bay Area in the long run.

今年2月，中共中央、國務院印發了《粵港澳大灣區發展規劃綱要》，規劃綱要共11章，包括規劃背景、總體要求、空間佈局、建設國際科技創新中心、加快基礎設施互聯互通、構建具有國際競爭力的現代產業體系等。這標誌著，大灣區的發展建設已成為中央決策、國家戰略規劃。在改革開放的不斷推進下，未來，大灣區潛力無限，必將成為中國的強大經濟引擎地區。大灣區城市群的不斷建設完善，對推動城市發展、住宅和商業物業的需求提供了強力支撐。其中，深圳作為改革開放的前沿城市，經濟經歷了長期、快速的發展。深圳的開放性以及包容性不斷地吸引了全國各地的人才，為深圳的發展引入源源活水。隨著外來人才進入及居民對生活水平需求的日益提高，未來深圳及大灣區高品質商品房需求將穩步增加，市場仍會以剛需為主。集團一直致力於深耕大灣區核心區域，長期受益於深圳的城市發展以及大灣區的飛速建設。

2 LVGEM (CHINA) REAL ESTATE INVESTMENT COMPANY LIMITED Interim Report 2020

Over the last few decades, LVGEM (China) has focused on core cites in the Greater Bay Area and acquired ample land reserve resources in Shenzhen, Hong Kong and Zhuhai, etc.. With more than 20 years of rich experience in urban renewal, the Group has established prominent industrial advantages in this regard. Meanwhile, the Group puts forward the strategic guideline of developing a brand new smart city by integrating technology with real estate development, striving to create positive social, green and economic benefits. The Group also makes use of its strengths in strategic layout and resources to propose its new strategic direction of “Focus on urban renewal in the Greater Bay Area, develop a brand new smart city”, in a bid to develop itself into a benchmark for new smart city developers and operators that are dedicated to the construction of the Guangdong-Hong Kong-Macao Greater Bay Area.

綠景（中國）於大灣區核心城市深耕數十年，擁有位於深圳、香港、珠海等地的多處優質土地儲備資源。二十多年豐富的城市更新經驗使得集團於該領域建立起突出的行業優勢，同時集團將科技地產的概念融會貫通，提出打造智慧新城區的戰略方針，希冀創造良好的社會效益、綠色效益、經濟效益。憑借自身的佈局優勢和資源優勢，提出「聚力灣區大舊改，打造智慧新城區」的戰略新方向，正努力將自己締造成為銳意助力粵港澳大灣區建設的標桿性智慧新城開發運營商。

Results

業績

The Group achieved satisfactory results for the first half of 2019. All of its key financial indicators were in line with the expectations of the management and the overall performance result was satisfactory.

本集團於二零一九年上半年取得理想成績，各項主要財務指標符合管理層預期，整體業績表現令人滿意。

For the six months ended 30 June 2019, the Group achieved total revenue of approximately RMB3,422.1 million (six months ended 30 June 2018: RMB767.3 million), representing an increase of approximately 346.0% year-onyear. Gross profit was RMB2,408.3 million (six months ended 30 June 2018: RMB440.7 million), representing an increase of approximately 446.5% year-onyear. Gross profit margin remained at a relatively high level of 70% (six months ended 30 June 2018: 57%).

截至二零一九年六月三十日止六個月，本集團實現總收益約為人民幣3,422.1百萬元（截至二零一八年六月三十日止六個月：人民幣767.3百萬元），同比上升約346.0% 。毛利為人民幣2,408.3百萬元（截至二零一八年六月三十日止六個月：人民幣440.7百萬元），同比上升約446.5% 。毛利率維持在較高水平的70%（截至二零一八年六月三十日止六個月：57%）。

Profit for the period was RMB991.7 million (six months ended 30 June 2018: RMB187.5 million), representing a growth of approximately 428.8% year-onyear. Profit attributable to owners of the Company was RMB991.9 million (six months ended 30 June 2018: RMB191.9 million), representing a growth of approximately 416.8% year-on-year. Basic earnings per share was RMB20.00 cents (six months ended 30 June 2018: RMB3.94 cents), representing a growth of approximately 407.6% year-on-year.

期內，盈利為人民幣 991.7 百萬元（截至二零一八年六月三十日止六個月：人民幣187.5百萬元），同比增長約 428.8% 。本公司股東應佔盈利為人民幣991.9百萬元（截至二零一八年六月三十日止六個月：人民幣191.9百萬元），同比增長約416.8% 。每股基本盈利為人民幣20.00分（截至二零一八年六月三十日止六個月：人民幣3.94分），同比增長約407.6% 。

The Group’s key financial indicators for the six months ended 30 June 2019 were as follows:

以下是本集團截至二零一九年六月三十日止六個月之主要財務指標： 2020 二零二零年 (RMB million) （人民幣百萬元）

Revenue Gross profit Profit from core business* Profit attributable to owners of the Company Basic earnings per share (RMB cents) Gross profit margin (%) *

收益毛利核心業務應佔盈利* 本公司股東應佔盈利每股基本盈利（人民幣分）毛利率(%)

Profit from core business represents profit attributable to owners of the Company less fair value changes on investment properties and related deferred tax, exchange gain or loss and fair value changes on derivative component of convertible bonds.

2019 二零一九年 (RMB million) （人民幣百萬元）

Change 改變

3,422.1 2,408.3 569.0

767.3 440.7 78.7

346.0(%) 446.5(%) 623.5(%)

991.9 20.00 70

191.9 3.94 57

416.8(%) 407.6(%)

核心業務應佔盈利指本公司股東應佔盈利減投資物業的公允價值變動及相關遞延稅項、匯兌損益及可換股債券衍生工具部分的公允價值變動。

綠景（中國）地產投資有限公司 3 二零二零年中期報告

Condensed Consolidated Statement of Financial Position 簡明綜合財務狀況報表

At 30 June 2020 於二零二零年六月三十日

NOTES 附註

Non-current assets Investment properties Property, plant and equipment Goodwill Interests in joint ventures Amount due from a joint venture Equity instrument at fair value through other comprehensive income Deferred tax assets

Current assets Properties under development for sale Properties held for sale Other inventories Accounts receivable Deposits paid, prepayments and other receivables Financial assets at fair value through profit or loss Debt instrument at fair value through other comprehensive income Tax recoverable Restricted bank deposits Bank balances and cash

Current liabilities Accounts payable Contract liabilities Accruals, deposits received and other payables Lease liabilities Tax liabilities Dividend payables Borrowings Senior notes and bond

非流動資產投資物業物業、廠房及設備商譽於合營公司的權益應收一間合營公司款項按公允價值計入其他全面收益之股本工具

11 遞延稅項資產

流動資產發展中待售物業待售物業其他存貨應收賬款已付按金、預付款項及其他應收款項

23,515,474 442,523 231,602 6,060 522,318

At 31 December 2019 於二零一九年十二月三十一日 RMB’000 人民幣千元 (Audited) （經審核）

22,117,251 458,393 231,602 6,060 522,318

519,765 611,455

490,816 345,030

25,849,197

24,171,470

8,281,418 2,407,001 723 27,507

7,407,278 3,302,382 629 11,576

1,166,721

890,294

按公允價值計入損益之金融資產 –

10,559

5,000 124,447 3,258,183 5,835,116

20,000 8,048 3,915,826 3,674,042

21,106,116

19,240,634

1,173,746 3,170,712

1,383,514 2,268,288

859,928 23,482 2,223,387 232,759 4,370,881 2,593,396

744,814 – 1,468,779 – 3,232,448 2,591,909

14,648,291

11,689,752

6,457,825

7,550,882

32,307,022

31,722,352

按公允價值計入其他全面收益之債務工具可收回稅款受限制銀行存款銀行結餘及現金

流動負債應付賬款合同負債應計費用、已收按金及其他應付款項租賃負債稅項負債應付股息借貸優先票據及債券

Net current assets

流動資產淨值

Total assets less current liabilities

總資產減流動負債

4 LVGEM (CHINA) REAL ESTATE INVESTMENT COMPANY LIMITED Interim Report 2020

9 9

At 30 June 2020 於二零二零年六月三十日 RMB’000 人民幣千元 (Unaudited) （未經審核）

NOTES 附註

Non-current liabilities Borrowings Senior notes and bond Debt component of convertible bonds Derivative component of convertible bonds Lease liabilities Deferred tax liabilities

非流動負債借貸優先票據及債券可換股債券債務部分可換股債券衍生工具部分

13 15(a) 15(b)

租賃負債遞延稅項負債

At 30 June 2020 於二零二零年六月三十日 RMB’000 人民幣千元 (Unaudited) （未經審核）

At 31 December 2019 於二零一九年十二月三十一日 RMB’000 人民幣千元 (Audited) （經審核）

12,781,223 2,820,890 1,426,257

13,309,348 2,809,060 1,381,645

246,559 101,569 2,644,516

198,105 – 2,585,251

20,021,014

20,283,409

12,286,008

11,438,943

41,565 12,137,144

41,141 11,290,307

Net assets

資產淨值

Capital and reserves Share capital Reserves

股本及儲備股本儲備

Equity attributable to owners of the Company Non-controlling interests

本公司股東應佔權益非控股權益

12,178,709 107,299

11,331,448 107,495

Total equity

權益總額

12,286,008

11,438,943

綠景（中國）地產投資有限公司 5 二零二零年中期報告

Notes to the Condensed Consolidated Financial Statements 簡明綜合財務報表附註

For the six months ended 30 June 2020 截至二零二零年六月三十日止六個月

BASIS OF PREPARATION

For the six months ended 30 June 2020 截至二零二零年六月三十日止六個月

編製基準

The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

簡明綜合財務報表乃根據香港會計師公會（「香港會計師公會」）頒佈的香港會計準則（「香港會計準則」）第34號「中期財務報告」及香港聯合交易所有限公司（「聯交所」）證券上市規則附錄十六的適用披露規定編製。

The condensed consolidated financial statements are presented in Renminbi (“RMB”), which is also the functional currency of the Company.

簡明綜合財務報表以人民幣（「人民幣」）呈列，人民幣亦為本公司的功能貨幣。

PRINCIPAL ACCOUNTING POLICIES

PRINCIPAL ACCOUNTING POLICIES (Cont’d) PRINCIPAL ACCOUNTING POLICIES (Cont’d) PRINCIPAL ACCOUNTING POLICIES (Cont’d)

主要會計政策

Except as described below, the application of new and amendments to HKFRSs and an interpretation in the current period has had no material impact on the Group’s financial performance and positions for the current and prior periods and on the disclosures set out in these condensed consolidated financial statements. 2.1

除下文所披露者外，於本期間應用新訂及經修訂香港財務報告準則及一條詮釋對本集團於本期間及以往期間的財務表現及狀況及在該等簡明綜合財務報表所載的披露並無任何重大影響。

2.1

應用香港財務報告準則第16號「租賃」之影響及會計政策變動於本中期期間，本集團首次應用香港財務報告準則第16號。香港財務報告準則第16號取代香港會計準則第17號「租賃」（「香港會計準則第17號」）及相關詮釋。

Impacts and changes in accounting policies of application on HKFRS 16 “Leases”

2.1.1 應用香港財務報告準則第16號導致之會計政策重大變動

The Group has applied HKFRS 16 for the first time in the current interim period. HKFRS 16 superseded HKAS 17 “Leases” (“HKAS 17”), and the related interpretations.

本集團根據香港財務報告準則第16號的過渡條文應用以下會計政策。

2.1.1 Key changes in accounting policies resulting from application of HKFRS 16

倘一份合約為換取代價而給予於一段時間內控制一項已識別資產使用的權利，則該合約屬租賃或包含租賃。

The condensed consolidated financial statements have been prepared on the historical cost basis except for investment properties, equity instrument at fair value through other comprehensive income, financial assets at fair value through profit or loss, debt instrument at fair value through other comprehensive income and derivative component of convertible bonds, which are measured at fair values.

除投資物業、按公允價值計入其他全面收益之股本工具、按公允價值計入損益之金融資產、按公允價值計入其他全面收益之債務工具及可換股債券衍生工具部分按公允價值計量外，簡明綜合財務報表乃按歷史成本基準編製。

Other than changes in accounting policies resulting from application of new and amendments to Hong Kong Financial Reporting Standards (“HKFRSs”), the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2019 are the same as those presented in the Group’s annual financial statements for the year ended 31 December 2018.

除因應用新訂及經修訂香港財務報告準則（「香港財務報告準則」）而導致的會計政策變動外，截至二零一九年六月三十日止六個月之簡明綜合財務報表中所用之會計政策及計算方法與本集團截至二零一八年十二月三十一日止年度的年度財務報表所呈列的會計政策及計算方法相同。

Application of new and amendments to HKFRSs and an interpretation

應用新訂及經修訂香港財務報告準則及一條詮釋

Definition of a lease

In the current interim period, the Group has applied, for the first time, the following new and amendments to HKFRSs and an interpretation issued by the HKICPA which are mandatory effective for the annual period beginning on or after 1 January 2019 for the preparation of the Group’s condensed consolidated financial statements.

於本中期期間，本集團首次應用下列由香港會計師公會頒佈，與編製本集團簡明綜合財務報表有關之新訂及經修訂香港財務報告準則及一條詮釋，其於二零一九年一月一日或之後開始的年度期間強制生效。

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

HKFRS 16

Leases

香港財務報告準則第16號

HK(IFRIC)-Int 23

Uncertainty over Income Tax Treatments

香港（國際財務報告詮釋委所得稅處理之不確定性員會）－詮釋第23號

Amendments to HKFRS 9

Prepayment Features with Negative Compensation

香港財務報告準則第9號（修訂本）

具有負補償之提前還款特點

Amendments to HKAS 19

Plan Amendment, Curtailment or Settlement

香港會計準則第19號（修訂本）

計劃修訂、縮減或結算

Amendments to HKAS 28

Long-term Interests in Associates and Joint Ventures

香港會計準則第28號（修訂本）

於聯營公司及合營公司之長期權益

Amendments to HKFRSs

Annual Improvements to HKFRSs 20152017 Cycle

香港財務報告準則（修訂本）

香港財務報告準則二零一五年至二零一七年週期之年度改進

租賃

主要會計政策（續）

PRINCIPAL ACCOUNTING POLICIES (Cont’d) PRINCIPAL ACCOUNTING POLICIES (Cont’d)

The Group applied the following accounting policies in accordance with the transition provisions of HKFRS 16.

For contracts entered into or modified on or after the date of initial application, the Group assesses whether a contract is or contains a lease based on the definition under HKFRS 16 at inception or modification date. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed. As a lessee

租賃的定義

就於初始應用日期或之後訂立或修訂的合約而言，本集團根據香港財務報告準則第16號的定義於合約開始或修改日期評估該合約是否屬租賃或包含租賃。除非合約的條款及條件其後出現變動，否則將不會重新評估有關合約。作為承租人短期租賃本集團對租賃期為自開始日期起計12個月或以下且不包含購買權的租賃物業租賃應用短期租賃確認豁免。短期租賃的租賃付款於租賃期內按直線法確認為開支。

Short-term leases

6 LVGEM (CHINA) REAL ESTATE INVESTMENT COMPANY LIMITED Interim Report 2020

The Group applies the short-term lease recognition exemption to leases of rental premises that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. Lease payments on short-term leases are recognised as expense on a straightline basis over the lease term.

綠景（中國）地產投資有限公司 7 二零二零年中期報告

CONTENT 2

Corporate Information

Management Discussion and Analysis

Other Information

Report on Review of Interim Condensed Consolidated Financial Statements

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

Notes to the Condensed Consolidated Financial Statements

Dongyue Group Limited Interim Report 2020

Management Discussion and Analysis

Business Review After experiencing a significant increase in the past two years, the operating results of the Group has declined during the period under review. From the overall situation, changes in domestic and overseas economic conditions have posed great impact on the results for the period. During the first half of the year, the growth rate of domestic economy has been slowing down, while the international trade situation was not favourable since trade conflicts between China and the United States has further exerted pressure on the economy. Under the influence of various factors, the market demand for fluorosilicone in the first half of the year was not stable and the product prices fluctuated to a larger extent, resulting in a greater impact on the Group’s results during the first half of this year. Despite all these challenges, the Group was still able to obtain the following achievements: 1.

For production, the Group was operating with stability. Amid the volatile market condition, utilization rate of devices reached a relatively high level and the upstream and the downstream of the supply chain cooperated smoothly which guaranteed the stability of production and laid a foundation for market development for the Group. In respect of sales, the Group seized the market and managed to balance the production and sales of its products. Sales volume of certain major products even slightly increased in a generally weak environment. Although the market was difficult, the Group actively implemented strategies for production and sales to further strengthen the Group’s leading position in the industry. Regarding safety and environmental protection, the Group maintained a serious and cautious attitude. In the first half of the year, the Group joined hands with various capable third-party institutions in order to facilitate multi-dimensional management enhancement and improvement to the Group’s safety, environmental protection, occupational safety and other aspects so as to effectively ensure the efficient operation of the supply chain of the Group. During the period, the Group established a comprehensive professional assessment mechanism which covers aspects including behavioural safety, equipment safety, process safety, electrical instrument safety and environmental protection management, gradually forming a safety and environmental protection management culture for Dongyue of “to review instead of pushing hard; to explain rules with examples”. Meanwhile, the Group has also vigorously put its effort in emission reduction. Water discharges of the Group decreased continuously and some of our subsidiaries achieved the goal of “zero” discharge of waste water.

During the period, some subsidiaries of the Group established branches in Beijing and Shanghai and built R&D centers. This initiative is conducive to attracting professionals and expanding the R&D team. In addition, the “621” Climbing Plan launched by the Group has established joint laboratories with 13 universities in the first half of this year, and has carried out more than 20 cooperation projects. In the current period, it has hired and integrated 116 educated talents including academicians, academic leaders, professors, and doctors. We have reserved talents and technology for the development of the Group.

In terms of internal control, the Group’s improved internal control system functions have been fully utilized in recent years. During the period, the Group’s internal auditing efforts were strengthened, errors were timely corrected. The Group enhanced risk prevention and control, created an auditing supervision model and an auditing service system under the new format, and effectively fulfilled the auditing supervision function to ensure the stable development of the Group.

The Group has further improved itself in terms of automatization and informatization. During the period, upon adjustment by the automatization system, the self-control rate and the stability rate of devices of the Group were generally enhanced. Abnormal vehicle breakdown and impacts on production caused by malfunction of factors such as craft, electricity, meter, equipment were reduced significantly; informatized management for unattended weighbridge and hazardous chemicals vehicles was put into operation, enhancing measurement efficiency and lowering transportation risks.

Besides, many subsidiaries of the Group were recognized as high and new technology enterprise, which are encircled to enjoying preferential tax rate policies, saving a large amount of taxes for the Group.

In terms of technology, the Group has always adhered to independent innovation and vigorously improved its research and development capabilities. During the period, the Group’s research and development expenses increased significantly yearon-year. In terms of the achievement of research and development, the Group completed 12 projects of technological transformation, environmental protection and automation upgrading, and expanded 2 production projects. It applied for 9 patents and obtained 11 patents. The improvement of technology has reduced the unit consumption of various major products in the first half of the year, and the consumption of raw materials and electricity consumption has decreased year-on-year. This has played an important role in reducing costs and increasing efficiency, and has played a buffering role in the decline in performance caused by market factor. At the same time, the research and development of new products also laid a solid foundation for the future market development, among which, the high-density low-pore pressure chlorinated ion-exchange membrane and ETFE resin have passed the scientific and technological achievements appraisal of the Petrochemical Union, which also demonstrated the leading position of the Group in the industry.

Dongyue Group Limited Interim Report 2020

Condensed Consolidated Statement of Financial Position

At 30 June 2020

Notes

Non-current assets Property, plant and equipment Right-of-use assets Prepayments for purchase of property, plant and equipment Prepaid lease payments Intangible assets Equity investments at fair value through other comprehensive income Deferred tax assets Goodwill

At 30 June 2020 RMB’000 (unaudited)

At 31 December 2019 RMB’000 (audited)

4,043,231 694,464 152,918 – 80,936 1,609,798 168,834 123,420

3,860,200 – 89,160 535,564 82,237 1,801,394 213,741 123,420

10 11

985,191 3,058,570 – 1,815,190 16,384 223,820 3,388,451 9,487,606

Current liabilities Trade and other payables Contract liabilities Borrowings Dividend payable Tax liabilities Lease liabilities Deferred income

At 31 December 2019 RMB’000 (audited)

3,608,747

4,292,594

10,482,348

10,998,310

200,397 7,887,171

200,397 8,136,209

Equity attributable to the owners of the Company Non-controlling interests

8,087,568 869,889

8,336,606 1,055,593

Total equity

8,957,457

9,392,199

Non-current liabilities Deferred income Deferred tax liabilities Borrowings Lease liabilities

269,893 130,230 1,078,000 46,768

285,782 111,029 1,209,300 –

1,524,891

1,606,111

10,482,348

10,998,310

Notes

Net current assets 9

6,873,601 Current assets Inventories Properties for sale Prepaid lease payments Trade and other receivables Tax receivables Pledged bank deposits Bank balances and cash

At 30 June 2020 RMB’000 (unaudited)

12 13

6,705,716

1,106,721 3,033,638 15,766 1,967,730 – 363,133 3,331,147

Total assets less current liabilities Capital and reserves Share capital Reserves

9,818,135

2,405,334 1,870,039 923,700 650,400 – 3,995 25,391

2,701,711 1,632,556 873,150 – 296,488 – 21,636

5,878,859

5,525,541

The condensed consolidated financial statements on pages 24 to 48 were approved and authorised for issue by the Board of Directors on 15 August 2019 and are signed on its behalf by: Zhang Jianhong

Zhang Zhefeng

Director

The notes on pages 24 to 48 form part of these condensed consolidated financial statements.

Dongyue Group Limited Interim Report 2020

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 June 2020

1. Basis of preparation The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

2. Principal accounting policies (Continued) a.

For the six months ended 30 June 2020

2. Principal accounting policies (Continued) a.

New definition of a lease The change in the definition of a lease mainly relates to the concept of control. IFRS 16 defines a lease on the basis of whether a customer controls the use of an identified asset for a period of time, which may be determined by a defined amount of use. Control is conveyed where the customer has both the right to direct the use of the identified asset and to obtain substantially all the economic benefits from that use.

New definition of a lease (Continued) New definition of a lease (Continued) New definition of a lease (Continued) New definition of a lease (Continued) The condensed consolidated financial statements have been prepared on the historical cost basis. The accounting policies and the methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2019 are the same as those followed in the preparation of the Group’s annual financial statements for the year ended 31 December 2018.

The Group applies the new definition of a lease in IFRS 16 only to contracts that were entered into or changed on or after 1 January 2019. For contracts entered into before 1 January 2019, the Group has used the transitional practical expedient to grandfather the previous assessment of which existing arrangements are or contain leases. Accordingly, contracts that were previously assessed as leases under IAS 17 continue to be accounted for as leases under IFRS 16 and contracts previously assessed as non-lease service arrangements continue to be accounted for as executory contracts.

b. Lessee accounting and transitional impact IFRS 16 eliminates the requirement for a lessee to classify leases as either operating leases or finance leases, as was previously required by IAS 17. Instead, the Group is required to capitalise all leases when it is the lessee, including leases

Except for IFRS 16, Leases, none of the developments have had a material effect on how the Group’s results and financial

previously classified as operating leases under IAS 17, other than those short-term leases and leases of low-value assets

position for the current or prior periods have been prepared or presented. The Group has not applied any new standard

which are exempt. As far as the Group is concerned, these newly capitalised leases are primarily in relation to property,

or interpretation that is not yet effective for the current accounting period.

plant and equipment and land use right. For an explanation of how the Group applies lessee accounting.

IFRS 16 replaces IAS 17, Leases, and the related interpretations, IFRIC 4, Determining whether an arrangement contains a

At the date of transition to IFRS 16 (i.e. 1 January 2019), the Group determined the length of the remaining lease terms and

lease, SIC 15, Operating leases—incentives, and SIC 27, Evaluating the substance of transactions involving the legal form

measured the lease liabilities for the leases previously classified as operating leases at the present value of the remaining

of a lease. It introduces a single accounting model for lessees, which requires a lessee to recognise a right-of-use asset

lease payments, discounted using the relevant incremental borrowing rates at 1 January 2019. The weighted average of

and a lease liability for all leases, except for leases that have a lease term of 12 months or less (“short-term leases”) and

the incremental borrowing rates used for determination of the present value of the remaining lease payments was 4.51%.

leases of low-value assets. The lessor accounting requirements are brought forward from IAS 17 substantially unchanged. To ease the transition to IFRS 16, the Group applied the following recognition exemption and practical expedients at IFRS 16 also introduces additional qualitative and quantitative disclosure requirements which aim to enable users of

the date of initial application of IFRS 16:

the financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of an entity.

(i)

the Group elected not to apply the requirements of IFRS 16 in respect of the recognition of lease liabilities and right-of-use assets to leases for which the remaining lease term ends within 12 months from the date of initial application of IFRS 16, i.e. where the lease term ends on or before 31 December 2019;

Further details of the nature and effect of the changes to previous accounting policies and the transition options applied are set out below: (ii)

when measuring the lease liabilities at the date of initial application of IFRS 16, the Group applied a single discount rate to a portfolio of leases with reasonably similar characteristics; and

(iii) when measuring the right-of-use assets at the date of initial application of IFRS 16, the Group relied on the previous assessment for onerous contract provisions as at 31 December 2018 as an alternative to performing an impairment review.