retain cash needed to meet its upcoming obligations and to fund expected expenses during a potential bankruptcy proceeding. SSIF has provided the Parent Company with a committed credit line and issued (and may issue) one or more promissory notes to the Parent Company (the "Parent Company Funding Notes") that together are intended to allow the Parent Company to continue to meet its obligations throughout the period prior to the occurrence of a "Recapitalization Event" (as defined below). The support agreement does not contemplate that SSIF is obligated to maintain any specific level of resources and SSIF may not have sufficient resources to implement the SPOE Strategy.

In the event a Recapitalization Event occurs, the obligations outstanding under the Parent Company Funding Notes would automatically convert into or be exchanged for capital contributed to SSIF. The obligations of the Parent Company and SSIF under the support agreement are secured through a security agreement that grants a lien on the assets that the Parent Company and SSIF would use to fulfill their obligations under the support agreement to the Beneficiary Entities. SSIF is a distinct legal entity separate from the Parent Company and the Parent Company’s other affiliates.

In accordance with its policies, State Street is required to monitor, on an ongoing basis, the capital and liquidity needs of State Street Bank and the other Beneficiary Entities. To support this process, State Street has established a trigger framework that identifies key actions that would need to be taken or decisions that would need to be made if certain events tied to State Street’s financial condition occur. In the event that State Street experiences material financial distress, the support agreement requires State Street to model and calculate certain capital and liquidity triggers on a regular basis to determine whether or not the Parent Company should commence preparations for a bankruptcy filing and whether or not a Recapitalization Event has occurred.

Upon the occurrence of a Recapitalization Event: (1) SSIF would not be authorized to provide any further liquidity to the Parent Company; (2) the Parent Company would be required to contribute to SSIF any remaining assets it is required to contribute to SSIF under the support agreement (which specifically exclude amounts designated to fund expected expenses during a potential bankruptcy proceeding); (3) SSIF would be required to provide capital and liquidity support to the Beneficiary Entities to support such entities’ continued operation to the extent of its available resources and consistent with the support agreement; and (4) the Parent Company would be expected to commence Chapter 11 proceedings under the U.S. Bankruptcy Code. No person or entity, other than a party to the support agreement, should rely, including in evaluating any State Street entity from a creditor's perspective or determining whether to enter into a contractual relationship with any State Street entity, on any State Street affiliate being or remaining a Beneficiary Entity or receiving capital or liquidity support pursuant to the support agreement.

A “Recapitalization Event” is defined under the support agreement as the earlier occurrence of one or more capital and liquidity thresholds being breached or the authorization by the Parent Company's Board of Directors for the Parent Company to commence bankruptcy proceedings. These thresholds are set at levels intended to provide for the availability of sufficient capital and liquidity to enable an orderly resolution without extraordinary government support. The SPOE Strategy and the obligations under the support agreement may result in the recapitalization of State Street Bank and the commencement of bankruptcy proceedings by the Parent Company at an earlier stage of financial stress than might otherwise occur without such mechanisms in place. An expected effect of the SPOE Strategy and applicable TLAC regulatory requirements is that State Street’s losses will be imposed on the Parent Company shareholders and the holders of long-term debt and other forms of TLAC securities currently outstanding or issued in the future by the Parent Company, as well as on any other Parent Company creditors, before any of its losses are imposed on the holders of the debt securities of the Parent Company's operating subsidiaries or any of their depositors or creditors, or before U.S. taxpayers are put at risk.

There can be no assurance that credit rating agencies, in response to our resolution plan or the support agreement, will not downgrade, place on negative watch or change their outlook on our debt credit ratings, generally or on specific debt securities. Any such downgrade, placement on negative watch or change in outlook could adversely affect our cost of borrowing, limit our access to the capital markets or result in restrictive covenants in future debt agreements and could also adversely impact the trading prices, or the liquidity, of our outstanding debt securities.

State Street Bank is also required to submit periodically to the FDIC a plan for resolution in the event of its failure, referred to as an IDI plan. Under the IDI plan rule, submission of the IDI plan is scheduled for July 1, 2018.

# Orderly Liquidation Authority

Under the Dodd-Frank Act, certain financial companies, including bank holding companies such as State Street, and certain covered subsidiaries, can be subjected to the orderly liquidation authority. The U.S. Treasury Secretary, in consultation with the U.S. President, must first make certain extraordinary


\[ c _ { i j k l } = \frac { 1 } { 2 v } \sum _ { p , p ^ { \prime } } A _ { i p , k p ^ { \prime } } ^ { ( 2 ) j l } . \eqno ( 1 2 ) \]

The technical details of the calculations are as follows. The calculations were done for cubic STO exploiting the Quantum ESPRESSO (QE) [14] ab initio package within the GGA PBE exchange-correlation functional with ultrasoft pseudopotentials [15]. We have used an automatically generated uniform 16x16x16 grid of k-points, the kinetic energy cutoff for wavefunctions was 80 Ry. The calculations of phonon spectrum are done using Density Functional Perturbation Theory (DFPT) [16] as implemented in the PHonon code. The energy threshold for self-consistency was chosen to be equal to \( 1 0 ^ { - 2 0 } \) Ry with the help of convergence tests for gamma point phonons.

To find the independent components of tensors \( \chi _ { i j } = \chi \delta _ { i j } \) , \( M _ { i j } = M \delta _ { i j } \) , \( f _ { i j k l } \), and \( c _ { i j k l } \) (\( \chi \), M, \( f _ { 1 1 } \), \( f _ { 1 2 } \), \( f _ { 4 4 } \), \( c _ { 1 1 } \), \( c _ { 1 2 } \), \( c _ { 4 4 } \)), we evaluated the wave-vector dependence of the dynamical matrix \( A _ { i p , i ^ { \prime } p ^ { \prime } } ( \vec { q } ) \) for the [100] and [110] directions of the reciprocal space. This provided us with the components of the \( A _ { i p , i ^ { \prime } p ^ { \prime } } ^ { ( 0 ) } \) and \( A _ { i p , i ^ { \prime } p ^ { \prime } } ^ { ( 2 ) j l } \) matrices needed to finalize the calculations using Eqs. (8)-(12).

The results of the calculations are presented in Tables I and II. A remarkable observation, which forms the main message of this Letter, is a very strong renormalization of the flex-ocoupling tensor by dynamic flexoelectricity: it is seen that the corresponding components of the tensors \( f _ { i j k l } \) and \( f _ { i j k l } ^ { \mathrm { t o t } } \) can drastically differ. This implies that the traditional neglect of dynamic flexoelectricity in the dynamic electromechanical simulations incorporating flex-oelectricity is inadmissable. Notably, the dynamic flexoelectricity can play an essential role in the frequency dependence of the electromechanical response close to the frequencies of mechanical resonances of the sample. The point is that such response is expected to be sensitive to the dynamic flexoelectricity only above the relevant resonance frequency [6].

The results of our calculations of the dynamical matrix provide us with an alternative way of evaluating some components of the material tensors of STO directly from the phonon dispersion curves. This will provide a cross-check of the above results. In addition, the method presented below will offer a way of evaluating these tensors from the experimental phonon spectra of the material. We suggest fitting the long-wavelength part of the low-energy spectrum of the crystal to that obtained from the continuum theory, incorporating dynamic flexoelectricity.

The suggested approach uses the spectra of transverse acoustic (TA) and soft-mode trans-


2
VM (×10−8 s2 )m	6 \( \pm \) 0.5

f11 (V)	1.11 \( ^ + \) 0.05

f12 (V)	−1.30 ± 0.05

f44 (V)	−0.28 ± 0.05

\( f _ { 1 1 } ^ { \mathrm { t o t } } \)(V)	−2.1 ± 0.1

\( f _ { 1 2 } ^ { \mathrm { t o t } } \)(V)	−2.5 ± 0.1

tot \( I A \)
(V)
4	−1.5 ± 0.1

χ/0	2400

TABLE I. Calculated static (f), dynamic (M), and total (\( f ^ { \mathrm { t o t } } \)) flexocoupling coefficients for cubic \( \mathrm { S r T i O 3 } \) (\( a \) = 3.886 ˚A) under a pressure of 78 kBar using dynamical matrix. \( \chi / \epsilon _ { 0 } \) is the relative dielectric susceptibility.

(11N
10 2 )m	(a) Dyn. mat.	(b) Ph. dis.p	(c) Ex.p

c11	2.77 ± 0.05	3.1 \( \pm \)  0.1	3.16

c12	1.06 ± 0.05	0.9 \( \pm \) 0.1	1.03

c44	0.92 \( + \) 0.05	1.0 \( \pm \)  0.1	1.22

|M|c44
(V)ρ	1.2 \( \pm \) 0.1	1.1 \( \pm \) 0.4

|ftotV44 | ()	1.5 \( + \) 0.1	1.5 \( \pm \)  0.2	1.2-2.2

|ftottt− V11 fo12 | ()	0.2 \( \pm \) 0.1	\( < \) 0.5	1.2-1.4

TABLE II. Material parameters for cubic \( \mathrm { { S r T i O } _ { 3 } } \) (\( a \) = 3.886 ˚A) under a pressure of 78 kBar obtained using the dynamical matrix and from analysis of phonon dispersion curves. c is the stiffness tensor. \( f ^ { \mathrm { t o t } } \) is defined in Eq. (20). \( \rho \) is the density \( ( \rho = 5 1 7 4 \frac { \mathrm { k g } } { \mathrm { m } ^ { 3 } } ) \)) calculated by the mass of atoms in the unit cell divided by the cell volume. (a) Calculated from dynamical matrix. (b) Obtained from the simulated phonon dispersion curves. (c) Obtained from the experimental phonon dispersion curves [17–19].

verse optic (TO) branches for the high symmetry [100], [110], and [111] directions of wavevec-tor. In this case, the phonons are not accompanied by any wave of the electric field and the continuum theory equations, Eqs. (1) and (2) with \( E _ { i } = 0 \), yield the following dispersion equation for the frequency \( \omega \) of the transverse modes [6]:


The excess over the par value for the 291,833,279 ordinary shares issued was credited to the share premium account with aggregate amount of approximately RMB4,464,387,000.

(c) In February 2016, 33,010,341 ordinary shares of the Company were allotted and issued to an entity controlled by Tencent and a number of independent third parties at a price of US\$3.0294 per share for an aggregated consideration of approximately US\$100,000,000 (equivalent to approximately RMB652,445,000). These shares rank pari passu in all respects with the shares in issue.

The excess over the par value for the 33,010,341 ordinary shares issued was credited to the share premium account with aggregate amounts of approximately RMB652,423,000.

(d) In January 2017, 30,201,818 ordinary shares of the Company were allotted and issued to three existing shareholders of the Company at a price of US\$3.31 per share for an aggregated consideration of approximately US\$100,000,000 (equivalent to approximately RMB 687,765,000). These shares rank pari passu in all respects with the shares in issue. The excess over the par value for the 30,201,818 ordinary shares issued was credited to the share premium account with aggregate amount of approximately RMB687,744,000.

# 36 Other reserves

# Group

	Contribution
from holding
company	Currency
translation
differences	Put option
on non-
controlling
interests	Share-based
compensation
reserve	Statutory
surlpus
reserve fund	 Total

RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000

As at January 1, 2014 .....	1,613	—	—	—	—	1,613

Deemed contribution .......	18,314	—	—	—	—	18,314

Currency translation
differences ..................	 —	(595)	 —	 —	 —	(595)

Share-based compensation
expenses (Note 37) ......	3,319	 —	 —	3,259	 —	6,578

Profit appropriations to
statutory reserves
(Note a) ......................	—	 —	 —	 —	517	517

Others .............................	768	—	 —	 —	 —	768

Initial recognition of put
option liability ............	 —	 —	(65,396)	 —	 —	(65,396)

As at December 31, 2014	24,014	(595)	(65,396)	3,259	517	(38,201)

As at January 1, 2015 .....	24,014	(595)	(65,396)	3,259	517	(38,201)

Currency translation
differences ..................	 —	(9,571)	 —	 —	 —	(9,571)

Share-based compensation
expenses (Note 37) ......	1,081	 —	 —	130,705	 —	131,786

Profit appropriations to
statutory reserves
(Note a) ......................	—	—	—	—	8,863	8,863

Others .............................	1,686	—	—	—	—	1,686

As at December 31, 2015	26,781	(10,166)	(65,396)	133,964	9,380	94,563


	Contribution
from holding
company	Currency
translation
differences	Put option
on non-
controling
interests	Share-based
compensation
reserve	Statutory
surlpus
reserve
fund	Cailpta
reserve	 Total

RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000

As at January 1, 2016	26,781	(10,166)	(65,396)	133,964	9,380	 —	94,563

Currency translation
differences ..............	 —	27,229	 —	 —	 —	 —	27,229

Share-based
compensation
expenses (Note 37) .	585	 —	 —	77,438	 —	 —	78,023

Acquisition of
non-controlling
interests (Note b) ....	 —	 —	 —	 —	 —	(7,281)	(7,281)

Profit appropriations
to statutory reserves
(Note a) ..................	 —	 —	 —	 —	14,686	 —	14,686

Others ........................	3,658	 —	 —	 —	 —	 —	3,658

As at December 31,
2016 .......................	31,024	17,063	(65,396)	211,402	24,066	(7,281)	210,878

(Unaudited)

As at January 1, 2016	26,781	(10,166)	(65,396)	133,964	9,380	 —	94,563

Currency translation
differences ..............	 —	5,545	 —	 —	 —	 —	5,545

Share-based
compensation
expenses (Note 37) .	151	 —	 —	39,008	 —	 —	39,159

Acquisition of
non-controlling
interests (Note b) ....	 —	 —	 —	 —	 —	(7,281)	(7,281)

Others ........................	730	 —	 —	 —	 —	 —	730

As at June 30, 2016 ...	27,662	(4,621)	(65,396)	172,972	9,380	(7,281)	132,716

As at January 1, 2017	31,024	17,063	(65,396)	211,402	24,066	(7,281)	210,878

Currency translation
differences ..............	 —	(21,835)	 —	 —	 —	 —	(21,835)

Share-based
compensation
expenses (Note 37) .	305	 —	 —	52,295	 —	 —	52,600

Others ........................	2,295	 —	 —	 —	 —	 —	2,295

As at June 30, 2017 ...	33,624	(4,772)	(65,396)	263,697	24,066	(7,281)	243,938


No.	Project Names	City	Interest
Attributable to
the Group	Primary Intended
Use	Site Area
(sq.m.)	Actual/
Estimated
Completion
Date	Land
Bank(1)
(sq.m.)	Address

34.	Zhumadian Royal Lantai
Mansion Phase V	Zhumadian	70%	Residential/
Commercial/
Carpark/Ancillary/
Others	156,270	2023/8/1	388,318	The southeast side of
the intersection of
Lizhuang Road and
Chunliu Road, and the
northwest side of the
intersection of Zhangtai
Road and Jianshe
Avenue, Zhumadian
City, Henan Province

35.	Jingzhou Leading Lantai
House	Jingzhou	100%	Residential/
Commercial/
Carpark/Ancillary/
Others	54,070	2021/12/31	208,275	Northwest of the
intersection of Chutian
Road and Dongqiao
Road, Jingbei New
District, Jingzhou
District, Jingzhou City,
Hubei Province

36.	Jingzhou Leading
Fengming Lantai
Mansion	Jingzhou	100%	Residential/
Commercial/
Carpark/Ancillary/
Others	48,399	2022/8/31	188,088	No.66, Fengming Avenue,
Jingzhou District,
Jingzhou City, Hubei
Province

37.	Leshan Amazon	Leshan	100%	Residential/
Commercial/
Carpark/Ancillary	91,900	2014/10/16	2,571	No. 418 and No. 424,
North Section of
Longyou Road,
Shizhong District,
Leshan City, Sichuan
Province

38.	Leshan Haina Mansion	Leshan	51%	Residential/
Commercial/
Carpark/Ancillary/
Others	36,200	2016/1/5	6,904	No.1589 Muyuan Road,
Muchuan County,
Leshan City, Sichuan
Province

39.	Leshan Lantai House	Leshan	60%	Residential/
Commercial/
Carpark/Ancillary/
Others	88,108	2021/12/31	156,422	East of the intersection
of Sansu Road and
Ruixiang Road,
Qingjiang New District,
Shizhong District,
Leshan City, Sichuan
Province

40.	Leshan Tianyu	Leshan	100%	Residential/
Commercial/
Carpark/Ancillary	29,796	2020/3/1	14,033	Intersection of Hanlin
Road and Fenghuang
Road, Tongjiang
District, Leshan City,
Sichuan Province


No.	Project Names	City	Interest
Attributable to
the Group	Primary Intended
Use	Site Area
(sq.m.)	Actual/
Estimated
Completion
Date	Land
Bank(1)
(sq.m.)	Address

41.	Leshan Lanshan	Leshan	70%	Residential/
Commercial/
Carpark/Ancillary/
Others	89,630	2021/10/1	155,006	No. 881, Section 1,
Ruixiang Road, Leshan
City, Sichuan Province

42.	Leshan International
Mansion	Leshan	100%	Residential/
Commercial/
Carpark/Ancillary/
Others	127,204	2019/5/17	3,568	Taoyuan New Village,
Mouzi Town, Shizhong
District, Leshan City,
Sichuan Province

43.	Zunyi Lantai House	Zunyi	55%	Residential/
Commercial/
Carpark/Ancillary/
Others	39,759	2022/11/30	130,977	Intersection of Shanghai
Road and Ningbo
Road, Huichuan
District, Zunyi City,
Guizhou Province

44.	Meishan Triumph
International Mansion	Meishan	100%	Residential/
Commercial/
Carpark/Ancillary/
Others	256,303	2020/11/27	57,506	Southwest corner of the
intersection of Hubin
Road and Meizhou
Avenue, Meishan City,
Sichuan Province

45.	Meishan Triumph Square	Meishan	79%	Residential/
Commercial/
Carpark/Ancillary	73,976	2015/5/19	17,092	Northeast of the
intersection of Suyuan
Road and Dongpo
Avenue, Dongpo
District, Meishan City,
Sichuan Province

46.	Meishan Huayu Phase II	Meishan	60%	Residential/
Commercial/
Carpark/Ancillary/
Others	9,102	2020/6/3	5,568	Southeast corner of the
intersection of Suyuan
Road and Chongguang
Street, Meishan City,
Sichuan Province

47.	Meishan Triumph
International Mansion
Phase II	Meishan	57%	Residential/
Commercial/
Carpark/Ancillary/
Others	39,838	2019/7/30	8,744	Northeast of the
intersection of
Jiangxiang Road and
Qingyihang, Dongpo
District, Meishan City,
Sichuan Province

48.	Meishan Lantai House	Meishan	55%	Residential/
Commercial/
Carpark/Ancillary/
Others	109,814	2022/12/10	369,014	Northwest corner of the
intersection of Fucheng
Road and Shuangfeng
Street, Dongpo District,
Meishan City, Sichuan
Province


	Notes	2020	2019

HK$’000	HK$’000

ASSETS AND LIABILITIES

Non-current assets

Property, plant and equipment	13	110,439	4,229

Intangible asset	14	87	1,027

Deposit paid for acquisition for intangible asset	16	1,000	–

		111,526	5,256

Current assets

Inventories	15	7,360	7,383

Trade and other receivables	16	3,641	4,753

Tax refundable		869	899

Time deposits	17	11,007	16,000

Cash and bank balances		5,798	10,172

		28,675	39,207

Current liabilities

Trade and other payables	18	1,052	1,486

Bank borrowings	19	12,250	–

Lease liabilities	21	511	–

		13,813	1,486

Net current assets		14,862	37,721

Total assets less current liabilities		126,388	42,977


	Notes	2020	2019

HK$’000	HK$’000

Non-current liabilities

Provision for long service payment		608	476

Provision for reinstatement cost		854	1,269

Bank borrowings	19	42,750	–

Promissory notes	20	44,724	–

Lease liabilities	21	940	–

		89,876	1,745

Net assets		36,512	41,232

Equity

Share capital	22	41,879	41,879

Reserves		(5,367)	(647)

Total equity		36,512	41,232

Chan Kun Yuen	Chan Shu Yuen

Director	Director

The notes on pages 74 to 130 are an integral part of these consolidated financial statements.


# 35 Subsequent event

On 15 March 2019, a subsidiary of the Group entered into an agreement to fully dispose of its equity interest, representing 50% equity interest, in Shanghai Kaitai, a joint venture of the Group, to the joint venture partner of Shanghai Kaitai at a consideration of RMB1,005 million. Shanghai Kaitai has completed the development of its real estate project and distributed the profit to its respective shareholders before the disposal. The consideration was determined in accordance with the appraised net assets value of Shanghai Kaitai as of 31 January 2019. The transaction is expected to be completed by the end of March 2019.

# 36 Balance sheet of the Company

	As at 31 December

2018	2017

RMB’000	RMB’000

ASSETS

Non-current assets

Interests in a subsidiary	2,016,724	1,993,141

Financial assets at fair value through profit or loss	649,860	—

	2,666,584	1,993,141

Current assets

Prepayments and other receivables	208	1,296

Amounts due from subsidiaries	7,679,814	6,654,600

Amounts due from a related party	637,433	—

Cash and bank balances	30,610	49,585

Total current assets	8,348,065	6,705,481

Total assets	11,014,649	8,698,622

EQUITY

Equity attributable to owners of the Company

Share capital	14	13

Share premium	4,423,556	3,506,038

Other reserves	(1,363,382)	(169,894)

Total equity	3,060,188	3,336,157


# 36 Balance sheet of the Company (continued)

	As at 31 December

2018	2017

RMB’000	RMB’000

LIABILITIES

Non-current liabilities

Borrowings	5,286,770	197,013

Current liabilities

Borrowings	2,393,994	5,114,757

Other payables	257,259	50,695

Amounts due to related parties	16,438	—

Total current liabilities	2,667,691	5,165,452

Total liabilities	7,954,461	5,362,465

Total equity and liabilities	11,014,649	8,698,622

Other reserve of the Company included share-based compensation reserve and accumulated losses. During the year, the change in share-based compensation reserve represents mainly the value of employee services under the share option scheme amounting to RMB23,583,000 (2017: RMB53,868,000), the change in accumulated losses represents mainly the loss of the Company amounting to RMB1,184,691,000 (2017: RMB223,477,000).

The balance sheet of the Company was approved by the Board of Directors on 21 March 2019 and was signed on its behalf:

Ou Zonghong	 Zeng Feiyan


# DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS

As at 31 December 2019, the interests and short positions of the directors and the chief executive of the Company in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register kept by the Company pursuant to Section 352 of the SFO or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) were as follow:

# (1) Long positions in the ordinary share (each a “Share”) of HK\$0.10 each in the Company

董事及最高行政人員之權益及淡倉

於二零一九年十二月三十一日，本公司董事及最高行政人員於本公司或其任何相聯法團（定義見證券及期貨條例第XV部）之股份、相關股份或債券中擁有根據證券及期貨條例第352條本公司存置之登記冊所記錄，或已根據香港聯合交易所有限公司（「聯交所」）證劵上市規則（「上市規則」）附錄十所載上市發行人董事進行證券交易的標準守則另行知會本公司及聯交所之權益及淡倉如下：

(1) 於本公司每股面值0.10港元普通股（各為一股「股份」）之好倉

Name of Director
董事姓名	Number of Shares
股份數目	Capacity/Nature of interest
身份╱權益性質	Approximate
percentage of
shareholding
股權概約百分比

			(Note 1)
（附註1）

Yeung Yung
仰融	2,673,071,189
(Note 2)
（附註2）	Interest of controlled corporation
受控法團權益

68,140,000	Beneficial owner
實益擁有人

2,741,211,189
(Note 3)
（附註3）		13.47%

Huang Chunhua
黃春華	35,000,000	Beneficial owner
實益擁有人	0.17%

Wang Chuantao
王川濤	30,000,000	Beneficial owner
實益擁有人	0.15%

Liu Stephen Quan
劉泉	281,760,000
(Note 4)
（附註4）	Founder of trust
Interest of children under 18
信託創始人
未滿18歲子女之權益

10,000,000	Beneficial owner
實益擁有人

291,760,000		1.43%


Name of Director
董事姓名	Number of Shares
股份數目	Capacity/Nature of interest
身份╱權益性質	Approximate
percentage of
shareholding
股權概約百分比

			(Note 1)
（附註1）

Zhu Shengliang
朱勝良	22,043,883	Beneficial owner
實益擁有人	0.11%

Li Zhengshan
李正山	26,270,000	Beneficial owner
實益擁有人	0.13%

Ting Kwok Kit, Johnny
丁國傑	3,000,000	Beneficial owner
實益擁有人	0.015%

Chen Xiao
陳曉	25,000,000	Beneficial owner
實益擁有人	0.12%

Cheng Tat Wa
鄭達華	1,300,000	Beneficial owner
實益擁有人	0.006%

Chan Sin Hang
陳善衡	500,000	Beneficial owner
實益擁有人	0.002%

Notes:

(1) The percentage of shareholding is calculated on the basis of 20,352,872,747 Shares in issue as at 31 December 2019 and did not take into account any Shares which may fall to be allotted and issued upon exercise of any subscription rights attaching to any share options granted by the Company.

(2) These Shares are held by Sun East LLC. Sun East LLC is a limited liability company incorporated in California, the US, which is owned as to (i) 35% by Dr Yeung Yung (shared commonly with his spouse under the laws of California, the US) and (ii) 65% by Mr Ma Manwai (alias Ma Manwai, Philip) and Mr Jimmy Wang (alias Wang Jian) as co-trustees for certain trusts established for the benefit of the children of Dr Yeung Yung on 30 December 2002. Dr Yeung Yung (as well as his spouse) was deemed to be interested in the Shares held by Sun East LLC by virtue of Part XV of the SFO.

(3) The spouse of Dr Yeung Yung is deemed to be interested in the Shares beneficially held by Dr Yeung Yung by virtue of Part XV of the SFO.

(4) These Shares were indirectly owned by certain trusts of which Mr Liu Stephen Quan were the founder. The children of Mr Liu were eligible beneficiaries of the trusts. Mr Liu was deemed to be interested in these Shares by virtue of Part XV of the SFO.

附註：

(1) 持股百分比按於二零一九年十二月三十一日已發行20,352,872,747股股份計算，並無計及可能因本公司已授出之任何購股權所附任何認購權獲行使而須配發及發行之任何股份。

(2) 該等股份由Sun East LLC持有。Sun East LLC乃於美國加州註冊成立之有限公司，由(i)仰融博士擁有35%權益（根據美國加州法例與其配偶共同持有）及(ii)馬文偉先生及王健先生作為若干信託之共同信託人擁有65%權益，而該等信託於二零零二年十二月三十日設立，以仰融博士之子女為受益人。根據證券及期貨條例第XV部，仰融博士（及其配偶）被視為於Sun East LLC所持股份中擁有權益。

(3) 根據證券及期貨條例第XV部，仰融博士之配偶被視為於仰融博士實益持有之股份中擁有權益。

(4) 該等股份由劉泉先生為創始人之若干信託間接擁有。劉先生之子女為有關信託之合資格受益人。根據證券及期貨條例第XV部，劉先生被視為於該等股份中擁有權益。


Product name
(reference drugs/targets)	Indications	Progress as at the Latest
Practicable Date

Smooth progress of domestic clinical projects

HLX10+ HLX07	head and neck
squamous cell
carcinoma (HNSCC)	In July 2020, the first patient dosing
was comlpeted in a hipase 2 clincal trial
in mainland China

HLX10+ HLX04	Solid tumor	In September 2020, the enrollment of
subjects was comlpeted in a hpase 1
clinical trial

HLX10+ HLX04	Hepatocellular
Carcinoma (HCC)	In January 2021, the enrollment of
subjects was comlpeted in a hpase 2
clinical trial

HLX10+HLX04	Metastatic colorectal
cancer (mCRC)	In March 2021, the first patient dosing
was comlpeted in a Phase 2/3 clinical
trial in mainland China

HLX55 (innovative anti-c-Met
 monoclonal antibody)	Solid tumor	In March 2020, the first patient dosing
was comlpeted in a hilpase 1 clinca trial
in Taiwan, China

HLX07 (modified innovative
 anti-EGFR monoclonal
 antibody)	Solid tumor	In March 2020, the relevant clinical
research report was comlpeted for the
h1ilpase  clinical tra

HLX11 (pertuzumab)	Breast cancer (BC)	In September 2020, the first patient
dosing was comlpeted in a hpase 1
clinical trial in mainland China

HLX14 (desumumab)	Osteoporosis (OP)	In November 2020, the first patient
dosinlg was competed in a hpase 1
clinical trial in mainland China


Product name
(reference drugs/targets)	Indications	Progress as at the Latest
Practicable Date

Efficient advancement on IND aliippcaton for pre-clinical development projects

HLX13 (iilipmumab)	Melanoma, Renal Cell
Carcinoma (RCC),
Metastatic Colorectal
Cancer (mCRC)	In January 2020, the investigational new
drug alipcatipon (IND) was accepted by
the NMPA
In April 2020, the investigational new
drug alippcation (IND) was approved by
the NMPA

HLX56 (anti-DR4 monoclonal
 antibody)	Solid tumor	In May 2020, the investigational new
drulg aippcation ( IND) was approved
by the Ministry of Health and Welfare
of Taiwan.

HLX70 (anti-S1 fully human
 monoclonal
 neutralizing antibody)	COVID-19	In October 2020, the investigational
new druiNDg alppcation (I) was
approved by the U.S. Food and Drug
Administration (FDA)

HLX71 (ACE2-Fc receptor
 fusion protein)	COVID-19	In November 2020, the investigational
new druiNg alppcation (ID) was
approved by the U.S. Food and Drug
Administration (FDA)

HLX15 (daratumumab)	Multillpe myeoma
(MM)	In November 2020, the investigational
new drulg aippcation (IND) was
accepted by the NMPA
In January 2021, the investigational new
drug alippcation (IND) was approved by
the NMPA

HLX26 (Recombinant anti-
 LAG-3 human
 monoclonal antibody
 injection)	Solid tumor, lymhpoma	In January 2021, the investigational new
drug alippcation (IND) was accepted by
the NMPA


Aspect	KPI	Content	Chapter Reference or Notes

	B5.4	Description of practices used to
promote environmentally preferable
p r o d u c t s a n d s e r v i c e s w h e n
selecting suppliers, and how they are
implemented and monitored.	6.2 Responsible Procurement

B6 Product
Responsibility	General Disclosure	Information on:
(a)     the policies; and
(b)   compliance with relevant laws
and regulations that have
a significant impact on the
issuer
r e l a t i n g t o h e a l t h a n d s a f e t y,
advertising, labelling and privacy
matters relating to products and
services provided and methods of
redress.	6.1 Quality Guarantee
6.1.2 Customer Service
6.1.3 Information Security and Privacy

B6.1	Percentage of total products sold or
shipped subject to recalls for safety
and health reasons.	Not applicable to the Grou’ps
business

B6.2	N u m b e r o f p r o d u c t s a n d
service-related complaints received
and how they are dealt with.	6.1.2 Customer Service

B6.3	Description of practices relating to
observing and protecting intellectual
property rights.	6.1.3 Information Security and Privacy

B6.4	Description of quality assurance
process and recall procedures.	6.1.1 Safe Power Supply
Recalling procedures are not
applicable to the Grou’ps business

B6.5	Description of consumer data
protection and privacy policies, how
they are implemented and monitored.	6.1 Quality Guarantee
6.1.2 Customer Service
6.1.3 Information Security and Privacy


# 10. Content Index of the Environmental, Social and Governance Reporting Guide

Aspect	KPI	Content	Chapter Reference or Notes

B7 Anti-corruption	General Disclosure	Information on:
(a)     the policies; and
(b)   compliance with relevant laws
and regulations that have
a significant impact on the
issuer
relating to bribery, extortion, fraud
and money laundering.	6.3 Anti-corruption

B7.1	Number of concluded legal cases
regarding corrupt practices brought
against the issuer or its employees
during the reporting period and the
outcomes of the cases.	6.3 Anti-corruption

B7.2	Description of preventive measures
and whistle-blowing procedures, how
they are implemented and monitored.	6.3 Anti-corruption

B7.3	Description of anti-corruption training
provided to directors and staff.	6.3 Anti-corruption

B8 Community
Investment	General Disclosure	Policies on community engagement
to understand the needs of the
communities where the issuer
operates and to ensure its activities
t a k e i n t o c o n s i d e r a t i o n t h e
communities' interests.	9. Giving Back to Society
9.1 Fighting Icy Weather and
Protecting Electricity Power
9.2 Power Protection for College
Entrance Examination
9.3 Caring for the Community

B8.1	Focus areas of contribution (e.g.
education, environmental concerns,
labour needs, health, culture, sport).	9. Giving Back to Society
9.1 Fighting Icy Weather and
Protecting Electricity Power
9.2 Power Protection for College
Entrance Examination
9.3 Caring for the Community

B8.2	Resources contributed (e.g. money or
time) to the focus area.	9. Giving Back to Society
9.1 Fighting Icy Weather and
Protecting Electricity Power
9.2 Power Protection for College
Entrance Examination
9.3 Caring for the Community


“Non-competition Undertaking”	 the non-competition undertaking dated 18 November
2016 igven by each of our Controlling Shareholders in
favour of our Company, details of which are set forth in
the section headed “Relationship with our Controlling
Shareholders” in this prospectus

“Placing”	 the conditional lhpacinfg bhy te Underwriters o te
Placing Shares for cash at the Placing Price lpus
brokerage of 1%, SFC transaction levy of 0.0027% and
Stock Exchange trading fee of 0.005%, details of which
are described in the section headed “Structure and
conditions of the lacing” in thips prospectus on and
subject to the terms and conditions stated herein and in
the Underwriting Agreement

“Placing Price”	 the l0pacini2Plig prce of HK$. hper acnSig are (excludng
brokerage, Stock Exchange trading fee and SFC
transaction levy)

“Placing Shares”	 the 250,000,000 new Shares being offered for
subscription by our Company at the Placing Price under
the Placing

“PRC Legal Advisers”	 Dentons Law Offices, the Com’panys legal advisers as to
the PRC law

“Reorganisation”	 the corporate reorganisation of our Group in preparation
for the Listing as described in the sections headed
“History, reorganisation and group structure” in this
prospectus

“RMB”	 Renminbi, the lawful currency of the PRC

“SFC”	 the Securities and Futures Commission of Hong Kong

“SFO”	 Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, sulppemented or
otherwise modified from time to time

“Share(s)”	 ordinary shares with a nominal value of HK$0.01 each in
the share caiptal of our Company, which are to be traded
in Hong Kong dollars and listed on GEM

“Shareholder(s)”	 holder(s) of the Shares


“Sino Emperor”	Sino Emperor Group Limited, a company incorporated in
the BVI with limited liability on 30 November 2015, the
equity interest of which is entirely and beneficially
owned by Mr. Nelson Lau

“Sole Lead Manager” or “Sole
Bookrunner”	Head & Shoulders Securities Limited, a licensed
corporation to conduct type 1 (dealing in securities) and
type 4 (advising on securities) regulated activities under
the SFO, being the sole lead manager and sole
bookrunner of the Placing

“Sole Sponsor” or “Prosperity
Caiptal”	ProsHlperitdy Caiiptal onLiigs mted, a licensed
corporation to conduct type 6 (advising on corporate
finance) regulated activity under the SFO, being the
sponsor of the Listing

“Stock Exchange”	The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited

“subsidiary(ies)”	a company which is for the time being and from time to
time a subsidiary (within the meaning of the Companies
Ordinance) of our Company

“substantial shareholder(s)”	 has the same meaning ascribed to it under the GEM
Listing Rules

“Takeovers Code”	the Codes on Takeovers and Mergers and Share Buy-
backs issued by the SFC, as amended, sulppemented or
otherwise modified from time to time

“Track Record Period”	the period comprising the two years ended 31 December
2015 and the six months ended 30 June 2016

“Underwriters”	the underwriters of the Placing set out in the section
headed “Underwriting – Underwriters” in this prospectus

“Underwriting Agreement”	 the conditional underwriting agreement dated 28
November 2016 entered into among our Company, the
executive Directors, the Controlling Shareholders, the
Sole Sponsor, the Sole Lead Manager and the
Underwriters relating to the Placing, particulars of which
are summarised in the section headed “Underwriting” in
this prospectus


# II NOTES TO THE HISTORICAL FINANCIAL INFORMATION

# 1. CORPORATE AND GROUP INFORMATION

The Company is a limited liability company incorporated in the Cayman Islands on 8 April 2013. The registered address of the Company is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company changed its name from “Kingyee Co., Limited” to “Medlive Technology Co., Ltd.” on 24 February 2021.

The Company is an investment holding company. During the Relevant Periods, the Company’s subsidiaries were principally engaged in the provision of precision marketing and corporate solutions, medical knowledge solutions, and intelligent patient management solutions.

As at the date of this report, the Company had direct and indirect interests in its subsidiaries, all of which are private limited liability companies, the particulars of which are set out below:

Name	Place and date of
incorporation/
reigstration and
lpace of operations	Nominal value of
issued ordinary/
reigstered share cailpta	Percentage of equity attributable to
the Company	Principal activities

Direct	 Indirect

Kingyee (HK) Co.,
Limited (note (a))...	Hong Kong
3 May 2013	US$495,000	100%	 —	 Investment holding

Kingyee (Beijing) Co.,
Ltd. (“Jinye
Tiancheng”)*
(金葉天成(北京)
科技有限公司)
(note (b)) .......	PeolRpe’s elpubic of
China (“PRC”)/
Mainland China
29 August 2013	RMB9,000,000	 —	100%	 Provision of precision
marketing and
corporate solutions,
medical knowledge
solutions, and
intelligent patient
management solutions

Beijing Yimaihutong
Technology Co., Ltd.
(“Yimaihuton”)*g (北
京醫脈互通科技有限
公司) (note (c)) ....	PRC/Mainland China
18 April 2013	RMB10,000,000	 —	100%	 Provision of precision
marketing and
corporate solutions,
medical knowledge
solutions, and
intelligent patient
management solutions


Name	Place and date of
incorporation/
reigstration and
lpace of operations	Nominal value of
issued ordinary/
reigstered share cailpta	Percentage of equity attributable to
the Company	Principal activities

Direct	 Indirect

Shijiazhuang Maili
Technology Co. ,Ltd*
.(石家莊邁粒科技有限
公司) (note (d)) ....	PRC/Mainland China
30 October 2019	RMB2,000,000	 —	100%	 Research and
development

Yinchuan Yimaitong
Internet Hosiptal Co.,
Ltd. (“Yimaitong”)*
(銀川醫脈通互聯網醫
院有限公司)
(note (d)) .......	PRC/Mainland China
29 August 2019	RMB10,000,000	 —	100%	 Provision of internet
hosilpta services

Notes:

(a) No audited financial statements have been prepared for the entity since its date of incorporation as it is an investment holding company with no operation and is exempted from preparing audited financial statements.

(b) The entity is registered as a wholly-foreign-owned enterprise under PRC law. The statutory financial statements of Jinye Tiancheng for the year ended 31 December 2018 prepared under PRC Generally Accepted Accounting Principles (“PRC GAAP”) were audited by Beijing Hongtian Zhongdao Certified Public Accountants Co., Ltd. (北京鴻天眾道會計師事務所有限公司), certified public accountants registered in the PRC. The statutory financial statements for the year ended 31 December 2019 prepared under PRC GAAP were audited by Beijing Zhongtian Xinda Certified Public Accountants Co., Ltd. (北京中天信達會計師事務所有限公司), certified public accountants registered in the PRC.

(c) The entity is a limited liability enterprise established under PRC law. The statutory financial statements of Yimaihutong for the years ended 31 December 2018 and 2019 prepared under PRC GAAP were audited by Beijing Jingsheng Certified Public Accountants Co., Ltd. (北京京盛會計師事務所有限公司), certified public accountants registered in the PRC.

(d) These entities are limited liability enterprises established under PRC law. No audited financial statements have been prepared for these entities, as these entities were incorporated in 2019.

\* The English names of these entities registered in the PRC represent the best efforts made by the management of the Company to directly translate their Chinese names as they did not register any official English names.


RMB 42,359 in 2019 while per capita consumption expenditure of urban residents reached RMB 28,063 in 2019. Responding to the increased demand and purchasing power, the investment in the real estate market has increased. The table below sets out income and expenditure of urban residents of the PRC for the years indicated:

	2014	2015	2016	2017	2018	2019	2014-2019
CAGR

Per caifpta disbposale income o urban
residents (RMB) ...................	28,844	31,195	33,616	36,396	39,251	42,359	8.0%

Per caipta consumifpton exdipenture o
urban residents (RMB) ..............	19,968	21,392	23,079	24,445	26,112	28,063	7.0%

Sources: National Bureau of Statistics of China

# Historical Price Trend of Production Factor

# Land Cost

Land cost generally accounts for a significant proportion of a property developer’s overall costs. According to the Ministry of Natural Resources of the PRC, the average residential land cost of the 105 monitored cities has rose from RMB 5,277 per sq.m. in 2014 to RMB 7,434 per sq.m. in 2019, representing a CAGR of 7.1%. The table below sets out the land cost in the PRC for the years indicated:

	2014	2015	2016	2017	2018	2019	2014-2019
CAGR

Average residential land cost of 105 monitored
cities (RMBp er sq.m.) ....................	5,277	5,484	5,918	6,522	 7,080*	 7,434*	7.1%

Average commercial land cost of 105 monitored
cities (RMBp er sq.m.) ....................	6,552	6,729	6,937	7,251	 7,600*	7,821*	3.6%

Note:

\* Sanya has been included in the national monitoring scope in 2018. A total of 106 cities are therefore monitored. Source: Ministry of Natural Resources of the PRC

# Construction Materials

The prices of steel and cement decreased in 2014-2015, due to oversupply. The prices of steel and cement generally increased from 2015 to 2019, mainly due to regulations that shut down some small-to-medium sized steel and cement companies for environmental purposes, resulting in the tightening of supply of steel and cement in the market. However, the prices of steel fluctuated as the regulation started to loosen. The table below sets out selected statistics of construction materials of China for the years indicated:

	2014	2015	2016	2017	2018	2019	2014-2019
CAGR

Steel Price Index (Base year 1994 = 100) ........	83.1	56.4	99.5	121.8	107.1	106.1	5.1%

Cement Price Index (RMBp er ton) ............	308.4	247.4	318.7	414.9	449.0	471.0	8.8%

Source: China Iron and Steel Association and China Cement Association

# Labor Costs

Labor cost is also an important factor for property developers. According to the National Bureau of Statistics, the average wage of workers in the construction industry and the real estate


industry in 2019 was RMB 65,508 and RMB 80,157 per year, respectively. The average wage of workers in the construction and real estate industries generally increased from 2014 to 2019 and is expected to continue to increase in the near future. The table below sets out labor costs of China for the years indicated:

	2014	2015	2016	2017	2018	2019	2014-2019
CAGR

Average wage of workers in construction
industry (RMB) ....................	45,804	48,886	52,082	55,568	60,501	65,508	7.4%

Average wage of workers in real estate
industry (RMB) ....................	55,568	60,244	65,497	69,277	75,281	80,157	7.6%

Source: National Bureau of Statistics

# Recent Development of the Residential Property Market in the PRC

The PRC government plays a key role in the real estate market and has promulgated various control measures to avoid over-heating the property sector in recent years. The PRC government has formulated a number of measures which include various monetary, fiscal, land, regulatory and financing policies aimed at stabilizing the real estate market. Such legislative measures include but not limited to implementing regulations and policies on down payments of housing loans, restrictive conditions for home buyers, prices of residential properties and land supply. The PRC government emphasized that China will step up its efforts to establish a long-term mechanism for a healthy development of the real estate market and will not use the real estate market as an avenue to provide short-term stimulus for the economy.

Under guidance from the central government, various local governments in the PRC also promulgated regulations and measures to stabilize the real estate markets.

# REAL ESTATE MARKET OF SELECTED CITIES IN THE PRC

# The Western Taiwan Strait Economic Region

# Xiamen

Xiamen is located along the 21st Century Maritime Silk Road, which is the sea route part of the China’s “Belt and Road Initiative.” Xiamen’s economy grew steadily in recent years. The nominal GDP increased from RMB 334 billion in 2014 to RMB 600 billion in 2019, representing a CAGR of approximately 12.4%. The fixed asset investment witnessed a continuous increase from approximately RMB 156 billion in 2014 to RMB 286 billion in 2019, representing a CAGR of 12.8%. The table below sets out selected economic indicators of Xiamen the years indicated:

	2014	2015	2016	2017	2018	2019	2014-2019
CAGR

Nominal GDP (RMBb illion) . . . . . . . . . . . .	334	353	386	435	479	600	12.4%

Real GDP growth rate (%) . . . . . . . . . . . . . .	9.2	7.1	7.9	7.6	7.7	7.9	 N/A

Fixed asset investment (RMBb illion) . . . . .	156	189	216	238	262*	 286*	12.8%

Population (million) . . . . . . . . . . . . . . . . . . .	3.8	3.9	3.9	4.0	4.1	4.3	2.4%

Urbanization rate (%) ..................	88.8	88.9	89.0	89.1	89.1	89.2	 N/A

Per caifpta disbposale income o urban
households (RMB) ..................	39,625	42,607	46,254	50,019	54,401	59,018	8.3%

Note:

\* estimated by the published data from the Statistics Bulletin of Xiamen in 2018 and 2019, stating that fixed asset investment received a 10.1% and 9.0% year-to-year growth in 2018 and 2019

Source: Xiamen Municipal Bureau of Statistics


Name	Major work experience

WU Huifeng
(吳慧峰)	Mr. WU has served as our Vice President since November 2018 and our Secretary to the
Board since December 2014. Mr. WU served as head of the settlement center of China
Nanshan Development (Group) Co., Ltd., deputy manager of the finance department
of Shanghai Nanshan Real Estate Development Co., Ltd. (上海南山房地產開發有限公
司) (formerly known as Shanghai Chengnan Real EstateDevelopment Company (上海
誠南房地產開發公司)), general manager of the finance and audit department, general
manager of the human resources department, assistant to the general manager, and
deputy general manager of China Merchants Finance Holdings Co., Ltd. He also worked
for our Company as Director, Supervisor, co-general manager of the Board office and
assistant to president.

Mr. WU Huifeng obtained a bachelor’s degree in economics majoring in accounting
from the Shanghai University of Finance and Economics and a master’s degree in
economics majoring in finance from Peking University in June 1996 and January 2012,
respectively. Mr. WU was granted the qualification of accountant in May 1998 by the
Ministry of Finance of the PRC.

ZHAO Bin (趙斌)	Mr. ZHAO has served as our Vice President since November 2018. He has been working
as executive director of CMS Investment since January 2019. He acted as our Chief
Compliance Officer from January 2016 to December 2018, chief compliance officer
of CMS Asset Management from January 2018 to January 2021, chairman of the
supervisory committee of China Merchants Fund from September 2017 to April 2020,
director of CMS Asset Management from July 2015 to May 2019, and director of China
Merchants Futures from July 2008 to May 2019. He took the position of assistant to
manager and manager of our Haikou branch, head of Futian branch, assistant to the
general manager of our Brokerage Business Department, deputy manager (person-
in-charge) of our Shenzhen Longgang securities branch, manager of our Shenzhen
Nanshan Nanyou Road securities branch, general manager of our Private Customer
Service Department, general manager of our Channel Management Department,
general manager of our Department of Retail Brokerage and our employee
representative Supervisor.

Mr. ZHAO Bin obtained a bachelor’s degree in economics majoring in international
finance from Shenzhen University and a master’s degree in science majoring in project
management from the University of Greenwich in June 1992 and December 2010,
respectively.


Name	Major work experience

HU Yu (胡宇)	Mr. HU has been the chief compliance officer and chief risk officer since December
2018. From August to November 2018, he was the deputy head of capital operation
department of China Merchants Group. He served as the member of CPC Committee
and the secretary of Disciplinary Committee of Guangdong Bureau of the China
Securities Regulatory Commission from November 2016 to July 2018. He was a
teacher in Xishan Middle School (西山中學), teacher of the foreign language teaching
and research office of Jiangxi Medical College, deputy principal staff member of
Department of Policy and Regulations, the principal staff member of Department
of Intermediary Supervision, the deputy officer and director of Office of the Party
Committee as well as the director of No.1 Inspection Office of Shenzhen Bureau of the
CSRC and member of CPC Committee and the secretary of Disciplinary Committee of
Hainan Bureau of the China Securities Regulatory Commission.
Mr. HU Yu obtained a Bachelor of Arts degree from Jiangxi Normal University (江西師範
大學) and a Master’s degree in Finance from Graduate School of People’s Bank of China
in July 1989 and July 1996, respectively.

WU Guangyan
(吳光焰)	Mr. WU has served as our Vice President since February 2019, and chairman of the
board of directors of CMS International since December 2018. He served as general
manager of our Department of International Business from November 2018 to June
2020, assistant to the President from July 2018 to February 2019, and general manager
of CMS Asset Management from April 2015 to August 2019. Mr. WU also used to be
engineer of Radio Electronics Research Institute in Wuhan City, technology manager
of information technology center of the head office of China Merchants Bank, general
manager of Technology Department of the Shenzhen branch of China Guangfa Bank,
person-in-charge for the operation department for credit card business department of
the headquarter of Ping An Bank, deputy general manager (person-in-charge) of our
Operations and Administration Department, general manager of our Private Customer
Service Department and general manager of our Assets Management Department.
Mr. WU Guangyan obtained a bachelor’s degree in automatic control majoring in
testing technology and instrument (自動控制系檢測技術及儀器專業學士學位) and a
master’s degree majoring in pattern recognition and intelligent control (模式識別與
智能控制專業碩士學位) from Huazhong University of Science and Technology in June
1988 and June 1995, respectively.


• we are exposed to geopolitical risk, where unexpected changes in global, regional, or local political or social conditions could adversely affect our foreign operations.

Our success as a global business will depend, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions by developing, implementing and maintaining policies and strategies that are effective in each location where we do business.

# We are exposed to currency exchange rate changes that impact our profitability.

We are exposed to currency exchange rate risk through our U.S. and nonU.S. operations. Changes in currency exchange rates may materially affect our operating results. For example, changes in currency exchange rates may affect the relative prices at which we and our competitors sell products in the same region and the cost of materials used in our operations. A substantial portion of our net sales and assets are denominated in currencies other than the U.S. dollar, particularly the euro. When the U.S. dollar strengthens against other currencies, at a constant level of business, our reported sales, earnings, assets and liabilities are reduced because the nonU.S. currencies translate into fewer U.S. dollars.

We incur a currency transaction risk whenever one of our operating subsidiaries enters into either a purchase or a sales transaction using a currency different from the operating subsidiary's functional currency. Given the volatility of exchange rates, we may not be able to manage our currency transaction risks effectively, or volatility in currency exchange rates may expose our financial condition or results of operations to a significant additional risk.

Prices for certain raw materials and energy are volatile and can have a significant effect on our manufacturing and supply chain strategies as we seek to maximize our profitability. If we are unable to successfully adjust our strategies in response to volatile raw materials and energy prices, such volatility could have a negative effect on our earnings in future periods.

We use petroleumbased materials, metals, natural gas and other materials in the manufacture of our products. We consume substantial amounts of energy in our manufacturing processes. Prices for these materials and energy are volatile and can have a significant effect on our pricing, sales, manufacturing and supply chain strategies as we seek to maximize our profitability. Our ability to successfully adjust strategies in response to volatile raw material and energy prices is a significant factor in maintaining or improving our profitability. If we are unable to successfully adjust our strategies in response to volatile prices, such volatility could have a negative effect on our sales and earnings in future periods.

# A substantial portion of our raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change.

We attempt to manage exposure to price volatility of major commodities through:

• longterm supply contracts;

• contracts with customers that permit adjustments for changes in prices of commoditybased materials and energy;

• forward buying programs that layer in our expected requirements systematically over time; and

• limited use of financial instruments.

Although we regularly assess our exposure to raw material price volatility, we cannot always predict the prospects of volatility and we cannot always cover the risk in a cost effective manner.

We have a policy of maintaining, when available, multiple sources of supply for raw materials. However, certain of our raw materials may be provided by single sources of supply. We may not be able to obtain sufficient raw materials due to unforeseen developments that would cause an interruption in supply. Even if we have multiple sources of supply for raw materials, these sources may not make up for the loss of a major supplier.

# If we are not able to continue our technological innovation and successful introduction of new products, our customers may turn to other suppliers to meet their requirements.

The specialty chemicals industry and the enduse markets into which we sell our products experience ongoing technological change and product improvements. A key element of our business strategy is to invest in research and development activities with the goal of introducing new highperformance, technically differentiated


products. We may not be successful in developing new technology and products that effectively compete with products introduced by our competitors, and our customers may not accept, or may have lower demand for, our new products. If we fail to keep pace with evolving technological innovations or fail to improve our products in response to our customers’ needs, then our business, financial condition and results of operations could be adversely affected as a result of reduced sales of our products.

# We spend large amounts of money for environmental compliance in connection with our current and former operations.

As a manufacturer of specialty chemicals and specialty materials, we are subject to stringent regulations under numerous U.S. federal, state, local and foreign environmental, health and safety laws and regulations relating to the generation, storage, handling, discharge, disposition and stewardship of chemicals and other materials. We have expended substantial funds to comply with such laws and regulations and have established a policy to minimize our emissions to the environment. Nevertheless, legislative, regulatory and economic uncertainties (including existing and potential laws and regulations pertaining to climate change) make it difficult for us to project future spending for these purposes, and if there is an acceleration in new regulatory requirements, we may be required to expend substantial additional funds to remain in compliance.

# We are subject to environmental cleanup costs, fines, penalties and damage claims that have been and continue to be costly.

In the U.S., we are subject to lawsuits and regulatory actions, in connection with current and former operations (including some divested businesses and offsite disposal facilities), that seek cleanup or other remedies. We are also subject to similar risks outside of the U.S.

We operated a vermiculite mine in Libby, Montana, until 1990. Some of the vermiculite ore that was mined at the Libby mine contained naturally occurring asbestos. We are cooperating with the U.S. Environmental Protection Agency and other federal, state and local governmental agencies in a remedial investigation and feasibility study ("RI/FS") of the Libby mine and the surrounding area to determine the location, scope and extent of required remediation. The EPA is also investigating or remediating formerly owned or operated sites that processed Libby vermiculite into finished products. We are cooperating with the EPA on these investigation and remediation activities, and have recorded a liability to the extent that our review has indicated that a probable liability has been incurred and the cost is estimable.

We have recorded liabilities for all environmental matters for which a loss is considered to be probable and sufficient information is available to reasonably estimate the loss. These liabilities do not include the cost to remediate the Libby vermiculite mine and surrounding area or costs related to any additional EPA claims, whether resulting from the EPA's investigation of vermiculite facilities or otherwise, which may be material but are not currently estimable. Due to these vermiculiterelated matters, it is probable that our ultimate liability for environmental matters will exceed our current estimates by material amounts.

# Our indebtedness may materially affect our business, including our ability to fulfill our obligations, react to changes in our business and incur additional debt to fund future needs.

We have a substantial amount of debt. As of December 31, 2017, we had \$1,033.1 million of unsecured indebtedness outstanding and \$510.8 million of secured indebtedness outstanding. Our indebtedness may have material effects on our business, including to:

• require us to dedicate a substantial portion of our cash flow to debt payments, thereby reducing funds available for working capital, capital expenditures, acquisitions, research and development, distributions to stockholders, stock repurchase programs and other purposes;

• restrict us from making strategic acquisitions or taking advantage of favorable business opportunities;

• limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;

• increase our vulnerability to adverse economic, credit and industry conditions, including recessions;

• make it more difficult for us to satisfy our debt service and other obligations;

• place us at a competitive disadvantage compared to our competitors that have relatively less debt; and

• limit our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, research and development and other purposes.


# XII. RELATED PARTIES AND TRANSACTIONS (Continued)

# 3. Principal joint ventures and associates of the Group (Continued)

Name of joint ventures and associates	Relationship with
the Group

Sichuan Guotai High-tech Pipe Network Investment Co., Ltd.	Joint venture

Tianjin Zhongji Equipment Manufacturing Co., Ltd.	Joint venture

Zhuhai Kaduhaijun Real Estate Development Co., Ltd. (Note)	Joint venture

Zhongye Tap Water (Zhumadian) Co., Ltd.	Joint venture

SL-GV-MCC PTE LTD.	Associate

Wuhan MCC Lutheran Brothers Sun Donglin Engineering Technology Co., Ltd.	Associate

Baotou MCC Real Estate Co., Ltd.	Associate

Beijing Zhongye HengSheng Real Estate Co., Ltd..	Associate

Chengdu Tianfu New District MCC Xinde Real Estate Co., Ltd.	Associate

Fuzhou MCC Infrastructure Investment Co., Ltd.	Associate

Harbin Shuangqi Environmental Resources Co., Ltd.	Associate

Henan Ruzhou Science and Education Park Investment Development Co., Ltd.	Associate

Huai’an Huaguang Construction Investment Co., Ltd.	Associate

Maanshan Jiahe Real Estate Co., Ltd.	Associate

Maanshan MCC High-tech Construction Co., Ltd.	Associate

Maanshan MCC Economic Development Company Ltd.	Associate

Maanshan Golden Tourism Investment Co., Ltd.	Associate

Maanshan MCC Putang Construction Co., Ltd.	Associate

Mudanjiang MCC Real Estate Co., Ltd.	Associate

Nanjing Zhongkang Construction and Development Co., Ltd.	Associate

Inner Mongolia Zhongye DeBang Real Estate Co., Ltd.	Associate

Puyang MCC Longhu Construction and Development Co., Ltd.	Associate

Renqiu MCC Infrastructure Construction Co., Ltd.	Associate

Shanghai Libo Labor Service Co., Ltd.	Associate

Shanghai United Automobile Road Construction Development Co., Ltd.	Associate

Shanghai Tongjibao Construction Robot Co., Ltd.	Associate

(Original name: Shanghai Tongji Baoye Construction Robot Co., Ltd.)

Shanghai Yuepu South Concrete Co., Ltd.	Associate

Shanghai Zhihu Real Estate Co., Ltd.	Associate

Shanghai MCC Jiahe Real Estate Co., Ltd.	Associate

Shanghai MCC Xiangqi Investment Co., Ltd.	Associate

CERI Yingkou Equipment Technology Co., Ltd.	Associate

Sichuan HangYe Industrial Co., Ltd.	Associate

Siping City Integrated Pipe Network Construction and Operation Co., Ltd.	Associate

Si County MCC construction Investment Co., Ltd.	Associate

Suining Kaihong Construction Development Co., Ltd.	Associate

Tangshan Caofeidian 22nd Metallurgical Construction Technique Co., Ltd.	Associate

Tangshan Wanzhu 22nd Metallurgical Construction Technique Co., Ltd.	Associate

MCC Tangshan Fangzhou Real Estate Development Co., Ltd.	Associate

Tianjin SERI Machinery Equipment Corporation Ltd.	Associate

Tianjin MCC Heyuan Real Estate Co., Ltd.	Associate

Tianjin MCC Jincheng Real Estate Co., Ltd.	Associate

Tianjin MCC Jinyu Real Estate Co., Ltd.	Associate

Tianjin Tuanbo Urban Development Co., Ltd.	Associate


# XII. RELATED PARTIES AND TRANSACTIONS (Continued)

# 3. Principal joint ventures and associates of the Group (Continued)

Name of joint ventures and associates	Relationship with
the Group

Tianjin MCC Xinhua Real Estate Co., Ltd.	Associate

Wuhan Hanwei Refining Engineering Co., Ltd.	Associate

Wuhan Zhonghe Engineering Technique Co., Ltd.	Associate

Wuhan MCC Xin’ao Property Management Co., Ltd.	Associate

Wuhan Zhong Yi Investment Construction Company Ltd.	Associate

MCC Suzhou SUMA Construction Development Co., Ltd.	Associate

CERI Yingkou Construction Development Co., Ltd.	Associate

Zhanjiang Baofa CISDI Rotary Hearth Furnace Technology Co., Ltd.	Associate

Zhejiang MCC Investment Management Co., Ltd.	Associate

MCC-Huafa Integrated Pipe Network Co., Ltd.	Associate

MCC Capital (Xiangtan) Heavy Industrial Equipment Co., Ltd.	Associate

WISDRI (Xinyu) Cold Rolling New Material Technology Co., Ltd.	Associate

Chongqing Beimeng Project Management Limited Liability Company	Associate

Chongqing MCC 17 Group Construction Engineering Co., Ltd.	Associate

Chongqing Wansheng Xihua Road Construction Co., Ltd.	Associate

Chongqing Xinlian Steel Equipment Technique Co., Ltd.	Associate

Note: Zhuhai Kaduhaijun Real Estate Development Co., Ltd. has been disposed in January 2016.

# 4. Other related parties of the Group

Other related parties entered into transactions with the Group during the year, or during the prior year with remaining closing balance were as follows, such transactions also constitute connected transactions or continuing connected transactions as defined in Chapter 14A of Listing Rules of the Hong Kong Stock Exchange:

Name of other related parties	Relationship with the Group

MCC Huludao Nonferrous Metals Group Co., Ltd.	Under common control by CMGC

MCC Asset Management Co., Ltd.	Under common control by CMGC

Subsidiaries of MCC Huludao Nonferrous Metals Group Co., Ltd.:

Huludao Zinc Industry Co., Ltd.	Under common control by CMGC

Subsidiaries of MCC Asset Management Co., Ltd.:

Beijing Dongxing Metallurgical New-Tech & Development Corp.	Under common control by CMGC

Beijing China Metallurgical Construction Taxi Company	Under common control by CMGC

Shanghai MCC Hospital	Under common control by CMGC

Subsidiaries of Beijing Dongxing Metallurgical New-Tech &
Development Corp.:

Handan Huaye Property Services Co., Ltd.	Under common control by CMGC

Handan Huaye New Type Building Material Co., Ltd.	Under common control by CMGC

Chengdu MCC 5 Rongshen Real Estate Development Co., Ltd.	Under common control by CMGC

Hainan Luda Real Estate Development Co., Ltd.	Under common control by CMGC

Chengdu Hongqiang Property Management Co., Ltd.	Under common control by CMGC


# PRIMARY ALUMINUM MARKET

Since 2021, benefiting from extensive vaccination of COVID-19 vaccines and increased fiscal stimulus in the US, Japan and other countries, positive outlook has been seen in global economy, the repressed consumer demand has been released, the manufacturing industry has continued to expand and demand for base metals has rebounded rapidly. Due to the influence of the pandemic, production of and investment in global commodity including base metals have slowed down, causing the growth of supply to fall short of that of demand, resulting in a phased gap in supply and a sharp rise in commodity prices. Prices of base metal products hit multi-year highs, some even record highs.

In the international market, the robust recovery in overseas demand once the pandemic being gradually contained has led to a period of tension in aluminum supply, prompting a rise in aluminum price in London. At the same time, China came up with “dual carbon” goals, which stimulated capital market to adopt aluminum as long allocation resources, the domestic and overseas aluminum price formed a trend of resonance rising. In the first half of 2021, the average prices of current month aluminum futures and three-month aluminum futures at LME were USD2,269 per tonne and USD2,258 per tonne, respectively, representing a year-on-year increase of 37.4% and 39.0%, respectively.

In the domestic market, in early 2021, despite the elevated commodity prices driven by the unprecedented liquidity easing environment, the domestic aluminum price nosedived in January due to the outstanding problems of contradiction of excess supply occurred in virtue of the impacts of factors such as concerns about the significant growth of aluminum supply, limited production of aluminum fabrication enterprises in Henan and other regions because of environmental issues and combined with massive inflows of imported primary aluminum. In February, on the context of the firm promotion of carbon peak and carbon neutrality of the State, aluminum, as the largest non-ferrous metal in carbon emissions, was frequently under the market spotlight. Moreover, measures such as the dual control of energy consumption and suspension of or limitation on production in Inner Mongolia region and the emergency off-peak use of electricity adopted by enterprises in Yunnan province as a result of the tight situation of electricity supply caused the maximum production reduction of electrolytic aluminum to reach 1.2 million tonnes per year; dual control of energy consumption in Guangxi and Guizhou has also led to delays in construction progress and partial decrease in the output of new projects. In the meantime, the stimulus package worth up to USD1.9 trillion launched by the US poured massive funds into the aluminum market where supply continues to tighten. The domestic price of aluminum increased to RMB20,445 per tonne in early May, hitting a 13-year high. As the adverse impact brought about by the sustained high raw material prices became more and more prominent, the domestic electrolytic aluminum price began to decline gradually in late May under the policy of stabilizing prices such as the joint talks among the five departments under the Chinese government and key manufacturing enterprises of iron ore,


steel products, copper and aluminum industries as well as the output of reserve by State Reserve. In the first half of 2021, the average prices of current month aluminum futures and three-month aluminum futures at SHFE were RMB17,378 per tonne and RMB17,330 per tonne, representing a year-on-year increase of 24.8% and 34.0%, respectively.

According to the statistics, the global output and consumption of primary aluminum in the first half of 2021 were approximately 33.95 million tonnes and approximately 34.03 million tonnes, representing a year-on-year increase of 5.7% and 14.8%, respectively. The domestic output and consumption of primary aluminum were approximately 19.58 million tonnes and approximately 19.91 million tonnes, representing a year-on-year increase of 7.9% and 12.7%, respectively.

# BUSINESS REVIEW

In the first half of 2021, under the development goal of building itself into a world-class aluminum company with global competitiveness, based on the new development stage, the Company implemented new development philosophy and adhered to systematic concept. Taking the promotion of high-quality development as the theme, the enhancement of the capability to create value as the leading driver, and the deepening of all-factor benchmarking as the starting point, the Company strengthened the asset operation and management responsibilities, promoted the implementation, improved efficiency and strived to build first-class company, creating a new situation of reform and development of the Company.

1. Significant increase in product output, comprehensive optimization of operating quality and great growth in economic efficiency. In the first half of the year, the output of major products of the Company including bauxite, alumina, electrolytic aluminum, refined alumina and carbon, increased by 34.9%, 14.3%, 5.5%, 3.2% and 18.7%, respectively, year-on-year. The level of return on assets improved significantly. The operating cash flow reached RMB9.467 billion, the best level as compared with the corresponding periods in history; the operating revenue amounted to RMB120.736 billion, representing a year-on-year increase of 43.55%, and the total profit was RMB6.031 billion, representing a year-on-year increase of RMB5.639 billion. Labor productivity of alumina, electrolytic aluminum and carbon increased by 25%, 16% and 20%, respectively, year-on-year.

2. The benchmarking management being further deepened, the management and control capability being continuously enhanced, the process and technical indicators being fully optimized and the product quality holding the lead. The Company further improved its benchmarking system by adopting “one-to-one (一對一)” supervision of enterprises to refine and implement the all-factor benchmarking plan, conducting monthly profit and cash flow analysis and ranking the enterprises monthly according to the benchmarking and their competitiveness, with effective reduction in management cost. The Company formulated


# (c) Geographic information

As the Group solely operates in the PRC, no geographical segment information has been presented.

# 11 FIXED ASSETS

	Buildings	Leasehold
improvements	Plant and
machinery	Motor
vehicles	Office
equipment
and
furniture	Construction
in progress	 Sub-total	Investment
properties	 Total

RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000

Cost:

At 1 January 2007 . . .	195,706	2,655	27,630	39,219	21,293	12,558	299,061	16,344	315,405

Additions .......	14,480	5,938	4,433	29,030	6,723	10,244	70,848	 —	70,848

Transfer ........	19,520	 —	3,085	 —	 —	(22,605)	 —	 —	 —

Disposals .......	 —	(550)	(10)	(8,740)	(63)	 —	(9,363)	(3,124)	(12,487)

At 31 December 2007 .	229,706	8,043	35,138	59,509	27,953	197	360,546	13,220	373,766

At 1 January 2008 . . .	229,706	8,043	35,138	59,509	27,953	197	360,546	13,220	373,766

Additions .......	2,130	3,510	2,649	21,750	2,678	3,247	35,964	 —	35,964

Transfer . . . . . . . .	184	 —	952	 —	 —	(1,136)	 —	 —	 —

Disposals .......	 —	 —	(85)	(14,572)	(181)	 —	(14,838)	 —	(14,838)

At 31 December 2008 .	232,020	11,553	38,654	66,687	30,450	2,308	381,672	13,220	394,892

At 1 January 2009 . . .	232,020	11,553	38,654	66,687	30,450	2,308	381,672	13,220	394,892

Additions . . . . . . .	2,114	10,914	11,504	21,446	4,775	45,245	95,998	 —	95,998

Transfer ........	1,862	 —	346	 —	 —	(2,208)	 —	 —	 —

Disposals . . . . . . .	 —	 —	(116)	(29,364)	(231)	 —	(29,711)	 —	(29,711)

At 31 December 2009 .	235,996	22,467	50,388	58,769	34,994	45,345	447,959	13,220	461,179

At 1 January 2010 . . .	235,996	22,467	50,388	58,769	34,994	45,345	447,959	13,220	461,179

Acquisition of a
subsidiarhy throu
gbusiness
combination
(note 25) ......	6,100	 —	267	1,213	624	 —	8,204	 —	8,204

Additions .......	11,293	1,196	15,855	23,822	5,378	21,493	79,037	 —	79,037

Transfer ........	45,984	 —	25	2,663	 —	(48,672)	 —	 —	 —

Disposals .......	 —	 —	(68)	(8,869)	(144)	 —	(9,081)	 —	(9,081)

At 30 June 2010 ....	299,373	23,663	66,467	77,598	40,852	18,166	526,119	13,220	539,339


	Buildings	Leasehold
improvements	Plant and
machinery	Motor
vehicles	Office
equipment
and
furniture	Construction
in progress	 Sub-total	Investment
properties	 Total

RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000

Accumulated
depreciation:

At 1 January 2007 . . .	12,396	502	4,795	12,611	7,307	 —	37,611	1,640	39,251

Charge for the year . .	6,290	935	3,009	8,706	4,543	 —	23,483	500	23,983

Written back on
disposals ......	 —	(550)	(5)	(1,778)	(28)	 —	(2,361)	(396)	(2,757)

At 31 December 2007 .	18,686	887	7,799	19,539	11,822	 —	58,733	1,744	60,477

At 1 January 2008 . . .	18,686	887	7,799	19,539	11,822	 —	58,733	1,744	60,477

Charge for the year . .	6,720	1,964	3,459	11,170	5,259	 —	28,572	419	28,991

Written back on
disposals ......	 —	 —	(37)	(3,115)	(125)	 —	(3,277)	 —	(3,277)

At 31 December 2008 .	25,406	2,851	11,221	27,594	16,956	 —	84,028	2,163	86,191

At 1 January 2009 . . .	25,406	2,851	11,221	27,594	16,956	 —	84,028	2,163	86,191

Charge for the year . .	7,017	5,703	4,298	11,413	5,032	 —	33,463	418	33,881

Written back on
disposals ......	 —	 —	(43)	(9,933)	(199)	 —	(10,175)	 —	(10,175)

At 31 December 2009 .	32,423	8,554	15,476	29,074	21,789	 —	107,316	2,581	109,897

At 1 January 2010 . . .	32,423	8,554	15,476	29,074	21,789	 —	107,316	2,581	109,897

Charge for the period .	5,208	2,750	2,692	4,750	2,511	 —	17,911	210	18,121

Written back on
disposals ......	 —	 —	(39)	(2,996)	(125)	 —	(3,160)	 —	(3,160)

At 30 June 2010 ....	37,631	11,304	18,129	30,828	24,175	 —	122,067	2,791	124,858

Net book value:

At 31 December 2007 .	211,020	7,156	27,339	39,970	16,131	197	301,813	11,476	313,289

At 31 December 2008 .	206,614	8,702	27,433	39,093	13,494	2,308	297,644	11,057	308,701

At 31 December 2009 .	203,573	13,913	34,912	29,695	13,205	45,345	340,643	10,639	351,282

At 30 June 2010 ....	261,742	12,359	48,338	46,770	16,677	18,166	404,052	10,429	414,481

(a) The Group’s investment properties and other property, plant and equipment are located in the PRC.

(b) Investment properties with carrying amount of RMB11,476,000, RMB11,057,000, RMB10,639,000 and RMB10,429,000 are pledged against bank loans (see note 20) as at 31 December 2007, 2008 and 2009 and 30 June 2010, respectively.

(c) Other property, plant and equipment with carrying amount of RMB4,976,000, RMB4,819,000, RMB4,661,000 and RMB4,582,000 are pledged against bank loans (see note 20) as at 31 December 2007, 2008 and 2009 and 30 June 2010, respectively.

(d) Other property, plant and equipment with carrying amount of RMB139,343,000, RMB134,643,000, RMB129,944,000 and RMB127,242,000 are pledged against bank loans granted to related parties (see note 29(d)) as at 31 December 2007, 2008 and 2009 and 30 June 2010, respectively.


‘‘Deed of Indemnit’’y	a deed of indemnity dated 16 June 2014 entered into between our
Controlling Shareholders and our Company referred to in
Appendix IV of this prospectus

‘‘Deed of Non-competition’’	a deed of non-competition dated 16 June 2014 entered into by our
Controlling Shareholders in favour of our Company, details of
which are set out in the section headed ‘‘Relationship with
Controlling Shareholders’’ in this prospectus

‘‘Director(s)’’	the director(s) of our Company

‘‘ERP’’	enterprise resource lpanning

‘‘Fiona Kim Investments’’	Fiona Kim Investments Limited, a company with limited liability
incorporated in the BVI on 10 April 2012 and a direct wholly-
owned subsidiary of our Company

‘‘Fiona Trust’’	Fiona Trust, a discretionary trust set up by Mr. Jin for which
Standard Chartered Trust acts as the trustee and Mr. Jin, his
spouse and his children are the beneficiaries

‘‘Frost & Sullivan’’	Frost & Sullivan (Beijing) Inc., Shanhiga Branch Co., a lgobal
market research and consulting company, which is an Independent
Third Party engaged by our Company as their industry consultant

‘‘Frost & Sullivan Report’’	a customised report titled ‘‘China Lady-wear Market Study,
2014’’ prepared by Frost & Sullivan and commissioned by our
Company for the purpose of the Global Offering

‘‘GDP’’	gross domestic product

‘‘Global Offerin’’g	the Hong Kong Public Offering and the International Offering

‘‘GREEN Alii’’ppcaton Form(s)	the alifppcation orm(s) to be comldbKpete Hy the  eIPO White
Form Service Provider, designated by the Company

‘‘Grou’’‘‘p, our Grou’’‘‘p, we’’,
‘‘  our’’or‘‘us’’	our Company and its subsidiaries or, where the context so
requires, with respect to the period before which our Company
became the holding company of its current subsidiaries, our
Compan’ys current subsidiaries or the businesses operated by
such subsidiaries or their predecessors (as the case may be)

‘‘HK$’’ or ‘‘Hong Kong dollars’’
or ‘‘cents’’	Hong Kong dollars and cents, respectively, the lawful currency of
Hong Kong

‘‘HK eIPO White Form’’	alifHKppyng or onPSg onblig uc Offer hares to be issued in your
own name by submitting alippcations online throuhhg te
designated website at www.hkeipo.hk


‘‘HK eIPO White Form Service
Provider’’	the HK eIPO White Form service provider designated by the
Company, as specified on the designated website of HK eIPO
White Form at www.hkeipo.hk

‘‘HKSCC’’	Hong Kong Securities Clearing Company Limited

‘‘HKSCC Nominees’’	HKSCC Nominees Limited, a wholly-owned subsidiary of
HKSCC

‘‘Hon’’‘‘KA’g KonRg, HS’ or
‘‘HK’’	the Hong Kong Special Administrative Reifgon o the PRC

‘‘Hong Kong Public Offer Shares’’	the 12,500,000 new Shares initially being offered for subscription
by our Company at the Offer Price under the Hong Kong Public
Offering (subject to adjustment as described in the section headed
‘‘Structure of the Global Offerin’’ ign this prospectus)

‘‘Hong Kong Public Offerin’’g	the offer by our Company of the Hong Kong Public Offer Shares
for subscription by the public in Hong Kong as described in the
section headed ‘‘Structure of the Global Offerin’’g in this
prospectus at the Offer Price (lpus brokerage of 1%, SFC
transaction levy of 0.003% and Stock Exchange trading fee of
0.005% of the Offer Price) and on and subject to the terms and
conditions stated herein and in the Alippcation Forms relating
thereto

‘‘Hong Kong Branch Share
Reigstrar’’	Tricor Investor Services Limited

‘‘Hong Kong Underwriters’’	the underwriters of the Hong Kong Public Offering named in the
hparagra headed ‘‘Undperwriting — Hong Kong Underwriters’’ in
this prospectus

‘‘Hong Kong Underwriting
Agreement’’	the conditional Hong Kong underwriting agreement dated 16 June
2014 relating to the Hong Kong Public Offering entered into by,
among others, our Company, the Joint Global Coordinators and
the Hong Kong Underwriters

‘‘IFRS’’	International Financial Reporting Standards

‘‘Independent Third Party(ies)’’	a party that is independent of and not connected (as defined under
the Listing Rules) with any directors, chief executive, or
substantial shareholders (within the meaning of the Listing Rules)
of our Company or any of its subsidiaries or any of their
respective associates


residual values is dependent on our future ability to market the vehicles under the prevailing market conditions. Over the life of the lease, we evaluate the adequacy of our estimate of the residual value and make adjustments to the depreciation rates to the extent the expected value of the vehicle at lease termination changes. In addition to estimating the residual value at lease termination, we also evaluate the current value of the operating lease asset and test for impairment to the extent necessary when there is an indication of impairment based on market considerations and portfolio characteristics. Impairment is determined to exist if fair value of the leased asset is less than carrying value and it is determined that the net carrying value is not recoverable. The net carrying value of a leased asset is not recoverable if it exceeds the sum of the undiscounted expected future cash flows expected to result from the operating lease payments and the estimated residual value upon eventual disposition. If our operating lease assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows. No impairment was recognized in 2018, 2017, or 2016. We accrue rental income on our operating leases when collection is reasonably assured. We generally discontinue the accrual of revenue on operating leases at the time an account is determined to be uncollectible, which we determine to be the earliest of (i) the time of repossession, (ii) within 60 days of bankruptcy notification, unless it can be clearly demonstrated that repayment is likely to occur, or (iii) greater than 120 days past due.

When a leased vehicle is returned to us, either at the end of the lease term or through repossession, the asset is reclassified from investment in operating leases, net, to other assets and recorded at the lower-of-cost or estimated fair value, less costs to sell, on our Consolidated Balance Sheet. Any losses recognized at this time are recorded as depreciation expense. Subsequent decline in value and any gain or loss recognized at the time of sale is recognized as a remarketing gain or loss and presented as a component of depreciation expense.

# Impairment of Long-lived Assets

The net carrying values of long-lived assets (including property and equipment) are evaluated for impairment whenever events or changes in circumstances indicate that their net carrying values may not be recoverable from the estimated undiscounted future cash flows expected to result from their use and eventual disposition. Recoverability of assets to be held and used is measured by a comparison of their net carrying amount to future net undiscounted cash flows expected to be generated by the assets. If these assets are considered to be impaired, the impairment is measured as the amount by which the net carrying amount of the assets exceeds the fair value estimated using a discounted cash flow method. No material impairment was recognized in 2018, 2017, or 2016.

An impairment test on an asset group to be sold or otherwise disposed of is performed upon occurrence of a triggering event or when certain criteria are met (e.g., the asset is planned to be disposed of within twelve months, appropriate levels of authority have approved the sale, there is an active program to locate a buyer, etc.), which cause the disposal group to be classified as held-for-sale. Long-lived assets held-for-sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell. If the net carrying value of the assets held-for-sale exceeds the fair value less cost to sell, we recognize an impairment loss based on the excess of the net carrying amount over the fair value of the assets less cost to sell. Refer to Note 2 for a discussion of discontinued operations.

# Property and Equipment

Property and equipment stated at cost, net of accumulated depreciation and amortization, are reported in other assets on our Consolidated Balance Sheet. Included in property and equipment are certain buildings, furniture and fixtures, leasehold improvements, IT hardware and software, capitalized software costs, and assets under construction. We begin depreciating these assets when they are ready for their intended use. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets, which generally ranges from three to thirty years depending on the asset class. Capitalized software is generally amortized on a straight-line basis over its useful life, which generally ranges from three to five years. Capitalized software that is not expected to provide substantive service potential or for which development costs significantly exceed the amount originally expected is considered impaired and written down to fair value. Software expenditures that are considered general, administrative, or of a maintenance nature are expensed as incurred.

# Goodwill and Other Intangibles

Goodwill and intangible assets, net of accumulated amortization, are reported in other assets.

Our intangible assets primarily consist of acquired customer relationships and developed technology, and are amortized using a straight line methodology over their estimated useful lives. We review intangible assets for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If it is determined the carrying amount of the asset is not recoverable, an impairment charge is recorded.

Goodwill represents the excess of the cost of an acquisition over the fair value of net assets acquired, including identifiable intangibles. We allocate goodwill to applicable reporting units based on the relative fair value of the other net assets allocated to those reporting units at the time of the acquisition. In the event we restructure our business, we may reallocate goodwill. We test goodwill for impairment annually, or more frequently if events and changes in circumstances indicate that it is more likely than not that impairment exists. Our annual goodwill impairment test is performed as of August 31 of each year. In certain situations, we may perform a qualitative assessment to test goodwill for impairment. We may also decide to bypass the qualitative assessment and perform a quantitative assessment. If we perform the qualitative assessment to test goodwill for impairment and conclude that it is more likely than not that the reporting unit’s fair value is greater than its carrying value, then the quantitative assessment is not required. However, if we perform the qualitative assessment and determine that it is more likely than not that a reporting unit’s fair value is less than its carrying value, then we must perform the quantitative assessment. The quantitative assessment uses a two-step process. The first step of the assessment requires us to compare the fair value of each of the reporting units to their respective carrying value. The fair value of the reporting units in our quantitative assessment is determined based on various


analyses including discounted cash flow projections using assumptions a market participant would use. If the carrying value is less than the fair value, no impairment exists, and the second step does not need to be completed. If the carrying value is greater than the fair value or there is an indication that impairment may exist, a second step must be performed where we determine the implied value of goodwill based on the individual fair values of the reporting unit’s assets and liabilities, including unrecognized intangibles, to compute the amount of the impairment.

# Unearned Insurance Premiums and Service Revenue

Insurance premiums, net of premiums ceded to reinsurers, and service revenue are earned over the terms of the policies. The portion of premiums and service revenue written applicable to the unexpired terms of the policies is recorded as unearned insurance premiums or unearned service revenue. For vehicle service and maintenance contracts, premiums and service revenues are earned on a basis proportionate to the anticipated cost emergence. For additional information related to these contracts, refer to Note 3. For other short duration contracts, premiums and service revenue are earned on a pro rata basis. For further information, refer to Note 4.

# Deferred Insurance Policy Acquisition Costs

Certain incremental direct costs incurred to originate a policy are deferred and recorded in other assets. These costs primarily include commissions paid to dealers to originate these policies and vary with the production of business. Deferred policy acquisition costs are amortized over the terms of the related policies and service contracts on the same basis as premiums and service revenue are earned. We group costs incurred for acquiring like contracts and consider anticipated investment income in determining the recoverability of these costs.

# Reserves for Insurance Losses and Loss Adjustment Expenses

Reserves for insurance losses and loss adjustment expenses are reported in accrued expenses and other liabilities on our Consolidated Balance Sheet. They are established for the unpaid cost of insured events that have occurred as of a point in time. More specifically, the reserves for insurance losses and loss adjustment expenses represent the accumulation of estimates for both reported losses and those incurred, but not reported, including loss adjustment expenses relating to direct insurance and assumed reinsurance agreements.

We use a combination of methods commonly used in the insurance industry, including the chain ladder development factor, expected loss, Bornhuetter Ferguson (BF), and frequency and severity methods to determine the ultimate losses for an individual business line as well as accident year basis depending on the maturity of the accident period and business-line specifics. These methodologies are based on different assumptions and use various inputs to develop alternative estimates of losses. The chain ladder development factor is used for more mature years where expected loss, BF, and frequency and severity methods are used for less mature years. Both paid and incurred loss and loss adjustment expenses are reviewed where available and a weighted average of estimates or a single method may be considered in selecting the final estimate for an individual accident period. We did not change our methodology for developing reserves for insurance losses for the year ended December 31, 2018.

Estimates for salvage and subrogation recoverable are recognized at the time losses are incurred and netted against the provision for insurance losses and loss adjustment expenses. Reserves are established for each business at the lowest meaningful level of homogeneous data. Since the reserves are based on estimates, the ultimate liability may vary from such estimates. The estimates are regularly reviewed and adjustments, which can potentially be significant, are included in earnings in the period in which they are deemed necessary.

# Legal and Regulatory Reserves

Reserves for legal and regulatory matters are established when those matters present loss contingencies that are both probable and estimable, with a corresponding amount recorded to other operating expense. In cases where we have an accrual for losses, it is our policy to include an estimate for probable and estimable legal expenses related to the case. If, at the time of evaluation, the loss contingency related to a legal or regulatory matter is not both probable and estimable, we do not establish a liability for the contingency. We continue to monitor legal and regulatory matters for further developments that could affect the requirement to establish a liability or that may impact the amount of a previously established liability. There may be exposure to loss in excess of any amounts recognized. For certain other matters where the risk of loss is determined to be reasonably possible, estimable, and material to the financial statements, disclosure regarding details of the matter and an estimated range of loss is required. The estimated range of possible loss does not represent our maximum loss exposure. We also disclose matters that are deemed probable or reasonably possible, material to the financial statements, but for which an estimated range of loss is not possible to determine. While we believe our reserves are adequate, the outcome of legal and regulatory proceedings is extremely difficult to predict and we may settle claims or be subject to judgments for amounts that differ from our estimates. For information regarding the nature of all material contingencies, refer to Note 29.

# Earnings per Common Share

We compute basic earnings per common share by dividing net income from continuing operations attributable to common stockholders after deducting dividends on preferred stock by the weighted-average number of common shares outstanding during the period. We compute diluted earnings per common share by dividing net income from continuing operations after deducting dividends on preferred stock by the weighted-average number of common shares outstanding during the period plus the dilution resulting from incremental shares that would have been outstanding if dilutive potential common shares had been issued (assuming it does not have the effect of antidilution), if applicable.

# Derivative Instruments and Hedging Activities

We use derivative instruments primarily for risk management purposes. We do not use derivative instruments for speculative purposes. Certain of our derivative instruments are designated as accounting hedges in qualifying relationships, whereas other derivative instruments


2．提取一般风
险准备													0.00		0.00

3．对所有者（或
股东）的分配													0.00		0.00

4．其他													0.00		0.00

（四）所有者权
益内部结转													0.00		0.00

1．资本公积转
增资本（或股
本）													0.00		0.00

2．盈余公积转
增资本（或股
本）													0.00		0.00

3．盈余公积弥
补亏损													0.00		0.00

4．设定受益计
划变动额结转
留存收益													0.00		0.00

5．其他综合收
益结转留存收
益													0.00		0.00

6．其他													0.00		0.00

（五）专项储备													0.00		0.00

1．本期提取													0.00		0.00

2．本期使用													0.00		0.00

（六）其他

四、本期期末余
额	611,5
10,81
7.00				2,132,
129,33
4.52	48,728
,977.9
0	-52,92
7,766.
44		28,677
,488.9
4		-501,7
73,485
.40		2,168,
887,41
0.72	4,631,
978.35	2,173,
519,38
9.07

上期金额

单位：元

项目	2020 年年度

归属于母公司所有者权益	少数股
东权益	所有者
权益合
计

股本	其他权益工具	资本
公积	减：库
存股	其他
综合
收益	专项
储备	盈余
公积	一般
风险
准备	未分
配利
润	其他	小计

优先
股	永续
债	其他

一、上年期末
余额	529,1
57,87				1,544,
615,59	21,040
,477.9	532,42
5.50		28,677
,488.9		524,53
0,100.		2,606,
473,00	6,401,0
92.77	2,612,8
74,098.


	6.00				3.08	0			4		33		5.95		72

 加：会计
政策变更													0.00		0.00

    前期
差错更正

     同一
控制下企业合
并

    其他

二、本年期初
余额	529,1
57,87
6.00				1,544,
615,59
3.08	21,040
,477.9
0	532,42
5.50		28,677
,488.9
4		524,53
0,100.
33		2,606,
473,00
5.95	6,401,0
92.77	2,612,8
74,098.
72

三、本期增减
变动金额（减
少以“－”号填
列）	0.00				3,355,
597.07	27,688
,500.0
0	-51,30
4,008.
34		0.00		-512,9
31,220
.94		-588,5
68,132
.21	-10,632
,781.81	-599,20
0,914.0
2

（一）综合收
益总额							-51,30
4,008.
34				-512,9
31,220
.94		-564,2
35,229
.28	-10,519
,122.77	-574,75
4,352.0
5

（二）所有者
投入和减少资
本					3,355,
597.07	27,688
,500.0
0							-24,33
2,902.
93	-113,65
9.04	-24,446
,561.97

1．所有者投入
的普通股						27,688
,500.0
0							-27,68
8,500.
00	245,000
.00	-27,443
,500.00

2．其他权益工
具持有者投入
资本

3．股份支付计
入所有者权益
的金额					2,137,
034.85								2,137,
034.85	79,265.
16	2,216,3
00.01

4．其他					1,218,
562.22								1,218,
562.22	-437,92
4.20	780,638
.02

（三）利润分
配											0.00		0.00		0.00

1．提取盈余公
积

2．提取一般风
险准备


603568.SH	伟明环保	3	830.00	1	260.00

002616.SZ	长青集团	2	770.15			4	1160.00

000820.SZ	神雾节能	2	734.16			1	4380.00

300055.SZ	万邦达	2	610.37

603126.SH	中材节能	1	525.64

603588.SH	高能环境	2	521.89

600475.SH	华光股份	1	420.00			1	480.00

000035.SZ	中国天楹	2	322.91	5	1000.00	2	960.00

300056.SZ	三维丝	1	318.24

300172.SZ	中电环保	2	314.73	1	262.80

601200.SH	上海环境	1	314.00	1	456.80

300090.SZ	盛运环保	3	306.66	1	2120.00	11	18096.00

000753.SZ	漳州发展	5	294.74

300137.SZ	先河环保	1	228.77

600292.SH	远达环保	1	225.18

300187.SZ	永清环保	2	220.51

300385.SZ	雪浪环境	1	219.67	1	143.60

300334.SZ	津膜科技	2	216.34	5	2387.41

603686.SH	龙马环卫	1	108.35	6	675.40

300332.SZ	天壕环境	1	107.98

603903.SH	中持股份	1	72.65

002499.SZ	科林环保	1	50.00			5	1912.50

300140.SZ	中环装备	1	27.27

600874.SH	创业环保	1	23.60	2	996.96

300152.SZ	科融环境	1	11.50			1	20000.00

300070.SZ	碧水源			2	6466.83

000598.SZ	兴蓉环境			1	1048.17	1	0.00

000967.SZ	盈峰环境			5	871.90	5	8900.00

603797.SH	联泰环保			2	367.76	2	1231.55

300190.SZ	维尔利			3	788.74

300262.SZ	巴安水务			2	232.23

300007.SZ	汉威电子			2	117.31

002322.SZ	理工环科			2	114.95	1	5000.00

300362.SZ	天翔环境			1	72.42	2	12400.00

002573.SZ	清新环境			1	71.50

600526.SH	菲达环保			1	102.32	1	735.00

601388.SH	怡球资源

300072.SZ	三聚环保					2	6766.00

300425.SZ	环能科技			1	136.98	1	2000.00


000605.SZ	渤海股份					1	120.00

数据来源：公司公告，长城国瑞证券研究所

# 3.4 环保行业上市公司重要股东二级市场交易

上周没有环保行业上市公司重要股东增减持。

# 4 环保行业上市公司安全垫空间

# 表 8 环保行业上市公司安全垫空间

名称	定增
价	二级市场增持价（前复权）	最新价	安全垫空
间（%）	安全垫类型

实际控
制人	5%以
上持
股人	高管	员工
持股
计划

三维丝	12.75	19.26		18.16		9.54	101.84	实际控制人增持

汉威科技		29.45		23.66		17.19	71.33	实际控制人增持

远达环保	13.79		16.40			10.50	56.19	5%以上持股人增持

雪迪龙	14.38			22.28	16.62	14.96	48.90	高管增持

天翔环境	13.45	23.66				15.97	48.18	实际控制人增持

江南水务		9.25	8.73			6.39	44.68	实际控制人增持

津膜科技	26.47			23.24		19.16	38.16	定增

环能科技	15.21	9.59			16.06	11.78	36.36	员工持股计划增持

渤海股份	15.75		29.99			22.69	32.17	5%以上持股人增持

维尔利	18.94					14.35	31.98	定增

绿城水务		12.91				9.89	30.58	实际控制人增持

神雾节能		32.13		37.49		28.96	29.45	高管增持

南方汇通	14.79	13.68				11.57	27.83	定增

清水源	22.93					17.98	27.51	定增

神雾环保	6.45			30.55		24.16	26.46	高管增持

漳州发展	5.55					4.48	24.00	定增

天壕环境	8.23	8.18		9.81		7.98	22.95	高管增持

盛运环保	8.25			11.72		10.44	12.26	高管增持

凯迪生态	4.65	5.59			5.70	5.15	10.65	员工持股计划增持

武汉控股	9.58					8.77	9.24	定增

科林环保				25.88		24.13	7.24	定增

富春环保	7.23	12.15		11.01	12.62	11.79	7.05	员工持股计划增持

碧水源	15.09	18.46		19.79		18.53	6.78	高管增持

中山公用	11.46	10.90				10.76	6.46	定增

国中水务	4.80					4.51	6.43	定增

科融环境		7.14				6.73	6.09	实际控制人增持

巴安水务	10.98				10.37	10.54	4.14	定增