POWER XINCHEN 新 를 ত্রি 力 XINCHEN CHINA POWER HOLDINGS LIMITED 新晨中國動力控股有限公司 ( 於開曼群島註冊成立之有限公司） 股份代號：1148 年 報 2020 目錄 目錄 公司資料 2 財務摘要 3 主席致辭 4 管理層討論及分析 7 董事、高級管理層及公司秘書 10 董事會報告 14 企業管治報告 32 環境、社會及管治報告 49 獨立核數師報告 64 綜合損益及其他全面收益表 69 綜合財務狀況表 70 綜合權益變動表 72 綜合現金流量表 73 綜合財務報表附註 75 1 公司資料 公司資料 | --- | --- | |--------------------------------------|-------------------------------------------| | 董事會 | 核數師 | | 吳小安先生 （主席） | 致同（香港）會計師事務所有限公司 | | 王運先先生 （行政總裁） | 香港 | | 馬妮娜女士 # | 灣仔 | | 楊明先生 # | 軒尼詩道 28 號 | | 池國華先生 * | 12 樓 | ...

Financial Performance - For the six months ended June 30, 2020, the company reported revenue of RMB 741,953,000, a decrease of 35.7% compared to RMB 1,154,612,000 for the same period in 2019[2]. - Gross profit for the same period was RMB 46,346,000, down 69.9% from RMB 153,561,000 year-over-year[2]. - The company incurred a loss before tax of RMB 78,074,000, compared to a profit of RMB 39,383,000 in the previous year[2]. - The total comprehensive loss for the period was RMB 78,897,000, compared to a comprehensive income of RMB 30,444,000 in the prior year[3]. - The company reported a net loss attributable to shareholders of RMB 78,615,000 for the period ending June 30, 2020, compared to a profit of RMB 31,928,000 in 2019[33]. - The unaudited net loss attributable to the owners of the company for the first half of 2020 was approximately RMB 78.62 million, compared to a net profit of approximately RMB 31.93 million for the same period in 2019[95]. Revenue Breakdown - The company's revenue from gasoline engines decreased to RMB 260,111 thousand, down 54.4% from RMB 570,653 thousand in the previous year[24]. - Diesel engine revenue also saw a decline, totaling RMB 92,736 thousand, a decrease of 60.4% from RMB 234,064 thousand in 2019[24]. - Revenue from engine components increased to RMB 389,106 thousand, up 11.2% from RMB 349,895 thousand in the prior year[24]. - The revenue from the engine business segment dropped by approximately 56.2% from RMB 804.72 million in the first half of 2019 to RMB 352.85 million in the first half of 2020[91]. - The revenue from the engine parts segment increased by approximately 11.2% from RMB 349.90 million in the first half of 2019 to RMB 389.11 million in the first half of 2020[92]. Cash Flow and Investments - For the six months ended June 30, 2020, the company reported a net cash inflow from operating activities of RMB 146,338 thousand, compared to a net outflow of RMB 48,154 thousand in the same period of 2019[15]. - The company experienced a significant increase in cash outflow from investing activities, totaling RMB 235,491 thousand, compared to a cash inflow of RMB 189,587 thousand in the same period last year[17]. - Financing activities resulted in a net cash inflow of RMB 54,727 thousand, a recovery from a net outflow of RMB 207,757 thousand in the previous year[17]. - Cash and cash equivalents decreased by RMB 34,426 thousand, ending at RMB 63,762 thousand as of June 30, 2020, compared to RMB 157,626 thousand in the previous year[17]. Assets and Liabilities - Non-current assets as of June 30, 2020, amounted to RMB 3,285,069,000, a slight decrease from RMB 3,375,609,000 at the end of 2019[6]. - Current liabilities increased to RMB 1,259,098,000 from RMB 1,008,088,000 year-over-year, indicating a rise of 25%[9]. - The company's total assets were reported at RMB 6,037,651,000, a marginal increase from RMB 6,025,680,000 at the end of 2019[8]. - Trade and other payables totaled RMB 958,002,000 as of June 30, 2020, compared to RMB 934,303,000 as of December 31, 2019[61]. - The debt-to-equity ratio increased to approximately 1.07 from 1.01, and the asset-liability ratio rose to 57.7% from 53.0%, primarily due to increased bank borrowings and a decrease in total equity[99]. Operational Adjustments - The company plans to focus on expanding its market presence and enhancing its product offerings in the upcoming quarters[2]. - The company made significant adjustments in working capital, with trade and other receivables increasing by RMB 215,231 thousand compared to a decrease of RMB 46,726 thousand in the prior year[15]. - The company has made adjustments based on past credit loss experiences and current economic conditions for the expected credit loss assessment[52]. Employee and Administrative Costs - Total employee costs decreased to RMB 57,617,000 in 2020 from RMB 85,137,000 in 2019, a reduction of 32.3%[30]. - The unaudited administrative expenses decreased by approximately 10.8% from RMB 61.68 million in the first half of 2019 to RMB 54.99 million in the first half of 2020[95]. Shareholder and Governance Information - The company did not declare any dividends for the periods ending June 30, 2020, and June 30, 2019[33]. - The company’s major shareholders include Huachen Investment, Xin Hua Investment, and Sichuan Yibin Push Group, each holding 31.20%[119]. - The company has adhered to all provisions of the Corporate Governance Code as of June 30, 2020[136]. - The audit committee reviewed the accounting principles and practices adopted by the group, discussing matters related to auditing, internal controls, and financial reporting for the six months ending June 30, 2020[138]. Future Outlook - The group anticipates that automotive sales in the second half of 2020 may reach levels comparable to the previous year, driven by pent-up demand and government stimulus measures[107]. - The group plans to continue exploring new business opportunities with BMW and other strategic partners in the future[112].

POWER XINCHEN 新 动 XINCHEN CHINA POWER HOLDINGS LIMITED 新晨中國動力控股有限公司 (於開曼群島註冊成立之有限公司) 股份代號：1148 目錄 目錄 公司資料 2 財務摘要 3 主席致辭 4 管理層討論及分析 8 董事、高級管理層及公司秘書 11 董事會報告 15 企業管治報告 33 環境、社會及管治報告 50 獨立核數師報告 61 綜合損益及其他全面收益表 65 綜合財務狀況表 66 綜合權益變動表 68 綜合現金流量表 69 綜合財務報表附註 71 1 公司資料 公司資料 | --- | --- | |--------------------------------------|---------------------------------------------------| | 董事會 | 核數師 | | 吳小安先生 （主席） | 致同（香港）會計師事務所有限公司 | | 王運先先生 （行政總裁） | 香港 | | 劉同富先生 # | 灣仔 | | 楊明先生 # | 軒尼詩道 28 號 | | 池國華先生 * | 12 樓 | | 王隽先生 * ...

Financial Performance - For the six months ended June 30, 2019, the company reported revenue of RMB 1,154,612,000, a decrease of 26% compared to RMB 1,559,485,000 for the same period in 2018[2]. - Gross profit for the same period was RMB 153,561,000, down from RMB 201,838,000, reflecting a decline of approximately 24%[2]. - The net profit for the period was RMB 31,928,000, a decrease of 44.6% compared to RMB 57,620,000 in the previous year[2]. - Total comprehensive income for the period amounted to RMB 30,444,000, down from RMB 57,703,000, indicating a decline of about 47.3%[2]. - The company reported a basic earnings per share of RMB 0.025, down from RMB 0.045 in the previous year, a decrease of 44.4%[2]. - The company reported a pre-tax profit of RMB 39,383,000 for the six months ended June 30, 2019, a decrease of 48.8% from RMB 76,972,000 in the same period of 2018[14]. - The unaudited net income attributable to the company's owners was approximately RMB 31.93 million for the first half of 2019, a decrease of about 44.6% from RMB 57.62 million in the same period last year[116]. Revenue Breakdown - Gasoline engine revenue for the six months ended June 30, 2019, was RMB 570,653,000, a decrease of 40.5% compared to RMB 959,332,000 for the same period in 2018[34]. - Diesel engine revenue for the same period was RMB 234,064,000, down 23% from RMB 304,107,000 in 2018[34]. - Engine parts and service revenue increased to RMB 349,895,000, up 18.4% from RMB 296,046,000 in the previous year[34]. - The revenue from the engine business segment decreased by approximately 36.3%, from RMB 1.26344 billion in the first half of 2018 to RMB 804.72 million in the first half of 2019[110]. - The revenue from engine parts and services increased by approximately 18.2%, from RMB 296.05 million in the first half of 2018 to RMB 349.90 million in the first half of 2019[111]. Assets and Liabilities - The company's total assets as of June 30, 2019, were RMB 6,423,553,000, compared to RMB 7,175,874,000 at the end of 2018, representing a decrease of approximately 10.5%[5]. - Current liabilities decreased to RMB 2,421,586,000 from RMB 2,867,946,000, a reduction of about 15.5%[7]. - The company's cash and cash equivalents were RMB 157,626,000, down from RMB 223,950,000, reflecting a decline of approximately 29.6%[5]. - The total amount of trade receivables and notes receivable was RMB 403,259,000 as of June 30, 2019, compared to RMB 393,663,000 as of December 31, 2018[52]. - The balance of trade payables and notes payable totaled RMB 1,093,320,000, with trade payables alone amounting to RMB 713,412,000 as of June 30, 2019[66]. Cash Flow - The company's operating cash flow before working capital changes for the six months ended June 30, 2019, was RMB 234,143,000, a decrease of 10.7% compared to RMB 262,402,000 in the same period of 2018[14]. - The net cash used in operating activities for the six months ended June 30, 2019, was RMB 48,154,000, compared to a net cash inflow of RMB 644,258,000 in the same period of 2018, indicating a significant decline[14]. - The cash flow from investing activities showed a net inflow of RMB 189,587,000 for the six months ended June 30, 2019, compared to a net outflow of RMB 593,529,000 in the same period of 2018[16]. - The financing activities resulted in a net cash outflow of RMB 207,757,000 for the six months ended June 30, 2019, compared to a net inflow of RMB 1,430,000 in the same period of 2018[16]. Shareholder Information - Major shareholders include Huachen Investment Holding Co., Ltd. and Xin Hua Investment Holding Co., Ltd., each holding 400,000,000 shares, representing approximately 31.20% of the issued share capital as of June 30, 2019[137][142]. - The total number of issued shares as of June 30, 2019, is 1,282,211,794 shares, which serves as the basis for calculating the percentage holdings[145]. - Wu Xiaoan holds 8,320,041 shares (0.65%) and has trustee and controlled corporation interests in 33,993,385 shares (2.65%) of the company[143]. - Wang Yunxian holds 6,471,143 shares (0.50%) and also has trustee and controlled corporation interests in 33,993,385 shares (2.65%) of the company[144]. Employee and Operational Metrics - The company employed approximately 1,603 staff as of June 30, 2019, down from 2,042 staff a year earlier, with employee costs for the six months amounting to RMB 85.14 million[126]. - Engine sales volume decreased by approximately 38.7%, from about 118,500 units in the first half of 2018 to approximately 72,600 units in the first half of 2019[110]. - The Bx8 engine crankshaft production line saw continuous sales growth in the first half of 2019 compared to the same period in 2018[129]. Compliance and Governance - The company has adopted the corporate governance code as per the listing rules and has complied with all provisions during the six months ending June 30, 2019[153]. - All directors confirmed adherence to the standard code for securities trading during the same period[154]. - The audit committee, including independent non-executive directors, reviewed the accounting principles and discussed financial reporting matters for the six months ending June 30, 2019[155].

Financial Performance - The company's revenue for the year ended December 31, 2018, was RMB 3,050,522 thousand, an increase from RMB 2,956,662 thousand in 2017, representing a growth of approximately 3.5%[22] - The profit attributable to shareholders for the year was RMB 11,086 thousand, a significant decrease from RMB 128,093 thousand in 2017, reflecting a decline of about 91.4%[22] - The company reported a basic and diluted earnings per share of RMB 0.008, down from RMB 0.100 in the previous year, indicating a decrease of 92%[22] - The company recorded total sales of approximately RMB 3.05052 billion in 2018, an increase of about 3.2% compared to RMB 2.95666 billion in 2017, driven by increased sales of the Prince engine and Bx8 crankshafts[30][36] - The company’s net profit attributable to shareholders was approximately RMB 10.72 million in 2018, a decrease of about 91.6% from RMB 128.09 million in 2017[30][41] - The gross profit margin slightly decreased from approximately 11.5% in 2017 to about 11.0% in 2018, despite an increase in gasoline engine profit margins[37] - The company’s financing costs rose by approximately 8.7% to about RMB 73.97 million in 2018, primarily due to increased bank borrowings for asset acquisitions[38] - Other income decreased by approximately 13.5% from RMB 61.56 million in 2017 to RMB 53.22 million in 2018, mainly due to reduced rental income[37] Assets and Liabilities - Non-current assets stood at RMB 3,367,309 thousand, a slight decrease from RMB 3,476,892 thousand in 2017[22] - As of December 31, 2018, the group's cash and cash equivalents were approximately RMB 223.95 million, a decrease from RMB 352.47 million as of December 31, 2017[42] - The total assets of the group as of December 31, 2018, were approximately RMB 7.17587 billion, an increase from RMB 7.06765 billion as of December 31, 2017[43] - The group's total liabilities amounted to approximately RMB 4.19016 billion as of December 31, 2018, compared to RMB 4.07525 billion as of December 31, 2017[43] - The debt-to-equity ratio increased to approximately 1.41 as of December 31, 2018, up from 1.36 as of December 31, 2017, primarily due to increased bank borrowings[47] - The asset-liability ratio was approximately 65.3% as of December 31, 2018, compared to 60.8% as of December 31, 2017, driven by increased bank borrowings for property acquisitions[47] Market and Product Development - The company launched a 1,600cc Prince engine for industrial production, supplying several clients including Brilliance's Zhonghua V7 SUV and Dongfeng Liuzhou's T5 SUV[28] - The company is preparing for the industrial production of an 1,800cc Prince engine for several clients, including Qoros Automotive, aiming to expand its customer base[28] - The company aims to expand its market share in the new energy vehicle sector, which is expected to grow significantly in the future[26] - The company is collaborating with BMW to enhance the specifications of the Prince engine, aiming to meet the upcoming "National VIa Emission Standards" by July 2020[28] - The company aims to enhance market share and expand its product portfolio through technological improvements and the development of high-performance engines to meet existing customer demands[77] Employee and Management - The group employed approximately 1,862 employees as of December 31, 2018, down from approximately 2,070 employees as of December 31, 2017[50] - The company has over 34 years of expertise in automotive technology, with key personnel holding significant academic and industry positions[63] - The management team has extensive experience in the automotive industry, with backgrounds in product development, safety management, and market expansion[65][67][68] - The financial director has over 18 years of experience in the automotive sector and has participated in multiple new plant setups and corporate mergers[68] - The company emphasizes the importance of financial management and capital market relations, with senior executives having substantial experience in these areas[69] Governance and Compliance - The company has established corporate governance practices to meet the requirements of the corporate governance code as per the Listing Rules[185] - The board of directors is responsible for managing the company’s business and affairs, aiming to enhance shareholder value[188] - The board of directors held four regular meetings in 2018, with an attendance rate of 100% for all directors[192] - The company has eight board members, including two executive directors, two non-executive directors, and four independent non-executive directors[196] - All independent non-executive directors meet the independence standards set by the listing rules, with one member having over 16 years of experience in finance and internal control[199] Related Party Transactions - The actual monetary value of related party transactions for the fiscal year ending December 31, 2018, was reported as follows: RMB 552,097,000 for sales of engines and parts to Huachen China and its subsidiaries[142] - The procurement framework agreement with Huachen China allows for the purchase of various engine components, with a transaction cap of RMB 61,650,000 for the fiscal year ending December 31, 2018[145] - The company engaged in multiple related party transactions, complying with the listing rules, with a total of RMB 145,932,000 for procurement of engine parts from Wuliangye and its subsidiaries[142] - The company confirmed full compliance with the non-competition agreements as of December 31, 2018, by its controlling shareholders and Huachen[140] - The independent non-executive directors confirmed that the internal control procedures established by the company are adequate and effective, ensuring that the related party transactions are fair and reasonable[175] Future Outlook - The company anticipates that the sales volume of the automotive industry in China will remain similar to 2018 levels due to trade war uncertainties and economic slowdown[26] - Future outlook remains positive, with management expressing confidence in achieving long-term growth targets despite market challenges[58] - The company is actively seeking potential acquisition opportunities and evaluating the possibility of forming joint ventures to expand its product portfolio and enhance core competitiveness[31]