Company Overview - China Cinda Asset Management Co., Ltd. was established in April 1999 and became the first financial asset management company approved by the State Council to address financial risks and stabilize the financial system[2]. - The company has a core business in non-performing asset management and operates in 30 provinces, autonomous regions, and municipalities in mainland China, with 33 branches and approximately 14,000 employees[2]. - The company aims to create a globally recognized brand in asset management and financial services, focusing on core competitiveness and high-quality development[4]. - The company operates under the supervision of the Ministry of Finance and the National Financial Regulatory Administration of China[12]. - The company’s registered address is in Beijing, with a major operational location in Hong Kong[15]. - The company’s shares are listed on the Hong Kong Stock Exchange under the stock code 01359[16]. Awards and Recognition - In 2023, the company received multiple awards, including the "2023 Outstanding Listed Company" and "China Top 100 Enterprises Award," highlighting its industry leadership and social responsibility[3]. - The company has been recognized with multiple awards, including "Industry Leading Enterprise" and "Outstanding Listed Company" for its commitment to ESG principles[27]. Financial Performance - The annual report for 2023 will be released in late April 2024, providing detailed financial performance and strategic insights[1]. - The total revenue for 2023 was RMB 76,167.8 million, a decrease of 5.5% compared to RMB 80,988.4 million in 2022[18]. - Interest income increased to RMB 33,061.5 million in 2023, up 9.1% from RMB 27,394.9 million in 2022[18]. - The net profit attributable to shareholders for 2023 was RMB 5,820.9 million, down 7.8% from RMB 6,313.4 million in 2022[18]. - The average return on equity decreased to 2.70% in 2023 from 3.38% in 2022[20]. - Total assets as of December 31, 2023, were RMB 1,594,357.4 million, a slight decrease from RMB 1,615,989.0 million in 2022[19]. - The total liabilities decreased to RMB 1,377,201.3 million in 2023 from RMB 1,407,993.9 million in 2022[19]. - The cost-to-income ratio increased to 22.96% in 2023, compared to 19.22% in 2022[20]. - The earnings per share for 2023 was RMB 0.11, down from RMB 0.14 in 2022[20]. - The fair value changes of other financial instruments increased significantly to RMB 11,214.2 million in 2023 from RMB 5,410.4 million in 2022[18]. - The pre-tax profit from continuing operations was RMB 8,186.3 million in 2023, down from RMB 10,457.6 million in 2022[18]. Risk Management - The company is committed to proactive risk management and maintaining a strong compliance culture to safeguard its operations[4]. - The company has strengthened risk management systems, enhancing early identification and warning capabilities for potential risks[26]. - The company implemented a comprehensive risk management framework, ensuring risk preferences are effectively communicated and managed across all levels, with a focus on proactive management and risk control policies[160]. - The company established a comprehensive risk management policy covering eight major risk categories, including credit risk and market risk, to enhance risk management foresight and maintain asset quality[165]. - The company utilized various risk management tools, including economic capital and stress testing, to enhance risk identification, measurement, monitoring, and control capabilities[167]. Strategic Partnerships and Investments - The company has strategic partnerships with major investors, including UBS AG and Standard Chartered Bank, enhancing its market position and operational capabilities[2]. - The company has expanded its financial services through subsidiaries, including Cinda Securities and Cinda Financial Leasing, to diversify its revenue streams[2]. - The company initiated two phases of a 30 billion yuan investment fund for distressed enterprises, which has helped resolve non-performing assets amounting to 258.6 billion yuan[23]. - The company increased its investment in the energy sector by nearly 15 billion yuan and established a 5 billion yuan new energy industry fund[24]. - The company signed nearly 100 strategic agreements through comprehensive marketing activities across over 20 regions in 2023[25]. Shareholder Returns - The board of directors proposed a cash dividend of RMB 0.4576 per 10 shares for the fiscal year 2023, subject to approval at the annual general meeting[13]. - The company has distributed a total of 44.3 billion yuan in dividends to ordinary and preferred shareholders cumulatively[27]. Operational Highlights - The company has ceased operations in the insurance sector after transferring 50.995% of its stake in Happiness Life Insurance Co., Ltd. in 2019, with no discontinued operations reported from 2021 onwards[17]. - The company is focused on leveraging technology and innovation in its operations to enhance efficiency and service delivery[4]. - The company actively participated in the "保交楼" initiative, driving the resumption of over 130 billion yuan in projects, ensuring the delivery of nearly 40,000 residential units[31]. - The company has supported the delivery of nearly 40,000 residential units, contributing to over 100 billion yuan in project resumption[23]. Employee and Governance - The employee count as of December 31, 2023, was 13,908, with 87.3% located in mainland China and 12.7% in Hong Kong and Macau[157]. - The proportion of employees with a bachelor's degree or above was 92%, while those with a master's degree or above accounted for 60%[157]. - The company’s compensation policy links remuneration to operational performance, incorporating sustainability and risk management indicators into the evaluation[158]. - In 2023, the company conducted over 2,100 training sessions, with more than 200,000 participants, enhancing employee professional capabilities and overall quality[159]. Future Outlook - The company aims to contribute to the construction of a financial strong nation through high-quality development actions in 2024, coinciding with its 25th anniversary[35]. - The company plans to enhance its focus on non-performing asset management and actively participate in risk resolution in key areas such as small financial institutions and real estate[181]. - The company aims to innovate its business model and accelerate the construction of an ecological system for non-performing assets[181].

财联社2月23日讯（记者 林坚）继首轮减持计划并未成行之后，中国信达正式减持方正证券1%的股份。 方正证券今日发布公告称，公司股东中国信达已减持8232万股股份，减持金额达到7.84亿元，持股比例由8.62%降至7.62%。此前有市场观点称，随着中国平安实控方正证券，同为股东的中国信达或将逐渐退出方正证券。通过两轮减持，且减持比例仅为1%，这一传闻仍有待考证。 图为方正证券股权结构，中国信达为第三大股东 图为中国信达减持方正证券后的持股情况 具体来看，这是中国信达第二次“官宣”减持计划后正式有所动作。中国信达在成为方正证券股东一年之际，于2022年11月4日就提起减持计划，拟在半年内以集中竞价方式减持公司股份不超过16464.2028万股，约占公司总股本的2%，但到了2023年5月期满，并没有执行减持计划，这意味着首次减持计划并未实际实施。2023年7月，中国信达再度提起减持计划，并于今日正式完成1%的减持。 不过根据方正证券7月的公告，持股8.62%的股东中国信达拟以集中竞价的方式减持不超2%公司股份。减持计划为六个月，即2023年8月23日至2024年2月22日。从结果来看，目前只减持了1%，并非2% ...

Business Structure and Operations - The group reported a significant change in its business structure, having transferred 50.995% equity in Happiness Life Insurance Co., Ltd., resulting in the insurance business no longer being part of the group's operations since 2020[9] - The group has undergone a significant restructuring, with no post-tax profit or loss from discontinued operations reported since 2021[9] - The company has a registered capital structure that includes both H shares and domestic shares, with H shares listed on the Hong Kong Stock Exchange under stock code 01359[8] Financial Overview - Financial data for the first half of 2023 is prepared in accordance with International Financial Reporting Standards, with all figures presented in RMB[9] - The report period ended on June 30, 2023, marking a six-month financial overview for the group[9] - The report includes a detailed analysis of the group's financial statements, highlighting key performance indicators and trends[9] Revenue and Profitability - Total revenue for the six months ended June 30, 2023, was RMB 34,297.7 million, a decrease of 16.5% compared to RMB 41,258.2 million for the same period in 2022[10] - The net profit attributable to shareholders for the period was RMB 4,067.6 million, a decrease of 9.8% from RMB 4,508.2 million in the same period last year[10] - The pre-tax profit for the first half of 2023 was RMB 5,349.5 million, down by RMB 1,682.9 million or 23.9% from the previous year[21] Asset and Liability Management - Total assets as of June 30, 2023, amounted to RMB 1,594,009.3 million, an increase from RMB 1,541,265.1 million year-over-year[12] - The total liabilities as of June 30, 2023, were RMB 1,378,051.9 million, an increase from RMB 1,333,391.1 million year-over-year[12] - Total equity increased by 3.8% from RMB 207,995.1 million to RMB 215,957.4 million as of June 30, 2023[64] Risk Management - The group emphasizes risk management practices to mitigate financial uncertainties in the current economic climate[9] - The company has implemented a three-line defense system for risk management, integrating risk management requirements into business processes[178] - The company established a comprehensive risk management system covering major risk categories, including credit risk, market risk, operational risk, liquidity risk, and reputation risk, with a focus on maintaining systemic risk at bay[180] Market and Economic Outlook - Future outlook indicates a commitment to exploring new market opportunities and potential expansions[9] - The outlook for the second half of 2023 indicates potential economic challenges, with a focus on high-quality development amidst insufficient demand[200] Income and Expense Analysis - The company reported a total impairment loss of RMB 3,111.6 million, a decrease from RMB 5,876.6 million in the previous year[10] - The cost-to-income ratio for the period was 52.24%, significantly higher than 35.14% in the same period last year[13] - The total expenses decreased by RMB 4,964.0 million or 13.2% year-on-year, amounting to RMB 32,620.8 million[21] Non-Performing Assets - The income from the non-performing asset management segment was RMB 18,950.2 million in 2023, down from RMB 30,299.4 million in 2022, representing a decrease in income share from 73.4% to 55.3%[62] - The total amount of non-performing loans measured at amortized cost decreased by 22.5% to RMB 83,707.9 million as of June 30, 2023, from RMB 107,988.7 million as of December 31, 2022[81] - The company’s acquisition of financial non-performing assets from large commercial banks amounted to RMB 4,189.2 million, representing 21.8% of total acquisitions in the first half of 2023, up from 16.5% in the same period of 2022[103] Employee and Organizational Management - The total number of employees as of June 30, 2023, was 13,947, with 88.0% located in mainland China and 12.0% in Hong Kong and Macau[170] - The company maintains a high educational standard among its workforce, with 92% holding a bachelor's degree or above and 61% holding a master's degree or higher[170] Financial Services Performance - The total income for the financial services segment was RMB 15,518.7 million in 2023, compared to RMB 11,083.6 million in 2022, with an income share of 45.2%[62] - In the first half of 2023, the financial services business accounted for 45.2% of the group's total revenue, up from 26.9% in the first half of 2022[133] Capital Adequacy and Financial Stability - As of June 30, 2023, the company's core tier 1 capital adequacy ratio is 11.37%, up from 10.98% on December 31, 2022[199] - The total capital adequacy ratio reached 17.70% on June 30, 2023, compared to 17.25% on December 31, 2022[199]

Financial Performance - Total revenue for the six months ended June 30, 2023, was RMB 34,297.7 million, a decrease of 17% compared to RMB 41,258.2 million for the same period in 2022[8]. - Interest income increased to RMB 16,120.2 million, up 33% from RMB 12,139.5 million in the previous year[8]. - The company reported a net profit attributable to shareholders of RMB 4,067.6 million for the six months ended June 30, 2023, compared to RMB 4,508.2 million in the same period of 2022, reflecting a decrease of 10%[8]. - Total revenue for the first half of 2023 decreased by 16.9% to RMB 34,297.7 million from RMB 41,258.2 million in the same period of 2022, primarily due to declines in inventory sales revenue and fair value changes of non-performing assets[17]. - The company achieved a net profit attributable to shareholders of RMB 4,067.6 million, a decrease of RMB 440.6 million, representing a decline of 9.8% year-on-year[15]. - Earnings per share (EPS) for the first half of 2023 was RMB 0.09, down from RMB 0.12 in the previous year[1]. - The company reported a pre-tax profit of RMB 5,349.5 million for the first half of 2023, down 23.9% from RMB 7,032.4 million in the same period of 2022[17]. - The company reported a significant reduction in credit impairment losses by 46.1% to RMB 3,108.0 million, reflecting improved asset quality management[17]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 1,594,009.3 million, an increase from RMB 1,541,265.1 million at the end of June 2022[9]. - The company's total liabilities were RMB 1,378,051.9 million, up from RMB 1,333,391.1 million in the previous year[9]. - Customer loans and advances increased to RMB 407,505.8 million, compared to RMB 387,546.4 million in the same period last year, representing a growth of 2.5%[9]. - The company's equity attributable to shareholders increased to RMB 192,342.1 million, compared to RMB 188,493.7 million in the previous year[9]. - Total liabilities decreased by 2.1% from RMB 1,407,993.9 million to RMB 1,378,051.9 million during the same period[48]. - Cash and cash equivalents rose by 6.1% from RMB 114,507.5 million to RMB 121,483.1 million between December 31, 2022, and June 30, 2023[52]. Risk Management - The company emphasizes risk management and capital management strategies in its operations[2]. - The company aims to maintain a stable risk preference while pursuing balanced development in profitability, quality, and scale[141]. - The risk management system has been enhanced with tools such as economic capital, risk limits, and stress testing to improve risk identification and control capabilities[145]. - The company has established a comprehensive risk management policy covering credit risk, market risk, operational risk, liquidity risk, and other major risks[144]. - The company implemented a credit risk management framework focusing on improving asset quality and enhancing risk control measures, particularly in problematic institutions and assets[148]. Corporate Governance - The board of directors includes both executive and non-executive members, ensuring a diverse governance structure[1]. - The company has established a comprehensive risk management system that includes a three-line defense structure, effectively managing risks within acceptable limits[182]. - The board has ensured compliance with Hong Kong listing rules, achieving the requirement for independent non-executive directors by March 26, 2023[177]. - The company has committed to enhancing its corporate governance mechanisms and risk management capabilities, aiming for modernization and professionalization[175]. Market Environment - The global economic environment remains challenging, with ongoing geopolitical conflicts and a slowdown in global trade and investment[12]. - China's GDP grew by 5.5% in the first half of 2023, with significant recovery in consumption demand and investment[12]. - The company is focusing on enhancing its financial stability and risk management amid ongoing regulatory reforms in the financial sector[14]. Business Strategy - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[8]. - The company plans to continue expanding its financial services and non-performing asset management operations to enhance overall profitability[47]. - The company is focusing on providing comprehensive financial solutions to address issues in the real economy and problem enterprises, leveraging opportunities in structural reforms and capital market reforms[100]. - The company aims to innovate its business model and build an inclusive ecosystem for non-performing assets[159]. Employee and Workforce - The total number of employees as of June 30, 2023, reflects an increase from 13,717 in December 2022, indicating growth in workforce size[135]. - The proportion of employees with a bachelor's degree or above is 92%, while those with a master's degree or above account for 61%[136]. - The company has implemented a deferred payment and clawback mechanism in its compensation policy to align performance pay with business risks[137]. Financial Services - The financial services business accounted for 45.2% of the total revenue in the first half of 2023, up from 26.9% in the first half of 2022, indicating a significant increase in contribution[107]. - The pre-tax profit from financial services represented 61.9% of the total pre-tax profit in the first half of 2023, compared to 42.4% in the first half of 2022, showing a strong growth in profitability[107]. - Nanshan Bank reported a revenue of RMB 10,238.6 million for the first half of 2023, a 65.5% increase from RMB 6,183.7 million in the same period of 2022[108]. Legal and Compliance - The company has ongoing legal proceedings with potential liabilities amounting to RMB 2,406.0 million as of June 30, 2023, with provisions made for estimated liabilities of RMB 6.7 million[71]. - There were no significant lawsuits or arbitration matters that adversely affected the company's business, financial status, or operating performance during the reporting period[187].

Financial Performance - In 2022, the total revenue of China Cinda was RMB 80,988.4 million, a decrease of 17.1% compared to RMB 97,731.0 million in 2021[16]. - The profit attributable to shareholders of the company for the year was RMB 6,313.4 million, a decline of 47.5% from RMB 12,061.7 million in 2021[16]. - The pre-tax profit from continuing operations was RMB 10,457.6 million, a decrease of 46.0% compared to RMB 19,378.9 million in 2021[16]. - The net profit from continuing operations for the year was RMB 7,231.3 million, down 44.5% from RMB 13,000.5 million in 2021[16]. - The average return on equity decreased to 3.38% in 2022 from 7.15% in 2021[19]. - The cost-to-income ratio increased to 44.02% in 2022, compared to 32.15% in the previous year[19]. - The company achieved a net profit attributable to shareholders of 6.31 billion yuan in 2022, with an average return on equity of 3.38%[32]. - The total costs and expenses were RMB (79,466.6) million, a decrease of 5.0% from RMB (84,148.5) million in 2021[16]. - The impairment loss on assets was RMB (13,258.0) million, an increase from RMB (11,722.9) million in 2021[16]. Business Operations - The company’s core business focuses on non-performing asset management, which remains its primary revenue driver[2]. - The company maintained a leading position in the non-performing asset management sector, focusing on asset acquisition and disposal strategies[22]. - The company is actively participating in risk resolution pilot projects for small and medium-sized financial institutions, responding to national and regulatory concerns[22]. - The company aims to enhance its business layout in new energy and new economy sectors, aligning with national development strategies[23]. - The company is committed to supporting the delivery of 35,000 residential properties to ensure social and financial stability[23]. - The company is focused on building a competitive ecosystem centered around strategic clients and leveraging digital technology for enhanced risk management[24]. - The company has established a five-year plan for talent development, emphasizing the importance of human resources in maintaining competitive advantage[24]. Asset Management - As of the end of 2022, the total assets of the company reached RMB 1,615.99 billion, an increase from RMB 1,564.28 billion in 2021[17]. - The total liabilities of the company were RMB 1,407.99 billion, up from RMB 1,362.50 billion in 2021[17]. - The company acquired 74.2 billion yuan of operating non-performing loans in 2022, marking a 40.8% increase year-on-year, maintaining a leading position in the public market[33]. - The company participated in the resolution of non-performing assets totaling nearly 150 billion yuan for multiple financial institutions[33]. - The total amount of non-performing debt assets measured at amortized cost as of December 31, 2022, was RMB 107,988.7 million, a decrease of 25.3% from RMB 144,543.0 million on December 31, 2021[100]. - The net amount of non-performing loans was RMB 341,255.4 million, slightly up from RMB 340,200.6 million in 2021[113]. Risk Management - The company is committed to risk management and has outlined its strategies in the management discussion section of the report[12]. - The company is focused on enhancing risk management and asset quality, with a comprehensive risk management system in place[36]. - The company established a comprehensive risk management system covering seven major risk categories, including credit risk and market risk, and implemented a risk limit management plan[188]. - The company updated its recovery plan for 2022 to address extreme risk challenges, enhancing its systemic risk control mechanisms[189]. - The company improved its risk management tools and systems, launching a risk monitoring platform and developing a customer default probability prediction system[190]. - The company emphasized a proactive risk management approach, continuously optimizing risk monitoring and control policies to maintain asset quality[182]. Corporate Governance - The board of directors approved the 2022 annual report on March 28, 2023, with all 12 attending directors present[11]. - China Cinda's financial reports for 2022 were audited by Ernst & Young, receiving standard unqualified opinions[11]. - The company has strategic investors including the National Social Security Fund, UBS AG, and Standard Chartered Bank, enhancing its capital structure[2]. Market Position and Recognition - The company was awarded multiple accolades in 2022, including the "Most Investment Value High-Quality Development Listed Company" and "Best Operational Management Award" at the China Top 100 Enterprises Forum[3]. - The company aims to enhance its market presence and expand its financial services, leveraging its subsidiaries in various sectors[2]. Environmental and Social Responsibility - The company is actively expanding its green finance initiatives, including green funds and green bonds, to support environmental sustainability[27]. - The company is committed to serving the real economy and mitigating financial risks while adhering to the principles of sustainable development[31].

Financial Performance - In 2022, the total revenue was RMB 80,988.4 million, a decrease of 17.1% compared to RMB 97,731.0 million in 2021[19]. - The net profit attributable to shareholders was RMB 6,313.4 million in 2022, down from RMB 12,061.7 million in 2021, a decline of 47.7%[19]. - The pre-tax profit from continuing operations was RMB 10,457.6 million in 2022, down from RMB 19,378.9 million in 2021, a decrease of 46.0%[19]. - The impairment losses on assets were RMB (13,258.0) million in 2022, compared to RMB (11,722.9) million in 2021, indicating an increase in impairment[19]. - The fair value changes of non-performing debt assets were RMB 11,284.3 million in 2022, down from RMB 15,475.8 million in 2021, a decline of 27.0%[19]. - The company reported a return on equity (ROE) of 3.38% and a return on assets (ROA) of 0.45% for the year[42]. - The average return on equity decreased to 3.38% in 2022 from 7.15% in 2021[21]. - The cost-to-income ratio increased significantly to 44.02% in 2022, compared to 32.15% in 2021[21]. - The company's total expenses decreased by 5.6% to RMB 79,466.6 million from RMB 84,148.5 million in 2021[43]. - The impairment loss of financial assets measured at amortized cost increased by 49.9% from RMB 4,334.3 million in 2021 to RMB 6,498.3 million in 2022[69]. Asset Management - The company’s core business focuses on the management of non-performing assets, which is critical for its operations[2]. - The non-performing asset management business accounted for 70.5% of the group's total revenue in 2022, down from 78.9% in 2021, and contributed 41.0% to pre-tax profit[75]. - The company maintained a leading position in the non-performing asset business, focusing on asset acquisition and disposal strategies[24]. - The total amount of non-performing loans purchased from financial institutions decreased by 28.7% to RMB 4,516.8 million, and from non-financial institutions decreased by 25.1% to RMB 103,471.9 million, resulting in a total decrease of 25.3% to RMB 107,988.7 million[89]. - The company acquired RMB 53,665.6 million in real estate assets, accounting for 47.4% of total acquisitions in 2022, up from 42.0% in 2021[120]. - The company’s acquisition of financial non-performing assets in 2022 was RMB 55,682.2 million, an increase from RMB 48,564.1 million in 2021[107]. - The company’s operational model for non-performing assets includes acquisition and restructuring strategies[110]. - The net amount of acquired operating non-performing assets reached RMB 241,034.2 million, representing a 16.9% increase from RMB 205,666.8 million in 2021[114]. Strategic Initiatives - The company plans to focus on market expansion and new product development in the upcoming fiscal year[18]. - The company is committed to improving risk management strategies to mitigate potential financial uncertainties[18]. - The company aims to maintain stability in the financial system and promote the reform and development of state-owned banks and enterprises[2]. - The company is enhancing its digital transformation efforts, aiming to improve risk management and decision-making through data-driven approaches[26]. - The company plans to continue focusing on stable operations and innovative development to enhance long-term value for investors[38]. - The company aims to strengthen its scientific judgment, professional management, and efficient execution capabilities for sustainable growth[38]. - The company is committed to implementing national policies to stabilize the economy and ensure the well-being of its stakeholders[40]. - The company will focus on increasing investment in non-performing asset management to solidify its core position in this area[185]. Awards and Recognition - The company received multiple awards in 2022, including the "Most Investment Value High-Quality Development Listed Company" and "Top 100 Enterprises in China" awards[3]. - The company has been recognized in various ESG rankings, indicating its commitment to sustainable practices[3]. Corporate Governance - The board of directors held its fourth meeting of 2023 on March 28, 2023, to approve the annual report for 2022[14]. - The current chairman and executive director, Zhang Weidong, has been in his position since June 2022, with a background in various financial roles since 1992[196]. - Liang Qiang has served as the executive director and president since October 2022, with extensive experience in the company since 1999[197]. - Zhao Limin has been an executive director and vice president since May 2022, previously holding multiple managerial positions within the company[198]. - The board of directors includes a mix of executive and non-executive members, with terms ranging from 2022 to 2025[194]. Risk Management - The company established a comprehensive risk management system covering seven major risk categories, including credit risk and market risk, and implemented a risk limit management plan[170]. - The company updated its recovery plan for 2022 to address extreme risk challenges, enhancing its systemic risk control mechanisms[171]. - The company actively promotes the construction of risk management information systems, successfully launching a risk monitoring platform and developing predictive systems for customer default probabilities[173]. - The company emphasizes a balanced development of benefits, quality, and scale while maintaining a stable risk appetite and ensuring capital adequacy in compliance with regulatory requirements[167]. - The company is committed to enhancing customer experience and optimizing service processes in both online and offline channels[138]. Financial Position - As of December 31, 2022, the total assets of the company reached RMB 1,615.99 billion, an increase from RMB 1,564.28 billion in 2021[20]. - The total liabilities amounted to RMB 1,407.99 billion, up from RMB 1,362.50 billion in 2021[20]. - The company's equity attributable to shareholders increased by 5.8% from RMB 178,800.8 million in 2021 to RMB 188,205.7 million in 2022[77]. - The company's cash and deposits with central banks decreased by 7.6% from RMB 18,045.7 million in 2021 to RMB 16,677.4 million in 2022[77]. - The company's total liabilities increased to RMB 1,407,993.9 million in 2022, up from RMB 1,362,503.8 million in 2021, marking a growth of 3.3%[77]. Employee Development - The employee count as of December 31, 2022, was 13,717, a decrease from 14,723 in 2021, with a notable increase in the proportion of employees with bachelor's degrees or higher to 92%[162]. - The company completed over 3,300 training sessions in 2022, benefiting more than 300,000 participants, to support business transformation and high-quality development[164]. Digital Transformation - The company is advancing its "Digital Cinda" strategy, achieving significant progress in data governance and technology empowerment[158]. - The risk monitoring platform was successfully launched, enabling proactive risk identification and supporting dynamic risk monitoring and assessment[159].

Financial Performance - The total revenue for the first half of 2022 was RMB 10.5 billion, representing a year-on-year increase of 15%[10] - The net profit attributable to shareholders for the same period was RMB 2.1 billion, up 20% compared to the previous year[10] - Total revenue for the six months ended June 30, 2022, was RMB 41,258.2 million, a slight decrease of 0.3% compared to RMB 41,401.6 million in the same period of 2021[11] - The net profit attributable to shareholders for the first half of 2022 was RMB 4,508.2 million, down 32.5% from RMB 6,687.4 million in the same period of 2021[11] - The company reported a pre-tax profit from continuing operations of RMB 7,032.4 million, down from RMB 9,747.7 million in the same period of 2021, reflecting a decline of 28.0%[11] - The company achieved a net profit attributable to shareholders of RMB 4,508.2 million, a decrease of RMB 2,179.2 million, or 32.6% year-on-year[18] - The annualized return on average equity (ROAE) for the period was 5.75%, down from 7.49% in the same period last year[18] - The annualized return on average assets (ROAA) was 0.64%, compared to 0.91% in the previous year[18] - The cost-to-income ratio increased to 35.14%, up from 33.41% year-on-year[18] - Earnings per share (EPS) for the period was RMB 0.12, down from RMB 0.15 in the same period last year[18] - The company reported a pre-tax profit of RMB 7,032.4 million in H1 2022, down 27.9% from RMB 9,747.7 million in H1 2021[46] Asset and Liability Management - The company reported an increase in total assets to RMB 150 billion, a growth of 12% year-on-year[10] - The total assets as of June 30, 2022, amounted to RMB 1,541,265.1 million, a decrease from RMB 1,604,243.4 million at the end of June 2021[12] - The total liabilities decreased to RMB 1,333,391.1 million from RMB 1,408,408.7 million year-over-year, indicating a reduction of approximately 5.3%[12] - The company's equity attributable to shareholders rose to RMB 188,493.7 million, compared to RMB 172,822.4 million in the same period last year, marking a growth of 9.5%[12] - The total assets of the company were RMB 142.9 billion, a decrease from RMB 147.3 billion as of December 31, 2021[122] - The total liabilities decreased by 2.1% to RMB 1,333,391.1 million as of June 30, 2022, compared to RMB 1,362,503.8 million at the end of 2021[51] Revenue Sources and Business Segments - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[10] - Revenue from inventory sales rose by 55.2% to RMB 7,039.0 million, up from RMB 4,534.4 million[21] - The financial services segment contributed 26.9% to total revenue in the first half of 2022, up from 24.2% in the same period of 2021[50] - The financial services segment's pre-tax profit accounted for 42.4% of total pre-tax profit in the first half of 2022, compared to 28.2% in the first half of 2021[50] - The revenue from the non-performing asset management business accounted for 73.4% of total revenue in the first half of 2022, compared to 76.4% in the first half of 2021[76] Risk Management - Risk management strategies have been strengthened, with a focus on reducing non-performing assets by 5% by the end of 2022[10] - The company is actively engaging in the disposal of non-performing assets to mitigate risks associated with rising bad loans[17] - The company emphasizes the importance of supporting small and micro enterprises and promoting infrastructure investment to stabilize the economy[16] - The company continues to focus on high-quality development and risk management amid complex economic conditions[18] - The company has focused on prudent investment and increased risk resolution efforts, leading to a reduction in the scale of non-performing loans[65] - The company aims to maintain stable profitability and capital growth while ensuring compliance with regulatory capital adequacy requirements[146] Investment and Development - The company has allocated RMB 500 million for research and development of new technologies in financial services[10] - New product launches in the asset management sector are expected to contribute an additional RMB 1 billion in revenue by the end of 2022[10] - The company is exploring potential mergers and acquisitions to enhance its service offerings and market reach[10] - The company aims to enhance its wealth management and fintech services as part of its strategic business directions[118] - The company is committed to optimizing its asset structure and promoting business transformation[194] Corporate Governance and Shareholder Information - The company emphasizes strict compliance with corporate governance principles and enhances risk management capabilities[189] - The actual controller of the company remains the Ministry of Finance, which oversees macroeconomic policies related to fiscal revenue and expenditure[172] - The company has a total of 1 preferred shareholder, CCB Nominees Limited, which holds 100% of the 2021 overseas preferred shares, totaling 85,000,000 shares[175] - The company approved a dividend distribution for the 2021 overseas preferred shares at a rate of 4.40%, with a total payout of $74.8 million (after tax) scheduled for November 3, 2022[177] - The company held its 2021 annual general meeting on June 28, 2022, approving ten resolutions including the 2021 financial statements and profit distribution plan[190] Employee and Operational Insights - The number of employees as of June 30, 2022, was 13,648, with 87.2% located in mainland China and 12.8% in Hong Kong and Macau[140] - Employees with a bachelor's degree or above accounted for 92%, while those with a master's degree or above made up 60% of the workforce[140] - The company has established a comprehensive risk management system that includes a three-line defense structure[196] - The internal audit system has been implemented to enhance the quality and efficiency of internal audits, focusing on risk management and compliance[199]

Achievements and Awards - In 2021, China Cinda Asset Management reported significant achievements, including winning multiple awards such as "Best Listed Company Award" and "Best ESG Practice Listed Company" from various financial institutions[4]. - The company has undergone a transformation since its establishment in 1999, becoming the first financial asset management company listed on the Hong Kong Stock Exchange in December 2013[4]. Business Operations - The company operates in 30 provinces and municipalities in mainland China, with 33 branches and approximately 15,000 employees[4]. - China Cinda's core business focuses on distressed asset management, which remains a key revenue driver[4]. - The company aims to expand its financial services and distressed asset management operations, leveraging its extensive network and expertise[4]. - The company has introduced strategic investors, including the National Social Security Fund and UBS AG, enhancing its capital structure and market position[4]. Financial Performance - The total revenue for 2021 was RMB 97,731 million, a decrease of 2.4% compared to RMB 100,134 million in 2020[20]. - The net profit for the year was RMB 13,000.5 million, down from RMB 14,737.3 million in 2020, reflecting a decline of 11.8%[20]. - The profit before tax from continuing operations was RMB 19,378.9 million, an increase of 18.0% from RMB 16,309.3 million in 2020[20]. - The net profit attributable to shareholders was RMB 12,061.7 million, a decrease of 9.0% compared to RMB 13,247.9 million in 2020[20]. - The interest income for 2021 was RMB 25,100.8 million, an increase of 5.0% from RMB 23,899.2 million in 2020[20]. - The total asset impairment loss was RMB (11,722.9) million, a decrease from RMB (14,096.8) million in 2020, indicating improved asset quality[20]. - The cost-to-income ratio increased to 32.15% in 2021, up from 25.46% in 2020[22]. - Earnings per share decreased to RMB 0.29 in 2021 from RMB 0.32 in 2020[22]. Asset Management - The company disposed of over RMB 50 billion in non-performing assets for four consecutive years, with disposal gains exceeding RMB 10 billion in 2021[26]. - New investments amounted to RMB 39 billion, maintaining a leading market share in the public market despite a significant decline in the supply of non-performing loans[26]. - The company acquired operating non-performing assets with new investments totaling RMB 50.42 billion, with a net income of RMB 13.42 billion from asset disposals[34]. - The non-performing asset management business accounted for 78.9% of total revenue in 2021, up from 70.5% in 2020[113]. Risk Management - The company emphasizes risk management and capital management as critical components of its operational strategy[4]. - The company implemented a risk management system that effectively controlled the growth of non-performing assets[28]. - The company has strengthened its risk management framework, emphasizing proactive management and maintaining a stable risk appetite[179]. - The company focused on strengthening its credit risk management framework, optimizing internal rating systems, and enhancing client and project entry standards to better control credit risk exposure[186]. Corporate Governance and Compliance - The financial report for 2021 was audited by Ernst & Young, confirming its compliance with both Chinese and international auditing standards[12]. - The company emphasizes the importance of compliance management and governance structure improvement to enhance operational effectiveness[45]. - The company is committed to improving its internal control and compliance management to enhance risk management levels[34]. Social Responsibility - The company donated over RMB 20 million to poverty alleviation efforts and helped sell agricultural products worth over RMB 12 million in 2021[30]. Digital Transformation - The company is advancing its digital transformation with the establishment of a dedicated data governance committee and the creation of a proprietary database for non-performing assets[34]. - The company initiated a new core system project in 2021 as part of its "Digital Xinda" information technology strategy[170]. Employee Development - In 2021, the company conducted over 2,900 training sessions with more than 330,000 participants, enhancing employee capabilities to support sustainable development[178]. - The employee distribution as of December 2021 included 88.7% from mainland China and 11.3% from Hong Kong and Macau[175].

Financial Performance - The company reported a total revenue of RMB 10.5 billion for the first half of 2021, representing a year-on-year increase of 15%[11]. - The net profit attributable to shareholders for the same period was RMB 3.2 billion, reflecting a growth of 20% compared to the previous year[11]. - Total revenue for the six months ended June 30, 2021, was RMB 41,401.6 million, a decrease of 9.4% compared to RMB 45,819.9 million in the same period of 2020[12]. - Net profit attributable to shareholders for the period was RMB 6,687.4 million, an increase of 5.5% from RMB 6,340.7 million in the previous year[12]. - The company reported a net profit of RMB 41,401.6 million for the first half of 2021, a decrease of 23.4% from RMB 54,137.4 million in the same period of 2020[77]. - The pre-tax profit for the first half of 2021 was RMB 6,987.0 million, representing a pre-tax profit margin of 22.1%, consistent with the same margin in 2020[52]. Asset and Liability Management - The total assets of the company reached RMB 150 billion as of June 30, 2021, an increase of 10% from the end of 2020[11]. - The total assets as of June 30, 2021, amounted to RMB 1,604,243.4 million, an increase of 4.7% from RMB 1,531,817.5 million year-over-year[13]. - The total liabilities increased to RMB 1,408,408.7 million, compared to RMB 1,339,643.1 million in the same period last year, marking a rise of 5.1%[13]. - The equity attributable to shareholders was RMB 172,822.4 million, an increase of 3.9% from RMB 167,200.0 million year-over-year[13]. - The total liabilities of the group as of June 30, 2021, were RMB 1,324,465.4 million, an increase from RMB 1,248,494.8 million at the end of 2020[69]. Investment and Development - The company is investing RMB 500 million in new technology development aimed at enhancing asset management capabilities[11]. - The company plans to launch a new financial product in Q4 2021, targeting a market size of RMB 2 billion[11]. - The company is exploring potential mergers and acquisitions to strengthen its position in the asset management sector[11]. - The company aims to enhance its core business and compliance management to ensure sustainable development amidst increasing competition in the non-performing asset market[18]. Risk Management - Risk management strategies have been enhanced, focusing on mitigating impacts from the ongoing COVID-19 pandemic[11]. - The company is committed to risk prevention and management, aligning with regulatory requirements to address financial risks[18]. - The company emphasizes a risk management philosophy of "proactive management and safeguarding the bottom line," maintaining overall asset quality stability[147]. - The company has established a comprehensive risk management system covering major risk categories, continuously improving its policies[150]. Market and Economic Outlook - The management has provided a positive outlook for the second half of 2021, expecting a revenue growth of 12% to 15%[11]. - The economic environment remains complex, with challenges in the non-performing asset industry, but the company maintains strategic focus and operational stability[19]. - The Chinese economy showed resilience with a GDP growth of 12.7% year-on-year in the first half of 2021, supporting the company's performance[17]. Employee and Corporate Governance - As of June 30, 2021, the company had 12,783 employees, with 10,934 in mainland China and 1,849 in Hong Kong and Macau[142]. - The board consists of 12 members, with independent non-executive directors making up one-third of the total[190]. - The company emphasizes compliance with corporate governance principles and enhances its risk management framework[187]. Shareholder and Dividend Information - The company approved a cash dividend of 1.041 RMB per 10 shares for the 2020 fiscal year, totaling approximately 3.973 billion RMB[200]. - The company will not declare an interim dividend for 2021 and will not convert capital reserves into share capital[200]. - The major shareholder, the Ministry of Finance, holds approximately 58.00% of the total issued shares[168].

[Company Overview](index=6&type=section&id=Company%20Overview) China Cinda Asset Management Co., Ltd. (China Cinda), established in 1999, is China's first financial asset management company, primarily engaged in non-performing asset management and financial services, listed on the Hong Kong Stock Exchange in December 2013 - China Cinda Asset Management Co., Ltd. (China Cinda), established in **1999**, is China's first financial asset management company, primarily engaged in non-performing asset management and financial services, and was listed on the Hong Kong Stock Exchange main board on **December 12, 2013**[4](index=4&type=chunk) Company Basic Information | Item | Content | | :--- | :--- | | **Legal Chinese Name** | 中國信達資產管理股份有限公司 | | **Legal English Name** | China Cinda Asset Management Co., Ltd. | | **H-share Listing Exchange** | The Stock Exchange of Hong Kong Limited | | **H-share Stock Code** | 01359 | | **Overseas Preferred Share Stock Code** | 04607 | | **Legal Representative** | Zhang Ziai | | **Registered Address** | Building 1, No. 9 Naoshikou Street, Xicheng District, Beijing, China | | **International Internet Address** | www.cinda.com.cn | [Financial Summary](index=7&type=section&id=4.%20Financial%20Summary) The company maintained stable asset size in 2020, achieving a 1.5% year-over-year increase in net profit attributable to shareholders, significantly impacted by the disposal of Happiness Life Insurance equity Key Financial Data for 2020 | Indicator | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Assets (Million RMB)** | 1,518,083.6 | 1,513,230.0 | +0.3% | | **Total Revenue from Continuing Operations (Million RMB)** | 100,134.0 | 96,146.9 | +4.1% | | **Profit for the Year (Million RMB)** | 14,737.3 | 15,018.2 | -1.9% | | **Net Profit Attributable to Shareholders of the Company (Million RMB)** | 13,247.9 | 13,052.9 | +1.5% | | **Average Return on Equity (ROE)** | 8.26% | 8.56% | -0.30pp | | **Average Return on Assets (ROA)** | 0.97% | 1.00% | -0.03pp | | **Earnings Per Share (RMB)** | 0.32 | 0.31 | +3.2% | - In 2020, the Group's asset scale remained stable, with net profit attributable to shareholders of the Company achieving a **1.5% year-over-year growth**[18](index=18&type=chunk) - Performance was significantly impacted by discontinued operations (disposal of Happiness Life Insurance equity), which contributed **RMB 3.75 billion** in after-tax profit[18](index=18&type=chunk)[38](index=38&type=chunk) - The basis of accounting standards for financial data changed: IFRS 9 adopted since 2018, previously IAS 39[17](index=17&type=chunk) - Due to the disposal of Happiness Life Insurance equity, the insurance business was classified as discontinued operations, with financial data for 2019 and 2020 separately presented for continuing and discontinued operations[17](index=17&type=chunk) [Chairman's Statement](index=13&type=section&id=5.%20Chairman's%20Statement) Chairman Zhang Ziai reviewed 2020 performance, highlighting a 0.3% increase in total assets to RMB 1.52 trillion and a 1.5% rise in net profit attributable to shareholders to RMB 13.25 billion despite the pandemic - Chairman Zhang Ziai summarized the **2020** performance, stating that despite the impact of the pandemic, the Group's total assets reached **RMB 1.52 trillion**, a **0.3% year-over-year increase**, and net profit attributable to shareholders reached **RMB 13.25 billion**, a **1.5% year-over-year increase**[24](index=24&type=chunk) - In 2020, the company focused on its core business of resolving financial risks, deeply participating in the resolution of risks for small and medium-sized financial institutions and the bankruptcy reorganization of large enterprises, while utilizing financial services to support the resumption of work and production in the real economy[24](index=24&type=chunk) - Progress was made in corporate governance, with the company receiving the "Best Corporate Governance Bank" award from Global Finance magazine[25](index=25&type=chunk) - The company completed the equity transfer of Happiness Life Insurance and steadily advanced the spin-off listing of Cinda Securities and the construction of "Digital Cinda"[25](index=25&type=chunk) [President's Statement](index=16&type=section&id=6.%20President's%20Statement) President Zhang Weidong emphasized the group's focus on core non-performing asset business, with new investments of RMB 45.63 billion in acquisition and management, while actively exploring new business models and advancing digital transformation - President Zhang Weidong emphasized that in 2020, the Group focused on its core responsibilities and main business, consolidating its advantages in non-performing asset business, with new investments of **RMB 45.63 billion** in acquisition and management businesses, maintaining its industry-leading position[27](index=27&type=chunk) - The company actively promoted business transformation, exploring new business models such as non-performing asset judicial auction funds, private equity secondary market transactions, and mergers and acquisitions, focusing on problematic institutions and assets[27](index=27&type=chunk) - Looking ahead to 2021, the Group will adhere to the philosophy of "professional operation, efficiency first, value creation," optimize its asset structure, accelerate business transformation, improve turnover efficiency, and promote the construction of "Digital Cinda"[27](index=27&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=8.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's financial performance, operational highlights, risk management, and capital management in the context of the macroeconomic and regulatory environment [Macroeconomic and Regulatory Environment](index=19&type=section&id=8.1%20Macroeconomic%20and%20Regulatory%20Environment) In 2020, while the global economy faced a deep recession due to COVID-19, China achieved 2.3% positive growth, with domestic policies focusing on stability and financial supply-side reform, accelerating changes in the non-performing asset market - In 2020, China was the only major economy globally to achieve positive economic growth, with its full-year GDP increasing by **2.3% year-over-year**[34](index=34&type=chunk) - Regulatory authorities orderly advanced the resolution of high-risk financial institutions and corporate debt risks, intensifying efforts in non-performing asset disposal[35](index=35&type=chunk) - The non-performing asset market saw an expansion of participants, with the approval of the fifth national AMC and the emergence of the first foreign-controlled local AMC[35](index=35&type=chunk) - Non-performing asset disposal channels broadened, with pilot programs for single-account transfers of corporate non-performing loans and bulk transfers of individual non-performing loans, alongside the rapid development of online trading platforms[35](index=35&type=chunk) [Financial Statement Analysis](index=21&type=section&id=8.2%20Financial%20Statement%20Analysis) In 2020, the Group achieved a net profit attributable to shareholders of RMB 13.25 billion, a 1.5% year-over-year increase, with total revenue from continuing operations growing 4.1% to RMB 100.13 billion, despite a significant 58.0% increase in asset impairment losses [Group Operating Performance](index=21&type=section&id=8.2.1%20Group%20Operating%20Performance) The Group's net profit attributable to shareholders grew 1.5% year-over-year to RMB 13.25 billion in 2020, with ROE at 8.26%, while pre-tax profit from continuing operations declined 15.4% due to a 58.0% surge in asset impairment losses, with after-tax profit from discontinued operations contributing significantly Consolidated Income Statement Overview (Million RMB) | Item | 2020 | 2019 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue from Continuing Operations** | 100,134.0 | 96,146.9 | 4.1 | | **Asset Impairment Losses** | (14,096.8) | (8,924.2) | 58.0 | | **Interest Expense** | (39,618.5) | (44,366.6) | (10.7) | | **Pre-tax Profit from Continuing Operations** | 16,309.3 | 19,272.4 | (15.4) | | **After-tax Profit from Discontinued Operations** | 3,752.0 | 1,500.4 | 150.1 | | **Net Profit Attributable to Shareholders of the Company** | 13,247.9 | 13,052.9 | 1.5 | - Asset impairment losses significantly increased by **58.0%**, primarily due to impairment losses on non-performing debt assets measured at amortized cost, which rose from **RMB 3.54 billion to RMB 7.66 billion**, reflecting the impact of macroeconomic downturn and the pandemic[65](index=65&type=chunk)[66](index=66&type=chunk) - Interest expense decreased by **10.7% year-over-year**, mainly benefiting from lower market interest rates and the Group's optimized liability structure, with borrowing interest expense decreasing by **17.4%**[62](index=62&type=chunk) [Summary of Group Financial Position](index=37&type=section&id=8.2.2%20Summary%20of%20Group%20Financial%20Position) As of year-end 2020, the Group's total assets were RMB 1.52 trillion, a slight 0.3% year-over-year increase, with financial assets at fair value through profit or loss growing 8.4% and bonds payable increasing 16.7%, reflecting an optimized financing structure Key Items of Consolidated Statement of Financial Position (Million RMB) | Item | December 31, 2020 | December 31, 2019 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | 1,518,083.6 | 1,513,230.0 | 0.3 | | Financial assets at fair value through profit or loss | 446,916.7 | 412,164.6 | 8.4 | | Loans and advances to customers | 353,456.3 | 337,859.1 | 4.6 | | Financial assets at amortized cost | 220,233.0 | 227,645.1 | (3.3) | | **Total Liabilities** | 1,323,041.2 | 1,324,819.5 | (0.1) | | Borrowings | 556,912.1 | 536,591.3 | 3.8 | | Bonds Payable | 355,777.5 | 304,849.6 | 16.7 | | Deposits from customers | 273,644.2 | 275,205.8 | (0.6) | | **Total Equity** | 195,042.4 | 188,410.5 | 3.5 | - The total amount of non-performing debt assets measured at amortized cost decreased by **3.7%** to **RMB 187.4 billion**, mainly due to a decrease in the scale of new acquisitions during the year[92](index=92&type=chunk) - Simultaneously, out of prudence, its impairment provisions significantly increased by **43.6%**[93](index=93&type=chunk) - The balance of bonds payable increased by **16.7%**, primarily due to the company's issuance of **RMB 55.05 billion** in asset-backed securities and **RMB 8.0 billion** in Tier 2 capital bonds, reflecting the company's strategy to optimize its liability structure and expand direct financing[98](index=98&type=chunk) [Business Review](index=47&type=section&id=8.3%20Business%20Review) The Group's operations are primarily divided into non-performing asset management and financial services, with the former contributing 70.5% of total revenue and 54.1% of pre-tax profit, while the latter's profit share significantly increased due to the disposal of Happiness Life Insurance equity 2020 Segment Performance Overview | Business Segment | Total Revenue (Million RMB) | Revenue Share (%) | Pre-tax Profit (Million RMB) | Pre-tax Profit Share (%) | | :--- | :--- | :--- | :--- | :--- | | **Non-performing Asset Management** | 80,100.1 | 70.5 | 11,503.1 | 54.1 | | **Financial Services** | 34,371.6 | 30.3 | 9,848.1 | 46.3 | | **Total** | 113,555.9 | - | 21,281.8 | - | - The pre-tax profit share of the non-performing asset management segment decreased from **78.0%** in 2019 to **54.1%**, mainly due to the recognition of asset impairment losses[80](index=80&type=chunk) - The pre-tax profit share of the financial services segment significantly increased from **23.7%** in 2019 to **46.3%**, primarily benefiting from the gain on disposal of Happiness Life Insurance equity and improved operating efficiency of various financial subsidiaries[80](index=80&type=chunk) [Non-performing Asset Management Business](index=48&type=section&id=8.3.1%20Non-performing%20Asset%20Management%20Business) As a core business, non-performing asset management covers non-performing debt assets, debt-to-equity assets, and other non-performing asset businesses, with net non-performing debt assets at RMB 375.6 billion and new acquisitions of RMB 105.1 billion in 2020 Key Financial Data for Non-performing Asset Management Business (Million RMB) | Item | 2020 | 2019 | | :--- | :--- | :--- | | **Net Non-performing Debt Assets** | 375,603.2 | 385,449.7 | | **Newly Acquired Non-performing Debt Assets** | 105,056.9 | 116,710.8 | | **Non-performing Debt Asset Income** | 29,326.5 | 30,101.2 | | **Book Value of Debt-to-Equity Assets** | 77,239.3 | 77,009.4 | - Acquisition and Management Business: In 2020, new acquisitions amounted to **RMB 45.63 billion**, and disposed assets had a book cost of **RMB 41.58 billion**, with an Internal Rate of Return (IRR) of **12.6%** (compared to 15.6% in 2019)[118](index=118&type=chunk)[119](index=119&type=chunk) - Acquisition and Restructuring Business: Asset quality faced pressure, with the impairment ratio increasing from **2.87% to 3.90%**, and the provision coverage ratio increasing from **200.0% to 217.3%**[121](index=121&type=chunk)[122](index=122&type=chunk) [Financial Services Business](index=59&type=section&id=8.3.2%20Financial%20Services%20Business) The financial services segment provides comprehensive financial services through subsidiaries like Nanyang Commercial Bank, Cinda Securities, Jingu Trust, and Cinda Financial Leasing, achieving a total business synergy scale of RMB 444.2 billion and synergy income of RMB 4.87 billion in 2020 2020 Performance of Major Financial Subsidiaries (Million RMB) | Subsidiary | Revenue | Pre-tax Profit | Total Assets | | :--- | :--- | :--- | :--- | | **Nanyang Commercial Bank** | 13,328.5 | 3,676.0 | 424,117.0 | | **Cinda Securities** | 4,336.7 | 954.1 | 47,321.5 | | **Jingu Trust** | 489.4 | 154.5 | 4,761.8 | | **Cinda Financial Leasing** | 2,716.7 | 203.6 | 53,874.1 | - Nanyang Commercial Bank: As of year-end 2020, total assets were **RMB 424.1 billion**, total loans were **RMB 235.4 billion**, and the non-performing loan ratio was **0.86%**, an increase from **0.67%** at the end of the previous year[141](index=141&type=chunk) - In 2020, the Group's total business synergy scale reached **RMB 444.2 billion**, involving **2,278 clients**, and achieving synergy income of **RMB 4.87 billion**, effectively enhancing the Group's overall operating efficiency[161](index=161&type=chunk) [Risk Management](index=69&type=section&id=8.4%20Risk%20Management) The company adheres to a “proactive management, bottom-line adherence” risk management philosophy, establishing a comprehensive framework covering credit, market, operational, and liquidity risks, overseen by the Board of Directors - The company has established a comprehensive risk management organizational system comprising four levels and three lines of defense, involving the Board of Directors, senior management, risk management functional departments, and business operating departments[169](index=169&type=chunk)[173](index=173&type=chunk) - In early 2020, the Board of Directors approved the "Group Risk Appetite Statement (2020)," emphasizing a commitment to maintaining stable and sustainable profitability within acceptable risk levels and ensuring endogenous capital growth[172](index=172&type=chunk) - The company utilizes various risk management tools such as economic capital, risk limits, rating classifications, impairment provisions, and stress testing, and actively promotes the construction of risk management information systems to enhance risk control capabilities[175](index=175&type=chunk)[176](index=176&type=chunk) [Capital Management](index=77&type=section&id=8.5%20Capital%20Management) The company established a capital-constrained operating model to ensure capital levels meet regulatory requirements and support business high-quality development, with all capital adequacy ratios meeting regulatory thresholds as of year-end 2020 Capital Adequacy Ratios | Item | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Core Tier 1 Capital Adequacy Ratio (%)** | 10.66 | 11.20 | | **Tier 1 Capital Adequacy Ratio (%)** | 13.70 | 14.37 | | **Capital Adequacy Ratio (%)** | 17.47 | 16.76 | - The company manages its capital in accordance with the "Capital Management Measures for Financial Asset Management Companies (Trial)" issued by the CBIRC, ensuring a robust capital position[185](index=185&type=chunk) [Outlook](index=78&type=section&id=8.6%20Outlook) Looking ahead to 2021, the company anticipates business opportunities in the non-performing asset sector due to banking asset quality pressure and accelerating financial market risk exposure, focusing on core business, alternative investment banking, and digital transformation - Commercial banks' asset quality is expected to remain under pressure, and non-bank financial institutions such as trusts and leasing companies will also see an increase in non-performing assets, potentially leading to more problematic institutions and assets, creating business opportunities for financial asset management companies[188](index=188&type=chunk) - The company's strategy will focus on its core non-performing asset business, promoting transformation and upgrading its models, expanding alternative investment banking services, and exploring business opportunities in bankruptcy reorganization, mergers and acquisitions, and listed company distress relief[189](index=189&type=chunk) - The company will accelerate structural optimization, promote group synergy upgrades, apply an "investment + investment banking" mindset, and expedite the Group's information technology construction and digital transformation[189](index=189&type=chunk) [Changes in Share Capital and Major Shareholders](index=80&type=section&id=9.%20Changes%20in%20Share%20Capital%20and%20Major%20Shareholders) This section details the company's ordinary share capital structure and major shareholder holdings as of year-end 2020, along with information on preferred shares [Ordinary Share Capital](index=81&type=section&id=9.1%20Ordinary%20Share%20Capital) As of year-end 2020, the company's total share capital was 38.165 billion shares, with domestic shares accounting for 64.45% and H shares for 35.55%, primarily held by the Ministry of Finance and the National Council for Social Security Fund Ordinary Share Capital Structure (as of December 31, 2020) | Share Class | Number of Shares | Proportion (%) | | :--- | :--- | :--- | | Domestic Shares | 24,596,932,316 | 64.45 | | H Shares | 13,567,602,831 | 35.55 | | **Total** | **38,164,535,147** | **100.00** | Major Shareholder Holdings (as of December 31, 2020) | Major Shareholder Name | Number of Shares Held | Share Class | Proportion of Total Share Capital (%) | | :--- | :--- | :--- | :--- | | Ministry of Finance | 22,137,239,084 | Domestic Shares | 58.00 | | National Council for Social Security Fund | 2,459,693,232 | Domestic Shares | 6.44 | | National Council for Social Security Fund | 2,901,006,093 | H Shares | 7.60 | [Preferred Shares Information](index=82&type=section&id=9.3%20Preferred%20Shares%20Information) The company has 160 million outstanding overseas preferred shares, with dividends of $142.4 million (after tax) distributed on September 30, 2020, at a dividend rate of 4.45% (after tax), and no redemption or conversion occurred during the reporting period - On **September 30, 2020**, the company distributed dividends for its overseas preferred shares, with a dividend rate of **4.45% (after tax)**, totaling **$142.4 million (after tax)**[199](index=199&type=chunk) - The overseas preferred shares include a mandatory conversion to H-shares trigger event clause, primarily related to the company's viability[200](index=200&type=chunk) - No trigger events occurred during the reporting period[200](index=200&type=chunk) [Corporate Governance Report](index=98&type=section&id=11.%20Corporate%20Governance%20Report) This report outlines the company's adherence to the Hong Kong Corporate Governance Code, its governance structure comprising the Shareholders' Meeting, Board of Directors, Supervisory Board, and Senior Management, and the establishment of five specialized Board committees [Corporate Governance Overview](index=99&type=section&id=11.1%20Corporate%20Governance%20Overview) During the reporting period, the company fully complied with the Hong Kong Corporate Governance Code, earning the "Best Corporate Governance Bank" award from Global Finance magazine, and revised its Articles of Association to enhance governance mechanisms - The company has fully complied with the code provisions of Appendix 14 "Corporate Governance Code" of the Hong Kong Listing Rules[249](index=249&type=chunk) - The company's corporate governance structure includes the Shareholders' Meeting, Board of Directors, Supervisory Board, and senior management[252](index=252&type=chunk) - The Board of Directors has five specialized committees: Strategy and Development, Audit, Risk Management, Nomination and Remuneration, and Connected Transactions Control[269](index=269&type=chunk) - On **June 30, 2020**, the Shareholders' Meeting approved the revision of the company's Articles of Association, which became effective on **October 27** of the same year after approval by the CBIRC[252](index=252&type=chunk) [Board of Directors' Report](index=127&type=section&id=12.%20Board%20of%20Directors'%20Report) This report details the Board's proposed profit distribution plan for 2020, including a cash dividend of RMB 1.041 per 10 shares (tax inclusive) for ordinary shares, totaling approximately RMB 3.973 billion, pending shareholder approval [Profit and Profit Distribution](index=128&type=section&id=12.2%20Profit%20and%20Profit%20Distribution) The Board proposes a 2020 ordinary share cash dividend of RMB 1.041 per 10 shares (tax inclusive), amounting to approximately RMB 3.973 billion, subject to shareholder approval Proposed 2020 Dividend Distribution Plan | Item | Content | | :--- | :--- | | **Distribution Basis** | Per 10 shares | | **Cash Dividend (tax inclusive)** | RMB 1.041 | | **Total Dividend Amount (approx.)** | RMB 3.973 billion | | **Recipients** | Domestic shareholders and H-share shareholders | | **Status** | Subject to approval by the Shareholders' Meeting | [Supervisory Board Report](index=136&type=section&id=13.%20Supervisory%20Board%20Report) This report summarizes the Supervisory Board's work in 2020, including its oversight of company operations, financial status, internal control, and the performance of directors and senior management, providing independent opinions on key matters [Supervisory Board Work Summary](index=137&type=section&id=13.1%20Key%20Work%20Highlights) In 2020, the Supervisory Board held 4 meetings, reviewed 13 proposals, and focused on supervising legal compliance, financial status, performance of directors and senior management, internal control, and risk management - The Supervisory Board held **4 meetings** throughout the year, reviewing **13 proposals**, including regular reports, internal control evaluation reports, and performance evaluation reports[343](index=343&type=chunk) - Key areas of supervision included: performance supervision, financial supervision, internal control and compliance supervision, and risk management supervision, with attention also paid to the impact of the pandemic on the company's operations and asset quality[343](index=343&type=chunk)[344](index=344&type=chunk) [Independent Opinions](index=139&type=section&id=13.2%20Independent%20Opinions%20on%20Relevant%20Matters) The Supervisory Board issued independent opinions on the company's 2020 operations, affirming legal and compliant operations, fair financial reporting, satisfactory performance of all directors and senior management, and effective internal controls, with no dissenting opinions - The Supervisory Board issued positive independent opinions with no dissenting views on four aspects of the company's operations: legal compliance, financial reports, performance evaluation of directors and senior management, and internal control[346](index=346&type=chunk) [Significant Matters](index=139&type=section&id=14.%20Significant%20Matters) The most significant event during the reporting period was the completion of the transfer of the company's 50.995% equity in Happiness Life Insurance, which was approved by the Shareholders' Meeting and the CBIRC - The most significant matter during the reporting period was the completion of the transfer of the company's **50.995% equity** in Happiness Life Insurance, which was approved by the Shareholders' Meeting and the CBIRC[348](index=348&type=chunk) - During the reporting period, the company did not experience any litigation or arbitration that had a significant adverse impact on its operating performance, did not implement any equity incentive plans, and neither the company nor its directors, supervisors, or senior management received any significant penalties from securities regulatory agencies[348](index=348&type=chunk) [Audit Report and Financial Statements](index=141&type=section&id=16.%20Audit%20Report%20and%20Financial%20Statements) This section includes the Independent Auditor's Report and the detailed Consolidated Financial Statements prepared in accordance with International Financial Reporting Standards [Independent Auditor's Report](index=142&type=section&id=Independent%20Auditor's%20Report) Ernst & Young issued an unmodified audit opinion on the company's 2020 consolidated financial statements, affirming their fair presentation of the Group's financial position and operating results, identifying four key audit matters - The auditor, Ernst & Young, issued a standard unmodified audit opinion on the 2020 consolidated financial statements[353](index=353&type=chunk) - Key audit matters include: * Classification and impairment provisions of financial assets * Valuation of financial instruments * Assessment of control, joint control, and significant influence * Transfer of financial assets[355](index=355&type=chunk) [Consolidated Financial Statements](index=152&type=section&id=Consolidated%20Financial%20Statements) This section presents the detailed consolidated financial statements prepared in accordance with International Financial Reporting Standards, including the consolidated income statement, statement of comprehensive income, statement of financial position, statement of changes in equity, consolidated cash flow statement, and comprehensive notes - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and comply with the disclosure requirements of the Hong Kong Companies Ordinance[353](index=353&type=chunk)[390](index=390&type=chunk)