[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)

Financial Reporting Changes - The company reported a significant change in its financials due to the adoption of IFRS 9, impacting shareholder equity directly from January 1, 2018[10]. - The company’s interim financial statements are prepared in accordance with international financial reporting standards, with all figures presented in Renminbi[10]. - The financial data for the first half of 2020 separates the results of discontinued operations from continuing operations, with the tax effect of discontinued operations presented separately in the income statement[10]. Company Structure and Operations - As of June 30, 2020, the company no longer holds any equity in Happiness Life Insurance, which was previously 50.995% owned and classified as held for sale[10]. - The report indicates that the company has undergone a significant restructuring, with the insurance business no longer included in its operations[10]. - The company has two operating segments: distressed asset management and financial services, which include banking, securities, futures, public funds, trust, leasing, and insurance businesses[64]. Financial Performance - Total revenue for the six months ended June 30, 2020, was RMB 45,819.9 million, a slight increase from RMB 45,464.1 million in the same period of 2019[11]. - Net profit attributable to shareholders for the period was RMB 6,340.7 million, down from RMB 8,685.3 million in the previous year, representing a decrease of approximately 27%[11]. - The company reported a pre-tax profit from continuing operations of RMB 10,713.1 million, compared to RMB 12,729.8 million in the same period last year, reflecting a decline of about 15.9%[11]. Asset and Liability Management - The total assets of the company as of June 30, 2020, amounted to RMB 1,531,817.5 million, an increase from RMB 1,488,242.0 million at the end of June 2019[12]. - The total liabilities increased to RMB 1,339,643.1 million from RMB 1,304,472.3 million year-over-year, indicating a rise of approximately 2.7%[12]. - The company’s equity attributable to shareholders increased to RMB 167,200.0 million from RMB 161,377.8 million year-over-year, reflecting a growth of approximately 5.1%[12]. Revenue Sources and Growth - The company reported a significant increase in other income and net gains, which rose to RMB 4,906.0 million from RMB 3,322.0 million in the previous year, an increase of about 47.7%[11]. - Income from non-performing assets measured at amortized cost rose by 7.9% from RMB 8,437.5 million in H1 2019 to RMB 9,105.6 million in H1 2020, accounting for 19.9% of total revenue from continuing operations[23]. - Inventory sales revenue increased by 96.4% from RMB 4,919.1 million in H1 2019 to RMB 9,659.2 million in H1 2020, reflecting significant growth in real estate project deliveries[39]. Risk Management - The company has a strong focus on risk management and capital management, with detailed sections dedicated to these topics in the report[6]. - The company emphasized a focus on non-performing assets management amid economic pressures and the impact of COVID-19[17]. - The company established a comprehensive risk management policy covering seven major risk categories, including credit risk and market risk, to prevent systemic risks[169]. Economic Environment - The Chinese economy experienced a GDP decline of 1.6% year-on-year in the first half of 2020, with a recovery of 3.2% growth in the second quarter[16]. - The government implemented a fiscal deficit increase to over 3.6% and issued RMB 1 trillion in special bonds to combat the pandemic's economic impact[16]. - The financial market remains volatile, with significant challenges and opportunities arising from the pandemic's impact on the industry[17]. Management and Governance - The company appointed Zhang Weidong as CEO effective January 21, 2020, and Hu Jiliang as Vice President effective March 31, 2020[200]. - The board of directors includes executive directors Zhang Ziai (Chairman) and Zhang Weidong, along with several non-executive and independent directors[196]. - The company has maintained consistent information regarding its board members compared to the previous annual report, with no additional disclosures required[200].

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[4]. - In 2019, the company received multiple awards, including the "Top 100 Enterprises in China" and "Best Listed Company" at the China Securities Golden Bauhinia Awards[4]. - As of 2019, the company operates 33 branches across 30 provinces, autonomous regions, and municipalities in mainland China, employing approximately 16,000 staff[4]. - The company has strategic investors including the National Social Security Fund Council and UBS AG, enhancing its capital structure and market position[4]. Financial Performance - Total assets reached RMB 1,513.23 billion in 2019, an increase from RMB 1,495.76 billion in 2018[18]. - Total revenue from continuing operations was RMB 120.03 billion in 2018, with a net profit attributable to shareholders of RMB 15.02 billion[18]. - The company reported a net profit of RMB 15.02 billion in 2019, reflecting a stable performance[18]. - The average return on equity was 8.56% in 2019, compared to 12.04% in 2018[18]. - Earnings per share were RMB 0.31 in 2019, up from RMB 0.29 in 2018[18]. - The company achieved a net profit attributable to shareholders of RMB 13.05 billion, an increase of 8.4% compared to the previous year[33]. - The total revenue for the company in 2019 was RMB 107,780.8 million, slightly up from RMB 107,026.0 million in 2018[128]. Asset Management and Non-Performing Assets - The company’s core business is the management of non-performing assets, which remains a significant focus for future growth[4]. - The company is focusing on the core business of non-performing assets and financial services to create competitive advantages[26]. - The company acquired operating non-performing assets totaling RMB 52.16 billion in 2019, with a net amount of RMB 198.15 billion by the end of the year[33]. - The net amount of non-performing loans was RMB 385,449.7 million in 2019, a decrease from RMB 405,247.9 million in 2018[131]. - The company’s strategy includes acquiring and managing non-performing assets from both financial and non-financial institutions[133]. Risk Management and Governance - The company aims to expand its financial services and improve governance practices, as evidenced by its recognition for corporate governance and social responsibility[4]. - New strategies will focus on risk management and improving operational efficiency[16]. - The company plans to strengthen risk management by effectively resolving existing risks and strictly controlling new risks, with a focus on liquidity risk prevention[34]. - The company will enhance its governance structure and improve internal control compliance systems to support high-quality development[39]. Revenue Sources and Business Segments - The non-performing asset management segment accounted for 70.2% of total revenue in 2019, down from 73.6% in 2018, indicating a shift in revenue sources[128]. - Financial services revenue increased by 14.6% year-on-year, contributing to a 3.8 percentage point increase in its share of total group revenue[102]. - The company’s financial services segment generated revenue of RMB 33,684.2 million in 2019, representing 31.3% of total revenue, up from 27.5% in 2018[128]. Operational Efficiency and Employee Management - The company emphasizes internal fairness and external competitiveness in its compensation policy to promote stable operations and development[200]. - The company’s human resources management focused on market-oriented personnel mechanisms and salary distribution reforms to support high-quality development[197]. - The headquarters has restructured to enhance direct management capabilities and strengthen compliance management by establishing a business management department and four strategic customer departments[198]. Strategic Initiatives and Future Plans - The company plans to expand its market presence and enhance its product offerings in the coming years[16]. - The company aims to enhance its project restructuring and investment banking capabilities to mitigate financial risks[26]. - The company is committed to developing new technologies to support its growth initiatives[16]. - The company will continue to implement proactive fiscal policies and maintain reasonable liquidity to support economic stability[41].

Financial Performance - The company reported a total revenue of RMB 1.2 billion for the first half of 2019, representing a year-on-year increase of 15%[14]. - Net profit attributable to shareholders reached RMB 300 million, up 10% compared to the same period last year[14]. - Total revenue for the six months ended June 30, 2019, was RMB 53,268.5 million, a decrease of 2.7% from RMB 54,771.7 million in the same period of 2018[16]. - Net profit attributable to shareholders for the same period was RMB 8,685.3 million, slightly up from RMB 8,620.3 million in 2018, reflecting a growth of 0.8%[16]. - The company achieved a net profit attributable to shareholders of RMB 8,685.3 million in the first half of 2019, an increase of RMB 65.0 million, representing a growth of 0.8% compared to the same period last year[24]. - The company reported a pre-tax profit of RMB 13,409.2 million, an increase of 13.5% from RMB 11,815.9 million in the same period last year[27]. - The total income from the non-performing asset management segment accounted for 66.0% of total revenue in the first half of 2019, down from 69.3% in the same period of 2018[68]. - The pre-tax profit margin improved to 25.2% in the first half of 2019, compared to 21.6% in the same period of 2018[66]. Asset and Liability Management - The total assets of the company as of June 30, 2019, amounted to RMB 50 billion, reflecting a growth of 8% year-on-year[14]. - The total assets as of June 30, 2019, amounted to RMB 1,488,242.0 million, up from RMB 1,460,566.2 million in 2018, indicating a growth of 1.9%[18]. - The company reported a decrease in total liabilities to RMB 1,304,472.3 million from RMB 1,285,407.4 million, a reduction of 1.5%[18]. - The total liabilities as of June 30, 2019, amounted to RMB 1,166,246.4 million, with borrowings, deposits, and bonds payable accounting for 41.5%, 20.9%, and 22.4% of total liabilities, respectively[87]. - The borrowing balance was RMB 541,478.3 million, a decrease of 5.1% from RMB 570,870.2 million as of December 31, 2018, due to effective control over borrowing growth[88]. - The total deposits increased by 7.1% to RMB 272,059.1 million as of June 30, 2019, from RMB 254,099.9 million as of December 31, 2018[89]. Market Expansion and Strategic Initiatives - The company has expanded its user base by 20%, reaching a total of 1 million active users in the asset management sector[14]. - Future outlook indicates a projected revenue growth of 12% for the second half of 2019, driven by new product launches and market expansion strategies[14]. - Market expansion efforts include entering three new provinces in China, expected to contribute an additional RMB 100 million in revenue[14]. - The company plans to pursue strategic acquisitions to enhance its market position, targeting firms with complementary services[14]. - The company plans to continue expanding its market presence and investing in new technologies to enhance its competitive edge in the industry[17]. Risk Management - Risk management strategies have been strengthened, with a focus on reducing non-performing assets by 5% by the end of 2019[14]. - The company has implemented new compliance measures in response to regulatory changes, ensuring adherence to the latest financial reporting standards[14]. - The company has established a comprehensive risk management framework involving all employees, focusing on identifying and managing potential risks within the company's risk appetite[169]. - The overall risk preference statement emphasizes maintaining a stable and sustainable profitability while ensuring compliance with regulatory capital adequacy requirements[171]. - The company has developed a comprehensive risk management policy system covering major risk categories, which is continuously updated based on management needs[174]. Investment and Financial Instruments - The company is investing RMB 200 million in research and development for new financial technologies aimed at enhancing service efficiency[14]. - The fair value changes of bad debt assets increased by 18.7% to RMB 6,503.4 million, with unrealized gains turning from a loss of RMB 50.1 million in 2018 to a gain of RMB 1,442.2 million in 2019[30][33]. - The fair value changes of financial instruments measured at fair value through profit or loss increased by 14.0% from RMB 5,769.3 million in H1 2018 to RMB 6,579.6 million in H1 2019[36]. - The total financial assets measured at fair value and recognized in profit or loss amounted to RMB 431,870.0 million, an increase of 0.7% from RMB 428,791.0 million as of December 31, 2018[75]. Compliance and Governance - The company has implemented a comprehensive risk management framework involving all employees, focusing on identifying and managing potential risks within the company's risk appetite[169]. - The company is committed to anti-money laundering compliance, enhancing employee awareness and implementing comprehensive self-inspections[185]. - The company will continue to strengthen risk management and improve governance effectiveness to ensure liquidity safety[189]. Shareholder Information - The major shareholder, the Ministry of Finance, holds 64.45% of the company's domestic shares, totaling 24,596,932,316 shares[194]. - The Social Security Fund holds 7.60% of the H shares, amounting to 2,901,006,093 shares[194]. - As of June 30, 2019, there was one preferred shareholder holding 160,000,000 shares, representing 100% of the preferred shares[196].

Company Overview - The company was established in 1999 and became the first financial asset management company in China, listed on the Hong Kong Stock Exchange in December 2013[4]. - The company operates in 30 provinces and municipalities in mainland China, with 33 branches and approximately 18,000 employees[4]. - The core business of the company is non-performing asset management, which is a significant part of its overall operations[4]. - The company has strategic investors including the National Social Security Fund, UBS AG, CITIC Capital Holdings, and Standard Chartered Bank[4]. - The company has established eight subsidiaries engaged in non-performing asset management, asset management, and financial services, including Nanyang Commercial Bank and Cinda Securities[4]. Awards and Recognition - In 2018, the company won multiple awards, including the "Best Shareholder Return Company" at the Sina Finance Golden Lion Awards and the "Outstanding Financial Asset Management Company Award" at the Financial界 website's 2018 Leading China Awards[4]. - The company received several awards in 2018, including the "Best Shareholder Return Company" and "Most Valuable Listed Company" in recognition of its governance and operational performance[37]. Financial Performance - The total revenue for 2018 was RMB 107,026 million, an increase from RMB 91,657 million in 2017, representing a growth of approximately 16.6%[28]. - The net profit attributable to shareholders for 2018 was RMB 12,036.1 million, compared to RMB 15,512.2 million in 2017, indicating a decrease of about 22.4%[28]. - The company reported a strong performance in 2018, continuing to be recognized as a leading brand in the financial sector[4]. - The company reported a tax expense of RMB 6,908.6 million for 2018, compared to RMB 7,373 million in 2017, indicating a slight reduction in tax liabilities[28]. - The company faced a total expense of RMB 90,207.6 million in 2018, down from RMB 94,236.7 million in 2017, reflecting cost management efforts[28]. - The company reported a significant increase in the fair value changes of other financial instruments, which rose to RMB 15,068.9 million, a 483.6% increase from RMB 2,582.2 million in 2017[53]. - The company’s investment income for 2018 was RMB 154.4 million, a notable decrease from RMB 29,465.7 million in 2017, suggesting challenges in investment performance[28]. - The company achieved a net profit attributable to shareholders of RMB 12.04 billion for the year[34]. - The total assets of the group reached approximately RMB 1.5 trillion by the end of the reporting period, with a core Tier 1 capital adequacy ratio of 10.21%, providing a good safety margin compared to regulatory requirements[42]. Asset Management and Non-Performing Assets - The company is focused on developing new products and technologies to improve its service offerings and operational efficiency[4]. - The company aims to expand its market presence and enhance its asset management capabilities through strategic partnerships and acquisitions[4]. - The company is exploring new models for managing non-performing assets and enhancing value creation[34]. - The company maintained a leading market share in the acquisition of operating non-performing assets, with a continued high proportion of new acquisitions in the public market[42]. - The company realized disposal gains of RMB 11.27 billion from the acquisition and management of non-performing assets, enhancing operational efficiency[42]. - The income from non-performing financial assets was RMB 30,584.2 million in 2018, up from RMB 26,569.5 million in 2017[146]. - The company acquired non-performing loans worth RMB 169,597.6 million in 2018, down from RMB 202,053.5 million in 2017[136]. - The company’s non-financial non-performing assets reached RMB 211,733.0 million in 2018, representing 52.2% of total non-performing assets[139]. Risk Management and Challenges - The company is currently facing various risks and uncertainties that may impact future performance, as detailed in the "Management Discussion and Analysis" section of the report[14]. - The company emphasized the importance of risk management and supporting structural reforms in the economy[34]. - The company plans to implement a proactive fiscal policy and moderately loose monetary policy to support infrastructure construction and alleviate financing difficulties for private and small enterprises[49]. - The global economic environment remains complex, with increasing downward pressure on China's economy, necessitating a focus on high-quality development and structural reforms[49]. Strategic Initiatives - The company aims to strengthen capital management and optimize asset structure to ensure sustainable profitability and stable cash flow[43]. - The company aims to deepen reforms and innovations to improve operational management efficiency and risk control capabilities[36]. - The company will enhance supervision effectiveness and improve risk governance structures to better manage financial risks and support the real economy[47]. - The company has established a professional team for P2P risk disposal, actively participating in the resolution of P2P risks[36]. - The company continues to enhance its asset management services by increasing third-party fundraising efforts, aiming to improve the value of asset management services[160]. Investment and Capital Management - The company plans to continue expanding its investment and asset management services to maximize the value of non-performing assets[101]. - The self-owned capital investment balance for Xinda Investment increased from RMB 35.63 billion in 2017 to RMB 55.05 billion in 2018, marking a growth of approximately 54.5%[166]. - The total investment amount of China Cinda Asset Management Co., Ltd. reached RMB 55,052.8 million in 2018, up from RMB 35,626.8 million in 2017, representing a growth of 54.5%[167]. - The company has focused on reallocating resources such as capital, assets, and management models to help troubled enterprises recover their operational and financial capabilities[158]. Financial Services and Subsidiaries - The financial services segment's revenue share decreased by 8.2 percentage points in 2018 compared to 2017, primarily due to a significant drop in premium income from a subsidiary[101]. - The financial services segment reported a pre-tax loss of RMB 1,371.9 million in 2018, compared to a profit of RMB 2,366.6 million in 2017[134]. - The total assets of Nanyang Commercial Bank reached RMB 407.6 billion, up from RMB 363.1 billion in 2017, representing an increase of 12.3%[180]. - The total revenue from asset management business decreased to RMB 84.3 million in 2018 from RMB 151.5 million in 2017, a decline of 44.4%[188]. Revenue and Income Sources - The revenue from non-performing asset management business accounted for 41.9% of total revenue in 2018, up from 37.7% in 2017[135]. - The company experienced a 52.6% decline in net earned premium income, which fell to RMB 9,128.6 million from RMB 19,266.9 million in 2017[53]. - The company reported a significant increase in project supervision fee income, rising by 173.7% to RMB 262.2 million in 2018 from RMB 95.8 million in 2017[81]. - The total revenue from rental income increased by 33.8% to RMB 472.1 million in 2018 from RMB 352.8 million in 2017[81]. Legal and Compliance Issues - The company has ongoing legal disputes with potential liabilities amounting to RMB 2,243.7 million as of December 31, 2018, up from RMB 1,904.8 million in 2017[130].