[Overview](index=4&type=section&id=Overview) BAIC Motor Corporation Limited announced its unaudited interim condensed financial information for H1 2021, reporting 557,000 vehicle sales, RMB 90.38 billion in consolidated revenue, RMB 2.76 billion profit attributable to equity holders, and RMB 0.34 earnings per share, with no interim dividend recommended - In H1 2021, China's passenger vehicle wholesale sales reached **10.007 million units**, a **27.0% year-on-year increase**[7](index=7&type=chunk) H1 2021 Group Key Performance | Metric | Amount/Quantity | | :--- | :--- | | Vehicle Sales | 557,000 units | | Consolidated Revenue | RMB 90.38 billion | | Profit attributable to equity holders of the Company | RMB 2.76 billion | | Earnings per share | RMB 0.34 | - The Board did not propose an interim dividend for the reporting period[7](index=7&type=chunk) [Company Information](index=5&type=section&id=Section%201%20Company%20Information) This section provides basic information including the company's legal name, registered and head office addresses, Hong Kong principal place of business, authorized representatives, company secretary, legal advisors, auditors, principal bankers, H-share stock code, and investor contact details - The company's legal name is Beijing Automotive Group Co., Ltd., with the English name BAIC Motor Corporation Limited[9](index=9&type=chunk) - The H-share stock code is **1958**[9](index=9&type=chunk) - The auditors are PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP (Special General Partnership)[9](index=9&type=chunk) [Financial and Business Data Overview](index=6&type=section&id=Section%202%20Financial%20and%20Business%20Data%20Overview) This section summarizes the Group's H1 2021 key financial and performance highlights, showing revenue growth of 16.1%, profit for the period up 58.0%, and profit attributable to equity holders surging 163.5%, with total assets slightly down, total liabilities significantly reduced, and equity attributable to equity holders increased, driven by strong vehicle sales from Beijing Benz and Fujian Benz [Key Financial Highlights](index=6&type=section&id=I.%20Key%20Financial%20Highlights) In H1 2021, Group revenue grew 16.1% to RMB 90.375 billion, profit for the period increased 58.0% to RMB 9.183 billion, and profit attributable to equity holders surged 163.5% to RMB 2.758 billion, while total assets slightly decreased, total liabilities significantly reduced, and equity attributable to equity holders increased H1 2021 Summary of Consolidated Financial Information (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Revenue | 90,375 | 77,854 | | Cost of sales | (69,050) | (59,824) | | Gross profit | 21,325 | 18,030 | | Profit before income tax | 13,579 | 9,088 | | Profit for the period | 9,183 | 5,811 | | Attributable to equity holders of the Company | 2,758 | 1,047 | | Attributable to non-controlling interests | 6,425 | 4,764 | Summary of Statement of Financial Position (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Total assets | 190,467 | 193,703 | | Total liabilities | 109,058 | 120,109 | | Equity attributable to equity holders of the Company | 52,532 | 51,088 | [Key Performance Highlights](index=7&type=section&id=II.%20Key%20Performance%20Highlights) In H1 2021, the Group's total wholesale vehicle sales reached 557,000 units, with Beijing Benz selling 316,000 units, Beijing Hyundai 194,000 units, Fujian Benz 19,000 units, and Beijing Brand 28,000 units H1 2021 Wholesale Sales by Passenger Vehicle Business (Ten Thousand Units) | Business | H1 2021 Cumulative Sales | H1 2020 Cumulative Sales | | :--- | :--- | :--- | | Beijing Brand | 28 | 35 | | Fuel Vehicles | 21 | 24 | | New Energy Vehicles | 7 | 11 | | Beijing Benz | 316 | 270 | | Beijing Hyundai | 194 | 184 | | Fujian Benz | 19 | 14 | [Company Profile and Business Overview](index=8&type=section&id=Section%203%20Company%20Profile%20and%20Business%20Overview) This section details BAIC Motor as a leading Chinese passenger vehicle enterprise, covering its brand portfolio, main businesses, H1 2021 industry developments, Group operations, and H2 outlook, with businesses spanning R&D, manufacturing, sales and after-sales service, core component production, auto finance, and international operations [Overall Situation](index=8&type=section&id=I.%20Overall%20Situation) BAIC Motor is a leading Chinese passenger vehicle enterprise with a diverse brand portfolio including joint venture luxury, joint venture mid-to-high-end, and own-brand passenger vehicles, listed on the Main Board of the Stock Exchange on December 19, 2014 - BAIC Motor is a leading Chinese passenger vehicle enterprise with a broad brand portfolio covering joint venture luxury, joint venture mid-to-high-end, and own-brand passenger vehicles[17](index=17&type=chunk) - The company was listed on the Main Board of the Stock Exchange on **December 19, 2014**, with H-share stock code **1958**[17](index=17&type=chunk) [Main Business Operations](index=8&type=section&id=II.%20Main%20Business%20Operations) The Group's main businesses include passenger vehicle R&D, manufacturing, sales and after-sales service, core component production, auto finance, international business, and other related operations, with passenger vehicle business conducted through four segments: Beijing Brand, Beijing Benz, Beijing Hyundai, and Fujian Benz [Passenger Vehicle Business](index=8&type=section&id=Passenger%20Vehicle%20Business) Passenger vehicle business is conducted through four segments: Beijing Brand (own-brand, covering fuel, hybrid, pure electric), Beijing Benz (producing and selling Mercedes-Benz passenger vehicles, with three major vehicle platforms and engine/power battery factories), Beijing Hyundai (joint venture, producing and selling Hyundai passenger vehicles, with three production bases), and Fujian Benz (joint venture, producing and selling Mercedes-Benz multi-purpose passenger and light commercial vehicles) - Beijing Brand is an own-brand, with products covering fuel and new energy sedans and SUVs, and has released power and intelligent platform technology roadmaps covering fuel, hybrid, and pure electric drives[17](index=17&type=chunk) - Beijing Benz, a **51.0% owned subsidiary**, produces and sells Mercedes-Benz passenger vehicles, becoming Daimler's only joint venture globally with front-wheel drive, rear-wheel drive, and electric vehicle platforms, along with engine and power battery factories[21](index=21&type=chunk) - Beijing Hyundai, a **50.0% owned joint venture**, produces and sells Hyundai brand passenger vehicles, with production bases in Beijing, Hebei, and Chongqing, offering a product line covering mid-size, compact, A0-segment sedans, and SUVs[21](index=21&type=chunk) - Fujian Benz, a **35.0% owned joint venture**, produces and sells Mercedes-Benz multi-purpose passenger and light commercial vehicles, maintaining a leading position in the joint venture luxury commercial vehicle segment[21](index=21&type=chunk)[23](index=23&type=chunk) [Core Passenger Vehicle Components](index=10&type=section&id=Core%20Passenger%20Vehicle%20Components) The Group produces core components like engines and powertrains through production bases of Beijing Brand, Beijing Benz, and Beijing Hyundai, with Beijing Benz operating the first power battery factory outside Germany and exporting engine core components and complete engines - The Group produces core passenger vehicle components such as engines and powertrains through its brand production bases, primarily for self-produced vehicles, with some for external sales[23](index=23&type=chunk) - Beijing Benz operates two engine factories and the first power battery factory outside Germany, producing M274, M282, M264, M254 engines and its first new energy power battery product, also exporting engine core components and complete engines[23](index=23&type=chunk) [Auto Finance](index=10&type=section&id=Auto%20Finance) The Group conducts auto finance and after-market related businesses for Beijing Brand, Mercedes-Benz, and Hyundai brands through associates and joint ventures, driving their rapid development through capital injection and business cooperation - The Group conducts auto finance and after-market businesses through associates and joint ventures such as BAIC Group Finance Co., Ltd. and Mercedes-Benz Leasing Co., Ltd[23](index=23&type=chunk) [Sales and Service Business](index=10&type=section&id=Sales%20and%20Service%20Business) The Group and BAIC Bluepark jointly established BAIC Marketing Service Company to enhance Beijing Brand's marketing competitiveness through shared channels, service resources, and sales resources - The Group and BAIC Bluepark jointly invested in establishing BAIC Marketing Service Company to enhance Beijing Brand's marketing competitiveness by sharing channels, service, and sales resources[23](index=23&type=chunk) [International Business](index=11&type=section&id=International%20Business) The Group expands international business through BAIC South Africa (responsible for production and marketing in South Africa and SADC) and BAIC International Development Co., Ltd. (responsible for international marketing outside China and South Africa), focusing on exporting Beijing Brand passenger vehicles - The Group expands international business through its joint venture BAIC South Africa and wholly-owned subsidiary BAIC International Development Co., Ltd., focusing on exporting Beijing Brand passenger vehicle products[25](index=25&type=chunk) [Other Related Businesses](index=11&type=section&id=Other%20Related%20Businesses) In H1 2021, the Group continued to develop lightweight R&D, new energy technology transformation, information big data, and used car businesses through relevant joint ventures - The Group continues to develop lightweight R&D, new energy technology transformation, information big data, and used car businesses[25](index=25&type=chunk) [H1 2021 Industry Development](index=11&type=section&id=III.%20H1%202021%20Industry%20Development) In H1 2021, China's economy continued to recover steadily, with passenger vehicle sales surging 27.0% to 10.007 million units, driven by a low base effect and new energy vehicle growth; new energy passenger vehicle wholesale sales increased 217.4%, and the luxury car market grew 41.5%, supported by national pro-consumption policies - In H1 2021, China's GDP grew by **12.7% year-on-year**, with the economy continuing to recover steadily[25](index=25&type=chunk) - The passenger vehicle market achieved wholesale sales of **10.007 million units**, a **27.0% year-on-year increase**, primarily driven by a low base effect and new energy vehicle growth[25](index=25&type=chunk) H1 2021 New Energy Passenger Vehicle Sales (Ten Thousand Units) | Type | Wholesale Sales | Year-on-Year Growth | | :--- | :--- | :--- | | New Energy Passenger Vehicles | 114.0 | 217.4% | | Pure Electric Passenger Vehicles | 94.1 | 244.1% | | Plug-in Hybrid Passenger Vehicles | 19.9 | 132.5% | - The luxury car market achieved wholesale sales of **1.658 million units**, a **41.5% year-on-year increase**, surpassing the overall growth rate of the passenger vehicle market[25](index=25&type=chunk) - The state issued policies to boost bulk consumption, promote new energy vehicles in rural areas, and unleash the consumption potential of the automotive market[27](index=27&type=chunk) [H1 2021 Group Operations](index=12&type=section&id=IV.%20H1%202021%20Group%20Operations) In H1 2021, the Group's brands actively responded to market challenges; Beijing Brand launched new models and saw SUV sales increase, Beijing Benz sales grew 17.0% and maintained a leading position in luxury, Beijing Hyundai adjusted marketing and launched new models, Fujian Benz sales increased 39.0%, and the Group continued to optimize its sales network and strengthen R&D [Brand Operations](index=12&type=section&id=Brand%20Operations) Beijing Brand achieved 28,000 vehicle sales with increased SUV sales and new model launches; Beijing Benz sold 316,000 units, up 17.0%, with E-Class, C-Class, and GLC SUV monthly sales exceeding 10,000, and new products like the E 350 e L PHEV and long-wheelbase C-Class sedans entered production; Beijing Hyundai wholesale sales were 194,000 units and retail sales 203,000 units, with new models launched; Fujian Benz sales reached 19,000 units, up 39.0% - Beijing Brand achieved **28,000 vehicle sales**, with SUV model sales increasing year-on-year, and new products like U5 PLUS and EU5 PLUS successively launched[28](index=28&type=chunk) - Beijing Benz achieved **316,000 vehicle sales**, a **17.0% year-on-year increase**, with its three main models (E-Class, C-Class, GLC SUV) averaging over **10,000 monthly sales** each[29](index=29&type=chunk) - Beijing Benz Shunyi plant commenced production of new products as planned, including the new generation Mercedes-Benz E 350 e L plug-in hybrid sedan, the all-new Mercedes-Benz long-wheelbase C-Class sedan, and the Mercedes-Benz M254 engine[29](index=29&type=chunk) - Beijing Hyundai achieved **194,000 wholesale sales**, a **5.3% year-on-year increase**, and **203,000 retail sales**, with the all-new MISTRA and its pure electric model, and the fifth-generation Tucson L successfully launched[31](index=31&type=chunk) - Fujian Benz achieved **19,000 vehicle sales**, a **39.0% year-on-year increase**[31](index=31&type=chunk) [Sales Network Status](index=13&type=section&id=Sales%20Network%20Status) The Group continuously optimizes and upgrades its dealer network to enhance customer experience and overall competitiveness, with Beijing Brand completing store upgrades and Beijing Benz and Beijing Hyundai focusing on network efficiency, quality, and dealer profitability - The Group continuously optimizes and upgrades its dealer network to enhance customer experience and overall competitiveness, with each brand having independent sales channels[31](index=31&type=chunk) [R&D Status](index=13&type=section&id=R%26D%20Status) The Group's brands continue to vigorously promote R&D system and capability building; Beijing Brand focuses on "intelligent connectivity" and "electrification"; Beijing Benz has Daimler's largest R&D center in a joint venture, supporting localized prototype vehicle trials; Beijing Hyundai simultaneously develops multiple local and imported models to enrich its product line - Beijing Brand focuses on “intelligent connectivity” and “electrification,” combining independent innovation with strategic cooperation to achieve breakthroughs in core technologies[33](index=33&type=chunk) - Beijing Benz has Daimler's largest R&D center within a joint venture, introducing the Mercedes-Benz development system to support localized prototype vehicle trials and shorten new product introduction and validation cycles[33](index=33&type=chunk) - Beijing Hyundai is simultaneously developing three local models and five imported models, with the all-new MISTRA EV and fifth-generation Tucson L already launched, and its first MPV Custo and N-line sports models progressing well in R&D[33](index=33&type=chunk) [Production Facilities Status](index=14&type=section&id=Production%20Facilities%20Status) The Group possesses professional production facilities with flexible production lines, enabling agile response to market demands; Beijing Benz aims to build Mercedes-Benz's most comprehensive global production base with a quality center based on Daimler's global standards; Beijing Hyundai factories boast over 90% equipment automation and flexible production scheduling - The Group's production facilities are equipped with flexible production lines, enabling agile changes in production plans and quick responses to market demand fluctuations, thereby reducing costs[34](index=34&type=chunk) - Beijing Benz continues to build Mercedes-Benz's most comprehensive global production base, adhering to “digitalization, flexibility, efficiency, and sustainability” standards, and establishing a quality center to ensure global quality[35](index=35&type=chunk) - All Beijing Hyundai factories have over **90% equipment automation**, ensuring precision and high-quality products, and can flexibly arrange production plans to reduce manufacturing costs[37](index=37&type=chunk) [H2 2021 Outlook](index=15&type=section&id=V.%20H2%202021%20Outlook) H2 2021 economic operations are expected to continue stable recovery, supporting auto consumption, but global economic recovery and the pandemic pose uncertainties, with rising raw material prices increasing cost pressure; the Group will actively respond, with Beijing Brand enhancing brand power and product upgrades, Beijing Benz strengthening supply and new energy vehicle launches, and Beijing Hyundai introducing its first MPV Custo and focusing on key models - H2 2021 economic operations are expected to recover steadily, but global economic recovery and the pandemic present uncertainties, with rising raw material prices increasing corporate cost pressure[37](index=37&type=chunk) - Beijing Brand will advance brand power enhancement and product upgrades, focusing on increasing sales of key models such as U5 PLUS, EU5 PLUS, and X7[37](index=37&type=chunk) - Beijing Benz will strengthen supply chain assurance and lean production, ensure the launch of new energy models, and consolidate its leading position in the high-end luxury car market[37](index=37&type=chunk) - Beijing Hyundai's first MPV Custo is set to launch, with a focus on four key models: the seventh-generation Elantra, fifth-generation Tucson L, all-new ix35, and all-new Celesta, to boost market attention and retail sales[37](index=37&type=chunk) [Corporate Governance Practices](index=16&type=section&id=Section%204%20Corporate%20Governance%20Practices) This section outlines the company's corporate governance practices, including compliance with governance codes, changes in board and committee composition, updates on directors, supervisors, and senior management, as well as information on interim dividends, audit committee, listed securities transactions, share interests of key personnel and major shareholders, and significant litigation or arbitration [Corporate Governance](index=16&type=section&id=I.%20Corporate%20Governance) The company is committed to high-level corporate governance, complying with the Corporate Governance Code and Model Code; the Board and Supervisory Committee completed re-election on March 24, 2021, with Mr. Jiang Deyi elected Chairman; the Audit Committee reviewed interim financial statements; no listed securities were bought, sold, or redeemed, and no share interests were held by directors, supervisors, or senior management during the period; major shareholders include BAIC Group, Shougang Group, and Daimler AG; no significant litigation or arbitration - The company is committed to establishing and maintaining high standards of corporate governance, complying with the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers[38](index=38&type=chunk) - The Board of Directors and Supervisory Committee completed their re-election on **March 24, 2021**, with Mr. Jiang Deyi elected as Chairman[38](index=38&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim financial statements for H1 2021[41](index=41&type=chunk) - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[42](index=42&type=chunk) - As of the end of June 2021, none of the directors, supervisors, or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations[42](index=42&type=chunk) Major Shareholder Holdings as of June 2021 | Shareholder Name | Share Class | Number of Shares/Underlying Shares Held | Percentage of Total Share Capital (%) | | :--- | :--- | :--- | :--- | | BAIC Group Co., Ltd. | Domestic Shares | 3,416,659,704(L) | 42.63 | | Shougang Group Co., Ltd. | Domestic Shares | 1,028,748,707(L) | 12.83 | | Daimler AG | H Shares | 765,818,182(L) | 9.55 | - As of the end of June 2021, the company had no significant litigation or arbitration matters[45](index=45&type=chunk) - The Board did not propose an interim dividend for H1 2021[41](index=41&type=chunk) [Directors, Supervisors, and Senior Management](index=19&type=section&id=II.%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section lists the names and positions of the company's directors, supervisors, and senior management as of the latest practicable date, with Mr. Jiang Deyi serving as Chairman and Non-executive Director, Mr. Huang Wenbing as Executive Director and President, and Ms. Li Chengjun as Chairperson of the Supervisory Committee - Mr. Jiang Deyi serves as Chairman and Non-executive Director, and Mr. Huang Wenbing serves as Executive Director and President[47](index=47&type=chunk)[50](index=50&type=chunk) - Ms. Li Chengjun serves as Chairperson of the Supervisory Committee and Employee Representative Supervisor[49](index=49&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Section%205%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the Group's H1 2021 financial performance and operations, highlighting significant revenue and net profit growth, primarily driven by Beijing Benz's strong performance, increased gross profit despite expanded Beijing Brand gross loss, ample liquidity, and reduced asset-liability ratio, with no major equity investments or M&A, a shift from foreign currency exchange loss to gain, and a slight decrease in headcount but increased employee costs [Revenue and Net Profit Attributable to Equity Holders of the Company](index=20&type=section&id=Revenue%20and%20Net%20Profit%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) In H1 2021, Group revenue grew 16.1% to RMB 90.3752 billion, primarily driven by a 17.5% increase in Beijing Benz revenue; net profit attributable to equity holders surged 163.5% to RMB 2.7581 billion, with basic earnings per share rising to RMB 0.34, mainly due to increased Beijing Benz sales, while Beijing Brand revenue decreased by 21.0% Revenue and Net Profit Overview (RMB in millions) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Group Revenue | 90,375.2 | 77,854.4 | | Beijing Benz Related Revenue | 88,058.9 | 74,920.4 | | Beijing Brand Related Revenue | 2,316.4 | 2,934.0 | | Net Profit Attributable to Equity Holders of the Company | 2,758.1 | 1,046.9 | | Basic Earnings Per Share | 0.34 | 0.12 | [Gross Profit](index=20&type=section&id=Gross%20Profit) Group gross profit increased 18.3% year-on-year to RMB 21.325 billion, primarily due to Beijing Benz's gross profit rising 19.9% to RMB 23.8213 billion, with gross margin improving to 27.1%; however, Beijing Brand's gross loss expanded to negative RMB 2.4963 billion, mainly impacted by declining sales and changes in model structure Gross Profit Overview (RMB in millions) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Group Gross Profit | 21,325.0 | 18,030.3 | | Beijing Benz Gross Profit | 23,821.3 | 19,865.0 | | Beijing Benz Gross Margin | 27.1% | 26.5% | | Beijing Brand Gross Profit | (2,496.3) | (1,834.6) | [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) Net cash flow from operating activities decreased 19.1% year-on-year to RMB 4.2595 billion, mainly due to reduced operating cash inflow from Beijing Benz; as of June 2021, the Group held RMB 49.8214 billion in cash and cash equivalents, RMB 24.0861 billion in outstanding borrowings, and RMB 22.6106 billion in unused bank credit lines, having issued offshore corporate bonds and super short-term commercial papers to repay interest-bearing debt and supplement working capital - Net cash flow from operating activities decreased by **19.1% year-on-year** to **RMB 4.2595 billion**, primarily due to a decrease in Beijing Benz's operating cash inflow[51](index=51&type=chunk) Liquidity Status as of June 2021 (RMB in millions) | Metric | Amount | | :--- | :--- | | Cash and Cash Equivalents | 49,821.4 | | Outstanding Borrowings | 24,086.1 | | Unused Bank Credit Lines | 22,610.6 | | Capital Expenditure Commitments | 30,892.1 | - In H1 2021, the Group issued **USD 350 million** in offshore corporate bonds and two tranches of super short-term commercial papers totaling **RMB 4 billion**, used to repay interest-bearing debt and supplement daily working capital[53](index=53&type=chunk) [Capital Structure](index=21&type=section&id=Capital%20Structure) As of June 2021, the Group's asset-liability ratio decreased by 4.7 percentage points from 62.0% at year-end 2020 to 57.3%; the net debt-to-equity ratio increased from negative 60.3% to negative 46.2%, mainly due to increases in total borrowings, cash and cash equivalents, and a greater increase in total equity compared to borrowings and cash and cash equivalents; total outstanding borrowings amounted to RMB 24.0861 billion Capital Structure Metric Changes | Metric | June 2021 | December 2020 | | :--- | :--- | :--- | | Asset-Liability Ratio | 57.3% | 62.0% | | Net Debt-to-Equity Ratio | -46.2% | -60.3% | - As of the end of June 2021, total outstanding borrowings amounted to **RMB 24.0861 billion**, comprising **RMB 15.9274 billion** in short-term borrowings and **RMB 8.1587 billion** in long-term borrowings[52](index=52&type=chunk) [Significant Investments](index=21&type=section&id=Significant%20Investments) In H1 2021, the Group made no significant equity investments; total capital expenditure slightly increased to RMB 3.4576 billion, with an increase in Beijing Brand's capital expenditure; total R&D expenditure rose to RMB 1.2296 billion - The Group made no significant equity investments in H1 2021[53](index=53&type=chunk) Capital Expenditure and R&D Expenditure (RMB in millions) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Total Capital Expenditure | 3,457.6 | 3,347.7 | | Beijing Benz Capital Expenditure | 2,919.7 | 3,028.2 | | Beijing Brand Capital Expenditure | 537.9 | 319.5 | | Total R&D Expenditure | 1,229.6 | 1,131.6 | [Significant Acquisitions and Disposals](index=22&type=section&id=Significant%20Acquisitions%20and%20Disposals) Except as disclosed in the 2020 annual report, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period - The Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period[54](index=54&type=chunk) [Foreign Currency Exchange Gains and Losses](index=22&type=section&id=Foreign%20Currency%20Exchange%20Gains%20and%20Losses) The Group's (primarily Beijing Benz's) foreign currency exchange gains and losses shifted from a loss of RMB 147.7 million in H1 2020 to a gain of RMB 66.9 million in H1 2021, mainly due to effective hedging with forward foreign exchange contracts and the appreciation of RMB against the Euro; the Group employs a mature foreign exchange management strategy, primarily using forward foreign exchange contracts to hedge risks Foreign Currency Exchange Gains and Losses (RMB in millions) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Foreign Currency Exchange Gains and Losses | Gain of 66.9 | Loss of 147.7 | - The shift from exchange loss to gain was primarily due to effective hedging with forward foreign exchange contracts and the appreciation of the RMB against the Euro[54](index=54&type=chunk) - The Group has a mature foreign exchange management strategy, primarily using forward foreign exchange contracts to hedge exchange rate risks[54](index=54&type=chunk) [Employees and Remuneration Policy](index=22&type=section&id=Employees%20and%20Remuneration%20Policy) The Group's headcount decreased from 21,038 at year-end 2020 to 19,759 at June 2021, while employee costs increased to RMB 2.9301 billion, mainly due to higher total production and sales volume; the Group has established a performance and capability-oriented remuneration system and provides supplementary retirement benefits through an enterprise annuity scheme Employee Headcount and Costs (RMB in millions) | Metric | June 2021 | December 2020 | | :--- | :--- | :--- | | Employee Headcount | 19,759 | 21,038 | | Employee Costs | 2,930.1 | 2,859.7 | - The Group has established a performance and capability-oriented remuneration system and provides supplementary retirement benefits through an enterprise annuity scheme[54](index=54&type=chunk) [Pledged Assets](index=22&type=section&id=Pledged%20Assets) As of June 2021, the Group had pledged bills receivable amounting to RMB 547.8 million - As of the end of June 2021, the Group had pledged bills receivable amounting to **RMB 547.8 million**[54](index=54&type=chunk) [Contingent Liabilities](index=22&type=section&id=Contingent%20Liabilities) As of June 2021, the Group had no significant contingent liabilities - As of the end of June 2021, the Group had no significant contingent liabilities[54](index=54&type=chunk) [Unaudited Interim Condensed Consolidated Financial Information Review Report](index=23&type=section&id=Section%206%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information%20Review%20Report) PricewaterhouseCoopers has reviewed BAIC Motor Corporation Limited's unaudited interim condensed consolidated financial information for the six months ended June 30, 2021, in accordance with International Standard on Review Engagements 2410, finding no material matters indicating non-preparation in accordance with International Accounting Standard 34 - The auditor, PricewaterhouseCoopers, has reviewed the interim financial information in accordance with International Standard on Review Engagements 2410[55](index=55&type=chunk) - The review concluded that nothing has come to the auditor's attention that causes them to believe the Group's interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[55](index=55&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=24&type=section&id=Section%207%20Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2021, the Group's total assets were RMB 190.4667 billion, a slight decrease from year-end 2020; total liabilities significantly reduced to RMB 109.0577 billion; and capital and reserves attributable to equity holders of the Company increased to RMB 52.5321 billion Summary of Interim Condensed Consolidated Statement of Financial Position (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 98,609,034 | 98,703,847 | | Current assets | 91,857,667 | 94,999,233 | | **Total assets** | **190,466,701** | **193,703,080** | | **Equity** | | | | Capital and reserves attributable to equity holders of the Company | 52,532,106 | 51,087,500 | | Non-controlling interests | 28,876,868 | 22,506,443 | | **Total equity** | **81,408,974** | **73,593,943** | | **Liabilities** | | | | Non-current liabilities | 14,339,470 | 14,836,166 | | Current liabilities | 94,718,257 | 105,272,971 | | **Total liabilities** | **109,057,727** | **120,109,137** | - As of June 30, 2021, the Group's current liabilities exceeded its current assets by approximately **RMB 2.861 billion**, but management believes there are sufficient available financing channels to meet working capital requirements[69](index=69&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=26&type=section&id=Section%208%20Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2021, Group revenue increased 16.1% year-on-year to RMB 90.3752 billion; profit for the period surged 58.0% to RMB 9.1828 billion; profit attributable to equity holders of the Company grew 163.5% to RMB 2.7581 billion, with basic earnings per share of RMB 0.34; total comprehensive income for the period was RMB 10.4563 billion, a significant increase from the prior year Summary of Interim Condensed Consolidated Statement of Comprehensive Income (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Revenue | 90,375,224 | 77,854,370 | | Gross profit | 21,325,038 | 18,030,336 | | Operating profit | 13,977,617 | 10,232,784 | | Profit before income tax | 13,578,950 | 9,087,882 | | Profit for the period | 9,182,796 | 5,811,345 | | Attributable to equity holders of the Company | 2,758,065 | 1,046,945 | | Basic and diluted earnings per share (RMB) | 0.34 | 0.12 | | Total comprehensive income for the period | 10,456,258 | 5,788,057 | [Interim Condensed Consolidated Statement of Changes in Equity](index=28&type=section&id=Section%209%20Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2021, total equity attributable to equity holders of the Company increased from RMB 51.0875 billion at the beginning of the period to RMB 52.5321 billion, with total comprehensive income for the period at RMB 4.0858 billion; the company fully repaid its RMB 2 billion perpetual bonds on March 23, 2021 Changes in Equity Attributable to Equity Holders of the Company (RMB in thousands) | Item | Balance at January 1, 2021 | Total comprehensive income for the period | Repayment of perpetual bonds | Balance at June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Share capital | 8,015,338 | - | - | 8,015,338 | | Perpetual bonds | 1,998,160 | - | (1,998,160) | - | | Other reserves | 22,120,796 | 1,327,768 | (1,840) | 23,446,724 | | Retained earnings | 18,953,206 | 2,758,065 | (641,227) | 21,070,044 | | **Subtotal** | **51,087,500** | **4,085,833** | **(2,641,227)** | **52,532,106** | - The company decided in **February 2021** not to exercise the renewal option for its **RMB 2 billion** perpetual bonds issued on April 10, 2018, and made full payment on **March 23, 2021**[96](index=96&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=Section%2010%20Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash flow from operating activities was RMB 4.2595 billion, a year-on-year decrease; net cash used in investing activities was RMB 3.9870 billion; net cash generated from financing activities was RMB 1.4696 billion, a significant year-on-year increase; net increase in cash and cash equivalents was RMB 1.7421 billion, with an ending balance of RMB 49.8214 billion Summary of Interim Condensed Consolidated Statement of Cash Flows (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | 4,259,504 | 5,265,541 | | Net cash used in investing activities | (3,986,960) | (4,566,531) | | Net cash generated from financing activities | 1,469,582 | 795,787 | | Net increase in cash and cash equivalents | 1,742,126 | 1,494,797 | | Cash and cash equivalents at June 30 | 49,821,432 | 51,721,352 | [Notes to the Interim Condensed Consolidated Financial Information](index=31&type=section&id=Section%2011%20Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes to the interim condensed consolidated financial information, covering general company information, basis of preparation and accounting policies, estimates, financial risk management, segment information, property/plant and equipment/land use rights and intangible assets, trade receivables, share capital, perpetual bonds, borrowings, trade payables, operating profit, income tax expense, earnings per share, dividends, capital commitments, and related party transactions [1 General Information](index=31&type=section&id=1%20General%20Information) BAIC Motor Corporation Limited and its subsidiaries primarily engage in the manufacturing and sale of passenger vehicles, engines, and automotive parts within China; the company was established in China on September 20, 2010, listed on the Main Board of the Hong Kong Stock Exchange on December 19, 2014, and its direct controlling company is BAIC Group Co., Ltd - The Group primarily engages in the manufacturing and sale of passenger vehicles, engines, and automotive parts within China[69](index=69&type=chunk) - The company was listed on the Main Board of the Hong Kong Stock Exchange on **December 19, 2014**, and its direct controlling company is BAIC Group Co., Ltd[69](index=69&type=chunk) [2 Basis of Preparation and Accounting Policies](index=31&type=section&id=2%20Basis%20of%20Preparation%20and%20Accounting%20Policies) This condensed financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" on a going concern basis; during the reporting period, amended standards including IFRS 16 (Revised) and IFRS 9 (Revised) were adopted, but had no significant impact on accounting policies - This condensed financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and on a going concern basis[69](index=69&type=chunk) - Adopted amended standards include International Financial Reporting Standard 16 (Revised) and International Financial Reporting Standard 9 (Revised), which had no significant impact on accounting policies[71](index=71&type=chunk) [3 Estimates](index=32&type=section&id=3%20Estimates) The preparation of condensed financial information requires management to make judgments, estimates, and assumptions regarding the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses, where actual results may differ from these estimates - The preparation of condensed financial information involves management making judgments, estimates, and assumptions regarding the application of accounting policies and financial amounts, and actual results may differ from these estimates[71](index=71&type=chunk) [4 Financial Risk Management](index=33&type=section&id=4%20Financial%20Risk%20Management) The Group's business faces market risks (foreign exchange, interest rate), credit risk, and liquidity risk, with no changes in risk management policies since year-end; as of June 30, 2021, liquidity risk analysis of the Group's financial liabilities shows that borrowings, lease liabilities, trade payables, and other payables are primarily due within one year; fair value measurement of derivative financial instruments uses Level 2 inputs - The Group's business faces market risks (foreign exchange risk and interest rate risk), credit risk, and liquidity risk, with no changes in risk management policies since year-end[73](index=73&type=chunk) Financial Liabilities Maturity Analysis as of June 30, 2021 (RMB in thousands) | Item | Within 1 year | 1 to 2 years | 2 to 5 years | Over 5 years | | :--- | :--- | :--- | :--- | :--- | | Borrowings | 16,476,335 | 1,791,803 | 6,800,693 | – | | Lease liabilities | 75,038 | 13,975 | 2,943 | 14,067,160 | | Trade payables | 40,905,415 | – | – | – | | Other payables | 31,956,491 | 43,714 | 45,317 | – | - Fair value measurement of derivative financial instruments uses Level 2 inputs (other observable inputs)[77](index=77&type=chunk)[78](index=78&type=chunk) [5 Segment Information](index=34&type=section&id=5%20Segment%20Information) The Group's business is divided into two reporting segments based on internal reporting: Beijing Brand passenger vehicles and Beijing Benz passenger vehicles; in H1 2021, Beijing Benz contributed the vast majority of revenue and gross profit, while Beijing Brand incurred a gross loss; the Group's revenue primarily originates from customers within China, and non-current assets are also mainly located in mainland China - The Group's business is divided into two reporting segments: Beijing Brand passenger vehicles and Beijing Benz passenger vehicles[79](index=79&type=chunk) H1 2021 Segment Revenue and Gross Profit (RMB in thousands) | Item | Beijing Brand | Beijing Benz | Eliminations | Total | | :--- | :--- | :--- | :--- | :--- | | Revenue from external customers | 2,316,352 | 88,058,872 | – | 90,375,224 | | Segment (gross loss)/gross profit | (2,496,302) | 23,821,340 | – | 21,325,038 | - For the six months ended June 30, 2021, revenue from external customers located within China accounted for approximately **99.7%** of the Group's total revenue[87](index=87&type=chunk) - As of June 30, 2021, approximately **98.5%** of the Group's other non-current assets, excluding financial instruments and deferred income tax assets, were located in mainland China[87](index=87&type=chunk) [6 Property, Plant and Equipment, Land Use Rights and Intangible Assets](index=37&type=section&id=6%20Property%2C%20Plant%20and%20Equipment%2C%20Land%20Use%20Rights%20and%20Intangible%20Assets) As of June 30, 2021, the net book value of property, plant and equipment was RMB 50.9208 billion, land use rights RMB 7.0679 billion, and intangible assets RMB 11.8878 billion; during the reporting period, capitalized borrowing costs amounted to RMB 105.573 million, with a weighted average interest rate of 3.34%; no property, plant and equipment, land use rights, or intangible assets were pledged as collateral for borrowings Net Book Value of Non-current Assets as of June 30, 2021 (RMB in thousands) | Item | Net Book Value | | :--- | :--- | | Property, plant and equipment | 50,920,838 | | Land use rights | 7,067,910 | | Intangible assets | 11,887,835 | - For the six months ended June 30, 2021, the Group's capitalized borrowing costs amounted to **RMB 105.573 million**, with a weighted average interest rate of **3.34%**[89](index=89&type=chunk) - As of June 30, 2021, there were no property, plant and equipment, land use rights, or intangible assets pledged as collateral for borrowings[89](index=89&type=chunk) [7 Trade Receivables](index=38&type=section&id=7%20Trade%20Receivables) As of June 30, 2021, total trade receivables were RMB 14.5870 billion, with impairment provisions of RMB 441.063 million; total bills receivable were RMB 15.3826 billion, of which RMB 547.827 million were pledged as collateral for bank bills payable; the aging of trade receivables was primarily within one year Trade Receivables and Bills Receivable as of June 30, 2021 (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Gross trade receivables | 14,587,014 | 17,849,531 | | Less: Impairment allowance | (441,063) | (465,630) | | Bills receivable | 15,382,586 | 20,553,050 | - As of June 30, 2021, the amount of pledged bills receivable was **RMB 547.827 million**[94](index=94&type=chunk) - The aging of trade receivables is primarily from current to **1 year**, amounting to **RMB 5.5993 billion**[91](index=91&type=chunk) [8 Share Capital](index=39&type=section&id=8%20Share%20Capital) As of June 30, 2021, the company's issued ordinary shares totaled 8.015338 billion, with a par value of RMB 1 per share, resulting in a total share capital of RMB 8.015338 billion, consistent with year-end 2020 Share Capital Status (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Number of ordinary shares (thousands) | 8,015,338 | 8,015,338 | | Share capital | 8,015,338 | 8,015,338 | [9 Perpetual Bonds](index=39&type=section&id=9%20Perpetual%20Bonds) The company's RMB 2 billion perpetual bonds, issued on April 10, 2018, were fully repaid on March 23, 2021, as the company decided not to exercise the renewal option - The company decided in **February 2021** not to exercise the renewal option for its **RMB 2 billion** perpetual bonds issued on **April 10, 2018**, and made full payment on **March 23, 2021**[96](index=96&type=chunk) [10 Borrowings](index=40&type=section&id=10%20Borrowings) As of June 30, 2021, total borrowings amounted to RMB 24.0861 billion, comprising RMB 8.1587 billion in non-current borrowings and RMB 15.9274 billion in current borrowings; total unused credit facilities amounted to RMB 22.6106 billion Borrowings Composition (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Non-current borrowings | 8,158,709 | 8,721,150 | | Current borrowings | 15,927,391 | 11,736,216 | | **Total borrowings** | **24,086,100** | **20,457,366** | Unused Credit Facilities (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Within 1 year | 17,802,679 | 29,080,169 | | Over 1 year | 4,807,955 | 1,300,000 | | **Total** | **22,610,634** | **30,380,169** | [11 Trade Payables](index=41&type=section&id=11%20Trade%20Payables) As of June 30, 2021, total trade payables amounted to RMB 40.9054 billion, comprising RMB 38.5821 billion in trade payables and RMB 2.3233 billion in bills payable; the aging of trade payables was primarily within one year Trade Payables Composition (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Trade payables | 38,582,076 | 45,096,832 | | Bills payable | 2,323,339 | 2,920,293 | | **Total** | **40,905,415** | **48,017,125** | - The aging of trade payables is primarily from current to **1 year**, amounting to **RMB 34.2457 billion**[104](index=104&type=chunk) [12 Operating Profit](index=41&type=section&id=12%20Operating%20Profit) Operating profit includes depreciation and amortization of RMB 4.2189 billion, employee costs of RMB 2.5751 billion, warranty expenses of RMB 510.961 million, impairment provisions for non-financial assets of RMB 576.023 million, and foreign currency exchange gains of RMB 286.431 million Key Components of Operating Profit (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Depreciation and amortization | 4,218,904 | 3,834,176 | | Employee costs | 2,575,148 | 2,455,198 | | Warranty expenses | 510,961 | 79,817 | | Impairment provisions for non-financial assets | 576,023 | 36,028 | | Foreign currency exchange gains | (286,431) | (46,767) | | Government grants | (1,252,143) | (166,215) | [13 Income Tax Expense](index=42&type=section&id=13%20Income%20Tax%20Expense) For the six months ended June 30, 2021, income tax expense was RMB 4.3962 billion, comprising current income tax of RMB 3.2532 billion and deferred income tax of RMB 1.1430 billion Income Tax Expense Composition (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Current income tax | 3,253,171 | 2,499,616 | | Deferred income tax | 1,142,983 | 776,921 | | **Total** | **4,396,154** | **3,276,537** | [14 Earnings Per Share](index=42&type=section&id=14%20Earnings%20Per%20Share) For the six months ended June 30, 2021, profit attributable to ordinary equity holders of the Company was RMB 2.7581 billion, with basic earnings per share of RMB 0.34; there were no potential dilutive ordinary shares during the period, thus diluted earnings per share equaled basic earnings per share Earnings Per Share Calculation (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company | 2,758,065 | 934,945 | | Weighted average number of ordinary shares in issue (thousands) | 8,015,338 | 8,015,338 | | Earnings per share attributable to ordinary equity holders of the Company for the period (RMB) | 0.34 | 0.12 | - For the six months ended June 30, 2021 and 2020, there were no potential dilutive ordinary shares, thus diluted earnings per share equaled basic earnings per share[109](index=109&type=chunk) [15 Dividends](index=43&type=section&id=15%20Dividends) For the six months ended June 30, 2021, the Board did not propose an interim dividend; dividends related to the 2020 financial year, approximately RMB 641.227 million (RMB 0.08 per share), were approved by shareholders at the annual general meeting in June 2021 - For the six months ended June 30, 2021, the Board did not propose an interim dividend[112](index=112&type=chunk) - Dividends related to the 2020 financial year, approximately **RMB 641.227 million** (**RMB 0.08 per share**), were approved by shareholders at the annual general meeting in **June 2021**[112](index=112&type=chunk) [16 Capital Commitments](index=43&type=section&id=16%20Capital%20Commitments) As of June 30, 2021, the Group's total capital commitments for property, plant and equipment amounted to RMB 30.8921 billion, with RMB 13.9149 billion contracted but not yet executed, and RMB 16.9772 billion approved but not yet contracted Capital Commitments as of June 30, 2021 (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Contracted but not yet executed | 13,914,899 | 14,254,089 | | Approved but not yet contracted | 16,977,248 | 18,418,707 | | **Total** | **30,892,147** | **32,672,796** | [17 Related Party Transactions](index=43&type=section&id=17%20Related%20Party%20Transactions) This section discloses significant related party transactions in H1 2021, including sales of goods, materials, property, plant and equipment, provision and receipt of services, purchases of goods and materials, lease income and expenses, interest income and expenses, and key management personnel remuneration; it also presents significant related party balances as of June 30, 2021, including financial assets, trade receivables, bills receivable, prepayments, other receivables, cash and cash equivalents, trade payables, bills payable, contract liabilities, other payables and accruals, dividends payable, and borrowings H1 2021 Significant Related Party Transactions (RMB in thousands) | Transaction Type | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Sales of goods and materials, property, plant and equipment | 9,560,547 | 8,661,970 | | Provision of services | 237,480 | 184,185 | | Purchases of goods and materials | 35,540,067 | 30,237,923 | | Receipt of services | 5,415,074 | 5,376,995 | | Lease income | 121 | – | | Lease expenses | 48,586 | 62,442 | | Interest income | 165,450 | 153,541 | | Interest expenses | 56,556 | 53,174 | | Key management personnel remuneration | 4,701 | 8,155 | Significant Related Party Balances as of June 30, 2021 (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Financial assets at fair value through other comprehensive income | 3,613,375 | 1,893,816 | | Trade receivables | 2,027,617 | 2,758,659 | | Bills receivable | 19,465 | 136,146 | | Prepayments | 82,571 | 183,642 | | Other receivables | 830,162 | 1,192,270 | | Cash and cash equivalents | 14,942,909 | 15,310,913 | | **Liabilities** | | | | Trade payables | 26,574,191 | 31,545,541 | | Bills payable | 79,246 | 383,563 | | Contract liabilities | 11,655 | 15,304 | | Other payables and accruals | 7,182,267 | 7,257,293 | | Dividends payable | 43,596 | 43,596 | | Borrowings | 2,041,236 | 2,459,010 | [Definitions](index=47&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used in the report, including company names, brand names, institutional names, financial reporting standards, and reporting periods, to ensure clear understanding of the report content - This section provides definitions for key terms and abbreviations used in the report, such as "Beijing Benz," "Beijing Brand," "CAAM," and "IFRS"[124](index=124&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk)

Financial Performance - In 2020, BAIC Motor Corporation achieved consolidated revenue of RMB 176.97 billion, with a net profit of RMB 12.96 billion[9]. - The group's revenue for 2020 was RMB 176.973 billion, a slight increase from RMB 175.410 billion in 2019[15]. - The gross profit for 2020 was RMB 42.140 billion, compared to RMB 37.634 billion in 2019, reflecting a year-on-year increase of 11.8%[15]. - The net profit attributable to equity holders of the company for 2020 was RMB 2.029 billion, down from RMB 4.996 billion in 2019, indicating a decline of 59.4%[15]. - The group's net profit attributable to equity holders decreased from RMB 4,996.3 million in 2019 to RMB 2,028.8 million in 2020, a decline of 59.4%[63]. - The group's gross profit increased from RMB 37,633.7 million in 2019 to RMB 42,139.9 million in 2020, a year-on-year growth of 12.0%[63]. - The total outstanding borrowings amounted to RMB 20,457.4 million at the end of 2020, including short-term borrowings of RMB 11,736.2 million and long-term borrowings of RMB 8,721.2 million[66]. - The company reported that it paid RMB 772.8 million in trademark usage fees to BAIC Group under the trademark and technology licensing agreement in 2020[111]. Sales and Market Trends - The overall passenger vehicle sales in China decreased by 6.0% year-on-year to 20.178 million units, while SUV sales increased by 0.7% to 9.461 million units[9]. - In 2020, the total vehicle sales for the Beijing brand were 81,792 units, a significant decrease of 51.1% from 166,992 units in 2019[18]. - Beijing Benz sold 610,816 units in 2020, representing an increase of 7.4% compared to 567,306 units in 2019[18]. - Beijing Hyundai's sales dropped to 446,082 units in 2020, down 32.7% from 662,590 units in 2019[18]. - The overall wholesale sales of passenger vehicles in China decreased by 6.0% to 20.178 million units in 2020[38]. - New energy vehicle sales grew by 14.6% to 1.246 million units, with pure electric vehicles increasing by 16.1% to 1 million units[38]. Strategic Focus and Development - The company focused on a dual strategy of new energy and intelligent products to enhance brand strength and improve technological capabilities[9]. - The company aims to strengthen its market position amidst intensified competition and changing industry policies[9]. - In 2021, the company aims to enhance core competitiveness and drive innovation across its brands, focusing on market-oriented strategies[10]. - The company plans to strengthen its product marketing and optimize its business layout to improve brand competitiveness in 2021[10]. - The company is focusing on the development of electric vehicles, with models like BEIJING-EU5 and BEIJING-EU7 achieving a comprehensive range of 500 kilometers[20]. - The company is committed to advancing new product projects and has made steady progress in introducing new technologies such as smart and connected vehicles[29]. - The company aims to enhance its sales network and customer experience through the "2020 Network Upgrade Plan," focusing on online and offline synergy[47]. Acquisitions and Investments - The acquisition of 100% equity in Beijing Automotive International Development Co., Ltd. and 24.78% equity in Yunnan Ruilei Automotive Co., Ltd. was completed in April 2020, expanding the company's operational scope[17]. - The company invested RMB 500 million in Beijing Financial Company, maintaining a 20% stake post-investment, with total registered capital of RMB 2.5 billion[51]. - The company agreed to acquire 100% equity of BAIC International and 24.78% equity of BAIC Ruile for a total consideration of RMB 80 million, with the transaction completed on March 13, 2020[130]. Corporate Governance and Compliance - The company has established a compliance mechanism to ensure adherence to relevant laws and regulations, enhancing corporate governance and board functions[91]. - The company has implemented an internal control system that complies with national laws and effectively mitigates operational risks[145]. - The company has established a structured governance framework to protect shareholder rights, with independent proposals submitted for voting at general meetings[190]. - The company’s board includes members with diverse backgrounds in engineering, management, and international cooperation, contributing to strategic decision-making[191]. - The company has a policy for board member diversity, considering factors such as gender, age, cultural background, and professional experience[173]. Employee and Management Structure - As of the end of 2020, the group had a total of 21,038 full-time employees, with 14,651 production workers and 4,022 technical personnel[135]. - The company has a diverse management team with expertise in finance, auditing, and corporate management, enhancing its operational capabilities[198]. - The company has established a comprehensive performance evaluation system linking annual business goals with departmental and employee performance assessments[136]. - The company’s remuneration system is competitive, based on job value and employee performance, ensuring effective talent recruitment and retention[138]. Risk Management - The company has established a comprehensive risk management system consisting of three lines of defense, including a process system, internal control system, and risk database[183]. - The audit committee is responsible for the regular or ad-hoc review of the company's risk management and internal control systems to ensure their effectiveness[182]. - The company conducts annual reviews of its risk management and internal control systems to ensure ongoing effectiveness and compliance with regulatory requirements[184]. Social Responsibility and Community Engagement - The total donations made by the group in 2020 amounted to RMB 2.1 million[93]. - The group has maintained a commitment to social responsibility and integrity in its operations[95]. - The company has established a corporate annuity system to provide supplementary retirement income for eligible employees[70]. Future Outlook - The company anticipates that 2021 will see intensified competition in the market, with a focus on high-quality development driven by policies supporting new energy vehicles[10]. - In 2021, the domestic economy is expected to stabilize, with a significant recovery in economic growth compared to pre-pandemic levels[55]. - The overall policy focus is shifting towards optimizing consumption and promoting new energy vehicle applications, which will further stimulate market demand[56].

Financial Performance - In 2019, the company achieved consolidated revenue of RMB 174.63 billion and a net profit of RMB 14.32 billion[9]. - The company's revenue for 2019 was RMB 174,633 million, representing a 15% increase from RMB 151,920 million in 2018[14]. - The net profit for 2019 was RMB 14,323 million, slightly up from RMB 14,271 million in 2018, indicating a stable profit margin[14]. - Total assets increased to RMB 193,212 million in 2019, up from RMB 172,034 million in 2018, reflecting a compound annual growth rate (CAGR) of 11%[15]. - The total liabilities rose to RMB 120,585 million in 2019, compared to RMB 102,796 million in 2018, indicating increased leverage[15]. - The average annual growth rate for revenue from 2015 to 2019 was 20%, while the net profit grew at a CAGR of 23% during the same period[19]. - The company's net profit attributable to equity holders decreased from RMB 4,429.5 million in 2018 to RMB 4,082.7 million in 2019, a decline of 7.8%[67]. - Gross profit increased from RMB 37,006.6 million in 2018 to RMB 37,487.0 million in 2019, representing a growth of 1.3%[68]. - The capital expenditure rose from RMB 6,414.1 million in 2018 to RMB 8,329.4 million in 2019, an increase of 29.9%[71]. - The company's debt-to-asset ratio increased from 59.8% at the end of 2018 to 62.4% at the end of 2019, a rise of 2.6 percentage points[71]. - Research and development expenses increased from RMB 2,402.9 million in 2018 to RMB 3,080.6 million in 2019, a growth of 28.2%[71]. - The company maintained cash and cash equivalents of RMB 49,322.5 million as of December 31, 2019[67]. - The company’s net cash generated from operating activities increased from RMB 21,733.4 million in 2018 to RMB 35,952.8 million in 2019, a year-on-year increase of 65.4%[67]. Vehicle Sales and Market Performance - Beijing Benz Automotive Co., Ltd. sold 567,000 vehicles in 2019, representing a year-on-year growth of 17.0%[10]. - Beijing Hyundai maintained stable operations with annual sales of 663,000 vehicles, focusing on new products and technologies[10]. - The total vehicle sales for Beijing brand, Beijing Benz, Beijing Hyundai, and Fujian Benz reached 1.425 million units, a decrease of 2.4% year-on-year, which is significantly lower than the industry average decline[10]. - The company achieved total vehicle sales of 1.425 million units in 2019, representing a year-on-year decline of 2.4%[43]. - The sales of domestic brand passenger vehicles reached 8.407 million units, down 15.8% year-on-year, with a market share of 39.2%, a decrease of 2.9 percentage points from the previous year[41]. - Beijing Benz realized total vehicle sales of 567,000 units in 2019, representing a year-on-year growth of 17.0%, contributing over 75% to the total sales of Mercedes-Benz products in China[45]. - Beijing Hyundai's wholesale vehicle sales declined by 16.2% to 663,000 units in 2019, while retail sales remained relatively stable at 704,000 units[48]. - In 2019, Beijing Brand achieved wholesale sales of 167,000 passenger vehicles, a year-on-year increase of 6.9%, with pure electric vehicle sales reaching 104,000 units, up 133.2%, accounting for 62.5% of total sales[44]. Strategic Initiatives and Future Plans - In 2020, the company plans to focus on the dual-driven strategy of new energy and intelligent connectivity, aiming for a full transition in these areas[10]. - The company aims to improve its sales system, optimize cost structure, and enhance brand image to achieve its operational goals for 2020[10]. - The company plans to enhance its electric vehicle lineup, including models like BEIJING-EU5 and BEIJING-EU7, with a focus on a range of 500 kilometers[23]. - The company is actively pursuing lightweight research and development, new energy technology transformation, and big data initiatives[30]. - The company is focusing on digital, flexible, and green smart factories to strengthen its position in the high-end luxury car market[31]. - The company will enhance its digital, flexible, and green smart factory initiatives to strengthen its competitive advantage in the luxury passenger vehicle sector[10]. - The company is committed to enhancing its capabilities in new energy technology and innovation through investments in national-level innovation centers[58]. Shareholder and Governance Information - The company proposed a dividend of RMB 0.17 per share for the year, providing returns to shareholders[10]. - The company’s major shareholder, BAIC Group, holds a 42.63% stake and is ranked 129th in the 2019 Fortune Global 500[37]. - The company has established strategic partnerships with industry leaders such as Daimler and Hyundai, enhancing its R&D capabilities and management experience[32]. - The company has confirmed the independence of all non-executive directors in accordance with listing rules[102]. - The board proposed a final dividend of RMB 0.17 per share for the year 2019, totaling approximately RMB 1,362,607,490.94 based on 8,015,338,182 shares[93]. - The company has established a compliance mechanism to adhere to environmental, social, and governance reporting guidelines, with a report expected to be published by July 2020[98]. - BAIC Group is the controlling shareholder, holding 42.63% of the company's shares, with no interference in decision-making reported in 2019[175]. Research and Development - The company’s R&D team consists of experienced professionals with a strong focus on independent innovation and core technology development[34]. - Beijing Benz's R&D center introduced advanced testing facilities, supporting the development of both traditional and new energy vehicles in compliance with Daimler standards[53]. - The R&D capabilities of Beijing Brand were enhanced in 2019, with successful launches of BEIJING-X3 and BEIJING-EU7, reflecting advancements in smart connectivity and electric vehicle technology[53]. - The company aims to enhance its R&D capabilities in the high-end automotive sector through collaboration with Daimler[148]. Compliance and Risk Management - The company has maintained compliance with relevant laws and regulations, with no significant litigation or disputes reported in 2019[102]. - The supervisory board emphasized the importance of risk management and internal controls, ensuring compliance with relevant laws and regulations[165]. - The Audit Committee held four meetings in 2019 to review the financial reporting system, compliance procedures, and risk management systems, providing reasonable opinions on these matters[197]. Employee and Corporate Governance - The company has established a comprehensive performance evaluation system linking annual operational goals with departmental and employee performance assessments[154]. - The company focuses on targeted training and customized services to enhance employee capabilities and organizational efficiency, supporting career development and strategic implementation[156]. - The company has developed a competitive compensation system based on job value, employee performance, and industry standards to attract and retain talent[157]. - The company has established a corporate annuity system to provide supplementary retirement income for eligible employees, with 67 retirees in 2019[158]. - The company maintained a high level of corporate governance, adhering to the corporate governance code as per the listing rules[169].

Sales Performance - In the first half of 2019, the total wholesale sales of passenger vehicles in China decreased by 14.0% to 10.127 million units[6]. - BAIC Motor Corporation achieved vehicle sales of 654,000 units, a decline of 9.2% year-on-year[6]. - The sales of the Beijing brand increased to 82,443 units from 73,473 units year-on-year[14]. - Beijing Benz achieved vehicle sales of 282,000 units in the first half of 2019, marking a year-on-year growth of 11.9%[26]. - The sales of Beijing brand vehicles reached 82,000 units, reflecting a year-on-year increase of 12.2%[26]. - Beijing brand's new energy vehicle sales surged to 54,000 units, a year-on-year increase of 263.6%[26]. - In the same period, the sales volume of new energy passenger vehicles reached 563,000 units, representing a year-on-year increase of 58.7%, with pure electric vehicles sales at 440,000 units, up 69.8%[24]. Financial Performance - The consolidated revenue for the first half of 2019 was RMB 87.76 billion, an increase of 14.1% compared to RMB 76.90 billion in the same period of 2018[12]. - The profit attributable to equity holders of the company was RMB 2.09 billion, down 25.9% from RMB 2.82 billion in the first half of 2018[6]. - The earnings per share for the first half of 2019 was RMB 0.25[6]. - Gross profit rose to RMB 20,608.7 million in the first half of 2019, reflecting a 0.8% increase from RMB 20,436.8 million in the same period of 2018[53]. - The company's basic earnings per share fell to RMB 0.25, down 30.6% from RMB 0.36 in the first half of 2018[53]. - The total comprehensive income for the period was RMB 7,261,230 thousand, down from RMB 7,997,279 thousand in the previous year, reflecting a decrease of 9.2%[70]. Assets and Liabilities - Total assets as of June 30, 2019, were RMB 190.44 billion, compared to RMB 172.03 billion at the end of 2018[12]. - The total liabilities increased to RMB 124.39 billion from RMB 102.80 billion at the end of 2018[12]. - The debt-to-asset ratio increased to 65.3% as of June 30, 2019, up 5.5 percentage points from 59.8% at the end of 2018[54]. - The total liabilities as of June 30, 2019, were RMB 124,390,902 thousand, compared to RMB 111,407,015 thousand as of June 30, 2018, indicating an increase of about 11.7%[110]. Corporate Governance - The company did not propose an interim dividend for the reporting period[6]. - The board of directors and supervisory board have undergone changes, with new appointments made on June 18, 2019, including Jin Wei and Harald Emil Wilhelm as non-executive directors[36]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[35]. - Major shareholders include BAIC Group holding 3,416,659,704 shares, representing 62.18% of the class of shares and 42.63% of total issued shares[45]. Market Strategy and Future Outlook - The company is actively optimizing and integrating the Beijing brand product system to enhance competitive strength[22]. - The company plans to phase out traditional internal combustion engine products in favor of hybrid models, including PHEV and HEV[16]. - The company is focusing on expanding its market presence and enhancing its product offerings, particularly in the electric vehicle segment[145]. - Future outlook includes strategic partnerships and potential acquisitions to strengthen market position and drive growth[145]. Research and Development - The company’s engine factory in Beijing successfully commenced production of the M282 engine during the reporting period[26]. - The R&D center in Beijing Benz is the largest among Daimler's joint ventures, focusing on shortening development cycles and enhancing digital verification capabilities[30]. - Research and development expenses increased to RMB 1,211.3 million in the first half of 2019, a 9.2% growth from RMB 1,109.2 million in the first half of 2018[55]. Economic Environment - The overall economic environment in China showed a GDP growth of 6.3% year-on-year in the first half of 2019, despite significant downward pressure on the economy[24]. - The implementation of the "National VI" emission standards and the reduction of new energy vehicle subsidies are expected to have a profound impact on the domestic automotive industry[26]. Employee and Operational Metrics - Employee costs rose by 5.6% year-on-year, from RMB 2,779.1 million in the first half of 2018 to RMB 2,935.9 million in the first half of 2019, driven by increased headcount and wage growth[58]. - The number of employees increased from 20,431 at the end of 2018 to 21,289 by June 2019[58]. - The company has established over 600 dealer outlets nationwide, enhancing its market presence and dealer profitability[28].

Financial Performance - In 2018, BAIC Motor Corporation achieved consolidated revenue of RMB 151.92 billion and a net profit of RMB 14.27 billion[10]. - Revenue for 2018 reached 151,920 million, an increase of 13.3% compared to 134,159 million in 2017[17]. - Gross profit for 2018 was 37,007 million, up from 35,500 million in 2017, reflecting a gross margin improvement[17]. - Annual profit attributable to equity holders of the company was 4,429 million in 2018, a significant increase from 2,253 million in 2017[17]. - The company's debt-to-asset ratio improved from 64.4% at the end of 2017 to 59.8% at the end of 2018, a reduction of 4.6 percentage points[71]. - The foreign exchange loss decreased from RMB 1,366.0 million in 2017 to RMB 685.5 million in 2018, primarily due to effective hedging strategies and currency fluctuations[72]. - The total capital expenditure decreased from RMB 8,739.5 million in 2017 to RMB 6,414.1 million in 2018, a decline of 26.6%[71]. - Research and development expenses fell from RMB 2,788.3 million in 2017 to RMB 2,402.9 million in 2018, a decrease of 13.8%[71]. - The company recorded a 14.8% increase in sales volume for Beijing Benz vehicles[69]. - The revenue from Beijing brand decreased from RMB 17,385.6 million in 2017 to RMB 16,505.2 million in 2018, a decline of 5.1%[69]. Sales and Market Trends - The total sales of passenger vehicles in China decreased by 4.1% year-on-year, totaling 23.71 million units in 2018[11]. - In 2018, Beijing Automotive Group's total vehicle sales reached 1.46 million units, a year-on-year decline of 0.4%[43]. - The sales of new energy vehicles increased by 94.2% to 45,000 units, indicating a strong market demand for electric vehicles[44]. - The total sales of SUVs declined by 2.5% to 9.995 million units, while sedan sales fell by 2.7% to 11.528 million units[43]. - Beijing Benz sold 485,000 vehicles in 2018, representing a year-on-year growth of 14.8%[12]. - Beijing Hyundai's sales reached 790,000 units, marking a recovery in its market position[12]. - The new energy vehicle segment achieved sales of 1.053 million units, representing a remarkable growth of 82.0%[43]. Strategic Initiatives - The company plans to focus on high-quality development and optimize product structure in 2019[12]. - The company aims to enhance product, brand, and marketing capabilities to drive rapid and healthy development across its brands[12]. - The company is actively pursuing the development of new energy vehicles, including pure electric and hybrid models, to enhance its product offerings[30]. - The company plans to gradually complete the upgrade from traditional internal combustion engine products to hybrid products, including 48V hybrid models and PHEV plug-in hybrid models[31]. - The company aims to enhance its product competitiveness through R&D 2.0 and ensure the success of strategic vehicle models[64]. - The company intends to launch multiple new models equipped with intelligent connectivity technology and advanced new energy technologies[67]. Corporate Governance and Compliance - The company is committed to improving corporate governance and strengthening the functions of its board of directors[99]. - The board of directors consists of 15 members, including one executive director, nine non-executive directors, and five independent non-executive directors, ensuring compliance with corporate governance codes[173]. - The company has established a comprehensive and market-oriented corporate governance structure, including a general meeting of shareholders, a board of directors, and specialized committees[165]. - The company has made significant changes in its board composition, with several directors appointed and resigned during the year[180][188]. - The company has provided liability insurance for directors, supervisors, and senior management against legal claims in 2018[186]. Research and Development - The company has established a power battery factory outside Germany, which will produce multiple new energy power battery products in the future[32]. - The company has developed multiple engine and transmission products through cooperation and independent research and development, achieving mass production[32]. - The company has made significant progress in R&D, with new models like the EX5 and EU5 leading the industry in electric vehicle technology[52]. - The company aims to enhance its R&D capabilities in the high-end automotive sector through collaboration with Daimler[136]. Shareholder Value and Dividends - The board proposed a dividend of RMB 0.19 per share for the year, returning value to shareholders[12]. - The company is committed to enhancing product structure and profitability to better reward shareholders[91]. - The controlling shareholder, BAIC Group, owns 42.63% of the company and is ranked 124th in the Fortune Global 500, indicating significant market presence[41]. Economic Environment - The overall economic environment in China is projected to remain stable, but with ongoing downward pressure[12]. - The company anticipates that the potential growth rate of the passenger car market will continue to decline due to high ownership levels among the main purchasing demographic aged 25-55[59]. - In 2018, China's GDP growth rate was 6.6%, indicating economic downward pressure that could affect vehicle purchasing demand and the company's performance[75]. Related Party Transactions - The company has engaged in several ongoing related transactions with Daimler, which were exempted from strict compliance with listing rules due to business confidentiality[132]. - Daimler holds a 10.08% stake in the company, and after the issuance of 420 million new H-shares, it owns 49% of Beijing Benz, constituting a related party transaction[135]. - The company entered a general supply agreement with Daimler to purchase parts and materials for vehicle manufacturing, with an annual cap of RMB 434.1 million, RMB 1,924.8 million, and RMB 574 million for the respective fiscal years, and an actual transaction amount of RMB 1,396.8 million in 2018[136].