Financial Performance - Revenue for the year ended December 31, 2020, was RMB 19,576,938, a decrease of 11.0% from RMB 22,002,943 in 2019[4] - Gross profit for 2020 was RMB 2,707,118, down 9.6% from RMB 2,993,437 in 2019[4] - Profit for the year decreased by 42.5% to RMB 530,354 from RMB 922,749 in 2019[4] - Basic earnings per share for 2020 was RMB 0.57, a decline of 41.2% compared to RMB 0.97 in 2019[4] - The Group's total revenue for 2020 was RMB 19.6 billion, representing a decrease of approximately 11% compared to the previous year[20] - Profit attributable to shareholders for 2020 was RMB 517 million, a decrease of 41.5% from the previous year, with basic earnings per share dropping to RMB 0.57 from RMB 0.97[26] - Yarn sales revenue accounted for approximately 77.7% of total revenue, amounting to approximately RMB 15.2 billion, which is a decrease of 9.0% compared to last year[29] - The Group's midstream and downstream business achieved sales revenue of RMB 4.37 billion, representing a decrease of 17.3% compared to 2019[29] - The Group's revenue for 2020 decreased by 11% to RMB 19.6 billion, better than the previously estimated decline of 20%[32] - Yarn sales decreased by about 9.0% in 2020 compared to 2019, primarily due to a decrease in selling prices in the first half of the year[44] Assets and Liabilities - Total assets as of December 31, 2020, were RMB 20,157,279, a decrease of 4.8% from RMB 21,174,661 in 2019[5] - Total liabilities decreased by 10.6% to RMB 11,684,541 from RMB 13,075,286 in 2019[5] - Current ratio for 2020 was 1.2, down from 1.3 in 2019[6] - Net debt to equity ratio improved to 0.52 in 2020 from 0.86 in 2019[6] - As of December 31, 2020, the Group's total bank borrowings decreased by RMB1,221.5 million to RMB7,063.1 million[69] - Current bank borrowings increased by RMB477.9 million to RMB3,837.5 million, while non-current bank borrowings decreased by RMB1,699.4 million to RMB3,225.6 million[69] - The debt to equity ratio improved to 0.90 in 2020 from 1.11 in 2019[71] - The net debt to equity ratio decreased to 0.52 in 2020 from 0.86 in 2019[71] Operational Challenges - In 2020, the COVID-19 pandemic had a systemic impact on the global economy, significantly affecting the textile industry in China, which was already struggling from the Sino-US trade conflict[18] - The pandemic disrupted normal operations of production facilities, leading to challenges such as unsynchronized resumption of upstream and downstream industrial chains, insufficient customer orders, and raw material shortages[18] - After effective pandemic control in China, the worsening situation overseas caused a standstill in the textile export market, resulting in numerous suspended orders[18] - The Group's operational risks are heightened by the ongoing impact of COVID-19 on the textile retail industry in Europe and the United States[85] Production and Capacity - Major production facilities include approximately 4.1 million spindles and 1,900 weaving and knitting machines as of December 31, 2020[8] - The Group plans to increase production capacity of knitted garment fabrics to 100 tons per day in 2021, with expansion plans currently being implemented[22] - The Group aims to sell 840,000 tonnes of yarn, 60 million meters of grey fabrics, 140 million meters of woven garment fabrics, 30,000 tonnes of knitted garment fabrics, and 11 million pieces of jeanswear in 2021[42] - The production facilities include approximately 4.10 million spindles, with 2.51 million in the PRC and 1.59 million in overseas regions[41] Cash Flow and Financial Management - The Group has strengthened capital management, resulting in improved cash flow and debt ratio, achieving the best levels seen in recent years[20] - Net cash generated from operating activities was RMB3,300.8 million, a significant increase from RMB2,418.4 million in 2019[65] - Cash and cash equivalents at the end of 2020 were RMB2,944.2 million, up from RMB1,852.3 million in 2019[66] - The Group's inventories decreased by RMB1,304.4 million to RMB3,795.7 million, while trade and bills receivables increased by RMB200.9 million to RMB1,735.6 million[66] Market and Customer Base - The company has over 5,000 customers globally, with a sales network spanning across multiple regions including North America and Europe[8] - The Group's major market, the Chinese textile market, accounted for 70.4% of total sales in 2020[54] - The ten largest customers accounted for only 12.8% of total sales, indicating a diversified customer base[53] Risk Management - The Group manages foreign exchange risk primarily from borrowings and raw material procurement denominated in US$ or HK$, with measures in place to mitigate depreciation risk of RMB[75] - The fluctuation of cotton prices poses a significant risk, as it may not align with end-product prices, impacting the gross profit margin[87] - Foreign exchange fluctuations, particularly USD/RMB, may lead to material losses and affect procurement and financing costs[87] - The Group's financing needs are high, and failure to secure alternative financing could hinder business operations[88] Corporate Governance - The Group's board comprises eight directors, including five executive directors and three independent non-executive directors, ensuring a high level of corporate governance[130] - The Group has complied with the Corporate Governance Code provisions during the year ended December 31, 2020, emphasizing transparency and accountability[130] - The Board is responsible for overall strategy, investment plans, and significant financial matters, delegating day-to-day responsibilities to senior management[136] - The Company has established a remuneration committee, an audit committee, and a nomination committee, each with specific written terms of reference[147] Environmental and Social Responsibility - The Group is focusing on sustainable textile production by researching environmental protection technologies and planning to apply them in production[22] - The Group has established a factory internal check system to ensure compliance with environmental protection standards, particularly for raw materials like dyestuffs and chemicals[126] - The Group has not faced any fines or penalties related to environmental pollution in the past, but future regulatory changes could impose stricter controls and increase operational risks[121] Employee Management - The Group had a total workforce of 38,545 employees as of December 31, 2020, down from 41,108 in 2019, with a focus on optimizing human resources and competitive remuneration[78] - The Group emphasizes training and development of employees to foster a skilled and motivated workforce, crucial for its operational success[78] - The Group plans to enhance staff training and management capabilities to improve workforce efficiency and retention, addressing cultural differences in its expanding overseas operations[120]

[Financial Highlights](index=4&type=section&id=Financial%20Highlights) The company's 2019 financial performance saw revenue growth but a decline in profit attributable to shareholders, alongside an increase in total assets and equity | Indicator | 2019 (thousands of RMB) | 2018 (thousands of RMB) | YoY Change | | :--- | :--- | :--- | :--- | | **Operating Performance** | | | | | Revenue | 22,002,943 | 19,155,709 | 14.9% | | Gross Profit | 2,993,437 | 3,145,825 | -4.8% | | Profit for the Year | 922,749 | 1,167,943 | -21.0% | | Profit Attributable to Shareholders | 883,726 | 1,163,092 | -24.0% | | Basic Earnings Per Share (RMB) | 0.97 | 1.27 | -23.6% | | **Financial Position (Year-end)** | | | | | Total Assets | 21,174,661 | 18,770,015 | 12.8% | | Total Liabilities | 13,075,286 | 11,933,193 | 9.6% | | Equity Attributable to Shareholders | 7,473,456 | 6,738,637 | 10.9% | | **Financial Ratios** | | | | | Net Debt to Equity Ratio | 0.86 | 0.88 | - | | Return on Equity | 12% | 18% | - | [Corporate Profile and Structure](index=5&type=section&id=Corporate%20Profile%20and%20Structure) The group is a leading cotton textile manufacturer specializing in high-value-added core-spun products with global operations [Corporate Profile](index=5&type=section&id=Corporate%20Profile) Tianhong Textile Group is one of China's largest cotton textile manufacturers, focusing on high-value-added core-spun products with global sales and production facilities - The group is a leading cotton textile manufacturer specializing in high-value-added core-spun yarns, with operations across China, Vietnam, North America, Europe, and other regions[6](index=6&type=chunk)[7](index=7&type=chunk) - As of December 31, 2019, the group's main production facilities included approximately **4 million spindles** and **1,819 shuttle and knitting looms**[6](index=6&type=chunk)[7](index=7&type=chunk) [Chairman's Statement](index=9&type=section&id=Chairman's%20Statement) The Chairman's statement reviews the 2019 performance, highlighting revenue growth despite trade friction, and outlines strategic priorities for 2020 [Results](index=9&type=section&id=Results) Despite US-China trade friction, the group achieved nearly 15% revenue growth in 2019, but profit attributable to shareholders declined due to a significant drop in yarn business gross margin 2019 Performance Highlights | Indicator | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 22 billion RMB | - | Nearly 15% growth | | Yarn Sales Volume | Nearly 750,000 tons | - | Exceeded original target of 720,000 tons | | Yarn Gross Margin | 13.5% | 17.9% | Down 4.4 percentage points | | Profit Attributable to Shareholders | 884 million RMB | - | Down 24% | | Basic Earnings Per Share | 0.97 RMB | - | Down 24% | - Woven dyed fabric business benefited from the integration of Qingye Group, with sales revenue reaching **1.86 billion RMB**, a twofold increase year-on-year[16](index=16&type=chunk) [Outlook](index=10&type=section&id=Outlook) Facing trade friction and global pandemic uncertainties, the group will pursue internationalization and vertical integration strategies, focusing on overseas production and reduced capital expenditure - To counter trade friction, the group will adhere to internationalization and vertical integration strategies, establishing yarn and fabric production bases outside China to mitigate impacts and enhance profit stability[19](index=19&type=chunk)[23](index=23&type=chunk) - The group completed the reorganization of its knit fabric management team and denim apparel business in 2019, with a future focus on developing Vietnam production bases to enhance profitability[20](index=20&type=chunk) - Capital expenditure for 2020 is expected to significantly decrease, with the group focusing on utilizing existing capacity to improve profitability and reduce debt ratios, strengthening financial stability[21](index=21&type=chunk)[23](index=23&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the group's 2019 performance, industry trends, business segment analysis, future prospects, and financial position [Overview](index=11&type=section&id=Overview) In 2019, the group's revenue increased by 15% to 22 billion RMB, but profit attributable to shareholders decreased by 24% to 884 million RMB 2019 Performance Overview | Indicator | 2019 | YoY Change | | :--- | :--- | :--- | | Revenue | 22 billion RMB | +15% | | Profit Attributable to Shareholders | 884 million RMB | -24% | | Basic Earnings Per Share | 0.97 RMB | -23.6% | [Industry Review](index=11&type=section&id=Industry%20Review) The Chinese textile and apparel industry faced pressure in 2019, while Vietnam's textile sector demonstrated strong growth in exports - The Chinese textile and apparel industry faced challenges, with major enterprises experiencing year-on-year declines in both operating revenue and total profit[26](index=26&type=chunk)[30](index=30&type=chunk) - Vietnam's textile industry performed strongly, with year-on-year growth in both yarn and apparel exports[27](index=27&type=chunk)[30](index=30&type=chunk) [Business Review](index=11&type=section&id=Business%20Review) The group achieved record revenue in 2019, driven by yarn and dyed fabric sales, despite a significant decline in yarn gross margin Performance by Business Segment | Business Segment | 2019 Performance | Key Data/Changes | | :--- | :--- | :--- | | **Yarn** | Sales volume nearly 750,000 tons, exceeding expectations; but gross margin significantly declined | Revenue 16.7 billion RMB (+7.5%); gross margin from 17.9% to 13.5% | | **Grey Fabric** | External sales decreased, but gross margin benefited from vertical integration | Sales volume nearly 80 million meters; gross margin from 14.8% to 17.2% | | **Woven Dyed Fabric** | Benefited from the integration of Qingye Group's business, with significant growth in both sales volume and gross margin | Sales volume 100 million meters (more than doubled); gross margin to 16.6% | | **Knit Dyed Fabric** | Full-year sales target not met, but Q4 gross margin recovered | Sales volume approximately 17,000 tons | | **Denim Apparel** | Business reforms impacted sales volume, but operations concentrated in Vietnam base to enhance profitability | Sales volume increased year-on-year | - The group's overall gross margin decreased from **16.4% in 2018 to 13.6%**, primarily due to the drag from the yarn business[36](index=36&type=chunk)[40](index=40&type=chunk) [Prospects](index=13&type=section&id=Prospects) For 2020, the group will focus on maximizing existing capacity, significantly reducing capital expenditure, and improving profitability through optimized product mix and overseas advantages 2020 Sales Targets (Excluding Trading) | Product | Target Sales Volume | | :--- | :--- | | Yarn | 830,000 tons | | Grey Fabric | 60 million meters | | Woven Dyed Fabric | 140 million meters | | Knit Dyed Fabric | 25,000 tons | | Jeans | 14 million pairs | - Capital expenditure for 2020 is expected to significantly decrease to **below 800 million RMB**, which will help reduce the debt ratio and enhance financial security[38](index=38&type=chunk)[40](index=40&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) In 2019, total sales increased by 14.9% to 22 billion RMB, driven by yarn and fabric, with woven fabric being the fastest-growing segment, while overall gross margin declined 2019 Sales Revenue and Changes by Product | Product Category | 2019 Revenue (thousands of RMB) | 2018 Revenue (thousands of RMB) | Revenue Change | | :--- | :--- | :--- | :--- | | Stretch Core-Spun Yarn | 8,062,776 | 7,993,929 | 0.9% | | Other Yarn | 8,651,516 | 7,560,240 | 14.4% | | Stretch Grey Fabric | 560,477 | 649,110 | -13.7% | | Other Grey Fabric | 150,019 | 208,093 | -27.9% | | Woven Fabric | 2,694,451 | 1,122,412 | 140.1% | | Knit Fabric | 900,225 | 799,864 | 12.5% | | Jeans | 983,479 | 822,061 | 19.6% | | **Total** | **22,002,943** | **19,155,709** | **14.9%** | 2019 Cash Flow Summary (thousands of RMB) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 2,418,356 | 766,684 | | Net Cash Used in Investing Activities | (1,939,288) | (1,821,900) | | Net Cash from Financing Activities | 297,070 | 643,219 | | Cash and Cash Equivalents at Year-end | 1,830,859 | 1,054,721 | Key Financial Ratios at Year-end 2019 | Ratio | 2019 | 2018 | | :--- | :--- | :--- | | Current Ratio | 1.29 | 1.39 | | Debt to Equity Ratio | 1.11 | 1.06 | | Net Debt to Equity Ratio | 0.86 | 0.88 | - The company announced a final dividend of **15 HK cents per share** for 2019, maintaining a dividend policy of approximately **30% of net profit** when combined with the interim dividend of 18 HK cents[72](index=72&type=chunk)[75](index=75&type=chunk) [Material Risks of the Group](index=21&type=section&id=Material%20Risks%20of%20the%20Group) The group identified increased risks in business concentration, customer credit, product liability, environmental compliance, and taxation due to market changes and business expansion - Business concentration risk increased, primarily due to the potential impact of the global pandemic on the textile retail industry, affecting the entire supply chain, given the group's high concentration in the textile industry[80](index=80&type=chunk) - Customer credit management risk increased due to higher total receivables from increased business volume, unfavorable industry operating environment, and potential impact of the pandemic on customer cash flow[94](index=94&type=chunk) - Environmental compliance risk increased, mainly due to the addition of dyeing plant projects and stricter environmental regulations from various governments[109](index=109&type=chunk) - Financing risk increased, primarily due to significant capital expenditure in 2019 and increased difficulty and cost of obtaining loans amidst international trade disputes[91](index=91&type=chunk) [Corporate Governance Report](index=31&type=section&id=Corporate%20Governance%20Report) The Corporate Governance Report details the company's commitment to high governance standards, board structure, and internal control systems [Board and Committees](index=31&type=section&id=Board%20and%20Committees) The company maintains high corporate governance standards with a board comprising executive and independent non-executive directors, and separate roles for Chairman and CEO, supported by independent committees - The Board of Directors consists of **8 directors**, including **3 independent non-executive directors**, exceeding one-third, in compliance with governance requirements[114](index=114&type=chunk)[115](index=115&type=chunk) - The company has established a Remuneration Committee, Audit Committee, and Nomination Committee, with their composition and terms of reference complying with the Corporate Governance Code[130](index=130&type=chunk)[135](index=135&type=chunk)[142](index=142&type=chunk) - The roles of Chairman (Mr. Hong Tianzhu) and Chief Executive Officer (Mr. Zhu Yongxiang) are held by different individuals, complying with Code Provision A.2.1[128](index=128&type=chunk)[131](index=131&type=chunk) [Risk Management and Internal Control](index=45&type=section&id=Risk%20Management%20and%20Internal%20Control) The group has established a COSO-compliant risk management and internal control system, with the Board overseeing its effectiveness and adequacy - The group's risk management and internal control framework complies with the COSO Committee's Internal Control Framework, covering five key components[179](index=179&type=chunk) - The Board reviewed the risk management and internal control systems for the year ended December 31, 2019, deeming them effective and adequate, with no significant control deficiencies identified[191](index=191&type=chunk)[193](index=193&type=chunk) [Report of the Directors](index=60&type=section&id=Report%20of%20the%20Directors) The Directors' Report outlines the group's principal activities, business review, share option scheme, connected transactions, and major customers and suppliers [Principal Activities and Business Review](index=60&type=section&id=Principal%20Activities%20and%20Business%20Review) The group's core business involves manufacturing and selling yarn, grey fabric, fabric, and apparel across various regions, with a commitment to clean production and sustainability - The group's principal activities are the manufacturing and sale of yarn, grey fabric, fabric, and apparel[230](index=230&type=chunk) - The group primarily operates in China, Vietnam, Cambodia, Turkey, Nicaragua, and North America[232](index=232&type=chunk)[235](index=235&type=chunk) [Share Options](index=62&type=section&id=Share%20Options) The company adopted a ten-year share option scheme in 2014 to incentivize contributors, with executive directors holding unexercised options as of year-end 2019 Unexercised Share Options Held by Directors (as of December 31, 2019) | Director Name | Number of Unexercised Share Options | | :--- | :--- | | Mr. Tang Daoping | 2,000,000 | | Mr. Xu Zihui | 4,500,000 | [Connected Transactions](index=72&type=section&id=Connected%20Transactions) During the reporting period, the group engaged in significant connected transactions, including service agreements with a related party and a major acquisition - The group entered into various water, electricity, steam supply, and sewage treatment service agreements with Tianhong Industrial Park (Vietnam) Co., Ltd., a related party controlled by the Chairman and CEO, with annual caps set[297](index=297&type=chunk)[313](index=313&type=chunk) - In December 2019, the group acquired land use rights in Vietnam from related party Tianhong Industrial Park for a total consideration of approximately **106 million RMB**[315](index=315&type=chunk)[317](index=317&type=chunk) - The group completed the acquisition of Winnitex Group in April 2019 for a total consideration of **1.35 billion HKD**, which constituted a discloseable transaction[318](index=318&type=chunk)[320](index=320&type=chunk) [Major Customers and Suppliers](index=71&type=section&id=Major%20Customers%20and%20Suppliers) The group maintains a relatively diversified customer and supplier base, with no single customer or supplier dominating sales or procurement 2019 Customer and Supplier Concentration | Category | Percentage of Total | | :--- | :--- | | Largest Supplier | 13.0% | | Top Five Suppliers Combined | 24.1% | | Largest Customer | 3.5% | | Top Five Customers Combined | 9.2% | [Environmental, Social and Governance Report](index=81&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report details the group's commitment to environmental protection, social responsibility, and sustainable development practices [Green Operation](index=108&type=section&id=Green%20Operation) The group is committed to green operations and clean production, enhancing resource efficiency and reducing emissions through technological upgrades and improved management 2017-2019 Resource Consumption and Emission Data | Indicator | Unit | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | | **Resource Consumption** | | | | | | Total Energy Consumption | MWh | 2,057,828 | 1,693,089 | 1,591,916 | | Energy Intensity | MWh/million RMB sales | 93.5 | 88.4 | 97.6 | | Total Water Consumption | tons | 10,280,314 | 12,473,850 | 8,651,940 | | Water Intensity | tons/million RMB sales | 467.2 | 651.2 | 530.6 | | **Emissions** | | | | | | Total GHG Emissions | tons of CO2e | 1,502,785 | 1,272,418 | 1,219,903 | | GHG Emission Intensity | tons of CO2e/million RMB sales | 68.3 | 66.4 | 74.8 | | Hazardous Waste Emissions | tons | 12,348 | 6,630 | 4,850 | | Non-Hazardous Waste Emissions | tons | 14,808 | 13,035 | 7,722 | - The group's subsidiary, Zhongzhan Textile, received the "Bank of China (Hong Kong) Corporate Environmental Leadership Award" and the "Guangdong-Hong Kong Clean Production Excellent Partner (Manufacturing)" logo, demonstrating its contributions to environmental protection and clean production[434](index=434&type=chunk) [Joint Development of Harmony](index=121&type=section&id=Joint%20Development%20of%20Harmony) The group actively fulfills its social responsibilities, contributing to society through charitable donations, school-enterprise cooperation, and support for vulnerable groups - In early 2020, to combat the COVID-19 pandemic, the group donated **5 million RMB** through a charity federation for epidemic prevention and control[481](index=481&type=chunk) - In 2019, Tianhong Times donated **4 million RMB** to the Nantong University Education Development Foundation[482](index=482&type=chunk)[484](index=484&type=chunk) - The group actively engages in school-enterprise cooperation and provides scholarships and internship opportunities to several universities in Vietnam, supporting local education initiatives[482](index=482&type=chunk)[488](index=488&type=chunk)[491](index=491&type=chunk) [Independent Auditor's Report](index=122&type=section&id=Independent%20Auditor's%20Report) The Independent Auditor's Report provides the auditor's opinion on the financial statements and highlights key audit matters [Auditor's Opinion and Key Audit Matters](index=122&type=section&id=Auditor's%20Opinion%20and%20Key%20Audit%20Matters) PricewaterhouseCoopers issued an unmodified opinion on the group's 2019 consolidated financial statements, with key audit matters being revenue recognition and business combinations - The auditor believes that the consolidated financial statements fairly and accurately reflect the group's financial position and performance in accordance with Hong Kong Financial Reporting Standards[493](index=493&type=chunk) - Key audit matters include: - **Revenue Recognition:** Given the significant sales volume and dispersed customer base, the auditor focused on the occurrence, accuracy, and timely recording of revenue - **Business Combinations:** The acquisition of Winnitex Group resulted in significant negative goodwill, involving substantial judgments and assumptions in valuing intangible and tangible assets and allocating consideration[499](index=499&type=chunk)[501](index=501&type=chunk) [Consolidated Financial Statements](index=130&type=section&id=Consolidated%20Financial%20Statements) This section presents the group's comprehensive financial statements, including the income statement, balance sheet, and cash flow statement [Consolidated Income Statement](index=132&type=section&id=Consolidated%20Income%20Statement) In 2019, the group's revenue grew by 14.9% to 22.003 billion RMB, but operating profit and profit for the year declined due to increased cost of sales and expenses 2019 Consolidated Income Statement Summary (thousands of RMB) | Item | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 22,002,943 | 19,155,709 | 14.9% | | Gross Profit | 2,993,437 | 3,145,825 | -4.8% | | Operating Profit | 1,634,461 | 1,895,474 | -13.8% | | Profit Before Income Tax | 1,114,800 | 1,423,900 | -21.7% | | Profit for the Year | 922,749 | 1,167,943 | -21.0% | | Profit Attributable to Owners of the Company | 883,726 | 1,163,092 | -24.0% | [Consolidated Balance Sheet](index=130&type=section&id=Consolidated%20Balance%20Sheet) As of year-end 2019, total assets increased by 12.8% to 21.175 billion RMB, driven by non-current assets, while total liabilities grew by 9.6% to 13.075 billion RMB, maintaining a stable financial structure 2019 Consolidated Balance Sheet Summary (thousands of RMB) | Item | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current Assets | 11,374,054 | 9,336,032 | 21.8% | | Current Assets | 9,800,607 | 9,433,983 | 3.9% | | **Total Assets** | **21,174,661** | **18,770,015** | **12.8%** | | **Equity and Liabilities** | | | | | Total Equity | 8,099,375 | 6,836,822 | 18.5% | | Non-current Liabilities | 5,492,066 | 5,159,770 | 6.4% | | Current Liabilities | 7,583,220 | 6,773,423 | 12.0% | | **Total Liabilities** | **13,075,286** | **11,933,193** | **9.6%** | | **Total Equity and Liabilities** | **21,174,661** | **18,770,015** | **12.8%** | [Consolidated Cash Flow Statement](index=136&type=section&id=Consolidated%20Cash%20Flow%20Statement) In 2019, net cash from operating activities significantly increased to 2.418 billion RMB, while investing activities consumed cash for expansion and acquisitions, resulting in higher year-end cash and equivalents 2019 Consolidated Cash Flow Statement Summary (thousands of RMB) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 2,418,356 | 766,684 | | Net Cash Used in Investing Activities | (1,939,288) | (1,821,900) | | Net Cash from Financing Activities | 297,070 | 643,219 | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | **776,138** | **(411,997)** | | Cash and Cash Equivalents at Beginning of Year | 1,054,721 | 1,466,718 | | Cash and Cash Equivalents at End of Year | 1,830,859 | 1,054,721 |