Company Overview - In 2019, China Huarong ranked 83rd in the Fortune 500 China list and was included in the top 300 of the interbank market trading list[11]. - The company aims to focus on its core business of non-performing asset management, serving the real economy, and preventing financial risks[11]. - China Huarong has established 31 subsidiaries, providing services across 30 provinces, autonomous regions, and municipalities in China, including Hong Kong and Macau[10]. - The company is committed to building a sustainable business model and achieving high-quality development[11]. - The total number of employees in the group is approximately 10,000[10]. - China Huarong's main business includes non-performing asset management, financial services, and investment management[10]. - The company was restructured into a joint-stock company in September 2012, with its shares listed on the Hong Kong Stock Exchange in October 2015[10]. - The company is one of the four major state-owned financial asset management companies established to address financial risks and promote state-owned bank reforms[10]. - The company plans to deepen reforms and transformations in the future[11]. Financial Performance - The company reported a cash dividend of RMB 0.110 per share for the fiscal year 2019, subject to shareholder approval[20]. - The financial report for 2019 was audited by Deloitte with a standard unqualified opinion[20]. - Total revenue for 2019 reached RMB 112,656.5 million, an increase from RMB 107,253.1 million in 2018, representing a growth of approximately 2.5%[26]. - Interest income decreased to RMB 38,530.0 million in 2019 from RMB 44,809.2 million in 2018, a decline of about 14%[26]. - The company reported a net profit of RMB 2,269.3 million for 2019, up from RMB 1,509.0 million in 2018, marking an increase of approximately 50%[26]. - The total assets as of December 31, 2019, were RMB 1,705,012.4 million, slightly down from RMB 1,710,086.7 million in 2018[27]. - The company’s cash and deposits with central banks increased to RMB 30,774.7 million in 2019 from RMB 29,909.1 million in 2018, reflecting a growth of about 2.9%[27]. - The provision for credit impairment losses rose to RMB 24,966.2 million in 2019, compared to RMB 17,297.8 million in 2018, indicating an increase of approximately 44%[26]. - The company’s equity attributable to shareholders was RMB 1,424.4 million in 2019, down from RMB 1,575.5 million in 2018, a decrease of about 9.6%[26]. - The company’s financing lease income decreased to RMB 5,911.6 million in 2019 from RMB 6,784.4 million in 2018, a decline of approximately 12.8%[26]. - The company’s investment income for 2019 was RMB 44,179.7 million, significantly higher than RMB 24,678.4 million in 2018, representing an increase of approximately 79%[26]. - The company’s total liabilities decreased to RMB 1,705,012.4 million in 2019 from RMB 1,710,086.7 million in 2018, indicating a slight reduction[27]. Business Segments - The company achieved a market share of 30% in asset package acquisitions, maintaining a leading position in the industry[34]. - The income from non-performing asset management business grew by 7.8% to RMB 69.791 billion, with its contribution to total group revenue increasing by 1.6 percentage points to 62.0%[34]. - The financial services segment generated total revenue of RMB 335.76 billion, reflecting a year-on-year increase of 10.9%[34]. - The pre-tax profit for the financial services segment was RMB 57.43 billion, which is a 27.6% increase from the previous year[34]. - The total revenue from the distressed asset management segment increased by 7.8% to RMB 69,790.8 million, while the financial services segment revenue rose by 10.9% to RMB 33,575.5 million[74]. Risk Management and Compliance - The company strengthened internal management and risk control, achieving growth in both bank credit scale and external financing balance[36]. - The company is committed to improving risk management capabilities and establishing a comprehensive risk management system[38]. - The company aims to gradually reduce non-core and non-advantageous business assets to consolidate its core business advantages[38]. - The group has established a three-tiered risk management system, integrating governance structure, professional teams, and operational defenses[179]. - The group has enhanced its credit risk management system, focusing on improving risk identification and control capabilities, and has made significant progress in risk asset disposal efficiency in 2019[180]. - The group established a dedicated internal control compliance department to strengthen operational risk management and conducted stress tests to identify and mitigate key operational risk areas in 2019[185]. Shareholder Information - The total number of shares outstanding as of December 31, 2019, was 39,070,208,462, with H shares accounting for 64.10% and domestic shares for 35.90%[193]. - The Ministry of Finance holds 9,901,084,435 domestic shares, representing 70.59% of the domestic share capital and 25.34% of the total share capital[195]. - The National Social Security Fund Council received a one-time transfer of 2,475,271,109 domestic shares, accounting for 17.65% of the domestic share capital and 6.34% of the total share capital[195]. - China Life Insurance (Group) Company holds 1,650,000,000 domestic shares, which is 11.76% of the domestic share capital and 4.22% of the total share capital[195]. - The proportion of shares held by major shareholders exceeding 5% has increased with the addition of the National Social Security Fund Council during the reporting period[200].

Company Overview - China Huarong Asset Management Co., Ltd. was established on November 1, 1999, and was listed on the Hong Kong Stock Exchange on October 30, 2015[7]. - The company operates 31 branches and provides financial services across 30 provinces, autonomous regions, and municipalities in China, including asset management and financial leasing[7]. Financial Performance - Total revenue for the year 2018 was RMB 107,253.1 million, a decrease of 16.3% compared to RMB 128,070.6 million in 2017[43]. - The company reported a net profit of RMB 1,509.0 million for 2018, a decline of 94.3% from RMB 26,587.7 million in 2017[43]. - The average return on equity dropped to 1.3% in 2018 from 18.1% in 2017, a decrease of 16.8 percentage points[48]. - Basic earnings per share fell to RMB 0.04 in 2018 from RMB 0.56 in 2017, a decline of 92.9%[48]. - The company’s tax expenses for the year were RMB 4,502.9 million, down from RMB 10,014.0 million in 2017[43]. Revenue Breakdown - Interest income increased significantly to RMB 79,258.8 million, up 6.4% from RMB 74,425.0 million in 2017[43]. - The company’s commission and fee income was RMB 4,693.3 million, a decrease of 64.1% from RMB 13,039.1 million in 2017[43]. - The company reported a significant increase in financing lease income to RMB 6,784.4 million, up from RMB 6,181.2 million in 2017[43]. - The non-performing asset management segment generated revenue of RMB 64,770.7 million, accounting for 60.4% of total revenue, while the financial services segment contributed RMB 30,274.7 million, or 28.2%[140]. Asset and Liability Management - Total assets decreased to RMB 1,710,086.7 million in 2018 from RMB 1,870,260.3 million in 2017, a decline of approximately 8.6%[44]. - Total liabilities decreased to RMB 1,541,481.7 million in 2018 from RMB 1,687,625.4 million in 2017, a decline of approximately 8.6%[47]. - The debt-to-asset ratio remained stable at 90.1% in 2018 compared to 90.2% in 2017[48]. - The total equity decreased to RMB 168,605.0 million in 2018 from RMB 182,634.9 million in 2017, a decline of approximately 7.7%[47]. Risk Management and Strategy - The company emphasizes the importance of risk control and reform transformation in its future strategy[9]. - The company is committed to ensuring the accuracy and completeness of its financial reports, taking legal responsibility for any misstatements[38]. - The company plans to enhance project recovery and risk mitigation efforts in response to the increased impairment losses[94]. - The company aims to strengthen its core business in non-performing assets and improve service to the real economy in 2019[60]. Investment and Capital Structure - The company has a total of 200 million preferred shares planned for issuance in overseas markets, with a total value not exceeding RMB 20 billion[35]. - The company issued USD 1.1 billion in overseas bonds and CNY 10 billion in secondary capital bonds, reflecting strong market confidence[51]. - The capital adequacy ratio stood at 13.62%, meeting regulatory requirements and improving compared to the same period last year[51]. Non-Performing Assets - The scale of non-performing asset business reached CNY 866.25 billion, generating revenue of CNY 64.77 billion, increasing its share of total revenue from 53.8% to 60.4%[51]. - The total amount of non-performing loans was RMB 532,946.4 million, an increase from RMB 468,892.2 million in 2017[142]. - The net profit from non-performing assets in 2018 amounted to RMB 8,652.8 million, up from RMB 4,583.1 million in 2017, indicating an increase of 88.8%[160]. Operational Challenges - The company faced increased interest expenses and market risks, leading to a substantial decline in profitability[67]. - The company reported a significant increase in other asset impairment losses, which rose by 203.3% to RMB 2,769.0 million[70]. - The actual tax rate increased significantly from 27.4% in 2017 to 74.9% in 2018, largely due to losses incurred by certain subsidiaries[99]. Future Outlook - The company plans to accelerate its transformation and development in 2019, aiming for high-quality growth and value creation for stakeholders[54]. - The company aims to enhance the value of non-performing assets through personalized restructuring methods, targeting companies with temporary liquidity issues[163]. - The company plans to adjust its strategy for special opportunity investments based on non-performing assets to mitigate existing risks and enhance collaboration with the parent company's non-performing asset business[185].