香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產 生或因倚賴該等內容而引致的任何損失承擔任何責任。 China Success Finance Group Holdings Limited 中 國 金 融 發 展（ 控 股 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：3623） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 全 年 業 績 公 告 財務摘要 截至二零二二年 截至二零二一年 十二月三十一日 十二月三十一日 止年度 止年度 （人民幣千元） （人民幣千元） 變動百分比 收益 88,479 102,616 -13.8% 其他收益 14,493 1,910 658.8% 除稅前虧損 (84,171) (63,084) 33.4% 年內虧損 (82,467) (82,618) -0.2% 年度全面虧損總額 (82,770) (81,066) 2.1% ...

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 46,468,000, a decrease of 35.7% compared to RMB 72,243,000 in the same period of 2021[6] - The company reported a loss before tax of RMB (67,841,000), a decline of 586.1% compared to a profit of RMB 13,957,000 in the previous year[6] - The total comprehensive loss for the six months ended June 30, 2022, was RMB 67,898 thousand, compared to a comprehensive income of RMB 6,273 thousand in the same period last year[78] - The group reported a basic loss per share of RMB 0.11 for the six months ended June 30, 2022, compared to earnings of RMB 0.02 per share in the same period last year[75] - The company reported a pre-tax loss of RMB 67,841,000 for the six months ended June 30, 2022, compared to a profit of RMB 13,957,000 for the same period in 2021[122] Income and Revenue Sources - Other income increased by 112.6% to RMB 8,546,000 from RMB 4,020,000 year-on-year[6] - The revenue from non-financing guarantee services increased by approximately 66.7% to about RMB 0.5 million, compared to RMB 0.3 million in the same period last year[31] - The revenue from market pig sales was approximately RMB 31.1 million, an increase from RMB 27.8 million in the previous year[35] - The net income from financing guarantee services decreased by approximately 67.6% to about RMB 14.3 million, down from RMB 44.1 million in the previous year[28] - Total revenue from guarantee fees for the six months ended June 30, 2022, was RMB 61,462 thousand, down 49.3% from RMB 121,337 thousand in the same period of 2021[100] Assets and Liabilities - Total assets as of June 30, 2022, were RMB 833,300,000, down 9.6% from RMB 922,182,000 at the end of 2021[6] - Total equity decreased by 14.3% to RMB 351,030,000 from RMB 409,476,000 at the end of 2021[6] - The company's net assets decreased to RMB 351,030 thousand from RMB 409,476 thousand, a decline of around 14%[83] - Total liabilities decreased to RMB 482,270 thousand from RMB 512,706 thousand, reflecting a reduction of approximately 6%[80] - The capital-to-debt ratio increased from approximately 125.2% at the end of 2021 to about 137.4% as of June 30, 2022, primarily due to a decrease in total equity[58] Operational Strategies - The company has adopted a cautious approach to business expansion amid increasing economic uncertainties and the impact of the pandemic[9] - The group is focusing on optimizing its business structure to adapt to changing market demands, particularly in the technology finance sector[10] - The group continues to enhance its risk management capabilities to ensure sustainable development in a challenging economic environment[9] - The group plans to enhance its risk management and business expansion strategies, focusing on traditional business development while optimizing its business model[13] - The company plans to continue developing traditional businesses prudently while exploring new cooperation opportunities to enhance long-term stable growth[63] Market and Economic Conditions - The GDP growth rate for the first half of 2022 was 2.5%, showing a significant slowdown compared to previous periods[16] - The overall economic performance in Hong Kong faced a recession in the first half of 2022 due to the impact of the fifth wave of the pandemic[16] - The macroeconomic outlook for the second half of 2022 remains uncertain due to ongoing geopolitical conflicts and inflation risks, impacting economic recovery[60] - The group is facing cost challenges due to supply chain issues and inflationary pressures, which may impact its operational strategies[66] Business Development and Expansion - The company is actively seeking opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area, which is identified as a key development strategy in the 14th Five-Year Plan[10] - The group is actively integrating into the Greater Bay Area strategy, focusing on providing specialized financial services to clients[21] - The group plans to enhance its strength through investments and acquisitions to explore new business opportunities and expand its market presence[68] - The group aims to support the development of small and micro enterprises by leveraging national financial support policies[10] - The group is committed to enhancing its technological financial capabilities to meet diverse customer needs through personalized financial service solutions[20] Impairment and Provisions - The impairment loss provision for the first half of 2022 was approximately RMB 58.6 million, an increase of about RMB 63.7 million compared to the RMB 5.1 million reversal in the same period of 2021[41] - The group recorded a significant increase in impairment losses due to rising default risks in the real estate sector, with a provision of approximately RMB 24.5 million for construction industry clients[41] - The provision for bad debts increased to RMB 123,519,000 as of June 30, 2022, compared to RMB 98,989,000 as of December 31, 2021, reflecting a rise of approximately 24.7%[138] - The total provision for credit losses as of June 30, 2022, is RMB 153,873,000, compared to RMB 140,570,000 at the end of the previous year, indicating a significant increase in risk assessment[161] Cash Flow and Financial Position - Operating cash used for the six months ended June 30, 2022, was RMB (20,622) thousand, a decrease from RMB (33,835) thousand in the same period of 2021, representing a 39.5% improvement[92] - Net cash used in investing activities for the six months ended June 30, 2022, was RMB (5,336) thousand, significantly lower than RMB (60,797) thousand in the previous year, indicating an 91.2% reduction[92] - The company reported a total cash and cash equivalents increase of RMB 5,572 thousand for the six months ended June 30, 2022, compared to a decrease of RMB (47,449) thousand in the same period of 2021[92] - As of June 30, 2022, cash and cash equivalents amounted to RMB 34,335,000, an increase from RMB 29,723,000 as of December 31, 2021, representing a growth of approximately 15.4%[129] - The company incurred a foreign exchange loss of approximately RMB 1.1 million compared to the same period last year[45] Biological Assets and Agriculture - The group has officially launched self-bred pigs in April 2022, with an output of over 10,000 pigs during the reporting period[12] - The company reported a total of RMB 47,588 thousand in biological assets as of June 30, 2022, up from RMB 26,737 thousand, marking an increase of approximately 78%[80] - As of June 30, 2022, the total current biological assets (market pigs) amounted to RMB 34.799 million, while non-current biological assets (breeding pigs) amounted to RMB 12.789 million[174] - The market price for piglets was RMB 540.7 per head, while the market price for fattening pigs increased to RMB 21.6 per kilogram from RMB 17.8 per kilogram in the previous year[184] - The group anticipates accelerated growth in market pig sales revenue in the second half of 2022, supported by national policy and recovery in pig production[36]

Financial Performance - Revenue for the year ended December 31, 2021, was RMB 102.616 million, a decrease of 40.3% compared to RMB 171.955 million in 2020[8] - Other income dropped by 87.1% to RMB 1.910 million from RMB 14.763 million in the previous year[8] - The pre-tax loss for 2021 was RMB 63.084 million, a slight improvement of 6.2% from RMB 67.253 million in 2020[8] - The company reported a total comprehensive loss of RMB (81.066) million, which is a 3.6% increase in loss compared to RMB (78.257) million in 2020[8] - The operating loss margin was reported at (61.5%) for 2021, compared to (39.1%) in 2020[12] - The cost-to-income ratio increased to 56.6% from 38.9% in the previous year, indicating higher operational costs relative to income[12] - Basic loss per share improved to RMB (0.13) from RMB (0.16), reflecting an 18.8% reduction in loss per share[8] - Net income from financing guarantee services was approximately RMB 74.0 million, down 53.0% from RMB 157.4 million in the previous year, due to a reduction in new guarantee business and the expiration of existing guarantees[38] - Revenue from market pig sales reached approximately RMB 27.9 million, significantly increasing from RMB 8.9 million in the previous year, reflecting accelerated growth in sales[44] Assets and Equity - Total assets decreased by 23.1% to RMB 922.182 million from RMB 1,198.874 million in 2020[9] - Total equity fell by 14.7% to RMB 409.476 million compared to RMB 479.903 million in the prior year[9] - Cash and bank deposits decreased from approximately RMB 354.1 million at the end of 2020 to RMB 185.4 million at the end of 2021, a decline of about 47.5%[66] - The net value of receivables from default guarantee payments increased significantly from approximately RMB 3.1 million at the end of 2020 to RMB 20.9 million at the end of 2021[64] - The group's capital-to-debt ratio improved from approximately 149.8% at the end of 2020 to about 125.2% at the end of 2021, primarily due to a reduction in total liabilities[69] Economic Environment - Global inflationary pressures and supply chain crises have increased uncertainty in economic recovery[19] - The total economic output in mainland China exceeded RMB 110 trillion in 2021, surpassing the initial growth target of over 6%[16] - Hong Kong's GDP recorded a growth of 6.4% in 2021, reversing the downturn of the previous two years[16] - In 2021, China's GDP exceeded RMB 110 trillion, growing by 8.1% compared to the previous year, surpassing the initial target of over 6% growth[24] - Hong Kong's GDP grew significantly by 6.4% in 2021, reversing the decline of the previous two years, although it has not fully recovered to pre-pandemic levels[24] Business Strategy and Development - The company continues to explore new strategies for market expansion and product development to improve financial performance in the future[12] - The group plans to leverage its comprehensive financial services and technology finance advantages to capture opportunities in the Greater Bay Area[20] - The group aims to enhance risk prevention capabilities while actively seizing market opportunities to create higher value for shareholders[20] - The group is committed to steady development of traditional businesses while adapting to the complex economic environment[20] - The group focused on optimizing its business structure through financial technology, enhancing cooperation with financial institutions to support small and micro enterprises[27] - The group is exploring financial cooperation opportunities along the entire breeding industry chain, focusing on supply chain integrated financial services[36] - The company plans to strengthen its traditional business while exploring new business models in response to policy guidance, aiming to provide more diversified financial services[77] - The company aims to establish a one-stop financial service platform in the pig farming sector, aligning with national agricultural support policies to enhance profitability[81] Risk Management - The group recognized the importance of risk prevention and financial technology application, maintaining a prudent and stable business approach amid complex economic conditions[25] - The company will continue to enhance its risk management capabilities by integrating technology into its financial services[79] - The group will continue to explore the integration of finance and the real economy, particularly in the context of national financial support policies for small and micro enterprises[19] Employee Relations and Compensation - As of December 31, 2021, the company employed 93 full-time employees, with total employee costs (including director remuneration) amounting to approximately RMB 27.6 million[70] - The company recognizes the importance of maintaining good employee relations and regularly provides training to enhance employees' understanding of business and regulatory requirements[70] - The remuneration policy for directors is determined by the remuneration committee and considers the company's performance and market practices[159] Stock Options and Share Capital - The company has a stock option plan allowing for the issuance of 10 million shares, representing 1.83% of the total issued shares[104] - The company granted a total of 10,000,000 stock options under the pre-IPO stock option plan, with allocations of 1,000,000, 3,000,000, and 6,000,000 options to directors, senior management, and other employees respectively[106] - The exercise price of the stock options is set at HKD 1.90, which represents a discount of approximately 17.4% compared to the midpoint of the indicative offer price range of HKD 2.30[110] - The maximum number of shares that can be issued under the post-IPO share option plan is capped at 10% of the total issued shares as of the listing date, which translates to a limit of 54,301,362 shares, approximately 9.92% of the 547,600,780 shares issued as of the report date[122] - The total number of share options available for performance-based employees is 25,000,000, with specific tranches allocated for different periods[147] Environmental, Social, and Governance (ESG) - The company has established an environmental, social, and governance (ESG) committee to regularly assess the environmental impact of its operations[200] - The company has implemented energy-saving measures and is committed to increasing the use of renewable energy[199] - The company has not identified any non-compliance with environmental laws and regulations during the reporting period[200]

Company Information [Company Information](index=2&type=section&id=公司資料) This section provides fundamental company details Overview [Overview](index=4&type=section&id=概%20要) During the reporting period, the Group's revenue decreased by 17.3% year-on-year, but successfully turned losses into profits, achieving a pre-tax profit of approximately RMB 13.96 million, while total assets slightly decreased and total equity increased [Financial Summary](index=4&type=section&id=財務摘要) For the six months ended June 30, 2021, the Group's revenue was RMB 62.39 million, a 17.3% year-on-year decrease, yet it successfully turned losses into profits, recording a profit of RMB 4.97 million for the period, with total assets decreasing to RMB 1.08 billion and total equity increasing to RMB 495.39 million Financial Performance and Position | Indicator | H1 2021 (RMB thousands) | H1 2020 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 62,386 | 75,434 | -17.3% | | Profit/(Loss) before tax | 13,957 | (2,713) | -614.4% (Turned profitable) | | Profit/(Loss) for the period | 4,970 | (17,464) | -128.5% (Turned profitable) | | Earnings/(Loss) per share (RMB) | 0.02 | (0.03) | -166.7% (Turned profitable) | | **Assets & Equity (Period-end comparison)** | **As at June 30, 2021** | **As at December 31, 2020** | **Change %** | | Total assets | 1,082,562 | 1,198,874 | -9.7% | | Total equity | 495,386 | 479,903 | 3.2% | Chairman's Report [Chairman's Report](index=5&type=section&id=主席報告) Despite a complex market and recurring pandemic in H1 2021, the Group prudently developed traditional financial businesses, actively pursued Greater Bay Area opportunities, and explored a "finance + real economy" model, with its pig farm commencing operations, while planning future strategic investments to enhance competitiveness - Facing a complex market environment, the Group adhered to prudent and stable principles, strategically developed traditional guarantee businesses, and continuously optimized its business structure, deeply cultivating the FinTech sector[12](index=12&type=chunk) - The Group actively explored a "finance + real economy" integration model, with its pig farm in the Greater Bay Area completing basic construction and officially commencing operations during the period, laying the foundation for future development of integrated supply chain financial services[14](index=14&type=chunk) - Looking ahead to the second half of the year, the Group will continue to prudently develop traditional businesses, seize policy opportunities for financial support to SMEs, and operate the pig farm in a modernized, large-scale manner, developing full industry chain financial products[16](index=16&type=chunk) - The Group plans to seek new commercial investment opportunities through investment, equity participation, or acquisition, providing integrated industry chain financial services point-by-point to enhance overall competitiveness[19](index=19&type=chunk) Management Discussion and Analysis [Management Discussion and Analysis](index=8&type=section&id=管理層討論與分析) In H1 2021, the Group adopted a prudent strategy, slowing traditional financial business but seeking new growth through Greater Bay Area services and pig farming, successfully turning losses into profits with a pre-tax profit of RMB 14 million due to controlled expenses and impairment reversals, leading to an optimized financial structure [Business Review](index=9&type=section&id=業務回顧) The Group prudently developed traditional financial businesses while actively promoting Greater Bay Area integrated services and deepening cooperation, notably exploring a "finance + real economy" model with its invested pig farm commencing operations, laying the foundation for developing supply chain finance - Traditional guarantee business adopted a prudent strategy, with slower business development, while continuing to strategically position in FinTech and explore diversified cooperation with financial institutions[25](index=25&type=chunk) - Seized opportunities from Greater Bay Area construction, integrating resource advantages to strategically position integrated financial services[27](index=27&type=chunk) - The invested Greater Bay Area modernized pig farm officially commenced operations, with an existing sow inventory of **1,998** heads, expected to sell **60,000** commercial pigs annually. Despite initial investments and a decline in pig prices, no profit was realized in the reporting period, but it laid the foundation for supply chain financial services[30](index=30&type=chunk) [Financial Review](index=11&type=section&id=財務回顧) In H1 2021, the Group's total revenue decreased by 19.6% to RMB 66.4 million, primarily due to reduced financing guarantee income, but effective operating expense control and impairment reversals led to a pre-tax profit of RMB 14 million, successfully turning losses into profits and optimizing the capital structure Revenue Sources | Revenue Source | H1 2021 (RMB millions) | H1 2020 (RMB millions) | Change | | :--- | :--- | :--- | :--- | | Financing guarantee services | 44.1 | 91.3 | -51.7% | | Non-financing guarantee services | 0.3 | 0.4 | -25.0% | | Financial advisory services | 0.02 | 1.4 | -98.6% | | Commercial pig sales | 27.8 | 0 | New | | **Total Revenue** | **Approx. 66.4** | **Approx. 82.6** | **-19.6%** | - Operating expenses decreased by **27.4%** year-on-year to **RMB 27 million**, primarily due to reduced intermediary consulting fees and business entertainment expenses resulting from business structure adjustments[47](index=47&type=chunk)[49](index=49&type=chunk) - From a pre-tax loss of **RMB 2.7 million** in the same period last year, the Group recorded a pre-tax profit of **RMB 14 million** in the current period, mainly due to significant reductions in operating expenses and losses from investments in associates, as well as an impairment and provision reversal of **RMB 5.1 million**[51](index=51&type=chunk) - The capital gearing ratio decreased from **149.8%** at the end of 2020 to **118.5%**, primarily due to a decrease in total liabilities resulting from reduced guarantee liabilities and other payables[60](index=60&type=chunk) [Prospects and Outlook](index=17&type=section&id=前景及展望) Looking ahead to H2 2021, the Group will continue to prudently develop traditional businesses, deepen FinTech cooperation, accelerate the "finance + real economy" model in pig farming, promote Greater Bay Area services, and seek new growth through investments to enhance core competitiveness - Guarantee business will continue to explore FinTech and cooperate with financial institutions to design new products to increase revenue streams[66](index=66&type=chunk) - Accelerate the exploration of a "finance + real economy" integration model, operating pig farms in a modernized, large-scale manner, and developing full industry chain financial products in response to national financial support policies for agriculture[69](index=69&type=chunk) - Will continue to seize opportunities from Greater Bay Area construction, providing specialized financial services to enterprises in the region[70](index=70&type=chunk) - Plans to seek new commercial investment opportunities through investment, equity participation, or acquisition to expand business markets and enhance overall competitiveness[71](index=71&type=chunk) Interim Financial Information Review Report [Interim Financial Information Review Report](index=19&type=section&id=中期財務資料審閱報告) KPMG reviewed the Group's interim financial report for the six months ended June 30, 2021, and found no material issues indicating non-compliance with Hong Kong Accounting Standard 34 - Auditor KPMG issued an unqualified review conclusion on the interim financial report[76](index=76&type=chunk) Consolidated Financial Statements [Consolidated Financial Statements](index=20&type=section&id=綜合財務報表) This section presents the Group's consolidated financial performance and position, including income, balance sheet, and cash flow statements [Consolidated Statement of Profit or Loss](index=20&type=section&id=綜合損益表) For the six months ended June 30, 2021, the Group recorded revenue of RMB 62.39 million and achieved a profit for the period of RMB 4.97 million, successfully reversing last year's loss, with profit attributable to equity holders of the company at RMB 8.20 million Consolidated Statement of Profit or Loss | Item (RMB thousands) | For the six months ended June 30, 2021 | For the six months ended June 30, 2020 | | :--- | :--- | :--- | | Revenue | 62,386 | 75,434 | | Profit/(Loss) before tax | 13,957 | (2,713) | | Profit/(Loss) for the period | 4,970 | (17,464) | | Profit/(Loss) attributable to equity holders of the Company | 8,195 | (17,994) | [Consolidated Statement of Financial Position](index=22&type=section&id=綜合財務狀況表) As at June 30, 2021, the Group's total assets decreased to RMB 1.083 billion, total liabilities decreased to RMB 587 million, and net assets (total equity) increased to RMB 495 million Consolidated Statement of Financial Position | Item (RMB thousands) | As at June 30, 2021 | As at December 31, 2020 | | :--- | :--- | :--- | | Total assets | 1,082,562 | 1,198,874 | | Total liabilities | 587,176 | 718,971 | | Net assets | 495,386 | 479,903 | | Total equity attributable to equity holders of the Company | 499,065 | 480,357 | [Condensed Consolidated Statement of Cash Flows](index=26&type=section&id=簡明綜合現金流量表) For the six months ended June 30, 2021, operating and investing activities resulted in net cash outflows of RMB 36.4 million and RMB 60.8 million respectively, while financing activities generated a net inflow of RMB 49.74 million, leading to a net decrease in cash and cash equivalents of RMB 47.45 million Condensed Consolidated Statement of Cash Flows | Activity (RMB thousands) | For the six months ended June 30, 2021 | For the six months ended June 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | (36,395) | (75,746) | | Net cash used in investing activities | (60,797) | (23,282) | | Net cash from/(used in) financing activities | 49,743 | (5,935) | | **Net decrease in cash and cash equivalents** | **(47,449)** | **(104,963)** | Notes to the Unaudited Interim Financial Report [Notes to the Unaudited Interim Financial Report](index=27&type=section&id=未經審核中期財務報告附註) The financial report notes detail accounting policies and financial data changes, highlighting decreased financial services income, new pig sales business, fair value losses on biological assets, convertible bond covenant breaches under negotiation, and disclosures on related party transactions, share capital, and share option schemes [Revenue and Segment Reporting](index=29&type=section&id=3%20收益及分部報告) During the reporting period, the Group's total revenue was RMB 62.39 million, with financial services contributing RMB 36.62 million in profit and the new pig sales segment contributing RMB 25.77 million in revenue but recording a pre-tax loss of RMB 6.51 million Reportable Segments | Reportable Segment (RMB thousands) | Financial Services | Pig Sales | Total | | :--- | :--- | :--- | :--- | | Reportable segment revenue | 36,621 | 25,765 | 62,386 | | Reportable segment profit/(loss) before tax | 20,466 | (6,509) | 13,957 | | Reportable segment assets (as at 2021/6/30) | 839,186 | 181,064 | 1,020,250 | | Reportable segment liabilities (as at 2021/6/30) | 401,576 | 169,670 | 571,246 | [Biological Assets](index=55&type=section&id=15%20生物資產) At the end of the reporting period, the fair value of the Group's biological assets, primarily commercial and breeding pigs, significantly decreased to RMB 11.03 million due to a RMB 17.73 million loss from fair value changes, with 1,998 breeding pigs owned - Due to pig price fluctuations, a net loss of approximately **RMB 17.73 million** from fair value changes of biological assets was recorded in the current period[200](index=200&type=chunk) - As at June 30, 2021, the Group owned **1,998** non-current biological assets (breeding pigs)[204](index=204&type=chunk) [Convertible Bonds](index=64&type=section&id=24%20可換股債券負債部分) As at June 30, 2021, the Group failed to meet certain financial covenants of its convertible bonds, triggering a potential immediate repayment right, though no demand has been received and the company is negotiating with bond purchasers to update terms - The Group breached financial covenants of its convertible bonds, including net assets below the required level and capital gearing ratio exceeding the upper limit[249](index=249&type=chunk) - Despite the default, bond purchasers have not yet demanded immediate repayment. The Group is negotiating with them to update the agreement terms, and Chairman Mr. Zhang Tiewei will continue to provide personal guarantees for the bonds[250](index=250&type=chunk) [Share Capital and Reserves](index=70&type=section&id=28%20股本及儲備) During the reporting period, the company's ordinary shares increased due to convertible bond conversions and share option exercises, with no dividends declared, and total distributable reserves at period-end were approximately RMB 395 million - The Board did not recommend the payment of any dividend for the six months ended June 30, 2021[275](index=275&type=chunk)[286](index=286&type=chunk) - Due to convertible bond conversions and share option exercises, issued ordinary shares increased from **534 million** to **543 million** shares[276](index=276&type=chunk) Other Information [Other Information](index=77&type=section&id=其他資料) This section discloses dividend policy, director and major shareholder holdings, share option scheme changes, corporate governance compliance, and other significant matters, including the Board's decision not to declare an interim dividend and the pledging of a pig farming subsidiary's equity for bank financing [Dividends](index=77&type=section&id=股息) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2021 - The Board resolved not to declare an interim dividend for 2021[309](index=309&type=chunk) [Share Option Schemes](index=81&type=section&id=購股權計劃) The company maintains pre-IPO and post-IPO share option schemes, with 15,000 pre-IPO options lapsing and 30,000 post-IPO options exercised during the period, and the post-IPO scheme limit was updated to 54,301,362 shares on May 27, 2021 - As at June 30, 2021, **6,458,000** unexercised share options remained under the pre-IPO share option scheme[335](index=335&type=chunk) - As at June 30, 2021, **31,725,400** unexercised share options remained under the post-IPO share option scheme[355](index=355&type=chunk) - Approved by the EGM, the limit of the post-IPO share option scheme was updated to **54,301,362** shares on May 27, 2021, representing **10%** of the total issued shares at that time[363](index=363&type=chunk) [Pledge of Group Assets](index=89&type=section&id=集團資產抵押) To obtain RMB 105 million in bank financing, the Group pledged its entire 51% equity interest in Heshan City Luhuyangmian Mountain Agricultural Development Co., Ltd. to the bank and provided a joint and several liability guarantee - To enable its subsidiary Yangmian Mountain to obtain a **RMB 105 million** bank loan, the Group pledged its entire **51%** equity interest in Yangmian Mountain to the bank[383](index=383&type=chunk)

| --- | --- | |-------|----------------------------| | | | | | 中國金融發展(控股)有限公司 | 目錄 公司資料 2 財務概要 4 五年財務概要 5 主席報告 6 管理層討論與分析 9 董事會報告 23 企業管治報告 45 董事及高級管理層履歷 59 獨立核數師報告 64 綜合損益表 74 綜合損益及其他全面收益表 75 綜合財務狀況表 76 綜合權益變動表 78 綜合現金流量表 79 綜 合 財務報表附註 80 8 6 公司資料 | --- | --- | |-----------------------|--------------------------------------------| | | | | 董事會 | 授權代表 | | 執行董事 | 李斌先生 彭中輝先生 | | 張鐵偉先生 （主席） | | | 李斌先生 （行政總裁） | 註冊辦事處 | | 戴菁女士 | | | 徐凱英先生 | Fourth Floor, One Capital Place | | 龐浩泉先生 | P.O. Box 847, Grand Cayman | ...

[Financial and Operational Summary](index=5&type=section&id=Summary) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) For H1 2020, the company's revenue increased by 158.5% year-on-year, with loss before tax significantly narrowing by 86.4%, yet a net loss of RMB 17.464 million was recorded, while total assets decreased by 20.6% and total equity remained stable as of period-end Financial Performance Summary | Metric | For the six months ended June 30, 2020 (RMB thousands) | For the six months ended June 30, 2019 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 75,434 | 29,176 | 158.5% | | Loss before tax | (2,713) | (19,922) | -86.4% | | Loss for the period | (17,464) | (20,812) | -16.1% | | Loss per share (RMB) | (0.03) | (0.04) | -25.0% | | **Metric** | **As of June 30, 2020 (RMB thousands)** | **As of December 31, 2019 (RMB thousands)** | **Change** | | Total Assets | 1,708,471 | 2,151,341 | -20.6% | | Total Equity | 533,163 | 546,949 | -2.5% | [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) The Chairman's Statement highlights the group's commitment to business development despite severe challenges in H1 2020, with guarantee business revenue significantly increasing due to supportive policies and FinTech investment, yet a net loss was recorded due to impairment losses, associate losses, and increased operating expenses, while future plans include stable traditional business growth, FinTech promotion, and new agricultural investment opportunities - Macroeconomic Environment: In H1 2020, the COVID-19 pandemic, China-US trade friction, and geopolitical instability created unprecedented global economic shocks, leading to a persistently weak business environment[12](index=12&type=chunk) - Business Performance: Guarantee business revenue significantly increased, benefiting from supportive policies for SMEs and FinTech investment, while finance lease, commercial factoring, and asset management businesses adopted a cautious approach[14](index=14&type=chunk)[17](index=17&type=chunk) - Loss Drivers: Despite a substantial increase in principal business revenue, the group recorded a net loss due to impairment provisions, net losses from investments in associates, and increased operating expenses[17](index=17&type=chunk) - Future Outlook: The group will continue to steadily develop traditional businesses, advance FinTech, and seek new agricultural-related investment opportunities through investment, equity participation, or acquisition to provide integrated financial services across the industry chain and create new profit growth points[18](index=18&type=chunk) [Management Discussion & Analysis](index=8&type=section&id=Management%20Discussion%20%26%20Analysis) [Business Review and Strategy](index=8&type=section&id=Business%20Review%20and%20Strategy) The group adopted a prudent and stable strategy amidst the complex pandemic environment, enhancing market competitiveness in core guarantee business through FinTech and policy opportunities, while actively exploring integrated financial services in the Greater Bay Area, fostering diverse collaborations with financial and technology institutions, and advancing investment projects like Jicheng Sci-Tech Park - Guarantee Business: Continued investment in FinTech and development of traditional business, leveraging national support policies for SMEs and the establishment of Foshan Financing Guarantee Fund, with subsidiary Jicheng Guarantee obtaining a new operating license, enhancing market competitiveness[25](index=25&type=chunk) - Strategic Focus: Seizing opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area to actively seek integrated financial service opportunities, while consistently deploying FinTech and exploring diversified cooperation models with various parties[26](index=26&type=chunk)[27](index=27&type=chunk) - Investment Projects: The Jicheng Sci-Tech Park project, a benchmark for Shunde's "three old" transformation, is progressing as planned[28](index=28&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) In H1 2020, total revenue surged 111.3% to RMB 82.6 million, driven by a 168.5% increase in net income from financing guarantee services due to deferred revenue recognition from 2019 platform business growth; however, expanded losses from associates and increased operating expenses (due to share option costs) resulted in a pre-tax loss of RMB 2.7 million (86.4% narrower year-on-year) and a net loss of RMB 17.5 million, while the gearing ratio significantly improved from 293.3% to 220.4% due to reduced total liabilities [Revenue Analysis](index=11&type=section&id=Revenue%20Analysis) Total revenue increased by 111.3% year-on-year to RMB 82.6 million, with core financing guarantee service net income growing 168.5% to RMB 91.3 million, primarily due to deferred revenue recognition from significant platform business growth in 2019, while non-financing guarantee service revenue halved and finance lease and factoring services recorded no income due to business maturity and cautious strategy Revenue by Business Segment | Business Segment | H1 2020 Revenue (RMB millions) | H1 2019 Revenue (RMB millions) | Y-o-Y Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Financing Guarantee Services | 91.3 | 34.0 | +168.5% | Deferred revenue from 2019 platform business growth recognized in current period | | Non-Financing Guarantee Services | 0.4 | 0.8 | -50.0% | Group adjusted product structure, focusing on new business areas | | Financial Advisory Services | 1.4 | 0.3 | +366.7% | Increased financing demand from SMEs | | Finance Lease and Factoring | 0 | 5.2 | -100% | Existing businesses matured and adopted a prudent development strategy | [Profitability Analysis](index=13&type=section&id=Profitability%20Analysis) Despite significant revenue growth, the company's profitability remains under pressure, with pre-tax loss narrowing substantially from RMB 19.9 million to RMB 2.7 million, primarily due to increased impairment provisions for associate Jicheng Loan leading to expanded share of loss to RMB 26.6 million, a 48.8% year-on-year increase in operating expenses mainly from share option grants, and substantial impairment and provision deductions - Share of loss from associates expanded from RMB 4.6 million to **RMB 26.6 million** year-on-year, primarily due to increased impairment provisions for associate Jicheng Loan[49](index=49&type=chunk) - Operating expenses increased by **48.8%** year-on-year to **RMB 37.2 million**, mainly due to share option expenses granted in May 2020, leading to a **50.5%** rise in salaries and wages[48](index=48&type=chunk) - Income tax expense significantly increased from RMB 0.9 million to **RMB 14.8 million**, primarily due to a decrease in deferred tax assets resulting from reduced deferred revenue from platform business[52](index=52&type=chunk) [Financial Position and Liquidity](index=14&type=section&id=Financial%20Position%20and%20Liquidity) As of June 30, 2020, the group's gearing ratio (total liabilities/total equity) significantly decreased from 293.3% at end-2019 to 220.4%, primarily due to reductions in guarantee liabilities, guarantee deposits payable to cooperating companies, and other payables; cash and bank balances were approximately RMB 640 million, a decrease of RMB 428 million from the beginning of the year, mainly due to reduced third-party guarantee deposits - Gearing ratio decreased from **293.3%** (end-2019) to **220.4%** (end-June 2020), primarily due to a reduction in total liabilities[59](index=59&type=chunk) - Cash and bank balances decreased from **RMB 1.067 billion** (end-2019) to **RMB 640 million** (end-June 2020), mainly due to a reduction in guarantee deposits from third parties[55](index=55&type=chunk) [Prospects and Outlook](index=16&type=section&id=Prospects%20and%20Outlook) For H2 2020, management anticipates a challenging global economic recovery but strong resilience in mainland China's economy; the group will maintain a prudent and stable development strategy, strengthening capabilities through opportune investments and M&A while developing traditional businesses, specifically leveraging policy tailwinds for guarantee business, enhancing collaborations with financial and technology institutions, cautiously expanding finance lease and factoring, seizing Greater Bay Area opportunities, and seeking new agricultural investment projects to offer integrated financial services and boost competitiveness - Macroeconomic Outlook: Global economic downward pressure is expected to intensify, but mainland China's economy will maintain a recovery growth trend, with the central government continuing to implement loose monetary policies and expand domestic demand[62](index=62&type=chunk) - Business Strategy: The group will continue to steadily develop traditional guarantee businesses, advance FinTech exploration, strengthen cooperation with financial institutions and technology companies, and create distinctive integrated financial service products[63](index=63&type=chunk) - New Growth Points: Plans include seeking new agricultural-related commercial investment opportunities through investment, equity participation, or acquisition, using these as entry points to provide integrated financial services to upstream and downstream clients in the industry chain, creating new profit growth points[67](index=67&type=chunk) - Asset Allocation: To meet future business development needs, office properties in Foshan New City have been purchased for self-use[68](index=68&type=chunk) [Interim Financial Statements](index=18&type=section&id=Interim%20Financial%20Statements) [Overview of Financial Statements](index=18&type=section&id=Overview%20of%20Financial%20Statements) This section presents the unaudited consolidated statement of profit or loss, consolidated statement of financial position, consolidated statement of changes in equity, and condensed consolidated statement of cash flows for the six months ended June 30, 2020, showing a net loss of RMB 17.464 million for the period, with KPMG having reviewed the interim financial report and issued an unmodified conclusion, indicating no material non-compliance with HKAS 34 Financial Statement Summary | Financial Statement Item (RMB thousands) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | **Consolidated Statement of Profit or Loss** | | | | Revenue | 75,434 | 29,176 | | Loss before tax | (2,713) | (19,922) | | Loss for the period | (17,464) | (20,812) | | **Consolidated Statement of Financial Position** | **As of June 30, 2020** | **As of December 31, 2019** | | Total Assets | 1,708,471 | 2,151,341 | | Total Liabilities | 1,175,308 | 1,604,392 | | Total Equity | 533,163 | 546,949 | - KPMG reviewed the interim financial report and concluded that nothing came to their attention to suggest the interim financial report was not prepared in all material respects in accordance with HKAS 34[72](index=72&type=chunk) [Selected Notes to Financial Statements](index=26&type=section&id=Selected%20Notes%20to%20Financial%20Statements) The notes to the financial statements disclose key accounting estimates and judgments, including significant impairment provisions for receivables (guarantee payments, factoring, and finance leases), reflecting high credit risk; a critical risk is the group's breach of convertible bond financial covenants due to net asset value below requirements and gearing ratio exceeding limits, though the company is negotiating waivers and updated terms with bondholders; additionally, substantial share options were granted during the period, incurring related expenses [Key Risks and Judgements](index=34&type=section&id=Key%20Risks%20and%20Judgements) The group faces significant credit and liquidity risks; as of June 30, 2020, substantial impairment provisions were made for various receivables, including RMB 187 million for defaulted guarantee payments, RMB 33.66 million for factoring receivables, and RMB 147 million for finance lease receivables; critically, the group breached convertible bond financial covenants (net asset value below RMB 800 million and gearing ratio above 40%), creating significant uncertainty despite no immediate repayment demand, with management negotiating updated terms and having made partial repayments - As of June 30, 2020, the group made bad debt provisions of **RMB 187 million** for receivables from defaulted guarantee payments[126](index=126&type=chunk)[136](index=136&type=chunk) - For finance lease receivables, overdue amounts reached **RMB 145 million**, with impairment provisions of **RMB 147 million** made[156](index=156&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk) - The group breached convertible bond financial covenants (net asset value below **RMB 800 million**, gearing ratio above **40%**), granting bondholders the right to demand immediate repayment; the group is negotiating updated terms with bondholders to manage liquidity risk[218](index=218&type=chunk)[219](index=219&type=chunk) [Equity and Financing Activities](index=54&type=section&id=Equity%20and%20Financing%20Activities) In H1 2020, the group secured new bank borrowings totaling RMB 50 million; regarding equity incentives, 31,755,400 share options were granted on May 18, 2020, under the post-IPO share option scheme, with an exercise price of HKD 0.84 per share, to directors and key employees, resulting in RMB 3.338 million in equity-settled share-based payment expenses for the period, and no dividends were declared - On May 18, 2020, the group granted **31,755,400** share options with an exercise price of **HKD 0.84** per share to directors, key employees, and employees with specific performance targets[225](index=225&type=chunk) - The group obtained two new bank borrowings totaling **RMB 50 million** in H1 2020, with an interest rate of **4.4%**[212](index=212&type=chunk) - The Board did not recommend the payment of any dividend for the six months ended June 30, 2020[241](index=241&type=chunk)[253](index=253&type=chunk) [Other Information](index=68&type=section&id=Other%20Information) [Shareholding and Corporate Governance](index=68&type=section&id=Shareholding%20and%20Corporate%20Governance) The report discloses that Chairman Mr. Zhang Tiewei and several other shareholders are concert parties, collectively controlling 48.23% of the company's equity; the company complied with listing rule corporate governance codes and maintained the required public float during the reporting period; the Board resolved not to declare an interim dividend, and details of pre-IPO and post-IPO share option schemes, including the significant new grant in May 2020, were disclosed - Chairman Mr. Zhang Tiewei, Mr. Xu Kaiying, Mr. Pang Haoquan, and Mr. Chen Guoxian are concert parties, collectively holding approximately **48.23%** of the company's equity[277](index=277&type=chunk)[283](index=283&type=chunk)[294](index=294&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2020[275](index=275&type=chunk) - On May 18, 2020, the company granted **31,755,400** share options under the "Post-IPO Share Option Scheme" with an exercise price of **HKD 0.84** per share[304](index=304&type=chunk) - As of the end of the reporting period, the company had redeemed all principal (**HKD 60,000,000**) and corresponding interest of the notes attached to the convertible bonds[331](index=331&type=chunk) [Post-Reporting Period Events](index=79&type=section&id=Post-Reporting%20Period%20Events) Subsequent to the reporting period, on July 16, 2020, the group's subsidiary Jicheng Guarantee signed an agreement to acquire a new office property in Foshan New City, Shunde District, Guangdong Province, for self-use, at a total consideration not exceeding RMB 32,966,880 - On July 16, 2020, the group agreed to acquire an office property in Foshan New City for self-use, with a total consideration not exceeding **RMB 32.97 million**[338](index=338&type=chunk)

| --- | --- | --- | --- | --- | |-------------------------------------------------------------------------|-------|-------|-------|----------------------------------------------------------------| | | | | | | | | | | | | | 中國金融發展(控股)有限公司 CHINA SUCCESS FINANCE GROUP HOLDINGS LIMITED | | | | （於開曼群島註冊成立的有限公司） 股份代號 : 3623 中期報告 2019 | | 混合產品 即立貴實任的且林貢國的起張 FSC" C022410 | | | | | 1 目錄 公司資料 2 概要 3 主席報告 4 管理層討論與分析 6 中期財務資料審閱報告 15 綜合損益表 16 綜合損益及其他全面收入表 17 綜合財務狀況表 18 綜合權益變動表 20 簡明綜合現金流量表 23 未經審核中期財務報告附註 24 其他資料 77 公司資 ...

Financial Performance - Revenue for the year ended December 31, 2018, was RMB 56,078,000, a decrease of 37.6% compared to RMB 89,822,000 in 2017[17] - Profit for the year decreased by 66.3% to RMB 5,281,000 from RMB 15,651,000 in the previous year[17] - Total comprehensive income for the year was RMB 8,003,000, a decline of 30.5% from RMB 11,522,000 in 2017[17] - Profit before taxation decreased by 28.3% to RMB 23,181,000 from RMB 32,343,000 in the previous year[17] - Basic earnings per share dropped to RMB 0.01, down 66.7% from RMB 0.03 in 2017[17] - The Group's total revenue for 2018 decreased to approximately RMB 61.0 million, and profit for the year was RMB 5.3 million[31] - The Group's total revenue for the year decreased to approximately RMB 61.0 million, while profit was approximately RMB 5.3 million[55] - Revenue from financial guarantee services increased significantly by approximately 365.5% to approximately RMB27.0 million in 2018, up from RMB5.8 million in 2017[80] - Revenue from non-financial guarantee services decreased by approximately 18.9% to approximately RMB4.3 million in 2018, down from RMB5.3 million in 2017[81] - Revenue from financial consultancy services decreased significantly by approximately 80.8% to approximately RMB5.6 million in 2018, compared to RMB29.2 million in 2017[83] - Revenue from financial leasing and factoring business increased by approximately RMB2.0 million to approximately RMB24.4 million in 2018, up from RMB22.4 million in 2017[89] Assets and Liabilities - Total assets increased by 86.9% to RMB 1,938,278,000 as of December 31, 2018, compared to RMB 1,037,051,000 in 2017[17] - Total equity as of December 31, 2018, was RMB 978,237,000, a slight increase of 1.9% from RMB 959,915,000 in 2017[17] - The Group's gearing ratio increased from approximately 8.0% as of December 31, 2017, to approximately 98.1% as of December 31, 2018, primarily due to an increase in total liabilities[112] - The Group's total liabilities increased due to liabilities from guarantees, pledge deposits payable, convertible bonds, and receipts in advance from partner companies[112] - Receivables from guarantee payments decreased from approximately RMB246.9 million as at 31 December 2017 to approximately RMB232.7 million as at 31 December 2018[106] Cash Flow and Financial Position - The cash and various bank deposits of the Group almost doubled from RMB 30 million on June 30, 2018, to December 31, 2018[31] - Cash and various bank deposits increased by approximately 105.7% from June 30, 2018, to December 31, 2018[55] - The increase in cash and bank deposits was mainly attributable to net cash inflow from a joint project and funds raised from the issuance of convertible bonds[110] - As of December 31, 2018, pledged bank deposits amounted to approximately RMB 86.2 million, a decrease of approximately RMB 9.3 million compared to the end of the previous year, while cash and bank deposits increased to approximately RMB 719.1 million, an increase of approximately RMB 679.7 million[110] Taxation and Expenses - The effective tax rate rose significantly to 77.2% in 2018 from 51.6% in 2017[19] - The cost to income ratio increased to 93.6% in 2018, compared to 58.5% in 2017[19] - Income tax for the year ended 31 December 2018 amounted to approximately RMB17.9 million, representing an increase of approximately 7.2% from approximately RMB16.7 million in 2017[106] - The Group's operating expenses slightly decreased to approximately RMB53.1 million in 2018 from approximately RMB53.2 million in 2017, with salaries and rent decreasing by 11.8% and 39.1% respectively[99] Business Strategy and Market Outlook - Looking forward to 2019, the Group anticipates challenges due to global economic uncertainties but aims to support micro, small, and medium-sized enterprises through financial inclusion[38] - The Group aims to provide integrated financing services to micro, small, and medium-sized enterprises through innovative products[39] - The Group will continue to strengthen traditional businesses such as financial leasing and guarantee services while exploring mergers and acquisitions[41] - The Group is focused on developing financial technology services to meet market demands[41] - The Group plans to expand its business in the Greater Bay Area by offering comprehensive financial services[44] - The Group is committed to enhancing its core competitiveness and maximizing returns for investors and shareholders[45] - The Group will continue to maintain the quality of traditional guarantee business, targeting small and medium-sized enterprises, while developing new products and enhancing risk management mechanisms[134] - The Group aims to enhance its strength through investments, mergers, and acquisitions to adapt to a more open financial system[142] - The Group will respond to national policies by promoting cooperation between banks and guarantee companies, providing integrated financing services[134] Share Options and Capital Management - The total number of shares subject to the options under the Pre-IPO Share Option Scheme is 10,000,000 Shares, representing approximately 1.91% of the issued Shares as of the date of this annual report[176] - 50% of the options shall vest and become exercisable on June 30, 2014; 30% on June 30, 2016; and 20% on June 30, 2018[176] - No options granted under the Pre-IPO Share Option Scheme had been exercised by the grantees in the year ended December 31, 2018[178] - The remaining life of the Pre-IPO Share Option Scheme is until November 5, 2023[178] - The company did not declare a final dividend for the year ended December 31, 2018[153] - As of December 31, 2018, the aggregate amount of distributable reserves was approximately RMB406.3 million[170]