Financial Performance - The company's operating revenue for the first half of 2020 was CNY 2,353,508,327.45, a decrease of 41.78% compared to CNY 4,042,560,015.27 in the same period last year[17]. - The net profit attributable to shareholders of the listed company was a loss of CNY 168,377,102.34, down 135.60% from a profit of CNY 472,998,415.29 in the previous year[17]. - The net cash flow from operating activities was CNY 378,581,239.86, a decline of 73.22% compared to CNY 1,413,914,118.15 in the same period last year[17]. - Basic earnings per share for the first half of 2020 were -CNY 0.08, a decrease of 134.78% compared to CNY 0.23 in the same period last year[18]. - The weighted average return on net assets was -1.01%, a decrease of 3.87 percentage points from 2.86% in the previous year[18]. - The company reported a significant decline in profit due to the impact of COVID-19, with production and operational activities severely affected[39]. - The company anticipates a significant decrease in cumulative net profit compared to the previous year due to the impact of COVID-19 on flight volume and passenger throughput[54]. - The company is experiencing a decline in both aviation-related and non-aviation revenue due to the pandemic[54]. Assets and Liabilities - The total assets at the end of the reporting period were CNY 25,576,057,765.78, a decrease of 2.35% from CNY 26,191,086,465.71 at the end of the previous year[17]. - The net assets attributable to shareholders of the listed company decreased by 3.15% to CNY 16,456,734,111.74 from CNY 16,991,233,044.73 at the end of the previous year[17]. - Total liabilities were reported at RMB 8.94 billion, a decrease from RMB 9.02 billion, representing a reduction of approximately 0.9%[100]. - The company's equity attributable to shareholders decreased to RMB 16.46 billion from RMB 16.99 billion, a decline of about 3.1%[100]. - The total equity of the company as of the reporting date was CNY 14,546,789,243.41, slightly up from CNY 14,503,917,680.59 in the previous period[105]. Operational Highlights - The company faced significant declines in flight volume, passenger throughput, and cargo/mail throughput due to the impact of the COVID-19 pandemic[19]. - During the reporting period, the company completed 145,800 flight takeoffs and landings, with a passenger throughput of 15.62 million and cargo mail throughput of 774,400 tons, representing year-on-year changes of 60.6%, 43.8%, and 85.7% respectively[34]. - The on-time performance rate of the airport reached 93.7%, an increase of 6.6% year-on-year, while the average ground pushback time decreased by 3.81 minutes compared to the same period last year[34]. - The company operates two terminals and three runways, providing a range of aviation services including flight takeoff and landing, passenger services, security checks, and ground handling services[25]. - The company is positioned as a core hub airport in the South China region, with strategic support from major airlines such as China Southern Airlines, which enhances its international hub competitiveness[31]. Strategic Initiatives - The company has implemented a recovery plan to boost flight operations and has collaborated with airlines to restore routes[35]. - The company has launched the "Jingguangfei" product series to support business recovery in the post-pandemic era[35]. - The company has implemented a diversified operation model for its non-aviation services, including ground transportation, advertising, and leasing, to ensure gradual profit growth[28]. - The company has actively pursued research in blockchain technology, 5G technology, and digital transformation[35]. Environmental and Safety Standards - The company has established a comprehensive epidemic prevention work mechanism, achieving the goal of "preventing external input of the epidemic, internal employee infection, and strict prevention of responsibility spread"[34]. - The wastewater treatment plant processed a total of 3.81 million tons of wastewater in the first half of 2020, with no instances of exceeding discharge standards[74]. - The company has committed to environmental monitoring and reporting, with quarterly self-monitoring reports required[79]. - The company has established a pollution prevention facility that has been operational since 2004, ensuring compliance with national and local wastewater discharge standards[74]. Shareholder Information - The total number of ordinary shareholders as of the end of the reporting period is 58,967[86]. - Guangdong Airport Management Group Co., Ltd. holds 1,056,346,783 shares, accounting for 51.05% of total shares[88]. - The second largest shareholder, Hong Kong Central Clearing Limited, holds 155,105,017 shares, representing 7.50%[88]. - The company has not proposed any profit distribution plan or capital reserve transfer to increase share capital for the reporting period[4]. Accounting and Compliance - The financial statements comply with the accounting standards issued by the Ministry of Finance, accurately reflecting the company's financial position as of June 30, 2020[139]. - The company has not reported any significant changes in accounting policies or estimates during the reporting period[138]. - The company implemented the new revenue recognition standard starting January 1, 2020, affecting the retained earnings and related financial statement items[82].

[Company Profile and Key Financial Indicators](index=4&type=section&id=Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's basic information and its key financial performance over the past three years [Company Information](index=4&type=section&id=Company%20Information) Guangzhou Baiyun International Airport Co., Ltd. (Baiyun Airport) is a company listed on the Shanghai Stock Exchange (stock code 600004), with Qiu Jiachen as its legal representative - Basic company information: Guangzhou Baiyun International Airport Co., Ltd., stock abbreviation "Baiyun Airport", stock code **600004**, legal representative Qiu Jiachen[9](index=9&type=chunk)[12](index=12&type=chunk) [Key Accounting Data and Financial Indicators for the Past Three Years](index=5&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators%20for%20the%20Past%20Three%20Years) In 2018, revenue grew by **14.57%** to **7.747 billion yuan**, but net profit attributable to shareholders decreased by **29.24%** to **1.129 billion yuan** due to increased costs and policy changes, while operating cash flow increased by **44.88%** Key Accounting Data for the Past Three Years | Key Accounting Data | 2018 (yuan) | 2017 (yuan) | YoY Change (%) | 2016 (yuan) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 7,746,817,875.68 | 6,761,550,874.37 | 14.57 | 6,166,683,056.12 | | Net Profit Attributable to Shareholders | 1,129,170,962.91 | 1,595,784,592.59 | -29.24 | 1,393,853,026.37 | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 1,078,229,015.37 | 1,564,238,738.86 | -31.07 | 1,391,704,515.38 | | Net Cash Flow from Operating Activities | 3,119,314,301.61 | 2,153,068,900.14 | 44.88 | 1,956,099,715.66 | | Total Assets (Year-end) | 27,064,961,458.48 | 22,519,539,139.17 | 20.18 | 17,743,462,708.66 | Key Financial Indicators for the Past Three Years | Key Financial Indicators | 2018 | 2017 | YoY Change (%) | 2016 | | :--- | :--- | :--- | :--- | :--- | | Basic EPS (yuan/share) | 0.55 | 0.82 | -32.93 | 0.84 | | Diluted EPS (yuan/share) | 0.55 | 0.82 | -32.93 | 0.72 | | Weighted Average ROE (%) | 7.36 | 12.24 | Decreased by 4.88 percentage points | 13.53 | - The decline in EPS and ROE is primarily attributed to increased depreciation and operating costs following the commissioning of T2 terminal, and the cancellation of the civil aviation development fund rebate policy from November 29, 2018[16](index=16&type=chunk) [2018 Quarterly Key Financial Data](index=6&type=section&id=2018%20Quarterly%20Key%20Financial%20Data) The company's 2018 quarterly financial data shows a sequential decline in net profit attributable to shareholders, from **433 million yuan** in Q1 to **211 million yuan** in Q4, reflecting increasing cost pressures after T2 terminal became operational 2018 Quarterly Key Financial Data (Unit: yuan) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,723,798,620.17 | 1,996,817,154.89 | 2,082,779,149.65 | 1,943,422,950.97 | | Net Profit Attributable to Shareholders | 432,826,612.21 | 270,224,622.79 | 215,589,790.99 | 210,529,936.92 | | Net Cash Flow from Operating Activities | 636,535,663.17 | 1,089,103,708.81 | 853,237,901.73 | 540,437,027.90 | [Non-recurring Gains and Losses Items and Amounts](index=7&type=section&id=Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) In 2018, total non-recurring gains and losses significantly increased to **50.94 million yuan** from **31.55 million yuan** in 2017, primarily driven by government subsidies recognized in current profit totaling **57.02 million yuan** Non-recurring Gains and Losses Items (Unit: yuan) | Non-recurring Gains and Losses Item | 2018 Amount | 2017 Amount | | :--- | :--- | :--- | | Disposal gains and losses of non-current assets | 1,981,931.71 | 6,578,953.28 | | Government subsidies recognized in current profit or loss | 57,023,991.10 | 32,716,790.56 | | Other non-operating income and expenses | 10,208,962.91 | 1,676,888.48 | | **Total** | **50,941,947.54** | **31,545,853.73** | [Business Overview](index=9&type=section&id=Business%20Overview) This section outlines the company's core business activities, operational model, industry context, and key competitive advantages [Main Business, Operating Model, and Industry Situation](index=9&type=section&id=Main%20Business%2C%20Operating%20Model%2C%20and%20Industry%20Situation) As the manager and operator of Baiyun Airport, the company's main business includes government-regulated aviation services and market-priced aviation-related extension services, operating through self-management and authorized/leased models - The company's business is primarily divided into aviation services and aviation-related extension services, with the former's fees influenced by government pricing and the latter largely market-priced[23](index=23&type=chunk)[24](index=24&type=chunk) - Baiyun Airport is one of China's three major gateway composite hub airports, a core airport in the Guangdong-Hong Kong-Macao Greater Bay Area, featuring two terminals and three runways[23](index=23&type=chunk) [Core Competitiveness Analysis During the Reporting Period](index=10&type=section&id=Core%20Competitiveness%20Analysis%20During%20the%20Reporting%20Period) The company's core competitiveness stems from strong policy support for its international aviation hub status, strategic geographical location in the Pearl River Delta, robust economic hinterland, synergy with China Southern Airlines, and proven operational safety and service capabilities - The company's core competencies include: - **Policy Positioning Advantage**: National and Guangdong Province policies explicitly support its development as an international aviation hub - **Geographical Location Advantage**: Positioned as the primary gateway hub to Southeast Asia and Australia - **Hinterland Market Advantage**: Supported by the vibrant regional economy of the Pearl River Delta - **Base Airline Advantage**: Strong strategic alignment with its main base airline, China Southern Airlines - **Safety, Service, and Operational Assurance Capability Advantage**: Possesses the capacity and experience to operate a super-large airport[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Discussion and Analysis of Operations](index=12&type=section&id=Discussion%20and%20Analysis%20of%20Operations) This section provides an in-depth discussion and analysis of the company's operational performance, financial results, asset and liability status, and future development outlook [Overview of Operations](index=12&type=section&id=Overview%20of%20Operations) In 2018, Baiyun Airport saw steady growth across key metrics, with passenger throughput nearing **70 million** and a **5.9%** increase, marked by the successful launch of T2 terminal, rapid international business expansion, improved flight punctuality, and recognition as a "Smart Airport" demonstration unit 2018 Key Operational Data | Item | 2018 | YoY Growth (%) | | :--- | :--- | :--- | | Aircraft Movements (ten thousand movements) | 47.74 | 2.6 | | Passenger Throughput (ten thousand passenger trips) | 6974.32 | 5.9 | | Cargo & Mail Throughput (ten thousand tons) | 189.08 | 6.2 | - The T2 terminal officially commenced operations on April 26, transitioning Baiyun Airport to a "two-terminal operation" model and earning Skytrax Five-Star Terminal certification[29](index=29&type=chunk)[31](index=31&type=chunk) - The company made progress in smart airport construction, implementing full-process self-service for passengers, achieving the largest facility scale nationwide, and becoming one of the first "Smart Airport" demonstration units recognized by the Civil Aviation Administration[30](index=30&type=chunk)[32](index=32&type=chunk) [Main Business Analysis](index=13&type=section&id=Main%20Business%20Analysis) During the reporting period, revenue increased by **14.57%**, but operating costs surged by **35.42%** due to T2 terminal's commissioning, leading to a **5.09 percentage point** drop in gross margin, while financial expenses also dramatically rose by **306.67%** [Analysis of Financial Statement Item Changes](index=13&type=section&id=Analysis%20of%20Financial%20Statement%20Item%20Changes) In 2018, revenue grew by **14.57%**, but operating costs and financial expenses increased sharply by **35.42%** and **306.67%** respectively, while investment cash outflow significantly decreased and financing cash flow turned negative with a net outflow of **1.858 billion yuan** Major Changes in Income Statement and Cash Flow Statement Items | Item | Current Period (yuan) | Prior Period (yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 7,746,817,875.68 | 6,761,550,874.37 | 14.57 | | Operating Costs | 5,442,282,964.22 | 4,018,885,671.11 | 35.42 | | Financial Expenses | 157,253,011.97 | 38,668,629.07 | 306.67 | | Net Cash Flow from Operating Activities | 3,119,314,301.61 | 2,153,068,900.14 | 44.88 | | Net Cash Flow from Investing Activities | -1,808,224,399.91 | -4,057,845,131.72 | -55.44 | | Net Cash Flow from Financing Activities | -1,857,558,330.81 | 3,753,358,274.02 | -149.49 | [Revenue and Cost Analysis](index=13&type=section&id=Revenue%20and%20Cost%20Analysis) The commissioning of T2 terminal significantly altered the company's cost structure, with depreciation expenses surging by **178.69%** and labor costs by **194.90%** due to outsourcing, collectively reducing the aviation services gross margin by **5.09 percentage points** 2018 Cost Structure Analysis (Unit: yuan) | Cost Item | Current Period Amount | Current Period % of Total Cost | Prior Period Amount | Prior Period % of Total Cost | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Labor Costs | 2,084,537,011.32 | 38.30 | 1,845,707,408.71 | 45.93 | 12.94 | | Depreciation Expenses | 1,255,648,119.22 | 23.07 | 450,553,233.39 | 11.21 | 178.69 | | Labor Service Fees | 336,433,261.90 | 6.18 | 114,083,358.40 | 2.84 | 194.90 | | Utilities and Utility Management Fees | 261,560,087.99 | 4.81 | 184,052,364.25 | 4.58 | 42.11 | | **Total** | **5,442,282,964.22** | **100.00** | **4,018,885,671.11** | **100.00** | **35.42** | [Analysis of Assets and Liabilities](index=15&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) As of year-end 2018, total assets reached **27.065 billion yuan**, up **20.18%**, driven by a **155.20%** surge in fixed assets as T2 terminal's construction-in-progress converted, while other payables significantly increased by **377.29%** Major Changes in Balance Sheet Items (Unit: yuan) | Item | Current Period End | Current Period End % of Total Assets | Prior Period End | Prior Period End % of Total Assets | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Fixed Assets | 21,956,383,773.00 | 81.12 | 8,603,487,459.70 | 38.20 | 155.20 | | Construction in Progress | 66,857,029.86 | 0.25 | 9,093,831,977.45 | 40.38 | -99.26 | | Intangible Assets | 550,140,572.48 | 2.03 | 27,944,563.26 | 0.12 | 1,868.69 | | Other Payables | 6,288,598,791.75 | 23.24 | 1,317,564,886.98 | 5.85 | 377.29 | - The core driver of balance sheet structural changes is the conversion of T2 terminal's construction-in-progress to fixed assets[42](index=42&type=chunk) [Industry Operational Information Analysis](index=16&type=section&id=Industry%20Operational%20Information%20Analysis) In 2018, China's civil aviation industry maintained steady growth, with national airport passenger throughput exceeding **1.2 billion**, up **10.2%**, while Baiyun Airport ranked third with **69.72 million** passengers, growing **5.9%**, slightly below the national average but surpassing Beijing Capital and Shanghai Pudong airports - In 2018, China's civil aviation airport passenger throughput increased by **10.2%**, cargo and mail throughput by **3.5%**, and aircraft movements by **8.2%**[43](index=43&type=chunk)[44](index=44&type=chunk) 2018 Comparison of Key Domestic Airport Operational Data | Airport | Passenger Throughput (trips) | YoY Growth (%) | Cargo & Mail Throughput (tons) | YoY Growth (%) | Aircraft Movements | YoY Growth (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beijing/Capital | 100,983,290 | 5.4 | 2,074,005.4 | 2.2 | 614,022 | 2.8 | | Shanghai/Pudong | 74,006,331 | 5.7 | 3,768,572.6 | -1.5 | 504,794 | 1.6 | | **Guangzhou/Baiyun** | **69,720,403** | **5.9** | **1,890,560.0** | **6.2** | **477,364** | **2.6** | [Investment Status Analysis](index=17&type=section&id=Investment%20Status%20Analysis) The company's primary non-equity investment during the period was the Guangzhou Baiyun International Airport expansion project, with a total estimated investment of **19.74 billion yuan**, of which **17.096 billion yuan** was for terminal and airfield works, with T2 terminal operational since April 26, 2018, and the company also held Everbright Bank shares with a fair value of **159 million yuan** - As the project legal entity, the company is responsible for the investment and construction of the Baiyun Airport expansion project, with a total investment of **17.096 billion yuan** for the terminal and airfield works, and T2 terminal commenced operations on April 26, 2018[47](index=47&type=chunk) - As of year-end 2018, the company held **43,081,510** shares of Everbright Bank, with a fair value of **159 million yuan**[46](index=46&type=chunk) [Analysis of Major Holding and Participating Companies](index=18&type=section&id=Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) During the reporting period, Guangzhou Baiyun International Advertising Co., Ltd. was the largest contributor to net profit among major subsidiaries at **164 million yuan**, while the newly established Guangzhou Baiyun International Airport T2 Terminal Area Management Co., Ltd. achieved **51.3 million yuan** in net profit, but Guangzhou Baiyun International Airport Express Transportation Co., Ltd. incurred a net loss of **23.65 million yuan** Operating Performance of Major Holding Subsidiaries (Unit: ten thousand yuan) | Company Name | Shareholding (%) | Total Assets | Net Profit | | :--- | :--- | :--- | :--- | | Guangzhou Baiyun International Advertising Co., Ltd. | 100% | 163,289.47 | 16,424.29 | | Guangzhou Baiyun International Airport T2 Terminal Area Management Co., Ltd. | 100% | 86,152.80 | 5,130.30 | | Guangzhou Baiyun International Airport Ground Handling Services Co., Ltd. | 51% | 31,028.61 | 2,998.68 | | Guangzhou Baiyun International Airport Express Transportation Co., Ltd. | 75% | 19,185.63 | -2,364.93 | [Discussion and Analysis of the Company's Future Development](index=19&type=section&id=Discussion%20and%20Analysis%20of%20the%20Company%27s%20Future%20Development) The company faces challenges from a slowing macroeconomy and increased competition from regional airports and high-speed rail, responding with a "six first-class" strategy for a world-class hub by 2025, while also highlighting risks such as economic volatility, policy changes, short-term profitability pressure from T2, and future expansion investment and financing burdens - The company's development strategy is to build a globally competitive world-class hub airport, focusing on "six first-class" aspects: accessibility, operational quality, innovation capability, management effectiveness, contribution to benefits, and organizational team[55](index=55&type=chunk) - The main risks faced by the company include: - **Macroeconomic Volatility Risk**: The air transport industry is closely linked to macroeconomic conditions - **Market Competition Risk**: Intensified competition from other airports in the Pearl River Delta (Hong Kong, Shenzhen) and alternative transportation methods like high-speed rail - **Operational Risk**: Increased costs after T2 terminal's commissioning negatively impact short-term profitability - **Investment Risk**: The significant investment scale of future Phase III expansion projects may create financing and operational pressures[56](index=56&type=chunk)[57](index=57&type=chunk) [Significant Matters](index=22&type=section&id=Significant%20Matters) This section details the company's profit distribution plan and related policies [Profit Distribution Plan for Ordinary Shares or Capital Reserve Conversion Plan](index=22&type=section&id=Profit%20Distribution%20Plan%20for%20Ordinary%20Shares%20or%20Capital%20Reserve%20Conversion%20Plan) The company has a clear cash dividend policy, aiming for at least one annual cash dividend, with cumulative cash dividends over the past three years not less than **30%** of average distributable profit, and the 2018 plan proposes **1.70 yuan** per 10 shares (tax inclusive), totaling **352 million yuan**, representing **31.15%** of net profit attributable to shareholders Dividend Distribution Plans for the Past Three Years | Dividend Year | Dividend per 10 Shares (yuan, tax incl.) | Cash Dividend Amount (yuan, tax incl.) | % of Net Profit Attributable to Parent | | :--- | :--- | :--- | :--- | | 2018 | 1.70 | 351,784,487.38 | 31.15 | | 2017 | 2.40 | 496,636,923.36 | 31.12 | | 2016 | 3.70 | 528,033,510.52 | 37.88 | - The company's 2018 profit distribution plan proposes a cash dividend of **1.70 yuan** (tax inclusive) per 10 shares to all shareholders, based on a total share capital of **2,069,320,514** shares[3](index=3&type=chunk) [Changes in Ordinary Shares and Shareholder Information](index=29&type=section&id=Changes%20in%20Ordinary%20Shares%20and%20Shareholder%20Information) This section details changes in ordinary shares and provides an overview of the company's shareholders and actual controller [Shareholder and Actual Controller Information](index=29&type=section&id=Shareholder%20and%20Actual%20Controller%20Information) As of year-end 2018, the company had **49,306** ordinary shareholders, with Guangdong Airport Authority as the controlling shareholder at **51.05%** and the Guangdong Provincial People's Government as the ultimate actual controller, while Hong Kong Securities Clearing Company held **13.85%** and Central Huijin held **2.03%** among the top ten shareholders Top Ten Shareholders' Shareholding | Shareholder Name | Shares Held at Period End | Proportion (%) | | :--- | :--- | :--- | | Guangdong Airport Authority | 1,056,346,783 | 51.05 | | Hong Kong Securities Clearing Company Limited | 286,583,584 | 13.85 | | Central Huijin Investment Ltd. | 41,964,740 | 2.03 | | China Merchants Bank - Xingquan Hexi Flexible Allocation Mixed Fund | 37,408,573 | 1.81 | | UBS AG | 33,940,940 | 1.64 | - The company's controlling shareholder is Guangdong Airport Authority, holding **51.05%**; the actual controller is the Guangdong Provincial People's Government[80](index=80&type=chunk)[81](index=81&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=34&type=section&id=Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section provides an overview of the company's directors, supervisors, senior management, and employee structure [Employee Information](index=39&type=section&id=Employee%20Information) As of the reporting period end, the company and its main subsidiaries had **12,981** employees, with over **60%** holding college degrees or higher, and in 2018, total outsourced labor hours exceeded **10 million**, with compensation totaling approximately **303 million yuan** Employee Professional Structure and Education Level | Category | Number of People | | :--- | :--- | | **Professional Structure** | | | Senior Professional Titles | 68 | | Intermediate Professional Titles | 338 | | Junior Professional Titles | 321 | | Other | 12,254 | | **Education Level** | | | Postgraduate and above | 276 | | Bachelor's Degree | 1,940 | | College Degree | 5,228 | | Below College Degree | 5,537 | | **Total** | **12,981** | - In 2018, the company's total outsourced labor hours were **10,064,135.30** hours, with total compensation paid amounting to **303,041,254.03 yuan**[102](index=102&type=chunk) [Corporate Governance](index=41&type=section&id=Corporate%20Governance) This section outlines the company's corporate governance structure and compliance with relevant regulations [Overview of Corporate Governance](index=41&type=section&id=Overview%20of%20Corporate%20Governance) During the reporting period, the company strictly adhered to relevant laws and regulations, with its corporate governance structure showing no significant deviations from CSRC requirements, holding one annual general meeting, four board meetings, and three supervisory board meetings in compliance with procedures, while also establishing executive performance appraisal and ensuring timely, accurate, and complete information disclosure - The actual corporate governance structure of the company does not differ from the normative documents on listed company governance issued by the China Securities Regulatory Commission[104](index=104&type=chunk) - During the reporting period, the company held one annual general meeting, four board meetings, and three supervisory board meetings, with all meeting procedures in compliance with regulations[104](index=104&type=chunk)[105](index=105&type=chunk) [Financial Report](index=45&type=section&id=Financial%20Report) This section presents the company's audited financial statements and the auditor's report [Audit Report](index=45&type=section&id=Audit%20Report) Lixin Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2018 financial statements, affirming their fair presentation in all material respects according to enterprise accounting standards, with key audit matters being "revenue recognition for aviation services" and "impairment of receivables" - The auditing firm issued a standard unqualified audit report[117](index=117&type=chunk) - Key audit matters include: - **Revenue Recognition for Aviation Services**: Focus on the risk of inaccurate revenue recognition or allocation to incorrect accounting periods due to complex IT systems and untimely reconciliation - **Impairment of Receivables**: Focus on the inherent uncertainty in assessing the recoverability of receivables due to their significant balances[120](index=120&type=chunk)[122](index=122&type=chunk) [Financial Statements](index=51&type=section&id=Financial%20Statements) The financial statements show that as of year-end 2018, total assets were **27.065 billion yuan**, total liabilities **11.323 billion yuan**, and equity attributable to parent **15.616 billion yuan**, with 2018 revenue of **7.747 billion yuan** and net profit attributable to parent of **1.129 billion yuan**, while operating cash flow was **3.119 billion yuan**, investment cash outflow **1.808 billion yuan**, and financing cash outflow **1.858 billion yuan** Consolidated Income Statement Summary (Unit: billion yuan) | Item | 2018 | 2017 | | :--- | :--- | :--- | | Total Operating Revenue | 7.747 | 6.762 | | Total Operating Costs | 6.306 | 4.676 | | Operating Profit | 1.528 | 2.165 | | Total Profit | 1.538 | 2.166 | | Net Profit | 1.162 | 1.601 | | Net Profit Attributable to Parent Company Shareholders | 1.129 | 1.596 | Consolidated Cash Flow Statement Summary (Unit: billion yuan) | Item | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 3.119 | 2.153 | | Net Cash Flow from Investing Activities | -1.808 | -4.058 | | Net Cash Flow from Financing Activities | -1.858 | 3.753 | | Net Increase in Cash and Cash Equivalents | -0.546 | 1.849 |

Financial Performance - Operating revenue for the first nine months rose by 17.99% to CNY 5,803,394,924.71 year-on-year[6] - Net profit attributable to shareholders decreased by 21.93% to CNY 918,641,025.99 compared to the same period last year[6] - Basic earnings per share decreased by 22.81% to CNY 0.44 compared to the same period last year[6] - The weighted average return on equity decreased by 4.53 percentage points to 5.90%[6] - The company’s net profit after deducting non-recurring gains and losses decreased by 23.70% to CNY 914,633,402.37 compared to the same period last year[6] - Net profit for the third quarter was CNY 223,840,116.67, a decrease of 43.14% from CNY 393,598,476.59 in the previous year[28] - Basic earnings per share for the third quarter were CNY 0.11, down from CNY 0.19 in the same period last year[30] - Net profit for Q3 2018 was a loss of CNY 49,867,897.83, compared to a profit of CNY 336,741,900.18 in Q3 2017, with total net profit for the first nine months at CNY 466,042,858.98, down from CNY 1,011,812,536.12[34] Assets and Liabilities - Total assets increased by 24.03% to CNY 27,931,014,166.18 compared to the end of the previous year[6] - Total assets reached ¥27,931,014,166.18, up from ¥22,519,539,139.17, which is an increase of about 24%[19] - The company reported a decrease in non-current liabilities, with total liabilities amounting to ¥12,107,344,474.44, up from ¥7,419,751,937.13, reflecting a growth of about 63%[19] - Total liabilities rose to CNY 10,982,517,247.02, an increase of 30.00% from CNY 8,450,085,692.74 year-on-year[25] - The company's total equity reached CNY 16,639,051,189.22, up 21.56% from CNY 13,681,611,783.79 in the previous year[25] Cash Flow - Net cash flow from operating activities increased by 62.04% to CNY 2,578,877,273.71 year-on-year[6] - Cash flow from operating activities for the first nine months was CNY 2,578,877,273.71, an increase from CNY 1,591,489,962.48 in the previous year[35] - Total cash inflow from operating activities reached CNY 6,107,231,838.43, up from CNY 5,759,207,442.69 year-on-year[39] - Cash outflow from operating activities decreased to CNY 3,592,119,651.71 from CNY 4,133,978,485.37, reflecting improved operational efficiency[39] - The ending balance of cash and cash equivalents was CNY 3,229,334,624.48, up from CNY 809,185,234.39 year-on-year[41] Shareholder Information - The total number of shareholders reached 46,001[11] - The largest shareholder, Guangdong Airport Management Group Co., Ltd., holds 51.05% of the shares[11] Operational Efficiency - Operating costs increased due to depreciation and maintenance costs associated with the new terminal, impacting overall expenses[15] - The company is focused on expanding its infrastructure and enhancing operational efficiency with the new terminal's launch[15] - Financial expenses increased significantly to CNY 81,667,047.84 for the first nine months, compared to CNY 7,451,298.86 in the same period last year[32] - The company reported other income of CNY 45,664,507.36 for the first nine months, up from CNY 30,960,818.41 year-on-year[32] Investment Activities - The company incurred a total of CNY 1,338,934,866.63 in cash outflows for investment activities during the first nine months[37] - Investment activities resulted in a net cash outflow of CNY 1,303,377,949.73, a reduction from CNY 2,596,503,797.02 in the previous year[39]

Financial Performance - The company's operating revenue for the first half of 2018 was CNY 3,720,615,775.06, representing a 15.77% increase compared to CNY 3,213,661,518.38 in the same period last year[18]. - The net profit attributable to shareholders for the first half of 2018 was CNY 703,051,235.00, a decrease of 9.97% from CNY 780,903,028.42 in the previous year[18]. - Basic earnings per share for the first half of 2018 were CNY 0.34, down 38.18% from CNY 0.55 in the same period last year[19]. - The weighted average return on equity decreased by 2.38 percentage points to 4.55% compared to 6.93% in the previous year[19]. - The company reported a net profit of CNY 4,889,028,497.13, compared to CNY 4,335,249,080.10, representing an increase of about 12.7%[84]. - The company reported a decrease in capital contributions of CNY 16,456,180.53 during the current period[104]. Cash Flow - The net cash flow from operating activities increased by 7.33% to CNY 1,725,639,371.98, compared to CNY 1,607,753,054.48 in the same period last year[18]. - The net cash flow from investing activities improved by 27.47%[35]. - The net cash flow from investing activities was -¥1,055,128,945.11, an improvement from -¥1,454,659,886.37, indicating a reduction in cash outflow by approximately 27.5%[96]. - Cash inflow from financing activities totaled ¥2,449,930,000.00, significantly higher than ¥1,200,000,000.00, representing an increase of about 104.2%[96]. - The ending cash and cash equivalents balance was ¥3,001,789,175.51, up from ¥1,316,719,993.93, reflecting an increase of approximately 127.8%[96]. Assets and Liabilities - The total assets at the end of the reporting period were CNY 28,032,188,172.04, a 24.48% increase from CNY 22,519,539,139.17 at the end of the previous year[18]. - Accounts receivable increased by 66.13% to ¥1,364,491,019.77, representing 4.87% of total assets[40]. - Fixed assets rose by 152.73% to ¥21,743,420,345.73, accounting for 77.57% of total assets, due to the completion of the second phase expansion project[40]. - Total liabilities reached CNY 12,230,895,321.79, up from CNY 7,419,751,937.13, marking a growth of around 65%[76]. - Current liabilities rose to CNY 10,167,226,951.07 from CNY 5,381,827,145.14, reflecting an increase of approximately 89%[76]. Operational Highlights - In the first half of 2018, the company completed 234,600 aircraft takeoffs and landings, with a passenger throughput of 34.227 million and cargo/mail throughput of 894,900 tons, representing year-on-year growth of 3.5%, 7.2%, and 6.4% respectively[33]. - The new Terminal 2, which opened on April 26, 2018, has a designed capacity of 45 million passengers per year, supporting the company's goal of becoming a world-class aviation hub[33]. - The company has opened 7 new international routes in the first half of 2018, bringing the total number of operational routes to 217, including 131 domestic and 86 international[33]. - The company has implemented a significant reduction in sales expenses by 54.83%, attributed to adjustments in business operation models[35]. Risks and Challenges - The company has outlined potential risks in its operations, which are detailed in the report[6]. - The company faces risks from macroeconomic fluctuations that directly impact market demand in the aviation transport industry[50]. - Competition from other transport modes, particularly high-speed rail, poses a significant threat to the company's market share in the short-distance transport sector[51]. - The company is under financial pressure due to the investment in the expansion project of Guangzhou Baiyun International Airport, which may affect expected returns if funding is not secured timely[52]. - The company acknowledges the competitive risks from airports within the Pearl River Delta region, which could lead to a decline in business volume and market share if not addressed effectively[50]. Shareholder Information - As of the end of the reporting period, the total number of ordinary shareholders was 47,496[66]. - The largest shareholder, Guangdong Airport Management Group Co., Ltd., holds 1,056,346,783 shares, representing 51.05% of the total shares[67]. - The company has not declared any profit distribution or capital reserve increase plans for the half-year period[55]. Accounting and Financial Policies - The company has appointed Lixin Certified Public Accountants as its auditing firm for the 2018 fiscal year, with an audit service fee of 1.1 million yuan[56]. - There were no changes in accounting policies or significant accounting errors that required restatement during the reporting period[63]. - The company adheres to the accounting policies and estimates that reflect its actual production and operational characteristics[121]. - The company's accounting year runs from January 1 to December 31[122]. Equity and Capital Structure - The total equity at the end of the current period is CNY 15,801,292,850.25, reflecting an increase from the previous period[106]. - The company experienced a net increase in equity of CNY 3,416,983,383.10 during the current period[106]. - The company’s capital reserve increased by CNY 2,901,103,367.28 during the current period[107]. - The total amount of other comprehensive income decreased by 12,601,341.68, indicating potential challenges in this area[110].