Sales Performance - In 2022, Dongfeng Motor Group sold approximately 2.4645 million vehicles, a year-on-year decrease of 11.2%, maintaining its position among the top three in the industry[15]. - The sales of self-owned passenger vehicles reached 497,900 units, representing a year-on-year growth of 39.6%, exceeding the industry growth rate by 30.1 percentage points[15]. - The group's commercial vehicle sales were approximately 311,300 units, reflecting a year-on-year decline of 40.4% due to a prolonged downturn in the commercial vehicle market[15]. - Dongfeng's new energy vehicle sales reached about 346,100 units, a year-on-year increase of 115.5%, ranking fourth in the industry[15]. - The joint venture passenger vehicle business remained stable, achieving sales of 1.6553 million units, with Shenlong Company experiencing a sales increase of 24.5% year-on-year[15]. - The sales target for 2023 is set at 3 million vehicles, representing a year-on-year growth of 21.7%, with a specific target of 600,000 new energy vehicles, which is a 73% increase[49]. Financial Performance - The group's total revenue for the year was 92.663 billion yuan, with a net profit attributable to shareholders of 10.265 billion yuan, achieving a net profit margin of 11.1%, the best level in three years[17]. - The sales revenue for Dongfeng Motor Group in 2022 was RMB 92.663 billion, a decrease from RMB 113.168 billion in 2021[30]. - The total sales cost for the group was approximately RMB 83.836 billion, a decrease of about 15.3% from RMB 98.929 billion in the previous year[189]. - The overall gross profit margin for the group was approximately 9.5%, with a total gross profit of about RMB 8.827 billion, down 38.0% from RMB 14.239 billion in the previous year[189]. - The total other income for the group in 2022 was approximately RMB 6.031 billion, an increase of about RMB 0.951 billion compared to RMB 5.08 billion in the same period last year[190]. - The company plans to increase dividend payouts, proposing a dividend of RMB 0.30 per share for the 2022 fiscal year[23]. Investment and R&D - In 2022, Dongfeng Motor Group completed investments totaling RMB 9.492 billion, focusing on core R&D capabilities, manufacturing upgrades, and new energy strategies[45]. - Research and development investment for the group in 2022 was RMB 8.078 billion, an increase of RMB 0.849 billion or 11.74% from RMB 7.229 billion in the same period last year[196]. - Investment in new energy research and development for the group in 2022 was RMB 3.784 billion, an increase of RMB 2.019 billion or 114.4% from RMB 1.765 billion in the same period last year[196]. Market Strategy and Transformation - Dongfeng Motor Group is accelerating its transformation into a technology-driven enterprise, focusing on the development of core technologies and deepening reforms[17]. - The company has established a strategic layout covering luxury, high-end, mid-range, and economy brands, including the launch of the "Mache" green power brand with a hybrid engine efficiency of 45.18%[18]. - Dongfeng aims to enhance its competitive edge and operational efficiency through ongoing reforms and strategic restructuring[20]. - The company is actively pursuing market expansion with autonomous driving products operating in over 30 cities nationwide[18]. - Dongfeng Motor Group is accelerating its electrification transformation in joint ventures, enhancing its competitiveness in the market[49]. Production Capacity - The company has a production capacity of approximately 3.85 million vehicles, with 620,000 for commercial vehicles and 3.23 million for passenger vehicles[41]. - Dongfeng Motor Group's total vehicle production capacity is expected to reach 3.87 million units by the end of 2023, driven by the construction of the Yunfeng factory and upgrades at Yijiete New Energy Company[42]. Corporate Governance and Shareholder Information - The largest shareholder, Dongfeng Motor Corporation, holds 5,760,388,000 domestic shares, representing 66.86% of the total issued shares[72]. - The company’s board of directors includes six members, with the chairman being Zhu Yan Feng and the president being Yang Qing[75]. - As of December 31, 2022, the total share capital of the company is RMB 8,616,120,000, divided into 8,616,120,000 ordinary shares, with a par value of RMB 1 per share[67]. Joint Ventures and Partnerships - The company’s joint ventures will continue to procure automotive parts and production equipment from their partners, with ongoing evaluations for competitive pricing and quality[153]. - The joint venture companies paid a total of RMB 49.549 billion for the procurement of automotive parts and production equipment from their partners as of December 31, 2022[158]. - The technology licensing and support agreements between the joint ventures and their foreign partners are governed by umbrella agreements, ensuring fair commercial terms[168].

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之內容概不負責，對其準確性或完整性 亦不發表任何聲明，並明確表示概不就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之 任何損失承擔任何責任。 DONGFENG MOTOR GROUP COMPANY LIMITED* 東風汽車集團股份有限公司 (於中華人民共和國註冊成立的股份有限公司) (股份代號: 489) 二零二二年度業績公告 東風汽車集團股份有限公司(「本公司」)董事(「董事」)會欣然宣佈本公司及其附屬公司(「本 集團」或「東風汽車集團」)截至二零二二年十二月三十一日止年度的經審核綜合業績及二零二 一年的比較數字。 除非另有所指，本業績公告所陳述、討論有關業務，包括製造、研發、產銷量、市佔率、投資、 網絡、員工、激勵、社會責任、公司管治等，均全面包括集團本部、附屬公司、合營企業、聯營 企業(包括通過附屬公司、合營企業、聯營企業直接或間接擁有股本權益的公司)之資料。 東風汽車集團股份有限公司 綜合損益表 ...

Sales Performance - In the first half of 2022, Dongfeng Motor Group sold approximately 1.2342 million vehicles, a year-on-year decrease of 13.4%[7] - The sales of self-owned passenger vehicles reached 226,800 units, an increase of 59.8% year-on-year, outperforming the industry growth rate by 56.4 percentage points[7] - The sales of commercial vehicles were approximately 174,600 units, reflecting a year-on-year decline of 50.0% due to oversupply in the logistics sector and rising fuel prices[7] - New energy vehicle sales surged to approximately 128,600 units, a year-on-year increase of 190%, ranking fourth in the industry[7] - The company's passenger vehicle sales were approximately 1.0596 million units, representing a year-on-year decline of about 1.5%, while the sales of commercial vehicles dropped significantly by approximately 50.0% to about 174,600 units[36] - The sales of new energy vehicles surged to approximately 128,600 units, marking a year-on-year increase of about 185.9%, with new energy passenger vehicles accounting for approximately 203.0% growth[36] Financial Performance - The group achieved a revenue of 44.309 billion yuan and a net profit attributable to shareholders of 5.529 billion yuan, with a net profit margin of 12.5%[7] - The company's revenue for the first half of 2022 decreased by approximately RMB 25.738 billion, a decline of about 36.7% compared to the same period last year[37] - The passenger vehicle business generated revenue of approximately RMB 19.832 billion, an increase of about 83.5% from RMB 10.808 billion in the previous year[39] - The commercial vehicle business experienced a significant revenue drop of approximately 61.8%, with sales revenue of about RMB 20.808 billion compared to RMB 54.519 billion in the previous year[40] - The automotive finance business reported revenue of approximately RMB 3.222 billion, a decrease of about 27.8% from RMB 4.465 billion in the previous year[41] - The net profit attributable to shareholders for the first half of 2022 was approximately RMB 5.529 billion, a decrease of approximately RMB 3.084 billion or 35.8% compared to RMB 8.613 billion in the same period last year[54] Research and Development - Research and development investment accounted for 5.6% of total revenue, focusing on new energy, autonomous driving, and electronic architecture[8] - The company is focusing on the development of new automotive technologies and expanding its business in the automotive finance sector through subsidiaries[12] - Research costs for the six months ended June 30, 2022, amounted to RMB 2,463 million, an increase of 5.1% from RMB 2,344 million in the same period of 2021[91] Strategic Initiatives - The company is advancing the integration of its subsidiaries and plans to acquire shares in Dongfeng Motor Co., Ltd. to enhance its commercial vehicle business[8] - The group aims to accelerate the launch of several new vehicle models and strengthen its product structure in the second half of 2022[9] - Dongfeng is actively pursuing strategic initiatives, including the acquisition of DFL light commercial vehicle business and restructuring of equity in related companies[22] - The company aims to establish a joint venture for power battery projects, reflecting its commitment to innovation and market expansion[22] Governance and Compliance - The company plans to enhance its governance practices and maintain transparency in operations to ensure steady growth and shareholder value[17] - The board has established an Audit and Risk Management Committee to oversee the financial reporting process and assess the nature and extent of company risks[24] - The company has established a Nomination Committee to propose candidates for directors and review nomination standards and procedures[26] - The company is committed to enhancing governance transparency and shareholder accountability, adhering to relevant laws and regulations[142] Cash Flow and Liquidity - The net cash flow from operating activities for the group was approximately RMB 3.865 billion, primarily due to a pre-tax profit of about RMB 2.249 billion after deducting non-cash items, and a decrease in trade payables that reduced cash flow by approximately RMB 13.312 billion[58] - The net cash inflow from investment activities was approximately RMB 10.489 billion, reflecting an increase in dividends received from joint ventures of about RMB 6.803 billion and cash received from the disposal of stocks totaling approximately RMB 6.721 billion[59] - The net cash inflow from financing activities was approximately RMB 6.546 billion, mainly from bank loans and bond increases amounting to about RMB 14.239 billion, offset by cash outflows for repayment of bank loans and bonds totaling approximately RMB 7.631 billion[59] - As of June 30, 2022, cash and cash equivalents amounted to approximately RMB 62.041 billion, an increase of about RMB 13.011 billion compared to RMB 49.030 billion at the end of 2021[60] Market Outlook - The company expects a slight increase in automobile sales in 2022 compared to 2021, driven by government policies promoting consumption and strong consumer demand for vehicles[16] - The GDP growth in China for the first half of 2022 was 2.5%, with expectations for gradual recovery in the second half due to effective policy measures[141] - The automotive industry is projected to see a slight increase in sales in 2022 compared to 2021, driven by strong consumer demand and industry transformation[141] Shareholder Information - The company does not recommend the distribution of an interim dividend for the six months ending June 30, 2022[28] - The total share capital as of June 30, 2022, was RMB 8,616,120,000, divided into 8,616,120,000 ordinary shares, with domestic shares accounting for approximately 66.86%[30] - Major shareholders holding 5% or more of the issued share capital include Dongfeng Motor Group Co., Ltd. with 66.86% and SCMB Overseas Limited with 2.81%[157]

Sales Performance - Dongfeng Motor Group sold approximately 2.7751 million vehicles in 2021, a year-on-year decrease of 3.3%[12] - The company's self-owned passenger vehicle sales reached 377,000 units, representing a year-on-year growth of 47.1%, outperforming the industry growth rate by 40 percentage points[12] - Commercial vehicle sales totaled approximately 522,600 units, down 5.8% year-on-year, but the market share improved compared to the previous year[12] - The new energy vehicle segment experienced explosive growth, with sales of about 160,600 units, a year-on-year increase of 260%, ranking fourth in the industry[12] - Dongfeng Motor Group's total vehicle sales for 2021 reached 2.7751 million units, with a market share of approximately 10.6%[16] - The sales volume of passenger vehicles was approximately 2.2525 million units, representing a year-on-year decline of about 2.6%, while the sales volume of commercial vehicles was approximately 522,600 units, down about 5.8%[91] Financial Performance - Revenue for 2021 was RMB 113.008 billion, a year-on-year increase of 4.2%[18] - Pre-tax profit for 2021 was RMB 12.760 billion, representing a 4.7% increase year-on-year, with a pre-tax profit margin of 11.3%[14] - Net profit attributable to shareholders for 2021 was RMB 11.387 billion, up 5.8% year-on-year[14] - The total sales cost for 2021 was approximately RMB 98.818 billion, an increase of approximately 6.7% year-on-year, with a gross profit margin of approximately 12.6%[97] - The net profit attributable to shareholders for 2021 was approximately RMB 11.39 billion, an increase of about RMB 629 million or 5.8% year-on-year[107] - The total assets as of December 31, 2021, were approximately RMB 319.77 billion, an increase of about RMB 2.46 billion or 0.8% from the end of the previous year[108] - The total liabilities decreased to approximately RMB 167.70 billion, a reduction of about RMB 8.37 billion or 4.8% compared to the end of the previous year[109] - The total equity increased to approximately RMB 152.06 billion, an increase of about RMB 10.83 billion or 7.7% from the end of the previous year[110] Market Position - Dongfeng Motor Group's market share in the overall vehicle market was 10.6% in 2021, ranking third among domestic automotive manufacturers[9] - The overall automotive market in China saw sales of approximately 26.2748 million units in 2021, a year-on-year growth of about 3.8%[12] - The company aims for a sales growth target of 25% in 2022, with commercial vehicle sales expected to increase by 10% and passenger vehicle sales by 28%[26] Research and Development - Research and development investment increased by 8.4% year-on-year, focusing on new energy, autonomous driving, and software engineering[14] - Dongfeng launched the "Dongfeng Hydrogen Boat," the first mass-produced fuel cell passenger vehicle in China, and implemented key technologies such as 800V high-voltage platforms and solid-state batteries[13] - Dongfeng's L2-level smart driving technology has been scaled for mass production, with L4-level autonomous driving technology being tested in over 30 cities[13] - Dongfeng Motor Group's R&D expenditure has increased by 25%, reflecting its commitment to innovation and competitiveness[123] Operational Efficiency - The company has implemented measures to enhance operational efficiency and collaboration with suppliers to mitigate the impact of the semiconductor shortage on its joint venture passenger vehicle business[12] - The company is enhancing its supply chain management to mitigate risks, with a focus on diversifying suppliers by 30%[125] - The company has made significant progress in enhancing its internal management and control systems, contributing to improved operational efficiency[130] Shareholder Returns - The board proposed a dividend of RMB 0.30 per share for the 2021 fiscal year, reflecting the company's commitment to returning value to shareholders[15] - The company's joint ventures declared and distributed a total dividend of approximately RMB 9.638 billion in 2021[29] - The board proposed a final dividend of RMB 0.3 per share for the fiscal year 2021, subject to shareholder approval[27] Corporate Governance - The company is committed to protecting shareholders' rights and ensuring sustainable development through effective supervision of financial operations and internal controls[128] - The supervisory board confirmed that the company's financial statements for the fiscal year 2021 were prepared in accordance with listing rules and international accounting standards, reflecting a comprehensive and objective view of the company's operational results and financial status[131] - The company maintained compliance with the corporate governance code and has adopted improved procedures to enhance corporate governance standards[134] Employee and Social Responsibility - The company complies with relevant labor and social welfare laws, ensuring monthly contributions to social insurance for employees, including pension, medical, unemployment, work injury, and maternity insurance[49] - The group made total donations of approximately RMB 0.04 billion in the fiscal year ending December 31, 2021[32] Future Outlook - Dongfeng Motor Group anticipates a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[118] - The company is investing heavily in new product development, with a budget allocation of 2 billion yuan for electric vehicle technology[119] - Market expansion efforts include entering three new international markets, aiming for a 5% market share in each by the end of the next fiscal year[120]

[Chairman's Statement](index=3&type=section&id=Chairman%27s%20Statement) The Group achieved stable operational progress in the first half of 2021, capitalizing on market recovery despite challenges like the pandemic, chip shortages, and rising raw material prices - In the first half of 2021, the Group's vehicle sales increased by **24.5% year-on-year**, with breakthroughs in passenger vehicle business and increased market share in commercial vehicles[12](index=12&type=chunk) - The Group launched the "Oriental Rising" plan, setting "14th Five-Year Plan" targets of **1 million units** each for commercial vehicles, self-owned brand passenger vehicles, and new energy vehicles[14](index=14&type=chunk) - The Board recommended a special dividend of **RMB 0.40 per share** (tax inclusive) to shareholders[14](index=14&type=chunk) 2021 First Half Key Financial and Operational Indicators | Indicator | Value | Year-on-Year Change | | :--- | :--- | :--- | | Vehicle Sales | Approximately 1.4244 million units | +24.5% | | Profit Before Tax | RMB 10.555 billion | Record high | | Return on Net Assets | 12.1% | Significantly better than prior period | | R&D Investment | - | +31.0% | | Interest-Bearing Debt | Decreased by RMB 8.633 billion from year-end | - | | Gearing Ratio | Decreased by 2.9 percentage points from year-end | - | [Board of Directors' Report](index=6&type=section&id=Board%20of%20Directors%27%20Report) This report details the Group's business operations, corporate governance practices, and significant events during the reporting period [Business Overview](index=6&type=section&id=I.%20Business%20Overview) The Group's core business encompasses R&D, manufacturing, and sales of commercial vehicles, passenger vehicles, and auto parts, extending to automotive finance and logistics, with commercial vehicles being the primary revenue source in H1 2021 - The Group's main businesses include R&D, manufacturing, and sales of commercial vehicles, passenger vehicles, engines, and parts, along with diversified services like automotive finance, logistics, and insurance brokerage[18](index=18&type=chunk) - For the full year, the Chinese automotive market is expected to end three consecutive years of decline and achieve positive growth, with an industry growth forecast of **6.9%**, despite uncertainties from localized pandemic resurgences and chip supply risks[23](index=23&type=chunk) 2021 First Half Production, Sales Volume, and Market Share | Vehicle Type | Production Volume (units) | Sales Volume (units) | Sales Market Share (%) | | :--- | :--- | :--- | :--- | | Commercial Vehicles | 330,860 | 349,150 | 12.1 | | Passenger Vehicles | 1,090,098 | 1,075,261 | 10.7 | | **Total** | **1,420,958** | **1,424,411** | **11.0** | 2021 First Half Business Revenue Composition | Business Segment | Sales Revenue (RMB million) | Proportion of Group Sales Revenue (%) | | :--- | :--- | :--- | | Passenger Vehicles | 10,639 | 15.2 | | Commercial Vehicles | 54,519 | 78.1 | | Automotive Finance | 4,465 | 6.4 | | Company and Others | 497 | 0.7 | | **Total** | **69,856** | **100.0** | [Corporate Governance](index=8&type=section&id=II.%20Corporate%20Governance) The company adhered to the HKEX Corporate Governance Code and Listing Rules, maintaining a seven-member board with three independent non-executive directors, and confirmed the effectiveness of its internal control systems - The company complied with the code provisions of the Corporate Governance Code contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited during the reporting period[26](index=26&type=chunk) - The Board of Directors comprises **7 directors**, including **3 independent non-executive directors**, with Mr. Liang Weili possessing professional qualifications in accounting and financial management, ensuring compliance with listing rules[27](index=27&type=chunk) - The Audit and Risk Management Committee reviewed the Group's unaudited financial report for the six months ended June 30, 2021[33](index=33&type=chunk) - The Board, through the Audit and Risk Management Committee and the Company's Audit Department, comprehensively reviewed the effectiveness of the internal control system for the first half of the year and deemed it fully effective[37](index=37&type=chunk) [Significant Matters](index=13&type=section&id=III.%20Significant%20Matters) The Board declared a special dividend of RMB 0.4 per share, with no major acquisitions, disposals, or significant litigation during the period, and the controlling shareholder held 66.86% of the total share capital as of June 30, 2021 - The Board declared a special dividend of **RMB 0.4 per share** (tax inclusive), which was approved by the extraordinary general meeting[40](index=40&type=chunk) - As of the first half of 2021, the company had no significant acquisitions or disposals of subsidiaries, joint ventures, and associates, nor was it involved in any major litigation or arbitration[41](index=41&type=chunk) - The controlling shareholder, Dongfeng Motor Group Company Limited, holds all domestic shares of the company, accounting for **66.86%** of the total share capital[45](index=45&type=chunk) Share Capital Structure (As of June 30, 2021) | Share Class | Number of Shares | Proportion (%) | | :--- | :--- | :--- | | Domestic Shares | 5,760,388,000 | 66.86 | | H Shares | 2,855,732,000 | 33.14 | | **Total Share Capital** | **8,616,120,000** | **100.00** | [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the Group's operating environment, business performance, and financial results for the reporting period [Operating Environment](index=16&type=section&id=I.%20Operating%20Environment) In the first half of 2021, China's economy steadily recovered post-pandemic, with GDP growing by 12.7% year-on-year, and the automotive market, especially new energy vehicles, showed strong recovery 2021 First Half China Automotive Market Overview | Market/Segment | Sales Volume | Year-on-Year Growth Rate (%) | | :--- | :--- | :--- | | Overall Automotive Market | 12.8905 million units | 25.6 | | Passenger Vehicles | 10.0066 million units | 27.0 | | Commercial Vehicles | 2.8839 million units | 20.9 | | New Energy Vehicles | 1.2060 million units | 209.5 | [Operating Analysis](index=17&type=section&id=II.%20Operating%20Analysis) In the first half of 2021, the Group achieved approximately 1.4244 million units in sales, RMB 69.856 billion in sales revenue, and RMB 8.629 billion in profit attributable to shareholders, overcoming challenges like chip shortages and rising raw material prices - Sales volumes across all business segments achieved year-on-year growth: passenger vehicle sales were approximately **1.0753 million units**, up approximately **21.9%**; commercial vehicle sales were approximately **349,200 units**, up approximately **33.2%**, exceeding the industry growth rate by **12.3 percentage points**; new energy vehicle sales were approximately **45,000 units**, up approximately **288.7%**[53](index=53&type=chunk) Group's 2021 First Half Operating Performance | Indicator | Value | | :--- | :--- | | Total Sales Volume | Approximately 1.4244 million units | | Sales Revenue | Approximately RMB 69.856 billion | | Profit Attributable to Shareholders | Approximately RMB 8.629 billion | [Financial Analysis](index=18&type=section&id=III.%20Financial%20Analysis) The Group demonstrated strong financial performance in the first half of 2021, with total revenue increasing by 38.1% to RMB 69.856 billion and profit attributable to shareholders surging by 136.9% to RMB 8.629 billion, alongside improved profitability and a stable financial position [Revenue Analysis](index=18&type=section&id=3.1%20Revenue%20Analysis) The Group's total revenue increased by 38.1% to RMB 69.856 billion, with all business segments showing growth, notably commercial vehicle revenue up 38.7% and passenger vehicle revenue up 39.9% Segment Revenue (For the Six Months Ended June 30) | Business Segment | 2021 (RMB million) | 2020 (RMB million) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Passenger Vehicles | 10,639 | 7,606 | 39.9% | | Commercial Vehicles | 54,519 | 39,314 | 38.7% | | Automotive Finance | 4,465 | 3,479 | 28.3% | | **Total** | **69,856** | **50,576** | **38.1%** | [Cost, Expense, and Profit Analysis](index=19&type=section&id=3.2%20Cost%2C%20Expense%2C%20and%20Profit%20Analysis) Gross profit increased by 30.5% to RMB 10.200 billion, with a comprehensive gross margin of 14.6%, while other income significantly grew due to Stellantis dividends, and profit attributable to shareholders surged by 136.9% - Other income increased by **RMB 1.252 billion** year-on-year, primarily due to dividends received from Stellantis during the period[61](index=61&type=chunk) - Finance costs decreased by **RMB 395 million** year-on-year, mainly due to foreign exchange gains from Euro-denominated borrowings as the Euro depreciated against the RMB[67](index=67&type=chunk) 2021 First Half Profit and Profitability Ratios | Indicator | 2021 First Half | 2020 First Half | Change | | :--- | :--- | :--- | :--- | | Gross Profit | RMB 10.200 billion | RMB 7.816 billion | +30.5% | | Comprehensive Gross Margin | 14.6% | - | - | | Share of Profits of Joint Ventures | RMB 6.458 billion | RMB 3.224 billion | +100.3% | | Profit Attributable to Shareholders | RMB 8.629 billion | RMB 3.643 billion | +136.9% | | Net Profit Margin | 12.4% | 7.2% | +5.2 percentage points | | Return on Net Assets | 12.1% | 5.7% | +6.4 percentage points | [Balance Sheet and Cash Flow Analysis](index=22&type=section&id=3.3%20Balance%20Sheet%20and%20Cash%20Flow%20Analysis) As of June 30, 2021, total assets grew by 2.6% to RMB 324.707 billion, total liabilities decreased by 2.8% to RMB 170.555 billion, and total equity increased by 9.2%, while cash and cash equivalents decreased due to operating and financing outflows Balance Sheet Summary (As of June 30, 2021) | Indicator | June 30, 2021 (RMB billion) | December 31, 2020 (RMB billion) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 159.455 | 144.438 | +10.4% | | Total Current Assets | 165.252 | 172.083 | -4.0% | | **Total Assets** | **324.707** | **316.521** | **+2.6%** | | Total Non-Current Liabilities | 28.857 | 33.329 | -13.4% | | Total Current Liabilities | 141.698 | 142.066 | -0.3% | | **Total Liabilities** | **170.555** | **175.395** | **-2.8%** | | **Total Equity** | **154.152** | **141.126** | **+9.2%** | Cash Flow Statement Summary (2021 First Half) | Cash Flow Item | Amount (RMB million) | | :--- | :--- | | Net cash used in operating activities | (11,466) | | Net cash generated from investing activities | 10,240 | | Net cash used in financing activities | (8,468) | | **Net decrease in cash and cash equivalents** | **(9,694)** | [Interim Financial Information](index=26&type=section&id=Interim%20Financial%20Information) This section presents the Group's unaudited interim financial statements and accompanying notes for the six months ended June 30, 2021 [Interim Condensed Consolidated Financial Statements](index=27&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section includes the Group's unaudited interim condensed consolidated statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows for the six months ended June 30, 2021 Interim Condensed Consolidated Statement of Profit or Loss Summary (For the Six Months Ended June 30) | Item | 2021 (RMB million) | 2020 (RMB million) | | :--- | :--- | :--- | | Revenue | 69,856 | 50,576 | | Gross Profit | 10,200 | 7,816 | | Profit Before Tax | 10,555 | 4,380 | | Profit for the Period | 9,259 | 3,380 | | Profit Attributable to Equity Holders of the Parent | 8,629 | 3,643 | Interim Condensed Consolidated Statement of Financial Position Summary | Item | June 30, 2021 (RMB million) | December 31, 2020 (RMB million) | | :--- | :--- | :--- | | Total Non-Current Assets | 159,455 | 144,438 | | Total Current Assets | 165,252 | 172,083 | | **Total Assets** | **324,707** | **316,521** | | Total Non-Current Liabilities | 28,857 | 33,329 | | Total Current Liabilities | 141,698 | 142,066 | | **Total Liabilities** | **170,555** | **175,395** | | **Total Equity** | **154,152** | **141,126** | [Notes to the Interim Condensed Consolidated Financial Statements](index=34&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the basis of preparation, significant accounting policies, segment information, and related party transactions, notably the reclassification of the Stellantis investment due to loss of significant influence - The financial information was prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[98](index=98&type=chunk) - Due to the merger of PSA and FCA into Stellantis, the Group no longer has significant influence over the combined entity, reclassifying its investment from an associate (equity method) to a financial asset measured at fair value through other comprehensive income, with a fair value of **RMB 22.284 billion** as of June 30, 2021[126](index=126&type=chunk) - Segment information indicates that the commercial vehicle segment is the largest contributor to revenue and performance, while the passenger vehicle segment, despite higher revenue, recorded a segment loss, and the automotive finance segment showed stable performance[111](index=111&type=chunk) - Related party transactions are substantial, primarily involving the purchase of auto parts (**RMB 10.138 billion**) and vehicles (**RMB 4.482 billion**) from joint ventures, as well as the sale of auto parts (**RMB 2.362 billion**) to joint ventures[134](index=134&type=chunk)[136](index=136&type=chunk)

```markdown [Chairman's Statement](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E9%95%BF%E8%87%B4%E8%BE%9E) [Market and Performance Review](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E9%95%BF%E8%87%B4%E8%BE%9E-%E5%B8%82%E5%A0%B4%E8%88%87%E6%A5%AD%E7%B8%BE%E5%9B%9E%E9%A1%A7) The Chairman reviewed H1 2020, highlighting the severe impact of the COVID-19 pandemic on China's automotive industry, yet the Group's sales performance slightly outperformed the market despite a significant decline in net profit attributable to parent **Key Performance Indicators** | Indicator | H1 2020 | Year-on-Year Change (%) | Industry H1 Change (%) | | :--- | :--- | :--- | :--- | | **Total Vehicle Sales** | **1.1445 million vehicles** | -**16.7%** | -**16.9%** | | **Sales Revenue** | **50.576 billion yuan** | +**4.4%** | - | | **Net Profit Attributable to Parent** | **3.018 billion yuan** | -**64.5%** | - | - Passenger vehicle segment sales in H1 were **0.8823 million vehicles**, a **22.2%** year-on-year decline, outperforming the industry by **0.2 percentage points**. Dongfeng Nissan and Dongfeng Honda's sales decline was less than the overall passenger vehicle market decline[5](index=5&type=chunk) - Commercial vehicle segment sales in H1 were **0.2622 million vehicles**, a **9.0%** year-on-year increase, outperforming the industry by **0.4 percentage points**, demonstrating strong market resilience[5](index=5&type=chunk) - The Company accelerated the development of own brands, promoting brand premiumization, with significant progress in the high-end new energy vehicle brand project (Voyah)[5](index=5&type=chunk) [H2 Outlook and Strategy](index=5&type=section&id=%E8%91%A3%E4%BA%8B%E9%95%B7%E8%87%B4%E8%BE%9E-%E4%B8%8B%E5%8D%8A%E5%B9%B4%E5%B1%95%E6%9C%9B%E8%88%87%E6%88%B0%E7%95%A5) Looking ahead to H2, the Company anticipates a gradual market recovery but a full-year decline, with strategic goals focused on outperforming the market, increasing market share, boosting own-brand sales, accelerating digital transformation, managing risks, and advancing key initiatives - China's automotive market sales growth for the full year 2020 is expected to be around **-7.3%**, but the Company is optimistic about market recovery to positive growth in 2021 and beyond[8](index=8&type=chunk) - Key tasks for H2 include: - Accelerate catch-up, strive to outperform the market, and increase market share - Boost sales of core own-brand products - Accelerate digital transformation and build a new marketing ecosystem - Control supply chain and dual credit compliance risks - Advance the 14th Five-Year Plan, build the "Voyah" brand, and A-share listing efforts[8](index=8&type=chunk) [Company Information](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Company Basic Information](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This section provides the Company's basic registration information, principal place of business, company secretary, auditor, and listing information | Item | Information | | :--- | :--- | | **Registered Name** | Dongfeng Motor Group Company Limited | | **Registered Address** | No. 1 Dongfeng Avenue, Wuhan Economic and Technological Development Zone, Wuhan, Hubei Province, PRC | | **Company Website** | www.dfmg.com.cn | | **Auditor** | PricewaterhouseCoopers | | **Listing Place** | The Stock Exchange of Hong Kong Limited | | **Stock Code** | 00489 | [Directors' Report](index=7&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A%E6%9B%B8) [Business Overview](index=7&type=section&id=%E4%B8%80.%20%E6%A5%AD%E5%8B%99%E6%A6%82%E8%A6%BD) The Group's core business covers R&D, manufacturing, and sales of commercial vehicles, passenger vehicles, engines, and parts, expanding into auto finance and new energy vehicles; in H1 2020, total vehicle sales were **1.1445 million vehicles** with **11.2%** market share, driven by strong commercial vehicle revenue growth despite passenger vehicle decline, with market recovery expected in H2 [Principal Activities](index=7&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99) - The Group's main business includes R&D, manufacturing, and sales of commercial vehicles, passenger vehicles, engines, and automotive parts, and provides auto finance, logistics, insurance, and other related services[12](index=12&type=chunk) - Business is conducted through multiple joint ventures and wholly-owned subsidiaries, with main partners for passenger vehicles including Nissan, Honda, and PSA Group; the main partner for commercial vehicles is Volvo Trucks (Sweden)[12](index=12&type=chunk) - The Group is accelerating the development of its new energy vehicle business, with strategic layout through Dongfeng Passenger Vehicle Company, Voyah Technology, eGT New Energy Automotive, and other entities[12](index=12&type=chunk) [H1 2020 Key Business Operating Data](index=8&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E4%BA%8C%E9%9B%B6%E4%BA%8C%E9%9B%B6%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99%E9%81%8B%E7%87%9F%E8%B3%87%E6%96%99) | Category | Production Volume (vehicles) | Sales Volume (vehicles) | Sales Market Share (%) | | :--- | :--- | :--- | :--- | | **Commercial Vehicle** | 270,450 | 262,208 | **10.9** | | **Passenger Vehicle** | 851,423 | 882,277 | **11.2** | | **Total** | 1,121,873 | 1,144,485 | **11.2** | | Business Segment | Sales Revenue (RMB million) | Proportion of Group Total Revenue (%) | | :--- | :--- | :--- | | **Passenger Vehicle** | **7,606** | **15.0** | | **Commercial Vehicle** | **39,314** | **77.7** | | **Auto Finance** | **3,479** | **6.9** | | **Company and Others** | 305 | **0.6** | | **Total** | **50,576** | **100.0** | [H1 2020 Key Operating Results](index=9&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%20%E4%BA%8C%E9%9B%B6%E4%BA%8C%E9%9B%B6%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E4%B8%BB%E8%A6%81%E7%B6%93%E7%87%9F%E6%88%90%E6%9E%9C) - Passenger vehicle segment sales in H1 declined **22.2%** year-on-year, but outperformed the industry average. Dongfeng Nissan and Dongfeng Honda's sales performance both outperformed the overall passenger vehicle market[16](index=16&type=chunk) - Commercial vehicle segment sales in H1 increased **9.0%** year-on-year, also outperforming the industry average. Dongfeng Liuzhou Motor and Dongfeng Automobile Co., Ltd. under its umbrella saw sales growth significantly higher than the industry in Q2[16](index=16&type=chunk) [Business Outlook](index=9&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%20%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) - The automotive market is expected to gradually recover in H2 as the impact of the pandemic weakens and policies stimulate demand. Loosening of purchase restrictions, trade-in subsidies, and extension of new energy vehicle subsidies will stimulate passenger vehicle consumption[17](index=17&type=chunk) - The commercial vehicle market is driven by policies such as the elimination of National III emission standard vehicles, overload control and load limits, and new infrastructure, new urbanization, and major projects construction, which are expected to bring incremental volume in H2[17](index=17&type=chunk) - The Company predicts the full year 2020 industry sales growth to be around **-7.3%**, while Dongfeng Motor Group Co., Ltd.'s own projected growth rate is around **1.4%**, demonstrating confidence in outperforming the market[18](index=18&type=chunk) [Corporate Governance](index=10&type=section&id=%E4%BA%8C.%20%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Company adheres to corporate governance standards, complying with relevant codes, detailing board and committee structures, and reviewing internal controls [Compliance with Corporate Governance Code](index=10&type=section&id=2.%20%E3%80%8A%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87%E3%80%8B) - During the reporting period, the Company has fully complied with the Corporate Governance Code, except for deviations in the rotation and retirement of directors (Rule A.4.2) and the composition of the Nomination Committee (Rule A.5.1)[20](index=20&type=chunk) - Due to the passing of Independent Non-executive Director Mr. Zhang Xiaotie, the Company was temporarily non-compliant with Listing Rules requirements regarding the number, professional qualifications, and composition of the Audit Committee for independent non-executive directors. The Company has on August 2020 appointed new directors to comply with the regulations[21](index=21&type=chunk) [Board Meetings](index=12&type=section&id=5.%20%E8%91%A3%E4%BA%8B%E6%9C%83%E6%9C%83%E8%AD%B0) - A total of three Board meetings were held in H1 2020, reviewing matters including financial budget, investment plan, senior management adjustments, connected transactions, and Dongfeng Renault restructuring and other significant matters[241](index=241&type=chunk)[25](index=25&type=chunk) | Director Name | Position | Attendance Rate (%) | | :--- | :--- | :--- | | Zhu Yanfeng | Executive Director | **100%** | | Li Shaozhu | Executive Director | **100%** | | You Zheng | Executive Director | **100%** | | Cheng Daoran | Non-executive Director | **100%** | | Ma Zhigeng | Independent Non-executive Director | **100%** | | Chen Yunfei | Independent Non-executive Director | **100%** | | Zhang Xiaotie | Independent Non-executive Director | **33%** | [Board Committees](index=14&type=section&id=6.%20%E8%91%A3%E4%BA%8B%E6%9C%83%E5%B0%88%E9%96%80%E5%A7%94%E5%93%A1%E6%9C%83) - The Audit and Risk Management Committee is composed of three independent non-executive directors and has reviewed the unaudited financial report for the current period[27](index=27&type=chunk) - The Remuneration Committee is composed of three members, with a majority of independent non-executive directors, and is responsible for formulating remuneration schemes for directors, supervisors, and senior management[28](index=28&type=chunk) - The Nomination Committee is composed of three members, with a majority of independent non-executive directors, and is responsible for nominating director candidates[29](index=29&type=chunk) [Significant Matters and Share Capital Information](index=15&type=section&id=%E4%B8%89.%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A0%85) This section discloses the Company's key developments and share capital structure, including the interim dividend, the intended acquisition of Renault's stake in Dongfeng Renault for transformation, and major shareholder holdings [Interim Results and Dividends](index=15&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E8%82%A1%E6%81%AF) - The Board announced the distribution of a 2020 interim dividend of RMB **0.10** yuan per share, on par with the same period in 2019[32](index=32&type=chunk) [Significant Acquisitions and Disposals](index=15&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E5%8F%8A%E8%81%AF%E7%92%B0%E4%BC%81%E6%A5%AD) - In April 2020, the Company reached a preliminary intention with Renault, where Renault intends to transfer its **50%** equity interest in Dongfeng Renault to the Company, and Dongfeng Renault will cease Renault brand-related business activities and will undergo transformation and upgrading by the Company[33](index=33&type=chunk) [Share Capital Structure](index=16&type=section&id=%E8%82%A1%E6%9C%AC) | Share Class | Number of Shares | Proportion of Total Share Capital (%) | | :--- | :--- | :--- | | **Domestic Shares** | **5,760,388,000** | **66.86%** | | **H-shares** | **2,855,732,000** | **33.14%** | | **Total Share Capital** | **8,616,120,000** | **100.00%** | [Major Shareholders' Interests](index=16&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) - As of June 30, 2020, Dongfeng Motor Group Co., Ltd. holds **5,760,388,000** Domestic Shares in the Company, accounting for **66.86%** of the total share capital, as the controlling shareholder[38](index=38&type=chunk) - Among H-shares, several institutions such as Standard Chartered Bank, Westwood Global Investments, LLC, FIL Limited, etc. hold over **5%** of the H-share class shares[38](index=38&type=chunk)[39](index=39&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Operating Environment and Analysis](index=18&type=section&id=%E4%B8%80.%20%E7%B6%93%E7%87%9F%E7%92%B0%E5%A2%83) In H1 2020, China's automotive market faced severe pandemic impact, yet the Group's sales outperformed the overall market, demonstrating operational resilience across both passenger and commercial vehicle segments | Market | H1 2020 Sales Volume | Year-on-Year Change (%) | | :--- | :--- | :--- | | **China's automotive market** | **10.257 million vehicles** | -**16.9%** | | **Passenger vehicle market** | **7.8725 million vehicles** | -**22.4%** | | **Commercial vehicle market** | **2.384 million vehicles** | +**8.6%** | | Business Segment | H1 2020 Sales Volume | Year-on-Year Change (%) | Compared to Industry | | :--- | :--- | :--- | :--- | | **Group's passenger vehicles** | **0.8823 million vehicles** | -**22.2%** | better than industry by **0.2 percentage points** | | **Group's commercial vehicles** | **0.2622 million vehicles** | +**9.0%** | better than industry by **0.4 percentage points** | [Financial Analysis](index=20&type=section&id=%E4%B8%89.%20%E8%B2%A1%E5%8B%99%E5%88%86%E6%9E%90) In H1 2020, Group revenue grew due to strong commercial vehicle performance, offsetting passenger vehicle decline, but net profit attributable to parent sharply decreased due to reduced joint venture profits and increased asset impairment [Revenue Analysis](index=20&type=section&id=1.%20%E6%94%B6%E5%85%A5) | Business Segment (RMB million) | H1 2020 | H1 2019 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | **Passenger Vehicle** | **7,606** | **13,563** | -**43.9%** | | **Commercial Vehicle** | **39,314** | **32,364** | +**21.5%** | | **Auto Finance** | **3,479** | **2,484** | +**40.1%** | | **Company and Others** | 305 | **0.6** | - | | **Total** | **50,576** | **48,447** | +**4.4%** | - The growth in total revenue primarily came from the revenue growth of Dongfeng Commercial Vehicle Co., Ltd. and Dongfeng Liuzhou Motor's commercial vehicle business[45](index=45&type=chunk)[48](index=48&type=chunk) [Cost of Sales and Gross Profit](index=21&type=section&id=2.%20%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC%E5%8F%8A%E6%AF%9B%E5%88%A9) | Indicator (RMB million) | H1 2020 | H1 2019 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | **Cost of Sales** | **42,760** | **40,653** | +**5.2%** | | **Gross Profit** | **7,816** | **7,794** | +**0.3%** | | **Overall Gross Profit Margin** | **15.5%** | **16.1%** | -**0.6 percentage points** | - The decrease in gross profit margin was mainly due to changes in sales structure[51](index=51&type=chunk) [Share of Profits from Joint Ventures/Associates](index=22&type=section&id=9.%20%E5%88%86%E4%BD%B5%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E6%BA%A2%E5%88%A9%E5%92%8C%E虧%E6%90%8D) - Share of profits from joint ventures was **3.224 billion yuan**, a significant decrease of **3.561 billion yuan** compared to **6.785 billion yuan** in the same period last year. The main reason is that under the impact of the pandemic, profits of Dongfeng Motor Co., Ltd., Dongfeng Honda Automobile Co., Ltd., and Dongfeng Honda Engine Co., Ltd. all significantly declined[58](index=58&type=chunk) - Share of profits from associates was **0.853 billion yuan**, a decrease of **1.079 billion yuan** compared to **1.932 billion yuan** in the same period last year. The main reason is that investment income from the equity investment in PSA Group decreased by **1.313 billion yuan**[59](index=59&type=chunk) [Net Profit and Key Ratios](index=23&type=section&id=12.%20%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E5%B9%B4%E5%85%A7%E6%BA%A2%E5%88%A9) | Indicator | H1 2020 | H1 2019 | Change | | :--- | :--- | :--- | :--- | | **Net Profit Attributable to Parent (RMB billion)** | **3.018** | **8.499** | -**64.5%** | | **Net Profit Margin (%)** | **6.0%** | **17.5%** | -**11.5 percentage points** | | **Return on Equity (ROE) (%)** | **4.7%** | **14.0%** | -**9.3 percentage points** | [Assets, Liabilities and Equity](index=23&type=section&id=13.%20%E7%B8%BD%E8%B3%87%E7%94%A2) | Item (RMB billion) | June 30, 2020 | December 31, 2019 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **291.966** | **272.000** | +**19.966** | | **Total Liabilities** | **156.887** | **138.032** | +**18.855** | | **Total Equity** | **135.079** | **133.968** | +**1.111** | [Liquidity and Capital Resources](index=24&type=section&id=16.%20%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E8%88%87%E4%BE%86%E6%BA%90) The Group's net cash outflow from operating activities significantly narrowed, with increased cash and cash equivalents at period end, while the debt-to-equity ratio rose, and liquidity ratios remained stable | Cash Flow Item (RMB million) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | **Net cash flow used in operating activities** | (**3,414**) | (**11,953**) | | **Net cash flow (used in)/generated from investing activities** | (**2,374**) | 664 | | **Net cash flow generated from financing activities** | **11,663** | **3,971** | | **Net increase/(decrease) in cash and cash equivalents** | **5,875** | (**7,318**) | | **Cash and cash equivalents at period end** | **32,008** | **17,657** | | Key Ratios | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Debt-to-Equity Ratio (%)** | **45.7%** | **33.8%** | | **Current Ratio (times)** | **1.36 times** | **1.36 times** | | **Quick Ratio (times)** | **1.25 times** | **1.25 times** | | **Inventory Turnover Days (days)** | **55 days** | **51 days** | [Proportional Consolidation Financial Information](index=25&type=section&id=17.%20%E6%AF%94%E4%BE%8B%E5%90%88%E4%BD%B5%E6%B3%95%E4%B8%8B%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) Under the proportional consolidation method, the Group's H1 2020 revenue and profit before tax significantly decreased, providing a comprehensive view of overall business scale and profitability including joint ventures | Indicator (RMB billion) | H1 2020 | H1 2019 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | **106.732** | **118.227** | -**9.7%** | | **Profit Before Tax** | **5.960** | **13.469** | -**55.8%** | | **Total Assets** | **363.974** | **350.129** | +**4.0%** | [Directors, Supervisors and Senior Management](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%92%8C%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1) [List of Directors, Supervisors and Senior Management](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%92%8C%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1%E5%90%8D%E5%96%AE) This section lists the Company's Board, Supervisory Committee, and Senior Management members, noting personnel changes including new appointments and retirements - **Executive Director**: Zhu Yanfeng (Chairman), Li Shaozhu (President), You Zheng (Vice President)[68](index=68&type=chunk) - **Supervisory Committee**: He Wei (Chairman)[68](index=68&type=chunk)[69](index=69&type=chunk) - **Senior Management**: Including Vice President Qiao Yang, Feng Changjun (also Company Secretary), etc[68](index=68&type=chunk)[69](index=69&type=chunk) - The report disclosed multiple personnel changes, including new Non-executive Directors, Independent Non-executive Directors, Supervisors, etc, all effective after September 25, 2020[68](index=68&type=chunk) [Unaudited Interim Condensed Consolidated Financial Statements and Notes](index=28&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E5%8F%8A%E8%A8%BB%E9%87%8B) [Review Report on Interim Financial Information](index=28&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) The Auditor, PricewaterhouseCoopers, reviewed the interim financial information, concluding it was prepared in material respects according to International Accounting Standard 34, without expressing an audit opinion - The Auditor (PricewaterhouseCoopers) issued an unmodified review conclusion report, confirming that the interim financial information was prepared in compliance with International Accounting Standard 34 requirements[74](index=74&type=chunk) [Principal Financial Statements](index=29&type=section&id=%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's core financial statements for H1 2020, showing a significant decrease in net profit attributable to parent despite increased revenue, alongside changes in assets, liabilities, and cash flows **Summary of Interim Condensed Consolidated Income Statement (RMB million)** | Item | H1 2020 (Unaudited) | H1 2019 (Unaudited) | | :--- | :--- | :--- | | **Revenue** | **50,576** | **48,447** | | **Gross Profit** | **7,816** | **7,794** | | **Profit Before Tax** | **3,547** | **10,027** | | **Profit for the Period** | **2,755** | **8,853** | | **Profit attributable to equity holders of the parent** | **3,018** | **8,499** | | **Basic Earnings Per Share (cents)** | **35.03** | **98.64** | **Summary of Interim Condensed Consolidated Statement of Financial Position (RMB million)** | Item | June 30, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Non-current Assets** | **133,416** | **129,896** | | **Current Assets** | **158,550** | **142,104** | | **Total Assets** | **291,966** | **272,000** | | **Non-current Liabilities** | **40,240** | **33,850** | | **Current Liabilities** | **116,647** | **104,182** | | **Total Liabilities** | **156,887** | **138,032** | | **Total Equity** | **135,079** | **133,968** | **Summary of Interim Condensed Consolidated Cash Flow Statement (RMB million)** | Item | H1 2020 (Unaudited) | H1 2019 (Unaudited) | | :--- | :--- | :--- | | **Net cash flow used in operating activities** | (**3,414**) | (**11,953**) | | **Net cash flow (used in)/generated from investing activities** | (**2,374**) | 664 | | **Net cash flow generated from financing activities** | **11,663** | **3,971** | | **Net increase/(decrease) in cash and cash equivalents** | **5,875** | (**7,318**) | | **Cash and cash equivalents at period end** | **32,008** | **17,657** | [Notes to the Financial Statements](index=36&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E8%A8%BB%E9%87%8B) The notes to the financial statements detail the basis of preparation, accounting policies, and key items, showing commercial vehicles as the main revenue contributor, passenger vehicles recording a loss, and disclosing interim dividends, trade receivables, borrowings, and related party transactions **Summary of Segment Results (RMB million)** | Segment | Segment Revenue | Segment Results | | :--- | :--- | :--- | | **Commercial Vehicle** | **39,314** | **1,474** | | **Passenger Vehicle** | **7,606** | (**2,927**) | | **Auto Finance** | **3,479** | **1,197** | | **Company and Others** | 305 | (**749**) | - The Board declared an interim dividend of RMB **0.10** yuan per share, totaling approximately **0.862 billion yuan**[97](index=97&type=chunk) - As of June 30, 2020, total trade receivables amounted to **10.621 billion yuan**, of which **62.5%** (**6.640 billion yuan**) had an aging within three months[100](index=100&type=chunk)[101](index=101&type=chunk) - The Group issued multiple asset-backed securities and unsecured notes during the period and in prior years for company financing, with coupon rates ranging from **1.150%** to **5.49%**[103](index=103&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) - The Group has significant related party transactions with its parent company Dongfeng Motor Group Co., Ltd. and its associates, including purchase of parts (**9.806 billion yuan**), purchase of vehicles (**1.889 billion yuan**), sale of parts (**1.967 billion yuan**), etc[109](index=109&type=chunk)[116](index=116&type=chunk) [Definitions](index=57&type=section&id=%E9%87%8B%E7%BE%A9) [Definitions of Key Terms](index=57&type=section&id=%E4%B8%BB%E8%A6%81%E8%A9%9E%E5%BD%99%E5%AE%9A%E7%BE%A9) This section defines key terms used in the report to ensure consistent reader understanding, covering core concepts such as "the Company", "the Group", "joint ventures", and "Dongfeng Motor Group Co., Ltd." - Clarifies the definitions of key entities in the report, such as "the Company" referring to Dongfeng Motor Group Company Limited, "the Group" referring to the Company and its subsidiaries and jointly controlled entities, and "Dongfeng Motor Group Co., Ltd." referring to the Company's parent company[136](index=136&type=chunk) ```

[Company Introduction and Business Overview](index=3&type=section&id=Company%20Introduction%20and%20Business%20Overview) This section provides an overview of the company's foundational information and its diverse business operations [Company Information and Stock Profile](index=3&type=section&id=Company%20Information%20and%20Stock%20Profile) Dongfeng Motor Group Co., Ltd., listed on HKEX (00489) since December 7, 2005, has a total share capital of **RMB 8.616 billion** Company Basic Information | Item | Content | | :--- | :--- | | **Company Name** | Dongfeng Motor Group Co., Ltd. | | **Listing Venue** | Hong Kong Stock Exchange Limited | | **Listing Date** | December 7, 2005 | | **Stock Code** | 00489 | | **Total Issued Share Capital** | RMB 8.616 billion | | **Auditor** | PricewaterhouseCoopers | [Business Overview](index=5&type=section&id=Business%20Overview) The company's comprehensive business covers full-range passenger and commercial vehicles, new energy vehicles, key assemblies, and automotive finance, with a global presence - The company's business covers full-range passenger and commercial vehicles, new energy vehicles, key assemblies, auto parts, automotive equipment, and automotive finance[23](index=23&type=chunk) - Commercial vehicle business is primarily conducted through joint ventures with Volvo Trucks (Sweden), Nissan, and Dongfeng Liuzhou Motor[23](index=23&type=chunk) - Passenger vehicle business is primarily conducted through joint ventures with PSA, Honda, Renault, and its own brand Dongfeng Passenger Vehicle[23](index=23&type=chunk) - Financial business is primarily conducted through Dongfeng Motor Finance Co., Ltd., Dongfeng Nissan Auto Finance Co., Ltd., and Dongfeng Peugeot Citroën Auto Finance Co., Ltd[24](index=24&type=chunk) [Chairman's Statement](index=7&type=section&id=Chairman%27s%20Statement) The Chairman's statement reviews the company's performance in a challenging market and outlines future strategies [Macro Market and Company Performance Review](index=7&type=section&id=Macro%20Market%20and%20Company%20Performance%20Review) In **2019**, despite a significant market decline, Dongfeng Motor Group outperformed the industry with sales of **2.932 million vehicles** and **RMB 101.087 billion** in revenue - In **2019**, China's auto industry production and sales decreased by **7.5%** and **8.2%** year-on-year respectively, with passenger vehicles down **9.6%** and commercial vehicles down **1.1%** The market showed structural differentiation, with Japanese and German brands gaining share, while independent brands faced the most pressure[28](index=28&type=chunk) 2019 Annual Key Performance Indicators | Indicator | 2019 | YoY Change | | :--- | :--- | :--- | | **Total Vehicle Sales** | 2.932 million vehicles | -3.9% | | **Sales Revenue** | 101.087 billion RMB | -3.3% | | **Profit Attributable to Shareholders** | 12.858 billion RMB | -0.9% | | **Market Share** | **11.4%** | Up **0.5 percentage points** | - The company's sales outperformed the market, with both passenger and commercial vehicle sales declines better than the industry average, and commercial vehicle sales growing by **6.3%** year-on-year[29](index=29&type=chunk) - Among joint venture passenger vehicles, Dongfeng Nissan and Dongfeng Honda achieved counter-trend growth; among independent brands, Dongfeng Passenger Vehicle, Dongfeng Venucia, and Dongfeng Liuzhou Motor passenger vehicle sales growth outperformed the industry[29](index=29&type=chunk) [Future Outlook and Challenges](index=9&type=section&id=Future%20Outlook%20and%20Challenges) The company anticipates significant impact from the **2020** COVID-19 pandemic but remains committed to high-quality development and accelerating **"Five Modernizations"** capabilities - Accelerate the building of **"Five Modernizations"** core capabilities, including new energy vehicle industrialization, intelligent connected vehicles, and mobility services, to drive transformation and long-term development[31](index=31&type=chunk) - The COVID-19 pandemic in early **2020** significantly impacted production units in Hubei, and the company will strive to meet annual operating targets while controlling the epidemic[31](index=31&type=chunk) [Directors' Report](index=10&type=section&id=Directors%27%20Report) The Directors' Report provides a comprehensive overview of the company's operations, financial performance, and strategic initiatives [Business Overview](index=10&type=section&id=Business%20Overview) In **2019**, Dongfeng Motor Group sold **2.932 million vehicles**, with commercial vehicles contributing **68.2%** of revenue, supported by extensive sales networks and significant production capacity [Sales Volume, Market Share, and Revenue](index=10&type=section&id=Sales%20Volume%2C%20Market%20Share%2C%20and%20Revenue) In **2019**, the Group's total vehicle sales reached **2.932 million units**, achieving a market share of approximately **11.4%**, with commercial vehicles as the largest revenue contributor 2019 Sales Volume and Market Share | Vehicle Category | Sales Volume (vehicles) | Market Share (%) | | :--- | :--- | :--- | | **Commercial Vehicles** | **468,333** | **10.8** | | Trucks | **437,299** | **11.4** | | Buses | **31,034** | **6.5** | | **Passenger Vehicles** | **2,463,620** | **11.5** | | Basic Passenger Vehicles | **1,263,979** | **11.3** | | MPV | **117,657** | **8.5** | | SUV | **1,081,984** | **11.6** | | **Total** | **2,931,953** | **11.4** | 2019 Sales Revenue Composition | Business Segment | Sales Revenue (RMB million) | Proportion (%) | | :--- | :--- | :--- | | Passenger Vehicles | **26,738** | **26.4** | | Commercial Vehicles | **68,893** | **68.2** | | Automotive Finance | **5,387** | **5.3** | | Company and Others | **565** | **0.6** | | **Total** | **101,087** | **100.0** | [Sales Network, Production Capacity, and Capital Expenditure](index=12&type=section&id=Sales%20Network%2C%20Production%20Capacity%2C%20and%20Capital%20Expenditure) As of **2019**, the Group operated **14** sales networks with an annual production capacity of **3.394 million vehicles**, planning significant capital expenditure for future innovation - The Group sells vehicles through **14** sales and service networks, comprising **5** major networks for commercial vehicles and **9** for passenger vehicles[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) Production Capacity as of End 2019 | Category | Vehicle Production Capacity (ten thousand vehicles) | Engine Production Capacity (ten thousand units) | | :--- | :--- | :--- | | Commercial Vehicles | **57.9** | **35.4** | | Passenger Vehicles | **281.5** | **343.5** | | **Total** | **339.4** | **378.9** | Capital Expenditure Plan | Year | Investment Amount (RMB billion) | | :--- | :--- | | 2019 (Actual) | **15.578** | | 2020 (Estimated) | **16.172** | | 2021 (Estimated) | **20.857** | [Business Outlook](index=16&type=section&id=Business%20Outlook) The company anticipates a **10%** decline in the **2020** Chinese auto market due to the pandemic, focusing on strategic initiatives for high-quality development - China's auto market is expected to decline by approximately **10%** in **2020**, with passenger vehicles down **10%** and commercial vehicles remaining flat year-on-year The market is projected to grow by a modest **1.2%** over the next five years[48](index=48&type=chunk) - Future strategy focuses on four key areas: - **Independent Business**: Building leading advantages in commercial vehicles and promoting the development of independent passenger vehicles - **New Business Layout**: Advancing new energy and intelligent connected vehicles, enhancing **"Five Modernizations"** capabilities - **Joint Venture Business**: Consolidating Dongfeng Nissan and Dongfeng Honda, addressing development challenges for Dongfeng Peugeot Citroën Automobile Company Ltd. and Dongfeng Renault - **Management Improvement**: Accelerating the construction of a digital Dongfeng[49](index=49&type=chunk) [Significant Matters](index=17&type=section&id=Significant%20Matters) The Board recommends a **2019** annual dividend of **RMB 0.25** per share, with stable share capital and no major litigation during the period - The Board recommends a **2019** annual dividend of **RMB 0.25** per share[50](index=50&type=chunk) - In **2019**, the total dividends declared and distributed to the company by its joint ventures amounted to approximately **RMB 13.28 billion**[52](index=52&type=chunk) - As of the end of **2019**, the company's total share capital was **8,616,120,000 shares**, with domestic shares accounting for **66.86%** and H shares for **33.14%**, showing no change in share capital structure[57](index=57&type=chunk) - The controlling shareholder, Dongfeng Motor Corporation, holds all domestic shares, accounting for **66.86%** of the total share capital[61](index=61&type=chunk) [Connected Transactions](index=25&type=section&id=Connected%20Transactions) The Group engaged in various ongoing connected transactions with its controlling shareholder and joint venture partners, covering sales, procurement, services, and finance, all conducted on normal commercial terms 2019 Major Continuing Connected Transactions (with Dongfeng Motor Corporation) | Transaction Type | Annual Cap (RMB billion) | Actual Amount (RMB billion) | | :--- | :--- | :--- | | Sales of Auto Parts | **5.00** | **0.11** | | Procurement of Auto Parts | **9.00** | **2.57** | | Procurement of Logistics Services | **25.00** | **19.63** | | Auto Inspection Services | **9.00** | **3.94** | | Land Lease | **2.60** | **1.37** | | Production of Pure Electric Vehicles | **8.00** | **3.91** | - The total amount for procurement of auto parts and production equipment by joint ventures from their foreign joint venture partners was **RMB 63.33 billion**[113](index=113&type=chunk) - The total consideration paid by joint ventures to foreign joint venture partners for technology licenses and technical support was **RMB 5.758 billion**[117](index=117&type=chunk) [Management Discussion and Analysis](index=42&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational environment, financial performance, and strategic initiatives [Operating Environment and Analysis](index=42&type=section&id=Operating%20Environment%20and%20Analysis) In **2019**, despite a challenging market with an **8.2%** decline, the company outperformed the industry by **4.3 percentage points**, with commercial vehicle sales growing by **6.3%** - In **2019**, China's auto market sales declined by **8.2%** year-on-year, with passenger vehicles down **9.6%** and commercial vehicles down **1.1%**[118](index=118&type=chunk) 2019 Company Sales Performance vs. Industry | Category | Company Sales YoY | Industry Sales YoY | Outperformance vs. Industry | | :--- | :--- | :--- | :--- | | **Overall** | -3.9% | -8.2% | **4.3 percentage points** | | **Passenger Vehicles** | -5.7% | -9.6% | **3.9 percentage points** | | **Commercial Vehicles** | +6.3% | -1.1% | **7.4 percentage points** | [Financial Analysis](index=44&type=section&id=Financial%20Analysis) In **2019**, total revenue was **RMB 101.087 billion**, a **3.3%** decrease, primarily due to a **33.6%** drop in passenger vehicle revenue, while commercial vehicle and auto finance segments grew 2019 Segment Revenue Change | Business Segment | 2019 Revenue (RMB billion) | 2018 Revenue (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Passenger Vehicles | **26.738** | **40.239** | -33.6% | | Commercial Vehicles | **68.893** | **60.136** | +14.6% | | Automotive Finance | **5.387** | **3.876** | +39.0% | | **Total** | **101.087** | **104.543** | -3.3% | - Share of profits from joint ventures decreased by **RMB 647 million** to **RMB 11.633 billion** year-on-year, mainly due to lower profits from Dongfeng Motor Co., Ltd. and increased losses from Dongfeng Peugeot Citroën Automobile Company Ltd.; share of profits from associates increased by **RMB 731 million** to **RMB 3.913 billion** year-on-year, primarily benefiting from increased investment income from PSA Group and Dongfeng Nissan Auto Finance[134](index=134&type=chunk)[135](index=135&type=chunk) Key Financial Ratios as of End 2019 | Indicator | End of 2019 | End of 2018 | Change | | :--- | :--- | :--- | :--- | | Equity Ratio | **33.8%** | **22.1%** | Up **11.7 percentage points** | | Current Ratio | **1.36 times** | **1.36 times** | Flat | | Quick Ratio | **1.25 times** | **1.24 times** | Increase **0.01 times** | | Inventory Turnover Days | **51 days** | **43 days** | Increase **8 days** | - As of the end of **2019**, total assets increased to **RMB 272 billion**, and total liabilities increased to **RMB 138.032 billion**, mainly due to an increase in interest-bearing borrowings, payables, and bills payable[138](index=138&type=chunk)[139](index=139&type=chunk) [Directors, Supervisors, and Senior Management](index=51&type=section&id=Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section details the company's leadership structure, including biographies of its directors, supervisors, and senior management [Biographies of Directors, Supervisors, and Senior Management](index=51&type=section&id=Biographies%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section details the personal resumes, educational backgrounds, and work experiences of the company's board, supervisory board, and senior management members, noting changes in **2019** - Mr. Zhu Yanfeng serves as Executive Director, Chairman, and Party Secretary[144](index=144&type=chunk) - Mr. Li Shaozhu serves as Executive Director and President[145](index=145&type=chunk) - On November **29**, **2019**, Mr. You Zheng was appointed Executive Director, Mr. Cheng Daoran was appointed Non-executive Director, and Mr. He Wei was appointed Chairman of the Supervisory Committee[146](index=146&type=chunk)[147](index=147&type=chunk)[151](index=151&type=chunk) [Supervisory Committee Report](index=58&type=section&id=Supervisory%20Committee%20Report) The Supervisory Committee's report confirms the company's compliant operations, valid decision-making, and fair financial reporting, with no detected harm to shareholder interests [Supervisory Committee Work and Independent Opinions](index=58&type=section&id=Supervisory%20Committee%20Work%20and%20Independent%20Opinions) In **2019**, the Supervisory Committee held **four** meetings, affirming the board and management's lawful operations, valid decisions, and accurate financial reporting, with fair connected transactions - The Supervisory Committee acknowledged the company's lawful operations, believing the Board and senior management fulfilled their duties faithfully and that decision-making procedures were legal and effective[161](index=161&type=chunk)[162](index=162&type=chunk) - The Supervisory Committee reviewed the annual and interim financial reports, deeming them to truly and objectively reflect the company's financial position, and found the auditor's report objective and fair[163](index=163&type=chunk) - The Supervisory Committee concluded that the company's connected transactions were conducted at fair market prices and did not harm the interests of the company or its shareholders[163](index=163&type=chunk) [Corporate Governance Report](index=61&type=section&id=Corporate%20Governance%20Report) The Corporate Governance Report details the company's commitment to high governance standards, its structured board and committee operations, and robust risk management [Corporate Governance Structure and Operations](index=61&type=section&id=Corporate%20Governance%20Structure%20and%20Operations) The company maintains high corporate governance standards, with a clear structure involving the Shareholders' Meeting, Board of Directors, and Supervisory Committee, ensuring compliant operations and risk control - The company has a clear governance structure, with the Shareholders' Meeting overseeing the Board of Directors and Supervisory Committee, and the Board having an Audit and Risk Management Committee, Nomination Committee, and Remuneration Committee[167](index=167&type=chunk) - During the reporting period, **two** Shareholders' Meetings were held, and all proposed resolutions were passed[177](index=177&type=chunk)[184](index=184&type=chunk) - The Board of Directors consists of **seven** directors, including **three** independent non-executive directors, accounting for over one-third, which complies with listing rules[189](index=189&type=chunk)[192](index=192&type=chunk) - The company has established a comprehensive risk management and internal control system, with the Board regularly reviewing its effectiveness, and no significant risk events occurred during the reporting period[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) [Independent Auditor's Report](index=84&type=section&id=Independent%20Auditor%27s%20Report) The Independent Auditor's Report provides an unqualified opinion on the financial statements, highlighting key audit matters related to provisions and asset impairment [Audit Opinion and Key Audit Matters](index=84&type=section&id=Audit%20Opinion%20and%20Key%20Audit%20Matters) PricewaterhouseCoopers issued an unqualified audit opinion on the **2019** consolidated financial statements, identifying **Warranty provisions** and **Assessment of impairment of property, plant and equipment** as key audit matters - The auditor concluded that the consolidated financial statements truly and fairly reflect the Group's financial position in accordance with International Financial Reporting Standards, issuing an unqualified opinion[232](index=232&type=chunk) - Key audit matters include: - **Warranty provisions**: Due to the significant amount and the estimation involving material judgments and assumptions - **Assessment of impairment of property, plant and equipment**: Due to impairment indicators for certain assets and the assessment of recoverable amounts involving significant management judgment[233](index=233&type=chunk) [Consolidated Financial Statements](index=93&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's comprehensive financial statements, including income statements, balance sheets, and cash flow statements [Financial Performance Summary](index=94&type=section&id=Financial%20Performance%20Summary) In **2019**, the Group's revenue was **RMB 101.087 billion**, with a slight increase in gross profit and a **0.9%** decrease in profit attributable to equity holders Consolidated Income Statement Summary (RMB million) | Indicator | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | **101,087** | **104,543** | -3.3% | | Gross Profit | **13,491** | **13,415** | +0.6% | | Profit Before Tax | **14,605** | **14,239** | +2.6% | | Profit for the Year | **12,846** | **12,578** | +2.1% | | Profit Attributable to Equity Holders of the Parent | **12,858** | **12,979** | -0.9% | | Basic Earnings Per Share (cents) | **149.23** | **150.64** | -0.9% | Consolidated Statement of Financial Position Summary (RMB million) | Indicator | December 31, 2019 | December 31, 2018 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **272,000** | **226,517** | +20.1% | | Non-current Assets | **129,896** | **111,294** | +16.7% | | Current Assets | **142,104** | **115,223** | +23.3% | | **Total Liabilities** | **138,032** | **101,592** | +35.9% | | Non-current Liabilities | **33,850** | **17,135** | +97.6% | | Current Liabilities | **104,182** | **84,457** | +23.4% | | **Total Equity** | **133,968** | **124,925** | +7.2% | | Equity Attributable to Equity Holders of the Parent | **127,781** | **118,356** | +8.0% | Consolidated Cash Flow Statement Summary (RMB million) | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Flows Used in Operating Activities | (**11,555**) | (**22,249**) | | Net Cash Flows From Investing Activities | **1,472** | **12,680** | | Net Cash Flows From Financing Activities | **11,241** | **2,903** | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | **1,158** | (**6,666**) | [Summary of Notes to Financial Statements](index=105&type=section&id=Summary%20of%20Notes%20to%20Financial%20Statements) The notes detail accounting policies, key estimates, and significant disclosures, including the adoption of IFRS **16** Leases, investments in joint ventures and associates, and financial risk management - IFRS **16** Leases was first adopted in **2019**, with retrospective adjustments to the opening balance sheet, recognizing **RMB 3.839 billion** in right-of-use assets and **RMB 2.606 billion** in lease liabilities[276](index=276&type=chunk)[277](index=277&type=chunk) - Key accounting estimates and judgments primarily involve **Warranty provisions**, recognition of deferred tax assets, income tax, impairment assessment of property, plant and equipment, and impairment of financial assets[341](index=341&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk) - As of the end of **2019**, the carrying value of investments in joint ventures was **RMB 40.427 billion**, primarily including Dongfeng Motor Co., Ltd., Dongfeng Peugeot Citroën Automobile Company Ltd., and Dongfeng Honda[410](index=410&type=chunk)[412](index=412&type=chunk) - As of the end of **2019**, the carrying value of investments in associates was **RMB 21.713 billion**, primarily including Dongfeng Nissan Auto Finance and PSA Group[420](index=420&type=chunk)[421](index=421&type=chunk) [Five-Year Financial Summary](index=221&type=section&id=Five-Year%20Financial%20Summary) This section reviews five years of financial data, showing consistent growth in total assets and equity attributable to the parent, with revenue fluctuating and net profit remaining stable Five-Year Performance Summary (RMB million) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | **101,087** | **104,543** | **125,980** | **122,535** | **126,566** | | Profit Before Tax | **14,605** | **14,239** | **15,775** | **15,731** | **14,065** | | Profit Attributable to Equity Holders of the Parent | **12,858** | **12,979** | **14,061** | **13,345** | **11,550** | Five-Year Balance Sheet Summary (RMB million) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | **272,000** | **226,517** | **213,908** | **185,079** | **160,786** | | Total Liabilities | (**138,032**) | (**101,592**) | (**98,584**) | (**81,441**) | (**69,302**) | | Equity Attributable to Parent Company | **127,781** | **118,356** | **108,515** | **96,726** | **84,650** |

[Company Profile and Business Overview](index=4&type=section&id=Company%20Profile%20and%20Business%20Overview) Dongfeng Motor Group, a leading Chinese automaker listed on HKEX, operates globally across passenger, commercial, and new energy vehicles, components, and financial services - The company's main business covers a full range of passenger and commercial vehicles, new energy vehicles, key assemblies, auto parts, auto equipment, and related services[9](index=9&type=chunk) - As of the end of 2018, the company had 23 major subsidiaries, jointly controlled entities, and other direct equity interest companies, primarily divided into four segments: commercial vehicles, passenger vehicles, new energy vehicles, and financial services[11](index=11&type=chunk) - The company was listed on the Hong Kong Stock Exchange on December 7, 2005, with stock code 00489[7](index=7&type=chunk) [Chairman's Statement](index=8&type=section&id=Chairman%27s%20Statement) Chairman Zhu Yanfeng reported 2018 sales of 3.05 million vehicles and RMB 104.54 billion revenue amid market decline, emphasizing strategic transformation and high-quality development 2018 Key Performance Indicators | Indicator | Value | YoY Change | | :--- | :--- | :--- | | **Vehicle Sales** | Approx. 3.0522 million units | - | | **Sales Revenue** | Approx. RMB 104.543 billion | -17.0% | | **Profit Attributable to Shareholders** | Approx. RMB 12.979 billion | -7.7% | - In 2018, China's auto market experienced its first negative growth in 28 years, with total sales decreasing by **2.8%** year-on-year, passenger vehicle sales down **4.1%**, commercial vehicle sales up **5.1%**, and new energy vehicle sales up **61.7%** year-on-year[15](index=15&type=chunk) - The company's 2018 operations exhibited four key characteristics: healthy and stable operations, continuous building of independent brand core capabilities, active promotion of "Five Modernizations" to foster an innovation ecosystem, and adherence to proactive leadership to promote high-level openness[16](index=16&type=chunk) - Facing future challenges, the company will focus on five areas: promoting breakthrough development of independent business, enhancing "Five Modernizations" integrated innovation capabilities, promoting healthy and sustainable development of joint venture business, accelerating the building of a digital Dongfeng, and establishing a compliant operation system[18](index=18&type=chunk) [Board of Directors' Report](index=11&type=section&id=Board%20of%20Directors%27%20Report) [Business Review](index=11&type=section&id=Business%20Review) In 2018, the Group achieved 3.05 million vehicle sales and RMB 104.54 billion revenue, maintaining market share and investing in strategic growth areas [Key Business Operations](index=11&type=section&id=Key%20Business%20Operations) Dongfeng Motor Group reported 3.05 million vehicle sales and RMB 104.54 billion revenue in 2018, with strong market positions and strategic investments 2018 Sales and Market Share | Vehicle Category | Sales (units) | Market Share (%) | | :--- | :--- | :--- | | Commercial Vehicles | 440,565 | 10.1 | | Passenger Vehicles | 2,611,607 | 11.0 | | **Total** | **3,052,172** | **10.9** | 2018 Key Segment Domestic Rankings | Segment | Sales (units) | Domestic Market Ranking | | :--- | :--- | :--- | | Heavy-duty Trucks | 217,027 | 2 | | Medium-duty Trucks | 29,960 | 1 | | Basic Passenger Vehicles | 1,278,741 | 3 | | MPV | 170,665 | 2 | | SUV | 1,162,201 | 2 | 2018 Sales Revenue Composition | Business Segment | Sales Revenue (RMB million) | Proportion (%) | | :--- | :--- | :--- | | Passenger Vehicles | 40,239 | 38.5 | | Commercial Vehicles | 60,136 | 57.5 | | Auto Finance | 3,876 | 3.7 | | **Total** | **104,543** | **100.0** | - As of the end of 2018, the Group's total vehicle production capacity was approximately **3.595 million units**, and engine capacity was approximately **3.37 million units**[27](index=27&type=chunk) - Full-year fixed asset investment in 2018 was approximately **RMB 14.006 billion**, primarily focused on new product introduction, capacity optimization, and strategic projects in new energy and intelligent connected vehicles[33](index=33&type=chunk) [Business Outlook](index=17&type=section&id=Business%20Outlook) The company anticipates a stable Chinese auto market in 2019, focusing on strategic initiatives for independent business, new energy, joint ventures, and digitalization - China's auto market is expected to remain flat in 2019, with an average annual growth of approximately **2–3%** over the next five years[35](index=35&type=chunk) - The company's "three leads, one first" strategic deployment focuses on four key business and development directions: independent business, new energy and "Five Modernizations" integration, joint venture business, and digital transformation[35](index=35&type=chunk) [Significant Matters](index=18&type=section&id=Significant%20Matters) The Board proposed a RMB 0.25 per share dividend for 2018, with joint ventures contributing RMB 11.06 billion in dividends, and the company maintaining its shareholding structure - The Board recommends a final dividend of **RMB 0.25 per share** for the 2018 performance[37](index=37&type=chunk) - In 2018, the total dividends declared and distributed to the company by its joint ventures amounted to approximately **RMB 11.063 billion**[39](index=39&type=chunk) - As of the end of 2018, the company's total share capital was **8,616,120,000 shares**, with domestic shares accounting for **66.86%** (held by Dongfeng Motor Corporation) and H shares for **33.14%**[45](index=45&type=chunk)[48](index=48&type=chunk) - As of the end of 2018, the company had approximately **139,602 full-time employees**, with manufacturing workers comprising the largest proportion at **65.6%**[57](index=57&type=chunk)[58](index=58&type=chunk) [Connected Transactions](index=26&type=section&id=Connected%20Transactions) The report details ongoing connected transactions with the controlling shareholder and joint venture partners, covering various services, sales, and significant procurement of parts and technology - The Group has multiple ongoing connected transactions with its controlling shareholder Dongfeng Motor Corporation, including trademark usage, social security funds, auxiliary services, vehicle sales, parts procurement and sales, logistics, inspection, and financial services[65](index=65&type=chunk) - As of the end of 2018, the total consideration for the procurement of auto parts and production equipment by the Group's joint ventures from their joint venture partners was **RMB 57.454 billion**[112](index=112&type=chunk) - As of the end of 2018, the total consideration paid by the Group's joint ventures to their joint venture partners for technology licensing and support was **RMB 6.537 billion**[118](index=118&type=chunk) [Management Discussion and Analysis](index=44&type=section&id=Management%20Discussion%20and%20Analysis) In 2018, the Group's revenue declined 17.0% to RMB 104.54 billion amid market downturn, with profit attributable to shareholders down 7.7% and operating cash flow turning negative 2018 Segment Revenue (RMB million) | Business Segment | 2018 Sales Revenue | 2017 Sales Revenue (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Passenger Vehicles | 40,239 | 61,732 | -34.8% | | Commercial Vehicles | 60,136 | 60,790 | -1.1% | | Auto Finance | 3,876 | 3,047 | +27.2% | | **Total** | **104,543** | **125,980** | **-17.0%** | - In 2018, profit attributable to shareholders was approximately **RMB 12.979 billion**, a **7.7%** decrease year-on-year, with the net profit margin at **12.4%**, up from 11.2% in the prior year[137](index=137&type=chunk) - Share of profits from joint ventures decreased by **RMB 1.294 billion** year-on-year, primarily due to increased investment losses from Shenlong Automobile's **32.9%** sales decline and reduced profits from Dongfeng Honda due to the "oil gate" incident[133](index=133&type=chunk) - Share of profits from associates increased by **RMB 975 million** year-on-year, mainly due to a **RMB 1.099 billion** increase in gains from investment in PSA Group[134](index=134&type=chunk) 2018 Net Cash Flow (RMB million) | Activity Type | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Operating Activities | (22,249) | 3,646 | | Investing Activities | 12,680 | 1,708 | | Financing Activities | 2,903 | (3,495) | - As of the end of 2018, the Group's gearing ratio (total borrowings/shareholders' equity) was **22.1%**, an increase from 15.5% at the end of 2017[144](index=144&type=chunk) [Directors, Supervisors, and Senior Management](index=51&type=section&id=Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section provides detailed biographies of the company's Board, Supervisory Committee, and senior management, highlighting their extensive industry experience and diverse backgrounds - Chairman Mr. Zhu Yanfeng, 57 years old, possesses over **30 years** of experience in the automotive industry and management, having previously served as General Manager of FAW Group and Deputy Secretary of Jilin Provincial Party Committee[146](index=146&type=chunk) - President Mr. Li Shaozhu, 58 years old, also has over **30 years** of automotive industry experience, having worked at Dongfeng Motor Corporation since 1983 in various senior management positions[147](index=147&type=chunk) - The company has four independent non-executive directors: Mr. Ma Zhigeng, Mr. Zhang Xiaotie, Mr. Cao Xinghe, and Mr. Chen Yunfei, who possess extensive experience in mechanical manufacturing, economic management, law, and investment[149](index=149&type=chunk)[150](index=150&type=chunk) [Supervisory Committee Report](index=58&type=section&id=Supervisory%20Committee%20Report) The Supervisory Committee confirmed its effective oversight in 2018, ensuring compliant operations, accurate financial reporting, fair connected transactions, and overall healthy company development - The Supervisory Committee believes that the Board of Directors' work in 2018 strictly adhered to laws and regulations, with scientific and democratic operating decisions and gradually improving internal control systems[161](index=161&type=chunk) - The Supervisory Committee reviewed the annual and interim financial reports, deeming them to truly and objectively reflect the company's operating results and financial position, and the auditor's unqualified opinion report to be objective and fair[162](index=162&type=chunk) - The Supervisory Committee confirmed that the company's transactions with related parties were conducted at fair market prices, with no instances found of harm to the company or shareholder interests[162](index=162&type=chunk) [Corporate Governance Report](index=60&type=section&id=Corporate%20Governance%20Report) This report details the company's 2018 corporate governance practices, highlighting its structure, compliance with the code, and commitment to high standards in risk management and internal control - The company's governance structure has the General Meeting as the highest authority, with the Board of Directors and Supervisory Committee below it; the Board has an Audit and Risk Management Committee, Nomination Committee, and Remuneration Committee[165](index=165&type=chunk) - The Board of Directors comprises **six directors**, including two executive directors and four independent non-executive directors, with independent non-executive directors accounting for over one-third, meeting listing rule requirements[182](index=182&type=chunk)[185](index=185&type=chunk) - The company's Board of Directors regularly reviews the effectiveness of the Group's risk management and internal control, covering financial, operational, and compliance controls, with no material deficiencies found in the 2018 internal control evaluation[218](index=218&type=chunk)[219](index=219&type=chunk) - During the reporting period, the company engaged PricewaterhouseCoopers and PwC Zhongtian as overseas and domestic auditors, respectively, with total remuneration of **RMB 12.7 million**[217](index=217&type=chunk) [Independent Auditor's Report](index=83&type=section&id=Independent%20Auditor%27s%20Report) PricewaterhouseCoopers issued an unqualified opinion on the 2018 consolidated financial statements, highlighting warranty provisions and asset impairment as key audit matters - The auditor believes the consolidated financial statements truly and fairly reflect the Group's consolidated financial position as of December 31, 2018, and its consolidated financial performance and consolidated cash flows for the year then ended, in accordance with **International Financial Reporting Standards**[225](index=225&type=chunk)[226](index=226&type=chunk) - The report identified two key audit matters: **Warranty provisions**, due to their material amount (year-end balance of **RMB 1.74 billion**) and significant judgment involved in estimation; and **Assessment of impairment of property, plant and equipment**, due to the significant amount of impairment provision (**RMB 316 million** recognized this year) and the significant impact of recoverable amount assessment[228](index=228&type=chunk)[229](index=229&type=chunk)[233](index=233&type=chunk) [Consolidated Financial Statements](index=92&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's audited consolidated financial statements for 2018, showing RMB 104.54 billion revenue, RMB 12.58 billion profit, and RMB 226.52 billion total assets [Consolidated Statement of Profit or Loss](index=92&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In 2018, the Group's revenue decreased 17.0% to RMB 104.54 billion, with profit attributable to equity holders of the parent declining 7.7% to RMB 12.98 billion 2018 Consolidated Statement of Profit or Loss Summary (RMB million) | Indicator | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Revenue | 104,543 | 125,980 | | Gross Profit | 13,415 | 16,264 | | Profit Before Tax | 14,239 | 15,775 | | Profit for the Year | 12,578 | 14,627 | | Profit Attributable to Equity Holders of the Parent | 12,979 | 14,061 | [Consolidated Statement of Financial Position](index=94&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2018, total assets increased 5.9% to RMB 226.52 billion, with total equity reaching RMB 124.93 billion 2018 Consolidated Statement of Financial Position Summary (RMB million) | Indicator | December 31, 2018 | December 31, 2017 (Restated) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 111,294 | 97,759 | | Total Current Assets | 115,223 | 116,149 | | **Total Assets** | **226,517** | **213,908** | | **Equity and Liabilities** | | | | Total Equity | 124,925 | 115,324 | | Total Liabilities | 101,592 | 98,584 | | **Total Equity and Liabilities** | **226,517** | **213,908** | [Consolidated Statement of Cash Flows](index=98&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2018, operating cash flow turned negative with a net outflow of RMB 22.25 billion, while investing activities generated RMB 12.68 billion, leading to a net decrease in cash 2018 Consolidated Statement of Cash Flows Summary (RMB million) | Indicator | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | (22,249) | 3,646 | | Net Cash Flow from Investing Activities | 12,680 | 1,708 | | Net Cash Flow from Financing Activities | 2,903 | (3,495) | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | **(6,666)** | **1,859** | [Notes to the Financial Statements](index=101&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and supplementary information to the financial statements, including accounting policies, key estimates, and the impact of new IFRS standards - The Group first adopted **IFRS 9 (Financial Instruments)** and **IFRS 15 (Revenue from Contracts with Customers)** from January 1, 2018, applying the modified retrospective approach, adjusting the opening balance sheet without restating comparative period data[261](index=261&type=chunk)[262](index=262&type=chunk) - The notes provide detailed explanations of key accounting estimates and judgments, primarily concerning **warranty provisions**, **deferred tax assets**, **income tax**, **impairment assessment of property, plant and equipment**, and **impairment of financial assets**[344](index=344&type=chunk) - Segment information shows that commercial vehicle business is the Group's primary revenue source, accounting for **57.5%** of total revenue, while passenger vehicle business accounts for **38.5%**[350](index=350&type=chunk)[352](index=352&type=chunk) - The notes detail significant related party transactions with controlling shareholder Dongfeng Motor Corporation and various joint ventures and associates, covering procurement, sales, financial services, and more[482](index=482&type=chunk) [Five-Year Financial Summary](index=218&type=section&id=Five-Year%20Financial%20Summary) This section presents key financial data from 2014 to 2018, showing revenue and profit fluctuations but consistent growth in total assets and equity Five-Year Financial Performance Summary (RMB million) | Year | 2018 | 2017 (Restated) | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 104,543 | 125,980 | 122,535 | 126,566 | 83,114 | | Profit Attributable to Equity Holders of the Parent | 12,979 | 14,061 | 13,345 | 11,550 | 12,797 | Five-Year Financial Position Summary (RMB million) | Year | 2018 | 2017 (Restated) | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 226,517 | 213,908 | 185,079 | 160,786 | 146,977 | | Total Liabilities | 101,592 | 98,584 | 81,441 | 69,302 | 71,541 | [Notice of Annual General Meeting and Related Information](index=220&type=section&id=Notice%20of%20Annual%20General%20Meeting%20and%20Related%20Information) This section provides the formal notice for the 2018 Annual General Meeting, detailing the agenda including financial report approval, dividend proposal, and authorization for future financing and share issuance - The company's 2018 Annual General Meeting is scheduled for **June 14, 2019**[559](index=559&type=chunk) - Ordinary resolutions to be considered include approving the 2018 annual report, the profit distribution plan (**RMB 0.25 per share dividend**), and the re-appointment of auditors[560](index=560&type=chunk) - Special resolutions to be considered include approving the 2019 bond financing application and granting the Board a general mandate to issue new shares not exceeding **20%** of existing domestic and H shares respectively[561](index=561&type=chunk) [Definitions](index=232&type=section&id=Definitions) This chapter defines specific terms and abbreviations used throughout the annual report to ensure consistent understanding of key entities and regulatory documents - Key entities defined in the report include "Dongfeng Motor Corporation" referring to the controlling shareholder, and "the Group" referring to the Company and its subsidiaries, joint ventures, etc[582](index=582&type=chunk)