DONGFENG GROUP(HK:00489)2020-09-29 04:10markdown [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)