北京汽车(01958) - 2021 - 中期财报

Overview BAIC Motor Corporation Limited announced its unaudited interim condensed financial information for H1 2021, reporting 557,000 vehicle sales, RMB 90.38 billion in consolidated revenue, RMB 2.76 billion profit attributable to equity holders, and RMB 0.34 earnings per share, with no interim dividend recommended - In H1 2021, China's passenger vehicle wholesale sales reached 10.007 million units, a 27.0% year-on-year increase[7] H1 2021 Group Key Performance | Metric | Amount/Quantity | | :--- | :--- | | Vehicle Sales | 557,000 units | | Consolidated Revenue | RMB 90.38 billion | | Profit attributable to equity holders of the Company | RMB 2.76 billion | | Earnings per share | RMB 0.34 | - The Board did not propose an interim dividend for the reporting period[7] Company Information This section provides basic information including the company's legal name, registered and head office addresses, Hong Kong principal place of business, authorized representatives, company secretary, legal advisors, auditors, principal bankers, H-share stock code, and investor contact details - The company's legal name is Beijing Automotive Group Co., Ltd., with the English name BAIC Motor Corporation Limited[9] - The H-share stock code is 1958[9] - The auditors are PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP (Special General Partnership)[9] Financial and Business Data Overview This section summarizes the Group's H1 2021 key financial and performance highlights, showing revenue growth of 16.1%, profit for the period up 58.0%, and profit attributable to equity holders surging 163.5%, with total assets slightly down, total liabilities significantly reduced, and equity attributable to equity holders increased, driven by strong vehicle sales from Beijing Benz and Fujian Benz Key Financial Highlights In H1 2021, Group revenue grew 16.1% to RMB 90.375 billion, profit for the period increased 58.0% to RMB 9.183 billion, and profit attributable to equity holders surged 163.5% to RMB 2.758 billion, while total assets slightly decreased, total liabilities significantly reduced, and equity attributable to equity holders increased H1 2021 Summary of Consolidated Financial Information (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Revenue | 90,375 | 77,854 | | Cost of sales | (69,050) | (59,824) | | Gross profit | 21,325 | 18,030 | | Profit before income tax | 13,579 | 9,088 | | Profit for the period | 9,183 | 5,811 | | Attributable to equity holders of the Company | 2,758 | 1,047 | | Attributable to non-controlling interests | 6,425 | 4,764 | Summary of Statement of Financial Position (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Total assets | 190,467 | 193,703 | | Total liabilities | 109,058 | 120,109 | | Equity attributable to equity holders of the Company | 52,532 | 51,088 | Key Performance Highlights In H1 2021, the Group's total wholesale vehicle sales reached 557,000 units, with Beijing Benz selling 316,000 units, Beijing Hyundai 194,000 units, Fujian Benz 19,000 units, and Beijing Brand 28,000 units H1 2021 Wholesale Sales by Passenger Vehicle Business (Ten Thousand Units) | Business | H1 2021 Cumulative Sales | H1 2020 Cumulative Sales | | :--- | :--- | :--- | | Beijing Brand | 28 | 35 | | Fuel Vehicles | 21 | 24 | | New Energy Vehicles | 7 | 11 | | Beijing Benz | 316 | 270 | | Beijing Hyundai | 194 | 184 | | Fujian Benz | 19 | 14 | Company Profile and Business Overview This section details BAIC Motor as a leading Chinese passenger vehicle enterprise, covering its brand portfolio, main businesses, H1 2021 industry developments, Group operations, and H2 outlook, with businesses spanning R&D, manufacturing, sales and after-sales service, core component production, auto finance, and international operations Overall Situation BAIC Motor is a leading Chinese passenger vehicle enterprise with a diverse brand portfolio including joint venture luxury, joint venture mid-to-high-end, and own-brand passenger vehicles, listed on the Main Board of the Stock Exchange on December 19, 2014 - BAIC Motor is a leading Chinese passenger vehicle enterprise with a broad brand portfolio covering joint venture luxury, joint venture mid-to-high-end, and own-brand passenger vehicles[17] - The company was listed on the Main Board of the Stock Exchange on December 19, 2014, with H-share stock code 1958[17] Main Business Operations The Group's main businesses include passenger vehicle R&D, manufacturing, sales and after-sales service, core component production, auto finance, international business, and other related operations, with passenger vehicle business conducted through four segments: Beijing Brand, Beijing Benz, Beijing Hyundai, and Fujian Benz Passenger Vehicle Business Passenger vehicle business is conducted through four segments: Beijing Brand (own-brand, covering fuel, hybrid, pure electric), Beijing Benz (producing and selling Mercedes-Benz passenger vehicles, with three major vehicle platforms and engine/power battery factories), Beijing Hyundai (joint venture, producing and selling Hyundai passenger vehicles, with three production bases), and Fujian Benz (joint venture, producing and selling Mercedes-Benz multi-purpose passenger and light commercial vehicles) - Beijing Brand is an own-brand, with products covering fuel and new energy sedans and SUVs, and has released power and intelligent platform technology roadmaps covering fuel, hybrid, and pure electric drives[17] - Beijing Benz, a 51.0% owned subsidiary, produces and sells Mercedes-Benz passenger vehicles, becoming Daimler's only joint venture globally with front-wheel drive, rear-wheel drive, and electric vehicle platforms, along with engine and power battery factories[21] - Beijing Hyundai, a 50.0% owned joint venture, produces and sells Hyundai brand passenger vehicles, with production bases in Beijing, Hebei, and Chongqing, offering a product line covering mid-size, compact, A0-segment sedans, and SUVs[21] - Fujian Benz, a 35.0% owned joint venture, produces and sells Mercedes-Benz multi-purpose passenger and light commercial vehicles, maintaining a leading position in the joint venture luxury commercial vehicle segment[21][23] Core Passenger Vehicle Components The Group produces core components like engines and powertrains through production bases of Beijing Brand, Beijing Benz, and Beijing Hyundai, with Beijing Benz operating the first power battery factory outside Germany and exporting engine core components and complete engines - The Group produces core passenger vehicle components such as engines and powertrains through its brand production bases, primarily for self-produced vehicles, with some for external sales[23] - Beijing Benz operates two engine factories and the first power battery factory outside Germany, producing M274, M282, M264, M254 engines and its first new energy power battery product, also exporting engine core components and complete engines[23] Auto Finance The Group conducts auto finance and after-market related businesses for Beijing Brand, Mercedes-Benz, and Hyundai brands through associates and joint ventures, driving their rapid development through capital injection and business cooperation - The Group conducts auto finance and after-market businesses through associates and joint ventures such as BAIC Group Finance Co., Ltd. and Mercedes-Benz Leasing Co., Ltd[23] Sales and Service Business The Group and BAIC Bluepark jointly established BAIC Marketing Service Company to enhance Beijing Brand's marketing competitiveness through shared channels, service resources, and sales resources - The Group and BAIC Bluepark jointly invested in establishing BAIC Marketing Service Company to enhance Beijing Brand's marketing competitiveness by sharing channels, service, and sales resources[23] International Business The Group expands international business through BAIC South Africa (responsible for production and marketing in South Africa and SADC) and BAIC International Development Co., Ltd. (responsible for international marketing outside China and South Africa), focusing on exporting Beijing Brand passenger vehicles - The Group expands international business through its joint venture BAIC South Africa and wholly-owned subsidiary BAIC International Development Co., Ltd., focusing on exporting Beijing Brand passenger vehicle products[25] Other Related Businesses In H1 2021, the Group continued to develop lightweight R&D, new energy technology transformation, information big data, and used car businesses through relevant joint ventures - The Group continues to develop lightweight R&D, new energy technology transformation, information big data, and used car businesses[25] H1 2021 Industry Development In H1 2021, China's economy continued to recover steadily, with passenger vehicle sales surging 27.0% to 10.007 million units, driven by a low base effect and new energy vehicle growth; new energy passenger vehicle wholesale sales increased 217.4%, and the luxury car market grew 41.5%, supported by national pro-consumption policies - In H1 2021, China's GDP grew by 12.7% year-on-year, with the economy continuing to recover steadily[25] - The passenger vehicle market achieved wholesale sales of 10.007 million units, a 27.0% year-on-year increase, primarily driven by a low base effect and new energy vehicle growth[25] H1 2021 New Energy Passenger Vehicle Sales (Ten Thousand Units) | Type | Wholesale Sales | Year-on-Year Growth | | :--- | :--- | :--- | | New Energy Passenger Vehicles | 114.0 | 217.4% | | Pure Electric Passenger Vehicles | 94.1 | 244.1% | | Plug-in Hybrid Passenger Vehicles | 19.9 | 132.5% | - The luxury car market achieved wholesale sales of 1.658 million units, a 41.5% year-on-year increase, surpassing the overall growth rate of the passenger vehicle market[25] - The state issued policies to boost bulk consumption, promote new energy vehicles in rural areas, and unleash the consumption potential of the automotive market[27] H1 2021 Group Operations In H1 2021, the Group's brands actively responded to market challenges; Beijing Brand launched new models and saw SUV sales increase, Beijing Benz sales grew 17.0% and maintained a leading position in luxury, Beijing Hyundai adjusted marketing and launched new models, Fujian Benz sales increased 39.0%, and the Group continued to optimize its sales network and strengthen R&D Brand Operations Beijing Brand achieved 28,000 vehicle sales with increased SUV sales and new model launches; Beijing Benz sold 316,000 units, up 17.0%, with E-Class, C-Class, and GLC SUV monthly sales exceeding 10,000, and new products like the E 350 e L PHEV and long-wheelbase C-Class sedans entered production; Beijing Hyundai wholesale sales were 194,000 units and retail sales 203,000 units, with new models launched; Fujian Benz sales reached 19,000 units, up 39.0% - Beijing Brand achieved 28,000 vehicle sales, with SUV model sales increasing year-on-year, and new products like U5 PLUS and EU5 PLUS successively launched[28] - Beijing Benz achieved 316,000 vehicle sales, a 17.0% year-on-year increase, with its three main models (E-Class, C-Class, GLC SUV) averaging over 10,000 monthly sales each[29] - Beijing Benz Shunyi plant commenced production of new products as planned, including the new generation Mercedes-Benz E 350 e L plug-in hybrid sedan, the all-new Mercedes-Benz long-wheelbase C-Class sedan, and the Mercedes-Benz M254 engine[29] - Beijing Hyundai achieved 194,000 wholesale sales, a 5.3% year-on-year increase, and 203,000 retail sales, with the all-new MISTRA and its pure electric model, and the fifth-generation Tucson L successfully launched[31] - Fujian Benz achieved 19,000 vehicle sales, a 39.0% year-on-year increase[31] Sales Network Status The Group continuously optimizes and upgrades its dealer network to enhance customer experience and overall competitiveness, with Beijing Brand completing store upgrades and Beijing Benz and Beijing Hyundai focusing on network efficiency, quality, and dealer profitability - The Group continuously optimizes and upgrades its dealer network to enhance customer experience and overall competitiveness, with each brand having independent sales channels[31] R&D Status The Group's brands continue to vigorously promote R&D system and capability building; Beijing Brand focuses on "intelligent connectivity" and "electrification"; Beijing Benz has Daimler's largest R&D center in a joint venture, supporting localized prototype vehicle trials; Beijing Hyundai simultaneously develops multiple local and imported models to enrich its product line - Beijing Brand focuses on “intelligent connectivity” and “electrification,” combining independent innovation with strategic cooperation to achieve breakthroughs in core technologies[33] - Beijing Benz has Daimler's largest R&D center within a joint venture, introducing the Mercedes-Benz development system to support localized prototype vehicle trials and shorten new product introduction and validation cycles[33] - Beijing Hyundai is simultaneously developing three local models and five imported models, with the all-new MISTRA EV and fifth-generation Tucson L already launched, and its first MPV Custo and N-line sports models progressing well in R&D[33] Production Facilities Status The Group possesses professional production facilities with flexible production lines, enabling agile response to market demands; Beijing Benz aims to build Mercedes-Benz's most comprehensive global production base with a quality center based on Daimler's global standards; Beijing Hyundai factories boast over 90% equipment automation and flexible production scheduling - The Group's production facilities are equipped with flexible production lines, enabling agile changes in production plans and quick responses to market demand fluctuations, thereby reducing costs[34] - Beijing Benz continues to build Mercedes-Benz's most comprehensive global production base, adhering to “digitalization, flexibility, efficiency, and sustainability” standards, and establishing a quality center to ensure global quality[35] - All Beijing Hyundai factories have over 90% equipment automation, ensuring precision and high-quality products, and can flexibly arrange production plans to reduce manufacturing costs[37] H2 2021 Outlook H2 2021 economic operations are expected to continue stable recovery, supporting auto consumption, but global economic recovery and the pandemic pose uncertainties, with rising raw material prices increasing cost pressure; the Group will actively respond, with Beijing Brand enhancing brand power and product upgrades, Beijing Benz strengthening supply and new energy vehicle launches, and Beijing Hyundai introducing its first MPV Custo and focusing on key models - H2 2021 economic operations are expected to recover steadily, but global economic recovery and the pandemic present uncertainties, with rising raw material prices increasing corporate cost pressure[37] - Beijing Brand will advance brand power enhancement and product upgrades, focusing on increasing sales of key models such as U5 PLUS, EU5 PLUS, and X7[37] - Beijing Benz will strengthen supply chain assurance and lean production, ensure the launch of new energy models, and consolidate its leading position in the high-end luxury car market[37] - Beijing Hyundai's first MPV Custo is set to launch, with a focus on four key models: the seventh-generation Elantra, fifth-generation Tucson L, all-new ix35, and all-new Celesta, to boost market attention and retail sales[37] Corporate Governance Practices This section outlines the company's corporate governance practices, including compliance with governance codes, changes in board and committee composition, updates on directors, supervisors, and senior management, as well as information on interim dividends, audit committee, listed securities transactions, share interests of key personnel and major shareholders, and significant litigation or arbitration Corporate Governance The company is committed to high-level corporate governance, complying with the Corporate Governance Code and Model Code; the Board and Supervisory Committee completed re-election on March 24, 2021, with Mr. Jiang Deyi elected Chairman; the Audit Committee reviewed interim financial statements; no listed securities were bought, sold, or redeemed, and no share interests were held by directors, supervisors, or senior management during the period; major shareholders include BAIC Group, Shougang Group, and Daimler AG; no significant litigation or arbitration - The company is committed to establishing and maintaining high standards of corporate governance, complying with the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers[38] - The Board of Directors and Supervisory Committee completed their re-election on March 24, 2021, with Mr. Jiang Deyi elected as Chairman[38] - The Audit Committee has reviewed the Group's unaudited interim financial statements for H1 2021[41] - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[42] - As of the end of June 2021, none of the directors, supervisors, or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations[42] Major Shareholder Holdings as of June 2021 | Shareholder Name | Share Class | Number of Shares/Underlying Shares Held | Percentage of Total Share Capital (%) | | :--- | :--- | :--- | :--- | | BAIC Group Co., Ltd. | Domestic Shares | 3,416,659,704(L) | 42.63 | | Shougang Group Co., Ltd. | Domestic Shares | 1,028,748,707(L) | 12.83 | | Daimler AG | H Shares | 765,818,182(L) | 9.55 | - As of the end of June 2021, the company had no significant litigation or arbitration matters[45] - The Board did not propose an interim dividend for H1 2021[41] Directors, Supervisors, and Senior Management This section lists the names and positions of the company's directors, supervisors, and senior management as of the latest practicable date, with Mr. Jiang Deyi serving as Chairman and Non-executive Director, Mr. Huang Wenbing as Executive Director and President, and Ms. Li Chengjun as Chairperson of the Supervisory Committee - Mr. Jiang Deyi serves as Chairman and Non-executive Director, and Mr. Huang Wenbing serves as Executive Director and President[47][50] - Ms. Li Chengjun serves as Chairperson of the Supervisory Committee and Employee Representative Supervisor[49] Management Discussion and Analysis This section provides an in-depth analysis of the Group's H1 2021 financial performance and operations, highlighting significant revenue and net profit growth, primarily driven by Beijing Benz's strong performance, increased gross profit despite expanded Beijing Brand gross loss, ample liquidity, and reduced asset-liability ratio, with no major equity investments or M&A, a shift from foreign currency exchange loss to gain, and a slight decrease in headcount but increased employee costs Revenue and Net Profit Attributable to Equity Holders of the Company In H1 2021, Group revenue grew 16.1% to RMB 90.3752 billion, primarily driven by a 17.5% increase in Beijing Benz revenue; net profit attributable to equity holders surged 163.5% to RMB 2.7581 billion, with basic earnings per share rising to RMB 0.34, mainly due to increased Beijing Benz sales, while Beijing Brand revenue decreased by 21.0% Revenue and Net Profit Overview (RMB in millions) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Group Revenue | 90,375.2 | 77,854.4 | | Beijing Benz Related Revenue | 88,058.9 | 74,920.4 | | Beijing Brand Related Revenue | 2,316.4 | 2,934.0 | | Net Profit Attributable to Equity Holders of the Company | 2,758.1 | 1,046.9 | | Basic Earnings Per Share | 0.34 | 0.12 | Gross Profit Group gross profit increased 18.3% year-on-year to RMB 21.325 billion, primarily due to Beijing Benz's gross profit rising 19.9% to RMB 23.8213 billion, with gross margin improving to 27.1%; however, Beijing Brand's gross loss expanded to negative RMB 2.4963 billion, mainly impacted by declining sales and changes in model structure Gross Profit Overview (RMB in millions) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Group Gross Profit | 21,325.0 | 18,030.3 | | Beijing Benz Gross Profit | 23,821.3 | 19,865.0 | | Beijing Benz Gross Margin | 27.1% | 26.5% | | Beijing Brand Gross Profit | (2,496.3) | (1,834.6) | Liquidity and Financial Resources Net cash flow from operating activities decreased 19.1% year-on-year to RMB 4.2595 billion, mainly due to reduced operating cash inflow from Beijing Benz; as of June 2021, the Group held RMB 49.8214 billion in cash and cash equivalents, RMB 24.0861 billion in outstanding borrowings, and RMB 22.6106 billion in unused bank credit lines, having issued offshore corporate bonds and super short-term commercial papers to repay interest-bearing debt and supplement working capital - Net cash flow from operating activities decreased by 19.1% year-on-year to RMB 4.2595 billion, primarily due to a decrease in Beijing Benz's operating cash inflow[51] Liquidity Status as of June 2021 (RMB in millions) | Metric | Amount | | :--- | :--- | | Cash and Cash Equivalents | 49,821.4 | | Outstanding Borrowings | 24,086.1 | | Unused Bank Credit Lines | 22,610.6 | | Capital Expenditure Commitments | 30,892.1 | - In H1 2021, the Group issued USD 350 million in offshore corporate bonds and two tranches of super short-term commercial papers totaling RMB 4 billion, used to repay interest-bearing debt and supplement daily working capital[53] Capital Structure As of June 2021, the Group's asset-liability ratio decreased by 4.7 percentage points from 62.0% at year-end 2020 to 57.3%; the net debt-to-equity ratio increased from negative 60.3% to negative 46.2%, mainly due to increases in total borrowings, cash and cash equivalents, and a greater increase in total equity compared to borrowings and cash and cash equivalents; total outstanding borrowings amounted to RMB 24.0861 billion Capital Structure Metric Changes | Metric | June 2021 | December 2020 | | :--- | :--- | :--- | | Asset-Liability Ratio | 57.3% | 62.0% | | Net Debt-to-Equity Ratio | -46.2% | -60.3% | - As of the end of June 2021, total outstanding borrowings amounted to RMB 24.0861 billion, comprising RMB 15.9274 billion in short-term borrowings and RMB 8.1587 billion in long-term borrowings[52] Significant Investments In H1 2021, the Group made no significant equity investments; total capital expenditure slightly increased to RMB 3.4576 billion, with an increase in Beijing Brand's capital expenditure; total R&D expenditure rose to RMB 1.2296 billion - The Group made no significant equity investments in H1 2021[53] Capital Expenditure and R&D Expenditure (RMB in millions) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Total Capital Expenditure | 3,457.6 | 3,347.7 | | Beijing Benz Capital Expenditure | 2,919.7 | 3,028.2 | | Beijing Brand Capital Expenditure | 537.9 | 319.5 | | Total R&D Expenditure | 1,229.6 | 1,131.6 | Significant Acquisitions and Disposals Except as disclosed in the 2020 annual report, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period - The Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period[54] Foreign Currency Exchange Gains and Losses The Group's (primarily Beijing Benz's) foreign currency exchange gains and losses shifted from a loss of RMB 147.7 million in H1 2020 to a gain of RMB 66.9 million in H1 2021, mainly due to effective hedging with forward foreign exchange contracts and the appreciation of RMB against the Euro; the Group employs a mature foreign exchange management strategy, primarily using forward foreign exchange contracts to hedge risks Foreign Currency Exchange Gains and Losses (RMB in millions) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Foreign Currency Exchange Gains and Losses | Gain of 66.9 | Loss of 147.7 | - The shift from exchange loss to gain was primarily due to effective hedging with forward foreign exchange contracts and the appreciation of the RMB against the Euro[54] - The Group has a mature foreign exchange management strategy, primarily using forward foreign exchange contracts to hedge exchange rate risks[54] Employees and Remuneration Policy The Group's headcount decreased from 21,038 at year-end 2020 to 19,759 at June 2021, while employee costs increased to RMB 2.9301 billion, mainly due to higher total production and sales volume; the Group has established a performance and capability-oriented remuneration system and provides supplementary retirement benefits through an enterprise annuity scheme Employee Headcount and Costs (RMB in millions) | Metric | June 2021 | December 2020 | | :--- | :--- | :--- | | Employee Headcount | 19,759 | 21,038 | | Employee Costs | 2,930.1 | 2,859.7 | - The Group has established a performance and capability-oriented remuneration system and provides supplementary retirement benefits through an enterprise annuity scheme[54] Pledged Assets As of June 2021, the Group had pledged bills receivable amounting to RMB 547.8 million - As of the end of June 2021, the Group had pledged bills receivable amounting to RMB 547.8 million[54] Contingent Liabilities As of June 2021, the Group had no significant contingent liabilities - As of the end of June 2021, the Group had no significant contingent liabilities[54] Unaudited Interim Condensed Consolidated Financial Information Review Report PricewaterhouseCoopers has reviewed BAIC Motor Corporation Limited's unaudited interim condensed consolidated financial information for the six months ended June 30, 2021, in accordance with International Standard on Review Engagements 2410, finding no material matters indicating non-preparation in accordance with International Accounting Standard 34 - The auditor, PricewaterhouseCoopers, has reviewed the interim financial information in accordance with International Standard on Review Engagements 2410[55] - The review concluded that nothing has come to the auditor's attention that causes them to believe the Group's interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[55] Interim Condensed Consolidated Statement of Financial Position As of June 30, 2021, the Group's total assets were RMB 190.4667 billion, a slight decrease from year-end 2020; total liabilities significantly reduced to RMB 109.0577 billion; and capital and reserves attributable to equity holders of the Company increased to RMB 52.5321 billion Summary of Interim Condensed Consolidated Statement of Financial Position (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 98,609,034 | 98,703,847 | | Current assets | 91,857,667 | 94,999,233 | | Total assets | 190,466,701 | 193,703,080 | | Equity | | | | Capital and reserves attributable to equity holders of the Company | 52,532,106 | 51,087,500 | | Non-controlling interests | 28,876,868 | 22,506,443 | | Total equity | 81,408,974 | 73,593,943 | | Liabilities | | | | Non-current liabilities | 14,339,470 | 14,836,166 | | Current liabilities | 94,718,257 | 105,272,971 | | Total liabilities | 109,057,727 | 120,109,137 | - As of June 30, 2021, the Group's current liabilities exceeded its current assets by approximately RMB 2.861 billion, but management believes there are sufficient available financing channels to meet working capital requirements[69] Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2021, Group revenue increased 16.1% year-on-year to RMB 90.3752 billion; profit for the period surged 58.0% to RMB 9.1828 billion; profit attributable to equity holders of the Company grew 163.5% to RMB 2.7581 billion, with basic earnings per share of RMB 0.34; total comprehensive income for the period was RMB 10.4563 billion, a significant increase from the prior year Summary of Interim Condensed Consolidated Statement of Comprehensive Income (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Revenue | 90,375,224 | 77,854,370 | | Gross profit | 21,325,038 | 18,030,336 | | Operating profit | 13,977,617 | 10,232,784 | | Profit before income tax | 13,578,950 | 9,087,882 | | Profit for the period | 9,182,796 | 5,811,345 | | Attributable to equity holders of the Company | 2,758,065 | 1,046,945 | | Basic and diluted earnings per share (RMB) | 0.34 | 0.12 | | Total comprehensive income for the period | 10,456,258 | 5,788,057 | Interim Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2021, total equity attributable to equity holders of the Company increased from RMB 51.0875 billion at the beginning of the period to RMB 52.5321 billion, with total comprehensive income for the period at RMB 4.0858 billion; the company fully repaid its RMB 2 billion perpetual bonds on March 23, 2021 Changes in Equity Attributable to Equity Holders of the Company (RMB in thousands) | Item | Balance at January 1, 2021 | Total comprehensive income for the period | Repayment of perpetual bonds | Balance at June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Share capital | 8,015,338 | - | - | 8,015,338 | | Perpetual bonds | 1,998,160 | - | (1,998,160) | - | | Other reserves | 22,120,796 | 1,327,768 | (1,840) | 23,446,724 | | Retained earnings | 18,953,206 | 2,758,065 | (641,227) | 21,070,044 | | Subtotal | 51,087,500 | 4,085,833 | (2,641,227) | 52,532,106 | - The company decided in February 2021 not to exercise the renewal option for its RMB 2 billion perpetual bonds issued on April 10, 2018, and made full payment on March 23, 2021[96] Interim Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2021, net cash flow from operating activities was RMB 4.2595 billion, a year-on-year decrease; net cash used in investing activities was RMB 3.9870 billion; net cash generated from financing activities was RMB 1.4696 billion, a significant year-on-year increase; net increase in cash and cash equivalents was RMB 1.7421 billion, with an ending balance of RMB 49.8214 billion Summary of Interim Condensed Consolidated Statement of Cash Flows (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | 4,259,504 | 5,265,541 | | Net cash used in investing activities | (3,986,960) | (4,566,531) | | Net cash generated from financing activities | 1,469,582 | 795,787 | | Net increase in cash and cash equivalents | 1,742,126 | 1,494,797 | | Cash and cash equivalents at June 30 | 49,821,432 | 51,721,352 | Notes to the Interim Condensed Consolidated Financial Information This section provides detailed notes to the interim condensed consolidated financial information, covering general company information, basis of preparation and accounting policies, estimates, financial risk management, segment information, property/plant and equipment/land use rights and intangible assets, trade receivables, share capital, perpetual bonds, borrowings, trade payables, operating profit, income tax expense, earnings per share, dividends, capital commitments, and related party transactions 1 General Information BAIC Motor Corporation Limited and its subsidiaries primarily engage in the manufacturing and sale of passenger vehicles, engines, and automotive parts within China; the company was established in China on September 20, 2010, listed on the Main Board of the Hong Kong Stock Exchange on December 19, 2014, and its direct controlling company is BAIC Group Co., Ltd - The Group primarily engages in the manufacturing and sale of passenger vehicles, engines, and automotive parts within China[69] - The company was listed on the Main Board of the Hong Kong Stock Exchange on December 19, 2014, and its direct controlling company is BAIC Group Co., Ltd[69] 2 Basis of Preparation and Accounting Policies This condensed financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" on a going concern basis; during the reporting period, amended standards including IFRS 16 (Revised) and IFRS 9 (Revised) were adopted, but had no significant impact on accounting policies - This condensed financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and on a going concern basis[69] - Adopted amended standards include International Financial Reporting Standard 16 (Revised) and International Financial Reporting Standard 9 (Revised), which had no significant impact on accounting policies[71] 3 Estimates The preparation of condensed financial information requires management to make judgments, estimates, and assumptions regarding the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses, where actual results may differ from these estimates - The preparation of condensed financial information involves management making judgments, estimates, and assumptions regarding the application of accounting policies and financial amounts, and actual results may differ from these estimates[71] 4 Financial Risk Management The Group's business faces market risks (foreign exchange, interest rate), credit risk, and liquidity risk, with no changes in risk management policies since year-end; as of June 30, 2021, liquidity risk analysis of the Group's financial liabilities shows that borrowings, lease liabilities, trade payables, and other payables are primarily due within one year; fair value measurement of derivative financial instruments uses Level 2 inputs - The Group's business faces market risks (foreign exchange risk and interest rate risk), credit risk, and liquidity risk, with no changes in risk management policies since year-end[73] Financial Liabilities Maturity Analysis as of June 30, 2021 (RMB in thousands) | Item | Within 1 year | 1 to 2 years | 2 to 5 years | Over 5 years | | :--- | :--- | :--- | :--- | :--- | | Borrowings | 16,476,335 | 1,791,803 | 6,800,693 | – | | Lease liabilities | 75,038 | 13,975 | 2,943 | 14,067,160 | | Trade payables | 40,905,415 | – | – | – | | Other payables | 31,956,491 | 43,714 | 45,317 | – | - Fair value measurement of derivative financial instruments uses Level 2 inputs (other observable inputs)[77][78] 5 Segment Information The Group's business is divided into two reporting segments based on internal reporting: Beijing Brand passenger vehicles and Beijing Benz passenger vehicles; in H1 2021, Beijing Benz contributed the vast majority of revenue and gross profit, while Beijing Brand incurred a gross loss; the Group's revenue primarily originates from customers within China, and non-current assets are also mainly located in mainland China - The Group's business is divided into two reporting segments: Beijing Brand passenger vehicles and Beijing Benz passenger vehicles[79] H1 2021 Segment Revenue and Gross Profit (RMB in thousands) | Item | Beijing Brand | Beijing Benz | Eliminations | Total | | :--- | :--- | :--- | :--- | :--- | | Revenue from external customers | 2,316,352 | 88,058,872 | – | 90,375,224 | | Segment (gross loss)/gross profit | (2,496,302) | 23,821,340 | – | 21,325,038 | - For the six months ended June 30, 2021, revenue from external customers located within China accounted for approximately 99.7% of the Group's total revenue[87] - As of June 30, 2021, approximately 98.5% of the Group's other non-current assets, excluding financial instruments and deferred income tax assets, were located in mainland China[87] 6 Property, Plant and Equipment, Land Use Rights and Intangible Assets As of June 30, 2021, the net book value of property, plant and equipment was RMB 50.9208 billion, land use rights RMB 7.0679 billion, and intangible assets RMB 11.8878 billion; during the reporting period, capitalized borrowing costs amounted to RMB 105.573 million, with a weighted average interest rate of 3.34%; no property, plant and equipment, land use rights, or intangible assets were pledged as collateral for borrowings Net Book Value of Non-current Assets as of June 30, 2021 (RMB in thousands) | Item | Net Book Value | | :--- | :--- | | Property, plant and equipment | 50,920,838 | | Land use rights | 7,067,910 | | Intangible assets | 11,887,835 | - For the six months ended June 30, 2021, the Group's capitalized borrowing costs amounted to RMB 105.573 million, with a weighted average interest rate of 3.34%[89] - As of June 30, 2021, there were no property, plant and equipment, land use rights, or intangible assets pledged as collateral for borrowings[89] 7 Trade Receivables As of June 30, 2021, total trade receivables were RMB 14.5870 billion, with impairment provisions of RMB 441.063 million; total bills receivable were RMB 15.3826 billion, of which RMB 547.827 million were pledged as collateral for bank bills payable; the aging of trade receivables was primarily within one year Trade Receivables and Bills Receivable as of June 30, 2021 (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Gross trade receivables | 14,587,014 | 17,849,531 | | Less: Impairment allowance | (441,063) | (465,630) | | Bills receivable | 15,382,586 | 20,553,050 | - As of June 30, 2021, the amount of pledged bills receivable was RMB 547.827 million[94] - The aging of trade receivables is primarily from current to 1 year, amounting to RMB 5.5993 billion[91] 8 Share Capital As of June 30, 2021, the company's issued ordinary shares totaled 8.015338 billion, with a par value of RMB 1 per share, resulting in a total share capital of RMB 8.015338 billion, consistent with year-end 2020 Share Capital Status (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Number of ordinary shares (thousands) | 8,015,338 | 8,015,338 | | Share capital | 8,015,338 | 8,015,338 | 9 Perpetual Bonds The company's RMB 2 billion perpetual bonds, issued on April 10, 2018, were fully repaid on March 23, 2021, as the company decided not to exercise the renewal option - The company decided in February 2021 not to exercise the renewal option for its RMB 2 billion perpetual bonds issued on April 10, 2018, and made full payment on March 23, 2021[96] 10 Borrowings As of June 30, 2021, total borrowings amounted to RMB 24.0861 billion, comprising RMB 8.1587 billion in non-current borrowings and RMB 15.9274 billion in current borrowings; total unused credit facilities amounted to RMB 22.6106 billion Borrowings Composition (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Non-current borrowings | 8,158,709 | 8,721,150 | | Current borrowings | 15,927,391 | 11,736,216 | | Total borrowings | 24,086,100 | 20,457,366 | Unused Credit Facilities (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Within 1 year | 17,802,679 | 29,080,169 | | Over 1 year | 4,807,955 | 1,300,000 | | Total | 22,610,634 | 30,380,169 | 11 Trade Payables As of June 30, 2021, total trade payables amounted to RMB 40.9054 billion, comprising RMB 38.5821 billion in trade payables and RMB 2.3233 billion in bills payable; the aging of trade payables was primarily within one year Trade Payables Composition (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Trade payables | 38,582,076 | 45,096,832 | | Bills payable | 2,323,339 | 2,920,293 | | Total | 40,905,415 | 48,017,125 | - The aging of trade payables is primarily from current to 1 year, amounting to RMB 34.2457 billion[104] 12 Operating Profit Operating profit includes depreciation and amortization of RMB 4.2189 billion, employee costs of RMB 2.5751 billion, warranty expenses of RMB 510.961 million, impairment provisions for non-financial assets of RMB 576.023 million, and foreign currency exchange gains of RMB 286.431 million Key Components of Operating Profit (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Depreciation and amortization | 4,218,904 | 3,834,176 | | Employee costs | 2,575,148 | 2,455,198 | | Warranty expenses | 510,961 | 79,817 | | Impairment provisions for non-financial assets | 576,023 | 36,028 | | Foreign currency exchange gains | (286,431) | (46,767) | | Government grants | (1,252,143) | (166,215) | 13 Income Tax Expense For the six months ended June 30, 2021, income tax expense was RMB 4.3962 billion, comprising current income tax of RMB 3.2532 billion and deferred income tax of RMB 1.1430 billion Income Tax Expense Composition (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Current income tax | 3,253,171 | 2,499,616 | | Deferred income tax | 1,142,983 | 776,921 | | Total | 4,396,154 | 3,276,537 | 14 Earnings Per Share For the six months ended June 30, 2021, profit attributable to ordinary equity holders of the Company was RMB 2.7581 billion, with basic earnings per share of RMB 0.34; there were no potential dilutive ordinary shares during the period, thus diluted earnings per share equaled basic earnings per share Earnings Per Share Calculation (RMB in thousands) | Item | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company | 2,758,065 | 934,945 | | Weighted average number of ordinary shares in issue (thousands) | 8,015,338 | 8,015,338 | | Earnings per share attributable to ordinary equity holders of the Company for the period (RMB) | 0.34 | 0.12 | - For the six months ended June 30, 2021 and 2020, there were no potential dilutive ordinary shares, thus diluted earnings per share equaled basic earnings per share[109] 15 Dividends For the six months ended June 30, 2021, the Board did not propose an interim dividend; dividends related to the 2020 financial year, approximately RMB 641.227 million (RMB 0.08 per share), were approved by shareholders at the annual general meeting in June 2021 - For the six months ended June 30, 2021, the Board did not propose an interim dividend[112] - Dividends related to the 2020 financial year, approximately RMB 641.227 million (RMB 0.08 per share), were approved by shareholders at the annual general meeting in June 2021[112] 16 Capital Commitments As of June 30, 2021, the Group's total capital commitments for property, plant and equipment amounted to RMB 30.8921 billion, with RMB 13.9149 billion contracted but not yet executed, and RMB 16.9772 billion approved but not yet contracted Capital Commitments as of June 30, 2021 (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Contracted but not yet executed | 13,914,899 | 14,254,089 | | Approved but not yet contracted | 16,977,248 | 18,418,707 | | Total | 30,892,147 | 32,672,796 | 17 Related Party Transactions This section discloses significant related party transactions in H1 2021, including sales of goods, materials, property, plant and equipment, provision and receipt of services, purchases of goods and materials, lease income and expenses, interest income and expenses, and key management personnel remuneration; it also presents significant related party balances as of June 30, 2021, including financial assets, trade receivables, bills receivable, prepayments, other receivables, cash and cash equivalents, trade payables, bills payable, contract liabilities, other payables and accruals, dividends payable, and borrowings H1 2021 Significant Related Party Transactions (RMB in thousands) | Transaction Type | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Sales of goods and materials, property, plant and equipment | 9,560,547 | 8,661,970 | | Provision of services | 237,480 | 184,185 | | Purchases of goods and materials | 35,540,067 | 30,237,923 | | Receipt of services | 5,415,074 | 5,376,995 | | Lease income | 121 | – | | Lease expenses | 48,586 | 62,442 | | Interest income | 165,450 | 153,541 | | Interest expenses | 56,556 | 53,174 | | Key management personnel remuneration | 4,701 | 8,155 | Significant Related Party Balances as of June 30, 2021 (RMB in thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Assets | | | | Financial assets at fair value through other comprehensive income | 3,613,375 | 1,893,816 | | Trade receivables | 2,027,617 | 2,758,659 | | Bills receivable | 19,465 | 136,146 | | Prepayments | 82,571 | 183,642 | | Other receivables | 830,162 | 1,192,270 | | Cash and cash equivalents | 14,942,909 | 15,310,913 | | Liabilities | | | | Trade payables | 26,574,191 | 31,545,541 | | Bills payable | 79,246 | 383,563 | | Contract liabilities | 11,655 | 15,304 | | Other payables and accruals | 7,182,267 | 7,257,293 | | Dividends payable | 43,596 | 43,596 | | Borrowings | 2,041,236 | 2,459,010 | Definitions This section provides definitions for key terms and abbreviations used in the report, including company names, brand names, institutional names, financial reporting standards, and reporting periods, to ensure clear understanding of the report content - This section provides definitions for key terms and abbreviations used in the report, such as "Beijing Benz," "Beijing Brand," "CAAM," and "IFRS"[124][126][128]