Interim Report 2020
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Stock Code: 0598HK 601598SH INTERIM REPORT 2020 CUSTOMERS’ SUCCESS OUR ACHIEVEMENT 2020 INTERIM REPORT INTERIM REPORT 2020 1 Important Notice 1. The Board and the Supervisory Committee of the Company and the Directors, Supervisors and members of the Senior Management warrant the truthfulness, accuracy and completeness of the contents in this Interim Report and confirm that there are no misrepresentations or misleading statements contained in or material omissions from this Interim Report, and accept several and joint legal responsibilities. 2. Absent Directors Position of the Name of the Reason for the absent Director absent Director absence of the Director Name of proxy Non-executive Director Su Jian Absent due to other Li Guanpeng business engagement 3. The Interim Report is unaudited. 4. The Company’s legal representative, Li Guanpeng; Chief Financial Officer, Wang Jiuyun; and the person in charge of the Financial Department (“person in charge of accounting”), Mai Lina, hereby make the statement that they warrant the financial statements contained in this Interim Report are true, accurate and complete. 5. Proposal for profit distribution or proposal for conversion of common reserve fund into share capital during the Reporting Period considered by the Board No 6. Risk disclaimer of forward-looking statements 3Applicable Not applicable Forward-looking statements including future plans and development strategies in this Report do not constitute substantive commitments of the Company to investors. Investors should be aware of the investment risks. 7. Whether the controlling shareholder or its related parties has misappropriated the Company’s funds for purposes other than for business No 8. Whether the Company has provided external guarantees in violation of any prescribed decision-making procedures No 9. Significant risk alert The Company has described the potential risks in detail in this Report. Please refer to “Chapter 4 Management Discussion and Analysis of Business Performance (Report of the Board) – III. OTHER DISCLOSURES – (III) Potential Risks” in this Report. 10. Others 3Applicable Not applicable The Company’s 2020 interim financial report has been prepared in accordance with Accounting Standards for Business Enterprises published by the Ministry of Finance of the People’s Republic of China and related provisions. Unless otherwise specified, the reporting currency in this Report is Renminbi (“RMB”). Contents contained in this Report are prepared in compliance with all disclosure requirements of the SSE Listing Rules and SEHK Listing Rules. The Report is published in both Chinese and English versions in Mainland China and Hong Kong at the same time. Should there be any discrepancies between the Chinese and English versions of this Report, the Chinese version shall prevail. Corporate Mission Creating a logistics ecology system around the world to successfully promote industrial progress Corporate Vision Becoming a world-class intelligent logistics platform enterprise CONTENTS Highlights of the First Half of 2020 4 Chapter 1 Definitions 5 Chapter 2 General Information and Key Financial Indicators 8 Chapter 3 Business Overview 12 Chapter 4 Management Discussion and Analysis of Business Performance (Report of the Board) 21 Chapter 5 Significant Matters 45 Chapter 6 Movement of Ordinary Shares and Particulars of Shareholders 64 Chapter 7 Particulars of Preferred Shares 70 Chapter 8 Directors, Supervisors, and Senior Management 71 Chapter 9 Particulars of Corporate Bonds 72 Chapter 10 Financial Report 77 Chapter 11 Documents Available for Check 336 4 SINOTRANS LIMITED Highlights of the First Half of 2020 Revenue (RMB) 39.69 billion KLG Group Revenue Segment profit from air freight forwarding RMB 678 million Profit generated from operation + 130% RMB 74 million The volume of China Europe Railway Express Revenue from Sinotrans E-LCL 38% 23% E-commerce business Percentage of the revenue contribution from Revenue 68% core direct customers Segment Profit 177% 35% INTERIM REPORT 2020 5 Chapter 1 Definitions In this Report, unless the context otherwise indicates, the following words have the following meanings: A Share(s) the Domestic Share(s) of the Company with nominal value of RMB1.00 each, which are listed on the SSE and traded in RMB Articles of Association the Articles of Association of Sinotrans Limited Board the Board of Directors of the Company CG Code code provisions of Corporate Governance Code as set out in Appendix 14 to the SEHK Listing Rules China Merchants China Merchants Group Limited (招商局集團有限公司), a wholly state-owned enterprise established under the laws of the PRC under direct control of the State-owned Assets Supervision and Administration Commission of the State Council, the actual controller of the Company, which holds approximately 57.61% of the issued share capital of the Company at the date of this Report China Merchants Group or CMG China Merchants and its subsidiaries Companies Ordinance the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) Company or Sinotrans Sinotrans Limited (中國外運股份有限公司), a joint stock limited company incorporated in the PRC with limited liability, whose H Shares are listed on the SEHK and A Shares are listed on the SSE Company Law the Company Law of the People’s Republic of China CSRC China Securities Regulatory Commission Director(s)/Supervisor(s) Director(s)/Supervisor(s) of the Company Domestic Share(s) shares issued by the Company under the laws of the PRC, the par value of which is denominated in RMB, and which are subscribed in RMB Finance Company China Merchants Group Finance Co., Ltd. (招商局集團財務有限公 司), a company owned as to 51% by China Merchants and 49% by Sinotrans & CSC Group Sinotrans Limited and its subsidiaries HK$ Hong Kong dollars, the lawful currency of Hong Kong Special Administrative Region of the PRC 6 SINOTRANS LIMITED Chapter 1 Definitions H Share(s) overseas listed foreign invested Share(s) of RMB1.00 each in the issued share capital of the Company, which are listed on the Hong Kong Stock Exchange and traded in HK$ Hong Kong Hong Kong Special Administrative Region of the People’s Republic of China Hong Kong Stock Exchange/SEHK The Stock Exchange of Hong Kong Limited KLG Group the seven European logistics companies of KLG Europe Holding B.V. acquired by the Company, which were wholly-owned subsidiaries of the Company as at the date of this Report Listing Rules in Listing Places the SEHK Listing Rules and SSE Listing Rules Model Code the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 to the SEHK Listing Rules PRC the People’s Republic of China Reporting Period the period from 1 January 2020 to 30 June 2020 RMB Renminbi, the lawful currency of the PRC SASAC the State-owned Assets Supervision and Administration Commission of the State Council of the PRC SEHK Listing Rules Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Senior Management the Company’s senior management as defined by the Articles of Association SFO the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) INTERIM REPORT 2020 7 Chapter 1 Definitions Share(s) H Share(s) and A Share(s) Shareholder(s) holder(s) of the Shares Sinoair Sinotrans Air Transportation Development Co., Ltd. (中外運空運發展 股份有限公司), a subsidiary of the Company Sinotrans & CSC Sinotrans & CSC Holdings Co., Ltd. (中國外運長航集團有限公 司), a wholly state-owned enterprise established under the laws of the PRC, a wholly owned subsidiary of China Merchants, and the controlling shareholder of the Company which collectively holds 35.99% of the issued share capital of the Company at the date of this Report SSE Shanghai Stock Exchange SSE Listing Rules Listing Rules of Shanghai Stock Exchange subsidiary(ies) has the meaning ascribed to it under the SEHK Listing Rules Supervisory Committee the Supervisory Committee of the Company 8 SINOTRANS LIMITED Chapter 2 General Information and Key Financial Indicators I. COMPANY INFORMATION Chinese name of the Company 中國外運股份有限公司 Chinese abbreviation of the Company 中國外運 Foreign name of the Company SINOTRANS LIMITED Foreign abbreviation of the Company SINOTRANS Legal representative of the Company Li Guanpeng II. CONTACT PERSONS AND CONTACT METHODS Secretary of the Board/ Company Secretary Representative of Securities Affairs Name Li Shichu Lu Ronglei Address Sinotrans Building Tower B, Building 10, Sinotrans Building Tower B, Building 10, No. 5 Anding Road, Chaoyang District, No. 5 Anding Road, Chaoyang District, Beijing, China Beijing, China Tel. 8610 52295721 8610 52295721 Fax 8610 52296519 8610 52296519 Email [email protected] [email protected] III. BASIC INFORMATION Initial date of registration of the Company 20 November 2002 Registered address of the Company Building A, Sinotrans Plaza, A43 Xizhimen Beidajie, Haidian District, Beijing, China Postcode of the registered address of the Company 100082 Office address of the Company Sinotrans Building Tower B, Building 10, No. 5 Anding Road, Chaoyang District, Beijing, China Postcode of office address of the Company 100029 Company website www.sinotrans.com Email [email protected] IV. INFORMATION DISCLOSURE AND PREPARATION LOCATIONS Name of disclosure newspapers selected China Securities Journal, Securities Daily by the Company Website for publishing the Interim Report www.sse.com.cn designated by CSRC Website for publishing the Interim Report www.hkex.com.hk designated by SEHK Location for Interim Report stock 10/F, Sinotrans Building Tower B, Building 10, No. 5 Anding Road, Chaoyang District, Beijing, China INTERIM REPORT 2020 9 Chapter 2 General Information and Key Financial Indicators V. OVERVIEW OF COMPANY STOCK Class of share Stock exchange Stock abbreviation Stock code H Share SEHK Sinotrans 0598 A Share SSE Sinotrans 601598 VI. OTHER RELEVANT INFORMATION 3Applicable □Not applicable Certified public accountants Name ShineWing Certified Public Accountants LLP engaged by the Company Office address 9/F, Block A, Fuhua Mansion, No. 8 Chaoyangmen North Street, Dongcheng District, Beijing Legal counsel engaged by the Name FenXun Partners Company (As to the PRC Office address Suite 3501, China World Office 2, No.