Annual Report 2019 2019 中梁控股集團有限公司 Annual Report 2019 年報 Contents

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Annual Report 2019 2019 中梁控股集團有限公司 Annual Report 2019 年報 Contents ZHONGLIANG HOLDINGS GROUP COMPANY LIMITED LIMITED COMPANY GROUP HOLDINGS ZHONGLIANG ZHONGLIANG HOLDINGS GROUP COMPANY LIMITED 中梁控股集團有限公司 中梁控股集團有限公司 (於開曼群島註冊成立之有限公司) (Incorporated in the Cayman Islands with limited liability) (股份代號: 2772) (Stock Code: 2772) 年報 Annual Report 2019 2019 中梁控股集團有限公司 Annual Report 2019 Annual Report 年報 Contents 02 Corporate Profile 03 Corporate Information 05 Major Events of 2019 11 Glossary and Definition 14 Chairman’s Statement 17 Management Discussion and Analysis 50 Biographies of Director and Senior Management 55 Corporate Governance Report 67 Investor Relations Report 70 Directors’ Report 83 Independent Auditor’s Report 89 Consolidated Statements of Profit or Loss 90 Consolidated Statements of Comprehensive Income 91 Consolidated Statements of Financial Position 93 Consolidated Statements of Changes in Equity 94 Consolidated Statements of Cash Flows 96 Notes to Financial Statements 203 Five-Year Financial Summary ZHONGLIANG HOLDINGS GROUP COMPANY LIMITED 2 ANNUAL REPORT 2019 Corporate Profile ABOUT ZHONGLIANG Zhongliang Holdings Group Company Limited was listed on the Main Board of Stock Exchange (Stock Code: 2772.HK) on 16 July 2019, which marked an important milestone in the development of the Company. Zhongliang is principally engaged in real estate development in the PRC, headquartered in Shanghai with a national footprint. The Group strives to develop quality residential properties targeting first-time home purchasers, first-time home upgraders and second-time home upgraders. It is also engaged in the development, operation and management of commercial properties and hold a portion of such commercial properties for investment purpose. The Group adopts a high-asset turnover development model and standardised real estate development process for developing the projects in the second-, third- and fourth-tier cities. The Group has strived to establish the “Zhongliang” brand name nationwide and was ranked as a Top 20 Real Estate Developer in China by China Real Estate Association and E-house China R&D Institute China Real Estate Appraisal Center in 2019. As at 31 December 2019, the Group has achieved a nationwide operating coverage and a strong presence in 142 cities in 23 provinces and municipalities across five strategic economic areas, namely, the Yangtze River Delta, the Midwest China Region, the Pan-Bohai Economic Rim, the Western Taiwan Straits Zone and the Pearl River Delta. As at 31 December 2019, the Group’s subsidiaries, joint ventures and associates had 458 property projects, at various development stages. As at 31 December 2019, the Group’s subsidiaries, joint ventures and associates had a total land bank with GFA of approximately 57.0 million sq.m. Looking forward, Zhongliang will continue its expansion strategies nationwide and strives to become a leading comprehensive real estate developer in China. ZHONGLIANG HOLDINGS GROUP COMPANY LIMITED ANNUAL REPORT 2019 3 Corporate Information BOARD OF DIRECTORS AUDITOR Executive Directors Ernst & Young Certified Public Accountants Mr. Yang Jian (Chairman) 22/F, CITIC Tower Mr. Huang Chunlei (Chief Executive Officer) 1 Tim Mei Avenue Mr. Chen Hongliang Central, Hong Kong (appointed on 23 December 2019) Mr. Li Heli (appointed on 23 December 2019) Mr. Yau Sze Ka (Albert) COMPLIANCE ADVISOR (appointed on 23 December 2019) Mr. Xu Liangqiong (resigned on 23 December 2019) Guotai Junan Capital Limited Mr. Ling Xinyu (resigned on 23 December 2019) Independent non-executive Directors LEGAL ADVISER Mr. Wang Kaiguo Sidley Austin Mr. Wu Xiaobo Mr. Au Yeung Po Fung REGISTERED OFFICE AUDIT COMMITTEE Cayman Corporate Centre 27 Hospital Road, George Town Mr. Au Yeung Po Fung (Chairman) Grand Cayman KY1-9008 Mr. Wang Kaiguo Cayman Islands Mr. Wu Xiaobo HEAD OFFICE IN THE PRC REMUNERATION COMMITTEE 20/F, No.3 Shanghai Convention & Exhibition Center Mr. Wu Xiaobo (Chairman) of International Sourcing Mr. Yang Jian 235 Yunling East Road Mr. Au Yeung Po Fung Putuo District, Shanghai, China NOMINATION COMMITTEE PRINCIPAL PLACE OF BUSINESS IN HONG KONG Mr. Yang Jian (Chairman) Mr. Wang Kaiguo Suite 1506, ICBC Tower Mr. Wu Xiaobo 3 Garden Road, Central Hong Kong COMPANY SECRETARY CAYMAN ISLANDS PRINCIPAL SHARE Mr. Yeung Tak Yip REGISTRAR AND TRANSFER OFFICE Walkers Corporate Limited AUTHORISED REPRESENTATIVES Cayman Corporate Centre 27 Hospital Road, George Town Mr. Yau Sze Ka (Albert) Grand Cayman KY1-9008 (appointed on 23 December 2019) Cayman Islands Mr. Yeung Tak Yip Mr. Xu Liangqiong (resigned on 23 December 2019) ZHONGLIANG HOLDINGS GROUP COMPANY LIMITED 4 ANNUAL REPORT 2019 Corporate Information HONG KONG SHARE REGISTRAR Computershare Hong Kong Investor Services Limited Shops 1712–1716, 17th Floor Hopewell Centre 183 Queen’s Road East, Wanchai Hong Kong PRINCIPAL BANKS China Minsheng Bank Corp., Ltd., Wenzhou Branch Ping An Bank Co., Ltd., Ningbo Branch China Minsheng Bank Corp., Ltd., Ningbo Branch China Minsheng Bank Corp., Ltd., Suzhou Branch Bank of China (Hong Kong) Limited Standard Chartered Bank (Hong Kong) Limited WEBSITE www.zldcgroup.com STOCK CODE 2772 ZHONGLIANG HOLDINGS GROUP COMPANY LIMITED ANNUAL REPORT 2019 5 Major Events of 2019 July On 16 July 2019, Zhongliang was successfully listed on the Stock Exchange (Stock Code: 2772) in Hong Kong, with net fund raised of approximately HK$2.8 billion, marking another key milestone in the development of the Group. Share trading was active on the first trading day, with the highest share price of HK$6.22 and closing price of HK$5.95, up 7.2% from the offer price of HK$5.550. Zhongliang’s market value reached approximately HK$21 billion. The total trading volume of the shares was approximately 62.9 million shares and the total turnover was approximately HK$367 million. In the future, Zhongliang will strive for its best, leveraging the advantages of capital market, to reward the trust of investors with more outstanding achievements, and continue to create greater value for the society. August On 8 August 2019, Zhongliang received issuer credit ratings from three international rating agencies, Fitch, Moody’s and Standard & Poor’s, at B+, B1 and B+ respectively, all with a “stable” outlook. The three rating agencies agreed that Zhongliang had a good sales record in the Yangtze River Delta, which demonstrated its strong sales execution and cash collection ability, as well as good liquidity. Standard & Poor’s expected that in the future, contract sales and revenue of Zhongliang would continue to grow, its financing channels and costs would be improved, and a stable leverage ratio would be maintained. Moody’s believed that there was a strong demand for residential property in the Yangtze River Delta. In 2018, the Company’s contracted sales in the Yangtze River Delta accounted for 59.4% of its total contracted sales. In addition, the liquidity of Zhongliang was in good condition. At the end of 2018, the cash balance was RMB23.1 billion, representing 1.6 times of its short-term debt. Fitch believed that the rating of Zhongliang was based on its contracted sales scale, which was comparable to that of “BB” rating companies. The 353 construction projects in Zhongliang were located in five core economic zones of China, which helped to mitigate the potential regional economic policy risks. Zhongliang won prizes such as ranking the 9th of the Top 100 Private Enterprises on the lists like “2019 Shanghai Top 100 Private Enterprises” released on 19 August 2019, which gave highly recognition for its strength. ZHONGLIANG HOLDINGS GROUP COMPANY LIMITED 6 ANNUAL REPORT 2019 Zhongliang ranked the 280th with an operating income of RMB30.42 billion on the list of the “2019 China Top 500 Private Enterprises” released by All-China Federation of Industry & Commerce on 22 August 2019, which was the first time it entered the list. In addition, it was also on the list of the “China Top 100 Private Service Enterprises” released at the same time, ranking the 78th. On 22 August 2019, Zhongliang announced its 2019 interim results shortly after the completion of its listing, with its contracted sales amount of full coverage reaching RMB63.673 billion, representing an increase of 26.8% over the same period of last year. During the period, it recognised revenue of RMB20.557 billion, representing an increase of 111.2% year-on-year; and core net profit attributable to the owners of the Company of RMB1.232 billion, representing an increase of 88.4% year-on-year. While achieving growth in both revenue and profit, Zhongliang has further optimised its financial structure, and its net gearing ratio has dropped to 43.5%. At the same time, it declared a dividend of HK15.3 cents per share, fulfilling the commitment to pay dividends upon Listing. On 28 August 2019, Mr. Yang Jian, Chairman of Zhongliang, and a group of leaders and representatives of the Zhejiang Chamber of Commerce, Shanghai went to Wenzhou to inspect and exchange ideas with each other, and met with the leaders such as Mr. Chen Weijun, member of the Standing Committee of Zhejiang Provincial Party Committee and Secretary of Wenzhou Municipal Party Committee, and Mr. Yao Gaoyuan, Deputy Secretary of Wenzhou Municipal Committee and Mayor of Wenzhou, as well as Mr. Ge Yiping, Director of the Standing Committee of Wenzhou Municipal People’s Congress, and signed a strategic cooperation agreement for investment promotion. As a company that started and grew up in Wenzhou, Zhongliang has been actively investing in its hometown. Adhering to the spirit of Wenzhou businessmen of “Be Active and Aggressive and Be Grateful and Responsible”, Zhongliang has never forgotten its original intention and has always insisted on thoroughly developing its hometown while making itself bigger and stronger. Currently, it has developed more than 80 projects in Wenzhou, including the benchmark for urban quality “The One of Wenzhou (鹿城壹號)” and the popular project “Majestic Mansion (鹿城中心)”, etc., which has accumulated a good reputation in the market. September On 20 September 2019, Zhongliang completed its first issuance of 11.5% USD offshore bonds that are due 2021, which comprise notes with an aggregate principal amount of US$400 million.
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