北京金隅股份有限公司 (a joint stock company incorporated in the People’s Republic of China with limited liability) Stock Code : 2009 BBMG C O RP ORA TI ON Tower D, Global Trade Center No. 36, North Third Ring Road East Dongcheng District, Beijing, China (100013) www.bbmg.com.cn/listco ANNUAL REPORT 2016 Annual Report For Identication Purposes Only CONTENTS 2 FINANCIAL HIGHLIGHTS 3 CORPORATE INFORMATION 6 CORPORATE PROFILE 8 BIOGRAPHIES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT 16 CHAIRMAN’S STATEMENT 20 MANAGEMENT DISCUSSION & ANALYSIS 72 REPORT OF THE DIRECTORS 86 REPORT OF THE SUPERVISORY BOARD 92 INVESTOR RELATIONS REPORT 96 CORPORATE GOVERNANCE REPORT 124 AUDITORS’ REPORT 131 AUDITED CONSOLIDATED BALANCE SHEET 134 AUDITED CONSOLIDATED INCOME STATEMENT 136 AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 138 AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS 140 AUDITED BALANCE SHEET 142 AUDITED INCOME STATEMENT 143 AUDITED STATEMENT OF CHANGES IN EQUITY 145 AUDITED STATEMENT OF CASH FLOWS 147 NOTES TO FINANCIAL STATEMENTS 386 SUPPLEMENTARY INFORMATION 388 FINANCIAL SUMMARY 2 BBMG CORPORATION FINANCIAL HIGHLIGHTS 2016 2015 Change Operating revenue (RMB’000) 47,738,773 40,925,341 6,813,342 16.6% a decrease of 2.3 Gross profit margin from principal business (%) 23.0 25.3 percentage points Net profit attributable to the shareholders of the parent company (RMB’000) 2,686,654 2,017,454 669,200 33.2% Core net profit attributable to the shareholders of the parent company (excluding the after tax net gains on after tax fair value on investment property) (RMB’000) 2,239,010 1,565,816 673,194 43.0% Basic EPS (RMB) (Note) 0.25 0.20 0.05 25.0% Final dividend per share (RMB) (Note) 0.046 0.015 0.031 206.7% Cash and bank balances (RMB’000) 28,010,211 18,369,881 9,640,330 52.5% Total assets (RMB’000) 208,397,117 130,746,704 77,650,413 59.4% Equity attributable to the shareholders of the parent company (RMB’000) 44,200,489 38,082,973 6,117,516 16.1% an increase of 0.87 Net profit margin (%) 5.64 4.77 percentage point a decrease of 0.25 Return on total assets (%) 1.29 1.54 percentage point an increase of 2.1 Total debt to equity ratio (%) 69.8 67.7 percentage points Net assets value per share attributable to the shareholders of the parent company (RMB) (Note) 4.140 3.567 0.573 16.1% Note: The comparative figures of 2015 have been adjusted for the bonus issue in 2016 ANNUAL REPORT 2016 3 CORPORATE INFORMATION Chinese name of the Company 北京金隅股份有限公司 English name of the Company BBMG Corporation* Headquarters Tower D, Global Trade Center No. 36, North Third Ring East Road Dongcheng District, Beijing 100013, the PRC Registered office and No. 36, North Third Ring East Road principal place of business Dongcheng District, Beijing, the PRC in the PRC Principal place of business Room 405, Kai Wong Commercial Building, in Hong Kong 222 Queen’s Road Central, Hong Kong Website of the Company www.bbmg.com.cn/listco Legal representative Jiang Deyi President of the Company Zeng Jing The Board of Directors Executive Directors Jiang Deyi (Chairman) Wu Dong Zang Feng Independent non-executive Directors Wang Guangjin Tian Lihui Tang Jun Ngai Wai Fung * for identification purposes only 4 BBMG CORPORATION CORPORATE INFORMATION The Supervisory Board Supervisors Wang Xiaojun (Chairman) (resigned on 22 March 2017) Li Bichi (resigned on 22 March 2017) Yu Kaijun Zhang Dengfeng Hu Juan Zhang Yifeng Wang Xin Committees Audit Committee Tian Lihui (Chairman) Wang Guangjin Tang Jun Ngai Wai Fung Remuneration and Wang Guangjin (Chairman) Nomination Committee Wu Dong Zang Feng Tian Lihui Tang Jun Ngai Wai Fung Strategic Committee Jiang Deyi (Chairman) Wang Guangjin Tian Lihui Tang Jun Ngai Wai Fung Authorised Representatives Jiang Deyi Lau Fai Lawrence Board Secretary Zheng Baojin Company Secretary Lau Fai Lawrence ANNUAL REPORT 2016 5 CORPORATE INFORMATION Listing Information A Shares A share registrar China Securities Depository and Clearing Corporation Limited, Shanghai Branch 3rd Floor, China Insurance Building 166 Lujiazui Road East, Pudong New District, Shanghai, the PRC Place of listing Shanghai Stock Exchange Stock name BBMG Board lot 100 shares Stock code 601992.SH H Shares H share registrar Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor, Hopewell Centre 183 Queen’s Road East, Wanchai, Hong Kong Place of listing The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) Stock name BBMG Board lot 1,000 shares Stock code 02009.HK Principal Bankers Agricultural Bank of China Limited Industrial and Commercial Bank of China Limited Bank of Communications Co., Ltd. Bank of Beijing Co., Ltd. China Construction Bank Corporation Independent Auditor Ernst & Young Hua Ming LLP Certified Public Accountants Legal Advisers Paul Hastings As to Hong Kong law Guantao Law Firm As to PRC law 6 BBMG CORPORATION CORPORATE PROFILE BBMG Corporation BBMG Corporation (hereinafter referred to as “BBMG” or the “Company”) was established in December 2005. Fully leveraging on its unique resources, the Company and its subsidiaries (the “Group”) are principally engaged in the manufacture of building materials supplemented by property development and property investment and management, forging an unique, one-stop, vertical industrial chain structure among major building materials manufacturers in the People’s Republic of China (“PRC”). 1. Cement and Ready-mixed Concrete Segment BBMG is the largest cement provider and manufacturer in Beijing, Tianjin and Hebei province as well as one of the major cement conglomerates or groups supported by the PRC government. Its building materials are widely used in key construction projects and key infrastructure constructions of the PRC. Utilizing its technological edge in cement industry, the Company takes one step further in the development of environmental protection industry such as recycling and harmless treatment of industrial wastes, sludges from sewage treatment plants, hazard wastes and fly ashes from garbage incineration, achieving a harmonious development of benefits to economy, society and ecology. 2. Modern Building Materials and Commerce and Logistics Segment BBMG is one of the largest modern, green and energy saving building materials manufacturers in the PRC and one of the leaders in the building materials industry in Pan Bohai Economic Rim. Its business covers four major segments, including furniture and woods, decorative and fitting materials, wall body and insulation materials and refractory materials. The Company has gradually established a unique development mode featuring “park-based production, high-end products, industrial scale merit, integrated sales and refined management”. ANNUAL REPORT 2016 7 CORPORATE PROFILE 3. Property Development Segment BBMG is one of the leading property developers in terms of comprehensive strength and the earliest and one of the largest affordable housing developers in Beijing with presence in other major cities such as Hangzhou, Tianjin, Chongqing, Chengdu, Haikou, Tangshan and Hohhot. 4. Property Investment and Management Segment BBMG is the largest investor and manager of investment properties in Beijing holding approximately 722,200 sq.m. of real estates such as high-end office units and managing approximately 12.0 million sq.m. of properties (including residential communities and commercial units at low floors). The Company has been leading the industry in Beijing and even the PRC for years in areas including specialized techniques, brand awareness, occupancy rate and revenue. The H shares of BBMG was successfully listed on the Main Board of the Hong Kong Stock Exchange on 29 July 2009 and the Company was successfully listed on the domestic A share market of the Shanghai Stock Exchange on 1 March 2011. The dual listing in both markets will lay a more solid and concrete foundation and create a broader platform for the future development of BBMG. Positioned in a new historical starting line with numerous opportunities and challenges, the management of BBMG are determined to build on its century of achievements. In the epic pursuit of forging a top-level public listed company with expanding international presence, the Company will continuously create new values for the shareholders and help BBMG scale new heights! 8 BBMG CORPORATION BIOGRAPHIES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT Directors Jiang Deyi, born in February 1964, is the secretary member of the communist party committee of both the Company and BBMG Group Company Limited (“BBMG Group”). He has been an executive director and the president of the Company since 28 April 2009 (resigned as the president on 5 August 2016) and the chairman of the board of directors (the “Board”) since 1 July 2015. He was a deputy general manager of the Company from March 2006 to April 2009. He is primarily responsible for the overall management of the cement, concrete and resorts businesses of the Company and the formulation of development strategies for these business sectors. Jiang Deyi acted as the deputy chief engineer of the BBMG Group from February 2002 to March 2006. Jiang Deyi has more than 30 years of experience in the cement industry and had served as the general manager of Beijing Liulihe Cement Co., Ltd., and the chairman of Hebei Taihang Cement Co., Ltd. Jiang Deyi graduated from Beijing University of Science and Technology with a Doctorate in Engineering in June 2009. He is a senior engineer. Wu Dong, born in August 1968, has been an executive director of the Company since 27 November 2015 and has been the deputy secretary of the communist party committee of both the Company and the BBMG Group since July 2012. He was the assistant to the secretary of the communist party committee of the Company from July 2011 to July 2012. Before joining the Company, Wu Dong had served in various positions in different entities, including, among others, Beijing Coal Corporation and the Organization Department of Beijing Municipal Communist Party Committee.