CONTENTS Financial Figures 002 Definitions 003 Corporate Information 007 Organisation Structure 009 The Group 010 Shareholder Information 011 Chairman’s Statement 013 Management Discussion and Analysis 016 Directors and Senior Management 038 Corporate Governance Report 047 Report of the Directors 062 Independent Auditor’s Report 084 Consolidated Statement of Profit or Loss 089 Consolidated Statement of Comprehensive Income 090 Consolidated Statement of Financial Position 091 Consolidated Statement of Changes in Equity 093 Consolidated Statement of Cash Flows 095 Notes to the Consolidated Financial Statements 098 Five Years Financial Summary 203 002 SINOTRUK (HONG KONG) LIMITED | ANNUAL REPORT 2020 FINANCIAL FIGURES 2020 2019 Increase/(Decrease) % Operating results (RMB million) Revenue 98,198 62,613 35,585 56.8 Gross profit 19,585 12,219 7,366 60.3 Profit attributable to owners of the Company 6,851 3,474 3,377 97.2 Profitability and Liquidity Gross profit ratio (%) 19.9 19.5 0.4 2.1 Net profit ratio (%) 7.6 6.3 1.3 20.6 Current ratio (time) 1.1 1.3 (0.2) (15.4) Trade receivable turnover (days) 41.9 71.2 (29.3) (41.2) Trade payable turnover (days) 186.1 174.2 11.9 6.8 Sales volume (units) HDTs — Domestic 247,454 129,424 118,030 91.2 — Export (including affiliated export) 30,961 40,009 (9,048) (22.6) Total 278,415 169,433 108,982 64.3 LDTs 181,013 109,280 71,733 65.6 Buses 228 1,187 (959) (80.8) Trucks sold under auto financing services 69,300 34,133 35,167 103.0 Per share data Earnings per share - basic (RMB) 2.48 1.26 1.22 96.8 2020 final dividend per share HKD 1.04 0.39 0.65 166.7 or RMB 0.88 0.36 0.52 144.4 Note: In April 2020, the Group acquired the entire equity interests in Datong Gear from CNHTC. The acquisition of Datong Gear was considered to be a business combination under common control as the Group and Datong Gear are under common control of CNHTC both before and after the acquisition of Datong Gear. Accordingly, the assets and liabilities of Datong Gear should have been accounted for at historical amounts in the consolidated financial statements of the Company as if Datong Gear had always been part of the Group. The comparative figures of the consolidated financial information for the year ended 31 December 2020 have been restated and the above 2019 financial figures have also been restated. SINOTRUK (HONG KONG) LIMITED | ANNUAL REPORT 2020 003 DEFINITIONS In this annual report, the following expressions shall have the following meanings unless the context indicates otherwise: “AGM” the annual general meeting of the Company or any adjournment thereof “Articles” the articles of association of the Company, as amended, supplemented, modified or otherwise adopted from time to time “AsiaInfo Technologies Limited” a company listed on the Main Board of the Stock Exchange (stock code: 01675) “Audit Committee” the audit committee of the Company “Board” the board of Directors “BOCOM International Holdings a company listed on the Main Board of the Stock Exchange (stock code: Company Limited” 03329) “CAAM” China Association of Automobile Manufacturers “China Everbright Limited” a company listed on the Main Board of the Stock Exchange (stock code: 00165) “China” or “PRC” the People’s Republic of China, and for the purpose of this annual report, excludes Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan “CITIC Dameng Holdings Ltd.” a company listed on the Main Board of the Stock Exchange (stock code: 01091) “CNHTC Group” CNHTC and its subsidiaries other than the Group “CNHTC” 中國重型汽車集團有限公司(China National Heavy Duty Truck Group Company Limited), a state-owned enterprise organized under the laws of the PRC with limited liability, being the ultimate holding company of the Company and the controlling shareholder (as defined in the Listing Rules) of the Company “Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) “Company”or “Sinotruk” Sinotruk (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability, and the shares of which are listed on the Main Board of the Stock Exchange “Dali Foods Group Company Limited” a company listed on the Main Board of the Stock Exchange (stock code: 03799) “Datong Gear” 中國重汽集團大同齒輪有限公司 (Sinotruk Datong Gear Co., Ltd.), a company organized under the laws of the PRC with limited liability, being a wholly owned subsidiary of the Company (after the acquisition of its entire equity interest by the Group) “Director(s)” the director(s) of the Company “ED(s)” the executive Director(s) “Euro” the lawful currency of the European Union 004 SINOTRUK (HONG KONG) LIMITED | ANNUAL REPORT 2020 DEFINITIONS “Executive Committee” the executive committee of the Company “FPFPS Group” FPFPS and its subsidiaries including Volkswagen AG and MAN SE “FPFPS” Ferdinand Porsche Familien-Privatstiftung, an Austrian private foundation (Privatstifung) (trust), being the beneficiary owner of 25% of the entired issued share capital of the Company plus 1 Share “GAAP” Generally accepted accounting principles “GDP” gross domestic product “Group” or “We” the Company and its subsidiaries “Hainan Drinda Automotive Trim Co., Ltd.” a company listed on the Shenzhen Stock Exchange (stock code: 002865) “HDT(s)” heavy duty truck(s) and medium-heavy duty truck(s) “HKD” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC “HOWO Bus” 中國重汽集團濟南豪沃客車有限公司 (Sinotruk Ji’nan HOWO Bus Co., Ltd.), a company organized under the laws of the PRC with limited liability, being a wholly owned subsidiary of the Company “INED(s)” the independent non-executive Director(s) “Ji’nan Power Company” 中國重汽集團濟南動力有限公司 (Sinotruk Ji‘nan Power Co., Ltd.), a company organized under the laws of the PRC with limited liability, being a wholly owned subsidiary of the Company “Ji’nan Truck Company” 中國重汽集團濟南卡車股份有限公司 (Sinotruk Ji’nan Truck Co., Ltd.), a joint stock company organized under the laws of the PRC with limited liability, being a non-wholly owned subsidiary of the Company and the shares of which are listed on the Shenzhen Stock Exchange (stock code: 000951) “Jiangxi Copper Company Limited” a company listed on the Main Board of the Stock Exchange (stock code: 00358) and on the Shanghai Stock Exchange (stock code: 600362) “Kingsoft Corporation Limited” a company listed on the Main Board of the Stock Exchange (stock code: 03888) “LDT(s)” light duty truck(s) “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “MAN Group” MAN SE and its subsidiaries “MAN SE” MAN SE, a company incorporated under the laws of Germany with limited liiability, being a non-wholly owned subsidiary of FPFPS and the shares of which are listed on the Frankfurt Stock Exchange in Germany (stock code: ISIN DE0005937007, WKN 593700 and symbol MAN) SINOTRUK (HONG KONG) LIMITED | ANNUAL REPORT 2020 005 DEFINITIONS “Navistar International Corporation” a company listed on New York Stock Exchange (stock code: NAV) “NED(s)” the non-executive Director(s) “PBOC” The People’s Bank of China “Period” the year ended 31 December 2020 “Products Revenue” the revenue of sales of goods and rendering of services by the segments of heavy duty trucks, light duty trucks and buses as well as engines to external customers “Remuneration Committee” the remuneration committee of the Company “RMB” Renminbi, the lawful currency of the PRC “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SG Automotive Group Co., Ltd.” a company listed on the Shanghai Stock Exchange (stock code: 600303) “Shandong Huatai Paper Co., Ltd.” a company listed on the Shanghai Stock Exchange (stock code: 600308) “Shanghai Baolong Automotive a company listed on the Shanghai Stock Exchange (stock code: 603197) Corporation” “Shanghai Stock Exchange” Shanghai Stock Exchange in the PRC “Shantui Construction Machinery a company listed on the Shenzhen Stock Exchange (stock code: 000680) Co., Ltd.” “Share(s)” the ordinary share(s) in the share capital of the Company “Shareholder(s)” holder(s) of the Share(s) from time to time “Shenzhen Stock Exchange” Shenzhen Stock Exchange in the PRC “SHIG” 山東重工集團有限公司 (Shandong Heavy Industry Group Co., Ltd.), a state- owned enterprise organized under the laws of the PRC with limited liability “Silver Grant International Industries a company listed on the Main Board of the Stock Exchange (stock code: Limited” 00171) “Songz Automobile Air Conditioning a company listed on the Shenzhen Stock Exchange (stock code: 002454) Co., Ltd.” “Springland International Limited” a company listed on the Main Board of the Stock Exchange (stock code: 01700) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Strategy and Investment Committee” the strategy and investment committee of the Company 006 SINOTRUK (HONG KONG) LIMITED | ANNUAL REPORT 2020 DEFINITIONS “Subsidiary” a subsidiary for the time being of the Company within the meaning of the Companies Ordinance whether incorporated in Hong Kong or elsewhere and “Subsidiaries” shall be construed accordingly “Sun.King Power Electronics Group a company listed on the Main Board of the Stock Exchange (stock code: Limited” 00580) “TRATON SE” a company incorporated under the laws of Germany with limited liability, being a non-wholly owned subsidiary of FPFPS and the shares of which are listed on the Frankfurt Stock Exchange in Germany and NASDAQ STOCKHOLM (stock code: ISIN DE000TRAT0N7, WKN TRAT0N and symbol 8TRA) “Tsingtao Brewery Company Limited” a company listed on the Shanghai Stock Exchange,