(a joint stock company incorporated in the People’s Republic of China with limited liability) Stock Code : 2009 Tower D, Global Trade Center No. 36, North Third Ring Road East Dongcheng District, Beijing, China (100013) www.bbmg.com.cn/listco ANNUAL REPORT For Identication Purposes Only CONTENTS 2 FINANCIAL HIGHLIGHTS 3 CORPORATE INFORMATION 6 CORPORATE PROFILE 9 BIOGRAPHIES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT 22 CHAIRMAN’S STATEMENT 26 MANAGEMENT DISCUSSION & ANALYSIS 73 REPORT OF THE DIRECTORS 88 REPORT OF THE SUPERVISORY BOARD 94 INVESTOR RELATIONS REPORT 98 CORPORATE GOVERNANCE REPORT 132 AUDITORS’ REPORT 139 AUDITED CONSOLIDATED BALANCE SHEET 142 AUDITED CONSOLIDATED INCOME STATEMENT 144 AUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY 148 AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS 150 AUDITED BALANCE SHEET OF THE COMPANY 152 AUDITED INCOME STATEMENT OF THE COMPANY 153 AUDITED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY OF THE COMPANY 155 AUDITED STATEMENT OF CASH FLOWS OF THE COMPANY 157 NOTES TO FINANCIAL STATEMENTS 406 SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS 408 FIVE YEARS FINANCIAL SUMMARY 2 BBMG CORPORATION FINANCIAL HIGHLIGHTS 2020 2019 Change Operating revenue (RMB’000) 108,004,884 91,829,311 16,175,573 17.6% Decreased by 6.7 Gross profit margin from principal business (%) 19.8 26.5 percentage points Net profit attributable to the shareholders of the parent company (RMB’000) 2,843,773 3,693,583 -849,810 -23.0% Core net profit attributable to the shareholders of the parent company (excluding the net gains after tax on fair value on investment property) (after tax) (RMB’000) 2,449,535 3,146,045 -696,510 -22.1% Basic EPS (RMB) 0.27 0.35 -0.08 -22.9% Final dividend per share (RMB) 0.06 0.12 -0.06 -50.0% Cash and bank balances (RMB’000) 28,643,886 21,325,043 7,318,843 34.3% Total assets (RMB’000) 291,352,383 282,123,756 9,228,627 3.3% Equity attributable to the shareholders of the parent company (RMB’000) 63,375,937 61,131,200 2,244,737 3.7% Decreased by 0.87 Net profit margin (%) 4.77 5.64 percentage point Decreased by 0.33 Return on total assets (%) 0.98 1.31 percentage point Decreased by 3.1 Total debt to equity ratio (%) 67.6 70.7 percentage points ANNUAL REPORT 2020 3 CORPORATE INFORMATION Chinese name of the Company 北京金隅集團股份有限公司 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 principal place No. 36, North Third Ring East Road of business in the PRC Dongcheng District, Beijing, the PRC Principal place of business in Room 405, Kai Wong Commercial Building, Hong Kong 222 Queen’s Road Central, Hong Kong Website of the Company www.bbmg.com.cn/listco Legal representative Zeng Jin The Board of Directors Executive Directors Zeng Jin (Chairman) Jiang Yingwu (appointed on 19 January 2021) Wu Dong Zheng Baojin Non-executive Directors Wang Zhaojia Xue Chunlei Independent non-executive Directors Wang Guangjin Tian Lihui Tang Jun Ngai Wai Fung * For identification purpose only 4 BBMG CORPORATION CORPORATE INFORMATION The Supervisory Board Supervisors Guo Yanming (Chairman) Yu Kaijun Zhang Guoliang Gao Jinliang Jiang Yu Zhang Qicheng Committees Audit Committee Tian Lihui (Chairman) Wang Guangjin Tang Jun Ngai Wai Fung Wang Zhaojia Xue Chunlei Remuneration and Wang Guangjin (Chairman) Nomination Committee Wu Dong Tian Lihui Tang Jun Ngai Wai Fung Strategic Committee Zeng Jin (Chairman) Jiang Yingwu (appointed on 19 January 2021) Zheng Baojin Wang Guangjin Tian Lihui Tang Jun Ngai Wai Fung Authorised Representatives Zeng Jin Lau Fai Lawrence Board Secretary Zheng Baojin Company Secretary Lau Fai Lawrence ANNUAL REPORT 2020 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 Industrial and Commercial Bank of China Limited Agricultural Bank of China Limited Bank of Beijing Co., Ltd. China Construction Bank Corporation Bank of China Limited Independent Auditor Ernst & Young Hua Ming LLP Certified Public Accountants Legal Advisers Withers As to Hong Kong law Sino-Integrity 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 The Company is the third largest cement industrial group in China with strong scale advantage and market dominance within the region, and is the leader of low-carbon, green, and environmentally-friendly development, energy saving and emission reduction, and circular economy in the cement industry in China. The cement business continued to adopt Beijing, Tianjin and Hebei as its core strategic region, and continued to expand the coverage of its network, mainly with presence in 13 provinces (municipalities and autonomous regions), including Beijing, Tianjin and Hebei Province, Shaanxi, Shanxi, Inner Mongolia, Northeastern region, Chongqing, Shandong, Henan and Hunan. The production capacity of clinker amounted to approximately 110.0 million tonnes; the production capacity of cement amounted to approximately 170.0 million tonnes. With cement as its core product, the Company extends to related products and services through an internal synergetic mechanism. Currently, the production capacity of ready-mixed concrete amounted to approximately 60.0 million cubic meters while the production capacity of aggregates and grinding aids and admixtures amounted to approximately 39.0 million tonnes and approximately 0.24 million tonnes respectively. Its annual capacity for disposal of hazardous ANNUAL REPORT 2020 7 CORPORATE PROFILE wastes and solid wastes was nearly 2.8 million tonnes. The Company will insist to promote market expansion and strategic resources consolidation simultaneously, has had a total of 4,400 million tonnes of limestone reserve across China and has had a total of about 1,700 million tonnes of limestone reserve in Beijing, Tianjin and Hebei. 2. Modern building materials and commerce and logistics segment The Company is the leader in building materials industry in the PRC and one of the largest suppliers of green, environmentally-friendly, and energy-saving building materials in the Beijing-Tianjin and Hebei region. Its major products and services include furniture and woods, wall body and insulation materials, decorative and fitting materials, building materials commerce and trading and whole industry chain including prefabricated building system and parts, decoration and other building materials. In respect of the modern building materials industry, under the lead of science and technology innovation, and based on the BBMG’s technology system for intelligent housing, an industry chain system centering upon “the prefabricated construction, transformation of old urban communities, construction of new country and passive house” was initially established in 2020. The Company’s modern building materials products and construction and installation services were widely used in the construction of key hotspot projects in the Beijing-Tianjin- Hebei region, such as the sub-town centre and supporting facilities in Beijing, Xiong’an New District, the Winter Olympic Stadium, Universal Studios Beijing and epidemic-combating hospitals, which fully demonstrated the advantages of BBMG’s modern building materials business in brand, quality and industrial chain and enhancing systematic application and coordinated marketing of its products. The Company improved the network configuration and asset layout of the supply chain of the commerce and logistics industry, and continuously enhanced the international trading and building materials and commerce and logistics business with the risks under control. 8 BBMG CORPORATION CORPORATE PROFILE 3. Property development segment The Company has committed to property development and construction for over 30 years with a comprehensive development strength covering property projects of multiple categories. It has received various honors such as Top 100 China Real Estate Enterprises for consecutive years and has obtained AAA credit rating. It has great influence and brand awareness across the industry. The Company developed more than 130 property projects with a total gross floor area of approximately 30.0 million sq.m. and a total asset amount of RMB140 billion. The overall strength with an area under construction reached over 8 million. sq.m. during the year. The annual sales revenue was RMB50 billion. As of the end of 2020, the Company has made