ANNUAL REPORT (Incorporated in the Cayman Islands with limited liability) Stock Code: 2608 Contents Corporate Information 2 Honors and Awards 4 Chairman’s Statement 7 Corporate Milestones 12 Financial Summary 13 Management Discussion and Analysis 15 Directors and Senior Management 36 Report of the Directors 44 Corporate Governance Report 71 Independent Auditor’s Report 86 Consolidated Statement of Comprehensive Income 96 Consolidated Statement of Financial Position 98 Consolidated Statement of Changes in Equity 100 Consolidated Cash Flow Statement 101 Notes to the Financial Statements 104 Corporate Information BOARD OF DIRECTORS NOMINATION COMMITTEE Executive Directors Mr. Yi Xiaodi (Chairman) Mr. Gu Yunchang Mr. Yi Xiaodi (Chairman) Mr. Wang Bo Mr. Fan Xiaochong (Vice Chairman) JOINT COMPANY SECRETARIES Non-executive Directors Mr. Tsang Ho Yin Ms. Fan Xiaohua Mr. He Jie Mr. Wang Gongquan Independent Non-executive Directors COMPANY’S WEBSITE Mr. Gu Yunchang www.ss100.com.cn Mr. Ng Fook Ai, Victor Mr. Wang Bo AUTHORISED REPRESENTATIVES AUDIT COMMITTEE Mr. Yi Xiaodi Mr. Tsang Ho Yin Mr. Ng Fook Ai, Victor (Chairman) Mr. Gu Yunchang REGISTERED OFFICE Mr. Wang Bo One Nexus Way, REMUNERATION COMMITTEE Camana Bay, Grand Cayman KY1-9005, Mr. Wang Bo (Chairman) Cayman Islands Mr. Fan Xiaochong Mr. Gu Yunchang 2 Sunshine 100 China Holdings Ltd Corporate Information HEAD OFFICE PRINCIPAL BANKERS 12th Floor, Tower D Agricultural Bank of China No. 2 Guang Hua Road China Everbright Bank Beijing 100026 China Minsheng Bank PRC China Zheshang Bank Hua Xia Bank PRINCIPAL PLACE OF BUSINESS IN HONG KONG HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE 39/F, Gloucester Tower, The Landmark 15 Queen’s Road Central Computershare Hong Kong Investor Services Limited Central Shops 1712–1716, 17th Floor, Hopewell Centre Hong Kong 183 Queen’s Road East Wanchai LEGAL ADVISER Hong Kong Morrison & Foerster PRINCIPAL SHARE REGISTRAR AND 33/F, Edinburgh Tower, The Landmark 15 Queen’s Road Central TRANSFER OFFICE Central Suntera (Cayman) Limited Hong Kong Suite 3204, Unit 2A, Block 3, Building D, AUDITOR P.O. Box 1586, Gardenia Court, Camana Bay, Grand Cayman, KPMG KY1-1100, Cayman Islands Public Interest Entity Auditor registered in accordance with the Financial Reporting LISTING INFORMATION Council Ordinance Place of listing: The Stock Exchange of Hong Kong Limited 8th Floor, Prince’s Building Stock code: 2608 10 Chater Road Central Hong Kong 2020 Annual Report 3 Honors and Awards In March 2020, the Company was awarded the “2020 Best 100 of China Real Estate Developers” and “2020 Best 10 of Cultural Tourism of China Real Estate Developers” by China Real Estate Association and China Real Estate Evaluation Centre of Shanghai E-House Real Estate Research Institute. 2020 Best 100 of China Real Estate Developers 2020 Best 10 of Cultural Tourism of China Real Estate Developers On 13 May 2020, the Company was recognised among the “2020 China Mainland TOP 10 Real Estate Company Listed in Hong Kong by Investment Value” and “2020 Real Estate Company Worth Focusing by Capital Market”by the China Real Estate Top 10 Research Team. 2020 China Mainland TOP 10 Real Estate Company 2020 Real Estate Company Worth Focusing by Listed in Hong Kong by Investment Value Capital Market 4 Sunshine 100 China Holdings Ltd Honors and Awards On 26 May 2020, the Company was awarded the “2020 Best 100 China Real Estate Listed Companies with Strongest Comprehensive Strengths” by China Real Estate Association and China Real Estate Evaluation Centre of Shanghai E-House Real Estate Research Institute, ranking 87th, and was also awarded the “2020 Best 5 China Real Estate Listed Companies with Strongest Innovation Capability”. 2020 Best 100 China Real Estate Listed Companies 2020 Best 5 China Real Estate Listed Companies with Strongest Comprehensive Strengths with Strongest Innovation Capability On 10 September 2020, the Company was awarded the “2020 TOP30 Brand Value of China Real Estate Companies” by the China Real Estate Top 10 Research Team. 2020 TOP30 Brand of China Real Estate Companies 2020 Annual Report 5 Honors and Awards In September 2020, the Company was awarded the “2020 Best 100 of China Real Estate Developers Brand Value” by China Real Estate Association and China Real Estate Evaluation Centre of Shanghai E-House Real Estate Research Institute.” 2020 Best 100 of China Real Estate Developers Brand Value 6 Sunshine 100 China Holdings Ltd Chairman’s Statement Yi Xiaodi Chairman and Executive Director I am pleased to present the business review for the year ended 31 December 2020 (the “Reporting Period”) and outlook to the shareholders of the Company. RESULTS In 2020, the Group suffered a severe decline in the sales of non-residential products under the impact of the novel coronavirus (“COVID-19”) pandemic in the first half of the year; however, it intensified its efforts in sale of the residential products in the second half of the year, and realized contracted sales of RMB10,529.8 million and contracted sales area of 891,247 square meters throughout the year, reaching its annual contracted sales target of more than RMB10 billion. The revenue decreased as compared with 2019, reaching RMB5,759.7 million. The gross profit decreased by 27.2% to RMB1,529.7 million, and the gross profit margin increased slightly by 1.3 percentage point to 26.6%. Moreover, disposal gain decreased during the Reporting Period, and due to the impact of the COVID-19 pandemic, the appreciation upon valuation of fair value of the Group’s investment properties decreased as compared to the previous year, resulting in a decrease in annual profit to RMB1,284.0 million. As the COVID-19 pandemic situation in the PRC is easing, the Company has now recovered from the impact of the COVID-19 pandemic, and resumed normal operation and sale. 2020 Annual Report 7 Chairman’s Statement BUSINESS REVIEW The year 2020 is a year that saw vigorous business transformation of Sunshine 100. In this year, new projects of Himalaya apartments and Commercial Street projects came onto the market, but suffered from the impact of the COVID-19 pandemic, thus the sales of products faced huge challenges and difficulties. As at the end of the year, the product inventory reached to RMB19 billion. At the same time, the real estate financial regulation continued to be strict in this year, thus bringing great pressure to the Company’s capital this year. In response to this serve challenge, the Company put more efforts on promotions on the one hand to ensure the annual contracted sales exceeded RMB10 billion, and took rapid adjustment on the other hand to strengthen the development of existing residential projects, especially the investment in and promotion on two primary development projects in Wenzhou and Xinglong County, in the north of Beijing, thus provided more residential projects for the next year, and improved the proportion of marketable products. Meanwhile, the Company conducted various cooperative financing and successfully passed the repayment peak in 2020. With the land heating up in the Yangtze River Delta, the primary development project reserved by the Company in Wenzhou is becoming mature and its value will be gradually released. In the meantime, the ten thousand mu of land reserved by the Company in Xinglong County will gradually unlock great potential after the opening of Beijing-Shenyang high-speed railway. A large amount of cultural tourism- oriented land reserved by the Company in Chengde, Guilin, Lijiang and other places will gradually enter into the market and release their value after the COVID-19 pandemic slows down. All of these will be the foundation for the Company to get out of the trough and turn around in 2021. 1. Facing the impact of the pandemic, increasing the efforts of sales to ensure the annual contracted sales exceeded RMB10 billion The non-residential products accounted for more than 50% of the Company’s inventory, the sales and rental market of the Himalaya apartments and Commercial Street projects suffered a severe decline under the impact of the COVID-19 pandemic in the first half of the year, and gradually recovered in the second half of the year. In the second half of the year, all colleagues of the Company intensified the promotion efforts, which ensured the annual contracted sales exceeded RMB10 billion. Moreover, the rental income recovered strongly in the second half of the year. 2. Adjusting the supply structure and increasing the proportion of residential properties In response to the market adjustment and achieve better growth in 2020, the Company increased the investment and development in Wenzhou, Xinglong, Xi’an, Guilin, Wuhan and other residential projects in the second half of the year, which achieved the sales recovery in the second half of the year, and also laid a good foundation for better marketable products in the next year. 8 Sunshine 100 China Holdings Ltd Chairman’s Statement 3. Adhering to product upgrading and improving the operational capabilities During the year, the brand influence of the Commercial Street Complex of the Company’s traditional core product, has been continuously strengthened. Since the operation of Changsha Phoenix Street, it had been accredited as a 3A scenic spot with different honors. Liuzhou, Yixing and other commercial streets maintained the leading position of “City Guesthouse”. During the year, the opening of Wuhan and Xinglong commercial streets recorded the expected benefits. The Himalaya apartments in Chongqing, Tianjin and Wuxi were gradually put into operation. The sales revenue has increased significantly, and its brand and price in the local city have achieved the leading position. At present, Club Himalaya has accumulated more than 5,000 members (potential investors). New projects in Weifang and Yueyang will be launched soon and its sound operational capabilities has laid confidence for the expansion of Himalaya.