GLORY SUN FINANCIAL GROUP LIMITED GLORY (Incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立的有限公司） (Stock Code 股份代號 : 01282) ANNUAL REPORT 寶新金融集團有限公司 年報 2019 ANNUAL REPORT 2019 年報 年報 http://www.hk1282.com 寶新金融集團有限公司 GLORY SUN FINANCIAL GROUP LIMITED GLORY SUN FINANCIAL GROUP LIMITED / ANNUAL REPORT 2019 CORPORATE PROFILE CORPORATE PROFILE Glory Sun Financial Group Limited (the “Company”) was The Group is one of the leaders in the distribution of established in 2009 and listed on the main board of The automation equipment in the PRC. It maintains a close Stock Exchange of Hong Kong Limited on 15 December relationship and collaboration with key business partners in 2010 (Stock Code: 01282.HK). The Company and its the PRC. It is committed to seizing the opportunities brought subsidiaries (the “Group”) are principally engaged in the by the smart manufacturing transformation under “Made in business of financial services, property investment and China 2025” and the opportunities for 5G market development, automation, securities investment and trading development. of commodities. The Group holds licences to provide comprehensive The Company is a constituent of the MSCI China Small Cap financial services, including securities and futures trading, Index and a number of Hang Seng Family of Indexes, corporate finance, asset management, wealth including Hang Seng Composite Index, Hang Seng management, money lending, and precious metal trading Composite SmallCap Index, Hang Seng Composite MidCap in Hong Kong and the PRC. After years of operations and & SmallCap Index, Hang Seng Composite Industry Index- experience, the Group has become one of the most trusted Conglomerates, Hang Seng Stock Connect Hong Kong partners in wealth management and financial planning in Index, Hang Seng Stock Connect Hong Kong SmallCap Hong Kong. Index, Hang Seng Stock Connect Hong Kong MidCap & SmallCap Index, Hang Seng SCHK Mainland China The Group’s property investment and development Companies Index, Hang Seng SCHK ex-AH Companies segment has been under rapid development and expansion Index. It is also one of the eligible stocks in the Shenzhen- in recent years. It is engaged with a number of property Hong Hong Stock Connect. The inclusion of the Company in projects in Hong Kong and various major cities in the PRC, these indexes reflects the market recognition of its efforts covering projects including residential buildings, commercial over the past few years. apartments, commercial office buildings, technology parks, Adhering to its philosophy of “sustainable development and shopping malls and hotels. It will continue to explore quality giving back to the community,” the Group is committed to property projects in the Greater Bay Area to increase its providing all-rounded quality products and services to land reserves for future development. maximise return for its shareholders, and at the same time contributing to the well-being of the society as a whole. Looking ahead, the Group will rise to the challenges of the formidable business environment and look for local and overseas partners to promote the overall development of the Group. 1 1 GLORY SUN FINANCIAL GROUP LIMITED / ANNUAL REPORT 2019 CONTENTS CORPORATE INFORMATION 3 FINANCIAL HIGHLIGHTS 5 CHAIRMAN’S STATEMENT 8 MANAGEMENT DISCUSSION AND ANALYSIS 18 DIRECTORS AND KEY PERSONNELS 35 REPORT OF THE DIRECTORS 40 CORPORATE GOVERNANCE REPORT 54 INDEPENDENT AUDITOR’S REPORT 65 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 74 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 76 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 78 CONSOLIDATED STATEMENT OF CASH FLOWS 80 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 82 2 2 GLORY SUN FINANCIAL GROUP LIMITED / ANNUAL REPORT 2019 CORPORATE INFORMATION CORPORATE INFORMATION BOARD OF DIRECTORS STRATEGIC COMMITTEE Executive Directors Mr. Yao Jianhui — Chairman Mr. Yao Jianhui — Chairman and Ms. Ye Weiqing (appointed on 30 August 2019) Chief Executive Officer Mr. Lau Wan Po Ms. Ye Weiqing — Co-Chairman Mr. Li Minbin (appointed on 30 August 2019) Professor Lee Kwok On, Matthew Mr. Lau Wan Po — Vice Chairman Mr. Li Minbin COMPANY SECRETARY Mr. Huang Wei Mr. Ho Ka Yiu, Simon Non-Executive Directors AUTHORISED REPRESENTATIVES Mr. Zhang Chi (redesignated on 30 August 2019) Mr. Yao Jianhui Mr. Chen Kaiben (resigned on 30 August 2019) Mr. Ho Ka Yiu, Simon Independent Non-Executive Directors Mr. Wong Chun Bong PRINCIPAL BANKERS China Construction Bank (Asia) Corporation Professor Lee Kwok On, Matthew Limited Mr. Lee Kwan Hung, Eddie Chong Hing Bank Limited United Overseas Bank Limited AUDIT COMMITTEE Mr. Wong Chun Bong — Chairman Mr. Zhang Chi (appointed on 30 August 2019) LEGAL ADVISER Sidley Austin Professor Lee Kwok On, Matthew Mr. Chen Kaiben (resigned on 30 August 2019) AUDITOR NOMINATION COMMITTEE BDO Limited Certified Public Accountants Mr. Yao Jianhui — Chairman Mr. Wong Chun Bong Mr. Lee Kwan Hung, Eddie REGISTERED OFFICE Cricket Square, Hutchins Drive REMUNERATION COMMITTEE P.O. Box 2681, Grand Cayman, KY1-1111 Cayman Islands Professor Lee Kwok On, Matthew — Chairman Mr. Yao Jianhui Mr. Wong Chun Bong HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG INVESTMENT COMMITTEE 18/F., Wing On Centre, 111 Connaught Road Central, Mr. Yao Jianhui — Chairman Hong Kong Ms. Ye Weiqing (appointed on 30 August 2019) Mr. Lau Wan Po Mr. Li Minbin Mr. Huang Wei 3 3 GLORY SUN FINANCIAL GROUP LIMITED / ANNUAL REPORT 2019 CORPORATE INFORMATION PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE IN CAYMAN ISLANDS Royal Bank of Canada Trust Company (Cayman) Limited 4th Floor, Royal Bank House 24 Shedden Road, George Town Grand Cayman KY1-1110 Cayman Islands BRANCH SHARE REGISTRAR AND TRANSFER OFFICE IN HONG KONG Tricor Investor Services Limited Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong LISTING VENUE/STOCK CODE Main Board of The Stock Exchange of Hong Kong Limited/01282 BOARD LOT 4,000 shares COMPANY WEBSITE http://www.hk1282.com 4 4 GLORY SUN FINANCIAL GROUP LIMITED / ANNUAL REPORT 2019 FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS For the year ended 31 December 2019 2018 2017 2016 2015 HK$’million HK$’million HK$’million HK$’million HK$’million (Re-presented) OPERATING RESULTS Revenue (Note 1) 10,887.8 1,483.2 2,825.3 995.6 711.8 Gross profit (Note 1) 1,953.7 511.5 871.3 473.4 264.9 EBITDA (Note 1&2) 1,930.4 922.0 1,099.0 840.2 236.7 EBIT (Note 1&3) 1,851.5 901.2 1,059.2 829.7 205.1 Profit from operations (Note 1) 1,830.8 890.5 1,053.4 818.6 209.9 Profit attributable to owners of the Company 684.3 670.8 869.2 466.6 181.7 As of 31 December 2019 2018 2017 2016 2015 HK$’million HK$’million HK$’million HK$’million HK$’million (Re-presented) FINANCIAL POSITION Total assets 29,439.1 10,781.2 10,961.0 7,005.7 4,332.0 Net assets 10,761.3 6,964.8 7,769.4 5,149.4 4,150.0 Net current assets 4,235.6 1,456.4 3,602.3 2,338.7 3,825.2 KEY STATISTICS Gross profit margin (Note 1) 18% 35% 31% 48% 37% Operating profit margin (Note 1) 17% 60% 37% 82% 29% Net profit margin 9% 46% 32% 66% 26% Return on equity 9% 10% 12% 13% 4% Interest coverage (Note 4) 3.7 11.1 53.3 1,009.4 31.6 Earnings per share (HK cent) — Basic 2.55 2.60 3.90 2.15 2.36 — Diluted 2.55 2.60 3.90 2.15 2.36 Dividend per share (HK cent) – 0.20 0.51 0.32 0.25 Current ratio 1.3 1.4 2.4 2.7 25.3 Notes: 1. The revenue, gross profit, EBITDA, EBIT, profit from operations, gross profit margin and operating profit margin in 2019 and 2018 represent the operating results from continuing operations. 2. EBITDA is calculated at profit before income tax subtracted by finance (costs)/ income — net (excluding adjustment of put option liability in relation to acquisition of subsidiaries) and adding back depreciation of property, plant and equipment, amortisation of intangible assets and amortisation of land use right. 3. EBIT is calculated at profit before income tax subtracted by finance (costs)/income — net (excluding adjustment of put option liability in relation to acquisition of subsidiaries). 4. Interest coverage is calculated at profit before income tax from continuing operations subtracted by finance (costs)/income — net (excluding adjustment of put option liability in relation to acquisition of subsidiaries) and divided by finance cost of the Group. 5 5 GLORY SUN FINANCIAL GROUP LIMITED / ANNUAL REPORT 2019 FINANCIAL HIGHLIGHTS Revenue Revenue (APPROX. HK$10,887.8 MILLION) (APPROX. HK$1,483.2 MILLION) 5,160.4 (47.4%) 597.8 (40.3%) 5,063.1 (46.5%) 706.6 (47.6%) Year 2019 Year 2018 175.4 (1.6%) 488.9 (4.5%) 178.8 (12.1%) Property Investment Trading of Financial Services Automation and others and Development Commodities Revenue Gross Profit (HK$ million) (HK$ million) 1,953.7 10,887.8 871.3 511.5 2,825.3 473.4 1,483.2 264.9 995.6 711.8 (Year) (Year) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 6 7 GLORY SUN FINANCIAL GROUP LIMITED / ANNUAL REPORT 2019 FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS EBITDA Profit Attributable to Owners (HK$ million) of the Company (HK$ million) 1,930.4 869.2 670.8 684.3 1,099.0 922.0 466.6 840.2 181.7 236.7 (Year) (Year) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Total Assets Net Assets (HK$ million) (HK$ million) 29,439.1 10,761.3 7,769.4 6,964.8 5,149.4 10,961.0 10,781.2 4,150.0 7,005.7 4,332.0 (Year) (Year) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 6 7 GLORY SUN FINANCIAL GROUP LIMITED / ANNUAL REPORT 2019 CHAIRMAN’S STATEMENT DEAR SHAREHOLDERS, On behalf of the board (the “Board”) of directors (the “Directors”) of Glory Sun Financial Group Limited (the “Company”), I am pleased to present the results of the Company and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2019.