北京金隅集團股份有限公司 (a joint stock company incorporated in the People’s Republic of China with limited liability) Stock Code : 2009 BBMG C O Tower D, Global Trade Center RP No. 36, North Third Ring Road East Dongcheng District, Beijing, China (100013) ORA www.bbmg.com.cn/listco TI ON 2019 Annual Report For Identication Purposes Only CONTENTS 2 FINANCIAL HIGHLIGHTS 3 CORPORATE INFORMATION 6 CORPORATE PROFILE 10 BIOGRAPHIES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT 22 CHAIRMAN’S STATEMENT 26 MANAGEMENT DISCUSSION & ANALYSIS 80 REPORT OF THE DIRECTORS 96 REPORT OF THE SUPERVISORY BOARD 102 INVESTOR RELATIONS REPORT 106 CORPORATE GOVERNANCE REPORT 140 AUDITORS’ REPORT 147 AUDITED CONSOLIDATED BALANCE SHEET 150 AUDITED CONSOLIDATED INCOME STATEMENT 152 AUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY 156 AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS 158 AUDITED BALANCE SHEET OF THE COMPANY 160 AUDITED INCOME STATEMENT OF THE COMPANY 161 AUDITED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY OF THE COMPANY 163 AUDITED STATEMENT OF CASH FLOWS OF THE COMPANY 165 NOTES TO FINANCIAL STATEMENTS 410 SUPPLEMENTARY INFORMATION 412 FIVE YEARS FINANCIAL SUMMARY 2 BBMG CORPORATION FINANCIAL HIGHLIGHTS 2019 2018 Change Operating revenue (RMB’000) 91,829,311 83,116,733 8,712,578 10.5% Decreased by 0.2 Gross profit margin from principal business (%) 26.5 26.7 percentage point Net profit attributable to the shareholders of the parent company (RMB’000) 3,693,583 3,260,449 433,134 13.3% 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) 3,146,045 2,878,749 267,296 9.3% Basic EPS (RMB) 0.35 0.31 0.04 12.9% Final dividend per share (RMB) 0.120 0.055 0.065 118.2% Cash and bank balances (RMB’000) 21,325,043 18,774,468 2,550,575 13.6% Total assets (RMB’000) 282,123,756 268,276,092 13,847,664 5.2% Equity attributable to the shareholders of the parent company (RMB’000) 61,131,200 57,665,471 3,465,729 6.0% Increased by 0.49 Net profit margin (%) 5.64 5.15 percentage point Increased by 0.07 Return on total assets (%) 1.29 1.22 percentage point Increased by 0.2 Total debt to equity ratio (%) 70.7 70.5 percentage point ANNUAL REPORT 2019 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 Jiang Deyi The Board of Directors Executive Directors Jiang Deyi (Chairman) Wu Dong Zheng Baojin Non-executive Directors Guo Yanming 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 Pei Ying (Chairman) Yu Kaijun Zhang Guoliang Zhuang Zhenguo Jiang Yu Song Lifeng Committees Audit Committee Tian Lihui (Chairman) Wang Guangjin Tang Jun Ngai Wai Fung Guo Yanming Xue Chunlei Remuneration and Wang Guangjin (Chairman) Nomination Committee Wu Dong Tian Lihui Tang Jun Ngai Wai Fung Strategic Committee Jiang Deyi (Chairman) Zheng Baojin 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 2019 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 Beijing Rural Commercial Bank Co., Ltd. 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 the PRC 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 the PRC. 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 41.0 million tonnes and ANNUAL REPORT 2019 7 CORPORATE PROFILE approximately 0.34 million tonnes respectively. Its annual capacity for disposal of various solid wastes was nearly 1.90 million tonnes. The Company will insist to promote market expansion and strategic resources consolidation simultaneously, and has had a total of about 1,640.0 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 Pan Bohai region. Its major products and services include furniture and woods, wall body and insulation materials, decorative and fitting materials, and building materials and commerce and logistics. In 2019, the modern building materials business actively carried out industrial layout centring around the coordinated and high-quality development of Beijing-TianjinHebei, completing the construction of three industrial bases, namely Tangshan Caofeidian Stone Wool, Tangshan Caofeidian Wood Industry, and Tangshan Yutian Prefabricated Parts Base, further enhancing the modern building materials industry chain. The Company’s modern building materials products and construction and installation services were widely used in the construction of key hotspot projects in Beijing, Tianjin and Hebei, such as the sub-town centre and supporting facilities in Beijing, Citizen Service Centre in Xiong’an New District, the Winter Olympic Stadium, and Universal Studios Beijing, fully demonstrating advantages of BBMG’s modern building materials business in brand, quality and industrial chain and enhancing systematic application and coordinated marketing of the product. As long as risks are under control, the Company will continuously enhance the development of commerce and logistics industry and proactively explore developed marketing modes of e-commerce. 8 BBMG CORPORATION CORPORATE PROFILE 3. Property development segment The Company is one of the top property developers in Beijing in terms of overall strength with an annual area commencing construction of 8.0 million sq.m.. The Company has made its presence in 15 cities including Beijing, Shanghai, Tianjin, Chongqing, Hangzhou, Nanjing, Chengdu, Hefei and Qingdao and developed more than 130 property projects with a total gross floor area of approximately 30.0 million sq.m., developing a nationwide business presence “from Beijing to three major economic rims, namely Beijing, Tianjin and Hebei, Yangtze River Delta and Chengdu-Chongqing region”, with a comprehensive development strength covering property projects of multiple categories. As a large state- owned enterprise under Beijing municipality, the Company has been in the leading position in construction of affordable housing in Beijing for years with a total gross floor area of more than 7 million sq.m. of planned and completed affordable housing, providing over 70,000 housing units. Based on continuous consolidation of core business strengths,