J&T Global Express Limited - Proxy Solicitation & Information Statement 2026

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in J&T Global Express Limited , you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

This circular appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the shares or other securities of the Company.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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J&T Global Express Limited 極兔速遞環球有限公司

(A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

(Stock Code: 1519)

(1) MAJOR TRANSACTION IN RELATION TO THE PROPOSED SUBSCRIPTION OF H SHARES OF S.F. HOLDING AND THE PROPOSED ISSUANCE OF CLASS B SHARES TO S.F. HOLDING UNDER GENERAL MANDATE; (2) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE ADOPTION OF THE EIGHTH AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

The notice convening the Extraordinary General Meeting of J&T Global Express Limited to be held by way of a virtual meeting through the e-Meeting System on Tuesday, April 21, 2026 at 9:30 a.m. is set out in this circular.

A letter from the Board is set out on pages 9 to 26 of this circular.

Whether or not you are able to attend the Extraordinary General Meeting, please complete and sign the enclosed form of proxy for use at the Extraordinary General Meeting in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the Extraordinary General Meeting (i.e. not later than 9:30 a.m. on Sunday, April 19, 2026) or the adjourned meeting (as the case may be). For the avoidance of doubt and for the purposes of the Listing Rules, holders of treasury shares (if any) shall abstain from voting at the Company’s general meetings. Completion and return of the form of proxy will not preclude shareholders from attending and voting through the e-Meeting System at the Extraordinary General Meeting if they so wish. If you attend and vote at the Extraordinary General Meeting, the authority of your proxy will be revoked.

References to time and dates in this circular are to Hong Kong time and dates.

March 27, 2026

CONTENTS

		Page
Guidance for the Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . .		1
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Letter from	the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
2.	Proposed Subscription of H Shares of S.F. Holding and
	the Proposed Issuance of Class B Shares to S.F. Holding
	under General Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
3.	Proposed Amendments to the Articles of Association . . . . . . . . . . . . .	23
4.	Extraordinary General Meeting and Proxy Arrangement . . . . . . . . . .	23
5.	Voting by Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
6.	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
7.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
8.	Closure of Register of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
9.	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Arrangements for the Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . .		27
Appendix I	– Financial Information of the Group . . . . . . . . . . . . . . . .	I-1
Appendix II – Financial Information and Management Discussion and
	Analysis of the Target Group . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III – Unaudited Pro Forma Financial Information of
	the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
Appendix IV – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .		IV-1
Appendix V – Proposed Amendments to Articles of Association . . . . .		V-1
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		EGM-1

– i –

GUIDANCE FOR THE EXTRAORDINARY GENERAL MEETING

VIRTUAL EXTRAORDINARY GENERAL MEETING

A virtual Extraordinary General Meeting enables the Shareholders to attend the meeting via the e-Meeting System and allows them to attend, participate, submit questions and vote and to view live streaming of the Extraordinary General Meeting.

Shareholders participating in the Extraordinary General Meeting via the e-Meeting System will also be counted towards the quorum. The inability of any Shareholder or his proxy or (in the case of a Shareholder being a corporation) its duly authorised representative to access, or continue to access, such online platform despite adequate electronic facilities having been made available by the Company, shall not affect the validity of the Extraordinary General Meeting or the resolutions passed, or any business conducted at the meeting or any action taken pursuant to such business provided that a quorum is present throughout the meeting.

HOW TO ATTEND AND VOTE

Shareholders who wish to attend the EGM and exercise their voting rights can be achieved in one of the following ways:

(1) attend the Extraordinary General Meeting via the e-Meeting System, which enables live streaming and interactive platform for questions and answers and submission of their votes online; and
(2) appoint the chairman of the Extraordinary General Meeting or other persons as their proxies to vote on their behalf via the e-Meeting System.

Registered Shareholders can refer to the notice of the Extraordinary General Meeting and the online meeting user guide (by scanning the QR code provided on the notification letter, which is expected to be despatched to the registered Shareholders on Monday, March 30, 2026 by post) in relation to attending the Extraordinary General Meeting by electronic means.

Non-registered Shareholders whose Shares are held in the CCASS through bank, stockbroker, custodians or HKSCC (collectively the “ Intermediary ”) should:

(1) contact and instruct their Intermediary that they want to attend the EGM, vote and submit questions online; and
(2) provide their email address to their Intermediary before the time limit required by the relevant Intermediary.

Shareholders should note that only one device is allowed per login. Please keep the login details in safe custody for the EGM and do not disclose them to anyone else. Neither the Company nor its share registrar assumes any obligation or liability whatsoever in connection with the transmission of the login details or any use of the login details for

– 1 –

GUIDANCE FOR THE EXTRAORDINARY GENERAL MEETING

attendance, voting or otherwise. The submission of votes through the e-Meeting System using your login details will be conclusive evidence for the votes cast by you as a Shareholder. The Company, its agents and its share registrar take no responsibility for all or any losses or other consequences caused by or resulting from any unauthorized use of the login details.

If your proxy (except when the chairman of the Extraordinary General Meeting is appointed as proxy) wishes to attend the Extraordinary General Meeting and vote online, you must provide a valid email address of your proxy to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, If no email address is provided, your proxy cannot attend the Extraordinary General Meeting and vote online. The email address so provided will be used by the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, for providing the login details for attending and voting at the Extraordinary General Meeting via the e-Meeting System. If your proxy has not received the login details by email by 5:00 p.m. (Hong Kong time) on Monday, April 20, 2026, you should contact the Company’s branch share registrar as follows:

Tricor Investor Services Limited

17/F, Far East Finance Centre 16 Harcourt Road Hong Kong Telephone: (852) 2980 1333 Facsimile: (852) 2810 8185 Email: [email protected]

For the beneficial owners whose Shares are held through banks, brokers, custodians or the Hong Kong Securities Clearing Company Limited who would like to attend the Extraordinary General Meeting, they should consult directly with their banks or brokers or custodians (as the case may be) for the necessary arrangements. You will be asked to provide your email address which will be used by the Company’s branch share registrar, Tricor Investor Services Limited, for providing the login details for attending the Extraordinary General Meeting electronically in the e-Meeting System.

– 2 –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

“AGM” or “Annual General Meeting”
annual general meeting of the Company held on June 18, 2025
“Announcement(s)”
the announcement(s) each dated January 15, 2026 in relation to each of (i) the Proposed Subscription of H Shares of S.F. Holding and the proposed issuance of Class B Shares to S.F. Holding under the General Mandate; and (ii) the Proposed Amendments to the Articles of Association
“Articles of Association”

the seventh amended and restated articles of association of the Company adopted on October 11, 2023, which became effective on the Listing Date, as amended from time to time

“Auditor”

PricewaterhouseCoopers, the auditor for the time being of the Company

“Board”
the board of Directors
“Business Day”

any day (excluding Saturday, Sunday or public holiday) on which banks in Hong Kong are generally open for business and the Stock Exchange is open for business of dealing securities

“CCASS”

the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited

“Class A Shares”

class A share(s) of the Company with a par value of US$0.000002 each, conferring weighted voting rights in the Company such that a holder of a Class A Share is entitled to 10 votes per share on any resolution subject to a vote at the Company’s general meeting on a poll, save for resolutions with respect to any reserved matters specified in the Articles of Association, in which case each Class A Share and each Class B Share shall entitle its holder to one vote on a poll at a general meeting

– 3 –

DEFINITIONS

“Class B Shares”
“close associate(s)”
“Companies Act”
“Company”
“Competition Authorities”
“Completion”
“Completion Date”
“Consideration Shares”
class B share(s) of the Company with a par value of US$0.000002 each, conferring a holder of a Class B Share one vote per share on any resolution subject to a vote at the Company’s general meeting on a poll
has the same meaning ascribed to it under the Listing Rules
the Companies Act (as revised) of the Cayman Islands
J&T Global Express Limited (極兔速遞環球有限公司), an exempted company incorporated in the Cayman Islands with limited liability on October 24, 2019, the Shares of which are listed on the Main Board of the Stock Exchange
any national, supra-national or regional, state, municipal, government or governmental, quasi-governmental, statutory, regulatory or investigative body, administrative agency, court or tribunal, in any jurisdiction, responsible for the investigation, prosecution or determination of any matters relating to antitrust, competition, mergers, unfair competition, consumer protection, anti-competitive agreements, practices or behaviour or any similar matter
the completion of the Proposed Transactions pursuant to the terms and conditions of the Share Subscription Agreement
the fifteenth (15th) Business Day after the date upon which the last of the Conditions have been satisfied (or waived in accordance with the terms of the Share Subscription Agreement), or at such other time and/or date as the Company and S.F. Holding may agree in writing and in compliance with the Listing Rules
an aggregate of 821,657,973 Class B Shares to be issued by the Company at the Issue Price of HKD10.10 per Class B Share and with an aggregate nominal value of approximately USD1,643.32 for the sole purpose of settling the total consideration for the Proposed Subscription

– 4 –

DEFINITIONS

“Consolidated Affiliated Entities”
“Controlling Shareholder(s)”
“core connected person(s)”
“Director(s)”
“EGM” or “Extraordinary General Meeting”
“e-Meeting System”
“General Mandate”
“Group”
“H Shares of S.F. Holding”
“HK$” or “HKD”
“HKSCC”
“Hong Kong”
the entities the financials of which are consolidated into the Company by virtue of contractual arrangements
has the same meaning ascribed to it under the Listing Rules and unless the context otherwise requires, refers to Mr. Jet Jie Li, Jumping Summit Limited, Topping Summit Limited and Exceeding Summit Holding Limited, which are a group of controlling shareholders of the Company
has the same meaning ascribed to it under the Listing Rules
the director(s) of the Company
extraordinary general meeting of the Company to be held on Tuesday, April 21, 2026 to consider and, if appropriate, to approve the resolutions contained in the notice of the meeting which is set out on pages EGM-1 to EGM-3 of this circular, or any adjournment thereof
the Vistra eVoting Portal at https://evoting.vistra.com/#/519, which is an electronic platform for the Shareholders, proxies and corporate representatives attending the Extraordinary General Meeting via internet the general mandate granted by the Shareholders at the AGM
the Company and its subsidiaries
the overseas listed foreign ordinary shares in share capital of S.F. Holding with a nominal value of RMB1.00 each, which are listed and traded on the Stock Exchange under the stock code 6936
Hong Kong dollars, the lawful currency of Hong Kong
Hong Kong Securities Clearing Company Limited
the Hong Kong Special Administrative Region of the People’s Republic of China

– 5 –

DEFINITIONS

“IASB”

International Accounting Standards Board

“IFRS”
the IFRS Accounting Standards, which as collective term includes all applicable individual International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the IASB
“Intermediary” the bank, stockbroker, custodian, or HKSCC that holds shares in the CCASS on behalf of non-registered Shareholders
“Issue Price” HKD10.10 per Consideration Shares for the Proposed Subscription
“Latest Practicable Date” March 25, 2026, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular
“Listing Date” October 27, 2023, on which the issued Shares were listed on the Stock Exchange and from which dealings in the Shares were permitted to commence on the Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited as amended from time to time
“Long Stop Date”
the date falling on nine months from the date of the Share Subscription Agreement, or such later date as may be agreed between the Company and S.F. Holding in writing
“Model Code”
Model Code for Securities Transactions by Directors of Listed Companies in Appendix C3 to the Listing Rules
“Memorandum of Association”
the seventh amended and restated memorandum of association of the Company adopted on October 11, 2023, which became effective on the Listing Date, as amended from time to time
“PRC”
the People’s Republic of China, but for the purposes of this circular only, excluding Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan

– 6 –

DEFINITIONS

“Proposed Amendments” or the “Proposed Amendments to the Articles of Association”
“Proposed Subscription”
“Proposed Transactions”
“Prospectus”
“Reserved Matters”
“S.F. Holding” or “Target Company”
“S.F. Holding Group”
“SFO”
the proposed amendments to the Articles of Association as detailed in Appendix V to this circular
the proposed subscription by the Company of 225,877,669 H Shares of S.F. Holding pursuant to the terms and conditions of the Share Subscription Agreement
the proposed subscription of 225,877,669 H Shares of S.F. Holding by the Company at the Subscription Price of HK36.74 per H Share of S.F. Holding and the proposed issuance of 821,657,973 Class B Shares at the Issue Price of HKD10.10 per Class B Share to S.F. Holding pursuant to the terms and conditions of the Share Subscription Agreement
the prospectus dated October 16, 2023 issued by the Company in connection with the global offering and listing of its Class B Shares on the Stock Exchange
those matters with respect to which each Class A Share and each Class B Share shall entitle its holder to one vote on a poll at general meetings of the Company pursuant to the Articles of Association, being: (i) any amendment to the Memorandum of Association or the Articles of Association, however framed, including the variation of the rights attached to any class of shares, (ii) the appointment, election or removal of any independent non-executive Director, (iii) the appointment or removal of the Company’s auditor, or (iv) the voluntary liquidation or winding-up of the Company
S.F. Holding Co., Ltd. (順豐控股股份有限公司), a joint stock company incorporated in the PRC with limited liability, whose A shares are listed on Shenzhen Stock Exchange under the stock code 002352 and H Shares are listed on the Stock Exchange under the stock code 6936
S.F. Holding and its subsidiaries
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended from time to time

– 7 –

DEFINITIONS

“Share(s)”
“Shareholder(s)”
“Share Subscription Agreement”
“Stock Exchange”
“Subscription Price”
“Subscription Shares”
“Subsidiary”
“treasury share(s)”
“Undertaking Conditions”
“US$” or “USD”
“WVR” or “weighted voting rights”
“%”
the Class A Shares and/or Class B Shares in the share capital of our Company, as the context so requires
holder(s) of Share(s)
a share subscription agreement entered into between the Company and S.F. Holding on January 15, 2026 in respect of the Proposed Transactions
The Stock Exchange of Hong Kong Limited
HKD36.74 per H Share of S.F. Holding in connection with the Proposed Subscription
an aggregate of 225,877,669 H Shares to be issued by S.F. Holding pursuant to the terms and conditions of the Share Subscription Agreement
a company which is for the time being and from time to time a subsidiary (within the meaning of the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)) of the Company, whether incorporated in Hong Kong or elsewhere
has the meaning ascribed to it under the Listing Rules
the conditions upon which Mr. Jet Jie Li’s undertakings under the Deed of Undertaking are given, being (a) the S.F. Holding remaining in compliance with its lock-up undertaking under the Share Subscription Agreement; (b) S.F. Holding continuing to hold 8% or more of the issued shares of the Company; and (c) S.F. Holding and Company not having a material conflict in developing their business synergies, and making constructive progress on their strategic partnership
United States Dollars, the lawful currency of the United States

has the meaning ascribed to it under the Listing Rules

per cent

– 8 –

LETTER FROM THE BOARD

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J&T Global Express Limited 極兔速遞環球有限公司

(A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

(Stock Code: 1519)

Executive Director:

Mr. Jet Jie Li (Chairman and Chief Executive Officer)

Non-executive Directors:

Ms. Alice Yu-fen Cheng Ms. Qinghua Liao Mr. Yuan Zhang

Independent Non-executive Directors: Mr. Erh Fei Liu Mr. Peng Shen Mr. Peter Lai Hock Meng

Registered Office: 4th floor, Harbour Place 103 South Church Street P.O. Box 10240 Grand Cayman, KY1-1002 Cayman Islands

Principal Place of Business in PRC: Room 1001, Block A, Tower 5 1777 Hualong Road, Huaxinzhen Qingpu District, Shanghai PRC

Principal Place of Business in Hong Kong: 40th Floor, Dah Sing Financial Centre No. 248 Queen’s Road East Wanchai, Hong Kong

March 27, 2026

To the Shareholders

Dear Sir or Madam,

(1) MAJOR TRANSACTION IN RELATION TO THE PROPOSED SUBSCRIPTION OF H SHARES OF S.F. HOLDING AND THE PROPOSED ISSUANCE OF CLASS B SHARES TO S.F. HOLDING UNDER GENERAL MANDATE;

(2) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE ADOPTION OF THE EIGHTH AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

– 9 –

LETTER FROM THE BOARD

1. INTRODUCTION

References are made to the Announcements dated January 15, 2026 in relation to each of (i) the Proposed Subscription of H Shares of S.F. Holding and the proposed issuance of Class B Shares to S.F. Holding under the General Mandate; and (ii) the Proposed Amendments to the Articles of Association. The purpose of this circular is to provide you with further information regarding resolutions to be proposed at the Extraordinary General Meeting relating to (i) the Proposed Subscription of H Shares of S.F. Holding and the proposed issuance of Class B Shares to S.F. Holding under the General Mandate; and (ii) the Proposed Amendments to the Articles of Association.

2. PROPOSED SUBSCRIPTION OF H SHARES OF S.F. HOLDING AND THE PROPOSED ISSUANCE OF CLASS B SHARES TO S.F. HOLDING UNDER GENERAL MANDATE

Reference is made to the Announcement of the Company dated January 15, 2026 in relation to, among others, the Proposed Subscription of H Shares of S.F. Holding and the proposed issuance of Class B Shares to S.F. Holding under the General Mandate.

On January 15, 2026, the Company and S.F. Holding entered into the Share Subscription Agreement, pursuant to which (i) the Company has conditionally agreed to subscribe for, and S.F. Holding has conditionally agreed to issue, 225,877,669 H Shares of S.F. Holding at the Subscription Price of HKD36.74 per H Share of S.F. Holding; and (ii) the Company has conditionally agreed to issue, and S.F. Holding has conditionally agreed to subscribe for 821,657,973 Class B Shares at the Issue Price of HKD10.10 per Class B Share, in each case subject to the terms and conditions set out in the Share Subscription Agreement.

Upon Completion, the Company will hold approximately 4.29% of the issued shares of S.F. Holding as enlarged by the allotment and issue of Subscription Shares, and accordingly, S.F. Holding will not become a subsidiary of the Company and the financial results of S.F. Holding will not be consolidated into the consolidated financial statements of the Company.

The Share Subscription Agreement

Date January 15, 2026 Parties • The Company; and • S.F. Holding

To the best of the Directors’ knowledge, information, and belief, having made all reasonable enquiries, as of the Latest Practicable Date, S.F. Holding and its ultimate beneficial owner are third parties independent of the Company and connected persons of the Company.

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LETTER FROM THE BOARD

Subject matter

Consideration and its basis and the settlement arrangement

Subject to the terms and conditions set out in the Share Subscription Agreement, (i) the Company has conditionally agreed to subscribe for, and S.F. Holding has conditionally agreed to issue, 225,877,669 H Shares of S.F. Holding at the Subscription Price of HKD36.74 per H Share of S.F. Holding; and (ii) the Company has conditionally agreed to issue, and S.F. Holding has conditionally agreed to subscribe for 821,657,973 Class B Shares at the Issue Price of HKD10.10 per Class B Share.

The total amount of the consideration payable by the Company for the Proposed Subscription shall be approximately HKD8,298.75 million, representing a Subscription Price of HKD36.74 per H Share of S.F. Holding. The Company will settle the consideration for the Proposed Subscription by using the proceeds from issue of the Consideration Shares under the General Mandate.

The Consideration Shares of a total of 821,657,973 Class B Shares represent approximately 9.15% of the issued share capital of the Company as of the date of the Announcement, approximately 9.23% of the issued share capital of the Company as of the date of the Latest Practicable Date, and 8.45% of the issued share capital of the Company as enlarged by the allotment and issue of the Consideration Shares (assuming there will be no change in the total number of issued Shares between the Latest Practicable Date and the allotment and issue of the Consideration Shares). Upon Completion, S.F. Holding will hold approximately 10.03% of the issued share capital of the Company, representing approximately 5.28% voting power in the Company. The allotment and issue of the Consideration Shares will not result in a change of control of the Company.

– 11 –

LETTER FROM THE BOARD

The Issue Price of HKD10.10 per Consideration Share represents:

(a) a discount of 13.97% to the closing price of HKD11.740 per Class B Share of the Company as quoted on the Stock Exchange on January 14, 2026, being the last trading day prior to the Share Subscription Agreement; and
(b) a discount of 14.83% to the average closing price of HKD11.858 per Class B Share of the Company as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Share Subscription Agreement.

The total amount of funds raised from the issuance of the Consideration Shares will be approximately HKD8,298.75 million, which shall be used entirely to settle the consideration for the Proposed Subscription pursuant to the terms and conditions of the Share Subscription Agreement.

Each of the number of Subscription Shares and Subscription Price and the number of Consideration Shares and Issue Price was determined with reference to (i) the prevailing market value of the H Shares of S.F. Holding and the corresponding value of the equity interest in S.F. Holding to be acquired by the Company in the Proposed Subscription; (ii) each of the volume weighted average price per Class B Share and H Shares of S.F. Holding as quoted on the Stock Exchange for the last 90 consecutive trading days up to and including January 14, 2026, being the last trading day prior to the Share Subscription Agreement; (iii) the prevailing market price of the Consideration Shares; and (iv) the potential strategic value expected to be brought about from the collaboration between the parties as a result of the transactions contemplated under the Share Subscription Agreement.

– 12 –

LETTER FROM THE BOARD

The Issue Price was arrived at after arm’s length negotiation between the Company and S.F. Holding. While the parties take into account the prevailing market value of the H Shares of S.F. Holding and the market price of the Consideration Shares, the Issue Price is equivalent to the volume weighted average price per Class B Share as quoted on the Stock Exchange for the 90 consecutive trading days up to and including January 14, 2026, being the last trading day prior to the date of the Share Subscription Agreement (the “ 90-day VWAP ”). It is believed that such 90-day VWAP appropriately reflects the relatively stable value of both parties over the given period, and this mechanism can serve to mitigate the potential risks of short-term price volatility during the period immediately prior to the execution of the Share Subscription Agreement and to protect the interests of both parties by ensuring the Issue Price for the Consideration Shares better reflects the prevailing market prices for the Class B Shares over the course of a reasonable period of time. The Issue Price represented a discount to the benchmarked prices as defined in Rule 13.36(5) of the Listing Rules primarily due to the Company’s trading price movement shortly before the signing of the Share Subscription Agreement, which was above its 90-day VWAP. Based on the above and taking into account the foregoing factors of consideration in determining the Issue Price, the Board is of the view that the Issue Price is fair and reasonable and in the interest of the Company and its shareholders as a whole.

The Company will bear its own fees and expenses in connection with its proposed issuance of the Consideration Shares separately, and will not use the proceeds from the issuance of Consideration Shares. Therefore, the net issue price per Consideration Share is equivalent to the Issue Price.

The number of Consideration Shares and the Issue Price were negotiated on an arm’s length basis between the Company and S.F. Holding. The Directors consider that the number of Consideration Shares and the Issue Price are in the interests of the Company and the Shareholders as a whole.

– 13 –

LETTER FROM THE BOARD

The Board considers that the settlement of the consideration of the Proposed Subscription by way of utilizing cash proceeds generated from the issuance of Consideration Shares is fair and reasonable having considered that: (i) this can broaden our Shareholder base. S.F. Holding is the largest integrated logistics service provider in Asia and the fourth largest globally, whose strengths are highly complementary to the Group’s core advantages. S.F. Holding becoming a Shareholder signifies strategic collaboration and positive outlook of both parties on the future business and industry development of the Group; (ii) the Company has thorough cash and capital management and planning. The settlement by way of utilizing cash proceeds generated from the issuance of Consideration Shares allows the Group to preserve cash for its working capital and other expenditure needs. It is believed that, despite the dilutive impact caused by the issuance of the Consideration Shares, the Shareholders may continue to benefit from the strong foundation of trust and potential collaboration between the Group and S.F. Holding Group that enables in-depth cooperation as a result of the mutual equity investment contemplated under the Proposed Transactions.

In determining the proposed settlement of the Consideration by way of utilizing cash proceeds generated from the issue of the Consideration Shares, the Board has considered and evaluated alternative settlement methods, including settlement in cash by internal resources and/or through external financing. Having considered its cash and capital management, it is believed that settling the consideration in cash by internal resources and/or through external financing would reduce the Group’s cash resources and/or increase its debt level, which may in turn hinder its financial flexibility when opportunities arise. The Board also considered that, in accordance with its medium- to long-term strategic planning, the settlement of the consideration for the Proposed Subscription by way of utilizing cash proceeds generated from the issuance of the Consideration Shares represents a more efficient approach to optimising resource allocation and facilitating deeper collaboration between the Group and S.F. Holding Group. In addition, such arrangement helps to mitigate any adverse impact on the Company’s existing free cash flow and demonstrates a prudent and disciplined approach to financial management.

– 14 –

LETTER FROM THE BOARD

To the best of the directors’ knowledge, information and belief having made all reasonable enquiry, there is, and in the past twelve months, there has been, no material loan arrangement between (a) S.F. Holding, any of their directors and legal representatives and/or any ultimate beneficial owner(s) of S.F. Holding who can exert influence on the Proposed Transactions; and (b) the Company, any connected person at the Company’s level and/or any connected person at the subsidiary level (to the extent that such subsidiary/subsidiaries is/are involved in the Proposed Transactions).

Completion

Completion of the Proposed Transactions is conditional upon the following conditions (the “ Condition(s) ”) having been fulfilled or waived on or before the Long Stop Date, among others:

(a) the Listing Committee granting to S.F. Holding listing of and permission to deal in the Subscription Shares and such listing and permission not being subsequently revoked prior to the delivery or deposit of the definitive certificates in respect of the Subscription Shares subject to the terms of the Share Subscription Agreement;
(b) the Listing Committee granting to the Company listing of and permission to deal in the Consideration Shares and such listing and permission not being subsequently revoked prior to the delivery or deposit of the definitive certificates in respect of the Consideration Shares subject to the terms of the Share Subscription Agreement;
(c) all necessary approvals, consents and authorisations from the Shareholders for the Share Subscription Agreement and the transactions contemplated thereunder, including the Subscription, having been obtained and remaining in full force and effect;

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LETTER FROM THE BOARD

(d) where necessary under the relevant laws and regulations of the PRC, the PRC outbound investment filing with the competent development and reform commission of the PRC and the competent commerce department of the PRC, and the foreign exchange registration, foreign exchange conversion and cross-border remittance with and by the competent bank authorized by the State Administration of Foreign Exchange of the PRC, in respect of the Consideration Shares, being completed;
(e) merger control clearance in respect of the Subscription Shares and the Consideration Shares having been obtained from the relevant Competition Authorities;
(f) the representations and warranties made by each of the Company and S.F. Holding pursuant to the Share Subscription Agreement being true and accurate and not misleading as of the date of the Share Subscription Agreement and the Completion Date.

The completion of the issuance of the Subscription Shares by S.F. Holding and the completion of issuance of the Consideration Shares by the Company shall be inter-conditional. Subject to the terms of the Share Subscription Agreement, neither issuance of the Subscription Shares by S.F. Holding nor the issuance of the Consideration Shares by the Company shall be completed unless they are completed simultaneously and in accordance with the terms of the Share Subscription Agreement on the Completion Date.

As of the Latest Practicable Date, save for Condition (f), none of the Conditions had been satisfied. The Company does not currently have any intention to waive any of the Conditions.

It is currently expected that the Proposed Transactions will be completed by June 30, 2026.

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LETTER FROM THE BOARD

Lock-up arrangement

Pursuant to the terms of the Share Subscription Agreement, and save for (i) any charge, pledge or creation of encumbrances over the Subscription Shares (in the case of the Company) or Consideration Shares and existing Class B Shares held by S.F. Holding as at the date of the Share Subscription Agreement (collectively, “ Aggregate S.F. Holding Shares ”) (in the case of S.F. Holding); or (ii) any deposit or withdrawal of the Subscription Shares (in the case of the Company) or Aggregate S.F. Holding Shares (in the case of S.F. Holding) with CCASS without resulting in a change in beneficial ownership, each of the Company and S.F. Holding irrevocably and unconditionally undertakes that, for a period of five years after the Completion Date, without the prior written consent of the other party, each of the Company and S.F. Holding shall not directly or indirectly (i) offer, sell, contract to sell, grant any option over, make any short sale or otherwise dispose of any of the Subscription Shares (in the case of the Company) or the Aggregate S.F. Holding Shares (in the case of S.F. Holding); (ii) enter into any swap or similar agreement that transfers, in whole or in part, the economic risk of ownership of such Subscription Shares (in the case of the Company) or the Aggregate S.F. Holding Shares (in the case of S.F. Holding); or (iii) publicly announce an intention to effect any such transaction described in (i) or (ii) above.

Application for Listing

The Company will make an application to the Stock Exchange for the grant of the listing of, and permission to deal in, the Consideration Shares. All necessary arrangements will be made for the Consideration Shares to be admitted into CCASS.

Ranking of Consideration Shares

The Consideration Shares, when fully paid, allotted, and issued, will rank pari passu in all respects among themselves and with the Shares in issue on the date of allotment and issue of the Consideration Shares.

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LETTER FROM THE BOARD

General Mandate

The Consideration Shares will be allotted and issued under the General Mandate granted to the Directors by resolution of the Shareholders passed at the AGM, subject to the limit up to 20% of the total number of issued Shares as at the date of the AGM. Under the General Mandate, the Company was authorised to issue up to 1,779,302,573 new Shares. References are made to the announcements dated January 23, 2026 and February 5, 2026 (the “ CB Announcements ”). Bolt Innovation Limited, a wholly owned subsidiary of the Company, issued the zero coupon guaranteed convertible bonds due 2033 (the “ 2026 Convertible Bonds ”) in an aggregate principal amount of HK$4,650 million. Assuming full conversion of the 2026 Convertible Bonds at its initial conversion price, the 2026 Convertible Bonds will be convertible into a maximum of 319,587,629 new Class B Shares, which will be issued under the General Mandate. As at the Latest Practicable Date, no 2026 Convertible Bond has been converted into new Class B Shares under the General Mandate.

Accordingly, as at the Latest Practicable Date, the remaining number of Shares available for issue under the General Mandate is 1,459,714,944, being the initial 1,779,302,573 Shares granted under the General Mandate less the 319,587,629 Class B Shares reserved for the 2026 Convertible Bonds. Accordingly, the allotment and issue of the Consideration Shares is not subject to separate Shareholders’ approval.

EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY

For illustrative purposes only, assuming that there is no other change in the issued share capital of the Company from the Latest Practicable Date up to the Completion Date, the shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) upon Completion are set out below:

Name of Shareholder Mr. Jet Jie Li and his associates Ms. Alice Yu-fen Cheng and her associates Mr. Yuan Zhang and his associates S.F. Holding Group Treasury shares Other public Shareholders Total	As at the Latest Practicable Date Number of Shares % 979,333,410 11.01% 40,008,020 0.45% 349,702,854 3.93% 153,534,190 1.73% 3,826,000 0.04% 7,371,520,831 82.85% 8,897,925,305 100.00%	Immediately upon Completion Number of Shares % 979,333,410 10.08% 40,008,020 0.41% 349,702,854 3.60% 975,192,163 10.03% 3,826,000 0.04% 7,371,520,831 75.84% 9,719,583,278 100.00%	Immediately upon Completion Number of Shares % 979,333,410 10.08% 40,008,020 0.41% 349,702,854 3.60% 975,192,163 10.03% 3,826,000 0.04% 7,371,520,831 75.84% 9,719,583,278 100.00%
			100.00%

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LETTER FROM THE BOARD

EQUITY FUND RAISING ACTIVITY OF THE COMPANY IN THE PAST 12 MONTHS

On February 5, 2026, Bolt Innovation Limited, a wholly owned subsidiary of the Company, issued the zero coupon guaranteed convertible bonds due 2033 (the “ 2026 Convertible Bonds ”). The 2026 Convertible Bonds are in an aggregate principal amount of HK$4,650 million and have been offered and sold by the managers to no less than six (6) independent placees (who are independent individual, corporate and/or institutional investors). The gross proceeds from the issue of the 2026 Convertible Bonds are HK$4,650 million, and the net proceeds to the Company from the Bond Issue are approximately HK$4,596 million (the “ Net Proceeds ”). In the next three to five years, the Company intends to use the Net Proceeds from the Bond Issue to further develop the Group’s overseas business and technology advancement, optimize the Group’s capital structure including share repurchase, and for general corporate purposes. The Net Proceeds are expected to be fully utilized by the end of 2031. For details of the use of the Net Proceeds, please refer to the announcement dated February 5, 2026. As at the Latest Practicable Date, the Company has not use any of the Net Proceeds.

The Company has not carried out any equity fund raising activities in the past 12 months immediately before the Latest Practicable Date.

INFORMATION OF THE PARTIES

The Company

The Company is an exempted company with limited liability incorporated in Cayman Islands. As at the Latest Practicable Date, Mr. Jet Jie Li (who is the controlling shareholder, executive Director, chairman of the Board and the chief executive officer of the Company) controls approximately 55.12% of the total voting rights in the Company through Shares beneficially owned by him. Upon the Completion and assuming that there is no other change in the issued share capital of the Company from the the Latest Practicable Date up to the Completion Date, Mr. Jet Jie Li will control approximately 52.66% of the total voting rights in the Company through Shares beneficially owned by him. The Group is a global logistics service provider with leading express delivery business in Southeast Asia and other emerging markets.

S.F. Holding

S.F. Holding is a joint stock company incorporated in the PRC with limited liability, whose A shares and H Shares of which are listed on the Shenzhen Stock Exchange (stock code: 002352) and the Stock Exchange (stock code: 6936), respectively. S.F. Holding Group is the largest integrated logistics service provider in China and Asia and the fourth largest globally. S.F. Holding Group is principally engaged in the development of logistics ecosystem including express delivery, freight delivery, cold chain and pharmaceutical logistics, intra-city on demand delivery, as well as supply chain and international services (including international express services, international cargo and freight forwarding services, and supply chain services).

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LETTER FROM THE BOARD

Financial Information of S.F. Holding

Set out below is the extract of the audited consolidated financial information of S.F. Holding for the two years ended December 31, 2023 and 2024 and the unaudited consolidated financial information of S.F. Holding for the six months ended June 30, 2025:

				For the six
				months
		For the year ended		ended
		December 31,		June 30,
		2023	2024	2025
		RMB	RMB	RMB
		(million)	(million)	(million)
		(Audited)		(Unaudited)
Profit	before income tax	10,486.51	13,607.26	7,639.73
Profit	after income tax	7,911.61	10,218.85	6,012.40

As at June 30, 2025, according to the interim report of S.F. Holding, the total assets and net assets of S.F. Holding Group were approximately RMB218,236.50 million and RMB106,165.24 million, respectively.

Further financial information of S.F. Holding is set forth in Appendix II to this circular.

DEED OF UNDERTAKING

In connection with the proposed issuance of the Consideration Shares, on January 15, 2026 (being the date of the Share Subscription Agreement), S.F. Holding and Mr. Jet Jie Li (being a Director and the controlling shareholder of the Company) entered into a deed of undertaking (the “ Deed of Undertaking ”), pursuant to which, among other things, Mr. Jet Jie Li has undertaken to S.F. Holding that, subject to the Completion, the Undertaking Conditions and subject to his fiduciary duties pursuant to applicable laws and regulations, he shall nominate and exercise his voting rights (at the Board level and/or the Shareholder level, as may be applicable) in favour of the appointment and ongoing re-election of any person nominated by S.F. Holding.

REASONS FOR AND BENEFITS OF THE PROPOSED TRANSACTIONS

The Group is a global logistics service provider that has achieved rapid growth across multiple countries. In addition to having established scale in the China market, the Group has accumulated deep localised operational experience and a solid network foundation in Southeast Asia, one of the world’s fastest-growing regions. Furthermore, the Group has actively expanded its express delivery business into emerging markets by replicating its successful experience in

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LETTER FROM THE BOARD

multiple countries. These markets are precisely where the demand for outbound supply chain and cross-border e-commerce logistics from China is experiencing rapid growth.

S.F. Holding is the largest integrated logistics service provider in Asia and the fourth largest globally, ranking 393rd on the Fortune Global 500 list. S.F. Holding offers customers comprehensive, end-to-end domestic and international logistics solutions. S.F. Holding boasts an extensive global service network, with its business covering approximately 200 countries and regions, holding industry-leading positions in multiple logistics segments. S.F. Holding harnesses technology to empower customers in building secure and efficient smart supply chains, with the vision of becoming the well-respected and the world’s leading digital intelligence logistics solution provider.

The Proposed Transactions are of significant strategic importance to the Group. Through the mutual equity investment, the Group and S.F. Holding Group will establish a strong foundation of trust that enables in-depth cooperation, expanding the Group’s service and network coverage to the benefit of the Group’s customers. With regard to international business, the Group has established a strong last-mile delivery network and accumulated localised operational experience in the overseas markets. Leveraging S.F. Holding Group’s core resources and mature operational capability in first-mile and cross-border line haul, the Group is well positioned to further expand the network coverage and promote the expansion of service stations and parcel lockers into the overseas market, thereby providing customers with more reliable and one-stop services and enhancing the overall competitiveness of its end to-end cross-border logistics solutions. In addition, the parties may further collaborate to leverage on their respective distribution networks and warehousing resources to better improve inventory efficiency and delivery timeliness. With regard to China domestic business, the Group and S.F. Holding Group have highly complementary strengths in network resources, differentiated product offerings, and customer bases, which will help both sides expand service boundaries, enhance network coverage and raise operational efficiency. The Company believes that the mutual equity investment contemplated under the Proposed Transactions, founded upon mutual trust, represents a long-term strategic commitment by both parties, through which it is expected the Group and S.F. Holding Group will be able to have deeper collaboration and complement each other’s capabilities. Overall, this collaboration is highly aligned with the Group’s strategic direction, and will provide strong support for the Group’s effort to enhance its comprehensive competitiveness in the global logistics markets.

As of the Latest Practicable Date, the Company did not have any plan or intention or has entered into any formal or informal agreement, arrangement, understanding or negotiation (whether express or implied) in relation to the acquisition of new businesses or downsizing or disposal of its existing businesses.

The terms of the Share Subscription Agreement are negotiated on an arm’s length basis, are on normal commercial terms, and are fair and reasonable. Accordingly, the Board considers that entering into the Share Subscription

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LETTER FROM THE BOARD

Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratios (as defined under the Listing Rules) in respect of the Proposed Subscription exceeds 25% but less than 100%, the Proposed Subscription constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement, circular and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

FINANCIAL IMPACTS OF THE PROPOSED TRANSACTIONS ON THE GROUP

Upon Completion of the Proposed Transaction, S.F. Holding will not become a subsidiary of the Company and the financial results of S.F. Holding will not be consolidated into the consolidated financial statements of the Group. It is assumed that the H Shares of S.F. Holding to be subscribed by the Company pursuant to the Share Subscription Agreement would be recognised by the Group as financial assets at fair value through other comprehensive income.

As for assets and liabilities of the Group, the financial assets at fair value through other comprehensive income will increase by approximately USD 1,057.26 million while share capital at nominal by approximately USD1,643.32 and share premium by approximately USD 1,057.29 million , assuming the issue of 821,657,973 Class B Shares of the Company at the Issue Price of HKD10.10 (equivalent to approximately USD1.28674) per Class B Share of the Company as the Consideration Shares for the Proposed Subscription as of June 30, 2025.

FINANCIAL INFORMATION OF S.F. HOLDING

The Company has included the following information in Appendix II to this circular to provide the financial information of S.F Holding:

(1) the annual audited consolidated financial statements of the S.F. Holding for the three years ended December 31, 2023 and the related management discussion and analysis as disclosed in the prospectus of S.F. Holding (pages 362 to 427 and I-4 to I-116 in Appendix I to the prospectus of S.F. Holding);

https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1119/2024111900011.pdf

(2) the annual audited consolidated financial statements of S.F. Holding for the year ended December 31, 2024 and the related management discussion and analysis as disclosed in the 2024 annual report of S.F. Holding for the same year (pages 16 to 52 and 84 to 184 in the 2024 annual report of S.F. Holding);

https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0407/2025040701400.pdf

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LETTER FROM THE BOARD

(3) the unaudited consolidated financial information of S.F. Holding for the nine months ended September 30, 2025 and the related management discussion and analysis as extracted from the third quarterly report of S.F. Holding for 2025 (pages 6 to 11 and 22 to 30 in 2025 third quarterly report of S.F. Holding.

https://www1.hkexnews.hk/listedco/listconews/sehk/2025/1030/2025103001661.pdf

3. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Reference is made to the Announcement of the Company dated January 15, 2026 in relation to, among others, the Proposed Amendments to the Articles of Association.

The Board is pleased to propose (a) to make certain amendments to the seventh amended and restated memorandum and articles of association of the Company for the purpose of, among others, (i) reflect and align with the latest regulatory requirements, including the relevant requirements of the Listing Rules in connection with hybrid meetings, electronic voting requirements and duties and composition of nomination committee; (ii) approval procedures on the issuance of shares without voting rights; (iii) power to repurchase shares; (iv) approval procedures for making provision for the allotment and issue of shares, changing denomination of share capital and reduction of share premium account by the Company; and (v) make certain other housekeeping changes; and (b) to adopt the eighth amended and restated memorandum and articles of association of the Company incorporating and consolidating all the Proposed Amendments.

Details of the Proposed Amendments are set out in Appendix V to this circular. The Proposed Amendments to the Articles of Association and the adoption of the new Articles of Association are subject to approval by the Shareholders by way of a special resolution at the EGM and will be effective upon the approval by the Shareholders at the EGM.

The Company has been respectively advised by its Hong Kong legal advisers that the Proposed Amendments conform to the requirements of Appendix A1 to the Listing Rules, and by its Cayman Islands legal advisers that the Proposed Amendments do not contravene the laws of the Cayman Islands. The Company also confirms that there is nothing unusual about the proposed amendments to the Articles of Association for a company listed on the Stock Exchange.

4. EXTRAORDINARY GENERAL MEETING AND PROXY ARRANGEMENT

The Company will convene the Extraordinary General Meeting by way of a virtual meeting through the e-Meeting System on Tuesday, April 21, 2026 at 9:30 a.m. at which resolutions will be proposed for the purpose of considering and if thought fit, approving the resolution proposed in the notice of the Extraordinary General Meeting as set out on pages EGM-1 to EGM-3 of this circular.

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LETTER FROM THE BOARD

A form of proxy for use at the Extraordinary General Meeting is enclosed with this circular. Such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.jtexpress.com). Whether or not you intend to attend and vote at the Extraordinary General Meeting through the e-Meeting System, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the Extraordinary General Meeting (i.e. not later than 9:30 a.m. on Sunday, April 19, 2026). Completion and return of the form of proxy will not preclude you from attending and voting through the e-Meeting System at the Extraordinary General Meeting or any adjournment thereof. If you attend and vote at the Extraordinary General Meeting, the authority of your proxy will be revoked.

The Board confirm that to the best of their knowledge, information and belief having made all reasonable enquiries, as at the Latest Practicable Date, there was no voting trust or other agreement or arrangement or understanding (other than an outright sale) entered into by or binding upon any Shareholder and there was no obligation or entitlement of any Shareholder whereby he or she has or may have temporarily or permanently passed control over the exercise of the voting right in respect of his Shares to a third party, either generally or on a case-by-case basis.

The Board confirms that to the best of their knowledge, information and belief of the Directors, as at the Latest Practicable Date, there was no discrepancy between any beneficial shareholding interest in the Company as disclosed in this circular and the number of Shares in the Company in respect of which each of them will control or will be entitled to exercise control over the voting right at the Extraordinary General Meeting.

5. VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules and Article 82 of the Articles of Association, all the resolutions set out in the notice of Extraordinary General Meeting will be voted by poll except where the chairman of the Extraordinary General Meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, each of the resolutions put to vote at the Extraordinary General Meeting will be taken by way of poll. An announcement on the poll results will be published by the Company after the Extraordinary General Meeting in the manner prescribed under Rule 13.39(5) of the Listing Rules.

The Company is controlled through weighted voting rights. On each resolution subject to a vote at general meetings on a poll, holders of Class B Shares present in person through the e-Meeting System (in the case of a member being a corporation, by its duly authorized representative) or by proxy shall have one vote per Share, and holders of Class A Shares present in person through the e-Meeting System (in the case of a member being a corporation, by its duly authorized representative) or by proxy shall have ten votes per Share (i.e. resolution item 1 in the notice of the EGM), save for resolutions with respect to any Reserved Matters, in which case each Class A Share and each Class B Share shall entitle its holder Proposed Amendments to one vote on a poll at a general meeting (i.e.

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LETTER FROM THE BOARD

resolution item 2 regarding the which is the Reserved Matters, in the notice of the EGM). Holders of Class B Shares and Class A Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Shareholders. For the avoidance of doubt and for the purposes of the Listing Rules, holders of treasury shares (if any) shall abstain from voting on matters that require Shareholders’ approval at the Company’s general meetings. As at the Latest Practicable Date, there were 3,826,000 Class B treasury Shares. Holders of Class B treasury Shares shall abstain from voting on matters that require shareholders’ approval at the EGM.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries as at the Latest Practicable Date, no Shareholder had a material interest and had to abstain from voting on the resolutions in relation to the Share Subscription Agreement and the Proposed Transactions contemplated thereunder at the Extraordinary General Meeting.

6. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there is no omission of other matters the omission of which would make any statement herein or this document misleading.

7. RECOMMENDATION

The Directors consider that the ordinary resolution for the Proposed Transactions and the special resolution for the Proposed Amendments to the Articles of Association are fair and reasonable and in the best interests of the Company as well as its Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of all the resolutions to be proposed at the Extraordinary General Meeting as set out in the notice of the Extraordinary General Meeting as set out on pages EGM-1 to EGM-3 of this circular.

8. CLOSURE OF REGISTER OF MEMBERS

For determining the entitlement to attend and vote at the Extraordinary General Meeting, the register of members of the Company will be closed from Thursday, April 16, 2026 to Tuesday, April 21, 2026, both days inclusive, during which period no transfer of Shares will be registered. The record date for the Extraordinary General Meeting will be April 21, 2026. In order to be eligible to attend and vote at the Extraordinary General Meeting, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration no later than 4:30 p.m. on Wednesday, April 15, 2026.

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LETTER FROM THE BOARD

Shareholders of the Company whose names appear on the register of members on Tuesday, April 21, 2026 are entitled to attend and vote at the Extraordinary General Meeting or any adjourned meetings.

9. GENERAL

Your attention is also drawn to the additional information set out in the appendices to this circular. The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

Yours faithfully, By order of the Board J&T Global Express Limited Mr. Jet Jie Li

Executive Director, Chairman of the Board and Chief Executive Officer

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ARRANGEMENTS FOR THE EXTRAORDINARY GENERAL MEETING

I. INTRODUCTION

The EGM will be held by way of a virtual meeting, whereby shareholders of the Company can attend the EGM through online access by visiting the e-Meeting System.

II. ATTENDING THE EGM BY MEANS OF ELECTRONIC FACILITIES

The Company will conduct a virtual Extraordinary General Meeting using the e-Meeting System which allows the shareholders of the Company to participate the Extraordinary General Meeting online in a convenient and efficient way from anywhere with an internet connection. Shareholders will be able to view the live video broadcast of the Extraordinary General Meeting and participate in voting and submit questions online via their mobile phones, tablets or computers.

Non-registered Shareholders whose Shares are held in the CCASS through the Intermediary should:

i. contact and instruct their Intermediary that they want to attend the EGM, vote and submit questions online; and
ii. provide their email address to their Intermediary before the time limit required by the relevant Intermediary.

The e-Meeting System permits a “split vote” on a resolution, in other words, a Shareholder casting his/her/its votes through the e-Meeting System does not have to vote all of his/her/its Shares in the same way (i.e. “For” or “Against”). In the case of a proxy/corporate representative, he/she can vote such number of Shares in respect of which he/she has been appointed as a proxy/corporate representative. Votes cast through the e-Meeting System are irrevocable once the votes have been casted. The e-Meeting System will be opened for registered Shareholders and non-registered Shareholders (see below for login details and arrangements) to log in approximately 30 minutes prior to the commencement of the EGM and can be accessed from any location with internet connection by a mobile phone, tablet or computer device. Shareholders should allow ample time to check into the e-Meeting System to complete the related procedures.

1. Login Details for Registered Shareholders

Registered Shareholders will be able to attend the EGM, vote and submit questions online through the e-Meeting System. Each registered Shareholder’s personalised username and password will be sent to him/her/it under separate notification letter sent together with this circular.

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ARRANGEMENTS FOR THE EXTRAORDINARY GENERAL MEETING

2. Login Details for Non-registered Shareholders

Non-registered Shareholders whose Shares are held in the CCASS through the Intermediary will also be able to attend the EGM, vote and submit questions online through the e-Meeting System. In this regard, they should:

(i) contact and instruct their Intermediary that they want to attend the EGM, vote and submit questions online; and
(ii) provide their email address to their Intermediary before the time limit required by the relevant Intermediary.

Details regarding the EGM arrangements including login details to access the e-Meeting System will be sent by the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, to the email address of the non-registered Shareholders provided by the Intermediary. Without the login details, non-registered Shareholders will not be able to attend the EGM, vote and submit questions online using the e-Meeting System. Non-registered Shareholders should therefore give clear and specific instructions to their Intermediary in respect of both (i) and (ii) above.

3. Login Details for Proxies or Corporate Representatives

Registered and non-registered Shareholders should note that only one device is allowed in respect of each set of login details. Please also keep the login details in safe custody for use at the EGM and do not disclose them to anyone else. Neither the Company nor its agents assume any obligation or liability whatsoever in connection with the transmission of the login details or any use of the login details.

III. QUESTIONS AT AND PRIOR TO THE EGM

Shareholders attending the EGM using the e-Meeting System will be able to submit questions relevant to the proposed resolution(s) online during the EGM. Shareholders can also send their questions by email from Monday, March 30, 2026 (9:00 a.m.) to Monday, April 20, 2026 (6:00 p.m.) to [email protected]. The Board and/or the management will endeavour to address substantial and relevant questions in relation to the resolution to be tabled for approval at the EGM and may decide, at their discretion, which questions to respond to.

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ARRANGEMENTS FOR THE EXTRAORDINARY GENERAL MEETING

IV. APPOINTMENT OF PROXY

Return of a completed proxy form will not preclude Shareholders subsequently from attending and voting through the e-Meeting System at the EGM or any adjournment thereof should they so wish. Shareholders are requested to complete the proxy form and returning it to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting (i.e. by no later than 9:30 a.m. on Sunday, April 19, 2026) or any adjournment thereof. Registered Shareholders submitting the proxy form are requested to provide a valid email address of his or her proxy (except appointment of the Chairman of the EGM) for the proxy to receive the username and password to participate in the online virtual meeting via the e-Meeting System.

V. SUBMISSION OF PROXY FORMS FOR REGISTERED SHAREHOLDERS

A proxy form for use at the EGM is enclosed with this circular. A copy of the proxy form can also be downloaded from the websites of the Company (www.jtexpress.com) and Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk). The deadline to submit completed proxy forms to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong is not less than 48 hours before the time appointed for holding the EGM (i.e. at or before 9:30 a.m. on Sunday, April 19, 2026 (Hong Kong Time)), or any adjournment thereof (as the case may be).

VI. APPOINTMENT OF PROXY FOR NON-REGISTERED SHAREHOLDERS

Non-registered Shareholders should contact their Intermediary as soon as possible for assistance in the appointment of proxy.

If Shareholders have any questions relating to the EGM, please contact Tricor Investor Services Limited, the Company’s Hong Kong branch share registrar, as follows:

Tricor Investor Services Limited

17/F, Far East Finance Centre 16 Harcourt Road Hong Kong Telephone: (852) 2980 1333 Facsimile: (852) 2810 8185

– 29 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for each of the financial years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025 has been disclosed in the following documents which have been published on the websites of the Stock Exchange (https://www.hkexnews.hk) and the Company (www.jtexpress.com). Web links to the Prospectus, annual reports and annual results announcement of the Company are set out below:

Financial information of the Company for the year ended December 31, 2022 (pages I-4-I-154):

https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1016/2023101600009.pdf

Annual report of the Company for the year ended December 31, 2023 (pages 182-296):

https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0424/2024042400926.pdf

Annual report of the Company for the year ended December 31, 2024 (pages 212-322):

https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0327/2025032700397.pdf

Interim report of the Company for the six months ended June 30, 2025 (pages 42-93):

https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0905/2025090501018.pdf

2. INDEBTEDNESS STATEMENT

Indebtedness

As at the close of business on January 31, 2026, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the indebtedness of the Group was as follows:

– I-1 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The following table sets forth the indebtedness as of the date indicated:

Borrowings from financial institutions – secured and unguaranteed – unsecured and unguaranteed Financial liabilities at fair value through profit or loss Financial liabilities – redemption liabilities Lease liabilities – unsecured and unguaranteed Total	As of January 31, 2026 USD’000 (Unaudited) 224,864 2,219,049 400,594 73,248 491,466
	3,409,221

Save as disclosed above, the Group did not have, at the close of business on January 31, 2026, any loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, hire purchases commitments, debentures, mortgages, charges, finance lease obligations, guarantees or other material contingent liabilities.

3. WORKING CAPITAL SUFFICIENCY

After due and careful consideration, the Directors are of the opinion that, taking into account the financial resources available to the Group including cash flows to be generated from the operating activities, the available financing facilities and the expected financial impact of the Proposed Transaction, the Group has sufficient working capital for its requirements for at least 12 months from the date of this circular.

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since December 31, 2024, being the date to which the latest published audited consolidated accounts of the Company were made up.

– I-2 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

5. FINANCIAL AND TRADING PROSPECT OF THE GROUP

During the financial year ended December 31, 2025, the Group has maintained its leading express delivery business in Southeast Asia, a competitive position in China and an expanding footprint in other emerging markets. The Group is committed to upgrading its customer service, enhancing our technology system, and training network partners to maintain service quality, improve brand image and earn its customers’ trust and business. The Group is optimistic that its businesses will continue to grow.

Looking forward, the Group and S.F. Holding Group will establish a strong foundation of trust that enables in-depth cooperation, expanding the Group’s service and network coverage to the benefit of the Group’s customers. With regard to international business, the Group has established a strong last-mile delivery network and accumulated localised operational experience in the oversea markets. Leveraging S.F. Holding Group’s core resources and mature operational capability in first-mile and cross-border line haul, the Group is well positioned to further expand the network coverage and enhance the competitiveness of its end to-end cross-border logistics solutions. With regard to China domestic business, the Group and S.F. Holding Group have highly complementary strengths in network resources, differentiated product offerings, and customer bases, which will help both sides expand service boundaries. Overall, this collaboration is highly aligned with the Group’s strategic direction, and will provide strong support for the Group’s effort to enhance its comprehensive competitiveness in the global logistics markets.

– I-3 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

FINANCIAL INFORMATION OF S.F. HOLDING FOR THE THREE YEARS ENDED DECEMBER 31, 2022, DECEMBER 31, 2023, DECEMBER 31, 2024 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2025

Unless otherwise specified, references in this appendix to the “Company” shall mean S.F. Holding and the “Group” shall mean S.F. Holding and its subsidiaries, and references to “we”, “us” and “our” shall be construed accordingly.

Set out below is an extract of: (i) the audited consolidated financial statements of S.F. Holding for each of the three years ended December 31, 2022, December 31, 2023 and December 31, 2024, prepared in accordance with IFRS; and (ii) the unaudited consolidated financial statements of S.F. Holding for the nine months ended September 30, 2025, prepared in accordance with the China Accounting Standards for Business Enterprises, in each case as extracted from the respective annual reports and quarterly results of S.F. Holding. The financial statements were issued in English and the Chinese translation is provided for information purposes only. In the event of any inconsistency between the English and Chinese versions, the English version shall prevail.

The consolidated financial statements of S.F. Holding for each of the three years ended December 31, 2022, December 31, 2023 and December 31, 2024 and the quarterly consolidated financial statements of S.F. Holding for the nine months ended September 30, 2025 are available on the websites of the Stock Exchange (https://www.hkexnews.hk) and S.F. Holding (https://ir.sf-express.com).

The financial information on S.F. Holding set forth in this appendix was neither prepared for J&T Global Express Limited or its shareholders nor for the purpose of incorporation in this circular. The contents of such financial information on S.F. Holding has also not been independently verified by J&T Global Express Limited or its subsidiaries or consolidated affiliated entities or any of their respective affiliates, advisers, agents, directors, employees, officers or representatives. Neither J&T Global Express Limited or its subsidiaries or consolidated affiliated entities nor any of their respective any of its affiliates, advisers, agents, directors, employees, officers or representatives make any representation as to the accuracy, completeness or fairness of the contents of the financial information on S.F. Holding, nor shall take or assume any responsibility for the contents of the financial information on S.F. Holding.

(A) FINANCIAL INFORMATION OF S.F. HOLDING FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2023

The following financial information of S.F. Holding for the year ended December 31, 2022 and 2023 is extracted from Accountant’s Report set out in Appendix I to the prospectus of S.F. Holding.

– II-1 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

Note Revenue 5 Cost of revenue 8 Gross profit Selling and marketing expenses 8 General and administrative expenses 8 Research and development expenses 8 Net (impairment losses)/reversal of impairment losses on financial assets and contract assets 3 Other income 6 Other gains, net 7 Operating profit Finance income 10 Finance costs 10 Finance costs, net Share of profit/(loss) of associates and joint ventures, net 20 Impairment provision for investments in associates and joint ventures 20 Profit before income tax Income tax expense 11 Profit for the year/period Attributable to: Owners of the Company Non-controlling interests Earnings per share for profit attributable to the owners of the Company: 13 – Basic – Diluted	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 207,186,647 267,490,414 258,409,403 (181,409,103) (234,478,008) (225,775,678) 25,777,544 33,012,406 32,633,725 (2,837,899) (2,784,114) (2,991,589) (15,115,275) (17,694,719) (17,766,049) (2,154,839) (2,222,865) (2,285,314) (579,851) (825,170) 33,480 2,089,534 2,494,659 2,281,202 1,956,535 831,262 408,474 9,135,749 12,811,459 12,313,929 187,794 345,662 633,373 (1,562,963) (2,054,360) (2,269,700) (1,375,169) (1,708,698) (1,636,327) 42,660 7,549 (67,190) (52,384) (72,474) (123,907) 7,750,856 11,037,836 10,486,505 (3,368,762) (3,980,922) (2,574,896) 4,382,094 7,056,914 7,911,609 4,731,979 6,227,058 8,234,493 (349,885) 829,856 (322,884) 4,382,094 7,056,914 7,911,609 1.03 1.28 1.70 1.03 1.28 1.70	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 124,365,598 134,409,720 (107,767,733) (116,096,281) 16,597,865 18,313,439 (1,392,755) (1,470,892) (8,999,978) (9,049,272) (1,174,970) (1,301,455) 66,022 (159,872) 880,404 572,750 257,072 293,793 6,233,660 7,198,491 292,849 415,064 (1,092,673) (1,230,918) (799,824) (815,854) (13,486) (62,580) – – 5,420,350 6,320,057 (1,526,110) (1,559,135) 3,894,240 4,760,922 4,176,282 4,806,714 (282,042) (45,792) 3,894,240 4,760,922 0.86 1.00 0.86 1.00	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 124,365,598 134,409,720 (107,767,733) (116,096,281) 16,597,865 18,313,439 (1,392,755) (1,470,892) (8,999,978) (9,049,272) (1,174,970) (1,301,455) 66,022 (159,872) 880,404 572,750 257,072 293,793 6,233,660 7,198,491 292,849 415,064 (1,092,673) (1,230,918) (799,824) (815,854) (13,486) (62,580) – – 5,420,350 6,320,057 (1,526,110) (1,559,135) 3,894,240 4,760,922 4,176,282 4,806,714 (282,042) (45,792) 3,894,240 4,760,922 0.86 1.00 0.86 1.00
			18,313,439
			(1,470,892) (9,049,272) (1,301,455) (159,872) 572,750 293,793
			7,198,491
			415,064 (1,230,918)
			(815,854)
			(62,580) –
			6,320,057 (1,559,135)
			4,760,922
			4,806,714 (45,792)
			4,760,922

			1.00 1.00

– II-2 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

Profit for the year/period Other comprehensive income: Items that may be reclassified to profit or loss – Effective portion of changes in fair value of hedging instruments arising during the year/period – Share of other comprehensive income of associates and joint ventures accounted for using the equity method – Currency translation differences of foreign operations Items that will not be reclassified to profit or loss – Fair value changes of equity investments designated at fair value through other comprehensive income – Share of other comprehensive income of associates and joint ventures accounted for using the equity method – Income tax effect Other comprehensive income/(loss) for the year/period, net of tax Total comprehensive income for the year/period Attributable to: Owners of the Company Non-controlling interests	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 4,382,094 7,056,914 7,911,609 (4,536) 15,392 12,002 – (18,740) (5,254) (133,261) 1,336,071 334,708 1,870,952 (57,876) 484,100 (91) (1,486) (329) 9,857 (307) 2,749 1,742,921 1,273,054 827,976 6,125,015 8,329,968 8,739,585 6,317,897 8,109,083 9,107,526 (192,882) 220,885 (367,941) 6,125,015 8,329,968 8,739,585	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 3,894,240 4,760,922 8,740 (1,012) 9,171 (10,370) 464,631 (88,599) (53,984) (1,362,163) – – 1,244 2,467 429,802 (1,459,677) 4,324,042 3,301,245 4,815,831 3,746,395 (491,789) (445,150) 4,324,042 3,301,245	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 3,894,240 4,760,922 8,740 (1,012) 9,171 (10,370) 464,631 (88,599) (53,984) (1,362,163) – – 1,244 2,467 429,802 (1,459,677) 4,324,042 3,301,245 4,815,831 3,746,395 (491,789) (445,150) 4,324,042 3,301,245
			(1,012) (10,370) (88,599) (1,362,163) – 2,467
			(1,459,677)
			3,301,245

			3,746,395 (445,150)
			3,301,245

– II-3 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Note ASSETS Non-current assets Property, plant and equipment 14 Right-of-use assets 15 Investment properties 16 Intangible assets 17 Deferred tax assets 18 Prepayments, other receivables and other assets 19 Investments in associates and joint ventures 20 Financial assets at fair value through other comprehensive income 21 Financial assets at fair value through profit or loss 21 Total non-current assets Current assets Inventories 22 Contract assets 23 Trade and note receivables 24 Prepayments, other receivables and other assets 19 Financial assets at fair value through other comprehensive income 21 Financial assets at fair value through profit or loss 21 Restricted cash 25 Cash and cash equivalents 25 Total current assets Total assets	As 2021 RMB’000 47,650,309 23,779,667 4,850,233 19,485,614 1,584,478 3,435,382 7,260,087 6,810,771 878,023 115,734,564 1,546,821 1,038,247 30,759,013 14,992,856 – 10,384,493 576,926 34,813,768 94,112,124 209,846,688	at December 31, 2022 2023 RMB’000 RMB’000 56,903,667 60,104,416 22,179,348 20,890,047 4,875,366 6,418,720 22,084,612 21,030,998 1,632,964 2,263,870 2,257,364 2,333,562 7,858,000 7,378,831 7,365,684 9,489,535 1,012,209 589,996 126,169,214 130,499,975 1,948,354 2,440,425 1,522,996 1,632,592 25,796,677 25,360,433 12,801,911 12,622,706 63,310 99,978 7,385,379 6,809,742 874,919 1,576,496 40,279,947 40,448,308 90,673,493 90,990,680 216,842,707 221,490,655	As at June 30, 2024 RMB’000 59,577,127 19,972,478 6,658,540 20,582,712 2,053,570 2,229,314 6,859,813 8,344,293 508,313
			126,786,160

			2,559,211 2,039,379 26,095,410 10,667,582 125,633 18,047,323 1,029,244 32,515,989
			93,079,771
			219,865,931

– II-4 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Note LIABILITIES Non-current liabilities Borrowings 26 Lease liabilities 15 Deferred tax liabilities 18 Other payables and accruals 29 Deferred income 30 Total non-current liabilities Current liabilities Trade and note payables 27 Contract liabilities 28 Borrowings 26 Lease liabilities 15 Financial liabilities at fair value through profit or loss Income tax payable Other payables and accruals 29 Advances from customers Total current liabilities Total liabilities Net assets EQUITY Share capital 31 Less: Treasury shares 31 Reserves 32 Retained earnings. Equity attributable to owners of the Company Non-controlling interests Total equity	As 2021 RMB’000 19,384,466 10,941,938 4,402,160 544,300 690,242 35,963,106 23,467,675 1,675,836 25,715,952 5,989,616 7,658 2,066,730 17,070,777 27,385 76,021,629 111,984,735 97,861,953 4,906,213 (394,993) 50,186,242 28,192,470 82,889,932 14,972,021 97,861,953	at December 31, 2022 2023 RMB’000 RMB’000 26,586,761 30,396,912 8,582,372 8,038,495 4,657,954 4,550,974 191,871 140,329 860,791 1,090,644 40,879,749 44,217,354 24,748,051 24,914,300 1,244,418 1,832,018 23,281,547 22,309,103 6,596,956 5,769,965 96,647 92,120 1,630,863 1,394,250 20,029,392 17,637,171 49,035 40,714 77,676,909 73,989,641 118,556,658 118,206,995 98,286,049 103,283,660 4,895,202 4,895,202 (2,040,377) (2,575,532) 50,037,565 51,634,675 33,371,351 38,835,999 86,263,741 92,790,344 12,022,308 10,493,316 98,286,049 103,283,660	As at June 30, 2024 RMB’000 30,600,682 7,472,393 4,536,857 144,477 1,210,871
			43,965,280

			23,810,332 1,802,509 29,034,420 5,540,079 94,614 1,221,636 15,444,502 41,209
			76,989,301
			120,954,581

			98,911,350

			4,815,911 (378,490) 43,385,333 40,748,443
			88,571,197
			10,340,153
			98,911,350

– II-5 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

STATEMENTS OF FINANCIAL POSITION OF THE COMPANY

Note ASSETS Non-current assets Property, plant and equipment Right-of-use assets 15 Intangible assets Deferred tax assets Investments in a subsidiary 41 Prepayments, other receivables and other assets 19 Total non-current assets Current assets Financial assets at fair value through profit or loss 21 Prepayments, other receivables and other assets 19 Cash and cash equivalents 25 Total current assets Total assets LIABILITIES Non-current liabilities Lease liabilities Deferred tax liabilities Total non-current liabilities	As 2021 RMB’000 25,180 383,348 1,047 – 50,997,088 111 51,406,774 9,200,219 18,282,567 226,112 27,708,898 79,115,672 1,673 7,290 8,963	at December 31, 2022 2023 RMB’000 RMB’000 144,726 210,661 368,022 354,760 359 168 – 100 58,217,914 66,933,038 459 – 58,731,480 67,498,727 2,335,319 – 15,191,585 21,850,383 812,181 138,046 18,339,085 21,988,429 77,070,565 89,487,156 – – 1,253 – 1,253 –	As at June 30, 2024 RMB’000 253,138 348,129 72 696 66,962,282 –
			67,564,317
			– 17,673,036 29,017
			17,702,053
			85,266,370
			– –
			–

– II-6 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Note Current liabilities Income tax payable Other payables and accruals Lease liabilities Total current liabilities Total liabilities Net assets EQUITY Share capital 31 Less: Treasury shares 31 Reserves 32 Retained earnings 32 Total equity	As 2021 RMB’000 662 7,153 519 8,334 17,297 79,098,375 4,906,213 (394,993) 72,701,834 1,885,321 79,098,375	at December 31, 2022 2023 RMB’000 RMB’000 10,316 3,188 29,906 21,623 – – 40,222 24,811 41,475 24,811 77,029,090 89,462,345 4,895,202 4,895,202 (2,040,377) (2,575,532) 72,601,156 74,151,381 1,573,109 12,991,294 77,029,090 89,462,345	As at June 30, 2024 RMB’000 – 21,957 – 21,957
			21,957
			85,244,413

			4,815,911 (378,490) 70,707,023 10,099,969
			85,244,413

– II-7 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

As at January 1, 2021 Comprehensive income: Profit for the year Other comprehensive income Total comprehensive income Transfer of gain on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-public placement Capital contribution of non-controlling interests Share-based payment Transaction with non-controlling interests and others Non-controlling interests on acquisition of subsidiaries Appropriation to general and regulatory reserves Profit appropriations to statutory reserve Dividends Safety reserve appropriation Safety reserve utilisation Others As at December 31, 2021	Share capital RMB’000 4,556,440 – – – – 349,773 – – – – – – – – – – 4,906,213	Attributable to owners of the Company Less: Treasury shares Reserves (Note 32) Retained earnings RMB’000 RMB’000 RMB’000 (394,993) 26,573,371 25,192,055 – – 4,731,979 – 1,585,918 – – 1,585,918 4,731,979 – (112,656) 112,656 – 19,562,789 – – 2,029,503 – – 287,553 – – (75,317) – – – – – 141,496 (141,496) – 202,732 (202,732) – – (1,499,992) – 28,370 – – (28,370) – – (9,147) – (394,993) 50,186,242 28,192,470	Total RMB’000 55,926,873 4,731,979 1,585,918 6,317,897 – 19,912,562 2,029,503 287,553 (75,317) – – – (1,499,992) 28,370 (28,370) (9,147) 82,889,932	Non- controlling interests RMB’000 316,651 (349,885) 157,003 (192,882) – – 1,849,237 61,755 (142,626) 13,126,493 – – (46,607) – – – 14,972,021	Total equity RMB’000 56,243,524 4,382,094 1,742,921 6,125,015 – 19,912,562 3,878,740 349,308 (217,943) 13,126,493 – – (1,546,599) 28,370 (28,370) (9,147)
					97,861,953

– II-8 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at January 1, 2022 Comprehensive income: Profit for the year Other comprehensive income Total comprehensive income Transfer of loss on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Repurchase of shares Cancellation of shares Share-based payment Transaction with non-controlling interests and others Non-controlling interests on acquisition of subsidiaries Appropriation to general and regulatory reserves Profit appropriations to statutory reserve Dividends Safety reserve appropriation Safety reserve utilization Others As at December 31, 2022	Share capital RMB’000 4,906,213 – – – – – – (11,011) – – – – – – – – – 4,895,202	Attributable to owners of the Company Less: Treasury shares Reserves (Note 32) Retained earnings RMB’000 RMB’000 RMB’000 (394,993) 50,186,242 28,192,470 – – 6,227,058 – 1,882,025 – – 1,882,025 6,227,058 – 38,771 (38,771) – 825 – (2,040,377) – – 394,993 (383,982) – – 122,999 – – (2,055,007) – – – – – 72,410 (72,410) – 62,478 (62,478) – – (874,518) – 32,214 – – (32,214) – – 110,804 – (2,040,377) 50,037,565 33,371,351	Total RMB’000 82,889,932 6,227,058 1,882,025 8,109,083 – 825 (2,040,377) – 122,999 (2,055,007) – – – (874,518) 32,214 (32,214) 110,804 86,263,741	Non- controlling interests RMB’000 14,972,021 829,856 (608,971) 220,885 – 161,848 – – (13,426) (1,856,492) 57,555 – – (1,524,826) – – 4,743 12,022,308	Total equity RMB’000 97,861,953 7,056,914 1,273,054 8,329,968 – 162,673 (2,040,377) – 109,573 (3,911,499) 57,555 – – (2,399,344) 32,214 (32,214) 115,547
					98,286,049

– II-9 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at January 1, 2023 Comprehensive income: Profit for the year Other comprehensive income Total comprehensive income Transfer of gain on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Repurchase of shares Exercise of share options Share-based payment Transaction with non-controlling interests and others Non-controlling interests on acquisition of subsidiaries Appropriation to general and regulatory reserves Profit appropriations to statutory reserve Dividends Safety reserve appropriation Safety reserve utilisation Others As at December 31, 2023	Share capital RMB’000 4,895,202 – – – – – – – – – – – – – – – – 4,895,202	Attributable to owners of the Company Less: Treasury shares Reserves (Note 32) Retained earnings RMB’000 RMB’000 RMB’000 (2,040,377) 50,037,565 33,371,351 – – 8,234,493 – 873,033 – – 873,033 8,234,493 – 121,368 (121,368) – 1,207 – (959,956) – – 424,801 (69,612) – – 271,510 – – (1,037,241) – – – – – 31,328 (31,328) – 1,403,533 (1,403,533) – – (1,213,616) – 389,332 – – (389,332) – – 1,984 – (2,575,532) 51,634,675 38,835,999	Total RMB’000 86,263,741 8,234,493 873,033 9,107,526 – 1,207 (959,956) 355,189 271,510 (1,037,241) – – – (1,213,616) 389,332 (389,332) 1,984 92,790,344	Non- controlling interests RMB’000 12,022,308 (322,884) (45,057) (367,941) – 146,845 – – 37,828 (799,597) 47,904 – – (596,065) – – 2,034 10,493,316	Total equity RMB’000 98,286,049 7,911,609 827,976 8,739,585 – 148,052 (959,956) 355,189 309,338 (1,836,838) 47,904 – – (1,809,681) 389,332 (389,332) 4,018
					103,283,660

– II-10 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at January 1, 2023 Comprehensive income: Profit for the period Other comprehensive income Total comprehensive income Transfer of loss on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Repurchase of shares Share-based payment Transaction with non-controlling interests and others Non-controlling interests on acquisition of subsidiaries Dividends Safety reserve appropriation Safety reserve utilisation Others As at June 30, 2023	Share capital RMB’000 (Unaudited) 4,895,202 – – – – – – – – – – – – – 4,895,202	Attributable to owners of the Company Less: Treasury shares Reserves (Note 32) Retained earnings RMB’000 RMB’000 RMB’000 (Unaudited) (Unaudited) (Unaudited) (2,040,377) 50,037,565 33,371,351 – – 4,176,282 – 639,549 – – 639,549 4,176,282 – (18) 18 – 890 – (59,936) – – – 151,413 – – (11,444) – – – – – – (1,213,616) – 18,568 – – (18,568) – – (3,041) – (2,100,313) 50,814,914 36,334,035	Total RMB’000 (Unaudited) 86,263,741 4,176,282 639,549 4,815,831 – 890 (59,936) 151,413 (11,444) – (1,213,616) 18,568 (18,568) (3,041) 89,943,838	Non- controlling interests RMB’000 (Unaudited) 12,022,308 (282,042) (209,747) (491,789) – 59,056 – 2,048 (3,728) 52,226 (377,890) – – – 11,262,231	Total equity RMB’000 (Unaudited) 98,286,049 3,894,240 429,802 4,324,042 – 59,946 (59,936) 153,461 (15,172) 52,226 (1,591,506) 18,568 (18,568) (3,041)
					101,206,069

– II-11 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at January 1, 2024 Comprehensive income: Profit/(loss) for the period Other comprehensive loss Total comprehensive (loss)/income Transfer of gain on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Repurchase of shares Cancellation of shares Share-based payment Transaction with non-controlling interests and others Non-controlling interests on acquisition of subsidiaries Dividends Safety reserve appropriation Safety reserve utilisation As at June 30, 2024	Share capital RMB’000 4,895,202 – – – – – – (79,291) – – – – – – 4,815,911	Attributable to owners of the Company Less: Treasury shares Reserves (Note 32) Retained earnings RMB’000 RMB’000 RMB’000 (2,575,532) 51,634,675 38,835,999 – – 4,806,714 – (1,060,319) – – (1,060,319) 4,806,714 – 5,060 (5,060) – 127 – (1,378,503) – – 3,575,545 (3,496,254) – – 62,186 – – (3,760,142) – – – – – – (2,889,210) – 272,081 – – (272,081) – (378,490) 43,385,333 40,748,443	Total RMB’000 92,790,344 4,806,714 (1,060,319) 3,746,395 – 127 (1,378,503) – 62,186 (3,760,142) – (2,889,210) 272,081 (272,081) 88,571,197	Non- controlling interests RMB’000 10,493,316 (45,792) (399,358) (445,150) – 28,447 – – 7,754 420,549 17,333 (182,096) – – 10,340,153	Total equity RMB’000 103,283,660 4,760,922 (1,459,677) 3,301,245 – 28,574 (1,378,503) – 69,940 (3,339,593) 17,333 (3,071,306) 272,081 (272,081)
					98,911,350

– II-12 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF CASH FLOWS

Note Cash flows from operating activities Cash generated from operations 34(a) Income tax paid Net cash generated from operating activities Cash flows from investing activities Redemption of financial assets at fair value through profit or loss Disposal of financial assets at fair value through other comprehensive income Proceeds from sales of associates and joint ventures Repayment from former subsidiaries Investment gains or dividend income from financial assets at fair value through profit or loss Dividends received from associates and joint ventures Investment gains or dividend income from financial assets at fair value through other comprehensive income Proceeds from disposal of property, plant and equipment and other non-current assets Proceeds of considerations receivable for disposal of subsidiaries before acquisition 35(a) Disposal of subsidiaries, net of cash and cash equivalents held by subsidiaries at the disposal dates 36(a) Purchase of property, plant and equipment and other non-current assets Acquisition of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Acquisition of associates and joint ventures Acquisition of subsidiaries, net of cash and cash equivalents held by subsidiaries at the acquisition dates 35 Net cash used in investing activities	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 18,632,501 37,781,002 29,796,205 (2,553,546) (5,078,055) (3,226,386) 16,078,955 32,702,947 26,569,819 114,774,608 154,858,457 93,433,282 592,087 698,674 162,780 24,418 841,595 468,039 342,792 – – 465,949 738,296 604,161 7,684 171,633 192,475 16,770 3,170 1,998 147,398 176,331 335,828 10,989,923 – – 2,337,552 313,719 384,332 (19,195,560) (14,183,777) (12,471,899) (78,442) (499,939) (275,165) (118,178,290) (151,870,104) (93,974,775) (334,538) (1,122,032) (169,265) (9,043,578) (2,217,481) (2,197,408) (17,131,227) (12,091,458) (13,505,617)	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 15,731,404 15,214,009 (1,906,577) (1,491,740) 13,824,827 13,722,269 48,987,381 28,382,311 130,152 8,440 3,000 341,706 – 316,655 284,733 230,534 146,754 137,225 1,998 19,581 119,817 179,381 – – 358,587 153,596 (5,454,090) (5,075,259) (35,814) (49,750) (57,231,623) (39,460,448) (15,930) (14,141) (928,555) (614,384) (13,633,590) (15,444,553)	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 15,731,404 15,214,009 (1,906,577) (1,491,740) 13,824,827 13,722,269 48,987,381 28,382,311 130,152 8,440 3,000 341,706 – 316,655 284,733 230,534 146,754 137,225 1,998 19,581 119,817 179,381 – – 358,587 153,596 (5,454,090) (5,075,259) (35,814) (49,750) (57,231,623) (39,460,448) (15,930) (14,141) (928,555) (614,384) (13,633,590) (15,444,553)
			13,722,269
			28,382,311 8,440 341,706 316,655 230,534 137,225 19,581 179,381 – 153,596 (5,075,259) (49,750) (39,460,448) (14,141) (614,384)
			(15,444,553)

– II-13 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Note Cash flows from financing activities Capital injection from owners of the Company Capital injection from non-controlling interests Exercise of share options Drawdown of bank borrowings Drawdown of loans from non-controlling interests Proceeds from corporate bonds and short-term debentures Deposits received from lessors after the expiry of lease contracts Repayment of bank borrowings Repayment of corporate bonds and short-term debentures Repayment of loans from holders of asset-backed securities scheme Repayment of loans from non-controlling interests Dividend paid to non-controlling interests Dividend paid by subsidiaries (announced prior to acquisition) 35(a) Dividend paid 12 Interests paid Net cash consideration paid to non-controlling interests without change of control 34(b) Payments for repurchase of shares 31 Payments of lease liabilities 34(c) Payment of transaction costs related to financing activities Payment for deposits of lease contracts Net cash generated from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year/period Exchange (losses)/gains on cash and cash equivalents Cash and cash equivalents at end of the year/period	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 19,910,000 – – 3,884,887 162,673 157,080 – – 355,189 31,405,608 27,676,978 32,543,231 – 10,814 44,287 13,062,445 11,880,297 1,499,553 7,577 5,187 6,703 (23,760,852) (31,204,435) (22,365,788) (2,800,000) (6,660,000) (10,110,178) (666,000) (391,000) (899,360) (21,417) (34,115) (31,478) (46,607) (1,361,769) (599,379) (10,819,033) – – (1,499,992) (874,518) (1,213,616) (832,979) (1,451,895) (1,820,066) (109,576) (3,914,671) (1,833,285) – (2,040,377) (959,956) (6,987,589) (7,813,330) (7,765,246) (92,093) – (2,376) (135,803) (6,789) – 20,498,576 (16,016,950) (12,994,685) 19,446,304 4,594,539 69,517 15,466,484 34,813,768 40,279,947 (99,020) 871,640 98,844 34,813,768 40,279,947 40,448,308	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) – – 56,892 27,968 – – 15,611,960 19,578,781 5,064 5,542 1,499,553 3,297,638 7,639 9,978 (10,595,828) (15,680,047) (5,000,000) (957,181) – – (12,405) – (385,779) (182,096) – – (1,213,616) (2,889,210) (851,714) (952,574) (132,490) (3,353,487) (59,936) (1,378,503) (3,891,543) (3,704,784) (1,435) (3,890) – – (4,963,638) (6,181,865) (4,772,401) (7,904,149) 40,279,947 40,448,308 127,046 (28,170) 35,634,592 32,515,989	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) – – 56,892 27,968 – – 15,611,960 19,578,781 5,064 5,542 1,499,553 3,297,638 7,639 9,978 (10,595,828) (15,680,047) (5,000,000) (957,181) – – (12,405) – (385,779) (182,096) – – (1,213,616) (2,889,210) (851,714) (952,574) (132,490) (3,353,487) (59,936) (1,378,503) (3,891,543) (3,704,784) (1,435) (3,890) – – (4,963,638) (6,181,865) (4,772,401) (7,904,149) 40,279,947 40,448,308 127,046 (28,170) 35,634,592 32,515,989
			(6,181,865)
			(7,904,149) 40,448,308 (28,170)
			32,515,989

– II-14 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1. GENERAL INFORMATION OF THE GROUP

S.F. Holding Co., Ltd. (順豐控股股份有限公司) (formerly “Ma’anshan Dingtai Rare Earth & New Materials Co., Ltd.”, hereinafter “ S.F. Holding ” or “ the Company ”), formerly known as Ma’anshan Dingtai Science & Technology Co., Ltd., was established by 11 natural persons including Liu Jilu and the Labour Union of Ma’anshan Dingtai Metallic Products Co., Ltd. by cash contribution on May 22, 2003. On October 22, 2007, the Company officially changed to Ma’anshan Dingtai Rare Earth and New Materials Co., Ltd., and issued additional 19.5 million shares to the public and listed with trading on Shenzhen Stock Exchange on February 5, 2010.

In December 2016, approved by China Securities Regulatory Commission, the Company conducted a series of material asset restructuring arrangements, including entering into a material asset swap and share subscription agreement. Upon the completion of material asset restructuring, Shenzhen Mingde Holding Development Co., Ltd. (“ Mingde Holding ”) became the parent company and ultimate controlling company of the Company, and Mr. Wang Wei was the ultimate controlling shareholder.

The address of the Company’s registered office is 3/F, Complex Building, SF South China Transit Center, No. 1111, Hangzhan 4th Road, Shenzhen Airport, Caowei Community, Hangcheng Subdistrict, Bao’an District, Shenzhen. The Company is an investment holding company. The Company and its subsidiaries (collectively, the “ Group ”) are principally engaged in the development of logistics ecosystem including express delivery, freight delivery, cold chain and pharmaceutical logistics, intra-city on-demand delivery, international logistics service and supply chain solutions in the People’s Republic of China (the “ PRC ”).

2. SUMMARY OF ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the Historical Financial Information are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1 Summary of material accounting policies

(a) Basis of preparation

The principal accounting policies applied in the preparation of Historical Financial Information are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (“ IFRS Accounting Standards ”). The Historical Financial Information has been prepared on a historical cost basis, except for financial assets at fair value through other comprehensive income and financial assets and financial liability at fair value through profit or loss, which are carried at fair value.

The preparation of Historical Financial Information in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in Note 4.

– II-15 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) New standards and interpretations

(i) New standards and interpretations not yet adopted

Standards, amendments and interpretations that have been issued but not yet effective and have not been early adopted by the Group during the Track Record Period, are as follows:

		Effective for annual
		periods beginning
		on or after
Amendments to IAS 21	Lack of Exchangeability	January 1, 2025
Amendments to IFRS 9	Classification and Measurement of	January 1, 2026
and IFRS 7	Financial Instruments
Annual Improvements	Annual Improvements to IFRS	January 1, 2026
	Accounting Standards – Volume 11
IFRS 18	Presentation and Disclosure in	January 1, 2027
	Financial Statements
IFRS 19	Subsidiaries without Public	January 1, 2027
	Accountability: Disclosures
Amendments to IFRS 10	Sale or Contribution of Assets	To be determined
and IAS 28	between an Investor and its
	Associate or Joint Venture

The Group has already commenced an assessment of the impact of these new or revised standards and amendments, certain of which are relevant to the Group’s operations. According to the preliminary assessment made by the directors, no significant impact on the financial performance and positions of the Group is expected when they become effective.

(ii) New standard and amendments to standards adopted and changes in accounting policy

The following new standard and amendments to standards have been adopted by the Group for the financial year beginning on January 1, 2024:

Amendments	to	IAS 1	Classification of Liabilities as Current
			or Non-current
Amendments	to	IAS 1	Non-current liabilities with Covenants
Amendments	to	IAS 7 and IFRS 7	Supplier Finance Arrangements
Amendments	to	IFRS 16	Lease Liability in a sales and
			leaseback

The adoption of these new and amended standards does not have significant impact during the Track Record Period.

(c) Associates

Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights.

Investments in associates are accounted for using the equity method of accounting (Note 2.2(c)), after initially being recognized at cost.

– II-16 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(d) Joint arrangements

Under IFRS 11, investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor.

Joint ventures

Interests in joint ventures are accounted for using the equity method (Note 2.2(c)), after initially being recognized at cost in the consolidated statement of financial position.

(e) Business combinations

Business combination is accounted for under the acquisition method except for business combination under common control.

The Group chooses to perform concentration test to determine whether an acquired asset of activities and assets is a business or not. If the concentration test is met, when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set of activities and assets is determined not to be a business and the Group would treat such transaction as purchasing a set of assets.

Business combination arising from transfer of interests in entities that are under the control of the controlling shareholder that controls the Group is accounted for as if the acquisition had occurred at the beginning of the Track Record Period or, if later, at the date that common control was established. The assets acquired and liabilities assumed are recognized at the carrying amounts recognized previously in the Group’s controlling shareholder’s perspective. The components of equity of the acquired entities are added to the same components within the Group’s equity and any difference between the net assets acquired and the consideration paid is recognized directly in equity.

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
equity interests issued by the Group
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred.

– II-17 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognized in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognized in profit or loss.

(f) Intangible assets

(i) Goodwill

Goodwill is measured as described in Note 2.1(e). Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being the operating segments.

(ii) Software

Software is stated at cost less any impairment losses and is amortized on the straight-line basis over its estimated useful life of two to ten years which is the shorter of expected economic benefit life and their contractual/legally protected period.

(iii) Research and development

All research costs are charged to the statement of profit or loss as incurred.

Development costs are capitalized only when all the following conditions are met:

the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; and
its intention to complete and its ability to use or sell the asset; and
how the asset will generate economic benefits (including demonstration that the product derived from the intangible asset or the intangible asset itself will be marketable or, in the case of internal use, the usefulness of the intangible asset as such); and

– II-18 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

the availability of technical and financial resources to complete the project and procure the use or sale of the intangible asset; and

the ability to measure reliably the expenditure during the development.

Self-developed systems and software, when the development is done and ready for use, are stated at cost less any impairment losses. The development costs are amortized using the straight-line basis over the commercial lives of the underlying products not exceeding ten years.

(iv) Customer relationships

Customer relationships acquired in a business combination are recognized at fair value at the acquisition date. The customer relationships have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate its cost over the expected life of the customer relationships, which range from fifteen to twenty years. The expected useful life is determined with reference to the past experience of the customer churn rate and the projected period of future economic benefits from customer relationships.

(v) Trademarks

Separately acquired trademarks are shown at historical cost. Trademarks acquired in a business combination are recognized at fair value at the acquisition date. Trademarks have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of trademarks over their estimated useful lives of five to twenty years which are the shorter of expected economic benefit life and their contractual/legally protected period.

(g)

Impairment of non-financial assets

Assets that have an indefinite useful life or are not yet available for use are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(h) Financial assets

(i) Classification

The Group classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
those to be measured at amortized cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

– II-19 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (“ FVOCI ”).

(ii) Recognition and derecognition

Regular way purchases and sales of financial assets are recognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

(iii) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (“ FVPL ”), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt instruments:

Amortized cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses), and impairment expenses are presented as separate line item in the statement of profit or loss.
FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises.

– II-20 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘other (losses)/gains, net’ in profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

(iv)

Impairment of financial assets

The Group recognizes an allowance for expected credit losses (“ ECLs ”) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

General approach

Impairment under general approach is measured as either 12-month expected losses or lifetime expected credit loss, depending on whether there has been a significant increase in credit risk since initial recognition. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking information.

The Group considers a financial asset in default when contractual payments are past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Debt investments at fair value through other comprehensive income and financial assets at amortized cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ECLs except for accounts apply the simplified approach as detailed below.

– II-21 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs

Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs

Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs

Simplified approach

For trade and other receivables and financial assets at fair value through other comprehensive income from providing operating services, lease receivables and contract assets that do not contain a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in calculating ECLs. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The credit risk of related parties is relatively low, as the management is of the view that it is very likely the Group could collect receivables from related parties. Management makes periodic assessments on these receivables from related parties.

(i) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, derivative financial instruments, lease liabilities, interest-bearing borrowings and bonds.

(ii) Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at amortized cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognized in the statement of profit or loss when the liabilities are derecognized as well as through the effective interest rate amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortization is included in finance costs in the statement of profit or loss.

– II-22 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(iii) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognized in the statement of profit or loss.

(j)

Current and deferred income tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income, based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

(i) Current income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

(ii) Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled.

Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future (Note 18).

– II-23 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(iii) Offsetting

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

(k)

Revenue recognition

Revenue is recognized when or as the control of the goods or services is transferred to a customer. Depending on the terms of the contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time. Control of the goods and services is transferred over time if the Group’s performance:

provides all of the benefits received and consumed simultaneously by the customer;
creates or enhances an asset that the customer controls as the Group performs; or
does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

If control of the asset transfers over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset.

The progress towards complete satisfaction of the performance obligation is measured based on one of the following methods that best depict the Group’s performance in satisfying the performance obligation:

direct measurements of the value transferred by the Group to the customer; or
the Group’s efforts or inputs to the satisfaction of the performance obligation relative to the total expected efforts or inputs.

Incremental costs incurred to obtain a contract, if recoverable, are capitalized as contract assets and subsequently amortized when the related revenue is recognized.

(i) Revenue from logistics and freight forwarding services

The Group derives revenue from provision of logistics and freight forwarding services, including express and freight delivery services (comprising time-definite express services, economy express services, freight delivery services, and cold chain and pharmaceuticals logistics services), intra-city on-demand delivery services, and supply chain and international services.

The Group recognizes revenue based on the progress of the service performed within period, which is determined based on proportion of costs incurred to date to the estimated total costs or days spent to the estimated total days. As at the date of the end of the reporting period, the Group re-estimates the progress of the service performed to reflect the actual status of contract performance.

– II-24 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

When the Group recognizes revenue based on the progress of the service performed, the amount with unconditional right to consideration obtained by the Group is recognized as trade receivables, and the rest is recognized as contract assets. Meanwhile, provision for trade receivables and contract assets is recognized on the basis of expected credit losses (Note 2.1(h)(iv)). If the contract consideration received or receivable exceeds the progress of the service performed, the excess portion will be recognized as contract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis.

Contract costs include costs to fulfil a contract and costs to obtain a contract. Costs incurred for provision of the aforesaid services are recognized as costs to fulfil a contract, which is carried forward to the cost of revenue when revenue recognized based on the progress of the service performed. Incremental costs incurred by the Group for the acquisition of the aforesaid service contract are recognized as the costs to obtain a contract. For the costs to obtain a contract with the amortization period within one year, the costs are charged to profit or loss when incurred. For the costs to obtain a contract with the amortization period beyond one year, the costs are charged in the profit or loss on the same basis as aforesaid revenue of rendering of services recognized under the relevant contract. If the carrying amount of the contract costs is higher than the remaining consideration expected to be obtained by rendering of the service net of the estimated cost to be incurred, the Group makes provision for impairment on the excess portion and recognizes it as asset impairment losses. As at the date of the end of the reporting period, based on whether the amortization period of the costs to fulfil a contract is more than one year when initially recognized, the amount of the Group’s costs to fulfil a contract net of related provision for asset impairment is presented as inventories or other non-current assets. For costs to obtain a contract with amortization period beyond one year at the initial recognition, the amount net of related provision for asset impairment is presented as other non-current assets.

(ii) Sales of goods

Sales are recognized when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract or the Group has objective evidence that all criteria for acceptance have been satisfied.

Revenue from these sales is recognized based on the price specified in the contract. No element of financing is deemed present as the sales are made with the credit policies, which is consistent with market practice.

A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(iii) Other services

The Group’s services also include telecommunication service, repairment service, research and development and technical services and other services.

– II-25 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

With regard to certain maintenance service, research and development and technical services, the Group recognizes revenue at a point in time when the services are delivered to customers. For other services, the Group recognizes revenue based on the progress of the service performed within period, which is determined based on proportion of costs incurred to date to the estimated total costs as at the date of end of the reporting period.

2.2 Summary of other accounting policies

(a) Subsidiaries

A subsidiary is an entity (including a structured entity) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. Refer to Note 2.1(e) for further accounting policy information.

Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position respectively.

(b) Equity method

Under the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognized as a reduction in the carrying amount of the investment.

Where the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the other entity.

The gain or loss resulting from a downstream transaction involving assets that constitute a business between the Group and the associate or joint ventures is recognized in full in the Group’s financial statements.

Unrealized gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in these entities. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.

The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in Note 2.1(g).

– II-26 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Changes in ownership interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in a separate reserve within equity attributable to owners of the Company.

When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRS Accounting Standards.

If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income are reclassified to profit or loss where appropriate.

(d) Separate financial statements

Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and receivable.

Impairment test of the investments in subsidiaries is required upon receiving a dividend from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount of the investee’s net assets including goodwill.

(e) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“ the functional currency ”). Since the majority of the assets and operations of the Group are located in the PRC, the Historical Financial Information are presented in RMB, which is also the Company’s functional and the Group’s presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss.

– II-27 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Non-monetary items that are measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on non-monetary assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary financial assets and liabilities such as equity instruments held at fair value through profit or loss are recognized in the consolidated statement of profit or loss as part of the fair value gain or loss and translation differences on non-monetary financial assets, such as equity investment at fair value through other comprehensive income, are included in other comprehensive income.

(iii) Group companies

The results and financial position of all the Group’s entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each statement of financial position of the Group’s entities are translated at the closing rate at the end of the Track Record Period;
income and expenses for each statement of profit or loss of the Group’s entities are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognized in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to other comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognized in the consolidated statement of profit or loss and other comprehensive income as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(f)

Leases

(i) The Group as the lessee

Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

fixed payments (including in-substance fixed payments), less any lease incentives receivable,
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date,
amounts expected to be payable by the Group under residual value guarantees,

– II-28 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Group:

where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received; and
makes adjustments specific to the lease, e.g. term, country, currency and security.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of use asset.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

the amount of the initial measurement of lease liability,
any lease payments made at or before the commencement date less any lease incentives received,
any initial direct costs, and
restoration costs.

The Group also has interests in leasehold land and land use rights for use in its operations. Lump sum payments were made upfront to acquire these land interests from their previous registered owners or governments in the jurisdictions where the land is located. There are no ongoing payments to be made under the term of the land leases, other than insignificant lease renewal costs or payments based on rateables value set by the relevant government authorities. These payments are stated at cost and are amortized over the term of the lease which includes the renewal period if the lease can be renewed by the Group without significant cost.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

– II-29 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Payments associated with short-term leases and all leases of low-value assets are recognized as expenses in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

(ii) The Group as the lessor

When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its leases as either an operating lease or a finance lease.

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. When a contract contains lease and non-lease components, the Group allocates the consideration in the contract to each component on a relative stand-alone selling price basis. Rental income is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

Leases that transfer substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee are accounted for as finance leases.

(g) Property, plant and equipment

All property, plant and equipment are stated at historical costs less accumulated depreciation and accumulated impairment charges. Historical costs include expenditures that are directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the consolidated statement of comprehensive income during the periods in which they are incurred.

Replacement parts of aircraft engine repairment/maintenance are depreciated using the units-of-production method. Except for the replacement parts of aircraft engine repairment/maintenance and freehold land, depreciation of other property, plant and equipment is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives as follows:

Freehold land	Not depreciated
Buildings	10 – 50 years
Machinery and equipment	2 – 40 years
Aircraft, aircraft engines, rotables and	1.5 – 10 years
other flight equipment
Other property, plant and equipment	2 – 20 years
Leasehold improvements	Shorter of their useful lives and
	the lease term

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 2.1(g)).

Gains and losses on disposal are determined by comparing the proceeds with the carrying amounts. These are included in the consolidated statement of comprehensive income.

– II-30 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

In relation to the aircraft fuselage within the properties, plants and equipment, the Group originally provided for depreciation over a period of 10 years. Based on the assessment conducted by the technical department of the Group with reference to the actual useful lives and utilization of aircraft, the Group was of the view that current estimated useful lives of aircraft can no longer reflect the actual usage of the aircraft.

In order to more truly and accurately reflect the status and operating results of the Company’s aircraft fuselage, and to better align the expected useful life of the aircraft fuselage with its actual service life, the Group has made an accounting estimate change to the expected useful lives of the aircraft fuselage.

This change in accounting estimate was implemented using the prospective method from January 1, 2024. The comparison of the changes in depreciation of the aircraft fuselage is as follows:

		Estimated
	Estimated	residual	Depreciation
	useful lives	value	rate
Before	10 years	5.00%	9.50%
After	10 – 20 years	5.00%	9.50% – 4.75%

Construction in progress represents logistics centers and warehouses under construction and is stated at cost less impairment losses. It will be reclassified to the relevant property, plant and equipment category upon completion and depreciation begins when the relevant assets are available for use.

(h)

Investment properties

Investment properties are interests in land and buildings held to earn rental income and/or for capital appreciation, including properties under construction for such purpose, rather than for use in the production or supply of goods or services or for administrative purposes, or for sale in the ordinary course of business. Such properties are measured initially at cost, including related transaction costs. After initial recognition, the Group chooses the cost model to measure all of its investment properties.

Depreciation is calculated on the straight-line basis to its residual value over its estimated useful life. The estimated useful lives are as follows:

Buildings 10 – 50 years Land use rights 20 – 50 years

The carrying amounts of investment properties measured using the cost method are reviewed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Any gains or losses on the retirement or disposal of an investment property are recognized in profit or loss in the year of the retirement or disposal.

(i) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

– II-31 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(j) Trade and other receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. Majority of other receivables are advances to employees, deposit from suppliers and value-added tax recoverable. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognized initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognized at fair value. The Group holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method, less provision for impairment. See Note 24 and Note 19 for further information about the Group’s accounting for Trade and other receivables and Note 2.1(h) for a description of the Group’s impairment policies.

(k)

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown as a separate current liability in the consolidated statement of financial position.

Restricted and pledged bank deposits are not included in cash and cash equivalents.

(l) Share capital and capital reserve

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

Where any group company purchases its equity instruments, for example as the result of an employee share scheme, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to owners of the Company as treasury shares until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to owners of the Company.

(m)

Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial period which are unpaid. Trade payables are presented as current liabilities unless payment is not due within 12 months after the reporting. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

(n) Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.

– II-32 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognized in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(o)

Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other borrowing costs are expensed in the period in which they are incurred.

(p)

Provisions

Provisions for legal claims, service warranties and make good obligations are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.

(q)

Employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the consolidated statement of financial position.

– II-33 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(ii) Employment obligations

Housing funds, medical insurances and other social insurances

Employees of the Group in the PRC are entitled to participate in various government-supervised housing funds, medical insurance and other employee social insurance plan. The Group contributes on a monthly basis to these funds based on certain percentages of the salaries of the employees, subject to certain ceiling. The Group’s liability in respect of these funds is limited to the contributions payable in each year. Contributions to the housing funds, medical insurances and other social insurances are expensed as incurred.

Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognizes costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

(r)

Share-based payments

Share-based payments can be distinguished into equity-settled share-based payments and cash-settled share-based payments. Equity-settled share-based payments are transactions of the Group settled through the payment of shares or other equity instruments in consideration for receiving services.

Equity-settled share-based payments made in exchange for services rendered by employees are measured at the fair value of equity instruments granted to employees. Instruments which are vested immediately upon the grant are charged to relevant costs or expenses at the fair value on the date of grant and the capital reserve is credited accordingly. Instruments of which vesting is conditional upon completion of services or fulfillment of performance conditions are measured by recognizing services rendered during the period in relevant costs or expenses and crediting the capital reserve accordingly at the fair value on the date of grant according to the best estimates conducted by the Group at each date of the end of the reporting period during the pending period. The fair value of equity instruments is determined using the binomial option pricing model. For details see Note 33. Share-based payment.

No expense is recognized for awards that do not ultimately vest due to non-fulfillment of non-market conditions and/or vesting conditions. For the market or non-vesting condition under the share-based payments agreement, it should be treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that other performance condition and/or vesting conditions are satisfied.

Where the terms of an equity-settled share-based payment are modified, as a minimum, services obtained are recognized as if the terms had not been modified. In addition, an expense is recognized for any modification which increases the total fair value of the instrument ranted or is otherwise beneficial to the employee as measured at the date of modification.

– II-34 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. Where employees or other parties are permitted to choose to fulfill non-vesting conditions but have not fulfilled during the pending period, equity-settled share-based payments are deemed cancelled. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the new awards are treated as if they were a modification of the original award.

Cash-settled share-based payments are those arrangements with employees where terms provide the Group to settle the transaction in cash. For cash-settled share-based payments, a liability equal to the portion of the services received is recognized at the current fair value determined at the end of the reporting period until the date of settlement, with any changes in fair value recognized in profit or loss.

(s)

Dividend distribution

Dividend distributed to the shareholders is recognized as a liability in the Historical Financial Information in the period when the dividends are approved by the entities’ shareholders or directors, where appropriate.

(t) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

the after-income tax effect of interests and other financing costs associated with dilutive potential ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(u) Government grants

Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions.

Government grants relating to costs are deferred and recognized in the consolidated statement of profit or loss over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to property and equipment, and other non-current assets are included in the non-current liabilities and are credited to the consolidated statement of profit or loss on a straight-line basis over the expected lives of the related assets.

– II-35 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

3. FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. Risk management is carried out by the directors and senior management of the Group.

(a) Market risk

(i) Foreign exchange risk

The Group’s major operational activities are carried out in mainland China and most of the transactions are denominated in RMB. Some operational activities are carried out in regions/countries including Hong Kong Special Administrative Region (“ Hong Kong ”) and United States and relevant transactions are settled in Hong Kong Dollar (“ HKD ”) and United States Dollar (“ USD ”). Foreign exchange risk arises when future commercial transactions or recognized assets and liabilities are denominated in a currency that is not the respective functional currency of the Group’s subsidiaries. The Group manages its foreign exchange risk by performing regular reviews of the Group’s net foreign exchange exposures.

As at December 31, 2021, 2022 and 2023 and June 30, 2024, for the Group’s subsidiaries with RMB as the functional currency, major monetary assets and liabilities exposed to foreign exchange risk are listed below:

At December 31, 2021 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables At December 31, 2022 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables	USD denominated RMB’000 381,815 644,070 (170,486) 855,399 570,178 1,901,329 (981,361) 1,490,146	HKD denominated RMB’000 5,889 38,046 (8,393) 35,542 31,722 86,034 (65,840) 51,916	Others denominated RMB’000 720 3,408 (7,443)
			(3,315)

			1,210 48,575 (116,583)
			(66,798)

– II-36 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

At December 31, 2023 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables At June 30, 2024 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables	USD denominated RMB’000 254,389 649,073 (391,029) 512,433 288,657 622,248 (372,069) 538,836	HKD denominated RMB’000 45,245 27,900 (56,703) 16,442 43,908 3,544 (11,346) 36,106	Others denominated RMB’000 6,177 17,133 (62,492)
			(39,182)

			13,745 21,935 (99,510)
			(63,830)

As at December 31, 2021, 2022 and 2023 and June 30, 2024, for the above various US dollar financial assets and US dollar financial liabilities, if the RMB appreciates or depreciates by 5% against the US dollar and other factors remain unchanged, the Group will reduce or increase its profit before taxation by approximately RMB35,628,000, RMB74,507,000, RMB25,622,000 and RMB26,942,000, respectively. Other foreign currencies of changes have no significant impact on foreign exchange risk.

As at December 31, 2021, 2022 and 2023 and June 30, 2024, for the Group’s subsidiaries with HKD as the functional currency, major monetary assets and liabilities exposed to foreign exchange risk are listed below:

At December 31, 2021 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables At December 31, 2022 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables	USD denominated RMB’000 72,858 44,711 (53,820) 63,749 692,008 1,612,858 (1,418,533) 886,333	RMB denominated RMB’000 13,958 5,452 (14,745) 4,665 59,509 251,686 (32,985) 278,210	Other denominated RMB’000 8,444 – (14,541)
			(6,097)

			35,142 – (14,327)
			20,815

– II-37 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

At December 31, 2023 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables At June 30, 2024 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables	USD denominated RMB’000 384,796 95,029 (97,982) 381,843 318,290 109,582 (13,555) 414,317	RMB denominated RMB’000 98,862 5,846 (8,046) 96,662 78,149 7,559 (9,819) 75,889	Other denominated RMB’000 34,738 – (5,148)
			29,590

			50,306 – (22,357)
			27,949

For the Group’s subsidiaries with HKD as the functional currency, the foreign exchange exposure of their non-functional currency denominated financial assets and liabilities was mainly derived from the USD. As USD is pegged against HKD, the foreign exchange exposure of the above-mentioned subsidiaries is not significant.

(ii)

Price risk

The Group is exposed to price risk mainly arising from equity investments held by the Group that are classified either as FVPL or FVOCI that will not be sold within one year.

Sensitivity analysis is performed by management to assess the exposure of the Group’s financial results to equity price risk of FVPL and FVOCI at the end of each reporting period. If prices of the respective instruments held by the Group had been 10% higher/lower as at December 31, 2021, 2022 and 2023 and June 30, 2024, profit before income tax for the Track Record Period would have been approximately RMB87,802,000, RMB101,221,000, RMB59,000,000 and RMB50,831,000 higher/lower, respectively, as a result of gains/losses on financial instruments classified as at FVPL, other comprehensive income would have been approximately RMB681,077,000, RMB736,568,000, RMB948,954,000 and RMB834,429,000 higher/lower as a result of gains/losses on financial instruments classified as at FVOCI, respectively.

(iii) Interest rate risk

The Group’s interest rate risk primarily arises from long-term interest-bearing borrowings and bonds. Long-term borrowings issued at variable rates expose the Group to cash flow interest rate risk. Bonds issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the proportion of borrowings and bonds issued at variable rates and fixed rates based on the market environment.

– II-38 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The Group has been monitoring the level of interest rates. The increase in the interest rates will increase the interest costs of borrowings at variable rates, which will further impact the performance of the Group. To hedge against the variability in the cash flows arising from a change in market interest rates, the Group may enter into certain interest rate swap contracts to swap variable rates into fixed rates.

The following tables list out the interest rate profiles of the Group’s interest-bearing financial instruments as at December 31, 2021, 2022 and 2023 and June 30, 2024:

				As at
	As	at December	31,	June 30,
	2021	2022	2023	2024
	RMB’000	RMB’000	RMB’000	RMB’000
Floating rate instruments
Long-term borrowings	3,510,829	7,472,010	11,355,241	10,661,466
				As at
	As	at December	31,	June 30,
	2021	2022	2023	2024
	RMB’000	RMB’000	RMB’000	RMB’000
Fixed rate instruments
Bonds
– USD denominated	15,301,680	18,107,960	18,415,020	18,380,414
– RMB denominated	500,000	1,000,000	500,000	1,500,000

If interest rates of floating rate instruments had been 50 basis points higher or lower with all other variables held constant, the profit before taxation would be lower or higher approximately RMB17,554,000, RMB37,360,000, RMB56,776,000 and RMB53,307,000, as at December 31, 2021, 2022 and 2023 and June 30, 2024, respectively.

(b) Credit risk

The carrying amounts of cash and cash equivalents, restricted cash, trade and other receivables and contract assets, represent the Group’s major exposure to credit risk in relation to financial assets.

(i) Credit risk of cash and bank balances, restricted and pledged bank deposits

To manage this risk arising from cash and cash equivalents and restricted cash, the Group mainly transacts with banks with high credit rating. There has been no recent history of default in relation to these financial institutions. The expected credit loss is minimal.

(ii) Credit risk of trade receivables and contract assets

There is no concentration of credit risk with respect to trade receivables from third party customers as the Group has wide-ranging customers in different industries. In respect of customers with a poor credit history, sending written payment reminders, shortening or cancellation of credit periods and other follow-up actions are taken to ensure the overall credit risk of the Group is limited to a controllable extent. In addition, the Group has closely monitored the credit qualities and the collectability of these receivables at the end of each reporting period to ensure that adequate impairment losses are made. In this regard, the Directors of the Company consider that the expected credit risks of them are adequately covered.

– II-39 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The Group has applied the IFRS 9 simplified approach to measuring ECLs which uses a lifetime ECLs for all trade receivables and contract assets. In calculating the expected credit loss rates, the Group considers historical loss rates, and adjusts for forward looking macroeconomic data. At the end of each reporting period, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

For trade receivables from related parties, the Group considers the counterparties with relatively good credit worthiness based on past experience and satisfactory settlement history. The Group assessed the ECLs for trade receivables from related parties was insignificant during the reporting period.

A default on trade receivables and contract assets is when the counterparty fails to make contractual payments when they fall due.

Trade receivables and contract assets are written off when there is no reasonable expectation of recovery.

On that basis, the loss allowance as at 31 December 2021, 2022 and 2023 and June 30, 2024 was determined as follows for both trade receivables and contract assets:

Assessed based on
grouping
– The third parties
– The related parties
Assessed individual
Assessed based on
grouping
– The third parties
– The related parties
Assessed individual

As at December 31, 2021
Gross amount
Loss
allowance
Expected
loss rate
Trade and
note
receivables
Contract
assets
RMB’000
RMB’000
RMB’000
%
31,164,003
1,041,152
478,183
1.48%
70,288
–
–
–
559,591
–
559,591
100.00%
31,793,882
1,041,152
1,037,774
As at December 31, 2022
Gross amount
Loss
allowance
Expected
loss rate
Trade and
note
receivables
Contract
assets
RMB’000
RMB’000
RMB’000
%
26,577,105
1,526,396
844,056
3.00%
60,228
–
–
–
719,588
–
719,588
100.00%
27,356,921
1,526,396
1,563,644

– II-40 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Assessed based on
grouping
– The third parties
– The related parties
Assessed individual
Assessed based on
grouping
– The third parties
– The related parties
Assessed individual

As at December 31, 2023
Gross amount
Loss
allowance
Expected
loss rate
Trade and
note
receivables
Contract
assets
RMB’000
RMB’000
RMB’000
%
25,957,399
1,636,144
700,939
2.54%
124,211
–
23,790
19.15%
657,488
–
657,488
100.00%
26,739,098
1,636,144
1,382,217
As at June 30, 2024
Gross amount
Loss
allowance
Expected
loss rate
Trade and
note
receivables
Contract
assets
RMB’000
RMB’000
RMB’000
%
26,398,002
2,043,192
820,157
2.88%
553,681
–
39,929
7.21%
482,863
–
482,863
100.00%
27,434,546
2,043,192
1,342,949

(iii) Credit risk of other receivables

Over the term of other receivables, the Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. To assess whether there is a significant increase in credit risk in other receivables, the Group compares the risk of a default occurring on the assets at the end of each reporting period with the risk of default at the date of initial recognition. It considers available, reasonable, supportive forward-looking information. Especially, the following indicators are incorporated:

external credit rating of the counterparty (as far as available);
actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations;
actual or expected significant changes in the operating results of the counterparty; and
significant expected changes in the performance and behavior of the counterparty, including changes in the payment status of the counterparty.

Based on historical experiences, other receivables from related parties were settled within 12 months after upon maturity hence the expected credit loss is minimal.

– II-41 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As stated in note 2.1(h), impairment on other receivables accounted as amortized cost is measured as either 12-month ECL or lifetime ECL. On such basis, the following table sets forth the loss allowance for other receivables as at December 31, 2021, 2022 and 2023 and June 30, 2024:

	Stage 1	Stage 2	Stage 3
	12-month	Lifetime	Lifetime
	ECL	ECL	ECL	Total
	RMB’000	RMB’000	RMB’000	RMB’000
As at December 31, 2021
Expected credit loss rate	0.67%	N/A	96.33%	5.60%
Gross carrying amounts	5,413,868	–	293,951	5,707,819
Allowance for impairment	(36,505)	–	(283,151)	(319,656)
As at December 31, 2022
Expected credit loss rate	0.73%	N/A	94.56%	8.82%
Gross carrying amounts	4,341,791	–	409,803	4,751,594
Allowance for impairment	(31,486)	–	(387,516)	(419,002)
As at December 31, 2023
Expected credit loss rate	0.76%	N/A	96.71%	7.66%
Gross carrying amounts	4,502,235	–	348,803	4,851,038
Allowance for impairment	(34,101)	–	(337,315)	(371,416)
As at June 30, 2024
Expected credit loss rate	0.57%	N/A	96.76%	8.63%
Gross carrying amounts	3,880,791	–	354,733	4,235,524
Allowance for impairment	(22,089)	–	(343,245)	(365,334)

(iv) Credit risk of loans and advances

Loans and advances are presented in prepayments, other receivables and other assets in the consolidated statements of financial position and subject to the expected credit loss model. The Group developed credit policies and operational implementation rules for loans and advances in accordance with the requirements of relevant state regulatory authorities, and implemented standardized management over the entire process of credit granting. In addition, the Group further improved the systems for credit risk monitoring and early warning and defective credit extension management. The Group actively responded to the changes in the credit environment, regularly analyzed the situation and dynamic of credit risks and took risk control measures on a forward-looking basis. The Group also established an optimization management mechanism for defective credit and accelerated the optimization progress of defective credit to avoid non-performing loans.

– II-42 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Liquidity risk

The Group aims to maintain sufficient cash and cash equivalents. Due to the dynamic nature of the underlying businesses, the Group maintains flexibility in funding by maintaining adequate balances of such.

The table below analyzes the Group’s financial liabilities by relevant maturity groupings based on the remaining period since the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows or the carrying amount of the financial liabilities to be delivered.

At December 31, 2021 Trade and other payables (excluding salaries, wages and benefits payables, tax payables and other non-financial liabilities) Borrowings Lease liabilities At December 31, 2022 Trade and other payables (excluding salaries, wages and benefits payables, tax payables and other non-financial liabilities) Borrowings Lease liabilities At December 31, 2023 Trade and other payables (excluding salaries, wages and benefits payables, tax payables and other non-financial liabilities) Borrowings Lease liabilities At June 30, 2024 Trade and other payables (excluding salaries, wages and benefits payables, tax payables and other non- financial liabilities) Borrowings Lease liabilities	Less than 1 year RMB’000 34,026,664 26,740,909 6,645,721 67,413,294 37,013,988 24,272,047 7,101,902 68,387,937 35,775,997 23,358,218 6,102,697 65,236,912 33,847,555 30,448,474 6,018,563 70,314,592	Between 1 and 2 years RMB’000 24,950 5,095,365 4,374,170 9,494,485 22,431 4,358,007 4,179,191 8,559,629 563 4,426,187 4,569,459 8,996,209 – 6,658,584 4,059,170 10,717,754	Between 2 and 5 years RMB’000 85,412 6,622,652 5,158,881 11,866,945 – 12,033,720 3,797,852 15,831,572 – 16,910,274 2,529,679 19,439,953 – 15,090,476 2,697,029 17,787,505	Over 5 years RMB’000 31,890 10,644,714 2,590,999 13,267,603 – 13,264,559 1,976,864 15,241,423 – 11,972,971 1,784,760 13,757,731 – 12,922,886 1,727,398 14,650,284	Total RMB’000 34,168,916 49,103,640 18,769,771 102,042,327 37,036,419 53,928,333 17,055,809 108,020,561 35,776,560 56,667,650 14,986,595 107,430,805 33,847,555 65,120,420 14,502,160 113,470,135	Carrying amount RMB’000 34,168,916 45,100,418 16,931,554
						96,200,888

						37,036,419 49,868,308 15,179,328
						102,084,055

						35,776,560 52,706,015 13,808,460
						102,291,035

						33,847,555 59,635,102 13,012,472
						106,495,129

– II-43 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

3.2 Capital management

The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as a going concern and to maintain healthy capital ratios in order to support its business and maximize shareholders’ value.

The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024.

The Group monitors capital on the basis of the asset-liability ratio and the asset-liability ratio as at December 31, 2021, 2022 and 2023 and June 30, 2024 were as follows:

				As at
	As	at December	31,	June 30,
	2021	2022	2023	2024
	RMB’000	RMB’000	RMB’000	RMB’000
Total assets	209,846,688	216,842,707	221,490,655	219,865,931
Total liabilities	111,984,735	118,556,658	118,206,995	120,954,581
Asset-liability ratio	53.37%	54.67%	53.37%	55.01%

3.3 Fair value estimation

The table below analyzes the Group’s financial instruments carried at fair value as at December 31, 2021, 2022 and 2023 and June 30, 2024 by level of the inputs to valuation techniques used to measure fair value. Such inputs are categorized into three levels within a fair value hierarchy as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

– II-44 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at December 31, 2021, 2022 and 2023 and June 30, 2024, the financial assets measured at fair value on a recurring basis by the above three levels were analyzed below:

	Level 1	Level 2	Level 3	Total
	RMB’000	RMB’000	RMB’000	RMB’000
As at December 31, 2021
Financial assets at FVPL	76	653,752	10,608,688	11,262,516
Financial assets at FVOCI	241,936	401,726	6,167,109	6,810,771
Financial liability at FVPL	–	(7,658)	–	(7,658)
As at December 31, 2022
Financial assets at FVPL	77	34,144	8,363,367	8,397,588
Financial assets at FVOCI	158,936	190,874	7,079,184	7,428,994
Financial liability at FVPL	–	(96,647)	–	(96,647)
As at December 31, 2023
Financial assets at FVPL	78	354	7,399,306	7,399,738
Financial assets at FVOCI	2,418,842	99,978	7,070,693	9,589,513
Financial liability at FVPL	–	(92,120)	–	(92,120)
As at June 30, 2024
Financial assets at FVPL	79	361	18,555,196	18,555,636
Financial assets at FVOCI	1,120,309	125,633	7,223,984	8,469,926
Financial liability at FVPL	–	(94,614)	–	(94,614)

The fair value of financial instruments traded in an active market is determined at the quoted market price; and the fair value of those not traded in an active market is determined by the Group using valuation technique. The valuation models used mainly comprise discounted cash flow model and market comparable company model. The major inputs of the valuation models include expected rate of return and discount of lack of market liquidity.

The changes in Level 3 assets are analyzed below:

Opening balance Additions Transfer to Level 1 Disposals/settlements Changes in fair value recognized in other comprehensive income Changes in fair value recognized in profit or loss Currency translation differences Closing balance	Financial assets at FVOCI Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 4,136,330 6,167,109 7,079,184 7,079,184 7,070,693 244,045 345,378 54,174 36,411 49,785 – – (139,189) – – (208,230) – – – (2,741) 2,101,185 (32,291) (32,059) (11,090) (53,867) – – – – – (106,221) 598,988 108,583 233,060 160,114 6,167,109 7,079,184 7,070,693 7,337,565 7,223,984	Financial assets at FVPL Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 7,108,374 10,608,688 8,363,367 8,363,367 7,399,306 118,054,239 151,670,310 94,261,361 57,214,184 41,922,732 – – (1,466,275) – – (115,098,767) (154,583,061) (94,296,231) (49,203,659) (30,926,271) – – – – – 545,877 644,337 446,569 277,288 150,447 (1,035) 23,093 90,515 84,068 8,982 10,608,688 8,363,367 7,399,306 16,735,248 18,555,196	Financial assets at FVPL Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 7,108,374 10,608,688 8,363,367 8,363,367 7,399,306 118,054,239 151,670,310 94,261,361 57,214,184 41,922,732 – – (1,466,275) – – (115,098,767) (154,583,061) (94,296,231) (49,203,659) (30,926,271) – – – – – 545,877 644,337 446,569 277,288 150,447 (1,035) 23,093 90,515 84,068 8,982 10,608,688 8,363,367 7,399,306 16,735,248 18,555,196
			18,555,196

– II-45 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The Group has assessed that the fair values of cash and cash equivalents, restricted bank deposits, trade receivables, trade and note payables, financial assets included in prepayments and other receivables, financial liabilities included in other payables and accruals, short-term bank borrowings and short-term debentures approximate to their carrying amounts largely due to the short-term maturities of these instruments. For the years ended December 31, 2021 and 2022, and the six months ended June 30, 2023 and 2024, there were no significant transfers among Level 1, 2 and 3 of fair value measurements. During the year ended December 31, 2023, the Group transferred a share investment from Level 3 to Level 1 as the underlying investment, initial public offering was completed during the year.

The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements and the sensitivity analysis of fair value to the inputs:

Fair value

								Range of inputs
					As at		Significant	(probability-	Sensitivity of fair
	As	at December	31,		June 30,	Valuation	unobservable	weighted	value to the
Description	2021	2022		2023	2024	technique(s)	input(s)	average)	input(s)
	RMB’000	RMB’000	RMB’000		RMB’000
Financial assets at FVPL
– Structured deposits and	9,730,665	7,353,162	6,543,851		17,771,963	Discounted cash	Expected rate of	1.91%-4.33%	10%
others						flow	return		increase/decrease
									in expected rate
									of return would
									result in
									increase/decrease
									in fair value by
									0.03%-0.04%
– Equity investment in	85,243	118,324	135,359		202,874	Recent	N/A	N/A	N/A
unlisted entities						transaction
						price
– Investments in funds and	792,780	891,881	720,096		580,359	Adjusted net	Adjusted net	N/A	10%
equity-class securities						assets value	assets value		increase/decrease
									in adjusted net
									assets value
									would result in
									increase/decrease
									in fair value by
									10%
Financial assets at FVOCI
– Equity investment in	4,275,449	471,988	4,960,693		5,066,450	Recent	N/A	N/A	N/A
unlisted entities						transaction
						price
	1,891,660	6,607,196	2,110,000		2,157,534	A combination of	Discount for lack	17%-21%	10%
						observable and	of marketability		increase/decrease
						unobservable			in discount for
						inputs			lack of
									marketability
									would result in
									decrease/increase
									in fair value by
									2.11%-2.49%

– II-46 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The Group makes estimates and judgements that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities in these financial statements. Estimates and judgements are continually assessed based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In the process of applying the Group’s accounting policies, management has made the following judgements and accounting estimation, which have the significant effect on the amounts recognized in the financial statements.

4.1 Critical accounting estimate and its key assumption

(a) Measurement of the expected credit losses

For financial assets and contract assets at amortized cost, the Group calculates expected credit losses based on exposure at default and expected credit loss rates.

The Group refers to internal historical information, such as credit losses, and considers the impact of historical credit loss experience according to current situation and forward-looking information to determine expected credit loss rates. And management takes the customer’s credit status, credit history, operating status as well as collaterals, the guarantee ability of the guarantor and other information into consideration.

The Group monitors and reviews relevant assumptions about expected credit losses regularly. Where there is a difference between the actual bad debts and the original estimate, such difference will affect the Group’s provision for bad debts of the above assets in the future period.

(b) Estimated impairment of long-term assets (other than goodwill)

The Group tests whether property, plant and equipment, right-of-use assets, investment properties, intangible assets (other than goodwill) and other non-current assets have been impaired in accordance with the accounting policy stated in Note 2.1(g) to the consolidated financial statements. The recoverable amount of the cash-generating unit has been determined based on the higher of its value in use and its fair value less costs of disposal. The cash flow projections used to determine the value in use of a cash-generating unit is based on significant assumptions, such as revenue growth rate, long term growth rate, gross margin rate, and discount rate applied to the projected cash flows. These assumptions may be affected by unexpected changes in future market or economic conditions.

(c) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. The recoverable amount of goodwill is determined at higher of fair value less costs of disposal and value in use amount. The calculations of value in use amount require use of estimates. The cash flow projections used to determine the value in use of a cash-generating unit is based on significant assumptions, such as revenue growth rate, net profit margins before tax and interests, and pre-tax discount rate applied to the projected cash flows. These assumptions may be affected by unexpected changes in future market or economic conditions.

– II-47 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(d) Fair value of financial instruments determined using valuation techniques

Fair value, in the absence of an active market, is estimated by using valuation techniques, applying currently applicable and sufficiently available data, and the valuation techniques supported by other information, mainly include market approach and income approach, reference to the recent arm’s length transactions, current market value of another instrument which is substantially the same, and by using the discounted cash flow analysis and option pricing models.

When using valuation techniques to determine the fair value of financial instruments, the Group would choose the input value in consistent with market participants, considering the transactions of related assets and liabilities. All related observable market parameters are considered in priority, including interest rate, foreign exchange rate, commodity prices and share prices or index. When related observable parameters are unavailable or inaccessible, the Group uses unobservable parameters and makes estimates for credit risk, market volatility and liquidity adjustments.

Using different valuation techniques and parameter assumptions may lead to significant difference of fair value estimation.

(e) Uncertain tax position and recognition of current and deferred income tax assets

The Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact current income tax and deferred income tax in the period in which such determination is made.

Deferred tax assets are recognized for unused tax losses and deductible temporary difference to the extent that it is probable that taxable profit will be available against which the losses and deductible temporary difference, and the carry forward of unused tax credits and unused tax losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies. To determine the future taxable profits, reference was made to the latest available profit forecast. The key assumptions adopted in the future taxable profit forecast include revenue growth rates and gross margin rates.

(f) Assessment of the fair value of identifiable net assets in acquisition transactions and goodwill recognition

As stated in Note 2.1(e), identifiable net assets acquired in a business combinations involving enterprises not under common control are recognized at the fair value at the acquisition date, and if the combination cost exceeds the Group’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognized as goodwill.

The assessment of the fair value of identifiable assets and liabilities involves critical estimates and judgements from management, in particular, the identification of intangible assets and the evaluation of their fair values, thereby affecting the recognition of goodwill. The assessment of the fair value of identifiable net assets on the acquisition date includes the identification of various kinds of assets, the selection of valuation methods, and the forecast of future cash flows, which involves critical estimates and judgements about the key assumptions including revenue growth rate, gross profit rate and discount rate. Different inputs used in the key assumptions may lead to significant differences between fair value estimates.

Significant merger and acquisition transactions for the Track Record Period are discussed in Note 35.

– II-48 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

4.2 Critical accounting judgements

(a) Judgements on whether the Group can exercise significant influence on invested entity

The Group adopts equity method to those entities that the Group has significant influence over. In assessing if the Group has such a kind of influence, management would normally consider one or more of the following facts and circumstances: (i) share rights of the investee entity; (ii) representation on the board of directors or equivalent governing body of the investee; (iii) participation in policy-making processes, including participation in decisions about dividends or other distributions; (iv) material transactions between the entity and its investee; (v) interchange of managerial personnel; or (vi) provision of essential technical information.

(b) Scope of consolidation

Consolidation is required only if control exists. The Group controls an investee when it has all the following: (i) power over the investee; (ii) exposure, or rights, to variable returns from its involvement with the investee; and (iii) the ability to use its power over the investee to affect the amount of the Group’s returns. These three factors cannot be considered in isolation by the Group in its assessment of control over an investee. Where the factors of control are not apparent, significant judgement is applied in the assessment, which is based on an overall analysis of all of the relevant facts and circumstances.

The Group is required to reassess whether it controls the investee if facts and circumstances indicate a change to one or more of the three factors of control.

5. REVENUE AND SEGMENT INFORMATION

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (“ CODM ”). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive management team that makes strategic decisions.

(a) CODM reviews the Group’s internal reporting in order to assess performance and allocate resources:

The CODM identifies operating segments based on the internal organization structure, management requirements and internal reporting system, and discloses segment information of reportable segments which is determined on the basis of operating segments. An operating segment is a component of the Group that satisfies all of the following conditions: (1) the component is able to earn revenues and incur expenses from its ordinary activities; (2) whose operating results are regularly reviewed by the Group’s management to make decisions about resources to be allocated to the segment and to assess its performance, and (3) for which the information on financial position, operating results and cash flows is available to the Group. If two or more operating segments have similar economic characteristics and satisfy certain conditions, they are aggregated into one single operating segment.

The segment businesses are separately presented as the express and freight delivery segment, the intra-city on-demand delivery segment, and supply chain and international segment. The types of services from which reportable segments derive revenue are listed below:

Express and freight delivery segment, which provides time-define express, economy express, cold chain and pharmaceuticals logistics service, as well as freight service;
Intra-city on-demand delivery segment, which provides intra-city delivery for merchants and consumers, and last-mile delivery services;
Supply chain and international segment, which provides supply chain services, international express service and international freight forwarding service.

– II-49 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Except for the above business segments, the other segments did not have a material impact on the Group’s operating outcome, and as such are not separately presented. Management monitors the operating results of the Group’s business units separately for the purpose of making decisions regarding resource allocation and performance assessment.

Segment performance is assessed based on key performance indicators. Transfer prices between operating segments are based on the amount stated in the contracts agreed by both sides.

During the Track Record Period, no revenue from a single customer exceeded 10% or more of the total revenue.

Due to the merger of the delivery business and the adjustment of organizational structure, the reportable segments of the Group have changed in 2023. The express delivery segment and the freight delivery segment are merged as the express and freight delivery segment. The segment information for the years ended December 31, 2021 and 2022 has been restated.

Segment information for the year ended December 31, 2021 is as follows:

Revenue from external customers. Inter-segment revenue Cost of revenue Profit/(loss) before income tax Income tax expenses/(credits) Net profit/(loss) Total assets Total liabilities Depreciation of right-of-use assets_(Note 8) Depreciation and amortization (excluding right-of-use assets)(Note 8)_ Net impairment losses/(reversal of impairment losses) on financial assets and contract assets	Express and freight delivery segment RMB’000 160,675,510 4,469,180 142,949,707 6,158,308 2,453,678 3,704,630 86,084,379 61,031,675 4,895,430 5,433,844 422,004	Intra-city on-demand delivery segment RMB’000 5,117,905 3,056,509 8,084,231 (902,586) (3,735) (898,851) 4,064,825 899,472 16,013 55,420 4,477	Supply chain and international segment Undistributed units Inter-segment elimination RMB’000 RMB’000 RMB’000 39,979,632 1,413,600 – 474,522 9,465,837 (17,466,048) 36,206,076 9,445,563 (15,276,474) 1,075,252 1,435,765 (15,883) 459,978 463,838 (4,997) 615,274 971,927 (10,886) 60,901,366 135,950,893 (77,154,775) 34,391,955 67,699,240 (52,037,607) 761,724 298,510 (194,999) 753,735 646,469 (11,244) 190,763 (24,457) (12,936)	Total RMB’000 207,186,647 – 181,409,103 7,750,856 3,368,762
				4,382,094

				209,846,688

				111,984,735

				5,776,678 6,878,224 579,851

– II-50 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Segment information for the year ended December 31, 2022 is as follows:

Revenue from external customers. Inter-segment revenue Cost of revenue. Profit/(loss) before income tax Income tax expenses/(credits) Net profit/(loss) Total assets Total liabilities Depreciation of right-of-use assets_(Note 8) Depreciation and amortization (excluding right-of-use assets)(Note 8)_ Net impairment losses/(reversal of impairment losses) on financial assets and contract assets	Express and freight delivery segment RMB’000 169,764,860 7,074,141 152,057,092 8,434,175 2,914,825 5,519,350 94,676,009 66,504,698 5,800,435 6,831,767 331,656	Intra-city on-demand delivery segment RMB’000 6,567,057 3,698,616 9,853,707 (288,847) (1,944) (286,903) 3,956,639 1,086,136 21,799 78,662 1,968	Supply chain and international segment Undistributed units Inter-segment elimination RMB’000 RMB’000 RMB’000 89,916,599 1,241,898 – 700,298 12,070,206 (23,543,261) 82,247,056 11,801,763 (21,481,610) 2,938,917 (46,779) 370 993,055 75,290 (304) 1,945,862 (122,069) 674 66,235,754 148,072,567 (96,098,262) 53,540,703 79,713,800 (82,288,679) 1,597,267 291,696 (419,837) 1,551,214 500,387 (11,958) 384,491 107,231 (176)	Total RMB’000 267,490,414 – 234,478,008 11,037,836 3,980,922
				7,056,914

				216,842,707

				118,556,658

				7,291,360 8,950,072 825,170

Segment information for the year ended December 31, 2023 is as follows:

Revenue from external customers. Inter-segment revenue Cost of revenue. Profit/(loss) before income tax Income tax expenses/(credits) Net profit/(loss) Total assets Total liabilities Depreciation of right-of-use assets_(Note 8) Depreciation and amortization (excluding right-of-use assets)(Note 8)_ Net (reversal of impairment losses)/impairment losses on financial assets and contract assets	Express and freight delivery segment RMB’000 186,890,137 12,231,353 171,457,160 10,602,204 2,149,342 8,452,862 103,171,690 72,928,079 5,891,828 7,741,137 (111,509)	Intra-city on-demand delivery segment RMB’000 7,371,250 5,029,453 11,606,756 48,327 (2,268) 50,595 4,038,844 1,218,597 27,188 52,445 3,668	Supply chain and international segment Undistributed units Inter-segment elimination RMB’000 RMB’000 RMB’000 62,859,302 1,288,714 – 733,174 4,430,069 (22,424,049) 58,474,528 4,372,537 (20,135,303) (328,849) 143,788 21,035 205,652 229,825 (7,655) (534,501) (86,037) 28,690 64,308,117 186,550,844 (136,578,840) 53,658,452 84,432,442 (94,030,575) 1,707,837 258,621 (672,411) 1,651,130 683,365 (22,033) 82,879 67,481 (75,999)	Total RMB’000 258,409,403 – 225,775,678 10,486,505 2,574,896
				7,911,609

				221,490,655

				118,206,995

				7,213,063 10,106,044 (33,480)

– II-51 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Segment information for the six months ended June 30, 2023 is as follows:

Revenue from external customers. Inter-segment revenue Cost of revenue. Profit/(loss) before income tax Income tax expenses Net profit/(loss) Total assets Total liabilities Depreciation of right-of-use assets_(Note 8) Depreciation and amortization (excluding right-of-use assets)(Note 8)_ Net (reversal of impairment losses)/impairment losses on financial assets and contract assets	Express and freight delivery segment RMB’000 (Unaudited) 90,058,986 5,283,237 81,461,676 5,412,546 1,292,805 4,119,741 100,203,287 68,606,705 2,993,058 3,587,688 (83,592)	Intra-city on-demand delivery segment RMB’000 (Unaudited) 3,406,837 2,355,281 5,378,602 31,344 1,030 30,314 3,888,569 986,574 13,137 30,545 3,921	Supply chain and international segment Undistributed units Inter-segment elimination RMB’000 RMB’000 RMB’000 (Unaudited) (Unaudited) (Unaudited) 30,283,063 616,712 – 314,393 7,209,639 (15,162,550) 28,088,020 6,766,077 (13,926,642) (221,230) 146,029 51,661 86,845 130,843 14,587 (308,075) 15,186 37,074 64,443,045 152,920,781 (103,415,251) 51,662,519 84,017,974 (88,439,410) 872,028 101,324 (293,265) 801,513 405,049 (12,970) 34,806 40,848 (62,005)	Total RMB’000 (Unaudited) 124,365,598 – 107,767,733 5,420,350 1,526,110
				3,894,240

				218,040,431

				116,834,362

				3,686,282 4,811,825 (66,022)

Segment information for the six months ended June 30, 2024 is as follows:

Revenue from external customers. Inter-segment revenue Cost of revenue. Profit/(loss) before income tax Income tax expenses/(credits) Net profit/(loss) Total assets Total liabilities Depreciation of right-of-use assets_(Note 8) Depreciation and amortization (excluding right-of-use assets)(Note 8)_ Net (reversal of impairment losses)/impairment losses on financial assets and contract assets	Express and freight delivery segment RMB’000 96,820,175 6,340,531 87,693,668 5,842,143 1,046,410 4,795,733 106,075,703 71,306,112 2,885,910 3,279,143 41,848	Intra-city on-demand delivery segment RMB’000 4,022,952 2,855,518 6,407,319 80,572 18,398 62,174 4,117,315 1,355,096 8,252 24,862 3,835	Supply chain and international segment Undistributed units Inter-segment elimination RMB’000 RMB’000 RMB’000 32,914,104 652,489 – 447,518 2,545,639 (12,189,206) 30,636,136 2,472,311 (11,113,153) (236,145) 606,498 26,989 338,068 156,427 (168) (574,213) 450,071 27,157 64,294,283 162,056,001 (116,677,371) 56,051,461 91,319,878 (99,077,966) 836,623 141,397 (443,266) 808,175 1,250,722 (2,168) 122,046 19,289 (27,146)	Total RMB’000 134,409,720 – 116,096,281 6,320,057 1,559,135
				4,760,922

				219,865,931

				120,954,581

				3,428,916 5,360,734 159,872

– II-52 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) The Group’s business operates in three main geographical areas, even though they are managed on a worldwide basis.

The Group’s revenue by geographical areas is analyzed based on the following criteria:

Revenue from operations within the PRC excluding Hong Kong, Macau and Taiwan is classified as within mainland China operations. Revenue from operations within Hong Kong, Macau and Taiwan regions is classified as Hong Kong, Macau, Taiwan operations while revenue from operations in other overseas markets is classified as other international operations.

Within mainland China Hong Kong, Macau, Taiwan Other international	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 189,029,359 208,562,879 223,510,607 5,080,415 10,389,782 9,134,850 13,076,873 48,537,753 25,763,946 207,186,647 267,490,414 258,409,403	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 107,339,757 115,996,449 4,334,903 4,512,024 12,690,938 13,901,247 124,365,598 134,409,720	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 107,339,757 115,996,449 4,334,903 4,512,024 12,690,938 13,901,247 124,365,598 134,409,720
			134,409,720

The non-current assets information below is based on the locations of the assets and exclude financial instruments and deferred tax assets.

Within mainland China Hong Kong, Macau, Taiwan Other international	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 85,441,357 93,479,838 95,919,000 5,973,014 5,686,663 5,293,887 14,170,557 16,360,578 16,575,617 105,584,928 115,527,079 117,788,504	As at June 30, 2024 RMB’000 93,823,901 5,206,336 16,528,093
		115,558,330

– II-53 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Disaggregation of revenue

In the following table, revenue of the Group from contracts with customers is disaggregated by timing of satisfaction of performance obligations. The table also includes a reconciliation to the segment information in respect of revenue of the Group that is disclosed in the operating segment Note 5(a).

Revenue from main operations Including: At a point in time Over time Lease income and others Revenue from other operations Including: At a point in time Over time Lease income and others Revenue from main operations Including: At a point in time Over time Lease income and others Revenue from other operations Including: At a point in time Over time Lease income and others	Year ended December 31, 2021 Logistics and freight forwarding services Sales of goods Others RMB’000 RMB’000 RMB’000 – 1,764,253 363,090 203,690,237 – 887,645 – – 123,143 203,690,237 1,764,253 1,373,878 – – 62,830 – – 130,881 – – 164,568 – – 358,279 203,690,237 1,764,253 1,732,157 Year ended December 31, 2022 Logistics and freight forwarding services Sales of goods Others RMB’000 RMB’000 RMB’000 – 3,899,692 351,610 262,079,740 – 561,990 – – 229,734 262,079,740 3,899,692 1,143,334 – – 69,014 – – 83,124 – – 215,510 – – 367,648 262,079,740 3,899,692 1,510,982	Total RMB’000 2,127,343 204,577,882 123,143
		206,828,368

		62,830 130,881 164,568
		358,279

		207,186,647

		Total RMB’000 4,251,302 262,641,730 229,734
		267,122,766

		69,014 83,124 215,510
		367,648

		267,490,414

– II-54 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Year ended December 31, 2023

Revenue from main operations Including: At a point in time Over time Lease income and others. Revenue from other operations Including: At a point in time Over time Lease income and others Revenue from main operations Including: At a point in time Over time Lease income and others Revenue from other operations Including: At a point in time Over time Lease income and others	Logistics and freight forwarding services Sales of goods Others RMB’000 RMB’000 RMB’000 – 5,626,072 306,401 251,127,665 – 619,037 – – 307,405 251,127,665 5,626,072 1,232,843 – – 100,907 – – 136,465 – – 185,451 – – 422,823 251,127,665 5,626,072 1,655,666 Six months ended June 30, 2023 Logistics and freight forwarding services Sales of goods Others RMB’000 RMB’000 RMB’000 (Unaudited) (Unaudited) (Unaudited) – 2,754,076 198,951 120,855,099 – 188,156 – – 152,156 120,855,099 2,754,076 539,263 – – 33,265 – – 75,201 – – 108,694 – – 217,160 120,855,099 2,754,076 756,423	Total RMB’000 5,932,473 251,746,702 307,405
		257,986,580

		100,907 136,465 185,451
		422,823

		258,409,403

		Total RMB’000 (Unaudited) 2,953,027 121,043,255 152,156
		124,148,438

		33,265 75,201 108,694
		217,160

		124,365,598

– II-55 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Revenue from main operations Including: At a point in time Over time Lease income and others Revenue from other operations Including: At a point in time Over time Lease income and others	Six months ended June 30, 2024 Logistics and freight forwarding services Sales of goods Others RMB’000 RMB’000 RMB’000 – 3,216,236 208,598 130,207,965 – 413,658 – – 174,027 130,207,965 3,216,236 796,283 Six months ended June 30, 2024 Logistics and freight forwarding services Sales of goods Others RMB’000 RMB’000 RMB’000 – – 34,616 – – 72,947 – – 81,673 – – 189,236 130,207,965 3,216,236 985,519	Total RMB’000 3,424,834 130,621,623 174,027
		134,220,484

		Total RMB’000 34,616 72,947 81,673
		189,236

		134,409,720

6. OTHER INCOME

Government grants (Note (a)) Dividend income Others	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,787,501 2,255,563 1,983,551 31,853 13,811 2,438 270,180 225,285 295,213 2,089,534 2,494,659 2,281,202	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 752,237 404,911 2,535 426 125,632 167,413 880,404 572,750	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 752,237 404,911 2,535 426 125,632 167,413 880,404 572,750
			572,750

(a) The government grants were mainly incentives provided by local government authorities in the PRC, including various forms of government financial incentives and tax preferences, to reward the Group’s support and contribution to the development of local economies. As at December 31, 2021, 2022 and 2023 and June 30, 2024, there were no unfulfilled conditions or contingencies relating to these government grants.

– II-56 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

7. OTHER GAINS, NET

Gains/(losses) on disposal of investments in associates and joint ventures Gains on disposal of investments in subsidiaries (Note 36(b)) Fair value changes in financial assets at FVPL (Losses)/gains on disposal of property, plant and equipment, right-of-use assets and other non-current assets Impairment of inventories, property, plant and equipment and other non-current assets Net exchange (losses)/gains Others	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 68,695 282,906 21,441 1,808,638 32,314 268,204 553,638 660,867 529,513 (195,841) (52,305) (53,891) (7,106) (55,212) (62,390) (103,533) 117,314 (96,381) (167,956) (154,622) (198,022) 1,956,535 831,262 408,474	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) (1,941) 45,307 244,982 91,950 290,377 294,669 (64,740) 39,097 (2,026) (1,309) (133,258) 4,703 (76,322) (180,624) 257,072 293,793	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) (1,941) 45,307 244,982 91,950 290,377 294,669 (64,740) 39,097 (2,026) (1,309) (133,258) 4,703 (76,322) (180,624) 257,072 293,793
			293,793

8. EXPENSES BY NATURE

Expenses included in cost of revenue, selling and marketing expenses, general and administrative expenses and research and development expenses are analyzed as follows:

Labour outsourcing cost Transportation expenses Transportation outsourcing cost Employee benefit expenses (Note 9) Depreciation of right-of-use assets (Note 15) Depreciation and amortization (excluding right-of-use assets) Rent and venue usage expenses Auditor’s remuneration Listing expenses Others	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 71,489,843 77,832,877 88,615,879 34,888,921 68,640,219 44,578,173 35,965,273 38,204,742 38,352,035 27,830,922 31,445,636 31,776,779 5,776,678 7,291,360 7,213,063 6,878,224 8,950,072 10,106,044 4,473,486 6,481,654 7,100,757 47,147 66,148 64,508 – – 579 14,166,622 18,266,998 21,010,813 201,517,116 257,179,706 248,818,630	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 41,999,886 46,426,202 21,120,397 24,040,343 18,187,306 18,725,511 16,270,441 16,170,240 3,686,282 3,428,916 4,811,825 5,360,734 3,381,074 3,599,946 26,959 18,899 – – 9,851,266 10,147,109 119,335,436 127,917,900	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 41,999,886 46,426,202 21,120,397 24,040,343 18,187,306 18,725,511 16,270,441 16,170,240 3,686,282 3,428,916 4,811,825 5,360,734 3,381,074 3,599,946 26,959 18,899 – – 9,851,266 10,147,109 119,335,436 127,917,900
			127,917,900

(a) Government grants amounting to approximately RMB401,821,000, RMB214,306,000, RMB164,944,000, RMB97,625,000 and RMB511,053,000, respectively, had been recognized as deduction in the cost of revenue for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024.

– II-57 –

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9. EMPLOYEE BENEFIT EXPENSES

(a) Employee benefit expenses are analyzed as follows:

Salaries, wages and bonuses Share-based compensation expenses (Note 33) Contributions to pension plans Other employee benefits	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 22,787,118 26,185,228 26,127,739 548,329 157,684 543,046 1,093,173 1,288,190 1,301,124 3,402,302 3,814,534 3,804,870 27,830,922 31,445,636 31,776,779	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 13,338,273 13,461,623 344,053 59,037 646,349 699,571 1,941,766 1,950,009 16,270,441 16,170,240	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 13,338,273 13,461,623 344,053 59,037 646,349 699,571 1,941,766 1,950,009 16,270,441 16,170,240
			16,170,240

(b) Directors’ and supervisors’ remuneration

Year ended December 31, 2021 Executive Directors Mr. Wang Wei Mr. Ho Chit (i) Mr. Lin Zheying (vi) Mr. Zhang Yichen (vi) Mr. Deng Weidong (vi) Mr. Liu Chengwei (vi) Mr. Chan Fei (vi) Mr. Lo Sai Lai (vi) Ms. NG Wai Ting (ii) Independent non-executive Directors Mr. Zhou Zhonghui (viii) Mr. Jin Li (viii) Mr. Dicky Perter Yip (viii) Mr. Chow Wing Kin Anthony (viii). Supervisors Mr. Shum Tze Leung (xi) Ms. Wang Jia (iii) Mr. Liu Jilu Ms. Li Juhua Ms. Chu Yan (iii) Mr. Sun Xun (iv) Ms. Li Li (iv) Total	Fees RMB’000 – 84 – – – – 58 – – – – – – – – – – – – – 142	Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) RMB’000 1,122 1,667 – – – – 6,278 – 2,953 680 680 680 680 1,244 539 – 1,282 708 147 858 19,518	Share-based compensation expense RMB’000 – – – – – – – – – – – – – – – – – – – – –	Total RMB’000 1,122 1,751 – – – – 6,336 – 2,953 680 680 680 680 1,244 539 – 1,282 708 147 858
				19,660

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Year ended December 31, 2022 Executive Directors Mr. Wang Wei Mr. Ho Chit (i) Ms. Wang Xin (v) Mr. Zhang Dong (xii) Mr. Lin Zheying (vi) Mr. Zhang Yichen (vi) Mr. Deng Weidong (vi) Mr. Liu Chengwei (vi) Mr. Chan Fei (vi) Mr. Lo Sai Lai (vi) Independent non-executive Directors Mr. CHAN Charles Sheung Wai (vii) Mr. Lee Carmelo Ka Sze (vii) Dr. Ding Yi (vii) Mr. Zhou Zhonghui (viii) Mr. Jin Li (viii) Mr. Dicky Perter Yip (viii) Mr. Chow Wing Kin Anthony (viii) Supervisors Mr. Shum Tze Leung (xi) Ms. Wang Jia Mr. Liu Jilu Ms. Li Juhua Mr. Zhang Shun (ix) Ms. Chu Yan (x) Total	Fees RMB’000 – 404 – – – – – – 284 – – – – – – – – – – – – – – 688	Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) RMB’000 702 6,986 84 65 – – – – 3,683 – 22 22 22 680 680 680 680 634 890 – 1,380 16 1,862 19,088	Share-based compensation expense RMB’000 – 2,287 2,287 2,287 – – – – 2,287 – – – – – – – – – – – – 356 – 9,504	Total RMB’000 702 9,677 2,371 2,352 – – – – 6,254 – 22 22 22 680 680 680 680 634 890 – 1,380 372 1,862
				29,280

– II-59 –

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Year ended December 31, 2023 Executive Directors Mr. Wang Wei Mr. Ho Chit (i) Ms. Wang Xin (v) Mr. Zhang Dong (xii) Independent non-executive Directors Mr. CHAN Charles Sheung Wai (vii) Mr. Lee Carmelo Ka Sze (vii) Dr. Ding Yi (vii) Supervisors Mr. Shum Tze Leung (xi) Ms. Wang Jia (iii) Ms. Li Juhua Mr. Zhang Shun (ix) Mr. Liu Jilu Total Six months ended June 30, 2023 Executive Directors Mr. Wang Wei Mr. Ho Chit (i) Ms. Wang Xin (v) Mr. Zhang Dong (xii) Independent non-executive Directors Mr. CHAN Charles Sheung Wai (vii) Mr. Lee Carmelo Ka Sze (vii) Dr. Ding Yi (vii) Supervisors Mr. Shum Tze Leung (xi) Ms. Wang Jia Ms. Li Juhua Mr. Zhang Shun (ix) Mr. Liu Jilu Total	Fees RMB’000 – 426 – – – – – – – – – – 426 Fees RMB’000 (Unaudited) – – – – – – – – – – – – –	Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) RMB’000 1,161 6,240 3,120 2,626 680 680 680 641 1,148 1,692 766 – 19,434 Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) RMB’000 (Unaudited) 581 3,160 1,591 1,339 340 340 340 320 574 832 383 – 9,800	Share-based compensation expense RMB’000 – 2,945 2,945 2,945 – – – – – – – – 8,835 Share-based compensation expense RMB’000 (Unaudited) – 1,918 1,918 1,918 – – – – – – – – 5,754	Total RMB’000 1,161 9,611 6,065 5,571 680 680 680 641 1,148 1,692 766 –
				28,695

				Total RMB’000 (Unaudited) 581 5,078 3,509 3,257 340 340 340 320 574 832 383 –
				15,554

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Six months ended June 30, 2024 Executive Directors Mr. Wang Wei Mr. Ho Chit (i) Ms. Wang Xin (v) Mr. Zhang Dong (xii) Independent non-executive Directors Mr. CHAN Charles Sheung Wai (vii) Mr. Lee Carmelo Ka Sze (vii) Dr. Ding Yi (vii) Supervisors Mr. Shum Tze Leung (xi) Ms. Wang Jia (iii) Ms. Li Juhua Mr. Zhang Shun (ix) Mr. Liu Jilu Total	Fees RMB’000 – – – – – – – – – – – – –	Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) RMB’000 581 3,979 1,655 1,685 340 340 340 315 647 950 314 – 11,146	Share-based compensation expense RMB’000 – 1,153 168 1,153 – – – – – – – – 2,474	Total RMB’000 581 5,132 1,823 2,838 340 340 340 315 647 950 314 –
				13,620

(i) Mr. Ho Chit was appointed as the executive director of the Company on November 15, 2021.
(ii) Ms. Ng Wai Ting resigned as the executive director of the Company on September 28, 2021.
(iii) Ms. Chu Yan and Ms. Wang Jia were appointed as supervisors of the Company on April 8, 2021 and April 9, 2021, respectively.
(iv) Mr. Sun Xun and Ms. Li Li resigned as supervisors of the Company on March 16, 2021.
(v) Ms. Wang Xin was appointed as an executive director on December 20, 2022.
(vi) Mr. Lin Zheying, Mr. Zhang Yichen, Mr. Deng Weidong, Mr. Liu Chengwei, Mr. Chan Fei, and Mr. Lo Sai Lai retired as executive directors on December 20, 2022.
(vii) Mr. CHAN Charles Sheung Wai, Mr. Lee Carmelo Ka Sze and Dr. Ding Yi were appointed as independent non-executive directors on December 20, 2022.
(viii) Mr. Zhou Zhonghui, Mr. Jin Li, Mr. Dicky Perter Yip and Mr. Chow Wing Kin Anthony retired as independent non-executive directors on December 20, 2022.
(ix) Mr. Zhang Shun was appointed as supervisor on December 20, 2022.
(x) Ms. Chu Yan retired as supervisor on December 20, 2022.
(xi) Mr. Shum Tze Leung resigned as supervisor on May 7, 2024.
(xii) Mr. Zhang Dong was appointed as an executive director on December 20, 2022 and resigned as an executive director on June 26, 2024.

– II-61 –

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(c) Five highest paid individuals

The five individuals whose emoluments were the highest in the Group for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 include 1, 2, 3, 3 and 2 directors respectively whose emoluments are reflected in the analysis shown in Note 9(b), respectively. The emoluments paid to the remaining 4, 3, 2, 2 and 3 individuals during the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, respectively are as follows:

Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) Share-based compensation expenses	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 15,916 16,833 6,142 – 6,860 5,890 15,916 23,693 12,032	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 3,688 6,137 1,368 2,439 5,056 8,576	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 3,688 6,137 1,368 2,439 5,056 8,576
			8,576

The emoluments of the above individuals fell within the following bands:

Number of individuals

				Six months ended
	Year ended December 31,			June 30,
	2021	2022	2023	2023	2024
				(Unaudited)
HK$2,000,001 to HK$2,500,000	–	–	–	–	2
HK$3,000,001 to HK$3,500,000	–	–	–	–	1
HK$3,500,001 to HK$4,000,000	–	–	–	1	–
HK$4,000,001 to HK$4,500,000	–	–	–	1	–
HK$4,500,001 to HK$5,000,000	3	–	–	–	–
HK$5,000,001 to HK$5,500,000	1	–	–	–	–
HK$6,000,001 to HK$6,500,000	–	–	1	–	–
HK$7,000,001 to HK$7,500,000	–	–	1	–	–
HK$8,000,001 to HK$8,500,000	–	2	–	–	–
HK$11,000,001 to HK$11,500,000	–	1	–	–	–

– II-62 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

10. FINANCE INCOME AND COSTS

Finance income: Interest income on deposits in financial institutions Finance costs: Interest expenses on borrowings Interest expenses on lease liabilities (Note 15(b)) Less: Interest capitalized Finance costs, net	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 187,794 345,662 633,373 1,015,357 1,570,293 1,808,850 553,613 609,652 564,374 (6,007) (125,585) (103,524) 1,562,963 2,054,360 2,269,700 1,375,169 1,708,698 1,636,327	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 292,849 415,064 866,130 997,654 289,013 262,301 (62,470) (29,037) 1,092,673 1,230,918 799,824 815,854	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 292,849 415,064 866,130 997,654 289,013 262,301 (62,470) (29,037) 1,092,673 1,230,918 799,824 815,854
			1,230,918
			815,854

The average capitalization rates for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 used to determine the amount of borrowing costs eligible for capitalization were 4.61%, 2.24%, 2.75%, 2.75% and 2.37%, respectively.

11. INCOME TAX EXPENSE

The following table sets forth the component of income tax expense of the Group for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, respectively:

Current income tax Deferred income tax (Note 18)	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 2,848,895 3,948,002 3,340,596 519,867 32,920 (765,700) 3,368,762 3,980,922 2,574,896	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 1,606,404 1,421,021 (80,294) 138,114 1,526,110 1,559,135	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 1,606,404 1,421,021 (80,294) 138,114 1,526,110 1,559,135
			1,559,135

– II-63 –

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Reconciliation between income tax expenses and profit before income tax at applicable tax rates for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024:

Profit before income tax Tax at the statutory tax rate of 25% (Note (a)) Effect of different tax rates available to different jurisdictions (Note (b)) Tax effect of non-taxable income Adjustments of prior years Tax effect of non-deductible expenses. Tax effect of preferential tax rate (Note (a)) Tax losses and temporary differences not recognized Reversal of previously recognized tax losses and temporary differences Utilization of previously unrecognized tax losses and temporary differences Recognition of tax losses and temporary differences not recognized in prior years	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 7,750,856 11,037,836 10,486,505 1,937,714 2,759,459 2,621,626 (161,640) (190,484) (211,891) (228,428) (215,471) (109,495) (28,965) (38,780) (32,451) 217,891 246,471 296,602 (185,747) (322,841) (364,417) 1,472,000 1,353,001 879,651 429,211 518,108 30,752 (60,088) (85,016) (378,149) (23,186) (43,525) (157,332) 3,368,762 3,980,922 2,574,896	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 5,420,350 6,320,057 1,355,088 1,580,014 (139,095) (83,097) (105,771) (42,290) (20,207) (19,336) 82,601 136,854 (78,994) (77,079) 571,816 348,380 – 27,527 (139,328) (213,421) – (98,417) 1,526,110 1,559,135	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 5,420,350 6,320,057 1,355,088 1,580,014 (139,095) (83,097) (105,771) (42,290) (20,207) (19,336) 82,601 136,854 (78,994) (77,079) 571,816 348,380 – 27,527 (139,328) (213,421) – (98,417) 1,526,110 1,559,135
			1,580,014 (83,097) (42,290) (19,336) 136,854 (77,079) 348,380 27,527 (213,421) (98,417)
			1,559,135

(a) PRC corporate income tax (“PRC CIT”)

The income tax rate applicable to the principal subsidiaries in Mainland China is 25%, except for certain subsidiaries which enjoy a preferential income tax rate.

For the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, several subsidiaries in PRC were qualified as small and micro-sized enterprises, which enjoyed a corporate income tax rate of 2.5%-10%.

Besides, certain Group’s subsidiaries benefit from a preferential tax rate of 15% under the CIT Law if they are qualified as high and new technology enterprises under relevant regulations or located in applicable PRC regions, such as certain western regions and special economic zone, as specified in the relevant catalogue of encouraged industries, subject to certain general restrictions described in the CIT Law and the related regulations.

– II-64 –

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(b) Corporate income tax in Hong Kong and other jurisdictions

(i) Hong Kong profits tax

Hong Kong profits tax has been provided for at the rate of 8.25% on assessable profits up to HK$2,000,000 and 16.5% on any assessable profits over HK$2,000,000 for the Track Record Period.

(ii) Corporate income tax in other jurisdictions

Income tax on profit arising from other jurisdictions, including Macau, Singapore, Japan, South Korea, the United States and Thailand, has been calculated on the estimated assessable profit for the year at the respective rates prevailing in the relevant jurisdictions, ranging from 12% to 24% for the Track Record Period.

(c) OECD Pillar Two model rules

The Group is within the scope of the Pillar Two model rules released by the Organization for Economic Co-operation and Development (“ OECD ”). The Pillar Two legislation had become effective in certain jurisdictions on January 1, 2024 during the Track Record Period. The Group applies the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12. Under the Pillar Two legislation, the Group is liable to pay a top-up tax for difference between its Global Anti-Base Erosion (“ GloBE ”) effective tax rate in each jurisdiction and the 15% minimum rate. The Group management’s assessment indicates that the quantitative impact of the Pillar Two legislation is insignificant to the Group.

12. DIVIDENDS

Dividends declared and paid to the equity shareholders of the Company for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 are as follows:

Final dividend in respect of the previous year, declared and paid during the following year (tax inclusive) Dividend per share (RMB cents)	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,499,992 874,518 1,213,616 33 18 25	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 1,213,616 2,889,210 25 60	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 1,213,616 2,889,210 25 60

			60

In addition to the above dividends, an interim dividend for the six months ended June 30, 2024 of RMB40 cents per ordinary share (tax inclusive) and a special dividend of RMB1 per ordinary share (tax inclusive) were approved by the shareholders at the first extraordinary general meeting on October 29, 2024. The dividends were not recognized as liabilities as at June 30, 2024.

– II-65 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

13. EARNINGS PER SHARE

(a) Basic

Basic earnings per share (“ EPS ”) is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the Track Record Period.

				Six months ended	Six months ended
	Year	ended December	31,	June	30,
	2021	2022	2023	2023	2024
				(Unaudited)
Profit attributable to owners
of the Company (RMB’000)	4,731,979	6,227,058	8,234,493	4,176,282	4,806,714
Weighted average number of
shares in issue	4,603,725,167	4,868,676,530	4,850,497,640	4,854,831,499	4,829,672,799
Basic EPS (RMB per share)	1.03	1.28	1.70	0.86	1.00

(b) Diluted

The share options granted by the Company have potential dilutive effect on the EPS. Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding by the assumption of the conversion of all potential dilutive ordinary shares arising from share options. For the six months ended June 30, 2024, the share options granted by the Company had anti-dilutive effect on the EPS.

Profit attributable to owners of the Company (RMB’000) Profit attributable to owners of the Company for the calculation of Diluted EPS (RMB’000) Weighted average number of shares in issue. Adjustment for share options Weighted average number of shares for the calculation of Diluted EPS Diluted EPS (RMB per share)	Year ended December 31, 2021 2022 2023 4,731,979 6,227,058 8,234,493 4,731,979 6,227,058 8,234,493 4,603,725,167 4,868,676,530 4,850,497,640 – 5,063,256 4,484,314 4,603,725,167 4,873,739,786 4,854,981,954 1.03 1.28 1.70	Six months ended June 30, 2023 2024 (Unaudited) 4,176,282 4,806,714 4,176,282 4,806,714 4,854,831,499 4,829,672,799 10,249,816 – 4,865,081,315 4,829,672,799 0.86 1.00	Six months ended June 30, 2023 2024 (Unaudited) 4,176,282 4,806,714 4,176,282 4,806,714 4,854,831,499 4,829,672,799 10,249,816 – 4,865,081,315 4,829,672,799 0.86 1.00

			4,829,672,799 –
			4,829,672,799

			1.00

– II-66 –

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					Total	RMB’000		45,868,609	19,986,486	11,935,207	(2,113,378)	(1,992,293)	(2,057,284)	(154,835)	71,472,512		16,865,242	5,420,824	3,529,648	(1,762,720)	(200,652)	7,149	(37,288)	23,822,203		47,650,309
				Construction	in progress	RMB’000		5,379,854	15,239,042	468,618	(11,553)	(288,613)	(12,216,145)	–	8,571,203		–	–	–	–	–	–	–	–		8,571,203
				Leasehold	improvements	RMB’000		3,891,525	103,976	509,851	(234,588)	(8,085)	1,309,940	(7,802)	5,564,817		2,594,327	790,229	216,261	(179,519)	(5,914)	–	(3,683)	3,411,701		2,153,116
			Office and	other	equipment	RMB’000		6,171,337	411,226	1,018,850	(372,241)	(2,103)	3,005,293	(14,587)	10,217,775		2,705,472	1,094,167	631,638	(283,357)	(316)	74,436	(11,245)	4,210,795		6,006,980
			Computers	and electronic	equipment	RMB’000		3,615,717	847,928	783,226	(336,997)	(24,081)	46,036	(13,615)	4,918,214		2,331,366	730,260	524,446	(281,262)	(12,176)	103	(7,402)	3,285,335		1,632,879
				Transportation	vehicles	RMB’000		5,475,630	1,203,826	1,000,553	(844,015)	–	195,491	(20,292)	7,011,193		3,680,986	996,388	543,972	(781,147)	–	2,088	(7,695)	4,434,592		2,576,601
			Machinery	and	equipment	RMB’000		4,456,899	442,803	2,299,823	(149,073)	(5,412)	1,884,117	(20,279)	8,908,878		1,178,125	474,482	919,449	(81,166)	(384)	(76,627)	(1,200)	2,412,679		6,496,199
Aircraft,	aircraft	engines,	rotables and	high-value	maintenance	RMB’000		9,171,985	182,844	–	(152,030)	–	1,991,236	–	11,194,035		3,504,465	1,065,352	–	(130,542)	–	–	–	4,439,275		6,754,760
				Freehold land	and buildings	RMB’000	Cost	At January 1, 2021 7,705,662	Additions_(Note (c))_ 1,554,841	Business combinations 5,854,286	Disposals (12,881)	Disposal of subsidiaries (1,663,999)	Transfer/reclassification 1,726,748	Currency translation differences (78,260)	At December 31, 2021 15,086,397	Accumulated depreciation	At January 1, 2021 870,501	Charge for the year_(Note (b))_ 269,946	Business combinations 693,882	Disposals (25,727)	Disposal of subsidiaries (181,862)	Transfer/reclassification 7,149	Currency translation differences (6,063)	At December 31, 2021 1,627,826	Net book value	*At December 31, 2021(Note (a))* 13,458,571**

– II-67 –

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						Total	RMB’000		71,472,512	16,560,067	41,258	(2,441,969)	(285,731)	97,821	725,522	86,169,480		23,822,203	6,939,689	20,739	(1,821,842)	(16,365)	34,242	255,635	29,234,301		–	31,512	31,512		56,903,667
					Construction	in progress	RMB’000		8,571,203	12,409,834	–	(45,782)	–	(9,784,250)	–	11,151,005		–	–	–	–	–	–	–	–		–	1,145	1,145		11,149,860
					Leasehold	improvements	RMB’000		5,564,817	145,557	4,848	(116,079)	(2,328)	785,575	32,637	6,415,027		3,411,701	994,873	1,589	(97,891)	(637)	–	8,989	4,318,624		–	–	–		2,096,403
				Office and	other	equipment	RMB’000		10,217,775	397,571	8,764	(529,045)	(2,561)	816,237	56,137	10,964,878		4,210,795	1,637,702	7,525	(411,367)	(916)	–	36,311	5,480,050		–	28,734	28,734		5,456,094
				Computers	and electronic	equipment	RMB’000		4,918,214	805,552	8,200	(638,286)	(339)	12,538	39,939	5,145,818		3,285,335	705,541	4,895	(428,779)	(157)	–	28,836	3,595,671		–	–	–		1,550,147
					Transportation	vehicles	RMB’000		7,011,193	1,050,894	2,230	(797,371)	(172)	16,253	77,786	7,360,813		4,434,592	1,074,432	663	(708,837)	(146)	–	43,274	4,843,978		–	–	–		2,516,835
				Machinery	and	equipment	RMB’000		8,908,878	482,359	6,134	(245,140)	(883)	1,746,892	152,266	11,050,506		2,412,679	850,448	6,067	(141,927)	(196)	–	83,407	3,210,478		–	1,633	1,633		7,838,395
Aircraft,	aircraft	engines,	rotables and	high-value	maintenance	(Note (d))	RMB’000		11,194,035	140,452	–	(70,253)	–	2,079,544	–	13,343,778		4,439,275	1,170,795	–	(33,028)	–	–	–	5,577,042		–	–	–		7,766,736
					Freehold land	and buildings	RMB’000		15,086,397	1,127,848	11,082	(13)	(279,448)	4,425,032	366,757	20,737,655		1,627,826	505,898	–	(13)	(14,313)	34,242	54,818	2,208,458		–	–	–		18,529,197
								Cost	As at January 1, 2022	Additions_(Note (c))_	Business combinations	Disposals	Disposal of subsidiaries	Transfer/reclassification	Currency translation differences	As at December 31, 2022	Accumulated depreciation	As at January 1, 2022	Charge for the year_(Note (b))_	Business combinations	Disposals	Disposal of subsidiaries	Transfer/reclassification	Currency translation differences	As at December 31, 2022	Accumulated impairment	As at January 1, 2022	Charge for the year	As at December 31, 2022	Net book value	*As at December 31, 2022(Note (a))***

– II-68 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

						Total	RMB’000		86,169,480	12,205,916	111,953	(3,183,702)	(162,483)	(843,218)	170,327	94,468,273		29,234,301	7,612,186	39,060	(2,547,035)	(67,926)	23,923	50,383	34,344,892		31,512	17,443	(29,990)	18,965		60,104,416
					Construction	in progress	RMB’000		11,151,005	8,109,500	–	(94,900)	–	(15,115,397)	–	4,050,208		–	–	–	–	–	–	–	–		1,145	17,443	(1,264)	17,324		4,032,884
					Leasehold	improvements	RMB’000		6,415,027	135,955	–	(114,085)	(49,432)	938,141	10,214	7,335,820		4,318,624	974,378	–	(66,885)	(36,657)	–	4,682	5,194,142		–	–	–	–		2,141,678
				Office and	other	equipment	RMB’000		10,964,878	381,899	5,204	(530,076)	(39,382)	69,534	(12,604)	10,839,453		5,480,050	1,588,891	4,380	(415,938)	(11,066)	–	(7,615)	6,638,702		28,734	–	(28,726)	8		4,200,743
				Computers	and electronic	equipment	RMB’000		5,145,818	425,863	2,924	(588,257)	(8,462)	134,166	13,971	5,126,023		3,595,671	725,963	2,749	(549,407)	(6,592)	–	11,529	3,779,913		–	–	–	–		1,346,110
					Transportation	vehicles	RMB’000		7,360,813	1,189,776	3,884	(1,144,248)	(2,652)	399	26,979	7,434,951		4,843,978	1,011,297	3,479	(1,061,855)	(2,046)	–	11,488	4,806,341		–	–	–	–		2,628,610
				Machinery	and	equipment	RMB’000		11,050,506	346,663	15,557	(304,089)	(18,218)	3,838,146	70,881	14,999,446		3,210,478	1,253,916	10,726	(145,085)	(4,888)	–	38,454	4,363,601		1,633	–	–	1,633		10,634,212
Aircraft,	aircraft	engines,	rotables and	high-value	maintenance	(Note (d))	RMB’000		13,343,778	343,764	–	(385,452)	–	2,194,943	–	15,497,033		5,577,042	1,361,913	–	(295,085)	–	–	–	6,643,870		–	–	–	–		8,853,163
					Freehold land	and buildings	RMB’000		20,737,655	1,272,496	84,384	(22,595)	(44,337)	7,096,850	60,886	29,185,339		2,208,458	695,828	17,726	(12,780)	(6,677)	23,923	(8,155)	2,918,323		–	–	–	–		26,267,016
								Cost	As at January 1, 2023	Additions_(Note (c))_	Business combinations	Disposals	Disposal of subsidiaries	Transfer/reclassification	Currency translation differences	As at December 31, 2023	Accumulated depreciation	As at January 1, 2023	Charge for the year_(Note (b))_	Business combinations	Disposals	Disposal of subsidiaries	Transfer/reclassification	Currency translation differences	As at December 31, 2023	Accumulated impairment	As at January 1, 2023	Charge for the year	Disposals	As at December 31, 2023	Net book value	*As at December 31, 2023(Note (a))***

– II-69 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

						Total	RMB’000		94,468,273	4,578,547	9,794	(1,430,156)	(331,182)	(481,938)	(5,961)	96,807,377		34,344,892	4,021,903	7,143	(1,094,276)	(11,043)	(36,935)	(3,075)	37,228,609		18,965	885	(18,209)	1,641		59,577,127
					Construction	in progress	RMB’000		4,050,208	2,732,537	–	(28,906)	(18,209)	(3,796,514)	–	2,939,116		–	–	–	–	–	–	–	–		17,324	885	(18,209)	–		2,939,116
					Leasehold	improvements	RMB’000		7,335,820	123,483	–	(132,526)	(3,130)	429,960	89,782	7,843,389		5,194,142	535,193	–	(85,715)	(2,312)	–	82,969	5,724,277		–	–	–	–		2,119,112
				Office and	other	equipment	RMB’000		10,839,453	72,492	2,113	(404,656)	–	18,364	(8,165)	10,519,601		6,638,702	646,211	1,513	(260,926)	–	–	(17,000)	7,008,500		8	–	–	8		3,511,093
				Computers	and electronic	equipment	RMB’000		5,126,023	165,954	3,739	(142,336)	–	19,056	(22,979)	5,149,457		3,779,913	336,799	2,992	(141,933)	–	–	(20,018)	3,957,753		–	–	–	–		1,191,704
					Transportation	vehicles	RMB’000		7,434,951	293,188	3,936	(528,198)	–	–	(2,052)	7,201,825		4,806,341	562,419	2,632	(503,281)	–	–	(4,071)	4,864,040		–	–	–	–		2,337,785
				Machinery	and	equipment	RMB’000		14,999,446	139,515	6	(148,807)	–	655,384	(88,827)	15,556,717		4,363,601	829,503	6	(68,139)	–	–	(36,312)	5,088,659		1,633	–	–	1,633		10,466,425
Aircraft,	aircraft	engines,	rotables and	high-value	maintenance	(Note (d))	RMB’000		15,497,033	162,499	–	(34,354)	–	828,980	35	16,454,193		6,643,870	681,070	–	(34,257)	–	–	7	7,290,690		–	–	–	–		9,163,503
					Freehold land	and buildings	RMB’000		29,185,339	888,879	–	(10,373)	(309,843)	1,362,832	26,245	31,143,079		2,918,323	430,708	–	(25)	(8,731)	(36,935)	(8,650)	3,294,690		–	–	–	–		27,848,389
								Cost	As at January 1, 2024	Additions_(Note (c))_	Business combinations	Disposals	Disposal of subsidiaries	Transfer/reclassification	Currency translation differences	As at June 30, 2024	Accumulated depreciation	As at January 1, 2024	Charge for the period_(Note (b))_	Business combinations	Disposals	Disposal of subsidiaries	Transfer/reclassification	Currency translation differences	As at June 30, 2024	Accumulated impairment	As at January 1, 2024	Charge for the period	Disposal of subsidiaries	As at June 30, 2024	Net book value	*As at June 30, 2024(Note (a))***

– II-70 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(a) Certain property, plant and equipment with a net carrying amount of approximately RMB1,688,091,000, RMB486,847,000, RMB809,139,000 and RMB498,743,000, as at December 31, 2021, 2022 and 2023 and June 30, 2024 respectively, were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).
(b) Depreciation amounting to approximately RMB5,378,748,000, RMB6,854,857,000, RMB7,586,164,000 and RMB4,016,667,000 respectively, had been recognized in consolidated statements of profit or loss, for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 respectively.
(c) The additions of buildings for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 mainly included the acquisition of assets through acquisition of subsidiaries (Note 35(b)).

15. LEASE

This note provides information for leases where the Group is a lessee.

(a) Amounts recognized in the consolidated statements of financial position

The Group

Right-of-use assets Buildings Leasehold land and land use rights Motor vehicles Equipment and others. Lease liabilities Current Non-current	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 16,575,376 14,974,570 13,692,555 6,553,640 6,749,573 6,816,476 622,039 416,262 333,921 28,612 38,943 47,095 23,779,667 22,179,348 20,890,047 5,989,616 6,596,956 5,769,965 10,941,938 8,582,372 8,038,495 16,931,554 15,179,328 13,808,460	As at June 30, 2024 RMB’000 12,849,813 6,852,959 238,615 31,091
		19,972,478

		5,540,079 7,472,393
		13,012,472

Additions to the right-of-use assets during 2021, 2022 and 2023 and the six months ended June 30, 2024 were approximately RMB16,418,758,000, RMB6,501,031,000, RMB6,804,625,000 and RMB3,050,180,000 respectively, out of which approximately RMB3,973,368,000 related to the acquisition of subsidiaries for the year ended December 31, 2021.

Leasehold land and land use rights with a net carrying amount of approximately RMB232,730,000, RMB247,556,000, RMB292,495,000 and RMB261,868,000, as at December 31, 2021, 2022 and 2023 and June 30, 2024 respectively, were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).

– II-71 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The Company

As at December 31, 2021, 2022 and 2023 and June 30, 2024, the net carrying amounts of right-of-use assets of the Company were approximately RMB383,348,000, RMB368,022,000, RMB354,760,000 and RMB348,129,000 respectively. The balances mainly composed of land use rights.

(b) Amounts recognized in the consolidated statements of profit or loss

The consolidated statements of profit or loss show the following amounts relating to leases:

Depreciation charge of right-of-use assets Buildings Leasehold land and land use rights Motor vehicles Equipment and others Interest expenses (Note 10) Expense relating to short-term leases and low-value assets (included in costs and expenses) Total cash outflow for leases (included in operating and financing cash outflow)	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 5,578,854 6,924,830 6,874,516 146,136 188,008 191,595 45,481 165,813 126,643 6,207 12,709 20,309 5,776,678 7,291,360 7,213,063 553,613 609,652 564,374 2,016,142 3,620,688 3,601,571 9,124,700 11,687,763 11,582,911	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 3,517,226 3,238,874 78,142 97,150 84,600 79,772 6,314 13,120 3,686,282 3,428,916 289,013 262,301 1,774,416 1,885,251 5,645,946 5,703,150	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (Unaudited) 3,517,226 3,238,874 78,142 97,150 84,600 79,772 6,314 13,120 3,686,282 3,428,916 289,013 262,301 1,774,416 1,885,251 5,645,946 5,703,150
			3,428,916

			262,301 1,885,251 5,703,150

The Group has various lease contracts that have not yet commenced as at December 31, 2021, 2022, and 2023 and June 30, 2024. The future lease payments for these non-cancellable lease contracts are as below:

Within 1 year (including 1 year) Between 1 and 2 years (including 2 years) Between 2 and 3 years (including 3 years) Over 3 years	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 888,382 986,197 1,344,393 182,883 259,841 458,299 131,357 200,248 560,409 109,290 192,415 2,834,483 1,311,912 1,638,701 5,197,584	As at June 30, 2024 RMB’000 901,267 464,460 489,738 2,717,203
		4,572,668

– II-72 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

16. INVESTMENT PROPERTIES

Cost At the beginning of the year/period Additions (Note (a)) Business combinations Disposal of subsidiaries Transfer/reclassification Exchange adjustment At the end of the year/period Accumulated depreciation At the beginning of the year/period Charge for the year/period Disposal of subsidiaries Transfer/reclassification Exchange adjustment At the end of the year/period Net book value At the end of the year/period *(Note (b))*	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 2,447,796 5,019,928 5,088,473 – 349,430 709,420 1,355,725 – – (1,293,030) (219,035) (1,548) 2,523,424 (97,880) 944,698 (13,987) 36,030 1,054 5,019,928 5,088,473 6,742,097 228,391 169,695 213,107 60,382 92,568 125,712 (143,800) (10,027) (45) 25,830 (41,780) (16,471) (1,108) 2,651 1,074 169,695 213,107 323,377 4,850,233 4,875,366 6,418,720	As at June 30, 2024 RMB’000 6,742,097 1,952 – (186,147) 550,816 (14,232)
		7,094,486
		323,377 77,093 (10,498) 41,541 4,433
		435,946
		6,658,540

(a) The additions for the years ended December 31, 2022 and 2023 mainly included the acquisition of assets through acquisition of subsidiaries (Note 35(b)).
(b) Certain investment properties with a net carrying amount of approximately RMB224,440,000, RMB104,571,000, RMB111,124,000, and RMB110,919,000 as at December 31, 2021, 2022 and 2023 and June 30, 2024, respectively were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).
(c) Valuation processes of the Group

The fair values of the investment properties were estimated by management or independent professional property valuers as at December 31, 2021, 2022, and 2023 and June 30, 2024. The valuations are derived using direct comparison method and income capitalization method respectively. Direct comparison method is based on comparing the property to be valued directly with other comparable properties, which have recently been transacted. Income capitalization method is based on the capitalization of the net rental income derived from the existing leases and/or achievable in existing market with reversionary income potential by adopting appropriate capitalization rates. Capitalization is estimated by valuer based on the risk profile of the properties being valued.

– II-73 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The fair values of the investment properties were set out as follows:

										As at
					As	at	December	31,		June 30,
					2021		2022		2023	2024
					RMB’000		RMB’000		RMB’000	RMB’000
Investment	properties	at	fair	value	5,716,845		6,119,056		7,937,199	8,111,995

(d) Leasing arrangements

The Group leases various offices and warehouses to lessees under non-cancellable operating lease agreements with rentals receivable monthly. The lease terms are mainly between 1 year and 5 years, and the majority of lease agreements are renewable at the end of the lease period at market rates. Minimum lease payments receivable on leases of investment properties are as follows:

Land and buildings: Within 1 year (including 1 year) Between 1 and 2 years (including 2 years) Between 2 and 3 years (including 3 years) Between 3 and 4 years (including 4 years) Between 4 and 5 years (including 5 years) Over 5 years	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 206,427 228,038 371,269 157,562 185,848 240,171 104,871 134,539 146,234 46,772 179,036 90,435 32,972 60,581 56,615 15,104 246,444 206,636 563,708 1,034,486 1,111,360	As at June 30, 2024 RMB’000 411,962 308,779 194,476 103,679 64,969 177,293
		1,261,158

– II-74 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

17. INTANGIBLE ASSETS

Development expenditures RMB’000 Cost As at January 1, 2021 540,903 Additions 1,429,608 Business combinations – Disposals – Disposal of subsidiaries (76,996) Transfer/reclassification (1,550,279) Currency translation differences – As at December 31, 2021 343,236 Accumulated amortization As at January 1, 2021 – Charge for the year – Business combinations – Disposals – Disposal of subsidiaries – Currency translation differences – As at December 31, 2021 – Impairment As at January 1, 2021 – Charge for the year – As at December 31, 2021 – Net book value As at December 31, 2021 343,236	Goodwill RMB’000 3,379,576 – 4,146,684 – – – (151,995) 7,374,265 – – – – – – – 2,435 – 2,435 7,371,830	Customer relationships RMB’000 2,590,205 – 2,493,495 – – – (106,928) 4,976,772 280,861 176,897 – – – (10,727) 447,031 – – – 4,529,741	Software RMB’000 4,554,340 44,913 31,843 (220,436) (102,591) 1,550,279 (1,540) 5,856,808 1,965,003 1,053,768 22,539 (113,609) (52,770) (1,024) 2,873,907 54,186 – 54,186 2,928,715	Trademarks RMB’000 224,021 2,381 4,314,215 – (9) – (78,760) 4,461,848 28,191 220,924 65,803 – (2) (4,520) 310,396 – – – 4,151,452	Others RMB’000 104,359 70,704 130,730 – (979) – (2,720) 302,094 31,111 18,598 93,577 – (224) (1,608) 141,454 – – – 160,640	Total RMB’000 11,393,404 1,547,606 11,116,967 (220,436) (180,575) – (341,943)
						23,315,023
						2,305,166 1,470,187 181,919 (113,609) (52,996) (17,879)
						3,772,788
						56,621 –
						56,621
						19,485,614

– II-75 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Development expenditures RMB’000 Cost As at January 1, 2022 343,236 Additions 1,266,410 Business combinations – Disposals (40,985) Disposal of subsidiaries – Transfer/reclassification (1,256,904) Currency translation differences – As at December 31, 2022 311,757 Accumulated amortization As at January 1, 2022 – Charge for the year – Disposals – Currency translation differences – As at December 31, 2022 – Impairment As at January 1, 2022 – Charge for the year – As at December 31, 2022 – Net book value As at December 31, 2022 311,757	Goodwill RMB’000 7,374,265 – 1,232,279 – – – 741,635 9,348,179 – – – – – 2,435 – 2,435 9,345,744	Customer relationships RMB’000 4,976,772 – 422,854 – – – 455,441 5,855,067 447,031 307,767 – 38,640 793,438 – – – 5,061,629	Software RMB’000 5,856,808 329,427 219 (278,574) – 1,256,904 17,557 7,182,341 2,873,907 1,472,238 (141,707) 9,934 4,214,372 54,186 10,409 64,595 2,903,374	Trademarks RMB’000 4,461,848 934 – (224) – – 424,792 4,887,350 310,396 235,963 (22) 38,028 584,365 – 4 4 4,302,981	Others RMB’000 302,094 5,607 23,414 (3,494) – – 9,534 337,155 141,454 31,139 (487) 5,916 178,022 – 6 6 159,127	Total RMB’000 23,315,023 1,602,378 1,678,766 (323,277) – – 1,648,959
						27,921,849
						3,772,788 2,047,107 (142,216) 92,518
						5,770,197
						56,621 10,419
						67,040
						22,084,612

– II-76 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Development expenditures RMB’000 Cost As at January 1, 2023 311,757 Additions 1,077,980 Business combinations – Disposals (7,525) Disposal of subsidiaries – Transfer/reclassification (1,252,367) Currency translation differences – As at December 31, 2023 129,845 Accumulated amortization As at January 1, 2023 – Charge for the year – Business combinations – Disposals – Disposal of subsidiaries – Currency translation differences – As at December 31, 2023 – Impairment As at January 1, 2023 – Charge for the year – Disposals – As at December 31, 2023 – Net book value As at December 31, 2023 129,845	Goodwill RMB’000 9,348,179 – 85,219 – (10,618) – 150,091 9,572,871 – – – – – – – 2,435 – – 2,435 9,570,436	Customer relationships RMB’000 5,855,067 – – – – – 97,023 5,952,090 793,438 335,626 – – – 21,276 1,150,340 – – – – 4,801,750	Software RMB’000 7,182,341 99,543 14 (210,858) (193,930) 1,252,367 4,670 8,134,147 4,214,372 1,780,594 8 (144,377) (75,249) 2,709 5,778,057 64,595 38,853 (6,020) 97,428 2,258,662	Trademarks RMB’000 4,887,350 797 11 (92) – – 77,967 4,966,033 584,365 247,462 – (22) – 10,526 842,331 4 – – 4 4,123,698	Others RMB’000 337,155 20,943 – (2,284) – – 2,526 358,340 178,022 32,068 – (567) – 2,204 211,727 6 – – 6 146,607	Total RMB’000 27,921,849 1,199,263 85,244 (220,759) (204,548) – 332,277
						29,113,326
						5,770,197 2,395,750 8 (144,966) (75,249) 36,715
						7,982,455
						67,040 38,853 (6,020)
						99,873
						21,030,998

– II-77 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Development expenditures RMB’000 Cost As at January 1, 2024 129,845 Additions 300,011 Business combinations – Disposals (25,682) Disposal of subsidiaries – Transfer/reclassification (314,119) Currency translation differences – As at June 30, 2024 90,055 Accumulated amortization As at January 1, 2024 – Charge for the period – Business combinations – Disposals – Disposal of subsidiaries – Currency translation differences – As at June 30, 2024 – Impairment As at January 1, 2024 – Charge for the period – Disposals – As at June 30, 2024 – Net book value As at June 30, 2024 90,055	Goodwill RMB’000 9,572,871 – 74,785 – – – 216,201 9,863,857 – – – – – – – 2,435 – – 2,435 9,861,422	Customer relationships RMB’000 5,952,090 – 13,253 – – – 122,433 6,087,776 1,150,340 170,010 – – – 17,679 1,338,029 – – – – 4,749,747	Software RMB’000 8,134,147 17,832 1,464 (97,292) – 314,119 (3,476) 8,366,794 5,778,057 947,330 1,076 (76,181) – (2,288) 6,647,994 97,428 – (13,779) 83,649 1,635,151	Trademarks RMB’000 4,966,033 3,296 – (1,228) – – 116,207 5,084,308 842,331 121,335 – (601) – 19,237 982,302 4 – – 4 4,102,002	Others RMB’000 358,340 1,852 11,629 (421) – – 1,647 373,047 211,727 16,057 – (294) – 1,216 228,706 6 – – 6 144,335	Total RMB’000 29,113,326 322,991 101,131 (124,623) – – 453,012
						29,865,837
						7,982,455 1,254,732 1,076 (77,076) – 35,844
						9,197,031
						99,873 – (13,779)
						86,094
						20,582,712

– II-78 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(a) Recognition of goodwill

Goodwill is recognized in connection with business acquisitions. The balance of goodwill increased significantly from approximately RMB3,377,141,000 as at January 1, 2021 to RMB7,371,830,000 as at December 31, 2021, mainly due to the acquisition of Kerry Logistics Network Ltd. (“ KLN ”), which is listed on the Main Board of The Stock Exchange of Hong Kong Limited, in September 2021. The balance increased to approximately RMB9,345,744,000 as at December 31, 2022 mainly due to the acquisition of Topocean and Pro-Med Technology Limited (“ Pro-Med ”) by KLN.

The carrying amount of goodwill allocated to the groups of Cash-Generating Units (“ CGU ”) are as follows:

KLN CGU Fenghao Supply Chain CGU KEX CGU HAVI Supply Chain CGU Others	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 4,071,759 5,708,450 5,889,255 2,768,759 3,033,680 3,082,119 – – – 330,462 362,117 367,896 200,850 241,497 231,166 7,371,830 9,345,744 9,570,436	As at June 30, 2024 RMB’000 6,031,214 3,154,175 63,889 376,494 235,650
		9,861,422

As stated in Note 2.1(g), goodwill would be tested for impairment annually, at the end of the reporting period. If the carrying amount exceeds its estimated recoverable amount, which is the higher of value in use and fair value less costs of disposal, the difference of which would be recognized in profit and loss immediately.

For the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024, the value in use calculations of Fenghao Supply Chain CGU used cash flow projections based on financial budgets approved by senior management covering a 7-to-8-year’s period, which was based on the contractual arrangements with vendors.

As disclosed in Note 35(a), the Group acquired KLN in 2021. KLN acquired Topocean and Pro-Med in 2022 and other subsidiaries in 2023. During the six months ended June 30, 2024, the balance of goodwill increased mainly due to the acquisition of 65% shares of Business By Air SAS (“ BBA ”). The management was of the view that the synergies among the operations of KLN, Topocean, Pro-Med, BBA and other subsidiaries acquired by KLN had gradually formed upon the completion of the abovementioned acquisitions. As a result, the Group regarded KLN, Topocean, Pro-Med, BBA and other subsidiaries acquired by KLN as one CGU.

During the six months ended June 30,2024, KLN distributed a special interim dividend by way of a distribution in specie of 907,200,000 shares of Kerry Express (Thailand) Public Company Limited (“ KEX ”) indirectly held by KLN (representing approximately 52.1% of all issued KEX shares). After the distribution, the Group received an aggregate of 467,373,855 KEX shares, representing approximately 26.8% of all issued KEX shares, triggering a mandatory tender offer to acquire all KEX shares in accordance with the requirements of the Thai Code (Securities and Exchange Act B.E. 2535 (1992) (as amended), Notification of Capital Market Supervisory Board Tor Jor. 12/2554 Re: Rules, Conditions and Procedures for the Acquisition of Securities for Business Takeover (as amended), and any other relevant rules, regulations, and notifications issued thereunder). The Group made a tender offer to acquire KEX shares with an offer price of THB5.50 per share. On March 26, 2024 (“ the date of reorganization ”), the abovementioned interim dividend distribution and tender offer were completed, and the Group acquired in aggregate 1,091,818,327 KEX shares, representing 62.7% of all issued KEX shares.

– II-79 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Upon completion of the above transactions, since KEX was no longer directly held and managed by KLN, the Group reclassified the KLN CGU into two separate CGUs, KEX and KLN (excluding KEX). The goodwill arising from the acquisition of KLN in 2021 was reallocated by the Group on the basis of the relative values of the operation of KLN CGU and KEX CGU as at the date of the reorganization, through which goodwill of approximately RMB63,889,000 was reallocated to KEX CGU.

(b)

Impairment tests

The following table sets out the key assumptions used for value in use calculations of KLN CGU and Fenghao Supply Chain CGU:

				Six months
				ended
	Year	ended December	31,	June 30,
	2021	2022	2023	2024
Revenue growth rate over the
forecast period	-1.90%~14.20%	-16.50%~17.00%	2.50%~16.64%	2.50%~29.69%
Terminal revenue growth rate	3.00%	2.00%~3.00%	2.00%~2.50%	2.00%~2.50%
Net profit margin before tax
and interests	2.00%~6.22%	-0.47%~7.16%	-0.20%~6.60%	-0.83%~6.61%
Pre-tax discount rate	13.37%	11.71%~14.10%	11.90%~14.00%	11.30%~13.45%

For the year ended December 31, 2021, the recoverable amount of KLN CGU was determined based on the closing stock price of KLN. For the years ended December 31, 2022 and 2023 and the six months ended June 30, 2024, the recoverable amount of KLN CGU was determined based on discounted cash flow method.

Various factors were taken into consideration when determine the appropriate terminal revenue growth rate used over the forecast period, including the long-term inflation rates of mainland China, Hong Kong SAR, Thailand and other southeast Asia areas, and US, etc. This growth rate does not exceed the long-term average growth rate for the market in which the relative business operates.

Management determined budgeted profit margins and revenue growth rates based on historical performance and its expectations of the market development.

The pre-tax discount rates reflected the current market assessment of the time value of money and the risks specific to the business.

(c) Impact of possible changes in key assumptions

The recoverable amount of KLN CGU is estimated to exceed its carrying amount at December 31, 2022 and 2023 and June 30, 2024 by approximately RMB4,279 million, RMB1,375 million and RMB456 million, respectively.

The recoverable amount of Fenghao Supply Chain CGU is estimated to exceed its carrying amount at December 31, 2021, 2022 and 2023 and June 30, 2024 by approximately RMB300 million, RMB267 million, RMB411 million and RMB1,293 million, respectively.

The management has considered and assessed reasonably possible changes for key assumptions and has not identified any instances that could cause the carrying amount of each CGU to exceed its respective recoverable amount.

– II-80 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The recoverable amount of each CGU would equal to its carrying amount if each key assumption was to change as follows with all other variables held constant:

KLN CGU

					As at
		As at December 31,			June 30,
		2022		2023	2024
Revenue growth rate over the forecast period		-19.56%~8.97%	8.98%~12.05%		5.69%~29.08%
Terminal revenue growth rate		0.34%		1.50%	1.86%
Net profit margin before tax and interests		4.88%~5.03%	4.76%~5.41%		5.03~5.53%
Pre-tax discount rate		15.56%		14.48%	13.60%
Fenghao Supply Chain CGU
					As at
		As at December 31,			June 30,
	2021	2022		2023	2024
Revenue growth rate over the
forecast period	-2.68%~13.36%	2.40%~16.57%	2.02%~16.19%		-0.88%~11.88%
Terminal revenue growth rate	2.49%	2.65%		1.89%	0.28%
Net profit margin before tax
and interests	2.47%~5.98%	-0.69%~6.93%	-0.55%~6.25%		-2.82%~5.58%
Pre-tax discount rate	13.82%	11.99%		12.41%	12.99%

18. DEFERRED TAX

Deferred tax assets and liabilities are offset when there is a legally enforceable right of offsetting and when the deferred income taxes relate to the same authority.

The net amounts of deferred tax assets and liabilities after offsetting are as follows:

Deferred tax assets Offsetting Net deferred tax assets Deferred tax liabilities Offsetting Net deferred tax liabilities	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 5,505,511 5,323,542 5,599,191 (3,921,033) (3,690,578) (3,335,321) 1,584,478 1,632,964 2,263,870 8,323,193 8,348,532 7,886,295 (3,921,033) (3,690,578) (3,335,321) 4,402,160 4,657,954 4,550,974	As at June 30, 2024 RMB’000 5,305,178 (3,251,608)
		2,053,570

		7,788,465 (3,251,608)
		4,536,857

– II-81 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(a) Deferred tax assets

The movements in deferred tax assets before offsetting for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 are as follows:

Amortization and depreciation RMB’000 As at January 1, 2021 176,077 Acquisition and disposal of subsidiaries, net 82,698 Credited/(charged) to consolidated statement of profit or loss 128,223 Currency translation differences 526 As at December 31, 2021 387,524 As at January 1, 2022 387,524 Acquisition and disposal of subsidiaries, net – Credited/(charged) to consolidated statement of profit or loss 112,805 Currency translation differences 2,014 As at December 31, 2022 502,343 As at January 1, 2023 502,343 Acquisition and disposal of subsidiaries, net – Credited/(charged) to consolidated statement of profit or loss 293,712 Charged to consolidated statement of other comprehensive income – Currency translation differences 53,833 As at December 31, 2023 849,888	Tax losses RMB’000 1,019,823 (33,423) (80,827) 2,577 908,150 908,150 – (228,736) 20,449 699,863 699,863 (3,156) 197,626 – 6,350 900,683	Accrued expenses RMB’000 211,149 (988) 20,795 – 230,956 230,956 186,774 124,598 9,115 551,443 551,443 (276) (72,605) – 1,515 480,077	Lease liabilities RMB’000 2,745,377 677,563 245,605 (18,630) 3,649,915 3,649,915 – (490,206) 27,465 3,187,174 3,187,174 – (188,653) – 174 2,998,695	Loss allowances for financial assets and non-current assets RMB’000 97,648 – 17,081 – 114,729 114,729 202 51,464 1,017 167,412 167,412 (24) 7,579 – (154) 174,813	Unrealised profits from internal transactions RMB’000 141,951 – 5,889 – 147,840 147,840 – (2,959) – 144,881 144,881 – (32,507) – – 112,374	Others RMB’000 93,473 365 (27,269) (172) 66,397 66,397 (1,024) 5,486 (433) 70,426 70,426 – 15,745 (1,839) (1,671) 82,661	Total RMB’000 4,485,498 726,215 309,497 (15,699)
							5,505,511

							5,505,511 185,952 (427,548) 59,627
							5,323,542

							5,323,542 (3,456) 220,897 (1,839) 60,047
							5,599,191

– II-82 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Amortization and depreciation RMB’000 As at January 1,2024 849,888 Acquisition and disposal of subsidiaries, net – Credited/(charged) to consolidated statement of profit or loss 41,421 Charged to consolidated statement of other comprehensive income – Currency translation differences (57,430) As at June 30, 2024 833,879	Tax losses RMB’000 900,683 – 1,841 – (16,594) 885,930	Accrued expenses RMB’000 480,077 – (57,151) – (3,180) 419,746	Lease liabilities RMB’000 2,998,695 – (212,491) – 11,788 2,797,992	Loss allowances for financial assets and non-current assets RMB’000 174,813 – 15,686 – 1,810 192,309	Unrealised profits from internal transactions RMB’000 112,374 – (18,272) – – 94,102	Others RMB’000 82,661 – (2,978) – 1,537	Total RMB’000 5,599,191 – (231,944) – (62,069) 5,305,178
						81,220

(b) Deferred tax liabilities

The movements in deferred tax liabilities before offsetting for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 are as follows:

At January 1, 2021 Acquisition and disposal of subsidiaries, net (Credited)/charged to consolidated statement of profit or loss Credited to consolidated statement of other comprehensive income Currency translation differences At December 31, 2021 At January 1, 2022 Acquisition and disposal of subsidiaries, net (Credited)/charged to consolidated statement of profit or loss Charged to consolidated statement of other comprehensive income Currency translation differences At December 31, 2022	Appreciation of assets acquired in business combinations RMB’000 613,611 2,294,078 (102,009) – (15,878) 2,789,802 2,789,802 240,193 (150,878) – 258,827 3,137,944	Accelerated tax depreciation RMB’000 905,252 42,127 492,444 – (10,199) 1,429,624 1,429,624 (116,460) 350,933 – 27,192 1,691,289	Changes in fair value RMB’000 362,977 – (3,287) (24,766) 8,454 343,378 343,378 – (4,381) 17,250 – 356,247	Income from equity restructuring RMB’000 – – 146,214 – – 146,214 146,214 – (146,214) – – –	Right-of-use assets RMB’000 2,573,319 678,119 302,199 – (19,186) 3,534,451 3,534,451 – (509,495) – 27,279 3,052,235	Others RMB’000 6,619 80,569 (6,197) – (1,267) 79,724 79,724 – 65,407 – (34,314) 110,817	Total RMB’000 4,461,778 3,094,893 829,364 (24,766) (38,076)
							8,323,193

							8,323,193 123,733 (394,628) 17,250 278,984
							8,348,532

– II-83 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

At January 1, 2023 Acquisition and disposal of subsidiaries, net (Credited)/charged to consolidated statement of profit or loss Charged to consolidated statement of other comprehensive income Currency translation differences At December 31, 2023 At January 1, 2024 Acquisition and disposal of subsidiaries, net (Credited)/charged to consolidated statement of profit or loss Charged to consolidated statement of other comprehensive income Currency translation differences At June 30, 2024	Appreciation of assets acquired in business combinations RMB’000 3,137,944 7,090 (213,057) – 39,566 2,971,543 2,971,543 5,652 (87,194) – 80,489 2,970,490	Accelerated tax depreciation RMB’000 1,691,289 (286) (113,859) – 29,458 1,606,602 1,606,602 – 213,130 – (81,784) 1,737,948	Changes in fair value RMB’000 356,247 – 2,578 353 – 359,178 359,178 – (11,734) (2,467) 174 345,151	Income from equity restructuring RMB’000 – – – – – – – – – – – –	Right-of-use assets RMB’000 3,052,235 – (222,122) – 448 2,830,561 2,830,561 – (218,712) – 15,106 2,626,955	Others RMB’000 110,817 – 1,657 – 5,937	Total RMB’000 8,348,532 6,804 (544,803) 353 75,409
						118,411	7,886,295

						118,411 – 10,680 – (21,170)	7,886,295 5,652 (93,830) (2,467) (7,185)
						107,921	7,788,465

(c) Deferred tax assets not recognized

Deferred tax assets should be recognized when it is probable that taxable profits or taxable temporary differences will be available against which the deferred tax asset can be utilised. Temporary differences will not be recognized as deferred tax assets if the management estimates that they will not be recovered from taxable profits generated from continuing operations in the foreseeable future. The following table sets forth the taxable temporary differences which were not recognized as deferred tax assets during the Track Record Period:

Tax losses Deductible temporary differences	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 14,124,575 20,086,770 18,873,618 658,298 1,133,829 1,113,144 14,782,873 21,220,599 19,986,762	As at June 30, 2024 RMB’000 18,770,064 1,439,951
		20,210,015

– II-84 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The expiry dates of the unrecognized tax losses as at December 31, 2021, 2022 and 2023 and June 30, 2024 are as follows:

2022 2023 2024 2025 2026 2027 2028 2029 No expiry date	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 310,912 – – 716,966 793,083 – 1,847,817 1,568,941 1,270,206 3,696,061 4,764,110 3,954,921 5,364,397 5,702,895 4,468,234 – 4,334,208 3,254,460 – – 2,146,335 – – – 2,188,422 2,923,533 3,779,462 14,124,575 20,086,770 18,873,618	As at June 30, 2024 RMB’000 – – 1,035,858 3,527,250 4,246,723 2,933,073 1,830,209 1,000,445 4,196,506
		18,770,064

19. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS

The Group

Non-current: Amounts due from related parties (Note 38(d)) Deferred pilot recruitment costs Prepayments (Note (a)) Loans to employees Finance lease receivables Others Less: Allowance for expected credit losses (Note (c))	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 59,725 70,794 1,363 632,486 836,956 805,415 1,746,758 622,763 944,833 139,422 57,058 15,575 471,491 247,003 89,380 407,484 442,403 492,174 3,457,366 2,276,977 2,348,740 (21,984) (19,613) (15,178) 3,435,382 2,257,364 2,333,562	As at June 30, 2024 RMB’000 71,751 774,186 845,134 84 57,311 494,494
		2,242,960 (13,646)
		2,229,314

– II-85 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Current: Amounts due from related parties (Note 38(d)) Value-added tax recoverable Prepayments (Note (b)) Prepayments for listing expenses Deposits Cash to collect on behalf of customers Loans to employees Prepaid corporate income tax Finance lease receivables Others Less: Allowance for expected credit losses (Note (c))	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 475,828 526,453 1,032,722 7,454,169 5,048,940 4,641,173 2,933,129 3,474,471 3,248,665 – – 25,068 1,413,769 1,532,034 1,523,589 729,705 382,300 659,441 97,833 55,604 26,454 236,852 768,131 551,327 249,416 376,512 226,652 1,699,827 1,036,855 1,043,853 15,290,528 13,201,300 12,978,944 (297,672) (399,389) (356,238) 14,992,856 12,801,911 12,622,706	As at June 30, 2024 RMB’000 275,159 3,862,436 2,793,230 26,870 1,535,427 720,869 16,197 367,288 207,982 1,213,812
		11,019,270 (351,688)
		10,667,582

(a) The balances of the Group mainly comprise prepaid construction equipment balances during the Track Record Period.
(b) The balances of the Group mainly comprise prepaid freight and transportation costs during the Track Record Period.
(c) Movements on the Group’s allowance for expected credit losses of other receivables are as follows:

At the beginning of the year/period (Reversal of)/allowance for impairment Written off as uncollectible Disposal of subsidiaries Exchange adjustment At the end of the year/period	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 361,828 319,656 419,002 (26,914) 151,139 8,446 (12,154) (49,832) (57,009) (784) (8,207) – (2,320) 6,246 977 319,656 419,002 371,416	As at June 30, 2024 RMB’000 371,416 (6,431) (1,273) – 1,622
		365,334

– II-86 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The Company

Non-current: Amounts due from subsidiaries Prepayments Current: Amounts due from subsidiaries Prepayments for listing expenses Value-added tax recoverable Prepayments Others Less: Provision for impairment	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 – – – 111 459 – 111 459 – 18,275,293 15,189,829 21,816,446 – – 25,068 5,827 – 6,029 1,249 121 1,175 199 1,643 1,673 18,282,568 15,191,593 21,850,391 (1) (8) (8) 18,282,567 15,191,585 21,850,383	As at June 30, 2024 RMB’000 – –
		–

		17,633,122 26,870 9,356 2,015 1,681
		17,673,044 (8)
		17,673,036

20. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

Movement of investments in associates is analyzed as follows:

At the beginning of the year/period Additions and disposals, net Business combination Share of profit, net Share of other comprehensive loss Share of other equity movement Dividend declared during the year/period Exchange differences Less: Impairment loss provided for the year/period At the end of the year/period	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,212,265 4,666,155 4,209,624 1,303,798 (543,165) 100,574 2,186,709 – – 61,792 49,128 78,524 (91) (19,592) (5,583) (6,416) 118,798 13,902 (2,250) (168,706) (188,104) (37,268) 175,008 34,484 (52,384) (68,002) (123,293) 4,666,155 4,209,624 4,120,128	Six months ended June 30, 2024 RMB’000 4,120,128 (28,284) – 28,041 (10,370) 3,286 (136,496) 21,739
		–
		3,998,044

– II-87 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Movement of investments in joint ventures is analyzed as follows:

At the beginning of the year/period Additions and disposals, net Share of loss, net Share of other equity movement Dividend declared during the year Exchange differences Less: Impairment loss provided for the year/period At the end of the year/period	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 2,434,966 2,593,932 3,648,376 183,425 1,088,841 (245,348) (19,132) (41,579) (145,714) 2,085 490 40 (5,386) (254) (892) (2,026) 11,418 2,855 – (4,472) (614) 2,593,932 3,648,376 3,258,703	Six months ended June 30, 2024 RMB’000 3,258,703 (309,443) (90,621) (5) – 3,135
		–
		2,861,769

The Group’s share of results of its associates and joint ventures are as follows:

Aggregate attributable amounts of net loss Aggregate attributable amounts of other comprehensive income Aggregate attributable amounts of total comprehensive income	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 (9,724) (64,925) (191,097) (91) (19,592) (5,583) (9,815) (84,517) (196,680)	Six months ended June 30, 2024 RMB’000 (62,580) (10,370)
		(72,950)

There is no associate and joint venture that is individually significant to the Group.

– II-88 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

21. FINANCIAL ASSETS AT FVPL AND FVOCI

(a) Financial assets at FVPL

The Group

Non-current: – Industry fund investments – Special scheme equity-class securities – Equity investment in unlisted entities at fair value – Others Current: – Structured deposits – Fund investment and others	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 552,130 770,637 499,320 235,821 116,286 – 85,243 118,324 84,401 4,829 6,962 6,275 878,023 1,012,209 589,996 9,730,665 7,351,158 6,542,881 653,828 34,221 266,861 10,384,493 7,385,379 6,809,742	As at June 30, 2024 RMB’000 378,654 – 123,504 6,155
		508,313

		17,770,993 276,330
		18,047,323

The Company

==> picture [370 x 76] intentionally omitted <==

----- Start of picture text -----

As at
As at December 31, June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current:
– Structured deposits 9,200,219 2,335,319 – –
----- End of picture text -----

– II-89 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Financial assets at FVOCI

Non-current: – Listed equity investments, at fair value – Unlisted equity investments, at fair value Current: – Notes held for sale	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 241,936 158,936 2,418,842 6,568,835 7,206,748 7,070,693 6,810,771 7,365,684 9,489,535 – 63,310 99,978 – 63,310 99,978	As at June 30, 2024 RMB’000 1,120,309 7,223,984
		8,344,293

		125,633
		125,633

22. INVENTORIES

Raw materials Finished goods Aviation consumables Consumables and supplies Costs to fulfil a contract Less: Provision for impairment loss	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 588,354 608,201 472,994 497,617 706,779 1,040,816 268,985 353,119 499,062 166,153 227,620 365,165 33,597 56,174 65,170 1,554,706 1,951,893 2,443,207 (7,885) (3,539) (2,782) 1,546,821 1,948,354 2,440,425	As at June 30, 2024 RMB’000 578,849 1,050,911 596,241 243,282 93,203
		2,562,486 (3,275)
		2,559,211

The cost of inventories recognized as cost and expenses for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 amounted to approximately RMB7,014,210,000, RMB9,352,016,000, RMB10,570,417,000, RMB5,060,126,000 and RMB5,434,491,000, respectively.

– II-90 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

23. CONTRACT ASSETS

Contract assets Less: Allowance for expected credit losses	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,041,152 1,526,396 1,636,144 (2,905) (3,400) (3,552) 1,038,247 1,522,996 1,632,592	As at June 30, 2024 RMB’000 2,043,192 (3,813)
		2,039,379

As discussed in Note 2.1(h), the Group applies simplified approach under IFRS 9 to measure the expected credit loss, which uses a lifetime expected loss allowance, for contract assets.

Allowance of approximately RMB900,000, RMB4,070,000, RMB152,000 and RMB315,000 had been provided for years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024, respectively.

24. TRADE AND NOTE RECEIVABLES

Trade and note receivables – related parties (Note 38(d)) – third parties Less: Allowance for expected credit losses	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 70,288 60,228 124,211 31,723,594 27,296,693 26,614,887 31,793,882 27,356,921 26,739,098 (1,034,869) (1,560,244) (1,378,665) 30,759,013 25,796,677 25,360,433	As at June 30, 2024 RMB’000 553,681 26,880,865
		27,434,546 (1,339,136)
		26,095,410

(a) The Group has various credit policies for different business operations depending on the requirements of the markets and businesses. The ageing analysis of the trade and note receivables based on invoice date is as follows:

Within 1 year (including 1 year) Between 1 and 2 years (including 2 years) Over 2 years	As at December 31, 2022 2021 2022 2023 RMB’000 RMB’000 RMB’000 31,344,858 26,399,022 25,719,098 236,070 653,524 490,411 212,954 304,375 529,589 31,793,882 27,356,921 26,739,098	As at June 30, 2024 RMB’000 26,325,967 450,741 657,838
		27,434,546

There is no concentration of credit risk with respect to trade and note receivables, as the Group has a large number of customers.

– II-91 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) The Group applies the simplified approach to provide for expected credit losses prescribed by IFRS 9. Details are disclosed in Note 2.1(h).

As at December 31, 2021, 2022 and 2023 and June 30, 2024, trade receivables of approximately RMB1,034,869,000, RMB1,560,244,000, RMB1,378,665,000 and RMB1,339,136,000 respectively were impaired and provided for.

Movements on the provision for impairment of trade and note receivables are as follows:

At the beginning of the year/period Allowance for/(reversal of) impairment losses Written off as uncollectible Acquisition of subsidiaries Disposal of subsidiaries Exchange adjustment At the end of the year/period	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 227,853 1,034,869 1,560,244 605,865 669,961 (42,078) (60,613) (169,984) (158,277) 263,785 10,272 – (4) – (3,505) (2,017) 15,126 22,281 1,034,869 1,560,244 1,378,665	As at June 30, 2024 RMB’000 1,378,665 165,988 (209,411) 397 – 3,497
		1,339,136

(c) The provision and reversal of provision for impairment of receivables have been included in impairment losses on financial assets and contract assets in the consolidated statements of profit or loss. Amounts charged to the allowance account are written off when there is no expectation of recovery.
(d) The carrying amount at the reporting date approximated the fair value of each class of receivables mentioned above.

– II-92 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

25. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

The Group

Restricted cash Statutory reserve deposits with the PBOC for banking operations (Note (a)) Pledged bank deposits (Note (b)) Others Cash and cash equivalents Cash on hand and cash at banks (excluding PBOC) Surplus reserve deposits with the PBOC (Note (a))	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 540,300 837,242 1,476,938 36,626 37,677 52,830 – – 46,728 576,926 874,919 1,576,496 34,805,864 40,268,797 40,434,748 7,904 11,150 13,560 34,813,768 40,279,947 40,448,308	As at June 30, 2024 RMB’000 917,644 64,761 46,839
		1,029,244

		32,506,222 9,767
		32,515,989

(a) On September 18, 2016, the Group incorporated SF Holding Group Finance Co., Ltd., a licensed financial institution, principally engaging in the provision of cash management services internally.

SF Holding Group Finance Co., Ltd. is required to deposit with the People’s Bank of China (the “ PBOC ”) an amount that equals to 5% of qualified RMB deposits from corporates. The statutory reserve deposits are restricted and not available for use in the daily business. Deposits with the PBOC in excess of the statutory reserve deposits are surplus reserve deposits, which are maintained mainly for clearance purposes.

(b) The Group’s bank balances amounting to approximately RMB11,432,000, RMB12,918,000, RMB17,133,000 and RMB29,538,000, respectively, as at December 31, 2021, 2022 and 2023 and June 30, 2024, represented deposits pledged to secure general banking or letter of guarantee facilities granted to the Group.

The Group’s bank balances amounting to approximately RMB25,194,000, RMB24,759,000, RMB35,697,000 and RMB35,223,000, respectively, as at December 31, 2021, 2022 and 2023 and June 30, 2024, represented deposits of performance bonds that shall be repaid when the services were completed.

The Company

				As at
	As at December 31,			June 30,
	2021	2022	2023	2024
	RMB’000	RMB’000	RMB’000	RMB’000
Cash on hand and cash at banks (excluding
PBOC)	226,112	812,181	138,046	29,017

– II-93 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

26. BORROWINGS

Non-current: Long-term bank borrowings (Note (a)) – secured (Note (a)(i))) – unsecured and guaranteed (Note (a)(ii)) Corporate bonds (Note (c)) Loans from Non-controlling interests Current portion of non-current: Long-term bank borrowings (Note (a)) – secured (Note (a)(i)) – unsecured and guaranteed (Note (a)(ii)) Corporate bonds (Note (c)) Loans from Non-controlling interests Short term: Short-term bank borrowings (Note (b)) – secured (Note (b)(i)) – unsecured and guaranteed (Note (b)(ii)) Short-term debentures (Note (c)) Loans from Non-controlling interests	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,091,297 1,119,111 2,680,031 2,419,532 6,352,899 8,675,210 15,656,370 18,927,508 18,794,782 217,267 187,243 246,889 19,384,466 26,586,761 30,396,912 377,489 498,344 742,364 1,080,885 102,336 2,071,021 830,321 3,661,225 615,295 22,637 18,087 1,541 197,015 100,569 105,969 19,068,519 13,729,479 18,659,397 4,029,936 5,062,357 – 109,150 109,150 113,516 25,715,952 23,281,547 22,309,103	As at June 30, 2024 RMB’000 1,889,777 8,771,689 19,710,996 228,220
		30,600,682

		1,047,403 1,547,545 113,666 22,349
		70,428 23,813,009 2,310,195 109,825
		29,034,420

(a) Long-term bank borrowings

(i) The Group’s non-current bank borrowings amounting to approximately RMB1,343,378,000, RMB1,487,597,000, RMB2,150,466,000 and RMB1,669,853,000 had been secured by Shun Yuan Financial Leasing (Tianjin) Co., Ltd.’s receivables under financial leasing contracts with a net carrying amount of approximately RMB1,519,672,000, RMB1,670,516,000, RMB2,496,880,000 and RMB2,797,164,000 as at December 31, 2021, 2022 and 2023 and June 30, 2024 respectively. Shun Yuan Financial Leasing (Tianjin) Co., Ltd., a subsidiary of the Group, recognized the receivables as engaging in aircraft financial lease business with SF Airlines Company Limited.

Certain non-current assets had been pledged as securities for long-term bank borrowings for the Track Record Period. Refer to Note 14(a), Note 15(a) and Note 16(b).

(ii) Non-current bank borrowings of approximately RMB2,974,052,000, RMB5,901,392,000, RMB5,633,173,000 and RMB5,731,171,000 as at December 31, 2021, 2022 and 2023 and June 30, 2024, respectively, had been guaranteed by the subsidiaries within the Group.
(iii) The range of interest rates of major non-current bank borrowings were 0.84% to 4.90%, 3.02% to 5.77%, 2.20% to 6.91% and 2.44% to 5.30% for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 respectively.

– II-94 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Short-term bank borrowings

(i) The Group’s short-term bank borrowings amounting to approximately RMB37,417,000 and RMB18,073,000 had been secured by time deposits of RMB9,600,000 and RMB11,086,000 as at December 31, 2021 and 2022, respectively.

Certain non-current assets had been pledged as securities for short-term bank borrowings for the Track Record Period. Refer to Note 14(a), Note 15(a) and Note 16(b).

(ii) Short-term bank borrowings of approximately RMB8,388,798,000, RMB4,224,863,000, RMB5,156,012,000 and RMB448,933,000 as at December 31, 2021, 2022 and 2023 and June 30, 2024, respectively, had been guaranteed by the Company or its subsidiaries.
(iii) The range of interest rates of major short-term bank borrowings were 0.66% to 3.81%, 2.20% to 5.39%, 2.20% to 7.74% and 2.27% to 6.77% for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 respectively.
(c) Corporate bonds and short-term debentures
(i) Bonds and debentures amounting to RMB15,287,734,000, RMB21,572,790,000, RMB18,393,642,000 and RMB18,309,526,000 as at December 31, 2021, 2022 and 2023 and June 30, 2024, respectively, had been guaranteed by the Company.
(ii) The range of interest rates of bonds and debentures were 2.38% to 4.60%, 2.38% to 4.13%, 2.38% to 3.79% and 2.38% to 3.13% for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 respectively.

27. TRADE AND NOTE PAYABLES

Trade and note payables – related parties (Note 38(d)) – third parties	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 405,456 505,220 421,194 23,062,219 24,242,831 24,493,106 23,467,675 24,748,051 24,914,300	As at June 30, 2024 RMB’000 397,211 23,413,121
		23,810,332

An ageing analysis of the trade and note payables based on invoice date as at December 31, 2021, 2022 and 2023 and June 30, 2024 was as follows:

Within 1 year (including 1 year) Over 1 year	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 23,354,313 24,654,791 24,505,848 113,362 93,260 408,452 23,467,675 24,748,051 24,914,300	As at June 30, 2024 RMB’000 23,527,260 283,072
		23,810,332

– II-95 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

28. CONTRACT LIABILITIES

Contract liabilities – related parties (Note 38(d)) – third parties	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 3,581 4,708 48,147 1,672,255 1,239,710 1,783,871 1,675,836 1,244,418 1,832,018	As at June 30, 2024 RMB’000 47,135 1,755,374
		1,802,509

The following table shows the amounts of revenue recognized in the Track Record Period relating to carried-forward contract liabilities:

				Six
				months
				ended
	Year	ended December	31,	June 30,
	2021	2022	2023	2024
	RMB’000	RMB’000	RMB’000	RMB’000
Revenue recognized that was included in
contract liabilities at the beginning of the
year/period	1,537,441	1,675,836	1,244,418	1,832,018

– II-96 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

29. OTHER PAYABLES AND ACCRUALS

Non-current: Salaries, wages and benefits Consideration payable for business combinations Others Current: Amounts due to related parties (Note 38(d)) Salaries, wages and benefits Payable for purchase of property, plant and equipment Deposits Other taxes payable Payables of cash collected on delivery service Consideration payable for business combinations Others	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 351,754 114,024 82,216 144,447 21,573 – 48,099 56,274 58,113 544,300 191,871 140,329 269,671 220,071 136,098 5,610,318 6,573,254 5,872,341 5,352,716 5,557,664 4,345,119 1,604,631 2,375,025 2,355,449 806,821 1,130,283 735,465 1,643,510 1,220,988 1,534,338 83,002 1,045,334 289,306 1,700,108 1,906,773 2,369,055 17,070,777 20,029,392 17,637,171	As at June 30, 2024 RMB’000 77,406 – 67,071
		144,477

		95,979 4,505,260 3,209,908 2,516,231 756,972 1,442,384 281,790 2,635,978
		15,444,502

30. DEFERRED INCOME

									As at
				As	at	December	31,		June 30,
				2021		2022		2023	2024
				RMB’000		RMB’000		RMB’000	RMB’000
Government	grants	and	subsidies	690,242		860,791		1,090,644	1,210,871

The government grants were mainly incentives provided by local government authorities in the PRC, including subsidies from a project in Huanggang City, government supporting funds for industry parks and aircraft engine maintenance subsidies, etc. All of the government grants and subsidies recognized as deferred income are asset related.

– II-97 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

31. SHARE CAPITAL AND TREASURY SHARES

As at January 1, 2021 Private placement (Note (a)) As at December 31, 2021 As at January 1, 2022 Repurchase of shares (Note (b)) Cancellation of shares (Note (b)) As at December 31, 2022 As at January 1, 2023 Repurchase of shares (Note (b)) Exercise of share options (Note (c)) As at December 31, 2023 (Unaudited) As at January 1, 2023 Repurchase of shares (Note (b)) As at June 30, 2023 As at January 1, 2024 Repurchase of shares (Note (b)) Cancellation of shares (Note (b)) As at June 30, 2024	Number of registered, issued and fully paid ordinary shares 4,556,440,455 349,772,647 4,906,213,102 4,906,213,102 – (11,010,729) 4,895,202,373 4,895,202,373 – – 4,895,202,373 4,895,202,373 – 4,895,202,373 4,895,202,373 – (79,291,153) 4,815,911,220	Share capital RMB’000 4,556,440 349,773 4,906,213 4,906,213 – (11,011) 4,895,202 4,895,202 – – 4,895,202 4,895,202 – 4,895,202 4,895,202 – (79,291) 4,815,911	Treasury shares RMB’000 (394,993) – (394,993) (394,993) (2,040,377) 394,993 (2,040,377) (2,040,377) (959,956) 424,801 (2,575,532) (2,040,377) (59,936) (2,100,313) (2,575,532) (1,378,503) 3,575,545 (378,490)	Total RMB’000 4,161,447 349,773
				4,511,220

				4,511,220 (2,040,377) 383,982
				2,854,825

				2,854,825 (959,956) 424,801
				2,319,670

				2,854,825 (59,936)
				2,794,889

				2,319,670 (1,378,503) 3,496,254
				4,437,421

(a) On October 20, 2021, as approved by the shareholders of the Company and CSRC, the Company completed a non-public placement of new A shares under general mandate. The Company issued a total of 349,772,647 new A-share to 22 subscribers and raised funding of approximately RMB20,000,000,000 through the issuance. Netting off the transaction cost, the Company received a total of RMB19,910,000,000.

Per the non-public placement, the Group recognized share capital of RMB349,772,647 and capital reserve of RMB19,562,788,600.

(b) For the years ended December 31, 2022 and 2023 and the six months ended June 30, 2023 and 2024, a total of 39,632,255, 19,838,884, 1,107,928 and 38,439,791 A shares have been repurchased respectively for future employee stock ownership plan or share-based incentive, and treasury

– II-98 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

stocks amounting to approximately RMB2,040,377,000, RMB959,956,000, RMB59,936,000 and RMB1,378,503,000 therefore were recognized respectively.

During the year ended December 31, 2022 and the six months ended June 30, 2024, the Company, under the approval and authorization of the general meeting, cancelled a total of 11,010,729 and 79,291,153 shares, respectively. Hence treasury stocks amounting to approximately RMB394,993,000 and share capital of approximately RMB11,011,000 were derecognized with a corresponding credit to capital reserve of approximately RMB383,982,000 in the year ended December 31, 2022. Treasury stocks amounting to approximately RMB3,575,545,000 and share capital of approximately RMB79,291,000 were derecognized with a corresponding debit to capital reserve of approximately RMB3,496,254,000 for the six months ended June 30, 2024.

(c) In 2023, one-fourth of the share options granted in 2022 were vested upon the first anniversary date of the grants. On August 1, 2023, a total of 8,420,193 share options were exercised, as 1,328 participants met the performance requirements. Therefore, contribution of approximately RMB355,189,000 was received by the Company from the participants, treasury stock of RMB424,801,000 and capital reserve of RMB69,612,000 were derecognized.

32. RESERVES AND RETAINED EARNINGS

(a) Reserves

The Group

As at January 1, 2021 Other comprehensive income Transfer of gain on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-public placement Capital contribution of non-controlling interests Share-based payment Transaction with non-controlling interests and others Appropriation to general and regulatory reserves Profit appropriations to statutory reserve Safety reserve appropriation Safety reserve utilisation Others As at December 31, 2021	Capital reserve RMB’000 24,405,217 – – 19,562,789 2,029,503 287,553 (75,317) – – – – (9,147) 46,200,598	Other comprehensive income RMB’000 1,143,969 1,585,918 (112,656) – – – – – – – – – 2,617,231	General and regulatory reserve RMB’000 279,142 – – – – – – 141,496 – – – – 420,638	Special reserve RMB’000 – – – – – – – – – 28,370 (28,370) – –	Statutory reserve RMB’000 745,043 – – – – – – – 202,732 – – – 947,775	Total RMB’000 26,573,371 1,585,918 (112,656) 19,562,789 2,029,503 287,553 (75,317) 141,496 202,732 28,370 (28,370) (9,147)
						50,186,242

– II-99 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at January 1, 2023 Other comprehensive income Transfer of loss on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Share-based payment Transaction with non-controlling interests and others Safety reserve appropriation Safety reserve utilisation Others As at June 30, 2023 As at January 1, 2022 Other comprehensive income Transfer of loss on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Cancellation of shares Share-based payment Transaction with non-controlling interests and others Appropriation to general and regulatory reserves Profit appropriations to statutory reserve Safety reserve appropriation Safety reserve utilisation Others As at December 31, 2022.	Capital reserve RMB’000 43,996,237 – – 890 151,413 (11,444) – – (3,041) 44,134,055 Capital reserve RMB’000 46,200,598 – – 825 (383,982) 122,999 (2,055,007) – – – – 110,804 43,996,237	Other comprehensive income RMB’000 4,538,027 639,549 (18) – – – – – – 5,177,558 Other comprehensive income RMB’000 2,617,231 1,882,025 38,771 – – – – – – – – – 4,538,027	General and regulatory reserve RMB’000 493,048 – – – – – – – – 493,048 General and regulatory reserve RMB’000 420,638 – – – – – – 72,410 – – – – 493,048	Special reserve RMB’000 – – – – – – 18,568 (18,568) – – Special reserve RMB’000 – – – – – – – – – 32,214 (32,214) – –	Statutory reserve RMB’000 1,010,253 – – – – – – – – 1,010,253 Statutory reserve RMB’000 947,775 – – – – – – – 62,478 – – – 1,010,253	Total RMB’000 50,037,565 639,549 (18) 890 151,413 (11,444) 18,568 (18,568) (3,041)
						50,814,914

						Total RMB’000 50,186,242 1,882,025 38,771 825 (383,982) 122,999 (2,055,007) 72,410 62,478 32,214 (32,214) 110,804
						50,037,565

– II-100 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at January 1, 2023 Other comprehensive income Transfer of gain on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Exercise of share options Share-based payment Transaction with non-controlling interests and others Appropriation to general and regulatory reserves Profit appropriations to statutory reserve Safety reserve appropriation Safety reserve utilisation Others As at December 31, 2023	Capital reserve RMB’000 43,996,237 – – 1,207 (69,612) 271,510 (1,037,241) – – – – 1,984 43,164,085	Other comprehensive income RMB’000 4,538,027 873,033 121,368 – – – – – – – – – 5,532,428	General and regulatory reserve RMB’000 493,048 – – – – – – 31,328 – – – – 524,376	Special reserve RMB’000 – – – – – – – – – 389,332 (389,332) – –	Statutory reserve RMB’000 1,010,253 – – – – – – – 1,403,533 – – – 2,413,786	Total RMB’000 50,037,565 873,033 121,368 1,207 (69,612) 271,510 (1,037,241) 31,328 1,403,533 389,332 (389,332) 1,984
						51,634,675

– II-101 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at January 1, 2024 Other comprehensive loss Transfer of gain on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Cancellation of shares Share-based payment Transaction with non-controlling interests and others Safety reserve appropriation Safety reserve utilisation As at June 30, 2024	Capital reserve RMB’000 43,164,085 – – 127 (3,496,254) 62,186 (3,760,142) – – 35,970,002	Other comprehensive income RMB’000 5,532,428 (1,060,319) 5,060 – – – – – – 4,477,169	General and regulatory reserve RMB’000 524,376 – – – – – – – – 524,376	Special reserve RMB’000 – – – – – – – 272,081 (272,081) –	Statutory reserve RMB’000 2,413,786 – – – – – – – – 2,413,786	Total RMB’000 51,634,675 (1,060,319) 5,060 127 (3,496,254) 62,186 (3,760,142) 272,081 (272,081)
						43,385,333

– II-102 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The Company

As at January 1, 2021 Capital contribution of non-public placement Share-based payment Profit appropriations to statutory reserve As at December 31, 2021 As at January 1, 2022 Cancellation of shares Share-based payment Others Profit appropriations to statutory reserve As at December 31, 2022 As at January 1, 2023 Share-based payment Exercise of share options Profit appropriations to statutory reserve As at December 31, 2023 (Unaudited) As at January 1, 2023 Share-based payment As at June 30, 2023 As at January 1, 2024 Cancellation of shares Share-based payment As at June 30, 2024	Capital reserve RMB’000 52,344,321 19,562,789 (6) – 71,907,104 71,907,104 (383,982) 220,852 (26) – 71,743,948 71,743,948 216,304 (69,612) – 71,890,640 71,743,948 137,562 71,881,510 71,890,640 (3,496,254) 51,896 68,446,282	Statutory reserve RMB’000 591,998 – – 202,732 794,730 794,730 – – – 62,478 857,208 857,208 – – 1,403,533 2,260,741 857,208 – 857,208 2,260,741 – – 2,260,741	Total RMB’000 52,936,319 19,562,789 (6) 202,732
			72,701,834

			72,701,834 (383,982) 220,852 (26) 62,478
			72,601,156

			72,601,156 216,304 (69,612) 1,403,533
			74,151,381

			72,601,156 137,562
			72,738,718

			74,151,381 (3,496,254) 51,896
			70,707,023

– II-103 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Retained earnings

The Company

				Six months ended	Six months ended
	Year ended December 31,			June	30,
	2021	2022	2023	2023	2024
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
At the beginning of the
year/period	1,560,724	1,885,321	1,573,109	1,573,109	12,991,294
Profit/(loss) for the
year/period	2,027,321	624,784	14,035,334	19,253	(2,115)
Profit appropriations to
statutory reserve	(202,732)	(62,478)	(1,403,533)	–	–
Dividends (Note 12)	(1,499,992)	(874,518)	(1,213,616)	(1,213,616)	(2,889,210)
At the end of the year/period	1,885,321	1,573,109	12,991,294	378,746	10,099,969

33. SHARE-BASED PAYMENT

(a) Share-based payment expenses during the Track Record Period were as follows:

Equity settled share-based payment Cash settled share-based payment	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 349,308 109,573 309,338 153,461 69,940 199,021 48,111 233,708 190,592 (10,903) 548,329 157,684 543,046 344,053 59,037	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 349,308 109,573 309,338 153,461 69,940 199,021 48,111 233,708 190,592 (10,903) 548,329 157,684 543,046 344,053 59,037
		59,037

(b) Equity settled share-based payment arrangement

(i) Share Option Plan of the Company

The share option plan, established in May 2022, is designed to award the eligible participants who contribute to the success of the Group’s operations and provide long-term incentives for employees to deliver long-term shareholder returns.

Under the plan, participants are granted options which only vest if certain performance standards are met and the employees, officers and directors shall remain in service. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

On May 30, 2022 and October 28, 2022, the Company had granted 47,892,100 and 1,608,000 stock options, respectively, with an exercise price of RMB42.61 and RMB42.431 per share, respectively, to certain employees, officers and directors.

– II-104 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

A summary of activities of the service-based share options is presented as follows:

Outstanding as at January 1, 2022 Granted Outstanding as at December 31, 2022 Outstanding as at January 1, 2023 Exercised Forfeited Outstanding as at December 31, 2023 (Unaudited) Outstanding as at January 1, 2023 Granted Outstanding as at June 30, 2023 Outstanding as at January 1, 2024 Granted Outstanding as at June 30, 2024 Vested and exercisable as at June 30, 2024	Number of share options – 49,500,100 49,500,100 49,500,100 (8,420,193) (6,676,212) 34,403,695 49,500,100 – 49,500,100 34,403,695 – 34,403,695 544,570	Weighted average exercise price Weighted average remaining contractual term RMB – 42.60 42.60 3.4 years 42.60 42.18 42.18 42.18 2.4 years 42.60 – 42.60 2.9 years 42.18 – 42.18 1.9 years 42.18

The stock option shall vest over a period of 4 years on the condition that the employees, officers and directors remain in service and certain performance standards are met. One-fourth of the awards shall be vested upon the end of the first, the second, the third and the fourth anniversary dates of the grants.

The fair value at grant date is independently determined using an adjusted form of the Black Scholes Model which includes a Monte Carlo simulation model that takes into account the exercise price, the term of the option, the impact of dilution (where material), the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk free interest rate for the term of the option and the correlations and volatilities of the peer group companies.

– II-105 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The fair value per option was estimated at the grant dates using the following assumptions:

Exercise price per share RMB42.61, RMB42.43 Expiry date Respective annual due dates Share price at grant date per share RMB51.57, RMB49.88 Expected volatility of the Company’s shares 35.77% ~ 40.39% Expected dividend yield 0.51% ~ 0.55% Risk-free interest rate 1.50% ~ 2.75%

The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

The Group recognizes share-based payments in capital reserves and its consolidated statements of profit or loss based on options ultimately expected to vest, after considering estimated forfeitures of the share options. Forfeitures are estimated based on the historical experience and revised in the subsequent periods if actual forfeitures differ from those estimates. The impact of the revision of the original estimates on non-market vesting conditions, if any, is recognized in the profit and loss over the remaining vesting period, with a corresponding adjustment to capital reserves.

As mentioned in Note 31(c), 1,328 participants of the plan met the performance requirements and a total of 8,420,193 share options were exercised during the year ended December 31, 2023.

Share-based payment expenses of RMB220,852,000, RMB216,304,000, RMB137,562,000 and RMB51,896,000 related to the above share options were recognized in the consolidated statements of profit or loss for the years ended December 31, 2022 and 2023 and the six months ended June 30, 2023 and 2024, respectively.

An accumulated amount of RMB23,633,000, RMB244,485,000, RMB460,789,000 and RMB512,685,000 has been recognized as capital reserve as at December 31, 2021, 2022 and 2023 and June 30, 2024 respectively.

(ii) Share Option Plan of the subsidiary entities

Subsidiaries of the Group issued restricted share units (‘RSU’) or share options of their own shares to senior executives and other employees.

The fair value at grant date is independently determined using an adjusted form of the Discounted Cash Flow model or Black Scholes Model.

Share-based payment expenses of approximately RMB349,308,000, RMB93,034,000, RMB15,899,000 and RMB18,044,000 related to the above share awards were recognized in the consolidated statements of profit or loss for the years ended December 31, 2021 and 2023 and the six months ended June 30, 2023 and 2024, respectively. Share-based payment expenses amounting to RMB111,279,000 previously recognized in the consolidated statement of profit or loss were reversed in 2022.

An accumulated amount of RMB619,314,000, RMB508,035,000, RMB601,069,000 and RMB619,113,000, respectively, as at December 31, 2021, 2022 and 2023 and June 30, 2024 has been recognized as capital reserve.

– II-106 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Cash-settled share-based payment arrangement

Subsidiaries of the Group issued RSU or share options of their own shares to senior executives and other employees, with a term that the subsidiaries had an obligation to repurchase under certain conditions, as their remuneration package, hereby the employees will become entitled to a future cash payment.

The management measured the liability, initially and at the end of each reporting period until settled, at the fair value of the RSU or share options, by applying an adjusted form of the Discounted Cash Flow model or Black Scholes Model.

The management recognized the services received, and a liability to pay for those services, as the employees render service during the period. A total of share-based payment expenses of approximately RMB199,021,000, RMB48,111,000, RMB233,708,000 and RMB190,592,000 related to the above arrangement for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 were recognized in the consolidated statements of profit or loss, respectively. The above arrangement expenses amounting to RMB10,903,000 previously recognized in the consolidated statement of profit or loss were reversed for the six months ended June 30, 2024.

An accumulated amount of approximately RMB328,607,000, RMB334,757,000 and RMB268,453,000 as at December 31, 2021, 2022 and 2023 has been recognized as liabilities, respectively. There were no share-based payments recognized as liabilities as at June 30, 2024.

– II-107 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

34. NOTES TO CONSOLIDATED STATEMENTS OF CASH FLOWS

(a) Reconciliation of profit before income tax to net cash generated from operations:

Profit before income tax for the year/period Adjustments for: Depreciation of right-of-use assets (Note 8) Depreciation and amortization (excluding right-of-use assets) (Note 8) Impairment provision for investments in associates and joint ventures Net impairment losses on financial assets and contract assets Impairment of inventories, property, plant and equipment and other non-current assets (Note 7) Equity settled share-based compensation expenses (Note 33) Losses on disposal of property, plant and equipment, right-of-use assets and other non- current assets (Note 7) Fair value changes in financial assets at FVPL_(Note 7) Gains on disposal of investments in subsidiaries (Note 36(b)) Share of (profit)/loss of associates and joint ventures, net Gains on disposal of investments in associates and joint ventures (Note 7) Dividend income (Note 6) Amortization of deferred income Finance costs (Note 10)_ Operating cash flow before working capital changes Changes in working capital: Increase in inventories (Increase)/decrease in trade receivables, prepayment, contract assets and other receivable Increase/(decrease) in trade payables, contract liabilities, and other payables Cash generated from operations	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 7,750,856 11,037,836 10,486,505 5,420,350 6,320,057 5,776,678 7,291,360 7,213,063 3,686,282 3,428,916 6,878,224 8,950,072 10,106,044 4,811,825 5,360,734 52,384 72,474 123,907 – – 579,851 825,170 (33,480) (66,022) 159,872 7,106 55,212 62,390 2,026 1,309 349,308 109,573 309,338 153,461 69,940 195,841 52,305 53,891 64,740 (39,097) (553,638) (660,867) (529,513) (290,377) (294,669) (1,808,638) (32,314) (268,204) (244,982) (91,950) (42,660) (7,549) 67,190 13,486 62,580 (68,695) (282,906) (21,441) 1,941 (45,307) (31,853) (13,811) (2,438) (2,535) (426) (36,480) (37,415) (45,935) (27,515) (20,416) 1,562,963 2,054,360 2,269,700 1,092,673 1,230,918 20,611,247 29,413,500 29,791,017 14,615,353 16,142,461 (370,579) (397,187) (491,314) (87,948) (119,277) (6,196,150) 8,816,879 (262,500) 3,737,276 896,436 4,587,983 (52,190) 759,002 (2,533,277) (1,705,611) 18,632,501 37,781,002 29,796,205 15,731,404 15,214,009	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 7,750,856 11,037,836 10,486,505 5,420,350 6,320,057 5,776,678 7,291,360 7,213,063 3,686,282 3,428,916 6,878,224 8,950,072 10,106,044 4,811,825 5,360,734 52,384 72,474 123,907 – – 579,851 825,170 (33,480) (66,022) 159,872 7,106 55,212 62,390 2,026 1,309 349,308 109,573 309,338 153,461 69,940 195,841 52,305 53,891 64,740 (39,097) (553,638) (660,867) (529,513) (290,377) (294,669) (1,808,638) (32,314) (268,204) (244,982) (91,950) (42,660) (7,549) 67,190 13,486 62,580 (68,695) (282,906) (21,441) 1,941 (45,307) (31,853) (13,811) (2,438) (2,535) (426) (36,480) (37,415) (45,935) (27,515) (20,416) 1,562,963 2,054,360 2,269,700 1,092,673 1,230,918 20,611,247 29,413,500 29,791,017 14,615,353 16,142,461 (370,579) (397,187) (491,314) (87,948) (119,277) (6,196,150) 8,816,879 (262,500) 3,737,276 896,436 4,587,983 (52,190) 759,002 (2,533,277) (1,705,611) 18,632,501 37,781,002 29,796,205 15,731,404 15,214,009
		16,142,461
		(119,277) 896,436 (1,705,611)
		15,214,009

– II-108 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Transaction with non-controlling interests

During the Track Record Period, the Group changed its ownership interests in certain subsidiaries without change of its control.

The impacts of the transactions with non-controlling interests for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 are summarized as follows:

Net cash consideration paid to non-controlling interests without change of control Outstanding and included in other payables Total consideration of transactions with non-controlling interests Recognized in the reserve within equity	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 109,576 3,914,671 1,833,285 132,490 3,353,487 – 106,132 – – – 109,576 4,020,803 1,833,285 132,490 3,353,487 75,317 2,055,007 1,037,241 11,444 3,760,142	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 109,576 3,914,671 1,833,285 132,490 3,353,487 – 106,132 – – – 109,576 4,020,803 1,833,285 132,490 3,353,487 75,317 2,055,007 1,037,241 11,444 3,760,142
		3,353,487

		3,760,142

(i) Major transactions during the year ended December 31, 2022

In May 2022, the Group acquired the remaining equity interests of SXH China Logistics (formerly named as SF\HAVI China Logistics) (“ SXH ”) and SXH became a wholly-owned subsidiary of the Group. The Group recognized a decrease in other reserve of RMB456,837,000.

In June 2022, KLN acquired additional equity interests in K-Apex Logistics (HK) Co., Limited (“ K-Apex HK ”), a non wholly-owned subsidiary of KLN. The Group recognized a decrease in other reserve of RMB1,183,864,000.

(ii) Major transaction during the year ended December 31, 2023

In July 2023, KLN acquired the remaining equity interests of K-Apex HK. Upon the completion of the acquisition, K-Apex HK became a wholly-owned subsidiary of KLN. The Group recognized a decrease in other reserve of RMB797,838,000.

(iii) Major transactions during the six months ended June 30, 2024

During the six months ended June 30, 2024, the Group acquired the remaining equity interests of Shenzhen SF Freight Corporation and Shenzhen Fengwang Holding Co., Ltd. Upon the completion of the transactions, the aforementioned subsidiaries became wholly-owned subsidiaries of the Group. The Group recognized a decrease in other reserve of RMB2,146,357,000 and RMB744,838,000, respectively.

– II-109 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As mentioned in Note 17(a), during the six months ended June 30, 2024, the Group acquired additional equity interests of 35.8% of KEX. The Group recognized a decrease in other reserve of RMB540,151,000.

Except for the aforementioned non-controlling interests’ transactions, other transactions made no significant impact on the Group’s Historical Financial Information.

(c) Non-cash operating, investing and financing activities

The main non-cash operating, investing and financing activities for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 are summarized as follows:

Additions of right-of-use assets Settlement of acquisitions of long-term assets through bank supply chain financing or re-factoring	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 10,130,741 6,126,609 6,553,794 3,192,368 2,814,232 868,330 992,178 543,389 409,201 57,753 10,999,071 7,118,787 7,097,183 3,601,569 2,871,985	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 10,130,741 6,126,609 6,553,794 3,192,368 2,814,232 868,330 992,178 543,389 409,201 57,753 10,999,071 7,118,787 7,097,183 3,601,569 2,871,985
		2,871,985

– II-110 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(d) Reconciliation of liabilities arising from financing activities

At January 1, 2021 Cash flows Acquisition and disposal of subsidiaries, net Interest expenses Other non-cash movements At December 31, 2021 At January 1, 2022 Cash flows Acquisition and disposal of subsidiaries, net Interest expenses Other non-cash movements At December 31, 2022 At January 1, 2023 Cash flows Acquisition and disposal of subsidiaries, net Interest expenses Other non-cash movements At December 31, 2023 (Unaudited) At January 1, 2023 Cash flows Acquisition and disposal of subsidiaries, net Interest expenses Other non-cash movements At June 30, 2023 At January 1, 2024 Cash flows Interest expenses Other non-cash movements At June 30, 2024	Bank borrowings 10,615,872 7,196,602 5,985,174 552,547 (115,458) 24,234,737 24,234,737 (4,432,588) – 768,304 1,332,285 21,902,738 21,902,738 9,202,159 206,227 1,071,956 550,912 32,933,992 21,902,738 4,605,863 – 456,361 655,230 27,620,192 32,933,992 3,228,764 685,341 291,754 37,139,851	Corporate bonds and short-term debentures 10,365,145 9,884,299 – 457,160 (189,977) 20,516,627 20,516,627 4,677,774 – 793,666 1,663,023 27,651,090 27,651,090 (9,447,697) – 732,349 474,335 19,410,077 27,651,090 (3,941,892) – 405,531 845,952 24,960,681 19,410,077 2,057,853 311,638 355,289 22,134,857	Loans from non- controlling interest 159,390 (28,096) 210,874 5,650 1,236 349,054 349,054 (27,542) (18,379) 8,323 3,024 314,480 314,480 10,098 – 4,545 32,823 361,946 314,480 (7,341) – 4,238 36,725 348,102 361,946 5,542 675 (7,769) 360,394	Leases liabilities (Note (i)) 10,711,248 (6,987,589) 2,710,251 553,613 9,944,031 16,931,554 16,931,554 (7,813,330) – 609,652 5,451,452 15,179,328 15,179,328 (7,765,246) (4,810) 564,374 5,834,814 13,808,460 15,179,328 (3,891,543) (4,810) 289,013 2,919,234 14,491,222 13,808,460 (3,704,784) 262,301 2,646,495 13,012,472	Loans from holders of asset-backed securities scheme – (666,000) 666,000 – – – – (391,000) 391,000 – – – – (899,360) 899,360 – – – – – – – – – – – – – –	Total 31,851,655 9,399,216 9,572,299 1,568,970 9,639,832
						62,031,972

						62,031,972 (7,986,686) 372,621 2,179,945 8,449,784
						65,047,636

						65,047,636 (8,900,046) 1,100,777 2,373,224 6,892,884
						66,514,475

						65,047,636 (3,234,913) (4,810) 1,155,143 4,457,141
						67,420,197

						66,514,475 1,587,375 1,259,955 3,285,769
						72,647,574

– II-111 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(i) The other non-cash movement about lease liabilities mainly resulted from the new lease contracts entered during the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024.

35. ACQUISITION OF SUBSIDIARIES

The net cash flow impact of acquisition of subsidiaries during the Track Record Period are as below:

Net cash paid in respect of the business combinations (Note (a)) Net cash paid in respect of the acquisition of assets (Note (b)) Net cash paid in acquisition of subsidiaries	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 7,735,241 1,190,625 972,456 928,555 115,585 1,308,337 1,026,856 1,224,952 – 498,799 9,043,578 2,217,481 2,197,408 928,555 614,384	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 7,735,241 1,190,625 972,456 928,555 115,585 1,308,337 1,026,856 1,224,952 – 498,799 9,043,578 2,217,481 2,197,408 928,555 614,384
		614,384

– II-112 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(a) Acquisition of subsidiaries through business combinations

Analysis of the net cash outflow in respect of the acquisition of subsidiaries treated as business combinations during the Track Record Period are as below:

					Six months ended	Six months ended
		Year ended December 31,			June	30,
		2021	2022	2023	2023	2024
		RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
					(Unaudited)
Total acquisition consideration
including:	KLN (Note (i))	14,550,982	–	–	–	–
	Topocean and
	Pro-Med (Note (ii))	–	1,721,991	–	–	–
	Other subsidiaries	224,423	230,924	141,702	141,000	104,706
		14,775,405	1,952,915	141,702	141,000	104,706
Less: Cash	and bank balances
acquired
including:	KLN (Note (i))	(7,022,260)	–	–	–	–
	Topocean and
	Pro-Med (Note (ii))	–	(120,261)	–	–	–
	Other subsidiaries	(1,982)	(5,108)	(4,545)	(2,898)	(19,744)
		(7,024,242)	(125,369)	(4,545)	(2,898)	(19,744)
Outstanding and included in
other payables		(10,100)	(745,718)	–	(9,774)	(10,271)
Cash paid in the current year for
acquisition of subsidiaries in
prior years (Note (ii))		30,299	108,797	835,299	800,227	40,894
Other settlement		(36,121)	–	–	–	–
Net cash paid in respect of the
business combinations		7,735,241	1,190,625	972,456	928,555	115,585

The major Business Combinations acquisition for the Track Record Period were as follows:

(i) Kerry Logistics Network

On September 28, 2021, the Group acquired 51.52% of the issued capital of KLN, which is engaged in a broad range of supply chain solutions from integrated logistics, international freight forwarding (air, ocean, road, rail and multimodal), e-commerce and express to industrial project logistics and infrastructure investment. The acquisition was made as part of the Group’s strategy to further develop its supply chain solution and expand its international logistics and freight forwarding business.

The purchase consideration was in the form of cash. The Group had made a lump-sum payment of approximately RMB14,550,982,000 for the transaction.

Besides, according to the agreement, KLN sold its Taiwan Business and Warehouse in Hong Kong before becoming subsidiaries of the Group. A total of RMB10,989,923,000 consideration receivable due to the disposal transaction was then collected after the

– II-113 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

merger and acquisition closed. KLN declared a special dividend and paid RMB10,819,033,000 spending the profit earned from the disposal transaction mentioned above.

The fair values of the identifiable assets and liabilities of KLN as at the date of acquisition were as follows:

Cash
Financial assets at fair value through profit or loss
Trade receivables, prepayments and deposits
Inventories
Other current assets
Investments in associate
Investment properties
Property, plant and equipment
Right-of-use assets
Intangible assets
Financial assets at fair value through other comprehensive income
Investment in convertible Bonds and short-term debentures
Deferred taxation assets.
Short-term Bank borrowing, bank overdrafts and current portion of
long-term Bank borrowing
Trade payables, deposits received and accrued charges
Lease liabilities
Deferred taxation liabilities
Other liabilities
Net identifiable assets acquired
Less: non-controlling interests
Add: goodwill
Net assets acquired

Fair value
RMB’000
7,025,678
1,197,012
24,446,818
325,524
23,443
2,186,709
1,355,725
8,250,899
3,927,795
6,808,714
244,044
4,854
110,917
(5,985,174)
(6,300,534)
(2,710,251)
(2,490,007)
(14,875,883)

23,546,283
(13,126,493)
4,131,192

14,550,982

Acquired receivables

The fair value of acquired trade receivables, prepayments and deposits as at the date of acquisition were approximately RMB24,446,818,000. The gross contractual amount for trade receivables, due was approximately RMB24,709,645,000 with a loss allowance of RMB262,827,000 recognized on acquisition.

Accounting policy choice for non-controlling interests

The Group recognizes non-controlling interests in an acquired entity either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis. For the non-controlling interests in KLN, the Group elected to recognize the non-controlling interests at its proportionate share of the acquired net identifiable assets. See Note 2.1(e) for the Group’s accounting policies for business combinations.

Revenue and profit contribution

The acquired business contributed revenues of approximately RMB20,260,964,000 and net profit of RMB883,124,000 to the Group for the period from September 28, 2021 to December 31, 2021.

– II-114 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

If the acquisition had occurred on January 1, 2021, consolidated pro-forma revenue and profit of the Group for the year ended December 31, 2021 would have been approximately RMB255,189,851,000 and RMB6,161,944,000, respectively. These amounts have been calculated using the subsidiary’s results and adjusting them for:

differences in the accounting policies between the Group and the subsidiary, and
the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied from January 1, 2021, together with the consequential tax effects.

(ii) Topocean and Pro-Med

In January 2022, the Group acquired 51% interest in Pro-Med Technology Limited (“ Pro-Med ”), which is a company operating trading business based in Hong Kong.

In April 2022, the Group entered into agreement to acquire 100% interest in Topocean Consolidation Service (Los Angeles), Inc. and its subsidiaries (“ Topocean ”), which are engaged in international freight forwarding in United States by four tranches. Topocean are consolidated as wholly owned subsidiaries of the Group accordingly. The Group has completed the acquisitions of 100% interest during the year. 80% of the total consideration was paid in 2022 and the remaining 20% has been recognized as consideration payable, which was fully paid in 2023.

The purchase consideration was in the form of cash. The Group had made a lump-sum payment of approximately RMB1,721,991,000 for the transaction.

The fair values of the identifiable assets and liabilities of Topocean and Pro-Med as at the date of acquisition were as follows:

Cash Trade receivables Intangible assets Other assets Trade payables Deferred taxation liabilities Net identifiable assets acquired Less: non-controlling interests Add: goodwill Net assets acquired	Fair value RMB’000 120,261 1,809,141 375,533 229,835 (1,864,368) (132,732)
	537,670 (8,833) 1,193,154
	1,721,991

Accounting policy choice for non-controlling interests

The Group recognizes non-controlling interests in an acquired entity either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis. For the non-controlling interests in Pro-Med, the Group elected to recognize the non-controlling interests at its proportionate share of the acquired net identifiable assets. See Note 2.1(e) for the Group’s accounting policies for business combinations.

– II-115 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Revenue and profit contribution

The acquired business contributed revenues of approximately RMB6,413,070,000 and net profit of RMB281,132,000, respectively, to the Group for the period from the respective acquisition dates to December 31, 2022.

(b) Acquisition of assets through acquisition of subsidiaries

Analysis of the net cash outflow in respect of the acquisition of subsidiaries treated as acquisition of assets during the Track Record Period are as below:

Total acquisition consideration Less: Cash and bank balances acquired Outstanding and included in other payables Net cash paid in respect of the acquisition of assets	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 1,389,990 1,099,465 1,269,444 – 559,289 (81,653) (72,609) (44,492) – (56,644) – – – – (3,846) 1,308,337 1,026,856 1,224,952 – 498,799	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 1,389,990 1,099,465 1,269,444 – 559,289 (81,653) (72,609) (44,492) – (56,644) – – – – (3,846) 1,308,337 1,026,856 1,224,952 – 498,799
		498,799

(i) Major acquisition during the year ended December 31, 2021

On November 30, 2021, the Company exercised the pre-emptive right, which concluded in the article of the asset-backed security scheme of Huatai Jiayue-SF Industrial Park Phase I No. 1, to acquire 100% equity interests of Shenzhen Shunze Industrial Park Management Co., Ltd. (“ Shenzhen Shunze ”) and Shenzhen Shuntai Industrial Park Management Co., Ltd. (“ Shenzhen Shuntai ”).

The identifiable assets of Shenzhen Shunze and Shenzhen Shuntai were the logistics industrial parks located in Shanghai and Wuxi respectively.

The total consideration of the aforementioned equity interests was approximately RMB1,330,720,000, which comprised of the fair value of property assets amounting to RMB1,996,720,000 and the fair value of liabilities acquired amounting to RMB666,000,000. The transaction was completed on December 8, 2021.

The transaction met the concentration test criteria, and the set of property assets acquired was determined not to be a business. These buildings and land use rights acquired were initially recognized at their fair values of approximately RMB1,494,993,000 and RMB467,320,000, respectively, on December 8, 2021.

(ii) Major acquisition during the year ended December 31, 2022

On August 30, 2022, the Company exercised the pre-emptive right, which concluded in the article of the asset-backed security scheme of Huatai Jiayue-SF Industrial Park Phase I No. 2, to acquire 100% equity interests of Shenzhen Jiafeng Industrial Park Management Co., Ltd. (“ Shenzhen Jiafeng ”), Shenzhen Shunjie Industrial Park Management Co., Ltd. (“ Shenzhen Shunjie ”) and Shenzhen Runheng Industrial Park Management Co., Ltd. (“ Shenzhen Runheng ”).

– II-116 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The identifiable assets of Shenzhen Jiafeng, Shenzhen Shunjie and Shenzhen Runheng were the logistics industrial parks located in Shenzhen, Yiwu and Huai’an respectively.

The total consideration of the aforementioned equity interests was approximately RMB1,065,130,000, which comprised of the fair value of property assets amounting to RMB1,456,130,000 and the fair value of liabilities acquired amounting to RMB391,000,000. The transaction was completed on September 2, 2022.

The transaction met the concentration test criteria, and the set of property assets acquired was determined not to be a business. These property assets were initially recognized at their fair values of approximately RMB1,456,130,000 on September 2, 2022.

(iii) Major acquisition during the year ended December 31, 2023

On September 15, 2023, the Company exercised the pre-emptive right, which concluded in the article of the asset-backed security scheme of Huatai Jiayue-SF Industrial Park Phase I No. 3, to acquire 100% equity interests of Shenzhen Fengkai Industrial Park Management Co., Ltd., Shenzhen Runtai Industrial Park Management Co., Ltd., Shenzhen Yutai Industrial Park Management Co., Ltd., Shenzhen Xingtai Industrial Park Management Co., Ltd. and Shenzhen Shengtai Industrial Park Management Co., Ltd. (collectively the “ Property Operators ”).

The identifiable assets of the above property operators of the scheme were the logistics industrial parks located in Wuxi, Quanzhou, Jiaxing, Yancheng and Ningbo, respectively.

The total consideration of the aforementioned equity interests was approximately RMB904,000,000, which comprised of the fair value of property assets amounting to RMB1,477,000,000 and the fair value of liabilities acquired amounting to RMB573,000,000. The transaction was completed on October 9, 2023.

On December 19, 2023, the Company acquired 100% equity interests of Zhengzhou Fengtai E-commerce Industrial Park Management Co., Ltd. (“ Zhengzhou Fengtai ”).

The consideration of the acquisition transaction was approximately RMB335,443,000, which comprised of the fair value of property assets amounting to RMB684,000,000, and the fair value of liabilities acquired amounting to RMB348,557,000. The transaction was completed on December 28, 2023.

Both transactions met the concentration test criteria, and the set of property assets acquired was determined not to be a business. These property assets were initially recognized at their fair values of approximately RMB1,477,000,000 on October 9, 2023 and RMB684,000,000 on December 28, 2023, respectively.

(iv) Major acquisition during the six months ended June 30, 2024

On January 18, 2024, the Company acquired 100% equity interests of Beijing Jieyutai Enterprise Management Co., Ltd. (“ Beijing Jieyutai ”). The identifiable assets were mainly logistics industrial parks located in Beijing.

The total consideration of the aforementioned equity interests was approximately RMB559,289,000. These property assets acquired were initially recognized at their fair values of approximately RMB835,700,000.

The transaction met the concentration test criteria, and the set of property assets acquired was determined not to be a business.

– II-117 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

36. DISPOSAL OF SUBSIDIARIES

Transactions of disposal of subsidiaries during the Track Record Period are analyzed as follows:

(a) Net cash received from disposal of subsidiaries

Non-cash consideration Including: SF Real Estate Investment Trust (Note (c)(i)) Cash consideration Including: SF Real Estate Investment Trust (Note (c)(i)) Guangdong Fengxing Zhitu Technology Co., Ltd (Note (c)(ii)) Shenzhen Fengwang Information Technology Co., Ltd (Note (c)(iii)) Other subsidiaries Total disposal consideration Total Cash consideration Add: Cash and cash equivalents received from disposal of subsidiaries in the prior year Less: Outstanding and included in other receivables Less: Cash and cash equivalents held by the subsidiaries at the dates of disposal Net cash flow impact from disposal of subsidiaries	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 1,152,527 – – – – 1,152,527 – – – – 1,271,751 – – – – 1,025,042 – – – – – – 460,930 460,930 – 686,161 233,639 146,798 87,050 273,345 2,982,954 233,639 607,728 547,980 273,345 4,135,481 233,639 607,728 547,980 273,345 2,982,954 233,639 607,728 547,980 273,345 15,000 99,751 – – – (100,534) – – – (118,000) (559,868) (19,671) (208,906) (189,393) (1,749) 2,337,552 313,719 398,822 358,587 153,596	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 1,152,527 – – – – 1,152,527 – – – – 1,271,751 – – – – 1,025,042 – – – – – – 460,930 460,930 – 686,161 233,639 146,798 87,050 273,345 2,982,954 233,639 607,728 547,980 273,345 4,135,481 233,639 607,728 547,980 273,345 2,982,954 233,639 607,728 547,980 273,345 15,000 99,751 – – – (100,534) – – – (118,000) (559,868) (19,671) (208,906) (189,393) (1,749) 2,337,552 313,719 398,822 358,587 153,596
		–
		– – – 273,345
		273,345
		273,345

		273,345 – (118,000) (1,749)
		153,596

– II-118 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Gains on disposal of investments in subsidiaries

				Six months ended	Six months ended
	Year ended December 31,			June	30,
	2021	2022	2023	2023	2024
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Total disposal consideration	4,135,481	233,639	607,728	547,980	273,345
Carrying amount of net assets
sold	(2,332,240)	(201,325)	(339,524)	(302,998)	(181,395)
Gain on sale before income tax
and reclassification of foreign
currency translation reserve	1,803,241	32,314	268,204	244,982	91,950
Reclassification of other
comprehensive income	5,397	–	–	–	–
Gains on disposal of investments
in subsidiaries	1,808,638	32,314	268,204	244,982	91,950

(c) The major disposal of subsidiaries during the Track Record Period were as follows:

(i) SF Real Estate Investment Trust

In May 2021, the Group entered into an agreement with SF Real Estate Investment Trust (“ SF REITs ”), which was a collective investment scheme set up by SF REITs Assets Management Ltd., (“ the Manager ”) and DB Trustees (Hong Kong) Ltd., (“ the Trustee ”).

According to the transaction, the Group sold the whole shares of three subsidiaries which operated in logistics properties, i.e., Foshan Runzhong Industrial Investment Ltd., Wuhu Fengtai E-Commerce Industrial Park Management Ltd., and Gute Development Ltd., to SF REITs. The Group hence lost control of these three subsidiaries.

Aggregate consideration of the transaction was approximately HKD2,907,317,000 (RMB2,424,278,000), composing of a total of approximately HKD1,513,317,000 (RMB1,271,751,000) of cash and 35% shares of SF REITs, which amounting to approximately HKD1,394,400,000 (RMB1,152,527,000).

An investment gain amounting to approximately HKD1,082,557,000 (RMB895,512,000) was recognized for the transaction.

SF REITs was then listed on the Main Board of HKEX (REITs code: 2191) on May 17, 2021. The Group held 35% of SF REITs as at December 31, 2021, 2022 and 2023 and June 30, 2024. Since the management of the Group was of the view that the Group had significant influence on SF REITs, the Group recognized SF REITs as an associate.

(ii) Guangdong Fengxing Zhitu Technology Co., Ltd (“Fengtu Technology”)

In October 2021, the Group disposed its equity interest of 59.36% and 9.9% in Fengtu Technology to Mingde Holding and a third party respectively, with the total consideration of approximately RMB1,025,042,000 and investment gains of approximately RMB829,948,000 was recognized.

– II-119 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(iii) Shenzhen Fengwang Holding Co., Ltd (“Fengwang Holding”)

On May 12, 2023, Shenzhen Fengwang Holding Co., Ltd (“ Fengwang Holding ”), a subsidiary of the Company, entered into a share transfer agreement with Shenzhen J&T Supply Chain Co., Ltd (“ J&T Supply Chain ”) which was to sell the entire interests of Shenzhen Fengwang Information Technology Co., Ltd (“ Fengwang Information ”), a subsidiary wholly held by Fengwang Holding. The total consideration of the above transaction was RMB1,183 million subject to operating profit or loss of Fengwang Information borne by the Group during the period from March 31, 2023 to June 27, 2023 (“ the Transitional Period ”).

The consideration had been adjusted to RMB461 million after taking Fengwang Information’s operating results during the Transitional Period into account. This transaction was completed on June 27, 2023.

Investment gain of RMB243,378,000 was recognized, and RMB155,153,000 among which was attributed to the shareholders of the Company.

37 PARTLY OWNED SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

Set out below is summarized financial information for KLN and its subsidiaries since its acquisition by the Group, which has non-controlling interests that are material to the Group. The amounts disclosed for KLN and its subsidiaries are before inter-company eliminations.

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Period from September 28, 2021 to December 31, 2021 RMB’000 Revenue 20,260,964 Net profit 883,124 Total comprehensive income/(loss) 921,320 Net cash generated from operating activities 2,123,547	As at December 31, 2021 RMB’000 22,058,645 23,566,766 45,625,411 14,795,606 6,645,860 21,441,466 Year ended December 31, 2022 RMB’000 74,261,942 2,838,971 3,040,177 4,918,473	As at December 31, 2022 RMB’000 21,821,593 25,615,187 47,436,780 14,196,749 10,240,832 24,437,581 Year ended December 31, 2023 RMB’000 45,944,780 227,315 361,076 3,043,080	As at December 31, 2023 RMB’000 18,187,621 25,760,002 43,947,623 13,130,867 9,017,591 22,148,458 Six months ended June 30, 2023 RMB’000 (unaudited) 22,462,886 102,409 153,958 1,449,579	As at June 30, 2024 RMB’000 19,058,466 24,116,762
				43,175,228

				13,009,124 9,523,595
				22,532,719

				Six months ended June 30, 2024 RMB’000 23,988,254 103,294 (318,288) 1,157,855

– II-120 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(i) Net profits and total comprehensive income attributable to owners were as follows:

	Period
	from			Six	Six
	September	Year	Year	months	months
	28, 2021 to	ended	ended	ended	ended
	December	December	December	June 30,	June 30,
	31, 2021	31, 2022	31, 2023	2023	2024
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Net profits	371,005	1,362,735	209,849	83,039	25,482
Total comprehensive
income/(loss)	252,516	2,182,133	390,618	348,315	(29,708)

(ii) Except for KLN and its subsidiaries, no other subsidiaries had non-controlling interests that are material to the Group for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024.

38. RELATED PARTY TRANSACTIONS

(a) Parent entities

					Ownership	interest
							Six
							months
							ended
			Place of				June
Name		Type	incorporation	2021	2022	2023	30, 2024
Mingde	Holding	Investment	Shenzhen	55.07%	54.95%	54.38%	55.27%

The Company’s ultimate holding company is Mingde Holding, and the ultimate controlling person is Mr. Wang Wei.

(b) Names and relationships with related parties

Related parties are those parties that have the ability to control, jointly control or exercise significant influence over the other party in holding power over the investee; exposure or rights to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of the investor’s returns. Parties are also considered to be related if they are subject to common control or joint control. Related parties maybe individuals or other entities.

– II-121 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Save as disclosed elsewhere in this report, the directors of the Company are of the view that the following parties/companies were significant related parties that had transactions or balances with the Group for the years ended or as at December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024:

Name of related parties

Relationship with the Group

Fengtu Technology (i)

Shenzhen Fengxiang Information Technology Co., Ltd. (“ Fengxiang Information Technology ”) Hangzhou Fengtai E-Commerce Industrial Park Management Ltd. Shenzhen Shunshang Investment Co., Ltd.

Shenzhen SF Hefeng Microfinance Co., Ltd.

Zhejiang Yibao Network Technology Co., Ltd.

Suzhou Fengchengda Network Technology Co., Ltd. Shenzhen Hive Box Technology Co., Ltd and its subsidiaries Shenzhen Fengyi Technology Co., Ltd (ii) Shenzhen Zhongshunyi Finance Service Co., Ltd

Canbeidou Supply Chain and its subsidiaries Chongqing Boqiang Logistics Co., Ltd. Dazhangfang Information Technology and its subsidiaries DHL Weiheng (Zhuhai) Supply Chain Management Co., Ltd. (iii) Galaxis Technology and its subsidiaries Giao Hang Tiet Kiem Joint Stock Company Kin Shun Information Technology Limited Qingdao Dakai Cargo Agency Co., Ltd. Shanghai Qianqu Network Technology Co., Ltd. and its subsidiaries

Shanghai Tingdi Logistics Service Co., Ltd. Shenzhen Fenglian Technology Co., Ltd. Shenzhen Shunjie Fengda and its subsidiaries Shenzhen Zhongwang Finance and Tax Management Co., Ltd.

Wuhan Shunluo Supply Chain Management Co., Ltd.

KENGIC Intelligent Technology Co., Ltd. and its subsidiaries

Shanghai Jiaxing Logistics Co., Ltd. State Grid E-Commerce Yunfeng Logistics Technology (Tianjin) Co., Ltd.

SF Real Estate Investment Trust

Beijing Bei Jian Tong Cheng International Logistics Co., Ltd

Controlled by the ultimate controlling person of the Company Controlled by the ultimate controlling person of the Company

Controlled by the ultimate controlling person of the Company

An associate of Mingde Holding An associate of Mingde Holding

Associates of the Group An associate of the Group Associates of the Group

An associate of the Group before December 2023

Associates of the Group An associate of the Group An associate of the Group An associate of the Group Associates of the Group

An associate of the Group An associate of the Group Associates of the Group An associate of the Group

An associate of the Group

Associates of the Group

An associate of the Group An associate of the Group from August 2020

An associate of the Group from May 2021 An associate of the Group from September 2021

– II-122 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Name of related parties

Relationship with the Group

Xi’an Huahan Air Passenger and Freight An associate of the Group before October Service Co., Ltd. 2022 Rabbit-Line Pay Company Limited An associate of the Group from December 2021 Sichuan Wulianyida Technology Co., Ltd. and Associates of the Group from August 2023 its subsidiaries (iv) Sunway Express (H.K.) Limited An associate of the Group from December 2021 Yihai Shunfeng (Shanghai) Supply Chain An associate of the Group from December Technology Co., Ltd. 2021 Beijing Shunhe Tongxin Technology Co., Ltd. A joint venture of the Group Beijing Wulian Shuntong Technology Co., Ltd. Joint ventures of the Group and its subsidiaries CR-SF International Express Co., Ltd. A joint venture of the Group Geling Information and its subsidiaries Joint ventures of the Group Global Connect Holding Limited A joint venture of the Group Hubei International Logistics Airport Co., A joint venture of the Group Ltd. Jinfeng Borun (Xiamen) Equity Investment A joint venture of the Group Partnership (Limited Partnership) POST 11 OÜ A joint venture of the Group Shenzhen Shenghai Information Service Co., A joint venture of the Group Ltd. Zhongbao Hua’an Investment Management Joint ventures of the Group and its Co., Ltd. subsidiaries Shenzhen Fengsu Technology Co., Ltd. A joint venture of the Group Ezhou China Communications SF Airport A joint venture of the Group from February Industrial Park Investment Development 2021 Co., Ltd. Zhongyunda Aviation Ground Services Co., A joint venture of the Group before June 2021 Ltd. Wenzhou Fengbaoke Technology Co., Ltd. A joint venture of the Group before June 2022 Shenzhen Zhaoguang Investment Co., Ltd. An entity that has significant impact on the Company

(i) Fengtu Technology was a subsidiary of the Company. Fengtu Technology was disposed to Mingde Holding, the Company’s ultimate holding company, in October 2021, since then Fengtu Technology was no longer in the scope of consolidation of the Group and became a related party controlled by the ultimate controlling person of the Company.
(ii) Shenzhen Fengyi Technology Limited had been a subsidiary of Mingde Holding until August 2021. Mingde Holding sold 47.5% shares held and Shenzhen Fengyi Technology Limited then became an associate company of Mingde Holding.
(iii) DHL Weiheng (Zhuhai) Supply Chain Management Co., Ltd. (“ DHL Weiheng ”) was an associate of the Group. In December 2023, the Group acquired the remaining equity interests of DHL Weiheng and DHL Weiheng became a wholly-owned subsidiary of the Group.
(iv) Sichuan Wulianyida Technology Co., Ltd. and its subsidiaries (“ Sichuan Wulianyida ”) were subsidiaries of the Group. In August 2023, the Group disposed a portion of its equity interest in Sichuan Wulianyida. Since then, Sichuan Wulianyida was no longer in the scope of consolidation of the Group and became an associate of the Group.

– II-123 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Transactions with related parties

The following significant transactions were carried out between the Group and its related parties during the Track Record Period. In the opinion of the directors of the Company, the related party transactions were carried out in the normal course of business and at terms negotiated between the Group and the respective related parties.

Sales of goods and services: Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of Mingde Holding Joint ventures of the Group Associates of the Group Purchases of goods and services: Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of Mingde Holding Joint ventures of the Group Associates of the Group Acquisition of assets through acquisition of subsidiaries: Joint ventures of the Group (Note 35(b))	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 611 346 426 203 255 139,478 143,329 127,516 63,668 756,114 30,422 18,164 14,759 6,646 7,157 157,716 15,816 13,937 5,989 14,030 44,140 67,320 91,576 32,527 50,706 372,367 244,975 248,214 109,033 828,262 Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) – – – – 7 518,947 846,803 972,582 455,656 385,191 14 1,168 839 841 190 1,230,588 1,079,265 1,279,481 621,518 537,250 1,618,086 1,145,864 1,661,741 710,024 343,809 3,367,635 3,073,100 3,914,643 1,788,039 1,266,447 – – 335,443 – 559,289 – – 335,443 – 559,289	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 611 346 426 203 255 139,478 143,329 127,516 63,668 756,114 30,422 18,164 14,759 6,646 7,157 157,716 15,816 13,937 5,989 14,030 44,140 67,320 91,576 32,527 50,706 372,367 244,975 248,214 109,033 828,262 Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) – – – – 7 518,947 846,803 972,582 455,656 385,191 14 1,168 839 841 190 1,230,588 1,079,265 1,279,481 621,518 537,250 1,618,086 1,145,864 1,661,741 710,024 343,809 3,367,635 3,073,100 3,914,643 1,788,039 1,266,447 – – 335,443 – 559,289 – – 335,443 – 559,289
		1,266,447

		559,289
		559,289

– II-124 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Disposal of equity: Controlling shareholder Entities controlled by the ultimate controlling person of the Company Joint ventures of the Group Associates of the Group Depreciation and interest expenses borne by the Group as the lessee: Entities controlled by the ultimate controlling person of the Company Joint ventures of the Group Associates of the Group Additions of right-of-use assets: Entities controlled by the ultimate controlling person of the Company Joint ventures of the Group Associates of the Group Other transactions: Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of Mingde Holding Joint ventures of the Group Associates of the Group	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 918,522 – – – – 54,500 – 85,188 85,188 – 98,108 – 12,827 – – – 232,939 – – – 1,071,130 232,939 98,015 85,188 – 12,677 12,334 12,148 5,938 6,026 – – 31,672 – – 142,703 225,826 229,975 113,054 116,707 155,380 238,160 273,795 118,992 122,733 28,331 43,082 53,598 27,183 2,058 – – 3,876 – – 974,664 103,867 32,734 12,093 265 1,002,995 146,949 90,208 39,276 2,323 – – 683 – 341 1,800 1,071 2,416 809 1,545 597 2,530 2,861 1,565 1,391 691 686 1,857 304 408 3,050 3,901 4,869 2,207 977 6,138 8,188 12,686 4,885 4,662	Year ended December 31, Six months ended June 30, 2021 2022 2023 2023 2024 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) 918,522 – – – – 54,500 – 85,188 85,188 – 98,108 – 12,827 – – – 232,939 – – – 1,071,130 232,939 98,015 85,188 – 12,677 12,334 12,148 5,938 6,026 – – 31,672 – – 142,703 225,826 229,975 113,054 116,707 155,380 238,160 273,795 118,992 122,733 28,331 43,082 53,598 27,183 2,058 – – 3,876 – – 974,664 103,867 32,734 12,093 265 1,002,995 146,949 90,208 39,276 2,323 – – 683 – 341 1,800 1,071 2,416 809 1,545 597 2,530 2,861 1,565 1,391 691 686 1,857 304 408 3,050 3,901 4,869 2,207 977 6,138 8,188 12,686 4,885 4,662
		–

		6,026 – 116,707
		122,733

		2,058 – 265
		2,323

		341 1,545 1,391 408 977
		4,662

– II-125 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(d) Balances with related parties

Amounts due from related parties: Trade Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of Mingde Holding Joint ventures of the Group Associates of the Group Non-Trade Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of Mingde Holding Joint ventures of the Group Associates of the Group Amounts due to related parties: Trade Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of Mingde Holding Joint ventures of the Group Associates of the Group Non-Trade Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of Mingde Holding Joint ventures of the Group Associates of the Group	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 3 7 57 54,258 38,864 33,048 23,661 6,409 3,267 3,636 2,318 9,813 15,362 36,588 89,741 – – 167 372,900 406,914 561,979 227 1,026 451 345 8,747 331,401 135,449 156,602 128,372 605,841 657,475 1,158,296 19 – – 108,216 164,820 136,127 4,259 4,460 1,303 168,245 155,990 164,046 128,378 184,783 167,865 18 17 128 4,535 1,039 2,788 526 2,829 3,608 1,419 978 2,393 263,172 215,207 127,181 678,787 730,123 605,439	As at June 30, 2024 RMB’000 50 474,495 3,207 6,037 84,770 136 190,694 450 1,115 139,637
		900,591

		– 150,340 1,477 171,399 121,130 128 2,844 3,589 2,041 87,377
		540,325

The management do not plan to fully settle all amounts due to related parties that are non-trade in nature prior to the initial listing of H Shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited.

Lease Liabilities: Entities controlled by the ultimate controlling person of the Company Joint ventures of the Group Associates of the Group	13,266 – 816,578 829,844	45,379 – 784,767 830,146	92,060 98,987 598,296 789,343	90,324 – 487,627
				577,951

– II-126 –

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(e) Guarantee provided

		As at December 31,	As at December 31,	2021
				Whether the
				guarantee has		been
Guaranteed entities:	Guaranteed	Guarantee period		fulfilled
	RMB’000
Associates	126,420	January 15, 2021 to		No
		December 23,	2033
Joint ventures	276,000	September 29, 2021 to		No
		April 29, 2055
	402,420

		As at December 31,		2022
				Whether the
				guarantee has		been
Guaranteed entities:	Guaranteed	Guarantee period		fulfilled
	RMB’000
Associates	113,374	January 15, 2021 to		No
		December 23,	2033
Joint ventures	782,000	September 29, 2021 to		No
		April 29, 2055
	895,374

		As at December 31,		2023
				Whether the
				guarantee has		been
Guaranteed entities:	Guaranteed	Guarantee period		fulfilled
	RMB’000
Joint ventures	782,000	September 29, 2021 to		No
		April 29, 2055

		As at December 31,		2024
				Whether the
				guarantee has		been
Guaranteed entities:	Guaranteed	Guarantee period		fulfilled
	RMB’000
Joint ventures	782,000	September 29, 2021 to		No
		April 29, 2055

Key management compensation
				Six months ended
	Year	ended December 31,		June 30,
	2021	2022	2023	2023		2024
	RMB’000	RMB’000 RMB’000		RMB’000	RMB’000
				(unaudited)
Key management
compensation	28,414	29,214	48,509	26,241		21,359

(f) Key management compensation

– II-127 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(g) Commitments provided

							As at
		As	at	December	31,		June 30,
		2021		2022		2023	2024
		RMB’000		RMB’000		RMB’000	RMB’000
Joint	ventures	2,890,180		2,384,180		2,384,180	2,384,180

39. COMMITMENTS

(a) Capital Commitments

Contracted, but not provided for purchase of property, plant and equipment Investment to be paid Others	As at December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 10,432,197 3,571,632 1,858,672 3,134,839 1,811,611 131,895 11,067 – 944 13,578,103 5,383,243 1,991,511	As at June 30, 2024 RMB’000 2,378,529 129,783 4,663
		2,512,975

40. SUBSEQUENT EVENTS

(a) From July 1 to October 31, 2024, the Company repurchased an aggregate of 10,571,774 shares of the Company at an aggregate consideration of approximately RMB379,554,000.
(b) On July 18, 2024, Shenzhen S.F. Taisen Holding (Group) Co., Ltd. (“ Taisen Holding ”), a wholly-owned subsidiary of the Company, issued 5-year corporate bonds with an aggregate principal amount of RMB500 million at a coupon rate of 2.30%.

On July 22, 2024, Taisen Holding issued 3-year medium-term notes with an aggregate principal amount of RMB500 million at a coupon rate of 2.15%.

(c) An interim dividend for the six months ended June 30, 2024 of RMB40 cents per ordinary share (tax inclusive) was approved by the shareholders at the first extraordinary general meeting on October 29, 2024. The dividend was not recognized as a liability as at June 30, 2024.
(d) A special dividend of RMB1 per ordinary share (tax inclusive) was approved by the shareholders at the first extraordinary general meeting on October 29, 2024. The dividend was not recognized as a liability as at June 30, 2024.

– II-128 –

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			Note	(i)(vi)	(vi)				(vi)		(vi)				(vi)				(ii)			(vi)		(vi)		(xii)		(vi)		(vi)
	As at the date of	this report	Direct Indirect	100.00% 0.00%	0.00% 100.00%				0.00% 100.00%		0.00% 100.00%				0.00% 100.00%				0.00% 0.00%			0.00% 100.00%		0.00% 100.00%		0.00% 100.00%		0.00% 100.00%		0.00% 100.00%
Percentage of equity interest	As at December 31, As at June 30,	2022 2023 2024	Direct Indirect Direct Indirect Direct Indirect	100.00% 0.00% 100.00% 0.00% 100.00% 0.00%	0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 100.00% 0.00% 100.00% 0.00% 100.00%		0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 63.75% 0.00% 0.00% 0.00% 0.00%			0.00% 100.00% 0.00% 100.00% 0.00% 100.00%		0.00% 100.00% 0.00% 100.00% 0.00% 100.00%		0.00% 100.00% 0.00% 100.00% 0.00% 100.00%		0.00% 87.80% 0.00% 87.80% 0.00% 100.00%		0.00% 100.00% 0.00% 100.00% 0.00% 100.00%
		2021	Direct Indirect	100.00% 0.00%	0.00% 100.00%				0.00% 100.00%		0.00% 100.00%				0.00% 100.00%				0.00% 63.75%			0.00% 100.00%		0.00% 100.00%		0.00% 100.00%		0.00% 87.80%		0.00% 100.00%
Issued ordinary/	registered	share capital	(in thousand)	RMB5,000,000	RMB150,000				RMB60,000		RMB9,530,000				RMB10,000				RMB10,000			RMB2,500,000		RMB1,510,000		RMB5,000		RMB1,695,000		RMB160,000
			Principal Activities	Investment holding	International freight	forwarding, domestic and	international express	service, etc.	Technical maintenance and	development services	Operation and management	of logistics industrial parks			International freight	forwarding, domestic and	international express	service, etc.	Domestic express services	through a nationwide	network partner model	Internal cash management	services	Transport service of aviation	cargo	Cargo transportation and	freight forwarding	Business and supply chain	management	Cargo transportation and	freight forwarding
	Place of	Incorporation	and Operation	Mainland China	Mainland China				Mainland China		Mainland China				Mainland China				Mainland China			Mainland China		Mainland China		Mainland China		Mainland China		Mainland China
			Name	Taisen Holding	S.F. Express Co., Ltd.				SF Technology Co., Ltd.		Shenzhen Fengtai	E-commerce Industrial	Park Assets Management	Co., Ltd.	Guangdong S.F.	E-commerce Co., Ltd.			Shenzhen Fengwang	Express Co., Ltd.		SF Holding Group Finance	Co., Ltd.	SF Airlines Company	Limited	Shenzhen S.F. Shuntai	Logistics Co., Ltd.	Shenzhen SF Freight	Corporation	Shenzhen Shunlu Logistics	Co., Ltd.

– II-129 –

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			Note	(xii)		(vi)				(vi)				(vi)				(vi)				(vi)		(v)(vi)		(vi)				(vi)				(vi)
	As at the date of	this report	Direct Indirect	0.00% 57.86%		0.00% 100.00%				0.00% 100.00%				0.00% 100.00%				0.00% 100.00%				0.00% 100.00%		0.00% 57.86%		0.00% 100.00%				0.00% 100.00%				0.00% 100.00%
Percentage of equity interest	As at December 31, As at June 30,	2022 2023 2024	Direct Indirect Direct Indirect Direct Indirect	0.00% 56.76% 0.00% 56.87% 0.00% 56.87%		0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 100.00% 0.00% 100.00% 0.00% 100.00%		0.00% 56.76% 0.00% 56.87% 0.00% 56.87%		0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 100.00% 0.00% 100.00% 0.00% 100.00%				0.00% 100.00% 0.00% 100.00% 0.00% 100.00%
		2021	Direct Indirect	0.00% 55.85%		0.00% 100.00%				0.00% 100.00%				0.00% 100.00%				0.00% 100.00%				0.00% 100.00%		0.00% 55.85%		0.00% 100.00%				0.00% 100.00%				0.00% 100.00%
Issued ordinary/	registered	share capital	(in thousand)	RMB3,420,000		RMB150,000				RMB5,100				RMB100,000				RMB100,000				RMB10,000		RMB933,458		RMB100,000				RMB100,000				RMB50,000
			Principal Activities	Supply chain management	and other services	International freight	forwarding, domestic and	international express	service, etc.	International freight	forwarding, domestic and	international express	service, etc.	International freight	forwarding, domestic and	international express	service, etc.	International freight	forwarding, domestic and	international express	service, etc.	Cargo transportation and	freight forwarding	Supply chain management	and other services	International freight	forwarding, domestic and	international express	service, etc.	International freight	forwarding, domestic and	international express	service, etc.	Value-added	telecommunication service
	Place of	Incorporation	and Operation	Mainland China		Mainland China				Mainland China				Mainland China				Mainland China				Mainland China		Mainland China		Mainland China				Mainland China				Mainland China
			Name	Shenzhen S.F. Intra-city	Logistics Co., Ltd.	Guang Zhou S.F. Express	Co., Ltd.			Suzhou S.F. Express Co.,	Ltd.			Jiangsu S.F. Express Co.,	Ltd.			Zhejiang Shun Feng	Express Co., Ltd.			Zhejiang Fengchi Network	Technology Co., Ltd.	Hangzhou SF Intra-city	Industrial Co., Ltd.	Beijing S.F. Express Co.,	LTD.			Shanghai Shunheng	Logistics Co., Ltd.			Anhui S.F.	Telecommunication	Service Co., Ltd.

– II-130 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Percentage of equity interest	As at December 31, As at June 30, As at the date of	this report 2022 2023 2024	Direct Indirect Direct Indirect Direct Indirect Direct Indirect Note	0.00% 100.00% 0.00% 100.00% 0.00% 100.00% 0.00% 100.00% (viii)	0.00% 100.00% 0.00% 100.00% 0.00% 100.00% 0.00% 100.00% (x)		0.00% 100.00% 0.00% 100.00% 0.00% 100.00% 0.00% 100.00% (x)		0.00% 100.00% 0.00% 100.00% 0.00% 100.00% 0.00% 100.00% (xi)			0.00% 26.82% 0.00% 26.82% 0.00% 62.66% 0.00% 81.43% (ix)			0.00% 40.69% 0.00% 51.50% 0.00% 51.50% 0.00% 51.50% (viii)			As at	As at December 31, June 30,	2021 2022 2023 2024	RMB’000 RMB’000 RMB’000 RMB’000	50,997,088 58,217,914 66,933,038 66,962,282
		2021	Direct Indirect	0.00% 100.00%	0.00% 100.00%		0.00% 100.00%		0.00% 100.00%			0.00% 26.82%			0.00% 31.42%
Issued ordinary/	Place of registered	Incorporation share capital	Name and Operation Principal Activities (in thousand)	SF Holding (HK) Limited Hong Kong Investment holding HKD8,301,284	Trend Power Investments Cayman Islands Investment holding USD10,000	Limited	SF Holding Investment British Virgin Investment holding USD10	2021 Limited Island	Flourish Harmony Cayman Islands Investment holding USD0	Holdings Company	Limited	KEX Thailand Thailand Express parcel delivery THB1,752,485	services and payment	solutions	K-APEX Logistics (HK) Hong Kong International freight HKD18,900	Co., Ltd. forwarding	(i) The Company’s investment in subsidiaries is as follow:					Taisen Holding

– II-131 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company or any of the companies now comprising the Group in respect of any period subsequent to June 30, 2024 and up to the date of this report.

– II-132 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(B) FINANCIAL INFORMATION OF S.F. HOLDING FOR THE YEAR ENDED DECEMBER 31, 2024

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the year ended December 31, 2024

Note
Revenue
5
Cost of revenue
8
Gross profit
Selling and marketing expenses
8
General and administrative expenses
8
Research and development expenses
8
Net (impairment losses)/reversal of
impairment losses on financial assets
and contract assets
3
Other income
6
Other gains, net
7
Operating profit
Finance income
10
Finance costs
10
Finance costs, net
Share of loss of associates and joint
ventures, net
20
Impairment provision for investments in
associates and joint ventures
20
Profit before income tax
Income tax expense
11
Profit for the year
Attributable to:
– Owners of the Company
– Non-controlling interests
Earnings per share for profit attributable
to the owners of the Company:
13
– Basic (RMB)
– Diluted (RMB)

Year ended December 31,
2024
2023
RMB’000
RMB’000
284,420,059
258,409,403
(245,524,112)
(225,775,678)
38,895,947
32,633,725
(3,096,242)
(2,991,589)
(18,732,335)
(17,766,049)
(2,533,607)
(2,285,314)
(271,693)
33,480
989,740
2,281,202
368,873
408,474
15,620,683
12,313,929
617,713
633,373
(2,373,319)
(2,269,700)
(1,755,606)
(1,636,327)
(70,020)
(67,190)
(187,796)
(123,907)
13,607,261
10,486,505
(3,388,416)
(2,574,896)
10,218,845
7,911,609
10,170,427
8,234,493
48,418
(322,884)
10,218,845
7,911,609
2.11
1.70
2.11
1.70

The above consolidated statements of profit or loss should be read in conjunction with the accompanying notes.

– II-133 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

For the year ended December 31, 2024

Profit for the year
Other comprehensive income:
Items that may be reclassified to profit or loss
– Effective portion of changes in fair value of
hedging instruments arising during the year
– Share of other comprehensive income of
associates and joint ventures accounted for
using the equity method
– Currency translation differences of foreign
operations
Items that will not be reclassified to profit or loss
– Fair value changes of equity investments
designated at fair value through other
comprehensive income
– Share of other comprehensive income of
associates and joint ventures accounted for
using the equity method
– Income tax effect
Other comprehensive (loss)/income for the year net
of tax
Total comprehensive income for the year
Attributable to:
– Owners of the Company
– Non-controlling interests

Year ended December 31,
2024
2023
RMB’000
RMB’000
10,218,845
7,911,609
8,644
12,002
(1,077)
(5,254)
110,885
334,708
(1,553,885)
484,100
–
(329)
3,899
2,749
(1,431,534)
827,976
8,787,311
8,739,585
9,136,451
9,107,526
(349,140)
(367,941)
8,787,311
8,739,585

The above consolidated statements of other comprehensive income should be read in conjunction with the accompanying notes.

– II-134 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at December 31, 2024

Note ASSETS Non-current assets Property, plant and equipment 14 Right-of-use assets 15 Investment properties 16 Intangible assets 17 Deferred tax assets 18 Prepayments, other receivables and other assets 19 Investments in associates and joint ventures 20 Financial assets at fair value through other comprehensive income 21 Financial assets at fair value through profit or loss 21 Total non-current assets Current assets Inventories 22 Contract assets 23 Trade and note receivables 24 Prepayments, other receivables and other assets 19 Financial assets at fair value through other comprehensive income 21 Financial assets at fair value through profit or loss 21 Restricted cash 25 Cash and cash equivalents 25 Total current assets Total assets	As at December 31, 2024 2023 RMB’000 RMB’000 59,174,305 60,104,416 19,625,629 20,890,047 7,241,199 6,418,720 20,036,193 21,030,998 2,291,994 2,263,870 1,855,035 2,333,562 6,203,642 7,378,831 8,231,994 9,489,535 477,416 589,996 125,137,407 130,499,975 2,432,383 2,440,425 2,740,820 1,632,592 27,981,633 25,360,433 10,114,543 12,622,706 170,913 99,978 11,246,156 6,809,742 1,354,303 1,576,496 32,646,055 40,448,308 88,686,806 90,990,680 213,824,213 221,490,655	As at December 31, 2024 2023 RMB’000 RMB’000 59,174,305 60,104,416 19,625,629 20,890,047 7,241,199 6,418,720 20,036,193 21,030,998 2,291,994 2,263,870 1,855,035 2,333,562 6,203,642 7,378,831 8,231,994 9,489,535 477,416 589,996 125,137,407 130,499,975 2,432,383 2,440,425 2,740,820 1,632,592 27,981,633 25,360,433 10,114,543 12,622,706 170,913 99,978 11,246,156 6,809,742 1,354,303 1,576,496 32,646,055 40,448,308 88,686,806 90,990,680 213,824,213 221,490,655
		130,499,975
		2,440,425 1,632,592 25,360,433 12,622,706 99,978 6,809,742 1,576,496 40,448,308
		90,990,680
		221,490,655

– II-135 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Note LIABILITIES Non-current liabilities Borrowings 26 Lease liabilities 15 Deferred tax liabilities 18 Other payables and accruals 29 Deferred income 30 Total non-current liabilities Current liabilities Trade and note payables 27 Contract liabilities 28 Borrowings 26 Lease liabilities 15 Financial liabilities at fair value through profit or loss Income tax payable Other payables and accruals 29 Advances from customers Total current liabilities Total liabilities Net assets	As at December 31, 2024 2023 RMB’000 RMB’000 26,319,260 30,396,912 7,094,483 8,038,495 4,414,485 4,550,974 201,037 140,329 1,266,359 1,090,644 39,295,624 44,217,354 27,395,524 24,914,300 2,039,198 1,832,018 18,365,122 22,309,103 5,501,314 5,769,965 105,464 92,120 1,679,132 1,394,250 17,061,331 17,637,171 46,283 40,714 72,193,368 73,989,641 111,488,992 118,206,995 102,335,221 103,283,660	As at December 31, 2024 2023 RMB’000 RMB’000 26,319,260 30,396,912 7,094,483 8,038,495 4,414,485 4,550,974 201,037 140,329 1,266,359 1,090,644 39,295,624 44,217,354 27,395,524 24,914,300 2,039,198 1,832,018 18,365,122 22,309,103 5,501,314 5,769,965 105,464 92,120 1,679,132 1,394,250 17,061,331 17,637,171 46,283 40,714 72,193,368 73,989,641 111,488,992 118,206,995 102,335,221 103,283,660
		44,217,354

		24,914,300 1,832,018 22,309,103 5,769,965 92,120 1,394,250 17,637,171 40,714
		73,989,641
		118,206,995

		103,283,660

– II-136 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Note EQUITY Share capital 31 Less: treasury shares 31 Reserves 32 Retained earnings Equity attributable to owners of the Company Non-controlling interests Total equity	As at December 31, 2024 2023 RMB’000 RMB’000 4,986,187 4,895,202 (758,081) (2,575,532) 48,624,934 51,634,675 39,140,246 38,835,999 91,993,286 92,790,344 10,341,935 10,493,316 102,335,221 103,283,660

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

The financial statements on pages 88 to 184 were approved by the Board of Directors on March 28, 2025 and were signed on its behalf.

WANG Wei HO Chit Chairman Director

– II-137 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended December 31, 2024

	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Total equity RMB’000 103,283,660 10,218,845 (1,431,534)
Share capital RMB’000 4,895,202 – – – – 170,000 276 – – (79,291) – – – – – – – 4,986,187	Less: Treasury shares RMB’000 (2,575,532) – – – – – – – (1,758,094) 3,575,545 – – – – – – – (758,081)	Reserves (Note 32) RMB’000 51,634,675 – (1,033,976) (1,033,976) 31,036 5,076,004 11,194 54 – (3,496,254) 89,677 (3,916,204) 232,352 – 481,331 (481,331) (3,624) 48,624,934	Retained earnings RMB’000 38,835,999 10,170,427 – 10,170,427 (31,036) – – – – – – – (232,352) (9,602,792) – – – 39,140,246
				8,787,311 – 5,246,004 11,470 35,236 (1,758,094) – 91,446 (3,401,549) – (9,956,639) 481,331 (481,331) (3,624)
				102,335,221

– II-138 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Total equity RMB’000 98,286,049 7,911,609 827,976
Share capital RMB’000 4,895,202 – – – – – – – – – – – – – – – – 4,895,202	Less: Treasury shares RMB’000 (2,040,377) – – – – – (959,956) 424,801 – – – – – – – – – (2,575,532)	Reserves (Note 32) RMB’000 50,037,565 – 873,033 873,033 121,368 1,207 – (69,612) 271,510 (1,037,241) – 31,328 1,403,533 – 389,332 (389,332) 1,984 51,634,675	Retained earnings RMB’000 33,371,351 8,234,493 – 8,234,493 (121,368) – – – – – – (31,328) (1,403,533) (1,213,616) – – – 38,835,999
				8,739,585 – 148,052 (959,956) 355,189 309,338 (1,836,838) 47,904 – – (1,809,681) 389,332 (389,332) 4,018
				103,283,660

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

– II-139 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended December 31, 2024

Note
Cash flows from operating activities
Cash generated from operations
34(a)
Income tax paid
Net cash generated from operating activities
Cash flows from investing activities
Redemption of financial assets at fair value
through profit or loss
Disposal of financial assets at fair value
through other comprehensive income
Proceeds from sales of associates and joint
ventures
Repayment from former subsidiaries
Investment gains or dividend income from
financial assets at fair value through profit
or loss
Dividends received from associates and joint
ventures
Investment gains or dividend income from
financial assets at fair value through other
comprehensive income
Proceeds from disposal of property, plant and
equipment and other non-current assets
Disposal of subsidiaries, net of cash and cash
equivalents held by subsidiaries at the
disposal dates
Purchase of property, plant and equipment
and other non-current assets
Acquisition of financial assets at fair value
through other comprehensive income
Acquisition of financial assets at fair value
through profit or loss
Acquisition of associates and joint ventures
Acquisition of subsidiaries, net of cash and
cash equivalents held by subsidiaries at the
acquisition dates
35
Net cash used in investing activities

Year ended December 31,
2024
2023
RMB’000
RMB’000
35,364,389
29,796,205
(3,178,016)
(3,226,386)
32,186,373
26,569,819
86,145,328
93,433,282
8,451
162,780
620,980
468,039
316,655
–
650,582
604,161
183,401
192,475
20,168
1,998
309,784
335,828
261,058
384,332
(9,344,770)
(12,471,899)
(49,750)
(275,165)
(90,451,596)
(93,974,775)
(28,381)
(169,265)
(696,654)
(2,197,408)
(12,054,744)
(13,505,617)

– II-140 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Note
Cash flows from financing activities
Proceeds from issue of shares
Capital injection from non-controlling
interests
Exercise of share options
Drawdown of bank borrowings
Drawdown of loans from non-controlling
interests
Proceeds from corporate bonds and short-term
debentures
Net cash consideration received from
non-controlling interests without
change of control
Deposits received from lessors after the expiry
of lease contracts
Repayment of bank borrowings
Repayment of corporate bonds and short-term
debentures
Repayment of loans from holders of
asset-backed securities scheme
Repayment of loans from non-controlling
interests
Dividend paid to non-controlling interests
Dividend paid
12
Interests paid
Net cash consideration paid to non-controlling
interests without change of control
34(b)
Payments for repurchase of shares
31
Payments of lease liabilities
34(d)
Payment of transaction costs related to
financing activities
Net cash used in financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at beginning of the
year
Exchange gains on cash and cash equivalents
Cash and cash equivalents at end of the year

Year ended December 31,
2024
2023
RMB’000
RMB’000
5,323,198
–
30,226
157,080
–
355,189
31,847,545
32,543,231
–
44,287
4,296,638
1,499,553
1,193
–
12,023
6,703
(42,276,973)
(22,365,788)
(2,785,271)
(10,110,178)
–
(899,360)
(2,624)
(31,478)
(324,348)
(599,379)
(9,602,792)
(1,213,616)
(1,818,720)
(1,820,066)
(3,451,076)
(1,833,285)
(1,758,094)
(959,956)
(7,438,385)
(7,765,246)
(31,653)
(2,376)
(27,979,113)
(12,994,685)
(7,847,484)
69,517
40,448,308
40,279,947
45,231
98,844
32,646,055
40,448,308

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

– II-141 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2024

1. GENERAL INFORMATION

S.F. Holding Co., Ltd. (hereinafter “ S.F. Holding ” or “ the Company ”), formerly known as Ma’anshan Dingtai Science & Technology Co., Ltd., was established by 11 natural persons including Liu Jilu and the Labour Union of Ma’anshan Dingtai Metallic Products Co., Ltd. by cash contribution on May 22, 2003. On October 22, 2007, the Company officially changed to Ma’anshan Dingtai Rare Earth and New Materials Co., Ltd., and issued additional 19.5 million shares to the public and listed with trading on Shenzhen Stock Exchange (hereinafter “ SZSE ”) on February 5, 2010.

On November 27, 2024, the Company issued 170,000,000 H Shares to the public and listed with trading on the Stock Exchange of Hong Kong Limited (“ HKEx ”).

As at December 31, 2024, the Company had 4,986,186,983 shares issued and outstanding, of which 4,816,186,983 shares were listed on the SZSE (“ A-shares ”) and 170,000,000 shares were listed on the HKEx.

The address of the Company’s registered office is 3/F, Complex Building, SF South China Transit Center, No. 1111, Hangzhan 4th Road, Shenzhen Airport, Caowei Community, Hangcheng Sub-district, Bao’an District, Shenzhen. The Company is an investment holding company. The Company and its subsidiaries (collectively, the “ Group ”) are principally engaged in the development of logistics ecosystem including express delivery, freight delivery, cold chain and pharmaceutical logistics, intra-city on-demand delivery, international logistics service and supply chain solutions in the People’s Republic of China (the “ PRC ”).

Hangzhou SF Intra-city Industrial Co., Ltd., an indirect non-wholly owned subsidiary of the Company, is a listed company on the Main Board of the HKEx and primarily engaged in intra-city on-demand delivery services.

KLN Logistics Group Limited (“ KLN ”, formerly Kerry Logistics Network Limited), an indirect non-wholly-owned subsidiary of the Company, is a listed company on the Main Board of the HKEx and primarily engaged in the provision of logistics and freight forwarding services.

KEX Express (Thailand) Public Company Limited (“ KEX ”), an indirect non-wholly-owned subsidiary of the Company, is a listed company on the Main Board of the Stock Exchange of Thailand Limited (“ SET ”) and primarily engaged in providing domestic and international parcel delivery service.

The consolidated financial statements are presented in Renminbi (“ RMB ”) and all values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.

This note provides a list of principal accounting policies adopted in the preparation of these consolidated financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

– II-142 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

2. SUMMARY OF ACCOUNTING POLICIES

2.1 Summary of material accounting policies

(a) Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with all applicable International Financial Reporting Standards as issued by the International Accounting Standards Board (“ IFRS Accounting Standards ”) and requirements of the Hong Kong Companies Ordinance.

The consolidated financial statements have been prepared on a historical cost basis, except for financial assets at fair value through other comprehensive income and financial assets and financial liability at fair value through profit or loss, which are carried at fair value.

The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

(b) New standards and interpretations
(i) New standards and interpretations not yet adopted

Standards, amendments and interpretations that have been issued but not yet effective and have not been early adopted by the Group are as follows:

		Effective for annual
		periods beginning
		on or after
Amendments to IAS 21	Lack of Exchangeability	January 1, 2025
Amendments to	Classification and Measurement of	January 1, 2026
IFRS 9 and IFRS 7	Financial Instruments
Annual Improvements	Annual Improvements to IFRS	January 1, 2026
	Accounting Standards – Volume 11
IFRS 18	Presentation and Disclosure in	January 1, 2027
	Financial Statements
IFRS 19	Subsidiaries without Public	January 1, 2027
	Accountability: Disclosures
Amendments to IFRS 10	Sale or Contribution of Assets	To be determined
and IAS 28	between an Investor and its
	Associate or Joint Venture

– II-143 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(ii) New standard and amendments to standards adopted and changes in accounting policy

The following new standard and amendments to standards have been adopted by the Group for the financial year beginning on January 1, 2024:

Amendments to IAS 1 Classification of Liabilities as Current or Non-current Amendments to IAS 1 Non-current liabilities with Covenants Amendments to IAS 7 Supplier Finance Arrangements and IFRS 7 Amendments to IFRS 16 Lease Liability in a sales and leaseback

The adoption of these new and amended standards does not have significant financial impact on the consolidated financial statements.

(c) Associates and Joint arrangements

Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights.

Investments in associates are accounted for using the equity method of accounting (Note 2.2(b)), after initially being recognized at cost.

Under IFRS 11, investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor.

Interests in joint ventures are accounted for using the equity method (Note 2.2(b)), after initially being recognized at cost in the consolidated statement of financial position.

(d) Business combinations

Business combination is accounted for under the acquisition method except for business combination under common control.

The Group chooses to perform concentration test as a transaction by transaction basis to determine whether an acquired asset of activities and assets is a business or not. If the concentration test is met, when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set of activities and assets is determined not to be a business and the Group would treat such transaction as purchasing a set of assets.

The consideration transferred for the acquisition of a subsidiary regardless of whether equity investments or other assets are acquired comprises the:

fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
equity interests issued by the Group
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.

– II-144 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the consideration transferred, amount of any non-controlling interest in the acquired entity, and acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase.

Business combination arising from transfer of interests in entities that are under the control of the controlling shareholder that controls the Group is accounted for as if the acquisition had occurred at the beginning of the reporting period or, if later, at the date that common control was established. The assets acquired and liabilities assumed are recognized at the carrying amounts recognized previously in the Group’s controlling shareholder’s perspective. The components of equity of the acquired entities are added to the same components within the Group’s equity and any difference between the net assets acquired and the consideration paid is recognized directly in equity.

(e) Intangible assets

(i) Goodwill

Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(ii) Software

– II-145 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(iii) Research and development

All research costs are charged to the statement of profit or loss as incurred.

Development costs are capitalized only when all the following conditions are met:

the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; and
its intention to complete and its ability to use or sell the asset; and
how the asset will generate economic benefits (including demonstration that the product derived from the intangible asset or the intangible asset itself will be marketable or, in the case of internal use, the usefulness of the intangible asset as such); and
the availability of technical and financial resources to complete the project and procure the use or sale of the intangible asset; and
the ability to measure reliably the expenditure during the development.

Self-developed systems and software, when the development is done and ready for use, are stated at cost less any impairment losses.

(iv) Customer relationships

(v) Trademarks

Separately acquired trademarks are shown at historical cost. Trademarks acquired in a business combination are recognized at fair value at the acquisition date. Trademarks have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of trademarks over five to twenty years, or the expected economic benefit life.

(f) Impairment of non-financial assets

– II-146 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(g) Financial assets

(i) Classification

The Group classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
those to be measured at amortized cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

(ii) Recognition and derecognition

(iii) Measurement

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Amortized cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortized cost. Interest income from these financial assets is included in finance income and lease income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.

– II-147 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses), and impairment expenses are presented as separate line item in the statement of profit or loss.
FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises.

Equity instruments

(iv) Impairment of financial assets

General approach

– II-148 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Stage 1 : Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 : Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs
Stage 3 : Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs

Simplified approach

For trade and note receivables at amortized cost, contract assets and notes held for sale resulted from providing operating services, whether there exits a significant financing component, the Group applies the simplified approach in calculating ECLs, which uses a lifetime expected loss allowance for all trade and note receivables at amortized cost, contract assets and notes held for sale. For lease receivables resulted from lease transactions, the Group also chooses the simplified approach to measure ECLs. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

(h) Financial liabilities

(i) Initial recognition and measurement

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, derivative financial instruments, lease liabilities, interest-bearing borrowings and bonds.

– II-149 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(ii) Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at amortized cost

(iii) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

(i) Current and deferred income tax

(i) Current income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the year in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

(ii) Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and does not give rise to taxable and deductible temporary differences. Deferred income tax is

– II-150 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled.

Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

(iii) Offsetting

(j)

Revenue recognition

Revenue is recognized with the amount of consideration to which the Group expects to be entitled when or as the control of the goods or services is transferred to a customer. Depending on the terms of the contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time. Control of the goods and services is transferred over time if the Group’s performance:

provides all of the benefits received and consumed simultaneously by the customer;
creates or enhances an asset that the customer controls as the Group performs; or
does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

direct measurements of the value transferred by the Group to the customer; or
the Group’s efforts or inputs to the satisfaction of the performance obligation relative to the total expected efforts or inputs.

– II-151 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(i) Revenue from logistics and freight forwarding services

The Group uses information technology systems to process and record services provided and recognizes revenue based on the progress of the service performed within period, which is determined based on proportion of costs incurred to date to the estimated total costs or days spent to the estimated total days. As at the date of the end of the reporting period, the Group re-estimates the progress of the service performed to reflect the actual status of contract performance.

When the Group recognizes revenue based on the progress of the service performed, the amount with unconditional right to consideration obtained by the Group is recognized as trade receivables, and the rest is recognized as contract assets. Meanwhile, provision for trade receivables and contract assets is recognized on the basis of expected credit losses (Note 2.1(h) (iv)). If the contract consideration received or receivable exceeds the progress of the service performed, the excess portion will be recognized as contract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis.

(ii) Sales of goods

– II-152 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(iii) Other services

The Group’s services also include telecommunication service, repairment service, research and development and technical services and other services.

2.2 Summary of other accounting policies

(a) Subsidiaries

The acquisition method of accounting is used to account for business combinations by the Group. Refer to Note 2.1(e) for further accounting policy information.

(b) Equity method

– II-153 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in Note 2.1(g).

(c)

Changes in ownership interests

(d) Separate financial statements

(e)

Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“ the functional currency ”). Since the majority of the assets and operations of the Group are located in the PRC, the consolidated financial statements are presented in RMB, which is also the Company’s functional and the Group’s presentation currency.

– II-154 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(ii) Transactions and balances

(iii) Group companies

assets and liabilities for each statement of financial position of the Group’s entities are translated at the closing rate at the end of the reporting period;
income and expenses for each statement of profit or loss of the Group’s entities are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognized in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

– II-155 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(f) Leases

(i) The Group as the lessee

Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

To determine the incremental borrowing rate, the Group:

where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received; and
makes adjustments specific to the lease, e.g. term, country, currency and security.

Right-of-use assets are measured at cost comprising the following:

the amount of the initial measurement of lease liability

– II-156 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs.

Payments associated with short-term leases and all leases of low-value assets are recognized as expenses in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

(ii) The Group as the lessor

When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its leases as either an operating lease or a finance lease.

Leases that transfer substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee are accounted for as finance leases.

(g) Property, plant and equipment

– II-157 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Freehold land	Not depreciated
Buildings	10 – 50 years
Machinery and equipment	2 – 40 years
Aircraft, aircraft engines, rotables and
other flight equipment	1.5 – 20 years
Other property, plant and equipment	2 – 20 years
Leasehold improvements	Shorter of their useful lives
	and the lease term

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 2.1(g)).

Gains and losses on disposal are determined by comparing the proceeds with the carrying amounts. These are included in the consolidated statement of comprehensive income.

In relation to the aircraft fuselage within the properties, plants and equipment, the Group provided for depreciation over a period of 10 years in and before the year ended December 31, 2023. Based on the assessment conducted by the technical department of the Group with reference to the actual useful lives and utilization of aircraft, the Group considers that current estimated useful lives of aircraft no longer reflects the actual usage of the aircraft.

This change in accounting estimate was implemented using the prospective method from January 1, 2024. The comparison of the changes in depreciation of the aircraft fuselage is as follows:

	Estimated	Estimated	Depreciation
	useful lives	residual value	rate
Before	10 years	5.00%	9.50%
After	10–20 years	5.00%	9.50%–4.75%

– II-158 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(h) Investment properties

Depreciation is calculated on the straight-line basis to its residual value over its estimated useful life. The estimated useful lives are as follows:

Buildings 10–50 years Land use rights 20–50 years

Any gains or losses on the retirement or disposal of an investment property are recognized in profit or loss in the year of the retirement or disposal.

(i) Inventories

(j) Trade and other receivables

(k) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown as a separate current liability in the consolidated statement of financial position.

Restricted and pledged bank deposits are not included in cash and cash equivalents.

– II-159 –

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(l) Share capital and capital reserve

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

(m) Trade and other payables

(n) Borrowings

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(o) Borrowing costs

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other borrowing costs are expensed in the period in which they are incurred.

– II-160 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(p) Provisions

(q) Employee benefits

(i) Short-term obligations

(ii) Employment obligations

Housing funds, medical insurances and other social insurances

Termination benefits

– II-161 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(r) Share-based payments

Equity-settled share-based payments made in exchange for services rendered by employees are measured at the fair value of equity instruments granted to employees. Instruments which are vested immediately upon the grant are charged to relevant costs or expenses at the fair value on the date of grant and the capital reserve is credited accordingly. Instruments of which vesting is conditional upon completion of services or fulfillment of performance conditions are measured by recognizing services rendered during the period in relevant costs or expenses and crediting the capital reserve accordingly at the fair value on the date of grant according to the best estimates conducted by the Group at each date of the end of the reporting period during the pending period. The fair value of equity instruments is determined by share price or using an adjusted form of the discounted cash flow or the binomial option pricing model. For details see Note 33. Share-based payment.

(s) Dividend distribution

Dividend distributed to the shareholders is recognized as a liability in the consolidated financial statements in the period when the dividends are approved by the entities’ shareholders or directors, where appropriate.

– II-162 –

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(t) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.
(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

the after-income tax effect of interests and other financing costs associated with dilutive potential ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(u) Government grants

Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions.

– II-163 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

3. FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

(a) Market risk

(i) Foreign exchange risk

As at December 31, 2024 and 2023, for the Group’s subsidiaries with RMB as the functional currency, major monetary assets and liabilities exposed to foreign exchange risk are listed below:

At December 31, 2024 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables Total At December 31, 2023 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables Total	USD denominated RMB’000 382,588 541,416 (369,254) 554,750 254,389 649,073 (391,029) 512,433	HKD denominated RMB’000 32,664 22,940 (25,123) 30,481 45,245 27,900 (56,703) 16,442	Others denominated RMB’000 2,160 47,901 (60,337)
			(10,276)

			6,177 17,133 (62,492)
			(39,182)

As at December 31, 2024, for the above USD-denominated financial assets and financial liabilities, if the RMB strengthened or weakened by 5% against USD and with all variables held constant, the Group’s profit before taxation would have decreased or increased by approximately RMB27,738,000 (2023: RMB25,622,000). Other foreign currencies of changes have no significant impact on foreign exchange risk.

– II-164 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at December 31, 2024 and 2023, for the Group’s subsidiaries with HKD as the functional currency, major monetary assets and liabilities exposed to foreign exchange risk are listed below:

At December 31, 2024 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables Total At December 31, 2023 Cash and cash equivalents Trade and other receivables Trade payables, accruals and other payables Total	USD denominated RMB’000 217,831 28,725 (4,313) 242,243 384,796 95,029 (97,982) 381,843	HKD denominated RMB’000 17,857 17,723 (36,590) (1,010) 98,862 5,846 (8,046) 96,662	Others denominated RMB’000 166 – (722)
			(556)

			34,738 – (5,148)
			29,590

For the Group’s subsidiaries with HKD as the functional currency, the foreign exchange exposure of their non-functional currency denominated financial assets and financial liabilities was mainly derived from the USD. As USD is pegged against HKD, the foreign exchange exposure of the above-mentioned subsidiaries is not significant.

(ii) Price risk

The Group is exposed to price risk mainly arising from equity investments held by the Group that are classified either as FVPL or FVOCI that will not be sold within one year.

Sensitivity analysis is performed by management to assess the exposure of the Group’s financial results to equity price risk of FVPL and FVOCI as at December 31, 2024 and 2023. If prices of the respective instruments held by the Group had been 10% higher/lower as at December 31, 2024 and 2023, profit for the year would have been approximately RMB47,742,000 (2023: RMB59,000,000) higher/lower as a result of gains/losses on financial instruments classified as at FVPL, other comprehensive income would have been approximately RMB823,199,000 (2023: RMB948,954,000) higher/lower as a result of gains/losses on financial instruments classified as at FVOCI.

(iii) Interest rate risk

– II-165 –

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in the cash flows arising from a change in market interest rates, the Group may enter into certain interest rate swap contracts to swap variable rates into fixed rates.

The following tables list out the interest rate profiles of the Group’s interest-bearing financial instruments as at December 31, 2024 and 2023:

Floating rate instruments Long-term borrowings

As at December 31, 2024 2023 RMB’000 RMB’000 6,186,386 11,355,241

	As at December	31,
	2024	2023
	RMB’000	RMB’000
Fixed rate instruments
Bonds
– USD denominated	17,943,954	18,295,063
– RMB denominated	1,997,981	499,719

If interest rates of floating rate instruments had been 50 basis points higher or lower with all other variables held constant, profit before income tax would be lower or higher approximately RMB30,932,000 and RMB56,776,000 as at December 31, 2024 and 2023, respectively.

(b) Credit risk

(i) Credit risk of cash and bank balances, restricted and pledged bank deposits

(ii) Credit risk of trade receivables and contract assets

– II-166 –

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forward looking macroeconomic data. At the end of each reporting period, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

A default on trade receivables and contract assets is when the counterparty fails to make contractual payments when they fall due.

Trade receivables and contract assets are written off when there is no reasonable expectation of recovery.

On that basis, the loss allowance as at December 31, 2024 and 2023 was determined as follows for both trade receivables and contract assets:

Assessed based on grouping – The third parties – The related parties Assessed individual Total Assessed based on grouping – The third parties – The related parties Assessed individual Total	As at December 31, 2024 Gross amount Trade and note receivables Contract assets Loss allowance RMB’000 RMB’000 RMB’000 28,280,344 2,737,292 794,255 540,956 8,517 50,401 274,364 – 274,364 29,095,664 2,745,809 1,119,020 As at December 31, 2023 Gross amount Trade and note receivables Contract assets Loss allowance RMB’000 RMB’000 RMB’000 25,957,399 1,635,220 700,939 124,211 924 23,790 657,488 – 657,488 26,739,098 1,636,144 1,382,217	Expected loss rate % 2.56% 9.17% 100.00%
		–

		Expected loss rate % 2.54% 19.01% 100.00%
		–

(iii) Credit risk of lease receivables

For lease receivables resulted from lease transactions, the Group applies IFRS 9 simplified approach to measuring ECLs regardless of whether there exits a significant financing component.

As at December 31, 2024 and 2023, management is of the view that the credit risk of lease receivables is low and the loss allowance provision for lease receivables is not material.

(iv) Credit risk of other receivables (excluding lease receivables)

– II-167 –

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implementation rules for loans and advances in accordance with the requirements of relevant state regulatory authorities, and implemented standardized management over the entire process of credit granting. In addition, the Group further improved the systems for credit risk monitoring and early warning and defective credit extension management. The Group actively responded to the changes in the credit environment, regularly analyzed the situation and dynamic of credit risks and took risk control measures on a forward-looking basis. The Group also established an optimization management mechanism for defective credit and accelerated the optimization progress of defective credit to avoid non-performing loans.

For other receivables excluding lease receivables and loans and advances, the Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. To assess whether there is a significant increase in credit risk in other receivables, the Group compares the risk of a default occurring on the assets at the end of each reporting period with the risk of default at the date of initial recognition. It considers available, reasonable, supportive forward-looking information. Especially, the following indicators are incorporated:

external credit rating of the counterparty (as far as available);
actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations;
actual or expected significant changes in the operating results of the counterparty; and
significant expected changes in the performance and behavior of the counterparty, including changes in the payment status of the counterparty

Based on historical experiences, other receivables from related parties were settled within 12 months after upon maturity hence the expected credit loss is minimal.

As stated in note 2.1(g), impairment on other receivables accounted as amortized cost is measured as either 12-month ECL or lifetime ECL. On such basis, the following table sets forth the loss allowance for other receivables as at December 31, 2024 and 2023:

As at December 31, 2024 Expected credit loss rate Gross carrying amounts Allowance for impairment As at December 31, 2023 Expected credit loss rate Gross carrying amounts Allowance for impairment	Stage 1 12-month ECL RMB’000 0.34% 3,694,742 (12,573) 0.76% 4,502,235 (34,101)	Stage 2 Lifetime ECL RMB’000 N/A – – N/A – –	Stage 3 Lifetime ECL RMB’000 100.00% 322,238 (322,238) 96.71% 348,803 (337,315)	Total RMB’000 8.33% 4,016,980 (334,811)

				7.66% 4,851,038 (371,416)

– II-168 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Liquidity risk

At December 31, 2024 Financial liabilities at fair value through profit or loss Trade and other payables (excluding salaries, wages and benefits payables, tax payables and other non-financial liabilities) Borrowings Lease liabilities Total At December 31, 2023 Financial liabilities at fair value through profit or loss Trade and other payables (excluding salaries, wages and benefits payables, tax payables and other non-financial liabilities) Borrowings Lease liabilities Total	Less than 1 year RMB’000 105,464 37,349,615 19,445,318 6,102,698 63,003,095 92,120 35,775,997 23,358,218 6,102,697 65,329,032	Between 1 and 2 years RMB’000 – 56,513 8,930,398 4,374,621 13,361,532 – 563 4,426,187 4,569,459 8,996,209	Between 2 and 5 years RMB’000 – – 9,647,915 2,913,796 12,561,711 – – 16,910,274 2,529,679 19,439,953	Over 5 years RMB’000 – – 10,496,015 1,595,481 12,091,496 – – 11,972,971 1,784,760 13,75117	Total RMB’000 105,464 37,406,128 48,519,646 14,986,596 101,017,834 92,120 35,776,560 56,667,650 14,986,595 107,522,925	Carrying amount RMB’000 105,464 37,406,128 44,684,382 12,595,797
						94,791,771

						92,120 35,776,560 52,706,015 13,808,460
						102,383,155

3.2 Capital management

– II-169 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The Group monitors capital on the basis of the asset-liability ratio and the asset-liability ratio as at December 31, 2024 and 2023 were as follows:

	As at December 31,	As at December 31,
	2024	2023
	RMB’000	RMB’000
Total assets	213,824,213	221,490,655
Total liabilities	111,488,992	118,206,995
Asset-liability ratio	52.14%	53.37%

3.3 Fair value estimation

The table below analyzes the Group’s financial instruments carried at fair value as at December 31, 2024 and 2023 by level of the inputs to valuation techniques used to measure fair value. Such inputs are categorized into three levels within a fair value hierarchy as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

As at December 31, 2024 and 2023, the financial assets measured at fair value on a recurring basis by the above three levels were analyzed below:

As at December 31, 2024 Non-current: Financial assets at FVPL – Industry fund investments – others Financial assets at FVOCI – Equity investment in entities, at fair value Current: Financial assets at FVPL – Structured deposits – Fund investment and others Financial assets at FVOCI – Notes held for sale As at December 31, 2023 Non-current: Financial assets at FVPL – Industry fund investments – others Financial assets at FVOCI – Equity investment in entities, at fair value Current: Financial assets at FVPL – Structured deposits – Fund investment and others Financial assets at FVOCI – Notes held for sale	Level 1 RMB’000 – – 1,033,218 – 78 – – – 2,418,842 – 78 –	Level 2 RMB’000 – – – – 2,797 170,913 – – – – 354 99,978	Level 3 RMB’000 331,815 145,601 7,198,776 11,015,904 227,377 – 499,320 90,676 7,070,693 6,542,881 266,429 –	Total RMB’000 331,815 145,601 8,231,994 11,015,904 230,252 170,913
				499,320 90,676 9,489,535 6,542,881 266,861 99,978

– II-170 –

APPENDIX II FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The changes in Level 3 assets are analyzed below:

Opening balance Additions Transfer to Level 1 Disposals/settlements Changes in fair value recognized in profit or loss Changes in fair value recognized in other comprehensive income Currency translation differences Closing balance	Financial assets at FVPL Current Structured deposits Fund investment and others Fund investment 6,542,881 266,429 499,320 89,812,000 30,000 11,114 – 121,537 (93,125) (85,791,425) (194,623) (42,595) 452,448 (2,738) (47,111) – – – – 6,772 4,212 11,015,904 227,377 331,815	Non-Current Others 90,676 10,000 96,321 – (52,365) – 969 145,601	Financial assets at FVOCI Equity investments 7,070,693

			34 – (1,302) – (97,670) 227,021
			7,198,776

– II-171 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements and the sensitivity analysis of fair value to the inputs:

Description
Current:
Financial assets at FVPL
– Structured deposits
– Fund investment and
others
Non-current:
Financial assets at FVPL
– Industry fund
investments
– Others
Financial assets at
FVOCI
– Equity investment in
entities, at fair value

Fair value
Valuation
technique(s)
Significant
unobservable
input(s)
Range of
inputs
(probability-
weighted
average)
Sensitivity of fair value to
the input(s)
As at December 31,
2024
2023
RMB’000
RMB’000
11,015,904
6,542,881
Discounted
cash flow
Expected rate
of return
1.40%-4.00%
10% increase/decrease in
expected rate of return
would result in
increase/decrease in fair
value by 0.03%-0.04%
227,377
266,429
Adjusted net
assets value
Adjusted net
assets value
N/A
10% increase/decrease in
adjusted net assets value
would result in increase/
decrease in fair value by
10%
331,815
499,320
Adjusted net
assets value
Adjusted net
assets value
N/A
10% increase/ decrease in
adjusted net assets value
would result in increase/
decrease in fair value by
10%
145,601
90,676
Recent
transaction
price
N/A
N/A
N/A
7,198,776
7,070,693
Recent
transaction
price or a
combination
of observable
and
unobservable
inputs
Discount for
lack of
marketability
13%-17%
10% increase/decrease in
discount for lack of
marketability would result
in decrease/increase in fair
value by 1.55%-2.11%
18,919,473
14,469,999

– II-172 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

4.1 Critical accounting estimate and its key assumption

(a) Measurement of the expected credit losses

For financial assets and contract assets at amortized cost, the Group calculates expected credit losses based on exposure at default and expected credit loss rates.

(b) Estimated impairment of long-term assets (other than goodwill)

The Group tests whether property, plant and equipment, right-of-use assets, investment properties, intangible assets (other than goodwill) and other non-current assets have been impaired in accordance with the accounting policy stated in Note 2.1(g) to the consolidated financial statements. The recoverable amount of the cash-generating unit has been determined based on the higher of its value in use and its fair value less costs of disposal. The cash flow projections used to determine the value in use of a cash-generating unit is based on significant assumptions, such as growth rate and discount rate applied to the projected cash flows. These assumptions may be affected by unexpected changes in future market or economic conditions.

(c) Impairment of goodwill

The Group has engaged independent external valuers to assist them in performing annual goodwill impairment assessment on KLN CGUs and Fenghao Supply Chain CGUs. Based on the valuation report issued by the independent external valuers, the Group uses the present value of expected future cash flows to determine the value in use for both CGUs. Due to the uncertainty in the development of the economic environment, revenue growth rate over the forecast period, terminal revenue growth rate, margin of earnings before interests and tax, and pre-tax discount rate used in the calculation of the present value of the future cash flows are also subject to uncertainty.

– II-173 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(d) Fair value of financial instruments determined using valuation techniques

Using different valuation techniques and parameter assumptions may lead to significant difference of fair value estimation.

(e) Uncertain tax position and recognition of current and deferred income tax assets

4.2 Critical accounting judgements

(a) Judgements on whether the Group can exercise significant influence on invested entity

– II-174 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Scope of consolidation

Consolidation is required only if control exists. The Group controls an investee when it has all the following: (i) power over the investee, including the assessment of other share party’s dispersion of holding; (ii) exposure, or rights, to variable returns from its involvement with the investee; and (iii) the ability to use its power over the investee to affect the amount of the Group’s returns. These three factors cannot be considered in isolation by the Group in its assessment of control over an investee. Where the factors of control are not apparent, significant judgement is applied in the assessment, which is based on an overall analysis of all of the relevant facts and circumstances.

The Group is required to reassess whether it controls the investee if facts and circumstances indicate a change to one or more of the three factors of control.

5. REVENUE AND SEGMENT INFORMATION

(a) CODM reviews the Group’s internal reporting in order to assess performance and allocate resources

Express and freight delivery segment, which provides time-define express, economy express, cold chain and pharmaceuticals logistics service, as well as freight service;
Intra-city on-demand delivery segment, which provides intra-city delivery for merchants and consumers, and last-mile delivery services;
Supply chain and international segment, which provides supply chain services, international express service and international freight forwarding service.

Segment performance is assessed based on key performance indicators. Transfer prices between operating segments are based on the amount stated in the contracts agreed by both sides.

For the year ended December 31, 2024 and 2023, no revenue from a single customer exceeded 10% or more of the total revenue.

– II-175 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Segment information for the year ended December 31, 2024 is as follows:

	Express and	Supply chain	Intra-city
	freight	and	on-demand
	delivery	international	delivery	Undistributed	Inter-segment
	segment	segment	segment	units	elimination	Total
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Revenue from external
customers	200,162,392	74,000,342	9,010,521	1,246,804	–	284,420,059
Inter-segment revenue	7,005,842	1,330,524	6,735,562	4,935,844	(20,007,772)	–
Cost of revenue	174,198,376	69,415,600	14,681,847	4,913,824	(17,685,535)	245,524,112
Profit/(loss) before income tax	13,157,825	(547,911)	144,963	824,127	28,257	13,607,261
Income tax expenses/(credits)	2,176,559	776,502	12,503	428,207	(5,355)	3,388,416
Net profit/(loss)	10,981,266	(1,324,413)	132,460	395,920	33,612	10,218,845
Total assets	101,068,424	66,091,896	4,519,821	156,845,741	(114,701,669)	213,824,213
Total liabilities	70,070,634	58,800,172	1,709,205	78,587,251	(97,678,270)	111,488,992
Depreciation of right-of-use
assets_(Note 8)_	5,700,363	1,698,857	13,804	270,764	(885,005)	6,798,783
Depreciation and amortization
(excluding right-of-use assets)
(Note 8)	7,789,173	1,801,114	48,177	904,420	(9,410)	10,533,474
Net reversal of impairment
losses/(impairment losses)
on financial assets and
contract assets	119,609	156,095	3,118	40,225	(47,354)	271,693

Segment information for the year ended December 31, 2023 is as follows:

	Express and	Supply chain	Intra-city
	freight	and	on-demand
	delivery	international	delivery	Undistributed	Inter-segment
	segment	segment	segment	units	elimination	Total
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Revenue from external
customers	186,890,137	62,859,302	7,371,250	1,288,714	–	258,409,403
Inter-segment revenue	12,231,353	733,174	5,029,453	4,430,069	(22,424,049)	–
Cost of revenue	171,457,160	58,474,528	11,606,756	4,372,537	(20,135,303)	225,775,678
Profit/(loss) before income tax	10,602,204	(328,849)	48,327	143,788	21,035	10,486,505
Income tax expenses/(credits)	2,149,342	205,652	(2,268)	229,825	(7,655)	2,574,896
Net profit/(loss)	8,452,862	(534,501)	50,595	(86,037)	28,690	7,911,609
Total assets	103,171,690	64,308,117	4,038,844	186,550,844	(136,578,840)	221,490,655
Total liabilities	72,928,079	53,658,452	1,218,597	84,432,442	(94,030,575)	118,206,995
Depreciation of right-of-use
assets_(Note 8)_	6,083,423	1,707,837	27,188	67,026	(672,411)	7,213,063
Depreciation and amortization
(excluding right-of-use assets)
(Note 8)	7,549,542	1,651,130	52,445	874,960	(22,033)	10,106,044
Net reversal of impairment
losses/(impairment losses) on
financial assets and contract
assets	(111,509)	82,879	3,668	67,481	(75,999)	(33,480)

– II-176 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) The Group’s business operates in three main geographical areas, even though they are managed on a worldwide basis

The Group’s revenue by geographical areas is analyzed based on the following criteria:

Within mainland China Hong Kong, Macau, Taiwan Other international Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 242,796,156 223,510,607 9,467,291 9,134,850 32,156,612 25,763,946 284,420,059 258,409,403	Year ended December 31, 2024 2023 RMB’000 RMB’000 242,796,156 223,510,607 9,467,291 9,134,850 32,156,612 25,763,946 284,420,059 258,409,403
		258,409,403

The non-current assets information below is based on the locations of the assets and exclude financial instruments and deferred tax assets.

Within mainland China Hong Kong, Macau, Taiwan Other international Total	As at December 31, 2024 2023 RMB’000 RMB’000 92,143,600 95,919,000 5,304,613 5,293,887 16,394,244 16,575,617 113,842,457 117,788,504	As at December 31, 2024 2023 RMB’000 RMB’000 92,143,600 95,919,000 5,304,613 5,293,887 16,394,244 16,575,617 113,842,457 117,788,504
		117,788,504

– II-177 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Disaggregation of revenue

Revenue from main operations At a point in time Over time Lease income Total Revenue from other operations At a point in time Over time Lease income Total	Year ended December 31, 2024 Logistics and freight forwarding services Sales of goods Others RMB’000 RMB’000 RMB’000 – 6,042,752 456,009 276,275,771 – 881,045 – – 365,962 276,275,771 6,042,752 1,703,016 – – 79,524 – – 131,414 – – 187,582 – – 398,520 276,275,771 6,042,752 2,101,536	Total RMB’000 6,498,761 277,156,816 365,962
		284,021,539

		79,524 131,414 187,582
		398,520
		284,420,059

– II-178 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Revenue from main operations At a point in time Over time Lease income Revenue from other operations At a point in time Over time Lease income Total 6. OTHER INCOME	Year ended December 31, 2023 Logistics and freight forwarding services Sales of goods Others RMB’000 RMB’000 RMB’000 – 5,626,072 306,401 251,127,665 – 619,037 – – 307,405 251,127,665 5,626,072 1,232,843 – – 100,907 – – 136,465 – – 185,451 – – 422,823 251,127,665 5,626,072 1,655,666	Total RMB’000 5,932,473 251,746,702 307,405
		257,986,580

		100,907 136,465 185,451
		422,823
		258,409,403

Government grants (Note (a)) Dividend income Others Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 679,226 1,983,551 1,005 2,438 309,509 295,213 989,740 2,281,202	Year ended December 31, 2024 2023 RMB’000 RMB’000 679,226 1,983,551 1,005 2,438 309,509 295,213 989,740 2,281,202
		2,281,202

Note:

(a) The government grants were mainly incentives provided by local government authorities in the PRC, including various forms of government financial incentives and tax preferences, to reward the Group’s support and contribution to the development of local economies. As at December 31, 2024 and 2023, there were no unfulfilled conditions or contingencies relating to these government grants.

– II-179 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

7. OTHER GAINS, NET

Gains on disposal of investments in associates and joint ventures Gains on disposal of investments in subsidiaries (Note 36(b)) Fair value changes in financial assets at FVPL Losses on disposal of property, plant and equipment, right-of-use assets and other non-current assets Impairment of inventories, property, plant and equipment and other non-current assets Net exchange gains/(losses) Gains on repurchase of corporate bonds Others Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 89,622 21,441 80,615 268,204 509,717 529,513 (60,228) (53,891) (141,622) (62,390) 82,290 (96,381) 87,779 – (279,300) (198,022) 368,873 408,474	Year ended December 31, 2024 2023 RMB’000 RMB’000 89,622 21,441 80,615 268,204 509,717 529,513 (60,228) (53,891) (141,622) (62,390) 82,290 (96,381) 87,779 – (279,300) (198,022) 368,873 408,474
		408,474

8. EXPENSES BY NATURE

Expenses included in cost of revenue, selling and marketing expenses, general and administrative expenses and research and development expenses are analyzed as follows:

Labour outsourcing cost Transportation expenses Transportation outsourcing cost Employee benefit expenses (Note 9) Depreciation and amortization (excluding right-of-use assets) Rent and venue usage expenses Depreciation of right-of-use assets (Note 15) Auditor’s remuneration Others Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 97,445,480 88,615,879 54,096,591 44,578,173 39,197,467 38,352,035 33,195,660 31,776,779 10,533,474 10,106,044 7,457,712 7,100,757 6,798,783 7,213,063 62,517 64,508 21,098,612 21,011,392 269,886,296 248,818,630	Year ended December 31, 2024 2023 RMB’000 RMB’000 97,445,480 88,615,879 54,096,591 44,578,173 39,197,467 38,352,035 33,195,660 31,776,779 10,533,474 10,106,044 7,457,712 7,100,757 6,798,783 7,213,063 62,517 64,508 21,098,612 21,011,392 269,886,296 248,818,630
		248,818,630

Note:

(a) Government grants amounting to approximately RMB995,635,000 and RMB164,944,000 had been recognized as deduction in the cost of revenue for the year ended December 31, 2024 and 2023, respectively.

– II-180 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

9. EMPLOYEE BENEFIT EXPENSES

(a) Employee benefit expenses are analyzed as follows:

Salaries, wages and bonuses Share-based compensation expenses (Note 33) Contributions to pension plans Other employee benefits Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 27,655,159 26,127,739 80,494 543,046 1,461,557 1,301,124 3,998,450 3,804,870 33,195,660 31,776,779	Year ended December 31, 2024 2023 RMB’000 RMB’000 27,655,159 26,127,739 80,494 543,046 1,461,557 1,301,124 3,998,450 3,804,870 33,195,660 31,776,779
		31,776,779

(b) Directors’ and supervisors’ remuneration

Year ended December 31, 2024 Executive Directors Mr. Wang Wei Mr. Ho Chit Ms. Wang Xin Mr. Zhang Dong (ii) Mr. Xu Bensong *(i)* Independent non-executive Directors Mr. CHAN Charles Sheung Wai Mr. Lee Carmelo Ka Sze Dr. Ding Yi Supervisors Mr. Shum Tze Leung Ms. Wang Jia Ms. Li Juhua Mr. Zhang Shun Mr. Liu Jilu Total	Fees RMB’000 – 305 133 – – – – – – – – – – 438	Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) Share-based compensation expense RMB’000 RMB’000 1,309 – 7,543 1,735 3,464 749 1,685 1,153 403 124 680 – 680 – 680 – 315 – 1,450 – 1,842 – 940 – – – 20,991 3,761	Total RMB’000 1,309 9,583 4,346 2,838 527 680 680 680 315 1,450 1,842 940 –
			25,190

– II-181 –

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Year ended December 31, 2023 Executive Directors Mr. Wang Wei Mr. Ho Chit Ms. Wang Xin Mr. Zhang Dong (ii) Independent non-executive Directors Mr. CHAN Charles Sheung Wai Mr. Lee Carmelo Ka Sze Dr. Ding Yi Supervisors Mr. Shum Tze Leung Ms. Wang Jia Ms. Li Juhua Mr. Zhang Shun Mr. Liu Jilu Total	Fees RMB’000 – 426 – – – – – – – – – – 426	Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) Share-based compensation expense RMB’000 RMB’000 1,161 – 6,240 2,945 3,120 2,945 2,626 2,945 680 – 680 – 680 – 641 – 1,148 – 1,692 – 766 – – – 19,434 8,835	Total RMB’000 1,161 9,611 6,065 5,571 680 680 680 641 1,148 1,692 766 –
			28,695

Notes:

(i) Mr. Xu Bensong was appointed as an executive director on October 30, 2024.

(ii) Mr. Zhang Dong resigned as an executive director on June 26, 2024.

(c) Five highest paid individuals

The five individuals whose emoluments were the highest in the Group for the years ended December 31, 2024 and 2023 include 1 and 3 directors respectively whose emoluments are reflected in the analysis shown in Note 9(b), respectively. The emoluments paid to the remaining 4 and 2 individuals during the years ended December 31, 2024 and 2023, respectively are as follows:

Salaries, wages, bonuses and benefits in kind (including contributions to pension plans) Share-based compensation expenses Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 15,020 6,142 2,972 5,890 17,992 12,032	Year ended December 31, 2024 2023 RMB’000 RMB’000 15,020 6,142 2,972 5,890 17,992 12,032
		12,032

– II-182 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The emoluments of the above individuals fell within the following bands:

			ended	31,
			2024	2023
HK$3,500,001	to	HK$4,000,000	–	–
HK$4,000,001	to	HK$4,500,000	–	–
HK$4,500,001	to	HK$5,000,000	2	–
HK$5,000,001	to	HK$5,500,000	–	–
HK$5,500,001	to	HK$6,000,000	–	–
HK$6,000,001	to	HK$6,500,000	–	1
HK$6,500,001	to	HK$7,000,000	2	–
HK$7,000,001	to	HK$7,500,000	–	1
HK$7,500,001	to	HK$8,000,000	–	–
HK$8,000,001	to	HK$8,500,000	–	–

10. FINANCE INCOME AND COSTS

Finance income: Interest income on deposits in financial institutions Finance costs: Interest expenses on borrowings Interest expenses on lease liabilities (Note 15 (b)) Less: Interest capitalized Finance costs, net	Year ended December 31, 2024 2023 RMB’000 RMB’000 617,713 633,373 1,912,201 1,808,850 503,871 564,374 (42,753) (103,524) 2,373,319 2,269,700 1,755,606 1,636,327	Year ended December 31, 2024 2023 RMB’000 RMB’000 617,713 633,373 1,912,201 1,808,850 503,871 564,374 (42,753) (103,524) 2,373,319 2,269,700 1,755,606 1,636,327
		1,808,850 564,374 (103,524)
		2,269,700
		1,636,327

The average capitalization rates for the year ended December 31, 2024 and 2023 used to determine the amount of borrowing costs eligible for capitalization were 2.83% and 2.75%, respectively.

11. INCOME TAX EXPENSE

The following table sets forth the component of income tax expense of the Group for the years ended December 31, 2024 and 2023, respectively:

Current income tax Deferred income tax (Note 18) Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 3,640,127 3,340,596 (251,711) (765,700) 3,388,416 2,574,896	Year ended December 31, 2024 2023 RMB’000 RMB’000 3,640,127 3,340,596 (251,711) (765,700) 3,388,416 2,574,896
		2,574,896

– II-183 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Reconciliation between income tax expenses and profit before income tax at applicable tax rates for the years ended December 31, 2024 and 2023:

Profit before income tax Tax at the statutory tax rate of 25% (Note (a)) Effects of different tax rates applicable to different jurisdictions (Note (b)) Tax effect of non-taxable income Adjustments of prior years Tax effect of non-deductible expenses Tax effect of preferential tax rate (Note (a)) Tax losses and temporary differences not recognized Reversal of previously recognized tax losses and temporary differences Utilization of previously unrecognized tax losses and temporary differences Recognition of tax losses and temporary differences not recognized in prior years Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 13,607,261 10,486,505 3,401,815 2,621,626 (217,848) (211,891) (135,435) (109,495) (8,410) (32,451) 528,443 296,602 (408,664) (364,417) 790,710 879,651 260,565 30,752 (385,547) (378,149) (437,213) (157,332) 3,388,416 2,574,896	Year ended December 31, 2024 2023 RMB’000 RMB’000 13,607,261 10,486,505 3,401,815 2,621,626 (217,848) (211,891) (135,435) (109,495) (8,410) (32,451) 528,443 296,602 (408,664) (364,417) 790,710 879,651 260,565 30,752 (385,547) (378,149) (437,213) (157,332) 3,388,416 2,574,896
		2,621,626 (211,891) (109,495) (32,451) 296,602 (364,417) 879,651 30,752 (378,149) (157,332)
		2,574,896

(a) PRC corporate income tax (“PRC CIT”)

The income tax rate applicable to the principal subsidiaries in Mainland China is 25%, except for certain subsidiaries which enjoy a preferential income tax rate.

For qualified small and micro-sized enterprises, the annual taxable income up to RMB3,000,000 (inclusive) is subject to an effective CIT rate of 5% from January 1, 2023 to December 31, 2027.

(b) Corporate income tax in Hong Kong and other jurisdictions

(i) Hong Kong profits tax

Hong Kong profits tax has been provided for at the rate of 8.25% on assessable profits up to HKD2,000,000 and 16.5% on any assessable profits over HKD2,000,000 for the years ended December 31, 2024 and 2023.

(ii) Corporate income tax in other jurisdictions

– II-184 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) OECD Pillar Two model rules

The Group is within the scope of the Pillar Two model rules released by the Organization for Economic Co-operation and Development (“ OECD ”). The Pillar Two legislation had become effective in certain jurisdictions on January 1, 2024. The Group applies the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12. Under the Pillar Two legislation, the Group is liable to pay a top-up tax for difference between its Global Anti-Base Erosion (“ GloBE ”) effective tax rate in each jurisdiction and the 15% minimum rate. The Group management’s assessment indicates that the quantitative impact of the Pillar Two legislation is insignificant to the Group.

12. DIVIDENDS

Dividends declared and paid to the equity shareholders of the Company for the years ended December 31, 2024 and 2023 are as follows:

Interim dividend paid of RMB40 cents per ordinary share Special dividend paid of RMB100 cents per ordinary share Final dividend paid of RMB60 cents per ordinary share	Year ended December 31, 2024 2023 RMB’000 RMB’000 1,918,166 – 4,795,416 – 6,713,582 – 2,889,210 1,213,616 9,602,792 1,213,616	Year ended December 31, 2024 2023 RMB’000 RMB’000 1,918,166 – 4,795,416 – 6,713,582 – 2,889,210 1,213,616 9,602,792 1,213,616
		–

		1,213,616
		1,213,616

(a) Interim dividend and special dividend

An interim dividend for the six months ended June 30, 2024 of RMB40 cents per ordinary share (tax inclusive) and a special dividend of RMB1 per ordinary share (tax inclusive) were approved by the shareholders at the first extraordinary general meeting on October 29, 2024. The total amount of the special dividend was RMB6,713,582,000.

(b) Final dividend for the year ended December 31, 2023 and 2022

On April 30, 2024, the Company convened its annual shareholders’ meeting to implement the profit distribution plan for the year ended December 31, 2023. The Company declared a cash dividend of RMB60 cents per share (tax included) (for the year ended December 31, 2022: RMB25 cents per share). The total amount of the cash dividend was RMB2,889,210,000 (for the year ended December 31, 2022: RMB1,213,616,000).

(c) Proposed final dividend for the year ended December 31, 2024

The Board resolved to propose to the Shareholders in the forthcoming annual general meeting for the distribution of a final dividend of RMB44 cents per share for the year ended December 31, 2024. The proposal for the distribution of the final dividend above is subject to the consideration and approval of the Shareholders at the forthcoming annual general meeting. These financial statements do not reflect this dividend payable.

– II-185 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

13. EARNINGS PER SHARE

(a) Basic

Basic earnings per share (“ EPS ”) is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the year.

	Year ended	December 31,
	2024	2023
Profit attributable to owners of the Company (RMB’000)	10,170,427	8,234,493
Weighted average number of shares in issue (in thousands)	4,828,432	4,850,498
Basic EPS (RMB per share)	2.11	1.70

(b) Diluted

The share options granted by the Company have potential dilutive effect on the EPS. Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding by the assumption of the conversion of all potential dilutive ordinary shares arising from share options. For the year ended December 31, 2024, the share options granted by the Company had anti-dilutive effect on the EPS.

Profit attributable to owners of the Company (RMB’000) Profit attributable to owners of the Company for the calculation of Diluted EPS (RMB’000) Weighted average number of shares in issue (in thousands) Adjustment for share options (in thousands) Weighted average number of shares for the calculation of Diluted EPS (in thousands) Diluted EPS (RMB per share)	Year ended December 31, 2024 2023 10,170,427 8,234,493 10,170,427 8,234,493 4,828,432 4,850,498 – 4,484 4,828,432 4,854,982 2.11 1.70	Year ended December 31, 2024 2023 10,170,427 8,234,493 10,170,427 8,234,493 4,828,432 4,850,498 – 4,484 4,828,432 4,854,982 2.11 1.70
		8,234,493

		4,850,498 4,484
		4,854,982

		1.70

– II-186 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

14. PROPERTY, PLANT AND EQUIPMENT

Cost As at January 1, 2024 Additions_(Note (c)) Business combinations Disposals Disposal of subsidiaries Transfer/reclassification Currency translation differences As at December 31, 2024 Accumulated depreciation As at January 1, 2024 Charge for the year (Note (b)) Business combinations Disposals Disposal of subsidiaries Transfer/reclassification Currency translation differences As at December 31, 2024 Accumulated impairment As at January 1, 2024 Charge for the year Disposal of subsidiaries Currency translation differences As at December 31, 2024 Net book value As at December 31, 2024 (Note (a))_	Freehold land and buildings RMB’000 29,185,339 977,191 – (4,778) (309,843) 1,497,561 136,690 31,482,160 2,918,323 858,634 – (105) (8,731) (114,207) 11,861 3,665,775 – – – – – 27,816,385	Aircraft, aircraft engines, rotables and high-value maintenance RMB’000 15,497,033 352,831 – (144,515) – 1,878,760 – 17,584,109 6,643,870 1,438,240 – (117,181) – – – 7,964,929 – – – – – 9,619,180	Machinery and equipment RMB’000 14,999,446 348,685 6 (394,096) – 1,347,203 57,768 16,359,012 4,363,601 1,670,007 6 (185,311) – – 31,284 5,879,587 1,633 43,195 – (256) 44,572 10,434,853	Transportation vehicles RMB’000 7,434,951 704,644 3,938 (1,119,751) – 128 33,106 7,057,016 4,806,341 1,117,240 2,633 (1,030,581) – – 17,601 4,913,234 – 40,393 – 123 40,516 2,103,266	Computers and electronic equipment RMB’000 5,126,023 346,954 4,068 (342,241) – 100,411 (115) 5,235,100 3,779,913 621,275 3,008 (312,993) – – (2,057) 4,089,146 – 8,245 – (330) 7,915 1,138,039	Office and other equipment RMB’000 10,839,453 214,167 2,109 (728,592) – 40,340 6,516 10,373,993 6,638,702 1,314,585 1,499 (521,867) – – (6,513) 7,426,406 8 1,276 – (75) 1,209 2,946,378	Leasehold improvements RMB’000 7,335,820 196,240 – (159,304) (42,518) 939,456 (43,556) 8,226,138 5,194,142 1,066,798 – (126,129) (20,767) 153 (18,688) 6,095,509 – 127 – – 127 2,130,502	Construction in progress RMB’000 4,050,208 5,989,057 – (30,454) (18,209) (7,004,900) – 2,985,702 – – – – – – – – 17,324 885 (18,209) – – 2,985,702	Total RMB’000 94,468,273 9,129,769 10,121 (2,923,731) (370,570) (1,201,041) 190,409
									99,303,230
									34,344,892 8,086,779 7,146 (2,294,167) (29,498) (114,054) 33,488
									40,034,586
									18,965 94,121 (18,209) (538)
									94,339
									59,174,305

– II-187 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Cost As at January 1, 2023 Additions_(Note (c)) Business combinations Disposals Disposal of subsidiaries Transfer/reclassification Currency translation differences As at December 31, 2023 Accumulated depreciation As at January 1, 2023 Charge for the year(Note (b)) Business combinations Disposals Disposal of subsidiaries Transfer/reclassification Currency translation differences As at December 31, 2023 Accumulated impairment As at January 1, 2023 Charge for the year Disposals As at December 31, 2023 Net book value As at December 31, 2023 (Note (a))_	Freehold land and buildings RMB’000 20,737,655 1,272,496 84,384 (22,595) (44,337) 7,096,850 60,886 29,185,339 2,208,458 695,828 17,726 (12,780) (6,677) 23,923 (8,155) 2,918,323 – – – – 26,267,016	Aircraft, aircraft engines, rotables and high-value maintenance RMB’000 13,343,778 343,764 – (385,452) – 2,194,943 – 15,497,033 5,577,042 1,361,913 – (295,085) – – – 6,643,870 – – – – 8,853,163	Machinery and equipment RMB’000 11,050,506 346,663 15,557 (304,089) (18,218) 3,838,146 70,881 14,999,446 3,210,478 1,253,916 10,726 (145,085) (4,888) – 38,454 4,363,601 1,633 – – 1,633 10,634,212	Transportation vehicles RMB’000 7,360,813 1,189,776 3,884 (1,144,248) (2,652) 399 26,979 7,434,951 4,843,978 1,011,297 3,479 (1,061,855) (2,046) – 11,488 4,806,341 – – – – 2,628,610	Computers and electronic equipment RMB’000 5,145,818 425,863 2,924 (588,257) (8,462) 134,166 13,971 5,126,023 3,595,671 725,963 2,749 (549,407) (6,592) – 11,529 3,779,913 – – – – 1,346,110	Office and other equipment RMB’000 10,964,878 381,899 5,204 (530,076) (39,382) 69,534 (12,604) 10,839,453 5,480,050 1,588,891 4,380 (415,938) (11,066) – (7,615) 6,638,702 28,734 – (28,726) 8 4,200,743	Leasehold improvements RMB’000 6,415,027 135,955 – (114,085) (49,432) 938,141 10,214 7,335,820 4,318,624 974,378 – (66,885) (36,657) – 4,682 5,194,142 – – – – 2,141,678	Construction in progress RMB’000 11,151,005 8,109,500 – (94,900) – (15,115,397) – 4,050,208 – – – – – – – – 1,145 17,443 (1,264) 17,324 4,032,884	Total RMB’000 86,169,480 12,205,916 111,953 (3,183,702) (162,483) (843,218) 170,327
									94,468,273
									29,234,301 7,612,186 39,060 (2,547,035) (67,926) 23,923 50,383
									34,344,892
									31,512 17,443 (29,990)
									18,965
									60,104,416

Notes:

(a) Certain property, plant and equipment with a net carrying amount of approximately RMB490,886,000 as at December 31, 2024 (2023: RMB809,139,000), were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).
(b) Depreciation amounting to approximately RMB8,083,172,000 had been recognized in consolidated statement of profit or loss for the year ended December 31, 2024 (2023: RMB7,586,164,000).
(c) The additions of buildings for the years ended December 31, 2024 and 2023 mainly included the acquisition of assets through acquisition of subsidiaries (Note 35(b)).

– II-188 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

15. LEASE

This note provides information for leases where the Group is a lessee.

(a) Amounts recognized in the consolidated statement of financial position

Right-of-use assets Buildings Leasehold land and land use rights Motor vehicles Equipment and others Total Lease liabilities Current Non-current Total	As at December 31, 2024 2023 RMB’000 RMB’000 12,730,196 13,692,555 6,783,528 6,816,476 81,877 333,921 30,028 47,095 19,625,629 20,890,047 5,501,314 5,769,965 7,094,483 8,038,495 12,595,797 13,808,460	As at December 31, 2024 2023 RMB’000 RMB’000 12,730,196 13,692,555 6,783,528 6,816,476 81,877 333,921 30,028 47,095 19,625,629 20,890,047 5,501,314 5,769,965 7,094,483 8,038,495 12,595,797 13,808,460
		20,890,047

		5,769,965 8,038,495
		13,808,460

Additions to the right-of-use assets for the year ended December 31, 2024 were approximately RMB6,984,602,000 (2023: RMB6,804,625,000).

Leasehold land and land use rights with a net carrying amount of approximately RMB203,922,000 as at December 31, 2024 (2023: RMB292,495,000) were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).

(b) Amounts recognized in the consolidated statement of profit or loss

The consolidated statement of profit or loss shows the following amounts relating to leases:

Depreciation charge of right-of-use assets Buildings Leasehold land and land use rights Motor vehicles Equipment and others Total Interest expenses (Note 10) Expense relating to short-term leases and low-value assets (included in costs and expenses) Total cash outflow for leases (included in operating and financing cash outflow)	Year ended December 31, 2024 2023 RMB’000 RMB’000 6,442,034 6,874,516 200,618 191,595 136,327 126,643 19,804 20,309 6,798,783 7,213,063 503,871 564,374 4,041,341 3,601,571 11,722,206 11,582,911	Year ended December 31, 2024 2023 RMB’000 RMB’000 6,442,034 6,874,516 200,618 191,595 136,327 126,643 19,804 20,309 6,798,783 7,213,063 503,871 564,374 4,041,341 3,601,571 11,722,206 11,582,911
		7,213,063

		564,374 3,601,571 11,582,911

– II-189 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The Group has various lease contracts that have not yet commenced as at December 31, 2024 and 2023. The future lease payments for these non-cancellable lease contracts are as below:

Within 1 year (including 1 year) Between 1 and 2 years (including 2 years) Between 2 and 3 years (including 3 years) Over 3 years Total 16. INVESTMENT PROPERTIES	As at December 31, 2024 2023 RMB’000 RMB’000 893,228 1,344,393 529,230 458,299 489,211 560,409 2,733,760 2,834,483 4,645,429 5,197,584	As at December 31, 2024 2023 RMB’000 RMB’000 893,228 1,344,393 529,230 458,299 489,211 560,409 2,733,760 2,834,483 4,645,429 5,197,584
		5,197,584

Cost At the beginning of the year Additions Disposal of subsidiaries Transfer/reclassification Exchange adjustment At the end of the year Accumulated depreciation At the beginning of the year Charge for the year Disposal of subsidiaries Transfer/reclassification Exchange adjustment At the end of the year Net book value At the end of the year *(Note (a))*	As at December 31, 2024 2023 RMB’000 RMB’000 6,742,097 5,088,473 25,067 709,420 (202,598) (1,548) 1,326,722 944,698 (37,711) 1,054 7,853,577 6,742,097 323,377 213,107 164,614 125,712 (10,802) (45) 128,572 (16,471) 6,617 1,074 612,378 323,377 7,241,199 6,418,720	As at December 31, 2024 2023 RMB’000 RMB’000 6,742,097 5,088,473 25,067 709,420 (202,598) (1,548) 1,326,722 944,698 (37,711) 1,054 7,853,577 6,742,097 323,377 213,107 164,614 125,712 (10,802) (45) 128,572 (16,471) 6,617 1,074 612,378 323,377 7,241,199 6,418,720
		6,742,097
		213,107 125,712 (45) (16,471) 1,074
		323,377
		6,418,720

Notes:

(a) Certain investment properties with a net carrying amount of approximately RMB111,847,000 as at December 31, 2024 (2023: RMB111,124,000) were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).

– II-190 –

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(b) Valuation processes of the Group: The fair values of the investment properties were estimated by management or independent professional property valuers as at December 31, 2024 and 2023. The valuations are derived using direct comparison method or income capitalization method. Direct comparison method is based on comparing the property to be valued directly with other comparable properties, which have recently been transacted. Income capitalization method is based on the capitalization of the net rental income derived from the existing leases and/or achievable in existing market with reversionary income potential by adopting appropriate capitalization rates. Capitalization is estimated by valuer based on the risk profile of the properties being valued.

The fair values of the investment properties were set out as follows:

					As at December	31,
					2024	2023
					RMB’000	RMB’000
Investment	properties	at	fair	value	8,639,880	7,937,199

(c) Leasing arrangements

Land and buildings: Within 1 year (including 1 year) Between 1 and 2 years (including 2 years) Between 2 and 3 years (including 3 years) Between 3 and 4 years (including 4 years) Between 4 and 5 years (including 5 years) Over 5 years Total	As at December 31, 2024 2023 RMB’000 RMB’000 418,210 371,269 314,925 240,171 223,282 146,234 148,307 90,435 113,522 56,615 262,618 206,636 1,480,864 1,111,360	As at December 31, 2024 2023 RMB’000 RMB’000 418,210 371,269 314,925 240,171 223,282 146,234 148,307 90,435 113,522 56,615 262,618 206,636 1,480,864 1,111,360
		1,111,360

– II-191 –

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17. INTANGIBLE ASSETS

Cost As at January 1, 2024 Additions Business combinations Disposals Disposal of subsidiaries Transfer/reclassification Currency translation differences As at December 31, 2024 Accumulated amortization As at January 1, 2024 Charge for the year Business combinations Disposals Disposal of subsidiaries Currency translation differences As at December 31, 2024 Impairment As at January 1, 2024 Charge for the year Disposals As at December 31, 2024 Net book value As at December 31, 2024	Development expenditures RMB’000 129,845 560,106 – (25,733) – (581,729) – 82,489 – – – – – – – – – – – 82,489	Goodwill RMB’000 9,572,871 135,524 – – – – 298,405 10,006,800 – – – – – – – 2,435 – – 2,435 10,004,365	Customer relationships RMB’000 5,952,090 – 38,576 – – – 171,815 6,162,481 1,150,340 339,566 – – – 28,122 1,518,028 – 15,403 – 15,403 4,629,050	Software RMB’000 8,134,147 46,143 1,464 (188,126) (38) 581,729 15,870 8,591,189 5,778,057 1,494,804 1,076 (143,063) (38) 13,522 7,144,358 97,428 12,632 (24,226) 85,834 1,360,997	Trademarks RMB’000 4,966,033 – – (4,627) – – 191,487 5,152,893 842,331 417,402 – (627) – 59,123 1,318,229 4 – (4) – 3,834,664	Others RMB’000 358,340 1,145 4,781 (2,564) – – 2,021 363,723 211,727 26,876 – (987) – 1,473 239,089 6 – – 6 124,628	Total RMB’000 29,113,326 742,918 44,821 (221,050) (38) – 679,598
							30,359,575
							7,982,455 2,278,648 1,076 (144,677) (38) 102,240
							10,219,704
							99,873 28,035 (24,230)
							103,678
							20,036,193

– II-192 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Cost As at January 1, 2023 Additions Business combinations Disposals Disposal of subsidiaries Transfer/reclassification Currency translation differences As at December 31, 2023 Accumulated amortization As at January 1, 2023 Charge for the year Business combinations Disposals Disposal of subsidiaries Currency translation differences As at December 31, 2023 Impairment As at January 1, 2023 Charge for the year Disposals As at December 31, 2023 Net book value As at December 31, 2023	Development expenditures RMB’000 311,757 1,077,980 – (7,525) – (1,252,367) – 129,845 – – – – – – – – – – – 129,845	Goodwill RMB’000 9,348,179 – 85,219 – (10,618) – 150,091 9,572,871 – – – – – – – 2,435 – – 2,435 9,570,436	Customer relationships RMB’000 5,855,067 – – – – – 97,023 5,952,090 793,438 335,626 – – – 21,276 1,150,340 – – – – 4,801,750	Software RMB’000 7,182,341 99,543 14 (210,858) (193,930) 1,252,367 4,670 8,134,147 4,214,372 1,780,594 8 (144,377) (75,249) 2,709 5,778,057 64,595 38,853 (6,020) 97,428 2,258,662	Trademarks RMB’000 4,887,350 797 11 (92) – – 77,967 4,966,033 584,365 247,462 – (22) – 10,526 842,331 4 – – 4 4,123,698	Others RMB’000 337,155 20,943 – (2,284) – – 2,526 358,340 178,022 32,068 – (567) – 2,204 211,727 6 – – 6 146,607	Total RMB’000 27,921,849 1,199,263 85,244 (220,759) (204,548) – 332,277
							29,113,326
							5,770,197 2,395,750 8 (144,966) (75,249) 36,715
							7,982,455
							67,040 38,853 (6,020)
							99,873
							21,030,998

(a) Recognition of goodwill

The carrying amount of goodwill allocated to Cash-Generating Units or the groups of Cash-Generating Units (“ CGUs ”):

KLN CGUs Fenghao Supply Chain CGUs KEX CGUs SXH CGUs (Note (d)) Others Total	As at December 31, 2024 2023 RMB’000 RMB’000 6,138,923 5,889,255 3,184,723 3,082,119 64,508 – 380,138 367,896 236,073 231,166 10,004,365 9,570,436	As at December 31, 2024 2023 RMB’000 RMB’000 6,138,923 5,889,255 3,184,723 3,082,119 64,508 – 380,138 367,896 236,073 231,166 10,004,365 9,570,436
		9,570,436

– II-193 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As stated in Note 2.1(e), goodwill would be tested for impairment annually. If the carrying amount exceeds its estimated recoverable amount, which is the higher of value in use and fair value less costs of disposal, the difference of which would be recognized in profit and loss immediately.

The Group acquired KLN in 2021. KLN acquired Topocean and Pro-Med in 2022 and other subsidiaries in 2023. During the year ended December 31, 2024, the balance of goodwill increased mainly due to the acquisition of 100% shares of Business By Air SAS (“ BBA ”). The management was of the view that the synergies among the operations of KLN, Topocean, Pro-Med, BBA and other subsidiaries acquired by KLN had gradually formed upon the completion of the above mentioned acquisitions. As a result, the Group regarded KLN, Topocean, Pro-Med, BBA and other subsidiaries acquired by KLN as one CGUs.

During the year ended December 31, 2024, KLN distributed a special interim dividend by way of a distribution in specie of 907,200,000 shares of KEX indirectly held by KLN (representing approximately 52.1% of all issued KEX shares). After the distribution, the Group received an aggregate of 467,373,855 KEX shares, representing approximately 26.8% of all issued KEX shares, triggering a mandatory tender offer to acquire all KEX shares in accordance with the requirements of the Thai Code (Securities and Exchange Act B.E. 2535 (1992) (as amended), Notification of Capital Market Supervisory Board Tor Jor. 12/2554 Re: Rules, Conditions and Procedures for the Acquisition of Securities for Business Takeover (as amended), and any other relevant rules, regulations, and notifications issued thereunder). The Group made a tender offer to acquire KEX shares with an offer price of THB5.50 per share. On March 26, 2024 (“ the date of reorganization ”), the abovementioned interim dividend distribution and tender offer were completed, and the Group acquired in aggregate 1,091,818,327 KEX shares, representing 62.7% of all issued KEX shares.

Upon completion of the above transactions, since KEX was no longer directly held and managed by KLN, the Group reclassified the KLN CGUs into two separate CGUs, KEX CGUs and KLN CGUs (excluding KEX CGUs). The goodwill arising from the acquisition of KLN in 2021 was reallocated by the Group on the basis of the relative values of the operation of KLN CGUs and KEX CGUs as at the date of the reorganization, through which goodwill of approximately RMB62,430,000 was reallocated to KEX CGUs.

(b) Impairment tests

The following table sets out the key assumptions used for value in use calculations of KLN CGUs and Fenghao Supply Chain CGUs:

	Year ended	December 31,
	2024	2023
Revenue growth rate over the forecast period	2.00%~15.30%	2.50%~16.64%
Terminal revenue growth rate	2.00%	2.00%~2.50%
Margin of earnings before interests and tax	0.03%~5.75%	-0.20%~6.60%
Pre-tax discount rate	10.55%~13.40%	11.90%~14.00%

Various factors were taken into consideration when determine the appropriate terminal revenue growth rate used over the forecast period, including the long-term inflation rates of mainland China, Hong Kong and US, etc. This growth rate does not exceed the long-term average growth rate for the market in which the relative business operates.

Management determined budgeted margin of earnings before interests and tax and revenue growth rates based on historical performance and its expectations of the market development.

The pre-tax discount rates reflected the current market assessment of the time value of money and the risks specific to the business.

– II-194 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Impact of possible changes in key assumptions

The recoverable amount of KLN CGUs is estimated to exceed its carrying amount at December 31, 2024 by approximately RMB1,012 million (2023: RMB1,375 million).

The recoverable amount of Fenghao Supply Chain CGUs is estimated to exceed its carrying amount at December 31, 2024 by approximately RMB443 million (2023: RMB411 million).

The recoverable amount of each CGUs would equal to its carrying amount if each key assumption was to change as follows with all other variables held constant:

KLN CGUs	As at December 31,	As at December 31,
	2024	2023
Revenue growth rate over the forecast period	5.54%~8.54%	8.98%~12.05%
Terminal revenue growth rate	1.66%	1.50%
Margin of earnings before interests and tax	4.50%~5.44%	4.76%~5.41%
Pre-tax discount rate	13.76%	14.48%
Fenghao Supply Chain CGUs	As at December 31,
	2024	2023
Revenue growth rate over the forecast period	1.42%~14.82%	2.02%~16.19%
Terminal revenue growth rate	1.43%	1.89%
Margin of earnings before interests and tax	-0.54%~5.18%	-0.55%~6.25%
Pre-tax discount rate	11.09%	12.41%

(d) Rebranding of SXH

On July 31, 2018 (the “ acquisition date ”), the Group completed the acquisition of HAVI Logistics Services (Hong Kong) Ltd., and its subsidiaries and recognized goodwill of approximately RMB351,075,000. This goodwill was allocated to HAVI Supply Chain CGUs on the acquisition date. In June 2024, HAVI was rebranded as SXH. The allocation of goodwill to the CGUs remained unchanged after the renaming.

18. DEFERRED TAX

Deferred tax assets and liabilities are offset when there is a legally enforceable right of offsetting and when the deferred income taxes relate to the same authority.

– II-195 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The net amounts of deferred tax assets and liabilities after offsetting are as follows:

Deferred tax assets Offsetting Net deferred tax assets Deferred tax liabilities Offsetting Net deferred tax liabilities	As at December 31, 2024 2023 RMB’000 RMB’000 5,251,652 5,599,191 (2,959,658) (3,335,321) 2,291,994 2,263,870 7,374,143 7,886,295 (2,959,658) (3,335,321) 4,414,485 4,550,974	As at December 31, 2024 2023 RMB’000 RMB’000 5,251,652 5,599,191 (2,959,658) (3,335,321) 2,291,994 2,263,870 7,374,143 7,886,295 (2,959,658) (3,335,321) 4,414,485 4,550,974
		2,263,870

		7,886,295
		(3,335,321) 4,550,974

(a) Deferred tax assets

The movements in deferred tax assets before offsetting for the years ended December 31, 2024 and 2023 are as follows:

As at January 1, 2024 Acquisition and disposal of subsidiaries, net Credited/(charged) to consolidated statement of profit or loss Charged to consolidated statement of other comprehensive income Currency translation differences As at December 31, 2024 As at January 1, 2023 Acquisition and disposal of subsidiaries, net Credited/(charged) to consolidated statement of profit or loss Charged to consolidated statement of other comprehensive income Currency translation differences As at December 31, 2023	Amortization and depreciation RMB’000 849,888 (8,027) 255,044 – (55,073) 1,041,832 502,343 – 293,712 – 53,833 849,888	Tax losses RMB’000 900,683 – (20,891) – (15,386) 864,406 699,863 (3,156) 197,626 – 6,350 900,683	Accrued expenses RMB’000 480,077 – (182,972) – 5,390 302,495 551,443 (276) (72,605) – 1,515 480,077	Lease liabilities RMB’000 2,998,695 – (335,196) – (22,866) 2,640,633 3,187,174 – (188,653) – 174 2,998,695	Loss allowances for financial assets and non-current assets RMB’000 174,813 – 67,096 – 2,507 244,416 167,412 (24) 7,579 – (154) 174,813	Unrealised profits from internal transactions RMB’000 112,374 – (28,151) – – 84,223 144,881 – (32,507) – – 112,374	Others RMB’000 82,661 – (9,014) – – 73,647 70,426 – 15,745 (1,839) (1,671) 82,661	Total RMB’000 5,599,191 (8,027) (254,084) – (85,428)
								5,251,652

								5,323,542 (3,456) 220,897 (1,839) 60,047
								5,599,191

– II-196 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Deferred tax liabilities

The movements in deferred tax liabilities before offsetting for the years ended December 31, 2024 and 2023 are as follows:

At January 1, 2024 Acquisition and disposal of subsidiaries, net (Credited)/charged to consolidated statement of profit or loss Charged to consolidated statement of other comprehensive income Currency translation differences At December 31, 2024 At January 1, 2023 Acquisition and disposal of subsidiaries, net (Credited)/charged to consolidated statement of profit or loss Charged to consolidated statement of other comprehensive income Currency translation differences At December 31, 2023	Appreciation of assets acquired in business combinations RMB’000 2,971,543 14,578 (207,921) – 72,290 2,850,490 3,137,944 7,090 (213,057) – 39,566 2,971,543	Accelerated tax depreciation RMB’000 1,606,602 – (39,063) – (51,944) 1,515,595 1,691,289 (286) (113,859) – 29,458 1,606,602	Changes in fair value RMB’000 359,178 – (11,045) (3,899) 8,803 353,037 356,247 – 2,578 353 – 359,178	Right-of-use assets RMB’000 2,830,561 – (314,282) – (20,573) 2,495,706 3,052,235 – (222,122) – 448 2,830,561	Others RMB’000 118,411 – 66,516 – (25,612) 159,315 110,817 – 1,657 – 5,937 118,411	Total RMB’000 7,886,295 14,578 (505,795) (3,899) (17,036)
						7,374,143

						8,348,532 6,804 (544,803) 353 75,409
						7,886,295

(c) Deferred tax assets not recognized

Tax losses Deductible temporary differences Total	As at December 31, 2024 2023 RMB’000 RMB’000 18,994,127 18,873,618 1,334,659 1,113,144 20,328,786 19,986,762	As at December 31, 2024 2023 RMB’000 RMB’000 18,994,127 18,873,618 1,334,659 1,113,144 20,328,786 19,986,762
		19,986,762

– II-197 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The maturity distribution of deductible losses on the Group’s unrecognized deferred tax assets is as follows:

2024 2025 2026 2027 2028 2029 and above Total	As at December 31, 2024 2023 RMB’000 RMB’000 – 1,270,206 2,451,413 3,954,921 3,192,356 4,468,234 2,855,219 3,254,460 4,421,109 2,146,335 6,074,030 3,779,462 18,994,127 18,873,618	As at December 31, 2024 2023 RMB’000 RMB’000 – 1,270,206 2,451,413 3,954,921 3,192,356 4,468,234 2,855,219 3,254,460 4,421,109 2,146,335 6,074,030 3,779,462 18,994,127 18,873,618
		18,873,618

19. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS

Non-current: Amounts due from related parties (Note 38(d)) Deferred pilot recruitment costs Prepayments (Note (a)) Loans to employees Finance lease receivables Others Less: Allowance for expected credit losses (Note (c)) Total Current: Amounts due from related parties (Note 38(d)) Value-added tax recoverable Prepayments (Note (b)) Prepayments for listing expenses Deposits Cash to collect on behalf of customers Loans to employees Prepaid corporate income tax Finance lease receivables Others Less: Allowance for expected credit losses (Note (c)) Total	As at December 31, 2024 2023 RMB’000 RMB’000 1,181 1,363 740,683 805,415 576,948 944,833 – 15,575 38,224 89,380 520,580 492,174 1,877,616 2,348,740 (22,581) (15,178) 1,855,035 2,333,562 306,027 1,032,722 3,366,151 4,641,173 2,827,788 3,248,665 – 25,068 1,536,726 1,523,589 768,814 659,441 16,047 26,454 384,920 551,327 88,800 226,652 1,154,081 1,043,853 10,449,354 12,978,944 (334,811) (356,238) 10,114,543 12,622,706	As at December 31, 2024 2023 RMB’000 RMB’000 1,181 1,363 740,683 805,415 576,948 944,833 – 15,575 38,224 89,380 520,580 492,174 1,877,616 2,348,740 (22,581) (15,178) 1,855,035 2,333,562 306,027 1,032,722 3,366,151 4,641,173 2,827,788 3,248,665 – 25,068 1,536,726 1,523,589 768,814 659,441 16,047 26,454 384,920 551,327 88,800 226,652 1,154,081 1,043,853 10,449,354 12,978,944 (334,811) (356,238) 10,114,543 12,622,706
		(15,178)
		2,333,562

		1,032,722 4,641,173 3,248,665 25,068 1,523,589 659,441 26,454 551,327 226,652 1,043,853 12,978,944
		(356,238)
		12,622,706

– II-198 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(a) The balances of the Group mainly comprise prepaid construction equipment balances during the years ended December 31, 2024 and 2023.
(b) The balances of the Group mainly comprise prepaid freight and transportation costs during the year ended December 31, 2024 and 2023.
(c) Movements on the Group’s allowance for expected credit losses of other receivables are as follows:

At the beginning of the year Allowance for impairment Written off as uncollectible Exchange adjustment At the end of the year	As at December 31, 2024 2023 RMB’000 RMB’000 371,416 419,002 30,403 8,446 (44,971) (57,009) 544 977 357,392 371,416	As at December 31, 2024 2023 RMB’000 RMB’000 371,416 419,002 30,403 8,446 (44,971) (57,009) 544 977 357,392 371,416
		8,446 (57,009) 977
		371,416

20. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

Movement of investments in associates is analyzed as follows:

At the beginning of the year Additions and disposals, net Share of profit, net Share of other comprehensive loss Share of other equity movement Dividend declared during the year Exchange differences Less: Impairment loss provided for the year At the end of the year	Year ended December 31, 2024 2023 RMB’000 RMB’000 4,120,128 4,209,624 (355,353) 100,574 49,210 78,524 (1,077) (5,583) 3,011 13,902 (176,711) (188,104) 43,550 34,484 (71,908) (123,293) 3,610,850 4,120,128	Year ended December 31, 2024 2023 RMB’000 RMB’000 4,120,128 4,209,624 (355,353) 100,574 49,210 78,524 (1,077) (5,583) 3,011 13,902 (176,711) (188,104) 43,550 34,484 (71,908) (123,293) 3,610,850 4,120,128
		100,574 78,524 (5,583) 13,902 (188,104) 34,484 (123,293)
		4,120,128

– II-199 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Movement of investments in joint ventures is analyzed as follows:

At the beginning of the year Additions and disposals, net Share of loss, net Share of other equity movement Dividend declared during the year Exchange differences Less: Impairment loss provided for the year At the end of the year	Year ended December 31, 2024 2023 RMB’000 RMB’000 3,258,703 3,648,376 (424,159) (245,348) (119,230) (145,714) (5) 40 (7,468) (892) 839 2,855 (115,888) (614) 2,592,792 3,258,703	Year ended December 31, 2024 2023 RMB’000 RMB’000 3,258,703 3,648,376 (424,159) (245,348) (119,230) (145,714) (5) 40 (7,468) (892) 839 2,855 (115,888) (614) 2,592,792 3,258,703
		(245,348) (145,714) 40 (892) 2,855 (614)
		3,258,703

The Group’s share of results of its associates and joint ventures are as follows:

Aggregate attributable amounts of net loss Aggregate attributable amounts of other comprehensive income Aggregate attributable amounts of total comprehensive income	Year ended December 31, 2024 2023 RMB’000 RMB’000 (257,816) (191,097) (1,077) (5,583) (258,893) (196,680)	Year ended December 31, 2024 2023 RMB’000 RMB’000 (257,816) (191,097) (1,077) (5,583) (258,893) (196,680)
		(196,680)

There is no associate and joint venture that is individually significant to the Group.

21. FINANCIAL ASSETS AT FVPL AND FVOCI

(a) Financial assets at FVPL

Non-current: – Industry fund investments – Equity investment in unlisted entities, at fair value – Others Total Current: – Structured deposits – Fund investment and others Total	As at December 31, 2024 2023 RMB’000 RMB’000 331,815 499,320 139,261 84,401 6,340 6,275 477,416 589,996 11,015,904 6,542,881 230,252 266,861 11,246,156 6,809,742	As at December 31, 2024 2023 RMB’000 RMB’000 331,815 499,320 139,261 84,401 6,340 6,275 477,416 589,996 11,015,904 6,542,881 230,252 266,861 11,246,156 6,809,742
		589,996
		6,542,881 266,861
		6,809,742

– II-200 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Financial assets at FVOCI

Non-current: – Listed equity investments, at fair value – Unlisted equity investments, at fair value Total Current: – Notes held for sale Total 22. INVENTORIES Raw materials Finished goods Aviation consumables Consumables and supplies Cost of fulfilling contracts Less: Provision for impairment loss Total 23. CONTRACT ASSETS Contract assets Less: Allowance for expected credit losses Total	As at December 31, 2024 2023 RMB’000 RMB’000 1,033,218 2,418,842 7,198,776 7,070,693 8,231,994 9,489,535 170,913 99,978 170,913 99,978 As at December 31, 2024 2023 RMB’000 RMB’000 623,005 472,994 828,075 1,040,816 631,450 499,062 265,661 365,165 86,577 65,170 2,434,768 2,443,207 (2,385) (2,782) 2,432,383 2,440,425 As at December 31, 2024 2023 RMB’000 RMB’000 2,745,809 1,636,144 (4,989) (3,552) 2,740,820 1,632,592	As at December 31, 2024 2023 RMB’000 RMB’000 1,033,218 2,418,842 7,198,776 7,070,693 8,231,994 9,489,535 170,913 99,978 170,913 99,978 As at December 31, 2024 2023 RMB’000 RMB’000 623,005 472,994 828,075 1,040,816 631,450 499,062 265,661 365,165 86,577 65,170 2,434,768 2,443,207 (2,385) (2,782) 2,432,383 2,440,425 As at December 31, 2024 2023 RMB’000 RMB’000 2,745,809 1,636,144 (4,989) (3,552) 2,740,820 1,632,592
		1,632,592

As discussed in Note 2.1(g), the Group applies simplified approach under IFRS 9 to measure the expected credit loss, which uses a lifetime expected loss allowance, for contract assets.

Allowance of approximately RMB1,437,000 had been provided for years ended December 31, 2024 (2023: RMB152,000).

– II-201 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

24. TRADE AND NOTE RECEIVABLES

Trade and note receivables – related parties (Note 38(d)) – third parties Less: Allowance for expected credit losses Total	As at December 31, 2024 2023 RMB’000 RMB’000 540,956 124,211 28,554,708 26,614,887 29,095,664 26,739,098 (1,114,031) (1,378,665) 27,981,633 25,360,433	As at December 31, 2024 2023 RMB’000 RMB’000 540,956 124,211 28,554,708 26,614,887 29,095,664 26,739,098 (1,114,031) (1,378,665) 27,981,633 25,360,433
		26,739,098
		(1,378,665)
		25,360,433

(a) The Group has various credit policies for different business operations depending on the requirements of the markets and businesses. The ageing analysis of the trade and note receivables based on invoice date is as follows:

Within 1 year (including 1 year) Between 1 and 2 years (including 2 years) Over 2 years Total	As at December 31, 2024 2023 RMB’000 RMB’000 28,295,989 25,719,098 335,669 490,411 464,006 529,589 29,095,664 26,739,098	As at December 31, 2024 2023 RMB’000 RMB’000 28,295,989 25,719,098 335,669 490,411 464,006 529,589 29,095,664 26,739,098
		26,739,098

There is no concentration of credit risk with respect to trade and note receivables, as the Group has a large number of customers.

(b) The Group applies the simplified approach to provide for expected credit losses prescribed by IFRS 9. Details are disclosed in Note 2.1(g).

As at December 31, 2024, trade receivables of approximately RMB1,114,031,000 (2023: RMB1,378,665,000) were impaired and provided for.

– II-202 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Movements on the provision for impairment of trade and note receivables are as follows:

At the beginning of the year Acquisition of subsidiaries Allowance for/(reversal of) impairment losses Written off as uncollectible Exchange adjustment and others At the end of the year	As at December 31, 2024 2023 RMB’000 RMB’000 1,378,665 1,560,244 2,302 (42,078) 239,853 (158,277) (509,273) – 2,484 18,776 1,114,031 1,378,665	As at December 31, 2024 2023 RMB’000 RMB’000 1,378,665 1,560,244 2,302 (42,078) 239,853 (158,277) (509,273) – 2,484 18,776 1,114,031 1,378,665
		(42,078) (158,277) – 18,776
		1,378,665

(c) The provision and reversal of provision for impairment of receivables have been included in impairment losses on financial assets and contract assets in the consolidated statement of profit or loss. Amounts charged to the allowance account are written off when there is no expectation of recovery.
(d) The carrying amount at the reporting date approximated the fair value of each class of receivables mentioned above.

25. RESTRICTED CASH AND CASH AND CASH EQUIVALENTS

Restricted cash Statutory reserve deposits with the PBOC for banking operations (Note (a)) Pledged bank deposits Others Total Cash and cash equivalents Cash on hand and cash at banks (excluding PBOC) Surplus reserve deposits with the PBOC Demand deposits Total	As at December 31, 2024 2023 RMB’000 RMB’000 1,240,261 1,476,938 67,314 52,830 46,728 46,728 1,354,303 1,576,496 32,632,563 40,434,748 13,492 13,560 – – 32,646,055 40,448,308	As at December 31, 2024 2023 RMB’000 RMB’000 1,240,261 1,476,938 67,314 52,830 46,728 46,728 1,354,303 1,576,496 32,632,563 40,434,748 13,492 13,560 – – 32,646,055 40,448,308
		1,576,496

		40,434,748 13,560 –
		40,448,308

(a) On September 18, 2016, the Group incorporated SF Holding Group Finance Co., Ltd., a licensed financial institution, principally engaging in the provision of cash management services internally.

– II-203 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

26. BORROWINGS

Non-current: Long-term bank borrowings (Note (a)) – secured (Note (a)(i)) – unsecured (Note (a)(ii)) Corporate bonds (Note (c)) Loans from Non-controlling interests Total Current portion of non-current: Long-term bank borrowings (Note (a)) – secured (Note (a)(i)) – unsecured (Note (a)(ii)) Corporate bonds (Note (c)) Loans from Non-controlling interests Short term: Short-term bank borrowings (Note (b)) – secured (Note (b)(i)) – unsecured (Note (b)(ii)) Short-term debentures (Note (c)) Loans from Non-controlling interests Total	As at December 31, 2024 2023 RMB’000 RMB’000 8,300 2,680,031 6,178,086 8,675,210 19,941,935 18,794,782 190,939 246,889 26,319,260 30,396,912 30,902 742,364 1,646,813 2,071,021 627,779 615,295 21,831 1,541 117,348 105,969 15,001,186 18,659,397 807,787 – 111,476 113,516 18,365,122 22,309,103	As at December 31, 2024 2023 RMB’000 RMB’000 8,300 2,680,031 6,178,086 8,675,210 19,941,935 18,794,782 190,939 246,889 26,319,260 30,396,912 30,902 742,364 1,646,813 2,071,021 627,779 615,295 21,831 1,541 117,348 105,969 15,001,186 18,659,397 807,787 – 111,476 113,516 18,365,122 22,309,103
		30,396,912

		742,364 2,071,021 615,295 1,541
		105,969 18,659,397 – 113,516
		22,309,103

Notes:

(a) Long-term bank borrowings
(i) The Group’s non-current bank borrowings amounting to approximately RMB2,150,466,000 as at December 31, 2023 had been secured by Shun Yuan Financial Leasing (Tianjin) Co., Ltd.’s receivables. Shun Yuan Financial Leasing (Tianjin) Co., Ltd., a subsidiary of the Group, recognized the receivables as engaging in aircraft financial lease business with SF Airlines Company Limited.

Certain non-current assets had been pledged as securities for long-term bank borrowings as at December 31, 2024 and 2023. Refer to Note 14(a), Note 15(a) and Note 16(b).

(ii) The bank borrowings of approximately RMB5,546,498,000 as at December 31, 2024 (2023: RMB5,633,173,000) had been guaranteed by the subsidiaries within the Group.
(iii) The range of interest rates of major non-current bank borrowings were 2.34% to 5.33% for the year ended December 31, 2024 (2023: 2.20% to 6.91%).

– II-204 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Short-term bank borrowings
(i) Certain non-current assets had been pledged as securities for short-term bank borrowings as at December 31, 2024 and 2023. Refer to Note 14(a), Note 15(a) and Note 16(b).
(ii) Short-term bank borrowings of approximately RMB753,673,000 as at December 31, 2024 (2023: RMB5,156,012,000) had been guaranteed by the Company or its subsidiaries.
(iii) The range of interest rates of major short-term bank borrowings were 2.27% to 6.77% for the year ended December 31, 2024 (2023: 2.20% to 7.47%).
(c) Corporate bonds and short-term debentures
(i) Bonds and debentures amounting to RMB18,039,077,000 as at December 31, 2024 (2023: RMB18,393,642,000) had been guaranteed by the Company.
(ii) During the year ended December 31, 2024, the Group repurchased part of its US dollar bonds, with the total face value of the repurchased bonds amounting to RMB875,011,000. The difference between the consideration paid and the carrying amount of the bonds payable, which is RMB87,779,000, was recognized as other gains (Note 7).
(iii) The range of interest rates of bonds and debentures were 2.15% to 3.13% for the year ended December 31, 2024 (2023: 2.38% to 3.79%).

27. TRADE AND NOTE PAYABLES

Trade and note payables – related parties (Note 38(d)) – third parties Total	As at December 31, 2024 2023 RMB’000 RMB’000 332,322 421,194 27,063,202 24,493,106 27,395,524 24,914,300	As at December 31, 2024 2023 RMB’000 RMB’000 332,322 421,194 27,063,202 24,493,106 27,395,524 24,914,300
		24,914,300

An ageing analysis of the trade and note payables based on invoice date as at December 31, 2024 and 2023 was as follows:

Within 1 year (including 1 year) Over 1 year Total	As at December 31, 2024 2023 RMB’000 RMB’000 27,128,233 24,505,848 267,291 408,452 27,395,524 24,914,300	As at December 31, 2024 2023 RMB’000 RMB’000 27,128,233 24,505,848 267,291 408,452 27,395,524 24,914,300
		24,914,300

– II-205 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

28. CONTRACT LIABILITIES

Contract liabilities – related parties (Note 38(d)) – third parties Total	As at December 31, 2024 2023 RMB’000 RMB’000 25,085 48,147 2,014,113 1,783,871 2,039,198 1,832,018	As at December 31, 2024 2023 RMB’000 RMB’000 25,085 48,147 2,014,113 1,783,871 2,039,198 1,832,018
		1,832,018

The following table shows the amounts of revenue recognized during the year relating to carried-forward contract liabilities:

Revenue recognized that was included in contract liabilities at the beginning of the year 29. OTHER PAYABLES AND ACCRUALS Non-current: Salaries, wages and benefits Others Total Current: Amounts due to related parties (Note 38(d)) Salaries, wages and benefits Payable for purchase of property, plant and equipment Deposits Other taxes payable Payables of cash collected on delivery service Consideration payable for business combinations Others Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 1,832,018 1,244,418 As at December 31, 2024 2023 RMB’000 RMB’000 58,725 82,216 142,312 58,113 201,037 140,329 120,487 136,098 6,151,172 5,872,341 3,292,799 4,345,119 2,566,045 2,355,449 847,166 735,465 1,423,502 1,534,338 13,213 289,306 2,646,947 2,369,055 17,061,331 17,637,171	Year ended December 31, 2024 2023 RMB’000 RMB’000 1,832,018 1,244,418 As at December 31, 2024 2023 RMB’000 RMB’000 58,725 82,216 142,312 58,113 201,037 140,329 120,487 136,098 6,151,172 5,872,341 3,292,799 4,345,119 2,566,045 2,355,449 847,166 735,465 1,423,502 1,534,338 13,213 289,306 2,646,947 2,369,055 17,061,331 17,637,171
		140,329

		136,098 5,872,341 4,345,119 2,355,449 735,465 1,534,338 289,306 2,369,055
		17,637,171

– II-206 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

30. DEFERRED INCOME

				As at December	31,
				2024	2023
				RMB’000	RMB’000
Government	grants	and	subsidies	1,266,359	1,090,644

31. SHARE CAPITAL AND TREASURY SHARES

As at January 1, 2024 Issue of shares (Note (a)) Repurchase of shares (Note (b)) Cancellation of shares (Note (c)) As at December 31, 2024 As at January 1, 2023 Repurchase of shares (Note (a)) Exercise of share options As at December 31, 2023	Number of fully paid ordinary shares RMB’000 4,895,202,373 170,275,763 – (79,291,153) 4,986,186,983 4,895,202,373 – – 4,895,202,373	Share capital RMB’000 4,895,202 170,276 – (79,291) 4,986,187 4,895,202 – – 4,895,202	Treasury shares RMB’000 (2,575,532) – (1,758,094) 3,575,545 (758,081) (2,040,377) (959,956) 424,801 (2,575,532)	Total RMB’000 2,319,670 170,276 (1,758,094) 3,496,254
				4,228,106

				2,854,825 (959,956) 424,801
				2,319,670

Notes:

(a) As stated in Note 1, each H share issued by the Company has a par value of RMB1.00 and was offered at HKD34.30 per share, raising total gross capital proceeds of HKD5,831,000,000, equivalent to RMB5,393,966,550. After deducting issuance expenses, the net proceeds amounted to RMB5,246,004,499, of which RMB170,000,000 was credited to share capital and RMB5,076,004,499 to capital reserve.

– II-207 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As of December 31, 2024, the Company had a total of 4,986,186,983 ordinary shares issued. The details of the Company’s equity changes for the year ended December 31, 2024 and 2023 are as follows:

A shares H shares Total	As at December 31, 2024 2023 4,816,186,983 4,895,202,373 170,000,000 – 4,986,186,983 4,895,202,373	As at December 31, 2024 2023 4,816,186,983 4,895,202,373 170,000,000 – 4,986,186,983 4,895,202,373
		4,895,202,373

(b) For the years ended December 31, 2024 and 2023, a total of 20,771,358 and19,838,884 A shares have been repurchased respectively for future employee stock ownership plan or share-based incentive, and treasury stocks amounting to approximately RMB1,758,094,000 and RMB959,956,000 therefore were recognized respectively.
(c) During the year ended December 31, 2024, the Company, under the approval and authorization of the general meeting, cancelled a total of 79,291,153 shares. Hence treasury stocks amounting to approximately RMB3,575,545,000 and share capital of approximately RMB79,291,000 were derecognized with a corresponding debit to capital reserve of approximately RMB3,496,254,000 for the year ended December 31, 2024.

– II-208 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

32. RESERVES AND RETAINED EARNINGS

(a) Reserves

As at January, 1 2024 Other comprehensive income Transfer of gain on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Net proceeds from Global Offering Net proceeds from share option exercising Capital injection from non-controlling interests Cancellation of shares Share-based payment Transaction with non-controlling interests and others Profit appropriations to statutory reserve Safety reserve appropriation Safety reserve utilisation Others As at December 31, 2024	Capital reserve RMB’000 43,164,085 – – 5,076,004 11,194 54 (3,496,254) 89,677 (3,916,204) – – – (3,624) 40,924,932	Other comprehensive income RMB’000 5,532,428 (1,033,976) 31,036 – – – – – – – – – – 4,529,488	General and regulatory reserve RMB’000 524,376 – – – – – – – – – – – – 524,376	Special reserve RMB’000 – – – – – – – – – – 481,331 (481,331) – –	Statutory reserve RMB’000 2,413,786 – – – – – – – – 232,352 – – – 2,646,138	Total RMB’000 51,634,675
						(1,033,976) 31,036 5,076,004 11,194 54 (3,496,254) 89,677 (3,916,204) 232,352 481,331 (481,331) (3,624)
						48,624,934

– II-209 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As at January 1, 2023 Other comprehensive income Transfer of gain on disposal of equity investments at fair value through other comprehensive income to retained earnings Transactions with owners Capital contribution of non-controlling interests Exercise of share options Share-based payment Transaction with non-controlling interests and others Appropriation to general and regulatory reserves Profit appropriations to statutory reserve Safety reserve appropriation Safety reserve utilisation Others As at December 31, 2023	Capital reserve RMB’000 43,996,237 – – 1,207 (69,612) 271,510 (1,037,241) – – – – 1,984 43,164,085	Other comprehensive income RMB’000 4,538,027 873,033 121,368 – – – – – – – – – 5,532,428	General and regulatory reserve RMB’000 493,048 – – – – – – 31,328 – – – – 524,376	Special reserve RMB’000 – – – – – – – – – 389,332 (389,332) – –	Statutory reserve RMB’000 1,010,253 – – – – – – – 1,403,533 – – – 2,413,786	Total RMB’000 50,037,565
						873,033 121,368 1,207 (69,612) 271,510 (1,037,241) 31,328 1,403,533 389,332 (389,332) 1,984
						51,634,675

33. SHARE-BASED PAYMENT

(a) Share-based payment expenses during the year were as follows:

Equity settled share-based payment Cash settled share-based payment Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 91,446 309,338 (10,952) 233,708 80,494 543,046	Year ended December 31, 2024 2023 RMB’000 RMB’000 91,446 309,338 (10,952) 233,708 80,494 543,046
		543,046

(b) Equity settled share-based payment arrangement

(i) Share Option Plan of the Company

– II-210 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The stock options shall vest over a period of 4 years on the condition that the employees, officers and directors remain in service and certain performance standards are met. One-fourth of the awards shall be vested upon the end of the first, the second, the third and the fourth anniversary dates of the grants.

During the year ended December 31, 2023, 1,328 participants of the plan met the performance requirements and a total of 8,420,193 share options were exercised.

During the year ended December 31, 2024, 1,353 participants of the plan met the performance requirements and a total of 8,168,703 share options were exercisable.

A total of 27,295,395 share options granted through the 2022 Stock Option Incentive Plan were outstanding as of December 31, 2024.

The fair value per option was estimated at the grant dates using the following assumptions:

Exercise price per share	RMB42.61, RMB42.43
Expiry date	Respective annual due dates
Share price at grant date per share	RMB51.57, RMB49.88
Expected volatility of the Company’s shares	35.77% ~ 40.39%
Expected dividend yield	0.51% ~ 0.55%
Risk-free interest rate	1.50% ~ 2.75%

The Group recognizes share-based payments in capital reserves and its consolidated statement of profit or loss based on options ultimately expected to vest, after considering estimated forfeitures of the share options. Forfeitures are estimated based on the historical experience and revised in the subsequent periods if actual forfeitures differ from those estimates. The impact of the revision of the original estimates on non-market vesting conditions, if any, is recognized in the profit and loss over the remaining vesting period, with a corresponding adjustment to capital reserves.

Share-based payment expenses of RMB84,316,000 (2023: RMB216,304,000) related to the above share options were recognized in the consolidated statement of profit or loss for the year ended December 31, 2024.

An accumulated amount of RMB545,105,000 (2023: RMB460,789,000) has been recognized as capital reserve as at December 31, 2024.

(ii) Share incentive Plan of the subsidiary entities

Subsidiaries of the Group issued restricted share units (‘ RSU ’) or share options of their own shares to senior executives and other employees.

The fair value at grant date is independently determined by share price or using an adjusted form of the Discounted Cash Flow model or Black Scholes Model.

Share-based payment expenses of approximately RMB7,130,000 (2023: RMB93,034,000) related to the above share awards were recognized in the consolidated statement of profit or loss for the year ended December 31, 2024.

An accumulated amount of RMB608,199,000 (2023: RMB601,069,000), as at December 31, 2024 has been recognized as capital reserve.

– II-211 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(c) Cash settled share-based payment arrangement

The management recognized the services received, and a liability to pay for those services, as the employees render service during the period. A total of share-based payment expenses of approximately RMB10,952,000 relation to the above arrangement for the year ended December 31, 2024 were reversed to the consolidated statement of profit or loss (2023: RMB233,708,000 expenses were debited to the consolidated statement of profit or loss).

There were no share-based payments recognized as liabilities as at December 31, 2024. An accumulated amount of approximately RMB268,453,000 as at December 31, 2023 has been recognized as liabilities.

– II-212 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

34. NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS

(a) Reconciliation of profit before income tax to net cash generated from operations:

Profit before income tax for the year Adjustments for: Depreciation of right-of-use assets (Note 8) Depreciation and amortization (excluding right-of-use assets) (Note 8) Impairment provision for investments in associates and joint ventures Net impairment losses on financial assets and contract assets Impairment of inventories, property, plant and equipment and other non-current assets (Note 7) Equity settled share-based compensation expenses (Note 33) Losses on disposal of property, plant and equipment, right-of-use assets and other non-current assets (Note 7) Fair value changes in financial assets at FVPL_(Note 7) Gains on disposal of investments in subsidiaries (Note 36(b)) Share of (profit)/loss of associates and joint ventures, net Gains on disposal of investments in associates and joint ventures (Note 7) Dividend income (Note 6) Amortization of deferred income Finance costs (Note 10) Operating cash flow before working capital changes _Changes in working capital: Increase in inventories (Increase)/decrease in trade receivables, prepayment, contract assets and other receivable Increase/(decrease) in trade payables, contract liabilities, and other payables Cash generated from operations	Year ended December 31, 2024 2023 RMB’000 RMB’000 13,607,261 10,486,505 6,798,783 7,213,063 10,533,474 10,106,044 187,796 123,907 271,693 (33,480) 141,622 62,390 91,446 309,338 60,228 53,891 (509,717) (529,513) (80,615) (268,204) 70,020 67,190 (89,622) (21,441) (1,005) (2,438) (43,241) (45,935) 2,373,319 2,269,700 33,411,442 29,791,017 8,439 (491,314) (247,211) (262,500) 2,191,719 759,002 35,364,389 29,796,205	Year ended December 31, 2024 2023 RMB’000 RMB’000 13,607,261 10,486,505 6,798,783 7,213,063 10,533,474 10,106,044 187,796 123,907 271,693 (33,480) 141,622 62,390 91,446 309,338 60,228 53,891 (509,717) (529,513) (80,615) (268,204) 70,020 67,190 (89,622) (21,441) (1,005) (2,438) (43,241) (45,935) 2,373,319 2,269,700 33,411,442 29,791,017 8,439 (491,314) (247,211) (262,500) 2,191,719 759,002 35,364,389 29,796,205
		7,213,063 10,106,044 123,907 (33,480) 62,390 309,338 53,891 (529,513) (268,204) 67,190 (21,441) (2,438) (45,935) 2,269,700
		29,791,017
		(491,314) (262,500) 759,002
		29,796,205

– II-213 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Transaction with non-controlling interests

During the year, the Group changed its ownership interests in certain subsidiaries without change of its control.

The impacts of the transactions with non-controlling interests for the years ended December 31, 2024 and 2023 are summarized as follows:

Net cash consideration paid to non-controlling interests without change of control Recognized in the reserve within equity	Year ended December 31, 2024 2023 RMB’000 RMB’000 3,451,076 1,833,285 3,916,204 1,037,241	Year ended December 31, 2024 2023 RMB’000 RMB’000 3,451,076 1,833,285 3,916,204 1,037,241
		1,037,241

(i) Major transaction during the year ended December 31, 2024

During the year ended December 31, 2024, the Group acquired the remaining equity interests of Shenzhen SF Freight Corporation and Shenzhen Fengwang Holding Co., Ltd. Upon the completion of the transactions, the aforementioned subsidiaries became wholly-owned subsidiaries of the Group. The Group recognized a decrease in other reserve of RMB2,146,357,000 and RMB744,838,000, respectively. The consideration for above transactions were paid in 2024.

Except for the aforementioned non-controlling interests’ transactions, other transactions had insignificant impact on the Group’s consolidated financial statements.

(ii) Major transactions during the year ended December 31, 2023

(c) Non-cash operating, investing and financing activities

The main non-cash operating, investing and financing activities for the years ended December 31, 2024 and 2023 are summarized as follows:

Additions of right-of-use assets Settlement of acquisitions of long-term assets through bank supply chain financing or re-factoring Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 6,736,287 6,553,794 115,198 543,389 6,851,485 7,097,183	Year ended December 31, 2024 2023 RMB’000 RMB’000 6,736,287 6,553,794 115,198 543,389 6,851,485 7,097,183
		7,097,183

– II-214 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(d) Reconciliation of liabilities arising from financing activities

At January 1, 2024 Cash flows Interest expenses Other non-cash movements At December 31, 2024 At January 1, 2023 Cash flows Acquisition and disposal of subsidiaries, net Interest expenses Other non-cash movements At December 31, 2023	Bank borrowings 32,933,992 (11,671,328) 1,273,506 446,465 22,982,635 21,902,738 9,202,159 206,227 1,071,956 550,912 32,933,992	Corporate bonds and short-term debentures 19,410,077 937,166 636,369 393,889 21,377,501 27,651,090 (9,447,697) – 732,349 474,335 19,410,077	Loans from non-controlling interest 361,946 (2,624) 2,326 (37,402) 324,246 314,480 10,098 – 4,545 32,823 361,946	Leases liabilities (Note (i)) 13,808,460 (7,438,385) 503,871 5,721,851 12,595,797 15,179,328 (7,765,246) (4,810) 564,374 5,834,814 13,808,460	Loans from holders of asset-backed securities scheme – – – – – – (899,360) 899,360 – – –	Total 66,514,475 (18,175,171) 2,416,072 6,524,803
						57,280,179

						65,047,636 (8,900,046) 1,100,777 2,373,224 6,892,884
						66,514,475

(i) The other non-cash movement about lease liabilities mainly resulted from the new lease contracts entered during the years ended December 31, 2024 and 2023.

35. ACQUISITION OF SUBSIDIARIES

The net cash flow impact of acquisition of subsidiaries for the year ended December 31, 2024 and 2023 are as below:

Net cash paid in respect of the business combinations (Note (a)) Net cash paid in respect of the acquisition of assets (Note (b)) Net cash paid in acquisition of subsidiaries	Year ended December 31, 2024 2023 RMB’000 RMB’000 194,007 972,456 502,647 1,224,952 696,654 2,197,408	Year ended December 31, 2024 2023 RMB’000 RMB’000 194,007 972,456 502,647 1,224,952 696,654 2,197,408
		2,197,408

– II-215 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(a) Acquisition of subsidiaries through business combinations

Analysis of the net cash outflow in respect of the acquisition of subsidiaries treated as business combinations for the year ended December 31, 2024 and 2023 are as below:

Total acquisition consideration Less: Cash and bank balances acquired Outstanding and included in other payables Cash paid in the current year for acquisition of subsidiaries in prior years Net cash paid in respect of the business combinations	Year ended December 31, 2024 2023 RMB’000 RMB’000 173,897 141,702 (20,212) (4,545) (64,506) – 104,828 835,299 194,007 972,456	Year ended December 31, 2024 2023 RMB’000 RMB’000 173,897 141,702 (20,212) (4,545) (64,506) – 104,828 835,299 194,007 972,456
		972,456

Net cash paid in respect of the business combinations

(b) Acquisition of assets through acquisition of subsidiaries

Analysis of the net cash outflow in respect of the acquisition of subsidiaries treated as acquisition of assets for the year ended December 31, 2024 and 2023 are as below:

Total acquisition consideration Less: Cash and bank balances acquired Net cash paid in respect of the acquisition of assets	Year ended December 31, 2024 2023 RMB’000 RMB’000 559,289 1,269,444 (56,642) (44,492) 502,647 1,224,952	Year ended December 31, 2024 2023 RMB’000 RMB’000 559,289 1,269,444 (56,642) (44,492) 502,647 1,224,952
		1,224,952

(i) Major acquisition during the year ended December 31, 2024

The transaction met the concentration test criteria, and the set of property assets acquired was determined not to be a business.

– II-216 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

36. DISPOSAL OF SUBSIDIARIES

Transactions of disposal of subsidiaries for the year ended December 31, 2024 and 2023 are analyzed as follows:

(a) Net cash received from disposal of subsidiaries

Cash consideration Including: Hangzhou Zhentai Capital Management Ltd. Shenzhen Fengwang Information Technology Co., Ltd. Other subsidiaries Total disposal consideration Total Cash consideration Add: Cash and cash equivalents received from disposal of subsidiaries in the prior year Less: Cash and cash equivalents received from disposal of subsidiaries in the future year Less: Cash and cash equivalents held by the subsidiaries at the dates of disposal Net cash flow impact from disposal of subsidiaries	Year ended December 31, 2024 2023 RMB’000 RMB’000 273,345 – – 460,930 21,287 146,798 294,632 607,728 Year ended December 31, 2024 2023 RMB’000 RMB’000 294,632 607,728 190 – (29,868) – (2,297) (208,906) 262,657 398,822	Year ended December 31, 2024 2023 RMB’000 RMB’000 273,345 – – 460,930 21,287 146,798 294,632 607,728 Year ended December 31, 2024 2023 RMB’000 RMB’000 294,632 607,728 190 – (29,868) – (2,297) (208,906) 262,657 398,822
		398,822

(b) Gains on disposal of investments in subsidiaries

Total disposal consideration Carrying amount of net assets sold Gains on disposal of investments in subsidiaries	Year ended December 31, 2024 2023 RMB’000 RMB’000 294,632 607,728 (214,017) (339,524) 80,615 268,204	Year ended December 31, 2024 2023 RMB’000 RMB’000 294,632 607,728 (214,017) (339,524) 80,615 268,204
		268,204

– II-217 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

37. PARTLY OWNED SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Revenue Net profit Attributable to owners of the Company Net cash generated from operating activities	As at December 31, 2024 RMB’000 21,013,025 24,476,527 45,489,552 14,653,958 9,650,482 24,304,440 Year ended December 31, 2024 RMB’000 54,256,276 750,674 341,968 3,310,646	As at December 31, 2023 RMB’000 18,187,621 25,760,002
		43,947,623

		13,130,867 9,017,591
		22,148,458

		Year ended December 31, 2023 RMB’000 45,944,780 227,315 209,849 3,043,080

(i) Except for KLN and its subsidiaries, no other subsidiaries had non-controlling interests that are material to the Group for the years ended December 31, 2024 and 2023.

38. RELATED PARTY TRANSACTIONS

(a) Parent entities

			Place of	Ownership	interest
Name		Type	incorporation	2024	2023
Mingde	Holding	Investment	Shenzhen	53.39%	54.38%

The Company’s ultimate holding company is Mingde Holding, and the ultimate controlling person is Mr. Wang Wei.

(b) Names and relationships with related parties

– II-218 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Name of related parties

Relationship with the Group

Guangdong Fengxing Zhitu Technology Co., Ltd. and its subsidiaries Shenzhen Hive Box Technology Co., Ltd. and its subsidiaries Shenzhen SF Hefeng Microfinance Co., Ltd.

Shenzhen Fengxiang Information Technology Co., Ltd. and its subsidiaries

Hangzhou Fengtai E-Commerce Industrial Park Management Ltd.

Shunyuan Commercial Factoring (Tianjin) Co., Ltd.

Shenzhen Fengyi Technology Co., Ltd.

Lianyungang Haichang Logistics Co., Ltd. SF Real Estate Investment Trust and its subsidiaries Shenzhen Shunjie Fengda and its subsidiaries

Shenzhen Zhongwang Finance and Tax Management Co., Ltd.

Shenzhen Fenglian Technology Co., Ltd.

Zhejiang Galaxis Technology Group Co., Ltd. and its subsidiaries

State Grid E-Commerce Yunfeng Logistics Technology (Tianjin) Co., Ltd.

Sichuan Wulianyida Technology Co., Ltd. and its subsidiaries Shenzhen Yizhan Renewal Service Technology Co., Ltd. and its subsidiaries

Beijing Shunhe Tongxin Technology Co., Ltd. and its subsidiaries

Beijing Wulian Shuntong Technology Co., Ltd. and its subsidiaries

Fengsu Yitong (Suzhou) Technology Co., Ltd. and its subsidiaries

Global Connect Holding Limited Shenzhen Shenghai Information Service Co., Ltd. Ezhou CCCC SF Airport Industrial Park Investment and Development Co., Ltd.

CR-SF International Express Co., Ltd.

Entities controlled by the ultimate controlling person of the Company

Associates of controlling shareholder, exited the associates of controlling shareholder as of June 30, 2024

Associates of the Group

Associates of the Group Associates of the Group, exited the associate company as of August 9, 2024

Associates of the Group

Associates of the Group Associates of the Group

Associates of the Group

A joint venture of the Group

A joint venture of the Group A joint venture of the Group A joint venture of the Group

A joint venture of the Group

(c) Transactions with related parties

The following significant transactions were carried out between the Group and its related parties for the year ended December 31, 2024 and 2023. In the opinion of the directors of the Company, the related party transactions were carried out in the normal course of business and at terms negotiated between the Group and the respective related parties.

– II-219 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Sales of goods and services: Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of controlling shareholder Joint ventures of the Group Associates of the Group Total Purchases of goods and services: Entities controlled by the ultimate controlling person of the Company Associates of controlling shareholder Joint ventures of the Group Associates of the Group Total Disposal of equity: Entities controlled by the ultimate controlling person of the Company Joint ventures of the Group Associates of the Group Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 535 426 1,593,016 127,516 7,162 14,759 50,983 13,937 88,148 91,576 1,739,844 248,214 Year ended December 31, 2024 2023 RMB’000 RMB’000 750,259 972,582 190 839 1,079,710 1,279,481 895,553 1,661,741 2,725,712 3,914,643 – 85,188 – 12,827 – – – 98,015	Year ended December 31, 2024 2023 RMB’000 RMB’000 535 426 1,593,016 127,516 7,162 14,759 50,983 13,937 88,148 91,576 1,739,844 248,214 Year ended December 31, 2024 2023 RMB’000 RMB’000 750,259 972,582 190 839 1,079,710 1,279,481 895,553 1,661,741 2,725,712 3,914,643 – 85,188 – 12,827 – – – 98,015
		3,914,643

		85,188 12,827 –
		98,015

– II-220 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Acquisition of assets through acquisition of subsidiaries: Joint ventures of the Group (Note 35(b)) Depreciation and interest expenses borne by the Group as the lessee: Entities controlled by the ultimate controlling person of the Company Joint ventures of the Group Associates of the Group Total Additions of right-of-use assets: Entities controlled by the ultimate controlling person of the Company Joint ventures of the Group Associates of the Group Total Other transactions: Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of controlling shareholder Joint ventures of the Group Associates of the Group Total	Year ended December 31, 2024 2023 RMB’000 RMB’000 559,289 335,443 11,393 12,148 – 31,672 226,248 229,975 237,641 273,795 3,639 53,598 2,866 3,876 3,320 32,734 9,825 90,208 684 683 4,219 2,416 1,391 2,861 756 1,857 14,441 4,869 21,491 12,686	Year ended December 31, 2024 2023 RMB’000 RMB’000 559,289 335,443 11,393 12,148 – 31,672 226,248 229,975 237,641 273,795 3,639 53,598 2,866 3,876 3,320 32,734 9,825 90,208 684 683 4,219 2,416 1,391 2,861 756 1,857 14,441 4,869 21,491 12,686

		12,148 31,672 229,975
		273,795

		53,598 3,876 32,734
		90,208

		683 2,416 2,861 1,857 4,869
		12,686

– II-221 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(d) Balances with related parties

Amounts due from related parties: Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of controlling shareholder Joint ventures of the Group Associates of the Group Total Amounts due to related parties: Controlling shareholder Entities controlled by the ultimate controlling person of the Company Associates of controlling shareholder Joint ventures of the Group Associates of the Group Total Lease Liabilities: Entities controlled by the ultimate controlling person of the Company Joint ventures of the Group Associates of the Group Total	As at December 31, 2024 2023 RMB’000 RMB’000 365 224 662,119 595,027 – 3,718 5,717 341,214 188,480 219,037 856,681 1,159,220 320 128 113,289 138,915 – 4,911 193,763 166,439 170,522 295,046 477,894 605,439 86,838 92,060 – 98,987 360,194 598,296 447,032 789,343	As at December 31, 2024 2023 RMB’000 RMB’000 365 224 662,119 595,027 – 3,718 5,717 341,214 188,480 219,037 856,681 1,159,220 320 128 113,289 138,915 – 4,911 193,763 166,439 170,522 295,046 477,894 605,439 86,838 92,060 – 98,987 360,194 598,296 447,032 789,343
		1,159,220

		128 138,915 4,911 166,439 295,046
		605,439

		92,060 98,987 598,296
		789,343

(e) Guarantee to related parties

(i) Guarantee provided

		As at December 31, 2024
			Whether the
			guarantee
	Guaranteed		has been
Guaranteed entities:	amount	Guaranteed period	fulfilled
	RMB’000
Joint ventures of the Group	782,000	September 29, 2021 to April 29, 2055	No

– II-222 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

		As at December 31, 2023
			Whether the
			guarantee
	Guaranteed		has been
Guaranteed entities:	amount	Guaranteed period	fulfilled
	RMB’000
Joint ventures of the Group	782,000	September 29, 2021 to April 29, 2055	No

(ii) Contracted not yet provided

Joint ventures of the Group (f) Key management compensation Key management compensation 39. COMMITMENTS (a) Capital Commitments Contracted, but not provided for purchase of property, plant and equipment Investment to be paid Others Total	As at December 31, 2024 2023 RMB’000 RMB’000 2,384,180 2,384,180 Year ended December 31, 2024 2023 RMB’000 RMB’000 42,188 48,509 As at December 31, 2024 2023 RMB’000 RMB’000 1,515,674 1,858,672 121,043 131,895 – 944 1,636,717 1,991,511	As at December 31, 2024 2023 RMB’000 RMB’000 2,384,180 2,384,180 Year ended December 31, 2024 2023 RMB’000 RMB’000 42,188 48,509 As at December 31, 2024 2023 RMB’000 RMB’000 1,515,674 1,858,672 121,043 131,895 – 944 1,636,717 1,991,511
		1,991,511

– II-223 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

40. STATEMENT OF FINANCIAL POSITION AND RESERVES MOVEMENT OF THE COMPANY

(a) Financial position of the Company

ASSETS Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Deferred tax assets Prepayments, other receivables and other assets Investments in subsidiaries Total non-current assets Current assets Prepayments, other receivables and other assets Cash and cash equivalents Total current assets Total assets LIABILITIES Current liabilities Income tax payable Other payables and accruals Total current liabilities Total liabilities Net assets EQUITY Share capital Less: Treasury shares Reserves Retained earnings Total equity	As at December 31, 2024 2023 RMB’000 RMB’000 335,012 210,661 341,498 354,760 17 168 112 100 1,755 – 69,994,648 66,933,038 70,673,042 67,498,727 13,824,762 21,850,383 4,077,541 138,046 17,902,303 21,988,429 88,575,345 89,487,156 10,911 3,188 90,091 21,623 101,002 24,811 101,002 24,811 88,474,343 89,462,345 4,986,187 4,895,202 (758,081) (2,575,532) 76,058,993 74,151,381 8,187,244 12,991,294 88,474,343 89,462,345	As at December 31, 2024 2023 RMB’000 RMB’000 335,012 210,661 341,498 354,760 17 168 112 100 1,755 – 69,994,648 66,933,038 70,673,042 67,498,727 13,824,762 21,850,383 4,077,541 138,046 17,902,303 21,988,429 88,575,345 89,487,156 10,911 3,188 90,091 21,623 101,002 24,811 101,002 24,811 88,474,343 89,462,345 4,986,187 4,895,202 (758,081) (2,575,532) 76,058,993 74,151,381 8,187,244 12,991,294 88,474,343 89,462,345
		67,498,727
		21,850,383 138,046
		21,988,429
		89,487,156

		3,188 21,623
		24,811
		24,811

		89,462,345

		4,895,202 (2,575,532) 74,151,381 12,991,294
		89,462,345

WANG Wei HO Chit Chairman Director

– II-224 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(b) Reserves movement of the Company

As at January 1, 2024 Comprehensive income: Profit/(loss) for the year Transactions with owners Net proceeds from Global Offering Net proceeds from share option exercising Cancellation of shares Share-based payment Profit appropriations to statutory reserve Dividends As at December 31, 2024 As at January 1, 2023 Comprehensive income: Profit/(loss) for the year Transactions with owners Share-based payment Exercise of share options Profit appropriations to statutory reserve Dividends As at December 31, 2023	Reserves RMB’000 74,151,381 – 5,076,004 11,194 (3,496,254) 84,316 232,352 – 76,058,993 Reserves RMB’000 72,601,156 – 216,304 (69,612) 1,403,533 – 74,151,381	Retained earnings RMB’000 12,991,294 5,031,094 – – – – (232,352) (9,602,792) 8,187,244 Retained earnings RMB’000 1,573,109 14,035,334 – – (1,403,533) (1,213,616) 12,991,294	Total RMB’000 87,142,675 5,031,094
			5,076,004 11,194 (3,496,254) 84,316 – (9,602,792)
			84,246,237

			Total RMB’000 74,174,265 14,035,334
			216,304 (69,612) – (1,213,616)
			87,142,675

– II-225 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

41. SUBSEQUENT EVENT

(a) The final dividend in respect of the year ended December 31, 2024 of RMB44 cents per ordinary share (tax inclusive) was approved by the Board on March 28, 2025. The proposal is subject to the approval of the shareholders at the Annual General Meeting. The dividend was not recognized as a liability as at December 31, 2024.
(b) Based on “the resolution of Proceeding the Application and Issuance Arrangement of Publicly Offered Infrastructure REITs”, which was approved in the 10th meeting of 6th session of the Board, the Company proceeded the application and issuance work of the publicly offered infrastructure REITs.

On 24 February, 2025, SZSE issued “a clearance letter in related to the listing of the closed-end investment fund of South SF Warehousing and logistic infrastructure (“ closed-end investment fund ”) and the listing and transferring of the asset-backed special vehicle (“ asset-backed special vehicle ”) of phase 1 SF Warehousing and logistics infrastructure” (Shen Zheng Han [2025] No. 178), confirming its consent to the closed-end investment fund and asset-backed special vehicle’s compliance to the listing criteria, as well as the transferring criteria of the asset-backed special vehicle. On March 5, 2025, CSRC granted the “approval in related to the registration of the closed-end investment fund” (CSRC Approval [2025] No. 394), approved the registration of the publicly offered infrastructure REITs.

As of the approval date of the financial statements, the issuance of the infrastructure REITs is not yet completed.

42. GROUP STRUCTURE – PRINCIPAL SUBSIDIARIES

As at December 31, 2024 and 2023, the Company’s principal subsidiaries are as follows:

			Issued
			ordinary/	Percentage of
			registered	equity interest
	Place of		share	As at December 31,
	Incorporation and		capital (in	2024
Name	Operation	Principal Activities	thousand)	Direct	Indirect
Taisen Holding	Mainland China	Investment holding	RMB5,010,000	100.00%	–
S.F. Express Co., Ltd.	Mainland China	international freight	RMB150,000	–	100.00%
		forwarding, domestic
		and international
		express services
SF Technology Co., Ltd.	Mainland China	technical maintenance	RMB60,000	–	100.00%
		and development
		services
Shenzhen Shunlu Logistics	Mainland China	cargo transportation,	RMB160,000	–	100.00%
Co., Ltd.		freight forwarding
Anhui SF Communication	Mainland China	value-added	RMB50,000	–	100.00%
Services Co., Ltd.		telecommunications
		services
Shenzhen Yuhui	Mainland China	consulting services	RMB250,000	–	100.00%
Management Consulting
Co., Ltd.
Shenzhen SF Supply Chain	Mainland China	supply chain	RMB1,500,000	–	100.00%
Co., Ltd.		management services
SF Airlines Company	Mainland China	air cargo and mail	RMB1,510,000	–	100.00%
Limited		transportation services

– II-226 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

			Issued
			ordinary/	Percentage of
			registered	equity interest
	Place of		share	As at December 31,
	Incorporation and		capital (in	2024
Name	Operation	Principal Activities	thousand)	Direct	Indirect
Shenzhen Fengtai	Mainland China	e-commerce park	RMB9,530,010	–	100.00%
E-commerce Industrial		management
Park Assets Management
Co., Ltd.
Shenzhen Fengtai Industrial	Mainland China	management consulting	RMB58,000	–	100.00%
Park Management Service
Co., Ltd.
Shenzhen SF Airport	Mainland China	investment in industry	RMB100,000	–	100.00%
Investment Co., Ltd.
SF Holding (HK) Limited	Hong Kong	investment holding	HKD8,346,998	–	100.00%
SF Holdings Group Finance	Mainland China	financing, wealth	RMB2,500,000	–	100.00%
Co., Ltd.		management, and
		consulting services
Shenzhen SF Chuangxing	Mainland China	Investment in industry	RMB330,000	–	100.00%
Investment Co., Ltd.
Shenzhen Fengnong	Mainland China	retail	RMB145,000	–	100.00%
Technology Co., Ltd.
Shenzhen Fenglang Supply	Mainland China	supply chain	RMB50,000	–	100.00%
Chain Co., Ltd.		management services
Shunyuan Financial Lease	Mainland China	leasing business	RMB1,500,000	–	100.00%
(Tianjin) Co., Ltd.
SF Multimodal	Mainland China	cargo delivery services	RMB242,000	–	100.00%
Transportation Co., Ltd.
SF Duolian Technology Co.,	Mainland China	technology development	RMB150,000	–	100.00%
Ltd.
Dongguan SF Taisen	Mainland China	property management	RMB30,010	–	100.00%
Logistics Management Co.,
Ltd.
SF Innovation Technology	Mainland China	information technology	RMB450,000	–	100.00%
Co., Ltd.		services
Shenzhen Shunheng	Mainland China	consulting services	RMB260,000	–	100.00%
Rongfeng Supply Chain
Technology Co., Ltd.
Shenzhen Hengyi Logistics	Mainland China	freight forwarding	RMB100,000	–	100.00%
Supply Chain Co., Ltd.		services
Shenzhen Shuncheng Lefeng	Mainland China	factoring business	RMB92,500	–	100.00%
Commercial Co., Ltd.
Hangzhou SF INTRA-CITY	Mainland China	Supply chain	RMB917,376	–	57.86%
Industrial Co., Ltd.		management and other
		services
SF Shared Precision	Mainland China	information technology	RMB7,000	–	100.00%
Information Technology		services
(Shenzhen) Co., Ltd.
Hangzhou Shuangjie Supply	Mainland China	supply chain	RMB50,000	–	100.00%
Chain Co., Ltd.		management and other
		services
Shenzhen Shunfeng Express	Mainland China	enterprise management	RMB1,230,000	–	100.00%
Co., Ltd.		and supply chain
		management

– II-227 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

			Issued
			ordinary/	Percentage of
			registered	equity interest
	Place of		share	As at December 31,
	Incorporation and		capital (in	2024
Name	Operation	Principal Activities	thousand)	Direct	Indirect
Huanggang Xiufeng	Mainland China	business information	RMB90,000	–	100.00%
Education Investment Co.,		consulting and
Ltd.		enterprise
		management
		consulting
Junhe Information Service	Mainland China	information technology	RMB10,000	–	100.00%
Technology (Shenzhen)		and development
Co., Ltd.		services
SF Mathematical Technology	Mainland China	technology services and	RMB250,000	–	100.00%
(Shenzhen) Service Co.,		consulting services
Ltd.
Shenzhen SF International	Mainland China	information technology	RMB15,010	–	100.00%
Industrial Co., Ltd.		services and
		consulting services
Shenzhen Shunfeng	Mainland China	investment holding	RMB1,100,000	–	100.00%
Investment Co., Ltd.
SF Cold Chain Logistics Co.,	Mainland China	cargo transportation and	RMB97,660	–	100.00%
Ltd.		freight forwarding
Zhejiang Shuangjie Supply	Mainland China	supply chain	RMB192,444	–	100.00%
Chain Technology Co., Ltd.		management and other
		services
Shanghai Shun Ru Feng Lai	Mainland China	information technology	RMB72,873	–	100.00%
Technology Co., Ltd.		services
KLN	Hong Kong	provision of logistics and	HKD903,715	–	51.52%
		freight forwarding
		services

Notes:

(i) The Company’s investment in a subsidiary is as follow:

		As at December	31,
		2024	2023
		RMB’000	RMB’000
Taisen	Holding	69,994,648	66,933,038

(ii) The English names of the subsidiaries represent the best efforts made by the management of the Group in translating their Chinese names as they do not have official English names.
(iii) The above list included subsidiaries having material impact on the annual results or net assets of the Group.

– II-228 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(C) FINANCIAL INFORMATION OF S.F. HOLDING FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025

(I) Financial Statements

Prepared by: S.F. Holding Co., Ltd.

CONSOLIDATED BALANCE SHEET

September 30, 2025

	As at	As at
	September 30,	December 31,
Items	2025	2024
	RMB’000	RMB’000
Current assets:
Cash at bank and on hand	19,392,730	33,936,101
Financial assets held for trading	25,647,106	11,246,156
Notes receivable	597,096	267,086
Accounts receivable	29,360,875	27,714,547
Receivables financing	191,321	170,913
Advances to suppliers	3,327,552	2,790,432
Loans and advances	267,835	182,826
Other receivables	4,071,777	3,282,021
Including: Interests receivable	–	–
Dividends receivable	–	–
Inventories	2,634,549	2,432,383
Contract assets	2,883,380	2,740,820
Current portion of non-current assets	32,803	104,682
Other current assets	4,395,074	3,818,839
Total current assets	92,802,098	88,686,806

– II-229 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

	As at	As at
	September 30,	December 31,
Items	2025	2024
	RMB’000	RMB’000
Non-current assets:
Long-term receivables	313,437	293,547
Long-term equity investments	7,216,771	6,203,642
Investments in other equity instruments	8,508,992	8,231,994
Other non-current financial assets	626,582	477,416
Investment properties	7,484,944	7,241,199
Fixed assets	51,299,749	54,058,101
Construction in progress	2,568,055	2,985,702
Right-of-use assets	15,183,352	12,842,101
Intangible assets	15,639,018	16,732,867
Capitalized development expenditures	189,934	82,489
Goodwill	9,778,246	10,004,365
Long-term prepaid expenses	2,964,763	3,115,042
Deferred tax assets	2,382,422	2,291,994
Other non-current assets	966,854	576,948
Total non-current assets	125,123,119	125,137,407
Total assets	217,925,217	213,824,213
Current liabilities:
Short-term borrowings	7,274,468	15,003,336
Financial liabilities held for trading	99,509	105,464
Notes payable	12,873	9,487
Accounts payable	30,056,905	27,386,037
Advances from customers	29,520	46,283
Contract liabilities	2,142,079	2,039,198
Deposits from customers and interbank deposits	254	943
Employee benefits payable	4,750,222	6,151,172
Taxes payable	2,226,496	2,526,298
Other payables	10,084,785	10,178,082
Including: Interests payable	–	–
Dividends payable	92,820	187,401
Current portion of non-current liabilities	7,525,065	7,828,639
Other current liabilities	5,765,439	918,429
Total current liabilities	69,967,615	72,193,368

– II-230 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

		As at	As at
	September 30,		December 31,
Items		2025	2024
		RMB’000	RMB’000
Non-current liabilities:
Long-term borrowings		5,158,251	6,186,386
Debentures payable		18,227,665	19,941,935
Lease liabilities		9,601,517	7,094,483
Long-term payables		250,587	248,741
Long-term employee benefits	payable	76,305	58,725
Provisions		63,312	84,510
Deferred income		1,298,533	1,266,359
Deferred tax liabilities		4,306,327	4,414,485
Total non-current liabilities		38,982,497	39,295,624
Total liabilities		108,950,112	111,488,992
Equity:
Share capital		5,039,422	4,986,187
Other equity instruments		40,141	–
Capital reserves		42,597,865	40,924,932
Less: Treasury stock		-300,018	-758,081
Other comprehensive income		4,748,582	4,529,488
Surplus reserve		2,649,391	2,646,138
General risk reserve		524,376	524,376
Retained earnings		42,974,087	39,140,246
Total equity attributable to owners of the Company		98,273,846	91,993,286
Minority interests		10,701,259	10,341,935
Total equity		108,975,105	102,335,221
Total liabilities and equity		217,925,217	213,824,213
Legal representative:	Chief Financial Officer:	Accounting director:
Wang Wei	Ho Chit		Hu Xiaofei

– II-231 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CONSOLIDATED INCOME STATEMENT

Nine months ended September 30, 2025

		Nine months	ended
		September 30,
Items		2025	2024
		RMB’000	RMB’000
I.	Total revenue	225,260,982	206,860,993
	Including: Revenue	225,260,982	206,860,993
II.	Total cost of revenue	216,328,214	197,591,970
	Including: Cost of revenue	196,057,604	177,993,370
	Taxes and surcharges	547,126	487,663
	Selling and marketing expenses	2,773,627	2,238,312
	General and administrative expenses	13,972,053	13,515,430
	Research and development expenses	1,650,043	1,918,035
	Finance costs	1,327,761	1,439,160
	Including: Interest expenses	1,333,431	1,804,691
	Interest income	206,159	486,908
	Add: Other income	470,783	544,132
	Investment income (“-” indicating losses)	1,175,825	548,825
	Including: Investment income from
	associates and joint
	ventures	-29,100	-50,376
	Gains arising from changes in fair value
	(“-” indicating losses)	141,318	45,381
	Credit impairment losses (“-” indicating
	losses)	95,401	-239,153
	Asset impairment losses (“-” indicating
	losses)	-44,957	-32,519
	Gains on disposal of assets (“-” indicating
	losses)	-38,876	46,264

– II-232 –

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				Nine months	ended
				September	30,
Items				2025	2024
				RMB’000	RMB’000
III.	Operating profit *(“-” indicating losses)*			10,732,262	10,181,953
	Add: Non-operating income			282,954	226,263
	Less: Non-operating expenses			145,211	260,658
IV.	Total profit *(“-” indicating total losses)*			10,870,005	10,147,558
	Less: Income tax expenses			2,153,656	2,474,554
V.	Net	profit *(“-” indicating net loss)*		8,716,349	7,673,004
	(I)	Classified by continuity of operations
		1.	Net profit from continuing operations
			(“-” indicating net loss)	8,716,349	7,673,004
		2.	Net profit from discontinued
			operations (“-” indicating net loss)	–	–
	(II)	Classified by ownership of the equity
		1.	Net profit attributable to owners of the
			Company (“-” indicating net loss)	8,308,256	7,617,120
		2.	Minority interests (“-” indicating net
			loss)	408,093	55,884
VI.	Other		comprehensive income, net of tax	611,912	-1,303,654
	Attributable to owners of the Company, net of
	tax			238,919	-1,321,476
	(I)	Other comprehensive income which will
			not be reclassified subsequently to profit
			or loss	537,639	-1,337,092
		1.	Changes in fair value of investments
			in other equity instruments	537,639	-1,337,092
	(II)	Other comprehensive income which will
			be reclassified subsequently to profit or
			loss	-298,720	15,616
		1.	Other comprehensive income which
			will be transferred subsequently to
			profit or loss under the equity
			method	-11,252	-10,389
		2.	Cash flow hedge reserve	8,118	5,115
		3.	Exchange differences on translation of
			foreign currency financial
			statements	-295,586	20,890
	Attributable to minority interests, net of tax			372,993	17,822

– II-233 –

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			Nine months ended	Nine months ended
			September	30,
Items			2025	2024
			RMB’000	RMB’000
VII.	Total comprehensive income		9,328,261	6,369,350
	(I)	Attributable to owners of the Company	8,547,175	6,295,644
	(II)	Attributable to minority interests	781,086	73,706
VIII.	Earnings per share:
	(I)	Basic earnings per share (RMB)	1.67	1.58
	(II)	Diluted earnings per share (RMB)	1.67	1.58
Legal	representative: Chief Financial Officer:		Accounting	director:
	Wang Wei Ho Chit		Hu Xiaofei

– II-234 –

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CONSOLIDATED CASH FLOW STATEMENT

Nine months ended September 30, 2025

		Nine months	ended
		September 30,
Items		2025	2024
		RMB’000	RMB’000
I.	Cash flows from operating activities:
	Cash received from sales of goods or rendering	233,069,855	214,187,218
	of services
	Net decrease in balances with central bank and	359,802	472,460
	other banks
	Refund of taxes and levies	598,897	1,088,950
	Cash received relating to other operating	77,295,434	72,958,568
	activities
	Sub-total of operating cash inflows	311,323,988	288,707,196
	Cash paid for goods and services	170,774,710	152,707,705
	Net increase in customer loans and advances	90,204	128,489
	Net decrease in customer deposits and	711	1,334
	interbank deposits
	Cash paid to and on behalf of employees	27,236,359	25,847,040
	Payments of taxes and levies	6,348,994	4,857,884
	Cash paid relating to other operating activities	87,457,796	82,612,406
	Sub-total of operating cash outflows	291,908,774	266,154,858
	Net cash flows from operating activities	19,415,214	22,552,338

– II-235 –

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		Nine months	ended
		September	30,
Items		2025	2024
		RMB’000	RMB’000
II.	Cash flows from investing activities: Cash	251,294	398,867
	received from disposal of investments
	Cash received from returns on investments	550,020	598,658
	Net cash received from the disposal of fixed	149,997	237,257
	assets, intangible assets and other long-term
	assets
	Net cash received from the disposal of	1,909,311	150,653
	subsidiaries and other business units
	Cash received relating to other investing	72,255,072	55,211,564
	activities
	Sub-total of investing cash inflows	75,115,694	56,596,999
	Cash paid to acquire fixed assets, intangible	6,671,789	6,849,320
	assets, and other long-term assets
	Cash paid to acquire investments	1,566,703	86,778
	Net cash paid to acquire subsidiaries and other	21,844	636,543
	business units
	Cash paid relating to other investing activities	86,029,027	72,569,963
	Sub-total of investing cash outflows	94,289,363	80,142,604
	Net cash flows from investing activities	-19,173,669	-23,545,605
III.	Cash flows from financing activities:
	Cash received from capital contributions	2,988,115	32,929
	Including: Cash received from capital	46,081	32,929
	contributions by minority
	shareholders of subsidiaries
	Cash received from borrowings	24,001,914	30,687,274
	Cash received relating to other financing	279,179	13,376
	activities
	Sub-total of financing cash inflows	27,269,208	30,733,579

– II-236 –

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		Nine months	ended
		September	30,
Items		2025	2024
		RMB’000	RMB’000
	Cash repayments of borrowings	29,237,343	33,152,742
	Cash payments for distribution of dividends,	5,792,543	4,509,472
	profits or interest expenses
	Including: Dividends and profits paid by	449,504	282,790
	subsidiaries to minority
	shareholders
	Cash paid relating to other financing activities	6,615,285	11,234,999
	Sub-total of financing cash outflows	41,645,171	48,897,213
	Net cash flows from financing activities	-14,375,963	-18,163,634
IV.	Effect of foreign exchange rate changes on cash	43,470	2,828
	and cash equivalents
V.	Net increase in cash and cash equivalents	-14,090,948	-19,154,073
	Add: Cash and cash equivalents at the	32,646,055	40,448,308
	beginning of the period
VI.	Cash and cash equivalents at the end of the	18,555,107	21,294,235
	period

(II) Adjustments to Relevant items of the Financial Statements at the Beginning of the Year Against Initial Application of New Accounting Standards Since 2025

□ Applicable ✔ Not applicable

(III) Audit Report

Whether the Third Quarterly Report has been audited

□ Yes ✔ No

The Company’s Third Quarterly Report has not been audited.

– II-237 –

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MANAGEMENT DISCUSSION AND ANALYSIS OF S.F. HOLDING OF THE THREE YEARS ENDED DECEMBER 31, 2022, DECEMBER 31, 2023, DECEMBER 31, 2024 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2025

The following management discussion and analysis of the results of S.F. Holding is extracted from the annual reports of S.F. Holding for the years ended December 31, 2022, 2023 and 2024 and the quarterly report of S.F. Holding for the nine months ended June 30, 2025. It should be read in conjunction with the financial information of S.F. Holding for the years ended December 31, 2022, 2023 and 2024 and the nine months ended June 30, 2025 set forth in this section. The management discussion and analysis of the results of S.F. Holding was issued in English and the Chinese translated version is provided for information purposes only. In case of discrepancies between the two versions, the English version shall prevail.

The Directors wish to emphasise that the extracts reproduced below are not prepared for incorporation into this circular and the Group has not participated in their preparation. As such, the Directors do not express any view as to their truth, accuracy or completeness, and the Shareholders and investors should exercise caution and should not place undue reliance on such information.

– II-238 –

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(D) MANAGEMENT DISCUSSION AND ANALYSIS OF S.F. HOLDING FOR THE THREE YEARS ENDED DECEMBER 31, 2023

You should read the following discussion and analysis in conjunction with our audited consolidated financial statements included in the Accountant’s Report set out in Appendix I to this prospectus, together with the accompanying notes. Our financial information has been prepared in accordance with IFRS, which may differ in material aspects from generally accepted accounting principles in other jurisdictions.

The following discussion and analysis contain forward-looking statements that reflect our current views with respect to future events and financial performance that involve risks and uncertainties. These statements are based on assumptions and analysis made by us in light of our experience and perception of historical events, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual outcomes and developments will meet our expectations and predictions depends on a number of risks and uncertainties, many of which we cannot control or foresee. In evaluating our business, you should carefully consider all of the information provided in this prospectus, including the sections headed “Risk Factors” and “Business.”

Unless the context otherwise requires, financial information described in this section is described on a consolidated basis.

OVERVIEW

We are a leading global integrated logistics service provider, the largest player in China and Asia, and the fourth largest player globally, in terms of revenue in 2023, according to Frost & Sullivan. We are a Fortune Global 500 company with market leadership in five logistics sub-segments in China and four in Asia, offering a complete range of logistics services including express, freight, cold chain, intra-city on-demand, supply chain solutions and international logistics services.

We have a premium brand that is widely recognized for top-notch services and is a commonly used verb in Chinese, with “ Let me SF this to you ” having become synonymous with “ Let me express mail this to you. ” We were the only logistics company recognized as one of the Top Five Most Admired Chinese Companies by Fortune Magazine in 2024. As of June 30, 2024, we had an extensive global delivery network covering 202 countries and regions, supported by 99 aircraft and over 186,000 vehicles, the largest air and ground delivery fleet in Asia, according to Frost & Sullivan. We are also a technology-driven company with 4,199 patents and patent applications as of June 30, 2024, and we continuously leverage proprietary technologies to deliver innovative solutions and execution excellence. We had approximately 2.2 million customers with active credit accounts and approximately 699 million retail customers as of June 30, 2024, both of which were the highest among all logistics service providers in Asia, according to Frost & Sullivan.

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We have achieved high-quality and sustainable growth during the Track Record Period. Our revenue increased from RMB207.2 billion in 2021 to RMB258.4 billion in 2023, representing a CAGR of 11.7%; our revenue also increased by 8.1% from RMB124.4 billion for the six months ended June 30, 2023 to RMB134.4 billion for the same period in 2024. Our profit for the year attributable to owners of our Company was RMB4.7 billion, RMB6.2 billion and RMB8.2 billion in 2021, 2022 and 2023, respectively, representing a CAGR of 31.9% from 2021; our profit for the period attributable to owners of our Company also increased by 15.1% from RMB4.2 billion for the six months ended June 30, 2023 to RMB4.8 billion for the same period in 2024. Our EBITDA (non-IFRS measure) increased from RMB21.8 billion in 2021 to RMB29.4 billion in 2023, representing a CAGR of 16.3%; our EBITDA (non-IFRS measure) also increased by 8.2% from RMB14.7 billion for the six months ended June 30, 2023 to RMB15.9 billion for the same period in 2024. For details, see “— Non-IFRS Measures.”

MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our results of operations have been, and are expected to continue to be, affected by a number of factors, including but not limited to the following:

Macroeconomic and Other Factors That Affect Logistics Markets in China, Asia and Globally

As an integrated logistics service provider offering a full spectrum of logistics services to business customers in various industries and to retail customers, our results of operations depend on the continuous development of logistics markets in China, Asia and globally. The prospects of regional and global logistics markets are subject to the influence of a number of macroeconomic and other factors, such as regional or global economic conditions, level of economic activities, purchasing power and disposable income of consumers, progress of urbanization, development of public infrastructure, inflation, currency and interest rate fluctuations, development and deployment of technology, government policies, as well as regional and international political uncertainties and other force majeure events. In particular, regional and global logistics markets, and hence our results of operations, could be highly sensitive to certain factors, such as: (i) fluctuating levels of economic conditions and manufacturing activities in China, Asia and globally, as well as cross-border commerce, leading to changes in demand for logistics services; (ii) evolving customer demands and expectations for logistics services, as well as our ability to meet these demands and expectations; (iii) changing industry trends including emergence of new e-commerce sales channels and marketing formats; (iv) changes in labor supply and cost; and (v) fluctuations in transportation costs, as a result of various factors such as changes in fuel prices and air and sea freight rates.

We anticipate further growth in the logistics industry. According to Frost & Sullivan, total global logistics spending was US$11.1 trillion in 2023, and is expected to reach US$13.7 trillion in 2028, representing a significant global market opportunity. Within the global logistics market, Asia is the largest and fastest-growing market, representing 45.5% of global logistics spending in 2023, and is expected to grow at a CAGR of 5.5% from 2023 to 2028.

– II-240 –

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Given our leading market position, premium service quality, broad customer base, business model, synergistic network infrastructure and advanced technologies, we believe we are resilient against changes in macroeconomic conditions, and are well positioned to capture the most attractive growth opportunities in the logistics markets in Asia and continue to expand globally.

Our Ability to Expand Our Customer Base, and to Retain and Grow the Wallet Share of Our Existing Customers

Our business growth is driven by our ability to expand our customer base, and to retain and grow the wallet share of our existing customer base by increasing penetration of existing services and cross-selling new services.

Our future growth will depend on our ability to expand our customer base. We have accumulated an extensive customer base spread across major industry verticals in Asia. We have developed industry-tailored logistics services to address the specific needs of industry verticals, and are continuously expanding into emerging industry verticals. We believe our ability to innovate and upgrade our full-spectrum services capabilities, so as to provide tailored services to meet the needs of our customers, is a key factor for our success. With the emergence and development of various e-commerce platforms, as well as the resulting significant increase in demand for third-party express and other logistics services, we as an independent third party logistics service provider are expanding our customer base and gaining market share in e-commerce logistics. The number of our customers with active credit accounts increased from approximately 1.6 million as of December 31, 2021 to approximately 2.2 million as of June 30, 2024. We also endeavor to meet the ever-changing expectations of our retail customers, and provide both easy online accesses for, and a wide range of offline services to, our retail customers. The number of our retail customers increased from approximately 491 million as of December 31, 2021 to approximately 699 million as of June 30, 2024. Empowered by our existing capabilities and resources, we believe we are well-positioned to further expand our operations along the industry value chain, both in Asia and globally, and hence to grow our customer base.

In addition, we must continually meet the demand of our existing customer base. We believe our services are fast, reliable and customer-centric, which empower us to retain and grow the wallet share of our existing customer base. We achieve business growth by, among other things, cross-selling other logistics services and solutions, for example, from procurement to distribution and to cross-border solutions. As our business customers continue to grow and their demand for logistics services increases in scale and complexity, we are able to increase the penetration of existing services and cross-sell new services, and thus deepen our wallet share among these customers. In 2023, 64% of our business customers used more than one of our services. Attributable to our ability to provide fast, reliable and customer-centric services, we also believe we are able to meet our customers’ demand, and maintain premium pricing for our time-definite and economy express services.

– II-241 –

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Our Ability to Maintain and Expand Our Logistics Infrastructure and Networks

Our results of operations depend in part on our ability to effectively maintain and expand our logistics infrastructure and networks. Leveraging our synergistic aviation, ground and information networks, our multi-network integration lays the foundation for our comprehensive logistics services capabilities. As of June 30, 2024, our multi-network integration featured, among other things: (i) an aviation network with 99 all-cargo aircraft, consisting of 87 self-operated aircraft and 12 chartered-in aircraft; (ii) a ground network enabled by our ground fleet consisting of over 86,000 line-haul and short-haul trucks and over 100,000 first and last-mile delivery vehicles globally, as well as numerous service outlets, sorting centers and warehouses; and (iii) an information network that connects our aviation and ground networks through technology. With our efficient, reliable and synergistic networks, we swiftly and economically enter new segments through weaving in more interconnections on top of our already highly dense networks, while ensuring premium service quality at commercially reasonable costs.

We endeavor to further strengthen our services capabilities through enhancing network integration and coverage, as well as improving our network infrastructure. For instance, we have further complemented our aviation network with our investment in the Ezhou cargo hub, which is expected to serve as the center for our aviation network. We are also committed to enhancing our information network, further empowering us to offer intelligent transportation solutions, smart terminal arrangements, and accurate forecasting and scheduling, hence ensuring our capabilities to provide precise and speedy logistics services. We believe our consistent efforts to maintain and expand our logistics infrastructure and networks will lead to sustainable, profitable growth.

Our Ability to Manage and Further Improve Our Operational Efficiency

Our results of operations also depend in part on our ability to manage and further improve our operational efficiency. As the leading Asia-based integrated logistics service provider with a directly operated model, we provide independent, third-party logistics services to our customers. As a result of our business model, we are able to exert full control over our operations and assets, which in turn allow us to manage and deploy our services capabilities efficiently and achieve economies of scale. For example, we efficiently coordinated the deployment and use of our service outlets, sorting centers and warehouses, and hence improved utilization of such service outlets, sorting centers and warehouses while controlling costs. Our directly operated model also empowers us to swiftly adapt our existing capabilities and resources to changing market demand and expectations, enabling us to quickly seize emerging business opportunities in a cost-effective manner.

In addition, we are a technology-driven company. We believe our operational efficiency also benefits from our technologies. For instance, our technology platform utilizes proprietary techniques to manage and automate end-to-end logistics processes. It enables us to monitor in real-time the efficiency and utilization of our networks, enabling us to better plan and budget our capital investments and realize operational efficiencies. We have also developed a proprietary and comprehensive digital toolset to support the

– II-242 –

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delivery process performed by our couriers. Moreover, we have been committed to the digital transformation of our business operations and administrative routines, with a view to further improving our cost efficiency. We believe our directly operated model, as well as the continual investment in, and adoption of technologies, will empower us to achieve optimal operational efficiency in the long run.

Our Ability to Execute Acquisitions and Investments and Successful Integration

Besides the organic growth of our business, we also seek further expansion by strategic acquisitions and investments. During the Track Record Period, we expanded our service offerings and customer base through acquisitions and investments. We believe these acquisitions and investments create synergies with our existing businesses and enable us to operate in a more efficient manner, provided that we are able to successfully integrate the acquisitions and investments into our existing business. In addition, during the Track Record Period, we invested in and, in due course, may continue to invest in, non-controlling interests in companies along the industry value chain with synergies to our core business. Such acquisitions and investments may impact our results of operations and financial condition, depending on the consideration involved and the performance of target companies in which we invest or that we acquire.

BASIS OF PREPARATION

Our historical financial information has been prepared in accordance with the International Financial Reporting Standards issued by the International Accounting Standards Board (“ IFRS Accounting Standards ”). The historical financial information has been prepared on a historical cost basis, except for financial assets at fair value through other comprehensive income and financial assets and financial liabilities at fair value through profit or loss, which are carried at fair value.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Some of our accounting policies require us to apply estimates and assumptions as well as complex judgments relating to accounting items. The estimates and assumptions we use and the judgments we make in applying our accounting policies have a significant impact on our financial position and results of operations. Our management continually evaluates such estimates, assumptions and judgments based on experience and other factors, including the expectation of future events that are believed to be reasonable under the circumstances. There has not been any material deviation between our management’s estimates or assumptions and actual results, and we have not made any material changes to these estimates or assumptions during the Track Record Period. We do not expect any material changes in these estimates and assumptions in the foreseeable future.

Set forth below are discussions of the accounting policies that we believe are of critical importance to us or involve the most significant estimates, assumptions and judgments used in the preparation of our financial statements. Other material accounting policies, critical estimates, assumptions and judgments, which are important for understanding our financial condition and results of operations, are set forth in detail in Notes 2 and 4 to the Accountant’s Report in Appendix I to this prospectus.

– II-243 –

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Revenue Recognition

We recognize revenue when or as the control of the goods or services is transferred to a customer. Depending on the terms of the contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time. Control of the goods and services is transferred over time if our performance:

provides all of the benefits received and consumed simultaneously by the customer;
creates or enhances an asset that the customer controls as we perform; or
does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date.

The progress towards complete satisfaction of the performance obligation is measured based on one of the following methods that best depict our performance in satisfying the performance obligation:

direct measurements of the value we transferred to the customer; or
our efforts or inputs to the satisfaction of the performance obligation relative to the total expected efforts or inputs.

Incremental costs incurred to obtain a contract, if recoverable, are capitalized as contract assets and subsequently amortized when the related revenue is recognized.

Revenue From Logistics and Freight Forwarding Services

We derive revenue from provision of logistics and freight forwarding services, including express and freight delivery services (comprising, time-definite express services, economy express services, freight delivery services, and cold chain and pharmaceuticals logistics services), intra-city on-demand delivery services, and supply chain and international services.

We recognize revenue based on the progress of the services performed within the relevant period, which is determined based on proportion of costs incurred to date to the estimated total costs or days spent to the estimated total days. As of the end of the relevant reporting period, we re-estimate the progress of the services performed to reflect the actual status of contract performance.

– II-244 –

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When we recognize revenue based on the progress of the services performed, the amount with unconditional right to consideration we obtained is recognized as trade receivables, and the rest is recognized as contract assets. Meanwhile, provision for trade receivables and contract assets are recognized on the basis of expected credit losses. If the contract consideration received or receivable exceeds the progress of the services performed, the excess portion will be recognized as contract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis.

Contract costs include costs to fulfil a contract and costs to obtain a contract. Costs incurred for provision of the aforesaid services are recognized as costs to fulfil a contract, which is carried forward to the cost of revenue when revenue recognized based on the progress of the services performed. Incremental costs we incurred for the acquisition of the aforesaid services contract are recognized as the costs to obtain a contract. For the costs to obtain a contract with an amortization period of less than one year, the costs are charged to profit or loss when incurred. For the costs to obtain a contract with an amortization period more than one year, the costs are charged in the profit or loss on the same basis as revenue of rendering of services recognized under the relevant contract, as described above. If the carrying amount of the contract costs is higher than the remaining consideration expected to be obtained by rendering the services net of the estimated cost to be incurred, we make provision for impairment on the excess portion and recognize it as asset impairment losses. As of the end of the relevant reporting period, based on whether the amortization period of the costs to fulfil a contract is more than one year when initially recognized, the amount of our costs to fulfil a contract net of related provision for asset impairment is presented as inventories or other non-current assets. For costs to obtain a contract with an amortization period of more than one year at the initial recognition, the amount net of related provision for asset impairment is presented as other non-current assets.

Sales of Goods

Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract or we have objective evidence that all criteria for acceptance have been satisfied.

Revenue from these sales is recognized based on the price specified in the contract. As our sales transactions are made in accordance with our credit policies allowing credit terms that normally range from 30 to 90 days, which are consistent with market practices, no financing element is deemed present in our sales transactions.

A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

– II-245 –

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Other Services

Our services also include telecommunication services, repairment services, research and development and technical services and other services.

With regard to certain maintenance services, research and development and technical services, we recognize revenue at a point in time when the services are delivered to customers. For other services, we recognize revenue based on the progress of the services performed within period, which is determined based on proportion of costs incurred to date to the estimated total costs as of the date of end of the reporting period.

Goodwill

Goodwill is initially measured as the excess of the consideration transferred, amount of any non-controlling interest in the acquired entity, and acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired.

Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

We determine whether goodwill is impaired at least on an annual basis. The recoverable amount of goodwill is determined at higher of fair value less costs of disposal and value in use amount. The calculations of value in use amount require use of estimates. The cash flow projections used to determine the value in use of a CGU is based on significant assumptions, such as revenue growth rate, net profit margins before tax and interests, and pre-tax discount rate applied to the projected cash flows. These assumptions may be affected by unexpected changes in future market or economic conditions.

Impairment Tests

Our carrying amount of goodwill is allocated to several groups of CGUs, including, among others, Kerry Logistics CGU, acquired by our Group in September 2021, and Fenghao Supply Chain CGU, acquired by our Group in February 2019. The following table sets out the key assumptions used for value in use calculations of Kerry Logistics CGU and Fenghao Supply Chain CGU. For details, see Note 17(b) to the Accountant’s Report in Appendix I to this prospectus.

– II-246 –

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					Six months
					ended
	Year ended December		31,		June 30,
	2021	2022		2023	2024
Revenue growth rate over
the forecast period	-1.90%~14.20%	-16.50%~17.00%	2.50%~16.64%		2.50%~29.69%
Terminal revenue growth
rate	3.00%	2.00%~3.00%		2.00%~2.50%	2.00%~2.50%
Net profit margin before tax
and interests	2.00%~6.22%	-0.47%~7.16%	-0.20%~6.60%		-0.83%~6.61%
Pre-tax discount rate	13.37%	11.71%~14.10%	11.90%~14.00%		11.30%~13.45%

For the year ended December 31, 2021, the recoverable amount of Kerry Logistics CGU was determined based on the closing stock price of Kerry Logistics. For the years ended December 31, 2022 and 2023 and the six months ended June 30, 2024, the recoverable amount of Kerry Logistics CGU was determined based on discounted cash flow method.

Various factors were taken into consideration in determining the appropriate terminal revenue growth rate to be used over the forecast period. These factors include, but are not limited to, the long-term inflation rates of the geographic markets where the CGUs operate. The terminal revenue growth rate does not exceed the long-term average growth rate for the relevant geographic market where we operate.

We determined budgeted profit margins and revenue growth rates based on our historical performance and our expectations of the relevant market(s).

The pre-tax discount rates reflected the current market assessment of the time value of money, and the risks specific to the business of the relevant CGUs.

Impact of Possible Changes in Key Assumptions

The recoverable amount of Kerry Logistics CGU was estimated to exceed its carrying amount as of December 31, 2022 and 2023 and June 30, 2024 by RMB4,279 million, RMB1,375 million and RMB456 million, respectively.

The recoverable amount of Fenghao Supply Chain CGU was estimated to exceed its carrying amount as of December 31, 2021, 2022 and 2023 and June 30, 2024 by RMB300 million, RMB267 million, RMB411 million and RMB1,293 million, respectively.

We have considered and assessed the reasonably possible changes for the key assumptions, and have not identified any instances that could cause the carrying amount of each CGU to exceed its respective recoverable amount.

The recoverable amount of each CGU would equal to the respective carrying amount if each key assumption was to change as follows with all other variables held constant:

– II-247 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Kerry Logistics CGU

			As of
	As of December 31,		June 30,
	2022	2023	2024
Revenue growth rate over the forecast period	-19.56%~8.97%	8.98%~12.05%	5.69%~29.08%
Terminal revenue growth rate	0.34%	1.50%	1.86%
Net profit margin before tax and interests	4.88%~5.03%	4.76%~5.41%	5.03%~5.53%
Pre-tax discount rate	15.56%	14.48%	13.60%

Fenghao Supply Chain CGU

				As of
		As of December 31,		June 30,
	2021	2022	2023	2024
Revenue growth rate over
the forecast period	-2.68%~13.36%	2.40%~16.57%	2.02%~16.19%	-0.88%~11.88%
Terminal revenue growth
rate	2.49%	2.65%	1.89%	0.28%
Net profit margin before tax
and interests	2.47%~5.98%	-0.69%~6.93%	-0.55%~6.25%	-2.82%~5.58%
Pre-tax discount rate	13.82%	11.99%	12.41%	12.99%

Current and Deferred Income Tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where our Company and our subsidiaries operate and generate taxable income. Our management periodically evaluate positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and consider whether it is probable that a taxation authority will accept an uncertain tax treatment. We measure our tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

– II-248 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

We are subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact current income tax and deferred income tax in the period in which such determination is made.

Deferred tax assets are recognized for unused tax losses and deductible temporary difference to the extent that it is probable that taxable profit will be available against which the losses and deductible temporary difference, and the carry forward of unused tax credits and unused tax losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies. To determine the future taxable profits, reference was made to the latest available profit forecast. The key assumptions adopted in the future taxable profit forecast include revenue growth rates and gross margin rates.

Measurement of the Expected Credit Losses

For financial assets and contract assets at amortized cost, we calculate expected credit losses based on exposure at default and expected credit loss rates.

We refer to internal historical information, such as credit losses, and consider the impact of historical credit loss experience according to the current situation and forward-looking information to determine expected credit loss rates. Our management also consider the customer’s credit status, credit history, operating status as well as collateral, the guarantee ability of the guarantor and other information.

We monitor and review relevant assumptions about expected credit losses regularly. Where there is a difference between the actual bad debts and the original estimate, such difference will affect our provision for bad debts of the above assets in the future period.

– II-249 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Estimated Impairment of Long-Term Assets (Other Than Goodwill)

We test whether property, plant and equipment, right-of-use assets, investment properties, intangible assets (other than goodwill), and other non-current assets have been impaired in accordance with the accounting policy stated in Note 4.1 to the Accountant’s Report in Appendix I to this prospectus. The recoverable amount of the cash-generating unit has been determined based on the higher of its value in use and its fair value less costs of disposal. The cash flow projections used to determine the value in use of a cash-generating unit is based on significant assumptions, such as revenue growth rate, long term growth rate, gross margin rates, and discount rate applied to the projected cash flows. These assumptions may be affected by unexpected changes in future market or economic conditions.

Assessment of the Fair Value of Identifiable Net Assets in Acquisition Transactions and Goodwill Recognition

We recognize identifiable net assets acquired in business combinations involving enterprises not under common control at the fair value at the acquisition date, and if the combination cost exceeds our interest in the fair value of the acquiree’s identifiable net assets, the difference is recognized as goodwill.

The assessment of the fair value of identifiable assets and liabilities involves critical estimates and judgements from management, in particular, the identification of intangible assets and the evaluation of their fair values, thereby affecting the recognition of goodwill. The assessment of the fair value of identifiable net assets on the acquisition date includes the identification of various kinds of assets, the selection of valuation methods, and the forecast of future cash flows, which involves critical estimates and judgements about key assumptions including revenue growth rate, gross profit rate and discount rate. Different inputs used in these key assumptions may lead to significant differences between fair value estimates.

Level 3 Fair Value Measurement

In respect of the level 3 fair value measurement of our financial assets, with reference to the guidance under the “Guidance Note on Directors’ Duties in the Context of Valuations in Corporate Transactions” issued by the SFC in May 2017 (the “ Guidance ”) applicable to directors of companies listed on the Stock Exchange, our Directors adopted the following procedures: (i) selected qualified finance personnel with adequate knowledge and conducted valuation on the financial assets without readily determinable fair value; (ii) carefully considered available information in assessing the financial data and assumptions including but not limited to recent transaction price, discount for lack of marketability, expected rate of return, and macroeconomic and industry conditions; (iii) reviewed the terms of the underlying agreements of our financial assets, as well as the fair value measurement reports prepared by our qualified finance personnel. Based on the above procedures, our Directors are of the view that the level 3 fair value measurement of our financial assets is fair and reasonable and our financial statements are properly prepared.

– II-250 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Details of the fair value measurement of our financial assets, particularly the fair value hierarchy, the valuation techniques and key inputs, including significant unobservable inputs, the relationship of unobservable inputs to fair value are disclosed in Note 3.3 to the Accountant’s Report in Appendix I to this prospectus, which was reported on by the Reporting Accountant in accordance with Hong Kong Standard on Investment Circular Reporting Engagement 200 “Accountants’ Reports on Historical Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants. The Reporting Accountant’s opinion on our historical financial information, as a whole, for the Track Record Period is set out on I-1 to I-3 in the Accountant’s Report in Appendix I to this prospectus.

The Joint Sponsors have conducted the following independent due diligence work in relation to level 3 fair value measurement: (i) reviewed the relevant notes included in the Accountant’s Report in Appendix I to this prospectus; (ii) discussed with us on the primary factors that we take into account, key assumptions and methodologies adopted for valuation of the level 3 financial assets, and the internal control measures we undertake for reviewing and approving the relevant valuation; and (iii) discussed with the Reporting Accountant in respect of the work performed in relation to the valuation of the level 3 financial assets for the purpose of reporting on the historical financial information of our Group for the Track Record Period as a whole. Based on the above due diligence and having considered the work done by the Directors and the Reporting Accountant as stated above, nothing has come to the attention of the Joint Sponsors that would cause the Joint Sponsors to question the valuation analysis performed by us.

– II-251 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

The following table sets forth a summary of our consolidated statements of profit or loss with line items in absolute amounts and as percentages of our revenue for the years/periods indicated, which has been derived from the Accountant’s Report in Appendix I to this prospectus:

Revenue Cost of revenue Gross profit Selling and marketing expenses General and administrative expenses Research and development expenses Net (impairment losses)/reversal of impairment losses on financial assets and contract assets Other income Other gains, net Operating profit Finance income Finance costs Share of profit/(loss) of associates and joint ventures, net Impairment provision for investments in associates and joint ventures Profit before income tax Income tax expense Profit for the year/period. Attributable to: Owners of our Company Non-controlling interests	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 207,186,647 100.0 267,490,414 100.0 258,409,403 100.0 (181,409,103) (87.6) (234,478,008) (87.7) (225,775,678) (87.4) 25,777,544 12.4 33,012,406 12.3 32,633,725 12.6 (2,837,899) (1.4) (2,784,114) (1.0) (2,991,589) (1.2) (15,115,275) (7.3) (17,694,719) (6.6) (17,766,049) (6.9) (2,154,839) (1.0) (2,222,865) (0.8) (2,285,314) (0.9) (579,851) (0.3) (825,170) (0.3) 33,480 0.0 2,089,534 1.0 2,494,659 0.9 2,281,202 0.9 1,956,535 1.0 831,262 0.3 408,474 0.3 9,135,749 4.4 12,811,459 4.8 12,313,929 4.8 187,794 0.1 345,662 0.1 633,373 0.2 (1,562,963) (0.8) (2,054,360) (0.8) (2,269,700) (0.9) 42,660 0.0 7,549 0.0 (67,190) (0.0) (52,384) (0.0) (72,474) (0.0) (123,907) (0.0) 7,750,856 3.7 11,037,836 4.1 10,486,505 4.1 (3,368,762) (1.6) (3,980,922) (1.5) (2,574,896) (1.0) 4,382,094 2.1 7,056,914 2.6 7,911,609 3.1 4,731,979 2.3 6,227,058 2.3 8,234,493 3.2 (349,885) (0.2) 829,856 0.3 (322,884) (0.1) 4,382,094 2.1 7,056,914 2.6 7,911,609 3.1	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 124,365,598 100.0 134,409,720 100.0 (107,767,733) (86.7) (116,096,281) (86.4) 16,597,865 13.3 18,313,439 13.6 (1,392,755) (1.1) (1,470,892) (1.1) (8,999,978) (7.2) (9,049,272) (6.7) (1,174,970) (0.9) (1,301,455) (1.0) 66,022 0.1 (159,872) (0.1) 880,404 0.7 572,750 0.4 257,072 0.2 293,793 0.2 6,233,660 5.1 7,198,491 5.3 292,849 0.2 415,064 0.3 (1,092,673) (0.9) (1,230,918) (0.9) (13,486) (0.0) (62,580) (0.0) – – – – 5,420,350 4.4 6,320,057 4.7 (1,526,110) (1.3) (1,559,135) (1.2) 3,894,240 3.1 4,760,922 3.5 4,176,282 3.4 4,806,714 3.6 (282,042) (0.3) (45,792) (0.1) 3,894,240 3.1 4,760,922 3.5

– II-252 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Non-IFRS Measures

To supplement our consolidated financial statements which are presented in accordance with IFRS, we also use certain non-IFRS measures, namely, EBITDA (non-IFRS measure) and EBITDA margin (non-IFRS measure), as additional financial metrics. These non-IFRS measures are not required by or presented in accordance with IFRS.

We believe that these non-IFRS measures facilitate comparisons of our operating performance by eliminating potential impacts of certain items listed below. We also believe that such non-IFRS measures present useful information in understanding and evaluating our consolidated results of operations in the same manner as they help our management. However, our presentation of such non-IFRS measures may not be comparable to similarly titled measures presented by other companies. The use of these non-IFRS measures has limitations as an analytical tool, and you should not consider it in isolation from, or as substitute for analysis of, our results of operations or financial condition as reported under IFRS.

The following table reconciles EBITDA (non-IFRS measure) to our profit for the year/period, presented in accordance with IFRS, for the years/periods indicated:

Profit for the year/period Add: Depreciation and amortization Finance costs, net Income tax expense EBITDA (non-IFRS measure)*	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 4,382,094 7,056,914 7,911,609 12,654,902 16,241,432 17,319,107 1,375,169 1,708,698 1,636,327 3,368,762 3,980,922 2,574,896 21,780,927 28,987,966 29,441,939	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (unaudited) 3,894,240 4,760,922 8,498,107 8,789,650 799,824 815,854 1,526,110 1,559,135 14,718,281 15,925,561	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (unaudited) 3,894,240 4,760,922 8,498,107 8,789,650 799,824 815,854 1,526,110 1,559,135 14,718,281 15,925,561
			15,925,561

Note:

Depreciation and amortization equals the sum of depreciation of right-of-use assets and depreciation and amortization (excluding right-of-use assets).

EBITDA margin (non-IFRS measure) represents our EBITDA (non-IFRS measure) for a relevant year divided by revenue for the same year, expressed as a percentage. Our EBITDA margin (non-IFRS measure) was 10.5%, 10.8%, 11.4%, 11.8% and 11.9% for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, respectively.

– II-253 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Revenue

During the Track Record Period, we generated revenue primarily from our (i) express and freight delivery segment, (ii) intra-city on-demand delivery segment, and (iii) supply chain and international segment. The following table sets forth a by-segment breakdown of our revenue, in absolute amounts and as percentages of our total revenue, for the years/periods indicated:

Express and freight delivery segment(1) Time-definite express services Economy express services Freight delivery services Cold chain and pharmaceutical logistics services Others(2) Intra-city on-demand delivery segment Intra-city on-demand delivery services Others(2) Supply chain and international segment Supply chain and international services Others(2) Undistributed units(3) Total	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 160,675,510 77.6 169,764,860 63.5 186,890,137 72.4 98,961,735 47.8 105,696,512 39.5 115,456,067 44.7 25,428,003 12.3 25,551,306 9.6 25,051,548 9.7 27,290,961 13.2 27,917,012 10.4 33,078,821 12.8 7,802,610 3.8 8,612,665 3.2 10,312,988 4.0 1,192,201 0.5 1,987,365 0.8 2,990,713 1.2 5,117,905 2.5 6,567,057 2.4 7,371,250 2.8 5,003,156 2.4 6,436,102 2.4 7,249,500 2.8 114,749 0.1 130,955 0.0 121,750 0.0 39,979,632 19.3 89,916,599 33.6 62,859,302 24.3 39,203,772 18.9 87,866,143 32.8 59,978,741 23.2 775,860 0.4 2,050,456 0.8 2,880,561 1.1 1,413,600 0.6 1,241,898 0.5 1,288,714 0.5 207,186,647 100.0 267,490,414 100.0 258,409,403 100.0	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 90,058,986 72.5 96,820,175 72.1 56,069,720 45.1 59,185,770 44.0 12,129,430 9.8 13,254,012 9.9 15,120,722 12.2 17,554,101 13.1 5,338,545 4.3 5,062,524 3.8 1,400,569 1.1 1,763,768 1.3 3,406,837 2.8 4,022,952 2.9 3,339,291 2.7 3,956,020 2.9 67,546 0.1 66,932 0.0 30,283,063 24.3 32,914,104 24.5 28,857,391 23.2 31,195,538 23.2 1,425,672 1.1 1,718,566 1.3 616,712 0.4 652,489 0.5 124,365,598 100.0 134,409,720 100.0

Notes:

(1) We adjusted our reportable segments in 2023 by merging two segments, previously named as “express delivery segment” and “freight delivery segment,” into “express and freight delivery segment.” As a result, our segment information for the years ended December 31, 2021 and 2022 has been restated, see Note 5 to the Accountant’s Report in Appendix I to this prospectus.
(2) Others primarily represents our ancillary non-logistics services, such as sales of goods, provided under the banner of the relevant segment. Primarily incidental to our comprehensive supply chain solutions, we at times provided, as per our key accounts’ requests, certain raw materials and machineries.
(3) Undistributed units primarily include our non-principal businesses, such as leasing and provision of technology services.

– II-254 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Our express and freight delivery segment mainly comprises time-definite express, economy express, freight delivery and cold chain and pharmaceutical logistics services. Increases in revenue from our express and freight delivery segment during the Track Record Period were primarily driven by high-quality growth in each of the sub-segments, while we continued improving the competitiveness of our services, including but not limited to our service quality, as well as optimizing our product mix.

We provide intra-city on-demand delivery for merchants and consumers. Increases in revenue from our intra-city on-demand delivery segment during the Track Record Period were primarily driven by the growth of high-value orders resulting from further diversification of and upgrades to our service offerings to cover more service scenarios, and further expansion of our services network to cover lower-tier cities, counties and districts in China.

Our supply chain and international segment primarily consists of supply chain services, international express services and international freight forwarding services. Revenue from our supply chain and international segment fluctuated during the Track Record Period, primarily reflecting (i) our consolidation of Kerry Logistics since September 2021, as well as the organic growth of our self-developed supply chain and international segment, and (ii) fluctuations in the market demand for, and the fee rates of, international sea and air freight.

The following table sets forth a breakdown of our revenue by geographical area, in absolute amounts and as percentages of our total revenue, for the years/periods indicated:

Within mainland China(1) Hong Kong, Macau, Taiwan(2) Other international(3) Total	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 189,029,359 91.2 208,562,879 78.0 223,510,607 86.5 5,080,415 2.5 10,389,782 3.9 9,134,850 3.5 13,076,873 6.3 48,537,753 18.1 25,763,946 10.0 207,186,647 100.0 267,490,414 100.0 258,409,403 100.0	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 107,339,757 86.3 115,996,449 86.3 4,334,903 3.5 4,512,024 3.4 12,690,938 10.2 13,901,247 10.3 124,365,598 100.0 134,409,720 100.0

Notes:

(1) Revenue from our operations within mainland China;
(2) Revenue from our operations within Hong Kong, Macau and Taiwan regions;
(3) Revenue from our operations in other overseas markets; such revenue was primarily derived from our supply chain and international segment.

– II-255 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Cost of Revenue

Our cost of revenue primarily consists of labor costs (comprising our employee benefit expenses and labor outsourcing costs), transportation costs, and depreciation and amortization.

The following table sets forth a breakdown of our cost of revenue by nature, in absolute amounts and as percentages of total cost of revenue, for the years/periods indicated:

Labor costs Employee benefit expenses Labor outsourcing costs Transportation costs Depreciation and amortization Others Total	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 83,576,212 46.1 91,585,902 39.1 102,785,139 45.5 13,622,676 7.5 15,222,082 6.5 15,683,015 6.9 69,953,536 38.6 76,363,820 32.6 87,102,124 38.6 70,854,194 39.1 106,844,961 45.6 82,930,208 36.7 11,112,275 6.1 14,327,602 6.1 15,202,588 6.7 15,866,422 8.7 21,719,543 9.2 24,857,743 11.1 181,409,103 100.0 234,478,008 100.0 225,775,678 100.0	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 49,141,500 45.6 53,523,463 46.1 7,843,962 7.3 7,832,687 6.7 41,297,538 38.3 45,690,776 39.4 39,307,703 36.5 42,765,854 36.8 7,498,720 7.0 7,663,668 6.6 11,819,810 10.9 12,143,296 10.5 107,767,733 100.0 116,096,281 100.0

Our labor costs comprise (i) employee benefit expenses, representing employee benefits in relation to couriers and other operational staff employed by us, and (ii) labor outsourcing costs, representing expenses charged by service providers, mainly relating to first-mile pick-up and last-mile delivery services provided to us.

The sensitivity analysis below has been determined based on a 1.0% increase/decrease in our labor costs, categorized into employee benefit expenses and labor outsourcing costs. 1.0% is the sensitivity rate used and represents our management’s assessment of the reasonably possible change in our labor costs. A positive (negative) number below indicates an increase/(decrease) in our gross profit.

For the years ended December 31, 2021, 2022 and 2023 and six months ended June 30, 2023 and 2024, if our labor costs increase or decrease by 1.0%, our gross profit would decrease or increase by approximately RMB835.8 million, RMB915.9 million, RMB1,027.9 million, RMB491.4 million and RMB535.2 million, respectively.

Our transportation costs comprise (i) transportation expenses, primarily in relation to fuel costs, road and bridge tolls, as well as sea freight, air freight and rail freight charges, and (ii) transportation outsourcing costs, representing expenses charged by outsourced transportation service providers, mainly relating to certain line-haul and short-haul transportations.

– II-256 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Depreciation and amortization categorized under cost of revenue are primarily in relation to freehold land and buildings, aircraft, aircraft engines, rotables and high-value maintenance, machinery and equipment, as well as transportation vehicles.

Gross Profit and Gross Profit Margin

Our gross profit represents our revenue less our cost of revenue. Our gross profit margin represents our gross profit divided by our revenue, expressed as a percentage. Despite the continued impact of challenging market conditions, our gross profit margin remained relatively stable at 12.4% and 12.3% in 2021 and 2022, respectively, and increased to 12.6% in 2023, primarily driven by (i) our multi-network integration, which allowed us to improve synergy across our business segments and achieve better economies of scale, and (ii) our continuous pursuit of lean management. Mainly driven by the same reasons set forth above, our gross profit margin also increased from 13.3% for the six months ended June 30, 2023 to 13.6% for the same period in 2024.

Selling and Marketing Expenses

Our selling and marketing expenses primarily include: (i) labor costs, comprising employee benefit expenses relating to selling and marketing staff employed by us, and labor outsourcing costs relating to call center outsourcing; (ii) depreciation and amortization, primarily representing amortization of customer relationships acquired in relation to our acquisitions of subsidiaries; and (iii) marketing expenses.

The following table sets forth a breakdown of our selling and marketing expenses, in absolute amounts and as percentages of total selling and marketing expenses, for the years/periods indicated:

Labor costs Depreciation and amortization Marketing expenses Others Total	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 1,922,949 67.8 1,811,750 65.1 1,753,192 58.6 232,845 8.2 378,299 13.6 420,002 14.0 362,953 12.8 263,958 9.5 393,464 13.2 319,152 11.2 330,107 11.8 424,931 14.2 2,837,899 100.0 2,784,114 100.0 2,991,589 100.0	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 840,605 60.4 881,757 59.9 200,616 14.4 215,422 14.6 163,848 11.8 164,348 11.2 187,686 13.4 209,365 14.3 1,392,755 100.0 1,470,892 100.0

General and Administrative Expenses

Our general and administrative expenses primarily include: (i) labor costs, primarily including employee benefit expenses relating to our administrative staff; (ii) depreciation and amortization; and (iii) professional service fees, primarily relating to audit service, legal service and other professional services.

– II-257 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The following table sets forth a breakdown of our general and administrative expenses, in absolute amounts and as percentages of total general and administrative expenses, for the years/periods indicated:

Labor costs Depreciation and amortization Professional service fees Others Total	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 12,514,808 82.8 14,626,666 82.7 14,607,199 82.2 770,803 5.1 813,041 4.6 797,263 4.5 422,148 2.8 371,833 2.1 418,159 2.4 1,407,516 9.3 1,883,179 10.6 1,943,428 10.9 15,115,275 100.0 17,694,719 100.0 17,766,049 100.0	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 7,647,847 85.0 7,511,917 83.0 362,978 4.0 375,144 4.1 191,769 2.1 132,847 1.5 797,384 8.9 1,029,364 11.4 8,999,978 100.0 9,049,272 100.0

Research and Development Expenses

Our research and development expenses primarily include: (i) labor costs, primarily including employee benefit expenses relating to our research and development staff; (ii) depreciation and amortization; and (iii) information technology expenses, primarily relating to our use of third party software or information technology services.

The following table sets forth a breakdown of our research and development expenses, in absolute amounts and as percentages of total research and development expenses, for the years/periods indicated:

Labor costs Depreciation and amortization Information technology expenses Others Total	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 1,306,796 60.6 1,254,195 56.4 1,247,128 54.6 538,979 25.0 722,490 32.5 899,254 39.3 217,361 10.1 165,026 7.4 88,200 3.9 91,703 4.3 81,154 3.7 50,732 2.2 2,154,839 100.0 2,222,865 100.0 2,285,314 100.0	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 640,375 54.5 679,305 52.2 435,793 37.1 535,416 41.1 59,028 5.0 55,899 4.3 39,774 3.4 30,835 2.4 1,174,970 100.0 1,301,455 100.0

– II-258 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Net (Impairment Losses)/Reversal of Impairment Losses on Financial Assets and Contract Assets

Our net (impairment losses)/reversal of impairment losses on financial assets and contract assets primarily represent loss allowances, or reversals of loss allowances, for trade and note receivables and other financial assets, as well as contract assets, made based on our estimates.

Other Income

Our other income primarily consists of (i) government grants, mainly including preferential tax treatments and other fiscal subsidies related to our principle business, such as fiscal subsidies for logistics service providers and cargo airline subsidies, and (ii) dividends income.

The following table sets forth a breakdown of our other income in absolute amounts and as percentages of total other income for the years/periods indicated:

Government grants Dividends income Others Total	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 1,787,501 85.6 2,255,563 90.4 1,983,551 87.0 31,853 1.5 13,811 0.6 2,438 0.1 270,180 12.9 225,285 9.0 295,213 12.9 2,089,534 100.0 2,494,659 100.0 2,281,202 100.0	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 752,237 85.4 404,911 70.7 2,535 0.3 426 0.1 125,632 14.3 167,413 29.2 880,404 100.0 572,750 100.0

Other Gains, Net

Our net other gains primarily reflect (i) fair value change in financial assets at fair value through profit or loss, or FVPL, (ii) gains on disposal of investments in associates and joint ventures, (iii) gains on disposal of investments in subsidiaries, (iv) (losses)/gains on disposal of property, plant and equipment, right-of-use assets and other non-current assets, (v) impairment of inventories, property, plant and equipment and other non-current assets, and (vi) net exchange (losses)/gains.

Finance Income

Our finance income represents interest income on deposits in financial institutions. In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, we had finance income of RMB187.8 million, RMB345.7 million, RMB633.4 million, RMB292.8 million and RMB415.1 million, respectively.

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Finance Costs

Our finance costs primarily consist of (i) interest expense on borrowings and (ii) interest expense on lease liabilities.

The following table sets forth a breakdown of our finance costs, in absolute amounts and as percentages of total finance costs, for the years/periods indicated:

Interest expenses on borrowings Interest expenses on lease liabilities Less: Interest capitalized Total	Year ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 % 1,015,357 65.0 1,570,293 76.4 1,808,850 79.7 553,613 35.4 609,652 29.7 564,374 24.9 (6,007) (0.4) (125,585) (6.1) (103,524) (4.6) 1,562,963 100.0 2,054,360 100.0 2,269,700 100.0	Six months ended June 30, 2023 2024 RMB’000 % RMB’000 % (unaudited) 866,130 79.3 997,654 81.1 289,013 26.4 262,301 21.3 (62,470) (5.7) (29,037) (2.4) 1,092,673 100.0 1,230,918 100.0

Share of Profit/(Loss) of Associates and Joint Ventures, Net

We recorded a net share of profit of associates and joint ventures of RMB42.7 million and RMB7.5 million in 2021 and 2022, respectively. We recorded a net share of loss of associates and joint ventures of RMB67.2 million, RMB13.5 million and RMB62.6 million in 2023 and the six months ended June 30, 2023 and 2024, respectively. The change of position in 2023, and the subsequent increase in the net share of loss of associates and joint ventures in the six months ended June 30, 2024 as compared to the same period in 2023, were primarily related to our shareholding in a joint venture in relation to the Ezhou cargo hub.

Impairment Provision for Investments in Associates and Joint Ventures

We recorded impairment provision for investments in associates and joint ventures of RMB52.4 million, RMB72.5 million, RMB123.9 million in 2021, 2022 and 2023, respectively. Our impairment provision for investments in associates and joint ventures experienced a year-on-year increase of 71.0% in 2023, mainly because we made provisions for certain loss-making associates, in line with our accounting policies and for prudence’s sake, in the same year. We did not make impairment provision for investments in associates and joint ventures for the six months ended June 30, 2024.

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Income Tax Expense

Our income tax expense primarily consists of (i) current income tax and (ii) deferred income tax. The general enterprise income tax rate in the PRC is 25%. During the Track Record Period, certain entities within our Group enjoyed preferential tax treatments. In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, we recorded income tax expense of RMB3.4 billion, RMB4.0 billion, RMB2.6 billion, RMB1.5 billion and RMB1.6 billion, respectively.

Mainland China

Pursuant to the EIT Law, our Company and subsidiaries in mainland China are generally subject to EIT at 25%.

In addition, in 2021, 2022 and 2023 and for the six months ended June 30, 2023 and 2024, several subsidiaries in mainland China were qualified as small and micro enterprises under the PRC EIT regime, and as such enjoyed a corporate income tax rate of 2.5%-10%.

Further, during the Track Record Period, certain of our subsidiaries benefited from a preferential tax rate of 15% under the EIT Law as they were qualified as high and new technology enterprises under relevant regulations or located in the applicable regions, such as certain western regions and special economic zones, subject to certain general restrictions described in the EIT Law and other related regulations.

Other Jurisdictions

Income tax on profit arising from other jurisdictions, including Hong Kong, Macau, Singapore, Japan, South Korea, the USA and Thailand, had been calculated on the estimated assessable profit for the year/period at the respective rates prevailing in the relevant jurisdictions, ranging from 8.25% to 24%.

PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS

Six months Ended June 30, 2024 Compared with Six months Ended June 30, 2023

Revenue

Our revenue increased by 8.1% from RMB124.4 billion for the six months ended June 30, 2023 to RMB134.4 billion for the same period in 2024.

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By Segment

The increase in revenue from express and freight delivery segment was primarily attributable to:

(i) an increase in revenue from time-definite express services by 5.6% from RMB56.1 billion for the six months ended June 30, 2023 to RMB59.2 billion for the six months ended June 30, 2024, primarily driven by (a) our top-notch service capabilities, complemented by enhanced delivery efficiency and a further diversified matrix of service offerings with a tiered time of delivery, boosting the cost performance and attractiveness of our service offerings; (b) a surge in business volume of our air cargo freight, enabled by smart planning, integration and enrichment of our aviation resources, including our access to commercial flight cargo space, and our business development achievements in attracting manufacturing customers, such as high technology, pharmaceutical, and new energy vehicle companies; (c) the broadening of and upgrades to our service offerings to cover more scenarios, such as our time-definite delivery services between major cities within half a day; and (d) our efforts to fortify and grow the market share in e-commerce reverse logistics business;
(ii) an increase in revenue from economy express services by 9.3% from RMB12.1 billion for the six months ended June 30, 2023 to RMB13.3 billion for the six months ended June 30, 2024. We disposed of Fengwang Information Technology in June 2023, in pursuit of healthy and sustainable development of our principal business. Our revenue from economy express services (excluding the impact of Fengwang Information Technology) increased by 15.6% for the six months ended June 30, 2024 as compared to the same period in 2023, primarily attributable to (a) the stable growth of our e-commerce related businesses, underpinned by the relentless optimization of our service capabilities, as well as innovations in our service offerings addressing unmet demands of underserved yet high-value e-commerce verticals, (b) our smart warehousing network planning, coupled with our positioning as an independent third-party logistics service provider, well positioned us to retain and grow the wallet share of our existing consumer goods and e-commerce customers, and (c) our solid pricing power, bolstered by our superior service quality;
(iii) an increase in revenue from freight delivery services by 16.1% from RMB15.1 billion for the six months ended June 30, 2023 to RMB17.6 billion for the six months ended June 30, 2024, primarily attributable to (i) the bespoke solutions underpinned by our superior service quality and delivery timeliness, which spearheaded our penetration of high-growth and high-value industries, such as home appliances, electronics and automobiles industries; (ii) the intelligent planning of our rich LTL freight delivery resources to tackle market pain points, thereby boosting business volume from customers in manufacturing industries, such as new energy vehicle and communications and technology companies;

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(iv) the revenue from cold chain and pharmaceuticals logistics services of RMB5.1 billion for the six months ended June 30, 2024, compared to revenue of the same line of business of RMB5.3 billion for the six months ended June 30, 2023. Due to severe weather conditions such as frost and continuous rainfall in southern China, the production of certain seasonal fruits experienced a significant reduction during the first half of 2024, affecting the fresh and seasonal food logistics industry in general. Despite the chills seeping from tough weather conditions, we were able to render reliable and cost-effective fresh and seasonal food logistics services, while further exploring other growth opportunities. The foregoing decrease was partially offset by increases in our revenues from food cold chain logistics services and pharmaceuticals logistics services. Our food cold chain logistics business experienced stable growth in revenue, primarily attributable to our cold chain logistics solutions that were continuously customized to entertain the fast-evolving needs of our key accounts. Our pharmaceuticals logistics business also recorded a revenue growth, primarily driven by an expansion of service scenarios.

The increase in revenue from our intra-city on-demand delivery segment was primarily driven by: (i) our professional and high-quality on-demand delivery services, catering and customized to numerous types of customers, which allowed us to deepen cooperations with key accounts and expand the scale of our annual active merchants and consumers; (ii) our technology-enabled hour-level delivery network, efficaciously meeting the speed-up requirements of intra-city express delivery, while ensuring our operational efficiency, thereby bolstering our service capabilities; and (iii) our continued exploration of the new business landscape in local lifestyle services, further broadening our readily expansive service scenarios, and the further penetration of lower-tier cities, counties and districts in China.

Revenue from the supply chain and international segment increased by 8.7% for the six months ended June 30, 2024 as compared to that for the same period in 2023, benefitting from the recent market rebound which gave rise to increases in fee rates. In addition, capitalizing on our market leadership and enhanced service capabilities, we swiftly tapped into growth opportunities arising from key and emerging trends including Chinese companies’ overseas expansions, and imports of fresh and seasonal food. As we navigated through the fluctuations in the international sea and air freight market, we again showcased our strong resilience, our business acumen and agility, which we believe were of paramount importance in capturing burgeoning growth opportunities soon as they emerged from the horizon. For further background, see “–Year Ended December 31, 2023 Compared with the Year Ended December 31, 2022” in this prospectus.

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By Region

Our revenue from mainland China increased by 8.1% from RMB107.3 billion for the six months ended June 30, 2023 to RMB116.0 billion for the six months ended June 30, 2024. Contribution by revenue from mainland China to our total revenue, expressed as a percentage, remained stable at 86.3% for the six months ended June 30, 2023 and the same period in 2024.

Our revenue from outside of mainland China increased by 8.1% from RMB17.0 billion for the six months ended June 30, 2023 to RMB18.4 billion for the six months ended June 30, 2024. The increase in revenue from outside of mainland China for the six months ended June 30, 2024 was in line with the increase in revenue from our supply chain and international segment. Contribution by revenue from outside of mainland China to our total revenue, expressed as a percentage, remained stable at 13.7% for the six months ended June 30, 2023 and the same period in 2024.

Cost of Revenue

Our cost of revenue increased by 7.7% from RMB107.8 billion for the six months ended June 30, 2023 to RMB116.1 billion for the six months ended June 30, 2024, primarily attributable to (i) an increase in labor costs by 8.9% from RMB49.1 billion for the six months ended June 30, 2023 to RMB53.5 billion for the same period in 2024, and (ii) an increase in our transportation costs from by 8.8% from RMB39.3 billion for the six months ended June 30, 2023 to RMB42.8 billion for the same period in 2024.

The increase in our labor costs was primarily attributable to further pay raises for our couriers and other frontline employees to improve the competitiveness of our employee benefits, further incentivizing the couriers and other frontline employees to provide services of superior quality. Our labor costs-to-revenue ratio remained relatively stable at 39.5% and 39.8% for the six months ended June 30, 2023 and the same period in 2024, respectively.

The increase in our transportation costs was generally in line with the increase in the transportation costs of our supply chain and international segment, which had experienced a rebound in business volume, bolstered by the recent market recovery and the initiatives we took in tapping into growth opportunities arising from key and emerging trends, such as Chinese companies’ overseas expansions and imports of fresh and seasonal food. Our transportation costs-to-revenue ratio remained relatively stable at 31.6% and 31.8% for the six months ended June 30, 2023 and the same period in 2024, respectively.

Gross Profit and Gross Profit Margin

As a result of the foregoing, our overall gross profit increased by 10.3% from RMB16.6 billion for the six months ended June 30, 2023 to RMB18.3 billion for the six months ended June 30, 2024. Our gross profit margin increased from 13.3% for the six months ended June 30, 2023 to 13.6% for the six months ended June 30, 2024, primarily

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driven by efficiency gains achieved through, among other things, our continuous efforts in multi-network integration and the pursuit of lean management.

Selling and Marketing Expenses

Our selling and marketing expenses remained stable at RMB1.4 billion and RMB1.5 billion for the six months ended June 30, 2023 and 2024, respectively.

General and Administrative Expenses

Our general and administrative expenses remained stable at RMB9.0 billion for the six months ended June 30, 2023 and 2024.

Research and Development Expenses

Our research and development expenses remained relatively stable at RMB1.2 billion and RMB1.3 billion for the six months ended June 30, 2023 and 2024, respectively.

Net (Impairment Losses)/Reversal of Impairment Losses on Financial Assets and Contract Assets

We recorded net impairment losses on financial assets and contract assets of RMB159.9 million for the six months ended June 30, 2024, as compared to a reversal of net impairment losses on financial assets and contract assets of RMB66.0 million for the same period in 2023. The change of position was primarily due to an increase in loss allowances for our trade receivables and other financial assets, which was based on our assessment and generally in line with our business growth.

Other Income

Our other income decreased by 34.9% from RMB880.4 million for the six months ended June 30, 2023 to RMB572.8 million for the same period in 2024, mainly reflecting a decrease in our government grants, which was primarily because the policy granting certain tax incentive had expired in December 2023.

Other Gains, Net

Our net other gains increased by 14.3% from RMB257.1 million for the six months ended June 30, 2023 to RMB293.8 million for the six months ended June 30, 2024, primarily driven by an increase in our net exchange gains, resulting from foreign exchange fluctuations. The increase was partially offset by a decrease in our gains on disposal of investments in subsidiaries, primarily because we disposed of Fengwang Information Technology in June 2023, in pursuit of healthy and sustainable development of our principal business, while we did not have similarly sized disposals in the first half of 2024.

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Finance Income

Our finance income increased by 41.7% from RMB292.8 million for the six months ended June 30, 2023 to RMB415.1 million for the six months ended June 30, 2024, representing an increase in our interest income on deposits in financial institutions.

Finance Costs

Our finance costs increased by 12.7% from RMB1.1 billion for the six months ended June 30, 2023 to RMB1.2 billion for the six months ended June 30, 2024. The increase was primarily attributable to an increase in our interest expenses on borrowings, as we generally maintained higher average balances of borrowings for the six months ended June 30, 2024 as compared to the same period in 2023.

Income Tax Expense

Our income tax expense remained relatively stable at RMB1.5 billion and RMB1.6 billion for the six months ended June 30, 2023 and 2024, respectively.

Profit for the Period

As a result of the foregoing, our profit for the period increased by 22.3% from RMB3.9 billion for the six months ended June 30, 2023 to RMB4.8 billion for the six months ended June 30, 2024. The increase was primarily driven by efficiency gains achieved through, among other things, our continuous efforts in multi-network integration and the pursuit of lean management.

Year Ended December 31, 2023 Compared with the Year Ended December 31, 2022

Revenue

Our revenue remained relatively stable at RMB258.4 billion in 2023, as compared to revenue of RMB267.5 billion in 2022.

By Segment

The increase in revenue from express and freight delivery segment was primarily attributable to:

(i) an increase in revenue from time-definite express services by 9.2% from RMB105.7 billion in 2022 to RMB115.5 billion in 2023, primarily driven by (a) the continuous enhancement and integration of our strong service capabilities, which ensured superior service quality, featuring, among other things, further optimized delivery efficiency and customer experience, allowing us to capture the growth opportunities presented by the gradual economic and consumption recovery, (b) the further diversification of and upgrades to our time-definite express service offerings to cover more service

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scenarios, including our time-definite delivery services between major cities within half a day, and (c) the surge in our e-commerce reverse logistics business volume, attributable in part to our continued cooperation with emerging e-commerce platforms;

(ii) the revenue from economy express services of RMB25.1 billion in 2023, compared to revenue of the same line of business of RMB25.6 billion in 2022. We disposed of Fengwang Information Technology in June 2023. Our revenue from economy express services (excluding the impact of Fengwang Information Technology) experienced a year-on-year increase of 8.6% in 2023, primarily attributable to (a) the stable growth of our e-commerce related businesses, capturing the demands for mid to high-end service offerings in this vertical, and (b) our enhanced pricing power, resulting from the continuous diversification of our service offerings and our efforts in upholding superior service quality;
(iii) an increase in revenue from freight delivery services by 18.5% from RMB27.9 billion in 2022 to RMB33.1 billion in 2023, primarily attributable to (a) the continuous improvements in and integration of our logistics networks, enabling superior services quality and bespoke solutions tackling market pain points, all of which allowed us to further penetrate high-growth and high-value industries and markets, such as advanced manufacturing and smart home appliances, and (b) our efforts in upholding superior service quality and delivery timeliness, which enhanced the competitive edge and secured our pricing power; and
(iv) an increase in revenue from cold chain and pharmaceuticals logistics services by 19.7% from RMB8.6 billion in 2022 to RMB10.3 billion in 2023, primarily because we, as a leading player in the sector, enjoyed competitive edges in terms of (a) service capabilities, as China strengthened infrastructure development and supply-side reform of its cold chain logistics industry, we were better poised to benefit from the favorable policies and enhanced infrastructure, and (b) our well-established and extensive cold-chain logistics networks, which better positioned us to capitalize on and penetrate key consumer trends including live stream e-commerce, newly emerged service scenarios in the fresh and seasonable food vertical, as well as community e-commerce.

The increase in revenue from our intra-city on-demand delivery segment was primarily driven by: (i) robust demand for food delivery services, with consumers expanding the habit of on-demand delivery into retail consumption scenarios, and non-food delivery scenarios maintaining steady growth; (ii) our integrated capabilities in logistics infrastructure which has enabled us to provide professional and high-quality on-demand delivery services to different types of customers, deepen cooperation with key account customers, and achieve expansion of the scale of annual active merchants and consumers; (iii) the further expansion of our services network to cover lower-tier cities, counties and districts in China; (iv) actively exploring the new business landscape in local

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lifestyle service in conjunction with major traffic platforms, thereby deepening cooperation scenarios; (v) our hour-level delivery network effectively meeting the speed-up requirements of intra-city express delivery; and (vi) the adoption of a proactive pricing strategy, which has been instrumental to strengthening the competitiveness of our products.

Revenue from the supply chain and international segment decreased, as the international sea and air freight market experienced a slowdown, primarily due to the softening demand, and the de-stocking in certain countries, as the global supply chain continued to normalize gradually post-pandemic. The pandemic had a material impact on the supply and demand dynamics in the international sea and air freight market. Specifically, fee rates of international sea and air freight increased during the pandemic, primarily attributable to transportation capacity shortages on the supply side. Such shortages eased and transportation capacity on the supply side gradually recovered towards the end of 2022 and in 2023. Despite a tough market, new opportunities emerged amid changing consumer demands and the reshuffle of global supply chains. We were able to steadfastly tackle market headwinds, and provided customers with reliable and cost-effective services. Our supply chain and international segment’s overall performance in 2023 was in line with expectations and on par with global peers.

By Region

Our revenue from mainland China increased by 7.2% from RMB208.6 billion in 2022 to RMB223.5 billion in 2023, representing 78.0% and 86.5% of our total revenue for the same years, respectively.

Our revenue from outside of mainland China decreased by 40.8% from RMB58.9 billion in 2022 to RMB34.9 billion in 2023, representing 22.0% and 13.5% of our total revenue for the same years, respectively. The decrease in revenue from outside of mainland China in 2023 was primarily because the market demand for, and the fee rates of, international sea and air freight decreased from the high levels during the pandemic.

Cost of Revenue

Our cost of revenue decreased by 3.7% from RMB234.5 billion in 2022 to RMB225.8 billion in 2023, primarily attributable to a decrease in our transportation costs by 22.4% from RMB106.8 billion in 2022 to RMB82.9 billion in 2023. The decrease was partially offset by an increase in labor costs by 12.2% from RMB91.6 billion in 2022 to RMB102.8 billion in 2023.

The decrease in our transportation costs was primarily attributable to: (i) a change in our revenue mix in 2023, specifically, a decrease in revenue from our supply chain and international segment in 2023, as the segment generally had relatively higher transportation cost-to-revenue ratio as compared to our other segments; (ii) our continued efforts in multi-network integration including, among other things, the synergistic coordination of our sorting centers, service outlets and transportation capacities across all business segments to achieve better synergy and economies of scale; and (iii) adjustments

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to, and the further standardization of, our transport procurement protocols, as a part of our cost control initiatives. For the same reasons, our transportation costs-to-revenue ratio decreased from 39.9% in 2022 to 32.1% in 2023.

Increase in our labor costs was primarily attributable to the pay raises for our couriers and other frontline employees to improve the competitiveness of our employee benefits, which we believe would further incentivize the couriers and other frontline employees to provide quality services. Our labor costs-to-revenue ratio increased from 34.2% in 2022 to 39.8% in 2023, primarily attributable to (i) a change in our revenue mix, specifically, a decrease in revenue from our supply chain and international segment in 2023, as the segment generally had relatively lower labor cost-to-revenue ratio as compared to our other segments, and (ii) the reasons as discussed above for the increase in our labor costs.

Gross Profit and Gross Profit Margin

As a result of the foregoing, our overall gross profit remained relatively stable at RMB33.0 billion and RMB32.6 billion in 2022 and 2023, respectively. Our gross profit margin increased from 12.3% in 2022 to 12.6% in 2023. The increase in gross profit margin was primarily driven by (i) our efforts to continue optimizing our product mix, and the resulting increase in the revenue contribution by our time definite express services, which generally demonstrated higher profitability, (ii) a decrease in our transportation costs-to-revenue ratio as discussed above under “— Cost of Revenue,” and (iii) efficiency gains achieved through, among other things, our continuous efforts in multi-network integration and pursuit of lean management.

Selling and Marketing Expenses

Our selling and marketing expenses remained relatively stable in 2022 and 2023 at RMB2.8 billion and RMB3.0 billion, respectively.

General and Administrative Expenses

Our general and administrative expenses remained relatively stable at RMB17.7 billion and RMB17.8 billion in 2022 and 2023, respectively.

Research and Development Expenses

Our research and development expenses remained relatively stable at RMB2.2 billion and RMB2.3 billion in 2022 and 2023, respectively.

Net (Impairment Losses)/Reversal of Impairment Losses on Financial Assets and Contract Assets

We recorded net impairment losses on financial assets and contract assets of RMB825.2 million in 2022, and a reversal of net impairment losses on financial assets and contract assets of RMB33.5 million in 2023. In calculating the expected credit loss rates,

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our Group considers historical loss rates, and adjusts for forward looking macro-economic data. At the end of each reporting period, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed. For details, see Note 3.1(b)(ii) to the Accountant’s Report in Appendix I to this prospectus. Adhering to this approach, we recorded a net reversal of impairment losses on financial assets and contract assets in 2023, primarily because the macro-economic conditions improved, and we further enhanced our internal control measures over credit risks.

Other Income

Our other income decreased from RMB2.5 billion in 2022 to RMB2.3 billion in 2023, primarily due to a decrease in government grants from RMB2.3 billion in 2022 to RMB2.0 billion in 2023.

Other Gains, Net

Our net other gains decreased by 50.9% from RMB831.3 million in 2022 to RMB408.5 million in 2023, primarily due to a decrease in our gains on disposal of investments in associates and joint ventures from RMB282.9 million in 2022 to RMB21.4 million in 2023. The decrease was partially offset by an increase in our gains on disposal of investments in subsidiaries from RMB32.3 million in 2022 to RMB268.2 million in 2023, mainly resulting from our disposal of Fengwang Information Technology in June 2023, in pursuit of healthy and sustainable development of our principal business.

Finance Income

Our finance income increased from RMB345.7 million in 2022 to RMB633.4 million in 2023, representing an increase in our interest income on deposits in financial institutions.

Finance Costs

Our finance costs increased by 10.5% from RMB2.1 billion in 2022 to RMB2.3 billion in 2023. The increase was primarily attributable to an increase in our interest expenses on borrowings from RMB1.6 billion in 2022 to RMB1.8 billion in 2023, primarily because we generally maintained higher average balances of borrowings in 2023 as compared to 2022.

Income Tax Expense

Our income tax expense decreased by 35.3% from RMB4.0 billion in 2022 to RMB2.6 billion in 2023, mainly because certain of our previously loss-making subsidiaries turned profitable in 2023, and accordingly (i) utilized previously unrecognized tax losses and temporary differences of RMB378.1 million in 2023, as compared to RMB85.0 million in 2022, and (ii) recognized tax losses and temporary differences not recognized in prior years of RMB157.3 million in 2023, as compared to RMB43.5 million in 2022.

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Profit for the Year

As a result of the foregoing, our profit for the year increased by 12.1% from RMB7.1 billion in 2022 to RMB7.9 billion in 2023. The increase was primarily driven by the further improvement of the overall profitability of our express and freight delivery segment in 2023, bolstered by, among other things, (a) our continued business structure optimization with a focus on high-quality, differentiated services, and the disposal of the Fengwang Information Technology in pursuit of healthy and sustainable development of our principal business, and (b) enhanced lean management and cost control measures, which we believe allowed us to continuously promote multi-network synergies and optimize the segment’s cost structure for further operational efficiency. In addition, our intra-city on-demand delivery segment achieved profitability turnaround in 2023.

Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021

Revenue

Our revenue increased by 29.1% from RMB207.2 billion in 2021 to RMB267.5 billion in 2022, primarily driven by (i) an increase in revenue from our supply chain and international segment by 124.9% from RMB40.0 billion in 2021 to RMB89.9 billion in 2022, which was primarily due to our consolidation of Kerry Logistics since September 2021; and (ii) an increase in revenue from our express and freight delivery segment by 5.7% from RMB160.7 billion in 2021 to RMB169.8 billion in 2022, and an increase in revenue from our intra-city on-demand delivery segment by 28.3% from RMB5.1 billion in 2021 to RMB6.6 billion in 2022, both of which were primarily due to the further penetration and expansion in these two segments.

By Segment

The increase in revenue from our express and freight delivery segment was primarily attributable to:

(i) an increase in revenue from time-definite express services by 6.8% from RMB99.0 billion in 2021 to RMB105.7 billion in 2022, which was primarily due to an increase in the demand for our parcel return services for e-commerce platforms, as well as improvements on our time-definite express service capabilities through, among other things, the further integration of our logistics networks;
(ii) an increase in revenue from economy express services by 0.5% from RMB25.4 billion in 2021 to RMB25.6 billion in 2022, resulting from our continuous and proactive adjustment and optimization of the customer focus and service offerings of our economy express services, partially offset by the softness in demand;

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(iii) an increase in revenue from freight delivery services by 2.3% from RMB27.3 billion in 2021 to RMB27.9 billion in 2022, primarily attributable to our continuous and proactive adjustment and optimization of the customer focus and service offerings of our freight delivery services, partially offset by the softness in demand; and
(iv) an increase in revenue from cold chain and pharmaceuticals logistics services by 10.4% from RMB7.8 billion in 2021 to RMB8.6 billion in 2022, which in turn was primarily attributable to our continued efforts to develop and upgrade our cold chain and pharmaceutical logistics service offerings and capabilities, and as a result were able to serve more customers.

The increase in revenue from our intra-city on-demand delivery segment was primarily attributable to (i) further diversification of and upgrades to our service offerings to cover more service scenarios, allowing us to achieve growth in high-value orders, and (ii) further expansion of our intra-city on-demand services networks to cover lower-tier cities, counties and districts in China.

The increase in revenue from our supply chain and international segment was primarily driven by the consolidation of Kerry Logistics for the full year of 2022, while we only consolidated Kerry Logistics since September 2021.

By Region

Our revenue from mainland China increased by 10.3% from RMB189.0 billion in 2021 to RMB208.6 billion in 2022, representing 91.2% and 78.0% of our total revenue for the same years, respectively.

Our revenue from outside of mainland China increased by 224.5% from RMB18.2 billion in 2021 to RMB58.9 billion in 2022, representing 8.8% and 22.0% of our total revenue for the same years, respectively. The increase in revenue from outside of mainland China in 2022 was primarily attributable to our continued expansion into the global logistics market through organic growth and acquisitions, including our consolidation of Kerry Logistics since September 2021.

Cost of Revenue

Our cost of revenue increased by 29.3% from RMB181.4 billion in 2021 to RMB234.5 billion in 2022, primarily attributable to an increase in our transportation costs by 50.8% from RMB70.9 billion in 2021 to RMB106.8 billion in 2022, and an increase in our labor costs by 9.6% from RMB83.6 billion in 2021 to RMB91.6 billion in 2022.

– II-272 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The increase in our transportation costs was primarily attributable to (i) the increase in the transportation costs relating to our supply chain and international segment, which had experienced a rapid growth in business volume, stemming from both our organic growth and the consolidation of Kerry Logistics, and (ii) rises in fuel prices in 2022. Such increases were partially offset by (i) our continued multi-network integration efforts, which led to improved economies of scale due to a more efficient route design leading to reduced transit, and higher vehicle load rates; and (ii) further improvement on our transport capacity structure through, for instance, increasing the use of our self-owned vehicles. For the same reasons, our transportation costs-to-revenue ratio increased from 34.2% in 2021 to 39.9% in 2022.

The increase in our labor costs was primarily attributable to (i) an increasing need for labor resources in line with our revenue growth and business expansion, and (ii) pay raises for our couriers and other frontline employees to improve the competitiveness of our employee benefits, which we believe would further incentivize couriers and other frontline employees to provide quality services. Our labor costs-to-revenue ratio decreased from 40.3% in 2021 to 34.2% in 2022. The decrease was primarily attributable to (i) our continued multi-network integration and investments in automated equipment, which led to improved operational efficiency, and (ii) the rapid growth in revenue from our supply chain and international segment, while labor costs of this segment remained relatively stable.

Gross Profit and Gross Profit Margin

As a result of the foregoing, our gross profit increased by 28.1% from RMB25.8 billion in 2021 to RMB33.0 billion in 2022. Despite the continued impact of challenging market conditions, our gross profit margin remained stable at 12.4% and 12.3% in 2021 and 2022, respectively, primarily attributable to (i) our efforts to further optimize our product mix through, among other things, strategically focusing on mid to high-end service offerings, which generally demonstrated higher profitability, and (ii) efficiency gains achieved in certain of our cost components through the further integration of our logistics networks, infrastructure and service capabilities.

Selling and Marketing Expenses

Our selling and marketing expenses remained stable at RMB2.8 billion and RMB2.8 billion in 2021 and 2022, respectively.

General and Administrative Expenses

Our general and administrative expenses increased by 17.1% from RMB15.1 billion in 2021 to RMB17.7 billion in 2022, which was generally in line with our business growth. Our general and administrative expenses-to-revenue ratio, representing our general and administrative expenses divided by revenue for the same year, expressed as a percentage, decreased from 7.3% in 2021 to 6.6% in 2022, reflecting our further improvement on cost efficiency. Such an improvement was primarily due to our continuous pursuit of lean management through the digital transformation of our administrative routines.

– II-273 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Research and Development Expenses

Our research and development expenses remained stable at RMB2.2 billion and RMB2.2 billion in 2021 and 2022, respectively. Research and development expenses incurred in 2022 were primarily in relation to further digital transformation of our business operations, as well as exploring technological innovations in the logistics industry that could improve operational efficiency and generate new revenue streams.

Net (Impairment Losses)/Reversal of Impairment losses on Financial Assets and Contract Assets

Our net impairment losses on financial assets and contract assets increased by 42.3% from RMB579.9 million in 2021 to RMB825.2 million in 2022, primarily due to an increase in loss allowances for our trade receivables and other financial assets, which was based on our assessment and generally in line with our business growth.

Other Income

Our other income increased by 19.4% from RMB2.1 billion in 2021 to RMB2.5 billion in 2022, which was primarily attributable to an increase in government grants from RMB1.8 billion in 2021 to RMB2.3 billion in 2022.

Other Gains, Net

Our net other gains decreased from RMB2.0 billion in 2021 to RMB831.3 million in 2022, mainly attributable to higher gains on disposal of investments in subsidiaries recorded in 2021 of RMB1.8 billion, while we did not have similarly sized disposals of subsidiaries in 2022.

Finance Income

Our finance income increased by 84.1% from RMB187.8 million in 2021 to RMB345.7 million in 2022, reflecting the increase in our interest income on deposits in financial institutions in 2022 as compared to 2021.

Finance Costs

Our finance costs increased by 31.4% from RMB1.6 billion in 2021 to RMB2.1 billion in 2022. The increase was primarily attributable to an increase in our interest expenses on borrowings from RMB1.0 billion in 2021 to RMB1.6 billion in 2022, as we generally maintained higher average balances of borrowings during 2022 as compared to 2021.

Income Tax Expense

Our income tax expense increased from RMB3.4 billion in 2021 to RMB4.0 billion in 2022, primarily attributable to an increase in our current income tax from RMB2.8 billion in 2021 to RMB3.9 billion in 2022, which was generally in line with the growth in our taxable income in 2022.

– II-274 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Profit for the Year

As a result of the foregoing, our profit for the year increased by 61.0% from RMB4.4 billion in 2021 to RMB7.1 billion in 2022.

DISCUSSION OF SELECTED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

The following table sets forth selected information from our consolidated statements of financial position as of the dates indicated, which has been extracted from the Accountant’s Report in Appendix I to this prospectus:

ASSETS Non-current assets Property, plant and equipment Right-of-use assets Investment properties Intangible assets Deferred tax assets Prepayments, other receivables and other assets Investments in associates and joint ventures Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Total non-current assets	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 47,650,309 56,903,667 60,104,416 23,779,667 22,179,348 20,890,047 4,850,233 4,875,366 6,418,720 19,485,614 22,084,612 21,030,998 1,584,478 1,632,964 2,263,870 3,435,382 2,257,364 2,333,562 7,260,087 7,858,000 7,378,831 6,810,771 7,365,684 9,489,535 878,023 1,012,209 589,996 115,734,564 126,169,214 130,499,975	As of June 30, 2024 RMB’000 59,577,127 19,972,478 6,658,540 20,582,712 2,053,570 2,229,314 6,859,813 8,344,293 508,313
		126,786,160

– II-275 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Current assets Inventories Contract assets Trade and note receivables Prepayments, other receivables and other assets Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Restricted cash Cash and cash equivalents Total current assets Total assets LIABILITIES Non-current liabilities Borrowings Lease liabilities Deferred tax liabilities Other payables and accruals Deferred income Total non-current liabilities	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,546,821 1,948,354 2,440,425 1,038,247 1,522,996 1,632,592 30,759,013 25,796,677 25,360,433 14,992,856 12,801,911 12,622,706 – 63,310 99,978 10,384,493 7,385,379 6,809,742 576,926 874,919 1,576,496 34,813,768 40,279,947 40,448,308 94,112,124 90,673,493 90,990,680 209,846,688 216,842,707 221,490,655 19,384,466 26,586,761 30,396,912 10,941,938 8,582,372 8,038,495 4,402,160 4,657,954 4,550,974 544,300 191,871 140,329 690,242 860,791 1,090,644 35,963,106 40,879,749 44,217,354	As of June 30, 2024 RMB’000 2,559,211 2,039,379 26,095,410 10,667,582 125,633 18,047,323 1,029,244 32,515,989
		93,079,771
		219,865,931

		30,600,682 7,472,393 4,536,857 144,477 1,210,871
		43,965,280

– II-276 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Current liabilities Trade and note payables Contract liabilities Borrowings Lease liabilities Financial liabilities at fair value through profit or loss Income tax payable Other payables and accruals Advances from customers Total current liabilities Total liabilities Net assets Equity attributable to owners of our Company Share capital Less: Treasury shares Reserves Retained earnings Equity attributable to owners of our Company Non-controlling interests Total equity	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 23,467,675 24,748,051 24,914,300 1,675,836 1,244,418 1,832,018 25,715,952 23,281,547 22,309,103 5,989,616 6,596,956 5,769,965 7,658 96,647 92,120 2,066,730 1,630,863 1,394,250 17,070,777 20,029,392 17,637,171 27,385 49,035 40,714 76,021,629 77,676,909 73,989,641 111,984,735 118,556,658 118,206,995 97,861,953 98,286,049 103,283,660 4,906,213 4,895,202 4,895,202 (394,993) (2,040,377) (2,575,532) 50,186,242 50,037,565 51,634,675 28,192,470 33,371,351 38,835,999 82,889,932 86,263,741 92,790,344 14,972,021 12,022,308 10,493,316 97,861,953 98,286,049 103,283,660	As of June 30, 2024 RMB’000 23,810,332 1,802,509 29,034,420 5,540,079 94,614 1,221,636 15,444,502 41,209 76,989,301 120,954,581 98,911,350 4,815,911 (378,490) 43,385,333 40,748,443 88,571,197 10,340,153 98,911,350

– II-277 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Property, Plant and Equipment

Our property, plant and equipment consist of freehold land and buildings, aircraft, aircraft engines, rotables and high-value maintenance, machinery and equipment, transportation vehicles, computers and electronic equipment, office and other equipment, leasehold improvements, as well as construction-in-progress. Our property, plant and equipment were RMB47.7 billion, RMB56.9 billion, RMB60.1 billion and RMB59.6 billion as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. The increases in property, plant and equipment during the Track Record Period were primarily attributable to (i) acquisition and consolidation of subsidiaries, such as Kerry Logistics, during the Track Record Period, and (ii) the continued development and integration of our logistics networks and infrastructure. The following table sets forth a breakdown of our property, plant and equipment as of the dates indicated:

Freehold land and buildings Aircraft, aircraft engines, rotables and high-value maintenance Machinery and equipment Transportation vehicles Computers and electronic equipment Office and other equipment Leasehold improvements Construction-in-progress Total	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 13,458,571 18,529,197 26,267,016 6,754,760 7,766,736 8,853,163 6,496,199 7,838,395 10,634,212 2,576,601 2,516,835 2,628,610 1,632,879 1,550,147 1,346,110 6,006,980 5,456,094 4,200,743 2,153,116 2,096,403 2,141,678 8,571,203 11,149,860 4,032,884 47,650,309 56,903,667 60,104,416	As of June 30, 2024 RMB’000 27,848,389 9,163,503 10,466,425 2,337,785 1,191,704 3,511,093 2,119,112 2,939,116
		59,577,127

Right-of-Use Assets

Our right-of-use assets primarily represent the carrying amount of our leasehold land and land use rights, leased buildings, and leased motor vehicles. Our right-of-use assets decreased from RMB23.8 billion as of December 31, 2021 to RMB22.2 billion as of December 31, 2022 and further to RMB20.9 billion as of December 31, 2023, and further to RMB20.0 billion as of June 30, 2024, mainly due to amortization.

– II-278 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Investment Properties

Our investment properties represent the carrying amount of properties held primarily for leasing purposes, including properties under construction for such purpose. Our investment properties remained relatively stable at RMB4.9 billion and RMB4.9 billion as of December 31, 2021 and 2022, respectively. Our investment properties increased by 31.7% to RMB6.4 billion as of December 31, 2023, primarily driven by our acquisition of assets through the acquisition of subsidiaries, and the reclassification of certain assets to investment properties upon their completion of construction. Our investment properties remained relatively stable at RMB6.7 billion as of June 30, 2024.

Intangible Assets

Our intangible assets primarily consist of development expenditures, goodwill, customer relationships, software, trademarks and others. Intangible assets increased from RMB19.5 billion as of December 31, 2021 to RMB22.1 billion as of December 31, 2022, primarily reflecting our continued efforts to improve our information systems, as well as our consolidation of certain other subsidiaries in 2022. Our intangible assets remained relatively stable at RMB21.0 billion and RMB20.6 billion as of December 31, 2023 and June 30, 2024, respectively.

Deferred Tax Assets

Our deferred tax assets remained relatively stable at RMB1.6 billion and RMB1.6 billion as of December 31, 2021 and 2022, respectively. Our deferred tax assets increased by 38.6% to RMB2.3 billion as of December 31, 2023, primarily reflecting the temporary difference between the recognition of amortization and depreciation and of tax losses. Our deferred tax assets remained relatively stable at RMB2.1 billion as of June 30, 2024.

– II-279 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Prepayments, Other Receivables and Other Assets

The non-current portion of our prepayments, other receivables and other assets primarily consists of (i) amounts due from related parties, (ii) deferred pilot recruitment costs, (iii) prepayments, which mainly consist of prepaid construction equipment, (iv) loans to employees, and (v) finance lease receivables. The current portion of our prepayments, other receivables and other assets primarily consists of (i) amounts due from related parties, (ii) value-added tax recoverable, (iii) prepayments, which mainly consist of prepaid freight and transportation costs, (iv) deposits, (v) cash to collect on behalf of customers, (vi) loans to employees, (vii) prepaid corporate income tax, and (viii) finance lease receivables. The following table sets forth details of our prepayments, other receivables and other assets as of the dates indicated:

Non-current: Amounts due from related parties Deferred pilot recruitment costs Prepayments Loans to employees Finance lease receivables Others Less: Allowance for expected credit losses	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 59,725 70,794 1,363 632,486 836,956 805,415 1,746,758 622,763 944,833 139,422 57,058 15,575 471,491 247,003 89,380 407,484 442,403 492,174 3,457,366 2,276,977 2,348,740 (21,984) (19,613) (15,178) 3,435,382 2,257,364 2,333,562	As of June 30, 2024 RMB’000 71,751 774,186 845,134 84 57,311 494,494 2,242,960 (13,646) 2,229,314

– II-280 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Current: Amounts due from related parties Value-added tax recoverable Prepayments Prepayments for listing expenses Deposits Cash to collect on behalf of customers Loans to employees Prepaid corporate income tax Finance lease receivables Others Less: Allowance for expected credit losses	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 475,828 526,453 1,032,722 7,454,169 5,048,940 4,641,173 2,933,129 3,474,471 3,248,665 – – 25,068 1,413,769 1,532,034 1,523,589 729,705 382,300 659,441 97,833 55,604 26,454 236,852 768,131 551,327 249,416 376,512 226,652 1,699,827 1,036,855 1,043,853 15,290,528 13,201,300 12,978,944 (297,672) (399,389) (356,238) 14,992,856 12,801,911 12,622,706	As of June 30, 2024 RMB’000 275,159 3,862,436 2,793,230 26,870 1,535,427 720,869 16,197 367,288 207,982 1,213,812 11,019,270 (351,688) 10,667,582

The non-current portion of our prepayments, other receivables and other assets decreased by 34.3% from RMB3.4 billion as of December 31, 2021 to RMB2.3 billion as of December 31, 2022, primarily attributable to a decrease in non-current prepayments to RMB622.8 million as of December 31, 2022, as we had a partial settlement of our non-current prepayments. Non-current portion of our prepayments, other receivables and other assets remained relatively stable at RMB2.3 billion and RMB2.2 billion as of December 31, 2023 and June 30, 2024, respectively.

The current portion of our prepayments, other receivables and other assets decreased by 14.6% from RMB15.0 billion as of December 31, 2021 to RMB12.8 billion as of December 31, 2022, which was primarily attributable to a decrease in value-added tax recoverable to RMB5.0 billion as of December 31, 2022. The current portion of our prepayments, other receivables and other assets decreased by 15.5% from RMB12.6 billion as of December 31, 2023 to RMB10.7 billion as of June 30, 2024, primarily attributable to the decreases in our value-added tax recoverable, the current portion of our amounts due from related parties, and the current portion of our prepayments, which were mainly associated with freight and transportation costs.

Our loans to employees are interest-free in nature, and are a part of our employee benefits programs. These loans take the form of entrusted loans provided by commercial banks. As advised by our PRC Legal Adviser, the provision of entrusted loans to employees was in compliance with the applicable PRC laws and regulations.

– II-281 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Our amounts due from related parties that are non-trade in nature were RMB508.9 million, RMB573.3 million, RMB1.0 billion and RMB332 million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. These amounts primarily comprised: (i) logistics service fees, totalling up to RMB371.4 million, RMB405.6 million and RMB561.1 million in 2021, 2022 and 2023, respectively, collected from our customers by the Hive Box Connected Persons on our behalf; the aforementioned fee collection arrangements were in line with, and incidental to, the return of goods services for certain e-commerce platforms conducted through smart lockers of the Hive Box Connected Persons; and (ii) a loan to a joint venture of RMB329.9 million in 2023, which amount had been fully settled in January 2024.

Investments in Associates and Joint Ventures

Our investments in associates and joint ventures increased by 8.2% from RMB7.3 billion as of December 31, 2021 to RMB7.9 billion as of December 31, 2022, driven by an increase in our investments in joint ventures from RMB2.6 billion as of December 31, 2021 to RMB3.6 billion as of December 31, 2022, resulting from our capital injection to a joint venture in relation to the Ezhou cargo hub. Investments in associates and joint ventures remained relatively stable at RMB7.4 billion and RMB6.9 billion as of December 31, 2023 and June 30, 2024, respectively.

Financial Assets at Fair Value Through Other Comprehensive Income

The non-current portion of our financial assets at fair value through other comprehensive income consists of listed equity investments at fair value and unlisted equity investments at fair value. The current portion of our financial assets at fair value through other comprehensive income represents notes held for sale, which are in relation to the collection of contractual cash flows from our customers and the sale of our financial assets. The following table sets forth details of our financial assets at fair value through other comprehensive income as of the dates indicated:

Non-current: – Listed equity investments, at fair value – Unlisted equity investments, at fair value Current: – Notes held for sale	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 241,936 158,936 2,418,842 6,568,835 7,206,748 7,070,693 6,810,771 7,365,684 9,489,535 – 63,310 99,978 – 63,310 99,978	As of June 30, 2024 RMB’000 1,120,309 7,223,984
		8,344,293

		125,633
		125,633

– II-282 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The non-current portion of our financial assets at fair value through other comprehensive income increased from RMB6.8 billion as of December 31, 2021 to RMB7.4 billion as of December 31, 2022, primarily due to an increase in our unlisted equity investments at fair value from RMB6.6 billion as of December 31, 2021 to RMB7.2 billion as of December 31, 2022. Our unlisted equity investments primarily represent our investments in the shares of certain companies that are not traded on the open market. Such investments were classified as financial assets at FVOCI with level 3 fair value measurement. For the assumptions utilized in our level 3 fair value measurement, see “— Critical Accounting Policies and Estimates — Level 3 Fair Value Measurement” and Note 3.3 to the Accountant’s Report in Appendix I to this prospectus. Our unlisted equity investments at fair value increased during the Track Record Period, primarily reflecting the recent equity sales prices of the relevant investee companies. The non-current portion of our financial assets at fair value through other comprehensive income further increased to RMB9.5 billion as of December 31, 2023, primarily attributable to the increase in our listed equity investments, at fair value, from RMB158.9 million as of December 31, 2022 to RMB2.4 billion as of December 31, 2023, mainly reflecting our investment in J&T Global Express Limited. The non-current portion of our financial assets at fair value through other comprehensive income decreased to RMB8.3 billion as of June 30, 2024, primarily due to a decrease in our listed equity investments, at fair value, which was associated with our investment in J&T Global Express Limited.

Financial Assets at Fair Value Through Profit or Loss

The non-current portion of our financial assets at fair value through profit or loss consists of our industry fund investments, Special Scheme equity-class securities, and others. The current portion of our financial assets at fair value through profit or loss primarily consists of cash management products issued by reputable commercial banks, namely, structured deposits and fund investment. The following table sets forth details of our financial assets at fair value through profit or loss as of the dates indicated:

Non-current: – Industry fund investments – Special Scheme equity class securities – Equity investment in unlisted entities – Others Current: – Structured deposits – Fund investment	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 552,130 770,637 499,320 235,821 116,286 – 85,243 118,324 84,401 4,829 6,962 6,275 878,023 1,012,209 589,996 9,730,665 7,351,158 6,542,881 653,828 34,221 266,861 10,384,493 7,385,379 6,809,742	As of June 30, 2024 RMB’000 378,654 – 123,504 6,155
		508,313

		17,770,993 276,330
		18,047,323

– II-283 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The non-current portion of our financial assets at fair value through profit or loss increased from RMB878.0 million as of December 31, 2021 to RMB1.0 billion as of December 31, 2022, primarily attributable to increases in industry fund investments during the same time. The non-current portion of our financial assets at fair value through profit or loss decreased to RMB590.0 million as of December 31, 2023, primarily due to (i) a decrease in industry fund investments from RMB770.6 million as of December 31, 2022 to RMB499.3 million as of December 31, 2023, and (ii) a decrease in Special Scheme equity-class securities from RMB116.3 million as of December 31, 2022 to nil as of December 31, 2023. The non-current portion of our financial assets at fair value through profit or loss subsequently decreased to RMB508.3 million as of June 30, 2024, primarily due to a decrease in our industry fund investments.

The current portion of our financial assets at fair value through profit or loss amounted to RMB10.4 billion, RMB7.4 billion, RMB6.8 billion and RMB18.0 billion as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively, primarily reflecting the changes in our structured deposits. We adjusted our structured deposits during the Track Record Period according to our cash management plans.

Our finance department oversees our overall cash management. Below is a summary of our internal control measures on cash management.

Our annual cash management limit amount shall be approved by our Board of Directors. We shall ensure ample liquidity for our Group’s daily operations, maintain a portfolio of principal-guaranteed or low-risk products, and only invest in short-term products with a maturity of less than 12 months.
As authorized by our Board of Directors, our cash management shall be centralized at our finance department, and shall follow a tiered approval process. Single transaction exceeding a pre-determined threshold shall be submitted for approval by our senior management.
The finance department shall assess and approve a shortlist of financial institutions and its low-risk cash management products, such as time deposits, call deposits, structured deposits, interbank deposits, and low-risk fixed income products. Specifically, we only allowed transactions with reputable domestic banks or securities companies with total assets of more than RMB100.0 billion and international ratings of BBB- or above, and reputable foreign banks with a strong global or regional presence.
We have fully standardized and systemized our cash management processes. All the major cash management processes, ranging from short-term cash planning, quotes (interest and tenors) from financial institutions, investment proposals to approvals, shall be generated in and processed by the system in the interest of efficiency.
We shall review and analyze our cash management performance on a monthly basis. We shall also take immediate actions to improve our practices if there is any change in regulatory or market conditions.

– II-284 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Trade and Note Receivables

Our trade and note receivables primarily consist of outstanding amounts payable by third parties and related parties. The following table sets forth the details of our trade and note receivables as of the dates indicated:

Trade and note receivables – related parties – third parties Less: Allowance for expected credit losses	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 70,288 60,228 124,211 31,723,594 27,296,693 26,614,887 31,793,882 27,356,921 26,739,098 (1,034,869) (1,560,244) (1,378,665) 30,759,013 25,796,677 25,360,433	As of June 30, 2024 RMB’000 553,681 26,880,865 27,434,546 (1,339,136) 26,095,410

Our trade and note receivables decreased by 16.1% from RMB30.8 billion as of December 31, 2021 to RMB25.8 billion as of December 31, 2022, primarily attributable to a decrease in trade and note receivables from third parties from RMB31.7 billion as of December 31, 2021 to RMB27.3 billion as of December 31, 2022, which in turn was primarily due to our efforts to accelerate collection of such receivables from third parties in 2022.

Our trade and note receivables remained relatively stable at RMB25.4 billion and RMB26.1 billion as of December 31, 2023 and June 30, 2024, respectively.

– II-285 –

APPENDIX II FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

We generally grant a credit period ranging from 30 to 90 days to our customers. The table below sets forth an aging analysis, based on the invoice date, of our trade and note receivables as of the dates indicated:

Within one year (including one year) Between one and two years (including two years) Over two years	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 31,344,858 26,399,022 25,719,098 236,070 653,524 490,411 212,954 304,375 529,589 31,793,882 27,356,921 26,739,098	As of June 30, 2024 RMB’000 26,325,967 450,741 657,838
		27,434,546

The following table sets forth our turnover days of our trade and note receivables for the years/periods indicated:

				Six months
				ended
	Year ended December 31,			June 30,
	2021	2022	2023	2024
Average turnover days of trade and
note receivables*	42.1	38.6	36.1	34.5

Note:

Average turnover days of trade and note receivables for each one-year period equals the average of the beginning and ending trade and note receivables for the year divided by revenue for that year and multiplied by 365 days; average turnover days of trade and note receivables for each six-month period equals the average of the beginning and ending trade and note receivables for the period divided by revenue for the same period and multiplied by 180 days.

The average turnover days of our trade and note receivables decreased from 42.1 days in 2021 to 38.6 days in 2022, to 36.1 days in 2023, and further to 34.5 days for the six months ended June 30, 2024, primarily due to our efforts to accelerate the collection of trade and note receivables.

As of September 30, 2024, RMB24.3 billion, or 88.5%, of our trade and note receivables as of June 30, 2024 had been subsequently settled.

– II-286 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Cash and Cash Equivalents

Our cash and cash equivalents primarily consist of cash at bank and cash at other financial institutions. Our cash and cash equivalents were RMB34.8 billion, RMB40.3 billion, RMB40.4 billion and RMB32.5 billion as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively.

Other Payables and Accruals

The non-current portion of our other payables and accruals primarily relates to salaries, wages and benefits for our employees, consideration payable for business combinations, and others. The current portion of our other payables and accruals primarily relates to (i) salaries, wages and benefits for our employees, (ii) payable for purchase of property, plant and equipment, (iii) payables of cash collected on delivery services, (iv) deposits, (v) other taxes payable, and (vi) amounts due to related parties. The following table sets forth details of our other payables and accruals as of the dates indicated:

Non-current: Salaries, wages and benefits Consideration payable for business combinations Others Current: Amounts due to related parties Salaries, wages and benefits Payable for purchase of property, plant and equipment Deposits Other taxes payable Payables of cash collected on delivery services Consideration payable for business combinations Others	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 351,754 114,024 82,216 144,447 21,573 – 48,099 56,274 58,113 544,300 191,871 140,329 269,671 220,071 136,098 5,610,318 6,573,254 5,872,341 5,352,716 5,557,664 4,345,119 1,604,631 2,375,025 2,355,449 806,821 1,130,283 735,465 1,643,510 1,220,988 1,534,338 83,002 1,045,334 289,306 1,700,108 1,906,773 2,369,055 17,070,777 20,029,392 17,637,171	As of June 30, 2024 RMB’000 77,406 – 67,071
		144,477

		95,979 4,505,260 3,209,908 2,516,231 756,972 1,442,384 281,790 2,635,978
		15,444,502

– II-287 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Fluctuations in our other payables and accruals were primarily driven by changes in the current portion of other payables and accruals. The current portion of our other payables and accruals increased by 17.3% from RMB17.1 billion as of December 31, 2021 to RMB20.0 billion as of December 31, 2022, primarily due to (i) an increase in current salaries, wages and benefits from RMB5.6 billion as of December 31, 2021 to RMB6.6 billion as of December 31, 2022, and (ii) an increase in current consideration payable for business combinations from RMB83.0 million as of December 31, 2021 to RMB1.0 billion as of December 31, 2022, resulting from our acquisitions of certain subsidiaries in 2022. The current portion of our other payables and accruals decreased to RMB17.6 billion as of December 31, 2023, primarily due to (i) a decrease in salaries, wages and benefits, mainly due to our payment of salaries, (ii) a decrease in current consideration payable for business combinations, and (iii) a decrease in payable for purchase of property, plant and equipment, mainly because we made payments in relation thereto. The current portion of our other payables and accruals further decreased to RMB15.4 billion as of June 30, 2024, primarily due to (i) a decrease in salaries, wages and benefits, mainly due to our payment of salaries, and (ii) a decrease in payable for purchase of property, plant and equipment, mainly because we made payments in relation thereto.

Our amounts due to related parties categorized under other payables and accruals are non-trade in nature, primarily comprising payables for the purchase of certain logistics equipment. As such amounts are essentially within our ordinary course of business, and do not interfere with our financial independence, we do not plan to fully settle all remaining balances of our amounts due to related parties that are non-trade in nature prior to the Listing.

Trade and Note Payables

Our trade and note payables primarily consist of costs payable by us to third party suppliers. Our trade and note payables remained relatively stable at RMB23.5 billion, RMB24.7 billion, RMB24.9 billion and RMB23.8 billion as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. The following table sets forth details of our trade and note payables as of the dates indicated:

Trade and note payables – related parties – third parties	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 405,456 505,220 421,194 23,062,219 24,242,831 24,493,106 23,467,675 24,748,051 24,914,300	As of June 30, 2024 RMB’000 397,211 23,413,121
		23,810,332

– II-288 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

The following table sets forth the aging analysis of our trade and note payables based on invoice date as of the dates indicated:

Within one year (including one year) Over 1 year Total	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 23,354,313 24,654,791 24,505,848 113,362 93,260 408,452 23,467,675 24,748,051 24,914,300	As of June 30, 2024 RMB’000 23,527,260 283,072
		23,810,332

The following table sets forth the turnover days of our trade and note payables for the years/periods indicated:

				Six months
				ended
	Year ended December 31,			June 30,
	2021	2022	2023	2024
Average turnover days of trade and
note payables*	39.2	37.5	40.1	37.8

Note:

Average turnover days of trade and note payables for each one-year period equals the average of the beginning and ending trade and note payables for the year divided by cost of revenue for that year and multiplied by 365 days; average turnover days of trade and note payables for each six-month period equals the average of the beginning and ending trade and note payables for the period divided by cost of revenue for the same period and multiplied by 180 days.

Average turnover days of our trade and note payables remained relatively stable at 39.2 days, 37.5 days, 40.1 days and 37.8 days in 2021, 2022 and 2023 and the six months ended June 30, 2024, respectively.

As of September 30, 2024, RMB21.1 billion, or 88.7%, of our trade and note payables as of June 30, 2024 had been subsequently settled.

– II-289 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

LIQUIDITY AND CAPITAL RESOURCES

During the Track Record Period and up to the Latest Practicable Date, we had met our working capital and other capital requirements primarily through cash generated from our operating activities, and proceeds from external debts and other fundraising activities. We had cash and cash equivalents of RMB34.8 billion, RMB40.3 billion, RMB40.4 billion and RMB32.5 billion as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. Going forward, we believe that our capital requirements will be satisfied by using a combination of cash and cash equivalents, cash generated from our operating activities and fundraising activities, and the estimated net proceeds from the Global Offering.

– II-290 –

APPENDIX II FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Net Current Assets

The following table sets forth our current assets and liabilities as of the dates indicated:

Current assets Inventories Contract assets Trade and note receivables Prepayments, other receivables and other assets Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Restricted cash Cash and cash equivalents Total current assets Current liabilities Trade and note payables Contract liabilities Borrowings Lease liabilities Financial liabilities at fair value through profit or loss Income tax payable Other payables and accruals Advances from customers Total current liabilities Net current assets	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,546,821 1,948,354 2,440,425 1,038,247 1,522,996 1,632,592 30,759,013 25,796,677 25,360,433 14,992,856 12,801,911 12,622,706 – 63,310 99,978 10,384,493 7,385,379 6,809,742 576,926 874,919 1,576,496 34,813,768 40,279,947 40,448,308 94,112,124 90,673,493 90,990,680 23,467,675 24,748,051 24,914,300 1,675,836 1,244,418 1,832,018 25,715,952 23,281,547 22,309,103 5,989,616 6,596,956 5,769,965 7,658 96,647 92,120 2,066,730 1,630,863 1,394,250 17,070,777 20,029,392 17,637,171 27,385 49,035 40,714 76,021,629 77,676,909 73,989,641 18,090,495 12,996,584 17,001,039	As of June 30, 2024 RMB’000 2,559,211 2,039,379 26,095,410 10,667,582 125,633 18,047,323 1,029,244 32,515,989 93,079,771 23,810,332 1,802,509 29,034,420 5,540,079 94,614 1,221,636 15,444,502 41,209 76,989,301 16,090,470	As of September 30, 2024 RMB’000 (Unaudited) 2,369,462 2,296,536 26,426,602 10,278,805 210,851 24,604,743 1,103,342 21,294,235
			88,584,576
			24,836,388 1,584,702 23,343,558 5,416,002 93,451 1,240,757 16,546,711 38,194
			73,099,763
			15,484,813

– II-291 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Cash Flow

The following table sets forth a summary of our cash flows for the years/periods indicated:

Net cash generated from operating activities Net cash used in investing activities Net cash generated from/(used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year/period Exchange (losses)/gains on cash and cash equivalents Cash and cash equivalents at the end of the year/period	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 16,078,955 32,702,947 26,569,819 (17,131,227) (12,091,458) (13,505,617) 20,498,576 (16,016,950) (12,994,685) 19,446,304 4,594,539 69,517 15,466,484 34,813,768 40,279,947 (99,020) 871,640 98,844 34,813,768 40,279,947 40,448,308	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (unaudited) 13,824,827 13,722,269 (13,633,590) (15,444,553) (4,963,638) (6,181,865) (4,772,401) (7,904,149) 40,279,947 40,448,308 127,046 (28,170) 35,634,592 32,515,989	Six months ended June 30, 2023 2024 RMB’000 RMB’000 (unaudited) 13,824,827 13,722,269 (13,633,590) (15,444,553) (4,963,638) (6,181,865) (4,772,401) (7,904,149) 40,279,947 40,448,308 127,046 (28,170) 35,634,592 32,515,989
			(28,170) 32,515,989

Net Cash Generated from Operating Activities

For the six months ended June 30, 2024, our net cash generated from operating activities was RMB13.7 billion, which was primarily attributable to our profit before income tax of RMB6.3 billion, as adjusted by (i) non-cash and non-operating items which primarily consisted of depreciation and amortization (excluding right-of-use assets) of RMB5.4 billion, depreciation of right-of-use assets of RMB3.4 billion and finance costs of RMB1.2 billion, (ii) changes in working capital, which primarily resulted from a decrease in trade payables, contract liabilities, and other payables of RMB1.7 billion, and (iii) income tax paid of RMB1.5 billion.

– II-292 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

In 2023, our net cash generated from operating activities was RMB26.6 billion, which was primarily attributable to our profit before income tax of RMB10.5 billion, as adjusted by (i) non-cash and non-operating items which primarily consisted of depreciation and amortization (excluding right-of-use assets) of RMB10.1 billion, depreciation of right-of-use assets of RMB7.2 billion and finance costs of RMB2.3 billion, (ii) changes in working capital, which primarily resulted from an increase in inventories of RMB491.3 million and an increase in trade receivables, prepayment, contract assets and other receivable of RMB262.5 million, partially offset by an increase in trade payables, contract liabilities, and other payables of RMB759.0 million, and (iii) income tax paid of RMB3.2 billion.

In 2022, our net cash generated from operating activities was RMB32.7 billion, which was primarily attributable to our profit before income tax of RMB11.0 billion, as adjusted by (i) non-cash and non-operating items, which primarily consisted of depreciation and amortization (excluding right-of use assets) of RMB9.0 billion, depreciation of right-of-use assets of RMB7.3 billion, and finance costs of RMB2.1 billion, (ii) changes in working capital, which primarily resulted from a decrease in trade receivables, prepayment, contract assets and other receivable of RMB8.8 billion, and (iii) income tax paid of RMB5.1 billion.

In 2021, our net cash generated from operating activities was RMB16.1 billion, which was primarily attributable to our profit before income tax of RMB7.8 billion, as adjusted by (i) non-cash and non-operating items, which primarily consisted of depreciation of right-of-use assets of RMB5.8 billion, depreciation and amortization (excluding right-of use assets) of RMB6.9 billion, finance costs of RMB1.6 billion, partially offset by gains on disposal of investments in subsidiaries of RMB1.8 billion, (ii) changes in working capital, which primarily resulted from an increase in trade receivables, prepayment, contract assets and other receivable of RMB6.2 billion, partially offset by an increase in trade payables, contract liabilities, and other payables of RMB4.6 billion, and (iii) income tax paid of RMB2.6 billion.

Net Cash Used in Investing Activities

For the six months ended June 30, 2024, our net cash used in investing activities was RMB15.4 billion, primarily attributable to payments for acquisitions of financial assets at fair value through profit or loss of RMB39.5 billion and purchase of property, plants, and equipments and other non-current assets of RMB5.1 billion, partially offset by proceeds from redemption of financial assets at fair value through profit or loss of RMB28.4 billion.

In 2023, our net cash used in investing activities was RMB13.5 billion, primarily attributable to payments for acquisitions of financial assets at fair value through profit or loss of RMB94.0 billion and purchase of property, plants, and equipments and other non-current assets of RMB12.5 billion, partially offset by proceeds from redemption of financial assets at fair value through profit or loss of RMB93.4 billion.

In 2022, our net cash used in investing activities was RMB12.1 billion, which was primarily attributable to (i) payments for acquisitions of financial assets at fair value

– II-293 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

through profit or loss of RMB151.9 billion, and (ii) payments for purchases of property, plant and equipment and other non-current assets of RMB14.2 billion, partially offset by proceeds from redemption of financial assets at fair value through profit or loss of RMB154.9 billion.

In 2021, our net cash used in investing activities was RMB17.1 billion, which was primarily attributable to (i) payments for acquisitions of financial assets at fair value through profit or loss of RMB118.2 billion, and (ii) payments for purchases of property, plant and equipment and other non-current assets of RMB19.2 billion, partially offset by proceeds from redemption of financial assets at fair value through profit or loss of RMB114.8 billion.

Net Cash Generated From/(Used in) Financing Activities

For the six months ended June 30, 2024, our net cash used in financing activities was RMB6.2 billion, which was primarily attributable to repayment of bank borrowings of RMB15.7 billion, payments of lease liabilities of RMB3.7 billion, net cash consideration paid to non-controlling interests without change of control of RMB3.4 billion, dividend paid of RMB2.9 billion and payments for repurchase of shares of RMB1.4 billion, partially offset by proceeds from drawdown of bank borrowings of RMB19.6 billion and proceeds from corporate bonds and short-term debentures issuance of RMB3.3 billion.

In 2023, our net cash used in financing activities was RMB13.0 billion, which was primarily attributable to repayment of bank borrowings of RMB22.4 billion, repayment of corporate bonds and short-term debentures of RMB10.1 billion, payments of lease liabilities of RMB7.8 billion, net cash consideration paid to non-controlling interests without change of control of RMB1.8 billion and interests paid of RMB1.8 billion, partially offset by proceeds from drawdown of bank borrowings of RMB32.5 billion and proceeds from corporate bonds and short-term debentures issuance of RMB1.5 billion.

In 2022, our net cash used in financing activities was RMB16.0 billion, which was primarily attributable to repayment of bank borrowings of RMB31.2 billion, payments of lease liabilities of RMB7.8 billion, repayment of corporate bonds and short-term debentures of RMB6.7 billion, net cash consideration paid to non-controlling interests without change of control of RMB3.9 billion, payments for repurchase of shares of RMB2.0 billion, interests paid of RMB1.5 billion and dividend paid to non-controlling interests of RMB1.4 billion, partially offset by proceeds from drawdown of bank borrowings of RMB27.7 billion and proceeds from corporate bonds and short-term debentures issuance of RMB11.9 billion.

In 2021, our net cash generated from financing activities was RMB20.5 billion, which was primarily attributable to proceeds from drawdown of bank borrowings of RMB31.4 billion, capital injection from owners of our Company of RMB19.9 billion, and proceeds from corporate bonds and short-term debentures issuance of RMB13.1 billion, partially offset by repayment of bank borrowing of RMB23.8 billion, dividend paid by subsidiaries (announced prior to acquisition) of RMB10.8 billion, payments of lease liabilities of RMB7.0 billion and repayment of corporate bonds and short-term debentures of RMB2.8 billion.

– II-294 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

INDEBTEDNESS AND GUARANTEES

The following table sets out a breakdown of our indebtedness and guarantees as of the dates indicated:

Borrowings Lease liabilities Total indebtedness Guarantees Total indebtedness and guarantees	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 45,100,418 49,868,308 52,706,015 16,931,554 15,179,328 13,808,460 62,031,972 65,047,636 66,514,475 402,420 895,374 782,000 62,434,392 65,943,010 67,296,475	As of June 30, 2024 RMB’000 59,635,102 13,012,472 72,647,574 782,000 73,429,574	As of September 30, 2024 RMB’000 (Unaudited) 49,485,578 12,788,410
			62,273,988 782,000
			63,055,988

Borrowings

The following table sets out details of our borrowings as of the dates indicated:

Non-current: Long-term bank borrowings Corporate bonds Loans from non-controlling interests	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 3,510,829 7,472,010 11,355,241 15,656,370 18,927,508 18,794,782 217,267 187,243 246,889 19,384,466 26,586,761 30,396,912	As of June 30, 2024 RMB’000 10,661,466 19,710,996 228,220 30,600,682	As of September 30, 2024 RMB’000 (Unaudited) 6,611,620 19,346,293 184,107
			26,142,020

– II-295 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Current: Current portion of long-term bank borrowings Short-term bank borrowings Short-term debentures Corporate bonds Loans from non-controlling interests	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,458,374 600,680 2,813,385 19,265,534 13,830,048 18,765,366 4,029,936 5,062,357 – 830,321 3,661,225 615,295 131,787 127,237 115,057 25,715,952 23,281,547 22,309,103	As of June 30, 2024 RMB’000 2,594,948 23,883,437 2,310,195 113,666 132,174 29,034,420	As of September 30, 2024 RMB’000 (Unaudited) 2,199,528 18,021,366 2,322,672 667,510 132,482
			23,343,558

Our non-current borrowings amounted to RMB19.4 billion and RMB26.6 billion as of December 31, 2021 and 2022, respectively, primarily in relation to our working capital requirements and our acquisition and consolidation of certain subsidiaries. Our non-current borrowings amounted to RMB30.4 billion as of December 31, 2023, primarily in relation to our working capital requirements. Our non-current borrowings remained relatively stable at RMB30.6 billion as of June 30, 2024. Our non-current borrowings decreased to RMB26.1 billion as of September 30, 2024, primarily due to the decrease in our long-term bank borrowings.

Our current borrowings decreased by 9.5% from RMB25.7 billion as of December 31, 2021 to RMB23.3 billion as of December 31, 2022, primarily attributable to the repayment of borrowings. Our current borrowings remained relatively stable at RMB22.3 billion as of December 31, 2023. Our non-current borrowings increased by 30.1% to RMB29.0 billion as of June 30, 2024, primarily due to the increases in our unsecured short-term bank borrowings and short-term debentures. Our current borrowings decreased to RMB23.3 billion as of September 30, 2024, primarily due to the decrease in our short-term bank borrowings.

Bank Borrowings

Our outstanding bank borrowings amounted to RMB24.2 billion, RMB21.9 billion, RMB32.9 billion, RMB37.1 billion and RMB26.8 billion as of December 31, 2021, 2022 and 2023 and June 30 and September 30, 2024, respectively. During the Track Record Period, most of our bank borrowings were unsecured. As of September 30, 2024, our unutilized banking facilities amounted to RMB65.4 billion.

– II-296 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Corporate Bonds and Short-Term Debentures

Our corporate bonds and short-term debentures amounted to RMB20.5 billion, RMB27.7 billion, RMB19.4 billion, RMB22.1 billion and RMB22.3 billion as of December 31, 2021, 2022 and 2023 and June 30 and September 30, 2024, respectively.

Lease Liabilities

Our lease liabilities represent the leased premises for our logistics networks and infrastructure, vehicles and machineries. We recorded non-current lease liabilities of RMB10.9 billion, RMB8.6 billion, RMB8.0 billion, RMB7.5 billion and RMB7.4 billion as of December 31, 2021, 2022 and 2023 and June 30 and September 30, 2024, respectively. We recorded current lease liabilities of RMB6.0 billion, RMB6.6 billion, RMB5.8 billion, RMB5.5 billion and RMB5.4 billion as of December 31, 2021, 2022 and 2023 and June 30 and September 30, 2024, respectively. Fluctuations in our lease liabilities during the Track Record Period were primarily reflecting (i) the increased need for leased premises in line with our business growth, (ii) our consolidation of subsidiaries, and (iii) rent payments.

Except as discussed above, as of September 30, 2024, we did not have any material mortgages, charges, debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness, finance lease or hire purchase commitments, liabilities under acceptances (other than normal trade bills), acceptance credits, which are either guaranteed, unguaranteed, secured or unsecured, or guarantees or other contingent liabilities.

Our Directors confirm that our Group did not experience any difficulty in obtaining bank loans and other borrowings, any material default in the payments of trade and non-trade payables, bank loans and other borrowings, or any material breach of covenants during the Track Record Period and up to the Latest Practicable Date.

Our Directors further confirm that there has not been any material change in our indebtedness since the Latest Practicable Date up to the date of this prospectus.

CONTINGENT LIABILITIES

As of December 31, 2021, 2022 and 2023 and June 30, 2024, we did not have any material contingent liabilities.

– II-297 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

CAPITAL COMMITMENTS

Our capital commitments are related to (i) contracted, but not provided for purchase of property, plant and equipment, (ii) investment to be paid, and (iii) others.

The following table sets forth details of our capital commitments as of the dates indicated:

Contracted, but not provided for purchase of property, plant and equipment Investment to be paid Others Total	As of December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 10,432,197 3,571,632 1,858,672 3,134,839 1,811,611 131,895 11,067 – 944 13,578,103 5,383,243 1,991,511	As of June 30, 2024 RMB’000 2,378,529 129,783 4,663
		2,512,975

CAPITAL EXPENDITURES

Our capital expenditures consist of additions of freehold land and buildings, aircraft, aircraft engines, rotables and high-value maintenance, machinery and equipment, transportation vehicles, computers and electronic equipment, office and other equipment, leasehold improvements and construction in progress. The following table sets forth details of our capital expenditures for the years/periods indicated:

Freehold land and buildings Aircraft, aircraft engines, rotables and high-value maintenance Machinery and equipment Transportation vehicles Computers and electronic equipment Office and other equipment Leasehold improvements Construction in progress Total	Year ended December 31, 2021 2022 2023 RMB’000 RMB’000 RMB’000 1,554,841 1,127,848 1,272,496 182,844 140,452 343,764 442,803 482,359 346,663 1,203,826 1,050,894 1,189,776 847,928 805,552 425,863 411,226 397,571 381,899 103,976 145,557 135,955 15,239,042 12,409,834 8,109,500 19,986,486 16,560,067 12,205,916	Six months ended June 30, 2024 RMB’000 888,879 162,499 139,515 293,188 165,954 72,492 123,483 2,732,537
		4,578,547

– II-298 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

We funded our capital expenditure requirements during the Track Record Period primarily with our cash from operating activities, and proceeds from external debts and other fundraising activities. We expect to finance our capital expenditures through a combination of cash and cash equivalents, cash generated from our operating activities and fundraising activities, and the estimated net proceeds from the Global Offering. See “Future Plans and Use of Proceeds — Use of Proceeds” in this prospectus. Our current capital expenditure plans for any future period are subject to change, and we may adjust our capital expenditures according to our future cash flows, financial condition and results of operations, our business plans, market conditions and various other factors.

OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS

During the Track Record Period and as of the Latest Practicable Date, we did not have any material off-balance sheet commitments or arrangements.

MATERIAL RELATED PARTY TRANSACTIONS

For details about our related party transactions during the Track Record Period, see Note 38 to the Accountant’s Report in Appendix I to this prospectus.

We enter into transactions with our related parties from time to time. Our Directors are of the view that each of the related party transactions set out in Note 38 to the Accountant’s Report in Appendix I to this prospectus was conducted in the ordinary course of business on an arm’s length basis and on normal commercial terms between the relevant parties. Our Directors are also of the view that our related party transactions during the Track Record Period would not distort our track record results or cause our historical results to become non-reflective of our future performance.

KEY FINANCIAL RATIOS

The following table sets forth a summary of our key financial ratios for the years/periods indicated:

				Six months ended	Six months ended
	Year ended December 31,			June 30,
	2021	2022	2023	2023	2024
				(unaudited)
Gross profit margin(1)	12.4%	12.3%	12.6%	13.3%	13.6%
Net profit margin(2)	2.1%	2.6%	3.1%	3.1%	3.5%
EBITDA margin (non-IFRS
measure)(3)	10.5%	10.8%	11.4%	11.8%	11.9%

Notes:

(1) Represents gross profit for the year/period divided by revenue for the same year, expressed as a percentage.
(2) Represents profit for the year/period divided by revenue for the same year, expressed as a percentage.
(3) For details, see “— Non-IFRS Measures.”

– II-299 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Our gross profit margin was 12.4%, 12.3%, 12.6%, 13.3% and 13.6% in 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, respectively. For details, see “— Description of Selected Components of Consolidated Statements of Profit or Loss — Gross Profit and Gross Profit Margin.”

Our net profit margin was 2.1%, 2.6%, 3.1%, 3.1% and 3.5% in 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, respectively. For details, see “— Period-to-Period Comparison of Results of Operations.”

Our EBITDA margin (non-IFRS measure) was 10.5%, 10.8%, 11.4%, 11.8% and 11.9% in 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, respectively. For details, see “— Non-IFRS Measures.”

QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT FINANCIAL RISKS

We are exposed to a variety of financial risks, including market risks (such as foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk, as set out below. We manage and monitor these exposures to ensure appropriate measures are implemented on a timely and effective manner. For details, see Note 3.1 to the Accountant’s Report in Appendix I to this prospectus.

Market Risks

Foreign Exchange Risk

Our major operational activities are carried out in mainland China and a majority of the transactions are denominated in RMB. Some of our operational activities are carried out in regions and countries including Hong Kong and United States, and the relevant transactions are settled in HKD and USD, respectively. Foreign exchange risk arises when future commercial transactions or recognized assets and liabilities are denominated in a currency that is not the respective functional currency of our subsidiaries. Our overseas operations (namely, operations outside of mainland China) recorded revenue denominated in foreign currencies of RMB18.2 billion, RMB58.9 billion, RMB34.9 billion, RMB17.0 billion and RMB18.4 billion for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, respectively, accounting for 8.8%, 22.0%, 13.5%, 13.7% and 13.7% of our total revenue for the same year/period, respectively. Foreign currency-denominated income from the principal businesses of our overseas operations primarily consisted of freight charges. Such income is denominated primarily in HKD and USD. In managing the foreign exchange risks, we preferentially deploy natural hedges, and may also deploy a netting pool to net-off the foreign exchange risk exposures of account receivables and account payables in the same currencies. Moreover, foreign exchange risks also arise from foreign currency-denominated debts undertaken by our overseas operations. These debts are mainly denominated in USD. Based on the foregoing, and considering that USD is pegged against HKD at a rate ranging from 7.75 to 7.85, we believe our foreign exchange risk exposure is manageable.

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During the Track Record Period, we maintained certain hedging policies in an effort to reduce our exposure to foreign exchange risks, which we believe were proven to be reasonably effective in managing our exposures to foreign exchange risks. Such hedging policies include, but are not limited to, the following:

Principles

In principle, we shall conduct hedging transactions only based on actual underlying business transactions, and such transactions shall not be for any speculative purposes.
We shall preferentially utilize natural hedges to reduce our foreign exchange risk exposures. Where natural hedges cannot sufficiently cover our risk exposures, we may utilize other hedging instruments, depending on the relevant circumstances.
In terms of hedging instruments, we in principle shall use plain vanilla and common hedging instruments, and shall not use structural hedging instruments.

Approval Mechanisms

Each of our subsidiaries shall, as of the end of each fiscal year, submit their foreign exchange requirements that may occur in the upcoming fiscal year to the treasury center of our Group’s finance department. The treasury center shall accordingly assess and propose the relevant hedging limit for the upcoming fiscal year.
Our annual hedging limit shall be approved by our Board of Directors or Shareholders, as appropriate, at the beginning of each fiscal year.
We shall perform risk assessment before we conduct any hedging transaction, and shall only deal with reputable and well-established banks with a global presence.

We also manage our foreign exchange risk by performing regular reviews of our net foreign exchange risk exposures. For further details of our foreign exchange risk exposures, see Note 3 to the Accountant’s Report in Appendix I to this prospectus.

Price Risk

We are exposed to equity price risk mainly arising from investments held by us that are classified either as FVPL or FVOCI that will not be sold within one year.

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Interest Rate Risk

Our interest rate risk primarily arises from long-term interest-bearing borrowings and bonds. Long-term borrowings issued at variable rates expose our Group to cash flow interest rate risk. Bonds issued at fixed rates expose us to fair value interest rate risk. We determine the proportion of borrowings and bonds issued at variable rates and fixed rates based on the market environment. We have been monitoring the level of interest rates. The increase in the interest rates will increase the interest costs of borrowings and finance leases issued at variable rates, which will further impact our performance. To hedge against the variability in the cash flows arising from a change in market interest rates, we have entered into certain interest rate swaps to swap variable rates into fixed rates.

The sensitivity analysis below has been determined based on the exposure to interest rates at the end of each year/period during the Track Record Period. The analysis is prepared assuming the financial instruments outstanding at the end of each year/period during the Track Record Period were outstanding for the whole year.

If the interest rate had been 50 basis points higher or lower, with all other variables held constant, the profit before tax would have been lower or higher RMB17.6 million, RMB37.4 million, RMB56.8 million and RMB53.3 million, as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively.

Credit Risk

Our carrying amounts of cash and cash equivalents, restricted cash, trade receivables, contract assets, and other receivables represent our major exposure to credit risk in relation to financial assets.

Credit Risk of Trade Receivables and Contract Assets

There is no concentration of credit risk with respect to trade receivables from third party customers, as we have an extensive and diverse customer base. In order to minimize the credit risk, our management has delegated a team in each business unit responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, we closely monitor the credit qualities and the collectability of these receivables at the end of each reporting period to ensure that adequate impairment losses are made. In this regard, our Directors consider that the expected credit risks are adequately covered.

Our Group has applied the IFRS 9 simplified approach to measuring expected credit losses, which uses lifetime expected credit losses for all trade receivables and contract assets. In calculating the expected credit loss rates, our Group considers historical loss rates, and adjusts for forward looking macroeconomic data. At the end of each reporting period, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

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Credit Risk of Other Receivables

Over the term of other receivables, our Group accounts for our credit risk by appropriately providing for expected credit losses on a timely basis. To assess whether there is a significant increase in credit risk in other receivables, our Group compares the risk of a default occurring on the assets at the end of each reporting period with the risk of default at the date of initial recognition.

Liquidity Risk

We aim to maintain sufficient cash and cash equivalents. Due to the dynamic nature of our businesses, we maintain flexibility in funding by maintaining adequate balances.

DIVIDENDS AND DIVIDEND POLICY

Our Company declared dividends of RMB874.5 million, RMB1.2 billion and RMB2.9 billion in respect of the financial years ended December 31, 2021, 2022 and 2023, respectively, representing dividend payout ratios of 20%, 20% and 35%, respectively. As of the Latest Practicable Date, we have paid the dividends declared in respect of the financial years ended December 31, 2021, 2022 and 2023 in full. See Note 12 to the Accountant’s Report in Appendix I to this prospectus. To further increase the investment return for our Shareholders, the resolution of an interim dividend of approximately RMB1.9 billion, representing a dividend payout ratio of approximately 40% in respect of the six months ended June 30, 2024, and a special dividend of approximately RMB4.8 billion was passed at the Shareholders’ general meeting on October 29, 2024. These dividends have been paid in full on November 7, 2024. After completion of the Global Offering, our Shareholders will be entitled to receive any dividends we declare. We may distribute dividends by way of shares or cash, or a combination of both shares and cash. Pursuant to our Articles of Association, our Board may declare dividends in the future after taking into account our results of operations, financial condition, cash requirements and availability and other factors as it may deem relevant at such time. Any declaration and payment as well as the amount of dividends will be subject to our constitutional documents, applicable PRC Law and approval by our Shareholders.

We intend to distribute cash dividends to our Shareholders at least on an annual basis, subject to the discretion of our Directors in accordance with our Articles of Association and the applicable laws and regulations in the PRC and Hong Kong.

Our dividend payout ratio increased from 20% (from 2017 to 2022) to 35% in 2023, and we aim to steadily increase this over the next five years. Decisions to declare or to pay any dividends in the future will depend on, among other things, our Company’s profitability, operations and development plans, external financing environment, costs of capital, our Company’s cash flows and other factors that our Directors may consider relevant.

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Our future declarations of dividends may not be in line with our historical declaration of dividends and will be subject to the approval of our Shareholders. See “Risk Factors — Risks Relating to the Global Offering — Our historical dividends may not be indicative of our future dividend policy, and there can be no assurance that we will declare and distribute any amount of dividends in the future” in this prospectus.

WORKING CAPITAL CONFIRMATION

Taking into account the financial resources available to us, including our cash and cash equivalents on hand, operating cash flows, available financing facilities, and the estimated net proceeds from the Global Offering, our Directors are of the view that we have sufficient working capital to meet our present requirements and for at least the next 12 months from the date of this prospectus.

DISTRIBUTABLE RESERVES

As of June 30, 2024, our Company had retained earnings of RMB40.7 billion. Our retained earnings represented the distributable reserves available for distribution to our Shareholders.

LISTING EXPENSES

We expect to incur a total of approximately RMB155.9 million of listing expenses in connection with the Global Offering, representing approximately 2.9% of our gross proceeds from the Global Offering (assuming an Offer Price of HK$34.30 per Offer Share, being the mid-point of the indicative Offer Price range between HK$32.30 and HK$36.30, and assuming that the Over-allotment Option is not exercised). Listing expenses include (1) underwriting-related expense (including sponsor fees and underwriting commissions, SFC transaction levy, AFRC transaction levy, and Stock Exchange trading fees for all Offer Shares) of approximately RMB80.8 million, and (2) non-underwriting related expenses of approximately RMB75.1 million, which consist of (i) fees for legal advisors and the reporting accountants of approximately RMB55.2 million, and (ii) other fees unrelated to the underwriting of RMB19.9 million.

During the Track Record Period, listing expenses in an aggregate of RMB0.6 million were incurred as of June 30, 2024 and charged to our consolidated statement of profit or loss. We estimate that RMB13.0 million of listing expenses will be charged to our consolidated statement of profit or loss for the year ended December 31, 2024. The remaining RMB142.3 million is directly attributable to the issue of our H Shares to the public and is expected to be deducted from equity.

The listing expenses above are the best estimate as of the Latest Practicable Date and for reference only. The actual amount may differ from this estimate.

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UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS

The following unaudited pro forma statement of our adjusted net tangible assets prepared in accordance with Rule 4.29 of the Listing Rules is to illustrate the effect of the Global Offering on our consolidated net tangible assets attributable to the shareholders as of June 30, 2024 as the Global Offering had taken place on that date.

The unaudited pro forma statement of adjusted net tangible assets has been prepared for illustrative only and, because of its hypothetical nature, it may not give a true picture of our consolidated net tangible assets had the Global Offering been completed as of June 30, 2024 or any future dates.

			Unaudited
			pro forma
	Audited		adjusted
	consolidated		consolidated
	net tangible		net tangible
	assets of our		assets of our
	Group		Group
	attributable	Estimated net	attributable	Unaudited pro forma
	to owners of	proceeds	to owners of	adjusted consolidated net
	our Company	from the	our Company	tangible assets of our Group
	as of June 30,	Global	as of June 30,	attributable to owners of our
	2024	Offering	2024	Company per Share
	RMB’000	RMB’000	RMB’000	RMB	HK$
	(Note 1)	(Note 2)	(Note 3)	(Note 4)
Based on an Offer Price of
HK$32.30 per Offer Share	71,329,826	4,895,906	76,225,732	15.32	16.67
Based on an Offer Price of
HK$36.30 per Offer Share	71,329,826	5,511,439	76,841,265	15.44	16.80

Notes:

(1) The audited consolidated net tangible assets of our Group attributable to the owners of our Company as of June 30, 2024 is extracted from the Accountant’s Report set out in Appendix I to this prospectus, which is based on the audited consolidated net assets of our Group attributable to the owners of our Company as of June 30, 2024 of RMB88,571,197,000 after deducting our Group’s intangible assets attributable to the owners of our Company of RMB17,241,371,000 as of June 30, 2024.
(2) The estimated net proceeds from the Global Offering are based on 170,000,000 Offer Shares and the indicative Offer Price of HK$32.30 per Offer Share and HK$36.30 per Offer Share, being low and high end of the indicative Offer Price range, after deduction of the underwriting fees and other related expenses (excluding listing expenses of RMB579,000 which were incurred up to June 30, 2024 and charged to consolidated statement of profit or loss for the period ended December 31, 2023 and six months ended June 30, 2024).

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(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the adjustments referred to in the preceding paragraphs and on the basis that 4,975,711,636 Shares (representing 4,815,911,220 Shares in issue as of June 30, 2024, excluding 10,199,584 treasury shares as of June 30, 2024, adding 170,000,000 Offer Shares) were in issue, assuming that the Global Offering had been completed on June 30, 2024 but does not take into account of any Shares which may be allotted and issued by our Company pursuant to the exercise of the Over-allotment Option or may be issued by our Company pursuant to the exercise of any options may be granted under the 2022 Stock Option Incentive Plan.
(4) For the purpose of the unaudited pro forma statement of adjusted consolidated net tangible assets, the translation of Renminbi amounts into Hong Kong dollars was of rate of RMB0.91906 to HK$1.00. No representation is made that Renminbi amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, at that rate.
(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets to reflect any trading results or other transactions of our Group entered into subsequent to June 30, 2024. In particular, the unaudited pro forma adjusted net tangible assets of the Group has not taken into account payment of a dividend of RMB6.7 billion which was approved by the Shareholders at the first extraordinary general meeting on October 29, 2024. The unaudited pro forma net tangible assets per Share would have been HK$15.20 and HK$15.34 per Share based on the Offer Price of HK$32.30 and HK$36.30 respectively if the dividend had been accounted for as at June 30, 2024.

For further details, see Unaudited Pro Forma Financial Information in Appendix II to this prospectus.

NO MATERIAL ADVERSE CHANGE

Our Directors confirm that, as of the date of this prospectus, there has been no material adverse change in our financial or trading position, indebtedness, mortgages, contingent liabilities, guarantees or prospects since June 30, 2024, the end of the period reported on the Accountant’s Report in Appendix I to this prospectus.

DISCLOSURE REQUIRED UNDER THE LISTING RULES

We confirm that, as of the Latest Practicable Date, there were no circumstances that would give rise to disclosure required under Rules 13.13 to 13.19 of the Listing Rules.

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(E) MANAGEMENT DISCUSSION AND ANALYSIS OF S.F. HOLDING FOR THE YEAR ENDED DECEMBER 31, 2024

Industry Review in 2024

Domestic Market

China’s economy has achieved steady development with an accelerated transition from old to new dynamics. According to the data from National Bureau of Statistics, China’s GDP reached RMB134.9 trillion in 2024, representing an increase of 5.0% over the previous year, and continuing to be a significant engine for global economic growth. Large enterprises and strategic emerging industries significantly boosted economic growth, with major companies’ value-added industrial output growing by 5.8%, driven by sectors such as intelligent equipment and new energy. High-tech manufacturing was particularly strong, increasing by 8.9%, as the impact of strategic emerging industries on the economy continued to expand. The total retail sales of consumer goods were RMB48.8 trillion, among which, the online retail sales of physical goods reached RMB13.1 trillion, representing a year-on-year increase of 6.5%, showing a stabilization in e-commerce penetration. At the policy level, the state focused on propelling domestic demand and industrial upgradation. The Action Plan for Promoting Large-Scale Equipment Renewals and Consumer Goods Trade-ins issued by the State Council proposed equipment renewal, consumer goods trade-in, recycling and reuse, standard improvement, and other critical actions aiming to stimulate economic vitality through market mechanisms and promote both quantitative and qualitative improvements in economic activities along with structural optimization.

In 2024, China’s logistics industry demonstrated enhanced quality and efficiency, supported by advancements in intelligent technologies and strategic depth, contributing to industrial upgrading. According to the data from China Federation of Logistics & Purchasing, the total cost of social logistics in 2024 was approximately RMB19.0 trillion, representing an increase of 4.1% over the previous year and accounting for 14.1% of the GDP, which decreased by 0.3 percentage point over the previous year. In particular, the express industry continuously adhered to the strategy of “go to the countryside, go to factories and go global” to improve people’s life quality, promote the industrial supply chain upgrade, and pave the way for the international trade. According to the data from State Post Bureau, express deliveries volume in China in 2024 exceeded 175.08 billion, representing an increase of 21.5% over the previous year. The revenue of China’s express delivery business in 2024 was RMB1.4 trillion, representing an increase of 13.8% over the previous year. Moreover, consumers’ focus on value-for-money will motivate companies and merchants to seek for efficiency enhancement and cost reduction for the supply chain. The reduced logistics cost and improved timeliness supported the consumer market and the real economy. In the future, logistics companies with capabilities in digital integration and global supply chain optimization are poised for significant growth in emerging industries.

Overseas Market

Amid global economic challenges, policy stimuli and regional cooperation drive resilient growth. The international market environment remains complex and dynamic,

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with geopolitical conflicts and intertwined uncertainties in international trade creating multiple constraints on economic recovery. However, global inflation rates have moderated, and major economies have shifted towards interest rate cuts in an effort to stimulate economic recovery. According to the International Monetary Fund (IMF), the global economic growth forecast for 2024 was 3.2%. Emerging markets and developing economies in Asia sustained robust growing headwinds, with a forecasted economic growth rate of 5.2%, continuously outpacing the global economy. Global trade demonstrates resilience under pressure. According to the data from the United Nations Conference on Trade and Development (UNCTAD), trade in goods has gradually rebounded, driven by further regional cooperation, with strong performance in information and communications technology sector and a mild growth in automobile trade.

China’s foreign trade realized paralleled growth in overall volume, incremental volume, and quality. According to the data from General Administration of Customs of the PRC, the total value of China’s imports and exports in 2024 amounted to RMB43.9 trillion, increased by 5.0% over the previous year. Among them, the total value of exports was RMB25.5 trillion, increased by 7.1% over the previous year. In terms of product categories, the export value of mechanical and electrical products increased by 8.7%, accounting for 59.4% of the total value of exports, with exports of high-end equipment increasing by over 40%. High-tech products gained favorable growth, with new high-tech products increasingly venturing overseas. The exports of self-owned brands in China hit a record high, booming cross-border e-commerce and other emerging business. In terms of business partners, China’s exports to over 160 countries and regions increased, including an increase of 9.6% in exports to countries involved in the Belt and Road Initiative and an increase of 13.4% in exports to ASEAN countries.

The international logistics market continued to rebound pillared by increased trade and cross-border e-commerce activities. According to the data from International Air Transport Association (IATA), the global overall demand for air freight in 2024 increased by approximately 11.3% over the previous year, outpacing the growth of air transport capacity over the same period, thereby driving continuous increase in the price of air freight throughout the year. In particular, the annual demand for air freight in Asia-Pacific experienced the fastest increase of 14.5% among all regions. Additionally, the price for sea freight from Asia-Pacific to Europe and to the Americas substantially increased, where the sea freight price for China exports hit its peak in the middle of 2024 and remained stable till the end of the year. Furthermore, along with the in-depth trade cooperation between China and ASEAN, RCEP member countries and countries involved in the Belt and Road Initiative, the industrial chain and supply chain were deeply interconnected with a smoother customs clearance of goods, spurring the growth of demand for international logistics and supply chain.

The globalization of Chinese enterprises in production capacity and brand expansion accelerating the globalization of China’s logistics sector. Driven by the restructuring of global industrial chains and China’s industrial upgrading, Chinese enterprises are accelerating in globalization and evolving into a new dual-track model that combines “production capacity globalization” and “brand globalization”. In production capacity globalization, industries such as 3C electronics, automotive manufacturing, garment OEM, lithium batteries, and photovoltaics have emerged as the main drivers. Enterprises have been actively setting up overseas production facilities,

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particularly as uncertainties in international trade and tariff policies intensify. This trend is further accelerating industrial chain restructuring and relocation, creating urgent demand among Chinese enterprises to establish comprehensive and efficient overseas supply chain systems. Regarding brand globalization, sectors including coffee/tea beverages, food & catering, and beauty/personal care have seen rapid growth. These industries are accelerating the establishment of overseas direct-operated stores and sales channels to actively expand in global consumer markets. This dual-track expansion is fundamentally supported by Chinese logistics providers’ competitive advantages in efficient supply chain management and cost-effectiveness. Through digital system integration, flexible supply chain network deployment, and large-scale operational capabilities, these enterprises are successfully translating domestic supply chain expertise into international market competitiveness. The continuous enhancement of China’s industrial chain capabilities and brand competitiveness, coupled with the global expansion of cross-border e-commerce marketplace and independent e-commerce websites, has created exceptionally favorable conditions and opportunities for Chinese comprehensive logistics service providers to expand globally alongside their clients.

Positioning and Competitive Strengths of the Company in the Logistics Industry

As the largest integrated logistics service provider in China and Asia, and the fourth largest player globally, the Company adheres to long-term sustainable and healthy development as well as foresight strategy. Amidst the ever-changing market, the Company is capable of promptly seizing development opportunities, pursuing continuous innovation and reform, reinforcing service capabilities, and navigating through business cycles together with its clients.

Diversified Logistics Network Connecting Asia and the World. Through organic growth and strategic mergers & acquisitions, the Company has built a one-stop integrated logistics service landscape with a more complete product portfolio, a more comprehensive network, and more diversified service scenarios, covering the end-to-end supply chain from production to sales and from domestic to abroad. The Company’s efficient and reliable logistics infrastructure network covered all cities in China and a number of countries and regions around the world, and it owns the largest air cargo fleet in Asia and the Ezhou cargo hub, enabling “reaching nationwide overnight and connecting the world the third day”. Meanwhile, the Company leverages extensive maritime, ground, and rail transportation resources and routes to provide clients with multi-modal solutions for domestic and cross-border transportation of LTL and bulk cargo. The acquisition and integration of KLN have further strengthened the Company’s local logistics capabilities in Southeast Asia and its international freight forwarding capacity of connecting Asia with the world. Amidst the complex and volatile trade environment and the accelerated restructuring of the global industry chain, the Company is capable of adapting swiftly and flexibly to market shifts with integrated logistics expertise and the solid network coverage overseas, especially in Asia, and reshaping the supply chain structure in China and overseas together with its customers across industries to withstand market risks for a successful international expansion.

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Leading Position in Multiple Logistics Sub-Segments in China and Asia. Leveraging the time-definite and high-density network, with the “1-to-n” expansion strategy, the Company has quickly transformed from China’s leading time-definite express service provider into a leading global integrated logistics service provider. The Company enjoys an unrivaled leading position in China in terms of time-definite express services and is also a market leader in China in terms of logistics sub-segments including LTL freight, cold chain logistics, third-party intra-city on-demand delivery, and non-state-owned independent third-party supply chain solutions. In particular, SF Freight ranked first in terms of revenue from LTL transportation for five consecutive years (2020-2024) in the List of LTL Transport Enterprises in China (中國零擔企業排行榜) issued by Wetuc Think Tank (運聯智庫), and SF Cold Chain ranked first for six consecutive years (2019-2024) in the “China Top 100 Cold Chain Logistics List”* (中國冷鏈物流百強企業榜) issued by the Cold Chain Logistics Committee of China Federation of Logistics & Purchasing. According to Frost & Sullivan, the Company was also Asia’s largest provider of overall express delivery, LTL freight delivery and third-party intra-city on-demand delivery, and had the largest international operation among Asia-based integrated logistics service providers.

Unique Business Model — Directly-Operated, Integrated, and Independent Third-Party. Direct operation ensures highly unified top-down strategic alignment and rapid business execution for swift adaptation to market changes and successful incubation of more new business formats within a short period of time, with the strong operational control backing the Company’s unrivaled leading position of delivery timeliness and overall customer satisfaction over the years. Second, the Company offers comprehensive logistics solutions, standardized or customized, to address a full range of customers’ logistics demand, capture greater share in the customers’ supply chain service across industries for better customer stickiness and business growth. Third, the Company is independent of e-commerce platforms, allowing for its impartial services to customers, with over 2.3 million customers with active credit accounts and over 730 million retail customers as of the end of 2024, and is capable of grasping emerging opportunities more quickly and building long-term sustainable relationships with customers under the evolving market of new retail platforms and businesses.

Advanced Technology Empowering a Highly Efficient and Intelligent Supply Chain. Amid the trend of “express-style logistics” and growing customer demand for intelligent, high-efficiency supply chains, technology has become an indispensable driver in building digital, automated, and smart supply chain systems. The Company remains committed to innovative R&D and technological advancement, continuously spearheading internal and external digital-intelligent supply chain transformation. Through its self-developed SF Smart Brain, the Company ensures efficient network operations despite its extensive logistics network, diverse service ecosystem, and global business reach. Furthermore, leveraging its cutting-edge technological solutions, the Company collaborates deeply with cross-industry clients to empower holistic supply chain decision-making, operational efficiency gains, and cost reduction. Notably, the Company has been named a finalist for the 2025 Franz Edelman Award — the highest global accolade in operations research and management science — making it the sole Chinese representative in this year’s finals.

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Premium Services Forging Unparalleled Brand Value. “Let me SF this to you” has become synonymous with “Let me express mail this to you.” In China, our household brand name has become a commonly used verb for time-definite express. SF brand means premium services. Many business customers actively advertise their use of SF delivery for consumers’ impression and trust on their product quality. As published by the State Post Bureau, the Company has been ranked first for 15 consecutive years (2009 to 2023) and the first three quarters of 2024 (annual results not yet released) for overall customer satisfaction. Attributable to the peer-leading track record and reputation in providing premium services, the Company has accumulated the most extensive customer base across varied industry sub-segments, with high customer loyalty and stickiness, and served as a highly reliable logistics partner for customers.

Overall, both China and Asia have an enormous logistics market. Though securing a leading position across industry verticals, the Company still has tremendous promise for future integration and expansion under the huge and fragmented potential logistics market. The long-term strategic vision, prospective business layout, high-quality service, and strong technology capabilities will contribute to the Company’s excelling and everlasting success from the competition.

Business Development of the Company

Accelerating penetration into the supply chains of customers across major industries

In 2024, the Company formulated business strategies aimed at accelerating transformation to industry logistics solutions, shifting from traditional selling standardized products (such as standardized express or freight delivery services) to selling industry logistics solutions. It is committed to providing industry-specific and customized integrated logistics solutions and standardized portfolio service to industry leaders, mid-market enterprises, and SMEs across sectors. Through in-depth analysis of industrial trends and identification of logistics scenario opportunities, the Company enhanced capabilities in developing core scenario-specific logistics solutions and standardized portfolio service. By expanding presence across clients’ upstream and downstream supply chain ecosystems, it achieved scalable business growth. Due to deepened penetration into customers’ supply chains, in 2024, the Company’s logistics revenue saw a year-on-year increase of 20% or above in e-commerce and circulation, telecommunication and high-tech, automobiles, and industrial manufacturing sectors.

E-commerce and Circulation: The Company actively expanded its cooperation with emerging e-commerce platforms in China across various business scenarios and models. By enhancing international air freight, express, and warehousing capabilities, the Company penetrated into more overseas business scenarios of major cross-border e-commerce platforms and secured more customers with self-built overseas e-commerce websites; furthermore, leveraging its robust logistics network and professional cold chain capabilities, the Company swiftly expanded into the thriving online shops on platforms and provided comprehensive O2O services to large-scale supermarkets, continuously solidifying its market share in the e-commerce and circulation industry.

Telecommunication and High-tech: The Company maintained a leading position in the distribution supply chain for consumer electronics, communication equipment,

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telecom operators and other segments. Additionally, through B2B bulk cargo transportation and cross-border logistics services, the Company extended services to the production supply chain. In particular, the Company developed end-to-end service capabilities in the import of high-end equipment and partnered with a number of leading high-end equipment manufacturers in the world for the successful completion of multiple import projects, covering the entire process of overseas pickup, export customs clearance, import customs clearance, and delivery.

Automobiles: The Company explored new supply chain scenarios, strengthened cooperation with benchmark brands by leveraging full-scenario service capabilities and boosted the rapid growth of upstream and downstream logistics businesses. In the automobile aftermarket, the Company’s integrated warehousing and distribution service for automobile parts has been successfully promoted to a number of automobile brands. Additionally, the Company cooperated with 70% of the Top 20 passenger vehicles brands and established full-scenario collaboration with 11 of these customers in the inbound, in-plant, finished product and after-sales scenarios.

Industrial Manufacturing: The Company built a cost-effective bulk cargo transportation network for the manufacturing industry and integrated the internal supply chain service capabilities, achieving breakthroughs in segments including industrial raw materials, industrial equipment, light manufacturing, energy and chemicals. Penetrating further into the cooperation with key customer groups across segments, the Company gained rapid growth in its business and successfully seized more shares of logistics services.

Meanwhile, the Company designed and optimized dozens of standardized portfolio service solutions for eight major industries to swiftly expand logistics services for customers across industries. The solutions in high-end equipment spare parts warehousing and distribution, cross-border transportation and allocation of consumer electronics raw materials, beauty and cosmetic warehousing and distribution, furniture delivery and assembly, and new energy battery materials logistics and other scenarios have been rapidly promoted, driving rapid revenue growth and significantly improved delivery efficiency. The average time from cooperation to project implementation has been reduced by 20 days, thereby improving the Company’s sales efficiency and conversion rate of industry customer business opportunities.

Time-definite Express

In 2024, the Company’s time-definite express achieved tax-exclusive revenue of RMB122.21 billion, representing a year-on-year increase of 5.8%, with the year-on-year increase of 11.8% in business volume. The business mix of time-definite parcel steadily expanded from business documents to consumption and industrial manufacturing, with consumption and industrial manufacturing-related delivery became major growth driver for time-definite express.

Continuous Improvement in Competitive Edges: Through leveraging the competitive edges of the Ezhou cargo hub and all-cargo fleet, as well as optimizing the

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integration between air and ground networks, the delivery time of SF speedy express has been continuously shortened, which strengthened its core competitiveness. Meanwhile, the Company focused on critical urban routes, the optimization of transportation pattern and the reduction in the number of transits, continuously upgrading the next morning delivery of SF standard express. Additionally, the Company utilized the remaining production capacity, and strategically expanded its presence in low-tier cities to increase network density in lower-tier markets in order to expand the business scale.

Accelerated Expansion of Air Freight Market: The Company’s time-definite service offerings expanded from small-parcel express to freight logistics, providing customers with large item air freight services between provinces in as fast as seven hours. In terms of capabilities, the Company leveraged abundant dedicated and chartered aircraft resources and established 24 exclusive intelligent sorting centers. The number of cities with direct pick-up or delivery services between customers and airports has increased to 164 and the next-day timeliness completion rate for large item air freight increased by 7.3 percentage points over the previous year. In terms of business development, the Company dedicated to scenario-customized solutions, offering value-added services such as dedicated personnel and vehicles, as well as nighttime pickup and delivery, and efficiently addressed urgent demands within 24 hours from response to delivery to production line. The Company also customized air freight solutions for oversized and overweight goods or goods with magnetic or electric properties. In 2024, the volume of large item air freight business increased by over 20%.

Strengthening the Efficient Fulfilment of Intra-city Express Delivery: The Company’s half-day express delivery service, with an average fulfillment time of 4-6 hours for intra-city and cross-city within economic regions, has been expanded to 291 cities. Meanwhile, the Company has implemented the “upper-layer warehouse, lower-layer sorting” pattern in 104 locations, seamlessly integrating warehouse operations with sorting schedules. Leveraging frequent sorting and transportation schedules to complete rapid distribution, the Company achieved an intra-city express fulfillment time of 4-6 hours, as well as the same-day or next-morning delivery within provinces and for economic regions, enabling efficient order fulfillment for a wide range of businesses. Additionally, leveraging its technological and operational capabilities and integrating external resources, the Company has steadily penetrated the urban freight market, achieving breakthroughs in urban store distribution scenarios such as wholesale snacks, tea beverages, and supermarkets, and established an efficient urban distribution network to enlarge the scale of intra-city logistics services.

Securing Market Share in E-commerce Return Parcels: By leveraging its efficient door-to-door pickup and end-to-end delivery, the Company continuously strengthened its partnership with major e-commerce platforms for return parcel services. Meanwhile, the Company featured a dedicated “Online Shopping Returns” section on SF App and mini-program to address customers’ self-service return needs. The Company’s e-commerce return parcel services experienced rapid growth and maintained a leading market share.

Strengthening Competitive Edges with the Ezhou cargo hub: Leveraging Ezhou cargo hub’s nationwide and global connectivity, the Company offered integrated

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warehousing and transit services to support customers in establishing efficient supply chains with its utmost efficiency of “delivery in the evening with arrival in the next morning”. By the end of 2024, the Company has operated 55 domestic routes and 15 international routes through the Ezhou cargo hub. Many customers in various industries have already established their presence in relevant warehousing facilities, encompassing high-end industries including 3C high-tech, FMCG, pharmaceuticals, automobiles and engineering machinery. Additionally, the Company actively solicited investment around the Ezhou cargo hub with successful investment projects worth of billions, enriching the hub’s supply chain ecosystem and expecting to generate significant growth in air cargo services in the future.

Economy Express

In 2024, the Company’s economy express business achieved tax-exclusive revenue of RMB27.25 billion, representing a year-on-year increase of 8.8%. Committed to high-quality business development, the Company completed the sale of Fengwang Express, which operated under the franchise model, in June 2023. Excluding Fengwang Express, the economy express revenue in 2024 increased by 11.8% year-on-year, while the business volume increased by 17.5% compared to the previous year.

Expanding the Scale of Economy Express Business: The Company maintained robust growth in its economy express services, which are pivotal in the e-commerce market for their timely, stable, and high-quality door-to-door services. Leveraging its improvement of digital and intelligent capabilities, the precise matching of resources and the transformation of the operation mode, the Company adopted appropriate business strategies for goods of different weight ranges and further expanded the market for economy express delivery.

Expanding Warehousing and Distribution Integration Services to More Industry Scenarios: Leveraging its nationwide warehouse network, standardized integrated warehousing and distribution products and solutions, professional operational team, and end-to-end system deployment capabilities, the Company provides customers with cost-effective integrated warehousing and distribution services. Compared to its competitors, the Company’s self-developed warehousing system and integrated services offer greater flexibility. In B2B2C scenarios across various production and consumption industries, as well as in the optimal deployment of online and offline inventory, the Company has accumulated a wealth of benchmark cases and mature experience. This enables the Company to offer customized solutions tailored to the specific characteristics and diverse needs of different industries. In 2024, the revenue from integrated warehousing and distribution services for the SKA, KA, and SME customers witnessed a year-on-year increase of over 20%.

Leveraging its unique competitive edge as an independent third-party, the Company deepened cooperation with e-commerce platforms and successfully undertook several integrated warehousing and distribution projects for online supermarkets in 2024. By adopting consolidated transportation models and supporting in-warehouse operations, the Company expanded delivery to remote areas and cross-border first-mile

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collection scenarios. Moreover, by closely tracking consumer trends, the Company established innovative quality inspection centers within its warehouses for high-value items in cooperation with e-commerce platforms and merchants. Products undergo quality inspections directly in the warehouse before delivery, ensuring product quality and improving fulfillment efficiency. The Company also achieved significant breakthroughs in integrated warehousing and distribution services across multiple sectors, including in-plant logistics for the industrial manufacturing, inventory replenishment for wholesale snack chains, and B2C fulfillment for traditional Chinese medicine and tea beverages. The Company continued to seize new market opportunities for additional business growth.

Freight

In 2024, the Company’s freight business achieved a tax-exclusive revenue of RMB37.64 billion, representing a year-on-year increase of 13.8%, with cargo volume increasing by over 20% compared to the previous year.

Under China’s industrial upgrading initiatives and the “Large-Scale Equipment Renewals and Trade-ins of Consumer Goods” policy, industries including communication equipment, industrial manufacturing, new energy vehicles/parts, home appliances, and furniture have experienced growing demand, alongside rising consumer spending. Simultaneously, customers have raised higher expectations for freight services, emphasizing fast and precise delivery timelines, stable and reliable service quality, and strict cost control. Adhering to its customer-centric business philosophy, SF Freight provide high-quality products and services, achieving a peak daily LTL volume of over 69,000 tons in its direct operation network and over 32,000 tons in its franchise network, maintaining a leading position in terms of business scale in the industry.

Creating Competitive Edges in the Mid- to High-end Ground Large Parcel Delivery Market: The Company has established a tiered timeliness guarantee system to ensure fast and accurate delivery, speeding up the timeliness for over 400 core routes, enhanced last-mile collection and delivery capabilities and adjusted the standard weight limit for single parcel to one ton. Furthermore, the Company developed differentiated packaging and delivery capabilities, accumulating professional logistics solutions across various industries such as home appliances and automobiles. Meanwhile, the Company focused on core business production areas, by optimizing operations through dedicated direct routes, customer self-delivery to sorting centers, network integration with SX Freight, and integrated loading/shipping mode, to enhance efficiency, reduce costs and secure the Company’s market share.

Building a High-quality LTL Logistics Network Tailored for Industrial Manufacturing: The Company has been continuously optimizing its operational model and resource allocation to establish a high-quality LTL logistics network that better aligns with the manufacturing sector’s demand — LTL shipment, minimal transfers, and cost control — while rapidly expanding into the industrial freight market. By optimizing its network structure and establishing over 300 direct dispatch routes, the Company significantly enhanced delivery timeliness while reducing operational costs. A dedicated

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sales team of several hundred professionals was deployed to provide personalized “concierge-style” services, strengthening the Company’s differentiated service advantages. Furthermore, the Company has integrated diversified resources, strengthened collaboration with external specialized transport providers, coordinated small and large parcel couriers, and added over 3,400 large vehicles to enhance its lean logistics capabilities. In 2024, SF Freight deepened its presence in over 20,000 industrial parks, covering more than 300 cities. The cargo volume for industrial large item weighing above 100kg increased by more than 30% over the previous year.

Accelerating Expansion into Lower-tier Markets through Franchise Networks: In 2024, the SX Freight franchise network accelerated its expansion into lower-tier markets. The total number of network outlets exceeded 20,000, with a coverage rate of 85.3% for township deliveries. Its market share remained firmly among the top three in the franchised freight delivery market. SX Freight also introduced products such as light freight and bulk freight, offering a cost-effective network to meet the demands of lower-tier market customers. In terms of core networks, SX Freight continuously optimized operations by reducing distribution nodes and streamlining routes, cutting the average delivery time by 6.5 hours. These measures, combined with route structure optimization and enhanced capacity procurement, have driven a reduction in parcels’ per-kilogram operating costs. By investing in technological tools such as sorting equipment and unmanned forklifts, SX Freight enhanced operational efficiency and customer satisfaction. The synergies between SX Freight franchise network and SF Freight direct operation network steadily expanded the cargo volume, continuously improved operational efficiency, and delivered high-quality services to achieve a win-win outcome for its franchisees and customers.

Cold Chain and Pharmaceutical Logistics

In 2024, the Company’s cold chain and pharmaceutical logistics business achieved a tax-exclusive revenue of RMB9.81 billion, representing a year-on-year decrease of 4.9%. This decrease was mainly due to the climatic factors, which caused a significant reduction in certain seasonal fresh agricultural products, thereby hampering the growth of fresh produce logistics services.

In 2024, China’s overall cold chain logistics market experienced stable growth. The e-commerce of fresh and seasonal food remained active, while catering chain brands accelerated their expansion into lower-tier cities and counties, driving rising demand for cost-effective cold chain services. Additionally, the expansion of large supermarket chains and the rising demand for central warehouse and city warehouse distribution created new opportunities for LTL cold chain logistics. In response to these industry developments and market trends, the Company optimized its cold chain network with a more cost-efficient model, continuously providing customers with intelligent and digitalized cold chain solutions.

Fresh and Seasonal Food Logistics Services

The Company has played a crucial role in enabling fresh agricultural products to reach consumers directly from their place of origin, with services covering over 2,800

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county-level cities and more than 5,500 categories of fresh agricultural products nationwide. It is projected to increase farmers’ income by over RMB100 billion, thereby driving local agricultural modernization and quality upgrading, while providing robust support for enhancing rural prosperity.

Through close collaboration with local governments, industry associations and leading brands, the Company launched over 50 new regional agricultural brands in 2024. It also organized brand promotion events such as harvest festivals, picking festivals, fishing season opening ceremonies, and trade fairs, implementing various initiatives to enhance the reach and visibility of agricultural brands. Guided by the principle of “Quality-Driven Agriculture and Brand Empowerment”, the Company focuses on three strategic dimensions — value enhancement, branding, and standardization — to facilitate the shift of China’s agriculture from “volume-driven expansion” to “quality-oriented development”. Additionally, the Company has continuously improved packaging solutions by incorporating features such as extended freshness, improved recognizability, cultural attributes, and environmentally friendly materials. More than 40 customized packaging designs have been developed for dozens of fresh produce categories, enhancing the competitiveness of regional specialty agricultural products. The Company has also leveraged multiple resources to explore new e-commerce models such as livestream-assisted agricultural sales, providing one-stop marketing solutions for local specialty products and contributing to the sustainable growth of the agricultural industry.

Food Cold Chain Logistics Services

In 2024, the Company prioritized five core cold chain logistics scenarios — integrated warehousing and distribution, large item, B2C delivery, store delivery, and cross-border cold chain. By optimizing operational processes and developing innovative tools, the Company enhanced its service capabilities and provide high-quality end-to-end cold chain logistics services for customers across the entire supply chain from production to consumption.

Leveraging its full-scenario capabilities in warehousing, LTL, B2B and B2C delivery, the Company penetrated more cold chain segments and scenarios for existing customers, increasing its market share in the cold chain logistics services. The Company leverages its self-operated cold storage facilities and outsourced warehouse resources, utilizing warehousing services as the cornerstone to expand customer distribution operations and scale up integrated warehousing-delivery business. Additionally, by developing new temperature-controlled containers and leveraging its express delivery network, the Company rapidly expanded its presence in China in the cold chain freight logistics services, launching pickup services in 85 cities and delivery services in 131 cities in 2024 to obtain new growth potential. Furthermore, the Company incubated urban cold chain delivery networks in selected cities to provide centralized warehousing and shared distribution services for catering stores, upgraded urban cold chain distribution from local to regional networks, and focused on food cross-border air freight, Southeast Asian cold chain ground transportation, and fresh and seasonal food imports via the Ezhou cargo hub, achieving more breakthroughs in cross-border cold chain logistics services.

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Pharmaceutical Logistics Services

The rapid evolution of China’s pharmaceutical regulations has had a profound impact on the pharmaceutical logistics industry, requiring logistics providers to accelerate transformation to meet both quality compliance and cost-effectiveness demands. Leveraging its extensive logistics network and specialized service capabilities, the Company delivered high-quality, cost-effective pharmaceutical logistics solutions, achieving growth that outpaced the industry average.

The Company focused on expanding end-to-end supply chain services in ten core scenarios within four major segments of biopharmaceuticals, vaccines, IVD, and samples. It has achieved significant breakthroughs in various aspects, such as from production warehouse to distribution warehouse, from medical institution to testing institution, and vaccine reverse logistics services. In particular, the Company experienced rapid growth in biopharmaceuticals, driven by collaborations with leading pharmaceutical distribution companies and expansions into high-growth scenarios including traditional Chinese medicine and pharmaceutical e-commerce platforms. The Company continued to improve the quality and cost-effectiveness of its self-operated pharmaceutical warehouses. In 2024, The Company’s Chengdu warehouse, for example, obtained the Modern Logistics Acceptance Certificate from the National Medical Products Administration. This recognition validated the modern logistics capabilities of the Company’s pharmaceutical warehousing and earned it the prestigious supplier and quality awards from leading global pharmaceutical clients. Moreover, the Company also expanded into outsourced warehousing services, offering comprehensive solutions that combine warehouse operations, logistics distribution, and technology systems, deepening the Company’s partnership with its customers.

Intra-city On-demand Delivery

In 2024, the Company’s intra-city on-demand delivery business achieved a tax-exclusive revenue of RMB8.87 billion, representing a year-on-year increase of 22.4%. Sustained revenue growth in the intra-city on-demand delivery segment, combined with technology and lean management-driven operational enhancements, has led to a doubling of its net profit.

Deepened Cooperation and Service Upgrading, Expanding the Merchant and Consumer Base: In terms of merchant collaboration, it reinforced and deepened its relationships with KA customers by leveraging its stable fulfillment service quality. This enabled the Company to maintain its leading market share while continuing to expand its network of partnered chain brands. In 2024, the Company added more than 7,500 new KA client stores to its network. Additionally, by expanding customer acquisition channels and optimizing collaboration processes, it increased the number of small and medium-sized merchants using its services. Moreover, leveraging its neutral and open market positioning, the Company further deepened cooperation with leading digital platforms to meet the on-demand delivery needs across diversified business verticals. In 2024, the scale of annual active merchants of SF Intra-city reached 650,000, representing a year-on-year increase of 39%. For consumer services, SF Intra-city is committed to providing

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industry-leading and professional fulfilment services, strengthening the brand image of “SF Intra-city, the first choice for urgent delivery”, and improving consumers’ satisfaction by providing high quality services. Through the upgrading of one-on-one “Exclusive Delivery” product and the capability of medium- and long-distance “delivery within an hour” services, the Company addressed the delivery needs for high-value, time-sensitive, and items with high safety requirements products. Meanwhile, the Company optimized its brand promotion and channel marketing strategies, which contributed to the rapid growth of order volume and revenue from proprietary channels, including SF Intra-city’s WeChat mini program and App, and an increased user activity. In 2024, the scale of annual active consumers in SF Intra-city exceeded 23.41 million.

Accelerating the Nationwide Network Coverage and Achieving Rapid Market Expansion with Full-scenario Delivery Capabilities: For service scenarios, SF Intra-city optimised products and services around key categories. In 2024, intra-city on-demand delivery achieved high-double-digit growth in industries including tea beverages, supermarkets and convenience stores, cosmetics, pharmaceuticals, and maternity and baby products, especially with a year-on-year increase of 73% for tea beverages delivery revenue, as well as breakthroughs in cooperation with national and regional supermarket chain customers. For regional expansion, SF Intra-city has covered over 2,300 cities and counties in China, including over 1,300 counties. Revenue from counties achieved a year-on-year increase of 121%, highlighting the effective expansion in lower-tier markets. For commercial districts operation, both the number of served business districts and order density continue to grow, with a growing proportion of these areas achieving profitability. Additionally, through resource coordination with other business segments within the Group, the Company developed an integrated supply chain solution that combines warehousing, sortation, and intra-city on-demand delivery. This strategic synergy expanded the Company’s customer base while enhancing customer retention.

Full-chain Technology Improving Network Timeliness and Rider Efficiency: SF Intra-city’s City Logistics System (CLS) established a full-chain cooperation network to optimally match orders and riders across industries and under multi-scenarios. By leveraging advanced AI-powered models, the system significantly enhanced both service experience and operational efficiency across the entire workflow — from customer demand analysis, merchant operations strategies, intelligent customer service responses to capacity allocation and delivery execution. In terms of rider management, CLS utilized smart algorithms to optimize route planning and dispatch logic, taking into account factors such as rider experience, workload, weather conditions, and peak/off-peak hours. This approach improved rider productivity and income while maintaining stable delivery timeliness through dynamic adjustments.

Supply Chain and International Business

In 2024, the Company’s supply chain and international business achieved a tax-exclusive revenue of RMB70.49 billion, representing a year-on-year increase of 17.5%. This business benefited from stable international air and ocean freight demand, rising freight rates, and the Company’s strategic focus on capturing growth opportunities in China’s production capacity expansion, brand globalization, and cross-border

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e-commerce. By deepening its business integration and expanding in both supply chain and international markets, the Company achieved strong growth. The Company is committed to becoming the go-to logistics partner for customers venturing into international markets and “The One in Asia” with global coverage.

Enhancing End-to-end International Network Infrastructure: The Company continued to strengthen its air cargo network, operating over 9,100 all-cargo international flights in 2024, representing a year-on-year increase of 19%. The Company established a global air network centered on the Ezhou cargo hub connecting Europe and Americas, with the Shenzhen Hub as the auxiliary connecting Southeast Asia, Japan and Korea. The number of flights from China to South Asia and certain destinations in Europe and Americas doubled in 2024. Meanwhile, the Company’s all-cargo flight routes have expanded to reach 10 international terminals in Asia and 8 in Europe and Americas. With an airside facility in Singapore, the Company enhanced its cross-border next-day delivery capabilities between China and Singapore, as well as China and Southeast Asia. Furthermore, the Company provided cargo customs clearance services across 78 ports worldwide through both self-operated models and partnerships with agents. This includes 10 AEO Advanced Certifications in China and 14 overseas ports with self-operated customs clearance capabilities, further enhancing the clearance efficiency of the Company’s parcels. In addition, the Company increased the investment in self-operated overseas warehouses in Asia, Europe and Americas, serving B2B supply chains and B2C cross-border e-commerce businesses. Besides, the Company also continued to collaborate with local express logistics companies in Europe and Americas, establishing stable local pick-up, delivery, and fulfillment capabilities. Through the above-mentioned network capacity building, the Company fulfills the efficiency requirements of cross-border e-commerce and multinational production and distribution supply chains.

Expanding Supply Chain and International Markets: The Company continuously developed cost-effective and high-quality international express and cross-border e-commerce logistics products. Leveraging deep understanding of various industries and integrating the supply chain service capabilities of Fenghao Supply Chain, SXH China Logistics, and KLN, the Company provided domestic and international integrated supply chain solutions tailored to various industries’ characteristics and needs. Meanwhile, guided by the keynote of energizing organizational vitality, the Company optimized the incentive mechanisms for international business teams, in order to effectively promote the development and growth of international business.

International Express and Cross-border E-commerce Delivery Services

Outbound logistics demand from China remained robust throughout 2024. Despite challenges such as shifts in e-commerce platforms from full-entrusted to semi-entrusted logistics models and increasing pressure for cost-effective delivery solutions, the Company leveraged its extensive global network and integrated service capabilities to strengthen partnerships with major e-commerce platforms. It expanded its customer base to include more cross-border independent sellers and merchants, leading to a 24% year-on-year increase in cross-border e-commerce clients. Leveraging improved

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door-to-door next-day fulfillment capabilities from China to Southeast Asia, the Company provided efficient cross-border B2C services to emerging platforms and brand customers, addressing the pain points of lengthy fulfillment chains, slow delivery, and high damage rates. These efforts empowered customers to rapidly penetrate the Southeast Asian consumer market. Additionally, for the delivery flows to Europe and Americas, the Company quickly established overseas warehouses to provide customers with one-stop solutions that integrate first-mile parcel consolidation and overseas warehousing, focusing on cost-effectiveness and enhancing customer loyalty. For return shipments to China, the Company proactively expanded its import services for fresh and seasonal food specialties and local products from Southeast Asia, Europe and the Americas. This improved the loading rates of all-cargo aircraft on return flights and improved the overall operational efficiency of international business. In 2024, the Company’s revenue from international express products increased by over 20% year-on-year.

International Cargo and Freight Forwarding Business

The global economy revived slowly in 2024, where inflation gradually eased, and merchandise trade showed signs of recovery. However, geopolitical instability, rising trade protectionism, and supply chain restructuring introduced new uncertainties. The global freight market faced supply shortages starting in May 2024 due to geopolitical conflicts, driving up ocean and air freight rates, with ocean freight demand exceeding supply in the third quarter. Meanwhile, air freight remained in high demand, particularly for China’s thriving cross-border e-commerce sector. The Company flexibly adjusted its strategies to capture market opportunities, leveraging its extensive resources to offer stable and high-quality international freight forwarding services while continuously improving operational efficiency. Benefiting from sustained high freight rates on key trade lanes from China to Southeast Asia, Europe and Americas, as well as stable air cargo volume growth, the Company’s international cargo and freight forwarding business recorded over 30% year-on-year revenue growth in 2024.

Supply Chain Services

The Company has capitalized on the growing trend of Chinese enterprises expanding their production capacity and brands overseas, building efficient and reliable international supply chains for clients. It achieved breakthroughs from 0 to 1 to scale across multiple countries, industries, and service scenarios. In 2024, the Company secured contracts for over 100 overseas supply chain projects, with more than 50 successfully implemented. These projects serve leading clients across diverse sectors, including e-commerce and circulation, industrial manufacturing, high-tech, apparel and footwear, home appliances and furniture, automotive, and coffee and tea beverage chains. The services span key markets such as Singapore, Malaysia, Vietnam, Thailand, South Korea, Philippines, Netherlands, Germany, and France.

In the coffee and tea beverage industry , the Company has supported a number of emerging Chinese coffee and tea brands in their overseas expansion, including assisting a coffee brand client in the quick opening and operation of more than 50 stores in Singapore, and as the exclusive supply chain partner of a tea brand client for overseas expansion,

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supporting it to open 110 stores in eight countries. In the automotive industry , the Company not only provided cross-border air and sea transportation services for new energy materials, batteries and high-end equipment, but also successfully undertook the integrated warehousing and distribution logistics services for overseas auto spare parts of a leading automotive enterprise. This includes integrated supply chain services covering customs clearance of auto spare parts, port-to-warehouse transfer, warehousing and local store distribution. In the consumer goods sector , the Company provided efficient air and ground transportation services for the export of raw materials and components in the multinational production supply chain of 3C electronic products. In the consumer goods sector, beyond its existing role in managing cross-border supply chains for 3C electronics, the Company capitalized on the growing trend of Chinese cultural IP brands expanding internationally. It served a top-tier domestic designer toy brand with comprehensive international logistics solutions, including express delivery, cross-border ground transportation, and overseas warehousing. The services covered both online direct-to-consumer channels and offline retail stores, facilitating the brand’s entry into the Southeast Asian market. In the engineering logistics sector , the Company leveraged its extensive logistics network and integrated capabilities with KLN to successfully execute multiple overseas infrastructure projects for Chinese enterprises. These projects spanned renewable energy sectors such as wind power, photovoltaics, and energy storage, showcasing the Company’s leading expertise in complex cross-border logistics solutions.

Operation Optimization

Sorting process

Establishing Efficient Sorting Networks: The Company continues to enhance the efficiency of its network by streamlining its backbone network operations and consolidating multifunctional large-scale sorting centers, reducing the number of sorting centers by 22. Technology has been leveraged to improve sorting center management and efficiency, including the use of software robotics for automated data analysis and process monitoring, simulation models, intelligent warning systems and other tools to assist on-site management and minimize human intervention. The Company deployed hundreds of AGVs and approximately 300 sets of automated equipment to improve sorting efficiency. In 2024, the sorting efficiency of small parcel increased by 13% and the sorting efficiency of large parcel improved by 8.5%.

Improving the Operational Efficiency of Sorting Centers: The Company has been transforming sorting centers into operational centers, enhancing their autonomy and awareness to maximize resource utilization. Initiatives included adding collection function, direct parcel delivery to sorting centers to skip the consolidation at outlets; warehousing functions have been added to achieve “upper-layer warehouse, lower-layer sorting” operations, maximizing the utilization of storage space. Management structures have been streamlined, and performance-driven incentive programs were introduced to enhance employee motivation. The Company streamlined processes, integrated resources, and optimized staffing scheduling to enhance staff efficiency in different functional areas, maximizing operational efficiency.

Establishing the Industry’s First Unmanned Sorting Center with Cage Trolleys: The Company established the industry’s first unmanned intelligent sorting center,

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enabling parcels to be loaded and transferred using cage trolleys. This innovative unmanned sorting mode reduced human labor, and partially implemented fully automatic operations. With a processing capacity of over 1,200 cage trolleys per hour, the sorting center achieved a daily peak sorting efficiency that amounts to four times of the network average, while reducing container handling time by 45% compared to normal parcel handling. The Company has begun collaborating with certain customers to consolidate parcels into cage trolleys at the warehouse level and deliver directly to the destination, reducing the number of sorting. This approach reduced sorting costs per parcel, improved delivery timeliness, and significantly reduced parcel damage rates and customer complaint rates.

Transportation

Optimizing Route Planning for Ground Transportation: With the integration of sorting centers, as well as the consolidated transportation for small and large parcels, the Company continuously refined sorting modes and route planning to streamline the process. In 2024, the Company added nearly 440 direct routes between places of departure and destination cities, increasing city connectivity and reducing the average number of sorting. Additionally, the Company fully leveraged the capacity of the Ezhou cargo hub to create a ground transportation hub. By adopting an optimal planning approach that allowed parcels between north and south China to be consolidated and sorted at the Ezhou cargo hub, the Company maximized direct routes from the Ezhou cargo hub to the destinations on the basis of the guaranteed loading rate, thus reducing transit frequency while improving delivery timeliness.

Optimizing Transportation Resource Allocation: Transportation capacity has also been strategically restructured. In terms of line-haul transportation, the Company prioritized long-term contracts with stable pricing, ensuring that over 95% of transportation needs are fulfilled by self-owned or long-term outsourced fleets, securing cost stability. Fleet upgrades were also a key focus, with more than 1,000 line-haul routes shifting to high-capacity vehicle models, adding over 140,000 long-haul trips in 2024, lowered per-unit transport costs. Additionally, round-trip optimized routes increased by 11 percentage points, and the use of self-owned vehicles was expanded, significantly reducing outsourced transportation costs. For short-haul transportation, the Company reduced costs by implementing standardized pricing for routes and deploying large-capacity vehicles on multi-stop routes to handle small-parcel transport tasks.

Last-Mile Delivery

Enhancing Outlets Efficiency: The Company launched the operational transition of “direct sorting and delivery from sorting centers using cage trolleys to the service outlets” model. Instead of traditional model which requires sorting twice at sorting center and service outlet, this new model only requires one-time sorting at the sorting center with direct delivery to the couriers, effectively enhancing the operational efficiency. This model has been implemented in over 3,400 service outlets and over 9,600 terminal stations by the end of 2024. Through continuous optimization of outlet layouts, integration of nearby areas for consolidated shipping, outlet transportation, and the deployment of unmanned

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vehicles in the short-haul and last mile delivery, the Company has achieved continuous cost reduction for the transformation. In the fourth quarter of 2024, the average cost savings per parcel under the transformation areas exceeded the incremental investment, achieving positive operational results. This operational transformation reduced the procedures at the outlets, lowering the labor costs of warehouse management at outlets and branch transfers, and shortened the average distance by 38% for parcel handovers by couriers, thus improving the network efficiency.

Incentivizing Couriers for Revenue Growth: The Company established a performance evaluation system tailored for couriers. Through regional rankings and incentive mechanisms, cash rewards were provided to top-performing couriers who demonstrated exceptional business development. The Company also identified and incentivized couriers who showed significant sales progress and potential. Additionally, the Company provided training and growth opportunities for lower-performing employees to enhance their competitiveness. Furthermore, the Company continued to build a system of team leaders by nominating couriers with strong sales capabilities and outstanding leadership skills as team leaders in specific regions, with respective titles as well as clear responsibilities and rights. Under this system, team members in the region could work collaboratively and grow their income with increasing business volume.

Enhancing Courier Efficiency: The Company continuously innovated and iterated on tools for courier collection and delivery efficiency and reduce labor intensity. In 2024, the small parcel collection and delivery efficiency increased by 7.8% over the previous year, and the freight collection and delivery efficiency increased by 9.1% over the previous year. With the help of intelligent robots built on a large language model, the Company provided instant answers to various inquiries, accumulating over 5 million inquiries resolved and assisting couriers in standardizing operations and improving customer experiences. By setting up WeCom accounts and integrating them with the courier collection and delivery system, the Company enabled automatic notification of delivery information to customers, improving communication convenience between couriers and customers. Moreover, the Company’s marketing strategies could be quickly and efficiently sent to customers through WeChat, empowering couriers in business development and enhancing customer retention. By the end of 2024, the Company’s WeCom accounts had engaged over 12 million customers.

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Core competitiveness

The Company has an efficient and reliable global logistics infrastructure network, rooted in China, radiating to Asia, and connecting the world

Note: The data below are all as of December 31, 2024

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We are operating a cargo airline that is the largest in China and maintains leading position in the world, and we are also the largest shipper of air cargo in China

Note: For the data below, the time points are all as of December 31, 2024, and the periods are all from January 1, 2024 to December 31, 2024.

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The Ezhou cargo hub is the first dedicated air cargo hub in Asia, and fourth in the world, which is of strategic value and scarce position. The Company officially commenced operation of its logistics complex in the Ezhou cargo hub in September 2023. By the end of 2024, 55 domestic and 15 international cargo routes had been launched at the Ezhou cargo hub. The Ezhou cargo hub features an extensive 52-kilometer intelligent sorting line that can process up to 280,000 parcels per hour at its peak capacity. Additionally, 14 intelligent customs inspection lines featured with a fully automated sorting system ensure efficient customs clearance, pickup and delivery of international parcels. In 2024, the international cargo volume at the Ezhou cargo hub witnessed over 200% growth as compared to 2023.

The strategic vision for the Ezhou cargo hub is not only to become the center of global supply chain, but also as a high-end processing and distribution hub. Top-tier customers from various industries including 3C electronics, cosmetics, and cold-chain pharmaceuticals have established their presence in the Ezhou cargo hub. The

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hub-and-spoke mode of the Ezhou cargo hub enables the Company to enhance its aviation network to seamlessly integrate domestic and international routes, thus gradually achieving “overnight nationwide delivery and the third day global connectivity.”

Our extensive transportation resources allow us to provide domestic and cross-border multi-modal transportation services for our customers

Note: For the data below, the time points are all as of December 31, 2024 and the periods are all from January 1, 2024 to December 31, 2024.

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The globally-spread outlets pillaring our international and localized operations

Note: The data below are all as of December 31, 2024

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APPENDIX II FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

We possess numerous key site resources such as logistics parks and logistics centers in countries including China and Southeast Asian, both through our direct ownership or via REITs

Note: The data below are all as of December 31, 2024

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Industry-leading Logistics Technology and Application Facilitating Intelligent Supply Chain

The Company is committed to building an intelligent supply chain ecosystem in the digital era and aims to become the leader in the intelligent supply chain sector. By leveraging deep insights into supply chain scenarios and extensive experience serving top-tier industry clients, along with continuous exploration and application of cutting-edge technologies, the Company enhances the efficiency of its internal logistics network while providing customers with best-in-class digitalized logistics and supply chain solutions.

By the end of the Reporting Period, the Company had 4,180 patents and patent applications with invention patents accounting for 61.5% of the total, and 2,505 software copyrights. The Company actively collaborated with logistics and supply chain organizations, universities, and other social institutions to enhance the social impact of its technological advancements. Meanwhile, the Company was named as one of the top six finalists in the global competition of the prestigious Franz Edelman Award for Operations Research and Management Science for 2025. It was also selected as one of the first batch of benchmark cases for Digital China initiative by the National Data Administration and received recognition in the relevant category of the IDC China Future Enterprise Award. Additionally, the Company was honored with the Science and Technology Award by the China Federation of Logistics & Purchasing in 2024.

The Application of Large Models

SF has developed logistics decision-making models and large language models, tailored to the logistics and supply chain industry. These innovations significantly enhance supply chain decision-making and daily operational efficiency, accelerating the industry’s transition to intelligent logistics.

SF Logistics Decision-Making Model: Leveraging years of industry expertise and underlying data, the Company’s AI-driven logistics decision-making model overcomes traditional algorithm limitations, significantly enhancing intelligent decision-making in logistics. This model has been successfully implemented in several industries such as cosmetics, 3C, food, and automotive parts. The model is mainly used in the following areas: ① Volume demand forecasting: By integrating multi-modal AI technology, the model extracts deep insights from product images and textual information, building multi-scale, multi-channel forecasting models that improve prediction accuracy while reducing resource consumption. In one case study, the model reduced server resource usage by 80%, increased computational efficiency by 120 times, and improved prediction accuracy by 5%. ② Decision optimization: The decision-making large model significantly improved computational efficiency in supply chain route planning and packing optimization. For example, in terms of transportation route optimization, the model can quickly respond to complex scenarios involving inbound logistics, store delivery, and short-haul network planning, eliminating tedious customized development processes and responding flexibly to business requirements. ③ Operational analysis: By building an intelligent supply chain system and combining professional algorithms and operational

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data analysis, the Company provided accurate supply chain solutions. For instance, in addressing out-of-stock scenarios, the AI model identifies root causes and suggests corrective actions to help customers respond to market fluctuations efficiently, enhancing decision-making speed and accuracy.

SF Large Language Model: SF’s proprietary large language model is widely applied across over 20 business scenarios, including customs clearance, customer service, pickup and delivery, and marketing, empowering employees with industry knowledge and improving operational efficiency while delivering superior customer experiences. The applications include: ① Operational optimization: In sorting process, the AI-driven smart security screening system, combined with full-chain monitoring, automatically detects risks and ensures parcel security. In pickup and delivery operations, AI-powered digital assistants provide real-time training and Q&A support to new couriers, enabling them to quickly learn parcel handling standards and product information. The system achieves a 99% accuracy rate in understanding inquiries. ② Customs clearance optimization: During the order placement process, the large language model automatically analyzes customs regulations from multiple countries, ensuring precise clearance procedures. During document verification, the model automatically reviews shipment details, achieving a 97% auto-review rate at selected customs ports. In customs inspection, the multi-modal AI model analyzes product images and determines clearance eligibility, achieving an 83% human-machine match rate, significantly improving customs clearance efficiency. ③ Enhancing customer experience: In the parcel ordering process, customers can complete orders using a single voice command. In return logistics, users can upload a product image to automatically generate a return request, with the large language model extracting order details in just nine seconds. In customer service, AI-powered assistants extract key information from conversations and generate real-time summaries, reducing customer service response time by 30%.

The Company will continue to explore the application of large model technology in logistics services across more industries and scenarios, driving the intelligent transformation and upgrades of the logistics and supply chain industry.

The Application of Unmanned Technologies

The Company has extensively explored and implemented automation and unmanned technology across various logistics scenarios, driving transformation in operational models and enhancing network efficiency.

Unmanned Sorting Centers: Through the transformation of transit model, the Company utilized AGV equipment for short-distance automated handling and sorting operations at the sorting centers. The Company’s self-developed Xinghe Dispatch Management Platform has been integrated into over 60 large SF sorting centers, managing nearly a thousand AGVs and completing over 5.2 million automated container transits.

Unmanned Vehicles: The Company deployed over 800 customized unmanned vehicles for short-haul transportation between sorting centers and service outlets, the connection between service outlets and couriers’ collection and delivery areas, and pickup

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and delivery within enclosed areas such as industrial parks and campuses. This automation of short-haul transportation and collection and delivery has improved efficiency and reduced costs. By building a unified platform for unmanned vehicle integration and simplifying loading and unloading operations, the Company effectively reduced the operational costs for future new scenarios and vehicle types.

Unmanned Warehouses: The Company has developed automated warehousing systems that integrate robotic storage and retrieval solutions, offering customized end-to-end automation for various industries. For example, for the cosmetics industry, where SKU complexity, small item handling, and expiration management are critical, the Company’s automated warehouses feature high-density storage solutions that optimize space and labor efficiency. These facilities include shuttle-based warehousing systems for accurate pallet and item-level handling, AGVs, lifting mechanisms, and sorting machines, ensuring seamless inventory control and the ability to process over 100,000 daily outbound orders. The system is already implemented in pharmaceuticals, high-tech, home appliances, and other industries.

The Application of Robot Process Automation Technologies

RPA technology simulates human operations to automate repetitive and rule-based business processes across logistics operations, significantly improving efficiency and optimizing workflows. The Company extensively utilized RPA robots, covering various stages of collection, sorting, transportation, and delivery, to improve operational efficiency and optimize business processes. This technology assisted employees in automatically generating daily, weekly, and monthly reports, reducing the burden of repetitive report preparation. It also helped employees monitor performance metrics such as timeliness and delivery efficiency, providing data for analysis and reporting. Currently, these robots are deployed at the Company’s various scenarios such as sorting centers and service outlets. In customer-facing processes, RPA applications expanded self-service capabilities for customers, significantly improving response timeliness. In the delivery process, the Company utilized RPA robots to automatically monitor the status of parcels at different time periods and promptly remind couriers at each stage, enhancing on-time delivery rates and overall customer service quality.

Intelligent Supply Chain Solutions

SF provides comprehensive digital supply chain solutions for top-tier industry clients across high-end manufacturing, cosmetics, auto parts, home appliances, and consumer goods industries. The Company has successfully developed hundreds of industry use cases, empowering over 4,000 customers with smart supply chain management.

Energy industry case: The Company partnered with a well-known petrochemical company to provide an end-to-end data-driven supply chain solution. The energy industry supply chain was characterized by high uncertainty and complex processes. Given the customer’s relatively independent business management and absence of data communication, the Company built a digital and visualized logistics management

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platform that integrates marketing, warehousing, transportation, and settlement processes. This platform made the entire supply chain transparent, reducing information barriers and management costs. In addition, the energy industry often involves bulk commodity trading, and customers tend to use multimodal transportation. The Company intelligently identified rational delivery outlets, return vehicle routes, and orders with the same delivery direction, while smartly dispatching resources such as vehicles and ships to reduce costs and improve transportation efficiency. In terms of warehousing, the Company accurately analyzed inventory level and outputs logistics demand plans to help the company improve its level of intelligent management.

New energy vehicle industry case: The Company cooperated with a leading new energy vehicle brand to create an integrated after-sale solution for auto parts circulation that includes transportation, warehousing and distribution services, based on its self-developed supply chain system. By structured integration of express, FTL, LTL, and store delivery transportation modes, the Company improved transportation flexibility, and intelligently and dynamically distributed transportation resources based on the weight, volume, and flow direction of the shipments, reducing transportation costs. The Company also provided various efficient system access methods and, in conjunction with the transportation execution monitoring module, allowing customers to transparently control logistics performance quality. In addition, with years of experience in self-operated warehousing services, the Company provided standard warehousing and distribution services for the customer’s own online store, ultimately forming a comprehensive supply chain technology solution from warehousing to distribution, which currently serves multiple well-known automobile companies.

Consumer goods industry case: The Company cooperated with a top-tier condiment brand to build an all-channel intelligent order center, achieving intelligent distribution ordering and order processing. When distributors place orders, the system can automatically provide ordering suggestions, improving the accuracy of dealer orders and increasing the sales of brand merchants. The intelligent order center aggregates all-channel inventory information, providing real-time scheduling of available inventory resources for each sales channel, achieving all-channel “one inventory” management. At the same time, it manages the order fulfillment status of each channel, realizing automatic order review, allocation, and shipping, improving order processing efficiency and customer experience. Currently, this solution has been replicated and promoted among multiple customers in the food industry.

Intelligent Logistics Products

For small and medium-sized customers, the Company utilized light-version SaaS products to enhance the value-added services in various aspects of its express delivery and logistics services. The Company has successfully deployed dozens of technology-powered SaaS products, enabling SMEs to streamline supply chain operations, reduce costs, and optimize last-mile delivery performance.

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Premium service establishing an unparalleled brand value

In China, SF is a household name and has become a synonym for high-timeliness express delivery service. “Let me SF this to you” has been equivalent with “express delivery to you”. The Company has built a strong brand reputation centered around “fast”, “reliable” and “premium service”, setting the industry benchmark for superior customer experiences. As a result, many corporate customers actively advertise their use of SF as a symbol of premium service and brand trustworthiness. By associating their products with SF’s premium services, corporate customers are able to enhance consumer perception of their product quality, foster greater trust and improve sales performance.

SF’s commitment to excellence has led to unparalleled brand value. The Company has built a loyal and highly engaged customer base across various industries, becoming the go-to logistics partner for many top-tier customers. This dedication to premium service has earned SF wide recognition from customers, industry peers, and the public alike.

In the ranking released by the State Post Bureau, SF has been ranked first in public satisfaction with express delivery services for 15 consecutive years (2009-2023) and the first three quarters of 2024 as well. The Company ranked 415th in the Fortune Global 500 list for 2024 released by Fortune magazine. It has been on this list for three consecutive years, and it is also the first and only Chinese private express delivery enterprise among the Fortune Global 500.

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Financial Review

Revenue

In 2024, the Company adhered to sustainable and healthy development and achieved high-quality business growth. The total revenue of the Group reached RMB284.42 billion, representing an increase of 10.07% as compared to the same period in 2023 (excluding Fengwang business, the total revenue increased by 10.35% year-on-year). The breakdown of the revenue categorized by industry, by operating segment and by geographical region is set out below. For details of the development of each major business, please refer to “Business Development of the Company” in this section.

Total revenue Categorized by industry: Logistics and freight forwarding Other non-logistics business(1) Categorized by operating segment: Express and freight delivery segment Time-definite express Economy express Freight Cold chain and pharmaceutical logistics Others(2) Intra-city on-demand delivery segment Intra-city on-demand delivery Others(2) Supply chain and international segment Supply chain and international business Others(2) Undistributed units(3) Categorized by region: Mainland China Hong Kong, Macao, and Taiwan, China Other international	Year ended December 31, 2024 2023 Amount Percentage of revenue Amount Percentage of revenue RMB’000 RMB’000 284,420,059 100.00% 258,409,403 100.00% 276,275,771 97.14% 251,127,665 97.18% 8,144,288 2.86% 7,281,738 2.82% 200,162,392 70.38% 186,890,137 72.32% 122,205,976 42.97% 115,456,067 44.68% 27,251,227 9.58% 25,051,548 9.69% 37,641,125 13.23% 33,078,821 12.80% 9,812,161 3.45% 10,312,988 3.99% 3,251,903 1.14% 2,990,713 1.16% 9,010,521 3.17% 7,371,250 2.85% 8,872,800 3.12% 7,249,500 2.81% 137,721 0.05% 121,750 0.05% 74,000,342 26.02% 62,859,302 24.33% 70,492,482 24.78% 59,978,741 23.21% 3,507,860 1.23% 2,880,561 1.11% 1,246,804 0.44% 1,288,714 0.50% 242,796,156 85.37% 223,510,607 86.49% 9,467,291 3.33% 9,134,850 3.54% 32,156,612 11.31% 25,763,946 9.97%	Amount change over the previous year 10.07%
		10.01% 11.85% 7.10% 5.85% 8.78% 13.79% -4.86% 8.73% 22.24% 22.39% 13.12% 17.72% 17.53% 21.78% -3.25% 8.63% 3.64% 24.81%

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Notes:

(1) “Other non-logistics business” categorized by industry mainly represents the ancillary non-logistics services provided by the Company, including the purchase and sales of goods involved in the process of providing end-to-end supply chain services for customers, leasing services and provision of technical services.
(2) “Others” categorized by operating segment mainly comprise the purchase and sale of goods involved in the process of providing end-to-end supply chain services for customers.
(3) “Undistributed units” mainly comprise leasing services and provision of technical services.
(4) Any discrepancies between totals and sums of the numbers are due to rounding.

Cost of Revenue

The cost of revenue of the Group in 2024 amounted to RMB245.52 billion, representing an increase of 8.75% as compared to the same period in 2023, which was in line with the growth trend of revenue during the Reporting Period. The breakdown of the cost categorized by industry is set out below:

Total cost of revenue Categorized by industry: Logistics and freight forwarding Labor cost(1) Transportation cost(1) Other operating costs Other non-logistics business	Year ended December 31, 2024 2023 Amount Percentage of cost revenue Amount Percentage of cost revenue RMB’000 RMB’000 245,524,112 100.00% 225,775,678 100.00% 238,694,175 97.22% 219,622,449 97.27% 112,117,267 45.66% 102,785,140 45.53% 93,294,058 38.00% 82,930,208 36.73% 33,282,850 13.56% 33,907,101 15.02% 6,829,937 2.78% 6,153,229 2.73%	Amount change over the previous year 8.75%
		8.68% 9.08% 12.50% -1.84% 11.00%

Note:

(1) The Company calculated the costs and expenses accurately according to the nature of resources in accordance with relevant provisions of the accounting standards. For details, please refer to note 8 to the consolidated financial statements. As outsourced resources were used in some parts of the logistics network operation of the Company, in order to effectively analyze the composition of the operating costs, the Company mainly divided its outsourcing costs into labor outsourcing cost and transportation outsourcing cost, which were aggregated with the employee benefit expenses and transportation expenses as labor cost and transportation cost, respectively.

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Among which, the cost of revenue of logistics and freight forwarding business was RMB238.69 billion, representing an increase of 8.68% compared to the same period in 2023. It was mainly affected by changes in the following three major cost items:

The labor cost was RMB112.12 billion, representing an increase of 9.08% compared to the same period in 2023, mainly because the Company has always attached great importance to the salary competitiveness of couriers and other frontline employees, and introduced comprehensive incentive mechanism to encourage the couriers to actively engaging in business development. The growth in business volume further increased the remuneration of employees.

The transportation cost was RMB93.29 billion, representing an increase of 12.50% compared to the same period in 2023, mainly due to the rapid growth of the Company’s international cargo and freight forwarding business, as well as the expansion of express logistics business in China, which led to more investment in transportation resources.

The other operating costs was RMB33.28 billion, representing a decrease of 1.84% compared to the same period in 2023. Other operating costs mainly include depreciation and amortization expenses, depreciation charge of right-of-use assets, venue usage expenses, and taxes and surcharges. The Company further developed the centralized construction of sorting centers and continued to invest in automated sorting and smart warehousing equipment to fully utilize the benefits of venues and improve operating efficiency, resulting in the slight decrease in other operating costs as compared to the previous year.

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Gross Profit and Gross Profit Margin

The overall gross profit of the Group in 2024 amounted RMB38.90 billion, representing an increase of 19.19% as compared to the same period in 2023. The breakdown of the gross profit categorized by industry is set out below:

Year ended December 31, 2024 2023 Amount Gross profit margin Amount Gross profit margin RMB’000 RMB’000 Total gross profit 38,895,947 13.68% 32,633,725 12.63% Categorized by industry: Logistics and freight forwarding 37,581,596 13.60% 31,505,216 12.55% Other non-logistics business 1,314,351 16.14% 1,128,509 15.50%	Year-on-year change Change in amount Change in gross profit margin 19.19% Up by 1.05 percentage points 19.29% Up by 1.05 percentage points 16.47% Up by 0.64 percentage point

Among which, in 2024, the gross profit of logistics and freight forwarding business was RMB37.58 billion, representing an increase of 19.29% as compared to the same period in 2023, and the gross profit margin was 13.60%, representing an increase of 1.05 percentage points as compared to the same period in 2023, reflecting the continuous improvement in profitability. The change in gross profit margin was mainly affected by changes in the percentage of the following three major cost items to revenue:

Year ended December 31,

			Year-on-year
	2024	2023	change
Percentage of labor cost to	40.58%	40.93%	Decreased by
revenue			0.35 percentage
			point
Percentage of transportation	33.77%	33.02%	Up by 0.75
cost to revenue			percentage point
Percentage of other operating	12.05%	13.50%	Decreased by
costs to revenue			1.45 percentage
			points

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Labor cost-to-revenue ratio decreased by 0.35 percentage point from the same period in 2023, and increased by 0.77 percentage point from the same period in 2023 if KLN1 being excluded. While enhancing the competitiveness of employees’ salaries, the Company also improved its operational efficiency and managed to control the rise in labor costs by reforming its operating model and investing in automated and unmanned equipment.

Transportation cost-to-revenue ratio increased by 0.75 percentage point from the same period in 2023, and decreased by 0.78 percentage point from the same period in 2023 if KLN1 being excluded. This was mainly because the Company continued to streamline its network structure, promote consolidated deliveries and streamline routes and reduce transit process, as well as effective control over transportation capacity procurement, which contributed to the continuous optimization of the transportation cost.

Other operating costs-to-revenue ratio decreased by 1.45 percentage points from the same period in 2023, and decreased by 1.15 percentage points from the same period in 2023 if KLN1 being excluded. This was mainly because the Company adhered to lean operations, strengthened the management of resources, effectively controlled the increase in capital expenditure, maintained a healthy ratio of capital expenditure to revenue, thus ultimately achieving better economies of scale along with the growth in parcel volume.

Note 1: There are significant differences between the cost structure of KLN (in which transportation costs of international freight forwarding business account for a large proportion) and that of the Company’s express & other logistics business. In order to provide a clearer picture of the changes in the breakdown of the Company’s costs, cost analysis above also presents data excluding KLN business.

Selling and marketing expenses

The selling and marketing expenses of the Group in 2024 amounted to RMB3.10 billion, representing a year-on-year increase of 3.50% compared with RMB2.99 billion in 2023, and the selling and marketing expenses ratio was 1.09% in 2024, representing a year-on-year decrease of 0.07 percentage point compared with 1.16% in 2023. This was mainly because the Company’s continuous effort to lean operations, resulting in the selling and marketing expenses remained stable.

General and administrative expenses

The general and administrative expenses of the Group in 2024 amounted to RMB18.73 billion, representing a year-on-year increase of 5.44% compared with RMB17.77 billion in 2023, and the general and administrative expenses ratio was 6.59% in 2024, representing a year-on-year decrease of 0.29 percentage point compared with 6.88% in 2023. This was mainly due to the Company’s adherence to lean operations, technology empowerment to digitalized and intelligent management, streamlined organizational structure and improved management efficiency.

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Research and development expenses

The research and development expenses of the Group in 2024 amounted to RMB2.53 billion, representing a year-on-year increase of 10.86% compared with RMB2.29 billion in 2023, and the research and development expenses ratio was 0.89% in 2024, representing a year-on-year increase of 0.01 percentage point compared with 0.88% in 2023. The overall investment in research and development of the Company remained stable, as detailed in the section “Investment in research and development” under “Investments”.

Other income

Other income of the Group in 2024 amounted to RMB0.99 billion, representing a year-on-year decrease of RMB1.29 billion compared with RMB2.28 billion in 2023, which was mainly because the preferential tax policy on VAT (according to the Announcement No. 1 [2023] of the Ministry of Finance and the State Taxation Administration) has expired in December 2023, and the amount of government grants decreased accordingly.

Finance costs, net

The finance costs, net of the Group in 2024 amounted to RMB1.76 billion, representing a year-on-year increase of 7.29% compared with RMB1.64 billion in 2023, mainly due to an increase in interest expenses on borrowings.

Income tax expense

The income tax expense of the Group in 2024 amounted to RMB3.39 billion, representing an increase of 31.59% as compared with the corresponding period in 2023, which was mainly due to the increase in the profit for the year of the Company, and the effective income tax rate remained stable.

Profit

The Group achieved profit of RMB10.22 billion in 2024, representing an increase of 29.16% as compared to the same period in 2023. Of which, profit attributable to owners of the Company amounted to RMB10.17 billion, representing an increase of 23.51% as compared to the same period in 2023, and profit margin attributable to owners of the Company was 3.58%, representing an increase of 0.39 percentage point as compared to the same period in 2023, which was mainly attributable to the Company’s continuous improvement on the economies of scale and the pursuit of lean management to constantly lower various expense ratios, thereby enhancing the Company’s efficiency.

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Year ended December 31,

			Change over the
	2024	2023	previous year
Profit for the year (RMB’000)	10,218,845	7,911,609	29.16%
Profit margin for the year	3.59%	3.06%	Up by 0.53
			percentage point
Profit attributable to owners	10,170,427	8,234,493	23.51%
of the Company (RMB’000)
Profit margin attributable to	3.58%	3.19%	Up by 0.39
owners of the Company			percentage point

The net profit or loss for each of the Company’s operating segments is set forth below:

Year ended December 31,

			Change over the
	2024	2023	previous year
	RMB’000	RMB’000
Express and freight delivery	10,981,266	8,452,862	29.91%
segment
Intra-city on-demand	132,460	50,595	161.80%
delivery segment
Supply chain and	-1,324,413	-534,501	-147.78%
international segment
Undistributed units	395,920	-86,037	560.17%

Net profit of the express and freight delivery segment for 2024 amounted to approximately RMB10.98 billion, representing an increase of 29.91% as compared to the same period in 2023, mainly driven by (1) a steadfast commitment to sustainable and healthy development, focusing on high-quality business growth; (2) continuous efforts to strengthen network integration, optimize lean resource management, and streamline operations to achieve structural cost reductions; and (3) fully leveraging the network’s economies of scale to enhance profitability.

Net profit of the intra-city on-demand delivery segment for 2024 amounted to approximately RMB0.13 billion, representing an increase of 161.80% as compared to the same period in 2023 and recording a doubled increase in net profit, mainly attributable to (1) accelerated growth in the revenue scale and order volume, and sustained expansion of the network’s economies of scale; (2) optimization of business structure and continued increase in revenue contribution of high-quality customers; and (3) the improvement in operation quality and efficiency driven by technological empowerment and lean management, promoting the continuous enhancement of gross profit margins and expense ratios.

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Net loss of the supply chain and international segment for 2024 amounted to approximately RMB1.32 billion, primarily due to increased short-term losses resulting from business adjustments following the organizational restructuring of the Group’s subsidiary, KEX.

Net profit of the undistributed units for 2024 amounted to approximately RMB0.40 billion, mainly including segments of non-principal logistics and freight forwarding, such as industrial parks, investment and other functional segments.

Non-IFRS Measures

To supplement the consolidated financial statements which are presented by the Company in accordance with IFRS, the Company also uses certain additional non-IFRS measures, namely, EBITDA and EBITDA margin, as additional financial metrics. These non-IFRS measures are not required by or presented in accordance with IFRS.

The Company believes that these non-IFRS measures facilitate evaluation of its operating performance by eliminating potential impacts of certain items listed below. The Company also believes that such non-IFRS measures present useful information to investors in understanding and evaluating its consolidated results of operations in the same manner as they presented to its management. However, its presentation of such non-IFRS measures may not be comparable to similarly titled measures presented by other companies. The use of these non-IFRS measures has limitations as an analytical tool, and you should not consider it on an isolated basis, or as substitute for analysis of, the results of operations or financial condition of the Company as reported under IFRS.

The following table reconciles profit for the year of the Company, calculated and presented in accordance with IFRS, to EBITDA (non-IFRS measure) for the years indicated:

	Year ended	December 31,
	2024	2023
	RMB’000	RMB’000
Profit for the year	10,218,845	7,911,609
Add:
Depreciation and amortization	17,332,257	17,319,107
– Depreciation of right-of-use assets	6,798,783	7,213,063
– Depreciation and amortization (excluding
right-of-use assets)	10,533,474	10,106,044
Finance costs, net	1,755,606	1,636,327
Income tax expense	3,388,416	2,574,896
EBITDA	32,695,124	29,441,939
EBITDA margin	11.50%	11.39%

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Cash Flow

Year ended December 31,

			Change over the
	2024	2023	previous year
	RMB’000	RMB’000
Net cash generated from	32,186,373	26,569,819	21.14%
operating activities
Net cash used in investing	-12,054,744	-13,505,617	10.74%
activities
Net cash used in financing	-27,979,113	-12,994,685	-115.31%
activities
Net decrease/increase in	-7,847,484	69,517	-11,388.58%
cash and cash equivalents
Exchange gains on cash and	45,231	98,844	-54.24%
cash equivalents
Cash and cash equivalents at	40,448,308	40,279,947	0.42%
the beginning of the year
Cash and cash equivalents at	32,646,055	40,448,308	-19.29%
the end of the year

Net cash generated from operating activities: In 2024, net cash generated from operating activities of the Group was RMB32.19 billion, representing an increase of 21.14% as compared to the same period in 2023, mainly due to the combined effect of the Group’s profit growth and optimized operating cash flow management. Please refer to note 34(a) to the consolidated financial statements for a detailed explanation of the difference between the Group’s net cash generated from operating activities and net profit in 2024.

Net cash used in investing activities: In 2024, net cash used in investing activities of the Group was RMB12.05 billion, representing a decrease of 10.74% as compared to the same period in 2023, mainly attributable to the combined effect of the decrease in the Group’s net cash outflow from purchasing property, plant and equipment, the decrease in net cash outflow from acquiring subsidiaries and other investments, and the increase in net cash outflow from purchasing structured deposits.

Net cash used in financing activities: In 2024, net cash used in financing activities of the Group was RMB27.98 billion, representing an increase of 115.31% as compared to the same period in 2023, mainly attributable to the combined effect of the increase in net cash outflow from borrowings, the increase in net cash outflow from dividend distribution, and net cash inflow from the proceeds from the Listing on the Hong Kong Stock Exchange.

– II-343 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Assets and Liabilities

Changes in major items of assets and liabilities

As of December 31,

					Amount	Year-on-year
	2024		2023		change	changes in
		Percentage		Percentage	over the	the
		of total		of total	previous	percentage
	Amount	assets	Amount	assets	year	of total
	RMB’000		RMB’000			assets
Non-current assets
Property, plant and equipment	59,174,305	27.67%	60,104,416	27.14%	-1.55%	0.53%
Right-of-use assets	19,625,629	9.18%	20,890,047	9.43%	-6.05%	-0.25%
Investment properties	7,241,199	3.39%	6,418,720	2.90%	12.81%	0.49%
Investments in associates and
joint ventures	6,203,642	2.90%	7,378,831	3.33%	-15.93%	-0.43%
Current assets
Inventories	2,432,383	1.14%	2,440,425	1.10%	-0.33%	0.04%
Contract assets	2,740,820	1.28%	1,632,592	0.74%	67.88%	0.54%
Trade and note receivables	27,981,633	13.09%	25,360,433	11.45%	10.34%	1.64%
Financial assets at fair value
through profit or loss	11,246,156	5.26%	6,809,742	3.07%	65.15%	2.19%
Cash and cash equivalents	32,646,055	15.27%	40,448,308	18.26%	-19.29%	-2.99%
Non-current liabilities
Borrowings	26,319,260	12.31%	30,396,912	13.72%	-13.41%	-1.41%
Lease liabilities	7,094,483	3.32%	8,038,495	3.63%	-11.74%	-0.31%
Current liabilities
Trade and note payables	27,395,524	12.81%	24,914,300	11.25%	9.96%	1.56%
Contract liabilities	2,039,198	0.95%	1,832,018	0.83%	11.31%	0.12%
Borrowings	18,365,122	8.59%	22,309,103	10.07%	-17.68%	-1.48%
Lease liabilities	5,501,314	2.57%	5,769,965	2.61%	-4.66%	-0.04%
Equity
Treasury shares	758,081	0.35%	2,575,532	1.16%	-70.57%	-0.81%

Contract assets: As of December 31, 2024, the Group’s contract assets amounted to RMB2.74 billion, representing an increase of 67.88% as compared with the end of 2023, mainly due to the business growth of the Group.

Financial assets at fair value through profit or loss: As of December 31, 2024, the Group’s financial assets at fair value through profit or loss amounted to RMB11.25 billion, representing an increase of 65.15% as compared with the end of 2023, mainly due to the increase in structured deposits.

– II-344 –

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Borrowings: As of December 31, 2024, the Group’s borrowings under non-current liabilities amounted to RMB26.32 billion, representing a decrease of 13.41% as compared with the end of 2023; the borrowings under current liabilities amounted to RMB18.37 billion, representing a decrease of 17.68% as compared with the end of 2023, mainly due to the repayment of borrowings.

Treasury shares: As of December 31, 2024, the treasury shares of the Group amounted to RMB758 million, representing a decrease of 70.57% as compared with the end of 2023, mainly due to the cancellation of the Company’s repurchased shares.

Liquidity and Capital Structure

Sources and uses of funds

In 2024, the Group primarily raised funds required for its development through cash generated from operating activities, issuance of shares and bonds, proceeds from external debts and other financing activities. The Group’s cash requirements are mainly used for daily operations, repayment of maturing liabilities, capital expenditures, payment of interest and dividends, and other unexpected cash needs. The Group has always adopted a prudent financial management policy, maintaining sufficient and appropriate funds to meet the repayment of matured debts, capital expenditures and normal operations.

As of December 31, 2024, the total amount of cash and cash equivalents and wealth management products in the Group’s other financial assets was RMB43.66 billion. For details of the Group’s cash flow data during the Reporting Period, please refer to “Cash Flow” in “Financial Review” in this section and note 34 to the consolidated financial statements in the Report.

Cash and cash equivalents Financial assets at fair value through profit or loss – Structured deposits Total	As of December 31, 2024 2023 RMB’000 RMB’000 32,646,055 40,448,308 11,015,904 6,542,881 43,661,959 46,991,189	As of December 31, 2024 2023 RMB’000 RMB’000 32,646,055 40,448,308 11,015,904 6,542,881 43,661,959 46,991,189
		46,991,189

The free cash inflow of the Group in 2024 was RMB22.30 billion, which was derived from net cash generated from operating activities of RMB32.19 billion less capital expenditures (excluding equity investments) of RMB9.89 billion, representing a year-on-year increase of 70.14% as compared with the free cash inflow in 2023 of RMB13.11 billion. Looking forward, the Group believes that it will be able to meet the liquidity requirements of the Company by using the existing cash and cash equivalents, cash generated from operating activities and financing activities.

– II-345 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

As of December 31, 2024, the Group’s debt to asset ratio was 52.14%, representing a decrease of 1.23 percentage points from 53.37% at the end of 2023, and the overall capital structure remained stable. (Note: Debt to asset ratio is calculated by total liabilities dividing total assets on the corresponding date)

Borrowings

As of December 31, 2024, the Group’s short-term borrowings, long-term borrowings, corporate bonds, short-term bonds and loans from non-controlling interests amounted to RMB44.68 billion in aggregate, which were mainly denominated in RMB, HKD and USD with no significant seasonal demand. Among which, the aggregate amount of non-current corporate bonds with fixed interest rates amounted to approximately RMB19.94 billion, and the rest were carried at floating interest rates. Most of the bank borrowings are unsecured, and the assets involved in some of the secured borrowings are set out in “Limitation of asset rights” under “Assets and Liabilities” in “Financial Review” in this section. The Group did not have any borrowings that were past due during the Reporting Period. Please refer to note 26 to the consolidated financial statements in the Report for details of the bank borrowings and other borrowings of the Group. The details are as follows:

Non-current: Long-term bank borrowings Corporate bonds Loans from non-controlling interests Current: Current portion of long-term bank borrowings Short-term bank borrowings Short-term debentures Corporate bonds Loans from non-controlling interests Total	As of December 31, 2024 2023 RMB’000 RMB’000 26,319,260 30,396,912 6,186,386 11,355,241 19,941,935 18,794,782 190,939 246,889 18,365,122 22,309,103 1,677,715 2,813,385 15,118,534 18,765,366 807,787 – 627,779 615,295 133,307 115,057 44,684,382 52,706,015	As of December 31, 2024 2023 RMB’000 RMB’000 26,319,260 30,396,912 6,186,386 11,355,241 19,941,935 18,794,782 190,939 246,889 18,365,122 22,309,103 1,677,715 2,813,385 15,118,534 18,765,366 807,787 – 627,779 615,295 133,307 115,057 44,684,382 52,706,015
		52,706,015

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Limitation of asset rights

As of December 31, 2024, the Group’s assets subject to restricted rights are mainly statutory reserve placed at the Central Bank and the bank borrowing mortgage, as set out below:

Restricted cash Property, plant and equipment Right-of-use assets Investment properties Total	Closing book value Reasons for limitation RMB’000 1,354,303 Mainly statutory reserves in the Central Bank 490,886 Bank borrowing mortgage 203,922 Bank borrowing mortgage 111,847 Bank borrowing mortgage 2,160,958

External guarantees

As of December 31, 2024, the Group provided guarantees of RMB951 million to investee companies (such amount was RMB946 million as of December 31, 2023).

Contingent liabilities

As of December 31, 2024, the Group did not have any material contingent liabilities.

Investments

Capital expenditures

Year ended December 31,

					Year-on-year
			2024	2023	change
			RMB’000	RMB’000
Total	investment	amount	10,714,792	17,524,710	-38.86%

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The amounts of the Group’s capital expenditure items during the Reporting Period are set out below:

Office and buildings Land Warehouse Sorting center Aircraft Vehicle Information technology equipment Equity investments Others Total	Year ended December 31, 2024 RMB’000 463,150 262,306 1,024,636 3,489,292 2,411,185 801,230 455,857 826,633 980,503
	10,714,792

The Company adhered to lean resource planning and better control over its investment efficiency, which led to a year-on-year decrease in the amounts of capital expenditure in 2024. In 2024, investments in fixed assets (i.e. investments other than equity investments) amounted to RMB9.89 billion in aggregate, representing a decrease of 26.56% compared to the same period in 2023, and accounted for 3.48% of the revenue, representing a decrease of 1.73 percentage points compared to the same period in 2023.

Capital commitments

The Group’s capital commitments represent capital commitments contracted but not yet provided for that arise from established contractual relationships, the amounts of which are set out below:

Contracted, but not provided for purchases of property, plant and equipment Investment to be paid Others Total	As of December 31, 2024 2023 RMB’000 RMB’000 1,515,674 1,858,672 121,043 131,895 – 944 1,636,717 1,991,511	As of December 31, 2024 2023 RMB’000 RMB’000 1,515,674 1,858,672 121,043 131,895 – 944 1,636,717 1,991,511
		1,991,511

– II-348 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Investments in financial assets

Assets and liabilities measured at fair value

		Gains and
		losses from		Provision
		changes in	Accumulated	for	Amount of	Decreased
		fair value	fair value	impairment	purchase	amount
		in the	changes	in the	in the	in the
	Opening	Reporting	included in	Reporting	Reporting	Reporting	Other	Closing
Item	balance	Period	equity	Period	Period	Period	changes(2)	balance
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Financial assets	16,889,273	-82,984	-1,553,885	–	4,121,474	-265,393	847,081	19,955,566
Current financial assets
at fair value through
profit or loss
(excluding derivative
financial assets)(1)	6,809,742	16,492	–	–	4,050,575	-194,624	563,971	11,246,156
Other non-current
financial assets at
fair value through
profit or loss	589,996	-99,476	–	–	21,114	-42,595	8,377	477,416
Investments in other
equity instruments	9,489,535	–	-1,553,885	–	49,785	-28,174	274,733	8,231,994
Financial liabilities	92,120	6,927	3,185	–	–	–	3,232	105,464

Notes:

(1) This item includes structured deposits that do not meet the principal-plus-interest contractual cash flow characteristics. These structured deposits, characterized by short maturities and high liquidity, are presented on a net basis for the current period’s purchase and sale amounts. Except for structured deposits, all other items are presented separately with their respective purchase and sale amounts for the current period.
(2) Other changes in current financial assets at fair value through profit or loss are mainly income realized from matured structured deposits, and other changes in investments in other equity instruments are mainly due to exchange differences on translation of foreign currency financial statements.

– II-349 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Investments in securities

Security type Stock code Abbreviation of security Stocks 1519.HK J&T Express Stocks 300771.SZ Zhilai Sci And Tech Stocks GB00BLH1QT30 Samarkand Funds 180302.SZ China AMC-Shenzhen International REIT Total	Initial investment cost RMB’000 1,892,944 13,670 28,847 49,750 1,985,211	Book value at the beginning of the Reporting Period RMB’000 2,345,581 72,394 867 – 2,418,842	Gains and losses from changes in fair value during the Reporting Period Accumulated fair value changes included in equity RMB’000 RMB’000 – -1,454,140 – -720 – -136 – -1,219 – -1,456,215	Purchase amount during the Reporting Period RMB’000 – – – 49,750 49,750	Decreased amount during the Reporting Period RMB’000 – -26,872 – – -26,872	Other changes RMB’000 47,690 1 22 – 47,713	Book value at the end of the Reporting Period RMB’000 939,131 44,803 753 48,531
							1,033,218

Investments in derivatives

The amounts of the Group’s derivatives investments for hedging purpose during the Reporting Period are set out below:

Type of derivatives investment Forward foreign exchange Total	Initial Investment amount RMB’000 5,839,480 5,839,480	Amount at the beginning of the period RMB’000 – –	Gains and losses from changes in fair value during the Reporting Period RMB’000 8,991 8,991	Accumulated fair value changes included in equity RMB’000 8,644 8,644	Amount of purchase during the Reporting Period RMB’000 N/A N/A	Amount of sales during the Reporting Period RMB’000 N/A N/A	Amount at the end of the Reporting Period RMB’000 5,839,480 5,839,480	Percentage of investment amount at the end of the period to net assets of the Company at the end of the Reporting Period 6.35%
								6.35%

– II-350 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

During the Reporting Period, there were no significant changes in the accounting policies and accounting principles of hedging of the Company compared with the previous reporting period.

Actual gains/losses during the Reporting Period: The actual gains/losses of derivatives investments refers to the change in fair value of derivative financial instruments, and the actual losses for the Reporting Period amounted to approximately RMB3.19 million.

Hedging effects: The Company’s derivative investment business mainly consists of forward contracts purchased in this year, with the underlying asset being the exchange rate and the currency involving USD and HKD. The main elements are: operation of forward forex hedging for the Company’s US dollar bonds, which generates exchange losses on the US dollar bonds and gains on changes in the fair value of the forward exchange contracts when the USD strengthens against the HKD. By utilizing the derivative transactions to lock in costs, the impact of exchange rate fluctuations on the Company’s profit was effectively reduced.

Source of fund for the Company’s derivatives investment is mainly self-owned funds.

Risk analysis and control measures for derivatives positions during the Reporting Period:

(I) Risk analysis

The foreign exchange hedging business is carried out by the Company based on the principles of legality, prudence, safety and effectiveness, and not for speculative purposes. All foreign exchange hedging transactions are derived from actual foreign currency business, but certain risks may exist in foreign exchange hedging transactions.

Market risk: The foreign exchange hedging business carried out by the Company and its holding subsidiaries mainly involves daily international express, international cargo and freight forwarding business and investment and financing activities denominated in foreign currencies related to the main business. The associated market risk refers to losses which may arise from changes in price of foreign exchange hedging products due to fluctuations in market prices of underlying exchange rates and interest rates.
Liquidity risk: Since all foreign exchange hedging business is conducted through financial institutions, we are subject to the risk of having to pay fees to banks caused by insufficient liquidity in the market.
Non-performance risk: The Company and its holding subsidiaries conduct foreign exchange hedging business mainly based on cash flow rolling forecasts for risk management. We are subject to the risk that the actual cash flow deviates from forecast, resulting in failure to fulfil obligations under relevant hedging contracts when due.

– II-351 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Operational risks: In the course of business, if the corresponding personnel fails to report and seek approval in accordance with the prescribed procedures, or fails to make records on foreign exchange hedging business accurately, timely and completely, losses may be incurred. At the same time, if the person concerned fails to fully understand the terms of the transaction contract and product information, we are exposed to related operational risks and transaction losses as a result.
(II) Risk control measures
Clarify the criteria of initiating transaction of foreign exchange hedging product: All foreign exchange hedging businesses are derived from actual foreign currency business for the purpose of averting and preventing exchange rate and interest rate risk. No foreign exchange derivatives trading shall be carried out for speculative purposes.
Selection of products: Hedging products with simple structure, strong liquidity and manageable risk are selected to carry out foreign exchange hedging business.
Counterparty selection: The counterparties of the Company’s foreign exchange hedging business are large state-owned commercial banks and international banks with sound operation, good credit, long history of cooperation with the Company and good credit standing.
Determination of fair value of foreign exchange hedging products: The foreign exchange hedging products operated by the Company are mainly for the management of foreign exchange transactions in the predictable future period, with high market transparency and active trading; the transaction price and settlement unit price of which can fully reflect their fair value. The Company determines the fair value of the hedging products in accordance with the transaction data provided by or obtained from the public domain including banks and Reuters.
Equipped with professional staff: The Company has maintained a team of professionals with expertise in financial derivatives, responsible for the Company’s exchange rate risk management, market analysis, product research and the Company’s overall management policy recommendations, etc.
Establishing a comprehensive risk alarm and reporting mechanism: The Company sets risk limits for foreign exchange hedging business where transactions have been made, timely evaluates changes in risk exposure and derived gains and losses, and provides regular risk analysis report to the management and the Board of Directors. Appropriate risk assessment models or monitoring systems are used to continuously monitor and report various

– II-352 –

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risks. More frequent reports are made when the market fluctuates drastically or when risks are higher. A response plan will be made promptly.

Separation of duties and personnel between the front end and back end is strictly implemented. Dealers cannot concurrently hold the position as accounting personnel and vice versa.

Investment in research and development

The Group’s total research and development investment (including research and development expenses and development expenditures) in 2024 amounted to RMB3.09 billion, representing a decrease of 8.02% as compared with the corresponding period in 2023, and its proportion to revenue was 1.09%, representing a decrease of 0.21 percentage point as compared with that of the corresponding period in 2023. The Company’s research and development investment mainly focused on digitalized and intelligent upgrading of logistic networks internally and promoting the implementation of intelligent supply chain technology externally, empowering the digitalized and intelligent improvement in customers’ supply chains through technology, and ultimately achieving lowering costs, generating revenue, and enhancing operating profits for the Company. For details, please refer to “Industry-leading Logistics Technology and Application Facilitating Intelligent Supply Chain” of “Core Competitiveness” of this section.

Year ended December 31,

			Change over the
	2024	2023	previous year
Research and development	3,093,713	3,363,294	-8.02%
investment amount
(RMB’000)
Research and development	1.09%	1.30%	Decreased by
investment as a percentage			0.21 percentage
of revenue			point
Amount of capitalized	560,106	1,077,980	-48.04%
research and development
investment (RMB’000)
Capitalized research and	18.10%	32.05%	Decreased by
development investment as			13.95 percentage
a percentage of research			points
and development
investment

– II-353 –

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Use of Proceeds

The Company was successfully listed on the Main Board of the Hong Kong Stock Exchange on November 27, 2024. A total of 170,000,000 ordinary Shares with a par value of RMB1 per Share were successfully placed and issued at a price of HKD34.3 per share in the global offering, with an aggregate par value of RMB170,000,000. After deducting the underwriting commissions and other estimated expenses related to the global offering, the net proceeds from the share issuance in the global offering for the Company were approximately HKD5,662 million, equivalent to approximately RMB5,299 million at the exchange rate of HKD1.00 to RMB0.9358.

For the year ended December 31, 2024, the proceeds from the global offering were utilized in accordance with the planned uses and proportions as stated in the prospectus. The details are as follows:

Strengthening international and cross-border logistics capabilities Strengthening and optimizing logistics network and service offerings in China Research and development of advanced technologies and digital solutions to upgrade supply chain and logistics services and implement ESG-related initiatives Working capital and general corporate purposes Total	Planned use Percentage 45% 35% 10% 10% 100%	of proceeds Amount RMB’000 2,384,395 1,854,529 529,866 529,866 5,298,656	As of December 31, 2024 Expected timeline for the utilization of the unutilized amount Utilized amount Unutilized amount RMB’000 RMB’000 – 2,384,395 On or before the end of 2026 324,410 1,530,119 On or before the end of 2026 1,572 528,294 On or before the end of 2026 529,866 – On or before the end of 2026 855,848 4,442,808

– II-354 –

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Significant Investments, Acquisitions and Disposals

The Group did not make any significant investments, acquisitions and disposals of equity interests in subsidiaries or investee companies, or any significant investments and disposals of non-equity assets for the year ended December 31, 2024.

Future Plans for Significant Investments and Capital Assets

As of December 31, 2024, the Group did not have any significant investment and capital asset plans.

ESG

SF is committed to integrating corporate value with social value, ensuring a balance between business growth and social responsibility. As a company with a strong sense of social responsibilities, SF adheres to a sustainable and healthy development strategy, continuously advancing smart, efficient, and eco-friendly supply chains to enhance the efficiency and cost-effectiveness of logistics. At the same time, the Company actively supports customer empowerment, environmental protection, employee well-being, and philanthropic initiatives, fulfilling its corporate social responsibilities and demonstrating a strong commitment to social responsibility and leadership.

In response to natural disasters in Hainan in 2024, SF quickly mobilized resources, launching emergency cargo flights to the affected areas. Leveraging its extensive logistics network and rapid-response capabilities, the Company swiftly delivered relief supplies to disaster-stricken regions, providing essential life-supporting assistance to affected communities.

For environment protection, the Company incorporated climate change responses into its business management practices. The Company achieved low-carbon management covering the entire logistics chain through measures including the promotion of low-carbon transportation, construction of green industrial parks, development of sustainable packaging, and application of green technologies. As of the end of the Reporting Period, the Company has utilized over 40,000 new energy vehicles for transportation, covering 253 cities; completed construction of roof photovoltaic power stations in 24 industrial parks, with an annual renewable energy generation exceeding 70 million kWh and a clean energy utilization exceeding 42 million kWh; reduced the use of raw paper by approximately 42 thousand tons and plastic by approximately 155 thousand tons through the implementation of green and minimum packaging; innovatively developed recyclable packaging containers to provide customer with recyclable packaging solutions, and deployed total of 19.18 million recyclable packaging containers with an aggregate reuse exceeding 1 billion times and reducing the greenhouse gas emissions exceeding 472 thousand tons.

SF also continues to refine carbon data standardization and precision management. The company has independently developed the Fenghe Sustainability Platform, an end-to-end logistics carbon footprint management system, which has obtained ISO 14064

– II-355 –

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FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

certification and, in 2024, received the ISO 14083 global logistics carbon accounting standard certification. As the first digital carbon management platform in the industry to achieve shipment-level carbon footprint tracking, the platform enables precise calculation of greenhouse gas emissions and reductions across the entire logistics process — including collection, transfer, transportation, and delivery. This transparency in data not only helps clients reduce compliance costs and climate risks but also significantly enhances green, low-carbon supply chain operations. As of the end of the Reporting Period, over 60 globally renowned clients have utilized the Fenghe Sustainability Platform for carbon emission monitoring.

The Company’s ESG practices achieved constant recognition by the industry. The Company’s MSCI ESG rating is BBB, being the first in China’s express delivery logistics industry, and is rated as low risk by the Sustainalytics ESG rating, which is the best rating in the global express delivery logistics industry. The Company has been honorably selected into the list of ESG influence in China issued by Fortune for three consecutive years (2022-2024), making it the only selected express delivery logistics company in China.

Looking ahead, the Company will continuously adhere to long-termism as well as the sustainable and healthy development, contribute to the establishment of a green and low-carbon supply chain ecosystem, improve employee benefits and care, fulfil its social responsibilities, and is committed to becoming the benchmark enterprise that consistently generates outstanding social value and delivers enduring impulses for the sustainable development around the world.

For details of the environmental, social and corporate governance content, please refer to the 2024 SF Holding Sustainability Report published by the Company on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) on March 28, 2025.

Prospects for Future Development

Industry Trends

The global economic landscape remains complex and volatile, yet China’s economy is expected to maintain high-quality and steady growth. According to the latest forecast by the International Monetary Fund (IMF), the global economic growth is forecasted at 3.2% in 2025, a slight downward adjustment from earlier estimates. While advanced economies are expected to lag behind the global average, China and several emerging economies in Asia will continue to exhibit strong development momentum. As a pivotal driver of global economic growth, China’s GDP target for 2025 is projected to grow around 5%, demonstrating its economic resilience. In response to the challenging global landscape, China’s fiscal policies are expected to be more proactive, focusing on expanding domestic demand, unlocking market potential, advancing technological innovation, strengthening self-sufficiency, and upgrading industries. Additionally, the government will advance high-level opening-up policies to deepen international economic cooperation and trade. Entering a new phase of high-quality development, China will continue to serve as the world’s foremost engine of economic growth.

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China’s Structural Growth Opportunities in Logistics: The stimulation of domestic demand and industrial upgrades in China will create structural growth opportunities in the logistics sector. In 2025, the government is expected to broaden and intensify subsidy policies, covering more industries and product categories while raising subsidy ratios. These measures will effectively stimulate consumer demand, drive industrial development, and consequently accelerate growth in e-commerce logistics, urban delivery, large-item logistics, and reverse logistics. According to projections from the State Post Bureau, China’s express delivery industry is expected to handle 190 billion parcels in 2025, with express delivery revenue surpassing RMB1.5 trillion, representing an annual growth rate of approximately 8%. Meanwhile, policy support and logistics infrastructure improvements are fueling the expansion of rural e-commerce, leading to increased demand for cold chain logistics, warehousing, and distribution services as agricultural products are shipped to urban markets. Additionally, the inflow of industrial goods into rural areas is driving rapid growth in last-mile logistics for lower-tier markets. As China’s industrial landscape upgrades, high-end manufacturing sectors such as electronic information, biopharmaceuticals, and new energy will experience a surge in logistics demand, particularly for high-precision and time-sensitive services. The shift towards personalized and customized production models will also require logistics providers to offer more flexible and tailored solutions to meet the diverse needs of different industries.

Acceleration of International Expansion for Chinese Logistics Enterprises: Chinese companies are rapidly expanding their international presence, moving beyond traditional markets in Europe and North America and actively exploring Southeast Asia, Africa, and Latin America to unlock new growth opportunities. Many manufacturers are relocating production facilities to lower-cost countries, while brands are establishing overseas sales channels to tap emerging consumer markets. At the same time, the rise of cross-border e-commerce is propelling Chinese products onto the global stage, with leading e-commerce platforms and numerous SMEs leveraging cross-border e-commerce channels to penetrate international markets. In the face of volatile international trade policies and rising tariff barriers, global supply chain restructuring will accelerate. The ongoing wave of Chinese companies expanding abroad is driving increased demand for cross-border logistics and supply chain services, requiring logistics enterprises to provide international transportation, warehousing, customs clearance, and integrated supply chain solutions. To support global expansion, Chinese logistics companies are accelerating the development of global logistics networks, establishing overseas warehouses and distribution centers, integrating multiple transportation modes (including sea, air, and rail), and enhancing customs clearance capabilities. These efforts are crucial in enhancing service quality and securing a competitive position in the international market.

Technological Advancements Driving Logistics Efficiency: The rapid advancement of smart technologies is set to revolutionize the logistics industry, ushering in a new era of automation and intelligence. As technological development accelerates and deployment costs decrease, the industry will shift from labor-intensive operations to technology-driven efficiencies. Logistics infrastructure will undergo a complete transformation, with fully automated warehouses, autonomous driving, unmanned sorting centers, and robotic last-mile delivery solutions becoming increasingly widespread. The traditional logistics platform is evolving from a standalone operational

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hub into a real-time digital command center, powered by advanced algorithms that offer full visibility and control across the entire supply chain. With the integration of big data, machine learning, and AI-driven decision-making, logistics service providers can achieve accurate volume demand forecasting, dynamic route planning, optimized warehouse networks, and intelligent inventory management. These technological innovations will fundamentally reshape the logistics industry, significantly enhancing efficiency, reducing costs, and improving customer experience. The sector is moving toward a future defined by intelligence, high efficiency, and sustainability, where automation and data-driven operations will become the new standard.

The Company’s Strategic Vision

The Company is accelerating its penetration into the supply chains of customers across major industries, and expanding its market share to drive scaled growth. As industries undergo upgrades and transformation amid increasingly complex market competition, customer demands are becoming more diverse and comprehensive. Rather than focusing solely on cost reduction for single logistics processes, an increasing number of customers are prioritizing holistic supply chain optimization, efficient omnichannel fulfillment, and the digitalization, intelligence, and sustainability of supply chains. For express logistics companies, homogeneous products and price competition alone are not viable for long-term sustainable growth. With a comprehensive product and service portfolio, leading logistics technology capabilities, and extensive expertise in deploying supply chains for top-tier industry clients, the Company continues to refine standardized service capabilities tailored to specific industries and business scenarios. This enables the development of customized, scalable logistics solutions that can be rapidly implemented and replicated across mid-sized enterprises in different sectors. In the future, the Company will continue to expand its presence in various industry verticals, identify new supply chain scenarios, and convert emerging business opportunities. By deepening its penetration from top-tier to mid-sized industry customers, the Company aims to expand its logistics market share across different industries, driving sustained business growth at scale.

Further developing globalization, enhancing the connection between Asia and the world, and offering one-stop solutions. The Company is committed to becoming “The One in Asia” and connecting the world with end-to-end integrated logistics service across diversified scenarios. It strives to be the go-to logistics partner for the global expansion of China’s enterprises, meeting the diverse needs of cross-border supply chains and cross-border e-commerce. In key Asian markets, the Company will build comprehensive service capabilities, covering international express delivery, freight forwarding, supply chain management, and last-mile logistics, to achieve its strategic goal of being “The One In Asia”. Concurrently, it will enhance the density of its logistics network within Asia and between Asia and the rest of the world, leveraging the Ezhou cargo hub and domestic and international infrastructure to increase resource allocation flexibility and improve global and cross-border service capabilities. To strengthen its international competitiveness, the Company will pursue a diversified strategy that includes mergers and acquisitions, strategic investments, and partnerships to fill key resource gaps and enhance capabilities. As global trade uncertainties rise and supply

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chain restructuring accelerates, the Company will leverage its comprehensive logistics solutions, international network integration, and robust risk management capabilities to help customers build resilient and efficient global supply chains, enabling them to navigate challenges in international business operations.

Building a Digitalized Supply Chain Ecosystem through Technological Leadership: With its cutting-edge technological capabilities and continuous innovation, the Company is committed to establishing a digital supply chain ecosystems. The Company’s efforts will focus on end-to-end digital transformation across logistics networks, improving automation levels and operational efficiency. Leveraging SF Smart Brain, the Company will promote digital transformation among the whole chain of collection, transit and delivery, and comprehensively enhance the intelligence of the Company’s logistics network. Supported by the Company’s rich supply chain service experience and domain-specific insights in multiple industries, combined with advanced data prediction algorithms, application of visualization monitoring and early warning systems, the Company will strive in achieving intelligent route planning and scheduling in the whole field, as well as the dynamic and optimal allocation of resources and facilities. Furthermore, the Company is intensifying its investment in emerging technologies such as IoT, blockchain, cloud computing, AI-driven models, and automation technologies to deliver comprehensive solutions for complex logistics scenarios. By continuously enhancing its technological edge, the Company will not only strengthen its competitive positioning but also advance the digital transformation of the entire logistics and supply chain industry.

Business Plan in 2025

Industry-Specific Strategy: To rapidly expand logistics market share across various industries, the Company will implement three key initiatives: organizational upgrades, strategy iteration, and capability enhancement. In terms of organizational upgrades, the Company will establish industry business units to strengthen organizational capacity, with each region formulating and executing development paths tailored to its local market. For strategy iteration, the Company will focus on deepening engagement with key industry clients, enhancing core service capabilities, and iterating logistics service packages, accelerating adoption among mid-sized enterprises to achieve a multi-dimensional strategy upgrade. In capability enhancement, the Company will strengthen warehousing infrastructure, flexible resource allocation, operational security measures, and talent development programs, ensuring the Company’s long-term competitive edge.

Time-Definite Express Strategy: The Company will position SF Express as the flagship high-end express service, solidifying its reputation for premium time-definite delivery. By expanding high-speed rail and same-day air freight routes, the Company will densify its same-day delivery network coverage. The Company will also secure priority access to high-quality air cargo capacity, expand its sales force and intensify sales incentives, and continuously enhance operational capabilities and regulatory compliance to widen the range of air-transportable goods. The expansion of large-item air freight will remain a key focus area. The Company will also deepen penetration across multiple sales

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channels, leveraging differentiated resource allocation and evolving business models to enhance market competitiveness. Additionally, by increasing investments in lower-tier cities and adopting flexible external collaboration models, the Company aims to accelerate network expansion and gain market share in lower-tier markets.

Economy Express Strategy: The Company will focus on structural cost reduction in its economy express service by innovating operational processes, optimizing transportation models, and enhancing last-mile delivery methods. Through cost efficiencies and an incentivized sales model, the Company will stimulate frontline sales engagement and market competitiveness, exploring growth potential in lower-tier markets and capturing additional economy express market share.

Freight Strategy: For B2B production scenarios, the Company will expand its sales force, strengthen customer relationship management, and implement incentive mechanisms to drive lead generation and business conversion. Additionally, by straightening out the routes, optimizing freight consolidation models, and expanding air freight utilization, the Company will enhance service efficiency and pricing competitiveness for industrial freight solutions. For B2C life scenarios, the Company will build integrated warehouse and distribution capabilities, optimize line-haul routes and last-mile delivery models, and enhance delivery, installation, and reverse logistics services (including returns and recycling solutions). By deepening service capabilities and improving cost efficiency, the Company aims to enhance its competitive positioning in the B2C logistics market.

Cold Chain and Pharmaceutical Logistics Strategy: In terms of fresh and seasonal food delivery, the Company will adopt a multi-pronged approach by building regional agricultural brands, developing customized packaging, leveraging technology for efficiency, investing in automation, and utilizing livestreaming to expand sales and marketing efforts, all aimed at accelerating growth in fresh and seasonal food delivery business. In terms of food cold chain, the Company will focus on developing its service capabilities in integrated warehousing and distribution, oversized items, B2C delivery, store delivery, and cross-border cold chain. In terms of pharmaceutical logistics, the Company will continue to build a compliant, lean, and professional service network in the field of precise temperature control, benchmark against peers to continuously optimize internal resources and costs, and expand business scale. In terms of warehousing, it will innovate and expand various modes of flexible warehousing resources, including external cooperation warehouses and warehousing operations, to develop pharmaceutical warehousing and distribution business.

Intra-city On-demand Delivery Strategy: Adhering to “high-quality and sustainable growth”, the Company embraces the continuous penetration of third-party on-demand delivery services under opportunities including traffic diversification, local retail development and accelerated intra-city logistics, and continuously dedicates to scaling up, full-scenario coverage, premium services and strengthened network. Additionally, the Company will extend the boundaries of real-time logistics fulfillment, accelerate the deployment of automation and AI-driven innovations, and collaborate with more strategic partners to support the growth of new consumption models. By doing so,

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the Company will enhance its ability to provide seamless urban logistics solutions, contributing to a more convenient and efficient lifestyle for consumers.

Supply Chain and International Business Strategy: The Company will seize opportunities presented by China’s expanding global presence, actively focusing on cross-border supply chain solutions and international e-commerce logistics. The goal is to strengthen end-to-end integrated solutions and enhance competitiveness in international express, overseas warehousing, and integrated warehousing and distribution services. In Asia, the Company will align with each country’s key industries and major Chinese enterprises expanding overseas by reinforcing self-operated resources and capabilities in both cross-border and localized logistics. The Company will develop customized supply chain solutions tailored to client needs, driving the successful implementation of more overseas supply chain projects. In Europe and North America, with a focus on cross-border e-commerce, the Company will expand its overseas warehouse network and optimize partnerships with external service providers. By developing a diverse portfolio of products, the Company aims to meet customer expectations for service quality and cost-effectiveness, further enhancing its market competitiveness.

Network Development Strategy: The Company will continue its customer-centric approach, optimizing the logistics network by implementing lean operations, including network restructuring, node simplification, process optimization, and model diversification. These initiatives will enhance end-to-end network efficiency, lower operational costs, and improve business competitiveness.

In terms of the transit, the Company will accelerate the integration of sorting centers to enhance scale effect; build unmanned container sorting centers to meet the needs of parcel flow between economic circles; adhere to the customer-centered approach, deepen the independent operation of transfer stations, and through technological innovations, workflow improvements, and operational refinements, fully expand the functions of sorting centers and enhance transit benefits. In terms of the transportation, the Company will continue to refine transfer models and route planning, increase direct shipping routes, improve city-to-city connectivity, and deploy larger transport vehicles. It will also strategically open new routes and optimize spare-cabin sales, increase round-trip route utilization, and expand self-operated fleet deployments. Additionally, the Company will scale up the adoption of the Ezhou cargo hub’s ground-network transfer model, enabling northward shipment consolidation, which will boost efficiency and reduce costs in the ground transportation network. In terms of last-mile delivery, the Company will continue to streamline operations through workforce model optimization, smart technology adoption, and direct dispatch between sorting centers and final delivery zones. This will reduce costs while improving operational efficiency; furthermore, the Company will enhance courier satisfaction and engagement by taking measures in seven key dimensions: income growth, operational efficiency, workload reduction, fairness, recognition, emotional well-being, and career development. By improving employee satisfaction, the Company will ultimately enhance service quality and customer satisfaction.

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(F) MANAGEMENT DISCUSSION AND ANALYSIS OF S.F. HOLDING FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025
I. Key Financial Data
(I) Key Accounting Data and Financial Indicators

Whether the Company needs to make retrospective adjustments or restatements of accounting data of prior years

❑ Yes ✔❑ No

			Changes over		Changes over
	Three	months	the the same	Nine months	the same
		ended	period of the	ended	period of the
	September 30,		preceding	September 30,	preceding
Items		2025	year	2025	year
Revenue (RMB’000)	78,402,808		8.21%	225,260,982	8.89%
Net profit attributable to
owners of the Company
(RMB’000)	2,570,557		-8.53%	8,308,256	9.07%
Net profit attributable to
owners of the Company after
deducting non-recurring
profit or loss (RMB’000)	2,227,033		-14.17%	6,778,020	0.52%
Net cash flows from operating
activities (RMB’000)		–	–	19,415,214	-13.91%
Basic earnings per share
(RMB/share)		0.51	-13.56%	1.67	5.70%
Diluted earnings per share
(RMB/share)		0.51	-13.56%	1.67	5.70%
Return on weighted average		2.60%	Decreased by	8.65%	Increased by
net assets			0.53		0.31
			percentage		percentage
			point		point
			As at	As at
			September	December
Items			30, 2025	31, 2024	Changes
Total assets (RMB’000)			217,925,217	213,824,213	1.92%
Equity attributable to owners	of the
Company (RMB’000)			98,273,846	91,993,286	6.83%

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(II) Non-recurring Gain and Loss Items and Amounts

✔❑ Applicable ❑ Not applicable

	Three months	Nine months
	ended	ended
	September 30,	September 30,
Items	2025	2025	Notes
	RMB’000	RMB’000
Gains on disposal of	–	777,717	The gain on disposal of
investments in subsidiaries			equity interest (being the
			amount after taxation of
			approximately RMB590
			million) arising from the
			transfer by the Company of
			three property-holding
			wholly-owned subsidiaries
			to Southern SF Logistics
			REIT in the second quarter.
Profit or loss from disposal	18,957	-13,361
of non-current assets
(including write-offs of
accrued asset impairment
provisions)
Government grants	165,887	520,953	Mainly fiscal appropriations,
recognized in profit or loss			tax refunds, and
for the current period			transportation subsidies
(except for those closely			for the logistics industry.
related to the Company’s
normal business
operations, compliant with
national policies, granted
according to established
standards and have
continuous effect on the
profit and loss of the
Company)

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Items Profit or loss from changes in the fair value of financial assets and financial liabilities held by non-financial entities, as well as profit or loss from the disposal of financial assets and financial liabilities, excluding effective hedging activities related to the Company’s normal operations Reversal of impairment provision for receivables individually assessed for impairment Other non-operating income and expenses other than the aforesaid items Less: Income tax effect Non-recurring profit or loss attributable to minority shareholders (after tax) Total	Three months ended September 30, 2025 RMB’000 181,724 20,354 80,349 104,436 19,311 343,524	Nine months ended September 30, 2025 Notes RMB’000 540,263 Mainly due to the income from structured deposits. 54,478 134,236 431,292 52,758 1,530,236

Details of other profit or loss items that meet the definition of non-recurring profit or loss

❑ Applicable ✔❑ Not applicable

Explanation on defining the non-recurring profit or loss items listed in the “Explanatory Announcement No. 1 for Information Disclosure by Public Issuers of Securities — Non-recurring Profit or Loss” 《公開發行證券的公司信息披露解釋性公( 告第 1 號 — 非經常性損益》) as recurring profit or loss items

❑ Applicable ✔❑ Not applicable

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(III) Accounting Data Differences under Domestic and Overseas Accounting Standards

The net profit attributable to owners of the Company and the equity attributable to owners of the Company in the consolidated financial statements prepared under the Chinese Accounting Standards for the reporting period are consistent with those financial data prepared under the International Financial Reporting Standards.

(IV) Changes in Key Accounting Data and Financial Indicators and Reasons for Changes

✔❑ Applicable ❑ Not applicable

The Company has remained steadfast in its commitment to long-termism, adhering to the vision of becoming a well-respected and the world’s leading digital intelligence logistics solution provider. It is committed to continuously enhancing its long-term core competitiveness in order to achieve sustainable and healthy development. Since the second half of 2024, the Company has advanced the “Stimulate Operation Vitality” strategy, exploring the implementation of an empowered management and results-sharing incentive mechanism focused on frontline operations. This initiative promotes a top-down enhancement of entrepreneurial awareness and business accountability, inspiring innovation, agility and a stronger sense of ownership among employees. Through this alignment of organizational and individual goals, the Company fosters collaborative growth and symbiotic development between its employees and the enterprise.

In 2025, the Company has continued to advance the implementation of the “Stimulate Operation Vitality”, granting greater managerial autonomy and incentive-based empowerment to frontline business teams. This approach has effectively strengthened the organization’s motivation for market expansion and responsiveness to customer needs. At the same time, the Company reinvested the efficiency gains from cost optimization into front-end business development, further enhancing the market competitiveness of its products and services. As a result, in the third quarter of 2025, the Company maintained a strong growth trajectory, with parcel volume growth outpacing the overall average for the domestic express delivery industry and market share continuing to expand steadily. The scaling up of both business volume and network capacity has enabled the Company to fully leverage economies of scale within its logistics network, deepen innovations in operational models, and advance a flatter and more differentiated network structure. These initiatives collectively support the establishment of a long-term structural mechanism for enhanced efficiency and sustainable cost reduction, reinforcing the Company’s foundation for durable, high-quality growth.

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Amid a complex and evolving market backdrop, the Company has remained strategically disciplined and proactive in addressing challenges. It continued to upgrade its operational network and strengthen the service assurance framework supporting its premium, time-definite service offerings, thereby consolidating its competitive advantages in standardized products and reaffirming its commitment to delivering exceptional value to customers. As a result, revenue growth for the Company’s mid-to-high end time-definite express services accelerated quarter-on-quarter in the third quarter of 2025. The Company’s superior service experience has further deepened customer engagement and loyalty, driving sustained expansion of its customer base. As of the end of the third quarter of 2025, the Company served more than 2.4 million customers with active credit accounts and over 780 million retail customers.

Building upon this foundation, the Company continued to advance along its dual strategic pillars of industry specialization and globalization. It increased investment in strategic resources, enhanced its portfolio of integrated industry logistics solutions, and strengthened the development of international network capabilities — all aimed at establishing a more resilient and differentiated foundation for long-term competitive advantage.

In terms of industry-specific solutions, the Company continued to strengthen its capabilities in delivering tailored industry-specific logistics solutions, cultivating professional talent, and expanding its service coverage across both upstream and downstream supply chain scenarios for key industry clients, successfully establishing multiple flagship domestic and international supply chain projects. In the third quarter of 2025, logistics revenue from sectors such as industrial equipment, telecommunications and high technology, automotive and consumer goods recorded robust year-on-year growth of over 25%, underscoring the Company’s accelerating progress in deepening its industry-focused transformation.

Under its globalization strategy, the Company continued to expand and strengthen its global network, accelerating investment in and development of international air freight routes, customs clearance capabilities, overseas airside facilities, warehousing resources and last-mile delivery infrastructure. Complemented by cross-border end-to-end digital enablement, these initiatives have driven the establishment of an integrated international express and supply chain service platform across the Asia-Pacific, Europe and North America regions, benchmarking against top-tier global standards. Although the Company’s international freight forwarding revenue was affected by fluctuations in global trade and a notable decline in ocean freight rates, it capitalized on its extensive global network and diversified product portfolio to flexibly navigate market volatility and capture new opportunities arising from the growing overseas expansion of Chinese enterprises. As a result, in the third quarter of 2025, the Company’s international express and cross-border e-commerce logistics revenue recorded a year-on-year increase of 27%, with growth momentum accelerating from the first half of the year.

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In the third quarter of 2025, the Company achieved solid overall performance, with total revenue reaching RMB78.40 billion, representing a year-on-year increase of 8.2%, and total parcel volume amounting to 4.31 billion, representing an increase of 33.4% year-on-year. By business segment, the express logistics segment recorded a 14.4% year-on-year increase in revenue, reflecting steady expansion in business scale. Meanwhile, revenue from the supply chain and international segment declined 5.3% year-on-year, primarily due to the significant retreat in ocean freight rates from last year’s high levels, which affected the freight forwarding business. Nevertheless, the Company’s achieved strong growth in international express and cross-border e-commerce logistics revenue.

Driven by the Company’s proactive market expansion strategy and necessary long-term strategic investments, profitability experienced short-term fluctuations in the third quarter of 2025. The Company recorded a gross profit of RMB9.79 billion in the third quarter of 2025, representing a 4.4% year-on-year decrease. In terms of expenses, the Company adhered to a lean management philosophy and continued to strengthen organizational efficiency. As a result, the administrative expense ratio remained broadly stable, while the R&D expense ratio decreased by 0.2 percentage point year-on-year, and the finance expense ratio declined by 0.3 percentage point. The sales and marketing expense ratio rose by 0.2 percentage point, primarily due to the Company’s continued investment in expanding its sales force to enhance market development capabilities for end-to-end industry supply chain and international businesses.

In summary, the Company recorded a net profit attributable to owners of the Company of RMB2.57 billion in the third quarter of 2025, representing a year-on-year decrease of 8.5%. While profitability experienced temporary pressure, the ongoing structural upgrades across the Company’s operational network, along with the continuous strengthening of its industry-focused and international strategic capabilities, are expected to further enhance customer stickiness and enable the Company to swiftly capture emerging opportunities in both domestic and international markets. These efforts will reinforce the Company’s strategic leadership position, unlock its second growth curve, and establish a differentiated, strategically resilient and defensible integrated logistics ecosystem, laying a solid foundation for sustainable mid- to long-term growth.

Meanwhile, while maintaining its long-term strategic direction, the Company continued to fine-tune its market strategies dynamically in response to evolving market conditions and operational rhythms. It advances mechanisms to stimulate operational vitality progressions, implementing differentiated authorizations across business regions and shifting its incentive framework from scale-driven growth to value-driven development, thereby ensuring the sustained growth of high-value businesses and laying a solid foundation for high-quality, sustainable expansion. In addition, by leveraging its diverse logistics ecosystem, the Company will continue to integrate internal and external resources, deepen operational model innovation, and advance network and resource stratification to better accommodate multi-scenario logistics business development. These efforts have led to further

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structural improvements in efficiency and cost reduction. Building upon the above initiatives and based on the information currently available to management, the Company’s management remains firmly committed to achieving a year-on-year stable level of net profit attributable to owners of the Company in the fourth quarter of 2025 and a steady year-on-year growth for the full-year 2025 net profit attributable to owners of the Company.

The explanation of changes in key financial data is as follows:

	Nine months ended	Nine months ended
	September 30,
Items	2025	2024	Changes	Notes
	*RMB’000*	RMB’000
Revenue	225,260,982	206,860,993	8.89%	No material change.
Cost of revenue	196,057,604	177,993,370	10.15%	No material change.
Selling and marketing	2,773,627	2,238,312	23.92%	Mainly driven by the
expenses				Company’s accelerated
				expansion of its sales
				team to bolster business
				development.
Investment income	1,175,825	548,825	114.24%	Mainly attributable to the
				gain on the transfer by
				the Company of its
				property-holding
				subsidiaries to Southern
				SF Logistics REIT in the
				second quarter.
Losses/(reversal) of	-95,401	239,153	-139.89%	Mainly attributable to the
credit impairment				reversal of the credit
				impairment as a result
				of the recovery of aged
				accounts receivable.

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	As at	As at
	September	December
Items	30, 2025	31, 2024	Changes	Notes
	*RMB’000*	RMB’000
Financial assets held for	25,647,106	11,246,156	128.05%	Mainly due to the
trading				increase in structured
				deposits.
Long-term equity	7,216,771	6,203,642	16.33%	Mainly due to an increase
investments				in investments in
				associates and joint
				ventures.
Fixed assets	51,299,749	54,058,101	-5.10%	Mainly attributable to a
				decrease in properties
				as a result of the
				transfer by the
				Company of its
				property-holding
				subsidiaries to Southern
				SF Logistics REIT in the
				second quarter.
Right-of-use assets	15,183,352	12,842,101	18.23%	Mainly due to an increase
				in property leasing.
Short-term borrowings	7,274,468	15,003,336	-51.51%	Mainly due to repayment
				of borrowings.
Employee benefits	4,750,222	6,151,172	-22.78%	Mainly due to payment of
payable				staff salary.
Other current liabilities	5,765,439	918,429	527.75%	Mainly attributable to the
				issuance of Super
				Short-Term Commercial
				Paper and convertible
				bonds.
Lease liabilities	9,601,517	7,094,483	35.34%	Mainly due to an increase
				in leasing.
Retained earnings	42,974,087	39,140,246	9.80%	Mainly due to profit for
				the period.

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	Nine months ended	Nine months ended
	September 30,
Items	2025	2024	Changes	Notes
	*RMB’000*	RMB’000
Net cash flows from	19,415,214	22,552,338	-13.91%	No material change.
operating activities
Net cash flows from	-19,173,669	-23,545,605	18.57%	Mainly due to a decrease
investing activities				in the net outflow of
				structured deposits.
Net cash flows from	-14,375,963	-18,163,634	20.85%	Mainly due to the
financing activities				decrease in the
				acquisition of minority
				interests, and the
				reduction in the
				repurchase of the
				Company’s shares.

II. Use of Proceeds

(I) Issuance of H Shares by the Company on the Hong Kong Stock Exchange

The Company was successfully listed on the Main Board of the Hong Kong Stock Exchange on November 27, 2024. A total of 170,000,000 ordinary shares with a par value of RMB1 per Share were successfully placed and issued at a price of HKD34.3 per share in the global offering, with an aggregate par value of RMB170,000,000. After deducting the underwriting commissions and other estimated expenses related to the global offering, the net proceeds from the share issuance in the global offering for the Company were approximately HKD5,662 million, equivalent to approximately RMB5,299 million at the exchange rate of HKD1.00 to RMB0.9358.

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As at September 30, 2025, the proceeds from the global offering were utilized in accordance with the planned uses and proportions as stated in the prospectus. The details are as follows:

Planned use of
Proceeds
Percentage
Amount
RMB’000
Strengthening
international and
cross-border
logistics capabilities
45%
2,384,395
Strengthening and
optimizing logistics
network and service
offerings in China
35%
1,854,529
Research and
development of
advanced
technologies and
digital solutions to
upgrade supply
chain and logistics
services and
implement
ESG-related
initiatives
10%
529,866
Working capital and
general corporate
purposes
10%
529,866
Total
100%
5,298,656

As at September 30,
2025
Expected timeline
for the utilization
of the unutilized
amount
Utilized
amount
Unutilized
amount
RMB’000
RMB’000
800,325
1,584,070
On or before
the end of 2026
1,842,127
12,402
On or before
the end of 2025
437,285
92,581
On or before
the end of 2025
529,866
–
–
3,609,603
1,689,053

– II-371 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(II) Placing of New H Shares by the Company under General Mandate

Pursuant to the general mandate approved at the 2024 Annual General Meeting of the Company, the Company convened the 22nd meeting of the Sixth Session of the Board of Directors on June 25, 2025, during which the Proposal on the Exercise of General Mandate to Place Shares on the Main Board of The Stock Exchange of Hong Kong Limited was considered and approved. The Board of Directors approved the allotment and issuance of an aggregate of 70,000,000 new H shares at a placing price of HKD42.15 per H share. On July 4, 2025, the Company successfully completed the Placing. The net proceeds from the placing were approximately HKD2,934 million, and were equivalent to approximately RMB2,681 million based on the exchange rate of HKD1.00 to RMB0.9139 after deducting the underwriting commissions and other estimated expenses related to the Placing.

As at September 30, 2025, the proceeds from the placing have been utilized according to the planned uses and proportions set out in the placing announcement. The details are as follows:

Planned use of Proceeds Percentage Amount RMB’000 Strengthening international and cross-border logistics capabilities 30% 804,317 Research and development of advanced technologies and digital solutions 30% 804,317 Optimizing the capital structure of the Company 30% 804,317 General corporate purposes 10% 268,106 Total 100% 2,681,057	As at September 30, 2025 Expected timeline for the utilization of the unutilized amount Utilized amount Unutilized amount RMB’000 RMB’000 – 804,317 On or before the end of 2027 43,410 760,907 On or before the end of 2027 804,317 – – 268,106 – – 1,115,833 1,565,224

– II-372 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(III) Issuance by the Company of Convertible Bonds Convertible into H Shares of the Company Through its Wholly-owned Overseas Subsidiary

Pursuant to the Proposal on the Issuance of Debt Financing Instruments by Wholly-owned Subsidiaries in Domestic and Overseas Markets and the Proposal on Providing Guarantees for the Issuance of Debt Financing Instruments by Wholly-Owned Overseas Subsidiaries considered and approved at the 2023 Annual General Meeting of the Company, and the general mandate to the Board of Directors considered and approved at the 2024 Annual General Meeting, the Company convened the 22nd meeting of the Sixth Session of the Board of Directors on June 25, 2025, at which the Proposal on the Issuance of Corporate Bonds Convertible into H shares of the Company by a Subsidiary was considered and approved. The Board of Directors approved the issuance by the wholly-owned overseas subsidiary of convertible corporate bonds convertible into H shares of the Company (hereinafter referred to as the “ Convertible Bonds ”) and provided guarantees for the said issuance by the wholly-owned overseas subsidiary. On July 10, 2025, the issuance of the Convertible Bonds was completed. After deducting the underwriting commissions and other estimated expenses related to the issuance of the Convertible Bonds, the net proceeds raised from the Convertible Bonds were approximately HKD2,909 million, which is equivalent to approximately RMB2,666 million based on the exchange rate of HKD1.00 to RMB0.9165.

As at September 30, 2025, the proceeds from the Convertible Bonds have been utilized according to the planned uses set out in the issuance announcement. The Company has cumulatively utilized RMB2,410 million to strengthen the Group’s international and cross-border logistics capabilities, research and develop advanced technologies and digital solutions, and optimize the capital structure of the Company, and for general corporate purposes. The utilized amount accounted for approximately 90.40% of the net proceeds.

– II-373 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

III. Information of Shareholders

(I) Statement of the Total Number of Shareholders of Ordinary Shares and Shareholders of Preference Shares with Restored Voting Rights and the Shareholdings of the Top 10 Shareholders

Unit: Share

Total number of shareholders	269,654 (269,570	holders of A	Total number of shareholders of	Total number of shareholders of	Total number of shareholders of		–
of ordinary shares as at the	shares and 84	holders of H	preference shares with restored voting
end of the reporting period		shares)	rights as at the	end of the reporting
			period (if any)
Shareholdings of	the top 10 shareholders (excluding		shares lent under refinancing		arrangement)
		Percentage		Number of		Pledged, marked or
	Nature of	of shares	Number of	restricted			locked-up
Name of shareholder	shareholder	held	shares held	shares held	Status		Number
Shenzhen Mingde Holding	Domestic non-	46.87%	2,361,920,119	–	Pledged		862,592,980
Development Co., Ltd.*	state-owned
(深圳明德控股發展有限公司)	legal person
Hong Kong Securities	Foreign legal	5.15%	259,290,665	–	–		–
Clearing Company Limited	person
HKSCC Nominees Limited	Foreign legal	4.76%	239,979,704	–	–		–
	person
S.F. Holding Co., Ltd.	Others	3.97%	200,000,000	–	–		–
Employees “Grow
Together” Shareholding
Scheme (A Shares)
Shenzhen Weishun Enterprise	Domestic	1.98%	100,000,000	–	–		–
Management Co., Ltd.*	non-state-owned
(深圳市瑋順企業管理有限	legal person
公司)
Ningbo Shunda Fengrun	Domestic	1.62%	81,450,959	–	Pledged		11,523,500
Investment Management	non-state-owned
Partnership (Limited	legal person
Partnership)* (寧波順達
豐潤創業投資合夥企業
（有限合夥）)

– II-374 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Shareholdings of the top 10 shareholders (excluding shares lent under refinancing arrangement)

		Percentage		Number of	Pledged, marked or	Pledged, marked or
	Nature of	of shares	Number of	restricted		locked-up
Name of shareholder	shareholder	held	shares held	shares held	Status	Number
Industrial and Commercial	Others	0.81%	40,990,119	–	–	–
Bank of China Limited –
Huatai-Pine Bridge CSI 300
Exchange-traded Open-end
Index Securities Investment
Fund* (中國工商銀行股份有
限公司－華泰柏瑞滬深300交
易型開放式指數證券投資
基金)
Lin Zheying	Domestic	0.80%	40,159,543	–	–	–
	natural person
Liu Jilu	Domestic	0.71%	35,793,780	26,845,335	Pledged	5,000,000
	natural person
China Construction Bank	Others	0.59%	29,648,152	–	–	–
Corporation – E Fund CSI
300 Exchange-traded
Open-end Index Initiated
Securities Investment Fund*
(中國建設銀行股份有限公司
－易方達滬深300交易型開放
式指數發起式證券投資基金)

Shareholdings of the top 10 holders of unrestricted tradable shares (excluding shares lent under refinancing arrangement and lock-up shares for senior management)

	Number of
	unrestricted
	tradable shares	Class and number of shares
Name of shareholder	held	Class	Number
Shenzhen Mingde Holding	2,361,920,119	RMB ordinary	2,361,920,119
Development Co., Ltd.*		shares
(深圳明德控股發展有限公司)
Hong Kong Securities Clearing	259,290,665	RMB ordinary	259,290,665
Company Limited		shares

– II-375 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Shareholdings of the top 10 holders of unrestricted tradable shares (excluding shares lent	Shareholdings of the top 10 holders of unrestricted tradable shares (excluding shares lent	Shareholdings of the top 10 holders of unrestricted tradable shares (excluding shares lent	Shareholdings of the top 10 holders of unrestricted tradable shares (excluding shares lent	Shareholdings of the top 10 holders of unrestricted tradable shares (excluding shares lent
under refinancing arrangement and lock-up shares for senior management)
	Number of
	unrestricted
	tradable shares	Class and number of		shares
Name of shareholder	held	Class		Number
HKSCC Nominees Limited	239,979,704	Overseas-listed	239,979,704
		foreign shares
S.F. Holding Co., Ltd. Employees	200,000,000	RMB ordinary	200,000,000
“Grow Together” Shareholding		shares
Scheme (A Shares)
Shenzhen Weishun Enterprise	100,000,000	RMB ordinary	100,000,000
Management Co., Ltd.*		shares
(深圳市瑋順企業管理有限公司)
Ningbo Shunda Fengrun Investment	81,450,959	RMB ordinary		81,450,959
Management Partnership (Limited		shares
Partnership)* (寧波順達豐潤創業投資
合夥企業（有限合夥）)
Industrial and Commercial Bank of	40,990,119	RMB ordinary		40,990,119
China Limited – Huatai-PineBridge		shares
CSI 300 Exchange-traded Open-end
Index Securities Investment Fund*
(中國工商銀行股份有限公司－華泰柏
瑞滬深300 交易型開放式指數證券投資
基金)
Lin Zheying	40,159,543	RMB ordinary		40,159,543
		shares
China Construction Bank Corporation	29,648,152	RMB ordinary		29,648,152
– E Fund CSI 300 Exchange-traded		shares
Open-end Index Initiated Securities
Investment Fund* (中國建設銀行股份
有限公司－易方達滬深300 交易型開放
式指數發起式證券投資基金)
National Social Security Fund Portfolio	24,585,513	RMB ordinary		24,585,513
112* (全國社保基金一一二組合)		shares

– II-376 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Shareholdings of the top 10 holders	of unrestricted tradable shares (excluding shares lent
under refinancing arrangement and lock-up shares for senior management)
	Number of
	unrestricted
	tradable shares Class and number of shares
Name of shareholder	held Class Number
Description of the connected	Shenzhen Mingde Holding Development Co., Ltd.*
relationships or concerted actions	(深圳明德控股發展有限公司) holds a total of
among the above shareholders	2,461,920,119 A shares of the Company, accounting
	for 48.85% of the total share capital of the Company,
	of which 2,361,920,119 shares are held directly, and
	100,000,000 shares are held through its wholly-owned
	subsidiary, Shenzhen Weishun Enterprise
	Management Co., Ltd.* (深圳市瑋順企業管理有限
	公司).
	The Company is not aware of any connected
	relationships or concerted actions among the other
	shareholders above.
Description of the top 10 shareholders	Lin Zheying, a shareholder of the Company, holds
engaging in margin trading and	33,144,110 shares through an ordinary securities
securities lending business (if any)	account, and also holds 7,015,433 shares through a
	customer credit transaction secured securities
	account in Yuekai Securities Co., Ltd.* (粵開證券股份
	有限公司), amounting to a total of 40,159,543 shares.

The participation in lending of shares under the refinancing business by shareholders holding more than 5% of the shares, top 10 shareholders and top 10 holders of unrestricted tradable shares.

❑ Applicable ✔❑ Not applicable

Change of top 10 shareholders and top 10 holders of unrestricted tradable shares as compared to the previous period due to lending/returning of shares under the refinancing business.

❑ Applicable ✔❑ Not applicable

– II-377 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(II) Statement of the Total Number of Shareholders of Preference Shares and the Shareholdings of the Top 10 Shareholders of Preference Shares
❑ Applicable ✔❑ Not applicable

IV. Other Significant Events

✔❑ Applicable ❑ Not applicable

(I) 2025 First A-Share Repurchase Plan

Based on confidence in the Company’s future development prospects and a strong recognition of its value, with an aim to further enhance its long-term incentive mechanisms, fully mobilize the enthusiasm of core management and outstanding employees, collectively promoting the Company’s sustained growth, and after comprehensively considering its business development outlook, operational status, financial condition, future profitability, and recent stock performance in the secondary market, the Company held the 20th meeting of the Sixth Session of the Board of Directors on April 28, 2025, during which the Proposal regarding the 2025 First A-Share Repurchase Plan was considered and approved. The Company intends to use internal funds to repurchase certain A shares of the Company for the purpose of an employee stock ownership plan or equity incentive. The total funds for the repurchase will be no less than RMB500 million and no more than RMB1 billion, with the repurchase price not exceeding RMB60 per share, and the repurchase period being 12 months from the date the 2025 First A-Share Repurchase Plan was considered and approved by the Board of Directors. As at September 30, 2025, the Company had repurchased 7,432,648 A shares through centralized bidding via the special securities account opened solely for share repurchase, with a total repurchase amount of approximately RMB299,989,306.65 (excluding transaction fees). The number of repurchased shares accounted for 0.15% of the current total share capital of the Company, and the average transaction price was RMB40.36 per share.

Taking into full consideration such factors as the securities market conditions, the Company’s financial conditions, and the progress of the share repurchase, the Company held the 25th meeting of the Sixth Session of the Board of Directors on October 30, 2025, during which the Proposal regarding the Adjustment to the 2025 First A-Share Repurchase Plan was considered and approved. The Company adjusted the total funds for the repurchase from “no less than RMB500 million and no more than RMB1 billion” to “no less than RMB1.5 billion and no more than RMB3 billion”, with the implementation period for the repurchase extended until October 29, 2026. Other contents of the 2025 First A-Share Repurchase Plan remain unchanged.

– II-378 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

(II) The Company’s Employees “Grow Together” Shareholding Scheme (A Shares)

In order to establish and improve the interest sharing mechanism between the employees and the Shareholders, enhance the level of corporate governance, motivate the enthusiasm and creativity of employees, and promote the long-term, continuous and healthy development of the Company, the Company convened the 23rd meeting of the Sixth Session of the Board of Directors and the 2025 First Extraordinary General Meeting on August 28, 2025 and September 15, 2025 respectively, at which the S.F. Holding Co., Ltd. Employees “Grow Together” Shareholding Scheme (A Shares) (Draft) and its Summary (the “ Shareholding Scheme ”) was considered and approved. The source of shares for the Shareholding Scheme is the voluntary transfer at nil consideration by Shenzhen Mingde Holding Development Co., Ltd. (深圳明德控股發展有限公司) (hereinafter referred to as “ Mingde Holding* ”), the Company’s controlling shareholder, involving an aggregate number of not more than 200 million A shares, and accounting for approximately 4% of the current total share capital of the Company.

The Shareholding Scheme is a mid- to long-term incentive scheme. Grants and vesting shall be carried out in nine annual periods during its duration. Participants include Directors (excluding independent directors and the actual controller), Supervisors, senior management personnel, core management personnel and core skeletal personnel who have direct and significant influence and contributions to the Company’s future operation and performance growth. The Shareholding Scheme grants an aggregate of no more than 180 million virtual share units to the Participants each year, and the maximum number of Participants in each year shall not exceed 16,000 persons. The specific annual grant shall be determined by the Board of Directors of the Company after taking into consideration the actual situation at the time. In the first quarter of the subsequent year following each grant, the Board of Directors of the Company shall preliminarily calculate the number of the shares to be vested corresponding to the increased value of the accounting price over the grant price of the virtual share units. The final number of shares vested to a Participant is also subject to final determination based on the corporate-level and individual-level performance appraisal results. A 12-month lock-up period shall be set after each vesting, followed by a corresponding service period. Participants holding the units under the Shareholding Scheme are entitled to the right to cash dividends during the lock-up period and the service period, and their complete rights shall be enjoyed upon expiration of the service period.

The first grant date for 2025 was September 15, 2025, with the total number of grantees in the first grant not exceeding 7,186 persons, the number of virtual share units granted not exceeding 81.144 million units, and the grant price being RMB35 per unit.

– II-379 –

APPENDIX II

FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

To actively promote the implementation of the Shareholding Scheme, Mingde Holding transferred 200 million A shares of the Company held by it to the securities account opened by the Shareholding Scheme at China Securities Depository and Clearing Corporation Limited on September 17, 2025.

(III) Domestic Issuance of Debt Financing Instruments by a Wholly-owned Subsidiary of the Company

In alignment with the Company’s development strategy and to support its business growth objectives, Shenzhen S.F. Taisen Holding (Group) Co., Ltd. (深圳順豐泰森控股（集團）有限公司) (“ Taisen Holding ”), a wholly-owned subsidiary of the Company, completed the domestic issuance of debt financing instruments during the reporting period. Pursuant to the Notice of Registration Acceptance (Zhong Shi Xie Zhu [2024] No. DFI31) 《接受註冊通知書》( （中市協註[2024]DFI31號）) issued by the National Association of Financial Market Institutional Investors, Taisen Holding completed the issuance of the fourth tranche of 2025 Super Short-Term Commercial Paper on August 7, 2025, with a total issuance size of RMB1 billion.

– II-380 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(A) UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The following unaudited pro forma consolidated balance sheet of J&T Global Express Limited (the “ Company ”) and its subsidiaries (the “ Group ”) (the “ Unaudited Pro Forma Financial Information ”) has been prepared on the basis of the notes set out below for the purpose of illustrating the effects of the proposed subscription of H Shares of S.F. Holding Co., Ltd. (“ S.F. Holding ”) by the Company with the issue of the Class B Shares of the Company to S.F. Holding (the “ Proposed Transaction ”) on the financial position of the Group as at 30 June 2025 as if the Proposed Transaction had been completed on 30 June 2025.

The Unaudited Pro Forma Financial Information of the Group as at 30 June 2025 has been prepared based on (i) the unaudited interim condensed consolidated balance sheet of the Group as at 30 June 2025, as set out in the Company’s published interim report for the six months ended 30 June 2025; and (ii) the pro forma adjustments prepared to reflect the effects of the Proposed Transaction as explained in the notes set out below that are directly attributable to the Proposed Transaction and not relating to future events or decisions and are factually supportable.

The Unaudited Pro Forma Financial Information should be read in conjunction with other financial information contained in this circular.

The Unaudited Pro Forma Financial Information has been compiled by the Directors for illustrative purposes only and is based on a number of assumptions, estimates and currently available information. Because of its hypothetical nature, the Unaudited Pro Forma Financial Information may not give a true picture of the financial position of the Group had the Proposed Transaction been completed as at 30 June 2025 or any future date.

– III-1 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(I) Unaudited Pro Forma Consolidated Balance Sheet of the Group as at 30 June 2025

ASSETS Non-current assets Investment properties Property, plant and equipment Right-of-use assets Intangible assets Investments accounted for using the equity method Deferred income tax assets Other non-current assets Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Current assets Inventories Trade receivables Prepayments, other receivables and other assets Financial assets at fair value through profit or loss Restricted cash Cash and cash equivalents Total assets	Unaudited interim condensed consolidated balance sheet of the Group as at 30 June 2025 Pro forma adjustment US$’000 US$’000 Note 1 Note 2 132 1,448,958 438,840 1,111,115 2,241 98,964 105,219 639,542 – 1,057,260 3,845,011 20,958 614,662 1,129,596 134,941 35,149 1,661,901 3,597,207 7,442,218	Unaudited pro forma interim condensed consolidated balance sheet of the Group as at 30 June 2025 US$’000 132 1,448,958 438,840 1,111,115 2,241 98,964 105,219 639,542 1,057,260
		4,902,271 20,958 614,662 1,129,596 134,941 35,149 1,661,901
		3,597,207
		8,499,478

– III-2 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

EQUITY Equity attributable to owners of the Company Share capital Share premium Treasury shares Other reserves Accumulated losses Non-controlling interests Total equity LIABILITIES Non-current liabilities Borrowings Lease liabilities Employee benefit obligations Financial liabilities – redemption liabilities of shares of JNT KSA Financial liabilities at fair value through profit or loss Deferred tax liabilities	Unaudited interim condensed consolidated balance sheet of the Group as at 30 June 2025 Pro forma adjustment US$’000 US$’000 Note 1 Note 2 18 2 9,061,736 1,057,258 (55,622) (105,087) (5,939,875) 2,961,170 (303,404) 2,657,766 1,294,577 281,137 9,187 72,673 652,337 23,154 2,333,065	Unaudited pro forma interim condensed consolidated balance sheet of the Group as at 30 June 2025 US$’000 20 10,118,994 (55,622) (105,087) (5,939,875) 4,018,430 (303,404) 3,715,026 1,294,577 281,137 9,187 72,673 652,337 23,154 2,333,065

– III-3 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Current liabilities Trade payables Advances from customers Accruals and other payables Financial liabilities at fair value through profit or loss Current income tax liabilities Borrowings Lease liabilities Total liabilities Total equity and liabilities	Unaudited interim condensed consolidated balance sheet of the Group as at 30 June 2025 Pro forma adjustment US$’000 US$’000 Note 1 Note 2 552,458 310,760 1,008,826 897 20,782 412,643 145,021 2,451,387 4,784,452 7,442,218	Unaudited pro forma interim condensed consolidated balance sheet of the Group as at 30 June 2025 US$’000 552,458 310,760 1,008,826 897 20,782 412,643 145,021
		2,451,387
		4,784,452

		8,499,478

– III-4 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(II) Notes to the unaudited pro forma financial information of the Group

The amounts are extracted from the unaudited interim condensed consolidated balance sheet of the Group as at 30 June 2025 as set out in the Company’s published interim report for the six months ended 30 June 2025.
Upon Completion of the Proposed Transaction, S.F. Holding will not become a subsidiary of the Company and the financial results of S.F. Holding will not be consolidated into the consolidated financial statements of the Group. For the purpose of this Unaudited Pro Forma Financial Information, it is assumed that the H Shares of S.F. Holding to be subscribed by the Company pursuant to the Share Subscription Agreement had been recognised by the Group as financial assets at fair value through other comprehensive income. The adjustment represented (i) the recognition of the share capital at nominal value of approximately US$1,643 and share premium of approximately US$1,057,258,000 to illustrate the impact of the allotment and issue of 821,657,973 Class B Shares of the Company at the Issue Price of HK$10.10 (equivalent to approximately US$1.28674) per Class B Share of the Company as the Consideration Shares for the Proposed Subscription; (ii) the recognition of the Group’s subscription of H Shares of S.F. Holding as financial assets at fair value through other comprehensive income initially measured at the amount of approximately HK$8,298,746,000 (equivalent to approximately US$1,057,260,000), which is the consideration payable by the Company based on 225,877,669 H Shares of S.F. Holding at the subscription price of HK$36.74 (equivalent to approximately US$4.68068) per H Share of S.F. Holding pursuant to the Share Subscription Agreement.

For the purpose of this Unaudited Pro Forma Financial Information, the issue price of the consideration shares and the subscription price of the Proposed Subscription are translated into US$ at the exchange rate of HK$0.1274 to US$1, which was the exchange rate prevailing on 30 June 2025 with reference to the rate published by the People’s Bank of China, such translation does not constitute a representation that any amount has been, could have been, or may otherwise be exchanged or converted at the above rate.

As the actual exchange rate at the Completion Date may be materially different from the amount of this unaudited pro forma financial information, the actual amounts to be recognised in the consolidated balance sheet of the Group upon the Completion may be materially different from the amounts shown in this unaudited pro forma financial information. Subsequent to initial recognition, the amounts of H Shares of S.F. Holding classified as financial assets at fair value through other comprehensive income will be subsequently measured and stated at its quoted market price after the completion of the Proposed Subscription.

Apart from the Proposed Transaction, no other adjustment has been made to the Unaudited Pro Forma Financial Information to reflect any trading results or other transactions entered into by the Group subsequent to 30 June 2025.

– III-5 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(B) REPORT FROM THE REPORTING ACCOUNTANT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The following is the text of a report on the unaudited pro forma financial information of the Group received from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

==> picture [206 x 43] intentionally omitted <==

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

To the Directors of J&T Global Express Limited

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of J&T Global Express Limited (the “ Company ”) and its subsidiaries (collectively the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma consolidated balance sheet as at 30 June 2025 and related notes (the “ Unaudited Pro Forma Financial Information ”) as set out on pages III-1 to III-5 of the Company’s circular dated 27 March 2026, in connection with the proposed subscription of H Shares of S.F. Holding Co., Ltd. (the “S.F. Holding”) by the Company and the proposed issuance of Class B Shares of the Company to S.F. Holding under the General Mandate (the “ Transaction ”) by the Company. The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described on pages III-1 to III-5 of the circular.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the Transaction on the Group’s financial position as at 30 June 2025 as if the Transaction had taken place at 30 June 2025. As part of this process, information about the Group’s unaudited interim condensed consolidated financial position has been extracted by the Directors from the Group’s financial information for the six months ended 30 June 2025, on which a review report has been published.

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars (“ AG 7 ”) issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”).

==> picture [159 x 44] intentionally omitted <==

– III-6 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Our Independence and Management

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, issued by the HKICPA, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus , issued by the HKICPA. This standard requires that the reporting accountant plans and performs procedures to obtain reasonable assurance about whether the Directors have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of unaudited pro forma financial information included in a circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the entity as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Transaction at 30 June 2025 would have been as presented.

– III-7 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

The related pro forma adjustments give appropriate effect to those criteria; and
The unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the company, the event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

PricewaterhouseCoopers

Certified Public Accountants Hong Kong, 27 March 2026

– III-8 –

APPENDIX IV

GENERAL INFORMATION

I. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable inquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

II. DISCLOSURE OF INTERESTS

DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ANY OF ITS ASSOCIATED CORPORATIONS

To the best of the knowledge of the Directors and according to the public information available to the Board, as at the Latest Practicable Date, the interests or short positions of the Directors and the chief executive in any Shares, underlying shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO), which will have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which have been taken or deemed to have been taken under such provisions of the SFO) or which will be required, pursuant to Section 352 of the SFO, to be entered in the register or which will be required to be notified to the Company and the Stock Exchange pursuant to the Model Code, will be as follows:

			Approximate %
			shareholding	Approximate %
			interest in the	of the
			relevant class of	Company’s
		Number and	Shares as of the	issued shares as
	Capacity/Nature of	class of	Latest	of the Latest
Name of Director	interest(1)	securities	Practicable Date	Practicable Date
Mr. Jet Jie Li(2)	Interest in a controlled	971,390,048	100.00%	10.92%
	corporation	Class A Shares
		7,943,362 Class B	0.10%	0.09%
		Shares
Ms. Alice Yu-fen	Interest in a controlled	40,008,020 Class	0.50%	0.45%
Cheng(3)	corporation	B Shares
Mr. Yuan Zhang(4)	Interest in a controlled	349,702,854	4.41%	3.93%
	corporation	Class B Shares

– IV-1 –

APPENDIX IV

GENERAL INFORMATION

Notes:

(1) All interests stated are long position.
(2) This includes the 971,390,048 Class A Shares and 7,943,362 Class B Shares held by Jumping Summit Limited; Topping Summit Limited, an entity wholly-owned by Mr. Jet Jie Li, owns 5% equity interest in Jumping Summit Limited; Exceeding Summit Holding Limited, which is held by Vistra Trust (Singapore) Pte. Limited as a trustee for a trust established by Mr. Jet Jie Li for the benefit of Mr. Jet Jie Li and his family members, owns the remaining 95% equity interest in Jumping Summit Limited. Accordingly, Mr. Jet Jie Li is deemed to be interested in the 971,390,048 Class A Shares and 7,943,362 Class B Shares held by Jumping Summit Limited under the SFO.
(3) This includes the 40,008,020 Class B Shares held by Robust Idea Limited, which is wholly-owned by Ms. Alice Yu-fen Cheng. Accordingly, Ms. Alice Yu-fen Cheng is deemed to be interested in the 40,008,020 Class B Shares held by Robust Idea Limited.
(4) This includes the 345,583,289 Class B Shares held by LONG ORIGIN LIMITED and 4,119,565 Class B Shares held by Blink Field Limited. Both of LONG ORIGIN LIMITED and Blink Field Limited are wholly-owned by Mr. Yuan Zhang. Accordingly, Mr. Yuan Zhang is deemed to be interested in the 345,583,289 Class B Shares held by LONG ORIGIN LIMITED and 4,119,565 Class B Shares held by Blink Field Limited.

Save as disclosed above, as of the Latest Practicable Date, so far as are known to any Directors or chief executive of the Company, none of the Directors or the chief executive of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required to be disclosed under Divisions 7 and 8 of Part XV of the SFO or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which were required, pursuant to the Model Code to be notified to the Company and the Stock Exchange.

– IV-2 –

APPENDIX IV

GENERAL INFORMATION

SUBSTANTIAL SHAREHOLDERS’ INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES OF THE COMPANY

As of the Latest Practicable Date, according to the public information available to the Board and so far as are known to any Director, the following persons (not being Directors or the chief executive of the Company) or corporation had interests or short positions in the Shares or underlying Shares of the Company which were required to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or were required to be entered in the register maintained by the Company pursuant to Section 336 of the SFO:

			Approximate %
			shareholding	Approximate %
			interest in the	of the
			relevant class of	Company’s
		Number and	Shares as of the	issued shares as
	Capacity/Nature of	class of	Latest	of the Latest
Name of Shareholder	interest(1)	securities	Practicable Date	Practicable Date
Jumping Summit	Beneficial owner	971,390,048	100.00%	10.92%
Limited(2)		Class A Shares
		7,943,362 Class B	0.10%	0.09%
		Shares
Exceeding Summit	Interest in controlled	971,390,048	100.00%	10.92%
Holding Limited(2)	corporation	Class A Shares
		7,943,362 Class B	0.10%	0.09%
		Shares
Topping Summit	Interest in controlled	971,390,048	100.00%	10.92%
Limited(2)	corporation	Class A Shares
		7,943,362 Class B	0.10%	0.09%
		Shares
Vistra Trust	Trustee	971,390,048	100.00%	10.92%
(Singapore) Pte.		Class A Shares
Limited(2)		7,943,362 Class B	0.10%	0.09%
		Shares
Mr. Chen Mingyong(3)	Interest in controlled	700,887,980	8.84%	7.88%
	corporation/	Class B Shares
	Interest of spouse
Ms. Liang Xiaojing(3)	Interest in controlled	700,887,980	8.84%	7.88%
	corporation/	Class B Shares
	Interest of spouse
Tencent Holdings	Interest in controlled	533,278,240	6.73%	5.99%
Limited(4)	corporation	Class B Shares
Boyu Capital Fund IV,	Interest in controlled	458,112,913	5.78%	5.15%
L.P.(5)	corporation	Class B Shares

– IV-3 –

APPENDIX IV

GENERAL INFORMATION

			Approximate %
			shareholding	Approximate %
			interest in the	of the
			relevant class of	Company’s
		Number and	Shares as of the	issued shares as
	Capacity/Nature of	class of	Latest	of the Latest
Name of Shareholder	interest(1)	securities	Practicable Date	Practicable Date
Boyu Capital General	Interest in controlled	458,112,913	5.78%	5.15%
Partner IV, Ltd(5)	corporation	Class B Shares
Boyu Capital Group	Interest in controlled	464,619,113	5.86%	5.22%
Holdings Ltd(5)	corporation	Class B Shares
Boyu Group, LLC(5)	Interest in controlled	464,619,113	5.86%	5.22%
	corporation	Class B Shares
XYXY Holdings Ltd.(5)	Interest in controlled	464,619,113	5.86%	5.22%
	corporation	Class B Shares
Mr. Tong Xiaomeng(5)	Interest in controlled	464,619,113	5.86%	5.22%
	corporation	Class B Shares

Notes:

(1) All interests stated are long position.
(2) Topping Summit Limited, an entity wholly-owned by Mr. Jet Jie Li, an executive Director, owns 5% equity interest in Jumping Summit Limited; Exceeding Summit Holding Limited, which is held by Vistra Trust (Singapore) Pte. Limited as a trustee for a trust established by Mr. Jet Jie Li for the benefit of Mr. Jet Jie Li and his family members, owns the remaining 95% equity interest in Jumping Summit Limited. Accordingly, Mr. Jet Jie Li is deemed to be interested in the 971,390,048 Class A Shares and 7,943,362 Class B Shares held by Jumping Summit Limited under the SFO.
(3) This includes the 373,175,910 Class B Shares and 327,712,070 Class B Shares held by Team Spirit Group Limited and Starlight Hero Limited, respectively. Team Spirit Group Limited is wholly-owned by Sky Royal Trading Limited, which is wholly-owned by Guangdong OPlus Holdings Co., Ltd. Guangdong OPlus Holdings Co., Ltd is 64.52% held by the Labor Union Committee of Guangdong OPlus Holdings Co., Ltd, and the Labor Union Committee of Guangdong OPlus Holdings Co., Ltd is controlled by Mr. Chen Mingyong. Accordingly, Mr. Chen Mingyong is deemed to be interested in the 373,175,910 Class B Shares held by Team Spirit Group Limited under the SFO.

Ms. Liang Xiaojing does not hold any legal or beneficial interest in the share capital of Team Spirit Group Limited; however, solely pursuant to Part XV of the SFO, Ms. Liang Xiaojing is deemed to be interested in the 373,175,910 Class B Shares held by her spouse, Mr. Chen Mingyong, although she does not personally hold such shares as a direct shareholder.

Starlight Hero Limited is wholly-owned by Ms. Liang Xiaojing.

Mr. Chen Mingyong does not hold any legal or beneficial interest in the share capital of Starlight Hero Limited; however, solely pursuant to Part XV of the SFO, Mr. Chen Mingyong is deemed to be interested in the 327,712,070 Class B Shares held by his spouse, Ms. Liang Xiaojing, although he does not personally hold such shares as a direct shareholder.

– IV-4 –

APPENDIX IV

GENERAL INFORMATION

(4) This includes the 382,316,440 Class B Shares, 107,829,815 Class B Shares and 43,131,985 Class B Shares held by Huang River Investment Limited, Eternal Earn Holding Limited, and Parallel Cluster Investment Limited, respectively. Huang River Investment Limited is a wholly-owned subsidiary of Tencent Holdings Limited, a company listed on the Stock Exchange (HKEX: 700, “ Tencent ”). Eternal Earn Holding Limited is a wholly-owned subsidiary of TPP Fund II, L.P., whose general partner is TPP GP II, Ltd, which is ultimately indirectly controlled by Tencent through Nasturtium Investment Limited. Parallel Cluster Investment Limited is a wholly-owned subsidiary of Parallel Cluster Investment L.P., whose general partner is Parallel Cluster GP Limited, is a wholly-owned subsidiary of Tencent. Accordingly, Tencent is deemed to be interested in the total of 533,278,240 Class B Shares held by Huang River Investment Limited, Eternal Earn Holding Limited and Parallel Cluster Investment Limited under the SFO.
(5) This includes the 112,468,268 Class B Shares, 285,259,927 Class B Shares and 60,384,718 Class B Shares held by Joyous Tempinis Limited, Jaunty Global Limited, and Jallion Global Limited, respectively. This also includes the 6,506,200 class B shares held by Boyu Capital Opportunities Master Fund. Joyous Tempinis Limited, Jaunty Global Limited, and Jallion Global Limited are directly or indirectly controlled by Boyu Capital Fund IV, L.P., whose general partner is Boyu Capital General Partner IV, Ltd. Boyu Capital General Partner IV, Ltd is wholly-owned by Boyu Capital Group Holdings Ltd. All voting rights of Boyu Capital Opportunities Master Fund are held by Boyu Capital Investment Management Limited which is the wholly-owned subsidiary of Boyu Capital Group Holdings Ltd. Boyu Capital Group Holdings Ltd. is the wholly-owned by Boyu Group, LLC. Boyu Group, LLC is controlled by XYXY Holdings Ltd., which is wholly-owned by Mr. Tong Xiaomeng. Accordingly, Boyu Capital Fund IV, L.P., Boyu Capital General Partner IV, Ltd are deemed to be interested in the total of 458,112,913 Class B Shares held by Jaunty Global Limited, Joyous Tempinis Limited and Jallion Global Limited under the SFO. Boyu Capital Group Holdings Ltd, Boyu Group, LLC, XYXY Holdings Ltd. and Mr. Tong Xiaomeng are deemed to be interested in the total of 464,619,113 Class B Shares held by Jaunty Global Limited, Joyous Tempinis Limited, Jallion Global Limited and Boyu Capital Opportunities Master Fund under the SFO.

Save as disclosed above, as of the Latest Practicable Date, to the knowledge of our Directors, none of any other persons (other than Directors or chief executive of the Company) have interests or short positions in the Shares or underlying shares of the Company, which were required to be disclosed in accordance with Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance, or which were required to be kept in the register under the requirements in Section 336 of the SFO or which were required to be notified to the Company and the Stock Exchange.

– IV-5 –

APPENDIX IV

GENERAL INFORMATION

III. DIRECTORS’ INTERESTS

(a) Interest in service contracts

As at the Latest Practicable Date, none of the Directors had entered, or was proposing to enter, into any service contract with any member of the Group (excluding contracts expiring or determinable by such member of the Group within one year without payment of compensation (other than statutory compensation)).

(b) Interest in competing business

As at the Latest Practicable Date, none of the Directors or their respective close associate is or was interested in any business apart from the Group’s business, that competes or is likely to compete, either directly or indirectly, with the Group’s business.

(c) Interest in assets

As at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which had been, since December 31, 2024, the date of which the latest published audited consolidated financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

(d) Interest in contract or arrangement

As at the Latest Practicable Date, there is no contract or arrangement subsisting in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

IV. LITIGATION

As at the Latest Practicable Date, no member of the Group was or is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was or is known to the Directors to be pending or threatened by or against any members of the Group.

V. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial position or trading position of the Group since December 31, 2024, the date to which the latest published audited financial statements of the Company were made up.

– IV-6 –

APPENDIX IV

GENERAL INFORMATION

VI. MATERIAL CONTRACTS

Save for the Share Subscription Agreement, the Group has not entered into any contract (not being a contract entered into in the ordinary course of business) within the two years preceding the Latest Practicable Date and is or may be material.

VII. EXPERTS AND CONSENTS

The following are the qualification of the experts who have been named in this circular or have been given opinion or letter, which is contained in this circular:

Name Qualifications

PricewaterhouseCoopers Certified Public Accountants under Professional Accountants Ordinance (Cap. 50 of the Laws of Hong Kong) and Registered Public Interest Entity Auditor under Financial Reporting Council Ordinance (Cap. 588 of the Laws of Hong Kong)

As at the Latest Practicable Date, PricewaterhouseCoopers had given and had not withdrawn its written consent to the issue of this circular with the inclusion of their letters or opinions or reports or references to its names in the form and context in which it appears.

As at the Latest Practicable Date, PricewaterhouseCoopers did not have shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, nor did it have any direct or indirect interests in any assets which had been, since December 31, 2024 (the date to which the latest published audited consolidated financial statements of the Group were made up), acquired or disposed of by or leased to any member of the Group, or was proposed to be acquired or disposed of by or leased to any member of the Group.

VIII. DOCUMENTS ON DISPLAY

Copies of the below documents will be available on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.jtexpress.com) from the date of this circular for 14 days thereafter:

(a) the Share Subscription Agreement;
(b) the report on the unaudited pro forma financial information of the Group as set out in Appendix III to this circular;

– IV-7 –

APPENDIX IV

GENERAL INFORMATION

(c) the written consent of PricewaterhouseCoopers, the auditor of the Company, referred to in the section headed “Experts and Consents” in this appendix; and
(d) this circular.

IX. GENERAL

(a) The address of the registered office of the Company in the Cayman Islands is Harneys Fiduciary (Cayman) Limited, 4th floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1-1002, Cayman Islands.
(b) The address of the principal place of business in Hong Kong of the Company is 40/F, Dah Sing Financial Centre, 248 Queen’s Road East, Wanchai, Hong Kong.
(c) The Company’s Hong Kong branch share registrar is Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong.
(d) The joint company secretaries are Ms. Quanxi Shang and Mr. Ching Kit Cheng ( associate member of both The Hong Kong Chartered Governance Institute and The Chartered Governance Institute in the United Kingdom ).

– IV-8 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Details of the Proposed Amendments are as follows:

	Currently in force	Proposed to be amended as	Proposed to be amended as	Proposed to be amended as
Article		Article
No.	Articles of Association	No. Articles of Association
1(b)	–	1(b) *Board Diversity Policy*meanstheboard
		diversity policy of the Companyasmaybe
		adopted,amended, supplementedor restated
		bytheBoard from timetotime;
	*Company*means the above named company;	*Company*means the above named company,
		i.e.	J&TGlobal ExpressLimited 極兔速遞環球
		有限公司;

	*Corporate Governance Committee*means the	*Corporate Governance Committee*means the
	corporate governance committee of the Board	corporate governance committee of the Board
	established in accordance with Article 164;	established in accordance with Article~~164~~165;

	–	*Hybrid Meeting*meansageneral meetingthat
		allows physical and virtual attendance,
		participation,		communication and votingby
		the	Shareholders;

	*Nomination Committee*means the	*Nomination Committee*means the
	nomination committee of the Board	nomination committee of the Board
	established in accordance with Article 158;	established in accordance with Article~~158~~159;

	*Shareholder*means the person who is duly	*Shareholderor member*means the person who
	registered in the Register as holder for the	is duly registered in the Register as holder for
	time being of any Share and includes persons	the	time being of any Share and includes
	who are jointly so registered;	persons who are jointly so registered;
	*Transfer Office*means the place where the	*Transfer Office*means the place where the
	principal register of Shareholders is located	principal register of Shareholders is located
	for the time being; and	for the time being;~~and~~
	*US$*means United States dollars, the lawful	*US$*means United States dollars, the lawful
	currency for the time being of the United	currency for the time being of the United
	States of America.	States of America~~.~~;and
1(b)	–	1(b) *Workforce Diversity Policy*meansthe
		workforcediversity policy of the Companyas
		maybeadopted,amended, supplementedor
		restated bytheBoard from timetotime.

– V-1 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

		Currently in force		Proposed to be amended as
Article			Article
No.	Articles of Association		No.	Articles of Association
1(d)	At all times during the Relevant Period a		1(d)	At all times during the Relevant Period a
	resolution shall be a Special Resolution when			resolution shall be a Special Resolution when
	it	has been passed by a majority of not less		it has been passed by a majority of not less
	than three-fourths of the voting rights held by			than three-fourths of the voting rights held by
	such Shareholders as, being entitled so to do,			such Shareholders as, being entitled so to do,
	vote in person or by proxy or,(whether physically or by virtual attendance with the			vote in person~~or by proxy or,~~(whether physically or byvirtual attendancewith the
	use of technology), or by proxy, or in the case			use of technology), or by proxy,or in the case
	of	any Shareholder being a corporation, by its		of any Shareholder being a corporation, by its
	duly authorised representatives at a general			duly authorised representatives at a general
	meeting of which notice specifying the			meeting of which notice specifying the
	intention to propose the resolution as a			intention to propose the resolution as a
	special resolution has been duly given.			special resolution has been duly given.
1(e)	A	resolution shall be an Ordinary Resolution	1(e)	A resolution shall be an Ordinary Resolution
	when it has been passed by a simple majority			when it has been passed by a simple majority
	of	such Shareholders as, being entitled so to		of thevotingrightsheld bysuch Shareholders
	do, vote in person or by proxy or, in the case			as, being entitled so to do, vote in person
	of	any Shareholder being a corporation, by its		(whetherphysically or byvirtual attendance
	duly authorised representative at a general			with theuse of technology)or by proxy or, in
	meeting held in accordance with these			the case of any Shareholder being a
	Articles and of which not less than 14 days’			corporation, by its duly authorised
	notice has been duly given.			representative at a general meeting held in
				accordance with these Articles and of which
				not less than 14 days’ notice has been duly
				given.

– V-2 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force	Currently in force		Proposed to	be amended as	be amended as
Article			Article
No.	Articles of Association		No.	Articles of Association
16(a)	If at any time the share capital of the		16(a)	If at any time the share capital of the
	Company is divided into different classes of			Company is divided into		different classes of
	Shares, all or any of the special rights			Shares, all or any of the special rights
	attached to any class (unless otherwise			attached to any class (unless otherwise
	provided for by the terms of issue of the			provided for by the terms of issue of the
	Shares of that class) may, subject to the			Shares of that class) may,		subject to the
	provisions of the Companies Act, be varied or			provisions of the Companies Act, be varied or
	abrogated with the consent in writing of the			abrogated with	the consent in writing of the
	holders of at least	three-fourths of the issued		holders of at least three-fourths of the issued
	Shares of that class, or with the approval of a			Shares of that class, or with the approval of a
	resolution passed	by at least three-fourths of		resolution passed by at least three-fourths of
	the votes cast by the holders of the Shares of			the votes cast by the holders of the Shares of
	that class present and voting in person or by			that class present and voting in person
	proxy at a separate meeting of such holders.			(whetherphysically or byvirtual attendance
	For so long as any	Class A Share is in issue		with theuse of	technology)or by proxy at a
	and unless such change is otherwise required			separate meeting of such		holders. For so long
	by law or the Listing Rules, (a) any change to			as any Class A Share is in issue and unless
	the composition of the Board set out in Article			such change is	otherwise	required by law or
	107; (b) any change in the proportion of votes			the Listing Rules, (a) any		change to the
	required to pass a	resolution of the		composition of	the Board set out in Article
	Shareholders, whether as an Ordinary			107; (b) any change in the proportion of votes
	Resolution or a Special Resolution or in			required to pass a resolution of the
	respect of particular matters or generally; (c)			Shareholders, whether as an Ordinary
	any variation to the number of votes attached			Resolution or a Special Resolution or in
	to a share of any class, except any such			respect of particular matters or generally; (c)
	variation arising from an automatic			any variation to the number of votes attached
	conversion of a Class A Share into a Class B			to a share of any class, except any such
	Share pursuant to	Article 9; and (d) any		variation arising from an		automatic
	change to this Article, to the matters in			conversion of a Class A Share into a Class B
	respect of which each Class A Share and each			Share pursuant to Article 9; and (d) any
	Class B Share shall entitle its holder to one			change to this Article, to		the matters in
	vote on a poll at a	general meeting in Article		respect of which each Class A Share and each
	12 or to the quorum requirements for			Class B Share shall entitle its holder to one
	meetings of Directors in Article 147, shall			vote on a poll at a general meeting in Article
	require the consent in writing of the holders			12 or to the quorum requirements for
	of not less than three-fourths in nominal value of the issued Class A Shares. To every such			meetings of Directors in Article~~147~~148, shall require the consent in writing of the holders
	separate general meeting the provisions of			of not less than three-fourths in nominal value
	these Articles relating to general meetings			of the issued Class A Shares. To every such
	shall apply mutatis mutandis, provided that:			separate general meeting		the provisions of
				these Articles relating to general meetings
				shall apply mutatis mutandis, provided that:

– V-3 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force		Proposed to be amended as
Article		Article
No.	Articles of Association	No.	Articles of Association
16(a)(ii)	any holder of Shares of the class present in	16.(a)(ii)	any holder of Shares of the class present in
	person (or in the case of the Shareholder		person(whetherphysically or byvirtual
	being a corporation, by its duly authorised		attendancewith theuse of technology), or in
	representative) or by proxy may demand a		the case of the Shareholder being a
	poll		corporation, by its duly authorised
			representative or by proxy may demand a
			poll.
23(c)	sub-divide its existing Shares or any of them	23(c)	sub-divide its existing Shares or any of them
	into Shares of smaller amount than is fixed by		into Shares of smaller amount than is fixed by
	the Memorandum of Association or into		the Memorandum of Association or into
	Shares without par value, subject nevertheless		Shares without par value, subject nevertheless
	to the provisions of the Companies Act;		to the provisions of the Companies Act;
			and/or
23(d)	cancel any Shares which as at the date of the	23(d)	cancel any Shares which as at the date of the
	passing of the resolution have not been taken		passing of the resolution have not been taken
	or agreed to be taken by any person, and		or agreed to be taken by any person, and
	diminish the amount of its share capital by		diminish the amount of its share capital by
	the amount of the Shares so cancelled;		the amount of the Shares so cancelled~~;~~.
23(e)	make provision for the allotment and issue of	~~23(e)~~	~~make provision for the allotment and issue of~~
	Shares which do not carry any voting rights;		~~Shares which do not carry any voting rights;~~
23(f)	change the currency of denomination of its	~~23(f)~~	~~change the currency of denomination of its~~
	share capital; and/or		~~share capital; and/or~~
23(g)	reduce its share premium account in any	~~23(g)~~	~~reduce its share premium account in any~~
	manner authorised, and subject to any		~~manner authorised, and subject to any~~
	conditions prescribed by law.		~~conditions prescribed by law.~~

– V-4 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force	Proposed to be amended a
	Article No. Articles of Association Article No.	Articles of Association
	25(a) Subject to the Companies Act, or any other law or so far as not prohibited by any law and subject to any rights conferred on the holders of any class of Shares, the Company shall have the power to purchase or otherwise acquire all or any of its own Shares (which expression as used in this Article includes redeemable Shares), provided that the manner and terms of purchase have first been authorised by an Ordinary Resolution, and to purchase or otherwise acquire warrants and other securities for the subscription or purchase of its own Shares, and shares and warrants and other securities for the subscription or purchase of any shares in any company which is its Holding Company and may make payment therefor in any manner and terms authorised or not prohibited by law, including out of capital, or to give, directly or indirectly, by means of a loan, a guarantee, an indemnity, the provision of security or otherwise howsoever, financial assistance for the purpose of or in connection with a purchase or other acquisition made or to be made by any person of any Shares or warrants or other securities in the Company or any company which is a Holding Company of the Company. If the Company purchases or otherwise acquires its own Shares or warrants or other securities, neither the Company nor the Board shall be required to select the Shares or warrants or other securities to be purchased or otherwise acquired rateably or in any other manner and terms as between the holders of Shares or warrants or other securities of the same class or as between them and the holders of Shares or warrants or other securities of any other class or in accordance with the rights as to Dividends or capital conferred by any class of Shares, provided always that any such purchase or other acquisition or financial assistance shall only be made in accordance with the relevant code, rules or regulations issued from time to time by the HK Stock Exchange and/or the Securities and Futures Commission of Hong Kong from time to time in force. 25(a)

– V-5 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force		Proposed to be amended as	Proposed to be amended as	Proposed to be amended as
Article			Article
No.	Articles of Association		No. Articles of Association
25(b)	Subject to the provisions of the Companies		25(b) Subject to the provisions of the Companies
	Act and the Memorandum of Association of		Act and the Memorandum of Association of
	the Company, and to any special rights		the Company, and to any special rights
	conferred on the holders of any Shares or		conferred on the holders of any Shares or
	attaching to any class of Shares, Shares may		attaching to any class of Shares, and where
	be issued on the terms that they may, at the		applicable, other applicablelawsand
	option of the Company or the holders thereof,		regulations,rules of theHKStock Exchange
	be liable to be redeemed on such terms and in		and/orothercompetent regulatoryauthority,
	such manner, including out of capital, as the		Shares may be		issued on the terms that they
	Board may deem fit.		may,	at the option of the Company or the
			holders thereof, be liable to be redeemed on
			such	terms and in such manner, including out
			of capital, as the Board may deem fit.
72	At all times during the Relevant Period, the		72 At all times during the Relevant Period, the
	Company shall in each financial year hold a		Company shall in each financial year hold a
	general meeting as its annual general meeting		general meeting as its annual general meeting
	in addition to any other meeting in that year		in addition to any other meeting in that year
	and shall specify the meeting as such in the		and shall specify the meeting as such in the
	notice calling it, and such annual general		notice calling it, and such annual general
	meeting shall be held within	six months after	meeting shall be held within six months after
	the end of the Company’s financial year. The		the end of the Company’s financial year. The
	annual general meeting shall be held in the		annual general meeting shall be held in the
	Relevant Territory or elsewhere as may be		Relevant Territory or elsewhere as may be
	determined by the Board and at such time and		determined by		the Board and at such time and
	place as the Board shall appoint. A meeting of		place as the Board shall appoint. A meeting of
	the Shareholders or any class thereof may be		the Shareholders or any class thereof may be
	held by means of such telephone, electronic or other communication facilities as permit all		~~held~~conducted asa Hybrid Meeting or by means of~~such~~telephone, electronic or other
	persons participating in the meeting to communicate with each other simultaneously		communication facilities~~as permit~~thatenable all persons participating in the meeting to
	and instantaneously, and participation in such		communicate with each other simultaneously
	a meeting shall constitute presence at such		and instantaneously, aswell astovote
	meetings.		electronically,and participation in such a
			meeting shall constitute presence at such
			meetings.

– V-6 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force	Currently in force		Proposed to be amended as	Proposed to be amended as	Proposed to be amended as
Article			Article
No.	Articles of Association		No.	Articles of	Association
75	An annual general meeting of the Company		75	An annual	general meeting of the Company
	shall be called by at least 21 days’ notice in			shall be called by at least 21 days’ notice in
	writing, and a general	meeting of the		writing, and a general meeting of the
	Company, other than an annual general			Company, other than an annual general
	meeting, shall be called by at least 14 days’			meeting, shall be called by at least 14 days’
	notice in writing. The notice shall be exclusive			notice in writing. The notice shall be exclusive
	of the day on which it	is served or deemed to		of the day on which it is served or deemed to
	be served and of the day for which it is given,			be served and of the		day for which it is given,
	and shall specify the place, the day, the hour			and shall specify the		place, the day, the hour
	and the agenda of the meeting and particulars			and the agenda of the meeting and particulars
	of the resolutions to be considered at that			of the resolutions to be considered at that
	meeting, and in case of special business (as			meeting, thedetailsfor memberstoattend the
	defined in Article 77),	the general nature of		meetingvirtuallywith theuse of technology
	that business, and shall be given, in manner			(if applicable)and in		case of special business
	hereinafter mentioned	or in such other		(as defined in Article 77), the general nature
	manner, if any, as may	be prescribed by the		of that business, and		shall be given, in manner
	Company in general meeting, to such persons			hereinafter mentioned or in such other
	as are, under these Articles, entitled to receive			manner, if any, as may be prescribed by the
	such notices from the Company, provided that			Company in general		meeting, to such persons
	a meeting of the Company shall			as are, under these Articles, entitled to receive
	notwithstanding that it is called by shorter			such notices from the Company, provided that
	notice than that specified in this Article, if			a meeting of the Company shall
	permitted by the Listing Rules, be deemed to			notwithstanding that it is called by shorter
	have been duly called	if it is so agreed		notice than that specified in this Article, if
				permitted by the Listing Rules, be deemed to
				have been duly called if it is so agreed
78	For all purposes the quorum for a general		78	For all purposes the quorum for a general
	meeting shall be two Shareholders present in person (or, in the case of a Shareholder being			meeting shall be two Shareholders present in person (whetherphysicallyor~~,~~byvirtual
	a corporation, by its duly authorised			attendance	with theuse of technology), or in
	representative), or by proxy and entitled to			the case of	a Shareholder being a corporation,
	vote. No business shall be transacted at any			by its duly	authorised representative~~),~~or by
	general meeting unless the requisite quorum			proxy and entitled to vote. No business shall
	shall be present at the	time when the meeting		be transacted at any general meeting unless
	proceeds to business and continues to be			the requisite quorum shall be present at the
	present until the conclusion of the meeting.			time when	the meeting proceeds to business
				and continues to be present until the
				conclusion	of the meeting.

– V-7 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently	in force			Proposed to be amended as
Article				Article
No. Articles of Association				No. Articles of Association
79 If	within 15 minutes from the time appointed			79 If	within 15 minutes from the time appointed
for the meeting a		quorum is not present, the		for the meeting a quorum is not		present, the
meeting, if convened upon the requisition of				meeting, if convened upon the requisition of
Shareholders, shall be dissolved, but in any				Shareholders, shall be dissolved, but in any
other case it shall		stand adjourned to the same		other case it shall stand adjourned to the same
day in the next week and at such time and				day in the next week and at such time and
place as shall be decided by the			Board, and if	place as shall be decided by the		Board, and if
at	such adjourned meeting a quorum is not			at such adjourned meeting a quorum is not
present within 15		minutes from	the time	present within 15 minutes from		the time
appointed for holding the meeting, the				appointed for holding the meeting, the
Shareholder or the Shareholders present in person (or, in the case of a Shareholder being				Shareholder or the Shareholders present in person (whetherphysicallyor~~,~~byvirtual
a corporation by its duly authorised				attendancewith theuse of technology), or in
representative) or by proxy and entitled to				the case of a Shareholder being a corporation
vote shall be a quorum and may transact the				by its duly authorised representative~~),~~or			by
business for which the meeting			was called.	proxy and entitled to vote shall		be a quorum
				and may transact the business for which the
				meeting was called.

– V-8 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force	Currently in force		Proposed to be amended as	Proposed to be amended as	Proposed to be amended as
Article			Article
No.	Articles of Association		No.	Articles of Association
81	The chairman of the meeting may, with the		81	The chairman of the meeting may, with the
	consent of any general meeting at which a			consent of any general meeting at which a
	quorum is present, and shall, if so directed by			quorum is present, and shall, if so directed by
	the meeting, adjourn any meeting from time			the meeting, adjourn any meeting from time
	to time and from	place to place as the meeting		to time and from place to place as the meeting
	shall determine. Whenever a meeting is			shall determine. Whenever a meeting is
	adjourned for 14	days or more, at least seven		adjourned for 14 days or more, at least seven
	clear days’ notice, specifying the place, the			clear days’ notice, specifying the place, the
	day and the hour of the adjourned meeting shall be given in the same manner as in the			day~~and the hour,~~thehour and thedetailsfor memberstoattend theadjourned meeting
	case of an original meeting but it shall not be			virtuallywith theuse of technology (if
	necessary to specify in such notice the nature			applicable)of the adjourned meeting shall be
	of the business to be transacted at the			given in the same manner		as in the case of an
	adjourned meeting. Save as aforesaid, no			original meeting but it shall not be necessary
	notice of an adjournment or of the business to			to specify in such notice the nature of the
	be transacted at any adjourned meeting needs			business to be transacted at the adjourned
	to be given nor shall any Shareholder be			meeting. Save as aforesaid, no notice of an
	entitled to any such notice. No business shall			adjournment or	of the business to be
	be transacted at an adjourned meeting other			transacted at any adjourned meeting needs to
	than the business which might have been			be given nor shall any Shareholder be entitled
	transacted at the	meeting from which the		to any such notice. No business shall be
	adjournment took place.			transacted at an	adjourned meeting other than
				the business which might		have been
				transacted at the meeting from which the
				adjournment took place.
82(a)	at least two Shareholders present in person (or, in the case of a Shareholder being a		82(a)	at least two Shareholders present in person (whetherphysicallyor~~,~~byvirtual attendance
	corporation, by its duly authorised			with theuse of technology), or in the case of a
	representative) or by proxy for the time being			Shareholder being a corporation, by its duly
	entitled to vote at the meeting;			authorised representative~~)~~,or by proxy for the time being entitled to vote at the meeting;
82(b)	any Shareholder or Shareholders present in person (or, in the case of a Shareholder being		82(b)	any Shareholder or Shareholders present in person (whetherphysicallyor~~,~~byvirtual
	a corporation, by	its duly authorised		attendancewith	theuse of technology), or in
	representative) or by proxy and representing			the case of a Shareholder being a corporation,
	not less than one-tenth of the total voting rights of all the Shareholders having the right			by its duly authorised representative~~)~~,or by proxy and representing not less than
	to vote at the meeting; or			one-tenth of the	total voting rights of all the
				Shareholders having the right to vote at the
				meeting; or

– V-9 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force		Proposed to be amended as	Proposed to be amended as	Proposed to be amended as
Article			Article
No.	Articles of Association		No. Articles of Association
82(c)	any Shareholder or Shareholders present in person (or, in the case of a Shareholder being		82(c) any Shareholder or Shareholders present in person (whetherphysicallyor~~,~~byvirtual
	a corporation, by its duly authorised		attendancewith theuse of technology, or in
	representative) or by proxy and holding		the	case of a Shareholder being a corporation,
	Shares conferring a right to vote at the meeting being Shares on which an aggregate		by its duly authorised representative~~)~~,or by proxy and holding Shares conferring a right to
	sum has been paid up equal to not less than		vote at the meeting being Shares on which an
	one-tenth of the total sum paid up on all the		aggregate sum has been paid up equal to not
	Shares conferring that right.		less than one-tenth of the total sum paid up
			on all the Shares conferring that right.
83	Where a resolution is voted on by a show of		83 Where a resolution is voted on by a show of
	hands as permitted under the	Listing Rules, a	hands(whetherphysically or byvirtual
	declaration by the chairman of the meeting		attendancewith theuse of technology)as
	that a resolution has on a show of hands been		permitted under the Listing Rules, a
	carried or carried unanimously, or by a		declaration by the chairman of the meeting
	particular majority, or not carried by a		that a resolution has on a show of hands been
	particular majority, or lost, and an entry to		carried or carried unanimously, or by a
	that effect made in the minute book of the		particular majority, or not carried by a
	Company shall be conclusive	evidence of the	particular majority, or lost, and an entry to
	facts without proof of the number or		that effect made in the minute book of the
	proportion of the votes recorded in favour of		Company shall be conclusive evidence of the
	or against such resolution.		facts without		proof of the number or
			proportion of		the votes recorded in favour of
			or against such resolution.
86	In the case of an equality of votes, whether on		86 In the case of		an equality of votes, whether on
	a show of hands or on a poll, the chairman of the meeting shall be entitled to a second or		a show of hands or on a poll~~,~~(whether physically or byvirtual attendancewith the
	casting vote. In case of any dispute as to the		use	of technology),the chairman of the
	admission or rejection of any vote, the		meeting shall		be entitled to a second or
	chairman of the meeting shall	determine the	casting vote. In case of any dispute as to the
	same, and such determination shall be final		admission or		rejection of any vote, the
	and conclusive.		chairman of the meeting shall determine the
			same, and such determination shall be final
			and conclusive.

– V-10 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force			Proposed to be amended as	Proposed to be amended as
Article			Article
No.	Articles of Association		No.	Articles of Association
89	Subject to Articles 4 and 12 and any special		89	Subject to Articles 4 and 12 and any special
	rights, privileges or restrictions as to voting			rights, privileges or restrictions as to voting
	for the time being attached to any	class or		for the time being attached to any class or
	classes of Shares, at any general meeting on a			classes of	Shares, at any general meeting on a
	poll every Shareholder present in in the case of a Shareholder being	person (or, a		poll every Shareholder present in person (whetherphysicallyor~~,~~byvirtual attendance
	corporation, by its duly authorised			with theuse of technology), or in the case of a
	representative), or by proxy, shall	have one		Shareholder being a corporation, by its duly
	vote for every Share of which he is the holder which is fully paid or credited as fully paid			authorised representative~~)~~),or by proxy, shall have one vote for every Share of which he is
	(provided that no amount paid or	credited as		the holder which is fully paid or credited as
	paid on a Share in advance of calls or			fully paid (provided that no amount paid or
	instalments shall be treated for the purposes			credited as paid on a Share in advance of calls
	of this Article as paid on the Share), and on a			or instalments shall be treated for the
	show of hands every Shareholder	who is		purposes	of this Article as paid on the Share),
	present in person (or, in the case of a			and on a show of hands every Shareholder
	Shareholder being a corporation, by its duly			who is present in person (whetherphysically
	authorised representative), or by proxy shall (save as provided otherwise in this Article)			or~~,~~byvirtual attendancewith theuse of technology), or in the case of a Shareholder
	have one vote. On a poll a Shareholder			being a corporation, by its duly authorised
	entitled to more than one vote need not use all his votes or cast all his votes in the same			representative~~)~~),or by proxy shall (save as provided otherwise in this Article) have one
	way. Notwithstanding anything contained in			vote. On a poll a Shareholder entitled to more
	these Articles, where more than one proxy is			than one vote need not use all his votes or
	appointed by a Shareholder which is a			cast all his votes in the same way.
	Clearing House (or its nominee(s)), each such			Notwithstanding anything contained in these
	proxy shall have one vote on a show of hands			Articles, where more than one proxy is
	and on a poll, each such proxy is under no			appointed by a Shareholder which is a
	obligation to cast all his votes in the same			Clearing House (or its nominee(s)), each such
	way.			proxy shall have one vote on a show of hands
				and on a poll, each such proxy is under no
				obligation to cast all his votes in the same
				way.

– V-11 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force	Currently in force			Proposed to be amended as
Article				Article
No.	Articles of Association			No.	Articles of Association
90	All Shareholders of the Company (including a			90	All Shareholders of the Company (including a
	Shareholder which is a Clearing House (or its				Shareholder which is a Clearing House (or its
	nominee(s))) shall have the right to (a) speak				nominee(s))) shall have the right to (a) speak
	at a general meeting and (b) vote at a general				at a general meeting and (b) vote at a general
	meeting except where a Shareholder is				meeting(whetherphysically or byvirtual
	required by the Listing Rules to abstain		from		attendancewith theuse of technology),except
	voting to	approve the matter under			where a Shareholder is required by the Listing
	consideration. Where any Shareholder is,				Rules to abstain from voting to approve	the
	under the Listing Rules, required to abstain				matter under consideration. Where any
	from voting on any particular resolution or				Shareholder is, under the Listing Rules,
	restricted to voting only for or only against				required to abstain from voting on any
	any particular resolution, any votes cast by or				particular resolution or restricted to voting
	on behalf	of such Shareholder in			only for or only against any particular
	contravention of such requirement or				resolution, any votes cast by or on behalf of
	restriction shall not be counted. No powers				such Shareholder in contravention of such
	shall be taken to freeze or otherwise impair				requirement or restriction shall not be
	any of the rights attaching to any share by				counted. No powers shall be taken to freeze
	reason only that the person or persons who				or otherwise impair any of the rights
	are interested directly or indirectly therein				attaching to any share by reason only that the
	have failed to disclose their interests to the				person or persons who are interested directly
	Company.				or indirectly therein have failed to disclose
					their interests to the Company.

– V-12 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force			Proposed to be amended as	Proposed to be amended as
Article			Article
No.	Articles of Association		No.	Articles of Association
99	The instrument appointing a proxy and,	if	99	The instrument appointing a proxy and, if
	requested by the Board, the power of attorney			requested by the Board, the power of attorney
	or other authority (if any) under which it is			or other authority (if any) under which it is
	signed or a notarially certified copy of that			signed or a notarially certified copy of that
	power or authority shall be deposited at such			power or authority shall be deposited at such
	place or one of such places (if any) as is			place or one of such places (if any) as is
	specified in the notice of meeting or in the			specified in the notice of meeting or in the
	instrument of proxy issued by the Company			instrument of proxy issued by the Company
	(or, if no place is specified, at the Registration			(or, if no place is specified, at the Registration
	Office) not less than 48 hours before the	time		Office) not less than 48 hours before the time
	for holding the meeting or adjourned meeting			for	holding the meeting or adjourned meeting
	(as the case may be) at which the person			(as	the case may be) at which the person
	named in such instrument proposes to vote,			named in such instrument proposes to vote,
	and in default the instrument of proxy shall			and in default the instrument of proxy shall
	not be treated as valid. No instrument			not be treated as valid. No instrument
	appointing a proxy shall be valid after the			appointing a proxy shall be valid after the
	expiration of 12 Months from the date of its			expiration of 12 Months from the date of its
	execution, except at an adjourned meeting			execution, except at an adjourned meeting
	where the meeting was originally held within			where the meeting was originally held within
	12 Months from such date. Delivery of an			12 Months from such date. Delivery of an
	instrument appointing a proxy shall not			instrument appointing a proxy shall not
	preclude a Shareholder from attending and			preclude a Shareholder from attending and
	voting in person (or in the case of a			voting in person (whetherphysically or by
	Shareholder being a corporation, its duly			virtual attendancewith theuse of
	authorised representative), at the meeting			technology),or in the case of a Shareholder
	concerned and, in such event, the instrument			being a corporation, by its duly authorised
	appointing a proxy shall be deemed to be revoked.			representative~~)~~, or by proxyat the meeting concerned and, in such event, the instrument
				appointing a proxy shall be deemed to be
				revoked.

– V-13 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force			Proposed	to be amended as
Article			Article
No.	Articles of Association		No. Articles of Association
103(b)	Where a Shareholder is a Clearing House (or		103(b) Where a Shareholder is a Clearing House (or
	its nominee(s)), it may (subject to Article 104)		its	nominee(s)), it may (subject to Article 104)
	appoint proxies or authorise such person or		appoint proxies or authorise such person or
	persons as it thinks fit to act as its		persons as it		thinks fit to act as its
	representative or representatives, who enjoy		representative or representatives, who enjoy
	rights equivalent to the rights of other		rights equivalent to the rights of other
	Shareholders, at any meeting of the Company		Shareholders, at any meeting of the Company
	(including but not limited to general meetings		(including but not limited to general meetings
	and creditors meetings) or at any meeting of		and creditors meetings) or at any meeting of
	any class of Shareholders, provided that if		any class of Shareholders, provided that if
	more than one person is so authorised, the		more than one person is so authorised, the
	authorisation shall specify the	number and	authorisation shall specify the number and
	class of Shares in respect of which each such		class of Shares in respect of which each such
	representative is so authorised. A person so		representative is so authorised. A person so
	authorised pursuant to the provisions of this		authorised pursuant to the provisions of this
	Article shall be deemed to have been duly		Article shall		be deemed to have been duly
	authorised without further evidence of the		authorised without further evidence of the
	facts and be entitled to exercise the same		facts and be		entitled to exercise the same
	rights and powers on behalf of	the Clearing	rights and powers on behalf of the Clearing
	House (or its nominee(s)) which he represents		House (or its nominee(s)) which he represents
	as that Clearing House (or its nominee(s))		as	that Clearing House (or its nominee(s))
	could exercise as if such person were an		could exercise as if such person were an
	individual Shareholder, including the right to		individual Shareholder, including the right to
	speak and vote individually on a show of		speak and vote individually(whether
	hands or on a poll.		physically or byvirtual attendancewith the
			use of technology)on a show of hands or on a
			poll.
119(a)	Notwithstanding any other provisions in		119(a) ~~Notwithstanding any other provisions in~~
	these Articles, at each annual general meeting		~~these Articles, at each annual general meeting~~
	one-third of the Directors for the time being,		~~one-third of~~		~~the Directors for the time being,~~
	or, if their number is not three	or a multiple of	~~or,~~	~~if their number is not three or a multiple of~~
	three, then the number nearest	to but not less	~~three, then the number nearest to but not less~~
	than one-third, shall retire from office by		~~than one-third, shall retire from office by~~
	rotation, provided that every		~~rotation, provided that every~~

– V-14 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force		Proposed to be amended as
Article		Article
No.	Articles of Association	No.	Articles of Association
119(a)	Director (including those appointed for a	119(a)	EveryDirector (including those appointed for
	specific term and the Independent		a specific term and the Independent
	Non-executive Directors) shall be subject to		Non-executive Directors) shall be subject to
	retirement by rotation at least once every		retirement by rotation at least once every
	three years. A retiring Director shall be		three years. A retiring Director shall be
	eligible for re-election. The Company at the		eligible for re-election. The Company at the
	general meeting at which a Director retires		general meeting at which a Director retires
	may fill the vacated office.		may fill the vacated office
	–	129	An IndependentNon-executiveDirector must
			not hold directorshipsinother listed
			companiesinexcess of themaximum number
			permitted under theListingRules.
137	Every Director appointed to an office under	138	Every Director appointed to an office under
	Article 136 hereof shall, but without prejudice to any claim for damages for breach of any		Article~~136~~137 hereof shall, but without prejudice to any claim for damages for breach
	contract of service between himself and the		of any contract of service between himself and
	Company, be liable to be dismissed or		the Company, be liable to be dismissed or
	removed therefrom by the Board		removed therefrom by the Board
138	A Director appointed to an office under	139	A Director appointed to an office under
	Article 136 shall be subject to the same provisions as to resignation and removal as		Article~~136~~137 shall be subject to the same provisions as to resignation and removal as
	the other Directors of the Company, and he		the other Directors of the Company, and he
	shall ipso facto and immediately cease to hold		shall ipso facto and immediately cease to hold
	such office if he shall cease to hold the office		such office if he shall cease to hold the office
	of Director for any cause		of Director for any cause

– V-15 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force			Proposed to be amended as
Article			Article
No.	Articles of Association		No. Articles of Association
146	The Board may from time to time elect or		147 The Board may from time to time elect or
	otherwise appoint one of the Directors to the		otherwise appoint one of the Directors to the
	office of chairman of the Company and		office of chairman of the Company and
	another to be the vice chairman	of the	another to be the vice chairman of the
	Company (or two or more vice Chairmen) and		Company (or two or more vice Chairmen) and
	determine the period for which	each of them	determine the period for which each of them
	is to hold office. The chairman of the		is to hold office. The chairman of the
	Company or, in his absence, the	vice chairman	Company or, in his absence, the vice chairman
	of the Company shall preside as chairman at		of the Company shall preside as chairman at
	meetings of the Board, but if no	such	meetings of the Board, but if no such
	chairman or vice chairman be elected or		chairman or vice chairman be elected or
	appointed, or if at any meeting the chairman		appointed, or if at any meeting the chairman
	or vice chairman is not present within five		or vice chairman is not present within five
	minutes after the time appointed for holding		minutes after the time appointed for holding
	the same and willing to act, the	Directors	the same and willing to act, the Directors
	present shall choose one of their number to be		present shall choose one of their number to be
	chairman of such meeting. All the provisions		chairman of such meeting. All the provisions
	of Articles 114, 119, 137,138, and 139 shall		of Articles 114, 119,~~137~~138~~,138~~139, and~~139~~140
	apply mutatis mutandis to any Directors		shall apply	mutatis mutandis to any Directors
	elected or otherwise appointed to any office		elected or otherwise appointed to any office
	in accordance with the provisions of this		in accordance with the provisions of this
	Article.		Article.
153	The meetings and proceedings of any such		154 The meetings and proceedings of any such
	committee consisting of two or more members		committee consisting of two or more members
	shall be governed by the provisions herein		shall be governed by the provisions herein
	contained for regulating the meetings and		contained for regulating the meetings and
	proceedings of the Board so far	as the same	proceedings of the Board so far as the same
	are applicable thereto and are not replaced by		are applicable thereto and are not replaced by
	any regulations imposed by the	Board	any regulations imposed by the Board
	pursuant to Article 151.		pursuant to Article~~1511~~52.
157(a)(ii)	the names of the Directors present at each		158(a)(ii) the names of the Directors present at each
	meeting of the Board and of committees		meeting of the Board and of committees
	appointed pursuant to Article 151; and		appointed pursuant to Article~~1511~~52; and

– V-16 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

		Currently in force		Proposed to be amended as	Proposed to be amended as	Proposed to be amended as
Article			Article
No.	Articles of Association		No.	Articles of Association
158(a)	review the structure, size and composition		159(a)	review the structure, size and composition
	(including the skills, knowledge and			(including the skills, knowledge and
	experience) of the Board at least annually,			experience) of the Board at least annually,
	assist	the Board in maintaining a board skills		assist theBoard	in maintaininga boardskills
	matrix, and make recommendations on any			matrix,and make recommendations on any
	proposed changes to the Board to complement			proposed changes to the Board to complement
	the Company’s corporate strategy;			the Company’s corporate strategy;
	–		159(b)	developthe criteria for identifyingand
				assessingthe qualificationof andevaluating
				candidatesfor directorship;
	–		159(f)	review theimplementation andeffectiveness
				of theBoard DiversityPolicyand the
				measurable objectivesthat theBoard has
				adopted for implementingtherelevantpolicy,
				and monitor the progress on achievingthe
				objectives on annual basis		todevelopapolicy
				concerningdiversity of Board members,and
				disclosethe policy or asummary of the policy
				in the corporate	governancereport
			159(g)	review theimplementation andeffectiveness
				of theWorkforceDiversityPolicyregularly,
				and monitor the progress on achievingthe
				measurable objectives (whereapplicable)
				adopted forsenior management and the
				workforce (excluding senior management) on
				annual basis;

			159(h)	support the Company’sregularevaluationof
				theBoard’s performance;and
			159(i)	review and assess each Director’sindividual
				commitment andcontribution totheBoard as
				well astheDirector’sabilitytodischargehis
				or her responsibilities effectively.
159	The Nomination Committee shall comprise a		160	The Nomination Committee shall comprise at
	majority of Independent Non-executive			leastonedirectorof a differentgender and a
	Directors, and the chairman of the			majority of Independent Non-executive
	Nomination Committee shall be an			Directors, and the chairman of the
	Independent Non-executive Director			Nomination Committee shall be an
				Independent Non-executive Director

– V-17 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force		Proposed to be amended as
Article		Article
No.	Articles of Association	No. Articles of Association
162	Where the Board proposes a resolution to	163 Where the	Board proposes a resolution to
	elect an individual as an Independent	elect an individual as an Independent
	Non-executive Director at a general meeting,	Non-executive Director at a general meeting,
	the circular to the members and/or	the circular to the members and/or
	explanatory statement accompanying the	explanatory statement accompanying the
	notice of the relevant general meeting shall	notice of the relevant general meeting shall
	set out (i) the process used for identifying the	set out (i) the process used for identifying the
	individual, the reasons why the Directors	individual, the reasons why the Directors
	believe such individual should be elected and	believe such individual should be elected and
	the reasons why the Directors consider such	the reasons why the Directors consider such
	individual to be independent; (ii) if the	individual	to be independent; (ii)~~if the~~
	proposed Independent Non-executive	~~proposed Independent Non-executive~~
	Directors will be holding their seventh (or	~~Directors will be holding their seventh (or~~
	more) listed company directorship, the	~~more) listed company directorship, the~~
	reasons why the Board believes the individual	~~reasons why the Board believes the individual~~
	would still be able to devote sufficient time to	~~would still be able to devote sufficient time to~~
	the Board; (iii) the perspectives, skills and	~~the Board;~~	~~(iii)~~the perspectives, skills and
	experience that the individual can bring to the	experience that the individual can bring to the
	Board; and (iv) how the individual	Board; and (~~iv~~iii) how the individual
	contributes to diversity of the Board.	contributes to diversity of the Board.
164(l)	seek to ensure effective and on-going	165(l) seek to ensure effective and on-going
	communication between the Company and its	communication between the Company and its
	members, particularly with regards to the	members, particularly with regards to the
	requirements of Article 213;	requirements of Article~~213~~214;
164(m)	report on the work of the Corporate	165(m) (m) report	on the work of the Corporate
	Governance Committee on at least a	Governance Committee on at least a
	half-yearly and annual basis covering all	half-yearly and annual basis covering all
	areas of this Article 164; and	areas of this Article~~164~~165; and
164(n)	disclose, on a comply or explain basis, its	165(n) disclose, on a comply or explain basis, its
	recommendations to the Board in respect of	recommendations to the Board in respect of
	matters in Articles 164(i) to 164(k) in the	matters in	Articles~~164~~165(i) to~~164~~165(k) in
	report referred to in Article 164(m).	the report	referred to in Article~~164~~165(m).

– V-18 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force	Currently in force			Proposed to be amended as
Article				Article
No.	Articles of Association			No.	Articles of Association
166	The Corporate Governance Report produced			167	The Corporate Governance Report produced
	by the Company pursuant to the Listing Rules				by the Company pursuant to the Listing Rules
	shall include a summary of the work		of the		shall include a summary of the work	of the
	Corporate Governance Committee, with				Corporate Governance Committee, with
	regards to its duties set out in Article 164, for the accounting period covered by both the				regards to its duties set out in Article~~164~~165, for the accounting period covered by both the
	half-yearly and annual report and disclose				half-yearly and annual report and disclose
	any significant subsequent events for the				any significant subsequent events for the
	period up to	the date of publication of the			period up to the date of publication of the
	half-yearly and annual report, to the		extent		half-yearly and annual report, to the	extent
	possible.				possible.
178(c)	The provisions of paragraph (e) of Article 185			179(c)	The provisions of paragraph (e) of Article
	shall apply to the power of the Company to capitalise under this Article as it applies to				~~185~~186shall apply to the power of the Company to capitalise under this Article as it
	the grant of election thereunder mutatis				applies to the grant of election thereunder
	mutandis and no Shareholder who may be				mutatis mutandis and no Shareholder who
	affected thereby shall be, and they shall be				may be affected thereby shall be, and they
	deemed not to be, a separate class of				shall be deemed not to be, a separate	class of
	Shareholders by reason only of the exercise of				Shareholders by reason only of the exercise of
	this power.				this power.

– V-19 –

APPENDIX V

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Currently in force	Currently in force			Proposed to be amended as
Article				Article
No.	Articles of	Association		No.	Articles of Association
180(a)	The Board may subject to Article 181 from time to time pay to the Shareholders such			181(a)	The Board may subject to Article~~1811~~82 from time to time pay to the Shareholders such
	interim Dividends as appear to the Board to				interim Dividends as appear to the Board to
	be justified	by the financial conditions and the			be justified by the financial conditions and the
	profits of the Company and, in particular but				profits of the Company and, in particular but
	without prejudice to the generality of		the		without prejudice to the generality of	the
	foregoing, if at any time the share capital of				foregoing, if at any time the share capital of
	the Company is divided into different classes,				the Company is divided into different	classes,
	the Board may pay such interim Dividends in				the Board may pay such interim Dividends in
	respect of those Shares in the capital of the				respect of those Shares in the capital of the
	Company which confer to the holders		thereof		Company which confer to the holders	thereof
	deferred or	non-preferential rights as	well as		deferred or non-preferential rights as well as
	in respect of those Shares which confer on the				in respect of those Shares which confer on the
	holders thereof preferential rights with regard				holders thereof preferential rights with regard
	to Dividend and, provided that the Board acts				to Dividend and, provided that the Board acts
	bona fide, it shall not incur any responsibility				bona fide, it shall not incur any responsibility
	to the holders of Shares conferring any				to the holders of Shares conferring any
	preference for any damage that they may				preference for any damage that they may
	suffer by reason of the payment of an		interim		suffer by reason of the payment of an interim
	Dividend on any Shares having deferred or				Dividend on any Shares having deferred or
	non-preferential rights.				non-preferential rights.

– V-20 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [40 x 38] intentionally omitted <==

J&T Global Express Limited 極兔速遞環球有限公司

(A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

(Stock Code: 1519)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “ EGM ”) of J&T Global Express Limited (the “ Company ”) will be held by way of a virtual meeting through the e-Meeting System on Tuesday, April 21, 2026 at 9:30 a.m. (the “ Extraordinary General Meeting ”) (or any adjournment thereof) for the following purposes:

ORDINARY RESOLUTION

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“ THAT

(a) The share subscription agreement (the “ Share Subscription Agreement ”) dated January 15, 2026 entered into between the Company and S.F. Holding Co., Ltd. and the acquisition contemplated thereunder, be and hereby confirmed, approved and ratified; and
(b) any one of the directors of the Company be and is hereby authorized to do all such acts and things incidental to the Share Subscription Agreement and the relevant ancillary agreements as he/she considers necessary, desirable, or expedient in connection with the implementation of or giving effect to the Share Subscription Agreement, the relevant ancillary agreements and the transactions contemplated thereunder.”

SPECIAL RESOLUTION

To consider and, if thought fit, pass the following resolution as a special resolution:

“ THAT

the eighth amended and restated memorandum and articles of association of the Company (the “ New Articles of Association ”) (a copy of which has been produced to this meeting and marked “A” and initialed by the chairman of this meeting for the purpose of identification) be and are hereby approved and

– EGM-1 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

adopted in substitution for and to the exclusion of the existing amended and restated memorandum and articles of association of the Company with immediate effect after the close of this meeting and that any one Director be and is hereby authorized to do all things necessary to implement the adoption of the New Articles of Association of the Company.”

By order of the Board J&T Global Express Limited Mr. Jet Jie Li Executive Director, Chairman of the Board and Chief Executive Officer

Hong Kong, March 27, 2026

Note:

The EGM will be held by way of a virtual meeting. Shareholders can attend the EGM through online access by visiting the e-Meeting System through the Internet by using their computer device, tablet device or smartphone. Each registered shareholder’s personalised username and password will be sent to him/her/it under separate letters. Shareholders will be able to attend the EGM, vote and submit questions online via the designated URL (https://evoting.vistra.com/#/519). Non-registered holders whose Shares are held in the CCASS through banks, brokers, custodians or HKSCC may also be able to attend the EGM, vote and submit questions online. In this regard, they should consult directly with their banks, brokers or custodians (as the case may be) for the necessary arrangements and the personalized login and access code will be sent to them by email upon receipt of request through their respective bank, broker, custodian or HKSCC. Shareholders and proxies participating in the Extraordinary General Meeting using the e-Meeting System will also be counted towards the quorum.
A Shareholder entitled to attend and vote at the above meeting is entitled to appoint another person as his/her proxy to attend and vote instead of him/her; a proxy need not be a Shareholder of the Company.
In the case of joint holders, the vote of the senior who tenders a vote, whether in person through the e-Meeting System or by proxy, will be accepted to the exclusion of the vote(s) of the other joint holder(s) and for this purpose seniority shall be determined as that one of the said persons so present whose name stands first on the register in respect of such share shall alone be entitled to vote in respect thereof.
In order to be valid, a form of proxy together with the power of attorney (if any) or other authority (if any) under which it is signed or a certified copy thereof shall be deposited at the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong not less than 48 hours before the time appointed for the meeting (i.e. no later than 9:30 a.m. on Sunday, April 19, 2026). The proxy form will be published on the website of The Stock Exchange Hong Kong Limited. The completion and return of the form of proxy shall not preclude shareholders of the Company from attending and voting through the e-Meeting System at the above meeting (or any adjourned meeting thereof) if they so wish, and in such case, the form of proxy previously submitted shall be deemed to be revoked.
For determining the entitlement to attend and vote at the above meeting, the register of members of the Company will be closed from Thursday, April 16, 2026 to Tuesday, April 21, 2026, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the Extraordinary General Meeting, unregistered holders of shares of the Company shall ensure that all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration no later than 4:30 p.m. on Wednesday, April 15, 2026.

– EGM-2 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

The Company will adopt the following arrangements at the EGM:
(a) All resolutions at the EGM will be decided on a poll. Shareholders are entitled to attend and vote through online access by visiting the e-Meeting System.
(b) Shareholders can cast their votes and submit questions through online access by visiting the website (https://evoting.vistra.com/#/519). The e-Meeting System will be open for Shareholders to log in approximately 30 minutes prior to the commencement of the EGM and can be accessed from any location with internet connection by a smart phone, tablet device or computer device.
(c) Shareholders attending the EGM using the e-Meeting System will be able to submit questions relevant to the Company’s proposed resolutions online during the EGM.
(d) Registered shareholders are requested to provide a valid email address of his or her proxy (except appointing “the chairman of the EGM” as proxy) to receive the username and password to cast their votes and submit online questions on the e-Meeting System. Shareholders are requested to complete the form of proxy in accordance with the instructions printed thereon, return it to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting (i.e. by no later than 9:30 a.m. on Sunday, April 19, 2026) or any adjournment thereof.
(e) Shareholders of the Company whose names appear on the register of members on Tuesday, April 21, 2026 are entitled to attend and vote at the Extraordinary General Meeting or any adjourned meetings.
(f) References to time and dates in this notice are to Hong Kong time and dates.
(g) The meeting is expected to take one hour. Shareholders attending the Extraordinary General Meeting will bear their own transportation and accommodation expenses.

As at the date of this notice, the Board of Directors of the Company comprises Mr. Jet Jie Li as executive Director, Ms. Alice Yu-fen Cheng, Ms. Qinghua Liao and Mr. Yuan Zhang as non-executive Directors, and Mr. Erh Fei Liu, Mr. Peng Shen and Mr. Peter Lai Hock Meng as independent non-executive Directors.

– EGM-3 –

AI assistant

J&T Global Express Limited — Proxy Solicitation & Information Statement 2026

49971_rns_2026-03-27_f5cd880e-7a0c-4c20-bb7f-6cae7fc9eb47.pdf

J&T Global Express Limited 極兔速遞環球有限公司

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

VIRTUAL EXTRAORDINARY GENERAL MEETING

HOW TO ATTEND AND VOTE

Tricor Investor Services Limited

J&T Global Express Limited 極兔速遞環球有限公司

(Stock Code: 1519)

1. INTRODUCTION

The Share Subscription Agreement

LETTER FROM THE BOARD

Subject matter

LETTER FROM THE BOARD

Completion

LETTER FROM THE BOARD

Lock-up arrangement

Application for Listing

Ranking of Consideration Shares

General Mandate

EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY

EQUITY FUND RAISING ACTIVITY OF THE COMPANY IN THE PAST 12 MONTHS

INFORMATION OF THE PARTIES

The Company

S.F. Holding

Financial Information of S.F. Holding

DEED OF UNDERTAKING

REASONS FOR AND BENEFITS OF THE PROPOSED TRANSACTIONS

LISTING RULES IMPLICATIONS

FINANCIAL IMPACTS OF THE PROPOSED TRANSACTIONS ON THE GROUP

FINANCIAL INFORMATION OF S.F. HOLDING

3. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

4. EXTRAORDINARY GENERAL MEETING AND PROXY ARRANGEMENT

5. VOTING BY POLL

6. RESPONSIBILITY STATEMENT

7. RECOMMENDATION

8. CLOSURE OF REGISTER OF MEMBERS

9. GENERAL

Yours faithfully, By order of the Board J&T Global Express Limited Mr. Jet Jie Li

I. INTRODUCTION

II. ATTENDING THE EGM BY MEANS OF ELECTRONIC FACILITIES

1. Login Details for Registered Shareholders

2. Login Details for Non-registered Shareholders

3. Login Details for Proxies or Corporate Representatives

III. QUESTIONS AT AND PRIOR TO THE EGM

IV. APPOINTMENT OF PROXY

V. SUBMISSION OF PROXY FORMS FOR REGISTERED SHAREHOLDERS

VI. APPOINTMENT OF PROXY FOR NON-REGISTERED SHAREHOLDERS

Tricor Investor Services Limited

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS STATEMENT

Indebtedness

3. WORKING CAPITAL SUFFICIENCY

4. MATERIAL ADVERSE CHANGE

5. FINANCIAL AND TRADING PROSPECT OF THE GROUP

FINANCIAL INFORMATION OF S.F. HOLDING FOR THE THREE YEARS ENDED DECEMBER 31, 2022, DECEMBER 31, 2023, DECEMBER 31, 2024 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2025

(A) FINANCIAL INFORMATION OF S.F. HOLDING FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2023

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

STATEMENTS OF FINANCIAL POSITION OF THE COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1. GENERAL INFORMATION OF THE GROUP

2. SUMMARY OF ACCOUNTING POLICIES

2.1 Summary of material accounting policies

(a) Basis of preparation

(b) New standards and interpretations

(c) Associates

(d) Joint arrangements

Joint ventures

(e) Business combinations

(f) Intangible assets

(i) Goodwill

(ii) Software

(iii) Research and development

(iv) Customer relationships

(v) Trademarks

J&T Global Express Limited Proxy Solicitation & Information Statement 2026