PegBio Co., Ltd. — Interim / Quarterly Report 2020

Aug 26, 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

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CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2020

The board (the “ Board ”) of directors (the “ Directors ”) of CMBC Capital Holdings Limited (the “ Company ”) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (collectively referred to as the “ Group ”) for the six months ended 30 June 2020 (the “ Reporting Period ”) together with comparative figures for the six months ended 30 June 2019 (the “ Previous Period ”) as follows:

– 1 –

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the six months ended 30 June 2020

Notes Revenue 4 Net gains on financial assets at fair value through profit or loss (“FVTPL”) Net losses on financial assets at fair value through other comprehensive income (“FVOCI”) Other income 5 Other gains and losses 6 Impairment losses 7 Staff costs Depreciation and amortisation Other operating expenses Finance costs 8 Profit before taxation 9 Taxation 10 Profit for the period attributable to owners of the Company Earnings per share attributable to owners of the Company (HK cents) 11 – Basic – Diluted

Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 (Unaudited) (Unaudited) 501,578 447,101 48,204 22,177 (9,075) (10,714) 7,483 3,017 (3,815) (4,823) (107,689) (22,642) (33,553) (45,738) (13,856) (15,897) (25,942) (29,540) (163,167) (167,234) 200,168 175,707 (34,718) (25,392) 165,450 150,315 0.35 0.32 0.35 0.32

– 2 –

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2020

Profit for the period attributable to owners of the Company Other comprehensive (loss)/income Item that will not be reclassified to profit or loss: – Equity investments at fair value through other comprehensive income – net movement in fair value reserve (non-recycling) Item that may be reclassified subsequently to profit or loss: – Financial assets at fair value through other comprehensive income – net movement in fair value reserve (recycling) Other comprehensive (loss)/income for the period, net of tax Total comprehensive income for the period attributable to owners of the Company	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 (Unaudited) (Unaudited) 165,450 150,315 (34,241) 41,642 (83,631) 158,248 (117,872) 199,890 47,578 350,205	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 (Unaudited) (Unaudited) 165,450 150,315 (34,241) 41,642 (83,631) 158,248 (117,872) 199,890 47,578 350,205
		199,890
		350,205

– 3 –

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2020

Notes Non-current assets Property, plant and equipment Right-of-use asset Goodwill Intangible assets Loans and advances 13 Financial assets at amortised cost 15 Deferred tax assets Other assets Current assets Accounts receivable 14 Prepayments, deposits and other receivables Interest receivable Amount due from an intermediate holding company Loans and advances 13 Financial assets at fair value through other comprehensive income 16 Financial assets at amortised cost 15 Financial assets at fair value through profit or loss 17 Cash held on behalf of customers Cash and cash equivalents	As at 30 June 2020 HK$’000 (Unaudited) 10,867 105,106 16,391 2,788 353,323 76,944 7,589 10,185 583,193 528,004 145,945 151,516 2,002 1,529,442 8,382,157 58,129 884,137 172,661 601,929 12,455,922	As at 31 December 2019 HK$’000 (Audited) 11,926 116,785 16,391 3,474 357,822 77,574 13,520 10,184
		607,676
		601,243 55,773 147,676 4,109 1,852,889 6,888,906 93,504 952,053 35,279 400,708
		11,032,140

– 4 –

Notes Current liabilities Accounts payable 18 Other payables and accruals Bank and other borrowings 19 Notes payable Financial assets sold under repurchase agreements 20 Financial liabilities at fair value through profit or loss 21 Lease liabilities Dividend payable Tax payable Net current assets Total assets less current liabilities Non-current liabilities Lease liabilities Deferred tax liabilities Net assets Capital and reserves Share capital 22 Reserves Total equity	As at 30 June 2020 HK$’000 (Unaudited) 185,214 229,826 6,457,813 50,000 3,633,292 27,413 27,388 157,272 44,065 10,812,283 1,643,639 2,226,832 79,983 36,922 116,905 2,109,927 476,583 1,633,344 2,109,927	As at 31 December 2019 HK$’000 (Audited) 38,958 145,329 5,748,468 50,000 3,180,420 27,977 27,388 – 82,510
		9,301,050
		1,731,090
		2,338,766
		91,012 25,511
		116,523
		2,222,243
		476,792 1,745,451
		2,222,243

– 5 –

NOTES:

1 BASIS OF PREPARATION

This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities of The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”), including compliance with Hong Kong Accounting Standard (“ HKAS ”) 34, interim financial reporting, issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”). It was authorised for issue on 26 August 2020.

The interim financial report has been prepared in accordance with the same accounting policies adopted in the 2019 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2020 annual financial statements. Details of any changes in accounting policies are set out in note 2.

The preparation of condensed consolidated financial statements in conformity with HKAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.

There was no major change in the current period to the critical accounting estimates and judgements applied in 2019, which are stated in note 3 of the Annual Report 2019. However, the level of estimation uncertainty and judgement for the calculation of expected credit losses has increased since 31 December 2019 as a result of the economic effects of the COVID-19 outbreak. There have been no significant changes in the methodology used to determine the expected credit losses estimate, but the probability weightings of the upside, base and downside scenarios have been adjusted to reflect the change in management’s view of the deteriorating economic outlook since 31 December 2019.

2 CHANGES IN ACCOUNTING POLICIES

A number of new or amended standards became applicable for the current reporting period, and the Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

The following amendments to accounting standards are applicable for annual reporting periods commencing on or after 1 January 2020:

• Definition of Material – amendments to HKAS 1 and HKAS 8

• Definition of a Business – amendments to HKFRS 3

• Revised Conceptual Framework for Financial Reporting

• Interest Rate Benchmark Reform – amendments to HKFRS 9, HKAS 39 and HKFRS 7

None of these is expected to have a significant effect on the condensed consolidated financial statements of the Group.

– 6 –

3 SEGMENT INFORMATION

In a manner consistent with the way in which information is reported internally to the Group’s management, being the chief operating decision makers, for the purpose of resources allocation and assessment of segment performance focusing on types of services provided. In 2020, “Asset management” and “Corporate finance and advisory” segments are now presented separately to align with the Group’s internal reporting information. Comparatives have been re-presented accordingly.

• the securities segment representing the business line of provision of brokerage services, securities margin financing services to clients and securities underwriting/placing;

• the investment and financing segment representing investment and trading activities in equity securities, bonds, funds and provision of loan financing services;

• the asset management segment representing provision of asset management services to clients;

• the corporate finance and advisory segment representing provision of sponsorship, financial advisory and financial arrangement services to clients; and

• the ‘Others’ segment primarily includes head office operations as well as interest income and interest expense incurred for generating working capital for general operations.

Disaggregation of revenue

Disaggregation of revenue from contracts with customers by service lines is as follows:

Revenue from contracts with customers within the scope of HKFRS 15 Disaggregated by service lines – Commission income from brokerage and related services – Commission income from underwriting, sub-underwriting, placing and sub-placing – Financing advisory, sponsorship, arrangement fee and other service income – Asset management services fee income Revenue from other sources Loan and financing – Interest income from provision of finance and securities margin financing Financial investments – Interest income from debt securities investments – Interest income from FVTPL investments – Dividend income and other investment income	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 365 937 17,052 23,610 14,483 33,509 62,226 15,252 94,126 73,308 119,490 194,667 237,962 127,940 8,125 26,190 41,875 24,996 287,962 179,126 501,578 447,101	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 365 937 17,052 23,610 14,483 33,509 62,226 15,252 94,126 73,308 119,490 194,667 237,962 127,940 8,125 26,190 41,875 24,996 287,962 179,126 501,578 447,101
		73,308
		194,667 127,940 26,190 24,996
		179,126
		447,101

– 7 –

The Group’s revenue from continuing operation from external customers are located in Hong Kong.

Disaggregation of revenue is set out below.

				Investment	Investment			Corporate finance	Corporate finance
	Securities			and financing		Asset	management	and	advisory	Total
	30 June	30	June	30 June	30 June	30 June	30 June	30 June	30 June	30 June	30 June
For the six months ended	2020		2019	2020	2019	2020	2019	2020	2019	2020		2019
							(Re-presented)		(Re-presented)
	HK$’000	HK$’000		HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Revenue from contracts with customers within
the scope of HKFRS 15	8,099	27,631		–	–	62,226	15,252	23,801	30,425	94,126		73,308
Revenue from other sources
Loan and financing
– Interest income from provision of finance
and securities margin financing	25,565	33,973		93,925	160,694	–	–	–	–	119,490	194,667
Financial investments
– Interest income from debt securities
investments	–		–	237,962	127,940	–	–	–	–	237,962	127,940
– Interest income from FVTPL investments	–		–	8,125	26,190	–	–	–	–	8,125		26,190
– Dividend income and other investment income	–		–	41,875	24,996	–	–	–	–	41,875		24,996
	–		–	287,962	179,126	–	–	–	–	287,962	179,126
Reportable segment revenue	33,664	61,604		381,887	339,820	62,226	15,252	23,801	30,425	501,578	447,101

– 8 –

Segment revenue and results

The following is an analysis of the Group’s revenue and results by reportable segments:

Segment revenue and investment gains/(losses) – Reportable segment revenue – Net gains on financial assets at fair value through profit or loss – Net losses on financial assets at fair value through other comprehensive income Other income Other gains and losses Segment expenses Segment results Segment revenue and investment gains/(losses) – Reportable segment revenue – Net gains on financial assets at fair value through profit or loss – Net losses on financial assets at fair value through other comprehensive income Other income Other gains and losses Segment expenses Segment results			Six months ended 30 June 2020	Six months ended 30 June 2020
	Securities	Investment and financing	Asset management	Corporate finance and advisory	Others	Total
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
	33,664	381,887	62,226	23,801	–	501,578
	–	48,204	–	–	–	48,204
	–	(9,075)	–	–	–	(9,075)
	33,664	421,016	62,226	23,801	–	540,707
	1,523	191	456	633	4,680	7,483
	(1,460)	8,236	(328)	115	(10,378)	(3,815)
	(15,412)	(278,754)	(19,440)	(14,699)	(15,902)	(344,207)
	18,315	150,689	42,914	9,850	(21,600)	200,168
			Six months ended 30 June 2019
	Securities	Investment and financing	Asset management	Corporate finance and advisory	Others	Total
			(Re-presented)	(Re-presented)
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
	61,604	339,820	15,252	30,425	–	447,101
	–	22,177	–	–	–	22,177
	–	(10,714)	–	–	–	(10,714)
	61,604	351,283	15,252	30,425	–	458,564
	637	1,080	1	310	989	3,017
	(711)	505	(4)	10	(4,623)	(4,823)
	(18,752)	(196,686)	(14,642)	(13,839)	(37,132)	(281,051)
	42,778	156,182	607	16,906	(40,766)	175,707

– 9 –

Segment assets and liabilities

The following is an analysis of the Group’s assets and liabilities by reportable segments:

Assets Segment assets Liabilities Segment liabilities Assets Segment assets Liabilities Segment liabilities			As at 30 June 2020	As at 30 June 2020
	Securities	Investment and financing	Asset management	Corporate finance and advisory	Others	Total
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
	820,814	11,755,003	56,982	5,308	401,008	13,039,115
	642,612	9,906,797	20,070	–	359,709	10,929,188
			As at 31 December 2019
	Securities	Investment and financing	Asset management	Corporate finance and advisory	Others	Total
			(Re-presented)	(Re-presented)
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
	749,591	10,553,869	30,578	27,002	278,776	11,639,816
	545,222	8,625,644	12,140	3,447	231,120	9,417,573

– 10 –

4 REVENUE

Commission income from brokerage and related services Commission income from underwriting, sub-underwriting, placing and sub-placing Interest income from debt securities investments Interest income from FVTPL investments Interest income from provision of finance and securities margin financing Dividend income and other investment income Financing advisory, sponsorship, arrangement fee and other service income Asset management services fee income	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 365 937 17,052 23,610 237,962 127,940 8,125 26,190 119,490 194,667 41,875 24,996 14,483 33,509 62,226 15,252 501,578 447,101	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 365 937 17,052 23,610 237,962 127,940 8,125 26,190 119,490 194,667 41,875 24,996 14,483 33,509 62,226 15,252 501,578 447,101
		447,101

5 OTHER INCOME

Bank interest income Office sharing fee income Other income	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 1,065 424 4,440 740 1,978 1,853 7,483 3,017	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 1,065 424 4,440 740 1,978 1,853 7,483 3,017
		3,017

6 OTHER GAINS AND LOSSES

Loss on disposal of property, plant and equipment Net exchange loss	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 – (134) (3,815) (4,689) (3,815) (4,823)	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 – (134) (3,815) (4,689) (3,815) (4,823)
		(4,823)

– 11 –

7 IMPAIRMENT LOSSES

Impairment losses – Loans and advances_(Note 13) – Accounts receivable(Note 14) – Financial assets at fair value through other comprehensive income(Note 16) – Financial assets at amortised cost(Note 15)_ 8 FINANCE COSTS Interest expense on: Margin loan Notes payable Bank borrowings Loans from an intermediate holding company Financial assets sold under repurchase agreements Lease liabilities 9 PROFIT BEFORE TAXATION The Group’s profit before taxation is arrived at after charging: Depreciation of property, plant and equipment Depreciation of right-of-use asset Amortisation of intangible assets Lease payments in respect of short-term leases		Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 6,813 642 1,555 – 64,352 22,000 34,969 – 107,689 22,642 Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 4 – 1,521 4,137 – 2,027 118,986 131,892 39,992 26,137 2,664 3,041 163,167 167,234 Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 1,491 3,533 11,679 11,678 686 686 – 6,043	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 6,813 642 1,555 – 64,352 22,000 34,969 – 107,689 22,642 Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 4 – 1,521 4,137 – 2,027 118,986 131,892 39,992 26,137 2,664 3,041 163,167 167,234 Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 1,491 3,533 11,679 11,678 686 686 – 6,043
			167,234
			ended 30 June 2019 HK$’000 3,533 11,678 686 6,043

– 12 –

10 TAXATION

Current period – Hong Kong Profits Tax Deferred tax provided for the period	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 (17,376) (25,181) (17,342) (211) (34,718) (25,392)	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 (17,376) (25,181) (17,342) (211) (34,718) (25,392)
		(25,392)

Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profit for both periods.

11 EARNINGS PER SHARE

The calculation of basic and diluted earnings per share attributable to owners of the Company is based on the following data:

Earnings Profit attributable to owners of the Company for the purpose of basic and diluted earnings per share Number of shares Weighted average number of ordinary shares for the purpose of basic and diluted earnings per share	Six months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 165,450 150,315 Six months ended 30 June 2020 30 June 2019 ’000 ’000 47,673,449 47,705,863

The denominators used are the same as those detailed above for the basic and diluted earnings per share.

– 13 –

12 DIVIDENDS

The Board of Directors does not recommend the payment of interim dividend for the six months ended 30 June 2020 (30 June 2019: Nil).

The final dividend of HK0.33 cents per share for the year ended 31 December 2019 had been approved by the shareholders of the Company on 30 June 2020 and was paid on 24 July 2020 in an aggregated amount of approximately HK$157,272,000 (2018: The final dividend of HK0.2 cents per share for the year ended 31 December 2018 had been approved by the shareholders of the Company on 28 June 2019 and was paid on 26 July 2019 in an aggregated amount of approximately HK$95,407,000).

13 LOANS AND ADVANCES

Loans and advances Less: Allowance for expected credit losses Less: Amount due within one year shown under current assets Amount shown under non-current assets Loans and advances (non-current) Less: Allowance for expected credit losses Loans and advances (current) Less: Allowance for expected credit losses	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 1,896,679 2,217,812 (13,914) (7,101) 1,882,765 2,210,711 (1,529,442) (1,852,889) 353,323 357,822 357,342 359,384 (4,019) (1,562) 353,323 357,822 1,539,337 1,858,428 (9,895) (5,539) 1,529,442 1,852,889

At 30 June 2020, loans and advances included loans to independent third parties with effective interest rates ranging from 5% to 14% (31 December 2019: 5% to 14%) per annum. Certain loans and advances were secured and/or backed by guarantees or collaterals. Regular reviews on these loans are conducted by the risk management department based on the latest status of these loans, and the latest available information about the borrowers and the underlying collaterals held.

During the period ended 30 June 2020, allowance for expected credit losses of HK$6,813,000 was recognised (for the six months ended 30 June 2019: HK$642,000) in the condensed consolidated statement of profit or loss.

At 31 December 2019, one of the borrowers was assessed by management to be credit impaired and an allowance for expected credit losses of approximately HK$31,291,000 was provided. Management considered the loan to the individually impaired borrower was irrecoverable and the loan amount was fully provided and subsequently written off at 31 December 2019.

– 14 –

14 ACCOUNTS RECEIVABLE

Accounts receivable arising from the ordinary course of business of securities brokerage, futures and options dealing services: – Clearing houses – Cash clients – Margin clients Accounts receivable arising from the ordinary course of business of securities underwriting Accounts receivable arising from the ordinary course of business of advisory services Less: Allowance for expected credit losses	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 221 770 101 5 525,094 584,642 525,416 585,417 3,290 11,988 2,015 5,000 530,721 602,405 (2,717) (1,162) 528,004 601,243

Accounts receivable arising from the business of dealing in securities

The normal settlement terms of accounts receivable from clients and clearing houses, except for accounts receivable due from margin clients, arising from the ordinary course of business of securities brokerage services are two trading days after the trade date. No ageing analysis is disclosed as, in the opinion of directors of the Company, an ageing analysis does not give additional value in view of the nature of this business. As at 30 June 2020, the Group has concentration risk on its accounts receivable as the balance with the largest client represent 41% (31 December 2019: 35%) of the total accounts receivable from cash and margin clients. The Group has no other significant concentration risk.

Accounts receivable due from margin clients are repayable on demand and carry interest ranging from Hong Kong Prime Rate to Hong Kong Prime Rate plus 12.75% per annum during the six months ended 30 June 2020 (during the year ended 31 December 2019: Hong Kong Prime Rate to Hong Kong Prime Rate plus 12.75%). The fair values of the pledged securities as at 30 June 2020 approximately at HK$755,592,000 (31 December 2019: HK$936,840,000).

As at 30 June 2020, approximately 99% (31 December 2019: approximately 99%) of the margin clients receivable balance were secured by sufficient collaterals on an individual basis. During the period ended 30 June 2020, allowance for expected credit losses of HK$1,555,000 was recognised (for the six months ended 30 June 2019: Nil) in the condensed consolidated statement of profit or loss.

– 15 –

Accounts receivable arising from the businesses of securities underwriting and advisory services

Ageing of accounts receivable arising from the ordinary course of businesses of securities underwriting and advisory services, based on the due date, is as follows:

Neither past due nor impaired Less than 31 days past due 31 – 60 days past due 61 – 90 days past due Over 90 days past due Allowance for expected credit losses Total	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 3,569 11,471 232 117 – 2,077 – 1,403 1,504 1,920 5,305 16,988 – – 5,305 16,988	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 3,569 11,471 232 117 – 2,077 – 1,403 1,504 1,920 5,305 16,988 – – 5,305 16,988
		16,988 –
		16,988

The Group applies HKFRS 9 simplified approach to measure the expected credit losses for accounts receivable arising from the business of securities underwriting and advisory services. The management assessed the loss allowance was insignificant.

15 FINANCIAL ASSETS AT AMORTISED COST

Listed debt investments Less: Allowance for expected credit losses Less: Amount due within one year shown under current assets Amount shown under non-current assets Financial assets at amortised cost (non-current) Less: Allowance for expected credit losses Financial assets at amortised cost (current) Less: Allowance for expected credit losses	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 193,764 194,800 (58,691) (23,722) 135,073 171,078 (58,129) (93,504) 76,944 77,574 77,506 77,920 (562) (346) 76,944 77,574 116,258 116,880 (58,129) (23,376) 58,129 93,504	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 193,764 194,800 (58,691) (23,722) 135,073 171,078 (58,129) (93,504) 76,944 77,574 77,506 77,920 (562) (346) 76,944 77,574 116,258 116,880 (58,129) (23,376) 58,129 93,504
		171,078 (93,504)
		77,574
		77,920 (346)
		77,574
		116,880 (23,376)
		93,504

During the period ended 30 June 2020, allowance for expected credit losses of HK$34,969,000 was recognised (for the six months ended 30 June 2019: Nil) in the condensed consolidated statement of profit or loss.

– 16 –

16 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Listed debt investments, at fair value (Note) Listed equity instruments, at fair value	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 6,755,119 5,814,815 1,627,038 1,074,091 8,382,157 6,888,906	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 6,755,119 5,814,815 1,627,038 1,074,091 8,382,157 6,888,906
		6,888,906

• Note : The Group has further recognised expected credit losses amounted to HK$64,352,000 in the condensed consolidated statement of profit or loss during the period (for the six months ended 30 June 2019: HK$22,000,000). As at 30 June 2020, allowance for expected credit losses amounted HK$170,443,000 (31 December 2019: HK$106,091,000) has been included in fair value reserve (recycling).

17 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Listed equity investments Unlisted equity investments Listed debt investments Unlisted investment funds Unlisted convertible debt investments	As at 30 June 2020 HK$’000 2,725 308,575 151,461 421,376 – 884,137	As at 31 December 2019 HK$’000 25,454 290,790 94,071 299,212 242,526
		952,053

The fair values of the listed equity investments and listed debt investments were determined based on the quoted market prices.

– 17 –

18 ACCOUNTS PAYABLE

Accounts payable arising from the ordinary course of business of securities brokerage, futures and options dealing services: – Cash clients – Margin clients – Clearing houses – Broker	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 134,398 29,805 10,546 7,084 – 2,069 40,270 – 185,214 38,958	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 134,398 29,805 10,546 7,084 – 2,069 40,270 – 185,214 38,958
		38,958

Accounts payable arising from the business of dealing in securities

The accounts payable balances arising from the ordinary course of business of securities brokerage services are normally settled in two trading days after the trade date except for the money held on behalf of clients at the segregated bank accounts which are repayable on demand. No ageing analysis is disclosed as, in the opinion of directors of the Company, an ageing analysis does not give additional value in view of the nature of this business.

19 BANK AND OTHER BORROWINGS

Loans from an intermediate holding company The carrying amounts of the above borrowings are repayable: Within one year	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 6,457,813 5,748,468 6,457,813 5,748,468	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 6,457,813 5,748,468 6,457,813 5,748,468
		5,748,468

As at 30 June 2020, the Group had loans amounting to approximately HK$6,247,562,000 (31 December 2019: HK$5,656,678,000) from CMBC International Holdings Limited, an intermediate holding company and interest payable amounting to approximately HK$210,251,000 (31 December 2019: HK$91,790,000). The loans bear interests at 4% per annum (31 December 2019: 4% to 4.24% per annum) and are repayable within one year (31 December 2019: within one year).

During the year ended 31 December 2019, all bank borrowings from China Minsheng Banking Corp., Ltd. Hong Kong Branch (“ CMBC HK Branch ”), a branch of the ultimate holding company, had been repaid in full and no outstanding amount as at 31 December 2019.

– 18 –

20 FINANCIAL ASSETS SOLD UNDER REPURCHASE AGREEMENTS

Bonds	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 3,633,292 3,180,420

As at 30 June 2020, the Group entered into repurchase agreements with financial institutions to sell bonds recognised as financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and financial assets at amortised cost with aggregate carrying amount of approximately HK$5,538,054,000 (31 December 2019: approximately HK$5,590,071,000), which are subject to the simultaneous agreements to repurchase these investments at the agreed dates and prices.

Sales and repurchase agreements are transactions in which the Group sells bonds and simultaneously agrees to repurchase them (or assets that are substantially the same) at the agreed dates and prices. The repurchase prices are fixed and the Group is still exposed to substantially all the credit risks, market risks and rewards of those bonds sold. The bonds are not derecognised from the condensed consolidated financial statements but regarded as “collaterals” for the liabilities because the Group retains substantially all the risks and rewards of the bonds.

21 FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Payables to interest holder of unlisted consolidated investment fund, designated at FVTPL	As at 30 June 2020 As at 31 December 2019 HK$’000 HK$’000 27,413 27,977

As at 30 June 2020, the Company held 60% (31 December 2019: 60%) interest of CMBCC Co-High Medical Investment Fund SP (the “ Medical Fund ”). As the Group has control over the Medical Fund, it is accounted for as a subsidiary. Accordingly, the interests of the non-controlling shareholder are classified as financial liabilities designated as at fair value through profit or loss of approximately HK$27,413,000 as at 30 June 2020. (31 December 2019: HK$27,977,000).

During the year ended 31 December 2019, the Company had received full amount of the cash dividends distributable to itself in accordance with the placing memorandum of New China OCT Fund SPC for the Segregated Portfolio, and all Class A shares held by the Company had been redeemed. For details, please refer to the Company’s announcement dated 18 March 2019.

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22 SHARE CAPITAL

Number of shares As at 30 June 2020 As at 31 December 2019 Note ‘000 ‘000 Authorised: Ordinary shares of HK$0.01 each 100,000,000 100,000,000 Issued and fully paid: At the beginning of the period/year 47,679,218 47,705,978 Cancellation for shares repurchased (i) (20,910) (26,760) At the end of the period/year 47,658,308 47,679,218	Amount As at 30 June 2020 As at 31 December 2019 HK$‘000 HK$‘000 1,000,000 1,000,000 476,792 477,059 (209) (267) 476,583 476,792

Note:

• (i) During the period ended 30 June 2020, the Company repurchased an aggregate of 18,970,000 ordinary shares of the Company on market at prices ranging from HK$0.113 to HK$0.17 per share at a total consideration of approximately HK$2,622,000 (before transaction costs). These shares were cancelled during the period ended 30 June 2020.

During the year ended 31 December 2019, the Company repurchased an aggregate of 28,700,000 ordinary shares of the Company on market at prices ranging from HK$0.116 to HK$0.217 per share at a total consideration of approximately HK$3,990,000 (before transaction costs). Of these repurchased shares, 26,760,000 shares were cancelled prior to year ended 31 December 2019. The premium of approximately HK$3,441,000 paid on the repurchase of such shares was debited to share premium account. Subsequent to end of the reporting period, the remaining 1,940,000 repurchased shares were cancelled on 7 January 2020.

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BUSINESS REVIEW

During the Reporting Period, the Group’s profit attributable to the owners of the Company increased to approximately HK$165.5 million, representing an increase of approximately 10.1% when compared to profit for the Previous Period of approximately HK$150.3 million. The Group’s basic and diluted earnings per share were HK0.35 cents (30 June 2019: HK0.32 cents).

Revenue

The Group’s revenue increased by approximately 12.2% to approximately HK$501.6 million during the Reporting Period, compared to approximately HK$447.1 million in the Previous Period. The increase was mainly due to the contribution from the investment and financing segment and the asset management segment during the Reporting Period. The table below presents the breakdown of segment revenue (including net gains or losses from investment) and segment results during the Reporting Period:

Securities Investment and financing Asset management Corporate finance and advisory Other Total	Segment Revenue For the 6 months ended 30 June 2020 2019 HK$’000 HK$’000 33,664 61,604 421,016 351,283 62,226 15,252 23,801 30,425 – – 540,707 458,564	Segment Results For the 6 months ended 30 June 2020 2019 HK$’000 HK$’000 18,315 42,778 150,689 156,182 42,914 607 9,850 16,906 (21,600) (40,766) 200,168 175,707

Securities segment

The Group’s securities business mainly includes the provision of brokerage services, securities margin financing services and securities underwriting/placing services to clients.

During the Reporting Period, the revenue and profit contributed by securities segment were approximately HK$33.7 million and approximately HK$18.3 million, respectively, compared to the revenue and profit of approximately HK$61.6 million and approximately HK$42.8 million, respectively in the Previous Period. The decrease in segment revenue and profit was mainly attributable to the decline of the Group’s securities business.

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Investment and financing segment

During the Reporting Period, the segment revenue, which included coupon, dividend and distribution income from listed bonds, listed equities, unlisted funds, unlisted convertible debt investments, as well as interest income from loans, amounted to approximately HK$381.9 million as compared to approximately HK$339.8 million in the Previous Period. The segment profit decreased from approximately HK$156.2 million in the Previous Period to approximately HK$150.7 million in the Reporting Period. The decrease in segment profit was mainly attributable to the increase in the provision of impairment loss.

The following table sets out the breakdown of investment and financing portfolio:

Investment Listed equities Unlisted equity interests Listed bonds (measured at FVOCI) Listed bonds (measured at FVTPL) Listed bonds (measured at amortised cost) Unlisted funds Unlisted convertible debt investments Total Financing Loans and advances	30 June 2020 HK$’000 2,725 308,575 8,382,157 151,461 135,073 421,376 – 9,401,367 1,882,765	31 December 2019 HK$’000 25,454 290,790 6,888,906 94,071 171,078 299,212 242,526
		8,012,037
		2,210,711

The Group’s investment portfolio mainly consisted of listed bonds, listed equities, unlisted equity investments, unlisted funds and unlisted convertible debt investments, covering a wide range of sectors such as industrial, pharmaceuticals, technology, consumer goods, real estate and finance.

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As at 30 June 2020, the assets of the proprietary investment of the Company amounted to approximately HK$9.4 billion (31 December 2019: HK$8.0 billion), including bonds investment of approximately HK$8.7 billion (31 December 2019: HK$7.2 billion). During the Reporting Period, the Group’s total investment portfolio increased by approximately HK$1.4 billion. This was mainly due to the net purchase of listed bonds (measured at FVOCI and FVTPL) and unlisted funds.

During the Reporting Period, the investment portfolio generated income in an aggregate amount of approximately HK$288.0 million (Previous Period: HK$179.1 million), including interest income from debt securities investments of approximately HK$238.0 million (Previous Period: HK$127.9 million), interest income from FVTPL investments of approximately HK$8.1 million (Previous Period: HK$26.2 million) and dividend income and other investment income of approximately HK$41.9 million (Previous Period: HK$25.0 million).

The Company maintains a solid proprietary bonds investment approach and is committed to a revenue-based (including charging fixed contractual interest income and receiving gains on disposal) trading strategy. Adopting a consistent top-down/bottom-up approach in its investment analysis, the Company pursues investment with high-level and sustainable revenue with limited volatility. It implements a prudent risk management strategy to strike a balance between risk management and revenue generation and diversify investment to a broad portfolio. Position in any single bond shall not account for more than 5% of the overall position and the portfolio is diversified by investing in various issuers with operation in a wide range of sectors, thereby avoiding the risk of substantial market adjustment.

At the same time, the unlisted direct investment business of the Group, including investment in equity interests and funds, mainly focused on trending industries, such as high-end technology, healthcare and artificial intelligence, and recorded stable growth in terms of overall value of investment projects held during the Reporting Period.

Through the selection of quality customers and projects and focus on short-to-mid term financing, the loan business maintained the assets liquidity of the Group. Loans were granted to market players in various industries, such as finance, technology, medical and healthcare, sports and well-being, education and real estate, which created a diversified loan portfolio. Concentration, maturity profile and risk-to-revenue ratio of the asset portfolio were monitored constantly. Thorough pre-, peri- and post- investment management measures were put in place to manage the credit risk of the Group practicably and effectively.

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Asset management segment

The Group’s asset management segment recorded revenue of approximately HK$62.2 million during the Reporting Period as compared to approximately HK$15.3 million in the Previous Period and segment profit of approximately HK$42.9 million during the Reporting Period as compared to approximately HK$0.6 million in the Previous Period. The segment revenue and profit increased due to the increase in the asset management portfolio and the recognition of the performance fee.

Corporate finance and advisory segment

The Group’s corporate finance and advisory segment recorded revenue of approximately HK$23.8 million during the Reporting Period as compared to approximately HK$30.4 million in the Previous Period and segment profit of approximately HK$9.9 million during the Reporting Period as compared to approximately HK$16.9 million in the Previous Period. The segment revenue and profit decreased due to the decrease in the number of advisory projects as compared to the Previous Period.

Administrative expenses and finance costs

Administrative expenses and finance costs for the Reporting Period amounted to approximately HK$236.5 million in aggregate as compared to approximately HK$258.4 million in the Previous Period. The analysis is set out below:

Staff costs Depreciation and amortisation Other administrative expenses Finance costs Total	For the 6 months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 33,553 45,738 13,856 15,897 25,942 29,540 163,167 167,234 236,518 258,409	For the 6 months ended 30 June 2020 30 June 2019 HK$’000 HK$’000 33,553 45,738 13,856 15,897 25,942 29,540 163,167 167,234 236,518 258,409
		258,409

The decrease in staff costs was mainly due to the decrease in the number of staff.

The decrease in depreciation and amortisation was mainly due to decrease in depreciation for property, plant and equipment.

The decrease in finance costs was mainly due to the decrease in interest rate.

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INTERIM DIVIDEND

The Board does not recommend the payment of interim dividend for the six months ended 30 June 2020 (Previous Period: Nil).

LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

Capital Structure

As at 30 June 2020, the total number of the issued share capital with the par value of HK$0.01 each was 47,658,307,729 (31 December 2019: 47,679,217,729) and total equity attributable to shareholders was approximately HK$2,109.9 million (31 December 2019: HK$2,222.2 million).

During the Reporting Period, 18,970,000 shares were repurchased by the Company and cancelled.

During the Reporting Period, no shares have been purchased or granted to the selected persons of the Group under the share award scheme adopted on 19 February 2016 or no share options have been granted under the share option scheme adopted on 24 September 2012.

Liquidity and Financial Resources

The Group primarily financed its operations with cash flows generated internally, borrowings, and shareholder’s equity.

As at 30 June 2020, the Group had current assets of approximately HK$12,455.9 million (31 December 2019: HK$11,032.1 million) and liquid assets comprising cash (excluding cash held on behalf of customers) and investments in listed equity securities and listed debt securities (other than those measured at amortised cost) totaling approximately HK$9,138.3 million (31 December 2019: HK$7,409.1 million). The Group’s current ratio, calculated based on current assets of approximately HK$12,455.9 million (31 December 2019: HK$11,032.1 million) over current liabilities of approximately HK$10,812.3 million (31 December 2019: HK$9,301.1 million), was at a ratio of approximately 1.2 as at 30 June 2020 (31 December 2019: 1.2).

The Group’s finance costs for the Reporting Period mainly represented the effective interest on notes payable of approximately HK$1.5 million (Previous Period: HK$4.1 million), interest on loans from an intermediate holding company of approximately HK$119.0 million (Previous Period: HK$131.9 million), interest on financial assets sold under repurchase agreements of approximately HK$40.0 million (Previous Period: HK$26.1 million) and interest on lease liabilities of approximately HK$2.7 million (Previous Period: HK$3.0 million).

– 25 –

As at 30 June 2020, the Group’s indebtedness comprised loans from an intermediate holding company, notes payable and financial assets sold under repurchase agreements of approximately HK$9,930.9 million (31 December 2019: HK$8,887.1 million). The loans from an intermediate holding company of approximately HK$6,247.6 million (31 December 2019: HK$5,656.7 million) were denominated in Hong Kong dollars and United States dollars and borne interests at 4% per annum and were repayable within one year. The notes payable in the aggregate principal amount of HK$50 million (31 December 2019: HK$50 million) was denominated in Hong Kong dollars, due on the seventh anniversary from the respective issue dates of the notes, and borne interests at 5% per annum.

The Group’s gearing ratio, calculated on the basis of total indebtedness divided by the sum of total indebtedness and equity attributable to the Company’s owners, was approximately 82.5% (31 December 2019: 80.0%).

With the amount of liquid assets on hand, the management is of the view that the Group has sufficient financial resources to meet its ongoing operational requirements.

PLEDGE OF ASSETS

Except as otherwise disclosed, as at 30 June 2020, the Group had no other pledge or charge on assets (31 December 2019: Nil).

CONTINGENT LIABILITY

As at 30 June 2020, the Group had no significant contingent liability (31 December 2019: Nil).

CAPITAL COMMITMENT

As at 30 June 2020, the Group had no significant capital commitment (31 December 2019: Nil).

SIGNIFICANT INVESTMENTS HELD

For the Reporting Period, the Group did not hold any single significant investment which accounted for over 5% of the total assets.

MATERIAL ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES AND ASSOCIATES

For the Reporting Period, the Group had no material acquisitions or disposals of subsidiaries and associates.

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FOREIGN CURRENCY RISK MANAGEMENT

The Group’s revenue is mainly denominated in United States dollars and Hong Kong dollars while its expenditure is mainly denominated in Hong Kong dollars. The Group’s foreign exchange exposure is mainly from the translation of assets and liabilities denominated in United States dollars. As Hong Kong dollars are pegged to United States dollars, the Directors believe that the Group’s foreign exchange exposure is manageable and the Group will closely monitor this risk exposure from time to time.

HUMAN RESOURCES AND REMUNERATION POLICY

As at 30 June 2020, the Group had 69 (30 June 2019: about 80) employees including Directors. For the Reporting Period, total staff costs, including Directors’ remuneration, was approximately HK$33.6 million (Previous Period: HK$45.7 million). Remuneration packages for employees and Directors are structured by reference to market terms and individual competence, performance and experience. Benefits plans maintained by the Group include mandatory provident fund scheme, subsidised training programme, share option scheme, share award scheme and discretionary bonuses.

PROSPECTS AND DEVELOPMENT STRATEGIES

Prospect

With COVID-19 hitting the global and local economic activities hard, Hong Kong’s overall economy was very weak in the first half of 2020. Looking ahead, the COVID-19 pandemic will continue to be a major threat to the global economic outlook. While the US and Eurozone economies appear to have bottomed out, the path to recovery is likely to be slow and bumpy until an effective vaccine or cure is available. Coupled with evolving Sino-US relations and rising geopolitical tensions, the challenging external environment is expected to constrain Hong Kong’s economic performance in the short term.

Although the Group has achieved satisfactory results during the Reporting Period and is optimistic about the long-term sustainable economic growth in Hong Kong and Mainland China, and that the Group has committed to further develop its business, it should continue to act cautiously and keep an eye on the possible risks in the second half of the year. For these reasons, the Group will adopt the following development strategies.

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Development strategy

The Company will further develop bond issuance and underwriting business, corporate financing and advisory services and asset management business by developing investment and financing business, so as to continue to improve its profitability. Specifically, the Group will adopt the following measures:

• (1) improving the structure of investment and financing businesses. The Company will continue to optimise the customer selection strategy according to the changes in the economic and market environment, with a focus on developing high-quality customers from the industries with good prospects;

• (2) further developing bond underwriting and issuance business. The Company will continue to develop offshore bond financing channels for high-quality customers, including continuing to utilise customer resources of China Minsheng Banking Corp., Ltd. (“ China Minsheng ” together with its subsidiaries excluding the members of the Group, collectively as “ China Minsheng Group ”);

• (3) further developing corporate finance and advisory services. The Company will continue to expand customer base by leveraging on China Minsheng’s customer sources and identifying customers who may need cross-border listing and advisory services;

• (4) promoting the asset management business by providing innovative products and services;

• (5) strengthening the development of the Group. The Group will pay close attention to any potential investment targets or China Minsheng’s partners that can create synergies with the Group. The Company intends to promote development by establishing close relationships with such targets or partners; and

• (6) enhancing risk management. To continuously improve risk management and internal control, the Group will select projects carefully, monitor projects regularly, assess project risks frequently, take prompt action to respond to any environmental changes and improve its internal control procedures.

In addition, the Group will continue to adhere to the upgraded basic strategy of “one body and two wings” with “one body” optimised, which is to further optimise the investment and financing business products and customer structure; and “two wings” emphasized, which is to fully commit to improving the revenue and market position of investment banking and asset management businesses. In addition, the Group focused on both business development and compliance risk control, advocating the improvement of the three abilities of all staff: compliance and risk control ability, marketing and communication ability, investment and trading ability, while emphasizing the adherence to the principle of “three bottom lines”: legality and compliance bottom line, risk control bottom line and company interest bottom line, in order to comprehensively improve the sustainability and market image of the Company.

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EVENTS AFTER THE REPORTING PERIOD

As disclosed in the Company’s announcement dated 27 July 2020 and the circular dated 3 August 2020, the Company proposed to revise the annual caps of the asset management services, investment advisory services and ancillary services provided by the Group to China Minsheng Group, and the distribution services to be provided by China Minsheng Group to the Group pursuant to the service agreement dated 23 July 2019 for the years ending 31 December 2020 and 2021.

The proposed revised annual caps were approved by the independent shareholders of the Company at the special general meeting held on 26 August 2020.

RISK MANAGEMENT CAPABILITIES

The Board recognises risk management as one of the key elements to the success of the Company and endeavours to improve risk management system to align with its business development strategically. The Group takes a pragmatic approach to manage different risks including credit risks, market risks, operation risks, legal and compliance risk, reputation, liquidity, IT and country risk. As at the date of this announcement, the Group has improved various risk management policies and procedures covering different business sectors. The Group has also established centralised internal control and compliance management system to effectively monitor the Group’s operation and dealings. The Group will continue to enhance the risk management practices and internal control system and adopt a stringent governance framework with reference to the best practices in the market.

CORPORATE GOVERNANCE

The Company has complied with all the applicable provisions of the Corporate Governance Code (the “ CG Code ”) as set out in Appendix 14 to the Listing Rules throughout the Reporting Period except for the following deviation with reasons as explained:

Appointment of Directors

Code Provision A.4.1

Under the code provision A.4.1, non-executive directors should be appointed for a specific term and subject to re-election.

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Deviation

All the non-executive Directors were not appointed for a specific term. Notwithstanding such deviation, all Directors are subject to the retirement by rotation according to the provisions of the bye-laws of the Company. As such, the Company considers that sufficient measures have been taken to ensure that the Company’s corporate governance practices are no less exacting than those in the CG Code.

Attendance of the Annual General Meeting

Code Provision E.1.2

Code provision E.1.2 stipulates that the chairman of the Board should invite for the chairmen of the audit, remuneration and nomination committees (as appropriate) or in the absence of the chairmen of such committees, another member of the committee or failing this his duly appointed delegate, to be available to answer questions at the annual general meeting of the Company.

Deviation

The chairmen and members of the audit committee, the nomination committee and the remuneration committee were unable to attend the annual general meeting of the Company held on 30 June 2020 (the “ 2019 AGM ”) due to their other business engagement. However, the chairman of the Board had chaired the 2019 AGM and answered questions from the shareholders of the Company. The 2019 AGM has provided a channel for communication between the Board and the shareholders.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS (THE “MODEL CODE”)

The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules as its own code of conduct regarding securities transactions by the Directors. In response to specific enquiry made by the Company, all Directors confirmed that they have complied with the required standards as set out in the Model Code throughout the Reporting Period.

– 30 –

AUDIT COMMITTEE

The unaudited condensed consolidated financial statements of the Company for the Reporting Period have been reviewed by the audit committee of the Company and the Company’s independent auditor, PricewaterhouseCoopers, in accordance with Hong Kong Standard on Review Engagements 2410 “Review of interim financial information performed by the independent auditor of the entity” issued by the Hong Kong Institute of Certified Public Accountants. The independent auditor, on the basis of their review, concluded that nothing has come to their attention that causes them to believe that the unaudited condensed consolidated financial statements are not prepared, in all material aspects, in accordance with Hong Kong Accounting Standard 34 “Interim Financial Reporting”.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

The Board considers that the redemption of shares could increase the net asset value and/ or earnings per share, so the Company repurchased a total of 18,970,000 shares on the Stock Exchange, with the total consideration of approximately HK$2.6 million for the six months ended 30 June 2020. As at the date of this announcement, all repurchased shares have been cancelled.

Details of repurchase are as follow:

Month of Repurchase March 2020 April 2020 May 2020 June 2020 Total	Total shares repurchased 1,760,000 8,560,000 5,020,000 3,630,000 18,970,000	Highest price paid per share (HK$) 0.138 0.145 0.145 0.170 –	Lowest price paid per share (HK$) 0.127 0.116 0.113 0.164 –	Total consideration paid (HK$’000) 233 1,131 655 612 2,631

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Save as disclosed above, during the Reporting Period, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company’s listed securities.

By order of the Board CMBC Capital Holdings Limited Li Jinze Chairman

Hong Kong, 26 August 2020

As at the date of this announcement, the executive Directors are Mr. Li Jinze, Mr. Ding Zhisuo and Mr. Ng Hoi Kam; the non-executive Directors are Mr. Ren Hailong and Mr. Liao Zhaohui; and the independent non-executive Directors are Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua.

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