XD Inc. — Interim / Quarterly Report 2021

Oct 29, 2021

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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THIRD QUARTERLY REPORT OF 2021

IMPORTANT NOTICE:

The board of directors, the supervisory committee and directors, supervisors and senior management of the Company guarantee that the contents of this quarterly report are true, accurate and complete, without any false representations, misleading statements or material omissions, and assume several and joint responsibility in respect thereof.

The legal representative, the chief accountant and the head of the accounting department (accounting officer) of the Company warrant the truthfulness, accuracy and completeness of the financial statements contained in this quarterly report.

Whether this third quarterly report of the Company has been audited

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I. MAJOR FINANCIAL DATA

(I) Key accounting figures and financial indicators

Unit: RMB’000

				For the	period
			Increase/	from the beginning		Increase/
		decrease over the		of the year to		decrease over the
	For the	corresponding		the end	of the	corresponding
Item	Reporting Period	period last year		Reporting Period		period last year
			(%)			(%)
Revenue	9,094,279		29.95	31,764,218		77.20
Net profit attributable to
shareholders of the Company	182,680		-26.63	2,879,721		677.61
Net profit attributable to
shareholders of the Company
after non-recurring items	181,930		-26.05	3,016,412		752.52
Net cash flow from operating
activities	N/A		N/A	1,991,154		310.05
Basic earnings per share (RMB
per share)	0.020		-28.57		0.323	669.05
Diluted earnings per share (RMB
per share)	0.020		-28.57		0.323	669.05
		Decreased by				Increased by
Weighted average return on net		0.47 percentage				11.49 percentage
assets (%)	0.80		point		13.38	points
	At the end of the		At the end of the
	Reporting Period		previous year		Increase/decrease
						(%)
Total assets	41,614,315			39,949,856		4.17
Owners’ equity attributable
to shareholders of the
Company	22,991,006			20,038,467		14.73

Note: The “Reporting Period” refers to the three months from 1 June 2021 to 30 September 2021.

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(II) Non-recurring items and amounts

Unit: RMB’000

Item Government grants included in current profit or loss, other than those closely related to the normal operations of the Company and in compliance with national policies and regulations and conferred on the standard quota or quantity basis Capital occupancy fee from non-financial enterprises recognized through profit or loss Other non-operating income and expenses other than the above items Total	Amount for the Reporting Period 1,231 102 -583 750	Amount for the period from the beginning of the year to the end of the Reporting Period 29,380 1,102 -167,173 -136,691

Explanation on defining any non-recurring items listed under the Explanatory Announcement No. 1 on Information Disclosure by Companies Offering Securities to the Public – Non-recurring Gains/Losses as recurring items

Applicable ✓ Not applicable

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(III) Changes in key accounting figures and financial indicators and the reasons thereof

	✓	Applicable		Not applicable	Not applicable
Item				Change	Reasons
				(%)
Revenue				77.20	Mainly due to the increase in the
						sales volume and selling price of
						commodity billets.
Net		profit attributable		677.61	Mainly due to the increase in
	to shareholders of					sales volume and selling price
	the Company					of commodity billets and the
						Company’s efforts to reduce costs
						and increase efficiency through
						conducting comprehensive
						benchmarking and identify areas
						for improvement.
Net		profit attributable		752.52	Mainly due to the increase in
	to shareholders of					sales volume and selling price
	the Company after					of commodity billets and the
	non-recurring items					Company’s efforts to reduce costs
						and increase efficiency through
						conducting comprehensive
						benchmarking and identify areas
						for improvement.
Net		cash flow from		310.05	Mainly due to the increase in
	operating activities					sales volume and selling price
						of commodity billets and the
						Company’s efforts to reduce costs
						and increase efficiency through
						conducting comprehensive
						benchmarking and identify areas
						for improvement, as well as the
						increase in payment by bills.
Basic earnings per share				669.05	Mainly due to the increase in
	(RMB per share)				profits.
Diluted earnings				669.05	Mainly due to the increase in
	per share				profits.
	(RMB per share)

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II. INFORMATION ON SHAREHOLDERS

• (I) Total number of ordinary shareholders, total number of preferred shareholders with restored voting rights and shareholdings of the top ten shareholders

Unit: shares

Total number of ordinary 191,443 Total number of preferred Nil shareholders as at the end of the shareholders with restored Reporting Period voting rights (if any) as at the end of the Reporting Period

Shareholdings of top 10 shareholders

				Number of
				shares held	Pledged, tagged or frozen
	Type of	Number of	Shareholding	with trading	Share
Name of shareholder	shareholder	shares held	percentage	restrictions	status	Number
			(%)
Chongqing Changshou Iron &	Domestic non-	2,096,981,600	23.51	0	Nil	0
Steel Company Limited	state-owned
	legal person
HKSCC Nominees Limited	Foreign legal	532,238,221	5.97	0	Unknown	–
	person
Chongqing Qianxin Group	State-owned	427,195,760	4.79	0	Pledged	427,190,070
Co., Ltd.	legal person
Chongqing Rural Commercial	State-owned	289,268,939	3.24	0	Nil	0
Bank Co., Ltd.	legal person
Chongqing Guochuang	State-owned	278,288,059	3.12	0	Nil	0
Investment and Management legal person
Co., Ltd.
Bank of Chongqing Co., Ltd.	State-owned	226,042,920	2.53	0	Nil	0
	legal person
Industrial Bank Co., Ltd.	Unknown	219,633,096	2.46	0	Nil	0
Chongqing Branch
Agricultural Bank of China	State-owned	216,403,628	2.43	0	Nil	0
Limited Chongqing Branch	legal person
China Shipbuilding Industry	State-owned	211,461,370	2.37	0	Nil	0
Complete Equipment	legal person
Logistics Co., Ltd.
Bank of Communications Co.,	Unknown	140,760,305	1.58	0	Nil	0
Ltd. Chongqing Branch

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Shareholdings of the top 10 holders of shares not subject to trading moratorium

	Number of
	shares held not
	subject to trading	Class and number	of shares
Name of shareholder	moratorium	Class	Number
Chongqing Changshou Iron &	2,096,981,600	RMB-denominated	2,096,981,600
Steel Company Limited		ordinary shares
HKSCC Nominees Limited	532,238,221	Overseas listed	532,238,221
		foreign shares
Chongqing Qianxin Group Co., Ltd.	427,195,760	RMB-denominated	427,195,760
		ordinary shares
Chongqing Rural Commercial Bank Co., Ltd.	289,268,939	RMB-denominated	289,268,939
		ordinary shares
Chongqing Guochuang Investment and	278,288,059	RMB-denominated	278,288,059
Management Co., Ltd.		ordinary shares
Bank of Chongqing Co., Ltd.	226,042,920	RMB-denominated	226,042,920
		ordinary shares
Industrial Bank Co., Ltd. Chongqing Branch	219,633,096	RMB-denominated	219,633,096
		ordinary shares
Agricultural Bank of China Limited	216,403,628	RMB-denominated	216,403,628
Chongqing Branch		ordinary shares
China Shipbuilding Industry Complete	211,461,370	RMB-denominated	211,461,370
Equipment Logistics Co., Ltd.		ordinary shares
Bank of Communications Co., Ltd.	140,760,305	RMB-denominated	140,760,305
Chongqing Branch		ordinary shares

Description of connected relationship and acting in concert among the above shareholders

Chongqing Changshou Iron & Steel Company Limited is the controlling shareholder of the Company and it is not connected with any of the other 9 shareholders, nor a party acting in concert (as defined under the Administrative Measures for Management of Information Disclosure of Changes in Shareholdings of Shareholders of Listed Companies) with any of them. The Company is also not aware of whether there is any connected relationship among the other 9 shareholders or whether they are parties acting in concert.

Description of involvement in securities Nil margin financing, short selling and refinancing (if any) by top 10 shareholders and top 10 holders of shares not subject to trading moratorium

III. OTHER REMINDERS

Other important information about the Company’s operations during the Reporting Period that should be brought to the attention of investors

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IV. QUARTERLY FINANCIAL STATEMENTS

(I) Type of audit opinion

Applicable ✓ Not applicable

(II) Financial statements

Consolidated Balance Sheet As at 30 September 2021

Prepared by: Chongqing Iron & Steel Company Limited

	Unit: RMB’000 Audit type: unaudited	Unit: RMB’000 Audit type: unaudited
Item	30 September 2021	31 December 2020
Current assets:
Cash and bank balances	4,426,763	4,943,231
Balances with clearing companies
Placements with banks and
other financial institutions
Held-for-trading financial assets	550,000
Derivative financial assets
Bills receivable
Trade receivables	116,733	35,041
Receivables financing	1,726,884	2,068,546
Prepayments	839,063	534,516
Premiums receivable
Accounts receivable from reinsurers
Deposits receivable from reinsurers
Other receivables	8,355	18,013
Including: Interests receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories	4,381,077	5,054,908
Contract assets
Held-for-sale assets
Non-current assets due within
one year
Other current assets	424,430	394,153
Total current assets	12,473,305	13,048,408

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30 September 2021

31 December 2020

Item

Non-current assets: Loans and advances granted Debt investments Other debt investments Long-term receivables Long-term equity investments Other equity instrument investments Other non-current financial assets Investment properties Fixed assets Construction in progress Biological assets for production Fuel assets Right-of-use assets Intangible assets Development expenses Goodwill Long-term deferred expenditures Deferred income tax assets Other non-current assets Total non-current assets Total assets	51,237 5,000 20,189,207 4,973,695 550,713 2,396,470 319,057 379,379 131,468 144,784 29,141,010 41,614,315	79,494 5,000 16,630,788 2,844,665 4,095,211 2,394,593 295,407 299,730 131,468 125,092
		26,901,448
		39,949,856

– 8 –

30 September 2021

31 December 2020

Item

Current liabilities: Short-term borrowings Borrowings from central bank Placements from banks and other financial institutions Held-for-trading financial liabilities Derivative financial liabilities Bills payable Trade payables Advances from customers Contract liabilities Disposal of repurchased financial assets Deposit taking and deposit in interbank market Customer deposits for trading in securities Customer deposits for underwriting Employee benefits payable Taxes payable Other payables Including: Interest payable Dividends payable Handling charges and commissions payable Payable to reinsurers Held-for-sale liabilities Non-current liabilities due within one year Other current liabilities Total current liabilities	2,432,197 2,077,827 2,750,818 1,067,612 94,739 36,299 3,353,611 1,535,323 138,790 13,487,216	700,788 1,272,291 2,652,728 2,554,165 283,969 9,177 1,567,618 4,056,471 332,041
		13,429,248

– 9 –

30 September 2021 31 December 2020

Item

Non-current liabilities: Deposits for insurance contracts Long-term borrowings Debentures payable Including: Preference shares Perpetual bonds Lease liabilities Long-term payables Long-term employee benefits payable Accrued liabilities Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities	1,523,000 497,267 439,650 2,493,034 136,191 39,953 6,998 5,136,093 18,623,309	450,000 995,150 3,022,612 1,352,264 179,557 35,902 1,176 445,480
		6,482,141
		19,911,389

– 10 –

30 September 2021

31 December 2020

Item

Owners’ equity (or shareholders’	Owners’ equity (or shareholders’
equity):
Paid-in capital (or share capital)		8,918,602		8,918,602
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve		19,282,147		19,282,147
Less: Treasury shares				65,940
Other comprehensive income
Special reserve		29,062		22,184
Surplus reserve		606,991		606,991
General risk provision
Undistributed profit		-5,845,796		-8,725,517
Total owners’ equity (or shareholders’
equity) attributable to the parent
company		22,991,006		20,038,467
Minority interests
Total owners’ equity (or
shareholders’ equity)		22,991,006		20,038,467
Total liabilities and owners’ equity
(or shareholders’ equity)		41,614,315		39,949,856
Legal representative:	Chief accountant:		Head of the
		accounting department:
Zhang Wenxue	Zou An		Lei Xiaodan

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Consolidated Income Statement

January to September 2021

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

		First three	First three
		quarters of 2021	quarters of 2020
		(January-	(January-
Item		September)	September)
I.	Total revenue from operations	31,764,218	17,925,894
	Including: Revenue from operations	31,764,218	17,925,894
	Interest income
	Premiums earned
	Income from fee and
	commission
II.	Total operating costs	28,758,515	17,578,660
	Including: Operating costs	27,768,610	16,843,438
	Interest expenses
	Fee and commission expenses
	Surrender value
	Net expenditure for
	compensation payments
	Net drawing on deposits for
	insurance contracts
	Expenditures for insurance
	policy dividend
	Reinsurance costs
	Taxes and surcharges	124,747	135,988
	Selling expenses	64,387	87,687
	Administrative expenses	375,378	366,504
	R&D expenses	117,372
	Finance cost	308,021	145,043
	Including: Interest expenses	378,512	183,935
	Interest income	75,764	45,099

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Item

First three First three quarters of 2021 quarters of 2020 (January- (January- September) September) Add: Other income 40,264 15,639 Gains from investment (loss is represented by “-”) 310 6,791 Including: Ga ins from investment in associates and joint ventures Gains from derecognition of financial assets measured at amortized cost Exchange gain (loss is represented by “-”) Income on hedging the net exposure (loss is represented by “-”) Gain from change in fair value (loss is represented by “-”) Credit impairment loss (loss is represented by “-”) Asset impairment loss (loss is represented by “-”) Gain on disposal of assets (loss is represented by “-”)

– 13 –

			First three	First three
			quarters of 2021	quarters of 2020
			(January-	(January-
Item			September)	September)
III.	Pr ofit from operations (loss is
	represented by “-”)		3,046,277	369,664
	Add: Non-operating income		1,511	1,603
	Less: Non-operating expenses		168,684	820
IV.	To tal profit (total loss is represented
	by “-”)		2,879,104	370,447
	Less: Income tax expense		-617	115
V.	Ne t	profit (net loss is represented
	by “-”)		2,879,721	370,332
	(I)	Classified on a going concern basis
		1. Ne t profit from continuing
		operations (net loss is
		represented by “-”)	2,879,721	370,332
		2. Ne t profit from discontinued
		operations (net loss is
		represented by “-”)
	(II)	Cl assified according to the
		ownership
		1. Net profit attributable to
		owners of the parent company
		(net loss is represented by
		“-”)	2,879,721	370,332
		2. Pr ofit or loss attributable to
		non-controlling interests
		(net loss is represented by
		“-”)

– 14 –

Item

First three First three quarters of 2021 quarters of 2020 (January- (January- September) September)

VI. Ot her comprehensive income (net of tax)

• (I) Ot her comprehensive income (net of tax) attributable to owners of the parent company

• Ot her comprehensive income that will not be reclassified to profit or loss

• (1) Ch anges in re-measurement of defined benefit plan

• (2) Ot her comprehensive income accounted for using equity method that will not be reclassified to profit or loss

• (3) Ch ange in fair value of other equity instrument investments

• (4) Ch ange in fair value of the enterprise’s own credit risk

• Ot her comprehensive income that will be reclassified to profit or loss

• (1) Ot her comprehensive income accounted for using equity method which will be reclassified to profit and loss

• (2) Ch ange in fair value of other debt investments

• (3) Am ount of financial assets reclassified to other comprehensive income

– 15 –

				First three	First	three
			quarters of 2021		quarters of	2020
				(January-	(January-
Item				September)	September)
		(4) Pr ovision for credit
		impairment of other debt
		investments
		(5) He dging reserve for cash
		flows
		(6) Ex change difference	on
		translation of foreign
		currency financial
		statements
		(7) Others
	(II)	Ot her comprehensive income
		(net of tax) attributable to non-
		controlling interests
VII.	Total comprehensive income			2,879,721	370,332
	(I)	To tal comprehensive income
		attributable to owners of the
		parent company		2,879,721	370,332
	(II)	To tal comprehensive income
		attributable to non-controlling
		interests
VIII.	Earnings per share:
	(I)	Ba sic earnings per share
		(RMB per share)		0.323		0.042
	(II)	Di luted earnings per share
		(RMB per share)		0.323		0.042
Legal representative: Chief accountant:				Head of the
				accounting department:
	Zhang Wenxue		Zou An	Lei	Xiaodan

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Consolidated Statement of Cash Flows

January to September 2021

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

Item I. Cash flows from operating activities: Cash received from sale of goods and rendering of services Net increase in customer and interbank deposits Net increase in borrowings from central bank Net increase in placements from other financial institutions Cash received from premiums under original insurance contract Net cash received from reinsurance business Net increase in deposits of policy holders and investment Cash received from interest, fees and commissions Net increase in placements from banks and other financial institutions Net increase in capital from repurchase business Net cash received from trading in securities Receipts of taxes refunds Other cash received relating to operating activities Sub-total of cash inflows from operating activities	First three quarters of 2021 (January- September) 29,286,413 38,356 121,058 29,445,827	First three quarters of 2020 (January- September) 16,512,712 7,247 375,268 16,895,227

– 17 –

Item Cash paid for goods purchased and service received Net increase in customer loans and advances Net increase in deposit in central bank and interbank deposit Cash paid for compensation payments under original insurance contracts Net increase in placements with banks and other financial institutions Cash paid for interest, fee and commission Cash paid for insurance policy dividend Cash paid to and on behalf of employees Cash paid for all types of taxes Other cash paid relating to operating activities Sub-total of cash outflows from operating activities Net cash flows from operating activities	First three quarters of 2021 (January- September) 25,949,584 1,142,787 198,421 163,881 27,454,673 1,991,154	First three quarters of 2020 (January- September) 14,770,293 900,977 495,200 243,170 16,409,640 485,587

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Item II. Cash flows from investing activities: Cash received from disposal of investments Cash received from return on investments Net cash received from disposal of fixed assets, intangible assets and other long-term assets Net cash received from disposal of subsidiaries and other operating entities Other cash received relating to investing activities Sub-total of cash inflows from investing activities Cash paid for acquisition and construction of fixed assets, intangible assets and other long-term assets Cash paid for investments Net increase in pledged loans Net cash paid for acquisition of subsidiaries and other operating entities Other cash paid relating to investing activities Sub-total of cash outflows from investing activities Net cash flows from investing activities	First three quarters of 2021 (January- September) 310 310 3,086,962 550,000 114,449 3,751,411 -3,751,101	First three quarters of 2020 (January- September) 433,000 6,791 439,791 187,391 33,000 888,906 1,109,297 -669,506

– 19 –

Item III. Cash flows from financing activities: Cash received from investments Including: Pr oceeds received by subsidiaries from minority shareholders’ investment Cash received from borrowings Other cash received relating to financing activities Sub-total of cash inflows from financing activities Cash repayments of borrowings Cash paid for distribution of dividends or profits, and for interest expenses Including: Di vidend and profit paid by subsidiaries to minority shareholders Other cash paid relating to financing activities Sub-total of cash outflows from financing activities Net cash flows from financing activities	First three quarters of 2021 (January- September) 3,848,065 1,892,392 5,740,457 4,272,838 244,524 87,903 4,605,265 1,135,192	First three quarters of 2020 (January- September) 3,093,050 3,093,050 1,310,998 147,626 10,541 1,469,165 1,623,885

– 20 –

		First three	First three
	quarters of 2021		quarters of 2020
		(January-	(January-
Item		September)	September)
IV.	Ef fect of fluctuations in exchange rates
	on cash and cash equivalents	9,595
V.	Ne t increase in cash and cash
	equivalents	-615,160	1,439,966
	Add: Ca sh and cash equivalents at the
	beginning of the period	4,698,099	1,601,412
VI.	Ba lance of cash and cash equivalents
	at the end of the period	4,082,939	3,041,378
Legal representative: Chief accountant:		Head of the
		accounting department:
	Zhang Wenxue Zou An	Lei	Xiaodan

(III) Adjustments to relevant items in the financial statements at the beginning of the year as a result of initial application of the new lease accounting standard from 2021

Applicable ✓ Not applicable

By order of the Board Chongqing Iron & Steel Company Limited Zou An Secretary to the Board

Chongqing, the PRC, 29 October 2021

As at the date of this announcement, the Directors of the Company are: Mr. Zhang Wenxue (Executive Director), Mr. Xie Zhixiong (Executive Director), Mr. Zou An (Executive Director), Mr. Song De An (Non-executive Director), Mr. Lai Xiaomin (Non-executive Director), Mr. Zhou Ping (Non-executive Director), Mr. Sheng Xuejun (Independent Non-executive Director), Mr. Zhang Jinruo (Independent Non-executive Director) and Mr. Guo Jiebin (Independent Non-executive Director).

– 21 –