XD Inc. — Interim / Quarterly Report 2021

Aug 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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UNAUDITED INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2021

SECTION I IMPORTANT NOTICE

• 1.1 This summary of the Interim Report is extracted from the full text of the Interim Report. To fully understand the operating results, financial position and future development plans of Chongqing Iron & Steel Company Limited (the “ Company ”), investors are advised to read carefully the full text of the Interim Report which has also been published on the websites of the Shanghai Stock Exchange（http://www.sse.com.cn）and the Stock Exchange of Hong Kong Limited（https://www.hkexnews.hk）or media designated by the CSRC for details.

• 1.2 The board of directors, the supervisory committee and directors, supervisors and senior executives of the Company guarantee that the contents of the Interim Report are true, accurate and complete, without false representations, misleading statements or material omissions, and assume several and joint responsibility in respect thereof.

• 1.3 All directors of the Company attended the Board meeting.

• 1.4 The Interim Report is unaudited.

• 1.5 The profit distribution proposal or proposal to transfer capital reserve to share capital for the reporting period as passed by the Board resolution

Nil

– 1 –

SECTION II BASIC INFORMATION ON THE COMPANY

2.1 Company Information

Stock Profile

				Stock
				abbreviation
	Place of	Abbreviated		before
Class	listing	name	Stock code	adjustment
A shares	Shanghai Stock	Chongqing Iron &	601005	N/A
	Exchange	Steel
H shares	The Stock	Chongqing Iron	01053	N/A
	Exchange of
	Hong Kong
	Limited
Contact			Securities affairs
information	Secretary to the Board		representative
Name	Zou An		Peng Guoju
Tel	86–23–6898 3318		86–23–6898 3482
Correspondence No. 2 Jiangnan Avenue,			No. 2 Jiangnan	Avenue,
address	Jiangnan Street,		Jiangnan Street,
	Changshou	District,	Changshou District,
	Chongqing		Chongqing
E-mail	ir_601005@baowugroup.com		ir_601005@baowugroup.com

– 2 –

2.2 Major financial data

Unit: RMB’000

			Change from
			the end of
	At the end		last year to
	of the		the end of
	Reporting	At the end	the Reporting
	Period	of last year	Period
			(%)
Total assets	45,151,053	39,949,856	13.02
Net assets attributable to
shareholders of the Company	22,743,007	20,038,467	13.50
	Reporting	Corresponding	Year-on-year
	Period	period last year	change
			(%)
Revenue	22,669,939	10,927,367	107.46
Net profit attributable to
shareholders of the Company	2,697,041	121,355	2,122.44
Net profit attributable to
shareholders of the Company
after non-recurring items	2,834,482	107,793	2,529.56
Net cash flow from operating
activities	1,546,388	82,586	1,772.46
			Increased by
			11.99
Weighted average return on net			percentage
assets (%)	12.61	0.62	points
Basic earnings per share
(RMB per share)	0.30	0.01	2,900.00
Diluted earnings per share
(RMB per share)	0.30	0.01	2,900.00

– 3 –

2.3 Shareholdings of top ten shareholders

Unit: shares

Total number of shareholders as of the end of the reporting period (account)

194,546

Total number of preferred shareholders with restored voting rights as of the end of the reporting period (account) 0

Shareholdings of top 10 shareholders

				Number of
				shares held
Name of		Shareholding	Number of	with trading		Number of shares
shareholder	Type of shareholder	percentage	shares held	restrictions		pledged or frozen
		(%)
Chongqing Changshou Iron & Steel	Domestic nonstate-
Company Limited	owned legal person	23.51	2,096,981,600	0	Nil			0
HKSCC NOMINEES LIMITED	Foreign legal person	5.97	532,277,821	0	Unknown			–
Chongqing Qianxin Group Co., Ltd.	State-owned legal
	person	4.79	427,195,760	0	Pledged		427,190,070
Chongqing Rural Commercial Bank	State-owned legal
Co., Ltd.	person	3.24	289,268,939	0	Nil			0
Chongqing Guochuang Investment and	State-owned legal
Management Co., Ltd.	person	3.12	278,288,059	0	Nil			0
Bank of Chongqing Co., Ltd.	State-owned legal
	person	2.53	226,042,920	0	Nil			0
Industrial Bank Co., Ltd. Chongqing
Branch	Unknown	2.46	219,633,096	0	Nil			0
Agricultural Bank of China Limited	State-owned legal
Chongqing Branch	person	2.43	216,403,628	0	Nil			0
China Shipbuilding Industry Complete	State-owned legal
Equipment Logistics Co., Ltd.	person	2.37	211,461,370	0	Nil			0
Chongqing Huanya Construction	State-owned legal
Materials Company Limited	person	2.35	209,573,120	0	Pledged		100,000,000
Description on the associated relationship	Chongqing Changshou	Iron & Steel Company Limited is the controlling shareholder of the Company
or acts in concert among the above	and has no associated relationship with the other 9 shareholders and they are not parties						acting in concert
shareholders	as stipulated in the Administrative Measures for Management of Information Disclosure of Changes in
	Shareholdings of Shareholders of Listed Companies. The Company is also not aware of						whether there is
	any associated relationship among the other 9 shareholders or whether they are parties acting in concert.

Description on the preferred shareholders N/A with restored voting rights and their shareholdings

– 4 –

2.4 Particulars of the total number of preferred shareholders and top ten preferred shareholders as of the end of the reporting period

Applicable ✓[ Not Applicable]

2.5 Changes in controlling shareholder or de facto controller

Applicable ✓[ Not Applicable]

2.6 Existing bonds as at the date of approval of the interim report

✓[ Applicable] Not Applicable

Unit: RMB

		Abbreviated	Abbreviated		Issuance	Issuance		Balance	Interest
Name of bond		name		Stock code	date		Due date	of bonds	rate
									(%)
Chongqing Iron & Steel Company Limited		20 Chongqing		102000390	19 March		19 March	498,984,000	4.64
2020 first tranche of medium-term notes			Iron & Steel			2020	2023
(Type 1)			MTN001A
Chongqing Iron & Steel Company Limited		20 Chongqing		102000391	19 March		19 March	497,569,000	5.13
2020 first tranche of medium-term notes			Iron & Steel			2020	2023
(Type 2)			MTN001B
Indicators reflecting the solvency of				the issuer:
✓	Applicable		Not Applicable
							End of the
							reporting	At the end
Major indicators							period	of last year
Gearing ratio (%)							49.63		49.84
						The reporting		Corresponding
							period	period last year
EBITDA interest coverage			(times)				14.23		5.39

– 5 –

SECTION III SIGNIFICANT EVENTS

• 3.1 The Company shall explain the significant changes in the operation of the Company during the reporting period under the principle of materiality and events that occurred during the reporting period had material impact on the operation of the Company and expected to have a material impact in the future.

Applicable ✓[ Not Applicable]

3.2 Discussion and Analysis of Business Operations

In first half of 2021, the Company seized the favorable opportunity of steel market, closely centered on the mainline of “refining management, minimizing resource consumption, conducting comprehensive benchmarking to identify areas for improvement, and increasing efforts in cost reduction and efficiency enhancement”. The Company proactively and comprehensively identified differences with benchmark enterprises, paid close attention to reducing costs and increasing efficiency, constantly improved the technical and economic indicators, aimed at the market gaps of the purchase and sales, continuously strengthened the purchase system and optimized the marketing model, and therefore achieved steady improvement in production and sales efficiency with continuous improvement in production and operation. In the first half of 2021, the Company produced 4,661,100 tonnes of iron, 5,030,500 tonnes of steel and 4,856,600 tonnes of commodity billet, representing a year-on-year increase of 62.76%, 53.36% and 54.68%, respectively.

In the first half of 2021, the Company achieved a record high in the production of iron in March and the production of steel in May by leveling up and updating the processing equipment, optimizing the model of production and organization and maintaining a stable and efficient rolling process and production of iron and steel; the main technical and economic indicators repeatedly set new records, the dry coking coal proportion, coal powder injection ratio, utilization coefficient, steel and iron material consumption, hot charge ratio, and rolling operation efficiency set new records; 1# and 2# blast furnaces were continuously rewarded the first prize of Baowu Group in the first and second quarters; iron and steel materials consumption indices had continuously ranked first in Baowu Group, and had become a role model in Baowu Group; in May, the hot charging rate of 1,780mm hot-coil production line ranked first in Baowu Group.

In the first half of 2021, the Company’s major technical and economic indicators have seen a significant improvement, all sorts of consumptions significantly decreased, and thus achieving a decrease of RMB979 million in process costs by benchmarking with the industry, within Baowu Group and with excellent private enterprises.

– 6 –

The Company strives to create a high-quality green and smart steel manufacturing enterprise, shaping “Chongqing Iron & Steel to be beautiful and picturesque”, and becoming a leader in the steel industry in Southwest China. The Company continues to improve its competitiveness by focusing on the main philosophy of “refining management, minimizing resource consumption, conducting comprehensive benchmarking to identify areas for improvement, and increasing efforts in cost reduction and efficiency enhancement”. The Company plans to produce 8.50 million tonnes of pig iron, 10 million tonnes of steel and 9.58 million tonnes of commodity billets, and has realized sales volume of 9.58 million tonnes of commodity billets and revenue of RMB34.5 billion (tax exclusive) in the year of 2021. There has been no significant change in the Company’s possible future business development and outlook for the financial year of 2021 since the publication of the Company’s annual report for the year ended 31 December 2020.

3.3 Analysis of Principal Business

(1) Analysis of changes in certain items from financial statements

Unit: RMB’000

		For the
	For the	corresponding
	Reporting	period last
Item	Period	year	Change
			(%)
Revenue	22,669,939	10,927,367	107.46
Cost of sales	19,185,057	10,342,993	85.49
Distribution and selling expenses	42,999	53,355	-19.41
General and administrative expenses	245,709	244,093	0.66
Finance expenses	207,597	90,148	130.28
Research and development expenses	75,591	–	N/A
Net cash flow from operating
activities	1,546,388	82,586	1,772.46
Net cash flow from investing
activities	-1,864,545	251,153	-842.39
Net cash flow from financing
activities	354,050	1,039,510	-65.94

Reasons for change in revenue: The increase in revenue was mainly due to the increase in sales volume and rise in sales price of commodity billet.

Reasons for change in cost of sales: The increase in cost of sales was mainly due to the rise in the prices of raw materials and fuels.

– 7 –

Reasons for change in distribution and selling expenses: The decrease in distribution and selling expenses was mainly due to the decrease in sales transportation fee as a result of the change of sales model of the Company.

Reasons for change in financial expenses: The increase in financial expenses was mainly due to the increase in financing and interest expenses.

Reasons for change in research and development expenses: The Company’s total investment for research and development amounted to RMB622 million in the first half of the year, in which direct input amounting to RMB546 million resulted in product sales.

Reasons for change in net cash flow from operating activities: The increase in net cash flow from operating activities was mainly due to the increase in profits.

Reasons for change in net cash flow from investing activities: The decrease in net cash flow from investing activities was mainly due to the increase in the investment in fixed assets and financial management.

Reasons for change in net cash flow from financing activities: The decrease in net cash flow from financing activities was mainly due to the repayment of borrowings.

(2) Detailed description of major changes in the Company’s type of business, profit structure or profit sources

✓[ Applicable] Not Applicable

In the first half of 2021, the Group realized a total profit of RMB2,697 million, representing a year-on-year increase of 21 times, which was mainly due to the following reasons: the selling price of commodity billet amounted to RMB4,555/tonne, representing a year-on-year increase of 36.05% and resulting in an increase of RMB4,854 million in profit; the sales volume of commodity billet reached 4,754,200 tonnes, representing a year-on-year increase of 51.55%, and achieving an increase of RMB648 million in profit; the increase in prices of raw materials, such as ore, coal, alloy, scrap steel, etc., resulted in a decrease of RMB3,452 million in profit; the Company realized the significant increase in production scale and continuously promoted the cost reduction plan, and thus critical technical and economic indicators such as blast furnace utilization coefficient, fuel consumption of blast furnace and steel consumption in steelmaking improved significantly,

– 8 –

and remarked decrease in consumption of various resources, with a decrease of RMB979 million in process costs; the Group decreased RMB167 million in profit as a result of the provision for carbon emission compliance costs; it eliminated the safety risks from fire and structure and improved the working environment for staff, the Company took measures of special rectification, with a decrease of RMB103 million in profit as a result of the provision for the maintenance fees for special items.

In the first half of 2021, the Group’s revenue from main business amounted to RMB22.410 billion, representing a year-on-year increase of 106.06%. In particular, the income from sales of commodity billet amounted to RMB21.656 billion, representing an increase of RMB11.154 billion as compared with the corresponding period of last year. Firstly, the sales volume of commodity billet was 4.7542 million tonnes, representing a yearon-year increase of 51.55%, resulting in an increase in the sales income of RMB6,300 million; secondly, the average sales price of commodity billet was RMB4,555/tonne, representing a year-on-year increase of 36.05%, resulting in an increase in the sales income of RMB4,854 million.

Composition of revenue from principal operations:

Type Plates Hot rolled coils Bars Wire rods Steel billets Sub-total of steel products Others Total of commodity billets	First half Amount (RMB’000) 6,112,700 11,050,037 134 – 4,493,015 21,655,886 754,398 22,410,284	of 2021 Percentage (%) 27.28 49.30 0.001 – 20.05 96.63 3.37 100.00	First half Amount (RMB’000) 3,456,117 5,313,138 958,786 773,514 – 10,501,555 374,200 10,875,755	of 2020 Percentage (%) 31.78 48.85 8.82 7.11 – 96.56 3.44 100.00	Year-on- year growth (%) 76.87 107.98 -99.99 -100.00 – 106.22 101.60 106.06

– 9 –

Sales prices of commodity billets:

Item Sales price in the first half of 2021 (RMB/tonne) Plates 4,779 Hot rolled coils 4,594 Bars 4,763 Wire rods – Steel billets 4,201 Total of commodity billets 4,555 Sales volumes of commodity billets: Item Sales volume for the first half of 2021 (Ten thousand tonnes) Plates 127.92 Hot rolled coils 240.54 Bars 0.003 Wire rods – Steel billets 106.96 Total of commodity billets 475.42	Sales price in the first half of 2020 (RMB/tonne) 3,508 3,252 3,337 3,356 – 3,348 Sales volume for the first half of 2020 (Ten thousand tonnes) 98.53 163.39 28.73 23.05 – 313.70	Year-on-year growth (%) 36.23 41.27 42.73 – – 36.05 Year-on-year growth (%) 29.83 47.22 -99.99 -100.00 – 51.55	Income increase (RMB’000) 1,625,872 3,228,062 40 – – 4,853,974 Income increase (RMB’000) 1,030,711 2,508,837 -958,692 -773,514 4,493,015 6,300,357

– 10 –

Principal operations by sectors, products and regions:

Unit: RMB’000

Main operations by sectors

		Main operations by sectors	Main operations by sectors
By sectors Iron and steel By products Commodity billets Others By regions Southwest region Other regions Total	Revenue 22,410,284 Revenue 21,655,886 754,398 Revenue 13,592,893 8,817,391 22,410,284	Cost of sales Gross Margin Year-on- year increase/ decrease in revenue Year-on- year increase/ decrease in cost of sales Year-on- year increase/ decrease in gross margin (%) (%) (%) (%) 18,896,675 15.68 106.06 83.16 10.54 Main operations by products Cost of sales Gross Margin Year-on- year increase/ decrease in revenue Year-on- year increase/ decrease in cost of sales Year-on- year increase/ decrease in gross margin (%) (%) (%) (%) 18,191,947 16.00 106.22 83.12 10.60 704,728 6.58 101.60 84.26 8.79 Main operations by regions Cost of sales Gross Margin Year-on- year increase/ decrease in revenue Year-on- year increase/ decrease in cost of sales Year-on- year increase/ decrease in gross margin (%) (%) (%) (%) 11,382,871 16.26 32.21 16.54 11.26 7,513,804 14.78 1,383.45 1,266.55 7.29 18,896,675 15.68 106.06 83.16 10.54
			10.54

– 11 –

SECTION IV OTHER SIGNIFICANT EVENTS

4.1 Compliance with the Corporate Governance Code

To the best knowledge of the Board, the Company had complied with the requirements of the Corporate Governance Code set out in Appendix 14 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) during the reporting period, and no deviation from the Code has been identified.

4.2 Model Code for Securities Transactions by Directors

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (“ Model Code ”) as set out in Appendix 10 to the Listing Rules as the code for trading of the Company’s securities by directors. All directors of the Company confirmed upon specific enquiries that they had complied with the required standards as set out in the Model Code for the six months ended 30 June 2021.

4.3 Interim Dividend

Given the fact that the accumulated undistributed profit of the Company remained negative as of the end of the reporting period, the Company does not recommend distribution of any interim dividend for the six months ended 30 June 2021 according to the Article 250 of the Articles of Association.

4.4 Purchase, Sale or Redemption of Listed Securities of the Company

No purchase, sale and redemption of the listed securities of the Company during the reporting period.

4.5 Major acquisition and disposal of subsidiaries and affiliates

No major acquisition and disposal of subsidiaries and affiliates occurred during the reporting period.

– 12 –

4.6 Audit Committee

The Audit Committee is comprised of three independent non-executive directors and one non-executive director, namely, Mr. Xin Qingquan, Mr. Xu Yixiang, Mr. Wong Chunwa and Mr. Zhou Ping with Mr. Xin Qingquan acting as the chairman of the Audit Committee as at 30 June 2021; as an election was held by the Board of the Company on 12 August 2021, the new members of the Audit Committee are Mr. Zhang Jinruo, Mr. Sheng Xuejun, Mr. Guo Jiebin and Mr. Zhou Ping with Mr. Zhang Jinruo acting as the chairman of the Audit Committee.

The unaudited interim financial report of the Company for the six months ended 30 June 2021 had been reviewed by the members of the Audit Committee before being submitted to the Board for approval.

4.7 Interests or Short Positions

As at 30 June 2021, the interests and short positions (including interests or short positions which they were taken or deemed to have under relevant provisions of the Securities and Futures Ordinance (“ SFO ”)) of the directors, supervisors and senior management members in the shares or underlying shares or debentures of the Company and any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or which were required, pursuant to the Listing Rules and the Model Code, to be notified to the Company and the Stock Exchange, were as follows:

					Percentage	Percentage
					in the share	in the total
	The Company/			Total number	capital of	share capital
	associated		Nature of	of interested	A shares of	of the	Class of
Name	corporations	Capacity	interests	shares held	the Company	Company	shares
				(share)	(%)	(%)
			Beneficial	1,148,000
Tu Deling	The Company	Director	interests	(long position)	0.014	0.003	A share
		Supervisor	Beneficial	299,300
Zhou Yaping	The Company	representing staff	interests	(long position)	0.004	0.003	A share
		Supervisor	Beneficial	176,800
Zhao Wei	The Company	representing staff	interests	(long position)	0.002	0.002	A share
			Beneficial	314,900
Yao Xiaohu	The Company	Senior vice president,	interests	(long position)	0.004	0.004	A share

– 13 –

SECTION V UNAUDITED FINANCIAL STATEMENTS OF THE GROUP FOR THE SIX MONTHS ENDED 30 JUNE 2021 PREPARED IN ACCORDANCE WITH THE PRC GAAP

Consolidated Statement of Financial Position

As at 30 June 2021

Assets Current assets: Cash and bank balances Financial assets held for trading Trade receivables Receivables financing Prepayments Other receivables Inventories Other current assets Total current assets Non-current assets: Long-term equity investments Other equity investments Property, plant and equipment Construction in progress Right-of-use assets Intangible assets Goodwill Long-term deferred expenditures Deferred tax assets Other non-current assets Total non-current assets Total assets	30 June 2021 5,268,501 550,000 8,965 3,605,463 449,740 16,959 6,761,902 98,003 16,759,533 51,236 5,000 16,788,978 4,229,714 3,913,459 2,407,767 353,907 378,952 131,468 131,039 28,391,520 45,151,053	Unit: RMB’000 31 December 2020 4,943,231 – 35,041 2,068,546 534,516 18,013 5,054,908 394,153 13,048,408 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

– 14 –

		30 June		31 December
Liabilities and shareholders’ equity		2021		2020
Current liabilities:
Short-term borrowings		1,979,336		700,788
Notes payable		1,880,137		1,272,291
Trade payables		3,884,132		2,652,728
Contract liabilities		3,322,929		2,554,165
Employee benefits payable		96,137		283,969
Taxes payable		22,902		9,177
Other payables		1,062,032		1,567,618
Non-current liabilities due within one year		2,552,245		4,056,471
Other current liabilities		431,981		332,041
Total current liabilities		15,231,831		13,429,248
Non-current liabilities:
Long-term borrowings		435,000		450,000
Bonds payable		996,553		995,150
Lease liabilities		2,939,683		3,022,612
Long-term payables		2,615,946		1,352,264
Long-term employee benefits payable		150,258		179,557
Deferred income		37,717		35,902
Deferred tax liabilities		1,058		1,176
Other non-current liabilities				445,480
Total non-current liabilities		7,176,215		6,482,141
Total liabilities		22,408,046		19,911,389
Shareholders’ equity：
Share capital		8,918,602		8,918,602
Capital reserves		19,282,147		19,282,147
Less: Treasury shares		65,940		65,940
Special reserves		29,683		22,184
Surplus reserves		606,991		606,991
Accumulated losses		(6,028,476)		(8,725,517)
Total shareholders’ equity		22,743,007		20,038,467
Total liabilities and shareholders’ equity		45,151,053		39,949,856
		Head of the accounting
Legal representative:	Chief accountant:	department:
Zhang Wenxue	Zou An	Lei		Xiaodan

– 15 –

Consolidated Income Statement

For the six months ended 30 June 2021

Unit: RMB’000

Revenue Less: Cost of sales Taxes and surcharges Distribution and selling expenses General and administrative expenses R&D expenses Finance expenses Including: Interest expenses Interest income Add: Other income Investment income Operating profit Add: Non-operating income Less: Non-operating expenses Total profit Less: Income tax expenses/(credit) Net Profit	Six months ended 30 June 2021 22,669,939 19,185,057 77,932 42,999 245,709 75,591 207,597 249,514 47,270 28,149 310 2,863,513 966 167,556 2,696,923 -118 2,697,041	Six months ended 30 June 2020 10,927,367 10,342,993 88,595 53,355 244,093 – 90,148 110,693 23,202 6,515 6,791 121,489 684 747 121,426 71 121,355

– 16 –

Breakdown by continuity of operations Net profit from continuing operations Breakdown by attributable interests Net profit attributable to owners of the parent company Non-controlling interests Other comprehensive income after tax Total comprehensive income Including: Total comprehensive income attributable to owners of the parent company Total comprehensive income attributable to non-controlling interests Earnings per share: Basic earnings per share (RMB/share) Diluted earnings per share (RMB/share)	Six months ended 30 June 2021 2,697,041 2,697,041 2,697,041 2,697,041 0.30 0.30	Six months ended 30 June 2020 121,355 121,355 121,355 121,355 0.01 0.01

– 17 –

Consolidated Statement of Changes in Equity For the six months ended 30 June 2021

Unit: RMB’000

For the six months ended 30 June 2021

I. Clo sing balances of the preceding year and opening balances of the current year II. Changes in the current year (I) Total comprehensive income (II) Shareholders’ contribution and decrease in share capital 1. Amount increased during the year 2. Amount increased during the year (III) Special reserves 1. Amount established during the year 2. Amount utilized during the year III. Closing balance for the year	Share capital 8,918,602 – – – – – 8,918,602	Capital reserves 19,282,147 – – – – – 19,282,147	Less: Treasury shares Other comprehensive income 65,940 – – – – – – – – – – – 65,940	Special reserves 22,184 – – – 15,202 (7,703) 29,683	Surplus reserves Unappropriated profit 606,991 (8,725,517) – 2,697,041 – – – – – – – – 606,991 (6,028,476)	Total shareholders’ equity 20,038,467
						2,697,041 – – 15,202 (7,703)
						22,743,007

– 18 –

For the six months ended 30 June 2020

I. Clo sing balances of the preceding year and opening balances of the current year II. Changes in the current year (I) Total comprehensive income (II) Shareholders’ contribution and decrease in share capital 1. Amount increased during the year 2. Amount increased during the year (III) Special reserves 1. Amount established during the year 2. Amount utilized during the year III. Closing balance for the year	Share capital 8,918,602 – – – – 8,918,602	Capital reserves 19,282,147 – – – – 19,282,147	Less: Treasury shares Other comprehensive income 62,314 – – – 84,334 (80,708) – – – – – 65,940 –	Special reserves 14,573 – – 12,954 (6,502) 21,025	Surplus reserves Unappropriated profit 606,991 (9,363,996) – 121,355 – – – – – – 606,991 (9,242,641)	Total shareholders’ equity 19,396,003
						121,355 (84,334) 80,708 12,954 (6,502)
						19,520,184

– 19 –

Consolidated Statement of Cash Flows

For the six months ended 30 June 2021

I. Cash flows from operating activities: Cash received from sale of goods and rendering of services Receipts of taxes refunds Other cash received relating to operating activities Sub-total of cash inflows from operating activities Cash paid for purchase of goods and services 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 II. Cash flows from investing activities: Cash received from disposal of investments Cash received from return on investments Other cash received relating to investing activities Sub-total of cash inflows from investing activities Cash paid for acquisition of property, plant and equipment, intangible assets and other long-term assets Cash paid for acquisition of investments Net cash payments for acquisition of subsidiaries and other business units Sub-total of cash outflows from investing activities Net cash flows from investing activities	Six months ended 30 June 2021 21,176,838 15,546 73,678 21,266,062 18,673,079 837,948 89,146 119,501 19,719,674 1,546,388 – 310 – 310 1,200,406 550,000 114,449 1,864,855 (1,864,545)	Unit: RMB’000 Six months ended 30 June 2020 9,248,203 – 188,980 9,437,183 8,155,684 650,980 279,479 268,454 9,354,597 82,586 433,000 6,791 – 439,791 145,638 43,000 – 188,638 251,153

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III. Cash flows from financing activities: 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 Other cash paid relating to financing activities Sub-total of cash outflows from financing activities Net cash flows from financing activities IV. Effect of changes in exchange rate on cash and cash equivalents V. Net increase/(decrease) in cash and cash equivalents Add: C ash and cash equivalents at the beginning of the year VI. Cash and cash equivalents at the end of the year	Six months ended 30 June 2021 3,794,465 65,992 3,860,457 3,054,910 172,115 279,382 3,506,407 354,050 9,644 45,537 4,698,090 4,743,627	Six months ended 30 June 2020 2,004,500 – 2,004,500 870,000 85,445 9,545 964,990 1,039,510 – 1,373,249 1,595,323 2,968,572

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STATEMENT OF BALANCE SHEET

As at 30 June 2021

Assets Current assets: Cash and bank balances Financial assets held for trading Trade receivables Receivables financing Prepayments Other receivables Inventories Other current assets Total current assets Non-current assets: Long-term equity investments Other equity investments Property, plant and equipment Construction in progress Right-of-use assets Intangible assets Long-term prepaid expenses Deferred tax assets Other non-current assets Total non-current assets Total assets	30 June 2021 5,267,573 550,000 10,978 3,605,463 568,136 49,625 6,726,689 90,599 16,869,063 1,043,524 5,000 15,683,182 4,228,751 3,913,459 2,333,494 378,952 87,897 96,120 27,770,379 44,639,442	RMB’000 31 December 2020 4,925,021 – 39,503 2,062,046 516,190 17,181 5,015,067 383,123
		12,958,131
		917,104 5,000 15,705,686 2,844,665 4,095,211 2,329,901 299,730 87,653 87,173
		26,372,123
		39,330,254

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Liabilities and shareholders’ equity Current liabilities: Short-term borrowings Notes payable Trade payables Contract liabilities Employee benefits payable Taxes payable Other payables Non-current liabilities due within one year Other current liabilities Total current liabilities Non-current liabilities: Long-term borrowings Bonds payable Lease liabilities Long-term payables Long-term employee benefits payable Deferred income Other non-current liabilities Total non-current liabilities Total liabilities Shareholders’ equity: Share capital Capital reserves Less: Treasury shares Special reserves Surplus reserves Unappropriated profit Total shareholders’ equity Total liabilities and shareholders’ equity	30 June 2021 1,979,336 1,880,137 3,955,293 3,322,929 94,680 18,660 1,061,043 2,235,977 431,981 14,980,036 435,000 996,553 2,939,683 2,529,167 150,258 37,717 – 7,088,378 22,068,414 8,918,602 19,313,090 65,940 25,466 577,012 (6,197,202) 22,571,028 44,639,442	31 December 2020 700,788 1,256,400 2,692,577 2,554,123 280,322 6,822 1,565,471 3,711,113 332,036 13,099,652 450,000 995,150 3,022,612 1,125,491 179,557 35,902 445,480 6,254,192 19,353,844 8,918,602 19,313,090 65,940 19,398 577,012 (8,785,752) 19,976,410 39,330,254

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INCOME STATEMENT

For the six months ended 30 June 2021

Revenue Less: Cost of sales Taxes and surcharges Distribution and selling expenses General and administrative expenses R&D expenses Finance expenses Including: Interest expenses Interest income Add: Other income Investment income Operating profit Add: Non-operating income Less: Non-operating expenses Total profit Less: Income tax expenses/(credit) Net Profit Including: Ne t profit from continuing operations Other comprehensive income after tax Total comprehensive income	Six months ended 30 June 2021 22,669,481 19,339,473 73,484 42,999 228,471 75,591 191,301 236,212 47,236 3,766 310 2,722,238 817 139,238 2,583,817 2,583,817 2,583,817 2,583,817	RMB’000 Six months ended 30 June 2020 10,933,097 10,350,437 88,528 53,116 244,093 – 90,157 110,693 23,193 6,515 6,791 120,072 684 747 120,009 120,009 120,009 120,009

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STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2021

Six months ended 30 June 2021

RMB’000

I. Clo sing balances of the preceding year and opening balances of the current year II. Changes in the current year (I) Total comprehensive income	Share capital 8,918,602	Capital reserves 19,313,090	Less: treasury shares Other comprehensive income 65,940 –	Special reserves 19,398	Surplus reserves Unappropriated profit 577,012 (8,785,752) 2,583,817	Total shareholders’ equity 19,976,410
						2,583,817

• (I) Total comprehensive income

• (II) shareholders’ contribution and decrease in share capital

• Amount increased during the year

• Amount decreased during the year

(III) Special reserves

1. Amount increased during the year 2. Amount decreased during the year (III) Special reserves
1. Amount established during the year 2. Amount utilized during the year (IV) Others Closing balance for the year	8,918,602	19,313,090	65,940		13,200 25,466	577,012	4,733 (6,197,202)	13,200 4,733
								22,571,028

III. Closing balance for the year

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Six months ended 30 June 2020

I. Clo sing balances of the preceding year and opening balances of the current year II. Changes in the current year (I) Total comprehensive income (II) shareholders’ contribution and decrease in share capital 1. Amount increased during the year 2. Amount decreased during the year (III) Special reserves 1. Amount established during the year 2. Amount utilized during the year III. Closing balance for the year	Share capital 8,918,602 – – – – 8,918,602	Capital reserves 19,313,090 – – – – 19,313,090	Less: treasury shares 62,314 – 84,334 (80,708) – – 65,940	Other comprehensive income – – – – – –	Special reserves 14,573 – – 12,954 (6,502) 21,025	Surplus reserves Unappropriated profit 577,012 (9,368,166) – 120,009 – – – – – – 577,012 (9,248,157)	Total shareholders’ equity 19,392,797
							120,009 (84,334) 80,708 12,954 (6,502)
							19,515,632

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STATEMENT OF CASH FLOWS

For the six months ended 30 June 2021

I. Cash flows from operating activities: Cash received from sale of goods and rendering of services Other cash received relating to operating activities Sub-total of cash inflows from operating activities Cash paid for purchase of goods and services 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	Six months ended 30 June 2021 21,155,212 73,428 21,228,640 19,007,414 802,956 58,970 117,337 19,986,677 1,241,963	RMB’000 Six months ended 30 June 2020 8,975,505 187,118 9,162,623 7,885,766 650,980 278,758 266,302 9,081,806 80,817

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II. Cash flows from investing activities: Cash received from disposal of investments Cash received from return on investments Other cash received relating to investing activities Sub-total of cash inflows from investing activities Cash paid for acquisition of property plant and equipment, intangible assets and other long- term assets Cash paid for investments Cash payments for acquisition of subsidiaries and other business units Sub-total of cash outflows from investing activities Net cash flows from investing activities III. Cash flows from financing activities: 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 Other cash paid relating to financing activities Sub-total of cash outflows from financing activities Net cash flows from financing activities	Six months ended 30 June 2021 – 310 – 310 1,193,206 550,000 114,449 1,857,655 (1,857,345) 3,794,465 65,992 3,860,457 2,960,000 153,576 87,904 3,201,480 658,977	Six months ended 30 June 2020 433,000 6,791 – 439,791 145,638 43,000 – 188,638 251,153 2,004,500 – 2,004,500 870,000 85,445 9,545 964,990 1,039,510

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IV. Ef fect of changes in foreign exchange rate on cash and cash equivalents V. Net increase/(decrease) in cash and cash equivalents Add: Ca sh and cash equivalents at the beginning of the year VI. Ca sh and cash equivalents at the end of the year	Six months ended 30 June 2021 9,644 53,239 4,689,461 4,742,700	Six months ended 30 June 2020 – 1,371,480 1,591,312 2,962,792

By order of the Board

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

Chongqing, the PRC, 30 August 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).

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