CHINA CITIC FINANCIAL ASSET MANAGEMENT CO., LTD.

China CITIC Financial Asset Management Co., Ltd.

Equities

2799

CNE100002367

Investment Management & Fund Operators

Market Closed - Hong Kong S.E. Other stock markets 04:08:20 2024-04-26 am EDT			5-day change	1st Jan Change
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Apr. 16	Cinda International Buys Huarong Bonds Worth HK$22.9 Million	MT
Mar. 31	CITIC Financial Asset Management Swings to Profit in 2023	MT

China Huarong Asset Management : INSIDE INFORMATION

April 28, 2021 at 09:54 am EDT

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.

China Huarong Asset Management Co., Ltd.

(A joint stock limited liability company incorporated in the People's Republic of China)

(Stock Code: 2799)

INSIDE INFORMATION

This announcement is made by China Huarong Asset Management Co., Ltd. (the "Company") pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and the Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Pursuant to relevant regulations of the Administrative Measures for the Issuance and Trading of Corporate Bonds (《公司債券發行與交易管理辦法》), the Standards for the Contents and Formats

of Information Disclosure by Companies Offering Securities to the Public No. 38 - Contents and Formats of Annual Reports on Corporate Bonds (《公開發行證券的公司信息披露內容與格式準則第 38 號 - 公司債券年度報告的內容與格式》) and the Shanghai Stock Exchange, Huarong

Rongde Asset Management Co., Ltd. ("Huarong Rongde"), a subsidiary of the Company and as the issuer of the Bonds, is required to disclose the 2020 Annual Report on Corporate Bonds of Huarong Rongde Asset Management Co., Ltd., the Summary of 2020 Annual Report on Corporate Bonds of Huarong Rongde Asset Management Co., Ltd. and the Audited Financial Statements of Huarong Rongde Asset Management Co., Ltd. for the year ended 31 December 2020 (the "Huarong Rongde Financial Statements") by 30 April 2021 on the website of the Shanghai Stock Exchange and ChinaBond.com.cn, and the contents thereof were attached to this announcement. For the avoidance of doubt, the "Company" mentioned in the abovementioned reports and financial statements refers to Huarong Rongde.

Huarong Rongde Financial Statements accompanying with this announcement were prepared in accordance with generally accepted PRC accounting standards and have been audited by Ernst & Young Hua Ming (LLP) (the auditor of Huarong Rongde).

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company.

By order of the Board

China Huarong Asset Management Co., Ltd.

WANG Zhanfeng

Chairman

Beijing, the PRC

28 April 2021

As at the date of this announcement, the Board comprises Mr. WANG Zhanfeng and Mr. WANG Wenjie as executive directors; Ms. ZHAO Jiangping, Mr. ZHENG Jiangping, Mr. XU Nuo and Mr. ZHOU Langlang as non-executive directors; Mr. TSE Hau Yin, Mr. SHAO Jingchun, Mr. ZHU Ning and Ms. CHEN Yuanling as independent non-executive directors.

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

April 2021

Annual Report on Corporate Bonds 2020	Huarong Rongde Asset Management Company Limited

Important Notice

The directors and senior management of the Company have signed written comments on the Annual Report. The Company's Board of Supervisors (if any) has provided written comments on review and approval of the Annual Report, and the Supervisors have signed the Written Comments.

The Company and its directors, supervisors, and senior management shall guarantee that the contents of the Annual Report are true, accurate, and complete, and free of false records, misleading statements, or major omissions, and that they would bear resulting legal liabilities.

Ernst & Young Hua Ming LLP issued an auditor's report with standard unqualified opinions for the Company.

Annual Report on Corporate Bonds 2020	Huarong Rongde Asset Management Company Limited

Significant Risk Prompts

The investors shall, while assessing and purchasing the current bond, think over various risk factors that may adversely affect the current bond's reimbursement, bond value judgment, and investor protection, and carefully and thoroughly read the chapters related to "Risk Factors" in the Prospectus.

As of 31 December 2020, there was no significant change in the risk factors that have impacts on the Company compared to those described in Chapter II Risk Factors of the Prospectus.


Annual Report on Corporate Bonds 2020	Huarong Rongde Asset Management Company Limited
Contents
Important Notice.................................................................................................................................	4
Significant Risk Prompts......................................................................................................................	5
Interpretations.....................................................................................................................................	7
Chapter I Profiles of the Company and Relevant Intermediaries.......................................................	8
IBasic Information of the Company...................................................................................................	8
IIPerson in Charge of Information Disclosure....................................................................................	8
IIIWebsite and Preparation Site of Information Disclosure...............................................................	8
IV Changes in the Controlling Shareholders and the Actual Controllers during the Reporting
Period...................................................................................................................................................	9
V Changes in Directors, Supervisors, and Senior Management during the Reporting Period..........	9
VIInformation on the Intermediaries..............................................................................................	10
VIIChanges in Intermediaries...........................................................................................................	11
Chapter II Corporate Bond Matters...................................................................................................	11
IBasic Information of the Bond........................................................................................................	11
IIUsage of Raised Funds...................................................................................................................	12
IIICredit Rating During the Reporting Period...................................................................................	14
IV Changes in Credit Enhancement Mechanism, Debt Repayment Plan and Other Debt
Repayment Protection Measures and Their Implementations........................................................	14
V The Convening of Bond Holders' Meeting During the Reporting Period......................................	14
VIPerformance of the Trustee..........................................................................................................	14
Chapter III Business Operation and Corporate Governance.............................................................	14
ICorporate Businesses and Operations............................................................................................	14
II New significant investment of the Company for the current year................................................	17
III Whether there is a serious violation when doing business with key accounts...........................	17
IVCorporate Governance.................................................................................................................	17
VNon-operatingIntercourse Funds or Money Lending...................................................................	18
Chapter IV Financial Information......................................................................................................	19
IAuditing of financial statements.....................................................................................................	19
II Changes in accounting policies, accounting estimates, and corrections of previous major errors....................	19
IIIMajor accounting data and financial indicators...........................................................................	19
IVInformation on Assets..................................................................................................................	22
VInformation on Liabilities...............................................................................................................	23
VISources of Profits and Other Gains and Losses............................................................................	24
VIIExternal Guarantees....................................................................................................................	24
Chapter V Major Matters..................................................................................................................	25
I Matters Relating to Major Litigations, Arbitrations and Major Administrative Penalties.............	25
IIBankruptcy Matters........................................................................................................................	26
IIIInvestigations by Judicial Authorities...........................................................................................	26
IVInformation Disclosure on Other Major Matters.........................................................................	26
Chapter VI Other Matters that Should be Disclosed for Special Grades of Bonds...........................	28
I. The Issuer is a convertible bond issuer..........................................................................................	28
II. The Issuer is a non-listed issuer of convertible corporate bond in a private placement.............	28
III. The Issuer is a corporate bond issuer for the Belt and Road, environmental protection, poverty
alleviation, and bailout......................................................................................................................	28
IV. The Issuer is an extendable corporate bond issuer.....................................................................	28
V. Matters on Other Special Grades of Bonds...................................................................................	28
Chapter VII Other Matters that Should be Disclosed According to the Issuer.................................	28
Chapter VIII Catalogue of Documents for Reference........................................................................	29
Financial Statements.........................................................................................................................	31
Attachment I: Financial Statements of the Issuer.............................................................................	31
Financial Statements of the Guarantor.............................................................................................	48

Annual Report on Corporate Bonds 2020Huarong Rongde Asset Management Company Limited

	Interpretations

Issuer/the	Huarong Rongde Asset Management Company Limited
Company/Rongde/Huarong Rongde
Controlling Shareholder/Huarong	China Huarong Asset Management Co., Ltd.
Group/China Huarong
CCC2	Cathay Capital Company (No.2) Limited
Actual Controller/Ministry of	the Ministry of Finance of the People's Republic of
Finance	China.
CSRC	China Securities Regulatory Commission
Bonding Registration and Hosting	Shanghai Branch of China Securities Depository and
Organization/Settlement	Clearing Corporation Limited
Company/Registration Agency
SSE	Shanghai Stock Exchange
Articles of Association	Articles of Association of Huarong Rongde Asset
	Management Company Limited
The Company Law	the Company Law of the People's Republic of China
The Securities Law	the Securities Law of the People's Republic of China
The Administrative Measures	the Administrative Measures on the Issuance and
	Trading of Corporate Bonds
Standby Commitment	an underwriting way in which the Lead Underwriter is
	entrusted to sell the current bond, undertake relevant
	issuance risks, and purchase the bond balance after the
	expiry of the issuance period in accordance with the
	underwriting obligations stipulated in the Underwriting
	Agreement
Special Asset Investment	the asset investment whose value has been
	underestimated, which can be divided into the
	investment into special security asset, special credit
	asset, special equity asset, or other special assets
	based on the investment objectives
Mezzanine Investment	a flexible investment between equity investment and
	creditor's rights investment, maximizing their
	advantages to the fullest
Interest-bearing Year	the period starting on a value date and ending on the
	previous natural day of the next value date during the
	life of the bond
Transaction Date	the normal transaction date of the Shanghai Stock
	Exchange
Legal Holiday/Rest Day	the legal holiday or rest day in the People's Republic of
	China (excluding that of Hong Kong Special
	Administrative Region, Macao Special Administrative
	Region, and Taiwan)
CNY	the official currency of the People's Republic of China

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

Chapter I Profiles of the Company and Relevant Intermediaries

Basic Information of the Company

Chinese Name	華融融德資產管理有限公司
Chinese Abbreviation	華融融德
English Name (if any)	Huarong Rongde Asset Management Company Limited
English Abbreviation (if	RDAMC
any)
Legal representative:	Wu Kunda
Registered address	Suite B115, Wing 2, No.99 Kechuang 14th Street, Beijing Economic
	and Technological Development Zone, Beijing
Office address	Floor 9, Excel Building, No. 6 Wudinghou Street, Xicheng District,
	Beijing
Postal code of office	100033
address
Company website	http://www.rongdeamc.com.cn
E-mail	dingning@chamc.com.cn

Person in Charge of Information Disclosure

Name	Ren Ming
Title Type	Senior Management
Specific Title of Person
in Charge of Information	Assistant General Manager
Disclosure
Contact address	Floor 9, Excel Building, No. 6 Wudinghou Street, Xicheng District,
Beijing

Tel	010-59400239
Fax	010-59400399
E-mail	renming@chamc.com.cn

Website and Preparation Site of Information Disclosure

Please log on to the websites of trading
venues on which the Annual Report is	www.sse.com.cn and www.chinabond.com.cn
released, namely,
Preparation Site of the Annual Report	Floor 9, Excel Building, No. 6 Wudinghou Street,
	Xicheng District, Beijing

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

IV Changes in the Controlling Shareholders and the Actual Controllers during the Reporting Period

Name of the Controlling Shareholder at the End of the Reporting Period: China Huarong Asset Management Co., Ltd.

Name of the Actual Controller at the End of the Reporting Period: The Ministry of Finance of the People's Republic of China

Changes in the Information of the Controlling Shareholder and the Actual Controller: None

Changes in Directors, Supervisors, and Senior Management during the Reporting Period √Changes occurred □No changes occurred
As of the end of 2019, basic information of the Issuer's Directors, Supervisors, and Senior Management is shown below:

Name	Gender	Current Title	Tenure

Wu Kunda	Male	Chairman	Three years

Maria Chang	Female	Vice-Chairman	Three years

Huang Chunyu	Male	Director, Deputy General Manager	Three years
(Moderator)

Robert Petty	Male	Director	Three years

Xu Jingfan	Male	Director	Three years

Liu Fengwei	Male	Full-time Director	Three years

Guo Zhihai	Male	Full-time Director	Three years

Yang Yongzheng	Male	Full-time Director	Three years

Cao Lei	Male	Director, Chief Risk Officer (Deputy General	Three years
Manager)

Cheam Heng Jien	Male	Supervisor	Three years

Liang Jianru	Male	Supervisor	Three years

Li Jingfeng	Male	Deputy General Manager	Three years

Yan Wencong	Male	Assistant General Manager	Three years

Yuan Xiaolong	Male	Assistant General Manager	Three years

Ren Ming	Female	Assistant General Manager	Three years

As of the end of 2020, basic information of the Issuer's Directors, Supervisors, and Senior Management is shown below:

Name	Gender	Current Title	Tenure

Wu Kunda	Male	Chairman	Three years

Maria Chang	Female	Vice-Chairman	Three years

Annual Report on Corporate Bonds 2020	Huarong Rongde Asset Management Company Limited

Huang Chunyu	Male		Director, General Manager	Three years

Robert Petty	Male		Director	Three years

Zou Yibin	Male		Director	Three years

Liu Fengwei	Male		Full-time Director	Three years

Guo Zhihai	Male		Full-time Director	Three years

Yang Yongzheng	Male		Full-time Director	Three years

Cao Lei	Male	Director, Chief Risk Officer (Deputy General	Three years
	Manager)

Cheam Heng Jien	Male		Supervisor	Three years

Liang Jianru	Male		Supervisor	Three years

Li Jingfeng	Male		Deputy General Manager	Three years

Yan Wencong	Male		Assistant General Manager	Three years

Yuan Xiaolong	Male		Assistant General Manager	Three years

Ren Ming	Female		Assistant General Manager	Three years

Wang Cheng	Male		Assistant General Manager	Three years

VI Information on the Intermediaries
(I) Accounting Firm issuing the Auditor's Report
Name			Ernst & Young Hua Ming LLP
Office address			Level 16, Ernst & Young Tower, Oriental Plaza, No.1
			East Changan Ave., Dongcheng District, Beijing
Certified public accountants		Zhang Fan, Liu Qing
(II) Trustee/Creditor's Rights Agent
Bond code			145787, 166330, 166942, 175662
Bond abbreviation			17 融德 02, 20 融德 01, 20 融德 03, 21 融德 G2

Name			China Securities Co., Ltd.
Office address			Floor 2, Tower B, Metro World Center, No. 2
			Chaonei Street, Dongcheng District, Beijing
Contact			Wang Sen, Wang Huijie
Tel.			010-65608411
(III) Credit Rating Agency
Bond code			175662
Bond abbreviation			21 融德 G2
Name			Shanghai Brilliance Credit Rating & Investors
			Service Co., Ltd.
Office address			Floor 13, Huasheng Building, No. 398 Hankou Road,
			Shanghai

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

VII Changes in Intermediaries

Chapter II Corporate Bond Matters

Basic Information of the Bond

Unit: CNY 100 million

1. Bond Code	145787	166330	166942	175662
2. Bond Abbreviation	17 融德 02	20 融德 01	20 融德 03	21 融德 G2
3. Bond Name	RDAMC	RDAMC	RDAMC	RDAMC
	Corporate	Corporate	Corporate	Corporate
	Bond in a	Bond in a	Bond in a	Bond to
	Private	Private	Private	Professional
	Placement	Placement	Placement	Investors in
	in 2017	in 2020	in 2020	2021 (Phase
	(Phase II)	(Phase I)	(Phase II)	I) (Grade II)
		(Grade I)
4. Issuance Date	17 October	19 March	3 June 2020	25 January
	2017	2020		2021
5. Whether Put Provisions are	Yes	Yes	Yes	Yes
Available or Not
6. Recent Put-back Date	17 October	19 March	3 June 2022	25 January
	2021	2022		2023
7. Maturity Date	17 October	19 March	3 June 2026	25 January
	2022	2026		2024
8. Bond Balance	4.10	5.00	8.50	9.00
9. Coupon Rate (%) as of the	5.40	4.70	4.65	5.00
End of the Reporting Period

10. Repayment of Principal	The bond	The bond	The bond	The bond
and Interest	interest is	interest is	interest is	interest is
	calculated	calculated	calculated	calculated
	based on	based on	based on	based on
	the simple	the simple	the simple	the simple
	interest	interest	interest	interest
	method but	method but	method but	method but
	not the	not the	not the	not the
	compound	compound	compound	compound
	interest	interest	interest	interest
	method.	method.	method.	method.
	The interest	The interest	The interest	The interest
	is paid	is paid	is paid	is paid
	annually,	annually,	annually,	annually,
	while the	while the	while the	while the
	principal is	principal is	principal is	principal is
	repaid on	repaid on	repaid on	repaid on
	the maturity	the maturity	the maturity	the maturity
	date; the	date; the	date; the	date; the
	last	last	last	last
	installment	installment	installment	installment
	of interest is	of interest is	of interest is	of interest is

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

paid

together

with the

principal

11. Trading Venue for the

Shanghai

Listing or Transfer

Stock

Exchange

12. Investor Suitability

Bond

Arrangement

Traded with

Qualified

Institutional

Investors

13. Interest Payment during

During the

the Reporting Period

Reporting

Period, the

Period, no

interest for

the bond

was paid on

was due and

17 October

payable.

payable

2020

The interest

for the bond

was paid on

19 March

2021

14.

Triggering

and

Not

Implementing

the

Option

triggered

Adjustment of

Coupon

Rate

during

the

during

the

during

the

during

the

during the Reporting Period

Reporting

Period

15.

Triggering

and

Not

Implementing

the

Option

triggered

Selling Back

the

Investors

during

the

during

the

during

the

during

the

during the Reporting Period

Reporting

Period

16.

Triggering

and

Implementing

the

Option

Redemption

the

Issuer

during the Reporting Period

17.

Triggering

and

Implementing

the

Exchange

Option

Exchangeable

Creditor's

Rights during

the

Reporting Period

18.

Triggering

and

Implementing

Other

Special

Provisions

during

the

Reporting Period

II Usage of Raised Funds

Bond Code: 145787

Unit: CNY 100 million

Bond abbreviation

17 融德 02

Annual Report on Corporate Bonds 2020	Huarong Rongde Asset Management Company Limited

The operation of the special		Operation Criteria for Dedicated Account
account for the funds raised
Total Funds Raised				15
Closing Balance of Raised Funds				0
Amount Consumed and Usage		Approval Procedures for the Issuer and Its Subsidiaries to
of Raised Funds and
	Supplement Circulating	Funds, Repay Corporate	Debts,
Performance Procedures During
	and Perform Corporate Financial Systems
the Reporting Period

Whether the Raised Funds Have
Been Illegally Used, and How It		NA
is Rectified (if any)
Bond Code: 166330		Unit: CNY 100 million

Bond abbreviation		20 融德 01
The operation of the special		Operation Criteria for Dedicated Account
account for the funds raised
Total Funds Raised				5
Closing Balance of Raised Funds				0
Amount Consumed and Usage		Approval Procedures to	Supplement Circulating	Funds
of Raised Funds and
	and/or Repay Corporate Debts, and Perform Corporate
Performance Procedures During
	Financial Systems
the Reporting Period

Whether the Raised Funds Have
Been Illegally Used, and How It		NA
is Rectified (if any)
Bond Code: 166942		Unit: CNY 100 million

Bond abbreviation		20 融德 03
The operation of the special		Operation Criteria for Dedicated Account
account for the funds raised
Total Funds Raised				8.5
Closing Balance of Raised Funds				0
Amount Consumed and Usage		Approval Procedures to	Supplement Circulating	Funds
of Raised Funds and
	and/or Repay Corporate Debts, and Perform Corporate
Performance Procedures During
	Financial Systems
the Reporting Period

Whether the Raised Funds Have
Been Illegally Used, and How It		NA
is Rectified (if any)
Bond Code: 175662		Unit: CNY 100 million

Bond abbreviation		21 融德 G2
The operation of the special		Operation Criteria for Dedicated Account
account for the funds raised
Total Funds Raised				9
Closing Balance of Raised Funds				-
Amount Consumed and Usage		Approval Procedures to Repay Corporate Debts and/or
of Raised Funds and
	Supplement Circulating	Funds, and Perform Corporate
Performance Procedures During
	Financial Systems
the Reporting Period

Whether the Raised Funds Have
Been Illegally Used, and How It		NA
is Rectified (if any)

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

Credit Rating During the Reporting Period

Bond code	175662
Bond abbreviation	21G2
Credit Rating Agency	Shanghai Brilliance Credit Rating & Investors Service
	Co., Ltd.

Date of Issuing the Rating Report	31 December 2020
Rating Conclusion (Main Body)	AAA
Rating Conclusion (Debts)	AAA
Rating Outlook	Stable
Symbol Meanings	The Issuer has a very strong debt-servicing ability and
	is basically immune to the influence of an unfavorable
	economic environment, with a very low default risk;
	The bond has very high repayment potential and is
	basically immune to the influence of an unfavorable
	economic environment, with a very low default risk

Comparison	Remain unchanged
with the Previous Rating Result

Influence	NA
on the Investor Suitability

IV Changes in Credit Enhancement Mechanism, Debt Repayment Plan and Other Debt Repayment Protection Measures and Their Implementations

The Convening of Bond Holders' Meeting During the Reporting Period
NA

VI Performance of the Trustee

China Securities Co., Ltd., the Trustee of Bonds 17 融德 02, 20 融德 01, 20 融德 03, and 21 融德 G2, in strict accordance with the Agreement on the Trusteeship of Bonds, continuously tracked the Company's credit status, management and usage of raised funds, and the repayment of principal and interest for the corporate bonds, and urged the Company to perform the obligations agreed in the Prospectus; It actively fulfilled its responsibilities as a trustee and protected the legitimate rights of bondholders.

Chapter III Business Operation and Corporate Governance

Corporate Businesses and Operations

Corporate Businesses

1. Main business of the Company during the Reporting Period

As a unique asset investment and management platform co-founded by renowned financial institutions at home and abroad including China Huarong and Deutsche Bank, the Issuer is dedicated to building itself into a special asset investment platform that is designed to address

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

non-performing assets under China Huarong. Grounded on the traditional advantageous non- performing business, the Issuer will further scale up the huge non-performing asset business, focus on special investment opportunities, shape its own brand and develop featured businesses. The Issuer pays close attention to special asset investment opportunities and, by means of creditor's rights investment, mezzanine asset investment and equity investment, lifts dominant enterprises in relevant industries out of debt woes through asset reorganization or debt restructuring, or empowers them to achieve sustainable development and better serve the real economy by expanding production capacity, merging and acquiring or effectively enhancing the utilization rate of inefficient assets.

2. Major Products and Their Uses

By taking advantage of its own resource endowments, based on the stock market, centering on keywords relating to the huge non-performing asset like "problem" and "low-efficiency", the Issuer constantly seeks for the investment opportunities of reorganization, restructuring, revitalization, bailout, and relief, and enhances its investment capabilities, thus achieving high- quality development and shaping a featured brand; by means of debt restructuring, asset reorganization, business reorganization, and management reorganization, the Issuer aims to improve the clients' asset structure, management level, and operating status, create greater value, and finally exits through assignment, repurchase, listing, merger and acquisition and other ways. Funds are raised for the purposes of preventing and defusing risks, offering support for the real economy, serving the supply-side structural reform, facilitating national key development strategies, and benefiting structural transformation and upgrading and pioneering innovation. Keeping a foothold in the stock market, the Issuer proactively engages in reorganization, merger, acquisition, and inefficient asset revitalization businesses related to problematic enterprises.

3. Company Profile

Based on the overall strategy and positioning of China Huarong, on the one hand, the Issuer engages in special asset investments and services in coordination with the Group's non- performing asset disposal business and focuses on different types of assets whose value has been underestimated for asset purchase, reorganization, and follow-on investment; on the other hand, it further probes into non-performing assets, consumer finance, and medical health, and quickens commercial asset purchase, investment, and active management. After the investment, the Issuer improves asset structure, enhances management capability and operating status, and creates greater value through debt restructuring, asset reorganization, business reorganization, and management reorganization, and finally exits through assignment, repurchase, listing, merger, acquisition, and other ways.

During the Reporting Period, based on the current supervision and market status, the Issuer develops the business guidance principle of improving asset quality, places emphasis on the adjustment of business structure, imposes a restriction on the resources allocated to the traditional real estate projects, and vigorously expands the markets encouraged by national policies.

(1) Actively developing financial service products centering on huge non-performing asset

Firstly, resolutely perform the functions of state-owned enterprises, fully implement various decisions and deployments of the Central Government, provide support for the development of the real economy, steadily advance the work of "Six Stabilizations", completely fulfill the tasks of "Six Guarantees", and deliver comprehensive financial services for strengthening the people's livelihood, employment, and supply chain, helping enterprises to solve actual problems, facilitate stable resumption of work and restore the order of life. Secondly, implement reorganization on distressed assets of the institutions in plight so as to get them out of the trouble and become revitalized. Thirdly, on the premise of not increasing corporate liabilities, provide liquidity support where the funds are used for repaying financial debts. Fourthly, engage in special opportunistic investments and properly lower corporate leverage.

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

(2) Actively locate clients burdened with a huge non-performing asset

Firstly, by partnering with prestigious leading enterprises in the industry, vigorously render services like mergers and acquisitions, problematic enterprise restructuring, disposal of foreclosure assets, and other similar businesses. Secondly, by cooperating with premium listed companies and private equity firms, propel its visibility in the medical health field, and further serve the real economy. Thirdly, take the initiative to practice the three-year action plan for reforms of state-owned enterprise prospectively and systematically, and promote the cooperation with outstanding state-owned enterprises in terms of separation of primary and secondary businesses, supply chain finance, liabilities management, and other similar fields.

(3) Actively explore non-real estate industries

In terms of target industries, following the principles of "research first, progressive entry", on the basis of expanding the businesses in the medical industry, the Company also vigorously explore non-real estate industries including food, energy, and mass consumption, so as to reduce the concentration risk. Judging by industry, the proportion of the real estate industry shrinks, while non-real estate industries tend to step up progressively.

4. Competitive advantages of the Issuer

Compared with various investing enterprises and financial institutions, the Company boasts three competitive edges:

Firstly, realize win-win cooperation with key accounts through tailored transaction structure. The Company makes individualized investments to the clients with great potential and obtains higher returns on investment than the average level by capturing special investment opportunities and designing a win-win transaction structure.

Secondly, professional and experienced investment and management teams. Having accumulated years of industry experience, our teams are able to achieve full-process risk control by all employees through systematic quantitative analytics and sufficient and detailed due diligence; with a history of more than ten years, the Company has been yielding fruitful results while maintaining a low-risk development trend and enhancing its sustainability.

Thirdly, positive and consistent internal and external comments. Through its unremitting efforts, the Company has won a series of honors within the system and was also highly acclaimed by external investors. Internally, it once won the honorary titles of "Huarong System Major Income Contributor", "Huarong System Innovation & Progress Award", "Huarong System Market Expansion Award" and "Huarong System Best Direct Investment Team"; externally, the Company was assigned AAA credit rating by Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. In March 2019, the Company issued CNY 6 billion corporate bonds in full in a private placement, ranking Top 3 among all issuers of the same grade in terms of scale in 2019, demonstrating the market's recognition for and trust in the Company.

5. The Issuer's business policies and strategies

Guided by its strategic plans, the Issuer steadfastly pursues business development, seeks for a dynamic balance between scale and revenue, compliance and development, risk and profit, stock and increment, and resort to rational planning for maintaining reasonable growth rate and contributing to high-quality development.

Firstly, stick to strategic implementation and dynamic management. Guided by the three-year strategic plan, the Issuer adheres to the principle of "sketching a blueprint to the end", pursues sustainable development, upholds its functions and positioning, expands the business operations of huge non-performing asset, develops overall deployment strategically, and identifies targeted solutions tactfully.

Secondly, further the development of main business. Keeping a foothold in the stock market, the Issuer also pursues the goals of "compliance", "safety" and "benefits". Focusing on the depth and

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

breadth of businesses, the Issuer strives to make breakthroughs in terms of product modes and build a full chain of "value discovery, value reshaping, and value increase". To make full use of distressed assets of highly potential enterprises, with their quality assets as the enabler to achieve breakthrough, the Issuer pays close attention to problematic assets, problematic projects, problematic enterprises, and problematic institutions, and constantly captures business opportunities like the bailout of listed companies, the mixed restructuring of state-owned enterprises and special opportunistic investments. Moreover, it also fully discovers the value and potential of problematic assets and problematic institutions, enhances asset disposal ability, and collaborates with advantageous leading enterprises to discover and increase the value of problematic assets and enterprises through reorganization, restructuring, and revitalization, etc.

Thirdly, expand liabilities management. The Issuer continues to deepen a dynamic balance between assets and liabilities with liquidity management as the focus, thus giving play to perceptual guarantee and appropriate guidance of liabilities business for asset business. Furthermore, the Issuer also continues to strengthen the management on the quantity and quality of liabilities in terms of rhythm, scale, costs, period, and compliance.

Fourthly, optimize key account management. Upholding the client-centered principle, based on a timely grasp of the client's needs, pain points, and difficulties, the Issuer continues to maintain and expand leading enterprises and highly potential clients, makes use of the innovative results of the industry, the client, and the product, and diversify product toolkits, so as to solve actual difficulties, provide featured services and constantly enhance customer loyalty.

Fifthly, strengthen innovative practices of businesses. The Issuer establishes an innovative work framework with the product, client, and industry as the grippers.

(II) Future Prospects of the Company

In the coming years, the Issuer will continue to expand huge non-performing asset businesses and shape a featured brand based on its traditional advantageous non-performing business. Moreover, focusing on special opportunistic investments to expand the business, the Issuer specializes in huge non-performing asset business, shapes a powerful featured brand, and becomes a market subject of "powerful party building, prominent primary business, high financial soundness, controllable risks, effective transformation, standardized management, and strict discipline", as well as a professional service provider centering on special opportunistic investments in China.

New significant investment of the Company for the current year

□Yes √NA

Whether there is a serious violation when doing business with key accounts

□Yes √NA

IV Corporate Governance

Whether the independence of the Company relative to the Controlling Shareholders or its independent operations cannot be guaranteed:
□Yes √No

The independence of the Company relative to the Controlling Shareholders in business, personnel, assets, institutions, and finances is shown below:

1. The Issuer is independent in business

The Issuer's current business is dominated by creditor's rights and equity investments. The Issuer sets up an indispensable Business Management Department responsible for business operations. The business management system is independent of the Controlling Shareholders, Actual Controllers, and their controlling enterprises; moreover, there is no direct competition or unfair related party transactions between the Issuer and its Controlling Shareholders, Actual Controllers, or their controlling enterprises. Therefore, the Issuer is independent in business.

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

2. The Issuer boasts independent and complete assets

None of the funds of the Issuer has been occupied by the Controlling Shareholders, Actual Controllers, and their controlling enterprises in the name of borrowing, debt repayment, entrusted payment, or other excuses, or has been embezzled for providing guarantee for the Controlling Shareholders or Actual Controllers. Moreover, other assets of the Issuer are also not occupied.

3. The Issuer is independent in personnel

According to the Articles of Association, the Issuer's Board of Directors consists of 9 directors, among which 6 directors are appointed by China Huarong, and the remaining 3 ones are designated by CCC2. With a total of 9 directors, the tenure for each director lasts for 3 years, but each director can only be dismissed at any time by the original appointing party and be replaced by a newly commissioned one. The Company's management consists of 1 General Manager, 1 Deputy General Manager, 1 Financial Director, 1 Chief Auditor, and 1 Assistant General Manager. The Issuer independently hires employees, signed labor contracts with them in accordance with applicable laws, and independently pays salaries to them. The Issuer is fully independent in labor, personnel, and salary management.

4. The Issuer is independent in institutions

The Issuer does not set up the Board of Shareholders. The Board of Directors is the institution with the highest authority within the Company, while the Board of Directors and the Board of Supervisors serve as corporate governance structures with separated functions of decision- making, supervision, and implementation. The Issuer has defined clear responsibilities for the Board of Directors and the Board of Supervisors; there is also a clear segregation of duties between the Board of Directors and the Managers: the Board of Directors will perform its decision-making obligation based on the authorization of the shareholders, while the Managers are responsible for implementing effective control over the Company's business management; the Board of Supervisors takes charge of supervising the performance of the decision-makers and the managers. The Issuer assigns different tasks to different departments and designs a complete management system and coherent international management system. Its organizations and internal business management institution are set in accordance with legitimate procedures and are independent of the Controlling Shareholders, Actual Controller, and their controlling enterprises. There is no mixed institution.

5. The Issuer is financially independent

The Issuer sets up an independent Finance Department and establishes an independent financial accounting system that allows it to make independent financial decisions. Furthermore, it is also equipped with a standardized financial accounting system and financial management system. The Issuer opens an independent bank account for independent accounting and is able to declare and pay taxes independently.

Whether there is an illegal guarantee for the Controlling Shareholders, Actual Controllers, or their related parties
□Yes √No

Whether the Company's governance structure or internal control is inconsistent with the Company Law or the Articles of Association

□Yes √No

(IV) Whether the Issuer has violated any agreement or promise made in the Prospectus during the Reporting Period

□Yes √No

Non-operatingIntercourse Funds or Money Lending

Whether there are any non-operating intercourse funds or money lending during the Reporting Period:
□Yes √No
Whether the non-operating intercourse funds and money lending unrecovered at the end of

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

the Reporting Period exceed 10% of the net assets of the combination □Yes √No

Chapter IV Financial Information

Auditing of financial statements √Standard unqualified opinions □Others

Changes in accounting policies, accounting estimates, and corrections of previous major errors
□Yes √NA

Major accounting data and financial indicators

Major accounting data and financial indicators (including but not limited to)

								Unit: CNY 100 million

					Closing	Closing		Please give an
					Balance of	Balance
					Variation	explanation in
No.		Item			the	of the
			(%)	case of a variation
					current	previous
						greater than 30%
					period	period

1	Total assets			243.56	251.99	-3.35	NA
2	Total liabilities			185.22	195.91	-5.46	NA
3	Net assets			58.34	56.08	4.03	NA
	Net	asset attributable	to
4	the	shareholders	of	the	58.34	56.08	4.03	NA
	parent company
5	Assets-Liabilities Ratio (%)	76.05	77.75	-2.19	NA
	Assets-liabilities ratio (%)
6	after	deducting	goodwill	76.05	77.75	-2.19	NA
	and intangible assets
								The	Issuer
								improved		the
								utilization
7	Current ratio			0.60	0.97	-38.14	efficiency	of	the
		funds		and

								reduced its money
								management	and
								investments
								The	Issuer
								improved		the
								utilization
8	Quick ratio			0.60	0.97	-38.14	efficiency	of	the
		funds		and

								reduced its money
								management	and
								investments
								The	Issuer
9	Cash and cash equivalents	15.14	29.79	-49.18	enhanced		the
at end of the year			cash management

								efficiency, and the

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

Closing

Please give an

Balance of

Balance

Variation

explanation in

No.

Item

the

of the

(%)

case of a variation

current

greater than 30%

period

closing

cash

balance

was

lowered

down a

bit

The

Amount

Please give an

in the

Variation

explanation in

No.

Item

current

same

(%)

case of a variation

period

greater than 30%

last year

The

operating

income

for

the

period

included

that

the Issuer's wholly

-owned subsidiary

Huarong

Rongde

Operating income

17.32

29.68

-41.64

(Hong

Kong),

but

its

operating

income

was

longer included in

the

consolidated

financial

statements during

the current period

The operating cost

for

the

period

included

that of the Issuer's

wholly-owned

subsidiary

Huarong

Rongde

Operating cost

12.49

22.18

-43.69

(Hong

Kong),

but

its

operating

cost

was

no longer

included

the

consolidated

financial

statements during

the current period

Total profits

5.76

7.85

-26.62

Net profits

4.11

5.02

-18.13

Net profits after deducting

non-recurring profit

and

3.42

4.76

-28.15

loss

Net

profits attributable to

4.11

3.74

9.89

the

shareholders of

the

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

parent company

The

EBITDA

for

the

period

included

that of the Issuer's

wholly-owned

Earnings before

interest,

subsidiary

Huarong

Rongde

tax,

depreciation,

and

15.49

28.28

-45.23

(Hong Kong),

but

amortization (EBITDA)

its EBITDA was no

longer included in

the

consolidated

financial

statements during

the current period

The

cash

inflow

from

the

net

decrease

Net cash flows arising from

-13.66

-4.21

224.34

financial

assets

operating activities

held

for

trading

was less than that

the

same

period lasy year

Net cash flows arising from

26.24

32.71

-19.80

investment activities

Net cash flows arising from

-27.20

-31.68

-14.14

financing activities

Accounts

receivable

turnover

Inventory turnover

EBITDA

for

this

year was reduced

slightly due to the

above

reasons,

but the two-year

indicator

"All

EBITDA debt ratio

0.08

0.14

-42.86

Liabilities"

just

included

those of

Huarong

Rongde

China

Mainland,

this

indicator

may

lowered a bit

Interest

protection

1.61

1.39

15.83

multiples

The

interest

expenses

for

the

period

Cash

interest

protection

-0.28

0.93

-130.11

included

that

multiples

the Issuer's wholly

-owned subsidiary

Huarong

Rongde

(Hong Kong),

but

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

its

interest

expenses were no

longer included in

the

consolidated

financial

statements during

the

current

period,

this

indicator

was

optimized a bit

EBITDA interest multiples

1.65

1.39

18.71

Loan repayment ratio (%)

100.00

Interest repayment

ratio

100.00

(%)

Note

1: Non-recurring profit

and

loss refer to

the profit

and loss arising

out

various

transactions and matters that are not directly related to the Company's normal business or are correlated with the normal business but with special nature and occasionally occurring, thus affecting the statements users' normal judgment of the Company's business performance and profitability. Please see details in Non-recurring Profit and Loss (2008), No. 1 of Explanatory Announcement on Information Disclosure Regarding the Issuance of Corporate Securities.

Note 2: EBITDA = EBIT+ depreciation expenses + amortization fees

The underlying reason for the changes in major accounting data and financial indicators See the table above for more details about the changes.
IV Information on Assets

Major assets and their changes

				Unit: CNY 100 million

		Closing balance of
		the previous period		Please give an
		or the closing
	Closing	Variation	explanation in case
Asset item	balance at the end
balance	(%)	of a variation
	of the reporting
			greater than 30%
		period given in the

		Prospectus
				The Issuer enhanced
				the cash
Cash and cash at				management
15.32	30.38	-49.57	efficiency, and the
banks
			closing cash balance

				was lowered down a
				bit
				The Issuer improved
				the utilization
Financial assets held				efficiency of the
38.20	60.14	-36.48	funds and reduced
for trading
			its money

				management and
				investments
				The Issuer made
Debt investments	169.66	95.60	77.47	more new creditor's
				rights investments
				during the Reporting

Annual Report on Corporate Bonds 2020	Huarong Rongde Asset Management Company Limited

		Closing balance of
		the previous period		Please give an
		or the closing
	Closing	Variation	explanation in case
Asset item	balance at the end
balance	(%)	of a variation
	of the reporting
			greater than 30%
		period given in the

		Prospectus
				Period compared to
				that of the previous
				period
				Some long-term
				equity investments
Long-term equity	13.02	60.21	-78.38	of the Issuer
investments	became mature

				during the Reporting
				Period
Total assets	243.56	251.99	-3.35	NA

Asset restrictions √Yes □NA

Total amount (book value) of restricted assets: CNY18,000,000

As of the end of December 2020, the book value of margin deposits made by the Issuer for the purpose of obtaining short-term borrowings was CNY 18,000,000.00. The aforementioned restricted fund amounted to CNY 18,000,000.00.

Information on Liabilities

Major liabilities and their changes

				Unit: CNY 100 million

		Closing balance of
		the previous period		Please give an
		or the closing
Liabilities items	Closing	Variation	explanation in case
balance at the end
balance	(%)	of a variation
	of the reporting
			greater than 30%
		period given in the

		Prospectus
Short-term	88.55	92.14	-3.90	NA
borrowings

Long-term				Repaid some long-
15.43	24.65	-37.41	term borrowings in
borrowings
			advance

Bonds payable	73.22	76.11	-3.80	NA
Total liabilities	185.22	195.91	-5.46	NA

Whether the Issuer has been burdened with any undue or due but not fully-paid overseas liabilities during the reporting period

□Yes √NA

Whether the Issuer has been found with any new overdue interest-bearing debt with an amount of CNY 10,000,000 during the Reporting Period
□Yes √No

(IV) Progress of overdue interest-bearing debt during the previous reporting period

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

Prioritized repayment of liabilities against any third person as of the end of the Reporting Period
NA

(VI) Bank credit information

As of the end of December 2020, the Issuer has obtained the following bank credit:

Unit: CNY 100 million

No.	Credit Bank	Credit Limit	Remaining Credit Limit
Available

1	Industrial & Commercial Bank of China	45.00	25.00
2	Agricultural Bank of China	10.00	7.30
3	China Construction Bank	25.00	23.00
4	Bank of China	10.20	10.20
5	Bank of Communications	10.00	10.00
6	China Minsheng Bank	10.00	10.00
7	China Merchants Bank	0.50	0.50
8	Huaxia Bank	8.00	0.01
9	China Zheshang Bank	4.00	0.00
10	Shanghai Pudong Development Bank	5.00	0.00
11	Bank of Jiangsu	18.00	8.00
12	Bank of Nanjing	7.00	7.00
13	Bank of Hangzhou	1.00	1.00
14	Beijing Rural Commercial Bank	8.00	8.00
15	China Resources Bank of Zhuhai	8.00	1.30
16	Bank of Tianjin	5.00	5.00
17	Hana Bank	1.40	1.40
18	Bank of Beijing	10.00	8.36
19	Bank of Shanghai	10.00	2.20
20	Industrial Bank	10.00	0.00
21	China Bohai Bank	10.00	10.00
22	Wing Lung Bank	3.00	3.00
23	China CITIC Bank	5.00	2.50
24	Bank of Dalian	8.00	2.40
25	Weihai City Commercial Bank	12.00	6.00
26	Leshan Bank	10.00	10.00
27	China Guangfa Bank	8.00	5.15
28	Ningbo Commerce Bank	3.00	3.00
29	Xiangjiang Bank	6.00	6.00
30	Suining Bank	1.50	1.50
31	Hengfeng Bank	7.50	3.00
32	Fubon Bank	4.00	4.00
33	Bank of East Asia	5.00	0.00
	Total	289.10	184.82

VI Sources of Profits and Other Gains and Losses

Total Non-recurring Gains and Losses during the Reporting Period: CNY 92,000,000

During the reporting period, the major change in the Company's profit composition or profit sources comes from non-primary businesses.

□Yes √NA

VII External Guarantees

Balance of External Guarantees at the End of the Reporting Period: CNY 0.00

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

Change in the Company's External Guarantee during the Reporting Period: CNY 0.00

Whether the total external guarantees completed and uncompleted exceed more than 30% of the net assets at the end of the reporting period: □Yes √No

Chapter V Major Matters

Matters Relating to Major Litigations, Arbitrations and Major Administrative Penalties √Yes □No

				Influence on the
		Principal	Whether to	Company's
		Constitute	Business
Case	Case Progress	Involved (Unit:
Expected	Operations and
		CNY 10,000)
		Liabilities	Debt-servicing

				Ability
	The Debtor has
	undergone
	liquidation
	procedures and
	the
	Administrator
	would auction
	the Debtor's
	bankruptcy
	property. In the
Debt Dispute	future, the
between	Issuer will
Shanghai	continue to			It did not cause
Yuanmou Real	actively	110,000.00	No
a great impact
Estate Co., Ltd.	communicate

and the	with the
Company	Bankruptcy
	Court and the
	Bankruptcy
	Administrator
	about the
	disposal of
	assets and
	exercise the
	priority of
	compensation
	for the collateral
Debt Dispute	The Case has
between	entered
Hanergy Dezhou	enforcement by			It did not cause
Photovoltaic	the Court, and	21,868.54	No
a great impact
Power	the Debtor's

Generation Co.,	bank accounts
Ltd. and the	and major assets

Annual Report on Corporate Bonds 2020	Huarong Rongde Asset Management Company Limited

Company	have been
	sealed up and
	frozen
	The Case has
	entered
Debt Dispute	enforcement by
between Tahoe	the Court, and
Investment	the Debtor's	248,000.00	No	It did not cause
Group Co., Ltd.	bank accounts	a great impact

and the	and some equity
Company	assets have been
	sealed up and
	frozen
	The Case has
	entered
	enforcement by
	the Court, and
Debt Dispute	the Issuer has
submitted an
with Shenzhen			It did not cause
application to
Kuaige Internet	16,500.00	No
the Court to	a great impact
Technology Co.,
request that
Ltd.
Debtor's bank

	accounts and
	major assets
	should be sealed
	up and frozen

Bankruptcy Matters □Yes √NA

Investigations by Judicial Authorities □Yes √NA

IV Information Disclosure on Other Major Matters

				Influence on the
				Company's
Major Matters	Yes/No	Date of	Latest Progress	Business
disclosure	Operations and

				Debt-servicing
				Ability
There was a
significant
change in the
Issuer's business
policies,	No
business scope

or external
production, and
business
conditions
There was a	No

	Annual Report on Corporate Bonds 2020	Huarong Rongde Asset Management Company Limited

	change in the
	bond credit
	rating
	The Issuer's
	major assets
	have been	No
	sealed up,
	seized, or frozen
	The Issuer was
	caught in any
	default that	No
	would lead to its

	inability to repay
	the debts
	The Issuer's new
	cumulative loans
	or external
	guarantees have
	exceeded more	No
	than 20% of net
	assets at the end
	of the previous
	period
	The debts or
	property given
	up by the Issuer
	have exceeded	No
	more than 10%

	of net assets at
	the end of the
	previous period
	The Issuer has
	suffered major
	losses which
	exceeded more	No
	than 10% of net

	assets at the end
	of the previous
	period
	The Issuer has
	made a decision
	to reduce its	No
	capital, seek for
	a merger, a
	division, or a
	dissolution
	There was a
	major change in
	Guarantor, the	No
	collateral, or
	other repayment
	guarantee
	measures
	There was a	No

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

major change in the Issuer that might make it disqualified for the bond listing

In accordance with the Resolution of the 12th Extraordinary Meeting of Huarong Rongde's Board of Directors in 2020, Mr Huang Chunyu was appointed as the General Manager with a tenure of three years. The above matter has been announced on the SSE website on 16 December 2020.

Chapter VI Other Matters that Should be Disclosed for Special Grades of Bonds

I. The Issuer is a convertible bond issuer

□Yes √NA

The Issuer is a non-listed issuer of convertible corporate bond in a private placement □Yes √NA

The Issuer is a corporate bond issuer for the Belt and Road, environmental protection, poverty alleviation, and bailout

□Yes √NA

IV. The Issuer is an extendable corporate bond issuer

□Yes √NA

V. Matters on Other Special Grades of Bonds

Chapter VII Other Matters that Should be Disclosed According to the Issuer

Annual Report on Corporate Bonds 2020

Huarong Rongde Asset Management Company Limited

Chapter VIII Catalogue of Documents for Reference

Financial statements with signatures and seals of the person-in-charge of the Company, person-in-charge of accounting work, the Head of the accounting agency (accounting manager);
II. Original of the auditor's report with the seal of an accounting firm, signature, and seal of certified public accountants (if any);
III. Originals of all documents of the Company and manuscripts of announcements publicly disclosed at designated websites of CSRC during the reporting period;
IV. Annual reports and annual financial information disclosed to the public based on the requirements of other regulators and trading venues at home and abroad.

(Below is intentionally left blank)

Financial Statements

Attachment I: Financial Statements of the Issuer

Consolidated Balance Sheet

31 December 2020

Prepared by: Huarong Rongde Asset Management Company Limited

							Unit: CNY Currency: RMB

	Item					31 December 2020	31 December 2019

Current assets:
Cash and cash at banks			1,532,000,594.05	3,038,093,248.74
Settlement provision			-	-
Due from banks and other		-	-
financial institutions

Financial	assets	held	for		3,820,105,939.12	6,014,327,207.87
trading
Financial	assets	measured	at		-	-
fair value with changes included
in the current profit and loss
Derivative financial assets			-	-
Notes receivable					-	-
Accounts receivable				-	-
Receivables financing			-	-
Prepayments					-	-

Insurance receivable				-	-
Sub-insurance receivable			-	-
Provisions of sub-insurance		-	-
contracts receivable
Other Receivables				-	-

Incl: Interest receivable			-	-
Dividends receivable		-	-
Repurchasing	of	financial		-	-
assets
Inventories					-	-

Contract assets					-	-
Assets held for sale				-	-
Non-current assets due within		-	-
1 year
Other current assets				-	-

Total current assets			5,352,106,533.17	9,052,420,456.61
Non-current assets:			-		-
Loans and payment on other's		-	-
behalf disbursed

Debt investments		16,965,735,052.11	9,559,742,027.71
Available-for-sale	financial	-	-
assets
Other debt investments	-	-

Held-to-maturity investments	-	-
Long-term receivables	-	-
Long-term equity investments	1,301,736,457.36	6,021,277,499.67
Other	equity	instrument	-	-
investments

Other non-current financial	-	-
assets
Investment properties		106,139,838.54
Fixed assets		240,713,800.15	1,374,106.11
Project under construction	-	-

Productive biological assets	-	-
Oil and gas assets		-	-
Right-of-use assets		43,401,154.91	83,674,455.92
Intangible assets		1,491,787.66	233,158.46

Research	and development	-	-
costs
Goodwill			-	-
Long-term deferred expenses	519,590.67	26,731,259.13
Deferred tax assets		276,432,823.58	241,096,424.30

Other assets		174,338,824.26	106,731,907.72
Other non-current assets	-	-
Total non-current assets	19,004,369,490.70	16,147,000,677.56
Total assets		24,356,476,023.87	25,199,421,134.17
Current liabilities:

Short-term borrowings	8,854,627,558.09	9,214,334,754.45
Loan from Central Bank	-	-
Placement from	banks and	-	-
other financial institutions
Transactional	financial	-	-
liabilities
Financial	liabilities	measured	-	-
at fair value with changes
included in the current profit
and loss
Derivative financial liabilities	-	-

Notes payable		-	-
Accounts payable		-	-
Accounts received in advance	-	-
Contract liabilities		-	-

Selling	of	repurchased	-	-
financial assets
Deposit received and held for	-	-
others

Entrusted trading of securities	-	-
Entrusted selling of securities	-	-
Employee benefits payables		56,292,002.14	72,748,861.93
Taxes payable			77,671,770.51	28,916,855.55
Other payables		-	-

Incl: Interests payable		-	-
	Dividends payable		-	-
Fees	and	commissions	-	-
receivable
Sub-insurance payable		-	-

Liabilities held for sale		-	-
Non-current liabilities due	-	-
within 1 year
Other current liabilities		-	-
Total current liabilities		8,988,591,330.74	9,316,000,471.93

Non-current liabilities:		-	-
Insurance contract provision	-	-
Long-term borrowings		1,542,994,864.59	2,465,302,603.48
Bonds payable		7,322,321,157.80	7,611,496,066.55

Incl: Preferred shares
	Perpetual bond
Other liabilities		625,606,834.48	5,814,652.18
Lease liabilities		42,729,006.21	192,739,569.65
Long-term payables		-	-
Long-term employee benefits	-	-
payables
Expected liabilities		-	-
Deferred income		-	-
Deferred income tax liabilities	-	-
Other non-current liabilities		-	-
Total non-current liabilities	9,533,651,863.08	10,275,352,891.86
Total liabilities		18,522,243,193.82	19,591,353,363.79
Owners'		equity	(or
Shareholders' equity)

Paid-in capital (or Share	1,788,000,000.00	1,788,000,000.00
capital)
Other equity instruments		-	-
Incl: Preferred shares		-	-

	Perpetual bond		-	-
Capital reserves			-	-
Less: Inventory shares		-	-

Other comprehensive income	-	-
Special reserves			-	-
Surplus reserve			722,272,393.28	685,019,434.04
Common risk provision		-	-
Retained earnings		3,323,960,436.77	3,135,048,336.34
Total	owners'	equity	(or	5,834,232,830.05	5,608,067,770.38
shareholders'		equity)
attributable	to	the parent
company
Minority shareholders' equity	-	-
Total	owners'	equity	(or	5,834,232,830.05	5,608,067,770.38
shareholders' equity)
Total	liabilities	and	24,356,476,023.87	25,199,421,134.17
owners' equity (or shareholders'
equity)

Legal representative: Wu Kunda Person-in-charge of accounting work: Ren Ming Head of the

accounting agency: Yang Xuemei

Parent Company Balance Sheet

31 December 2020

Prepared by: Huarong Rongde Asset Management Company Limited

				Unit: CNY Currency: RMB
	Item		31 December 2020	31 December 2019
Current assets:

Cash and cash at banks		1,138,922,558.08	3,032,013,373.67
Financial	assets held	for	4,074,250,405.79	5,023,975,067.64
trading
Financial	assets measured	at	-	-
fair value with changes included
in the current profit and loss

Derivative financial assets		-	-
Notes receivable		-	-
Accounts receivable		-	-
Receivables financing		-	-
Prepayments		-	-

Other Receivables		-	-
Incl: Interest receivable		-	-
Dividends receivable	-	-
Inventories		-	-

Contract assets			-	-
Assets held for sale			-	-
Non-current assets due within		-	-
1 year

Other current assets		-	-
Total current assets		5,213,172,963.87	8,055,988,441.31
Non-current assets:		-		-
Debt investments			12,858,716,070.19	9,500,420,178.14

Available-for-sale	financial		-	-
assets
Other debt investments		-	-
Held-to-maturity investments		-	-
Long-term receivables		-	-

Long-term equity investments		4,966,866,015.13	6,902,474,350.82
Other	equity	instrument		-	-
investments
Other non-current financial		-	-
assets
Investment properties		-	-

Fixed assets			1,212,629.33	1,373,858.61
Project under construction		-	-
Productive biological assets		-	-
Oil and gas assets			-	-

Right-of-use assets			43,401,154.91	83,674,455.92
Intangible assets			59,437.20	233,158.46
Research	and development		-	-
costs
Goodwill				-	-

Long-term deferred expenses		519,590.67	721,051.62
Deferred tax assets			323,045,408.74	255,525,313.48
Other assets			91,248,489.17	88,767,403.86
Other non-current assets		-	-
Total non-current assets		18,285,068,795.34	16,833,189,770.91
Total assets			23,498,241,759.21	24,889,178,212.22
Current liabilities:
Short-term borrowings		8,854,627,558.09	9,214,334,754.45
Transactional	financial		-	-
liabilities
Financial	liabilities	measured		-	-
at fair value with changes
included in the current profit
and loss
Derivative financial liabilities		-	-

Notes payable			-	-
Accounts payable			-	-
Accounts received in advance		-	-

Contract liabilities			-	-
Employee benefits payables			56,160,841.25	72,748,861.93
Taxes payable			71,939,128.62	21,542,754.48
Other payables			-	-
Incl: Interests payable			-	-
	Dividends payable			-	-
Liabilities held for sale			-	-
Non-current liabilities due		-	-
within 1 year
Other current liabilities			-	-
Total current liabilities			8,982,727,527.96	9,308,626,370.86
Non-current liabilities:			-	-
Long-term borrowings			1,542,994,864.59	2,465,302,603.48
Bonds payable			7,322,321,157.80	7,611,496,066.55
Incl: Preferred shares
	Perpetual bond			-	-

Other liabilities			1,121,672.10	894,277.29
Lease liabilities			42,729,006.21	84,040,955.93
Long-term payables			-	-
Long-term employee benefits		-	-
payables

Expected liabilities			-	-
Deferred income			-	-
Deferred income tax liabilities		-	-
Other non-current liabilities			-	-
Total non-current liabilities		8,909,166,700.70	10,161,733,903.25

Total liabilities			17,891,894,228.66	19,470,360,274.11
Owners'	equity	(or	-		-
Shareholders' equity)
Paid-in capital (or Share		1,788,000,000.00	1,788,000,000.00
capital)

Other equity instruments			-	-
Incl: Preferred shares			-	-
	Perpetual bond			-	-
Capital reserves			-	-
Less: Inventory shares			-	-

Other comprehensive income		-	-
Special reserves			-	-
Surplus reserve			722,272,393.28	685,019,434.04

Retained earnings		3,096,075,137.27	2,945,798,504.07
Total owners' equity	(or	5,606,347,530.55	5,418,817,938.11
shareholders' equity)
Total	liabilities	and	23,498,241,759.21	24,889,178,212.22
owners' equity (or shareholders'
equity)

Legal representative: Wu Kunda Person-in-charge of accounting work: Ren Ming Head of the

accounting agency: Yang Xuemei

Consolidated Profit Statement

From January 2020 to December 2020

		Unit: CNY Currency: RMB
Item	For the year ended 31	For the year ended 31
December 2020	December 2019

I. Total operating revenue	1,732,380,647.35	2,968,002,778.58
Incl: Operating income	-	-
Interest income	1,356,019,734.98	1,127,569,257.35

Net commission and fee net	9,422,410.18	10,810,064.39
income

Insurance fee earned	-	-
Fee and commission income	-	-
Net commission and fee net	9,422,410.18	10,810,064.39
income
Other operating income	9,151,543.97	35,441,398.76
II. Total operating costs	1,248,664,837.56	2,217,898,260.66
Incl: Operating cost
Interest expenses	938,478,495.46	2,003,188,581.85
Fee and commission paid	-	-
Operating expenses	153,664,679.47	247,223,576.38
Insurance discharge payment
Net claim amount paid

Net provision for insurance
liability
Insurance policy dividend paid
Sub-insurance expenses
Other operating expenses	19,352,703.75	46,333,563.55
Tax and surcharges	5,105,998.32	4,570,024.83
Sales expenses
Administration expenses

R&D expenses
Financial expenses
Incl: Interest expense	938,478,495.46	2,003,188,581.85

	Interest income
Add: Other income					27,336.58
	Investment income ("-" for loss)	224,533,282.16	1,811,356,095.35
	Incl: Income from investments in	-36,912,909.79	841,767,126.67
associates and joint ventures
	Derecognized	earnings	of
financial assets measured at amortized
cost
	Losses on exchange	differences	-2,107,790.33	-35,215,909.73
("-"for loss)
	Net exposure hedging gains ("-"	-	-
for loss)
	Fair value changes on financial	121,669,196.71	18,043,967.82
assets ("-" for loss)
	Impairment	losses	under	114,671,167.42	-83,417,485.95
expected credit loss mode ("-"for loss)
	Asset impairment losses ("-" for
loss)

	Gains/(Losses)	on	disposal	of	13,664,933.10	-2,095.36
assets ("-" for loss)

	Impairment losses	on	other	17,391,793.14	-
assets
III. Operating profits ("-" for loss)			483,715,809.79	750,104,517.92
Add: Non-operating income			94,839,662.89	38,078,934.20
Less: Non-operating expenses			2,744,097.06	3,158,119.14
IV. Total profits ("-"for total loss)			575,811,375.62	785,025,332.98
Less: Income tax expenses			164,646,315.95	282,736,309.59
Ⅴ. Net profits ("-"for net loss)			411,165,059.67	502,289,023.39
(I)	Classification	by	business	-	-
continuity
	1. Net profits of continuous	-	-
operating ("-" for net loss)
	2. Net profits of business	-	-
termination ("-" for net loss)

(II) Classification by attribution of the	-	-
ownership
	1. Net profits attributable to the	411,165,059.67	373,945,433.08
owners of the parent company ("-" for
net loss)
	2. Minority Interests ("-" for net		128,343,590.31
loss)
VI. Other comprehensive income, net of		432,398,485.88
income tax

(I)		Other	comprehensive	income		432,398,485.88
attributable to the owners of the parent
company, net of tax
1.	Other	comprehensive	income		12,121,389.48
items that will not be reclassified to
profit or loss
(1)		Changes	arising	from	-	-
remeasurement of defined benefit plans
(2)		Other	comprehensive	income	-	-
inconvertible to profit or loss under the
equity method
(3)	Changes in fair value of other		12,121,389.48
equity instrument investments
(4)	Changs in fair value of corporate	-	-
credit risk
2.	Other	comprehensive	income		420,277,096.40
items that will be reclassified to profit or
loss
(1)		Other	comprehensive	income	-	-
convertible to profit or loss under the
equity method
(2) Changes in fair value of other debt		387,825,973.04
investments
(3)		Gains or losses arising from	-	-
changes in fair value of available-for-sale
financial assets
(4)	Amount	from reclassification	of	-	-
financial assets recorded into other
comprehensive income
(5)		Gains or losses arising from	-	-
reclassification	of	held-to-maturity
investments	as	available-for-sale
financial assets
(6)	Credit loss reserve for other debt		-102,667,639.90
investments
(7) Reserves of cash flow hedges (The	-	-
effective portion of cash flow hedges
and losses)
(8)		Differences on	translation	of		19,071,334.78
foreign currency financial statements
(9)	Amount of other debt investment		116,047,428.48
transferred to current profit and loss

(10) Others					-	-
(II) Other comprehensive income (net	-	-

of tax) attributable to minority interests
VII. Total comprehensive income		411,165,059.67	934,687,509.27
(I)	Total	comprehensive	income	411,165,059.67	806,343,918.96
attributable to the owners of the parent
company
(II)	Total	comprehensive	income		128,343,590.31
attributable to the minority Interests

VIII. Earnings per share:		-	-
(I) Basic earnings per share	-	-
(CNY/share)
(II) Diluted earnings per share	-	-
(CNY/share)

If a business combination involving entities under common control occurs during the reporting period, the net profit realized by the combined party before the combination is CNY 23,516,414.52, and the net profits realized by the combined party in the previous period is CNY 46,960,269.71.

Legal representative: Wu Kunda Person-in-charge of accounting work: Ren Ming Head of the

accounting agency: Yang Xuemei

Parent Company Profit Statement

From January 2020 to December 2020

		Unit: CNY Currency: RMB
Item	For the year ended 31	For the year ended 31
December 2020	December 2019


I. Operating income	1,516,269,724.91	1,886,360,206.96
Interest income	1,342,147,570.66	322,989,120.39


Net commission and fee	1,905,943.40	8,606,495.21
net income

Other operating income	-	23,929,026.01
Less: Operating costs
Tax and surcharges	4,367,451.49	2,020,880.59
Operating expenses	142,981,396.86	171,868,295.95
Sales expenses
Administration expenses

R&D expenses
Financial expenses
Incl: Interest expenses	936,082,592.73	1,174,049,329.48
Interest income
Add: Other income
Investment income ("-" for loss)	234,199,395.57	1,528,892,138.71
Incl: Income from investments in	-18,245,901.50	635,435,929.86
associates and joint ventures

	Derecognized	earnings	of	-	-
financial assets measured at amortized
cost
	Net exposure hedging gains ("-"	-	-
for loss)
	Fair value changes on financial	-64,198,955.30	6,068,970.48
assets ("-" for loss)
	Losses on exchange differences		-2,107,790.33	-4,123,448.48

	Impairment	losses	under	14,490,752.05	49,442,761.15
expected credit loss mode ("-"for loss)

	Asset impairment losses ("-" for	-	-
loss)
	Gains/(Losses)	on	disposal	of	4,323,560.91	-2,095.36
assets ("-" for loss)
II. Operating profits ("-" for loss)			418,347,531.78	488,978,939.79
Add: Non-operating income			82,806,828.88	78,640.01
Less: Non-operating expenses			2,710,311.97	2,822,840.16

III. Total profits ("-" for total loss)		498,444,048.69	486,234,739.64
Less: Income tax expenses			125,914,456.25	121,957,817.55
IV. Net profits ("-" for net loss)			372,529,592.44	364,276,922.09
(I) Net profits of continuous operating
("-" for net loss)
(II)	Net	profits	of		business
termination ("-" for net loss)

V. Net after-tax of other comprehensive
income
(I)	Other	comprehensive	income
items which can not be reclassified
subsequently to profit or loss
1.	Changes	arising	from
remeasurement of defined benefit plans
2.	Other	comprehensive	income
inconvertible to profit or loss under the
equity method
3. Changes in fair value of other
equity instrument investments
4. Changes in fair value	of
corporate credit risk
(II)	Other	comprehensive	income
items reclassified subsequently to profit
or loss
1.	Other	comprehensive	income
convertible to profit or loss under the


equity method
2.	Changes in fair value of other
debt investments
3.	Gains or losses arising from
changes in fair value of available-for-sale
financial assets
4.	Amount from reclassification of
financial assets that is recorded into
other comprehensive income
5.	Gains or losses arising from
reclassification	of	held-to-maturity
investments	as	available-for-sale
financial assets
6.	Impairment provisions for other
creditors investment credit
7.	Reserves of cash flow hedges
(The effective portion of cash flow
hedges and losses)
8.	Differences	on translation	of
foreign currency financial statements
9. Others
VI. Total comprehensive income	372,529,592.44	364,276,922.09

VII. Earnings per share:
(I) Basic earnings per share
(CNY/share)

Diluted earnings per share (CNY/share)

Legal representative: Wu Kunda Person-in-charge of accounting work: Ren Ming Head of the

accounting agency: Yang Xuemei

Consolidated Statement of Cash Flows

From January 2020 to December 2020

				Unit: CNY Currency: RMB

Item		For the year ended 31	For the year ended 31
			December 2020	December 2019

I. Cash flows arising from operating
activities:
Cash received	from	selling
commodities and	providing	labour
services
Net increase of customer deposits
and capital kept for brother
Net increase of loans from central

bank
Net increase of placement from
banks	and	other	financial
institutions
Cash	received	against original
insurance contract
Net	cash	received	from
reinsurance business

Net increase of client deposit and
investment

Net decrease in financial assets	702,734,116.36	2,986,867,783.27
held for trading
Net	decrease	in	other	debt		761,142,285.25
investments
Interest, fees	and	commissions	1,607,037,596.11	1,931,919,404.35
received
Net increase of placement from
banks	and	other	financial
institutions

Net	increase	of	repurchasing
business
Net cash received from entrusted
trading of securities
Refund of taxes
Other	cash	received	from	146,124,324.43	95,179,582.05
operating activities
Subtotal of cash inflow arising	2,455,896,036.90	5,775,109,054.92
from operating activities
Cash	paid	for	purchasing
commodities and	receiving	labour
service
Net increase of client trade and
advance

Net increase of savings with
central bank and brother company

Cash paid for original contract
claim
Net increase of due from banks
and other financial institutions
Cash paid for interest, processing
fee and commission
Cash paid for policy dividend
Net increase in debt investments	3,487,788,714.27	5,486,811,293.79

Cash paid to and for employees	74,404,079.28	97,919,722.69
Payment of various taxes	189,817,778.14	294,076,790.55
Other cash paid for operating	69,787,327.00	317,439,898.58
activities

Subtotal of cash outflow arising	3,821,797,898.69	6,196,247,705.61
from operating activities
Net cash flows arising from	-1,365,901,861.79	-421,138,650.69
operating activities
II. Cash flows arising from investing
activities:
Proceeds	from	disposal/maturity	2,588,311,175.84	4,474,576,574.70
of financial investments
Cash	received	from	investment	219,710,817.73	976,978,411.44
income
Net proceeds from disposal of	-	-
fixed, intangible and other long-term
assets
Net cash received from purchase	950,148.54	-
of subsidiaries
Other	cash received	concerning	-	-
investing activities

Subtotal of cash inflow from	2,808,972,142.11	5,451,554,986.14
investing activities
Purchase of fixed, intangible and	921,472.13	1,830,625.63
other long-term assets
Purchase of investments	184,296,184.08	744,472,050.90
Net increase of loan against	-	-
pledge
Net cash paid for the disposal of	-	1,433,870,479.15
subsidiaries	and	other	operating
entities
Other cash paid for investing	-	-
activities
Subtotal of cash outflow from	185,217,656.21	2,180,173,155.68
investing activities
Net cash flows arising from	2,623,754,485.90	3,271,381,830.46
investing activities
III. Cash flows arising from financing
activities
Cash	received	from	absorbing	-	-
investment
Incl:	Proceeds	from minority	-	-
shareholders of subsidiaries

Proceeds from loans			10,101,093,350.00	12,716,531,466.44
Proceeds from bond issuance		1,347,300,000.00	6,000,000,000.00
Other	cash	received	concerning	-	-
financing activities

Subtotal of cash inflow from	11,448,393,350.00	18,716,531,466.44
financing activities
Repayments of debts issued		12,968,592,580.00	18,497,560,553.16
Cash payments for dividend and	1,171,392,889.88	2,353,845,185.61
profit distribution or interest
Incl: Dividend and profit paid to	-	-
minority	shareholders	by
subsidiaries
Other	cash	paid	concerning	-	-
financing activities
Cash paid for lease liabilities		28,703,114.94	33,248,509.16
Cash paid for redemption of		1,000,000,000.00
perpetual bond

Subtotal of cash outflow from	14,168,688,584.82	21,884,654,247.93
financing activities
Net cash flows arising from	-2,720,295,234.82	-3,168,122,781.49
financing activities
IV. Effects of exchange rate changes	-2,107,790.33	2,613,772.08
on cash and cash equivalents

V. Net increase in cash and cash	-1,464,550,401.04	-315,265,829.64
equivalents

Add: Cash and cash equivalents at	2,978,890,488.18	3,294,156,317.82
beginning of the year
VI. Cash and cash equivalents at	1,514,340,087.14	2,978,890,488.18
end of the year

Legal representative: Wu Kunda Person-in-charge of accounting work: Ren Ming Head of the

accounting agency: Yang Xuemei

Parent Company Cash Flow Statement

From January 2020 to December 2020

				Unit: CNY Currency: RMB
Item		For the year ended 31	For the year ended 31
			December 2020	December 2019
I. Cash flows arising from operating
activities:

Cash received	from	selling
commodities and	providing	labour
services

Refund of taxes

Net decrease in financial assets	885,525,706.55
held for trading
Interest,	fees	and commissions	1,531,181,421.88	750,128,013.24
received
Other		cash	received	from	125,034,223.69	1,884,997,221.86
operating activities
Subtotal of cash inflow arising	2,541,741,352.12	2,635,125,235.10
from operating activities

Cash		paid	for	purchasing
commodities and	receiving	labour
service

Net increase in debt investments	3,354,186,746.27	9,522,900,000.00
Net increase in financial assets		88,039,938.95
held for trading
Cash paid to and for employees	74,002,877.09	73,005,294.72
Payment of various taxes		176,296,432.28	198,062,652.97
Other cash paid for operating	64,897,309.37	150,949,531.70
activities

Subtotal of cash outflow arising	3,669,383,365.01	10,032,957,418.34
from operating activities

Net cash flows arising from	-1,127,642,012.89	-7,397,832,183.24
operating activities
II. Cash flows arising from investing
activities:
Proceeds from	disposal/maturity	2,729,159,420.86	9,002,467,887.02
of financial investments
Cash	received	from	investment	101,896,728.74	710,463,384.35
income
Income	received	from	the	55,990,456.05	462,549,411.20
allocation of the structured entities
Net proceeds from disposal of
fixed, intangible and other long-term
assets
Net cash received from purchase
of subsidiaries
Other	cash received	concerning
investing activities
Subtotal of cash inflow from	2,887,046,605.65	10,175,480,682.57
investing activities
Purchase of fixed, intangible and	728,243.42	644,008.80
other long-term assets
Purchase of investments		890,835,500.00	620,760,000.00

Net cash paid for the disposal of

subsidiaries and	other	operating
entities
Other cash paid for investing
activities
Subtotal of cash outflow from	891,563,743.42	621,404,008.80
investing activities
Net cash flows arising from	1,995,482,862.23	9,554,076,673.77
investing activities

III. Cash flows arising from financing
activities

Cash	received	from	absorbing	-	-
investment
Proceeds from loans		10,101,093,350.00	11,377,517,980.00
Proceeds from bond issuance	1,347,300,000.00	6,000,000,000.00
Other	cash received	concerning	-	-
financing activities
Subtotal of cash inflow from	11,448,393,350.00	17,377,517,980.00
financing activities

Repayments of debts issued	12,968,592,580.00	16,695,279,950.00
Cash payments for dividend and	1,170,334,029.38	1,107,751,279.92
profit distribution or interest
Cash paid for lease liabilities	26,795,962.94	4,555,526.81
Cash paid for redemption of		1,000,000,000.00
perpetual bond
Other	cash	paid	concerning	-	-
financing activities
Subtotal of cash outflow from	14,165,722,572.32	18,807,586,756.73
financing activities

Net cash flows arising from	-2,717,329,222.32	-1,430,068,776.73
financing activities

IV. Effects of exchange rate changes	-2,107,790.33	-4,123,448.48
on cash and cash equivalents
V. Net increase in cash and cash	-1,851,596,163.31	722,052,265.32
equivalents
Add: Cash and cash equivalents at	2,972,809,395.19	2,250,757,129.87
beginning of the year
VI. Cash and cash equivalents at	1,121,213,231.88	2,972,809,395.19
end of the year

Legal representative: Wu Kunda Person-in-charge of accounting work: Ren Ming Head of the

accounting agency: Yang Xuemei

Financial Statements of the Guarantor

(Below is free of text, but serves as the signature page for Huarong Rongde Asset Management Company Limited Annual Report on Corporate Bonds (2020))

Huarong Rongde Asset Management Company Limited

28 April 2021

Summary of Annual Report on Corporate Bonds

Huarong Rongde Asset Management Company Limited

I Important Notice

The Summary is extracted from the full text of the Annual Report; in order to have a comprehensive understanding of the Company's bond matters, operating results and financial positions. For more detailed informatin, the investors shall visit the official website of Shanghai Stock Exchange to read the full Report thoroughly.

II	Basic Information of Corporate Bond

Corporate Bond Abbreviation		Code		Trading Venue for the Listing
						or Transfer

17 融德 02		145787		Shanghai Stock Exchange
20 融德 01		166330		Shanghai Stock Exchange
20 融德 03		166942		Shanghai Stock Exchange
21 融德 G2		175662		Shanghai Stock Exchange
III Major Financial Data of the Company
						Unit: CNY 000 million
			Closing Balance of	Closing Balance	Change in the Closing
			the Reporting	of the Previous	Balance (%)
			Period	Period
Total assets		243.56	251.99		-3.35
Net asset attributable to the		58.34	56.08		4.03
shareholders of the parent
company
Assets-liabilities ratio (%)		76.05	77.75		-2.19

			Amount during the	Amount in the	Change in the Amount
			Reporting Period	same period last	(%)
					year

Operating income		17.32	29.68		-41.64
Net profits attributable to		4.11	3.74		9.89
shareholders of the parent
company
Net cash flows arising from		-13.66	-4.21		224.34
operating activities
IV	Major Matters

There were 0major matters occurring to the Company during the Reporting Period, as detailed below.

	Types of Major Matters			Date of disclosure
					13 January 2020
Major	Litigations,	Arbitrations,	and	Major	15 January 2020
Administrative Penalties				18 August 2020
					24 September 2020
Bankruptcy Matters				-
Being investigated by the competent judicial
authority, or its controlling shareholder/actual	-
controller being listed as a faithless person subject to
enforcement
Being investigated by the competent judicial
authority, or its controlling shareholder/actual	-
controller being listed as a faithless person subject to
enforcement
Risk prompt for suspension or termination of listing	-
Change in the General Manager			16 December 2020

(Below is intentionally left blank)

(This page is free of text, but serves as the signature page for the Summary of Annual Report on Corporate Bonds of Huarong Rongde Asset Management Company Limited)

Huarong Rongde Asset Management Company Limited

28 April 2021

Financial Statements and Auditor's Report For the year ended 31 December 2020

Huarong Rongde Asset Management Company Limited

	Contents
		Page
I.	Auditor's Report	55 - 59
II.	Audited financial statements
	Consolidated Balance Sheet	60
	Company Balance Sheet	61
	Consolidated Income Statement	62
	Company Income Statement	63
	Consolidated Statement of Changes in Owners' Equity	64
	Company Statement of Changes in Owners' Equity	65
	Consolidated Statement of Cash Flows	66
	Company Statement of Cash Flows	67
	Notes to the Financial Statements	68 - 181

Auditor's Report

EYHM (2021) SZ No. 61212177_A01

Huarong Rongde Asset Management Company Limited

TO THE BOARD OF HUARONG RONGDE ASSET MANAGEMENT COMPANY LIMITED:

I. Audit Opinion

We have audited the financial statements of Huarong Rongde Asset Management Company Limited (the "Company"), which comprise the consolidated and company balance sheets as at 31 December 2020 and the consolidated and company income statements, the consolidated and company statements of changes in owners' equity and the consolidated and company statements of cash flow for the year then ended, and the notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and the Company's financial position as at 31 December 2020, and the consolidated and the Company's financial performance and cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises ("ASBEs").

II. Basis of the Audit Opinion

We conducted our audit in accordance with the China Standards on Auditing ("CSAs"). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants (the "Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Auditor's Report (Cont.)

EYHM (2021) SZ No. 61212177_A01

Huarong Rongde Asset Management Company Limited

III. Other information

The management of Huarong Rongde Asset Management Company Limited are responsible for other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report.

Our audit opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusions thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and the Company's financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

IV. Responsibilities of the Management and Those Charged with Governance for the Financial Statements

The Management of the Company is responsible for the preparation and fair presentation of the financial statements in accordance with ASBEs, and for designing, implementing and maintaining such internal controls as the management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

In preparing the financial statements, the management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless the management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Report (Cont.)

EYHM (2021) SZ No. 61212177_A01

Huarong Rongde Asset Management Company Limited

V. Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are generally considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control.

Auditor's Report (Cont.)

EYHM (2021) SZ No. 61212177_A01

Huarong Rongde Asset Management Company Limited

V. Auditors' Responsibilities for the Audit of the Financial Statements (Cont.)

As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (Cont.)

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of the management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Auditor's Report (Cont.)

EYHM (2021) SZ No. 61212177_A01

Huarong Rongde Asset Management Company Limited

(There is no text on this page)

Ernst & Young Hua Ming LLP	Chinese Certified Public Accountant:
	Zhang Fan

Chinese Certified Public Accountant:

Liu Qing

Beijing, China

27 April 2021

Huarong Rongde Asset Management Company Limited
Consolidated Balance Sheet
31 December 2020		Expressed in Renminbi Yuan
Assets	Note VIII	31 December 2020	31 December 2019
Cash and cash at banks	1	1,532,000,594.05		3,038,093,248.74
Financial assets held for trading	2	3,820,105,939.12		6,014,327,207.87
Debt investments	3	16,965,735,052.11		9,559,742,027.71
Long-term equity investments	4	1,301,736,457.36		6,021,277,499.67
Fixed assets	5	240,713,800.15		1,374,106.11
Investment properties	6	-		106,139,838.54
Intangible assets		1,491,787.66		233,158.46
Right-of-use assets	7	43,401,154.91		83,674,455.92
Long-term prepaid expenses	8	519,590.67		26,731,259.13
Deferred tax assets	9	276,432,823.58		241,096,424.30
Other assets	10	174,338,824.26		106,731,907.72
Total assets		24,356,476,023.87		25,199,421,134.17
Liabilities and owners' equity
Liabilities
Short-term borrowings	12	8,854,627,558.09		9,214,334,754.45
Employee benefits payables	13	56,292,002.14		72,748,861.93
Taxes payable	14	77,671,770.51		28,916,855.55
Lease liabilities	15	42,729,006.21		192,739,569.65
Long-term borrowings	16	1,542,994,864.59		2,465,302,603.48
Bonds payable	17	7,322,321,157.80		7,611,496,066.55
Other liabilities	18	625,606,834.48		5,814,652.18
Total liabilities		18,522,243,193.82		19,591,353,363.79
Owners' equity
Paid-in capital	19	1,788,000,000.00		1,788,000,000.00
Surplus reserve	20	722,272,393.28		685,019,434.04
Retained earnings	21	3,323,960,436.77		3,135,048,336.34
Total owners' equity attributable to
the parent company		5,834,232,830.05		5,608,067,770.38
Total owners' equity		5,834,232,830.05		5,608,067,770.38
Total liabilities and owners' equity		24,356,476,023.87		25,199,421,134.17

The Notes to the Financial Statements attached hereafter form an integral part of the financial statements.

These financial statements are signed by the following persons:

Wu Kunda	Ren Ming	Yang Xuemei
Legal	Person-in-charge of	Head of the accounting
representative:	accounting work:		Company Seal
	agency:

Huarong Rongde Asset Management Company Limited
Company Balance Sheet
31 December 2020		Expressed in Renminbi Yuan
Assets	Notes	31 December 2020	31 December 2019
Cash and cash at banks	Note IX. 1	1,138,922,558.08		3,032,013,373.67
Financial assets held for trading	Note IX. 2	4,074,250,405.79		5,023,975,067.64
Debt investments	Note IX. 3	12,858,716,070.19		9,500,420,178.14
Right-of-use assets	Note IX. 4	43,401,154.91		83,674,455.92
Long-term equity investments	Note IX. 5	4,966,866,015.13		6,902,474,350.82
Fixed assets		1,212,629.33		1,373,858.61
Intangible assets		59,437.20		233,158.46
Long-term prepaid expenses		519,590.67		721,051.62
Deferred tax assets	Note IX. 6	323,045,408.74		255,525,313.48
Other assets		91,248,489.17		88,767,403.86
Total assets		23,498,241,759.21		24,889,178,212.22
Liabilities and owners' equity
Liabilities
Short-term borrowings	Note IX. 8	8,854,627,558.09		9,214,334,754.45
Employee benefits payables	Note IX. 9	56,160,841.25		72,748,861.93
Taxes payable		71,939,128.62		21,542,754.48
Lease liabilities	Note IX. 10	42,729,006.21		84,040,955.93
Long-term borrowings	Note IX. 11	1,542,994,864.59		2,465,302,603.48
Bonds payable	Note VIII. 17	7,322,321,157.80		7,611,496,066.55
Other liabilities		1,121,672.10		894,277.29
Total liabilities		17,891,894,228.66		19,470,360,274.11
Owners' equity
Paid-in capital	Note VIII. 19	1,788,000,000.00		1,788,000,000.00
Surplus reserve	Note VIII. 20	722,272,393.28		685,019,434.04
Retained earnings	Note IX. 12	3,096,075,137.27		2,945,798,504.07
Total owners' equity		5,606,347,530.55		5,418,817,938.11
Total liabilities and owners' equity		23,498,241,759.21		24,889,178,212.22

The Notes to the Financial Statements attached hereafter form an integral part of the financial statements.

Huarong Rongde Asset Management Company Limited
Consolidated Income Statement
For the year ended 31 December 2020	Expressed in Renminbi Yuan
	Note VIII	For the year ended 31		For the year ended 31
	December 2020		December 2019
Operating income
Interest income	22	1,356,019,734.98	1,127,569,257.35
Net commission and fee income	23	9,422,410.18	10,810,064.39
Investment income	24	224,533,282.16	1,811,356,095.35
Incl: (Loss) / income from investments in associates and joint
ventures	24	(36,912,909.79)	841,767,126.67
Other income		27,336.58	-
Fair value changes on financial assets	25	121,669,196.71	18,043,967.82
Losses on exchange differences		(2,107,790.33)	(35,215,909.73)
Other operating income		9,151,543.97	35,441,398.76
Gains/(Losses) on disposal of assets		13,664,933.10		(2,095.36)
Total operating income		1,732,380,647.35	2,968,002,778.58
Operating expenses
Less: Interest expenses	26	938,478,495.46	2,003,188,581.85
Tax and surcharges	27	5,105,998.32	4,570,024.83
Operating expenses	28	153,664,679.47	247,223,576.38
Impairment losses under expected credit loss model	29	114,671,167.42	(83,417,485.95)
Impairment losses on other assets		17,391,793.14	-
Other operating expenses		19,352,703.75		46,333,563.55

Total operating expenses		1,248,664,837.56		2,217,898,260.66

Operating profits		483,715,809.79		750,104,517.92
Add: Non-operating income	30	94,839,662.89	38,078,934.20
Less: Non-operating expenses	31	2,744,097.06		3,158,119.14

Total profits		575,811,375.62		785,025,332.98
Less: Income tax expenses	32	164,646,315.95		282,736,309.59

Net profits		411,165,059.67		502,289,023.39
Net profits attributable to the owners of the parent company		411,165,059.67		373,945,433.08
Net profits attributable to minority interests		-	128,343,590.31
Other comprehensive income, net of income tax		-	432,398,485.88
Other comprehensive income attributable to the owners of the
parent company, net of tax		-	432,398,485.88
Other comprehensive income items that will not be		-	12,121,389.48
reclassified to profit or loss
Changes in fair value of other equity instrument
investments		-	12,121,389.48
Other comprehensive income items that may be reclassified		-

subsequently to profit or loss		-	420,277,096.40
Other comprehensive income using the equity method		-	-
that may be reclassified into profit or loss
Changes in fair value of other debt investments		-	387,825,973.04
Credit loss impairment of other debt investments		-	(102,667,639.90)
Amount of other debt investment that are transferred to
profit and loss		-	116,047,428.48
Differences on translation of foreign currency financial		-	19,071,334.78
statements
Total comprehensive income		411,165,059.67	934,687,509.27
Total comprehensive income attributable to the owners of the
	411,165,059.67	806,343,918.96
parent company
Total comprehensive income attributable to the minority
interests		-		128,343,590.31

The Notes to the Financial Statements attached hereafter form an integral part of the financial statements.

Huarong Rongde Asset Management Company Limited
Company Income Statement
For the year ended 31 December 2020	Expressed in Renminbi Yuan
		For the year ended 31		For the year ended 31
	Note IX	December 2020		December 2019
Operating income
Interest income	13	1,342,147,570.66	322,989,120.39
Net commission and fee income	14	1,905,943.40	8,606,495.21
Investment income	15	234,199,395.57	1,528,892,138.71
Incl: (Loss) / income from investments in associates and joint	15		635,435,929.86
ventures	(18,245,901.50)

Fair value changes on financial assets		(64,198,955.30)	6,068,970.48
Losses on exchange differences		(2,107,790.33)	(4,123,448.48)
Other operating income		-	23,929,026.01
Gains/(Losses) on disposal of assets		4,323,560.91		(2,095.36)
Total operating income		1,516,269,724.91	1,886,360,206.96
Operating expenses
Less: Interest expenses	16	936,082,592.73	1,174,049,329.48
Tax and surcharges		4,367,451.49	2,020,880.59
Operating expenses	17	142,981,396.86	171,868,295.95
Impairment losses under expected credit loss model	18	14,490,752.05		49,442,761.15
Total operating expenses		1,097,922,193.13		1,397,381,267.17
Operating profits		418,347,531.78	488,978,939.79
Add: Non-operating income		82,806,828.88	78,640.01
Less: Non-operating expenses		2,710,311.97		2,822,840.16
Total profits		498,444,048.69	486,234,739.64
Less: Income tax expenses	19	125,914,456.25		121,957,817.55
Net profits		372,529,592.44	364,276,922.09
Other comprehensive income, net of income tax		-		-
Total comprehensive income		372,529,592.44		364,276,922.09

The Notes to the Financial Statements attached hereafter form an integral part of the financial statements.

Huarong Rongde Asset Management Company Limited
Consolidated Statement of Changes in Owners' Equity
For the year ended 31 December 2020				Expressed in Renminbi Yuan
		Owners' equity attributable to the parent company			Total owners' equity
		Paid-in capital	Surplus reserve	Retained earnings
I.	Balance on 1 January 2020	1,788,000,000.00		685,019,434.04		3,135,048,336.34	5,608,067,770.38

II.	Changes in this year	-			37,252,959.24		188,912,100.43	226,165,059.67
(I)	Total comprehensive income	-			-		411,165,059.67	411,165,059.67

Capital contribution and reduction

	Capital reduction by	other equity
1.	instruments holders	-	-	-	-

Profit distribution

1.	Appropriation to surplus reserves		-					37,252,959.24				(37,252,959.24)			-
2.	Profit Distribution		-					-				(185,000,000.00)			(185,000,000.00)

III.	Balance on 31 December 2020		1,788,000,000.00				722,272,393.28				3,323,960,436.77			5,834,232,830.05
														Attributable to the parent
							Other comprehensive						company	Minority shareholders'
		Paid-in capital		Other equity instruments	income	Surplus reserve	Retained earnings	Subtotal of owners' equity	equity	Total owners' equity
I.	Balance on 31 December 2018	1,788,000,000.00	1,000,000,000.00	(432,398,485.88)	648,591,741.83		3,074,148,253.03	6,078,341,508.98		2,167,580,602.59	8,245,922,111.57
	Changes in accounting policies	-	-		-	-		(32,613.94)	(32,613.94)		-	(32,613.94)
II.	Balance on 1 January 2019	1,788,000,000.00		1,000,000,000.00	(432,398,485.88)	648,591,741.83		3,074,115,639.09	6,078,308,895.04		2,167,580,602.59	8,245,889,497.63

III.	Changes in this year	-		(1,000,000,000.00)	432,398,485.88	36,427,692.21		60,932,697.25	(470,241,124.66)		(2,167,580,602.59)	(2,637,821,727.25)
(I)	Total comprehensive income	-	-		432,398,485.88	-		373,945,433.08	806,343,918.96		128,343,590.31	934,687,509.27

Capital contribution and reduction

1.	Capital	reduction	by	other	equity							(1,413,159,296.75)
	instruments holders				-	(1,000,000,000.00)	-	-	-	(1,000,000,000.00)	(413,159,296.75)

Profit distribution

1.	Appropriation to surplus reserves	-	-	-	36,427,692.21	(36,427,692.21)	-		-	-
2.	Profit Distribution	-	-	-	-	(124,000,000.00)	(124,000,000.00)	-	(124,000,000.00)
3.	Interest of other equity instruments	-	-	-	-	(22,458,333.34)	(22,458,333.34)	(129,874,743.31)	(152,333,076.65)
4.	Impact of disposal of subsidiaries	-		-		-	-	(130,126,710.28)	(130,126,710.28)	(1,752,890,152.84)	(1,883,016,863.12)

IV.	Balance on 31 December 2019	1,788,000,000.00		-		-	685,019,434.04	3,135,048,336.34	5,608,067,770.38	-	5,608,067,770.38

The Notes to the Financial Statements attached hereafter form an integral part of the financial statements.

Huarong Rongde Asset Management Company Limited
Company Statement of Changes in Owners' Equity
For the year ended 31 December 2020					Expressed in Renminbi Yuan
			Paid-in capital	Surplus reserve	Retained earnings	Total owners' equity
I.	Balance on 1 January 2020		1,788,000,000.00	685,019,434.04	2,945,798,504.07	5,418,817,938.11

II.	Changes in this year		-		37,252,959.24	150,276,633.20	187,529,592.44
(I)	Total comprehensive income	-		-	372,529,592.44	372,529,592.44

Capital contribution and reduction

Capital reduction by other equity instruments holders

Profit distribution

1.	Appropriation to surplus reserves	-			37,252,959.24			(37,252,959.24)		-
2.	Profit Distribution	-			-			(185,000,000.00)		(185,000,000.00)

III.	Balance on 31 December 2020	1,788,000,000.00		722,272,393.28			3,096,075,137.27		5,606,347,530.55

		Paid-in capital	Other equity instruments	Surplus reserve	Retained earnings	Total owners' equity
I.	Balance on 1 January 2019	1,788,000,000.00		1,000,000,000.00	648,591,741.83	2,764,407,607.53	6,200,999,349.36

II.	Changes in this year	-			(1,000,000,000.00)	36,427,692.21	181,390,896.54	(782,181,411.25)
(I)	Total comprehensive income	-			-	-	364,276,922.09	364,276,922.09

Capital contribution and reduction

Capital reduction by other equity instruments holders

(1,000,000,000.00)

Profit distribution

1.	Appropriation to surplus reserves	-	-	36,427,692.21	(36,427,692.21)	-
2.	Profit Distribution	-	-	-	(124,000,000.00)	(124,000,000.00)
3.	Interest of other equity instruments	-	-	-	(22,458,333.34)	(22,458,333.34)

III.	Balance on 31 December 2019	1,788,000,000.00	-	685,019,434.04	2,945,798,504.07	5,418,817,938.11

The Notes to the Financial Statements attached hereafter form an integral part of the financial statements.

Huarong Rongde Asset Management Company Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2020	Expressed in Renminbi Yuan
Note VIII	For the year ended 31	For the year ended 31
December 2020	December 2019

Cash flows arising from operating activities

	Net decrease in financial assets held for trading		702,734,116.36	2,986,867,783.27
	Net decrease in other debt investments		-	761,142,285.25
	Interest, fees and commissions received		1,607,037,596.11	1,931,919,404.35
	Other cash received from operating activities		146,124,324.43	95,179,582.05
	Subtotal of cash inflow arising from operating activities		2,455,896,036.90	5,775,109,054.92
	Net increase in debt investments		3,487,788,714.27	5,486,811,293.79
	Cash paid to and for employees		74,404,079.28	97,919,722.69
	Payment of various taxes		189,817,778.14	294,076,790.55
	Other cash paid for operating activities		69,787,327.00	317,439,898.58
	Subtotal of cash outflow arising from operating activities		3,821,797,898.69	6,196,247,705.61
	Net cash flows arising from operating activities	35	(1,365,901,861.79)	(421,138,650.69)
II.	Cash flows arising from investing activities
	Proceeds from disposal/maturity of financial investments		2,588,311,175.84	4,474,576,574.70
	Cash received from investment income		219,710,817.73	976,978,411.44
	Net cash received from purchase of subsidiaries		950,148.54	-
	Subtotal of cash inflow from investing activities		2,808,972,142.11	5,451,554,986.14
	Purchase of fixed, intangible and other long-term assets		921,472.13	1,830,625.63
	Purchase of investments		184,296,184.08	744,472,050.90
	Net cash paid for the disposal of subsidiaries and other
	operating entities		-	1,433,870,479.15
	Subtotal of cash outflow from investing activities		185,217,656.21	2,180,173,155.68
	Net cash flows arising from investing activities		2,623,754,485.90	3,271,381,830.46

Cash flows arising from financing activities

	Proceeds from loans		10,101,093,350.00	12,716,531,466.44
	Proceeds from bonds issuance		1,347,300,000.00		6,000,000,000.00
	Subtotal of cash inflow from financing activities		11,448,393,350.00		18,716,531,466.44
	Repayments of debts issued		12,968,592,580.00	18,497,560,553.16
	Cash payments for dividend and profit distribution or interest		1,171,392,889.88	2,353,845,185.61
	Cash paid for lease liabilities		28,703,114.94	33,248,509.16
	Cash paid for redemption of perpetual bond		-		1,000,000,000.00
	Subtotal of cash outflow from financing activities		14,168,688,584.82		21,884,654,247.93
	Net cash flows arising from financing activities		(2,720,295,234.82)		(3,168,122,781.49)
IV.	Effects of exchange rate changes on cash and cash equivalents		(2,107,790.33)		2,613,772.08
V.	Net increase in cash and cash equivalents		(1,464,550,401.04)	(315,265,829.64)
	Add: Cash and cash equivalents at beginning of the year	34	2,978,890,488.18		3,294,156,317.82
VI.	Cash and cash equivalents at end of the year	34	1,514,340,087.14		2,978,890,488.18

The Notes to the Financial Statements attached hereafter form an integral part of the financial statements.

Huarong Rongde Asset Management Company Limited
Company Statement of Cash Flows
For the year ended 31 December 2020	Expressed in Renminbi Yuan
	For the year ended 31	For the year ended 31
Note IX	December 2020	December 2019

Cash flows arising from operating activities

	Net decrease in financial assets held for trading		885,525,706.55	-
	Interest, fees and commissions received		1,531,181,421.88	750,128,013.24
	Other cash received from operating activities		125,034,223.69		1,884,997,221.86
	Subtotal of cash inflow arising from operating activities		2,541,741,352.12		2,635,125,235.10
	Net increase in debt investments		3,354,186,746.27	9,522,900,000.00
	Net increase in financial assets held for trading		-	88,039,938.95
	Cash paid to and for employees		74,002,877.09	73,005,294.72
	Payment of various taxes		176,296,432.28	198,062,652.97
	Other cash paid for operating activities		64,897,309.37		150,949,531.70
	Subtotal of cash outflow arising from operating activities		3,669,383,365.01		10,032,957,418.34
	Net cash flows arising from operating activities	21	(1,127,642,012.89)	(7,397,832,183.24)
II.	Cash flows arising from investing activities
	Proceeds from disposal/maturity of financial investments		2,729,159,420.86	9,002,467,887.02
	Cash received from investment income		101,896,728.74	710,463,384.35
	Income received from the distribution of the structured		55,990,456.05		462,549,411.20
	entities
	Subtotal of cash inflow from investing activities		2,887,046,605.65		10,175,480,682.57
	Purchase of fixed, intangible and other long-term assets		728,243.42	644,008.80
	Purchase of investments		890,835,500.00		620,760,000.00
	Subtotal of cash outflow from investing activities		891,563,743.42		621,404,008.80
	Net cash flows arising from investing activities		1,995,482,862.23		9,554,076,673.77

Cash flows arising from financing activities

	Proceeds from loans		10,101,093,350.00	11,377,517,980.00
	Proceeds from bonds issuance		1,347,300,000.00		6,000,000,000.00
	Subtotal of cash inflow from financing activities		11,448,393,350.00		17,377,517,980.00
	Repayments of debts issued		12,968,592,580.00	16,695,279,950.00
	Cash payments for dividend and profit distribution or
	interest		1,170,334,029.38	1,107,751,279.92
	Cash paid for lease liabilities		26,795,962.94	4,555,526.81
	Cash paid for redemption of perpetual bond		-		1,000,000,000.00
	Subtotal of cash outflow from financing activities		14,165,722,572.32		18,807,586,756.73
	Net cash flows arising from financing activities		(2,717,329,222.32)	(1,430,068,776.73)
	Effects of exchange rate changes on cash and cash
IV.	equivalents		(2,107,790.33)		(4,123,448.48)
V.	Net increase in cash and cash equivalents		(1,851,596,163.31)	722,052,265.32
	Add: Cash and cash equivalents at beginning of the year	20	2,972,809,395.19		2,250,757,129.87
VI.	Cash and cash equivalents at end of the year	20	1,121,213,231.88		2,972,809,395.19

The Notes to the Financial Statements attached hereafter form an integral part of the financial statements.

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements
For the year ended 31 December 2020	Expressed in Renminbi Yuan

General Information

Huarong Rongde Asset Management Company Limited (hereinafter referred to as "the Company") is a China-foreign joint venture jointly invested by China Huarong Asset Management Co., Ltd. (hereinafter referred to as "China Huarong") and Cathay Capital Company (NO. 2) Limited (hereinafter referred to as "CCC2") and registered and established in Beijing on 29 August 2006 with the approval of the Ministry of Commerce and other relevant Ministries and Commissions of the People's Republic of China. The Company has been approved by Beijing Administration for Industry and Commerce to obtain a business license with a unified social credit code of 91110000717866354C, with an operating period of 15 years. Legal representative: Wu Kunda. The domicile of the enterprise is Suite B115, Wing 2, No.99 Kechuang 14th Street, Beijing Economic and Technological Development Zone, Beijing. The registered capital of the Company is RMB 1,788,000,000.00, of which RMB 1,060,284,000.00 is contributed by China Huarong, with a shareholding ratio of 59.30%; RMB 727,716,000.00 is contributed by CCC2, with a shareholding ratio of 40.70%.

The main business scope of the Company and its affiliated institutions (the "Group") includes: asset acquisition, recovery, reorganization, operation and management, replacement, transfer or sale of debt investments and debt-paying physical assets, acceptance of entrusted management and disposal of assets services, additional investment in the assets under management for the purpose of enhancing the recovered value of asset disposal, and other approved businesses.

The parent company and ultimate holding company of the company is China Huarong.

Basis for preparation of the financial statements

These financial statements are prepared in accordance with Accounting Standards for Business Enterprises promulgated by the Ministry of Finance of the People's Republic of China (hereinafter referred to as the "Ministry of Finance") and the specific accounting standards, application guidelines, interpretation and other relevant provisions issued subsequently by the Ministry of Finance (collectively referred to as the "Accounting Standards for Enterprises").

The accounting of the Group is on an accrual basis. Except for some financial instruments measured at fair value, the financial statements are based on historical costs. If the asset is impaired, the corresponding impairment provisions shall be accrued in accordance with relevant regulations.

The financial statements have been presented on a going concern basis.

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan

Statement of compliance with Enterprise Accounting Standards

The financial statements present truly and completely the financial positions of the Group and the Company as at 31 December 2020, and the financial performance and the cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises.

IV.	Significant accounting policies and accounting estimate

1. Accounting year

The accounting year of the Group is a calendar year, i.e., from 1 January to 31 December of each year.

2. Functional Currency

RMB is the currency in the main economic environment in which the Company and the Group are operating. The Company's functional and presentation currency is Renminbi ("RMB").

3. Accounting basis and pricing principles

Under the historical cost measurement method, assets are measured according to the amount of cash or cash equivalents paid at the time of purchase or the fair value of the consideration paid. Liabilities shall be measured according to the amount of money or assets actually received due to current obligations assumed, or the contract amount for current obligations assumed, or the amount of cash or cash equivalents expected to be paid in daily activities for the purpose of repaying liabilities.

Fair value is the amount for which the assets could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. Whether the fair value is observable or estimated by valuation techniques, the fair value measured and/or disclosed in the financial statements shall be determined on this basis.

Fair value measurement is divided into three levels based on the observability of the input values of fair value and the importance of these input values to the overall fair value measurement:

The input value at the first level is the unadjusted quotation of the same assets or liabilities at the active market that can be obtained on the measurement date.
The input value at the second level is the relevant assets or liabilities are directly or indirectly observable input value in addition to the first-level input value.
The input value at the third level is the unobservable input value of related assets or liabilities.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

4. Business combination

Business combinations are classified into business combinations involving entities under common control and business combinations not involving entities under common control.

Business combination involving entities under common control

A business combination involving entities under common control is a business combination in which all of the combining entities are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. In a business combination involving entities under common control, the entity that, at the combination date, obtains control of another combining entity is the absorbing entity, while that other combining entity is the entity being absorbed. The combination date is the date on which the absorbing entity effectively obtains control on the entity being absorbed.

The assets and liabilities (including goodwill arising from the ultimate controlling party's acquisition of the entity being absorbed) that are obtained by the absorbing entity in a business combination involving entities under common control shall be measured on the basis of their carrying amounts in the financial statements of the ultimate controlling party at the combination date. The difference between the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the combination (or the aggregate book value of shares issued as consideration) shall be adjusted to capital premium under capital reserves [and the balance transferred from capital reserves under the old accounting system]. If the capital premium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.

Business combination not under common control

A business combination not involving entities under common control is a business combination in which all of the combining entities are not ultimately controlled by the same party or parties both before and after the combination. In a business combination not involving entities under common control, the entity that, on the acquisition date, obtains control of another combining entity is the acquirer, while that other combining entity is the acquiree. The acquisition date is the date on which the acquirer effectively obtains control of the acquiree.

The acquirer shall measure the acquiree's identifiable assets, liabilities and contingent liabilities acquired in the business combination at their fair values on the acquisition date.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

4. Business combination (Cont.)

Goodwill

Goodwill is initially recognised and measured at cost, being the excess of the aggregate of the fair value of the consideration transferred (or the fair value of the equity securities issued) and any fair value of the Group's previously held equity interest in the acquiree over the Group's interest in the fair value of the acquiree's net identifiable assets. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Where the aggregate of the fair value of the consideration transferred (or the fair value of the equity securities issued) and any fair value of the Group's previously held equity interest in the acquiree is lower than the Group's interest in the fair value of the acquiree's net identifiable assets, the Group reassesses the measurement of the fair value of the acquiree's identifiable assets, liabilities and contingent liabilities and the fair value of the consideration transferred (or the fair value of the equity securities issued), together with the fair value of the Group's previously held equity interest in the acquiree. If after that reassessment, the aggregate of the fair value of the consideration transferred (or the fair value of the equity securities issued) and the Group's previously held equity interest in the acquiree is still lower than the Group's interest in the fair value of the acquiree's net identifiable assets, the Group recognises the remaining difference in profit or loss.

5. Consolidated financial statements

The scope of consolidation of the consolidated financial statements is determined on the basis of control. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. If the changes of the relevant facts and circumstances resulting in the definition of control involved in the changes of relevant elements, the Group will re-evaluate whether subsidiaries are controlled.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

5. Consolidated financial statements (Cont.)

For subsidiaries acquired through business combinations involving entities under common control, no matter at what point in the reporting period, the combination of the enterprise shall be deemed to be included in the consolidation scope of the Group from the date when the subsidiary is controlled by the ultimate controlling party, and its operating results and cash flow since the beginning of the earliest period of the reporting period have been appropriately included in the consolidated income statement and the consolidated statement of cash flows.

The major accounting policies and accounting periods adopted by subsidiaries shall be determined in accordance with the accounting policies and accounting periods uniformly stipulated by the Company.

The impact of internal transactions between the Company and its subsidiaries and among subsidiaries on the consolidated financial statements shall offset upon combination.

The shares of the subsidiary's owner's equity that are not attributable to the parent company shall be listed as "Minority shareholders' equity" under the item of owners' equity in the consolidated balance sheet. The share of the subsidiary's current net profit or loss attributable to minority shareholders' equity is listed under the item of "Net profits attributable to minority interests" under the item of net profits in the consolidated income statement. The share of the subsidiary's current comprehensive gains attributable to minority shareholders' equity is listed under the item of "Total comprehensive income attributable to the minority interests" under the item of total comprehensive income in the consolidated income statement.

If the current losses of the subsidiary shared by the minority shareholders exceed the minority shareholders' equity of the owners' equity at the beginning of the period, the balance shall be written off against the minority shareholders' equity.

For transactions that purchase minority equity of a subsidiary or dispose of part of equity investment but do not lose control over the subsidiary, the carrying value of shareholders' equity and minority shareholders' equity attributable to the parent company shall be calculated as equity transaction to reflect changes in their related equity in the subsidiary. The difference between the adjustment amount of minority shareholders' equity and the fair value of the consideration paid/received shall be adjusted as the capital reserves. The retained earnings shall be adjusted if the capital reserves are insufficient to offset.

Acquisition of the equity of the acquiree through multiple transactions in a phased manner, resulting in a business combination not involving entities under common control, shall be handled separately as a "package deal": if it belongs to a "package deal", each transaction shall be treated as a transaction with control in accounting treatment. If not in the "package transaction", accounting treatment shall be conducted on the purchase date as a transaction to acquire control rights; The equity of the acquiree held before the purchase date shall be remeasured according to the fair value of the equity on the purchase date, and the difference between the fair value and the carrying value shall be included in the profits and losses of the current period; for the equity of the acquiree held before the purchase date involving other comprehensive income and changes in other

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan

owner's equity under the equity method, it shall be transferred to the current income on the date of acquisition.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

5. Consolidated financial statements (Cont.)

In the event of loss of control over the original subsidiary due to the disposal of part of the equity investment or for other reasons, the remaining equity shall be re-measured at its fair value on the date of loss of control. The difference between the sum of the consideration received for disposal of equity interest and the fair value of remaining equity interest less the net assets attributable to the original subsidiary calculated continuously since the purchase date based on shareholding percentage before disposal are recognized in investment gain in the period when the control is lost and offset for the goodwill. Other comprehensive income related to equity investment in the subsidiary is transferred to investment profits and losses at the time of control lost.

6. Cash and cash equivalents

Cash means cash on hand of the Company and deposits that can be readily withdrawn on demand. Cash equivalents mean short-term and high-liquidity investments held by the Group that are easily converted to cash in the known amount and have little risk in value change.

7. Financial instruments

The Group recognises a financial asset or a financial liability when it becomes a party to the contractual provisions of a financial instrument.

For the purchase or sale of financial assets with a regular method, the assets to be received and the liabilities to be assumed for this purpose shall be recognized on the transaction date, or the sold assets shall be derecognized on the transaction date.

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Transaction date refers to the date when the Group promises to buy or sell financial assets.

During the initial recognition, the financial assets and financial liabilities are measured at their fair value. For financial assets and financial liabilities measured at fair value with changes included in the current profit and loss, the related transaction costs are directly recorded in profit or loss; for other types of financial assets and financial liabilities, the related transaction costs are recorded in the initial recognition amount. When the Group recognizes accounts receivable that do not include significant financing components or do not consider financing components in contracts not exceeding one year in accordance with the Accounting Standards for Business Enterprises No.14-Income (the "Income Standards"), the initial measurement shall be made according to the transaction price defined in the Income Standards.

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)
7．	Financial instruments (Cont.)

The effective interest rate method refers to the method of calculating the amortized cost of financial assets or financial liabilities and including interest income or interest expense allocation in each accounting period.

The effective interest rate refers to the interest rate used to discount the estimated future cash flow of a financial asset or financial liability in the estimated duration into the balance of the financial asset or the amortized cost of the financial liability. When determining the effective interest rate, the expected cash flow shall be estimated on the premise that all contractual terms of financial assets or financial liabilities are considered (such as prepayment, rollover, call option or other similar options, etc.), but the expected credit loss shall not be considered.

The amortized cost of a financial asset or financial liability is based on the initially recognized amount of the financial asset or financial liability minus the repaid principal, plus or minus the accumulated amortization amount formed by amortizing the difference between the initially recognized amount and the maturity amount with the effective interest rate method, and then minus the accrued loss reserves on an accumulative basis (only applicable to financial assets).

7.1 Classification and Measurement of Financial Assets

After initial recognition, the Group shall measure different classes of financial assets at amortized cost and fair value with changes included in other comprehensive income or measured at fair value with changes included in the current profit and loss for subsequent measurement.

According to the contractual terms of financial assets, the cash flow generated on a specific date shall be only the payment of principal and interest based on the unpaid principal amount, and the Group's business model for managing the financial asset aims to collect contractual cash flow. The Group classifies the financial asset as a financial asset measured at amortized cost. Such financial assets mainly include cash and cash at banks, receivables, other receivables, debt investments and other financial assets.

According to the contractual terms of financial assets, the cash flow generated on a specific date is only the payment of principal and interest based on the unpaid principal amount. And if the Group's business model for managing the financial asset aims at both receiving contractual cash flow and selling the financial asset, the financial asset shall be classified as a financial asset measured at fair value with changes included in other comprehensive income. Such financial assets are listed as other debt investments.

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)
7．	Financial instruments (Cont.)

7.1 Classification and Measurement of Financial Assets (Cont.)

Financial assets measured at fair value with changes included in the current profit and loss include financial assets classified as measured at fair value with changes included in the current profit and loss and financial assets designated as measured at fair value with changes included in the current profit and loss, which are listed in financial assets held for trading.

Financial assets that do not meet the conditions of financial assets classified as measured at amortized cost or financial assets classified as measured at fair value with changes included in other comprehensive income are classified as measured at fair value with changes included in the current profit and loss.
At the time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Group may irrevocably designate financial assets as financial assets measured at fair value with changes included in the current profit and loss.

At the time of initial recognition, the Group may irrevocably designate non-transactional equity instruments other than contingent consideration recognized in a business combination involving entities not under common control as financial assets measured at fair value with changes included in other comprehensive income on the basis of a single financial asset. Such financial assets are listed as investments in other equity instruments.

The financial asset that meets one of the following conditions indicates that the purpose of holding the financial asset by the Group is for a transaction:

The purpose of acquiring relevant financial assets is mainly to sell them in the near future.
Relevant financial assets are part of a centrally managed portfolio of identifiable financial instruments at the time of initial recognition, and there is objective evidence to show that there is actually a short-term profit model in the near future.
Relevant financial assets are derivatives. Except for derivatives that meet the definition of financial guarantee contracts and derivatives designated as effective hedging instruments.

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)
7．	Financial instruments (Cont.)

7.1 Classification and Measurement of Financial Assets (Cont.)

7.1.1 Financial assets measured by amortized cost

Financial assets measured at amortized cost shall use the effective interest rate method and be subsequently measured in amortized cost. Gains or losses arising from impairment or derecognition shall be included in current profit and loss.

The Group recognizes interest income on financial assets measured at amortized cost according to the effective interest rate method. Except for the following circumstances, the Group shall calculate and determine interest income by multiplying the balance of financial assets by the effective interest rate:

For purchased or generated financial assets with credit impairment, the Group shall calculate and determine the interest income based on the amortized cost of the financial assets and the credit-adjusted effective interest rate from the initial recognition.
For financial assets purchased or generated without credit impairment but have undergone credit impairment in subsequent periods, the Group shall calculate and determine the interest income according to the amortized cost and effective interest rate of the financial assets in subsequent periods. If there is no credit impairment on the financial instruments due to its credit risk improvement in the subsequent period, and such improvement is linked to an event occurring after the application of the above provisions, the Group shall calculate and determine the interest income by multiplying the effective interest rate by the balance of the financial asset.

7.1.2 Financial assets at fair value through other comprehensive income ("FVTOCI")

Impairment losses or gains related to financial assets classified as FVTOCI included in other comprehensive income shall be included in current profits and losses. Interest income and exchange gains and losses calculated by the effective interest rate method shall be included in current profit and loss, except that changes in fair value of such financial assets are included in other comprehensive income. The amount of the financial asset included in the profit and loss of each period shall be equal to the amount deemed to have been measured by amortized cost and included in the profit and loss of each period. When the financial asset is derecognized, the accumulated gains or losses previously included in other comprehensive income shall be transferred from other comprehensive income and included in the current profit and loss.

After the investment in non-transactional equity instruments is designated as a financial asset measured at fair value with changes included in other comprehensive income, changes in the fair value of the financial asset shall be recognized in other comprehensive income. When the financial asset is derecognized, the accumulated gains or losses previously included in other comprehensive income shall be transferred out of other comprehensive income and included in retained earnings. During the period when the Group holds the equity instruments for investment, dividend income is recognized and included in the current profit and loss when the Group's right to receive dividends has been established, economic benefits related to dividends (except dividend income partially recovered from investment cost) are likely to flow into the Group, and the amount

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan

of dividends can be reliably measured.

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)
7．	Financial instruments (Cont.)

7.1 Classification and Measurement of Financial Assets (Cont.)

7.1.3 Financial assets at fair value through profit or loss ("FVTPL")

Financial assets at fair value through profit or loss are subsequently measured at fair value. Any gains or losses arising from changes in the fair value and any dividends or interest income earned on the financial assets are recognized in the profit or loss.

7.2 Impairment on financial instruments

The Group carries out impairment accounting treatment and recognizes loss reserves on financial assets measured at amortized cost and financial assets measured at fair value with changes included in other comprehensive income on the basis of expected credit losses.

For contractual assets or receivables arising from transactions regulated by income standards that do not contain significant financing components or consider financing components in contract not exceeding one year, the Group shall measure the loss reserve according to the amount equivalent to the expected credit loss during the whole duration.

For other financial instruments, except for the purchased or generated financial assets with credit impairment, the Group shall evaluate the changes in credit risk of relevant financial instruments since initial recognition on each balance sheet date. If the credit risk of the financial instrument has increased significantly since the initial recognition, the Group shall measure its loss provision according to the amount equivalent to the expected credit loss of the financial instrument in the whole duration; if the credit risk of the financial instrument has not increased significantly since the initial recognition, the Group shall measure its loss reserves according to the amount equivalent to the expected credit loss of the financial instrument in the next 12 months. The increase or reversal amount of credit loss reserve shall be included in the current profits and losses as impairment losses or gains, except for financial assets classified as measured at fair value with changes included in other comprehensive income. For financial assets classified as measured at fair value with changes included in other comprehensive income, the Group shall recognize its credit loss reserve in other comprehensive income, and include impairment losses or gains in current profits and losses without reducing the carrying value of the financial assets listed in the balance sheet.

In the previous accounting period, the Group has measured the loss reserve according to the amount equivalent to the expected credit loss during the whole duration of the financial instruments. But if there is no significantly increased credit risk of the financial instrument since initial recognition at the current balance sheet date, the Group shall measure the loss provision of the financial instruments on the current balance sheet date according to the amount equivalent to the expected credit loss in the next 12 months, and the reversal amount of the loss provision thus formed shall be included in the current profits and losses as impairment gains.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

7. Financial instruments (Cont.)

7.2 Impairment on financial instruments (Cont.)

7.2.1 Significant increase of credit risk

The Group uses reasonable and well-founded prospective information available to determine whether the credit risk of financial instruments has increased significantly since initial recognition by comparing the risk of default on the balance sheet date with the risk of default on the initial recognition date. For loan commitments and financial guarantee contracts, when the Group applies the impairment provisions for financial instruments, the date when the Group becomes a party making irrevocable commitments shall be regarded as the initial recognition date.

The Group shall consider the following factors when assessing whether the credit risk has increased significantly:

Whether the external credit rating (if applicable) or internal credit rating of financial instruments has actually changed or expected to change significantly.
Whether the external market indicators of credit risk of the same financial instrument or similar financial instruments with the same expected duration have changed significantly, these indicators include credit spread and credit default swap price for borrowers.
Whether the regulatory, economic or technological environment in which the debtor is located has undergone significant negative changes.
Whether the actual or expected operating results of the debtor have changed significantly.
Negative changes in business, financial or economic conditions that are expected to lead to significant changes in the debtor's ability to fulfill its repayment obligations.

Regardless of whether the credit risk has increased significantly after the above assessment, when the contract payment of the financial instruments has been overdue for more than (inclusive) 30 days, it indicates that the credit risk of the financial instrument has increased significantly.

On the balance sheet date, if the Group decides that the credit risk of the financial instruments is low, the Group assumes that the credit risk of the financial instruments has not increased significantly since initial recognition. If the default risk of a financial instrument is relatively low, the borrower has a strong ability to fulfill its contractual cash flow obligations in a short period of time, and even if there are negative changes in the economic situation and operating environment for a long term, yet may not necessarily affect the borrower's performance of its contractual cash obligations, the financial instruments shall be deemed to have relatively low credit risk.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

7. Financial instruments (Cont.)

7.2 Impairment on financial instruments (Cont.)

7.2.2 Financial assets with impairment on credit

In the case of the Group expects the occurrence of one or more events that have a negative effect on the future cash flow of financial assets, such financial assets has undergone credit impairment. Evidence for credit impairment of financial assets includes the following observable information:

Material financial difficulties have occurred to the issuer or the debtor;
The debtor has violated the contract, such as default or overdue payment of interest or principal;
The creditor makes a compromise that would not have been made in any other case given financial or contractual considerations relating to the debtor's financial difficulties;
The debtor is likely to close down or make other financial reorganization;
Financial difficulties of the issuer or the debtor cause disappearance of the active market of such financial assets.
A financial asset is purchased or generated at a great discount, which reflects the fact of occurrence of credit loss.

Based on the Group's internal credit risk management, when the internally suggested or externally obtained information indicates that the debtor of the financial instruments cannot fully repay creditors including the Group (regardless of any guarantee obtained by the Group), the Group shall decide that a default event has occurred.

Regardless of the above evaluation results, if the payment of the financial instruments contract has been overdue for more than 90 days (including 90 days), the Group shall assume that a default has occurred on the financial instruments.

7.2.3 Recognition of expected credit loss

When the Group fails to obtain evidence of credit loss on the basis of a single financial asset, the Group shall use an impairment matrix to determine the credit loss of relevant financial instruments on the basis of a combination of financial assets. The Group classifies financial instruments into different groups based on common risk characteristics. The common credit risk characteristics adopted by the Group include the type of financial instruments, overdue status, industry, scale and nature of debtor, and available external rating information.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

7. Financial instruments (Cont.)

7.2 Impairment on financial instruments (Cont.)

7.2.3 Recognition of expected credit loss(Cont.)

The Group determines the expected credit losses of relevant financial instruments according to the following methods:

For financial assets, including debt investments and other debt investments held by the Group, credit loss shall be the present value of the difference between the contractual cash flow to be received by the Group and the cash flow expected to be received.
For financial guarantee contracts, the credit loss shall be the expected payment amount that the Group will make to the holder of the contract for the credit loss incurred, deducts the present value of the difference between the amount that the Group expects to collect from the holder of the contract, the debtor or any other party.
For financial assets with credit impairment on the balance sheet date but are not purchased or generated financial assets with credit impairment, the credit loss shall be the difference between the balance of the financial asset and the present value of the estimated future cash flow discounted at the original effective interest rate.

The factors reflected in the Group's method of measuring expected credit losses of financial instruments include: unbiased probability weighted average amount determined by evaluating a series of possible results; Time value of money; Reasonable and well- grounded information about past events, current conditions and future economic conditions that can be obtained at the balance sheet date without unnecessary extra cost or effort.

7.2.4 Write-down of financial assets

When the Group no longer reasonably expects the contractual cash flow of a financial asset to be fully or partially recovered, the balance of the financial asset shall be directly written down. This write-down constitutes the derecognition of relevant financial assets.

7.3 Transfer of financial assets

Financial assets that meet one of the following conditions are derecognized: (1) The contractual right to receive the cash flow of the financial asset is terminated; (2) The financial assets have been transferred, and almost all the risks and rewards of ownership of the financial assets are transferred to the transferee; (3) The financial assets have been transferred. Although the enterprise has neither transferred nor retained almost all the risks and rewards in the ownership of the financial assets, it has given up control of the financial assets.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

7. Financial instruments (Cont.)

7.3 Transfer of financial assets (Cont.)

If the Group neither transfers nor retains almost all risks and rewards in the ownership of the financial asset, and retains control over the financial asset, the transferred financial asset shall continue to be recognized according to the extent to which it continues to be involved in the transferred financial asset, and relevant liabilities shall be recognized accordingly. The Group measures related liabilities in the following methods:

Where the transferred financial assets are measured at amortized cost, the carrying value of the relevant liabilities shall be equal to the carrying value of the financial assets that continue to be involved in the transfer minus the amortized cost of the rights retained by the Group (if the Group retains the relevant rights due to the transfer of financial assets) plus the amortized cost of the obligations assumed by the Group (if the Group assumes the relevant obligations due to the transfer of financial assets), and the related liabilities shall not be designated as financial liabilities measured at fair value with changes included in the current profit and loss.
Where the transferred financial assets are measured at fair value, the carrying value of the relevant liabilities shall be equal to the carrying value of the financial assets that continue to be involved in the transfer minus the fair value of the rights retained by the Group (if the Group retains the relevant rights due to the transfer of financial assets) plus the fair value of the obligations assumed by the Group (if the Group assumes the relevant obligations due to the transfer of financial assets), the fair value of the rights and obligations shall be the fair value when measured on an independent basis.

For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the difference between the carrying value of the transferred financial assets on the date of derecognition and the sum of the consideration received due to the transfer of financial assets and the corresponding derecognition portion of the accumulated amount of changes in fair value originally included in other comprehensive income shall be included in the current profit and loss. If the financial assets transferred by the Group are non- transactional equity instruments investments designated to be measured at fair value with changes included in other comprehensive income, the accumulated gains or losses previously included in other comprehensive income shall be transferred out of other comprehensive income and included in retained earnings.

Where the partial transfer of financial assets meets the conditions for derecognition, the carrying value of the financial assets in their entirety before the transfer is allocated between the derecognition part and the part for further recognition according to their respective relative fair values on the transfer date. The difference between the sum of the consideration received by the derecognition part and the amount corresponding to the derecognition part in the accumulated amount of changes in fair value originally included in other comprehensive income, and the carrying value of the derecognition part on the derecognition date, shall be included in the current profit and loss. If the financial assets transferred by the Group are non-transactional equity instruments investments designated to be measured at fair value with changes included in other comprehensive income, the accumulated gains or losses previously included in other comprehensive income shall be transferred out of other comprehensive income and included in retained

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
earnings.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

7. Financial instruments (Cont.)

7.3 Transfer of financial assets (Cont.)

If the entire transfer of financial assets does not meet the conditions for derecognition, the Group shall continue to recognize the entire transferred financial assets, and the consideration received due to the transfer of assets shall be recognized as liabilities upon receipt.

7.4 Classification of financial liabilities and equity instruments

The Group, based on the contractual terms of the issued financial instruments and the economic substance reflected in them, rather than just in legal form, combined with the definition of financial liabilities and equity instruments, classifies the financial instrument or its components as financial liabilities or equity instruments at the time of initial recognition.

7.4.1 Classification, recognition and measurement of financial liabilities

The Group's financial liabilities are, on initial recognition, classified into financial liabilities measured at fair value with changes included in the current profit and loss and other financial liabilities.

Financial liabilities measured at fair value with changes included in the current profit and loss.

Financial liabilities measured at fair value with changes included in the current profit and loss, including financial liabilities held for trading (including derivatives that belong to financial liabilities) and financial liabilities designated as financial liabilities measured at fair value with changes included in the current profit and loss. Financial liabilities measured at fair value with changes included in the current profit and loss shall be listed as financial liabilities held for trading.

The financial liabilities that meet one of the following conditions indicates that the purpose of assuming the financial liabilities by the Group is for transaction:

The purpose of assuming related financial liabilities is mainly for repurchase in the near future.
Relevant financial liabilities are part of a centrally managed portfolio of identifiable financial instruments at the time of initial recognition, and there is objective evidence to show there is actually a short-term profit model in the near future.
Related financial liabilities are derivatives. Except for derivatives that meet the definition of financial guarantee contracts and derivatives designated as effective hedging instruments.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

7. Financial instruments (Cont.)

7.4 Classification of financial liabilities and equity instruments (Cont.)

7.4.1 Classification, recognition and measurement of financial liabilities(Cont.)

The Group may designate financial liabilities that meet one of the following conditions as financial liabilities measured at fair value with changes included in the current profit and loss upon initial recognition: (1) the designation can eliminate or significantly reduce accounting mismatches; (2) According to the risk management or investment strategy stated in the Group's official documents, manage and evaluate the financial liability portfolio or the financial asset and financial liability portfolio on the basis of fair value, and report to key management personnel within the Group on this basis; (3) Eligible mixed contracts containing embedded derivatives.

Financial liabilities held for trading are subsequently measured by fair value. Gains or losses arising from changes in fair value and dividends or interest expenses related to such financial liabilities shall be included in current profit and loss.

For financial liabilities designated to be measured at fair value with changes included in the current profit and loss, changes in fair value of the financial liabilities caused by changes in the Group's credit risk shall be included in other comprehensive income, and other changes in fair value shall be included in the current profit and loss. When the financial liability is derecognized, the accumulated change in its fair value arising from the change in its own credit risk previously included in other comprehensive income shall be transferred to retained earnings. Dividends or interest expenses related to these financial liabilities shall be included in the current profit and loss. If the effects of changes in the financial credit's own credit risk in the above manner will cause or expand the accounting mismatch in profit or loss, the Group's total gains or losses on the financial liability (including the impact of changes in its own credit risk amount) shall be included in the current profit and loss.

7.4.2 Other financial liabilities

Except for the transfer of financial assets that do not meet the conditions for derecognition or continued involvement in the financial liabilities and financial guarantee contracts formed by the transferred financial assets, other financial liabilities are classified as financial liabilities measured at amortized cost, which shall be subsequently measured at amortized cost. Gains or losses arising from derecognition or amortization are included in the current profit and loss.

If the Group amends or renegotiates the contract with the counterparty and does not lead to the derecognition of the financial liabilities subsequently measured according to amortized cost, but leads to changes in the contract cash flow, the Group shall recalculate the carrying value of the financial liabilities and include the relevant gains or losses into the current profit and loss. The recalculated carrying value of the financial liability shall be determined by the Group based on the present value of the renegotiated or modified contractual cash flow discounted at the original effective interest rate of the financial liability. For all costs or expenses incurred in amending or renegotiating the contract, the Group shall adjust the carrying value of the modified financial liabilities and amortize them over the remaining period of the modified financial liabilities.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

7.5 Derecognition of financial liabilities

The Group derecognizes a financial liability (or part of it) when the present underlying obligation (or part of it) is discharged or cancelled or has expired. The Group (borrower) and the lender sign an agreement to replace the original financial liability by assuming a new financial liability, and the contract terms of the new financial liability and the original financial liability are substantially different, the Group shall derecognize the original financial liability and new financial liabilities shall be recognized.

When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.

7.6 Equity instruments

Equity instruments refer to contracts that can prove the remaining equity of the Group's assets after all liabilities are deducted. The Group issues (including refinancing), repurchases, sells or cancels equity instruments as changes in equity. The Group does not recognize changes in the fair value of equity instruments. The transaction costs related to equity transactions are deducted from equity.

The Group's allocation to holders of equity instruments shall be treated as profit distribution, and the stock dividends issued will not affect the total shareholders' equity.

7.7 Offsetting financial assets and financial liabilities

When the Group has the legal rights to offset the financial assets and financial liabilities of the recognized amount, and such legal rights are currently enforceable, and the Group plans to settle the net assets at the same time or realize the financial assets and liquidate the financial liabilities, the offsetting net amount of financial assets and financial liabilities shall be listed in the balance sheet. Besides, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

8. Long-term equity investments

8.1 Determine the basis for control, joint control and significant impact on the invested entity

Control means that the investor has the power over the investee, enjoys variable returns by participating in the related activities of the investee, and has the ability to use the power over the investee to influence the amount of returns. Joint control refers to the common control over an arrangement in accordance with relevant agreements, and related activities of the arrangement must be agreed upon by the parties sharing control rights before they can make decisions. Significant influence refers to the right of participation in the decisions of financial and operational policies of the investee, not including the right to control, or jointly control over other participants. When determining whether the invested entity can be controlled or exerted significant influence, potential voting factors such as current convertible corporate bonds and current executable warrants of the invested entity held by investors and other parties have been considered.

8.2 Determination of initial investment cost

For long-term equity investments acquired through a business combination involving entities not under common control, the enterprise shall determine the combination cost on the purchase date as the initial investment cost of the long-term equity investment.

Such intermediary expenses incurred by the acquiree or the purchaser for a business combination as audit expense, legal service expense, evaluation and consultation expense, and other related administrative expenses shall be included in the current profit and loss.

For long-term equity investments acquired by means other than those formed by business combination, the initial measurement shall be carried out based on costs. For the additional investment that can exert significant influence on the invested entity or implement joint control but does not constitute control, the long-term equity investments cost is determined as the sum of the fair value of the original equity investment plus the new investment cost in accordance with "Accounting Standards for Business Enterprises No. 22-Recognition and Measurement of Financial Instruments".

8.3 Methods of subsequent measurement and recognition of gains and losses

8.3.1 Income from long-term equity investments calculated by cost method

The cost method is used to account for long-term equity investments in subsidiaries in the Company's financial statements. Subsidiaries refer to the invested entities over which the Group can exercise control.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

8. Long-term equity investments (Cont.)

8.3 Methods of subsequent measurement and recognition of gains and losses (Cont.)

8.3.1 Income from long-term equity investments calculated by cost method (Cont.)

Income from long-term equity investments calculated by cost method shall be measured according to the initial investment cost. Adding or recovering investment to adjust the cost of long-term equity investments. The current investment income shall be recognized according to the cash dividends or profits declared and distributed by the invested entity.

8.3.2 Long-term equity investments accounted for using equity method

The Group uses equity method to calculate the long-term equity investments in associates and joint ventures. Associates refer to the invested entities that the Group can exert significant influence on and joint ventures refer to a joint arrangement where the Group thereto only enjoy rights in and to net assets of such arrangement.

When the equity method is adopted for accounting, where the initial investment cost of the long-term equity investment is greater than the fair value share of the identifiable net assets of the invested entity, the initial investment costs of long-term equity investment shall not be adjusted; where the initial investment costs of long-term equity investments is less than the fair value share of the identifiable net assets of the invested entity, the difference shall be included in the current profit and loss, and the costs of long-term equity investments shall be adjusted.

When the equity method is adopted for accounting, it shall separately recognize the investment income and other comprehensive income in accordance with the share of net profit and loss and other comprehensive income realized by the invested entity, which shall be enjoyed or shared, and at the same time adjust the carrying value of the long- term equity investment; the carrying value of the long-term equity investments shall be reduced in accordance with the portion of the profits or cash dividends declared to distribute by the invested entity; for the other changes in the owners' equity other than the net profit or loss, other comprehensive income and profit distribution of the invested entity, the carrying value of the long-term equity investment will be adjusted and included in the capital reserves. In recognizing the share of net profit and loss of the invested entity, the Company shall, on the basis of obtaining the fair value of the identifiable assets of the invested entity at the time of investment, the net profits of the invested entity shall be adjusted and recognized. If the accounting policies and accounting period adopted by the invested entity are inconsistent with the Group, the financial statements of the invested entity shall be adjusted in accordance with the Group's accounting policies and periods, and investment income and other comprehensive income shall be recognized accordingly. For the transactions conducted between the Group and associates and joint ventures, if the assets invested or sold do not constitute a business, the unrealized internal transaction gains and losses shall be calculated based on the proportion enjoyed by the group to be offset, and investment gains and losses shall be determined on this basis. However, the unrealized internal transaction losses incurred by the Group and the invested entity are the impairment loss of the transferred assets and shall not be offset.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

8. Long-term equity investments (Cont.)

8.3 Methods of subsequent measurement and recognition of gains and losses (Cont.)

8.3.2 Long-termequity investments accounted for using equity method(Cont.)

When recognizing that the net loss incurred by the invested entity that should be shared, the carrying value of the long-term equity investments and other long-term equity that substantially constitute the net investment in the invested entity should be reduced to zero. In addition, if the Group has an obligation to undertake additional losses to the invested entity, the expected liabilities shall be recognized according to the provisions and included in the current investment losses. If the invested entity records net profits in a later period, the Group shall resume the recognition of the revenue sharing amount after the unrecognized loss sharing amount is made up for with revenue sharing amount.

8.4 Disposal of long-term equity investments

With regard to the disposal of long-term equity investments, the difference between the carrying value and the actual amount obtained is included in the current profits and losses. For long-term equity investments accounted for using equity method, if the remaining equity after disposal is still accounted for using equity method, other comprehensive income originally recognized by the equity method shall be accounted for on the same basis as the direct disposal of related assets or liabilities by the invested entity, and shall be carried forward to the current profit and loss in proportion; The owners' equity recognized due to changes in the other owner's equity except for net profit and loss, other comprehensive income and profit distribution of the investee shall be carried forward to the current profit and loss in proportion.

If the Group loses control of the invested entity due to the disposal of part of its equity investment, when preparing individual financial statements, if the remaining equity after the disposal can exercise joint control or exert significant influence on the invested entity, it shall be accounted for using equity method, and the remaining equity shall be deemed to be adjusted by equity method when it is acquired; If the remaining equity after disposal cannot exercise joint control or exert significant influence on the invested entity, the accounting treatment shall be carried out in accordance with the relevant provisions of the recognition and measurement standards for financial instruments. The difference between the fair value and the book value on the date of losing control shall be included in the current profit and loss. Before the Group obtains control of the invested entity, other comprehensive income recognized due to the use of equity method accounting or recognition and measurement standard accounting for financial instruments, the same basis shall be adopted as the invested to directly dispose of related assets or liabilities for accounting treatment when losing control of the invested entity. Changes in the owners' equity other than net profits and loss, other comprehensive income and profit distribution in the net assets of the invested entity recognized as a result of adopting the equity method of accounting shall be carried forward to the current profit or loss when losing control of the invested entity. Among them, the remaining equity after disposal shall be accounted for using equity method, and other comprehensive income and other owners' equity shall be carried forward in proportion; if the remaining equity after disposal is accounted for according to the recognition and measurement standards for financial instruments, other comprehensive income and other owners' equity shall be carried forward.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

8. Long-term equity investments (Cont.)

8.4 Disposal of long-term equity investments (Cont.)

Where the Group has lost common control or significant influence on the invested entity due to the disposal of part of the equity investment, the remaining equity after disposal shall be accounted for in accordance with the Accounting Standards of Recognition and Measurement of Financial Instruments. The difference between the fair value and the carrying value at the date of loss of common control or significant influence shall be recorded in the current profit and loss. When the equity method is terminated, the other comprehensive income of the original equity investment shall be accounted for on the same basis as the invested entity's direct disposal of relevant assets or liabilities. The owners' equity recognized due to the change of owners' equity of the invested entity other than net profit and loss, other comprehensive income and profit distribution shall be transferred to the current investment income when the equity method is terminated.

The Group disposes of equity investments in subsidiaries through multiple transactions in a phased manner until it loses control. If the above transactions are package transaction, each transaction shall be treated as a transaction that disposes of equity investments in subsidiaries and loses control. Before the loss of control, the difference between the price of each disposal and the carrying value of the long-term equity investments corresponding to the disposed equity shall be first recognized as other comprehensive income, and then transferred to the current loss or loss of control when the control is lost.

9. Investment properties

Investment properties refer to properties held to earn rent or capital appreciation, or both. Including the land tenure that has been leased out, the land tenure that is held and ready to be transferred after appreciation, and the buildings that have been leased out.

Investment properties are initially measured according to costs. Subsequent expenses related to investment properties shall be included in the cost of investment properties if the economic benefits related to the assets are likely to flow in and their costs can be reliably measured. Other subsequent expenses shall be included in the current profit and loss when incurred.

The Group adopts the cost model for the subsequent measurement of investment properties, and depreciates or amortizes it in accordance with policies consistent with the rights of use of buildings and land tenure.

The amount of income from disposal, transfer, discarding as scrap or damage of investment properties after deducting the asset's carrying value and relevant taxation shall be written into current gains and losses.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

10. Fixed assets

Fixed assets are defined as the tangible assets which are held for the purpose of producing goods, providing labor services, lease or for operation and management, and have more than one accounting year of service life. Fixed assets shall only be recognized when the economic benefits associated with them are likely to flow into the Group and their costs can be measured reliably. Fixed assets are initially measured at cost and taking into account the impact of expected abandonment costs.

Subsequent expenses related to fixed assets, if the economic benefits related to the fixed assets are likely to flow in and their costs can be reliably measured, shall be included in the cost of fixed assets and the carrying value of the replaced part shall be derecognized. Other subsequent expenses other than this shall be included in the current profit and loss when incurred. The fixed assets shall be depreciated with the straight line method within the service life starting from the next month after reaching the expected usable state. The service life, expected residue value and annual depreciation rate of various fixed assets are as follows:

Items			Annual
	Service life	Expected net	depreciation rate
		residual rate (%)	(%)
Means of transport	4	5.00	23.75
Electronic equipment	3	10.00	30.00
Mechanical equipment	20	5.00	4.75
Other equipment	5	5.00	19.00

The estimated net residual value refers to the amount of fixed assets assumed to be at the end of the expected service life and at the end of the service life, the amount currently obtained by the Group from the disposal of this asset after deducting the estimated disposal cost.

When a fixed asset is disposed, or no economic benefit could be predicted through utilization or disposal of the same, the Company shall stop recognition of such fixed assets. The difference between the disposal income of the sale, transfer, scrapping or damage of fixed assets after deducting their carrying value and related taxes shall be included in the current profit and loss.

The Group reviews the service life, estimated net residual value and depreciation method of fixed assets at least at the end of the year, and any change shall be treated as changes in accounting estimates.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

11. Intangible assets

Intangible assets are mainly software.

Intangible assets are initially measured according to costs. Intangible assets with limited service life shall be amortized evenly using the straight line method over their expected service life from the point they are available for use. Intangible assets with uncertain service life shall not be amortized.

At the end of the year, the expected service life and the amortization method of intangible assets with limited service life shall be rechecked and adjustment shall be made as necessary.

12. Long-term prepaid expenses

Long-term prepaid expenses refer to various costs that have occurred and are apportioned by the current period and future periods which is longer than one year, which mainly includes the expenses for upgrading leased fixed assets. Long-term prepaid expenses shall be amortized evenly in stages during the expected benefit period.

13. Impairment of non-financial assets other than goodwill

On each balance sheet date, the Group checks whether there are signs of possible impairment of long-term equity investments, fixed assets, intangible assets and other assets with determined service life. If there are signs of impairment of such assets, the recoverable amount shall be estimated.

The estimated recoverable amount of an asset is based on a single asset. If it is difficult to estimate the recoverable amount of a single asset, the recoverable amount of the asset group shall be determined based on the asset group to which the asset belongs. The recoverable amount is the higher of the net amount of the fair value of the asset or asset group less the disposal expenses and the present value of the estimated future cash flow.

If the recoverable amount of an asset is lower than its book value, the impairment provisions shall be accrued according to the difference and included in the current profit and loss.

The asset impairment loss shall be not returned in a later accounting period once it is confirmed.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

14. Employee benefits

Accounting treatment method of short-term employee benefits

The Group recognizes the actual short-term employee benefits as a liability during the accounting period in which employees provide services to it, and is included in the current profit and loss or related asset costs. Employee welfare incurred by the Group is included in current profit and loss or related asset costs according to the actual amount incurred. If employee welfare is non-monetary welfare, it shall be measured at fair value.

During the accounting period when the employees provide services for the Group, the Group shall calculate and determine the corresponding amount of employee benefits according to the specified calculation basis and proportion of accrual according to the medical insurance, employment injury insurance, maternity insurance and other social insurance and housing provident fund paid by the Group for the employees, as well as the labor union funds and employee education funds accrued according to the regulations. The corresponding liabilities shall be recognized and included in the current profit and loss or related asset costs.

Accounting treatment method of post-employment benefits

In the accounting period when the employees provide services to the Group, the Group shall confirm the payable deposit amount calculated by the defined contribution plan as liabilities, and shall include it in the current profits and losses or related asset costs.

Accounting treatment method of dismissal benefits

If the Group provides dismissal benefits to employees, the employee benefits liabilities arising from termination benefits shall be recognized and recorded in current loss and profit at the earlier of the date when the Group cannot unilaterally withdraw the termination benefits provided by the labor relationship cancellation plan or the layoff proposal and the date when the Group recognizes the costs or expenses in relation to the restructuring of paying termination benefits.

Accounting treatment method of other long-term employee benefits

Other long-term employee benefits that meet the requirements of the defined contribution plans, accounting treatment shall be conducted in accordance with relevant provisions of the above defined contribution plan.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

15. Recognition of income

15.1 Interest income

Interest income from all interest-bearing financial instruments refers to interest income from debt rights financial assets invested by the Group. Interest income is calculated by multiplying the effective interest rate by the balance of financial assets. Except for financial assets with credit impairment, the interest income is calculated by multiplying the effective rate by amortized cost (i.e. the net amount after deducting the expected credit impairment provision).

15.2 Fee and commission income

The Group collects fees and commissions by providing a variety of services to customers.

Fee and commission income can only be recognized when the following conditions are met at the same time:

The parties to the contract have approved the contract and promised to perform their respective obligations;
The contract clarifies the rights and obligations of the parties to the contract related to the provision of services;
The contract has set out clear payment terms related to the provision of services;
The nature of the contract is commercial, that is, the performance of the contract will change the risk, time distribution or amount of future cash flow of the enterprise;
Consideration to which the Group is entitled as a result of the provision of services to customers is likely to be recovered.

For those who do not meet the above conditions, the consideration collected can only be recognized as income when they no longer have the remaining obligation to provide services to customers and the consideration collected from customers does not need to be returned; Otherwise, the consideration already received shall be treated as a liability for accounting treatment.

If one of the following conditions is met, income shall be recognized within a certain period of time, otherwise income shall be recognized at a certain point in time:

Customers obtain and consume the economic benefits arising from the contract performance at the Group in this process;
The services produced by the Group during its contract performance have irreplaceable uses, and the Group has the right to collect money for the accumulated performance that has been completed so far throughout the contract period.

For income recognition at a certain point in time, the following signs shall be considered:

The Group is entitled to current payment rights in respect of the service, i.e. the customer has current payment obligations in respect of the service.
The Group has provided all or phased services in accordance with the terms of the contract, and the customers have received the services.

Huarong Rongde Asset Management Company Limited

Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan

Other signs to show the customer has actually received the service.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

15. Income recognition (Cont.)

15.3 Commodity sales income

The Group has fulfilled its performance obligation in the contract, i.e. the income shall be recognized when the customer obtains control of the relevant goods or services. Obtaining control of related goods or services means that customers can lead the use of the goods or the provision of the services and obtain almost all economic benefits therefrom.

The amount of income from sales of goods shall be measured according to the transaction price allocated to each item of the performance obligation. Transaction price refers to the amount of consideration that an enterprise will be entitled to receive due to the transfer of goods to customers. The Group determines the transaction price according to the terms of the contract and the past practices, as well as the influence of variable consideration, major financing components in the contract, non-cash consideration, consideration payable to customers and other factors.

The part that the Group has obtained unconditional collection rights shall be recognized as receivables, the remaining part shall be recognized as contract assets, and the loss reserves shall be recognized for receivables and contract assets based on expected credit losses. If the contract price received or receivable by the Group has exceeded the completed labor service, the excess shall be recognized as a contract liability. The Group presents the net amount of contractual assets and contractual liabilities under the same contract.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

16. Government Grants

Government grants are the monetary assets and non-monetary assets from the government to the Group at no consideration. The government subsidy shall be recognized when it meets the conditions attached to the government grant and is receivable.

If the government grants are in the form of a transfer of a monetary asset, it is measured at the amount received or receivable.

Government grants related to assets are recognized as deferred income and distributed equally over the life of the relevant assets, and included in the current profit and loss.

For a government grant related to income, if the grant is compensation for related expenses and losses to be incurred in the subsequent period, the grant is recognized as deferred income and recognized in profit or loss over the periods in which the related expenses are recognized. If the grant is compensation for related expenses and losses already incurred, the grant is recognized immediately in profit or loss for the period. The Group classifies government grant of indistinguishable nature as income-related government grant as a whole.

Government grant relating to daily activities of the Group are recorded in other income according to the substance of economic business. Government grant not related to the daily activities of the Group are recorded in non-operating income and expenses.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

17. Income tax

The income tax expense includes current income tax and deferred income tax.

Current income tax

On the balance sheet date, the current income tax liabilities (or assets) formed in the current period and the previous period are measured by the expected income taxes (or return) calculated according to the provisions of the tax law.

Deferred income tax assets and deferred income tax liabilities

The difference between the carrying value of certain assets and liabilities items and the tax base, as well as the difference between the carrying value and tax base of items that are not recognized as assets and liabilities but whose tax base can be determined in accordance with tax laws. For temporary differences, deferred income tax assets and deferred income tax liabilities are recognized using the balance sheet debt method.

In general, all temporary differences are recognized as relevant deferred income tax. However, for temporary deductible difference, the Group recognizes relevant deferred income tax assets to the extent that it is likely to obtain taxable income to offset temporary deductible differences. Besides, temporary difference related to the initial recognition of goodwill and related to the initial recognition of assets or liabilities arising from transactions that are neither a business combination nor affect accounting profits and taxable income (or deductible loss) shall not be recognized as related deferred income tax assets or liabilities.

For the deductible losses and tax deductions that can be carried over to the subsequent years, the corresponding deferred income tax assets are confirmed to the extent that the future taxable income that is likely to be used to deduct the deductible loss and tax deductions is limited .

Besides, for deferred income tax liabilities arising from the temporary taxable difference associated with investments in subsidiaries, associates and joint ventures recognized by the Group, unless the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. For temporary deductible difference associated with the investments of subsidiaries, associates and joint ventures, only when the temporary difference is highly likely to be reversed for the foreseeable future, and taxable income for the temporary deductible difference is highly likely to be available in the future, the Group shall recognize the deferred income tax assets.

In order to measure the deferred tax on lease transactions in which the Group recognizes use-right assets and related lease liabilities, the Group shall determine the tax deduction is a use-right asset or lease liability in the first place.

Huarong Rongde Asset Management Company Limited


Notes to the Financial Statements (Cont.)
For the year ended 31 December 2020	Expressed in Renminbi Yuan
IV.	Significant accounting policies and accounting estimate (Cont.)

17. Income tax (Cont.)

Deferred income tax assets and deferred income tax liabilities(Cont.)

For lease transactions for which tax deduction is attributable to lease liabilities, the Group shall apply the requirements of Accounting Standards for Business Enterprises No.18- Income Tax to the entire lease transaction. Temporary differences related to right-of-use assets and lease liabilities are evaluated on a net basis. The net amount of lease payments where the depreciation of the right-of-use assets exceeds the principal portion of the lease liabilities will generate a temporary deductible difference.

On the balance sheet date, deferred income tax assets and liabilities shall be measured at the tax rate that is expected to apply in the period in which relevant asset is realized or relevant liability is settled in accordance with tax law.

Except for the current income tax and deferred income tax related to transactions and events directly included in other comprehensive income or directly included in owners' equity, included in other comprehensive income or owners' equity, and the deferred income tax expenses arising from business combination to adjust the carrying value of goodwill, other current income tax and deferred income tax expense or gains shall be included in the current profit and loss.

On the balance sheet date, the carrying value of deferred income tax assets shall be reviewed. The carrying value of deferred income tax assets shall be written down if sufficient taxable income will not be available for the coming period to offset the benefits of deferred income tax assets. When it is probable to obtain sufficient taxable income taxes, such write-down amount shall be subsequently reversed.

Offset of income tax

When the legal right to settle in net amount is available and intend to settle in net amount or assets acquisition and liabilities settlement are conducted at the same time, the current income tax assets and current income tax liabilities of the Group shall be presented in net amount after offset.

When the legal right to settle the current income tax assets and current income tax liabilities in net amount is available, and the deferred income tax assets and deferred income tax liabilities are related to the income tax levied on the same taxpayer by the same tax collection department or different taxpayers. However, in the future period of reversal of important deferred income tax assets and liabilities, the taxpayer involved intends to settle the current income tax assets and liabilities with a net amount or acquire assets and pay off liabilities at the same time, the assets and deferred income tax liabilities of the Group shall be presented in net amount after offset.

100

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China Huarong Asset Management Co. Ltd. published this content on 28 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2021 13:53:03 UTC.

Latest news about China CITIC Financial Asset Management Co., Ltd.

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Company Profile

China CITIC Financial Asset Management Co Ltd, formerly China Huarong Asset Management Co Ltd, is a China-based company mainly engaged in asset management business. The Company operates through three segments. Distressed Asset Management Operations segment is engaged in distressed asset management, debt equity swap asset management, the management of non-performing assets carried out by subsidiaries distressed asset management business conducted by its subsidiaries, distressed asset-based special situations investments business and distressed asset-based property development business. Financial Services segment is mainly engaged in financial leasing business. Asset Management and Investment Operations segment is mainly engaged in private equity funds business, financial investments business, international business, and other businesses.

Sector

Investment Management & Fund Operators

Calendar

2024-08-26 - Q2 2024 Earnings Release (Projected)

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Income Statement Evolution

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Ratings for China CITIC Financial Asset Management Co., Ltd.

Trading Rating

Investor Rating

ESG Refinitiv

B-

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Analysts' Consensus

Sell

Buy

Mean consensus

HOLD

Number of Analysts

Last Close Price

0.3055 CNY

Average target price

0.332 CNY

Spread / Average Target

+8.68%

Consensus

EPS Revisions

Estimates Revisions

Annual profits - Rate of surprise

Company calendar

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